LABREV CASE DIGESTS
I. BASIC PRINCIPLES AND CONCEPTS
A. CONSTITUTIONAL PROVISIONS/BASIS
i. Art. II, Sec. 10 (Social Justice)
C.
Section 10. The State shall promote social justice in all phases of national
development.
ii. Art. II, Sec. 18 (Protection to Labor Clause)
Section 18. The State affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare.
iii. Art. III, Sec. 8 (Right to Organize Unions)
Section 8. The right of the people, including those employed in the public
and private sectors, to form unions, associations, or societies for purposes
not contrary to law shall not be abridged.
iv. Art. XIII, Sec. 3 (Protection to Labor Clause)
Section 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with law. They shall be entitled to security of
tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting their rights
and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in
settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and
the right of enterprises to reasonable returns to investments, and to
expansion and growth.
v. Art. XIII, Sec. 14 (Protection of Women)
Section 14. The State shall protect working women by providing safe and
healthful working conditions, taking into account their maternal functions,
and such facilities and opportunities that will enhance their welfare and
enable them to realize their full potential in the service of the nation.
B. CIVIL CODE
i. Art. 1700
Article 1700. The relations between capital and labor are not merely
contractual. They are so impressed with public interest that labor contracts
must yield to the common good. Therefore, such contracts are subject to
the special laws on labor unions, collective bargaining, strikes and lockouts,
closed shop, wages, working conditions, hours of labor and similar subjects.
ii. Art. 1702
Article 1702. In case of doubt, all labor legislation and all labor contracts
shall be construed in favor of the safety and decent living for the laborer.
DEFINITIONS
i. Labor Law
It is the body of statutes, rules, regulations, doctrines and principles
governing the relations, interactions or dynamics between labor and capital,
which include but not limited to their rights, obligations and liabilities.
LABOR LAW - The law governing the rights and duties of the employer and
employees (1) with respect to the terms and conditions of employment and
(2) with respect to labor disputes arising from collective bargaining
respecting such terms and conditions.
ii. Labor Standards
Labor standards law is that part of labor law which prescribes the
minimum terms and conditions of employment which the employer is
required to grant to its employees.
As defined in the case of Maternity Childrens Hospital vs. Sec of Labor [G.R.
No. 78909. June 30,1989], Labor Standards refers to the minimum
requirements prescribed by existing laws, rules and regulations relating to
wages, hours of work, cost-of-living allowance, and other monetary and
welfare benefits, including occupational safety, and health standards.
These are laws which set out the minimum terms, conditions and benefits of
employment that the employers must provide or comply with and to which
employees are entitled as a matter of legal right. Labor standards, as
defined more specially by jurisprudence, are the minimum requirements
prescribed by existing laws, rules and regulations relating to wages, hours of
work, cost of living allowance, and other monetary and welfare benefits,
including occupational, safety and health standards (Maternity Children's
Hospital vs. Secretary of Labor, G.R. No. 78909, 30 June 1989).
iii. Labor Relations
Labor relations law is that part of labor law (Book V of the Labor Code)
which deals with unionism, collective bargaining, grievance machinery,
voluntary arbitration, strike, picketing and lockout.
Labor Relations refers to the law which seeks to stabilize the relation
between employers and employees, to forestall and thresh out their
differences through the encouragement of collective bargaining and the
settlement of labor disputes through conciliation, mediation and arbitration.
These are the body of laws, which have for its purpose, the harmonization of
the relationship between labor and management, through institutional
mechanism, whether individually or collective, by means of compulsory or
voluntary arbitration, conciliation and mediation. The end objective of labor
law, is the attainment of industrial peace in company level in particular and
in the industrial front in general.
iv. Social Legislation/Welfare Laws
1
LABREV CASE DIGESTS
These refer to the special laws and statutes impressed with public interest,
the enactment of which by the legislature is geared to flesh-out the
Constitution's social justice provisions, their intendment being the welfare of
society as a whole and the working class in particular.
Social Legislation comprises the general laws that are supposed to protect the welfare of the
public in general. Part of this would be the Social Security Law, the Employees Compensation
Commission and the revised GSIS Act. The Agrarian Reforms Law is also included. The basis of all
these enactments and legislations is SOCIAL JUSTICE.
Art. 223. Jurisdiction of the Labor Arbiters and the Commission.
A. Except as otherwise provided under this Code, the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of
the case by the parties for decision without extension, even in the absence of stenographic
notes, the following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding five
thousand pesos (P5,000.00) regardless of whether accompanied with a claim for
reinstatement.
B. The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
Arbiters.
C. Cases arising from the interpretation or implementation of collective bargaining agreements
and those arising from the interpretation or enforcement of company personnel policies shall be
disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary
arbitration as may be provided in said agreements.
Article 288. Termination by Employer
An employer an terminate an employment for any of the following causes
a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representatives in connection with his work;
b) Gross and habitual neglect by the employee of his duties;
c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;
d) Commission of a crime or offense by the employee against the person of his employer
or any immediate member of his family or his duly authorized representatives; and
e) Other causes analogous to the foregoing.
Article 289. Closure of Establishment and Reduction of Personnel
The employer may also terminate the employment of any employee due to the
installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or
cessation of operation of the establishment or undertaking unless the closing is for the purpose
of circumventing the provisions of this Title, by serving a written notice on the workers and the
Ministry of Labor and Employment at least one (1) month before the intended date thereof. In
case of termination due to installation of labor saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month
pay or to at least one (1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in case of closing or cessation of operation of the
establishment or undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for
every year of service, whichever is higher. A fraction of at least six (6) months shall be
considered as one (1) whole year.
Article 290. Disease as Ground for Termination
An employer may terminate the services of an employee who has been found to be
suffering from any disease and whose continued employment is prohibited by law or prejudicial
to his health as well as to the health of his co-employees: Provided, That he is paid separation
pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year
of service, whichever is greater, a fraction of at least 6 months shall be considered as one whole
year.
Article 291. Termination by Employee
(a) An employee may terminate without just cause the employee-employer relationship by
serving a written notice on the employer at least in month in advance. The employer upon whom
no such notice was served may hold the employee liable for damages.
(b) An employee may put an end to the relationship without serving any notice on the employer
for any of the following just causes:
1. Serious insult by the employer or his representative on the honor and person of the
employee;
2. Inhuman and unbearable treatment accorded the employee by the employer or his
representative;
3. Commission of a crime or offense by the employer of his representative against the
person of the employee or any of the immediate members of his family; and
4. Other causes analogous to any of the foregoing.
CASES
CALALANG VS WILLIAMS
2
LABREV CASE DIGESTS
FACTS: Maximo Calalang brought a Petition for a writ of Prohibition against the respondents
alleging that the National Traffic Commission, in its resolution, recommend to the Director and
Secretary of Public Works that the animal-drawn vehicles be prohibited from passing along the
Rosario Street extending from Plaza Calderon dela Barca to Dasmarinas St from 7:30am
12:30pm and from 1:30PM 5:30PM and along Rizal Avenue crossing to Antipolo St to Echague
St from 7AM 11PM from a period of 1 YEAR.
The Chairman of NTC recommended to the Director with the approval of the Secretary
to promulgate rules and regulations to regulate and control the use and traffic on national roads.
The indorsement was later on approved.
Calalangs Contention: As a consequence of the enforcement, all animal-drawn vehicles are
not allowed to pass and pick up passengers in the places above-mentioned to the detriment not
only of their owners but of the riding public as well.
The petitioner finally avers that the rules and regulations complained of infringe upon the
constitutional precept regarding the promotion of social justice to insure the well-being and
economic security of all the people.
ISSUE: WON the rules and regulations infringe upon the constitutional precept regarding the
promotion of social justice to insure the well-being and economic security of all the people.
HELD: NO!
The promotion of social justice, however, is to be achieved not through a mistaken
sympathy towards any given group.
Social justice is "neither communism, nor despotism, nor atomism, nor
anarchy," but the humanization of laws and the equalization of social and economic
forces by the State so that justice in its rational and objectively secular conception
may at least be approximated. Social justice means the promotion of the welfare of
all the people, the adoption by the Government of measures calculated to insure
economic stability of all the competent elements of society, through the maintenance
of a proper economic and social equilibrium in the interrelations of the members of
the community, constitutionally, through the adoption of measures legally justifiable,
or extra-constitutionally, through the exercise of powers underlying the existence of
all governments on the time-honored principle of salus populi est suprema lex.
Social justice, therefore, must be founded on the recognition of the necessity of interdependence
among divers and diverse units of a society and of the protection that should be equally and
evenly extended to all groups as a combined force in our social and economic life, consistent
with the fundamental and paramount objective of the state of promoting the health, comfort,
and quiet of all persons, and of bringing about "the greatest good to the greatest number."
PASEI vs DRILON
FACTS: PASEI is a firm primarily engaged in the recruitment of Filipino workers, male and
female, for overseas placement. PASEI challenges the constitutional validity of DO 1 entitled
GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO
DOMESTIC AND HOUSEHOLD WORKERS.
PASEIs Contention: The measure is assailed for "discrimination against males or
females;" that it "does not apply to all Filipino workers but only to domestic helpers and females
with similar skills;" and that it is violative of the right to travel.
OSG: Invokes Valid exercise of Police Power.
ISSUE:WON the DO is valid under the Constitution.
HELD: YES!
The concept of police power is well-established in this jurisdiction. It has been defined
as the "state authority to enact legislation that may interfere with personal liberty or property in
order to promote the general welfare." As defined, it consists of (1) an imposition of restraint
upon liberty or property, (2) in order to foster the common good. It is not capable of an exact
definition but has been, purposely, veiled in general terms to underscore its all-comprehensive
embrace.
The petitioner has shown no satisfactory reason why the contested measure should be
nullified. There is no question that Department Order No. 1 applies only to "female contract
workers," 14 but it does not thereby make an undue discrimination between the sexes. It is well-
settled that "equality before the law" under the Constitution 15 does not import a perfect Identity
of rights among all men and women. It admits of classifications, provided that (1) such
classifications rest on substantial distinctions; (2) they are germane to the purposes of the law;
(3) they are not confined to existing conditions; and (4) they apply equally to all members of the
same class. 16
The Court is satisfied that the classification made-the preference for female workers rests on
substantial distinctions.
As a matter of judicial notice, the Court is well aware of the unhappy plight that has befallen our
female labor force abroad, especially domestic servants, amid exploitative working conditions
marked by, in not a few cases, physical and personal abuse. The sordid tales of maltreatment
suffered by migrant Filipina workers, even rape and various forms of torture, confirmed by
testimonies of returning workers, are compelling motives for urgent Government action. As
precisely the caretaker of Constitutional rights, the Court is called upon to protect victims of
exploitation. In fulfilling that duty, the Court sustains the Government's efforts.
The same, however, cannot be said of our male workers. In the first place, there is no
evidence that, except perhaps for isolated instances, our men abroad have been afflicted with
an Identical predicament. The petitioner has proffered no argument that the Government should
act similarly with respect to male workers. The Court, of course, is not impressing some male
chauvinistic notion that men are superior to women. What the Court is saying is that it was
largely a matter of evidence (that women domestic workers are being ill-treated abroad in
massive instances) and not upon some fanciful or arbitrary yardstick that the Government acted
in this case. It is evidence capable indeed of unquestionable demonstration and evidence this
Court accepts. The Court cannot, however, say the same thing as far as men are concerned.
There is simply no evidence to justify such an inference. Suffice it to state, then, that insofar as
classifications are concerned, this Court is content that distinctions are borne by the evidence.
Discrimination in this case is justified.
There is likewise no doubt that such a classification is germane to the purpose behind
the measure. Unquestionably, it is the avowed objective of Department Order No. 1 to "enhance
the protection for Filipino female overseas workers" 17 this Court has no quarrel that in the midst
of the terrible mistreatment Filipina workers have suffered abroad, a ban on deployment will be
for their own good and welfare.
3
LABREV CASE DIGESTS
The Order does not narrowly apply to existing conditions. Rather, it is intended to
apply indefinitely so long as those conditions exist. This is clear from the Order itself ("Pending
review of the administrative and legal measures, in the Philippines and in the host
countries . . ." 18), meaning to say that should the authorities arrive at a means impressed with a
greater degree of permanency, the ban shall be lifted. As a stop-gap measure, it is possessed of
a necessary malleability, depending on the circumstances of each case.
The Court finds, finally, the impugned guidelines to be applicable to all female
domestic overseas workers. That it does not apply to "all Filipina workers" 20 is not an
argument for unconstitutionality. Had the ban been given universal applicability, then
it would have been unreasonable and arbitrary. For obvious reasons, not all of them
are similarly circumstanced. What the Constitution prohibits is the singling out of a
select person or group of persons within an existing class, to the prejudice of such a
person or group or resulting in an unfair advantage to another person or group of
persons. To apply the ban, say exclusively to workers deployed by A, but not to those recruited
by B, would obviously clash with the equal protection clause of the Charter. It would be a classic
case of what Chase refers to as a law that "takes property from A and gives it to B." 21 It would
be an unlawful invasion of property rights and freedom of contract and needless to state, an
invalid act. 22 (Fernando says: "Where the classification is based on such distinctions that make a
real difference as infancy, sex, and stage of civilization of minority groups, the better rule, it
would seem, is to recognize its validity only if the young, the women, and the cultural minorities
are singled out for favorable treatment. There would be an element of unreasonableness if on
the contrary their status that calls for the law ministering to their needs is made the basis of
discriminatory legislation against them. If such be the case, it would be difficult to refute the
assertion of denial of equal protection." 23 In the case at bar, the assailed Order clearly accords
protection to certain women workers, and not the contrary.)
"Protection to labor" does not signify the promotion of employment alone.
What concerns the Constitution more paramountly is that such an employment be
above all, decent, just, and humane. It is bad enough that the country has to send its
sons and daughters to strange lands because it cannot satisfy their employment
needs at home. Under these circumstances, the Government is duty-bound to insure
that our toiling expatriates have adequate protection, personally and economically,
while away from home. In this case, the Government has evidence, an evidence the
petitioner cannot seriously dispute, of the lack or inadequacy of such protection, and
as part of its duty, it has precisely ordered an indefinite ban on deployment.
C. ALCANTARA & SONS VS CA
FACTS: C. Alcantara & Sons, Inc., (the Company) is a domestic corporation engaged in the
manufacture and processing of plywood. Nagkahiusang Mamumuo sa Alsons-SPFL (the Union) is
the exclusive bargaining agent of the Companys rank and file employees. The Company and the
Union entered into a Collective Bargaining Agreement (CBA) that bound them to hold no strike
and no lockout in the course of its life. At some point the parties began negotiating the economic
provisions of their CBA but this ended in a deadlock, prompting the Union to file a notice of
strike. After efforts at conciliation by the Department of Labor and Employment (DOLE) failed,
the Union conducted a strike vote that resulted in an overwhelming majority of its members
favoring it. The Union reported the strike vote to the DOLE and, after the observance of the
mandatory cooling-off period, went on strike.
The Company, on the other hand, filed a petition with the Regional Arbitration Board to declare
the Unions strike illegal, 5 citing its violation of the no strike, no lockout, provision of their CBA.
LA: Illegal for being violative of the CBA provision. NLRC: affirmed the decision of LA.
ISSUE: WON the waiver of Strike and Lockout is contrary to the laws or Constitution.
HELD: NO!
A strike may be regarded as invalid although the labor union has complied with the
strict requirements for staging one as provided in Article 263 of the Labor Code when the same
is held contrary to an existing agreement, such as a no strike clause or conclusive arbitration
clause.19 Here, the CBA between the parties contained a "no strike, no lockout" provision that
enjoined both the Union and the Company from resorting to the use of economic weapons
available to them under the law and to instead take recourse to voluntary arbitration in settling
their disputes.
No law or public policy prohibits the Union and the Company from mutually waiving
the strike and lockout maces available to them to give way to voluntary arbitration. Indeed, no
less than the 1987 Constitution recognizes in Section 3, Article XIII, preferential use of voluntary
means to settle disputes. Thus
The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.
The Court finds no compelling reason to depart from the findings of the Labor Arbiter,
the NLRC, and the CA regarding the illegality of the strike. Social justice is not one-sided. It
cannot be used as a badge for not complying with a lawful agreement.
ST. MARY ACADEMY VS PALACIO
FACTS: ST Mary hired CALIBOD, LAQUIO, SANTANDER, SAILE AND MONTEDERAMOS as
classroom teachers and PALACIO as guidance counsellor. In letters sent to respondents,
petitioner informed that their re-application for school year 2000-2001 could not be accepted
because they failed to pass the LET; that they could not continue practicing because of DECS
MEMO which requires the incumbent teachers to register as professional teachers under
Philippine Teachers Professionalization Act of 1994.
They filed a complaint contesting their termination as highly irregular and premature.
Argued that although they are non-board passers, they entitled to security of tenure and could
not be simply trampled upon their failure to register with PRC.
Petitioner on the other hand contend that they were informed of their obligation to
comply with the mandate of DECS fixing the deadline to register on Sept. 19, 2000 so it decided
to terminate their services as early as March 31, 2000. Petitioner insists that it has the right to
terminate respondents services as early as March 2000 without waiting for the September 19,
2000 deadline set by law for respondents to register as professional teachers due to the need to
fix the school organization prior to the applicable school year. Petitioner justifies respondents
termination by advancing that it would be difficult to hire licensed teachers in the middle of the
school year as respondents replacements. Also, the termination of respondents in the middle of
the school year might result in compromising the education of the students as well as the school
operation. Petitioner further argues that it cannot hire respondents for the period covering only
June to September as it would contravene the DECSs policy requiring written contracts of at
least one years duration for teachers.
LA: illegally dismissed. Termination was clearly prior to the September 19, 2000
deadline.
NLRC: affirmed.
4
LABREV CASE DIGESTS
CA: affirmed. employees. As correctly observed by the CA, petitioner should have earlier drawn a contingency
plan in the event there is need to terminate respondents services in the middle of the school
year. Incidentally, petitioner did not dispute that it hired and retained other teachers who do not
ISSUE: WON the termination was illegal. likewise possess the qualification and eligibility and even allowed them to teach during the
school year 2000-2001. This indicates petitioners ulterior motive in hastily dismissing
respondents.
HELD: YES!

It is incumbent upon this Court to afford full protection to labor. Thus, while we take
The dismissal of Teresita Palacio, Calibod, Laquio, Santander, and Montederamos was premature
cognizance of the employers right to protect its interest, the same should be exercised in a
and defeated their right to security of tenure. Sailes dismissal has legal basis for lack of the
manner which does not infringe on the workers right to security of tenure. "Under
required qualification needed for continued practice of teaching.
the policy of social justice, the law bends over backward to accommodate the
interests of the working class on the humane justification that those with less
Pursuant to RA 7836, the PRC formulated certain rules and regulations relative to the registration privilege in life should have more in law." 29
of teachers and their continued practice of the teaching profession. Specific periods and
deadlines were fixed within which incumbent teachers must register as professional teachers in
To reiterate, this Court will not hesitate to defend respondents right to security of
consonance with the essential purpose of the law in promoting good quality education by
tenure. The premature dismissal from the service of respondents Palacio, Calibod,
ensuring that those who practice the teaching profession are duly licensed and are registered as
Laquio, Santander and Montederamos is unwarranted. However, we take exception to the
professional teachers.
case of respondent Saile who, as alleged by petitioner, was not qualified to take the LET as she
only had three out of the minimum 10 required educational units to be admitted to take the LET
Under DECS Memorandum No. 10, S. 1998, the Board for Professional Teachers (BPT), created pursuant to Section 15 of RA 7836, 30 which fact respondent Saile did not refute. Not being
under the general supervision and administrative control of the PRC, was organized on qualified to take the examination to become a duly licensed professional teacher, petitioner
September 20, 1995 so that, in the implementation of Sections 26, 27 and 31 of RA 7836, cannot be compelled to retain her services as she cannot possibly obtain the needed
incumbent teachers as of December 16, 1994 have until September 19, 1997 to register as prerequisite to allow her to continue practicing the teaching profession. Thus, we find her
professional teachers. The Memorandum further stated that a Memorandum of Agreement termination just and legal.
(MOA) was subsequently entered into by the PRC, Civil Service Commission (CSC) and DECS to
further allow those teachers who failed to register by September 19, 1997 to continue their
MATERNITY CHILDRENS HOSPITAL VS SEC OF LABOR (mahaba at medyo magulo,
service and register. BPT Resolution No. 600, s. 1997 was thereafter passed to provide the
basta kahit daw ung date ng filing complaint ay hindi covered sa EO 111 kung saan
guidelines23 to govern teacher registration beyond September 19, 1997. Consequently, the
may jurisdiction ang Regional Directors to award money claims under Art 128,
deadline was moved to September 19, 2000.
nonetheless, sa mga previous PDs may power daw ang Regional Directors to award
money claims so long na may EE relationship. Basta parang ganyan :)
Pursuant to the aforestated law, resolution and memorandum, effective September 20, 2000,
only holders of valid certificates of registration, valid professional licenses and valid
FACTS: Petitioner is a semi-governmental hospital. It has 41 employees. Aside from salary and
special/temporary permits can engage in teaching in both public and private schools. 24 Clearly,
living allowances, the employees are given food, but the amount spent thereof is deducted from
respondents, in the case at bar, had until September 19, 2000 to comply with the
their respective salaries.
mandatory requirement to register as professional teachers. As respondents are
categorized as those not qualified to register without examination, the law requires
them to register by taking and passing the licensure examination. 10 employees of the petitioner employed in different capacities/positions filed a complaint with
the Office of the Regional Director of Labor and Employment for underpayment of their salaries
and ECOLAS.
Petitioners contentions are not tenable. First, even if respondents contracts stipulate
for a period of one year in compliance with DECSs directive, such stipulation could not be given
effect for being violative of the law. Provisions in a contract must be read in conjunction with The Director ordered the inspection and based on the findings, the Regional Director issued an
statutory and administrative regulations. This finds basis on the principle "that an existing law Order directing payment of 723,888.58 representing underpayment of wages and ECOLAS to all
enters into and forms part of a valid contract without the need for the parties expressly making petitioners employees.
reference to it." 27 Settled is the rule that stipulations made upon the convenience of the
parties are valid only if they are not contrary to law. 28 Hence, mere reliance on the
policy of DECS requiring yearly contracts for teachers should not prevent petitioner Petitioner appealed and questioned the authority of the Regional Director to award salary
from retaining the services of respondents until and unless the law provides for differentials and ECOLAS to private respondents alleging that the original and exclusive
cause for respondents dismissal. jurisdiction over money claims should be properly lodged to LA.

Petitioners intention and desire not to put the students education and school ISSUE: WON the Regional Director had jurisdiction over the case and if so, the extent of
operation in jeopardy is neither a decisive consideration for respondents termination prior to the coverage of any award that should be forthcoming, arising from his visitorial and enforcement
deadline set by law. Again, by setting a deadline for registration as professional teachers, the powers under Art 128 of the Labor Code.
law has allowed incumbent teachers to practice their teaching profession until
September 19, 2000, despite being unregistered and unlicensed. The prejudice that
respondents retention would cause to the schools operation is only trivial if not speculative as HELD: YES!
compared to the consequences of respondents unemployment. Because of petitioners
predicament, it should have adopted measures to protect the interest of its teachers as regular

5
LABREV CASE DIGESTS
This is a labor standards case, and is governed by Art. 128-b of the Labor Code, as amended by 2. The following cases are under the exclusive original
E.O. No. 111. Labor standards refer to the minimum requirements prescribed by existing laws, jurisdiction of the Conciliation Section of the Regional
rules, and regulations relating to wages, hours of work, cost of living allowance and other Office:
monetary and welfare benefits, including occupational, safety, and health standards (Section 7,
Rule I, Rules on the Disposition of Labor Standards Cases in the Regional Office, dated
September 16, 1987). 1 Under the present rules, a Regional Director exercises both visitorial and a) Labor standards cases where
enforcement power over labor standards cases, and is therefore empowered to adjudicate employer-employee
money claims, provided there still exists an employer-employee relationship, and the findings of relations no longer exist;
the regional office is not contested by the employer concerned.
xxx xxx xxx
Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional Director's
authority over money claims was unclear. The complaint in the present case was filed on May
6. The following cases are certifiable to the Labor
23, 1986 when E.O. No. 111 was not yet in effect, and the prevailing view was that stated in the Arbiters:
case of Antonio Ong, Sr. vs. Henry M. Parel, et al., G.R. No. 76710, dated December 21, 1987,
thus:
a) Cases not settled by the
Conciliation Section of the Regional
. . . the Regional Director, in the exercise of his visitorial and enforcement
Office, namely:
powers under Article 128 of the Labor Code, has no authority to award
money claims, properly falling within the jurisdiction of the labor
arbiter. . . . (dati daw ay ito, cannot award money claims, pero..) 1) labor standard cases where
employer-employee relations no
longer exist;
We believe, however, that even in the absence of E. O. No. 111, Regional Directors already
had enforcement powers over money claims, effective under P.D. No. 850, issued on
December 16, 1975, which transferred labor standards cases from the arbitration system to xxx xxx xxx
the enforcement system.

Under the then Labor Code therefore (PD 442 as amended by PD 570-a, as further amended by
PD 850), there were three adjudicatory units: The Regional Director, the Bureau of Labor
Relations and the Labor Arbiter. It became necessary to clarify and consolidate all governing
provisions on jurisdiction into one document. 2 On April 23, 1976, MOLE Policy Instructions No. 6
was issued, and provides in part (on labor standards cases) as follows:
(Emphasis supplied)
MOLE Policy Instructions No. 7 (undated) was likewise subsequently issued, enunciating the
rationale for, and the scope of, the enforcement power of the Regional Director, the first and
second paragraphs of which provide as follows:

POLICY INSTRUCTIONS NO. 6 POLICY INSTRUCTIONS NO. 7

TO: All Concerned TO: All Regional Directors

SUBJECT: DISTRIBUTION OF JURISDICTION OVER LABOR CASES SUBJECT: LABOR STANDARDS CASES

xxx xxx xxx
1. The following cases are under the exclusive original
jurisdiction of the Regional Director.
a) Labor standards cases arising
from violations of labor standard
laws discovered in the course of
inspection or complaints where
employer-employee relations still
exist;
xxx xxx xxx
Under PD 850, labor standards cases have been taken from the arbitration
system and placed under the enforcement system, except where a)
questions of law are involved as determined by the Regional Director, b) the
amount involved exceeds P100,000.00 or over 40% of the equity of the
employer, whichever is lower, c) the case requires evidentiary matters not
disclosed or verified in the normal course of inspection, or d) there is no
more employer-employee relationship.
The purpose is clear: to assure the worker the rights and benefits
due to him under labor standards laws without having to go
through arbitration. The worker need not litigate to get what
legally belongs to him. The whole enforcement machinery of the
Department of Labor exists to insure its expeditious delivery to him free of
charge. (Emphasis supplied)

6
LABREV CASE DIGESTS
Under the foregoing, a complaining employee who was denied his rights and benefits due him
under labor standards law need not litigate. The Regional Director, by virtue of his enforcement
power, assured "expeditious delivery to him of his rights and benefits free of charge", provided
of course, he was still in the employ of the firm.
Viewed in the light of PD 850 and read in coordination with MOLE Policy Instructions Nos. 6, 7
and 37, it is clear that it has always been the intention of our labor authorities to provide our
workers immediate access (when still feasible, as where an employer-employee relationship still
exists) to their rights and benefits, without being inconvenienced by arbitration/litigation
processes that prove to be not only nerve-wracking, but financially burdensome in the long run.
Note further the second paragraph of Policy Instructions No. 7 indicating that the transfer of
labor standards cases from the arbitration system to the enforcement system is
. . to assure the workers the rights and benefits due to him under labor
standard laws, without having to go through arbitration. . .
so that
. . the workers would not litigate to get what legally belongs to him. ..
ensuring delivery . . free of charge.
Social justice legislation, to be truly meaningful and rewarding to our workers, must not be
hampered in its application by long-winded arbitration and litigation. Rights must be asserted
and benefits received with the least inconvenience. Labor laws are meant to promote, not
defeat, social justice.
The Regional Director correctly applied the award with respect to those employees
who signed the complaint, as well as those who did not sign the complaint, but were still
connected with the hospital at the time the complaint was filed (See Order, p. 33 dated August
4, 1986 of the Regional Director, Pedrito de Susi, p. 33, Rollo).
The enforcement power of the Regional Director cannot legally be upheld in cases of
separated employees. Article 129 of the Labor Code, cited by petitioner (p. 54, Rollo) is not
applicable as said article is in aid of the enforcement power of the Regional Director; hence, not
applicable where the employee seeking to be paid underpayment of wages is already
separated from the service. His claim is purely a money claim that has to be the subject of
arbitration proceedings and therefore within the original and exclusive jurisdiction of the Labor
Arbiter.
PAL VS SANTOS
FACTS: Individual respondents were all port stewards and their duties and responsibilities,
among others, are preparing meal orders and checklist, setting up standards equipment in
accordance with the requirements of the type of service for each flight; skiing, binning and
inventorying of Commisary supplies and equipment.
On several occasions, several deductions were made from their salary. The deductions
represented losses of inventoried items charged to them for mishandling of company properties.
Private respondents filed a formal grievance. The topics which the union wanted to be
discussed in the said grievance were the illegal/questionable salary deductions and inventory of
bonded goods and merchandise being done by catering service personnel which they believed
should not be their duty. However, the grievance officer was on vacation leave. As there was no
reply made and considering that petitioner had only five days to resolve the grievance as
provided in CBA, said grievance as believed by them was deemed resolved in their favor.
When Abad (grievance officer) returned, he scheduled a meeting and resolved the
issue by denying the petition of respondents and ordered the validity of reduction to only 1/10 of
the selling price.
As for the failure of the respondents to conduct a ramp inventory, the penalty of
suspension was imposed against them. After the penalty of suspension was meted down, PALEA
(union) asked for the lifting of the said penalty. Petitioner stood pat on the validity of the
suspension. Hence respondents filed with the LA a complaint for illegal suspension. LA dismissed
the petition while the NLRC reversed and ordered that the suspension was illegal.
ISSUE: WON NLRC acted with GAD in rendering the aforementioned decision.
HELD: NO!
It is a fact that the sympathy of the Court is on the side of the laboring classes, not only because
the Constitution imposes such sympathy, but because of the one-sided relation between labor
and capital. 9 The constitutional mandate for the promotion of labor is as explicit as it is
demanding. The purpose is to place the workingman on an equal plane with management
with all its power and influence in negotiating for the advancement of his interests and the
defense of his rights. 10 Under the policy of social justice, the law bends over backward to
accommodate the interests of the working class on the humane justification that those with less
privileges in life should have more privileges in law. 11
It is clear that the grievance was filed with Mr. Abad's secretary during his absence. 12 Under
Section 2 of the CBA aforequoted, the division head shall act on the grievance within five (5)
days from the date of presentation thereof, otherwise "the grievance must be resolved in favor
of the aggrieved party." It is not disputed that the grievants knew that division head Reynaldo
Abad was then "on leave" when they filed their grievance which was received by Abad's
secretary. 13 This knowledge, however, should not prevent the application of the CBA.
Contrary to petitioner's submission, 15 the grievance of employees is not a matter which requires
the personal act of Mr. Abad and thus could not be delegated. Petitioner could at least have
assigned an officer-in-charge to look into the grievance and possibly make his recommendation
to Mr. Abad.
As respondent NLRC has pointed out, Abad's failure to act on the matter may have been due to
petitioner's inadvertence, 16 but it is clearly too much of an injustice if the employees be made to
bear the dire effects thereof. Much as the latter were willing to discuss their grievance with their
employer, the latter closed the door to this possibility by not assigning someone else to look into
the matter during Abad's absence. Thus, private respondents should not be faulted for believing
that the effects of the CBA in their favor had already stepped into the controversy.
If the Court were to follow petitioner's line of reasoning, it would be easy for management to
delay the resolution of labor problems, the complaints of the workers in particular, and hide
under the cloak of its officers being "on leave" to avoid being caught by the 5-day deadline
under the CBA. If this should be allowed, the workingmen will suffer great injustice for they will
necessarily be at the mercy of their employer. That could not have been the intendment of the
pertinent provision of the CBA, much less the benevolent policy underlying our labor laws.
7
LABREV CASE DIGESTS
SERRANO VS GALLANT
FACTS: Antonio Serrano worked as Second Officer for respondent recruitment agency and its
foreign principal, Marlow Navigation with a fixed term of 12 months. At the time of his
repatriation, he had served only 2 months and 7 days of his contract, leaving an expired portion
of 9 months and 23 days. Petitioners dismissal was declared illegal and he was awarded, under
the prevailing rule, US$ 8,770.00 representing the salary for 3 months of the unexpired portion
of the contract in accordance with the provisions RA 8042. Petitioner claims that he is entitled to
all his salaries for the unexpired portion of his contract and not just the 3 months of the
unexpired portion.
He further questioned the constitutionality of the said clause of Sec 10, that:
1. It unduly impairs the freedom of OFWS to negotiate in their employment contracts a
determinate employment period and a fixed salary package.
2. It impinges on the equal protection clause, for it treats OFWS differently from local
Fil workers by putting a cap on the amount of lump sum salary to which OFWS are entitled in
case of illegal dismissal, while setting no limit to the same monetary award for local workers
when their dismissal is declared illegal;
3. The disparate treatment is not reasonable as there is no substantial distinction
between the two groups; and that it defeats Section 18, Article II of the Constitution which
guarantees the protection of the rights and welfare of all Filipino workers, whether deployed
locally or overseas.
ISSUE: WON petitioner is entitled to all his salaries for the unexpired portion of his contract and
not just the 3 months of the unexpired portion.
HELD: YES!
1. The subject clause has a discriminatory intent against, and an invidious impact on, OFWS at
three levels:
First, OFWS with the employment contracts of less than one year vis--vis OFWS with
employment contracts of one year or more;
Second, among OFWS with employment contracts of more than one year; and
Third, OFWS vis--vis local workers with fixed-period employment.
the illegally dismissed OFW with employment contract of less than one year will be paid all his
salaried for the unexpired portion thereof; while the OFW with employment contract of at least
one year or more will only be awarded whichever is less between three months salary for every
year of the unexpired term or the salary for the unexpired portion thereof.
On the Second, the subject clause creates a sub-layer of discrimination among OFWS whose
contract periods are more than 1 year: those who are illegally dismissed with less than 1 year
left in their contracts shall be entitled to their salaries for the entire unexpired portion thereof,
while those who are illegally dismissed with on eyear or more remaining in their contracts shall
be covered by the subject clause, and their monetary benefits limited to their salaries for three
months only.
On the third, prior to RA 8042, OFWS and local workers with the fixed-term employment who
were illegally discharged were treated alike in terms of the computation of their money claims;
they were uniformly entitled to their salaries for the unexpired portion of their contracts. But
with the enactment of RA 8042, illegally dismissed OFWS with an unexpired portion of 1 year or
more in their employment contract have since been differently treated in that their money
claims are subject to 3 month cap, whereas no such limitation is imposed on local workers with
fixed term employment.
2. There being a suspect classification involving a vulnerable sector protected by the
Constitution, the Court, after subjecting the classification to a strict judicial scrutiny, has
determined that there is no compelling state interest that the subject clause may possibly serve.
In fine, the government has failed to discharge its burden of proving of the existence of a
compelling state interest that would justify the perpetuation of the discrimination against OFWS
under the subject clause. Thus, the subject clause is violative of the right of petitioner and other
OFWS to equal protection.
ANG TIBAY VS CIR
FACTS: Teodoro Toribio owns and operates Ang Tibay, a leather company which supplies the
Philippine Army. Due to the alleged shortage of leather, Toribio caused the lay off of a number of
his employees.
However, the National Labor Union questioned the validity of said lay off as it averred
that the said employees laid off were members of NLU while no members of the rival union were
laid off.
The case reached the CIR where Toribio and NWB won. The Case was elevated to SC
and a motion for new trial was raised by NLU. Toribio filed a motion opposing the said motion.
ISSUE: What is the function of CIR as a special court?
HELD: The Court of Industrial Relations is a special court whose functions are specifically stated
in the law of its creation (Commonwealth Act No. 103). It is more an administrative than a part of
the integrated judicial system of the nation.
It is not intended to be a mere receptive organ of the Government. Unlike a court of
justice which is essentially passive, acting only when its jurisdiction is invoked and deciding only
cases that are presented to it by the parties litigant, the function of the Court of Industrial
Relations, as will appear from perusal of its organic law, is more active, affirmative and dynamic.
It not only exercises judicial or quasi-judicial functions in the determination of disputes
between employers and employees but its functions in the determination of disputes between
employers and employees but its functions are far more comprehensive and expensive.
It shall not be restricted to the specific relief claimed or demands made by the parties
to the industrial or agricultural dispute, but may include in the award, order or decision any
matter or determination which may be deemed necessary or expedient for the purpose of
settling the dispute or of preventing further industrial or agricultural disputes. (section 13, ibid.)
And in the light of this legislative policy, appeals to this Court have been especially regulated by
the rules recently promulgated by the rules recently promulgated by this Court to carry into the
effect the avowed legislative purpose. The fact, however, that the Court of Industrial Relations
may be said to be free from the rigidity of certain procedural requirements does not mean that it
can, in justifiable cases before it, entirely ignore or disregard the fundamental and essential
requirements of due process in trials and investigations of an administrative character. There are
8
LABREV CASE DIGESTS
primary rights which must be respected even in proceedings of this character: (memorize
natin para sure)
1. The right to a hearing, which includes the right to represent ones cause and submit
evidence in support thereof;
2. The tribunal must consider the evidence presented;
3. The decision must have something to support itself;
4. The evidence must be substantial;
5. The decision must be based on the evidence presented at the hearing; or at least
contained in the record and disclosed to the parties affected;
6. The tribunal or body or any of its judges must act on its own independent
consideration of the law and facts of the controversy, and not simply accept the views
of a subordinate;
7. The Board or body should, in all controversial questions, render its decision in such
manner that the parties to the proceeding can know the various issue involved, and
the reason for the decision rendered.
The failure to grasp the fundamental issue involved is not entirely attributable to the
parties adversely affected by the result. Accordingly, the motion for a new trial should be and
the same is hereby granted, and the entire record of this case shall be remanded to the Court of
Industrial Relations, with instruction that it reopen the case, receive all such evidence as may be
relevant and otherwise proceed in accordance with the requirements set forth hereinabove.
FEDERICO LEDESMA VS NLRC
FACTS: Petitioner was a bus driver of private respondent on probationary basis and he was
required to report at private respondents training site in Dasma Cavite under the supervision of
De Leon.
Petitioner filed a complaint against De Leon for allegedly abusing his authority and accused De
Leon of immoral conduct allegedly carried out within the premises.
After few days, De Leon filed a written report against petitioner citing his suspected drug use. A
copy of notice was served to Petitioner and requiring him to explain within 24 hours why no
disciplinary action should be imposed on him.
Petitioner filed a complaint for illegal dismissal before the LA. LA ruled that the dismissal was
illegal but denied his prayer for reinstatement. Both parties questioned the Labor Arbiters
Decision before the NLRC.
Petitioner -> assailed the portion of the Labor Arbiters Decision denying his prayer for
reinstatement, and arguing that the doctrine of strained relations is applied only to confidential
employees and his position as a driver was not covered by such prohibition.
On the other hand, private respondent controverted the Labor Arbiters finding that
petitioner was illegally dismissed from employment, and insisted that petitioner was
never dismissed from his job but failed to report to work after he was asked to explain
regarding his suspected drug use.
NLRC granted the appeal raised by both parties and reversed the Labor Arbiters Decision.
ISSUE: WON petitioner was illegally dismissed from employment.
HELD: NO!
Well-entrenched is the principle that in order to establish a case before judicial and quasi-
administrative bodies, it is necessary that allegations must be supported by substantial
evidence.28 Substantial evidence is more than a mere scintilla. It means such relevant evidence
as a reasonable mind might accept as adequate to support a conclusion. 29
In the present case, there is hardly any evidence on record so as to meet the quantum of
evidence required, i.e., substantial evidence. Petitioners claim of illegal dismissal is supported
by no other than his own bare, uncorroborated and, thus, self-serving allegations, which are
also incoherent, inconsistent and contradictory.
Petitioner was only being given the option to either resign and receive his separation pay or not
to resign but face the possible disciplinary charges against him. The final decision, therefore,
whether to voluntarily resign or to continue working still, ultimately rests with the petitioner. In
fact, by petitoners own admission, he requested from VP for Administration Ty more time to
think over the offer.
Moreover, the petitioner alleged that he was not allowed to enter the training site by the guard
on duty who told him that he was already banned from the premises. Subsequently, however,
petitioner admitted in his Supplemental Affidavit that he was able to return to the said site on 3
December 2000, to claim his 16-30 November 2000 salary, and again on 9 December 2000, to
receive his 13th month pay. The fact alone that he was able to return to the training site to claim
his salary and benefits raises doubt as to his purported ban from the premises.
While this Court is not unmindful of the rule that in cases of illegal dismissal, the employer bears
the burden of proof to prove that the termination was for a valid or authorized cause in the case
at bar, however, the facts and the evidence did not establish a prima facie case that the
petitioner was dismissed from employment. 31 Before the private respondent must bear the
burden of proving that the dismissal was legal, petitioner must first establish by substantial
evidence the fact of his dismissal from service. Logically, if there is no dismissal, then there can
be no question as to the legality or illegality thereof
It is true that the Constitution affords full protection to labor, and that in light of this
Constitutional mandate, we must be vigilant in striking down any attempt of the management to
exploit or oppress the working class. However, it does not mean that we are bound to
uphold the working class in every labor dispute brought before this Court for our
resolution.
The law in protecting the rights of the employees, authorizes neither oppression nor self-
destruction of the employer. It should be made clear that when the law tilts the scales of justice
in favor of labor, it is in recognition of the inherent economic inequality between labor and
management. The intent is to balance the scales of justice; to put the two parties on relatively
equal positions. There may be cases where the circumstances warrant favoring labor over the
9
LABREV CASE DIGESTS
interests of management but never should the scale be so tilted if the result is an injustice to the factual and legal grounds' were considered in relation to each other constituting substantial
employer. Justitia nemini neganda est -- justice is to be denied to none. evidence clearly convincing Us to resolve that rectal cancer is compensable.

CRISTOBAL VS ECC

FACTS: The SC rendered a decision in this case finding that Petitioner, the widow of the
deceased Fortunato Cristobal, is entitled to death benefits, reimbursement of medical, surgical
and hospital expenses, funeral expenses and attorneys fees. Fortunato was shown by clear and
convincing evidence to have contracted a rectal cancer or at least the risk of contracting the
same had been increased.

GSIS filed a motion for recon alleging that the ailment was not listed as occupational disease
thus not compensable. And granting the same is compensable, the benefits granted are not in
accordance with law.

ISSUE: WON the illness of the deceased, rectal cancer, is compensable.

HELD: YES!

The deceased died of rectal cancer on May 27, 1977. Concededly, the exact cause or etiology of
this disease is still unknown. Even respondent ECC's own medical officer, Dr. Mercia C. Abrenica,
certified that "the cause of rectal carzinoma as of any other malignancies is still unknown" (p. 9,
ECC rec.). Its cause and development are insidious, imperceptible to the naked eye, and defies
expert analysis. Therefore, whether or not the disease rectal cancer was caused or the risk of
contracting the same was increased by the decedent's working conditions remains uncertain.
This uncertainty, of course, cannot eliminate the probability that the ailment was work
connected as it had been established that the deceased was exposed to unhygienic "Forking
conditions, various chemicals and intense heat which are generally considered as predisposing
factors of cancer. At this point, there is need to reiterate that when the deceased started working
in 1964, he was free from any kind of disease.
To establish compensability of the claim under the said theory, the claimant must show proof of
work-connection. Impliedly, the degree of proof required is merely substantial evidence, which
means "such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion" (Ang Tibay vs. The Court of Industrial Relations and National Labor Union, Inc., 69
Phil. 635) or clear and convincing evidence. In this connection, it must be pointed out that the
strict rules of evidence are not applicable in claims for compensation.
Apparently, what the law merely requires is a reasonable work-connection and not a direct
causal relation. This kind of interpretation gives meaning and substance to the liberal and
compassionate spirit of the law as embodied in Article 4 of the new Labor Code which states that
"all doubts in the implementation and interpretation of the provisions of this Code, including its
implementing rules and regulations shall be resolved in favor of labor. "
In urging that the disease rectal cancer is not compensable since its nature or cause is unknown
and petitioner was not able to show proof of direct causal relation, respondents would instruct
us to ignore the above provision of law and the policy of the State of giving maximum
aid and protection to labor as We have stated earlier in the main decision. As the agents
charged by the law to implement the social justice guarantee secured by both the 1935 and
1973 Constitutions, respondents should adopt a more liberal attitude in deciding claims
for compensation especially when there is some basis in the facts for inferring a
work-connection. This should not be confused with the presumption of compensability and
theory of aggravation under the Workmen's Compensation Act. While these doctrines may have
been abandoned under the new Labor Code (the constitutionality of such abrogation may still be
challenged), it is significant that the liberality of the law, in general, still subsists. All these
PRELIMINARY TITLE
I. General Provisions (Chapter 1, Art. 1-6, LC)
PRELIMINARY TITLE
Chapter I
GENERAL PROVISIONS
Article 1. Name of Decree. This Decree shall be known as the "Labor Code of the Philippines".
Article 2. Date of effectivity. This Code shall take effect six (6) months after its promulgation.
Article 3. Declaration of basic policy. The State shall afford protection to labor, promote full
employment, ensure equal work opportunities regardless of sex, race or creed and regulate the
relations between workers and employers. The State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure, and just and humane conditions of work.
Article 4. Construction in favor of labor. All doubts in the implementation and interpretation of
the provisions of this Code, including its implementing rules and regulations, shall be resolved in
favor of labor.
Article 5. Rules and regulations. The Department of Labor and other government agencies
charged with the administration and enforcement of this Code or any of its parts shall
promulgate the necessary implementing rules and regulations. Such rules and regulations shall
become effective fifteen (15) days after announcement of their adoption in newspapers of
general circulation.
Article 6. Applicability. All rights and benefits granted to workers under this Code shall, except
as may otherwise be provided herein, apply alike to all workers, whether agricultural or non-
agricultural. (As amended by Presidential Decree No. 570-A, November 1, 1974)
A. Declaration of Basic Policy (Art. 3, LC)
i. Rights of Employees/workers (Art. XIII, Sec.3 and Art. 3, LC)
10
LABREV CASE DIGESTS
Section 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with
law. They shall be entitled to security of tenure, humane conditions of work, and a living wage.
They shall also participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and employers
and the preferential use of voluntary modes in settling disputes, including conciliation, and shall
enforce their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of
labor to its just share in the fruits of production and the right of enterprises to reasonable returns
to investments, and to expansion and growth.
Article 3. Declaration of basic policy. The State shall afford protection to labor, promote full
employment, ensure equal work opportunities regardless of sex, race or creed and regulate the
relations between workers and employers. The State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure, and just and humane conditions of work.
ii. Management Rights
CASES
YMBONG v. ABS-CBN
(management prerogatives)
FACTS: Ernesto G. Ymbong worked as drama and voice talent, spinner, scriptwriter and public
affairs program anchor at ABS-CBN Cebu in 1995.
On January 1, 1996, the ABS-CBN Head Office in Manila issued Policy No. HR-ER-016 or the
Policy on Employees Seeking Public Office. The pertinent portions read:
1. Any employee who intends to run for any public office position, must file his/her letter
of resignation, at least thirty (30) days prior to the official filing of the certificate of candidacy
either for national or local election.
xxxx
3. Further, any employee who intends to join a political group/party or even with no political
affiliation but who intends to openly and aggressively campaign for a candidate or group of
candidates (e.g. publicly speaking/endorsing candidate, recruiting campaign workers, etc.) must
file a request for leave of absence subject to managements approval. For this particular reason,
the employee should file the leave request at least thirty (30) days prior to the start of the
planned leave period.
x x x x [Emphasis and underscoring supplied.]
Because of the impending May 1998 elections and based on his immediate recollection of the
policy at that time, Dante Luzon, Assistant Station Manager of DYAB issued the following
memorandum:
TO : ALL CONCERNED
FROM : DANTE LUZON
DATE : MARCH 25, 1998
SUBJECT : AS STATED
Please be informed that per company policy, any employee/talent who wants to run for any
position in the coming election will have to file a leave of absence the moment he/she files
his/her certificate of candidacy.
The services rendered by the concerned employee/talent to this company will then be
temporarily suspended for the entire campaign/election period.
For strict compliance.
After the issuance of the March 25, 1998 Memorandum, Ymbong got in touch
with Luzon. Luzon claims that Ymbong approached him and told him that he would leave radio
for a couple of months because he will campaign for the administration ticket. It was only after
the elections that they found out that Ymbong actually ran for public office himself at the
eleventh hour. Ymbong, on the other hand, claims that in accordance with the March 25, 1998
Memorandum, he informed Luzon through a letter that he would take a few months leave of
absence from March 8, 1998 to May 18, 1998 since he was running for councilor of Lapu-Lapu
City.
As regards Patalinghug, Patalinghug approached Luzon and advised him that he will run as
councilor for Naga, Cebu. According to Luzon, he clarified to Patalinghug that he will be
considered resigned and not just on leave once he files a certificate of candidacy.
Unfortunately, they both lost in the election.
Later, Ymbong and Patalinghug both tried to come back to ABS-CBN Cebu. According to Luzon,
he informed them that they cannot work there anymore because of company policy. This was
stressed even in subsequent meetings and they were told that the company was not allowing
any exceptions. ABS-CBN, however, agreed out of pure liberality to give them a chance to wind
up their participation in the radio drama, Nagbabagang Langit, since it was rating well and to
avoid an abrupt ending. The agreed winding-up, however, dragged on for so long
prompting Luzon to issue to Ymbong the memorandum dated September 14, 1998 automatically
terminating them.
ISSUES:
1. whether Policy No. HR-ER-016 is valid
2. whether the March 25, 1998 Memorandum issued by Luzon superseded Policy No. HR-ER-016
3. whether Ymbong, by seeking an elective post, is deemed to have resigned and not dismissed
by ABS-CBN.
HELD:
1. YES. ABS-CBN had a valid justification for Policy No. HR-ER-016. Its rationale is
embodied in the policy itself, to wit:
Rationale:
ABS-CBN BROADCASTING CORPORATION strongly believes that it is to the best interest of the
company to continuously remain apolitical. While it encourages and supports its employees to
have greater political awareness and for them to exercise their right to suffrage, the company,
however, prefers to remain politically independent and unattached to any political individual or
entity.
Therefore, employees who [intend] to run for public office or accept political appointment should
resign from their positions, in order to protect the company from any public misconceptions. To
preserve its objectivity, neutrality and credibility, the company reiterates the following policy
guidelines for strict implementation.
We have consistently held that so long as a companys management prerogatives are exercised
in good faith for the advancement of the employers interest and not for the purpose of
defeating or circumventing the rights of the employees under special laws or under valid
agreements, this Court will uphold them.
In the instant case, ABS-CBN validly justified the implementation of Policy No. HR-ER-016. It is
well within its rights to ensure that it maintains its objectivity and credibility and freeing itself
from any appearance of impartiality so that the confidence of the viewing and listening public in
it will not be in any way eroded. Even as the law is solicitous of the welfare of the employees, it
must also protect the right of an employer to exercise what are clearly management
11
LABREV CASE DIGESTS
prerogatives. The free will of management to conduct its own business affairs to achieve its
purpose cannot be denied.
It is worth noting that such exercise of management prerogative has earned a stamp of approval
from no less than our Congress itself when on February 12, 2001, it enacted Republic Act No.
9006, otherwise known as the Fair Election Act. Section 6.6 thereof reads:
6.6. Any mass media columnist, commentator, announcer, reporter, on-air
correspondent or personality who is a candidate for any elective public office or is a
campaign volunteer for or employed or retained in any capacity by any candidate or
political party shall be deemed resigned, if so required by their employer, or shall
take a leave of absence from his/her work as such during the campaign
period: Provided, That any media practitioner who is an official of a political party or a
member of the campaign staff of a candidate or political party shall not use his/her
time or space to favor any candidate or political party. [Emphasis and underscoring
supplied.]
ABS-CBN, for its part, counters that the validity of policies such as Policy No. HR-ER-016 has long
been upheld by this Court which has ruled that a media company has a right to impose a policy
providing that employees who file their certificates of candidacy in any election shall be
considered resigned. Moreover, case law has upheld the validity of the exercise of management
prerogatives even if they appear to limit the rights of employees as long as there is no showing
that management prerogatives were exercised in a manner contrary to law. ABS-CBN contends
that being the largest media and entertainment company in the country, its reputation stems
not only from its ability to deliver quality entertainment programs but also because of neutrality
and impartiality in delivering news.
ABS-CBN further argues that nothing in the company policy prohibits its employees from either
accepting a public appointive position or from running for public office. Thus, it cannot be
considered as violative of the constitutional right of suffrage. Moreover, the Supreme Court has
recognized the employers right to enforce occupational qualifications as long as the employer is
able to show the existence of a reasonable business necessity in imposing the questioned policy.
Here, Policy No. HR-ER-016 itself states that it was issued "to protect the company from any
public misconceptions" and "[t]o preserve its objectivity, neutrality and credibility." Thus, it
cannot be denied that it is reasonable under the circumstances.
2. NO. The CA correctly ruled that though Luzon, as Assistant Station Manager for Radio
of ABS-CBN, has policy-making powers in relation to his principal task of administering the
networks radio station in the Cebu region, the exercise of such power should be in accord with
the general rules and regulations imposed by the ABS-CBN Head Office to its employees. Clearly,
the March 25, 1998 Memorandum issued by Luzon which only requires employees to go on leave
if they intend to run for any elective position is in absolute contradiction with Policy No. HR-ER-
016 issued by the ABS-CBN Head Office in Manila which requires the resignation, not only the
filing of a leave of absence, of any employee who intends to run for public office. Having been
issued beyond the scope of his authority, the March 25, 1998 Memorandum is therefore void and
did not supersede Policy No. HR-ER-016.
Also worth noting is that Luzon in his Sworn Statement admitted the inaccuracy of his
recollection of the company policy when he issued the March 25, 1998 Memorandum and stated
therein that upon double-checking of the exact text of the policy statement and subsequent
confirmation with the ABS-CBN Head Office in Manila, he learned that the policy required
resignation for those who will actually run in elections because the company wanted to maintain
its independence. Since the officer who himself issued the subject memorandum acknowledged
that it is not in harmony with the Policy issued by the upper management, there is no reason for
it to be a source of right for Ymbong.
3. YES. As Policy No. HR-ER-016 is the subsisting company policy and not Luzons March
25, 1998 Memorandum, Ymbong is deemed resigned when he ran for councilor.
As to the validity of his dismissal, Ymbong contends that the ground relied upon by ABS-CBN is
not among the just and authorized causes provided in the Labor Code, as amended. And even
assuming the subject company policy passes the test of validity under the pretext of the right of
the management to discipline and terminate its employees, the exercise of such right is not
without bounds. Ymbong avers that his automatic termination was a blatant disregard of his
right to due process. He was never asked to explain why he did not tender his resignation before
he ran for public office as mandated by the subject company policy.
We find no merit in Ymbongs argument that [his] automatic termination x x x was a blatant
[disregard] of [his] right to due process as he was never asked to explain why he did not
tender his resignation before he ran for public office as mandated by [the subject company
policy]. Ymbongs overt act of running for councilor of Lapu-Lapu City is tantamount to
resignation on his part. He was separated from ABS-CBN not because he was dismissed but
because he resigned. Since there was no termination to speak of, the requirement of due
process in dismissal cases cannot be applied to Ymbong. Thus, ABS-CBN is not duty-bound to
ask him to explain why he did not tender his resignation before he ran for public office as
mandated by the subject company policy.
DUNCAN ASSOCIATION OF DETAILMAN-PGTWO, ET.AL v. GLAXO WELCOME PHILS INC.
(management prerogatives; conflict of interest; constructive dismissal)
FACTS: Petitioner Pedro A. Tecson was hired by respondent Glaxo Wellcome Philippines, Inc. as
medical representative on October 1995, after Tecson had undergone training and orientation.
Tecson signed a contract of employment which stipulates, among others, that he agrees to study
and abide by existing company rules; to disclose to management any existing or future
relationship by consanguinity or affinity with co-employees or employees of competing drug
companies and should management find that such relationship poses a possible conflict of
interest, to resign from the company. The Employee Code of Conduct of Glaxo similarly provides
that an employee is expected to inform management of any existing or future relationship by
consanguinity or affinity with co-employees or employees of competing drug companies. If
management perceives a conflict of interest or a potential conflict between such relationship and
the employees employment with the company, the management and the employee will explore
the possibility of a transfer to another department in a non-counterchecking position or
preparation for employment outside the company after six months.Tecson was initially assigned
to market Glaxos products in the Camarines Sur-Camarines Norte sales area. Subsequently,
Tecson entered into a romantic relationship with Bettsy, an employee of Astra Pharmaceuticals
(Astra), a competitor of Glaxo. Bettsy was Astras Branch Coordinator in Albay. Despite of
warnings, Tecson married Bettsy. The superiors of Tecson reminded him of the company policy
and suggested that either him or Bettsy shall resign from their respective companies. Tecson
requested more time to resolve the issue. In November of 1999, Glaxo transferred Tecson to
Mindanao area involving the provinces of Butuan, Surigao and Agusan del Sur. Tecson did not
agree to the reassignment and referred this matter to the grievance committee. It was resolved
and was submitted to voluntary arbitration. The NCMB rendered decision that Glaxos policy was
a valid one. Aggrieved, Tecson filed a petition to the CA where CA held that Glaxos policy
prohibiting its employees from having personal relationships with employees of competitor
companies is a valid exercise of its management prerogatives. Hence, this petition.
ISSUE: Whether or not the policy of a pharmaceutical company prohibiting its employees from
marrying employees of any competitor company is valid?
HELD: YES
There is no error to the Court of Appeals when it ruled that Glaxos policy prohibiting an
employee from having a relationship with an employee of a competitor company is a valid
exercise of management prerogative. Glaxo has a right to guard its trade secrets, manufacturing
formulas, marketing strategies and other confidential programs and information from
competitors, especially so that it and Astra are rival companies in the highly competitive
pharmaceutical industry.The prohibition against personal or marital relationships with employees
of competitor companies upon Glaxos employees is reasonable under the circumstances
because relationships of that nature might compromise the interests of the company. In laying
down the assailed company policy, Glaxo only aims to protect its interests against the possibility
that a competitor company will gain access to its secrets and procedures. That Glaxo possesses
12
LABREV CASE DIGESTS
the right to protect its economic interests cannot be denied.No less than the Constitution
recognizes the right of enterprises to adopt and enforce such a policy to protect its right to
reasonable returns on investments and to expansion and growth. Indeed, while our laws
endeavor to give life to the constitutional policy on social justice and the protection of labor, it
does not mean that every labor dispute will be decided in favor of the workers. The law also
recognizes that management has rights which are also entitled to respect and enforcement in
the interest of fair play.
On Equal Protection
Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies, and
other confidential programs and information from competitors. The prohibition against pesonal
or marital relationships with employees of competitor companies upon Glaxo's employees is
reasonable under the circumstances because relationships of that nature might compromise the
interests of the company. That Glaxo possesses the right to protect its economic interest cannot
be denied.
It is the settled principle that the commands of the equal protection clause are addressed only to
the state or those acting under color of its authority. Corollarily, it has been held in a long array
of US Supreme Court decisions that the equal protection clause erects to shield against merely
privately conduct, however, discriminatory or wrongful.
The company actually enforced the policy after repeated requests to the employee to comply
with the policy. Indeed the application of the policy was made in an impartial and even-handed
manner, with due regard for the lot of the employee.
On Constructive Dismissal
Constructive dismissal is defined as a quitting, an involuntary resignation resorted to when
continued employment becomes impossible, unreasonable or unlikely; when there is demotion in
rank, or diminution in pay; or when a clear discrimination, insensibility, or disdain by an
employer becomes unbearable to the employee. None of these conditions are present in the
instant case.
The challenged policy has been implemented by Glaxo impartially and disinterestedly for a long
period of time. In the case at bar, the record shows that Glaxo gave Tecson several chances to
eliminate the conflict of interest brought about by his relationship with Betsy, but he never
availed of any of them.
POLLO v. DAVID
(management prerogatives; right to privacy)
FACTS: Petitioner is a former Supervising Personnel Specialist of the CSC Regional Office No. IV
and also the Officer-in-Charge of the Public Assistance and Liaison Division (PALD) under the
Mamamayan Muna Hindi Mamaya Na program of the CSC.
On January 3. 2007, CSC Chairperson Karina Constantino-David received an unsigned complaint
letter which was marked Confidential and was sent through a courier service (LBC) from
certain Allan San Pascual of Bagong Silang, Caloocan City. The letter contain allegations that the
petitioner have been helping many who have pending cases in the CSC and the letter sender
pleas that the CSC should investigate this anomaly to maintain the clean and good behaviour of
their office.
Chairperson David immediately formed a team of four personnel with background in information
technology (IT), and issued a memo directing them to conduct an investigation and specifically
to back up all the files in the computers found in the Mamamayan Muna (PALD) and Legal
divisions.
After some briefing, the team proceeded at once to the CSC-ROIV office at Panay Avenue,
Quezon City. The backing-up of all files in the hard disk of computers at the PALD and Legal
Services Division (LSD) was witnessed by several employees, together with Directors Castillo
and Unite who closely monitored said activity. At around 6:00 p.m., Director Unite sent text
messages to petitioner and the head of LSD, who were both out of the office at the time,
informing them of the ongoing copying of computer files in their divisions upon orders of the CSC
Chair.
ISSUE: WON the search conducted in the petitioners office computer and the copying of his
personal files without his knowledge and consent, alleged as a transgression of his constitutional
right to privacy, was legal?
HELD: YES (J. Bersamin dissents 2017 BAR CHAIRMAN TO MGA MOMSHIES!!!)
In sum, we conclude that the special needs, beyond the normal need for law enforcement make
theprobable-cause requirement impracticable, x x x for legitimate, work-related
noninvestigatory intrusions as well as investigations of work-related misconduct. A standard of
reasonableness will neither unduly burden the efforts of government employers to ensure the
efficient and proper operation of the workplace, nor authorize arbitrary intrusions upon the
privacy of public employees. We hold, therefore, that public employer intrusions on the
constitutionally protected privacy interests of government employees for noninvestigatory, work-
related purposes, as well as for investigations of work-related misconduct, should be judged by
the standard of reasonableness under all the circumstances. Under this reasonableness
standard, both the inception and the scope of the intrusion must be reasonable:
Determining the reasonableness of any search involves a twofold inquiry: first, one must
consider whether theaction was justified at its inception, x x x ; second, one must determine
whether the search as actually conducted was reasonably related in scope to the circumstances
which justified the interference in the first place, x x x
Ordinarily, a search of an employees office by a supervisor will be justified at its inception
when there are reasonable grounds for suspecting that the search will turn up evidence that the
employee is guilty of work-related misconduct, or that the search is necessary for a
noninvestigatory work-related purpose such as to retrieve a needed file. x x x The search will be
permissible in its scope when the measures adopted are reasonably related to the objectives of
the search and not excessively intrusive in light of the nature of the [misconduct]. x x x39
(Citations omitted; emphasis supplied.)
Under the facts obtaining, the search conducted on petitioners computer was justified at its
inception and scope. We quote with approval the CSCs discussion on the reasonableness of its
actions, consistent as it were with the guidelines established by OConnor:
Even conceding for a moment that there is no such administrative policy, there is no doubt in
the mind of the Commission that the search of Pollos computer has successfully passed the test
of reasonableness for warrantless searches in the workplace as enunciated in the above-
discussed American authorities. It bears emphasis that the Commission pursued the search in its
capacity as a government employer and that it was undertaken in connection with an
investigation involving a work-related misconduct, one of the circumstances exempted from the
warrant requirement. At the inception of the search, a complaint was received recounting that a
certain division chief in the CSCRO No. IV was lawyering for parties having pending cases with
the said regional office or in the Commission. The nature of the imputation was serious, as it was
grievously disturbing. If, indeed, a CSC employee was found to be furtively engaged in the
practice of lawyering for parties with pending cases before the Commission would be a highly
repugnant scenario, then such a case would have shattering repercussions. It would undeniably
cast clouds of doubt upon the institutional integrity of the Commission as a quasi-judicial
agency, and in the process, render it less effective in fulfilling its mandate as an impartial and
objective dispenser of administrative justice. It is settled that a court or an administrative
tribunal must not only be actually impartial but must be seen to be so, otherwise the general
public would not have any trust and confidence in it.
13
LABREV CASE DIGESTS
Considering the damaging nature of the accusation, the Commission had to act fast, if only to
arrest or limit any possible adverse consequence or fall-out. Thus, on the same date that the
complaint was received, a search was forthwith conducted involving the computer resources in
the concerned regional office. That it was the computers that were subjected to the search was
justified since these furnished the easiest means for an employee to encode and store
documents. Indeed, the computers would be a likely starting point in ferreting out incriminating
evidence. Concomitantly, the ephemeral nature of computer files, that is, they could easily be
destroyed at a click of a button, necessitated drastic and immediate action. Pointedly, to impose
the need to comply with the probable cause requirement would invariably defeat the purpose of
the wok-related investigation.
Worthy to mention, too, is the fact that the Commission effected the warrantless search in an
open and transparent manner. Officials and some employees of the regional office, who
happened to be in the vicinity, were on hand to observe the process until its completion. In
addition, the respondent himself was duly notified, through text messaging, of the search and
the concomitant retrieval of files from his computer.
All in all, the Commission is convinced that the warrantless search done on computer assigned
to Pollo was not, in any way, vitiated with unconstitutionality. It was a reasonable exercise of the
managerial prerogative of the Commission as an employer aimed at ensuring its operational
effectiveness and efficiency by going after the work-related misfeasance of its employees.
Consequently, the evidence derived from the questioned search are deemed admissible.
Petitioners claim of violation of his constitutional right to privacy must necessarily fail. His other
argument invoking the privacy of communication and correspondence under Section 3(1), Article
III of the 1987 Constitution is also untenable considering the recognition accorded to certain
legitimate intrusions into the privacy of employees in the government workplace under the
aforecited authorities.
MANSION PRINTING and CHENG v. BITARA
(management prerogatives; gross and habitual neglect of duties)
FACTS: Mansion Printing Center is a single proprietorship engaged in the printing of quality self-
adhesive labels, brochures, posters, stickers, packaging and the like.
Mansion engaged the services of Bitara as a helper (kargador). Respondent was later promoted
as the companys sole driver tasked , among others, to deliver the products to the clients within
the delivery schedules.
Petitioners aver that the timely delivery of the products to the clients is one of the foremost
considerations material to the operation of the business. It being so, they closely monitored the
attendance of respondent. They noted his habitual tardiness and absenteeism.
Petitioners issued a Memorandum requiring respondent to submit a written explanation why no
administrative sanction should be imposed on him for his habitual tardiness, to which he replied.
But despite respondents undertaking to report on time, however, he continued to disregard
attendance policies.
respondent filed a complaint for illegal dismissal against the petitioners before the Labor Arbiter.
ISSUE: Was there gross and habitual neglect of duty on the part of Bitara, warranting his
dismissal from service?
HELD: YES; there is no illegal dismissal
Valiao v. Court of Appeals is instructive:
xxx It bears stressing that petitioners absences and tardiness were not isolated incidents but
manifested a pattern of habituality. xxx The totality of infractions or the number of violations
committed during the period of employment shall be considered in determining the penalty to
be imposed upon an erring employee. The offenses committed by him should not be taken singly
and separately but in their totality. Fitness for continued employment cannot be
compartmentalized into tight little cubicles of aspects of character, conduct, and ability separate
and independent of each other.
In Valiao, we defined gross negligence as want of care in the performance of ones dutiesand
habitual neglect as repeated failure to perform ones duties for a period of time, depending
upon the circumstances. These are not overly technical terms, which, in the first place, are
expressly sanctioned by the Labor Code of the Philippines, to wit:
ART. 282. Termination by employer. An employer may terminate an employment for
any of the following causes:
xxx
(b) Gross and habitual neglect by the employee of his duties;
xxx
Bitaras weekly time record for the first quarter of the year 2000 revealed that he came late 19
times out of the 47 times he reported for work. He also incurred 19 absences out of the 66
working days during the quarter. His absences without prior notice and approval from March 11-
16, 2000 were considered to be the most serious infraction of all because of its adverse effect on
business operations.
Clearly, even in the absence of a written company rule defining gross and habitual neglect of
duties, respondents omissions qualify as such warranting his dismissal from the service.
NOTES:
We cannot simply tolerate injustice to employers if only to protect the welfare of undeserving
employees. As aptly put by then Associate Justice Leonardo A. Quisumbing:
Needless to say, so irresponsible an employee like petitioner does not deserve a place in the
workplace, and it is within the managements prerogative xxx to terminate his employment.
Even as the law is solicitous of the welfare of employees, it must also protect the rights of an
employer to exercise what are clearly management prerogatives. As long as the companys
exercise of those rights and prerogative is in good faith to advance its interest and not for the
purpose of defeating or circumventing the rights of employees under the laws or valid
agreements, such exercise will be upheld.
SMART COMMUNICATIONS v. ASTORGA
(management prerogatives; redundancy)
FACTS: Regina M. Astorga (Astorga) was employed by respondent Smart Communications,
Incorporated (SMART) on May 8, 1997 as district Sales Manager of the Corporate Sales Marketing
Group/ Fixed Services Division (CSMG/FSD). As District Sales Manager, Astorga enjoyed
additional benefits, namely, annual performance incentive equivalent to 30% of her annual gross
salary, a group life and hospitalization insurance coverage, and a car plan in the amount of
P455,000.00.
On May 18, 1998, SMART sent a letter to Astorga demanding that she pay the current market
value of the Honda Civic Sedan which was given to her under the companys car plan program,
or to surrender the same to the company for proper disposition. Astorga, however, failed and
refused to do either, thus prompting SMART to file a suit for replevin with the Regional Trial Court
of Makati (RTC) on August 10, 1998.
In February 1998, Since SNMI was formed to do the sales and marketing work, SMART abolished
the CSMG/FSD, Astorgas division. SMART offered her a supervisory position in the Customer
Care Dept but she refused the offer. On March 3, 1998, SMART issued a memorandum advising
Astorga of the termination of her employment on ground of redundancy, effective April 3, 1998.
Astorga claims that the termination of her employment was illegal and tainted with bad faith.
She asserts that the reorganization was done in order to get rid of her. But except for her
barefaced allegation, no convincing evidence was offered to prove it.
ISSUE: Whether the dismissal of Astorga be valid or illegal.
HELD: YES. Astorga is declared validly dismissed. Redundancy is a valid ground for termination.
14
LABREV CASE DIGESTS
Astorga was terminated due to redundancy, which is one of the authorized causes for the
dismissal of an employee. Redundancy in an employers personnel force necessarily or even
ordinarily refers to duplication of work. The characterization of an employees services as
superfluous or no longer necessary and, therefore, properly terminable, is an exercise of
business judgment on the part of the employer. An employer is not precluded from adopting a
new policy conducive to a more economical and effective management even if it is not
experiencing economic reverses. Neither does the law require that the employer should suffer
financial losses before he can terminate the services of the employee on the ground of
redundancy. But while tilting the scales of justice in favor of workers, the fundamental law also
guarantees the right of the employer to reasonable returns for his investment. In this light, we
must acknowledge the prerogative of the employer to adopt such measures as will promote
greater efficiency, reduce overhead costs and enhance prospects of economic gains, albeit
always within the framework of existing laws.
However, SMART failed to comply with the mandated one (1) month notice prior to termination.
The record is clear that Astorga received the notice of termination only on March 16, 1998 or
less than a month prior to its effectively on April 3, 1998. Likewise, the Department of Labo rand
Employment was notified of the redundancy program only on March 6, 1998.Article 283 of the
Labor Code clearly provides: Art.283. Closure of establishment and reduction of personnel. The
employer may also terminate the employment of any employee due to the installation of labor
saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the workers and the
Ministry of Labor and Employment at least one (1) month before the intended date thereof x x x.
STAR PAPER v. SIMBOL
(management prerogatives; protection to labor)
FACTS: Petitioner Star Paper Corporation (the company) is a corporation engaged in trading
principally of paper products. Josephine Ongsitco is its Manager of the Personnel and
Administration Department while Sebastian Chua is its Managing Director. Respondents Ronaldo
D. Simbol (Simbol), Wilfreda N. Comia (Comia) and Lorna E. Estrella (Estrella) were all regular
employees of the company.
Simbol met Alma Dayrit, also an employee of the company, whom he married. Prior to the
marriage, Ongsitco advised the couple that should they decide to get married, one of them
should resign pursuant to a company policy promulgated in 1995; Comia met Howard Comia, a
co-employee, whom she married. Ongsitco likewise reminded them that pursuant to company
policy, one must resign should they decide to get married; Estrella met Luisito Zuiga (Zuiga),
also a co-worker. Petitioners stated that Zuiga, a married man, got Estrella pregnant.
Simbol and Comia allege that; they were compelled to resign in view of an illegal company
policy. As to respondent Estrella, she alleges that she had a relationship with co-worker Zuiga
who misrepresented himself as a married but separated man. After he got her pregnant, she
discovered that he was not separated. Thus, she severed her relationship with him to avoid
dismissal due to the company policy. Due to her urgent need for money, she later submitted a
letter of resignation in exchange for her thirteenth month pay.
Respondents later filed a complaint for unfair labor practice, constructive dismissal, separation
pay and attorneys fees. They averred that the aforementioned company policy is illegal and
contravenes Article 136 of the Labor Code.
The Labor Arbiter dismissed the complaint for lack of merit. On appeal to the NLRC, the
Commission affirmed the decision of the Labor Arbiter. The Court of Appeals reversed the NLRC
decision.
ISSUE: Whether or not the dismissal pursuant to the companys policy against marrying co-
employees valid?
HELD: NO. Petitioners sole contention that "the company did not just want to have two (2) or
more of its employees related between the third degree by affinity and/or consanguinity" is
lame. That the second paragraph was meant to give teeth to the first paragraph of the
questioned rule is evidently not the valid reasonable business necessity required by the law.
It is significant to note that in the case at bar, respondents were hired after they were found fit
for the job, but were asked to resign when they married a co-employee. Petitioners failed to
show how the marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then an
employee of the Repacking Section, could be detrimental to its business operations. Neither did
petitioners explain how this detriment will happen in the case of Wilfreda Comia, then a
Production Helper in the Selecting Department, who married Howard Comia, then a helper in the
cutter-machine. The policy is premised on the mere fear that employees married to each other
will be less efficient. If we uphold the questioned rule without valid justification, the employer
can create policies based on an unproven presumption of a perceived danger at the expense of
an employees right to security of tenure.
Petitioners contend that their policy will apply only when one employee marries a co-employee,
but they are free to marry persons other than co-employees. The questioned policy may not
facially violate Article 136 of the Labor Code but it creates a disproportionate effect and under
the disparate impact theory, the only way it could pass judicial scrutiny is a showing that it is
reasonable despite the discriminatory, albeit disproportionate, effect. The failure of petitioners to
prove a legitimate business concern in imposing the questioned policy cannot prejudice the
employees right to be free from arbitrary discrimination based upon stereotypes of married
persons working together in one company.
Lastly, the absence of a statute expressly prohibiting marital discrimination in our jurisdiction
cannot benefit the petitioners. The protection given to labor in our jurisdiction is vast and
extensive that we cannot prudently draw inferences from the legislatures silence that married
persons are not protected under our Constitution and declare valid a policy based on a prejudice
or stereotype. Thus, for failure of petitioners to present undisputed proof of a reasonable
business necessity, we rule that the questioned policy is an invalid exercise of management
prerogative. Corollary, the issue as to whether respondents Simbol and Comia resigned
voluntarily has become moot and academic.
In the case of Estrella, the petitioner failed to adduce proof to justify her dismissal. Hence, the
Court ruled that it was illegal.
Petition was denied.
YRASUEGUI v. PAL
(management prerogatives; bona fide occupational qualification [BFOQ])
FACTS: THIS case portrays the peculiar story of an international flight steward who was
dismissed because of his failure to adhere to the weight standards of the airline company.
The proper weight for a man of his height and body structure is from 147 to 166 pounds, the
ideal weight being 166 pounds, as mandated by the Cabin and Crew Administration Manual of
PAL.
In 1984, the weight problem started, which prompted PAL to send him to an extended vacation
until November 1985. He was allowed to return to work once he lost all the excess weight. But
the problem recurred. He again went on leave without pay from October 17, 1988 to February
1989.
Despite the lapse of a ninety-day period given him to reach his ideal weight, petitioner remained
overweight. On January 3, 1990, he was informed of the PAL decision for him to remain grounded
until such time that he satisfactorily complies with the weight standards. Again, he was directed
to report every two weeks for weight checks, which he failed to comply with.
On April 17, 1990, petitioner was formally warned that a repeated refusal to report for weight
check would be dealt with accordingly. He was given another set of weight check dates, which
he did not report to.
15
LABREV CASE DIGESTS
On November 13, 1992, PAL finally served petitioner a Notice of Administrative Charge for
violation of company standards on weight requirements. Petitioner insists that he is being
discriminated as those similarly situated were not treated the same.
On June 15, 1993, petitioner was formally informed by PAL that due to his inability to attain his
ideal weight, and considering the utmost leniency extended to him which spanned a period
covering a total of almost five (5) years, his services were considered terminated effective
immediately.
LABOR ARBITER: held that the weight standards of PAL are reasonable in view of the nature of
the job of petitioner. However, the weight standards need not be complied with under pain of
dismissal since his weight did not hamper the performance of his duties.
NLRC affirmed.
CA: the weight standards of PAL are reasonable. Thus, petitioner was legally dismissed because
he repeatedly failed to meet the prescribed weight standards. It is obvious that the issue of
discrimination was only invoked by petitioner for purposes of escaping the result of his dismissal
for being overweight.
ISSUE: WON he was validly dismissed.
HELD: YES
A reading of the weight standards of PAL would lead to no other conclusion than that they
constitute a continuing qualification of an employee in order to keep the job. The dismissal of the
employee would thus fall under Article 282(e) of the Labor Code.
In the case at bar, the evidence on record militates against petitioners claims that obesity is a
disease. That he was able to reduce his weight from 1984 to 1992 clearly shows that it is
possible for him to lose weight given the proper attitude, determination, and self-discipline.
Indeed, during the clarificatory hearing on December 8, 1992, petitioner himself claimed that
[t]he issue is could I bring my weight down to ideal weight which is 172, then the answer is yes.
I can do it now.
Petitioner has only himself to blame. He could have easily availed the assistance of the company
physician, per the advice of PAL.
In fine, We hold that the obesity of petitioner, when placed in the context of his work as flight
attendant, becomes an analogous cause under Article 282(e) of the Labor Code that justifies his
dismissal from the service. His obesity may not be unintended, but is nonetheless voluntary. As
the CA correctly puts it, [v]oluntariness basically means that the just cause is solely attributable
to the employee without any external force influencing or controlling his actions. This element
runs through all just causes under Article 282, whether they be in the nature of a wrongful action
or omission. Gross and habitual neglect, a recognized just cause, is considered voluntary
although it lacks the element of intent found in Article 282(a), (c), and (d).
NOTES:
The dismissal of petitioner can be predicated on the bona fide occupational qualification
defense. Employment in particular jobs may not be limited to persons of a particular sex,
religion, or national origin unless the employer can show that sex, religion, or national origin is
an actual qualification for performing the job. The qualification is called a bona fide occupational
qualification (BFOQ). In short, the test of reasonableness of the company policy is used because
it is parallel to BFOQ. BFOQ is valid provided it reflects an inherent quality reasonably necessary
for satisfactory job performance.
The business of PAL is air transportation. As such, it has committed itself to safely transport its
passengers. In order to achieve this, it must necessarily rely on its employees, most particularly
the cabin flight deck crew who are on board the aircraft. The weight standards of PAL should be
viewed as imposing strict norms of discipline upon its employees.
The primary objective of PAL in the imposition of the weight standards for cabin crew is flight
safety.
Separation pay, however, should be awarded in favor of the employee as an act of social justice
or based on equity. This is so because his dismissal is not for serious misconduct. Neither is it
reflective of his moral character.
MANILA PAVILLION v. HENRY DELADO
(right to discipline)
FACT:
Delada was the Union President of the Manila Pavilion Supervisors Association at MPH originally
assigned as Head Waiter of Rotisserie then reassigned him as Head Waiter of Seasons Coffee
Shop but respondent declined the inter-outlet transfer and instead asked for a grievance
meeting on the matter, pursuant to their Collective Bargaining Agreement (CBA). He also
requested his retention as Head Waiter of Rotisserie while the grievance procedure was ongoing.
The Mgt. denied the request and he kept on reporting to Rotisserie.
MPH sent him several memoranda requiring him to explain in writing why he should not be
penalized for the following offenses gross insubordination etc. Delada persistently rebuffed
orders for him to report to his new assignment.
While respondents Complaint is pending MPH citing security and safety reasons, placed
respondent on a 30-day preventive suspension. Thereafter found Delada guilty imposing the
penalty of 90-day suspension.
ISSUE: WON MP retained the authority to continue with the administrative case against Delada
for insubordination and willful disobedience of the transfer order.
HELD: YES.
We rule that petitioner Manila Pavilion Hotel had the authority to continue with the
administrative proceedings for insubordination and willful disobedience against Delada and to
impose on him the penalty of suspension. Consequently, petitioner is not liable to pay back
wages and other benefits for the period corresponding to the penalty of 90-day suspension.
First, it must be pointed out that the basis of the 30-day preventive suspension imposed on
Delada was different from that of the 90-day penalty of suspension. The 30-day preventive
suspension was imposed by MPH on the assertion that Delada might sabotage hotel operations if
preventive suspension would not be imposed on him. On the other hand,
the penalty of 90-day suspension was imposed on respondent as a form of disciplinary action. It
was the outcome of the administrative proceedings conducted against him.
Preventive suspension is a disciplinary measure resorted to by the employer pending
investigation of an alleged malfeasance or misfeasance committed by an employee. The
employer temporarily bars the employee from working if his continued employment poses a
serious and imminent threat to the life or property of the employer or of his co-workers.
The penalty of suspension refers to the disciplinary action imposed on the employee after an
official investigation or administrative hearing is conducted. The employer exercises its right to
discipline erring employees pursuant to company rules and regulations. Thus, a finding of
validity of the penalty of 90-day suspension will not embrace the issue of the validity of the 30-
day preventive suspension. In any event, petitioner no longer assails the ruling of the CA on the
illegality of the 30-day preventive suspension.
PRINCE TRANSPORT, INC. v. GARCIA
(unfair labor practice)
FACTS: Prince Transport, Inc. (PTI), is a company engaged in the business of transporting
passengers by land; respondents were hired either as drivers, conductors, mechanics or
inspectors, except for respondent Diosdado Garcia (Garcia), who was assigned as Operations
Manager. Sometime in October 2007 the commissions received by the respondents were
reduced to 7 to 9% from 8 to 10%. This led respondents and other employees of PTI to hold a
series of meetings to discuss the protection of their interests as employees. Ranato Claros,
president of PTI, made known to Garcia his objections to the formation of a union and in order to
block the continued formation of the union, PTI caused the transfer of all union members and
sympathizers to one of its sub-companies, Lubas Transport (Lubas). The business of Lubas
16
LABREV CASE DIGESTS
deteriorated because of the refusal of PTI to maintain and repair the units being used therein,
which resulted in the virtual stoppage of its operations and respondents' loss of employment.
Hence, the respondent-employees filed complaints against PTI for illegal dismissal and unfair
labor practice. PTI contended that it has nothing to do with the management and operations of
Lubas as well as the control and supervision of the latter's employees.
ISSUES:
1. W/N the Company is guilty of ULP in transferring its employees who formed a
Union and its sympathizers to its sub-company Lubas.
2. Whether or not the order to reinstate respondents was valid considering that the issue
of reinstatement was never brought up before the CA and respondents never
questioned the award of separation pay.
3. Whether or not the factual findings of the NLRC are accorded not only respect but
finality.
4. Whether or not the petition filed with the CA is fatally defective, because the attached
verification and certificate against forum shopping was signed only by respondent
Garcia.
5. Whether or not the petition filed with the CA is fatally defective, because the attached
verification and certificate against forum shopping was signed only by respondent
Garcia.
HELD:
1. YES. PTIs transfer of work assignments to Lubas was designed by petitioners as
a subterfuge to foil the formers right to organize themselves into a union. Under Article 248 (a)
and (e) of the Labor Code, an employer is guilty of unfair labor practice if it interferes with,
restrains or coerces its employees in the exercise of their right to self-organization or if it
discriminates in regard to wages, hours of work and other terms and conditions of employment
in order to encourage or discourage membership in any labor organization. Evidence of
petitioners' unfair labor practice is shown by the established fact that, after respondents'
transfer to Lubas, petitioners left them high and dry insofar as the operations of Lubas was
concerned. The Court finds no error in the findings and conclusion of the CA that petitioners
"withheld the necessary financial and logistic support such as spare parts, and
repair and maintenance of the transferred buses until only two units remained in
running condition." This left respondents virtually jobless.
2. YES. It is clear from the complaints filed by respondents that they are seeking reinstatement.
Section 2 (c), Rule 7 of the Rules of Court provides that a pleading shall specify the relief sought,
but may add a general prayer for such further or other reliefs as may be deemed just and
equitable. A court can grant the relief warranted by the allegation and the proof even if it is not
specifically sought by the injured party; the inclusion of a general prayer may justify the grant of
a remedy different from or together with the specific remedy sought, if the facts alleged in the
complaint and the evidence introduced so warrant. In this case, aside from their specific prayer
for reinstatement, respondents, in their separate complaints, prayed for such reliefs which are
deemed just and equitable.
3. YES. Settled is the rule that factual findings of labor officials, who are deemed to have
acquired expertise in matters within their jurisdiction, are generally accorded not only respect
but even finality by the courts when supported by substantial evidence. But these findings are
not infallible. When there is a showing that they were arrived at arbitrarily or in disregard of the
evidence on record, they may be examined by the courts. The CA can grant the petition for
certiorari if it finds that the NLRC, in its assailed decision or resolution, made a factual finding
not supported by substantial evidence.
4. NO. While the general rule is that the certificate of non-forum shopping must be signed by all
the plaintiffs in a case and the signature of only one of them is insufficient, the Court has
stressed that the rules on forum shopping, which were designed to promote and facilitate the
orderly administration of justice, should not be interpreted with such absolute literalness as to
subvert its own ultimate and legitimate objective. It does not, however, prohibit substantial
compliance therewith under justifiable circumstances, considering especially that although it is
obligatory, it is not jurisdictional. In a number of cases, the Court has consistently held that
when all the petitioners share a common interest and invoke a common cause of action or
defense, the signature of only one of them in the certification against forum shopping
substantially complies with the rules. In the present case, there is no question that respondents
share a common interest and invoke a common cause of action. Hence, the signature of
respondent Garcia is a sufficient compliance with the rule governing certificates of non-forum
shopping. In the first place, some of the respondents actually executed a Special Power of
Attorney authorizing Garcia as their attorney-in-fact in filing a petition for certiorari with the CA.
5. NO. With respect to the absence of some of the workers signatures in the verification, the
verification requirement is deemed substantially complied with when some of the parties who
undoubtedly have sufficient knowledge and belief to swear to the truth of the allegations in the
petition had signed the same. Such verification is deemed a sufficient assurance that the
matters alleged in the petition have been made in good faith or are true and correct, and not
merely speculative.
PRODUCERS BANK OF THE PHILIPPINES v. NLRC
(management prerogatives)
FACTS: Private respondents filed a case against producers bank before the nlrc charging
petitioner with diminution of benefits, non-compliance with Wage Order No. 6 and non-payment
of holiday pay and midyear and Christmas bonuses. The labor arbiter ruled in favor of the
petitioner herein but the NLRC reversed the decision, ruling in favor of the producers bank
employees association. The petitioner herein filed a motion for partial reconsideration. According
to respondents, the mid-year and Christmas bonuses, by reason of their having been given for
thirteen consecutive years, have ripened into a vested right and, as such, can no longer be
unilaterally withdrawn by petitioner without violating Article 100 of Presidential Decree No. 4429
which prohibits the diminution or elimination of benefits already being enjoyed by the
employees. Although private respondent concedes that the grant of a bonus is discretionary on
the part of the employer, it argues that, by reason of its long and regular concession, it may
become part of the employee's regular compensation.
On the other hand, petitioner asserts that it cannot be compelled to pay the alleged bonus
differentials due to its depressed financial condition, as evidenced by the fact that in 1984 it was
placed under conservatorship by the Monetary Board. According to petitioner, it sustained losses
in the millions of pesos from 1984 to 1988, an assertion which was affirmed by the labor arbiter.
Moreover, petitioner points out that the collective bargaining agreement of the parties does not
provide for the payment of any mid-year or Christmas bonus.
ISSUE: Whether or not the respondents are entitled to bonuses?
HELD: NO. A bonus is an amount granted and paid to an employee for his industry and loyalty
which contributed to the success of the employer's business and made possible the realization of
profits. It is an act of generosity granted by an enlightened employer to spur the employee to
greater efforts for the success of the business and realization of bigger profits. The granting of a
bonus is a management prerogative, something given in addition to what is ordinarily received
by or strictly due the recipient. Thus, a bonus is not a demandable and enforceable obligation,
except when it is made part of the wage, salary or compensation of the employee.
However, an employer cannot be forced to distribute bonuses which it can no longer afford to
pay. To hold otherwise would be to penalize the employer for his past generosity.
Petitioner was not only experiencing a decline in its profits, but was reeling from tremendous
losses triggered by a bank-run which began in 1983. In such a depressed financial condition,
petitioner cannot be legally compelled to continue paying the same amount of bonuses to its
employees. Thus, the conservator was justified in reducing the mid-year and Christmas bonuses
of petitioner's employees. To hold otherwise would be to defeat the reason for the
conservatorship which is to preserve the assets and restore the viability of the financially
precarious bank. Ultimately, it is to the employees' advantage that the conservatorship achieve
its purposes for the alternative would be petitioner's closure whereby employees would lose not
only their benefits, but their jobs as well.
17
LABREV CASE DIGESTS
PAL v. NLRC & QUIJANO
(loss of confidence)
FACTS: An investigating committee chaired by Leslie W. Espino formally charged Quijano as
Manager-ASAD in connection with the processing and payment of commission claims to Goldair
Pty. Ltd. wherein PAL overpaid commissions to the latter.
Pending further investigation, the Espino Committee placed Quijano under preventive
suspension and at the same time required her to submit her answer to the charges.
Another Administrative charge involving the same Goldair anomaly was filed, this time including
Committee Chairman Leslie W. Espino and Committee Member Romeo R. Ines and several
others, for "gross incompetence and inefficiency, negligence, imprudence, mismanagement,
dereliction of duty, failure to observe and/or implement administrative and executive policies,
and related acts or omissions." Pending the result of investigation by another committee chaired
by Judge Martin S. Ocampo, the PAL Board of Directors suspended respondents.
The Ocampo Committee having submitted its findings to the PAL Board of Directors, the latter
considered respondents resigned from the service effective immediately, for loss of confidence
and for acts inimical to the interest of the company.
Her motion for reconsideration having been denied by the Board, Quijano filed the instant case
against PAL for illegal suspension and illegal dismissal.
The Labor Arbiter dismissed private respondents complaint. Undeterred, private respondent filed
an appeal before the NLRC which rendered the assailed Decision vacated and set aside.
Petitioner filed a Motion for Reconsideration but this was denied by the NLRC.
ISSUE: Whether or not respondent is illegally dismissed?
HELD:
At the onset, it should be noted that the parties do not dispute the validity of private
respondents dismissal from employment for loss of confidence and acts inimical to the interest
of the employer. The assailed September 29, 1995 Decision of the NLRC was emphatic in
declaring that it was "not prepared to rule as illegal the preventive suspension and eventual
dismissal from the service of [private respondent]" and rightfully so because the last position
that private respondent held, Manager-ASAD (Agents Services Accounting Division), undeniably
qualifies as a position of trust and confidence.
Loss of confidence as a just cause for termination of employment is premised from the fact that
an employee concerned holds a position of trust and confidence. This situation holds where a
person is entrusted with confidence on delicate matters, such as the custody, handling, or care
and protection of the employers property. But, in order to constitute a just cause for dismissal,
the act complained of must be "work-related" such as would show the employee concerned to be
unfit to continue working for the employer.
As a general rule, employers are allowed a wider latitude of discretion in terminating the
employment of managerial personnel or those who, while not of similar rank, perform functions
which by their nature require the employers full trust and confidence. This must be distinguished
from the case of ordinary rank and file employees, whose termination on the basis of these same
grounds requires a higher proof of involvement in the events in question; mere uncorroborated
assertions and accusations by the employer will not suffice.
The language of Article 279 of the Labor Code is pregnant with the implication that a legally
dismissed employee is not entitled to separation pay, to wit:
An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss
of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to
his other benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
However, in exceptional cases, this Court has granted separation pay to a legally dismissed
employee as an act of "social justice" or based on "equity." In both instances, it is required that
the dismissal (1) was not for serious misconduct; and (2) does not reflect on the moral character
of the employee or would involve moral turpitude. This equitable and humanitarian principle was
first discussed by the Court in the landmark case of Philippine Long Distance Telephone Co.
(PLDT) v. National Labor Relations Commission.
Serious misconduct as a valid cause for the dismissal of an employee is defined simply as
improper or wrong conduct. It is a transgression of some established and definite rule of action,
a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not
mere error of judgment. To be serious within the meaning and intendment of the law, the
misconduct must be of such grave and aggravated character and not merely trivial or
unimportant. However serious such misconduct, it must, nevertheless, be in connection with the
employees work to constitute just cause for his separation. The act complained of must be
related to the performance of the employees duties such as would show him to be unfit to
continue working for the employer. On the other hand, moral turpitude has been defined as
"everything which is done contrary to justice, modesty, or good morals; an act of baseness,
vileness or depravity in the private and social duties which a man owes his fellowmen, or to
society in general, contrary to justice, honesty, modesty, or good morals."
In the case at bar, the transgressions imputed to private respondent have never been firmly
established as deliberate and willful acts clearly directed at making petitioner lose millions of
pesos. At the very most, they can only be characterized as unintentional, albeit major, lapses in
professional judgment. Likewise, the same cannot be described as morally reprehensible actions.
Thus, private respondent may be granted separation pay on the ground of equity which this
Court had defined as "justice outside law, being ethical rather than jural and belonging to the
sphere of morals than of law. It is grounded on the precepts of conscience and not on any
sanction of positive law, for equity finds no room for application where there is law."
LEPANTO CERAMICS, INC. v. LEPANTO CERAMICS EMPLOYEES ASSOCIATION
(non-diminution of benefits)
FACTS: Petitioner Lepanto Ceramics, Inc., a corporation primarily in the business of
manufacture, makes, buy and sell, on whole sale basis, tiles, marbles, mosaics and other similar
products. Respondent Lepanto Ceramics Employees Association is the sole and exclusive
bargaining agent in the establishment of petitioner.
In 1998, petitioner gave P3, 000.00 as bonus to its employees, members of the respondent
Association. Subsequently, in September 1999, petitioner and respondent Association entered
into a Collective Bargaining Agreement (CBA) which provides for, among others, the grant of a
Christmas gift package/bonus to the members of the respondent Association.
In the succeeding years, 1999, 2000, 2001, petitioner gave bonuses in a form of a certificate
which is equivalent to P3, 000.00. However, in 2002, petitioner gave only P600.00 as cash
benefit. Respondent Association objected to the P600.00 cash benefit and argued that it was in
violation of the CBA. Petitioner averred that the giving of extra compensation was based on the
companys available resources for a given year and the workers are not entitled to a bonus if the
company does not make profits. Unable to amicably settle the dispute, the case was referred to
the Voluntary Arbitrator. The Voluntary Arbitrator rendered a decision, declaring that petitioner is
bound to grant each of its workers a Christmas bonus of P3,000.00 for the reason that the bonus
was given prior to the effectivity of the CBA between the parties and that the financial losses of
the company is not a sufficient reason to exempt it from granting the same. On appeal, the
Court of Appeals affirmed the ruling of the Voluntary Arbitrator.
ISSUE: Is petitioner obliged to give a Christmas bonus to respondent Association?
HELD: YES. Generally, a bonus is not a demandable and enforceable obligation. For a bonus to
be enforceable, it must have been promised by the employer and expressly agreed upon by the
parties. Given that the bonus in this case is integrated in the CBA, the same partakes the nature
18
LABREV CASE DIGESTS
of a demandable obligation. Verily, by virtue of its incorporation in the CBA, the Christmas bonus
due to respondent Association has become more than just an act of generosity on the part of the
petitioner but a contractual obligation it has undertaken.
A reading of the provision of the CBA reveals that the same provides for the giving of a
"Christmas gift package/bonus" without qualification. The said provision did not state that the
Christmas package shall be made to depend on the petitioners financial standing. The records
are also bereft of any showing that the petitioner made it clear during CBA negotiations that the
bonus was dependent on any condition. Indeed, if the petitioner and respondent Association
intended that the P3,000.00 bonus would be dependent on the company earnings, such
intention should have been expressed in the CBA.
All given, business losses are a feeble ground for petitioner to repudiate its obligation under the
CBA. The rule is settled that any benefit and supplement being enjoyed by the employees
cannot be reduced, diminished, discontinued or eliminated by the employer. The principle of
non-diminution of benefits is founded on the constitutional mandate to protect the rights of
workers and to promote their welfare and to afford labor full protection.
employers interest and not for the purpose of defeating or circumventing the rights of the
employees under special laws and valid agreements. The Court is wont to reiterate that while an
employer has its own interest to protect, and pursuant thereto, it may terminate an employee
for a just cause, such prerogative to dismiss or lay off an employee must be exercised without
abuse of discretion. Its implementation should be tempered with compassion and understanding.
The employer should bear in mind that, in the execution of said prerogative, what is at stake is
not only the employees position, but his very livelihood, his very breadbasket.
Dismissal is the ultimate penalty that can be meted to an employee. Even where a worker has
committed an infraction, a penalty less punitive may suffice, whatever missteps maybe
committed by labor ought not to be visited with a consequence so severe. This is not only the
laws concern for the workingman. There is, in addition, his or her family to consider.
Unemployment brings untold hardships and sorrows upon those dependent on the wage-earner.

PLDT v. JOEY TEVES

SAN MIGUEL BREWERY SALES FORCE UNION (PTGWO) v. HON. BLAS OPLE
(management prerogatives; reasonable proportionality between offense and penalty)
(management prerogatives; proof of good faith)
FACTS: Petitioner terminated respondent through an Inter-Office Memorandum dated on
FACTS: San Miguel Corporation introduced a marketing scheme known as the Complementary
account of his three (3) unauthorized leaves of absence committed within three (3) years in
Distribution System (CDS) whereby its beer products were offered for sale directly to
violation of petitioners rules and regulations.
wholesalers through San Miguels sales offices.
Labor Union filed a complaint for unfair labor practice on the ground that CDS violates Sec 1 Art
Respondent filed a Complaint for illegal dismissal. Labor Arbiter (LA) Benigno C. Villarente, Jr.
IV of CBA which states that, Employees shall be entitled to a basic monthly compensation
rendered his Decision declaring that the dismissal of complainant LEGAL. Respondent interposed
plus commission based on their respective sales. The union claims that implementation of the
an appeal with the NLRC. NLRC rendered its Decision reversing the LAs Decision. Petitioner's
new scheme would -reduce the take-home pay of the salesmen.
motion for reconsideration was denied by the NLRC. Petitioner filed a Petition for Certiorari with
SMC positioned that they have an offer to compensate members who will be adversely affected
prayer for the issuance of a temporary restraining order and/or injunction assailing the Decisin
by paying them a back-adjustment commission to make up for the commissions they might
and Resolution of NLRC. CA rendered its assailed Decision, which affirmed and reiterated the
lose.
NLRC decision.
ISSUE: WON the CDS violates the collective bargaining agreement and whether it is an indirect
The CA found that (1) petitioner complied with the two-notice requirement which was essential
way of busting the union.
to respondent's right to due process; (2) respondent was given a notice to explain in writing why
no disciplinary action should be meted on him for his unauthorized absences from February 11
HELD: NO. CDS is a valid exercise of management prerogatives. Every business enterprise
to 19, 1992; and (3) when respondents explanation proved unacceptable to petitioner,
endeavors to increase its profits. In the process, it may adopt or devise means designed towards
respondent was sent another notice informing him of his termination by reason of three
that goal. So long as a company's management prerogatives are exercised in good faith for the
unauthorized absences within a three-year period, a conduct which was circumscribed in
advancement of the employer's interest and not for the purpose of defeating or circumventing
petitioner's rules and regulations. Notwithstanding compliance with the requirement of due
the rights of the employees under special laws or under valid agreements, this Court will uphold
process, the CA affirmed the illegality of respondent's dismissal finding that respondent's
them. San Miguel Corporation's offer to compensate the members of its sales force who will be
comportment cannot be characterized as grave so as to constitute grave misconduct; that his
adversely affected by the implementation of the CDS by paying them a so-called "back
first two leaves of absence were satisfactorily justified; and that he should not have been
adjustment commission" to make up for the commissions they might lose as a result of the CDS
suspended from service by reason of such absences. However, the CA found that respondents
proves the company's good faith and lack of intention to bust their union.
failure to report for work on February 11 to 19, 1992 appeared to be the only unauthorized and
unjustified leave of absence during his 11 years of stay with petitioner, and it did not merit the
MANUEL SOSITO v. AGUINALDO DEVELOPMENT CORP.
harsh penalty of dismissal.
(management prerogatives; social justice)
Petitioner filed a motion for reconsideration, but was denied by the CA.
FACTS: Petitioner Manuel Sosito was employed in 1964 by the private respondent, a logging
company, and was in charge of logging importation, with a monthly salary of P675.00, when he
ISSUE: Whether or not respondent was illegally dismissed?
went on indefinite leave with the consent of the company on January 16, 1976. On July 20, 1976,
the private respondent, through its president, announced a retrenchment program and offered
HELD: Even assuming that respondent's absenteeism constitutes willful disobedience, such
separation pay to employees in the active service as of June 30, 1976, who would tender their
offense does not warrant respondent's dismissal. Not every case of insubordination or willful
resignations not later than July 31, 1976. The petitioner decided to accept this offer and so
disobedience by an employee reasonably deserves the penalty of dismissal. There must be a
submitted his resignation on July 29, 1976, "to avail himself of the gratuity benefits" promised.
reasonable proportionality between the offense and the penalty.
However, his resignation was not acted upon and he was never given the separation pay he
expected. The petitioner complained to the Department of Labor, where he was sustained by the
While management has the prerogative to discipline its employees and to impose appropriate
labor arbiter. The company was ordered to pay Sosito the sum of P 4,387.50, representing his
penalties on erring workers, pursuant to company rules and regulations, however, such
salary for six and a half months. On appeal to the National Labor Relations Commission, this
management prerogatives must be exercised in good faith for the advancement of the

19
LABREV CASE DIGESTS
decision was reversed and it was held that the petitioner was not covered by the retrenchment
program. The petitioner then came to us.
ISSUE: Whether or not petitioner was entitled to the benefits?
HELD: NO. It is clear from the memorandum that the offer of separation pay was extended only
to those who were in the active service of the company as of June 30, 1976. It is equally clear
that the petitioner was not eligible for the promised gratuity as he was not actually working with
the company as of the said date. Being on indefinite leave, he was not in the active service of
the private respondent although, if one were to be technical, he was still in its employ. Even so,
during the period of indefinite leave, he was not entitled to receive any salary or to enjoy any
other benefits available to those in the active service.
While the Constitution is committed to the policy of social justice and the protection of the
working class, it should not be supposed that every labor dispute will be automatically decided
in favor of labor. Management also has its own rights which, as such, are entitled to respect and
enforcement in the interest of simple fair play. Out of its concern for those with less privileges in
life, this Court has inclined more often than not toward the worker and upheld his cause in his
conflicts with the employer. Such favoritism, however, has not blinded us to the rule that justice
is in every case for the deserving, to be dispensed in the light of the established facts and the
applicable law and doctrine.
B. Construction in Favor of Labor (Art. 4, LC)
Article 4. Construction in favor of labor. All doubts in the implementation and interpretation of
the provisions of this Code, including its implementing rules and regulations, shall be resolved in
favor of labor.
CASES
UNION OF FILIPRO EMPLOYEES (UFE), petitioner,
vs. VIVAR, JR., respondents.
Filipro, Inc. (now Nestle Philippines, Inc.) filed with the NLRC a petition for declaratory relief
seeking a ruling on its rights and obligations respecting claims of its monthly paid employees for
holiday pay in the light of the Court's decision in Chartered Bank Employees Association
v. Ople (138 SCRA 273 [1985]).
Both Filipro and the UFE agreed to submit the case for voluntary arbitration and appointed
respondent Benigno Vivar, Jr. as voluntary arbitrator which rendered a decision directing Filipro
to pay its monthly paid employees holiday pay pursuant to Article 94 of the Code, subject only
to the exclusions and limitations specified in Article 82 and such other legal restrictions as are
provided for in the Code.
Filipro filed a motion for clarification seeking, among others, the exclusion of salesmen, sales
representatives, truck drivers, merchandisers and medical representatives (hereinafter referred
to as sales personnel) from the award of the holiday pay and deduction from the holiday pay
award of overpayment for overtime, night differential, vacation and sick leave benefits due to
the use of 251 divisor.
Respondent arbitrator issued an order declaring that the company's sales personnel are field
personnel and, as such, are not entitled to holiday pay. He likewise ruled that with the grant of
10 days' holiday pay, the divisor should be changed from 251 to 261 and ordered the
reimbursement of overpayment for overtime, night differential, vacation and sick leave pay due
to the use of 251 days as divisor.
ISSUE # 1: Whether sales personnel are field personnel and as such are not entitled to holiday
pay.
SC: NO!
The Court does not agree. The law requires that the actual hours of work in the field be
reasonably ascertained. The company has no way of determining whether or not these sales
personnel, even if they report to the office before 8:00 a.m. prior to field work and come back
at 4:30 p.m, really spend the hours in between in actual field work.
We concur with the following disquisition by the respondent arbitrator:
The requirement for the salesmen and other similarly situated employees to
report for work at the office at 8:00 a.m. and return at 4:00 or 4:30 p.m. is
not within the realm of work in the field as defined in the Code but an
exercise of purely management prerogative of providing administrative
control over such personnel. This does not in any manner provide a
reasonable level of determination on the actual field work of the employees
which can be reasonably ascertained. The theoretical analysis that salesmen
and other similarly-situated workers regularly report for work at 8:00 a.m.
and return to their home station at 4:00 or 4:30 p.m., creating the
assumption that their field work is supervised, is surface projection. Actual
field work begins after 8:00 a.m., when the sales personnel follow their field
itinerary, and ends immediately before 4:00 or 4:30 p.m. when they report
back to their office. The period between 8:00 a.m. and 4:00 or 4:30 p.m.
comprises their hours of work in the field, the extent or scope and result of
which are subject to their individual capacity and industry and which
"cannot be determined with reasonable certainty." This is the reason why
effective supervision over field work of salesmen and medical
representatives, truck drivers and merchandisers is practically a physical
impossibility. Consequently, they are excluded from the ten holidays with
pay award. (Rollo, pp. 36-37)
XXX The petitioner claims that the fact that these sales personnel are given incentive bonus
every quarter based on their performance is proof that their actual hours of work in the field can
be determined with reasonable certainty.
The Court thinks otherwise.
The criteria for granting incentive bonus are: (1) attaining or exceeding sales volume based on
sales target; (2) good collection performance; (3) proper compliance with good market hygiene;
(4) good merchandising work; (5) minimal market returns; and (6) proper truck maintenance.
(Rollo, p. 190).
The above criteria indicate that these sales personnel are given incentive bonuses precisely
because of the difficulty in measuring their actual hours of field work. These employees are
evaluated by the result of their work and not by the actual hours of field work which are hardly
susceptible to determination.
ISSUE # 2: Whether deduction may be made from the holiday pay award of overpayment for
overtime, night differential, vacation and sick leave benefits due to the use of 251 divisor.
SC: NO!
Following the criterion laid down in the Chartered Bank case, the use of 251 days' divisor by
20
LABREV CASE DIGESTS
respondent Filipro indicates that holiday pay is not yet included in the employee's salary,
otherwise the divisor should have been 261.
It must be stressed that the daily rate, assuming there are no intervening salary increases, is a
constant figure for the purpose of computing overtime and night differential pay and
commutation of sick and vacation leave credits. Necessarily, the daily rate should also be the
same basis for computing the 10 unpaid holidays.
The respondent arbitrator's order to change the divisor from 251 to 261 days would result in a
lower daily rate which is violative of the prohibition on non-diminution of benefits found in
Article 100 of the Labor Code. To maintain the same daily rate if the divisor is adjusted to 261
days, then the dividend, which represents the employee's annual salary, should correspondingly
be increased to incorporate the holiday pay. To illustrate, if prior to the grant of holiday pay, the
employee's annual salary is P25,100, then dividing such figure by 251 days, his daily rate is
P100.00 After the payment of 10 days' holiday pay, his annual salary already includes holiday
pay and totals P26,100 (P25,100 + 1,000). Dividing this by 261 days, the daily rate is still
P100.00. There is thus no merit in respondent Nestle's claim of overpayment of overtime and
night differential pay and sick and vacation leave benefits, the computation of which are all
based on the daily rate, since the daily rate is still the same before and after the grant of holiday
pay. XXX
Following the criterion laid down in the Chartered Bank case, the use of 251 days' divisor by
respondent Filipro indicates that holiday pay is not yet included in the employee's salary,
otherwise the divisor should have been 261.
It must be stressed that the daily rate, assuming there are no intervening salary increases, is a
constant figure for the purpose of computing overtime and night differential pay and
commutation of sick and vacation leave credits. Necessarily, the daily rate should also be the
same basis for computing the 10 unpaid holidays.
The respondent arbitrator's order to change the divisor from 251 to 261 days would result in a
lower daily rate which is violative of the prohibition on non-diminution of benefits found in
Article 100 of the Labor Code. To maintain the same daily rate if the divisor is adjusted to 261
days, then the dividend, which represents the employee's annual salary, should correspondingly
be increased to incorporate the holiday pay. To illustrate, if prior to the grant of holiday pay, the
employee's annual salary is P25,100, then dividing such figure by 251 days, his daily rate is
P100.00 After the payment of 10 days' holiday pay, his annual salary already includes holiday
pay and totals P26,100 (P25,100 + 1,000). Dividing this by 261 days, the daily rate is still
P100.00. There is thus no merit in respondent Nestle's claim of overpayment of overtime and
night differential pay and sick and vacation leave benefits, the computation of which are all
based on the daily rate, since the daily rate is still the same before and after the grant of holiday
pay.
Respondent Nestle's invocation of solutio indebiti, or payment by mistake, due to its use of 251
days as divisor must fail in light of the Labor Code mandate that "all doubts in the
implementation and interpretation of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor." (Article 4). Moreover, prior to September 1,
1980, when the company was on a 6-day working schedule, the divisor used by the company
was 303, indicating that the 10 holidays were likewise not paid. When Filipro shifted to a 5-day
working schebule on September 1, 1980, it had the chance to rectify its error, if ever there was
one but did not do so. It is now too late to allege payment by mistake.
INSULAR HOTEL EMPLOYEES UNION-NFL, Petitioner, vs.
WATERFRONT INSULAR HOTEL DAVAO, Respondent.
Respondent Waterfront Insular Hotel Davao (respondent) sent the DOLE a Notice of Suspension
of Operations for a period of six months due to severe and serious business losses. In said
notice, respondent assured the DOLE that if the company could not resume its operations within
the six-month period, the company would pay the affected employees all the benefits legally
due to them.
During the period of the suspension, Domy R. Rojas (Rojas), the President of Davao Insular
Hotel Free Employees Union (DIHFEU-NFL), the recognized labor organization in Waterfront
Davao, sent WATERFRONT a number of letters asking management to reconsider its decision.
After series of negotiations, WATERFRONT and DIHFEU-NFL signed a Memorandum of
Agreement (MOA) wherein respondent agreed to re-open the hotel subject to certain
concessions offered by DIHFEU-NFL in its Manifesto.
Accordingly, respondent downsized its manpower structure to 100 rank-and-file employees as
set forth in the terms of the MOA. Moreover, as agreed upon in the MOA, a new pay scale was
also prepared by WATERFRONT.
The retained employees individually signed a "Reconfirmation of Employment" which embodied
the new terms and conditions of their continued employment. Each employee was assisted by
Rojas who also signed the document.
WATERFRONT then resumed its business operations.
Darius Joves (Joves) and Debbie Planas, claiming to be local officers of the National Federation
of Labor (NFL), filed a Notice of Mediation before the National Conciliation and Mediation Board
(NCMB). In said Notice, it was stated that the Union involved was "DARIUS JOVES/DEBBIE
PLANAS ET. AL, National Federation of Labor."
WATERFRONT and petitioner Insular Hotel Employees Union-NFL (IHEU-NFL) submitted for the
resolution of AVA (Arbitrator) Olvida the determination of whether or not there was a
diminution of wages and other benefits through an unlawful MOA. In support of his
authority to file the complaint, Joves, assisted by Atty. Danilo Cullo (Cullo), presented several
Special Powers of Attorney (SPA) which were, however, undated and unnotarized.
A second preliminary conference was conducted in the NCMB, where Cullo confirmed that the
case was filed not by the IHEU-NFL but by the NFL. When asked to present his authority from
NFL, Cullo admitted that the case was, in fact, filed by individual employees named in the SPAs.
The hearing officer directed both parties to elevate the aforementioned issues to AVA Olvida.
The case was referred to AVA Olvida. WATERFRONT again raised its objections, specifically
arguing that the persons who signed the complaint were not the authorized representatives of
the Union indicated in the Submission Agreement nor were they parties to the MOA. AVA Olvida
directed WATERFRONT to file a formal motion to withdraw its submission to voluntary
arbitration.
WATERFRONT filed its Motion to Withdraw. Cullo then filed an Opposition thereto.
AVA Olvida then issued a Resolution denying WATERFRONT's Motion to Withdraw. WATERFRONT
filed a Motion for Reconsideration where it stressed that the Submission Agreement was void
because the Union did not consent thereto. WATREFRONT pointed out that the Union had not
issued any resolution duly authorizing the individual employees or NFL to file the notice of
mediation with the NCMB.
21
LABREV CASE DIGESTS
AVA Olvida issued another Resolution denying respondent's Motion for Reconsideration. He,
however, ruled that WATERFRONT was correct when it raised its objection to NFL as proper
party-complainant.
The proper party-complainant is INSULAR HOTEL EMPLOYEES UNION-NFL, the recognized and
incumbent bargaining agent of the rank-and-file employees of the respondent hotel. In the
submission agreement of the parties dated August 29, 2002, the party complainant written is
INSULAR HOTEL EMPLOYEES UNION-NFL and not the NATIONAL FEDERATION OF LABOR and 79
other members.
However, since the NFL is the mother federation of the local union, and signatory to the
existing CBA, it can represent the union, the officers, the members or union and officers or
members, as the case may be, in all stages of proceedings in courts or administrative bodies
provided that the issue of the case will involve labor-management relationship like in the case at
bar.
Thereafter, the parties selected a new arbitrator, AVA Montejo (new arbitrator) which rendered a
Decision ruling in favor of Cullo, holding among others that the Memorandum of Agreement in
question is invalid as it is contrary to law and public policy and that there is a diminution of the
wages and other benefits of the Union members and officers under the said invalid MOA.
On appeal, the CA affirmed the decision. Hence, this petition for certiorari before the SC.
CULLO CONTENTION: that the CA must have erred in concluding that Article 100 of the Labor
Code applies only to benefits already enjoyed at the time of the promulgation of the Labor
Code.
ISSUE: WHETHER THE HONORABLE COURT OF APPEALS MUST HAVE SERIOUSLY ERRED IN
CONCLUDING THAT ARTICLE 100 OF THE LABOR CODE APPLIES ONLY TO BENEFITS ENJOYED
PRIOR TO THE ADOPTION OF THE LABOR CODE WHICH, IN EFFECT, ALLOWS THE DIMINUTION
OF THE BENEFITS ENJOYED BY EMPLOYEES FROM ITS ADOPTION HENCEFORTH.
SC: NO!
Article 100 of the Labor Code provides:
PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS- Nothing in this Book shall
be construed to eliminate or in any way diminish supplements, or other employee benefits being
enjoyed at the time of the promulgation of this Code.
On this note, Apex Mining Company, Inc. v. NLRC65 is instructive, to wit:
Clearly, the prohibition against elimination or diminution of benefits set out in Article 100 of the
Labor Code is specifically concerned with benefits already enjoyed at the time of the
promulgation of the Labor Code. Article 100 does not, in other words, purport to apply to
situations arising after the promulgation date of the Labor Code x x x.
Even assuming arguendo that Article 100 applies to the case at bar, this Court agrees with
respondent that the same does not prohibit a union from offering and agreeing to reduce wages
and benefits of the employees. XXX
Lastly, this Court is not unmindful of the fact that DIHFEU-NFL's Constitution and By-Laws
specifically provides that "the results of the collective bargaining negotiations shall be subject to
ratification and approval by majority vote of the Union members at a meeting convened, or by
plebiscite held for such special purpose." Accordingly, it is undisputed that the MOA was not
subject to ratification by the general membership of the Union. The question to be resolved then
is, does the non-ratification of the MOA in accordance with the Union's constitution prove fatal to
the validity thereof?
It must be remembered that after the MOA was signed, the members of the Union
individually signed contracts denominated as "Reconfirmation of Employment." Cullo
did not dispute the fact that of the 87 members of the Union, who signed and accepted the
"Reconfirmation of Employment," 71 are the respondent employees in the case at bar. Moreover,
it bears to stress that all the employees were assisted by Rojas, DIHFEU-NFL's president, who
even co-signed each contract.
Stipulated in each Reconfirmation of Employment were the new salary and benefits scheme. In
addition, it bears to stress that specific provisions of the new contract also made reference to
the MOA. Thus, the individual members of the union cannot feign knowledge of the execution of
the MOA. Each contract was freely entered into and there is no indication that the same was
attended by fraud, misrepresentation or duress. To this Court's mind, the signing of the
individual "Reconfirmation of Employment" should, therefore, be deemed an implied ratification
by the Union members of the MOA.
XXX while the terms of the MOA undoubtedly reduced the salaries and certain benefits
previously enjoyed by the members of the Union, it cannot escape this Court's attention that it
was the execution of the MOA which paved the way for the re-opening of the hotel,
notwithstanding its financial distress. More importantly, the execution of the MOA allowed
respondents to keep their jobs. It would certainly be iniquitous for the members of the Union to
sign new contracts prompting the re-opening of the hotel only to later on renege on their
agreement on the fact of the non-ratification of the MOA.
In addition, it bears to point out that Rojas did not act unilaterally when he negotiated with
respondent's management. The Constitution and By-Laws of DIHFEU-NFL clearly provide that
the president is authorized to represent the union on all occasions and in all matters in which
representation of the union may be agreed or required. Furthermore, Rojas was properly
authorized under a Board of Directors Resolution to negotiate with respondent XXX
Withal, while the scales of justice usually tilt in favor of labor, the peculiar circumstances herein
prevent this Court from applying the same in the instant petition. Even if our laws endeavor to
give life to the constitutional policy on social justice and on the protection of labor, it does not
mean that every labor dispute will be decided in favor of the workers. The law also recognizes
that management has rights which are also entitled to respect and enforcement in the interest
of fair play.
NORBERTO SORIANO, petitioner,
vs.
OFFSHORE SHIPPING AND MANNING CORPORATION, respondents.
Norberto Soriano licensed Second Marine Engineer
Knut Knutsen O.A.S. hired Soriano, thru Offshore Shipping and Manning Corp, authorized
shipping agent of Knut in the Philippines, to work as Third Marine Engineer on board Knut
Provider" with a salary of US$800.00 a month on a conduction basis for a period of fifteen (15)
days.
The term of the contract was extended to six (6) months by mutual agreement on the promise
of the employer to Soriano that he will be promoted to Second Engineer.
However, Soriano later signed off due to the alleged failure of the employer to fulfill its promise
to promote him and for the unilateral decision to reduce Soriano's basic salary from US$800.00
to US$560.00. Soriano was made to shoulder his return airfare to Manila.
Soriano then filed a complaint with the POEA for payment of salary differential, overtime pay,
22
LABREV CASE DIGESTS
unpaid salary for November, 1985 and refund of his return airfare and cash bond allegedly in the
amount of P20,000.00 contending therein that private respondent unilaterally altered the
employment contract by reducing his salary causing him to request for his repatriation to the
Philippines.
The Officer-in-Charge of the POEA found, among others, that the version of complainant that
there was in effect contract substitution has no grain of truth because although the Employment
Contract seems to have corrections on it, said corrections or alterations are in conformity with
the Wage Scale duly approved by the POEA. POEA only ordered Offshore to pay Soriano 15,000
representing the reimbursement of the cash bond deposited by complainant, among others, but
dismissed all other claims for lack of merit.
On appeal, NLRC dismissed the same for lack of merit. Hence, this petition for certiorari before
the SC.
ISSUE: Whether the alteration by OFFSHORE of his salary and overtime rate which is
evidenced by the Crew Agreement and the exit pass constitutes a violation of Article
34 of the Labor Code
SC: NO!
A careful examination of the records shows that there is in fact no alteration made in the Crew
Agreement or in the Exit Pass. As the original data appear, the figures US$800.00 fall under the
column salary, while the word "inclusive" is indicated under the column overtime rate. With the
supposed alterations, the figures US$560.00 were handwritten above the figures US$800.00
while the figures US$240.00 were also written above the word "inclusive".
As clearly explained by respondent NLRC, the correction was made only to specify the salary
and the overtime pay to which petitioner is entitled under the contract. It was a mere
breakdown of the total amount into US$560.00 as basic wage and US$240.00 as overtime pay.
Otherwise stated, with or without the amendments the total emolument that petitioner would
receive under the agreement as approved by the POEA is US$800.00 monthly with wage
differentials or overtime pay included. 10
Moreover, the presence of petitioner's signature after said items renders improbable the
possibility that petitioner could have misunderstood the amount of compensation he will be
receiving under the contract. Nor has petitioner advanced any explanation for statements
contrary or inconsistent with what appears in the records. Thus, he claimed: [a] that private
respondent extended the duration of the employment contract indefinitely, but admitted in his
Reply that his employment contract was extended for another six (6) months by agreement
between private respondent and himself: [b] that when petitioner demanded for his overtime
pay, respondents repatriated him which again was discarded in his reply stating that he himself
requested for his voluntary repatriation because of the bad faith and insincerity of private
respondent; [c] that he was required to post a cash bond in the amount of P20,000.00 but it
was found that he deposited only the total amount of P15,000.00; [d] that his salary for
November 1985 was not paid when in truth and in fact it was petitioner who owes private
respondent US$285.83 for cash advances and on November 27, 1985 the final pay slip was
executed and signed; and [e] that he finished his contract when on the contrary, despite
proddings that he continue working until the renewed contract has expired, he adamantly
insisted on his termination.
Verily, it is quite apparent that the whole conflict centers on the failure of respondent company
to give the petitioner the desired promotion which appears to be improbable at the moment
because the M/V Knut Provider continues to be laid off at Limassol for lack of charterers.
It is axiomatic that laws should be given a reasonable interpretation, not one which defeats the
very purpose for which they were passed. This Court has in many cases involving the
construction of statutes always cautioned against narrowly interpreting a statute as to defeat
the purpose of the legislator and stressed that it is of the essence of judicial duty to construe
statutes so as to avoid such a deplorable result (of injustice or absurdity) and that therefore "a
literal interpretation is to be rejected if it would be unjust or lead to absurd results."
There is no dispute that an alteration of the employment contract without the approval of the
Department of Labor is a serious violation of law.
Specifically, the law provides:
Article 34 paragraph (i) of the Labor Code reads:
Prohibited Practices. It shall be unlawful for any individual, entity,
licensee, or holder of authority:
xxxx
(i) To substitute or alter employment contracts approved and verified by the
Department of Labor from the time of actual signing thereof by the parties
up to and including the period of expiration of the same without the
approval of the Department of Labor.
In the case at bar, both the Labor Arbiter and the National Labor Relations Commission correctly
analyzed the questioned annotations as not constituting an alteration of the original
employment contract but only a clarification thereof which by no stretch of the imagination can
be considered a violation of the above-quoted law. Under similar circumstances, this Court ruled
that as a general proposition, exceptions from the coverage of a statute are strictly construed.
But such construction nevertheless must be at all times reasonable, sensible and fair. Hence, to
rule out from the exemption amendments set forth, although they did not materially change the
terms and conditions of the original letter of credit, was held to be unreasonable and unjust, and
not in accord with the declared purpose of the Margin Law. 19
The purpose of Article 34, paragraph 1 of the Labor Code is clearly the protection of both
parties. In the instant case, the alleged amendment served to clarify what was agreed upon by
the parties and approved by the Department of Labor. To rule otherwise would go beyond the
bounds of reason and justice.
As recently laid down by this Court, the rule that there should be concern, sympathy and
solicitude for the rights and welfare of the working class, is meet and proper. That in
controversies between a laborer and his master, doubts reasonably arising from the evidence or
in the interpretation of agreements and writings should be resolved in the former's favor, is not
an unreasonable or unfair rule. 20 But to disregard the employer's own rights and interests solely
on the basis of that concern and solicitude for labor is unjust and unacceptable.
Finally, it is well-settled that factual findings of quasi-judicial agencies like the National Labor
Relations Commission which have acquired expertise because their jurisdiction is confined to
specific matters are generally accorded not only respect but at times even finality if such
findings are supported by substantial evidence. 21
23
LABREV CASE DIGESTS
In fact since Madrigal v. Rafferty great weight has been accorded to the interpretation or
construction of a statute by the government agency called upon to implement the same.
PETITION DENIED.
THE HONGKONG AND SHANGHAI BANKING CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and EMMANUEL A. MENESES, respondents.
Complainant is a regular rank and file employee of Hongkong and Shanghai Banking Corp. Ltd.
On February 3, 1993, complainant called the bank to inform the latter that he had an upset
stomach and would not be able to report for work. His superior, however, requested him to
report for work because the department he was then in was undermanned but complainant
insisted that it was impossible for him to report for work, hence, he was allowed to go on sick
leave on that day.
Later on that day, the bank called complainant at his given Tel. No. 521-17-54 in order to obtain
vital information from him, but the bank was informed by the answering party at the phone
number given by complainant that complainant had left early that morning.
When complainant reported for work the following day, February 4, 1993, he was asked by his
superior to explain why he was not at his residence on February 3, 1993 when he was on sick
leave because of an upset stomach.
Complainant explained that he indeed suffered from an upset stomach and that he even
consulted Dr. Arthur Logos at 4:00 o'clock in the afternoon of the same day and the reason why
he could not be reached by telephone was because he had not been staying at his given
residence for over a week.
On February 4, 1993 the bank called up Dr. Logos to verify the truth of complainant's statement
but the doctor denied that he examined or attended to complainant on February 3, 1993 and
the last time complainant consulted him was in December 1992. For this reason, the bank
directed complainant to explain his acts of dishonesty because allegedly he was not honest in
telling the bank that he had an upset stomach on February 3, 1993, and that he consulted Dr.
Logos on that day.
In his written statement, by way of answer to the memorandum, complainant insisted that he
had diarrhea on February 3, 1993 and attached a certification from his aunt where he stayed
from the evening of February 2, 1993 and the whole day of February 3, 1993 as well as a
certification from his uncle named Andre R. Lozano attesting to the conversation between
complainant and Melvin Morales regarding the whereabouts of complainant on that day.
Complainant further admitted that his statement about his not staying at his house for one week
and his consulting a doctor was incorrect, but that the said statement was not given with
malicious intention or deceit or meant to commit fraud against the bank, its operations,
customers and employees. The said statement according to him was impulsive reaction as a
result of his emotional stress he had been going through because of his marital problems. He
pleaded for leniency such that instead of termination, he be given a lighter penalty.
However, on February 16, 1993, the bank came out with a memorandum from the Vice-
President, Human Resources Department terminating his services effective March 16, 1993
pursuant to Article 13, Section VI of the Collective Bargaining Agreement between the union of
the rank and file employees of the bank and the company and the bank's Code of Conduct.
The following day, February 17, 1993, the bank sent complainant another memorandum
directing him to settle his outstanding loan amounting to PH P179,834.00, net of a month's
salary the bank was paying him in lieu of notice not later than June 16, 1993. The import of the
said letter was while the effectivity of the said termination is March 16, 1993, the company
opted to pay him in lieu of the notice from February 17, 1993 up to March 16, 1993 his pay
without having to report for work.
Noting that the bank's Employee Handbook made "any form of dishonesty" a cause for
termination, the labor arbiter 3 ruled said ground to be overly broad, and stated that "(f)or us to
agree that any form of dishonesty committed by an employee of the bank is a ground for
dismissal, is to say the least stretching the import of the aforecited rule too far. "The arbiter
instead held that the offenses of dishonesty contemplated by the aforementioned rule which
would warrant termination of services are those involving deceit and resulting in loss of trust
and confidence. The arbiter further found that the private respondent's proffered excuse,
assuming it to be false, did not result in any damage to the bank, and therefore the bank had
no reason to lose its trust and confidence in the private respondent on account of such manner
of dishonesty. Additionally, the labor arbiter did not find in the record any proof that private
respondent was not really suffering from diarrhea as claimed.
Thus, in her decision dated August 13, 1993, the arbiter declared the termination illegal and
ordered petitioner bank to reinstate private respondent to his former position without loss of
seniority rights and with backwages.
On appeal, the respondent Commission sustained the arbiter's findings. Hence, this petition for
certiorari before the SC.
ISSUE: Whether any form of dishonesty as a ground for termination, under the Employee
Handbook is overly broad
SC: YES!
While the foregoing text makes "any form of dishonesty. . ." a "serious offense calling for
termination," such general statement must however be understood in the context of the
enumeration of offenses, all of which are directly related to the function of the petitioner as a
banking institution. It is unarguable that private respondent's false information concerning his
whereabouts on February 3, 1993 is not a fraud, nor a false entry in the books of the bank;
neither is it a failure to turn over clients' funds, or theft or use of company assets, or anything
"analogous" as to constitute a serious offense meriting the extreme penalty of dismissal.
Like petitioner bank, this Court will not countenance nor tolerate ANY form of dishonesty. But at
the same time, we cannot permit the imposition of the maximum penalty authorized by our
labor laws for JUST ANY act of dishonesty, in the same manner that death, which is now
reinstated as the supreme sanction under the penal laws of our country, is not to be imposed for
just any killing. The penalty imposed must be commensurate to the depravity of the
malfeasance, violation or crime being punished. A grave injustice is committed in the name of
justice when the penalty imposed is grossly disproportionate to the wrong committed.
In the context of the instant case, dismissal is the most severe penalty that an employer can
impose on an employee. It goes without saying that care must be taken, and due regard given
to an employee's circumstances, in the application of such punishment. Moreover, private
respondent's acts of dishonesty his first offense in his seven years of employment, as noted
by the respondent NLRC did not show deceit nor constitute fraud and did not result in actual
24
LABREV CASE DIGESTS
prejudice to petitioner. Certainly, such peremptory dismissal is far too harsh, too severe,
excessive and unreasonable under the circumstances.
XXX Petitioner further contends that the NLRC arbitrarily imposed its value judgment and
standard on petitioner's disciplinary rules, thereby unilaterally restricting the Bank's power and
prerogative to discipline its employees according to reasonable rules and regulations. We do not
agree. Precisely, the employer's prerogative and power to discipline and terminate an
employee's services may not be exercised in an arbitrary or despotic manner as to erode or
render meaningless the constitutional guarantees of security of tenure and due process. 7 Our
labor laws, both substantive and procedural, require strict compliance before an employee may
be dismissed. 8 Clearly, it is the NLRC's right and duty to review employers' exercise of their
prerogative to dismiss so as to prevent abuse and arbitrariness.
Indeed, upholding petitioner's argument (that the NLRC cannot review petitioner's disciplinary
rules) would mean upsetting the entire labor arbitral machinery, for it would result in depriving
the labor arbiter and the NLRC of their jurisdiction to determine the justness of a cause for
dismissal as granted by Arts. 217 and 218 of the Labor Code.
PETITION DISMISSED.
MONDS
Colgate
De Castro
Penaflor
FEMS ELEGANCE LODGING HOUSE vs. HON. MURILLO
FACTS:
Petitioner FEM's Elegance Lodging House is a business enterprise engaged in providing
lodging accommodations. It is owned by petitioner Fenitha Saavedra and managed by petitioner
Iries Anthony Saavedra. Private respondents are former employees of petitioners whose services
were terminated between March and April, 1994.
Sometime after their dismissal from the employment of petitioners, private respondents
separately filed two cases against petitioners before the National Labor Relations Commission
(NLRC) for unpaid benefits such as minimum wage, overtime pay, rest day pay, holiday pay, full
thirteenth-month pay and separation pay.
A pre-arbitration conference of the cases took place before the Labor Arbiter. It was agreed
therein: (1) that both labor cases should be consolidated; and (2) that the parties would file
their respective position papers within thirty days from said date or until June 30, 1994, after
which the cases would be deemed submitted for resolution.Petitioners filed their position paper,
however, private respondents belatedly filed their position paper.
Petitioners filed a Motion to Dismiss and Motion to Expunge Position Paper from the Records of
the Case. The Labor Arbiter issued the order denying the motions filed by petitioners. He held
that a fifteen-day delay in filing the position paper was not unreasonable considering that the
substantive rights of litigants should not be sacrificed by technicality. He cited Article 4 of the
Labor Code of the Philippines, which provides that all doubts in the interpretation thereof shall
be resolved in favor of labor.
ISSUE:
Whether or not the Labor Arbiter acted with grave abuse of discretion for issuing the
order in contravention of Section 3, Rule V of The New Rules of Procedure of the NLRC
HELD:
Petitioners claimed that they were denied due process and that the Labor Arbiter
should have cited private respondents in contempt for their failure to comply with their
agreement in the pre-arbitration conference.
We dismiss the petition for failure of petitioners to exhaust their remedies, particularly in
seeking redress from the NLRC prior to the filing of the instant petition. Article 223 of the Labor
Code of the Philippines provides that decisions, awards or orders of the Labor Arbiter
are appealable to the NLRC. Thus, petitioners should have first appealed the questioned order of
the Labor Arbiter to the NLRC, and not to this Court. Their omission is fatal to their cause.
However, even if the petition was given due course, we see no merit in petitioners' arguments.
The delay of private respondents in the submission of their position paper is a procedural flaw,
and the admission thereof is within the discretion of the Labor Arbiter.
Well-settled is the rule that technical rules of procedure are not binding in labor cases, for
procedural lapses may be disregarded in the interest of substantial justice, particularly where
labor matters are concerned (Ranara v. National Labor Relations Commission, 212 SCRA 631
[1992]).
The failure to submit a position paper on time is not one of the grounds for the dismissal of a
complaint in labor cases (The New Rules of Procedure of the NLRC, Rule V, Section 15). It
cannot therefore be invoked by petitioners to declare private respondents as non-suited. This
stance is in accord with Article 4 of the Labor Code of the Philippines, which resolves that all
doubts in the interpretation of the law and its implementing rules and regulations shall be
construed in favor of labor. Needless to state, our jurisprudence is rich with decisions adhering
to the State's basic policy of extending protection to Labor where conflicting interests between
labor and management exist (Aquino v. National Labor Relations Commission, 206 SCRA 118
[1992]).
Petitioners cannot claim that they were denied due process inasmuch as they were able to file
their position paper. The proper party to invoke due process would have been private
respondents, had their position paper been expunged from the records for mere technicality.
Since petitioners assert that their defense is meritorious, it is to their best interest that
the cases be resolved on the merits. In this manner, the righteousness of their cause can be
vindicated.
25
LABREV CASE DIGESTS
VILLA VERT VS. ECC & GSIS
FACTS:
The petitioner, Domna N. Villavert, is the mother of the late, Marcelino N. Villavert
who died of acute hemorrhagic pancreatitis on December 12, 1975 employed as a Code Verifier
in the Philippine Constabulary.
In addition to his duties as Code Verifier, Marcelino N. Villavert also performed the
duties of a computer operator and clerk typist. In the morning of December 11, 1975, Marcelino
reported as usual to the Constabulary Computer Center at Camp Crame, Quezon City. He
performed his duties not only as code verifier but also handled administrative functions,
computer operation and typing jobs due to shortage of civilian personnel. Although he was
complaining of chest pain and headache late in the afternoon of December 11, 1975, after a
whole day of strenuous activities, Marcelino was still required to render overtime service until
late in the evening of the same day, typing voluminous classified communications, computing
allowances and preparing checks for the salary of Philippine Constabulary and Integrated
National Police personnel throughout the country for distribution on or before December 15,
1975. He went home late at night and due to fatigue, he went to bed as soon as he arrived
without taking his meal. Shortly thereafter, Marcelino was noticed by his mother, the herein
petitioner, gasping for breath, perspiring profusely, and mumbling incoherent words. The
petitioner tried to wake him up and after all efforts to bring him to his senses proved futile, she
rushed Marcelino to the UE Ramon Magsaysay Memorial Hospital where he was pronounced
dead at 5:30 o'clock in the morning of December 12, 1975 without regaining consciousness. The
case of death was acute hemorrhagic pancreatitis.
Petitioner filed claim for the death benefits of Marcelino to the Government Service
Insurance System together with the affidavit of Lt. Colonel Felino C. Pacheco attesting that he
worked as code verifier and performed other additional duties. He also testified that the
deceased was computer operator consequently subject to excessive heat and cold. He also
testified that the deceased never drinks alcohol liquor nor smokes nor engages on immoral
habits. To corroborate Pachecos affidavit, Rustico P. Valenzuela, Chief Clerk of the Constabulary
Computer Center certified that indeed the deceased was performing additional work load due to
the shortage of qualified civilian personnel. He also certified that on the said date, the deceased
was complaining of chest pain and headache but he was obligated to carry on work because of
the said deadline. He also pointed out that Marcelino was not able to consult for his routine
physical check-up due to the rotation of his duties.
The petition was denied by GSIS on the ground that acute hemorrhagic pancreatitis is
not an occupational disease and the petitioner failed to show that there was causal connection
between the fatal ailment of Marcelino and the nature of his work. On the other hand, Medico-
Legal of the National Bureau of Investigation stated that the exact cause of acute hemorrhagic
pancreatitis is still unknown although the most research data are agreed that physical and
mental stresses are strong casual factors in the development of the disease.
ISSUE:
Whether or not the causal connection of occupational disease that caused death and
the nature of work should be clearly established in claiming death benefits of an employee in
GSIS
HELD:
The Medico Legal Officer of the National Bureau of Investigation stated that the exact
cause of acute hemorrhagic pancreatitis is still unknown despite extensive researches in this
field, although most research data are agreed that physical and mental stresses are strong
causal factors in the development of the disease. 5
From the foregoing facts of record, it is clear that Marcelino N. Villavert died of acute
hemorrhagic pancreatitis which was directly caused or at least aggravated by the duties he
performed as coder verifier, computer operator and clerk typist of the Philippine Constabulary.
There is no evidence at all that Marcelino N. Villavert had a "bout of alcoholic intoxication"
shortly before he died. Neither is there a showing that he used drugs.
It should be noted that Article 4 of the Labor Code of the Philippines, as amended,
provides that "All doubts in the implementation and interpretation of this Code, including its
implementing rules and regulations shall be resolved in favor of labor.
JIMENEZ vs. ECC
FACTS:
Petitioner is the widow of the late Alfredo Jimenez, who joined the government service
in June, 1969 as a constable in the Philippine Constabulary and was later on promoted to the
rank of sergeant. Sometime in April, 1976, he and his wife boarded a bus from Tuguegarao,
Cagayan, to Anulung, Cagayan. While on their way, Sgt. Jimenez, who was seated on the left
side of the bus, fell down from the bus because of the sudden stop of the vehicle. As a result, he
was confined at the Cagayan Provincial Hospital for about one (1) week, and thereafter,
released.
On November 7, 1978, the deceased was again confined at the Cagayan Provincial
Hospital and then transferred to the AFP V. Luna Medical Center at Quezon City for further
treatment. He complained of off-and-on back pains, associated with occasional cough and also
the swelling of the right forearm. The doctors found a mass growth on his right forearm, which
grew to the size of 3 by 2 inches, hard and associated with pain, which the doctors diagnosed as
"aortic aneurysm, medrastinal tumor.
Unfortunately, his ailment continued and became more serious. On May 12, 1980, he
died in his house at Anulung, Cagayan, at about 9:00 oclock in the evening. He was barely 35
years old at the time of his death. The cause of death, as found by the doctors, is "bronchogenic
carcinoma" which is a malignant tumor of the lungs.
The Board recommended "that all benefits due to or become due subject EP be paid
and settled to his legal heirs". Nevertheless, petitioner filed a claim for death benefits under PD
No. 626, as amended with the respondent GSIS. Said claim was denied by the GSIS on the
ground that her husbands death is not compensable "for the reason that the injury/sickness
that caused his death is not due to the circumstances of the employment or in the performance
of the duties and responsibilities of said employment". ECC affirmed.
ISSUE:
Whether or not the death of petitioners husband which was caused by bronchogenic
carcinoma is compensable under the law
26
LABREV CASE DIGESTS
HELD:
YES. Admittedly, cancer of the lungs (bronchogenic carcinoma) is one of those
borderline cases where a study of the circumstances of the case is mandated to fully appreciate
whether the nature of the work of the deceased increased the possibility of contracting such an
ailment. WE have ruled in the case of Dator v. Employees Compensation Commission (111 SCRA
634, L-57416, January 30, 1982) that" (U)ntil now, the cause of cancer is not known." Indeed,
the respondent has provided an opening through which petitioner can pursue and did pursue the
possibility that the deceaseds ailment could have been caused by the working conditions while
employed with the Philippine Constabulary. Respondents maintain that the deceased was a
smoker and the logical conclusion is that the cause of the fatal lung cancer could only be
smoking which cannot in any way be justified as work-connected. However, medical authorities
support the conclusion that up to now, the etiology or cause of cancer of the lungs is still largely
unknown.
WE cannot deny the fact that the causes of the illness of the deceased are still
unknown and may embrace such diverse origins which even the medical sciences cannot tell
with reasonable certainty.
The sweeping conclusion of the respondent Employees Compensation Commission to
the effect that the cause of the bronchogenic carcinoma of the deceased was due to his being a
smoker and not in any manner connected with his work as a soldier, is not in accordance with
medical authorities nor with the facts on record. No certitude can arise from a position of
uncertainty.
WE are dealing with possibilities and medical authorities have given credence to the stand of
the petitioner that her husband developed bronchogenic carcinoma while working as a soldier
with the Philippine Constabulary. The records show that when the deceased enlisted with the
Philippine Constabulary in 1969, he was found to be physically and mentally healthy. A soldiers
life is a hard one. As a soldier assigned to field duty, exposure to the elements, dust and dirt,
fatigue and lack of sleep and rest is a common occurrence. Exposure to chemicals while
handling ammunition and firearms cannot be discounted. WE take note also of the fact that he
became the security of one Dr. Emilio Cordero of Anulung, Cagayan, and he always accompanied
the doctor wherever the latter went (p. 26, rec.). Such assignment invariably involved irregular
working hours, exposure to different working conditions, and body fatigue, not to mention
psychological stress and other similar factors which influenced the evolution of his ailment.
C. Rules and Regulations (Art. 5, LC) ; Rule Making Authority/ Rule Making
Power to promulgate Implementing Rules and Regulations
Article 5. Rules and regulations. The Department of Labor and other government agencies
charged with the administration and enforcement of this Code or any of its parts shall
promulgate the necessary implementing rules and regulations. Such rules and regulations shall
become effective fifteen (15) days after announcement of their adoption in newspapers of
general circulation.
CASES
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS VS TORRES
FACTS:
PASEI is the largest national organization of private employment and recruitment agencies duly
licensed and authorized by the POEA, to engaged in the business of obtaining overseas
employment for Filipino land based workers, including domestic helpers.
On June 1, 1991, as a result of published stories regarding the abuses suffered by Filipino
housemaids employed in Hong Kong, DOLE Secretary Ruben D. Torres issued Department Order
No. 16, Series of 1991, temporarily suspending the recruitment by private employment agencies
of "Filipino domestic helpers going to Hong Kong"
Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No. 30, Series of
1991, dated July 10, 1991, providing GUIDELINES on the Government processing and
deployment of Filipino domestic helpers to Hong Kong and the accreditation of Hong Kong
recruitment agencies intending to hire Filipino domestic helpers.
On September 2, 1991, the petitioner, PASEI, filed this petition for prohibition to annul the
aforementioned DOLE and POEA circulars and to prohibit their implementation due to GAD of
the respondents in issuing the said circulars and lack of the required publication.
ISSUE: 1. WON respondents acted with grave abuse of discretion and/or in excess of their rule-
making authority in issuing said circulars. no!
2. WON the administrative issuances be enforced. no!
RULING:
1. The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not
unconstitutional, unreasonable and oppressive. It has been necessitated by "the growing
complexity of the modern society" (Solid Homes, Inc. vs. Payawal, 177 SCRA 72, 79). More and
more administrative bodies are necessary to help in the regulation of society's ramified
activities. "Specialized in the particular field assigned to them, they can deal with the problems
thereof with more expertise and dispatch than can be expected from the legislature or the
courts of justice" (Ibid.).
It is noteworthy that the assailed circulars do not prohibit the petitioner from engaging in the
recruitment and deployment of Filipino landbased workers for overseas employment. A careful
reading of the challenged administrative issuances discloses that the same fall within the
"administrative and policing powers expressly or by necessary implication conferred" upon the
respondents (People vs. Maceren, 79 SCRA 450).
The Solicitor General, in his Comment, aptly observed:
. . . Said Administrative Order [i.e., DOLE Administrative Order No.
16] merely restricted the scope or area of petitioner's business
operations by excluding therefrom recruitment and deployment of
domestic helpers for Hong Kong till after the establishment of the
"mechanisms" that will enhance the protection of Filipino domestic
helpers going to Hong Kong. In fine, other than the recruitment and
deployment of Filipino domestic helpers for Hongkong, petitioner
may still deploy other class of Filipino workers either for Hongkong
27
LABREV CASE DIGESTS
and other countries and all other classes of Filipino workers for
other countries.
2. Nevertheless, they are legally invalid, defective and unenforceable for lack of power
publication and filing in the Office of the National Administrative Register as required in Article 2
of the Civil Code, Article 5 of the Labor Code and Sections 3(1) and 4, Chapter 2, Book VII of
the Administrative Code of 1987.
Art. 2. Laws shall take effect after fifteen (15) days following the completion
of their publication in the Official Gazatte, unless it is otherwise provided. . .
. (Civil Code.)
Art. 5. Rules and Regulations. x x x Such rules and regulations shall
become effective fifteen (15) days after announcement of their adoption in
newspapers of general circulation.
Sec. 3. Filing. (1) Every agency shall file with the University of the
Philippines Law Center, three (3) certified copies of every rule adopted by
it. x x x
For lack of proper publication, the administrative circulars in question may not be enforced and
implemented.
SHELL PHILIPPINES VS CENTRAL BANK (tax related ang facts nito)
FACTS:
Congress passed an Act imposing a stabilization tax on consignments abroad which
will be enforced during the fiscal years following when the aggregate value of consignment of
US$5M is reached. Shell, during 1971, exported seria residues. On January 7, 1972, the
monetary board issued a resolution subjecting the petroleum pitch and other petroleum residues
to the stabilization tax starting January 1, 1972.
On September 14, 1972, appellee filed suit against the Central Bank before the Court
of First Instance of Manila, praying that Monetary Board Resolution No. 47 be declared null and
void, and that Central Bank be ordered to refund the stabilization tax it paid during the first
semester of 1972. Its position was that, pursuant to the provisions of RA 6125, it had to pay the
stabilization tax only from July 1, 1972.
The lower court ordered the refund and declared the resolution void. Central Bank
appealed.
ISSUE: WON the resolution is valid.
HELD: No!
While it is true that under the same law the Central Bank was given the authority to
promulgate rules and regulations to implement the statutory provision in question, we reiterate
the principle that this authority is limited only to carrying into effect what the law being
implemented provides.
In People v. Maceren (79 SCRA 450, 458 and 460), this Court ruled that:
Administrative regulations adopted under legislative authority by a particular
department must be in harmony with the provisions of the law, and should be for the sole
purpose of carrying into effect its general provisions. By such regulations, of course, the law
itself cannot be extended. An administrative agency cannot amend an act of Congress.
The rule-making power must be confined to details for regulating the mode or proceeding to
carry into effect the law as it has been enacted. The power cannot be extended to amending or
expanding the statutory requirements or to embrace matters not covered by the statute. Rules
that subvert the statute cannot be sanctioned.
The rule or regulation should be within the scope of the statutory authority granted by the
legislature to the administrative agency.
Considering the foregoing, we rule that the trial court was correct in declaring that "Monetary
Board Resolution No. 47 is void insofar as it imposes the tax mentioned in Republic Act No. 6125
on the export seria residue of (plaintiff) the aggregate annual F.O.B., value of which reached five
million United States dollars in 1971 effective on January 1, 1972." The said resolution runs
counter to the provisions of R.A. 6125 which provides that "(A)ny export product the aggregate
annual F.O.B. value of which shall exceed five million United States dollars in any one calendar
year during the effectivity of this Act shall likewise be subject to the rates of tax in force during
the fiscal year following its reaching the said aggregate value."
IBAAEU VS INCIONG
FACTS: On June 20, 1975, the petitioner filed a complaint against the respondent bank for the
payment of holiday pay before the then Department of Labor, NLRC in Manila. Conciliation
having failed, the case was certified for arbitration and later on a decision was rendered by the
Labor Arbiter granting petitioners complaint. Respondent bank complied by paying the holiday
pay to and including January 1976. On December 1975, PD 850was promulgated amending the
provisions of the Labor Code with the controversial section stating that monthly paid employees
receiving uniform monthly pay is presumed to be already paid the 10 paid legal holidays.
Policy instruction 9 was issued thereafter interpreting the said rule. Respondents bank stopped
the payment by reason of the promulgated PD 850 and Policy Instruction 9.
ISSUE: WON the monthly paid employees are excluded from the benefit of Holiday Pay.
HELD: NO! Policy Instruction No 9 is null and void.
The coverage and scope of exclusion of the Labor Code's holiday pay provisions is
spelled out under Article 82 thereof which reads: t.hqw
Art. 82. Coverage. The provision of this Title shall apply to employees in
all establishments and undertakings, whether for profit or not, but not to
government employees, managerial employees, field personnel members of
the family of the employer who are dependent on him for support domestic
helpers, persons in the personal service of another, and workers who are
paid by results as determined by the Secretary of Labor in appropriate
regulations.
... (emphasis supplied).
From the above-cited provisions, it is clear that monthly paid employees are not
excluded from the benefits of holiday pay. However, the implementing rules on holiday pay
promulgated by the then Secretary of Labor excludes monthly paid employees from the said
28
LABREV CASE DIGESTS
benefits by inserting, under Rule IV, Book Ill of the implementing rules, Section 2, which
provides that: "employees who are uniformly paid by the month, irrespective of the number of
working days therein, with a salary of not less than the statutory or established minimum wage
shall be presumed to be paid for all days in the month whether worked or not. "

It is elementary in the rules of statutory construction that when the language of the
law is clear and unequivocal the law must be taken to mean exactly what it says. In the case at
bar, the provisions of the Labor Code on the entitlement to the benefits of holiday pay are clear
and explicit - it provides for both the coverage of and exclusion from the benefits. In Policy
Instruction No. 9, the then Secretary of Labor went as far as to categorically state that the
benefit is principally intended for daily paid employees, when the law clearly states that every
worker shall be paid their regular holiday pay. This is a flagrant violation of the mandatory
directive of Article 4 of the Labor Code, which states that "All doubts in the implementation and
interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor." Moreover, it shall always be presumed that the
legislature intended to enact a valid and permanent statute which would have the most
beneficial effect that its language permits (Orlosky vs. Haskell, 155 A. 112.)

Obviously, the Secretary (Minister) of Labor had exceeded his statutory authority
granted by Article 5 of the Labor Code authorizing him to promulgate the necessary
implementing rules and regulations.

29