WEEK 6 LIST OF LABOR LAW CASES

1. (Manila Water v. Rosario, G.R. No. 188747, January 29, 2014)

MANILA WATER COMPANY, Petitioner,
vs.
CARLITO DEL ROSARIO, Respondent.
PRINCIPLE:
The grant of separation pay to a dismissed employee is determined by the
cause of the dismissal. The years of service may determine how much
separation pay may be awarded. It is, however, not the reason why such pay
should be granted at all.
FACTS:

Del Rosario was employed as Instrument Technician by Metropolitan

Waterworks and Sewerage System (MWSS). MWSS was reorganized
pursuant to Republic Act No. 8041 or the National Water Crisis Act of
1995, and its implementing guidelines Executive Order No. 286.
Because of the reorganization, Manila Water absorbed some employees of
MWSS including Del Rosario.
Manila Water discovered that 24 water meters were missing in its
stockroom. Upon initial investigation, it appeared that Del Rosario and his
co-employee, Danilo Manguera, were involved in the pilferage and the
sale of water meters to the companys contractor.
When Del Rosario was directed to explain, he confessed his involvement in
the act charged and pleaded for forgiveness, promising not to commit
similar acts in the future.
During the formal investigation Del Rosario was found responsible for the
loss of the water meters and therefore liable for violating Section 11.1 of
the Companys Code of Conduct. Hence, the dismissal of Del Rosario from
employment.
This prompted Del Rosario to file an action for illegal dismissal claiming
that his severance from employment is without just cause. Del Rosario
averred in his position paper that his admission to the misconduct charged
was not voluntary but was coerced by the company. Such admission
therefore, made without the assistance of a counsel, could not be made
basis in terminating his employment.
Manila Water answered and pointed out that he was involved in the taking
of the water meters from the companys stock room and of selling these
to a private contractor for personal gain. Invoking Section 11.1 of the
Companys Code of Conduct, Manila Water averred that such act of
stealing the companys property is punishable by dismissal. They further
averred that Del Rosario himself confessed his involvement to the loss of

the water meters not only in his letter-explanation, but also during the
formal investigation, and in both instances, pleaded for his employers
forgiveness.
**Labor Arbiter - dismissing for lack of merit the complaint filed by Del Rosario
who was, however, awarded separation pay. According to the Labor Arbiter, Del
Rosarios length of service for 21 years, without previous derogatory record,
warrants the award of separation pay.
----------- **Separation pay equivalent to one-half (1/2) months salary for every
year of service based on his basic salary Php 11,244.00 at the time of his
dismissal. This shall be computed from [1 August 1997] up to June 2000, the
total amount of which is Php 118,062.00.
**Manila Waters filed a MR to NLRC however, it is denied.
**CA affirmed the granting of Separation Pay by the Labor Arbiter
ISSUE:
WON Respondent Del Rosario is entitled for Separation Pay
RULING:
No. As a general rule, an employee who has been dismissed for any of
the just causes enumerated under Article 282 of the Labor Code is not entitled to
a separation pay. However, in exceptional cases, separation pay has been
granted to a legally dismissed employee as an act of social justice or on
equitable grounds. In either case, it is required that the dismissal (1) was not
for serious misconduct; and (2) did not reflect on the moral character of the
employee.
Citing the leading case of PLDT v. NLRC (247 Phil. 641, 1988), the
Supreme Court laid down the rule that separation pay shall be allowed as a
measure of social justice only in the instances where the employee is validly
dismissed for causes other than serious misconduct reflecting his moral
character
In subsequent cases, the high tribunal expanded the exclusions and
elucidated that separation pay shall be allowed as a measure of social justice
only in instances where the employee is validly dismissed for causes other than
serious misconduct, willful disobedience, gross and habituals neglect of duty,
fraud or willful breach of trust, commission of a crime against the employer or
his family, or those reflecting on his moral character
Although long years of service might generally be considered for the
award of separation benefits or some form of financial assistance to mitigate the
effects of termination, this case is not the appropriate instance for generosity
under the Labor Code nor under our prior decisions. The fact that private
respondent served petitioner for more than twenty years with no negative record

prior to his dismissal, in our view of this case, does not call for such award of
benefits, since his violation reflects a regrettable lack of loyalty and worse,
betrayal of the company. If an employee's length of service is to be regarded as
a justification for moderating the penalty of dismissal, such gesture will actually
become a prize for disloyalty, distorting the meaning of social justice and
undermining the efforts of labor to cleanse its ranks of undesirables.
The grant of separation pay to a dismissed employee is determined by the
cause of the dismissal. The years of service may determine how much
separation pay may be awarded. It is, however, not the reason why such pay
should be granted at all.
In sum, we hold that the award of separation pay or any other kind of
financial assistance to Del Rosario, under the nomenclature of compassionate
justice, is not warranted in the instant case. A contrary rule would have the
effect of rewarding rather than punishing an erring employee, disturbing the
noble concept of social justice.
2. G.R. No.170904

November 13, 2013

BANI RURAL BANK INC. ENOC THEATER I AND II and/or RAFAEL DE

GUZMAN, Petitioners,
vs.
TERESA DE GUZMAN, EDGAR C. TAN and TERESA G. TAN, Respondents.
FACTS:
The respondents were employees of Bani Rural Bank, Inc. and ENOC Theatre I
and II who filed a complaint for illegal dismissal against the petitioners.
The complaint was initially dismissed by Labor Arbiter but on appeal, the
National Labor Relations Commission (NLRC) reversed it and ruled that the
respondents had been illegally dismissed and ordered the petitioners to reinstate
them with payment of backwages from the time o their dismissal (constructive)
until their actual reinstatement, less earnings elsewhere.
The first computation of the monetary award under the March, 17 1995
resolution of the NLRC, the LA fixed the period of backwages from the
respondents' illegal dismissal until August 25 1995 or the date when the
respondents allegedly manifested that they no longer wanted to be reinstated.
The respondents appealed the LAs computation with the NLRC. On July 31,
1998, the NLRC modified the terms of the March 17, 1995 resolution insofar as it
clarified the phrase less earnings elsewhere. The NLRC additionally awarded the
payment of separation pay, in lieu of reinstatement, under the following terms:

The NLRC justified the award of separation pay on account of the strained
relations between the parties. In doing so, the NLRC ruled:
The second computation of the monetary awards under the July 31, 998 decision
of the NLRC. In an order11 dated July 12, 2000, Labor Arbiter Gambito computed
the respondents backwages only up to August 25, 1995.
NLRCS RULING
In its decision dated September 28, 2001, the NLRC ruled that the computation
of the respondents backwages should be until January 29 1999 which was the
date when the July 31, 1998 decision attained finality.
CA RULING
The CA echoed the NLRCs conclusions.
ISSUE
Whether the respondents backwages had been correctly computed under the
decision dated September 28, 2001 of the NLRC, as confirmed by the CA, in light
of the circumstance that there were two final NLRC decisions affecting the
computation of the backwages.

RULING
YES.
The computation of backwages depends on the final awards adjudged as a
consequence of illegal dismissal, in that:
First, when reinstatement is ordered, the general concept under Article 279 of
the Labor Code, as amended, computes the backwages from the time of
dismissal until the employees reinstatement. The computation of backwages
(and similar benefits considered part of the backwages) can even continue
beyond the decision of the labor arbiter or NLRC and ends only when the
employee is actually reinstated.42
Second, when separation pay is ordered in lieu of reinstatement (in the event
that this aspect of the case is disputed) or reinstatement is waived by the
employee (in the event that the payment of separation pay, in lieu, is not

disputed), backwages is computed from the time of dismissal until the finality of
the decision ordering separation pay.
Third, when separation pay is ordered after the finality of the decision ordering
the reinstatement by reason of a supervening event that makes the award of
reinstatement no longer possible (as in the case), backwages is computed from
the time of dismissal until the finality of the decision ordering separation pay.
The above computation of backwages, when separation pay is ordered, has been
the Court s consistent ruling. In Session Delights Ice Cream and Fast Foods v.
Court Appeals Sixth Division, we explained that the finality of the decision
becomes the reckoning point because in allowing separation pay, the final
decision effectively declares that the employment relationship ended so that
separation pay and backwages are to be computed up to that point. 43
RESPONDENTS BACKWAGES
As the records show, the contending parties did not dispute the NLRC s order of
separation pay that replaced the award of reinstatement on the ground of the
supervening event arising from the newly-discovered strained relations between
the parties.
Under these circumstances, while there was no express modification on the
period for computing backwages stated in the dispositive portion of the July 31,
1998 decision of the NLRC, it is nevertheless clear that the award of
reinstatement under the March 17, 1995 resolution (to which the respondents
backwages was initially supposed to have been computed) was substituted by
an award of separation pay. As earlier stated, the awards of reinstatement and
separation pay are exclusive remedies; the change of awards (from
reinstatement to separation pay) under the NLRC s July 31, 1998 not only
modified the awards granted, but also changed the manner the respondents
backwages is to be computed. The respondents backwages can no longer be
computed up to the point of reinstatement as there is no longer any award of
reinstatement to speak of.
3. PAL v. NLRC, G.R. No. 123294, October 20, 2010

CEDRIC
CEDRIC

4. Solidbank v. NLRC, G.R. No. 165951, March 30, 2010

The award of financial assistance is bereft of legal basis and serves to penalize
petitioner who had complied with the requirements of the law. The Court also
point out that petitioner may, as it has done, grant on a voluntary and ex
gratia basis, any amount more than what is required by the law, but to insist
that more financial assistance be given is certainly something that the Court
cannot countenance. Moreover, any award of additional financial assistance to
respondents would put them at an advantage and in a better position than the
rest of their co-employees who similarly lost their employment because of
petitioners decision to cease its operations.
FACTS: Sometime in May 2000, petitioner decided to cease its commercial
banking operations and forthwith surrendered to the Bangko Central ng
Pilipinas its expanded banking license. As a result of petitioners decision to
cease its operations, 1,867 of its employees would be terminated.
On July 25, 2000, petitioner sent individual letters to its employees, including
respondents, advising them of its decision to cease operations and informing
them that their employment would be terminated
On July 31, 2000, petitioner sent to the Department of Labor and Employment a
letter[5] dated July 28, 2000, informing said office of the termination of its
employees and at the same time informing them that they would be giving a
separation package. The separation package offered to Solidbankers is
more than what is required by law.
Petitioner granted to its employees separation pay equivalent to 150% of gross
monthly pay per year of service, and cash equivalent of earned and accrued
vacation and sick leaves as a result of their dismissal. Upon receipt of their
separation pay, the employees of petitioner, including respondents, individually
signed a Release, Waiver, and Quitclaim.
On September 27, 2000, respondents filed with the Labor Arbiter (LA) complaints
for illegal dismissal, underpayment of separation pay, plus damages and
attorneys fees, and these were docketed as NLRC NCR Case Nos. 30-09-0384300, 30-1004350-00, 30-10-03928-00, 30-10-04200-00, and 30-10-04036-00.
On July 22, 2002, the LA rendered a Decision ruling that respondents were
validly terminated from employment as a result of petitioners decision to cease
its banking operations. The LA, however, inspired by compassionate justice,
awarded financial assistance of one months salary to respondents. The
dispositive portion of the Decision.
Both parties appealed the LAs Decision to the National Labor Relations
Commission (NLRC).
On October 29, 2002, the NLRC rendered a Decision [10] affirming the findings of
the LA that respondents were validly terminated. The NLRC ruled that the closure
of a business is an authorized cause sanctioned under Article 283 of the Labor
Code and one that is ultimately a management prerogative. The NLRC, however,

modified the LAs Decision by increasing the amount of financial assistance to

two months salary out of compassionate justice.
Aggrieved by the NLRC Decision, petitioner then appealed to the CA, specifically
questioning the grant of financial assistance to respondents.
On May 28, 2004, the CA rendered a Decision reversing the Decision of the
NLRC. The CA shared the view of the LA that respondents should only be
awarded one months salary as financial assistance and not two months salary as
previously decreed by the NLRC.
Petitioner then filed a motion for reconsideration, which was, however, denied by
the CA in a Resolution dated October 28, 2004.
ISSUE: Whether or not the award of financial assistance was proper.
RULING: NO.
Based on Article 283, in case of cessation of operations, the employer is
only required to pay his employees a separation pay of one month pay or at
least one-half month pay for every year of service, whichever is higher. That is
all that the law requires.
In the case at bar, petitioner paid respondents the following: (a)
separation pay computed at 150% of their gross monthly pay per year of
service; and (b) cash equivalent of earned and accrued vacation and sick leaves.
Clearly, petitioner had gone over and above the requirements of the law. Despite
this, however, petitioner has been ordered to pay respondents an additional
amount, equivalent to one months salary, as a form of financial assistance.
After a thorough consideration of the circumstances at bar, this Court
finds that the award of financial assistance is bereft of legal basis and serves to
penalize petitioner who has complied with the requirements of the law.
Moreover, a review of jurisprudence relating to the application of compassionate
and social justice in granting financial assistance in labor cases shows that the
same has been generally used in instances when an employee has been
dismissed for a just cause under Article 282 of the Labor Code and not when an
employee has been dismissed for anauthorized cause under Article 283.
As a general rule, an employee who has been dismissed for any of the just
causes enumerated under Article 282 [26] of the Labor Code is not entitled to
separation pay.[27]Although by way of exception, the grant of separation pay or
some other financial assistance may be allowed to an employee dismissed for
just causes on the basis of equity. [28]
The reason that the law does not statutorily grant separation pay or
financial assistance in instances of termination due to a just cause is precisely
because the cause for termination is due to the acts of the employee. In such
instances, however, this Court, inspired by compassionate and social justice, has

in the past awarded financial assistance to dismissed employees when

circumstances warranted such an award.
Looking now at Article 283, this Court holds that the same was drafted by the
legislature, taking the best interest of laborers in mind. It is clear that the causes
of the termination of an employee under Article 283 are due to circumstances
beyond their control, such as when management decides to reduce personnel
based on valid grounds, or when the employer decides to cease
operations. Thus, the bias towards labor is very apparent, as the employer is
statutorily required to pay separation pay, the amount of which is also statutorily
prescribed.
While the CA should not be faulted for sympathizing with the plight of
respondents as they suddenly lost their means of livelihood, this Court holds that
it is precisely because of the sudden loss of employment one that is beyond
the control of labor that the law statutorily grants separation pay and dictates
how the same should be computed. Thus, any business establishment that
decides to cease its operations has the burden of complying with the law. This
Court should refrain from adding more than what the law requires, as the same
is within the realm of the legislature.
It bears to stress, however, that petitioner may, as it has done, grant on a
voluntary and ex gratia basis, any amount more than what is required by the
law, but to insist that more financial assistance be given is certainly something
that this Court cannot countenance, as the same serves to penalize petitioner,
which has already given more than what the law requires. Moreover, any award
of additional financial assistance to respondents would put them at an
advantage and in a better position than the rest of their co-employees who
similarly lost their employment because of petitioners decision to cease its
operations.
Withal, the law, in protecting the rights of the laborers, authorizes neither
oppression nor self-destruction of the employer. While the Constitution is
committed to the policy of social justice and the protection of the working class,
it should not be supposed that every labor dispute will be automatically decided
in favor of labor. The management also has its own rights, as such, are entitled
to respect and enforcement in the interest of simple fair play. Out of its concern
for those with less privileges in life, the Supreme Court has inclined more often
than not toward the worker and upheld his cause in his conflicts with the
employer. Such favoritism, however, has not blinded the Court to the rule that
justice is in every case for the deserving, to be dispensed in the light of the
established facts and applicable law and doctrine.
5. Escario vs. NLRC

G.R. No. 160302 September 27, 2010

Full Text:
http://sc.judiciary.gov.ph/jurisprudence/2010/september2010/160302.htm

However, separation pay is made an alternative relief in lieu of

reinstatement in certain circumstances, like: (a) when reinstatement can no
longer be effected in view of the passage of a long period of time or because of
the realities of the situation; (b) reinstatement is inimical to the employers
interest; (c) reinstatement is no longer feasible; (d) reinstatement does not serve
the best interests of the parties involved; (e) the employer is prejudiced by the
workers continued employment; (f) facts that make execution unjust or
inequitable have supervened; or (g) strained relations between the employer
and employee
FACTS: The petitioners were among the regular employees of respondent
Pinakamasarap Corporation (PINA), a corporation engaged in manufacturing and
selling food seasoning. They were members of petitioner Malayang Samahan ng
mga Manggagawa sa Balanced Foods (Union).
They participated in an strike.
The Labor Arbiter ruled that the strike was illegal and they abandoned their
employment.
The NLRC agree with the illegal strike; however, disagree that union members
should be considered to have abandoned their employment. The mere
participation of a union member in the illegal strike does not mean loss of
employment status unless he participates in the commission of illegal acts
during the strike. While it is true that complainant thru individual memorandum
directed the respondents to return to work there is no showing that respondents
deliberately refused to return to work. A worker who joins a strike does so
precisely to assert or improve the terms and conditions of his work. If his
purpose is to abandon his work, he would not go to the trouble of joining a strike.
The CA affirmed with the NLRC.
The petitioners were given an order of reinstatement but PINA opted not to
reinstate them, so give them separation pay.
ISSUE : whether or not separation pay is given in lieu of reinstatement - YES
RULING:
The petitioners were ordered reinstated because they were union members
merely instigated or induced to participate in the illegal strike. By joining the
strike, they did not renounce their employment relation with PINA but remained
as its employees.
The absence from an order of reinstatement of an alternative relief should
the employer or a supervening event not within the control of the employee

prevent reinstatement negates the very purpose of the order. The judgment
favorable to the employee is thereby reduced to a mere paper victory, for it is all
too easy for the employer to simply refuse to have the employee back. To
safeguard the spirit of social justice that the Court has advocated in favor of the
working man, therefore, the right to reinstatement is to be considered renounced
or waived only when the employee unjustifiably or unreasonably refuses to
return to work upon being so ordered or after the employer has offered to
reinstate him.[27]
However, separation pay is made an alternative relief in lieu of
reinstatement in certain circumstances, like: (a) when reinstatement can no
longer be effected in view of the passage of a long period of time or because of
the realities of the situation; (b) reinstatement is inimical to the employers
interest; (c) reinstatement is no longer feasible; (d) reinstatement does not serve
the best interests of the parties involved; (e) the employer is prejudiced by the
workers continued employment; (f) facts that make execution unjust or
inequitable have supervened; or (g) strained relations between the employer
and employee.[28]
Here, PINA manifested that the reinstatement of the petitioners would not
be feasible because: (a) it would inflict disruption and oppression upon the
employer; (b) petitioners [had] stayed away for more than 15 years; (c) its
machines had depreciated and had been replaced with newer, better ones; and
(d) it now sold goods through independent distributors, thereby abolishing the
positions related to sales and distribution. [29]
Under the circumstances, the grant of separation pay in lieu of
reinstatement of the petitioners was proper. It is not disputable that the grant of
separation pay or some other financial assistance to an employee is based on
equity, which has been defined as justice outside law, or as being ethical rather
than jural and as belonging to the sphere of morals than of law. [30] This Court has
granted separation pay as a measure of social justice even when an employee
has been validly dismissed, as long as the dismissal has not been due to serious
misconduct or reflective of personal integrity or morality. [31]
What is the appropriate amount for separation pay?
In G & S Transport,[32] the Court awarded separation pay equivalent to one
month salary per year of service considering that 17 years had passed from the
time when the striking employees were refused reinstatement. In Association of
Independent Unions in the Philippines v. NLRC,[33] the Court allowed separation
pay equivalent to one month salary per year of service considering that eight
years had elapsed since the employees had staged their illegal strike.
Here, we note that this case has dragged for almost 17 years from the
time of the illegal strike. Bearing in mind PINAs manifestation that the positions
that the petitioners used to hold had ceased to exist for various reasons, we hold
that separation pay equivalent to one month per year of service in lieu of
reinstatement fully aligns with the aforecited rulings of the Court on the matter.

WHEREFORE, we affirm the decision dated August 18, 2003 of the Court
of Appeals, subject to the modification to the effect that in lieu of reinstatement
the petitioners are granted backwages equivalent of one month for every year of
service.
6. Motorola Phils. v. Ambrocio G.R. No. 173279, March 20, 2009
JAS
JAS
7. RODOLFO J. SERRANO vs. SEVERINO SANTOS TRANSIT and/or
SEVERINO SANTOS,
G.R. No. 187698, August 9, 2010
DOCTRINE: COMPUTATION OF RETIREMENT PAY
A covered employee who retires pursuant to RA 7641 shall be
entitled to retirement pay equivalent to at least one-half (1/12)
month salary for every year of service, a fraction of at least six (6)
months being considered as one whole year.
The law is explicit that one-half month salary shall mean fifteen
(15) days plus one-twelfth (1/12) of the 13th month pay and the
cash equivalent of not more than five (5) days service incentive
leaves unless the parties provide for broader inclusions. Evidently,
the law expanded the concept of one-half month salary from the
usual one-month salary divided by two.
The retirement pay is equal to half-months pay per year of
service. But half-months pay is expanded because it means not just
the salary for 15 days but also one-twelfth of the 13th-month pay
and the cash value of five-day service incentive leave. THIS IS THE
MINIMUM. The retirement pay package can be improved upon by
voluntary company policy, or particular agreement with the
employee, or through a collective bargaining agreement. (The
Labor Code with Comments and Cases, C.A. Azcunea, Vol. II, page
765, Fifth Edition 2004).
FACTS: Petitioner Rodolfo J. Serrano was hired as bus conductor by respondent
Severino Santos Transit, a bus company owned and operated by its corespondent Severino Santos.
After 14 years of service or on July 14, 2006, petitioner applied for optional
retirement from the company. As petitioners request to first go over the

computation of his retirement pay was denied, he signed the Quitclaim on which
he wrote U.P. (under protest) after his signature, indicating his protest to the
amount of P75,277.45 which he received, computed by the company at 15 days
per year of service.
Petitioner soon filed a complaint before the Labor Arbiter, alleging that the
company erred in its computation since under Republic Act No. 7641, otherwise
known as the Retirement Pay Law, his retirement pay should have been
computed at 22.5 days per year of service to include the cash equivalent of the
5-day service incentive leave (SIL) and 1/12 of the 13th month pay which the
company did not.
The company maintained, however, that the Quitclaim signed by
petitioner barred his claim and, in any event, its computation was correct since
petitioner was not entitled to the 5-day SIL and pro-rated 13 th month pay for, as
a bus conductor, he was paid on commission basis.
The Labor Arbiter (LA) ruled in favor of petitioner and awarded him
P116,135.45 as his retirement pay differential. On respondents appeal, the
National Labor Relations Commission (NLRC) reversed the LAs decision but
ordered the payment of petitioners retirement differential in the P2,365.35. The
NLRC held that since petitioner was paid on purely commission basis, he was
excluded from the coverage of the laws on 13thmonth pay and SIL pay, hence,
the 1/12 of the 13th month pay and the 5-day SIL should not be factored in the
computation of his retirement pay.
ISSUE: Whether or not the 5-day SIL and pro-rated 13 th month pay should be
included in the computation of petitioners retirement pay.
RULING: The Supreme Court reinstated the LAs previous decision and held that
petitioners retirement pay should include the cash equivalent of the 5-day SIL
and 1/12 of the 13th month pay.
Republic Act No. 7641 amended Article 287 of the Labor Code by
providing for retirement pay to qualified private sector employees in the absence
of any retirement plan in the establishment. Further, the Implementing Rules of
said law provide:
SECTION 1.
General Statement on Coverage. This Rule shall apply to all employees
in the private sector, regardless of their position, designation or status
and irrespective of the method by which their wages are paid, except to
those specifically exempted under Section 2 hereof. As used herein, the
term Act shall refer to Republic Act No. 7641 which took effect on January 7,
1993.
SECTION 5
Retirement Benefits.

5.1 In the absence of an applicable agreement or retirement plan, an employee

who retires pursuant to the Act shall be entitled to retirement pay equivalent to
at least one-half () month salary for every year of service, a fraction of at least
six (6) months being considered as one whole year.
5.2 Components of One-half () Month Salary. For the purpose of
determining the minimum retirement pay due an employee under this Rule, the
term one-half month salary shall include all of the following:
(a) Fifteen (15) days salary of the employee based on his latest salary
rate. As used herein, the term salary includes all remunerations paid by
an employer to his employees for services rendered during normal
working days and hours, whether such payments are fixed or
ascertained on a time, task, piece of commission basis, or other method
of calculating the same, and includes the fair and reasonable value, as
determined by the Secretary of Labor and Employment, of food, lodging or other
facilities customarily furnished by the employer to his employees. The term does
not include cost of living allowances, profit-sharing payments and other
monetary benefits which are not considered as part of or integrated into the
regular salary of the employees.
(b) The cash equivalent of not more than five (5) days of service
incentive leave;
(c) One-twelfth of the 13th month pay due the employee.
(d) All other benefits that the employer and employee may agree upon that
should be included in the computation of the employees retirement pay.
Admittedly, petitioner worked for 14 years for the bus company which did
not adopt any retirement scheme. Even if petitioner as bus conductor was paid
on commission basis then, he falls within the coverage of R.A. 7641 and its
implementing rules. It bears emphasis that under P.D. 851 or the SIL Law, the
exclusion from its coverage of workers who are paid on a purely commission
basis is only with respect to field personnel.
8. Eligir v. PAL, G.R. No. 181995, July 16, 2012
Facts: Petitioner Bibiano C. Elegir (petitioner) was hired by Philippine Airlines, Inc.
(PAL) as a commercial pilot in 1971. Pursuant to a new flight program adopted by
PAL, petitioner was appointed as one of the pilots for the B747-400 captain
positions. He and the other pilots were sent to Seattle to undergo training for the
new aircraft which he completed in 1995. He decided to retire on May 5, 1996,
after rendering a total of more than 25 years in service which is an option
allowed by the CBA between the airline and the Airline Pilots Association of the
Philippines where he is a member of good standing. PAL asked him to reconsider
his decision saying that they have not yet fully recovered the full value of his

training and that if he should continue with his decision to retire the airline will
be constrained to deduct the expenses of his training from his retirement pay.

On November 6, 1996, the petitioner went on terminal leave for thirty (30) days
and thereafter made effective his retirement from service. Upon securing his
clearance, however, he was informed that the costs of his training will be
deducted from his retirement pay, which will be computed at the rate of P
5,000.00 per year of service. The petitioner argued that his retirement benefits
should be based on the computation stated in Article 287 of the Labor Code, as
amended by Republic Act (R.A.) No. 7641, and that the costs of his training
should not be deducted therefrom.

PAL refused and argued that petitioner's retirement pay should be based on
PALALPAP Retirement Plan of 1967 (PAL-ALPAP Retirement Plan) and that he
should reimburse the company with the proportionate costs of his training. Thus,
on August 27, 1997, the petitioner filed a complaint for non-payment of
retirement pay, moral damages, exemplary damages and attorneys fees against
PAL.

LA: On February 6, 1998, the Labor Arbiter (LA) rendered the decision for the
payment of retirement benefits to the petitioner for a total of P 4,150,106.20
saying that the law intended to give bigger and better benefits to workers under
existing laws or CBA agreements and that PAL had no right to withhold the
petitioner's retirement benefits due to his retirement before the lapse of three
years. There was no document showing that the petitioner was required to stay
with the airline for three years after the training or that he was required to
reimburse the cost of his training from his retirement benefits should he retire
earlier than the three year period. The LA also dismissed PAL's claim that
petitioner's submission of his bid for the position created an innominate contract
du ut facis between him and the company.

NLRC: Modified the decision of the LA. Petitioner was only 52 years old when he
opted to retire and therefore was not qualified to receive the benefits offered
under Article 287 of the Labor Code, but he was eligible for retirement under the
CBA since he had served for more than 25 years with the same company. It ruled
that the benefits should be computed in accordance with both Article 287 of the
Code and the Retirement Plan of the CBA. It also ruled that petitioner is under
obligation to reimburse a portion of the expense for his training program as

captain since it would be grossly unfair for petitioner to reap the fruits of his
training if he would not be made to return the said benefits in form of service for
a reasonable period of time. Both parties filed MRs. It denied PALs MR

CA: Reversed the decision of the NLRC. It ruled that retirement pay should be
computed in accordance with CBA retirement plan as ruled in PAL v. Airline Pilots
Association of the Philippines. It denied petitioners MR.

Issues: Should retirement benefits be computed based on Article 287 of the

Labor Code?

Ruling: Petitioners retirement pay should be based on the PAL retirement plans.
The two retirement schemes are alternative in nature such that the retired pilot
can only be entitled to that which provides for the superior benefit. Even if there
is an existing CBA but if it provides lesser benefits than what is provided in the
Labor Code , the Code will apply to assure the retiree of the reasonable amount
of retirement pay. Consistent with the purpose of the law, the CA correctly held
that the PAL retirement plan applies because it provides for higher benefits.
Under the PAL retirement plan petitioner qualified for late retirement sine he
rendered more than 20 years as pilot and is entitled to receive a lump sum of P
125, 000 for his services. He is also entitled to equity of the retirement fund
under the Retirement Benefit Plan. This is more compared to what he will receive
under the Labor Code which is equivalent to at least of his monthly salary for
every year of service. The benefits under the PAL retirement plan are to the
petitioners advantage.

It also ruled that the petitioner shall reimburse PAL for his training costs. The
court recognized PALs right to recoup losses incurred due to pilot training and
modified the provision on age limits for pilots seeking advanced positions. Pilots
57 years old shall be frozen in their position while those 55 years of age that
have previously qualified in the company turbo jet aircraft are permitted to
occupy any position in the turbo jet fleet. Allowing the petitioner to leave the
company before he has t fulfilled is reasonable expectation of service will result
to unjust enrichment since the training gave him new skills and increased his
salary. Reason and fairness dictate that he must return to PAL a proportionate
costs of training.

9. Grace Christian High School vs. Lavandera, G.R. No. 177845, August 20,
2014

Ratio:
RA 7641, which was enacted on December 9, 1992, amended Article 287
of the Labor Code, providing for the rules on retirement pay to qualified private
sector employees in the absence of any retirement plan in the
establishment.

The foregoing provision is applicable where (a) there is no CBA or other

applicable agreement providing for retirement benefits to employees, or (b)
there is a CBA or other applicableagreement providing for retirement benefits
but it is below the requirement set by law. Verily, the determining factor in
choosing which retirement scheme to apply is still superiority in terms
of benefits provided.

Facts:
Filipinas filed a complaint for illegal (constructive) dismissal, non-payment
of service incentive leave (SIL) pay, separation pay, service allowance, damages,
and attorneys fees against GCHS6 and/or its principal, Dr. James Tan.

She alleged that on May 11, 2001, she was informed that her services
were to be terminated effective May 31, 2001, pursuant to GCHS retirement
plan which gives the school the option to retire a teacher who has rendered at
least 20 years of service, regardless of age, with a retirement pay of one-half
() month for every year of service.

GCHS denied that they illegally dismissed Filipinas. They asserted that
the latter was considered retired on May 31, 1997 after having rendered 20
years of service pursuant to GCHS retirement plan and that she was duly
advised that her retirement benefits.

The Labor Arbiter (LA) dismissed the illegal dismissal complaint for lack of
merit. The LA ruled that Filipinas was not terminated from employment but was
considered retired as of May 31, 1997 after rendering 20 years of service and
was only allowed by GCHS to continue teaching on a year-to-year basis (until
May 31, 2001)in the exercise of its option to do so under the aforementioned
retirement plan until she was informed that her contract would not be renewed

The LA found the retirement benefits payable under GCHS retirement plan
to be deficient vis--vis those provided under RA 7641,17 and, accordingly,
awarded Filipinas retirement pay differentials based on her latest salaryas
follows:
P18,662.00/30 =

P622.06/day

P622.06 x 22.5 =

P13,996.35 x 20 =

P279,927.00
- P136,210.00

18

P143,717.00

The NLRC set aside the LAs award. It held that under Article 287 of the
Labor Code, as amended by RA 7641, the retirement package consists of 15
days salary, plus 13th month pay and SIL pay pro-rated to their one-twelfth
(1/12) equivalent.

The CA affirmed with modification the NLRCs Decision.

Issue/s:

Whether or not the CA committed reversible error in using the multiplier

"22.5 days" in computing the retirement pay differentials of Filipinas.

Held:

No. Both NLRC and CA correctly ruled that Filipinas retirement benefits
should be computed in accordance withArticle 287 of the Labor Code, as
amended by RA 7641, being the more beneficent retirement scheme. They
differ, however, in the resulting benefit differentials due to divergent
interpretations of the term "one-half (1/2) month salary" as used under the law.

RA 7641, which was enacted on December 9, 1992, amended Article 287

of the Labor Code, providing for the rules on retirement pay to qualified
private sector employees in the absence of any retirement plan in the
establishment. The said law states that "an employees retirement benefits
under any collective bargaining [agreement (CBA)] and other agreements shall
not be less than those provided" under the same that is, at least onehalf (1/2)
month salary for every year of service, a fraction of at least six (6) months being
considered as one whole year and that "[u]nless the parties provide for broader
inclusions, the term one-half (1/2) month salary shall mean fifteen (15) days plus
one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more
than five (5) days of service incentive leaves."

The foregoing provision is applicable where (a) there is no CBA or other

applicable agreement providing for retirement benefits to employees, or (b)
there is a CBA or other applicableagreement providing for retirement benefits
but it is below the requirement set by law. Verily, the determining factor in
choosing which retirement scheme to apply is still superiority in terms
of benefits provided.

The Court, in the case of Elegir v. Philippine Airlines,Inc.,35 has recently

affirmed that "one-half (1/2) month salary means 22.5 days: 15 days plus 2.5
days representing one-twelfth (1/12) of the 13th month pay and the remaining 5
days for [SIL]."

10. UNILEVER PHILIPPINES, INC.vs.MARIA RUBY M. RIVERA

[G.R. No. 201701,June 3, 2013]

Facts:

Unilever is a company engaged in the production, manufacture, sale, and

distribution of various food, home and personal care products, while Rivera was
employed as its Area Activation Executive. Unilever enforces a strict policy that
every trade activity must be accompanied by a Trade Development Program
(TDP) and that the allocated budget for a specific activity must be used for such
activity only.

There was a random audit conducted where fund deviations upon Riveras
instruction were found out. So, Unilever issued a notice to Rivera asking her to
explain on the anomalies. Rivera admitted through an email the fund diversion,
but reasoned that it was due to difficulty of procuring funds from the head office
and those funds were used in the companys promotional ventures.

Unilever found Rivera guilty resulting to sever their professional relations and
eventually denied Riveras request to retirement benefits even if she served the
company for 14 years.

Rivera filed a complaint for Illegal Dismissal and other monetary claims against
Unilever.

Labor Arbiter - dismissed her complaint for lack of merit and denied her claim
for retirement benefits, but ordered Unilever to pay a proportionate 13th month
pay and the corresponding cash equivalent of her unused leave credits

NLRC - partially granted Riveras prayer - Unilever was guilty of violating the
twin notice requirement in labor cases & was ordered to pay her P30,000.00 as
nominal damages, retirement benefits and separation pay. However, when
Unilever filed a motion for reconsideration, the NLRC modified its earlier ruling
by deleting the award of separation pay and reducing the nominal damages from
P30,000.00 to P20,000.00, but affirmed the award of retirement benefits to
Rivera

CA - affirmed with modification the NLRC resolution stating that Rivera is not
entitled to retirement benefits but awarded separation pay in her favor as a
measure of social justice

Issue:
Whether or not a validly dismissed employee, like Rivera, is entitled to
an award of separation pay.

Ruling:
No, she is not entitled to a separation pay.

As a general rule, an employee who has been dismissed for any of the
just causes enumerated under Article 282 of the Labor Code is not
entitled to a separation pay. In exceptional cases, however, the Court
has granted separation pay to a legally dismissed employee as an act of
"social justice" or on "equitable grounds." In both instances, it is
required that the dismissal (1) was not for serious misconduct; and (2)
did not reflect on the moral character of the employee.

In the case at bar, Rivera was dismissed from work because she intentionally
circumvented a strict company policy, manipulated another entity to carry out
her instructions without the companys knowledge and approval, and directed
the diversion of funds, which she even admitted doing under the guise of
shortening the laborious process of securing funds for promotional activities from
the head office. These transgressions were serious offenses that warranted her
dismissal from employment and proved that her termination from work was for a
just cause.

However, because there was a violation of the twin-notice requirement when

Unilever was not direct and specific in its first notice to Rivera (the words it used
were couched in general terms and were in no way informative of the charges
against her that may result in her dismissal from employment), it warrants the
payment of indemnity in the form of nominal damages. So, the Supreme Court
increased the award of nominal damages from P20,000.00 to P30,000.00.
11. G.R. No. 164774
April 12, 2006
STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN
CHUA, Petitioners,
vs.
RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E.
ESTRELLA, Respondents.
Facts:
Petitioner Star Paper Corporation (the company) is a corporation engaged
in trading principally of paper products. Josephine Ongsitco is its Manager of
the Personnel and Administration Department while Sebastian Chua is its
Managing Director.

Respondents, Ronaldo D. Simbol (Simbol), Wilfreda N. Comia (Comia) and

Lorna E. Estrella (Estrella), on the other hand, were all regular employees of the
company.
Respondent Simbol:
During his employment, respondent Simbol met Alma Dayrit, his coemployee and whom he got married. Prior to their marriage, respondent
Ongsitco advised the couple that if they decide to get married, one of them must
resign pursuant to the company policy promulgated in 1995.
1. New applicants will not be allowed to be hired if in case
he/she has [a] relative, up to [the] 3rd degree of relationship,
already employed by the company.
2. In case of two of our employees (both singles [sic], one
male and another female) developed a friendly relationship during
the course of their employment and then decided to get married,
one of them should resign to preserve the policy stated above.
Thus, Simbol resigned pursuant to the company policy.
Respondent Comia:
Respondent Comia was also hired by the company where she met her coemployee, Howard Comia, and got married. Same with the respondent Simbol,
Ongsitco also reminded the couple about the company policy. Hence, respondent
Comia resigned from the company.
Respondent Estrella:
Respondent Estrella was hired by the company wher she met her husband
Luisito Zuiga (Zuiga), also her co-worker. Petitioners stated that Zuiga, a
married man, got Estrella pregnant. The company allegedly could have
terminated her services due to immorality but she opted to resign.
All the respondents each signed a Release and Confirmation Agreement
were they stated that they have no money and property accountabilities in the
company and that they release the company of any claim or demand of
whatever nature.
On the other hand, respondents argued that Simbol and Comia did not
resign voluntarily; they were compelled to resign in view of an illegal company
policy.
As to respondent Estrella, she alleges that she had a relationship with coworker Zuiga who misrepresented himself as a married but separated man.
After he got her pregnant, she discovered that he was not separated. Thus, she
severed her relationship with him to avoid dismissal due to the company policy.
Subsequently, respondent Estrella met an accident and was advised by
the doctor to recuperate for twenty-one (21) days. When she returned to work
she found out that her name was on-hold at the gate and was denied entry.
She was directed to proceed to the personnel office where one of the staff
handed her a memorandum. The memorandum stated that she was being
dismissed for immoral conduct. She refused to sign the memorandum because
she was on leave for twenty-one (21) days and has not been given a chance to
explain. The management asked her to write an explanation. However, after
submission of the explanation, she was nonetheless dismissed by the company.

Due to her urgent need for money, she later submitted a letter of resignation in
exchange for her thirteenth month pay.
Thus, respondents filed a complaint for unfair labor practice, constructive
dismissal, separation pay and attorneys fees averring that the company policy is
illegal and contravenes under Article 136 of the Labor Code. They also
contended that they are dismissed because of their union membership.
Petitioners Argument:
Petitioners allege that its policy "may appear to be contrary to Article 136
of the Labor Code" but it assumes a new meaning if read together with the first
paragraph of the rule. The rule does not require the woman employee to resign.
The employee spouses have the right to choose who between them should
resign. Further, they are free to marry persons other than co-employees. Hence,
it is not the marital status of the employee, per se, that is being discriminated. It
is only intended to carry out its no-employment-for-relatives-within-the-thirddegree-policy which is within the ambit of the prerogatives of management.
The Labor Arbiter dismissed the case due to lack of merit which was
affirmed by the NLRC.
However, the Court of Appeals reversed the decision of the NLRC.
Hence, this petition.
Issue:
WHETHER OR NOT THE POLICY OF THE EMPLOYER BANNING SPOUSES
FROM WORKING IN THE SAME COMPANY VIOLATES THE RIGHTS OF THE
EMPLOYEE UNDER THE CONSTITUTION AND THE LABOR CODE OR IS A VALID
EXERCISE OF MANAGEMENT PREROGATIVE.
Courts Ruling:
YES.
Art. 136 of the Labor Code provides:
It shall be unlawful for an employer to require as a
condition of employment or continuation of employment that a
woman employee shall not get married, or to stipulate expressly or
tacitly that upon getting married a woman employee shall be
deemed resigned or separated, or to actually dismiss, discharge,
discriminate or otherwise prejudice a woman employee merely by
reason of her marriage.
The court employs the standard of reasonableness of the
company policy which is parallel to the bona fide occupational
qualification requirement. (refer to the note below on bonafide
occupational ..)
The requirement of reasonableness must be clearly established to uphold
the questioned employment policy. The employer has the burden to prove the
existence of a reasonable business necessity.
The questioned policy may not facially violate Article 136 of the Labor
Code but it creates a disproportionate effect and under the disparate impact
theory, the only way it could pass judicial scrutiny is a showing that it
is reasonable despite the discriminatory, albeit disproportionate effect. The

failure of petitioners to prove a legitimate business concern in imposing the

questioned policy cannot prejudice the employees right to be free from arbitrary
discrimination based upon stereotypes of married persons working together in
one company.
Lastly, the absence of a statute expressly prohibiting marital
discrimination in our jurisdiction cannot benefit the petitioners. The protection
given to labor in our jurisdiction is vast and extensive that we cannot prudently
draw inferences from the legislatures silence that married persons are not
protected under our Constitution and declare valid a policy based on a prejudice
or stereotype.
Thus, for failure of petitioners to present undisputed proof of a
reasonable business necessity, we rule that the questioned policy is an
invalid exercise of management prerogative.

NOTE: (In case Atty. asked the provisions, doctrine and the related
jurisprudence)

1987 Constitution
1. Article II, Section 18. The State affirms labor as a primary social economic
force. It shall protect the rights of workers and promote their welfare.
xxx
2. Article XIII, Sec. 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment and
equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful concerted activities,
including the right to strike in accordance with law. They shall be entitled
to security of tenure, humane conditions of work, and a living wage. They
shall also participate in policy and decision-making processes affecting
their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility
between workers and employers, recognizing the right of labor to its just
share in the fruits of production and the right of enterprises to reasonable
returns on investments, and to expansion and growth.
The Civil Code
1. Art. 1700. The relation between capital and labor are not merely
contractual. They are so impressed with public interest that labor
contracts must yield to the common good. Therefore, such contracts are
subject to the special laws on labor unions, collective bargaining, strikes
and lockouts, closed shop, wages, working conditions, hours of labor and
similar subjects.
2. Art. 1702. In case of doubt, all labor legislation and all labor contracts
shall be construed in favor of the safety and decent living for the laborer.
DOCTRINES/PRINCIPLES

These courts also find the no-spouse employment policy invalid for failure
of the employer to present any evidence of business necessity other than the
general perception that spouses in the same workplace might adversely affect
the business. They hold that the absence of such a bona fide occupational
qualification invalidates a rule denying employment to one spouse due to the
current employment of the other spouse in the same office. Thus, they rule that
unless the employer can prove that the reasonable demands of the business
require a distinction based on marital status and there is no better available or
acceptable policy which would better accomplish the business purpose, an
employer may not discriminate against an employee based on the identity of the
employees spouse. This is known as the bona fide occupational
qualification exception.
There must be a compelling business necessity for which no alternative
exists other than the discriminatory practice. To justify a bona fide occupational
qualification, the employer must prove two factors: (1) that the employment
qualification is reasonably related to the essential operation of the job involved;
and, (2) that there is a factual basis for believing that all or substantially all
persons meeting the qualification would be unable to properly perform the duties
of the job.
JURISPRUDENCE
1. Duncan Association of Detailman-PTGWO and Pedro Tecson v.
Glaxo Wellcome Philippines, Inc., we passed on the validity of the
policy of a pharmaceutical company prohibiting its employees from
marrying employees of any competitor company. We held that Glaxo has a
right to guard its trade secrets, manufacturing formulas, marketing
strategies and other confidential programs and information from
competitors. We considered the prohibition against personal or marital
relationships with employees of competitor companies upon Glaxos
employees reasonable under the circumstances because relationships of
that nature might compromise the interests of Glaxo. In laying down the
assailed company policy, we recognized that Glaxo only aims to protect its
interests against the possibility that a competitor company will gain
access to its secrets and procedures.
2. Philippine Telegraph and Telephone Company v. NLRC. In said case,
the employee was dismissed in violation of petitioners policy of
disqualifying from work any woman worker who contracts marriage.
We held that the company policy violates the right against
discrimination afforded all women workers under Article 136 of the Labor
Code, but established a permissible exception, viz.:
[A] requirement that a woman employee must remain
unmarried could be justified as a "bona fide occupational
qualification," or BFOQ, where the particular requirements of the
job would justify the same, but not on the ground of a general
principle, such as the desirability of spreading work in the
workplace. A requirement of that nature would be valid provided it

reflects an inherent quality reasonably necessary for satisfactory

job performance. (Emphases supplied.)
12.

Del Monte v. Velasco, G.R. No. 153477, March 6, 2007

DON
DON

13.

Domingo v. Rayala, G.R. No. 155831, February 18, 2008

Sexual harassment is an imposition of misplaced superiority which is

enough to dampen an employees spirit and her capacity for advancement. It
affects her sense of judgment; it changes her life.
It is incumbent upon the head of office to set an example on how his
employees should conduct themselves in public office, so that they may work
efficiently in a healthy working atmosphere. Courtesy demands that he should
set a good example.
FACTS
Ma. Lourdes T. Domingo, then Stenographic Reporter III at the NLRC, filed
a Complaint for sexual harassment against Rayala before Secretary Bienvenido
Laguesma of DOLE. The complaint contains the following allegations :
Holding and squeezing Domingos shoulders, running his
fingers across her neck and tickling her ear, having
inappropriate conversations with her, giving her money
allegedly for school expenses with a promise of future
privileges, and making statements with unmistakable sexual
overtones all these acts of Rayala resound with deafening
clarity the unspoken request for a sexual favor.
Upon receipt of the Complaint, DOLE Secretary referred it to the OP,
Rayala being a presidential appointee. The OP, through then Executive Secretary
Ronaldo Zamora, ordered Secretary Laguesma to investigate the allegations in
the Complaint and create a committee for such purpose.
On December 4, 1998, Secretary Laguesma issued Admin. Order. No. 280,
Series of 1998, constituting a Committee on Decorum and Investigation
(Committee) in accordance with Republic Act (RA) 7877, the Anti-Sexual
Harassment Act of 1995.

The Committee heard the parties and received their respective evidence.
On March 2, 2000, the Committee submitted its report and recommendation to
Secretary Laguesma. It found Rayala guilty of the offense charged and
recommended the imposition of the minimum penalty provided under AO 250,
which it erroneously stated as suspension for six (6) months (the correct penalty
is 6months and 1 day).
Executive Secretary Zamora, issued AO 119, which dismissed Rayaua from
service effective upon receipt of the Order.
Rayala filed a Motion for Reconsideration, which
Resolution. Under Rule 65, iled a Petition for Certiorari
Prayer for Temporary Restraining Order. However, it
disregarding the hierarchy of courts. MR was filed and the
CA for appropriate action.

the OP denied in a
and Prohibition with
was dismissed for
case was referred to

CA: sufficient evidence on record to create moral certainty that Rayala

committed the acts he was charged with. Dismissed for disgraceful and immoral
conduct in violation of RA 6713, the Code of Conduct and Ethical Standards for
Public Officials and Employees.
Rayala timely filed a Motion for Reconsideration.
CA(modified its ruling in a special division of 5): the penalty of
dismissal is DELETED and instead the penalty of suspension from service for the
maximum period of one (1) year is HEREBY IMPOSED upon the petitioner. The
rest of the challenged decision stands.
Domingo filed a Petition for Review, but was denied for having a defective
verification. MR granted, petition reinstated.
Rayala likewise filed a Petition for Review arguing that he is not guilty of
any act of sexual harassment.
Meanwhile, the Republic filed a Motion for Reconsideration of the CA, but
was denied.
On June 28, 2004, the Court directed the consolidation of the three (3)
petitions.
ISSUES
(1) Did Rayala commit sexual harassment? (yes)
(2) If he did, what is the applicable penalty? (1 yr suspension)
RULING

(1) YES. Factual findings are conclusive on the SC. And quite significantly,
Rayala himself admits to having committed some of the acts imputed to
him.
It is noteworthy that the five CA Justices who deliberated on the
case were unanimous in upholding the findings of the Committee and the
OP. They found the assessment made by the Committee and the OP to be
a meticulous and dispassionate analysis of the testimonies of the
complainant (Domingo), the respondent (Rayala), and their respective
witnesses. They differed only on the appropriate imposable penalty.
That Rayala committed the acts complained of and was guilty of
sexual harassment is, therefore, the common factual finding of not just
one, but three independent bodies: the Committee, the OP and the CA. It
should be remembered that when supported by substantial evidence,
factual findings made by quasi-judicial and administrative bodies are
accorded great respect and even finality by the courts. The principle,
therefore, dictates that such findings should bind us.
(2) The presence of taking undue advantage of a subordinate may be
considered as an aggravating circumstance in this case. And where only
aggravating and no mitigating circumstances are present, the maximum
penalty shall be imposed. Hence, the maximum penalty that can be
imposed on Rayala is suspension for one (1) year.
In this case, it is the President of the Philippines, as the proper
disciplining authority, who would determine whether there is a valid cause
for the removal of Rayala as NLRC Chairman. This power, however, is
qualified by the phrase for cause as provided by law. Thus, when the
President found that Rayala was indeed guilty of disgraceful and immoral
conduct, the Chief Executive did not have unfettered discretion to impose
a penalty other than the penalty provided by law for such offense.
Under AO 250, the penalty for the first offense is suspension for six
(6) months and one (1) day to one (1) year, while the penalty for the
second offense is dismissal. On the other hand, Section 22(o), Rule XVI of
the Omnibus Rules Implementing Book V of the Administrative Code of
1987 and Section 52 A(15) of the Revised Uniform Rules on Administrative
Cases in the Civil Service both provide that the first offense of disgraceful
and immoral conduct is punishable by suspension of six (6) months and
one (1) day to one (1) year. A second offense is punishable by dismissal.
As cited above, the imposable penalty for the first offense of either
the administrative offense of sexual harassment or for disgraceful and
immoral conduct is suspension of six (6) months and one (1) day to one
(1) year. Accordingly, it was error for the Office of the President to impose

upon Rayala the penalty of dismissal from the service, a penalty which
can only be imposed upon commission of a second offense.