1

SURVEY OF RECENT CASES ON LABOR LAW

January 2012 Philippine Supree C!ur" #e$i%i!n% !n La&!r La' an( Pr!$e(ure
Here are selected January 2012 rulings of the Supreme Court of the Philippines on labor law
and procedure:
Certiorari; effect of receipt of award !he pre"ailing party#s receipt of the full amount of the
$udgment award pursuant to a writ of e%ecution issued by the labor arbiter does not close or
terminate the case if such receipt is &ualified as without pre$udice to the outcome of the petition
for certiorari pending with the Court of 'ppeals Timoteo H. Sarona vs. National Labor Relations
Commission, Royale Security Agency, et al., G.R. No. 1858!, "anuary 18, !11.
Constructi"e dismissal; change in position Constructi"e dismissal e%ists where there is
cessation of wor( because )continued employment is rendered impossible* unreasonable or
unli(ely* as an offer in"ol"ing a demotion in ran( or a diminution in pay+ and other benefits 'ptly
called a dismissal in disguise of an act amounting to dismissal but made to appear as if it were
not*constructi"e dismissal may* li(ewise* e%ist if an act of clear discrimination* insensibility* or
disdain by an employer becomes so unbearable on the part of the employee that it could
foreclose any choice by him e%cept to forego his continued employment,n cases of a transfer of
an employee* the rule is settled that the employer is charged with the burden of pro"ing that its
conduct and action are for "alid and legitimate grounds such as genuine business necessity and
that the transfer is not unreasonable* incon"enient or pre$udicial to the employee ,f the
employer cannot o"ercome this burden of proof* the employee#s transfer shall be tantamount to
unlawful constructi"e dismissal "onat#an $. %orales vs. Harbour Centre &ort Terminal, 'nc.,
G.R. No. 1()!8, "anuary 5, !11.
Contract; no"ation -o"ation is the e%tinguishment of an obligation by the substitution or change
of the obligation by a subse&uent one which e%tinguishes or modifies the first* either by
changing the ob$ect or principal conditions* or* by substituting another in place of the debtor* or
by subrogating a third person in the rights of the creditor ,n order for no"ation to ta(e place* the
concurrence of the following re&uisites is indispensable: .1/ !here must be a pre"ious "alid
obligation; .2/ !here must be an agreement of the parties concerned to a new contract; .0/
!here must be the e%tinguishment of the old contract; and .1/ !here must be the "alidity of the
new contract !he parties impliedly e%tinguished the first contract by agreeing to enter into the
second contract !he records also re"eal that the 2
nd
contract e%tinguished the first contract by
changing its ob$ect or principal !hese contracts were for o"erseas employment aboard different
"essels !he first contract was for employment aboard the 23 )Stolt 'spiration+ while the
second contract in"ol"ed wor(ing in another "essel* the 23 )Stolt Pride+ Petitioners and
2ade&uillo* Jr accepted the terms and conditions of the second contract 4ndoubtedly* he was
still employed under the first contract when he negotiated with petitioners on the second
contract Since 2ade&uillo was still employed under the first contract when he negotiated with
petitioners on the second contract* no"ation became an una"oidable conclusion Stolt*Nielsen
Trans+ortation Grou+, 'nc., et al. vs. Sul+ecio %o,e-uillo, G.R. No. 1(().8, "anuary 18, !11.
5mployee; money claims 6n the issue of how the seafarer will be compensated by reason of
the unreasonable non7deployment* the Supreme Court decreed the application of Section 10 of
8epublic 'ct -o 9012 .2igrant :or(ers 'ct/ which pro"ides for money claims by reason of a
contract in"ol"ing ;ilipino wor(ers for o"erseas deployment !he law pro"ides:
Sec 10 %oney Claims < -otwithstanding any pro"ision of law to the contrary* the =abor
'rbiters of the -ational =abor 8elations Commission .-=8C/ shall ha"e the original and
e%clusi"e $urisdiction to hear and decide* within ninety .>0/ calendar days after the filing of the
complaint* the claims arising out of an employer7employee relationship or by "irtue of any law or
contract in"ol"ing ;ilipino wor(ers for o"erseas deployment including claims for actual* moral*
e%emplary and other forms of damages % % % .4nderscoring supplied/
;ollowing the law* the claim is still cogni?able by the labor arbiters of the -=8C under the
second phrase of the pro"ision 'pplying the rules on actual damages* 'rticle 21>> of the -ew
Ci"il Code pro"ides that one is entitled to an ade&uate compensation only for such pecuniary
loss suffered by him as he has duly pro"ed Stolt*Nielsen Trans+ortation Grou+, 'nc., et al. vs.
Sul+ecio %o,e-uillo, G.R. No. 1(().8, "anuary 18, !11.
2
5mployee; pre"enti"e suspension; penalty of suspension Pre"enti"e suspension is a
disciplinary measure resorted to by the employer pending in"estigation of an alleged
malfeasance or misfeasance committed by an employee !he employer temporarily bars the
employee from wor(ing if his continued employment poses a serious and imminent threat to the
life or property of the employer or of his co7wor(ers 6n the other hand* the penalty of
suspension refers to the disciplinary action imposed on the employee after an official
in"estigation or administrati"e hearing is conducted !he employer e%ercises its right to
discipline erring employees pursuant to company rules and regulations ,n the present case*
Henry @elada filed a grie"ance against 2anila Pa"ilion Hotel .2PH/ ;ailing to reach a
settlement* @elada lodged a Complaint before the -ational Conciliation and 2ediation Aoard*
which was e"entually referred to a panel of "oluntary arbitrators .P3'/ 2eanwhile* citing
security and safety reasons* 2PH placed @elada on a 007day pre"enti"e suspension and
proceeded with the administrati"e case against him 2PH e"entually found @elada liable for
insubordination and willful disobedience of the transfer order and imposed upon him a penalty of
>07day suspension !he P3' ruled that there was no legal and factual basis to support 2PH#s
imposition of pre"enti"e suspension on @elada* and that the penalty of >07day suspension
imposed by 2PH against @elada went beyond the 007day period of pre"enti"e suspension
prescribed by the ,mplementing 8ules of the =abor Code P3' also ruled that 2PH lost its
authority to continue with the administrati"e proceedings for insubordination and willful
disobedience of the transfer order and to impose the penalty of >07day suspension on @elada
'ccording to the panel* it ac&uired e%clusi"e $urisdiction o"er the issue when the parties
submitted the aforementioned issues before it !he Supreme Court held that 2PH did not lose
its authority to discipline* and that 2PH had the authority to continue with the administrati"e
proceedings for insubordination and willful disobedience against @elada and to impose on him
the penalty of suspension %anila &avilion Hotel, etc. vs. Henry /ela,a, G.R. No. 18..)(,
"anuary 5, !11.
5mployee; release and &uitclaim :hile the law loo(s with disfa"or upon releases and
&uitclaims by employees who are in"eigled or pressured into signing them by unscrupulous
employers see(ing to e"ade their legal responsibilities* a legitimate wai"er representing a
"oluntary settlement of a laborer#s claims should be respected by the courts as the law between
the parties Considering the petitioner#s claim of fraud and bad faith against Philcomsat to be
unsubstantiated* the Supreme Court found the &uitclaim in dispute to be a legitimate wai"er
!he Court of 'ppeals and the -ational =abor 8elations Commission were unanimous in holding
that the petitioner "oluntarily e%ecuted the sub$ect &uitclaim !he Supreme Court is not a trier of
facts* and this doctrine applies with greater force in labor cases ;actual &uestions are for the
labor tribunals to resol"e and whether the petitioner "oluntarily e%ecuted the sub$ect &uitclaim is
a &uestion of fact ,n this case* the factual issues ha"e already been determined by the -ational
=abor 8elations Commission and its findings were affirmed by the Court of 'ppeals Judicial
re"iew by the Supreme Court does not e%tend to a ree"aluation of the sufficiency of the
e"idence upon which the proper labor tribunal has based its determination Hy+te R. Au0ero vs.
&#ili++ine Communications Satellite Cor+oration, G.R. No. 1.1)8), "anuary 18, !11.
5mployee benefit; holiday pay* ser"ice incenti"e lea"e pay and proportionate 10
th
month pay
4nder the =abor Code* the employee is entitled to his regular rate on holidays e"en if he does
not wor( =i(ewise* e%press pro"ision of the law entitles him to ser"ice incenti"e lea"e benefit if
he has rendered ser"ice for more than a year already ;urthermore* under Presidential @ecree
-o 9B1* the employee should be paid his 10
th
month pay !he employer has the burden of
pro"ing that it has paid these benefits to its employees Ab,ul"ua#i, R. &igcaulan vs. Security
an, Cre,it 'nvestigation, 'nc. an,2or Rene Amby Reyes, G.R. No. 1(13)8, "anuary 13, !11.
5mployee benefit; o"ertime pay ,n the absence of any concrete proof that additional ser"ice
beyond the normal wor(ing hours and days had been rendered* o"ertime pay cannot be
granted Handwritten itemi?ed computations are self7ser"ing* unreliable and unsubstantiated
e"idence to sustain the grant of salary differentials* particularly o"ertime pay 4nsigned and
unauthenticated as they are* there is no way of "erifying the truth of the handwritten entries
stated therein Ab,ul"ua#i, R. &igcaulan vs. Security an, Cre,it 'nvestigation, 'nc. an,2or Rene
Amby Reyes, G.R. No. 1(13)8, "anuary 13, !11.
5mployee benefit; permanent disability !he Supreme Court reiterated Remigio v. National
Labor Relations Commission, G.R. No. 15.88(, A+ril 1, !!3, which stated that: )!hus* the
Court has applied the =abor Code concept of permanent total disability to the case of seafarers
,n &#ili++ine Transmarine Carriers v. NLRC, G.R. No. 118.1, 4ebruary 8, !!1* seaman
Carlos -ietes was found to be suffering from congesti"e heart failure and cardiomyopathy and
was declared as unfit to wor( by the company7accredited physician !he Court affirmed the
0
award of disability benefits to the seaman* citing 5CC v. Sanico, G.R. No. 11)!8, /ecember
1(, 1...* GS'S v. CA, G.R. No. 11(5(, "anuary ., 1..8* GS'S v. CA, G.R. No. 113!15, "uly
11, 1..3 and 6e0erano v. 5CC, G. R. No. 8)(((, "anuary 1!, 1.., that )disability should not
be understood more on its medical significance but on the loss of earning capacity Permanent
total disability means disablement of an employee to earn wages in the same (ind of wor(* or
wor( of similar nature that CheD was trained for or accustomed to perform* or any (ind of wor(
which a person of ChisD mentality and attainment could do ,t does not mean absolute
helplessness+ ,t li(ewise cited 6e0erano to reiterate that in a disability compensation* it is not
the in$ury which is compensated* but rather it is the incapacity to wor( resulting in the
impairment of one#s earning capacity !he Court also cited the more recent case of Crystal
S#i++ing, 'nc. v. Nativi,a,, G.R. No. 15)(.8, 7ctober !, !!5, applying the same principles*
and GS'S v. Ca,i8, G.R. No. 1)5!.1, "uly 8, !!1* and '0ares v. CA, G.R. No. 1!585), August
3, 1...* which declared that )permanent disability is the inability of a wor(er to perform his $ob
for more than 120 days* regardless of whether or not he loses the use of any part of his body+
%agsaysay %aritime Cor+oration, et al. vs. 7berto S. Lobusta, G.R. No. 1((5(8, "anuary 5,
!11.
5mployee dismissal; due process -otice and hearing constitute the essential elements of due
process in the dismissal of employees !he employer must furnish the employee with two
written notices before termination of employment can be legally effected !he first apprises the
employee of the particular acts or omissions for which dismissal is sought !he second informs
the employee of the employer#s decision to dismiss him :ith regard to the re&uirement of a
hearing* the essence of due process lies simply in an opportunity to be heard* and not that an
actual hearing should always and indispensably be held !hese re&uirements were satisfied in
this case !he first re&uired notice was dated -o"ember 0* 2000* sufficiently notifying Eabut of
the particular acts being imputed against him* as well as the applicable law and the company
rules considered to ha"e been "iolated 6n -o"ember 1F* 2000* 2eralco conducted a hearing
on the charges against the petitioner where he was accorded the right to air his side and
present his defenses on the charges against him Significantly* a high7ran(ing officer of the
super"isory union of 2eralco assisted him during the said in"estigation His sworn statement
that forms part of the case records e"en listed the matters that were raised during the
in"estigation ;inally* 2eralco ser"ed a notice of dismissal dated ;ebruary 1* 2001 upon Eabut
Such notice notified the latter of the company#s decision to dismiss him from employment on the
grounds clearly discussed thereinNorman 9abut vs. %anila 5lectric Com+any an, %anuel %.
Lo+e8, G.R. No. 1.!)13, "anuary 13, !11.
5mployee dismissal; due process 5"en if there is a $ust or "alid cause for terminating an
employee* it is necessary to comply with the re&uirements of due process prior to the
termination Lolita S. Conce+cion vs. %ine: 'm+ort Cor+oration2%inerama Cor+oration, et al.,
G.R. No. 15153., "anuary ), !11.
5mployee dismissal; gross negligence; habitual neglect Gross negligence has been defined as
the )want of care in the performance of one#s duties+ and habitual neglect has been defined as
)repeated failure to perform one#s duties for a period of time* depending upon the
circumstances+ !hese are not o"erly technical terms* which* in the first place* are e%pressly
sanctioned by the =abor Code of the Philippines* to wit: '8! 292 Termination by em+loyer. <
'n employer may terminate an employment for any of the following causes: C%%%D.b/ Gross and
habitual neglect by the employee of his duties; C%%%D @iosdado Aitara was dismissed from
ser"ice due to habitual tardiness and absenteeism* and for ha"ing continued disregarding
attendance policies despite his underta(ing to report on time His wee(ly time record for the first
&uarter of the year 2000 re"ealed that he came late 1> times out of the 1F times he reported for
wor( He also incurred 1> absences out of the HH wor(ing days during the &uarter His
absences without prior notice and appro"al from 2arch 1171H* 2000 were considered to be the
most serious infraction of all because of its ad"erse effect on business operations !he
Supreme Court held that e"en in the absence of a written company rule defining gross and
habitual neglect of duties* Aitara#s omissions &ualify as such warranting his dismissal from the
ser"ice %ansion &rinting Center an, Clement C#eng vs. /ios,a,o 6itara, "r., G.R. No.
1381!, "anuary 5, !11.
5mployee dismissal; $ust cause; loss of confidence !o dismiss an employee* the law re&uires
the e%istence of a $ust and "alid cause 'rticle 292 of the Labor Co,e enumerates the 0ust
causes for termination by the employer: .a/ serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or the latter#s representati"e in connection with
the employee#s wor(; .b/ gross and habitual neglect by the employee of his duties; .c/ fraud or
willful breach by the employee of the trust reposed in him by his employer or his duly authori?ed
1
representati"e; .,/ commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authori?ed representati"e; and .e/
other causes analogous to the foregoing
,t is unfair to re&uire an employer to first be morally certain of the guilt of the employee by
awaiting a con"iction before terminating him when there is already sufficient showing of the
wrongdoing 8e&uiring that certainty may pro"e too late for the employer* whose loss may
potentially be beyond repair ,n the present case* no less than the @6J Secretary found
probable cause for &ualified theft against Concepcion !hat finding was enough to $ustify her
termination for loss of confidence Lolita S. Conce+cion vs. %ine: 'm+ort Cor+oration2%inerama
Cor+oration, et al., G.R. No. 15153., "anuary ), !11.
5mployee dismissal; loss of trust and confidence ;or loss of trust and confidence to be a "alid
ground for dismissal* it must be based on a willful breach of trust and founded on clearly
established facts ' breach is willful if it is done intentionally* (nowingly and purposely* without
$ustifiable e%cuse* as distinguished from an act done carelessly* thoughtlessly* heedlessly or
inad"ertently ,n addition* loss of trust and confidence must rest on substantial grounds and not
on the employer#s arbitrariness* whims* caprices or suspicion %anila 5lectric Com+any
;%eralco< vs. %a. Luisa 6eltran, G.R. No. 1(1((), "anuary 1!, !11.
5mployee dismissal; misconduct 'rticle 292.a/ pro"ides that an employer may terminate an
employment because of an employee#s serious misconduct* a cause that was present in this
case in "iew of the petitioner#s "iolation of his employer#s code of conduct 2isconduct is
defined as the )transgression of some established and definite rule of action* a forbidden act* a
dereliction of duty* willful in character* and implies wrongful intent and not mere error in
$udgment+ ;or serious misconduct to $ustify dismissal* the following re&uisites must be present:
.a/ it must be serious; .b/ it must relate to the performance of the employee#s duties; and .c/ it
must show that the employee has become unfit to continue wor(ing for the employer
,nstallation of shunting wires is without doubt a serious wrong as it demonstrates an act that is
willful or deliberate* pursued solely to wrongfully obtain electric power through unlawful means
!he act clearly relates to the petitioner#s performance of his duties gi"en his position as branch
field representati"e who is e&uipped with (nowledge on meter operations* and who has the duty
to test electric meters and handle customers# "iolations of contract ,nstead of protecting the
company#s interest* the petitioner himself used his (nowledge to illegally obtain electric power
from 2eralco His in"ol"ement in this incident deems him no longer fit to continue performing his
functions for respondent7company Norman 9abut vs. %anila 5lectric Com+any an, %anuel %.
Lo+e8, G.R. No. 1.!)13, "anuary 13, !11.
5mployer7employee relationship; commencement !he P65' Standard 5mployment Contract
pro"ides that employment shall commence )upon the actual departure of the seafarer from the
airport or seaport in the port of hire+ @istinction must be made between the perfection of the
employment contract and the commencement of the employer7employee relationship !he
perfection of the contract* which in this case coincided with the date of e%ecution thereof*
occurred when petitioner and respondent agreed on the ob$ect and the cause* as well as the
rest of the terms and conditions therein !he commencement of the employer7employee
relationship would ha"e ta(en place had petitioner been actually deployed from the point of hire
Stolt*Nielsen Trans+ortation Grou+, 'nc., et al. vs. Sul+ecio %o,e-uillo, G.R. No. 1(().8,
"anuary 18, !11.
Judgment; finality !he petition was brought only on behalf of Pigcaulan !he C' @ecision has
already become final and e%ecutory as to Canoy since he did not appeal from it Canoy cannot
now simply incorporate in his affida"it a "erification of the contents and allegations of the
petition as he is not one of the petitioners therein Ab,ul"ua#i, R. &igcaulan vs. Security an,
Cre,it 'nvestigation, 'nc. an,2or Rene Amby Reyes, G.R. No. 1(13)8, "anuary 13, !11.
Judgment; res $udicata !he doctrine of res 0u,icata lays down two main rules which may be
stated as follows: .1/ !he $udgment or decree of a court of competent $urisdiction on the merits
concludes the parties and their pri"ies to the litigation and constitutes a bar to a new action or
suit in"ol"ing the same cause of action either before the same or any other tribunal; and .2/ 'ny
right* fact* or matter in issue directly ad$udicated or necessarily in"ol"ed in the determination of
an action before a competent court in which a $udgment or decree is rendered on the merits is
conclusi"ely settled by the $udgment therein and cannot again be litigated between the parties
and their pri"ies whether the claim or demand* purpose* or sub$ect matter of the two suits is the
same or not !hese two main rules mar( the distinction between the principles go"erning the
two typical cases in which a $udgment may operate as e"idence ,n spea(ing of these cases* the
B
first general rule* and which corresponds to paragraph .b/ of Section 1F of 8ule 0> of the 8ules
of Court is referred to as )bar by former $udgment+ while the second general rule* which is
embodied in paragraph .c/ of the same section* is (nown as )conclusi"eness of $udgment+ !he
present labor case is closely related to the ci"il case that was decided with finality !he acts and
omissions alleged by the Aan( in the ci"il case as basis of its counterclaim against 2auricio are
the "ery same acts and omissions which were used as grounds to terminate his employment
Considering that it has already been conclusi"ely determined with finality in the ci"il case that
the &uestioned acts of 2auricio were well within his discretion as branch manager and
appro"ing officer of the Aan(* and the same were sanctioned by the Head 6ffice* the Supreme
Court found that the Court of 'ppeals did not err in holding that there was no "alid or $ust cause
for the Aan( to terminate 2auricio#s employment &ru,ential 6an= ;no> 6an= o? t#e &#ili++ine
'slan,s< vs. Antonio S.A. %auricio, substitute, by #is legal #eirs %aria 4e, $oltaire, Antonio, "r.,
Antonio, 5arl "o#n, an, 4rancisco Roberto all surname, %auricio, G.R. No. 18115!, "anuary
18, !11.
Jurisdiction; "oluntary arbitrators ,n Sime /arby &ili+inas, 'nc. v. /e+uty A,ministrator
%agsalin, G.R. No. .!)3, /ecember 15, 1.8.* the Supreme Court ruled that the "oluntary
arbitrator had plenary $urisdiction and authority to interpret the agreement to arbitrate and to
determine the scope of his own authority < sub$ect only* in a proper case* to the certiorari
$urisdiction of this Court ,t was also held in that case that the failure of the parties to specifically
limit the issues to that which was stated allowed the arbitrator to assume $urisdiction o"er the
related issue ,n Lu,o @ Luym Cor+oration v. Saorni,o, G.R. No. 1)!.3!, "anuary !, !!1* the
Supreme Court recogni?ed that "oluntary arbitrators are generally e%pected to decide only
those &uestions e%pressly delineated by the submission agreement; that* ne"ertheless* they can
assume that they ha"e the necessary power to ma(e a final settlement on the related issues*
since arbitration is the final resort for the ad$udication of disputes !hus* the Supreme Court
ruled that e"en if the specific issue brought before the arbitrators merely mentioned the &uestion
of )whether an employee was discharged for $ust cause*+ they could reasonably assume that
their powers e%tended beyond the determination thereof to include the power to reinstate the
employee or to grant bac( wages ,n the same "ein* if the specific issue brought before the
arbitrators referred to the date of regulari?ation of the employee* law and $urisprudence ga"e
them enough leeway as well as ade&uate prerogati"e to determine the entitlement of the
employees to higher benefits in accordance with the finding of regulari?ation ,ndeed* to re&uire
the parties to file another action for payment of those benefits would certainly undermine labor
proceedings and contra"ene the constitutional mandate pro"iding full protection to labor and
speedy labor $ustice %anila &avilion Hotel, etc. vs. Henry /ela,a, G.R. No. 18..)(, "anuary
5, !11.
Procedural rules; liberal application; when wai"ed Procedural rules may be wai"ed or
dispensed with in absolutely meritorious cases !he Supreme Court* in past cases* has adhered
to the strict implementation of the rules and considered them in"iolable when it is shown that the
patent lac( of merit of the appeals render liberal interpretation pointless and naught !he
contrary obtains in this case as Philcomsat#s case is not entirely unmeritorious Specifically*
Philcomsat alleged that the petitioner#s e%ecution of the sub$ect &uitclaim was "oluntary despite
his claim that he did not do so Philcomsat li(ewise argued that the petitioner#s educational
attainment and the position he occupied in Philcomsat#s hierarchy militate against his claim that
he was pressured or coerced into signing the &uitclaim !he emerging trend in our $urisprudence
is to afford e"ery party7litigant the amplest opportunity for the proper and $ust determination of
his cause free from the constraints of technicalities ;ar from ha"ing gra"ely abused its
discretion* the -=8C correctly prioriti?ed substantial $ustice o"er the rigid and stringent
application of procedural rules ,n the present case* the Supreme Court held that the C' was
correct in not finding gra"e abuse of discretion in the -=8C#s decision to gi"e due course to
Philcomsat#s appeal despite its being belatedly filed Hy+te R. Au0ero vs. &#ili++ine
Communications Satellite Cor+oration, G.R. No. 1.1)8), "anuary 18, !11.
Public officers; reassignment; constructi"e dismissal :hile a temporary transfer or assignment
of personnel is permissible e"en without the employee#s prior consent* it cannot be done when
the transfer is a preliminary step toward his remo"al* or a scheme to lure him away from his
permanent position* or when it is designed to indirectly terminate his ser"ice* or force his
resignation Such a transfer would in effect circum"ent the pro"ision which safeguards the
tenure of office of those who are in the Ci"il Ser"ice Significantly* Section H* 8ule ,,, of CSC
2emorandum Circular -o 10* series of 1>>9* defines constructi"e dismissal as a situation
when an employee &uits his wor( because of the agency head#s unreasonable* humiliating* or
demeaning actuations which render continued wor( impossible Hence* the employee is
deemed to ha"e been illegally dismissed !his may occur although there is no diminution or
H
reduction of salary of the employee ,t may be a transfer from one position of dignity to a more
ser"ile or menial $ob Re+ublic o? t#e &#il., re+resente, by t#e Civil Service Commission vs.
%inerva %.&. &ac#eco, G.R. No. 1(8!1, "anuary 11, !11.
8einstatement; not possible; bac(wages ,n case separation pay is awarded and reinstatement
is no longer feasible* bac(wages shall be computed from the time of illegal dismissal up to the
finality of the decision should separation pay not be paid in the meantime ,t is the employee#s
actual receipt of the full amount of his separation pay that will effecti"ely terminate the
employment of an illegally dismissed employee 6therwise* the employer7employee relationship
subsists and the illegally dismissed employee is entitled to bac(wages* ta(ing into account the
increases and other benefits* including the 10th month pay* that were recei"ed by his co7
employees who are not dismissed ,t is the obligation of the employer to pay an illegally
dismissed employee or wor(er the whole amount of the salaries or wages* plus all other benefits
and bonuses and general increases* to which he would ha"e been normally entitled had he not
been dismissed and had not stopped wor(ing Timoteo H. Sarona vs. National Labor Relations
Commission, Royale Security Agency, et al., G.R. No. 1858!, "anuary 18, !11.
8eorgani?ation; management prerogati"e 'dmittedly* the right of employees to security of
tenure does not gi"e them "ested rights to their positions to the e%tent of depri"ing management
of its prerogati"e to change their assignments or to transfer them Ay management prerogati"e
is meant the right of an employer to regulate all aspects of employment* such as the freedom to
prescribe wor( assignments* wor(ing methods* processes to be followed* regulation regarding
transfer of employees* super"ision of their wor(* lay7off and discipline* and dismissal and recall
of wor(ers 'lthough $urisprudence recogni?es said management prerogati"e* it has been ruled
that the e%ercise thereof* while ordinarily not interfered with* is not absolute and is sub$ect to
limitations imposed by law* collecti"e bargaining agreement* and general principles of fair play
and $ustice !hus* an employer may transfer or assign employees from one office or area of
operation to another* pro"ided there is no demotion in ran( or diminution of salary* benefits* and
other pri"ileges* and the action is not moti"ated by discrimination* made in bad faith* or effected
as a form of punishment or demotion without sufficient cause ,ndeed* ha"ing the right should
not be confused with the manner in which that right is e%ercised Jonathan 3 2orales was hired
by Harbour Centre Port !erminal* ,nc .HCP!,/ as an 'ccountant and 'cting ;inance 6fficer*
with a monthly salary of P19*00000 8egulari?ed on -o"ember 1F* 2000* 2orales was
promoted to @i"ision 2anager of the 'ccounting @epartment* for which he was compensated a
monthly salary of P00*F0000* plus allowances starting July 1* 2002 Subse&uent to HCP!,#s
transfer to its new offices at 3itas* !ondo* 2anila on January 2* 2000* 2orales recei"ed an inter7
office memorandum dated 2arch 2F* 2000* reassigning him to 6perations Cost 'ccounting*
tas(ed with the duty of )monitoring and e"aluating all consumables re&uests* gears and
e&uipment+ related to the corporation#s operations and of interacting with its sub7contractor* Aul(
;leet 2arine Corporation !he memorandum was issued by HCP!,#s new 'dministration
2anager* duly noted by its new 3ice President for 'dministration and ;inance* and appro"ed by
its President and Chief 5%ecuti"e 6fficer 2orales protested that his reassignment was a clear
demotion since the position to which he was transferred was not e"en included in HCP!,#s
plantilla ,n response to 2orales# grie"ance that he had been effecti"ely placed on floating
status* an inter7office memorandum was issued on 'pril 1* 2000 to the effect that )transfer of
employees is a management prerogati"e+ and that HCP!, had )the right and responsibility to
find the perfect balance between the s(ills and abilities of employees to the needs of the
business+ Howe"er* the Supreme Court found that HCP!, did not e"en bother to show that it
had implemented a corporate reorgani?ation andIor appro"ed a new plantilla of positions which
included the one to which 2orales was being transferred !hus* the Court reinstated the -=8C#s
July 2>* 200B @ecision which found 2orales# reassignment to be a clear demotion despite lac(
of showing of diminution of salaries and benefits "onat#an $. %orales vs. Harbour Centre &ort
Terminal, 'nc., G.R. No. 1()!8, "anuary 5, !11.
8ule 1B; &uestion of law 's a general rule* the Supreme Court is not a trier of facts and a
petition for re"iew on certiorari under 8ule 1B of the 8ules of Court must e%clusi"ely raise
&uestions of law 2oreo"er* if factual findings of the -ational =abor 8elations Commission and
the =abor 'rbiter ha"e been affirmed by the Court of 'ppeals* the Supreme Court accords them
the respect and finality they deser"e ,t is well7settled and oft7repeated that findings of fact of
administrati"e agencies and &uasi7$udicial bodies* which ha"e ac&uired e%pertise because their
$urisdiction is confined to specific matters* are generally accorded not only respect* but finality
when affirmed by the Court of 'ppeals-e"ertheless* the Supreme Court will not hesitate to
de"iate from what are clearly procedural guidelines and disturb and stri(e down the findings of
the Court of 'ppeals and those of the labor tribunals if there is a showing that they are
unsupported by the e"idence on record or there was a patent misappreciation of facts ,ndeed*
F
that the impugned decision of the Court of 'ppeals is consistent with the findings of the labor
tribunals does not +er se conclusi"ely demonstrate the correctness thereof Ay way of e%ception
to the general rule* the Supreme Court will scrutini?e the facts if only to rectify the pre$udice and
in$ustice resulting from an incorrect assessment of the e"idence presented Timoteo H. Sarona
vs. National Labor Relations Commission, Royale Security Agency, et al., G.R. No. 1858!,
"anuary 18, !11.
Fe&ruary 2012 Philippine Supree C!ur" #e$i%i!n% !n La&!r La' an( Pr!$e(ure
Here are select ;ebruary 2012 rulings of the Supreme Court on labor law and procedure:
'ppeal; factual finding of -=8C ;indings of fact of administrati"e agencies and &uasi7$udicial
bodies* which ha"e ac&uired e%pertise because their $urisdiction is confined to specific matters*
are generally accorded not only respect but finality when affirmed by the Court of 'ppeals
;actual findings of &uasi7$udicial bodies li(e the -=8C* if supported by substantial e"idence* are
accorded respect and e"en finality by the Supreme Court* more so when they coincide with
those of the =abor 'rbiter Such factual findings are gi"en more weight when the same are
affirmed by the Court of 'ppeals ,n the present case* the Supreme Court found no reason to
depart from these principles since the =abor 'rbiter found that there was substantial e"idence to
conclude that 6asay had breached the trust and confidence of Palacio @el Gobernador
Condominium Corporation* which finding the -=8C had li(ewise upheld Sebastian 4. 7asay,
"r. vs. &alacio ,el Goberna,or Con,ominium Cor+oration an, 7mar T. Cru8, G.R. No. 1.)1!3,
4ebruary 3, !1.
Ci"il Ser"ice; Clar( @e"elopment Corporation Clar( @e"elopment Corporation .C@C/ owes its
e%istence to 5%ecuti"e 6rder -o 90 issued by then President ;idel 3 8amos ,t was meant to
be the implementing and operating arm of the Aases Con"ersion and @e"elopment 'uthority
tas(ed to manage the Clar( Special 5conomic Jone 5%pressly* C@C was formed in
accordance with Philippine corporation laws and e%isting rules and regulations promulgated by
the Securities and 5%change Commission pursuant to Section 1H of 8epublic 'ct F22F C@C* a
go"ernment owned or controlled corporation without an original charter* was incorporated under
the Corporation Code Pursuant to 'rticle ,K7A* Sec 2.1/ of the Constitution* the ci"il ser"ice
embraces only those go"ernment owned or controlled corporations with original charter 's
such* C@C and its employees are co"ered by the =abor Code and not by the Ci"il Ser"ice =aw
Antonio 6. Salenga, et al. vs. Court o? A++eals, et al., G.R. No. 1().)1, 4ebruary 1, !1 .
@ismissal; resignation "s illegal dismissal; tele% is not e&ui"alent to tender of resignation 'rticle
29B of the =abor Code recogni?es termination by the employee of the employment contract by
)ser"ing written notice on the employer at least one .1/ month in ad"ance+ Gi"en that pro"ision*
the law contemplates the re&uirement of a written notice of resignation ,n the absence of a
written resignation* it is safe to presume that the employer terminated the seafarers ,n this
case* the Supreme Court found the dismissal of @e Gracia* et al to be illegal since Cosmoship
merely sent a tele% to S(ippers* the local manning agency* claiming that @e Gracia* et al were
repatriated because the latter "oluntarily pre7terminated their contracts S=i++ers Anite, &aci?ic,
'nc. an, S=i++ers %aritime Services, 'nc. Lt,. vs. Nat#aniel /o8a, et al., G.R. No.
1(5558. 4ebruary 8, !1 .
@ismissal; substanti"e and procedural due process ;or a wor(er#s dismissal to be considered
"alid* it must comply with both procedural and substanti"e due process !he legality of the
manner of dismissal constitutes procedural due process* while the legality of the act of dismissal
constitutes substanti"e due process Procedural due process in dismissal cases consists of the
twin re&uirements of notice and hearing !he employer must furnish the employee with two
written notices before the termination of employment can be effected: .1/ the first notice
apprises the employee of the particular acts or omissions for which his dismissal is sought; and
.2/ the second notice informs the employee of the employer#s decision to dismiss him Aefore
the issuance of the second notice* the re&uirement of a hearing must be complied with by gi"ing
the wor(er an opportunity to be heard ,t is not necessary that an actual hearing be conducted
Substanti"e due process* on the other hand* re&uires that dismissal by the employer be made
based on a $ust or authori?ed cause under 'rticles 292 to 291 of the =abor Code ,n this case*
there was no written notice furnished to @e Gracia* et al regarding the cause of their dismissal
Cosmoship furnished a tele% to S(ippers* the local manning agency* claiming that @e Gracia* et
al were repatriated because they "oluntarily pre7terminated their contracts !his tele% was gi"en
credibility and weight by the =abor 'rbiter and -=8C in deciding that there was pre7termination
of the employment contract )a(in to resignation+ and no illegal dismissal Howe"er* as correctly
ruled by the C'* the tele% message is )a biased and self7ser"ing document that does not satisfy
9
the re&uirement of substantial e"idence+ ,f* indeed* @e Gracia* et al "oluntarily pre7terminated
their contracts* then @e Gracia* et al should ha"e submitted their written resignations S=i++ers
Anite, &aci?ic, 'nc. an, S=i++ers %aritime Services, 'nc. Lt,. vs. Nat#aniel /o8a, et al., G.R.
No. 1(5558. 4ebruary 8, !1 .
5mployee benefits; right to bonus; diminution ;rom a legal point of "iew* a bonus is a gratuity
or act of liberality of the gi"er which the recipient cannot demand as a matter of right !he grant
of a bonus is basically a management prerogati"e which cannot be forced upon the employer
who may not be obliged to assume the onerous burden of granting bonuses Howe"er* a bonus
becomes a demandable or enforceable obligation if the additional compensation is granted
without any conditions imposed for its payment ,n such case* the bonus is treated as part of the
wage* salary or compensation of the employee Particularly instructi"e is the ruling of the Court
in %etro Transit 7rgani8ation, 'nc. v. National Labor Relations Commission .G8 -o 11H009*
July 11* 1>>B/ where the Court said:
:hether or not a bonus forms part of wages depends upon the circumstances and conditions
for its payment ,f it is additional compensation which the employer promised and agreed to gi"e
without any conditions imposed for its payment* such as success of business or greater
production or output* then it is part of the wage Aut if it is paid only if profits are reali?ed or if a
certain le"el of producti"ity is achie"ed* it cannot be considered part of the wage :here it is not
payable to all but only to some employees and only when their labor becomes more efficient or
more producti"e* it is only an inducement for efficiency* a pri?e therefore* not a part of the wage
,n this case* there is no dispute that 5astern !elecommunications Phils* ,nc and 5astern
!elecoms 5mployees 4nion agreed on the inclusion of a pro"ision for the grant of 11th*
1Bth and 1Hth month bonuses in the 1>>972001 CA' Side 'greement* as well as in their 20017
2001 CA' Side 'greement* which contained no &ualification for its payment !here were no
conditions specified in the CA' Side 'greements for the grant of the bonus !here was nothing
in the rele"ant pro"isions of the CA' which made the grant of the bonus dependent on the
company#s financial standing or contingent upon the reali?ation of profits !here was also no
statement that if the company deri"es no profits* no bonus will be gi"en to the employees ,n
fine* the payment of these bonuses was not related to the profitability of business operations
Conse&uently* the gi"ing of the sub$ect bonuses cannot be peremptorily withdrawn by 5astern
!elecommunications Phils* ,nc without "iolating 'rticle 100 of the =abor Code* which prohibits
the unilateral elimination or diminution of benefits by the employer !he rule is settled that any
benefit and supplement being en$oyed by the employees cannot be reduced* diminished*
discontinued or eliminated by the employer !he principle of non7diminution of benefits is
founded on the constitutional mandate to protect the rights of wor(ers and to promote their
welfare and to afford labor full protection 5astern Telecommunications &#ili++ines, 'nc. vs.
5astern Telecoms 5m+loyees Anion, G.R. No. 185335, 4ebruary 8, !1.
5mployee dismissal; constructi"e dismissal ,n constructi"e dismissal cases* the employer has
the burden of pro"ing that the transfer of an employee is for $ust or "alid ground* such as
genuine business necessity !he employer must demonstrate that the transfer is not
unreasonable* incon"enient* or pre$udicial to the employee and that the transfer does not
in"ol"e a demotion in ran( or a diminution in salary and other benefits ),f the employer fails to
o"ercome this burden of proof* the employee#s transfer is tantamount to unlawful constructi"e
dismissal+ C2erc( Sharp and @ohme .Philippines/ " 8obles* G8 -o 1FHB0H* -o"ember 2B*
200>D Petitioners failed to satisfy the burden of pro"ing that the transfer was based on $ust or
"alid ground Petitioners# bare assertions of imminent threat from the respondents are mere
accusations which are not substantiated by any proof !he Supreme Court agreed with the
Court of 'ppeals in ruling that the transfer of respondents amounted to a demotion "ulieBs
6a=es#o+ an,2or 5,gar Reyes vs. Henry Arnai8, et al., G.R. No. 1(188, 4ebruary 15, !1.
5mployee dismissal; disease; dereliction of duties :ith regard to disease as a ground for
termination* 'rticle 291 of the =abor Code pro"ides that an employer may terminate the ser"ices
of an employee who has been found to be suffering from any disease and whose continued
employment is prohibited by law or is pre$udicial to his health* as well as to the health of his co7
employees ,n order to "alidly terminate employment on this ground* Section 9* 8ule ,* Aoo( 3,
of the 6mnibus 8ules ,mplementing the =abor Code re&uires that: .i/ the employee be suffering
from a disease and his continued employment is prohibited by law or pre$udicial to his health or
to the health of his co7employees* and .ii/ a certification by a competent public health authority
that the disease is of such nature or at such a stage that it cannot be cured within a period of si%
.H/ months e"en with proper medical treatment ,f the disease or ailment can be cured within the
period* the employer shall not terminate the employee but shall as( the employee to ta(e a
>
lea"e !he employer shall reinstate such employee to his former position immediately upon the
restoration of his normal health ,n Tri+le 5ig#t 'ntegrate, Services, 'nc. v. NLRC ;G.R. -o
12>B91* @ecember 0* 1>>9<, the Court held that the re&uirement for a medical certificate under
'rticle 291 of the =abor Code cannot be dispensed with; otherwise* it would sanction the
unilateral and arbitrary determination by the employer of the gra"ity or e%tent of the employee#s
illness and* thus* defeat the public policy on the protection of labor
,n this case* Enson should ha"e reported bac( to wor( or attended the in"estigations conducted
by :uerth Philippines* ,nc immediately upon being permitted to wor( by his doctors* (nowing
that his position remained "acant for a considerable length of time Howe"er* he did not e"en
show any sincere effort to return to wor( Clearly* since there is no more hindrance for him to
return to wor( and attend the in"estigations set by :uerth Philippines* ,nc* Enson#s failure to do
so was without any "alid or $ustifiable reason His conduct shows his indifference and utter
disregard of his wor( and his employer#s interest* and displays his clear* deliberate* and gross
dereliction of duties !he power to dismiss an employee is a recogni?ed prerogati"e inherent in
the employer#s right to freely manage and regulate his business !he law* in protecting the
rights of the laborers* authori?es neither oppression nor self7destruction of the employer !he
wor(er#s right to security of tenure is not an absolute right* for the law pro"ides that he may be
dismissed for cause 's a general rule* employers are allowed wide latitude of discretion in
terminating the employment of managerial personnel !he mere e%istence of a basis for
belie"ing that such employee has breached the trust and confidence of his employer would
suffice for his dismissal -eedless to say* an irresponsible employee li(e Enson does not
deser"e a position in the wor(place* and it is :uerth Philippines* ,nc#s management prerogati"e
to terminate his employment !o be sure* an employer cannot be compelled to continue with the
employment of wor(ers when continued employment will pro"e inimical to the employer#s
interest Cuert# &#ili++ines, 'nc. vs. Ro,ante 9nson, G.R. No. 1(5.1, 4ebruary 15, !1.
5mployee dismissal; due process :ith respect to due process re&uirement* the employer is
bound to furnish the employee concerned with two .2/ written notices before termination of
employment can be legally effected 6ne is the notice apprising the employee of the particular
acts or omissions for which his dismissal is sought and this may loosely be considered as the
proper charge !he other is the notice informing the employee of the management#s decision to
se"er his employment !his decision* howe"er* must come only after the employee is gi"en a
reasonable period from receipt of the first notice within which to answer the charge* thereby
gi"ing him ample opportunity to be heard and defend himself with the assistance of his
representati"e should he so desire !he re&uirement of notice* it has been stressed* is not a
mere technicality but a re&uirement of due process to which e"ery employee is entitled Here*
Palacio @el Gobernador Condominium Corporation complied with the )two7notice rule+ stated
abo"e Sebastian 4. 7asay, "r. vs. &alacio ,el Goberna,or Con,ominium Cor+oration an,
7mar T. Cru8, G.R. No. 1.)1!3, 4ebruary 3, !1.
5mployee dismissal; due process Cityland did not afford Galang the re&uired notice before he
was dismissed 's the Court of 'ppeals noted* the in"estigation conference !upas called to
loo( into the $anitors# complaints against Galang did not constitute the written notice re&uired by
law as he had no clear idea what the charges against him were Romeo A. Galang vs. Citilan,
S#a> To>er, 'nc. an, $irgilio 6al,emor, G.R. No. 1(1.1, 4ebruary 8, !1.
5mployee dismissal; grounds !he "alidity of an employee#s dismissal from ser"ice hinges on
the satisfaction of the two substanti"e re&uirements for a lawful termination !hese are* first*
whether the employee was accorded due process the basic components of which are the
opportunity to be heard and to defend himself !his is the procedural aspect 'nd second*
whether the dismissal is for any of the causes pro"ided in the =abor Code of the Philippines
!his constitutes the substanti"e aspect 6n the substanti"e aspect* the Supreme Court found
that Palacio @el Gobernador Condominium Corporation#s termination of the 6asay#s
employment was for a cause pro"ided under the =abor Code ,n terminating 6asay#s
employment* Palacio @el Gobernador Condominium Corporation in"o(ed loss of trust and
confidence !he first re&uisite for dismissal on the ground of loss of trust and confidence is that
the employee concerned must be holding a position of trust and confidence Here* it is
indubitable that 6asay holds a position of trust and confidence !he position of Auilding
'dministrator* being managerial in nature* necessarily en$oys the trust and confidence of the
employer !he second re&uisite is that there must be an act that would $ustify the loss of trust
and confidence =oss of trust and confidence* to be a "alid cause for dismissal* must be based
on a willful breach of trust and founded on clearly established facts Palacio @el Gobernador
Condominium Corporation had established* by clear and con"incing e"idence* 6asay#s acts
which $ustified its loss of trust and confidence on the former Sebastian 4. 7asay, "r. vs. &alacio
10
,el Goberna,or Con,ominium Cor+oration an, 7mar T. Cru8, G.R. No. 1.)1!3, 4ebruary 3,
!1.
5mployee dismissal; $ust cause !he Supreme Court found that Galang had become unfit to
continue his employment !he e"idence supports the "iew that he continued to e%hibit
undesirable traits as an employee and as a person* in relation to both his co7wor(ers and his
superiors* particularly !upas* her immediate super"isor Luoting the Court of 'ppeals# decision
with appro"al* the Supreme Court held: ):ithout offering any possible ill moti"e that might ha"e
impelled Cthe respondentsD to summarily dismiss CGalangD* who admitted ha"ing been absorbed
by the former as $anitor upon the termination of his contract with his agency* this Court is more
inclined to gi"e credence to the e"idence pointing to the conclusion that CGalang#sD employment
was actually se"ered for a $ust cause+ Romeo A. Galang vs. Citilan, S#a> To>er, 'nc. an,
$irgilio 6al,emor, G.R. No. 1(1.1, 4ebruary 8, !1.
5mployer; right to discipline employee ,n Sagales " 8ustan#s Commercial Corporation .G8
-o 1HHBB1* -o"ember 2F* 2009/* the Supreme Court ruled:
!ruly* while the employer has the inherent right to discipline* including that of dismissing its
employees* this prerogati"e is sub$ect to the regulation by the State in the e%ercise of its police
power
,n this regard* it is a hornboo( doctrine that in)ra$"i!n% $!i""e( &y an epl!yee %h!ul(
eri" !nly "he $!rre%p!n(in* penal"y (ean(e( &y "he $ir$u%"an$e+ The penal"y u%"
&e $!en%ura"e 'i"h "he a$", $!n(u$" !r !i%%i!n ipu"e( "! "he epl!yee an( u%"
&e ip!%e( in $!nne$"i!n 'i"h "he (i%$iplinary au"h!ri"y !) "he epl!yer+ .5mphasis in the
original/
,n the case at bar* the penalty handed out by the petitioners was the ultimate penalty of
dismissal !here was no warning or admonition for respondent#s "iolation of team rules* only
outright termination of his ser"ices for an act which could ha"e been punished appropriately with
a se"ere reprimand or suspension Negros Slas#ers, 'nc., Ro,ol?o C. Alvare8 an, $icente Tan
vs. Alvin L. Teng, G.R. No. 18(1, 4ebruary , !1.
5mployer7employee relationship; onus probandi !he onus +roban,i falls on petitioner to
establish or substantiate such claim by the re&uisite &uantum of e"idence !he issue of Ja"ier#s
alleged illegal dismissal is anchored on the e%istence of an employer7employee relationship
between him and ;ly 'ce 's the records bear out* the =abor 'rbiter and the Court of 'ppeals
found Ja"ier#s claim of employment with ;ly 'ce as wanting and deficient 'lthough Section 10*
8ule 3,, of the -ew 8ules of Procedure of the -=8C allows a rela%ation of the rules of
procedure and e"idence in labor cases* this rule of liberality does not mean a complete
dispensation of proof =abor officials are en$oined to use reasonable means to ascertain the
facts speedily and ob$ecti"ely with little regard to technicalities or formalities but nowhere in the
rules are they pro"ided a license to completely discount e"idence* or the lac( of it !he &uantum
of proof re&uired* howe"er* must still be satisfied Hence* )when confronted with conflicting
"ersions on factual matters* it is for them in the e%ercise of discretion to determine which party
deser"es credence on the basis of e"idence recei"ed* sub$ect only to the re&uirement that their
decision must be supported by substantial e"idence+ CSalva,or Lacorte v. Hon. Ama,o G.
'nciong* 219 Phil 202 .1>99/D 'ccordingly* Ja"ier needs to show by substantial e"idence that
he was indeed an employee of the company against which he claims illegal dismissal 6itoy
"avier ;/anilo &. "avier< vs. 4ly Ace Cor+oration24lor,elyn Castillo, G.R. No. 1.558, 4ebruary
15, !1.
5mployer7employee relationship; test !o determine the e%istence of an employer7employee
relationship* the following are considered: .1/ the selection and engagement of the employee;
.2/ the payment of wages; .0/ the power of dismissal; and .1/ the power to control the
employee#s conduct 6f these elements* the most important criterion is whether the employer
controls or has reser"ed the right to control the employee not only as to the result of the wor(
but also as to the means and methods by which the result is to be accomplished ,n this case*
Ja"ier was not able to persuade the Court that the abo"e elements e%ist in his case He could
not submit competent proof that ;ly 'ce engaged his ser"ices as a regular employee; that ;ly
'ce paid his wages as an employee* or that ;ly 'ce could dictate what his conduct should be
while at wor( ,n other words* Ja"ier#s allegations did not establish that his relationship with ;ly
'ce had the attributes of an employer7employee relationship on the basis of the abo"e7
mentioned four7fold test :orse* Ja"ier was not able to refute ;ly 'ce#s assertion that it had an
agreement with a hauling company to underta(e the deli"ery of its goods ,t was also baffling to
11
reali?e that Ja"ier did not dispute ;ly 'ce#s denial of his ser"ices# e%clusi"ity to the company ,n
short* all that Ja"ier laid down were bare allegations without corroborati"e proof 6itoy "avier
;/anilo &. "avier< vs. 4ly Ace Cor+oration24lor,elyn Castillo, G.R. No. 1.558, 4ebruary 15,
!1.
5mployment contract; stages Contracts undergo three distinct stages* to wit: negotiation;
perfection or birth; and consummation -egotiation begins from the time the prospecti"e
contracting parties manifest their interest in the contract and ends at the moment of agreement
of the parties Perfection or birth of the contract ta(es place when the parties agree upon the
essential elements of the contract Consummation occurs when the parties fulfill or perform the
terms agreed upon in the contract* culminating in the e%tinguishment thereof 4nder 'rticle 101B
of the Ci"il Code* a contract is perfected by mere consent and from that moment the parties are
bound not only to the fulfillment of what has been e%pressly stipulated but also to all the
conse&uences which* according to their nature* may be in (eeping with good faith* usage and
law 'n employment contract* li(e any other contract* is perfected at the moment .1/ the parties
come to agree upon its terms; and .2/ concur in the essential elements thereof: .a/ consent of
the contracting parties* .b/ ob$ect certain which is the sub$ect matter of the contract and .c/
cause of the obligation ,n the present case* C; Sharp* on behalf of its principal* ,nternational
Shipping 2anagement* ,nc* hired 'gustin and 2inimo as SandblasterIPainter for a 07month
contract* with a basic monthly salary of 4SM1B000 !hus* the ob$ect of the contract is the
ser"ice to be rendered by 'gustin and 2inimo on board the "essel while the cause of the
contract is the monthly compensation they e%pect to recei"e !hese terms were embodied in
the Contract of 5mployment which was e%ecuted by the parties !he agreement upon the terms
of the contract was manifested by the consent freely gi"en by both parties through their
signatures in the contract -either parties disa"ow the consent they both "oluntarily ga"e
!hus* there is a perfected contract of employment C.4. S#ar+ @ Co. 'nc. an, "o#n ". Roc#a vs.
&ioneer 'nsurance an, Surety Cor+oration, et al., G.R. No. 1(.)3., 4ebruary 15, !1.
5mployment relationship; commencement !he commencement of an employer7employee
relationship must be treated separately from the perfection of an employment contract
Santiago v. C4 S#ar+ Cre> %anagement, 'nc* .G8 -o 1H211>* 10 July 200F/ is an
instructi"e precedent on this point ,n that case* the Supreme Court made a distinction between
the perfection of the employment contract and the commencement of the employer7employee
relationship* thus:
T#e +er?ection o? t#e contract, >#ic# in t#is case coinci,e, >it# t#e ,ate o? e:ecution t#ereo?,
occurre, >#en +etitioner an, res+on,ent agree, on t#e ob0ect an, t#e cause, as >ell as t#e
rest o? t#e terms an, con,itions t#erein. T#e commencement o? t#e em+loyer*em+loyee
relations#i+, as earlier ,iscusse,, >oul, #ave ta=en +lace #a, +etitioner been actually ,e+loye,
?rom t#e +oint o? #ire. T#us, even be?ore t#e start o? any em+loyer*em+loyee relations#i+,
contem+oraneous >it# t#e +er?ection o? t#e em+loyment contract >as t#e birt# o? certain rig#ts
an, obligations, t#e breac# o? >#ic# may give rise to a cause o? action against t#e erring +arty.
@espite the fact that the employer7employee relationship has not commenced due to the failure
to deploy 'gustin and 2inimo in this case* 'gustin and 2inimo are entitled to rights arising from
the perfected Contract of 5mployment* such as the right to demand performance by C; Sharp
of its obligation under the contract C.4. S#ar+ @ Co. 'nc. an, "o#n ". Roc#a vs. &ioneer
'nsurance an, Surety Cor+oration, et al., G.R. No. 1(.)3., 4ebruary 15, !1.
;orum shopping; elements; res $udicata ;or forum shopping to e%ist* it is necessary that .a/
there be identity of parties or at least such parties that represent the same interests in both
actions; .b/ there be identity of rights asserted and relief prayed for* the relief being founded on
the same facts; and .c/ the identity of the two preceding particulars is such that any $udgment
rendered in one action will* regardless of which party is successful* amount to res 0u,icata in the
other action Petitioners are correct as to the first two re&uisites of forum shopping ;irst* there
is identity of parties in"ol"ed: -egros Slashers ,nc and respondent !eng Second* there is
identity of rights asserted ie* the right of management to terminate employment and the right of
an employee against illegal termination Howe"er* the third re&uisite of forum shopping is
missing in this case 'ny $udgment or ruling of the 6ffice of the Commissioner of the
2etropolitan Aas(etball 'ssociation will not amount to res 0u,icata Res 0u,icata is defined in
$urisprudence as to ha"e four basic elements: .1/ the $udgment sought to bar the new action
must be final; .2/ the decision must ha"e been rendered by a court ha"ing $urisdiction o"er the
sub$ect matter and the parties; .0/ the disposition of the case must be a $udgment on the merits;
and .1/ there must be as between the first and second action* identity of parties* sub$ect matter*
and causes of action Here* although contractually authori?ed to settle disputes* the 6ffice of the
12
Commissioner of the 2etropolitan Aas(etball 'ssociation is not a court of competent $urisdiction
as contemplated by law with respect to the application of the doctrine of res 0u,icata. 't best*
the 6ffice of the Commissioner of the 2etropolitan Aas(etball 'ssociation is a pri"ate mediator
or go7between as agreed upon by team management and a player in the 2etropolitan
Aas(etball 'ssociation Player#s Contract of 5mployment 'ny $udgment that the 6ffice of the
Commissioner of the 2etropolitan Aas(etball 'ssociation may render will not result in a bar for
see(ing redress in other legal "enues Hence* respondent#s action of filing the same complaint
in the 8egional 'rbitration Aranch of the -=8C does not constitute forum shopping Negros
Slas#ers, 'nc., Ro,ol?o C. Alvare8 an, $icente Tan vs. Alvin L. Teng, G.R. No. 18(1,
4ebruary , !1.
Jurisdiction; -=8C ,t is clear from the -=8C 8ules of Procedure that appeals must be "erified
and certified against forum7shopping by the parties7in7interest themsel"es !he purpose of
"erification is to secure an assurance that the allegations in the pleading are true and correct
and ha"e been filed in good faith ,n the case at bar* the parties7in7interest are petitioner
Salenga* as the employee* and respondent Clar( @e"elopment Corporation as the employer '
corporation can only e%ercise its powers and transact its business through its board of directors
and through its officers and agents when authori?ed by a board resolution or its bylaws !he
power of a corporation to sue and be sued is e%ercised by the board of directors !he physical
acts of the corporation* li(e the signing of documents* can be performed only by natural persons
duly authori?ed for the purpose by corporate bylaws or by a specific act of the board 'bsent the
re&uisite board resolution* neither !imbol78oman nor 'tty 2allari* who signed the
2emorandum of 'ppeal and Joint 'ffida"it of @eclaration allegedly on behalf of respondent
corporation* may be considered as the )appellant+ and )employer+ referred to by the -=8C
8ules of Procedure 's such* the -=8C had no $urisdiction to entertain the appeal Antonio 6.
Salenga, et al. vs. Court o? A++eals, et al., G.R. No. 1().)1, 4ebruary 1, !1 .
=abor; effect if procedural due process not followed but with a "alid cause for termination ,t is
re&uired that the employer furnish the employee with two written notices: .1/ a written notice
ser"ed on the employee specifying the ground or grounds for termination* and gi"ing to said
employee reasonable opportunity within which to e%plain his side; and .2/ a written notice of
termination ser"ed on the employee indicating that upon due consideration of all the
circumstances* grounds ha"e been established to $ustify his termination !he twin re&uirements
of notice and hearing constitute the elements of due process in cases of employee#s dismissal
!he re&uirement of notice is intended to inform the employee concerned of the employer#s intent
to dismiss and the reason for the proposed dismissal 4pon the other hand* the re&uirement of
hearing affords the employee an opportunity to answer his employer#s charges against him and
accordingly* to defend himself therefrom before dismissal is effected 6b"iously* the second
written notice* as indispensable as the first* is intended to ensure the obser"ance of due
process ,n this case* there was only one written notice which re&uired respondents to e%plain
within fi"e .B/ days why they should not be dismissed from the ser"ice 'lco"endas was the
only one who signed the receipt of the notice !he others* as claimed by =yn"il* refused to
sign !he other employees argue that no notice was gi"en to them @espite the
inconsistencies* what is clear is that no final written notice or notices of termination were sent to
the employees @ue to the failure of =yn"il to follow the procedural re&uirement of two7notice
rule* nominal damages in the amount of PB0*000 were granted to 'riola* et al despite their
dismissal for $ust cause Lynvil 4is#ing 5nter+rises, 'nc. vs. An,res G. Ariola, et al., G.R. No.
181.(), 4ebruary 1, !1 .
=abor; liability of officers if termination is attended with bad faith ,n labor cases* the corporate
directors and officers are solidarily liable with the corporation for the termination of employment
of employees done with malice or in bad faith ,ndeed* moral damages are reco"erable when
the dismissal of an employee is attended by bad faith or fraud or constitutes an act oppressi"e
to labor* or is done in a manner contrary to good morals* good customs or public policy !he
term )bad faith+ contemplates a )state of mind affirmati"ely operating with furti"e design or with
some moti"e of self7interest or will or for ulterior purpose+ !he Supreme Court agreed with the
ruling of both the -=8C and the Court of 'ppeals when they pronounced that there was no
e"idence on record that indicates commission of bad faith on the part of @e Aor$a* the general
manager of =yn"il* who was tas(ed with the super"ision of the employees and the operation of
the business !here is no proof that he imposed on 'riola* et al the )+or via0e+ pro"ision for
purpose of effecting their summary dismissal Lynvil 4is#ing 5nter+rises, 'nc. vs. An,res G.
Ariola, et al., G.R. No. 181.(), 4ebruary 1, !1 .
=abor; nature of employment; security of tenure ,n the conte%t of these facts N .1/ 'riola* et al
were doing tas(s necessary to =yn"il#s fishing business with positions ranging from captain of
10
the "essel to bo,egero; .2/ after the end of a trip* they will again be hired for another trip with
new contracts; and .0/ this arrangement continued for more than ten years < the Court belie"ed
that =yn"il intended to go around the security of tenure of 'riola* et al as regular employees
!he Court held that by the e%press pro"isions of the second paragraph of 'rticle 290 which
co"er casual employment* 'riola* et al had become regular employees of =yn"il Lynvil 4is#ing
5nter+rises, 'nc. vs. An,res G. Ariola, et al., G.R. No. 181.(), 4ebruary 1, !1 .
=abor; procedural and substanti"e due process; grounds for "alid termination; breach of trust
Just cause is re&uired for a "alid dismissal !he =abor Code pro"ides that an employer may
terminate an employment based on fraud or willful breach of the trust reposed on the
employee Such breach is considered willful if it is done intentionally* (nowingly* and purposely*
without $ustifiable e%cuse* as distinguished from an act done carelessly* thoughtlessly*
heedlessly or inad"ertently ,t must also be based on substantial e"idence and not on the
employer#s whims or caprices or suspicions otherwise* the employee would eternally remain at
the mercy of the employer =oss of confidence must not be indiscriminately used as a shield by
the employer against a claim that the dismissal of an employee was arbitrary 'nd* in order to
constitute a $ust cause for dismissal* the act complained of must be wor(7related and shows that
the employee concerned is unfit to continue wor(ing for the employer ,n addition* loss of
confidence as a $ust cause for termination of employment is premised on the fact that the
employee concerned holds a position of responsibility* trust and confidence or that the
employee concerned is entrusted with confidence in delicate matters* such as the handling or
care and protection of the property and assets of the employer !he betrayal of this trust is the
essence of the offense for which an employee is penali?ed !he Supreme Court found that
breach of trust is present in this case* when 'riola .the captain/* 'lco"endas .Chief 2ate/*
Calinao .Chief 5ngineer/* -ubla .coo(/* AaOe? .oiler/* and Sebullen .bo,egero/ conspired with
one another and stole )+am+ano+ and )tangigue+ fish and deli"ered them to another "essel* to
the pre$udice of =yn"il Lynvil 4is#ing 5nter+rises, 'nc. vs. An,res G. Ariola, et al., G.R. No.
181.(), 4ebruary 1, !1 .
=abor; public prosecutor#s decision not binding on the labor tribunal !he Supreme Court has
held in Nicolas v. National Labor Relations Commission D02F Phil 990* 99H799F .1>>H/D that a
criminal con"iction is not necessary to find $ust cause for employment termination 6therwise
stated* an employee#s ac&uittal in a criminal case* especially one that is grounded on the
e%istence of reasonable doubt* will not preclude a determination in a labor case that he is guilty
of acts inimical to the employer#s interests ,n the re"erse* the finding of probable cause is not
followed by automatic adoption of such finding by the labor tribunals ,n other words* whiche"er
way the public prosecutor disposes of a complaint* the finding does not bind the labor tribunal
=yn"il contends that the filing of a criminal case before the 6ffice of the Prosecutor is sufficient
basis for a "alid termination of employment based on serious misconduct andIor loss of trust
and confidence !he Supreme Court held that =yn"il cannot argue that since the 6ffice of the
Prosecutor found probable cause for theft* the =abor 'rbiter must follow the finding as a "alid
reason for the termination of respondents# employment !he proof re&uired for purposes that
differ from one and the other are li(ewise different Lynvil 4is#ing 5nter+rises, 'nc. vs. An,res
G. Ariola, et al., G.R. No. 181.(), 4ebruary 1, !1 .
=abor; regular employee; fi%ed7contract agreement* re&uisites for "alidity Prior Supreme Court
decisions ha"e laid two conditions for the "alidity of a fi%ed7contract agreement between the
employer and employee: 4irst, the fi%ed period of employment was (nowingly and "oluntarily
agreed upon by the parties without any force* duress* or improper pressure being brought to
bear upon the employee and absent any other circumstances "itiating his consent; or Secon,, it
satisfactorily appears that the employer and the employee dealt with each other on more or less
e&ual terms with no moral dominance e%ercised by the former or the latter =yn"il contends that
'riola* et al were employed under a fi%ed7term contract which e%pired at the end of the "oyage
Contrarily* 'riola* et al contend that they became regular employees by reason of their
continuous hiring and performance of tas(s necessary and desirable in the usual trade and
business of =yn"il !e%tually* the pro"ision in the contract between =yn"il and 'riola* et al that:
ENA a=o ay sumasang*ayon na magling=o, at guma>a ng mga ga>ain sang*ayon sa
+ata=arang E+or via0eF na magmumula sa +agalis sa Navotas +a+unta sa +angis,aan at
+agbabali= sa +on,o#an ng lantsa sa Navotas, %etro %anilaF is for a fi%ed period of
employment ,n the conte%t* howe"er* of the facts that: .1/ 'riola* et al were doing tas(s
necessarily to =yn"il#s fishing business with positions ranging from captain of the "essel to
bo,egero; .2/ after the end of a trip* they will again be hired for another trip with new contracts;
and .0/ this arrangement continued for more than ten years* the clear intention is to go around
the security of tenure of 'riola* et al as regular employees 's such* the Supreme Court found
11
that 'riola* et al are regular employees Lynvil 4is#ing 5nter+rises, 'nc. vs. An,res G. Ariola, et
al., G.R. No. 181.(), 4ebruary 1, !1 .
=abor Code; ma%imum award of attorney#s fees in cases of reco"ery of wages 'rticle 111 of the
=abor Code pro"ides for a ma%imum award of attorney#s fees in cases of reco"ery of wages:
a ,n cases of unlawful withholding of wages* the culpable party may be assessed attorney#s
fees e&ui"alent to ten percent of the amount of wages reco"ered
b ,t shall be unlawful for any person to demand or accept* in any $udicial or administrati"e
proceedings for the reco"ery of wages* attorney#s fees which e%ceed ten percent of the amount
of wages reco"ered
Since @e Gracia* et al had to secure the ser"ices of the lawyer to reco"er their unpaid salaries
and protect their interest* attorney#s fees in the amount of ten percent .10P/ of the total claims
was imposed S=i++ers Anite, &aci?ic, 'nc. an, S=i++ers %aritime Services, 'nc. Lt,.
vs. Nat#aniel /o8a, et al., G.R. No. 1(5558. 4ebruary 8, !1 .
=abor contracting; elements !here is labor7only contracting where: .a/ the person supplying
wor(ers to an employer does not ha"e substantial capital or in"estment in the form of tools*
e&uipment* machineries* wor( premises* among others; and .b/ the wor(ers recruited and
placed by such person are performing acti"ities which are directly related to the principal
business of the employer ,n the present case* the Supreme Court found that both the
capitali?ation re&uirement and the power of control on the part of 8e&uiOo are wanting
Generally* the presumption is that the contractor is a labor7only contractor unless such
contractor o"ercomes the burden of pro"ing that it has the substantial capital* in"estment* tools
and the li(e ,n the present case* though Garden of 2emories is not the contractor* it has the
burden of pro"ing that 8e&uiOo has sufficient capital or in"estment since it is claiming the
supposed status of 8e&uiOo as independent contractor Garden of 2emories* howe"er* failed to
adduce e"idence purporting to show that 8e&uiOo had sufficient capitali?ation -either did it
show that she in"ested in the form of tools* e&uipment* machineries* wor( premises and other
materials which are necessary in the completion of the ser"ice contract Gar,en o? %emories
&ar= an, Li?e &lan, 'nc., et al. vs. NLRC, n, /iv., et al., G.R. No. 13!(8, 4ebruary 8, !1.
2igrant :or(ers; 8' -o 9012; money claims in cases of un$ust termination Section 10 of
8epublic 'ct -o 9012 .2igrant :or(ers 'ct/ pro"ides for money claims in cases of un$ust
termination of employment contracts:
,n case of termination of o"erseas employment without $ust* "alid or authori?ed cause as
defined by law or contract* the wor(ers shall be entitled to the full reimbursement of his
placement fee with interest of twel"e percent .12P/ per annum* plus his salaries for the
une%pired portion of his employment contract or for three .0/ months for e"ery year of the
une%pired term* whiche"er is less
!he 2igrant :or(ers 'ct pro"ides that salaries for the une%pired portion of the employment
contract or three .0/ months for e"ery year of the une%pired term* whiche"er is less* shall be
awarded to the o"erseas ;ilipino wor(er* in cases of illegal dismissal Howe"er* in 21 2arch
200>* Serrano v. Gallant %aritime Services an, %arlo> Navigation Co. 'nc. .G8 -o 1HFH11/*
the Court* in an 5n Aanc @ecision* declared unconstitutional the clause )or for three months for
e"ery year of the une%pired term* whiche"er is less+ and awarded the entire une%pired portion of
the employment contract to the o"erseas ;ilipino wor(er 6n 9 2arch 2010* howe"er* Section F
of 8epublic 'ct -o 10022 .8' 10022/ amended Section 10 of the 2igrant :or(ers 'ct* and
once again reiterated the pro"ision of awarding the une%pired portion of the employent contract
or three .0/ months for e"ery year of the une%pired term* whiche"er is less -e"ertheless* since
the termination occurred on January 1>>> before the passage of the amendatory 8' 10022* the
Supreme Court applied 8' 9012* without touching on the constitutionality of Section F of 8'
10022 !he declaration in 2arch 200> of the unconstitutionality of the clause )or for three
months for e"ery year of the une%pired term* whiche"er is less+ in 8' 9012 shall be gi"en
retroacti"e effect to the termination that occurred in January 1>>> because an unconstitutional
clause in the law confers no rights* imposes no duties and affords no protection !he
unconstitutional pro"ision is inoperati"e* as if it was not passed into law at all S=i++ers Anite,
&aci?ic, 'nc. an, S=i++ers %aritime Services, 'nc. Lt,. vs. Nat#aniel /o8a, et al., G.R. No.
1(5558. 4ebruary 8, !1 .
1B
-=8C; contempt powers 4nder 'rticle 219 the =abor Code* the -=8C .and the labor arbiters/
may hold any offending party in contempt* directly or indirectly* and impose appropriate
penalties in accordance with law !he penalty for direct contempt consists of either
imprisonment or fine* the degree or amount depends on whether the contempt is against the
Commission or the labor arbiter !he =abor Code* howe"er* re&uires the labor arbiter or the
Commission to deal with indirect contempt in the manner prescribed under 8ule F1 of the 8ules
of Court 8ule F1 of the 8ules of Court does not re&uire the labor arbiter or the -=8C to initiate
indirect contempt proceedings before the trial court !his mode is to be obser"ed only when
there is no law granting them contempt powers 's is clear under 'rticle 219.d/ of the =abor
Code* the labor arbiter or the Commission is empowered or has $urisdiction to hold the offending
party or parties in direct or indirect contempt 8obosa* et al* therefore* ha"e not improperly
brought the indirect contempt charges against the respondents before the -=8C 4e,erico S.
Robosa, et al. vs. National Labor Relations Commission ;4irst /ivision<, et al., G.R. No.
1(3!85, 4ebruary 8, !1.
-=8C; factual findings ,t is a well7entrenched rule that findings of facts of the -=8C* affirming
those of the =abor 'rbiter* are accorded respect and due consideration when supported by
substantial e"idence !he Supreme Court* howe"er* found that the doctrine of great respect and
finality has no application to the case at bar !he =abor 'rbiter dismissed 'rnai?* et al#s
complaints on mere technicality !he -=8C* upon appeal* then came up with three di"ergent
rulings 't first* it remanded the case to the =abor 'rbiter Howe"er* in a subse&uent
resolution* it decided to resol"e the case on the merits by ruling that 'rnai?* et al were
constructi"ely dismissed Aut later on* it again re"ersed itself in its third and final resolution of
the case and ruled in fa"or of Julie#s ba(eshop !herefore* contrary to 8eyes#s claim* the -=8C
did not* on any occasion* affirm any factual findings of the =abor 'rbiter !he Court of 'ppeals is
thus correct in re"iewing the entire records of the case to determine which findings of the -=8C
is sound and in accordance with law Aesides* the Court of 'ppeals may still resol"e factual
issues by e%press mandate of the law despite the respect gi"en to administrati"e findings of
fact "ulieBs 6a=es#o+ an,2or 5,gar Reyes vs. Henry Arnai8, et al., G.R. No. 1(188, 4ebruary
15, !1.
Probationary employee; "alid cause for dismissal but without procedural due process; employee
entitled to nominal damages Section 2* 8ule ,* Aoo( 3, of the =abor Code#s ,mplementing
8ules and 8egulations pro"ides: )'? t#e termination is broug#t about by t#e com+letion o? a
contract or +#ase t#ereo?, or by ?ailure o? an em+loyee to meet t#e stan,ar,s o? t#e em+loyer in
t#e case o? +robationary em+loyment, it s#all be su??icient t#at a >ritten notice is serve, t#e
em+loyee >it#in a reasonable time ?rom t#e e??ective ,ate o? termination.+ @alangin was hired
by Canadian 6pportunities as ,mmigration and =egal 2anager* sub$ect to a probationary period
of si% months 6ne month after hiring @alangin* the company terminated his employment*
declaring him )unfit+ and )un&ualified+ to continue as ,mmigration and =egal 2anager* for
reasons which included obstinacy and utter disregard of company policies Propensity to ta(e
prolonged and e%tended lunch brea(s* shows no interest in familiari?ing oneself with the policies
and ob$ecti"es* lac( of concern for the company#s interest despite ha"ing $ust been employed in
the company .@eclined to attend company sponsored acti"ities* seminars intended to familiari?e
company employees with 2anagement ob$ecti"es and enhancement of company interest and
ob$ecti"es/* lac( of enthusiasm toward wor(* and lac( of interest in fostering relationship with his
co7employees !he company contends that it complied with the rule on procedural due process
when it as(ed @alangin* through a 2emorandum* to e%plain why he could not attend the
seminar :hen he failed to submit his e%planation* the company ser"ed him a notice the
following day terminating his employment 'ccording to the Supreme Court* the notice to
@alangin was not ser"ed within a reasonable time from the effecti"e date of his termination as
re&uired by the rules since he was dismissed on the "ery day the notice was gi"en to him
Howe"er* because of the e%istence of a "alid cause for termination* the Supreme Court did not
in"alidate his dismissal but penali?ed the company for its non7compliance with the notice
re&uirement* and ordered the company to pay an indemnity* in the form of nominal damages
amounting to P10*000 Cana,ian 7++ortunities Anlimite,, 'nc. vs. 6art G. /alangin, "r., G.R.
No. 1(1, 4ebruary 3, !1 .
Probationary employee; "alid dismissal e"en before H months !he essence of a probationary
period of employment fundamentally lies in the purpose or ob$ecti"e of both the employer and
the employee during the period :hile the employer obser"es the fitness* propriety and
efficiency of a probationer to ascertain whether he is &ualified for permanent employment* the
latter see(s to pro"e to the former that he has the &ualifications to meet the reasonable
standards for permanent employment !he )trial period+ or the length of time the probationary
employee remains on probation depends on the parties# agreement* but it shall not e%ceed si%
1H
.H/ months under 'rticle 291 of the =abor Code !he Supreme Court found substantial e"idence
indicating that the company was $ustified in terminating @alangin#s probationary employment
@alangin admitted in compulsory arbitration that the pro%imate cause for his dismissal was his
refusal to attend the company#s )3alues ;ormation Seminar+ scheduled for 6ctober 2F* 2001* a
Saturday He refused to attend the seminar after he learned that it had no relation to his duties*
as he claimed* and that he had to lea"e at 2:00 pm because he wanted to be with his family in
the pro"ince :hen the Chief 6perations 6fficer* insisted that he attend the seminar to
encourage his co7employees to attend* he stood pat on not attending* arguing that mar(ed
differences e%ist between their positions and duties* and insinuating that he did not want to $oin
the other employees He also &uestioned the scheduled 2:00 pm seminars on Saturdays as
they were not supposed to be doing a company acti"ity beyond 2:00 pm He considers 2:00
pm as the close of wor(ing hours on Saturdays; thus* holding them beyond 2:00 pm would be
in "iolation of the law !his incident re"eals @alangin#s lac( of interest in establishing a good
wor(ing relationship with his co7employees* especially the ran( and file; he did not want to $oin
them because of his "iew that the seminar was not rele"ant to his position and duties ,t also
betrays his arrogant and condescending attitude towards his co7employees* and a lac( of
support for the company ob$ecti"e @alangin also e%hibited negati"e wor(ing habits* particularly
with respect to the one hour lunch brea( policy of the company and the obser"ance of the
company#s wor(ing hours @alangin would ta(e prolonged lunch brea(s or would go out of the
office < without lea"e of the company < and call the personnel manager later only to say that he
would be unable to return to the office because of some personal matters he needs to attend to
Cana,ian 7++ortunities Anlimite,, 'nc. vs. 6art G. /alangin, "r., G.R. No. 1(1, 4ebruary 3,
!1.
Procedural rules; liberal application 6rdinarily* rules of procedure are strictly enforced by courts
in order to impart stability in the legal system Howe"er* in not a few instances* the Supreme
Court has rela%ed the rigid application of the rules of procedure to afford the parties the
opportunity to fully "entilate their cases on the merits !his is in line with the time honored
principle that cases should be decided only after gi"ing all the parties the chance to argue their
causes and defenses ,n that way* the ends of $ustice would be better ser"ed ;or indeed* the
general ob$ecti"e of procedure is to facilitate the application of $ustice to the ri"al claims of
contending parties* bearing always in mind that procedure is not to hinder but to promote the
administration of $ustice ,n 6ng =im Sing* Jr " ;5A =easing and ;inance Corporation .G8
-o 1H911B* June 9* 200F/* the Supreme Court ruled:
Courts ha"e the prerogati"e to rela% procedural rules of e"en the most mandatory character*
mindful of the duty to reconcile both the need to speedily put an end to litigation and the parties#
right to due process ,n numerous cases* this Court has allowed liberal construction of the rules
when to do so would ser"e the demands of substantial $ustice and e&uity % % %
,ndeed the pre"ailing trend is to accord party litigants the amplest opportunity for the proper and
$ust determination of their causes* free from the constraints of needless technicalities ,n this
case* besides the fact that a denial of the recourse to the Court of 'ppeals would ser"e more to
perpetuate an in$ustice and "iolation of !eng#s rights under our labor laws* the Supreme Court
found that as correctly held by the Court of 'ppeals* no intent to delay the administration of
$ustice could be attributed to !eng !he Court of 'ppeals therefore did not commit re"ersible
error in e%cusing !eng#s one7day delay in filing his motion for reconsideration and in gi"ing due
course to his petition for certiorari Negros Slas#ers, 'nc., Ro,ol?o C. Alvare8 an, $icente Tan
vs. Alvin L. Teng, G.R. No. 18(1, 4ebruary , !1.
8einstatement; bac(wages 5mployees who are illegally dismissed are entitled to full
bac(wages* inclusi"e of allowances and other benefits or their monetary e&ui"alent* computed
from the time their actual compensation was withheld from them up to the time of their actual
reinstatement Aut if reinstatement is no longer possible* the bac(wages shall be computed from
the time of their illegal termination up to the finality of the decision !hus* when there is an order
of reinstatement* the computation of bac(wages shall be rec(oned from the time of illegal
dismissal up to the time that the employee is actually reinstated to his former position Pursuant
to the order of reinstatement rendered by the =abor 'rbiter* the Aan( of =ubao sent 2anabat a
letter re&uiring him to report bac( to wor( on 2ay 1* 200F -otwithstanding the said letter*
2anabat opted not to report for wor( !hus* it is but fair that the bac(wages to be awarded to
2anabat should be computed from the time that he was illegally dismissed until the time when
he was re&uired to report for wor(* i.e. from September 1* 200B until 2ay 1* 200F 6an= o?
Lubao, 'nc. vs. Rommel ". %anabat, et al., G.R. No. 188(, 4ebruary 1, !1 .
1F
8einstatement; doctrine of strained relations; when applicable 4nder the law and pre"ailing
$urisprudence* an illegally dismissed employee is entitled to reinstatement as a matter of right
Howe"er* if reinstatement would only e%acerbate the tension and strained relations between the
parties* or where the relationship between the employer and the employee has been un,uly
straine, by reason of their irreconcilable differences* +articularly >#ere t#e illegally ,ismisse,
em+loyee #el, a managerial or =ey +osition in t#e com+any* it would be more prudent to order
payment of separation pay instead of reinstatement 4nder the ,octrine o? straine, relations*
the payment of separation pay is considered an acceptable alternati"e to reinstatement when
the latter option is no longer desirable or "iable 6n one hand* such payment liberates the
employee from what could be a highly oppressi"e wor( en"ironment 6n the other hand* it
releases the employer from the grossly unpalatable obligation of maintaining in its employ a
wor(er it could no longer trust ,n such cases* it should be pro"ed that the employee concerned
occupies a position where he en$oys the trust and confidence of his employer; and that it is li(ely
that if reinstated* an atmosphere of antipathy and antagonism may be generated as to ad"ersely
affect the efficiency and producti"ity of the employee concerned ,n the present case* the
Supreme Court found that the relations between the parties had been already strained thereby
$ustifying the grant of separation pay in lieu of reinstatement in fa"or of 2anabat 2anabat#s
reinstatement to his former position would only ser"e to intensify the atmosphere of antipathy
and antagonism between the parties 4ndoubtedly* Aan( of =ubao#s filing of "arious criminal
complaints against 2anabat for &ualified theft and the subse&uent filing by the latter of the
complaint for illegal dismissal against the former* ta(en together with the pendency of the
instant case for more than si% years* had caused strained relations between the parties
Considering that 2anabat#s former position as ban( encoder in"ol"es the handling of accounts
of the depositors of the Aan( of =ubao* it would not be e&uitable on the part of the Aan( of
=ubao to be ordered to maintain the former in its employ since it may only inspire "indicti"eness
on the part of 2anabat 'lso* the refusal of 2anabat to return to wor( is in itself an indication of
the e%istence of strained relations between him and the petitioner 6an= o? Lubao, 'nc.
vs. Rommel ". %anabat, et al., G.R. No. 188(, 4ebruary 1, !1 .
Seafarers; employment contract; perfection stage "s commencement stage 'n employment
contract* li(e any other contract* is perfected at the moment .1/ the parties come to agree upon
its terms; and .2/ concur in the essential elements thereof: .a/ consent of the contracting parties*
.b/ ob$ect certain which is the sub$ect matter of the contract* and .c/ cause of the obligation !he
ob$ect of the contract was the rendition of ser"ice by ;antonial on board the "essel for which
ser"ice he would be paid the salary agreed upon ,n this case* the employment contract was
perfected on January 1B* 2000 when it was signed by the parties who entered into the contract
in behalf of their principal Howe"er* the employment relationship ne"er commenced since
;antonial was not allowed to lea"e on January 1F* 2000 and go on board the "essel 2I3 '4Q in
Germany on the ground that he was not yet declared fit to wor( on the day of his scheduled
departure Aut* e"en if no employer7employee relationship commenced* there was*
contemporaneous with the perfection of the employment contract* the birth of certain rights and
obligations* the breach of which may gi"e rise to a cause of action against the erring party
6rig#t %aritime Cor+oration ;6%C< 2 /esiree &. Tenorio vs. Ricar,o 6. 4antonial, G.R. No.
135.15, 4ebruary 8, !1 .
-ar$h 2012 Philippine Supree C!ur" #e$i%i!n% !n La&!r La' an( Pr!$e(ure
Here are select 2arch 2012 rulings of the Supreme Court of the Philippines on labor law and
procedure
@ismissal; constructi"e dismissal Constructi"e dismissal e%ists where there is cessation of wor(
because continued employment is rendered impossible* unreasonable or unli(ely* as an offer
in"ol"ing a demotion in ran( and a diminution in pay Constructi"e dismissal is a dismissal in
disguise or an act amounting to dismissal but made to appear as if it were not ,n constructi"e
dismissal cases* the employer is* concededly* charged with the burden of pro"ing that its
conduct and action or the transfer of an employee are for "alid and legitimate grounds such as
genuine business necessity ,n the instant case* the o"ert act relied upon by petitioner is not
only a doubtful occurrence but is* if it did transpire* e"en consistent with the dismissal from
employment posited by the respondent !he factual appraisal of the Court of 'ppeals is correct
Petitioner was displeased after incurring e%penses for respondent#s medical chec(7up and* it is
credible that* thereafter* respondent was pre"ented entry into the wor( premises !his is
tantamount to constructi"e dismissal !he Supreme Court agreed with the Court of 'ppeals that
the incredibility of petitioner#s submission about abandonment of wor( renders credible the
19
position of respondent that she was pre"ented from entering the property !his was e"en
corroborated by the affida"its of Siarot and 2endo?a which were made part of the records of
this case %a. %elissa A. Galang vs. "ulia %alasu-ui, G.R. No. 1()1(1. %arc# (, !1.
@ismissal; loss of trust and confidence !he rule is long and well settled that* in illegal dismissal
cases li(e the one at bench* the burden of proof is upon the employer to show that the
employee#s termination from ser"ice is for a $ust and "alid cause !he employer#s case
succeeds or fails on the strength of its e"idence and not on the wea(ness of that adduced by
the employee* in (eeping with the principle that the scales of $ustice should be tilted in fa"or of
the latter in case of doubt in the e"idence presented by them 6ften described as more than a
mere scintilla* the &uantum of proof is substantial e"idence which is understood as such
rele"ant e"idence as a reasonable mind might accept as ade&uate to support a conclusion*
e"en if other e&ually reasonable minds might concei"ably opine otherwise ;ailure of the
employer to discharge the foregoing onus would mean that the dismissal is not $ustified and
therefore illegal
,n the case at bar* the Supreme Court agreed with the petitioners that mere substantial
e"idence and not proof beyond reasonable doubt is re&uired to $ustify the dismissal from ser"ice
of an employee charged with theft of company property Howe"er* the Court found no error in
the C'#s findings that the petitioners had not ade&uately pro"en by substantial e"idence that
'rlene and Joseph indeed participated or cooperated in the commission of theft relati"e to the
si% missing intensifying screens so as to $ustify the latter#s termination from employment on the
ground of loss of trust and confidence 6lue S=y Tra,ing Com+any, 'nc. et al. vs. Arlene &. 6las
an, "ose+# /. Silvano, G.R. No. 1.!55.. %arc# (, !1.
@ismissal; probationary employees Gala insists that he cannot be sanctioned for the theft of
company property on 2ay 2B* 200H He maintains that he had no direct participation in the
incident and that he was not aware that an illegal acti"ity was going on as he was at some
distance from the truc(s when the alleged theft was being committed He adds that he did not
call the attention of the foremen because he was a mere lineman and he was focused on what
he was doing at the time He argues that in any e"ent* his mere presence in the area was not
enough to ma(e him a conspirator in the commission of the pilferage
Gala misses the point He forgets that as a probationary employee* his o"erall $ob performance
and his beha"ior were being monitored and measured in accordance with the standards .i.e.,
the terms and conditions/ laid down in his probationary employment agreement 4nder
paragraph 9 of the agreement* he was sub$ect to strict compliance with* and non7"iolation of the
Company Code on 5mployee @iscipline* Safety Code* rules and regulations and e%isting
policies Par 10 re&uired him to obser"e at all times the highest degree of transparency*
selflessness and integrity in the performance of his duties and responsibilities* free from any
form of conflict or contradicting with his own personal interest %anila 5lectric Com+any vs. "an
Carlo Gala, G.R. No. 1.188. %arc# (, !1.
@ismissal; relief of illegally dismissed employee 'n illegally dismissed employee is entitled to
two reliefs: bac( wages and reinstatement !he two reliefs pro"ided are separate and distinct ,n
instances where reinstatement is no longer feasible because of strained relations between the
employee and the employer* separation pay is granted ,n effect* an illegally dismissed
employee is entitled to either reinstatement if such is "iable* or separation pay if reinstatement is
no longer "iable* and to bac( wages !he normal conse&uences of respondent#s illegal
dismissal* then* are reinstatement without loss of seniority rights* and payment of bac( wages
computed from the time compensation was withheld from him up to the date of actual
reinstatement :here reinstatement is no longer "iable as an option* separation pay e&ui"alent
to one month salary for e"ery year of ser"ice should be awarded as an alternati"e !he payment
of separation pay is in addition to payment of bac( wages
Petitioners &uestion the C' 8esolution dated 6ctober 21* 2009* arguing that it modified its
2arch 01* 2009 @ecision which has already attained finality insofar as respondent is concerned
Such contention is misplaced !he C' merely clarified the period of payment of bac( wages and
separation pay up to the finality of its decision .2arch 01* 2009/ modifying the =abor 'rbiter#s
decision ,n "iew of the modification of monetary awards in the =abor 'rbiter#s decision* the time
frame for the payment of bac( wages and separation pay is accordingly modified to the finality
of the C' decision Nor=is /istribution, 'nc., et al. vs. /el?in S. /escallar, G.R. No. 18555.
%arc# 1), !1
1>
5mployees; pro$ect "s regular employees !he principal test for determining whether particular
employees are properly characteri?ed as )pro$ect employees+ as distinguished from )regular
employees+ is whether or not the pro$ect employees were assigned to carry out a )specific
pro$ect or underta(ing*+ the duration and scope of which were specified at the time the
employees were engaged for that pro$ect
,n a number of cases* the Court has held that the length of ser"ice or the re7hiring of
construction wor(ers on a pro$ect7to7pro$ect basis does not confer upon them regular
employment status* since their re7hiring is only a natural conse&uence of the fact that
e%perienced construction wor(ers are preferred 5mployees who are hired for carrying out a
separate $ob* distinct from the other underta(ings of the company* the scope and duration of
which has been determined and made (nown to the employees at the time of the employment
are properly treated as pro$ect employees and their ser"ices may be lawfully terminated upon
the completion of a pro$ect Should the terms of their employment fail to comply with this
standard* they cannot be considered pro$ect employees
'pplying the abo"e dis&uisition* the Court agreed with the findings of the C' that petitioners
were pro$ect employees ,t is not disputed that petitioners were hired for the construction of the
Cordo"a 8eef 3illage 8esort in Cordo"a* Cebu Ay the nature of the contract alone* it is clear
that petitioners# employment was to carry out a specific pro$ect Cil?re,o Aro, Ronilo Tirol, et al.
vs. NLRC, 4ourt# /ivision, et al., G.R. No. 1()(.. %arc# (, !1.
Jurisdiction; power of the @6=5 to determine the e%istence of employer7employee relationship
,f a complaint is filed with the @6=5* and it is accompanied by a claim for reinstatement* the
$urisdiction is properly with the =abor 'rbiter* under 'rt 21F.0/ of the =abor Code* which
pro"ides that the =abor 'rbiter has original and e%clusi"e $urisdiction o"er those cases in"ol"ing
wages* rates of pay* hours of wor(* and other terms and conditions of employment* if
accompanied by a claim for reinstatement
,n the present case* the finding of the @6=5 8egional @irector that there was an employer7
employee relationship has been sub$ected to re"iew by the Supreme Court* with the finding
being that there was no employer7employee relationship between petitioner and pri"ate
respondent* based on the e"idence presented !he @6=5 had no $urisdiction o"er the case* as
there was no employer7employee relationship present !hus* the dismissal of the complaint
against petitioner is proper &eo+leBs 6roa,casting Service ;6ombo Ra,o &#ils., 'nc.< vs. T#e
Secretary o? t#e /e+t. o? Labor @ 5m+loyment, et al. G.R. No. 1(.35. %arc# 3, !1.
2anagement prerogati"e; resignation of employees running for public office !he Supreme
Court has consistently held that so long as a company#s management prerogati"es are
e%ercised in good faith for the ad"ancement of the employer#s interest and not for the purpose
of defeating or circum"enting the rights of the employees under special laws or under "alid
agreements* the Court will uphold them ,n the instant case* 'AS7CA- "alidly $ustified the
implementation of Policy -o H8758701H ,t is well within its rights to ensure that it maintains its
ob$ecti"ity and credibility and freeing itself from any appearance of impartiality so that the
confidence of the "iewing and listening public in it will not be in any way eroded 5"en as the
law is solicitous of the welfare of the employees* it must also protect the right of an employer to
e%ercise what are clearly management prerogati"es !he free will of management to conduct its
own business affairs to achie"e its purpose cannot be denied 5rnesto 9mbong vs. A6S*C6N
6roa,casting Cor+oration, $eran,a Sy @ /ante Lu8on, G.R. No. 18)885. %arc# (, !1.
Separation pay; payment to those who participated in illegal stri(es Separation pay may be
gi"en as a form of financial assistance when a wor(er is dismissed in cases such as the
installation of labor7sa"ing de"ices* redundancy* retrenchment to pre"ent losses* closing or
cessation of operation of the establishment* or in case the employee was found to ha"e been
suffering from a disease such that his continued employment is prohibited by law ,t is a
statutory right defined as the amount that an employee recei"es at the time of his se"erance
from the ser"ice and is designed to pro"ide the employee with the wherewithal during the period
that he is loo(ing for another employment ,t is oriented towards the immediate future* the
transitional period the dismissed employee must undergo before locating a replacement $ob 's
a general rule* when $ust causes for terminating the ser"ices of an employee e%ist* the
employee is not entitled to separation pay because lawbrea(ers should not benefit from their
illegal acts !he rule* howe"er* is sub$ect to e%ceptions
Here* not only did the Court declare the stri(e illegal* rather* it also found the 4nion officers to
ha"e (nowingly participated in the illegal stri(e :orse* the 4nion members committed
20
prohibited acts during the stri(e !hus* as the Court has concluded in other cases it has
pre"iously decided* such 4nion officers are not entitled to the award of separation pay in the
form of financial assistance C. Alcantara @ Sons, 'nc. vs. Court o? A++eals, et
al.2Nag=a#iusang %amumuo sa Alsons*S&4L, et al. vs. C. Alcantara @ Sons, 'nc., et
al.2Nag=a#iusang %amumuo sa Alsons*S&4L, et al. vs. C. Alcantara @ Sons, 'nc., et al. G.R.
No. 1551!.2G.R. No. 1551152G.R. No. 1(.!. %arc# 1), !1.
April 2012 Philippine Supree C!ur" #e$i%i!n% !n La&!r La' an( Pr!$e(ure
Here are select 'pril 2012 rulings of the Supreme Court of the Philippines on labor law and
procedure:
@ismissal; due process. :hen the =abor Code spea(s of procedural due process* the reference
is usually to the two .2/7written notice rule en"isaged in Section 2 .,,,/* 8ule KK,,,* Aoo( 3 of the
6mnibus 8ules ,mplementing the =abor Code 2GG 2arine Ser"ices* ,nc " -=8C tersely
described the mechanics of what may be considered a two7part due process re&uirement which
includes the two7notice rule* )% % % one* of the intention to dismiss* indicating therein his acts or
omissions complained against* and two* notice of the decision to dismiss; and an opportunity to
answer and rebut the charges against him* in between such notices+
Here* the first and second notice re&uirements ha"e not been properly obser"ed !he ad"erted
memo would ha"e had constituted the )charge sheet*+ sufficient to answer for the first notice
re&uirement* but for the fact that there is no proof such letter had been sent to and recei"ed by
him -either was there compliance with the imperati"es of a hearing or conference Suffice it to
point out that the record is de"oid of any showing of a hearing or conference ha"ing been
conducted 'nd the written notice of termination itself did not indicate all the circumstances
in"ol"ing the charge to $ustify se"erance of employment ;or "iolating petitioner#s right to due
process* the Supreme Court ordered the payment to petitioner of the amount of P00*000 as
nominal damages Arman,o Ailing vs. "ose 6. 4eliciano, %anuel 4. San %ateo ''', et al., G.R.
No. 1858.. A+ril 5, !1.
@ismissal; $ust cause ,n fine* an employee#s failure to meet sales or wor( &uotas falls under the
concept of gross inefficiency* which in turn is analogous to gross neglect of duty that is a $ust
cause for dismissal under 'rticle 292 of the Code Howe"er* in order for the &uota imposed to
be considered a "alid producti"ity standard and thereby "alidate a dismissal* management#s
prerogati"e of fi%ing the &uota must be e%ercised in good faith for the ad"ancement of its
interest !he duty to pro"e good faith* howe"er* rests with :::5C as part of its burden to
show that the dismissal was for a $ust cause :::5C must show that such &uota was imposed
in good faith !his :::5C failed to do* perceptibly because it could not !he fact of the matter
is that the alleged imposition of the &uota was a desperate attempt to lend a semblance of
"alidity to 'liling#s illegal dismissal Arman,o Ailing vs. "ose 6. 4eliciano, %anuel 4. San %ateo
''', et al., G.R. No. 1858.. A+ril 5, !1.
@ismissal; retrenchment 8etrenchment is a "alid e%ercise of management prerogati"e sub$ect
to the strict re&uirements set by $urisprudence* to wit:
.1/ !hat the retrenchment is reasonably necessary and li(ely to pre"ent business losses which*
if already incurred* are not merely ,e minimis* but substantial* serious* actual and real* or if only
e%pected* are reasonably imminent as percei"ed ob$ecti"ely and in good faith by the employer;
.2/ !hat the employer ser"ed written notice both to the employees and to the @epartment of
=abor and 5mployment at least one month prior to the intended date of retrenchment;
.0/ !hat the employer pays the retrenched employees separation pay e&ui"alent to one month
pay or at least R month pay for e"ery year of ser"ice* whiche"er is higher;
.1/ !hat the employer e%ercises its prerogati"e to retrench employees in good faith for the
ad"ancement of its interest and not to defeat or circum"ent the employees# right to security of
tenure; and
21
.B/ !hat the employer used fair and reasonable criteria in ascertaining who would be dismissed
and who would be retained among the employees* such as status* % % % efficiency* seniority*
physical fitness* age* and financial hardship for certain wor(ers
's aptly found by the -=8C and $ustly sustained by the C'* Petrocon e%ercised its prerogati"e
to retrench its employees in good faith and the considerable reduction of wor( allotments of
Petrocon by Saudi 'ramco was sufficient basis for Petrocon to reduce the number of its
personnel 's for the notice re&uirement* howe"er* contrary to petitioner#s contention* proper
notice to the @6=5 within 00 days prior to the intended date of retrenchment is necessary and
must be complied with despite the fact that respondent is an o"erseas ;ilipino wor(er ,n the
present case* although respondent was duly notified of his termination by Petrocon 00 days
before its effecti"ity* no allegation or proof was ad"anced by petitioner to establish that Petrocon
e"er sent a notice to the @6=5 00 days before the respondent was terminated !hus* this
re&uirement of the law was not complied with @espite the fact that respondent was employed
by Petrocon as an 6;: in Saudi 'rabia* still both he and his employer are sub$ect to the
pro"isions of the =abor Code when applicable !he basic policy in this $urisdiction is that all
;ilipino wor(ers* whether employed locally or o"erseas* en$oy the protecti"e mantle of Philippine
labor and social legislations .citing &#ili++ine National 6an= v. Cabansag* G8 -o 1BF010*
June 21* 200B* 1H0 SC8' B11* B19 and Royal Cro>n 'nternationale v. NLRC, G8 -o F909B*
6ctober 1H* 1>9>* 1F9 SC8' BH>/ 'nternational %anagement Services2%arilyn C. &ascual vs.
Roel &. Logarta, G.R. No. 13135(, A+ril 18, !1.
5mployee; probationary employee !he afore&uoted Section H of the ,mplementing 8ules of
Aoo( 3,* 8ule 3,,,7' of the Code specifically re&uires the employer to inform the probationary
employee of such reasonable standards at the time of his engagement* not at any time later;
else* the latter shall be considered a regular employee !hus* pursuant to the e%plicit pro"ision
of 'rticle 291 of the =abor Code* Section H.d/ of the ,mplementing 8ules of Aoo( 3,* 8ule 3,,,7'
of the =abor Code and settled $urisprudence* petitioner 'liling is deemed a regular employee as
of June 11* 2001* the date of his employment contract
!he letter7offer to 'liling states that the regulari?ation standards or the performance norms to be
used are still to be agreed upon by him and his super"isor 2oreo"er* 'liling was assigned to
GK truc(ing sales* an acti"ity entirely different to the Seafreight Sales for which he was
originally hired and trained for ,n the present case* there was no proof that 'liling was informed
of the standards for his continued employment* such as the sales &uota* at the time of his
engagement Arman,o Ailing vs. "ose 6. 4eliciano, %anuel 4. San %ateo ''', et al., G.R. No.
1858.. A+ril 5, !1.
5mployee; separation pac(age 'rticle 290 of the =abor Code pro"ides only the re&uired
minimum amount of separation pay* which employees dismissed for any of the authori?ed
causes are entitled to recei"e 5mployers* therefore* ha"e the right to create plans* pro"iding for
separation pay in an amount o"er and abo"e what is imposed by 'rticle 290 !here is nothing
therein that prohibits employers and employees from contracting on the terms of employment*
or from entering into agreements on employee benefits* so long as they do not "iolate the =abor
Code or any other law* and are not contrary to morals* good customs* public order* or public
policy
Conse&uently* petitioners are not allowed to recei"e separation pay from both the =abor Code*
on the one hand* and the -ew Gratuity Plan and the SSP* on the other* they would recei"e
double compensation for the same cause .ie* separation from the ser"ice due to redundancy/
%a. Corina C. "iao, et al. vs. Global 6usiness 6an=, 'nc., et al., G.R. No. 18111, A+ril 18,
!1.
5mployer7employee relationship ,n determining the presence or absence of an employer7
employee relationship* the Court has consistently loo(ed for the following incidents* to wit: .a/
the selection and engagement of the employee; .b/ the payment of wages; .c/ the power of
dismissal; and .d/ the employer#s power to control the employee on the means and methods by
which the wor( is accomplished !he last element* the so7called control test* is the most
important element
,t can be deduced from the 2arch 1>>H affida"it of petitioner that respondents challenged his
authority to deli"er some 1B9 chec(s to S;C Considering that petitioner contested respondents#
challenge by pointing to the e%isting arrangements between ACC and S;C* it should be clear
that respondents did not e%ercise the power of control o"er petitioner* because he thereby acted
22
for the benefit and in the interest of S;C more than of ACC C#arlie "ao vs. 6CC &ro,ucts
Sales, 'nc. an, Terrance Ty, G.R. No. 131(!!, A+ril 18, !1.
Pro$ect employee; con"ersion into regular employee ,n all the 09 pro$ects where @2C, engaged
Jamin#s ser"ices* the tas(s he performed as a carpenter were indisputably necessary and
desirable in @2C,#s construction business He might not ha"e been a member of a wor( pool
since @2C, insisted that it does not maintain a wor( pool* but his continuous rehiring in 09
pro$ects o"er a period of 01 years and the nature of his wor( unmista(ably made him a regular
employee ,n 2araguinot* Jr " -=8C* 019 Phil B90 .1>>9/* the Court held that once a pro$ect
or wor( pool employee has been: .1/ continuously* as opposed to intermittently* rehired by the
same employer for the same tas(s or nature of tas(s; and .2/ these tas(s are "ital* necessary
and indispensable to the usual business or trade of the employer* then the employee must be
deemed a regular employee
Surely* length of time is not the controlling test for pro$ect employment but it is "ital in
determining if the employee was hired for a specific underta(ing or if it is tas(ed to perform
functions "ital* necessary and indispensable to the usual business or trade of the employer
Here* Cpri"ateD respondent had been a pro$ect employee se"eral times o"er !he nature of his
employment ceased to be pro$ect7based when he was repeatedly re7hired due to the demands
of petitioner#s business /.%. Consun0i, 'nc. an,2or /avi, %. Consun0i vs. 5stelito, G.R. No.
1.51), A+ril 18, !1.
@ismissal; willful disobedience ;or willful disobedience to be a "alid cause for dismissal* these
two elements must concur: .1/ the employee#s assailed conduct must ha"e been willful* that is*
characteri?ed by a wrongful and per"erse attitude; and .2/ the order "iolated must ha"e been
reasonable* lawful* made (nown to the employee* and must pertain to the duties which he had
been engaged to discharge
!he petitioner#s arbitrary defiance to Graphics* ,nc#s order for him to render o"ertime wor(
constitutes willful disobedience Aecause of his refusal to render o"ertime wor(* the company
failed to meet its printing deadlines* resulting in losses to the company !he Supreme Court too(
into account the fact that petitioner was inclined to absent himself and to report late for wor(
despite being pre"iously penali?ed* and affirmed the C'#s ruling that the petitioner is indeed
utterly defiant of the lawful orders and the reasonable wor( standards prescribed by his
employer !he Court reiterated its pre"ious rulings stating that an employer has the right to
re&uire the performance of o"ertime ser"ice in any of the situations contemplated under 'rticle
9> of the =abor Code and an employee#s non7compliance is willful disobedience Real,a v. Ne>
Age Gra+#ics, 'nc. et. al. G.R. No. 1.1.!, A+ril 5, !1.
@ismissal; inefficiency !he petitioner#s failure to obser"e Graphics* ,nc#s wor( standards
constitutes inefficiency that is a "alid cause for dismissal ;ailure to obser"e prescribed
standards of wor(* or to fulfill reasonable wor( assignments due to inefficiency may constitute
$ust cause for dismissal Such inefficiency is understood to mean failure to attain wor( goals or
wor( &uotas* either by failing to complete the same within the alloted reasonable period* or by
producing unsatisfactory results 's the operator of Graphics* ,nc#s printer* he is mandated to
chec( whether the colors that would be printed are in accordance with the client#s specifications
and for him to do so* he must consult the General 2anager and the color guide used by
Graphics* ,nc before ma(ing a full run !he employee in this case failed to obser"e this simple
procedure and proceeded to print without ma(ing sure that the colors were at par with the
client#s demands !his resulted to delays in the deli"ery of output* client dissatisfaction* and
additional costs to Graphics* ,nc Real,a v. Ne> Age Gra+#ics, 'nc. et. al. G.R. No. 1.1.!,
A+ril 5, !1.
@ismissal; due process ,n Hing o? Hings Trans+ort, 'nc. v. %amac* this Court laid down the
manner by which the procedural due re&uirements of due process can be satisfied:
.1/ !he )ir%" 'ri""en n!"i$e to be ser"ed on the employees should contain the specific
causes or grounds for termination against them* and a directi"e that the employees are gi"en
the opportunity to submit their written e%planation within a reasonable period )8easonable
opportunity+ under the 6mnibus 8ules means e"ery (ind of assistance that management must
accord to the employees to enable them to prepare ade&uately for their defense !his should
be construed as a period of at least fi"e .B/ calendar days from receipt of the notice to gi"e the
employees an opportunity to study the accusation against them* consult a union official or
lawyer* gather data and e"idence* and decide on the defenses they will raise against the
complaint 2oreo"er* in order to enable the employees to intelligently prepare their e%planation
20
and defenses* the notice should contain a detailed narration of the facts and circumstances that
will ser"e as basis for the charge against the employees ' general description of the charge
will not suffice Lastly* the notice should specifically mention which company rules* if any* are
"iolated andIor which among the grounds under 'rt 292 is being charged against the
employees
.2/ 'fter ser"ing the first notice* the employers should schedule and conduct a hearin* or
$!n)eren$e wherein the employees will be gi"en the opportunity to: .a/ e%plain and clarify their
defenses to the charge against them; .b/ present e"idence in support of their defenses; and .c/
rebut the e"idence presented against them by the management @uring the hearing or
conference* the employees are gi"en the chance to defend themsel"es personally* with the
assistance of a representati"e or counsel of their choice 2oreo"er* this conference or hearing
could be used by the parties as an opportunity to come to an amicable settlement
.0/ 'fter determining that termination of employment is $ustified* the employers shall ser"e the
employees a 'ri""en n!"i$e !) "erina"i!n indicating that: .1/ all circumstances in"ol"ing the
charge against the employees ha"e been considered; and .2/ grounds ha"e been established to
$ustify the se"erance of their employment
Graphics* ,nc failed to afford the petitioner with a reasonable opportunity to be heard and
defend itself 'n administrati"e hearing set on the same day that the petitioner recei"ed the
memorandum and the 217hour period gi"en to him to submit a written e%planation is far from
reasonable ;urthermore* there is no indication that Graphics* ,nc issued a second notice*
informing the petitioner of his dismissal Graphics* ,nc admitted that it decided to terminate the
petitioner#s employment when he ceased to report for wor( after being ser"ed with the
memorandum re&uiring him to e%plain and subse&uent to his failure to submit a written
e%planation Howe"er* there is nothing on record showing that Graphics* ,nc placed its decision
to dismiss in writing and that a copy thereof was sent to the petitioner -otwithstanding the
e%istence of a $ust cause to terminate petitioner#s employment* respondent was ordered to pay
P00*000 as nominal damages for "iolation of the employee#s right to due process Real,a v.
Ne> Age Gra+#ics, 'nc. et. al. G.R. No. 1.1.!, A+ril 5, !1.
@ismissal; willful disobedience :illful disobedience re&uires the concurrence of two elements:
.1/ the employee#s assailed conduct must ha"e been willful* that is* characteri?ed by a wrongful
and per"erse attitude; and .2/ the order "iolated must ha"e been reasonable* lawful* made
(nown to the employee* and must pertain to the duties which he had been engaged to
discharge Aoth elements are present in this case
;irst* at no point did the dismissed employees deny Qingspoint 5%press# claim that they refused
to comply with the directi"e for them to submit to a drug test or* at the "ery least* e%plain their
refusal !his gi"es rise to the impression that their non7compliance is deliberate !he utter lac(
of reason or $ustification for their insubordination indicates that it was prompted by mere
obstinacy* hence* willful thereby $ustifying their dismissal Second* that the company#s order to
undergo a drug test is necessary and rele"ant in the performance of petitioners# functions as
dri"ers of Qingspoint 5%press is ob"ious 's the -=8C correctly pointed out* dri"ers are
indispensable to Qingspoint 5%press# primary business of rendering door7to7door deli"ery
ser"ices ,t is common (nowledge that the use of dangerous drugs has ad"erse effects on
dri"ing abilities that may render employees incapable of performing their duties -ot only are
they acting against the interests of Qingspoint 5%press* they also pose a threat to the public
Ha=am+i an, its members, et al. v. Hings+oint 5:+ress an, Logistic an,2or %ary Ann Co, G.R.
No. 1.)811, A+ril 5, !1.
@ismissal; procedural due process re&uirements :hile Qingspoint 5%press had reason to se"er
petitioners# employment* this Court finds its supposed obser"ance of the re&uirements of
procedural due process pretentious :hile Qingspoint 5%press re&uired the dismissed
employees to e%plain their refusal to submit to a drug test* the two .2/ days afforded to them to
do so cannot &ualify as )reasonable opportunity+* which the Court construed in Qing of Qings
!ransport* ,nc " 2amac as a period of at least fi"e .B/ calendar days from receipt of the notice
!hus* e"en if a $ust cause e%ists for the dismissal of petitioners* Qingspoint 5%press is still liable
to indemnify the dismissed employees* with the e%ception of Panuelos* @i?on and @imabayao*
who did not appeal the dismissal of their complaints* with nominal damages in the amount of
P00*00000 Ha=am+i an, its members, et al. v. Hings+oint 5:+ress an, Logistic an,2or %ary
Ann Co, G.R. No. 1.)811, A+ril 5, !1.
21
June 2012 Philippine Supree C!ur" #e$i%i!n% !n La&!r La' an( Pr!$e(ure
Here are select June 2012 rulings of the Supreme Court of the Philippine on labor law and
procedure:
'ppeal; issue of employer7employee relationship raised for the first time on appeal ,t is a
fundamental rule of procedure that higher courts are precluded from entertaining matters neither
alleged in the pleadings nor raised during the proceedings below* but "entilated for the first time
only in a motion for reconsideration or on appeal !he alleged absence of employer7employee
relationship cannot be raised for the first time on appeal !he resolution of this issue re&uires
the admission and calibration of e"idence and the =' and the -=8C did not pass upon it in their
decisions Petitioner is bound by its submissions that respondent is its employee and it should
not be permitted to change its theory Such change of theory cannot be tolerated on appeal* not
on account of the strict application of procedural rules* but as a matter of fairness /uty 4ree
&#ili++ines Services, 'nc. vs. %anolito G. Tria. G8 -o 1F190> June 2F* 2012
@ismissal; abandonment 'bandonment cannot be inferred from the actuations of respondent
:hen he disco"ered that his time card was off the rac(* he immediately in&uired from his
super"isor He later sought the assistance of his counsel* who wrote a letter addressed to
Polyfoam re&uesting that he be re7admitted to wor( :hen said re&uest was not acted upon* he
filed the instant illegal dismissal case !hese circumstances clearly negate the intention to
abandon his wor( &oly?oam*RGC 'nternational, Cor+oration an, &recilla A. Grama0e vs.
5,gar,o Conce+cion. G8 -o 1F201>* June 10* 2012
@ismissal; due process !o meet the re&uirements of due process in the dismissal of an
employee* an employer must furnish the wor(er with two written notices: .1/ a written notice
specifying the grounds for termination and gi"ing to said employee a reasonable opportunity to
e%plain his side and .2/ another written notice indicating that* upon due consideration of all
circumstances* grounds ha"e been established to $ustify the employer#s decision to dismiss the
employee !he law does not re&uire that an intention to terminate one#s employment should be
included in the first notice ,t is enough that employees are properly apprised of the charges
brought against them so they can properly prepare their defenses ,t is only during the second
notice that the intention to terminate one#s employment should be e%plicitly stated
!he guiding principles in connection with the hearing re&uirement in dismissal cases are the
following:
1 )'mple opportunity to be heard+ means any meaningful opportunity ."erbal or written/
gi"en to the employee to answer the charges against him and submit e"idence in
support of his defense* whether in a hearing* conference or some other fair* $ust and
reasonable way
2 ' formal hearing or conference becomes mandatory only when re&uested by the
employee in writing or substantial e"identiary disputes e%ist or a company rule or
practice re&uires it* or when similar circumstances $ustify it
0 !he )ample opportunity to be heard+ standard in the =abor Code pre"ails o"er the
)hearing or conference+ re&uirement in the implementing rules and regulations
!he e%istence of an actual* formal )trial7type+ hearing* although preferred* is not absolutely
necessary to satisfy the employee#s right to be heard 5sguerra was able to present her
defenses; and only upon proper consideration of it did 3alle 3erde send the second
memorandum terminating her employment Since 3alle 3erde complied with the two7notice
re&uirement* no procedural defect e%ists in 5sguerra#s termination /olores T. 5sguerra vs.
$alle $er,e Country Club, 'nc. an, 5rnesto $illaluna G8 -o 1F0012* June 10* 2012
@ismissal; loss of trust and confidence !here are two .2/ classes of positions of trust !he first
class consists of managerial employees* or those "ested with the power to lay down
management policies; and the second class consists of cashiers* auditors* property custodians
or those who* in the normal and routine e%ercise of their functions* regularly handle significant
amounts of money or property 5sguerra held the position of Cost Control Super"isor and had
the duty to remit to the accounting department the cash sales proceeds from e"ery transaction
she was assigned to !his is not a routine tas( that a regular employee may perform; it is related
to the handling of business e%penditures or finances ;or this reason* 5sguerra occupies a
2B
position of trust and confidence < a position enumerated in the second class of positions of
trust 'ny breach of the trust imposed upon her can be a "alid cause for dismissal
=oss of confidence as a $ust cause for termination of employment can be in"o(ed when an
employee holds a position of responsibility* trust and confidence ,n order to constitute a $ust
cause for dismissal* the act complained of must be related to the performance of the duties of
the dismissed employee and must show that he or she is unfit to continue wor(ing for the
employer for "iolation of the trust reposed in him or her ,t was 5sguerra#s responsibility to
account for the cash proceeds; in case of problems* she should ha"e promptly reported it*
regardless of who was at fault ,nstead* she settled the unaccounted amount only after the
accounting department informed her about the discrepancy* almost one month following the
incident 5sguerra#s failure to ma(e the proper report reflects her irresponsibility in the custody
of cash for which she was accountable @olores ! 5sguerra "s 3alle 3erde Country Club* ,nc
and 5rnesto 3illaluna G8 -o 1F0012* June 10* 2012
@ismissal; serious misconduct and loss of trust and confidence @e$an is liable for "iolation of
Section F* paragraphs 1 and 11 of the Company Code of 5mployee @iscipline* constituting
serious misconduct* fraud and willful breach of trust of the employer* which are $ust causes for
termination of employment under the law !here is no dispute about the release of the meter
soc(ets 'lso* the persons in"ol"ed were clearly identified < @e$an; Go?arin* a pri"ate electrician
who recei"ed the meter soc(ets; 8eyes* the owner of the $eep where the meter soc(ets were
loaded by Go?arin; @uenas* a 2eralco field representati"e; and @epante* another pri"ate
electrician who purportedly owned the meter soc(ets !he release by @e$an of the meter
soc(ets to Go?arin without the written authority or SP' from the customer or customers who
applied for electric connection .as a matter of company policy/ ser"ed as a (ey element in
pro"ing the pri"ate contracting acti"ity for electric ser"ice connection being underta(en by @e$an
and @uenas
2oreo"er* it was bad enough that @e$an failed to as( for a written authori?ation from the
customers for the release of the meter soc(ets as re&uired by company policy* but the elaborate
scheme pursued by @e$an in concert with @uenas* were all underta(en to defraud 2eralco
Hence* 2eralco had "alid reasons for losing its trust and confidence in @e$an He is no ordinary
employee 's branch representati"e* he was principally charged with the function and
responsibility to accept payment of fees re&uired for the installation of electric ser"ice and
facilitate issuance of meter soc(ets !he duties of his position re&uire him to always act with the
highest degree of honesty* integrity and sincerity* as the company puts it ,n light of his
fraudulent act* 2eralco* an enterprise imbued with public interest* cannot be compelled to
continue @e$an#s employment* as it would be inimical to its interest %anila 5lectric Com+any
;%eralco< vs. Herminigil,o H. /e0an. G8 -o 1>110H* June 19* 2012
5mployee benefit; attorney#s fees =a?aro must establish a legal basis < either by law* contract
or other sources of obligations < to merit the receipt of the additional 10P attorney#s fees
collected in the "arious foreclosure procedures he settled as the ban(#s legal officer =a?aro has
not produced any contract or pro"ision of law that would warrant the payment of the additional
attorney#s fees He is only entitled to his salaries as the ban(#s legal officer* because the
ser"ices he rendered in the foreclosure proceedings were part of his official tas(s 6anco
4ili+ino Savings an, %ortgage 6an= vs. %iguelito %. La8aro2%iguelito %. La8aro vs. 6anco
4ili+ino Savings an, %ortgage 6an=, et al. G8 -o 19B01H S G8 -o 19B112 June 2F* 2012
5mployee benefit; retirement pay Aanco ;ilipino maintains that the se"en7year period when it
was under li&uidation should not be credited in computing =a?aro#s retirement pay because*
during that period* the ban( was considered closed !he Supreme Court held that ban(s under
li&uidation retain their legal personality ,n fact* e"en if they are prohibited from conducting
regular ban(ing business* it is necessary that debts owed to them be collected =a?aro
performed the duty of foreclosing debts in fa"or of Aanco ;ilipino ,t cannot rightfully disclaim
=a?aro#s wor( that benefitted it
's found in the ,mplementing 8ules of the 8etirement Pay =aw and in $urisprudence* only in the
absence of an applicable retirement agreement shall 'rticle 29F of the =abor Code apply !here
is a +roviso howe"er* that an employee#s retirement benefits under any agreement shall not be
less than those pro"ided in the said article !he 8ules of the Aanco ;ilipino 8etirement ;und do
not pro"ide for benefits lower than those in the =abor Code ,n fact* the ban( offers a retirement
pay e&ui"alent to one andone7half month salary for e"ery year of ser"ice* a rate o"er and abo"e
the one7half month salary threshold pro"ided by the law 'lthough the 8ules of the Aanco
;ilipino 8etirement ;und do not grant a rounding off scheme* they nonetheless pro"ide
2H
that prorated credit shall be gi"en for incomplete years* regardless of the fraction of months in
the retiree#s length of ser"ice -otwithstanding the lac( of a rounding7up pro"ision* still* the
higher retirement pay* together with the prorated crediting* cannot be deemed to be less
fa"orable than that pro"ided for by the law 4ltimately* the more important threshold to be
considered in construing whether the retirement agreement pro"ides less benefits* compared to
those pro"ided by the 8etirement Pay =aw* is that the retirement benefits in the said agreement
should at least amount to one7half of the employee#s monthly salary 6anco 4ili+ino Savings
an, %ortgage 6an= vs. %iguelito %. La8aro2%iguelito %. La8aro vs. 6anco 4ili+ino Savings an,
%ortgage 6an=, et al. G8 -o 19B01H S G8 -o 19B112 June 2F* 2012
5mployee dismissal :hen the floating status of employees lasts for more than si% .H/ months*
they may be considered to ha"e been illegally dismissed from the ser"ice );loating status+
means an indefinite period of time when one does not recei"e any salary or financial benefit
pro"ided by law ,n this case* petitioners were actually reassigned to new posts* albeit in a
different location from where they resided !hus* there can be no floating status or indefinite
period to spea( of ,nstead* petitioners were the ones who refused to report for wor( in their new
assignment
,n cases in"ol"ing security guards* a relief and transfer order in itself does not se"er the
employment relationship between the security guards and their agency 5mployees ha"e the
right to security of tenure* but this does not gi"e them such a "ested right to their positions as
would depri"e the company of its prerogati"e to change their assignment or transfer them where
their ser"ices* as security guards* will be most beneficial to the client 'n employer has the right
to transfer or assign its employees from one office or area of operation to another in pursuit of
its legitimate business interest* pro"ided there is no demotion in ran( or diminution of salary*
benefits* and other pri"ileges; and the transfer is not moti"ated by discrimination or bad faith* or
effected as a form of punishment or demotion without sufficient cause :hile petitioners may
claim that their transfer to 2anila will cause added e%penses and incon"enience* absent any
showing of bad faith or ill moti"e on the part of the employer* the transfer remains "alid
Salva,or 7. %o0ar, et al. vs. Agro Commercial Security Service Agency, et al. G8 -o
19F199* June 2F* 2012
5mployee dismissal; burden of proof 4nder the law* the burden of pro"ing that the termination
of employment was for a "alid or authori?ed cause rests on the employer ;ailure to discharge
this burden would result in an un$ust or illegal dismissal !he company#s e"idence on the
respondents# alleged infractions do not substantially show that they "iolated company rules and
regulations to warrant their dismissal ,t is ob"ious that the company o"erstepped the bounds of
its management prerogati"e in the dismissal of 2auricio and Camacho ,t lost sight of the
principle that management prerogati"e must be e%ercised in good faith and with due regard to
the rights of the wor(ers in the spirit of fairness and with $ustice in mind &#ilbag 'n,ustrial
%anu?acturing Cor+. vs. &#ilbag Cor=ers Anion*La=as at Gabay ng %anggaga>ang
Nag=a=aisa G8 -o 19219H* June 20* 2012
5mployee dismissal; due process 8etrenchment is sub$ect to faithful compliance with the
substanti"e and procedural re&uirements laid down by law and $urisprudence ;or a "alid
retrenchment* the following elements must be present:
1 !hat retrenchment is reasonably necessary and li(ely to pre"ent business losses which*
if already incurred* are not merely de minimis* but substantial* serious* actual and real*
or if only e%pected* are reasonably imminent as percei"ed ob$ecti"ely and in good faith
by the employer;
2 !hat the employer ser"ed written notice both to the employees and to the @epartment of
=abor and 5mployment at least one month prior to the intended date of retrenchment;
0 !hat the employer pays the retrenched employees separation pay e&ui"alent to one .1/
month pay or at least R month pay for e"ery year of ser"ice* whiche"er is higher;
1 !hat the employer e%ercises its prerogati"e to retrench employees in good faith for the
ad"ancement of its interest and not to defeat or circum"ent the employees# right to
security of tenure; and
B !hat the employer used fair and reasonable criteria in ascertaining who would be
dismissed and who would be retained among the employees* such as status* efficiency*
seniority* physical fitness* age* and financial hardship for certain wor(ers
2F
'll these elements were successfully pro"en by petitioner ;irst* the huge losses suffered by the
Club for the past two years had forced petitioner to close it down to a"ert further losses which
would e"entually affect the operations of petitioner Second* all 1B employees wor(ing in the
Club were ser"ed with notice of termination !he corresponding notice was li(ewise ser"ed to
the @6=5 one month prior to retrenchment !hird* the employees were offered separation pay*
most of whom ha"e accepted and opted not to $oin in this complaint ;ourth* the cessation of or
withdrawal from business operations was bona ?i,e in character and not impelled by a moti"e to
defeat or circum"ent the tenurial rights of employees :aterfront Cebu City Hotel "s 2a
2elanie P Jimene?* et al G8 -o 1F1211* June 10* 2012
5mployee dismissal; due process !he following are the guiding principles in connection with
the hearing re&uirement in dismissal cases:
1 )'mple opportunity to be heard+ means any meaningful opportunity ."erbal or written/
gi"en to the employee to answer the charges against him and submit e"idence in
support of his defense* whether in a hearing* conference or some other fair* $ust and
reasonable way
2 ' formal hearing or conference becomes mandatory only when re&uested by the
employee in writing or substantial e"identiary disputes e%ist or a company rule or
practice re&uires it* or when similar circumstances $ustify it
0 !he )ample opportunity to be heard+ standard in the =abor Code pre"ails o"er the
)hearing or conference+ re&uirement in the implementing rules and regulations
Gi"en that the petitioners e%pressly re&uested a conference or a con"ening of a grie"ance
committee* such formal hearing became mandatory 'fter PG', failed to affirmati"ely respond to
such re&uest* it follows that the hearing re&uirement was not complied with and* therefore*
3allota was denied his right to procedural due process &ru,ential Guarantee an, Assurance
5m+loyee Labor Anion an, San,y T. $allota vs. NLRC, &ru,ential Guarantee an, Assurance
'nc., an,2or "ocelyn Reti8os. G8 -o 19B00B* June 10* 2012
5mployee dismissal; $ust cause 'rticle 292.e/ of the =abor Code tal(s of other analogous
causes or those which are susceptible of comparison to another in general or in specific detail
as a cause for termination of employment ' cause analogous to serious misconduct is a
"oluntary andIor willful act or omission attesting to an employee#s moral depra"ity !heft
committed by an employee against a person other than his employer* if pro"en by substantial
e"idence* is a cause analogous to serious misconduct Pre"ious infractions may be cited as
$ustification for dismissing an employee only if they are related to the subse&uent offense
Howe"er* it must be noted that such a discussion was unnecessary since the theft* ta(en in
isolation from ;ermin#s other "iolations* was in itself a "alid cause for the termination of his
employment Cosmos 6ottling Cor+. vs. Cilson 4ermin2Cilson 4ermin vs. Cosmos 6ottling
Cor+. an, Cecilia 6autista. G8 -o 1>0HFH S G8 -o 1>1000 June 20* 2012
5mployee dismissal; loss of trust and confidence !he =abor Code recogni?es that an employer*
for $ust cause* may "alidly terminate the ser"ices of an employee for serious misconduct or
willful disobedience of the lawful orders of the employer or representati"e in connection with the
employee#s wor( ;raud or willful breach by the employee of the trust reposed by the employer
in the former* or simply loss of confidence* also $ustifies an employee#s dismissal from
employment :illful breach of trust or loss of confidence re&uires that the employee .1/
occupied a position of trust or .2/ was routinely charged with the care of the employer#s
property !o warrant dismissal based on loss of confidence* there must be some basis for the
loss of trust or the employer must ha"e reasonable grounds to belie"e that the employee is
responsible for the misconduct that renders the latter unworthy of the trust and confidence
demanded by his or her position ;or more than a month* the petitioners did not e"en inform
P=@! of the whereabouts of the plant materials ,nstead* he stoc(ed these materials at his
residence e"en if they were needed in the daily operations of the company ,n (eeping with the
honesty and integrity demanded by his position* he should ha"e turned o"er these materials to
the plant#s warehouse !hus* P=@! reasonably suspected petitioner of stealing the company#s
property 't that $uncture* the employer may already dismiss the employee since it had
reasonable grounds to belie"e or to entertain the moral con"iction that the latter was
responsible for the misconduct* and the nature of his participation therein rendered him
absolutely unworthy of the trust and confidence demanded by his position Romeo 5. &aulino
vs. NLRC, &#ili++ine Long /istance Co., 'nc G8 -o 1FH191* June 10* 2012
29
5mployee dismissal; loss of trust and confidence =oss of confidence as a $ust cause for
dismissal was ne"er intended to pro"ide employers with a blan( chec( for terminating their
employees ,t should ideally apply only to cases in"ol"ing employees occupying positions of
trust and confidence or to those situations where the employee is routinely charged with the
care and custody of the employer#s money or property !o the first class belong managerial
employees* ie* those "ested with the powers or prerogati"es to lay down management policies
andIor to hire* transfer* suspend* lay7off* recall* discharge* assign or discipline employees or
effecti"ely recommend such managerial actions; and to the second class belong cashiers*
auditors* property custodians* etc* or those who* in the normal and routine e%ercise of their
functions* regularly handle significant amounts of money or property
!he first re&uisite for dismissal on the ground of loss of trust and confidence is that the
employee concerned must be one holding a position of trust and confidence !he second
re&uisite is that there must be an act that would $ustify the loss of trust and confidence 3allota#s
position as Junior Programmer is analogous to the second class of positions of trust and
confidence !hough he did not physically handle money or property* he became pri"y to
confidential data or information by the nature of his functions 't a time when the most sensiti"e
of information is found not printed on paper but stored on hard dri"es and ser"ers* an employee
who handles or has access to data in electronic form naturally becomes the unwilling recipient
of confidential information !here was no other e"idence presented to pro"e fraud in the manner
of securing or obtaining the files found in 3allota#s computer !he presence of the files would
merely merit the de"elopment of some suspicion on the part of the employer* but should not
amount to a loss of trust and confidence such as to $ustify the termination of his employment
Such act is not of the same class* degree or gra"ity as the acts that ha"e been held to be of
such character &ru,ential Guarantee an, Assurance 5m+loyee Labor Anion an, San,y T.
$allota vs. NLRC, &ru,ential Guarantee an, Assurance 'nc., an,2or "ocelyn Reti8os. G8 -o
19B00B* June 10* 2012
5mployee dismissal; loss of trust and confidence !o "alidly dismiss an employee on the ground
of loss of trust and confidence under 'rticle 292 .c/ of the =abor Code of the Philippines* the
following guidelines must be obser"ed: 1/ loss of confidence should not be simulated; 2/ it
should not be used as subterfuge for causes which are improper* illegal or un$ustified; 0/ it may
not be arbitrarily asserted in the face of o"erwhelming e"idence to the contrary; and 1/ it must
be genuine* not a mere afterthought to $ustify earlier action ta(en in bad faith 2ore importantly*
it must be based on a willful breach of trust and founded on clearly established facts !he
testimony of =obitaOa constitutes substantial e"idence to pro"e that respondent* as the then
Power Plant 2anager* accepted commissions andIor )(ic(bac(s+ from suppliers* which is a
clear "iolation of Section 201 of petitioner#s Company 8ules and 8egulations Jurisprudence
consistently holds that for managerial employees* the mere e%istence of a basis for belie"ing
that such employee has breached the trust of his employer would suffice for his dismissal
8espondent#s termination was for a $ust and "alid cause A+o Cement Cor+oration $s. Ial,y 5.
6a+tisma. G8 -o 1FHHF1 June 20* 2012
5mployee dismissal; order of reinstatement 'rticle 220 of the =abor Code pro"ides that in case
there is an order of reinstatement* the employer must admit the dismissed employee under the
same terms and conditions* or merely reinstate the employee in the payroll !he order shall be
immediately e%ecutory !hus* 0rd 'lert cannot escape liability by simply in"o(ing that -a"ia did
not report for wor( !he law states that the employer must still reinstate the employee in the
payroll :here reinstatement is no longer "iable as an option* separation pay e&ui"alent to one
.1/ month salary for e"ery year of ser"ice could be awarded as an alternati"e 1r, Alert Security
an, /etective Services, 'nc. vs. Romual,o Navia. G8 -o 200HB0* June 10* 2012
5mployee dismissal; retrenchment 8etrenchment is the termination of employment initiated by
the employer through no fault of and without pre$udice to the employees ,t is resorted to during
periods of business recession* industrial depression* or seasonal fluctuations or during lulls
occasioned by lac( of orders* shortage of materials* con"ersion of the plant for a new production
program or the introduction of new methods or more efficient machinery or of automation ,t is
an act of the employer of dismissing employees because of losses in the operation of a
business* lac( of wor(* and considerable reduction on the "olume of his business ,n this case*
the closure of a department or di"ision of a company constitutes retrenchment by* and not
closure of* the company itself Petitioner has not totally ceased its business operations ,t
merely ceased operations of a department :aterfront Cebu City Hotel "s 2a 2elanie P
Jimene?* et al G8 -o 1F1211* June 10* 2012
2>
5mployee dismissal; willful breach of trust !he loss of trust and confidence must be based on
willful breach of the trust reposed in the employee by his employer Such breach is willful if it is
done intentionally* (nowingly* and purposely* without $ustifiable e%cuse* as distinguished from
an act done carelessly* thoughtlessly* heedlessly or inad"ertently 2oreo"er* it must be based
on substantial e"idence and not on the employer#s whims or caprices or suspicions otherwise*
the employee would eternally remain at the mercy of the employer !he Supreme Court has
laid down the guidelines for the application of the loss of trust and confidence doctrine: .1/ loss
of confidence should not be simulated; .2/ it should not be used as a subterfuge for causes
which are improper* illegal or un$ustified; .0/ it may not be arbitrarily asserted in the face of
o"erwhelming e"idence to the contrary; and .1/ it must be genuine* not a mere afterthought* to
$ustify an earlier action ta(en in bad faith 3illanue"a wor(ed for 2eralco as a Aranch
8epresentati"e whose tas(s included the issuance of Contracts for 5lectric Ser"ice after receipt
of the amount due for ser"ice connection from customers 6b"iously* he was entrusted not only
with the responsibility of handling company funds but also to cater to customers who intended to
a"ail of 2eralco#s ser"ices !his is nothing but an indication that trust and confidence were
reposed in him by the company* although his position was not strictly managerial by nature
2eralco#s loss of trust and confidence arising out of 3illanue"a#s act of misappropriation of
company funds in the course of processing customer applications has been pro"en by
substantial e"idence* thus* $ustified 3erily* the issuance of additional receipts for e%cessi"e
payments e%acted from customers is a willful breach of the trust reposed in him by the
company $icente $illanueva, "r. vs.. T#e National Labor Relations Commission, T#ir, /ivision,
%anila 5lectric Com+any, %anuel Lo+e8, C#airman an, C57, an, 4rancisco Collantes,
%anager G8 -o 1FH9>0* June 10* 2012
5mployee suit; damages !o obtain moral damages* the claimant must pro"e the e%istence of
bad faith by clear and con"incing e"idence* for the law always presumes good faith ,t is not
e"en enough that one merely suffered sleepless nights* mental anguish and serious an%iety as
the result of the actuations of the other party ,n this case* =a?aro did not state any moral
anguish that he suffered -either did he substantiate his imputations of malice to Aanco ;ilipino
He only made a sweeping declaration* without concrete proof* that the ban( in refusing his claim
maliciously damaged his property rights and interest 'ccordingly* neither moral damages nor
e%emplary damage can be awarded to him
:ith respect to attorney#s fees* an award is proper only if that person was forced to litigate and
incur e%penses to protect one#s rights and interest by reason of an un$ustified act or omission of
the party for whom it is sought Aanco ;ilipino had a prima facie legitimate defense that*
because it underwent li&uidation proceedings* it cannot be compelled to credit that period in the
computation of the employee#s the retirement pay and profit shares Considering that Aanco
;ilipino#s refusal cannot be accurately characteri?ed as un$ustified* =a?aro cannot claim an
award of attorney#s fees 6anco 4ili+ino Savings an, %ortgage 6an= vs. %iguelito %.
La8aro2%iguelito %. La8aro vs. 6anco 4ili+ino Savings an, %ortgage 6an=, et al. G8 -o
19B01H S G8 -o 19B112 June 2F* 2012
,ndependent contractor; tests Permissible $ob contracting or subcontracting refers to an
arrangement whereby a principal agrees to put out or farm out to a contractor or subcontractor
the performance or completion of a specific $ob* wor( or ser"ice within a definite or
predetermined period* regardless of whether such $ob* wor( or ser"ice is to be performed or
completed within or outside the premises of the principal ' person is considered engaged in
legitimate $ob contracting or subcontracting if the following conditions concur:
.a/ !he contractor or subcontractor carries on a distinct and independent business and
underta(es to perform the $ob* wor( or ser"ice on its own account and under its own
responsibility according to its own manner and method* and free from the control and direction
of the principal in all matters connected with the performance of the wor( e%cept as to the
results thereof;
.b/ !he contractor or subcontractor has substantial capital or in"estment; and
.c/ !he agreement between the principal and contractor or subcontractor assures the
contractual employees entitlement to all labor and occupational safety and health standards*
free e%ercise of the right to self7organi?ation* security of tenure* and social welfare benefits
,n contrast* labor7only contracting* a prohibited act* is an arrangement where the contractor or
subcontractor merely recruits* supplies or places wor(ers to perform a $ob* wor( or ser"ice for a
principal ,n labor7only contracting* the following elements are present:
00
.a/ !he contractor or subcontractor does not ha"e substantial capital or in"estment to actually
perform the $ob* wor( or ser"ice under its own account and responsibility; and
.b/ !he employees recruited* supplied or placed by such contractor or subcontractor* are
performing acti"ities which are directly related to the main business of the principal
!he test of independent contractorship is whether one claiming to be an independent contractor
has contracted to do the wor( according to his own methods and without being sub$ect to the
control of the employer* e%cept only as to the results of the wor(
Grama$e is not an independent $ob contractor* but a )labor7only+ contractor ;irst* Grama$e has
no substantial capital or in"estment !he presumption is that a contractor is a labor7only
contractor unless he o"ercomes the burden of pro"ing that it has substantial capital* in"estment*
tools* and the li(e -either Grama$e nor Polyfoam presented e"idence showing Grama$e#s
ownership of the e&uipment and machineries used in the performance of the alleged contracted
$ob
Second* Grama$e did not carry on an independent business or underta(e the performance of its
ser"ice contract according to its own manner and method* free from the control and super"ision
of its principal* Polyfoam* its apparent role ha"ing been merely to recruit persons to wor( for
Polyfoam ,t is undisputed that respondent had performed his tas( of pac(ing Polyfoam#s foam
products in Polyfoam#s premises 's to the recruitment of respondent* petitioners were able to
establish only that respondent#s application was referred to Grama$e* but that is all Prior to his
termination* respondent had been performing the same $ob in Polyfoam#s business for almost
si% .H/ years He was e"en furnished a copy of Polyfoam#s E%ga Alituntunin at Haram+atang
&arusa,F which embodied Polyfoam#s rules on attendance* the manner of performing the
employee#s duties* ethical standards* cleanliness* health* safety* peace and order !hese rules
carried with them the corresponding penalties in case of "iolation :hile it is true that petitioners
submitted the 'ffida"it of Polyfoam#s super"isor* claiming that the latter did not e%ercise
super"ision o"er respondent because the latter was not Polyfoam#s but Grama$e#s employee*
said 'ffida"it is insufficient to pro"e such claim Petitioners should ha"e presented the person
who they claim to ha"e e%ercised super"ision o"er respondent and their alleged other
employees assigned to Polyfoam ,t was ne"er established that Grama$e too( entire charge*
control and super"ision of the wor( and ser"ice agreed upon &oly?oam*RGC 'nternational,
Cor+oration an, &recilla A. Grama0e vs. 5,gar,o Conce+cion. G8 -o 1F201>* June 10* 2012
-=8C; $urisdiction o"er interpretation or implementation of the CA' 8' 9012 is a special law
go"erning o"erseas ;ilipino wor(ers Howe"er* there is no specific pro"ision thereunder which
pro"ides for $urisdiction o"er disputes or unresol"ed grie"ances regarding the interpretation or
implementation of a CA' Section 10 of 8' 9012 simply spea(s* in general* of )claims arising
out of an employer7employee relationship or by "irtue of any law or contract in"ol"ing ;ilipino
wor(ers for o"erseas deployment including claims for actual* moral* e%emplary and other forms
of damages+ 6n the other hand* 'rticles 21F.c/ and 2H1 of the =abor Code are "ery specific in
stating that "oluntary arbitrators ha"e $urisdiction o"er cases arising from the interpretation or
implementation of collecti"e bargaining agreements ,n the present case* the basic issue raised
by 2erridy Jane in her complaint filed with the -=8C is: which pro"ision of the sub$ect CA'
applies insofar as death benefits due to the heirs of -elson are concerned !his issue clearly
in"ol"es the interpretation or implementation of the said CA' !hus* the specific or special
pro"isions of the =abor Code go"ern
CA' is the law or contract between the parties 'rticle 101 of the CA' entered into by and
between respondent GC, and '26S4P pro"ides that the Company and the 4nion agree that in
case of dispute or conflict in the interpretation or application of any of the pro"isions of this
'greement* or enforcement of Company policies* the same shall be settled through negotiation*
conciliation or "oluntary arbitration !he pro"isions of the CA' are in consonance with 8ule 3,,*
Section F of the present 6mnibus 8ules and 8egulations ,mplementing the 2igrant :or(ers
and 6"erseas ;ilipinos 'ct of 1>>B* as amended by 8epublic 'ct -o 10022* which states that
for 6;:s with collecti"e bargaining agreements* the case shall be submitted for "oluntary
arbitration in accordance with 'rticles 2H1 and 2H2 of the =abor Code :ith respect to disputes
in"ol"ing claims of ;ilipino seafarers wherein the parties are co"ered by a collecti"e bargaining
agreement* the dispute or claim should be submitted to the $urisdiction of a "oluntary arbitrator
or panel of arbitrators ,t is only in the absence of a collecti"e bargaining agreement that parties
may opt to submit the dispute to either the -=8C or to "oluntary arbitration 5state o? Nelson R.
/ulay, re+resente, by #is >i?e %e,,iry "ane &. /ulay vs. Aboiti8 "ebsen %aritime, 'nc. an,
General C#arterers, 'nc. G8 -o 1F2H12* June 10* 2012
01
Ser"ice; proof of ser"ice Petitioners allege that no affida"it of ser"ice was attached to the C'
Petition Howe"er* the Supreme Court noted that in the C' 8esolution* the appellate court
stated that their records re"ealed that 'tty 5spinas* petitioners# counsel of record at the time*
was duly ser"ed a copy of the following: C' 8esolution granting respondent#s 2otion for
5%tension of !ime to file the C' Petition; C' 8esolution re&uiring petitioners to file their
Comment on the C' Petition; and C' 8esolution* submitting the case for resolution* as no
comment was filed Such ser"ice to 'tty 5spinas was "alid despite the fact he was already
deceased at the time ,f a party to a case has appeared by counsel* ser"ice of pleadings and
$udgments shall be made upon his counsel or one of them* unless ser"ice upon the party is
specifically ordered by the court ,t is not the duty of the courts to in&uire* during the progress of
a case* whether the law firm or partnership representing one of the litigants continues to e%ist
lawfully* whether the partners are still ali"e* or whether its associates are still connected with the
firm Salva,or 7. %o0ar, et al. vs. Agro Commercial Security Service Agency, et al. G8 -o
19F199* June 2F* 2012
July 2012 Philippine Supree C!ur" #e$i%i!n% !n La&!r La' an( Pr!$e(ure
Here are select July 2012 rulings of the Supreme Court of the Philippines on labor law and
procedure:
@ismissal; due process @ue process re&uirement is met when there is simply an opportunity to
be heard and to e%plain one#s side e"en if no hearing is conducted 'n employee may be
afforded ample opportunity to be heard by means of any method* "erbal or written* whether in a
hearing* conference or some other fair* $ust and reasonable way 'fter recei"ing the first notice
apprising him of the charges against him* the employee may submit a written e%planation .which
may be in the form of a letter* memorandum* affida"it or position paper/ and offer e"idence in
support thereof* li(e rele"ant company records and the sworn statements of his witnesses ;or
this purpose* he may prepare his e%planation personally or with the assistance of a
representati"e or counsel He may also as( the employer to pro"ide him copy of records
material to his defense His written e%planation may also include a re&uest that a formal hearing
or conference be held ,n such a case* the conduct of a formal hearing or conference becomes
mandatory* $ust as it is where there e%ist substantial e"identiary disputes or where company
rules or practice re&uires an actual hearing as part of employment pre7termination procedure
Petitioner#s written response to the prere&uisite notice pro"ided her with an a"enue to e%plain
and defend her side and thus ser"ed the purpose of due process !hat there was no hearing*
in"estigation or right to appeal* which petitioner opined to be a "iolation of company policies* is
of no moment since the record is bereft of any showing that there is an e%isting company policy
that re&uires these procedures with respect to the termination of a CH8 @irector li(e petitioner
or that company practice calls for the same !here was also no re&uest for a formal hearing on
the part of petitioner 's she was ser"ed with a notice apprising her of the charges against her
and also a subse&uent notice informing her of the management#s decision to terminate her
ser"ices after respondents found her written response to the first notice unsatisfactory*
petitioner was clearly afforded her right to due process 4lor,eli8a %aria Reyes*Rayel vs.
&#ili++ine Luen T#ai Hol,ings Cor+oration, et al. G8 -o 1F19>0* July 11* 2012
@ismissal; loss of trust and confidence 'n employer has a distinct prerogati"e and wider
latitude of discretion in dismissing a managerial personnel who performs functions which by
their nature re&uire the employer#s full trust and confidence's distinguished from a ran( and file
personnel* mere e%istence of a basis for belie"ing that a managerial employee has breached
the trust of the employer $ustifies dismissal =oss of confidence as a ground for dismissal does
not re&uire proof beyond reasonable doubt as the law re&uires only that there be at least some
basis to $ustify it
Petitioner was =S!#s CH8 @irector for 2anufacturing* which is a managerial position saddled
with great responsibility 's such* she was directly responsible for managing her own
departmental staff Aecause of this* petitioner must en$oy the full trust and confidence of her
superiors Howe"er* petitioner deli"ered dismal performance and displayed poor wor( attitude*
which constitute sufficient reasons for an employer to terminate an employee on the ground of
loss of trust and confidence ;irst* records show that petitioner indeed unreasonably failed to
effecti"ely communicate with her immediate superior Second* the affida"its of petitioner#s co7
wor(ers re"ealed her negati"e attitude and unprofessional beha"ior towards them and the
company =astly* petitioner displayed inefficiency and ineptitude in her $ob as a CH8 @irector
02
!a(ing all these circumstances collecti"ely* the Court is con"inced that respondents ha"e
sufficient and "alid reasons for terminating the ser"ices of petitioner as her continued
employment would be patently inimical to respondents# interest 4lor,eli8a %aria Reyes*Rayel
vs. &#ili++ine Luen T#ai Hol,ings Cor+oration, et al. G8 -o 1F19>0* July 11* 2012
5mployee dismissal; "alidity of termination 8etrenchment is one of the authori?ed causes for
the dismissal of employees recogni?ed by the =abor Code ,t is a management prerogati"e
resorted to by employers to a"oid or to minimi?e business losses !he Court has laid down the
following standards that an employer should meet to $ustify retrenchment and to foil abuse*
namely:
.a/ !he e%pected losses should be substantial and not merely ,e minimis in e%tent;
.b/ !he substantial losses apprehended must be reasonably imminent;
.c/ !he retrenchment must be reasonably necessary and li(ely to effecti"ely pre"ent the
e%pected losses; and
.d/ !he alleged losses* if already incurred* and the e%pected imminent losses sought to be
forestalled must be pro"ed by sufficient and con"incing e"idence
,n termination cases* the burden of pro"ing that the dismissal was for a "alid or authori?ed
cause rests upon the employer !he petitioner did not submit e"idence of the losses to its
business operations and the economic ha"oc it would thereby imminently sustain ,t only
claimed that respondent#s termination was due to its )present businessIfinancial condition+ !his
bare statement fell short of the norm to show a "alid retrenchment ,ndeed* not e"ery loss
incurred or e%pected to be incurred by an employer can $ustify retrenchment !he employer
must pro"e* among others* that the losses are substantial and that the retrenchment is
reasonably necessary to a"ert such losses !hus* by its failure to present sufficient and
con"incing e"idence to pro"e that retrenchment was necessary* respondent#s termination due to
retrenchment is not allowed Legen, Hotel D%anilaJ, o>ne, by Titatium Cor+oration, et al. vs.
Hernani S. Realuyo, also =no>n as "oey Roa. G8 -o 1B0B11* July 19* 2012
5mployee training; reimbursement !he Supreme Court recogni?ed the right of P'= to recoup
the costs of a pilot#s training in the form of ser"ice for a period of at least three .0/ years Ay
carrying o"er the same stipulation setting the age of fifty7se"en .BF/ years as the rec(oning
point when a pilot becomes dis&ualified to bid for a higher position in the present CA'* both P'=
and '=P'P recogni?ed that the company#s effort in sending pilots for training abroad is an
in"estment which necessarily e%pects a reasonable return in the form of ser"ice for a period of
at least three .0/ years !his stipulation had been repeatedly adopted by the parties in the
succeeding renewals of their CA'* thus "alidating the impression that it is a reasonable and
acceptable term to both P'= and '=P'P Conse&uently* the petitioner cannot con"eniently
disregard this stipulation by simply raising the absence of a contract e%pressly re&uiring the pilot
to remain within P'=#s employ within a period of 0 years after he has been sent on training !he
supposed absence of contract being raised by the petitioner cannot stand as the CA' clearly
co"ered the petitioner#s obligation to render ser"ice to P'= within 0 years to enable it to recoup
the costs of its in"estment 6ibiano C. 5legir vs. &#ili++ine Airlines, 'nc. G8 -o 191>>B* July
1H* 2012
5mployer7employee relationship; e%istence !he issue of whether or not an employer7employee
relationship e%isted is essentially a &uestion of fact !he factors that determine the issue include
who has the power to select the employee* who pays the employee#s wages* who has the
power to dismiss the employee* and who e%ercises control of the methods and results by which
the wor( of the employee is accomplished 'lthough no particular form of e"idence is re&uired
to pro"e the e%istence of the relationship* and any competent and rele"ant e"idence to pro"e
the relationship may be admitted* a finding that the relationship e%ists must nonetheless rest on
substantial e"idence* which is that amount of rele"ant e"idence that a reasonable mind might
accept as ade&uate to $ustify a conclusion
' re"iew of the circumstances re"eals that respondent was* indeed* petitioner#s employee He
was undeniably employed as a pianist in petitioner#s 8estaurant ;irst of all* petitioner actually
wielded the power of selection at the time it entered into the ser"ice contract with respondent
!he power of selection was firmly e"idenced by* among others* the e%press written
recommendation by petitioner#s restaurant manager* for the increase of his remuneration
00
Secondly* there is no denying that the remuneration denominated as talent fees was fi%ed on
the basis of his talent and s(ill and the &uality of the music he played during the hours of
performance each night* ta(ing into account the pre"ailing rate for similar talents in the
entertainment industry 8espondent#s remuneration* albeit denominated as talent fees* was still
considered as included in the term wagein the sense and conte%t of the =abor Code* regardless
of how petitioner chose to designate the remuneration !hirdly* the petitioner has the power to
dismiss respondent !he memorandum informing respondent of the discontinuance of his
ser"ice because of the present business or financial condition of petitioner showed that the
latter had the power to dismiss him from employment =astly* the power of the employer to
control the wor( of the employee is considered the most significant determinant of the e%istence
of an employer7employee relationship !his is the so7called control test* and is premised on
whether the person for whom the ser"ices are performed reser"es the right to control both the
end achie"ed and the manner and means used to achie"e that end 8espondent performed his
wor( as a pianist under petitioner#s super"ision and control Petitioner#s control of both the end
achie"ed and the manner and means used to achie"e that end was demonstrated by the
following* to wit: .1/He could not choose the time of his performance* which petitioners had fi%ed
from F:00 pm to 10:00 pm* three to si% times a wee(; .2/He could not choose the place of his
performance; .0/ !he restaurant#s manager re&uired him at certain times to perform only
!agalog songs or music* or to wear barong !agalog to conform to the ;ilipiniana motif; and
.1/He was sub$ected to the rules on employees# representation chec( and chits* a pri"ilege
granted to other employees Legen, Hotel D%anilaJ, o>ne, by Titatium Cor+oration, et al. vs.
Hernani S. Realuyo, also =no>n as "oey Roa. G8 -o 1B0B11* July 19* 2012
2anagement prerogati"e; transfer of employees 'n employer#s decision to transfer an
employee* if made in good faith* is a "alid e%ercise of a management prerogati"e* although it
may result in personal incon"enience or hardship to the employee 8e7assignments made by
management pending in"estigation of irregularities allegedly committed by an employee fall
within the ambit of management prerogati"e !he purpose of reassignments is no different from
that of pre"enti"e suspension which management could "alidly impose as a disciplinary
measure for the protection of the company#s property pending in"estigation of any alleged
malfeasance or misfeasance committed by the employee
's the e%ecuti"e assistant of the president* petitioner undeniably occupied a sensiti"e position
that re&uired her employer#s utmost trust and confidence Ha"ing lost his trust and confidence in
petitioner* respondent @elfin had the right to transfer her to ensure that she would no longer
ha"e access to the companies# confidential files 'lthough it is true that petitioner has yet to be
pro"en guilty* respondents had the authority to reassign her* pending in"estigation :hen
petitioner was assigned to Ca"ite* there was an ongoing in"estigation of the charges filed
against her ,t is undisputed that she refused to fill up* for no $ustifiable reasons* the
&uestionnaire distributed by her employer to determine who among those who had access to
the confidential files was responsible for their ta(ing ;urthermore* a witness had e%ecuted an
'ffida"it claiming that she found the missing files* and that her husband told her that it was
petitioner who handed those files to him =astly* the person who supposedly recei"ed these
documents from petitioner did not deny or rebu(e the statements made by his wife "ose+#ine
Rui8 vs. Cen,el 7sa=a Realty Cor+., et al. G8 -o 19>092* July 11* 2012
8etirement Pay; collecti"e bargaining agreement 'rticle 29F of the =abor Code pro"ides that it
is applicable only to a situation where .1/ there is no CA' or other applicable employment
contract pro"iding for retirement benefits for an employee* or .2/ there is a CA' or other
applicable employment contract pro"iding for retirement benefits for an employee* but it is below
the re&uirement set by law !he rationale for the first situation is to pre"ent the absurd situation
where an employee* deser"ing to recei"e retirement benefits* is denied to them through the
nefarious scheme of employers to depri"e employees of the benefits due them under e%isting
labor laws 6n the other hand* the second situation aims to pre"ent pri"ate contracts from
derogating from the public law !he determining factor in choosing which retirement scheme to
apply is still superiorityin terms of benefits pro"ided !hus* e"en if there is an e%isting CA' but
the same does not pro"ide for retirement benefits e&ual or superior to that which is pro"ided
under 'rticle 29F of the =abor Code* the latter will apply
!here are two retirement schemes at point in this case: .1/ 'rticle 29F of the =abor Code* and;
.2/ the P'=7'=P'P 8etirement Plan and the P'= Pilots# 8etirement Aenefit Plan !he two
retirement schemes are alternati"e in nature such that the retired pilot can only be entitled to
that which pro"ides for superior benefits Comparing the benefits under the two .2/ retirement
schemes* it can readily be percei"ed that the 22B days worth of salary for e"ery year of ser"ice
pro"ided under 'rticle 29F of the =abor Code cannot match the 210P of salary or almost two
01
and a half worth of monthly salary per year of ser"ice pro"ided under the P'= Pilots# 8etirement
Aenefit Plan* which will be further added to the 12B*00000 to which the petitioner is entitled
under the P'=7'=P'P 8etirement Plan Clearly then* it is to the petitioner#s ad"antage that
P'=#s retirement plans were applied in the computation of his retirement benefits 6ibiano C.
5legir vs. &#ili++ine Airlines, 'nc. G8 -o 191>>B* July 1H* 2012
4n$ust enrichment !here is un$ust enrichment when a person un$ustly retains a benefit at the
loss of another* or when a person retains the money or property of another against the
fundamental principles of $ustice* e&uity and good conscience !wo conditions must concur: .1/
a person is un$ustly benefited; and .2/ such benefit is deri"ed at the e%pense of or with damages
to another !he enrichment may consist of a patrimonial* physical* or moral ad"antage* so long
as it is appreciable in money ,t must ha"e a correlati"e pre$udice* disad"antage or in$ury to the
plaintiff which may consist* not only of the loss of the property or the depri"ation of its
en$oyment* but also of the non7payment of compensation for a prestation or ser"ice rendered to
the defendant without intent to donate on the part of the plaintiff* or the failure to ac&uire
something that the latter would ha"e obtained
P'= in"ested a considerable amount of money in sending the petitioner abroad to undergo
training to prepare him for his new appointment as AF1F7100 Captain ,n the process* the
petitioner ac&uired new (nowledge and s(ills which effecti"ely enriched his technical (now7how
's all other in"estors* P'= e%pects a return on in"estment in the form of ser"ice by the
petitioner for a period of 0 years* which is the estimated length of time within which the costs of
the latter#s training can be fully reco"ered !he petitioner is* thus* e%pected to wor( for P'= and
utili?e whate"er (nowledge he had learned from the training for the benefit of the company
Howe"er* after only one .1/ year of ser"ice* the petitioner opted to retire from ser"ice* lea"ing
P'= stripped of a necessary manpower 4ndeniably* the petitioner was enriched at the e%pense
of P'= 'fter undergoing the training fully shouldered by P'=* he ac&uired a higher le"el of
technical competence which* in the professional realm* translates to a higher compensation
;urther* his training broadened his opportunities for a better employment as in fact he was able
to transfer to another airline company immediately after he left P'= !o allow the petitioner to
simply lea"e the company without reimbursing it for the proportionate amount of the e%penses it
incurred for his training will only magnify the financial disad"antage sustained by P'= 8eason
and fairness dictate that he must return to the company a proportionate amount of the costs of
his training 6ibiano C. 5legir vs. &#ili++ine Airlines, 'nc. G8 -o 191>>B* July 1H* 2012
Au*u%" 2012 Philippine Supree C!ur" #e$i%i!n% !n La&!r La' an( Pr!$e(ure
Here are select rulings of the Philippine Supreme Court on labor law and procedure:
@isability benefits; entitlement 5ntitlement of seafarers to disability benefits is go"erned not
only by medical findings but also by contract and by law Ay contract* @epartment 6rder -o 1*
series of 2000* of the @epartment of =abor and 5mployment and the parties# Collecti"e
Aargaining 'greement bind the seafarer and the employer Ay law* the =abor Code pro"isions
on disability apply with e&ual force to seafarers !he seafarer* upon sign7off from his "essel*
must report to the company7designated physician within three .0/ days from arri"al for diagnosis
and treatment ;or the duration of the treatment but in no case to e%ceed 120 days* the seaman
is on temporary total disability as he is totally unable to wor( He recei"es his basic wage during
this period until he is declared fit to wor( or his temporary disability is ac(nowledged by the
company to be permanent* either partially or totally* as his condition is defined under the P65'
Standard 5mployment Contract and by applicable Philippine laws ,f the 120 days initial period
is e%ceeded and no such declaration is made because the seafarer re&uires further medical
attention* then the temporary total disability period may be e%tended up to a ma%imum of 210
days* sub$ect to the right of the employer to declare within this period that a permanent partial or
total disability already e%ists !he seaman may of course also be declared fit to wor( at any time
such declaration is $ustified by his medical condition
;rom the time !omacru? was repatriated on -o"ember 19* 2002* he submitted himself to the
care and treatment of the company7designated physician :hen the company7designated
physician made a declaration on July 2B* 2000 that !omacru? was already fit to wor(* 21> days
had already lapsed from the time he was repatriated 's such* his temporary total disability
should be deemed total and permanent* pursuant to 'rticle 1>2 .c/.1/ of the =abor Code and its
implementing rule &#ilasia S#i++ing Agency Cor+oration, et al. vs. An,res G. Tomacru8. G8
-o 191190* 'ugust 1B* 2012
0B
5mployee dismissal; due process re&uirements !he following standards of due process shall
be substantially obser"ed for termination of employment based on $ust causes as defined in
'rticle 292 of the =abor Code:
.i/ ' written notice ser"ed on the employee specifying the ground or grounds for termination*
and gi"ing said employee reasonable opportunity within which to e%plain his side
.ii/ ' hearing or conference during which the employee concerned* with the assistance of
counsel if he so desires is gi"en opportunity to respond to the charge* present his e"idence or
rebut the e"idence presented against him
.iii/ ' written notice of termination ser"ed on the employee* indicating that upon due
consideration of all the circumstances* grounds ha"e been established to $ustify his termination
Petitioners# e"idence fails to pro"e their contention that they afforded 'tencio with due process
!he June 21* 1>>> letter* which allegedly pro"es 'tencio#s (nowledge of the charges against
him* and which allegedly constitutes 'tencio#s e%planation* clearly discusses an entirely
different topic < which is the remo"al of his construction company from the Calte% pro$ect 's for
the 2ay 21* 1>>> letter* which allegedly constitutes the notice of termination of 'tencio#s
employment as J'8=#s chief operating manager* the said letter in"ol"es the termination of the
subcontracting agreement between J'8= and 'tencio#s company* and not the termination of
'tencio#s employment ;or petitioners# failure to obser"e the two7notice rule under 'rticle 2FF.b/
of the =abor Code* respondent is entitled to nominal damages "arl Construction an, Arman,o
H. Te0a,a vs. Simeon A. Atencio. G8 -o 1FB>H>* 'ugust 1* 2012
Judgment; law of the case!he law of the case has been defined as the opinion deli"ered on a
former appeal ,t means that whate"er is once irre"ocably established as the controlling legal
rule or decision between the same parties in the same case continues to be the law of the case*
whether correct on general principles or not* so long as the facts on which such decision was
predicated continue to be the facts of the case before the court
Aoth G8 -o 1H91FF and this petition are offshoots of petitioner#s purported temporary
measures to preser"e its neutrality with regard to the percei"ed "oid in the union leadership
:hile these two cases arose out of different notices to stri(e* it is undeniable that the facts cited
and the arguments raised by petitioner are almost identical ,ne"itably* G8 -o 1H91FF and
this petition see( only one relief* that is* to absol"e petitioner from respondent#s charge of
committing an unfair labor practice ;or this reason* we are constrained to apply the law of the
case doctrine in light of the finality of our July 20* 200B and September 21* 200B resolutions in
G8 -o 1H91FF ,n other words* our pre"ious affirmance of the Court of 'ppeals# finding < that
petitioner erred in suspending collecti"e bargaining negotiations with the union and in placing
the union funds in escrow considering the intra7union dispute between the 'lia?as and AaOe?
factions was not a $ustification therefor N is binding in the present case /e la Salle Aniversity
vs. /e la Salle Aniversity 5m+loyees Association. G8 -o 1H>2B1 'ugust 20* 2012
=ien; unpaid wages 4nder 8epublic 'ct -o 10112* otherwise (nown as the ;inancial
8ehabilitation and ,nsol"ency 'ct of 2010* the right of a secured creditor to enforce his lien
during li&uidation proceedings is retained 6n the right of first preference as regards unpaid
wages* a distinction should be made between a preference of credit and a lien ' preference
applies only to claims which do not attach to specific properties ' lien creates a charge on a
particular property !he right of first preference as regards unpaid wages recogni?ed by 'rticle
110 of the =abor Code does not constitute a lien on the property of the insol"ent debtor in fa"or
of wor(ers ,t is but a preference of credit in their fa"or* a preference in application ,t is a
method adopted to determine and specify the order in which credits should be paid in the final
distribution of the proceeds of the insol"ent#s assets ,t is a right to a first preference in the
discharge of the funds of the $udgment debtor Conse&uently* the right of first preference for
unpaid wages may not be in"o(ed in this case to nullify the foreclosure sales conducted
pursuant to P-A#s right as a secured creditor to enforce its lien on specific properties of its
debtor* '8C'2 %anuel /. 9ngson, "r., ;in #is ca+acity as t#e Li-ui,ator o? ARCA% @ Co.,
'nc.< vs. &#ili++ine National 6an= G8 -o 1F1102* 'ugust 1B* 2012
-=8C; $urisdiction 'lthough 8epublic 'ct -o 9012* through its Section 10* transferred the
original and e%clusi"e $urisdiction to hear and decide money claims in"ol"ing o"erseas ;ilipino
wor(ers from the P65' to the =abor 'rbiters* the law did not remo"e from the P65' the
original and e%clusi"e $urisdiction to hear and decide all disciplinary action cases and other
special cases administrati"e in character in"ol"ing such wor(ers !he ob"ious intent of 8epublic
0H
'ct -o 9012 was to ha"e the P65' focus its efforts in resol"ing all administrati"e matters
affecting and in"ol"ing such wor(ers !he -=8C had no appellate $urisdiction to re"iew the
decision of the P65' in disciplinary cases in"ol"ing o"erseas contract wor(ers
'lthough* as a rule* all laws are prospecti"e in application unless the contrary is e%pressly
pro"ided* or unless the law is procedural or curati"e in nature* there is no serious &uestion
about the retroacti"e applicability of 8epublic 'ct -o 9012 to the appeal of the P65'#s decision
on petitioners# disciplinary action against respondents ,n a way* 8epublic 'ct -o 9012 was a
procedural law due to its pro"iding or omitting guidelines on appeal 8epublic 'ct -o 9012
applies to petitioners# complaint by "irtue of the case being then still pending or undetermined at
the time of the law#s passage* there being no "ested rights in rules of procedure !hey could not
"alidly insist that the rec(oning period to ascertain which law or rule should apply was the time
when the disciplinary complaint was originally filed in the P65' in 1>>0 2oreo"er* 8epublic 'ct
-o 9012 and its implementing rules and regulations were already in effect when petitioners
too( their appeal :hen 8epublic 'ct -o 9012 withheld the appellate $urisdiction of the -=8C
in respect of cases decided by the P65'* the appellate $urisdiction was "ested in the Secretary
of =abor in accordance with his power of super"ision and control under Section 09.1/* Chapter
F* !itle ,,* Aoo( ,,, of the 8e"ised 'dministrati"e Code of 1>9F 5astern %e,iterranean %aritime
Lt,., et al. vs. 5stanislao Surio, et al. G8 -o 1B1210* 'ugust 20* 2012
Petition for re"iew; &uestion of fact :hile generally* only &uestions of law can be raised in a
petition for re"iew on certiorari under 8ule 1B of the 8ules of Court* the rule admits of certain
e%ceptions* namely: .1/ when the findings are grounded entirely on speculations* surmises* or
con$ectures; .2/ when the inference made is manifestly mista(en* absurd* or impossible; .0/
when there is a gra"e abuse of discretion; .1/ when the $udgment is based on misappreciation of
facts; .B/ when the findings of fact are conflicting; .H/ when in ma(ing its findings* the same are
contrary to the admissions of both appellant and appellee; .F/ when the findings are contrary to
those of the trial court; .9/ when the findings are conclusions without citation of specific
e"idence on which they are based; .>/ when the facts set forth in the petition as well as in the
petitioner#s main and reply briefs are not disputed by the respondent; and .10/ when the findings
of fact are premised on the supposed absence of e"idence and contradicted by the e"idence on
record !he illegality of petitioner#s dismissal was an issue that was s&uarely raised before the
-=8C :hen the -=8C decision was re"ersed by the Court of 'ppeals* there was a situation
where )the findings of facts are conflicting+ !he petition for re"iew filed by the Petitioner comes
within the pur"iew of e%ception .B/ and by analogy* e%ception .F/ %ylene Carva0al vs. Lu8on
/evelo+ment 6an= an,2or 7scar I. Ramire8. G8 -o 19H1H>* 'ugust 1* 2012
Probationary employee; security of tenure ' probationary employee* li(e a regular employee*
en$oys security of tenure Howe"er* in cases of probationary employment* aside from $ust or
authori?ed causes of termination* an additional ground is pro"ided under 'rticle 291 of the
=abor Code* i.e., the probationary employee may also be terminated for failure to &ualify as a
regular employee in accordance with reasonable standards made (nown by the employer to the
employee at the time of the engagement
Punctuality is a reasonable standard imposed on e"ery employee* whether in go"ernment or
pri"ate sector 's a matter of fact* habitual tardiness is a serious offense that may "ery well
constitute gross or habitual neglect of duty* a $ust cause to dismiss a regular employee
'ssuming that petitioner was not apprised of the standards concomitant to her $ob* it is but
common sense that she must abide by the wor( hours imposed by the ban( Satisfactory
performance is and should be one of the basic standards for regulari?ation -aturally* before an
employer hires an employee* the former can re&uire the employee* upon his engagement* to
undergo a trial period during which the employer determines his fitness to &ualify for regular
employment based on reasonable standards made (nown to him at the time of engagement
,t is e"ident that the primary cause of respondent#s dismissal from her probationary employment
was her )chronic tardiness+ 't the "ery start of her employment* petitioner already e%hibited
poor wor(ing habits 5"en during her first month on the $ob* she already incurred eight .9/
tardiness 8espondent also cited other infractions such as unauthori?ed lea"es of absence*
mista(e in clearing of a chec(* and underperformance 'll of these infractions were not refuted
by petitioner %ylene Carva0al vs. Lu8on /evelo+ment 6an= an,2or 7scar I. Ramire8. G8 -o
19H1H>* 'ugust 1* 2012
Salaries; burden of proof of payment :hen there is an allegation of nonpayment of salaries and
other monetary benefits* it is the employer#s burden to pro"e its payment to its employee !he
employer#s e"idence must show* with a reasonable degree of certainty* that it paid and that the
0F
wor(ers actually recei"ed the payment !he reason for the rule is that the pertinent personnel
files* payrolls* records* remittances and other similar documents are not in the possession of the
wor(er but are in the custody and absolute control of the employer ,n the case at bar* the two
official receipts issued by Safemar(* and offered as J'8=#s e"idence* only pro"e that J'8=
made a total partial payment of P1*9>1*B0>B0 to the said company for its )professional
ser"ices+ Since J'8= admits that the said company actually rendered ser"ices for J'8= on its
Calte% pro$ect* the payment can only be assumed as co"ering for the said ser"ices !here is
nothing on the face of the receipts to support the conclusion that 'tencio .and not his company/
recei"ed it as payment for his ser"ice as a J'8= employee "arl Construction an, Arman,o H.
Te0a,a vs. Simeon A. Atencio. G8 -o 1FB>H>* 'ugust 1* 2012
Seafarers; contract !he employment of seafarers* and its incidents* including claims for death
benefits* is go"erned by the contracts they sign e"ery time they are hired or rehired Such
contracts ha"e the force of law between the parties as long as their stipulations are not contrary
to law* morals* public order or public policy :hile the seafarers and their employers are
go"erned by their mutual agreements* the P65' rules and regulations re&uire that the P65'
Standard 5mployment Contract* which contains the standard terms and conditions of the
seafarers# employment in foreign ocean7going "essels* be integrated in e"ery seafarer#s
contract !he pertinent pro"ision of the 1>>H P65' S5C* which was in effect at the time of
!anawan#s employment* was Section 20.A/ < Compensation and Aenefits. Callem %aritime
Services, 'nc. vs. 5rnesto C. Tana>an G8 -o 1H0111 'ugust 2>* 2012
Seafarers; disability benefits !he one tas(ed to determine whether the seafarer suffers from
any disability or is fit to wor( is the company7designated physician 's such* the seafarer must
submit himself to the company7designated physician for a post7employment medical
e%amination within three days from his repatriation Aut the assessment of the company7
designated physician is not final* binding or conclusi"e on the seafarer* the labor tribunals* or
the courts !he seafarer may re&uest a second opinion and consult a physician of his choice
regarding his ailment or in$ury* and the medical report issued by the physician of his choice shall
also be e"aluated on its inherent merit by the labor tribunal and the court
!anawan submitted himself to @r =im* the company7designated physician* for a medical
e%amination within the 07day reglementary period from his repatriation !he medical
e%amination conducted focused on !anawan#s foot in$ury* the cause of his repatriation @r =im
treated !anawan for the foot in$ury from @ecember 1* 1>>F until 2ay 21* 1>>9* when @r =im
declared him fit to wor( :ithin that period that lasted 1F2 days* !anawan was unable to
perform his $ob* an indication of a permanent disability 4nder the law* there is permanent
disability if a wor(er is unable to perform his $ob for more than 120 days* regardless of whether
or not he loses the use of any part of his body @isability should be understood more on the loss
of earning capacity rather than on the medical significance of the disability 5"en in the absence
of an official finding by the company7designated physician to the effect that the seafarer suffers
a disability and is unfit for sea duty* the seafarer may still be declared to be suffering from a
permanent disability if he is unable to wor( for more than 120 days 6n the other hand*
!anawan#s claim for disability benefits due to the eye in$ury was already barred by his failure to
report the in$ury and to ha"e his eye e%amined by a company7designated physician !he
rationale for the rule is that reporting the illness or in$ury within three days from repatriation fairly
ma(es it easier for a physician to determine the cause of the illness or in$ury
4nder the 1>>H P65' S5C* it was enough to show that the in$ury or illness was sustained
during the term of the contract !he Court has declared that the un&ualified phrase )during the
term+ found in Section 20.A/ thereof co"ered all in$uries or illnesses occurring during the lifetime
of the contract :hoe"er claims entitlement to the benefits pro"ided by law should establish his
right to the benefits by substantial e"idence !anawan did not present any proof of ha"ing
sustained the eye in$ury during the term of his contract 'll that he submitted was his bare
allegation that his eye had been splashed with some thinner while he was on board the "essel
Callem %aritime Services, 'nc. vs. 5rnesto C. Tana>an G8 -o 1H0111 'ugust 2>* 2012
Sep"e&er 2012 Philippine Supree C!ur" #e$i%i!n% !n La&!r La' an( Pr!$e(ure
Here are select September 2012 rulings of the Philippine Supreme Court on labor law and
procedure:
09
Areach of contract; Contract substitution; Constructi"e dismissal; ,llegal recruitment !he agency
and its principal* 2odern 2etal* committed a prohibited practice and engaged in illegal
recruitment when they altered or substituted the contracts appro"ed by the Philippine 6"erseas
5mployment 'dministration .P65'/ 'rticle 01 .i/ of the =abor Code pro"ides: ,t shall be
unlawful for any indi"idual* entity* licensee* or holder of authority to substitute or alter
employment contracts appro"ed and "erified by the @epartment of =abor from the time of actual
signing thereof by the parties up to and including the period of e%piration of the same without
the appro"al of the Secretary of =abor 2eanwhile* 'rticle 09 .i/ of the =abor Code* as amended
by 8' 9012* defined )illegal recruitment+ to include the substitution or alteration* to the
pre$udice of the wor(er* of employment contracts appro"ed and "erified by the @epartment of
=abor and 5mployment from the time of actual signing thereof by the parties up to and including
the period of the e%piration of the same without the appro"al of the @epartment of =abor and
5mployment
;urthermore* the agency and 2odern 2etal committed breach of contract by pro"iding
substandard wor(ing and li"ing arrangements* when the contract pro"ided free and suitable
housing !he li"ing &uarters were cramped as they shared them with 2F other wor(ers !he
lodging house was far from the $obsite* lea"ing them only three to four hours of sleep e"ery
wor(day because of the long hours of tra"el to and from their place of wor(* not to mention that
there was no potable water in the lodging house which was located in an area where the air was
polluted !hey complained with the agency about the hardships that they were suffering* but the
agency failed to act on their reports Significantly* the agency failed to refute their claims
!hus* with their original contracts substituted and their oppressi"e wor(ing and li"ing conditions
unmitigated or unresol"ed* the decision to resign is not surprising !hey were compelled by the
dismal state of their employment to gi"e up their $obs; effecti"ely* they were constructi"ely
dismissed ' constructi"e dismissal or discharge is )a &uitting because continued employment
is rendered impossible* unreasonable or unli(ely* as* an offer in"ol"ing a demotion in ran( and a
diminution in pay+
:ithout doubt* continued employment with 2odern 2etal had become unreasonable '
reasonable mind would not appro"e of a substituted contract that pays a diminished salary <
from 10B0 '5@ a month in the original contract to 1*000 '5@ to 1*200 '5@ in the appointment
letters* a difference of 1B0 '5@ to 2B0 '5@ .not $ust B0 '5@ as the agency claimed/ or an
e%tended employment .from 2 to 0 years/ at such inferior terms* or a )free and suitable+ housing
which is hours away from the $ob site* cramped and crowded* without potable water and
e%posed to air pollution
:e thus cannot accept the agency#s insistence that the respondents "oluntarily resigned since
they personally prepared their resignation letters in their own handwriting &ert2C&% %an+o>er
5:+onent Co., 'nc. vs. Aman,o A. $inuya, et al. G8 -o 1>FB29 September B* 2012
@isability benefit @eemed read and incorporated into the Contract of 5mployment between
@a"id and respondents are the pro"isions of the 2000 Philippine 6"erseas 5mployment 'gency
Standard 5mployment Contract .P65'S5C/ Sec 20.A/.1/ of the P65'7S5C clearly
established a disputable presumption in fa"or of the compensability of an illness suffered by a
seafarer during the term of his contract Hence* unless contrary e"idence is presented by the
seafarer#s employerIs* this disputable presumption stands
,n this case* @a"id not only relies on this disputable presumption of the compensability of his
illness but @a"id has pro"ided more than a reasonable ne%us between the nature of his $ob and
the disease that manifested itself on the si%th month of his last contract with respondents
,t is not necessary that the nature of the employment be the sole and only reason for the illness
suffered by the seafarer ,t is sufficient that there is a reasonable lin(age between the disease
suffered by the employee and his wor( to lead a rational mind to conclude that his wor( may
ha"e contributed to the establishment or* at the "ery least* aggra"ation of any pre7e%isting
condition he might ha"e had
@a"id showed that part of his duties as a !hird 6fficer of the crude tan(er 2I! 8aphael in"ol"ed
)o"erseeing the loading* stowage* securing and unloading of cargoes+ 's a necessary
corollary* @a"id was fre&uently e%posed to the crude oil that 2I! 8aphael was carrying !he
chemical components of crude oil include* among others* sulfur* "anadium and arsenic
compounds Hydrogen sulfide and carbon mono%ide may also be encountered* while ben?ene
0>
is a naturally occurring chemical in crude oil ,t has been regarded that these ha?ardous
chemicals can possibly contribute to the formation of cancerous masses
,n this case* @a"id was diagnosed with 2;H .now (nown as undifferentiated pleomorphic
sarcoma C4PSD/* which is a class of soft tissue sarcoma or an illness that account for
appro%imately 1P of the (nown malignant tumors 's stated by @r PeOa of the 22C* who was
consulted by the company7designated physician* the etiology of soft tissue sarcomas are
multifactorial Howe"er* some factors are associated with a higher ris( !hese factors include
e%posure to chemical carcinogens li(e some of the chemical components of crude oil "essie $.
/avi,, re+resente, by #is >i?e, %a. T#eresa S. /avi,, an, c#il,ren, Hat#erine an, Hristina
/avi, vs. 7SG S#i+management %anila, 'nc. an,2or %ic#aelmar S#i++ing Services. G8 -o
1>F20B September 2H* 2012
@ismissal; 4nfair labor practice; =iability of corporate officers; 2oral and e%emplary damages
!he re&uisites for a "alid dismissal are: .a/ the employee must be afforded due process* ie* he
must be gi"en an opportunity to be heard and defend himself; and .b/ the dismissal must be for
a "alid cause as pro"ided in 'rticle 292 of the =abor Code* or for any of the authori?ed causes
under 'rticles 290 and 291 of the same Code ,n the case before us* both elements are
completely lac(ing 8espondents were dismissed without any $ust or authori?ed cause and
without being gi"en the opportunity to be heard and defend themsel"es !he law mandates that
the burden of pro"ing the "alidity of the termination of employment rests with the employer
;ailure to discharge this e"identiary burden would necessarily mean that the dismissal was not
$ustified and* therefore* illegal 4nsubstantiated suspicions* accusations* and conclusions of
employers do not pro"ide for legal $ustification for dismissing employees ,n case of doubt* such
cases should be resol"ed in fa"or of labor* pursuant to the social $ustice policy of labor laws and
the Constitution
'nent the charge of unfair labor practice* 'rticle 219 .a/ of the =abor Code considers it an unfair
labor practice when an employer interferes* restrains or coerces employees in the e%ercise of
their right to self7organi?ation or the right to form an association ,n order to show that the
employer committed unfair labor practice under the =abor Code* substantial e"idence is
re&uired to support the claim Substantial e"idence has been defined as such rele"ant e"idence
as a reasonable mind might accept as ade&uate to support a conclusion ,n the case at bar*
respondents were indeed unceremoniously dismissed from wor( by reason of their intent to
form and organi?e a union
' corporation* being a $uridical entity* may act only through its directors* officers and
employees 6bligations incurred by them* while acting as corporate agents* are not their
personal liability but the direct accountability of the corporation they represent Howe"er*
corporate officers may be deemed solidarily liable with the corporation for the termination of
employees if they acted with malice or bad faith ,n the present case* the lower tribunals
unanimously found that Percy and Harbutt* in their capacity as corporate officers of Aurgos*
acted maliciously in terminating the ser"ices of respondents without any "alid ground and in
order to suppress their right to self7organi?ation Section 01 of the Corporation Code ma(es a
director personally liable for corporate debts if he willfully and (nowingly "otes for or assents to
patently unlawful acts of the corporation ,t also ma(es a director personally liable if he is guilty
of gross negligence or bad faith in directing the affairs of the corporation !hus* Percy and
Harbutt* ha"ing acted in bad faith in directing the affairs of Aurgos* are $ointly and se"erally
liable with the latter for respondents# dismissal
!he awards of moral and e%emplary damages in fa"or of respondents are also in order 2oral
damages may be reco"ered where the dismissal of the employee was tainted by bad faith or
fraud* or where it constituted an act oppressi"e to labor* and done in a manner contrary to
morals* good customs or public policy* while e%emplary damages are reco"erable only if the
dismissal was done in a wanton* oppressi"e* or male"olent manner !he grant of attorney#s
fees is li(ewise proper 'ttorney#s fees may li(ewise be awarded to respondents who were
illegally dismissed in bad faith and were compelled to litigate or incur e%penses to protect their
rights by reason of the oppressi"e acts of petitioners !he un$ustified act of petitioners had
ob"iously compelled respondents to institute an action primarily to protect their rights and
interests which warrants the granting of the award &ar= Hotel, et al. vs. %anolo Soriano, et al.
G8 -o 1F1119 September 10* 2012
5mployment termination; Substanti"e and procedural due process; 2ass lea"e; Stri(e
Petitioners were illegally dismissed as they were not afforded substanti"e and procedural due
process !o $ustify the dismissal of an employee on the ground of serious misconduct* the
10
employer must first establish that the employee is guilty of improper conduct* that the employee
"iolated an e%isting and "alid company rule or regulation* or that the employee is guilty of a
wrongdoing ,n the instant case* Aiomedica failed to e"en present a copy of the rules and to
pro"e that petitioners were made aware of such regulations !he accusation is for engaging in a
mass lea"e tantamount to an illegal stri(e !he phrase )mass lea"e+ may refer to a
simultaneous a"ailment of authori?ed lea"e benefits by a large number of employees in a
company Here* only B employees were absent on the same day !hey did not go on stri(e*
which is a temporary stoppage of wor( by the concerted action of employees as a result of any
industrial or labor dispute )Concerted+ is defined as )mutually contri"ed or planned+ or
)performed in unison+ ,n the case at bar* the B petitioners went on lea"e for "arious reasons
!hey were in different places to attend to their personal needs or affairs
!he petitioners were charged with conducting an illegal stri(e* not a mass lea"e* without
specifying the e%act acts that the company considers as constituting an illegal stri(e or "iolati"e
of company policies Such allegation falls short of the re&uirement in Qing of Qings !ransport*
,nc of )a detailed narration of the facts and circumstances that will ser"e as basis for the charge
against the employees+ ' bare mention of an )illegal stri(e+ will not suffice ;urther* while
Aiomedica cites the pro"isions of the company policy which petitioners purportedly "iolated* it
failed to &uote said pro"isions in the notice so petitioners can be ade&uately informed of the
nature of the charges against them and intelligently file their e%planation and defenses to said
accusations
2oreo"er* the period of 21 hours allotted to petitioners to answer the notice was se"erely
insufficient and in "iolation of the implementing rules of the =abor Code 4nder the
implementing rule of 'rt 2FF* an employee should be gi"en )reasonable opportunity+ to file a
response to the notice
,n addition* Aiomedica did not set the charges against petitioners for hearing or conference
:hile petitioners did not submit any written e%planation to the charges* it is incumbent for
Aiomedica to set the matter for hearing or conference to hear the defenses and recei"e
e"idence of the employees 2ore importantly* Aiomedica is duty7bound to e%ert efforts* during
said hearing or conference* to hammer out a settlement of its differences with petitioners !hese
prescriptions Aiomedica failed to satisfy =astly* Aiomedica again de"iated from the dictated
contents of a written notice of termination as laid down in Sec 2* Aoo( 3* 8ule K,,, of the
,mplementing 8ules that it should embody the facts and circumstances to support the grounds
$ustifying the termination Ale: G. Naran0o, et al. vs. 6iome,ica Healt# Care, 'nc., et al. G8 -o
1>0F9> September 1>* 2012
5mployee dismissal; 8einstatement ;ollowing 'rticle 2F> of the =abor Code* an employee who
is un$ustly dismissed from wor( is entitled to reinstatement without loss of seniority rights and
other pri"ileges and to his full bac(wages computed from the time he was illegally dismissed
Howe"er* considering that respondent @a(ila was terminated one .1/ day prior to his
compulsory retirement on 2ay 2* 200F* his reinstatement is no longer feasible 'ccordingly* the
-=8C correctly held him entitled to the payment of his retirement benefits pursuant to the CA'
6n the other hand* his bac(wages should be computed only for days prior to his compulsory
retirement which in this case is only a day Conse&uently* the award of reinstatement wages
pending appeal must be deleted for lac( of basis T#e Ne> &#ili++ine S=ylan,ers, 'nc. an,2or
"enni?er %. 5Kano*6ote vs. 4rancisco N. /a=ila. G8 -o 1>>B1F September 21* 2012
5"idence; Constructi"e dismissal; !ransfer; Substantial e"idence ,n labor cases* strict
adherence with the technical rules is not re&uired !his liberal policy* howe"er* should still
conform to the rudiments of e&uitable principles of law ;or instance* belated submission of
e"idence may only be allowed if the delay is ade&uately $ustified and the e"idence is clearly
material to establish the party#s cause =abor tribunals* such as the -=8C* are not precluded
from recei"ing e"idence submitted on appeal as technical rules are not binding in cases
submitted before them Howe"er* any delay in the submission of e"idence should be
ade&uately e%plained and should ade&uately pro"e the allegations sought to be pro"en ,n the
present case* 2685SC6 ,,#s belated submission of e"idence cannot be permitted 2685SC6
,, did not cite any reason why it had failed to file its position paper or present its cause before
the =abor 'rbiter despite sufficient notice and time gi"en to do so 6nly after an ad"erse
decision was rendered did it present its defense and rebut the e"idence of Cagalawan by
alleging that his transfer was made in response to the letter7re&uest of the area manager of the
Ginoog sub7office as(ing for additional personnel to meet its collection &uota !o our mind*
howe"er* the belated submission of the said letter7re&uest without any "alid e%planation casts
doubt on its credibility* especially so when the same is not a newly disco"ered e"idence
11
!he rule is that it is within the ambit of the employer#s prerogati"e to transfer an employee for
"alid reasons and according to the re&uirement of its business* pro"ided that the transfer does
not result in demotion in ran( or diminution of salary* benefits and other pri"ileges !his Court
has always considered the management#s prerogati"e to transfer its employees in pursuit of its
legitimate interests Aut this prerogati"e should be e%ercised without gra"e abuse of discretion
and with due regard to the basic elements of $ustice and fair play* such that if there is a showing
that the transfer was unnecessary or incon"enient and pre$udicial to the employee* it cannot be
upheld Here* while we find that the transfer of Cagalawan neither entails any demotion in ran(
since he did not ha"e tenurial security o"er the position of head of the disconnection crew* nor
result to diminution in pay as this was not sufficiently pro"en by him* 2685SC6 ,,#s e"idence is
ne"ertheless not enough to show that said transfer was re&uired by the e%igency of the electric
cooperati"e#s business interest Simply stated* the e"idence sought to be admitted by
2685SC6 ,, is not substantial to pro"e that there was a genuine business urgency that
necessitated the transfer
:hen there is doubt between the e"idence submitted by the employer and that submitted by the
employee* the scales of $ustice must be tilted in fa"or of the employee !his is consistent with
the rule that an employer#s cause could only succeed on the strength of its own e"idence and
not on the wea(ness of the employee#s e"idence !hus* 2685SC6 ,, cannot rely on the
wea(ness of 6rti?#s certification in order to gi"e more credit to its own e"idence Self7ser"ing
and unsubstantiated declarations are not sufficient where the &uantum of e"idence re&uired to
establish a fact is substantial e"idence* described as more than a mere scintilla !he e"idence
must be real and substantial* and not merely apparent 2685SC6 ,, has miserably failed to
discharge the onus of pro"ing the "alidity of Cagalawan#s transfer %isamis 7riental '' 5lectric
Service Coo+erative ;%7R5SC7 ''< vs. $irgilio %. Cagala>an. G8 -o 1FB1F0 September B*
2012
8etirement benefits :hile it is true that based on pre"ailing $urisprudence* disallowed benefits
recei"ed in good faith need not be refunded* the case before us may be distinguished from
those cases with that ruling because the monies in"ol"ed here are retirement benefits
8etirement benefits belong to a different class of benefits 'll the cases with that ruling in"ol"ed
benefits such as cash gifts* representation allowances* rice subsidies* uniform allowances* per
diems* transportation allowances* and the li(e !he foregoing allowances or fringe benefits are
gi"en in addition to one#s salary* either to reimburse him for e%penses he might ha"e incurred in
relation to his wor(* or as a form of supplementary compensation 6n the other hand*
retirement benefits are gi"en to one who is separated from employment either "oluntarily or
compulsorily Such benefits* sub$ect to certain re&uisites imposed by law andIor contract* are
gi"en to the employee on the assumption that he can no longer wor( !hey are also gi"en as a
form of reward for the ser"ices he had rendered !he purpose is not to enrich him but to help
him during his non7producti"e years
6ur @ecision does not preclude the retirees from recei"ing retirement benefits pro"ided by
e%isting retirement laws :hat they are prohibited from getting are the additional benefits under
the GS,S 8;P* which we found to ha"e emanated from a "oid and illegal board resolution !o
allow the payees to retain the disallowed benefits would amount to their un$ust enrichment to the
pre$udice of the GS,S* whose a"owed purpose is to maintain its actuarial sol"ency to finance the
retirement* disability* and life insurance benefits of its members Government Service 'nsurance
System ;GS'S<, et al. vs. Commission on Au,it ;C7A<, et al. G8 -o 1H20F2 September 11*
2012
8eleaseILuitclaim; Separation pay !he releaseI&uitclaim affida"its are in"alid for being against
public policy for two reasons: .1/ the terms of the settlement are unconscionable; the separation
pay for termination due to reorgani?ationIrestructuring was deficient by Php100*00000 for each
employee; they were gi"en only half of the amount they were legally entitled to; and .2/ the
absence of "oluntariness when the employees signed the document* it was their dire
circumstances and inability to support their families that finally dro"e them to accept the amount
offered :ithout $obs and with families to support* they dallied in e%ecuting the &uitclaim
instrument* but were e"entually forced to sign gi"en their circumstances !o be sure* a
settlement under these terms is not and cannot be a reasonable one* gi"en especially the
respondent#s length of ser"ice < 2B years for Ebarola and 1> years for 8i"era Ra,io %in,anao
Net>or=, 'nc. an, 5ric S. Canoy vs. /omingo I. 9barola, et al. G8 -o 1>9HH2 September 12*
2012
8es $udicata )8es $udicata means a matter ad$udged; a thing $udicially acted upon or decided; a
thing or matter settled by $udgment+ ,t denotes )that a final $udgment or decree on the merits
12
by a court of competent $urisdiction is conclusi"e of the rights of the parties or their pri"ies in all
latter suits on all points and matters determined in the former suit ;or res $udicata* in its
concept as a bar by former $udgment to apply* the following must be present:
1 !he former $udgment or order is final;
2 ,t is rendered by a court ha"ing $urisdiction o"er the sub$ect matter and the parties;
0 ,t is a $udgment or an order on the merits; and*
1 !here is between the first and the second identity of parties* identity of sub$ect matter*
and identity of cause of action
!he @ecision of this Court in G8 -os 1B>1H0 and 1B>1H1 became final and e%ecutory on 2ay
20* 2011 ,t is a decision based on the merits of the case and rendered by this Court in the
e%ercise of its appellate $urisdiction after the parties in"o(ed its $urisdiction !here is also*
between the two sets of consolidated cases* identity of the parties* sub$ect matter and causes of
action !he parties in G8 -o 1B>1H0 and 1B>1H1 are also impleaded as parties in these
consolidated cases 'nd while some of the parties herein are not included in G8 -os 1B>1H0
and 1B>1H1* the same are only few ,n any e"ent* it is well7settled that only substantial* and not
absolute* identity of the parties is re&uired for res $udicata to lie )!here is substantial identity of
the parties when there is a community of interest between a party in the first case and a party in
the second case albeit the latter was not impleaded in the first case+
:ith regard to identity of cause of action* it has been held that there is identity of causes of
action when the same e"idence will sustain both actions or when the facts essential to the
maintenance of the two actions are identical Here* the bone of contention in both sets of
consolidated cases boils down to the nature and conse&uences of complainants# 'pril 0* 2000
mass action !he antecedent facts that ga"e rise to all the cases were the same -ecessarily*
therefore* the same e"idence would sustain all actions Such similarity in the e"idence re&uired
to sustain all actions is also borne out by the identity of the issues in"ol"ed in all these cases
:hile the parties ha"e presented a plethora of arguments which we earlier discussed at length*
the same nonetheless boil down to the same crucial issues formulated in G8 -os 1B>1H0 and
1B>1H1
,t should be recalled that in G8 -o 1B0F>>* the complainants assailed the 8esolutions dated
January 11* 2002 and ;ebruary 20* 2002 of the C'#s ;ourth @i"ision granting 2etroban(#s
re&uest for in$uncti"e reliefs !hey claimed that the reinstatement aspect of the =abor 'rbiter#s
@ecision is immediately e%ecutory Hence* they are entitled to bac(wages from the time the
=abor 'rbiter promulgated his @ecision until it was re"ersed by the -=8C
's discussed abo"e* howe"er* the -o"ember 1B* 2010 @ecision of this Court in G8 -os
1B>1H0 and 1B>1H1 already ad$udicated the respecti"e rights and liabilities of the parties Said
@ecision pronouncing the monetary awards to which the parties herein are entitled became final
and e%ecutory on 2ay 20* 2011 4nder the rule on immutability of $udgment* this Court cannot
alter or modify said @ecision ,t is a well7established rule that once a $udgment has become
final and e%ecutory* it is no longer susceptible to any modification Soli,ban= Anion, et al. vs.
%etro+olitan 6an= an, Trust Com+any2%etro+olitan 6an= an, Trust Com+any vs. Soli,ban=
Anion, et al.2Soli,ban= Cor+oration, etc., et al. vs. Soli,ban= Anion, et al.2Soli,ban= Anion, et
al. vs. %etro+olitan 6an= an, Trust Com+any. G8 -o 1B0F>>IG8 -o 1BF1H>IG8 -o
1BF02FIG8 -o 1BFB0H September 1F* 2012
8einstatement; Strained relations ' determination of the applicability of the doctrine of strained
relations is essentially a factual &uestion and* thus* not a proper sub$ect in this petition !his
rule* howe"er* admits of e%ceptions ,n cases where the factual findings of the =' and the
-=8C are conflicting* the Court* in the e%ercise if e&uity $urisdiction* may re"iew and re7e"aluate
the factual issues and loo( into the records of the case and re7e%amine the &uestioned findings
's the records bear out* the =' found that patent animosity e%isted between 'C2C and Aides
considering the confrontation that too( place between the latter and 2atthew !he confrontation
coupled with Aides# refusal to be reinstated led to the ='#s finding of )strained relations+
necessitating an award of separation pay in lieu of reinstatement !he -=8C* on the other
hand* deleted the said award for lac( of factual basis !he C' reinstated the ='#s finding of
10
)strained relations+ and e%plained that too much enmity had de"eloped between 'C2C and
Aides that necessarily barred the latter#s reinstatement
!he Court is well aware that reinstatement is the rule and* for the e%ception of )strained
relations+ to apply* it should be pro"ed that it is li(ely that* if reinstated* an atmosphere of
antipathy and antagonism would be generated as to ad"ersely affect the efficiency and
producti"ity of the employee concerned
4nder the doctrine of strained relations* the payment of separation pay is considered an
acceptable alternati"e to reinstatement when the latter option is no longer desirable or "iable
6n one hand* such payment liberates the employee from what could be a highly oppressi"e
wor( en"ironment 6n the other hand* it releases the employer from the grossly unpalatable
obligation of maintaining in its employ a wor(er it could no longer trust 2oreo"er* the doctrine
of strained relations has been made applicable to cases where the employee decides not to be
reinstated and demands for separation pay
,n the present case* Aides has consistently maintained* from the proceedings in the =' up to the
C'* his refusal to be reinstated due to his fear of reprisal which he could e%perience as a
conse&uence of his return Ay doing so* Aides une&ui"ocally foreclosed reinstatement as a
relief
A+o C#emical %anu?acturing an, %ic#ael C#eng vs. Ronal,o A. 6i,es. G8 -o 19H002
September 1>* 2012
Seafarers disability benefits; 'ttorney#s fees ,n determining the disability benefits due a
seafarer the P65' Standard 5mployment Contract .S5C/* specifically its schedule of benefits*
medical findings* 'rticle 1>2 .c/.1/ of the =abor Code* and 8ule K* Section 2 of its implementing
rules and regulations must be considered !he initial treatment period of 120 days may be
e%tended up to a ma%imum of 210 days under the conditions prescribed by law
4nder 'rticle 22>9 of the Ci"il Code* attorney#s fees can be reco"ered )CwDhen the defendant#s
act or omission has compelled the plaintiff to litigate with third persons or to incur e%penses to
protect his interest+ !his Court sees no reason why damages or attorney#s fees should be
awarded to Penales ,t is ob"ious that he did not gi"e the petitioners# company7designated
physician ample time to assess and e"aluate his condition* or to treat him properly for that
matter !he petitioners had a "alid reason for refusing to pay his claims* especially when they
were complying with the terms of the P65' S5C with regard to his allowances and treatment
&aci?ic 7cean %anning 'nc., et al. vs. 6en0amin /. &enales. G8 -o 1H290> September B*
2012
January 201. Philippine Supree C!ur" #e$i%i!n% !n La&!r La' an( Pr!$e(ure
Here are select January 2010 rulings of the Supreme Court of the Philippines on labor law and
procedure:
'ppeal to the -ational =abor 8elations Commission .-=8C/; 8e&uisites for perfection of
appeal; Joint declaration under oath accompanying the surety bond; Substantial compliance
with procedural rules !here was substantial compliance with the -=8C 8ules of Procedure
when the respondents P'= 2aritime Corporation and :estern Shipping 'gencies* Pte* =td
filed* albeit belatedly* the Joint @eclaration 4nder 6ath* which is re&uired when an employer
appeals from the =abor 'rbiter#s decision granting a monetary award and posts a surety bond
4nder the -=8C rules* the following re&uisites are re&uired to perfect the employer#s appeal: .1/
it must be filed within the reglementary period; .2/ it must be under oath* with proof of payment
of the re&uired appeal fee and the posting of a cash or surety bond; and .0/ it must be
accompanied by typewritten or printed copies of the memorandum of appeal* stating the
grounds relied upon* the supporting arguments* the reliefs prayed for* and a statement of the
date of receipt of the appealed decision* with proof of ser"ice on the other party of said appeal
,f the employer posts a surety bond* the -=8C rules further re&uire the submission by the
employer* his or her counsel* and the bonding company of a $oint declaration under oath
attesting that the surety bond posted is genuine and that it shall be in effect until the final
disposition of the case
11
,n the case at bar* the respondents posted a surety bond e&ui"alent to the monetary award and
filed the notice of appeal and the appeal memorandum within the reglementary period :hen
the -=8C subse&uently directed the filing of a Joint @eclaration 4nder 6ath* the respondents
immediately complied with the said order !here was only a late submission of the Joint
@eclaration Considering that there was substantial compliance with the rules* the same may
be liberally construed !he application of technical rules may be rela%ed in labor cases to ser"e
the demands of substantial $ustice Rolan,o L. Cervantes vs. &AL %aritime Cor+oration an,2or
Cestern S#i++ing Agencies, &te., Lt,. G8 -o 1FB20> January 1H* 2010
Completeness of ser"ice by registered mail; 5%ception to the general rule regarding a
corporation#s "erification and certification of non7forum shopping; ,nterpretation of school CA'
' school CA' must be read in con$unction with statutory and administrati"e regulations
go"erning faculty &ualifications Such regulations form part of a "alid CA' without need for the
parties to ma(e e%press reference to the same
,n the case at bar* the 4ni"ersity of the 5ast .45/ repeatedly e%tended only semester7to7
semester faculty appointments to the respondents Pepanio and Aueno* since they had not
completed postgraduate degrees !he respondents* howe"er* claimed that the 1>>1 CA'
between 45 and the faculty union did not yet re&uire a master#s degree for a teacher to ac&uire
regular status Ha"ing rendered more than three consecuti"e years of full7time ser"ice to the
school* the respondents insisted that 45 should ha"e gi"en them permanent appointments
!he Supreme Court obser"ed that the policy re&uiring college teachers to ha"e postgraduate
degrees was pro"ided in the 2anual of 8egulations issued as early as 1>>2 by the @epartment
of 5ducation* Culture and Sports .@5CS/* now the @epartment of 5ducation ,n promulgating
the 2anual of 8egulations* @5CS e%ercised its power of regulation o"er educational institutions*
which includes prescribing the minimum academic &ualifications for teaching personnel !he
legislature subse&uently transferred the power to prescribe such &ualifications for teachers in
institutions of higher learning to the Commission on Higher 5ducation .CH5@/ Howe"er* the
1>>2 2anual of 8egulations issued by @5CS continued to apply to colleges and uni"ersities
until 2010* when CH5@ issued a 8e"ised 2anual of 8egulations
!hus* the re&uirement of a master#s degree for college teachers* as originally pro"ided in the
1>>2 2anual of 8egulations* was deemed incorporated in the 1>>1 CA' between 45 and the
faculty union ;urthermore* the subse&uent CA' in 2001* which pro"ided for the e%tension of
conditional probationary status to the respondents* sub$ect to their obtaining a master#s degree
within the probationary period* clearly showed that 45 intended to sub$ect the respondents#
appointments to the standards set by the law
!he re&uirement of a master#s degree for tertiary education teachers is not unreasonable*
considering that the operation of educational institutions in"ol"es public interest !he
go"ernment has a right to ensure that only &ualified persons* in possession of sufficient
academic (nowledge and teaching s(ills* are allowed to teach in such institutions
!he Supreme Court also o"erruled the respondents# contention that 45 filed its appeal to the
-=8C beyond the re&uired ten .10/7day period ;or completeness of ser"ice by registered mail*
the rec(oning period starts either from the date of actual receipt of the mail by the addressee or
after fi"e .B/ days from the date he or she recei"ed the first notice from the postmaster ,n this
case* the respondents a"erred that* on 2arch 1F* 200B* the postmaster ga"e 45#s counsel a
notice to claim the mail containing the =abor 'rbiter#s decision !he respondents claimed that
45#s counsel was deemed in receipt of the decision B days after the gi"ing of the notice* or on
2arch 22* 200B !hus* according to the respondents* when 45 filed its appeal to the -=8C on
'pril 11* 200B* the 107day reglementary period had already lapsed !he Supreme Court*
howe"er* ruled that there must be conclusi"e proof that the registry notice was recei"ed by or at
least ser"ed on the addressee ,n this case* the records did not show that 45#s counsel in fact
recei"ed the alleged registry notice re&uiring him to claim the mail 6n the other hand* 45 was
able to present a registry return receipt showing that its counsel actually recei"ed a copy of the
=abor 'rbiter#s decision on 'pril 1* 200B 8ec(oned from this date* the 107day reglementary
period had not yet lapsed when 45 filed its appeal to the -=8C on 'pril 11* 200B
'nent 45#s failure to comply with the general rule that the Aoard of @irectors or Aoard of
!rustees of a corporation must authori?e the person who shall sign the "erification and
certification of non7forum shopping accompanying a petition* the Supreme Court held that such
authori?ation is not necessary when it is self7e"ident that the signatory is in a position to "erify
the truthfulness and correctness of the allegations in the petition !he Supreme Court declared
1B
that @ean 5leanor Ja"ier* who signed 45#s "erification and certification* was in such a position*
since she (new the factual antecedents of the case and she actually communicated with the
respondents regarding the re&uired postgraduate &ualification Aniversity o? t#e 5ast, et al. vs.
Anali8a 4. &e+anio an, %ariti /. 6ueno. G8 -o 1>09>F January 20* 2010
@isease as a ground for termination; 8etirement under the =abor Code; 'ge and tenure
re&uirements for retirement; ;inancial assistance 4nder the =abor Code pro"ision on disease
as a ground for termination .formerly* 'rticle 291* but now renumbered pursuant to 8epublic 'ct
-o 101B1/* it must be the employer who initiates the termination of the employee#s ser"ices
!he aforementioned pro"ision cannot be applied in this case* considering that it was the late
petitioner Padillo* and not the 8ural Aan( of -abunturan* ,nc .Aan(/* who se"ered the
employment relations :ith his memory impaired after suffering a mild stro(e due to
hypertension* Padillo wrote a letter to the Aan(* e%pressing his intention to a"ail of an early
retirement pac(age !he clear import of Padillo#s letter and the fact that he had stopped
reporting for wor( e"en before sending the said letter shows that he "oluntarily retired Gi"en
the inapplicability of the =abor Code pro"ision on disease as a ground for termination* it
necessarily follows that Padillo#s claim for separation pay must be denied
's regards Padillo#s claim for retirement benefits* the pro"ision of the =abor Code on retirement
.formerly* 'rt 29F* but now renumbered pursuant to 8' -o 101B1/ states that* in the absence
of any applicable agreement* an employee who has ser"ed at least fi"e .B/ years in the
company may retire upon reaching the age of si%ty .H0/ years* but not beyond si%ty7fi"e .HB/
years* to be entitled to retirement pay e&ui"alent to at least one7half .1I2/ month salary for e"ery
year of ser"ice* with a fraction of at least si% .H/ months being considered as one whole year
-otably* the aforementioned age and tenure re&uirements are cumulati"e* and non7compliance
with either negates the employee#s entitlement to the retirement pay under the =abor Code ,n
this case* the Aan( did not ha"e a retirement plan or any other contract with its employees*
setting the terms and conditions for retirement Padillo also ser"ed the Aan( for twenty7nine
.2>/ years* far more than the B7year tenure re&uirement Padillo* howe"er* did not meet the age
re&uirement* considering that he was only fifty7fi"e .BB/ years old* or less than H0 years of age*
when he retired !hus* Padillo#s claim for retirement pay must also be denied
-e"ertheless* the Supreme Court awarded Padillo financial assistance in the amount of
PFB*000* considering the length of time which had super"ened before the disposition of this
case and Padillo#s unblemished record of 2> years of ser"ice to the Aan( !he award was in
addition to the P100*000 benefit recei"able under the Philam =ife Plan that the Aan( had
procured in fa"or of Padillo 5lea8ar S. &a,illo vs. Rural 6an= o? Nabunturan, 'nc., et al. G8
-o 1>>009 January 21* 2010
8edundancy as an authori?ed cause for termination; @ifference between retirement and
termination due to redundancy; General rule regarding the factual findings of the -=8C and the
e%ceptions thereto 4nder the =abor Code* redundancy is one of the authori?ed causes for
termination of employment !he following are the re&uisites for the "alid implementation of a
redundancy program: .a/ the employer must ser"e a written notice to the affected employees
and to the @epartment of =abor and 5mployment .@6=5/ at least one month before the
intended date of termination; .b/ the employer must pay the employees separation pay
e&ui"alent to at least one month pay or at least one month pay for e"ery year of ser"ice*
whiche"er is higher; .c/ the employer must abolish the redundant positions in good faith; and .d/
the employer must set fair and reasonable criteria in ascertaining which positions are redundant
and may be abolished !he Supreme Court has also held that a company cannot simply
declare redundancy without basis !o e%hibit its good faith and to show that there were fair and
reasonable criteria in ascertaining redundant positions* a company claiming to be o"er manned
must produce ade&uate proof of the same
,n the case at bar* the General 2illing Corporation .G2C/ furnished respondent 3ia$ar a written
notice informing her of the termination of her ser"ices on the ground of redundancy G2C also
submitted to the @6=5 an 5stablishment !ermination 8eport* regarding the employees*
including 3ia$ar* whose positions were deemed redundant 3ia$ar and the @6=5 recei"ed the
respecti"e notices one month before the effecti"e date of the employees# termination
;urthermore* G2C issued to 3ia$ar two chec(s amounting to P110*2B002 and P21*2110B*
representing her separation pay Howe"er* the Supreme Court held that* notwithstanding
compliance with the re&uirements on notice and the payment of separation pay* G2C is still
considered to ha"e illegally dismissed 3ia$ar because the company failed to present substantial
proof to support its general allegations of redundancy G2C could ha"e presented e"idence to
substantiate redundancy* such as a new staffing pattern or feasibility studies or proposals on
1H
the "iability of newly created positions* $ob descriptions and the appro"al by management of the
restructuring program* or the company#s audited financial reports Howe"er* no such e"idence
was submitted by G2C
6n the other hand* 3ia$ar presented proof negating G2C#s claim of redundancy and clearly
showing G2C#s bad faith in implementing the redundancy program: .1/ G2C had hired new
employees before it terminated 3ia$ar#s employment; .2/ 3ai$ar was barred from entering the
company premises e"en before the effecti"ity of her separation; and .0/ 3ia$ar was also forced
to sign an )'pplication for 8etirement and Aenefits+ so that she could a"ail of her separation
pay !he last circumstance is significant* considering that there is a difference between
"oluntary retirement and forced termination of an employee 8etirement from ser"ice is
contractual or based on a bilateral agreement of the employer and the employee* while
termination of employment is statutory or go"erned by the =abor Code and other related laws
3oluntary retirement cuts employment ties* lea"ing no residual employer liability; in"oluntary
retirement amounts to a discharge* rendering the employer liable for termination without cause
G2C#s demand that 3ia$ar sign an 'pplication for 8etirement and Aenefits* when she had
already been informed of the termination of her ser"ices due to redundancy* shows that this
case in"ol"es not a "oluntary retirement* but an illegal termination
:hile the =abor 'rbiter and the -=8C both found that 3ia$ar was "alidly dismissed* the general
rule that the factual findings of the -=8C must be accorded respect and finality is not applicable
in this case 6ne of the e%ceptions to the said rule co"ers instances when the findings of fact of
the trial court* or of the &uasi7$udicial agencies concerned* are conflicting or contradictory with
those of the Court of 'ppeals* as in the present case 'nother e%ception to the general rule is
when the said findings are not supported by substantial e"idence or the inference or conclusion
arri"ed at is manifestly erroneous ,n the case at bar* the Supreme Court agreed with the Court
of 'ppeals that the -=8C#s conclusion that 3ia$ar was legally dismissed is manifestly
erroneous General %illing Cor+oration vs. $ioleta L. $ia0ar. G8 -o 191F09 January 00*
2010
8einstatement; Aac(wages ,t is basic in $urisprudence that illegally dismissed wor(ers are
entitled to reinstatement with bac(wages plus interest at the legal rate
!his labor contro"ersy started when the employer 'utomoti"e 5ngine 8ebuilders* ,nc .'58/
and the Progresibong 4nyon ng mga 2anggagawa sa '58 .4nion/ filed charges against each
other for "iolating labor laws '58 filed a complaint against the 4nion and eighteen .19/ of its
members for conducting an illegal stri(e 6n the other hand* thirty7two .02/ employees filed a
complaint against '58 for unfair labor practices* illegal dismissal* illegal suspension* and run7
away shop ,n a pre"ious decision .G8 -o 1H0109* July 10* 2011/* the Supreme Court had
held that both parties were at fault or in +ari ,elicto; hence* the complaining employees should
be reinstated but without bac(wages !he 2otion for Partial 8econsideration filed by the 4nion
is resol"ed in the present case
!he Supreme Court found that* of the 02 employees who filed the complaint against '58* only
19 had been charged by '58 with illegal stri(e* lea"ing 11 e%cluded from the employer#s
complaint 's no charges had been filed against the 11 wor(ers* they cannot be found guilty of
illegal stri(e -either can they be considered in +ari ,elicto Howe"er* of the 11 employees* fi"e
failed to write their names and affi% their signatures in the 2embership 8esolution attached to
their petition before the Court of 'ppeals* authori?ing the union president to represent them
!hus* while these fi"e employees will also be reinstated* they cannot be granted bac(wages
6n the other hand* the nine wor(ers who signed their names in the aforementioned
2embership 8esolution will be reinstated with bac(wages plus interest at the legal rate
Automotive 5ngine Rebuil,ers, 'nc. ;A5R<, et al. vs. &rogresibong Anyon ng mga %anggaga>a
sa A5R, et al. 2 &rogresibong Anyon ng mga %anggaga>a sa A5R, et al. vs. Automotive
5ngine Rebuil,ers, 'nc., et al. G8 -os 1H0109 and 1H01>2 January 1H* 2010
8esignation; 8esignation in relation to the subse&uent filing of an illegal dismissal case
Petitioner Cer"antes#s claim that he did not resign but was terminated from employment is
untenable 8esignation is the "oluntary act of an employee who finds himself in a situation
where he belie"es that personal reasons cannot be sacrificed in fa"or of the e%igency of the
ser"ice* such that he has no other choice but to disassociate himself from his employment
,n the present case* Cer"antes#s employer merely informed him of the numerous complaints
against him ,t was Cer"antes himself who opted to be relie"ed from his post and who initiated
his repatriation to 2anila !his is clear from the tenor of his tele% message* which reads in part:
1F
)'-EH6: !6 '36,@ 85P5!,!,6- C6-D 2685 H'8SH 85P68!S !6 C625 A5!!58
'88'-G5 2E 85=,5358 C'-@D CI6 A4S!,==6 85=,5358 '=S6 4P6- '88 -5K! 4S'
=6'@,-G P68! ;68 !H5,8 S'!,S;'C!,6-+ Cer"antes#s message contains an
unmista(able demand to be relie"ed of his assignment His employer merely accepted his
resignation !hus* the rule that the filing of a complaint for illegal dismissal is inconsistent with
resignation does not hold true in this case !he clear tenor of Cer"antes#s resignation letter and
the filing of this case one year after his alleged termination shows that the complaint for illegal
dismissal was a mere afterthought Rolan,o L. Cervantes vs. &AL %aritime Cor+oration an,2or
Cestern S#i++ing Agencies, &te., Lt,. G8 -o 1FB20> January 1H* 2010
3oluntary 'rbitration; Plenary authority and $urisdiction of a "oluntary arbitrator; Concept and
e%ercise of management prerogati"e; =imitations on the e%ercise of management prerogati"e;
-ature of collecti"e bargaining agreements .CA'/ Goya* ,nc#s contention that the 3oluntary
'rbitrator .3'/ e%ceeded his power in ruling on a matter not co"ered by the sole issue submitted
for "oluntary arbitration is untenable ,n a prior case* the Supreme Court has ruled that* in
general* the arbitrator is e%pected to decide those &uestions e%pressly stated and limited in the
submission agreement Howe"er* since arbitration is the final resort for the ad$udication of
disputes* the arbitrator can assume that he has the power to ma(e a final settlement !he 3'
has plenary $urisdiction and authority to interpret the CA' and to determine the scope of his or
her own authority Sub$ect to $udicial re"iew* this leeway of authority and ade&uate prerogati"e
is aimed at accomplishing the rationale of the law on "oluntary arbitration < speedy labor $ustice
,n the case at bar* Goya* ,nc and Goya* ,nc 5mployees 4nion .4nion/ submitted for "oluntary
arbitration the sole issue of whether or not the company is guilty of an unfair labor practice in
engaging the ser"ices of P5S6* a third party ser"ice pro"ider* under e%isting CA'* laws* and
$urisprudence !he 4nion claimed that the hiring of contractual wor(ers from P5S6 "iolated the
CA' pro"ision that prescribes only three categories of wor(ers in the company* namely: the
probationary* the regular* and the casual employees ,nstead of hiring contractual wor(ers*
Goya* ,nc should ha"e hired probationary or casual employees* who could ha"e become
additional 4nion members* pursuant to the union security clause in the CA' !he 3' ruled that
while Goya* ,nc was not guilty of any unfair labor practice* it still committed a "iolation of the
CA'* though such "iolation was not gross in character !he Supreme Court held that the 3'#s
ruling is interrelated and intertwined with the sole issue submitted for arbitration !he ruling was
necessary to ma(e a complete and final ad$udication of the dispute between the parties
;urthermore* Goya* ,nc#s assertion that its hiring of contractual wor(ers was a "alid e%ercise of
management prerogati"e is erroneous @eclaring that a particular act falls within the concept of
management prerogati"e is significantly different from ac(nowledging that such act is a "alid
e%ercise thereof :hile the 3' and the Court of 'ppeals ruled that the act of contracting out or
outsourcing wor( is within the pur"iew of management prerogati"e* they did not declare such
act to be a "alid e%ercise thereof 's repeatedly held* the e%ercise of management prerogati"e
is not unlimited; it is sub$ect to the limitations found in the law* CA'* or general principles of fair
play and $ustice
,n this case* the CA' pro"ision prescribing the categories of employees in the company and the
union security clause are interconnected and must be gi"en full force and effect !he parties in
a CA' are free to establish such stipulations they may deem con"enient* pro"ided that the
same are not contrary to law* morals* good customs* public order* or public policy :here the
CA' is clear and unambiguous* the literal meaning of its stipulations shall control !he CA'
becomes the law between the parties* and compliance therewith is mandated by the e%press
policy of the law Goya, 'nc. vs. Goya, 'nc. 5m+loyees Anion*44C. G8 -o 1F00B1 January
21* 2010