San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 1. P.I. MANUFACTURING, INC. v. P.I. MANUFACTURING SUPERVISORS AND FOREMAN ASSOCIATION and the NATIONAL LABORUNION G.R. No. 167217 February 4, 2008 SANDOVAL-GUTIERREZ ARTICLE 124 DOCTRINE: The Court adopts the policy that requires recognition and validation of wage increases given by employers either unilaterally or as a result of collective bargaining negotiations in an effort to correct wage distortions. FACTS: P.I. Manufacturing, Inc. is a domestic corporation engaged in the manufacture and sale of household appliances. P.I. Manufacturing Supervisors and Foremen Association (PIMASUFA) is an organization of supervisors and foremen, joined in this case by its federation, the National Labor Union (NLU). In 1987, the President signed into law RA 6640 providing, among others, an increase in the statutory minimum wage and salary rates of employees and workers in the private sector. Section 2 provides: The statutory minimum wage rates of workers and employees in the private sector, whether agricultural or non-agricultural, shall be increased by ten pesos (P10.00) per day, except non-agricultural workers and employees outside Metro Manila who shall receive an increase of eleven pesos (P11.00) per day: Provided, That those already receiving above the minimum wage up to one hundred pesos (P100.00) shall receive an increase of ten pesos (P10.00) per day. Excepted from the provisions of this Act are domestic helpers and persons employed in the personal service of another. P.I. and PIMASUFA entered into a new Collective Bargaining Agreement (1987 CBA) whereby the supervisors were granted an increase of P625.00 per month and the foremen, P475.00 per month. The increases were made retroactive prior to the passage of R.A. No. 6640, and every year thereafter until July 26, 1989. In 1989, PIMASUFA and NLU filed a complaint with the Arbitration Branch of the NLRC, charging P.I. with violation of R.A. No. 6640. They attached to their complaint a numerical illustration of wage distortion resulting from the implementation of R.A. No. 6640. LABOR ARBITER RULING: in favor of PIMASUFA. NLRC RULING: affirmed the Labor Arbiters judgment. CA RULING: affirmed the Decision of the NLRC with modification by raising the 13.5% wage increase to 18.5%. ISSUE: Whether the increase resulting from any wage distortion caused by the implementation of Republic Act 6640 is waivable. SC RULING: YES. R.A. No. 6727, otherwise known as the Wage Rationalization Act, explicitly defines wage distortion as: a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation. In this case, the Court of Appeals correctly ruled that a wage distortion occurred due to the implementation of R.A. No. 6640. Significantly, the 1987 CBA wage increases almost doubled that of the P10.00 increase under R.A. No. 6640. Clearly, the gap between the wage rates of the supervisors and those of the foremen was inevitably reestablished. It continued to broaden through the years. Interestingly, such gap as re-established by virtue of the CBA is more than a substantial compliance with R.A. No. 6640. The CA erred in not taking into account the provisions of the CBA viz-a-viz the wage increase under the said law. To direct petitioner to grant an across-the-board increase to all of them, regardless of the amount of wages they are already receiving, would be harsh and unfair to the former. 1 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS To compel employers simply to add on legislative increases in salaries or allowances without regard to what is already being paid, would be to penalize employers who grant their workers more than the statutory prescribed minimum rates of increases. Clearly, this would be counter-productive so far as securing the interests of labor is concerned. At this juncture, it must be stressed that a CBA constitutes the law between the parties when freely and voluntarily entered into. Here, it has not been shown that respondent PIMASUFA was coerced or forced to sign the 1987 CBA. All of its 13 officers signed the CBA with the assistance of respondent NLU.
2 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 2. BANKARD EMPLOYEES UNION-WORKERS ALLIANCE TRADE UNIONS v. NATIONAL LABOR RELATIONS COMMISSION and BANKARD, INC. G.R. No. 140689 February 17, 2004 CARPIO MORALES, J.: ARTICLE 124 DOCTRINE: The four elements of wage distortion are: (1.) An existing hierarchy of positions with corresponding salary rates; (2) A significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one; (3) The elimination of the distinction between the two levels; and (4) The existence of the distortion in the same region of the country. FACTS: Bankard, Inc. classifies its employees by levels, to wit: Level I to V. In 1993, its Board of Directors approved a New Salary Scale for the purpose of making its hiring rate competitive in the industry’s labor market. The New Salary Scale increased the hiring rates of new employees, to wit: Levels I and V by P1,000, and Levels II, III and IV by P900. Accordingly, the salaries of employees who fell below the new minimum rates were also adjusted to reach such rates under their levels. Bankard’s move drew the Bankard Employees Union-WATU, the duly certified exclusive bargaining agent of the regular rank and file employees of Bankard, to press for the increase in the salary of its old, regular employees. Bankard took the position, however, that there was no obligation on the part of the management to grant to all its employees the same increase in an across-the-board manner. As the continued request remained unheeded, it filed a Notice of Strike on the ground of discrimination and other acts of Unfair Labor Practice. NLRC RULING: finding no wage distortion, dismissed the case for lack of merit. CA RULING: denied the same for lack of merit. Hence, the present petition. ISSUE: Whether the unilateral adoption by an employer of an upgraded salary scale that increased the hiring rates of new employees without increasing the salary rates of old employees resulted in wage distortion within the contemplation of Article 124 of the Labor Code. SC RULING: NO. Upon the enactment of R.A. No. 6727 (WAGE RATIONALIZATION ACT, amending, among others, Article 124 of the Labor Code) on June 9, 1989, the term wage distortion was explicitly defined as: ... a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation. The four elements of wage distortion are: (1.) An existing hierarchy of positions with corresponding salary rates; (2) A significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one; (3) The elimination of the distinction between the two levels; and (4) The existence of the distortion in the same region of the country. Involved in the classification of employees are various factors such as the degrees of responsibility, the skills and knowledge required, the complexity of the job, or other logical basis of differentiation. The differing wage rate for each of the existing classes of employees reflects this classification. Petitioner maintains that for purposes of wage distortion, the classification is not one based on levels or ranks but on two groups of employees, the newly hired and the old, in each and every level, and not between and among the different levels or ranks in the salary structure. The employees of Bankard have been historically classified into levels, i.e. I to V, and not on the basis of their length of service. The Union cannot make a contrary classification of Bankard’s employees without encroaching 3 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS upon recognized management prerogative of formulating a wage structure, in this case, one based on level. It is thus clear that there is no hierarchy of positions between the newly hired and regular employees of Bankard, hence, the first element of wage distortion is wanting. For purposes of determining the existence of wage distortion, employees cannot create their own independent classification and use it as a basis to demand an across-the-board increase in salary. Even assuming that there is a decrease in the wage gap between the pay of the old employees and the newly hired employees, said gap is not significant as to obliterate or result in severe contraction of the intentional quantitative differences in the salary rates between the employee group. The classification under the wage structure is based on the rank of an employee, not on seniority. For this reason, wage distortion does not appear to exist.
4 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 3. CENTRAL AZUCARERA DE TARLAC v. CENTRAL AZUCARERA DE TARLAC LABOR UNION-NLU G.R. No. 188949 July 26, 2010 NACHURA, J.: 13th MONTH PAY DOCTRINE: The term basic salary of an employee for the purpose of computing the 13th-month pay was interpreted to include all remuneration or earnings paid by the employer for services rendered, but does not include allowances and monetary benefits which are not integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night differential and holiday pay, and cost-of-living allowances. However, these salary-related benefits should be included as part of the basic salary in the computation of the 13th-month pay if, by individual or collective agreement, company practice or policy, the same are treated as part of the basic salary of the employees. FACTS: Central Azucarera de Tarlac is a domestic corporation engaged in the business of sugar manufacturing, while Central Azucarera de Tarlac Labor Union-NLU is a legitimate labor organization which serves as the exclusive bargaining representative of the Central's rank-and-file employees. The controversy stems from the interpretation of the term basic pay, essential in the computation of the 13th-month pay. In compliance with P.D. No. 851, the Central granted its employees the mandatory 13th month pay since 1975. The formula used was: Total Basic Annual Salary divided by 12. Included in the computation of the Total Basic Annual Salary were the following: basic monthly salary; first 8 hours overtime pay on Sunday and legal/special holiday; night premium pay; and vacation and sick leaves for each year. Throughout the years, the Central used this computation until 2006. After a strike staged by the Union, the Central gave the employees their 13th-month pay based on the employees total earnings during the year divided by 12. The latter objected to this computation. The Union filed a complaint against for money claims based on the alleged diminution of benefits/erroneous computation of 13th -month pay before the Regional Arbitration Branch of the NLRC. LA RULING: dismissed the complaint and declared that the Central had the right to rectify the error in the computation of the 13th-month pay of its employees. NLRC RULING: reversed the Labor Arbiter. CA RULING: affirmed the decision and resolution of the NLRC. Hence, the petition. ISSUE: Whether there was an error in the computation of the employees' 13th month pay. SC RULING: YES. The 13th-month pay mandated by P.D. No. 851 represents an additional income based on wage but not part of the wage. It is equivalent to one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year. All rank-and-file employees, regardless of their designation or employment status and irrespective of the method by which their wages are paid, are entitled to this benefit, provided that they have worked for at least one month during the calendar year. If the employee worked for only a portion of the year, the 13th-month pay is computed pro rata. It is clear that there could have no erroneous interpretation or application of what is included in the term basic salary for purposes of computing the 13th-month pay of employees. From the inception of P.D. No. 851 on December 16, 1975, clear-cut administrative guidelines have been issued to insure uniformity in the interpretation, application, and enforcement of the provisions of P.D. No. 851 and its implementing regulations. As correctly ruled by the CA, the practice of the Central in giving 13th-month pay based on the employees gross annual earnings which included the basic monthly salary, premium pay for work on rest days and special holidays, night shift differential pay and holiday pay continued for almost thirty (30) years and has ripened into a company policy or practice which cannot be unilaterally withdrawn. 5 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS The argument of the Central that the grant of the benefit was not voluntary and was due to error in the interpretation of what is included in the basic salary deserves scant consideration. No doubtful or difficult question of law is involved in this case. The voluntariness of the grant of the benefit was manifested by the number of years the employer had paid the benefit to its employees. The Central only changed the formula in the computation of the 13th-month pay after almost 30 years and only after the dispute between the management and employees erupted. This act of changing the formula at this time cannot be sanctioned, as it indicates a badge of bad faith.
6 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 4. PEOPLES BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.) vs. THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN G.R. No. 179652 March 6, 2012 VELASCO, JR., J.: ARTICLE 128 DOCTRINE: Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully empowered to make a determination as to the existence of an employer-employee relationship in the exercise of its visitorial and enforcement power, subject to judicial review, not review by the NLRC. FACTS: Jandeleon Juezan filed a complaint against Peoples Broadcasting Service (Bombo) with the DOLE Regional Office No. VII, Cebu City, for illegal deduction, nonpayment of service incentive leave, 13th month pay, among others. After the conduct of summary investigations, and after the parties submitted their position papers, the DOLE Regional Director found that Juezan was an employee of Bombo, and was entitled to his money claims. Bombo sought reconsideration of the Directors Order, but failed. The Acting DOLE Secretary dismissed Bombo’s appeal. When the matter was brought before the CA, where Bombo claimed that it had been denied due process, it was held that Bombo was accorded due process as it had been given the opportunity to be heard, and that the DOLE Secretary had jurisdiction over the matter, as the jurisdictional limitation imposed by Article 129 of the Labor Code on the power of the DOLE Secretary under Art. 128(b) of the Code had been repealed by Republic Act No. (RA) 7730. SC reversed the CA Decision and the complaint against Bombo was dismissed. The Court found that there was no employer-employee relationship between Bombo and Juezan. It was held that while the DOLE may make a determination of the existence of an employer-employee relationship, this function could not be co-extensive with the visitorial and enforcement power provided in Art. 128(b) of the Labor Code, as amended by RA 7730. The NLRC was held to be the primary agency in determining the existence of an employer-employee relationship. From this Decision, the Public Attorneys Office (PAO) filed a Motion for Clarification of Decision (with Leave of Court). The PAO sought to clarify as to when the visitorial and enforcement power of the DOLE be not considered as co-extensive with the power to determine the existence of an employer-employee relationship. The SC revisits its former conclusion. ISSUE: Whether DOLE can make a determination of the existence of employer-employee relationship. SC RULING: YES. No limitation in the law was placed upon the power of the DOLE to determine the existence of an employeremployee relationship. No procedure was laid down where the DOLE would only make a preliminary finding, that the power was primarily held by the NLRC. The law did not say that the DOLE would first seek the NLRC’s determination of the existence of an employer-employee relationship, or that should the existence of the employeremployee relationship be disputed, the DOLE would refer the matter to the NLRC. The DOLE must have the power to determine whether or not an employer-employee relationship exists, and from there to decide whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor Code, as amended by RA 7730. The determination of the existence of an employer-employee relationship by the DOLE must be respected. The expanded visitorial and enforcement power of the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could, by the simple expedient of disputing the employer-employee relationship, force the referral of the matter to the NLRC. If the DOLE makes a finding that there is an existing employer-employee relationship, it takes cognizance of the matter, to the exclusion of the NLRC. The DOLE would have no jurisdiction only if the employer-employee relationship has already been terminated, or it appears, upon review, that no employer-employee relationship existed in the first place. If a complaint is brought before the DOLE to give effect to the labor standards provisions of the Labor Code or other labor legislation, and there is a finding by the DOLE that there is an existing employer-employee relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC. If the DOLE finds that there is no employeremployee relationship, the jurisdiction is properly with the NLRC. If a complaint is filed with the DOLE, and it is 7 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code. If a complaint is filed with the NLRC, and there is still an existing employer-employee relationship, the jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be questioned through a petition for certiorari under Rule 65 of the Rules of Court.
8 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 5. MRS. ALBERTA YANSON v. SECRETARY OF LABOR AND EMPLOYMENT G.R. No. 159026 February 11, 2008 AUSTRIA-MARTINEZ, J.: ARTICLE 128 DOCTRINE: The posting of the proper amount of the appeal bond under Article 128 (b) is mandatory for the perfection of an appeal from a monetary award in labor standard cases. FACTS: In 1998, Mardy Cabigo and 40 other workers filed with DOLE Bacolod a request for payroll inspection of Hacienda Valentin Balabag owned by Alberta Yanson. DOLE Bacolod conducted an inspection of the establishment and issued a Notice of Inspection Report, finding Yanson liable for the following violations of labor standard laws: 1. Underpayment of salaries and wages (workers being paid a daily rate of P90.00 since 1997 and P75.00 prior to such year); 2. Non-payment of 13th month pay for two (2) years; 3. Non-payment of Social Amelioration Bonus (SAB) for two (2) years; 4. Non-payment of employers 1/3 carabao share. In addition, DOLE Bacolod scheduled a summary investigation. Yanson did not appear in any of the scheduled hearings, or present any pleading or document. In a Compliance Order, DOLE Bacolod directed Yanson to pay a total of P372,444 and to correct existing violations of occupational safety and health standards. It then issued a Writ of Execution. Yanson filed with public respondent a Verified Appeal and posted a bond. SECRETARY OF LABOR RULING: dismissed the appeal. CA RULING: Petition for Certiorari was denied due course and dismissed. Hence, the present recourse. ISSUE: 1. Whether the compliance order by DOLE Bacolod, in the exercise of its visitorial and enforcement power, was proper. YES 2. Whether the appeal was perfected. NO. SC RULING: For its perfection, the appeal was subject to the requirements prescribed under Article 128 of the Labor Code, as amended by Republic Act No. 7730, viz.: Art. 128. Visitorial and Enforcement Power. - x x x (b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, exc ept in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection. An order issued by the duly authorized representative of the Secretary of Labor and Employment under this article may be appealed to the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed from. When Yanson filed her Verified Appeal and Supplement to the Verified Appeal, Public respondent rejected said appeal for insufficiency of the appeal bond. The posting of the proper amount of the appeal bond under Article 9 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 128 (b) is mandatory for the perfection of an appeal from a monetary award in labor standard cases. Also applying the Implementing Rules, there is one other reason for holding that Yanson failed to perfect her appeal. It is of record that she received Compliance Order issued by DOLE-Bacolod. She was put on actual notice not only of the existence of the Compliance Order but also of the summary investigation of her establishment. It behooves her to file a timely appeal to public respondent or object to the conduct of the investigation. Yanson did neither, opting instead to sit idle and wait until the following year to question the investigation and resultant order, in the guise of opposing the writ of execution. In fine, the CA was correct in holding that public respondent did not commit grave abuse of discretion in rejecting the appeal due to the insufficiency of her appeal bond. Even on its substance, her appeal would still not prosper. The determination made by DOLE-Bacolod on this matter binds the Court, especially as it was not reversed by public respondent and the CA.
10 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 6. BALLADARES ET. AL. v. PEAK VENTURES CORPORATION G.R. No. 161794 June 16, 2009 Nachura, J.: ART. 128: VISITORIAL AND ENFORCEMENT POWERS OF THE DOLE REGIONAL DIRECTOR DOCTRINE: The visitorial and enforcement powers of the DOLE Regional Director to order and enforce compliance with labor standard laws can be exercised even when the individual claim exceeds P5,000. However, if the labor standards case is covered by the exception clause in Article 128 (b) of the Labor Code, then the Regional Director will have to endorse the case to the appropriate Arbitration Branch of the NLRC. FACTS: Petitioners Nestor J. Balladares et al., were employed by respondent Peak Ventures Corp as security guards and were assigned at the premises of respondent YMOAA. They filed a complaint for underpayment of wages against their employer, Peak Ventures, with the DOLE. Acting on the complaint, DOLE conducted an inspection of Peak Ventures and the following violations were noted: underpayment of the minimum wage and other auxiliary benefits; pertinent employment records were not available at the time of inspection. A Notice of Inspection Result was issued to Peak Ventures instructing them to effect restitution and/or file its objections within five working days from receipt thereof. Respondent failed to correct the violations or contest the findings as required, hence, the parties were summoned for hearing. Peak Ventures moved to implead its client YMOAA, claiming that any underpayment of wages arose from the failure of YMOAA to pay Peak Ventures the amount due petitioners as prescribed by various wage orders. After the hearing, DOLE Regional Director Maximo Lim rendered judgment in favor of petitioners and ruled that the contractor was jointly and severally liable with the principal. Lim averred that because Peak Ventures failed to controvert the complaint and its repeated denial to give access to records, it is deemed to have waived its constitutional right to due process. Petitioners were awarded P1,106,298. Peak Ventures filed a motion for reconsideration, but the same was denied prompting them to appeal to the CA. CA RULING: The CA granted the petition, ruling that the Regional Director had no jurisdiction to hear and decide the case, because the claims of each of the petitioners exceeded P5,000.00, and the power to adjudicate such claims belonged to the Labor Arbiter, pursuant to Servandos, Inc. v. Secretary of Labor. The appellate court ratiocinated that this exclusive jurisdiction of the Labor Arbiters was confirmed by Article 129 of the Labor Code, which excludes from the jurisdiction of the Regional Directors or any hearing officer of the DOLE the power to hear and decide claims of employees arising from employer-employee relations exceeding the amount of P5,000.00 for each employee. ISSUE: Does DOLE Regional Director has jurisdiction to even though the claims of the complainants exceeded P5,000? SC RULING: YES. Yes. The Supreme Court ruled that the visitorial and enforcement powers of the DOLE Regional Director to order and enforce compliance with labor standard laws can be exercised even when the individual claim exceeds P5,000. However, if the labor standards case is covered by the exception clause in Article 128 (b) of the Labor Code, then the Regional Director will have to endorse the case to the appropriate Arbitration Branch of the NLRC. In order to divest the Regional Director or his representatives of jurisdiction, the following elements must be present: (a) that the employer contests the findings of the labor regulations officer and raises issues thereon; (b) that in order to resolve such issues, there is a need to examine evidentiary matters; and (c) that such matters are not verifiable in the normal course of inspection. The rules also provide that the employer shall raise such objections during the hearing of the case or at any time after receipt of the notice of inspection results. In the case at bar, Peak Ventures did not contest the findings of the labor regulations officer during the hearing or after receipt of notice of the inspection results. Accordingly, we find no sufficient reason to warrant the certification of the instant case to the LA and divest the Regional Director of jurisdiction. Respondent did not contest the findings of the labor regulations officer. Even during the hearing, respondent never denied that petitioners were not paid correct wages and benefits. 11 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 7. ALLIED INVESTIGATION BUREAU, INC., v. SECRETARY OF LABOR GR No. 122006 November 24, 1999 Kapunan, J. ART. 128 VISITORIAL AND ENFORCEMENT POWERS OF THE DOLE REGIONAL DIRECTOR DOCTRINE: While it is true that under Articles 129 and 217of the Labor Code, the Labor Arbiter has jurisdiction to hear and decide cases where the aggregate money claims of each employee exceedsP5,000.00, said provisions of law do not contemplate nor cover the visitorial and enforcement powers of the Secretary of Labor or his duly authorized representatives. Said powers are defined and set forth in Art. 128 of the Labor Code. FACTS: Petitioner Allied Investigation Bureau is a security agency which entered into a security contract with Novelty Philippines Inc (NPI). Private respondents Melvin Pelayo and Samuel Sucanel, two of the security guards assigned by petitioner to NPI, filed a complaint with the Office of respondent Regional Director Romeo Young, charging petitioner with non-compliance with a wage order increasing the minimum daily pay of workers. Regional Director Young conducted inspection visits at petitioners establishment and found that Petitioner failed to implement the wage increase. Petitioner was required to effect restitution and/or correction of the foregoing within five calendar days, or challenge the findings within five working days. Thereafter, a series of conferences and hearings were scheduled by the Regional Director to facilitate amicable settlement. However, despite due notice, petitioner failed to appear in any of said hearings. As a result, the Regional Director ruled in favor of private respondents and awarded them P807,570. Petitioners appealed the Order to respondent Secretary of Labor, without posting a cash or surety bond, as such the appeal was dismissed. Petitioner argues that the power to adjudicate money claims belongs to the Labor Arbiter who has exclusive jurisdiction over employees claims where the aggregate amount of the claims of each employee exceeds P5,000. ISSUE: Whether or not the DOLE Regional Director acted without jurisdiction in adjudicating the private respondents claims which were in excess of P5,000. SC RULING: Yes. While it is true that under Articles 129 and 217of the Labor Code, the Labor Arbiter has jurisdiction to hear and decide cases where the aggregate money claims of each employee exceedsP5,000.00, said provisions of law do not contemplate nor cover the visitorial and enforcement powers of the Secretary of Labor or his duly authorized representatives. Said powers are defined and set forth in Art. 128 of the Labor Code. Art. 128. Visitorial and enforcement power. – (a) The Secretary of Labor or his duly authorized representatives, including labor regulation officers, shall have access to employers records and premises at any time of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of this Code and of any labor law, wage order or rules and regulations issued pursuant thereto. (b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection. An order issued by the duly authorized representatives of the Secretary of Labor and Employment under this article may be appealed to the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding 12 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS company duly accredited by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed from. In the case at bar, the Office of respondent Regional Director conducted inspection visits at petitioners establishment on February 9 and 14, 1995 in accordance with the above-mentioned provision of law. In the course of said inspection, several violations of the labor standard provisions of the Labor Code were discovered and reported by Senior Labor Enforcement Officer Eduvigis A. Acero in his Notice of Inspection Results. It was on the bases of the aforesaid findings (which petitioner did not contest), that respondent Regional Director issued the assailed Order for petitioner to pay private respondents the respective wage differentials due them. Clearly, as the duly authorized representative of respondent Secretary of Labor, and in the lawful exercise of the Secretary’s visitorial and enforcement powers under Article 128 of the Labor Code, respondent Regional Director had jurisdiction to issue his impugned Order.
13 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 8. URBANES v. SECRETARY OF LABOR GR No. 122791 February 19, 2003 CARPIO-MORALES, J. ART. 128 VISITORIAL AND ENFORCEMENT POWERS OF THE DOLE REGIONAL DIRECTOR DOCTRINE: It is well settled in law and jurisprudence that where no employer-employee relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. In its complaint, private respondent is not seeking any relief under the Labor Code but seeks payment of a sum of money and damages on account of petitioner's alleged breach of its obligation under their Guard Service Contract. The action is with in the realm of civil law hence jurisdiction over the case belongs to the regular courts. While the resolution of the issue involves the application of labor laws, reference to the labor code was only for the determination of the solidary liability of the petitioner to the respondent where no employer-employee relation exists. FACTS: Petitioner Placido O. Urbanes, Jr., doing business under the name and style of Catalina Security Agency, entered into an agreement to provide security services to respondent Social Security System (SSS). During the effectivity of the agreement, petitioner, by letter of May 16, 1994, requested the SSS for the upward adjustment of their contract rate in view of Wage Order No. NCR-03. As SSS refused to comply, On June 29, 1994, petitioner filed a complaint with the DOLE-NCR against the SSS seeking the implementation of Wage Order No. NCR-03. In its position paper, the SSS prayed for the dismissal of the complaint on the ground that petitioner is not the real party in interest and has no legal capacity to file the same. In any event, it argued that if it had any obligation, it was to the security guards. On the other hand, petitioner in his position paper, citing Eagle Security Agency, Inc. v. NLRC, contended that the security guards assigned to the SSS do not have any legal basis to file a complaint against it for lack of contractual privity. Finding for petitioner, the Regional Director of the DOLE-NCR issued an Order for SSS to pay petitioner P1.6 million. SSS appealed to the Secretary of Labor, claiming that the Regional Director has no jurisdiction to issue the assailed order. The Secretary set aside the order and remanded the case. Petitioner filed the present petition for certiorari with the Supreme Court asserting that the Secretary of Labor does not have jurisdiction to review appeals from decisions of the Regional Directors in complaints filed under Art. 129 of the Labor Code. They claim that appeals from orders of Regional directors should be made with the NLRC. ISSUE: Whether or not the Secretary of Labor has jurisdiction to review appeals from decisions of the Regional Directors in complaints filed under Art. 129. SC RULING: No. Neither the petitioners contention nor the SSS’s is impressed with merit, rather, it is the RTC that has jurisdiction over the subject matter of the present case. It is well settled in law and jurisprudence that where no employer-employee relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. In its complaint, private respondent is not seeking any relief under the Labor Code but seeks payment of a sum of money and damages on account of petitioner's alleged breach of its obligation under their Guard Service Contract. The action is within the realm of civil law hence jurisdiction over the case belongs to the regular courts. While the resolution of the issue involves the application of labor laws, reference to the labor code was only for the determination of the solidary liability of the petitioner to the respondent where no employer-employee relation exists. In the case at bar, even if petitioner filed the complaint on his and also on behalf of the security guards, the relief sought has to do with the enforcement of the contract between him and the SSS which was deemed amended by virtue of Wage Order No. NCR-03. The controversy subject of the case at bar is thus a civil dispute, the proper forum for the resolution of which is the civil courts. 14 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Even if the petition was filed with the proper forum, it must still be dismissed for lack of cause of action. Under Art. 106 of the Labor Code: In the event that the contractor or subcontractor fails to pay the wage of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him. It is only when [the] contractor pays the increases mandated that it can claim an adjustment from the principal to cover the increases payable to the security guards. The conclusion that the right of the contractor (as principal debtor) to recover from the principal (as solidary co-debtor) arises only if he has paid the amounts for which both of them are jointly and severally liable is in line with Article 1217 of the Civil Code. In fine, the liability of the SSS to reimburse petitioner arises only if and when petitioner pays his employee-security guards the increases mandated by Wage Order No. NCR-03.
15 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 9. ZIALCITA, ET AL. v. PAL RO4-3-398-76. February 20, 1977 ART. 136 OF THE LABOR CODE FACTS: Complainant Zialcita, an international flight stewardess of PAL, was discharged from the service on account of her marriage. In separating Zialcita, PAL invoked its policy which stated that flight attendants must be single, and shall be automatically separated from employment in the event they subsequently get married. They claimed that this policy was in accordance with Article 132 of the Labor Code. On the other hand, Zialcita questioned her termination on account of her marriage, invoking Article 136 of the same law. ISSUE: Was Zialcita validly terminated on account of her marriage? SC RULING: NO. When Presidential Decree No. 148, otherwise known as the Women and Child Labor Law, was promulgated in 13 March 1973, PAL’s policy had met its doom. However, since no one challenged its validity, the said policy was able to obtain a momentary reprieve. Section 8 of PD148 is exactly the same provision reproduced verbatim in Article 136 of the Labor Code, which was promulgated on 1 May 1974 and took effect six months later. Although Article 132 enjoins the Secretary of Labor to establish standards that will ensure the safety and health of women employees and in appropriate cases shall by regulation require employers to determine appropriate minimum standards for termination in special occupations, such as those of flight attendants, it is logical to presume that, in the absence of said standards or regulations which are yet to be established, the policy of PAL against marriage is patently illegal. Article 136 is not intended to apply only to women employed in ordinary occupations, or it should have categorically expressed so. The sweepingintendment of the law, be it on special or ordinary occupations, is reflected in the whole text and supported by Article 135 that speaks of non-discrimination on the employment of women.
16 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 10. STAR PAPER CORPORATION v. SIMBOL GR No. 164774 April 12, 2006 Puno, J. ART. 136 OF THE LABOR CODE AND DISCRIMINATION. DOCTRINE: The questioned policy may not facially violate Article 136 of the Labor Code but it creates a disproportionate effect and under the disparate impact theory, the only way it could pass judicial scrutiny is a showing that it is reasonable despite the discriminatory, albeit disproportionate, effect. The failure of petitioners to prove a legitimate business concern in imposing the questioned policy cannot prejudice the employee’s right to be free from arbitrary discrimination based upon stereotypes of married persons working together in one company. FACTS: Petitioner Star Paper Corporation promulgated a company policy which states: 1. New applicants will not be allowed to be hired if in case he/she has [a] relative, up to [the] 3rd degree of relationship, already employed by the company. 2. In case of two of our employees (both singles [sic], one male and another female) developed a friendly relationship during the course of their employment and then decided to get married, one of them should resign to preserve the policy stated above. Respondents Ronaldo Simbol, and Wilfreda Comia are employees of Star Paper who claim that they were compelled to resign in view of an illegal company policy, after they married fellow co-workers. They filed a complaint for unfair labor practice and constructive dismissal against Star Paper Corp. Respondents submit that their dismissal violates the above provision. Petitioners allege that its policy "may appear to be contrary to Article 136 of the Labor Code" but it assumes a new meaning if read together with the first paragraph of the rule. The rule does not require the woman employee to resign. The employee spouses have the right to choose who between them should resign. Further, they are free to marry persons other than co-employees. Hence, it is not the marital status of the employee, per se, that is being discriminated. It is only intended to carry out its no-employment-for-relatives-within-the-third-degree-policy which is within the ambit of the prerogatives of management. LA RULING: The LA dismissed the complaint ruling that the policy against marriage between employees was a valid management prerogative. The ruling was affirmed by the NLRC. CA RULING: The CA reversed the above rulings and held that the dismissal of the respondents was illegal and ordering their reinstatement. ISSUE: Whether or not the policy of Star Paper requiring the resignation of either spouse-employee is in violation of Art. 136 of the Labor Code. SC RULING: Yes. The Supreme Court ruled that Petitioners’ sole contention that "the company did not just want to have two (2) or more of its employees related between the third degree by affinity and/or consanguinity is lame. That the second paragraph was meant to give teeth to the first paragraph of the questioned rule is evidently not the valid reasonable business necessity required by the law. It is significant to note that in the case at bar, respondents were hired after they were found fit for the job, but were asked to resign when they married a co-employee. Petitioners failed to show how the marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then an employee of the Repacking Section, could be detrimental to its business operations. Neither did petitioners explain how this detriment will happen in the case of Wilfreda Comia, then a Production Helper in the Selecting Department, who married Howard Comia, then a helper in the cutter-machine. The policy is premised on the mere fear that employees married to each other will be less efficient. If we uphold the questioned rule without valid justification, the employer can create policies based on an unproven presumption of a perceived danger at the expense of an employee’s right to security of tenure. Petitioners contend that their policy will apply only when one employee marries a co-employee, but they are free to marry persons other than co-employees. The questioned policy may not facially violate Article 136 of the Labor 17 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Code but it creates a disproportionate effect and under the disparate impact theory, the only way it could pass judicial scrutiny is a showing that it is reasonable despite the discriminatory, albeit disproportionate, effect. The failure of petitioners to prove a legitimate business concern in imposing the questioned policy cannot prejudice the employee’s right to be free from arbitrary discrimination based upon stereotypes of married persons working together in one company.
18 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 11. MA. LOURDES T. DOMINGO v. ROGELIO I. RAYALA G.R. No. 155831 February 18, 2008 NACHURA, J.: SEXUAL HARRASMENT DOCTRINES: 1. It is not necessary that the demand, request or requirement of a sexual favor be articulated in a categorical oral or written statement to be considered as sexual harassment. 2. The Chief Executive does not have unfettered discretion to impose a penalty other than the penalty provided by law for sexual harassment. FACTS: Petitioner Ma. Lourdes T. Domingo, then Stenographic Reporter III at the NLRC, filed a Compliant for sexual harassment against Respondent, NLRC Chairman Rogelio I. Rayala before the Secretary of Labor and Employment. She claimed that the respondent committed the following acts: 1. Holding and squeezing her shoulders; 2. Running his fingers across her neck and tickling her ear; 3. Having inappropriate conversations wither her; 4. Giving her money allegedly for school expenses with a promise of future privileges; and 5. Making statements with unmistakable sexual overtones. A committee was created to investigate the said allegations. The said committee found the respondent guilty of the offense charged and recommended the imposition of the minimum penalty provided under AO 250, which it erroneously stated as suspension for 6 months. However, the Secretary of Labor and employment recommended that the penalty should be suspension for 6 months and 1 day, in accordance with AO 250. The Office of the President, through Executive Secretary Zamora, concurred with the findings of the Committee but imposed the penalty of dismissal. The respondent assailed the decision claiming his acts do not constitute sexual harassment. CA RULING: The CA held that there was sufficient evidence on record to create moral certainty that the Respondent committed the acts he was charged with. ISSUE: 1. Whether or not the Respondent is guilty of sexual harassment? 2. Whether or not the Office of the President may impose the penalty of dismissal? SC RULING: 1. Yes. If we were to test Rayala’s acts strictly by the standards set in Section 3, RA 7877, he would still be administratively liable. It is true that this provision calls for a "demand, request or requirement of a sexual favor." But it is not necessary that the demand, request or requirement of a sexual favor be articulated in a categorical oral or written statement. It may be discerned, with equal certitude, from the acts of the offender. Holding and squeezing Domingo’s shoulders, running his fingers across her neck and tickling her ear, having inappropriate conversations with her, giving her money allegedly for school expenses with a promise of future privileges, and making statements with unmistakable sexual overtones – all these acts of Rayala resound with deafening clarity the unspoken request for a sexual favor. Likewise, contrary to Rayala’s claim, it is not essential that the demand, request or requirement be made as a condition for continued employment or for promotion to a higher position. It is enough that the respondent’s acts result in creating an intimidating, hostile or offensive environment for the employee.45 That the acts of Rayala generated an intimidating and hostile environment for Domingo is clearly shown by the common factual finding of the Investigating Committee, the OP and the CA that Domingo reported the matter to an officemate and, after the last incident, filed for a leave of absence and requested transfer to another unit. 2. No. Under AO 250, the penalty for the first offense is suspension for six (6) months and one (1) day to one (1) year, while the penalty for the second offense is dismissal.52 On the other hand, Section 22(o), Rule XVI of the Omnibus Rules Implementing Book V of the Administrative Code of
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San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 52 A(15) of the Revised Uniform Rules on Administrative Cases in the Civil Service54 both provide that the first offense of disgraceful and immoral conduct is punishable by suspension of six (6) months and one (1) day to one (1) year. A second offense is punishable by dismissal. Under the Labor Code, the Chairman of the NLRC shall hold office during good behavior until he or she reaches the age of sixty-five, unless sooner removed for cause as provided by law or becomes incapacitated to discharge the duties of the office.55 In this case, it is the President of the Philippines, as the proper disciplining authority, who would determine whether there is a valid cause for the removal of Rayala as NLRC Chairman. This power, however, is qualified by the phrase "for cause as provided by law." Thus, when the President found that Rayala was indeed guilty of disgraceful and immoral conduct, the Chief Executive did not have unfettered discretion to impose a penalty other than the penalty provided by law for such offense. As cited above, the imposable penalty for the first offense of either the administrative offense of sexual harassment or for disgraceful and immoral conduct is suspension of six (6) months and one (1) day to one (1) year. Accordingly, it was error for the Office of the President to impose upon Rayala the penalty of dismissal from the service, a penalty, which can only be imposed upon commission of a second offense.
20 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 12. PHILIPPINE AEOLUS AUTOMOTIVE UNITED CORPORATION and/or FRANCIS CHUA v. NATIONAL LABOR RELATIONS COMMISSION and ROSALINDA C. CORTEZ, respondents. G.R. No. 124617 April 28, 2000 BELLOSILLO, J.: SEXUAL HARASSMENT DOCTRINE: The gravamen of the offense in sexual harassment is not the violation of the employee's sexuality but the abuse of power by the employer. FACTS: Petitioner Philippine Aeolus Automotive United Corporation (PAAUC) is a corporation duly organized and existing under Philippine laws, petitioner, Francis Chua is its President while private respondent Rosalinda C. Cortez was a company nurse of Petitioner Corporation until her termination. PAAUC dismissed Private Respondent from service on the ground of serious misconduct, gross habitual neglect and fraud or willful breach of trust. Among the acts she allegedly committed is throwing a stapler at Plant Manager William Chua, her superior and uttering invectives against him. She filed with the Labor Arbiter a complaint for illegal dismissal, non-payment of annual service incentive leave, 13 th month pay and damages against PAAUC and its President Francis Chua. She claimed as a defense for the offense charged against her that William Chua manifested a special liking for her. She claimed that William Chua would oftentimes invite her for a date, make sexual advances – touching her hands, putting his arms around her shoulders, running his finger on her arms and telling her she looked beautiful. The special treatment and sexual advances continued during her employment for 4 years but she never reciprocated his flirtations, until finally, she noticed that his attitude toward her changed. He made her understand that if she would not give in to his sexual advances he would cause her termination from the service; and he made good his threat when he started harassing her. LA RULING: The Labor Arbiter rendered a decision holding the termination of Cortez as valid and legal, at the same time dismissing her claim for damages for lack of merit. NLRC RULING: The NLRC disbelieved the explanation proffered by private respondent on the ground she never filed a complaint against William Chua for more than 4 years. ISSUE: Whether or not William Chua committed acts of sexual harassment against Cortez? SC RULING: Yes. The gravamen of the offense in sexual harassment is not the violation of the employee's sexuality but the abuse of power by the employer. Any employee, male or female, may rightfully cry "foul" provided the claim is well substantiated. Strictly speaking, there is no time period within which he or she is expected to complain through the proper channels. The time to do so may vary depending upon the needs, circumstances, and more importantly, the emotional threshold of the employee. Private respondent admittedly allowed four (4) years to pass before finally coming out with her employer's sexual impositions. Not many women, especially in this country, are made of the stuff that can endure the agony and trauma of a public, even corporate, scandal. If petitioner corporation had not issued the third memorandum that terminated the services of private respondent, we could only speculate how much longer she would keep her silence. Moreover, few persons are privileged indeed to transfer from one employer to another. The dearth of quality employment has become a daily "monster" roaming the streets that one may not be expected to give up one's employment easily but to hang on to it, so to speak, by all tolerable means. Perhaps, to private respondent's mind, for as long as she could outwit her employer's ploys she would continue on her job and consider them as mere occupational hazards. This uneasiness in her place of work thrived in an atmosphere of tolerance for four (4) years, and one could only imagine the prevailing anxiety and resentment, if not bitterness, that beset her all that time. But William Chua faced reality soon enough. Since he had no place in private respondent's heart, so must she have no place in his office. So, he provoked her, harassed her, and finally dislodged her; and for finally venting her pent-up anger for years, he "found" the perfect reason to terminate her. 21 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 13. APEX MINING COMPANY, INC. v. NATIONAL LABOR RELATIONS COMMISSION and SINCLITICA CANDIDO G.R. No. 94951 April 22, 1991 GANCAYCO, J.: HOUSEHELPER OR DOMESTIC SERVANT DOCTRINE: The definition provided by the Labor Code of the terms “househelper” or “domestic servant” cannot be interpreted to include househelp or laundrywomen working in staffhouses of a company, like petitioner who attends to the needs of the company's guest and other persons availing of said facilities FACTS: Private respondent Sinclita Candida was employed by petitioner Apex Mining Company, Inc. to perform laundry services at its staff house. In the beginning, she was paid on a piece rate basis. However, she was then paid on a monthly basis at Php 250.00 a month, which was ultimately increased, to Php 575.00 a month. On 18 December 1987, while she was attending to her assigned task and she was hanging her laundry, she accidentally slipped and hit her back on a stone. As a result of which, she was not able to continue her work. She was offered the amount of Php 2,000.00, which was eventually increased to Php 5,000.00, to persuade her to quit her job, but she refused. The petitioner subsequently disallowed her to return to work. She filed a request for assistance with the DOLE. LA RULING: The Labor Arbiter ordered the petitioner to pay her the following: 1) salary; 2) Emergency Living; 3) 13 th Month Pay; and 4) Separation Pay. The petitioner appealed the decision to the NLRC. NLRC RULING: The NLRC dismissed the appeal for lack of merit and affirmed the appealed decision. A motion for reconsideration thereof was likewise denied. ISSUE: Whether or not private responded should be treated as a mere househelper or domestic servant and not as a regular employee entitled to the amounts granted by the Labor Arbiter? SC RULING: No. Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms "househelper" or "domestic servant" are defined as follows: The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer to any person, whether male or female, who renders services in and about the employer's home and which services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the employer's family. The definition cannot be interpreted to include househelp or laundrywomen working in staffhouses of a company, like petitioner who attends to the needs of the company's guest and other persons availing of said facilities. By the same token, it cannot be considered to extend to then driver, houseboy, or gardener exclusively working in the company, the staffhouses and its premises. They may not be considered as within the meaning of a "househelper" or "domestic servant" as above-defined by law. The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer. While it may be true that the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in their circumstances is that in the former instance they are actually serving the family while in the latter case, whether it is a corporation or a single proprietorship engaged in business or industry or any other agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises of the business of the employer. In such instance, they are employees of the company or employer in the business concerned entitled to the privileges of a regular employee.
22 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 14. GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS) v.
COURT OF APPEALS and HEIRS OF ABRAHAM CATE, represented by DOROTHY CATE G.R. No. 124208 January 28, 2008 AZCUNA, J.: LIBERAL CONSTRUCTION OF EMPLOYEE’S COMPENSATION ACT DOCTRINE: If in the present state of science, the proof referred by law to be present by the deceased claimant was unavailable and impossible to comply with, the condition must be deemed as not imposed. FACTS: On March 6, 1974, Abraham Cate joined the military service as a Rifleman of the Philippine Navy. In 1975, he was designated as Action Clerk. On Feburary 22, 1986, he was transferred to the now defunct Philippine Constabulary with the rank of Technical Sergeant and was later promoted to Master Sergeant. On January 2, 1991, he was absorbed in the Philippine National Police with the rank of Senior Police Officer IV. He was diagnosed of having Osteoblastic Osteosarcoma in his left cheek. He underwent Total Maxillectomy with Orbital Exenteration in the PGH. However, his disease recurred and he underwent debulking of the recent tumor at PGH. The post-operative course was uneventful and he underwent radiotherapy. He was then compulsorily retired from the PNP. He filed a claim for income benefits with the GSIS under PD No. 626 as amended. However, his claim was denied by the GSIS on the ground Osteosarcoma is not considered an occupational disease. After his death, his wife and 2 children appealed the decision of the GSIS to the ECC. ECC Ruling: The ECC affirmed the decision of the GSIS and dismissed the case for lack of merit. CA RULING: The CA reversed and set aside the decision of the ECC on the ground the Employee’s Compensation Act should be liberally construed in favor of applicant. ISSUE: Whether or not the ailment of the late Abraham is compensable under the present law on employee’s compensation? SC RULING: Yes. The present law on compensation allows certain diseases to be compensable if it is sufficiently proven that the risk of contract it is increased by the working conditions. The application of the rules would mean that absent any proof that the risk of contracting the ailment was increased by the working conditions of the late Abraham, private respondents would not be entitled to compensation. Considering, however, that it is practically undisputed that under the present state of science, the proof referred by the law to be presented by the deceased private respondent claimant was unavailable and impossible to comply with, the condition must be deemed as not imposed. Petitioners’ failure to present positive evidence of a causal relation of the illness and his working conditions is due to the pure and simple lack of available proof to be offered in evidence. Verily, to deny compensation to osteosarcoma victims who will definitely be unable to produce a single piece of proof to that effect is unrealistic, illogical and unfair. At the very least, on a very exceptional circumstance, the rule on compensability should be relaxed and be allowed to apply to such situations. To disallow the benefit will even more add up to the sufferings, this time, for the ignorance of the inability of mankind to discover the real truth about cancer.
23 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 15. DOMINGA A.
SALMONE v. COMPENSATION COMMISSION and SOCIAL SECURITY SYSTEM G.R. No. 142392 September 26, 2000 PARDO, J.: DEGREE OF PROOF REQUIRED UNDER PD NO. 626 DOCTRINE: The claimant must show, at least, by substantial evidence that the development of the disease is brought largely by the conditions present in the nature of the job. What the law requires is a reasonable work-connection and not a direct causal relation. FACTS: The Paul Geneve Entertainment Corporation employed petitioner Dominga A. Salmone as a sewer. She was later promoted as the officer-in-charge and the over-all custodian in the Sewing Department. However, she started to feel chest pains, which forced her to file a leave of absence from work because they have become unbearable. Upon medical examination, she was diagnosed with Atherosclerotic heart disease, Atrial Fibrillation, Cardiac Arrhythmia. Upon recommendation of her doctor, she resigned from her work hoping that with a much-need complete rest, she will be cured. She then filed a disability claim with the SSS from the Employee’s compensation fund. However, the SSS denied her claim including her motion for reconsideration. Thus she appealed the said decision to the ECC. ECC Ruling: The ECC dismissed her appeal for want of merit. CA RULING: The CA dismissed the petition on the ground that the petitioner’s illness was not compensable because petitioner failed to adduce substantial evidence proving any of the condition of compensability. ISSUE: Whether or not the petitioner’s illness is compensable? SC RULING: Yes. Under the Labor Code, as amended, the law applicable to the case at bar, in order for the employee to be entitled to sickness or death benefits, the sickness or death resulting therefrom must be or must have resulted from either (a) any illness definitely accepted as an occupational disease listed by the Commission, or (b) any illness caused by employment, subject to proof that the risk of contracting the same is increased by working conditions. In this case, petitioner has shown by uncontroverted evidence that in the course of her employment, due to work related stress, she suffered from severe chest pains which caused her to take a rest, per physician's advice, and ultimately to resign from her employment. She was diagnosed as suffering from "atherosclerotic heart disease, atrial fibrillation, cardiac arrhythmia" which, as heretofore stated, is included within the term cardiovascular diseases. Indisputably, cardiovascular diseases, which, as herein above-stated include atherosclerotic heart disease, atrial fibrillation, cardiac arrhythmia, are listed as compensable occupational diseases in the Rules of the Employees' Compensation Commission, hence, no further proof of casual relation between the disease and claimant's work is necessary. The degree of proof required under P. D. No. 626, is merely substantial evidence, which means, "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." The claimant must show, at least, by substantial evidence that the development of the disease is brought largely by the conditions present in the nature of the job. What the law requires is a reasonable work-connection and not a direct causal relation. It is enough that the hypothesis on which the workmen's claim is based is probable. Medical opinion to the contrary can be disregarded especially where there is some basis in the facts for inferring a work- connection. Probability, not certainty, is the touchtone.
24 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 16. HEIRS OF DEAUNA v. FIL STAR MARITIME CORPORATION G.R. No. 191563 June 20, 2012 REYES, J.: THE DEATH OF A SEAFARER IS COMPENSABLE WHEN IT OCCURS WHILE STILL IN THE EMPLOYENT OF THE EMPLOYER. DOCTRINE: Article 22.1(b) considers an employment as terminated if a seafarer signs off from the vessel due to sickness, but subject to the provisions of Article 29. Article 29.1 of the IBF/AMOSUP/IMMAJ CBA provides that the death of a seafarer, for any cause, is compensable when it occurs while he is in the employment of the company. Article 29.4, on the other hand, clarifies that the seafarer shall be considered as in the employment of the company for so long as the provisions of Articles 25 and 26 apply and provided the death is directly attributable to sickness or injury that caused the seafarer's employment to be terminated in accordance with Article 22.1(b). Under Article 25.3, a seafarer repatriated to the port of his engagement, unfit as a result of sickness, shall be entitled to medical attention at the company's expense for up to a maximum period of 130 days after repatriation, subject to the submission of satisfactory medical reports. Article 26.2 further states that a seafarer shall likewise be entitled to sick pay at the rate equivalent to his basic wage while he remains sick up to a maximum of 130 days. Article 26.4 allows continued entitlement to sick pay beyond the 130 day period, reckoned from repatriation, provided satisfactory medical reports shall be submitted and endorsed where necessary, by a company-appointed doctor. FACTS: Edwin boarded on August 1, 2004 for a nine-month engagement as Chief Engineer of the Sanko. He suffered from abdominal pains and was found to have kidney stones for which he was given medication. Edwin was then repatriated. Respondents claimed that Edwin requested for an early termination while petitioners averred that Edwin was repatriated due to the latter's body weakness and head heaviness. Edwin was discovered to have Glioblastoma WHO Grade 4 (GBM) . It was then noted that Edwin could have acquired the cancer as a result of radiation or vinyl products, or had worked in the vicinity of power lines. Respondent claimed that out of compassion and intent to avoid legal battles, they extended to Edwin an allowance of US$6,033.36. They also offered the payment of US$60,000.00 disability benefits despite having no obligation to do so on their part as GBM can only be considered as work-related if a person who suffers therefrom had exposures to radiation or vinyl products, or had worked in the vicinity of power lines. The respondents claimed that Edwin did not have such exposure while under their employ. Petitioners then asked for disability benefits, but were denied by respondents. They then filed a complaint for disability benefits, medical and transportation reimbursements, moral and exemplary damages and attorney's fees were filed before the National Labor Relations Commission (NLRC). Edwin died on April 13, 2006 during the pendency of the proceedings. He was substituted therein by the petitioners who sought the payment of death benefits under the International Bargaining Forum/Associated Marine Officers and Seamens Union of the Philippines/International Mariners Management Association of Japan Collective Bargaining Agreement (IBF/AMOSUP/IMMAJ CBA). Voluntary Arbitrator Rene Ofreneo (VA Ofreneo), invoking the provisions of the Philippine Overseas Employment Administration Standard Employment Contract (POEA SEC) and the IBF/AMOSUP/IMMAJ CBA, awarded death benefits to the petitioners. The Court of Appeals reversed the decision of VA Ofreneo. Petitioners contend that they are entitled to death benefits. ISSUE: Whether or not within the purview of the IBF/AMOSUP/IMMAJ CBA, Edwin's death on April 13, 2006, or more than a year from his repatriation, can be considered as one occurring while he was still in the employment of the respondents. SC RULING: YES. Edwin's death can be considered can be considered as one occuring while he was still in the employment of respondents. Under the IBF/AMOSUP/IMMAJ CBA provisions, Edwin's death a little more than a year from his repatriation can still be considered as one occurring while he was still under the respondents' employ. 25 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS From the foregoing, the SC concluded that at the time of Edwin's death on April 13, 2006 due to GBM, he was still in the employment of the respondents. While it is true that Article 22.1 of the IBF/AMOSUP/IMMAJ CBA considers a seafarer as terminated when he signs off from the vessel due to sickness, the foregoing is subject to the provisions of Article 29. Under Article 29, a seafarer remains under the respondents' employ as long as the former is still entitled to medical assistance and sick pay, and provided that the death which eventually occurs is directly attributable to the sickness which caused the seafarer's employment to be terminated. As discussed above, the company-designated physician, Dr. Cruz, in effect admitted that Edwin was repatriated due to symptoms which a person suffering from GBM normally exhibits. The petitioners are, however, not entitled to moral and exemplary damages and attorney's fees.
26 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 17. DEBAUDIN v. SSS G.R. No. 148308 AZCUNA, J.:
September 21, 2007
FOR A NON-OCCUPATIONAL DISEASE(those not included in the list of occupational disease enumerated under Annex "A" of P.D. 626) TO BE COMPENSABLE, THE CLAIMANT MUST SUBSTANTIATE HIS CLAIM WITH EVIDENCE THAT HIS EMPLOYMENT OR WORKING CONDITIONS CONTRIBUTED IN CONTRACTING THE AILMENT DOCTRINE: An employee is entitled to compensation benefits if the sickness is a result of an occupational disease listed under the Rules on Employees' Compensation; or in case of any other illness, if it is caused by employment, subject to proof that the risk of contracting the same is increased by the working conditions. This is as it should be because for an illness to be compensable, it must be (1) directly caused by such employment; (2) aggravated by the employment; or (3) the result of the nature of such employment. Jurisprudence provides that to establish compensability of a non-occupational disease, reasonable proof of workconnection and not direct causal relation is required.
FACTS: Petitioner, Roberto Debaudin, is a seaman by profession as a utility staff who performed cleaning chemical-spilloil on deck, slat dislodging, and spraying naphtha chemical and washing dirt and rusts inside the tank. 18 years after, Debaudin sought medical assistance after he experienced episodes of bilateral blurring of vision and was later diagnosed of chronic open angle glaucoma. On account of his ailment, petitioner filed before the SSS a claim for compensation benefits under P.D. No. 626 claiming that the strenuous tasks required climbing, bending over and running for so many times – acts which a medical book considered as contributory factors that would increase intraocular pressure which causes glaucoma. He also adds that he was also subjected to emotional strains of going through the perils of the sea and homesickness for being away from his family during the entire duration of the contracts. He, thus, alleges that his employment as a seaman contributed, even in a small degree, to the development of his ailment. His claim, however, was denied by SSS on the ground that there is no causal relationship between the illness and his job as a seaman. EMPLOYEES COMPENSTAION COMMISSION (EEC): EEC denied Debaudin’s motion for reconsideration holding that Debaudin’s Chronic Open Angle Glaucoma is not an occupational disease under the law. Thus, he is required to show by substantial evidence that the nature of his job as a Seaman had increased the risk of contracting the disease. However, appellant failed to discharge the burden of proof required by the law. CA RULING: The CA dismissed the case on the ground that petitioner failed to adduce substantial evidence supporting the conclusion that the working conditions as a seaman increased the risk of contracting his chronic open angle glaucoma. ISSUE: Whether or not the work of Debaudin as a seaman contributed even in a small degree in or had increased the risk of contracting his chronic open angle glaucoma. SC RULING: NO. In the present case, petitioner’s chronic open angle glaucoma is not listed as an occupational disease; hence, he has the burden of proving by substantial evidence, or such relevant evidence which a reasonable mind might accept as adequate to justify a conclusion, that the nature of his employment or working conditions increased the risk of contracting the ailment or that its progression or aggravation was brought about thereby. It is enough that the hypothesis on which the workmen's claim is based is probable. Probability, not the ultimate degree of certainty, is the test of proof in compensation proceedings since in carrying out and interpreting the provisions of the Labor Code and its implementing rules and regulations the primordial and paramount consideration is the employees' welfare. Other than positing petitioner’s allegations, petitioner presented no competent medical history, records or physician’s report to objectively substantiate the claim that there is a reasonable nexus between his work and his ailment. Without saying more, his bare allegations do not ipso facto make his illness compensable. Awards of compensation cannot rest on speculations or presumptions. The claimant must present concrete evidence to prove a positive proposition. 27 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 18. AUSTRIA v. CA and EMPLOYEES COMPENSATION COMMISSION G.R. No. 146636 August 12, 2002 PUNO, J.: THE DISABILITY IS TOTAL AND PERMANENT IF AS A RESULT OF THE INJURY OR SICKNESS, THE EMPLOYEE IS UNABLE TO PERFORM ANY GAINFUL OCCUPATION FOR A CONTINUOUS PERIOD EXCEEDING 120 DAYS; DOCTRINE: The disability is total and permanent if as a result of the injury or sickness, the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days; and It is partial and permanent if as a result of the injury or sickness, the employee suffers a permanent partial loss of the use of any part of his body. FACTS: Petitioner Pablo A. Austria was employed as bag piler at Central Azucarera de Tarlac from June 1, 1977 to July 20, 1997. In 1994, petitioner began to feel severe back pain. In 1998, it was revealed that he was suffering from osteoarthritis of the lumbar spine. Thus petitioner filed with the SSS a claim for compensation benefits under PD 626 as amended. The claim was granted and petitioner was awarded permanent partial disability benefits. Petitioner thereafter requested the SSS for conversion of his permanent partial disability benefit to permanent total disability benefit. The SSS denied the request ECC RULING: On appeal, the ECC affirmed the decision of the SSS. The ECC held that considering the degree of his disability at the time he was separated from the service, petitioner has already availed of the maximum benefits to which he is entitled on account of his osteoarthritis. CA RULING: The appellate court dismissed the petition, ruling that the law does not allow the conversion of permanent partial disability to permanent total disability ISSUE: Whether or not the Honorable Court of Appeals erred in denying the claim for additional benefits in favor of the petitioner and not allowing the conversion of his (petitioner) permanent partial disability to permanent total disability SC RULING: YES. The test of whether or not an employee suffers from permanent total disability is a showing of the capacity of the employee to continue performing his work notwithstanding the disability he incurred. Thus, if by reason of the injury or sickness he sustained, the employee is unable to perform his customary job for more than 120 days and he does not come within the coverage of Rule X of the Amended Rules on Employees Compensability (which, in more detailed manner, describes what constitutes temporary total disability), then the said employee undoubtedly suffers from permanent total disability regardless of whether or not he loses the use of any part of his body. PD 626 as amended provides three types of disability benefits to qualified employees: (1) temporary total disability, (2) permanent total disability, and (3) permanent partial disability. In the case at bar, petitioner was granted by the SSS, as affirmed by the ECC, permanent partial disability benefit, but he seeks to avail of permanent total disability benefit. Under Section 2 Rule VII of the Amended Rules on Employees Compensation, a disability is total and permanent if as a result of the injury or sickness, the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days; and a disability is partial and permanent if as a result of the injury or sickness, the employee suffers a permanent partial loss of the use of any part of his body. Total disability does not require that the employee be absolutely disabled, or totally paralyzed. What is necessary is that the injury must be such that she cannot pursue her usual work and earn therefrom. Applying the foregoing standards, we find petitioner entitled to permanent total disability benefit under the law. Petitioner has been employed as bag piler for twenty (20) years at the Central Azucarera de Tarlac. His duties require him to carry heavy loads of refined sugar and to perform other manual work. Since his work obviously taxes so much on his back, his illness which affects his lumbar spine renders him incapable of doing his usual work as bag piler. Hence, his disability to perform his regular duties may be considered total and permanent.
28 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 19. GATUS v. SSS G.R. No. 174725 January 26, 2011 LEONARDO-DE CASTRO, J.: A CLAIMANT MUST SHOW, AT LEAST BY SUBSTANTIAL EVIDENCE, THAT THE DEVELOPMENT OF THE DISEASE WAS BROUGHT ABOUT LARGELY BY THE CONDITIONS PRESENT IN THE NATURE OF THE JOB.
DOCTRINE: His disease not being listed as an occupational disease, he was expected to show that the illness or the fatal disease was caused by his employment and the risk of contracting the disease was increased or aggravated by the working conditions. His proof would constitute a reasonable basis for arriving at a conclusion that the conditions of his employment had caused the disease or that such working conditions had aggravated the risk of contracting the illness or the fatal disease. FACTS: Gatus worked at the Central Azucarera de Tarlac beginning 1972. He was a covered member of the SSS and was certified as being fit to work before employment. He optionally retired from Central Azucarera de Tarlac upon reaching 30 years of service at the age of 62. He was diagnosed to be suffering from Coronary Artery Disease (CAD): Triple Vessel and Unstable Angina in 1995. His medical records showed him to be hypertensive for 10 years and a smoker. Thus he was given by the SSS EC/SSS Permanent Partial Disability (PPD) benefits. In 2003, an SSS audit revealed the need to recover the EC benefits already paid to him on the ground that his CAD, being attributed to his chronic smoking, was not work-related. He elevated the matter to the ECC, which denied his appeal on December 10, 2004, essentially ruling that although his CAD was a cardiovascular disease listed as an occupational disease under Annex A of the Implementing Rules on Employees Compensation, nothing on record established the presence of the qualifying circumstances for responsibility; that it was incumbent upon him to prove that the nature of his previous employment and the conditions prevailing therein had increased the risk of contracting his CAD; and that he had failed to prove this requisite. Hence, this recourse, wherein he contends that he had contracted the disease due to the presence of harmful fuel smoke emission of methane gas from a nearby biological waste digester and a railway terminal. CA RULING: CA affirmed the ruling of SSS ruling that petitioner failed to submit substantial evidence that might have shown that he was entitled to the benefits he had applied for. ISSUE: Whether the Court of Appeals committed grave abuse of discretion in affirming the finding of the ECC that petitioners ailment is not compensable under Presidential Decree No. 626, as amended SC RULING: The court held NO. Gatus was diagnosed to have suffered from CAD; Triple Vessel and Unstable Angina, diseases or conditions falling under the category of Cardiovascular Diseases which are not considered occupational diseases under the Amended Rules on Employees Compensation. His disease not being listed as an occupational disease, he was expected to show that the illness or the fatal disease was caused by his employment and the risk of contracting the disease was increased or aggravated by the working conditions. His proof would constitute a reasonable basis for arriving at a conclusion that the conditions of his employment had caused the disease or that such working conditions had aggravated the risk of contracting the illness or the fatal disease. While he might have been exposed to various smoke emissions at work for 30 years, he did not submit satisfactory evidence proving that the exposure had contributed to the development of his disease or had increased the risk of contracting the illness. Neither did he show that the disease had progressed due to conditions in his job as a factory worker. In fact, he did not present any physicians report in order to substantiate his allegation that the working conditions had increased the risk of acquiring the cardiovascular disease.
29 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 20. REPUBLIC OF THE PHILIPPINES v. MARIANO G.R. No. 139455 March 28, 2003 QUISUMBING, J.: WHERE IT WAS ESTABLISHED THAT THE CLAIMANTS AILMENT OCCURRED DURING AND IN THE COURSE OF HIS EMPLOYMENT, IT MUST BE PRESUMED THAT THE NATURE OF THE CLAIMANTS EMPLOYMENT IS THE CAUSE OF THE DISEASE DOCTRINE: For the sickness to be compensable, the same must be an occupational disease included in the list provided, with the conditions set therein satisfied; otherwise, the claimant must show proof that the risk of contracting it is increased by the working conditions. FACTS: For an eleven-year period, respondent Pedro Mariano was an employee of LGP Printing Press. During his employment, Mariano worked in various capacities, including that of a machine operator, paper cutter, monotype composer, film developer, and supervisor of the printing press. Sometime in February 1994, Marianos service abruptly ended when he could no longer perform any work due to a heart ailment. An electrocardiograph test revealed that he was suffering from Incomplete Right Bundle Branch Block. Respondent had consulted Dr. Rogelio Mariano, whose diagnosis showed he was suffering from Parkinsons disease and hypertension. Mariano filed a claim for employees compensation benefit with the SSS. In its medical evaluation dated April 15, 1997, SSS denied his claim on the ground that there was no causal connection between his ailment and his job as film developer. The ECC ultimately dismissed the case on the ground that the claimant failed to establish a causal connection between Parkinson’s disease and the conditions of the printing press. CA RULING: The Court of Appeals found that the nature of petitioners work at LGP resulted in his exposure to various toxic chemicals, which is a possible cause of Parkinsons Disease. As to his hypertension, the appellate court ruled that the respondents duties as machine operator and paper cutter involved physical pressure and restlessness, since he was required to meet urgent deadlines for rush print orders. This in turn caused respondent to suffer from stress and anxiety. In sum, the appellate court held that respondent had substantially established the connection between the cause of his ailments and the nature of his work. ISSUE: Whether or not Mariano was able to prove that his employment had a causal relation that with his ailments: Parkinson's and Hypertension. SC RULING: YES. Workmens Compensation cases are governed by the law in force at the time the claimant contracted his illness. In the instant case, the applicable rule is Section 1 (b), Rule III, of the Rules Implementing P.D. No. 626. Under said Rule, for the sickness to be compensable, the same must be an occupational disease included in the list provided, with the conditions set therein satisfied; otherwise, the claimant must show proof that the risk of contracting it is increased by the working conditions. As to Parkinsons disease, while it is true that this disease is not included in the list of compensable diseases under the law then prevailing, it was found by the Court of Appeals that the conditions prevailing at LGP largely led to the progression of the ailment. The respondents functions entailed constant exposure to hazardous or toxic chemicals such as carbon disulfate, carbon monoxide, or manganese. As the ECC itself admitted in its judgment, the exposure to these toxic substances is among the possible causes of this disease. Where it was established that the claimants ailment occurred during and in the course of his employment, it must be presumed that the nature of the claimants employment is the cause of the disease. Second, even if we were to assume that Parkinsons Disease is not compensable, there can be no question that Essential Hypertension is a compensable illness, following our ruling in Government Service Insurance System v. Gabriel, that hypertension and heart ailments are compensable illnesses. In upholding respondent Marianos claim, the Court of Appeals found that among the various jobs the respondent performed were those of a machine operator, paper cutter, monotype composer, and later as supervisor, most of which are physical and stressful in character. In established cases of Essential Hypertension, the blood pressure fluctuates widely in response to emotional stress and physical activity. Given the nature of his assigned job and the printing business, with its tight deadlines entailing large amounts of rush work, indeed the emotional and 30 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS physical stress of respondents work at the printing press caused, and then exacerbated, his hypertension. On this score, we hold that the Court of Appeals did not err in liberally construing the rules implementing P.D. No. 626. In matters of labor and social legislation, it is well established that doubts in the interpretation and application of the law are resolved liberally in favor of the worker and strictly against the employer.
31 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 21. MAGSAYSAY MARITIME CORPORATION and/or WASTFEL-LARSEN MANAGEMENT A/S v. OBERTO LOBUSTA G.R. No. 177578 January 25, 2012 VILLARAMA, JR., J. TEMPORARY TOTAL DISABILITY DOCTRINE: A temporary total disability only becomes permanent when so declared by the company physician within the periods he is allowed to do so, or upon the expiration of the maximum 240-day medical treatment period without a declaration of either fitness to work or the existence of a permanent disability. FACTS: Petitioner Magsaysay Maritime Corporation is a domestic corporation and the local manning agent of the vessel MV "Fossanger" and of petitioner Wastfel-Larsen Management A/S. Respondent Oberto S. Lobusta is a seaman who has worked for Magsaysay Maritime Corporation. Lobusta boarded MV "Fossanger" on March 16, 1998. After two months, he complained of breathing difficulty and back pain. On May 12, 1998, while the vessel was in Singapore, Lobusta was admitted at Gleneagles Maritime Medical Center and was diagnosed to be suffering from severe acute bronchial asthma with secondary infection and lumbosacral muscle strain. Dr. C K Lee certified that Lobusta was fit for discharge on May 21, 1998, for repatriation for further treatment. Upon repatriation, Lobusta was referred to Metropolitan Hospital. The medical coordinator, Dr. Robert Lim, reported that Lobusta has been diagnosed to have a moderate obstructive pulmonary disease which tends to be a chronic problem, such that Lobusta needs to be on medications indefinitely. Petitioners "then faced the need for confirmation and grading by a second opinion" and "it took the parties time to agree on a common doctor, until they agreed on Dr. Camilo Roa." According to Dr. Roa, Lobusta is not physically fit to resume his normal work as a seaman due to the persistence of his symptoms. Magsaysay Maritime Corporation suggested that Lobusta be examined by another company-designated doctor for an independent medical examination. Dr. David opined that Mr. Lobusta ought not to be considered fit to return to work as an Able Seaman. As no settlement was reached despite the above findings, the Labor Arbiter ordered the parties to file their respective position papers. LA RULING: ordered petitioners to pay Lobusta (a) US$2,060 as medical allowance, (b) US$20,154 as disability benefits, and (c) 5% of the awards as attorney’s fees. The Labor Arbiter held that provisions of the Labor Code, as amended, on permanent total disability do not apply to overseas seafarers. NLRC RULING: Lobusta appealed. The NLRC dismissed his appeal and affirmed the Labor Arbiter’s decision. The NLRC ruled that Lobusta’s condition may only be considered permanent partial disability. CA RULING: The CA ruled that Lobusta's disability brought about by his bronchial asthma is permanent and total as he had been unable to work since May 14, 1998 up to the present or for more than 120 days, and because Dr. David found him not fit to return to work as an able seaman. ISSUE: Does the poea contract considers the mere lapse of more than one hundred twenty (120) days as total and permanent disability? SC RULING: No. A temporary total disability only becomes permanent when so declared by the company physician within the periods he is allowed to do so, or upon the expiration of the maximum 240-day medical treatment period without a declaration of either fitness to work or the existence of a permanent disability. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician[,] but in no case shall this period exceed one hundred twenty (120) days. Upon repatriation, Lobusta was first examined by the Pulmonologist and Orthopedic Surgeon on May 22, 1998. The maximum 240-day (8-month) medical-treatment period expired, but no declaration was made that Lobusta is fit to work. Nor was there a declaration of the existence of Lobusta’s permanent disability. On February 16, 1999, Lobusta was still prescribed medications for his lumbosacral pain and was advised to return for reevaluation. May 22, 1998 to February 16, 1999 is 264 days or 6 days short of 9 months. 32 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Dr. Roa’s clinical summary also shows that as of December 16, 1999, Lobusta was still unfit to resume his normal work as a seaman due to the persistence of his symptoms. But neither did Dr. Roa declare the existence of Lobusta’s permanent disability. Again, the maximum 240-day medical treatment period had already expired. May 22, 1998 to December 16, 1999 is 19 months or 570 days. In Remigio, unfitness to work for 11-13 months was considered permanent total disability. So it must be in this case. And Dr. David’s much later report that Lobusta "ought not to be considered fit to return to work as an Able Seaman" validates that his disability is permanent and total as provided under the POEA Standard Employment Contract and the Labor Code, as amended. In fact, the CA has found that Lobusta was not able to work again as a seaman and that his disability is permanent "as he has been unable to work since 14 May 1998 to the present or for more than 120 days." This period is more than eight years, counted until the CA decided the case in August 2006. On the CA ruling that Lobusta’s disability is permanent since he was unable to work "for more than 120 days," SC have clarified in Vergara that this "temporary total disability period may be extended up to a maximum of 240 days."
33 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 22. MAGSAYSAY MITSUI OSK MARINE, INC. and/or MOL TANKSHIP MANAGEMENT (ASIA) PTE LTD. v. JUANITO G. BENGSON G.R. No. 198528 October 13, 2014 DEL CASTILLO, J.: WORK-RELATED COMPENSABLE ILLNESS DOCTRINE: Time and again, this Court has held that cardiovascular disease, coronary artery disease, and other heart ailments are work-related and, thus, compensable. FACTS: Since 1986, Juanito Bengson has been working as a seafarer for Magsaysay, Inc. He entered into his 22nd contract of employment with Magsaysay, Inc. Prior to his deployment, Bengson underwent and passed the PreEmployment Medical Examination (PEME) and was found to be "fit for sea duty”. On October 5, 2007, after doing his usual duties on board the vessel, [Bengson] suddenly experienced difficulty in breathing and numbness on half of his body. He was examined in Izola General Hospital in Slovenia. Due to his incapacity to work, his immediate repatriation was arranged. Upon arrival in the Philippines, he was immediately brought to the Manila Doctors Hospital for confinement under the supervision of company-designated-physician Dr. Benigno F. Agbayani, Jr. Bengson’s Medical Abstract/Discharge Summary showed that he had a stroke. Dr. Agbayani issued an Initial Out-Patient Consult Report which stated that Bengson’s illness was not work-related. Thus, Magsaysay, Inc. did not anymore issue any assessment on [Bengson’s] disability grade. [Bengson], on the other hand, continuously took medications and was unable to return to his work as a seaman due to the severity of his disability. [Bengson] thus filed his disability compensation claim against x x x Magsaysay, Inc. However, during the grievance proceedings before the Associated Marine Officers and Seamen’s Union of the Philippines (AMOSUP), his claim was outrightly denied by x x x Magsaysay, Inc. LA RULING: illness of Bengson is related to his work and the strenuous nature of his work and the conditions he was subjected to while working on board petitioners’ vessel caused his illness. NLRC RULING: under the POEA-SEC, hematoma is not included in the list of compensable illnesses; this being the case, Bengson should have proved that such illness was work-related and compensable, and it is not enough for him to claim or show that it was contracted during his employment with petitioners. CA RULING: Bengson’s exposure to different hazards on board petitioners’ vessel, the performance of his functions as Third Mate, and the extraordinary physical and mental strain required by his position caused him to suffer his present illness. Therefore, his illness is work-related. ISSUE: Is cardiovascular disease an occupational disease and and, thus, compensable? SC RULING: YES. In many cases decided in the past, this Court has held that cardiovascular disease, coronary artery disease, and other heart ailments are compensable. In the present case, petitioners flatly claim that Bengson’s hypertensive cardio-vascular disease is not compensable on the sole basis of its company-designated physician Agbayani’s declaration that such illness is not work-related. However, the Court finds that Bengson’s illness is work-related. The undisputed facts indicate that respondent has been working for petitioners since 1988; that per his service record, 37 he has been serving as Third Mate for twelve (12) years; and that as Third Mate, he was saddled with heavy responsibilities relative to navigation of the vessel, ship safety and management of emergencies. It is beyond doubt that respondent was subjected to physical and mental stress and strain: as Third Mate, he is the ship’s fourth in command, and he is the ship’s safety officer; these responsibilities have been heavy burdens on respondent’s shoulders all these years, and certainly contributed to the development of his illness. Besides, "[i]t is already recognized that any kind of work or labor produces stress and strain normally resulting in wear and tear of the human body." "Notably, it is a matter of judicial notice that an overseas worker, having to ward off homesickness by reason of being physically separated from his family for the entire duration of his contract, bears a great degree of emotional strain while making an effort to perform his work well. The strain is even greater in the case of a seaman who is constantly subjected to 34 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS the perils of the sea while at work abroad and away from his family." Having worked for petitioners since 1988 under employment contracts that were continuously renewed, it can be said that respondent spent much of his productive years with petitioners; his years of service certainly took a toll on his body, and he could not have contracted his illness elsewhere except while working for petitioners. To be sure, the Court has ruled that "the list of illnesses/diseases in Section 32-A does not preclude other illnesses/diseases not so listed from being compensable. The POEA-SEC cannot be presumed to contain all the possible injuries that render a seafarer unfit for further sea duties." And equally significant, "it is not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of one’s earning capacity."
35 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 23. PEDRO LIBANG, JR. vs. INDOCHINA SHIP MANAGEMENT, INC., MR. MIGUEL SANTOS and MAJESTIC CARRIERS, INC. G.R. No. 189863 September 17, 2014 REYES, J. ASSESSMENT BY COMPANY-DESIGNATED DOCTOR VS. ASSESSMENT BY CLAIMANT’S DOCTOR DOCTRINE: The respondents could not be allowed to benefit from their physician’s inaction or refusal to disclose the results of the diagnostic tests performed upon Libang, the extent of the patient’s illnesses, and the effect of the severity of these illnesses on his fitness or disability. FACTS: Libang entered into a nine-month employment contract with ISMI, a domestic manning agency that acted for and in behalf of its foreign shipping company, Majestic. Libang was engaged as a Cook 1 for the vessel M/V Baltimar Orion. While Libang was on board M/V Baltimar Orion, he experienced numbness on the left side of his face, difficulty in hearing from his left ear, blurred vision of his left eye and speech problem. Libang was eventually repatriated. Two days later, he reported to ISMI and was endorsed for medical attention to the companydesignated physician, Dr. Robert Lim (Dr. Lim) of the Marine Medical Services in Metropolitan Hospital. Dr. Lim issued to Libang a medical certificate which states that the hypertension of Libang “could be pre-existing”. Considering Dr. Lim’s failure to assess Libang’s disability despite his health status, the latter sought medical attention and assessment from another doctor, Dr. Efren R. Vicaldo (Dr. Vicaldo) of the Philippine Heart Center. A medical certificate issued by Dr. Vicaldo states that Libang has Hypertensive Cardiovascular Disease, Diabetes Mellitus and S/P Cerebrovascular accident and gave Impediment Grade VI (50%). Libang filed with NLRC a complaint for disability benefit. The respondents disputed any liability arguing that the disability was pre-existing. LA RULING: granted claim for disability benefit. Without doubt, [Libang] had gone through a thorough and rigid screening process of [ISMI and Santos] (medical examinations included) before an agreement or the contract of employment between the parties was reached and actualized. This is precisely the reason why [ISMI and Santos], should not be allowed to make use of the argument that “[Libang] is not entitled to any disability benefits as he was already suffering from a pre-existing illness when he entered into a contract of employment with [ISMI and Santos]. NLRC RULING: In sustaining the LA’s finding that Libang was entitled to disability benefit, the NLRC considered the reasonable connection between the nature of Libang’s work as a cook and the development of his illness. CA RULING: For the CA, the lone assessment made by Dr. Vicaldo could not have justified the LA’s and NLRC’s finding of a Grade VI disability. The Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC) requires the company-designated physician to be the one to make a disability assessment of a seafarer. ISSUE: Is Libang entitled to disability benefit? SC RULING: YES. Rather than making a full assessment of Libang’s health condition, disability or fitness, Dr. Lim only reasoned in his medical certificate dated that “Libang’s hypertension could be pre-existing” and that “it was difficult to say whether his diabetes mellitus and small pontine infarct are pre-existing or not.” His assessment was evidently uncertain and the extent of his examination for a proper medical diagnosis was incomplete. The alleged concealment by Libang of his hypertension during his pre-employment medical examination was also unsubstantiated, but was a mere hearsay purportedly relayed to Dr. Lim by one Dr. Aileen Corbilla, his coattending physician. A categorical statement from Dr. Lim that Libang’s illnesses were pre-existing and non-workrelated was made only in his affidavit dated July 16, 2004, or after the subject labor complaint had been filed. Still, Dr. Lim gave no explanation for his statement that Libang’s illnesses were not work-related. Given the failure of Dr. Lim to fully evaluate Libang’s illness, disability or fitness to work, the seafarer was justified in seeking the medical expertise of his physician of choice. The NLRC did not commit grave abuse of discretion in considering Dr. Vicaldo’s assessment. As against an incomplete evaluation by Dr. Lim, the medical certificate issued by Dr. Vicaldo included a determination of the disability grade that applied to Libang’s condition. Libang was diagnosed to have both Hypertensive Cardiovascular Disease and Diabetes Mellitus with an Impediment 36 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Grade VI. He was declared to be unfit to resume to work as a seafarer in any capacity. The respondents could not be allowed to benefit from their physician’s inaction or refusal to disclose the results of the diagnostic tests performed upon Libang, the extent of the patient’s illnesses, and the effect of the severity of these illnesses on his fitness or disability. The respondents even failed to sufficiently dispute the finding of the LA and NLRC that Libang’s illnesses had resulted in a Grade VI disability.
37 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 24. INTERORIENT MARITIME ENTERPRISES, INC. vs. VICTOR M. CREER III G.R. No. 181921 September 17, 2014 DEL CASTILLO, J.: ELEMENTS FOR DISABILITY TO BE COMPENSABLE DOCTRINE: For an illness to be compensable, Section 20(B)(6) of the 2000 Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels (2000 Amended Standard Terms and Conditions), deemed incorporated in the POEA Contract, requires the concurrence of two elements: first, that the illness mustbe work-related; and second, that the work- related illness must have existed during the term of the seafarer’s employment contract. FACTS: InterOrient hired Victor as Galley Boy on board the vessel M/V MYRTO owned by Calidero Shipping Company, Ltd. (Calidero). Victor alleged that when he was about to get provisions from the cold storage sometime in November 2001, he felt a sudden pain in his chest that radiated to his back. Since then, he experienced incessant cough, nasal congestion, difficulty in breathing, physical weakness, chills and extreme apprehension. According to him, this condition persisted until the expiration of his contract on May 7, 2002. On May 9, 2002, Victor arrived in Manila. The following day, he reported to the office of InterOrient and informed the company about the pain he experienced while he was on board. Victor averred that InterOrient merely advised him to consult a doctor without giving him any doctor’s referral. He did, however, sign a Receipt and Release where he acknowledged receipt of the full payment of his monetary entitlements under the employment contract. According to him, he underwent medical examinations in different hospitals and that he shouldered all the expenses. Victor consulted another physician, Dr. Vicaldo, at the Philippine Heart Center. After conducting a medical examination and evaluation, Dr. Vicaldo issued a medical certificate indicating that Victor was diagnosed with Hypertension, Stage II, and Pulmonary Tuberculosis. He gave Victor an impediment grade VIII (33.59%) and further declared him unfit to resume work as a seaman in any capacity, and that his illness was considered work-aggravated. Victor claimed for disability benefit. LA RULING: denied claim. Labor Arbiter noted that there is nothing on record to show that Victor ever made any formal claim for sickness allowance, medical benefits and disability benefits while on board the vessel or immediately after his repatriation. Neither did he submit to, nor apply for any post-employment medical examination within three days from his repatriation – a requirement for claims for sickness and disability benefits. NLRC RULING: affirmed in toto the Decision of the Labor Arbiter and dismissed Victor’s appeal. CA RULING: granted the same and awarded him permanent disability benefits and attorney’s fees. Applying Section 32-A of the POEA Contract, the CA declared Victor’s illness, pulmonary tuberculosis, included inthe list of occupational diseases. It found that Victor was overworked and over-fatigued as a result of the long hours of work required by his duties and that he was exposed todaily rapid variations in temperature. ISSUE: Is Victor entitled to disability benefits? SC RULING: No. For a seaman’s claim for disability to prosper, it is mandatory that within three days from his repatriation, he is examined by a company-designated physician. Non-compliance with this mandatory requirement results in the forfeiture of the right to claim for compensation and disability benefits. It is undisputed that on May 7, 2002, Victor’s employment contract was completed. He arrived in Manila on May 9, 2002; the following day, or on May 10, 2002, he reported to the office of InterOrient. Although he averred that he informed InterOrient about the pain he experienced whileon board the vessel, the company allegedly only advised him to consult a doctor but did not give any referral. SC is not persuaded. His repatriation was not due to any medical reasons but because his employment contract had already expired. Other than his self-serving allegation that he experienced pain while on board, he was not able to substantiate the same. There was no showing that he reported his injury to his officers while on board the vessel; neither did he prove that he sought medical attention but was refused. Likewise, other than his bare and self-serving assertion that he informed InterOrient about his pain, he presented no evidence ortangible proof that he indeed requested for medical attention, much more that he was rebuffed. 38 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS On the contrary, the records show that when he reported to InterOrient immediately after his repatriation, he signed a Receipt and Release stating that he has not contracted or suffered any illness or injury from work and that he was discharged in good and perfect health. Victor’s illness is not compensable. Even if we disregard the mandatory three-day rule on post-employment medical examination by the companydesignated physician, Victor’s claim for disability benefits must still fail for not being compensable. For an illness to be compensable, Section 20(B)(6) of the 2000 Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels (2000 Amended StandardTerms and Conditions), deemed incorporated in the POEA Contract, requires the concurrence of two elements: first, that the illness mustbe work-related; and second, that the work- related illness must have existed during the term of the seafarer’s employment contract. a) Victor failed to show that his illness existed during the term of his contract - As already mentioned, the reason for Victor’s repatriation was the completion/expiration of his contract and not because of any sickness. Other than his uncorroborated and self-serving assertion that he experienced chest pains while on board the vessel, there was absolutely no proof at all that he consulted a doctor while on board, or that he reported the same to his superiors so that he will be provided with medical assistance. On the contrary, upon repatriation, he signed a Receipt and Release wherein he acknowledged that he worked under normal conditions on board the vessel; that he did not contract or suffer any injury; and that he was discharged in good health. Victor never alleged that he was coerced into signing the Receipt and Release or that he did not understand the same. b) Victor failed to show that his illness is work-related - While pulmonary tuberculosis is listed as an occupational disease, the Court is not convinced that Victor’s pulmonary tuberculosis is work-acquired or work-aggravated because if it were so, then at the outset, Victor should have already been diagnosed with pulmonary tuberculosis when he sought medical help one month from his repatriation. Instead, Dr. Ayuyao diagnosed him with Community Acquired Pneumonia I and Bronchial Asthma – sicknesses which aside from being different from pulmonary tuberculosis, were not shown to have any relation thereto.
39 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 25. RICARDO A. DALUSONG vs. EAGLE CLARC SHIPPING PHILIPPINES, INC., NORFIELD OFFSHORE AS, and/or CAPT. LEOPOLDO T. ARCILLAR, and COURT OF APPEALS G.R. No. 204233, September 3, 2014 CARPIO, Acting C.J. ASSESSMENT BY COMPANY-DESIGNATED DOCTOR VS. ASSESSMENT BY CLAIMANT’S DOCTOR DOCTRINE: The doctor who have had a personal knowledge of the actual medical condition, having closely, meticulously and regularly monitored and actually treated the seafarer’s illness, is more qualified to assess the seafarer’s disability. FACTS: Private respondents hired petitioner as Able Seaman on board their vessel MV Malene Ostervold with a basic salary of US$800 per month. On 13 December 2009, while petitioner was drilling to attach an overboard safety equipment on the vessel, a sudden swell caused some movement ofthe vessel. As a result, one of the crew fell directly on petitioner, inflicting injury on petitioner’s right foot. Petitioner was repatriated to the Philippines for further examination and medical treatment. Dr. Nicomedes Cruz, the company-designated doctor, gave petitioner an interim disability grading based on the Philippine Overseas Employment Administration (POEA) schedule of disability of "grade 8 that is moderate rigidity or one third loss of motion or lifting power of the trunk." Petitioner disagreed with the disability assessment and consulted Dr. Nicanor Escutin, a physician of his own choice, who found petitioner to be suffering from "PARTIAL PERMANENT DISABILITY” and concluded that petitioner is "unfit for seaduty in whatever capacity as seaman." Petitioner filed with the NLRC a complaint against private respondents, claiming disability benefits, sick wages, damages, and attorney’s fees. Petitioner maintained that he is entitled to full disability benefits of US$80,000, while private respondents insisted that petitioner is only entitled to US$12,551 based on the disability assessment of the company-designated doctor. ISSUE: Is Dalusong entitled to full disability benefits? LA RULING: ruled in favor of private respondents. The Labor Arbiter did not give probative value to the medical report presented by petitioner. NLRC RULING: modified the Labor Arbiter’s decision. CA RULING: ruled that it is the company-designated doctor who initially determines the degree of disability of petitioner. SC RULING: NO. SC agree with the Court of Appeals’ ruling, giving more credence to the medical findings of the companydesignated doctor. Contrary to the ruling of the NLRC, petitioner’s doctor did not categorically give petitioner a grade 1 disability rating which is equivalent to total and permanent disability. Petitioner’s physician found petitioner to be suffering from "PARTIAL PERMANENT DISABILITY," and "is UNFIT FOR SEA DUTY in whatever capacity as seaman." Aside from this seemingly inconsistent assessment by petitioner’s doctor, there was no evidence submitted of medical procedures, examinations or tests which would support his conclusion that petitioner is unfit for sea duty in whatever capacity as a seaman. In contrast, the company-designated doctor gave petitioner a final disability grading under the POEA schedule of disabilities of "grade 11-complete immobility of an ankle joint in normal position," only after petitioner had undergone a series of medical tests and examinations, and physical therapy over a period of six months, during which the company designated doctor issued periodic medical reports. As the Court aptly stated in Philman Marine Agency, Inc. (now DOHLE-PHILMAN Manning Agency, Inc.) v. Cabanban, "the doctor who have had a personal knowledge of the actual medical condition, having closely, meticulously and regularly monitored and actually treated the seafarer’s illness, is more qualified to assess the seafarer’s disability." Based on the Disability Report of petitioner’s doctor, it appears that he only conducted a physical examination on petitioner before issuing his final diagnosis and disability rating on petitioner’s condition. Clearly, the findings of the company-designated doctor, who, with his team of specialists which included an orthopedic surgeon and a physical therapist, periodically treated petitioner for months and monitored his condition, deserve greater evidentiary weight than the single medical report of petitioner’s doctor, who appeared to have examined petitioner only once. 40 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Petitioner argues that since his treatment lasted for more than 120 days, then his disability is deemed total and permanent. Petitioner’s contention is not entirely correct. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician but in no case shall this period exceed one hundred twenty (120) days. Just because the seafarer is unable to perform his job and is undergoing medical treatment for more than 120 days does not automatically entitle the seafarer to total and permanent disability compensation. In this case, petitioner's medical treatment lasted more than 120 days but less than 240 days, after which the companydesignated doctor gave petitioner a final disability grading under the POEA schedule of disabilities of "grade 11 complete immobility of an ankle joint in normal position." Thus, before the maximum 240-day medical treatment period expired, petitioner was issued a final disability grade 11 which is merely equivalent to a permanent partial disability, since under Section 32 of the POEA-SEC, only those classified under grade 1 are considered total and permanent disability. Clearly, petitioner is only entitled to permanent partial disability compensation, since his condition cannot be considered as permanent total disability.
41 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 26. ROBERT KUA, CAROLINE N. KUA, AND MA. TERESITA N. KUA, v. GREGORIO SACUPAYO AND MAXIMINIANO PANERIO G.R. No. 191237 September 24, 2014 PEREZ, J.: DOCTRINE: Probable cause is affirmed against an employer who failed to remit SSS contributions and payments on loans of its employees if it was only under threat of criminal liability that the employers subsequently remitted what they had long deducted from the wages of said employees. FACTS: Petitioners are members of the Board of Directors and the officers of Vicmar Development Corporation (Vicmar). Respondents Sacupayo and Panerio were VICMAR employees. As required by law, Vicmar, deducted the SSS contributions of respondents from their wages. A certain amount from Sacupayo’s wage representing the monthly amortization from a he loan he obtained from the SSS. The deductions were initially remitted to SSS. However, sometime in 2003 and 2004, unknown to respondents and despite the continued SSS and amortization deductions from their wages, Vicmar stopped remitting the same. Meantime in 2004, Sacupayo and Panerio were dismissed from employment. Both filed complaints for illegal dismissal. Panerio was thereafter afflicted with Chronic Persistent Asthma but when he applied for sickness benefits before the SSS the same was denied for the reason that no contributions or payments were made for 12 months prior to the semester of confinement. Sacupayo, for his part, filed another loan application but this was also denied outright for non-payment of a previous loan which should have been fully paid if not for the failure of Vicmar to remit the amounts due to the SSS. Aggrieved respondents filed complaints before the Office of the City Prosecutor. Vicmar then remitted to SSS the contributions and loan payments of respondents. Nevertheless 3 separate Informations were filed against petitioners officers of Vicmar for violation of Section 22 (a) in relation to Section 28 (e) of RA 8282 otherwise known as the Social Security Act of 1997. MTC RULING: Dismissed outright for lack of jurisdiction RTC RULING: Given due course but later on granted the Motion of petitioners to withdraw the criminal cases. ISSUE: Validity of the order of the trial court directing the withdrawal from its dockets of Criminal Case Nos. 2006072, 2006-073 and 2006-074 for violation of Sec. 22 (a) and (d) in relation to Sec. 28 (e) of R.A. No. 8282. SC RULING: The factual milieu obtaining herein does not denote a simple delay in payment. Again, petitioners initially failed to remit the SSS contributions and payments of respondents such that respondents were denied benefits under the SS Law which they wanted to avail of. It was only under threat of criminal liability that petitioners subsequently remitted what they had long deducted from the wages of respondents. The culpability of the accused under the indictment is not yet before us. Yet to be determined during the ensuing trial are considerations such as the extent and reason for the delay, the date of actual remittance and all other circumstances that attended such remittance. All these are matters of defense that need proof during trial. WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 01569-MIN is AFFIRMED. Criminal Case Nos. 2006-072, 2006-073 and 2006-074 pending before the Regional Trial Court, Branch 20, Cagayan de Oro City are REINSTATED and the Presiding Judge thereof is DIRECTED to dispose of the cases with dispatch.
42 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 27. GOVERNMENT SERVICE INSURANCE SYSTEM v. JOSE M. CAPACITE G.R. No. 199780 September 24, 2014 BRION, J.: DOCTRINE: For sickness and the resulting death of an employee to be compensable, the claimant must show either: (1) that it is a result of an occupational disease listed under Annex "A" of the Amended Rules on Employees' Compensation with the conditions set therein satisfied; or (2) if not so listed, that the risk of contracting the disease was increased by the working conditions. FACTS: Provincial Office who successively held the following positions: Junior Statistician, Bookkeeper, Bookkeeper II, and finally as Accountant I. Due to persistent cough coupled with abdominal pain, Elma was admitted at the Bethany Hospital where the pathology examination showed that she was suffering from “Adenocarcinoma, moderately differentiated, probably cecal origin with metastases to mesenteric lymph node and seeding of the peritoneal surface.c i Elma died due to Respiratory Failure secondary to Metastatic Cancer to the lungs; Bowel cancer with Hepatic and Intraperitoneal Seeding and Ovarian cancer. Elma’s surviving spouse, Jose, filed a claim for ECC death benefits before the GSIS Branch Office, alleging that Elma’s stressful working condition caused the cancer that eventually led to her death. GSIS: denied Jose’s claim for failure to present direct evidence to prove a causal connection between Elm a’s illness and her work. ECC: also denied it holding that colorectal cancer is not listed as an occupational and compensable disease under Annex “A” of the Amended Rules on Employee’s Compensation. Although its item 17 provides that cancer of the lungs, liver and brain shall be compensable, the rules required “that it had been incurred by employees working as vinyl chloride workers, or plastic workers. CA: reversed ECC. That it was enough that the nature of her employment contributed to the development of the disease. As a bookkeeper, Elma had been exposed to voluminous dusty records and other harmful substances that aggravated her respiratory disease. ISSUE: Whether CA erred in ruling that Metastasized to the lungs is an ailment akin to respiratory disease under ANNEX “A” of P.D. NO. 626, as amended, o that such disease is work-related. SC RULING: PD 626, as amended, defines compensable sickness as “any illness definitely accepted as an occupational disease listed by the Commission, or any illness caused by employment subject to proof by the employee that the risk of contracting the same is increased by the working conditions.” Of particular significance in this definition is the use of the conjunction “or,” which indicates alternative situations. Based on this definition, we ruled in GSIS v. Vicencio that for sickness and the resulting death of an employee to be compensable, the claimant must show either: (1) that it is a result of an occupational disease listed under Annex "A" of the Amended Rules on Employees' Compensation with the conditions set therein satisfied; or (2) if not so listed, that the risk of contracting the disease was increased by the working conditions. While item 17, Annex “A” of the Amended Rules of Employee’s Compensation considers lung cancer to be a compensable occupational disease, it likewise provides that the employee should be employed as a vinyl chloride worker or a plastic worker. In this case, however, Elma did not work in an environment involving the manufacture of chlorine or plastic, for her lung cancer to be considered an occupational disease. There was, therefore, no basis for the CA to simply categorize her illness as an occupational disease without first establishing the nature of Elma’s work. Both the law and the implementing rules clearly state that the given alternative conditions must be satisfied for a disease to be compensable. Aside from Jose’s general allegations proving the stressful duties of his late wife, no reasonable proof exists to support the claim that her respiratory disease, which is similar to lung cancer, was aggravated by her working conditions. The records do not support the contention that she had been exposed to voluminous and dusty records, nor do they provide any definite picture of her working environment. 43 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 28. OSG SHIPMANAGEMENT MANILA, INC., MERCEDES M. RAVANOPOLOUS, OSG SHIPMANAGEMENT (UK) LTD. & M/T DELPHINA, v. JOSELITO B. PELLAZAR G.R. No. 198367 August 06, 2014 BRION, J.: DOCTRINE: In the present case, since there is a conflict in the assessment of the company-designated physicians and an employee’s physician of choice, the matter should have been referred to a third doctor for final determination as required by the POEA-SEC and the parties’ CBA. Since the employee was responsible for the non-referral to the third doctor because of his failure to inform the manning agency that he would be consulting a doctor of his choice, he should suffer the consequences of the absence of a binding third opinion. FACTS: Pellazar was deployed to the M/T Delphina under an employment contract for eight months. While he was on duty onboard the vessel, his right hand was injured after it was struck by a solid iron pipe. He was given medical attention in a hospital in Braziland was later on medically repatriated. Upon his arrival in Manila, Pellazar reported to OSG Manila and was referred to the company-designated physicians, Dr. De Guzman and Dr. Banaga. Pellazar’s working diagnosis was “complete fracture, distal part of 5th finger, right hand post-casting.” The company-designated physicians gave Pellazar a Grade 10 disability rating7 for “loss of grasping power for large objects between fingers and palm of one hand. Pellazar consulted a physician of his choice,Dr. Sabado who diagnosed him with “loss of grasping power of 5th finger, loss of opposition between finger and thumb (r) and ankylosis of the 5thfinger (r),” and certified that he was “permanently unfit for any sea duty.” Petitioners denied liability alleging that Pellazar failed to comply with his duty to observe the dispute resolution provisions of the CBA. Also, that Pellazar was not entitled to disability compensation higher than what was provided under a Grade 10 disability rating as that was the company-designated physician’s assessment of his disability. A Grade 10 disability is compensated US$10,075.00 under the POEA Standard Employment Contract (POEA-SEC). LA: in favor of Pellazar NLRC: affirmed but modified the labor arbiter’s decision ruling that Pellazar is entitled only to an award of $10,075.01 which is the equivalent of a Grade 10 disability in accordance with the disability rating given to him by the company-designated physicians CA: reversed the challenged NLRC rulings and, reinstated LA’s award of permanent total disability benefits to Pellazar ISSUE: Whether Pellazar is entitled to a Grade 10 disability or a permanent total disability. SC RULING: Entitlement to disability benefits by seamen on overseas work is a matter governed, not only by medical findings but, by Philippine law and by the contract between the parties. The material statutory provisions are Articles 191 to 193 under Chapter VI (Disability Benefits) of the Labor Code, in relation with Rule X of the Rules and Regulations Implementing Book IV of the Labor Code. By contract, Department Order No. 4, series of 2000 of the Department of Labor and Employment (the POEA Standard Employment Contract) and the parties' CBA bind the seaman and his employer to each other. The terms under the POEA-SEC are to be read in accordance with what the Philippine law provides. Under the POEA-SEC and the AMOSUP/IMEC TCCC CBA, the degree of disability arising from a work-connected injury or illness of a seafarer or his fitness to work shall be assessed by the company-designated physician to make the employer liable. Controversy arose, however, when Pellazar consulted a physician of his choice, whose findings are in conflict with those of the company-designated physicians. This conflict invariably leads to the question of whose findings should prevail. 44 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS In the present case, since there is a conflict in the assessment of the company-designated physicians and Dr. Sabado’s certification in relation to Pellazar’s fitness or unfitness to work, the matter should have been referred to a third doctor for final determination as required by the POEA-SEC and the parties’ CBA. Since Pellazar was responsible for the non-referral to the third doctor because of his failure to inform the manning agency that he would be consulting Dr. Sabado, he should suffer the consequences of the absence of a binding third opinion. Thus, the NLRC was well within the bounds of its jurisdiction, in upholding the disability assessment of Drs. De Guzman and Banaga as against Pellazar’s physician of choice. Since the company-designated physicians gave Pellazar only a Grade 10 disability - and not a permanent total disability - he cannot be entitled to the full disability benefits of US$75,000.00 under the CBA
45 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 29. ESTRELLA D. S. BAÑEZ v. SOCIAL SECURITY SYSTEM AND DE LA SALLE UNIVERSITY G.R. No. 189574 July 18, 2014 PEREZ, J.: DOCTRINE: For death benefits the law requires proof by substantial evidence, or such relevant evidence which a reasonable mind might accept as adequate to justify a conclusion, that the nature of his employment or working conditions increased the risk of contracting the ailment or that its progression or aggravation was brought about thereby. FACTS: Baylon, the husband of petitioner, was employed by DLSU. From 21991-2006, Baylon worked as a Laboratory Technician at the Chemistry Department. In 2006, Baylon was confined at Manila Doctors Hospital due to fever, weakness, dysuria and flank pains. He was diagnosed to be suffering from urinary tract infection. A month later he was confined again for functional dyspepsia. Later, he was diagnosed to be suffering from Systemic Lupus Erythematosus (SLE). Dr. Castillo prepared a clinical abstract/toxicologic assessment on Baylon and she stated that “based on the occupational history of the patient, x x x the probability of a chemically induced disease cannot be discounted. Baylon succumbed to the complications of his disease on 27 August 2006. Baylon’s attending physician, Dr. Torres, issued a Medical Certificate stating that Baylon who was confined and expired in Medical Center Manila for Systemic Lupus Erythematosus may have been precipitated by the chronic exposure to chemicals which is an occupational hazard in his performance of being a laboratory technician. Based on medical opinions of Dr. Castillo and Dr. Torres, petitioner filed a claim for death benefits under the Employees’ Compensation Law before the Social Security System (SSS). SSS: Denied claim on two grounds: 1) the cause of death, cardiac complication of SLE, is not considered workrelated; and 2) SLE is not included in the list of occupational diseases. ECC: Also denied claim on the ground that “SLE is caused by a genetic tendency to mount an abnormal immune response against one’s own tissues or organs leading to their destruction or malfunction.” CA: dismissed petition for review for being filed out of time. ISSUE: Whether petitioner’s claim should prosper. SC RULING: NO. In order for the beneficiary of an employee to be entitled to death benefits under the SSS, the cause of death of the employee must be a sickness listed as an occupational disease by ECC; or any other illness caused by employment, subject to proof that the risk of contracting the same is increased by the working conditions. It is undisputed that SLE is not listed as an occupational disease under Annex “A” of the Rules on Employees’ Compensation. Thus, petitioner has to prove by substantial evidence the causal relationship between her husband’s illness and his working conditions. While there are certain chemicals accepted as increasing the risks of contracting SLE such as chlorinated pesticides and crystalline silica, the law requires proof by substantial evidence, or such relevant evidence which a reasonable mind might accept as adequate to justify a conclusion, that the nature of his employment or working conditions increased the risk of contracting the ailment or that its progression or aggravation was brought about thereby. Petitioner relied unqualifiedly on the toxicological report which failed to prove the causal relationship between Baylon’s work and his illness. The report made an indirect link between SLE and chemicals through “drug-induced lupus.” SLE and Drug-Induced Lupus Erythematosus are both autoimmune diseases. Drug-induced lupus is a temporary and mild form of lupus caused by certain prescription medications. They include some types of high blood pressure 46 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS drugs (such as hydralazine, ACE inhibitors, and calcium and diuretics (hydrochlorothiazide). Symptoms resolve once the medication is stopped.
channel
blockers)
Furthermore, the toxicological report made mention of “certain drugs with chemical structures related to aromatic amines or substituted hydrazines, listed in the inventory of the school, can affect the immune system. This would include Benzenes, Naphthylamine, Toluene, Dinitrophenylhydrazine, etc.” However, these drugs were not proven to have been administered on Baylon. These substances which can induce the disease all pertain to drugs which are orally administered on the patient. There is no showing that the drugs given to Baylon had increased his risk of contracting Drug-Induced Lupus and SLE.
47 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 30. ALPHA SHIP MANAGEMENT CORPORATION/JUNEL M CHAN and/or CHUO-KAIUN COMPANY, LIMITED v. ELEOSIS v. CALO G.R. No. 192034 January 13, 2014 DEL CASTILLO, J.: DOCTRINE: An employee’s disability becomes permanent and total when so declared by the company-designated physician, or, in case of absence of such a declaration either of fitness or permanent total disability, upon the lapse of the 120 or 24045-day treatment period, while the employee’s disability continues and he is unable to engage in gainful employment during such period, and the company-designated physician fails to arrive at a definite assessment of the employee’s fitness or disability. This is true "regardless of whether the employee loses the use of any part of his body. FACTS: Respondent Calo worked for petitioners Alpha Ship, Junel M. Chan and their foreign principal, (CKCL) under 7 employment contracts. While MV Iris was in China, respondent suffered back pain on the lower part of his lumbar region and urinated with solid particles. On checkup, the doctor found him suffering from urinary tract infection and renal colic, and was given antibiotics. When respondent’s condition did not improve, he consulted another doctor in Chile and was found to have kidney problems and urinary tract infection but was declared fit for work on a "light duty" basis. In Japan, respondent was diagnosed with suspected renal and/or ureter calculus and was declared "unfit for work”. Respondent was thus repatriated and was referred by petitioners to Dr. Cruz, the company-designated physician who continously examined respondent from 2004-2005. Respondent, who felt that his condition has not improved – consulted another specialist in internal medicine, Dr. Vicaldo, who issued the following diagnosis: that it was Impediment Grade X, that he is now unfit to resume work as seaman in any capacity and that his illness is considered work aggravated/related. Respondent filed a claim for disability benefits with petitioners, but the claim was denied. LA: granted permanent total disability benefits and attorney’s fees to respondent, but denied his claim for moral and exemplary damages. NLRC: Appeal is granted. The decision of the Labor Arbiter was vacated and set aside. The complaint for dismissed for lack of merit. CA: NLRC decision was reversed. Decision of the Labor Arbiter was reinstated. ISSUE: Whether respondent’s claim for disability benefits should prosper. SC RULING: YES. An employee’s disability becomes permanent and total when so declared by the company-designated physician, or, in case of absence of such a declaration either of fitness or permanent total disability, upon the lapse of the 120 or 24045-day treatment period, while the employee’s disability continues and he is unable to engage in gainful employment during such period, and the company-designated physician fails to arrive at a definite assessment of the employee’s fitness or disability. This is true "regardless of whether the employee loses the use of any part of his body." Respondent was repatriated on October 12, 2004 and underwent treatment by the company-designated physician, Dr. Cruz, until October 14, 2005, or for a continuous period of over one year – or for more than the statutory 120-day47 or even 240-day48 period. During said treatment period, Dr. Cruz did not arrive at a definite assessment of respondent’s fitness or disability; thus, respondent’s medical condition remained unresolved. It was only on July 18, 2006 that respondent was declared fit to work by Dr. Cruz. Such declaration, however, became irrelevant, for by then, respondent had been under medical treatment and unable to engage in gainful employment for more than 240 days. Pursuant to the doctrine in Kestrel, the conclusive presumption that the respondent is totally and permanently disabled thus arose. 48 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS In the same manner, the issue of which among the two diagnoses or opinions should prevail – that of Dr. Cruz or Dr. Vicaldo – is rendered irrelevant in view of the lapse of the said 240-day period. As far as the parties are concerned, respondent’s medical treatment and disability continued for more than 240 days without any finding or diagnosis by the company-designated physician that he was fit to resume work. Thus, consonant with law and jurisprudence, respondent is entitled to a declaration of permanent total disability, as well as the corresponding benefit attached thereto in the amount of US$60,000.00.
49 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 31. INC. SHIPMANAGEMENT, INC., CAPTAIN SIGFREDO E. MONTERROYO AND/OR INTERORIENT NAVIGATION LIMITED, v. ALEXANDER L. MORADAS G.R. No. 178564 January 15, 2014 PERLAS-BERNABE, J.: PAYMENT OF DISABILITY BENEFITS DOCTRINE: An employer shall be liable for the injury or illness suffered by a seafarer during the term of his contract. There is no need to show that such injury is work-related except that it must be proven to have been contracted during the term of the contract. The rule, however, is not absolute and the employer may be exempt from liability if he can successfully prove that the cause of the seaman’s injury was directly attributable to his deliberate or willful act. FACTS: Respondent was employed as wiper for the vessel MV Commander by petitioner INC Shipmanagement, Inc. for its principal, petitioner Interorient Navigation, Ltd. Respondent claimed while working, certain chemicals splashed all over his body because of an explosion. Respondent demanded for the payment of his full disability benefits under Section 20 (B) in relation to Sections 30 and 30-A of the Philippine Overseas Employment Agency (POEA) Standard Employment Contract (POEA-SEC), in the amount of US$60,000.00, which petitioners refused to heed. Thus, respondent filed a complaint against petitioners for the same. Petitioners denied respondent’s claims, contending that his injury was self-inflicted and, hence, not compensable under Section 20 (D) of the POEA-SEC. They denied that there was an explosion and claimed that respondent poured thinners on himself and set himself on fire. They averred that he was led to commit such act because he was to be dismissed for stealing supplies. They also stated that before they discovered respondent burning, he caused flooding in the engine room. LA RULING: The LA ruled in favor of petitioners, dismissing respondent’s complaint for lack of merit. The LA held that respondent’s injury was self-inflicted and that no incinerator explosion occurred that would have caused the latter’s injuries. NLRC RULING: The NLRC sustained the findings of the LA. It pointed out that respondent’s mental or physical fitness was not at issue since he was motivated to inflict injury to himself for reasons related to his impending discharge and not because of his disposition. CA RULING: CA found that the NLRC gravely abused its discretion. It found no logical and causal connection between the act of pilferage as well as the act of causing the flooding in the engine room and the conclusion that respondent’s injury was self-inflicted. It added that it was contrary to human nature and experience for respondent to burn himself. ISSUE: Is the petitioner liable to pay the permanent total disability benefits? SC RULING: NO. The prevailing rule under Section 20 (B) of the 1996 POEA-SEC on compensation and benefits for injury or illness was that an employer shall be liable for the injury or illness suffered by a seafarer during the term of his contract. There was no need to show that such injury was work-related except that it must be proven to have been contracted during the term of the contract. The rule, however, is not absolute and the employer may be exempt from liability if he can successfully prove that the cause of the seaman’s injury was directly attributable to his deliberate or willful act as provided under Section 20 (D) thereof. Petitioners have successfully discharged the burden of proving by substantial evidence that respondent’s injury was directly attributable to himself. First, records bear out circumstances which all lead to the reasonable conclusion that respondent was responsible for the flooding and burning incidents. The LA and NLRC gave credence to the corroborating testimonies of the crewmen pointing to respondent as the person who deliberately caused the flooding incident. Second, respondent’s version that the burning was caused by an accident is hardly supported by the evidence on record. In addition to testimonies, an inspection of the incinerator after the incident showed that there were unburnt cardboard cartons found inside with no sign of explosion and the steel plates surrounding it were cool to the touch. 50 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Third, petitioners’ theory that respondent’s burns were self-inflicted gains credence through the existence of motive. Both the LA and the NLRC made a factual finding that prior to the burning incident, respondent was caught pilfering the vessel’s supplies for which he was told that he was to be relieved from his duties. This adequately supports the reasonable conclusion that respondent may have harbored a grudge against the captain and the chief steward who denied giving him the questioned items. At the very least, it was natural for him to brood over feelings of resentment considering his impending dismissal. These incidents shore up the theory that he was motivated to commit an act of sabotage which, however, backfired into his own burning. All told, petitioners having established through substantial evidence that respondent’s injury was self-inflicted and, hence, not compensable pursuant to Section 20 (D) of the 1996 POEA-SEC.
51 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 32. UNITED PHILIPPINE LINES, INC. AND HOLLAND AMERICA LINE, v. GENEROSO E. SIBUG G.R. No. 201072 April 2, 2014 VILLARAMA, JR., J.: PHYSICIAN ASSESMENT RE: PERMANENT AND TOTAL DISABILITY DOCTRINE: Company-designated physicians must arrive at a definite assessment of the seafarer’s fitness to work or permanent disability within the period of 120 or 240 days. If he fails to do so and the seafarer’s medical condition remains unresolved, the latter shall be deemed totally and permanently disabled. FACTS: Petitioners hired Sibug as waste handler on the vessel M/S Volendam. While cleaning, Sibug fell from a ladder and suffered from Anterior Cruciate Ligament (ACL) which required surgery. After being declared fit for work, Sibug was rehired by petitioners for the vessel M/S Ryndam. Sibug met another accident injuring his right hand and wrist. He was repatriated and arrived in the Philippines on Jan. 15, 2007. On Sep. 7, 2007, the company doctor issued a medical report that Sibug has a permanent but incomplete disability. In an email dated Sep. 28, 2007, the company doctor classified Sibug’s disability as a grade 10 disability. Sibug filed two complaints for disability benefits, illness allowance, damages and attorney’s fees against petitioners. LA RULING: Dismissed the Volendam case on the ground that Sibug was declared fit to work after his ACL reconstruction surgery. As regards the Ryndam case, the Labor Arbiter awarded to Sibug US$10,075 which is the equivalent award for the grade 10 disability rating issued by the company-designated doctor. NLRC RULING: Reversed the LA’s Decision granting Sibug permanent and total disability benefit of US$60,000 for his Volendam injury and another US$60,000 for his Ryndam injury. On reconsideration it reinstated the LA decision. CA RULING: Reinstated the NLRC’s first decision ruling that Sibug was unable to perform his customary work for more than 120 days on account of his Volendam and Ryndam injuries. Thus, he is entitled to permanent and total disability benefit for both injuries. ISSUE: Is Sibug entitled to permanent and total disability benefits? SC RULING: Volendam Injury – No. Ryndam Injury – Yes. Sibug is not entitled to permanent and total disability benefit for his Volendam injury since he became already fit to work again as a seaman. As regards his Ryndam injury, Sibug is entitled to permanent and total disability benefit amounting to US$60,000. The company-designated doctor failed to issue a certification with a definite assessment of the degree of Sibug’s disability for his Ryndam injury within 240 days. In Fil-Pride Shipping Company, Inc., et al. v. Balasta, we held that the "company-designated physician must arrive at a definite assessment of the seafarer’s fitness to work or permanent disability within the period of 120 or 240 days, pursuant to Article 192 (c)(1) of the Labor Code and Rule X, Section 2 of the Amended Rules on Employees Compensation. If he fails to do so and the seafarer’s medical condition remains unresolved, the latter shall be deemed totally and permanently disabled." This definite assessment of the seaman’s permanent disability must include the degree of his disability, as required by Section 20-B of the POEA-SEC. In this case, Sibug was repatriated and arrived in the country on January 15, 2007 after his Ryndam injury. On September 7, 2007, the company-designated doctor issued a medical report that Sibug has a permanent but incomplete disability. But this medical report failed to state the degree of Sibug’s disability. Only in an email dated September 28, 2007, copy of which was attached as Annex 3 of petitioners’ position paper, was Sibug’s disability from his Ryndam injury classified as a grade 10 disability by the company-designated doctor. By that time, however, the 240-day extended period when the company-designated doctor must give the definite assessment of Sibug’s disability had lapsed. From January 15, 2007 to September 28, 2007 is 256 days. Hence, Sibug’s disability is already deemed permanent and total. 52 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 33. MAGSAYSAY MARITIME CORPORATION, v. OSCAR D. CHIN, JR. G.R. No. 199022 April 7, 2014 ABAD, J.: PERMANENT AND TOTAL DISABILITY BENEFIT – LOSS OF EARNING CAPACITY DOCTRINE: After an award of disability compensation, an additional award for loss of earnings will result in double recovery. In a catena of cases, the Court has consistently ruled that disability should not be understood more on its medical significance but on the loss of earning capacity. Permanent total disability means disablement of an employee to earn wages in the same kind of work, or work of similar nature that he was trained for or accustomed to perform, or any kind of work which a person of his mentality and attainment could do. Disability, therefore, is not synonymous with "sickness" or "illness." What is compensated is one’s incapacity to work resulting in the impairment of his earning capacity. FACTS: Thome Ship Management Pte. Ltd., acting through its agent petitioner Magsaysay Maritime Corporation hired respondent Chin as seaman on board MV Star Siranger. Chin sustained injuries while working on his job aboard the vessel. Chin filed a claim for disability with Pandiman Phils., Inc. which is the local agent of P&I Club of which Magsaysay Maritime is a member. Pandiman offered US$30,000.00 as disability compensation which Chin accepted. He then executed a Release and Quitclaim in favor of Magsaysay Maritime. Chin later filed a complaint with (NLRC), claiming underpayment of disability benefits and attorney’s fees. The LA dismissed it for lack of merit, which the NLRC affirmed. The CA reversed the NLRC and ruled that Chin was entitled to permanent total disability benefit of US$60,000.00. It remanded the case to the LA for determination of other monetary awards. Magsaysay paid the deficiency award of US$30,000.00. LA RULING: The LA ordered Magsaysay to pay Chin: a) P19,279.75 as reimbursement for medical expenses; b) US$147,026.43 as loss of future wages; c) P200,000.00 as moral damages; d) P75,000.00 as exemplary damages; and e) 10% of the total award as attorney’s fees. NLRC RULING: modified the Labor Arbiter’s Decision by deleting the awards of loss of future wages and moral and exemplary damages for lack of factual and legal bases. CA RULING: reversed NLRC; reinstated LA ruling ISSUE: Is Chin entitled to an award of loss of future earnings on top of his disability benefits? SC RULING: NO. The Labor Arbiter’s award of loss of earning is unwarranted since Chin had already been given disability compensation for loss of earning capacity. An additional award for loss of earnings will result in double recovery. In a catena of cases, the Court has consistently ruled that disability should not be understood more on its medical significance but on the loss of earning capacity. Permanent total disability means disablement of an employee to earn wages in the same kind of work, or work of similar nature that he was trained for or accustomed to perform, or any kind of work which a person of his mentality and attainment could do. Disability, therefore, is not synonymous with "sickness" or "illness." What is compensated is one’s incapacity to work resulting in the impairment of his earning capacity. Moreover, the award for loss of earning lacks basis since the Philippine Overseas Employment Agency (POEA) Standard Contract of Employment (POEA SCE), the governing law between the parties, does not provide for such a grant. What Section 20, paragraph (G) of the POEA SCE provides is that payment for injury, illness, incapacity, disability, or death of the seafarer covers "all claims arising from or in relation with or in the course of the seafarer’s employment, including but not limited to damages arising from the contract, tort, fault or negligence under the laws of the Philippines or any other country." The permanent disability compensation of US$60,000 clearly amounts to reasonable compensation for the injuries and loss of earning capacity of the seafarer
53 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 34. CARLO F. SUNGA, v. VIRJEN SHIPPING CORPORATION, NISSHO ODYSSEY SHIP MANAGEMENT PTE. LTD., and/or CAPT. ANGEL ZAMBRANO, G.R. No. 198640 April 23, 2014 BRION, J.: DISABILITY BENEFITS DOCTRINE: An accident pertains to an unforeseen event in which no fault or negligence attaches to the defendant. It is "a fortuitous circumstance, event or happening; an event happening without any human agency, or if happening wholly or partly through human agency, an event which under the circumstances is unusual or unexpected by the person to whom it happens." FACTS: Sunga was hired as fitter by Virjen Shipping Corporation (Virjen), acting in behalf of its foreign principal, Nissho Odyssey Ship Management Pte. Ltd. While on board the MT Sunway vessel, Sunga started to experience an on-and-off right flank pain, making it difficult for him to work. Dr. Cruz issued a medical certificate recommending a Grade 8 disability based on the POEA Standard Employment Contract; and another recommending a disability rating of 25% in accordance with the CBA. Based on these two certificates, Virjen offered US$ 16,795.00 in accordance with the POEA-SEC. Sunga rejected the offer and demanded disability benefits pursuant to the CBA. Virjen denied Sunga’s demand prompting the latter to file a complaint for disability benefits. Virjen claimed that the CBA requires that for permanent disability to be compensable, the disability should be the result of an accident incurred during the course of the seafarer’s employment. Virjen argued that Sunga failed to present any proof that his disability was indeed the result of an accident. LA RULING: In favour of Sunga. Ordered Virjen to pay US$110,000 pursuant to the CBA. The result of the MRI revealed that Sunga had a herniated disc is already a manifestation that the injury resulted from an accident, commonly incurred through falling or by lifting heavy objects. NLRC RULING: Affirmed the LA CA RULING: Reversed the NLRC. The injury was not accidental since carrying heavy objects can cause injury and that lifting and carrying heavy objects are part of his duties as fitter. Thus, a back injury is reasonably anticipated. It cannot serve as basis for Sunga to be entitled to disability benefits. ISSUE: Is Sunga entitled to the benefits under the CBA? SC RULING: YES. Sunga did not incur the injury while solely performing his regular duties; an intervening event transpired which brought upon the injury. To repeat, the two other oilers who were supposed to help carry the weight of the 200-kilogram globe valve lost their grasp of the globe valve. As a result, Sunga’s back snapped when the entire weight of the item fell upon him. Notably, this incident cannot be considered as foreseeable, nor can it be reasonably anticipated. Sunga’s duty as a fitter involved changing the valve, not to routinely carry a 200-kilogram globe valve singlehandedly. In Jarco Marketing Corporation, et al., v. Court of Appeals, we ruled that an accident pertains to an unforeseen event in which no fault or negligence attaches to the defendant. It is "a fortuitous circumstance, event or happening; an event happening without any human agency, or if happening wholly or partly through human agency, an event which under the circumstances is unusual or unexpected by the person to whom it happens." Since Sunga encountered an accident on board MT Sunway, the CA thus grossly misappreciated and misread the ruling of the NLRC, leading the appellate court to find a grave abuse of discretion sufficient for a reversal of the NLRC ruling. In other words, as the NLRC found, Sunga's disability benefits should fall within the coverage of the parties' CBA.
54 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 35. D. M. CONSUNJI, INC., v. COURT OF APPEALS and MARIA J. JUEGO G.R. No. 137873 April 20, 2001 KAPUNAN, J.: EXCEPTION TO THE WAIVER BY ELECTION DOCTRINE: An injured worker has a choice of either to recover from the employer the fixed amounts set by the Workmen’s Compensation Act or to prosecute an ordinary civil action against the tortfeasor for higher damages but he cannot pursue both courses of action simultaneously. However, if the choice of the first remedy was based on ignorance or a mistake of fact, the choice is nullified as it was not an intelligent choice. FACTS: On Nov. 2, 1990, Jose Juego, a construction worker of D. M. Consunji, Inc., fell 14 floors from the Renaissance Tower, resulting to his death. Jose Juego’s widow, Maria, filed in the RTC a complaint for damages against the deceased’s employer, D.M. Consunji, Inc. The employer raised, among other defenses, the widow’s prior availment of the benefits from the State Insurance Fund. Petitioner argues that private respondent had previously availed of the death benefits provided under the Labor Code and is, therefore, precluded from claiming from the deceased’s employer damages under the Civil Code. RTC RULING: Ruled in favour of Juego, awarding among others, damages. CA RULING: Affirmed the RTC. ISSUE: Is Juego precluded from recovering damages? SC RULING: No. An injured worker has a choice of either to recover from the employer the fixed amounts set by the Workmen’s Compensation Act or to prosecute an ordinary civil action against the tortfeasor for higher damages but he cannot pursue both courses of action simultaneously. However, if the choice of the first remedy was based on ignorance or a mistake of fact, the choice is nullified as it was not an intelligent choice. When a party having knowledge of the facts makes an election between inconsistent remedies, the election is final and bars any action, suit, or proceeding inconsistent with the elected remedy, in the absence of fraud by the other party. The choice of a party between inconsistent remedies results in a waiver by election. The claimant, by his choice of one remedy, is deemed to have waived the other. However, ignorance of a material fact negates waiver. Waiver cannot be established by a consent given under a mistake or misapprehension of fact. That lack of knowledge of a fact that nullifies the election of a remedy is the basis for the exception. It bears stressing that what negates waiver is lack of knowledge or a mistake of fact. Private respondent’s case came under the exception because private respondent was unaware of petitioner’s negligence when she filed her claim for death benefits from the State Insurance Fund. Private respondent filed the civil complaint for damages after she received a copy of the police investigation report and the Prosecutor’s Memorandum dismissing the criminal complaint against petitioner’s personnel. There is also no showing that private respondent knew of the remedies available to her when the claim before the ECC was filed. On the contrary, private respondent testified that she was not aware of her rights.
55 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 36. THE HEIRS OF THE LATE DELFIN DELA CRUZ, REPRESENTED BY HIS SPOUSE, CARMELITA DELA CRUZ v. PHILIPPINE TRANSMARINE CARRIERS, INC., REPRESENTED BY MR. CARLOS C. SALINAS AND/OR TECTO BELGIUM N.V. G.R. No. 196357 April 20, 2015 DEL CASTILLO, J. THE 3-DAY MANDATORY REPORTING REQUIREMENT MUST BE STRICTLY OBSERVED. DOCTRINE: The 3-day mandatory reporting requirement must be strictly observed since within 3 days from repatriation, it would be fairly manageable for the physician to identity whether the disease was contracted during the term of his employment or that his working conditions increased the risk of contracting the ailment. FACTS: The late Delfin Dela Cruz was contracted for the position of Oiler by Philippine Transmarine Carriers, a local manning agent for and in behalf of the latter's principal, Tecto Belgium N.V. Delfin was declared Fit for Sea Servce and left the Philippines on 16 August 2000 and immediately embarked the vessel "Lady Hilde" on 17 August 2000. While on board, he felt gradual chest pains and pain in his upper abdominal region. In 2001, while performing his regular duties, he was hit by a metal board on his back. He, thereafter, requested medical attention and was given medications and advised to be given light duties for the rest of the week. Upon the vessel's arrival at a convenient port on 16 August 2001, his contract expired and he was signed off from the vessel. He reported to respondents as required. He also sought medical assistance but was not extended such. On 13 November 2003, Delfin sought for proper medical attention. Afterwards, he was not employed by respondents because he was already incapacitated to engage in his customary work. He filed his claim for sickness allowance from the same manning agency but the same was not granted. His condition deteriorated and was later diagnosed to be suffering from malignant peripheral nerve sheath tumor [MPNST]. On 4 December 2003, he filed a complaint before the NLRC to, claim payment for sickness allowance and disability compensation. Delfin averred that he is entitled to sickness allowance because his inability to work and perform his usual occupation after he acquired the sickness while on board, lasted for more than 120 days. Respondents, on the other hand, averred that the medical condition of Delfin was not acquired or suffered during the term of his employment, that said medical condition is not work-related, and, therefore, the said illness is not compensable under the POEA Standard Employment Contract. Furthermore, respondents asseverated that more than two years had elapsed from the time of the termination of Delfin's employment in August 2001 up to the time the claim was filed in November 2003, and thus the illness was not acquired during the period of employment. LA RULING: Delfin is ENTITLED to his claims. The LA opined that Delfin contracted his illness during the period of his employment with respondents and that such illness is a compensable occupational disease. Hence, NLRC RULING: It REVERSED the LA decision. CA RULING: AFFIRMED NLRC ISSUE: Are petitioners, in behalf of the late Delfin Dela Cruz, entitled to permanent disability benefits and sickness allowance? SC RULING: NO. The 1996 POEA SEC clearly provides that a seafarer must submit himself to a post-employment medical examination within three days from his arrival in the Philippines (mandatory reporting requirement) so that his claim for disability and sickness allowance can prosper. The 3-day mandatory reporting requirement must be strictly observed since within 3 days from repatriation, it would be fairly manageable for the physician to identity whether the disease was contracted during the term of his employment or that his working conditions increased the risk of contracting the ailment. Whoever claims entitlement to the benefits provided by law should establish his right to the benefits by substantial evidence" or "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, 56 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS even if other equally reasonable minds might conceivably opine otherwise." Absent a showing thereof, any decision set forth will only be based on unsubstantiated allegations. Accordingly, the Court cannot grant a claim for disability benefits without adequate substantiation for to do so will offend due process. Petitioners failed to show the steps supposedly undertaken by Delfin to comply with the mandatory reporting requirement. To the Court's mind, this lapse on petitioners' part only demonstrates that Delfin did not comply with what was incumbent upon him. The reasonable conclusion, therefore, is that at the time of his repatriation, Delfin was not suffering from any physical disability requiring immediate medical attendance. Otherwise, and even if his request for medical assistance went unheeded, he would have submitted himself for check-up with his personal physician. After all, the injury complained of by Delfin was a serious one and it would seem illogical for him to just suffer in silence and bear the pain for a considerable length of time. Moreover, while the rule on mandatory reporting requirement is not absolute as a seafarer may show that he was physically incapable to comply with the same by submitting a written notice to the agency within the same three-day period, nowhere in the records does it show that Delfin submitted any such notice. Clearly, petitioners failed to show that Delfin complied with the mandatory reporting requirement. Thus, he is deemed to have forfeited his right to claim disability benefits and sickness allowance.
57 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 37. SOCIAL SECURITY COMMISSION v. EDNA A. AZOTE G.R. No. 209741 April 15, 2015 MENDOZA, J. DESIGNATION OF BENEFICIARY MUST CONFORM TO THE STATUTE. DOCTRINE: Although an SSS member is free to designate a beneficiary, the designation must always conform to the statute. To blindly rely on the form submitted by the deceased-member would subject the entire social security system to the whims and caprices of its members and would render the SS Law inutile. FACTS: On June 19, 1992, respondent Edna and Edgardo, a member of the Social Security System (SSS), were married. Their union produced six children. In 1994, Edgardo submitted Form E-4 to the SSS with Edna and their three older children as designated beneficiaries. Thereafter or on September 7, 2001, Edgardo submitted another Form E-4 to the SSS designating his three younger children as additional beneficiaries. On January 13, 2005, Edgardo passed away. Shortly thereafter, Edna filed her claim for death benefits with the SSS as the wife of a deceased-member. It appeared, however, from the SSS records that Edgardo had earlier submitted another Form E-4 on November 5, 1982 with a different set of beneficiaries, namely: Rosemarie Azote (Rosemarie), as his spouse; and Elmer Azote (Elmer), as dependent, born on October 9, 1982. Consequently, Edna’s claim was denied. Her children were adjudged as beneficiaries and she was considered as the legal guardian of her minor children. The benefits, however, would be stopped once a child would attain the age of 21. On March 13, 2007, Edna filed a petition with the SSC to claim the death benefits, lump sum and monthly pension of Edgardo.7 She insisted that she was the legitimate wife of Edgardo. In its answer, the SSS averred that there was a conflicting information in the forms submitted by the deceased. Summons was published in a newspaper of general circulation directing Rosemarie to file her answer. Despite the publication, no answer was filed and Rosemarie was subsequently declared in default. SSC RULING: Edna is NOT ENTITLED to the benefits. The SSC dismissed Edna’s petition for lack of merit. Citing Section 24(c) of the SS Law, it explained that although Edgardo filed the Form E-4 designating Edna and their six children as beneficiaries, he did not revoke the designation of Rosemarie as his wife-beneficiary, and Rosemarie was still presumed to be his legal wife. CA RULING: Reversed SSC decision. ISSUE: Is respondent entitled to claim the SSS death benefit and pension of Edgardo? SC RULING: NO. Under R. A. No. 8282, the law in force at the time of Edgardo’s death, only the legal spouse of the deceasedmember is qualified to be the beneficiary of the latter’s SS benefits. In this case, there is a concrete proof that Edgardo contracted an earlier marriage with another individual as evidenced by their marriage contract and Edgardo’s acknowledgment of his married status when he filled out the 1982 Form E-4 designating Rosemarie as his spouse. The updated Form E-4 of Edgardo was not determinative of Edna’s status and eligibility to claim the death benefits of deceased-member. Although an SSS member is free to designate a beneficiary, the designation must always conform to the statute. To blindly rely on the form submitted by the deceased-member would subject the entire social security system to the whims and caprices of its members and would render the SS Law inutile. Although the SSC is not intrinsically empowered to determine the validity of marriages, it is required by Section 4(b) (7) of R.A. No. 8282 to examine available statistical and economic data to ensure that the benefits fall into the rightful beneficiaries. The existence of two Form E-4s designating, on two different dates, two different women as his spouse is already an indication that only one of them can be the legal spouse. It should be emphasized that the SSC determined Edna’s eligibility on the basis of available statistical data and documents on their database as expressly permitted by Section 4(b) (7) of R.A. No. 8282. 58 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 38. SOCIAL SECURITY COMMISSION and SOCIAL SECURITY SYSTEM vs. TERESA G. FAVILA G.R. No. 170195 March 28, 2011 DEL CASTILLO, J. FACTORS FOR SPOUSE TO BE CONSIDERED AS PRIMARY BENEFICIARY DOCTRINE: A spouse who claims entitlement to death benefits as a primary beneficiary under the Social Security Law must establish two qualifying factors, to wit: (1) that he/she is the legitimate spouse; and (2) that he/she is dependent upon the member for support. FACTS: On August 5, 2002, respondent Teresa G. Favila (Teresa) filed a Petition before petitioner SSC. She averred therein that after she was married to Florante Favila (Florante) on January 17, 1970, the latter designated her as the sole beneficiary in the E-1 Form he submitted before petitioner Social Security System (SSS). When they begot their children Jofel, Floresa and Florante II, her husband likewise designated each one of them as beneficiaries. When Florante died on February 1, 1997, his pension benefits under the SSS were given to their only minor child at that time, Florante II, but only until his emancipation at age 21. Believing that as the surviving legal wife she is likewise entitled to receive Florante’s pension benefits, Teresa subsequently filed her claim for said benefits before the SSS. In its Answer, SSS averred that the claim for Florante’s pension benefits was initially settled in favor of Teresa as guardian of the minor Florante II. SSS also alleged that Estelita Ramos, sister of Florante, wrote a letter stating that her brother had long been separated from Teresa. She alleged therein that the couple lived together for only ten years and then decided to go their separate ways because Teresa had an affair with a married man. SSC RULING: The SSC ruled that she is DISQUALIFIED from claiming the death benefits because she was deemed not dependent for support from Florante due to marital infidelity. CA RULING: The CA REVERSED the SSC decision. It gave weight to the fact that she is a primary beneficiary because she is the lawful surviving spouse of Florante and in addition, she was designated by Florante as such beneficiary. ISSUE: Is Teresa a primary beneficiary in contemplation of the Social Security Law as to be entitled to death benefits accruing from the death of Florante? SC RULING: NO. A spouse who claims entitlement to death benefits as a primary beneficiary under the Social Security Law must establish two qualifying factors, to wit: (1) that he/she is the legitimate spouse; and (2) that he/she is dependent upon the member for support. There is no question that Teresa was Florante’s legal wife. However, Teresa failed to show that despite their separation she was dependent upon Florante for support at the time of his death. Aside from Teresa’s bare allegation that she was dependent upon her husband for support and her misplaced reliance on the presumption of dependency by reason of her valid and then subsisting marriage with Florante, Teresa has not presented sufficient evidence to discharge her burden of proving that she was dependent upon her husband for support at the time of his death. She could have done this by submitting affidavits of reputable and disinterested persons who have knowledge that during her separation with Florante, she does not have a known trade, business, profession or lawful occupation from which she derives income sufficient for her support and such other evidence tending to prove her claim of dependency. While we note from the abovementioned SSS Memorandum that Teresa submitted affidavits executed by Napoleon Favila and Josefina Favila, same only pertained to the fact that she never remarried nor cohabited with another man. On the contrary, what is clear is that she and Florante had already been separated for about 17 years prior to the latter’s death as Florante was in fact, living with his common law wife when he died. Suffice it to say that "whoever claims entitlement to the benefits provided by law should establish his or her right thereto by substantial evidence."
59 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 39. ROMARICO J. MENDOZA vs. PEOPLE OF THE PHILIPPINES G.R. No. 183891 August 3, 2010 CARPIO MORALES, J. MANAGING HEAD- MEANING DOCTRINE: The term "managing head" in Section 28(f) is used, in its broadest connotation, not to any specific organizational or managerial nomenclature. FACTS: An Information was filed against petitioner, being the proprietor of Summa Alta Tierra Industries, Inc. (SATII), for failure and/or refusal to remit the SSS premium contributions in favor of its employees, in violation of Sec. 22(a) and (d) in relation to Sec. 28 of Republic Act No. 8282, as amended. The monthly premium contributions of SATII employees to SSS which petitioner admittedly failed to remit covered the period August 1998 to July 1999 amounting to P421, 151.09 inclusive of penalties. After petitioner was advised by the SSS to pay the above-said amount, he proposed to settle it over a period of 18 months which proposal the SSS approved. Despite the grant of petitioner’s request for several extensions of time to settle the delinquency in installments, petitioner failed, hence, his indictment. Petitioner maintains that the managing head or president or general manager of a corporation is not among those specifically mentioned as liable in the above-quoted Section 28(f). And he calls attention to an alleged congenital infirmity in the Information in that he was charged as "proprietor" and not as director of SATII. RTC RULING: Found Mendoza GUILTY for failure to remit the Social Security System (SSS) premium contributions of employees of the SATII of which he was president. CA RULING: AFFIRMED the RTC decision ISSUE: Is Mendoza guilty of violation of RA 8282 (SSS Law)? SC RULING: YES. Section 28(f) of the Act reads: (f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable for the penalties provided in this Act for the offense. The provision of the law being clear and unambiguous, petitioner’s interpretation that a "proprietor," as he was designated in the Information, is not among those specifically mentioned under Sec. 28(f) as liable, does not lie. For the word connotes management, control and power over a business entity. No need to resort to statutory construction for Section 28(f) of the Social Security Law imposes penalty on: (1) the managing head; (2) directors; or (3) partners, for offenses committed by a juridical person. The term "managing head" in Section 28(f) is used, in its broadest connotation, not to any specific organizational or managerial nomenclature. To heed petitioner’s reasoning would allow unscrupulous businessmen to conveniently escape liability by the creative adoption of managerial titles.
60 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 40. YOLANDA SIGNEY vs. SOCIAL SECURITY SYSTEM, EDITHA ESPINOSA-CASTILLO, and GINA SERVANO, representative of GINALYN and RODELYN SIGNEY G.R. No. 173582 January 28, 2008 TINGA, J. QUALIFIED DEPENDENTS UNDER SSS LAW DOCTRINE: The dependent shall be the following: (1) The legal spouse entitled by law to receive support from the member; (2) The legitimate, legitimated, or legally adopted, and illegitimate child who is unmarried, not gainfully employed and has not reached twenty-one years (21) of age, or if over twenty-one (21) years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally; and (3) The parent who is receiving regular support from the member. FACTS: Rodolfo Signey, Sr., a member of the SSS, died on 21 May 2001. In his member’s records, he had designated Yolanda Signey (petitioner) as primary beneficiary and his four children with her as secondary beneficiaries. On 6 July 2001, petitioner filed a claim for death benefits with the public respondent SSS. She revealed in her SSS claim that the deceased had a common-law wife, Gina Servano (Gina), with whom he had two minor children namey, Ginalyn Servano (Ginalyn), born on 13 April 1996, and Rodelyn Signey (Rodelyn), born on 20 April 2000. Petitioner’s declaration was confirmed when Gina herself filed a claim for the same death benefits on 13 July 2001 in which she also declared that both she and petitioner were common-law wives of the deceased and that Editha Espinosa (Editha) was the legal wife. In addition, in October 2001, Editha also filed an application for death benefits with the SSS stating that she was the legal wife of the deceased. The SSS denied the death benefit claim of petitioner. Thereafter, petitioner filed a petition with the SSC in which she attached a waiver of rights executed by Editha. SSC RULING: DENIED the claim of petitioner Yolanda. The SSC gave more weight to the SSS field investigation and the confirmed certification of marriage showing that the deceased was married to Editha on 29 October 1967, than to the aforestated declarations of Editha in her waiver of rights. CA RULING: AFFIRMED the SSC decision. ISSUE: Who is entitled to the social security benefits of a Social Security System (SSS) member who was survived not only by his legal wife, but also by two common-law wives with whom he had six children? SC RULING: Ginalyn and Rodelyn, the minor children of the deceased with Gina. The records disclosed that the deceased had one legitimate child, Ma. Evelyn Signey, who predeceased him, and several illegitimate children with petitioner and with Gina. Based on their respective certificates of live birth, the deceased SSS member’s four illegitimate children with petitioner could no longer be considered dependents at the time of his death because all of them were over 21 years old when he died on 21 May 2001, the youngest having been born on 31 March 1978. On the other hand, the deceased SSS member’s illegitimate children with Gina were qualified to be his primary beneficiaries for they were still minors at the time of his death, Ginalyn having been born on 13 April 1996, and Rodelyn on 20 April 2000. Section 8(e) and (k) of R.A. No. 8282 provides: SEC. 8. Terms Defined.—For the purposes of this Act, the following terms shall, unless the context indicates otherwise, have the following meanings: 61 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS xxx (e) Dependents — The dependent shall be the following: (1) The legal spouse entitled by law to receive support from the member; 2) The legitimate, legitimated, or legally adopted, and illegitimate child who is unmarried, not gainfully employed and has not reached twenty-one years (21) of age, or if over twenty-one (21) years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of selfsupport, physically or mentally; and 3) The parent who is receiving regular support from the member. xxx (k) Beneficiaries — The dependent spouse until he or she remarries, the dependent legitimate, legitimated or legally adopted, and illegitimate children, who shall be the primary beneficiaries of the member: Provided, That the dependent illegitimate children shall be entitled to fifty percent (50%) of the share of the legitimate, legitimated or legally adopted children: Provided, further, That in the absence of the dependent legitimate, legitimated or legally adopted children of the member, his/her dependent illegitimate children shall be entitled to one hundred percent (100%) of the benefits. In their absence, the dependent parents who shall be the secondary beneficiaries of the member. In the absence of all of the foregoing, any other person designated by the member as his/her secondary beneficiary. Whoever claims entitlement to the benefits provided by law should establish his or her right thereto by substantial evidence. Since petitioner is disqualified to be a beneficiary and because the deceased has no legitimate child, it follows that the dependent illegitimate minor children of the deceased shall be entitled to the death benefits as primary beneficiaries. The SSS Law is clear that for a minor child to qualify as a "dependent," the only requirements are that he/she must be below 21 years of age, not married nor gainfully employed. In this case, the minor illegitimate children Ginalyn and Rodelyn were born on 13 April 1996 and 20 April 2000, respectively. Had the legitimate child of the deceased and Editha survived and qualified as a dependent under the SSS Law, Ginalyn and Rodelyn would have been entitled to a share equivalent to only 50% of the share of the said legitimate child. Since the legitimate child of the deceased predeceased him, Ginalyn and Rodelyn, as the only qualified primary beneficiaries of the deceased, are entitled to 100% of the benefits.
62 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 41. SSS v. TERESITA JARQUE VDA DE BAILON G.R. No. 165545 March 24, 2006 CARPIO MORALES, J.: DOCTRINE: SSS and/or SSC has no jurisdiction to declare a marriage null and void. FACTS: 1955, Clemente Bailon (Bailon) and Alice Diaz (Alice) contracted marriage in Barcelona, Sorsogon. After 15 year Alice Diaz was declared presumptively dead. 13 years after his wife Alice was declared presumptively dead, Bailon contracted marriage with Teresita Jarque (respondent). After the death of Bailon, Jarque filed a claim for funeral benefits, and was granted P12,000 by the SSS. However, after coming to knowledge of the claim, Alice reappeared contesting the release of funeral benefits and pension to Jarque asking that the benefits be granter to her as the lawful wife. SSS RULING: SSS advised respondent of the cancellation of her monthly pension for death benefits and requested respondent to return the monthly pension she had received from the SSS because her marriage with Bailon was void as it was contracted while the latter’s marriage with Alice was still subsisting. Jarque then elevated the decision to the SSC (Commission). SSC RULING: By Resolution, the SSC found that the marriage of respondent to Bailon was void and, therefore, she was "just a common-law-wife” affirmed the decision of SSS. CA RULING: Decision reversing that of SSC According to the CA, SSS/SSC has no jurisdiction to declare the second marriage null and void on the basis alone of its own investigation and declare that the decision of the RTC declaring one to be presumptively dead is without basis. Respondent SSS cannot arrogate upon itself the authority to review the decision of the regular courts under the pretext of determining the actual and lawful beneficiaries of its members. ISSUE: Can the SSS and Commission validly declare the first marriage subsisting and the second marriage null and void? SC RULING: No. Although SSC is empowered to settle any dispute with respect to SSS coverage, benefits and contributions, in so exercising such power, however, it cannot review, much less reverse, decisions rendered by courts of law as it did in the case at bar when it declared that the CFI Order was obtained through fraud and subsequently disregarded the same, making its own findings with respect to the validity of Bailon and Alice’s marriage on the one hand and the invalidity of Bailon and respondent’s marriage on the other. In interfering with and passing upon the CFI Order, the SSC virtually acted as an appellate court. The law does not give the SSC unfettered discretion to trifle with orders of regular courts in the exercise of its authority to determine the beneficiaries of the SSS.
63 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 42. GERSIP ASSOCIATION, INC., LETICIA ALMAZAN, ANGELA NARVAEZ, MARIA B. PINEDA, LETICIA DE MESA AND ALFREDO D. PINEDA, v. GOVERNMENT INSURANCE SERVICE SYSTEM G.R. No. 18982 October 16, 2013 VILLARAMA, J.: DOCTRINE: GRF creates a trust and not a co-ownership between the employees and GSIS. FACTS: GSIS Board of Trustees (GSIS Board) approved the proposed GSIS Provident Fund Plan (Plan) to provide supplementary benefits to GSIS employees upon their retirement, disability or separation from the service, and payment of definite amounts to their beneficiaries in the event of death. It likewise adopted the "Provident Fund Rules and Regulations" (PFRR). Under the Plan, employees who are members of the Provident Fund (Fund) contribute through salary deduction a sum equivalent to five percent (5%) of their monthly salary while GSIS’ monthly contribution is fixed at 45% of each member’s monthly salary. Out of the earnings realized by the Fund, twenty percent (20%) of the proportionate earnings of GSIS’ contributions is deducted and credited to a General Reserve Fund (GRF) and the remainder is credited to the accounts of the members in proportion to the amounts standing to their credit at the beginning of each quarter. Upon retirement, members are entitled to withdraw the entire amount of their contributions and proportionate share of the accumulated earnings thereon, and 100% of respondent’s contributions with its proportionate earnings. GERSIP Association, Inc. (GERSIP), composed of retired GSIS employees and officers, wrote the President and General Manager of respondent requesting the liquidation and partition of the General Reserve Fund (GRF). Petitioners initially filed a civil suit before the RTC but on motion of respondent said case was dismissed on the ground that it is the GSIS Board which has jurisdiction over the controversy. Petitioners filed a Petition with the GSIS Board alleging that they have not been paid their portion of the GRF upon their retirement, to which they are entitled as "co-owners" of the Fund. Contention of GERSIP (1) GSIS Provident Fund is an employee fringe benefit package incorporated in the (CBA), the members own not only their personal contributions to the Fund but also 100% of GSIS management contributions remitted in their names and for their benefit, plus all the earnings of both personal contributions and the earnings of the management contribution, 20% of which is allotted by respondent to the GRF. (2) Upon the remittance by GSIS of its contributions to the Fund, the same ceased to be part of management funds but becomes part of the equity of the members for whom they were remitted as a contractual obligation. (3) Members are entitled also to that part of earnings from respondent’s contributions which are remitted to the GRF, or at least the remaining balance thereof pertaining to the share of each member. (4) GSIS has no legal title to the funds and it has no basis to impose any condition on how to avail of the Fund benefits, or to refuse its accounting and audit. GSIS RULING: This was affirmed by CA. GSIS Board denied the petition for lack of merit. It held that the execution of the Trust Agreement between respondent and the Committee is a clear indication that the parties intended to establish an express trust, not a co-ownership, with respondent as Trustor, the Committee as Trustee of the Fund and the members as Beneficiaries. As to the GRF, the Board said that it answers only for the contingent claims and there is no requirement for the accounting and partition of GRF. ISSUE: What is the nature of the funds contributed and its accumulated earnings under the Plan?
64 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS SC RULING: A provident fund is a type of retirement plan where both the employer and employee make fixed contributions. Out of the accumulated fund and its earnings, employees receive benefits upon their retirement, separation from service or disability. The GSIS Provident Fund was established through Resolution No. 201 of the GSIS Board.1âwphi1 The GSIS Board likewise adopted a set of rules and regulations (PFRR) to govern the membership, fund contributions and investment, payment of benefits and the trustees. On July 23, 1981, a Trust Agreement was executed between respondent and the Committee. The latter was tasked to administer, manage and invest the Fund, out of which it shall pay the benefits due to members or their beneficiaries in accordance with the policies, rules and regulations approved by respondent. The Agreement likewise explicitly declares: SECTION 2. - The COMMITTEE OF TRUSTEES shall hold title and manage the FUND in trust for the exclusive benefit of the members and their beneficiaries as provided for in the PLAN. No part of the FUND shall be used for, or diverted to any purpose or purposes other than for the exclusive benefits of such members and their beneficiaries. (Emphasis supplied.) Respondent’s contention that it had thereby created an express trust was upheld by the GSIS Board and the CA. The appellate court further ruled that the rules on co-ownership do not apply and there is nothing in the PFRR that allows the distribution of the GRF in proportion to the members’ share therein. We sustain the rulings of the GSIS Board and CA. Trust is the legal relationship between one person having an equitable ownership in property and another person owning the legal title to such property, the equitable ownership of the former entitling him to the performance of certain duties and the exercise of certain powers by the latter. A trust fund refers to money or property set aside as a trust for the benefit of another and held by a trustee.Under the Civil Code, trusts are classified as either express or implied. An express trust is created by the intention of the trustor or of the parties, while an implied trust comes into being by operation of law. There is no doubt that respondent intended to establish a trust fund from the employees’ contributions (5% of monthly salary) and its own contributions (45% of each member’s monthly salary and all unremitted Employees Welfare contributions). We cannot accept petitioners’ submission that respondent could not impose terms and conditions on the availment of benefits from the Fund on the ground that members already own respondent’s contributions from the moment such was remitted to their account. Petitioners’ assertion that the Plan was a purely contractual obligation on the part of respondent is likewise mistaken. Republic Act No. 8291, otherwise known as "The Government Service Insurance System Act of 1997," mandated respondent to maintain a provident fund subject to rules and regulations it may adopt. Thus: SECTION 41. Powers and Functions of the GSIS. — The GSIS shall exercise the following powers and functions: xxxx (s) to maintain a provident fund , which consists of contributions made by both the GSIS and its officials and employees and their earnings, for the payment of benefits to such officials and employees or their heirs under such terms and conditions as it may prescribe; (Emphasis supplied.) In Development Bank of the Philippines v. Commission on Audit,this Court recognized DBP’s establishment of a trust fund to cover the retirement benefits of certain employees. We noted that as the trustor, DBP vested in the trustees legal title over the Fund as well as control over the investment of the money and assets of the Fund. The Trust Agreement therein also stated that the principal and income must be used to satisfy all of the liabilities to the beneficiary officials and employees under the Gratuity Plan. Here, petitioners as beneficiaries of the Fund contend that they became co-owners of the entire Fund including respondent’s contributions and its accumulated earnings. On this premise, they demand a proportionate share in the GRF which was deducted from the earnings on respondents’ contributions. Under the PFRR, however, the GRF is allocated for specific purposes and not intended for distribution to members. Section 8, Article IV thus provides: 65 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Section 8. Earnings. At the beginning of each quarter, the earnings realized by the Fund in the previous quarter just ended shall be credited to the accounts of the members in proportion to the amounts standing to their credit as of the beginning of the same quarter after deducting therefrom twenty per cent (20%) of the proportionate earnings of the System’s contributions, which deduction shall be credited to a General Reserve Fund. Whenever circumstances warrant, however, the Committee may reduce the percentage to be credited to the General Reserve Fund for any given quarter; provided that in no case shall such percentage be lower than five per cent (5%) of the proportionate earnings of the System’s contributions for the quarter. When and as long as the total amount in the General Reserve Fund is equivalent to at least ten per cent (10%) of the total assets of the Fund, the Committee may authorize all the earnings for any given quarter to be credited to the members. The General Reserve Fund shall be used for the following purposes: (a) To cover the deficiency, if any, between the amount standing to the credit of a member who dies or is separated from the service due to permanent and total disability, and the amount due him under Article V Section 4; (b) To make up for any investment losses and write-offs of bad debts, in accordance with policies to be promulgated by the Board; (c) To pay the benefits of separated employees in accordance with Article IV, Section 3; and (d) For other purposes as may be approved by the Board, provided that such purposes is consistent with Article IV, Section 4 It is clear that while respondent’s monthly contributions are credited to the account of each member, and the same were received by petitioners upon their retirement, they were entitled to only a proportionate share of the earnings thereon. The benefits of retiring members of the Fund are covered by Section 1(b), Article V which states: (b) Retirement. In the event the separation from the System is due to retirement under existing laws, such as P.D. 1146, R.A. 660 or R.A. 1616, irrespective of the length of membership to the Fund, the retiree shall be entitled to withdraw the entire amount of his contributions to the Fund, as well as the corresponding proportionate share of the accumulated earnings thereon, and in addition, 100% of the System’s contributions, plus the proportionate earnings thereon. We find nothing illegal or anomalous in the creation of the GRF to address certain contingencies and ensure the Fund’s continuing viability. Petitioners’ right to receive retirement benefits under the Plan was subject to welldefined rules and regulations that were made known to and accepted by them when they applied for membership in the Fund. Petitioners have the right to demand for an accounting of the Fund including the GRF. Under Section 5, Article VIII of the PFRR, the Committee is required to prepare an annual report showing the income and expenses and the financial condition of the Fund as of the end of each calendar year. Said report shall be submitted to the GSIS Board and shall be available to members. There is, however, no allegation or evidence that the Committee failed to comply with the submission of such annual report, or that such report was not made available to members.
66 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 43. GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner, v. FERNANDO P. DE LEON, G.R. No. 186560 November 17, 2010 NACHURA, J.: DOCTRINE: Disqualification from receiving retirement benefits under R.A. No. 910 does not mean that he is disqualified from receiving any retirement benefit under any other existing retirement law. FACTS: Respondent Fernando P. de Leon retired as Chief State Prosecutor of the Department of Justice (DOJ), after 44 years of service to the government. He applied for retirement under Republic Act (R.A.) No. 910, invoking R.A. No. 3783, as amended by R.A. No. 4140, which provides that chief state prosecutors hold the same rank as judges. The application was approved by GSIS and for more than 9 years, respondent continuously received his retirement benefits, until he failed to receive his monthly pension. De Leon learned that GSIS cancelled the payment of his pension because the Department of Budget and Management (DBM) informed GSIS that respondent was not qualified to retire under R.A. No. 910 since it only applies to justices and judges not to prosecutors. Thus, GSIS stopped the payment of respondent’s monthly pension. Because of the discontinuance of his pension, respondent sought to convert his retirement under R.A. No. 910 to one under another law administered by GSIS .He then wrote a letter to GSIS regarding the continuation of his pension. GSIS RULING: Discontinuance of the pension. De Leon already retired and received benefits and pension under Republic Act No. 910. However DBM already refused to release the funds for your pension benefit on the ground that Chief State Prosecutors are not covered by R.A. 910. Since De Leon retired and received benefits under the said law, he cannot seek to secure benefits under any other applicable GSIS law. There is nothing in the GSIS law which sanctions double retirement unless the retiree is first re-employed and qualifies once again to retire under GSIS law. In fact, Section 55 of Republic Act No. 8291 provides for exclusivity of benefits which means that a retiree may choose only one retirement scheme available to him to the exclusion of all others. CA RULING: The CA found that GSIS allowed respondent to retire under R.A. No. 910, following precedents which allowed non-judges to retire under the said law. The CA said that it was not respondent’s fault that he was allowed to avail of the benefits under R.A. No. 910; and that, even if his retirement under that law was erroneous, respondent was, nonetheless, entitled to a monthly pension under the GSIS Act. The CA held that this was not a case of double retirement, but merely a continuation of the payment of respondent’s pension benefit to which he was clearly entitled. Since the error in the award of retirement benefits under R.A. 910 was not attributable to respondent, it was incumbent upon GSIS to continue defraying his pension in accordance with the appropriate law which might apply to him. It was unjust for GSIS to entirely stop the payment of respondent’s monthly pension without providing any alternative sustenance to him. ISSUE: Whether or not the GSIS can stop defraying the pension without specifying other pension scheme. SC RULING: NO. (1) Retirement laws, in particular, are liberally construed in favor of the retiree because their objective is to provide for the retiree’s sustenance and, hopefully, even comfort, when he no longer has the capability to earn a livelihood. The liberal approach aims to achieve the humanitarian purposes of the law in order that efficiency, security, and well-being of government employees may be enhanced.Indeed, retirement laws are liberally construed and administered in favor of the persons intended to be benefited, and all doubts are resolved in favor of the retiree to achieve their humanitarian purpose. In this case, as adverted to above, respondent was able to establish that he has a clear legal right to the reinstatement of his retirement benefits. (2) In stopping the payment of respondent’s monthly pension, GSIS relied on the memorandum of the DBM and because respondent had been mistakenly allowed to receive retirement benefits under R.A. No. 910, GSIS erroneously concluded that respondent was not entitled to any retirement benefits at all, not even under any other extant retirement law. This is flawed logic. 67 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Respondent’s disqualification from receiving retirement benefits under R.A. No. 910 does not mean that he is disqualified from receiving any retirement benefit under any other existing retirement law. (3) To grant respondent these benefits does not equate to double retirement, as GSIS mistakenly claims. Since respondent has been declared ineligible to retire under R.A. No. 910, GSIS should simply apply the proper retirement law to respondent’s claim, in substitution of R.A. No. 910. In this way, GSIS would be faithful to its mandate to administer retirement laws in the spirit in which they have been enacted, i.e., to provide retirees the wherewithal to live a life of relative comfort and security after years of service to the government. Respondent will not receive --- and GSIS is under no obligation to give him --- more than what is due him under the proper retirement law. It must be emphasized that P.D. No. 1146 specifically mandates that a retiree is entitled to monthly pension for life. As this Court previously held: Considering the mandatory salary deductions from the government employee, the government pensions do not constitute mere gratuity but form part of compensation. In a pension plan where employee participation is mandatory, the prevailing view is that employees have contractual or vested rights in the pension where the pension is part of the terms of employment. The reason for providing retirement benefits is to compensate service to the government. Retirement benefits to government employees are part of emolument to encourage and retain qualified employees in the government service. Retirement benefits to government employees reward them for giving the best years of their lives in the service of their country. Thus, where the employee retires and meets the eligibility requirements, he acquires a vested right to benefits that is protected by the due process clause. Retirees enjoy a protected property interest whenever they acquire a right to immediate payment under pre-existing law. Thus, a pensioner acquires a vested right to benefits that have become due as provided under the terms of the public employees’ pension statute. No law can deprive such person of his pension rights without due process of law, that is, without notice and opportunity to be heard. It must also be underscored that GSIS itself allowed respondent to retire under R.A. No. 910, following jurisprudence laid down by this Court. One could hardly fault respondent, though a seasoned lawyer, for relying on petitioner’s interpretation of the pertinent retirement laws, considering that the latter is tasked to administer the government’s retirement system. He had the right to assume that GSIS personnel knew what they were doing. Since the change in circumstances was through no fault of respondent, he cannot be prejudiced by the same. His right to receive monthly pension from the government cannot be jeopardized by a new interpretation of the law. (4) GSIS’ argument that respondent has already been enormously benefited under R.A. No. 910 misses the point. Retirement benefits are a form of reward for an employee’s loyalty and service to the employer, and are intended to help the employee enjoy the remaining years of his life, lessening the burden of having to worry about his financial support or upkeep. A pension partakes of the nature of "retained wages" of the retiree for a dual purpose: to entice competent people to enter the government service; and to permit them to retire from the service with relative security, not only for those who have retained their vigor, but more so for those who have been incapacitated by illness or accident. Surely, giving respondent what is due him under the law is not unjust enrichment. (5) As to GSIS’ contention that what respondent seeks is conversion of his retirement mode, which is prohibited under R.A. No. 8291, the Court agrees with the CA that this is not a case of conversion within the contemplation of the law. The conversion under the law is one that is voluntary, a choice to be made by the retiree. Here, respondent had no choice but to look for another law under which to claim his pension benefits because the DBM had decided not to release the funds needed to continue payment of his monthly pension. 68 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Respondent himself admitted that, if the DBM had not suspended the payment of his pension, he would not have sought any other law under which to receive his benefits. The necessity to "convert" was not a voluntary choice of respondent but a circumstance forced upon him by the government itself. (6) Finally, GSIS would like this Court to believe that because it has returned respondent’s premium contributions, it is now legally impossible for it to comply with the CA’s directive. Given the fact that respondent is ineligible to retire under R.A. No. 910, the refund by GSIS of respondent’s premium payments was erroneous. Hence, GSIS can demand the return of the erroneous payment or it may opt to deduct the amount earlier received by respondent from the benefits which he will receive in the future. Considering its expertise on the matter, GSIS can device a scheme that will facilitate either the reimbursement or the deduction in the most cost-efficient and beneficial manner. The foregoing disquisition draws even greater force from subsequent developments. While this case was pending, the Congress enacted Republic Act No. 10071, the Prosecution Service Act of 2010. By virtue of this express provision, respondent is covered by R.A. No. 10071. In addition, he is now entitled to avail of the benefits provided by Section 23, that "all pension benefits of retired prosecutors of the National Prosecution Service shall be automatically increased whenever there is an increase in the salary and allowance of the same position from which he retired." Respondent, as former Chief State Prosecutor, albeit the position has been renamed "Prosecutor General," should enjoy the same retirement benefits as the Presiding Justice of the CA, pursuant to Section 14 of R.A. No. 10071, to wit: Section 14. Qualifications, Rank and Appointment of the Prosecutor General. - The Prosecutor General shall have the same qualifications for appointment, rank, category, prerogatives, salary grade and salaries, allowances, emoluments, and other privileges, shall be subject to the same inhibitions and disqualifications, and shall enjoy the same retirement and other benefits as those of the Presiding Justice of the Court of Appeals and shall be appointed by the President.34 Furthermore, respondent should also benefit from the application of Section 16 of the law, which states: Section 16. Qualifications, Ranks, and Appointments of Prosecutors, and other Prosecution Officers. – x x x. Any increase after the approval of this Act in the salaries, allowances or retirement benefits or any upgrading of the grades or levels thereof of any or all of the Justices or Judges referred to herein to whom said emoluments are assimilated shall apply to the corresponding prosecutors. Lastly, and most importantly, by explicit fiat of R.A. No. 10071, members of the National Prosecution Service have been granted the retirement benefits under R.A. No. 910, to wit: Section 25. Applicability. - All benefits heretofore extended under Republic Act No. 910, as amended, and all other benefits that may be extended by the way of amendment thereto shall likewise be given to the prosecutors covered by this Act. Hence, from the time of the effectivity of R.A. No. 10071, respondent should be entitled to receive retirement benefits granted under R.A. No. 910. Consequently, GSIS should compute respondent’s retirement benefits from the time the same were withheld until April 7, 2010 in accordance with P.D. No. 1146; and his retirement benefits from April 8, 2010 onwards in accordance with R.A. No. 910. A final note. The Court is dismayed at the cavalier manner in which GSIS handled respondent’s claims, keeping respondent in the dark as to the real status of his retirement benefits for so long. That the agency tasked with administering the benefits of retired government employees could so unreasonably treat one of its beneficiaries, one who faithfully served our people for over 40 years, is appalling. It is well to remind GSIS of its mandate to promote the efficiency and welfare of the employees of our government, and to perform its tasks not only with competence and proficiency but with genuine compassion and concern. 69 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 44. GOVERNMENT SERVICE INSURANCE SYSTEM v. MARILOU ALCARAZ G.R. No. 187474 February 06, 2013 BRION, J.: DOCTRINE: It is not necessary that the disease causing the death of the employee be directly connected to the work. Substantial evidence that the development of the disease is brought largely by the conditions present in the nature of the job is sufficient. FACTS: Bernardo was employed for almost twenty-nine (29) years by the (MMDA) in Makati City. He worked at the MMDA as labourer. Bernardo was diagnosed with Pulmonary Tuberculosis (PTB) and Community Acquired Pneumonia (CAP). He was discharged on May 19, 2004 with the following diagnosis: Acute Diffuse Anterolateral Wall Myocardial Infarction. A year Bernardo was found dead at the basement of the MMDA building. His body was brought to the Southern Police District Crime Laboratory in Makati City for an autopsy. Medico-Legal Officer Ma. Cristina B. Freyra performed the autopsy and concluded that Bernardo died of Myocardial Infarction, old and recent.Bernardo’s widow, Marilou, subsequently filed a claim for death benefits with the GSIS. GSIS RULING: The GSIS denied the claim for death benefits on the ground that myocardial infarction, the cause of Bernardo’s death, was directly related to diabetes which is not considered a work-connected illness; hence, its complications, such as myocardial infarction, are not work-related. This decision of GSIS was affirmed by ECC. The GSIS insists that myocardial infarction which caused Bernardo’s death cannot be said to have been aggravated by the nature of his duties. It stresses that on the contrary, there was no evidence showing that it was the performance of his duties that caused the development of myocardial infarction as it was a mere complication of diabetes mellitus, a non-occupational disease. His heart ailment, therefore, cannot be considered an occupational disease. CA RULING: The CA granted the petition and set aside the ECC ruling. It pointed out that, as this Court held in Salmone v. Employees’ Compensation Commission, "[t]he claimant must show, at least, by substantial evidence that the development of the disease is brought largely by the conditions present in the nature of the job." The CA found sufficient proof of work-connection between Bernardo’s ailment and his working conditions. It believed that his work as laborer and metro aide must have substantially contributed to his illness. The CA ordered the GSIS to pay Bernardo’s heirs the proper benefits for his death consistent with the State policy to extend the applicability of the employees compensation law, Presidential Decree No. 626, to a greater number of employees who can avail of the benefits under the law, in consonance with the avowed policy of the State to give maximum aid and protection to labor. ISSUE: Whether or not the indirect relation of the cause of death of Bernardo to his work negates the award of benefits to his dependents. SC RULING: No. Diabetes mellitus not the sole predisposing factor to myocardial infarction Bernardo died after almost three decades of service with the MMDA (July 1, 1976 to January 15, 2005). His death occurred within his employer’s premises, at the basement of the MMDA building while he was at work. The GSIS and the ECC denied the claim of his widow for death benefits on the ground that his death was due to myocardial infarction which they declared to be non-compensable; they opined that it is not work-related as it is simply a complication of diabetes mellitus. They pointed out that diabetes mellitus is not in the list of occupational diseases and, for this reason, its complications such as myocardial infarction, are not work-related. We disagree with the GSIS’s position. The conclusions of the two agencies totally disregarded the stressful and strenuous conditions under which Bernardo toiled for almost 29 long years as a laborer and as a metro aide. By so doing, they closed the door to other influences that caused or contributed to Bernardo’s fatal heart problem – an ailment aggravated with the passage of time by the risks present in the difficult working conditions that Bernardo had to bear from day to day in his employment. The CA vividly captured Bernardo’s hazardous working environment (the streets of Makati City) and its effects on his health when it stated: 70 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Petitioner contends that the ECC erred in ruling that petitioner is not entitled to claim benefits for her husband’s death. She pointed out that as early as May 3, 2004, the deceased was already complaining of shortness of breath and dizziness; that despite such condition, he still continued performing his work until he was confined at the Ospital ng Makati from May l3 to 19, 2004 where he was diagnosed with Acute Diffuse Anterlateral Wall Myocardial Infarction; that the short intervening period between his confinement at the hospital and his last day of duty with the MMDA on January 14, 2005, indicate that he had been suffering from such disease at the time that he was employed; that his [everyday] exposure under the sweltering heat of the sun during summer and his constant exposure to rain during the rainy season, aggravated by his contact to smoke emitted by vehicles passing as he cleaned the streets of Makati, are enough proofs of the strenuous nature of his work; that his everyday exposure to these elements not only resulted to his developing myorcardial infarction, but also aggravated pre-existing illness which were pulmonary tuberculosis and community acquired pneumonia.
While diabetes mellitus was indeed a complicating factor in Bernardo’s health condition and indisputably aggravated his heart problem, we cannot discount other employment factors, mental and physical, that had been indisputably present; they contributed, if not as a direct cause of the heart condition itself, as aggravation that worsened and hastened his fatal myocardial infarction. For instance, it is undisputed that Bernardo was earlier diagnosed with CAP which could also be a predisposing factor to myocardial infarction.There is also stress due to the nature of Bernardo’s work. As Marilou pointed out, this Court recognized that stress could influence the onset of myocardial infarction.1âwphi1 The Court declared inGoverment Service Insurance System (GSIS) v. Cuanang:"Myocardial infarction, also known as coronary occlusion or just a ‘coronary,’ is a life threatening condition. Predisposing factors for myocardial infarction are the same for all forms of Coronary Artery Disease, and these factors include stress. Stress appears to be associated with elevated blood pressure." The CA, therefore, is correct in holding that there is substantial evidence supporting the conclusion that myocardial infarction in Bernardo’s case is work-related. Cardio-vascular disease compensable The CA’s conclusion is bolstered by the fact that the ECC itself, the government agency tasked by law to implement the employees compensation program (together with the GSIS in the public sector and the Social Security System [SSS] in the private sector), included cardio-vascular diseases in the list of occupational diseases, making them compensable, subject to any of the conditions stated in its enabling Resolution No. 432.With the resolution, it should be obvious that by itself, a heart disease, such as myocardial infarction, can be considered work-related, with or without the complicating factors of other nonoccupational illnesses. Thus, the Court so ruled in Rañises v. ECC,20 where it emphasized that the incidence of acute myocardial infarction, whether or not associated with a non-listed ailment, is enough basis for compensation.
Resolution No. 432 provides (as one of the conditions) that a heart disease is compensable if it was known to have been present during employment, there must be proof that an acute exacerbation was clearly precipitated by the unusual strain by reason of the nature of his work. Based on the evidence on record, we find as the CA did, that the nature of Bernardo’s duties and the conditions under which he worked were such as to eventually cause the onset of his myocardial infarction. The stresses, the strain, and the exposure to street pollution and to the elements that Bernardo had to bear for almost 29 years are all too real to be ignored. They cannot but lead to a deterioration of health particularly with the contributing factors of diabetes and pulmonary disease. Bernardo had in fact been a walking time bomb ready to explode towards the end of his employment days. Records show that the debilitating effect of Bernardo’s working conditions on his health manifested itself several months before his death. As early as May 3, 2004, Bernardo was already complaining of shortness of breath and dizziness. From May 13 to 19, 2004, he had to be confined at the Ospital ng Makati and was diagnosed with acute myocardial infarction which caused his death on January 15, 2005 while he was at work. To be sure, a reasonable mind analyzing these facts cannot but arrive at the conclusion that the risks present in his work environment for the entire duration of his employment precipitated the acute myocardial infarction that led to his death. We thus find no merit in the petition. The CA committed no reversible error nor any grave abuse of discretion in awarding death benefits to Bernardo’s heirs. As a final point, we take this occasion to reiterate that as an agency charged by law with the implementation of social justice guaranteed and secured by the Constitution – the ECC (as well as the GSIS and the SSS) – should adopt a liberal attitude in favor of the employees in deciding claims for compensability, especially where there is some basis in the facts for inferring a work-connection to the accident or to the illness.21 This is what the Constitution dictates. 71 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 45. CITIBANK, N. A. v. CA (Third Division), AND CITIBANK INTEGRATED GUARDS LABOR ALLIANCE (CIGLA) SEGATUPAS/FSM LOCAL CHAPTER No. 1394 G.R. No. 108961 November 27, 1998 PARDO, J.: DOCTRINE: Non-renewal of Security Guard Service agreement is a civil dispute and not a labor dispute. FACTS: Citibank and El Toro Security Agency, Inc. (hereafter El Toro) entered into a contract for the latter to provide security and protective services. In 1990, the contract between Citibank and El Toro expired. Integrated Guards Labor Alliance-SEGA-TUPAS/FSM (hereafter CIGLA) filed with the National Conciliation and Mediation Board (NCMB) a request for preventive mediation citing Citibank as respondent therein giving as issues for preventive mediation the following: (1) Unfair labor practice (2) Dismissal of union officers/members; and (3) Union busting. Three days after, Citibank served on El Toro a written notice that the bank would not renew anymore the service agreement with the latter. Simultaneously, Citibank hired another security agency, the Golden Pyramid Security Agency, to render security services at Citibank's premises. Hence, CIGLA filed a manifestation with the NCMB that it was converting its request for preventive mediation into a notice of strike for failure of the parties to reach a mutually acceptable settlement of the issues, which it followed with a supplemental notice of strike alleging as supplemental issue the mass dismissal of all union officers and members. The following day the guards of El Toro were replaced by guards of the Golden Pyramid Security Agency. They threatened to go on strike against Citibank and picket its premises. CIGLA filed a notice of strike directed at the premises of the Citibank main office. Citibank filed with the Regional Trial Court, Makati, a complaint for injunction and damages to which respondent CIGLA filed with the trial court a motion to dismiss the complaint. The motion alleged that the Court had no jurisdiction, this being labor dispute. RTC RULING: The trial court denied respondent CIGLA's motion to dismiss because plaintiff's complaint there are allegations, which negate any employer-employee relationship between it and the CIGLA members. Respondent CIGLA filed with the Court of Appeals a petition for certiorari with preliminary injunction assailing the validity of the proceedings had before the regional trial court. CA RULING: It declared the proceedings before the RTC null and void. ISSUE: (1) The basic issue involved is whether it is the labor tribunal or the regional trial court that has jurisdiction over the subject matter of the complaint filed by Citibank with the trial court. (2) Is there a labor dispute between Citibank and the security guards, members of respondent CIGLA, regardless of whether they stand in the relation of employer and employees? SC RULING: (1) Yes. The Court sustained the petitioner's contention. This Court has held in many cases that "in determining the existence of an employer-employee relationship, the following elements are generally considered: 1) the selection and engagement of the employee; 2) the payment of wages; 3) the power of dismissal; and 4) the emp loyer's power to control the employee with respect to the means and methods by which the work is to be accomplished". 6 It has been decided also that the Labor Arbiter has no jurisdiction over a claim filed where no employer-employee relationship existed between a company and the security guards assigned to it by a security service contractor. 7 In this case, it was the security agency El Toro that recruited, hired and assigned the watchmen to their place of work. It was the security agency that was answerable to Citibank for the conduct of its guards. 2. No. It is a civil dispute. 72 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Article 212, paragraph l of the Labor Code provides the definition of a "labor dispute". It "includes any controversy or matter concerning terms or conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee." If at all, the dispute between Citibank and El Toro security agency is one regarding the termination or non-renewal of the contract of services. This is a civil dispute8. El Toro was an independent contractor. Thus, no employeremployee relationship existed between Citibank and the security guard members of the union in the security agency who were assigned to secure the bank's premises and property. Hence, there was no labor dispute and no right to strike against the bank. It is a basic rule of procedure that "jurisdiction of the court over the subject matter of the action is determined by the allegations of the complaint, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. The jurisdiction of the court can not be made to depend upon the defenses set up in the answer or upon the motion to dismiss, for otherwise, the question of jurisdiction would almost entirely depend upon the defendant."9 "What determines the jurisdiction of the court is the nature of the action pleaded as appearing from the allegations in the complaint. The averments therein and the character of the relief sought are the ones to be consulted." In the complaint filed with the trial court, petitioner alleged that in 1983, it entered into a contract with El Toro, a security agency, for security and protection service. The parties renewed the contract yearly until April 22, 1990. Petitioner further alleged that from June 11, 1990, until the filing of the complaint, El Toro security guards formerly assigned to guard Citibank premises loitered around the bank's premises in large groups and threatened to stage a strike, which would hamper its operations and the normal conduct of its business and that the bank would suffer damages should a strike push through. On the basis of the allegations of the complaint, it is safe to conclude that the dispute involved is a civil one, not a labor dispute. Consequently, we rule that jurisdiction over the subject matter of the complaint lies with the regional trial court.
73 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 46. PHILIPPINE AIRLINES, INC. vs. NATIONAL LABOR RELATIONS COMMISSION, FERDINAND PINEDA and GODOFREDO CABLING G.R. No. 120567 20 March 1998 Martinez, J.: DEFINITION OF A LABOR DISPUTE DOCTRINE: The power of the NLRC to issue an injunctive writ originates from "any labor dispute.” The term "labor dispute" is defined as "any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing, or arranging the terms and conditions of employment regardless of whether or not the disputants stand in the proximate relation of employers and employees. There is no labor dispute when there has yet been no complaint for illegal dismissal filed with the labor arbiter. FACTS: Ferdinand Pineda and Godofredo Cabling, flight stewards of PAL, were dismissed by the latter from the service for their alleged involvement in the currency smuggling in Hong Kong. Aggrieved by said dismissal, they went directly to the NLRC and filed a petition for injunction with the object of making PAL withhold its orders of dismissal and reinstate them to work. The NLRC granted their petition. Displeased, PAL challenged the NLRC through a motion for reconsideration questioning its jurisdiction to issue an injunction or restraining order since this may be issued only under Article 218 of the Labor Code if the case involves or arises from labor disputes. NLRC RULING: It denied PAL’s motion for reconsideration and upheld its jurisdiction to issue the mandatory injunctive writ ordering PAL to withhold the enforcement of the orders of dismissal and reinstate Pineda and Cabling. ISSUE: Can the NLRC, even without a complaint for illegal dismissal filed before the labor arbiter, entertain an action for injunction and issue such writ? SC RULING: NO. Generally, injunction is not a cause of action in itself but merely a provisional remedy, an adjunct to a main suit. Relative to this, the power of the NLRC to issue an injunctive writ originates from "any labor dispute.” The term "labor dispute" is defined as "any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing, or arranging the terms and conditions of employment regardless of whether or not the disputants stand in the proximate relation of employers and employees." The term "controversy" is likewise defined as "a litigated question; adversary proceeding in a court of law; a civil action or suit, either at law or in equity; a justiciable dispute." A "justiciable controversy" is "one involving an active antagonistic assertion of a legal right on one side and a denial thereof on the other concerning a real, and not a mere theoretical question or issue." From the foregoing definitions, it is therefore an essential requirement that there must first be a labor dispute between the contending parties before the labor arbiter. In the present case, there is no labor dispute between PAL and respondents Pineda and Cabling as there has yet been no complaint for illegal dismissal filed with the labor arbiter by them against the PAL. The petition for injunction directly filed before the NLRC is in reality an action for illegal dismissal. This is clear from the allegations in the petition which prays for their reinstatement; award of full backwages, moral and exemplary damages; and attorney's fees. As such, the petition should have been filed with the labor arbiter who has the original and exclusive jurisdiction to hear and decide the following cases involving all workers, whether agricultural or non agricultural. 74 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 47. CHARLITO PEÑARANDA v. BAGANGA PLYWOOD CORPORATION and HUDSON CHUA G.R. No. 159577 3 May 2006 Panganiban, C.J.: MEMBERS OF THE MANAGERIAL STAFF DOCTRINE: Members of the managerial staff are those who customarily and regularly exercise discretion and independent judgment. Members of the managerial staff are exempted from the provisions of the Labor Code on labor standards. FACTS: Charlito Peñaranda was hired as an employee of Baganga Plywood Corporation (BPC) to take charge of the operations and maintenance of its steam plant boiler. Subsequently, Peñaranda filed a Complaint for illegal dismissal with money claims against BPC and its general manager, Hudson Chua, before the NLRC. Peñaranda claims, among others, that he was not a managerial employee, and therefore, entitled to the award granted by the labor arbiter. LA RULING: There was no illegal dismissal and that petitioner’s Complaint was premature because he was still employed by BPC. The temporary closure of BPC’s plant did not terminate his employment; hence, he need not reapply when the plant reopened. Nevertheless, the labor arbiter found Peñaranda entitled to overtime pay, premium pay for working on rest days NLRC RULING: Deleted the award of overtime pay and premium pay for working on rest days. According to the Commission, petitioner was not entitled to these awards because he was a managerial employee. CA RULING: Denied Peñaranda’s petition on purely procedural grounds, which prompted him to seek recourse with the SC. ISSUE: Is Peñaranda a managerial employee? SC RULING: NO. He was a member of the managerial staff. The Implementing Rules of the Labor Code define members of a managerial staff as those who customarily and regularly exercise discretion and independent judgment. As borne out by the facts, Peñaranda supervised the engineering section of the steam plant boiler. His work involved overseeing the operation of the machines and the performance of the workers in the engineering section. This work necessarily required the use of discretion and independent judgment to ensure the proper functioning of the steam plant boiler. As supervisor, he is deemed a member of the managerial staff. Members of the managerial staff are exempted from the provisions of the Labor Code on labor standards. Since Peñaranda belongs to this class of employees, he is not entitled to overtime pay and premium pay for working on rest days.
75 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 48. SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER), ZACARRIAS JERRY VICTORIO-Union President v. CHARTER CHEMICAL and COATING CORPORATION G.R. No. 169717 16 March 2011 Del Castillo, J.: MANAGERIAL EMPLOYEES DOCTRINE: After a labor organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article 239 of the Labor Code. FACTS: Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for Empowerment and Reforms (petitioner union) filed a petition for certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation (respondent company) with the Mediation Arbitration Unit of the DOLE, National Capital Region. Respondent company filed an Answer with Motion to Dismiss on the ground that petitioner union is not a legitimate labor organization because of (1) failure to comply with the documentation requirements set by law, and (2) the inclusion of supervisory employees within petitioner union. MED-ARBITER RULING: Sided with the company. DOLE RULING: Granted the union’s petition for a certification election. CA RULING: Reversed the DOLE and upheld the Med-Arbiter’s Ruling. ISSUE: Does the commingling of supervisory and rank-and-file employees in a union divest it of its personality as a legitimate labor organization? SC RULING: NO. After a labor organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article 239 of the Labor Code. Applying this principle to the case at bar, petitioner union was not divested of its status as a legitimate labor organization even if some of its members were supervisory employees. It had the right to file the subject petition for certification election. Besides, the legal personality of the union cannot be collaterally attacked by the company in the certification election proceedings the latter being – in the eyes of the law – a mere bystander in such proceedings.
76 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 49. PAMELA FLORENTINA JUMUAD, Petitioner v. HI-FLYER FOOD, INC. and/or JESUS R. MONTEMAYOR G.R. No. 187877 September 2011 Mendoza, J.: MANAGERIAL EMPLOYEES DOCTRINE: As long as there is some basis for loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence demanded of his position, a managerial employee may be dismissed. FACTS: Pamela Florentina Jumuad was employed as Area Manager in Visayas by Hi-Flyer, Inc., the company managing Kentucky Fried Chicken stores throughout the country. Later on, the company discovered lapses on the part of Jumuad in doing her job. Jumuad was given the opportunity to explain the reason these. Nonetheless, the company still terminated her employment on the ground of neglect of duty and breach of trust and confidence. This prompted Jumuad to file a complaint against Hi-Flyer for illegal dismissal. LA RULING: After finding that no serious cause for termination existed, the LA ruled that Jumuad was illegally dismissed. NLRC RULING: Affirmed the LA CA RULING: Reversed the NLRC. CA was of the opinion that the requirements of substantive and procedural due process were complied with affording Jumuad an opportunity to be heard first, when she submitted her written explanation and then, when she was informed of the decision and the basis of her termination. ISSUE: Was Jumuad Illegally dismissed? SC RULING: NO. As long as there is some basis for loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence demanded of his position, a managerial employee may be dismissed. Here, there is ample evidence that Jumuad indeed committed acts justifying loss of trust and confidence of HiFlyer, which resulted to her dismissal from service. Her mismanagement and negligence in supervising the effective operation of KFC branches in the span of less than a year, resulting in the closure of KFC-Gaisano due to deplorable sanitary conditions, cash shortages in KFC-Bohol, in which the said branch, at the time of discovery, was only several months into operation, and the poor sanitation at KFC-Cocomall. The glaring fact that three (3) out of the seven (7) branches under her area were neglected cannot be glossed over by her explanation that there was no negligence on her part as the sanitation problem was structural, that she had been usually busy conducting management team meetings in several branches of KFC in her area or that she had no participation whatsoever in the alleged cash shortages. As the employer, Hi-Flyer has the right to regulate, according to its discretion and best judgment, all aspects of employment, including work assignment, working methods, processes to be followed, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers.
77 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 50. PEOPLES BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.) v. THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN G.R. No. 179652 6 March 2012 Velasco, Jr., J.: JURISDICTION OF THE LABOR ARBITER DOCTRINE: If a complaint is brought before the DOLE to give effect to the labor standards provisions of the Labor Code or other labor legislation, and there is a finding by the DOLE that there is an existing employer-employee relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC. If the DOLE finds that there is no employeremployee relationship, the jurisdiction is properly with the NLRC. If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and conditions of employment, if accompanied by a claim for reinstatement. If a complaint is filed with the NLRC, and there is still an existing employer-employee relationship, the jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be questioned through a petition for certiorari under Rule 65 of the Rules of Court. FACTS: Jandeleon Juezan filed a complaint against petitioner with the Department of Labor and Employment (DOLE), for illegal deduction, nonpayment of service incentive leave, 13th month pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed payment of wages and noncoverage of SSS, PAG-IBIG and Philhealth. The DOLE Regional Director found that private respondent was an employee of petitioner, and was entitled to his money claims. When the matter was brought before the CA it was held that PBS was accorded due process as it had been given the opportunity to be heard, and that the DOLE Secretary had jurisdiction over the matter, as the jurisdictional limitation imposed by Article 129 of the Labor Code on the power of the DOLE Secretary under Art. 128(b) of the Code had been repealed by Republic Act No. (RA) 7730. However, the SC found that there was no employer-employee relationship between PBS and and private respo. It was held that while the DOLE may make a determination of the existence of an employer-employee relationship, this function could not be co-extensive with the visitorial and enforcement power provided in Art. 128(b) of the Labor Code, as amended by RA 7730. The National Labor Relations Commission (NLRC) was held to be the primary agency in determining the existence of an employer-employee relationship. This was the interpretation of the Court of the clause in cases where the relationship of employer-employee still exists in Art. 128(b). From this Decision, the Public Attorneys Office (PAO) filed a Motion for Clarification of Decision. The PAO sought to clarify as to when the visitorial and enforcement power of the DOLE be not considered as co-extensive with the power to determine the existence of an employer-employee relationship. The DOLE also sought the same clarification. ISSUE: Is the NLRC the sole body with jurisdiction to determine the existence of an employer-employee relationship? SC RULING: NO. No procedure was laid down where the DOLE would only make a preliminary finding, that the power was primarily held by the NLRC. The law did not say that the DOLE would first seek the NLRCs determination of the existence of an employer-employee relationship, or that should the existence of the employer-employee relationship be disputed, the DOLE would refer the matter to the NLRC. The DOLE must have the power to determine whether or not an employer-employee relationship exists, and from there to decide whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor Code, as amended by RA 7730. The determination of the existence of an employer-employee relationship by the DOLE must be respected. The expanded visitorial and enforcement power of the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could, by the simple expedient of disputing the employer-employee relationship, force the referral of the matter to the NLRC. 78 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS If the DOLE makes a finding that there is an existing employer-employee relationship, it takes cognizance of the matter, to the exclusion of the NLRC. The DOLE would have no jurisdiction only if the employer-employee relationship has already been terminated, or it appears, upon review, that no employer-employee relationship existed in the first place. It must also be remembered that the power of the DOLE to determine the existence of an employer-employee relationship need not necessarily result in an affirmative finding. The DOLE may well make the determination that no employer-employee relationship exists, thus divesting itself of jurisdiction over the case. It must not be precluded from being able to reach its own conclusions, not by the parties, and certainly not by the SC. To recapitulate, if a complaint is brought before the DOLE to give effect to the labor standards provisions of the Labor Code or other labor legislation, and there is a finding by the DOLE that there is an existing employeremployee relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC. If the DOLE finds that there is no employer-employee relationship, the jurisdiction is properly with the NLRC. If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and conditions of employment, if accompanied by a claim for reinstatement. If a complaint is filed with the NLRC, and there is still an existing employer-employee relationship, the jurisdiction is properly with the DOLE. The findings of the DOLE, however, may still be questioned through a petition for certiorari under Rule 65 of the Rules of Court.
79 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 51. EX-BATAAN VETERANS SECURITY AGENCY, INC., (EBVSAI) v. THE SECRETARY OF LABOR BIENVENIDO E. LAGUESMA G.R. No. 152396 November 20, 2007 CARPIO, J.: THE VISITORIAL AND ENFORCEMENT POWERS OF THE DOLE REGIONAL DIRECTOR CAN BE EXERCISED EVEN WHERE THE INDIVIDUAL CLAIM EXCEEDS P5,000 DOCTRINE: While it is true that under Articles 129 and 217 of the Labor Code, the LA has jurisdiction to hear and decide cases where the aggregate money claims of each employee exceeds P5,000.00, said provisions of law do not contemplate nor cover the visitorial and enforcement powers of the Secretary of Labor or his duly authorized representatives. Rather, said powers are defined and set forth in Article 128 of the Labor Code. FACTS: Private respondents are EBVSAI's employees who instituted a complaint for underpayment of wages against EBVSAI before the Regional Office (RO) of DOLE. Consequently, RO conducted a complaint inspection of EBVSAI’s Plant where several labor law violations were noted. On the same day, the RO issued a notice of hearing requiring EBVSAI and private respondents to attend. After the hearing, the Regional Director (RD) ordered EBVSAI to pay Php 763,927.85 to the affected employees. EBVSAI filed a motion for reconsideration and alleged that under Articles 129 and 217(6) of the Labor Code, the Labor Arbiter, not the Regional Director, has exclusive and original jurisdiction over the case because the individual monetary claim of private respondents exceeds P5,000. RD denied the motion stating that, pursuant to RA 7730, the limitations under Articles 129 and 217(6) of the Labor Code no longer apply to the Secretary of Labor's visitorial and enforcement powers under Article 128(b). The Secretary of Labor or his duly authorized representatives are now empowered to hear and decide, in a summary proceeding, any matter involving the recovery of any amount of wages and other monetary claims arising out of employer-employee relations at the time of the inspection. DOLE SECRETARY RULING: It affirmed the Director’s decision on the ground that pursuant to RA 7730, the Court's decision in the Servando case is no longer controlling insofar as the restrictive effect of Article 129 on the visitorial and enforcement power of the Secretary of Labor is concerned. CA RULING: affirmed DOLE Secretary ruling ISSUE: Whether the Secretary of Labor or his duly authorized representatives have jurisdiction over the money claims of private respondents which exceed P5,000? SC RULING: YES. In Allied Investigation Bureau, Inc. v. Sec. of Labor, SC ruled that while it is true that under Articles 129 and 217 of the Labor Code, the LA has jurisdiction to hear and decide cases where the aggregate money claims of each employee exceeds P5,000.00, said provisions of law do not contemplate nor cover the visitorial and enforcement powers of the Secretary of Labor or his duly authorized representatives. Rather, said powers are defined and set forth in Article 128 of the Labor Code (as amended by R.A. No. 7730) thus: (b) Notwithstanding the provisions of Article[s] 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to [the labor standards provisions of this Code and other] labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. However, if the labor standards case is covered by the exception clause in Article 128(b) of the Labor Code, then the RD will have to endorse the case to the appropriate Arbitration Branch of the NLRC. In order to divest the RD or his representatives of jurisdiction, the following elements must be present: (a) that the employer contests the findings of the labor regulations officer and raises issues thereon; (b) that in order to resolve such issues, there is a need to examine evidentiary matters; and (c) that such matters are not verifiable in the normal course of inspection. The rules also provide that the employer shall raise such objections during the hearing of the case or at any time after receipt of the notice of inspection results. 80 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS In this case, the RD validly assumed jurisdiction over the money claims of private respondents even if the claims exceeded P5,000 because such jurisdiction was exercised in accordance with Article 128(b) of the Labor Code and the case does not fall under the exception clause. EBVSAI did not contest the findings of the labor regulations officer during the hearing or after receipt of the notice of inspection results. It was only in its supplemental motion for reconsideration before the RD that EBVSAI questioned the findings of the labor regulations officer and presented documentary evidence to controvert the claims of private respondents. But even if this was the case, the RD and the Secretary of Labor still looked into and considered EBVSAI's documentary evidence and found that such did not warrant the reversal of the order.
81 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 52. ARSENIO LOCSIN v. NISSAN CAR LEASE PHILS., INC. (NCLPI) and LUIS BANSON G.R. No. 185567 October 20, 2010 BRION, J.: LA HAS NO JURISDICTION OVER INTRA-CORPORATE CONTROVERSY DOCTRINE: Given Locsin’s status as a corporate officer, the RTC, not the Labor Arbiter or the NLRC, has jurisdiction to hear the legality of the termination of his relationship with Nissan. A corporate officers dismissal is always a corporate act, or an intra-corporate controversy which arises between a stockholder and a corporation so that RTC should exercise jurisdiction based on Section 5(c) of PD 902-A. FACTS: Locsin was elected Executive Vice President and Treasurer (EVP/Treasurer) of NCLPI. Locsin held this position for 13 years until he was nominated and elected Chairman. A few months thereafter, an election was held and Locsin was neither re-elected Chairman nor reinstated to his previous position as EVP/Treasurer. Locsin filed a complaint for illegal dismissal before the Labor Arbiter against NCLPI. NCLPI filed a Motion to Dismiss on the ground that the Labor Arbiter did not have jurisdiction over the case since the issue of Locsins removal as EVP/Treasurer involves an intra-corporate dispute. Locsin maintained that he is an employee of NCPI. LA RULING: LA denied the Motion to Dismiss, holding that its office-acquired jurisdiction to arbitrate and/or decide the instant complaint finding extant in the case an employer-employee relationship. Article 280 of the Labor Code, the receipt of salaries by Locsin, SSS deductions on that salary, and the element of control in the performance of work duties were used by LA to conclude that Locsin was a regular employee. CA RULING: NCLPI elevated the case to the CA through a Petition for Certiorari under Rule 65 of the Rules of Court. CA ruled that Locsin was a corporate officer; hence the issue of his removal as EVP/Treasurer is an intracorporate dispute under the RTCs jurisdiction. The fact that the position of EVP/Treasurer is specifically enumerated as an office in the corporations by-laws makes him a corporate officer. ISSUE: Whether Locsin’s position as EVP/Treasurer makes him a corporate officer thereby excluding him from the coverage of the Labor Code? SC RULING: YES. Locsin was undeniably Chairman and President, and was elected to these positions by the Nissan board pursuant to its By-laws. As such, he was a corporate officer, not an employee. Section 25 of the Corporation Code provides that corporate officers are the president, secretary, treasurer and such other officers as may be provided for in the by-laws. Even as EVP/Treasurer, Locsin already acted as a corporate officer because such position is provided for in Nissans By-Laws. An office is created by the charter of the corporation and the officer is elected by the directors or stockholders. On the other hand, an employee usually occupies no office and generally is employed by the managing officer of the corporation who also determines the compensation to be paid to such employee. Locsin was elected by the NCLPI Board, in accordance with the Amended By-Laws of the corporation. Given Locsin’s status as a corporate officer, the RTC, not the Labor Arbiter or the NLRC, has jurisdiction to hear the legality of the termination of his relationship with Nissan. A corporate officers dismissal is always a corporate act, or an intra-corporate controversy which arises between a stockholder and a corporation so that RTC should exercise jurisdiction based on Section 5(c) of PD 902-A.
82 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 53. OSCAR C. REYES vs. HON. REGIONAL TRIAL COURT OF MAKATI, Branch 142, ZENITH INSURANCE CORPORATION, and RODRIGO C. REYES G.R. No. 165744 August 11, 2008 BRION, J.: JURISDICTION OF SPECIAL COMMERCIAL COURTS DOCTRINE: Without the settlement of Anastacia’s estate, there can be no definite partition and distribution of the estate to the heirs. Without the partition and distribution, there can be no registration of the transfer. And without the registration, we cannot consider the transferee-heir a stockholder who may invoke the existence of an intra-corporate relationship as premise for an intra-corporate controversy within the jurisdiction of a special commercial court. FACTS: Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are the children of the spouses Pedro and Anastacia Reyes. Pedro, Anastacia, Oscar, and Rodrigo each owned shares of stock of Zenith Insurance Corporation (Zenith). Pedro died in 1964, while Anastacia died in 1993. Although Pedro’s estate was judicially partitioned among his heirs sometime in the 1970s, no similar settlement and partition appear to have been made with Anastacia’s estate, which included her shareholdings in Zenith. Zenith and Rodrigo filed a derivative suit with SEC (now RTC) against Oscar in order to obtain an accounting of the funds and assets of Zenith which are now in the possession of Oscar and to determine the shares of stock of deceased spouses that were arbitrarily and fraudulently appropriated by Oscar for himself and which were not collated and taken into account in the partition, distribution, and/or settlement of the estate. Oscar filed a Motion to Declare Complaint as Nuisance or Harassment Suit. He claimed that the complaint is a mere nuisance or harassment suit and should be dismissed; and that it is not a bona fide derivative suit as it partakes of the nature of a petition for the settlement of estate of the Anastacia that is outside the jurisdiction of a RTC. RTC RULING: RTC denied the motion as to the action for determination of the shares of stock of deceased allegedly taken by Oscar, its accounting and the corresponding delivery of these shares since it is not a derivative suit and should properly be threshed out in a petition for settlement of estate. However, the action with respect to the derivative suit for accounting of the funds and assets of the corporation which are in the control, custody, and/or possession of the Oscar was not dismissed and was taken cognizance of by RTC. CA RULING: affirmed the RTC order ISSUE: Whether the special commercial court (RTC) have jurisdiction over the subject matter of Rodrigo’s complaint? SC RULING: NO. While Rodrigo holds shares of stock in Zenith, he holds them in two capacities: in his own right with respect to the 4,250 shares registered in his name, and as one of the heirs of Anastacia Reyes with respect to the 136,598 shares registered in her name. What is material in resolving the issues of this case under the allegations of the complaint is Rodrigo’s interest as an heir since the subject matter of the present controversy centers on the shares of stocks belonging to Anastacia, not on Rodrigo’s personally-owned shares nor on his personality as shareholder owning these shares. Hence, Rodrigo must first prove that there are shareholdings that will be left to him and his co-heirs, and this can be determined only in a settlement of the decedent’s estate. No such proceeding has been commenced to date. Without the settlement of Anastacia’s estate, there can be no definite partition and distribution of the estate to the heirs. Without the partition and distribution, there can be no registration of the transfer. And without the registration, we cannot consider the transferee-heir a stockholder who may invoke the existence of an intra-corporate relationship as premise for an intra-corporate controversy within the jurisdiction of a special commercial court.
83 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 54. LESLIE OKOL v. SLIMMERS WORLD INTERNATIONAL, BEHAVIOR MODIFICATIONS, INC., and RONALD JOSEPH MOY G.R. No. 160146 DECEMBER 11, 2009 CARPIO, J.: LA HAS NO JURISDICTION OVER INTRA-CORPORATE CONTROVERSY DOCTRINE: In a number of cases, SC held that a corporate officer’s dismissal is always a corporate act, or an intra-corporate controversy which arises between a stockholder and a corporation. The question of remuneration involving a stockholder and officer, not a mere employee, is not a simple labor problem but a matter that comes within the area of corporate affairs and management and is a corporate controversy in contemplation of the Corporation Code. FACTS: Respondent Slimmers World International operating under the name Behavior Modifications, Inc. (Slimmers World) employed petitioner Leslie Okol (Okol) as a management trainee. Okol was promoted as Head Office Manager and then Director and Vice President. Okol’s services was terminated by Slimmers World due to the seizure by the Bureau of Customs of machines and treadmills to or consigned to Slimmers World but the shipment of the equipment was placed under the name of Okol. Okol filed an illegal dismissal complaint with the LA. Respondents filed a Motion to Dismiss asserting that the NLRC had no jurisdiction over the subject matter of the complaint. Okol argued that even as vice-president, the work that she performed conforms to that of an employee rather than a corporate officer. Mere title or designation in a corporation will not, by itself, determine the existence of an employer-employee relationship. LA RULING: LA granted the motion to dismiss ruling that Okol was the vice-president of Slimmers World at the time of her dismissal. Since it involved a corporate officer, the dispute was an intra-corporate controversy falling outside the jurisdiction of the Arbitration branch. NLRC RULING: It reversed the LA decision CA RULING: It affirmed LA’s ruling holding that being an intra-corporate dispute, the case falls within the jurisdiction of the regular courts pursuant to Republic Act No. 8799. ISSUE: Does NLRC have jurisdiction over the illegal dismissal case filed by petitioner? SC RULING: NO. Section 25 of the Corporation Code enumerates corporate officers as the president, secretary, treasurer and such other officers as may be provided for in the by-laws. An office is created by the charter of the corporation and the officer is elected by the directors or stockholders. On the other hand, an employee usually occupies no office and generally is employed not by action of the directors or stockholders but by the managing officer of the corporation who also determines the compensation to be paid to such employee. The Amended By-Laws of Slimmers World which enumerate the power of the board of directors as well as the officers of the corporation clearly shows that Okol was a director and officer of Slimmers World. In a number of cases, SC held that a corporate officer’s dismissal is always a corporate act, or an intra-corporate controversy which arises between a stockholder and a corporation. The question of remuneration involving a stockholder and officer, not a mere employee, is not a simple labor problem but a matter that comes within the area of corporate affairs and management and is a corporate controversy in contemplation of the Corporation Code.
84 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 55. RURAL BANK OF CORON (PALAWAN), INC., EMPIRE COLD STORAGE AND DEVELOPMENT CORPORATION, CITIZENS DEVELOPMENT INCOPRORATED (CDI), CARIDAD B. GARCIA, SANDRA G. ESCAT, LORNA GARCIA, and OLGA G. ESCAT v. ANNALISA CORTES G.R. No. 164888 December 6, 2006 CARPIO MORALES, J.: JURISDICTION OF LA; POSTING A BOND IS A REQUIREMENT FOR PERFECTION OF APPEAL TO NLRC DOCTRINE: 1. While respondent was the Corporate Secretary of the Rural Bank of Coron, she was also its Financial Assistant and the Personnel Officer of the two other petitioner corporations. A corporation can engage its corporate officers to perform services under a circumstance which would make them employees. The Labor Arbiter has thus jurisdiction over respondent’s complaint. 2. All that is required to perfect the appeal is the posting of a bond to ensure that the award is eventually paid should the appeal be dismissed. Petitioners should thus have posted a bond, even if it were only partial, but they did not. FACTS: Respondent was the Financial Assistant, Personnel Officer and Corporate Secretary of The Rural Bank of Coron, Personnel Officer of CDI, and also Personnel Officer and Disbursing Officer of The Empire Cold Storage Development Corporation (ECSDC). She simultaneously received salaries from these corporations. On examination of the financial books of the corporations, it was discovered that respondent was involved in several anomalies, drawing petitioners to terminate respondent’s services. Respondent filed a complaint 5 for illegal dismissal and non-payment of salaries and other benefits before the LA. Petitioners moved for the dismissal of the complaint on the ground of lack of jurisdiction, contending that the case was an intra-corporate controversy involving the removal of a corporate officer, respondent being the Corporate Secretary of the Rural Bank of Coron, Inc., hence, cognizable by the Securities and Exchange Commission (SEC) (now RTC) pursuant to Section 5 of PD 902-A. LA RULING: LA assumed jurisdiction ruling that aside from her being Corporate Secretary of Rural Bank of Coron, complainant was likewise appointed as Financial Assistant & Personnel Officer, which is not a corporate officer of petitioners. LA ordered petitioners to pay respondent P1,168,090.00. NLRC RULING: On the tenth or last day of the period of appeal, petitioners filed a Notice of Appeal and Motion for Reduction of Bond to which they attached a Memorandum on Appeal. In their Motion for Reduction of Bond, petitioners alleged that the corporations were under financial distress and the Rural Bank of Coron was under receivership. NLRC, while noting that petitioners timely filed the appeal, held that the same was not accompanied by an appeal bond, a mandatory requirement under Article 223 of the Labor Code and Section 6, Rule VI of the NLRC New Rules of Procedure. It also noted that the Motion for Reduction of Bond was "premised on self-serving allegations." It accordingly dismissed the appeal. ISSUES: 1. Whether LA has jurisdiction over the case? 2. Whether petitioners’ appeal before NLRC was perfected? SC RULING: 1. YES. While respondent was the Corporate Secretary of the Rural Bank of Coron, she was also its Financial Assistant and the Personnel Officer of the two other petitioner corporations. Mainland Construction Co., Inc. v. Movilla instructs that a corporation can engage its corporate officers to perform services under a circumstance which would make them employees. The Labor Arbiter has thus jurisdiction over respondent’s complaint. 2. NO. All that is required to perfect the appeal is the posting of a bond to ensure that the award is eventually paid should the appeal be dismissed. Petitioners should thus have posted a bond, even if it were only partial, but they did not. In the case at bar, petitioner did not post a full or partial appeal bond within the prescribed period, thus, no appeal was perfected from the decision of the LA. For this reason, the decision sought to be appealed to the NLRC had become final and executory and therefore immutable. No relaxation of the Rule may thus be considered. Clearly then, the NLRC has no authority to entertain the appeal, much less to reverse the decision of the LA. 85 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 56. HALGUENA v. PAL G.R. No. 172013 PERALTA, J.:
October 2, 2009
JURISDICTION OF LABOR ARBITER DOCTRINE: Not every controversy or money claim by an employee against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter. Actions between employees and employer where the employer-employee relationship is merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular court. FACTS: Petitioners were employed as female flight attendants of PAL. They are members of the Flight Attendants and Stewards Association of the Philippines (FASAP), the exclusive exclusive bargaining representative of the flight attendants.Section 144, Part A of the PAL-FASAP CBA, provides that: “3. Compulsory Retirement. Subject to the grooming standards provisions of this Agreement, compulsory retirement shall be fifty-five (55) for females and sixty (60) for males. x x x.” petitioners and several female cabin crews manifested that the aforementioned CBA provision on compulsory retirement is discriminatory, and demanded for an equal treatment with their male counterparts. This demand was reiterated in a letter. On July 12, 2004, Robert D. Anduiza, President of FASAP submitted their 2004-2005 CBA proposals[6] and manifested their willingness to commence the collective bargaining negotiations between the management and the association, at the soonest possible time. In 2004, petitioners filed a Special Civil Action for Declaratory Relief with Prayer for the Issuance of TRO and Writ of Preliminary Injunction with the Regional Trial Court (RTC) of Makati Cityagainst respondent for the invalidity of Section 144, Part A of the PAL-FASAP CBA. RTC RULING: The RTC issued an Order upholding its jurisdiction over the present case. The RTC reasoned that: The allegations in the Petition do not make out a labor dispute arising from employer-employee relationship as none is shown to exist. This case is not directed specifically against respondent arising from any act of the latter, nor does it involve a claim against the respondent. Rather, this case seeks a declaration of the nullity of the questioned provision of the CBA, which is within the Court's competence, with the allegations in the Petition constituting the bases for such relief sought. The RTC issued a TRO on August 10, 2004, enjoining the respondent for implementing Section 144, Part A of the PAL-FASAP CBA. CA RULING: declared RTC to have NO JURISDICTION OVER THE CASE ISSUE: Does the RTC have jurisdiction over the petitioners' action challenging the legality or constitutionality of the provisions on the compulsory retirement age contained in the CBA between respondent PAL and FASAP? SC RULING: YES. The subject of litigation is incapable of pecuniary estimation, exclusively cognizable by the RTC, pursuant to Section 19 (1) of Batas Pambansa Blg. 129, as amended. Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals. The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires the application of the Constitution, labor statutes, law on contracts and the Convention on the Elimination of All Forms of Discrimination Against Women, and the power to apply and interpret the constitution and CEDAW is within the jurisdiction of trial courts, a court of general jurisdiction. In Georg Grotjahn GMBH & Co. v. Isnani, this Court held that not every dispute between an employer and employee involves matters that only labor arbiters and the NLRC can resolve in the exercise of their adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters and the NLRC under Article 217 of the Labor Code is limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the Labor Code, other labor statutes, or their collective bargaining agreement. Not every controversy or money claim by an employee against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter. Actions between employees and employer where the employer-employee 86 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS relationship is merely incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction of the regular court. Here, the employer-employee relationship between the parties is merely incidental and the cause of action ultimately arose from different sources of obligation, i.e., the Constitution and CEDAW. Thus, where the principal relief sought is to be resolved not by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the labor arbiter and the NLRC. In such situations, resolution of the dispute requires expertise, not in labor management relations nor in wage structures and other terms and conditions of employment, but rather in the application of the general civil law. Clearly, such claims fall outside the area of competence or expertise ordinarily ascribed to labor arbiters and the NLRC and the rationale for granting jurisdiction over such claims to these agencies disappears.
87 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 57. SANTIAGO v. CF SHARP CREW MANAGEMENT G.R. No. 162419 July 10, 2007 TINGA, J.: JURISDICTION OF LABOR ARBITER DOCTRINE: The jurisdiction of labor arbiters is not limited to claims arising from employer-employee relationships. FACTS: In 1998, Paul Santiago signed a new contract of employment with CF Sharp Crew Mgmt., Inc., with the duration of nine (9) months. He was assured of a monthly salary of US$515.00, overtime pay and other benefits. Santiago was to be deployed on board the "MSV Seaspread". A week before the scheduled date of departure, Capt. Pacifico Fernandez, CF Sharp‘s Vice President, sent a fax to the captain of "MSV Seaspread telling the latter that he received calls from various individuals about the possibility that Santiago may jump ship in Canada like his brother did before him. Santiago was thus told that he would not be leaving for Canada anymore, but he was reassured that he might be considered for deployment at some future date. Consequently, Santiago filed a complaint for illegal dismissal, damages, and attorney's fees against CF Sharp and its foreign principal. In defense, CF Sharp contends that there is no employer-employee relationship between petitioner and respondent because under the POEA Standard Contract, the employment contract shall commence upon actual departure of the seafarer from the airport or seaport at the point of hire. In the absence of an employeremployee relationship between the parties, the claims for illegal dismissal, actual damages, and attorney‘s fees should be dismissed as the NLRC does not have jurisdiction over the same. LA RULING: The labor arbiter held respondent liable NLRC RULING: (NLRC) ruled that there is no employer-employee relationship between petitioner and respondent because under the Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean Going Vessels (POEA Standard Contract), the employment contract shall commence upon actual departure of the seafarer from the airport or seaport at the point of hire and with a POEA-approved contract. In the absence of an employer-employee relationship between the parties, the claims for illegal dismissal, actual damages, and attorneys fees should be dismissed. CA RULING: It agreed with the NLRCs finding that petitioners non-deployment was a valid exercise of respondents management prerogative. ISSUE: Does the NLRC have jurisdiction over the case? SC RULING: YES. The jurisdiction of labor arbiters is not limited to claims arising from employer-employee relationships. Section 10 of R.A. No. 8042 (Migrant Workers Act), provides that: Sec. 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. x x x Since the present petition involves the employment contract entered into by petitioner for overseas employment, his claims are cognizable by the labor arbiters of the NLRC.
88 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 58. ATLAS FARMS, INC. v. NLRC G.R. No. 142244 November 18, 2002 QUISUMBING, J.: JURISDICTION OF LABOR ARBITER DOCTRINE: Where the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to the grievance machinery set up in the CBA, or brought to voluntary arbitration. But, where there was already actual termination, with alleged violation of the employees rights, it is already cognizable by the labor arbiter. FACTS: Private respondent Jaime O. dela Pea was employed as a veterinary aide by petitioner. He was among several employees terminated in July 1989. On July 8, 1989, he was re-hired by petitioner and given the additional job of feedmill operator. He was instructed to train selected workers to operate the feedmill. In 1993, Pea was allegedly caught urinating and defecating on company premises not intended for the purpose. The farm manager of petitioner issued a formal notice directing him to explain within 24 hours why disciplinary action should not be taken against him. Pea refused, however, to receive the formal notice. He never bothered to explain. Thus, a notice of termination with payment of his monetary benefits was sent to him. Co-respondent Marcial I. Abion was a carpenter/mason and a maintenance man whose employment by petitioner. Allegedly, he caused the clogging of the fishpond drainage resulting in damages worth several hundred thousand pesos when he improperly disposed of the cut grass and other waste materials into the ponds drainage system. Petitioner sent a written notice to Abion, requiring him to explain what happened, otherwise, disciplinary action would be taken against him. He refused to receive the notice and give an explanation, according to petitioner. Consequently, the company terminated his services. He acknowledged receipt of a written notice of dismissal, with his separation pay. Pea and Abion filed separate complaints for illegal dismissal that were later consolidated. Both claimed that their termination from service was due to petitioners suspicion that they were the leaders in a plan to form a union to compete and replace the existing management-dominated union. LA RULING: The labor arbiter dismissed their complaints on the ground that the grievance machinery in the collective bargaining agreement (CBA) had not yet been exhausted. Private respondents availed of the grievance process, but later on refiled the case before the NLRC in Region IV. They alleged lack of sympathy on petitioners part to engage in conciliation proceedings. NLRC RULING: NLRC reversed the labor arbiter’s decision. CA RULING: The appellate court denied the petition and affirmed the NLRC resolution with some modifications, thus: 1) The private respondents can not be reinstated, due to their acceptance of the separation pay offered by the petitioner; 2) The private respondents are entitled to their full back wages; and, 3) The amount of the separation pay received by private respondents from petitioner shall not be deducted from their full back wages. ISSUE: Does the LA and NLRC have jurisdiction over the case? SC RULING: YES. Coming to the merits of the petition, the NLRC found that petitioner did not comply with the requirements of a valid dismissal. For a dismissal to be valid, the employer must show that: (1) the employee was accorded due process, and (2) the dismissal must be for any of the valid causes provided for by law. No evidence was shown that private respondents refused, as alleged, to receive the notices requiring them to show cause why no disciplinary action should be taken against them. Without proof of notice, private respondents who were subsequently dismissed without hearing were also deprived of a chance to air their side at the level of the grievance machinery. Given the fact of dismissal, it can be said that the cases were effectively removed from the jurisdiction of the voluntary arbitrator, thus placing them within the jurisdiction of the labor arbiter. Where the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to the grievance machinery set up in the CBA, or brought to voluntary arbitration. But, where there was already actual termination, with alleged violation of the employees rights, it is already cognizable by the labor arbiter. 89 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 59. PERPETUAL HELP CREDIT COOPERATIVE, INC. (PHCCI) v. BENEDICTO FABURADA G.R. No. 121948. October 8, 2001 SANDOVAL-GUTIERREZ, J.: JURISDICTION OF LABOR ARBITER DOCTRINE: The dispute is about payment of wages, overtime pay, rest day and termination of employment. Under Art. 217 of the Labor Code, these disputes are within the original and exclusive jurisdiction of the Labor Arbiter. FACTS: Benedicto Faburada, Sisinita Vilar, Imelda Tamayo and Harold Catipay, private respondents, filed a complaint against petitioner, with the Arbitration Branch, DOLE for illegal dismissal, premium pay on holidays and rest days, separation pay, wage differential, moral damages, and attorneys fees. Petitioner PHCCI filed a motion to dismiss the complaint on the ground that there is no employer-employee relationship between them as private respondents are all members and co-owners of the cooperative and they have not exhausted the remedies provided in the cooperative by-laws. Petitioner filed a supplemental motion to dismiss alleging that Article 121 of R.A. No. 6939 or the Cooperative Development Authority Law which took effect on March 26, 1990, requires conciliation or mediation within the cooperative before a resort to judicial proceeding. LA RULING: The Labor Arbiter denied petitioner's motion to dismiss, holding that the case is impressed with employer-employee relationship and that the law on cooperatives is subservient to the Labor Code. NLRC RULING: NLRC affirmed the Labor Arbiter's decision CA RULING: The appellate court denied the petition and affirmed the NLRC resolution with some modifications, thus: 1) The private respondents cannot be reinstated, due to their acceptance of the separation pay offered by the petitioner; 2) The private respondents are entitled to their full back wages; and, 3) The amount of the separation pay received by private respondents from petitioner shall not be deducted from their full back wages. ISSUE: Does the LA have jurisdiction over the case? SC RULING: YES. As aptly stated by the Solicitor General in his comment, P.D. 175 (strengthening the Cooperative Movement) does not provide for a grievance machinery where a dispute or claim may first be submitted. LOI 23 refers to instructions to the Secretary of Public Works and Communications to implement immediately the recommendation of the Postmaster General for the dismissal of some employees of the Bureau of Post. Obviously, this LOI has no relevance to the instant case. Article 121 of Republic Act No. 6938 (Cooperative Code of the Philippines) provides the procedure how cooperative disputes are to be resolved, thus: ART. 121. Settlement of Disputes.- Disputes among members, officers, directors, and committee members, and intra-cooperative disputes shall, as far as practicable, be settled amicably in accordance with the conciliation or mediation mechanisms embodied in the bylaws of the cooperative, and in applicable laws. Should such a conciliation/mediation proceeding fail, the matter shall be settled in a court of competent jurisdiction. Complementing this Article is Section 8 of R.A. No. 6939 (Cooperative Development Authority Law) which reads: SEC. 8 Mediation and Conciliation.- Upon request of either or both parties, the Authority shall mediate and conciliate disputes within a cooperative or between cooperatives: Provided, That if no mediation or conciliation succeeds within three (3) months from request thereof, a certificate of non-resolution shall be issued by the Commission prior to the filing of appropriate action before the proper courts. The above provisions apply to members, officers and directors of the cooperative involved in disputes within a 90 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS cooperative or between cooperatives. There is no evidence that private respondents are members of petitioner PHCCI and even if they are, the dispute is about payment of wages, overtime pay, rest day and termination of employment. Under Art. 217 of the Labor Code, these disputes are within the original and exclusive jurisdiction of the Labor Arbiter.
91 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 60. AUSTRIA v. NLRC G.R. No. 124382 KAPUNAN, J.:
August 16, 1999
JURISDICTION OF LABOR ARBITER DOCTRINE: Under the Labor Code, the provision which governs the dismissal of employees, is comprehensive enough to include religious corporations, such as the SDA, in its coverage. The active participation of a party against whom the action was brought, coupled with his failure to object to the jurisdiction of the court or quasi-judicial body where the action is pending, is tantamount to an invocation of that jurisdiction and a willingness to abide by the resolution of the case and will bar said party from later on impugning the court or body’s jurisdiction. FACTS: Private Respondent Central Philippine Union Mission Corporation of the Seventh-Day Adventists (SDA) is a religious corporation. Petitioner, on the other hand, was a Pastor of the SDA until 31 October 1991, when his services were terminated. petitioner received several communications from Mr. Eufronio Ibesate, the treasurer of the Negros Mission asking him to admit accountability and responsibility for the church tithes and offerings collected by his wife, Mrs. Thelma Austria, in his district which amounted to P15,078.10, and to remit the same to the Negros Mission. Petitioner reasoned out that he should not be made accountable since it was private respondents Pastor Gideon Buhat and Mr. Eufronio Ibesate who authorized his wife to collect the tithes and offerings since he was very sick to do the collecting at that time. On 16 October 1991,Petitioner went to the office of Pastor Buhat, the president of the Negros Mission. During said call, petitioner tried to persuade Pastor Buhat to convene the Executive Committee for the purpose of settling the dispute between him and the private respondent, Pastor David Rodrigo. The dispute between Pastor Rodrigo and petitioner arose from an incident in which petitioner assisted his friend, Danny Diamada, to collect from Pastor Rodrigo the unpaid balance for the repair of the latters motor vehicle which he failed to pay to Diamada. Due to the assistance of petitioner in collecting Pastor Rodrigos debt, the latter harbored ill-feelings against petitioner. When news reached petitioner that Pastor Rodrigo was about to file a complaint against him with the Negros Mission, he immediately proceeded to the office of Pastor Buhat on the date abovementioned and asked the latter to convene the Executive Committee. Pastor Buhat denied the request of petitioner since some committee members were out of town and there was no quorum. Thereafter, the two exchanged heated arguments. A fact-finding committee was created to investigate petitioner. Subsequently, petitioner received a letter of dismissal citing misappropriation of denominational funds, willful breach of trust, serious misconduct, gross and habitual neglect of duties, and commission of an offense against the person of employers duly authorized representative, as grounds for the termination of his services. Reacting against the adverse decision of the SDA, petitioner filed a complaint before the Labor Arbiter for illegal dismissal against the SDA and its officers and prayed for reinstatement with backwages and benefits, moral and exemplary damages and other labor law benefits. Private respondents contend that by virtue of the doctrine of separation of church and state, the Labor Arbiter and the NLRC have no jurisdiction to entertain the complaint filed by petitioner. Since the matter at bar allegedly involves the discipline of a religious minister, it is to be considered a purely ecclesiastical affair to which the State has no right to interfere. LA RULING: The Labor Arbiter RENDERED DECISION IN FAVOR OF PETITIONER. NLRC RULING: sustained the argument posed by private respondents and, accordingly, dismissed the complaint of petitioner. ISSUE: Does the LA have jurisdiction over the case? 92 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS SC RULING: YES. Under the Labor Code, the provision which governs the dismissal of employees, is comprehensive enough to include religious corporations, such as the SDA, in its coverage. Article 278 of the Labor Code on postemployment states that the provisions of this Title shall apply to all establishments or undertakings, whether for profit or not. Obviously, the cited article does not make any exception in favor of a religious corporation. This is made more evident by the fact that the Rules Implementing the Labor Code, particularly, Section 1, Rule 1, Book VI on the Termination of Employment and Retirement, categorically includes religious institutions in the coverage of the law, to wit: Section 1. Coverage. This Rule shall apply to all establishments and undertakings, whether operated for profit or not, including educational, medical, charitable and religious institutions and organizations, in cases of regular employment with the exception of the Government and its political subdivisions including government-owned or controlled corporations. With this clear mandate, the SDA cannot hide behind the mantle of protection of the doctrine of separation of church and state to avoid its responsibilities as an employer under the Labor Code. Finally, as correctly pointed out by petitioner, private respondents are estopped from raising the issue of lack of jurisdiction for the first time on appeal. It is already too late in the day for private respondents to question the jurisdiction of the NLRC and the Labor Arbiter since the SDA had fully participated in the trials and hearings of the case from start to finish. The Court has already ruled that the active participation of a party against whom the action was brought, coupled with his failure to object to the jurisdiction of the court or quasi-judicial body where the action is pending, is tantamount to an invocation of that jurisdiction and a willingness to abide by the resolution of the case and will bar said party from later on impugning the court or bodys jurisdiction. Thus, the active participation of private respondents in the proceedings before the Labor Arbiter and the NLRC mooted the question on jurisdiction.
93 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 61. DEPARTMENT OF FOREIGN AFFAIRS v. NATIONAL LABOR RELATIONS COMMISSION, HON. LABOR ARBITER NIEVES V. DE CASTRO and JOSE C. MAGNAYI G.R. No. 113191 September 18, 1996 VITUG, J.: ART. 217 DOCTRINE: The stipulations of both the Charter and Headquarters Agreement should be able, may well enough, to establish that, except in the specified cases of borrowing and guarantee operations, as well as the purchase, sale and underwriting of securities, the ADB enjoys immunity from legal process of every form. Thus, the decision of the Labor Arbiter is rendered vacant for being null and void. FACTS: Jose Magnayi initiated case for his alleged illegal dismissal by ADB and the latter's violation of the "labor-only" contracting law. Two summonses were served, one sent directly to the ADB and the other through DFA, both with a copy of the complaint. Forthwith, the ADB and the DFA notified respondent Labor Arbiter that the ADB, as well as its President and Officers, were covered by an immunity from legal process except for borrowings, guaranties or the sale of securities pursuant to its Charter in relation to Headquarters Agreement of ADB and the Government. LA RULING: The Labor Arbiter took cognizance of the complaint on the impression that the ADB had waived its diplomatic immunity from suit. Labor Arbiter concluded (that there Magnayi is illegally dismissed): The ADB did not appeal. Instead, the DFA sought a "formal vacation of the void judgment from NLRC. NLRC CHAIRMAN: The defense of immunity could have been raised before the Labor Arbiter by a special appearance which, naturally, may NOT be considered as a waiver of the very defense being raised. Except where an appeal is seasonably and properly made, neither the Commission nor the NLRC Chairman may review, or even question, the propriety of any decision by a Labor Arbiter. Incidentally, the Commission sits en banc (all fifteen Commissioners) only to promulgate rules of procedure or to formulate policies (Art. 213, Labor Code). "If the Department of Foreign Affairs feels that the action of Labor Arbiter Nieves de Castro constitutes misconduct, malfeasance or misfeasance, it is suggested that an appropriate complaint be lodged with the Office of the Ombudsman. Dissatisfied, the DFA lodged the instant petition for certiorari. OSG in its comment initially assailed the claim of immunity by the ADB. Subsequently, however, it submitted a Manifestation stating, that ADB, indeed, was correct in invoking its immunity from suit under the Charter and the Headquarters Agreement. ISSUE: Is ADB covered by immunity rendering NLRC without jurisdiction? SC RULING: YES. The stipulations of both the Charter and Headquarters Agreement should be able, may well enough, to establish that, except in the specified cases of borrowing and guarantee operations, as well as the purchase, sale and underwriting of securities, the ADB enjoys immunity from legal process of every form. The Banks officers, on their part, enjoy immunity in respect of all acts performed by them in their official capacity. Diplomatic immunity is essentially a political question and courts should refuse to look beyond a determination by the executive branch of the government, and where the plea of diplomatic immunity is recognized and affirmed by the executive branch of the government x x x it is then the duty of the courts to accept the claim of immunity upon appropriate suggestion by the principal law officer of the government, x x x or other officer acting under his direction. Being an international organization that has been extended a diplomatic status, the ADB is independent of the municipal law. The Office of the President, likewise, has issued a letter to the Secretary of Labor "Despite information from DFA, the labor arbiter in question persisted to send summons. Courts should respect diplomatic immunities of foreign officials recognized by the Philippine government.” 94 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS There are two conflicting concepts of sovereign immunity, each widely held and firmly established. According to the classical or absolute theory, a sovereign cannot, without its consent, be made a respondent in the Courts of another sovereign. According to the newer or restrictive theory, the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a state, but not with regard to private act or acts jure gestionis. The service contracts referred to by private respondent have not been intended by the ADB for profit or gain but are official acts over which a waiver of immunity would not attach. The DFA must be allowed to plead its case whenever necessary or advisable to enable it to help keep the credibility of the Philippine government before the international community. "In the United States, the procedure followed is the process of 'suggestion,' where the foreign state or the international organization sued in an American court requests the Secretary of State to make a determination as to whether it is entitled to immunity. "In the Philippines, the practice is for the foreign government or the international organization to first secure an executive endorsement of its claim of sovereign or diplomatic immunity. Decision of the Labor Arbiter is VACATED for being NULL AND VOID.
95 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 62. PHILIPPINE NATIONAL BANK v. FLORENCE O. CABANSAG G.R. No. 157010 June 21, 2005 PANGANIBAN, J.: DOCTRINE: Philippine government requires non-Filipinos working in the country to first obtain a local work permit in order to be legally employed here. That permit, however, does not automatically mean that the non-citizen is thereby bound by local laws only, as averred by petitioner. It does not at all imply a waiver of ones national laws on labor. Absent any clear and convincing evidence to the contrary, such permit simply means that its holder has a legal status as a worker in the issuing country. All Filipino workers, whether employed locally or overseas, enjoy the protective mantle of Philippine labor and social legislations. Our labor statutes may not be rendered ineffective by laws or judgments promulgated, or stipulations agreed upon, in a foreign country. FACTS: Florence Cabansag] arrived in Singapore as a tourist. She applied for employment, with the Singapore Branch of the Philippine National Bank. At the time, too, the Branch Office had two (2) types of employees: (a) expatriates or the regular employees, hired in Manila and assigned abroad including Singapore, and (b) locally (direct) hired. Tobias, General Manager found her eminently qualified recommending the appointment of Florence O. Cabansag, for the position which was approved. She then filed an Application, with the Ministry of Manpower of the Government of Singapore, for the issuance of an Employment Pass as an employee of the Singapore PNB Branch. Her application was approved for a period of two (2) years. Cabansag submitted to Ruben C. Tobias, her initial Performance Report. Ruben C. Tobias was so impressed with the Report that he made a notation and, on said Report: GOOD WORK. However, in the evening, she was told by two (2) co-employees that Ruben C. Tobias has asked them to tell Florence O. Cabansag to resign from her job. Tobias confirmed the veracity of the information, with the explanation that her resignation was imperative as a cost-cutting measure of the Bank. She then asked Ruben C. Tobias that she be furnished with a Formal Advice from the PNB Head Office in Manila. However, Tobias flatly refused. Florence O. Cabansag did not submit any letter of resignation. Tobias again summoned Florence O. Cabansag to his office and demanded that she submit her letter of resignation. For failure thereof, she received a letter from Ruben C. Tobias terminating her employment with the Bank. LA RULING: rendered finding respondents guilty of Illegal dismissal. NLRC RULING: the NLRC affirmed that Decision. CA RULING: CA noted that petitioner bank had failed to adduce in evidence the Singaporean law supposedly governing the latters employment Contract with respondent. CA found that the Contract had actually been processed by the Philippine Embassy in Singapore and approved by POEA, which then used that Contract as a basis for issuing an Overseas Employment Certificate in favor of respondent. Even though respondent secured an employment pass from the Singapore Ministry of Employment, she did not thereby waive Philippine labor laws, or the jurisdiction of the labor arbiter or the NLRC over her Complaint for illegal dismissal. Finally, the CA held that PNB had failed to establish a just cause for the dismissal of respondent. ISSUE:Whether or not the arbitration branch of the NLRC in the National Capital Region has jurisdiction over the instant controversy; SC RULING: YES. The jurisdiction of labor arbiters and the NLRC is specified in Article 217. 96 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS More specifically, Section 10 of RA 8042 reads in part: SECTION 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. Based on the foregoing provisions, labor arbiters clearly have original and exclusive jurisdiction over claims arising from employer-employee relations, including termination disputes involving all workers, among whom are overseas Filipino workers (OFW). Prior to employing respondent, petitioner had to obtain an employment pass for her from the Singapore Ministry of Manpower. Similarly, the Philippine government requires non-Filipinos working in the country to first obtain a local work permit in order to be legally employed here. That permit, however, does not automatically mean that the non-citizen is thereby bound by local laws only, as averred by petitioner. It does not at all imply a waiver of ones national laws on labor. Absent any clear and convincing evidence to the contrary, such permit simply means that its holder has a legal status as a worker in the issuing country. Under Philippine law, this document authorized her working status in a foreign country and entitled her to all benefits and processes under our statutes. Thus, even assuming arguendo that she was considered at the start of her employment as a direct hire governed by and subject to the laws, common practices and customs prevailing in Singapore[17] she subsequently became a contract worker or an OFW who was covered by Philippine labor laws and policies upon certification by the POEA. Undeniably, respondent was employed by petitioner in its branch office in Singapore. Admittedly, she is a Filipino and not a legal resident of that state. She thus falls within the category of migrant worker or overseas Filipino worker. As such, it is her option to choose the venue of her Complaint against petitioner for illegal dismissal. The law gives her two choices: (1) at the Regional Arbitration Branch (RAB) where she resides or (2) at the RAB where the principal office of her employer is situated. Since her dismissal by petitioner, respondent has returned to the Philippines -- specifically to her residence at Filinvest II, Quezon City. Thus, in filing her Complaint before the RAB office in Quezon City, she has made a valid choice of proper venue.
Notice and Hearing Not Complied With; No Valid Cause for Dismissal. Cabansag was Illegally Dismissed.
97 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 63. BEBIANO M. BAÑEZ v. HON. DOWNEY C. VALDEVILLA and ORO MARKETING, INC. G.R. No. 128024 May 9, 2000 GONZAGA-REYES, J.: DOCTRINE: By the designating clause "arising from the employer-employee relations" Article 217 should apply with equal force to the claim of an employer for actual damages against its dismissed employee, where the basis for the claim arises from or is necessarily connected with the fact of termination, and should be entered as a counterclaim in the illegal dismissal case. This is, of course, to distinguish from cases of actions for damages where the employer-employee relationship is merely incidental and the cause of action proceeds from a different source of obligation. Thus, the jurisdiction of regular courts was upheld where the damages, claimed for were based on tort, malicious prosecution, or breach of contract, as when the claimant seeks to recover a debt from a former employee or seeks liquidated damages in enforcement of a prior employment contract. FACTS: Bebiano Baez was the sales operations manager of Oro Marketing in its branch in Iligan City Oro "indefinitely suspended" petitioner and the latter filed a complaint for illegal dismissal with NLRC. Baez alleged a modus operandi used by Oro Marketing. herein: Defendant canvassed customers personally or through salesmen of plaintiff which were hired or recruited by him. If said customer decided to buy items from plaintiff on installment basis, defendant, without the knowledge of said customer and plaintiff, would buy the items on cash basis at ex-factory price, a privilege not given to customers, and thereafter required the customer to sign promissory notes and other documents using the name and property of plaintiff, purporting that said customer purchased the items from plaintiff on installment basis. Thereafter, defendant collected the installment payments either personally or through Venus Lozano, a Group Sales Manager of plaintiff but also utilized by him as secretary in his own business for collecting and receiving of installments, purportedly for the plaintiff but in reality on his own account or business. The collection and receipt of payments were made inside the Iligan City branch using plaintiffs facilities, property and manpower. That accordingly plaintiffs sales decreased and reduced to a considerable extent the profits which it would have earned. LA RULING: Labor Arbiter found petitioner to have been illegally dismissed. NLRC RULING: dismissed the same for having been filed out of time. Elevated by petition for certiorari before the Supreme Court, the case was dismissed on technical grounds[3]; and that even if all the procedural requirements for the filing of the petition were met, it would still be dismissed for failure to show grave abuse of discretion on the part of the NLRC. Oro filed a complaint for damages before RTC Misamis Oriental which prayed for the payment of loss of profit and/or unearned income and expenses of litigation. Baez filed a motion to dismiss the above complaint. He interposed in the court below that the action for damages, having arisen from an employer-employee relationship, was squarely under the exclusive original jurisdiction of the NLRC. He accused Oro Marketing of splitting causes of action, stating that the latter could very well have included the instant claim for damages in its counterclaim before the Labor Arbiter. He also pointed out that the civil action of private respondent is an act of forum-shopping. RTC RULING: A perusal of the complaint which is for damages does not ask for any relief under the Labor Code. The Court believes such cause of action is within the realm of civil law, and jurisdiction over the controversy belongs to the regular courts. ISSUE: Whether RTC has jurisdiction over the case. SC RULING: NO. Article 217(a), paragraph 4 of the Labor Code, ART. 217. Jurisdiction of Labor Arbiters and the Commission. 98 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; The above provisions are a result of the amendment by Section 9 of R.A. No. 6715, which put to rest the earlier confusion as to who between Labor Arbiters and regular courts had jurisdiction over claims for damages as between employers and employees. By the designating clause "arising from the employer-employee relations" Article 217 should apply with equal force to the claim of an employer for actual damages against its dismissed employee, where the basis for the claim arises from or is necessarily connected with the fact of termination, and should be entered as a counterclaim in the illegal dismissal case. In the case before us, private respondent's claim against petitioner for actual damages arose from a prior employer-employee relationship. In the first place, private respondent would not have taken issue with petitioner's "doing business of his own" had the latter not been concurrently its employee. Second, and more importantly, to allow respondent court to proceed with the instant action for damages would be to open anew the factual issue of whether petitioner's installment sale scheme resulted in business losses and the dissipation of private respondent's property. This issue has been duly raised and ruled upon in the illegal dismissal case. The Labor Arbiter, however, found to the contrary ---that no business losses may be attributed to petitioner as in fact, it was by reason of petitioner's installment plan that the sales of the Iligan branch reached its highest record level. Evidently, the lawmaking authority had second thoughts about depriving the Labor Arbiters and the NLRC of the jurisdiction to award damages in labor cases because that setup would mean duplicity of suits, splitting the cause of action and possible conflicting findings and conclusions by two tribunals on one and the same claim. This is, of course, to distinguish from cases of actions for damages where the employer-employee relationship is merely incidental and the cause of action proceeds from a different source of obligation. Thus, the jurisdiction of regular courts was upheld where the damages, claimed for were based on tort, malicious prosecution, or breach of contract, as when the claimant seeks to recover a debt from a former employee or seeks liquidated damages in enforcement of a prior employment contract. Furthermore, the Labor Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed by the Civil Code.
99 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 64. MA. ISABEL T. SANTOS, represented by ANTONIO P. SANTOS, v. SERVIER PHILIPPINES, INC. and NATIONAL LABOR RELATIONS COMMISSION G.R. No. 166377 November 28, 2008 NACHURA, J.: DOCTRINE: The issue of deduction for tax purposes is intertwined with the main issue of whether or not petitioners benefits have been fully given her. It is, therefore, a money claim arising from the employer-employee relationship, which clearly falls within the jurisdiction of the Labor Arbiter and the NLRC. FACTS: Ma. Isabel T. Santos was the Human Resource Manager of respondent Servier Philippines, Inc., Isabel attended a meeting of all human resource managers of respondent, held in Paris, France. Since the last day of the meeting coincided with the graduation of Santos’ only child, she arranged for a European vacation with her family right after the meeting. Isabel together with her husband Antonio P. Santos, her son, and some friends, had dinner at Leon des Bruxelles, a Paris restaurant known for mussels as their specialty. While having dinner, petitioner complained of stomach pain, then vomited. Eventually, she was brought to the hospital where she fell into coma for 21 days; and later stayed at the Intensive Care Unit (ICU) for 52 days. During the time that petitioner was confined at the hospital, her husband and son stayed with her in Paris. Petitioners hospitalization expenses, as well as those of her husband and son, were paid by respondent. She went back to the Philippines and was then confined at the St. Lukes Medical Center for rehabilitation. During the period of petitioners rehabilitation, respondent continued to pay the formers salaries; and to assist her in paying her hospital bills. Petitioners physician concluded that the Santos had not fully recovered mentally and physically. Hence, respondent was constrained to terminate petitioners services. Respondent offered a retirement package. Of the promised retirement benefits amounting to P1,063,841.76, only P701,454.89 was released to petitioners husband, the balance thereof was withheld allegedly for taxation purposes. Respondent also failed to give the other benefits. Petitioner, represented by her husband, instituted the instant case for unpaid amounts. LA RULING: Labor Arbiter dismissed petitioners complaint. The Labor Arbiter stressed that respondent had been generous in giving financial assistance to the petitioner. The arbiter refused to rule on the legality of the deductions made by respondent from petitioners total retirement benefits for taxation purposes, as the issue was beyond the jurisdiction of the NLRC. NLRC RULING: NLRC set aside the Labor Arbiters decision. The NLRC emphasized that petitioner was not retired from the service pursuant to law, collective bargaining agreement (CBA) or other employment contract; rather, she was dismissed from employment due to a disease/disability under Article 284. The NLRC therefore ordered the payment of the other benefits promised by the respondent. CA RULING: affirmed the NLRC decision. ISSUE: Whether the benefits are taxable and thus, it was proper for Servier to deduct P362,386.87 for taxation benefits. (Court ruled that petitioners belatedly claimed entitlement to retirement benefits which issues are not raised in the pleading, thus deemed abandoned.) SC RULING: YES. As she was dismissed on the ground of Disease, the law gives the petitioner the right to demand separation pay. However, respondent established a retirement plan in favor of all its employees.The receipt of retirement 100 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS benefits does not bar the retiree from receiving separation pay. Separation pay is a statutory right designed to provide the employee with the wherewithal during the period that he/she is looking for another employment. On the other hand, retirement benefits are intended to help the employee enjoy the remaining years of his life, lessening the burden of worrying about his financial support, and are a form of reward for his loyalty and service to the employer.[34] Hence, they are not mutually exclusive. However, this is only true if there is no specific prohibition against the payment of both benefits in the retirement plan and/or in the Collective Bargaining Agreement (CBA).[35] In the instant case, the Retirement Plan bars the petitioner from claiming additional benefits on top of that provided. Section 2, Article XII of the Retirement Plan provides: Section 2. NO DUPLICATION OF BENEFITS Petitioners claim for illegal deduction (for tax purposes) falls within the tribunals jurisdiction. It is noteworthy that petitioner demanded the completion of her retirement benefits, including the amount withheld by respondent for taxation purposes. The issue of deduction for tax purposes is intertwined with the main issue of whether or not petitioners benefits have been fully given her. It is, therefore, a money claim arising from the employer-employee relationship, which clearly falls within the jurisdiction[41] of the Labor Arbiter and the NLRC.
Section 32 (B) (6) (a) of the New National Internal Revenue Code (NIRC) provides for the exclusion of retirement benefits from gross income. Thus, for the retirement benefits to be exempt from the withholding tax, the taxpayer is burdened to prove the concurrence of the following elements: (1) a reasonable private benefit plan is maintained by the employer; (2) the retiring official or employee has been in the service of the same employer for at least ten (10) years; (3) the retiring official or employee is not less than fifty (50) years of age at the time of his retirement; and (4) the benefit had been availed of only once.[43] Petitioner was qualified for disability retirement. At the time of such retirement, petitioner was only 41 years of age; and had been in the service for more or less eight (8) years. As such, the above provision is not applicable for failure to comply with the age and length of service requirements. Therefore, respondent cannot be faulted for deducting from petitioners total retirement benefits the amount of P362,386.87, for taxation purposes.
101 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 65. PEPSI COLA DISTRIBUTORS OF THE PHILIPPINES, INC., represented by its Plant General Manager ANTHONY B. SIAN, ELEAZAR LIMBAB, IRENEO BALTAZAR & JORGE HERAYA v. HON. LOLITA O. GAL-LANG, SALVADOR NOVILLA, ALEJANDRO OLIVA, WILFREDO CABAÑAS & FULGENCIO LEGO G.R. No. 89621 September 24, 1991 CRUZ, J.: DOCTRINE: Not every controversy involving workers and their employers can be resolved only by the labor arbiters. This will be so only if there is a "reasonable causal connection" between the claim asserted and employee-employer relations to put the case under the provisions of Article 217. Absent such a link, the complaint will be cognizable by the regular courts of justice in the exercise of their civil and criminal jurisdiction. FACTS: The private respondents were employees of the Pepsi who were suspected of complicity in the irregular disposition of empty Pepsi Cola bottles. Pepsi filed a criminal complaint for theft against them but this was later withdrawn and substituted with a criminal complaint for falsification of private documents. After a preliminary investigation, the complaint was dismissed. The dismissal was affirmed by the Office of the Provincial Prosecutor. Meantime, allegedly after an administrative investigation, the private respondents were dismissed by the petitioner company As a result, they lodged a complaint for illegal dismissal with NLRC in Tacloban City. NLRC RULING: mandated reinstatement with damages. In addition, they instituted in the Regional Trial Court of Leyte, a separate civil complaint against the petitioners for damages arising from what they claimed to be their malicious prosecution. Pepsi moved to dismiss the civil complaint on the ground that the trial court had no jurisdiction over the case because it involved employee-employer relations. RTC RULING: the respondent judge, acting on the motion for reconsideration, reinstated the complaint, saying it was "distinct from the labor case for damages now pending before the labor courts. Pepsi invoke Article 217 of the Labor Code and a number of decisions of this Court to support their position that the private respondents civil complaint for damages falls under the jurisdiction of the labor arbiter. ISSUE: Whether the RTC has jurisdiction over the case? SC RULING: YES. Not every controversy involving workers and their employers can be resolved only by the labor arbiters. This will be so only if there is a "reasonable causal connection" between the claim asserted and employee-employer relations to put the case under the provisions of Article 217. Absent such a link, the complaint will be cognizable by the regular courts of justice in the exercise of their civil and criminal jurisdiction. EXAMPLES OF CASES: 1.) In Medina v. Castro-Bartolome, 3 two employees filed in the Court of First Instance of Rizal a civil complaint for damages against their employer for slanderous remarks made against them by the company president. Theirs is a simple action for damages for tortious acts allegedly committed by the defendants. Such being the case, the governing statute is the Civil Code and not the Labor Code. It results that the orders under review are based on a wrong premise. 2.) In Singapore Airlines Ltd. v. Paño, 4 where the plaintiff was suing for damages for alleged violation by the defendant of an "Agreement for a Course of Conversion Training at the Expense of Singapore Airlines Limited. Petitioner seeks protection under the civil laws and claims no benefits under the Labor Code. The primary relief sought is for liquidated damages for breach of a contractual obligation. 3.) In Molave Sales, Inc. v. Laron, 6 the same Justice held for the Court that the claim of the plaintiff against its sales manager for payment of certain accounts pertaining to his purchase of vehicles and automotive parts, repairs of such vehicles, and cash advances from the corporation was properly cognizable by the Regional Trial Court because "although a controversy is between an employer and an employee, the Labor Arbiters have no jurisdiction if the Labor Code is not involved." 102 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 4.) The latest ruling on this issue is found in San Miguel Corporation v. NLRC. That case involved a claim of an employee for a P60,000.00 prize for a proposal made by him which he alleged had been accepted and implemented by the defendant corporation. Where the claim to the principal relief sought is to be resolved not by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the Labor Arbiter and the NLRC. While paragraph 3 above refers to "all money claims of workers," it is not necessary to suppose that the entire universe of money claims that might be asserted by workers against their employers has been absorbed into the original and exclusive jurisdiction of Labor Arbiters. The case now before the Court involves a complaint for damages for malicious prosecution which was filed with the Regional Trial Court of Leyte by the employees of the defendant company. It does not appear that there is a "reasonable causal connection" between the complaint and the relations of the parties as employer and employees. The complaint did not arise from such relations and in fact could have arisen independen tly of an employment relationship between the parties. No such relationship or any unfair labor practice is asserted. What the employees are alleging is that the petitioners acted with bad faith when they filed the criminal complaint which the Municipal Trial Court said was intended "to harass the poor employees" and the dismissal of which was affirmed by the Provincial Prosecutor "for lack of evidence to establish even a slightest probability that all the respondents herein have committed the crime imputed against them." This is a matter which the labor arbiter has no competence to resolve as the applicable law is not the Labor Code but the Revised Penal Code.
103 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 66. 7K CORPORATION v. EDDIE ALBARICO G.R. No. 182295 June 26, 2013 SERENO, CJ.: JURISDICTION OF THE VOLUNTARY ARBITRATOR DOCTRINES: A voluntary arbitrator may, by agreement of the parties, assume jurisdiction over any of the labor disputes enumerated under Article 223 of the Labor Code or those which could fall under the jurisdiction of the Labor Arbiter. He has plenary jurisdiction and authority to interpret an agreement to arbitrate and to determine the scope of his own authority when the said agreement is vague — subject only, in a proper case, to the certiorari jurisdiction of this Court. In deciding a case, the voluntary arbitrator may award backwages upon a finding of illegal dismissal, even though the issue of entitlement thereto is not explicitly claimed in the Submission Agreement. Backwages, in general, are awarded on the ground of equity as a form of relief that restores the income lost by the terminated employee by reason of his illegal dismissal. Aside from illegal dismissal cases, separation pay may also be awarded in the following instances: a. when employees have been terminated for authorized causes, such as redundancy, retrenchment or installation of labor-saving devices; b. when employees have been terminated for a just cause other than serious misconduct or an act reflecting on moral character and social justice calls for the awarding of separation pay; c. when it has become an established practice of the company to pay the said benefit to voluntarily resigning employees; or d. when an employee has been validly dismissed for non-membership in a union as required in a closedshop agreement FACTS: When he was dismissed on 5 April 1993, Albarico was a regular employee of 7K Corporation, a company selling water purifiers. He started working for the company in 1990 as a salesman. Because of his good performance, his employment was regularized. He was also promoted several times: from salesman, he was promoted to senior sales representative and then to acting team field supervisor. In 1992, he was awarded the President’s Trophy for being one of the company’s top water purifier specialist distributors. In April of 1993, the chief operating officer of 7K Corporation terminated Albarico’s employment allegedly for his poor sales performance. Albarico had to stop reporting for work, and he subsequently submitted his money claims against 7K Corporation for arbitration before the National Conciliation and Mediation Board (NCMB). The issue for voluntary arbitration before the NCMB, according to the parties’ Submission Agreement was whether Albarico was entitled to the payment of separation pay and the sales commission reserved for him by the corporation. As for its defense, 7K Corporation claimed Albarico had voluntarily stopped reporting for work after receiving a verbal reprimand for his sales performance; hence, it was he who was guilty of abandonment of employment While the case was pending before the NCMB, Albarico filed a complaint for illegal dismissal before the LA. The latter ruled in favor of Albarico. However, the NLRC, on appeal, vacated the decision of the LA on the ground of forum-shopping, without prejudice to the pending NCMB arbitration case. The decision of the NLRC became final. NCMB RULING: Albarico was ILLEGALLY DISMISSED The arbitrator explained that the promotions, increases in salary, and awards received by respondent belied the claim that the latter was performing poorly. It was also found that Albarico could not have abandoned his job, as the abandonment should have been clearly shown. The VA also found that Albarico was dismissed from his work without due process. However, it was found that reinstatement was no longer possible because of the strained relationship of the parties. Thus, in lieu of reinstatement, the VA ordered 7K Corporation to pay separation pay for two years at P4,456 for each year, or a total amount of P8,912. The VA also ordered 7K Corporation to pay backwages in the amount of P90,804.19, plus attorney’s fees since Albarico had been compelled to file an action for illegal dismissal. 104 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 7K Corporation appealed to the CA, imputing grave abuse of discretion on the part of VA for ruling on the issue of illegal dismissal and for awarding payment of backwages and attorney’s fees. 7K Corporation contended that the issue of the legality of dismissal was not explicitly included in the Submission Agreement. CA RULING: AFFIRMED VA; Deleted Attorney’s Fees for lack of factual basis. ISSUE: Did the VA properly assume jurisdiction to decide the issue of the legality of the dismissal of Albarico as well as the latter’s entitlement to backwages? SC RULING: YES. The circumstances of the instant case lead to no other conclusion than that the claim of Albarico for separation pay was premised on his allegation of illegal dismissal. Thus, the VA properly assumed jurisdiction over the issue of the legality of his dismissal Moreover, it should be noted that even the NLRC was of the understanding that the NCMB arbitration case sought to resolve the issue of the legality of the dismissal of the Albarico. In fact, the identity of the issue of the legality of his dismissal, which was previously submitted to the NCMB, and later submitted to the NLRC, was the basis of the latter’s finding of forum shopping and the consequent dismissal of the case before it. In fact, 7K Corporation also implicitly acknowledged this when it filed before the NLRC its Motion to Dismiss Albarico’s Complaint on the ground of forum shopping. Thus, it is now estopped from claiming that the issue before the NCMB does not include the issue of the legality of the dismissal of respondent. Besides, there has to be a reason for deciding the issue of respondent’s entitlement to separation pay. To think otherwise would lead to absurdity, because the voluntary arbitrator would then be deciding that issue in a vacuum. The arbitrator would have no basis whatsoever for saying that Albarico was entitled to separation pay or not if the issue of the legality of Albarico’s dismissal was not resolve first.
105 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 67. VIRGILIO KAWACHI, et al. v. DOMINIE DEL QUERO GR No. 163768 March 27, 2007 TINGA, J.: LA STILL HAS JURISDICTION OVER CLAIMS FOR DAMAGES ARISING FROM INCIDENTS WITH REASONABLE CAUSAL CONNECTION WITH EMPLOYEE-EMPLOYER RELATIONSHIP FACTS: Kawachi hired Del Quero as a clerk of A/J Raymundo Pawnshop, Inc. On August 10, 2002, Kawachi scolded Del Quero in front of many people about the way she treated the customers of the pawnshop and afterwards terminated Del Quero from employment without affording her due process. Del Quero charged Virgilio Kawachi, Julius Kawachi and A/J Raymundo Pawnshop, Inc., with illegal dismissal, non-execution of a contract of employment, violation of minimum wage law, and non-payment of overtime pay. A few months after, Del Quero filed an action for damages against Virgilio and Julius Kawachi before the MeTC of Quezon City. Del Quero claimed that the August 10, 2002 incident had caused her to suffer serious embarrassment and shame so that she could not do anything but cry because of the shameless way by which she was terminated from the service. The Kawachis then moved for the dismissal of the complaint on the grounds of lack of jurisdiction and forumshopping or splitting causes of action. MeTC RULING: DENIED the Motion for Dismissal It ruled that no causal connection appeared between Del Quero’s cause of action and the employer-employee relations between the parties. The Kawachis filed a petition for certiorari. RTC RULING: AFFIRMED the MeTC It upheld the jurisdiction of the MeTC over Del Quero’s complaint for damages. The employees’ action for damages based on slanderous remarks uttered by the employer was within the regular courts jurisdiction since the complaint did not allege any unfair labor practice on the part of the employer. ISSUE: Do the regular courts have jurisdiction over the claim for damages? SC RULING: NO. The NLRC has jurisdiction over Del Quero’s complaint for illegal dismissal and damages arising therefrom. She cannot be allowed to file separate or independent civil action for damages where the alleged injury has a reasonable connection to her termination from employment. Consequently, the action for damages filed before the MeTC must be dismissed. Jurisprudence has developed the reasonable causal connection rule. Under this rule, if there is a reasonable causal connection between the claim asserted and the employer-employee relations, then the case is within the jurisdiction of the labor courts; in the absence of such nexus, it is the regular courts that have jurisdiction. In the instant case, the allegations of Del Quero in her complaint for damages show that her injury was the offshoot o f Kawachi’s immediate harsh reaction as her administrative superior to the supposedly sloppy manner by which she had discharged her duties. The allegations in Del Quero’s complaint unmistakably relate to the manner of her alleged illegal dismissal. The Court further notes that for a single cause of action, the dismissed employee cannot be allowed to sue in two forums: one, before the labor arbiter for reinstatement and recovery of back wages; and two, before a court of justice for recovery of damages. Suing in the manner described is known as splitting a cause of action, a practice engendering multiplicity of actions.
106 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 68. GILDA G. LUNZAGA v. ALBAR SHIPPING AND TRADING CORP. AND/OR AKIRA KATO, AND DARWIN, VENUS, ROMEO ULYSSES, MARIKIT ODESSA, ALL SURNAMED LUNZAGA (Lunzaga Siblings) G.R. No. 200476 April 18, 2012 RELAXATION OF THE TECHNICAL RULES (1-DAY LATE IN FILING AN APPEAL) DOCTRINE: It has been said this time and again that the perfection of an appeal within the period fixed by the rules is mandatory and jurisdictional. But, it is always in the power of this Court to suspend its own rules, or to except a particular case from its operation, whenever the purposes of justice require it. Strong compelling reasons such as serving the ends of justice and preventing a grave miscarriage thereof warrant the suspension of the rules. FACTS: Romeo Lunzaga was a seaman working for Albar Shipping. On June 11, 2008, Romeo was assigned as Chief Engineer on board Albar's Philippine vessel MV Lake Aru. One month later, Romeo suffered a heart attack and was repatriated to the Philippines only to die on September 5, 2008. Sometime in early 2009, Gilda, claiming to be the surviving spouse of Romeo, filed with the NLRC a complaint against Albar Shipping for payment of death benefits, damages and attorney's fees. It should be noted that Gilda was the designated heir in Romeo's Overseas Filipino Worker Verification Sheet and PhilHealth Information Sheet. The Lunzaga sibling, children of Romeo from his first marriage that was judicially declared null and void, opposed the complaint through a complaint-in-intervention. The Lunzaga siblings claimed that Gilda is not entitled to the death benefits of Romeo, as she had a subsisting marriage when she married him. They claim that her marriage with Romeo was, therefore, bigamous. . During the mandatory conferences of the parties before the Labor Arbiter, Albar Shipping signified its willingness to pay Romeo's death benefits in the amount of USD 55,547.44. However, Gilda and the Lunzaga siblings could not agree as to the sharing of the benefits. LA RULING: The Labor Arbiter issued an Order temporarily dismissing the complaint and directing the parties to file their case with the regular courts. Gilda appealed to the NLRC, however, the same was made one day past the 10-day period for filing an appeal from the decision of the Labor Arbiter NLRC RULING: DISMISSED for filing beyond the regalamentary period. CA RULING: AFFIRMED the decision of the NLRC The CA ruled that despite the fact that the appeal to the NLRC was filed only one day beyond the reglementary period, Gilda failed to present any reason for the liberal application of the rule on filing of appeals. ISSUE: Did the NLRC and the CA err in not giving due course to the appeal due to a one (1)-day delay of its filing? SC RULING: YES. Considering that the issue on whether the heirs of Romeo are entitled to receive his death benefits from Albar Shipping properly falls under the jurisdiction of the LA, the NLRC and the CA should have had relaxed the rigid application of the rules of procedure to afford the parties the opportunity to fully ventilate their cases on the merits. This is in line with the time honored principle that cases should be decided only after giving all parties the chance to argue their causes and defenses. Technicality and procedural imperfections should thus not serve as bases of decisions. In that way, the ends of justice would be better served. For indeed, the general objective of procedure is to facilitate the application of justice to the rival claims of contending parties, bearing always in mind that procedure is not to hinder but to promote the administration of justice. Verily, Albar Shipping is liable to the heirs of Romeo for the amount of USD 55,547.44. Albar hereby is ordered to deposit this amount in an escrow account under the control of the NLRC in order to protect the interests of Romeo's heirs. The parties claiming to be the beneficiaries of Romeo are directed to file the appropriate action with a trial court. 107 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 69. AMECOS INNOVATIONS, INC. and ANTONIO F. MATEO v. ELIZA R. LOPEZ G.R. No.178055 July 2, 2014 LA HAS JURISDICTION OVER CASES INVOLVING REIMBURSEMENT OF SSS CONTRIBUTION FACTS: Amecos is a corporation engaged in the business of selling assorted products. In 2003, a complaint was filed by the SSS against Amecos for an alleged delinquency in the remittance of SSS contributions and penalty liabilities in violation of Section 22(a) and 22(d) in relation to Section 28(e) of the SSS law, as amended. By way of explanation, Amecos claimed that it hired Lopez as Marketing Assistant to promote its products; that upon hiring, Lopez refused to provide Amecos with her SSS Number and to be deducted her contributions; that on the basis of the foregoing, Amecos no longer enrolled Lopez with the SSS and did not deduct her corresponding contributions up to the time of her termination in February 2002. Amecos eventually settled its obligations with the SSS; consequently, SSS filed a Motion to Withdraw Complaint, which was approved by the Office of the City Prosecutor. Thereafter, Amecos sent a demand letter to Lopez for P27,791.65 representing her share in the SSS contributions and expenses for processing, but to no avail. Thus, Amecos filed a complaint for sum of money and damages against Lopez before the MeTC. Lopez filed her Answer with Motion to Dismiss claiming, among others, that the regular courts do not have jurisdiction over the instant case as it arose out of their employer-employee relationship. MeTC RULING: DISMISSED for lack of jurisdiction RTC RULING: AFFIRMED the MeTC CA RULING: AFFIRMED the RTC ISSUE: Does the LA have jurisdiction over cases involving the reimbursement of SSS contribution paid by the Amecos in behalf of Lopez? SC RULING: YES. The LA has original and exclusive jurisdiction over the matter, since the same necessarily flowed from the employer-employee relationship between Amecos and Lopez. In this connection, it is noteworthy to state that "the Labor Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed by the Civil Code." At the same time, it cannot be assumed that since the dispute concerns the payment of SSS premiums, Amecos’ claim should be referred to the Social Security Commission (SSC). As far as SSS is concerned, there is no longer a dispute with respect to Amecos’ accountability to the System; Amecos already settled their pecuniary obligations to it. Since there is no longer any dispute regarding coverage, benefits, contributions and penalties to speak of, the SSC need not be unnecessarily dragged into the picture. Besides, it cannot be made to act as a collecting agency for petitioners’ claims against the respondent; the Social Security Law should not be so interpreted, lest the SSC be swamped with cases of this sort. At any rate, the complaint shall be dismissed for lack of cause of action. Since Amecos did not remit the full SSS contributions of Lopez, the latter was never covered by and protected under the System. If she was never covered by the System, certainly there is no sense in making her answerable for the required contributions during the period of her employment. And it follows as a matter of consequence that claims for other damages founded on the foregoing non-existent cause of action should likewise fail.
108 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 70. PHILIPPINE AIRLINES, INC. v NLRC, FERDINAND PINEDA and GOGFREDO CABLING G.R. No. 120567 March 20, 1998 MARTINEZ, J.: INJUNCTION CAN ONLY BE AN ANCILLARY WRIT IN ORDINARY LABOR DISPUTES. DOCTRINES: The power of the NLRC to issue an injunctive writ originates from “any labor dispute” upon the application by a party thereof, which application if not granted “may cause grave and irreparable damage to any party or render ineffectual any decision in favor of such party”. The term “labor dispute” is defined as “any controversy or matter concerning terms and conditions of employment x x x x”. The term “controversy” is likewise defined as “a litigated question or a justiciable controversy”. A “justiciable controversy” is “one involving an active antagonistic assertion of a legal right on one side and a denial thereof on the other concerning a real, and not a mere theoretical question or issue”. Given the definitions, it is thus essential that there must be a labor dispute between the contending parties before the LA to enable the NLRC issue a injunction writ. FACTS: Pineda and Cabling were flight stewards of PAL. Both were dismissed from service for their alleged smuggling in Hong Kong of a bag said to contain some PHP2.5 Million in cash. Instead of filing a case for illegal dismissal, Pineda and Cabling filed a Petition for Injunction, with a prayer for the issuance of TRO, against PAL before the NLRC, seeking to prohibit PAL from enforcing their Order of Dismissal against them and to ultimately reinstate them upon a favorable decision. NLRC RULING: TRO GRANTED The NLRC adopted the view that Pineda and Cabling have been illegally dismissed, for the reason that PAL’s Code of Discipline was formulated without the participation of its employees. The baseless dismissal has caused Pineda and Cabling “grave and irreparable injury with no speedy and adequate remedy at law”. PAL filed the present petition for certiorari. ISSUE: Can the NLRC issue an injunctive writ even without a complaint for illegal dismissal before the LA? SC RULING: NO. The power of the NLRC to issue an injunctive writ originates from “any labor dispute”, which means that there must be an existing controversy or a litigated question before it can issue the same. Since there is no labor dispute between the parties as there has yet been no complaint for illegal dismissal filed before the labor arbiter by Pineda and Cabling against PAL, the NLRC cannot, therefore, issue the assailed Order. Contrary to the findings of the NLRC, there is no grave and irreparable damage in this case because Pineda and Cabling can be adequately compensated if they are indeed illegally dismissed. It cannot be also said that there is no adequate remedy because Pineda and Cabling can still file a complaint for illegal dismissal with the LA. It should also be noted that the Petition for Injunction filed before the NLRC is really in the nature of an action for illegal dismissal. As such, it falls under the original and exclusive jurisdiction of the LA. The NLRC cannot therefore entertain the petition since it only exercises appellate jurisdiction over illegal dismissal cases.
109 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 71. LAND BANK OF THE PHILIPPINES v. SEVERINO LISTANA, SR. G.R. No. 152611 August 5, 2003 YNARES-SANTIAGO, J.: CONTEMPT POWERS OF QUASI-JUDICIAL AGENCIES DOCTRINE: Evidently, quasi-judicial agencies that have the power to cite persons for indirect contempt pursuant to Rule 71 of the Rules of Court can only do so by initiating them in the proper Regional Trial Court. It is not within their jurisdiction and competence to decide the indirect contempt cases. These matters are still within the province of the Regional Trial Courts. FACTS: Respondent Severino Listana is the owner of a parcel of land containing an area of 246.0561 hectares, located in Inlagadian, Casiguran, Sorsogon. He voluntarily offered to sell the said land to the government, through the Department of Agrarian Reform (DAR), under Section 20 of R.A. 6657, also known as the Comprehensive Agrarian Reform Law of 1988 (CARL). The DAR valued the property at P5,871,689.03, which was however rejected by the respondent. Hence, the Department of Agrarian Reform Adjudication Board (DARAB) of Sorsogon commenced summary administrative proceedings to determine the just compensation of the land. The DARAB rendered a Decision, setting aside the prior valuation made by the Land Bank and made a new valuation in the amount of P10,956,963.25 for the acquired area of 240.9066 hectares. A Writ of Execution was issued by the PARAD directing the manager of Land Bank to pay the respondent the aforesaid amount as just compensation in the manner provided by law. Respondent filed a Motion for Contempt with the PARAD, alleging that petitioner Land Bank failed to comply with the Writ of Execution. He argued that such failure of the petitioner to comply with the writ of execution constitutes contempt of the DARAB. The PARAD issued an Order granting the Motion for Contempt and issued an arrest order against petitioner’s Manager Alex A. Lorayes. ISSUE: Is the order for the arrest of petitioner’s manager, Mr. Alex Lorayes, by the PARAD, valid? SC RULING: NO. Rule 71, Section 12 of the 1997 Rules of Civil Procedure, referring to indirect contempt against quasi-judicial entities, provides: Sec. 12. Contempt against quasi-judicial entities. Unless otherwise provided by law, this Rule shall apply to contempt committed against persons, entities, bodies or agencies exercising quasi-judicial functions, or shall have suppletory effect to such rules as they may have adopted pursuant to authority granted to them by law to punish for contempt. The Regional Trial Court of the place wherein the contempt has been committed shall have jurisdiction over such charges as may be filed therefore. Evidently, quasi-judicial agencies that have the power to cite persons for indirect contempt pursuant to Rule 71 of the Rules of Court can only do so by initiating them in the proper Regional Trial Court. It is not within their jurisdiction and competence to decide the indirect contempt cases. These matters are still within the province of the Regional Trial Courts. In the present case, the indirect contempt charge was filed, not with the Regional Trial Court, but with the PARAD, and it was the PARAD that cited Mr. Lorayes with indirect contempt. Hence, the contempt proceedings initiated through an unverified Motion for Contempt filed by the respondent with the PARAD were invalid for the following reasons: First, the Rules of Court clearly require the filing of a verified petition with the Regional Trial Court, which was not complied with in this case. The charge was not initiated by the PARAD motu proprio; rather, it was by a motion filed by respondent. Second, neither the PARAD nor the DARAB have jurisdiction to decide the contempt charge filed by the respondent. The issuance of a warrant of arrest was beyond the power of the PARAD and the DARAB. Consequently, all the proceedings that stemmed from respondents Motion for Contempt, specifically the Orders of the PARAD dated August 20, 2000 and January 3, 2001 for the arrest of Alex A. Lorayes, are null and void.
110 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 72. FEDERICO S. ROBOSA, et. al. v. NATIONAL LABOR RELATIONS COMMISSION G.R. No. 176085 February 8, 2012 BRION, J.: CONTEMPT POWERS OF THE NLRC DOCTRINE: Under Article 218(d) of the Labor Code, the labor arbiter or the Commission is empowered or has jurisdiction to hold the offending party or parties in direct or indirect contempt. FACTS: Petitioners were rank-and-file employees of respondent Chemo-Technische Manufacturing, Inc. (CTMI), the manufacturer and distributor of Wella products. They were officers and members of the CTMI Employees UnionDFA (union). Sometime in the first semester of 1991, the union filed a petition for certification election at CTMI. On July 15, 1991, CTMI issued two memoranda, which were considered as union busting acts constituting unfair labor practice by the union. Thus, the union asked for the withdrawal and deferment of CTMIs directives. CTMI ignored the request. Instead, it issued on July 23, 1991 a notice of termination of employment to the sales drivers, due to the abolition of the sales driver positions. The union and its affected members filed a complaint for illegal dismissal and unfair labor practice, with a claim for damages, against private respondents CTMI, De Luzuriaga and other CTMI officers. The union also moved for the issuance of a writ of preliminary injunction and/or temporary restraining order. The NLRC issued a TRO, directing CTMI, De Luzuriaga and other company executives to cease and desist from dismissing any member of the union and from implementing the July 23, 1991 memorandum terminating the services of the sales drivers, and to immediately reinstate them if the dismissals have been effected. Allegedly, the respondents did not comply with the NLRCs August 23, 1991 resolution. They instead moved to dissolve the TRO and opposed the unions petition for preliminary injunction. The NLRC upgraded the TRO to a writ of preliminary injunction. The respondents moved for reconsideration. The union opposed the motion and urgently moved to cite the responsible CTMI officers in contempt of court. Private respondent De Luzuriaga argued that they were charged with indirect contempt which may be initiated only in the appropriate regional trial court, pursuant to Section 12, Rule 71 of the Rules of Court. He posits that the NLRC has no jurisdiction over an indirect contempt charge. He thus argues that the petitioners improperly brought the contempt charge before the NLRC. ISSUE: Does the NLRC (and labor arbiters) have contempt powers? SC RULING: YES. Under Article 218 of the Labor Code, the NLRC (and the labor arbiters) may hold any offending party in contempt, directly or indirectly, and impose appropriate penalties in accordance with law. The penalty for direct contempt consists of either imprisonment or fine, the degree or amount depends on whether the contempt is against the Commission or the labor arbiter. The Labor Code, however, requires the labor arbiter or the Commission to deal with indirect contempt in the manner prescribed under Rule 71 of the Rules of Court. Rule 71 of the Rules of Court does not require the labor arbiter or the NLRC to initiate indirect contempt proceedings before the trial court. This mode is to be observed only when there is no law granting them contempt powers. As is clear under Article 218(d) of the Labor Code, the labor arbiter or the Commission is empowered or has jurisdiction to hold the offending party or parties in direct or indirect contempt. The petitioners, therefore, have not improperly brought the indirect contempt charges against the respondents before the NLRC.
111 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 73. MANILA ELECTRIC COMPANY v. JAN CARLO GALA, G.R. Nos. 191288 & 191304 March 7, 2012 BRION, J.: TECHNICAL RULES NOT BINDING IN LABOR CASES DOCTRINE: It is the spirit and intention of labor legislation that the NLRC and the labor arbiters shall use every reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, provided due process is duly observed. FACTS: On March 2, 2006, respondent Jan Carlo Gala commenced employment with the petitioner Meralco Electric Company (Meralco) as a probationary lineman. On July 27, 2006, barely four months on the job, Gala was dismissed for alleged complicity in pilferages of Meralcos electrical supplies, particularly, for the incident which took place on May 25, 2006. On that day, Gala and other Meralco workers were instructed to replace a worn-out electrical pole at the Pacheco Subdivision in Valenzuela City. While the Meralco crew was at work, one Noberto Bing Llanes, a non-Meralco employee, arrived. He appeared to be known to the Meralco foremen as they were seen conversing with him. Llanes boarded the trucks, without being stopped, and took out what were later found as electrical supplies. Aside from Gala, the foremen and the other linemen who were at the worksite when the pilferage happened were later charged with misconduct and dishonesty for their involvement in the incident. Unknown to Gala and the rest of the crew, a Meralco surveillance task force was monitoring their activities and recording everything with a Sony video camera. Meralco called for an investigation of the incident and asked Gala to explain. Gala denied involvement in the pilferage, contending that even if his superiors might have committed a wrongdoing, he had no participation in what they did. Despite Galas explanation, Meralco proceeded with the investigation and eventually terminated his employment on July 27, 2006. Gala responded by filing an illegal dismissal complaint against Meralco. LA RULING: dismissed the complaint for lack of merit NLRC RULING: reversed the labor arbiters ruling. It found that Gala had been illegally dismissed. CA RULING: concurred with the NLRC that Gala had been illegally dismissed ISSUES: 1. Should the Court dismiss the petition outright based on procedural grounds? 2. Was Gala illegally dismissed by petitioner Meralco? SC RULING: 1. NO. Gala would want the petition to be dismissed outright on procedural grounds, claiming that the Verification and Certification, Secretarys Certificate and Affidavit of Service accompanying the petition do not contain the details of the Community Tax Certificates of the affiants, and that the lawyers who signed the petition failed to indicate their updated MCLE certificate numbers, in violation of existing rules. We stress at this point that it is the spirit and intention of labor legislation that the NLRC and the labor arbiters shall use every reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, provided due process is duly observed. In keeping with this policy and in the interest of substantial justice, we deem it proper to give due course to the petition, especially in view of the conflict between the findings of the labor arbiter, on the one hand, and the NLRC and the CA, on the other. As we said in S.S. Ventures International, Inc. v. S.S. Ventures Labor Union, the application of technical rules of procedure in labor cases may be relaxed to serve the demands of substantial justice. 2. NO. Contrary to the conclusions of the CA and the NLRC, there is substantial evidence supporting Meralcos position that Gala had become unfit to continue his employment with the company. Gala was found, after an administrative investigation, to have failed to meet the standards expected of him to become a regular employee and this failure was mainly due to his undeniable knowledge, if not participation, in the pilferage activities done by their group, all to the prejudice of the Company’s interests. 112 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 74. NATIONWIDE SECURITY ANDALLIED SERVICES, INC. v. COURT OF APPEALS G.R. No. 155844 July 14, 2008 QUISUMBING, J.: REGLEMENTARY PERIOD FOR APPEAL MUST BE STRICTLY FOLLOWED DOCTRINE: The right to appeal is a statutory right and one who seeks to avail of the right must comply with the statute or the rules. The rules, particularly the requirements for perfecting an appeal within the reglementary period specified in the law, must be strictly followed as they are considered indispensable interdictions against needless delays and for the orderly discharge of judicial business. It is only in highly meritorious cases that this Court will opt not to strictly apply the rules and thus prevent a grave injustice from being done. FACTS: Labor Arbiter Manuel M. Manansala found petitioner Nationwide Security and Allied Services, Inc., a security agency, not liable for illegal dismissal in NLRC NCR 00-01-00833-96 and 00-02-01129-96 involving eight security guards who were employees of the petitioner. However, the Labor Arbiter directed the petitioner to pay the aforementioned security guards P81,750.00 in separation pay, P8,700.00 in unpaid salaries, P93,795.68 for underpayment and 10% attorneys fees based on the total monetary award. Dissatisfied with the decision, petitioner appealed to the NLRC which dismissed its appeal for two reasons first, for having been filed beyond the reglementary period within which to perfect the appeal and second, for filing an insufficient appeal bond. Petitioner then appealed to the Court of Appeals to have the appeal resolved on the merits rather than on pure technicalities in the interest of due process. The Court of Appeals dismissed the case, holding that in a special action for certiorari, the burden is on petitioner to prove not merely reversible error, but grave abuse of discretion amounting to lack of or excess of jurisdiction on the part of public respondent NLRC. ISSUE: Should technicalities in labor cases prevail over the spirit and intention of the Labor Code? SC RULING: After considering all the circumstances in this case and the submission by the parties, we are in agreement that the petition lacks merit. There being a remedy of appeal via petition for review under Rule 45 of the Rules of Court available to the petitioner, the filing of a petition for certiorari under Rule 65 is improper. But even if we bend our Rules to allow the present petition for certiorari, still it will not prosper because we do not find any grave abuse of discretion amounting to lack of or excess of jurisdiction on the part of the Court of Appeals when it dismissed the petition of the security agency. The assailed decision by the Court of Appeals was certainly not capricious nor arbitrary, nor was it a whimsical exercise of judgment amounting to a lack of jurisdiction. The appeal to the NLRC should have been perfected, as provided by its Rules, within a period of 10 days from receipt by petitioner of the decision on July 16, 1999. Clearly, the filing of the appeal--three days after July 26, 1999--was already beyond the reglementary period and in violation of the NLRC Rules and the pertinent Article on Appeal in the Labor Code. Failure to perfect an appeal renders the decision final and executory. The right to appeal is a statutory right and one who seeks to avail of the right must comply with the statute or the rules. The rules, particularly the requirements for perfecting an appeal within the reglementary period specified in the law, must be strictly followed as they are considered indispensable interdictions against needless delays and for the orderly discharge of judicial business. It is only in highly meritorious cases that this Court will opt not to strictly apply the rules and thus prevent a grave injustice from being done. The exception does not obtain here. Thus, we are in agreement that the decision of the Labor Arbiter already became final and executory because petitioner failed to file the appeal within 10 calendar days from receipt of the decision. Clearly, the NLRC committed no grave abuse of discretion in dismissing the appeal before it. It follows that the Court of Appeals, too, did not err, nor gravely abuse its discretion, in sustaining the NLRC Order, by dismissing the petition for certiorari before it. 113 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 75. DIAMOND TAXI and/or BRYAN ONG v. FELIPE LLAMAS, JR. G.R. No. 190724 March 12, 2014 BRION, J.: EMPLOYEE’S APPEAL MUST NOT BE DISMISSED ON PURELY TECHINCAL GROUNDS DOCTRINE: The dismissal of an employee’s appeal on purely technical ground is inconsistent with the constitutional mandate on protection to labor. Under the Constitution and the Labor Code, the State is bound to protect labor and assure the rights of workers to security of tenure – tenurial security being a preferred constitutional right that, under these fundamental guidelines, technical infirmities in labor pleadings cannot defeat. FACTS: Felipe Llamas worked as a taxi driver for petitioner Diamond Taxi, owned and operated by petitioner Bryan Ong. Llamas filed before the Labor Arbiter (LA) a complaint for illegal dismissal against the petitioners. In their position paper, the petitioners denied dismissing Llamas. They claimed that Llamas had been absent without official leave for several days, and submitted a copy of the attendance logbook as proof. They also pointed out that Llamas committed several traffic violations amounting and several acts of insubordination and refusal to heed management instructions. They argued that these acts – traffic violations, insubordination and refusal to heed management instructions – constitute grounds for the termination of Llamas’ employment. Llamas failed to seasonably file his position paper. On November 29, 2005, the LA rendered a decision dismissing Llamas’ complaint for lack of merit. Llamas received a copy of this LA decision on January 5, 2006. Meanwhile, he filed his position paper on December 20, 2005. Llamas claimed that his failure to file his position paper was due to the refusal of his previous counsel to comply. He also alleged that he had a misunderstanding with Aljuver Ong, Bryan’s brother and operations manager of Diamond Taxi, and the incident led to his forced resignation. Llamas filed a motion for reconsideration before the LA. The LA treated Llamas’ motion as an appeal per Section 15, Rule V of the 2005 Revised Rules of Procedure of the NLRC (2005 NLRC Rules) (the governing NLRC Rules of Procedure at the time Llamas filed his complaint before the LA). NLRC RULING: The NLRC dismissed for non-perfection Llamas’ motion for reconsideration treated as an appeal. The NLRC pointed out that Llamas failed to attach the required certification of non-forum shopping per Section 4, Rule VI of the 2005 NLRC Rules. CA RULING: The CA reversed and set aside the assailed NLRC resolution. Citing jurisprudence, the CA pointed out that non-compliance with the requirement on the filing of a certificate of non-forum shopping, while mandatory, may nonetheless be excused upon showing of manifest equitable grounds proving substantial compliance. ISSUE: Did the NLRC committed grave abuse of discretion in dismissing Llamas’ appeal on mere technicality? SC RULING: YES. Article 223 (now Article 229) of the Labor Code states that decisions (or awards or orders) of the LA shall become final and executory unless appealed to the NLRC within ten (10) calendar days from receipt of the decision. Consistent with Article 223, Section 1, Rule VI of the 2005 NLRC Rules also provides for a ten (10)-day period for appealing the LA’s decision. Under Section 4(a), Rule VI of the 2005 NLRC Rules, the appeal shall be in the form of a verified memorandum of appeal and accompanied by proof of payment of the appeal fee, posting of cash or surety bond (when necessary), certificate of non-forum shopping, and proof of service upon the other parties. Failure of the appealing party to comply with any or all of these requisites within the reglementary period will render the LA’s decision final and executory. Indisputably, Llamas did not file a memorandum of appeal from the LA’s decision. Instead, he filed, within the ten (10)-day appeal period, a motion for reconsideration. Under Section 15, Rule V of the 2005 NLRC Rules, motions for reconsideration from the LA’s decision are not allowed; they may, however, be treated as an appeal provided they comply with the requirements for perfecting an appeal. The NLRC dismissed Llamas’ motion for reconsideration treated as an appeal for failure to attach the required certificate of non-forum shopping per Section 4(a), Rule VI of the 2005 NLRC Rules. 114 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS The requirement for a sworn certification of non-forum shopping was prescribed by the Court under Revised Circular 28-91, as amended by Administrative Circular No. 04-94, to prohibit and penalize the evils of forum shopping. Revised Circular 28-91, as amended by Administrative Circular No. 04-94, requires a sworn certificate of non-forum shopping to be filed with every petition, complaint, application or other initiatory pleading filed before the Court, the CA, or the different divisions thereof, or any other court, tribunal or agency. Ordinarily, the infirmity in Llamas’ appeal would have been fatal and would have justified an end to the case. A careful consideration of the circumstances of the case, however, convinces us that the NLRC should, indeed, have given due course to Llamas’ appeal despite the initial absence of the required certificate. We note that in his motion for reconsideration of the NLRC’s May 30, 2006 resolution, Llamas attached the required certificate of nonforum shopping. Under Article 221 (now Article 227) of the Labor Code, "the Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process." Consistently, we have emphasized that "rules of procedure are mere tools designed to facilitate the attainment of justice. A strict and rigid application which would result in technicalities that tend to frustrate rather than promote substantial justice should not be allowed x x x. No procedural rule is sacrosanct if such shall result in subverting justice." Ultimately, what should guide judicial action is that a party is given the fullest opportunity to establish the merits of his action or defense rather than for him to lose life, honor, or property on mere technicalities.
115 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 76. SARA LEE PHILIPPINES, INC. v. EMILINDA D. MACATLANG, ET AL. G.R. No. 180147 January 14, 2015 PEREZ, J.: APPEAL BOND; JUDICIAL COURTESY; COMPROMISE AGREEMENT DOCTRINE: The NLRC retains its authority and duty to resolve the motion and determine the final amount of bond that shall be posted by the appellant, still in accordance with the standards of "meritorious grounds" and "reasonable amount." Should the NLRC, after considering the motion’s merit, determine that a greater amount or the full amount of the bond needs to be posted by the appellant, then the party shall comply accordingly. The appellant shall be given a period of 10 days from notice of the NLRC order within which to perfect the appeal by posting the required appeal bond. FACTS: On Oct. 9, 1995, Aris Philippines, Inc. permanently ceased operations displacing 5,984 rank-and-file employees. On Oct. 26, 1996, Fashion Accessories Phils., Inc. (FAPI) was incorporated prompting former Aris employees to file a case for illegal dismissal alleging that FAPI was a continuing business of Aris. Sara Lee Corporation (SLC), Sara Lee Philippines (SLP), and Atty. Cesar C. Cruz were impleaded as defendants being major stockholders of FAPI and officers of Aris, respectively. LA RULING: On Oct. 30, 2004, the LA found the dismissal of 5,984 Aris employees illegal and awarded them monetary benefits amounting to P3,453,664,710.86 as separation pay, backwages, moral and exemplary damages, and attorney’s fees. The Corporations filed a Notice of Appeal with Motion to Reduce Appeal Bond posting a P4.5 million bond. NLRC RULING: The NLRC granted the reduction of the appeal bond and ordered the Corporations to post an additional P4.5 million bond. The Aris employees, represented by Emilinda Macatlang, filed a petition for review before the CA insisting that the appeal was not perfected due to failure of the Corporations to post the correct amount of the bond which is equivalent to the judgment award. Nonetheless, the NLRC prematurely issued an order setting aside the LA’s decision for being procedurally infirmed. CA RULING: On March 26, 2007, the CA ordered the Corporations to post an additional appeal bond of P1 billion. SC RULING: On June 4, 2014, the SC ordered the Corporations to post P725 million, in case or surety bond and vacated the NLRC decision for being premature and directed the same to act with dispatch to resolve the merits of the case upon perfection of the appeal. Hence, this MR where the Corporations, relying on McBurnie v. Ganzon, argued that only 10% of the monetary award is required to be posted as bond. Furthermore, the Corporations filed a Motion to Admit Confession of Judgment claiming that the Corporations entered into as compromise with some of the former Aris employees. ISSUES: 1. Is the 10% bond requirement applicable in this case? 2. Was the ruling of the NLRC premature? 3. Should the motion to admit confession of judgment be approved? SC RULING: (1) No. The 10% requirement pertains to the reasonable amount which the NLRC would accept as the minimum of the bond that should accompany the motion to reduce bond in order to suspend the period to perfect an appeal under the NLRC rules. The 10% is based on the judgment award and should in no case be construed as the minimum amount of bond to be posted in order to perfect appeal. 116 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS The NLRC retains its authority and duty to resolve the motion and determine the final amount of bond that shall be posted by the appellant, still in accordance with the standards of "meritorious grounds" and "reasonable amount." Should the NLRC, after considering the motion’s merit, determine that a greater amount or the full amount of the bond needs to be posted by the appellant, then the party shall comply accordingly. The appellant shall be given a period of 10 days from notice of the NLRC order within which to perfect the appeal by posting the required appeal bond. The appeal bond was set at P725 million after taking into consideration the interests of all parties. The underlying purpose of the appeal bond is to ensure that the employer has properties on which he or she can execute upon in the event of a final, providential award. Thus, non-payment or woefully insufficient payment of the appeal bond by the employer frustrates these ends. (2) Yes. There was a legal impediment for NLRC to issue the resolution vacating the LA’s decision. The principle of judicial courtesy applies if there is a strong probability that the issues before the higher court would be renedered moot as a result of the continuation of the proceedings in the lower court. The NLRC’s ruling would moot the appeal filed before the higher courts because the issue involves the appeal bond which is an indispensable requirement to the perfection of the appeal before the NLRC. Thus, unless this issue is resolved, the NLRC should be precluded from ruling on the merits of the case. Thus, the stage that has been passed in this case is the proceedings before the LA. Without the NLRC stage, the LA’s decision is final and executory. (3) No. A confession of judgement is an acknowledgement that a debt is justly due and cuts off all defenses and right of appeal. It is used as a shortcut to a judgment in a case where the defendant concedes liability. It is seen as the written authority of the debtor and a director for entry of judgment against the debtor. On the other hand, a compromise agreement is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced. It is an agreement between two or more persons, who, for preventing or putting an end to a lawsuit, adjust their difficulties by mutual consent in the manner which they agree on, and which everyone of them prefers to the hope of gaining, balanced by the danger of losing. It must not be contrary to law, morals, good customs and public policy; and must have been freely and intelligently executed by and between the parties. Article 227 of the Labor Code of the Philippines authorizes compromise agreements voluntarily agreed upon by the parties, in conformity with the basic policy of the State “to promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes. In this case, a review of the compromise agreement shows a gross disparity between the amount offered by the Corporations compared to the judgment award. The judgment award is P3,453,664,710.86 or each employee is slated to receive P577,149.85. On the other hand, the P342,284,800.00 compromise is to be distributed among 5,984 employees which would translate to only P57,200.00 per employee. From this amount, P8,580.00 as attorney’s fees will be deducted, leaving each employee with a measly P48,620.00. In fact, the compromised amount roughly comprises only 10% of the judgment award. The SC had already directed the NLRC to act with dispatch in resolving the merits of the case upon receipt of the bond. If indeed the parties want an immediate and expeditious resolution of the case, then the NLRC should be unhindered with technicalities to dispose of the case. The petition was denied.
117 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 77. ISLRIZ TRADING / VICTOR HUGO LU v. EFREN CAPADA, LAURO LICUP, NORBERTO NIGOS, RONNIE ABEL, GODOFREDO MAGNAYE, ARNEL SIBERRE, EDMUNDO CAPADA, NOMERLITO MAGNAYE, and ALBERTO DELA VEGA G.R. No. 168501 January 31, 2011 DEL CASTILLO, J.: EXTENT OF APPLICABILITY OF ART. 223 DOCTRINE: Employees are entitled to their accrued salaries during the period between the Labor Arbiters order of reinstatement pending appeal and the resolution of the National Labor Relations Commission (NLRC) overturning that of the Labor Arbiter. Otherwise stated, even if the order of reinstatement of the Labor Arbiter is reversed on appeal, the employer is still obliged to reinstate and pay the wages of the employee during the period of appeal until reversal by a higher court or tribunal. FACTS: Efren Capada, Lauro Licup, Norberto Nigos, and Godofredo Magnaye were drivers while Ronnie Abel, Arnel Siberre, Edmundo Capada, Nomerlito Magnaye, and Alberto Dela Vega were helpers of Islriz Trading, a gravel and sand business owned and operated by Victor Hugo Lu. Claiming that they were illegally dismissed, Capada, et al. filed a complaint for illegal dismissal and non-payment of overtime pay,holiday pay, rest day pay, allowances, and separation pay against Islriz on August 9, 2000 before the LA. For his part, Lu imputed abandonment of work against Capada, et al. LA & NLRC RULING: On Dec. 21, 2001, LA Waldo Emerson Gan declared Islriz Trading guilty of illegal dismissal and ordered the reinstatement of complainants to the ir former positions and the payment of full backwages plus 10% attorney’s fees. On Sept. 5, 2002, the NLRC set aside the LA’s decision after finding that Capada, et al.’s failure to continue working for Islriz Trading was neither caused by termination nor abandonment of work and ordered reinstatement of Capada, et al. but without backwages. On Nov. 18, 2002, MR was denied. On Dec. 7, 2002, this became final and executory. On Dec. 9, 2003, however, Capada, et al. filed with the LA an Ex-Parte Motion to Set Case for Conference with Motion averring that since the LA decision ordered their reinstatement, a writ of execution dated April 22, 2002 was already issued for the enforcement of its reinstatement aspect as the same is immediately executory even pending appeal, but Islriz still refused to reinstate them, thereby, praying that, in view of the orders of reinstatement, a computation of the award of backwages be made and that an alias writ of execution for its enforcement be issued. On Jan. 29, Feb. 24, and March 5, 2004, pre-execution conferences were held but the parties failed to come to terms on the issue of the monetary award. The LA thus issued an undated computation of Capada, et al.’s accrued salaries amounting to P1,110,665.60. LA Danna Castillon, despite Islriz’s questioning of the computation since the same was without factual or legal basis since LA Gans’s decision had already been reversed and set aside by the NLRC, issued a writ of execution dated March 9, 2004 to enforce the monetary award. Hence, the personal property of Islriz was levied, despite Islriz’s protest, in favor of Capada, et al. Later, Capada, et al. claimed that they could not take full control, ownership, and possession of the same because Lu had allegedly padlocked the premises where the properties were situated. Hence, they asked LA Castillo to issue a break-open order. For his part, Lu filed a Motion to Quash Writ of Execution, Notice of Sale/Levy on Execution of Personal Property and Auction Sale on Additional Grounds reiterating that since the NLRC reversed the LA’s decision, only the execution of reinstatement sans any backwages or other monetary award should be enforced.
118 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS On June 3, 2004, LA Castillon explained that the monetary award subject of the writ refers to Capada, et al.’s accrued salaries by reason of the reinstatement order of LA Gan which is self-executory pursuant to Art. 223 of the Labor Code. CA RULING: On March 18, 2005, the CA agreed with the LA’s ratiocination that pursuant to Art. 223 of the Labor Code, what is sought to be enforced by the writ of execution is the accrued salaries owing to Capada, et al. by reason of LA Gan’s reinstatement order. MR was also denied on June 16, 2005. Hence, this petition for review where Lu posits that Art. 223 of the Labor Code only applies when an employee has been illegally dismissed from work and since, Capada, et al.’s failure to continue working for Islriz was not occasioned by termination, there is no illegal dismissal to speak of, hence, Art. 223 does not apply in this case. ISSUE: Is Art. 223 of the Labor Code applicable to this case? May Capada, et al. collect their wages during the period between the LA’s order of reinstatement pending appeal and the NLRC Resolution overturining that of the LA? SC RULING: Yes. Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court or tribunal. It likewise settled the view that the Labor Arbiters order of reinstatement is immediately executory and the employer has to either re-admit them to work under the same terms and conditions prevailing prior to their dismissal, or to reinstate them in the payroll, and that failing to exercise the options in the alternative, employer must pay the employees salaries. After the Labor Arbiter’s decision is reversed by a higher tribunal, the employee may be barred from collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer. It then provided for the two-fold test in determining whether an employee is barred from recovering his accrued wages, to wit: (1) there must be actual delay or that the order of reinstatement pending appeal was not executed prior to its reversal; and (2) the delay must not be due to the employers unjustified act or omission. If the delay is due to the employers unjustified refusal, the employer may still be required to pay the salaries notwithstanding the reversal of the Labor Arbiter’s Decision. In this case, (1) there was an actual delay in the execution of the reinstatement aspect of LA Gan’s decision prior to the issuance of the NLRC resolution overturning the same; and (2) the delay in the execution of Capada, et al.’s reinstatement was due to Islriz’s unjustified refusal to effect the same. Therefore, Capada, et al. have the right to collect their accrued salaries during the period between the LA’s decision ordering their reinstatement pending appeal and the NLRC resolution overturning thr same. The petition was denied.
119 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 78. CESAR V. GARCIA, CARLOS RAZON, ALBERTO DE GUZMAN, TOMAS RAZON, OMER PALO, RIZALDE VALENCIA, ALLAN BBASA, JESSIE GACIA, JUANITO PARAS, ALEJANDRO ORAG, ROMMEL PANGAN, RUEL SOLIMAN, AND CENEN CANLAPAN, represented by CESAR V. GARCIA v. KJ COMMERCIAL and REYNALDO QUE G.R. No. 196830 February 29, 2012 CARPIO, J.: PERFECTION OF APPEAL; APPEAL BOND DOCTRINE: Section 2, Article I of the Rules of Procedure of the NLRC states: These Rules shall be liberally construed to carry out the objectives of the Constitution, the Labor Code of the Philippines and other relevant legislations, and to assist the parties in obtaining just, expeditious and inexpensive resolution and settlement of labor disputes. In order to give full effect to the provisions on motion to reduce bond, the appellant must be allowed to wait for the ruling of the NLRC on the motion even beyond the 10-day period to perfect an appeal. If the NLRC grants the motion and rules that there is indeed meritorious ground and that the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC denies the motion, the appellant may still file a motion for reconsideration as provided under Section 15, Rule VII of the Rules. If the NLRC grants the motion for reconsideration and rules that there is indeed meritorious ground and that the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC denies the motion, then the decision of the labor arbiter becomes final and executory. FACTS: KJ Commercial (KJC) is a sole proprietorship which owns trucks and engages in the business of distributing cement products. On different dates, KJC employed as truck drivers and truck helpers herein petitioners Cesar Garcia, Carlos Razon, Alberto De Guzman, Tomas Razon, Omer Palo, Rizalde Valencia, Allan Bbasa, Jessie Gacia, Juanito Paras, Alejandro Orag, Rommel Pangan, Ruel Soliman, and Cenen Canlapan. On Jan. 2, 2006, Garcia, et al. demanded for a P40 daily salary increase. To pressure KJC to grant their demand, they stopped working and abandoned their trucks at Northern Cement Plan Station in Sison, Pangasinan. On Feb. 3, 2006, Garcia, et al. filed with the LA a complaint for illegal dismissal, underpayment of salary, and nonpayment of SIL and 13th month pay. LA RULING: On Oct. 30, 2008, the LA held that KJC illegally dismissed Garcia, et al. KJC appealed to the NLRC. It filed a motion to reduce bond and posted a P50,000 cash bond. NLRC RULING: On March 9, 2009, the NLRC dismissed the appeal. KJC filed an MR and posted a P2,562,930 surety bond. On Feb. 8, 2010, the NLRC granted the motion and set aside the LA’s decision. Garcia, et al. filed an MR which was denied on June 25, 2010. CA RULING: On April 21, 2011, the CA affirmed the NLRC’s decision. Hence, this petition for review on certiorari. ISSUE: Did the motion to reduce bond stop the running of the period to appeal? SC RULING: Yes. KJC’s filing of a motion to reduce bond and delayed posting of the P2,562,930 surety bond did not render the LA’s decision final and executory. The Rules of Procedure of the NLRC allows the filing of a motion to reduce bond subject to two conditions: 1. There is meritorious ground; and 2. A bond in a reasonable amount is posted. The filing of a motion to reduce bond and compliance with the two conditions stop the running of the period to perfect an appeal. The NLRC has full discretion to grant or deny the motion to reduce bond,21 and it may rule on the motion beyond the 10-day period within which to perfect an appeal. Obviously, at the time of the filing of the 120 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS motion to reduce bond and posting of a bond in a reasonable amount, there is no assurance whether the appellants motion is indeed based on meritorious ground and whether the bond he or she posted is of a reasonable amount. Thus, the appellant always runs the risk of failing to perfect an appeal. Section 2, Article I of the Rules of Procedure of the NLRC states: These Rules shall be liberally construed to carry out the objectives of the Constitution, the Labor Code of the Philippines and other relevant legislations, and to assist the parties in obtaining just, expeditious and inexpensive resolution and settlement of labor disputes. In order to give full effect to the provisions on motion to reduce bond, the appellant must be allowed to wait for the ruling of the NLRC on the motion even beyond the 10-day period to perfect an appeal. If the NLRC grants the motion and rules that there is indeed meritorious ground and that the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC denies the motion, the appellant may still file a motion for reconsideration as provided under Section 15, Rule VII of the Rules. If the NLRC grants the motion for reconsideration and rules that there is indeed meritorious ground and that the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC denies the motion, then the decision of the labor arbiter becomes final and executory. KJ Commercial filed a motion to reduce bond and posted a P50,000 cash bond. When the NLRC denied its motion, KJ Commercial filed a motion for reconsideration and posted the full P2,562,930 surety bond. The NLRC then granted the motion for reconsideration. Furthermore, KJ Commercial showed willingness to post a partial bond. In fact, it posted a P50,000 cash bond. Also, KJ Commercial immediately posted the full amount of the bond when it filed its motion for reconsideration of the NLRC’s decision. The petition was denied. CA decision was affirmed.
121 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 79. MARIANO ONG, doing business under the name and style MILESTONE METAL MANUFACTURING v. THE COURT OF APPEALS, CONRADO DABAC, BERNABE TAYACTAC, MANUEL ABEJUELLA, LOLITO ABELONG, RONNIE HERRERO, APOLLO PAMIAS, JAIME ONGUTAN, NOEL ATENDIDO, CARLOS TABBAL, JOEL ATENDIDO, BIENVENIDO EBBER, RENATO ABEJUELLA, LEONILO ATENDIDO, JR., LODULADO FAA and JAIME LOZADA G.R. No. 152494 September 22, 2004 YNARES-SANTIAGO, J.: PERFECTION OF APPEAL; APPEAL BOND DOCTRINE: The NLRC Rules clearly provide that the filing of the motion to reduce bond shall not stop the running of the period to perfect appeal. Ong should have seasonably filed the appeal bond within the ten-day reglementary period following the receipt of the order, resolution or decision of the NLRC to forestall the finality of such order, resolution or decision. In the alternative, he should have paid only a moderate and reasonable sum for the premium. The law does not require its outright payment, but only the posting of a bond to ensure that the award will be eventually paid should the appeal fail. What petitioners have to pay is a moderate and reasonable sum for the premium for such bond. FACTS: Mariano Ong is the sole proprietor of Milestone Metal Manufacturing, which manufactures, among others, wearing apparels, belts, and umbrellas. Sometime in May 1998, the business suffered very low sales and productivity because of the economic crisis in the country. Hence, it adopted a rotation scheme by reducing the workdays of its employees to 3 days a week or less for an indefinite period. On separate dates, the 15 respondents filed before the NLRC complaints for illegal dismissal, underpayment of wages, non-payment of overtime pay, holiday pay, SIL pay, 13 th month pay, damages, and attorney’s fees against Ong. Ong claimed that: 9 of the 15 respondents were not employees of Milestone but of Proton Industrial Corporation which, however, stopped its operation due to business losses. Abuela, Abelong, Herrero, Tabbal, Dabac, and Faa were not dismissed from employment; rather, they refused to work after the rotation scheme was adopted. Anent their monetary claims, Ong presented documents showing that he paid respondents minimum wage, 13th month pay, holiday pay, and contributions to the SSS, Medicare, and Pag-ibig Funds. LA RULING: On Nov. 25, 1999, LA awarded respondents P1,111,200.40 representing their wage differential, holiday pay, SIL pay, and 13th month pay, plus 10% attorney’s fees and ordered Ong to pay respondents separation pay due to the indefiniteness of the rotation scheme and strained relations caused by the filing of the complaints. Ong filed with the NLRC a notice of appeal with a memorandum of appeal and paid the docket fees but instead of posting the required cash or surety bond, he filed a motion to reduce the appeal bond. NLRC RULING: On April 28, 2000, the NLRC denied the motion to reduce bond and dismissed the appeal for failure to post cash or surety bond. MR was also denied. CA RULING: Petition for certiorari was dismissed. MR was denied. Hence, this petition for review where Ong contends that he was deprived of the chance to post bond because the NLRC took 102 days to decide his motion. ISSUE: Is the mere filing of the motion to reduce the appeal bond, without posting the required surety or cash bond, sufficient to perfect an appeal? SC RULING: NO. The NLRC did not act with GAD when it denied Ong’s motion for the same failed to either elucidate why the amount of the bond was unjustified and prohibitive or to indicate what would be a reasonable level. A substantial 122 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS monetary award, even if it runs into millions, does not necessarily give the employer-appellant a meritorious case and does not automatically warrant a reduction of the appeal bond. Even granting arguendo that Ong has meritorious grounds to reduce the appeal bond, the result would have been the same since he failed to post cash or surety bond within the prescribed period. An appeal from the Labor Arbiter to the NLRC must be perfected within ten calendar days from receipt of such decisions, awards or orders of the Labor Arbiter. In a judgment involving a monetary award, the appeal shall be perfected only upon (1) proof of payment of the required appeal fee; (2) posting of a cash or surety bond issued by a reputable bonding company; and (3) filing of a memorandum of appeal. A mere notice of appeal without complying with the other requisites mentioned shall not stop the running of the period for perfection of appeal. The posting of cash or surety bond is not only mandatory but jurisdictional as well, and non-compliance therewith is fatal and has the effect of rendering the judgment final and executory. This requirement is intended to discourage employers from using the appeal to delay, or even evade, their obligation to satisfy their employees just and lawful claims. The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal by the employer is underscored by the provision that an appeal by the employer may be perfected only upon the posting of a cash or surety bond. The word only makes it perfectly clear that the lawmakers intended the posting of a cash or surety bond by the employer to be the exclusive means by which an employers appeal may be perfected. The fact that the NLRC took 102 days to resolve the motion will not help Ong’s case. The NLRC Rules clearly provide that the filing of the motion to reduce bond shall not stop the running of the period to perfect appeal. Ong should have seasonably filed the appeal bond within the ten-day reglementary period following the receipt of the order, resolution or decision of the NLRC to forestall the finality of such order, resolution or decision. In the alternative, he should have paid only a moderate and reasonable sum for the premium. The law does not require its outright payment, but only the posting of a bond to ensure that the award will be eventually paid should the appeal fail. What petitioners have to pay is a moderate and reasonable sum for the premium for such bond. While the bond requirement on appeals involving monetary awards has been relaxed in certain cases, this can only be done where there was substantial compliance of the Rules or where the appellants, at the very least, exhibited willingness to pay by posting a partial bond. Ong did not post a full or partial appeal bond within the prescribed period, thus, no appeal was perfected from the decision of the Labor Arbiter. For this reason, the decision sought to be appealed to the NLRC had become final and executory and therefore immutable. Clearly, then, the NLRC has no authority to entertain the appeal, much less to reverse the decision of the Labor Arbiter. Any amendment or alteration made which substantially affects the final and executory judgment is null and void for lack of jurisdiction, including the entire proceeding held for that purpose. The petition was denied. The CA decision was affirmed.
123 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 80. ROSEWOOD PROCESSING, INC. v. NATIONAL LABOR RELATIONS COMMISSION, NAPOLEON C. MAMON, ARSENIO GAZZINGAN, ROMEO C. VELASCO, ARMANDO L. BALLON, VICTOR E. ALDEZA, JOSE L. CABRERA, VETERANS PHILIPPINE SCOUT SECURITY AGENCY, and/or ENGR. SERGIO JAMILA IV G.R. Nos. 116476-84 May 21, 1998 PANGANIBAN, J.: PERFECTION OF APPEAL; APPEAL BOND; SOLIDARY LIABILITY OF INDIRECT EMPLOYER DOCTRINES: In a number of cases, the SC has relaxed the bond requirement in order to bring about the immediate and appropriate resolution of controversies on the merits. Some of these cases include: (a) counsels reliance on the footnote of the notice of the decision of the labor arbiter that the aggrieved party may appeal xxx within ten (10) working days; (b) fundamental consideration of substantial justice; (c) prevention of miscarriage of justice or of unjust enrichment, as where the tardy appeal is from a decision granting separation pay which was already granted in an earlier final decision; and (d) special circumstances of the case combined with its legal merits or the amount and the issue involved. Under the Labor Code, an employer is solidarily liable for legal wages due security guards for the period of time they were assigned to it by its contracted security agency. However, in the absence of proof that the employer itself committed the acts constitutive of illegal dismissal or conspired with the security agency in the performance of such acts, the employer shall not be liable for back wages and/or separation pay arising as a consequence of such unlawful termination. FACTS: On May 13, 1991, a complaint for illegal dismissal, underpayment of wages, and non-payment of overtime pay, holiday pay, premium pay for holiday and rest day, and 13 th month pay, cash bond deposit, unpaid wages, and damages was filed aganst Veterans Philippine Scout Security Agency and/or Sergio Jamila IV. Thereafter, Rosewood Processing, Inc. (RPI) was impleaded as a third-party respondent by the security agency. LA RULING: On March 26, 1993, the security agency, Jamila, and RPI were ordered to pay jointly and severally the complainants the aggregate amount of P789,154.39 plus attorney’s fees on the basis that the security agency and RPI offered no evidence refuting or rebutting the complainants’ computation of monetary claims. NLRC RULING: On April 28, 1994, the appeal was dismissed for failure of RPI to file the required appeal bond within the reglementary period, thereby rendering the LA’s decision final and executory as of April 23, 1993. MR was likewise denied. Hence, this petition. ISSUE: 1. Was the appeal from the LA to the NLRC perfected on time? 2. Is RPI solidarily liable with the security agency for the payment of back wages, wage differential, and separation pay. SC RULING: (1) Yes. The perfection of an appeal within the reglementary period and in the manner prescribed by law is jurisdictional, and non-compliance with such legal requirement is fatal and effectively renders the judgment final and executory. The appeal of a decision involving a monetary award in labor cases may be perfected only upon the posting of a cash or surety bond. The lawmakers intended the posting of the bond to be an indispensable requirement to perfect an employers appeal. However, in a number of cases, the SC has relaxed this requirement in order to bring about the immediate and appropriate resolution of controversies on the merits. Some of these cases include: (a) counsels reliance on the footnote of the notice of the decision of the labor arbiter that the aggrieved party may appeal xxx within ten (10) working days; (b) fundamental consideration of substantial justice; (c) prevention of miscarriage of justice or of unjust enrichment, as where the tardy appeal is from a decision granting separation pay which was already granted in an earlier final decision; and (d) special circumstances of the case combined with its legal merits or the amount and the issue involved. 124 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS In this case, RPI claims to have received a copy of the LA’s decision only on April 6, 1993, and that it filed on April 16, 1993, within the prescribed time, a Notice of Appeal with a Memorandum on Appeal, a Motion to Reduce Appeal Bond, and a surety bond issued by Prudential Guarantee and Assurance Inc. in the amount of P50,000. Ignoring RPI’s motion to reduce bond, the NLRC rendered its assailed resolution dismissing the appeal due to the late filing of the appeal bond. RPI’s motion to reduce the bond is a substantial compliance with the Labor Code. Letter-perfect rules must yield to the broader interest of substantial justice. (2) Yes. Notwithstanding the service contract between the petitioner and the security agency, the former is still solidarily liable to the employees, who were not privy to said contract, pursuant to the aforecited provisions of the Code. Labor standard legislations are enacted to alleviate the plight of workers whose wages barely meet the spiraling costs of their basic needs. They are considered written in every contract, and stipulations in violation thereof are considered not written. Similarly, legislated wage increases are deemed amendments to the contract. Thus, employers cannot hide behind their contracts in order to evade their or their contractors or subcontractors liability for noncompliance with the statutory minimum wage. The joint and several liability of the employer or principal was enacted to ensure compliance with the provisions of the Code, principally those on statutory minimum wage. The contractor or subcontractor is made liable by virtue of his or her status as a direct employer, and the principal as the indirect employer of the contractors employees. This liability facilitates, if not guarantees, payment of the workers compensation, thus, giving the workers ample protection as mandated by the 1987 Constitution. This is not unduly burdensome to the employer. Should the indirect employer be constrained to pay the workers, it can recover whatever amount it had paid in accordance with the terms of the service contract between itself and the contractor. Withal, fairness dictates that RPI should not, however, be held liable for wage differentials incurred while the complainants were assigned to other companies. The indirect employers liability to the contractors employees extends only to the period during which they were working for the petitioner, and the fact that they were reassigned to another principal necessarily ends such responsibility. The principal is made liable to his indirect employees, because it can protect itself from irresponsible contractors by withholding such sums and paying them directly to the employees or by requiring a bond from the contractor or subcontractor for this purpose. Similarly, the solidary liability for payment of back wages and separation pay is limited, under Article 106, to the extent of the work performed under the contract; under Article 107, to the performance of any work, task, job or project; and under Article 109, to the extent of their civil liability under this Chapter [on payment of wages]. The liability arising from an illegal dismissal is unlike an order to pay the statutory minimum wage, because the workers right to such wage is derived from law. The proposition that payment of back wages and separation pay should be covered by Article 109, which holds an indirect employer solidarily responsible with his contractor or subcontractor for any violation of any provision of this Code, would have been tenable if there were proof -- there was none in this case -- that the principal/employer had conspired with the contractor in the acts giving rise to the illegal dismissal. The petition was partially granted.
125 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 81. FLORENCIO M. DE LA CRUZ, JR. v. NATIONAL LABOR RELATIONS COMMISSION (4th Division) SHEMBERG MARKETING CORPORATION and ERNESTO U. DACAY, JR. G.R. No. 145417 December 11, 2003 CORONA, J.: ART. 223 JURISDICTION OF THE LABOR ARBITERS AND THE COMMISSION DOCTRINE: A probationary employee is one who, for a given period of time, is under observation and evaluation to determine whether or not he is qualified for permanent employment. During the probationary period, the employer is given the opportunity to observe the skill, competence and attitude of the employee while the latter seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment. The length of time is immaterial in determining the correlative rights of both the employer and the employee in dealing with each other during said period. FACTS: On May 27, 1996, petitioner Florencio M. de la Cruz, Jr. was hired by private respondent Shemberg Marketing Corporation (Shemberg) as senior sales manager with a monthly salary of P40,500. Shemberg was engaged in the business of manufacturing, trading, distributing and importing various consumer products. The position of senior sales manager was then newly created; its duties included, among others, the supervision and control of the sales force of the company. The senior sales manager was also vested with some discretion to decide on matters within the scope of his functions, including the appointment of district sales representatives and the reshuffling of salesmen to achieve sales targets. On September 14, 1996, Shemberg’s human resource department manager, Ms. Lilybeth Y. Llanto, summoned petitioner and informed him of the management’s decision to terminate his services. He was merely informed that it had something to do with the drop in the company’s sales. His request to be furnished a 30-day written notice was also denied by the management. Hence, petitioner filed a complaint for illegal dismissal, non-payment of salary, backwages, 13th month pay and damages. Respondents answered that petitioner’s dismissal for his failure to meet the required company standards and for loss of trust and confidence: (1) his poor performance as evidenced by the steady and substantial drop in company sales since his assumption as senior sales manager; (2) the dissatisfaction of his subordinates over his management style and dealings with the company’s distributors which resulted in the low morale of Shemberg’s sales force; (3) his unauthorized use of company cellular phone for overseas personal calls and (4) the unauthorized reimbursement of the plane tickets of his wife and child. LA RULING: Found that petitioner Florencio de la Cruz was illegally dismissed and granted his claim for separation pay, backwages and unpaid wages. NLRC RULING: Dismissed the appeal. Respondents moved for reconsideration and the NLRC partially granted the MR, abandoning its previous decision. A new decision was rendered ordering respondent Shemberg to pay unpaid wages of P18,900.00 and indemnity of P5,000.00. CA RULING: De La Cruz’s petition for certiorari was dismissed for lack of merit. His subsequent MR was likewise denied. ISSUES: (1) Did the submission of the family’s plane tickets for reimbursement tantamount to fraud and deceit which justified the employer’s loss of trust and confidence in him? (2) Is the petitioner a probationary employee? SC DECISION: (1) Petitioner was holding a managerial position which required the full trust and confidence of his employer. While petitioner could exercise some discretion, this obviously did not cover acts for his own personal benefit. The petitioner’s denial cannot prevail over the actual presentation of the plane ticket in the name of petitioner and his family and terminal fee stubs bearing three (3) different serial numbers but similarly dated. The possession by respondent corporation of the plane tickets of petitioner’s wife and child clearly shows that the same were submitted to management for reimbursement along with the other transportation expenses of petitioner. Otherwise, there is no way respondent corporation could have gotten hold of the same. Petitioner opted not to 126 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS explain why these plane tickets were in the possession of respondent corporation. His denials without accompanying proof coupled with his silence on this matter cannot but be taken against him. (2) YES. Article 281 of the Labor Code provides: Probationary employment – Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards, made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. This Court notes the evidence on record clearly showing that petitioner was well informed of the standards to be met before he could qualify as a regular employee. Attached to his appointment paper was the job description of sales manager which read: xxx 5. Performance subject to evaluation and trial period for six (6) months or more. A probationary employee is one who, for a given period of time, is under observation and evaluation to determine whether or not he is qualified for permanent employment. During the probationary period, the employer is given the opportunity to observe the skill, competence and attitude of the employee while the latter seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment. The length of time is immaterial in determining the correlative rights of both the employer and the employee in dealing with each other during said period. There is no dispute that petitioner, as a probationary employee, enjoyed only temporary employment status. In general terms, this meant that he was terminable anytime, permanent employment not having been attained in the meantime. The employer could well decide he no longer needed the probationary employee’s services or his performance fell short of expectations, etc. As long as the termination was made before the expiration of the sixmonth probationary period, the employer was well within his rights to sever the employer-employee relationship. A contrary interpretation would defect the clear meaning of the term "probationary." In this case, respondent Shemberg had good reason to terminate petitioner’s employment and that was his dishonesty.
127 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 82. LYDIA BUENAOBRA, et al. v. LIM KING GUAN, et al. as corporate officers of UNIX INTERNATIONAL EXPORT CORPORATION, and CHEN HSIU TSUNG, et al. as stockholders of record of UNIX INTERNATIONAL EXPORT CORPORATION, and FUJI ZIPPER MANUFACTURING CORPORATION G.R. No. 150147 January 20, 2004 CORONA, J.: ART. 223 JURISDICTION OF THE LABOR ARBITERS AND THE COMMISSION DOCTRINE: It is true that the perfection of an appeal in the manner and within the period prescribed by law is not only mandatory but jurisdictional, and failure to perfect an appeal has the effect of making the judgment final and executory. However, technicality should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties. FACTS: Petitioners were employees of UNIX, a corporation engaged in the business of manufacturing bags, wallets and the like. Sometime in 1991 and 1992, petitioners filed several cases against UNIX and its incorporators and officers for unfair labor practice, illegal lockout/dismissal, underpayment of wages, holiday pay, proportionate 13th month pay, unpaid wages, interest, moral and exemplary damages and attorney’s fees. LA RULING: In favor of the petitioners ordering respondent Unix as follows: 1. P5,821,838.40 as backwages; 2. P1,484,912.00 as separation pay; 3. P527,748.00 as wage differentials; 4. P33,830.00 as regular holiday pay differentials; and 5. P365,551.95 as proportionate 13th month pay for 1990. All other claims were dismissed for lack of merit. However, petitioners complained that the decision could not be executed because UNIX allegedly diverted, invested and transferred all its money, assets and properties to FUJI whose stockholders and officers were also those of UNIX. Thus, petitioners filed another complaint against respondents UNIX, its corporate officers and stockholders of record, and FUJI. Petitioners mainly prayed that respondents UNIX and FUJI be held jointly and severally held liable for the payment of the monetary awards. LA Pati rendered a decision on the second complaint piercing the veil of corporate fiction of the two respondent sister corporations which were considered as mere associations of persons jointly and severally pay the subject amount of P8,233,880.30 out of the properties and unpaid subscription on subscribed Capital Stock of the Board of Directors, Corporate Officers, Incorporators and Stockholders of said respondent corporations, plus the amount of P3,000,000.00 and P1,000,000.00 in the form of moral and exemplary damages, respectively, as well as 10% attorney’s fees from any recoverable amounts. FUJI, its officers and stockholders filed a memorandum on appeal and a motion to dispense with the posting of a cash or surety appeal bond on the ground that they were not the employers of petitioners. NLRC RULING: Motion to exempt from filing appeal bond was DENIED for lack of merit. Respondents were directed to post cash or surety bond. Petitioners moved for reconsideration of the said order, arguing that the timely posting of an appeal bond is mandatory for the perfection of an appeal and should be complied with. NLRC rendered an order dismissing the MR. Petitioners filed a petition in the Court of Appeals imputing grave abuse of discretion to the NLRC, Third Division when it allowed private respondents to post the mandated cash or surety bond four months after the filing of their memorandum on appeal. 128 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS CA RULING: CA dismissed the petition for lack of merit. ISSUE: Is the posting of bond a four months after the filing of the memorandum of appeal violative of the Labor Code? SC DECISION: NO. The provision of Article 223 of the Labor Code requiring the posting of bond on appeals involving monetary awards must be given liberal interpretation in line with the desired objective of resolving controversies on the merits.3 If only to achieve substantial justice, strict observance of the reglementary periods may be relaxed if warranted. The NLRC, Third Division could not be said to have abused its discretion in requiring the posting of bond after it denied private respondents’ motion to be exempted therefrom. It is true that the perfection of an appeal in the manner and within the period prescribed by law is not only mandatory but jurisdictional, and failure to perfect an appeal has the effect of making the judgment final and executory. However, technicality should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties. 4 We have allowed appeals from the decisions of the labor arbiter to the NLRC, even if filed beyond the reglementary period, in the interest of justice. It is only fair and just that respondent FUJI be afforded the opportunity to be heard on appeal before the NLRC, specially in the light of labor arbiter Pati’s later decision holding FUJI jointly and severally liable with UNIX in the payment of the monetary awards adjudged by labor arbiter de Vera against UNIX.
129 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 83. LEPANTO CONSOLIDATED MINING CORPORATION v. BELIO ICAO G.R. No. 196047 January 15, 2014 SERENO, CJ: ART. 223 JURISDICTION OF THE LABOR ARBITERS AND THE COMMISSION DOCTRINE: The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal by the employer, is clearly limned in the provision that an appeal by the employer may be perfected "only upon the posting of a cash or surety bond." The word "only" makes it perfectly clear, that the lawmakers intended the posting of a cash or surety bond by the employer to be the exclusive means by which an employer's appeal may be perfected. FACTS: A complaint for illegal dismissal and damages was filed by private respondent Icao against petitioners Lepanto Consolidated Mining Company (LCMC) and its CEO Felipe U. Yap before the Arbitration Branch of the NLRC. Icao essentially alleged in his complaint that he was an employee of petitioner LCMC assigned as a lead miner in its underground mine in Paco, Mankayan, Benguet. On January 4, 2008, private respondent reported for work. While waiting for the time to ignite their round, one of his co-workers shouted to prepare the explosives for blasting, prompting private respondent to run to the adjacent panels and warn the other miners. Thereafter, he decided to take a bath and proceeded to the bathing station where 4 of his co-workers were also present. Before he could join them, he heard a voice at his back and saw Security Guard (SG) Larry Bulwayan instructing his companion SG Dale Papsa-ao to frisk him. As private respondent was removing his boots, SG Bulwayan forcibly pulled his skullguard from his head causing it to fall to the ground including its harness and his detergent soap which was inserted in the skullguard harness. A few minutes later, private respondent saw SG Bulwayan pick up a wrapped object at the bathing station and gave it to his companion. SGs Bulwayan and Papsa-ao invited the private respondent to go with them at the investigation office to answer questions regarding the wrapped object. He was then charged with "highgrading" or the act of concealing, possessing or unauthorized extraction of highgrade material/ore without proper authority. Private respondent vehemently denied the charge. Consequently, he was dismissed from his work. LA RULING: That petitioner and its CEO are liable for illegal dismissal and ordered them to pay respondent Icao P345,879.45, representing his full backwages and separation pay. The alleged highgrading attributed by LCMC’s security guards was found to have been fabricated; consequently, there was no just cause for the dismissal of respondent. On 8 December 2008, petitioner and its CEO filed an Appearance with Memorandum of Appeal before the NLRC. Instead of posting the required appeal bond in the form of a cash bond or a surety bond in an amount equivalent to the monetary award adjudged in favor of Icao, they filed a Consolidated Motion For Release Of Cash Bond And To Apply Bond Subject For Release As Payment For Appeal Bond (Consolidated Motion). NLRC RULING: NLRC dismissed the appeal of petitioner and the latter’s CEO for non-perfection. It found that they had failed to post the required appeal bond. equivalent to the monetary award of P345,879.45. It explained that their Consolidated Motion for the release of the cash bond in another case (Dangiw Siggaao), for the purpose of applying the same bond to the appealed case before it, could not be considered as compliance with the requirement to post the required appeal bond. Consequently, it declared the labor arbiter’s Decision to be final and executory. Petitioner and its CEO filed a Motion for Reconsideration. They emphasized therein that they had tried to comply in good faith with the requisite appeal bond by trying to produce a cash bond anew and also to proc ure a new surety bond. However, after canvassing several bonding companies, the costs have proved to be prohibitive. Hence, they resorted to using the cash bond they posted in Dangiw Siggaao because the bond was now free, unencumbered and could rightfully be withdrawn and used by them. Their motion was denied. Hence, they filed a Petition for Certiorari with the CA. CA RULING: CA affirmed the Order of the NLRC, which had dismissed the appeal of petitioner and the latter’s CEO for failure to comply with the requirements of law and consequently lost the right to appeal. CA said that since the payment of appeal fees and the posting of an appeal bond are indispensable jurisdictional requirements, 130 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS noncompliance with them resulted in petitioner’s failure to perfect its appeal. Consequently, the labor arbiter’s Decision became final and executory and, hence, binding upon the appellate court. ISSUE: Did the petitioner’s Consolidated Motion to release the cash bond it posted in a previous case, for application to the present case, constitute compliance with the appeal bond requirement under the Labor Code? SC RULING: YES. The Court finds that petitioner substantially complied with the appeal bond requirement. In appeals from any decision or order of the labor arbiter, the posting of an appeal bond is required under Article 223 of the Labor Code, which reads: Article 223. APPEAL. — Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds: xxxx In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from. The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal by the employer, is clearly limned in the provision that an appeal by the employer may be perfected "only upon the posting of a cash or surety bond." The word "only" makes it perfectly clear, that the lawmakers intended the posting of a cash or surety bond by the employer to be the exclusive means by which an employer's appeal may be perfected. First, there is no question that the appeal was filed within the 10-day reglementary period. Except for the alleged failure to post an appeal bond, the appeal to the NLRC was therefore in order. Second, it is also undisputed that petitioner has an unencumbered amount of money in the form of cash in the custody of the NLRC. To reiterate, petitioner had posted a cash bond of P401,610.84 in the separate case Dangiw Siggaao, which was earlier decided in its favor. As claimed by petitioner and confirmed by the Judgment Division of the Judicial Records Office of this Court, the Decision in Dangiw Siggaao had become final and executory as of 28 April 2008, or more than seven months before petitioner had to file its appeal in the present case. This fact is shown by the Entry of Judgment on file with the aforementioned office. Hence, the cash bond in that case ought to have been released to petitioner then. Third, the cash bond in the amount of P401,610.84 posted in Dangiw Siggaao is more than enough to cover the appeal bond in the amount of P345,879.45 required in the present case. Fourth, this ruling remains faithful to the spirit behind the appeal bond requirement which is to ensure that workers will receive the money awarded in their favor when the employer’s appeal eventually fails. There was no showing at all of any attempt on the part of petitioner to evade the posting of the appeal bond. On the contrary, petitioner’s move showed a willingness to comply with the requirement. Hence, the welfare of Icao is adequately protected. The Court found exceptional circumstances that warranted an extraordinary exercise of its power to exempt a party from the rules on appeal bond, there is all the more reason in the present case to find that petitioner substantially complied with the requirement. Having complied with the appeal bond requirement, petitioner s appeal before the NLRC must therefore be reinstated.
131 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 84. FROILAN M. BERGONIO, et al. v. SOUTH EAST ASIAN AIRLINES and IRENE DORNIER G.R. No. 195227 April 21, 2014 BRION, J.: ART. 223 JURISDICTION OF THE LABOR ARBITERS AND THE COMMISSION DOCTRINE: Under paragraph 3, Article 223 of the Labor Code, the LA’s order for the reinstatement of an employee found illegally dismissed is immediately executory even during pendency of the employer’s appeal from the decision. Under this provision, the employer must reinstate the employee – either by physically admitting him under the conditions prevailing prior to his dismissal, and paying his wages; or, at the employer’s option, merely reinstating the employee in the payroll until the decision is reversed by the higher court. Failure of the employer to comply with the reinstatement order, by exercising the options in the alternative, renders him liable to pay the employee’s salaries. FACTS: Petitioners filed before the LA a complaint for illegal dismissal and illegal suspension with prayer for reinstatement against respondents South East Asian Airlines (SEAIR) and Irene Dornier as SEAIR’s President. LA RULING: LA found the petitioners illegally dismissed and ordered the respondents, among others, to immediately reinstate the petitioners with full backwages. The respondents received their copy of this decision on July 8, 2005.6 On August 20, 2005, the petitioners filed before the LA a Motion for issuance of Writ of Execution for their immediate reinstatement. During the scheduled pre-execution conference, the respondents manifested their option to reinstate the petitioners in the payroll. The payroll reinstatement, however, did not materialize. Thus, on September 22, 2005, the petitioners filed before the LA a manifestation for their immediate reinstatement. The respondents filed an opposition claiming that the relationship between them and the petitioners had already been strained because of the petitioners’ threatening text messages, thus precluding the latter’s reinstatement. LA granted the petitioners’ motion and issued a writ of execution but was returned unsatisfied. In response, the petitioners filed a motion for re-computation of accrued wages and a motion for execution of the re-computed amount which was granted. The respondents appealed with the NLRC. NLRC RULING: NLRC dismissed the respondents’ appeal for non-perfection. The NLRC likewise denied the respondents’ MR, prompting the respondents to file before the CA a petition for certiorari. CA RULING: CA rendered its decision (on the illegal dismissal ruling of the LA) partly granting the respondents’ petition, declaring the dismissal valid and awarded the petitioners P30,000.00 as nominal damages for the respondents’ failure to observe due process. The CA agreed that the reinstatement aspect of the LA’s decision is immediately executory even pending appeal, such that the employer is obliged to reinstate and pay the wages of the dismissed employee during the period of appeal until the decision (finding the employee illegally dismissed including the reinstatement order) is reversed by a higher court. Applying this principle, the CA noted that the petitioners’ accrued wages could have been properly computed until December 18, 2007, the date of the CA’s decision finding the petitioners validly dismissed. Thus, the CA declared that, given this peculiar circumstance (of the petitioners’ failure to report for work), the petitioners’ accrued wages should only be computed until February 24, 2006 when they were supposed to report for work per the return-to-work Memorandum. Accordingly, the CA reversed, for grave abuse of discretion, the NLRC’s July 16, 2008 decision that affirmed the LA’s order to release the garnished amount. ISSUES: (1) Is the LA’s order for reinstatement of an illegally dismissed employee immediately executory even during pendency of the employer’s appeal from the decision? 132 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS (2)
Should the accrued wages be computed until December 17, 2008, when the CA reversed the illegal dismissal findings of the LA or only until February 24, 2006, when the petitioners were supposed to report for work?
SC RULING: (1) YES. Under paragraph 3, Article 223 of the Labor Code, the LA’s order for the reinstatement of an employee found illegally dismissed is immediately executory even during pendency of the employer’s appeal from the decision. Under this provision, the employer must reinstate the employee – either by physically admitting him under the conditions prevailing prior to his dismissal, and paying his wages; or, at the employer’s option, merely reinstating the employee in the payroll until the decision is reversed by the higher court. Failure of the employer to comply with the reinstatement order, by exercising the options in the alternative, renders him liable to pay the employee’s salaries. Otherwise stated, a dismissed employee whose case was favorably decided by the LA is entitled to receive wages pending appeal upon reinstatement, which reinstatement is immediately executory. Unless the appellate tribunal issues a restraining order, the LA is duty bound to implement the order of reinstatement and the employer has no option but to comply with it. Moreover, and equally worth emphasizing, is that an order of reinstatement issued by the LA is self-executory, i.e., the dismissed employee need not even apply for and the LA need not even issue a writ of execution to trigger the employer’s duty to reinstate the dismissed employee. After the LA’s decision is reversed by a higher tribunal, the employer’s duty to reinstate the dismissed employee is effectively terminated. This means that an employer is no longer obliged to keep the employee in the actual service or in the payroll. The employee, in turn, is not required to return the wages that he had received prior to the reversal of the LA’s decision. The reversal by a higher tribunal of the LA’s finding (of illegal dismissal), notwithstanding, an employer, who, despite the LA’s order of reinstatement, did not reinstate the employee during the pendency of the appeal up to the reversal by a higher tribunal may still be held liable for the accrued wages of the employee, i.e., the unpaid salary accruing up to the time the higher tribunal reverses the decision.32 The rule, therefore, is that an employee may still recover the accrued wages up to and despite the reversal by the higher tribunal. This entitlement of the employee to the accrued wages proceeds from the immediate and self-executory nature of the reinstatement aspect of the LA’s decision. By way of exception to the above rule, an employee may be barred from collecting the accrued wages if shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer. (2) To determine whether an employee is thus barred, two tests must be satisfied: (1) actual delay or the fact that the order of reinstatement pending appeal was not executed prior to its reversal; and (2) the delay must not be due to the employer’s unjustified act or omission. Note that under the second test, the delay must be without the employer’s fault. If the delay is due to the employer’s unjustified refusal, the employer may still be required to pay the salaries notwithstanding the reversal of the LA’s decision. First, the existence of delay - whether there was actual delay or whether the order of reinstatement pending appeal was not executed prior to its reversal? We answer this test in the affirmative. To recall, on May 31, 2005, the LA rendered the decision finding the petitioners illegally dismissed and ordering their immediate reinstatement. Per the records, the respondents received copy of this decision on July 8, 2005. On August 20, 2005, the petitioners filed before the LA a Motion for Issuance of Writ of Execution for their immediate reinstatement. The LA issued the Writ of Execution on October 7, 2005. From the time the respondents received copy of the LA’s decision, and the issuance of the writ of execution, until the CA reversed this dec ision on December 17, 2008, the respondents had not reinstated the petitioners, either by actual reinstatement or in the payroll. This continued non-execution of the reinstatement order in fact moved the LA to issue an alias writ of execution on February 16, 2006 and another writ of execution on April 24, 2007. From these facts and without doubt, there was actual delay in the execution of the reinstatement aspect of the LA’s May 31, 2005 decision before it was reversed in the CA’s decision. 133 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Second, the cause of the delay – whether the delay was not due to the employer’s unjustified act or omission. We answer this test in the negative; we find that the delay in the execution of the reinstatement pending appeal was due to the respondents’ unjustified acts. For one, the respondents filed several pleadings to suspend the execution of the LA’s reinstatement order. These pleadings, to our mind, show a determined effort on the respondents’ part to prevent or suspend the execution of the reinstatement pending appeal. The respondents did not sufficiently notify the petitioners of their intent to actually reinstate them; neither did the respondents give them ample opportunity to comply with the return-to-work directive. Lastly, the petitioners continuously and actively pursued the execution of the reinstatement aspect of the LA’s decision, i.e., by filing several motions for execution of the reinstatement order, and motion to cite the respondents in contempt and re-computation of the accrued wages for the respondents’ continued failure to reinstate them. These facts altogether show that the respondents were not at all sincere in reinstating the petitioners. These facts – when taken together with the fact of delay – reveal the respondents’ obstinate resolve and willful disregard of the immediate and self-executory nature of the reinstatement aspect of the LA’s decision.
134 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 85. WILGEN LOON, et al. v. POWER MASTER, INC., TRI-C GENERAL SERVICES, and SPOUSES HOMER and CARINA ALUMISIN G.R. No. 189404 December 11, 2013 BRION, J.: ART. 223 JURISDICTION OF THE LABOR ARBITERS AND THE COMMISSION DOCTRINE: The issue of the appeal bond’s validity may be raised for the first time on appeal since its proper filing is a jurisdictional requirement. The requirement that the appeal bond should be issued by an accredited bonding company is mandatory and jurisdictional. The rationale of requiring an appeal bond is to discourage the employers from using an appeal to delay or evade the employees' just and lawful claims. It is intended to assure the workers that they will receive the money judgment in their favor upon the dismissal of the employer’s appeal. FACTS: Respondents Power Master, Inc. and Tri-C General Services employed and assigned the petitioners as janitors and leadsmen in various PLDT offices in Metro Manila area. Subsequently, the petitioners filed a complaint for money claims against the respondents alleging that they were not paid minimum wages, overtime, holiday, premium, service incentive leave, and thirteenth month pays. They further averred that the respondents made them sign blank payroll sheets. The petitioners amended their complaint and included illegal dismissal as their cause of action. Notably, the respondents did not participate in the proceedings before the Labor Arbiter except on April 19, 2001 and May 21, 2001 when Mr. Romulo Pacia, Jr. appeared on the respondents’ behalf.5 The respondents’ counsel also appeared in a preliminary mandatory conference on July 5, 2001.6 However, the respondents neither filed any position paper nor proffered pieces of evidence in their defense despite their knowledge of the pendency of the case. LA RULING: LA Elias H. Salinas partially ruled in favor of the petitioners. The LA awarded the petitioners salary differential, service incentive leave, and thirteenth month pays. However, the LA denied the petitioners’ claims for backwages, overtime, holiday, and premium pays. The LA observed that the petitioners failed to show that they rendered overtime work and worked on holidays and rest days without compensation. The LA further concluded that the petitioners cannot be declared to have been dismissed from employment because they did not show any notice of termination of employment. They were also not barred from entering the respondents’ premises. Both parties appealed to the NLRC. The respondents insisted that they were not personally served with summons and other processes. They also claimed that they paid the petitioners minimum wages, service incentive leave and thirteenth month pays. As proof, they attached photocopied and computerized copies of payroll sheets to their memorandum on appeal. On January 3, 2003, the respondents filed an unverified supplemental appeal. They attached photocopied and computerized copies of list of employees with ATM cards to the supplemental appeal. This list also showed the amounts allegedly deposited in the employees’ ATM cards.11 They also attached documentary evidence showing that the petitioners were dismissed for cause and had been accorded due process. NLRC RULING: NLRC partially ruled in favor of the respondents.16 The NLRC affirmed the LA’s awards of holiday pay and attorney’s fees. It also maintained that the LA acquired jurisdiction over the persons of the respondents through their voluntary appearance. However, it allowed the respondents to submit pieces of evidence for the first time on appeal on the ground that they had been deprived of due process. NLRC also vacated the LA’s awards of salary differential, thirteenth month and service incentive leave pays. The NLRC further ruled that the petitioners were lawfully dismissed on grounds of serious misconduct and willful disobedience. It found that the petitioners failed to comply with various memoranda directing them to transfer to other workplaces and to attend training seminars for the intended reorganization and reshuffling. CA RULING: The CA affirmed the NLRC’s ruling. The CA held that the petitioners were afforded substantive and procedural due process. It also upheld the NLRC’s findings on the petitioners’ monetary claims. The CA denied the petitioners’ MR. 135 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS ISSUES: (1) Did the respondents perfect their appeal before the NLRC? (2) Were the petitioners illegally dismissed and are thus entitled to backwages, salary differential, holiday, service incentive leave, and thirteenth month pays? (3) Are the petitioners entitled to overtime and premium pay? SC RULING: (1) YES. Paragraph 2, Article 223 of the Labor Code provides that "[i]n case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from." The issue of the appeal bond’s validity may be raised for the first time on appeal since its proper filing is a jurisdictional requirement. The requirement that the appeal bond should be issued by an accredited bonding company is mandatory and jurisdictional. The rationale of requiring an appeal bond is to discourage the employers from using an appeal to delay or evade the employees' just and lawful claims. It is intended to assure the workers that they will receive the money judgment in their favor upon the dismissal of the employer’s appeal. In the present case, the respondents filed a surety bond issued by Security Pacific. At that time, Security Pacific was still an accredited bonding company. However, the NLRC revoked its accreditation on February 16, 2003. 24 Nonetheless, this subsequent revocation should not prejudice the respondents who relied on its then subsisting accreditation in good faith. The CA also correctly ruled that the NLRC properly gave due course to the respondents’ supplemental appeal. Neither the laws nor the rules require the verification of the supplemental appeal. Furthermore, verification is a formal, not a jurisdictional, requirement. It is mainly intended for the assurance that the matters alleged in the pleading are true and correct and not of mere speculation. Also, a supplemental appeal is merely an addendum to the verified memorandum on appeal that was earlier filed in the present case; hence, the requirement for verification has substantially been complied with. In labor cases, strict adherence to the technical rules of procedure is not required. Time and again, we have allowed evidence to be submitted for the first time on appeal with the NLRC in the interest of substantial justice. Thus, we have consistently supported the rule that labor officials should use all reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, in the interest of due process. The respondents failed to sufficiently prove the allegations sought to be proven. Why the respondents’ photocopied and computerized copies of documentary evidence were not presented at the earliest opportunity is a serious question that lends credence to the petitioners’ claim that the respondents fabricated the evidence for purposes of appeal. While we generally admit in evidence and give probative value to photocopied documents in administrative proceedings, allegations of forgery and fabrication should prompt the adverse party to present the original documents for inspection. It was also gross error for the CA to affirm the NLRC’s proposition that "[i]t is of common knowledge that there are many people who use at least two or more different signatures." The NLRC cannot take judicial notice that many people use at least two signatures, especially in this case where the petitioners themselves disown the signatures in the respondents’ assailed documentary evidence. The NLRC’s position is unwarranted and is patently unsupported by the law and jurisprudence. (2) YES. In termination cases, the burden of proving just and valid cause for dismissing an employee from his employment rests upon the employer. The employer’s failure to discharge this burden results in the finding that the dismissal is unjustified. This is exactly what happened in the present case. As in illegal dismissal cases, the general rule is that the burden rests on the defendant to prove payment rather than on the plaintiff to prove non-payment of these money claims. The rationale for this rule is that the pertinent personnel files, payrolls, records, remittances and other similar documents – which will show that differentials, service incentive leave and other claims of workers have been paid – are not in the possession of the worker but are in the custody and control of the employer. 136 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS (3) NO. CA was correct in its finding that the petitioners failed to provide sufficient factual basis for the award of overtime, and premium pays for holidays and rest days. The burden of proving entitlement to overtime pay and premium pay for holidays and rest days rests on the employee because these are not incurred in the normal course of business. In the present case, the petitioners failed to adduce any evidence that would show that they actually rendered service in excess of the regular eight working hours a day, and that they in fact worked on holidays and rest days.
137 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 86. ANDREW JAMES MCBURNIE v. EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC. G.R. Nos. 178034 & 178117 G R. Nos. 186984-85 October 17, 2013 REYES, J.: APPEAL BOND DOCTRINE: On the matter of the filing and acceptance of motions to reduce appeal bond, as provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the following guidelines shall be observed: (a) The filing of a motion to reduce appeal bond shall be entertained by the NLRC subject to the following conditions: (1) there is meritorious ground; and (2) a bond in a reasonable amount is posted; (b) For purposes of compliance with condition no. (2), a motion shall be accompanied by the posting of a provisional cash or surety bond equivalent to ten percent (10%) of the monetary award subject of the appeal, exclusive of damages and attorney's fees; (c) Compliance with the foregoing conditions shall suffice to suspend the running of the 10-day reglementary period to perfect an appeal from the labor arbiter's decision to the NLRC; (d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the final amount of bond that shall be posted by the appellant, still in accordance with the standards of meritorious grounds and reasonable amount; and (e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the amount of the provisional bond, the appellant shall be given a fresh period of ten 10 days from notice of the NLRC order within which to perfect the appeal by posting the required appeal bond. FACTS: McBurnie, an Australian national, instituted a complaint for illegal dismissal and other monetary claims against the respondents. McBurnie claimed that he signed an employment agreement with the company EGI as an Executive Vice-President. On the other hand, the respondents opposed the complaint, contending that their agreement with McBurnie was to jointly invest in and establish a company for the management of hotels and did not intend to create an employer-employee relationship. LA RULING: McBurnie was illegally dismissed from employment. The respondents appealed the LA’s Decision to the NLRC. They filed their Memorandum of Appeal and Motion to Reduce Bond, and posted an appeal bond in the amount of P100,000.00. The respondents contended in their Motion to Reduce Bond, inter alia, that the monetary awards of the LA were null and excessive, allegedly with the intention of rendering them incapable of posting the necessary appeal bond. They claimed that an award of "more than P60 Million Pesos to a single foreigner who had no work permit and who left the country for good one month after the purported commencement of his employment" was a patent nullity. Furthermore, they claimed that because of their business losses that may be attributed to an economic crisis, they lacked the capacity to pay the bond of almost P60 Million, or even the millions of pesos in premium required for such bond. NLRC RULING: The NLRC denied the motion to reduce bond, explaining that "in cases involving monetary award, an employer seeking to appeal the LA’s decision to the Commission is unconditionally required by Art. 223, Labor Code to post bond in the amount equivalent to the monetary award. Thus, the NLRC required from the respondents the posting of an additional bond in the amount of P54,083,910.00. CA RULING: The CA allowed the respondents’ motion to reduce appeal bond to P10,000,000.00 and directing the NLRC to give due course to their appeal. The CA explained that "while Art. 223 of the Labor Code requiring bond equivalent to the monetary award is explicit, Section 6, Rule VI of the NLRC Rules of Procedure, as amended, recognized as exception a motion to reduce bond upon meritorious grounds and upon posting of a bond in a reasonable amount in relation to the monetary award." ISSUE: Is the 10 million pesos bond substantial and special meritorious circumstance to merit reconsideration of the appeal? SC RULING: YES. The 10 million pesos bond is substantial and a special meritorious circumstance to merit reconsideration of the appeal. 138 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS The present rule on the matter is Section 6, Rule VI of the 2011 NLRC Rules of Procedure, which was substantially the same provision in effect at the time of the respondents’ appeal to the NLRC, and which reads: No motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of a bond in a reasonable amount in relation to the monetary award. Prevailing rules and jurisprudence allow the reduction of appeal bonds. While the bond may be reduced upon motion by the employer, this is subject to the conditions that (1) the motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted by the appellant, otherwise the filing of the motion to reduce bond shall not stop the running of the period to perfect an appeal. The qualification effectively requires that unless the NLRC grants the reduction of the cash bond within the 10 day reglementary period, the employer is still expected to post the cash or surety bond securing the full amount within the said 10-day period. If the NLRC does eventually grant the motion for reduction after the reglementary period has elapsed, the correct relief would be to reduce the cash or surety bond already posted by the employer within the 10-day period.
139 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 87. WATERFRONT CEBU CITY CASINO HOTEL, INC. AND MARCO PROTACIO v. ILDEBRANDO LEDESMA G.R. No. 197556 March 25, 2015 VILLARAMA, JR., J.: APPEAL DOCTRINE: As to the 60-period reglementary period of filing an appeal, the relaxation of procedural rules may be allowed only when there are exceptional circumstances to justify the same. FACTS: Respondent was employed as a House Detective at Waterfront. On the basis of the complaints filed before Waterfront by Christe Mandal, a supplier of a concessionaire of Waterfront, and Rosanna Lofranco, who was seeking a job at the same hotel, Ledesma was dismissed from employment. From the affidavits and testimonies of Christe Mandal and Rosanna Lofranco during the administrative hearings conducted by Waterfront, the latter found, among others, that Ledesma kissed and mashed the breasts of Christe Mandal inside the hotel’s elevator, and exhibited his penis and asked Rosanna Lofranco to masturbate him at the conference room of the hotel. Ledesma filed a complaint for illegal dismissal. LA RULING: The LA found that the allegations leveled against Ledesma are mere concoctions, and concluded that Ledesma was illegally dismissed, and ordered the petitioner among others to reinstate Ledesma. NLRC RULING: The NLRC reversed the decision of the LA. The NLRC denied Ledesma’s motion for reconsideration in a Resolution dated February 22, 2010. A copy of the said Resolution was received by Atty. Gines Abellana, Ledesma’s counsel of record, on March 15, 2010. On May 17, 2010, or sixty-three (63) days after Atty. Abellana received a copy of the NLRC’s Resolution denying the motion for reconsideration, said counsel filed before the CA a petition for certiorari under Rule 65 of the Rules of Court. In its Comment, Waterfront prayed for the outright dismissal of the petition on the ground that it was belatedly filed. CA RULING: The CA entertained the petition and reinstated the decision of the LA. ISSUE: Is the unjustified failure of Ledesma to file his petition for certiorari before the CA within the 60-day period a ground for the outright dismissal of said petition? SC RULING: YES. The unjustified failure of Ledesma to file his petition for certiorari before the CA within the 60-day period a ground for the outright dismissal of said petition. A reading of the rulings leads to the simple conclusion that the case of Laguna Metts Corporation involves a strict application of the general rule that petitions for certiorari must be filed strictly within sixty (60) days from notice of judgment or from the order denying a motion for reconsideration. Domdom case, on the other hand, relaxed the rule and allowed an extension of the sixty (60)-day period subject to the Court’s sound discretion. In relaxing the rules and allowing an extension, Thenamaris Philippines, Inc. v. Court of Appeals reiterated the necessity for the party invoking liberality to advance a reasonable or meritorious explanation for the failure to file the petition for certiorari within the 60-day period. The relaxation of procedural rules may be allowed only when there are exceptional circumstances to justify the same. There should be an effort on the part of the party invoking liberality to advance a reasonable or meritorious explanation for his/her failure to comply with the rules. Moreover, those who seek exemption from the application of a procedural rule have the burden of proving the existence of exceptionally meritorious reason warranting such departure. Both in his petition and amended petition, Ledesma never invoked the liberality of the CA nor endeavored to justify the belated filing of his petition. On the contrary, Ledesma remained firm that his petition was filed with the CA within the reglementary period. Absent valid and compelling reasons for the procedural lapse, the desired leniency cannot be accorded to Ledesma. In sum, the late filing by Ledesma of his petition for certiorari, and his failure to justify his procedural lapse to merit a lenient application of the rules divested the CA of jurisdiction to entertain the petition. 140 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 88. PIONEER TEXTURIZING CORP. and/or JULIANO LIM v. NATIONAL LABOR RELATIONS COMMISSION, PIONEER TEXTURIZING WORKERS UNION and LOURDES A. DE JESUS G.R. No. 118651 October 16, 1997 FRANCISCO, J.: REINSTATEMENT ASPECT OF LA’s DECISION DOCTRINE: An award or order for reinstatement is self-executory, and does not require a writ of execution, much less a motion for its issuance. FACTS: Private respondent Lourdes A. de Jesus is petitioners’ reviser/trimmer since 1980. As reviser/trimmer, de Jesus based her assigned work on a paper note posted by petitioners. The petitioners terminated her employment for dishonesty and tampering of official records and documents with the intention of cheating. De Jesus maintained that she merely committed a mistake. LA RULING: Petitioners are guilty of illegal dismissal. Petitioners were accordingly ordered to reinstate de Jesus to her previous position without loss of seniority rights and with full backwages from the time of her suspension. NLRC RULING: The NLRC declared that the status quo between them should be maintained and affirmed the Labor Arbiters order of reinstatement, but without backwages. The NLRC further directed petitioner to pay de Jesus her back salaries from the date she filed her motion for execution on September 21, 1993 up to the date of the promulgation of the decision. Petitioner’s Argument: An order for reinstatement is not self-executory. They maintain that even if a writ of execution was issued, a timely appeal coupled by the posting of appropriate supersedeas bond, which they did in this case, effectively forestalled and stayed execution of the reinstatement order of the Labor Arbiter. ISSUE: Is a writ of execution required in an order for reinstatement? SC RULING: NO. A writ of execution is not required in an order for reinstatement. ART. 223. Appeal. --Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. xxx xxx xxx In an event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein. xxx xxx xxx Under the said provision of law, the decision of the Labor Arbiter reinstating a dismissed or separated employee insofar as the reinstatement aspect is concerned, shall be immediately executory, even pending appeal. The employer shall reinstate the employee concerned either by: (a) actually admitting him back to work under the same terms and conditions prevailing prior to his dismissal or separation; or (b) at the option of the employer, merely reinstating him in the payroll. Immediate reinstatement is mandated and is not stayed by the fact that the employer has appealed, or has posted a cash or surety bond pending appeal.
141 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 89. ALEJANDRO ROQUERO vs. PHILIPPINE AIRLINES, INC. G.R. No. 152329 April 22, 2003 PUNO, J.: REINSTATEMENT ASPECT OF LA’s DECISION DOCTRINE: The reinstatement aspect of a labor tribunals order is immediately executory unless there is a restraining order or preliminary injunction. FACTS: Roquero, along with Rene Pabayo, were ground equipment mechanics of respondent PAL. From the evidence on record, it appears that Roquero and Pabayo were caught red-handed possessing and using Methampethamine Hydrochloride or shabu in a raid conducted by PAL security officers and NARCOM personnel. Roquero and Pabayo were dismissed by PAL. Thus, they filed a case of illegal dismissal. LA RULING: The dismissal of Roquero and Pabayo was upheld. The LA found both parties at fault PAL for applying means to entice the complainants into committing the infraction and the complainants for giving in to the temptation and eventually indulging in the prohibited activity. Nonetheless, separation pay and attorneys fees are awarded. NLRC RULING: It ruled in favor of complainants as it likewise found PAL guilty of instigation. It ordered reinstatement to their former positions but without backwages. Complainants did not appeal from the decision but filed a motion for a writ of execution of the order of reinstatement. The LA granted the motion but PAL refused to execute the said order on the ground that they have filed a Petition for Review before the SC which was reffered to CA. CA RULING: It reversed the decision of the NLRC and reinstated the decision of the LA insofar as it upheld the dismissal of Roquero. However, it denied the award of separation pay and attorney’s fees to Roquero on the ground that one who has been validly dismissed is not entitled to those benefits. ISSUE: Can the executory nature of the decision, more so the reinstatement aspect of a labor tribunals order be halted by a petition having been filed in higher courts without any restraining order or preliminary injunction having been ordered in the meantime? SC RULING: NO. The executory nature of the decision, more so the reinstatement aspect of a labor tribunals order cannot be halted by a petition having been filed in higher courts without any restraining order or preliminary injunction having been ordered in the meantime. The order of reinstatement is immediately executory. The unjustified refusal of the employer to reinstate a dismissed employee entitles him to payment of his salaries effective from the time the employer failed to reinstate him despite the issuance of a writ of execution. Unless there is a restraining order issued, it is ministerial upon the Labor Arbiter to implement the order of reinstatement. In the case at bar, no restraining order was granted. Thus, it was mandatory on PAL to actually reinstate Roquero or reinstate him in the payroll. Having failed to do so, PAL must pay Roquero the salary he is entitled to, as if he was reinstated, from the time of the decision of the NLRC until the finality of the decision of this Court. We reiterate the rule that technicalities have no room in labor cases where the Rules of Court are applied only in a suppletory manner and only to effectuate the objectives of the Labor Code and not to defeat them. Hence, even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. On the other hand, if the employee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period.
142 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 90. AIR PHILIPPINES CORPORATION vs. ENRICO E. ZAMORA G.R. NO. 148247 August 7, 2006 AUSTRIA-MARTINEZ, J.: REINSTATEMENT ASPECT OF LA’s DECISION DOCTRINE: Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. FACTS: Enrico Zamora was employed with Air Philippines Corporation (APC) as a Flight Deck Crew. He applied for promotion to the position of airplane captain and underwent the requisite training program. After completing training, he inquired about his promotion but APC did not act on it; instead, it continued to give him assignments as flight deck crew. Thus, Zamora filed a Complaint with the LA. He argued that the act of APC of withholding his promotion rendered his continued employment with it oppressive and unjust. He therefore asked that APC be held liable for constructive dismissal. LA RULING: Respondent was liable for illegal dismissal and ordered the respondent, among others, to reinstate complainant to his position as Captain without loss of seniority right immediately upon receipt the decision. NLRC RULING: It held that no dismissal, constructive or otherwise, took place for it was Zamora himself who voluntarily terminated his employment by not reporting for work and by joining a competitor Grand Air. However, it ordered APC to pay salaries and allowances to complainant arose from the order of his reinstatement which is executory even pending appeal of respondent questioning the same, pursuant to Article 223 of the Labor Code. CA RULING: It dismissed the petition of APC for failure of petitioner to attach copies of all pleadings (such complaint, answer, position paper) and other material portions of the record as would support the allegations therein. ISSUE: Is the NLRC correct in ordering the APC to pay Zamora the salaries and allowances that arose from the order of his reinstatement of the LA? SC RULING: YES. The NLRC is correct in ordering the APC to pay Zamora the salaries and allowances that arose from the order of his reinstatement of the LA The premise of the award of unpaid salary to respondent is that prior to the reversal by the NLRC of the decision of the LA, the order of reinstatement embodied therein was already the subject of an alias writ of execution even pending appeal. Although petitioner did not comply with this writ of execution, its intransigence made it liable nonetheless to the salaries of respondent pending appeal. There is logic in this reasoning of the NLRC. In Aris (Phil.) Inc. v. National Labor Relations Commission, we held: “Then, by and pursuant to the same power (police power), the State may authorize an immediate implementation, pending appeal, of a decision reinstating a dismissed or separated employee since that saving act is designed to stop, although temporarily since the appeal may be decided in favor of the appellant, a continuing threat or danger to the survival or even the life of the dismissed or separated employee and his family.”
143 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 91. LUNESA O. LANSANGAN AND ROCITA CENDAA v. AMKOR TECHNOLOGY PHILIPPINES, INC., G.R. NO. 177026 January 30, 2009 CARPIO MORALES, J.: DOCTRINE: In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
FACTS: An anonymous e-mail was sent to the General Manager of Amkor Technology Philippines (respondent) detailing allegations of malfeasance on the part of its supervisory employees Lunesa Lansangan and Rosita Cendaña (petitioners) for "stealing company time. Respondent thus investigated the matter, requiring petitioners to submit their written explanation. In handwritten letters, petitioners admitted their wrongdoing. Respondent thereupon terminated petitioners for "extremely serious offenses" as defined in its Code of Discipline. Petitioners filed a complaint for illegal dismissal. LA RULING: The Labor Arboter dismissed the petitioners’ complaint. Dismissal was for a valid cause. The Arbiter, however, ordered the reinstatement of petitioners to their former positions without backwages "as a measure of equitable and compassionate relief" owing mainly to petitioners’ prior unblemished employment records, show of remorse, harshness of the penalty and defective attendance monitoring system of respondent. Respondent appealed. Meanwhile, the petitioners moved to the issuance of “writ of reinstatement”. The Arbiter issued an alias writ of execution following which respondent’s bank account at Equitable-PCI Bank was garnished. Respondent thereupon moved for the quashal of the alias writ of execution and lifting of the notice of garnishment, which the Arbiter, Respondent appealed to the NLRC. NLRC RULING: NLRC, granted respondent’s appeals by deleting the reinstatement aspect of the Arbiter’s decision and setting aside the Arbiter’s Alias Writ of Execution and Notice of Garnishment. Petitioners file a motion for reconsideration which was denied. They subsequently appealed to CA. CA RULING: Affirming the finding of LA and NLRC that there was a valid dismissal. Respondent were ordered to "pay petitioners their corresponding backwages without qualification and deduction for the period covering October 20, 2004 (date of the Arbiter’s decision) up to June 30, 2005 (date of the NLRC Decision)," citing Article 223 of the Labor Code and Roquero v. Philippine Airlines. Both parties’ filed their respective motions for partial reconsideration which were denied. Only petitioners appealed to the SC. Petitioners highlight the Court’s ruling in Roquero v. Philippine Airlines where the therein employer was ordered to pay the wages to which the therein employee was entitled from the time the reinstatement order was issued until the FINALITY of this Court’s decision. ISSUE: WON petitioners (Lansangan et al) are entitled to full backwages from time the reinstatement order was issued until the FINALITY of SC’s decision. SC RULING: NO. The decision of the Arbiter finding that petitioners committed "dishonesty as a form of serious misconduct and fraud, or breach of trust" had become final, petitioners not having appealed the same before the NLRC as in fact they even moved for the execution of the reinstatement aspect of the decision. It bears recalling that it was only respondent which assailed the Arbiter's decision to the NLRC - to solely question the propriety of the order for reinstatement, and it succeeded. Roquero, as well as Article 22318 of the Labor Code on which the appellate court also relied, finds no application in the present case. Article 223 concerns itself with an interim relief, granted to a dismissed or separated employee while the case for illegal dismissal is pending appeal, as what happened in Roquero. It does not apply where there is no finding of illegal dismissal, as in the present case. The Arbiter found petitioners' dismissal to be valid. Such finding had, as stated earlier, become final, petitioners not having appealed it. Following Article 279 which provides: 144 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement (Emphasis, underscoring and italics supplied), petitioners are not entitled to full backwages as their dismissal was not found to be illegal. Agabon v. NLRC19 so states '' payment of backwages and other benefits is justified only if the employee was unjustly dismissed.
WHEREFORE, the petition is DENIED.
145 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 92. MARILOU S. GENUINO v. NATIONAL LABOR RELATIONS COMMISSION, CITIBANK, N.A., WILLIAM FERGUSON, and AZIZ RAJKOTWALA G.R. NOS. 142732-33 December 4, 2007 DOCTRINE: “If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid, then the employer has the right to require the dismissed employee on payroll reinstatement to refund the salaries s/he received while the case was pending appeal, or it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from his/her employer under existing laws, collective bargaining agreement provisions, and company practices. However, if the employee was reinstated to work during the pendency of the appeal, then the employee is entitled to the compensation received for actual services rendered without need of refund.” FACTS: Genuino was employed by Citibank, an American banking corporation duly licensed to do business in the Philippines, sometime in January 1992 as Treasury Sales Division Head with the rank of Assistant Vice-President. Genuino's employment was terminated by Citibank on grounds of (1) serious misconduct, (2) willful breach of the trust reposed upon her by the bank, and (3) commission of a crime against the bank. On October 15, 1993, Genuino filed before the Labor Arbiter a Complaint against Citibank for illegal suspension and illegal dismissal with damages and prayer for temporary restraining order and/or writ of preliminary injunction. LA RULING: Labor Arbiter found Marilou’s dismissal to be without just cause and in violation of the latter’s right to due process. LA rendered ordered for her reinstatement immediately to her former position, with backwages, moral and exemplary damages plus 10% of the total monetary award as attorney's fees. NLRC RULING: The NLRC reversed the Labor Arbiter's decision, declaring the dismissal of the complainant valid and legal on the ground of serious misconduct and breach of trust and confidence and consequently dismissing the complaint a quo; but (3) ORDERING the respondent bank to pay the salaries due to the complainant from the date it reinstated complainant in the payroll (computed at P60,000.00 a month, as found by the Labor Arbiter) up to and until the date of this decision. Genuino prayed for the reversal of the NLRC's decision insofar as it declared her dismissal valid and legal. Meanwhile, Citibank questioned the NLRC's order to pay Genuino's salaries from the date of reinstatement until the date of the NLRC's decision. CA RULING: The Court found that the dismissal of Genuino is for a legal and valid ground. It affirmed the ruling of the NLRC but ordered Citibank to pay Marilou P5,000 as indemnity for non-observance of due process. ISSUES: 1. Whether or not the dismissal of genuino is for a just cause? and in accordance with due process? 2. WON Citibank needs to "to pay the salaries due to the complainant from the date it reinstated complainant in the payroll (computed at P60,000.00 a month, as found by the Labor Arbiter) up to and until the date of this decision," SC RULING: 1. YES, dismissal was for just cause but LACKED DUE PROCESS. The Implementing Rules and Regulations of the Labor Code provide that any employer seeking to dismiss a worker shall furnish the latter a written notice stating the particular acts or omissions constituting the grounds for dismissal.25 The purpose of this notice is to sufficiently apprise the employee of the acts complained of and enable him/her to prepare his/her defense. In this case, the letters dated August 23, September 13 and 20, 1993 sent by Citibank did not identify the particular acts or omissions allegedly committed by Genuino. The August 23, 1993 letter charged Genuino with having "some knowledge and/or involvement" in some transactions "which have the appearance of being irregular at the 146 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS least and may even be fraudulent." The September 13, 1993 letter, on the other hand, mentioned "irregular transactions" involving Global Pacific and/or Citibank and 12 bank clients. Lastly, the September 20, 1993 letter stated that Genuino and "Mr. Dante Santos, using the facilities of their family corporations (Torrance and Global) appear to have participated in the diversion of bank clients' funds from Citibank to, and investment thereof in, other companies and that they made money in the process, in violation of the conflict of law rule [sic]." The extent of Genuino's alleged knowledge and participation in the diversion of bank's clients' funds, manner of diversion, and amounts involved; the acts attributed to Genuino that conflicted with the bank's interests; and the circumstances surrounding the alleged irregular transactions, were not specified in the notices/letters. While the bank gave Genuino an opportunity to deny the truth of the allegations in writing and participate in the administrative investigation, the fact remains that the charges were too general to enable Genuino to intelligently and adequately prepare her defense. The two-notice requirement of the Labor Code is an essential part of due process. The first notice informing the employee of the charges should neither be pro-forma nor vague. It should set out clearly what the employee is being held liable for. The employee should be afforded ample opportunity to be heard and not mere opportunity. As explained in King of Kings Transport, Inc., ample opportunity to be heard is especially accorded the employees sought to be dismissed after they are specifically informed of the charges in order to give them an opportunity to refute such accusations leveled against them. Since the notice of charges given to Genuino is inadequate, the dismissal could not be in accordance with due process. While we hold that Citibank failed to observe procedural due process, we nevertheless find Genuino's dismissal justified. 2. NO. Anent the directive of the NLRC in its September 3, 1994 Decision ordering Citibank "to pay the salaries due to the complainant fromthe date it reinstated complainant in the payroll (computed at P60,000.00 a month, as found by the Labor Arbiter) up to and until the date of this decision," the Court hereby cancels said award in view of its finding that the dismissal of Genuino is for a legal and valid ground. Ordinarily, the employer is required to reinstate the employee during the pendency of the appeal pursuant to Art. 223, paragraph 3 of the Labor Code, which states: In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein. If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid, then the employer has the right to require the dismissed employee on payroll reinstatement to refund the salaries s/he received while the case was pending appeal, or it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from his/her employer under existing laws, collective bargaining agreement provisions, and company practices. However, if the employee was reinstated to work during the pendency of the appeal, then the employee is entitled to the compensation received for actual services rendered without need of refund. Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her dismissal is based on a just cause, then she is not entitled to be paid the salaries stated in item no. 3 of the fallo of the September 3, 1994 NLRC Decision.
147 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 93. JUANITO A. GARCIA and ALBERTO J. DUMAGO v. PHILIPPINE AIRLINES G.R. No. 164856 January 20, 2009 CARPIO MORALES, J.: DOCTRINE: While reinstatement pending appeal aims to avert the continuing threat or danger to the survival or even the life of the dismissed employee and his family, it does not contemplate the period when the employer-corporation itself is similarly in a judicially monitored state of being resuscitated in order to survive. FACTS: On July 24, 1995, an administrative charge was filed by PAL against its employees-herein petitioners after they were allegedly caught in the act of sniffing shabu when a team of company security personnel and law enforcers raided the PAL Technical Center’s Toolroom Section. On October 9, 1995, after due notice, PAL dismissed petitioners for transgressing the PAL Code of Discipline. Petitioners filed a complaint for illegal dismissal and damages. Prior to the promulgation of the Labor Arbiter’s decision, the Securities and Exchange Commission (SEC) placed PAL, which was suffering from severe financial losses, under an Interim Rehabilitation Receiver. January 1999-The Interim Rehabilitation Receiver was subsequently replaced by a Permanent Rehabilitation Receiver. LA RULING: The Labor Arbiter found that there was illegal dismissal, ordering PAL to, inter alia, immediately comply with the reinstatement aspect of the decision. On October 5, 2000 (note: after NLRC reversed LA’s decision), the Labor Arbiter issued a Writ of Execution (Writ) respecting the reinstatement aspect of his January 11, 1999 Decision, and on October 25, 2000, he issued a Notice of Garnishment. PAL thereupon moved to quash the Writ and to lift the Notice while petitioners moved to release the garnished amount. NLRC RULING: The NLRC reversed said decision and dismissed petitioners’ complaint for lack of merit. However later on it affirmed the validity of the Writ and the Notice issued by the Labor Arbiter but suspended and referred the action to the Rehabilitation Receiver for appropriate action. CA RULING: The CA nullified the NLRC Resolutions on two grounds: (1) a subsequent finding of a valid dismissal removes the basis for implementing the reinstatement aspect of a labor arbiter’s decision (the first ground), and (2) the impossibility to comply with the reinstatement order due to corporate rehabilitation provides a reasonable justification for the failure to exercise the options under Article 223 of the Labor Code. ISSUE: Whether petitioners may collect their wages during the period between the Labor Arbiter’s order of reinstatement pending appeal and the NLRC decision overturning that of the Labor Arbiter, now that PAL has exited from rehabilitation proceedings. SC RULING: NO. Respondent’s failure to exercise the alternative options of actual reinstatement and payroll reinstatement was JUSTIFIED. While reinstatement pending appeal aims to avert the continuing threat or danger to the survival or even the life of the dismissed employee and his family, it does not contemplate the period when the employer-corporation itself is similarly in a judicially monitored state of being resuscitated in order to survive. PAL, during the period material to the case, was effectively deprived of the alternative choices under Article 223 of the Labor Code, not only by virtue of the statutory injunction but also in view of the interim relinquishment of management control to give way to the full exercise of the powers of the rehabilitation receiver. Had there been no need to rehabilitate, respondent may have opted for actual physical reinstatement pending appeal to optimize the utilization of resources. Then again, though the management may think this wise, the rehabilitation receiver may decide otherwise, not to mention the subsistence of the injunction on claims. In sum, the obligation to pay the employee’s salaries upon the employer’s failure to exercise the alternative options under Article 223 of the Labor Code is not a hard and fast rule, considering the inherent constraints of corporate rehabilitation. 148 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 94. MT. CARMEL COLLEGE v. JOCELYN RESUENA, et. al. G.R. No. 173076 October 10, 2007 CHICO-NAZARIO, J.: DOCTRINE: An illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages. FACTS: Petitioner is a private educational institution administered by the Carmelite Fathers at New Escalante, Negros Occidental while respondents were the employees of petitioner. On November 1997 respondents, together with several faculty members, non-academic personnel, and other students, participated in a protest action against petitioner. Because of this, respondents were terminated by petitioner on 15 May 1998. Thus, petitioner filed separate complaints before Regional Arbitration Branch VI of the NLRC in Bacolod City, charging petitioner with illegal dismissal and claimed 13th month pay, separation pay, damages and attorney's fees ISSUES: 1. WON reinstatement in the instant case is self-executory and does not need a writ of execution for its enforcement 2. WON the continuing award of backwages is proper LA RULING: Labor Arbiter Drilon found that they were not illegally dismissed but ordered that they be awarded 13th month pay, separation pay and attorney’s fees in the amount of P334,875.47. NLRC RULING: the NLRC reversed the findings of the Labor Arbiter ruling that the termination of respondents was illegal and ordering the payment of back wages of respondents from 15 May 1998 up to 25 May 1999. It further directed the reinstatement of respondents or payment of separation pay, with back wages. CA RULING: The CA affirmed NLRC’s decision. SC RULING: 1. NO. An order for reinstatement must be specifically declared and cannot bepresumed; like back wages, it is a separate and distinct relief given to an illegally dismissed employee. There being no specific order for reinstatement and the order being for complainant’s separation, there can be no basis for the award of salaries/back wages during the pendency of appeal. This Court had declared in the aforesaid case that reinstatement during appeal iswarranted only when the Labor Arbiter himself rules that the dismissed employee should be reinstated. But this was precisely because on appeal to the NLRC, it found that there was no illegal dismissal; thus, neither reinstatement nor back wages may be awarded. 2. YES. An illegally dismissed employee is entitled to two reliefs: back wages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and theemployer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and back wages. The normal consequences of respondents’ illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of back wages computed from the time compensation was withheld up to the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to one (1)month salary for every year of service should be awarded as an alternative. Thepayment of separation pay is in addition to payment of back wages. Concomitantly, it is evident that respondents backwages should not be limited to the period from 15 May 1998 to 25 May 1999. The backwages due respondents must be computed from the time they were unjustly dismissed until their actual reinstatement to their former position or upon petitioners payment of separation pay to them if reinstatement is no longer feasible. Thus, until petitioner actually implements the reinstatement aspect of the NLRC Decision dated 30 October 2001, as affirmed in the Court of Appeals Decision dated 17 March 2004 in CA-G.R. SP No. 80639, its obligation to respondents, insofar as accrued backwages and other benefits are concerned, continues to accumulate. 149 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 95. NERISSA BUENVIAJE et al v. THE HONORABLE COURT OF APPEALS (SPECIAL FORMER SEVENTH DIVISION), HONORABLE ARBITER ROMULUS PROTASIO, COTTONWAY MARKETING CORPORATION and MICHAEL G. TONG, President and General Manager DOCTRINE: In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein FACTS: Petitioners were former employees of Cottonway Marketing Corp. (Cottonway), hired as promo girls for their garment products. In October, 1994, after their services were terminated as the company was allegedly suffering business losses, petitioners filed with the National Labor Relations Commission (NLRC) a complaint for illegal dismissal, underpayment of salary, and non-payment of premium pay for rest day, service incentive leave pay and thirteenth month pay against Cottonway Marketing Corp. and Network Fashion Inc./JCT International Trading. LA RULING: The Labor Arbiter issued a Decision finding petitioners' retrenchment valid and ordering Cottonway to pay petitioners' separation pay and their proportionate thirteenth month pay. NLRC RULING: The NLRC, in its Decision reversed the Decision of the Labor Arbiter and ordered the reinstatement of petitioners without loss of seniority rights and other privileges. It also ordered Cottonway to pay petitioners their proportionate thirteenth month pay and their full backwages inclusive of allowances and other benefits, or their monetary equivalent computed from the time their salaries were withheld from them up to the date of their actual reinstatement. Cottonway filed with the NLRC a manifestation stating that they have complied with the order of reinstatement by sending notices dated June 5, 1996 requiring the petitioners to return to work, but to no avail; and consequently, they sent letters to petitioners dated August 1, 1996 informing them that they have lost their employment for failure to comply with the return to work order. On November 6, 1997, petitioners filed with the NLRC a motion for execution of its Decision on the ground that it had become final and executory. Nonetheless, Labor Arbiter Romulus S. Protasio issued an Order declaring that the award of backwages and proportionate thirteenth month pay to petitioners should be limited from the time of their illegal dismissal up to the time they received the notice of termination sent by the company upon their refusal to report for work despite the order of reinstatement. ISSUE: Whether or not petitioners’ failure to immediately comply with an order to return for work constitutes abandonment which justifies their dismissal SC RULING: NO. The facts of this case do not support the claim of Cottonway that petitioners have abandoned their desire to return to their previous work at said company. It appears that three months after the NLRC had rendered its decision ordering petitioners reinstatement to their former positions, Cottonway sent individual notices to petitioners mandating them to immediately report to work. The petitioners, however, were not able to promptly comply with the order. Instead, their counsel, Atty. Roberto LL. Peralta, sent a reply letter to Atty. De Luna stating that his clients were not in a position to comply with said order since the NLRC has not yet finally disposed of the case. Consequently, Cottonway sent the petitioners individual notices of termination. We note that Cottonway, before finally deciding to dispense with their services, did not give the petitioners the opportunity to explain why they were not able to report to work. The records also do not bear any proof that all the petitioners received a copy of the letters. Cottonway merely claimed that some of them have left the country and some have found other employment. This, however, does not necessarily mean that petitioners were no longer interested in resuming their employment at Cottonway as it has not been shown that their employment in the other companies was permanent. It should be expected that petitioners would seek other means of income to tide them over during the time that the legality of their termination is under litigation. Furthermore, petitioners never 150 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS abandoned their suit against Cottonway. While the case was pending appeal before the NLRC, the Court of Appeals and this Court, petitioners continued to file pleadings to ensure that the company would comply with the directive of the NLRC to reinstate them and to pay them full backwages in case said decision is upheld. Moreover, in his reply to the companys first letter, petitioners counsel expressed willingness to meet with the companys representative regarding the satisfaction of the NLRC decision. It appears that the supposed notice sent by Cottonway to the petitioners demanding that they report back to work immediately was only a scheme to remove the petitioners for good. Petitioners failure to instantaneously abide by the directive gave them a convenient reason to dispense with their services. The law mandates the employer to either admit the dismissed employee back to work under the same terms and conditions prevailing prior to his dismissal or to reinstate him in the payroll to abate further loss of income on the part of the employee during the pendency of the appeal. But we cannot stretch the language of the law as to give the employer the right to remove an employee who fails to immediately comply with the reinstatement order, especially when there is reasonable explanation for the failure.
151 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 96. PFIZER INC v. VELASCO G.R. No. 177467 March 9, 2011 Leonardo-De Castro, J.: DOCTRINE: a. Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. b. An award by the Labor Arbiter for reinstatement shall be immediately executory even pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. To require the application for and issuance of a writ of execution as prerequisites for the execution of a reinstatement award would certainly betray the executory nature of a reinstatement order or award. c. An employee entitled to reinstatement shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. It is established in jurisprudence that reinstatement means restoration to a state or condition from which one had been removed or separated. It presupposes that the previous position from which one had been removed still exists, or that there is an unfilled position which is substantially equivalent or of similar nature as the one previously occupied by the employee FACTS: Private respondent Geraldine L. Velasco was employed with petitioner PFIZER, INC. as Professional Health Care Representative. Sometime in April 2003, Velasco had a medical work up for her high-risk pregnancy and was subsequently advised bed rest which resulted in her extending her leave of absence. While Velasco was still on leave, PFIZER through its Area Sales Manager personally served Velasco a "Show-cause Notice." Aside from mentioning about an investigation on her possible violations of company work rules regarding "unauthorized deals and/or discounts in money or samples and unauthorized withdrawal and/or pull-out of stocks" and instructing her to submit her explanation on the matter within 48 hours from receipt of the same, the notice also advised her that she was being placed under "preventive suspension" for 30 days and consequently ordered to surrender the some accountabilities. In response, Velasco sent a letter addressed to Cortez denying the charges. Later on, Velasco received a "Second Show-cause Notice" informing her of additional developments in their investigation Velasco sent a letter to PFIZER asking for additional time to answer the second Show-cause Notice. That same day, Velasco filed a complaint for illegal suspension with money claims before the Regional Arbitration Branch. The following day, PFIZER sent her a letter inviting her to a disciplinary hearing. Velasco received it under protest and informed PFIZER via the receiving copy of the said letter that she had lodged a complaint against the latter and that the issues that may be raised in the hearing "can be tackled during the hearing of her case." She likewise opted to withhold answering the second Show-Cause Notice. Thereafter, she received a third Show-Cause Notice. Finally, she received a termination letter. LA RULING: The Labor Arbiter held that petitioner employer illegally dismissed the respondent employee, ordering her reinstatement with backwages. Due to the order of reinstatement issued by the Labor Arbiter, petitioner employer sent a letter to the respondent employee to report back to work and assigned her to a new location (from Baguio branch where her residence was to Makati branch) NLRC RULING: Upheld LA. Pending its appeal, petitioner employer failed to immediately admit respondent employee back to work despite of an order of reinstatement. CA RULING: Reversed the decision and ruled that the dismissal was valid. However, it ordered petitioner employer to pay respondent employee her salary from the date of the Labor Arbiter’s decision ordering her reinstatement until the Court of Appeals rendered its decision declaring the dismissal valid. Petitioner employer questioned the order and refused to pay. ISSUES: a. Is it obligatory for the employer to reinstate and pay the wages of the dismissed employee during the period of appeal even if later on reversal by the higher court? b. Is the award by the Labor Arbiter for reinstatement immediately executory even pending appeal? c. Was Pfizer correct in requiring the respondent employee to assign her to a new location in compliance with the LA’s reinstatement order? 152 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS SC RULING: A. Yes. The Court held that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. On the other hand, if the employee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he received, more so, if he actually rendered services during the period. The payment of such wages cannot be deemed as unjust enrichment on respondent’s part. B. Yes. The Court held that that the provision of Article 223 is clear that an award by the Labor Arbiter for reinstatement shall be immediately executory even pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. The legislative intent is to make an award of reinstatement immediately enforceable, even pending appeal. To require the application for and issuance of a writ of execution as prerequisites for the execution of a reinstatement award would certainly betray the executory nature of a reinstatement order or award. In the case at bar, petitioner employer did not immediately admit respondent employee back to work which, according to the law, should have been done as soon as an order or award of reinstatement is handed down by the Labor Arbiter without need for the issuance of a writ of execution. C. No. The Court held that such is not a bona fide reinstatement. Under Article 223 of the Labor Code, an employee entitled to reinstatement shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. It is established in jurisprudence that reinstatement means restoration to a state or condition from which one had been removed or separated. The person reinstated assumes the position he had occupied prior to his dismissal. Reinstatement presupposes that the previous position from which one had been removed still exists, or that there is an unfilled position which is substantially equivalent or of similar nature as the one previously occupied by the employee. Applying the foregoing principle, it cannot be said that petitioner employer has a clear intent to reinstate respondent employee to her former position under the same terms and conditions nor to a substantially equivalent position. To begin with, the return-to-work order petitioner sent to respondent employee is silent with regard to the position it wanted the respondent employee to assume. Moreover, a transfer of work assignment without any justification therefor, even if respondent employee would be presumably doing the same job with the same pay, cannot be deemed as faithful compliance with the reinstatement order.
153 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 97. WENPHIL v. ABING G.R. No. 207983 Brion, J.:
April 7, 2014
DOCTRINE: The period for computing the backwages due to the respondents during the period of appeal should end on the date that a higher court reversed the labor arbitration ruling of illegal dismissal. FACTS: This case stemmed from a complaint for illegal dismissal filed by the respondents against Wenphil, docketed as NLRC NCR Case No. 30-03-00993-00. LA Bartolabac ruled that the respondents had been illegally dismissed by Wenphil. According to the LA, the allegation of serious misconduct against the respondents had no factual and legal basis. Consequently, LA Bartolabac ordered Wenphil to immediately reinstate the respondents to their respective positions or to equivalent ones, whether actuall or in the payroll. Also, the LA ordered Wenphil to pay the respondents their backwages until the date of their actual reinstatement. Wenphil appealed to the NLRC. In the meantime, the respondents moved for the immediate execution of the LA’s decision. NLRC issued a resolution affirming LA Bartolabac’s decision with modifications. Instead of ordering the respondents’ reinstatement, the NLRC directed Wenphil to pay the respondents their respective separation pay at the rate of one (1) month salary for every year of service. Also, the NLRC found that while the respondents had been illegally dismissed, they had not been illegally suspended. Thus, the period from February 3 to February 28, 2000 during which the respondents were on preventive suspension – was excluded by the NLRC in the computation of the respondents’ backwages. CA rendered its decision reversing the NLRC’s finding that the respondents had been illegally dismissed. According to the CA, there was enough evidence to show that the respondents had been guilty of serious misconduct; thus, their dismissal was for a valid cause. SC, in G.R. No. 162447, denied the respondents petition for review on certiorari and affirmed the CA’s decision and resolution. The respondents did not file any motion for reconsideration to question the SC’s decision; thus, the decision became final and executory. Sometime after the SC’s decision in G.R. No. 162447 became final and executory, the respondents filed with LA Bartolabac a motion for computation and issuance of writ of execution. The respondents asserted in this motion that although the CA’s ruling on the absence of illegal dismissal (as affirmed by the SC) was adverse to them, under the law and settled jurisprudence, they were still entitled to backwages from the time of their dismissal until the NLRC’s decision finding them to be illegally dismissed was reversed with finality. LA RULING: LA Bartolabac granted the respondents’ motion and, in an order, directed Wenphil to pay each complainant their salaries on reinstatement covering the period from Feb 15, 2002, the date Wenphil last paid the respondents’ respective salaries, until Nov. 8, 2002 when the NLRC’s decision finding the respondents illegally dismissed became final and executory. NLRC RULING: Affirmed LA CA RULING: CA, in setting aside the NLRC’s rulings, relied on the case of Pfizer v. Velasco (G.R. No. 177467, March 9, 2011, 645 SCRA 135) where the Supreme Court ruled that the backwages of the dismissed employee should be granted during the period of appeal until reversal by a higher court. Since the first CA decision that found the respondents had not been illegally dismissed was promulgated on Aug. 27, 2003, then the reversal by the higher court was effectively made on Aug. 27, 2003 ISSUE: Which computation is correct, the LA’s or the CA’s? SC RULING: That of CA. Among these views, the commanding one is the rule in Pfizer, which merely echoes the rulings the Supreme Court (SC) made in the cases of Roquero v. Philippine Airlines (G.R. No. 152329, 449 Phil. 437 (2003)) and Garcia v. Philippine Airlines (G.R. No. 164856, January 20, 2009, 576 SCRA 479) that the period for computing the 154 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS backwages due to the respondents during the period of appeal should end on the date that a higher court reversed the labor arbitration ruling of illegal dismissal. In this case, the higher court that first reversed the NLRC’s ruling was not the SC but rather the CA. In this light, the CA was correct when it found that that the period of computation should end on Aug. 27, 2003. The date when the SC’s decision became final and executory need not matter as the rule in Roquero, Garcia and Pfizer merely referred to the date of reversal, not the date of the ultimate finality of such reversal. As a last minor detail, we do not agree with the CA that the date of computation should start on Feb. 15, 2002. Rather, it should be on Feb. 16, 2002. The respondents themselves admitted in their motion for computation and issuance of writ of execution that the last date when they were paid their backwages was on Feb. 15, 2002. To start the computation on the same date would result to a duplication of wages for this day; thus, computation should start on the following date – Feb. 16, 2002.
155 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 98. SMART COMMUNICATIONS, INC. v. SOLIDUM G.R. No. 204646 April 15, 2015 Carpio, J.: DOCTRINE: Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. FACTS: Smart hired respondent Solidum as Department Head for Smart Buddy Activation. Smart Buddy Activation is under the Product Marketing Group which is headed by Isla. Isla gave Solidum a memorandum informing him of alleged acts of dishonesty, directing him to explain why his employment should not be terminated, and placing him under preventive suspension without pay for 30 days. On Solidum submitted his written explanation in response to the notice. Isla gave Solidum a memorandum informing him of a modified set of alleged acts of dishonesty, directing him to explain why his employment should not be terminated, extending his preventive suspension by 10 days, and inviting him to an administrative investigation. Isla gave Solidum a memorandum terminating his employment “for fraud or willful breach of trust, falsification, misrepresentation, conflict of interest, serious misconduct and dishonesty-related offenses.” Solidum filed against Smart a complaint for illegal dismissal, illegal suspension, non-payment of salaries, actual, moral and exemplary damages, and attorney’s fees. The Labor Arbiter found that Solidum’s preventive suspension and dismissal were illegal and that he was entitled to full back wages, moral and exemplary damages, and attorney’s fees. LA ordered Solidum’s reinstatement. The Labor Arbiter issued a writ of execution ordering the sheriff to collect from petitioners Solidum’s accrued salaries, allowances, benefits, incentives and bonuses. Said Labor Arbiter issued seven other alias writs of execution ordering the sheriff to collect from petitioners Solidum’s accrued salaries, allowances, benefits, incentives and bonuses. On January 26, 2009, the NLRC reversed the Labor Arbiter’s Decision and dismissed for lack of merit Solidum’s complaint. Solidum filed a motion for reconsideration but was denied on May 29, 2009. Solidum filed with the Labor Arbiter an ex-parte motion praying that an alias writ of execution be issued directing the sheriff to collect from petitioners Solidum’s accrued salaries, allowances, benefits, incentives and bonuses. LA RULING: LA denied the ex-parte motion because “the recent decision of the NLRC reversing the Decision of this Office prevents any future issuance of any writ of execution on the reinstatement aspect” NLRC RULING: Reversed the LA ruling. Since Smart failed to reinstate Solidum, it held that pursuant to Article 223 of the Labor Code, as amended, relative to the reinstatement aspect of the Labor Arbiter’s Decision, respondents are obligated to pay complainant’s salaries and benefits, computed from the date when respondents received a copy of the Labor Arbiter’s Decision which, among others, ordered the reinstatement of complainant, up to the date of finality of the Commission’s resolution reversing the Labor Arbiter’s Decision. CA RULING: Upheld NLRC. Reaffirmed the prevailing principle that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. ISSUES: a) Is Smart obligated to pay Solidum’s salaries and benefits, computed from the date when respondents received a copy of the Labor Arbiter’s Decision which ordered the reinstatement of complainant, up 156 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS to the date of finality of the Commission’s resolution reversing the Labor Arbiter’s Decision? b) When did the May 29, 2009 NLRC decision become Final and Executory? SC RULING: a) Yes. In Bago v. NLRC, the Court held that employees are entitled to their accrued salaries, allowances, benefits, incentives and bonuses until the NLRC’s reversal of the labor arbiter’s order of reinstatement becomes final and executory, as shown on the entry of judgment. b) August 10, 2009. Rule VII, Sec. 14 of the 2005 Revised Rules of Procedure of the NLRC provides: “The executive clerk or deputy executive clerk shall consider the decision , resolution or order as final and executory after sixty (60) days from date of mailing in the absence of return cards, certifications from the post office, or other proof of service to parties.” Since the May 29, 2009 Decision was mailed on 11 June 2009 and in the absence of return cards, the decision became final and executory on 10 August 2009.
157 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 99. SY ET.AL. v. FAIRLAND KNITCRAFT CO., INC. G.R. No. 182915 December 12, 2011 Del Castillo, J.: DOCTRINE: a) The Labor Arbiter can acquire jurisdiction over the person of the respondent, even without the latter being served with summons, through the latter’s voluntary appearance; b) Article 224 contemplates the furnishing of copies of final decisions, orders or awards both to the parties and their counsel in connection with the execution of such final decisions, orders or awards. FACTS: Workers Marialy O. Sy et.al. filed with the Arbitration Branch of the NLRC a Complaint for underpayment and/or non-payment of wages, overtime pay, premium pay for holidays, 13th month pay and other monetary benefits against Weesan and its owner Susan. Weesan filed before the DOLE-NCR a report on its temporary closure for a period of not less than six months. As the workers were not anymore allowed to work on that same day, they filed Amended Complaint and another pleading entitled Amended Complaints and Position Paper for Complainants, to include the charge of illegal dismissal and impleaded Fairland and its manager, Debbie, as additional respondents. A Notice of Hearing was thereafter sent to Weesan requesting it to appear before Labor Arbiter Reyes. On said date and time, Atty. Antonio A. Geronimo (Atty. Geronimo) appeared as counsel for Weesan and requested for an extension of time to file his client’s position paper. On the next hearing, Atty. Geronimo also entered his appearance for Fairland and again requested for an extension of time to file position paper. Atty. Geronimo filed two separate position papers – one for Fairland and another for Susan/Weesan. The Position Paper for Fairland was verified by Debbie while the one for Susan/Weesan was verified by Susan. To these pleadings, the workers filed a Reply. Atty. Geronimo then filed a Consolidated Reply verified both by Susan and Debbie. LA RULING: Dismissed the Complaint for lack of merit. NLRC RULING: There was Illegal dismissal. Susan/Weesan and Fairland are solidarily liable to the workers Atty. Geronimo filed a Motion for Reconsideration. However, Fairland filed another Motion for Reconsideration through Atty. Tecson assailing the jurisdiction of the Labor Arbiter and the NLRC over it, claiming that it was never summoned to appear, attend or participate in all the proceedings conducted therein. It also denied that it engaged the services of Atty. Geronimo. The NLRC however, denied both motions for lack of merit. The NLRC resolution denying the said motions, however, were not served upon Fairland. CA RULING: It held that the labor tribunals did not acquire jurisdiction over the person of Fairland. Furthermore, the CA concluded that since Fairland and its counsel were not separately furnished with a copy of the NLRC Resolution denying the motions for reconsideration of its Decision, said Decision cannot be enforced against Fairland. The CA likewise concluded that because of this, said Decision which held Susan/Weesan and Fairland solidarily liable to the workers, has not attained finality. ISSUES: a. Did the Labor tribunals acquire jurisdiction over the [person of the] respondent? b. Has the NLRC Decision holding Susan/Weesan and Fairland solidarily liable to the workers attained finality? SC RULING: a. Yes. It is basic that the Labor Arbiter cannot acquire jurisdiction over the person of the respondent without the latter being served with summons. It must be noted that for the initial complaints, the Labor Arbiter issued summons to Susan/Weesan which was received by the latter. The workers thereafter amended their then already consolidated complaints to include illegal dismissal as an additional cause of action as well as Fairland and Debbie as additional respondents. We have, however, scanned the records but found nothing to indicate that summons with respect to the said amended 158 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS complaints was ever served upon Weesan, Susan, or Fairland. True to their claim, Fairland and Debbie were indeed never summoned by the Labor Arbiter. Although not served with summons, jurisdiction over Fairland and Debbie was acquired through their voluntary appearance. The fact that Atty. Geronimo entered his appearance for Fairland and Debbie and that he actively defended them before the Labor Arbiter raised the presumption that he is authorized to appear for them. It is unlikely that Atty. Geronimo would have been so irresponsible as to represent Fairland and Debbie if he were not in fact authorized. As an officer of the Court, Atty. Geronimo is presumed to have acted with due propriety. Moreover, "[i]t strains credulity that a counsel who has no personal interest in the case would fight for and defend a case with persistence and vigor if he has not been authorized or employed by the party concerned." b. Yes Citing PNOC Dockyard and Engineering Corporation v. National Labor Relations Commission, the CA likewise emphasized that in labor cases, both the party and his counsel must be duly served their separate copies of the order, decision or resolution unlike in ordinary proceedings where notice to counsel is deemed notice to the party. It then quoted Article 224 of the Labor Code as follows: ARTICLE 224. Execution of decisions, orders or awards. – (a) the Secretary of Labor and Employment or any Regional Director, the Commission or any Labor Arbiter, or med-arbiter or voluntary arbitrator may, motu proprio or on motion of any interested party, issue a writ of execution on a judgment within five (5) years from the date it becomes final and executory, requiring a sheriff or a duly deputized officer to execute or enforce final decisions, orders or awards of the Secretary of Labor and Employment or [R]egional Director, the Commission, the Labor Arbiter or Med-Arbiter, or Voluntary Arbitrators. In any case, it shall be the duty of the responsible officer to separately furnish immediately the counsels of record and the parties with copies of said decision, orders or awards. Failure to comply with the duty prescribed herein shall subject such responsible officer to appropriate administrative sanctions x x x (Emphasis in the original).
The CA then concluded that since Fairland and its counsel were not separately furnished with a copy of the NLRC Resolution denying the motions for reconsideration of its 2004 Decision, said Decision cannot be enforced against Fairland. We cannot agree. To stress, Article 224 contemplates the furnishing of copies of final decisions, orders or awards both to the parties and their counsel in connection with the execution of such final decisions, orders or awards. However, for the purpose of computing the period for filing an appeal from the NLRC to the CA, same shall be counted from receipt of the decision, order or award by the counsel of record pursuant to the established rule that notice to counsel is notice to party. And since the period for filing of an appeal is reckoned from the counsel’s receipt of the decision, order or award, it necessarily follows that the reckoning period for their finality is likewise the counsel’s date of receipt thereof, if a party is represented by counsel. Hence, the date of receipt referred to in Sec. 14, Rule VII of the then in force New Rules of Procedure of the NLRC which provides that decisions, resolutions or orders of the NLRC shall become executory after 10 calendar days from receipt of the same, refers to the date of receipt by counsel. Thus contrary to the CA’s conclusion, the said NLRC Decision became final, as to Fairland, 10 calendar days after Atty. Tecson’s receipt thereof.
159 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 100. YUPANGCO COTTON MILLS v. CA G.R. No. 126322 January 16, 2002 Pardo, J.: DOCTRINE: A third party whose property has been levied upon by a sheriff to enforce a decision against a judgment debtor is afforded with several alternative remedies to protect its interests. The third party may avail himself of alternative remedies cumulatively, and one will not preclude the third party from availing himself of the other alternative remedies in the event he failed in the remedy first availed of. FACTS: From the records before us and by petitioner’s own allegations and admission, it has taken the following actions in connection with its claim that a sheriff of the National Labor Relations Commission “erroneously and unlawfully levied” upon certain properties which it claims as its own. 1. It filed a notice of third-party claim with the Labor Arbiter on May 4, 1995. 2. It filed an Affidavit of Adverse Claim with the National Labor Relations Commission (NLRC) on July 4, 1995, which was dismissed on August 30, 1995, by the Labor Arbiter. 3. It filed a petition for certiorari and prohibition with the Regional Trial Court of Manila, Branch 49, docketed as Civil Case No. 95-75628 on October 6, 1995. The Regional Trial Court dismissed the case on October 11, 1995 for lack of merit. 4. It appealed to the NLRC the order of the Labor Arbiter dated August 13, 1995 which dismissed the appeal for lack of merit on December 8, 1995. 5. It filed an original petition for mandatory injunction with the NLRC on November 16, 1995. This was docketed as Case No. NLRC-NCR-IC. 0000602-95. This case is still pending with that Commission. 6. It filed a complaint in the Regional Trial Court in Manila which was docketed as Civil Case No. 95-76395. The dismissal of this case by public respondent triggered the filing of the instant petition. In all of the foregoing actions, petitioner raised a common issue, which is that it is the owner of the properties located in the compound and buildings of Artex Development Corporation, which were erroneously levied upon by the sheriff of the NLRC as a consequence of the decision rendered by the said Commission in a labor case docketed as NLRC-NCR Case No. 00-05-02960-90.” CA RULING: Court of Appeals promulgated a decision dismissing the petition on the ground of forum shopping and that petitioner’s remedy was to seek relief from this Court. Petitioner filed with the Court of Appeals a motion for reconsideration of the decision. Petitioner argued that the filing of a complaint for accion reinvindicatoria with the Regional Trial Court was proper because it is a remedy specifically granted to an owner (whose properties were subjected to a writ of execution to enforce a decision rendered in a labor dispute in which it was not a party) by Section 17 (now 16), Rule 39, Revised Rules of Court and by several doctrines. Court of Appeals denied petitioner’s motion for reconsideration ISSUES: a) Was there forum shopping in this case? b) May a third party be precluded the from availing himself of the other alternative remedies in the event he failed in the remedy first availed of? SC RULING: 1) FORUM SHOPPING. There is no forum-shopping where two different orders were questioned, two distinct causes of action and issues were raised, and two objectives were sought. In the case at bar, there was no identity of parties, rights and causes of action and reliefs sought. The case before the NLRC where Labor Arbiter Reyes issued a writ of execution on the property of petitioner was a labor dispute between Artex and Samar-Anglo. Petitioner was not a party to the case. The only issue petitioner raised before the NLRC was whether or not the writ of execution issued by the labor arbiter could be satisfied against the property of petitioner, not a party to the labor case. 160 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS On the other hand, the accion reinvindicatoria filed by petitioner in the trial court was to recover the property illegally levied upon and sold at auction. Hence, the causes of action in these cases were different. 2) THIRD PARTY CLAIM. A third party whose property has been levied upon by a sheriff to enforce a decision against a judgment debtor is afforded with several alternative remedies to protect its interests. The third party may avail himself of alternative remedies cumulatively, and one will not preclude the third party from availing himself of the other alternative remedies in the event he failed in the remedy first availed of. Thus, a third party may avail himself of the following alternative remedies: a) File a third party claim with the sheriff of the Labor Arbiter, and b) If the third party claim is denied, the third party may appeal the denial to the NLRC. The remedies above mentioned are cumulative and may be resorted to by a third-party claimant independent of or separately from and without need of availing of the others. If a third-party claimant opted to file a proper action to vindicate his claim of ownership, he must institute an action, distinct and separate from that in which the judgment is being enforced, with the court of competent jurisdiction even before or without need of filing a claim in the court which issued the writ, the latter not being a condition sine qua non for the former. In such proper action, the validity and sufficiency of the title of the third-party claimant will be resolved and a writ of preliminary injunction against the sheriff may be issued.
161 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 101. ANDO VS CAMPO G.R. No. 184007 NACHURA, J.
February 16, 2011
DOCTRINE: Regular courts have no jurisdiction to hear and decide questions which arise from and are incidental to the enforcement of decisions, orders, or awards rendered in labor cases by appropriate officers and tribunals of the Department of Labor and Employment. Thus, it is, first and foremost, the NLRC Manual on the Execution of Judgment that governs any question on the execution of a judgment of that body. However, the power of the NLRC, or the courts, to execute its judgment extends only to properties unquestionably belonging to the judgment debtor alone. A sheriff, therefore, has no authority to attach the property of any person except that of the judgment debtor. FACTS: Petitioner was the president of Premier Allied and Contracting Services, Inc. (PACSI), an independent labor contractor. Respondents were hired by PACSI as pilers or haulers tasked to manually carry bags of sugar from the warehouse of Victorias Milling Company and load them on trucks. On June 1998, respondents were dismissed from employment. They filed a case for illegal dismissal and with money claims. On June 14, 2001, Labor Arbiter Pura promulgated a decision, ruling in respondents’ favor. PACSI and petitioner were directed to pay a total of P422, 702.28, representing respondents’ separation pay and the award of attorney’s fees. Petitioner and PACSI appealed to the NLRC. The NLRC ruled that petitioner failed to perfect his appeal because he did not pay the supersedeas bond. It also affirmed the Labor Arbiter’s decision with modification of the award for separation pay to four other employees who were similarly situated. Upon finality of the decision, respondents moved for its execution. To answer for the monetary award, the NLRC Acting Sheriff issued a Notice of Sale on Execution of Personal Property over the property in the name of "Paquito V. Ando x x x married to Erlinda S. Ando." This prompted petitioner to file an action for prohibition and damages with prayer for the issuance of a TRO before the Regional Trial Court of Bacolod City. Petitioner claimed that the property belonged to him and his wife, not to the corporation, and, hence, could not be subject of the execution sale. Since it is the corporation that was the judgment debtor, execution should be made on the latter’s properties. RTC RULING: The RTC issued an Order denying the prayer for a TRO, holding that the trial court had no jurisdiction to try and decide the case. The RTC ruled that, pursuant to the NLRC Manual on the Execution of Judgment, petitioner’s remedy was to file a third-party claim with the NLRC Sheriff. Despite lack of jurisdiction, however, the RTC went on to decide the merits of the case. Petitioner did not file a motion for reconsideration of the RTC Order. Instead, he filed a petition for certiorari under Rule 65 before the CA. Petitioner argued that the writ of execution was issued improvidently or without authority since the property to be levied belonged to him – in his personal capacity – and his wife. The RTC, respondent contended, could stay the execution of a judgment if the same was unjust. He also contended that, pursuant to a ruling of this Court, a third party who is not a judgment creditor may choose between filing a third-party claim with the NLRC sheriff or filing a separate action with the courts. He maintains that this special civil action is purely civil in nature since it involves the manner in which the writ of execution in a labor case will be implemented against the property of petitioner which is not a corporate property of PACSI. What he is seeking to be restrained, petitioner maintains, is not the Decision itself but the manner of its execution. Further, he claims that the property levied has been constituted as a family home within the contemplation of the Family Code. CA RULING: The CA affirmed the RTC Order in so far as it dismissed the complaint on the ground that it had no jurisdiction over the case, and nullified all other pronouncements in the same Order. Petitioner moved for reconsideration, but the motion was denied. Hence, this petition. ISSUE: Do regular courts have jurisdiction over the enforcement of decisions, orders or awards rendered in labor cases? SC RULING: NO. The Court has long recognized that regular courts have no jurisdiction to hear and decide questions which arise from and are incidental to the enforcement of decisions, orders, or awards rendered in labor cases by 162 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS appropriate officers and tribunals of the Department of Labor and Employment. To hold otherwise is to sanction splitting of jurisdiction which is obnoxious to the orderly administration of justice. Thus, it is, first and foremost, the NLRC Manual on the Execution of Judgment that governs any question on the execution of a judgment of that body. Petitioner need not look further than that. The Rules of Court apply only by analogy or in a suppletory character. The NLRC Manual on the Execution of Judgment deals specifically with third-party claims in cases brought before that body. It defines a third-party claim as one where a person, not a party to the case, asserts title to or right to the possession of the property levied upon. It also sets out the procedure for the filing of a third-party claim. There is no doubt in our mind that petitioner’s complaint is a third- party claim within the cognizance of the NLRC. Petitioner may indeed be considered a "third party" in relation to the property subject of the execution vis-à-vis the Labor Arbiter’s decision. There is no question that the property belongs to petitioner and his wife, and not to the corporation. It can be said that the property belongs to the conjugal partnership, not to petitioner alone. Thus, the property belongs to a third party, i.e., the conjugal partnership. At the very least, the Court can consider that petitioner’s wife is a third party within contemplation of the law. The broad powers granted to the Labor Arbiter and to the National Labor Relations Commission by Articles 217, 218 and 224 of the Labor Code can only be interpreted as vesting in them jurisdiction over incidents arising from, in connection with or relating to labor disputes, as the controversy under consideration, to the exclusion of the regular courts. There is no denying that the present controversy arose from the complaint for illegal dismissal. The subject matter of petitioner’s complaint is the execution of the NLRC decision. Execution is an essential part of the proceedings before the NLRC. Jurisdiction, once acquired, continues until the case is finally terminated, and there can be no end to the controversy without the full and proper implementation of the commission’s directives. That said, however, we resolve to put an end to the controversy right now, considering the length of time that has passed since the levy on the property was made. Petitioner claims that the property sought to be levied does not belong to PACSI, the judgment debtor, but to him and his wife. Since he was sued in a representative capacity, and not in his personal capacity, the property could not be made to answer for the judgment obligation of the corporation. Moreover, the power of the NLRC, or the courts, to execute its judgment extends only to properties unquestionably belonging to the judgment debtor alone. A sheriff, therefore, has no authority to attach the property of any person except that of the judgment debtor. Likewise, there is no showing that the sheriff ever tried to execute on the properties of the corporation. In sum, while petitioner availed himself of the wrong remedy to vindicate his rights, nonetheless, justice demands that this Court look beyond his procedural missteps and grant the petition.
163 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 102. EMPLOYEES UNION OF BAYER PHILS. VS BAYER PHILS. G.R. No. 162943 December 6, 2010 VILLARAMA, JR., J. DOCTRINE: The registered CBA serves as the covenant between the parties and has the force and effect of law between them during the period of its duration. If the employer grossly violates its CBA with the duly recognized union, the former may be held administratively and criminally liable for unfair labor practice. The utter disregard of the very existence of the CBA itself, is a gross violation of the CBA per se and is an act of ULP. When an employer proceeds to negotiate with a splinter union despite the existence of its valid CBA with the duly certified and exclusive bargaining agent, the former indubitably abandons its recognition of the latter and terminates the entire CBA. FACTS: Petitioner Employees Union of Bayer Philippines (EUBP) is the exclusive bargaining agent of all rank-and-file employees of Bayer Philippines (Bayer), and is an affiliate of the Federation of Free Workers (FFW). In 1997, EUBP, headed by its president Juanito S. Facundo (Facundo), negotiated with Bayer for the signing of a collective bargaining agreement (CBA). During the negotiations, EUBP rejected Bayer’s 9.9% wage-increase proposal resulting in a bargaining deadlock. Subsequently, EUBP staged a strike, prompting the Secretary of the DOLE to assume jurisdiction over the dispute. Respondent Avelina Remigio (Remigio) and 27 other union members, without any authority from their union leaders, accepted Bayer’s wage-increase proposal. EUBP’s grievance committee questioned Remigio’s action and reprimanded Remigio and her allies. The DOLE Secretary issued an arbitral award ordering EUBP and Bayer to execute a CBA. Barely six months from the signing of the new CBA, during a company-sponsored seminar, Remigio solicited signatures from union members in support of a resolution containing the decision of the signatories to: (1) disaffiliate from FFW, (2) rename the union as Reformed Employees Union of Bayer Philippines (REUBP), (3) adopt a new constitution and by-laws for the union, (4) abolish all existing officer positions in the union and elect a new set of interim officers, and (5) authorize REUBP to administer the CBA between EUBP and Bayer. The said resolution was signed by 147 of the 257 local union members. With both seeking recognition from Bayer and demanding remittance of the union dues collected from its rank and-file members. Remigio’s splinter group wrote Facundo, FFW and Bayer informing them of the decision of the majority of the union members to disaffiliate from FFW. Bayer responded by deciding not to deal with either of the two groups, and by placing the union dues collected in a trust account until the conflict between the two groups is resolved. EUBP filed a complaint for unfair labor practice (first ULP complaint) against Bayer for non-remittance of union dues. EUBP later sent a letter to Bayer asking for a grievance conference. Apparently, the two groups failed to settle their issues. Bayer decided to turn over the collected union dues amounting to P254,857.15 to respondent Anastacia Villareal, Treasurer of REUBP. EUBP lodged a complaint against Remigio’s group before the Industrial Relations Division of the DOLE praying for their expulsion from EUBP for commission of "acts that threaten the life of the union." Labor Arbiter Jovencio Ll. Mayor, Jr. dismissed the first ULP complaint for lack of jurisdiction. Petitioners then filed a second ULP complaint against herein respondents. The Regional Director of the Industrial Relations Division of DOLE issued a decision dismissing the issue on expulsion filed by EUBP against Remigio and her allies for failure to exhaust reliefs within the union and ordering the conduct of a referendum to determine which of the two groups should be recognized as union officers. The BLR reversed the Regional Director’s ruling and ordered the management of Bayer to respect the authority of the duly-elected officers of EUBP in the administration of the prevailing CBA. LA RULING: Labor Arbiter Waldo Emerson R. Gan dismissed EUBP’s second ULP complaint for lack of jurisdiction. NLRC RULING: Affirmed the decision. CA RULING: The CA sustained both the Labor Arbiter and the NLRC’s rulings. 164 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS ISSUE: Can the act of the management of Bayer in dealing and negotiating with Remigio’s splinter group, despite its validly existing CBA with EUBP, be considered unfair labor practice? SC RULING: YES. It must be remembered that a CBA is entered into in order to foster stability and mutual cooperation between labor and capital. An employer should not be allowed to rescind unilaterally its CBA with the duly certified bargaining agent it had previously contracted with, and decide to bargain anew with a different group if there is no legitimate reason for doing so and without first following the proper procedure. If such behavior would be tolerated, bargaining and negotiations between the employer and the union will never be truthful and meaningful, and no CBA forged after arduous negotiations will ever be honored or be relied upon. Article 253 of the Labor Code, as amended, plainly provides: ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. – Where there is a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate or modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties. (Emphasis supplied.)
This is the reason why it is axiomatic in labor relations that a CBA entered into by a legitimate labor organization that has been duly certified as the exclusive bargaining representative and the employer becomes the law between them. Additionally, in the Certificate of Registration issued by the DOLE, it is specified that the registered CBA serves as the covenant between the parties and has the force and effect of law between them during the period of its duration. Compliance with the terms and conditions of the CBA is mandated by express policy of the law primarily to afford protection to labor and to promote industrial peace. Thus, when a valid and binding CBA had been entered into by the workers and the employer, the latter is behooved to observe the terms and conditions thereof bearing on union dues and representation. If the employer grossly violates its CBA with the duly recognized union, the former may be held administratively and criminally liable for unfair labor practice. Indeed, in Silva v. National Labor Relations Commission, we explained the correlations of Article 248 (1) and Article 261 of the Labor Code to mean that for a ULP case to be cognizable by the Labor Arbiter, and for the NLRC to exercise appellate jurisdiction thereon, the allegations in the complaint must show prima facie the concurrence of two things, namely: (1) gross violation of the CBA; and (2) the violation pertains to the economic provisions of the CBA. This pronouncement in Silva, however, should not be construed to apply to violations of the CBA which can be considered as gross violations per se, such as utter disregard of the very existence of the CBA itself, similar to what happened in this case. When an employer proceeds to negotiate with a splinter union despite the existence of its valid CBA with the duly certified and exclusive bargaining agent, the former indubitably abandons its recognition of the latter and terminates the entire CBA.
165 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 103. MONTAO v. VERCELES G.R. No.168583 July 26, 2010 DEL CASTILLO, J. DOCTRINE: Section 226 of the Labor Code clearly provides that the BLR and the Regional Directors of DOLE have concurrent jurisdiction over inter-union and intra-union disputes. Such disputes include the conduct or nullification of election of union and workers’ association officers. It is true that under the Implementing Rules, redress must first be sought within the organization itself in accordance with its constitution and by-laws. However, this requirement is not absolute but yields to exception under varying circumstances. FACTS: Atty. Montao worked as legal assistant of FFW Legal Center. Subsequently, he joined the union of rank-and-file employees, the FFW Staff Association, and eventually became the employees union president in July 1997. In November 1998, he was likewise designated officer-in-charge of FFW Legal Center. During the 21st National Convention and Election of National Officers of FFW, Atty. Montao was nominated for the position of National Vice-President. In a letter dated May 25, 2001, however, the Commission on Election (FFW COMELEC), informed him that he is not qualified for the position as his candidacy violates the 1998 FFW Constitution and By-Laws. Atty. Montao thus filed an Urgent Motion for Reconsideration praying that his name be included in the official list of candidates. Election ensued on May 26-27, 2001 in the National Convention held at Subic International Hotel, Olongapo City. Despite the pending motion for reconsideration with the FFW COMELEC, and strong opposition and protest of respondent Atty. Ernesto C. Verceles (Atty. Verceles), a delegate to the convention and president of University of the East Employees Association (UEEA-FFW) which is an affiliate union of FFW, the convention delegates allowed Atty. Montao’s candidacy. He emerged victorious and was proclaimed as the National Vice-President. Atty. Verceles, as President of UEEA-FFW and officer of the Governing Board of FFW, filed before the BLR a petition for the nullification of the election of Atty. Montao as FFW National Vice-President. He alleged that, as already ruled by the FFW COMELEC, Atty. Montao is not qualified to run for the position the FFW Constitution and By-Laws prohibits federation employees from sitting in its Governing Board. Claiming that Atty. Montao’s premature assumption of duties and formal induction as vice-president will cause serious damage, Atty. Verceles likewise prayed for injunctive relief. Atty. Montao filed his Comment with Motion to Dismiss on the grounds that the Regional Director of the Department of Labor and Employment (DOLE) and not the BLR has jurisdiction over the case; that the filing of the petition was premature due to the pending and unresolved protest before the FFW COMELEC; and that, Atty. Verceles has no legal standing to initiate the petition not being the real party in interest. BLR RULING: The BLR, in its Order dated August 20, 2001, did not give due course to Atty. Montaos Motion to Dismiss but ordered the latter to submit his answer to the petition pursuant to the rules. The parties thereafter submitted their respective pleadings and position papers. On May 8, 2002, the BLR rendered a Decision dismissing the petition for lack of merit. While it upheld its jurisdiction over the intra-union dispute case and affirmed, as well, Atty. Verceles legal personality to institute the action as president of an affiliate union of FFW, the BLR ruled that there were no grounds to hold Atty. Montao unqualified to run for National Vice-President of FFW. It held that the applicable provision in the FFW Constitution and By-Laws to determine whether one is qualified to run for office is not Section 76 of Article XIX but Section 26 of Article VIII thereof. The BLR opined that there was sufficient compliance with the requirements laid down by this applicable provision and, besides, the convention delegates unanimously decided that Atty. Montao was qualified to run for the position of National Vice-President. Atty. Verceles filed a Motion for Reconsideration but it was denied by the BLR. CA RULING: CA set aside the BLRs Decision. While it agreed that jurisdiction was properly lodged with the BLR, that Atty. Verceles has legal standing to institute the petition, and that the applicable provision of FFW Constitution and By-Laws is Section 26 of Article VIII and not Section 76 of Article XIX, the CA however ruled that Atty. Montao 166 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS did not possess the qualification requirement under paragraph (d) of Section 26 that candidates must be an officer or member of a legitimate labor organization. According to the CA, since Atty. Montao, as legal assistant employed by FFW, is considered as confidential employee, consequently, he is ineligible to join FFW Staff Association, the rank-and-file union of FFW. The CA, thus, granted the petition and nullified the election of Atty. Montao as FFW National Vice-President. Montao raised before the SC the claim that the BLR has no jurisdiction over cases involving protests and petitions for annulment of results of elections as such jurisdiction is expressly conferred by law to the Regional Directors of the DOLE. He also reiterated that the petition was prematurely filed and thus must be dismissed for failure to exhaust all remedies as mandated by the implementing rules of the Labor Code. ISSUES: (1) Does the BLR have jurisdiction to decide election contests despite express provision of law granting said jurisdiction? (2) Was the petition by respondent prematurely filed? RULING: (1) Yes. We find no merit in petitioners’ claim that under Section 6 of Rule XV in relation to Section 1 of Rule XIV of Book V of the Omnibus Rules Implementing the Labor Code, it is the Regional Director of the DOLE and not the BLR who has jurisdiction over election protests. Section 226 of the Labor Code clearly provides that the BLR and the Regional Directors of DOLE have concurrent jurisdiction over inter-union and intra-union disputes. Such disputes include the conduct or nullification of election of union and workers association officers. There is, thus, no doubt as to the BLRs jurisdiction over the instant dispute involving member-unions of a federation arising from disagreement over the provisions of the federation’s constitution and by-laws. We agree with BLRs observation that: Rule XVI lays down the decentralized intra-union dispute settlement mechanism. Section 1 states that any complaint in this regard shall be filed in the Regional Office where the union is domiciled. The concept of domicile in labor relations regulation is equivalent to the place where the union seeks to operate or has established a geographical presence for purposes of collective bargaining or for dealing with employers concerning terms and conditions of employment. The matter of venue becomes problematic when the intra-union dispute involves a federation, because the geographical presence of a federation may encompass more than one administrative region. Pursuant to its authority under Article 226, this Bureau exercises original jurisdiction over intra-union disputes involving federations. It is well-settled that FFW, having local unions all over the country, operates in more than one administrative region. Therefore, this Bureau maintains original and exclusive jurisdiction over disputes arising from any violation of or disagreement over any provision of its constitution and by-laws. (2) No. There is likewise no merit to petitioners argument that the petition should have been immediately dismissed due to a pending and unresolved protest before the FFW COMELEC pursuant to Section 6, Rule XV, Book V of the Omnibus Rules Implementing the Labor Code. It is true that under the Implementing Rules, redress must first be sought within the organization itself in accordance with its constitution and by-laws. However, this requirement is not absolute but yields to exception under varying circumstances. In the case at bench, Atty. Verceles made his protest over Atty. Montaos candidacy during the plenary session before the holding of the election proceedings. The FFW COMELEC, notwithstanding its reservation and despite objections from certain convention delegates, allowed Atty. Montaos candidacy and proclaimed him winner for the position. Under the rules, the committee on election shall endeavour to settle or resolve all protests during or immediately after the close of election proceedings and any protest left unresolved shall be resolved by the committee within five days after the close of the election proceedings. A day or two after the election, Atty. Verceles made his written/formal protest over Atty. Montaos candidacy/proclamation with the FFW COMELEC. He exhausted the remedies under the constitution and by-laws to have his protest acted upon by the proper forum and even asked for a formal hearing on the matter. Still, the FFW COMELEC failed to timely 167 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS act thereon. Thus, Atty. Verceles had no other recourse but to take the next available remedy to protect the interest of the union he represents as well as the whole federation, especially so that Atty. Montao, immediately after being proclaimed, already assumed and started to perform the duties of the position. Consequently, Atty. Verceles properly sought redress from the BLR so that the right to due process will not be violated. To insist on the contrary is to render the exhaustion of remedies within the union as illusory and vain. As regards the issue of whether Atty. Montao is qualified to run as FFW National President in view of the prohibition established in Section 76, Article XIX of the 1998 FFW Constitution and By-Laws, the SC concurred with the CA that Atty. Montao is not qualified to run for the position but not for failure to meet the requirement specified under Section 26 (d) of Article VIII of FFW Constitution and By-Laws. We note that the CAs declaration of the illegitimate status of FFW Staff Association is proscribed by law, owing to the preclusion of collateral attack. We nonetheless resolve to affirm the CAs finding that Atty. Montao is disqualified to run for the position of National Vice-President in view of the proscription in the FFW Constitution and By-Laws on federation employees from sitting in its Governing Board. Accordingly, the election of Atty. Montao as FFW Vice-President is null and void.
168 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 104. DIOKNO v. CADAC G.R. No.168475 CHICO-NAZARIO, J.
July 4, 2007
DOCTRINE: BLR has original jurisdiction on all inter-union and intra-union conflicts. Since Art. 226 declared the BLR shall have original and exclusive authority to act on all inter-union and intra-union conflicts, there should be no doubt as to its jurisdiction. Intra-union conflict refers to a conflict within or inside a labor union. (Exceptions to the Doctrine of Exhaustion of Administrative Remedies) FACTS: Petitioners and Respondents are members of First Line Association of Meralco Supervisory Employees (FLAMES) which is the supervisory union of Meralco. FLAMES COMELEC rejected the candidacy of Ong et al (Ong, Alvarez, Escall, Valeriano). Ong et al filed a petition before the med-arbitration of DOLE to nullify the order of COMELEC. Consequently, DOLE personnel were directed to observe the conduct of the FLAMES election. Petitioners sought the disqualification of respondents Daya et al (Daya, lucas, tabilog, espiritu, vito, de luna, yalung, layug, pabilona, reyes, escall, alcantara, cervitillo, morelos, ermine). Petitioners alleged that Daya, et al., allowed themselves to be assisted by non-union members, and committed acts of disloyalty which are inimical to the interest of FLAMES. In their campaign, they allegedly colluded with the officers of the Meralco Savings and Loan Association (MESALA) and the Meralco Mutual Aid and Benefits Association (MEMABA) and exerted undue influence on the members of FLAMES. As a result, the COMELEC disqualified Daya et al from the election. On May 7, 2003 COMELEC proclaimed the winner of the elections which included Diokno as president. Daya et al and Ong et al filed with the med-arbitration unit of DOLE a petition to nullify the order of disqualification, election proceedings and counting of votes. Another group, Jimenez et al (Jimenez Jr., Reyes, Gavino, Vidanes, Tayao, Cirujano, Cadavona, Caoc, Maclit, Acorda, Ragasa, de Vera) filed a petition with the med-arbitration unit of dole to nullify the election on the ground that it was not free, orderly and peaceful. Ong et al, Daya et al and Jimenez et al were eventually consolidated. MED ARBITER RULING: Med Arbiter reversed the disqualification imposed by the COMELEC. He said that the COMELEC accepted all the allegations of petitioners against private respondents Daya, et al., sans evidence to substantiate the same. Also, the COMELEC erred in putting forth the the basis for the disqualification of Daya et al as the quoted provision in the CBL applies to dismissal/expulsion of members and not to disqualification of candidates. Petitioners appealed to the BLR Director. The Med-Arbiter also defended his jurisdiction over the case. He concluded that even as the election of union officers is an internal affair of the union, his office has the right to inquire into the merits and conduct of the election when its jurisdiction is sought. BLR RULING: BLR affirmed decision of Med-Arbiter. He also ruled that the case was an exception to the rule on exhaustion of administrative remedy, they were left with no choice but to seek the intervention of the BLR which was declared to have jurisdiction over intra union disputes even at its own initiative under Art. 226. CA RULING: The CA upheld the decision of the BLR. In filing the instant petition before the SC, petitioners question the jurisdiction of the BLR on the case at bar because of the failure of private respondents Daya, et al.,to exhaust administrative remedies within the union. It is the stance of petitioner that Article 226 of the Labor Code which grants power to the BLR to resolve inter-union and intra-union disputes is dead law, and has been amended by Section 14 of Republic Act No. 6715, whereby the conciliation, mediation and voluntary arbitration functions of the BLR had been transferred to the National Conciliation and Mediation Board. ISSUES: 1. Does the BLR have jurisdiction to resolve inter-union and intra-union disputes as provided under Article 226 of the Labor Code despite the supposed amendment by RA 6715? 2. Did the respondents prematurely seek the jurisdiction of the BLR?
169 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS SC RULING: (1) Yes. The amendment to Art 226 simply reads: “The bureau sall have 15 days to act on labor cases before it, subject to extension by agreement of the parties.” BLR has original jurisdiction on all inter-union and intra-union conflicts. Since Art. 226 declared the BLR shall have original and exclusive authority to act on all inter-union and intra-union conflicts, there should be no doubt as to its jurisdiction. Intra-union conflict refers to a conflict within or inside a labor union. An inter-union controversy or dispute is one occurring or carried on between or among unions. Rule 1 of Rules implementing book V: “intra union dispute”- refers to any conflict between and among union members, and includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by-laws of a union, including cases arising from chartering or affiliation of labor organizations or from any vi0lation of the rights and conditions of union membership provided for in the code. The controversy in the case at bar is an intra-union dispute. Even as the dispute involved allegations that Daya et al sought the help of non-union members, the same does not detract from the real character of the controversy. It remains as one which involves the grievance over the constitution and bylaws of a union and it is a controversy involving members of the union. Moreover, the non-members of the union are not parties to the case. BLR was properly within its cognizance, it being an intra-union dispute. Daya et al brought the case to the BLR, it was an invocation of the power and authority of the BLR to act in an intra-union conflict. (2) No. We affirm the findings of the Court of Appeals which upheld the application by the BLR Director of the exception to the rule of exhaustion of administrative remedies. Before a party is allowed to seek the intervention of the court, it is a pre-condition that he should have availed of all the means of administrative processes afforded him. Hence, if a remedy within the administrative machinery can still be resorted to by giving the administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction when such remedy should be exhausted first before the courts judicial power can be sought. The premature invocation of courts judicial intervention is fatal to ones cause of action. Verily, there are exceptions to the applicability of the doctrine. Among the established exceptions are: 1) when the question raised is purely legal; 2) when the administrative body is in estoppel; 3) when the act complained of is patently illegal; 4) when there is urgent need for judicial intervention; 5) when the claim involved is small; 6) when irreparable damage will be suffered; 7) when there is no other plain, speedy, and adequate remedy; 8) when strong public interest is involved; 9) when the subject of the proceeding is private land; 10) in quo warranto proceedings; and 11) where the facts show that there was a violation of due process. As aptly determined by the BLR Director, private respondents Daya, et al., were prejudiced by the disqualification order of the COMELEC. They endeavored to seek reconsideration, but the COMELEC failed to act thereon. The COMELEC was also found to have refused to receive their written protest. The foregoing facts sustain the finding that private respondents Daya, et al., were deprived of due process. Hence, it becomes incumbent upon private respondents Daya, et al., to seek the aid of the BLR. To insist on the contrary is to render their exhaustion of remedies within the union as illusory and vain. These antecedent circumstances convince this Court that there was proper application by the Med-Arbiter of the exception to the rule of exhaustion of administrative remedies, as affirmed by the BLR Director, and upheld by the Court of Appeals.
170 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 105. MAGBANUA v. UY G.R. No.161003 May 6, 2005 PANGANIBAN, J. DOCTRINE: The presence or the absence of counsel when a waiver is executed does not determine its validity. The test is whether it was executed voluntarily, freely and intelligently; and whether the consideration for it was credible and reasonable. The labor arbiter’s absence when the waivers were executed was remedied upon compliance with the NLRC Rules of Procedure. The Court observes that the arbiter made searching questions during the preexecution conference to ascertain whether petitioners had voluntarily and freely executed the waivers. FACTS: In the case of Uy vs. NLRC the SC awarded Php. 1,487,312.69 to the 8 complainants therein as the amount of wage differentials due them. Respondent Uy filed a manifestation requesting the case to be terminated stating that the judgment award has been complied with to the satisfaction of petitioners. The manifestation was signed by the 8 petitioners and was accompanied by a joint affidavit attesting to the receipt of payment and waiving all other benefits due them in connection with their complaint. Subsequently, petitioners filed an urgent motion for issuance of writ of execution, alleging that they received only partial payments of the judgment award. Respondent claimed that the award was fully satisfied. Six (6) of the eight (8) petitioners attested that they have no more collectible amount from respondent and if there is any, they are abandoning and waiving it. LA RULING: The LA denied the motion for issuance of write of execution. NLRC RULING: The NLRC directed the issuance of a writ of execution holding that a final and executor judgment can no longer be altered. CA RULING: The CA held that compromise agreements may be entered into even after final judgment, thus petitioners validly released respondent upon execution of the waiver pursuant to the compromise agreement. ISSUE: Is the petitioners’ affidavit waiving the awards in the labor case executed without assistance of their counsel and the labor arbiter valid? SC RULING: Yes. A compromise agreement is a contract whereby the parties make reciprocal concessions in order to resolve their differences and thus avoid or put an end to a lawsuit. They adjust their difficulties in the manner they have agreed upon, disregarding the possible gain in litigation and keeping in mind that such gain is balanced by the danger of losing. Verily, the compromise may be either extrajudicial (to prevent litigation) or judicial (to end a litigation). There is no justification to disallow a compromise agreement, solely because it was entered into after final judgment. The validity of the agreement is determined by compliance with the requisites and principles of contracts, not by when it was entered into. As provided by the law on contracts, a valid compromise must have the following elements: (1) the consent of the parties to the compromise, (2) an object certain that is the subject matter of the compromise, and (3) the cause of the obligation that is established. In the present factual milieu, compliance with the elements of a valid contract is not in issue. Petitioners do not challenge the factual finding that they entered into a compromise agreement with respondent. There are no allegations of vitiated consent. Neither was there any proof that the agreement was defective or could be characterized as rescissible, voidable, unenforceable, or void. Instead, petitioners base their argument on the sole fact that the agreement was executed despite a final judgment, which the Court had previously ruled to be allowed by law. As regards the validity of the waiver, the presence or the absence of counsel when a waiver is executed does not determine its validity. The test is whether it was executed voluntarily, freely and intelligently; and whether the consideration for it was credible and reasonable. Petitioners failed to present any evidence to show that their consent had been vitiated. 171 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS The law is silent with regard to the procedure for approving a waiver after a case has been terminated. Relevant, however, is this reference to the NLRC’s New Rules of Procedure: “Should the parties arrive at any agreement as to the whole or any part of the dispute, the same shall be reduced to writing and signed by the parties and their respective counsel, or authorized representative, if any, before the Labor Arbiter. “The settlement shall be approved by the Labor Arbiter after being satisfied that it was voluntarily entered into by the parties and after having explained to them the terms and consequences thereof. “A compromise agreement entered into by the parties not in the presence of the Labor Arbiter before whom the case is pending shall be approved by him, if after confronting the parties, particularly the complainants, he is satisfied that they understand the terms and conditions of the settlement and that it was entered into freely and voluntarily by them and the agreement is not contrary to law, morals, and public policy.” This provision refers to proceedings in a mandatory/conciliation conference during the initial stage of the litigation. Such provision should be made applicable to the proceedings in the pre-execution conference, for which the procedure for approving a waiver after final judgment is not stated. There is no reason to make a distinction between the proceedings in mandatory/conciliation and those in pre-execution conferences. The labor arbiter’s absence when the waivers were executed was remedied upon compliance with the above procedure. The Court observes that the arbiter made searching questions during the pre-execution conference to ascertain whether petitioners had voluntarily and freely executed the waivers. [52] Likewise, there was evidence that they made an intelligent choice, considering that the contents of the written waivers had been explained to them. The labor arbiter’s absence when those waivers were executed does not, therefore, invalidate them.
172 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 106. SOLOMON et al v. POWERTECH CORPORATION, WILLIE CABOBOS and COURT OF APPEALS G.R. No. 150861 January 22, 2008 REYES, R.T., J.: DOCTRINE: Collusion is a species of fraud. Article 227, LC empowers the NLRC to void a compromise agreement for fraud. FACTS: A complaint for illegal dismissal was filed by Nagkakaisang Manggagawa Ng Powertech Corporation in behalf of its 52 individual members and non-union members against their employer, Powertech. The Labor Arbiter rendered a decision in favor of the employees awarding monetary claims in the total amount of P2,538,728.84. Powertech appealed to the NLRC. During its pendency, Carlos Gestiada, for himself and on behalf of other petitioners, executed a quitclaim, release and waiver4 in favor of Powertech in consideration of the amount of P150,000.00. Earlier, Gestiada was appointed by his co-petitioners as their attorney-in-fact through a SPA. Relying on the quitclaim and release, Powertech filed a motion for the withdrawal of the appeal and cash bond. The NLRC granted6 the motion, dismissed the appeal and ordered the release of the cash bond. The P150,000.00 check, however, bounced due to a stop payment order of Powertech. Aggrieved, petitioners moved to nullify the release and quitclaim for lack of consideration. In a Resolution the NLRC declared the quitclaim void for lack of consideration and reinstated the appeal. Gestiada then terminated the services of their counsel, Atty. Evangelista and, instead, retained Atty. Manuel Luis Felipe of the Public Attorney’s Office. A day later, Powertech paid P150,000.00 to Gestiada purportedly as compromise amount for all of petitioners. That same day, Gestiada, through Atty. Felipe, and Powertech filed a joint motion to dismiss10 with the NLRC based on the compromise agreement. Atty. Evangelista opposed 11 the motion, alleging that the compromise agreement is unconscionable and that the P150,000.00 was received by Gestiada as payment solely for his backwages and other monetary claims. Petitioners assert that the P150,000.00 paid to Gestiada was payment solely for himself. As proof, they rely on the letter written in Filipino by Gestiada to Atty. Evangelista dated March 23, 2000. 20 Right at the opening sentence, Gestiada stated that "ang kinuha kong pera sa Powertech Corporation na halagang P150,000.00 ay bilang kabayaran sa aking backwages na iginawad sa desisyon ni Kagalang-galang Labor Arbiter Joseph Rennel Dela Cruz." Powertech, on the other hand, argues that the P150,000.00 was given to Gestiada as compromise amount for all the petitioners. It relies on the release and quitclaim signed by Gestiada indicating that he signed "for himself and attorney-in-fact of all complainants." It is pointed out that Gestiada was given a special power of attorney to negotiate with Powertech on behalf of petitioners. NLRC: denied the joint motion to dismiss CA: reversed hence dismissed the case ISSUE: Is the compromise agreement entered into by Gestiada on behalf petitioners valid? SC RULING: No, it is not valid. If reliance is placed solely on the quitclaim release and waiver executed by Gestiada and the special power of attorney, it would be an inevitable conclusion that the P150,000.00 compromise covered the claims of petitioners, not merely that of Gestiada. That is apparent from the waiver and the special power of attorney. There is much to be said, however, of the circumstances in the execution and the payment of the amount which lead Us to conclude that the P150,000.00 was given to Gestiada solely as payment for his backwages and other monetary claims. First, the P150,000 compromise is rather measly when taken in light of the more than P2.5 million judgment on appeal to the NLRC. Petitioners already won on the arbiter level P2.5 million pesos. It is highly improbable that they would suddenly agree to accept P150,000 as compromise for the P2.5 million. That translates to a paltry sum of P6,000.00 each for petitioners. From this amount will still be deducted attorneys fees and other litigation expenses. In effect, petitioners agreed to waive more than 94% of what they expect to receive from Powertech. 173 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Second, even granting for the mere sake of argument that the P150,000 was a fair and reasonable compromise for all, petitioners failed to receive a single centavo from the compromise. This conclusively indicates that Gestiada received the P150,000 in payment of his backwages and no other. Third, We give credence to the admission of Gestiada that he received the P150,000.00 as payment for his own backwages. In his letter to Atty. Evangelista, Gestiada said that he was pressured by Powertech to sign the waiver and quitclaim for petitioners in order to receive his share in the P2.5 million judgment. Having no stable job after his dismissal, Gestiada had no other choice but to breach his fiduciary obligation to petitioners. He succumbed to the pressure of Powertech in signing the waiver, release and quitclaim in exchange for the P150,000.00. In short, he colluded with Powertech to the detriment of petitioners. Fourth, the events that led to the execution of the compromise agreement show that Powertech was negotiating in bad faith. More importantly, they show that Powertech colluded with Gestiada to defraud petitioners of their share of the P2.5 million Labor Arbiter judgment. To give effect to the collusion, Gestiada had to get rid of Atty. Evangelista, who had previously succeeded in nullifying the compromise agreement. He fired Atty. Evangelista without cause basing his dismissal on his plenary authority as agent of petitioners. He then procured the services of another lawyer, Atty. Felipe. We find it striking that Gestiada was not authorized under the special power of attorney to terminate or retain another counsel for petitioners in the labor dispute. The special power of attorney merely authorized Gestiada to negotiate with Powertech, nothing more. In his letter, Gestiada admitted that the dismissal of Atty. Evangelista was upon the prodding of Virtue Sarmiento, personnel manager of Powertech. Powertech imposed the dismissal of Atty. Evangelista as a condition before Gestiada may receive the amount. A day after firing Atty. Evangelista, Gestiada received the P150,000.00. That same day, Gestiada, represented by Atty. Felipe, and Powertech filed a joint motion to dismiss with the NLRC. All these circumstances indicate that the P150,000.00 was received by Gestiada solely as payment for his backwages and not a whit of a settlement for the monetary claim of petitioners. Collusion is a species of fraud.27 Article 227 of the Labor Code empowers the NLRC to void a compromise agreement for fraud, thus: Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the Department of Labor, shall be final and binding upon the parties. The National Labor Relations Commission or any court shall not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion.
174 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 107. PHILIPPINE JOURNALISTS, INC., ET. AL. v. NATIONAL LABOR RELATIONS COMMISSION, HON. COMMS. LOURDES JAVIER, TITO GENILO and ERNESTO VERCELES, JOURNAL EMPLOYEES UNION, and THE COURT OF APPEALS G.R. No. 166421 September 5, 2006 CALLEJO, SR., J.: DOCTRINE: When judgment is rendered based on a compromise agreement, the judgment becomes immediately executory, there being an implied waiver of the parties' right to appeal from the decision. The judgment having become final, the Court can no longer reverse, much less modify it. FACTS: Union filed a notice of strike before the National Conciliation and Mediation Board claiming that PJI was guilty of unfair labor practice. PJI was then going to implement a retrenchment program due to "over-staffing or bloated work force and continuing actual losses sustained by the company for the past three years resulting in negative stockholders equity of P127.0 million." The Secretary of the Department of Labor and Employment certified 4 the labor dispute to the National Labor Relations Commission for compulsory arbitration. NLRC declared that the 31 complainants were illegally dismissed and that there was no basis for the implementation of petitioner's retrenchment program. Declared that the retrenchment of 31 employees was illegal and ordered their reinstatement "to their former position without loss of seniority rights and other benefits. The parties executed a Compromise Agreement where PJI undertook to reinstate the 31 complainant-employees without loss of seniority rights and benefits; 17 of them who were previously retrenched were agreed to be given full and complete payment of their respective monetary claims, while 14 others would be paid their monetary claims minus what they received by way of separation pay. The agreement stated that the parties entered the agreement in a sincere effort at peace and reconciliation as well as to jointly establish a new era in labor management relations. The compromise agreement was submitted to the NLRC for approval. In the meantime, however, the Union filed another Notice of Strike. The Union claimed that 29 employees were illegally dismissed from employment, and that the salaries and benefits of 50 others had been illegally reduced. After the retrenchment program was implemented, 200 Union members-employees who continued working for petitioner had been made to sign five-month contracts. The Union also alleged that the company, through its legal officer, threatened to dismiss some 200 union members from employment if they refused to conform to a 40% to 50% salary reduction; indeed, the 29 employees who refused to accede to these demands were dismissed. NLRC RULING: It ruled that the complainants were not illegally dismissed. The May 31, 2001 Resolution declaring the retrenchment program illegal did not attain finality as "it had been academically mooted by the compromise agreement entered into between both parties. Pursuant to Article 223 of the Labor Code, this later resolution attained finality upon the expiration of ten days from both parties' receipt thereof. Thus, the May 31, 2001 Resolution could not be made the basis to justify the alleged continued employment regularity of the 29 complainants subsequent to their retrenchment. Their separate acts of entering into fixed-term employment contracts with petitioner after their separation from employment by virtue of retrenchment, they are deemed to have admitted the validity of their separation from employment and are thus estopped from questioning it. Moreover, there was no showing that the complainants were forced or pressured into signing the fixed-term employment contracts which they entered into. CA RULING: It further held that the act of respondent in hiring the retrenched employees as contractual workers was a ploy to circumvent the latter's security of tenure. This is evidenced by the admission of PJI, that it hired contractual employees (majority of whom were those retrenched) because of increased, albeit uncertain, demand for its publications. ISSUE: Does the NLRC Resolution, which includes a pronouncement that the members of a union had been illegally dismissed, is abandoned or rendered "moot and academic" by a compromise agreement subsequently entered into between the dismissed employees and the employer; this, in turn, raises the question of whether such a compromise agreement constitutes res judicata to a new complaint later filed by other union membersemployees, not parties to the agreement, who likewise claim to have been illegally dismissed? SC RULING: The nature of a compromise is spelled out in Article 2028 of the New Civil Code: it is "a contract whereby the parties, by making reciprocal concessions, avoid litigation or put an end to one already commenced." Parties to a compromise are motivated by "the hope of gaining, balanced by the dangers of losing."26 It contemplates mutual 175 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS concessions and mutual gains to avoid the expenses of litigation, or, when litigation has already begun, to end it because of the uncertainty of the result.27 Article 227 of the Labor Code of the Philippines authorizes compromise agreements voluntarily agreed upon by the parties, in conformity with the basic policy of the State "to promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes." Thus, contrary to the allegation of petitioners, the execution and subsequent approval by the NLRC of the agreement forged between it and the respondent Union did not render the NLRC resolution ineffectual, nor rendered it "moot and academic." The agreement becomes part of the judgment of the court or tribunal, and as a logical consequence, there is an implicit waiver of the right to appeal. In any event, the compromise agreement cannot bind a party who did not voluntarily take part in the settlement itself and gave specific individual consent. It must be remembered that a compromise agreement is also a contract; it requires the consent of the parties, and it is only then that the agreement may be considered as voluntarily entered into.
176 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 108. COLEGIO DE SAN JUAN DE LETRAN v. ASSOCIATION OF EMPLOYEES AND FACULTY OF LETRAN and ELEONOR AMBAS G.R. No. 141471 September 18, 2000 KAPUNAN, J. DOCTRINE: If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition for certification election or a motion for intervention can only be entertained within sixty (60) days prior to the expiry date of such agreement. No petition for certification election for any representation issue may be filed after the lapse of the sixty-day freedom period. The old CBA is extended until a new one is signed. The rule is that despite the lapse of the formal effectivity of the CBA the law still considers the same as continuing in force and effect until a new CBA shall have been validly executed. Hence, the contract bar rule still applies. Management has the prerogative to discipline its employees for insubordination. But when the exercise of such management right tends to interfere with the employees' right to self-organization, it amounts to union-busting and is therefore a prohibited act. FACTS: 1992, Salvador Abtria, then President of respondent union, Association of Employees and Faculty of Letran, initiated the renegotiation of its Collective Bargaining Agreement with petitioner Colegio de San Juan de Letran for the last two (2) years of the CBA's five (5) year lifetime from 1989-1994. On the same year, the union elected a new set of officers wherein private respondent Eleanor Ambas emerged as the newly elected President. Ambas wanted to continue the renegotiation of the CBA but petitioner, through Fr. Edwin Lao, claimed that the CBA was already prepared for signing by the parties. The parties submitted the disputed CBA to a referendum by the union members, who eventually rejected the said CBA. Petitioner accused the union officers of bargaining in bad faith before the National Labor Relations Commission (NLRC). Labor Arbiter Edgardo M. Madriaga decided in favor of petitioner. However, the Labor Arbiter's decision was reversed on appeal before the NLRC. the union notified the National Conciliation and Mediation Board (NCMB) of its intention to strike on the of refusal to bargain by petitioner. On January 18, 1996, the parties agreed to disregard the unsigned CBA and to start negotiation on a new fiveyear CBA starting 1994-1999. On February 7, 1996, the union submitted its proposals to petitioner, which notified the union six days later or on February 13, 1996 that the same had been submitted to its Board of Trustees. In the meantime, Ambas was informed through a letter dated February 15, 1996 from her superior that her work schedule was being changed from Monday to Friday to Tuesday to Saturday. Ambas protested and requested management to submit the issue to a grievance machinery under the old CBA. Due to petitioner's inaction, the union filed a notice of strike on March 13, 1996. The parties met on March 27, 1996 before the NCMB to discuss the ground rules for the negotiation. On March 29, 1996, the union received petitioner's letter dismissing Ambas for alleged insubordination. Hence, the union amended its notice of strike to include Ambas' dismissal. On April 20, 1996, both parties again discussed the ground rules for the CBA renegotiation. However, petitioner stopped the negotiations after it purportedly received information that a new group of employees had filed a petition for certification election. ISSUES: 1. Is petitioner guilty of unfair labor practice by refusing to bargain with the union when it unilaterally suspended the ongoing negotiations for a new Collective Bargaining Agreement (CBA) upon mere information that a petition for certification has been filed by another legitimate labor organization? 2. Is the termination of the union president amounts to an interference of the employees' right to selforganization? SC RULING: 1. YES. Art. 252. Meaning of duty to bargain collectively. - The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the 177 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession. Noteworthy in the above definition is the requirement on both parties of the performance of the mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement. Undoubtedly, respondent Association of Employees and Faculty of Letran (AEFL) (hereinafter, "union") lived up to this requisite when it presented its proposals for the CBA to petitioner on February 7, 1996. On the other hand, petitioner devised ways and means in order to prevent the negotiation. Petitioner's utter lack of interest in bargaining with the union is obvious in its failure to make a timely reply to the proposals presented by the latter. More than a month after the proposals were submitted by the union, petitioner still had not made any counter-proposals. This inaction on the part of petitioner prompted the union to file its second notice of strike on March 13, 1996. Petitioner could only offer a feeble explanation that the Board of Trustees had not yet convened to discuss the matter as its excuse for failing to file its reply. The company's refusal to make counter-proposal to the union's proposed CBA is an indication of its bad faith. Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there is a clear evasion of the duty to bargain collectively. 6 In the case at bar, petitioner's actuation show a lack of sincere desire to negotiate rendering it guilty of unfair labor practice. In order to allow the employer to validly suspend the bargaining process there must be a valid petition for certification election raising a legitimate representation issue. Hence, the mere filing of a petition for certification election does not ipso facto justify the suspension of negotiation by the employer. The petition must first comply with the provisions of the Labor Code and its Implementing Rules. Foremost is that a petition for certification election must be filed during the sixty-day freedom period. The "Contract Bar Rule" under Section 3, Rule XI, Book V, of the Omnibus Rules Implementing the Labor Code, provides that: " .… If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition for certification election or a motion for intervention can only be entertained within sixty (60) days prior to the expiry date of such agreement." The rule is based on Article 232, 8 in relation to Articles 253, 253-A and 256 of the Labor Code. No petition for certification election for any representation issue may be filed after the lapse of the sixty-day freedom period. The old CBA is extended until a new one is signed. The rule is that despite the lapse of the formal effectivity of the CBA the law still considers the same as continuing in force and effect until a new CBA shall have been validly executed. 9 Hence, the contract bar rule still applies.10 The purpose is to ensure stability in the relationship of the workers and the company by preventing frequent modifications of any CBA earlier entered into by them in good faith and for the stipulated original period.11 In the case at bar, the lifetime of the previous CBA was from 1989-1994.1âwphi1 The petition for certification election by ACEC, allegedly a legitimate labor organization, was filed with the Department of Labor and Employment (DOLE) only on May 26, 1996. Clearly, the petition was filed outside the sixty-day freedom period. Hence, the filing thereof was barred by the existence of a valid and existing collective bargaining agreement. Consequently, there is no legitimate representation issue and, as such, the filing of the petition for certification election did not constitute a bar to the ongoing negotiation. 2. The factual backdrop of the termination of Ms. Ambas leads us to no other conclusion that she was dismissed in order to strip the union of a leader who would fight for the right of her co-workers at the bargaining table. Ms. Ambas, at the time of her dismissal, had been working for the petitioner for ten (10) years already. In fact, she was a recipient of a loyalty award. Moreover, for the past ten (10) years her working schedule was from Monday to Friday. However, things began to change when she was elected as union president and when she started negotiating for a new CBA. Thus, it was when she was the union president and during the period of tense and difficult negotiations when her work schedule was altered from Mondays to Fridays to Tuesdays to Saturdays. When she did not budge, although her schedule was changed, she was outrightly dismissed for alleged insubordination. Admittedly, management has the prerogative to discipline its employees for insubordination. But when the exercise of such management right tends to interfere with the employees' right to self-organization, it amounts to union-busting and is therefore a prohibited act. The dismissal of Ms. Ambas was clearly 178 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS designed to frustrate the Union in its desire to forge a new CBA with the College that is reflective of the true wishes and aspirations of the Union members. Her dismissal was merely a subterfuge to get rid of her, which smacks of a pre-conceived plan to oust her from the premises of the College. It has the effect of busting the Union, stripping it of its strong-willed leadership. When management refused to treat the charge of insubordination as a grievance within the scope of the Grievance Machinery, the action of the College in finally dismissing her from the service became arbitrary, capricious and whimsical, and therefore violated Ms. Ambas' right to due process."
179 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 109. MARIWASA SIAM CERAMICS VS SEC. OF LABOR G.R. No. 183317 December 21, 2009 NACHURA, J.: DOCTRINE: In case the applicant is an independent union, the names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate is one of the requirements of registration of a labor organization. FACTS: Samahan Ng Mga Manggagawa Sa Mariwasa Siam Ceramics, Inc was issued a Certificate of Registration as a legitimate labor organization. Mariwasa Siam Ceramics, Inc. filed a Petition for Cancellation of Union Registration against respondent, claiming that the latter violated Article 234 of the Labor Code for not complying with the 20% requirement, and that it committed massive fraud and misrepresentation in violation of Article 239. The petitioner insists that respondent failed to comply with the 20% union membership requirement for its registration as a legitimate labor organization because of the disaffiliation from the total number of union members of 102 employees who executed affidavits recanting their union membership. Respondent asserts that it had a total of 173 union members at the time it applied for registration. REGIONAL DIRECTOR: revoked the registration of respondent BLE DIRECTOR: reversed and set aside the regional director’s decision CA: denied the petition for lack of merit ISSUE: Are the affidavits of recantation valid? SC RULING: No. It is worthy to note, however, that the affidavit does not mention the identity of the people who allegedly forced and deceived the affiant into joining the union, much less the circumstances that constituted such force and deceit. Indeed, not only was this allegation couched in very general terms and sweeping in nature, but more importantly, it was not supported by any evidence whatsoever. In the instant case, the affidavits of recantation were executed after the identities of the union members became public, i.e., after the union filed a petition for certification election on May 23, 2005, since the names of the members were attached to the petition. The purported withdrawal of support for the registration of the union was made after the documents were submitted to the DOLE, Region IVA. The logical conclusion, therefore, following jurisprudence, is that the employees were not totally free from the employer’s pressure, and so the voluntariness of the employees’ execution of the affidavits becomes suspect.
180 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 110. ELECTROMAT MANUFACTURING and RECORDING CORPORATION, v. HON. CIRIACO LAGUNZAD G.R. No. 172699 July 27, 2011 BRION, J.: REQUIREMENTS FOR REGISTRATION OF LABOR UNIONS AS SUPPLEMENTED BY D.O 40-03. FACTS: Nagkakaisang Samahan ng Manggagawa ng Electromat-Wasto, a charter affiliate of the Workers Advocates for Struggle, Transformation and Organization applied for registration with the Bureau of Labor Relations. Supporting the application were the following documents: (1) copies of its ratified constitution and by-laws (CBL); (2) minutes of the CBLs adoption and ratification; (3) minutes of the organizational meetings; (4) names and addresses of the union officers; (5) list of union members; (6) list of rank-and-file employees in the company; (7) certification of nonexistence of a collective bargaining agreement (CBA) in the company; (8) resolution of affiliation with WASTO, a labor federation; (9) WASTOs resolution of acceptance; (10) Charter Certificate; and (11) Verification under oath. The BLR thereafter issued the union a Certification of Creation of Local Chapter pursuant to DO 40-03. Petitioner Electromat Manufacturing and Recording Corporation (company) filed a petition for cancellation of the unions registration certificate, for the unions failure to comply with Article 234 of the Labor Code. It argued that D.O. 4003 is an unconstitutional diminution of the Labor Codes union registration requirements under Article 234. DOLE: dismissed the petition CA: dismissed the petition and affirmed the assailed BLR ruling. It brushed aside the companys objection to D.O. 40-03, and its submission that D.O. 40-03 removed the safety measures against the commission of fraud in the registration of unions ISSUE: Is the DO 40-03 a valid exercise of the rule-making power of the DOLE SC RULING: Yes. Undoubtedly, the intent of the law in imposing lesser requirements in the case of a branch or local of a registered federation or national union is to encourage the affiliation of a local union with a federation or national union in order to increase the local unions bargaining powers respecting terms and conditions of labor. D.O. 4003 represents an expression of the governments implementing policy on trade unionism. It builds upon the old rules by further simplifying the requirements for the establishment of locals or chapters. As in D.O. 9, we see nothing contrary to the law or the Constitution in the adoption by the Secretary of Labor and Employment of D.O. 40-03 as this department order is consistent with the intent of the government to encourage the affiliation of a local union with a federation or national union to enhance the locals bargaining power. If changes were made at all, these were those made to recognize the distinctions made in the law itself between federations and their local chapters, and independent unions; local chapters seemingly have lesser requirements because they and their members are deemed to be direct members of the federation to which they are affiliated, which federations are the ones subject to the strict registration requirements of the law.
181 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 111. EAGLE RIDGE GOLF & COUNTRY CLUB vs. COURT OF APPEALS and EAGLE RIDGE EMPLOYEES UNION (ER EU) G.R No. 178989 March 18, 2010 VELASCO, JR., J: GROUNDS FOR CANCELLATION OF UNION REGISTRATION DOCTRINE: We have in precedent cases said that the employees' withdrawal from a labor union made before the filing of the petition for certification election is presumed voluntary, while withdrawal after the filing of such petition is considered to be involuntary and does not affect the same. Now then, if a withdrawal from union membership done after a petition for certification election has been filed does not vitiate such petition, is it not but logical to assume that such withdrawal cannot work to nullify the registration of the union? FACTS: Petitioner Eagle Ridge is a corporation engaged in the business of maintaining golf courses. It had, at the end of CY 2005, around 112 rank-and-file employees. On December 6, 2005, at least 20% of Eagle Ridge’s rank-andfile employees—the percentage threshold required under Article 234(c) of the Labor Code for union registration— had a meeting where they organized themselves into an independent labor union, named "Eagle Ridge Employees Union" (EREU or Union), elected a set of officers, and ratified their constitution and by-laws. On December 19, 2005, EREU formally applied for registration before the Department of Labor and Employment (DOLE) Regional Office IV (RO IV). In time, DOLE RO IV granted the application. The EREU then filed a petition for certification election in Eagle Ridge Golf & Country Club. Eagle Ridge opposed this petition, followed by its filing of a petition for the cancellation of the application. Eagle Ridge’s petition ascribed misrepresentation, false statement, or fraud to EREU in connection with the adoption of its constitution and by-laws, the numerical composition of the Union, and the election of its officers. Petitioner alleged that the EREU declared in its application for registration having 30 members, when the minutes of its December 6, 2005 organizational meeting showed it only had 26 members. The misrepresentation was exacerbated by the discrepancy between the certification issued by the Union secretary and president that 25 members actually ratified the constitution and by-laws on December 6, 2005 and the fact that 26 members affixed their signatures on the documents, making one signature a forgery. Finally, petitioner contended that five employees who attended the organizational meeting had manifested the desire to withdraw from the union. The five executed individual affidavits or Sinumpaang Salaysay on February 15, 2006, attesting that they arrived late at said meeting which they claimed to be drinking spree; that they did not know that the documents they signed on that occasion pertained to the organization of a union; and that they now wanted to be excluded from the Union. The withdrawal of the five, Eagle Ridge maintained, effectively reduced the union membership to 20 or 21, either of which is below the mandatory minimum 20% membership requirement under Art. 234(c) of the Labor Code. Reckoned from 112 rank-and-file employees of Eagle Ridge, the required number would be 22 or 23 employees. As a counterpoint, EREU alleged that discrepancies are not real for before filing of its application on December 19, 2005, four additional employees joined the union on December 8, 2005, thus raising the union membership to 30 members as of December 19, 2005; that the understatement by one member who ratified the constitution and by-laws was a typographical error, which does not make it either grave or malicious warranting the cancellation of the union’s registration; that the retraction of 5 union members should not be given any credence for the reasons that: (b) the sworn statements of the five retracting union members sans other affirmative evidence presented hardly qualify as clear and credible evidence considering the joint affidavits of the other members attesting to the orderly conduct of the organizational meeting; (c) the retracting members did not deny signing the union documents; (d) it can be presumed that "duress, coercion or valuable consideration" was brought to bear on the retracting members; and (e) once the required percentage requirement has been reached, the employees’ withdrawal from union membership taking place after the filing of the petition for certification election will not affect the petition. After due proceedings, the DOLE Regional Director, focusing on the question of misrepresentation, issued an Order finding for Eagle Ridge. Aggrieved, the Union appealed to the BLR, which affirmed the appealed order of 182 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS the DOLE Regional Director. Undeterred by successive set backs, EREU interposed a motion for reconsideration which was granted. Eagle Ridge sought but was denied reconsideration. Eagle Ridge thereupon went to the CA, which dismissed the petition for certiorari. The CA later denied Eagle Ridge’s motion for reconsideration, hence the recourse with the SC. ISSUE: Whether there was fraud in the application to merit the cancellation of the EREU’s registration SC RULING: NO, a scrutiny of the records fails to show any misrepresentation, false statement, or fraud committed by EREU to merit cancellation of its registration. The Supreme Court succinctly explained this decision in eight points: First. The Union submitted the required documents attesting to the facts of the organizational meeting on December 6, 2005, the election of its officers, and the adoption of the Union’s constitution and by-laws. Second. The members of the EREU totaled 30 employees when it applied on December 19, 2005 for registration. The Union thereby complied with the mandatory minimum 20% membership requirement under Art. 234(c). Of note is the undisputed number of 112 rank-and-file employees in Eagle Ridge, as shown in the Sworn Statement of the Union president and secretary and confirmed by Eagle Ridge in its petition for cancellation. Third. The Union has sufficiently explained the discrepancy between the number of those who attended the organizational meeting showing 26 employees and the list of union members showing 30. The difference is due to the additional four members admitted two days after the organizational meeting as attested to by their duly accomplished Union Membership form. Fourth. In its futile attempt to clutch at straws, Eagle Ridge assails the inclusion of the additional four members allegedly for not complying with what it termed as "the sine qua non requirements" for union member applications under the Union’s constitution and by-laws, specifically Sec. 2 of Art. IV. We are not persuaded. Any seeming infirmity in the application and admission of union membership, most especially in cases of independent labor unions, must be viewed in favor of valid membership. The right of employees to self-organization and membership in a union must not be trammeled by undue difficulties. In this case, when the Union said that the four employee-applicants had been admitted as union members, it is enough to establish the fact of admission of the four that they had duly signified such desire by accomplishing the membership form. The fact, as pointed out by Eagle Ridge, that the Union, owing to its scant membership, had not yet fully organized its different committees evidently shows the direct and valid acceptance of the four employee applicants rather than deter their admission— as erroneously asserted by Eagle Ridge. Fifth. The difference between the number of 26 members, who ratified the Union’s constitution and by-laws, and the 25 members shown in the certification of the Union secretary as having ratified it, is, as shown by the factual antecedents, a typographical error. It was an insignificant mistake committed without malice or prevarication. The list of those who attended the organizational meeting shows 26 members, as evidenced by the signatures beside their handwritten names. Sixth. In the more meaty issue of the affidavits of retraction executed by six union members, we hold that the probative value of these affidavits cannot overcome those of the supporting affidavits of 12 union members and their counsel as to the proceedings and the conduct of the organizational meeting on December 6, 2005. The DOLE Regional Director and the BLR OIC Director obviously erred in giving credence to the affidavits of retraction, but not according the same treatment to the supporting affidavits. The six affiants of the affidavits of retraction were not presented in a hearing before the Hearing Officer (DOLE Regional Director), as required under the Rules Implementing Book V of the Labor Code covering Labor Relation. It is settled that affidavits partake the nature of hearsay evidence, since they are not generally prepared by the affiant but by another who uses his own language in writing the affiant’s statement, which may thus be either omitted or misunderstood by the one writing them. For their non-presentation and consonant to the above-quoted rule, the six affidavits of retraction are inadmissible as evidence against the Union in the instant case. Seventh. The fact that six union members, indeed, expressed the desire to withdraw their membership through their affidavits of retraction will not cause the cancellation of registration on the ground of violation of Art. 234(c) of 183 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS the Labor Code requiring the mandatory minimum 20% membership of rank-and- file employees in the employees’ union. The six retracting union members clearly severed and withdrew their union membership. The query is whether such separation from the Union can detrimentally affect the registration of the Union. We answer in the negative. Twenty percent (20%) of 112 rank-and-file employees in Eagle Ridge would require a union membership of at least 22 employees (112 x 205 = 22.4). When the EREU filed its application for registration on December 19, 2005, there were clearly 30 union members. Thus, when the certificate of registration was granted, there is no dispute that the Union complied with the mandatory 20% membership requirement. With the withdrawal of six union members, there is still compliance with the mandatory membership requirement under Art. 234(c), for the remaining 24 union members constitute more than the 20% membership requirement of 22 employees. Eighth. Finally, it may not be amiss to note, given the factual antecedents of the instant case, that Eagle Ridge has apparently resorted to filing the instant case for cancellation of the Union’s certificate of registration to bar the holding of a certification election. This can be gleaned from the fact that the grounds it raised in its opposition to the petition for certification election are basically the same grounds it resorted to in the instant case for cancellation of EREU’s certificate of registration. This amounts to a clear circumvention of the law and cannot be countenanced.
184 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 112. TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INCORPORATED v. TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO G.R. No. 142000 January 22, 2003 CARPIO MORALES, J: GROUNDS FOR CANCELLATION OF UNION REGISTRATION DOCTRINE: After a certificate of registration is issued to a union, its legal personality cannot be subject to collateral attack. It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book IV of the "Rules to Implement the Labor Code." The grounds for cancellation of union registration are provided for under Article 239 of the Labor Code. The inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 139 of above-quoted Article 239 of the Labor Code. THEU, having been validly issued a certificate of registration, should be considered to have already acquired juridical personality which may not be assailed collaterally. As for petitioner's allegation that some of the signatures in the petition for certification election were obtained through fraud, false statement and misrepresentation, the proper procedure is, as reflected above, for it to file a petition for cancellation of the certificate of registration, and not to intervene in a petition for certification election. FACTS: On October 16, 1997, the Tagaytay Highlands Employees Union (THEU)– Philippine Transport and General Workers Organization (PTGWO), Local Chapter No. 776, a legitimate labor organization said to represent majority of the rank- and-file employees of Tagaytay Highlands International Golf Club Incorporated (THIGCI), filed a petition for certification election before the DOLE Mediation- Arbitration Unit, Regional Branch No. IV. THIGCI, in its Comment, opposed THEU’s petition for certification election on the ground that the list of union members submitted by it was defective and fatally flawed as it included the names and signatures of supervisors, resigned, terminated and absent without leave (AWOL) employees, as well as employees of The Country Club, Inc., a corporation distinct and separate from THIGCI; and that out of the 192 signatories to the petition, only 71 were actual rank-and-file employees of THIGCI. THIGCI thus submitted a list of the names of its 71 actual rank-and-file employees to the petition for certification election. And it therein incorporated a tabulation showing the number of signatories to said petition whose membership in the union was being questioned as disqualified and the reasons for disqualification. THEU asserted that it complied with all the requirements for valid affiliation and inclusion in the roster of legitimate labor organizations pursuant to DOLE Department Order No. 9, series of 1997, on account of which it was duly granted a Certification of Affiliation by DOLE on October 10, 1997; and that Section 5, Rule V of said Department Order provides that the legitimacy of its registration cannot be subject to collateral attack, and for as long as there is no final order of cancellation, it continues to enjoy the rights accorded to a legitimate organization. Therefore, the Med-Arbiter should, pursuant to Article 257 of the Labor Code and Section 11, Rule XI of DOLE Department Order No. 09, automatically order the conduct of a certification election. On January 28, 1998, DOLE Med-Arbiter Anastacio Bactin ordered the holding of a certification election. THIGCI appealed to the Office of the DOLE Secretary which, by Resolution of June 4, 1998, set aside the said Med-Arbiter’s Order and accordingly dismissed the petition for certification election on the ground that there is a "clear absence of community or mutuality of interests," it finding that THEU sought to represent two separate bargaining units (supervisory employees and rank-and- file employees) as well as employees of two separate and distinct corporate entities. Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda Dimalipis-Baldoz, by authority of the DOLE Secretary, issued DOLE Resolution of November 12, 1998 setting aside the June 4, 1998 Resolution dismissing the petition for certification election. She held that since THEU is a local chapter, the twenty percent (20%) membership requirement is not necessary for it to acquire legitimate status, hence, "the alleged retraction and withdrawal of support by 45 of the 70 remaining rank-and-file members . . . cannot negate the legitimacy it has already acquired before the petition". THIGCI’s Motion for Reconsideration was denied by the DOLE Undersecretary hence it filed a petition for certiorari with the CA. 185 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS The CA denied THIGCI’s Petition for Certiorari and affirmed the DOLE Resolution dated November 12, 1998. It held that while a petition for certification election is an exception to the innocent bystand er rule, hence, the employer may pray for the dismissal of such petition on the basis of lack of mutuality of interests of the members of the union as well as lack of employer-employee relationship and petitioner failed to adduce substantial evidence to support its allegations. ISSUE: Whether the union’s legal personality can be subject to collateral attack after a certificate of registration is issued SC RULING: NO. Petition is DENIED, and the records of the case are remanded to the office of origin. While above-quoted Article 245 expressly prohibits supervisory employees from joining a rank-and-file union, it does not provide what would be the effect if a rank-and-file union counts supervisory employees among its members, or vice-versa. Citing Toyota which held that "a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all," and the subsequent case of Progressive Development Corp. – Pizza Hut v. Ledesma20 which held that: "The Labor Code requires that in organized and unorganized establishments, a petition for certification election must be filed by a legitimate labor organization. The acquisition of rights by any union or labor organization, particularly the right to file a petition for certification election, first and foremost, depends onwhether or not the labor organization has attained the status of a legitimate labor organization. In the case before us, the Med-Arbiter summarily disregarded the petitioner’s prayer that the former look into the legitimacy of the respondent Union by a sweeping declaration that the union was in the possession of a charter certificate so that ‘for all intents and purposes, Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimate organization,’"21 (Underscoring and emphasis supplied). We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the membership of the respondent union ca n b e re m e d ie d in "the pr e - el ect i on con f er en ce thru the exclusioninclusion proceedings wherein those employees who are occupying rank-and-file positions will be excluded from the list of eligible voters." After a certificate of registration is issued to a union, its legal personality cannot be subject to collateral attack. It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book IV of the "Rules to Implement the Labor Code" (Implementing Rules) which section reads: Sec. 5. Effect of registration. The labor organization or workers’ association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation in accordance with these Rules. (Emphasis supplied) The inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of above-quoted Article 239 of the Labor Code. THEU, having been validly issued a certificate of registration, should be considered to have already acquired juridical personality which may not be assailed collaterally. As for petitioner’s allegation that some of the signatures in the petition for certification election were obtained through fraud, false statement and misrepresentation, the proper procedure is, as reflec ted above, for it to file a petition for cancellation of the certificate of registration, and not to intervene in a petition for certification election. 186 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Regarding the alleged withdrawal of union members from participating in the certification election, this Court’s following ruling is instructive: "‘[T]he best forum for determining whether there were indeed retractions from some of the laborers is in thecertification election itself wherein the workers can freely express their choice in a secret ballot.’ Suffice it to say that the will of the rank-and-file employees should in every possible instance be determined by secret ballot rather than by administrative or quasi-judicial inquiry. Such representation and certification election cases are not to be taken as contentious litigations for suits but as mere investigations of a non-adversary, fact-finding character as to which of the competing unions represents the genuine choice of the workers to be their sole and exclusive collective bargaining representative with their employer." As for the lack of mutuality of interest argument of petitioner, it, at all events, does not lie given, as found by the court a quo, its failure to present substantial evidence that the assailed employees are actually occupying supervisory positions. While petitioner submitted a list of its employees with their corresponding job titles and ranks, there is nothing mentioned about the supervisors’ respective duties, powers and prerogatives that would show that they can effectively recommend managerial actions which require the use of independent judgment. As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor: Designation should be reconciled with the actual job description of subject employees x x x The mere fact that an employee is designated manager does not necessarily make him one. Otherwise, there would be an absurd situation where one can be given the title just to be deprived of the right to be a member of a union. In the case of National Steel Corporation vs. Laguesma (G. R. No. 103743, January 29, 1996), it was stressed that: What is essential is the nature of the employee’s function and not the nomenclature or titlegiven to the job which determines whether the employee has rank-and-file or managerial status or whether he is a supervisory employee. (Emphasis supplied).
187 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 113. S.S. VENTURES INTERNATIONAL, INC. v. S.S. VENTURES LABOR UNION (SSVLU) and DIR. HANS LEO CACDAC, in His capacity as Director of the Bureau of Labor Relations (BLR) G.R. No. 161690 July 23, 2008 VELASCO, JR., J.: REVOCATION OF CERTIFICATE OF REGISTRATION DOCTRINE: To decertify a union, it is not enough to show that the union includes ineligible employees in its membership. It must also be shown that there was misrepresentation, false statement, or fraud in connection with the application for registration and the supporting documents, such as the adoption or ratification of the constitution and by-laws or amendments thereto and the minutes of ratification of the constitution or by-laws, among other documents. FACTS: On March 21, 2000, the Union filed with DOLE-Region III a petition for certification election in behalf of the rank-and-file employees of Ventures. 542 signatures, 82 of which belong to terminated Ventures employees, appeared on the basic documents supporting the petition. On August 21, 2000, Ventures filed a Petition to cancel the Union’s certificate of registration invoking the grounds set forth in Article 239(a) of the Labor Code. The petition alleged the following: (1) The Union deliberately and maliciously included the names of more or less 82 former employees no longer connected with Ventures in its list of members who attended the organizational meeting and in the adoption/ratification of its constitution and by- laws held on January 9, 2000 in Mariveles, Bataan; and the Union forged the signatures of these 82 former employees to make it appear they took part in the organizational meeting and adoption and ratification of the constitution; (2) The Union maliciously twice entered the signatures of three persons namely: Mara Santos, Raymond Balangbang, and Karen Agunos; (3) No organizational meeting and ratification actually took place; and (4) The Union’s application for registration was not supported by at least 20% of the rank-and-file employees of Ventures, or 418 of the total 2,197-employee complement. Since more or less 82 of the 500 signatures were forged or invalid, then the remaining valid signatures would only be 418, which is very much short of the 439 minimum (2197 total employees x 20% = 439.4) required by the Labor Code. In its Answer, the Union denied committing the imputed acts of fraud or forgery and alleged that: (1) the organizational meeting actually took place on January 9, 2000 at the Shoe City basketball court in Mariveles; (2) the 82 employees adverted to in Ventures’ petition were qualified Union members for, although they have been ordered dismissed, the one-year prescriptive period to question their dismissal had not yet lapsed; (3) it had complied with the 20%-member registration requirement since it had 542 members; and (4) the "double" signatures were inadvertent human error. In its supplemental reply memorandum Ventures cited other instances of fraud and misrepresentation, claiming that the "affidavits" executed by 82 alleged Union members show that they were deceived into signing paper minutes or were harassed to signing their attendance in the organizational meeting. Ventures added that some employees signed the "affidavits" denying having attended such meeting. ISSUE: Whether or not the Certification of Registration of the Union should be revoked SC RULING: The right to form, join, or assist a union is specifically protected by Art. XIII, Section 3 of the Constitution and such right, according to Art. III, Sec. 8 of the Constitution and Art. 246 of the Labor Code, shall not be abridged. Once registered with the DOLE, a union is considered a legitimate labor organization endowed with the right and privileges granted by law to such organization. While a certificate of registration confers a union with legitimacy with the concomitant right to participate in or ask for certification election in a bargaining unit, the registration may be cancelled or the union may be decertified as the bargaining unit, in which case the union is divested of the status of a legitimate labor organization. Among the grounds for cancellation is the commission of any of the acts enumerated in Art. 239(a) of the Labor Code, such as fraud and misrepresentation in connection with the adoption or ratification of the union’s constitution and like documents. 188 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS To decertify a union, it is not enough to show that the union includes ineligible employees in its membership. It must also be shown that there was misrepresentation, false statement, or fraud in connection with the application for registration and the supporting documents, such as the adoption or ratification of the constitution and by-laws or amendments thereto and the minutes of ratification of the constitution or by-laws, among other documents. Essentially, Ventures faults both the BLR and the CA in finding that there was no fraud or misrepresentation on the part of the Union sufficient to justify cancellation of its registration. In this regard, Ventures makes much of, first, the separate hand-written statements of 82 employees who, in gist, alleged that they were unwilling or harassed signatories to the attendance sheet of the organizational meeting. However, as aptly noted by both the BLR and CA, these mostly undated written statements submitted by Ventures on March 20, 2001, or seven months after it filed its petition for cancellation of registration, partake of the nature of withdrawal of union membership executed after the Union’s filing of a petition for certification election on March 21, 2000. It was held that the employees’ withdrawal from a labor union made before the filing of the petition for certification election is presumed voluntary, while withdrawal after the filing of such petition is considered to be involuntary and does not affect the same. Now then, if a withdrawal from union membership done after a petition for certification election has been filed does not vitiate such petition, is it not but logical to assume that such withdrawal cannot work to nullify the registration of the union? Upon this light, the Court is inclined to agree with the CA that the BLR did not abuse its discretion nor gravely err when it concluded that the affidavits of retraction of the 82 members had no evidentiary weight. It cannot be over-emphasized that the registration or the recognition of a labor union after it has submitted the corresponding papers is not ministerial on the part of the BLR. After a labor organization has filed the necessary registration documents, it becomes mandatory for the BLR to check if the requirements under Art. 234 of the Labor Code have been complied with. If the union’s application is infected by falsification and like serious irregularities, a union should be denied recognition as a legitimate labor organization. Prescinding from these considerations, the issuance to the Union of the Certificate of Registration necessarily implies that its application for registration and the supporting documents thereof are prima facie free from any vitiating irregularities. The cancellation of a union’s registration doubtless has an impairing dimension on the right of labor to selforganization. Accordingly, we can accord concurrence to the following apt observation of the BLR: "For fraud and misrepresentation to be grounds for cancellation of union registration under Article 239 of the Labor Code, the nature of the fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union members." In its Comment, the Union points out that for almost seven (7) years following the filing of its petition, no certification election has yet been conducted among the rank-and-file employees. If this be the case, the delay has gone far enough and can no longer be allowed to continue. The CA is right when it said that Ventures should not interfere in the certification election by actively and persistently opposing the certification election of the Union. A certification election is exclusively the concern of employees and the employer lacks the legal personality to challenge it. In fact, jurisprudence frowns on the employer’s interference in a certification election for such interference unduly creates the impression that it intends to establish a company union.
189 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 114. THE HERITAGE HOTEL MANILA, acting through its owner, GRAND PLAZA HOTEL CORPORATION v. NATIONAL UNION OF WORKERS IN THE HOTEL, RESTAURANT AND ALLIED INDUSTRIES-HERITAGE HOTEL MANILA SUPERVISORS CHAPTER (NUWHRAIN-HHMSC) G.R. No. 178296 January 12, 2011 NACHURA, J.: GROUNDS FOR CANCELLATION OF UNION REGISTRATION DOCTRINE: It is undisputed that appellee failed to submit its annual financial reports and list of individual members in accordance with Article 239 of the Labor Code. However, the existence of this ground should not necessarily lead to the cancellation of union registration. Article 239 recognizes the regulatory authority of the State to exact compliance with reporting requirements. Yet there is more at stake in this case than merely monitoring union activities and requiring periodic documentation thereof. Failure to comply with the above requirements shall not be a ground for cancellation of union registration but shall subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty. FACTS: On October 11, 1995, respondent filed with the DOLE-NCR a petition for certification election. The MedArbiter granted the petition on February 14, 1996 and ordered the holding of a certification election. On appeal, the DOLE Secretary, in a Resolution dated August 15, 1996, affirmed the Med-Arbiter’s order and remanded the case to the Med-Arbiter for the holding of a preelection conference on February 26, 1997. Petitioner filed a motion for reconsideration, but it was denied on September 23, 1996. The preelection conference was not held as initially scheduled; it was held a year later, or on February 20, 1998. Petitioner moved to archive or to dismiss the petition due to alleged repeated non-appearance of respondent. The latter agreed to suspend proceedings until further notice. The preelection conference resumed on January 29, 2000. Subsequently, petitioner discovered that respondent had failed to submit to the Bureau of Labor Relations (BLR) its annual financial report for several years and the list of its members since it filed its registration papers in 1995. Consequently, on May 19, 2000, petitioner filed a Petition for Cancellation of Registration of respondent, on the ground of the non-submission of the said documents. Petitioner prayed that respondent’s Certificate of Creation of Local/Chapter be cancelled and its name be deleted from the list of legitimate labor organizations. It further requested the suspension of the certification election proceedings. On June 1, 2000, petitioner reiterated its request by filing a Motion to Dismiss or Suspend the Certification Election Proceedings, arguing that the dismissal or suspension of the proceedings is warranted, considering that the legitimacy of respondent is seriously being challenged in the petition for cancellation of registration. Petitioner maintained that the resolution of the issue of whether respondent is a legitimate labor organization is crucial to the issue of whether it may exercise rights of a legitimate labor organization, which include the right to be certified as the bargaining agent of the covered employees. Nevertheless, the certification election pushed through on June 23, 2000. Respondent emerged as the winner. On June 28, 2000, petitioner filed a Protest with Motion to Defer Certification of Election Results and Winner,7 stating that the certification election held on June 23, 2000 was an exercise in futility because, once respondent’s registration is cancelled, it would no longer be entitled to be certified as the exclusive bargaining agent of the supervisory employees. Petitioner also claimed that some of respondent’s members were not qualified to join the union because they were either confidential employees or managerial employees. It then prayed that the certification of the election results and winner be deferred until the petition for cancellation shall have been resolved, and that respondent’s members who held confidential or managerial positions be excluded from the supervisors’ bargaining unit. Meanwhile, respondent filed its Answer8 to the petition for the cancellation of its registration. It averred that the petition was filed primarily to delay the conduct of the certification election, the respondent’s certification as the exclusive bargaining representative of the supervisory employees, and the commencement of bargaining negotiations. 190 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS ISSUE: Whether or not the certificate of registration should be cancelled. SC RULING: Articles 238 and 239 of the Labor Code gives the Regional Director ample discretion in dealing with a petition for cancellation of a union’s registration, particularly, determining whether the union still meets the requirements prescribed by law. It is sufficient to give the Regional Director license to treat the late filing of required documents as sufficient compliance with the requirements of the law. After all, the law requires the labor organization to submit the annual financial report and list of members in order to verify if it is still viable and financially sustainable as an organization so as to protect the employer and employees from fraudulent or fly-by-night unions. With the submission of the required documents by respondent, the purpose of the law has been achieved, though belatedly. We cannot ascribe abuse of discretion to the Regional Director and the DOLE Secretary in denying the petition for cancellation of respondent’s registration. The union members and, in fact, all the employees belonging to the appropriate bargaining unit should not be deprived of a bargaining agent, merely because of the negligence of the union officers who were responsible for the submission of the documents to the BLR. It is worth mentioning that the Labor Code’s provisions on cancellation of union registration and on reportorial requirements have been recently amended by R.A. No. 9481 which lapsed into law on May 25, 2007 and became effective on June 14, 2007. The amendment sought to strengthen the workers’ right to selforganization and enhance the Philippines’ compliance with its international obligations as embodied in the International Labour Organization (ILO) Convention No. 87, pertaining to the non-dissolution of workers’ organizations by administrative authority. Thus, R.A. No. 9481 amended Article 239 to read: ART. 239. Grounds for Cancellation of Union Registration.—The following may constitute grounds for cancellation of union registration: (a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification; (b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, and the list of voters; (c) Voluntary dissolution by the members. R.A. No. 9481 also inserted in the Labor Code Article 242-A, which provides: ART. 242-A. Reportorial Requirements.—The following are documents required to be submitted to the Bureau by the legitimate labor organization concerned: (a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification of the constitution and by-laws within thirty (30) days from adoption or ratification of the constitution and by-laws or amendments thereto; (b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from election; (c) Its annual financial report within thirty (30) days after the close of every fiscal year; and (d) Its list of members at least once a year or whenever required by the Bureau. Failure to comply with the above requirements shall not be a ground for cancellation of union registration but shall subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty. ILO Convention No. 87, which we have ratified in 1953, provides that "workers’ and employers’ organizations shall not be liable to be dissolved or suspended by administrative authority." The ILO has expressed the opinion that the cancellation of union registration by the registrar of labor unions, which in our case is the BLR, is tantamount to dissolution of the organization by administrative authority when such measure would give rise to the loss of legal personality of the union or loss of advantages necessary for it to carry out its activities, which is true in our jurisdiction. Although the ILO has allowed such measure to be taken, provided that judicial safeguards are in place, i.e., the right to appeal to a judicial body, it has nonetheless reminded its members that dissolution of a union, and cancellation of registration for that matter, involve serious consequences for occupational representation. It has, therefore, deemed it preferable if such actions were to be taken only as a last resort and after exhausting other possibilities with less serious effects on the organization. It is undisputed that appellee failed to submit its annual financial reports and list of individual members in accordance with 191 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Article 239 of the Labor Code. However, the existence of this ground should not necessarily lead to the cancellation of union registration. Article 239 recognizes the regulatory authority of the State to exact compliance with reporting requirements. Yet there is more at stake in this case than merely monitoring union activities and requiring periodic documentation thereof. The more substantive considerations involve the constitutionally guaranteed freedom of association and right of workers to self-organization. Also involved is the public policy to promote free trade unionism and collective bargaining as instruments of industrial peace and democracy. An overly stringent interpretation of the statute governing cancellation of union registration without regard to surrounding circumstances cannot be allowed. Otherwise, it would lead to an unconstitutional application of the statute and emasculation of public policy objectives. Worse, it can render nugatory the protection to labor and social justice clauses that pervades the Constitution and the Labor Code.
192 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 115. REPUBLIC OF THE PHILIPPINES, represented by Department of Labor and Employment (DOLE) v. KAWASHIMA TEXTILE MFG., PHILIPPINES, INC G.R. No. 160352 July 23, 2008 AUSTRIA-MARTINEZ, J: LEGITIMACY OF A DULY REGISTERED LABOR ORGANIZATION FACTS: Kawashima Free Workers Union (KFWU) filed a Petition for Certification Election to be conducted in the bargaining unit composed of 145 rank-and-file employees of Kawashima Textile Mfg. Phils., Inc. Attached to its petition are a Certificate of Creation of Local/Chapter issued on January 19, 2000 by DOLE Regional Office No. IV, stating that it [KFWU] submitted to said office a Charter Certificate issued to it by the national federation Phil. Transport & General Workers Organization (PTGWO), and a Report of Creation of Local/Chapter. Kawashima Textile Mfg. Phils., Inc. argues that KFWU did not acquire any legal personality because its membership of mixed rank-and-file and supervisory employees violated Article 245 of the Labor Code, and its failure to submit its books of account. ISSUES: The Republic of the Philippines filed the present petition to seek cl osur e on two issues: 1) WON a mixed membership of rank-and-file and supervisory employees in a union is a ground for the dismissal of a petition for certification election in view of the amendment brought about by D.O. 9, series of 1997, which deleted the phraseology in the old rule that "[t]he appropriate bargaining unit of the rank-and-file employee shall not include the supervisory employees and/or security guards; and 2) WON the legitimacy of a duly registered labor organization can be collaterally attacked in a petition for a certification election through a motion to dismiss filed by an employer such as Kawashima Textile Manufacturing Phils., Inc. SC RULING: 1) No. In short: here, RA 9481 did not apply. If it did, the ruling would have been NO. Yet, even without using RA 9481, the Court still ruled NO using 1997 Amended Omnibus Rules, as interpreted by the Court in Tagaytay Highlands, San Miguel and Air Philippines. The key to the closure that petitioner seeks could have been Republic Act (R.A.) No. 9481. Sections 8 and 9 thereof provide: Section 8. Article 245 of the Labor Code is hereby amended to read as follows: Art. 245. Ineligibility of Managerial Employees to Join any Labor Organization; Right of Supervisory Employees. - Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in the collective bargaining unit of the rank-and-file employees but may join, assist or form separate collective bargaining units and/or legitimate labor organizations of their own. The rank and file union and the supervisors' union operating within the same establishment may join the same federation or national union. Section 9. A new provision, Article 245-A is inserted into the Labor Code to read as follows: Art. 245-A. Effect of Inclusion as Members of Employees Outside the Bargaining Unit. - The inclusion as union members of employees outside the bargaining unit shall not be a ground for the cancellation of the registration of the union. Said employees are automatically deemed removed from the list of membership of said union." (Emphasis supplied) Moreover, under Section 4, a pending petition for cancellation of registration will not hinder a legitimate labor organization from initiating a certification election, viz: 193 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Sec. 4. A new provision is hereby inserted into the Labor Code as Article 238-A to read as follows: Art. 238-A. Effect of a Petition for Cancellation of Registration. - A petition for cancellation of union registration shall not suspend the proceedings for certification election nor shall it prevent the filing of a petition for certification election. In case of cancellation, nothing herein shall restrict the right of the union to seek just and equitable remedies in the appropriate courts." (Emphasis supplied) Furthermore, under Section 12 of R.A. No. 9481, employers have no personality to interfere with or thwart a petition for certification election filed by a legitimate labor organization, to wit: Sec. 12. A new provision, Article 258-A is hereby inserted into the Labor Code to read as follows: Art. 258-A. Employer as Bystander. - In all cases, whether the petition for certification election is filed by an employer or a legitimate labor organization, the employer shall not be considered a party thereto with a concomitant right to oppose a petition for certification election. The employer's participation in such proceedings shall be limited to: (1) being notified or informed of petitions of such nature; and (2) submitting the list of employees during the preelection conference should the Med-Arbiter act favorably on the petition." (Emphasis supplied) However, R.A. No. 9481 took effect only on June 14, 2007; hence, it applies only to labor representation cases filed on or after said date. As the petition for certification election subject matter of the present petition was filed by KFWU on January 24, 2000, R.A. No. 9481 cannot apply to it. There may have been curative labor legislations29 that were given retrospective effect, but not the aforecited provisions of R.A. No. 9481, for otherwise, substantive rights and interests already vested would be impaired in the process. Instead, the law and rules in force at the time of the filing by KFWU of the petition for certification election on January 24, 2000 are R.A. No. 6715, amending Book V of Presidential Decree (P.D.) No. 442 (Labor Code),33as amended, and the Rules and Regulations Implementing R.A. No. 6715,34 as amended by Department Order No. 9, series of 1997.
When the issue of the effect of mingling was brought to the fore in Toyota, 48 the Court, citing Article 245 of the Labor Code, as amended by R.A. No. 6715, held: Clearly, based on this provision, a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory employees cannot possess any of the rights of a legitimate labor organization, including the right to file a petition for certification election for the purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code. xxxx In the case at bar, as respondent union's membership list contains the names of at least twenty-seven (27) supervisory employees in Level Five positions, the union could not, prior to purging itself of its supervisory employee members, attain the status of a legitimate labor organization. Not being one, it cannot possess the requisite personality to file a petition for certification election.49 (Emphasis supplied) In Dunlop, in which the labor organization that filed a petition for certification election was one for supervisory employees, but in which the membership included rank-and-file employees, the Court reiterated that such 194 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS labor organization had no legal right to file a certification election to represent a bargaining unit composed of supervisors for as long as it counted rank-and-file employees among its members. But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by Department Order No. 9, series of 1997 (1997 Amended Omnibus Rules). Specifically, the requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules - that the petition for certification election indicate that the bargaining unit of rank-andfile employees has not been mingled with supervisory employees - was removed. Instead, what the 1997 Amended Omnibus Rules requires is a plain description of the bargaining unit, which does not require that, for its creation and registration, a local or chapter submit a list of its members. Then came Tagaytay Highlands Int’l. Golf Club, Inc. v. Tagaytay Highlands Employees Union-PGTWO54 in which the core issue was whether mingling affects the legitimacy of a labor organization and its right to file a petition for certification election. This time, given the altered legal milieu, the Court abandoned the view in Toyota and Dunlop and reverted to its pronouncement in Lopez that while there is a prohibition against the mingling of supervisory and rank-and-file employees in one labor organization, the Labor Code does not provide for the effects thereof. Thus, the Court held that after a labor organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article 239 of the Labor Code. In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Packaging Products-San Miguel Corp. Monthlies Rank-and-File Union-FFW, the Court explained that since the 1997 Amended Omnibus Rules does not require a local or chapter to provide a list of its members, it would be improper for the DOLE to deny recognition to said local or chapter on account of any question pertaining to its individual members. More to the point is Air Philippines Corporation v. Bureau of Labor Relations,59 which involved a petition for cancellation of union registration filed by the employer in 1999 against a rank-and-file labor organization on the ground of mixed membership:60 the Court therein reiterated its ruling in Tagaytay Highlands that the inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of the Labor Code. All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as interpreted by the Court in Tagaytay Highlands, San Miguel and Air Philippines, had already set the tone for it. Toyota and Dunlop no longer hold sway in the present altered state of the law and the rules. FLOW: Toyota/Dunlop – Omnibus Rules / Tagaytay/ San Miguel/ Air Phil 2) No. Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification election; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine which organization will represent the employees in their collective bargaining with the employer. The choice of their representative is the exclusive concern of the employees; the employer cannot have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it; not even a mere allegation that some employees participating in a petition for certification election are actually managerial employees will lend an employer legal personality to block the certification election.65 The employer's only right in the proceeding is to be notified or informed thereof.
195 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 116. DEL PILAR ACADEMY, EDUARDO ESPEJO and ELISEO OCAMPO, JR. v. DEL PILAR ACADEMY EMPLOYEES UNION G.R. No. 170112 April 30, 2008 NACHURA, J.; RIGHT OF THE UNION TO COLLECT AGENCY FEES FROM NON-UNION MEMBERS (CHECK-OFF) DOCTRINE: Article 248(e) makes it explicit that Article 241, paragraph (o), requiring written authorization is inapplicable to non-union members, especially in this case where the non-union employees receive several benefits under the CBA. FACTS: Respondent Del Pilar Academy Employees Union (the UNION) is the certified collective bargaining representative of teaching and non-teaching personnel of petitioner Del Pilar Academy (DEL PILAR), an educational institution operating in Imus, Cavite. On September 15, 1994, the UNION and DEL PILAR entered into a Collective Bargaining Agreement (CBA). The UNION then assessed agency fees from nonunion employees, and requested DEL PILAR to deduct said assessment from the employees’ salaries and wages. DELPILAR, however, refused to effect deductions claiming that the non-union employees were not amenable to it. In September 1997, the UNION negotiated for the renewal of the CBA. DEL PILAR, however, refused to ren ew th e same unless the provision regarding entitlement to two (2) months summer vacation leave with pay will be amended by limiting the same to teachers, who have rendered at least three (3) consecutive academic years of satisfactory service. The UNION objected to the proposal claiming diminution of benefits. DEL PILAR refused to sign the CBA, resulting in a deadlock. The UNION requested DEL PILAR to submit the case for voluntary arbitration, but the latter allegedly refused, prompting the UNION to file a case for unfair labor practice with the Labor Arbiter. DEL PILAR denied committing unfair labor practices against the UNION. DEL PILAR admitted its failure to deduct the agency fees from the salaries of non-union employees, but justifies the nondeduction by the absence of individual written authorization. It posits that Article 248(e) is inapplicable considering that its employees derived no benefits from the CBA. Besides, the non-union employees objected to the deduction; hence, a written authorization is indispensable to affect a valid check off. As regards the proposal to amend the provision on summer vacation leave with pay, DEL PILAR alleged that the proposal cannot be considered unfair for it was done to make the provision of the CBA conformable to the DECS’ Manual of Regulations for Private Schools. LA RULING: There was an error on the part of DEL PILAR not to have collected agency fee due other workers who are non-union members but are included in the bargaining unit being represented by the UNION. As stated in Art. 248, to wit: Employees of an appropriate collective bargaining unit who are not members of the recognized collective bargaining agency may be assessed a reasonable fee equivalent to the dues and other fees paid by members of the recognized collective bargaining agreement: Provided, that the individual authorization required under Article [241], paragraph (o) of this Code shall not apply to the non-members of the recognized collective bargaining agent. For receipt of CBA benefits brought about by the CBA negotiated with petitioners, non-union members are duty bound to pay agency fees which may lawfully be deducted sans individual check-off authorization. Being recipients of said benefits; they should share and be made to pay the same considerations imposed upon the union members. The proposal to decrease the coverage of the 11th and 12th month vacation with pay was not done in bad faith but rather in an honest attempt to make perfect procession following the DECS’ Manuals. It is of judicial notice that in the course of negotiation, almost all provisions are up for grabs, amendments or change. This is something normal in the course of a negotiation and does not necessarily connote bad faith as each everyone has the right to negotiate reward or totally amend the provisions of the 196 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS contract/agreement. It must be noted that a CBA is a contract between labor and management and is not simply a litany of benefits for labor. For unfair labor practice to prosper there must be a clear showing of acts aimed at stifling the worker’s right to self- organization. Mere allegations and mistake notions would not suffice. NLRC RULING: Affirmed LA’s ruling, upheld the UNION’s right to agency fee, but did not consider DELPILAR’s failure to deduct the same an unfair labor practice CA RULING: Private respondent Del Pilar Academy is ordered to deduct the agency fees from non-union members. The agency fees shall be equivalent to the dues and other fees paid by the union members. ISSUES: Can the Union collect agency fees from non-union members even without a written authorization and thus constituting a valid check off? SC RULING: Yes, the grant of annual salary increase is not the only provision in the CBA that benefited the non-union employees. The UNION negotiated for other benefits as well that surely benefited the non-union employees, justifying the collection of, and the UNION’s entitlement to, agency fees. Accordingly, no requirement of written authorization from the non-union employees is needed to effect a valid check off. Article 248(e) makes it explicit that Article 241, paragraph (o), requiring written authorization is inapplicable to non-union members, especially in this case where the non-union employees receive several benefits under the CBA.
197 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 117. EDUARDO J. MARINO, JR., ET. AL. v. GIL Y. GAMILLA, ET. AL. G.R. No. 149763 July 7, 2009 CHICO-NAZARIO, J.: CHECK OFF DOCTRINE: General rule is that attorney’s fees, negotiation fees, and other similar charges may only be collected from union funds, not from the amounts that pertain to individual union members FACTS: Petitioners were among the executive officers and directors (collectively called the Mariño Group) of the University of Sto. Tomas Faculty Union (USTFU), a labor union duly organized and registered under the laws of the Republic of the Philippines and the bargaining representative of the faculty members of the University of Santo Tomas (UST). Respondents were UST professors and USTFU members. The 1986 CBA between UST and USTFU expired on 31 May 1988. Thereafter, bargaining negotiations ensued between UST and the Mariño Group, which represented USTFU. They were not able to reach an agreement and a bargaining deadlock was declared. On 1992, UST and USTFU executed a (MOA), whereby UST faculty members belonging to the collective bargaining unit were granted additional economic benefits for the fourth and fifth years of the 1988-1993 CBA, specifically, the period from 1 June 1992 up to 31 May 1993. MEMORANDUM OF AGREEMENT 1.0. The University hereby grants additional benefits to Faculty Members belonging to the collective bargaining unit xxx, which additional benefits shall amount in the aggregate to P42,000,000.00[.] 7.0. It is clearly understood and agreed upon that the aggregate sum of P42 million is chargeable against the share of the faculty members in the incremental proceeds of tuition fees collected and still to be collected; xxx and incremental proceeds are, by law and pertinent (DECS) regulations, required to be allotted for the payment of salaries, wages, allowances and other benefits of teaching and non-teaching personnel for the UNIVERSITY. On 12 September 1992, the majority of USTFU members signed individual instruments of ratification, which purportedly signified their consent to the economic benefits granted under the MOA. USTFU, through its President, petitioner Atty. Mariño, wrote a letter to the UST Treasurer requesting the release to the union of the sum ofP4.2 million, which was 10% of the P42 million economic benefits package granted by the MOA to faculty members belonging to the collective bargaining unit. UST remitted the sum of P4.2 million to USTFU. After deducting from the P42 million economic benefits package several expenses, a net amount of P6, 389,145.04 remained and was distributed to the faculty members. On 15 December 1994, respondents filed with the Med-Arbiter, DOLE- National Capital Region (NCR), a Complaint for the expulsion of the Mariño Group as USTFU officers and directors. Alleged in their Complaint that the Mariño Group violated the rights and conditions of membership in USTFU, particularly by: 1) investing the unspent balance of the P42 million economic benefits package given by UST without prior approval of the general membership; 2) simultaneously holding elections viva voce; 3) ratifying the CBA involving the P42 million economic benefits package; and 4) approving the attorney’s/agency fees worth P4.2 million in the form of check-off. On 16 December 1994, UST and USTFU, represented by the Mariño Group, entered into a new CBA, effective 1 June 1993 to 31 May 1998 (1993-1998 CBA). 24 September 1996, petitioner Collantes, as USTFU Secretary- General, posted notices in some faculty rooms at UST, informing the union members of a general assembly. The agenda was the election of new On October 4 1996, the UST Secretary General headed a general faculty assembly. Respondents were among the elected officers of USTFU (collectively referred to as the Gamilla Group). Med-Arbiter DOLE-NCR, nullified the election of the 198 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Gamilla Group as USTFU officers. Affirmed on appeal by the (BLR). Respondents filed before the Med-Arbiter, DOLE-NCR, a complaint against the Mariño Group, as well as the Philippine Foundation for the Advancement of the Teaching Profession, Inc., Security Bank Corporation, and Bank of the Philippine Islands claiming that they were the legitimate USTFU officers, having been elected on 4 October 1996. They prayed for an order directing the Mariño Group to cease and desist from using the name of USTFU and from performing acts for and on behalf of the USTFU and the rest of the members of the collective bargaining unit. DOLE-NCR Regional Director: Mariño Group, as the executive officers of USTFU, guilty of violating the provisions of the USTFU Constitution and By-laws. Also, they violated Article 241(c) and (l) of the Labor Code when among others, they invested in a bank, without prior consent of USTFU members, the sum of P9,766,570.01, which formed part of the P42 million economic benefits package. Additionally, the check-off of P4.2 million collected by the Mariño Group, as negotiation fees, was invalid. Under Republic Act No. 6728, 70% of the tuition fee increases should be allotted to academic and non-academic personnel. Given that the records were silent as to how much of the P42 million economic benefits package was obtained through negotiations and how much was from the statutory allotment of 70% of the tuition fee increases, the DOLE-NCR Regional Director held that the entire amount was within the statutory allotment, which could not be the subject of negotiation and, thus, could not be burdened by negotiation fees BLR: Agreed with DOLE-NCR Regional Director CA: Agreed with the BLR. ISSUE: Was the 10% check off made by the Marino group valid? SC RULING: No. UST and USTFU stipulated in their 10 September 1992 MOA that the P42 million economic benefits package granted by UST to the members of the collective bargaining unit represented by USTFU, was chargeable against the 70% allotment from the proceeds of the tuition fee increases collected and still to be collected by UST. As observed by the DOLE-NCR Regional Director, and affirmed by both the BLR and the Court of Appeals, there is no showing that any portion of the P42 million economic benefits package was derived from sources other than the 70% allotment from tuition fee increases of UST. Given the lack of evidence to the contrary, it can be conclusively presumed that the entire P42 million economic benefits package extended to USTFU came from the 70% allotment from tuition fee increases of UST. Preceding from this presumption, any deduction from the P42 million economic benefits package, such as the P4.2 million claimed by the Mariño Group as attorney’s/agency fees, should not be allowed, because it would ultimately result in the reduction of the statutorily mandated 70% allotment from the tuition fee increases of UST. General rule is that attorney’s fees, negotiation fees, and other similar charges may only be collected from union funds, not from the amounts that pertain to individual union members. As an exception, special assessments or other extraordinary fees may be levied upon or checked off from any amount due an employee for as long as there is proper authorization by the employee. A check-off is a process or device whereby the employer, on agreement with the Union, recognized as the proper bargaining representative, or on prior authorization from the employees, deducts union dues or agency fees from the latter's wages and remits them directly to the Union. The Court finds that, in the instant case, the P42 million economic benefits package granted by UST did not constitute union funds from whence the P4.2 million could have been validly deducted as attorney’s fees. The P42 million economic benefits package was not intended for the USTFU coffers, but for all the members of the bargaining unit USTFU represented, whether members or non-members of the union. A close reading of the terms of the MOA reveals that after the satisfaction of the outstanding obligations of UST under the 1986 CBA, the balance of the P42 million was to be distributed to the covered faculty members of the collective bargaining unit in the form of salary increases, returns on paycheck deductions; and increases in hospitalization, educational, and retirement benefits, and other economic benefits. The deduction of the P4.2 million, as alleged attorney’s/agency fees, from the P42 million economic benefits package effectively decreased the share from said package accruing to each member of the collective bargaining unit 199 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS The Court further determines that the requisites for a valid levy and check-off of special assessments, laid down by Article 241(n) and (o), respectively, of the Labor Code, as amended, have not been complied with in the case at bar. To recall, these requisites are: (1) an authorization by a written resolution of the majority of all the union members at the general membership meeting duly called for the purpose; (2) secretary's record of the minutes of the meeting; and (3) individual written authorization for check-off duly signed by the employee concerned. In an attempt to comply with the foregoing requirements, the Mariño Group caused the majority of the general membership of USTFU to individually sign a document, which embodied the ratification of the MOA between UST and USTFU, dated 10 September 1992, as well as the authorization for the check-off of P4.2 million, from the P42 million economic benefits package, as payment for attorney’s fees. As held by the Court of Appeals, however, the said documents constitute unsatisfactory compliance with the requisites set forth in the Labor Code, as amended, and in the USTFU Constitution and By-Laws, even though individually signed by a majority of USTFU members. The inclusion of the authorization for a check-off of union dues and special assessments for the Labor Education Fund and attorney’s fees, in the same document for the ratification of the 10 September 1992 MOA granting the P42 million economic benefits package, necessarily vitiated the consent of USTFU members. The failure of the Mariño Group to strictly comply with the requirements set forth by the Labor Code, as amended, and the USTFU Constitution and By- Laws, invalidates the questioned special assessment. Substantial compliance is not enough in view of the fact that the special assessment will diminish the compensation of the union members. Their express consent is required, and this consent must be obtained in accordance with the steps outlined by law, which must be followed to the letter. No shortcuts are allowed.
200 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 118. THE HERITAGE HOTEL MANILA, acting through its owner, GRAND PLAZA HOTEL CORPORATION v. NATIONAL UNION OF WORKERS IN THE HOTEL, RESTAURANT AND ALLIED INDUSTRIES-HERITAGE HOTEL MANILA SUPERVISORS CHAPTER (NUWHRAIN-HHMSC G.R. No. 178296 January 12, 2011 NACHURA, J.: DOCTRINE: Non-filing of reportorial requirements is not a ground for cancellation of union registration. FACTS: Respondent filed with the Department of Labor and Employment- National Capital Region (DOLE-NCR) a petition for certification election. The Med-Arbiter granted the petition and ordered the holding of a certification election. On appeal, the DOLE Secretary affirmed the Med-Arbiter’s order and remanded the case to the Med-Arbiter for the holding of a preelection conference. Petitioner filed a motion for reconsideration, but it was denied. Subsequently, petitioner discovered that respondent had failed to submit to the Bureau of Labor Relations (BLR) its annual financial report for several years and the list of its members since it filed its registration papers in 1995. Consequently, petitioner filed a Petition for Cancellation of Registration of respondent, on the ground of the nonsubmission of the said documents. Petitioner prayed that respondent’s Certificate of Creation of Local/Chapter be cancelled and its name be deleted from the list of legitimate labor organizations. It further requested the suspension of the certification election proceedings. On June 1, 2000, petitioner reiterated its request by filing a Motion to dismiss or suspend the [Certification Election] Proceedings. Nevertheless, the certification election pushed through on June 23, 2000. Respondent emerged as the winner. On June 28, 2000, petitioner filed a Protest with Motion to Defer Certification of Election Results and Winner, stating that the certification election held on June 23, 2000 was an exercise in futility because, once respondent’s registration is cancelled, it would no longer be entitled to be certified as the exclusive bargaining agent of the supervisory employees. Meanwhile, respondent filed its Answer to the petition for the cancellation of its registration. It averred that the petition was filed primarily to delay the conduct of the certification election, the respondent’s certification as the exclusive bargaining representative of the supervisory employees, and the commencement of bargaining negotiations. Respondent prayed for the dismissal of the petition for cancellation for the following reasons: (a) petitioner is estopped from questioning respondent’s status as a legitimate labor organization as it had already recognized respondent as such during the preelection conferences; (b) petitioner is not the party-in- interest, as the union members are the ones who would be disadvantaged by the non-submission of financial reports; (c) it has already complied with the reportorial requirements, having submitted its financial statements for 1996, 1997, 1998, and 1999, its updated list of officers, and its list of members for the years 1995, 1996, 1997, 1998, and 1999; (d) the petition is already moot and academic, considering that the certification election had already been held, and the members had manifested their will to be represented by respondent MED-ARBITER: pendency of a petition for cancellation of registration is not a bar to the holding of a certification election. Thus, in an Order dated January 26, 2001, the Med-Arbiter dismissed petitioner’s protest, and certified respondent as the sole and exclusive bargaining agent of all supervisory employees. In the meantime, Regional Director Alex E. Maraan (Regional Director Maraan) of DOLE-NCR finally resolved the petition for cancellation of registration. While emphasizing that the non-compliance with the law is not viewed with favor—considered the belated submission of the annual financial reports and the list of members as sufficient compliance thereof and considered them as having been submitted on time. DOLE SEC: Denied petitioner’s MR (jurisdiction belongs to the BLR, but the BLR director in this case inhibited himself, thus the DOLE Sec took cognizance of the appeal) CA: DOLE sec did not commit grave abuse of discretion when she took cognizance of the case because in the absence of the BLR Director, there is no person more competent to resolve the appeal than the DOLE Secretary. 201 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Further, it affirmed DOLE’s ruling requirements of registration of labor organizations are an exercise of the overriding police power of the State, designed for the protection of workers against potential abuse by the union that recruits them. These requirements should not be exploited to work against the workers’ constitutionally protected right to self- organization. ISSUE: Is the non-filing of reportorial requirements a ground for cancellation of union registration? SC RULING: No. Articles 238-239 give the Regional Director ample discretion in dealing with a petition for cancellation of a union’s registration, particularly, determining whether the union still meets the requirements prescribed by law. It is sufficient to give the Regional Director license to treat the late filing of required documents as sufficient compliance with the requirements of the law. After all, the law requires the labor organization to submit the annual financial report and list of members in order to verify if it is still viable and financially sustainable as an organization so as to protect the employer and employees from fraudulent or fly-by-night unions. With the submission of the required documents by respondent, the purpose of the law has been achieved, though belatedly. We cannot ascribe abuse of discretion to the Regional Director and the DOLE Secretary in denying the petition for cancellation of respondent’s registration. The union members and, in fact, all the employees belonging to the appropriate bargaining unit should not be deprived of a bargaining agent, merely because of the negligence of the union officers who were responsible for the submission of the documents to the BLR. It is worth mentioning that the Labor Code’s provisions on cancellation of union registration and on reportorial requirements have been recently amended by Republic Act (R.A.) No. 9481, An Act Strengthening the Workers’ Constitutional Right to Self-Organization, Amending for the Purpose Presidential Decree No. 442, As Amended, Otherwise Known as the Labor Code of the Philippines, which lapsed into law on May 25, 2007 and became effective on June 14, 2007. Thus, R.A. No. 9481 amended Article 239 (now 245) to read: R.A. No. 9481 also inserted in the Labor Code Article 242-A (now 248-A), which provides: ART. 242-A. Reportorial Requirements.—The following are documents required to be s ubmitted to the Bureau by the legitimate labor organization concerned: xxxxxxx Failure to comply with the above requirements shall not be a ground for cancellation of union registration but shall subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty.
202 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 119. ABARIA vs. NATIONAL LABOR RELATIONS COMMISSION G.R. No. 154113 December 7, 2011 VILLARAMA JR., J. DOCTRINE: Legality of mass termination of hospital employees who participated in strike and picketing activities. FACTS: The National Federation of Labor (NFL) is the exclusive bargaining representative of the rank-and-file employees of Metro Cebu Community Hospital, Inc (MCCHI). On December 6, 1995, Nava through NAMA-MCCH-NFL wrote Rev. Iyoy (Hospital admin) expressing the union’s desire to renew the CBA, attaching to her letter a statement of proposals signed/endorsed by 153 union members. Nava subsequently requested that some employees to be allowed to avail of one-day union leave with pay Meanwhile, Atty. Alforque informed MCCHI that NFL has not authorized any person for collective bargaining negotiations. By January 1996, the collection of union fees (check-off) was temporarily suspended by MCCHI in view of the existing conflict between the federation and its local affiliate. On February 26, 1996, upon the request of Atty. Alforque, MCCHI granted one-day union leave with pay for 12 union members The next day, several union members led by Nava and her group launched a series of mass actions such as wearing black and red armbands/headbands, marching around the hospital premises and putting up placards, posters and streamers. MCCHI directed the union officers led by Nava to submit within 48 hours a written explanation why they should not be terminated for having engaged in illegal concerted activities amounting to strike, and placed them under immediate preventive suspension. Responding to this directive, Nava and her group denied there was a temporary stoppage of work, explaining that employees wore their armbands only as a sign of protest and reiterating their demand for MCCHI to comply with its duty to bargain collectively. Rev. Iyoy, having been informed that Nava and her group have also been suspended by NFL, directed said officers to appear before his office for investigation in connection with the illegal strike. Said union officers, however, invoked the grievance procedure provided in the CBA to settle the dispute between management and the union. On March 13 and 19, 1996, DOLE issued certifications stating that there is nothing in their records which shows that NAMA-MCCH-NFL is a registered labor organization, and that said union submitted only a copy of its Charter Certificate on January 31, 1995. NAMA-MCCH-NFL filed a Notice of Strike but the same was deemed not filed for want of legal personality on the part of the filer. Despite such rebuff, Nava and her group still conducted a strike vote, which an overwhelming majority of union members approved of. MCCHI again sent notices informing them that their refusal to submit to investigation is deemed a waiver of their right to explain their side and management shall proceed to impose proper disciplinary action under the circumstances. MCCHI then sent termination letters to union leaders and other members who participated in the strike and picketing activities and also issued a cease-and-desist order to the rest of the striking employees stressing that the wildcat concerted activities spearheaded by the Nava group is illegal without a valid Notice of Strike and warning them that non-compliance will compel management to impose disciplinary actions against them. For their continued picketing activities despite the said warning, more than 100 striking employees were dismissed Unfazed, the striking union members held more mass actions. The means of ingress to and egress from the hospital were blocked. Employees and patients reported acts of intimidation and harassment perpetrated by union leaders and members. With the intensified atmosphere of violence and animosity within the hospital premises as a result of continued protest activities by union members, MCCHI suffered heavy losses due to low patient admission rates. MCCHI filed a petition for injunction in the NLRC and a TRO was issued. MCCHI presented 12 witnesses (hospital employees and patients), including a security guard who was stabbed by an identified sympathizer while in the company of Nava’s group. MCCHI’s petition was granted and a permanent injunction was issued enjoining the Nava group from committing illegal acts mentioned in Art. 264 of the Labor Code Thereafter, several complaints for illegal dismissal and unfair labor practice were filed by the terminated employees against MCCHI, Rev. Iyoy, UCCP and members of the Board of Trustees of MCCHI. 203 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS Exec. LA: dismissed the complaints for unfair labor practice in NLRC for finding no basis for the charge of unfair labor practice and declared the strike and picketing activities illegal having been conducted by NAMAMCCH-NFL which is not a legitimate labor organization; NLRC: denied complainants’ motion for reconsideration CA via a petition for certiorari: dismissed because only 47 out of 88 petitioners signed the certification against forum shopping. ISSUES: (1) Did CA err in dismissing the certiorari?; (2) Is MCCHI guilty of ULP?; (3) Were employees illegally dismissed?; and (4) If their termination was illegal, whether petitioning employees are entitled to separation pay, backwages, damages and attorney’s fees? SC: 1. Yes. The signatures of 47 out of 88 petitioning employees in the certification against forum shopping constitute substantial compliance with the rule. When they appealed their case to the CA, they pursued the same as a collective body, raising only one argument in support of their cause of action, i.e., the illegal dismissal allegedly committed by MCCHI when union members resorted to strike and mass actions due to MCCHI’s refusal to bargain with officers of the local chapter. Clearly, the CA erred in dropping as parties-petitioners those who did not sign the certification against forum shopping. 2. No. Art. 248 (g) of the Labor Code, as amended, makes it an unfair labor practice for an employer “[t]o violate the duty to bargain collectively” as prescribed by the Code. The applicable provision in this case is Art. 253 which provides: ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. – When there is a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties. Records of the NCMB and DOLE confirmed that NAMA-MCCH-NFL had not registered as a labor organization, having submitted only its charter certificate as an affiliate or local chapter of NFL. Not being a legitimate labor organization, NAMA-MCCH-NFL is not entitled to those rights granted to a legitimate labor organization under Art. 242, specifically: (a) To act as the representative of its members for the purpose of collective bargaining; (b) To be certified as the exclusive representative of all the employees in an appropriate collective bargaining unit for purposes of collective bargaining; NAMA-MCCH-NFL is not the labor organization certified or designated by the majority of the rank-andfile hospital employees to represent them in the CBA negotiations but the NFL, as evidenced by CBAs concluded in 1987, 1991 and 1994. While it is true that a local union has the right to disaffiliate from the national federation, NAMA-MCCH-NFL has not done so as there was no any effort on its part to comply with the legal requisites for a valid disaffiliation, Nava and her group simply demanded that MCCHI directly negotiate with the local union which has not even registered as one. In any case, NAMA-MCCH-NFL at the time of submission of said proposals was not a duly registered labor organization; hence it cannot legally represent MCCHI’s rank-and-file employees for purposes of collective bargaining. Hence, NAMA-MCCH-NFL cannot demand from MCCHI the right to bargain collectively in their behalf. Hence, MCCHI’s refusal to bargain then with NAMA-MCCH-NFL cannot be considered an unfair labor practice to justify the staging of the strike Art. 263 (b) of the Labor Code, as amended, provides: ART. 263. Strikes, picketing and lockouts. – x x x (b) Workers shall have the right to engage in concerted activities for purposes of collective bargaining or for their mutual benefit and protection. The right of legitimate labor organizations to strike and picket and of employers to lockout, consistent with the national interest, shall 204 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS continue to be recognized and respected. However, no labor union may strike and no employer may declare a lockout on grounds involving inter-union and intra-union disputes. x x x x (Emphasis supplied.) Since NAMA-MCCH-NFL was not a duly registered or an independently registered union at the time it filed the notice of strike and when it conducted the strike vote. Consequently, the mandatory notice of strike and the conduct of the strike vote report were ineffective for having been filed and conducted by NAMA-MCCH-NFL, which has no legal personality as a legitimate labor organization, in violation of Art. 263 (c), (d) and (f) of the Labor Code and Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code. Furthermore, the strike was illegal due to the commission of the following prohibited activities: (1) violence, coercion, intimidation and harassment against non-participating employees; and (2) blocking of free ingress to and egress from the hospital, including preventing patients and their vehicles from entering the hospital and other employees from reporting to work, the putting up of placards with a statement advising incoming patients to proceed to another hospital because MCCHI employees are on strike/protest. The prolonged work stoppage and picketing activities of the striking employees severely disrupted hospital operations that MCCHI suffered heavy financial losses. 3. Yes and No. The consequences of illegal strike to union officers and members are different. Art. 264 (a) of the Labor Code, as amended, provides for the consequences of an illegal strike to the participating workers: x x x Any union officer who knowingly participates in illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. The above provision makes a distinction between workers and union officers who participate in an illegal strike: an ordinary striking worker cannot be terminated for mere participation in an illegal strike. There must be proof that he or she committed illegal acts during a strike. A union officer, on the other hand, may be terminated from work when he knowingly participates in an illegal strike, and like other workers, when he commits an illegal act during a strike. Considering their persistence in holding picketing activities despite the declaration by the NCMB that their union was not duly registered as a legitimate labor organization and the letter from NFL’s legal counsel informing that their acts constitute disloyalty to the national federation, and their filing of the notice of strike and conducting a strike vote notwithstanding that their union has no legal personality to negotiate with MCCHI for collective bargaining purposes, there is no question that NAMA-MCCH-NFL officers knowingly participated in the illegal strike. With respect to the dismissed union members, although MCCHI submitted photographs taken at the picket line, it did not individually name those striking employees and specify the illegal act committed by each of them. Consequently, we find no error committed by the CA in CA-G.R. SP No. 66540 when it modified the decision of the NLRC and ruled that the dismissal of union members who merely participated in the illegal strike was illegal. 4. Separation pay only Since there is no clear proof that union members actually participated in the commission of illegal acts during the strike, they are not deemed to have lost their employment status as a consequence of a declaration of illegality of the strike. Considering that 15 years had lapsed from the onset of this labor dispute, and in view of strained relations that ensued, in addition to the reality of replacements already hired by the hospital which had apparently recovered from its huge losses, and with many of the petitioners either employed elsewhere, already old and sickly, or otherwise incapacitated, separation pay without back wages is the appropriate relief. We note that during the pendency of the cases in this Court, some of the petitioners have entered into compromise agreements with MCCHI, all of which were duly approved by this Court. Thus, there are some employees who are excluded from the herein monetary awards are the following petitioners whose compromise agreements have been approved by this Court. 205 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 120. WESLEYAN UNIVERSITY PHILIPPINES v. WESLEYAN UNIVERSITY- PHILIPPINES FACULTY AND STAFF ASSOCIATION G.R. No. 181806 March 12, 2014 DEL, CASTILLO, J.: DOCTRINE: A Collective Bargaining Agreement (CBA) is a contract entered into by an employer and a legitimate labor organization concerning the terms and conditions of employment. Like any other contract, it has the force of law between the parties and, thus, should be complied with in good faith. Unilateral changes or suspensions in the implementation of the provisions of the CBA, therefore, cannot be allowed without the consent of both parties. FACTS: Petitioner Wesleyan University-Philippines is a non-stock, non-profit educational institution duly organized and existing under the laws of the Philippines. Respondent Wesleyan University-Philippines Faculty and Staff Association, on the other hand, is a duly registered labor organization acting as the sole and exclusive bargaining agent of all rank-and-file faculty and staff employees of petitioner. In December 2003, the parties signed a 5-year CBA effective June 1, 2003 until May 31, 2008. On August 16, 2005, petitioner, through its President, Atty. Guillermo T. Maglaya (Atty. Maglaya), issued a Memorandum providing guidelines on the implementation of vacation and sick leave credits as well as vacation leave commutation. On August 25, 2005, respondent’s President, Cynthia L. De Lara (De Lara) wrote a letter to Atty. Maglaya informing him that respondent is not amenable to the unilateral changes made by petitioner. De Lara questioned the guidelines for being violative of existing practices and the CBA. On February 8, 2006, a Labor Management Committee (LMC) Meeting was held during which petitioner advised respondent to file a grievance complaint on the implementation of the vacation and sick leave policy. In the same meeting, petitioner announced its plan of implementing a one-retirement policy, which was unacceptable to respondent. VA: The assailed University guidelines on the availment of vacation and sick leave credits and vacation leave commutation are contrary to law. The “one retirement” policy is contrary to law and is hereby revoked and rescinded. CA: The rulings of the VA are supported by substantial evidence and affirmed the decision thereof on that the Memorandum and the one reirement policy unilaterally amended the CBA without the consent of respondent. ISSUE: Were the acts of petitioner issuing the memorandum re vacation/sick leaves and announcing the oneretirement policy valid? SC RULING: No. The Non-Diminution Rule found in Article 100 of the Labor Code explicitly prohibits employers from eliminating or reducing the benefits received by their employees. This rule, however, applies only if the benefit is based on an express policy, a written contract, or has ripened into a practice. To be considered a practice, it must be consistently and deliberately made by the employer over a long period of time. Crallawlibrary An exception to the rule is when “the practice is due to error in the construction or application of a doubtful or difficult question of law.” The error, however, must be corrected immediately after its discovery; otherwise, the rule on Non-Diminution of Benefits would still apply. In this case, respondent was able to present substantial evidence in the form of affidavits to support its claim that there are two retirement plans. Based on the affidavits, petitioner has been giving two retirement benefits as early as 1997. Petitioner, on the other hand, failed to present any evidence to refute the veracity of these affidavits. There is substantial evidence to prove that there is an existing practice of giving two retirement benefits, one under the Private Education Retirement Annuity Association (PERAA) Plan and another under the CBA Retirement Plan. As to the Memorandum, Sections 1 and 2 of Article XII of the CBA provide that all covered employees are entitled to 15 days sick leave and 15 days vacation leave with pay every year and that after the second year of service, 206 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS all unused vacation leave shall be converted to cash and paid to the employee at the end of each school year, not later than August 30 of each year. The Memorandum, however, states that vacation and sick leave credits are not automatic as leave credits would be earned on a month-to-month basis. This, in effect, limits the available leave credits of an employee at the start of the school year. For example, for the first four months of the school year or from June to September, an employee is only entitled to five days vacation leave and five days sick leave. Considering that the Memorandum dated August 16, 2005 imposes a limitation not agreed upon by the parties nor stated in the CBA, we agree with the CA that it must be struck down. In closing, it may not be amiss to mention that when the provision of the CBA is clear, leaving no doubt on the intention of the parties, the literal meaning of the stipulation shall govern. However, if there is doubt in its interpretation, it should be resolved in favor of labor, as this is mandated by no less than the Constitution.
207 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 121. SMCC v. CHARTER CHEMICAL and COATING CO. G.R. No. 169717 March 16, 2011 DEL CASTILLO, J.: DOCTRINE: The right to file a petition for certification election is accorded to a labor organization provided that it complies with the requirements of law for proper registration. The inclusion of supervisory employees in a labor organization seeking to represent the bargaining unit of rank-and-file employees does not divest it of its status as a legitimate labor organization. FACTS: Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for Empowerment and Reforms (SMCC) filed a petition for certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation (CHARTER) with the Mediation Arbitration Unit. CHARTER filed an Answer with Motion to Dismiss on the ground that petitioner union is not a legitimate labor organization because of (1) failure to comply with the documentation requirements set by law, and (2) the inclusion of supervisory employees within petitioner union. MED ARBITER’S RULING: Dismissed the petition for certification election. Petitioner union is not a legitimate labor organization because the Charter Certificate were not executed under oath and certified by the union secretary and attested to by the union president as required by Section 235 of the Labor Code. As a result, not being a legitimate labor organization, petitioner union has no right to file a petition for certification election for the purpose of collective bargaining. DOLE’S RULING: Dismissed the SMCC’s appeal on the ground that the latter’s petition for certification election was filed out of time. Although, contrary to the findings of the Med-Arbiter, that the charter certificate need not be verified and that there was no independent evidence presented to establish respondent company’s claim that some members of petitioner union were holding supervisory positions DOLE’S RULING ON MR: DOLE reversed its earlier ruling. DOLE found that a review of the records indicates that no certification election was previously conducted in respondent company. There was no obstacle to the grant of petitioner union’s petition for certification election. CA’S RULING: Nullified DOLE’s ruling. 1. It gave credence to the findings of the Med-Arbiter that petitioner union failed to comply with the documentation requirements under the Labor Code 2. Upheld the finding that petitioner union consisted of both rank-and-file and supervisory employee 3. Issues as to the legitimacy of petitioner union may be attacked collaterally in a petition for certification election and the infirmity in the membership of petitioner union cannot be remedied through the exclusioninclusion proceedings in a pre-election conference 4. Considering that petitioner union is not a legitimate labor organization, it has no legal right to file a petition for certification election. ISSUES: 1. Is the mixture of rank-and-file and supervisory employees of SMCC’s membership is a ground for the cancellation of SMCC’s personality and dismissal of petition for certification election? 2. Is failure to certify under oath the local charter certificate issued by its mother federation and list of the union membership attending the organizational meeting is a ground for the cancellation of SMCC’s legal personality as a labor organization and for the dismissal of the petition for certification election? 3. May the legal personality of a union be collaterally attacked in the certification election proceedings? SC RULING: 1. NO. The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal personality as a legitimate labor organization. The job descriptions indicate that the aforesaid employees exercise recommendatory managerial actions which are not merely routinary but require the use of independent judgment, hence, falling within the 208 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS definition of supervisory employees under Article 212. The inclusion of the aforesaid supervisory employees in petitioner union does not divest it of its status as a legitimate labor organization. R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition [on the co-mingling of supervisory and rank-and-file employees] would bring about on the legitimacy of a labor organization. It should be emphasized that the petitions for certification election involved in Toyota and Dunlop (previous cases where the SC ruled that labor organization had no legal right to file a certification election to represent a bargaining unit composed of supervisors for as long as it counted rank-and-file employees among its members) were filed on November 26, 1992 and September 15, 1995, respectively; hence, the 1989 Rules was applied in both cases. The Court abandoned the view in Toyota and Dunlop and reverted to its pronouncement in Lopez that while there is a prohibition against the mingling of supervisory and rank-and-file employees in one labor organization, the Labor Code does not provide for the effects thereof. Thus, the Court held that after a labor organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article 239 of the Labor Code. 2. NO. The charter certificate need not be certified under oath by the local union’s secretary or treasurer and attested to by its president. [The operative facts in this case occurred in 1999, we shall decide the issues under the pertinent legal provisions then in force (i.e., R.A. No. 6715)] The Court ruled that it was not necessary for the charter certificate to be certified and attested by the local/chapter officers. Id. While this ruling was based on the interpretation of the previous Implementing Rules provisions which were supplanted by the 1997 amendments, we believe that the same doctrine obtains in this case. Considering that the charter certificate is prepared and issued by the national union and not the local/chapter, it does not make sense to have the local/chapter’s officers x x x certify or attest to a document which they had no hand in the preparation of. SMCC’s charter certificate need not be executed under oath. Consequently, it validly acquired the status of a legitimate labor organization upon submission of (1) its charter certificate, (2) the names of its officers, their addresses, and its principal office, and (3) its constitution and by-laws — the last two requirements having been executed under oath by the proper union officials as borne out by the records. 3. NO. The legal personality of petitioner union cannot be collaterally attacked by respondent company in the certification election proceedings. Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification election; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine which organization will represent the employees in their collective bargaining with the employer.
209 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 122. CATHAY PACIFIC STEEL CORPORATION v. CA G.R. No. 164561 August 30, 2006 CHICO-NAZARIO, J.: DOCTRINE: Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions, if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment; whereas managerial employees are those who are vested with powers or prerogatives to lay down and execute management policies and/or hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. In this case, being a supervisory employee of CAPASCO, Tamondong cannot be prohibited from joining or participating in the union activities. FACTS: Cathay Pacific Steel Corporation (CAPASCO), hired Tamondong as Assistant to the Personnel Manager for its Cainta Plant. He was promoted to the position of Personnel/Administrative Officer, and later to that of Personnel Superintendent. Supervisory personnel of CAPASCO launched a move to organize a union among their ranks, later known as private respondent CUSE. Tamondong actively involved himself in the formation of the union and was even elected as one of its officers after its creation. CAPASCO sent memo to Tamondong requiring him to explain and to discontinue from his union activities, with a warning that a continuance thereof shall adversely affect his employment in the company. Tamondong invoked his right as a supervisory employee to join and organize a labor union. CAPASCO terminated the employment of Tamondong on the ground of loss of trust and confidence, citing his union activities as acts constituting serious disloyalty to the company. Tamondong challenged his dismissal for being illegal and as an act involving unfair labor practice. CAPASCO contended that by virtue of private respondent Tamondong’s position as Personnel Superintendent and the functions actually performed by him in the company, he was considered as a managerial employee, thus, under the law he was prohibited from joining a union as well as from being elected as one of its officers. LA: Ruled in favor of Tamondong. Tamondong and CUSE filed a Petition for Certiorari under Rule 65 of the Rules of Court before the Court of Appeals CA: Granted the petition PETITIONER’S CONTENTION: Tamondong as Personnel Superintendent of CAPASCO was performing functions of a managerial employee because he was the one laying down major management policies on personnel relations such as: issuing memos on company rules and regulations, imposing disciplinary sanctions such as warnings and suspensions, and executing the same with full power and discretion. ISSUE: Is Tamondong a supervisory employee? SC RULING: YES. The findings of the Court of Appeals that Tamondong was indeed a supervisory employee and not a managerial employee, thus, eligible to join or participate in the union activities of private respondent CUSE, were supported by evidence on record. CA made reference to the Memo which required private respondent Tamondong to observe fixed daily working hours from 8:00 am to 12:00 noon and from 1:00 pm to 5:00 pm. This imposition upon private respondent Tamondong, according to the Court of Appeals, is very uncharacteristic of a managerial employee. One of the essential characteristics of an employee holding a managerial rank is that he is not subjected to the rigid observance of regular office hours or maximum hours of work. Tamondong may have possessed enormous powers and was performing important functions that goes with the position of Personnel Superintendent, nevertheless, there was no clear showing that he is at liberty, by using his own discretion and disposition, to lay down and execute major business and operational policies for and in behalf of CAPASCO. CAPASCO miserably failed to establish that Tamondong was authorized to act in the interest of the company using his independent 210 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS judgment. Tamondong may have been exercising certain important powers, such as control and supervision over erring rank-and-file employees, however, x x x he does not possess the power to hire, transfer, terminate, or discipline erring employees of the company. At the most, the record merely showed that [private respondent] Tamondong informed and warned rank-and-file employees with respect to their violations of CAPASCO’s rules and regulations. Supervisory v. Managerial Article 212(m) of the Labor Code, as amended, differentiates supervisory employees from managerial employees, to wit: 1. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions, if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment; 2. Managerial employees are those who are vested with powers or prerogatives to lay down and execute management policies and/or hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees.
211 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 123. GENERAL SANTOS COCA-COLA PLANT FREE WORKERS UNION-TUPAS v. COCA-COLA BOTTLERS PHILS. INC. G.R. No. 178647 February 13, 2009 NACHURA, J.: DOCTRINE: Unfair labor practice refers to acts that violate the workers right to organize. The prohibited acts are related to the workers right to self-organization and to the observance of a CBA. Without that element, the acts, even if unfair, are not unfair labor practices. FACTS: Coca-Cola Bottlers Phil., Inc. (CCBPI) experienced a significant decline in profitability due to the Asian economic crisis, decrease in sales, and tougher competition. To curb the negative effects on the company, it implemented three (3) waves of an Early Retirement Program. There was an inter-office memorandum mandating them to put on hold all requests for hiring to fill in vacancies in both regular and temporary positions in the Head Office and in the Plants. Because several employees availed of the early retirement program, vacancies were created in some departments, including the production department of CCBPI Gen San, where members of petitioner Union worked. Faced with the freeze hiring directive, CCBPI Gen San engaged the services of JLBP Services Corporation (JLBP), a company in the business of providing labor and manpower services, including janitorial services, messengers, and office workers to various private and government offices. Petitioner filed with the National Conciliation and Mediation Board (NCMB) a Notice of Strike on the ground of alleged unfair labor practice committed by CCBPI Gen San for contracting-out services regularly performed by union members (union busting). Parties failed to come to an amicable settlement. NLRC’S RULING: CCBPI was not guilty of unfair labor practice for contracting out jobs to JLBP. The NLRC anchored its ruling on the validity of the Going-to-the-Market (GTM) system implemented by the company, which called for restructuring its selling and distribution system, leading to the closure of certain sales offices and the elimination of conventional sales routes. CA’S RULING: Upheld the NLRCs finding that CCBPI was not guilty of unfair labor practice. It found that JLBP was an independent contractor and that the decision to contract out jobs was a valid exercise of management prerogative to meet exigent circumstances. ISSUES: 1. Whether JLBP is an independent contractor 2. Whether CCBPIs contracting-out of jobs to JLBP amounted to unfair labor practice SC RULING: The petition is bereft of merit. 1.
2.
Yes. It is true that the NLRC erroneously concluded that the contracting- out of jobs in CCBPI Gen San was due to the GTM system. However, this does not diminish the NLRCs finding that JLBP was a legitimate, independent contractor and that CCBPI Gen San engaged the services of JLBP to meet business exigencies created by the freeze-hiring directive of the CCBPI Head Office. No. The company’s action to contract-out the services and functions performed by Union members did not constitute unfair labor practice as this was not directed at the members right to self-organization. ART. 248. UNFAIR LABOR PRACTICE OF EMPLOYERS. It shall be unlawful for an employer to commit any of the following unfair labor practices: (c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their right to self-organization;
Unfair labor practice refers to acts that violate the workers right to organize. The prohibited acts are related to the workers right to self-organization and to the observance of a CBA. Without that element, the acts, even if unfair, are not unfair labor practices. 212 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 124. UST FACULTY UNION v. UNIVERSITY OF SANTO TOMAS, ET AL G.R. No. 180892 April 7, 2009 VELASCO, JR., J.: DOCTRINE: The onus probandi falls on the shoulders of petitioner to establish or substantiate such claims by the requisite quantum of evidence. In labor cases as in other administrative proceedings, substantial evidence or such relevant evidence as a reasonable mind might accept as sufficient to support a conclusion is required. In the petition at bar, petitioner miserably failed to adduce substantial evidence as basis for the grant of relief. FACTS: University of Santo Tomas Faculty Union (USTFU) wrote a letter to all its members informing them of a General Assembly (GA) that was to be held on October 5, 1996. The then incumbent president of the USTFU was Atty. Eduardo J. Mariño, Jr. The letter contained an agenda for the GA which included an election of officers. Secretary General of the UST, issued a Memorandum allowing the request of the Faculty Clubs of the university to hold a convocation. Members of the faculties of the university attended the convocation, including members of the USTFU, without the participation of the members of the UST administration. During the convocation, an election for the officers of the USTFU was conducted by a group called the Reformist Alliance. Upon learning that the convocation was intended to be an election, members of the USTFU walked out. Meanwhile, an election was conducted among those present. Gil Gamilla and other faculty members (Gamilla Group) were elected as the president and officers, respectively, of the union. Thus, there were two (2) groups claiming to be the USTFU: the Gamilla Group and the group led by Atty. Mariño, Jr. (Mariño Group). Mariño Group filed a complaint for ULP against the UST with the Arbitration Branch. It also filed a complaint with the Office of the Med-Arbiter of the Department of Labor and Employment (DOLE), praying for the nullification of the election of the Gamilla Group as officers of the USTFU. Collective Bargaining Agreement (CBA) was entered into by the Gamilla Group and the UST. The CBA superseded an existing CBA entered into by the UST and USTFU Gamilla, accompanied by the barangay captain in the area padlocked the office of the USTFU. Afterwards, an armed security guard of the UST was posted in front of the USTFU office. MED-ARBITER: election of the Gamilla group as null and void and ordering that this group cease and desist from performing the duties and responsibilities of USTFU officers. ARBITRATION BRANCH: dismissed the complaint for lack of merit. The acts of UST which USTFU complained of as ULP were the following: (1) allegedly calling for a convocation of faculty members which turned out to be an election of officers for the faculty union; (2) subsequently dealing with the Gamilla Group in establishing a new CBA; and (3) the assistance to the Gamilla Group in padlocking the USTFU office. LABOR ARBITER’S RULING: He explained that the alleged Memorandum dated October 2, 1996 merely granted the request of faculty members to hold such convocation. By USTFU’s own admission, no member of the UST administration attended or participated in the convocation. As to the CBA, the labor arbiter ruled that when the new CBA was entered into, (1) the Gamilla Group presented more than sufficient evidence to establish that they had been duly elected as officers of the USTFU; and (2) the ruling of the med-arbiter that the election of the Gamilla Group was null and void was not yet final and executory. ISSUE: Whether herein respondents are guilty of Unfair Labor Practice despite abundance of evidence showing that Unfair Labor Practices were indeed committed. 213 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS SC RULING: No. UST is not guilty of ULP. Petitioner claims that respondents violated paragraphs (a) and (d) of Art. 248 of the Code which provide: Article 248. Unfair labor practices of employers.––It shall be unlawful for an employer to commit any of the following unfair labor practices: (a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization; xxxx (d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to it or its organizers or supporters. The general principle is that one who makes an allegation has the burden of proving it. While there are exceptions to this general rule, in the case of ULP, the alleging party has the burden of proving such ULP. Such principle finds justification in the fact that ULP is punishable with both civil and/or criminal sanctions In order to show that the employer committed ULP under the Labor Code, substantial evidence is required to support the claim. Substantial evidence has been defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. In no way can the contents of the memorandum be interpreted to mean that faculty members were required to attend the convocation. Not one coercive term was used in the memorandum to show that the faculty club members were compelled to attend such convocation. And the phrase "we are allowing them to hold a convocation" negates any idea that the UST would participate in the proceedings. The Gamilla Group was not validly elected into office, there was no reason to believe that the members of the Gamilla Group were not the validly elected officers and directors of USTFU. As to the padlocking of the USTFU office, it must be emphasized that based on the Certification of Sibug, Cardenas was merely present, with Brgy. Captain, at the padlocking of the USTFU office. The Certification also stated that Sibug himself also padlocked the USTFU office and that he was neither harassed nor coerced by the padlocking group. Clearly, Cardenas’ mere presence cannot be equated to a positive act of "aiding" the Gamilla Group in securing the USTFU office. Petitioner, however, fails to enumerate such objectionable actions of the UST. Again, petitioner fails to present substantial evidence in support of its claim.
214 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS 125. PHILIPPINE SKYLANDERS, INC, ET AL v. NLRC, ET AL G.R. No. 127374 January 31, 2002 BELLOSILLO, J.: FACTS: Philippine Skylanders Employees Association (PSEA), a local labor union affiliated with the Philippine Association of Free Labor Unions (PAFLU) September (PAFLU), won in the certification election conducted among the rank and file employees of Philippine Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders Employees Association-WATU (PSEA-WATU) immediately protested the result of the election before the Secretary of Labor. PSEA sent PAFLU a notice of disaffiliation citing as reason PAFLU's supposed deliberate and habitual dereliction of duty toward its members. Attached to the notice was a copy of the resolution adopted and signed by the officers and members of PSEA authorizing their local union to disaffiliate from its mother federation. PSEA subsequently affiliated itself with the National Congress of Workers (NCW), changed its name to Philippine Skylanders Employees Association - National Congress of Workers (PSEA-NCW), and to maintain continuity within the organization, allowed the former officers of PSEA-PAFLU to continue occupying their positions as elected officers in the newly-forged PSEA-NCW. PSEA-NCW entered into a collective bargaining agreement with PSI which was immediately registered with the Department of Labor and Employment. PAFLU Secretary General Serafin Ayroso wrote Mariles C. Romulo requesting a copy of PSI's audited financial statement. Ayroso explained that with the dismissal of PSEA-WATUs election protest the time was ripe for the parties to enter into a collective bargaining agreement. PSI denied the request citing as reason PSEA's disaffiliation from PAFLU and its subsequent affiliation with NCW. PAFLU filed a complaint for unfair labor practice against PSI. PAFLU alleged that aside from PSIs refusal to bargain collectively with its workers, the company through its president and personnel manager, was also liable for interfering with its employees' union activities. In another complaint, PAFLU claimed that Dakila was present in PSEA's organizational meeting thereby confirming his illicit participation in union activities. Ayroso added that the members of the local union had unwittingly fallen into the manipulative machinations of PSI and were lured into endorsing a collective bargaining agreement which was detrimental to their interests. These two were consolidated. PSEA-NCW took the cudgels for its officers who were being sued in their capacities as former officers of PSEAPAFLU and asserted that since PSEA was no longer affiliated with PAFLU, Ayroso or PAFLU for that matter had no personality to file the instant complaint. In support of this assertion. LABOR ARBITER’S RULING: declared PSEA's disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU and their respective officers guilty of unfair labor practice. According to the Labor Arbiter, was a classic case of interference for which PSI could be held responsible. Its collective bargaining agreement with PSI was struck down for being invalid. NLRC: Upheld LA NOTE: The issue of disaffiliation is an inter-union conflict the jurisdiction of which properly lies with the Bureau of Labor Relations (BLR) and not with the Labor Arbiter. Nonetheless, with due recognition of this fact, we deem it proper to settle the controversy at this instance since to remand the case to the BLR would only mean intolerable delay for the parties. ISSUE: May PSEA, which is an independent and separate local union, validly disaffiliate from PAFLU pending the settlement of an election protest questioning its status as the sole and exclusive bargaining agent of PSI's rank and file employees?
215 4S (A.Y. 2015-2016) That in all things, God may be glorified!
San Beda College of Law LABOR LAW REVIEW CASE DIGESTS SC RULING: YES. The pendency of an election protest involving both the mother federation and the local union did not constitute a bar to a valid disaffiliation. There is nothing shown in the records nor is it claimed by PAFLU that the local union was expressly forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid breakaway. We upheld the right of local unions to separate from their mother federation on the ground that as separate and voluntary associations, local unions do not owe their creation and existence to the national federation to which they are affiliated but, instead, to the will of their members. The sole essence of affiliation is to increase, by collective action, the common bargaining power of local unions for the effective enhancement and protection of their interests. Admittedly, there are times when without succor and support local unions may find it hard, unaided by other support groups, to secure justice for themselves. Yet the local unions remain the basic units of association, free to serve their own interests subject to the restraints imposed by the constitution and by-laws of the national federation, and free also to renounce the affiliation upon the terms laid down in the agreement which brought such affiliation into existence. Neither was it disputed by PAFLU that 111 signatories out of the 120 members of the local union, or an equivalent of 92.5% of the total union membership supported the claim of disaffiliation and had in fact disauthorized PAFLU from instituting any complaint in their behalf. Surely, this is not a case where one (1) or two (2) members of the local union decided to disaffiliate from the mother federation, but it is a case where almost all local union members decided to disaffiliate. It was entirely reasonable then for PSI to enter into a collective bargaining agreement with PSEA-NCW. As PSEA had validly severed itself from PAFLU, there would be no restrictions which could validly hinder it from subsequently affiliating with NCW and entering into a collective bargaining agreement in behalf of its members. The mere act of disaffiliation did not divest PSEA of its own personality; neither did it give PAFLU the license to act independently of the local union. Recreant to its mission, PAFLU cannot simply ignore the demands of the local chapter and decide for its welfare. PAFLU might have forgotten that as an agent it could only act in representation of and in accordance with the interests of the local union. Petitions of Philippine Skylanders, Inc. and of Philippine Skylanders and Workers Association-NCW, together with their respective officers, were GRANTED.
216 4S (A.Y. 2015-2016) That in all things, God may be glorified!
