Doctrines in Labor Relations

Case Doctrines in Labor Relations
Kiok Loy v. NLRC

Collective bargaining, which is
defned as negotiations towards a
collective agreement, is one of the
democratic frameworks under the New
Labor Code, designed to stabilize the
relation between labor and
management and to create a climate of
sound and stable industrial peace !t is
a mutual responsibilit" of the emplo"er
and the #nion and is characterized as a
legal obligation $o much so that %rticle
&'(, par )g* of the Labor Code makes it
an unfair labor practice for an emplo"er
to refuse +to meet and convene
promptl" and e,peditiousl" in good
faith for the purpose of negotiating an
agreement with respect to wages,
hours of work, and all other terms and
conditions of emplo"ment including
proposals for ad-usting an" grievance
or .uestion arising under such an
agreement and e,ecuting a contract
incorporating such agreement, if
re.uested b" either part"
/hile it is a mutual obligation of the
parties to bargain, the emplo"er,
however, is not under an" legal dut" to
initiate contract negotiation 0he
mechanics of collective bargaining is
set in motion onl" when the following
-urisdictional preconditions are present,
namel", )1* possession of the status of
ma-orit" representation of the
emplo"ees2 representative in
accordance with an" of the means of
selection or designation provided for b"
the Labor Code3 )&* proof of ma-orit"
representation3 and )4* a demand to
bargain under %rticle &51, par )a* of
the Labor Code
% Compan"2s refusal to make counter
proposal if considered in relation to the
entire bargaining process, ma" indicate
bad faith and this is speciall" true
where the #nion2s re.uest for a counter
proposal is left unanswered
Unfair labor practice is committed
when it is shown that the emplo"er,
after having been served with a written
bargaining proposal b" the petitioning
#nion, did not even bother to submit an
answer or repl" to the said proposal
St. Martin Funeral Home v. NLRC
6ver since appeals from the NLRC to
the $upreme Court were eliminated,
the legislative intendment was that the
special civil action of certiorari was and
still is the proper vehicle for -udicial
review of decisions of the NLRC 0he
use of the word +appeal7 in relation
thereto could have been a lapsus
plumae because appeals b" certiorari
and the original action for certiorari are
both modes of -udicial review
addressed to the appellate courts 0he
important distinction between them,
however, is that the special civil action
of certiorari is within the concurrent
original -urisdiction of the $upreme
Court and the Court of %ppeals3
whereas to indulge in the assumption
that appeals b" certiorari to the
$upreme Court are allowed would not
subserve, but would subvert, the
intention of Congress
General Milling Corp. v. C
0he relation between labor and
management should be undisturbed
until the last 89 da"s of the ffth "ear
:or refusing to send a counter;
proposal to the union and to bargain
anew on the economic terms of the
C<%, the compan" committed an unfair
labor practice under %rticle &'= of the
Labor Code
#nder %rticle &5&, both parties are
re.uired to perform their mutual
obligation to meet and convene
promptl" and e,peditiousl" in good
faith for the purpose of negotiating an
agreement
0he procedure in collective
bargaining prescribed b" the Code is
mandator" because of the basic
interest of the state in ensuring lasting
industrial peace
1
:ailure b" the emplo"er to make a
timel" repl" to the proposals presented
b" the union is indicative of its utter
lack of interest in bargaining with the
union
%n emplo"er2s refusal to make a
counter;proposal to the union2s
proposal for C<% negotiation is an
indication of its bad faith /here the
emplo"er did not even bother to submit
an answer to the bargaining proposals
of the union, there is a clear evasion of
the dut" to bargain collectivel"
%rt &54 mandates the parties to
keep the status .uo while the" are still
in the process of working out their
respective proposal and counter
proposal 0he general rule is that when
a C<% alread" e,ists, its provision shall
continue to govern the relationship
between the parties, until a new one is
agreed upon
#nder ordinar" circumstances, it is
not obligator" upon either side of a
labor controvers" to precipitatel"
accept or agree to the proposals of the
other <ut an erring part" should not be
allowed to resort with impunit" to
schemes feigning negotiations b" going
through empt" gestures
Min!anao Steel Corp. v. Min"teel
Free #orker" $rgani%ation
&M'NFR(#$)NFL* Cagayan +e $ro
%n" doubt or ambiguit" in the
contract between management and the
union members should be resolved in
the light of %rticle 1>9& of the Civil
Code which provides? +)!*n case of
doubt, all labor legislation and all labor
contracts shall be construed in favor of
the safet" and decent living for the
laborer7
0he terms and conditions of a
collective bargaining contract
constitute the law between the parties
0hose who are entitled to its benefts
can invoke its provisions !n the event
that an obligation therein imposed is
not fulflled, the aggrieved part" has
the right to go to court for redress
% wage increase granted b" an
emplo"er to its emplo"ees under the
C<% cannot be considered as creditable
beneft or compliance with a /age
@rder because such was intended as a
C<% or negotiated wage increase
Capitol Me!ical Center, 'nc. v.
-ra.ano
'""ue/ petition for the cancellation of
certifcate of registration involves a
pre-udicial .uestion that should frst be
settled before the $ecretar" of Labor
could order the parties to bargain
collectivel"
Hel!/ No 0hat there is a pending
cancellation proceedings is not a bar to
set in motion the mechanics of
collective bargaining !f a certifcation
election ma" still be ordered despite
the pendenc" of a petition to cancel the
union2s registration certifcate, more so
should the collective bargaining process
continue despite its pendenc"
0he ma-orit" status of a union is not
aAected b" the pendenc" of the Betition
for Cancellation pending against it
#nless its certifcate of registration and
its status as the certifed bargaining
agent are revoked, the Cospital is, b"
e,press provision of the law, dut"
bound to collectivel" bargain with the
#nion
0he discretion to assume -urisdiction
ma" be e,ercised b" the $ecretar" of
Labor and 6mplo"ment without the
necessit" of prior notice or hearing
given to an" of the parties 0he
rationale for his primar" assumption of
-urisdiction can -ustifabl" rest on his
own consideration of the e,igenc" of
the situation in relation to the national
interests
0elyca Corp. v. Calle.a
0he factors in determining the proper
constituenc" of a collective bargaining
&
unit are )1* will of emplo"ees )Glove
+octrine*3 )&* aDnit" and unit" of
emplo"ee2s interest, such as
substantial similarit" of work and duties
or similarit" of compensation and
working conditions3 )4* prior collective
bargaining histor"3 and )'* emplo"ment
status, such as temporar", seasonal
and probationar" emplo"ees
community an! mutuality of
intere"t te"t? the test of proper
grouping which calls for the
determination of positions and
categories of work to which workers
belong, and the unit" of emplo"ees2
interest such as substantial similarit" of
work and duties
0he basic test of an asserted
bargaining unit2s acceptabilit" is
whether or not it is fundamentall" the
combination which will best assure to
all emplo"ees the e,ercise of their
collective bargaining rights
0he emplo"ees2 withdrawal from
union membership taking place after
the fling of the petition for certifcation
election will not aAect said petition @n
the contrar", the presumption arises
that the withdrawal was not free but
was procured through duress, coercion
or for a valuable consideration
#ntil a decision, fnal in character,
has been issued declaring the strike
illegal and the mass dismissal or
retrenchment valid, the strikers cannot
be denied participation in the
certifcation election notwithstanding,
the vigorous condemnation of the strike
and the fact that the picketing were
attended b" violence #nder the
foregoing circumstances, it does not
necessaril" follow that the strikers in
.uestion are no longer entitled to
participate in the certifcation election
on the theor" that the" have
automaticall" lost their -obs
0he dut" of the emplo"er to bargain
collectivel" is nullifed if the purpose of
the dismissal of the union members is
to defeat the union in the consent
re.uirement for certifcation election
%s a general rule, a certifcation
election is the sole concern of the
workers 0he onl" e,ception is where
the emplo"er has to fle a petition for
certifcation election pursuant to %rt
&5( of the Labor Code because the
latter was re.uested to bargain
collectivel" <ut thereafter the role of
the emplo"er in the certifcation
process ceases 0he emplo"er becomes
merel" a b"stander
1L v. NLRC &ug. 23, 2443*
'""ue/ whether management ma" be
compelled to share with the union or its
emplo"ees its prerogative of
formulating a code of discipline
Hel!/ Ees !ndustrial peace cannot be
achieved if the emplo"ees are denied
their -ust participation in the discussion
of matters aAecting their rights 0hus,
even before %rticle &11 of the labor
Code )BD ''&* was amended b"
Republic %ct No 8>15, it was alread"
declared a polic" of the $tate, +)d* 0o
promote the enlightenment of workers
concerning their rights and obligations
as emplo"ees7 0his was, of course,
amplifed b" Republic %ct No 8>15
when it decreed the +participation of
workers in decision and polic" making
processes aAecting their rights, duties
and welfare7
St. Sc5ola"tica6" College v. -orre"
'""ue/ whether the Labor $ecretar" has
the power to assume -urisdiction over a
labor dispute and its incidental
controversies, causing or likel" to cause
a strike or lockout in an industr"
indispensable to the national interest
Hel!/ Ees 0he Labor $ecretar" was
e,plicitl" granted b" %rticle &84 )g* of
the Labor Code the authorit" to assume
-urisdiction over a labor dispute causing
or likel" to cause a strike or lockout in
an industr" indispensable to the
national interest, and decide the same
4
accordingl" Necessaril", this authorit"
to assume -urisdiction over the said
labor dispute must include and e,tend
to all .uestions and include and e,tend
to all .uestions and controversies
arising therefrom, including cases over
which the Labor %rbiter has e,clusive
-urisdiction
%rticle &1> of the Labor Code did
contemplate of e,ceptions thereto
where the $ecretar" is authorized to
assume -urisdiction over a labor dispute
otherwise belonging e,clusivel" to the
Labor %rbiter
%rticle &84 )g* of the Labor Code was
broad enough to give the $ecretar" of
Labor and 6mplo"ment the power to
take -urisdiction over an issue involving
unfair labor practice
<efore the $ecretar" of Labor and
6mplo"ment ma" take cognizance of an
issue which is merel" incidental to the
labor dispute, therefore, the same must
be involved in the labor disputed itself,
or otherwise submitted to him for
resolution !f it was not, and he
nevertheless acted on it, that
assumption of -urisdiction is
tantamount to a grave abuse of
discretion
0he submission of an incidental issue
of a labor dispute, in assumption andFor
certifcation cases, to the $ecretar" of
Labor and 6mplo"ment for his
resolution is thus one of the instances
referred to whereb" the latter ma"
e,ercise concurrent -urisdiction
together with the Labor %rbiters
'""ue/ whether striking union
members, terminated for abandonment
of work after failing to compl" strictl"
with a return;to;work order, should be
reinstated
Hel!/ %rticle &84 )g* of the Labor Code
provides that if a strike has alread"
taken place at the time of assumption,
+all striking emplo"ees shall
immediatel" return to work7 0his
means that b" its ver" terms, a return;
to;work order is immediatel" eAective
and e,ecutor" notwithstanding the
fling of a motion for reconsideration !t
must be strictl" complied with even
during the pendenc" of an" petition
.uestioning its validit" %fter all, the
assumption andFor certifcation order is
issued in the e,ercise of respondent
$6CR60%RE2s compulsive power of
arbitration and, until set aside, must
therefore be immediatel" complied
with
0he respective liabilities of striking
union oDcers and members who failed
to immediatel" compl" with the return;
to;work order is outlined in %rt &8' of
the Labor Code which provides that an"
declaration of a strike or lockout after
the $ecretar" of Labor and 6mplo"ment
has assumed -urisdiction over the labor
dispute is considered an illegal act
%n" worker or union oDcer who
knowingl" participates in a strike
def"ing a return;to;work order ma",
conse.uentl", +be declared to have lost
his emplo"ment status7
$ection 8 Rule !G, of the 1((9 Rules
of Brocedure of the NLRC, which
provides the penalties for def"ing a
certifcation order of the $ecretar" of
Labor or a return;to;work order of the
Commission, also reiterates the same
penalt" !t specifcall" states that non;
compliance with the aforesaid orders,
which is considered an illegal act, +shall
authorize the $ecretar" of Labor and
6mplo"ment or the Commission to
enforce the same under pain of loss of
emplo"ment status7 #nder the Labor
Code, assumption andFor certifcation
orders are similarl" treated
<" insisting on staging the restrained
strike and defantl" picketing the
compan" premises to prevent the
resumption of operations, the strikers
have forfeited their right to be
readmitted, having abandoned their
positions, and so could be validl"
replaced
% strike undertaken despite the
issuance b" the $ecretar" of Labor of
'
an assumption or certifcation order
becomes a prohibited activit" and thus
illegal, pursuant to the second
paragraph of %rt &8' of the Labor Code
as amended 0he union oDcers and
members, as a result, are deemed to
have lost their emplo"ment status for
having knowingl" participated in an
illegal act
0he moment a worker defes a
return;to;work order, he is deemed to
have abandoned his -ob !t is alread" in
itself knowingl" participating in an
illegal act
15imco 'n!u"trie", 'nc. v. 0rillante"
0he Labor Code vests in the
$ecretar" of Labor the discretion to
determine what industries are
indispensable to the national interest
%ccordingl", upon the determination b"
the $ecretar" of Labor that such
industr" is indispensable to the national
interest, he will assume -urisdiction
over the labor dispute in the said
industr" 0his power, however, is not
without an" limitation !t covers onl"
strikes or lockouts adversel" aAecting
the national interest
0he $ecretar"2s assumption of
-urisdiction grounded on the alleged
+obtaining circumstances7 and not on a
determination that the industr"
involved in the labor dispute is one
indispensable to the +national interest7,
the standard set b" the legislature,
constitutes grave abuse of discretion
amounting to lack of or e,cess of
-urisdiction
Calte7 re8nery (mployee" ""n. v.
0rillante"
0he labor secretar" should take
cognizance of an issue which is not
merel" incidental to but essentiall"
involved in the labor dispute itself, or
which is otherwise submitted to him for
resolution
No particular setup for a grievance
machiner" is mandated b" law Rather,
%rticle &89 of the Labor Code, as
incorporated b" R% 8>15, provides for
onl" a single grievance machiner" in
the compan" to settle problems arising
from +interpretation or implementation
of their collective bargaining agreement
and those arising from the
interpretation or enforcement of
compan" personnel policies7
0he parties will decide on the number
of arbitrators who ma" hear a dispute
onl" when the need for it arises 6ven
the law itself does not specif" the
number of arbitrators !n eAect, the
parties are aAorded the latitude to
decide for themselves the composition
of the grievance machiner" as the" fnd
appropriate to a particular situation
""n. of 'n!epen!ent Union" in t5e
15il". v. NLRC
% union;recognition;strike is
calculated to compel the emplo"er to
recognize one2s union, and not the
other contending group, as the
emplo"ees2 bargaining representative
to work out a collective bargaining
agreement despite the striking union2s
doubtful ma-orit" status to merit
voluntar" recognition and lack of formal
certifcation as the e,clusive
representative in the bargaining unit
/hen a collective bargaining
agreement has been dul" registered in
accordance with %rticle &41 of the
Labor Code, a petition for certifcation
election or motion for intervention ma"
be entertained onl" within 89 da"s prior
to the e,pir" date of the said
agreement @utside the said period, the
petition for certifcation election or
motion for intervention cannot be
allowed
0o be valid, a strike must be pursued
within legal bounds 0he law provides
limits for its e,ercise %mong such
limits are the prohibited activities under
%rticle &8' of the Labor Code,
particularl" paragraph )e*, which states
that no person engaged in picketing
shall? )a* commit an" act of violence,
5
coercion, or intimidation or )b* obstruct
the free ingress to or egress from the
emplo"er2s premises for lawful
purposes or )c* obstruct public
thoroughfares 6ven if the strike is valid
because its ob-ective or purpose is
lawful, the strike ma" still be declared
invalid where the means emplo"ed are
illegal
#nion oDcers are dut" bound to
guide their members to respect the law
!f instead of doing so, the oDcers urge
the members to violate the law and
def" the dul" constituted authorities,
their dismissal from the service is a -ust
penalt" or sanction for their unlawful
acts
%n ordinar" striking emplo"ee cannot
be terminated for mere participation in
an illegal strike 0here must be proof
that he committed illegal acts during
the strike 1> and the striker who
participated in the commission of illegal
act must be identifed <ut proof
be"ond reasonable doubt is not
re.uired $ubstantial evidence available
under the attendant circumstances,
which ma" -ustif" the imposition of the
penalt" of dismissal, ma" suDce
Sub"tantial evi!ence is more than
a mere scintilla !t means such relevant
evidence that a reasonable mind might
accept as suDcient to support a
conclusion
:or the severest administrative
penalt" of dismissal to attach, the
erring strikers must be dul" identifed
$impl" referring to them as +strikers7,
+%!# strikers7 +complainants in this
case7 is not enough to -ustif" their
dismissal
MSF -ire an! Rubber, 'nc. v. C
innocent by"tan!er rule? 0he right
to picket as a means of communicating
the facts of a labor dispute is a phase of
the freedom of speech guaranteed b"
the constitution !f peacefull" carried
out, it cannot be curtailed even in the
absence of emplo"er;emplo"ee
relationship
0he right is, however, not an absolute
one /hile peaceful picketing is entitled
to protection as an e,ercise of free
speech, we believe the courts are not
without power to confne or localize the
sphere of communication or the
demonstration to the parties to the
labor dispute, including those with
related interest, and to insulate
establishments or persons with no
industrial connection or having interest
totall" foreign to the conte,t of the
dispute 0hus the right ma" be
regulated at the instance of third
parties or +innocent b"standers7 if it
appears that the inevitable result of its
is to create an impression that a labor
dispute with which the" have no
connection or interest e,ists between
them and the picketing union or
constitute an invasion of their rights
%n +innocent b"stander,7 who seeks
to en-oin a labor strike, must satisf" the
court that aside from the grounds
specifed in Rule 5= of the Rules of
Court, it is entirel" diAerent from,
without an" connection whatsoever to,
either part" to the dispute and,
therefore, its interests are totall"
foreign to the conte,t thereof
rt. 9:4
15e"c5em 'n!u"trial Corp. v.
Mol!e%
0he legal conse.uences of an illegal
dismissal are reinstatement of the
emplo"ee without loss of seniorit"
rights and other privileges, and
pa"ment of his full backwages,
inclusive of allowances, and other
benefts or their monetar" e.uivalent
0he law intended reinstatement to be
the general rule !t is onl" when
reinstatement is no longer feasible that
pa"ment of separation pa" is awarded
to an illegall" dismissed emplo"ee
Rein"tatement is the restoration to
a state or condition from which one had
been removed or separated Ba"ment
8
of separation pa" as a substitute for
reinstatement is allowed onl" under
e,ceptional circumstances, viz? )1*
when reasons e,ist which are not
attributable to the fault or be"ond the
control of the emplo"er, such as, when
the emplo"er, who is in severe fnancial
strait and has suAered serious business
losses, has ceased operations,
implemented retrenchment, or
abolished the position due to the
installation of labor;saving devices3 )&*
when the illegall" dismissed emplo"ee
has contracted a disease and his
reinstatement will endanger the safet"
of his co;emplo"ees3 or, )4* where
strained relationship e,ists between the
emplo"er and the dismissed emplo"ee
0he !octrine of ;"traine!
relation"< cannot be used recklessl"
or applied loosel" to deprive an illegall"
dismissed emplo"ee of his means of
livelihood and den" him reinstatement
/hile in the natural course of events, a
certain degree of hostilit" is
engendered b" litigation, it will not b"
itself constitute suDcient proof of the
e,istence of strained relations to rule
out the possibilit" of reinstatement
@mission to pra" for reinstatement in
a position paper before the labor arbiter
cannot be considered as an implied
waiver to be reinstated !t is a mere
procedural lapse which should not
aAect an emplo"ee2s substantive right
to reinstatement
0u"tamante v. NLRC
%rt &=9 enumerates two )&* kinds of
emplo"ees, the regular emplo"ees and
the casual emplo"ees 0he regular
emplo"ees consist of the following? )1*
those engaged to perform activities
which are usuall" necessar" or
desirable in the usual business or trade
of the emplo"er3 and )&* those who
have rendered at least one "ear of
service whether such service is
continuous or broken
0he act of hiring and re;hiring
emplo"ees over a period of time
without considering them as regular
emplo"ees evidences bad faith on the
part of an emplo"er 0he subse.uent
rehiring of emplo"ees on a probationar"
ma" be a convenient subterfuge on the
part of management to prevent
emplo"ees from becoming regular
emplo"ees
"ian -erminal", 'nc. v. NLRC
0o -ustif" the dismissal of an
emplo"ee for abandonment, an
emplo"er should establish b" concrete
evidence the concurrence of two
elements? frst, that the emplo"ee had
the intention to deliberatel" and
without -ustifcation abandon his
emplo"ment or refuse to resume his
work3 and second, that the emplo"ee
performed overt acts from which it ma"
be deduced that he no longer intended
to work
%bsences incurred b" an emplo"ee
who is prevented from reporting for
work due to his detention to answer
some criminal charge is e,cusable if his
detention is baseless, in that the
criminal charge against him is not at all
supported b" suDcient evidence
0he fact that the NLRC did not award
backwages to the respondents or that
the respondents themselves did not
appeal the NLRC decision does not bar
the Court of %ppeals from awarding
backwages /hile as a general rule, a
part" who has not appealed is not
entitled to aDrmative relief other than
the ones granted in the decision of the
court below, the Court of %ppeals is
imbued with suDcient authorit" and
discretion to review matters, not
otherwise assigned as errors on appeal,
if it fnds that their consideration is
necessar" in arriving at a complete and
-ust resolution of the case or to serve
the interests of -ustice or to avoid
dispensing piecemeal -ustice
%rticle &>( of the Labor Code, as
amended, mandates that an illegall"
dismissed emplo"ee is entitled to the
twin reliefs of )a* either reinstatement
>
or separation pa", if reinstatement is no
longer viable, and )b* backwages <oth
are distinct reliefs given to alleviate the
economic damage suAered b" an
illegall" dismissed emplo"ee and, thus,
the award of one does not bar the
other <oth reliefs are rights granted b"
substantive law which cannot be
defeated b" mere procedural lapses
$ubstantive rights like the award of
backwages resulting from illegal
dismissal must not be pre-udiced b" a
rigid and technical application of the
rules
Carlo" v. C
0he fling of the complaint for illegal
dismissal is inconsistent with
resignation Resignation is the
voluntar" act of emplo"ees who are
compelled b" personal reasons to
dissociate themselves from their
emplo"ment !t must be done with the
intention of relin.uishing an oDce,
accompanied b" the act of
abandonment
%n emplo"ee who is un-ustl"
dismissed from work shall be entitled to
reinstatement without loss of seniorit"
rights and other privileges and to full
back wages, inclusive of allowances,
and to other benefts or their monetar"
e.uivalents computed from the time
compensation was withheld up to the
time of actual reinstatement
0he grant of back wages allows the
un-ustl" and illegall" dismissed
emplo"ee to recover from the emplo"er
that which the former lost b" wa" of
wages as a result of his dismissal from
emplo"ment Cowever, where
reinstatement is no longer feasible due
to strained relations between the
parties, separation pa" e.uivalent to
one month2s salar" for ever" "ear of
service shall be granted
'""ue/ /hen is the period for
computation of backwages and
separation pa" supposed to endH
Hel!/ 0he award for separation pa"
e.uivalent to one;month pa" for ever"
"ear of service shall be computed from
the time of illegal dismissal up to the
fnalit" of the court2s decision
&995 Revised Rules of Brocedure of the
National Labor Relations Commission
provides?
Rule I!!
Broceeding <efore the Commission
, , , ,
$ection 1' :inalit" of Decision of the
Commission and 6ntr" of Judgment K
a* :inalit" of the Decisions, Resolutions
or @rders of the Commission K 6,cept
as provided in $ection ( of Rule G, the
decisions, resolutions or orders of the
Commission shall become fnal and
e,ecutor" after ten )19* calendar da"s
from receipt thereof b" the parties
b* 6ntr" of Judgment K #pon the
e,piration of the ten )19* calendar da"
period provided in paragraph )a* of this
$ection, the decision, resolution, or
order shall be entered in a book of
entries of -udgment
0he 6,ecutive Clerk or Deput"
6,ecutive Clerk shall consider the
decision, resolution or order as fnal and
e,ecutor" after si,t" )89* calendar da"s
from the date of mailing in the absence
of return cards, certifcations from the
post oDce, or other proof of service to
parties
$6C0!@N 15 L@0!@N$ :@R
R6C@N$!D6R%0!@N K Lotion for
reconsideration of an" decision,
resolution or order of the Commission
shall not be entertained e,cept when
based on palpable or patent errors3
provided that the motion is under oath
and fled within ten )19* calendar da"s
from receipt of decision, resolution or
order, with proof of service that a cop"
of the same has been furnished, within
the reglementar" period, the adverse
part"3 and provided further, that onl"
such motion from the same part" shall
be entertained
=
$hould a motion for reconsideration be
entertained pursuant to this section,
the resolution shall be e,ecutor" after
ten )19* calendar da"s from receipt
thereof
R#L6 G!
6,ecution Broceedings
, , , ,
$6C0!@N 19 6Aect of Betition for
Certiorari on 6,ecution K % petition for
certiorari with the Court of %ppeals or
the $upreme Court shall not sta" the
e,ecution of the assailed decision
unless a restraining order is issued b"
said courts
% prevailing part" has a right to move
for the e,ecution of the monetar"
award of the NLRC pending appeal
=o5n"on > =o5n"on &15il".*, 'nc. v.
=o5n"on $?ce > Sale" Union)
Fe!eration of Free #orker"
%n illegall" dismissed emplo"ee is
entitled to reinstatement as a matter of
right /here reinstatement is not
feasible, e,pedient or practical, as
where reinstatement would onl"
e,acerbate the tension and strained
relations between the parties, or where
the relationship between the emplo"er
and emplo"ee has been undul" strained
b" reason of their irreconcilable
diAerences, particularl" where the
illegall" dismissed emplo"ee held a
managerial or ke" position in the
compan", it would be more prudent to
order pa"ment of separation pa"
instead of reinstatement !n other
words, the pa"ment of separation
compensation in lieu of the
reinstatement of an emplo"ee who was
illegall" dismissed from work shall be
allowed if and onl" if the emplo"er can
prove the e,istence of circumstances
showing that reinstatement will no
longer be for the mutual beneft of the
emplo"er and emplo"ee
Neither part" )emplo"er and
emplo"ee* can claim that it has the
categorical right to choose between
reinstatement and the pa"ment of the
monetar" award #ltimatel", the NLRC
has the authorit" to e,ecute its
-udgment and to settle an" issue that
ma" arise pertaining to the manner or
details of implementing its -udgment
Caving been illegall" dismissed,
complainants;appellants are normall"
entitled to reinstatement to their
respective former positions without loss
of seniorit" rights and privileges and to
pa"ment of backwages and other
benefts Cowever, inasmuch, as the"
are not entirel" faultless as the" did not
follow e,act procedures in the
performance of their duties
complainants;appellants should thus be
reinstated to their former position
without loss of seniorit" rights and
privileges but without an" backwages
whatsoever or in the alternative, should
thus be paid separation pa" each
e.uivalent to 1F& month pa" for ever"
"ear of service
N@K 'nt6l KnitAear Corp. 15il". v.
NLRC
'""ue/ whether refusal to render night
work is tantamount to abandonment of
duties which constitutes a -ust ground
for termination of service
Hel!/ No )see re.uisites of
abandonment*
Lanager and other responsible
oDcers of the corporation fall within the
meaning of an +emplo"er7 as
contemplated b" the Labor Code who
ma" be held -ointl" and severall" liable
for the obligations of the corporation to
its dismissed emplo"ees
Re"taurante la" Conc5a" v. Llego
%lthough as a rule, the oDcers and
members of a corporation are not
personall" liable for acts done in the
performance of their duties, this rule
admits of e,ceptions, one of which is
when the emplo"er corporation is no
longer e,isting and is unable to satisf"
(
the -udgment in favor of the emplo"ee,
the oDcers should be held liable for
acting on behalf of the corporation
C5ri"tian Literature Cru"a!e v.
NLRC
!n case of defance or non;
compliance with the writ of e,ecution,
the remed" is not for the grant in
another writ of e,ecution of continuing
backwages up to the time of actual
reinstatement 0he remed" is to fle a
motion to cite the erring part" in
contempt
Soli!bank Corp. v. C
!n termination cases, the burden of
proof rests upon the emplo"er to show
that the dismissal is for -ust and valid
cause3 failure to do so would
necessaril" mean that the dismissal
was illegal
%s a rule, emplo"ees who are illegall"
dismissed are entitled to full backwages
and reinstatement to their former
positions without loss of seniorit"
rights 0here are instances, however,
where reinstatement is no longer viable
as where the business of the emplo"er
has closed, or where the relations
between the emplo"er and the
emplo"ee have been so severel"
strained that it is not advisable to order
reinstatement, or where the emplo"ee
decides not to be reinstated /hen an
emplo"ee e,plicitl" pra"ed for an
award of separation pa" in lieu of
reinstatement, he forecloses
reinstatement as a relief b" implication
rt. 9BC
Franci"co v. NLRC
0here has been no uniform test to
determine the e,istence of an
emplo"er;emplo"ee relation Menerall",
courts have relied on the so;called
rig5t of control te"t where the
person for whom the services are
performed reserves a right to control
not onl" the end to be achieved but
also the means to be used in reaching
such end !n addition to the standard of
right;of;control, the e,isting economic
conditions prevailing between the
parties, like the inclusion of the
emplo"ee in the pa"rolls, can help in
determining the e,istence of an
emplo"er;emplo"ee relationship
Cowever, in certain cases the control
test is not suDcient to give a complete
picture of the relationship between the
parties, owing to the comple,it" of such
a relationship where several positions
have been held b" the worker 0here
are instances when, aside from the
emplo"er2s power to control the
emplo"ee with respect to the means
and methods b" which the work is to be
accomplished, economic realities of the
emplo"ment relations help provide a
comprehensive anal"sis of the true
classifcation of the individual, whether
as emplo"ee, independent contractor,
corporate oDcer or some other
capacit"
0he better approach would therefore be
to adopt a two;tiered test involving? )1*
the putative emplo"er2s power to
control the emplo"ee with respect to
the means and methods b" which the
work is to be accomplished3 and )&* the
underl"ing economic realities of the
activit" or relationship
broa!er economic reality te"t?
0he determination of the relationship
between emplo"er and emplo"ee
depends upon the circumstances of the
whole economic activit", && such as?
)1* the e,tent to which the services
performed are an integral part of the
emplo"er2s business3 )&* the e,tent of
the worker2s investment in e.uipment
and facilities3 )4* the nature and degree
of control e,ercised b" the emplo"er3
)'* the worker2s opportunit" for proft
and loss3 )5* the amount of initiative,
skill, -udgment or foresight re.uired for
the success of the claimed independent
enterprise3 )8* the permanenc" and
duration of the relationship between
the worker and the emplo"er3 and )>*
the degree of dependenc" of the
worker upon the emplo"er for his
19
continued emplo"ment in that line of
business
!n a business establishment, an
identifcation card is provided not onl"
as a securit" measure but mainl" to
identif" the holder thereof as a bona
fde emplo"ee of the frm that issues it
0ogether with the cash vouchers
covering an emplo"ee2s salaries for the
months stated therein, these matters
constitute substantial evidence
ade.uate to support a conclusion that
one is reall" an emplo"ee
% corporation who registers its
workers with the $$$ is proof that the
latter were the former2s emplo"ees
0he coverage of $ocial $ecurit" Law is
predicated on the e,istence of an
% !iminution of pay is pre-udicial to
the emplo"ee and amounts to
constructive dismissal Con"tructive
!i"mi""al is an involuntar" resignation
resulting in cessation of work resorted
to when continued emplo"ment
becomes impossible, unreasonable or
unlikel"3 when there is a demotion in
rank or a diminution in pa"3 or when a
clear discrimination, insensibilit" or
disdain b" an emplo"er becomes
unbearable to an emplo"ee /here an
emplo"ee ceases to work due to a
demotion of rank or a diminution of
pa", an unreasonable situation arises
which creates an adverse working
environment rendering it impossible for
such emplo"ee to continue working for
his emplo"er Cence, his severance
from the compan" was not of his own
making and therefore amounted to an
illegal termination of emplo"ment
Lambo v. NLRC
0here are two categories of
emplo"ees paid b" results? )1* those
whose time and performance are
supervised b" the emplo"er )Cere,
there is an element of control and
supervision over the manner as to how
the work is to be performed % piece;
rate worker belongs to this categor"
especiall" if he performs his work in the
compan" premises*3 and )&* those
whose time and performance are
unsupervised )Cere, the emplo"er2s
control is over the result of the work
/orkers on pak"ao and taka" basis
belong to this group* <oth classes of
workers are paid per unit accomplished
Biece;rate pa"ment is generall"
practiced in garment factories where
work is done in the compan" premises,
while pa"ment on pak"ao and taka"
basis is commonl" observed in the
agricultural industr", such as in sugar
plantations where the work is
performed in bulk or in volumes diDcult
to .uantif"
!n determining the e,istence of an
emplo"er;emplo"ee relationship, the
following elements must be considered?
)1* the selection and engagement of
the emplo"ee3 )&* the pa"ment of
wages3 )4* the power of dismissal3 and
)'* the power to control the emplo"ee2s
conduct @f these elements, the most
important criterion is whether the
emplo"er controls or has reserved the
right to control the emplo"ee not onl"
as to the result of the work but also as
to the means and methods b" which
the result is to be accomplished
0he mere fact that emplo"ees are
paid on a piece;rate basis does not
negate their status as regular
emplo"ees 0he term +wage7 is broadl"
defned in %rt (> of the Labor Code as
remuneration or earnings, capable of
being e,pressed in terms of mone"
whether f,ed or ascertained on a time,
task, piece or commission basis
Ba"ment b" the piece is -ust a method
of compensation and does not defne
the essence of the relations Nor does
the fact that emplo"ees are not
covered b" the $$$ aAect the
0o -ustif" a fnding of abandonment of
work, there must be proof of a
deliberate and un-ustifed refusal on the
part of an emplo"ee to resume his
emplo"ment 0he burden of proof is on
the emplo"er to show an une.uivocal
11
intent on the part of the emplo"ee to
discontinue emplo"ment Lere absence
is not suDcient !t must be
accompanied b" manifest acts
unerringl" pointing to the fact that the
emplo"ee simpl" does not want to work
an"more
Not all .uitclaims are per se invalid
or against public polic" <ut those )1*
where there is clear proof that the
waiver was wangled from an
unsuspecting or gullible person or )&*
where the terms of settlement are
unconscionable on their face are
invalid !n these cases, the law will step
in to annul the .uestionable
transaction
0he subordinate position of the
individual emplo"ee vis;a;vis
management renders him especiall"
vulnerable to its blandishments,
importunings, and even intimidations,
and results in his improvidentl" waiving
benefts to which he is clearl" entitled
0hus, .uitclaims, waivers or releases
are looked upon with disfavor for being
contrar" to public polic" and are
ineAective to bar claims for the full
measure of the workers2 legal rights %n
emplo"ee who is merel" constrained to
accept the wages paid to him is not
precluded from recovering the
diAerence between the amount he
actuall" received and that amount
which he should have received
0rent Sc5ool, 'nc. v. Damora
0here is nothing essentiall"
contradictor" between a defnite period
of an emplo"ment contract and the
nature of the emplo"ee2s duties set
down in that contract as being +usuall"
necessar" or desirable in the usual
business or trade of the emplo"er7 0he
concept of the emplo"ee2s duties as
being +usuall" necessar" or desirable in
the usual business or trade of the
emplo"er7 is not s"non"mous with or
identical to emplo"ment with a f,ed
term Logicall", the decisive
determinant in term emplo"ment
should not be the activities that the
emplo"ee is called upon to perform, but
the da" certain agreed upon b" the
parties for the commencement and
termination of their emplo"ment
relationship, a da" certain being
understood to be +that which must
necessaril" come, although it ma" not
be known when7 Sea"onal
employment, and employment for a
particular pro.ect are merel"
instances emplo"ment in which a
period, where not e,pressl" set down,
necessaril" implied
%rt &=9 impliedl" acknowledged the
propriet" of term emplo"ment? it listed
the +-ust causes7 for which +an
emplo"er ma" terminate emplo"ment
without a defnite period,7 thus giving
rise to the inference that if the
emplo"ment be with a defnite period,
there need be no -ust cause for
termination thereof if the ground be
precisel" the e,piration of the term
agreed upon b" the parties for the
duration of such emplo"ment
%rticle &=9 of the Labor Code has no
application to instances where a f,ed
period of emplo"ment was agreed upon
knowingl" and voluntaril" b" the
parties, without an" force, duress or
improper pressure being brought to
bear upon the emplo"ee and absent
an" other circumstances vitiating his
consent, or where it satisfactoril"
appears that the emplo"er and
emplo"ee dealt with each other on
more or less e.ual terms with no moral
dominance whatever being e,ercised
b" the former over the latter
Ra!a v. NLRC
/hile it is true that the pa"ment of
the supersedeas bond is an essential
re.uirement in the perfection of an
appeal, however, where the fee had
been paid although pa"ment was
dela"ed, the broader interests of -ustice
and the desired ob-ective of resolving
controversies on the merits demands
that the appeal be given due course
1&
Bro-ect emplo"ees2 work is
coterminous with the pro-ect or which
the" were hired Bro-ect emplo"ees, as
distinguished from regular or non;
pro-ect emplo"ees, are mentioned in
section &=1 of the Labor Code as those
+where the emplo"ment has been f,ed
for a specifc pro-ect or undertaking the
completion or termination of which has
been determined at the time of the
engagement of the emplo"ee7
1ro.ect employee" are those
emplo"ed in connection with a
particular construction pro-ect Non;
pro-ect )regular* emplo"ees are those
emplo"ed b" a construction compan"
without reference to an" particular
pro-ect
Bro-ect emplo"ees are not entitled to
termination pa" if the" are terminated
as a result of the completion of the
pro-ect or an" phase thereof in which
the" are emplo"ed, regardless of the
number of pro-ects in which the" have
been emplo"ed b" a particular
construction compan" Loreover, the
compan" is not re.uired to obtain
clearance from the $ecretar" of Labor
in connection with such termination
% non;pro-ect emplo"ee is diAerent in
that the emplo"ee is hired for more
than one pro-ect /hen a pro-ect to
which the" are individuall" assigned is
completed, the" would be assigned to
the ne,t pro-ect or a phase thereof !n
other words, the" belonged to a +work
pool7 from which the compan" would
draw workers for assignment to other
pro-ects at its discretion
'mbui!o v. NLRC
0he principal test for determining
whether an emplo"ee is a pro-ect
emplo"ee or a regular emplo"ee is
whether the pro-ect emplo"ee was
assigned to carr" out a specifc pro-ect
or undertaking, the duration and scope
of which were specifed at the time the
emplo"ee was engaged for that pro-ect
% pro.ect employee is one whose
emplo"ment has been f,ed for a
specifc pro-ect or undertaking, the
completion or termination of which has
been determined at the time of the
engagement of the emplo"ee or where
the work or service to be performed is
seasonal in nature and the emplo"ment
is for the duration of the season
% pro-ect emplo"ee or a member of a
work pool ma" ac.uire the status of a
regular emplo"ee when the following
concur? )1* 0here is a continuous
rehiring of pro-ect emplo"ees even after
NtheO cessation of a pro-ect3 and )&* 0he
tasks performed b" the alleged +pro-ect
emplo"ee7 are vital, necessar" and
indispensable to the usual business or
trade of the emplo"er
Low volume of work and belatedl",
completion of pro-ect are not valid
causes for dismissal under %rticles &=&
and &=4 of the Labor Code 0hus,
petitioner is entitled to reinstatement
without loss of seniorit" rights and
other privileges, and to her full
backwages, inclusive of allowances,
and to her other benefts or their
monetar" e.uivalent computed from
the time her compensation was
withheld from her up to the time of her
actual reinstatement Cowever,
compl"ing with the principle" of
;"u"pen"ion of Aork< an! ;no
Aork, no pay< between the end of one
pro-ect and the start of a new one, in
computing petitioner2s backwages, the
amounts corresponding to what could
have been earned during the periods
from the date petitioner was dismissed
until her reinstatement when private
respondent was not undertaking an"
pro-ect, should be deducted
Fatima v. Nat6l Fe!eration of
Sugarcane #orker"EFoo! an!
General -ra!e
:or emplo"ees to be e,cluded from
those classifed as regular emplo"ees, it
is not enough that the" perform work or
services that are seasonal in nature
0he" must have also been emplo"ed
onl" for the duration of one season
14
0he primar" standard of determining
regular emplo"ment is the reasonable
connection between the particular
activit" performed b" the emplo"ee in
relation to the usual trade or business
of the emplo"er 0he test is whether the
former is usuall" necessar" or desirable
in the usual trade or business of the
emplo"er 0he connection can be
determined b" considering the nature
of the work performed and its relation
to the scheme of the particular
business or trade in its entiret" %lso if
the emplo"ee has been performing the
-ob for at least a "ear, even if the
performance is not continuous and
merel" intermittent, the law deems
repeated and continuing need for its
performance as suDcient evidence of
the necessit" if not indispensabilit" of
that activit" to the business Cence, the
emplo"ment is considered regular, but
onl" with respect to such activit" and
while such activit" e,ists
0he fact that workers do not work
continuousl" for one whole "ear but
onl" for the duration of the season does
not detract from considering them in
regular emplo"ment since seasonal
workers who are called to work from
time to time and are temporaril" laid oA
during oA;season are not separated
from service in said period, but merel"
considered on leave until re;emplo"ed
/here there is no showing of clear,
valid and legal cause for the
termination of emplo"ment, the law
considers the matter a case of illegal
dismissal and the burden is on the
emplo"er to prove that the termination
was for a valid and authorized cause
Millare" v. NLRC
%rticle &=9 of the Labor Code does
not appl" to overseas emplo"ment
C)( Con"truction Corp. v. NLRC
6ven after a -udgment has become
fnal and e,ecutor", an appellate court
ma" still modif" or alter it when
intervening circumstances render
e,ecution of that decision un-ust and
ine.uitable 0his principle does not
appl", however, when the basis for
modifcation is previousl" e,isting
evidence that a part" fails to adduce
during the hearing on the merits,
despite ample opportunit" to do so
6,cept for correction of clerical
errors, fnal and e,ecutor" -udgments
can neither be amended nor altered,
even if the purpose is to correct
erroneous conclusions of fact or of law
0he pa"ment of full back wages must
be given without diminution of income
earned during the +no;work7 status of
an illegall" dismissed emplo"ee
Son%a v. 0S)C0N 0roa!ca"ting
Corp.
0he control test is the most
important test our courts appl" in
distinguishing an emplo"ee from an
independent contractor 0his test is
based on the e,tent of control the hirer
e,ercises over a worker 0he greater
the supervision and control the hirer
e,ercises, the more likel" the worker is
deemed an emplo"ee 0he converse
holds true as well K the less control the
hirer e,ercises, the more likel" the
worker is considered an independent
contractor
% radio broadcast specialist who
works under minimal supervision is an
independent contractor <eing an
e,clusive talent does not b" itself mean
that a 0IFradio talent is an emplo"ee of
%<$;C<N 6ven an independent
contractor can validl" provide his
services e,clusivel" to the hiring part"
!n the broadcast industr", e,clusivit" is
not necessaril" the same as control
0he hiring of e,clusive talents is a
widespread and accepted practice in
the entertainment industr"'8 0his
practice is not designed to control the
means and methods of work of the
talent, but simpl" to protect the
investment of the broadcast station
0he broadcast station normall" spends
1'
substantial amounts of mone", time
and eAort +in building up its talents as
well as the programs the" appear in
and thus e,pects that said talents
remain e,clusive with the station for a
commensurate period of time7
Normall", a much higher fee is paid to
talents who agree to work e,clusivel"
for a particular radio or television
station !n short, the huge talent fees
partiall" compensates for e,clusivit"
!n a labor;onl" contract, there are
three parties involved? )1* the +labor;
onl"7 contractor3 )&* the emplo"ee who
is ostensibl" under the emplo" of the
+labor;onl"7 contractor3 and )4* the
principal who is deemed the real
emplo"er #nder this scheme, t5e
;labor)only< contractor i" t5e
agent of t5e principal 0he law
makes the principal responsible to the
emplo"ees of the +labor;onl"
contractor7 as if the principal itself
directl" hired or emplo"ed the
emplo"ees
Fierne" v. NLRC
Rein"tatement means restoration
to a state or condition from which one
had been removed or separated !n
case of probationar" emplo"ment,
%rticle &=1 of the Labor Code re.uires
the emplo"er to make known to his
emplo"ee at the time of the latter2s
engagement of the reasonable
standards under which he ma" .ualif"
as a regular emplo"ee
#nder %rticle &=9 of the Labor Code,
a regular emplo"ee is one who is
engaged to perform activities which are
necessar" or desirable in the usual
business or trade of the emplo"er, or a
casual emplo"ee who has rendered at
least one "ear of service, whether
continuous or broken, with respect to
the activit" in which he is emplo"ed
0he primar" standard, therefore, of
determining regular emplo"ment is the
reasonable connection between the
particular activit" performed b" the
emplo"ee in relation to the usual trade
or business of the emplo"er 0he test is
whether the former is usuall" necessar"
or desirable in the usual business or
trade of the emplo"er 0he connection
can be determined b" considering the
nature of the work performed and its
relation to the scheme of the particular
business or trade in its entiret" %lso if
the emplo"ee has been performing the
-ob for at least a "ear, even if the
performance is not continuous and
merel" intermittent, the law deems
repeated and continuing need for its
performance as suDcient evidence of
the necessit" if not indispensabilit" of
that activit" to the business Cence, the
emplo"ment is considered regular, but
onl" with respect to such activit" and
while such activit" e,ists
%n emplo"er becomes liable to pa"
indemnit" to an emplo"ee who has
been dismissed if, in eAecting such
dismissal, the emplo"er fails to compl"
with the re.uirements of due process
0he indemnit" is in the form of nominal
damages intended not to penalize the
emplo"er but to vindicate or recognize
the emplo"ee2s right to procedural due
process which was violated b" the
emplo"er #nder %rticle &&&1 of the
Civil Code, nominal !amage" are
ad-udicated in order that a right of the
plaintiA, which has been violated or
invaded b" the defendant, ma" be
vindicated or recognized, and not for
the purpose of indemnif"ing the
plaintiA for an" loss suAered b" him
!ndemnit" is not incompatible with
the award of backwages 0hese two
awards are based on diAerent
considerations <ackwages are granted
on grounds of e.uit" to workers for
earnings lost due to their illegal
dismissal from work @n the other hand,
the award of indemnit", as we have
earlier held, is meant to vindicate or
recognize the right of an emplo"ee to
due process which has been violated b"
the emplo"er
%rticle &=4 of the Labor Code
re.uires an emplo"er to serve a notice
of dismissal upon the emplo"ees
15
sought to be terminated and to the
Department of Labor, at least one
month before the intended date of
termination :ailure of the emplo"er to
compl" therewith renders him liable to
pa" indemnit" to the dismissed
emplo"ee
Remington 'n!u"trial Sale" Corp. v.
Ca"taGe!a
% househelper in the staA houses of
an industrial compan" is a regular
emplo"ee of the said frm
#nder Rule G!!!, $ection 1)b*, <ook 4
of the Labor Code, as amended, the
terms ;5ou"e5elper< or ;!ome"tic
"ervant< are defned as follows? +0he
term Phousehelper2 as used herein is
s"non"mous to the term Pdomestic
servant2 and shall refer to an" person,
whether male or female, who renders
services in and about the emplo"er2s
home and which services are usuall"
necessar" or desirable for the
maintenance and en-o"ment thereof,
and ministers e,clusivel" to the
personal comfort and en-o"ment of the
emplo"er2s famil"7
$uch househelper or domestic
servant is emplo"ed in the emplo"er2s
home to minister e,clusivel" to the
personal comfort and en-o"ment of the
emplo"er2s famil" $uch defnition
covers famil" drivers, domestic
servants, laundr" women, "a"as,
gardeners, housebo"s and similar
househelps
0he criteria is the personal comfort
and en-o"ment of the famil" of the
emplo"er in the home of said emplo"er
/hile it ma" be true that the nature of
the work of a househelper, domestic
servant or laundr"woman in a home or
in a compan" staAhouse ma" be similar
in nature, the diAerence in their
circumstances is that in the former
instance the" are actuall" serving the
famil" while in the latter case, whether
it is a corporation or a single
proprietorship engaged in business or
industr" or an" other agricultural or
similar pursuit, service is being
rendered in the staAhouses or within
the premises of the business of the
emplo"er !n such instance, the" are
emplo"ees of the compan" or emplo"er
in the business concerned entitled to
the privileges of a regular emplo"ee
0he mere fact that the househelper
or domestic servant is working within
the premises of the business of the
emplo"er and in relation to or in
connection with its business, as in its
staAhouses for its guest or even for its
oDcers and emplo"ees, warrants the
conclusion that such househelper or
domestic servant is and should be
considered as a regular emplo"ee of
the emplo"er and not as a mere famil"
househelper or domestic servant as
contemplated in Rule G!!!, $ection 1)b*,
<ook 4 of the Labor Code, as amended
% regular emplo"ee en-o"s the right
to securit" of tenure under %rticle &>(
of the Labor Code and ma" onl" be
dismissed for a -ust or authorized
cause, otherwise the dismissal
becomes illegal and the emplo"ee
becomes entitled to reinstatement and
full backwages computed from the time
compensation was withheld up to the
%bandonment is the deliberate and
un-ustifed refusal of an emplo"ee to
resume his emplo"ment !t is a form of
neglect of dut"3 hence, a -ust cause for
termination of emplo"ment b" the
emplo"er under %rticle &=& of the Labor
Code, which enumerates the -ust
causes for termination b" the emplo"er
:or a valid fnding of abandonment,
these two factors should be present? )1*
the failure to report for work or absence
without valid or -ustifable reason3 and
)&* a clear intention to sever emplo"er;
emplo"ee relationship, with the second
as the more determinative factor which
is manifested b" overt acts from which
it ma" be deduced that the emplo"ee
has no more intention to work 0he
intent to discontinue the emplo"ment
must be shown b" clear proof that it
was deliberate and un-ustifed
18
%n emplo"ee who loses no time in
protesting her la"oA cannot b" an"
reasoning be said to have abandoned
her work 0he fling of an emplo"ee of a
complaint for illegal dismissal with a
pra"er for reinstatement is proof
enough of her desire to return to work,
thus, negating the emplo"er2s charge of
abandonment
+uterte v. King"Aoo! -ra!ing Co.,
'nc.
'""ue/ :or purposes of %rticle &=' of
the Labor Code, would the dismissal of
an emplo"ee on the ground of disease
under the said %rticle &=' still re.uire
the emplo"er to present a certifcation
from a competent public health
authorit" that the disease is of such a
nature that it could not be cured within
a period of si, months even with proper
medical treatmentH
!n order to validl" terminate
emplo"ment on the basis of disease,
<ook I!, Rule !, $ection = of the
@mnibus !mplementing Rules of the
Labor Code re.uires?
Disease as a ground for dismissal Q
/here the emplo"ee suAers from a
disease and his continued emplo"ment
is prohibited b" law or pre-udicial to his
health or to the health of his co;
emplo"ees, the emplo"er shall not
terminate his emplo"ment unle""
t5ere i" a certi8cation by a
competent public 5ealt5 aut5ority
t5at t5e !i"ea"e i" of "uc5 nature
or at "uc5 a "tage t5at it cannot be
cure! Ait5in a perio! of "i7 &H*
mont5" even Ait5 proper me!ical
treatment !f the disease or ailment
can be cured within the period, the
emplo"er shall not terminate the
emplo"ee but shall ask the emplo"ee to
take a leave 0he emplo"er shall
reinstate such emplo"ee to his former
position immediatel" upon the
restoration of his normal health )<ook
I!, Rule 1, $ec = of the !mplementing
Rules*
0he emplo"er, before it can legall"
dismiss its emplo"ee on the ground of
disease, must adduce a certifcation
from a competent public authorit" that
the disease of which its emplo"ee is
suAering is of such nature or at such a
stage that it cannot be cured within a
period of si, months even with proper
treatment
Coca Cola 0ottler" &15il".*, 'nc. v.
Climaco
% provision in a Retainer %greement
that a worker is on call during
emergenc" cases did not make him a
regular emplo"ee
0he schedule of work and the
re.uirement to be on call for
emergenc" cases do not amount to
such control, but are necessar"
incidents to the Retainership
%greement
Fillamaria, =r. v. C
0he boun!ary)5ulog "c5eme
creates both emplo"er;emplo"ee and
vendor;vendee relationship 0he
boun!ary "y"tem is a scheme b" an
ownerFoperator engaged in transporting
passengers as a common carrier to
primaril" govern the compensation of
the driver, that is, the latter2s dail"
earnings are remitted to the
ownerFoperator less the e,cess of the
boundar" which represents the driver2s
compensation #nder this s"stem, the
ownerFoperator e,ercises control and
supervision over the driver 0he
management of the business is still in
the hands of the ownerFoperator, who,
being the holder of the certifcate of
public convenience, must see to it that
the driver follows the route prescribed
b" the franchising and regulator"
authorit", and the rules promulgated
with regard to the business operations
0he fact that the driver does not
receive f,ed wages but onl" the e,cess
of the +boundar"7 given to the
ownerFoperator is not suDcient to
change the relationship between them
!ndubitabl", the driver performs
1>
activities which are usuall" necessar"
or desirable in the usual business or
trade of the ownerFoperator
rt. 9B2
'CMC v. NLRC
:ailure to .ualif" as a regular
emplo"ee in accordance with the
reasonable standards of the emplo"er
is a -ust cause for terminating a
probationar" emplo"ee specifcall"
recognized under %rticle &=1
% probationary employee is one
who is on trial b" an emplo"er during
which the emplo"er determines
whether or not he is .ualifed for
permanent emplo"ment %
probationar" appointment is made to
aAord the emplo"er an opportunit" to
observe the ftness of a probationer
while at work, and to ascertain whether
he will become a proper and eDcient
emplo"ee 0he word +probationar"7, as
used to describe the period of
emplo"ment, implies the purpose of the
term or period, but not its length
<eing in the nature of a +trial period7
the essence of a probationar" period of
emplo"ment fundamentall" lies in the
purpose or ob-ective sought to be
attained b" both the emplo"er and the
emplo"ee during said period 0he
length of time is immaterial in
determining the correlative rights of
both in dealing with each other during
said period /hile the emplo"er,
observes the ftness, propriet" and
eDcienc" of a probationer to ascertain
whether he is .ualifed for permanent
emplo"ment, the probationer, on the
other, seeks to prove to the emplo"er,
that he has the .ualifcations to meet
the reasonable standards for
permanent emplo"ment
0he emplo"er has the right or is at
libert" to choose who will be hired and
who will be denied emplo"ment !n that
sense, it is within the e,ercise of the
right to select his emplo"ees that the
emplo"er ma" set or f, a probationar"
period within which the latter ma" test
and observe the conduct of the former
before hiring him permanentl"
%rticle &=1 of the Labor Code gives
ample authorit" to the emplo"er to
terminate a probationar" emplo"ee for
a -ust cause or when he fails to .ualif"
as a regular emplo"ee in accordance
with reasonable standards made known
b" the emplo"er to the emplo"ee at the
time of his engagement 0here is
nothing under %rticle &=1 of the Labor
Code that would preclude the emplo"er
from e,tending a regular or a
permanent appointment to an
emplo"ee once the emplo"er fnds that
the emplo"ee is .ualifed for regular
emplo"ment even before the e,piration
of the probationar" period Conversel",
if the purpose sought b" the emplo"er
is neither attained nor attainable within
the said period, %rticle &=1 of the Labor
Code does not likewise preclude the
emplo"er from terminating the
probationar" emplo"ment on -ustifable
causes as in the instant case
Cagayan Capitol College v. NLRC
0he legal re.uisites for a teacher to
ac.uire permanent emplo"ment and
securit" of tenure are as follows? )1*
0he teacher is a full time teacher3 )&*
0he teacher must have rendered three
)4* consecutive "ears of service3 and
)4* $uch service must have been
satisfactor"
0he emplo"er is the one who is to set
the standards and determine whether
or not the services of an emplo"ee are
satisfactor" !t is the prerogative of an
emplo"er to determine whether or not
the said standards have been complied
with !n fact, it is the right of the
emplo"er to shorten the probationar"
period if he is impressed with the
services of the emplo"ees
0his prerogative of a school to provide
standards for its teachers and to
determine whether or not these
standards have been met is in
accordance with academic freedom and
constitutional autonom" which give
1=
educational institution the right to
choose who should teach
Mit"ubi"5i Motor" 15il". Corp. v.
C5ry"ler 15il". Labor Union
%n emplo"er, in the e,ercise of its
management prerogative, ma" hire an
emplo"ee on a probationar" basis in
order to determine his ftness to
perform work #nder %rticle &=1 of the
Labor Code, the emplo"er must inform
the emplo"ee of the standards for
which his emplo"ment ma" be
considered for regularization $uch
probationar" period, unless covered b"
an apprenticeship agreement, shall not
e,ceed 8 months from the date the
emplo"ee started working 0he
emplo"ee2s services ma" be terminated
for -ust cause or for his failure to .ualif"
as a regular emplo"ee based on
reasonable standards made known to
him
0he probationar" period of 8 months
consists of 1=9 da"s
0he following grounds would -ustif"
the dismissal of an emplo"ee? )a*
$erious misconduct or willful
disobedience b" the emplo"ee of the
lawful orders of the emplo"er or
representative in connection with his
work3 )b* Mross and habitual neglect b"
the emplo"ee of his duties3 )c* :raud or
willful breach b" the emplo"ee of the
trust reposed in him b" his emplo"er or
dul" authorized representative3 )d*
Commission of a crime or oAense b"
the emplo"ee against the person of his
emplo"er or of an" immediate member
of his famil" or his dul" authorized
representative3 and )e* @ther causes
analogous to the foregoing
#nder %rticle &=& of the Labor Code,
an unsatisfactor" rating can be a -ust
cause for dismissal onl" if it amounts to
gross and habitual neglect of duties
Gro"" negligence has been defned to
be the want or absence of even slight
care or diligence as to amount to a
reckless disregard of the safet" of
person or propert" !t evinces a
thoughtless disregard of conse.uences
without e,erting an" eAort to avoid
them
0he normal conse.uences of illegal
dismissal are reinstatement without
loss of seniorit" rights and the pa"ment
of backwages computed from the time
the emplo"ee2s compensation was
withheld from him
Retrenc5ment is an authorized
cause for termination of emplo"ment
which the law accords an emplo"er who
is not making good in its operations in
order to cut back on e,penses for
salaries and wages b" la"ing oA some
emplo"ees 0he purpose of
retrenchment is to save a fnanciall"
ailing business establishment from
eventuall" collapsing
rt. 9B9
Serrano v. NLRC
0he re.uirement to give a written
notice of termination at least 49 da"s in
advance is a re.uirement of %rt &=4 of
the Labor Code
/hat the law re.uires is a written
notice to the emplo"ees concerned and
that re.uirement is mandator" 0he
notice must also be given at least one
month in advance of the intended date
of retrenchment to enable the
emplo"ees to look for other means of
emplo"ment and therefore to ease the
impact of the loss of their -obs and the
corresponding income
0he purpose of such previous notice
is to give the emplo"ee some time to
prepare for the eventual loss of his -ob
as well as the D@L6 the opportunit" to
ascertain the verit" of the alleged
authorized cause of termination $uch
purpose would not be served b" the
simple e,pedient of pa"ing 49 da"s
salar" in lieu of notice of an emplo"ee2s
impending dismissal, as b" then the
loss of emplo"ment would have been a
fait accompli
1(
0he order to pa" full backwages is a
conse.uence of the emplo"er2s action
in dismissing an emplo"ee without
notice which makes said dismissal
ineAectual 0he emplo"ee is considered
not to have been terminated from his
emplo"ment until it is fnall"
determined that his
dismissalFtermination of emplo"ment
was for cause and, therefore, he should
be paid his salaries in the interim
gabon v. NLRC
0o dismiss an emplo"ee, the law
re.uires not onl" the e,istence of a -ust
and valid cause but also en-oins the
emplo"er to give the emplo"ee the
opportunit" to be heard and to defend
himself %rticle &=& of the Labor Code
enumerates the -ust causes for
termination b" the emplo"er? )a*
serious misconduct or willful
disobedience b" the emplo"ee of the
lawful orders of his emplo"er or the
latter2s representative in connection
with the emplo"ee2s work3 )b* gross and
habitual neglect b" the emplo"ee of his
duties3 )c* fraud or willful breach b" the
emplo"ee of the trust reposed in him b"
his emplo"er or his dul" authorized
representative3 )d* commission of a
crime or oAense b" the emplo"ee
against the person of his emplo"er or
an" immediate member of his famil" or
his dul" authorized representative3 and
)e* other causes analogous to the
foregoing
%bandonment is the deliberate and
un-ustifed refusal of an emplo"ee to
resume his emplo"ment !t is a form of
neglect of dut", hence, a -ust cause for
emplo"er :or a valid fnding of
abandonment, these two factors should
be present? )1* the failure to report for
work or absence without valid or
-ustifable reason3 and )&* a clear
intention to sever emplo"er;emplo"ee
relationship, with the second as the
more determinative factor which is
manifested b" overt acts from which it
ma" be deduced that the emplo"ees
has no more intention to work 0he
intent to discontinue the emplo"ment
must be shown b" clear proof that it
was deliberate and un-ustifed
Subcontracting for another
compan" clearl" shows the intention to
sever the emplo"er;emplo"ee
relationship
%n emplo"ee who deliberatel"
absented from work without leave or
permission from his emplo"er, for the
purpose of looking for a -ob elsewhere,
is considered to have abandoned his
-ob
0he procedure for terminating an
emplo"ee is found in <ook I!, Rule !,
$ection &)d* of the Omnibus Rules
Implementing the Labor Code?
Standards of due process:
requirements of notice. K !n all
cases of termination of
emplo"ment, the following
standards of due process shall be
substantiall" observed?
! :or termination of emplo"ment
based on -ust causes as defned
in %rticle &=& of the Code?
)a* % written notice served on the
emplo"ee specif"ing the ground
or grounds for termination, and
giving to said emplo"ee
reasonable opportunit" within
which to e,plain his side3
)b* % hearing or conference
during which the emplo"ee
concerned, with the assistance of
counsel if the emplo"ee so
desires, is given opportunit" to
respond to the charge, present
his evidence or rebut the
evidence presented against him3
and
)c* % written notice of
termination served on the
emplo"ee indicating that upon
due consideration of all the
circumstances, grounds have
been established to -ustif" his
termination
!n case of termination, the
foregoing notices shall be served
on the emplo"ee2s last known
address
&9
Dismissals based on -ust causes
contemplate acts or omissions
attributable to the emplo"ee while
dismissals based on authorized causes
involve grounds under the Labor Code
which allow the emplo"er to terminate
emplo"ees % termination for an
authorized cause re.uires pa"ment of
separation pa" /hen the termination
of emplo"ment is declared illegal,
reinstatement and full backwages are
mandated under %rticle &>( !f
reinstatement is no longer possible
where the dismissal was un-ust,
separation pa" ma" be granted
Brocedurall", )1* if the dismissal is
based on a -ust cause under %rticle
&=&, the emplo"er must give the
emplo"ee two written notices and a
hearing or opportunit" to be heard if
re.uested b" the emplo"ee before
terminating the emplo"ment? a notice
specif"ing the grounds for which
dismissal is sought a hearing or an
opportunit" to be heard and after
hearing or opportunit" to be heard, a
notice of the decision to dismiss3 and
)&* if the dismissal is based on
authorized causes under %rticles &=4
and &=', the emplo"er must give the
emplo"ee and the Department of Labor
and 6mplo"ment written notices 49
da"s prior to the eAectivit" of his
separation
:rom the foregoing rules four possible
situations ma" be derived? )1* the
dismissal is for a -ust cause under
%rticle &=& of the Labor Code, for an
authorized cause under %rticle &=4, or
for health reasons under %rticle &=',
and due process was observed3 )&* the
dismissal is without -ust or authorized
cause but due process was observed3
)4* the dismissal is without -ust or
authorized cause and there was no due
process3 and )'* the dismissal is for -ust
or authorized cause but due process
was not observed
!n the frst situation, the dismissal is
undoubtedl" valid and the emplo"er
will not suAer an" liabilit"
!n the second and third situations
where the dismissals are illegal, %rticle
&>( mandates that the emplo"ee is
entitled to reinstatement without loss of
seniorit" rights and other privileges and
full backwages, inclusive of allowances,
and other benefts or their monetar"
e.uivalent computed from the time the
compensation was not paid up to the
!n the fourth situation, the dismissal
should be upheld /hile the procedural
infrmit" cannot be cured, it should not
invalidate the dismissal Cowever, the
emplo"er should be held liable for non-
compliance with the procedural
requirements of due process
#enp5il or 0elate! +ue 1roce""
Rule? /here the emplo"er had a valid
reason to dismiss an emplo"ee but did
not follow the due process re.uirement,
the dismissal ma" be upheld but the
emplo"er will be penalized to pa" an
indemnit" to the emplo"ee
/enphil abandoned the Serrano
!octrine &!i"mi"" noA, pay later
rule*? 0he violation b" the emplo"er of
the notice re.uirement in termination
for -ust or authorized causes was not a
denial of due process that will nullif"
the termination Cowever, the dismissal
is ineAectual and the emplo"er must
pa" full backwages from the time of
termination until it is -udiciall" declared
that the dismissal was for a -ust or
authorized cause
!n cases involving dismissals for
cause but without observance of the
twin re.uirements of notice and
hearing, the better rule is to abandon
the $errano doctrine and to follow
/enphil b" holding that the dismissal
was for -ust cause but imposing
sanctions on the emplo"er $uch
sanctions, however, must be stiAer
than that imposed in /enphil
/here the dismissal is for a -ust
cause, he lack of statutor" due process
should not nullif" the dismissal, or
render it illegal, or ineAectual
Cowever, the emplo"er should
indemnif" the emplo"ee for the
violation of his statutor" rights 0he
indemnit" to be imposed should be
stiAer to discourage the abhorrent
practice of +dismiss now, pa" later7
&1
0he sanction should be in the nature of
indemnifcation or penalt" and should
depend on the facts of each case,
taking into special consideration the
gravit" of the due process violation of
the emplo"er
%n emplo"er is liable to pa"
indemnit" in the form of nominal
!amage" to an emplo"ee who has
been dismissed if, in eAecting such
dismissal, the emplo"er fails to compl"
with the re.uirements of due process
Fierne" v. NLRC
see supra
u"tria v. NLRC
0he provision which governs the
dismissal of emplo"ees, is
comprehensive enough to include
religious corporations %rticle &>= of the
Labor Code on post;emplo"ment states
that +the provisions of this 0itle shall
appl" to all establishments or
undertakings, whether for proft or not7
$ection 1, Rule 1, <ook I! on the
0ermination of 6mplo"ment and
Retirement, categoricall" includes
religious institutions in the coverage of
the law, to wit? +$ec 1 Coverage Q
0his Rule shall appl" to all
establishments and undertakings,
whether operated for proft or not,
including educational, medical,
charitable and religious institutions and
organizations, in cases of regular
emplo"ment with the e,ception of the
Movernment and its political
subdivisions including government;
owned or controlled corporations7
0he re.uisites for a valid dismissal
are? )a* the emplo"ee must be aAorded
due process, ie, he must be given an
himself, and3 )b* the dismissal must be
for a valid cause as provided in %rticle
&=& of the Labor Code /ithout the
concurrence of this twin re.uirements,
the termination would, in the e"es of
the law, be illegal
<efore the services of an emplo"ee
can be validl" terminated, %rticle &>>
)b* of the Labor Code and $ection &,
Rule GG!!!, <ook I of the Rules
!mplementing the Labor Code further
re.uire the emplo"er to furnish the
emplo"ee with two )&* written notices,
to wit? )a* a written notice served on
the emplo"ee specif"ing the ground or
grounds for termination, and giving to
said emplo"ee reasonable opportunit"
within which to e,plain his side3 and,
)b* a written notice of termination
served on the emplo"ee indicating that
upon due consideration of all the
circumstances, grounds have been
established to -ustif" his termination
0he frst notice, which ma" be
considered as the proper charge, serves
to apprise the emplo"ee of the
particular acts or omissions for which
his dismissal is sought 0he second
notice on the other hand seeks to
inform the emplo"ee of the emplo"er2s
decision to dismiss him 0his decision,
however, must come onl" after the
emplo"ee is given a reasonable period
from receipt of the frst notice within
which to answer the charge and ample
opportunit" to be heard and defend
himself with the assistance of a
representative, if he so desires
% breach is willful if it is done
intentionall", knowingl" and purposel",
without -ustifable e,cuse, as
distinguished from an act done
carelessl", thoughtlessl", heedlessl" or
inadvertentl" !t must rest on
substantial grounds and not on the
emplo"er2s arbitrariness, whims,
caprices or suspicion
Mi"con!uct has been defned as
improper or wrong conduct !t is the
transgression of some established and
defnite rule of action, a forbidden act,
a dereliction of dut", willful in
character, and implies wrongful intent
and not mere error in -udgment :or
misconduct to be considered serious it
must be of such grave and aggravated
character and not merel" trivial or
unimportant
&&
San Miguel Corp. v. Ubal!o
Regulation of manpower b" the
compan" clearl" falls within
management prerogative % vali!
e7erci"e of management
prerogative encompasses hiring, work
assignments, working methods, time,
place and manner of work, tools to be
used, processes to be followed,
supervision of workers, working
regulations, transfer of emplo"ees,
work supervision, la";oA of workers,
and the discipline, dismissal and recall
of workers 6,cept as provided for, or
limited b", special laws, an emplo"er is
free to regulate, according to his own
discretion and -udgment, all aspects of
emplo"ment
0he emplo"er ma" terminate an
emplo"ment on the ground of serious
misconduct or willful disobedience b"
the emplo"ee of the lawful orders of his
emplo"er or representative in
connection with his work (!nfractions
of compan" rules and regulations have
been declared to belong to this
categor" and thus are valid causes for
emplo"er
/illful disobedience of the
emplo"er2s lawful orders, as a -ust
cause for the dismissal of an emplo"ee,
envisages the concurrence of at least
two re.uisites? )1* the emplo"ee2s
assailed conduct must have been willful
or intentional, the willfulness being
characterized b" a +wrongful and
perverse attitude73 )&* the order
violated must have been reasonable,
lawful, made known to the emplo"ee
and must pertain to the duties which he
had been engaged to discharge 11
<oth re.uisites are present in the
instant case
Garcia v. NLRC
Lere absence or failure to report for
work, after notice to return, is not
enough to amount to such
abandonment :or a valid fnding of
abandonment, two factors must be
present, viz3 )1* the failure to report for
work or absence without valid or
-ustifable reason3 and )&* a clear
intention to sever the emplo"er;
emplo"ee relationship, with the second
element as the more determinative
factor being manifested b" some overt
acts 0here must be a concurrence of
the intention to abandon and some
overt acts from which an emplo"ee
ma" be deduced as having no more
intention to work $uch intent to
discontinue the emplo"ment must be
shown b" clear proof that it was
deliberate and un-ustifed
$trict compliance b" the emplo"er
with the demands of both procedural
and substantive due process is a
condition sine .ua non for the
termination to be declared valid 0he
law re.uires that the emplo"er must
furnish the worker sought to be
dismissed with two written notices
before termination of emplo"ment can
be legall" eAected? 1 notice which
apprises the emplo"ee of the particular
acts or omissions for which his
dismissal is sought3 and & the
subse.uent notice which informs the
emplo"ee of the emplo"er2s decision to
dismiss him
%n illegall" dismissed emplo"ee is
entitled to 1* either reinstatement or
separation pa" if reinstatement is no
longer viable, and &* backwages
Family 1lanning $rg. of t5e 15il".
v. NLRC
!t is one of the fundamental duties of
the emplo"ee to "ield obedience to all
reasonable rules, orders, and
instructions of the emplo"er, and willful
or intentional disobedience thereof, as
a general rule, -ustifes recission of the
contract of service and the peremptor"
dismissal of the emplo"ee
!n order that the willful disobedience
b" the emplo"ee ma" constitute a -ust
cause for terminating his emplo"ment,
the orders, regulations, or instructions
&4
of the emplo"er must be? )1*
reasonable and lawful3
)&* suDcientl" known to the emplo"ee3
and )4* in connection with the duties
which the emplo"ee has been engaged
to discharge
Not ever" case of willful disobedience
b" an emplo"ee of a lawful order of the
emplo"er can be reasonabl" penalized
with dismissal 0here must be
reasonable proportionalit" between the
willful disobedience b" the emplo"ee
and the penalt" imposed therefore
prior clearance rule? %rt &>= )b*?
+)b* /ith or without a collective
agreement, no emplo"er ma" shut
down his established or dismiss or
terminate the emplo"ment of
emplo"ees with at least one "ear of
service during the last two "ears,
whether such service is continuous or
broken, without prior written authorit"
issued in accordance with such rules
and regulations as the $ecretar" ma"
promulgate7 Rule G!I $ection & of the
Rules !mplementing the Labor Code
which was still in force at that time,
likewise provides? $ec & $hutdown or
dismissal without clearance Q %n"
shutdown or dismissal without prior
clearance shall be conclusivel"
presumed to be termination of
emplo"ment without a -ust cause 0he
Regional Director shall, in such case,
order the immediate reinstatement of
the emplo"ee and the pa"ment of his
wages from the time of the shutdown or
dismissal until the time of
reinstatement
(!ge pparel, 'nc. v. NLRC
0he emplo"er has a right to dismiss
emplo"ees for valid causes after proper
observance of due process ' 0hese
valid causes are categorized into two
groups, ie, +-ust7 causes under %rticle
&=& of the Labor Code and +authorized7
causes under %rticles &=4 and &=' of
the same code
0he -ust causes for termination of
emplo"ment, enumerated in %rticle
&=&, include Q )a* $erious misconduct
or willful disobedience b" the emplo"ee
of the lawful orders of his emplo"er or
representative relative to his work3 )b*
Mross and habitual neglect b" the
emplo"ee of his duties3 )c* :raud or
willful breach b" the emplo"ee of the
trust reposed in him b" his emplo"er or
dul" authorized representative3 )d*
Commission of a crime or oAense b"
the emplo"ee against the person of his
emplo"er or an" immediate member of
his famil" or his dul" authorized
representative3 and )e* @ther causes
analogous to the foregoing
%n emplo"ee who is terminated from
emplo"ment for a -ust cause is not
entitled to pa"ment of separation
benefts= $ection >, Rule !, <ook I!, of
the @mnibus Rules !mplementing the
Labor Code provides, thus? +$ec >
0ermination of emplo"ment b"
emplo"er Q 0he -ust causes for
terminating the services of an
emplo"ee shall be those provided in
%rticle &=& of the Code 0he separation
from work of an emplo"ee for a -ust
cause does not entitle him to the
termination pa" provided in Code,
without pre-udice, however, to
whatever rights, benefts and privileges
he ma" have under the applicable
individual or collective bargaining
agreement with the emplo"er or
voluntar" emplo"er polic" or practice7
%rticle &=4, in turn, specifes the
authorized causes for the termination
of emplo"ment, viz? )a* installation of
labor;saving devices3 )b* redundanc"3
)c* retrenchment to prevent losses3 and
)d* closing or cessation of operation of
the establishment or undertaking
unless the closing is for the purpose of
circumventing the provisions of law
%rticle &=' provides that an emplo"er
would be authorized to terminate the
services of an emplo"ee found to be
suAering from an" disease if the
emplo"ee2s continued emplo"ment is
prohibited b" law or is pre-udicial to his
health or to the health of his fellow
emplo"ees
&'
0he installation of labor;saving
devices contemplates the installation of
machiner" to eAect econom" and
eDcienc" in its method of production
Re!un!ancy e,ists where the
services of an emplo"ee are in e,cess
of what would reasonabl" be demanded
b" the actual re.uirements of the
enterprise % position is redundant
when it is superRuous, and superRuit"
of a position or positions could be the
result of a number of factors, such as
the overhiring of workers, a decrease in
the volume of business or the dropping
of a particular line or service previousl"
manufactured or undertaken b" the
enterprise %n emplo"er has no legal
obligation to keep on the pa"roll
emplo"ees more than the number
needed for the operation of the
business
Retrenc5ment is an economic
ground to reduce the number of
emplo"ees !n order to be -ustifed, the
termination of emplo"ment b" reason
of retrenchment must be due to
business losses or reverses which are
serious, actual and real Retrenchment
is normall" resorted to b" management
during periods of business reverses and
economic diDculties occasioned b"
such events as recession, industrial
depression, or seasonal Ructuations !t
is an act of the emplo"er of reducing
the work force because of losses in the
operation of the enterprise, lack of
work, or considerable reduction on the
volume of business 0he institution of
+new methods or more eDcient
machiner", or of automation7 is
technicall" a ground for termination of
emplo"ment b" reason of installation of
labor;saving devices but where the
introduction of these methods is
resorted to not merel" to eAect greater
eDcienc" in the operations of the
business but principall" because of
serious business reverses and to avert
further losses, the device could then
veril" be considered one of
retrenchment
0he pa"ment of separation pa" would
be due when a dismissal is on account
of an authorized cause 0he amount of
separation pa" depends on the ground
for the termination of emplo"ment %
dismissal due to the installation of labor
saving devices, redundanc" )%rticle
&=4* or disease )%rticle &='*, entitles
the worker to a separation pa"
e.uivalent to +one )1* month pa" or at
least one )1* month pa" for ever" "ear
of service, whichever is higher7 /hen
the termination of emplo"ment is due
to retrenchment to prevent losses, or to
closure or cessation of operations of
establishment or undertaking not due
to serious business losses or fnancial
reverses, the separation pa" is onl" an
e.uivalent of +one )1* month pa" or at
least one;half )1F&* month pa" for ever"
"ear of service, whichever is higher7 !n
the above instances, a fraction of at
least si, )8* months is considered as
one )1* whole "ear
!n order to validl" eAect
retrenchment, the emplo"er must
observe two other re.uirements, viz?
)a* service of a prior written notice of at
least one month on the workers and the
Department of Labor and 6mplo"ment,
and )b* pa"ment of the due separation
pa"
Ha @uan Re"taurant v. NLRC
$eparation pa" shall be allowed as a
measure of social -ustice onl" in those
instances A5ere t5e employee i"
vali!ly !i"mi""e! for cau"e" ot5er
t5an "eriou" mi"con!uct or t5o"e
reIecting on 5i" moral c5aracter
/here the reason for the valid
dismissal is, for e,ample, habitual
into,ication or an oAense involving
moral turpitude, like theft or illicit
se,ual relations with a fellow worker,
the emplo"er ma" not be re.uired to
give the dismissed emplo"ee
separation pa", or fnancial assistance,
or whatever other name it is called, on
the ground of social -ustice
$eparation pa" therefore, depends on
the cause of dismissal, and ma" be
&5
accordingl" awarded provided that the
dismissal does not fall under either of
two circumstances? )1* there was
serious misconduct, or )&* the dismissal
reRected on the emplo"ee2s moral
character
Mi"con!uct is improper or wrongful
conduct !t is the transgression of some
established and defnite rule of action,
a forbidden act, a dereliction of dut",
willful in character, and implies
wrongful intent and not mere error of
-udgment 0o be a valid cause for
termination, the misconduct must be
serious
"ian -erminal", 'nc. v. NLRC
see supra
King of King" -ran"port, 'nc. v.
Mamac
:or termination of emplo"ment based
on -ust causes as defned in %rticle &=&
of the Code? )a* % written notice served
on the emplo"ee specif"ing the ground
or grounds for termination, and giving
said emplo"ee reasonable opportunit"
within which to e,plain his side )b* %
hearing or conference during which the
emplo"ee concerned, with the
assistance of counsel if he so desires is
given opportunit" to respond to the
charge, present his evidence, or rebut
the evidence presented against him )c*
% written notice of termination served
on the emplo"ee, indicating that upon
due consideration of all the
circumstances, grounds have been
established to -ustif" his termination
!n case of termination, the foregoing
notices shall be served on the
emplo"ee2s last known address
0he following should be considered in
terminating the services of emplo"ees?
)1* 0he frst written notice to be served
on the emplo"ees should contain the
specifc causes or grounds for
termination against them, and a
directive that the emplo"ees are given
the opportunit" to submit their written
e,planation within a reasonable period
;Rea"onable opportunity< under the
@mnibus Rules means ever" kind of
assistance that management must
accord to the emplo"ees to enable
them to prepare ade.uatel" for their
defense 0his should be construed as a
period of at least fve )5* calendar da"s
from receipt of the notice to give the
emplo"ees an opportunit" to stud" the
accusation against them, consult a
union oDcial or law"er, gather data and
evidence, and decide on the defenses
the" will raise against the complaint
Loreover, in order to enable the
emplo"ees to intelligentl" prepare their
e,planation and defenses, the notice
should contain a detailed narration of
the facts and circumstances that will
serve as basis for the charge against
the emplo"ees % general description of
the charge will not suDce Lastl", the
notice should specifcall" mention
which compan" rules, if an", are
violated andFor which among the
grounds under %rt &=& is being
charged against the emplo"ees
)&* %fter serving the frst notice, the
emplo"ers should schedule and
conduct a hearing or conference
wherein the emplo"ees will be given
the opportunit" to? )1* e,plain and
clarif" their defenses to the charge
against them3 )&* present evidence in
support of their defenses3 and )4* rebut
the evidence presented against them
b" the management During the
hearing or conference, the emplo"ees
are given the chance to defend
themselves personall", with the
assistance of a representative or
counsel of their choice Loreover, this
conference or hearing could be used b"
the parties as an opportunit" to come
to an amicable settlement
)4* %fter determining that termination
of emplo"ment is -ustifed, the
emplo"ers shall serve the emplo"ees a
written notice of termination indicating
that? )1* all circumstances involving the
charge against the emplo"ees have
been considered3 and )&* grounds have
&8
been established to -ustif" the
severance of their emplo"ment
rt. 9B3
#ilt"5ire File Co., 'nc. v. NLRC
Re!un!ancy e,ists where the
services of an emplo"ee are in e,cess
of what is reasonabl" demanded b" the
actual re.uirements of the enterprise
$uccinctl" put, a position is redundant
where it is superRuous, and superRuit"
of a position or positions ma" be the
outcome of a number of factors, such
as overhiring of workers, decreased
volume of business, or dropping of a
particular product line or service
activit" previousl" manufactured or
undertaken b" the enterprise 0he
emplo"er has no legal obligation to
keep in its pa"roll more emplo"ees than
are necessaril" for the operation of its
business
!t is of no legal moment that the
fnancial troubles of the compan" were
not of an emplo"ee2s making %n
emplo"ee cannot insist on the retention
of his position upon the ground that he
had not contributed to the fnancial
problems of the compan" where he
works 0he characterization of an
emplo"ee2s services as no longer
necessar" or sustainable, and therefore
properl" terminable, is an e,ercise of
business -udgment on the part of a
compan" 0he wisdom or soundness of
such characterization or decision was
not sub-ect to discretionar" review on
the part of the Labor %rbiter nor of the
NLRC so long, of course, as violation of
law or merel" arbitrar" and malicious
action is not shown
0he determination of the continuing
necessit" of a particular oDcer or
position in a business corporation is
management2s prerogative, and the
courts will not interfere with the
e,ercise of such so long as no abuse of
discretion or merel" arbitrar" or
malicious action on the part of
management is shown
0ermination of an emplo"ee2s
services because of retrenchment to
prevent further losses or redundanc", is
governed b" %rticle &=4 of the Labor
Code
0ermination of services under %rt
&=4 should be distinguished from
termination of emplo"ment b" reason
of some blameworth" act or omission
on the part of the emplo"ee, in which
case the applicable provision is %rticle
&=& of the Labor Code
$ections & and 5 of Rule G!I entitled
+0ermination of 6mplo"ment?7 of the
+Rules to !mplement the Labor Code7
read as follows?
$ec & Notice of dismissal KK %n"
emplo"er who seeks to dismiss a
worker shall furnish him a written
notice stating the particular acts or
omission constituting the grounds for
his dismissal !n cases of abandonment
of work, the notice shall be served at
the worker2s last known address
,,, ,,, ,,,
$ec 5 %nswer and hearing KK 0he
worker ma" answer the allegations
stated against him in the notice of
dismissal within a reasonable period
from receipt of such notice 0he
emplo"er shall aAord the worker ample
himself with the assistance of his
representative if he so desires
/here the ground for dismissal or
termination of services does not relate
to a blameworth" act or omission on
the part of the emplo"ee, there is no
need for an investigation and hearing
to be conducted b" the emplo"er who
does not allege an" malfeasance or
nonfeasance on the part of the
emplo"ee !n such case, there are no
allegations which the emplo"ee should
refute and defend himself from
0he emplo"ee ma" contest the
realit" or good faith character of the
retrenchment or redundanc" asserted
&>
as grounds for termination of services
0he appropriate forum for such
controversion would, however, be the
Department of Labor and 6mplo"ment
and not an investigation or hearing to
be held b" the emplo"er itself !t is
precisel" for this reason that an
emplo"er seeking to terminate services
of an emplo"ee or emplo"ees because
of +closure of establishment and
reduction of personnel7, is legall"
re.uired to give a written notice not
onl" to the emplo"ee but also to the
Department of Labor and 6mplo"ment
at least one month before eAectivit"
date of the termination
1olymart 1aper 'n!u"trie", 'nc. v.
NLRC
Retrenc5ment is a management
prerogative, a means to protect and
preserve the emplo"er2s viabilit" and
ensure his survival !t is one of the
economic grounds to dismiss an
emplo"ee resorted to b" an emplo"er
primaril" to avoid or minimize business
losses !n this regard, the emplo"er
bears the burden to prove his allegation
of economic or business reverses,
otherwise, it necessaril" means that the
dismissal of an emplo"ee was not
-ustifed
Retrenchment or +la";oA7 is the
termination of emplo"ment initiated b"
the emplo"er through no fault of the
emplo"ees and without pre-udice to the
latter, resorted to b" management
during periods of business recession,
industrial depression, or seasonal
Ructuations or during lulls occasioned
b" lack of orders, shortage of materials,
conversion of the plant for a new
production program or the introduction
of new methods or more eDcient
machiner", or of automation $impl"
put, it is an act of the emplo"er of
dismissing emplo"ees because of
losses in the operation of a business,
lack of work, and considerable
reduction on the volume of his
business
%rt &=4 of the Labor Code, as
amended, recognizes retrenchment as
a mode of terminating an emplo"ment
relationship #nder this provision, there
are three basic re.uisites for a valid
retrenchment 0hese are? )a* the
retrenchment is necessar" to prevent
losses and such losses are proven3 )b*
written notice to the emplo"ees and to
the D@L6 at least one month prior to
the intended date of retrenchment, and
)c* pa"ment of separation pa"
e.uivalent to one month pa" or at least
1F& month2s pa" for ever" "ear of
service, whichever is higher
0o -ustif" retrenchment, the +loss7
referred to in %rt &=4 cannot be -ust
an" kind or amount of loss 0he
following standard which a compan"
must meet to -ustif" retrenchment?
:irstl", the losses e,pected should be
substantial and not merel" de minimis
in e,tent !f the loss purportedl" sought
to be forestalled b" retrenchment is
clearl" shown to be insubstantial and
inconse.uential in character, the
bonafde nature of the retrenchment
would appear to be seriousl" in
.uestion $econdl", the substantial loss
apprehended must be reasonabl"
imminent, as such imminence can be
perceived ob-ectivel" and in good faith
b" the emplo"er <ecause of the
conse.uential nature of retrenchment,
it must, thirdl", be reasonabl"
necessar" and likel" to eAectivel"
prevent the e,pected losses 0he
emplo"er should have taken other
measures prior or parallel to
retrenchment to forestall losses, ie,
cut other costs other than labor costs
%n emplo"er who, for instance, la"s oA
substantial numbers of workers while
continuing to dispense fat e,ecutive
bonuses and per.uisites or so;called
+golden parachutes,7 can scarcel"
claim to be retrenching in good faith to
avoid losses
0he emplo"er bears the burden of
proving an allegation of the e,istence
or imminence of substantial losses,
which b" its nature is an aDrmative
defense !t is the dut" of the emplo"er
&=
to prove with clear and satisfactor"
evidence that legitimate business
reasons e,ist to -ustif" retrenchment
:ailure to do so inevitabl" results in a
fnding that the dismissal is un-ustifed
Nort5 +avao Mining Corp. v. NLRC
%rt &=4 governs the grant of
separation benefts +in case of closures
or cessation of operation7 of business
establishments +N@0 due to serious
business losses or fnancial
reverses 7 /here, however, the
closure was due to business losses the
Labor Code does not impose an"
obligation upon the emplo"er to pa"
separation benefts
%rt &=4 of the Labor Code does not
obligate an emplo"er to pa" separation
benefts when the closure is due to
losses
Nat6l Fe!eration of Labor v. NLRC
'""ue/ whether or not an emplo"er that
was compelled to cease its operation
because of the compulsor" ac.uisition
b" the government of its land for
purposes of agrarian reform, is liable to
pa" separation pa" to its aAected
emplo"ees
Hel!/ No 0he closure contemplated
under %rticle &=4 of the Labor Code is a
unilateral and voluntar" act on the part
of the emplo"er to close the business
establishment as ma" be gleaned from
the wording of the said legal provision
that +0he emplo"er ma" also terminate
the emplo"ment of an" emplo"ee due
to 7 0he use of the word +ma",7 in a
statute, denotes that it is director" in
nature and generall" permissive onl" !n
other words, %rticle &=4 of the Labor
Code does not contemplate a situation
where the closure of the business
establishment is forced upon the
emplo"er and ultimatel" for the beneft
of the emplo"ees
rt. 9BJ
Sy v. C
!n termination cases, the burden is
upon the emplo"er to show b"
substantial evidence that the
termination was for lawful cause and
validl" made %rticle &>>)b* of the
Labor Code puts the burden of proving
that the dismissal of an emplo"ee was
for a valid or authorized cause on the
emplo"er, without distinction whether
the emplo"er admits or does not admit
the dismissal :or an emplo"ee2s
dismissal to be valid, )a* the dismissal
must be for a valid cause and )b* the
emplo"ee must be aAorded due
process
%rticle &=' of the Labor Code
authorizes an emplo"er to terminate an
emplo"ee on the ground of disease
Cowever, in order to validl" terminate
emplo"ment on this ground, <ook I!,
Rule !, $ection = of the @mnibus
!mplementing Rules of the Labor Code
re.uires? $ec = Disease as a ground
for dismissal; /here the emplo"ee
suAers from a disease and his
continued emplo"ment is prohibited b"
law or pre-udicial to his health or to the
health of his co;emplo"ees, the
emplo"er shall not terminate his
emplo"ment unless there is a
certifcation b" competent public health
authorit" that the disease is of such
nature or at such a stage that it cannot
be cured within a period of si, )8*
months even with proper medical
treatment !f the disease or ailment can
be cured within the period, the
emplo"er shall not terminate the
emplo"ee but shall ask the emplo"ee to
take a leave 0he emplo"er shall
reinstate such emplo"ee to his former
position immediatel" upon the
restoration of his normal health
0he re.uirement for a medical
certifcate under %rticle &=' of the
Labor Code cannot be dispensed with
$ince the burden of proving the
validit" of the dismissal of the
emplo"ee rests on the emplo"er, the
latter should likewise bear the burden
of showing that the re.uisites for a
valid dismissal due to a disease have
&(
been complied with !n the absence of
the re.uired certifcation b" a
competent public health authorit", the
validit" of the emplo"ee2s dismissal
cannot be upheld
rt. 9BK
'ntertro! Maritime, 'nc. v. NLRC
Re"ignation is the voluntar" act of
an emplo"ee who +fnds himself in a
situation where he believes that
personal reasons cannot be sacrifced
in favor of the e,igenc" of the service,
then he has no other choice but to
disassociate himself from his
emplo"ment7 0he emplo"er has no
control over resignations and so, the
notifcation re.uirement was devised in
order to ensure that no disruption of
work would be involved b" reason of
the resignation
Resignations, once accepted and
being the sole act of the emplo"ee,
ma" not be withdrawn without the
consent of the emplo"er
@nce an emplo"ee resigns and his
resignation is accepted, he no longer
has an" right to the -ob !f the
emplo"ee later changes his mind, he
must ask for approval of the withdrawal
of his resignation from his emplo"er, as
if he were re;appl"ing for the -ob !t will
then be up to the emplo"er to
determine whether or not his service
would be continued !f the emplo"er
accepts said withdrawal, the emplo"ee
retains his -ob !f the emplo"er does not
the emplo"ee cannot claim illegal
dismissal for the emplo"er has the right
to determine who his emplo"ees will
be
Reye" v. C
%cceptance of a resignation tendered
b" an emplo"ee is necessar" to make
the resignation eAective
% re.uest for benefts granted to
retrenched emplo"ees during a time
when an emplo"er is in the process of
retrenching its emplo"ees is
tantamount to a recognition of the
e,istence of a valid cause for
retrenchment
lfaro v. C
Menerall", an emplo"ee who
voluntaril" resigns from emplo"ment is
not entitled to separation pa" %n
e,ception is when the emplo"er and
the emplo"ee agreed to a scheme
hereb" the former would receive
separation pa" despite having resigned
voluntaril"
Foluntary re"ignation is defned as
the act of an emplo"ee, who fnds
himself in a situation in which he
believes that personal reasons cannot
be sacrifced in favor of the e,igenc" of
the service3 thus, he has no other
choice but to disassociate himself from
his emplo"ment
rt. 9BH
Globe -elecom, 'nc. v. Floren!o)
Flore"
Con"tructive !i"mi""al e,ists
where there is cessation of work
because +continued emplo"ment is
rendered impossible, unreasonable or
unlikel", as an oAer involving a
demotion in rank and a diminution in
pa"7
0he unauthorized absence of an
emplo"ee should not lead to the drastic
conclusion that he has chosen to
abandon his work 0o constitute
abandonment, there must be? )a*
failure to report for work or absence
without valid or -ustifable reason3 and,
)b* a clear intention, as manifested b"
some overt act, to sever the emplo"er;
emplo"ee relationship % charge of
abandonment is totall" inconsistent
with the immediate fling of a complaint
for illegal dismissal3 more so, when it
includes a pra"er for reinstatement
!n constructive dismissal, the
emplo"er has the burden of proving
that the transfer and demotion of an
emplo"ee are for -ust and valid grounds
49
such as genuine business necessit"
0he emplo"er must be able to show
that the transfer is not unreasonable,
inconvenient, or pre-udicial to the
emplo"ee !t must not involve a
demotion in rank or a diminution of
salar" and other benefts !f the
emplo"er cannot overcome this burden
of proof, the emplo"ee2s demotion shall
be tantamount to unlawful constructive
dismissal
15il. 'n!u"trial Security gency
Corp. v. +apiton
Con"tructive !i"mi""al is defned
as a +.uitting because continued
emplo"ment is rendered impossible,
unreasonable or unlikel"3 as an oAer
involving a demotion in rank and
diminution in pa"7 @n the other hand,
abandonment of work means a clear,
deliberate and un-ustifed refusal of an
emplo"ee to resume his emplo"ment
and a clear intention to sever the
%bandonment is incompatible with
constructive dismissal
Lere absence or failure to report for
work is not tantamount to
abandonment of work 6ven the failure
to report for work after a notice to
return to work has been served does
not necessaril" constitute
abandonment nor does it bar
reinstatement
%n emplo"er has the prerogative to
transfer and reassign its emplo"ees to
meet the re.uirements of its business
2:
:or instance, where the rotation of
emplo"ees from the da" shift to the
night shift was a standard operating
procedure of management, an
emplo"ee who had been on the da"
shift for sometime ma" be transferred
to the night shift $imilarl", transfers
can be eAected pursuant to a company
policy to transfer emplo"ees from one
place of work to another place of work
owned b" the emplo"er to prevent
connivance among them Likewise, an
emplo"er has the right to transfer an
emplo"ee to another oDce in the
e,ercise of what it took to be sound
business -udgment and in accordance
with pre-determined and established
oce policy and practice !n securit"
services, the transfer connotes a
changing of guards or e,change of their
posts, or their reassignment to other
posts Cowever, all are considered
given their respective posts
0he prerogative of the management
to transfer its emplo"ees must be
e,ercised without grave abuse of
discretion 0he e,ercise of the
prerogative should not defeat an
emplo"ee2s right to securit" of tenure
!he employer"s pri#ilege to transfer its
employees to di$erent wor%stations
cannot be used as a subterfuge to rid
itself of an undesirable wor%er
15ilippine #irele"" , 'nc. v. NLRC
+i"mi""al is +an involuntar"
resignation resorted to when continued
emplo"ment is rendered impossible,
unreasonable or unlikel"3 when there is
a demotion in rank andFor a diminution
in pa"3 or when a clear discrimination,
insensibilit" or disdain b" an emplo"er
becomes unbearable to the emplo"ee7
Foluntary re"ignation is defned as
the act of an emplo"ee who +fnds
himself in a situation where he believes
that personal reasons cannot be
sacrifced in favor of the e,igenc" of
the service and he has no other choice
but to disassociate himself from his
emplo"ment7
0here is no demotion where there is
no reduction in position, rank or salar"
as a result of such transfer
Globe -elecom v. Cri"ologo
Re"ignation is the voluntar" act of
an emplo"ee who fnds herself in a
situation where she believes that
personal reasons cannot be sacrifced
in favor of the e,igenc" of the service
and that she has no other choice but to
disassociate herself from emplo"ment
41
rt. 9B:
Lope% v. Nat6l Steel Corp.
:or an emplo"ee to validl" claim
retirement benefts under %rt &=> of
the Labor Code, petitioner must have
complied with the re.uirements for
eligibilit" under the statute for such
retirement benefts
No retirement benefts are pa"able in
instances of resignations or termination
for a cause
rt. 94C
Callanta v. Carnation 15ilippine",
'nc.
0he dismissal without -ust cause of
an emplo"ee from his emplo"ment
constitutes a violation of the Labor
Code and its implementing rules and
regulations $uch violation, however,
does not amount to an +oAense7 as
understood under %rticle &(1 of the
Labor Code !n its broad sense, an
oAense is an illegal act which does not
amount to a crime as defned in the
penal law, but which b" statute carries
with it a penalt" similar to those
imposed b" law for the punishment of a
crime !t is in this sense that a general
penalt" clause is provided under %rticle
&=( of the Labor Code which provides
that + an" violation of the provisions
of this code declared to be unlawful or
penal in nature shall be punished with a
fne of not less than @ne 0housand
Besos NB1,99999O nor more than 0en
0housand Besos N19,99999O, or
imprisonment of not less than three N4O
months nor more than three N4O "ears,
or both such fne and imprisonment at
the discretion of the court7
#nlike in cases of commission of an"
of the prohibited activities during
strikes or lockouts under %rticle &85,
unfair labor practices under %rticle &'=,
&'( and &59 and illegal recruitment
activities under %rticle 4=, among
others, which the Code itself declares
to be unlawful, termination of an
emplo"ment without -ust or valid cause
is not categorized as an unlawful
practice
0he reliefs principall" sought b" an
emplo"ee who was illegall" dismissed
from his emplo"ment are reinstatement
to his former position without loss of
seniorit" rights and privileges, if an",
backwages and damages, in case there
is bad faith in his dismissal %s an
aDrmative relief, reinstatement ma" be
ordered, with or without backwages
/hile ordinaril", reinstatement is a
concomitant of backwages, the two are
not necessaril" complements, nor is the
award of one a condition precedent to
an award of the other %nd, in proper
cases, backwages ma" be awarded
without ordering reinstatement !n
either case, no penalt" of fne nor
imprisonment is imposed on the
emplo"er upon a fnding of illegalit" in
the dismissal <" the ver" nature of the
reliefs sought, therefore, an action for
illegal dismissal cannot be generall"
categorized as an +oAense7 as used
under %rticle &(1 of the Labor Code
<ackwwages sought b" an illegall"
dismissed emplo"ee ma" be
considered, b" reason of its practical
eAect, as a +mone" claim7 Cowever, it
is not the principal cause of action in an
illegal dismissal case but the unlawful
deprivation of the one2s emplo"ment
committed b" the emplo"er in violation
of the right of an emplo"ee <ackwages
is merel" one of the reliefs which an
illegall" dismissed emplo"ee pra"s the
labor arbiter and the NLRC to render in
his favor as a conse.uence of the
unlawful act committed b" the
emplo"er 0he award thereof is not
private compensation or damages but
is in furtherance and eAectuation of the
public ob-ectives of the Labor Code
prescriptive period for illegal
dismissal cases? /hen one is arbitraril"
and un-ustl" deprived of his -ob or
means of livelihood, the action
instituted to contest the legalit" of
one2s dismissal from emplo"ment
constitutes, in essence, an action
predicated +upon an in-ur" to the rights
of the plaintiA,7 as contemplated under
4&
%rt 11'8 of the New Civil Code, which
must be brought within four N'O "ears
rt. 942
-e7on Manufacturing v. Millena
prescriptive period for mone" claims?
Meneral rule? %ll mone" claims arising
from emplo"er;emplo"ee relations
accruing during the eAectivit" of this
Code shall be fled within three "ears
from the time the cause of action
accrued3 otherwise the" shall be
forever barred
Lu!o > Luym Corp. v. Saorni!o
6,ception? !f complainant;emplo"ee2s
cause of action has not "et accrued, as
when negotiations are still ongoing,
then the 4;"ear prescriptive period
does not set
MARIWASA SIAM CERAMICS, INC., vs. THE
SECRETARY OF THE DEPARTMENT OF
LABOR AND EMPLOYMENT, et al
G.R. No. 183317 December 21, 2009
FACTS:
On May 2005, private respondent Samahan
Ng Mga Manggagawa Sa Mariwasa Siam
Ceramics, Inc. (SMMSC-Independent) was
issued a Certifcate of Registration as a
legitimate labor organization by the
Department of Labor and Employment
(DOLE), Region IV-A.
On June 2005, petitioner Mariwasa Siam
Ceramics, Inc. fled a Petition for
Cancellation of Union Registration against
private respondent, claiming that the latter
violated Article 234 of the Labor Code for not
complying with the 20% requirement and
that it committed massive fraud and
misrepresentation in violation of Article 239
of the same code.
The Regional Director of DOLE IV-A issued
an Order granting the petition, revoking the
registration of respondent, and delisting it
from the roster of active labor unions.
SMMSC-Independent appealed to the Bureau
of Labor Relations. BLR ruled in favor of the
respondent, thus, they remain in the roster
of legitimate labor organizations.
The petitioner appealed and insisted that
private respondent failed to comply with the
20% union membership requirement for its
registration as a legitimate labor organization
because of the disafliation from the total
number of union members of 102 employees
who executed afdavits recanting their union
membership
Hence, this petition for review on certiorari
under Rule 45 of the Rules of Court.
ISSUES:
1) Whether or not there was failure to comply
with the 20% union membership
requirement
2) Whether or not the withdrawal of 31 union
members afected the petition for
certifcation election insofar as the 30%
requirement is concerned
44
RULING
The Supreme Court DENIED the petition.
On the frst issue, while it is true that the
withdrawal of support may be considered as
a resignation from the union, the fact
remains that at the time of the unions
application for registration, the afants were
members of respondent and they comprised
more than the required 20% membership for
purposes of registration as a labor union.
Article 234 of the Labor Code merely requires
a 20% minimum membership during the
application for union registration. It does not
mandate that a union must maintain the
20% minimum membership requirement all
throughout its existence.
On the second issue, it appears
undisputedly that the 31 union members
had withdrawn their support to the petition
before the fling of said petition. The
distinction must be that withdrawals made
before the fling of the petition are presumed
voluntary unless there is convincing proof to
the contrary, whereas withdrawals made
after the fling of the petition are deemed
involuntary. Therefore, following
jurisprudence, the employees were not totally
free from the employers pressure and so the
voluntariness of the employees execution of
the afdavits becomes suspect.
The cancellation of a unions registration
doubtless has an impairing dimension on the
right of labor to self-organization. For fraud
and misrepresentation to be grounds for
cancellation of union registration under the
Labor Code, the nature of the fraud and
misrepresentation must be grave and
compelling enough to vitiate the consent of a
majority of union members.
4'

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