Labor Cases DIGEST

06/26/2015

2. RANCE v. NLRC
Facts:
A CBA was wntered into on April 30, 1981 by and between
respondents Polybag Manufacturing Corpo and Polybag Workers
Union one of which is a stipulation that the former may dismiss any
employeeif they would join other organization aside from the
existing one.
Petitioners were among the 125 members of the respondent union
who were expelled by the latter for disloyalty in that they allegedly
joined the NAFLUa large federation. Because of the expulsion,
petitioners were dismissed by Respondent Corporation.
Petitioners contend that the requisites of due process were not
complied with in that, there was no impartial tribunal or union body
vested with authority to conduct the disciplinary proceeding under
the union constitution and by-laws, and, that complainants were not
furnished notice of the charge against them, nor timely notices of
the hearings on the same
Petitioners sued for reinstatement and backwages stating their
dismissal was without due process. Losing both in the decisions of
the NL Arbiter and NLRC, they elevated their cause to the SC
Issue:
w/o the dismissal was due to a just cause.
Held:
The court held that the dismissal was made in bad faith There was
indeed connivance between the corporation and the Union. The
facts show that even if the workers sought help from the union,
they were disregarded by the leaders, who were not dismissed.
Their plights were no heeded by the corporation. Therefore, the
main recourse is to seek help from NAFLU, but such act did not
authorize the federation (NAFLU) to represent them. Nor is it an act
of disloyalty based on the CBA.
The members did not even sign documents to prove the allegations.
In fact it is a mere act of preserving what they have; their jobs. The
state recognizes the right of the workers to security of tenure and
they may not be terminated without just cause, which in this case
was absent.

It is the policy of the state to assure the right of workers to

"security of tenure" (Article XIII, Sec. 3 of the New Constitution,
Section 9, Article II of the 1973 Constitution). The guarantee is an
act of social justice. When a person has no property, his job may
possibly be his only possession or means of livelihood. Therefore,
he should be protected against any arbitrary deprivation of his job.
Article 280 of the Labor Code has construed security of tenure
as meaning that "the employer shall not terminate the services of
an employee except for a just cause or when authorized by" the
code.
In the case at bar, the scandalous haste with which respondent
corporation dismissed 125 employees lends credence to the claim
that there was connivance between respondent corporation and
respondent Union. It is evident that private respondents were in
bad faith in dismissing petitioners. They, the private respondents,
are guilty of unfair labor practice.
RULING:
PREMISES CONSIDERED, (1) the decision of respondent National Labor
Relations Commission in NLRC-NCR-11-6881-82 dated April 26, 1984 is
REVERSED and SET ASIDE; and (2) respondent corporation is ordered: (1)
to reinstate petitioners to their former positions without reduction in rank,
seniority and salary; (b) to pay petitioners three-year backwages, without
any reduction or qualification, jointly and solidarily with respondent Union;
and (c) to pay petitioners exemplary damages of P500.00 each. Where
reinstatement is no longer feasible, respondent corporation and respondent
union are solidarily ordered to pay, considering their length of service their
corresponding separation pay and other benefits to which they are entitled
under the law.
3. Bondoc vs. PEOPLE'S BANK AND TRUST COMPANY, BANK OF THE
PHILIPPINES ISLANDS
Facts:
Domingo F. Bondoc (Petitioner), ), joined the People's Bank and
Trust Company on October 1, 1966.
Bondoc was chosen by the bank's board of directors on February
21, 1967 as the first manager of the bank's department of
economic research and statistics which was organized in January,
1967
That department had only four employees
On May 15, 1973, Bondoc reported in writing to Manuel Chuidian, a
bank director, certain anomalies committed by the officers of the
bank. The Central Bank found that some officers of the bank utilized
its found for their own interests

the board of directors of the People's Bank, the board of directors of

the People's Bank
Bondoc was advised of the abolition of his department in the later
part of September, 1973
On November 2, 1973, the People's Bank, pursuant to section 11 of
Presidential Decree No. 21 (creating the ad hoc National Labor
Relations Commission), applied with the Secretary of Labor for
clearance to terminate Bondoc's services effective on November 5
o He filed in the NLRC his opposition to the termination his
services. He alleged in his opposition that he was dismissed
without cause
o As all efforts for the amicable settlement of the case were
fruitless, it was submitted for compulsory arbitration.
o Bondoc tried to prove that the abolition of his position was a
reprisal for his aforementioned exposure of some anomalies
in the bank
the (1)NLRC ARBITRATOR recommended to the Secretary of
Labor the denial of the application to terminate Bondoc's
employment and ordered the People's Bank to reinstate him with
backwages from November 16, 1973 and with allowances and other
benefits guaranteed by law and without loss of status and seniority
rights
On appeal, the (2)NLRC in its decision of January 21, 1975
reversed the decision of the arbitrartor, approved the clearance for
Bondoc's dismissal and ordered the People's Bank to pay him
seventy five percent (75%) of his monthly salary for every year of
service in lieu of one-half month salary for every year of service
fixed in the Termination Pay Law, Republic Act No. 1052, as
amended by Republic Act no. 1787
o reason to justify the abolition of Bondoc's position (1) the fact
that his position as manager being confidential in character,
the bank had the rperogative to terminate his employment
anytimel
o (2) Bondoc's department was nolonger necessary to the
efficient operation of the bank in view of the merger;
o (3) the management is not precluded from undertakings a
reorganization or making changes to meet the demands of
the present and
o (4) in case of mergers, departments or position may be
abolished or new ones created, as the necessity for them
requires

Bondoc appealed to the (3) Secretary of Labor, reversed the

NLRC's decision on the grounds that the motivation for the
termination of Bondoc's services was not taken into account by the
NLRC and that the People's Bank should not have abolished
Bondoc's department without prior clearance.
o ordered the People's Bank to reinstate Bondoc to his former
position or any substantially equivalent position with
backwages equivalent to his salary for six months, it being
undrstood that the Bank of the P.I. has assumred all the
liabilities and obligations of the People's Bank
o denied the application for clearance to dismiss Bondoc
Respondent appealed to the President of the Philippines, on the
grounds relied upon in that appeal was that Bondoc was convicted
of bigamy, a crime involving moral turpitude
o The Bank of P.I. cited Central Bank Circular No. 356, which
disqualifies a person convicted of a crime involving moral
turpitude from becoming an officer of a bank
o In a decision dated May 17, 1976, Presidential Executive
Assistant Jacobo C. Clave set aside the decisions of the
arbitrator and the Secretary and confirmed in toto the NLRC's
decision
President held that under the Termination Pay Law an
employment without a definite period may be
terminated with or without a cause, that the abolition of
Bondoc's position was a necessary incident of the
merger of the two banks and that his services were no
longer indispensable to them. hence, the clearance for
his removal was authorized for his removal was
authorized
Petitioner filed a petition to (5) review the decision of the
President,

Issue:
1. w/o the termination of Bondocs employment was with just cause
2. The petitioner invokes the policy of the State to assure the right of
"workers" to security of tenure
Held:
1.

Under the peculiar or particular facts of this case the termination of

bondoc's employment was lawful and justified and that no grave
abuse of discretion was lawful and justified and that no grave abuse
of discretion amounting to lack of jurisdiction was committed by the
Presidential Executive Assistant in affirming the NLRC's decision
sustaining their termination of his employment.
Bondoc was not employed for a fixed period. He held his position of
department manager at the pleasure of the bank's board of
directors. He occupied a managerial position and his stay in therein
depended on his retention of the trust and confidence of the
management and whether there was any need for his services.
Although some vindictive motivation might have impelled the
aboliton of his position, yet, it is undeniable that the bank's board
of directors possessed the power to remove him and to determine
whether the interest of the bank justified the existence of his
department.
Under the old Termination Pay Law, it was held that in the absence
of a contract of employment for a specific period the employer has
the right to dismiss his employees at anytime with or without just
cause
It may be noted that under Policy Instructions No. 8 of the
Secretary of Labor "the employer is not required to obtain a
previous written clearnace to terminate managerial employees in
order to enable him to manage effectively".
2.
That guarantee is an act of social justice. When a person has no
property, his job may possibly be his only possession or means of
livelihood. Therefore, he should be protected against any arbitrary
and unjust deprivation of his job.
Article 280 of the Labor Code has construed security of tenure as
referring to regular employment and as meaning that "the employer
shall not terminate the services of an employee except for a just
cause or when authorized by" the Code.
As already noted above, the facts of this case do not warrant the
conclusion that Bondoc's right to security of tenure was
oppressively abridged. He knew all along that his tenure as a
department manager rested in the discretion of the bank's board of
directors and that at anytime his services might be dispensed with
or his position might be abolished
Ruling:

WHEREFORE, the decision of respondent Presidential Executive Assistant is

affirmed with the modification that the Bank of the P.I. should pay to the
petitioner separation pay equivalent to his salary and allowances (if any) for
seven months.

4. PHILIPPINE MOVIE PICTURES WORKERS' ASSOCIATION,

vs. PREMIERE PRODUCTIONS, INC.
Facts:
In October 1951, Premiere Productions, Inc. (PPI) filed a petition
with the Court of Industrial relations (CIR) seeking authority to layoff 44 workers on the ground of financial losses.
o on the ground that it was losing in the operation of its
business.
The union therein (Philippine Movie Pictures Workers Association)
opposed the petition as it averred that PPI is merely retaliating
against employees who joined a previous strike.
Judge Arsenio Roldan of the CIR then conducted an ocular
inspection. The inspection was attended by counsels for both
parties. The judge inspected some records and interrogated some
witnesses. The counsels for both parties were granted opportunities
to cross examine in said ocular inspection.
Thereafter, Judge Roldan granted PPI the authority to lay-off the 44
workers.
After shutting the studios, the company filed another petition with
the CIR for permission or authority to lease its equipments, studios,
and other facilities to Eddie Infante, Braulio Calma and others.
o The association objected to the proposed lease on the ground
that it was an attempt by the company to make use of its
properties through other persons which would mean
disturbance of the status quo while the dispute between the
association and the company was pending.
Then the company filed a motion to withdraw its petition saying
that it was convinced that the lease of its properties was a mere
exercise of its proprietary rights, and that court permission was
unnecessary.
o The motion was granted.
The company filed 3 petitions with the CIR for permission or
authority to lease its equipments, studios, and other facilities

o The association filed 3 urgent petitions with the CIR,

incidental case No. 98 V-8, for contempt and for injunction on
the ground that the company had no right to remove its
equipment from its studios to be leased
After the company had answered the three petitions for contempt
and injunction, by agreement of the parties, these three incidental
cases were heard jointly. During the hearing held before Presiding
Judge Roldan and in the presence of one Martin Dolorico, a
Commissioner of the CIR, the parties entered into a stipulation of
facts and stated therein their respective contention, after which,
both parties submitted the cases for decision without further
evidence. This was on October 7, 1952.
In the meantime, on April 18, 1953, the association filed a
"Supplemental petition to annul lease contracts and for contempt of
court and for injunction"
The association filed a "Motion for production of document" under
section 1, Rule 21, of the Rules of Court
o Thereafter, Commissioner Martin Dolorico filed his report,
which report was approved and completely adopted by Judge
Roldan
wherein he found that the leases of the equipment,
studios and other properties of the movie company to
third parties were not simulated but genuine
As to the supplemental petition to annul he lease contracts and for
contempt of court and for injunction filed on April 18, 1953 and the
motion filed on June 14th
o Judge Roldan held that they would be heard separately from
the incidental cases, for purposes of expediency. The decision
ended by denying the three petitions for injunction and for
contempt of court.
Upon motion for reconsideration by the association and over the
opposition of the company
o the CIR in banc by resolution dated November 13, 1953,
reconsidered the decision aforementioned and set it aside, as
premature, saying that before rendering a final decision, the
court should have awaited further presentation of evidence on
the supplemental petition of April 18, 1953, "so that all
ingredients for the proper disposal of the case would have
been complete."
ISSUE:
Whether or not an ocular inspection may be the basis, without
receiving full evidence, of determining the cause or motive of laying off
employees.

HELD: No. An ocular inspection does not satisfy the procedural

requirement. The petition for lay-off was predicated on the lack of work and
of the further fact that the company was incurring financial losses these
allegations cannot be proven simply by an ocular inspection. The parties,
especially the workers in this case, should not be deprived of their
opportunity to present evidence they may deem necessary to establish their
case in the main trial. Here, the main trial is absent because all that was
conducted was an ocular inspection such is tantamount to a deprivation of
their right to be heard. It is recognized that ones employment, profession,
or trade, or calling, is a property right and the wrongful interference
therewith is an actionable wrong. Therefore, the dismissal of the 44 workers
without opportunity to be heard is a violation of their property right.
The association has now filed these petitions for review by
certiorari, not only of the decision of Judge Roldan but also of the
resolution of the majority of the CIR, to set the same aside, and for
the rendition of another decision holding the leases entered into by
the movie company to be illegal and that the company and its
officers and agents be held to have committed contempt of court in
entering into those leases without authority of the CIR.
The majority of the Tribunal believe that it is unnecessary to go into
the merits of the present cases, because the resolution of the
majority of the CIR setting aside the decision of Judge Roldan, left
the cases without any decision to appeal from, and that said
resolution is in the nature of a mere interlocutory order, which is
not subject to appeal.

RULING:
In view of the foregoing, these petitions for certiorari are hereby
denied, and the cases are ordered remanded to the CIR for further
proceedings. No costs.
5. Masing & Sons Development Corporation (MSDC) v Rogelio
GR No. 161787
April 27, 2011
FACTS:

Rogelio is an employee of the Ibajay branch of MSDC, with Lim as

Branch Manager. In 1991, he availed himself of the SSS retirement benefits,
and in order to facilitate the grant of such benefits, he entered into an
internal arrangement with Chan and MSDC to the effect that MSDC would
issue a certification of his separation from employment notwithstanding that
he would continue working as a laborer in the Ibajay branch but it was only
on 1997 that Rogelio was paid his last salary but without retirement
benefits, he was 67 years old at that time.
Rogelio then filed the case for payment of his retirement benefits
before the Labor Arbiter. MSDC defense is that they were not engaged in
copra buying in Ibajay and they did not ever register in such business in any
government agency and that Lim is an independent copra buyer.
LA: dismissed. no employer-employee relationship between Rogelio &
MSDC. NLRC: dismissed. no double retirement in the private sector. CA:
granted. Rogelio is an employee of Chan and MSDC, benefits under RA 7641
is apart from the retirement benefits that a qualified employee could claim
under the Social Security Law.
Hence, Masing appealed to the Supreme Court.
ISSUE: WON Rogelio had remained the Company's employee from
July 6, 1989 up to March 17, 1997; WON Rogelio is entitled to retirement
benefits.
HELD: YES, Rogelio is entitled to retirement benefits.
Even if there is a Certification of Separation from Employment dated
August 10, 1991, "... in light of the incontrovertible physical reality that
petitioner and his co-workers did go to work day in and day out for such a
long period of time, doing the same thing, and in the same place, without
apparent discontinuity, except on paper, these documents cannot be taken at
their face value."
In case of doubt, the doubt is resolved in favor of labor, in favor of the
safety and decent living for the laborer as mandated by Article 1702 of the
Civil Code. The reality of the petitioner's toil speaks louder than words.
RATIO:
(1) In any controversy between a laborer and his master, doubts
reasonably arising from the evidence are resolved in favor of the laborer.

(2) The beneficent provisions of Article 287 of the Labor Code, is apart
from the retirement benefits that can be claimed by a qualified employee
under the social security law.
(3) The benefits was enacted as a labor protection measure and as a
curative statute to respond, in part at least, to the financial well-being of
workers during their twilight years soon following their life of labor, can be
extended not only from the date of its enactment but retroactively to the
time the employment contracts started."
APPLICABLE LAWS:
"ART. 287. Retirement. Any employee may be retired upon reaching
the retirement age established in the collective bargaining agreement or
other applicable employment contract.
"In case of retirement, the employee shall be entitled to receive such
retirement benefits as he may have earned under existing laws and any
collective bargaining agreement and other agreements:
Provided, however, That an employee's retirement benefits under any
collective bargaining and other agreements shall not be less than those
provided herein.
"In the absence of a retirement plan or agreement providing for
retirement benefits of employees in the establishment, an employee upon
reaching the age of sixty (60) years or more, but not beyond sixty-five (65)
years which is hereby declared the compulsory retirement age, who has
served at least five (5) years in the said establishment, may retire and shall
be entitled to retirement pay equivalent to at least one-half (1/2) month
salary for every year of service, a fraction of at least six (6) months being
considered as one whole year."
"Unless the parties provide for broader inclusions, the term 'one-half
(1/2) month salary' shall mean fifteen (15) days plus one-twelfth (1/12) of
the 13th month pay and the cash equivalent of not more than five (5) days
of service incentive leaves. "Retail, service and agricultural establishments or
operations employing not more than ten (10) employees or workers are
exempted from the coverage of this provision.
"Violation of this provision is hereby declared unlawful and subject to
the penal provisions provided under Article 288 of this Code."
6. Asian Transmission Corporation v. CA Holiday Pay

Facts:
On March 11 1993, DOLE issued an Explanatory Bulletin stating that
employees are entitled 200% of their basic wage on April 9 1993,
whether unworked, since that day, apart from being a Good Friday,
(legal holiday) is also Araw nag Kagitingan (a legal holiday also.
Despite the explanatory bulletin, Asian Transmission Corp. opted to
pay on April 9, 1998. Thus, Bisig ng Asian Transmission Labor Union
(BATLU protested.
In accordance with Step 6 of the grievance procedure of the
Collective Bargaining Agreement (CBA) existing between petitioner
and BATLU
the controversy was submitted for voluntary arbitration
Office of the Voluntary Arbitarator:
o Directed the Asian Transmission Corp. to pay its covered
employees 200% of their regular daily waged for unworked
April 19, 1998 which covers regular holiday.
CA
o Upheld the findings of the Voluntary Arbitrator, holding that
the Collective Bargaining Agreement (CBA) between petitioner
and BATLU, the law governing the relations between them,
clearly recognizes their intent to consider Araw ng Kagitingan
and Maundy Thursday, on whatever date they may fall in any
calendar year, as paid legal holidays during the effectivity of
the CBA and that "[t]here is no condition, qualification or
exception for any variance from the clear intent that all
holidays shall be compensated."
o "in the absence of an explicit provision in law which provides
for [a] reduction of holiday pay if two holidays happen to fall
on the same day, any doubt in the interpretation and
implementation of the Labor Code provisions on holiday pay
must be resolved in favor of labor."
ISSUE:
W/o employees are entitled to 200% of their daily basic wage when 2
legal holidays fall on the same day.
HELD: YES
Article 94 of the Labor Code, as amended, affords a worker the
enjoyment of ten paid regular holidays (inclusive of
o 1. New Years Day January 1

o 2. Maundy Thursday Movable Date

o 3. Good Friday Movable Date

o 4. Araw ng Kagitingan April 9 (Bataan and Corregidor Day)
o 5. Labor Day May 1
o 6. Independence Day June 12
o 7. National Heroes Day Last Sunday of August
o 8. Bonifacio Day November 30
o 9. Christmas Day December 25
o 10. Rizal Day December 30
Holiday pay is a statutory benefit demandable uner the law.
Since a worker is entitled to the enjoyment of ten (10) paid
regular holidays, the fact that two holidays fall on the same
date should not operate to reduce to nice the ten holiday pay
benefits a worker is entitled to receive.
Holiday pay is a legislated benefit enacted as part of the
Constitutional imperative that the State shall afford protection to
labor.7 Its purpose is not merely "to prevent diminution of the
monthly income of the workers on account of work interruptions. In
other words, although the worker is forced to take a rest, he earns
what he should earn, that is, his holiday pay."8 It is also intended
to enable the worker to participate in the national celebrations held
during the days identified as with great historical and cultural
significance
Unlike a bonus, which is a management prerogative,12 holiday pay
is a statutory benefit demandable under the law.
It is elementary, under the rules of statutory construction, that
when the language of the law is clear and unequivocal, the law
must be taken to mean exactly what it says.
In the case at bar, there is nothing in the law which provides
or indicates that the entitlement to ten days of holiday pay
shall be reduced to nine when two holidays fall on the same
day.

In any event, Art. 4 of the Labor Code provides that all doubts in
the implementation and interpretation of its provisions, including its
implementing rules and regulations, shall be resolved in favor of
labor. For the working mans welfare should be the primordial and
paramount consideration.16
Moreover, Sec. 11, Rule IV, Book III of the Omnibus Rules to
Implement the Labor Code provides that "Nothing in the law or the
rules shall justify an employer in withdrawing or reducing any
benefits, supplements or payments for unworked regular holidays
as provided in existing individual or collective agreement or
employer practice or policy
From the pertinent provisions of the CBA entered into by the
parties, petitioner had obligated itself to pay for the legal holidays
as required by law.
Only an employee who works on the day immediately preceding or
after a regular holiday shall be entitled to the holiday pay.
RULING:
The petition for review on certiorari of the decision of the CA is devoid
of merit.
WHEREFORE, the petition is hereby DISMISSED
7. IBAA E U vs Inciong
Facts:

On June 20, 1975, the Union filed a complaint against the bank for
the payment of holiday pay before the then Department of Labor,
National Labor Relations Commission, Regional Office IV in Manila.
Conciliation having failed, and upon the request of both parties, the
case was certified for arbitration on 7 July 1975.
o The records disclosed that employees of respondent bank
were not paid their wages on unworked regular holidays as
mandated by the Code, particularly Article 208
Art. 208.Right to holiday pay.

(a)
Every worker shall be paid his regular daily
wage during regular holidays, except in retail and
service establishments regularly employing less than 10
workers.

(b)
The term "holiday" as used in this chapter,
shall include: New Year's Day, Maundy Thursday, Good
Friday, the ninth of April the first of May, the twelfth of
June, the fourth of July, the thirtieth of November, the
twenty-fifth and the thirtieth of December and the day
designated by law for holding a general election.

On 25 August 1975, (1) Labor Arbiter Ricarte T. Soriano

rendered a decision in the above-entitled case, granting petitioners
complaint for payment of holiday pay.
Respondent bank did not appeal from the said decision. Instead, it
complied with the order of the Labor Arbiter by paying their holiday
pay up to and including January 1976.
On 16 December 1975, Presidential Decree 850 was promulgated
amending, among others, the provisions of the Labor Code on the
right to holiday pay. Accordingly, on 16 February 1976, by authority
of Article 5 of the same Code, the Department of Labor (now
Ministry of Labor) promulgated the rules and regulations for the
implementation of holidays with pay.
The controversial section thereof reads as
o Status of employees paid by the month. Employees who
are uniformly paid by the month, irrespective of the number
of working days therein, with a salary of not less than the
statutory or established minimum wage shall be presumed to
be paid for all days in the month whether worked or not.
On 23 April 1976, Policy Instruction 9 was issued by the then
Secretary of Labor (now Minister) interpreting the above-quoted
rule. The bank, by reason of the ruling laid down by the rule
implementing Article 94 of the Labor Code and by Policy Instruction
9, stopped the payment of holiday pay to an its employees.

On 30 August 1976, the Union filed a motion for a writ of execution

to enforce the arbiters decision of 25 August 1975, which the bank
opposed.
On 18 October 1976, the Labor Arbiter, instead of issuing a writ of
execution, issued an order enjoining the bank to continue paying its
employees their regular holiday pay.
On 17 November 1976, the bank appealed from the order of
the Labor Arbiter to the NLRC.
On 20 June 1978, the NLRC promulgated its resolution en banc
dismissing the banks appeal, and ordering the issuance of the
proper writ of execution.

On 21 February 1979, the bank filed with the Office of the

Minister of Labor a motion for reconsideration/appeal with
urgent prayer to stay execution.
On 13 August 1979,s the NLRC issued an order directing the Chief
of Research and Information of the Commission to compute the
holiday pay of the IBAA employees from April 1976 to the present
in accordance with the Labor Arbiter dated 25 August 1975.
On 10 November 1979, the Office of the Minister of Labor,
through Deputy Minister Amado G. Inciong, issued an order setting
aside the resolution en banc of the NLRC dated 20 June 1978, and
dismissing the case for lack of merit.
Hence, the petition for certiorari charging Inciong with abuse of
discretion amounting to lack or excess of jurisdiction.

Issue:
Whether the Ministry of Labor is correct in determining that monthly
paid employees are excluded from the benefits of holiday pay.
Held:

From Article 92 of the Labor Code, as amended by Presidential

Decree 850, and Article 82 of the same Code, it is clear that
monthly paid employees are not excluded from the benefits of
holiday pay.
However, the implementing rules on holiday pay promulgated by
the then Secretary of Labor excludes monthly paid employees from
the said benefits by inserting, under Rule IV, Book Ill of the
implementing rules, Section 2, which provides that:
o employees who are uniformly paid by the month, irrespective
of the number of working days therein, with a salary of not
less than the statutory or established minimum wage shall be
presumed to be paid for all days in the month whether
worked or not.
Even if contemporaneous construction placed upon a statute by
executive officers whose duty is to enforce it is given great weight
by the courts, still if such construction is so erroneous, the same
must be declared as null and void.
So long, as the regulations relate solely to carrying into effect the
provisions of the law, they are valid.
Where an administrative order betrays inconsistency or repugnancy
to the provisions of the Act, the mandate of the Act must prevail
and must be followed.

A rule is binding on the Courts so long as the procedure fixed for its
promulgation is followed and its scope is within the statutory
authority granted by the legislature, even if the courts are not in
agreement with the policy stated therein or its innate wisdom.
Further, administrative interpretation of the law is at best merely
advisory, for it is the courts that finally determine what the law
means.
In the case at bar, the provisions of the Labor Code on the
entitlement to the benefits of holiday pay are clear and explicit - it
provides for both the coverage of and exclusion from the benefits.
In Policy Instruction No. 9, the then Secretary of Labor went as far
as to categorically state that the benefit is principally intended for
daily paid employees, when the law clearly states that every worker
shall be paid their regular holiday pay.
This is a flagrant violation of the mandatory directive of Article 4 of
the Labor Code, which states that "All doubts in the implementation
and interpretation of the provisions of this Code, including its
implementing rules and regulations, shall be resolved in favor of
labor.

RULING:

The Supreme Court granted the petition, set aside the order of the
Deputy Minister of Labor, and reinstated the 25 August 1975
decision of the Labor Arbiter Ricarte T. Soriano.

8. Land and Housing Development Corporation vs Esquillo

Facts:
[Respondent] Marianito C. Esquillo was hired as a structural
engineer by [Petitioner] ABV Rock Group (ABV) based in Jeddah,
Kingdom of Saudi Arabia. He commenced employment on July 27,
1989, with an initial monthly salary of US$1,000.00 that was
gradually increased, on account of his good performance and the
annual renewal of his employment contract, until it reached
US$1,300.00.
Private respondent Land & Housing Development Corporation
(LHDC), a local placement agency, facilitated [respondents]
employment papers.

[respondents] employment contract was supposed to be valid until

July 26, 1995, it was pre-terminated, through an Inter-Office Memo
on Notice of Termination, dated November 17, 1994, allegedly, for
the reason, reduction of force.

Petitioner however, claims that the reason adduced was negated by

the fact that a lot of transferees from other sites were taken in and
promotions as well as re-classifications in the lower ranks were
done as shown by the list of fifteen (15) transferees from Riyadh
effective November 5, 1994, as well as letters of promotion and reclassification.
He further claimed that [Petitioner] ABV maliciously confiscated his
iqama or resident visa despite the fact that it was [respondents]
previous employer, FEAL IBC., which secured his iqama.
Consequently, [respondent] was prevented from getting another job
in Jeddah.
Respondent subsequently received the amount of twenty-three
thousand, one hundred fifty-three Saudi Riyals (SR23,153.00) from
[Petitioner] ABV, as final settlement of his claims and was issued an
exit visa that required him to immediately go back to the
Philippines.
[respondent] filed a complaint for breach of contract and/or illegal
dismissal, before the Philippine Overseas Employment
Administration which was referred to the National Labor Relations
Commission, Sub-Regional Arbitration Branch No. IV, San Pablo City
[petitioners] maintained that [respondents] dismissal was for valid
cause, that is, reduction of force. Due to the Gulf War, the projects
of [Petitioner] ABV were reduced and it was forced to terminate the
contracts of workers whose job were not so immediate and urgent
and retain only those workers whose skills were needed just to
maintain the projects. [Respondent] was informed, one month in
advance, of the pre-termination of his contract, and he was paid his
salary, overtime pay, bonus and other benefits in the total amount
of US$6,716.00 or Saudi Riyals SR25,192.00. With respect to the
alleged confiscation of [respondents] iqama, [petitioners] alleged
that the law requires its surrender to the Saudi authorities upon the
termination of the employees contract of employment.
the Hon. Labor Arbiter Andres Zavalla issued his Decision, dated
February 27, 1997, decreeing, as follows:
o WHEREFORE, premises considered, judgment is hereby
rendered ordering [petitioners] jointly and severally to pay
[respondent] his salaries corresponding to the unexpired
portion of his contract from December 19, 1994 up to July 26,
1995 in the total amount of NINE THOUSAND FOUR HUNDRED
FORTY SEVEN U.S. Dollars (US$9,447.00) and ten percent
(10%) of his monetary award as attorneys fees both in
Philippine currency to be computed at the prevailing rate at
the time of payment.

When [petitioners] filed their joint appeal, reversed the aforecited

decision and dismissed the [respondents] complaint for lack of
merit.
[Respondents] motion for reconsideration was denied in a
Resolution, dated July 10, 1997
The Court of Appeals ruled that despite the absence of a written
categorical objection to the sufficiency of the payment received as
consideration for the execution of the quitclaim,
o jurisprudence supported the right of respondent to demand
what was rightfully his under our labor laws. Hence, he should
have been allowed to recover the difference between the
amount he had actually received and the amount he should
have received
The CA also found that the NLRC had erroneously applied RA 8042
to the case. The appellate court held that respondent was entitled
to the salaries corresponding to the unexpired portion of his
Contract, in addition to what he had already received.
Hence, this Petition

ISSUE:
Whether respondent, despite having executed a quitclaim, is entitled
to a grant of his additional monetary claims.

HELD: YES
The Petition has no merit.
Indeed, an employee cannot be dismissed except for cause, as
provided by law, and only after due notice and hearing. Employees
who are dismissed without cause have the right to be reinstated
without loss of seniority rights and other privileges; and to be paid
full back wages, inclusive of allowances and other benefits, plus
proven damages.

With regard to contract workers, in cases arising before the

effectivity of RA 8042 (the Migrant Workers and Overseas Filipinos
Act11), it is settled that if "the contract is for a fixed term and the
employee is dismissed without just cause, he is entitled to the
payment of his salaries corresponding to the unexpired portion of
his contract."12 In the present case, the Contract of respondent
was until July 26, 1995. Since his dismissal from service effective
December 18, 1994, was not for a just cause, he is entitled to be
paid his salary corresponding to the unexpired portion of his
Contract, in the total amount of US$9,447.

We now go to the Release and Quitclaim signed by respondent

o Petitioners claim that the foregoing Release and Quitclaim has
forever released them from "any and all claims, demands,
dues, actions, or causes of action" arising from respondents
employment with them. They also contend that the validity of
the document can no longer be questioned.
Unfortunately for petitioners, jurisprudence does not
support their stance. The fact that employees have
signed a release and/or quitclaim does not necessarily
result in the waiver of their claims. The law strictly
scrutinizes agreements in which workers agree to
receive less compensation than what they are legally
entitled to. That document does not always bar them
from demanding benefits to which they are legally
entitled.
While rights may be waived, the same must not be
contrary to law, public order, public policy, morals or
good customs or prejudicial to a third person with a
right recognized by law.
Article 6 of the Civil Code renders a quitclaim
agreement void ab initio where the quitclaim obligates
the workers concerned to forego their benefits while at
the same time exempting the employer from any
liability that it may choose to reject. This runs counter
to Art. 22 of the Civil Code which provides that no one
shall be unjustly enriched at the expense of another."
"Not all waivers and quitclaims are invalid as
against public policy. If the agreement was
voluntarily entered into and represents a
reasonable settlement, it is binding on the parties
and may not later be disowned simply because of
a change of mind. It is only where there is clear
proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms of
settlement are unconscionable on its face, that
the law will step in to annul the questionable
transaction. But where it is shown that the person
making the waiver did so voluntarily, with full
understanding of what he was doing, and the
consideration for the quitclaim is credible and
reasonable, the transaction must be recognized as
a valid and binding undertaking."

Hence, quitclaims in which employees voluntarily accept a

reasonable amount or consideration as settlement are deemed
valid. These agreements cannot be set aside merely because the
parties have subsequently changed their minds
To determine whether the Release and Quitclaim is valid, one
important factor that must be taken into account is the
consideration accepted by respondent; the amount must constitute
a "reasonable settlement." The NLRC considered the amount of
US$6,716 or SR23,153 reasonable, when compared with (1)
$3,900, the three-month salary that he would have been entitled to
recover if RA 8042 were applied; and (2) US$9,447, his salaries for
the unexpired portion of his Contract.
It is relevant to point out, however, that respondent was dismissed
prior to the effectivity of RA 8042.
As discussed at the outset, he is entitled to his salaries
corresponding to the unexpired portion of his Contract. This amount
is exclusive of the SR23,153 that he received based on the
November 29, 1994 Final Settlement. The latter amount was
comprised of overtime pay, vacation pay, indemnity, contract
reward and notice pay -- items that were due him under his
employment Contract. For these reasons, the consideration
stated in the Release and Quitclaim cannot be deemed a
reasonable settlement; hence, that agreement must be set
aside.
"This Court has allowed supervisory employees to seek payment of
benefits and a manager to sue for illegal dismissal even though, for
a consideration, they executed deeds of quitclaims releasing their
employers from liability."19
To stress, "in case of doubt, laws should be interpreted to favor the
working class -- whether in the government or in the private sector
-- in order to give flesh and vigor to the pro-poor and pro-labor
provisions of our Constitution."
RULING:
WHEREFORE, the Petition is DENIED and the assailed Decision and
Resolution AFFIRMED
9. PNCC vs NLRC
Facts:

Private respondents Raul C. Abrico, Rodrigo Vasallo, Eduardo A.

Sibbaluca, and Benigno M. Manasis were deployed by herein
petitioner for overseas employment to Iraq as security guards
pursuant to individual appointment contracts dated April 15, 1985.

In

These were submitted to the POEA and were validated by the latter
on April 22, 1985. The contracts provided for a US$350.00/month
salary.
However, on May 12, 1985, a second overseas contract was
executed by the PNCC which was accepted by private respondents.
It modified the April 15, 1985 contract by providing for a monthly
salary of US$260.00 for the same position. The contract was for a
two-year period. When the period lapsed, private respondents were
repatriated and were extended local employment.
However, all of them filed their voluntary resignation effective
August 31, 1987 so that they could avail of more benefits under the
Retirement Program offered by the PNCC.
On August 17, 1987, private respondents filed a complaint before
the POEA for, among others,
o (a) non-payment of promotional pay increase for Raul C.
Abrico and Rodrigo J. Vasallo;
o (b) underpayment of salaries, overtime pay, bonuses, night
differential pay, sick leave, and vacation leave benefits;
o (c) assigning Friday overtime guarding duties to non-guards.
disposing of the complaint, the POEA ruled as follows:

The issues to be resolved in these are:

1.
Whether or not herein complainants are entitled to salary and
overtime pay differentials. YES
2.
Whether or not herein complainants are entitled to vacation
leave and sick leave differentials, bonus differential and night shift
differential. YES
3.
Whether or not complainants Raul Abrico and Rodrigo J. Vasallo
are entitled to promotional pay differential. NO

From the decision of the POEA, the PNCC appealed to the NLRC. It
alleged that the POEA erred in applying Article 34(i) of the Labor
Code; and in holding that the notice of employment, dated April 15,
1985, providing for a monthly salary of US$350.00 was the actual
overseas employment contract instead of the one dated May 12,
1985 which provided for a salary of US$260.00/month.
NLRC affirmed the decision of the POEA

The PNCC now finds fault in that decision by saying that the April
15, 1985 document was but a mere notice/offer of employment.
Petitioner alleges further that it was never signed and accepted by
private respondents.
o Consequently, it never became a binding contract between
the parties concerned. Petitioner further stated that the real
contract of employment was the one executed on May 12,
1985 which provided for a monthly salary of US$260.00 and
which was accepted by private respondents
Hence this petition

ISSUE:
Whether or not the monthly salary of herein complainants is
US$350.00 a month or US$260.00.
HELD:
As correctly invoked by complainants paragraph (1) of Article 34 of
the Labor Code prohibits the substitution or alteration of
employment contracts approved and verified by the Department of
Labor from the time (of) the actual signing thereof by the parties
up to and including the period of expiration of the same without the
approval of the Department of Labor.
While the allegations of the PNCC may cast doubt on the real nature
of the April 12, 1985 document, our Civil Code 7 states:
In case of doubt, all labor legislation and all labor contracts shall be
construed in favor of the safety and decent living for the laborers.
The mandate of the law for a liberal interpretation of labor contracts
in favor of the working man was applied in the case of Ditan vs.
POEA Administrator 8 where We made the following
pronouncement:
A strict interpretation of the cold facts before us might support the
position taken by the respondents. However, we are dealing here
not with an ordinary transaction but with a labor contract which
deserves special treatment and a liberal interpretation in favor of
the worker . . . the Constitution mandates the protection of labor
and the sympathetic concern of the State for the working class
conformably to the social justice
Under the policy of social justice, the law bends over backward to
accommodate the interests of the working class on the humane
justification that those with less privileges in life should have more
privileges in
RULING:

WHEREFORE, in view of the foregoing, the questioned Resolution of

the NLRC is hereby AFFIRMED. Consequently, this petition is DISMISSED.
With costs.