Labor Law Digests 1

2000 CASES
Q: X had been working for a year as a security guard
with company A., a sister company of company B. He
was hired on January 1, 1988 as he was among those
absorbed by company B when it took over the security
contracts of its sister company A. He was forced by
company B to sign a new probationary contract for 6
mos; and on August 1, 1988, his employment was
terminated for allegedly sleeping on post and quarreling
with a co-worker. Was B a regular employee and
thereby illegally dismissed?
A: Yes. Bs employment with company B was just a
continuation of his employment with company A. The
Court cannot sanction the practice of companies that
effects the transfer of its employees to another entity
whose owners are the same, in order to deprive subject
employees of the benefits he is entitled to under the law.
Nevertheless, B attained the status of a regular
employee with company B upon completion of his sixmonth period of probation. He started working on
January 30, 1988; and the end of the period of probation
was on July 27, 1988. When he was dismissed on
August 1, he was already a regular employee with a
security of tenure. Private respondents alleged
violations were first infractions and do not amount to
valid grounds for terminating employment. (A Prime
Security Services, Inc. v. NLRC, G.R. 107320,
January 19, 2000)
Q: KMDD-CFW is a union whose CBA with the company
A expired. During renegotiations, the management
panel arrived late causing the union panel to walk out.
The management addressed a letter of apology to the
union and requested for negotiations to resume. The
union panel did not show up despite letters from
management advising the former of the CBA meetings.
Consequently, the union struck. A complaint was filed by
Golden Donuts to declare the strike illegal. Counsel for
the union strikers pleaded for a compromise whereupon
a 257 out of 262 members agreed to a compromise
settlement whereby they shall be paid separation pay in
exchange for the dismissal of the criminal and unfair
labor practice cases filed by petitioners against them.
Could the union compromise or waive the rights to
security of tenure and money claims of its minority
members, without the latters consent?
A: No. Absent a showing of the unions special authority
to compromise the individual claims of private
respondents for reinstatement and backwages, there is
no valid waiver of the aforesaid rights. The judgment of
the Labor Arbiter upholding the dismissal of private
respondents based on the compromise agreement does
not have the effect of res judicata those who did not
agree thereto since the requirement of identity of parties
is not satisfied. A judgment upon a compromise
agreement is conclusive only upon parties thereto and
their privies. Private respondents have not waived their
right to security of tenure nor can they be barred from

entitlement of their individual claims. Since there was no

evidence that private respondents committed any illegal
act, petitioners failure to reinstate them after the
settlement of the strike amounts to illegal
dismissal. (Golden Donuts, Inc. v. NLRC, G.R. Nos.
113666-68, January 19, 2000)
Q: Union A, of which X was a part, filed with the DOLE a
notice of strike raising charges of ULP and illegal
dismissal against Company A. The Labor Arbiter ordered
Company A to pay X separation pay of month pay for
every year of service. X filed a motion for execution of
the decision of the Labor Arbiter. The Rehabilitation
Receiver of Company A submitted a Manifestation with
Motion, alleging that petitioner was not yet in a position
to comply with the directive of the Labor Arbiter as it was
still under Rehabilitation Receivership by virtue of the
order of the SEC. However, the Labor Arbiter still
granted the motion for execution. Company A contends
that the NLRC should have denied the order of the LA
for the immediate payment of separation pay because of
the order of the SEC suspending all claims against
petitioner pending before any court, tribunal or body.
Can the order of the SEC stay the execution of judgment
against petitioner?
A: No. Although a stay of execution may be warranted
by the fact that a petitioner corporation has been placed
under rehabilitation receivership, the SEC already issued
an order approving the rehabilitation plan of petitioner
and placing it under liquidation pursuant to PD 902-A.
Since receivership proceedings have ceased and
petitioners rehabilitation receiver and liquidator has
been given the imprimatur to proceed with corporate
liquidation, the cited order of the SEC has been
rendered functus oficio. Petitioners monetary obligation
to private respondent is long overdue and thus cannot
delay the satisfaction of private respondents claim.
However, due to events subsequent to the filing of this
petition, private respondent must present its claim with
the rehabilitation receiver and liquidator in the SEC,
subject to the rules on preference of credits. (Alemars
Sibal & Sons, Inc. v. NLRC, G.R. No. 114761, January
19, 2000)
Q: X was employed as a quality control inspector with
the duty of inspecting LPB cylinders for any possible
defects. He was dismissed when he was allegedly
caught by petitioners company President for sleeping on
the job, thereby violating Company Rule 15-b. He was
asked to explain why no disciplinary action should be
taken against him, to which he promptly replied.
Notwithstanding his reply, he was terminated. Was X
illegally dismissed?
A: Yes. Petitioners claim that private respondent slept
on the job was not substantiated by any evidence. In
other cases, sleeping on the job was found as a valid
ground for dismissal because such cases involved
security guards whose duty necessitates that they be
awake and watchful at all times, such is not the degree
of discipline required of a quality control inspector. While

an employer is allowed a wide discretion in the

promulgation of company policies, such should always
be fair and reasonable. In this case, the dismissal
meted out on private respondent for sleeping on the job
appears to be too harsh a penalty. (VH Manufacturing,
Inc. v. NLRC, G.R. No. 130957, January 19, 2000)
Q: Company Y is engaged in road construction projects
of the government. It engaged the services of certain
workers to work on various projects on different dates.
Several of its workers joined Union A as members.
Union A filed a motion for certification election with the
regional office. Company Y opposed stating that the
workers were project employees and not qualified to
form part of the rank and file collective bargaining unit.
Later, Company Y terminated the employment of the
workers due to the completion of its projects or the
expiration of workers contracts. The affected workers
claimed they were dismissed because of their union
activities; and thus staged a strike. The strike was
declared illegal and the workers were deemed to have
lost their employment status. Were the workers validly
dismissed?
A: Yes. The contracts of employment of petitioners
attest to the fact that they were hired for specific
projects and their employment was coterminous
with the completion of the project for which they had
been hired. Also, they were informed in advance
that said project or undertaking for which they were
hired would end on a stated or determinable date.
Since the workers were project employees, their
employment legally ended upon completion of their
respective projects. (Association of Trade Unions v.
Abella, G.R. No. 100518, January 24, 2000.
Q: Company K allowed the temporary transfer holding of
office at Kalibo, Aklan. Nevertheless, majority of the
employees continued to work at its office in Lezo Aklan
and were paid their respective salaries. From June 1992
to March 1993, X and Y reported to work at the Lezo
office and were not paid their salaries. From March up
to the present, they were again allowed to draw their
salaries. It is the assertion of Company K that X and Y
voluntarily abandoned their work assignments and that
they defied the lawful orders by the General manager
and thus the Board of Directors passed a resolution
resisting and denying X and Ys claims under the
principle of no work, no pay. X and Y interpose that
the transfer to Kalibo was illegal. Are X and Y entitled to
claim their unpaid wages from June 1992 to March
1993?
A: No. Petitioner was able to show that private
respondents did not render services during the stated
period. X and Y even admitted that they did not report at
the Kalibo office, as Lezo remained to be their office
where they continuously reported. It was not for X and Y
to declare the managements act of transferring the
office to Kalibo as an illegal act as there was no
allegation of proof that such was made in bad faith or
with malice. Private respondents were dismissed by

petitioner effective January 1992 and were accepted

back, subject to the condition of no work, no pay
effective March 1993 which is why they were allowed to
draw their salaries again. (Aklan Electric Cooperative
Incorporated v. NLRC, G.R. 121439, January 25,
2000)
Q: A was hired by Isetann Department Store as a
security checker to apprehend shoplifters. As a costcutting measure, private respondent decided to phase
out its security section and engage the services of an
independent security agency. A was then terminated
prompting him to file a complaint for illegal dismissal.
NLRC ordered petitioner to be given separation pay
holding that the phase-out of the security section was a
legitimate business decision. However, A was denied
the right to be given written notice before termination of
his employment. What is the effect of violation of the
notice requirement when termination is based on an
authorized cause?
A: The dismissal is ineffectual. In termination of
employment under Art. 283, the violation of notice
requirement is not a denial of due process as the
purpose is not to afford the employee an opportunity to
be heard on any charge against him, for there is none.
The purpose is to give him time to prepare for the
eventual loss of his job and the DOLE to determine
whether economic causes do exist justifying the
termination of his employment. With respect to Art. 283,
the employers failure to comply with the notice
requirement does not constitute a denial of due process
but a mere failure to observe a procedure for the
termination of employment which makes the termination
of employment merely ineffectual.
If the employees separation is without cause, instead of
being given separation pay, he should be reinstated. In
either case, whether he is reinstated or given separation
pay, he should be paid full backwages if he has been
laid off without written notice at least 30 days in
advance.
With respect to dismissals under 282, if he was
dismissed for any of the just causes in 282, he should
not be reinstated.
However, he must be paid
backwages from the time his employment was
terminated until it is determined that the termination is for
a just cause because the failure to hear him renders the
termination of his employment without legal
effect. (Serrano v. NLRC, G.R. No. 117040, January
27, 2000)
Q: A was employed as housekeeper with Company B.
He also owned a car-for-hire which he rented to B who
operated the car as a taxi. One day, B approached the
front desk clerk at petitioners hotel requesting a
collectible of P2000 be added to a certain Korean
guests, Mr. Hus bill. Mr. Hu later complained that he
was overbilled. A explained his side being the front desk
supervisor and owner of the car. Eventually, Company
Bs staff confirmed the error and refunded the amount to
the Korean. Company B terminated the services of A on

the ground of loss of confidence for the latters malicious

intent to defraud a guest of the hotel. Was A illegally
dismissed?
A: Yes. Company B failed to prove by ample evidence
that A intended to defraud Mr. Hu. The front desk clerk
admitted being the one responsible for entering the
P2000 in Mr. Hus statement of account. Also, B
admitted approaching the front desk clerk to demand
payment of the transportation fee as he was hired by Mr.
Hus group for two days believing in good faith that Mr.
Hu owed him P2000. As there is no valid and just cause,
he is entitled to reinstatement without loss of seniority
rights plus full backwages and other benefits withheld
from him up to the time of his actual
reinstatement. (Condo Suite Club Travel, Inc. v. NLRC,
G.R. No. 125671, January 28, 2000)
Q: Union A and Company B were faced with a
bargaining deadlock. The union then filed a notice of
strike with the NCMB. Later, the union conducted a
strike vote among its members and the results were
submitted to the Alliance of Nationalist and Genuine
labor Organization for submission to the NCMB, but
which was not made. The union went on strike without
the report of the strike vote submitted to the NCMB.
Company B filed a petition to declare the strike illegal
alleging that the union barricaded gates of Company B
and committed acts of violence, threats and coercion.
Trial on the merits was conducted wherein Company B
presented witnesses and evidence, Union A did not
present any witness but instead relied on their
Memorandum contending that respondents evidence
are inadmissible. Was the strike illegal?
A: Yes. Failure to submit the strike vote to the NCMB
immediately makes the strikek illegal. The illegality of
the strike is further affirmed by the acts of violence,
threats and coercion committed during the strike. The
requirements of procedural due process were complied
with as both parties were allowed to present their
witnesses and evidence, although petitioner opted
instead to file a memorandum. (Samahan ng
Manggagawa sa Moldex Products, Inc. v. NLRC, G.R.
No. 119467, February 1, 2000)
Q: V was hired by RFC as sales representative. He
avers that he was transferred by RFC to PMCI, an
agency which provides RFC with additional contractual
workers. In PMCI, he was reassigned to RFC as sales
representative and then later informed by the personnel
manager of RFC that his services were terminated. RFC
maintains that no employer-employee relationship
existed between V and itself. V filed complaint for illegal
dismissal. RFC alleges that PMCI is an independent
contractor as the latter is a highly capitalized venture.
Was V a regular employee of RFC, thereby illegally
dismissed?
A: Yes. PMCI was a labor-only contractor. Although the
Neri doctrine stated that it was enough that a contractor

had substantial capital to show it was an independent

contractor, the case of Fuji Xerox clarified the doctrine
stating that an independent business must undertake the
performance of the contract according to its own manner
and method free from the control of the principal. In
this case, PMCI did not even have substantial
capitalization as only a small amount of its authorized
capital stock was actually paid-in. Furthermore, PMCI
did not carry on an independent business or undertake
the performance of its contract according to its own
manner and method nor was it engaged to perform a
specific and special job or service. In labor-only
contracting, the employees supplied by the contractor
perform activities, which are directly related to the main
business of its principal. It is clear that in this case, the
work of petitioner as sales representative was directly
related to the business of RFC. Due to Vs length of
service, he had attained the status of regular employee
and thus cannot be terminated without just or valid
cause. RFC failed to prove that his dismissal was for
cause and that he was afforded procedural due
process. V is thus entitled to reinstatement plus full
backwages from his dismissal up to actual
reinstatement. (Vinoya v. NLRC, G.R. No. 126596,
February 2, 2000)
Q: B is a lady Security Guard of Company O. She was
last assigned at Vicente Madrigal Condominium II
located in Ayala Avenue, Makati. In a memorandum, the
Building Administrator of VM Condomunium II
complained of the laxity of the guards in enforcing
security measures and requested to reorganize the men
and women assigned to the building to induce more
discipline and proper decorum. B was then transferred
another building in Taytay, Rizal. B filed a complaint
alleging that her transfer amounted to an unjust
dismissal. Was the transfer of B illegal?
A: No. Service-oriented enterprises adhere to the
business adage that, the customer is always right. In
the employment of personnel, the employer has
management prerogatives subject only to limitations
imposed by law. The transfer of an employee would only
amount to constructive dismissal when such is
unreasonable, inconvenient, or prejudicial to the
employee, and when it involves a demotion in rank or
diminution of salaries, benefits and other privileges. In
this case, the transfer was done in good faith and in the
best interest of the business enterprise. Evidence does
not show that Company O discriminated against B in
effecting her transfer as such was done to comply with a
reasonable request. The mere inconvenience of a new
job assignment does not by itself make the transfer
illegal. (OSS Security and Allied Services, Inc. v.
NLRC, G.R. No. 112752, February 9, 2000)
Q: Company W is conducts a printing business in Sta.
Cruz Makati. The Company informed its workers that it
was going to transfer its site in Makati to Batangas. It
gave its employees time to inform the management of
their willingness to go with petitioner, otherwise, they
would find replacements. The Union advised the

company that its members were not willing to transfer to

the new site. Are the employees entitled to separation
pay by virtue of their refusal to transfer to the business in
Batangas.
A: Yes. Although there is no complete dissolution of
petitioners undertaking, but a mere relocation; the
phrase, closure or cessation of operation of an
establishment not due to serious business losses or
reverses, under Article 283 of the Labor Code includes
the cessation of only part of a companys business.
Company W had alegitimate reason to relocate its plant
due to the expiration of the lease contract in Makati;
however, it is still required to pay its workers separation
pay. Cessation of operation not due to serious business
losses is an authorized cause for termination; and the
Labor Code provides that such terminated employees
are entitled to separation pay of 1 month pay or at least
month for every year of service, whichever is
higher. (Cheniver Deco Print Technics Corporation v.
NLRC, G.R. No. 122876, February 17, 2000)
Q: Meralco and its union MEWA renegotiated its 19921997 CBA insofar as the last two-year period was
concerned. The Secretary of Labor assumed jurisdiction
and granted the arbitral awards. There was no question
that these arbitral awards were to be given retroactive
effect. However, the parties dispute the reckoning
period when retroaction shall commence. Meralco
claims that the award should retroact only from such
time that the Secretary of Labor rendered the award.
The union argues that the awards should retroact to
such time granted by the Secretary who has plenary and
discretionary power to determine the effectivity of the
arbitral award. The union cited the case of St. Lukes
and Mindanao Terminal where the Secretary ordered the
retroaction of the CBA to the date of expiration of the
previous CBA. When should the arbitral award retroact?
A: Labor laws are silent as to when an arbitral award in a
labor dispute where the Secretary has assumed
jurisdiction by virtue of Art. 263 (g) shall retroact.
Despite the silence of the law, the Court ruled that the
CBA arbitral awards granted after six months from the
expiration of the last CBA shall retroact to such time
agreed upon by both the employer and the employees or
their union. Absent such agreement as to retroactivity,
the award shall retroact to the first day after the sixmonth period following the expiration of the last day of
the CBA should there be one. In the absence of a CBA,
the Secretarys determination of the date of effectivity as
part of his discretionary powers over arbitral awards
shall control. (Manila Electric Company v. Secretary of
Labor, G.R. No. 127598, February 22, 2000)
Q: A, B and C were drivers of Company Q driving the
latters taxicabs every other day on a 24 hour work
schedule under the boundary system where petitioners
earn an average of P400 daily and private respondent
regularly deducts an amount for the washing of the taxi
units. A, B and C decided to form a labor union. Later,
Company Q refused to let petitioners drive their

taxicabs. A, B and C filed with the labor arbiter a

complaint for ULP, illegal dismissal, and illegal
deductions. The NLRC found for A, B and C stating that
dismissal must be for just cause and after due process.
Company Q's first motion for reconsideration was
denied. It filed another MR, which was then granted.
Should the NLRC have granted the second MR?
A: No. Company Q exhausted administrative remedies
available to it by seeking an MR. The rationale for
allowing only one MR from the same party is to assist
the parties in obtaining an expeditious and inexpensive
settlement of labor cases. The NLRC should have
recognized that the relationship between jeepneyowners and jeepney drivers under the boundary system
is that of ee-er and not that of lessor-lessee. The fact
that the drivers do not receive fixed wages is not
sufficient to withdraw the relationship f3om that of er and
ee. Therefore the termination of A, B and Cs
employment should have be effectuated in accordance
with law. With regard to the amount deducted for
washing, such was not illegal as such is indeed a
practice in the taxi industry and is dictated by fair
play. (Jardin v. NLRC, G.R. No. 119268, February 23,
2000)
Q: Union M is an affiliate of Federation U. A bitter
disagreement ensued between the Federation U and the
Union M culminating in the latters declaration of general
autonomy from the former. The federation asked the
company to stop the remittance of Union Ms share in
the education funds. The federation called a meeting
placing Union M under trusteeship and appointing an
administrator. Officers of Union M received letters from
the administrator requiring them to explain why they
should not be removed from their office and expelled
from union membership. The officers were expelled
from the federation. The federation then advised the
company of the expulsion of the 30 union officers and
demanded their separation pursuant to the Union
Security Clause in the CBA. The Federation filed a
notice of strike with the NCMB to compel the company to
effect the immediate termination of the expelled union
officers. Under the pressure of a strike, the company
terminated the 30 union officers from employment.
Union M filed a notice of strike on the grounds of
discrimination; interference; mass dismissal of union
officers and shop stewards; threats, coercion and
intimidation; and union busting. Members of Union M
prayed for the suspension of the effects of their
termination. Secretary Drilon dismissed the petition
stating it was a intra-uion matter. Later, 78 union shop
stewards were placed under preventive suspension.
The union members staged a walk-out and officially
declared a strike that afternoon. The strike was
attended by violence. Was the dismissal of the union
officers illegal?
A: Yes. The charges against respondent company
proceeded mainly from the termination of the union
officers upon the demand of the federation pursuant to
the union security clause. Although the union security

clause may be validly enforced, such must comply with

due process. In this case, the union officers were
expelled for allegedly committing acts of disloyalty to the
federation. The company did not inquire into the cause
of the expulsion and merely relied upon the federations
allegations. The issue is not a purely intra-union matter
as it was later on converted into a termination dispute
when the company dismissed the petitioners from work
without the benefit of a separate notice and hearing. As
to the act of disaffiliation by the local union; it is settled
that a local union has the right to disaffiliate from its
mother union in the absence of specific provisions in the
federations constitution prohibiting such. There was no
such provision in federation ULGWPs constitution.

Development Corporation v. NLRC, G.R. No.129761,

February 28, 2000)
Q: A was a jeepney driver of X on the boundary system.
Due to a change in schedule, they did not report for work
as protest. They were then replaced. A filed a complaint
for illegal dismissal asking for separation pay and other
benefits. On November 26, 1991, the labor arbiter
rendered judgment in favor of A. X was served a copy of
the decision on April 3, 1992. X filed a memorandum on
appeal on April 13, 1992; however the appeal bond was
only filed on April 30, 1992. Also, such bond was found
to be spurious. It was only on July 20, 1993 that a
substitute bond was issued by another company. Did
the NLRC have jurisdiction to hear the appeal?

Q: In the above case, was the strike illegal?

A: No. As to the legality of the strike; it was based on
the termination dispute and petitioners believed in good
faith that in dismissing them, the company was guilty of
ULP. The no-strike, no lockout provision in the CBA can
only be invoked when the strike is economic. As to the
violence, both parties agreed that the violence was not
attributed to the striking employees alone as the
company itself hired men to pacify the strikers. Such
violence cannot be a ground for declaring the strike
illegal. (Malayang Samahan ng mga Manggagawa sa
M. Greenfield (MSMG0UWP) v. Ramos, G.R. No.
113907, February 28, 2000)
Q: The LA ordered petitioner to pay respondents the
sum of P655, 866.41. Petitioner appealed to the NLRC
with a motion for the reduction of the supersedeas to
P100,000 and thereafter posted a cash bond of
P100,000. The NLRC dismissed the appeal for
insufficiency of the bond. Petitioner said the Star Angel
doctrine should apply where the appeal may be
perfected after that period upon posting of a cash or
surety bond. However, the NLRC disagreed stating that
in this case, the petitioner did not file a motion for
reduction of bond within the period but instead posted a
bond in an amount not equivalent to the monetary
award. Was the motion for the reduction of the bond filed
in time?

1.
2.
3.
4.

A: Yes. That petitioner did file a motion within the period

is supported by the following:
The motion for reduction was stamped with the
received rubber stamp marker of the NLRC and
indicated the date of filing as 6.7.96.
Both the motion and the appeal memorandum were sent
to respondents in one envelope and sent by registered
mail under Reg. Receipt 3576.
The same person notarized both the motion and the
appeal on the same date.
On the last page of their comments, respondents stated
that the motion for reduction should be founded on
meritorious grounds. This was found by the SC to be
an implied admittance of the receipt of the motion.
Besides, respondents could just as well have stated in
their comments that no motion was filed. (Coral Point

A: No. The perfection of an appeal within the

reglementary period and in the manner prescribed by
law is jurisdictional, and noncompliance with such legal
requirement is fatal and has the effect of rendering the
judgment final and executory. Perfection of an appeal
includes the filing, within the prescribed period of the
memorandum of appeal and posting of the appeal bond.
In cases where the judgment involves a monetary
award, as in this case, the appeal may be perfected only
upon posting of a cash or surety bond to the NLRC.
Since the X received the LAs decision on April 3, they
had only until April 13 to file their appeal. The bond was
posted only on April 30; beyond the reglementary
period. The requirement of posting the bond has only
been relaxed on grounds of substantial justice and
special circumstances which are not attendant in this
case. Furthermore, the bond posted was not genuine.
The decision can no longer be amended nor altered by
the labor tribunal. (Navarro v. NLRC, G.R. No. 116464,
March 1, 2000)
Q: A, is a member of the NFL, employed by X in the
Patalon Coconut Estate in Zamboanga City. Pursuant to
RA 6657, the Comprehensive Agrarian Reform Law, the
Patalon Cocount Estate was warded to the Patalon
Estate Reform Association, of which A is a member and
co-owner. As a result of this acquisition, the Patalon
Estate shut down operations and the employment of A
was severed. A did not receive separation pay. A
became co-owner of the land and subsequently filed a
complaint for illegal dismissal. Should X, who had been
compelled to cease operations because of compulsory
acquisition by the government of his land for purposes of
agrarian reform, be made liable to pay separation pay to
A?
A: No. The peculiar circumstance in the case at bar
involves neither the closure of an establishment nor
a reduction in personnel as contemplated in Article
283. The closure contemplated in 283 is a voluntary
act on the part of the employer. The Labor Code
does not contemplate a situation where the closure
is forced upon the employer. As such, petitioners
are not entitled to separation pay as private
respondents did not voluntary shut down operations
as they even sought to be exempted from the

coverage of RA 6657. (National Federation of Labor

v. NLRC, G.R. No. 127718, March 2, 2000)
Q: A and B were employed by Company E. A applied for
a leave of absence and informed the Operations
Manager of his intention to avail of the optional
retirement plan under the Consecutive Enlistment
Incentive Plan (CEIP). Such was denied. B also applied
for a leave of absence and informed the Operations
Manger of his intention to avail of the optional early
retirement plan in view of his 20 years of service which
was likewise denied. A and B both requested for
extension of their leaves of absence. Later, they
discovered that they had been dropped from the roster
of crew members. Company E asserts that A and B are
contractual employees whose employment are
terminated every time their contracts expire. Were A and
B validly dismissed?
A: No. The primary standard to determine a regular
employment is the reasonable connection between the
activity performed by the employee in relation to the
usual business or trade of the employer. In this case it is
undisputed that petitioners were regular employees of
private respondents. Also, as they had been in the
employ of private respondents for 20 years as they were
repeatedly re-hired after the expiration of their respective
contracts, it is clear that their service was necessary and
indispensable to private respondents business.
Therefore, they could only be dismissed for just and
valid cause. There is no showing that they abandoned
their job as there was no showing of their unjustified
refusal to resume employment. (Millares v. NLRC, G.R.
No. 110524, March 14, 2000)
Q: X is a members of Union S. The Executive Board of
Union S decided to retain the services of their counsel in
connection with negotiations for a new CBA. A general
membership meeting was called where majority of union
members approved a resolution confirming the decision
to engage the services of the unions counsel, Atty.
Lacsina. The resolution provided that 10% of the total
economic benefits that may be secured be given to the
counsel at attorneys fees. Also it contained an
authorization for Solidbank Corporation to check-off said
attorneys fees from the first lump sum of payment of
benefits under the new CBA. X issued a complaint for
illegal deduction. May the union validly deduct attorneys
fees from Xs salary?
A: No. Article 241 has 3 requisites for the validity of the
special assessment for unions incidental expenses,
attorneys fees and representation expenses. They are:
1. authorization by a written resolution of majority of all the
members at the general membership meeting called for
the purpose
2. secretarys record of the minutes of the meeting
3. individual written authorization for check-off duly signed
by the employees concerned.
Such requirements were not complied with, as there
were no individual written check off authorizations;
thus, the employer cannot legally deduct thus the

assessment. The union should be made to shoulder

the expenses incurred for the services of a lawyer
and accordingly, reimbursement should be charged
to the unions general fund or account. No
deduction can be made from the salaries of the
concerned employees other than those mandated by
law. (Gabriel, et al v. Secretary of Labor, G.R. No.
115949, March 16, 2000)
Q: A and B were employed by PAL as load controller and
check-in clerk, respectively. On January 19, 1993, a
passenger by the name of Cominero checked in for the
flight. It appears that B reflected a lighter weight of
baggage on Comineros ticket to make it appear that the
same was within the allowable level. When the anomaly
was later discovered, B went to the cashier to pay the
excess baggage fee. Cominero further paid the sum
representing the excess baggage fee. B implicated A in
the anomaly. A and B were charged with fraud against
the company and were found guilty and meted with the
penalty of dismissal. The NLRC found that the alleged
defrauding of PALs excess baggage revenue was not
the handiwork of A and that PAL failed to show it suffered
loss in revenues as a consequence of private
respondents questioned act. Was A validly dismissed?
A: Yes. The core of PALs evidence against A included
the report of B. It was erroneous for the NLRC to have
discredited Bs testimony because he appeared guilty as
well. There is substantial evidence showing that private
respondent had direct involvement in the illegal pooling
of baggage. As act is inexcusable as it constitutes a
serious offense under petitioners Code of Discipline.
The fact that PAL failed to show it suffered losses in
revenue is immaterial as private respondents mere
attempt to deprive petitioner of its lawful remedy is
already tantamount to fraud. Therefore, A was validly
dismissed and as such was for a just cause, he is not
entitled to backwages nor separation pay. (PAL v.
NLRC, G.R. No. 126805, March 16, 2000)
Q: The NFL was the sole and exclusive bargaining
representative for the rank and file employees of
Company X. NFL started to negotiate for better terms
and conditions of employment; which were met with
resistance by Company X. The NFL filed a complaint for
ULP on the ground of refusal to bargain collectively. LA
issued an order declaring the company guilty of ULP and
ordering the CBA proposals submitted by the NFL as the
CBA between the parties. Later, Y claimed that he was
wrongfully excluded from the benefits under the CBA
filed a petition for relief. Company X asserts that Y is
not entitled to the benefits under the CBA because he
was hired after the term of a CBA and therefore, is not a
party to the agreement and may not claim benefits
thereunder. As for the CBA, Company X maintains that
the force and effect of the CBAs terms are limited to only
three years and cannot extend to terms and conditions
which ceased to have force and effect. Are the
assertions of Company X correct?

A: No. As to its first assertion, Y should be able to claim

benefits under the CBA. The benefits under the CBA
should be extended to those who only became such
after it expired, to exclude them would constitute undue
discrimination. In fact, when a CBA is entered into by
the union representing the employees and the employer,
even the non-union members are entitled to the benefits
of the contract. As to its assertion that the CBAs terms
are limited to only three years, it is clear from Art. 253
that until a new CBA has been executed by and between
the parties, they are duty bound to keep the status quo
and to continue in full force and effect the terms and
conditions of the existing agreement. In the case at bar,
no new agreement was entered between the parties
pending appeal of the decision in the NLRC.
Consequently, the employees would be deprived of a
substantial amount of monetary benefits if the terms and
conditions of the CBA were not to remain in force and
effect which runs counter to the intent of the Labor Code
to curb labor unrest and promote industrial peace. (New
Pacific Timber Supply Co. v. NLRC, G.R. No. 124224,
March 17, 2000)
Q: A was employed as a data encoder by private
respondent. From 1988 until 1991, she entered into 13
employment contracts with private respondent, each
contract for a period of 3 months. In September 1991, A
and 12 other employees allegedly agreed to the filing of
a PCE of the rank and file employees of private
respondent. Subsequently, A received a termination
letter due to low volume of work. A filed a complaint for
illegal dismissal. Was A a regular employee entitled to
tenurial security?
A: Yes. Even though petitioner is a project employee,
as in the case of Maraguinot, Jr. v. NLRC, the court held
that a project employee or member of a work pool may
acquire the status of a regular employee when the
following concur:
1. there is continuous rehiring of project employees even
after the cessation of a project
2. the tasks performed by the alleged project employee
are vital, necessary and indispensable to the usual
business and trade of the employer.
A was employed as a data encoder performing duties,
which are usually necessary or desirable in the usual
business or trade of the employer, continuously for a
period of more than 3 years. Being a regular employee,
A is entitled to security of tenure and could only be
dismissed for a just and authorized cause; low volume of
work is not a valid cause for dismissal under Arts. 282 or
283. Having worked for more than 3 years, A is also
entitled to service incentive leave benefits from 1989
until her actual reinstatement since such is demandable
after one year of service, whether continuous or
broken. (Imbuido v. NLRC, G.R. No. 114734, March
31, 2000)
Q: A was employed as a security guard by Company X.
During a routinary meeting of the security guards, A
stood up and shouted at the presiding officer. She was
then suspended for 15 days. Later, she received a letter

that she was reassigned and required to report to

respondents Manila office.
Her services were
terminated for abandonment when she failed to report
for work in her new assignment. The Labor Arbiter found
for petitioner. Private respondent appealed to the NLRC,
which denied the appeal. The decision having become
final, the LA issued a writ of execution on the
reinstatement aspect, but it was not implemented as the
monetary aspect remained to be determined. Later,
NLRC sheriff issued a notice of Garnishment served on
private respondents deposit account with the PNB. The
LA directed the PNB to release the amount. Meanwhile,
Company X filed with the LA a motion to quash the writ
of execution on the ground that there has been a change
in the situation of the parties which would make the
execution inequitable. It contended that A accepted
employment from another security agency without
previously resigning from respondents agency. Should
the Labor Arbiter still order the release of the judgment
award?
A: Yes. Execution is the final stage of litigation, the end
of the suit. It cannot be frustrated except for serious
reasons demanded by justice and equity. It is the
ministerial duty of the court to issue a writ of execution to
enforce the judgment. Company Xs contention that
there has been a change in the situation of the parties is
without merit. It has been held that back wages
awarded to an illegally dismissed employee shall not be
diminished or reduced by the earnings by him elsewhere
during the period of his illegal dismissal. The decision is
final and the total amount representing the salary
differentials and back wages awarded to the petitioner
has been garnished from the account of respondent
agency with no opposition or resistance. Therefore, it is
the ministerial duty of the LA to release the money to
A. (Torres v. NLRC, G.R. No. 107014, April 12, 2000)
Q: On December 1986, De La Salle University and De
La Salle University Employees Association, which is
composed of regular non-academic rank and file
employees entered into a CBA. During the freedom
period of such CBA, the Union initiated negotiations,
which turned out to be unsuccessful. After several
conciliation meetings, 5 out of 11 issues were resolved
by the parties. A partial CBA was executed. The parties
then entered into a Submission Agreement identifying
the remaining issues for arbitration. In resolving the
issues, the VA included the computer operators from the
scope of the CBA and excluded the employees of the
College of St. Benilde. Did the VA act properly in ruling
as such?
A: Yes. Computer operators were presently doing
clerical and routinary work and had nothing to do with
the setting of management policies for the university.
The access they have to information to the Universitys
operations are not necessarily confidential.
The
express exclusion of the computer operators in the past
does not pose a bar to re-negotiation for future inclusion
of the said employees in the bargaining unit. Also, as to
the employees of the CSB, they were properly excluded

at the two education institutions have their own separate

juridical personality. (De la Salle University v. De La
Salle University Employees Association, G.R. No.
109002, April 12, 2000)
Q: A received a letter calling to his attention his conduct
during a Sales and Marketing Christmas gathering
where she allegedly made utterances of obscene,
insulting and offensive words towards the SPCs
Management Committee. A was given two days to
explain why no disciplinary action should be taken
against him and he was thereafter placed on preventive
suspension. A replied stating that such utterances were
only made in reference to a decision taken by the
management committee on the Cua Lim Case and not to
any specific person. A was thereafter informed in a letter
that his employment was terminated. Was A validly
dismissed?
A: No. As dismissal was brought about by utterances
made during an informal Christmas gathering. For
misconduct to warrant dismissal, it must be in
connection with the employees work. In this case, the
alleged misconduct was neither in connection with
employees work, as As utterances are not unusual in
informal gatherings, neither was it of such serious and
grave character. Furthermore, As outburst was in
reaction to the decision of the management in a certain
case and was not intended to malign on the person of
the respondent companys president and general
manager. The company itself did not seem to consider
the offense serious to warrant an immediate
investigation. It is also provided in the companys rules
and regulations that for conduct such as that of A, a first
offense would only warrant a verbal reminder and not
dismissal. (Samson v. NLRC, G.R. No.121035, April 12,
2000).
Q: X was employed by Company C as assistant
mechanic. X drove Company Cs truck to install a panel
sign and accidentally sideswiped a ten year old girl
whose injuries incurred hospitalization expenses of up to
P19,534.45. Such amount was not reimbursed by
insurance as X had no drivers license at the time of the
accident; therefore Company C shouldered the
expenses. Company C conducted an investigation
where X was given the opportunity to defend himself. X
was then dismissed for violating the company rules and
regulation for blatant disregard of established control
procedures resulting in company damages. Was X
validly dismissed?
A: Yes. Although X contends that he was investigated
simply for the offense of driving without a valid drivers
license, it was clear that he was fully aware that he was
being investigated for his involvement in the vehicular
accident. It was also known to him that the accident
caused the victim to suffer serious injuries leading to
expenses which the insurance refused to cover. Due
process does not necessarily require a hearing, as long
as one is given reasonable opportunity to be heard. Xs
actions clearly constituted willful disobedience. Although

generally, an employee who is dismissed for just cause

is not entitled to any financial assistance, due to equity
considerations as this was Xs first offense in 18 years of
service, he is to be granted separation pay by way of
financial assistance of months pay for every year of
service. (Aparente, Sr. v. NLRC, G.R. No. 117652,
April 27, 2000)
Q: Y was a company nurse for the Company Z. A
memorandum was issued by the personnel manager of
Company Z to Y asking her to explain why no action
should be taken against her for (1) throwing a stapler at
plant manager William Chua; (2) for losing the amount of
P1,488 entrusted to her, (3) for asking a co-employee to
punch in her time card one morning when she was not
there. She was then placed on preventive suspension.
Another memorandum was sent to her asking her to
explain why she failed to process the ATM applications
of her co-employees. She submitted a written
explanation as to the loss of the P1,488 and the
punching in of her time card. A third memorandum was
sent to her informing her of her termination from service
for gross and habitual neglect of duties, serious
misconduct, and fraud or willful breach of trust. Y claims
that her throwing of the stapler at plant manager William
Chua was because the latter had been making sexual
advances on her since her first year of employment and
that when she would not accede to his requests, he
threatened that he would cause her termination from
service. As to the other charges, she claimed that they
were not done with malice or bad faith. Was Y illegally
dismissed, and if so, is she entitled to recover
damages?
A: Yes. The grounds by which an employer may
validly terminate the services of an employee must
be strictly construed. To constitute serious
misconduct to justify dismissal, the acts must be
done in relation to the performance of her duties as
would show her to be unfit to continue working for
her employer. The acts complained of did not
pertain to her duties as a nurse neither did they
constitute serious misconduct. On the question of
damages, although Y allowed four years to pass
before coming out with her employers sexual
impositions; the time to do so admittedly varies
depending upon the needs, circumstances and
emotional threshold of each person. It is clear that Y
has suffered anxiety, sleepless nights, besmirched
reputation and social humiliation by reason of the
act complained of. Thus, she should be entitled to
moral and exemplary damages for the oppressive
manner with which petitioners effected her
dismissal and to serve as a warning to officers who
take advantage of their ascendancy over their
employees. (Philippine Aeolus Automotive United
Corporatoin v. NLRC, G.R. No. 124617, April 28,
2000)
Q: Isetann Dept Store dismissed B due to retrenchment.
However instead of giving the required 30 day notice,
the company gave 30 days pay arguing that this is

effective notice. They made B sign quitclaims so that

there would be no more claims from them. The Labor
Arbiter ruled that the B was illegally dismissed because
they were not afforded due process because they failed
to prove retrenchment due to losses. The NLRC
reversed the ruling saying that the dismissal was justified
because it was due to redundancy and not
retrenchment. The NLRC however did not rule on
whether the 30 day pay was a sufficient substitute for the
30 day notice. The petitioner argues further that they
should be given the chance to present his side. Was the
30 days pay sufficient replacement for 30 day notice?
A: No. The Court ruled that since the dismissal is due to
an authorized cause only notice is required and that the
employee has no right to present his side. The 30 day
notice is needed in order to afford the employee enough
time to look for work and to give the DOLE time to look
into the validity of the authorized cause. 30 days pay is
not enough to replace the notice requirement because it
would not serve the purpose of the notice. Additionally,
backwages are not a severe punishment because it is a
consequence of the employers failure to give notice
and due process and the employee is therefore not
deemed terminated so he should be compensated for
that period. (Serrano vs NLRC, GR No 117040, May 4,
2000)
Q: A and B filed a petition for certification election. Their
petition was granted but they lost in the election as
majority of the employees voted for no union. The next
day, they failed to report for work. They claim that they
were barred from entering the premises. They filed a
suit for illegal dismissal and backwages. The company
denied these allegations and alleged that A and B
refused to return to work despite their attention being
called. Were A and B legally dismissed?
A: No. The Court ruled that an immediate filing of a
complaint for illegal dismissal is incompatible with
abandonment. Abandonment is a matter of intention.
There must be proof of deliberate and unjustified intent
to sever the employer-employee relationship. This
burden rests on the employer. In this case, the employer
failed to do so. Since they were illegally dismissed, the
employees are entitled to reinstatement with full
backwages,
undiminished
by
their
earnings
elsewhere. (Villar v. NLRC, GR No 130935, May 11,
2000)
Q: A school employs both local-hire and foreign-hire
teachers. The foreign-hire teachers were given an added
25% in their salary and some benefits like transportation
and housing, shipping costs etc. These were given
based on two things: dislocation and limited tenure. The
added compensation was the schools way of remaining
competitive on an international level in terms of
attracting competent teachers. The local-hire teachers,
part of the union contested the difference, a deadlock
resulted so the teachers went on strike. Is there
discrimination in terms of wages?

A: Yes, there is discrimination. The principle equal pay

for equal work should apply in this case. Persons who
work with substantially equal qualifications, skill, effort
and responsibility, under similar conditions, should be
paid similar salaries. If an employee is paid less it is
upon the employer to explain why the employee is
treated differently. Dislocation and limited tenure cannot
serve as adequate or valid bases for the difference in the
salary rates. The other benefits are enough to make up
for these two factors. There is no reasonable distinction
between the work of a local-hire and a foreign-hire that
will justify the difference. (International School Alliance
of Educators v. Quisumbing, GR No 128845, June 1,
2000)
Q: A company was found to have underpaid their
employees and did not pay the 13 thmonth pay on a
routine inspection conducted by DOLE. The regional
director ordered the company to pay the deficiency.
Subsequently, the NLRC affirmed the order. A waiver
was signed by 108 of the workers where they reduced
by half the amount that was due. DOLE approved the
waiver saying that it was not contrary to law, good
customs and public policy. Later, petitioner filed a
motion for reconsideration alleging undue influence,
coercion, intimidation, and no assistance of counsel. The
motion was denied. Eduardo Nietes, claiming that he
represented the workers, filed a position paper with the
same argument. The NLRC dismissed the case for
failure to acquire jurisdiction. He again filed an appeal
but the appeal was denied for being filed out of time.
The appeal was filed 9 days late along with the appeal
fee and research fee. Was the appeal was filed out of
time?
A: Yes, the appeal was filed out of time. The perfection
of an appeal within the reglamentary period and in the
manner prescribed by law is mandatory and
jurisdictional. Non-compliance renders the judgement
appealed final and executory. An appeal is perfected
when there is proof of payment of the appeal fee and in
cases of the employer appealing and there is a monetary
award, payment of the appeal bond. A mere notice of
appeal without complying with the other requisites shall
not stop the running of the period for perfecting an
appeal. Sometimes though, in the interest of justice, late
appeals have been allowed. An instance is a class suit.
In this case there is no evidence that there is a class
suit. There is no evidence that the workers chose Nietes
to represent them. There is no showing that the workers
are joined by a common interest. As there is no basis to
invalidate the waiver the workers signed, the waiver is
valid. (Workers of Antique Electric Cooperative v.
NLRC, GR No 120062, June 8, 2000)
Q: X was a radio operator on board a ship where he had
a contract for 12 months. He was required to submit
himself to a medical examination. Prior to this, he had a
pacemaker inserted to help his cardiovascular
functioning but he was still declared fit to work. On
board the vessel, he had bouts of coughing and he
needed open heart surgery. He filed for sickness and

disability benefits with the POEA and these were

awarded to him. Is the sickness compensable?
A: Yes, it is compensable. Compensability of the illness
or death of seamen need not depend on whether the
illness was work connected or not. It is sufficient that the
illness occurred during the term of the employment
contract. It will also be recalled that petitioners admitted
that private respondent's work as a radio officer exposed
him to different climates and unpredictable weather,
which could trigger a heart attack or heart failure. Even
assuming that the ailment of the worker was contracted
prior to his employment, this still would not deprive him
of compensation benefits. For what matters is that his
work had contributed, even in a small degree, to the
development of the disease and in bringing about his
eventual death. Neither is it necessary, in order to
recover compensation, that the employee must have
been in perfect health at the time he contracted the
disease. (Seagull ShipManagement and Transport
Inc. v. NLRC, GR No 123619, June 8, 2000)
Q: X is a merchandiser of respondent company. He
withdraws stocks from the warehouse, fixes the prices,
price-tagging, displaying the products and inventory. He
was paid by the company through an agent. He asked
for regularization of his status. The company denied any
employer-employee relationship. They claim that they
used an agent or independent contractors to sell the
merchandise. Was there labor-only contracting?
A: No. The agent is a legitimate independent contractor.
Labor-only contractor occurs only when the contractor
merely recruits, supplies or places workers to perform a
job for a principal. The labor-only contractor does not
have substantial capital or investment and the workers
recruited perform activities directly related to the
principal business of the employer. There is permissible
contracting only when the contractor carries an
independent business and undertakes the contract in his
own manner and method, free from the control of the
principal and the contractor has substantial capital or
investment. The agent, and not the company, also
exercises control over the petitioners. No documents
were submitted to prove that the company exercised
control over them. The agent hired the petitioners. The
agent also pays the petitioners, no evidence was
submitted showing that it was the company paying them
and not the agent. It was also the agent who terminated
their services. By petitioning for regularization, the
petitioners concede that they are not regular
employees. (Escario v. NLRC, GR No 124055, June 8,
2000)
Q: X was originally employed by R Corporation as a
muffler specialist, and was subsequently appointed
supervisor . He was instructed to report at private
respondents main office where he was informed by the
companys personnel manager that he would be
transferred to its Sucat plant due to his failure to meet
his sales quota, and for that reason, his supervisors
allowance would be withdrawn. For a short time, X

reported for work at the Sucat plant; however, he

protested his transfer, subsequently filing a complaint for
illegal termination. X decries his transfer as being
violative of his security of tenure, the clear implication
being that he was constructively dismissed. Was X
constructively dismissed?
A: No. We have held that an employer acts well within its
rights in transferring an employee as it sees fit provided
that there is no demotion in rank or diminution in pay.
The two circumstances are deemed badges of bad faith,
and thus constitutive of constructive dismissal. In this
regard, constructive dismissal is defined as an
involuntary resignation resorted to when continued
employment becomes impossible, unreasonable, or
unlikely; when there is a demotion in rank or diminution
in pay; or when a clear discrimination, insensibility or
disdain by an employer becomes unbearable to the
employee. It should be borne in mind, however, that the
right to demote an employee also falls within the
category of management prerogatives. An employer is
entitled to impose productivity standards for its workers,
and in fact, non-compliance may be visited with a
penalty even more severe than demotion. Failure to
observe prescribed standards of work, or to fulfill
reasonable work assignments due to inefficiency may
constitute just cause for dismissal. (Leonardo v. NLRC,
G.R. No. 125303, June 16, 2000)
Q: Y was employed as a mechanic. He was dismissed
after the company found out that he was doing sideline
work. It would appear that late in the evening of the day
in question, the driver of a red Corolla arrived at the
shop looking for Y. The driver said that, as prearranged,
he was to pick up Y who would perform a private service
on the vehicle. When reports of the "sideline" work
reached management, it confronted Y and asked for an
explanation. According to private respondent, Y gave
contradictory excuses, eventually claiming that the
unauthorized service was for an aunt. When pressed to
present his aunt, it was then that Y stopped reporting for
work, filing his complaint for illegal dismissal some ten
months after his alleged termination. Y was even
employed by another company thereafter. Was there
abandonment of work?
A: Yes. Y, after being pressed by the respondent
company to present the customer regarding his
unauthorized solicitation of sideline work from the latter
and whom he claims to be his aunt, he never reported
back to work anymore. It must be stressed that while Y
alleges that he was illegally dismissed from his
employment by the respondents, surprisingly, he never
stated any reason why the respondents would want to
ease him out from his job. Moreover, why did it take him
ten (10) long months to file his case if indeed he was
aggrieved by respondents. All the above facts clearly
point that the filing of his case is a mere afterthought on
the part of Y. (Leonardo v. NLRC, G.R. No. 125303,
June 16, 2000)

Q: X is an officer and member of the PGA Brotherhood

Association, a duly registered labor organization, and is
a security guard employed by PSVSIA. He was
informed that his services were being terminated. He
contended that prior to such dismissal, they were
harassed by PSVSIA officers to withdraw their
membership from the PGA Brotherhood Association.
Although PSVSIA denied the charge of illegal dismissal,
the Labor Arbiter declared PSVSIA and its responsible
officers guilty of ULP and declared that petitioners were
constructively dismissed, thereby ordering respondent to
reinstate X to his former position with backwages up to
the time of actual reinstatement. However, X was paid
monetary award for backwages pursuant to an earlier
decision of the NLRC limiting it to three years where he
assented to the computation made by the NLRC
reducing the backwages to three years. No M.R. was
filed. In fact, X even filed a motion to release the
remaining balance to satisfy the judgment awards. X
filed a motion for clarification of the resolution reiterating
their prayer for the inclusion of their backwages from
time they were terminated up to the present (until actual
or payroll reinstatement). How should the backwages
be computed?
A: The NLRC decision has become final and executory.
Neither a motion for reconsideration nor appeal was ever
taken by petitioners on this point. This procedural lapse
is fatal. Equally significant is the fact that petitioners
actively participated in the enforcement of the execution
by garnishing the supersedeas bond and the bank
deposits of PSVSIA. The NLRC prepared a computation
showing the back wages due petitioners for three (3)
years. X not only assented to the computation made
when they did not object thereto but even filed a motion
to release the remaining balance amounting
to P398,600.00 still in the hands of the NLRC to fully
satisfy the judgment awards. X cannot now claim that
they have remained unpaid, especially considering that
they have already received the judgment award. (PGA
Brotherhood Association, et al., v. NLRC, G.R. No.
131084, June 19, 2000).
Q: X was working as driver of passenger jeepneys. He
lost his drivers license and asked for permission to go
on vacation leave to secure a new one. X only returned
after three months when he was able to obtained his
license. He was however informed that another driver
had already taken his place. The company argues that
the prolonged absence of X constituted abandonment.
X filed a case for illegal dismissal. Did Xs absence
constitute abandonment?
A: No. To constitute abandonment, two elements must
concur: (1) the failure to report for work or absence
without valid or justifiable reason, and (2) a clear
intention to sever the employer-employee relationship.
Such is disputed by the fact that private respondent
immediately reported back for work and lost no time in
filing
a
case
for
illegal
dismissal
against
petitioners. (Icawat v. NLRC, GR 133572, June 20,
2000)

Q: X was employed as manager by a company for its

Healthcare Division. In April 1996, fictitious invoices
were sent to clients made to inflate the gross revenues
of the Healthcare Division; and Nokom was placed on
preventive suspension as initial findings showed her to
be involved in such anomaly. X admitted the
irregularities and made no explanation. She also failed to
appear during the hearing. After the investigation, Xs
employment was terminated. X was found to have been
dismissed for fraud or willful breach of the trust
reposed on her by her employer or duly authorized
representative. Was X legally dismissed?
A: Yes. In the case at bar, petitioners position demanded
a high degree of responsibility, including the unearthing
of fraudulent and irregular activities. Petitioner failed to
do such and her bare denials did not disprove her guilt.
The ordinary rule is that one who has knowledge
peculiarly within his control, and refuses to divulge it,
cannot complain if the court puts the most unfavorable
construction upon his silence, and infers that a
disclosure would have shown the fact to be as claimed
by the opposing party. Loss of confidence is one of the
just causes for a valid dismissal; and it is enough that
there be some basis for such loss of confidence. The
guidelines for the application of the doctrine of loss of
confidence as enunciated in Midas Touch Food
Corporation, are:
a.....loss of confidence should not be simulated;
b.....it should not be used as a subterfuge for causes
which are improper, illegal or unjustified;
c.....it may not be arbitrarily asserted in the face of
overwhelming evidence to the contrary; and
d.....it must be genuine, not a mere afterthought to justify
earlier action taken in bad faith.
An employer enjoys a wide latitude in the promulgation
of company rules; and in this case, the policies of
respondent were fair and reasonable. (Nokom v. NLRC,
G.R. No.140043, July 18, 2000)
Q: X, President of the exclusive bargaining agent
initiated renegotiations of its CBA with the company for
the last two years of the CBAs 5 year lifetime from 19891994. On the same year, the union elected a new set of
officers with Z as the newly elected President. Z wanted
to continue renegotiation, but the company claimed that
the CBA was already prepared for signing. The CBA
was submitted to a referendum which was rejected by
the union members. Later, the union notified the NCMB
of its intention to strike due to the companys refusal to
bargain. Thereafter, the parties agreed to disregard the
unsigned CBA and to start negotiation on a new fiveyear CBA. The union submitted its proposals to
petitioner, which notified the union that the same was
submitted to its Board of Trustees. Meanwhile, Zs work
schedule was changed, which she protested and
requested to be submitted to a grievance machinery
under the old CBA. Due to the companys inaction, the
union filed a notice of strike. Later, Z was dismissed for
alleged insubordination. Both parties again discussed
the ground rules for the CBA renegotiations; however the

company stopped negotiations after allegedly receiving

information that a new group of employees had filed a
Petition for Certification Elections. The union held a
stike and the Secretary assumed jurisdiction ordering all
striking workers to return to work. All were readmitted
except Z.
1. Is the company guilty of unfair labor practice by
refusing to bargain with the union when it unilaterally
suspended the ongoing negotiations for a new CBA
upon mere information that a petition for certification has
been filed by another legitimate labor organization?
2. Does the termination of the union president amount to
an interference of the employees right to selforganization?
A:
No. The duty to bargain collectively includes the mutual
obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating
an agreement. Petitioner failed to make a timely reply to
the unions proposals, thereby violating the proper
procedure in collective bargaining as provided in Article
250. In order to allow the employer to validly suspend
the bargaining process, there must be a valid PCE
raising a legitimate representation issue. In this case, the
petition was filed outside the 60-day freedom period;
therefore there was no legitimate representation issue
and the filing of the PCE did not constitute a bar to the
ongoing negotiation.
2. Yes. The dismissal was in violation of the employees
right to self-organization. The dismissal must be made
pursuant to the tenets of equity and fair play; wherein the
employers right to terminate the services of an
employee must be exercised in good faith; furthermore,
it must not amount to interfering with, restraining or
coercing employees in their right to self-organization.
The factual backdrop of the Ambas termination reveals
that such was done in order to strip the union of a leader.
Admittedly, management has the prerogative to
discipline its employees for insubordination. But when
the exercise of such management right tends to interfere
with the employees right to self-organization, it amounts
to union-busting and is therefore a prohibited
act. (Colegio de San Juan de Letran v. Association of
Employees and Faculty of Letran, G.R. 141471,
September 18, 2000)
1.

Q: X was employed as sewer by a corporation engaged

in the business of sewing costumes, gowns and casual
and formal dresses. Eventually, she started to feel chest
pains. She then filed a leave of absence from work as
the chest pains became unbearable. After subjecting
herself to medical examination, she was found to be
suffering from Atherosclerotic heart disease, Atrial
Fibrillation, Cardiac Arrhythmia. Upon recommendation
of her doctor, she resigned from her work hoping that
with a much-needed complete rest, she will be cured.
She later filed a disability claim with the SSS from the
Employees Compensation Fund, under Presidential
Decree No. 626, as amended. Was the sickness
compensable?

A: Yes, the illness is compensable. Under the Labor

Code, as amended, the law applicable to the case at bar,
in order for the employee to be entitled to sickness or
death benefits, the sickness or death resulting therefrom
must be or must have resulted from either (a) any illness
definitely accepted as an occupational disease listed by
the Commission, or (b) any illness caused by
employment, subject to proof that the risk of contracting
the same is increased by working conditions. In other
words, for a sickness and the resulting disability or
death to be compensable, the said sickness must be an
occupational disease listed under Annex A the
Amended Rules on Employees Compensation;
otherwise, the claimant or employee concerned must
prove that the risk of contracting the disease is
increased by the working condition.
Indisputably, cardiovascular diseases, which, as herein
above-stated include atherosclerotic heart disease, atrial
fibrillation, cardiac arrhythmia, are listed as compensable
occupational diseases in the Rules of the Employees
Compensation Commission, hence, no further proof of
casual relation between the disease and claimants work
is necessary. (Salmone v. Employees Compensation
Commission and Social Security System, G.R. No.
142392, September 26, 2000)
1999 CASES
Q. A flight surgeon at PAL, was on duty from 4 pm until
12 midnight. At around 7 pm, he left the clinic to have his
dinner at his residence, a 5-minute drive away. While he
was away, the clinic received an emergency call for a
PAL employee suffered from a heart attack. The nurse
on duty phoned the doctor at home to inform him of the
emergency, then rushed the patient to the hospital at
7:50 pm. The doctor arrived at 7:51 pm. The patient died
the following day. After investigation, the doctor was
charged with abandonment of post while on duty, and
was later suspended for 3 months. Was this suspension
legal?
A. The suspension was illegal. Article 83 of the Labor
Code (Normal hours of Work) provides that Health
personnel . . . shall hold regular office hours for eight (8)
hours a day, for five (5) days a week, exclusive of time
for meals, (See Art. 85 - Meal Periods; Sec. 7, Rule I,
Book III of the Omnibus Rules (Meals and Rest periods)
Thus, the 8-hour work period does not include the meal
break. Nowhere in the law may it be inferred that
employees must take their meals within the company
premises, as long as they return to their posts on time.
Private respondents act of going home to take his
dinner does not constitute abandonment. (Philippine
Airlines, Inc. v. NLRC, 302 SCRA 582 (1999))
Q. A jet printer operator employed at Selecta was
dismissed from employment for dishonesty and theft of
company property. Considering that the employee
merely took 15 hamburger patties, a pair of boots and an
aluminum container, was dismissal the appropriate
remedy?

A. No. While the SC agrees that the employer should not

be required to continuously employ someone who has
betrayed its trust and confidence, dismissal would not be
proportionate to the gravity of the offense. Further, he is
a non-confidential employee. Dismissal as a measure to
protect the interests of Respondent Company is
unwarranted under the facts of this case. Suspension
would have sufficed. (Associated Labor Unions-TUCP
v. NLRC, 302 SCRA 708 (1999))
Q. A deliveryman of Petitioner Company filed a
complaint for illegal dismissal and non-payment of basic
wages and certain monetary benefits. He was suspected
of selling fruits of his employer at a higher price, and
pocketing the difference. The LA found in favor of the
employee and ordered petitioner Company to reinstate
him with back wages, salary differentials, 13 th month pay
and service incentive pay. The NLRC reversed the
decision and ruled that private respondent was not
entitled to reinstatement with back wages except for the
award of salary differentials due to underpayment.
A. The SC agrees with the LA and held that private
respondent was indeed illegally dismissed. It was only
upon his complaint regarding his low salary that he was
no longer allowed to report for work. This amounted to
dismissal without cause and without the requisite written
notice. Such circumstances make it difficult to sustain
any allegation of abandonment. Abandonment, as a just
and valid cause for termination, requires a deliberate
and unjustified refusal of an employee to resume his
work, coupled with a clear absence of any intention of
returning to his or her work.
With regard to the salary differentials granted, petitioners
claim exemption under RA 6727 (Wage Rationalization
Act) and the Rules Implementing Wage Order Nos.
NCR-01 and NCR-01-A, as well as Wage Order Nos.
NCR-02 and NCR-02-A. However, regardless of the
factual circumstances in this case, the SC was not
convinced as the petitioners could not even show any
approved application for exemption, as required by the
applicable guidelines issued by the Commission. (C.
Planas Commercial v. NLRC, 303 SCRA 49 (1999))
Q. Is due process served even when the decision of the
Labor arbiter is based solely on position papers?
A. Petitioner likewise contends that it was not granted its
right to due process, as the decision of the LA was
based purely on position papers. The standard of due
process that must be met in administrative tribunals
allows a certain degree of latitude as long as fairness is
not ignored. [Adamson & Adamson, Inc. v. Amores, 152
SCRA 237, 250 (1987)] Hence it is not legally
objectionable, for being violative of due process, for the
LA to resolve a case based solely on position papers,
affidavits or documentary evidence submitted by the
parties. (CMP Federal Security Agency, Inc. v. NLRC,
303 SCRA 99 (1999))

Q. While petitioner was assigned to sort out rejects in a

private respondents bakery, he went to the comfort room
to answer the call of nature, with the permission of his
checker. However, when the owner saw that petitioner
was not at his station, he demanded from him a written
explanation for abandoning his work. Having verbally
explained that he had to answer the call of nature,
petitioner no longer submitted a written explanation,
believing that his verbal denial would suffice. However,
he was suspended for 15 days. On another occasion,
petitioner had to answer the call of nature. This time, he
requested his fellow worker to replace him while he was
away. The owner, however, once again noticed that he
was gone and demanded a written explanation for his
absence. Knowing better, petitioner complied with the
demand. Finding petitioners explanation unsatisfactory,
the Company served petitioner a notice of termination.
A. Petitioners act of relieving himself can hardly be
characterized as abandonment, much less a willful or
intentional disobedience of company rules since bowel
movements are hardly controllable. Aside from the
discomfort it causes, restraining ones bowel movements
adversely affects the efficiency and health of the worker.
Neither could it have disrupted the operations of the
company as to cause it irreparable damage. As such,
answering the call of nature is a valid reason to leave the
work area. (Dimabayao v. NLRC, 303 SCRA 655
(1999))
Q. A room attendant of the Sheraton, operated by
petitioner, was dismissed for having been caught by a
hotel guest with his left hand inside the guests suitcase.
After being charged and terminated based on the
company rules regarding qualified theft, he filed a
complaint for illegal dismissal. He reasons that he was
merely placing the belongings of the hotel guest into the
latters suitcase, as they were scattered on the floor.
Was the dismissal illegal?
A. Yes. Petitioner reasons that the employee was caught
in flagrante delicto, and is therefore a cause for
dismissal. However, absent any evidence that would
substantiate such imputation against the employee,
suspicions and baseless conclusions by employers are
not legal justification for dismissing employees. The
burden of proof to show the validity of the dismissal lies
on the employer. Notably, it was shown that the hotel
guest lost nothing. (Maranaw Hotels and Resort
Corporation v. NLRC, 303 SCRA 541 (1999))
Q. Petitioner was a checker in the warehouse of
respondent Company who met an accident while in the
course of performing his job. His hand was pinned down
by a crane which resulted in its deformity and total
disability of his middle finger. He was given a month of
sick leave which he extended for another month. Later,
he discovered that the Company had terminated his
services. He then filed a complaint for illegal dismissal.
The LA found that there was an illegal dismissal. In its
appeal to the NLRC, the Company alleged that the real

reason why petitioner was dismissed was due to several

gambling incidents in the work area. This explanation
was accepted by the NRLC, which omitted reinstatement
and backwages from the award of the LA. Petitioner
points out that the issue of gambling was raised only by
the respondents upon appeal. Not having been alleged
in the Position Papers of the respondents at the earliest
instance, should the NLRC have considered the
Companys gambling allegations?
A. The Company was allowed to submit Annex 2 which
contained the gambling allegations with the LA, there
was no showing whether the NLRC gave the petitioner a
clear chance to rebut the contention. Considering the
lateness of its submission, and the critical fact it alleged,
this was the least that should have been done by the
NLRC. Therefore, petition granted. NLRC committed
grave abuse of discretion. LAs decision reinstated.
(Villa v. NLRC, 303 SCRA 481 (1999))
Q. Supervisory employees of SMC were retired prior to
reaching the compulsory age of 60 pursuant to a CBA
reducing optional retirement to fifteen years. They claim
that their signatures in conformity with their retirement
from the service were secured through threats, and that
the employees had no choice but no accept the benefits.
Were the employees validly retired? Did their
acceptance of benefits amount to estoppel?
A. No the employees were not validly retired. The mere
absence of actual physical force to compel them to ink
their application for retirement did not make it voluntary.
They were confronted with the danger of being jobless.
Their acceptance of benefits did not likewise amount to
estoppel. If the intention to retire is not clearly
established or if the retirement is involuntary, such is to
be treated as a discharge. In any case, the CBA is not
applicable to them as it expressly excluded supervisory
positions which petitioners occupy. (San Miguel
Corporation v. NLRC; July 23, 1999)
Q. San Miguel Corporation shut down some of its plants
and declared 55 positions as redundant, in order to
streamline operations due to financial losses.
Consequently, the union filed several grievance cases
for the said retrenched employees, and sought the
redeployment of said employees to other divisions of the
company. Grievance proceedings were conducted
pursuant to the parties' Collective Bargaining Agreement.
The procedure outlined in the CBA required the
settlement of grievances on 3 levels - department
manager, plant manager, and a conciliation board.
During the proceedings, many employees were
redeployed, some accepted early retirement. San Miguel
informed the union that the remaining employees would
be terminated, if they could not be redeployed.
Subsequently, the union filed a notice of strike with the
NCMB of the DOLE due to a bargaining deadlock and
gross violation of the CBA such as non-compliance with
the grievance procedure. On the other hand, San
Miguel filed a complaint with the NLRC to dismiss the

notice of strike. Can the union hold a strike on the

grounds relied upon?
A. The grounds relied upon by the union are nonstrikeable. A strike or lockout may only be declared in
cases of bargaining deadlocks and ULP. Violations of the
CBA, except flagrant/malicious refusal to comply with
economic provisions shall not be strikeable. (Sec. 1,
Rule XXII, LC IRR) A collective bargaining deadlock is
the situation between the labor and management of the
company where there is failure in the collective
bargaining negotiations resulting in a stalemate. This
situation is nonexistent in the present case since there is
a conciliation board assigned in Step 3 of the grievance
machinery to resole the conflicting views of the parties.
For failing to exhaust all the steps in the grievance
machinery and arbitration proceedings provided in the
CBA, the notice of strike should have been dismissed by
the NLRC and the union ordered to proceed with the
grievance and arbitration proceedings. Moreover, in
abandoning the grievance proceedings and refusing to
avail of the remedies under the CBA, the union violated
the mandatory provisions of the CBA. Parenthetically, it
is worthy to note that abolition of departments or
positions in the company is one of the recognized
management prerogatives. (San Miguel Corporation v.
NLRC, 304 SCRA 1 (2 March 1999))
Q. Due to alleged ULP, several employees walked out
from their jobs. The company purportedly sent them
notices urging them to return to work, otherwise their
services would be terminated. The employees denied
having received these notices, and claimed that they
were merely informed of their dismissal and prevented
from returning to work (removal of their machines by the
company). Was there a valid case of abandonment, as a
ground for dismissal?
A. Abandonment, as a just and valid ground for
dismissal, means the deliberate and unjustified refusal of
an employee to resume his employment. The burden of
proof is on the employer to show an unequivocal intent
on the part of the employee to discontinue employment.
Two elements must be proved: the intention of an
employee to abandon and an overt act from which it may
be inferred that the employee has no more intent to
resume his work. It is unlikely that the employees
abandoned their jobs, considering the length of their
service (10-17 years). In fact, no overt act was proven by
the company from which the intention of the employees
to desist from employment may be shown. Moreover, the
abandonment of work does not per se sever the
employer-employee relationship. IT is merely a form of
neglect of duty, which is in turn a just cause for
termination of employment. The operative act that will
ultimately put an end to the relationship is the dismissal
of the employee, after complying with the procedure
prescribed by law. If the employer does not follow the
procedure, there is illegal dismissal. (De Paul/King
Philip Customs Tailor v. NLRC, 304 SCRA 448, 10
March 1999)

Q: S was employed under an employment contract that

will be effective for a period of 1 year, unless sooner
terminated. The first period was for six months
terminable at the option of the employer. The second
period was also for six months but probationary in
character. After working for six months, S was made to
sign a 3-month probationary employment and later
extended by another 3-month period. After a total
employment of one year, S was dismissed on grounds of
termination of contract employment. S filed a complaint
for illegal dismissal. Was S validly dismissed?
A: Yes. In both periods, the company did not specify the
criteria for the termination or retention of the services of
S. If the contract was really for a fixed term, the
employer should not have been given the discretion to
dismiss S during the one year period of employment for
reasons other than the just and authorized causes under
the Labor Code. In effect, the employer theorized that
the one-year period of employment was probationary. It
was not brought to light that S was informed at the start
of his employment of the reasonable standards under
which he would qualify as a regular employee. In the
case of Brent, the Court upheld the principle that when
the period was imposed to preclude the acquisition of
tenurial security, they should be disregarded for being
contrary to public opinion. It was clear that S was hired
as a regular employee and his work was necessary and
directly related to the business of the company. S is
considered as a regular employee of the company. At
any rate, even assuming that the original employment
was probationary, the fact that he was allowed to work
beyond the six-month probationary period converts him
to a regular employee under Article 281 of the Labor
Code. S was reinstated with backwages from the time of
dismissal to payroll reinstatement. (Servidad v. National
Labor Relations Commission, 305 SCRA 49, 18
March 1999)
Q: D learned from B that the latter needed factory
workers in Taiwan, but B told D that as a part of his job
application, he should give a certain amount. D gave B
the money but was unable to go to Taiwan. Several other
persons paid B the required placement fee but were also
unable to work abroad. The victims filed cases of illegal
recruitment in large scale (3 or more persons) and
estafa. Was B guilty of illegal recruitment and estafa?
A: Yes. Illegal recruitment is committed when the (1)
offender has no valid license or authority; and (2) he
undertakes any activity within the meaning of
recruitment and placement under the Labor Code. It is
the lack of necessary license or authority that renders
the recruitment activity unlawful or criminal. There is
illegal recruitment when one purports to have the ability
to send a worker abroad through without license and
authority to do so. (People v. Borromeo, 305 SCRA
180, 25 March 1999)
Q: At the time AIUP filed a petition for certification
election, there was an existing CBA between the

company and CCEA, the incumbent bargaining agent for

all the rank and file employees. This petition was
opposed by CCEA on the ground of the contract bar rule.
AIUP filed a notice of strike citing union busting and
unfair labor practice as grounds. The union proceeded to
stage a strike, in the course of which, illegal acts were
perpetrated. When AIUP ignored the TRO enjoining the
union members to refrain from blocking the road, the
company dismissed several employees on the ground of
illegal strike and illegal acts perpetrated in connection
with the strike. AIUP is questioning the legality of the
dismissal of several AIUP member employees. Was the
strike illegal? Was the dismissal of the AIUP member
employees valid?
A: The Court was not persuaded by the allegation of
union busting. The strike staged by AIUP was a unionrecognition-strike. The petition for certification election
(PCE) should not have been entertained because of the
contract bar rule. A PCE may only be entertained 60
days before the expiration of a CBA (freedom period).
The strike staged by AIUP was illegal as they
formed human barricades to block roads and prevented
co-workers from entering company premises. Even if the
strike is valid because its object or purpose is lawful, the
strike may still be declared as invalid where the means
employed are illegal. Union officers who knowingly
participate in the commission of illegal acts in a strike
may be declared to have lost his employment status but
an ordinary striking employee cannot be terminated for
mere participation in an illegal strike. However, there
must be proof that he committed illegal acts during the
strike. For the severest penalty to dismissal to attach,
the erring strikers must be duly identified. Simply
referring to them as strikers is not enough to justify
their dismissal. The petitioning members of AIUP are
ordered reinstated with full backwages. (Association of
Independent Unions in the Philippines v. NLRC, 305
SCRA 219, 25 March 1999)
Q: The original owners of AAC were driven by mounting
financial loses to sell the majority rights of the company
to PH. To thwart further losses, PH implemented a reorganizational plan. Workers occupying redundant
positions that were abolished were terminated. PH duly
paid their separation pay and other benefits. Six of the
union members who were terminated filed a case for
illegal termination alleging that the retrenchment
program was a subterfuge for union busting. They
claimed that they were singled out for their active
participation in union activities. They also asserted that
AAC was not bankrupt, as it has engaged in an
aggressive scheme of contractual hiring. Were the
union members validly dismissed?
A: Yes. The condition of business losses is normally
shown by audited financial documents. It is the Courts
ruling that financial statements must be prepared and
signed by independent auditors. In the instant case, the
employees never contested the veracity of the audited
financial documents presented by AAC to the Labor
Arbiter, neither did they object to the documents

admissibility. It is only necessary that the employees

show that its losses increased through a period of time
and that the condition of the company is not likely to
improve in the near future. The allegation of union
busting is also bereft of proof. The records show that the
position on 51 other non-union members were abolished
due to business loses.
The Court generally holds quitclaims to be
contrary to public policy. Yet as in the instant case, as
there is no showing that the quitclaims were executed in
duress, they are binding on the parties. (Asian Alcohol
Corporation v. NLRC, 305 SCRA 416, 25 March 1999)
Q: PICOP grants certain allowances to its employees
depending on the circumstances and need for such. The
allowances in question pertains to the following:
1. Staff/Managers Allowance: Free housing facilities to
supervisory and managerial employees assigned in
Bislig. Due to shortage of housing facilities, the company
was constrained to grant allowances to those who live or
rent houses near the vicinity of the mill site.
2. Transportation Allowance: granted to Managers
assigned to the mill site who use their own vehicles in
the performance of their duties.
3. Bislig Allowance: given in consideration of being
assigned to the hostile environment then prevailing in
Bislig.
The Executive Labor Arbiter opined that the
subject allowances formed part of the employees
wages. Citing jurisprudence, he concluded that the
allowances should be included in the computation of the
employees base pay in determining the separation pay.
The NLRC did not share the view of the Labor Arbiter. It
found that the allowances were contingency-based and
thus not included I their salaries. Did the subject
allowances form part of the petitioners wage?
A: No. Wage, as defined by the Labor Code, may
include any determination by the Secretary of Labor in
appropriate instances the fair and reasonable value of
board, lodging and other facilities customarily furnished
by an employer to his employees. The Court agrees
with the OSG that the subject allowances were
temporary and not regularly received by the petitioners.
The allowance given to the employees in the instant
case do not represent such fair and reasonable value
because the allowance were given by the company in
lieu of actual housing and transportation needs whereas
the Bislig allowance was given in consideration of being
assigned to the hostile environment then prevailing in
Bislig; petitioners continuous enjoyment of the disputed
allowances was based on contingencies the occurrence
of which terminated such enjoyment. (Millares v.
National Labor Relations Commission, 305 SCRA
500, 29 March 1999)
Q: A was employed by IBM for 16 years as an Engineer.
He was informed, through a letter, that his employment
with the company was to be terminated on the grounds
of habitual tardiness and absenteeism. Alleging that his
dismissal was without just cause and due process, he
filed a compliant with the DOLE. He also claimed that he

was not given the opportunity to be heard and hat he

was summarily dismissed from employment based on
charges which has not been duly proven. IBM denied As
claims. It was alleged that A was told of his poor
attendance record and inefficiency through the
companys internal electronic mail system. Attached to
IBMs position paper were copies of printouts of alleged
computer entries/messages sent by the company to A
through the internal email system. Was A validly
dismissed?
A: No. It appears, however, that As Daily Time Record
(DTR) and pay slips showed that he did not incur any
unexcused absences, he was not late on any day and,
that no deduction was made from his salary on account
of tardiness or absences. The computer print outs, which
constitutes the only evidence of IBM, afford no
assurance of their authenticity because they are
unsigned It is true that administrative agencies are not
bound by the technical rules of procedure and evidence
in the adjudication of cases. However, the liberality of
procedure is subject to limitations imposed by basic
requirements of due process. The evidence presented
before the NLRC must at least have a modicum of
admissibility for it to be given some probative value. The
print outs likewise failed to show that A was allowed due
process before his dismissal. The law requires an
employer to furnish the employee two written notices
before termination of his employment may be ordered.
These requirements were not observed in this
case. (IBM Philippines v. National Labor Relations
Commission, 305 SCRA 592, 13 April 1999)
Q: RP filed with the SEC a petition for the suspension of
payments and a rehabilitation plan. A management
committee was created to oversee the rehabilitation
plan. Consequently, the SEC issued an order
suspending all actions and claims against RP.
Employees of RP filed their respective complaints for
illegal dismissal, unfair labor practice, and payment of
separation pay.
The Labor Arbiter held that the order
of the SEC suspending all action for claims against RP
does not cover the claims of private respondents in the
labor cases because said claims and the liability of RP
as the employer still has to be determined, thus carrying
no dissipation of the assets of petitioners. Are labor
claims included in the suspension order of the SEC?
A: Yes. The law is clear: all claims for actions shall be
suspended accordingly. No exception in favor of labor
claims is mentioned in the law. Allowing labor cases to
proceed clearly defeats the purpose of the automatic
stay and severely encumbers the management
committees time and resources.
The preferential right of workers and employees
under Article 110 of the Labor Code may be invoked only
upon the institution of insolvency or judicial liquidation
proceedings. The purpose of rehabilitation proceedings
is precisely to enable the company to gain a new lease
on life and thereby allow creditors to be paid their claims
from its earnings. In insolvency proceedings, the
company stops operations and the claims of creditors

are satisfied from the assets of the insolvent company.

The present case involves rehabilitation, not the
liquidation, of RP Corporation. Hence the preference of
credit granted to workers is not applicable. The labor
claims filed by the employees will temporarily be
suspended during the period of the rehabilitation
plan. (Rubberworld Philippines v. National Labor
Relations Commission, 305 SCRA 721, 14 April 1999)
Q: S was employed by JVAC Corporation in 1969. He
retired on 1992 when he was 62 years old.
Subsequently, S brought a complaint for retirement
benefits and service incentive leave pay before the
NLRC against the corporation. The Labor Arbiter granted
retirement pay to S under RA 7641. The corporation
challenged this decision asserting that S retired almost a
year prior to the effectivity of the said law (7 January
1993), and thus the retirement benefits under RA 7641
should not be applied retroactively. Was S entitled to the
retirement benefits under RA 7641?
A: No. The Court held in a previous case that RA 7641
granting retirement benefits is undoubtedly a social
legislation. There should be little doubt about the fact
that the law can apply to labor contracts still existing at
the time the statute has taken effect, and that its benefits
can be reckoned not only from the date of the laws
enactment but retroactively to the time said employment
contract have started. The aforecited doctrine was
elaborated upon by enumerating the circumstances
which must concur before the law could be given
retroactive effect: (1) the claimant must still be an
employee of the employer at the time the statute took
effect; and (2) the claimant has complied with the
requirements for eligibility under the statute. In the case
under scrutiny, S retired and ceased to be an employee
of JVAC Corporation eleven months before the effectivity
of RA 7641. It is thus decisively clear that the provisions
of RA 7641 could not be given retroactive effect in his
favor. (J.V. Angeles Construction Corporation v.
NLRC, 305 SCRA 734, 14 April 1999)
Q: The corporation and ALU inked a CBA effective until
1995. 14 days before the expiration of the said CBA,
NAFLU filed a petition for certification election, which
was granted by the Med-Arbiter. ALU interposed a
Motion to Dismiss for failure of NAFLU to acquire for and
in behalf of its local charter affiliates (COPPER), a legal
personality as a legitimate labor organization. ALU and
NAFLU signed an agreement to hold a certification
election and NAFLU promised to furnish ALU a copy of
its Certificate of Registration and other pertinent
documents. On the same day COPPER was issued by
the DOLE a Certificate of Registration. Was the PCE
duly filed?
A: Yes. In a previous case, the Court held that a party is
estopped to challenge the personality of a corporation
after having acknowledged the same by entering into a
contract with it. In the present case, ALU acknowledged
the legal existence of NAFLUs affiliate by entering into
an agreement with NAFLU. ALU aver that their

agreement with NAFLU on the holding of a certification

election with a suspensive condition was not complied
with. Considering, however, that NAFLU was able to
submit the documents required by the agreement, such
compliance retroacted to the date the agreement was
signed.
The order of the Med-Arbiter granting the petition
for the certification election has become final in view of
ALUs failure to appeal there from. Under the Labor
Code, a party has the right to appeal an order allowing
or granting a petition for certification election. But the
right of appeal may only be exercised within 10 calendar
days from the receipt of the order. (Associated Labor
Unions v. Quisumbing, 305 SCRA 762, 14 April 1999)
Q: A was a police officer assigned to PNP Vigan. While
he was driving his tricycle and ferrying passengers, he
was confronted by another police officer about his tour of
duty. A verbal tussle then ensued between the two,
which led to the fatal shooting A. On account of As
death, his wife filed a claim for death benefits with the
GSIS. In its decision, GSIS denied the claim on the
ground that at the time of his death, A was performing a
personal activity that was not work-connected.
Subsequent appeal to the Employees Compensation
Commission (ECC) proved to be futile as it merely
affirmed the decision of GSIS. The Court of Appeals,
however, ruled otherwise. It decided that as applied to a
peace officer, As work place is not confined to the police
precinct or any station, but to any place where his
services, as a lawman, to maintain peace and security,
are required. At the time of his death, A was driving his
tricycle at the town complex where the police assistance
center is located. There can be no dispute therefore that
he met his death literally in his place of work. Policemen,
by the nature of their functions, are deemed to be on a
round-the-clock duty. Must the activity being performed
at the time of death be work-connected for it to be
compenesable?
A: Yes. While it agrees that policemen are at the beck
and call of public duty as peace officers and technically
on duty round-the-clock, the same does not justify the
grant of compensation benefits for the death of A.
Obviously, the matter A was attending at the time of his
death, that of ferrying passenger for a fee, was
intrinsically private and unofficial in nature proceeding as
it did from no particular directive or permission of his
superiors officers. The 24-hour duty doctrine, as applied
to policemen and soldiers, serves more as an after-thefact validation of their acts to place them within the
scope of the guidelines rather than a blanket license to
benefit them in all situations that may give rise to their
deaths. In other words, the 24-hour doctrine should not
be sweepingly applied to all acts and circumstances
causing the death of a police officer but only tot hose
which, although not on official line of duty, are
nonetheless basically police service in character.
Therefore, death benefits under the ECC should not be
granted. (Government Service Insurance System v.
Court of Appeals, 306 SCRA 41, 20 April 1999)

Q: LG, JB and PB were accused of illegal recruitment by

a syndicate in large scale. It was alleged that the above
named accused, without license or authority, recruited
several people for job placement abroad, receiving a
placement fee from the recruits in exchange. The
recruits flew to the supposed country of employment yet
had to return to the Philippines as the promised job did
not exist. The victims confronted the accused, and the
accused promised to refund their money. Were the
accused guilty of illegal recruitment in a syndicate?
A: Yes. The Court held that the appeal lacks merit.
Recruitment for overseas employment is not in itself
necessarily immoral or unlawful. It is the lack of the
necessary license or permit, or the engagement of
prohibited activities enumerated in the Labor Code that
renders such recruitment activities unlawful or criminal.
The accused asserted that the offense should not have
been qualified into illegal recruitment by a syndicate
since there was no proof that they acted in conspiracy
with one another. However, the acts of the accused
showed unity in purpose. One would visit the house of
the recruits several times, convincing them to work
abroad. Another would accompany the recruit to the
house of the person collecting the processing fee. All
these acts established a common criminal design
mutually deliberated upon and accomplished through
coordinated acts. Against the evidence of the
prosecution, the accused merely posited the defense of
denial. Denials, if unsubstantiated by clear and
convincing evidence, are deemed negative and selfserving evidence unworthy of credence. (People v.
Guevarra, 306 SCRA 111, 21 April 1999)
Q: Philippine Rabbit Inc. (PRI) employed PE as a bus
conductor. On 1975, petitioner terminated the services of
PE, prompting him to sue PRI for illegal dismissal. The
Labor Arbiter declared the dismissal to be illegal and
ordered reinstatement with full backwages. PRI
appealed to the NLRC but the appeal was dismissed, as
the same was not filed within the reglementary period.
PRI appealed to the Office of the President, which
directed PRI to reinstate PE but only pay backwages for
six months. PE was paid the backwages but he was not
reinstated. Thus, he moved for a second writ of
execution on 1985 and the payment of backwages from
1979 (the date he presented himself for reinstatement)
until he could actually be reinstated. The NLRC granted
the Writ of Execution. Did the NLRC committed a grave
abuse of discretion in modifying the amending the final
and executory order of the Office of the President, and in
enforcing by mere motion the final judgment of the Office
of the President despite the lapse of seven years?
A: No. PRI cannot legally invoke in this case the strict
application of the rule limiting execution of judgment by
mere motion within a period of 5 years only. There have
been cases where the Court allowed execution by mere
motion even after the lapse of 5 years. Their common
denominator in those instances was the delay caused or
occasion by the actions of the judgment debtor and/or
those incurred for his benefit. In the instant case, PRI

unduly delayed the full implementation of the final

decision of the Office of the President by fling numerous
dilatory appeals and persistently refusing to reinstate
private respondent PE. Technicalities have no room in
labor cases where the Rules of Court are applied only in
a suppletory manner and only to effectuate the
objectives of the Labor Code, and not to defeat them.
PRI can no longer assail the propriety of the final
decision of the Office of the President issued way back
in May 1978. The finality of a decision is a jurisdictional
event that cannot be made to depend on the
convenience of a party. Once a decision attains finality, it
becomes the law of the case whether or not the decision
is erroneous. (Philippine Rabbit Bus Lines, Inc. v.
NLRC and Evangelista, 306 SCRA 151, 21 April 1999)
Q: According to the prosecution, the accused, RC,
invited and convinced several people to work with her as
a factory worker abroad. RC promised to process the
necessary papers for a placement fee of P8, 000.00.
When the agreed date of departure came, RC failed to
show up. The recruits went to the POEA who issued a
certification that RC had no license to recruit overseas
workers. The recruits then went to the police and filed a
compliant for illegal recruitment in large-scale. RC
vehemently denied recruiting the complainants and
declared that she merely tried to help them work abroad
at the insistence of the complainants. Is RC guilty of
illegal recruitment?
A: Yes. Large-scale illegal recruitment has the following
elements: (1) The accused undertook recruitment
activities or any prohibited practice under the Labor
Code. (2) He did not have the license or authority to
lawfully engage in the recruitment and placement of
workers. (3) He committed the same to two or more
persons. The prosecution evidence proved beyond
reasonable doubt that the foregoing elements were
present in this case. There is no question that RC did not
have a license to engage in he recruitment of workers,
as she herself admitted, and that the crime was
committed against more than three persons. The
evidence on record belies her argument that she did not
engage in the recruitment and placement of workers.
The testimonies of the recruits unequivocally prove that
RC promised the three jobs abroad provided they would
pay the placement fee. The fact that each of them paid
the down payment is evidence by the receipts issued
and signed by RC. (People of the Philippines v.
Castillon, 306 SCRA 271, 21 April 1999)
Q: AA is the owner of a farm who employed the
petitioners C and I. Petitioners contended that they were
verbally told by AA to stop working and terminated their
employment without informing them of the reason for
their intended dismissal. Hence, they charged AA for
illegal dismissal with money claims. AA asserts that C
and I were dismissed for valid causes, as they were
guilty of insubordination, both disobeying the prescribed
manner and procedure of doing their job. The Labor
Arbiter ruled that there was no just cause for termination.
On appeal, the NLRC reversed the decision of the Labor

Arbiter for gross insufficiency of evidence to sustain the

decision, remanding the case to the Labor Arbiter for the
reception of further evidence. Was the remand of the
case to the Labor Arbiter proper?
A: No. The remand of the case to the Labor Arbiter for
the reception of evidence has no legal or actual basis.
Subject to the requirements of due process, proceedings
before the Labor Arbiter are generally non-litigious,
because technical rules and procedures of ordinary
courts of law do not strictly apply. Thus, a formal or trialtype hearing is not always essential. In the absence of
any palpable error, arbitrariness or partiality, the method
adopted by the Labor Arbiter to decide a case must be
respected by the NLRC.
AA was not deprived of due process of law, the
essence of which is simply the opportunity to be heard. It
must be stressed that all the parties to the case were
given equal opportunities to air their respective positions
before the Labor Arbiter. That AA failed to fully air his
position by his own inaction or negligence does not
constitute deprivation of due process. (Caete and
Isabida v. National Labor Relations Commission, 306
SCRA 324, 21 April 1999)
Q: AL was a seaman on board the vessel M/V Cast
Muskoz. His lifeless body was found hanging by the
neck from the ceiling of an old abandoned warehouse in
Quebec, Canada. According to the coroner, the probable
cause of death was asphyxiation by hanging. When ALs
body was flown to Manila, his father noted that the body
bore several bruises. They submitted the cadaver to the
NBI for an autopsy. Considering that the findings of the
NBI were all inconsistent with suicide, the father filed a
claim with the POEA. The POEA dismissed the
compliant of the father based on the solid evidence of
the employer-shipping company. On appeal, the NLRC
affirmed the ruling of the POEA. Apparently, both labor
bodies anchored their conclusion on the fact that had
there been foul play involved in ALs death, the $2,
000.00 in his pocket would have been taken. Was the
father of AL entitled to his sons death benefits?

feedback on his manner of providing services to the

hotel guests. A memorandum was later issued
transferring him to the linen room as an attendant. He
resisted the transfer and did not assume his new post at
the linen room. The hotel terminated his employment on
the ground of insubordination. The Labor Arbiter
declared the dismissal to be legal. On appeal, the NLRC
reversed the decision of the Labor Arbiter declaring that
the intended transfer was in the nature of a disciplinary
action. The hotel management contends that the
employees continuous refusal to report to his new work
assignment constituted gross insubordination. Was the
transfer of the employee a valid exercise of its
management prerogative?
A: Yes. Disobedience to be a just cause for dismissal
envisages the concurrence of at least two requisites
(a) the employees wrongful conduct must have been
willful or intentional; (b) the order violated must have
been reasonable, lawful, made known to the employee
and must pertain to the duties which he has been
engaged to discharge. It is the employers prerogative,
based on its assessment and perception of the
employees qualification, aptitude and competence, to
move him around in the various areas of its business
operations in order to ascertain where the employee will
function with utmost efficiency and maximum productivity
or benefit to the company.
Deliberate disregard of company rules or
defiance of management prerogative cannot be
countenanced. Until and unless the rules or orders are
declared to be illegal or improper by competent authority,
the employees ignore or disobey them at their peril. In
the case at bat, the employee was repeatedly reminded
not only by management but also by his union to report
to work station but to no avail. (Westin Philippine Plaza
Hotel v. National Labor Relations Commission, 306
SCRA 631, 3 May 1999)

A: Yes. The employer failed to ascertain the

circumstances surrounding ALs death, which was its
duty to undertake as ALs employer. Such willful neglect
cannot but indicate that a through investigation would
have yielded a result adverse to the employer. The
records are bereft of any substantial evidence showing
that respondent employer successfully discharged its
burden of proving that AL committed suicide, so as to
evade its liability for death benefits under POEAs
Standard Employment Contract for Filipino Seaman.
The records of this case are remanded to the POEA for
the computation of the death benefits to be awarded to
the father of AL. (Lapid v. National Labor Relations
Commission, 306 SCRA 349, 29 April 1999)

Q: Accused Enriquez promised employment in Taiwan to

at least 42 people. They were each asked to pay
processing fees ranging from P3, 370 to P5, 000 for
which no receipts were issued and to submit documents
to facilitate their travel and subsequent deployment
abroad. The POEA issued a certification showing the
Enriquez is not licensed to engage in the recruitment of
workers for overseas employment. In her defense,
Enriquez claimed that it was her common-law husband
who was engaged in the business and she only acted
as his secretary when she dealt with the complainants.
She allowed him to establish his recruitment office at her
residence. Enriquez claimed that she only helped her
husband in the office for three months while he was
looking for a secretary. Part of her duties then was to
collect the documents submitted by the applicants and
receive the money they paid as placement fees. Is she
guilty of illegal recruitment in large-scale?

Q: R was employed by the hotel as a doorman.

Professional shoppers hired by the hotel evaluating hotel
employees recommended the transfer of Rodriguez to a
non-customer-contact position because of the negative

A: Yes. The essential elements of the crime of illegal

recruitment in large-scale can be summarized as follows:
(1) the accused engages in acts of recruitment and
placement of workers as defined in the Labor Code; (2)

the accused does not have a license or authority from

the Secretary of Labor to recruit and deploy workers;
and (3) the accused commits the same unlawful acts
against three or more persons, individually or as a
group.
The theory of the defense unduly strains the
credulity of the Court. The complainants positively
identified Enriquez as the one who dealt directly with
them from the time they inquired about the job prospects
abroad until they complied with the requirements and
followed up their applications. Worth reiterating is the
rule that illegal recruitment in large-scale is malum
prohibitum, not malum in se, and that the fact alone that
a person violated the law warrants her conviction. Any
claim of lack of criminal intent is unavailing. (People of
the Philippines v. Enriquez, 306 SCRA 739, 5 May
1999)
Q: Coca Cola entered into a contract of janitorial
services with BJS. Coca Cola then hired X first, as a
casual employee; after the casual employment was
terminated, Coca Cola again hired X as a painter in
contractual projects. He was also hired by BJS, which
assigned him to the Coca Cola considering his familiarity
with its premises. Goaded by information that Coca Cola
employed previous BJS employees who filed a
complaint against the company for regularization
pursuant to a compromise agreement, X submitted a
similar complaint against Coca Cola to the Labor Arbiter;
he included BJS therein as a co-respondent. He no
longer reported to work and when offered by BJS to
work in other firms, he refused. He amended the
complaint to illegal dismissal and underpayment of
wages. Is there an employee-employer relationship in
this case?
A: No. The Court takes judicial notice of the practice
adopted in several government and private institutions
and industries of hiring janitorial services on an
independent contractor basis. Although janitorial
services may be considered directly related to the
principal business of an employer, the Court deemed
them unnecessary in the conduct of the principal
business. This judicial notice rests on the assumption
that the independent contractor is a legitimate job
contractor so that there can be no doubt as to the
existence of an employer-employee relationship
between the contractor and the worker. It is also clear
that BJS exercises control over the work of X as most of
his assigned task dealt with the maintenance and
sanitation of the company premises pursuant to BJSs
contract with the company.
The Court ruled that no employer-employee
relation exists between X and Coca Cola yet the latter
shall be jointly and severally liable with BJS for the wage
differentials and 13th Month pay of X. (Coca Cola
Bottlers Philippines v. NLRC, 307 SCRA 131, 17 May
1999)
Q: Admiral Hotel hired Balani as a Cost Controller. She
received a memo from the Managing Director calling her
attention to several violation of hotel rules she had

violated such as using the phone for personal calls and

entertaining visitors during office hours, to the detriment
of her regular work. The employee denied the charges
leveled against her and she submitted a letter of
resignation. Consequently, she received all salaries,
benefits and separation pay, and executed a quitclaim in
favor of the hotel. Did the employee voluntarily resign?
A: Yes, this is a case if voluntary resignation. The
employee claims that she was constructively dismissed
from her office as its location was transferred from under
the steps of the stairs to the kitchen. Such transfer
caused her mental torture, which forced her to resign.
However, it was not shown that her transfer was
prompted by ill will of management. Indeed, the resident
manager of the hotel swore that the transfer affected not
only the Cost Control office but also the other offices.
The transfer only involved a change in location of the
office. It does not involve a change in the employees
position. Even a transfer in position is valid when based
on sound judgment, unattended by demotion in rank or
diminution of pay or bad faith. (Admiral Realty
Company (Admiral Hotel) v. NLRC, 307 SCRA 162, 18
May 1999)
Q: While the oiler was anchored on port, seaman H was
directed to open and clean the main engine. To
accomplish this, he had to enter a manhole in a
crouching position. After working for 4 consecutive days,
he experienced back pains and foot swelling. However,
he was instructed to continue with his work until he was
finally repatriated to the Philippines where medical
examinations confirmed that he suffered from a slipped
disc, which required surgery. Upon hearing that the
surgery would cost more than P 40,000, the company
disregarded the recommendation for surgery and instead
proposed a less costly treatment. But this did not
improve the condition of H. After seven months, H filed a
complaint with the POEA against the maritime agencies
for disability and medical benefits. The employers allege
that H signed a Receipt and Release in favor of the
maritime agencies while the case was pending in POEA,
that affirmed the findings of the POEA that his illness
was work-connected. H supposedly acknowledged
receipt of a certain amount in complete and final
settlement of all his wages, benefits and claims. The
maritime agencies assert that the signed Receipt is a
quitclaim that releases them from any liability
whatsoever. Is the agreement valid?
A: No, the law does not consider as valid any
agreement to receive less compensation than what a
worker is entitled to recover nor prevent him from
demanding benefits to which he is entitled. It is appalling
that H would settle for a measly consideration of P15,
000 which is grossly inadequate, that is could not have
given rise to a valid waiver on the part of the
disadvantaged employee.
In order that a quitclaim may be valid, the
requisites are: (1) there was no fraud or deceit on the
part of any party; (2) the consideration of the quitclaim is
credible and reasonable; and (3) that the contract is not

contrary to law, public order, public policy, morals or

good custom. But even assuming that the ailment of H
was contracted prior to his employment with the
maritime agency, this fact would not exculpate
petitioners from liability. Compensability of an ailment
does not depend on whether the injury or disease was
pre-existing at the time of the employment but rather if
the disease or injury is work-related or aggravated his
condition. It is safe to presume, at the very least, the
arduous nature of Hs employment had contributed to
the aggravation of his injury, if indeed it was pre-existing
at the time of his employment. Therefore, it is but just
that he be duly compensated for it. (More Maritime
Agencies and Alpha Insurance v. NLRC, 307 SCRA
189, 18 May 1999)
Q: The General Manger of the Toll way received reports
that certain security personnel are involved in mulcting
activities. Acting on the complaint, the manager along
with police officers staged an entrapment. Angeles,
security guard on duty in one of the exits was caught in
flagrante delicto receiving bribe money from an
undercover passenger pretending to illegally transport
dogs. A notice of dismissal on the ground of serious
misconduct was issued. After formal investigations,
dismissal was advised and Angeles was informed of his
dismissal. Angeles claimed that the entrapment was
masterminded by the manager as a retaliation for his
being critical of the managers administration. He now
claims separation pay. Is he entitled to separation pay?
A: An employee who is dismissed for just cause is
generally not entitled to separation pay. In some cases,
the Court awards separation pay to a legally dismissed
employee on the grounds of equity and social justice.
This is not allowed, though, when the employee has
been dismissed for serious misconduct or other causes
reflecting on his moral character. The act of accepting
bribe money constituted serious misconduct that
warrants the dismissal from the service. (Philippine
National Construction Corporation v. NLRC, 307
SCRA 218, 18 May 1999)
Q: C, a managerial employee, was accused of sexually
harassing a subordinate, S. After hearing and
investigation, the Management Evaluation Committee
concluded that the charges against C constituted a
violation of the Plants rules and regulations. It stated
that, touching a female subordinates hand and
shoulder, caressing her nape and telling other people
that S was the one who hugged and kissed or that she
responded to the sexual advances are unauthorized acts
that damaged her honor. It referred to the manual of
the Philippine Daily Inquirer in defining sexual
harassment, which defined sexual harassment as
unwelcome or uninvited sexual advances, requests for
sexual favors and other verbal or physical conduct of
sexual nature with any of the following elements...
(including) such conduct as unreasonably interferes with
the individuals performance at work, or creates an
intimidating, hostile or offensive working environment.
C was charged with 30 days suspension without pay. C

filed a complaint for illegal suspension. The Labor

Arbiter dismissed the petition which ruling was affirmed
by the NLRC. The C assailed the failure to apply RA
7877 in determining whether or not he actually
committed sexual harassment. Was C correctly charged
with sexual harassment justifying his suspension?
A: Yes. RA 7877 was not yet in effect at the time of the
occurrence of the act complained of. IT was still being
deliberated upon in Congress. As a rule, laws shall have
no retroactive effect unless otherwise provided. Hence,
the Labor Arbiter had to rely on the MEC report and the
common connotation of sexual harassment as it is
generally understood by the public. Also, as a
managerial employee, is bound by more exacting work
ethics. When such moral perversity is perpetrated
against a subordinate, there is a justifiable ground for
dismissal
based
on
loss
of
trust
and
confidence. (Libres v. NLRC, 307 SCRA 674, May 28,
1999)
Q: In an intra-union dispute involving the examination of
union accounts of a Local Chapter, the parties submitted
the matter to the Office of the Regional Director, who
sustained the order for an audit to be conducted. The
ILM union officers appealed the order to the DOLE
Secretary, who endorsed it to the Bureau of Labor
Relations. The BLR subsequently dismissed the
appeal. Is the DOLE Secretary correct in endorsing the
case?
A: Yes. Examinations of union accounts are expressly
classified by the Rules of Procedure on Med-Arbitration,
and a different process is provided for the resolution of
the same. According to Art. 226 of the Labor Code, the
BLR has appellate jurisdiction over the matter, so the
DOLE Secretary was correct in its endorsement of the
case. (Barles v. Bitonio, 308 SCRA 288, June 1999)
Q: Q and L were supervisors whose jobs involved the
overseeing of the withdrawal and sorting of sacks of
sugar. In one transaction involving 50,000 Class C
sacks, large numbers of sacks were misplaced, and
sacks of other classes were mixed in with the lot. As
they were supervising other operations at the time, Q
and L were lax with their duties to see that the sacks
were properly segregated and delivered. As a result, a
large number of sacks was stolen from the company. Q
and L were subsequently fired for gross negligence. Are
they validly dismissed?
A: NO. While Quimba and Lagrana were partially
responsible for the unfortunate incident, their negligence
is not gross or habitual, and as such does not merit
outright dismissal. Thus, they would be entitled to
reinstatement, but the employees have accepted the
NLRCs judgement for separation pay instead due to the
animosity between the parties. (National Sugar
Refineries Corp. v. NLRC, 308 SCRA 599, June 1999)
Q: R worked as the driver of T, the owner of Ultra Villa
Food Haus. During the May 1992 elections, he acted as

a poll watcher for Lakas-NUCD and did not report for

work for two days. For the past years, the T gave R
13th mo. Pay. He alleged that he was an employee of
Ultra Villa Food Haus, and as such, he was entitled to
the benefits accorded to employees under the Labor
Code. What is R entitled to?

showing that the power to discipline erring employees is

vested in their immediate supervisors. As such, they fall
outside of the restriction on managerial employees from
joining unions and participating in certification
elections. (Semirara Coal Corporation v. Secretary of
Labor, 309 SCRA 292, June 1999)

A: Geniston is a personal driver of Tio, and as such, the

company is not obliged to grant overtime pay, holiday
pay, premium pay and service incentive leave, including
13th mo. pay. However, since T admitted that she has
given R 13th mo. pay every December, it is but just to
award R such benefit. (Ultra Villa Food Haus v.
Geniston, 309 SCRA 17, June 1999).

Q: Complainants are deaf-mutes hired by Company F as

money sorters and counters through an agreement
called, Employment Contract for Handicapped Worker.
The Labor Arbiter and NLRC ruled that Article 280 was
not controlling as complainants were hired as an
accommodation to the recommendation of civic oriented
personalities whose employments were covered by
Employment Contracts with special provisions on
duration of contract as specified under Art. 80. Hence,
the terms of the contract was be the law between the
parties. Complainants allege that the contracts served
to preclude the application of Article 280 and to bar them
from becoming regular employees. Company F submits
that complainants were hired as special workers under
Art. 80 of the Labor Code and they never solicited the
services of petitioners. Were complainants regular
employees?

Q, a former employee of SURNECO, sent letters to the

company management requesting separation benefits
for her 9 years of faithful service to the company. Nearly
four months later, E, then Personnel Officer of
SURNECO, followed up and made a review of Qs case.
Subsequently, Q filed a complaint for illegal dismissal,
based largely on the report of E acting in favor of Q. The
complaint was barred by prescription, but because of
what had happened, E was terminated for having
provided Q with the weapons and ammunition to wage
a war against the cooperative. Furthermore, the Board
of SURNECO concluded that advancing the interest of Q
instead of the company, especially since she divulged
the contents of her internal memorandum to Q, were
inimical to the company and merited dismissal. Was E
illegally dismissed?
A: YES. E was a Personnel Officer, holding a
managerial position that is considered vested with a
certain amount of discretion and independent
judgement. She was simply doing her job when she
reviewed Quintos case, and she is not proscribed from
taking the side of labor when she makes
recommendations as to what must be done in each
situation. Also, there is no evidence that Quinto got the
copy of the internal memorandum directly from Esculano
she could have acquired it from other sources. As
such, Es actions do not qualify as breach of confidence
or serious misconduct.
(Surigao Del Norte Electric
Cooperative v. NLRC, 309 SCRA 233, June 1999).
Q: RA 6715 was passed creating a new classification of
employee, the supervisory employee, as not being a
member of the rank and file but also not considered a
managerial employee. At around this time, the
supervisory employees of Semirara Coal decided to form
their own union and intervene in the certification
elections. However, the company filed a motion to
disqualify the supervisory employees from participating
in the certification elections, as their functions were
managerial in nature. Should they be allowed to
participate in the certification elections?
A: Yes, they should be allowed. The said employees fall
under the category of supervisory employees. Nothing
in the company policies alters the nature and duty of
these supervisory employees to managerial. There is no

A: Yes. The enactment of RA 7277, the Magna Carta

for Disabled Persons, justify the application of Art. 280 of
the Labor Code. Such law mandates that a qualified
disabled employee should be given the same terms and
conditions of employment as a qualified able bodies
person. The fact that complainants were qualified
disabled persons removes the employment contracts
from the ambit of Art. 280, since the Magna Carta
accords them the rights of qualified able-bodied
persons. The task of complainants was necessary and
desirable in the usual trade of the employer and
therefore
they
should
be
deemed
regular
employees. (Bernardo v. NLRC, 310 SCRA 186, July
12, 1999)
Q: A labor dispute arose between Company Y and Union
A, which caused the union to file a notice of stricke with
the NCMB charging the company with ULP for unionbusting and violations of the CBA. This was followed by
picketing and the holding of assemblies by the union
outside the gate of Company Ps plant. The Secretary of
Labor assumed jurisdiction over the labor dispute and
certified it for compulsory arbitration. During the
pendency of the labor dispute, Company Y agreed to sell
its plant and equipment to Company Z. The union was
informed of the purchase of the plant. Company Z
asked the union to desist from picketing outside its plant.
The Union refused petitioners request, and Company Z
filed a compalint for injunction. The Union moved to
dismiss the complaint alleging lack of jurisdiction on the
part of the trial court and that Company Z was an alter
ego of Company Y and not merely an innocent bystander.
A: An innocent by-stander, who seeks to enjoin a labor
strike, must satisfy the court that its interests are totally
foreign to the context of the labor dispute. It must

appear that the inevitable result of its exercise is to

create an impression that a labor dispute with which they
have no connection or interest exists between them and
the picketing union or constitutes an invasion of their
rights. In this case, Company Z clearly has a connection
with the labor dispute as the sale between Company Y
and Company Z reveals a legal relation between them
that cannot be ignored. (MSF Tire and Rubber, Inc. v.
CA, 311 SCRA 784, August 5, 1999)
Q: M was employed by petitioner as a truck driver. One
day, he was accused of tampering with the vale sheet
and he was subsequently barred from entering company
premises. M filed a complaint of illegal dismissal against
private respondent before the NLRC. A copy of the
summons was sent to petitioners by registered mail and
was duly received and signed. The petitioner was also
notified of the hearing date by registered mail but no one
appeared for the petitioner. The Labor Arbiter deemed
petitioners non-appearance as a failure to controvert the
facts as claimed by M and decided the case ex-parte.
The petitioners allege that they never received copies of
summons or notices and that the Labor Arbiter never
acquired jurisdiction over them, as there was no valid
service of summons. Were the petitioners denied due
process?
A: No. The bare assertion of petitioner that the persons
who signed the summons which were sent by registered
mail were impostors or persons unknown to them
requires substantiation by competent evidence. In quasijudicial proceedings of the NLRC, procedural rules
governing service of summons are not strictly construed
and substantial compliance is therefore sufficient.
Further, official duty is presumed to have been
performed regularly unless the contrary is proven. In
administrative proceedings, due process simple means
the opportunity to explain ones side or seek a
reconsideration of the action complained of. Petitioners
were able to file an appeal before the NLRC of the Labor
Arbiters decision and a party who has availed of the
opportunity to present his position cannot claim to have
been denied due process.
The Court also ruled that M was constructively
dismissed when he was accused of tampering with the
vale sheet and prevented from going to work. The
assertion of petitioner that M abandoned his work is also
without merit as it is highly illogical for an employee to
abandon his employment and thereafter file a complaint
for illegal dismissal. Even assuming that there was
abandonment, there was non-compliance with the
statutory requirement of notice; therefore M is entitled to
separation pay and backwages.(Masagana Concrete
Products v. NLRC, 313 SCRA 576, 3 September
1999)
Q: L was employed by NAPCO-Luzmart, which was
managed by petitioner Garcia. A mauling incident
occurred in the company premise involving L and
another employee. The following day after the incident, L
submitted his written explanation of the event. 3 days
later, L attempted to report for work but the company

refused to admit him. L immediately filed a complaint for

illegal dismissal with the NLRC. After the company knew
of the illegal dismissal charge against it, a memorandum
was issued ordering the suspension of L. The company
asserted that L remains an employee and was merely
suspended for a month. Proof of this, the company
presented the payrolls where the name of L continued to
be listed as a regular employee during the period after
the alleged illegal dismissal. The company claimed that L
abandoned his work when he failed to report for work
after notice of return. Was L illegally dismissed?
A: The Court ruled that the payroll is of doubtful
probative value, as it does not contain the signature of
employees as proof that they received their salaries for
the said period. For a valid finding of abandonment, two
factors must be present: (1) failure to report for work
without any valid or justifiable reason; and (2) a clear
intention to sever the employer-employee relationship
manifested by some overt acts. It was the company who
refused him entry into the work place and made it
impossible for him to return to work. Moreover, the filing
of the complaint for illegal dismissal 7 days after the
alleged dismissal negates said charge.
Although fighting within company premises may
be considered as a serious misconduct under Article 282
of the Labor Code, not all fights within company
premises would warrant dismissal. This is especially true
if the employee did not instigate the fight and it appears
from the facts of the case that L was just defending
himself from the assault of a co-employee.
The company was ordered to reinstate L and pay
backwages computed from the date of illegal
dismissal. (Garcia v. National Labor Relations
Commission, 313 SCRA 597, 3 September 1999)
Q: In a case of illegal dismissal against the petitioner, the
Labor Arbiter ruled that the dismissal of P was illegal and
awarded damages, separation pay and backwages. The
company filed a Motion for Appeal and a Motion to
Reduce Appeal Bond before the NLRC reiterating that P
voluntarily resigned and was not illegally dismissed.
Petitioners argued that considering the authorized
capital stock of the corporation was only P2, 000,000.00,
an award of P1, 870,000.00 as backwages alone was
excessive and initially posted only a P50,000.00 cash
bond. The NLRC denied the Motion to Reduce the
Appeal Bond. The NLRC gave the company three
extensions (totaling 30 days) for them to comply with the
appeal bond requirement. A certain R, wife of the
companys chairman, posted the required bond. Yet
when R learned that she was not under any obligation to
post the bond on behalf of her husband, she withdrew
the bond. Should petitioners still be made to post
another bond?
A: Yes. Since effectively, no appeal bond was posted by
petitioners, no appeal was perfected from the decision of
the Labor Arbiter, for which reason the decision sought
to be appealed to the NLRC became final and executory
and immutable. The requirement of cash or surety bond
to perfect an appeal from the Labor Arbiters monetary

award is jurisdictional; non-compliance is fatal and

renders the award final and executory. It is not an
excuse that the bond of P2 million is too much for a
small business enterprise. The law does not require
outright payment but only the posting of a bond to
ensure that the award will eventually be paid should the
appeal fail. (Biogenerics Marketing and Research
Corporation v. NLRC, 313 SCRA 748, 8 September
1999)

parties that the case was already submitted for decision.

There was an utter absence of opportunity to be heard at
the arbitration level. What the Labor Arbiter should have
done was to rule on the pending motions, or at least
notify private respondents that he would no longer
resolve their motions, and to direct them forthwith to
submit within a reasonable time their position paper as
well as all the evidence. (Habana vs. NLRC, 314 SCRA
187, September 1999)

Q: X was employed by petitioner Restaurante Las

Conchas while the latter was involved in a legal battle
with company Y over the land being allegedly occupied
by the petitioner. Company Y was able to obtain a
favorable judgment which eventually caused petitioner to
vacate the premises. As no other suitable location was
found for petitioner to move, the restaurant was forced to
close down, thereby resulting in the termination of
employment of X. No separation pay was given to X
based on the argument of petitioner that only closure of
business not due to business losses mandates payment
of separation pay to dismissed employees. Should
separation be given and should the manager of the
Restaurante Las Conchas be held liable as a corporate
officer?

Q: Petitioner X was an Italian citizen who was the Exec.

Vice President and Gen. Manager of Company Y when
he was terminated by the latter. X then filed a complaint
for illegal dismissal. Company Y based the dismissal of
X on the ground that X failed to secure his employment
permit. X, on the other hand, argued that it was the duty
of the company to secure his work permit during the
term of his office. The Labor Arbiter rendered a decision
in favor of X. Company Y however appealed such
decision to the NLRC. X now questions the jurisdiction of
NLRC as he is a corporate officer, it is the SEC who
should have jurisdiction. Did the NLRC have jurisdiction
over the case?

A: The Court rules that the burden of proof that business

losses actually occurred rests on the employers. Since
no statements of assets and liabilities certified by a CPA
or accounting firm was offered, nor the corporations
Income Tax Return certified by the BIR was shown, such
business losses were not proven. As regards the liability
of the manager, generally, the officers and members of a
corporation are not personally liable for the acts done in
the performance of their duties. An exception is when
the employer corporation is no longer existing and is
unable to satisfy the judgment in favor of the employees.
In such a case, the officers should be held liable for
acting on behalf of the corporation. (Restaurante Las
Conchas and/or David Gonzales vs. Llego, 314
SCRA 24, Sept. 9, 1999)
Q: X was hired by Respondent under a 2 year contract in
Kuwait. Only after 1 year, however, X was terminated
from employment and was sent back to the Philippines.
X then filed a complaint for illegal dismissal with the
Labor Arbiter. Respondents were given by the Labor
Arbiter 10 days to answer the charges against.
Respondents submitted a bill of particulars instead
alleging that X was lacking in the required narration of
facts constituting the causes of action. X, on the other
hand, moved to declare respondents in default for failing
to submit their position papers. Both parties agreed that
the Labor Arbiter should decide on the motion on the Bill
of Particulars. The Labor Arbiter, however, declared the
respondents in default for failure to submit their position
papers within the period given. Were the respondents
denied due process?
A: Yes. The court rules that there was denial of due
process since no notice or order requiring respondents
to file their position paper, nor an order informing the

A: No. According to Sec 5(c) of P.D. No. 902-A, the SEC

exercises exclusive jurisdiction over controversies over
regarding the election and/or designation of directors,
trustees, officers, or managers of a corporation,
partnership or association. Jurisdiction therefore is not
which the Labor Arbiter nor the NLRC. (De Rossi vs.
NLRC, 314 SCRA 245, September 1999)
Q: Respondent X was hired by the Blue Dairy to work as
a food technologist in the latters laboratory. One day
however, while attending to a client outside company
premises as accompanied by the company driver, the
vehicle was hit by a post, as there was a typhoon.
Afterwards, X was then transferred from the laboratory to
the vegetable processing section; she was then barred
from the laboratory. X claims that she was constructively
dismissed as she was evidently demoted. Was X
constructively dismissed from work?
A: Yes. The Court rules that although the employer has
managerial prerogative to transfer personnel, such must
be exercised without grave abuse of discretion. The
employer has the burden of proof to show that such
transfer was not unreasonable, inconvenient or
prejudicial to the employee, nor does it involve a
demotion in rank or a diminution of his salaries,
privileges and other benefits. The company in this case,
alleges that the reason for the transfer was loss of trust
and confidence. X however, was never given the chance
to refute such reason, nor was she notified in advance of
the transfer. (Blue Dairy Corporation vs. NLRC, 314
SCRA 401, September 1999)
Q. A check was mis-posted, resulting in an
overstatement of a clients outstanding daily balance.
The President of the bank sent a letter to petitioner to
explain the mis-posting. Internal auditors, after
investigation, reported that petitioner was liable, and the

bank notified her that 20% of the amount would be

deducted from her salary. Upon petitioners demand for
a full-dress investigation, she was informed of her
preventive suspension until the end of the investigation.
Petitioner then filed a complaint for illegal dismissal and
damages. Was she illegally dismissed? Did filing of
damages amount to abandonment of work?
A. Yes, her preventive suspension was without valid
cause since she was suspended outright. Preventive
suspension beyond the maximum period amounts to
constructive dismissal. Likewise, her claim for damages
did not amount to abandonment of work. To constitute
abandonment, these should concur: 1. Failure to report
for work or absence without valid or justifiable cause;
and 2. A clear intention to sever the employee-employer
relationship (more determinative factor manifested by
over acts). She merely took steps to protest her
indefinite suspension. Her failure to report for work was
even due to her indefinite suspension. (Premiere Devt
Bank v. NLRC)

1998 CASES
Q. In an illegal dismissal case, the Labor Arbiter ruled in
favor of the worker. The total monetary award was
more than ONE MILLION Pesos. The employer
appealed and posted a bond in the amount of
P700,000.00 only. In computing the monetary amount
for the purpose of posting an appeal bond, the employer
excluded the award for damages, litigation expenses
and attorneys fees. Is the employers computation
correct?
A. Yes, the computation of the monetary award is
correct. Under the NLRC New Rules of Procedure, an
appeal is deemed perfected upon the posting of the
bond equivalent to the monetary award exclusive of
moral and exemplary damages as well as attorneys
fees.
The
said
implementing
rule
is
a
contemporaneous construction of Article 223 of the
Labor Code by the NLRC pursuant to the mandate. The
exclusion of moral and exemplary damages and
attorneys fees from the computation of the monetary
award has been recognized by the Supreme Court in a
number of cases. (Fernandez v. NLRC, 285 SCRA
149, January 28, 1998)
Q. Reynaldo worked as a bus driver for Nelbusco, Inc..
On February 28, 1993, the airconditioning unit of the bus
which Reynaldo was driving suffered a mechanical
breakdown. The company told Reynaldo to wait until
the airconditioning unit was repaired. No other bus was
assigned to Reynaldo to keep him gainfully employed.
Reynaldo continued reporting to his employers office
for work, only to find out that the airconditioning unit had
not been repaired. More than six months elapsed but
Reynaldo was not given work. He filed a complaint for

illegal dismissal. The NLRC ruled that there was no

illegal dismissal. Is the ruling correct?
A. No, the ruling is erroneous. Under Article 286 of the
labor Code, the bona fide suspension of the operation of
a business or undertaking for a period not exceeding six
months shall not terminate employment. Consequently,
when the suspension exceeds six months, the
employment of the employee shall be deemed
terminated. By the same token and applying said rule
by analogy, if the employee was forced to remain without
work or assignment for a period exceeding six months,
then he is in effect constructively dismissed. The socalled floating status of an employee should last only
for a legaly prescribed period of time. When that
floating status lasts for more than six months, he may
be considered to have been illegally dismissed from the
service. (Valdez v. NLRC, 286 SCRA 87, February 9,
1998)
Q. An employer appealed a Writ of Execution issued by
the Labor Arbiter claiming that it had varied the tenor of
the judgment. The NLRC dismissed the appeal stating
that it had lost jurisdiction over the case. The NLRC
stated that an order of execution is not merely
interlocutory but final in character and that after a
decision has become final, the prevailing party becomes
entitled as a matter of right to its execution. Is the
dismissal of the appeal correct?
A. No, the dismissal of the appeal is erroneous. The
NLRCs ruling is based on the general rule that after a
decision has become final, the prevailing party becomes
entitled as a matter of right to its execution, that it
becomes merely the ministerial duty of the court to issue
the execution. This general rule cannot be applied,
however, whhere the writ of execution is assailed as
having varied the decision. In this case, the employer
alleged that the writ of execution materially altered the
decision. If this allegation is correct, the appellant is
entitled to the remedy of appeal. The NLRC is vested
with authority to look into the correctness of the
execution of the decision and to consider supervening
events that may affect such execution. (SGS Far East
Ltd. V. NLRC, 286 SCRA 335, February 12, 1998)
Q. Federico was a regular work pool employee of
PNCC. He was employed in 1971 and worked in
various construction projects of PNCC. IN 1979, he
worked for a project of PNCC in the Middle East with a
salary of $2.20 per hour. After the completion of the
project in 1984, Federico returned to the Philippines.
PNCC then failed to give him work in its local projects.
Consequently, Federico filed a complaint for illegal
dismissal and obtained a ruling in his favor. When the
backwages were computed, the NLRC used Federicos
salary rate in the Middle East. PNCC questions the
correctness of the computation and claimed that the
computation should be based on Federicos local wage
rate at the time of his transfer to the overseas project.
Decide.

A. The NLRCs computation is erroneous. Federico was

not illegally dismissed while working in the Middle East
project. He was dismissed from the work pool after the
completion of the Middle East project. If Federico were
given local assignments after his stint abroad, he would
have received the local wage. This is the loss which
backwages aim to restore. The computation should be
based on the local rate. (PNCC v. NLRC, 286 SCRA
329, February 12, 1998)
Q. Alleging serious business losses, Edge Apparel
implemented a retrenchment program by phasing out its
sewing line for simple garments. The workers assigned
to this particular sewing line were terminated. The other
lines were maintained. In the illegal dismissal case filed
by the dismissed workers, the NLRC upheld the legality
of the dismissal but treated such dismissal as due to
redundancy. Was the dismissal due to redundancy?
A. No, the dismissal was due to a retrenchment
program. In exercising its right to retrench employees,
the firm may choose to close all, or a part of, its business
to avoid further losses or mitigate expenses. The fact
that only the dismissed employees sewing line was
phased out does not make their termination a case of
redundancy. Redundancy exists where the services of
an employee are in excess of what would reasonably be
demanded by the actual requirements of the enterprise.
A position is redundant when it is superfluous.
Retrenchment, in contrast to redundancy, is an
economic ground to reduce the number of employees.
In order to be justified, it must be due to business losses
which are serious, actual and real. In this case, the
phasing out of the line for simple garments and,
consequently, the termination of employees assigned to
such line, was due to serious business losses. Hence,
it constitutes retrenchment. (Edge Apparel, Inc. v.
NLRC, 286 SCRA 303, February 12, 1998)
Q. Simultaneous with the filing of the appeal, the
appellant-employer filed a motion to reduce the amount
of the bond. The motion was partially granted. In the
order partially granting the motion to reduce the amount
of the bond, the NLRC directed the appellant to post the
bond within ten (10) days from receipt of the order.
Instead of filing the bond, the appellant employer filed a
motion for reconsideration of the NLRCs order reducing
the amount of the bond. Because of the appellant
employers failure to post the bond, the NLRC dismissed
the appeal. Is the NLRCs ruling correct?
A. Yes, the ruling is correct. To have the bond reduced
is not a matter of right on the part of the appellant but
lies within the sound discretion of the NLRC upon
showing of meritorious grounds. After the NLRC had
exercised its discretion in fixing the bond, the appellant
should have complied with it. To file a subsequent
motion seeking another reconsideration of the already
reduced amount of the bond is to request for an
extension of time to perfect an appeal which is
prohibited. (MERS Shoes Manufacturing, Inc. v.
NLRC, 286 SCRA 647, February 27, 1998)

Q. Juana is a worker in Del Monte Phil., Inc.. The

company rules provide for an Absence Without
Permission (AWOP) Policy. If the worker intends to be
absent from work, he should first file an application for
leave and wait for its approval before going on leave.
The first offense is punishable by oral reprimand;
2nd offense written reprimand; 3rdoffense 1-7 days
suspension; 4th offense 8-15 days suspension;
5th offense 16-30 days suspension; and 6 th offense
dismissal. From 1992-1994, Juana incurred 57 AWOP.
Without initially penalizing Juana for her past AWOP, the
company dismissed her from service in 1994.
(a) Is the dismissal valid?
(b) Can Juana be considered to have abandoned her job
due to her intermittent absences without permission?
A. (a) No, the dismissal is not valid. The rule is that an
employers power to discipline its workers may not be
exercised in an arbitrary manner as to erode the
constitutional guarantee of security of tenure. In this
case, the company rules provide for a graduation of
penalties for violation of the AWOP policy. Even granting
that Juana incurred previous AWOPs as far back as
1992, the company should have initially penallized her
with reprimand or suspension for her previous AWOPs
instead of dismissing her outright from service.
(b) No, Juana did not abandon her job. Abandonment,
as a just and valid ground for termination, means the
deliberate, unjustified refusal of an employee to resume
his employment. The burden of proof is on the
employer to show a clear and deliberate intent on the
part of the employee to discontinue employment. The
intent cannot be lightly inferred from certain equivocal
acts. For abandonment to be a valid ground for
dismissal, two elements must be proved: the intention of
an employee to abandon, coupled with an overt act from
which it may be inferred that the employee has no more
intent to resume his/her work. In this case, these
elements are not present. (Del Monte Philippines, Inc.
v. NLRC, 287 SCRA 71, March 5, 1998)
Q. Ernesto was employed by Baliwag Transit as a bus
driver. On May 20, 1983, the bus driven by Ernesto
was heavily damaged in an accident with two other
vehicles. Ernesto was grounded and was advised by
Baliwag Transit to wait for the result of the police
investigation and the actions that may be taken by the
owners of the other vehicles. Ernesto paitiently
waited. Realizing that he has waited too long, Ernesto
on December 11, 1986 requested Baliwag Transit to
reinstate him. Baliwag Transit formally informed him to
look for another job because the management has
terminated his services on account of the vehicular
accident. On November 15, 1990, Ernesto filed a
complaint for illegal dismissal. The labor arbiter
dismissed the complaint on the ground that Ernestos
action is barred by prescription since it was filed more
than four years from the accrual of the cause of action
on May 20, 1983. Is Ernestos action barred by
prescription?

A. No, the action is not barred. The four year period

should not be reckoned from the time of the accident on
May 20, 1983 because Ernesto was not yet considered
terminated at that time. He was merely grounded and
advised to wait. Ernestos cause of action accrued only
in December 1986 when baliwag Transit formally
dismissed him from the service. Hence, the action filed
on November 1990 had not yet prescribed. (Mendoza v.
NLRC, 287 SCRA 51, March 5, 1998)
Q. Jose, a married man, was employed as a teacher by
Hagonoy Institute. Likewise working as a teacher for
Hagonoy Institute was Arlene, also married. In the
course of their employment, Jose and Arlene fell in love
and had a relationship. After complying with the
procedural requirements, Hagonoy terminated the
services of the couple. Is the dismissal valid?
A. Yes, the dismissal is valid. The illicit relationship
between Jose and Arlene can be considered immoral as
to constitute just cause to terminate the couple. To
constitute immorality, the circumstances of each
particular case must be considered and evaluated in
light of the prevailing norms of conduct and applicable
laws. In the present case, the gravity of the charges
against the couple stem from their being married and at
the same time teachers. Teachers must adhere to the
exacting standards of morality and decency. A teacher,
both in his/her official and personal conduct, must
display exemplary behavior. He/she must freely and
willingly accept restrictions on his/her conduct that might
be viewed irksome by ordinary citizens. Teachers must
abide by a standard of personal conduct which not only
proscribes the commission of immoral acts, but also

prohibits behavior creating a suspicion of immorality

because of the harmful impression it might have on
students. (Santos v. NLRC, 287 SCRA 117, March 6,
1998)
Q. Philippine Airlines terminated the services of two flight
stewards for their alleged involvement in currency
smuggling in Hong Kong. Instead of filing an illegal
dismissal case with the Labor Arbiter, the workers filed
with the NLRC (Commission) a petition for injunction.
The NLRC issued a temporary mandatory injunction
enjoining PAL to cease an desist from enforcing its
memorandum of dismissal. The NLRC further ruled that
the filing of an illegal dismissal case with the Labor
Arbiter was not an adequate remedy for the workers. Is
the NLRCs ruling correct?
A. No, the NLRCs ruling is erroneous. The power of
the NLRC to issue an injunctive writ originates from any
labor dispute, i.e. a case between the contending
parties before the labor arbiter. In the present case,
there is no labor dispute yet between the workers and
PAL since there has yet been no illegal dismissal
complaint filed with the labor arbiter. The petition for
injunction directly filed before the NLRC is in reality an
action for illegal dismissal. The petition should have
been filed with the labor arbiter who has the original and
exclusive jurisdiction over termination disputes. The
Labor Code does not provide blanket authority to the
NLRC or any of its divisions to issue writs of injunction,
considering that the New Rules of Procedure of the
NLRC makes injunction only an ancillary remedy in
ordinary labor disputes. (PAL v. NLRC, 287 SCRA672,
March 20, 1998)