BASIC PRINCIPLES

Tesoro et al., vs. Metro Manila Retreaders Inc., et al.

GR No. 171482, March 12, 2014
This case concerns the effect on the status of employment of
employees who entered into a Service Franchise Agreement with their
employer.
Facts:
On various dates between 1991 and 1998, petitioners Ashmor M.
Tesoro, Pedro Ang, and Gregorio Sharp used to work as salesmen for
respondents Metro Manila Retreaders, Inc., Northern Luzon Retreaders,
Inc., or Power Tire and Rubber Corporation. These are sister companies
collectively called Bandag. Bandag offered repair and retread
services for used tires. In 1998, however, Bandag developed a
franchising scheme that would enable others to operate tire and
retreading businesses using its trade name and service system.
Petitioners quit their jobs as salesmen and entered into separate
Service Franchise Agreements (SFAs) with Bandag for the operation of
their respective franchises. Under this SFA, Bandag would provide
funding with the petitioners subject to regular liquidation of revolving
funds. The expenses of these funds will be deducted from their sale in
order to determine their income. After some time, petitioners began to
default on their obligations to submit periodic liquidations of their
operational expenses in relation to the revolving funds Bandag
provided them. Bandag terminated their SFA.
Aggrieved, petitioners filed a complaint for constructive dismissal, non
payment of wages, incentive pay, 13th month pay and damages
against Bandag with the National Labor Relations Commission (NLRC).
Petitioners contend that despite the SFA, they remained employees of
Bandag. For its part, Bandag pointed out that petitioners freely
resigned from their employment and decided to avail themselves of
the opportunity to be independent entrepreneurs under the franchise
scheme that Bandag had. Thus, no employeremployee relationship
existed between petitioners and Bandag.
Issue:
Whether or not petitioners remained to be Bandags salesmen under
the franchise scheme it entered into with them.
Ruling:
No, petitioners were no longer employees of Bandag the moment they
entered into the SFA. Franchising is a business method of expansion
that allows an individual or group of individuals to market a product or
a service and to use of the patent, trademark, trade name and the
systems prescribed by the owner.
The tests for determining employeremployee relationship are: (a) the
selection and engagement of the employee; (b) the payment of wages;
(c) the power of dismissal; and (d) the employers power to control the
employee with respect to the means and methods by which the work is
to be accomplished. The last is called the control test, the most
important element.

When petitioners agreed to operate Bandags franchise branches in

different parts of the country, they knew that this substantially
changed their former relationships. They were to cease working as
Bandags salesmen, the positions they occupied before they ventured
into running separate Bandag branches. They were to cease receiving
salaries or commissions. Their incomes were to depend on the profits
they made. Yet, petitioners did not then complain of constructive
dismissal. They took their chances, ran their branches, Gregorio Sharp
in La Union for several months and Ashmor Tesoro in Baguio and Pedro
Ang in Pangasinan for over a year. Clearly, their belated claim of
constructive dismissal is quite hollow.
It is pointed out that Bandag continued, like an employer, to exercise
control over petitioners work. It points out that Bandag: (a) retained
the right to adjust the price rates of products and services; (b) imposed
minimum processed tire requirement (MPR); (c) reviewed and
regulated credit applications; and (d) retained the power to suspend
petitioners services for failure to meet service standards. But
uniformity in prices, quality of services, and good business practices
are the essence of all franchises. A franchisee will damage the
franchisors business if he sells at different prices, renders different or
inferior services, or engages in bad business practices. These business
constraints are needed to maintain collective responsibility for faultless
and reliable service to the same class of customers for the same
prices.
This is not the control contemplated in employeremployee
relationships. Control in such relationships addresses the details of day
to day work like assigning the particular task that has to be done,
monitoring the way tasks are done and their results, and determining
the time during which the employee must report for work or
accomplish his assigned task.
Petitioners cannot use the revolving funds feature of the SFAs as
evidence of their employeremployee relationship with Bandag. These
funds do not represent wages. They are more in the nature of capital
advances for operations that Bandag conceptualized to attract
prospective franchisees. Petitioners incomes depended on the profits
they make, controlled by their individual abilities to increase sales and
reduce operating costs.
Royale Homes Marketing Corp., vs. Alcantara
GR No. 195190, July 28, 2014

Handwritten
SAMEER OVERSEAS PLACEMENT AGENCY, INC. vs. JOY C.
CABILES
G.R. No. 170139, August 5, 2014

Fuji Television Network vs. Espiritu

GR No. 204944-45, Dec. 3, 2014

Cabaobas vs. Pepsicola

GR No. 176908, March 25, 2015

WAGES & WAGE RATIONALIZATION ACT

Vergara, Jr. vs. Coca-Cola Bottlers Phils Inc.
G.R. No. 176985, April 1, 2013
Fact:
Petitioner Ricardo E. Vergara, Jr. was an employee of respondent CocaCola Bottlers Philippines, Inc. from May 1968 until he retired on
January 31, 2002 as a District Sales Supervisor (DSS) for Las
Pias City, Metro Manila.

As stipulated in respondent's existing Retirement Plan Rules and

Regulations at the time, the Annual Performance Incentive Pay of
RSMs, DSSs, and SSSs shall be considered in the computation of
retirement benefits, as follows: Basic Monthly Salary + Monthly
Average Performance Incentive (which is the total performance
incentive earned during the year immediately preceding 12
months) No. of Years in Service.

Claiming his entitlement to an additional PhP474,600.00 as

Sales Management Incentives (SMI) and to the amount of
PhP496,016.67 which respondent allegedly deducted illegally,
representing the unpaid accounts of two dealers within his jurisdiction,
petitioner filed a complaint before the NLRC on June 11, 2002 for the
payment of his "Full Retirement Benefits, Merit Increase,
Commission/Incentives, Length of Service, Actual, Moral and Exemplary
Damages, and Attorney's Fees."

(Apparently, Petitioner argued that the granting of SMI to all retired

DSSs regardless of whether or not they qualify to the same had
ripened into company practice. The only two pieces of evidence that he
stubbornly presented throughout the entirety of this case are the sworn
statements of Renato C. Hidalgo (Hidalgo) and Ramon V. Velazquez
(Velasquez), former DSSs of respondent who retired in 2000 and 1998,
respectively. They claimed that the SMI was included in their

retirement package even if they did not meet the sales and collection
qualifiers. Therefore, the failure of employer to grant him his SMI is a
violation on the principle of non-diminution of benefits.)

Issue:
WON the granting of SMI to all retired DSSs regardless of whether or
not they qualify to the same had ripened into company practice

Ruling:
Generally, employees have a vested right over existing benefits
voluntarily granted to them by their employer. Thus, any benefit and
supplement being enjoyed by the employees cannot be reduced,
diminished, discontinued or eliminated by the employer. The principle
of non-diminution of benefits is actually founded on the Constitutional
mandate to protect the rights of workers, to promote their welfare, and
to afford them full protection. In turn, said mandate is the basis of
Article 4 of the Labor Code which states that "all doubts in the
implementation and interpretation of this Code, including its
implementing rules and regulations, shall be rendered in favor of
labor."
There is diminution of benefits when the following
requisites are present:
1. the grant or benefit is founded on a policy or has ripened into a
practice over a long period of time;
2. the practice is consistent and deliberate;
3. the practice is not due to error in the construction or application
of a doubtful or difficult question of law; and
4. The diminution or discontinuance is done unilaterally by the
employer.

To be considered as a regular company practice, the employee must

prove by substantial evidence that the giving of the benefit is done
over a long period of time, and that it has been made consistently and
deliberately. Jurisprudence has not laid down any hard-and-fast rule as
to the length of time that company practice should have been
exercised in order to constitute voluntary employer practice. The
common denominator in previously decided cases appears to be the
regularity and deliberateness of the grant of benefits over a significant

period of time. It requires an indubitable showing that the employer

agreed to continue giving the benefit knowing fully well that the
employees are not covered by any provision of the law or agreement
requiring payment thereof. In sum, the benefit must be characterized
by regularity, voluntary and deliberate intent of the employer to grant
the benefit over a considerable period of time.

Upon review of the entire case records, We find no substantial

evidence to prove that the grant of SMI to all retired DSSs
regardless of whether or not they qualify to the same had
ripened into company practice.

The granting of the SMI in the retirement package of Velazquez was an

isolated incident and could hardly be classified as a company practice
that may be considered an enforceable obligation. To repeat, the
principle against diminution of benefits is applicable only if the
grant or benefit is founded on an express policy or has ripened
into a practice over a long period of time which is consistent
and deliberate; it presupposes that a company practice, policy
and tradition favorable to the employees has been clearly
established; and that the payments made by the company
pursuant to it have ripened into benefits enjoyed by
them. Certainly, a practice or custom is, as a general rule, not a
source of a legally demandable or enforceable right. Company
practice, just like any other fact, habits, customs, usage or patterns of
conduct, must be proven by the offering party who must allege and
establish specific, repetitive conduct that might constitute evidence of
habit or company practice.

Royal Plant Workers Union vs. Coca-Cola Bottlers Phils Inc.

-Cebu Plant
G.R. No. 198783, April 15, 2013
Facts:
Under the employ of each bottling plant of Coca-Cola are bottling
operators. In the case of the plant in Cebu City, there are 20 bottling
operators who work for its Bottling Line 1 while there are 12-14 bottling
operators who man its Bottling Line 2. All of them are male and they
are members of herein respondent Royal Plant Workers Union
(ROPWU).

In 1974, the bottling operators of then Bottling Line 2 were provided

with chairs upon their request. In 1988, the bottling operators of then
Bottling Line 1 followed suit and asked to be provided also with chairs.
Their request was likewise granted. Sometime in September 2008, the
chairs provided for the operators were removed pursuant to a national
directive of petitioner. This directive is in line with the "I Operate, I
Maintain, I Clean" program of petitioner for bottling operators, wherein
every bottling operator is given the responsibility to keep the
machinery and equipment assigned to him clean and safe. The
program reinforces the task of bottling operators to constantly move
about in the performance of their duties and responsibilities.

With this task of moving constantly to check on the machinery and

equipment assigned to him, a bottling operator does not need a chair
anymore, hence, petitioners directive to remove them. Furthermore,
CCBPI rationalized that the removal of the chairs is implemented so
that the bottling operators will avoid sleeping, thus, prevent injuries to
their persons. As bottling operators are working with machines which
consist of moving parts, it is imperative that they should not fall asleep
as to do so would expose them to hazards and injuries. In addition,
sleeping will hamper the efficient flow of operations as the bottling
operators would be unable to perform their duties competently.

Issue:
Whether or not the removal of the bottling operators chairs was a
valid exercise of management prerogative. ---YES

Ruling:
According to the Union, such removal constitutes a violation of the 1)
Occupational Health and Safety Standards which provide that every
worker is entitled to be provided by the employer with appropriate
seats, among others; 2) policy of the State to assure the right of
workers to a just and humane condition of work as provided for in
Article 3 of the Labor Code;8 3) Global Workplace Rights Policy of
CCBPI which provides for a safe and healthy workplace by maintaining
a productive workplace and by minimizing the risk of accident, injury
and exposure to health risks; and 4) diminution of benefits provided in
Article 100 of the Labor Code.

The Court has held that management is free to regulate, according to

its own discretion and judgment, all aspects of employment, including
hiring, work assignments, working methods, time, place, and manner
of work, processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, lay-off of workers,
and discipline, dismissal and recall of workers. The exercise of
management prerogative, however, is not absolute as it must be
exercised in good faith and with due regard to the rights of labor.10

In the present controversy, it cannot be denied that CCBPI removed the

operators chairs pursuant to a national directive and in line with its "I
Operate, I Maintain, I Clean" program, launched to enable the Union to
perform their duties and responsibilities more efficiently. The chairs
were not removed indiscriminately. They were carefully studied with
due regard to the welfare of the members of the Union. The removal of
the chairs was compensated by: a) a reduction of the operating hours
of the bottling operators from a two-and-one-half (2 )-hour rotation
period to a one-and-a-half (1 ) hour rotation period; and b) an
increase of the break period from 15 to 30 minutes between rotations.
Apparently, the decision to remove the chairs was done with good
intentions as CCBPI wanted to avoid instances of operators sleeping on
the job while in the performance of their duties and responsibilities and
because of the fact that the chairs were not necessary considering that
the operators constantly move about while working. In short, the
removal of the chairs was designed to increase work efficiency. Hence,
CCBPIs exercise of its management prerogative was made in good
faith without doing any harm to the workers rights.

The rights of the Union under any labor law were not violated. There is
no law that requires employers to provide chairs for bottling operators.
There was no violation either of the Health, Safety and Social Welfare
Benefit provisions under Book IV of the Labor Code of the Philippines.
As shown in the foregoing, the removal of the chairs was compensated
by the reduction of the working hours and increase in the rest period.
The directive did not expose the bottling operators to safety and health
hazards.

The Union should not complain too much about standing and moving
about for one and one-half (1 ) hours because studies show that
sitting in workplaces for a long time is hazardous to ones health. The
CBA between the Union and CCBPI contains no provision whatsoever
requiring the management to provide chairs for the operators in the

production/manufacturing line while performing their duties and

responsibilities.

The Court completely agrees with the CA ruling that the removal of the
chairs did not violate the general principles of justice and fair play
because the bottling operators working time was considerably reduced
from two and a half (2 ) hours to just one and a half (1 ) hours and
the break period, when they could sit down, was increased to 30
minutes between rotations. The bottling operators new work schedule
is certainly advantageous to them because it greatly increases their
rest period and significantly decreases their working time. A break time
of thirty (30) minutes after working for only one and a half (1 ) hours
is a just and fair work schedule.
The operators chairs cannot be considered as one of the employee
benefits covered in Article 10016 of the Labor Code. In the Courts
view, the term "benefits" mentioned in the non-diminution rule refers
to monetary benefits or privileges given to the employee with
monetary equivalents.

Such benefits or privileges form part of the employees wage, salary or

compensation making them enforceable obligations.

This Court has already decided several cases regarding the nondiminution rule where the benefits or privileges involved in those cases
mainly concern monetary considerations or privileges with monetary
equivalents. Without a doubt, equating the provision of chairs to the
bottling operators is something within the ambit of "benefits'' in the
context of Article 100 of the Labor Code is unduly stretching the
coverage of the law. The interpretations of Article 100 of the Labor
Code do not show even with the slightest hint that such provision of
chairs for the bottling operators may be sheltered under its mantle.

Maynilad Water Supervisors Asso. Vs. Maynilad Water Services

GR No.198935, Nov. 27, 2013

National Wages & Productivity Commission et al., vs. The

Alliance of Progressive Labor et al.
GR No. 150326, March 12, 2014

Facts: On June 9, 1989, Republic Act No. 6727 was enacted into law. In
order to rationalize wages throughout the Philippines, Republic Act No.
6727 created the NWPC and the RTWPBs of the different regions.
Article 121 of the Labor Code, as amended by Section 3 of Republic Act
No. 6727, empowered the NWPC to formulate policies and guidelines
on wages, incomes and productivity improvement at the enterprise,
industry and national levels; to prescribe rules and guidelines for the
determination of appropriate minimum wage and productivity
measures at the regional, provincial or industry levels; and to review
regional wage levels set by the RTWPBs to determine whether the
levels were in accordance with the prescribed guidelines and national
development plans, among others.
On the other hand, Article 122(b) of the Labor Code, also amended by
Section 3 of Republic Act No. 6727, tasked the RTWPBs to determine
and fix minimum wage rates applicable in their region, provinces or
industries therein; and to issue the corresponding wage orders, subject
to the guidelines issued by the NWPC.
Consequently, the RTWPBNCR issued Wage Order No. NCR07 on
October 14, 1999 imposing an increase of P25.50/day on the wages of
all private sector workers and employees in the NCR and pegging the
minimum wage rate in the NCR at P223.50/day. 6 However, Section 2
and Section 9 of Wage Order No. NCR07 exempted certain sectors
and industries from its coverage
Section 2. The adjustment in this Order does not cover the
following:
A. [W]orkers in the following sectors which were granted
corresponding wage increases on January 1, 1999 as
prescribed by Wage Order No. NCR06:
a.1. Agriculture workers
P12.
Plantation
00
P18.
Nonplantation
50
a.2. Cottage/handicraft industry

P16.
00

a.3. Private hospitals with bed capacity of

100 or less

P12.
00

a.4. Retail/Service establishments

Employing 1115 workers
Employing not more than 10
workers

P12.
00
P19.
00

B. Workers in small establishments employing less that ten

(10) workers.
xxxx

Section 9. Upon application with and as determined by the

Board, based on documentation and other requirements in
accordance with applicable rules and regulations issued by
the Commission, the following may be exempt from the
applicability of this Order:
1. Distressed establishments as defined
Guidelines No. 01, series of 1996;

in

the

NPWC

2. Exporters including indirect exporters with at least 50%

export sales and with forward contracts with their foreign
buyers/principals entered into on or twelve (12) months
before the date of publication of this Order may be exempt
during the lifetime of said contract but not to exceed
twelve (12) months from the effectivity of this Order.
Feeling aggrieved by their noncoverage by the wage adjustment, the
Alliance of Progressive Labor (APL) and the Tunay na Nagkakaisang
Manggagawa sa Royal (TNMR) filed an appeal with the NWPC assailing
Section 2(A) and Section 9(2) of Wage Order No. NCR07. They
contended that neither the NWPC nor the RTWPBNCR had the
authority to expand the noncoverage and exemptible categories
under the wage order; hence, the assailed sections of the wage order
should be voided.
The NWPC upheld the validity of Section 2(A) and Section 9(2) of Wage
Order No. NCR07. It observed that the RTWPBs power to determine
exemptible categories was adjunct to its wage fixing function
conferred by Article 122(e) of the Labor Code, as amended by
Republic Act No. 6727; that such authority of the RTWPB was also
recognized in NWPC Guidelines No. 01, Series of 1996.
The APL and TNMR assailed the decisions of the NWPC on certiorari in
the CA, contending that the power of the RTWPBNCR to determine
exemptible categories was not an adjunct to its wage fixing function.
CA favored the respondents and granted the petition
for certiorari.
Hence, this appeal by petition for review on certiorari by the NWPC and
RTWPBNCR.
Issue: Whether or not the RTWPBNCR had
Ruling: the RTWPBNCR had the authority to provide additional
exemptions from the minimum wage adjustments embodied in Wage
Order No. NCR07
The NWPC promulgated NWPC Guidelines No. 00195 (Revised Rules of
Procedure on Minimum Wage Fixing) to govern the proceedings in the
NWPC and the RTWPBs in the fixing of minimum wage rates by region,
province and industry. Section 1 of Rule VIII of NWPC Guidelines No.
00195 recognized the power of the RTWPBs to issue exemptions from
the application of the wage orders subject to the guidelines issued by
the NWPC

(this is the rationale behind exemption)

SECTION 2. CATEGORIES OF EXEMPTIBLE ESTABLISHMENTS
Exemption of establishments from compliance with the wage increases
and cost of living allowances prescribed by the Boards may be granted
in order to (1) assist establishments experiencing temporary difficulties
due to losses maintain the financial viability of their businesses and
continued employment of their workers; (2) encourage the
establishment of new businesses and the creation of more jobs,
particularly in areas outside the National Capital Region and Export
Processing Zones, in line with the policy on industry dispersal; and (3)
ease the burden of micro establishments, particularly in the retail and
service sector, that have a limited capacity to pay.
The following categories of establishments may be exempted upon
application with and as determined by the Board:
1. Distressed establishments
2. New business enterprises (NBEs)
3. Retail/Service establishments employing not more than ten (10)
workers
4. Establishments adversely affected by natural calamities
Under the guidelines, the RTWPBs could issue exemptions from the
application of the wage orders as long as the exemptions complied
with the rules of the NWPC. In its rules, the NWPC enumerated four
exemptible establishments, but the list was not exclusive. The
RTWPBs had the authority to include in the wage orders establishments
that belonged to, or to exclude from the four enumerated exemptible
categories.
If the exemption was outside of the four exemptible categories, like
here, the exemptible category should be: (1) in accord with the
rationale for exemption; (2) reviewed/approved by the NWPC; and (3)
upon review, the RTWPB issuing the wage order must submit a strong
and justifiable reason or reasons for the inclusion of such category. It
is the compliance with the second requisite that is at issue
here.
The NWPC, in arriving at its decision, weighed the arguments of the
parties and ruled that the RTWPBNCR had substantial and justifiable
reasons in exempting the sectors and establishments enumerated in
Section 2(A) and Section 9(2) based on the public hearings and
consultations, meetings, socialeconomic data and informations
gathered prior to the issuance of Wage Order No. NCR07. The very
fact that the validity of the assailed sections of Wage Order
No. NCR07 had been already passed upon and upheld by the
NWPC meant that the NWPC had already given the wage order
its necessary legal imprimatur. Accordingly, the requisite
approval or review was complied with.
The RTWPBs are the thinking group of men and women guided by
statutory standards and bound by the rules and guidelines prescribed
by the NWPC. In the nature of their functions, the RTWPBs investigate
and study all the pertinent facts to ascertain the conditions in their
respective regions. Hence, they are logically vested with the

competence to determine the applicable minimum wages to be

imposed as well as the industries and sectors to exempt from the
coverage of their wage orders.
Lastly, Wage Order No. NCR07 is presumed to be regularly issued in
the absence of any strong showing of grave abuse of discretion on the
part of RTWPBNCR. The presumption of validity is made stronger by
the fact that its validity was upheld by the NWPC upon review.
Our Haus Realty Development Corp., vs. Parian et al.
GR No. 204651, August 6, 2014

Vivares vs. St. Theresa College

GR No. 202666, Sept. 29, 2014

WAGE ENFORCEMENT AND RECOVERY

Handwritten
Peoples Broadcasting (Bombo Radyo Phils) vs. Sec of DOLE et
al.
March 6, 2012 Resolution on the main Decision of May 8, 2009
Facts:
Jandeleon Juezan (Juezan) filed a complaint before the DOLE against
Bombo Radyo Phils. (Bombo Radyo) for illegal deduction, nonpayment of service incentive leave, 13th 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.
On the basis of the complaint, the DOLE conducted a plant level
inspection. The Labor Inspector in his report wrote, Management
representative informed that (Juezan) complainant is a drama talent
hired on a per drama participation basis hence no employer-employer
relationship existed between them. As proof of this, management
presented photocopies of cash vouchers, billing statement,
employments of specific undertaking, etc. The management has no
control of the talent if he ventures into another contract with other
broadcasting industries.
Issue: Whether or not the Secretary of Labor has the power to
determine the existence of an employer-employee relationship.
Ruling:
Yes. No limitation in the law was placed upon the power of the DOLE to
determine the existence of an employer-employee relationship. No
procedure was laid down where the DOLE would only make a

preliminary finding, that the power was primarily held by the

NLRC. The law did not say that the DOLE would first seek the NLRCs
determination of the existence of an employer-employee relationship,
or that should the existence of the employer-employee relationship be
disputed, the DOLE would refer the matter to the NLRC. The DOLE
must have the power to determine whether or not an employeremployee relationship exists, and from there to decide whether or not
to issue compliance orders in accordance with Art. 128(b) of the Labor
Code, as amended by RA 7730.
The DOLE, in determining the existence of an employer-employee
relationship, has a ready set of guidelines to follow, the same guide the
courts themselves use. The elements to determine the existence of an
employment relationship are: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; (4)
the employers power to control the employees conduct. The use of
this test is not solely limited to the NLRC. The DOLE Secretary, or his or
her representatives, can utilize the same test, even in the course of
inspection, making use of the same evidence that would have been
presented before the NLRC.
The determination of the existence of an employer-employee
relationship by the DOLE must be respected. The expanded visitorial
and enforcement power of the DOLE granted by RA 7730 would be
rendered nugatory if the alleged employer could, by the simple
expedient of disputing the employer-employee relationship, force the
referral of the matter to the NLRC. The Court issued the declaration
that at least a prima facie showing of the absence of an employeremployee relationship be made to oust the DOLE of jurisdiction. But it
is precisely the DOLE that will be faced with that evidence, and it is the
DOLE that will weigh it, to see if the same does successfully refute the
existence of an employer-employee relationship.
If the DOLE makes a finding that there is an existing employeremployee 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.
It must also be remembered that the power of the DOLE to determine
the existence of an employer-employee relationship need not
necessarily result in an affirmative finding. The DOLE may well make
the determination that no employer-employee relationship exists, thus
divesting itself of jurisdiction over the case. It must not be precluded
from being able to reach its own conclusions, not by the parties, and
certainly not by this Court.
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, subject to judicial review, not review by the

NLRC.
To recapitulate, if a complaint is brought before the DOLE to give effect
to the labor standards provisions of the Labor Code or other labor
legislation, and there is a finding by the DOLE that there is an existing
employer-employee relationship, the DOLE exercises jurisdiction to the
exclusion of the NLRC. If the DOLE finds that there is no employeremployee relationship, the jurisdiction is properly with the NLRC. If a
complaint is filed with the DOLE, and it is accompanied by a claim for
reinstatement, the jurisdiction is properly with the Labor Arbiter, under
Art. 217(3) of the Labor Code, which provides that the Labor Arbiter
has original and exclusive jurisdiction over those cases involving
wages, rates of pay, hours of work, and other terms and conditions of
employment, if accompanied by a claim for reinstatement. If a
complaint is filed with the NLRC, and there is still an existing employeremployee 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.

Superior Packaging Corp., vs. Balagsay et al.

G.R. No. 178909, October 10, 2012
Facts: The petitioner engaged the services of Lancer to provide
reliever services to its business, which involves the manufacture and
sale of commercial and industrial corrugated boxes. According to
petitioner, the respondents were engaged for four (4) months from
February to June 1998 and their tasks included loading, unloading and
segregation of corrugated boxes.

Thereafter, respondents filed complaint against the petitioner and

President, Cesar Luz (Luz), for underpayment of wages, non-payment
of premium pay for worked rest, overtime pay and non-payment of
salary. Upon receipt Department of Labor and Employment (DOLE)
conducted an inspection of the petitioners premises and found several
violations, to wit:
(1)Non-presentation of payrolls and daily time records;
(2)Non-submission of annual report of safety organization;
(3)Medical and accident/illness reports;
(4)Non-registration of establishment under
Occupational and Health Standards; and
(5)No trained first aide.

Rule

1020

of

Due to the petitioners failure to appear in the summary investigations

conducted by the DOLE, an Order was issued on June 18, 2003 finding
in favor of the respondents and adopting the computation of the claims
submitted. Petitioner and Luz were ordered, among others, to pay
respondents their total claims in the amount of Eight Hundred Forty
Thousand Four Hundred Sixty-Three Pesos and 38/100 (P 840,463.38).

Petitioner filed a motion for reconsideration on the ground that

respondents are not its employees but of Lancer and that they pay
Lancer in lump sum for the services rendered. The DOLE, however,
denied its motion because petitioner failed to support its claim that the
respondents are not its employees, and even assuming that they were
employed by Lancer, the petitioner still cannot escape liability as
Section 13 of the Department Order No. 10, Series of 1997, makes a
principal jointly and severally liable with the contractor to contractual
employees to the extent of the work performed when the contractor
fails to pay its employees wages.

Their appeal to the Secretary of DOLE was dismissed thus, l petitioner

and Luz filed a petition for certiorari with the Court of Appeals (CA).

On November 17, 2006, the CA affirmed the Secretary of DOLEs orders,

with the modification in that Luz was absolved of any personal liability
under the award.
Hence, this petition for review under Rule 45 of the Rules of Court.

Issue: Whether or not DOLE has authority to determine the existence

of an employer-employee relationship? Whether Superior Packaging
Corporation may be held solidarily liable with Lancer Staffing &
Services Network, Inc. (Lancer) for respondents unpaid money claims?

Ruling: The petition is bereft of merit.

The DOLE clearly acted within its authority when it determined the
existence of an employer-employee relationship between the petitioner
and respondents as it falls within the purview of its visitorial and

enforcement power under Article 128(b) of the Labor Code. The

determination of the existence of an employer-employee relationship
by the DOLE must be respected.

With regard to the contention that there is no evidence to support the

finding that the respondents rendered overtime work and that they
worked on their rest day, the resolution of this argument requires a
review of the factual findings and the evidence presented, Court said
that it is not a trier of facts and it applies with greater force in labor
cases. Hence, where the factual findings of the labor tribunals or
agencies conform to, and are affirmed by, the CA, the same are
accorded respect and finality, and are binding to Supreme Court.

It was the consistent conclusion of the DOLE and the CA that Lancer
was not an independent contractor but was engaged in "labor-only
contracting"; hence, the petitioner was considered an indirect
employer of respondents and liable to the latter for their unpaid money
claims.

At the time of the respondents employment in 1998, the applicable

regulation was DOLE Department Order No. 10, Series of 1997. Under
said Department Order, labor-only contracting was defined as follows:
Sec. 9. Labor-only contracting. (a) Any person who undertakes to
supply workers to an employer shall be deemed to be engaged in
labor-only contracting where such person:
(1) Does not have substantial capital or investment in the form of
tools, equipment, machineries, work premises and other materials;
and
(2) The workers recruited and placed by such persons are
performing activities which are directly related to the principal
business or operations of the employer in which workers are
habitually employed.

Labor-only contracting is prohibited and the person acting as

contractor shall be considered merely as an agent or intermediary of
the employer who shall be responsible to the workers in the same
manner and extent as if the latter were directly employed by him.

According to the CA, the totality of the facts and surrounding

circumstances of this case point to such conclusion that Lancer was,
indeed, a labor-only contractor. Aside from these is the undisputed fact
that the petitioner failed to produce any written service contract that
might serve as proof of its alleged agreement with Lancer.

Finally, a finding that a contractor is a "labor-only" contractor is

equivalent to declaring that there is an employer-employee
relationship between the principal and the employees of the supposed
contractor, and the "labor only" contractor is considered as a mere
agent of the principal, the real employer. The former becomes
solidarily liable for all the rightful claims of the employees.

Petitioner therefore, being the principal employer and Lancer, being

the labor-only contractor, are solidarily liable for respondents unpaid
money claims.

WAGE PROTECTION PROVISIONS & PROHIBITIONS REGARDING

WAGES

Locsin II vs. Mekeni Food Corp.

GR No. 192105, December 9, 2013
Facts: Petitioner Antonio Locsin II was the Regional Sales Manager of
respondent Mekeni Food Corporation. He was hired on February 2004
to oversee the NCR and Luzon operation. In addition to his
compensation and benefit package, a car was offered to him under
which one-half of the cost of the vehicle is to be paid by the company
and the other half to be deducted from petitioner's salary. The car
valued at 280,000 which Locsin paid through salary deductions of
5,000 per month.
On February 2006, Locsin resigned. A total of 112,500.00 had already
been deducted from his monthly salary and applied as part of his share
in the car plan. Upon resignation, petitioner made personal and written
follow-ups regarding his unpaid salaries, commissions, benefits, and
offer to purchase his service vehicle. Mekeni replied that the company
car plan benefit applied only to employees who have been with the
company for five years; for this reason, the balance that petitioner
should pay on his service vehicle stood at P116,380.00 if he opts to
purchase the same.
On May 3, 2007, petitioner filed against Mekeni and/or its President,
Prudencio S. Garcia, a Complaint for the recovery of monetary claims
consisting of unpaid salaries, commissions, sick/vacation leave

benefits, and recovery of monthly salary deductions which were

earmarked for his cost-sharing in the car plan.
Issue: Whether or not petitioner is entitled to a refund of all the
amounts applied to the cost of the service vehicle under the car plan.
Ruling: Any benefit or privilege enjoyed by petitioner from using the
service vehicle was merely incidental and insignificant, because for the
most part the vehicle was under Mekeni's control and supervision. Free
and complete disposal is given to the petitioner only after the vehicle's
cost is covered or paid in full. Until then, the vehicle remains at the
beck and call of Mekeni. Given the vast territory petitioner had to cover
to be able to perform his work effectively and generate business for his
employer, the service vehicle was an absolute necessity, or else
Mekeni's business would suffer adversely. Thus, it is clear that while
petitioner was paying for half of the vehicle's value, Mekeni was
reaping the full benefits from the use thereof.
Under Article 22 of the Civil Code, every person who through an act of
performance by another, or any other means, acquires or comes into
possession of something at the expense of the latter without just or
legal ground, shall return the same to him." Article 2142 of the same
Code likewise clarifies that there are certain lawful, voluntary and
unilateral acts which give rise to the juridical relation of quasi-contract,
to the end that no one shall be unjustly enriched or benefited at the
expense of another. In the absence of specific terms and conditions
governing the car plan arrangement between the petitioner and
Mekeni, a quasi-contractual relation was created between them.
Consequently, Mekeni may not enrich itself by charging petitioner for
the use of its vehicle which is otherwise absolutely necessary to the full
and effective promotion of its business. It may not, under the claim
that petitioner's payments constitute rents for the use of the company
vehicle, refuse to refund what petitioner had paid, for the reasons that
the car plan did not carry such a condition; the subject vehicle is an old
car that is substantially, if not fully, depreciated; the car plan
arrangement benefited Mekeni for the most part; and any personal
benefit obtained by petitioner from using the vehicle was merely
incidental.
Conversely, petitioner cannot recover the monetary value of Mekeni's
counterpart contribution to the cost of the vehicle; that is not property
or money that belongs to him, nor was it intended to be given to him in
lieu of the car plan. Mekeni's share of the vehicle's cost was not part of
petitioner's compensation package. The vehicle is an asset that
belonged to Mekeni. Just as Mekeni is unjustly enriched by failing to
refund petitioner's payments, so should petitioner not be awarded the
value of Mekeni's counterpart contribution to the car plan, as this
would unjustly enrich him at Mekeni's expense.
Thus, Mekeni Food Corporation should refund petitioner Antonio Locsin
II's payments under the car plan agreement amounting only to the
extent of the contribution Locsin made, totalling to the amount of
P112,500.00.

TH Shopfitters Corp., et al., vs. T&H Shopfitters Corp., Union

GR No. 191714, Feb 26, 2014
Facts: On September 7, 2004, the T&H Shopfitters Corporation/ Gin
Queen Corporation workers union (THS-GQ Union) filed their Complaint
for Unfair Labor Practice (ULP) by way of union busting, and Illegal
Lockout, with moral and exemplary damages and attorneys fees,
against T&H Shopfitters Corporation (T&H Shopfitters) and Gin Queen
Corporation before the Labor Arbiter (LA).
1st CAUSE:
In their desire to improve their working conditions, respondents and
other employees of held their first formal meeting on November 23,
2003 to discuss the formation of a union. The following day, seventeen
(17) employees were barred from entering petitioners factory
premises located in Castillejos, Zambales, and ordered to transfer to
T&H Shopfitters warehouse at Subic Bay Freeport Zone (SBFZ)
purportedly because of its expansion. Afterwards, the said seventeen
(17) employees were repeatedly ordered to go on forced leave due to
the unavailability of work.
Respondents contended that the affected employees were not given
regular work assignments, while subcontractors were continuously
hired to perform their functions. Respondents sought the assistance of
the National Conciliation and Mediation Board. Subsequently, an
agreement between petitioners and THS-GQ Union was reached.
Petitioners agreed to give priority to regular employees in the
distribution of work assignments. Respondents averred, however, that
petitioners never complied with its commitment but instead hired
contractual workers. Instead, Respondents claimed that the work
weeks of those employees in the SBFZ plant were drastically reduced
to only three (3) days in a month.
2nd CAUSE:
On March 24, 2004, THS-GQ Union filed a petition for certification
election and an order was issued to hold the certification election in
both T&H Shopfitters and Gin Queen.
On October 10, 2004, petitioners sponsored a field trip to Iba,
Zambales, for its employees. The officers and members of the THS-GQ
Union were purportedly excluded from the field trip. On the evening of
the field trip, a certain Angel Madriaga, a sales officer of petitioners,
campaigned against the union in the forthcoming certification election.
When the certification election was scheduled on October 11, 2004,
the employees were escorted from the field trip to the polling center in
Zambales to cast their votes. The remaining employees situated at the
SBFZ plant cast their votes as well. Due to the heavy pressure exerted
by petitioners, the votes for "no union" prevailed.
3rd CAUSE:
A memorandum was issued by petitioner Ben Huang (Huang), Director
for Gin Queen, informed its employees of the expiration of the lease
contract between Gin Queen and its lessor in Castillejos, Zambales and
announced the relocation of its office and workers to Cabangan,
Zambales.

When the respondents, visited the site in Cabangan, discovered that it

was a "talahiban" or grassland. The said union officers and members
were made to work as grass cutters in Cabangan, under the
supervision of a certain Barangay Captain Greg Pangan. Due to these
circumstances, the employees assigned in Cabangan did not report for
work. The other employees who likewise failed to report in Cabangan
were meted out with suspension.
PETITIONERS DEFENSE:
In its defense, Petitioners also stress that they cannot be held liable for
ULP for the reason that there is no employer-employee relationship
between the former and respondents. Further, Gin Queen avers that its
decision to implement an enforced rotation of work assignments for
respondents was a management prerogative permitted by law, justified
due to the decrease in orders from its customers, they had to resort to
cost cutting measures to avoid anticipated financial losses. Thus, it
assigned work on a rotational basis. It explains that its failure to
present concrete proof of its decreasing orders was due to the
impossibility of proving a negative assertion. It also asserts that the
transfer from Castillejos to Cabangan was made in good faith and
solely because of the expiration of its lease contract in Castillejos. It
was of the impression that the employees, who opposed its economic
measures, were merely motivated by spite in filing the complaint for
ULP against it.
Issues: Whether ULP acts were committed by petitioners against
respondents.
Ruling: ULP were committed by petitioners against respondents.
Petitioners are being accused of violations of paragraphs (a), (c), and
(e) of Article 257 (formerly Article 248) of the Labor Code,13 to wit:
Article 257. Unfair labor practices of employers.It shall be
unlawful for an employer to commit any of the following unfair
labor practices:
(a) To interfere with, restrain or coerce employees in the exercise
of their right to self-organization;
xxxx
(c) To contract out services or functions being performed by
union members when such will interfere with, restrain, or coerce
employees in the exercise of their right to self-organization;
xxxx
(e) To discriminate in regard to wages, hours of work, and other
terms and conditions of employment in order to encourage or
discourage membership in any labor organization. x x x
The questioned acts of petitioners, namely: 1) sponsoring a field trip to
Zambales for its employees, to the exclusion of union members, before
the scheduled certification election; 2) the active campaign by the
sales officer of petitioners against the union prevailing as a bargaining
agent during the field trip; 3) escorting its employees after the field trip
to the polling center; 4) the continuous hiring of subcontractors
performing respondents functions; 5) assigning union members to the
Cabangan site to work as grass cutters; and 6) the enforcement of
work on a rotational basis for union members, taken together,
reasonably support an inference that, indeed, such were all

orchestrated to restrict respondents free exercise of their right to selforganization.

The Court is of the considered view those petitioners undisputed
actions prior and immediately before the scheduled certification
election, while seemingly innocuous, unduly meddled in the affairs of
its employees in selecting their exclusive bargaining representative.
Wesleyan University-Phils., vs. Wesleyan University-Phils.,
Faculty & Staff Asso.
GR No. 181806, March 12, 2014
Facts: Petitioner Wesleyan University-Philippines is a non-stock, nonprofit educational institution duly organized and existing under the
laws of the Philippines. Respondent Wesleyan University-Philippines
Faculty and Staff Association, on the other hand, is a duly registered
labor organization acting as the sole and exclusive bargaining agent of
all rank-and-file faculty and staff employees of petitioner.
In December 2003, the parties signed a 5-year CBA effective June 1,
2003 until May 31, 2008.
On August 16, 2005, petitioner, through its President, Atty. Maglaya ,
issued a Memorandum providing guidelines on the implementation of
vacation and sick leave credits as well as vacation leave commutation
which states that vacation and sick leave credits are not automatic as
leave credits would be earned on a month-to-month and only vacation
leave is commuted or monetized to cash which is effected after the
second year of continuous service of an employee.
Respondents questioned the guidelines for being violative of existing
practices and the CBA which provide that all covered employees are
entitled to 15 days sick leave and 15 days vacation leave with pay
every year and that after the second year of service, all unused
vacation leave shall be converted to cash and paid to the employee at
the end of each school year, not later than August 30 of each year.
Respondent file a grievance complaint on the implementation of the
vacation and sick leave policy. Petitioner also announced its plan of
implementing a one-retirement policy which was unacceptable to
respondent.
Respondent submitted affidavits to prove that there is an established
practice of giving two retirement benefits, one from the Private
Education Retirement Annuity Association (PERAA) Plan and another
from the CBA Retirement Plan.
The Voluntary Arbitrator rendered a Decision declaring the oneretirement policy and the Memorandum dated August 16, 2005
contrary to law. CA also affirmed the ruling of the Voluntary Arbitrator.
Petitioner argues that there is only one retirement plan as the CBA
Retirement Plan and the PERAA Plan are one and the same. It
maintains that there is no established company practice or policy of
giving two retirement benefits to its employees. Respondent belies the
claims of petitioner and asserts that there are two retirement plans as

the PERAA Retirement Plan, which has been implemented for more
than 30 years, is different from the CBA Retirement Plan. Respondent
further avers that it has always been a practice of petitioner to give
two retirement benefits and that this practice was established by
substantial evidence as found by both the Voluntary Arbitrator and the
CA.
Issue: Whether or not the respondents are entitled to two retirement
plans.
Ruling: The Non-Diminution Rule found in Article 100 of the Labor
Code explicitly prohibits employers from eliminating or reducing the
benefits received by their employees. This rule, however, applies only
if the benefit is based on an express policy, a written contract, or has
ripened into a practice. To be considered a practice, it must be
consistently and deliberately made by the employer over a long period
of time. Respondent was able to present substantial evidence in the
form of affidavits to support its claim that there are two retirement
plans. Based on the affidavits, petitioner has been giving two
retirement benefits as early as 1997. Petitioner, on the other hand,
failed to present any evidence to refute the veracity of these affidavits.
Petitioner's assertion that there is only one retirement plan as the CBA
Retirement Plan and the PERAA Plan are one and the same is not
supported by any evidence.
The Memorandum dated August 16, 2005 is contrary to the existing
CBA. It limits the available leave credits of an employee at the start of
the school year. The Memorandum dated imposes a limitation not
agreed upon by the parties nor stated in the CBA, so it must be struck
down.
Handwritten
Bluer Than Blue Joint Ventures Co., vs. Esteban
Citing 2011 Nina Jewelry Manufacturing of Metal Arts Inc. vs.
Montecillo
GR No. 192582, April 7, 2014,
Facts:
The respondent was employed as a sales clerk and assigned at the
petitioners boutique. Her primary tasks were attending to all customer
needs, ensuring efficient inventory, coordinating orders from clients,
cashiering and reporting to the accounting department. The petitioner
learned that some of their employees had access to their POS system
with the use of a universal password given to them by a certain Elmer
Flores, who in turn learned of the password from the respondent. The
petitioner then conducted an investigation and asked the petitioner to
explain why she should not be disciplinarily dealt with. During the
investigation the respondent was placed under preventive suspension.
After investigation the petitioner terminated the respondent on the
grounds of loss of trust or confidence. This respondent was given her
final wage and benefits less the inventory variance incurred by the
store. This urged the respondent to file a complaint for illegal

dismissal, illegal suspension, holiday pay, rest day and separation pay.
The labor arbiter ruled in her favour awarding her backwages. The
petitioner appealed the decision in the NLRC and the decision was
reversed. However, upon the respondents petition for certiorari in the
court of appeals the decision was reinstated. Hence, this petition.
Issue: Whether the negative sales variance could be validly deducted
from the respondents wage?
Ruling: No, it cannot be deducted in this case.
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, among others. The Omnibus Rules Implementing the
Labor Code, meanwhile, provides:
SECTION 14. Deduction for loss or damage. Where the
employer is engaged in a trade, occupation or business where
the practice of making deductions or requiring deposits is
recognized to answer for the reimbursement of loss or damage to
tools, materials, or equipment supplied by the employer to the
employee, the employer may make wage deductions or require
the employees to make deposits from which deductions shall be
made, 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 percent of the employee's wages in a week.
In this case, the petitioner failed to sufficiently establish that Esteban
was responsible for the negative variance it had in its sales for the year
2005 to 2006 and that Esteban was given the opportunity to show
cause the deduction from her last salary should not be made.
Furthermore, the court ruled, in Nina Jewelry Marketing of Metal Arts,
Inc. v. Montecillo, that:
[T]he petitioners should first establish that the making of
deductions from the salaries is authorized by law, or regulations
issued by the Secretary of Labor. Further, the posting of cash
bonds should be proven as a recognized practice in the jewelry
manufacturing business, or alternatively, the petitioners should
seek for the determination by the Secretary of Labor through the

issuance of appropriate rules and regulations that the policy the

former seeks to implement is necessary or desirable in the
conduct of business. The petitioners failed in this respect. It
bears stressing that without proofs that requiring deposits and
effecting deductions are recognized practices, or without
securing the Secretary of Labor's determination of the necessity
or desirability of the same, the imposition of new policies relative
to deductions and deposits can be made subject to abuse by the
employers. This is not what the law intends.

Netlink Computer Inc. vs. Delmo

GR No. 160827, June 18, 2014

Libcap Marketing Cor., vs. Baquial

GR No. 1921011, June 30, 2014

PLDT vs. Estranero

GR No. 192518 Oct. 15, 2014

Milan vs. National Labor Relations Commission

GR No. 202961, Feb. 4, 2015

MINIMUM LABOR STANDARD BENEFITS

Radio Mindanao Network Inc. et al., vs. Ybarola, Jr.

G.R. No. 198662, Sept. 12, 2012

David/Yiels Hog Dealer vs. Macasio

GR No. 195466, July 2, 2014

OTHER SPECIAL BENEFITS

Radio Mindanao Network Inc, et al., vs. Ybarola, Jr. et al.

G.R. No. 198662, September 12, 2012

Padillo vs. Rural Bank of Nabunturan Inc.

G.R. No. 199338, Jan. 21, 2013

Phil Spring Water Resources Inc. vs. Court of Appeals

GR No. 205278, June 11, 2014

Goodyear Philippines Inc. vs. Angus

GR No. 185449, November 12, 2015

RIGHT TO SECURITY OF TENURE

Herrera Manois vs. St. Scholasticas College

GR No. 188914, Dec. 11, 2013
Facts: SSC, situated in the City of Manila, is a private educational
institution offering elementary, secondary, and tertiary education.
Manaois graduated from SSC in October 1992 with a degree in
Bachelor of Arts in English. In 1994, she returned to her alma mater as
a part-time English teacher. After taking a leave of absence for one
year, she was again rehired by SSC for the same position. Four years
into the service, she was later on recommended by her Department
Chairperson to become a full-time faculty member of the English
Department.
Manaois thus applied for a position as full-time instructor for school
year 2000-2001.
She mentioned in her application letter that she had been taking the
course Master of Arts in English Studies, Major in Creative Writing, at
the University of the Philippines, Diliman (UP); that she was completing
her master's thesis; and that her oral defense was scheduled for June
2000. In a reply letter 4 dated 17 April 2000, the Dean of Arts and
Sciences informed her of the SSC Administrative Council's approval of
her application. SSC hired her as a probationary full-time faculty
member with the assigned task of instructor for the school year 20002001. Her probationary employment continued for a total of three
consecutive years.
Because of the forthcoming completion of her third year of
probationary employment, Manaois wrote the Dean of Arts and
Sciences requesting an extension of her teaching load for the school
year 2003-2004. Manaois eventually received a letter from the Dean of
College and Chairperson of the Promotions and Permanency Board
officially informing her of the board's decision not to renew her
contract.

Issue: Whether the completion of a master's degree is required in

order for a tertiary level educator to earn the status of permanency in
a private educational institution.
Held:
Probationary employment refers to the trial stage or period during
which the employer examines the competency and qualifications of job
applicants, and determines whether they are qualified to be extended
permanent employment status. Such an arrangement affords an
employer the opportunity before the full force of the guarantee of
security of tenure comes into play to fully scrutinize and observe the
fitness and worth of probationers while on the job and to determine
whether they would become proper and efficient employees. It also
gives the probationers the chance to prove to the employer that they
possess the necessary qualities and qualifications to meet reasonable
standards for permanent employment.
Viewed next to the statements and actions of Manaois i.e., the
references to obtaining a master's degree in her application letter, in
the subsequent correspondences between her and SSC, and in the
letter seeking the extension of a teaching load for the school year
2003-2004; and her submission of certifications from UP and from her
thesis adviser we find that there is indeed substantial evidence
proving that she knew about the necessary academic qualifications to
obtain the status of permanency.
At this juncture, we reiterate the rule that mere completion of the
three-year probation, even with an above-average performance, does
not guarantee that the employee will automatically acquire a
permanent employment status. It is settled jurisprudence that the
probationer can only qualify upon fulfillment of the reasonable
standards set for permanent employment as a member of the teaching
personnel.
Thus, pursuant to the 1992 Manual, private educational institutions in
the tertiary level may extend "full-time faculty" status only to those
who possess, inter alia, a master's degree in the field of study that will
be taught. This minimum requirement is neither subject to the
prerogative of the school nor to the agreement between the parties.
For all intents and purposes, this qualification must be deemed
impliedly written in the employment contracts between private
educational institutions and prospective faculty members. The issue of
whether probationers were informed of this academic requirement
before they were engaged as probationary employees is thus no longer
material, as those who are seeking to be educators are presumed to
know these mandated qualifications. In the light of the failure of
Manaois to satisfy the academic requirements for the position, she may
only be considered as a part-time instructor pursuant to Section 45 of
the 1992 Manual.

Universal Robina Sugar Milling Corp., vs. Acibo

GR No. 186439, January 15, 2014
Facts: URSUMCO is a domestic corporation engaged in the sugar cane
milling business; Cabati is URSUMCO's Business Unit General Manager.
The complainants were employees of URSUMCO. They were hired on
various dates (between February 1988 and April 1996) and on different
capacities, 8 i.e., drivers, crane operators, bucket hookers, welders,
mechanics, laboratory attendants and aides, steel workers, laborers,
carpenters and masons, among others. At the start of their respective
engagements, the complainants signed contracts of employment for a
period of one (1) month or for a given season. URSUMCO repeatedly
hired the complainants to perform the same duties and, for every
engagement, required the latter to sign new employment contracts for
the same duration of one month or a given season.
The complainants filed before the LA complaints for regularization,
entitlement to the benefits under the existing Collective Bargaining
Agreement (CBA), and attorney's fees.
Issue: Whether or not respondents are regular employees of
URSUMCO
Held: We find the respondents to be regular seasonal employees of
URSUMCO.
Seasonal employment operates much in the same way as project
employment, albeit it involves work or service that is seasonal in
nature or lasting for the duration of the season. As with project
employment, although the seasonal employment arrangement involves
work that is seasonal or periodic in nature, the employment itself is not
automatically considered seasonal so as to prevent the employee from
attaining regular status. To exclude the asserted "seasonal" employee
from those classified as regular employees, the employer must show
that: (1) the employee must be performing work or services that are
seasonal in nature; and (2) he had been employed for the duration of
the season. Hence, when the "seasonal" workers are continuously and
repeatedly hired to perform the same tasks or activities for several
seasons or even after the cessation of the season, this length of time
may likewise serve as badge of regular employment. In fact, even
though denominated as "seasonal workers," if these workers are called
to work from time to time and are only temporarily laid off during the
off-season, the law does not consider them separated from the service
during the off-season period. The law simply considers these seasonal
workers on leave until re-employed.
The nature of the employment depends on the nature of the activities
to be performed by the employee, considering the nature of the
employer's business, the duration and scope to be done, and, in some

cases, even the length of time of the performance and its continued
existence. In light of the above legal parameters laid down by the law
and applicable jurisprudence, the respondents are neither project,
seasonal nor fixed-term employees, but regular seasonal workers of
URSUMCO.
(1) The respondents were made to perform various tasks that did
not at all pertain to any specific phase of URSUMCO's strict
milling operations that would ultimately cease upon completion
of a particular phase in the milling of sugar; rather, they were
tasked to perform duties regularly and habitually needed in
URSUMCO's operations during the milling season.
(2) The respondents were regularly and repeatedly hired to perform
the same tasks year after year.

Handwritten
Abbott Laboratories vs. Alcaraz, En Banc Resolution
GR No. 192571, April 22, 2014; see main decision of July 23, 2013

Noblejas vs. Italian Maritime Academy Phils

GR No. 207888, June 9, 2014

Phil Spring Water Resources Inc. vs. Court of Appeals

GR No. 205278, June 11, 2014

Omni hauling Services Inc. et al., vs. Tortoles

GR No. 199388, Sept. 3, 2014

Hacienda Ledd vs. Villegas

GR No. 179654, Sept. 22, 2014

FVR Skills & Services Exponents Inc. et al., vs. Seva, et al.
GR No. 200857, Oct. 22, 2014

Manalo vs.TNS Phils, Inc.

GR No. 208567, Nov. 26, 2014

Fuji Television Network vs Espiritu

GR no. 204944-45, December 3, 2014

Gadia vs. Sykes

GR No. 209499, January 28, 2015

Basan vs. Coca-Cola Bottlers Phils.

GR No. 174365, Feb. 4, 2015

Hacienda Cataywa vs. Lorezo

GR No. 179640, March 18, 2015

TERMINATION OF EMPLOYMENT

Celdran vs. Forza Integrated Services

GR No. 189460, June 5, 2013
Facts:
Petitioner Leo Mario C. Celdran was hired by private respondent City
Service as Vice-President for the Visayas Regional Office in Cebu City.
Private respondents City Service Corporation and Peerless Integrated
Services, Incorporated are affiliate companies of respondent FORZA
Integrated Corporation. According to petitioner, his compensation
package included a car plan wherein they would assume the remaining
balance of his car plan, with 50% by the company and the other 50%
by Celdran himself; but, to private respondents, it was a car lease
arrangement. Celdran consistently refused to sign the said lease
contract as it was contrary to what he allegedly agreed with private
respondent Valentin B. Prieto, Jr. during his employment interview way
back in May 2005.
On November 10, 2005, Celdran was accused of dishonesty, for
charging a personal lunch to the company, and was demanded to
resign by the Chief Operating Officer Santiago. Celdran received a
termination notice signed by private respondent Santiago which led
the former to file a complaint for illegal dismissal on November 22,
2005, before the Regional Arbitration Branch of the National Labor
Relations Commission. However, the said case was settled as he was
reinstated to his position on December 27, 2005.
However, upon his return, Celdran was told to occupy the last open
cubicle at the ground floor ands given a new copy of the motor vehicle
lease contract for his signature which he refused to sign. He was
relieved as Mancom Chairman for no reason at all. He was subjected to
check and inspection by the security guard and his transportation and
cellular phone allowances were subjected to new guidelines. Private

respondent City Service Corporation gave Celdran the option to buy

the Honda CRV at its residual value until February 9, 2006, otherwise,
the former would recover the vehicle from the latter.
On February 14, 2006, Celdran filed a complaint with the Regional
Arbitration Branch of the NLRC charging private respondents with
violation of the terms of the car plan. On March 2, 2006, Celdran was
placed under preventive suspension for 30 days due to his belligerent
attitude and required to explain why he should not be terminated. He
was not asked to return to work after his suspension for which reason
he amended his complaint on April 11, 2006, to include charges of
illegal suspension, constructive dismissal and unpaid money claims.
In a letter dated April 11, 2006, private respondent City Service
Corporation informed all its employees, including Celdran, that by
virtue of a board resolution dated March 17, 2006, the company
decided to replace the Visayas Regional Office with a small Liaison
Office. Consequently, Celdran made a second amendment of his
complaint on April 18, 2006 to include charges of illegal layoff/downsizing.

Issues:
1. Whether or not there was constructive dismissal.
2. Whether or not the petitioner was illegally dismissed.
3. Whether or not individual respondents may not be held solidarily
liable with respondent corporations.

Ruling:
There was no constructive dismissal in the case at bar.
According to petitioner, he had been experiencing a kind of treatment
that rendered "employment impossible and unreasonable" as early as
in the last quarter of 2005. However, he never resigned. In fact, when
he filed a complaint in March 2006 regarding his car plan benefit, he
did not make any allegation concerning his inability to continue
working for respondents due to an alleged ill working environment. We
thus find that he was still willing and able to continue his employment
despite any alleged ill treatment. For there to be constructive
dismissal, the employer must be shown to have committed an act of
clear discrimination, insensibility, or disdain, which had become so
unbearable on the part of the employee that it foreclosed any choice
other than for the latter to forego continued employment.
Petitioner was not illegally dismissed when respondent company
implemented a downsizing program for their Visayas regional office.

Pursuant to Article 283 of the Labor Code, an employer may reduce the
number of its employees based on economic grounds in order to
protect and preserve the employer's viability and ensure its
survival. Consequently, employers are given the management
prerogative to implement a retrenchment program for the purpose of
preventing losses or cessation of business operations due to business
recession, industrial depression, seasonal fluctuations, lack of work, or
considerable reduction in the volume of their business.
Respondents were able to prove that their retrenchment program was
justified and not implemented in bad faith. As found by the ELA and
the NLRC, respondents had been experiencing a downtrend in their
Visayas operations since three years before they decided to downsize.
In fact, City Service was suffering from continuous defeats in numerous
biddings it had participated in. Furthermore, they showed that they had
complied with the requirement of written notice to the employees and
to the DOLE at least one month prior to the intended date of
downsizing or retrenchment.
Individual respondents may not be held personally liable.
As a general rule, corporate directors, trustees, or officers are not
personally liable for their official acts, unless they have exceeded the
scope of their authority. Indeed, personal liability may attach when
directors, trustees, or officers assent to a patently unlawful act of the
corporation, or when they act in bad faith, resulting in damages to the
corporation, its stockholders, or other persons. However, there was no
substantial evidence on record proving bad faith in the termination of
petitioner's employment due to retrenchment.

Canedo vs. Kampilan, Security & Detective Agency

GR No. 179326, July 31, 2013
Facts:
Luciano Canedo was assigned by Kampilan Security and Detective
Agency as security guard of the National Power Corporation (NPC) at
Toledo City. However, for not wearing a uniform while on duty as per
report of Allan Alfafara of the NPC. Canedo was suspended for a month.
NPC thereafter informed Kampilan that it was no longer interested in
Canedos service and thus requested for his replacement. In the
meantime, Canedo requested from Arquiza of Kampilan to issue a
certification in connection with his intended retirement to which the
latter acceded. Days later, Canedo filed before the labor arbiter a
complaint for illegal dismissal, illegal suspension and non-payment of
monetary benefits against Kampilan. He claimed that his suspension
was without a valid ground and effected without due process, hence,
illegal. Kampilan countered that Canedo was not dismissed from

service but he was just pulled put from NPC in view of NPCs request
for his replacement.
Issue: Whether or not Canedo was dismissed from service.
Ruling:
NO. In illegal dismissal cases, "while the employer bears the burden to
prove that the termination was for a valid or authorized cause, the
employee must first establish by substantial evidence the fact of
dismissal from service." The burden of proving the allegations rests
upon the party alleging and the proof must be clear, positive and
convincing. Thus, in this case, it is incumbent upon petitioner to prove
his claim of dismissal. While it is true that he was not allowed to report
for work after the period of his suspension expired, the same was due
to NPC's request for his replacement as NPC was no longer interested
in his services. And as correctly argued by Kampilan, Canedo from that
point onward is not considered dismissed but merely on a floating
status. "Such a 'floating status' is lawful and not unusual for security
guards employed in security agencies as their assignments primarily
depend on the contracts entered into by the agency with third parties."
A floating status can ripen into constructive dismissal only when it
goes beyond the six-month maximum period allowed by law. In this
case, Canedo filed the Complaint for illegal dismissal even before the
lapse of the six-month period. Hence, his claim of illegal dismissal lacks
basis. It was in fact Canedo who intended to terminate his relationship
with Kampilan through his planned retirement. This circumstance
negates his claim that he was terminated. Clearly, there is no dismissal
to speak of this case.

National Union of Bank Employees vs. Philna Bank Employees

Association
GR No.174287, August 12, 2013

Integrated Mircoelctronics vs. Pionilla

GR No. 200222, August 28, 2013
Facts:
Adonis Pionilla was hired by IMI as its production worker. On May 5,
2005, Pionilla received a notice from IMI requiring him to explain the
incident which occurred the day before where he was seen escorting a
lady to board the company shuttle bus at the Alabang Terminal. It was
reported by the bus marshall that the lady was wearing a company
identification card (ID) which serves as a free pass for shuttle bus
passengers even if she was just a job applicant at IMI. In this regard,
Pionilla admitted that he lent his ID to the lady who turned out to be
his relative. He further intimated that he risked lending her his ID to

save on their transportation expenses. Nevertheless, he apologized for

his actions.
During the Conscience Committee hearing, Pionilla admitted that at
the time of the incident, he had two IDs in his name as he lost his
original ID in November 2004 but was able to secure a temporary ID
later. Based on the foregoing, IMI found Pionilla guilty of violating
Article 6.12 of the Company Rules and Regulations (CRR) which
prohibits the lending of ones ID since the same is considered a breach
of its security rules and carries the penalty of dismissal. Subsequently,
Pionilla received a letter informing him of his dismissal from service.
Three days after, he filed a complaint for illegal dismissal with
damages against IMI.
LA ruled in favor of Pionilla ordering reinstatement and payment of
backwages. Dissatisfied, IMI elevated the matter to the National Labor
Relations Commission (NLRC).
NLRC reversed the LAs ruling, finding Pionillas dismissal to be valid. It
pointed out that Pionillas act of lending his temporary ID was willful
and intentional as he, in fact, admitted and apologized for the same.
The NLRC further ruled that Pionillas attitude in violating the CRR
could be treated as perverse as bolstered by his failure to surrender his
temporary ID despite locating the original one. Dissatisfied, Pionilla
filed a petition for certiorari before the CA.
CA ruled in favor of Pionilla. It found that while IMIs regulations on
company IDs were reasonable, the penalty of dismissal was too harsh
and not commensurate to the misdeed committed. It also stated that
the while the right of the employer to discipline is beyond question, it,
nevertheless, remains subject to reasonable regulation. It further noted
that Pionilla worked with IMI for a period of nine years without any
derogatory record and even observed that his performance rating had
always been "outstanding."
Hence, the present motion for reconsideration.

Issue: Whether or not Pionilla is entitled to reinstatement and full

backwages.

Ruling:
The motion for reconsideration is partly granted. Court ordered his
reinstatement but without backwages.
As a general rule, an illegally dismissed employee is entitled to
reinstatement (or separation pay, if reinstatement is not viable) and
payment of full backwages. In certain cases, however, the Court has

carved out an exception to the foregoing rule and thereby ordered the
reinstatement of the employee without backwages on account of the
following:
a.
b.

the fact that dismissal of the employee would be too

harsh of a penalty; and
that the employer was in good faith in terminating the
employee.

In this case, the Court observes that: (a) the penalty of dismissal was
too harsh of a penalty to be imposed against Pionilla for his infractions;
and (b) IMI was in good faith when it dismissed Pionilla as his
dereliction of its policy on ID usage was honestly perceived to be a
threat to the company's security.
The Court finds it proper to accord the same disposition and
consequently directs the deletion of the award of back wages in favor
of Pionilla, notwithstanding the illegality of his dismissal.

MZR Industries vs. Colambot

GR No. 179001, August 28, 2013
Facts:
On February 8, 2000, petitioner Marilou Quiroz, Owner and VicePresident for Finance and Marketing of MZR, hired respondent Majen
Colambot (Colambot) as messenger. Colambots duties and
responsibilities included field, messengerial and other liaison work.
However, beginning 2002, Colambots work performance started to
deteriorate. Petitioners issued several memoranda to Colambot for
habitual tardiness, negligence, and violations of office policies,
including insubordinations, among others.
Petitioners claimed that despite written warnings for repeated
tardiness and insubordination, Colambot failed to mend his ways.
Hence, in a Memorandum (October 25, 2004) issued by petitioner Lea
Timbal, MZRs Administrative Manager, Colambot was given a notice of
suspension for insubordination and negligence.
Again, in a Memorandum (November 25, 2004), Colambot was
suspended from November 26, 2004 until December 6, 2004 for
insubordination. Petitioners claimed they waited for Colambot to
report back for work on December 7, 2004, but they never heard from
him anymore.
Later, petitioners were surprised to find out that Colambot had filed a
complaint for illegal dismissal, illegal suspension, underpayment of
salaries, holiday pay, service incentive pay, 13 th month pay and
separation pay.

Petitioner insisted that while Colambot was suspended due to

insubordination and negligence, they maintained that they never
terminated Colambots employment. Colambot, meanwhile, argued
that contrary to petitioners claim that he abandoned his job, he
claimed that he did not report back to work after the expiration of his
suspension on December 6, 2004, because Quiroz told him that his
employment was already terminated effective December 7, 2004.
Labor Arbiter declared petitioner guilty of illegal dismissal. LA held that
there was no abandonment as there was no deliberate intent on the
part of Colambot to sever the employer-employee relationship and
petitioner failed to notify Colambot to return to work. | Aggrieved,
petitioner appealed to NLRC. NLRC ruled in favor of Quiroz. But CA
reversed.
Issues:
1. Whether or not petitioner Quiroz is guilty of Illegal Dismissal
2. Whether or not Colambot is guilty of abandonment
Ruling:
1. No.
There was no illegal dismissal, no dismissal having actually taken
place. In illegal dismissal cases, the employer bears the burden of
proving that the termination was for a valid or authorized cause.
However, before the employer must bear the burden of proving that
the dismissal was legal, the employee must first establish by
substantial evidence the fact of his dismissal from service. If there is no
dismissal, then there can be no question as to the legality or illegality
thereof. In the present case, however, the facts and the evidence do
not establish a prima facie case that the employee was dismissed from
employment.
Other than Colambot's unsubstantiated allegation of having been
verbally terminated from his work, there was no evidence presented to
show that he was indeed dismissed from work or was prevented from
returning to his work. In the absence of any showing of an overt or
positive act proving that petitioners had dismissed respondent, the
latter's claim of illegal dismissal cannot be sustained. The Notice of
Suspension shows that he is merely suspended from work. It was also
apparent that there was a specific instruction for him to return back to
work on Dec. 7.
There were no wordings whatsoever implying actual or constructive
dismissal. Thus, Colambot's general allegation of having been orally
dismissed from the service as against the clear wordings and intent of
the notice of suspension which he signed, we are then inclined to
believe that there was no dismissal.
2. No.

To constitute abandonment of work, two elements must be present:

a. The employee must have failed to report for work or must
have been absent without valid or justifiable reason; and
b. There must have been a clear intention on the part of the
employee to sever the employer-employee relationship
manifested by some overt act.

Mere absence or failure to report for work, even after notice to return,
is not tantamount to abandonment.
The burden of proof to show that there was unjustified refusal to go
back to work rests on the employer. Abandonment is a matter of
intention and cannot lightly be presumed from certain equivocal acts.
To constitute abandonment, there must be clear proof of deliberate and
unjustified intent to sever the employer-employee relationship.
In the instant case, other than Colambot's failure to report back to
work after suspension, petitioners failed to present any evidence which
tend to show his intent to abandon his work. Petitioner failed to
discharge the burden.
These circumstances, taken together, the lack of evidence of dismissal
and the lack of intent on the part of the respondent to abandon his
work, the remedy is reinstatement but without backwages. However,
considering that reinstatement is no longer applicable due to the
strained relationship between the parties and that Colambot already
found another employment, each party must bear his or her own loss.

Asia Brewery vs. Tunay na Pagkakaisa ng Mga Manggagawa sa

Asia Brewery
GR No. 171594-96, Sept. 18, 2013
Facts:
Tunay Na Pagkakaisa ng mga Manggagawa sa Asia (TPMA) is a
legitimate labor organization, certified as the sole and exclusive
bargaining agent of all regular rank and file employees of [petitioner
corporation] Asia Brewery, Incorporated (ABI). The [petitioner
corporation], on the other hand, is a company engaged in the
manufacture, sale and distribution of beer, shandy, glass and bottled
water products. It employs about 1,500 workers and has existing
distributorship agreements with at least 13 companies.
Since their old collective bargaining agreement had already expired,
the two are now negotiating for a new CBA which will apply for the next
3 years. After about 18 sessions or negotiations, the parties were still
unable to reconcile their differences on their respective positions on

most items, particularly on wages and other economic benefits. TPMA

declared a deadlock and filed for a strike.
The Secretary of Labor, Patricia Sto. Tomas, assumed jurisdiction over
the matter resolved the deadlock between the parties. She gave an
arbitral award on the Wage increase that will take effect for the next 3
years and on the Health care premiums.
Thereafter, on February 9, 2004, the parties executed and signed the
Collective Bargaining Agreement with a term from August 1, 2003 to
July 31, 2006.
However, TPMA questions the award rendered by the Secretary of
Labor and imputing grave abuse of discretion upon the public
respondent because such awards were based on unaudited financial
statements. The Court of Appeals vacated the decision of the Secretary
of Labor and and remanded it back to render the proper awards based
on the correct approach on deciding the dispute.
Issue: Whether or not the CA erred when it remanded to the Secretary
of Labor the issue on wage increase?
Ruling:
The Secretary of Labor gravely abused her discretion when she relied
on the unaudited financial statements of ABI in determining the wage
award because such evidence is self-serving and inadmissible. This
may have resulted to a wage award that is based on an inaccurate and
biased picture of ABIs capacity to pay one of the more significant
factors in making a wage award. Petitioner corporation has offered no
reason why it failed and/or refused to submit its audited financial
statements for the past five years relevant to this case. This only
further casts doubt as to the veracity and accuracy of the unaudited
financial statements it submitted to the Secretary of Labor. Verily, we
cannot countenance this procedure because this could unduly deprive
labor of its right to a just share in the fruits of production and provide
employers with a means to understate their profitability in order to
defeat the right of labor to a just wage.
As can be seen when it gave the wage award, the Secretary of Labor
failed to indicate the actual data upon which the wage award was
based. It even appears that she utilized the "middle ground approach
which we precisely warned against in Meralco. Factors such as the
actual and projected net operating income, impact of the wage
increase on net operating income, the company's previous CBAs, and
industry trends were not discussed in detail so that the precise bases
of the wage award are not discernible on the face of the Decision. The
contending parties are effectively precluded from seeking a review of
the wage award, even if proper under our ruling in Meralco, because of
the general but unsubstantiated statement in the Decision that the
wage award was based on factors like the bargaining history, trends of

arbitrated and agreed awards, and industry trends. In fine, there is no

way of determining if the Secretary of Labor utilized the proper
evidence, figures or data in arriving at the subject wage award as well
as the reasonableness thereof. This falls short of the requirement of
administrative due process obligating the decision-maker to adjudicate
the rights of the parties in such a manner that they can know the
various issues involved and the reasons for the decision rendered.
Based on the foregoing, we hold that the Secretary of Labor gravely
abused her discretion in making the subject wage award. The appellate
court, thus, correctly remanded this case to the Secretary of Labor for
the proper determination of the wage award which should utilize,
among others, the audited financial statements of petitioner
corporation and state with sufficient clarity the facts and law on which
the wage award is based.

Gemina Jr. vs. Bankwise Inc.

GR No. 175365, Oct. 23, 2013
Facts:
Petitioner Gemina signed an employment contract with
respondent Bankwise as Marketing Officer with the rank of Senior
Manager, with an annual salary of P750,000.00 b ased on a fifteenmonth scheme or P50,000.00 per month and a service vehicle for his
field work. The same contract stipulated for a fund level commitment
of P100,000,000.00 for the first six (6) months of employment.
During his first months in Bankwise, Gemina's performance was
satisfactory. However, when the former got involved in a controversy,
he had difficulty in soliciting new depositors and after 5 months, he
had the lowest performance among the members of the fund
management group. This prompted his supervisors to call his attention
and warn him of his obligations under the contract of employment and
failure to comply with those constitute breach of his contractual
obligations.
Despite the warning, Gemina went on leave for eleven (11) days.
Thereafter, he incurred absences without leave and did not bother to
inform the bank regarding the reason therefor. Pascua and Galapate,
petitioner's seniors tried to contact him to inquire about the reason of
his long absence and requested him to return the company vehicle but
to no avail. Instead, petitioner filed a complaint for illegal dismissal
against Bankwise.
LA held that Gemina was illegally dismissed while the NLRC held
that there was no constructive dismissal, rather Gemina abandoned his
employment. CA on the other hand denied the petition for certiorari
filed by the petitioner.

Issues:
1. WON the fund level commitment is a condition for Geminas
employment to warrant breach of his contractual obligations;
2. WON Gemina was constructively dismissed.

Ruling:
1. The fund level commitment is a condition for Gemina's
employment. A fund level commitment was stipulated as a term
or condition on Geminas contract of employment. Though not
per se a ground for dismissal, it is the standard by which
Geminas performance will be evaluated by Bankwises
management. Thus, the contract states, "your performance
relative to your ability to generate deposits shall be monitored
monthly and reviewed on your 6th month." The stated amount of
funds sets the goal or target amount of funds which Gemina
should strive to generate within a specific number of months.
It must be clear, however, that the fund level commitment is not
the sole basis of Geminas employment. In the same manner, the
failure to comply with this undertaking does not automatically
lead to dismissal from employment. Gemina will still be
subjected to the managements evaluation to determine his
performance based on the amount of funds he was able to bring
in to the coffers of Bankwise. Even then, Gemina may not
conveniently brush aside compliance with the fund level
commitment, thinking that it does not have any implication on
employment. It bears stressing that while not an automatic
ground for dismissal, the failure to generate the funds translates
to a poor performance rating which may ultimately jeopardize his
continued employment. Depending on the results of the periodic
evaluation undertaken by the management, the failure to comply
with the fund level commitment may eventually justify his
dismissal from employment. Thus, Gemina must put forth all his
efforts in order to fulfill his fund level commitment.
2. There was no constructive dismissal. There is constructive
dismissal when "there is cessation of work, because continued
employment is rendered impossible, unreasonable or unlikely, as
an offer involving a demotion in rank or a diminution in pay and
other benefits. Aptly called a dismissal in disguise or an act
amounting to dismissal but made to appear as if it were not,
constructive dismissal may, likewise, exist if an act of clear
discrimination, insensibility, or disdain by an employer becomes
so unbearable on the part of the employee that it could foreclose
any choice by him except to forego his continued employment."

Locsin II vs. Mekini Food Corp.

GR No. 192105, Dec 9, 2013

International School Manila vs. International School Alliance of

Educators etc.
GR No. 167286, February 5, 2014

Handwritten
Abbott Laboratories vs. Alcaraz, En Banc Resolution
GR No. 192571, April 22, 2014; see main decision of July 23, 2013

Mcmer Corp., et al., vs. NLRC et al.

GR No. 193421, June 4, 2014

Philippine Spring Water Resources Inc vs. Court of Appeals

GR No. 205278, June 11, 2014

Libcap Marketing Corp. et al., vs. Baquial

GR No. 192011, June 30, 2014

Ampeloquio vs. Jaka Distribution Inc.

GR No. 196936, July 2, 2014

Lim vs. HMR Phils Inc.

GR No. 201483, August 4, 2014

Benson Industries Employees Union et al. vs. Benson

Industries, Inc.
GR No. 200746, August 6, 2014

Lopez vs. Irvine Construction Corp.

GR No. 207253, August 20, 2014

Montinola vs. Philippine Airlines

GR No. 198656, Sept. 8, 2014

Northwest Airlines vs. Del Rosario

GR No. 157633, Sept. 10, 2014

Mount Carmel College Employees Union et al., vs. Mount

Carmel College Inc.
GR No. 187621, Sept. 24, 2014

Temic Automotive Phils vs. Cantos

GR No. 200729, Sept. 29, 2014

Radio Mindanao Network, Inc. vs. Amurao III

GR No. 167225, October 22, 2014

Imasen Philippine Manufacturing Corp., vs. Alcon et al.

GR No. 194884, October 22, 2014

Leus vs. St. Scholasticas College Westgrove

GR No. 187226, January 28, 2015

St. Lukes Medical Center vs. Sanchez

GR No. 212054, March 11, 2015

SUSPENSION OF BUSINESS OPERATIONS

Lopez vs. Irvine Construction Corp.

GR No. 207253, August 20, 2014

Exocet Security & Allied Services Corp., vs. Serrano

GR No. 198538, Sept. 29, 2014

DISEASE AS GROUND FOR TERMINATION

Deoferio vs. Intel Technology Phils.

GR No. 202996, June 18, 2014

OTHER CAUSES OF SEVERANCE OF EMPLOYMENT RELATION

Hechanova Bugay Vilchez Lawyers vs. Atty Matore

GR No. 198261, Oct. 16, 2013

Intel Technology Phils Inc. vs. NLRC et al.

GR No. 200575, February 5, 2014
Facts:
Private respondent Jeremias Cabiles (Cabiles) was hired by petitioner
Intel Technology Philippines, Inc. (Intel Phil) in April 16, 1997. Throgh
the years, Cabiles was promoted several times and was also assigned
to Intel Arizona and Intel Chengdu. He later applied for a position in
Intel Hong Kong (Intel HK). In December of 2006, Cabiles received an
offer by Intel HK for the position of Finance Manager. Before accepting
such offer, Cabiles inquired with Intel Phil through an email as to the
consequences of him accepting the offer, specifically on his retirement
benefits from Intel Phil. Intel Phil, through Penny Gabronino, replied to
Cabiles that he is not yet eligible for the retirement plan as he has not
reached the minimum 10 years of service with them (just over 9 years
of service) and such counting of the period will be suspended if he
does indeed transfer to Intel HK but will be continued if he decides to
work for Intel Phil again in the future. Despite such, Cabiles signed the
job offer on January 31, 2007.
On March 8, 2007, Intel Phil issued his Intel Final Pay Separation
Voucher to which he accepted and executed a Waiver and Quitclaim in
favor of Intel Phil. On September8, 2007, after 7 months of
employment in Intel HK, he resigned. About 2 years after, or on August
18, 2009, he filed a Complaint for non-payment of retirement benefits
against Intel Phil before the NLRC RAB-IV.
The LA ordered Intel Phil to pay the retirement pay to Cabiles holding
that he did not sever his employment with Intel Phil when he moved to
Intel HK, similar to when he was assigned at Intel Arizona and Intel
Chengdu. The NLRC affirmed the LA decision. The CA affirmed the
findings of the NLRC.

Issue:
Whether or not the transfer of Cabiles to Intel HK was tantamount to
resignation from Intel Phil.

Ruling:

The petition is granted and the decision of the CA is reversed and set
aside and Cabiles is ordered to restitute to petitioner whatever amount
he has received.
Resignation is the formal relinquishment of an office, the overt act of
which is coupled with an intent to renounce. This intent could be
inferred from the acts of the employee before and after the
alleged resignation.
In this case, Cabiles, while still on a temporary assignment in Intel
Chengdu, was offered by Intel HK the job of a Finance Manager. The
words he used in his inquiry email local hire, close, clearance
denote nothing but his firm resolve to voluntarily disassociate himself
from Intel Phil. and take on new responsibilities with Intel HK. Despite a
non-favorable reply as to his retirement concerns, Cabiles still
accepted the offer of Intel HK. His acceptance of the offer meant letting
go of the retirement benefits he now claims as he was informed
through email correspondence that his 9.5 years of service with Intel
Phil. would not be rounded off in his favor.
The continuity, existence or termination of an employer-employee
relationship in a typical secondment contract or any employment
contract for that matter is measured by the following yardsticks:
1.
2.
3.
4.

The
The
The
The

selection and engagement of the employee;

payment of wages;
power of dismissal; and
employer's power to control the employee's conduct.

As applied, all of the above benchmarks ceased upon Cabiles'

assumption of duties with Intel HK on February 1, 2007. Intel HK
became the new employer. It provided Cabiles his compensation.
Cabiles then became subject to Hong Kong labor laws, and necessarily,
the rights appurtenant thereto, including the right of Intel HK to fire
him on available grounds. Lastly, Intel HK had control and supervision
over him as its new Finance Manager. Evidently, Intel Phil. no longer
had any control over him.
Although in various instances, his move to Hong Kong was referred to
as an "assignment," it bears stressing that it was categorized as a
"permanent transfer." In Sta. Maria v. Lopez, the Court held that "no
permanent transfer can take place unless the officer or
employee is first removed from the position held, and then
appointed to another position." Undoubtedly, Cabiles' decision to
move to Hong Kong required the abandonment of his permanent
position with Intel Phil. in order for him to assume a position in an
entirely different company. Clearly, the "transfer" was more than
just an assignment. It constituted a severance of Cabiles'
relationship with Intel Phil., for the assumption of a position with a
different employer, rank, compensation and benefits.

Sutherland & Global Services Phils Inc., vs. Labrador

GR No. 193107, March 24, 2014
Facts:
In August 2006, Sutherland hired Labrador as one of its call center
agents with the main responsibility of answering carious queries and
complaints through phoned-in calls. In his two years of working at
Sutherland, Labrador committed several infractions. But it was only on
June 17, 2008 that Labrador was finally charged with violation for
transgressing the "Non-Compliance Sale Attribute" policy clause stated
in the Employee Handbook. Labrador created a second account for a
customer which charged the same customer twice by using the credit
card number given supposedly only for verification purposes.
Under Sutherland's Employee Handbook, Labrador's action is classified
as an act of dishonesty or fraud. On May 24, 2008, Sutherland sent
Labrador a Notice to Explain in writing why he should not be held
administratively liable. On May 28, 2008, an administrative hearing
was conducted that took into consideration Labrador's past infractions.
After investigation, a recommendation was issued finding Labrador
guilty of violating the Employee Handbook due to gross or habitual
neglect of duty.
On June 17, 2008, Labrador submitted his resignation letter. On
October 27, 2008, Labrador filed a complaint for constructive/illegal
dismissal before the NLRC.
On February 27, 2009, the LA dismissed the complaint for lack of merit.
The LA found just cause to terminate Labrador's employment, and that
his resignation letter had been voluntarily executed. The NLRC
reversed the LA's ruling on May 21, 2009.
The CA affirmed the NLRCs finding of illegal dismissal. It ruled that
Sutherland's decision to terminate Labrador's services was the
proximate cause of his resignation; the resignation letter was
submitted solely for the purpose of avoiding any derogatory record
that would adversely affect his future employment. In effect, he cannot
be deemed to have voluntarily resigned because he was forced to
relinquish his position in order to avoid the inevitable termination of
employment.

Issue:
Whether or not Labradors resignation was a valid termination of his
employment.

Ruling:

The appeal is granted and the decision of the CA is reversed and set
aside and the complaint for illegal dismissal is dismissed.
In the evidence leading to Labrador's dismissal evidence that
Labrador had acknowledged to have received, thus binding him to its
terms no dispute exists that Labrador committed several infractions.
In fact, the final infraction that brought on his termination was actually
a repetition of the first offense.
The first offense (committed on September 24, 2007) already gave rise
to a "Last Written Warning" with the statement that it was a serious
offense, constituting neglect of duty for deviating from the
program/department's standard operating procedures. Under this
clear warning, a second similar offense would necessarily lead
to his dismissal; otherwise the purpose of a "Last Written
Warning" would have been negated.
The failure to faithfully comply with the company rules and
regulations is considered to be a just cause in terminating one's
employment, depending on the nature, severity and circumstances of
non-compliance. "An employer 'has the right to regulate, according to
its discretion and best judgment, all aspects of employment, including
work assignment, working methods, processes to be followed, working
regulations, transfer of employees, work supervision, lay-off of workers
and the discipline, dismissal and recall of workers.'"
It was within Sutherland's prerogative to terminate Labrador's
employment when he committed a serious infraction and, despite a
previous warning, repeated it. To Sutherland's credit, it duly complied
with the procedural requirement in dismissing an employee; it clearly
observed both substantive and procedural due process. Its action was
based on a just and authorized cause, and the dismissal was effected
after due notice and hearing. But before Sutherland could finally
pronounce its verdict, Labrador submitted his resignation
letter, impelled no doubt, as Sutherland alleged, by the need
to protect his reputation and his future employment chances.
The issue of whether the resignation letter was voluntarily executed is
now moot. Even if Labrador had not submitted his resignation
letter, Sutherland could still not be held liable for constructive
dismissal given the existing just cause to terminate Labrador's
employment.

Chiang Kai Shek College et al., vs. Torres

GR No. 189456, April 2, 2014
Facts:
Respondent had been employed as a grade school teacher of the
school from July 1970 until 31 May 2003. She was accused of leaking a

copy of a special quiz given to Grade 5 students in HEKASI

(Heograpiya, Kasaysayan at Sibika (Geography, History and Civics)).
Ms. Benabese narrated that after giving a special quiz, she borrowed
the book of one of her students, Aileen Regine M. Anduyan (Aileen), for
the purpose of making an answer key. When she opened Aileen's book,
a piece of paper fell. Said paper turned out to be a copy of the same
quiz she had just given and the same already contained answers.
Ms. Benabese informed the school's Assistant Supervisor Mrs. Gloria
Caneda (Mrs. Caneda) about the incident. Mrs. Caneda conferred with
Assistant Supervisor Encarnacion Koo (Mrs. Koo), who was in charge of
the HEKASI area, and Supervisor Luningning Tibi (Ms. Tibi). Mrs. Koo
confronted respondent, who had initially denied leaking the test paper
but later on admitted that she gave the test paper to Mrs. Teresita
Anduyan (Mrs. Anduyan), her co-teacher and the mother of Aileen.
Respondent and Mrs. Anduyan were both directed to submit their
written statement on the incident.
On 5 August 2002, Mrs. Koo, Mrs. Caneda and Ms. Tibi executed a
written statement stating that when confronted by Mrs. Koo,
respondent initially denied leaking a copy of the quiz but later on
admitted to doing the same. An administrative hearing was conducted
on 28 August 2002 wherein respondent and Mrs. Anduyan were asked
questions by the Investigating Committee relative to the leakage of
test paper. On 30 August 2002, the Investigating Committee held a
meeting and found respondent and Mrs. Anduyan guilty of committing
a grave offense of the school policies by leaking a special quiz. As
shown in the Minutes of the Meeting on 30 August 2002, the
Committee decided to impose the penalty of one-month suspension
without pay on respondent and forfeiture of all the benefits scheduled
to be given on Teacher's Day.
The Investigating Committee had actually decided to terminate
respondent and had in fact prepared a memorandum of termination,
but respondent allegedly pleaded for a change of punishment in
a short letter dated 5 September 2002, to wit: Request for change of
punishment from termination to suspension and I am resigning at the
end of the school year. - Mrs. Rosalinda M. Torres Petitioners acceded
to the request and suspended respondent and Mrs. Anduyan effective
16 September to October 2002. The duo was directed to report to work
on 4 November 2002. Respondent continued her employment
from 4 November 2002 until the end of the school year on 26
March 2003.
However, respondent filed on February 14, 2003 a complaint with the
tenor of accusing petitioner school of constructive dismissal alleging
that she was forced and pressured to submit the written request for a
change of penalty and commitment to resign at the end of the school
year.

The LA dismissed the complaint for lack of merit. The LA deemed

respondent's suspension coupled with petitioner's allowance of
respondent's resignation at the end of the school year as generous
acts considering the offense committed. The LA held that there was no
constructive dismissal because respondent was not coerced nor
pressured to write her resignation letter. The NLRC affirmed the LA's
findings but ordering petitioners to pay respondent separation pay
equivalent to one-half (1/2) month salary for every year of service on
the grounds of equity and social justice.
The CA reversed the NLRC decision and held that respondent was
constructively dismissed as there was no voluntary resignation.

Issue:
Whether or not the school's act of imposing the penalty of suspension
instead of immediate dismissal from service at the request of the
erring employee, in exchange for the employee's resignation at the
end of the school year, constitutes constructive dismissal.

Ruling:
Petition is granted and the decision of the CA is reversed and set aside
and the NLRC decision reinstated.
Resignation is the voluntary act of an employee who is in a situation
where one believes that personal reasons cannot be sacrificed for the
favor of employment, and opts to leave rather than stay employed. It is
a formal pronouncement or relinquishment of an office, with the
intention of relinquishing the office accompanied by the act of
relinquishment. As the intent to relinquish must concur with the
overt act of relinquishment, the acts of the employee before
and after the alleged resignation must be considered in
determining whether, he or she, in fact, intended to sever his
or her employment.
Respondent had admitted to leaking a copy of the HEKASI 5 special
quiz. On 30 August 2002, the Investigating Committee found
respondent guilty of leaking a copy of the special quiz. Based on this
infraction alone, Chiang Kai Shek College would have been justified to
validly terminate respondent from service. Before the Investigating
Committee could formalize respondent's dismissal, respondent
handwrote a letter requesting that the penalty be lowered
from dismissal to suspension in exchange for respondent's
resignation at the end of the school year.
There is nothing irregular with respondent's handwritten letter. The
letter came about because respondent was faced with an
imminent dismissal and opted for an honorable severance from

employment. That respondent voluntarily resigned is a logical

conclusion.
Given the indications of voluntary resignation, therefore there is no
constructive dismissal in this case. There was here no discrimination
committed by petitioners. While respondent did not tender her
resignation wholeheartedly, circumstances of her own making
did not give her any other option. With due process, she was found
to have committed the grave offense of leaking test questions.
Dismissal from employment was the justified equivalent penalty.
Having realized that, she asked for, and was granted, not just a
deferred imposition of, but also an acceptable cover for the penalty.
Respondent should not be rewarded for reneging on her promise to
resign at the end of the school year. Otherwise, employers placed in
similar situations would no longer extend compassion to employees.
Compromise agreements, like that in the instant case, which lean
towards desired liberality that favor labor, would be discouraged.

Grace Christian High School vs. Lavandera

GR No. 177845, August 20, 2014

Goodyear Philippines Inc. vs. Angus

GR No. 185449, November 12, 2014

JURISDICTION OF THE LABOR ARBITER

Amecos Innovations Inc. et al., vs. Lopez

GR No. 178055, July 2, 2014

Indophil Textile Mills Inc. vs. Engr. Adviento

GR No. 171212, August 4, 2014

Honda Car Phils vs. Honda cars Technical Specialist &

Supervisors Union
GR No. 204142, Nov. 19 2014

Montero vs. Times Transportation

GR No. 1980828, March 16, 2015

2011 NLRC RULES OF PROCEDURE OF THE NLRC

Handwritten
DARIO NACAR vs. GALLERY FRAMES AND/OR FELIPE BORDEY, JR.
G.R. No. 189871, August 13, 2013

Handwritten
MCBURNIE vs. GANZON, EGI-MANAGERS, INC. and E. GANZON,
INC.
G.R. Nos. 178034 & 178117 G R. Nos. 186984-85, October 17, 2013

Bergonio et al., vs. South East Asian Airlines

GR No. 195227, April 21, 2014

Arabit et al., vs. Jardine Pacific Finance Inc.

GR No. 181719, April 21, 2014
Facts:
Petitioners were former regular employees of respondent Jardine Pacific
Finance, Inc. (formerly MB Finance) (Jardine). The petitioners were also
officers and members of MB Finance Employees Association-FFW
Chapter (the Union), a legitimate labor union and the sole exclusive
bargaining agent of the employees of Jardine. On the claim of financial
losses, Jardine decided to reorganize and implement a redundancy
program among its employees. The petitioners were among those
affected by the redundancy program. Jardine thereafter hired
contractual employees to undertake the functions these employees
used to perform.
The Union filed a notice of strike with the National Conciliation and
Mediation Board (NCMB), questioning the termination of employment
of the petitioners who were also union officers. The Union alleged
unfair labor practice on the part of Jardine, as well as discrimination in
the dismissal of its officers and members.
They reached a settlement but In the settlement, the petitioners
accepted their redundancy pay without prejudice to their right to
question the legality of their dismissal with the NLRC. Jardine paid the
petitioners a separation package composed of their severance pay,
plus their grossed up transportation allowance.

Issue:

WON the petitioners was illegally dismissed

implementation of the redundancy program

because

of

the

Held:
Yes, we cannot accept Jardines shallow understanding of the concepts
of redundancy and retrenchment in determining the validity of the
severance of an employer-employee relationship. These rulings
appropriately clarify that redundancy does not need to be always
triggered by a decline in the business. Primarily, employers resort to
redundancy when the functions of an employee have already become
superfluous or in excess of what the business requires. Thus, even if a
business is doing well, an employer can still validly dismiss an
employee from the service due to redundancy if that employees
position has already become in excess of what the employers
enterprise requires.
From this perspective, it is illogical for Jardine to terminate the
petitioners employment and replace them with contractual
employees. The replacement effectively belies Jardines claim that the
petitioners positions were abolished due to superfluity. Redundancy
could have been justified if the functions of the petitioners were
transferred to other existing employees of the company. To dismiss the
petitioners and hire new contractual employees as replacements
necessarily give rise to the sound conclusion that the petitioners
services have not really become in excess of what Jardines business
requires.
Guidelines in implementing redundancy
This Court laid down the principle that the employer must use fair and
reasonable criteria in the selection of employees who will be dismissed
from employment due to redundancy. Such fair and reasonable criteria
may include the following, but are not limited to: (a) less preferred
status (e.g. temporary employee); (b) efficiency; and (c) seniority.
The presence of these criteria used by the employer shows good faith
on its part and is evidence that the implementation of redundancy was
painstakingly done by the employer in order to properly justify the
termination from the service of its employees (Golden Thread
Knitting Industries vs NLRC). For the implementation of a
redundancy program to be valid, the employer must comply with the
following requisites:
(1)
written notice served on both the employees and
the Department of Labor and Employment at least one
month prior to the intended date of retrenchment;
(2)
payment of separation pay equivalent to at least
one month pay or at least one month pay for every year
of service, whichever is higher;
(3)
good faith in abolishing the redundant positions; and

(4)
fair and reasonable criteria in ascertaining what
positions are to be declared redundant and accordingly
abolished (Asian Alcohol vs NLRC).
The first level, based on Asian Alcohol, is broader as the case
recognized distinctions on a per position basis. At this level, Jardine
failed to explain why among all of the existing positions in its
organization, Jardine chose the petitioners posts as the ones which
have already become redundant and terminable.
The second level, derived from Golden Thread, is more specific. Here
the distinction narrows down to the particular employees occupying
the same positions which were already declared to be redundant. At
this level, Jardines lapse is shown by its failure to explain why among
all of its employees whose positions were determined to be redundant,
the petitioners were the ones selected to be dismissed from the
service.

Mirant (Phils) Corp., vs. Caro

GR No. 181490, April 23, 2014
Facts:
Respondent was hired by Mirant Pagbilao on January 3, 1994 as its
Logistics Officer. In 2002, when Southern Company was sold to Mirant,
respondent was already a Supervisor of the Logistics and Purchasing
Department of petitioner. At the time of the severance of his
employment, respondent was the Procurement Supervisor of Mirant
Pagbilao assigned at Petitioner Corporations corporate office. As
Procurement Supervisor, his main task was to serve as the link
between the Materials Management Department of Petitioner
Corporation and its staff, and the suppliers and service contractors in
order to ensure that procurement is carried out in conformity with set
policies, procedures and practices. In addition, respondent was put in
charge of ensuring the timely, economical, safe and expeditious
delivery of materials at the right quality and quantity to Petitioner
Corporations plant. Respondent was also responsible for guiding and
overseeing the welfare and training needs of the staff of the Materials
Management Department. Due to the nature of respondents functions,
Petitioner Corporation considers his position as confidential.
On
November 3, 2004, Petitioner Corporation conducted a random drug
test where respondent was randomly chosen among its employees who
would be tested for illegal drug use. Through an Intracompany
Correspondence, these employees were informed that they were
selected for random drug testing to be conducted on the same day
that they received the correspondence. Respondent was duly notified
that he was scheduled to be tested after lunch on that day. His receipt
of the notice was evidenced by his signature on the correspondence.

There was phone call from his wife. She said there was a bombing
incident near her workplace in Tel Aviv. So he acted on and told the
secretary of his department that respondent that he will give
preferential attention to the emergency phone call that he just
received. He also told Torres that he would be back at the office as
soon as he has resolved his predicament.
On that same day, at around 6:15 p.m., respondent returned to
Petitioner Corporations office. When he was finally able to charge his
cellphone at the office, he received a text message from Tina Cecilia
(Cecilia), a member of the Drug Watch Committee that conducted the
drug test, informing him to participate in the said drug test. He
immediately called up Cecilia to explain the reasons for his failure to
submit himself to the random drug test that day. He also proposed that
he would submit to a drug test the following day at his own expense.
Respondent never heard from Cecilia again.
On November 8, 2004, respondent received a Show Cause Notice from
Petitioner Corporation through Jaime Dulot (Dulot), his immediate
supervisor, requiring him to explain in writing why he should not be
charged with "unjustified refusal to submit to random drug testing."
Respondent submitted his written explanation on November 11, 2004.
Petitioner Corporation further required respondent on December 14,
2004 to submit additional pieces of supporting documents.
He was found guilty by the petitioners corporation Investigating panel
of unjustified refusal of to submit random drug testing. and
recommended a penalty of four working weeks suspension without
pay, instead of termination, due to the presence of mitigating
circumstances. petitioner corporations Asst. Vice President for Material
Management Department, George K. Lamela, Jr. (Lamela),
recommended that respondent be terminated from employment
instead of merely being suspended.

Issue:
WON respondent was validly terminated for his failure to take the
mandatory drug test

Held:
No, we agree with the disposition of the appellate court that there was
illegal dismissal in the case at bar. While the adoption and enforcement
by petitioner corporation of its Anti-Drugs Policy is recognized as a
valid exercise of its management prerogative as an employer, such
exercise is not absolute and unbridled. Managerial prerogatives are
subject to limitations provided by law, collective bargaining
agreements, and the general principles of fair play and justice.

Petitioner corporations subject Anti-Drugs Policy fell short of being fair

and reasonable:
First, the policy was not clear on what constitutes "unjustified refusal"
when the subject drug policy prescribed that an employees
"unjustified refusal" to submit to a random drug test shall be
punishable by the penalty of termination for the first offense. To be
sure, the term "unjustified refusal" could not possibly cover all forms of
"refusal" as the employees resistance. The fact that petitioner
corporations own personnel had to dissect the intended meaning of
"unjustified refusal" is further proof that it is not clear on what context
the term "unjustified refusal" applies to.
Second, the penalty of termination imposed by petitioner corporation
upon respondent fell short of being reasonable. Company policies and
regulations are generally valid and binding between the employer and
the employee unless shown to be grossly oppressive or contrary to
law as in the case at bar. Recognizing the ambiguity in the subject
policy, the CA was more inclined to adopt the recommendation of
petitioner corporations own Investigating Panel over that of Sliman
and the NLRC. Thus, We find that the recommended four (4) working
weeks suspension without pay as the reasonable penalty to be
imposed on [respondent] for his disobedience but not the illegal
termination of work.

Castro Jr. vs. Ateneo de Naga University et al.

GR No. 175293, July 23, 2014

Phil. Touristers Inc et al., vs. Mas Transit Workers UnionANGLO-KMU

GR No. 201237, Sept. 3, 2014

AM-Phil Food Concepts vs. Padilla

GR No. 188753, Oct. 1, 2014

Azuelo vs. Zameco II Electric Cooperative, Inc.

GR No. 192573, October 22, 2014

University of Pangasinan vs. Fernandez

GR No. 211228, Nov. 12, 2014

Metroguards Secuirty Agency vs. Hilongo

GR No. 215630, March 9, 2015

Seacrest Maritime Management vs. Picar

GR No. 209383, March 11, 2015

Waterfront Cebu City Casino Hotel vs. Ledesma

GR No. 197556, March 25, 2015

Manila Mining Corp vs. Amor

GR No. 182800, April 20, 2015

RIGHTS OF LEGITIMATE LABOR ORGANIZATION

Takata Phils Corp. vs. Bureau of Labor Relations, et al.

GR No. 196276, June 4, 2014

UNFAIR LABOR PRACTICE

Phil Electric Corp., vs. Court of Appeals

GR No. 168612, Dec. 10, 2014

OTHER IMPORTANT LABOR PROVISIONS

CONTRACTING ARRANGEMENT
Vigilla et al., vs. Phil. College of Criminology Inc.
G.R. No. 200094, June 10, 2013

BPI Employees Union-Davao city-FUBU vs. Bank of the Phil

Islands et al.
G.R. No. 174912, July 24, 2013

Alilin et al., vs. Petron Corp.

GR No. 177592, June 9, 2014

Exocet Security & Allied Services Corp., vs. Serrano

GR No. 198538, Sept. 29, 2014

FVR Skills & Services Exponents Inc. et al., vs. Seva, et al.
GR No. 200857, Oct. 22, 2014

Fonterra Brand Phils vs. Largado

GR No. 205300, March 18, 2015

ATTORNEY'S FEES & APPEARANCE OF LAWYERS

Malvar vs. Kraft Food Phils Inc. et al.
G.R. No. 183952, Sept. 9, 2013

Our Haus Realty Development Corp., vs. Parian et al.

GR No. 204651, August 6, 2014

MISCELLANEOUS PROVISIONS
EMPLOYMENT OF ACADEMIC/NON-ACADEMIC PERSONNEL
IN PRIVATE EDUCATIONAL INSTITUTION
University of the East et al., vs. Pepanio
G.R. No. 193897, Jan. 23, 2013

Handwritten
Colegio del Santisimo Rosario et al. vs. Rojo
G.R. No. 170388; September 4, 2013
Facts:
Petitioner Colegio del Santisimo Rosario (CSR) hired respondent as a
high school teacher on probationary basis for the school years 19921993, 1993-1994 and 1994-1995. On April 5, 1995, CSR, through
petitioner Sr. Zenaida S. Mofada, OP (Mofada), decided not to renew
respondents services.
Respondent filed a Complaint for illegal dismissal. He alleged that since
he had served three consecutive school years which is the maximum
number of terms allowed for probationary employment, he should be
extended permanent employment. Citing paragraph 75 of the 1970
Manual of Regulations for Private Schools (1970 Manual), respondent
asserted that "full- time teachers who have rendered three (3)

consecutive years
permanent."

of

satisfactory

services

shall

be

considered

Petitioners maintain that upon the expiration of the probationary

period, both the school and the respondent were free to renew the
contract or let it lapse. Petitioners insist that a teacher hired for three
consecutive years as a probationary employee does not automatically
become a regular employee upon completion of his third year of
probation. It is the positive act of the school the hiring of the teacher
who has just completed three consecutive years of employment on
probation for the next school year that makes the teacher a regular
employee of the school.

Held:
In Mercado v. AMA Computer College-Paraaque City, Inc., we had
occasion to rule that cases dealing with employment on probationary
status of teaching personnel are not governed solely by the Labor Code
as the law is supplemented, with respect to the period of probation, by
special rules found in the Manual of Regulations for Private Schools
(the Manual).
With regard to the probationary period, Section 92 of the 1992
Manual provides:
Section 92. Probationary Period. Subject in all instances to
compliance with the Department and school requirements, the
probationary period for academic personnel shall not be more
than three (3) consecutive years of satisfactory service for those
in the elementary and secondary levels, six (6) consecutive
regular semesters of satisfactory service for those in the tertiary
level, and nine (9) consecutive trimesters of satisfactory service
for those in the tertiary level where collegiate courses are offered
on a trimester basis.
In this case, petitioners teachers who were on probationary
employment were made to enter into a contract effective for one
school year. Thereafter, it may be renewed for another school year,
and the probationary employment continues. At the end of the second
fixed period of probationary employment, the contract may again be
renewed for the last time.
Such employment for fixed terms during the teachers probationary
period is an accepted practice in the teaching profession.
That teachers on probationary employment also enjoy the protection
afforded by Article 281 of the Labor Code is supported by Section 93 of
the 1992 Manual which provides:
Sec. 93. Regular or Permanent Status. - Those who have served
the probationary period shall be made regular or permanent.

Full-time teachers who have satisfactorily completed their

probationary period shall be considered regular or permanent.
The above provision clearly provides that full-time teachers become
regular or permanent 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. For how else can one determine if
probationary teachers have satisfactorily completed the probationary
period if standards therefor are not provided?
As such, "no vested right to a permanent appointment shall accrue
until the employee has completed the prerequisite three-year period
necessary for the acquisition of a permanent status. [However, it must
be emphasized that] mere rendition of service for three consecutive
years does not automatically ripen into a permanent appointment. It is
also necessary that the employee be a full-time teacher, and that the
services he rendered are satisfactory.
However, for teachers on probationary employment, in which case a
fixed term contract is not specifically used for the fixed term it offers, it
is incumbent upon the school to have not only set reasonable
standards to be followed by said teachers in determining qualification
for regular employment, the same must have also been communicated
to the teachers at the start of the probationary period, or at the very
least, at the start of the period when they were to be applied. These
terms, in addition to those expressly provided by the Labor Code,
would serve as the just cause for the termination of the probationary
contract.
In this case, glaringly absent from petitioners evidence are the
reasonable standards that respondent was expected to meet that could
have served as proper guidelines for purposes of evaluating his
performance. Nowhere in the Teachers Contract could such standards
be found. Neither was it mentioned that the same were ever conveyed
to respondent. Even assuming that respondent failed to meet the
standards set forth by CSR and made known to the former at the time
he was engaged as a teacher on probationary status, still, the
termination was flawed for failure to give the required notice to
respondent.

MEDICAL, DENTAL AND OCCUPATIONAL SAFETY

Indophil Textile Mills Inc. vs. Engr. Adviento
GR No. 171212, August 4, 2014

MIGRANT WORKER'S ACT/RECRUITMENT AND PLACEMENT

Handwritten
Hon. Sto Tomas vs. Salac et al.
G.R. Nos. 156642 & 152710, Nov. 13, 2012, En Banc

APQ Shipmanagement Co. Ltd., et al., vs. Casenas

GR No. 197303, June 4, 2014

Handwritten
SAMEER OVERSEAS PLACEMENT AGENCY, INC. vs. JOY C.
CABILES
G.R. No. 170139, August 5, 2014

SOCIAL LEGISLATION

SSS et al., vs. Alba

G.R. No. 165482, July 23, 2008

Rodrin vs. GSIS et al.

G.R. No. 162837, July 28, 2008

GSIS vs. Casco, G.R. No. 173430

July 28, 2008

SSS vs. Delos Santos, citing Aguas and 2005 Dycaico

GR No. 164790, Aug 29, 2008

Becmen Service Exporter and Promotion Inc. vs. Cuaresma

GR No. 182978-79, April 7, 2009
FACTS:
On January 6, 1997, Jasmin Cuaresma (Jasmin) was deployed by
Becmen Service Exporter and Promotion, Inc. (Becmen) to serve as
assistant nurse in Al-Birk Hospital in the Kingdom of Saudi Arabia
(KSA), for a contract duration of three years, with a corresponding
salary of US$247.00 per month. Over a year later, she died allegedly of
poisoning. Jessie Fajardo, a co-worker of Jasmin, narrated that on June
21, 1998, Jasmin was found dead by a female cleaner lying on the floor

inside her dormitory room with her mouth foaming and smelling of
poison.
Based on the police report and the medical report of the examining
physician of the Al-Birk Hospital, who conducted an autopsy of Jasmins
body, the likely cause of her death was poisoning.
Jasmins body was repatriated to Manila on September 3, 1998. The
following day, the City Health Officer of Cabanatuan City conducted an
autopsy and the resulting medical report indicated that Jasmin died
under violent circumstances, and not poisoning as originally found by
the KSA examining physician. The toxicology report of the NBI,
however, tested negative for non-volatile, metallic poison and
insecticides.
Simplicio and Mila Cuaresma (the Cuaresmas), Jasmins parents and
her surviving heirs, received from the Overseas Workers Welfare
Administration (OWWA) the following amounts: P50,000.00 for death
benefits; P50,000.00 for loss of life; P20,000.00 for funeral expenses;
and P10,000.00 for medical reimbursement.
On November 22, 1999, the Cuaresmas filed a complaint against
Becmen and its principal in the KSA, Rajab & Silsilah Company (Rajab),
claiming death and insurance benefits, as well as moral and exemplary
damages for Jasmins death, Jasmins death was work-related, having
occurred at the employers premises; that under Jasmins contract with
Becmen, she is entitled to iqama insurance coverage; that Jasmin is
entitled to compensatory damages in the amount of US$103,740.00,
which is the sum total of her monthly salary of US$247.00 per month
under her employment contract, multiplied by 35 years (or the
remaining years of her productive life had death not supervened at age
25, assuming that she lived and would have retired at age 60).
In their position paper, Becmen and Rajab insist that Jasmin committed
suicide, citing a prior unsuccessful suicide attempt sometime in March
or April 1998 and relying on the medical report of the examining
physician of the Al-Birk Hospital. They likewise deny liability because
the Cuaresmas already recovered death and other benefits totaling
P130,000.00 from the OWWA. They insist that the Cuaresmas are not
entitled to iqama insurance because this refers to the issuance
not insurance of iqama, or residency/work permit required in the KSA.
On the issue of moral and exemplary damages, they claim that the
Cuaresmas are not entitled to the same because they have not acted
with fraud, nor have they been in bad faith in handling Jasmins case.
While the case was pending, Becmen filed a manifestation and motion
for substitution alleging that Rajab terminated their agency
relationship and had appointed White Falcon Services, Inc. (White
Falcon) as its new recruitment agent in the Philippines. Thus, White
Falcon was impleaded as respondent as well, and it adopted and

reiterated Becmens arguments in the position paper it subsequently

filed.

ISSUES:
(1) whether the Cuaresmas are entitled to monetary claims, by way of
benefits and damages, for the death of their daughter Jasmin.
(2) whether or not Jasmins death be considered as work-connected
and thus compensable even while she was not on duty;

HELD:
Article 19 of the Civil Code provides that every person must, in the
exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith.
Article 21 of the Code states that any person who wilfully causes loss
or injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for the damage.
And, lastly, Article 24 requires that in all contractual, property or other
relations, when one of the parties is at a disadvantage on account of
his moral dependence, ignorance, indigence, mental weakness, tender
age or other handicap, the courts must be vigilant for his protection.
Clearly, Rajab, Becmen and White Falcons acts and omissions are
against public policy because they undermine and subvert the interest
and general welfare of our OFWs abroad, who are entitled to full
protection under the law. They set an awful example of how foreign
employers and recruitment agencies should treat and act with respect
to their distressed employees and workers abroad. Their shabby and
callous treatment of Jasmins case; their uncaring attitude; their
unjustified failure and refusal to assist in the determination of the true
circumstances surrounding her mysterious death, and instead finding
satisfaction in the unreasonable insistence that she committed suicide
just so they can conveniently avoid pecuniary liability; placing their
own corporate interests above of the welfare of their employees all
these are contrary to morals, good customs and public policy, and
constitute taking advantage of the poor employee and her familys
ignorance, helplessness, indigence and lack of power and resources to
seek the truth and obtain justice for the death of a loved one.
Giving in handily to the idea that Jasmin committed suicide, and
adamantly insisting on it just to protect Rajab and Becmens material
interest despite evidence to the contrary is against the moral law
and runs contrary to the good custom of not denouncing ones
fellowmen for alleged grave wrongdoings that undermine their good
name and honor.

Whether employed locally or overseas, all Filipino workers enjoy the

protective mantle of Philippine labor and social legislation, contract
stipulations to the contrary notwithstanding. This pronouncement is in
keeping with the basic public policy of the State to afford protection to
labor, promote full employment, ensure equal work opportunities
regardless of sex, race or creed, and regulate the relations between
workers and employers. This ruling is likewise rendered imperative by
Article 17 of the Civil Code which states that laws which have for their
object public order, public policy and good customs shall not be
rendered ineffective by laws or judgments promulgated, or by
determinations or conventions agreed upon in a foreign country.
The relations between capital and labor are so impressed with public
interest,and neither shall act oppressively against the other, or impair
the interest or convenience of the public. 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.
The grant of moral damages to the employee by reason of misconduct
on the part of the employer is sanctioned by Article 2219 (10) of the
Civil Code, which allows recovery of such damages in actions referred
to in Article 21.
Thus, in view of the foregoing, the Court holds that the Cuaresmas are
entitled to moral damages, which Becmen and White Falcon are jointly
and solidarily liable to pay, together with exemplary damages for
wanton and oppressive behavior, and by way of example for the public
good.
On the second issue:
While the employers premises may be defined very broadly not only
to include premises owned by it, but also premises it leases, hires,
supplies or uses, we are not prepared to rule that the dormitory
wherein Jasmin stayed should constitute employers premises as would
allow a finding that death or injury therein is considered to have been
incurred or sustained in the course of or arose out of her employment.
There are certainly exceptions, but they do not appear to apply here.
Moreover, a complete determination would have to depend on the
unique circumstances obtaining and the overall factual environment of
the case, which are here lacking.
WHEREFORE, Rajab & Silsilah Company, White Falcon Services, Inc.,
Becmen Service Exporter and Promotion, Inc., and their corporate
directors and officers are found jointly and solidarily liable and
ORDERED to indemnify the heirs of Jasmin Cuaresma, spouses
Simplicio and Mila Cuaresma, the following amounts:
(1) TWO MILLION FIVE HUNDRED
(P2,500,000.00) as moral damages;

THOUSAND

PESOS

(2) TWO MILLION FIVE HUNDRED

(P2,500,000.00) as exemplary damages;

THOUSAND

PESOS

(3) Attorneys fees equivalent to ten percent (10%) of the total

monetary award.

GSIS vs. De Castro

GR No. 185035, July 15, 2009

Great Southern Maritime Service Corp., et al., vs. Surigao,

citing 2009 Becmen Service Exporter & Promotions, Inc.
GR No. 183646, Sept. 18, 2009

Kestrel Shipping Co. et al., vs. Munar

G.R. No. 198501, Jan. 30, 2013

Sy vs. Phil Transmarine Carriers Inc.

G.R. No. 191740, Feb. 11, 2013

Nazareno vs. Maersk Filipinas Crewing Inc. et al.

G.R. No. 168703, Feb. 26, 2013 En Banc

Philippine Journalist Inc. vs. Journal Employees Union et al.

G.R. No. 192601, June 3, 2013

Mitsubishi Motors Phils Salaried Employees Union vs.

Mitsubishi Motors Phils Corp.
G.R. No. 175773, June 17, 2013

Philman Marine Agency Inc. et al., vs. Cabanban

G.R. No. 186509, July 28, 2013

Bartolome vs. Social Security System

GR No. 192531, November 12, 2014