Santiago vs. CF Sharp Crew Management, Inc.

2
PAUL V. SANTIAGO, petitioner, vs. CF SHARP CREW MANAGEMENT, INC., respondent.
G.R. No. 162419
July 10, 2007
TINGA, J.:
FACTS:
Petitioner had been working as a seafarer for Smith Bell Management, Inc.
(respondent) for about five (5) years. He signed a new contract of employment with
the duration of 9 months on Feb 3 1998 and he was to be deployed 10 days after.
This contract was approved by POEA. A week before the date of departure, the
respondent received a phone call from petitioners wife and some unknown callers
asking not to send the latter off because if allowed, he will jump ship in Canada.
Because of the said information, petitioner was told that he would not be leaving for
Canada anymore. This prompted him to file a complaint for illegal dismissal against
the respondent. The LA held the latter responsible. On appeal, the NLRC ruled that
there is no employer-employee relationship between petitioner and respondent,
hence, the claims should be dismissed. The CA agreed with the NLRCs finding that
since petitioner had not departed from the Port of Manila, no employer-employee
relationship between the parties arose and any claim for damages against the socalled employer could have no leg to stand on.
ISSUE: When
commence?

does

the

employer-employee

relationship

involving

seafarers

RULING:
A distinction must be made between the perfection of the employment contract and
the commencement of the employer-employee relationship. The perfection of the
contract, which in this case coincided with the date of execution thereof, occurred
when petitioner and respondent agreed on the object and the cause, as well as the
rest of the terms and conditions therein. The commencement of the employeremployee relationship, as earlier discussed, would have taken place had petitioner
been actually deployed from the point of hire. Thus, even before the start of any
employer-employee relationship, contemporaneous with the perfection of the
employment contract was the birth of certain rights and obligations, the breach of
which may give rise to a cause of action against the erring party. Thus, if the
reverse had happened, that is the seafarer failed or refused to be deployed as
agreed upon, he would be liable for damages.

Respondents act of preventing petitioner from departing the port of Manila and
boarding "MSV Seaspread" constitutes a breach of contract, giving rise to
petitioners cause of action. Respondent unilaterally and unreasonably reneged on
its obligation to deploy petitioner and must therefore answer for the actual
damages he suffered.

MANEJA VS NLRC 290 SCRA 603 (1998)FACTS:

Petitioner Rosario Maneja worked with private respondent Manila Midtown

Hotelbeginning January 1985, as a telephone operator. She was a member of the
National Union of Workers in Hotels, Restaurants and Allied Industries (NUWHRAIN)
with an existing CBA with theprivaterespondent.In February 13, 1990, a fellow
telephone operator, Rowena Loleng, received a request for longdistance call (RLDC)
form and a deposit for P500.00 from a Japanese guest but the call wasunanswered.
The deposit was then forwarded to the cashier. The same evening, the
Japaneseguest again made an RLDC and deposited another P500.00 but the call was
also unanswered.Loleng passed the RLDC to Maneja for follow up.ON February 15,
the cashier inquired about the P1000 deposit made. After a search, the firstone was
found in the guest folio while the other in the folder for cancelled calls.
PetitionerManeja saw that the 2
nd
RLDC form was not time stamped so she placed it in the machine tostamp it with
the date February 15. But after realizing that the call was made 2 days before,she
changed the date to February 13.On March 7, the chief telephone operator asked
the petitioner and Loleng to explain the Feb 15incident. Both submitted their written
explanation. On March 20, a written report wassubmitted, stating that their actions
were covered violations of the Offenses Subject toDisciplinary Action (OSDA) as1.

Forging, falsifying official documents and;2.

Culpable carelessness

negligence or failure to follow specific instruction/s orestablished procedure/sOn

March 23, petitioner was then served notice of dismissal effective on April 1. She
refused to
sign and wrote under protest.
On October 2, 1990, Maneja filed a complaint for illegal dismissal against private
respondentbefore the labor arbiter (LA). LA found that the petitioner was illegally
dismissed, stating thateven though the case revolves on the matter of

implementation and interpretation of companypolicies and is thus within the

jurisdiction of the grievance procedure under the CBA, Art. 217Labor Code confers
original and exclusive jurisdiction of all termination cases to LA. NLRCdismissed the
case for lack of jurisdiction of LA because the case was subject to
voluntaryarbitration.Petitioner insists that her termination is not an unresolved
grievance as there had been nogrievance meeting between the union and the
management. Petitioner alleged that it has beena company policy that termination
cases are not referred to the grievance machinery butdirectly to LA.
ISSUE:
W/N THE LABOR ARBITER HAD JURISDICTION TO DECIDE THE CASE

HELD:
NLRCs interpretation of Art 216c Labor Code is erroneous. Even though such
provision
provides that LA have no jurisdiction over cases arising from interpretation and
implementationof CBAs (must be submitted to the grievance machine or voluntary
arbitration), it must be readin conjunction with Art 261 which grants voluntary
arbitrators original and exclusive jurisdictionto hear and decide all unresolved
grievances arising from the interpretation or implementationof the CBA and those
arising from the interpretation or enforcement of company personnelpolicies which
is not the case here.According to the Sanyo case, there is dismissal which does not
involve an interpretation orimplementation of a CBA or interpretation or
enforcement of company personnel policies butinvolves termination.
Where the dispute is just in the interpretation, implementation orenforcement
stage, it may be referred to the grievance machinery set up in the CBA or
byvoluntary arbitration. Where the was already actual termination, i.e. violation of
rights, it isalready cognizable by LA.
Moreover, Art 260 also stipulates that only disputes involving the union and the
company shallbe referred to the grievance machinery or voluntary arbitrators. In the
case at bar, the uniondoes not event come into the picture as the practice in said
Hotel in cases of termination is thatthey are not referred anymore to the grievance
comitte and that the terminated employee whowishes to question the legality of his
termination usually goes to LA for arbitration, whetherthe termination arose from
the interpretation or enforcement of the company personnelpolicies or
otherwise.Petitioner was illegally dismissed as there are two requisites in a valid
dismissal: 1. That thedismissal must be for any causes expressed in Art 282 Labor
Code and; 2. The employee mustbe given an opportunity to be heard and to defend
himself.1.

There is no cause for dismissal as the petitioners actions were not contrary to
company
practice and there is also no basis for personal appropriation based on the facts2.

An examination of the record reveals that no hearing whatsoever was ever

conductedby the Hotel before Maneja was dismissed. While it may be true that the
petitionersubmitted a written explanation, no hearing was actually conducted
before she wasterminated. She was not accorded the opportunity to fully defend
herself which isclearly a violation of her right to due process.
Urbanes Jr. vs Sec. of Labor[GR No. 122791, February 19, 2003]Facts:4
Petitioner Placido O. Urbanes, Jr., doing business under the name and style of
Catalina Security Agency, entered into an agreement toprovide security services to
respondent Social Security System (SSS). During the effectivity of the agreement,
petitioner, by letter of May 16,1994, requested the SSS for the upward adjustment
of their contract rate in view of Wage Order No. NCR-03 which was issued by the
RegionalTripartite Wages and Productivity Board-NCR pursuant to Republic Act 6727
otherwise known as the Wage Rationalization Act.On June 24, 1994, petitioner
pulled out his agency's services from the premises of the SSS and another security
agency, Jaguar, took over. OnJune 29, 1994, petitioner filed a complaint with the
DOLE-NCR against the SSS seeking the implementation of Wage Order No. NCR03.The Regional Director of the DOLE-NCR rendered judgment in favor of the
petitioner. SSS appealed to the Secretary of Labor. The Secretary of Labor set aside
the order of the Regional Director and the Secretary held petitioner's security
agency "JOINTLY AND SEVERALLY liable forwage differentials, the amount of which
should be paid DIRECTLY to the security guards concerned.
Issue:
Whether or not the Secretary of Labor have jurisdiction to review appeals from
decisions of the Regional Directors in complaints filed underArticle 129 of the Labor
Code
Ruling
:

In the case at bar, even if petitioner filed the complaint on his and also on behalf of
the security guards, the relief sought has to do with theenforcement of the contract
between him and the SSS which was deemed amended by virtue of Wage Order No.
NCR-03. The controversysubject of the case at bar is thus a civil dispute, the proper
forum for the resolution of which is the civil courts.But even assuming
arguendo

that petitioner's complaint were filed with the proper forum, for lack of cause of
action it must be dismissed. Articles 106, 107 and 109 of the Labor Code
provide: ART. 106.CONTRACTOR OR SUBCONTRACTOR.

Whenever an employer enters into contract with anotherperson for the performance
of the former's work, the employees of the contractor and of the latter's
subcontractor, if any,shall be paid in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wage of his emplo
yees in accordance with thisCode, the employer shall be jointly and severally liable
with his contractor or subcontractor to such employees to the

extent of the work performed under the contract, in the same manner and extent
that he is liable to employees directlyemployed by him.
xxxxxxxxx (Emphasis and underscoring) ART. 107.INDIRECT EMPLOYER.

The provisions of the immediately preceding Article shall likewise apply to

anyperson, partnership, association or corporation which, not being an employer,
contracts with an independent contractorfor the performance of any work, task, job
or project. ART. 109.SOLIDARY LIABILITY.

The provisions of existing laws to the contrary notwithstanding, every employer or

indirect employershall be held responsible with his contractor or subcontractor for
any violation of any provision of this Code. For purposes of determining theextent of
their civil liability under this Chapter, they shall be considered as direct
employers.In fine, the liability of the SSS to reimburse petitioner arises only if and
when petitioner pays his employee-security guards "the increases"mandated by
Wage Order No. NCR-03. The records do not show that petitioner has paid the
mandated increases to the security guards. The security guards in fact have filed
acomplaint with the NLRC against petitioner relative to, among other things,
underpayment of wages.
NICASIO P. RODRIGUEZ JR., ANTONIO P. EREETA, JUANITO A. MAGNO, VICTOR C.
PINEDA,BITUIN V. SALCEDO, CESAR R. SAN DIEGO, VICTOR V. TANTOCO and
AMADOR C. DE LA MERCED,
petitioners
,
vs
.ANTONIO

L
.
AGUILAR

SR
., respondent.

37
FACTS:
Petitioners are members of the Board of Directors of the Philippine Postal Savings
Bank,and respondent Antonio Aguilar was employed as vice president of its Finance
and AdministrativeGroup, when his service were terminated. Antonio Aguilar filed
against petitioners with theRegional Trial Court for his illegal dismissal and prayed
for award of damages and the issuance of temporary restraining order enjoining the
petitioners and to be reinstated.The judge dismissed the complaint for lack of
jurisdiction that the case lies within the LaborArbiter of National Labor Relation
Commission. Private respondent filed a Motion forReconsideration, an exparte to
withdraw motion for reconsideration of the dismissal.Reinstatement be deleted.
ISSUES:
1.

Was the motion for reconsideration valid2.

Was the court has jurisdiction to decide the case

HELD:
1.

The filing of the motion for reconsideration interrupted the running of the 15
dayreglementary period, its withdrawal left respondent in exactly the same position
as the nomotion had been filed at all, it erases the tolling of reglementary period.2.

National Labor Relation Commission has the exclusive jurisdiction to decide

regarding anylabor disputes, while the RTC has the jurisdiction and the effective

means and also theadequate tool for arriving at a just accurate assessment of
damages.
DILY DANY NACPIL vs. INTERNATIONAL BROADCASTING CORPORATION G.R.
No. 144767. March 21, 20026
Prepared by: Arnel D. Mateo
Facts:

Petitioner was the Assistant General Manager for Finance/Administration and

Comptroller of private respondent Intercontinental Broadcasting Corporation (IBC)
from 1996 until April 1997. Upon assumption of Emiliano Templo as the IBC
President, petitioner was forced to retire. Templo refused to pay him his retirement
benefits. Hence, in 1997, petitioner filed with the Labor Arbiter a complaint for
illegal dismissal and non-payment of benefits.

IBC alleged that the Labor Arbiter had no jurisdiction over the case, that the
petitioner was a corporate officer who was duly elected by the Board of Directors of
IBC; hence, the case qualifies as an intra-corporate dispute falling within the
jurisdiction of the Securities and Exchange Commission (SEC).

Petitioner argues that he is not a corporate officer of the IBC but an employee
thereof since he had not been elected nor appointed as Comptroller and Assistant
Manager by the IBC's Board of Directors. He pointed out that he had actually been
appointed on January 11, 1995 by the IBC's General Manager, CeferinoBasilio.

Issue:

Whether or not the Labor Arbiter had jurisdiction over the case for illegal dismissal
and non-payment of benefits filed by petitioner.

Ruling:

Dismissal or non-appointment of a corporate officer is clearly an intra-corporate

matter and jurisdiction over the case properly belongs to the SEC, not to the NLRC.
Under Presidential Decree No. 902-A (the Revised Securities Act), Controversies in
the election or appointment of directors, trustees, officers, or managers of such
corporations, partnerships or associations fall under the exclusive of the SEC. Two
elements are to be considered in determining whether the SEC has jurisdiction over

the controversy, to wit: (1) the status or relationship of the parties; and (2) the
nature of the question that is the subject of their controversy.
Since complainant's appointment was approved unanimously by the Board of
Directors of the corporation, he is therefore considered a corporate officer and his
claim of illegal dismissal is a controversy that falls under the jurisdiction of the SEC
as contemplated by Section 5 of P.D. 902-A. That the position of Comptroller is not
expressly mentioned among the officers of the IBC in the By-Laws is of no moment,
because the IBC's Board of Directors is empowered under Section 25 of the
Corporation Code and under the corporation's By-Laws to appoint such other
officers as it may deem necessary.
Lasco vs UNRFNRE7
Case Digest_EldepioLasco et al v United Nations Revolving Fund For
Natural Resources Exploration (UNRFNRE)
G.R. Nos. 109095-109107 February 23, 1995

Facts: Petitioners were dismissed from their employment with privaterespondent,

the United Nations Revolving Fund for NaturalResourcesExploration (UNRFNRE),
which is a special fund and subsidiary organ of theUnitedNations.The UNRFNRE is
involved in a joint project of thePhilippineGovernment and the United Nations for
exploration work in DinagatIsland.Petitioners are thecomplainants for illegal
dismissal and damages.Private respondent alleged that respondent Labor Arbiter
had no jurisdiction over its personality since itenjoyed diplomatic immunity.

Issue:WON specialized agencies enjoy diplomatic immunity

Held:Petition is dismissed. This is not to say that petitioner have no recourse.Section

31 of the Convention on the Privileges and Immunitiesof the SpecializedAgencies of
the United Nations states that each specialized agency shall makea provision for
appropriate modes of settlement of (a) disputes arising out of contracts or other
disputes of private character to which thespecializedagencyisa party. Private
respondent is not engaged in a commercial venture in thePhilippines.Its presence is
by virtue of a joint project entered into by thePhilippine Government and theUnited
Nations for mineral exploration in DinagatIsland

Manila Hotel Corporation vs National Labor Relations

Commission8
FACTS: In May 1988, Marcelo Santos was an overseas worker in Oman. In June 1988, he
was recruited by Palace Hotel in Beijing, China. Due to higher pay and benefits, Santos
agreed to the hotels job offer and so he started working there in November 1988. The
employment contract between him and Palace Hotel was however without the intervention
of the Philippine Overseas Employment Administration (POEA). In August 1989, Palace
Hotel notified Santos that he will be laid off due to business reverses. In September 1989,
he was officially terminated.
In February 1990, Santos filed a complaint for illegal dismissal against Manila Hotel
Corporation (MHC) and Manila Hotel International, Ltd. (MHIL). The Palace Hotel was
impleaded but no summons were served upon it. MHC is a government owned and
controlled corporation. It owns 50% of MHIL, a foreign corporation (Hong Kong). MHIL
manages the affair of the Palace Hotel. The labor arbiter who handled the case ruled in
favor of Santos. The National Labor Relations Commission (NLRC) affirmed the labor
arbiter.
ISSUE: Whether or not the NLRC has jurisdiction over the case.
HELD: No. The NLRC is a very inconvenient forum for the following reasons:
1.

The only link that the Philippines has in this case is the fact that Santos is a Filipino;

2.

However, the Palace Hotel and MHIL are foreign corporations MHC cannot be held
liable because it merely owns 50% of MHIL, it has no direct business in the affairs of the
Palace Hotel. The veil of corporate fiction cant be pierced because it was not shown that
MHC is directly managing the affairs of MHIL. Hence, they are separate entities.

3.

Santos contract with the Palace Hotel was not entered into in the Philippines;

4.

Santos contract was entered into without the intervention of the POEA (had POEA
intervened, NLRC still does not have jurisdiction because it will be the POEA which will hear
the case);

5.

MHIL and the Palace Hotel are not doing business in the Philippines; their
agents/officers are not residents of the Philippines;
Due to the foregoing, the NLRC cannot possibly determine all the relevant facts pertaining
to the case. It is not competent to determine the facts because the acts complained of

happened outside our jurisdiction. It cannot determine which law is applicable. And in case
a judgment is rendered, it cannot be enforced against the Palace Hotel (in the first place, it
was not served any summons).
The Supreme Court emphasized that under the rule of forum non conveniens, a Philippine
court or agency may assume jurisdiction over the case if it chooses to do so provided:
(1) that the Philippine court is one to which the parties may conveniently resort to;
(2) that the Philippine court is in a position to make an intelligent decision as to the law and
the facts; and
(3) that the Philippine court has or is likely to have power to enforce its decision.
None of the above conditions are apparent in the case at bar.

PHILIPPINE AIRLINES, INCORPORATED vs. BERNARDIN J. ZAMORA

[G. R. No. 166996 February 6, 2007]

Facts:
Respondent Zamora had been in the employ of petitioner PAL since 9 February 1981
when the former was hired as a Cargo
Representative at petitioner PALs Import Operations Division. On 13 November
1995, respondent Zamora was dismissed from serv
iceforhavin
g been found by petitioner PALs management to be liable for insubordination,
neglect of customer, disrespect for authority a
ndabsencewithout official leave. On 12 March 1996, respondent Zamora filed a
complaint against petitioners PAL and Francisco X. Yngente IV before theNLRC for
illegal dismissal, unfair labor practice, nonpayment of wages, damages and attorneys fees.
SC Ruling:
At this point, notwithstanding the fact that the present petition alleges three issues,
the resolution of the third one relating to the
propriety of the execution of the NLRCs order of reinstatement despite the verity of
the 17 May 1999 SEC Order approving the

Amended and
Restated Rehabilitation Plan of petitioner PAL and appointing a permanent
rehabilitation receiver for

the latter, is of paramount importance.

The overriding legal significance to the instant case of the SEC mandated
rehabilitation of petitioner PAL will affect the progress, development oradvancement
of the present petition.The relevant law dealing with the suspension of actions for
claims
against
corporations
is
Presidential
Decree
No.
902-A,as
amended.Particularly, Section 5(d) which reads:SECTION 5. In addition to the
regulatory adjudicative functions of the Securities and Exchange Commission over
corporations,partnerships and other forms of associations registered with it as
expressly granted under existing laws and decrees, it shall haveoriginal and
exclusive jurisdiction to hear and decide cases involving:x x xxd) Petitions of
corporations, partnerships or associations to be declared in the state of suspension
of payments in cases where thecorporation, partnership or association possesses
property to cover all its debts but foresees the impossibility of meeting them
whenthey respectively fall due or in cases where the corporation, partnership or
association has no sufficient assets to cover its liabilities,but is under the
[management of a rehabilitation receiver or] management committee created
pursuant to this Decree.and Section 6(c), to wit:SECTION 6. In order to effectively
exercise such jurisdiction, the Commission shall possess the following:x x x xc) To
appoint one or more receivers of the property, real or personal, which is the subject
of the action pending before theCommission in accordance with the pertinent
provisions of the Rules of Court in such other cases whenever necessary in order
topreserve the rights of the parties-litigants and /or protect the interest of the
investing public and creditors: x xx Provided, finally, Thatupon appointment of a
management committee, the rehabilitation receiver, board or body, pursuant to this
Decree, all actions forclaims against corporations, partnerships or associations
under management or receivership pending before any court, tribunal, boardor
body shall be suspended accordingly.
The term claim, as contemplated in Sec. 6 (c) of Presidential Decree No. 902
A, refers to debts or demands of a pecuniary nature.It means the assertion of a
right to have money paid.

37
The raison d'tre behind the suspension of claims pending rehabilitation
proceedings was explained in this wise:In light of these powers, the reason for
suspending actions for claims against the corporation should not be difficult to
discover. It isnot really to enable the management committee or the rehabilitation
receiver to substitute the defendant in any pending action againstit before any
court, tribunal, board or body. Obviously, the real justification is to enable the
management committee or rehabilitationreceiver to effectively exercise its/his
powers free from any judicial or extra-judicial interference that might unduly hinder
or prevent
the rescue of the debtor company. To allow such other action to continue would
only
add to the burden of the managementcommittee or rehabilitation receiver, whose
time, effort and resources would be wasted in defending claims against the
corporationinstead of being directed toward its restructuring and rehabilitation.No
other action may be taken in, including the rendition of judgment during the state of
suspension

what are automatically stayed orsuspended are the proceedings of an action or suit
and not just the payment of claims during the execution stage after the case had
become finalandexecutory.The suspension of action for claims against a corporation
under rehabilitation receiver or management committee embraces all phasesof the
suit, be it before the trial court or any tribunal or before this Court. Furthermore, the
actions that are suspended cover all claims against adistressed corporation whether
for damages founded on a breach of contract of carriage, labor cases, collection
suits or any other claims of apecuniary nature.
In the case at bar, the appellate courts pronouncement that in disallowing the
enforcement to the claim x xx it would unnecessarily
add to the burden of management, does not justify the aggravation caused in the
delay in execution of the judgment in favor o
f Zamora, is quite
myopic. In actual fact, allowing such actions to proceed would only increase the
work-load of the management committee or the rehabilitationreceiver, whose
precious time and effort would be dissipated and wasted in defending suits against
the corporation, instead of being channeledtoward restructuring and
rehabilitation.The instant petition is partially granted in that herein proceedings are
hereby suspended until further notice from this Court. Accordingly,petitioner
Philippine Airlines, Inc. is hereby directed to quarterly update the Court as to the
status of its ongoing rehabilitation

Consolidated Broadcasting System, Inc. v. Oberio,

et. al10
.,
G.R. No. 168424, June 8, 2007
FACTS:

The respondents are allegedly employed as drama talents by DYWB-BomboRadyo, a

radio station owned and operated by petitioner Consolidated Broadcasting System,
Inc.

However, there was an issue raised which opposed by therespondents that sought
respondents to file a case before DOLE.

DOLE after its inspection of DYWB station found out that the petitioner is guilty of
violation of labor standard laws, such as underpayment of wages, 13
th
month pay, non-payment of service incentive leave pay,and non-coverage of
respondents under the Social Security System.

The petitioners on the other hand argued that the respondents are notthey
employees and refused to submit the payroll and daily timerecords to DOLE despite
the subpoena decustecum issued by theRegional Director.

Thereafter, the respondents were pressured by the petitioners by

barring them to report to their work. Hence, the illegal dismissal wasfiled.

DOLE issued their order and certified the records of the case to NLRCif employeremployee relationship does exist. But respondentsappealed the order to the
secretary of labor.

The respondents filed an illegal dismissal, underpayment/non-paymentof wages and

benefits plus damages against petitioner. But it wasdismissed by the Labor Arbiter.

On respondents appealed to NLRC for determination of the existenceof employeremployee relationship, they submitted documents such astime cards, identification
cards, payroll, a show cause order of thestation manager to respondent Danny
Oberio and memoranda either noted or issued by said manager.
ISSUES:

Did respondents violate the rule on forum shopping?

Whether the NLRC correctly ruled on the merits of the case instead of remanding
the case to the Labor Arbiter.

Whether respondent

s were employees of petitioner.

Whether
respondents
dismissal was illegal.
RULING:

No because it is the law itself which provides for two separate remediesfor their
distinct causes of action. According to Article under Article 217 of the Labor Code,
termination cases fall under the jurisdiction of Labor Arbiters. Whereas, Article 128
of the same Code vests the Secretary of Labor or his duly authorized
representatives with the power to inspect the

employers records to determine and compel compliance with labor

standard laws. The exercise of the said power by the Secretary or hisduly authorized
representatives is exclusive to cases where employer-employee relationship still

exists. Thus, in cases where the complaint for violation of labor standard laws
preceded the termination of the employeeand the filing of the illegal dismissal case,
it would not be in consonancewith justice to charge the complainants with engaging
in forum shoppingwhen the remedy available to them at the time their causes of
action arosewas to file separate cases before different
fora
.

Yes, it must be stressed that labor tribunals are not bound by technicalrules and the
Court would sustain the expedient disposition of cases solong as the parties are not
denied due process. Indeed, no such denialexists because it had all the
opportunities to present evidence before thelabor tribunals below, the Court of
Appeals, and even before this Court,but chose not to do so for reasons which will
not warrant the sacrifice of substantial justice over technicalities.

Yes, the respondents passed the four

fold test on em
ployer-employeerelations, namely: (1) the selection and engagement of the
employee, or the power to hire; (2) the payment of wages; (3) the power to dismiss;
and(4) the power to control the employee.

Yes. In labor cases, the employer has the burden of proving that thedismissal was
for a just cause; failure to show this would necessarilymean that the dismissal was
unjustified and, therefore, illegal. In this case,the petitioner therefore failed to
discharge its burden, hence, respondentswere correctly declared to have been
illegally dismissed.
PHILIPPINE AIRLINES vs. PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION

11

[525 SCRA 29 June 19, 2007]

Facts:
The present petition arose from a labor complaint filed by respondent PALEA against
petitioners PAL and one Mary Anne delRosario, Director of Personnel of petitioner
PAL, on 1 March 1989. The labor complaint charged both petitioners with unfair
labor practice forthe alleged nonpayment of the 13th month pay of petitioner PALs e

mployees who had not been regularized as of the 30 of April 1988, allegedlyin
contravention of the Collective Bargaining Agreement (CBA) entered into by
petitioner PAL and respondent PALEA.On 6 February 1987, petitioner PAL and
respondent PALEA entered into a CBA covering the period of 1986-1989.Respondent
PALEA assailed the implementation of the guideline on the ground that all
employees of PAL, regular or non-regular,must be paid their 13th month pay. In fact,
in a letter dated 16 December 1988, respondent PALEA, through Herbert C.
Baldovinoinformedpetitioner PAL that there were several employees who failed to
receive their 13th Month Pay as of the date of the correspondence.In response
thereto, petitioner PAL informed respondent PALEA that rank and file employees
who were regularized after 30 April1988 were not entitled to the 13th month pay as
they were already given their Christmas bonuses on 9 December 1988 per the
ImplementingRules of Presidential Decree No. 851.Disagreeing with petitioner PAL,
respondent PALEA filed a labor complaint for unfair labor practice against petitioner
PAL before
the NLRC on 1 March 1989. The complaint interposed that the cut
-off period for regularization should not be used as the parameter for granting13th
m
onth pay considering that the law does not distinguish the status of employment
instead the law covers all employees.
In its Position Paper submitted before the Labor Arbiter, petitioner PAL countered
that those rank and file employees who were notregularized by 30 April of a
particular year are, in principle, not denied their 13th month pay considering they
receive said mandatory bonus inthe form of the Christmas Bonus; that the
Christmas Bonus given to all its employees is deemed a compliance with
Presidential Decree No. 851
and the latters implementing rules; and that the foregoing has been the practice
formally adopted in previous CBAs as early
as 1970.
Issue:
Whether or not the Court of Appeals committed reversible error in affirming the
order of the NLRC for the payment of the 13th monthpay or mid-year bonus to its
employees regularized after 30 April 1988.
SC Ruling:
In a Resolution dated 19 June 2007, We resolved to suspend the proceedings of the
case at bar in view of the on-going rehabilitationof petitioner PAL as mandated by
the
Securities and Exchange Commission. On 28 September 2007, however, the SEC
issued an Order granting petitioner PALs request

toexit from rehabilitation after successfully stabilizing its financial operations.

Hence, the suspension earlier issued by this Court is hereby lifted,making the
present Petition ripe for resolution.A cursory reading of the 1986-1989 CBA of the
parties herein will instantly reveal that Art. I, Sec. 3 of said agreement made
itsprovision applicable to all employees in the bargaining unit. The particular section
specifically defined the scope of application of the CBA, thus:Section 3

Application. All the terms and conditions of employment of employees within the
bargaining unit are embodied in thisAgreement, and the same shall govern the
relationship between the Company and such employees. On the other hand, all such
benefitsand/or privileges as are not expressly provided for in this Agreement but
which are now being accorded in accordance with the PALPersonnel Policies and
Procedures Manual, shall be deemed also part and parcel of the terms and
conditions of employment, or of thisAgreement.

38
Without distinguishing between regular and non-regular employees. As succinctly
put by respondent PALEA in its Memorandum: Allemployees in PAL are entitled to
the same benefit as they are within the same collective bargaining unit and the
entitlement to such benefit spillsover to even non-union members.It is a well-settled
doctrine that the benefits of a CBA extend to the laborers and employees in the
collective bargaining unit, includingthose who do not belong to the chosen
bargaining labor organization. Otherwise, it would be a clear case of
discrimination.Hence, to be entitled to the benefits under the CBA, the employees
must be members of the bargaining unit, but not necessarily of the
labor organization designated as the bargaining agent. A bargaining unit has
been defined as a group of employees of a give
nemployer,comprised of all or less than all of the entire body of employees, which
the collective interest of all the employees, consistent with equity to theemployer,
indicates to be the best suited to serve the reciprocal rights and duties of the
parties under the collective bargaining provisions of thelaw. There is no showing
that the non-regular status of the concerned employees by said cut-off date
sufficiently distinguishes their interests fromthose of the regular employees so as to
exclude them from the collective bargaining unit and the benefits of the CBA.Having
ruled that the benefits provided by the subject CBA are applicable even to nonregular employees who belong to thebargaining unit concerned, the next and
crucial query to be addressed is whether the 13th month pay or mid- year bonus
can be equated to theChristmasbonus.As far as non-regular employees are
concerned, petitioner PAL alleges that their 13th month pay shall be the same as
their Christmasbonus and will be paid according to the terms governing the

latter.We do not agree. From the facts of the present Petition, it is crystal clear that
petitioner PAL is claiming an exemption from paymentof the 13th month pay or midyear bonus provided in the CBA under the guise of paying the Christmas bonus
which it claims to be the equivalentof the 13th month pay under Presidential Decree
No. 851.Presidential Decree No. 851 mandates that all employers must pay all their
employees receiving a basic salary of not more thanP1,000.00 a month, regardless
of the nature of the employment, a 13th month pay not later than 24 December of
every year.While employers already paying their employees a 13th month pay or
more in a calendar year or its equivalent at the time of theissuance of Presidential
Decree No. 851 are already exempted from the mandatory coverage of said law,
petitioner PAL cannot escape liability inthis case by virtue thereof.It must be
stressed that in the 1986-1989 CBA, petitioner PAL agreed to pay its employees 1)
the 13th month pay or the mid-yearbonus, and 2) the Christmas bonus. The 13th
month pay, guaranteed by Presidential Decree No. 851, is explicitly covered or
provided for as themid-year bonus in the CBA, while the Christmas bonus is
evidently and distinctly a separate benefit. Petitioner PAL may not be allowed to
brushoff said distinction, and unilaterally and arbitrarily declare that for non-regular
employees, their Christmas bonus is the same as or equivalent tothe 13th month
pay.Presidential Decree No. 851 mandates the payment of the 13th month pay to
uniformly provide the low-paid employees withadditional income. It but sets a
minimum requirement that employers must comply with. It does not intend,
however, to preclude the employersfrom voluntarily granting additional bonuses
that will benefit their employees. A bonus is an amount granted and paid to an
employee for hisindustry and loyalty which contributed to the success of the
employer's business and made possible the realization of profits. It is an act of
generosity of the employer for which the employee ought to be thankful and
grateful. It is also granted by an enlightened employer to spur theemployee to
greater efforts for the success of the business and realization of bigger profits. We
deem that the Christmas bonus in this case is of this nature, although, by virtue of
its incorporation into the CBA, it has become more than just an act of generosity on
the part of petitioner PAL,but a contractual obligation it has undertaken.The
inclusion of a provision for the continued payment of the Christmas bonus in the
1986-1989 CBA between respondent PALEA
and petitioner PAL contradicts the companys claim that the grant of such benefit
was intended to be credited as compliance w
ith the statutorymandate to give the 13th month pay. Memorandum Order No. 28,
extending Presidential Decree No. 851 to all employees regardless of theamount of
their monthly salaries, was issued on 13 August 1986. As early as said date,
therefore, petitioner PAL was already fully aware that itwas lawfully compelled to
accord all its employees a 13th month pay. Accordingly, if petitioner PAL truly
intended that the Christmas bonus be
treated as the equivalent of the 13th month pay required by law, then said
intention should have been expressly declared in
their 1986-1989CBA, or the separate provision therein on the Christmas bonus
should have been removed because it would only be superfluous.In the case under

consideration, the provision for the payment of the Christmas bonus, apart from the
13th month pay, wasincorporated into the 1986-1989 CBA between respondent
PALEA and petitioner PAL without any condition. The Christmas bonus, payable
inDecember of every year, is distinguished from the 13th month pay, due yearly
inMay, for which reason it was denominated as the mid-year bonus. Such being the
case, the only logical inference that could be derivedtherefrom is that petitioner PAL
intended to give the members of the bargaining unit, represented by respondent
PALEA, a Christmas bonus overand above its legally mandated obligation to grant
the 13th month pay.The non-regular rank and file employees of petitioner PAL as of
30 April 1988, are not actually seeking more benefits than what theother memberemployees of the same bargaining unit are already enjoying. They are only
requesting that all members of the bargaining unit betreated equally and afforded
the same privileges and benefits as agreed upon between respondent PALEA and
petitioner PAL in the CBA.A collective bargaining agreement refers to a negotiated
contract between a legitimate labor organization and the employer
concerningwages, hours of work and all other terms and conditions of employment
in a bargaining unit. As in all other contracts, the parties to a CBA mayestablish
such stipulations, clauses, terms and conditions as they may deem convenient,
provided these are not contrary to law, morals, goodcustoms, public order or public
policy. Thus, where the CBA is clear and unambiguous, it becomes the law between
the parties, and compliancetherewith is mandated by the express policy of the law

PERPETUAL HELP CREDIT COOPERATIVE, INC. (PHCCI) V.FABURADA12

FACTS:Private respondents Faburada et. al. filed a complaint

against PHCCI for illegal dismissal, premium pay, separation
pay,wage differential, moral damages and
attorneys fees. PHCCI filed a motion to dismiss on the ground
that noemployer
-employee relationship exists since privaterespondents are all
members
and
co-owners
of
thecooperative.
Also,
privaterespondents have not exhausted the remedies provided in
the coop by laws. PHCCI also filed a supplemental motion
todismissalledging that RA 6939, the Cooperative Development
Authority Law, requires conciliation or mediation within
thecooperative before a resort to judicial proceeding. 3.The Labor
Arbiter ruled in favor of the private respondents, holdingthat the
case is impressed with employer-employee relationship and that

the laws on cooperatives is subservient to theLabor Code. The

NLRC affirmed.
ISSUE: WON
employee.

private

respondent,

Faburada

was a

regular

HELD: YES. Art. 280, Labor Code comprehends 3 kinds of

employees: 1)REGULAR EMPLOYEES or those whose work
isnecessary or desirable to the usual business of the employer
2)PROJECT EMPLOYEES or those whoseemployment has beenfixed
for a specificproject or undertaking the completion ortermination
of which has been determined at the time of theengagement of
the employee or where the work or services to be performed is
seasonal in nature and the employment isfor the duration of the
season 3)CASUAL EMPLOYEES or those who are neither regular
nor project employees There are 2separate instances whereby it
can be determined that an employment is regular: 1)If the
particular activity performed bythe employee is necessary or
desirable in the usual business or trade of the employer 2)If the
employee has beenperforming the job for at least a year Private
respondents were rendering services necessary to the day-to-day
operationsof PHCCI. This alone qualified them as regular
employees. Moreover, all of them except one worked with PHCCI
for morethan 1 year. That Faburada worked only on a part-time
basis does not mean that he is not a regular employee .Regularity
ofemployment is not determined by the number of hours one
works but by the nature and length of time one has been inthat
particular job.
DOMONDON VS. NLRC 471 SCRA 559FACTS:13
Petitioner Roberto Domondon filed a complaint before the
Regional
Arbitration
Branch
of
the
NLRC
against
privaterespondent Van MellePhils., Inc. (VMPI) and its President
and General Manager, private respondent Niels H.B. Have. He
claimed illegaldismissal and prayed for reinstatement, payment of
full backwages inclusive of allowances, 14th month pay, sick and
vacation leaves, share inthe profits, moral and exemplary
damages and attorneys fees.

Endaya was transferred to China and was replaced by private

respondent Have. According to petitioner, respondent Have
immediately set aone-on-one meeting with him and requested his
courtesy resignation. Petitioner refused to resign and life got
difficult for him. His decisionswere always questioned by
private respondent Have. He was subjected to verbal abuse. His
competence was undermined by baseless andderogatory memos,
which lay the bases for his removal from the company. He also did
not receive his 14th month pay.
Private respondent Have informed petitioner that things would
get more difficult for him if he does not resign. Private respondent
Have offeredfinancial assistance if petitioner would leave
peacefully but the offer must be accepted immediately or it would
be withdrawn. Thus, petitionersigned a ready-made resignation
letter without deliberation and evaluation of the consequences.
Private respondents claimed that he voluntarily resigned.The
initial agreement of the parties was that petitioner would be
extended asoftlanding financial assistance in the amount
of P300,000.00 on top of his accrued benefits at the time of the
effectivity of his resignation.However, petitioner later changed his
mind. He requested that he be allowed to keep the car assigned
to him in lieu of the financial assistance.However, company policy
prohibits transfer of ownership of property without valuable
consideration. Thus, the parties agreed that petitionershall still be
extended the P300,000.00 financial support, which he shall use to
pay for the subject car.Private respondents made a counterclaim
involving the transfer of ownership of a company car to
petitioner. They maintain that he failedto pay for the car in
accordance with their agreement.
ISSUE:
WON Labor Arbiter has jurisdiction to hear and decide the
question on the transfer of ownership of the car assigned to
petitioner.
HELD: YES.

, the transfer of the ownership of the company car to petitioner is

connected with his resignation and arose out of the parties
employer -employee relations.
Accordingly, private respondents claim for damages falls within
the jurisdictionof the Labor Arbiter
Building Care Corporation VS Myrna Macaraeg14
RESPONDENT Myrna Macaraeg was employed as a security guard of petitioner Leopard Security and Investigation
Agency. Her complaint for illegal dismissal against the petitioner was dismissed by the labor arbiter for lack of merit.
Her appeal to the National Labor Relations Commission (NLRC) was likewise dismissed for having been filed out of
time.
The Court of Appeals (CA) reversed and set aside the decision of the NLRC. It held that rules of procedure should be
liberally applied and that the respondents appeal should be allowed and resolved on the merits despite having been
filed out of time.
Issue: iDid the CA err?
Ruling: Yes.
We must stress that the bare invocation of the interest of substantial justice line is not some magic wand that will
automatically compel the Supreme Court (SC) to suspend procedural rules. Procedural rules are not to be belittled,
let alone dismissed simply because their non-observance may have resulted in prejudice to a partys substantial
rights. Utter disregard of the rules cannot be justly rationalized by harping on the policy of liberal construction.
In this case, the justifications given by the CA for its liberality by choosing to overlook the belated filing of the appeal
are, the importance of the issue raised, i.e., whether respondent was illegally dismissed; and the belief that
respondent should be afforded the amplest opportunity for the proper and just determination of his cause, free from
the constraints of technicalities, considering that the belated filing of respondents appeal before the NLRC was the
fault of respondents former counsel.
Note, however, that neither respondent nor her former counsel gave any explanation or reason citing extraordinary
circumstances for her lawyers failure to abide by the rules for filing an appeal. Respondent merely insisted that she
had not been remiss in following up her case with said lawyer.
It is, however, an oft-repeated ruling that the negligence and mistakes of counsel bind the client. A departure from this
rule would bring about never-ending suits, so long as lawyers could allege their own fault or negligence to support the
clients case and obtain remedies and reliefs already lost by the operation of law. The only exception would be, where
the lawyers gross negligence would result in the grave injustice of depriving his client of the due process of law. In
this case, there was no such deprivation of due process. Respondent was able to fully present and argue her case
before the Labor Arbiter. She was accorded the opportunity to be heard. Her failure to appeal the Labor Arbiters
Decision cannot, therefore, be deemed as a deprivation of her right to due process.
x xx

Clearly, allowing an appeal, even if belatedly filed, should never be taken lightly. The judgment attains finality by the
lapse of the period for taking an appeal without such appeal or motion for reconsideration being filed. In Ocampo v.
Court of Appeals (Former Second Division), G.R. No. 174247, February 21, 2007, 516 SCRA 416, the Court
reiterated the basic rule that when a party to an original action fails to question an adverse judgment or decision by
not filing the proper remedy within the period prescribed by law, he loses the right to do so, and the judgment or
decision, as to him, becomes final and binding.
The decision of the Labor Arbiter, therefore, became final and executory as to respondent when she failed to file a
timely appeal therefrom. The importance of the concept of finality of judgment cannot be gainsaid. (Building Care
Corp., et. al. vs. Myrna Macaraeg, G.R. No. 198357, Dec. 10, 2012).

BORJA ESTATE AND/OR THE HEIRS OF MANUEL AND PAULA BORJA and ATTY.
MILA LAUIGAN IN HER CAPACITY AS THE ESTATE ADMINISTRATOR, petitioners,
vs.
SPOUSES ROTILLO BALLAD and ROSITA BALLAD, respondents. 15
FACTS: The case arose out of the complaint filed by private respondents Spouses Rotillo
and Rosita Ballad (Ballad spouses) against the Borjas for illegal dismissal, non payment of
13th month pay, separation pay, incentive pay, holiday and premiums pay plus differential
pay, and moral and exemplary damages with the Regional Arbitration Branch No. II of the
NLRC in Tuguegarao, Cagayan, on 8 June 1999.
The Ballad spouses had been employed as overseers of the Borja Estate by its owners, the
spouses Manuel Borja and Paula Borja, since 1972. Their appointment as such was later
made in writing per the certification of appointment.
As overseers, the Ballad spouses duties included the collection of owners share of the
harvest from the tenants and the delivery of such share to the estate administrator, as well
as to account for it. They also collected monthly rentals from the lessees of the apartment
and tendered the same to the administrator. They were tasked to oversee the lands and
buildings entrusted to them and were instructed to report any untoward incident or incidents
affecting said properties to the administrator. They were allegedly required to work all day
and night each week including Saturdays, Sundays and holidays.
For their compensation, the Ballad spouses received a monthly salary of P1,000.00 for both
of them, or P500.00 each. They were provided residential quarters plus food and traveling
allowances equivalent to twelve (12) cavans of shelled corn every crop harvest. In the year
1980, said salary was increased to P2,500.00 for each of them by Paula Borja when she

came from abroad. Until the time before their dismissal, the Ballad spouses received the
same amount.
The Ballad spouses further alleged that they were appointed as the attorney-in-fact of the
owners to represent the latter in courts and/or government offices in cases affecting the
titling of the Borjas unregistered lands, and to institute and prosecute recovery of
possession thereof, as well as in ejectment cases.
when the spouses Manuel and Paula Borja went to the United States of America, their
children Lumen, Leonora and Amelia succeeded to the ownership and management of the
Borja Estate. On 16 October 1986, the Ballad spouses claimed that Amelia or Mely, then
residing in Rochester, New York, wrote then administrator Mrs. Lim informing her that the
heirs had extended the services of the Ballad spouses and ordered Mrs. Lim to pay the
hospitalization expenses of Rotillo Ballad which accrued to Ten Thousand Pesos
(P10,000.00). It is also alleged that Mely had instructed Mrs. Lim to cause the registration of
the Ballad spouses as Social Security System (SSS) members so that in case any of the
latter gets sick, SSS will shoulder their medical expenses and not the Borjas.
Francisco Borja, brother of the late Manuel Borja, was appointed the new administrator, he
issued immediately a memorandum to all the tenants and lessees of the Borja Estate to
transact directly with him and to pay their monthly rentals to him or to his overseers, the
Ballad spouses. Francisco Borja allegedly promised to give the Ballad spouses their food
and traveling allowances aforestated but not the twelve (12) cavans per harvest which he
reduced to two (2) cavans per harvest. Francisco Borja also stopped giving the Ballad
spouses their allowances. For twenty-seven (27) years that the Ballad spouses were in the
employ of the Borjas they were purportedly not paid holiday pay, overtime pay, incentive
leave pay, premiums and restday pay, 13th month pay, aside from the underpayment of their
basic salary.
Ballad spouses alleged that Francisco Borja unceremoniously dismissed them and caused
this dismissal to be broadcast over the radio, which caused the former to suffer shock and
physical and mental injuries such as social humiliation, besmirched reputation, wounded
feelings, moral anxiety, health deterioration and sleepless nights.
Thus, the filing of a case against petitioners before the Labor Arbiter. The Borjas interposed
the defense that respondents had no cause of action against them because the latter were
not their employees. The Borjas insisted that the Ballad spouses were allowed to reside

within the premises of the Borja Estate only as a gesture of gratitude for Rosita Ballads
assistance in the registration of a parcel of land; and that they were merely utilized to do
some errands from time to time. As to the money claims, the Borjas claimed the defense of
prescription.
As aforestated, the Labor Arbiter ruled that the Ballad spouses had been illegally dismissed,
after concluding that they had been employees of the Borjas.
Borjas filed their appeal on 26 November 1999 before the NLRC together with a Motion for
Reduction of Bond. NLRC dismissed the petitioners Motion for Reduction of Bond.
Petitioners appeal was likewise dismissed in the same Resolution for failure to post a cash
or surety bond within the reglementary period.24 Petitioners Motion for Reconsideration
was also denied for lack of merit in another Resolution.
Petitioners elevated the case to the Court of Appeals by way of a special civil action of
certiorari. On 31 October 2001, the Court of Appeals affirmed the Resolutions of the NLRC
holding that the filing of a cash or surety bond is sine qua non to the perfection of appeal
from the labor monetarys award.
RULING: The appeal bond is required under Article 223 of the Labor Code which provides:
ART. 223. Appeal. Decisions, awards or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10) calendar days
from receipt of such decisions, awards, or orders. . . . In case of a judgment involving a
monetary award, an appeal by the employer may be perfected only upon the posting of a
cash or surety bond issued by a reputable bonding company duly accredited by the
Commission, in the amount equivalent to the monetary award in the judgment appealed
from.
Rule VI of the New Rules of Procedure of the NLRC implements this Article with its Sections
1, 3, 5, 6 and 7 providing pertinently as follows:
Section. 1. Periods of Appeal.- Decisions, awards, or orders of the Labor Arbiter and the
POEA Administrator shall be final and executory unless appealed to the Commission by any
or both parties within ten (10) calendar days from receipt of such decisions, awards or
orders of the Labor Arbiter or of the Administrator, and in case of a decision of the Regional

Director or his duly authorized Hearing Officer within five (5) calendar days from receipt of
such decisions, awards or orders . . .
Section 3. Requisites for Perfection of Appeal.(a) The appeal shall be filed within the
reglementary period as provided in Sec. 1 of this Rule; shall be under oath with proof of
payment of the required appeal fee and the posting of a cash or surety bond as provided in
Sec. 5 of this Rule; shall be accompanied by memorandum of appeal which shall state the
grounds relied upon and the arguments in support thereof; the relief prayed for; and a
statement of the date when the appellant received the appealed decision, order or award
and proof of service on the other party of such appeal.
A mere notice of appeal without complying with the other requisite aforestated shall not stop
the running of the period for perfecting an appeal.
Section 5. Appeal Fee. The appellant shall pay an appeal fee of One hundred (P100.00)
pesos to the Regional Arbitration Branch, Regional Office, or to the Philippine Overseas
Employment Administration and the official receipt of such payment shall be attached to the
records of the case.
Section 6. Bond. In case the decision of the Labor Arbiter, the Regional Director or his
duly authorized Hearing Officer involves a monetary award, an appeal by the employer shall
be perfected only upon the posting of a cash or surety bond, which shall be in effect until
final disposition of the case, issued by a reputable bonding company duly accredited by the
Commission or the Supreme Court in an amount equivalent to the monetary award,
exclusive of damages and attorneys fees.
The Commission may, in justifiable cases and upon Motion of the Appellant, reduce the
amount of the bond. The filing of the motion to reduce bond shall not stop the running of the
period to perfect appeal.
Section 7. No extension of Period.- No motion or request for extension of the period within
which to perfect an appeal shall be allowed.
Thus, it is clear from the foregoing that the appeal from any decision, award or order of the
Labor Arbiter to the NLRC shall be made within ten (10) calendar days from receipt of such
decision, award or order, and must be under oath, with proof of payment of the required
appeal fee accompanied by a memorandum of appeal. In case the decision of the Labor

Arbiter involves a monetary award, the appeal is deemed perfected only upon the posting of
a cash or surety bond also within ten (10) calendar days from receipt of such decision in an
amount equivalent to the monetary award.
Evidently, the posting of a cash or surety bond is mandatory. And the perfection of an
appeal in the manner and within the period prescribed by law is not only mandatory
butjurisdictional.39 To extend the period of the appeal is to delay the case, a
circumstance which would give the employer the chance to wear out the efforts and meager
resources of the worker to the point that the latter is constrained to give up for less than
what is due him.
The requirement that the employer post a cash or surety bond to perfect its/his appeal is
apparently intended to assure the workers that if they prevail in the case, they will receive
the money judgment in their favor upon the dismissal of the employers appeal. It was
intended to discourage employers from using an appeal to delay, or even evade, their
obligation to satisfy their employees just and lawful claims.42
In the case at bar, while the petitioners Appeal Memorandum and Motion for Reduction of
Bond, which was annexed thereto, were both filed on time,43 the appeal was not perfected
by reason of the late filing and deficiency of the amount of the bond for the monetary award
with no explanation offered for such delay and inadequacy.
Exceptions are not present in this case. Examples: the Supreme Court has allowed tardy
appeals in judicious cases, e.g., where the presence of any justifying circumstance
recognized by law, such as fraud, accident, mistake or excusable negligence, properly
vested the judge with discretion to approve or admit an appeal filed out of time; where on
equitable grounds, a belated appeal was allowed as the questioned decision was served
directly upon petitioner instead of her counsel of record who at the time was already
dead;45 where the counsel relied on the footnote of the notice of the decision of the labor
arbiter that the aggrieved party may appeal . . . within ten (10) working days; in order to
prevent a miscarriage of justice or unjust enrichment such as where the tardy appeal is from
a decision granting separation pay which was already granted in an earlier final decision; or
where there are special circumstances in the case combined with its legal merits or the
amount and the issue involved.
3RD ALERT SECURITY16

In a June 2012 decision, the Supreme Court affirms the decision of the NLRC relative to reinstatement
and payment of monetary benefits.
We do not see any grave abuse of discretion after a close examination of the petition and the
attached records where 3rd Alert insists that a copy of the manifestation on reinstatement had been
sent to the security guards counsel, the Supreme Court said.
In the absence of any attendant grave abuse of discretion, these findings are entitled not only to
respect, but to our final recognition in this appellate review. Since it was ruled that there had been no
notice of reinstatement sent to the security guard or his counsel, as also affirmed by the CA, we cannot
rule otherwise in the absence of any compelling evidence, the Supreme Court stressed.
This case started from an illegal dismissal complaint filed by a security guard against 3rd Alert.
The labor arbiter issued a decision that the security guards dismissal was illegal. 3rd Alert
appealed to the NLRC which affirmed the ruling of the labor arbiter. On appeal, the CA denied the
petition.
In the meantime, the NLRC issued an Entry of Judgment certifying that the NLRC resolution has
become final and executory. Thus, the security guard filed with the labor arbiter an ex-parte motion for
recomputation of back wages and an ex-parte motion for execution based on the recomputed back
wages.
The labor arbiter then issued a writ of execution to enforce the recomputed monetary awards.
3rd Alert appealed the recomputed amount stated in the writ of execution to the NLRC and
alleged that the writ was issued with grave abuse of discretion since there was already a notice of
reinstatement sent to the security guard.
The NLRC dismissed the appeal, ruling that 3rd Alert is guilty of bad faith since there was no
earnest effort to reinstate the security guard. The NLRC also ruled that there was no notice or
reinstatement sent to security guards counsel.
3rd Alert filed a petition for certiorari with the CA which found the petition without merit because
the security guard had not been reinstated either physically or in the payroll.
Article 223 of the Labor Code provides that in case there is an order of reinstatement, the
employer must admit the dismissed employee under the same terms and conditions, or merely
reinstate the employee in the payroll. The order shall be immediately executory. Thus, 3rd Alert cannot
escape liability by simply invoking that the security guard did not report for work. The law states that
the employer must still reinstate the employee in the payroll. Where reinstatement is no longer viable
as an option, separation pay equivalent to one (1) month salary for every year of service could be
awarded as an alternative.

Since the proceedings below indicate that 3rd Alert failed to adduce additional evidence to show
that it tried to reinstate the security guard, either physically or in the payroll, we adopt as correct the
finding that there was no earnest effort to reinstate the security guard. The CA was correct in affirming
the judgment of the NLRC in this regard.
The 3rd Alert resorted to legal tactics to frustrate the execution of the labor arbiters order; for
about four (4) years, it evaded the obligation to reinstate the security guard. By so doing, 3rd Alert has
made a mockery of justice, the Supreme Court said. (3rd Alert Security and Detective Services, Inc.
vs. Navia, G.R. No. 200653, June 13, 2012)
-oOo-

Agabon vs. NLRC Case Digest19

Jenny Agabon&VirgilioAgabon vs. NLRC
G.R. No.158693
November 17, 2004
Facts: Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling
and installing ornamental and construction materials. It employed petitioners VirgilioAgabon and
Jenny Agabon as gypsum board and cornice installers on January 2, 1992 until February 23, 1999
when they were dismissed for abandonment of work.
Petitioners then filed a complaint for illegal dismissal and payment of money claims and on
December 28, 1999, the Labor Arbiter rendered a decision declaring the dismissals illegal and
ordered private respondent to pay the monetary claims.
Issue: Whether or not respondents dismissal is illegal and if not, entitles them benefits.
Ruling: The Court ruled that the dismissal is legal and entitles them of payment of benefits.
Dismissals based on just causes contemplate acts or omissions attributable to the employee while
dismissals based on authorized causes involve grounds under the Labor Code which allow the
employer to terminate employees. A termination for an authorized cause requires payment of
separation pay. When the termination of employment is declared illegal, reinstatement and full back
wages are mandated under Article 279. If reinstatement is no longer possible where the dismissal
was unjust, separation pay may be granted.
Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give
the employee two written notices and a hearing or opportunity to be heard if requested by the
employee before terminating the employment: a notice specifying the grounds for which dismissal is
sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice
of the decision to dismiss; and (2) if the dismissal is based on authorized causes under Articles 283
and 284, the employer must give the employee and the Department of Labor and Employment
written notices 30 days prior to the effectivity of his separation.
From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause
under Article 282 of the Labor Code, for an authorized cause under Article 283, or for health reasons

under Article 284, and due process was observed; (2) the dismissal is without just or authorized
cause but due process was observed; (3) the dismissal is without just or authorized cause and there
was no due process; and (4) the dismissal is for just or authorized cause but due process was not
observed.
In the fourth situation, the dismissal should be upheld. While the procedural infirmity cannot be
cured, it should not invalidate the dismissal. However, the employer should be held liable for noncompliance with the procedural requirements of due process.
The present case squarely falls under the fourth situation. The dismissal should be upheld because
it was established that the petitioners abandoned their jobs to work for another company. Private
respondent, however, did not follow the notice requirements and instead argued that sending notices
to the last known addresses would have been useless because they did not reside there anymore.
Unfortunately for the private respondent, this is not a valid excuse because the law mandates the
twin notice requirements to the employees last known address. Thus, it should be held liable for
non-compliance with the procedural requirements of due process.
The Court ruled that respondent is liable for petitioners holiday pay, service incentive leave pay and
13th month pay without deductions. The evident intention of Presidential Decree No. 851 is to grant
an additional income in the form of the 13th month pay to employees not already receiving the same
so as to further protect the level of real wages from the ravages of world-wide inflation. Clearly, as
additional income, the 13th month pay is included in the definition of wage under Article 97(f) of the
Labor Code.
An employer is prohibited under Article 113 of the same Code from making any deductions without
the employees knowledge and consent.
ABBOTT LABORATORIES 21
FACTS: ON FEB. 12, 2005, respondent Pearlie Ann F. Alcaraz signed an employment contract with petitioner Abbott
Laboratories, Philippines, which stated, inter alia, that she was to be placed on probation for six months, from Feb.
15, 2005 to Aug. 14, 2005. On May 23, 2005, the respondent received a letter from petitioners stating that her
services had been terminated effective May 19, 2005, because she failed to meet the regularization standards for the
position of regulatory affairs manager. The respondent filed a complaint for illegal dismissal and damages against
petitioner Abbott and its officers. She contended that she should have already been considered as a regular
employee because the petitioners had failed to inform her of the reasonable standards for her regularization upon her
engagement as required under Article 295 of the Labor Code. Does this find merit?
Ruling: No.
Basic knowledge and common sense dictate that the adequate performance of ones duties is, by and of itself, an
inherent and implied standard for a probationary employee to be regularized; such is a regularization standard that
need not be literally spelled out or mapped into technical indicators in every case. In this regard, it must be observed
that the assessment of adequate duty performance is in the nature of a management prerogative, which when
reasonably exercisedas Abbott did in this caseshould be respected.
The Supreme Court ruled that Alcarazs status as a probationary employee and her consequent dismissal must
stand. Consequently, in holding that Alcaraz was illegally dismissed due to her status as a regular and not a
probationary employee, the court finds that the National Labor Relations Commission (NLRC) committed a grave
abuse of discretion. The NLRC based its decision on the premise that Alcarazs receipt of her job description and

Abbotts Code of Conduct and Performance Modules was not equivalent to being actually informed of the
performance standards upon which she should have been evaluated on. It, however, overlooked the legal implication
of the other attendant circumstances as detailed herein, which should have warranted a contrary finding that Alcaraz
was indeed a probationary and not a regular employeemore particularly the fact that she was well aware of her
duties and responsibilities and that her failure to adequately perform would lead to her non-regularization.

UNIVERSAL ROBINA VS FERDINAND ACIBO23

PETITIONER Universal Robina Sugar Milling Corp. (URSUMCO) is engaged in the sugarcane milling business.
Respondents Ferdinand Acibo and 21 others were hired by the petitioner on various dates, in different capacities. At
the start of their engagements, they signed contracts of employment for a period of one month or for a given season.
URSUMCO repeatedly hired them to perform the same duties and for every engagement required them to sign new
employment contracts for the same duration.
Last Oct. 23, 2002, the respondents filed before the labor arbiter complaints for regularization, entitlement to the
benefits under the Collective Bargaining Agreement (CBA) and attorneys fees. The labor arbiter (LA) dismissed the
complaint for lack of merit.
The National Labor Relations Commission (NLRC) reversed the LAs ruling and declared respondents as regular
URSUMCO employees and granted their monetary claims under the CBA. The Court of Appeals (CA) affirmed the
NLRCs ruling finding respondents to be regular employees of URSUMCO but deleted the grant of monetary benefits
under the CBA. Did the CA err?
The Supreme Court (Second Division) ruling: Yes.
Under the system, the plantation workers or the mill employees do not work continuously for one whole year but only
for the duration of the growing of the sugarcane or the milling season. Their seasonal work, however, does not detract
from considering them in regular employment since in a litany of cases, this Court has already settled that seasonal
workers who are called to work from time to time and are temporarily laid off during the offseason are not separated
from the service in said period, but are merely considered on leave until reemployment. Be this as it may, regular
seasonal employees, like the respondents in this case, should not be confused with the regular employees of the
sugar mill such as the administrative or office personnel who perform their tasks for the entire year regardless of the
season. The NLRC, therefore, gravely erred when it declared the respondents regular employees of URSUMCO
without qualification and that they were entitled to the benefits granted, under the CBA, to URSUMCOS regular
employees.
x xx
We find that the CA grossly misread the NLRC ruling and missed the implications of the respondents regularization.
To reiterate, the respondents are regular seasonal employees, as the CA itself opined when it declared that private
respondents who are regular workers with respect to their seasonal tasks or activities and while such activities exist,
cannot automatically be governed by the CBA between petitioner URSUMCO and the authorized bargaining
representative of the regular and permanent employees. Citing jurisprudential standards, it then proceeded to
explain that the respondents cannot be lumped with the regular employees due to the differences in the nature of
their duties and the duration of their work visavis the operations of the company. The NLRC was well aware of
these distinctions as it acknowledged that the respondents worked only during the milling season, yet it ignored the
distinctions and declared them regular employees, a marked departure from existing jurisprudence.

This, to us, is grave abuse of discretion, as it gave no reason for disturbing the system of regular seasonal
employment already in place in the sugar industry and other industries with similar seasonal operations. For
upholding the NLRCs flawed decision on the respondents employment status, the CA committed a reversible error of
judgment (Universal Robina Sugar Milling Corp. and Rene Cabati vs. Ferdinand Acibo, et. al., G.R. No. 186439, Jan.
15, 2014).

Maraguinot vs. NLRC Case Digest

26

Maraguinot v. NLRCFACTS:

Petitioner maintains that he was employed by respondents as part of the

filming crew. He was laterpromoted as an electrician. Petitioners tasks
contained of loading movie equipment in the shoothingarea.Petitioners
sought the assistance of their supervisor, Cesario, to facilitate their request
that respondentsadjusttheir salary in accordance with the minimum wage
law. Mrs. Cesario informed petitioners that del Rosario wouldagree to
increase their salary only if they signed a blank employment contract. As
petitioner refused to sign,respondents forced Enero (the other petitioner who
worked as a crew member) to go on leave. However, when hereported to
work, respondent refused to take him back. Maraguinot was dropped from
the company payroll butwhen he returned, he was again asked to sign a
blank employment contract, and when he still refused,respondents
terminated his services. Petitioners thus sued for illegal dismissal.Private
respondents assert that they contract persons called producers to produce or
make movies forprivate respondents and contend that petitioners are project
employees of the associate producers, who act asindependent contractors.
Thus, there is no ER-EE relationship.However, petitioners cited that their
performance of activities is necessary in the usual trade or business of
respondents and their work in continuous.
ISSUE:
W/N ER-EE relationship exists
HELD:
Yes.With regards to VIVAs contention that it does not make movies but
merely distributes motion pictures,there is no sufficient proof to prove this
contention.In respect to respondents allegation that petitioners are project

employees, it is a settled rule that thecontracting out of labor is allowed only

in case of job contracting. However, assuming that the associate
producersare job contactors, they must then be engaged in the business of
making motion pictures. Associate producersmust have tools necessary to
make motion pictures. However, the associate producers in this case have
none of these. The movie-making equipment are supplied to the producers
and owned by VIVA. Thus, it is clear that theassociate producer merely leases
the equipment from VIVA.In addition, the associate producers of VIVA cannot
be considered labor-only contractors as they did notsupply, recruit nor hire
the workers. It was Cesario, the Shooting Supervisor of VIVA, who recruited
crew members. Thus, the relationship between VIVA and its producers or
associate producers seems to be that of agency.With regards to the issue of
illegal dismissal, petitioners assert that they were regular employees who
wereillegally dismissed. Petitioners in this case had already attained the
status of regular employees in view of VIVAsconduct. Thus, petitioners are
entitled to back wages.A project employee or a member of a work pool may
acquire the status of a regular employee when:a.there is a continuous
rehiring of project employees even after a cessation of projectb.the tasks
performed by the alleged project employee are vital and necessary to the
business of employer The tasks of petitioners in loading movie equipment
and returning it to VIVAs warehouse and fixing thelighting system were vital,
necessary and indispensable to the usual business or trade of the
employer.Wherefore, petition is granted.

CHUA QUA vs. CLAVE27

G.R. No. L-49549 August 30, 1990

FACTS OF THE CASE:

The case was about an affair and marriage of 30 years old teacher Evelyn
Chua in Tay Tung High School in Bacolod City to her 16 years old student. The
petitioner teacher was suspended without pay and was terminated of his
employment for Abusive and Unethical Conduct Unbecoming of a Dignified
School Teacher which was filed by a public respondent as a clearance for
termination.

ISSUE:

Was her dismissal valid?

Whether or not there is substantial evidence to prove that the antecedent
facts which culminated in the marriage between petitioner and her student
constitute immorality and or grave misconduct?

SUPREME COURT RULING:

The Supreme Court declared the dismissal illegal saying:

If the two eventually fell in love despite the disparity in their ages and
academic level, this only leads to the truism that the heart has reason of its
own which reason does not know.
Finding that there is no substantial evidence of the imputed immoral acts, it
follows that the alleged violation of Code of Ethics governing school teachers
would have no basis. Private respondent utterly failed to show that petitioner
took advantage of her position to court her student. The deviation of the
circumstances of their marriage from the usual societal pattern cannot be
considered as a defiance of contemporary social mores.

KASAPIAN NG MALAYANG MANGGAGAWA SA COCA-COLA vs. CA and COCACOLA BOTTLERS PHILS.,31

FACTS:
June 1998, the Contract Bargaining Agreement for the years 1995-1998 executed
betweenpetitioner union and private respondent company expired.
Petitioner then submitted its demands to the company for another round of
collectivebargaining negotiations.
After having some labor disputes, on 26 December 1998, both parties executed
and signed aMOA providing for salary increases and other economic and noneconomic benefits.
It likewise contained a provision for the regularization of contractual, casual
and/or agencyworkers who have been working with private respondent for more
than one year.
Pursuant to the provisions of the MOA, both parties identified 64 vacant regular
positions thatmay be occupied by the existing casual, contractual or agency
employees who have been in thecompany for more than one year.

Then, 61 employees passed the screening and extended regular employment

status.
Consequently, petitioners demanded the payment of salary and other benefits to
the newlyregularized employees retroactive to 1 December 1998, in accord with the
MOA.
However, the private respondent refused to yield the said demands contending
that the date of effectivity of the regularization of said employees were 1 May 1999
and 1 October 1999.
Thus, petitioner filed a complaint before the NLRC for the alleged violations of the
subject MOAby the private respondent.
On 9 December 1999, private respondent closed its Manila and Antipolo plants.
NLRC dismissed the complaint. It stated that: Under MOA, the 61 regularized
employees are notentitled to their claims only the employees who were regular in
July 1998 and continued beingsuch upon the signing of the MOA on December 26,
1998 deserve retroactive payment. Sincethe 61 regularized employees were
regularized only on May 1, 1999 and October 1, 1999, theyhave no right to claim
entitlement to the MOA benefits.
ISSUE:
WON CCBP violated the terms and conditions contained in the MOA dated 26
December 1998 when itdid not recognize the regularization of the 61 employees as
effective on 1 December 1998?
RULING:
Private respondent violated the provision of the MOA when it did not consider the
regularization of the61 employees effective 1 December 1998, and accorded to
them the full benefits of the MOA.According to the pertinent provision of the MOA:1.
Non-regular employee (casual, contractual or agency worker) who has already
served the companyand is presently occupying or has occupied the position to be
filled-up for at least one (1) year shall begiven priority in filling-up the position by
converting his non-regular employment status to regularemployment status, eff
ective 01 December 1998 without need of undergoing through the companys
regular recruitment procedures such as interview and qualifying examination.It is
erroneous for the NLRC to conclude that the regularization of the 61 employees
does not retroact toDecember 1, 1998.We hold that the effectivity date of the
regularization of the 61 employees was on December 1, 1998.

As stated in the MOA, only those who have worked with the company for one year
as of 1 December1998 and are still working for the company as of the signing of the
MOA, will be considered forregularization.Evidently, it is erroneous for the NLRC to
conclude that extending to them the benefits of the MOAwould violate the principle

of "no-work-no-pay" as they are actually rendering service to the companyeven

before December 1, 1998, and continued to do so. They were accorded the status of
regularemployees because they were rendering service to the company for the
required period.Hence, even without the subject MOA provision, the 61 employees
must be extended regularemployment status after the lapse of one year. All those
who have been with the company for one yearby said date must automatically be
considered regular employees by operation of law.

PHILIPPINE SKYLANDERS, INC., MARILES C. ROMULO and FRANCISCO

DAKILA,petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, LABOR
ARBITER EMERSON TUMANON, PHILIPPINE ASSOCIATION OF FREE LABOR
UNIONS (PAFLU) SEPTEMBER (now UNIFIED PAFLU) and SERAFIN
AYROSO,respondents32
FACTS: November 1993 the Philippine Skylanders Employees Association (PSEA), a local
labor union affiliated with the Philippine Association of Free Labor Unions (PAFLU)
September (PAFLU), won in the certification election conducted among the rank and file
employees of Philippine Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders
Employees Association-WATU (PSEA-WATU) immediately protested the result of the
election before the Secretary of Labor.
settlement of the controversy, PSEA sent PAFLU a notice of disaffiliation citing as reason
PAFLUs supposed deliberate and habitual dereliction of duty toward its members. Attached
to the notice was a copy of the resolution adopted and signed by the officers and members
of PSEA authorizing their local union to disaffiliate from its mother federation.
PSEA subsequently affiliated itself with the National Congress of Workers (NCW), changed
its name to Philippine Skylanders Employees Association -National Congress of Workers
(PSEA-NCW), and to maintain continuity within the organization, allowed the former officers
of PSEA-PAFLU to continue occupying their positions as elected officers in the newly-forged
PSEA-NCW.
17 March 1994 PSEA-NCW entered into a collective bargaining agreement with PSI which
was immediately registered with the Department of Labor and Employment.
PAFLU requested for the accounting. PSI through its personnel manager Francisco Dakila
denied the request.

PAFLU through SerafinAyroso filed a complaint for unfair labor practice against PSI, its
president Mariles Romulo and personnel manager Francisco Dakila. PAFLU alleged that
aside from PSIs refusal to bargain collectively with its workers, the company through its
president and personnel manager, was also liable for interfering with its employees union
activities
Ayroso filed another complaint in behalf of PAFLU for unfair labor practice against Francisco
Dakila. Through Ayroso PAFLU claimed that Dakila was present in PSEAs organizational
meeting thereby confirming his illicit participation in union activities. Ayroso added that the
members of the local union had unwittingly fallen into the manipulative machinations of PSI
and were lured into endorsing a collective bargaining agreement which was detrimental to
their interests.
PAFLU amended its complaint by including the elected officers of PSEA-PAFLU as
additional party respondents. PAFLU averred that the local officers of PSEA-PAFLU, namely
MacarioCabanias, PepitoRodillas, Sharon Castillo, DaniloCarbonel, Manuel Eda, Rolando
Felix, Jocelyn Fronda, Ricardo Lumba, Joseph Mirasol, NerisaMortel, TeofiloQuirong,
Leonardo Reyes, Manuel Cadiente, and HerminiaRiosa, were equally guilty of unfair labor
practice since they brazenly allowed themselves to be manipulated and influenced by
petitioner Francisco Dakila.
Dakila moved for the dismissal of the complaint on the ground that the issue of disaffiliation
was an inter-union conflict which lay beyond the jurisdiction of the Labor Arbiter. PSEA was
no longer affiliated with PAFLU, Ayroso or PAFLU for that matter had no personality to file
the instant complaint.
Labor Arbiter declared PSEAs disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU
and their respective officers guilty of unfair labor practice.
As PSEA-NCWs personality was not accorded recognition, its collective bargaining
agreement with PSI was struck down for being invalid.
PSI, PSEA and their respective officers appealed to the National Labor Relations
Commission (NLRC). But the NLRC upheld the Decision ofthe Labor Arbiter.
RULING: right of local unions to separate from their mother federation on the ground that as
separate and voluntary associations, local unions do not owe their creation and existence to

the national federation to which they areaffiliated but, instead, to the will of their members.
The sole essence of affiliation is to increase, by collective action, the common bargaining
power of local unions for the effective enhancement and protection of their interests.
Admittedly, there aretimes when without succor and support local unions may find it hard,
unaided by other support groups, to secure justice for themselves. Yet the local unions
remain the basic units of association, free to serve their own interests subject to the
restraints imposed by the constitution and by-laws of the national federation, and free also
to renounce the affiliation upon the terms laid down in the agreement which brought such
affiliation into existence.
nothing shown in the records nor is it claimed by PAFLU that the local union was expressly
forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid
breakaway. As such, the pendency of an election protest involving both the mother
federation and the local union did not constitute a bar to a valid disaffiliation. Neither was it
disputed by PAFLU that 111 signatories out of the 120 members of the local union, or an
equivalent of 92.5% of the total union membership supported the claim of disaffiliation and
had in fact disauthorized PAFLU from instituting any complaint in their behalf.
It was entirely reasonable then for PSI to enter into a collective bargaining agreement with
PSEA-NCW. As PSEA had validly severed itself from PAFLU, there would be no restrictions
which could validly hinder it from subsequently affiliating with NCW and entering into a
collective bargaining agreement in behalf of its members.
The mere act of disaffiliation did not divest PSEA of its own personality; neither did it give
PAFLU the license to act independently of the local union.