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67. Meralco vs.

Benamira Indirect Employer Labor Only Agency FACTS: Rogelio Benamira et al are security guards who worked for Peoples Security, Inc. ( PSI). PSI was the security agency contracted by MERALCO. The contract between PSI and MERALCO expired. MERALCO subsequently contracted Armed Security & Detective Agency, Inc. (ASDAI) as its new security agency. ASDAI absorbed Benamira et al upon MERALCOs advice. After two years, the contract between ASDAI and MERALCO expired. MERALCO subsequently contracted AFSISI. Advance Forces Security & Investigation Services, Inc (AFSISI) did not schedule any work for Benamira et al. It was interpreted as a constructive dismissal. Benamira sued MERALCO, ASDAI, and AFSISI. The Labor Arbiter ruled that ASDAI should reinstate Benamira et al and that MERALCO is solidarily liable. No liability for AFSISI. NLRC affirmed LA. The CA reversed the lower courts. The CA ruled that the employer is actually MERALCO. ISSUE: Whether or not MERALCO is the employer of the fired security guards. HELD: No. Under the contract between ASDAI and MERALCO, it can be seen that ASDAI is indeed the employer of the guards. Applying the 4 Fold Test: ASDAI employed the guards when it absorbed them from PSI. ASDAI provided the salaries of the guards (MERALCO merely pays ASDAI for providing the guards). ASDAI has control over the guards because they are being inspected (MERALCO has the right to conduct its own inspection as per contract with ASDAI only). ASDAI has the power to terminate the guards, as when they did not provide any tours or schedules to them. Further, the services offered by the guards is not necessary to the principal business of MERALCO which is to provide electricity. AFSISI is not the employer of the guards as well (as claimed by the guards) because AFSISI never absorbed them nor was there any evidence showing otherwise. These security agencies are not Labor Only agencies (unlike HR agencies) because they have their own equipments, machineries and in general they carry their own business.

68. Broadway Motors Inc. vs. NLRC FACTS: By virtue of a written undated "Work Contract," private respondent Vicente Apolinario, sometime in March 1967, began work as an auto painter in the premises of petitioner Broadway Motors, Inc.. The contract was signed by Vicente Apolinario as "Contractor"and Mr. Johnny L. Chieng, Parts and Service Operations Manager of petitioner Corporation. Apolinario worked as an auto painter for a period of 18 years, until 23 January 1985 when he was barred from entering the premises of the petitioner Corporation, and his alleged involvement in a fist-fight with the shop superintendent of Broadway Motors the day before. Apolinario commenced an action for illegal dismissal with the NLRC. Petitioner Corporation contends that Apolinario was not its own employee but, rather, an independent contractor who conducted his own separate business under the trade name of "VM Automotive Repair Service" and had his own "Contract Workers." ISSUE:W/N Apolinario is an independent contractor. HELD:No. The evidence of record reveals that the alleged "Contract Work" carried out by Apolinario and his "Contract Workers," excepting overtime work, was performed during regular working hours 6 days in a week, which circumstance must have made it virtually impossible for them to carry on any additional and independent auto painting business outside the premises of Broadway Motors. Finally, Apolinario and his men were engaged in the performance of a line of work automobile painting which was directly related to, if not an integral part altogether of the regular business operations of petitioner Corporation i.e., that of an automotive repair shop. We conclude that while there is present in the relationship between petitioner Corporation and private respondent some factors suggestive of an owner- independent contractor relationship (e.g., the manner of payment of compensation to Apolinario and his "Contract Workers"), many other factors are present which demonstrate that that relationship is properly characterized as one of employer-employee. We conclude, further, that the same factors indicate the existence of a "labor-only" contracting arrangement between petitioner Corporation on the one hand as owner, and upon the other hand, Apolinario as "labor-only" contractor and his "Contract Workers." Thus, an employeremployee relationship must be held to have existed between petitioner Corporation and private respondent, whether

considered as a result of the contractual arrangements between them or as a result of the operation of the Labor Code (at least from 1974 onwards) and its Implementing Rules.

69. RUBBERWORLD PHILS. INC. vs. NLRC FACTS: Petitioner Rubberworld (Phils.), Inc. ( Rubberworld), a corporation established in 1965, was engaged in manufacturing footwear, bags and garments. Aquilino Magsalin, et al.were employed as dispatcher, warehouseman, issue monitor, foreman, jacks cementer and outer sole attacher, respectively. On August 26, 1994, Rubberworld filed with the Department of Labor and Employment a notice of temporary shutdown of operations to take effect on September 26, 1994. Before the effectivity date, however, Rubberworld was forced to prematurely shutdown its operations. Private respondents filed with the NLRC a complaint[2] against petitioner for illegal dismissal and non-payment of separation pay. Rubberworld filed with the Securities and Exchange Commission (SEC) a petition for declaration of suspension of payments with a proposed rehabilitation plan.[3] SEC issued the following order: "xxx all actions for claims against Rubberworld Philippines, Inc. pending before any court, tribunal, office, board, body, Commission or sheriff are hereby deemed SUSPENDED. "Consequently, all pending incidents for preliminary injunctions, writ or attachments, foreclosures and the like are hereby rendered moot and academic. Petitioner submitted to the labor arbiter a motion to suspend the proceedings invoking the SEC order. The labor arbiter did not act on the motion and ordered the parties to submit their respective position papers. The labor arbiter rendered a decision in favor of the private respondents. Petitioners appeal to NLRC was denied. ISSUE: W/N the DOLE, the Labor Arbiter and the NLRC may legally act on the claims of respondents despite the order of the Securities and Exchange Commission suspending all actions against a company under rehabilitation by a management committee created by the Securities and Exchange Commission. HELD:NO. Presidential Decree No. 902-A is clear that "all actions for claims against corporations, partnerships or associations under management or receivership pending before any court, tribunal, board or body shall be suspended accordingly." The law did not make any exception in favor of labor claims. "The justification for the automatic stay of all pending actions for claims is to enable the management committee or the rehabilitation receiver to effectively exercise its/his powers free from any judicial or extra judicial interference that might unduly hinder or prevent the 'rescue' of the debtor company. To allow such other actions to continue would only add to the burden of the management committee or rehabilitation receiver, whose time, effort and resources would be wasted in defending claims against the corporation instead of being directed toward its restructuring and rehabilitation."[9] Thus, the labor case would defeat the purpose of an automatic stay. To rule otherwise would open the floodgates to numerous claims and would defeat the rescue efforts of the management committee. This finds ratiocination in that the power to hear and decide labor disputes is deemed suspended when the Securities and Exchange Commission puts the corporation under rehabilitation. 70.Development Bank of the Philippines vs. Secretary of Labor FACTS: Petitioner Development Bank of the Philippines seeks the nullification of an order issued by the Undersecretary of Labor and Employment, directing the petitioner to deliver the properties of Riverside Mills Corporation (RMC) which it had in its possession to the Ministry (now Department) of Labor and Employment (MOLE) for proper disposition .

Respondents filed a complaint for illegal dismissal, unfair labor practice, illegal deductions from salaries and violation of the minimum wage law against RMC. A decision was rendered by Director Severo M. Pucan of the NCR, MOLE, ordering RMC to pay private respondents backwages and separation benefits. A corresponding writ of execution was issued directing the sheriff to collect the amount of P1,256,678.76 from RMC and, in case of failure to collect, to execute the writ by selling the goods and chattel of RMC not exempt from execution or, in case of insufficiency thereof, the real or immovable properties of RMC. It appears that petitioner had instituted extra-judicial foreclosure proceedings as early as 1983 on the properties and other assets of RMC as a result of the latter's failure to meet its obligations on the loans it secured from petitioner.Therefore writ of execution was returned unserved and unsatisfied. Private respondents argued by stating that pursuant to Article 110 of the Labor Code, they enjoy first preference over the mortgaged properties of RMC for the satisfaction of the judgment rendered in their favor notwithstanding the foreclosure of the same by petitioner as mortgage creditor Petitioner contends that Article 110 of the Labor Code finds no application in the case at bar for the following reasons: (1) The properties sought to be delivered have ceased to belong to RMC in view of the fact that petitioner had foreclosed on the mortgage, and the properties have been sold and delivered to third parties; (2) The requisite condition for the application of Article 110 of the Labor Code is not present since no bankruptcy or insolvency proceedings over RMC properties and assets have been undertaken. ISSUE: W/N private respondents still enjoyed a preferential lien for the payment of their backwages and separation benefits over the properties of RMC which were foreclosed by petitioner. HELD: NO. The Court laid down the ruling that Article 110 of the Labor Code, which cannot be viewed in isolation of, and must always be reckoned with the provisions of the Civil Code on concurrence and preference of credits, may not be invoked by employees or workers of RMC like private respondents herein, in the absence of a formal declaration of bankruptcy or a judicial liquidation order of RMC. It appears on record, that petitioner had extra-judicially foreclosed the subject properties from RMC as early as 1983 and purchased the same at public auction, and that RMC had failed to exercise its right to redeem. Thus, when the issued order which directed the delivery of these properties to the MOLE, RMC had ceased to be the absolute owner thereof, the order was directed against properties which no longer belonged to the judgment debtor RMC.

71.Boliano et al vs. Padoliana Facts: Petitioners A.N. Bolinao, Jr., et al. were all former employees of Sabena Mining Corporation(SMC). In 1982 and 1983 they were laid off without being recalled. Petitioners filed a formal complaint for collection of unpaid salaries, unused accrued vacation and sick leave benefits, 13th month pay and separation pay before the NLRC against SMC and Development Bank of the Philippines. On May,1984, a compromise agreement was entered into by the parties, wherein petitioners were to be paid on a staggered basis the collective amount of P385,583.95. The company faithfully complied with the scheduled payments only up to March, 1985 because it ceased operations effective April 1, 1985. With this development, petitioners moved for the issuance of a writ of execution. The Labor Arbiter issued a writ of execution against the company to collect the balance of P311,580.14 On June 27, 1985 Deputy Sheriff garnished the remaining amount of P150,279.64 in the savings account of the company at the DBP). However, the same amount was previously garnished by two creditors of the company; namely, Bank of America and Phelps Dodge (Phils.), Inc. Bank of America garnished the amount in April, 1982 while Phelps Dodge garnished the amount in June, 1984. The respondent court(RTC Manila) issued an order denying the motion to intervene and dismissing the third party claim, declaring that the garnishment made by its Deputy Sheriff in favor of respondent Phelps Dodge, Phils., Inc. superior to the rights of petitioners. Petitioners contend that under Article 110 and its implementing rules; and regulations of the Labor Code, the claims of the laborers for unpaid wages and other monetary benefits due them for services rendered prior to bankruptcy enjoy first preference in the satisfaction of credits against a bankrupt company. The respondent maintains that the rights of

preference and first lien of petitioners, as former employees of SMC, under aforesaid law and rules, are operative only in an insolvency court and in a bankrupt case. ISSUE: W/N petitioners enjoy preferential right or claim over the funds of Sabena Mining Corporation as provided for under the provisions of Article 110 of the New Labor Code HELD:NO. It is quite clear from the provisions of Article 110 of the Labor Code and Section 10, Rule VIII, Book H of the Revised Rules and Regulations Implementing the Labor Code, that a declaration of bankruptcy or a judicial liquidation must be present before the worker's preference may be enforced. Thus, it was held that Article 110 of the Labor Code and its implementing rule cannot be invoked absent a formal declaration of bankruptcy or a liquidation order In the case at bar, there was no showing of any insolvency proceeding or declaration of bankruptcy or judicial liquidation that was being filed by Sabena Mining Corporation. It is only an extra-judicial foreclosure that was being enunciated as when DBP extra-judicially foreclosed the assets of Sabena Mining Corporation.

72. V.L. Enterprises vs. CA Facts: After an inspection was conducted, the Regional Director ordered VL to pay the 21 employees claims, amounting to P822,978.00. It then appealed the Order. The Secretary of Labor affirmed and deemed the appealed order to have become final and executory. The DOLE Regional Director (NCR) issued an Alias Writ of Execution. On the basis thereof, the Sheriff issued a Notice of Sale on Execution of Real Properties. VL filed a Petition for Certiorari with CA, seeking to annul the RDs order, the Alias writ of execution and the notice of sale. CA dismissed the petition for certiorari. Instead of appealing said Court of Appeals Resolution via a Petition for Review on Certiorari, VL filed a Petition for Annulment of Judgment, Writ of Execution and Notice of Sale, with TRO. Petitioners ground for annulment of the three Issuances is the alleged lack of jurisdiction on the part of the DOLE Regional Director in awarding amounts which exceeded P5,000.00. Issues:Whether or not Regional Director have jurisdiction to award amount exceeding P5,000. Held:Yes. The respondent Secretary held that the jurisdictional limitation imposed by Article 129 on his visitorial and enforcement power under Article 128 (b) of the Labor Code, as amended, has been repealed by Republic Act No. 7730. Article 128(b) -- "[n]otwithstanding the provisions of Article 129 and 217 of the Labor Code to the contrary"Republic Act No. 7730 amended Article 128(b) to its present wording so as to free it from the jurisdictional limitations found in Articles 129 and 217. Thus, as it is now worded, the authority under Article 128 may be exercised by DOLE regardless of the monetary value involved, unlike in Article 129 where the authority is only for claims not exceeding P5,000.00 per claimant. 73. United CMC Textile Workers Union vs Labor Arbiter FACTS: Sometime in 1979, United CMC Textile Workers Union (Union) filed a complaint against Central Textile Mills, Inc. (CTMI, for brevity) at the Ministry of Labor and Employment for non-payment of Christmas bonus of the rank and file employees of said company as provided in Art XI of the then existing CBA between Union and CTMI. Among the provisions of the said CBA is the payment of Christmas bonus as scheduled. Labor Arbiter found that Sec. 1, Art XI of the CBA concluded between the parties dealing on the payment of Christmas Bonus is violated by the refusal of respondent CTMI to pay the same despite demand by the Union. Consequently, CTMI should be as it is hereby ordered to implement the same by paying the workers covered by said CBA the total amount of ONE HUNDRED TWENTY TWO THOUSAND EIGHT HUNDRED FORTY PESOS (P122,840.00) corresponding to the 1978 Christmas Bonus, the break down of which is reflected in the list attached to this decision the accuracy of the termination of which by complainant union is not, in the least, disputed by the respondent company.

CTMI in its memorandum invites Our attention to the fact that its Petition for Review in G.R. No. 58666 was denied because of Our ruling in the case of "Marcopper Mining Corporation vs. Honorable Blas Ople, et. al., G.R. No. L51254, 3 that the 13th month pay was required on top of the other bonuses agreed upon by the employer and employee. ISSUE: Was the Petitioner deprived of their 13th month pay, with the contention of the Union being given credit? HELD: The doctrine laid down in the Marcopper Case which was promulgated on June 11, 1981. Before the dismissal of said case became final and executory, We decided the La Carlota case on May 31, 1982 wherein we ruled that employees are no longer entitled to an additional Christmas bonus or other Christmas benefits if they are already entitled to a 13th month pay.

74. Philippine Duplicators Inc. vs. NLRC FACTS: The Court upheld the decision of public respondent National Labor Relations Commission (NLRC), which affirmed the order of Labor Arbiter Felipe T. Garduque II directing petitioner to pay 13th month pay to private respondent employees computed on the basis of their fixed wages plus sales commissions. The Third Division also denied with finality on 15 December 1993 the Motion for Reconsideration filed (on 12 December 1993) by petitioner. On 17 January 1994, petitioner Duplicators filed (a) a Motion for Leave to Admit Second Motion for Reconsideration and (b) a Second Motion for Reconsideration. This time, petitioner invoked the decision handed down by this Court, through its Second Division, on 10 December 1993 in the two (2) consolidated cases of Boie-Takeda Chemicals, Inc. vs. Hon. Dionisio de la Serna and Philippine Fuji Xerox Corp. vs. Hon. Cresenciano B. Trajano, in G.R. Nos. 92174 and 102552, respectively. In its decision, the Second Division inter alia declared null and void the second paragraph of Section 5 (a) 1 of the Revised Guidelines issued by then Secretary of Labor Drilon. Petitioner submits that the decision in the Duplicators case should now be considered as having been abandoned or reversed by the Boie-Takeda decision, considering that the latter went "directly opposite and contrary to" the conclusion reached in the former. Petitioner prays that the decision rendered in Duplicators be set aside and another be entered directing the dismissal of the money claims of private respondent Philippine Duplicators' Employees' Union. In other words, the sales commissions received for every duplicating machine sold constituted part of the basic compensation or remuneration of the salesmen of Philippine Duplicators for doing their job. The portion of the salary structure representing commissions simply comprised an automatic increment to the monetary value initially assigned to each unit of work rendered by a salesman. Especially significant here also is the fact that the fixed or guaranteed portion of the wages paid to the Philippine Duplicators' salesmen represented only 15%-30% of an employee's total earnings in a year. ISSUE: Whether or Not the salesmen's commissions, comprising a pre-determined percent of the selling price of the goods sold by each salesman, were properly included in the term "basic salary" for purposes of computing their 13th month pay. HELD: If an employer cannot be compelled to pay a productivity bonus to his employees, it should follow that such productivity bonus, when given, should not be deemed to fall within the "basic salary" of employees when the time comes to compute their 13th month pay. The doctrine set out in the decision of the Second Division is, accordingly, that additional payments made to employees, to the extent they partake of the nature of profit-sharing payments, are properly excluded from the ambit of the term "basic salary" for purposes of computing the 13th month pay due to employees. Such additional payments are not "commissions" within the meaning of the second paragraph of Section 5 (a) of the Revised Guidelines Implementing 13th Month Pay. In principle, where these earnings and remuneration are closely akin to fringe benefits, overtime pay or profit-sharing payments, they are properly excluded in computing the 13th month pay. However, sales commissions which are effectively an integral portion of the basic salary structure of an employee, shall be included in determining his 13th

month pay. Productivity bonuses are not directly dependent on the extent an individual employee exerts himself. A productivity bonus is something extra for which no specific additional services are rendered by any particular employee and hence not legally demandable, absent a contractual undertaking to pay it. Sales commissions, on the other hand, such as those paid in Duplicators, are intimately related to or directly proportional to the extent or energy of an employee's endeavors. Commissions are paid upon the specific results achieved by a salesman-employee. It is a percentage of the sales closed by a salesman and operates as an integral part of such salesman's basic pay. FACTS: (Note, the case was very procedurally technical, walang facts, nasa rationa) Case differentiates between Productivity Bonuses vs. Commissions Productivity Bonuses are generally tied to the productivity or profit generation of the employer corporation. Productivity bonuses are not directly dependent on the extent an individual employee exerts himself. A productivity bonus is something extra for which no specific additional services are rendered by any particular employee and hence not legally demandable, absent a contractual undertaking to pay it. Sales commissions are intimately related to or directly proportional to the extent or energy of an employee's endeavors. Commissions are paid upon the specific results achieved by a salesman-employee. It is a percentage of the sales closed by a salesman and operates as an integral part of such salesman's basic pay. ISSUE: 1. WON the commissions received by the salesmen were part of the wages to be considered for their 13Th month pay. Yes 2. WON Productivity bonus shall be considered as part of wages in 13th month pay No HELD: 1. The commissions were an integral part of the pay of the workers, considering that the fixed wage was only 30% of what they were normally receiving. 2. Productivity bonuses are generally tied to the productivity, or capacity for revenue production, of a corporation; such bonuses closely resemble profit-sharing payments and have no clear direct or necessary relation to the amount of work actually done by each individual employee. More generally, a bonus is an amount granted and paid ex gratia to the employee; its payment constitutes an act of enlightened generosity and self-interest on the part of the employer, rather than as a demandable or enforceable obligation. Since productivity bonus is not demandable, then it cannot be considered part of basic salary when time comes to compute 13th month pay. Additional payments made to employees, to the extent they partake of the nature of profit-sharing payments, are properly excluded from the ambit of the term "basic salary" for purposes of computing the 13th month pay due to employees. Such additional payments are not "commissions" within the meaning of the second paragraph of Section 5 (a) of the Revised Guidelines Implementing13th Month Pay. The Supplementary Rules and Regulations Implementing P.D. No.851 subsequently issued by former Labor Minister Ople sought to clarify the scope of items excluded in the computation of the 13thmonth pay; viz .: Sec. 4. Overtime pay, earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th month pay. 75. UST vs NLRC FACTS: UST terminated the employment of 16 union officers and directors of UST Faculty Union for grave misconduct, serious disrespect to a superior and conduct unbecoming a faculty member on the ground that "in publishing or causing to be published in Strike Bulletin No. 5 the libelous and defamatory attacks against the Father Rector. Some faculty members staged mass leaves of absence disrupting classes in all levels at the University. The faculty union filed a complaint for illegal dismissal and unfair labor practice with the DOLE. The labor arbiter, on a prima facie showing that the termination was causing a serious labor dispute, certified the matter to the Secretary of DOLE for a possible suspension of the effects of termination.

Secretary Franklin Drilon issued an order to accept the 16 terminated employees back to work under the same terms and conditions prevailing prior to their dismissal in the interest of industrial peace. He also issued another order which certifies the labor dispute to the NLRC for compulsory arbitration. NLRC issued a resolution directing UST to comply and faithfully abide with the Orders of the Secretary Drilon by immediately reinstating or readmitting the 16 faculty members under the same terms and conditions prevailing prior to the present dispute or merely reinstate them in the payroll. UST states that it has already actually reinstated 6 of the dismissed faculty members; As to 2 professors whose teaching assignments were partially taken over by new faculty members, they were given back their remaining teaching loads (not taken by new faculty members) but were given substantially equivalent academic assignments corresponding to their teachings loads already taken over by new faculty members; The remaining 7 faculty members were given substantially equivalent academic assignments in lieu of actual teaching loads because all of their teaching loads originally assigned to them at the start of the first semester were already taken over by new faculty members; 1 dismissed faculty had been "absent without official leave" or AWOL. SC issued a TRO enjoining NLRC from enforcing or executing the NLRC resolution. UST argues that actual reinstatement of the dismissed faculty members whose teaching assignments were previously taken over by new faculty members is not feasible nor practicable since this would compel UST to violate and terminate its contracts with the faculty members who were assigned to and had actually taken over the courses. UST claims that to change the faculty member when the semester is about to end would seriously impair and prejudice the welfare and interest of the students because dislocation, confusion and loss in momentum, if not demoralization will surely ensue. UST contended that it has the sole and exclusive right and prerogative to determine the nature and kind of work of its employees and to control and manage its own operations. ISSUE: May UST comply with the NLRC readmission order by granting substantially equivalent academic assignments, in lieu of actual reinstatement, to dismissed faculty members? RULING: No. Pursuant to Article 263 (g), 1st paragraph, of the Labor Code, as amended by Section 27 of RA 6715, the NLRC was charged with the task of implementing a valid return-to-work order of the Secretary of Labor. As the implementing body, its authority did not include the power to amend the Secretary's order. Since the Secretary's order specifically provided that the dismissed faculty members shall be readmitted under the same terms and conditions prevailing prior to the present dispute, the NLRC should have directed the actual re instatement of the concerned faculty members. It therefore erred in granting the alternative remedy of payroll reinstatement. The grant of substantially equivalent academic assignments cannot be sustained. The giving of substantially equivalent academic assignments, without actual teaching loads, cannot be considered a reinstatement under the same terms and conditions prevailing before the strike. The phrase "under the same terms and conditions" contemplates actual reinstatement or the return of actual teaching loads to the dismissed faculty members. Article 263(g) was devised to maintain the status quo between the workers and management in a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, pending adjudication of the controversy. The grant of substantially equivalent academic assignments would evidently alter the existing status quo since the temporarily reinstated teachers will not be given their usual teaching loads.

The order of NLRC did not amount to grave abuse of discretion. Such error is merely an error of judgment which is not correctible by a special civil action for certiorari. The NLRC was only trying its best to work out a satisfactory adhoc solution to a festering and serious problem. The hiring, firing, transfer, demotion and promotion of employees are traditionally identified as management prerogatives. However, these are not absolute prerogatives. They are subject to limitations found in law, a collective bargaining agreement, or general principles of fair play and justice. Article 263(g) is one such limitation provided by law. To the extent that Art. 263(g) calls for the admission of all workers under the same terms and conditions prevailing before the strike, UST is restricted from exercising its generally unbounded right to transfer or reassign its employees. The first semester is about to end and to change the faculty members around the time of final examinations would adversely affect and prejudice the students whose welfare and interest we consider to be of primordial importance and for whom both the University and the faculty union must subordinate their claims and desires. The actual reinstatement of the non-reinstated faculty members may take effect at the start of the second semester. The contracts of new professors cannot prevail over the right to reinstatement of the dismissed personnel. 76. SEVILLA TRADING CO. V. SEMANA FACTS: Sevilla Trading Company (Sevilla Trading, for short) added to the base figure, in its computation of the 13thmonth pay of its employees, the amount of other benefits received by the employees which are beyond the basic pay. These benefits included: (a) Overtime premium for regular overtime, legal and special holidays; (b)Legal holiday pay, premium pay for special holidays; (c) Night premium; (d) Bereavement leave pay; (e) Union leave pay; (f) Maternity leave pay;(g) Paternity leave pay; (h)Company vacation and sick leave pay; and (i) Cash conversion of unused company vacation and sick leave. Petitioner claimed that it entrusted the preparation of the payroll to its office staff, including the computation and payment of the 13th-month pay and other benefits. When it changed its person in charge of the payroll in the process of computerizing its payroll, and after audit was conducted, it allegedly discovered the error of including non-basic pay or other benefits in the base figure used in the computation of the 13th-month pay of its employees. It cited the Rules and Regulations Implementing P.D. No. 851 (13th-Month Pay Law), effective December 22, 1975, Sec. 2(b). Hence, the new computation reduced the employees thirteenth month pay. The daily piece-rate workers represented by private respondent Sevilla Trading Workers Union SUPER (Union, for short), contested the new computation and reduction of their thirteenth month pay. ISSUE: WON the exclusion of leaves and other related benefits in the computation of 13th- month pay is valid? RULING: A.V.A. Semana is correct in holding that petitioners stance of mistake or error in the computation of the thirteenth month pay is unmeritorious. Petitioners submission of financial statements every year requires the services of a certified public accountant to audit its finances. It is quite impossible to suggest that they have discovered the alleged error in the payroll only in 1999. This implies that in previous years it does not know its cost of labor and operations. This is merely basic cost accounting. Also, petitioner failed to adduce any other relevant evidence to support its contention. In the light of the clear ruling of this Court, there is, thus no reason for any mistake in the construction or application of the law. When petitioner Sevilla Trading still included over the years non-basic benefits of its employees, such as maternity leave pay, cash equivalent of unused vacation and sick leave, among others in the computation of the 13thmonth pay, this may only be construed as a voluntary act on its part. Putting the blame on the petitioners payroll personnel is inexcusable.

From 1975 to 1981, petitioner had freely, voluntarily and continuously included in the computation of its employees thirteenth month pay, without the payments for sick, va- cation and maternity leave, premium for work done on rest days and special holidays, and pay for regular holidays. The considerable length of time the questioned items had been included by petitioner indicates a unilateral and voluntary act on its part, sufficient in itself to negate any claim of mistake. A company practice favorable to the employees had indeed been established and the payments made pursuant thereto, ripened into benefits enjoyed by them. And any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer, by virtue of Sec. 10 of the Rules and Regulations Implementing P.D. No. 851, and Art. 100 of the Labor Code of the Philippines which prohibit the diminution or elimination by the employer of the employees existing benefits. *Tiangco vs. Leogardo, Jr., 122 SCRA 267 (1983)+ In the case at bar, petitioner Sevilla Trading kept the practice of including non-basic benefits such as paid leaves for unused sick leave and vacation leave in the computation of their 13th-month pay for at least two (2) years. This, we rule likewise constitutes voluntary employer practice which cannot be unilaterally withdrawn by the employer without violating Art. 100 of the Labor Code:

77. Honda Philippines., Inc., vs. Samahan ng Malayang Manggagawa sa Honda Facts: The case stems from the CBA between Honda and the Union that it granted the computation of 14th month pay as the same as 13th month pay. Honda continues the practice of granting financial assistance covered every December each year of not less than 100% of the basic salary. In the latter part of 1998, the parties started to re-negotiate for more years of the CBA. The union filed a notice of strike on the ground of unfair labor practice for deadlock. DOLE assumed jurisdiction over the case and certified it to the NLRC for compulsory arbitration. The striking employees were ordered to return to work and management to accept them back under the same terms prior to the strike staged. Honda issued a memorandum of the new computation of the 13th month and 14th month pay to be granted to all its employees whereby the 31 long strikes shall be considered unworked days for purpose of computing the said benefits. The amount equivalent to of the employees basic salary shall be deducted from these bonuses, with a commitment that in the event that the strike is declared legal, Honda shall pay the amount. The respondent union opposed the pro-rated computation of bonuses. This issue was submitted to voluntary arbitration where it ruled that the companys implementation of the pro-rated computation is invalid. Issue: Whether or not the pro-rated computation of the 13th and 14th month pays and other bonuses in question is valid and lawful? Ruling: The Court ruled that the pro-rated computation is invalid. The pro-rated computation of Honda as a company policy has not ripened into a company practice and it was the first time they implemented such practice. The payment of the 13th month pay in full month payment by Honda has become an established practice. The length of time where it should be considered in practice is not being laid down by jurisprudence. The voluntary act of the employer cannot be unilaterally withdrawn without violating Article 100 of the Labor Code. The court also rules that the withdrawal of the benefit of paying a full month salary for 13th month pay shall constitute a violation of Article 100 of the Labor Code. 78. JPL Marketing Promotions v. CA FACTS: JPL notified CMC would stop its direct merchandising activity in the Bicol Region, Isabela, and Cagayan Valley. They were advised to wait for further notice as they would be transferred to other clients. However, private

respondents Abesa and Gonzales filed before the National Labor Relations Commission Regional Arbitration Branch (NLRC) Sub V complaints for illegal dismissal, praying for separation pay, 13th month pay, service incentive leave pay and payment for moral damages. Aninipot filed a similar case thereafter. Replying to private respondents allegations, JPL disagrees that the notice it sent to them was a notice of actual termination. The said memo merely notified them of the end of merchandising for CMC, and that they will be transferred to other clients. Moreover, JPL is not bound to observe the thirty (30)-day notice rule as there was no dismissal to speak of. ISSUE: WON private respondents are entitled to separation pay, 13th month pay and service incentive leave pay? HELD: It was established that private employees sought employment from other establishments even before the expiration of the 6month period provided by law. Service incentive leave is a yearly leave benefit of 5 days with pay, enjoyed by an employee who has rendered at least one year of service. The difference between the minimum wage and the actual salary received by the employees cannot be deemed as their 13th month pay and service incentive leave pay as such difference is not equivalent to or of the same import as the said benefits contemplated by law. 79. LETRAN CALAMBA FACULTY and EMPLOYEES ASSOCIATION vs NLRC FACTS: On October 8, 1992, the Letran Calamba Faculty and Employees Association (petitioner) filed with Regional Arbitration Branch No. IV of the National Labor Relations Commission (NLRC) a Complaint 3 against Colegio de San Juan de Letran, Calamba, Inc. (respondent) for collection of various monetary claims due its members. Petitioner alleged in its Position Paper that: In the computation of the 13th month pay of its academic personnel, respondent does not include as basis their compensation for overloads. It only takes into account the pay the faculty members receive for their teaching loads not exceeding eighteen (18) units. The teaching overloads are rendered within eight (8) hours a day. Respondent has not paid the wage increases required by Wage Order No. 5 to its employees who qualify thereunder. Respondent has not followed the formula prescribed by DECS Memorandum Circular No. 2 dated March 10, 1989 in the computation of the compensation per unit of excess load or overload of faculty members. This has resulted in the diminution of the compensation of faculty members. The salary increases due the non-academic personnel as a result of job grading has not been given. Job grading has been an annual practice of the school since 1980; the same is done for the purpose of increasing the salaries of non-academic personnel and as the counterpart of the ranking systems of faculty members. Respondent has not paid to its employees the balances of seventy (70%) percent of the tuition fee increases for the years 1990, 1991 and 1992. Respondent has not also paid its employees the holiday pay for the ten (10) regular holidays as provided for in Article 94 of the Labor Code. Respondent has refused without justifiable reasons and despite repeated demands to pay its obligations. ISSUE: Whether or Not the Pay of Faculty members for teaching overloads should be included as basis in computation of their 13th Month pay? It depends. HELD: Overload on the other hand means "the load in excess of the normal load of private school teachers as prescribed by the Department of Education, Culture and Sports (DECS) or the policies, rules and standards of particular private schools." In recognition of the peculiarities of the teaching profession, existing DECS and School Policies and Regulations for different levels of instructions prescribe a regular teaching load, the total actual teaching or classroom hours of which a teacher can generally perform in less than eight (8) hours per working day. This is because teaching may also require the teacher to do additional work such as handling an advisory class, preparation of lesson plans and teaching aids, evaluation of students and other related activities. Where, however a teacher is engaged to undertake actual additional teaching work after completing his/her regular teaching load, such additional work is generally referred to as overload. In short, additional work in excess of the regular teaching load is overload work. Regular teaching load and overload work, if any, may constitute a teacher's working day. Where a teacher is required to perform such overload within the eight (8) hours normal working day, such overload compensation shall be considered part of the basic pay for the purpose of computing the teacher's 13th-month pay. "Overload work" is sometimes misunderstood as synonymous to "overtime work" as this term is used and understood in the Labor Code. These two terms are not the same because overtime work is work rendered in excess of normal working hours of eight in a day (Art. 87, Labor Code). Considering that overload work may be performed either within or outside

eight hours in a day, overload work may or may not be overtime work. In the light of the foregoing discussions, it is the position of this Department that all basic salary/wage representing payments earned for actual work performed during or within the eight hours in a day, including payments for overload work within eight hours, form part of basic wage and therefore ARE TO BE INCLUDED IN THE COMPUTATION OF 13TH-MONTH PAY MANDATED BY PD 851. 80. Boie-Takeda Chemicals, Inc. vs. de la Serna Facts: P.D. No. 851 provides for the Thirteen-Month Pay Law. Under Sec. 1 of said law, all employers are required to pay all their employees receiving basic salary of not more than P1,000.00 a month, regardless of the nature of the employment, and such should be paid on December 24 of every year. The Rules and Regulations Implementing P.D. 851 contained provisions defining 13-month pay and basic salary and the employers exempted from giving it and to whom it is made applicable. Supplementary Rules and Regulations Implementing P.D. 851 were subsequently issued by Minister Ople which inter alia set items of compensation not included in the computation of 13-month pay. (overtime pay, earnings and other remunerations which are not part of basic salary shall not be included in the computation of 13-month pay). Pres. Corazon Aquino promulgated on August 13, 1985 M.O.No. 28, containing a single provision that modifies P.D. 851 by removing the salary ceiling of P1,000.00 a month. More than a year later, Revised Guidelines on the Implementation of the13-month pay law was promulgated by the then Labor Secretary Franklin Drilon, among other things, defined particularly what remunerative items were and were not included in the concept of 13-month pay, and specifically dealt with employees who are paid a fixed or guaranteed wage plus commission or commissions were included in the computation of 13thmonth pay) A routine inspection was conducted in the premises of petitioner. Finding that petitioner had not been including the commissions earned by its medical representatives in the computation of their 1-month pay, a Notice of Inspection Result was served on petitioner to effect restitution or correction of the underpayment of 13-month pay for the years, 1986 to1988 of Medical representatives. Petitioner wrote the Labor Department contesting the Notice of Inspection Results, and expressing the view that the commission paid to its medical representatives are not to be included in the computation of the 13-month pay since the law and its implementing rules speak of REGULAR or BASIC salary and therefore exclude all remunerations which are not part of the REGULAR salary. Regional Dir. Luna Piezas issued an order for the payment of underpaid 13-month pay for the years 1986, 1987 and 1988. A motion for reconsideration was filed and the then Acting labor Secretary Dionisio de la Serna affirmed the order with modification that the sales commission earned of medical representatives before August 13, 1989 (effectivity date of MO 28 and its implementing guidelines) shall be excluded in the computation of the 13-month pay. Similar routine inspection was conducted in the premises of Phil. Fuji Xerox where itwas found there was underpayment of 13th month pay since commissions were not included. In their almost identically-worded petitioner, petitioners, through common counsel, attribute grave abuse of discretion to respondent labor officials Hon. Dionisio dela Serna and Undersecretary Cresenciano B. Trajano. ISSUE: Whether or not commissions are included in the computation of 13-month pay? HELD: NO. Contrary to respondents contention, M.O No. 28 did not repeal, supersede or abrogate P.D. 851. As may be gleaned from the language of MO No. 28, it merely modified Section 1 of the decree by removing the P 1,000.00 salary ceiling. The concept of 13th Month pay as envisioned, defined and implemented under P.D. 851 remained unaltered, and while entitlement to said benefit was no longer limited to employees receiving a monthly basic salary of not more than P 1,000.00 said benefit was, and still is, to be computed on the basic salary of the employee-recipient as provided under P.D. 851. Thus, the interpretation given to the term basic salary was defined in PD 851 applies equally to basic salary under M.O. No.28. The term basic salary is to be understood in its common, generally accepted meaning, i.e., as a rate of pay for a standard work period exclusive of such additional payments as bonuses and overtime. In remunerative schemes consists of a fixed or guaranteed wage plus commission, the fixed or guaranteed wage is patently the basic salary for this is what the employee receives for a standard work period. Commissions are given for extra efforts exerted in consummating sales of other related transactions. They are, as such, additional pay, which the SC has made clear do not from part of the basic salary.

The all embracing phrase "earnings and other remunerations" which are deemed not part of the basic salary includes within its meaning payments for sick, vacation, or maternity leaves, premium for works performed on rest days and special holidays, pays for regular holidays and night differentials. As such they are deemed not part of the basic salary and shall not be considered in the computation of the 13thmonth pay. If they were not excluded, it is hard to find any "earnings and other remunerations" expressly excluded in the computation of the 13th month pay. SUBSTITUTION PAYMENT 81. FREMANLIS vs MOLE FACTS: In April 1980, eighteen (18) employees of the petitioners filed against their employer, and the other petitioners two labor standard cases which were docketed in the Regional Office of the Ministry of Labor in Bacolod City as FAD Cases Nos. 179180 and 0792-80 ("PAFLU SEPTEMBER CONVENTION VS. FRAMANLIS FARMS"), alleging that in 1977 to 1979 they were not paid emergency cost of living allowance (ECOLA) minimum wage, 13th month pay, holiday pay, and service incentive leave pay. In their answer to the amended complaint, petitioners alleged that the private respondents were not regular workers on their hacienda but were migratory (sacadas) or pakyaw workers who worked on-and-off and were hired seasonally, or only during the milling season, to do piece-work on the farms, hence, they were not entitled to the benefits claimed by them. They also alleged that under the decrees, the living allowance shall be paid on a monthly, not percentage, basis depending on the total assets or authorized capital stock of the employer, whichever is higher and applicable. They admitted that their total assets and authorized capital stock exceeded P2 million. However, in 1977 they had applied for exemption under PDs 525 and 1123 but no ruling has been issued by the Ministry of Labor on their application. The claims for holiday pay, service incentive leave pay, social amelioration bonus and underpayment of minimum wage were not controverted. With respect to the complainants' other claims, the petitioners submitted only random payrolls which showed that the women workers were underpaid as they were receiving an average daily wage of P5.94 only, although the male workers received P10 more or less, per day. ISSUE: Were the Employees entitled to such ECOLA, bonus and Incentives given that they were sacadas (migratory) or pakyaw workers? HELD: In 1976, PD No. 928 fixed a minimum wage of P7.00 for agricultural workers in any plantation or agricultural enterprise irrespective of whether or not the worker was paid on a piece-rate basis. However, effective July 1, 1978, the minimum wage was increased to P8.00 (Sec. 1, PD 1389). Subsequently, PD 1614 provided for a P2.00 increase in the daily wage of all workers effective April 1, 1979. The petitioners admit that those were the minimum rates prevailing then. Neither may year-end rewards for loyalty and service be considered in lieu of 13th month pay. Section 10 of the Rules and Regulations Implementing Presidential Decree No. 851: Prohibition against reduction or elimination of benefits. The failure of the Minister's decision to identify the pakyaw and non-pakyaw workers does not render said decision invalid. The workers may be identified or determined in the proceedings for execution of the judgment. 14th MONTH PAY 82. Kamaya Point Hotel vs NLRC Facts: Respondent who are members of Free Workers (FFW) were employed by petitioner as hotel crew. On the basis of the profitability of the company's business operations, management granted a 14th month pay to its employees. However, due to technical and financing problems, the program was terminated. Issue: WON 14th month pay is demandable?

Ruling: There is no law mandating the payment of 14th-month pay. It is, therefore, in the nature of a bonus which may not be imposed upon the employer. It is a gratuity to which the recipient has no right to make a demand.

BONUS WHEN DEMANDABLE MANAGEMENT PREROGATIVE 83.Luzon Stevedoring Corp. Vs CIR Facts: Lusteveco Employees Association-CCLU (hereafter called LEA) as the sole collective bargaining representative of its employees seeks to justify the strike for alleged unjustified indefinite suspension of seven security guards. The suspension was due to sleeping in post, gross insubordination, dereliction of duty and challenging superior officers to engage in fights. Issue: WON the management conduct was justified? Ruling: Yes. The act of an employee of sleeping in his post, coupled with gross insubordination, dereliction of duty and challenging superiors to a fight, was held as serious misconduct. The facts and events which constituted the causes of the suspensions were found by the lower court to have been established by substantial evidence. Considering the function of a security guard which is to protect company property from pilferage or loss. Challenging superior officers to a fight and insubordination on the part of the employee are acts inimical to the interest of his employer. For having committed such offenses, LUZON had all the right to dismiss its erring employees if only as a measure of self-protection. 84. Liberation Steamship Co.vs. CIR FACTS: NDC, a GOCC, decided to dispose the three vessels; and in the bidding that ensued, LISTCO won. The crew members of the three vessels, through the Philippine Maritime Industrial Union (PMIU), made representations with both the seller and the purchaser to retain them in the service of the vessels. And when in the final deed of sale no provision on the hiring of the complement of the vessels was included, the crew-members declared a strike. Issue: WON petitioners can demand for payment of gratuity? HELD: NO. Gratuity is essentially voluntary and the management cannot be compelled to give the same to be considered a regular practice, the giving of the bonus should have been done over a long period of time, and must be shown to have been consistent and deliberate. 85. AMERICAN WIRE AND CABLE DAILY RATED EMPLOYEES UNION vs. AMERICAN WIREAND CABLE CO., INC. and THE COURT OF APPEALS FACTS: American Wire and Cable Co., Inc., is a corporation engaged in the manufacture of wires and cables. There are two unions in this company, the American Wire and Cable Monthly-Rated Employees Union and the American Wire and Cable Daily-Rated Employees. An original action was filed before the NCMB of the Department of Labor and Employment (DOLE) by the two unions for voluntary arbitration. The petitioner submits that the withdrawal of the private respondent of the 35%premium pay for selected days during the Holy Week and Christmas season, the holding of the Christmas Party and its incidental benefits, and the giving of service awards, which they have long enjoyed, violated Article 100 of the Labor Code. A decision was rendered by the Voluntary Arbitrator in favor of the private respondent.On appeal, CA affirmed and upheld the Arbitrators decision. ISSUE: Whether or not private respondent is guilty of violating Article 100 of the Labor Code, as amended, when the benefits/entitlements given to the members of petitioner union were withdrawn?

HELD: The Court ruled that respondent is not guilty of violating Art. 100 of the Labor Code. ART. 100. PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS. Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code. The benefits and entitlements mentioned in the instant case are all considered bonuses which were given by the private respondent out of its generosity and munificence. A bonus is an amount granted and paid to an employee for his industry and loyalty which contributed to the success of the employers business and made possible the realization of profits. The granting of a bonus is a management prerogative, something given in addition to what is ordinarily received by or strictly due the recipient. Thus, a bonus is not a demandable and enforceable obligation, except when it is made part of the wage, salary or compensation of the employee. For a bonus to be enforceable: 1. it must have been promised by the employer; 2. expressly agreed upon by the parties or it must have had a fixed amount; and 3. had been a long and regular practice on the part of the employer. The assailed benefitswere never subjects of any agreement between the union and the company. It was never incorporated in the CBA. To be considered a regular practice, the giving of the bonus should have been done over a long period of time, and must be shown to have been consistent and deliberate. The downtrend in the grant of these two bonuses over the years demonstrates that there is nothing consistent about it. To hold that an employer should be forced to distribute bonuses which it granted out of kindness is to penalize him for his past generosity.

86. MARCOS VS NLRC

XII. WORKING CONDITIONS FOR SPECIAL GROUPS OF WORKERS-WOMEN 87. PT&T vs NLRC FACTS: De Guzman dictated in the portion of the job application form under civil status that she was single although she had contracted marriage a few months earlier. When petitioner learned later about the marriage, its branch supervisor, sent de Guzman a memorandum requiring her to explain the discrepancy. Included in the memorandum, was a reminder about the companys policy of not accepting married women for employment. She was dismissed from the company. Labor Arbiter handed down decision declaring that petitioner illegally dismissed De Guzman, who had already gained the status of a regular employee. Furthermore, it was apparent that she had been discriminated on account of her having contracted marriage in violation of company policies. ISSUE: Whether the alleged concealment of civil status can be grounds to terminate the services of an employee? HELD: Article 136 of the Labor Code, one of the protective laws for women, explicitly prohibits discrimination merely by reason of marriage of a female employee. It is recognized that company is free to regulate manpower and employment from hiring to firing, according to their discretion and best business judgment, except in those cases of unlawful discrimination or those provided by law. PT&Ts policy of not accepting or disqualifying from work any woman worker who contracts marriage is afoul of the right against discrimination provided to all women workers by our labor laws and by our Constitution. The record discloses clearly that de Guzmans ties with PT&T were dissolved principally because of the companys policy that married women are not qualified for employment in the company, and not merely because of her supposed acts of dishonesty. The government abhors any stipulation or policy in the nature adopted by PT&T. As stated in the labor code:

ART. 136. Stipulation against marriage. It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a woman shall not get married, or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of marriage. The policy of PT&T is in derogation of the provisions stated in Art.136 of the Labor Code on the right of a woman to be free from any kind of stipulation against marriage in connection with her employment and it likewise is contrary to good morals and public policy, depriving a woman of her freedom to choose her status, a privilege that is inherent in an individual as an intangible and inalienable right. The kind of policy followed by PT&T strikes at the very essence, ideals and purpose of marriage as an inviolable social institution and ultimately, family as the foundation of the nation. Such policy must be prohibited in all its indirect, disguised or dissembled forms as discriminatory conduct derogatory of the laws of the land not only for order but also imperatively required. 88. PASEI v. DRILON FACTS: PASEI recruits male and female for work abroad. They challenge the constitutionality of DO no. 1 of DOLE guidelines governing the temporary suspension of deployment of Filipino domestic and household workers for discrimination against males or females and for not applying to all Filipino workers but only to domestic helpers and females with similar skills. ISSUE: Whether or not the Department Order is a valid regulation? HELD: Order is valid. It applies only to female contract workers but it does not import a perfect identity if rights among all men and women. It is based on substantial distinctions. Female domestic servants abroad are usually the victims of exploitive working conditions. Distinctions are borne by evidence, there is no such evidence for male workers. It does not narrowly apply to existing conditions; they apply indefinitely so long as those conditions exist. That it does not apply to all Filipina workers is not an argument of unconstitutionality. Not all of them are similarly situated. What the constitution prohibits is the singling out of a select person or group within an existing class to the prejudice of such a person or group resulting in an unfair advantage to another person or group. 89. GTWO v. Glaxo Welcome Philippines (2004) Facts: Tecson was employed in Glaxo Wellcome Philippines became romantically involved with Bettsy, an employee of a rival pharmaceutical firm . The two eventually married. Tecson's superiors informed him that his marriage to Bettsy had given rise to a conflict of interest. Negotiations ensued, with Tecson adverting to his wife's possible resignation from Astra, and Glaxo making it known that they preferred to retain his services owing to his good performance. Yet no resolution came to pass. Tecson applied for a transfer to Glaxo's milk division, but his application was denied in view of Glaxo's "least-movement-possible" policy. Glaxo transferred Tecson to the Butuan City-Surigao City-Agusan del Sur sales area. Tecson asked Glaxo to reconsider its decision, but his request was denied. The matter was then brought to the Glaxo Grievance Committee, and subsequently to a voluntary arbitrator. The National Conciliation and Mediation Board (NCMB) rendered its decision, declaring as valid Glaxo's policy on relationships between its employees and persons employed with competitor companies, and affirming Glaxo's right to transfer Tecson to another sales territory. Issues: WON the company rule is valid? Ruling: The company policy on marriage was valid. It does not prohibit marriage per se. Employees are free to marry who they want. What its seeks to prevent is conflict of interest, which may be too detrimental in a very competitive business like the pharma industry. Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from competitors, especially so that it and Astra are rival companies in the highly competitive pharmaceutical industry.

Indeed, while our laws endeavor to give life to the constitutional policy on social justice and the protection of labor, it does not mean that every labor dispute will be decided in favor of the workers.

The prohibition against personal or marital relationships with employees of competitor companies upon Glaxos employees is reasonable under the circumstances because relationships of that nature might compromise the interests of the company. In laying down the assailed company policy, Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures. (SELF-PROTECTION)

90. Star Paper Corporation vs. Simbol FACTS: Petitioner was the employer of the respondents. Under the policy of Star Paper the employees are: 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 (singles, 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 Comia and Simbol both got married to their fellow employees. Estrella on the other hand had a relationship with a co-employee resulting to her pregnancy on the belief that such was separated. The respondents allege that they were forced to resign as a result of the implementation of the said assailed company policy. The Labor Arbiter and the NLRC ruled in favor of petitioner. The decision was appealed to the Court of Appeals which reversed the decision. ISSUE: Whether the prohibition to marry in the contract of employment is valid? HELD: 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 employees 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 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 employees right to be free from arbitrary discrimination based upon stereotypes of married persons working together in one company. Lastly, the absence of a statute expressly prohibiting marital discrimination in our jurisdiction cannot benefit the petitioners. The protection given to labor in our jurisdiction is vast and extensive that we cannot prudently draw inferences from the legislatures silence that married persons are not protected under our Constitution and declare valid a policy based on a prejudice or stereotype. Thus, for failure of petitioners to present undisputed proof of a reasonable business necessity, we rule that the questioned policy is an invalid exercise of management prerogative. Corollary, the issue as to whether respondents Simbol and Comia resigned voluntarily has become moot and academic. In the case of Estrella, the petitioner failed to adduce proof to justify her dismissal. Hence, illegal.

91. Meritor Savings Bank vs Vinson FACTS: Respondent former employee of petitioner bank brought an action against the bank and her supervisor at the bank, claiming that, during her employment at the bank, she had been subjected to sexual harassment by the supervisor in violation of Title VII of the Civil Rights Act of 1964, and seeking injunctive relief and damages. At the trial, the parties presented conflicting testimony about the existence of a sexual relationship between respondent and the supervisor. The District Court denied relief without resolving the conflicting testimony, holding that, if respondent and the supervisor did have a sexual relationship, it was voluntary, and had nothing to do with her continued employment at the bank, and that therefore respondent was not the victim of sexual harassment. The court then went on to hold that, since the bank was without notice, it could not be held liable for the supervisor's alleged sexual harassment. The CA reversed and remanded. Noting that a violation of Title VII may be predicated on either of two types of sexual harassment -- (1) harassment that involves the conditioning of employment benefits on sexual favors, and (2) harassment that, while not affecting economic benefits, creates a hostile or offensive working environment -- the CA held that, since the grievance here was of the second type, and the District Court had not considered whether a violation of this type had occurred, a remand was necessary. The court further held that the need for a remand was not obviated by the fact that the District Court had found that any sexual relationship between respondent and the supervisor was a voluntary one, a finding that might have been based on testimony about respondent's "dress and personal fantasies" that "had no place in the litigation." As to the bank's liability, the Court of Appeals held that an employer is absolutely liable for sexual harassment by supervisory personnel, whether or not the employer knew or should have known about it. ISSUE: WON a claim of "hostile environment" sexual harassment is a form of sex discrimination? HELD: The language of Title VII is not limited to "economic" or "tangible" discrimination. Equal Employment Opportunity Commission Guidelines fully support the view that sexual harassment leading to non-economic injury can violate Title VII. Here, respondent's allegations were sufficient to state a claim for "hostile environment" sexual harassment. The District Court's findings were insufficient to dispose of respondent's "hostile environment" claim. The District Court apparently erroneously believed that a sexual harassment claim will not lie absent an economic effect on the complainant's employment, and erroneously focused on the "voluntariness" of respondent's participation in the claimed sexual episodes. The correct inquiry is whether respondent by her conduct indicated that the alleged sexual advances were unwelcome, not whether her participation in them was voluntary. The Court of Appeals erred in concluding that employers are always automatically liable for sexual harassment by their supervisors. In this case, however, the mere existence of a grievance procedure in the bank and the bank's policy against discrimination, coupled with respondent's failure to invoke that procedure, do not necessarily insulate the bank from liability. 92. Bacsin vs Wahiman FACTS: Bacsin, a public elementary school teacher, was charged with Misconduct for fondling the breast of his student, as was witnessed by another student. In his defense, Bacsin claimed that the touching happened by accident. CSC ruled that Bacsin is GUILTY of Grave Misconduct (Acts of Sexual Harassment.Act contained in the Anti-Sexual Harassment Act of 1995. He appealed to CA. CA affirm and ruled that even if Bacsin was formally charged with disgraceful and immoral conduct and misconduct, CSC found that the allegations and evidence sufficiently proved petitioners guilt of grave misconduct, which is punishable by dismissal from service. ISSUE: WON misconduct (which was the charge against him) includes Grave Misconduct, thus, he can be convicted of such even if that was not charged? HELD: YES. It is clear that petitioner was sufficiently informed of the basis of the charge against him, which was his act of improperly touching one of his students. Thus informed, he defended himself from such charge. The failure to designate the offense specifically and with precision is of no moment in this administrative case. Charges against him imputes acts covered and penalized under Anti-sexual harassment act of 1995.

As ruled in Domingo v. Rayala, 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. Act of mashing the breast, in an education environment, upon a student, who felt fear at the time Bacsin touched her, are sufficient grounds for grave misconduct. The act of petitioner of fondling one of his students is against a law, RA 7877, and is doubtless inexcusable. The particular act of petitioner cannot in any way be construed as a case of simple misconduct. Sexually molesting a child is, by any norm, a revolting act that it cannot but be categorized as a grave offense. Parents entrust the care and molding of their children to teachers, and expect them to be their guardians while in school. Petitioner has violated that trust. The charge of grave misconduct proven against petitioner demonstrates his unfitness to remain as a teacher and continue to discharge the functions of his office. A teacher who perverts his position by sexually harassing a student should not be allowed, under any circumstance, to practice this noble profession. 93. MA. LOURDES T. DOMINGO vs ROGELIO I. RAYALA FACTS: Ma. Lourdes T. Domingo (Domingo), a Stenographic Reporter III at the NLRC, filed a Complaint for sexual harassment against Rayala, Chairman of NLRC that time. The committee constituted found Rayala guilty of the offense charged. It was ordered that Rayala be dismissed from service for being found guilty of grave offense of disgraceful and immoral conduct. Domingo assails the CAs resolution modifying the penalty imposed by the Office of the President. She raises the issue that CA erred in modifying the penalty for the respondent from dismissal to suspension from service for the maximum period of one year. The President has the prerogative to determine the proper penalty to be imposed on an erring Presidential appointee. She argues that the power to remove Rayala, a presidential appointee, is lodged with the President who has control of the entire Executive Department, its bureaus and offices. The OPs decision was arrived at after affording Rayala due process. Hence, his dismissal from the service is a prerogative that is entirely with the President. As to the applicability of AO No. 250, she argues that the same was not intended to cover cases against presidential appointees. AO No. 250 refers only to the instances wherein the DOLE Secretary is the disciplining authority, and thus, the AO does not circumscribe the power of the President to dismiss an erring presidential appointee. In his petition, Rayala raises that his act does not constitute sexual harassment; a demand, request, or requirement of a sexual favor, the same is made a pre-condition to hiring, re-employment, or continued employment; or the denial results in discrimination against the employee. Intent is an element of sexual harassment; and Misapplication of the expanded definition of sexual harassment in RA 7877 by applying DOLE AO 250. Rayala asserts that Domingo has failed to allege and establish any sexual favor, demand, or request from petitioner in exchange for her continued employment or for her promotion. According to Rayala, the acts imputed to him are without malice or ulterior motive. It was merely Domingos perception of malice in his alleged acts a "product of her own imagination" that led her to file the sexual harassment complaint. It argues that even though Rayala is a presidential appointee, he is still subject to the Civil Service Law.Under the Civil Service Law, disgraceful and immoral conduct, the acts imputed to Rayala, constitute grave misconduct punishable by dismissal from the service. The Republic adds that Rayalas positions invested with public trust and his acts violated that trust; thus, he should be dismissed from the service.This argument, according to the Republic, is also supported by Article215 of the Labor Code, which states that the Chairman of the NLRC holds office until he reaches the age of 65 only during good behavior. ISSUE: Did Rayala commit sexual harassment?

HELD: CA and OP were unanimous in holding that RAYALA is guilty of sexualharassment. They only differ in the appropriate imposable penalty. That Rayala committed the acts complained of and was guilty of sexual harassment therefore, the common factual finding of not just one, but three independent bodies: the Committee, the OP and the CA. It should be remembered that when supported by substantial evidence, factual findings made by quasi-judicial and administrative bodies are accorded great respect and even finality by the courts. This rule applies with full force to sexual harassment.The law penalizing sexual harassment in our jurisdiction is RA 7877.Section 3 thereof defines work-related sexual harassment in this wise. It should be enough that the CA, along with the Investigating Committee and the Office of the President, found substantial evidence to support the administrative charge. Yet, even if we were to test Rayalas 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 asexual 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 Domingos 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 asexual favor. Likewise, contrary to Rayalas 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 respondents acts result in creating an intimidating, hostile or offensive environment for the employee.

94. 95. 96. APEX MINING COMPANY, INC. vs. NLRC G.R. No. 94951 April 22, 1991 FACTS: Private respondent Sinclitica Candida was employed by petitioner Apex Mining Company, Inc. to perform laundry services at its staff house located at Masara, Maco, Davao del Norte. In the beginning, she was paid on a piece-rate basis and later on a monthly basis at P250.00 a month which was ultimately increased to P575.00 a month. On December 18, 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. She reported the accident to her immediate supervisor and to the personnel officer. As a result of the accident she was not able to continue with her work. She was permitted to go on leave for medication. Her immediate supervisor offered her an amount to persuade her to quit her job, but Candida refused the offer and preferred to return to work. Petitioner did not allow her to return to work and dismissed her. ISSUE: WON private respondent is entitled to labor standards? HELD: Yes. The mere fact that the househelper or domestic servant is working within the premises of the business of the employer and in relation to or in connection with its business, as in its staffhouses for its guest or even for its officers and employees, warrants the conclusion that such househelper or domestic servant is and should be considered as a regular employee of the employer. In which case, the employee is entitled to the privileges of a regular employee. In addition, there is enough evidence to show that because of an accident which took place while private respondent was performing her laundry services, she was not able to work and was ultimately separated from the service. She is, therefore, entitled to appropriate relief as a regular employee and the payment of separation pay should be in order. XVII. LEAVES 97. MAKATI HABERDASHERY INC. vs. NLRC G.R. No. 83380-81 November 15, 1989

FACTS: The private respondents have been working for petitioner Makati Haberdashery Inc. as tailors, seamstress, sewers, basters and plantsadoras. They are paid on a piece-rate basis except for Maria Angeles and Leonila Serafina who are paid on a monthly basis. In addition to their piece-rate, they are given a daily allowance of P3.00 provided they report for work before 9:30am everyday. The Sandigan ng Manggagawang Pilipino, a labor organization of the respondent workers, filed a complaint for: 1. Underpayment of the basic wage; 2. Underpayment of living allowance; 3. Non-payment of overtime work; 4. Non-payment of holiday pay; 5. Non-payment of service incentive pay; 6. 13th month pay; 7. Benefits provided for under Wage Orders Nos. 1,2,3,4 and 5. During the pendency of the case, private respondent Pelobello left with Rivera, a salesman of petitioner, an open package which contained a jusi barong Tagalog. When confronted, they allegedly admitted that they copied the design of Haberdashery but when questioned again they denied ownership of the same. They were issued a memorandum to explain but the respondents allegedly did not submit their explanation and did not report for work. Hence, they were dismissed. The private respondents countered by filing a complaint for illegal dismissal. The LA rendered her judgment finding Haberdashery guilty of illegal dismissal. ISSUE: WON the private respondent workers are entitled to monetary claims despite the finding that they are not entitled to minimum wage? HELD: There is no dispute that private respondents are entitled to the Minimum Wage: All employees paid by the result shall receive not less than the applicable new minimum wage rates for 8 hours work a day, except where a payment by result rate has been established by the Secretary of Labor No such rate has been established in the present case. As a consequence of their status as regular employees of the petitioners, they can claim cost of living allowance: All workers in the private sector, regardless of their position, designation or status, and irrespective of the method by which their wages are paid. Private respondents are also entitled to claim their 13th month pay under Section 3(e) of the IRR of PD 851: except where the workers are paid on piece-rate basis in which case the employer shall be covered by this issuance insofar as such workers are concerned. On the other hand, while private respondents are entitled to Minimum Wage, COLAS and 13th Month Pay, they are not entitled to service incentive leave pay because as piece-rate workers being paid at a fixed amount for performing work irrespective of time consumed in the performance thereof, they fall under one of the exceptions stated in Section 1(d) Rule V, IDD, Book III of the Labor Code. And for the same reason, they cannot also claim holiday pay. 98. JPL MARKETING PROMOTIONS vs. CA G.R. No. 151966 July 8, 2005 FACTS: JPL Marketing and Promotions is a domestic corporation engaged in the business of recruitment and placement of workers. On the other hand, private respondents were employed by JPL as merchandisers on separate dates and assigned at different establishments as attendants to the display of California Marketing Corporation (CMC), one of petitioners clients. JPL notified private respondents that CMC would stop its direct merchandising activity and were advised to wait for further notice as they would be transferred to other clients. However, private respondents filed before the NLRC complaints for illegal dismissal, praying for separation pay, 13th month pay, service incentive leave pay and moral damages. The LA dismissed the complaints for lack of merit. Private respondents appealed to the NLRC and

ordered the payment of separation pay, service incentive leave and 13th month pay. JPL filed a petition for certiorari. The CA dismissed the petition and affirmed in toto the NLRC resolution. ISSUE: WON the private respondents are entitled to separation pay, 13th month pay and service incentive leave pay. HELD: Under Articles 283 and 284 of the Labor Code, separation pay is authorized only in cases of dismissals due to any of these reasons: (a) installation of labor saving devices; (b) redundancy; (c) retrenchment; (d) cessation of the employers business; and (e) when the employee is suffering from a disease and his continued employment is prohibited by law or is prejudicial to his health and to the health of his co-employees. However, separation pay shall be allowed as a measure of social justice in those cases where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character, but only when he was illegally dismissed. In the instant case, JPL gave them a memo informing them of the termination of CMCs contract and not notice of termination of employment. In addition to that, they admitted their application and were employed by another establishment after they received the notice from JPL; they themselves severed their relations with JPL, thus, they are not entitled to separation pay. JPL cannot escape the payment of 13th month pay and service incentive leave pay to private respondents. Said benefits are mandated by law and should be given to employees as a matter of right. PD 851 as amended requires an employer to pay its rank and file employees a 13 th month pay not later than December 24 of every year. On the other hand, service incentive leave, as provided in Article 95 of the Labor Code, is a yearly leave benefit of 5 days with pay, enjoyed by an employee who has rendered at least one year of service. Unless specifically excepted, all establishments are required to grant service incentive leave to their employees. The term at least one year of service shall mean service within 12 months, whether continuous or broken reckoned from the date the employee started working. 99. INTEGRATED CONTRACTOR AND PLUMBING WORKS INC. vs. NLRC G.R. No. 152427 August 9, 2005 FACTS: Private respondent Solon worked for petitioner, a plumbing contractor. Its business depends on the number and frequency of the projects it is able to contract with its clients. On February 23, 1998, while Solon was about to log out from work, he was informed by the warehouseman that the main office had instructed them to tell him it was his last day of work as he had been terminated. When he went back to petitioners office to sign a clearance so he could claim his 13th month pay and tax refunds, he has second thoughts and refused to sign the same when he read the clearance indicating he had resigned. He then filed a complaint alleging that he was illegally dismissed without just cause and without due process. The LA ruled that private respondent was a regular employee and could only be removed for cause. Petitioner was ordered to reinstate Solon to his former position with full backwages from the time his salary was withheld until his actual reinstatement and pay him service incentive leave pay and 13th month pay. Petitioner appealed to NLRC which affirmed the decision of the LA. Petitioners motion for reconsideration was denied. ISSUE: WON private respondent Solon is entitled to 13th month pay, service incentive leave and holiday pay? HELD: The failure of the petitioner to comply with the procedural guidelines renders its dismissal of private respondent, illegal. An illegally dismissed employee is entitled to reinstatement with full backwages, inclusive of allowances, and

to his other benefits computed from the time his compensation was withheld from him up to the time of his actual reinstatement, pursuant to Article 279 of the Labor Code. Article 95(a) of the Labor Code governs the award of service incentive leave. It provides that every employee who has rendered at least 1 year of service shall be entitled to a yearly service incentive leave of 5 days with pay. 100. LABOR CONGRESS OF THE PHILIPPINES vs. NLRC G.R. No. 123938 May 21, 1998 FACTS: The 99 persons named as petitioners in this proceeding were rank and file employees of respondent Empire Food Products, which hired them on various dates. Petitioners filed against private respondents a complaint for payment of money claims and for violation of labor standards laws. They also filed a petition for direct certification of petitioner Labor Congress of the Philippines as their bargaining representative. Mediator Arbiter approved the memorandum and certified LCP as the sole and exclusive bargaining agent among the rank and file employees of Empire Food Products for purposes of collective bargaining with respect to wages, hours of work and other terms and conditions of employment. Petitioners filed a complaint against private respondents for unfair labor practice by way of illegal lockout and/or dismissal; union busting thru harassments, threats and interfering with the rights of employees to self-organization; violation of MOA dated October 23, 1990; underpayment of wages in violation of RA 6640 and RA 6727 as promulgated by the Regional Wage Board; actual, moral and exemplary damages. ISSUE: WON the petitioners are entitled to labor standard benefits considering they are paid by piece-rate basis? HELD: The petitioners are so entitled to the benefits namely holiday pay, premium pay, 13th month pay and service incentive leave. Although piece-rate workers, the petitioners were considered as regular employees for the following reasons: (1) as to the nature of petitioners tasks were necessary or desirable in the usual business of private respondents, who were engaged in the manufacture and selling of such food products; (2) petitioners worked for private respondents throughout the year; and (3) the length of time that petitioners worked for private respondents. Section 8(b), Rule IV, Book III provides that piece workers are specifically mentioned as being entitled to holiday pay. As to overtime pay, not entitled because petitioners are beyond the ambit of exempted persons under Section 2(e), Rule I, Book III of the Implementing Rules.

101. PNCC SKYWAY TRAFFIC MANAGEMENT AND SECURITY DIVISION WORKERS ORGANIZATION (PSTMSDWO) vs. PNCC SKYWAY CORP. G.R. No 171231 February 17, 2010 FACTS: Petitioner PSTMSDWO is a labor union duly registered with the DOLE. Respondent PNCC Skyway Corporation is a corporation duly organized and operating under and by virtue of the laws of the Philippines. Petitioner and respondent entered into a CBA incorporating the terms and conditions of their agreement which included vacation leave and expenses for security license provisions. Article VIII of the said CBA provides that the company shall schedule the vacation leave of employees during the year taking into consideration the request of preference of the employees. In a Memorandum, respondents Head of the Traffic Management and Security Department (TMSD) published the scheduled vacation leave of its TMSD personnel for the year 2004. Petitioner objected to the implementation of the same and insisted that the individual members of the union have the right to schedule their vacation leave. It opined that the unilateral scheduling of the employees vacation leave was done to avoid the monetization of their vacation

leave in December 2004. Due to the disagreement between the parties, petitioner elevated the matter to the DOLENCMB for preventive mediation. For failure to settle the issue amicably, the parties agreed to submit the issue before the voluntary arbitrator. The voluntary arbitrator issued a decision declaring that the scheduling of all vacation leaves shall be under the discretion of the union members, and the management to convert them into cash all the leaves which the management compelled them to use. ISSUE: WON the PNCC Skyway Corporation has the sole discretion to schedule the vacation leave of the Union members? HELD: The contested provision of the CBA is clear and unequivocal. Article VIII, Section 1(b) of the CBA categorically provides that the scheduling of vacation leave shall be under the option of the employer. The preference requested by the employees is not controlling because respondent retains its power and prerogative to consider or to ignore said request. Thus, if the terms of a CBA are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall prevail. The parties cannot be allowed to change the terms they agreed upon on the ground that the same are not favourable to them. Indeed, if union members were given the unilateral discretion to schedule their vacation leaves, the same may result in significantly crippling the number of key employees of the petitioner manning the toll ways on holidays and other peak seasons, where union members may wittingly or unwittingly choose to have a vacation. In the grant of vacation leave privileges to an employee, the employer is given the leeway to impose conditions on the entitlement to and commutation of the same, as the grant of vacation leave is not a standard of law, but a prerogative of management. It is a mere concession or act of grace of the employer and not a matter of right on the part of the employee. Thus, it is well within the power and authority of an employer to impose certain conditions, as it deems fit, on the grant of vacation leaves, such as having the option to schedule the same.

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