WENPHIL

CORPORATION,
vs.
NATIONAL
LABOR
RELATIONS
COMMISSION
AND
ROBERTO
MALLARE
(G.R. No. 80587, February 8, 1989)
FACTS: Respondent was hired by
Petitioner first, as a crew member,
then as Assistant Head of the
Backroom in its Cubao branch. On May
29, 1985, the Respondent got into an
altercation with his coworker, Job
Barrameda
which
resulted
in
Barramedas
suspension
while
respondent was dismissed from work.
His
dismissal
prompted
the
Respondent to file a complaint for
illegal suspension, illegal dismissal
and unfair labor practices before the
Labor Arbiter. The Labor Arbiter,
however, dismissed the complaint. But
upon appeal to the NLRC, the said
tribunal reversed the decision of the
Labor Arbiter.
Petitioner cried foul imputing to the
NLRC committed grave abuse of
discretion,
contending
that
the
decision of Petitioner to dismiss
Respondent was justified. In support of
his contention, Petitioner cited a
provision in the Personnel Manual
which states that if an employee
commits an offense punishable with
suspension of more than 15 days, an
investigation may be conducted at the
request of the concerned employee. In
this case, said Petitioner, Respondent
did not request for an investigation,
therefore, Respondents right to invoke
said provision should be deemed
waived.
ISSUE: Whether or not Respondents
right to due process was violated.

HELD: The incident happened on

May 20, 1985 and right then and there
as afore repeated on the following day
private respondent was suspended in
the morning and was dismissed from
the service in the afternoon. He
received an official notice of his
termination four (4) days later.

Although in the Personnel Manual of

the petitioner, it states that an erring
employee must request for an
investigation it does not thereby mean
that petitioner is thereby relieved of
the duty to conduct an investigation
before dismissing private respondent.
Indeed said provision of the Personnel
Manual of petitioner which may
effectively deprive its employees of
the right to due process is clearly
against the law and hence null and
void. The security of tenure of a
laborer or employee is enshrined in
the Constitution, the Labor Code and
other related laws.

Under Section 1, Rule XIV of the

Implementing Regulations of the Labor
Code, it is provided that "No worker
shall be dismissed except for just or
authorized cause provided by law and
after due process." Sections 2, 5, 6,
and 7 of the same rules require that
before an employer may dismiss an
employee the latter must be given a
written notice stating the particular
act or omission constituting the
grounds thereof; that the employee
may answer the allegations within a

reasonable period; that the employer

shall afford him ample opportunity to
be heard and to defend himself with
the assistance of his representative, if
he so desires; and that it is only then
that the employer may dismiss the
employee by notifying him of the
decision in writing stating clearly the
reasons therefor.

The failure of petitioner to give

private respondent the benefit of a
hearing before he was dismissed
constitutes an infringement of his
constitutional right to due process of
law and equal protection of the laws.

The rule is explicit as above

discussed. The dismissal of an
employee
must
be for
just
or
authorized cause and after due
process. Petitioner
committed
an
infraction of the second requirement.
Thus, it must be imposed a sanction
for its failure to give a formal notice
and conduct an investigation as
required by law before dismissing
petitioner
from
employment.
Considering the circumstances of this
case petitioner must indemnify the
private respondent the amount of
P1,000.00. The measure of this award
depends on the facts of each case and
the gravity of the omission committed
by the employer.

G.R. No. 117040

2000

January 27,

RUBEN SERRANO, petitioner

vs
NATIONAL
LABOR
RELATIONS
COMMISSION
and
ISETANN
DEPARTMENT STORE, respondents
Facts:
Sometime
in1991,
Isetann
Department Store (Isetann) instituted
a
retrenchment
program
which
abolished
its
Security
Checkers
Section. Isetann engaged the services
of an independent security agency. On
October 11, 1991, Ruben Serrano, the
head of Isetanns Security Checkers
Section received a letter from the
Human Resources Department of
Isetann
terminating
his
services
effective the same day.
Because of loss of employment,
Ruben Serrano filed a complaint for
illegal dismissal and monetary claims.
Labor
Arbiter
rendered
judgement finding the dismissal of
Ruben Serrano illegal and that Isetann
failed to accord due process to the
petitioner. Isetann was ordered to pay
Ruben Serrano full backwages from
the time of his dismissal until
reinstatement.
Isetann appealed to National
Labor Relations Commission (NLRC)
which, reversed the decisionof the
Labor Arbiter and ordered Ruben
Serrano to be given separation pay
equivalent to one month pay for every
year of service. NLRC held that the
abolition of the Security Checkers and
hiring of an independent security
agency constituted an exercise by
Isetann of its legitimate business
decision.
Petitioner appealed to the
Supreme Court.
Issue:
Whether or not the hiring of
independent security agency by
Isetann to replace the Security

Checkers Section a valid ground for

the termination of Ruben Serrano
Whether or not the noncompliance of Isetann of the 30-day
written notice requirement in Art 283
(old) of the Labor Code constituted a
denial of due process
Ruling:
Article 283 of the Labor Code
provides that the employer may also
terminate the employment of any
employee due to the installation of
labor-saving
devices,
redundancy,
retrenchment to prevent losses or the
closing or cessation of operations of
the establishment or undertaking
unless the closing is for the purpose of
circumventing the provisions of this
Title, by serving a written notice on
the workers and the Department of
Labor and Employment at least one
month before the intended date
thereof. In case of termination due to
the installation of labor-saving devices
or redundancy, the worker affected
thereby shall be entitled to a
separation pay equivalent to at least
one month pay or to at least one
month pay for every year of service,
whichever is higher.
In case of
retrenchment to prevent losses and in
cases of closure or cessation of
operations
of
establishment
or
undertaking not due to serious
business losses or financial reverses,
the separation pay shall be equivalent
to at least one month pay or at least
one-half month pay for every year of
service, whichever is higher. A fraction
of at least six months shall be
considered as one whole year.
Supreme
Court
held
that
Management cannot be denied the
faculty of promoting efficiency and
attaining economy by a study of what
units are essential for its preparation.
To
it
belongs
the
ultimate
determination of whether services
should be performed by its personnel

or contracted to outside agencies.

While
there
should
be
mutual
consultation, eventually deference is
to be paid to what management
decides. Consequently, absent proof
that management acted in a malicious
or arbitrary manner, the Court will not
interfere
with
the
exercise
of
judgement by an employer. The
termination of petitioners services
was for an authorized cause.
Supreme Court also held that
not all notice requirements are
requirements of due process. Some
are simply part of a procedure to be
followed before a right granted to a
party can be exercised. With respect
to Art 283 of the Labor Code, the
employers failure to comply with the
notice of requirement does not
constitute a denial of due process but
a mere failure to observe a procedure
for the termination of employment
which makes the termination merely
ineffectual.
In sum, if in proceedings for
reinstatement under Art. 283, it is
shown that the termination of
employment was due to an authorized
cause, then the employee should not
be ordered reinstated even though
there is failure to comply with the 30day notice requirement. Instead, he
must be granted separation pay in
accordance with Art. 283.
If employees separation is
without cause, instead of being given
separation
pay,
he
should
be
reinstated. In either case, whether he
is
reinstated
or
only
granted
separation pay, he should be paid full
backwages if he has been laid off
without written notice at least 30 days
in advance.
Petition
granted
and
the
resolution the NLRC is modifies by
ordering Isetann to pay petitioner
separation pay equivalent to one
month pay for every year of service
and full backwages from the time his

employment was terminated up to the

time decision becomes final.
TONGKO vs. MANULIFE
FACTS:
Tongko started working at Manulife by
virtue of a Career Agents Agreement.
He was first named as Unit Manager in
Manulifes Sales Agency Organization
and later on as Branch Manager. When
Manulife
instituted
manpower
development programs in the regional
sales management level, he received
a letter informing him that his region
is the lowest performer in terms of
recruiting. As a result, meetings were
held to tackle on issues and Tongko
was provided with directives as part of
the changes needed to meet the goal.
Subsequently, Tongko received a
notice of termination with 15-day
effectivity from receipt of such letter.
ISSUES:
1.
Was
there
an
employeremployee
relationship
between
Manulife and Tongko?
2.
If yes, was Manulife guilty of
illegal dismissal?
RULING:
1.
Thus,
with
the
company
regulations and requirements alone,
the fact that Tongko was an employee
of
Manulife
may
already
be
established.
Certainly,
these
requirements controlled the means
and methods by which Tongko was to
achieve the company's goals.
Additionally, it must be pointed out
that the fact that Tongko was tasked

with recruiting a certain number of

agents, in addition to his other
administrative functions, leads to no
other conclusion that he was an
employee of Manulife.
2.
Manulife did not even point out
which order or rule that Tongko
disobeyed. More importantly, Manulife
did not point out the specific acts that
Tongko was guilty of that would
constitute gross and habitual neglect
of duty or disobedience. Manulife
merely cited Tongko's alleged laggard
performance, without substantiating
such claim, and equated the same to
disobedience and neglect of duty.
Here, Manulife failed to overcome
such burden of proof. It must be
reiterated that Manulife even failed to
identify the specific acts by which
Tongko's employment was terminated
much less support the same with
substantial evidence. To repeat, mere
conjectures cannot work to deprive
employees
of
their
means
of
livelihood. Thus, it must be concluded
that Tongko was illegally dismissed.
Moreover, as to Manulife's failure to
comply with the twin notice rule, it
reasons that
Tongko not being its employee is not
entitled to such notices. Since we have
ruled that
Tongko is its employee, however,
Manulife clearly failed to afford Tongko
said notices.
Thus, on this ground too, Manulife is
guilty of illegal dismissal.

ARMANDO ALILING, petitioner, vs.

JOSE B. FELICIANO, MANUEL F.
SAN
MATEO
III,
JOSEPH
R.
LARIOSA AND WIDE WIDE WORLD
EXPRESS
CORPORATION,
respondents.

Code speaks of procedural due

process, the reference is usually to the
two (2) notice rule, envisaged in
Section 2 (III), Rule XXIII, Book V of the
Omnibus Rules of Implementing the
Labor Code which provides:

Facts: Aliling was an employee of

Wide Wide World Express Corporation
(WWWEC) who was tasked to handle
the companys Ground Express (GX)
involving domestic cargo forwarding
services. Barely a month after, the
company sent an email to the
petitioner to express dissatisfaction
with the latters performance. On
September 20, 2004 respondent
through its memo asked Aliling to
explain why he should not be
terminated for failure to meet
expected job performance (This letter
was later denied to have been
received by the petitioner, thus he was
not able to explain). Thereafter, on a
letter
dated
October
1,
2004,
respondent informed petitioner that
his case was still in the process of
being evaluated. On October 6, 2004,
respondent again wrote, this time to
advise Aliling of the termination of his
services effective as of that date
owing
to
his
non-satisfactory
performance.

Section 2. Standard of due process:

requirements of notice
I. For termination of Employment base
on just causes as defined in Article
282 of the Coode:
(a) A written notice served
on the employee specifying the
ground or grounds of termination,
and giving the said employee
reasonable opportunity to explain
his side;
(b) A hearing or conference
during which the employee concerned,
with the assistance of counsel if the
employee so desires, is given the
opportunity to respond to the charge,
present his evidence or rebut the
evidence presented against him; and
(c) A written notice [of]
termination
served
on
the
employee indicating that upon
due consideration of all the
circumstance, grounds have been
established
to
justify
his
termination.

Issue/s: Whether or not Aliling was

illegally terminated by reason of
violation of due process requirement.
Held: YES, Aliling was illegally
terminated. As a rule to effect a legal
dismissal the employer must show not
only a valid ground therefor but also
procedural
due
process
should
properly be observed. When the Labor

As to the first written notice, WWWEC

did not adduce proof to show that a
copy of the letter was duly served
upon Aliling. Clearly enough, WWWEC
did not comply with the first notice
requirement. Lastly, the termination
letter did not specifically state Alilings
non-satisfactory performance, or
that Alilings termination was by
reason of his failure to achieve his set
quota. In other words, the written

notice of
indicate
involving
severance

termination itself did not

all
the
circumstances
the charge to justify
of employment.

mortgage debt via dacion en pago.

The
petitioner
initiated
the
extrajudicial foreclosure of the real
estate mortgage.

Here, the first and second notice

requirements have not been properly
observed, thus tainting petitioners
dismissal with illegality.

Respondents then filed Civil Case No.

69294 for Temporary Restraining
Order (TRO), Injunction and Annulment
of Extrajudicial Foreclosure Sale. They
imputed bad faith on the part of
petitioner who did not officially inform
them of the denial or disapproval of
their proposal to settle the loan
obligation by dacion via assignment of
a commercial property. The trial court
granted a TRO effective for twenty
(20) days.

EQUITABLE PCI BANK, INC. vs. OJMARK

TRADING,
INC.
and
SPOUSES OSCAR AND EVANGELINE
MARTINEZ
G.R. No. 165950 (August 11, 2010)

FACTS:
Respondent-spouses
Oscar
and
Evangeline Martinez obtained loans
from petitioner Equitable PCI Bank,
Inc. in the aggregate amount of P
4,048,800.00. As security for the said
amount, a Real Estate Mortgage (REM)
was executed over a condominium
unit in San Miguel Court, Valle Verde 5,
Pasig City, Metro Manila where the
spouses are residing.
Respondent-spouses defaulted in the
payment of their outstanding loan
obligation, they offered to settle their
indebtedness with the assignment to
the Bank of a commercial lot of
corresponding
value
and
also
requested for recomputation at a
lower interest rate and condonation of
penalties. The respondents failed to
submit the required documents such
as certificates of title and tax
declarations so that the bank can
evaluate his proposal to pay the

Petitioner questioned the issuance of

preliminary injunction before the CA
arguing that the respondents are not
entitled to injunctive relief after having
admitted that they were unable to
settle their loan obligations. By
Decision dated October 29, 2004, the
appellate court sustained the assailed
orders.
ISSUE:
Whether or not the respondents have
shown a clear legal right to enjoin the
foreclosure and public auction of the
third-party mortgagors property while
the case for annulment of REM on said
property is being tried.
HELD:
NO. The Supreme Court held that the
respondent spouses have not shown a
clear legal right to enjoin the
foreclosure. According to the SC:
1. It is not sufficient for the
respondents to simply harp on

the serious damage they stand

to suffer if the foreclosure sale
is not stayed. They must
establish
such
clear
and
unmistakable
right
to
the
injunction. Injunction is not a
remedy to protect or enforce
contingent, abstract, or future
rights; it will not issue to protect
a right not in esse and which
may never arise, or to restrain
an action which did not give rise
to a cause of action.
There
must be an existence of an
actual right.
2. Respondents failed to show that
they have a right to be
protected and that the acts
against which the writ is to be
directed are violative of the said
right. On the face of their clear
admission
that
they
were
unable to settle their obligations
which were secured by the
mortgage, petitioner has a clear
right to foreclose the mortgage.
Foreclosure is but a necessary
consequence of non-payment of
a mortgage indebtedness.
WHEREFORE, the petition is
GRANTED.
The
Decision
dated October 29, 2004 of
the Court of Appeals in CAG.R. SP No. 77703 is hereby
REVERSED and SET ASIDE.
Respondents application for
a
writ
of
preliminary
injunction is DENIED.
EMER MILAN, RANDY MASANGKAY,
WILFREDO
JAVIER,
RONALDO
DAVID, BONIFACIO MATUNDAN,
NORA
MENDOZA,
ET
AL.,
Petitioners, v. NATIONAL LABOR
RELATIONS COMMISSION, SOLID
MILLS, INC., AND/OR PHILIP ANG,
Respondents.
FACTS:

Petitioners are employees of

Solid Mills, Inc. Petitioners were
allowed by Solid Mills, Inc. to occupy a
property owned by the latter known as
the SMI Village. This was granted by
the respondents to the petitioners out
of liberality and for convenience of the
latter. Solid Mills experience a serious
financial losses to which had force its
operation to ceased. The petitioners
then were required to sign a
memorandum of agreement with
release and quitclaim before their
vacation and sick leave benefits, 13th
month pay, and separation pay would
be released. Employees who signed
the memorandum of agreement were
considered to have agreed to vacate
SMI Village, and to the demolition of
the constructed houses inside as
condition for the release of their
termination benefits and separation
pay. Petitioners refused to sign the
documents and demanded to be paid
their benefits and separation pay.
Labor Arbiter ruled in favour of
Petitioner. NLRC affirmed. CA ruled in
favour of Solid Mills.
ISSUE:
WON Solid Mills Inc, can
withhold the payment of vacation and
sick leave benefits, 13 month pay and
separation pay.
HELD:
Our
law
supports
the
employers institution of clearance
procedures before the release of
wages. As an exception to the general
rule that wages may not be withheld
and benefits may not be diminished,
the Labor Code provides:
Art. 113. Wage deduction. No
employer, in his own behalf or in
behalf of any person, shall make any
deduction from the wages of his
employees,
except.

1. In cases where the worker is insured

with his consent by the employer, and
the deduction is to recompense the
employer for the amount paid by him
as
premium
on
the
insurance
2. For union dues, in cases where the
right of the worker or his union to
check-off has been recognized by the
employer or authorized in writing by
the individual worker concerned; and
3. In cases where the employer is
authorized by law or regulations
issued by the Secretary of Labor and
Employment. (Emphasis supplied)
The Civil Code provides that the
employer is authorized to withhold
wages for debts due:
Article 1706. Withholding of the
wages, except for a debt due, shall not
be made by the employer.d
Debt in this case refers to any
obligation due from the employee to
the
employer.
It
includes
any
accountability that the employee may
have to the employer. There is no
reason to limit its scope to uniforms
and equipment, as petitioners would
argue. Petitioners do not categorically
deny respondent Solid Mills ownership
of the property, and they do not claim
superior right to it. What can be
gathered from the findings of the
Labor Arbiter, National Labor Relations
Commission, and the Court of Appeals
is that respondent Solid Mills allowed
the use of its property for the benefit
of petitioners as its employees.
Petitioners were merely allowed to
possess and use it out of respondent
Solid Mills liberality. The employer
may, therefore, demand the property
at will.
G.R. No. 205300, March 18, 2015
FONTERRA
BRANDS
PHILS.,
INC., Petitioner, v. LEONARDO1 LARG

ADO
AND
TEOTIMO
ESTRELLADO, Respondents.
Facts:
Petitioner Fonterra Brands Phils., Inc.
(Fonterra) contracted the services of
Zytron Marketing and Promotions
Corp. (Zytron) for the marketing and
promotion of its milk and dairy
products. Pursuant to the contract,
Zytron provided Fonterra with trade
merchandising representatives (TMRs),
including
respondents
Leonardo
Largado
(Largado)
and
TeotimoEstrellado (Estrellado).
Fonterra
sent
Zytron
a
letter
terminating its promotions contract.
Fonterra
then
entered
into
an
agreement for manpower supply with
A.C. Sicat Marketing and Promotional
Services (A.C. Sicat). Desirous of
continuing their work as TMRs,
respondents
submitted
their
job
applications with A.C. Sicat, which
hired them for a term of five (5)
months.
When respondents 5-month contracts
with A.C. Sicat were about to expire,
they allegedly sought renewal thereof,
but were allegedly refused. This
prompted
respondents
to
file
complaints for illegal dismissal against
petitioner, Zytron, and A.C. Sicat.
The Labor Arbiter dismissed the
complaint and ruled that respondents
were not illegally dismissed.
The NLRC affirmed the Labor Arbiter,
finding that respondents separation
from Zytron was brought about by the
execution of the contract between
Fonterra and A.C. Sicat where the
parties agreed to absorb Zytrons
personnel, including respondents.
The NLRC decision was assailed in a

petition under Rule 65 before the CA.

CA held that respondents were
illegally dismissed since Fonterra itself
failed to prove that their dismissal is
lawful. However, the illegal dismissal
should
be
reckoned
from
the
termination
of
their
supposed
employment with Zytron on June 6,
2006.
Furthermore,
respondents
transfer to A.C. Sicat is tantamount to
a completely new engagement by
another
employer.
Lastly,
the
termination of their contract with A.C.
Sicat arose from the expiration of their
respective contracts with the latter.
The CA, thus, ruled that Fonterra is
liable to respondents and ordered the
reinstatement of respondents without
loss of seniority rights, with full
backwages, and other benefits from
the time of their illegal dismissal up to
the time of their actual reinstatement.
Zytron and Fonterra moved for
reconsideration, but to no avail.
Hence, this petition.
Issue:whether or not respondents
were illegally dismissed. (By zytron
and A.C. Sicat)
Held: No.
We do not agree with the CA that
respondents employment with Zytron
was
illegally
terminated.
As correctly held by the Labor Arbiter
and the NLRC, the termination of
respondents employment with Zytron
was brought about by the cessation of
their contracts with the latter. We give
credence to the Labor Arbiters
conclusion that respondents were the
ones who refused to renew their
contracts with Zytron, and the NLRCs
finding
that
they
themselves

acquiesced to their transfer to A.C.

Sicat.
By refusing to renew their contracts
with Zytron, respondents effectively
resigned from the latter. Resignation is
the voluntary act of employees who
are compelled by personal reasons to
dissociate themselves from their
employment, done with the intention
of
relinquishing
an
office,
accompanied
by
the
act
of
abandonment.
Here, it is obvious that respondents
were
no
longer
interested
in
continuing their employment with
Zytron. Their voluntary refusal to
renew their contracts was brought
about by their desire to continue their
assignment in Fonterra which could
not happen in view of the conclusion
of Zytrons contract with Fonterra.
Hence, to be able to continue with
their assignment, they applied for
work with A.C. Sicat with the hope that
they will be able to continue rendering
services as TMRs at Fonterra since
A.C. Sicat is Fonterras new manpower
supplier.
This
fact
is
even
acknowledged by the CA in the
assailed Decision where it recognized
the reason why respondents applied
for work at A.C. Sicat. The CA stated
that [t]o continuously work as
merchandisers of Fonterra products,
[respondents] submitted their job
applications to A.C. Sicat xxx. This is
further bolstered by the fact that
respondents voluntarily complied with
the requirements for them to claim
their corresponding monetary benefits
in relation to the cessation of their
employment contract with Zytron.

In short, respondents voluntarily

terminated their employment with
Zytron by refusing to renew their
employment contracts with the latter,
applying with A.C. Sicat, and working
as the latters employees, thereby
abandoning
their
previous
employment with Zytron. Too, it is well
to mention that for obvious reasons,
resignation is inconsistent with illegal
dismissal. This being the case, Zytron
cannot be said to have illegally
dismissed respondents, contrary to the
findings of the CA.
whether
the
termination
of
respondents employment with
A.C. Sicat is valid?
We agree with the findings of the CA
that the termination of respondents
employment with the latter was simply
brought about by the expiration of
their
employment
contracts.
Foremost, respondents were fixedterm employees. As previously held by
this Court, fixed-term employment
contracts are not limited, as they are
under the present Labor Code, to
those by nature seasonal or for
specific projects with predetermined
dates of completion; they also include
those to which the parties by free
choice have assigned a specific date
of
termination.11 The
determining
factor of such contracts is not the duty
of the employee but the day certain
agreed upon by the parties for the
commencement and termination of
the
employment
relationship.
In the case at bar, it is clear that

respondents were employed by A.C.

Sicat as project employees. In their
employment contract with the latter, it
is clearly stated that [A.C. Sicat is]
temporarily employing [respondents]
as TMR[s] effective June 6[, 2006]
under the following terms and
conditions: The need for your service
being only for a specific project, your
temporary employment will be for the
duration only of said project of our
client, namely to promote FONTERRA
BRANDS products xxx which is
expected to be finished on or before
Nov.
06,
2006.
Respondents,
by
accepting
the
conditions of the contract with A.C.
Sicat, were well aware of and even
acceded to the condition that their
employment thereat will end on said
pre-determined date of termination.
They cannot now argue that they were
illegally dismissed by the latter when
it refused to renew their contracts
after its expiration. This is so since the
non-renewal of their contracts by A.C.
Sicat is a management prerogative,
and failure of respondents to prove
that such was done in bad faith
militates against their contention that
they were illegally dismissed. The
expiration of their contract with A.C.
Sicat simply caused the natural
cessation
of
their
fixed-term
employment
there
at.
PHIL.
JAPAN
ACTIVE
CARBON
CORP. and SATOFUKA v. NLRC and
QUIANOLA
G.R. No. 83239, 08 March 1989,
FIRST DIVISION (Grio-Aquino, J.)

FACTS
Olga S. Quianola employed as
Assistant
Secretary/Export
Coordinator, was promoted to the
position of Executive Secretary to the
Executive Vice President and General
Manager. For no apparent reason at all
and without prior notice to her, she
was transferred to the Production
Department as Production Secretary.
Although the transfer did not amount
to a demotion because her salary and
workload remained the same, she
believed otherwise so she rejected the
assignment and filed a complaint for
illegal dismissal.
The Labor Arbiter found that the
transfer would amount to constructive
dismissal ("she was dismissed for
unjustified causes") hence, her refusal
to obey the transfer order was
justified. The LA finds Quianola was
illegally
dismissed
and
orders
Philippine
Japan
Active
Carbon
Corporation and/or Tokuichi Satofuka
to reinstate her with backwages and
damages.
Upon appeal to the NLRC, the
Commission approved the Labor
Arbiter's decision.

ISSUE
Was there a constructive dismissal?

HELD

The Supreme Court rules that

there was NO constructive dismissal.
A constructive discharge is
defined as: "A quitting because
continued employment is rendered
impossible, unreasonable or unlikely;
as, an offer involving a demotion in
rank and a diminution in pay." (Alia vs.
Salani Una Transportation Co., January
29, 1971)
In
this
case,
Quianola's
assignment as Production Secretary of
the Production Department was not
unreasonable as it did not involve a
demotion in rank (her rank was still
that of a department secretary) nor a
change in her place of work (the office
is in the same building), nor a
diminution in pay, benefits, and
privileges. It did not constitute a
constructive dismissal.
It is the employer's prerogative,
based
on
its
assessment
and
perception
of
its
employees'
qualifications,
aptitudes,
and
competence, to move them around in
the various areas of its business
operations in order to "ascertain
where
they
will
function
with
maximum benefit to the company."
When an employee's transfer is not
unreasonable, nor inconvenient, nor
prejudicial to him, and it does not
involve a demotion in rank or a
diminution of his salaries, benefits,
and other privileges, the employee
may not complain that it amounts to a
constructive dismissal.
NLRC's decision is affirmed
insofar as it orders herein petitioners

to reinstate Quianola, but she shall

be reinstated to her position as
Production Secretary of the Production
Department without loss of seniority
rights and other privileges.

MINTERBRO,
INC.
and/or
DE
CASTRO
v.
NAGKAHIUSANG
MAMUMUO
SA
MINTERBRO
SOUTHERN
PHILIPPINES
FEDERATION OF LABOR and/or
ABELLANA, et al.
G.R. No. 174300, 05 December
2012, FIRST DIVISION (LeonardoDe Castro, J.)
FACTS
Mindanao
Terminal
and
Brokerage Service, Inc. (Minterbro) is a
domestic corporation managed by De
Castro and engaged in the business of
providing arrastre and stevedoring
services to its clientele at Port Area,
Sasa, Davao City. Del Monte is their
exclusive client.
Davao Pilots' Association, Inc.
(DPAI) informed Minterbro of its
intention to refrain from docking
vessels at Minterbros pier for security
and safety reasons until its docks are
repaired or rehabilitated. Minterbro
decided to rehabilitate the pier and on
the same day, sent a letter to the
Department of Labor and Employment
(DOLE) to inform DOLE of Minterbros
intention to temporarily suspend
arrastre and stevedoring operations.
The
Union
composed
of
respondents Manuel Abellana, et al.,
employees of Minterbro, filed a

complaint for payment of separation

pay against Minterbro and De Castro.
ISSUE
Whether
or
not
the
union
members/employees were deprived of
gainful employment making Minterbro
liable for separation pay
HELD
The
Supreme
Court
finds
Minterbro liable to its employees.
Minterbro's inaction on what
they allege to be the unexplained
abandonment by Del Monte of its
obligations under the Contract for the
Use of Pier coupled with petitioners
belated action on the damaged
condition of the pier caused the
absence of available work for the
union members. As Minterbro was
responsible for the lack of work at the
pier and, consequently, the layoff of
the union members, it is liable for the
separation from employment of the
union members on a ground similar to
retrenchment. This Court has ruled:
"A
lay-of,
used
interchangeably
with
"retrenchment,"
is
a
recognized
prerogative
of
management. It is an act of the
employer
of
dismissing
employees because of losses in
operation of a business, lack of
work,
and
considerable
reduction on the volume of his
business, a right consistently
recognized and affirmed by this
Court. The requisites of a valid

retrenchment are covered by

Article 283 of the Labor Code."
When a lay-off is temporary, the
employment status of the employee is
not deemed terminated, but merely
suspended. Article 286 of the Labor
Code provides, in part, that the bona
fide suspension of the operation of the
business or undertaking for a period
not exceeding six months does not
terminate employment.
When Minterbro failed to make
work available to the union members
for a period of more than six months
by failing to call the attention of Del
Monte on the latters obligations under
the Contract of Use of Pier and to
undertake a timely rehabilitation of
the pier, they are deemed to have
constructively
dismissed
the
union members.

Begino
et.
al.
Vs
ABS-CBN
Corporation and Amala Villafuerte
FACTS:
Respondent
ABS-CBN
Corporation
(ABS-CBN)
employed
respondent Villafuerte as Manager.
Thru Villafuerte, ABS-CBN engaged the
services of petitioners Begino and Del
Valle as Cameramen/Editors for TV
Broadcasting, Petitioners Sumayao
and Llorin were likewise similarly
engaged as reporters. Petitioners were
tasked with coverage of news items
for subsequent daily airings in
respondents TV Patrol Bicol Program.

Claiming that they were regular

employees of ABS-CBN, petitioners
filed a complaint against before the
NLRC. In support of their claims for
regularization,
underpayment
of
overtime pay, holiday pay, 13th month
pay, service incentive leave pay,
damages
and
attorney's
fees,
petitioners
alleged
that
they
performed functions necessary and
desirable in ABS-CBN's business. They
averred that they were repeatedly
hired by respondents for ostensible
fixed periods and this situation had
hone on for years since TV Patrol Bicol
has continuously aired from 1996
onwards.
Respondents
argued
that,
although it occasionally engages in
production and generates programs
thru various means, the company had
allegedly
resorted
to
engaging
independent contractors who offered
their services in relation to a particular
program,
such
independent
contractors
were
required
to
accomplish Talent Information Forms
to facilitate their engagement for and
appearance on designated project
days. Respondents argued that the
company cannot afford to provide
regular work for talents given the
unpredictability of viewer.
Respondents
insisted
that,
petitioners were hired as talents, to
act as reporters and/or cameramen for
designated
periods
and
rates.
Although petitioners were inevitably
subjected to some degree of control,
the same was allegedly limited to the
imposition of general guidelines on
conduct and performance, simply for

the
purpose
of
upholding
the
standards of the company and the
strictures of the industry.
ISSUE: Whether or not there exist an
employer-employee relationship.
RULING:
Yes, there exist an employer-employee
relationship.
ART. 280. Regular and Casual
Employment. The provisions of
written agreement to the contrary
notwithstanding and regardless of the
oral agreement of the parties, an
employment shall be deemed to be
regular where the employee has been
engaged to perform activities which
are usually necessary or desirable in
the usual business or trade of the
employer,
except
where
the
employment has been fixed for a
specific project or undertaking the
completion or termination of which
has been determined at the time of
the engagement of the employee or
where the work or service to be
performed is seasonal in nature and
the employment is for the duration of
the season.
An
employment
shall
be
deemed to be casual if it is not
covered by the preceding paragraph:
Provided, That, any employee who has
rendered at least one year of service,
whether such service is continuous or
broken, shall be considered a regular
employee with respect to the activity
in which he is employed and his
employment shall continue while such
actually exists.

The
Court
finds
that,
notwithstanding the nomenclature of
their Talent Contracts, petitioners are
regular employees of ABS-CBN. Time
and again, it has been ruled that the
test
to
determine
whether
employment is regular or not is the
reasonable connection between the
activity performed by the employee in
relation to the business or trade of the
employer. As cameramen/editors and
reporters,
petitioners
were
undoubtedly
performing
functions
necessary and essential to ABS-CBNs
business of broadcasting television
and radio content. Aside from the fact
that said program is a regular
weekday fare of the ABS-CBN the
record shows that, petitioners were
continuously re-hired by respondents
over the years.
It is evident from the foregoing
disquisition that petitioners are regular
employees
of
ABS-CBN.
This
conclusion is borne out by the
ineluctable showing that petitioners
perform functions necessary and
essential to the business of ABS-CBN
which repeatedly employed them for a
long-running news program.
NOTES:

4
kinds
of
employees
contemplated in Art. 280 of the Labor
Code:
1.
Regular employees or those
who have been engaged to perform
activities which are usually necessary
or desirable in the usual business or
trade of the employer;

2.
Project employees or those
whose employment has been fixed for
a specific project or undertaking, the
completion or termination of which
has been determined at the time of
the engagement of the employee;
3.
Seasonal employees or those
who work or perform services which
are seasonal in nature, and the
employment is for the duration of the
season; and
4.
Casual employees or those who
are not regular, project, or seasonal
employees.

To determine the existence of

said relation, case law has consistently
applied the four-fold test, to wit:
(a) the selection and engagement of
the employee;

Facts: Petitioner Corporation has a

company policy promulgated in 1995,
viz.
1. New applicants will not be allowed
to be hired if in case he/she has [a]
relative, up to [the] 3rd degree of
relationship, already employed by the
company.
2. In case of two of our employees
(both singles [sic], one male and
another female) developed a friendly
relationship during the course of their
employment and then decided to get
married, one of them should resign to
preserve the policy stated above.
Respondents herein were all regular
employees of the company. Simbol
was employed by the company. He
met Alma Dayrit, also an employee of
the company, whom he married. On
the other hand, Comia also married a
co-employee, while Estrella had an
affair with her co- employee.

(b) the payment of wages;

Respondents were all dismissed.

(c) the power of dismissal; and

Issue: Whether the policy of the

employer banning spouses from
working in the same company violates
the rights of the employee under the
Constitution and the Labor Code or is
a valid exercise of management
prerogative.

(d) the employer's power to control

the employee on the means and
methods by which the work is
accomplished.
Of these criteria, the so-called "control
test" is generally regarded as the most
crucial and determinative indicator of
the presence or absence of an
employer-employee relationship.

Star Paper Corporation, Josephine

Ongsitco
&
Sebastian
Chua,
Petitioners vs. Ronaldo D. Simbol,
Wilfreda N. Comia & Lorna A.
Estrella, Respondents

Ruling: The policy violates the rights

of the employee. To justify a bona fide
occupational
qualification,
the
employer must prove two factors: (1)
that the employment qualification is
reasonably related to the essential
operation of the job involved; and, (2)
that there is a factual basis for
believing that all or substantially all
persons meeting the qualification
would be unable to properly perform
the duties of the job. The concept of a
bona fide occupational qualification is
not foreign in our jurisdiction. We

employ
the
standard
of
reasonableness of the company
policy which is parallel to the bona fide
occupational
qualification
requirement. The cases of Duncan and
PT&T instruct us that the requirement
of reasonableness must be clearly
established to uphold the questioned
employment policy. The employer has
the burden to prove the existence of a
reasonable business necessity.
We do not find a reasonable business
necessity in the case at bar.
Petitioners sole contention that "the
company did not just want to have two
(2) or more of its employees related
between the third degree by affinity
and/or consanguinity" is lame. That
the second paragraph was meant to
give teeth to the first paragraph of the
questioned rule is evidently not the
valid reasonable business necessity
required by the law. It is significant to
note that in the case at bar,
respondents were hired after they
were found fit for the job, but were
asked to resign when they married a
co-employee. 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.
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.

G.R. No. 124208 January 28, 2008

GOVERNMENT
SERVICE
INSURANCE
SYSTEM
(GSIS),

petitioner,vs.COURT OF APPEALS
and HEIRS OF ABRAHAM CATE,
represented by DOROTHY CATE,
respondents.
X---------------------------------------------- XG.R. No. 124275 January 28,
2008EMPLOYEES COMPENSATION
COMMISSION
and
PHILIPPINE
NATIONAL POLICE, petitioner,vs.
THE
HONORABLE
COURT
OF
APPEALS and HEIRS OF ABRAHAM
CATE, represented by DOROTHY
CATE, respondents.
Facts:
Abraham
Cate(Abraham)
was
a
Rifleman of Philippine Navy before
joining
the
Philippine
National
Police(PNP). During his service with
the PNP, he noticed a mass on his left
cheek which after a series of tests
turned out to be an Osteoblastic
Osteosarcoma, which is one of the
most aggressive primary bone cancer.
He underwent a series of surgeries
and radiotherapy, however, he died
and was survived by his wife and
children.
His wife filed a claim for income
benefits with the Government Service
Insurance System (GSIS) under PD No.
626, as amended. The GSIS denied the
claim
on
the
ground
that
osteosarcoma is not considered an
occupational disease under PD No.
626 therefore there must be sufficient
proof that Abraham had an increased
risk of contracting said ailment.
The decision of GSIS was affirmed by
the
Employees
Compensation
Commission(ECC), however, the Court

of Appeals reversed the decision and

declared that Abrahams disease is
compensable on the ground that the
Employees
Compensation
Act
is
basically a social legislation designed
to afford relief to our working men,
and should, therefore, be liberally
construed in favor of the applicant.
Hence, this petition for review.

Issue:
Whether or not the CA erred in ruling
that the ailment of the late Abraham is
compensable under the present law on
employees compensation?

Held:
In this case, Osteosarcoma is not
listed as an occupational disease in
the Amended Rules on Employees
Compensation. Hence, it is supposed
to be upon the claimant or private
respondents to prove by substantial
evidence that the risk of contracting
Osteosarcoma was increased by the
working conditions
of
the
late
Abraham. Substantial evidence means
such
relevant
evidence
as
a
reasonable mind might accept as
adequate to support a conclusion.
The
rule
is
that
awards
of
compensation
cannot
rest
on
speculations and presumptions as the
claimant must prove a positive thing.
The application of the rules would
mean that absent any proof that the
risk of contracting the ailment was
increased by the working conditions of

the late Abraham, private respondents

would
not
be
entitled
to
compensation.
It is practically undisputed that under
the present state of science, the proof
referred by the law to be presented by
the deceased private respondent
claimant
was
unavailable
and
impossible to comply with, the
condition must be deemed as not
imposed.
In the specific case of respondent, the
requirement is impossible to comply
with, given the present state of
scientific knowledge. The obligation to
present such as an impossible
evidence must, therefore, be deemed
void. Respondent, therefore, is entitled
to compensation, consistent with the
social legislations intended beneficial
purpose.

WHEREFORE,
DENIED.

the

petitions

are

ONE SHIPPING CORP., AND OR ONE

SHIPPING
KABUSHIKI
KAISHA/JAPAN,
Petitioner,
vs.
IMELDA C. PAAFIEL Respondent,
GR No. 192406, January 21, 20015

FACTS:
Ildefonso Paafiel, the husband
of the respondent Imelda Paafiel, was
hired by One Shipping Corp. for and in
behalf of the principal One Shipping
Kabushiki Kaisha/Japan as second

engineer on board vessel MV/ACX

Magnolia. Respondent alleged that
while on board the vessel, her
husband experienced chest pain and
difficulty in breathing which he
reported to his superior, but was
ignored. He returned to the Philippines
on May 21, 2005 and sought for post
medical
examination
from
the
petitioners but was not heeded.
Ildefonso suddenly collapsed and died
on July 2, 2005. Due to this incident,
respondent filed for monetary claims
against the petitioners.

Petitioners, on the other hand,

denied the monetary claims arguing
that Ildefonso was no longer their
employee when the incident occurred.

Labor Arbiter dismissed the

complaint for lack of merit which the
NLRC affirmed on appeal. The issue
was raised to CA through petition for
certiorari under Rule 65 of Revised
Rules of Court. CA granted the petition
and reversed the resolution of NLRC.

ISSUES:
1. W/N CA has jurisdiction over
present case after the Resolutions of
Labor Arbiter and NLRC became final
and executory
2. W/N Respondent is entitled to
avail death benefits

HELD:

1. CA has no jurisdiction on the

case after the resolutions of NLRC
became final and executory. It is a
hornbook rule that once a judgment
has become final and executory, it
may no longer be modified in any
respect, even if the modification is
meant to correct an erroneous
conclusion of fact or law, and
regardless of whether the modification
is attempted to be made by the court
rendering it or by the highest court of
the land, as what remains to be done
is the purely ministerial enforcement
or execution of the judgment.

The only exceptions to the rule

on the immutability of final judgments
are (1) the correction of clerical errors,
(2) the so-called nunc pro tunc entries
which cause no prejudice to any party,
and (3) void judgments. Nunc pro tunc
judgment
does
not
pertain
to
rendering new judgment; rather, it is
one that places the previous judgment
in proper form on the record to make it
speak of the truth as to make it show
what the judicial action really was.

2. Respondent is not entitled to avail

death benefits. In order to avail of
death benefits, the death of the
employee should occur during the
affectivity
of
the
employment
contract. The death of a seaman
during the term of employment makes
the employer liable to his heirs for
death compensation benefits. Once it
is established that the seaman died
during
the
effectivity
of
his
employment contract, the employer is

liable. In the present case, Ildefonso

died after he pre-terminated the
contract of employment. That alone
would have sufficed for his heirs not to
be entitled for death compensation
benefits. Furthermore, there is no
evidence to show that Ildefonso's
illness was acquired during the term of
his employment with petitioners.
Petition is GRANTED.

Maersk-Filipinas Crewing, Inc. v.

Avestruz GR 207010 Feb. 18, 2015
Facts: Toribio Avestruz was hired by
Maersk-Filipinas as Chief Cook on
board
the
vessel M/V
Nedlloyd
Drake for a period of six months. In
the course of Avestruzs work, he had
an argument with the ships captain,
Charles C. Woodward. This argument
resulted
in
Captain
Woodward
summoning and requiring Avestruz to
write a statement regarding the
incident. Captain Woodward likewise
asked Messman Jomilyn P. Kong to
submit his own written statement
regarding the incident. On the very
same day of the incident, Captain
Woodward informed Avestruz that he
would be dismissed from service. After
Avestruz return to the Philippines, he
filed a complaint for illegal dismissal,
payment for the unexpired portion of
his contract, damages, and attorneys
fees against Maersk. Maersk alleged
that Avestruz has been lawfully
dismissed due to insubordination.
Issue: Whether or not Avestruz is
illegally dismissed by his employee
Maersk due to insubordination.

Ruling: Yes.
Insubordination, as a just cause
for the dismissal of an employee,
necessitates the concurrence of at
least
two
requisites:
(1)
the
employees assailed conduct must
have
been
willful,
that
is,
characterized by a wrongful and
perverse attitude; and (2) the order
violated must have been reasonable,
lawful, made known to the employee,
and must pertain to the duties which
he had been engaged to discharge.
In this case, the contents of
Captain Woodwards e-mails do not
establish that Avestruzs conduct had
been willful, or characterized by a
wrongful and perverse attitude. The
Court
concurs
with
the
CAs
observation
that
Avestruzs
statement regarding the incident in
the galley deserves more credence,
being
corroborated by
Kong,
a
messman who witnessed the same.
Apart from Captain Woodwards emails,
no
other
evidence
was
presented by the petitioners to
support their claims. While rules of
evidence are not strictly observed in
proceedings
before
administrative
bodies, petitioners should have offered
additional proof to corroborate the
statements described therein.
It was incumbent upon the
petitioners
to
present
other
substantial evidence to bolster their
claim that Avestruz committed acts
that constitute insubordination as
would warrant his dismissal. At the
least, they could have offered in
evidence entries in the ships official

logbook showing the infractions or

acts of insubordination purportedly
committed by Avestruz, the ships
logbook being the official repository of
the
day-to-day
transactions
and
occurrences
on
board
the
vessel. Having failed to do so, their
position that Avestruz was lawfully
dismissed cannot be sustained.
The
Supreme
Court
also
affirmed the finding of the CA that
Avestruz was not accorded procedural
due
process,
there
being
no
compliance with the provisions of
Section 17 of the POEA-SEC which
requires the two-notice rule.

G.R. No. 196357 April 20, 2015

The Heirs of the late Delfin Dela
Cruz vs. Philippine Transmarine
Carriers
FACTS:
The late Delfin Dela Cruz was
contracted by Philippine Transmarine
carriers for the position of Oiler. He left
the Philippines and embarked on
August 17, 2000. While performing
regular duties,, he was hit by a metal
on his back. He requested medical
attention and was advised to be given
light duties. Upon the vessels arrival
at a convenient port on August 16,
2001, his contract expired and was
signed off from the vessel. He also
sought medical assistance but was not
extended such. Afterwards, he was not
employed because he was already
incapacitated to engage in his
customary work. On November 13,
2003, he went to De Los Santos
Medical Center and underwent X-Ray
and MRI of the Spine. He filed his

claim for sickness allowance but was

not granted. His condition deteriorated
and thereafter, he was admitted at St.
Lukes Medical Center where he was
diagnosed of MPNST, a malignant
peripheral nerve sheath tumor.
On December 4, 2003, he filed a
complaint before the NLRC, claiming a
payment for sickness allowance and
disability compensation in which it was
moved to dismiss by the Philippine
Transmarine carriers on the ground of
prescription, the claim having filed
beyond one year from the date of the
termination of the contract. On May 6,
2005 Delfin passed away.
ISSUES:
Whether the heirs of the late Delfin
Dela Cruz are entitled to permanent
disability
benefits
and
sickness
allowance.
HELD:
The 1996 POEA SEC concerning
disability
claims
and
sickness
allowance applies to the case where it
states on Section 20 (3) that upon sign
off for the purpose for medical
treatment, the seafarer shall submit
himself to a post-employment medical
examination within three working days
upon his return except when he is
physically incapacitated to do so, in
which case, a written notice to the
agency within the same period is
deemed as compliance. Furthermore,
failure to do such mandatory reporting
requirements shall result in his
forfeiture of the right to claim the
benefits. Unfortunately, the petitioners
failed to show the steps supposedly
undertaken by Delfin to comply with
the mandatory reporting requirement.
To the Courts mind, this lapse on

petitioners part only demonstrates

that Delfin did not comply with what
was incumbent upon him. The
reasonable conclusion is that at the
time of his repatriation, Delfin was not
suffering from any physical disability
requiring
immediate
medical
attendance.
Wherefore,
the
Petition
is
hereby DENIED.
Marcopper Mining Corporation vs
National
Labor
Relations
commission and National Mines
and Allied Workers Union G.R. No.
103525 March 29, 1996
Facts: Marcopper mining corporation
entered into a Collective Bargaining
Agreement with the National Mines
and Allied Workers Union effective
from May 1, 1984 until April 1987.
Before the expiration of the CBA, they
executed
a
memorandum
of
agreement modifying the CBA by
adding wage increase 5% of the basic
rate, to be effective May 1, 1987. On
June 1, 1987 Executive Order no. 178
was promulgated and it mandated the
integration of the cost of living
allowance into the basic wage of the
workers, its effectivity retroacts to May
1, 1987. Petitioner implemented it by
increasing first by 5% the basic rate
base on the CBA and then integrating
the cost of living allowance to the
basic wage, the respondents assailed
such manner of increase and argued
that cost of living allowance should
first be integrated before the 5%
increase of the CBA is computed.
Issue: Whether or not E.O. No. 178
should take effect before computing
the CBA increase?

Ruling: The Supreme Court ruled,

We rule for the respondents..
The principle that the CBA is the law
between
the
contracting
parties
stands strong and true. However, the
present controversy involves not
merely an interpretation of CBA
provisions.
More
importantly,
it
requires a determination of the effect
of an executive order on the terms and
the conditions of the CBA. This is, and
should be, the focus of the instant
case. It is unnecessary to delve too
much on the intention of the parties as
to what they allegedly meant by the
term "basic wage" at the time the CBA
and MOA were executed because
there is no question that as of 1 May
1987, as mandated by E.O. No. 178,
the basic wage of workers, or the
statutory
minimum
wage,
was
increased with the integration of the
COLA. As of said date, then, the term
"basic wage" includes the COLA. This
is what the law ordains and to which
the collective bargaining agreement of
the parties must conform.
Petitioner's arguments eventually lose
steam in the light of the fact that
compliance with the law is mandatory
and beyond contractual stipulation by
and
between
the
parties;
consequently,
whether
or
not
petitioner intended the basic wage to
include the COLA becomes immaterial.
There is evidently nothing to construe
and interpret because the law is clear
and unambiguous. Unfortunately for
petitioner, said law, by some uncanny
coincidence, retroactively took effect
on the same date the CBA increase
became effective. Therefore, there

cannot be any doubt that the

computation of the CBA increase on
the basis of the "integrated" wage
does not constitute a violation of the
CBA.
Finally, petitioner misinterprets the
declaration of the Labor Arbiter in the
assailed decision that "when the
pendulum of judgment swings to and
fro and the forces are equal on both
sides, the same must be stilled in
favor of labor." While petitioner
acknowledges that all doubts in the
interpretation of the Labor Code shall
be resolved in favor of labor, it insists
that what is involved here is the
amended CBA which is essentially a
contract between private persons.
What petitioner has lost sight of is the
avowed policy of the State, enshrined
in our Constitution, to accord utmost
protection and justice to labor, a
policy, we are, likewise, sworn to
uphold.
Philippine Airlines, Inc. (PAL) vs.
National
Labor
Relations
Commision, Labor Arbiter Isabel P.
Ortiguerra, and Philippine Airlines
Employees Association (PALEA),
G.R. No. 85985 (August 13, 1993)
Facts: In 1985, Philippine Airlines, Inc.
(PAL) completely revised its 1966 Code
of Discipline which was circulated
among the employees and was
immediately implemented. In effect,
some employees were subjected to
the disciplinary measures embodied
therein. On August, the same year, the
Philippine
Airlines
Employees
Association (PALEA) filed a complaint
before the National Labor Relations
Commission (NLRC) for unfair labor

practice, alleging that PAL violated

paragraphs E and G of Article 249 and
Article 253 of the Labor Code, because
the implementation of the Code of
Discipline
was
unilaterally
implemented without notice and prior
discussion with the Union. Also, some
provisions of the Code run counter to
the construction of penal laws and
making punishable any offense within
PALs contemplation. Lastly, PALEA
alleged that copies of the Code had
been circulated in limited numbers.
PAL, on the other had asserts its
prerogative as an employer to
prescribe
rules
and
regulations
regarding employees conduct in
carrying out their duties and functions,
and alleging that by implementing the
Code, it had not violated the collective
bargaining agreement or any provision
of the Labor Code. PAL maintained
that Article 253 cited by PALEA
referred to the requirement for
negotiating
a
CBA
which
was
inapplicable in this case.
The Labor Arbiter Isabel Ortiguerra
found that there was no bad faith on
the part of PAL in adopting the Code
and ruled that there was no unfair
labor practice. However, PAL was not
totally
fault
free.
Management
prerogative
must
meet
reasonableness,
propriety
and
fairness. Also, PAL failed to prove that
the new Code was amply circulated.
Thus, PAL was ordered to furnish all
employees with the new Code, to
reconsider the cases of employees
meted with penalties under the new
Code and discuss with PALEA the
objected provisions. NLRC affirms.

Issue/s: Whether the formulation of a

Code of Discipline among employees
is a shared responsibility of the
employer and the employees.
Ruling:The petition is DISMISSED and
the questioned decision AFFIRMED.
The exercise by management of its
prerogative shall be done in a just,
reasonable, humane and/or lawful
manner.

Petitioner's assertion that it needed

the implementation of a new Code of
Discipline considering the nature of its
business cannot be overemphasized.
Nonetheless, whatever disciplinary
measures are adopted cannot be
properly implemented in the absence
of full cooperation of the employees.
Such cooperation cannot be attained if
the employees are restive on account
of their being left out in the
determination
of
cardinal
and
fundamental matters affecting their
employment.