1

1. Pantranco North Express vs NLRC (1996) 259 SCRA 161

Facts:
Private respondent was hired by petitioner in 1964 as a bus conductor. He
eventually joined the Pantranco Employees Association-PTGWO. He continued in
petitioners employ until August 12, 1989, when he was retired at the age of fiftytwo (52) after having rendered twenty five years' service. The basis of his
retirement was the compulsory retirement provision of the collective bargaining
agreement between the petitioner and the forenamed union. On February 1990,
private respondent filed a complaint for illegal dismissal against petitioner with
NLRC. The complaint was consolidated with two other cases of illegal dismissal
having similar facts and issues, filed by other employees, non-union members.
Issue:
WON the CBA stipulation on compulsory retirement after twenty-five years of
service is legal and enforceable.
The CBA stipulation is legal and enforceable. The bone of contention in this case is
the provision on compulsory retirement after 25years of service. Article XI, Section 1
(e) (5) of the May 2, 1989 Collective Bargaining Agreement 8between petitioner
company and the union states:
Section 1. The COMPANY shall formulate a retirement plan with the following main
features:(e) The COMPANY agrees to grant the retirement benefits herein provided
to regular employees who may be separated from the COMPANY for any of the
following reasons: (5) Upon reaching the age of sixty (60) years or upon completing
twenty-five (25) years of service to the COMPANY, whichever comes first, and the
employee shall be compulsory retired and paid the retirement benefits herein
provided."
The said Code provides: 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
or other agreement." The Court agrees with petitioner and the Solicitor General. Art.
287 of the Labor Code as worded permits employers and employees to fix the
applicable retirement age at below60 years. Moreover, providing for early
retirement does not constitute diminution of benefits. In almost all countries today,
early retirement, i.e., before age 60, is considered a reward for services rendered
since it enables an employee to reap the fruits of his labor particularly retirement
benefits, whether lump-sum or otherwise at an earlier age, when said employee, in
presumably better physical and mental condition, can enjoy them better and longer.
As a matter of fact, one of the advantages of early retirement is that the
corresponding retirement benefits, usually consisting of a substantial cash windfall,
can early on be put to productive and profitable uses by way of income-generating
investments, thereby affording a more significant measure of financial security and
independence for the retiree who, up till then, had to contend with life's vicissitudes
within the parameters of his fortnightly or weekly wages. Thus we are now seeing
many CBAs with such early retirement provisions. And the same cannot be

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considered a diminution of employment benefits. Being a product of negotiation, the
CBA between the petitioner and the union intended the provision on compulsory
retirement to be beneficial to the employees-union members, including herein
private respondent. When private respondent ratified the CBA with the union, he not
only agreed to the CBA but also agreed to conform to and abide by its provisions.
Thus, it cannot be said that he was illegally dismissed when the CBA provision on
compulsory retirement was applied to his case. Incidentally, we call attention to
Republic Act No. 7641, known as "The Retirement Pay Law", which went into effect
on January 7, 1993. Although passed many years after the compulsory retirement of
herein private respondent, nevertheless, the said statute sheds light on the present
discussion when it amended Art. 287 of the Labor Code, to make it read as follows:
Retirement
. Any employee may be retired upon reaching the retirement age establish in the
collective bargaining agreement or other applicable employment contract. 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 . . ." The afore quoted provision makes clear the intention
and spirit of the law to give employers and employees a free hand to determine and
agree upon the terms and conditions of retirement. Providing in a CBA for
compulsory retirement of employees after twenty-five (25) years of service is legal
and enforceable so long as the parties agree to be governed by such CBA. The law
presumes that employees know what they want and what is good for them absent
any showing that fraud or intimidation was employed to secure their consent
thereto.

2. PHILIPPINE AIRLINES, INC. vs. AIRLINE PILOTS ASSOCIATION OF THE

PHILIPPINES
G.R. No. 143686. January 15, 2002
Facts:
Petitioner PAL unilaterally retired airline pilot Captain Albino Collantes under Section
2, Article VII, of the 1967 PAL-ALPAP Retirement Plan. Contending that the
retirement of Captain Collantes constituted illegal dismissal and union busting,
ALPAP filed a Notice of Strike with the Department of Labor and Employment
(DOLE). Pursuant to Article 263 (g) of the Labor Code, the Secretary of the DOLE
assumed jurisdiction over the labor dispute. On June 13, 1998, the Secretary issued
the assailed order upholding PALs action of unilaterally retiring CaptainCollantes
and recognizing the same as a valid exercise of its option under Section 2, Article
VII,of the 1967 PAL-ALPAP Retirement Plan. The Secretary further ordered that the
basis of the computation of Captain Collantes retirement benefits should be Article
287 of the Labor Code(as amended by Republic Act No. 7641) and not Section 2,
Article VII, of the PAL-ALPAP Retirement Plan. The Secretary added that in the
exercise of its option to retire pilots, PAL should first consult the pilot concerned
before implementing his retirement.
Issue:

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#1 Whether or not the Article 287 of the Labor Code should be the basis of the
computation of Capt. Collantes retirement benefits.
#2 Whether or not the Secretary can compel the company to consult the pilot
concerned before retirement is implemented.
Held:
#1 The SC held that it is the PAL-ALPAP Retirement Plan that should be the basis of
the computation of retirement benefits. The pertinent provision of the 1967 PALALPAP Retirement Plan states: SECTION 1. Normal Retirement. (a) Any member who
completed twenty (20) years of service as a pilot for PAL or has flown 20,000 hours
for PAL shall be eligible for normal retirement. The normal retirement date is the
date on which he completes twenty (20) years of service, or on which he logs his
20,000 hours as a pilot for PAL. The member who retires on his normal retirement
shall be entitled to either (a) a lump sum payment of P100,000.00 or (b) to such
termination pay benefits to which he may be entitled to under existing laws,
whichever is the greater amount. SECTION 2. Late Retirement. Any member who
remains in the service of the Company after his normal retirement date may retire
either at his option or at the option of the Company and when so retired he shall be
entitled either (a) to a lump sum payment of P5,000.00 for each completed year of
service rendered as a pilot, or (b) to such termination pay benefits to which he may
be entitled under existing laws, whichever is the greater amount. A pilot who retires
after twenty years of service or after flying 20,000 hours would still be in the prime
of his life and at the peak of his career, compared to one who retires at the age of
60years old. Based on this peculiar circumstance that PAL pilots are in, the parties
provided for a special scheme of retirement different from that contemplated in the
Labor Code. Conversely, the provisions of Article 287 of the Labor Code could not
have contemplated the situation of PALs pilots. Rather, it was intended for those
who have no more plans of employment after retirement, and are thus in need of
financial assistance and reward for the years that they have rendered service. In
any event, petitioner contends that its pilots who retire below the retirement age of
60 years not only receive the benefits under the 1967 PAL-ALPAP Retirement Plan
but also an equity of the retirement fund under the PAL Pilots Retirement Benefit
Plan, entered into between petitioner and respondent on May 30, 1972.The PAL
Pilots Retirement Benefit Plan is a retirement fund raised from contributions
exclusively from petitioner of amounts equivalent to 20% of each pilots gross
monthly pay. Upon retirement, each pilot stands to receive the full amount of the
contribution. In sum, therefore, the pilot gets an amount equivalent to 240% of his
gross monthly income for every year of service he rendered to petitioner. This is in
addition to the amount of not less than P100,000.00 that he shall receive under the
1967 Retirement Plan. On the other hand, Article 287 of the Labor Code only
mandates the employers, in the absence of a retirement plan to pay 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. In short, the
retirement benefits that a pilot would get under the provisions of the above-quoted
Article 287 of the Labor Code are less than those that he would get under the
applicable retirement plans of petitioner.
#2 The SC held that such additional requirement would constitute as amendment to
the PAL-ALPAP Retirement Plan. The option of an employer to retire its employees is
recognized as valid. Retirement of an employee may be done upon initiative and
option of the management. And where there are cases of voluntary retirement, the
same is effective only upon the approval of management. There should be no unfair
labor practice committed by management if the retirement of private respondents

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were made in accord with the agreed option. Surely, the requirement to consult the
pilots prior to their retirement defeats the exercise by management of its option to
retire the said employees. It gives the pilot concerned an undue prerogative to
assail the decision of management. Due process only requires that notice be given
to the pilot of petitioners decision to retire him. Hence, the Secretary of Labor
overstepped the boundaries of reason and fairness when he imposed on petitioner
the additional requirement of consulting each pilot prior to retiring him. Petition is
granted.

3. CAINTA CATHOLIC SCHOOL vs CAINTA CATHOLIC SCHOOL EMPLOYEES

UNION
G.R. No. 151021

May 4, 2006

Facts:
On 15 October 1993, petitioner school retired Llagas and Javier, President and Vicepresident of respondent union, respectively, who had rendered more than twenty
(20) years of continuous service, pursuant to Section 2, Article X of the CBA, to wit:
An employee may be retired, either upon application by the employee himself or by
the decision of the Director of the School, upon reaching the age of sixty (60) or
after having rendered at least twenty (20) years of service to the School the last
three (3) years of which must be continuous.
Because of the foregoing, the union filed a Notice of Strike with the NCMB and later
staged a strike and picketed in the schools entrance. Later, the union filed a
complaint for unfair labor practice against petitioner school before the NLRC.
The School avers that the retirement of Llagas and Javier was clearly in accordance
with a specific right granted under the CBA. The School justifies its actions by
invoking our rulings in Pantranco North Express, Inc. v. NLRC and Bulletin Publishing
Corporation v. Sanchez that no unfair labor practice is committed by management if
the retirement was made in accord with management prerogative or in case of
voluntary retirement, upon approval of management.
The Union, on the other hand, argues that the retirement of the two union officers is
a mere subterfuge to bust the union.
Issue:
Whether or not the retirement of Llagas and Javier is legal.
Held:
The SC held that the termination of employment of Llagas and Javier was valid,
arising as it did from a management prerogative granted by the mutuallynegotiated CBA between the School and the Union.
Pursuant to the existing CBA, the School has the option to retire an employee upon
reaching the age limit of sixty (60) or after having rendered at least twenty (20)
years of service to the School, the last three (3) years of which must be continuous.
Retirement is different specie of termination of employment from dismissal for just
or authorized causes under Articles 282 and 283 of the Labor Code. While in all
three cases, the employee to be terminated may be unwilling to part from service,
there are eminently higher standards to be met by the employer validly exercising

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the prerogative to dismiss for just or authorized causes. In those two instances, it is
indispensable that the employer establish the existence of just or authorized causes
for dismissal as spelled out in the Labor Code. Retirement, on the other hand, is the
result of a bilateral act of the parties, a voluntary agreement between the employer
and the employee whereby the latter after reaching a certain age agrees and/or
consents to sever his employment with the former.
Article 287 of the Labor Code, as amended, governs retirement of employees,
stating:
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
employees retirement benefits under any collective bargaining agreement 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.

By their acceptance of the CBA, the Union and its members are obliged to abide by
the commitments and limitations they had agreed to cede to management. The
questioned retirement provisions cannot be deemed as an imposition foisted on the
Union, which very well had the right to have refused to agree to allowing
management to retire employees with at least 20 years of service.

It should not be taken to mean that retirement provisions agreed upon in the CBA
are absolutely beyond the ambit of judicial review and nullification. A CBA, as a
labor contract, is not merely contractual in nature but impressed with public
interest. If the retirement provisions in the CBA run contrary to law, public morals,
or public policy, such provisions may very well be voided. Certainly, a CBA provision
or employment contract that would allow management to subvert security of tenure
and allow it to unilaterally retire employees after one month of service cannot be
upheld. Neither will the Court sustain a retirement clause that entitles the retiring
employee to benefits less than what is guaranteed under Article 287 of the Labor
Code, pursuant to the provisions express proviso thereto in the provision.

Yet the CBA in the case at bar contains no such infirmities which must be stricken
down. Twenty years is a more than ideal length of service an employee can render
to one employer. Under ordinary contemplation, a CBA provision entitling an
employee to retire after 20 years of service and accordingly collect retirement
benefits is reward for services rendered since it enables an employee to reap the
fruits of his labor particularly retirement benefits, whether lump-sum or otherwise

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at an earlier age, when said employee, in presumably better physical and mental
condition, can enjoy them better and longer.

A CBA may validly accord management the prerogative to optionally retire an

employee under the terms and conditions mutually agreed upon by management
and the bargaining union, even if such agreement allows for retirement at an age
lower than the optional retirement age or the compulsory retirement age.
4. Jaculbe vs Siliman University (2007) G.R. 156934
Facts:
Sometime in 1958, petitioner began working for respondents university medical
center as a nurse. In a letter in December 1992, respondent, through its Human
Resources Development Office, informed petitioner that she was approaching her
35th year of service with the university and was due for automatic retirement on
November 18, 1993, at which time she would be 57 years old. This was pursuant to
respondents retirement plan for its employees which provided that its members
could be automatically retired upon reaching the age of 65 or after 35 years of
uninterrupted service to the university. Respondent required certain documents in
connection with petitioners impending retirement.
A brief exchange of letters between petitioner and respondent followed. Petitioner
emphatically insisted that the compulsory retirement under the plan was
tantamount to a dismissal and pleaded with respondent to be allowed to work until
the age of 60because this was the minimum age at which she could qualify for SSS
pension. But respondent stood pat on its decision to retire her, citing company
policy.
On November 15, 1993, petitioner filed a complaint in the National Labor Relations
Commission (NLRC) for termination of service with preliminary injunction and/or
restraining order.
Issue:
WON the respondents retirement plan imposing automatic retirement after 35years
of service contravenes the security of tenure clause in the 1987 Constitution and
the Labor Code.
Held:
Retirement plans allowing employers to retire employees who are less than the
compulsory retirement age of 65 are not per se repugnant to the constitutional
guaranty of security of tenure.
Article 287 of the Labor Code provides: Retirement - Any employee may be retired
upon reaching the retirement age established in the collective bargaining
agreement or other applicable employment contract. By its express language, the
Labor Code permits employers and employees to fix the applicable retirement age
at below 60 years.
The rules and regulations of the plan show that participation therein was not
voluntary at all. Rule III of the plan, on membership, stated:
SECTION 1 MEMBERSHIP, All full-time Filipino employees of the University
will automatically become members of the Plan, provided, however, that

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those who have retired from the University, even if rehired, are no longer
eligible for membership in the Plan. A member who continues to serve the
University cannot withdraw from the Plan.
SECTION 2 EFFECTIVITY OF MEMBERSHIP, Membership in the Plan starts on
the day a person is hired on a full-time basis by the University.
SECTION 3 TERMINATION OF MEMBERSHIP, Termination of membership in
the Plan shall be upon the death of the member, resignation or termination of
employees contract by the University, or retirement from the University.
Meanwhile, Rule IV, on contributions, stated:
The Plan is contributory. The University shall set aside an amount equivalent
to 3% of the basic salaries of the faculty and staff. To this shall be added a
5% deduction from the basic salaries of the faculty and staff.
A member on leave with the University approval shall continue paying, based on his
pay while on leave, his leave without pay should pay his contributions to the Plan.
However, a member, who has been on leave without pay should pay his
contributions based on his salary plus the Universitys contributions while on leave
or the full amount within one month immediately after the date of his
reinstatement. Provided[,] further that if a member has no sufficient source of
income while on leave may pay within six months after his reinstatement.
It was through no voluntary act of her own that petitioner became a member of the
plan. In fact, the only way she could have ceased to be a member thereof was if she
stopped working for respondent altogether. Furthermore, in the rule on
contributions, the repeated use of the word shall ineluctably pointed to the
conclusion that employees had no choice but to contribute to the plan (even when
they were on leave).
Retirement is the result of a bilateral act of the parties, a voluntary agreement
between the employer and the employee whereby the latter, after reaching a
certain age agrees to sever his or her employment with the former. The truth was
that petitioner had no choice but to participate in the plan, given that the only way
she could refrain from doing so was to resign or lose her job. It is axiomatic that
employer and employee do not stand on equal footing, a situation which often
causes an employee to act out of need instead of any genuine acquiescence to the
employer. This was clearly just such an instance.
An employer is free to impose a retirement age less than 65 for as long as it has the
employees consent. Stated conversely, employees are free to accept the
employers offer to lower the retirement age if they feel they can get a better deal
with the retirement plan presented by the employer. Thus, having terminated
petitioner solely on the basis of a provision of a retirement plan which was not freely
assented to by her, respondent was guilty of illegal dismissal.

5. Globe Telecom vs. Crisologo

[G.R. No. 174644, August 10, 2007]
Facts:
Jenette Marie B. Crisologo, a lawyer, was Globes manager of its corporate legal
services department. Her tasks included negotiating, drafting and reviewing the

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companys supply contracts. During her pregnancy, she was rushed to the hospital
due to profuse bleeding, which was as a possible miscarriage.
When she reported back to work, she tendered her resignation letter explaining that
she was advised by her doctor to rest for the duration of her pregnancy. Gonzales,
her immediate supervisor, informed her of an e-mail circulating within the company
that she solicited money from a company supplier. She requested a copy and an
opportunity to confront the person(s) responsible but Gonzales declined as there
was no longer any reason to pursue the matter.
Later on, Crisologo wrote Gonzales with a request to issue a certification clearing
her name. Then she wrote another letter to Globe where she insinuated that they
forced her to resign and reiterated her demand that Globe clear her name.
Petitioner Gonzales informed Crisologo that she had to settle her obligations to
Globe first before it could issue the requested clearance.
Issue:
Whether she was illegally dismissed or she voluntarily resigned
Held:
Respondent personally drafted her resignation letter in a clear, concise and
categorical language. Its content, as quoted above, confirmed her unequivocal
intent to resign.
An employee of respondents accomplished educational background and
professional standing will not easily relinquish her legal rights unless she intends to.
Respondents resignation letter without doubt proved petitioners assertion that she
voluntarily resigned from her job.
Moreover, the resignation letter was submitted by respondent and was accepted by
Globe on April 12, 2002. This fact alone completely negated her claim that
petitioners coerced her to resign on April 30, 2002. Indeed, how could she have
been forced to resign on that date when she had already tendered her resignation
more than two weeks earlier?
Resignation is the voluntary act of an employee who finds herself in a situation
where she believes that personal reasons cannot be sacrificed in favor of the
exigency of the service and that she has no other choice but to disassociate herself
from employment.
Coercion exists when there is a reasonable or well-grounded fear of an imminent
evil upon a person or his property or upon the person or property of his spouse,
descendants or ascendants. No such situation existed in this case.
As a matter of fact, respondents resignation letter and May 2, 2002 letter both
contained expressions of gratitude. In St. Michael Academy v. NLRC, we held that
expressions of gratitude cannot possibly come from an employee who is just forced
to resign as they belie allegations of coercion.
6. BMG RECORDS (PHILS.), INC. AND JOSE YAP, JR., PETITIONERS,VS. AIDA
C..
APARECIO
AND
NATIONAL
LABOR
RELATIONS
COMMISSION,RESPONDENTS.
Facts:

9
Aida Aparecio worked for BMG records as one of the promo girls in its Cebu Branch.
Later on Aparecio filed a complaint against BMG and its Branch Manager, Jose Yap,
Jr., co-petitioner herein, for illegal dismissal and non-payment of overtime pay,
holiday pay, premium pay for rest day, 13 th month pay, service incentive leave, and
separation pay. The labor arbiter dismissed Aparecio's complaint. Since the letter of
resignation showed no signs that it was made through duress or compulsion, it was
concluded that the severance of her employment in BMG was brought about by her
resignation and not by the illegal dismissal supposedly committed by the latter.
Upon appeal, however, the NLRC found that Aparecio was illegally dismissed from
service. A motion for reconsideration of the Decision was filed by petitioners. he
NLRC, however, resolved todeny the motion. On appeal, the CA affirmed in toto the
judgment of the NLRC.Petitioners' motion for reconsideration was subsequently
denied.
Issue:
Whether or not respondent Aparecio was illegally dismissed by BMG.
Held:
No, the severance of her employment was brought about by her submission of
resignation letter to herein petitioner.
Also, resignation is the voluntary act of an employee who is in a situation where one
believes that personal reasons cannot be sacrificed in favor of the exigency of the
service, and one has no other choice but to dissociate oneself from employment. It
is a formal pronouncement or relinquishment of an office, with the intention of
relinquishing the office accompanied by the act of relinquishment. As the intent to
relinquish must concur with the overt act of relinquishment, the acts of the
employee before and after the alleged resignation must be considered in
determining whether in fact, he or she intended to sever from his or her
employment.
7.BLUE ANGEL MANPOWER AND SECURITY SERVICES, INC. vs CA
G.R. No. 161196 July 28, 2008
Facts:
Blue Angel, a messengerial and security agency, hired private respondents Romel
Castillo, Wilson Ciriaco, Gary Garces, and Chesterfield Mercader as security guards
and detailed them at the National College of Business and Arts (NCBA) in Cubao,
Quezon City.
Castillo and Mercader, later joined by Ciriaco and Garces, filed a complaint for illegal
deductions and other money claims against Blue Angel. Eventually, they amended
their complaint to include illegal dismissal. According to the four guards, they were
required, while still with Blue Angel, to work from 7:00 a.m. to 7:00 p.m. without
overtime and premium holiday pay, among other benefits. They also alleged
receiving only PhP 5,000 a month or PhP 166 per day and, from this amount, Blue
Angel deducted PhP 100 as cash bond. They further averred that Blue Angel, when
apprised of their original complaint, illegally terminated Garces and Ciriaco,
respectively, and Castillo and Mercader. The four guards prayed for (1) payment of
backwages, wage differentials, premium and overtime pay for holidays, and 13th
month pay; (2) reimbursement of their cash bond; (3) reinstatement or separation
pay; and (4) damages.

10
Issue:
Whether or not private respondents were illegally dismissed
Ruling:
We rule that the resignations were involuntary and the termination of private
respondents was illegal.

Blue Angel insists that the guards had pleaded to be allowed to resign when they
were told of the pending investigation, and that they eventually tendered their proforma resignation letters followed by their own handwritten resignation letters. Our
review of the circumstances surrounding these resignation letters does not support
Blue Angel's contentions that these letters are indications that private respondents
had voluntarily resigned. We agree with the labor arbiter when he pointed out that
the undated, similarly worded resignation letters tended to show that the guards
were made to copy the pro-forma letters, in their own hand, to make them appear
more convincing that the guards had voluntarily resigned. As the labor arbiter
noted, the element of voluntariness of the resignations is even more suspect
considering that the second set of resignation letters were pre-drafted, similarly
worded, and with blank spaces filled in with the effectivity dates of the resignations.
[5] In their Comment, private respondents claimed being forced to sign and copy
the pro-forma resignation letters and quitclaims on pain that they would not get
their remaining compensations.
With the finding that private respondents were illegally dismissed, they are entitled
to reinstatement to their positions without loss of their seniority rights and with full
backwages, inclusive of allowances, and to other benefits or their monetary
equivalent computed from the time private respondents' compensation was
withheld from them up to the time of their actual reinstatement as provided for in
Article 279 of the Labor Code.
8. Guerzon Jr. Et al., vs Pasig Industries Inc., et al.,
Facts:
Petitioners were employees of respondent Pasig Industries, Inc. (PII) stationed in its
Makati office. Guerzon was PII's export/import manager for 21 years; Cruz was the
company's chief accountant for 20 years and Bauyon was a member of PII's
accounting staff since 1989.

In 1995, respondent Yoshikitsu Fujita informed petitioners that PII's parent company
had decided to close the Makati office. To streamline operations, functions
performed by the Makati office would be transferred to its facilities in the Bataan
Export Processing Zone. For this reason, petitioners were given the option to resign,
in which case they would be entitled to a special separation package (SSP)
equivalent to one-month basic salary for each year of service.
Petitioners decided to resign but requested a recomputation of their respective
separation pay based on the monthly gross pay (i.e., basic pay plus all allowances).
Despite voluntarily availing of the SSP, petitioners filed a complaint for illegal
dismissal and payment of separation pay, retirement benefits, leave pay and 13th

11
month pay against PII, its president Masahiro Fukada and Fujita in the National
Labor Relations Commission (NLRC).
Because petitioners filed the complaint two days after they were "terminated," the
labor arbiter found respondents guilty of illegal dismissal. Accordingly, he awarded
backwages, separation pay and attorneys' fees to petitioners.
Respondents appealed.
The NLRC found that petitioners voluntarily accepted the terms of the SSP offered
by PII. It noted that they negotiated to improve PII's offered SSP. Thus, the NLRC
reversed the decision of the labor arbiter.
Aggrieved, petitioners filed a petition for certiorari in the Court of Appeals (CA)
asserting that the NLRC committed grave abuse of discretion in reversing the
decision of the labor arbiter.

Hence, petitioners availed of this recourse contending that the CA erred in affirming
the decision of the NLRC. Respondents allegedly failed to prove that PII had been
incurring losses to justify its reorganization. They claimed they were dismissed
without just or authorized cause.
Issue:
Whether or not the petitioners were illegally dismissed.
Is the streamlining an authorized cause for the termination of the petitoners?
Ruling:
The petitioners were NOT illegally dismissed. As they voluntarily resigned from PII.
Petitioners held responsible positions in PII. Employees of their educational
backgrounds and professional standing do not easily relinquish their legal rights
unless they intend to. In fact, petitioners even bargained to improve the terms of
the SSP and, after successfully doing so, voluntarily resigned from PII.
Consequently, whether the streamlining of PII's operations constituted an
authorized cause for petitioners' termination became immaterial in view of their
voluntary resignation.
9. LAVIO S. SUAREZ, JR., et. al. vs. NATIONAL STEEL CORPORATION
G.R. No. 150180 (October 17, 2008)
Facts:
National Steel Corporation was engaged in the business of manufacturing steel
products needed for pipe making, ship building, can-making and production of
appliances. Sometime in 1994, respondent suffered substantial financial losses due
to an increase in the volume of steel products manufactured by foreign countries.
With this development, respondent adopted an organizational streamlining program
that resulted in the retrenchment of seven hundred (700) employees in its main
plant in Iligan City, among whom were herein petitioners.
One month prior to its effectivity, respondent sent out individual notices to the
seven hundred (700) employees affected by the retrenchment, including

12
petitioners. The notices specifically stated that their services were terminated
effective on said date and they will each receive a separation package in
accordance with the retrenchment program. The separation package consisted of
the following: (1) separation pay equivalent to two (2) months salary for every year
of service; (2) leave balance credits; (3) 13th month pay; and (4) uniform plus rice
subsidy differential.
After having been paid their separation benefits, the
employees, including herein petitioners, each executed and signed a release and
quitclaim, written in English and containing a translation in the Visayan dialect in
the same document.
Nothing was heard from the retrenched employees, until about two and half years
after their separation from the company, when herein petitioners wrote respondent
demanding payment of retirement benefits under the CBA. They claimed that they
were qualified for optional retirement after having rendered services for at least ten
(10) years when they were retrenched. Respondent rejected petitioners' claim,
forcing petitioners to file a complaint for payment of retirement benefits against
respondent.
The Labor Arbiter dismissed the complaint for lack of merit. Upon appeal, NLRC
granted the appeal and reversed the ruling of the Labor Arbiter. By way of Petition
for Certiorari, CA declared that petitioners were no longer entitled to retirement
benefits after having received the separation pay, and were precluded from
claiming such benefits because of their quitclaims.

Issue:
Whether or not petitioners (retrenched employees) can still recover retirement
benefits in addition to their separation pay.
Held:
No, petitioners are no longer entitled to recover retirement benefits. Having been
separated from employment due to an authorized cause, petitioners are barred
from receiving retirement benefits pursuant to Article X(E) of respondent's
retirement plan. With the inclusion of such provision in the retirement plan,
respondent categorically disallows payment of retirement benefits to retrenched
employees. They are only entitled to payment of separation pay in accordance with
Article 283 of the Labor Code.
The CA committed no error in considering the affidavits as contemporaneous and
subsequent acts from which the intention of the parties to the CBA can be inferred.
While the CBA, on its face, does not contain an express prohibition of payment of
retirement benefits to retrenched employees, the parties may still prove it by means
of contemporaneous and subsequent acts of the parties to the agreement, such as
the execution of the affidavits. In their affidavits, they attested that under the CBA,
an employee who is separated pursuant to a retrenchment program and who
received the corresponding separation package is completely proscribed from
demanding and claiming payment of retirement benefits.
Further, petitioners voluntarily executed and signed a release and quitclaim after
receiving their separation package, acknowledging full and final payment of all
benefits that they may be entitled to in relation to their employment.

13
Thus, Petition for review is denied.
10. J Marketing Corp. vs Taran
G.R. No. 163924 June 18, 2009
Facts:
From February 1981 to February 28, 1993, Cesar L. Taran (respondent) worked as
credit investigator/collector for "J" Marketing Corporation (petitioner), an appliance
and motorcycle dealer with a branch in Tacloban City. Sometime in February 1993,
respondent informed petitioner's then Officer-in-Charge (OIC) Branch Manager
Hector L. Caludac (Caludac) of his intention to resign effective March 1, 1993. On
February13, 1993, Caludac sent respondent a Memorandum requiring him to submit
a formal resignation letter. On February 15, 1993, respondent filed his resignation
letter. On July 26, 1993, respondent filed with the National Labor Relations
Commission (NLRC), Regional Arbitration Branch No. VIII, Tacloban City a complaint
for illegal dismissal and holiday differential. He claimed that there was a verbal
arrangement between him and petitioner whereby the latter would pay him 100%
separation pay and other benefits, provided that he would formally tender his
resignation from the company. But after several follow-ups, petitioner failed to pay
respondent his monetary claims; hence, the latter was constrained to file a
complaint.
Petitioner, on the other hand, postulated that respondent, as credit
collector/investigator, was given a collection quota per month. However, in 1991
and 1992, he failed to meet the same. It added that respondent was also subjected
to an investigation for illegal custody of a colored television unit in violation of the
company rules or policies. In February 1993, respondent verbally informed
petitioner of his decision to resign. On February 15, 1993, he sent a letter of
voluntary resignation, stating that he was resigning due to ill health effective March
1, 1993. Petitioner contended that respondents dismissal was justified, because he
failed to meet his collection quota, in which poor performance compelled him to
voluntarily resign due to inefficiency.
On March 20, 1995, the Labor Arbiter rendered a Decision in favor of respondent
and ordered petitioner to pay him P39,600.00 as separation pay, P8,126.13
representing 30% of rest day pay from February 1984 to February 1993, plus 10%
attorney's fees; or a total award of P52,498.74.
On petitioner's appeal, the NLRC rendered a Decision affirming with modification the
Labor Arbiters Decision by reducing the amount of rest day pay to P2,970.00 for
the period February 1990 to February 1993 only. Petitioner moved for
reconsideration, but the NLRC denied the same in its Resolution dated March 15,
2002.
Undaunted, petitioner filed with the Court of Appeals (CA) a petition for certiorari
contending that the NLRC committed grave abuse of discretion in ordering the
payment of separation pay, rest day pay and attorney's fees to respondent in spite
of the latter's voluntary resignation from his job. In its Decision dated September 4,
2003, the CA denied the petition for lack of merit "in fact and in law. Petitioner filed
a motion for reconsideration, but the same was denied in the Resolution dated
March8, 2004.
Hence, the present petition.

14
Issue: Whether or not the respondent has a cause of action to claim rest day pay
differential.
Held:
Anent respondent's claim for rest day pay differential, We likewise uphold the
disposition of the NLRC, thus: The Court is not convinced by respondent's position
that being a monthly paid employee, complainant is not entitled to rest day pay. An
examination of the vouchers submitted by respondent showed that while
complainant was paid bi-monthly, he was actually paid on the number of days
worked. Thus, every time he is absent, he will not be paid for the day. He is for all
intents and purposes, a daily paid employee. As such, he has to be paid rest day
pay when he works on his rest days. With complainant's categorical assertion that
he worked during his rest days especially in the month of December, the Labor
arbiter did not err in awarding him rest day pay. There is however a need to modify
this award to cover only the period from July 1990 up to July 1993 as the claim
before 1990had already prescribed.
Under Article 291 of the Labor Code, all money claims arising from employeremployee relations shall be filed within three (3) years from the time the cause of
action accrued; otherwise, they shall forever be barred. It is settled jurisprudence
that a cause of action has three elements, to wit, (1) a right in favor of the plaintiff
by whatever means and under whatever law it arises or is created; (2) an obligation
on the part of the named defendant to respect or not to violate such right; and (3)
an act or omission on the part of such defendant violative of the right of the plaintiff
or constituting a breach of the obligation of the defendant to the plaintiff.
In the computation of the three-year prescriptive period, a determination must be
made as to the time when the act constituting a violation of the workers right to
the benefits being claimed was committed. For if the cause of action accrued more
than three (3) years before the filing of the money claim, said cause of action has
already prescribed in accordance with Article 291 of the Labor Code.
Respondent filed his claim for rest day differential in July 1993. It follows then that
he is only entitledto his rest day pay within the three-year period counted from the
time of the filing of his complaint, or from July 1990. Thus, the NLRC correctly ruled
that respondent's claim before July 1990 had already prescribed in accordance with
Article 291 of the Labor Code.
The instant Petition is DENIED. The Court of Appeals Decision is affirmed.

11. Quevedo v. Benguet Electric Cooperative, G.R. No. 168927, September

11, 2009
Facts:
Petitioners are former employees of respondent Benguet Electric Cooperative,
Incorporated (BENECO). BENECO started automating its operations, rendering
redundant the functions performed by some employees, including petitioners.
Instead however of terminating outright petitioners and paying them statutory
benefits under the Labor Code, BENECO offered them an option to retire under a

15
newly created optional retirement program which would provide them with more
benefits than what is statutorily required. Petitioners accepted respondents offer
and thereby received benefits.
Nearly four months after their severance from their employment however,
petitioners filed a complaint for illegal termination of employment against BENECO.
They claimed that notwithstanding the fact that they had no intention of retiring,
they were forced to do so because BENECO would have them terminated had they
insisted otherwise. They also questioned the validity of BENECOs downsizing
measure.
The Labor Abiter dismissed their claims for lack of merit. However, upon reaching
the NLRC, said court found for them and ordered BENECO to reinstate them. The
Court of Appeals, in a petition for certiorari made by herein respondent, reversed
NLRC decision which prompted petitioner to file the instant case.
Issue:
Whether or not petitioners were illegally dismissed from their employment by the
respondent
Ruling:
There was no illegal dismissal. It is inappropriate to discuss whether the
requirements for terminating an employee had been complied with since the
petition is focused on whether the retirement was made voluntarily.
While termination of employment and retirement from service are common modes
of ending employment, they are mutually exclusive, with varying juridical bases and
resulting benefits. Retirement from service is contractual (i.e. based on the bilateral
agreement of the employer and employee), while termination of employment is
statutory (i.e. governed by the Labor Code and other related laws as to its grounds,
benefits and procedure). The benefits resulting from termination vary, depending
on the cause. For retirement, Article 287 of the Labor Code gives leeway to the
parties to stipulate above a floor of benefits.
As to whether the retirement in this case was done voluntarily, the line between
voluntary and involuntary retirement is thin but it is one which this Court has drawn.
Voluntary retirement cuts employment ties leaving no residual employer liability;
involuntary retirement amounts to a discharge, rendering the employer liable for
termination without cause. The employees intent is the focal point of analysis. In
determining such intent, the fairness of the process governing the retirement
decision, the payment of stipulated benefits, and the absence of badges of
intimidation or coercion are relevant parameters. The records presented show
sufficient compliance with the criteria. Furthermore, the manner by which BENECO
arrived at its decision to downsize and at the same time spare petitioners the lesser
benefits under Article 283 of the Labor Code by creating a more generous
retirement package was regular, transparent and fully documented. Petitioners were
afforded opportunity to seek reconsideration of BENECOs decision to downsize,
albeit without success as BENECO stood pat on its management decision.
Nor were petitioners here denied the stipulated benefits. The records show that on
average, the benefits each of the petitioners received were more than twice their
statutory counterpart under Article 183. The marked difference between these two
bundles of benefits not only factored in petitioners decision to retire under the EVR
program but also explained the lapse of nearly four months before petitioners sued

16
BENECO. Finally, petitioners accepted BENECOs offer without reservation and
received payments without protest. True, petitioners requested BENECO to
reconsider its decision to abolish their positions but this is a natural inclination to
keep ones livelihood. It does not rise to that level of intimidation or coercion
sufficient to vitiate consent. Petitioners nevertheless argue that their inevitable
termination forced their hands, leaving them no choice but to retire from service.
Although superficially appealing, this argument rests on an unfair, but predictably
biased, assumption. Petitioners were not compelled to retire, they simply chose,
between two equally valid options, the exit route offering bigger benefits.
As already decided by this Court in Benguet Electric Cooperative v. Fianza :
[T]he abolition of a position deemed no longer necessary is a management
prerogative, and this Court, absent any findings of malice and arbitrariness on the
part of management, will not efface such privilege if only to protect the person
holding that office.
12. Goodrich Mfg Corp vs. Ativo et al., G.R. No. 188002, Feb. 1, 2010
Facts:
Emerlina Ativo et al., are former employees of petitioner Goodrich Manufacturing
Corporation (Goodrich) assigned as machine or maintenance operators. In the last
quarter of 2004, Goodrich suffered financial constraints and gave all its employees
the option to voluntarily resign from the company. Respondents were among those
who availed of that option and were paid their separation pay. Ativo et al., executed
their waivers and quitclaims. However, they changed their minds and filed for illegal
dismissal against Goorichwith prayer for payment of their full monetary benefits
before the NLRC. The Labor Arbiter held that there was no illegal dismissal but ruled
that Goodrich was still liable for the employees SIL, ECOLA, and 13th month pay,
and that the separation pay was insufficient. Mutually unhappy, both parties
appealed to the NLRC which reversed the LAs decision. The NLRC said that the
considerations they received are not unreasonable, vis--vis the awards granted [to]
them in the assailed Decision. Notably, the awards even include the 13th month
pays for 2002 and 2003 which, by respondents proof appear already paid. We also
noted that complainants are not shown to have signed the deeds of waiver and
quitclaim involuntarily, without understanding the implication and consequences
thereof. The case was brought before the CA which renderred a decision in favor of
Ativo et. al., holding that they are entitled to receive their unpaid 13th month pay,
SIL, and ECOLA. And so the issue is now before the Supreme Court.
Issue:
W/N the release, waiver and quitclaim signed by respondents are valid and binding;
and whether respondents may still receive the deficiency amounts due them.
Ruling:
The release, waiver and quitclaim are valid and binding. Capital wins this time.
Requisites of a valid quitclaim
It is true that the law looks with disfavor on quitclaims and releases by employees
who have been inveigled or pressured into signing them by unscrupulous employers
seeking to evade their legal responsibilities and frustrate just claims of employees.
In certain cases, however, the Court has given effect to quitclaims executed by
employees if the employer is able to prove the following requisites, to wit:

17
(1) the employee executes a deed of quitclaim voluntarily;
(2) there is no fraud or deceit on the part of any of the parties;
(3) the consideration of the quitclaim is credible and reasonable; and
(4) the contract is not contrary to law, public order, public policy, morals or good
customs, or prejudicial to a third person with a right recognized by law.
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.
In their Comment19 dated October 1, 2009, respondents themselves admitted that
they were not coerced to sign the quitclaims. They, however, maintain that two (2)
reasons moved them to sign the said documents: first, they believed Goodrich was
terminating its business on account of financial hardship; and second, they thought
petitioners will pay them the full amount of their compensation.21 Respondents
insist that they were deceived into signing the quitclaims when they learned that
they were not paid their full monetary benefits and after discovering that the
company did not really close shop, but instead only assumed a different company
name.
Quit claims were simple, clear and unequivocal
The records of the case are bereft of any substantial evidence to show that
respondents did not know that they were relinquishing their right short of what they
had expected to receive and contrary to what they have so declared. Put differently,
at the time they were signing their quitclaims, respondents honestly believed that
the amounts received by them were fair and reasonable settlements of the amounts
which they would have received had they refused to voluntarily resign from the said
company.
Respondents were not deceived
Ativo and company claim that they were deceived because petitioners did not really
terminate their business since Mr. Chua Goy had set up another company with the
same line of business as Goodrich. Such contention, however, was not proven
during the hearing before the Labor Arbiter and the NLRC. Hence, such claim is
based only on respondents surmises and speculations which, unfortunately, can
never be used as a valid and legal ground to repudiate respondents quitclaims.
Considerations received were not grossly inadequate
As correctly pointed out by the NLRC, the total awards computed by the Labor
Arbiter will definitely even be lesser after deducting the 13th month pay for the
years 2002 and 2003, which have already been received by the respondents prior to
the filing of their complaints, but which the Labor Arbiter still included in his
computation. The difference between the amounts expected from those that were
received may, therefore, be considered as a fair and reasonable bargain on the part
of both parties.
Petition is granted. CA decision is reversed and set aside. The NLRCs decision is
reinstated.
13. HILTON HEAVY EQUIPMENT CORPORATION and PETER LIM, vs. ANANIAS
P. DY, G.R. No. 164860, February 2, 2010

18

FACTS: Ananias Dy (hereafter, DY) was employed at Hilton Heavy Equipment

Corporation (hereafter, the CORPORATION). In the course of his employment, he was
assigned as the personal bodyguard of Peter Lim (hereafter, LIM), the President of
the said Corporation. On 19 April 2000, in the presence of the Corporations
employees and Lim, Dy mauled Duke Echiverri, a co-employee, within the premises
of the principal office of the Corporation. Dy defied orders of Lim to stop mauling
Duke Echiverri. Dy also threatened to kill the latter, and uttered that if he will be
given monetary consideration, he will cease working in the company. Geraldine
Chan, Secretary of the Corporation, executed an affidavit attesting to the fact of Dys
utterance of his intention to resign from his job. Thereafter, Dy stopped reporting to
work. Subsequently, Duke Echiverri filed criminal complaints against Dy for grave
threats and less serious physical injuries and the corresponding Informations were
filed before the Municipal Trial Court in Cities, Mandaue City. These cases were later
dismissed upon motion filed by Duke Echiverri. A month after the mauling incident,
on 19 May 2000, Lim requested Dy to come to the office where he was confronted
by Lim and Wellington Lim, Lims brother. Thereat, Dy was paid by Wellington Lim
the amount of P120,000.00 as may be shown by Solidbank Mandaue Branch Check
No. CD 0590750 dated 19 May 2000 payable to cash, as separation pay.[4]
On 19 June 2000, Dy filed a complaint before the National Labor Relations
Commission (NLRC) Regional Arbitration Branch VII in Cebu City against petitioners
for illegal dismissal and non-payment of labor standard benefits with claim for
damages and attorneys fees. The case was docketed as NLRC RAB-VIII Case No. 061003-2000.
LA dismissed Dys complaint for illegal dismissal because Dy stopped working when
he was given separation pay of P120,000. NLRC affirmed LAs decision.
The appellate court ruled that Dy did not voluntarily resign from his employment,
but there was a valid cause for Dys termination from employment. Petitioners,
however, failed to observe due process in terminating Dys services. The appellate
court decided that Dy was dismissed for just cause but was not entitled to
reinstatement.
ISSUE: WON Dy is entitled to backwages
HELD: YES.
We will not disturb the finding that Dy was the perpetrator in a mauling incident, as
well as the ruling that Dys act is a just cause for termination. However, we also
observe that petitioners failed to accord Dy due process.
Petitioners assert that Dy intended to sever the employer-employee relationship by
his mere failure to return to work. One month after the mauling incident, petitioners
summoned Dy to give him a check worth P120,000 as separation pay. Dy, on the
other hand, never gave a resignation letter to petitioners but instead filed a
complaint for illegal dismissal against them.
Petitioners assert that Dy abandoned his work. To constitute abandonment, two
elements must concur: (1) the failure to report for work or absence without valid or
justifiable reason, and (2) a clear intention to sever the employer-employee
relationship, with the second element as the more determinative factor and being
manifested by some overt acts.[12] In the present case, Dy reported for work after
the mauling incident only on 19 May 2000, after petitioner Lim called him to the

19
office. On the other hand, apart from Dys absence, petitioners failed to show any
evidence of Dys clear intent to sever his ties with petitioners.
Dy, on the other hand, asserts that petitioners are guilty of illegal dismissal for
failure to observe due process. Dys serious misconduct merited a written notice of
termination from petitioners in accordance with Section 2, Rule XXIII, Book V of the
Omnibus Rules Implementing the Labor Code.
Section 2. Standards of due process; requirements of due notice. In all cases of
termination of employment, the following standards of due process shall be
substantially observed:
I. For termination of employment based on just causes as defined in Article 282 of
the Code:
(a) A written notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which to
explain his side;
(b) A hearing or conference during which the employee concerned, with the
assistance of counsel if the employee so desires, is given opportunity to respond to
the charge, present his evidence or rebut the evidence presented against him; and

(c) A written notice of termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to justify his
termination.
In case of termination, the foregoing notices shall be served on the employees last
known address.
Moreover, the immediate filing of a complaint for illegal dismissal against the
employer with a prayer for reinstatement shows that the employee was not
abandoning his work.
In an unlawful dismissal case, the employer has the burden of proving the lawful
cause sustaining the dismissal of the employee. The employer must affirmatively
show rationally adequate evidence that the dismissal was for a justifiable cause.[13]
Dys behavior constituted just cause. However, petitioners cannot deny that they
failed to observe due process. The law requires that the employer must furnish the
worker sought to be dismissed with two written notices before termination of
employment can be legally effected: (1) notice which apprises the employee of the
particular acts or omissions for which his dismissal is sought; and (2) the
subsequent notice which informs the employee of the employers decision to dismiss
him. Failure to comply with the requirements taints the dismissal with illegality.[14]
Petitioners should thus indemnify Dy for their failure to observe the requirements of
due process. Dy is not entitled to reinstatement, backwages and attorneys fees
because Dys dismissal is for just cause but without due process.[15] In light of this
Courts ruling in Agabon v. National Labor Relations Commission,[16] the violation of
Dys right to statutory due process by petitioners, even if the dismissal was for a just
cause, warrants the payment of indemnity in the form of nominal damages. This
indemnity is intended not to penalize the employer but to vindicate or recognize the
employees right to statutory due process which was violated by the employer.[17]
Considering that both the Labor Arbiter and the NLRC found that petitioners already

20
gave Dy P120,000 of their own free will, this amount should thus constitute the
nominal damages due to Dy.
WHEREFORE, we GRANT the petition. We AFFIRM with MODIFICATION the Decision of
the Court of Appeals promulgated on 30 May 2003 in CA-G.R. SP No. 72454 as well
as the Resolution promulgated on 6 August 2004. The amount of P120,000
previously given by petitioners Hilton Heavy Equipment Corporation and Peter Lim
to respondent Ananias P. Dy constitutes the award of nominal damages. Although
the amount of P120,000 exceeds the P30,000 normally given in similar cases, the
excess paid by Hilton Heavy Equipment Corporation and Peter Lim may be retained
by Ananias P. Dy as voluntary and discretionary gratuity.

14. Cervantes vs. PAL Maritime

G.R. No. 175209 : January 16, 2013
Facts:
Petitioner Rolando Cervantes (Cervantes) was hired as Master on board the vessel
M/V Themistocles by respondent PAL Maritime Corporation, the manning agent of
respondent Western Shipping Agencies, PTE., LTD., (Western Shipping) for a 10month period.
The owner of the vessel sent a telex message to Cervantes enumerating several
complaints regarding his poor performance. On the following day, Cervantes replied
and imputed ill- motive on the part of the foreign inspectors who were making false
accusations against Filipino crew members. He sent another telex message stating
that: ANYHOW TO AVOID REPETITION [ON] MORE HARSH REPORTS TO COME.
BETTER ARRANGE MY RELIEVER [AND] C/O BUSTILLO RELIEVER ALSO. UPON ARR
NEXT USA LOADING PORT FOR THEIR SATISFACTION.
In response to said message, Western Shipping sent a letter informing Cervantes
that: OWNERS HAVE DECIDED TO RELIEVE YOU UPON PASSING PANAMA CANAL OR
NEXT CONVENIENT PORT. WE TRUST THIS PRE-MATURED ENDING OF CONTRACT IS
MUTUALLY AGREED AND FOR THE BENEFITS OF ALL PARTIES CONCERNED.
Cervantes replied: HV NO CHOICE BUT TO ACCEPT YR DECISION. TKS ANYHOW FOR
RELIEVING ME IN NEXT CONVENIENT PORT WILL EASE THE BURDEN THAT I HV FELT
ONBOARD. REST ASSURE VSL WILL BE TURNED OVER PROPERLY TO INCOMING
MASTER.
When Cervantes was repatriated to Manila, he filed a complaint for illegal dismissal
before the Labor Arbiter. The Labor Arbiter ruled that he was illegally dismissed.
On appeal, the NLRC reversed the decision of the Labor Arbiter. The Court of
Appeals affirmed the NLRC's decision.
Hence, this present petition for review.
Issue:
Whether or not Cervantes resigned or was terminated from his employment?
Held:
Cervantes resigned from his employment.

21
LABOR LAW: resignation
Resignation is the voluntary act of an employee who finds himself in a situation
where he believes that personal reasons cannot be sacrificed in favor of the
exigency of the service, such that he has no other choice but to disassociate himself
from his employment. This is precisely what obtained in this case. The statements in
Cervantes telex message is plain and straightforward.
Cervantes also failed to substantiate his claim that he and the Filipino crew
members were being subjected to racial discrimination on board.
DENIED.

15. Bilbao vs. Saudi Arabian Airlines, G.R. No. 183915, December 14, 2011
Facts:
Bilbao was a former employee of respondent Saudia, having been hired as a Flight
Attendant on May 13, 1986 until her separation from Saudia in September 2004.
During the course of her employment, Bilbao was assigned to work at the Manila
Office, although the nature of her work as a flight attendant entailed regular flights
from Manila to Jeddah, Saudi Arabia, and back. On August 25, 2004, the In-Flight
Service Senior Manager of Saudia assigned in Manila received an inter-office
Memorandum dated August 17, 2004 from its Jeddah Office regarding the transfer
of 10 flight attendants from Manila to Jeddah effective September 1, 2004. The said
memorandum explained that such transfer was made due to operational
requirements. [3]
Bilbao was among the 10 flight attendants to be
transferred.Bilbao initially complied with the transfer order and proceeded to Jeddah
for her new assignment. However, on September 7, 2004, she opted to resign and
relinquish her post by tendering a resignation letter.

On October 28, 2004, Bilbao executed and signed an Undertaking [5] similar to that
of a Receipt, Release and Quitclaim wherein she acknowledged receipt of a sum of
money as full and complete end-of-service award with final settlement and have no
further claims whatsoever against Saudi Arabian Airlines. [6]
In spite of this signed Undertaking, however, on July 20, 2005, Bilbao filed with the
NLRC a complaint for reinstatement and payment of full backwages; moral,
exemplary and actual damages; and attorneys fees.
For her part, Bilbao
maintained that her resignation from Saudia was not voluntary. Upon the other
hand, Saudia averred that the resignation letters from Bilbao and her cocomplainants were voluntarily made since they were actually hand-written and duly
signed. Saudia asserted that Bilbao and her co-complainants were not subjected to
any force, intimidation, or coercion when they wrote said resignation letters and
even their undertakings, after receiving without protest a generous separation
package despite the fact that employees who voluntarily resign are not entitled to
any separation pay. Saudia also added that the transfer of flight attendants from
their Manila Office to the Jeddah Office was a valid exercise of its management
prerogative.
On August 31, 2006, Labor Arbiter Reyes rendered a Decision [7] declaring that
Bilbao, together with co-complainants Centi-Mandanas and Castells, was illegally
dismissed . Saudia filed an appeal before the NLRC , Bilbao followed suit and also

22
appealed before the NLRC . On June 25, 2007, the NLRC granted Saudias appeal,
and reversed and set aside the decision of the Labor Arbiter Likewise, the Motion for
Reconsideration of Maria Joy Teresa Bilbao is DENIED. Bilbao went to the Court of
Appeals via a petition for certiorari . the Court of Appeals affirmed the Resolutions of
the NLRC dated June 25, 2007 and October 26, 2007, and held that the resignation
of Bilbao was of her own free will and intelligent act. Bilbao filed a motion for
reconsideration which was denied by the Court of Appeals.
Issue:
Did Ms. Bilbao vountarilty resign from Saudi Arabian Airlines
Ruling:
After a review of the case, we uphold the findings of the Court of Appeals that Bilbao
voluntarily resigned from her employment with Saudia. Her resignation letter and
undertaking that evidenced her receipt of separation pay, when taken together with
her educational attainment and the circumstances surrounding the filing of the
complaint for illegal dismissal, comprise substantial proof of Bilbaos voluntary
resignation.
Resignation is the voluntary act of an employee who is in a situation where one
believes that personal reasons cannot be sacrificed in favor of the exigency of the
service, and one has no other choice but to dissociate oneself from employment. It
is a formal pronouncement or relinquishment of an office, with the intention of
relinquishing the office accompanied by the act of relinquishment. As the intent to
relinquish must concur with the overt act of relinquishment, the acts of the
employee before and after the alleged resignation must be considered in
determining whether he or she, in fact, intended to sever his or her employment.
In the instant case, Bilbao tendered her resignation letter a week after her transfer
to the Jeddah office. In the said letter, Bilbao expressed her gratitude for the
support which Saudia had given her for her eighteen years of service. Clearly, her
use of words of appreciation and gratitude negates the notion that she was forced
and coerced to resign. Besides, the resignation letter was hand-written by Bilbao on
a Saudia form and was in English, a language she is conversant in. Additionally,
instead of immediately filing a complaint for illegal dismissal after she was allegedly
forced to resign, Bilbao executed an Undertaking in favor of Saudia, wherein she
declared that she received her full and complete end-of-service award with final
settlement. What is more, Bilbao waited for more than 10 months after her
separation from Saudia to file a complaint for illegal dismissal.
Despite the foregoing circumstances, Bilbao maintains that she was forced and
coerced into writing the said resignation letter in the form prepared by Saudia, and
that she was left with no other option but to resign. Saudia, on the other hand,
claims that Bilbaos resignation was voluntary, thus, there could be no illegal
dismissal. Even assuming that Saudia prepared the form in which Bilbao wrote her
resignation letter as claimed, this Court is not convinced that she was coerced and
intimidated into signing it. Bilbao is no ordinary employee who may not be able to
completely comprehend and realize the consequences of her acts. She is an
educated individual. It is highly improbable that with her long years in the
profession and her educational attainment, she could be tricked and forced into
doing something she does not intend to do. Under these circumstances, it can
hardly be said that Bilbao was coerced into resigning from Saudia.

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Besides, Bilbao did not adduce any competent evidence to prove that she was
forced or threatened by Saudia. It must be remembered that for intimidation to
vitiate consent, the following requisites must be present: (1) that the intimidation
caused the consent to be given; (2) that the threatened act be unjust or unlawful;
(3) that the threat be real or serious, there being evident disproportion between the
evil and the resistance which all men can offer, leading to the choice of doing the
act which is forced on the person to do as the lesser evil; and (4) that it produces a
well-grounded fear from the fact that the person from whom it comes has the
necessary means or ability to inflict the threatened injury to his person or property.
[19] In the instant case, Bilbao did not prove the existence of any one of these
essential elements. Anent the Undertaking signed by Bilbao, this Court is of the
opinion that the same was validly and voluntarily executed. Indeed, not all waivers
and quitclaims are invalid as against public policy. There are legitimate waivers and
quitclaims that represent a voluntary and reasonable settlement of workers claims
which should be respected by the courts as the law between the parties. [20] And if
such agreement was voluntarily entered into and represented a reasonable
settlement, it is binding on the parties and should not later be disowned. Clearly
then, Bilbaos claim that she was illegally dismissed cannot be sustained. There is
no showing that the Undertaking and resignation letter were executed by Bilbao
under force or intimidation.
Bilbaos claims for reinstatement, payment of
backwages without loss of seniority rights and with interest, moral and exemplary
damages, and attorneys fees must inevitably fail.