LABOR LAW REVIEW

(HANDWRITTEN CASE DIGESTS)

BASIC PRINCIPLES
1. Sameer Overseas Placement Agency, Inc. vs. Joy C. Cabilles, G.R. No. 170139,
August 5, 2014
Facts:
Petitioner is a recruitment and placement agency. It accepted the respondents
application for a quality control job in Taiwan and later asked respondent to sign a oneyear employment contract as well as required payment of a placement fee amounting to
Php 70,000.00.
Respondent was deployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal) on June 26, 1997;
however, in Taiwan, she was asked to work as a cutter.
Petitioner claims that on July 14, 1997, a certain Mr. Huwang from Wacoal informed
respondent, without prior notice, that she was terminated. Respondent claims that she
was told that she only earned a total of NT$9,000 and that Wacoal deducted NT$3,000 to
cover her plane ticket to Manila.
On October 15, 1997, respondent filed a complaint with the National Labor Relations
Commission (NLRC) against petitioner and Wacoal for illegal dismissal. In response to the
complaint, petitioner alleged that the respondents termination was due to her
inefficiency, negligence in her duties and her failure to comply with the work
requirements of her foreign employer. Petitioner also denied the payment of placement
fee. It further alleged that it was already substituted by Pacific Manpower & Management
Services, Inc. (Pacific Manpower) since Wacoals accreditation with petitioner had already
been transferred to Pacific Manpower on August 6, 1997 or before the filing of the
complaint by respondent. Pacific Manpower, on the other hand, moved for the dismissal
of the complaint since there was no employer-employee relationship between them.
On July 29, 1998, the Labor Arbiter ruled that the respondents complaint was based on
mere allegations and dismissed the complaint. In a resolution dated March 31, 2004, the
NLRC declared respondent to have been illegally dismissed since petitioner failed to
prove that there were just causes for termination and procedural due process was not
observed in terminating the respondent. It awarded respondent only three months worth
of salary, the reimbursement of the amount withheld and attorneys fees. However, the
NLRC did not rule on the issue of the alleged transfer of obligations to Pacific Manpower.
The Commission subsequently denied petitioners motion for reconsideration.
The Court of Appeals (CA) affirmed the decision of the NLRC with respect to the finding of
illegal dismissal but remanded the case to the NLRC to address the validity of petitioners
allegations against Pacific Manpower.
Issue(s):
a. WON the CA erred in affirming the ruling of the NLRC in finding the respondent
illegally dismissed.
b. WON petitioner is substituted by Pacific Manpower due to the transfer of Wacoals
accreditation.
Ruling:

a. No, the CA did not err in affirming the NLRC ruling. Petitioner failed to show that there
was cause for respondents dismissal. The employer, Wacoal, also failed to accord her
due process of law.
Petitioners allegation that respondent was inefficient in her work and negligent in her
duties may constitute a just cause for termination under Article 282(b) of the Labor
Code of the Philippines. The burden of proving that there is just cause for termination
is on the employer. It must be affirmatively shown that: 1) the employer has set
standards of conduct and workmanship against which the employee will be judged; 2)
such standards have been communicated to the employee; and 3) the
communication was made at a reasonable time prior to the employee's performance
assessment.
In this case, there was no evidence to support petitioners allegations that
respondent failed to comply with her foreign employer's work requirements.
Petitioner did not even specify what requirements were not met, what efficiency
standards were violated, or what particular acts of respondent constituted
inefficiency.
There was also no showing that respondent was sufficiently informed of the standards
against which her work efficiency and performance were judged. The parties' conflict
as to the position held by respondent showed that even the matter as basic as the
job title was not clear.
Further, respondent's dismissal less than one year from hiring and her repatriation on
the same day show that the employers did not comply with the due process
requirement. Petitioner failed to comply with the twin notice and hearing
requirements. The abruptness of the termination negated any finding that she was
properly notified and given the opportunity to be heard. Her constitutional right to
due process of law was violated.
b. No. Under Section 10 of the Migrant Workers and Overseas Filipinos Act of 1995, the
foreign employer and the local employment agency are jointly and severally liable for
money claims including claims arising out of an employer-employee relationship
and/or damages.
The fundamental effect of joint and several liability is that each of the debtors is
liable for the entire obligation. A final determination may, therefore, be achieved
even if only one of the joint and several debtors are impleaded in an action. Hence, in
the case of overseas employment, either the local agency or the foreign employer
may be sued for all claims arising from the foreign employer's labor law violations.
However, it must be emphasized that the local agency that is held to answer for the
overseas worker's money claims is not left without remedy. The law does not
preclude it from going after the foreign employer for reimbursement of whatever
payment it has made to the employee to answer for the money claims against the
foreign employer.
The Court held that with the present state of the pleadings, it is not possible to
determine whether there was indeed a transfer of obligations from petitioner to
Pacific. This should not be an obstacle for the respondent overseas worker to proceed
with the enforcement of this judgment. Petitioner is possessed with the resources to
determine the proper legal remedies to enforce its rights against Pacific, if any.
WAGE ENFORCEMENT AND RECOVERY

2. Peoples Broadcasting (Bombo Radyo Phils.) vs. Secretary of DOLE, et. al., G.R.
No. 179652, March 6, 2012
Facts:
Private respondent Jandeleon Juezan filed a complaint against petitioner with the DOLE
Regional Office No. 7 for illegal deduction, nonpayment of service incentive leave, 13 th
month pay, premium pay for holiday and rest day and illegal diminution of benefits,
delayed payment of wages and non-coverage of SSS, PAG-IBIG and PhilHealth.
The DOLE Regional Director found that private respondent was an employee of the
petitioner and was entitled to his money claims. Petitioner sought reconsideration but
failed. The Acting DOLE Secretary dismissed petitioner's appeal on the ground that
petitioner submitted a Deed of Assignment of Bank Deposit instead of posting a cash or
surety bond. Upon appeal to the CA, petitioner claimed that it had been denied due
process; however, the CA held that petitioner was accorded due process as it had been
given the opportunity to be heard and that the DOLE Secretary had jurisdiction over the
matter.
In the decision of the SC, the CA Decision was reversed and set aside, and the complaint
against petitioner was dismissed. The SC found that there was no employer-employee
relationship between petitioner and private respondent. It was held that while the DOLE
may make a determination of the existence of an employer-employee relationship, this
function could not be co-extensive with the visitorial and enforcement power provided in
Article 128(b) of the Labor Code, as amended by Republic Act No. 7730. The NLRC was
held to be the primary agency in determining the existence of an employer-employee
relationship.
From this decision, the Public Attorney's Office (PAO) filed a Motion for Clarification of
Decision with Leave of Court. The PAO sought to clarify as to when the visitorial and
enforcement power of the DOLE be not considered as co-extensive with the power to
determine the existence of an employer-employee relationship.
Issue(s):
WON the DOLE may make a determination of the existence of an employer-employee
relationship and if so, to what extent.
Ruling:
Yes. Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully
empowered to make a determination as to the existence of an employer-employee
relationship in the exercise of its visitorial and enforcement power. The determination of
the existence of an employer-employee relationship by the DOLE must be respected.
If the DOLE makes a finding that there is an existing employer-employee relationship, it
takes cognizance of the matter, to the exclusion of the NLRC. The DOLE would have no
jurisdiction only if the employer-employee relationship has already been terminated, or it
appears, upon review, that no employer-employee relationship existed in the first place.
If a complaint, accompanied by a claim for reinstatement, is filed with the DOLE, the
jurisdiction is properly with the Labor Arbiter under Article 217(3) of the Labor Code. If a
complaint is filed with the NLRC and there is still an existing employer-employee
relationship, the jurisdiction is properly with the DOLE. The findings of the DOLE,
however, may still be questioned through a petition for certiorari under Rule 65 of the
Rules of Court.

WAGE PROTECTION PROVISIONS AND PROHIBITIONS REGARDING WAGES

3. Bluer Than Blue Joint Ventures Co., vs. Esteban, G.R. No. 192582, April 7, 2014
Facts:
Respondent was employed in January 2004 as Sales Clerk, and assigned at petitioners
EGG boutique in SM City Marilao, Bulacan, beginning the year 2006. Part of her primary
tasks were attending to all customer needs, ensuring efficient inventory, coordinating
orders from clients, cashiering and reporting to the accounting department.
In November 2006, the petitioner received a report that several employees have access
to its point-of-sale system through a universal password given by Elmer Flores. Upon
investigation, it was discovered that it was respondent who gave Flores the password.
The petitioner sent a letter memorandum to respondent on November 8, 2006, asking
her to explain in writing why she should not be disciplinary dealt with. She was also
placed under preventive suspension for ten days.
In her explanation, respondent admitted that she used the universal password three
times on the same day in December 2005 after she learned of it from two other
employees.
On November 13, 2006, the preventive suspension was lifted, but a notice of termination
was sent to the respondent, finding her explanation unsatisfactory and terminating her
employment immediately on the ground of loss of trust and confidence. The respondent
was given her final pay, including benefits and bonuses, less inventory variances
incurred by the store amounting to Php 8,304.93. The respondent signed a quitclaim and
release in favor of the petitioner.
On December 6, 2006, respondent filed a complaint for illegal dismissal, illegal
suspension, holiday pay, rest day and separation pay. The Labor Arbiter (LA) ruled in
favor of the respondent and found that she was illegally dismissed. It also awarded
separation pay, backwages, unpaid salary during her preventive suspension and
attorney's fees.
The decision of the LA was subsequently reversed by the NLRC and the complaint was
dismissed. The petitioners, however, were ordered to refund the amount illegally
deducted from respondents salary.
Upon appeal, the Court of Appeals granted respondents petition and reinstated the
decision of the LA.
Issue(s):
a. WON respondent holds a position of trust and confidence.
b. WON respondents acts constitute just cause to terminate her employment.
c. WON the deduction from respondents salary was valid by virtue of trade practice.
Ruling:
a. Yes. Respondent, although a rank-and-file employee, occupies a position of trust and
confidence.
Among the fiduciary rank-and-file employees are cashiers, auditors, property
custodians, or those who, in the normal exercise of their functions, regularly handle
significant amounts of money or property. These employees, though rank-and-file, are
routinely charged with the care and custody of the employer's money or property,
and are thus classified as occupying positions of trust and confidence.

In this case, although respondent was a sales clerk, her duties were more than that of
a sales clerk. Aside from attending to customers and tending to the shop, she also
assumed cashiering duties. As consistently ruled by the Court, it is not the job title
but the actual work that the employee performs that determines whether he or she
occupies a position of trust and confidence. Thus, respondent is considered to hold a
position of trust and confidence.
b. No, the respondents acts do not constitute just cause to terminate her employment
due to loss of trust and confidence.
Loss of trust and confidence is premised on the fact that the employee concerned
holds a position of responsibility, trust and confidence. The employee must be
invested with confidence on delicate matters, such as the custody, handling, care
and protection of the employer's property and funds. To be a valid cause for
dismissal, the loss of trust and confidence must be work related such as would show
the employee concerned to be unfit to continue working for the employer and it must
be based on a wilful breach of trust and founded on clearly established facts. Such
breach is wilful if it is done intentionally, knowingly, and purposely, without justifiable
excuse as distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently.
In this case, the acts committed by respondent do not amount to a wilful breach of
trust. She admitted that she accessed the system with the use of the unauthorized
password out of curiosity and without any obvious intention of defrauding the
petitioner. Moreover, the petitioner also failed to establish a substantial connection
between respondents use of the unauthorized password and any loss suffered by the
petitioner.
The Court held that absent any showing that her acts were done with "moral
perverseness" that would justify the claimed loss of trust and confidence attendant to
her job, the conclusion that the respondent was illegally dismissed should be
sustained.
c. No, the deduction made by the petitioner from the respondents salary was not valid.
Article 113 of the Labor Code provides that no employer, in his own behalf or in
behalf of any person, shall make any deduction from the wages of his employees,
except in cases where the employer is authorized by law or regulations issued by the
Secretary of Labor and Employment (SOLE) , among others. On the other hand,
Section 14 of the Omnibus Rules Implementing the Labor Code provides that the
employer may make wage deductions subject to the following conditions: (a) that the
employee concerned is clearly shown to be responsible for the loss or damage; (b)
that the employee is given reasonable opportunity to show cause why deduction
should not be made; (c) that the amount of such deduction is fair and reasonable and
shall not exceed the actual loss or damage; and (d) that the deduction from the
wages of the employee does not exceed 20% of the employee's wages in a week.
In Nia Jewelry Manufacturing of Metal Arts, Inc. v. Montecillo, the Court ruled that
the petitioners should first establish that the making of deductions from the salaries
is authorized by law, or regulations issued by the Secretary of Labor. It must also be
proven as a recognized practice in the jewelry manufacturing business, or
alternatively, the petitioners should seek for the determination by the SOLE through
the issuance of appropriate rules and regulations that the policy is necessary or
desirable in the conduct of business.

In this case, the petitioner failed to sufficiently establish that the respondent was
responsible for the negative variance it had in its sales for the year 2005 to 2006 and
that the respondent was given the opportunity to show cause the deduction from her
last salary should not be made. Thus, the Court cannot accept the petitioner's
statement that it is the practice in the retail industry to deduct variances from an
employee's salary.
RIGHT TO SECURITY OF TENURE
4. Abbott Laboratories vs. Alcaraz, G.R. No. 192571, April 22, 2014
Facts:
Respondent was hired by petitioner as a Regulatory Affairs Manager under the latters
Hospira Affiliate Local Surveillance Unit (ALSU) department on a probationary basis from
February 15, 2005 up to August 14, 2005 as indicated in the email sent by petitioners
Recruitment Officer. Attached to such e-mail was petitioners organizational chart and a
job description of respondents work.
During the pre-employment orientation, the respondent was briefed on her duties and
responsibilities. On March 3, 2005, petitioners Human Resources (HR) Director sent an email to the respondent which contained an explanation of the procedure for evaluating
the performance of probationary employees. The respondent was also given copies of
petitioners Code of Conduct and Probationary Performance Standards and Evaluation
(PPSE) and Performance Excellence Orientation Modules.
On May 16, 2005, respondent was called to a meeting with petitioners officers where
she was informed that she failed to meet the regularization standards. Thereafter, she
was requested to tender her resignation, else they be forced to terminate her services.
The next day, the respondent was informed that the petitioners officers already
announced her resignation due to health reasons. On May 23, 2005, she was personally
handed a letter stating that her services had been terminated effective May 19, 2005.
Respondent then filed a complaint for illegal dismissal and damages against petitioner
and its officers claiming that she should have already been considered as a regular and
not a probationary employee given petitioners failure to inform her of the reasonable
standards for her regularization upon her engagement.
The Labor Arbiter (LA) dismissed respondents complaint for lack of merit. Upon appeal,
the NLRC reversed the LAs ruling and ruled that there was no evidence showing that the
respondent had been apprised of her probationary status and the requirements which
she should have complied with in order to be a regular employee. It held that the
respondents receipt of her job description and Abbotts Code of Conduct and
Performance Modules was not equivalent to her being actually informed of the
performance standards upon which she should have been evaluated on.
The ruling of the NLRC was later affirmed by the Court of Appeals. However, upon
appeal, the Supreme Court reversed and set aside the CAs ruling and reinstated the LAs
ruling.
Issue(s):
WON respondent was sufficiently informed of the reasonable standards to qualify her as
a regular employee.

Ruling:
Yes, the respondent was well-appraised of her duties and responsibilities as well as the
probationary status of her employment considering the following facts: (a) petitioner
properly indicated the job description for as well as the duties and responsibilities
attendant to the Regulatory Affairs Manager position in the newspaper publication, which
prompted respondent to submit her application; (b) petitioners offer sheet stated that
the respondent was to be employed on a probationary status; (c) the employment
contract signed by the respondent indicated her probationary status and the period for
probation; (d) respondent was given copies of the petitioners organizational structure
and her job description through e-mail; (e) respondent underwent a pre-employment
orientation wherein she was informed that she had to implement petitioners Code of
Conduct and office policies on human resources and finance; (f) respondent was required
to undergo a training program as part of her orientation; (g) respondent received copies
of the Code of Conduct and Performance Modules and was informed of the procedure for
evaluating the performance of probationary employees; and (h) respondent had
previously worked for another pharmaceutical company and had admitted to having an
extensive training and background to acquire the necessary skills for her job.
Since the respondent was properly informed of the reasonable standards to qualify her
as a regular employee, the rule provided under Section 6(d), Rule I, Book VI of the
Implementing Rules of the Labor Code cannot be applied and respondent cannot be
deemed as a regular employee.
TERMINATION OF EMPLOYMENT
5. Abbott Laboratories vs. Alcaraz, G.R. No. 192571, April 22, 2014
Facts:
Respondent was hired by petitioner as a Regulatory Affairs Manager under the latters
Hospira Affiliate Local Surveillance Unit (ALSU) department on a probationary basis from
February 15, 2005 up to August 14, 2005 as indicated in the email sent by petitioners
Recruitment Officer. Attached to such e-mail was petitioners organizational chart and a
job description of respondents work.
During the pre-employment orientation, the respondent was briefed on her duties and
responsibilities. On March 3, 2005, petitioners Human Resources (HR) Director sent an email to the respondent which contained an explanation of the procedure for evaluating
the performance of probationary employees. The respondent was also given copies of
petitioners Code of Conduct and Probationary Performance Standards and Evaluation
(PPSE) and Performance Excellence Orientation Modules.
On May 16, 2005, respondent was called to a meeting with petitioners officers where
she was informed that she failed to meet the regularization standards. Thereafter, she
was requested to tender her resignation, else they be forced to terminate her services.
The next day, the respondent was informed that the petitioners officers already
announced her resignation due to health reasons. On May 23, 2005, she was personally
handed a letter stating that her services had been terminated effective May 19, 2005.
Respondent then filed a complaint for illegal dismissal and damages against petitioner
and its officers claiming that she should have already been considered as a regular and
not a probationary employee given petitioners failure to inform her of the reasonable
standards for her regularization upon her engagement.

The Labor Arbiter (LA) dismissed respondents complaint for lack of merit. Upon appeal,
the NLRC reversed the LAs ruling and ruled that there was no evidence showing that the
respondent had been apprised of her probationary status and the requirements which
she should have complied with in order to be a regular employee. It further observed
that Abbott did not comply with its own standard operating procedure in evaluating
probationary employees.
The ruling of the NLRC was later affirmed by the Court of Appeals. However, upon
appeal, the Supreme Court reversed and set aside the CAs ruling and reinstated the
ruling of the LA with the modification that petitioner be ordered to pay nominal damages
on account of its breach of its own company procedure.
Issue(s):
a. WON respondent was validly terminated from her employment.
b. WON the award for nominal damages was proper.
Ruling:
a. Yes. A probationary employee, like a regular employee, enjoys security of tenure.
However, in cases of probationary employment, aside from just or authorized causes
of termination, an additional ground is provided under Article 295 of the Labor Code,
i.e. the probationary employee may also be terminated for failure to qualify as a
regular employee in accordance with the reasonable standards made known by the
employer to the employee at the time of the engagement. Under Section 6(d), Rule I,
Book VI of the, in all cases of probationary employment, the employer shall make
known to the employee the standards under which he will qualify as a regular
employee at the time of his engagement. Where no standards are made known to the
employee at that time, he shall be deemed a regular employee. The exception to the
foregoing is when the job is self-descriptive in nature, for instance, in the case of
maids, cooks, drivers, or messengers.
An employee's failure to perform the duties and responsibilities which have been
clearly made known to him constitutes a justifiable basis for a probationary
employee's non-regularization. If the probationary employee had been fully apprised
by his employer of these duties and responsibilities, then basic knowledge and
common sense dictate that he must adequately perform the same, else he fails to
pass the probationary trial and may therefore be subject to termination.
Verily, it must be observed that the assessment of adequate duty performance is in
the nature of a management prerogative which when reasonably exercised, as the
petitioner did in this case, should be respected. Thus, the Court rules that
respondents status as a probationary employee and her consequent dismissal must
stand.
b. Yes. The rule is that when a valid cause for termination exists, the procedural
infirmity attending the termination only warrants the payment of nominal damages.
Hence, although the petitioner did not comply with its own termination procedure, its
non-compliance thereof would not detract from the finding that there subsists a valid
cause to terminate the respondents employment. The petitioner, however, should be
penalized for its contractual breach and thereby be ordered to pay nominal damages.
2011 NLRC RULES OF PROCEDURES
6. Nacar vs. Gallery Frames, G.R. No. 189871, August 13, 2013

Facts:
Petitioner filed a complaint in the NLRC for constructive dismissal against respondent. On
October 15, 1998, the Labor Arbiter (LA) rendered a decision in favor of the petitioner
and awarded the petitioner backwages and separation pay in lieu of reinstatement
totaling Php158,919.92.
Respondents appealed to the NLRC but the appeal was denied for lack of merit. The
petition and subsequent Motion for Reconsideration was likewise denied by the CA upon
appeal. The appeal to the SC was also denied, prompting the issuance of an Entry of
Judgment declaring the resolution to be final and executory. Thereafter, the case was
referred back to the LA. A pre-execution conference was consequently scheduled but the
respondents failed to appear.
Petitioner then filed a Motion for Correct Computation praying that his backwages be
computed from the date of his dismissal up to the finality of the Resolution of the SC
resulting to a total amount of Php471,320.31.
A Writ of Execution was later issued by the LA ordering the Sheriff to collect the updated
amount from the respondents. Respondents filed a Motion to Quash Writ of Execution but
this was denied by the LA. An appeal was filed before the NLRC and was subsequently
granted. Thereafter, an Entry of Judgment was issued declaring the Resolution of the
NLRC to be final and executory. Consequently, another pre-execution conference was
held but the respondents failed to appear on time.
Petitioner moved that an Alias Writ Execution be issued to enforce the earlier
recomputed judgment award in the sum of Php471,320.31. However, when the records
of the case were forwarded for re-computation, the reassessed amount was only
Php147,560.19.
Afterward, petitioner moved that a Writ of Execution be issued ordering respondents to
pay the original amount of Php158,919.92 as determined by the LA in his decision on
October 15, 1998. The LA then issued an Alias Writ of Execution to satisfy the judgment
award in the amount of Php147,560.19, which petitioner eventually received.
Petitioner subsequently filed a Manifestation and Motion praying for the re-computation
of the monetary award to include appropriate interests. This was later granted by the LA
but only up to the amount of Php11,459.73 which represents the difference between the
amount indicated in the LAs October 15, 1998 decision and the amount received by the
petitioner. Petitioner later appealed to the NLRC and then to the CA but the petitions
were denied.
Petitioner now appeals to the SC alleging since the October 15, 1998 decision of the LA
did not become final and executory until the SC Resolution was entered in the Book of
Entries on May 27, 2002, the reckoning point for the computation of the backwages and
separation pay should be May 27, 2002 instead of October 15, 1998. Further, petitioner
alleges that he is also entitled to the payment of interest from the finality of the decision
until full payment by the respondents.
Issue(s):
a. WON re-computation of the judgment award is necessary.
b. WON it constitutes a violation of the principle of immutability of final judgments.
c. WON the petitioner is entitled to interest payment.
Ruling:

a. Yes. A re-computation is necessary because the relief in an illegal dismissal decision

goes all the way up to reinstatement if reinstatement is to be made, or up to the
finality of the decision, if separation pay is to be given in lieu reinstatement.
In Session Delights Ice Cream and Fast Foods vs. Court of Appeals (Sixth Division),
the Court held that a decision on illegal dismissal cases essentially consist of two
parts. The first is that part of the decision that cannot now be disputed because it has
been confirmed with finality. This is the finding of the illegality of the dismissal and
the awards of separation pay in lieu of reinstatement, backwages, attorney's fees,
and legal interests. The second part is the computation of the awards made. This
part, being merely a computation of what the first part of the decision established
and declared, can, by its nature, be re-computed.
b. No. By the nature of an illegal dismissal case, the reliefs continue to add up until full
satisfaction, as expressed under Article 279 of the Labor Code. The re-computation of
the consequences of illegal dismissal upon execution of the decision does not
constitute an alteration or amendment of the final decision being implemented. The
illegal dismissal ruling stands; only the computation of monetary consequences of
this dismissal is affected, and this is not a violation of the principle of immutability of
final judgments.
c. Yes. Under BSP Circular No. 799, Series of 2013 when the judgment of the court
awarding a sum of money becomes final and executory, the rate of legal interest
shall be 6% per annum from such finality until its satisfaction. Since the revised legal
interest rate only became effective starting July 1, 2013, the interest of 12% per
annum of the total monetary awards shall be computed from May 27, 2002 to June
30, 2013 and 6% per annum from July 1, 2013 until their full satisfaction.
7. McBurnie vs. Ganzon, et. al., G.R. Nos. 178034 & 178117 & 186984-85, October
17, 2013
Facts:
Petitioner is an Australian national who claimed to have signed a five-year employment
agreement with the company EGI as an Executive Vice-President on May 11, 1999. He
performed work for the company until sometime in November 1999 when he figured in
an accident that compelled him to go back to Australia while recuperating from his
injuries. While in Australia, he was informed by respondent that his services were no
longer needed because their intended project would no longer push through.
A complaint for illegal dismissal and other monetary claims was then filed by petitioner.
This was opposed by the respondents alleging that their agreement with petitioner was
to jointly invest in and establish a company for the management of hotels. They further
alleged that they did not intend to create an employer-employee relationship and that
the execution of the employment contract was solely for the purpose of allowing
petitioner to obtain an alien work permit in the Philippines. Further, at the time the
petitioner left for Australia, he had not yet obtained a work permit.
Thereafter, the Labor Arbiter (LA) rendered a decision in favor of petitioner and awarded
the salary and benefits for the unexpired term of their employment amounting to
US$985,162.00, moral and exemplary damages amounting to Php2,000,000.00 and
attorneys fees equivalent to 10% of the total monetary award.
Respondents appealed the LAs decision to the NLRC and filed their Memorandum of
Appeal and Motion to reduce bond contending that the monetary awards were null and
excessive and posted an appeal bond amounting to Php100,000.00. The motion to

reduce bond was denied by the NLRC as the bond is unconditionally required under
Article 223 of the Labor Code. Thus, respondents elevated the matter to the Court of
Appeals via the Petition for Certiorari and Prohibition. The respondents appeal was also
denied due to their failure to post an additional bond required by the NLRC. This
prompted the respondents to file with the CA another Petition for. The two petitions filed
by the respondents were later consolidated by the CA.
Acting on the consolidated cases, the CA granted the respondents application for a Writ
of Preliminary Injunction to refrain the enforcement of the LAs decision. Thus, petitioner
filed with the Supreme Court a Petition for Review on Certiorari. However, this was
subsequently denied as petitioner failed to sufficiently show that the CA committed any
reversible error.
The CA also ruled on the merits of the petitions filed by the respondents and held that
the NLRC committed grave abuse of discretion in immediately denying the motion
without fixing an appeal bond that was reasonable. It held that Section 6, Rule VI of the
NLRC Rules of Procedure recognized as an exception a motion to reduce bond upon
meritorious grounds and upon posting of a bond in a reasonable amount in relation to
the monetary award. A motion for reconsideration was filed by the petitioner but it was
subsequently denied by the CA. This prompted petitioner to file to the SC a Petition for
Review on Certiorari.
The SC, acting on the petition filed by the petitioner, rendered a decision on September
18, 2009 in favor of the petitioner. The SC held that that the respondents failure to post
a bond equivalent in amount to the LAs monetary award was fatal to the appeal as
provided under Section 6, Rule VI of the NLRC Rules of Procedure. It held that unless the
NLRC grants the motion to reduce the cash bond within the 10-day reglementary period
to perfect an appeal from a judgment of the LA, the employer is mandated to post the
cash or surety bond securing the full amount within the said 10-day period. The
respondents initial appeal bond of P100,000.00 was grossly inadequate compared to the
LAs monetary award.
Issue(s):
WON the SC was correct in affirming the NLRCs decision.
Ruling:
No. Under Section 6, Rule VI of the 2011 NLRC Rules of Procedure, in case the decision of
the LA or the RD involves a monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond. The appeal bond shall either
be in cash or surety in an amount equivalent to the monetary award, exclusive of
damages and attorneys fees. Further, no motion to reduce bond shall be entertained
except on meritorious grounds and upon the posting of a bond in a reasonable amount in
relation to the monetary award. The filing of the motion to reduce bond without
compliance with the requisites shall not stop the running of the period to perfect an
appeal.
Anent the first requirement, the existence of a meritorious ground delves on the worth of
the parties arguments, taking into account their respective rights and the circumstances
that attend the case. By jurisprudence, the merit referred to may pertain to an
appellants lack of financial capability to pay the full amount of the bond, the merits of
the main appeal such as when there is a valid claim that there was no illegal dismissal to
justify the award, the absence of an employer-employee relationship, prescription of
claims, and other similarly valid issues that are raised in the appeal. For the purpose of
determining a meritorious ground, the NLRC is not precluded from receiving evidence, or
from making a preliminary determination of the merits of the appellants contentions.

In this case, the NLRC should have considered the respondents arguments in the
memorandum on appeal that was filed with the motion to reduce the requisite appeal
bond. It then committed a serious error when it denied outright the motion to reduce the
bond, without even considering the respondents arguments. Thus, it effectively denied
the respondents of their opportunity to seek a reduction of the bond even when the
same is allowed under the rules and settled jurisprudence.
As to the second requirement, the Court held that all motions to reduce bond shall be
accompanied by the posting of a cash or surety bond equivalent to 10% of the monetary
award that is subject of the appeal, which shall provisionally be deemed the reasonable
amount of the bond in the meantime that an appellants motion is pending resolution by
the NLRC. In conformity with the NLRC Rules, the monetary award, for the purpose of
computing the necessary appeal bond, shall exclude damages and attorneys fees. Only
after the posting of a bond in the required percentage shall an appellants period to
perfect an appeal under the NLRC Rules be deemed suspended.
In this case, the Court found the appeal bond required by the NLRC in the amount of
Php54,083,910.00 was prohibitive and excessive, which constitutes a meritorious ground
to allow a motion for reduction thereof.
MISCELLANEOUS PROVISIONS EMPLOYMENT OF
PERSONNEL IN PRIVATE EDUCATIONAL INSTITUTION

ACADEMIC/NON-ACADEMIC

8. Colegio Del Santisimo Rosario et. al., vs. Rojo, G.R. No. 170388, September 4,
2013
Facts:
Petitioner hired respondent as a high school teacher on probationary basis for the school
years 1992-1993, 1993-1994 and 1994-1995. However, on April 5, 1995, petitioner
decided not to renew respondents services. This prompted respondent to file a
complaint for illegal dismissal. Respondent, citing paragraph 75 of the 1970 Manual of
Regulations for Private Schools (1970 Manual), alleges that since he had served three
consecutive school years, he should be extended permanent employment. On the other
hand, petitioners argued that the respondent was not dismissed but that his
probationary contract merely expired on March 31, 1995 and was not renewed. Petitioner
further claimed that the three years indicated in the 1970 Manual refers to 36 months
and not three school years; and since the respondent only served for three school years
of 10 months each or a total of 30 months, then he had not served the required three
years or 36 months indicated in the manual.
The Labor Arbiter (LA) ruled that "three consecutive years" means three years of 10
months, not 12 months. Considering that respondent had already served for three
consecutive school years, then he has already attained regular employment status. Thus,
the non-renewal of his contract for school year 1995-1996 constitutes illegal dismissal.
The LA also found petitioners guilty of bad faith when they treated respondent's
termination merely as the expiration of the third employment contract and when they
insisted that the school board actually deliberated on the non-renewal of respondent's
employment without submitting admissible proof of his alleged regular performance
evaluation.
On appeal, the NLRC affirmed the LA's Decision with modification. It held that the
respondent had attained the status of regular employment because petitioner did not

make known to respondent the reasonable standards he should meet. The NLRC also
agreed with the LA that respondent's termination was done in bad faith.
In affirming the ruling of the NLRC, the CA held that the respondent has satisfied all the
requirements necessary to acquire permanent employment and security of tenure: (a)
the teacher is a full-time teacher; (b) the teacher must have rendered three consecutive
years of service; and (c) such service must be satisfactory.
Issue(s):
WON the respondent was illegally dismissed.
Ruling:
Yes. Teachers on probationary employment enjoy protection under the Manual of
Regulations for Private Schools (Manual) and the Labor Code, in a suppletory character.
Under Section 92 of the 1992 Manual, the probationary period for academic personnel
shall not be more than three consecutive years of satisfactory service for those in the
elementary and secondary levels.
On the other hand, Article 281 of the Labor Code provides that the services of an
employee who has been engaged on a probationary basis may be terminated for a just
cause or when he fails to qualify as a regular employee in accordance with reasonable
standards made known by the employer to the employee at the time of his engagement.
An employee who is allowed to work after a probationary period shall be considered a
regular employee. This provision is supported by Section 93 of the 1992 Manual which
provides that full-time teachers who have satisfactorily completed their probationary
period shall be considered regular or permanent.
The above provisions clearly provide that full-time teachers become regular employees
once they have satisfactorily completed the probationary period of three school years.
The use of the term satisfactorily necessarily connotes the requirement for schools to set
reasonable standards to be followed by teachers on probationary employment. These
standards should be made known to the teachers on probationary status at the start of
their probationary period, or at the very least, at the start of the semester or the
trimester during which the probationary standards are to be applied. Thus, if the
teachers have not been apprised of such reasonable standards at the time specified
above, they shall be deemed regular employees.
In this case, there was no evidence showing that the petitioner set reasonable standards
that respondent was expected to meet that could have served as proper guidelines in
evaluating his performance. Neither was it mentioned that the same were ever conveyed
to respondent. Further, there was no showing that petitioner provided a written notice to
the respondent within a reasonable time form the effective date of termination as
required under Book VI, Rule I, Section 2 of the IRR of the Labor Code. These flaws
violated the respondents right to due process. As such, his dismissal is, for all intents
and purposes, illegal.
MISCELLANEOUS PROVISIONS MIGRANT WORKERS ACT / RECRUITMENT AND
PLACEMENT
9. Hon. Sto. Tomas vs. Salac, et. al., G.R. Nos. 152642 & 152710, November 13,
2012
Facts:

On June 7, 1995, Congress enacted Republic Act No. 8042 or the Migrant Workers and
Overseas Filipinos Act of 1995 which sets the Governments policies on overseas
employment and establishes a higher standard of protection and promotion of the
welfare of migrant workers, their families and overseas Filipinos in distress.
Respondent Philippine Association of Service Exporters, Inc. filed a petition for
declaratory relief and prohibition with prayer for issuance of TRO and writ of preliminary
injunction before the RTC of Manila, seeking to annul Sections 6, 7, and 9 of R.A. 8042 for
being unconstitutional.
Thereafter, the Regional Trial Court (RCT) declared the assailed sections as
unconstitutional. The RTC held that Section 6 is unconstitutional since its definition of
"illegal recruitment" is vague as it fails to distinguish between licensed and non-licensed
recruiters in violation of the right to equal protection of those that operate with
government licenses. The RTC also declared Section 7 unconstitutional on the ground
that its sweeping application of the penalties failed to make any distinction as to the
seriousness of the act committed for the application of the penalty imposed on such
violation. Section 9 was also invalidated on the ground that it negates the general rule
on venue for criminal cases.
Meanwhile, in a separate case, the corporate directors and officers of Becmen Service
Exporter and Promotion, Inc. (Becmen) questioned the constitutionality of the last
sentence of the second paragraph of Section 10 of R.A. 8042 which holds the corporate
directors, officers and partners jointly and solidarily liable with their company for money
claims filed by OFWs against their employers and the recruitment firms. This was
prompted by the Court of Appeals decision in finding the corporate directors and officers
to be solidarily liable with their company for its failure to investigate the true nature and
death of Jasmin Cuaresma, who was recruited to be a staff nurse in Saudi Arabia.
Issue(s):
a. WON the RTC was correct in invalidating Sections 6, 7 and 9 of R.A. 8042.
b. WON the corporate directors and officers of Becmen are solidarily liable with the
company.
Ruling:
a. No. Anent Section 6, the Court held that the term illegal recruitment is clear and
unambiguous and actually makes a distinction between licensed and non-licensed
recruiters. By its terms, persons who engage in "canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers" without the appropriate
government license are guilty of illegal recruitment whether or not they commit the
wrongful acts enumerated in that section. On the other hand, recruiters who engage
in the canvassing, enlisting, etc. of OFWs, although with the appropriate government
license, are guilty of illegal recruitment only if they commit any of the wrongful acts
enumerated in Section 6.
As to Section 7, the Court held that in fixing uniform penalties for each of the
enumerated acts under Section 6, Congress was within its prerogative to determine
what individual acts are equally reprehensible, consistent with the State policy of
according full protection to labor, and deserving of the same penalties. It is not within
the power of the Court to question the wisdom of this kind of choice.
Lastly, with regards to Section 9, the Court held that there is nothing arbitrary or
unconstitutional in Congress fixing an alternative venue for violations of R.A. 8042
that differs from the venue established by the Rules on Criminal Procedure. The
exception provided under Section 9 is consistent with the laws declared policy of

providing a criminal justice system that protects and serves the best interests of the
victims of illegal recruitment.
b. No. The Court held that the liability of the corporate directors and officers is not
automatic under Section 10 of R.A. 8042. There must be a finding that they were
amiss in directing the affairs of that company, such as sponsoring or tolerating the
conduct of illegal activities. In this case, while there is evidence that the company
was at fault in not investigating the cause of Jasmins death, there is no mention of
any evidence in the case against them that the corporate officers and directors were
personally involved in their companys particular actions or omissions in Jasmins
case.
10.Sameer Overseas Placement Agency, Inc. vs. Joy C. Cabilles, G.R. No. 170139,
August 5, 2014
Facts:
Petitioner is a recruitment and placement agency. It accepted the respondents
application for a quality control job in Taiwan and later asked respondent to sign a oneyear employment contract as well as required payment of a placement fee.
Respondent was deployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal) on June 26, 1997;
however, in Taiwan, she was asked to work as a cutter.
Petitioner claims that on July 14, 1997, a certain Mr. Huwang from Wacoal informed
respondent, without prior notice, that she was terminated. Respondent claims that she
was told that she only earned a total of NT$9,000 and that Wacoal deducted NT$3,000 to
cover her plane ticket to Manila.
On October 15, 1997, respondent filed a complaint with the NLRC against petitioner and
Wacoal for illegal dismissal. In response to the complaint, petitioner alleged that the
respondents termination was due to her inefficiency, negligence in her duties and her
failure to comply with the work requirements of her foreign employer. Petitioner also
denied the payment of placement fee.
Thereafter, the Labor Arbiter ruled that the respondents complaint was based on mere
allegations and dismissed the complaint. Upon appeal, the NLRC declared respondent to
have been illegally dismissed since petitioner failed to prove that existence of a just
cause for termination and compliance with procedural due process. It awarded
respondent only three months worth of salary, the reimbursement of the amount
withheld and attorneys fees. The NLRCs decision was later affirmed by the CA.
Issue(s):
a. WON the award of only three months worth of salary was correct.
b. WON BSP Circular No. 799, which was issued on June 21, 2003, should be applied.
Ruling:
a. No. Section 10 of Republic Act No. 8042 states that overseas workers who were
terminated without just, valid, or authorized cause shall be entitled to the full
reimbursement of his placement fee with interest of 12% per annum, plus his salaries
for the unexpired portion of his employment contract or for 3 months for every year
of the unexpired term, whichever is less.
However, in Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co.,
Inc., the court ruled that the clause "or for three (3) months for every year of the

unexpired term, whichever is less" is unconstitutional for violating the equal

protection clause and substantive due process. Thus, the award of the three-month
equivalent of respondent's salary should be increased to the amount equivalent to
the unexpired term of the employment contract.
The further reinstatement of the same clause in Republic Act No. 10022, promulgated
on March 8, 2010, was also struck down for being unconstitutional as it violates the
constitutional rights to equal protection and due process. There was no showing of
any compelling change in the circumstances that would warrant the revisit of the
precedent. Further, overseas workers regardless of their classifications are entitled to
security of tenure, at least for the period agreed upon in their contracts. This means
that they cannot be dismissed before the end of their contract terms without due
process. If they were illegally dismissed, the workers' right to security of tenure is
violated.
b. BSP Circular No. 799 revised the interest rate for loan or forbearance from 12% to
6%, in the absence of stipulation, effective July 1, 2013. However, this should only be
applied when the law does not provide for a specific interest rate. It is not applicable
when there is a law that states otherwise.
Under Section 10 of Republic Act No. 8042, unlawfully terminated overseas workers
are entitled to the reimbursement of his or her placement fee with an interest of 12%
per annum. Since BSP circulars cannot repeal Republic Act No. 8042, the issuance of
Circular No. 799 does not have the effect of changing the interest on awards for
reimbursement of placement fees from 12% to 6%.
Moreover, laws are deemed incorporated in contracts. There is, therefore, an implied
stipulation in contracts between the placement agency and the overseas worker that
in case the overseas worker is adjudged as entitled to reimbursement of his or her
placement fees, the amount shall be subject to a 12% interest per annum. This
implied stipulation has the effect of removing awards for reimbursement of
placement fees from Circular No. 799's coverage.
However, the same cannot be said for awards of salary for the unexpired portion of
the employment contract under Republic Act No. 8042. These awards are covered by
Circular No. 799 because the law does not provide for a specific interest rate that
should apply.