LA ROSA v. AMBASSADOR HOTEL (2009) Facts: The employees of Ambassador Hotel filed before NLRC several complaints against the manager, Yolanda Chan for violation of labor standards. This prompted an investigation which resulted into the finding of said violation. The management was ordered to pay the money claims of employees. The management was purportedly angered and retaliated by suspending and/or constructively dismissing the employees by drastically reducing their work days through a rotation/work reduction scheme. Cases for estafa were also filed against them but were dismissed for lack of merit. LA Chan is guilty of illegal dismissal NLRC Chan is guilty of illegal and constructive dismissal CA Reversed NLRC because workers simply disappeared from work upon learning of the work reduction/rotation scheme. The scheme is a valid management prerogative due to business reverses and not done out of vengeance.
Facts: Respondents were regular employees of Unicorn
who normally worked 6 times a week and were paid on a weekly basis. They were also officers of a union. In 1998, Unicorn GM Hilario Yulo issued a Memorandum informing respondents that their workdays will be reduced due to economic considerations (i.e. sales decrease, production cost, devaluation of peso and increased minimum wage). Respondents protested and expressed doubts surmising that the management was just getting back at them for forming a union and that only union officers were affected by the Memorandum. Another Memorandum was issued reducing work days from 6 to 3. Upon protest, the management reasoned that it was a management prerogative. Hence, respondents filed a case before NLR for constructive dismissal and ULP. After several letters exchanged and the plight of employees unheeded, the employees decided not to report for work. LA - Respondents not constructively dismissed. If respondents strongly opposed the scheme, they could have filed a case for illegal rotation. The case against ULP was dismissed for lack of basis. NLRC Sustained LA. The Waiver, Release and Quitclaim was not signed under duress
Issue: a) WON the work reduction/rotation scheme is a
valid exercise of management prerogative; b) WON the employees abandoned their work.
CA Partially granted the petition for reinstatement and
payment but did not make a contrary finding on the charge of ULP for lack of clear cut evidence.
Held: a) No. Records failed to show documentary proof
that the scheme was adopted due to business reverses. The Memorandum which informed the employees did not mention such reason. However, it was shown based from the LA/NLRC and as admitted by the management that several complaints were filed against them for violation of labor standards. Though some of them were already partially settled, the scheme was implemented. The managements sudden and unfounded implementation of the scheme greatly reduced the employees salaries which is tantamount to constructive dismissal.
Issue: WON there is constructive dismissal
b) No. Abandonment of work, burden of proof rests on
the management. This was not proven by the management. Abandonment occurs only if: a) there absence without valid reason; and b) intent to sever EER as manifested by overt acts. In the case, the employees who took steps to protest their dismissal cannot be said to have abandoned his work. UNICORN SAFETY GLASS v. BASARTE (2004)
Held: Yes. Unicorns unbending stance on the
implementation of the scheme was an indication that it was implemented for reasons other than business necessity. Despite attempts of respondents to have a dialogue with Yulo but this was ignored. Management prerogative is not absolute. It must be exercised in good faith and with due regard to rights of labor. In the case, the management was keen on summarily implementing the scheme and it was obviously directed only to the union officers. The managements lack of interest to hear the plea of respondents creates an unjust situation which justifies the latter not to report for work. The charge of abandonment for work does not hold water when taken in light of the complaint for constructive dismissal. Respondents cannot be said to have abandoned work when the root cause of their protest is their demand to maintain their regular work hours.
SPECIAL STEEL PRODUCTS v. VILLAREAL (2004)
Facts: Lutgardo Villlareal and Frederick Go worked for the management as assistant sales manager and salesman respectively. In 1993, Villlareal obtained a car loan from Bank of Commerce with the company as surety (as shown by continuing surety agreement and promissory note wherein they jointly and severally agreed to pay the amount in 72 monthly installments). In 1997, Villareal resigned and joined Hi-Grade Industrial as executive vice president. In 1994, the company sponsored So to attend a 9-month training course of BOHLER (the managements principal company) in Austria as a reward for his outstanding sales performance. Upon return, he was signed a memorandum requiring that BOHLER requires trainees to continue working with the company for 3 years, otherwise, he shall refund BOHLER $6000 by set-off. After 2 years and 4 months, So resigned. The company ordered So and Villareal to render and accounting of its various Christmas giveaways they received for distribution to customers. So and Villareal protested and demanded payment of their pay and benefits. The company withheld their 13th month pay and benefits. LA/NLRC/CA Ordered the company to pay So and Villareal. Issue: WON the employer may withhold employees wages and benefits as lien to protect its interest as a surety in the latters car loan and for expenses incurred in a training abroad. Held: No. Under Art. 116 which states that it shall be unlawful for any person, directly or indirectly, to withhold any amount of wages and benefits of a worker without the latters consent, the company has not authority to withhold the 13th month pay and benefits. What an employee has worked for, the employer must pay. It simply cannot refuse to pay wages because the employee defaulted in the payment of loan guaranteed by employer, or violated an agreement, or failed to render an accounting of his employers property. As to So, the lump sum, He has to refund it to BOHLER and not to the company. HONDA PHILS, INC. v. SAMAHANG MANGGAGAWA NG HONDA (2005) Facts: In 1998, Honda and the employees union started re-negotiations for the 4th and 5th years of their CBA but ended upon on a deadlock. A Notice of Strike was filed,
while Honda filed a Notice of Lockout. DOLE assumed
jurisdiction and ordered the parties to cease and desist which were complied. In 1999, the union filed a second notice of strike on the ground of ULP on the ground that Honda contracted out work to their detriment. A strike was staged for 31 days until DOLE assumed jurisdiction and the case was brought for voluntary arbitration. Honda issued a Memorandum announcing the pro-rata computation of the 13th and 14th month pay wherein the 31 days striker shall be considered. The amount equivalent of 1 & of the basic salary shall be deducted from the bonuses, provided that in case the strike will be considered legal, Honda shall pay the amount deducted. The union opposed the computation. Voluntary Arbiter/CA the computation is invalid Issue: WON the pro-rated computation of the 13th/14th month pay and other benefits are lawful. Held: No. The provision of CBA is contentious. Honda wanted to implement a pro-rated computation on a no work-no pay rule. However, it was not stated categorically whether the computation be based on 1 full month basic salary or on the actual compensation actually received. PD851 or the 13th Month Pay Law not less than 1/12 of the basic salary earned within a calendar year. It shall not include allowances and monetary benefits not part of basic salary. For employees with regular wage basic salary is the 1/12 of the standard monthly wage x length of service within calendar year. In the present case, 13th month pay should be based on length of service and not on actual wage earned by a worker. Honda admitted that it was the 1st time that Honda implemented pro-rated computation because of the strike. It was implied that a full moth basic pay computation was given as a practice by virtue of CBA. To allow the pro-ration of the 13th month pay in this case is to undermine the wisdom behind the law and the mandate that the workingmans welfare should be the primordial and paramount consideration. What is more, the factual milieu of this case is such that to rule otherwise inevitably results to dissuasion, if not a deterrent, for workers from the free exercise of their constitutional rights to self-organization and to strike in accordance with law.
PAGASA STEEL WORKS v. CA (2006)
Facts: Petitioner is engaged in the manufacture of steel bars and wire rods while Pag-Asa Steel Workers Union is the duly authorized bargaining agent of the rank-andfile employees. In 1998, RTWPB of NCR issued a wage order which provided for a P 13.00 increase of the salaries receiving minimum wages. The Petitioner and the union negotiated on the increase. Petitioner forwarded a letter to the union with the list of adjustments involving rank and file employees. In September 1999, the petitioner and union entered into a CBA where it provided wage adjustments namely P15, P25, P30 for three succeeding year. On the first year, the increase provided were followed until RTWPB issued another wage order where it provided for a P25.50 per day increase in the salary of employees receiving the minimum wage and increased the minimum wage to P223.50 per day. Petitioner paid the P25.50 per day increase to all of its rank-and-file employees. On November 2000, Wage Order No. NCR-08 was issued where it provided the increase of P26.50 per day. The union president asked that the wage order be implemented where petitioner rejected the request claiming that there was no wage distortion and it was not obliged to grant the wage increase since no employees are receiving below P250. Voluntary Arbiter In favor of the company CA in favor of the respondents Issue: WON the company was obliged to grant the wage increase under the Wage Order as a matter of practice. Held: No. The company is not obliged to grant the wage increase. It is submitted that employers, unless exempt, are mandated to implement the said wage order but limited to those entitled thereto. The record shows that the lowest paid employee before the implementation of Wage Order #8 is P250.00/day and none was receiving below P223.50 minimum. This could only mean that the union can no longer demand for any wage distortion adjustment. The provision of wage order #8 and its implementing rules are very clear as to who are entitled to the P26.50/day increase, i.e., "private sector workers and employees in the National Capital Region receiving the prescribed daily minimum wage rate of P223.50 shall receive an increase of Twenty-Six Pesos and Fifty Centavos (P26.50) per day," and since the lowest paid is P250.00/day, the company is not obliged to adjust the wages of the workers.
The provision in the CBA that "Any Wage Order to be
implemented by the Regional Tripartite Wage and Productivity Board shall be in addition to the wage increase adverted above" cannot be interpreted in support of an across-the-board increase. Wage Order No. NCR-08 clearly states that only those employees receiving salaries below the prescribed minimum wage are entitled to the wage increase provided therein, and not all employees across-the-board as respondent Union would want petitioner to do. Considering therefore that none of the members of respondent Union are receiving salaries below the P250.00 minimum wage, petitioner is not obliged to grant the wage increase to them. Moreover, to ripen into a company practice that is demandable as a matter of right, the giving of the increase should not be by reason of a strict legal or contractual obligation, but by reason of an act of liberality on the part of the employer. Hence, even if the company continuously grants a wage increase as mandated by a wage order or pursuant to a CBA, the same would not automatically ripen into a company practice. PROTACIO v. LAYA MANANGHAYA & Co. (2009) Facts: KPMG Mananghaya hired Protacio as Tax Manager in 1996. He was promoted as Senior Tax Manager and then Tax Principal in 1997. He resigned in 1999. On the same the year, Protacio wrote to the company demanding the payment of his 13th month pay, cash commutation of leave credits and the issuance of 1999 Certificate of Income Tex Withheld on Compensation. He sent two more letters under pain of legal action, but the company failed to act on the demand. Protactio then filed before NLRC a complaint. Among those sought is the P674, 756.7 lump sum pay for FY1999. During the pendency of the case, the company sent check payments but Protacio disputed the computation of his vacation leave credits and reimbursement claims. LA ordered the company to pay reimbursement claims, cash payment of leave credits and the P573, 000 year end lump sum payment. The lump sum is based on the company policy granting such to Protacio during all the years of service. NLRC affirmed LA with modification on amount of claims. Affirmed the lump sum. CA Affirmed but further reduced the claims. Also held that the payment of lump sum is contingent on the financial condition of the company.
Issue: WON Protaction is entitled to year end lump sum
as part of his compensation package. Held: No. The payment to non-partners like the petitioner was discretionary on the part of the chairman and managing chairman coming from their authority to fix compensation of any employee based on a share in the partnerships net income. The distribution being merely discretionary, the year-end lump sum payment may properly be considered as a year-end bonus or incentive. A bonus is a gratuity, or act of liberality of the giver. It is something given in addition to what is ordinarily received by or strictly due the recipient. A bonus is granted and paid to an employee for his industry and loyalty which contributed to the success of the employers business and made possible the realization of profits. Generally, a bonus is not a demandable and enforceable obligation. It is so only when it is made part of the wage or salary or compensation. When considered as part of the compensation and therefore demandable and enforceable, the amount is usually fixed. If the amount would be dependent upon the realization of profits, the bonus is also not demandable and enforceable Thus, petitioners claim that the year-end lump sum represented the balance of his total compensation package is incorrect. The fact remains that the amount paid to petitioner on the two occasions varied and were always dependent upon the firms financial position. If the bonus is paid only if profits are realized or a certain amount of productivity achieved, it cannot be considered part of wages. Only when the employer promises and agrees to give without conditions imposed for its payment does the bonus become part of the wage. The company was also justified in declining to give the bonus to Protacio on account of the latters unsatisfactory performance. The granting of the yearend lump sum bonus was discretionary and conditional, thus, petitioner may not question the basis for the granting of a mere privilege. PRODUCERS BANK v. NLRC (2001) Facts: Issue: Held: An employer cannot be forced to distribute bonuses which it can no longer afford to pay, a bonus is an amount granted and paid to an employee for his
industry and loyalty which contributed to the success of
the employers business and made possible the realization of profile. It is an act of generosity and is a management prerogative, given in addition to what is ordinarily received by or strictly due the recipient. Thus, it is not a demandable and enforceable obligation, except when it is made part of the wage, salary or compensation of the employee. The conservator was justified in reducing the mid-year and Christmas bonuses of petitioners employees. Ultimately, it is to the employees advantage that the conservatorship achieve its purposes otherwise, the closure of the company would result in the employees losing their jobs. PD 851 requires all employees to pay their employees a basic salary of not more than P1, 000 at 13th monthly pay. However, employees already paying their employees a 13th month pay are not covered by the law. The term equivalent shall be constructed to include Christmas bonus, mid year bonus, cash bonuses and other payments amounting to not less than 1 /12 of the basic salary. The intention was to grant relief to those not actually paid a bonus, by whatever name called. Thus, petitioner is justified in crediting the mid year bonus and Christmas bones as part of the 13th month pay. The divisor used by petitioner in arriving at the employees daily rate for the purpose of computing salary related benefits is 314 days. This finding was not disputed by the NLRC. However, the divisor was for the sole purpose of increasing the employees overtime pay and was not meant to replace the use of 314 as the divisor in the computation of the daily rate for salary related benefits.
CONDITIONS OF EMPLOYMENT PENARANDA v. BANGAGA PLYWOOD (2006) AUTOBUS TRANSPORT v. BAUTISTA (2005) UNION OF FILIPRO EMPLOYEES v. VIVAR (1992) INTERPHIL LAB UNION v. INTERPHIL LAB (2001)