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G.R. No. 162308, November 22, 2006


Cuambot was an overseas worker who was deployed to Saudi Arabia to work as a car
body builder in Al Waha Workshop in Unaizah City, by petitioner G & M Philippines.
Before his two year contract was terminated Cuambot returned to the Philippines where
he filed a complaint in the NLRC against his recruitment agency, herein petitioner, for
unpaid wages, withheld salaries, refund of plane ticket and repatriation bond, later
amended to include illegal dismissal, claim for the unexpired portion of his employment
contract, actual, exemplary and moral damages, and attorney’s fees.

Petitioner, in defense, presented copies of 7 payslips issued in favor of Cuambot.

Cuambot countered that his signatures in the payslips were forged and further claims
that he never got his salaries except only for the SAR100 as monthly allowance. G&M
answered back by saying that there was great possibility that Cuambot had changed his
signature while abroad so that he could file a complaint or illegal dismissal upon his


1. whether or not the respondent’s signatures are mere forgeries

2. whether respondent executed the resignation letter


After examination of the evidence on record, the petition must fail.

The petitioner’s attempts at establishing its case are not enough to convince the court of
the veracity of its claims. Amongst other things, the petitioner failed to submit the original
copies of the pay slips and the resignation letter to prove that they were actually penned
by respondent, they failed to submit an original copy of the employment contract to
prove that they had actually given a copy of such to respondent for him to sign, and a
cursory look at the resignation letter and the handwritten payslips show that they were
written by one person.

Indeed, the rule is that all doubts in the implementation and the interpretation of the
Labor Code shall be resolved in favor of labor, in order to give effect to the policy of the
State to “afford protection to labor, promote full employment, ensure equal work
opportunities regardless of sex, race or creed, and regulate the relations between
workers and employers,” and to “assure the rights of workers to self-organization,
collective bargaining, security of tenure, and just and humane conditions of work.

It is a well-settled doctrine, that if doubts exist between the evidence presented by the
employer and the employee, the scales of justice must be tilted in favor of the latter. It is
a time-honored rule that in controversies between a laborer and his master, doubts
reasonably arising from the evidence, or in the interpretation of agreements and writing
should be resolved in the former’s favor. The policy is to extend the doctrine to a greater
number of employees who can avail of the benefits under the law, which is in
consonance with the avowed policy of the State to give maximum aid and protection of
Moreover, one who pleads payment has the burden of proving it. The reason for the rule
is that the pertinent personnel files, payrolls, records, remittances and other similar
documents – which will show that overtime, differentials, service incentive leave, and
other claims of workers have been paid – are not in the possession of the worker but in
the custody and absolute control of the employer. Thus, the burden of showing with legal
certainty that the obligation has been discharged with payment falls on the debtor, in
accordance with the rule that one who pleads payment has the burden of proving it. Only
when the debtor introduces evidence that the obligation has been extinguished does the
burden shift to the creditor, who is then under a duty of producing evidence to show why
payment does not extinguish the obligation In this case, petitioner was unable to present
ample evidence to prove its claim that respondent had received all his salaries and
benefits in full.

Petition denied for lack of merit.

G.R. No. 174631


Petitioner filed a certiorari under Rule 45 assailing the Decision dated April 21, 2006 and
Resolution dated September 7, 2006 of the Court of Appeals (CA) in CA-G.R. SP No.

Petitioner Jhorizaldy Uy was a regular employee working as a sales executive in

respondent’s CENTRO CERAMICA CORPORATION. Petitioner alleged that he was
dismissed without just cause by the company’s president when he refused to assume a
new position in the marketing department. On the same day, the president, thru a closed
door meeting, charged Uy of insubordination, terminated his services and was directed
to turn over samples and files immediately. Petitioner returned the same and thereafter
did not report to work.

On the other hand, respondent company denied dismissing petitioner.

They countered that petitioner’s poor sales performance was the reason he was being
transferred. Petitioner was given a chance, through the two memos issued to him, to
explain his failure to meet the prescribed sales quota and his failure to report for work
without informing the company of the reason therefor. But he never submitted his
explanations to his violations of the contract of employment, and abandoned his job
which is another ground for terminating his employment. He filed a complaint for illegal
dismissal against the company, its president and VP respectively. Petitioner asserted
that he is also entitled to his unpaid commission, tax refund, back wages and

The Labor Arbiter dismissed petitioners complaint on the basis of his finding that it was
petitioner who opted not to report for work since February 22, 2002, after offering to
resign (as told to his supervisor) because he could not accept his possible transfer to
another department.
Petitioner appealed to the NLRC which reversed the Labor Arbiters ruling.

Respondents elevated the case to the CA which reversed the NLRC and dismissed
petitioner’s complaint. According to the CA, petitioner by his own account had admitted
that it was he who asked for his dismissal when he narrated that during his meeting with
Sy, he had asked for his termination paper and she threatened to do so if that was what
he wanted.


Whether or not the petitioner was illegally dismissed or voluntarily resigned


The Court ruled that the petitioner was illegally dismissed and his petition for review on
certiorari is GRANTED, setting aside the Court of Appeal’s Decision and Reinstating the
NLRC’s decision with modifications. In addition to the unpaid commission of P16,581.00,
respondent Centro Ceramica Corporation is hereby ordered to pay petitioner Jhorizaldy
Uy his full back wages, inclusive of allowances, and other benefits or their monetary
equivalent, computed from the date of his dismissal on February 19, 2002 up to the
finality of this decision, and separation pay in lieu of reinstatement equivalent to one
month salary for every year of service, computed from the time of his engagement by
respondent corporation on March 21, 1999 up to the finality of this decision. The
evidence on record suggests that petitioner did not resign; He was orally dismissed by
Sy. It is this lack of clear, valid and legal cause, not to mention due process that made
his dismissal illegal, warranting reinstatement and the award of back wages. Contrary to
respondents theory that petitioners act of turning over the company files and samples is
proof of his voluntary informal resignation rather than of the summary dismissal effected
by management, petitioners decision not to report for work anymore was perfectly
understandable, as the sensible reaction of an employee fired by no less than the
company president.

The NLRC found that the dismissal of petitioner was made under questionable
circumstances, thus giving weight to petitioners assertion that he was being singled out,
the fact he was ranked second most outstanding a month prior to his alleged illegal
dismissal, notwithstanding that all sales personnel similarly could not meet the P1.5
million monthly sales quota. Such finding is reinforced by the fact that no sanction was
imposed on petitioner or any other employee for the supposed failure to meet the quota,
thereby creating the impression that the situation was tolerated by the respondents. The
subsequent memos sent to petitioner’s residence after he did not anymore report for
work only reinforce the conclusion that the belated written notice of the charge against
him his alleged failure to meet the prescribed sales quota was an afterthought on the
part of respondents who may have realized that they failed to observe due process in
terminating him.
Article 4 of the Labor Code expresses the basic principle that all doubts in the
interpretation and implementation of the Labor Code should be interpreted in favor of the
workingman. Accordingly the Court finds the NLRCs finding of illegal dismissal must be
G.R. No. 182877 August 9, 2010


Sometime in 2003, respondent conducted a company-wide job evaluation through an

independent consultant, Mercer Human Resource Consulting, Inc. As provided for in the
CBAs, respondent conducted an orientation on the job evaluation process. In a Letter
dated 24 February 2004,6 respondent informed 22 daily paid rank-and-file employees
that their positions had been classified as Job Grade Level 2.
As a result, the Monthly Employees Union demanded that the 22 daily paid rank-and-file
employees be given conversion increase, promotion increase as well as retroactive
salary increase from the time the job evaluation was completed on the ground that their
positions had been converted into a higher job grade level which amounted to a
promotion. Likewise, the Daily Employees Union asked for the adjustment of said
employees’ compensation since the conversion warranted their entitlement to the
benefits, status and privileges of a monthly paid rank-and-file employee.
The company countered that the job evaluation was merely a process of determining the
relative contribution and value of the positions in its operations and does not provide for
any adjustment in the salaries of the covered employees. The subject employees cannot
be converted to monthly paid rank-and-file employees and given a conversion increase
since they continue to occupy the same positions that they were occupying prior to the
job evaluation. They are not entitled to any promotion increase since they were never
promoted to a higher position as a Job Grade Level 2 position does not involve any
increase in their duties and responsibilities.

On 2 August 2007, Voluntary Arbitrator Renato Q. Bello ruled in favor of the unions and
awarded conversion increase and attorney’s fees to the 22 daily paid rank-and-file
employees. On appeal, the Court of Appeals ruled in favor of respondent.


Whether there was a promotion done to level 1 employees in accordance with the


There was no promotion done with respect to the level 2 employees. The job evaluation
program was undertaken to streamline respondent’s operations and to place its
employees in their proper positions or groupings. A perusal of the CBAs of the parties
showed that, as correctly ruled by the Court of Appeals, it merely provided the procedure
for the implementation of the job evaluation and did not guarantee any adjustment in the
salaries of the employees.
We are not prepared to grant any conversion or promotion increase to the 22 daily paid
rank-and-file employees since what transpired was only a promotion in nomenclature. Of
primordial consideration is not the nomenclature or title given to the employee, but the
nature of his functions.11 Based on the eight new job grade levels which respondent
adopted after the job evaluation, Job Grade Levels 1 and 2 positions are both
categorized as rank-and-file employees. Said employees continued to occupy the same
positions they were occupying prior to the job evaluation. Moreover, their job titles
remained the same and they were not given additional duties and responsibilities.
GR NO. 173882, FEBRUARY 15, 2012


Reyes hired as chief bakers in his three franchise branches of Julie’s Bakeshop in
Sibalom and San Jose, Antique. Respondents filed a separate complaints against
petitioners for underpayment of wages, payment of premium pay for holiday and rest
day, service incentive leave pay, 13th month pay, cost of living allowance (COLA) and
attorney’s fees. These complaints were later on consolidated. Subsequently, in a
memorandum dated February 16, 2000, Reyes reassigned respondents as
utility/security personnel tasked to clean the outside vicinity of his bakeshops and to
maintain peace and order in the area. Upon service of the memo, respondents, however,
refused to sign the same and likewise refused to perform their new assignments by not
reporting for work.

The Labor Arbiter (LA) expressed dismay over respondents’ lack of good faith in
negotiating a settlement and denounced the way respondents dealt with Atty. Delicana
during their discussions for a possible settlement since respondents themselves later on
informed the said tribunal that at the time of the said discussions, they no longer
considered Atty. Delicana as their counsel. Despite this, the LA still required the parties
to submit their respective position papers. As respondents’ position paper was filed late
and no evidence was attached to prove the allegations therein, the LA resolved to
dismiss the complaints.

The NLRC overruled the Decision of the LA and held that the burden of proof lies on
herein petitioners as Reyes admitted being the employer of Tolores. Hence, petitioners,
not Tolores, had the duty to advance proof. With respect to Arnaiz and Napal, the NLRC
noted that since their alleged employer was not impleaded, said respondents’ cases
should be remanded to the LA, and tried as new and separate cases. The NLRC, upon
motion for reconsideration of the said respondents’, found merit. The NLRC ruled that
respondents’ demotion in rank from chief bakers to utility/security personnel is
tantamount to constructive dismissal which entitles the, to reliefs available to illegally
dismissed employees. Also, the NLRC ratiocinated that the employer bears the burden
of proving that the employees received their wages and benefits. In this case, however,
no proof of such payment was presented by the petitioners.

In another Motion for Reconsideration dated December 18, 2003, the NLRC again
reconsidered its own ruling and held that respondents were not dismissed, either
actually or constructively, but instead willfully disobeyed the return to work order of their
employer. The NLRC upheld petitioners’ prerogative to transfer respondents if only to
serve the greater interest, safety and well-being of the buying public by forestalling
irregular acts of said employees. The NLRC then put blame on respondents’ for
disobeying the lawful order of their employer, noting that it was the same attitude
displayed by them in their dealing with their counsel, Atty. Delicana, in the proceeding
before the LA.

The CA, in its decision, found merit on the petition, ruling that the respondents’ were
constructively dismissed since their designation from chief bakers to utility/security
personnel is undoubtedly a demotion in rank which involved “ a drastic change in the
nature of work resulting to a demeaning and humiliating work condition.” Further,
respondents could not be held guilty of abandonment of work as this was negated by
their immediate filing of complaints to specifically ask for reinstatement.

W/N the the transfer/reassignment of respondents to another position without diminution in pay
and other privileges tantamount to constructive dismissal?


Yes. The CA is correct in reviewing the finding of the NLRC. As the transfer proves unbearable
to respondents as to foreclose any choice on their part except to forego continued employment,
same amounts to constructive dismissal for which reinstatement without loss of seniority rights,
full backwages, inclusive of allowances, and other benefits or their monetary equivalent,
computed from the time their compensation was withheld up to the time of their actual
reinstatement, should be granted.


In constructive dismissal cases, the employer has the burden of proving that the transfer of an
employee is for just or valid ground, such as genuine business necessity. The employer must
demonstrate that the transfer is not unreasonable, inconvenient, or prejudicial to the employee
and that the transfer does not involve a demotion in rank or a diminution in salary and other
benefits. If the employer fails to overcome this burden of proof, the employees transfer is
tantamount to unlawful constructive dismissal.

In this case, petitioners insist that the transfer of respondents was a measure of self-preservation
and was prompted by a desire to protect the health of the buying public, claiming that
respondents should be transferred to a position where they could not sabotage the business
pending resolution of their cases. According to petitioners, the possibility that respondents might
introduce harmful substances to the bread while in the performance of their duties as chief
bakers is not imaginary but real as borne out by what Tolores did in one of the bakeshops in
Culasi, Antique where he was assigned as baker.

This postulation is not well-taken. On the contrary, petitioners failed to satisfy the burden of
proving that the transfer was based on just or valid ground. Petitioner’s bare assertions of
imminent threat from the respondents are mere accusations which are not substantiated by any
proof. This Court is proscribed from making conclusions based on mere presumptions or
suppositions. An employee’s fate cannot be justly hinged upon conjectures and surmises.

The act attributed against Tolores does not even convince us as he was merely a suspected
culprit in the alleged sabotage for which no investigation took place to establish his guilt or
culpability. Besides, Reyes still retained Tolores as an employee and chief baker when he could
have dismissed him for cause if the allegations were indeed found true. In view of these, this
Court finds no compelling reason to justify the transfer of respondents from chief bakers to
utility/security personnel. What appears to this Court is that respondents transfer was an act of
retaliation on the part of petitioners due to the formers filing of complaints against them, and thus,
was clearly made in bad faith. In fact, petitioner Reyes even admitted that he caused the
reassignments due to the pending complaints filed against him.

[D]emotion involves a situation in which an employee is relegated to a subordinate or less

important position constituting a reduction to a lower grade or rank, with a corresponding
decrease in duties and responsibilities, and usually accompanied by a decrease in salary. When
there is a demotion in rank and/or a diminution in pay; when a clear discrimination, insensibility
or disdain by an employer becomes unbearable to the employee; or when continued
employment is rendered impossible, unreasonable or unlikely, the transfer of an employee may
constitute constructive dismissal.
GR No. 189947, January 25, 2012
Manila Pavilon Hotel, Owned and Operated by Acesite (Phils.) Hotel Corporation,
Petitioner VS. Henry Delada, Respondent


Henry Delada, Union President of the Manila Pavilion Supervisors Association at Manila
Pavilion Hotel (MPH), was originally assigned as Head Waiter of Rotisserie, operated by
MPH. He was reassigned as Head Waiter of Seasons Coffee Shop, operated by the
same hotel. Delada declined the transfer and instead asked for a grievance meeting on
the matter, pursuant to their Collective Bargaining Agreement, and he requested his
Head Waiter of Rotisserie position to be retained pending the grievance procedure.
Despite of the order of MPH, he refused to assume his new post at the Seasons Coffee
Shop and continued to report at Rotisserie. Several memoranda on various dates were
sent to him by MPH, for him to explain in writing why he should not be penalized for
serious misconduct, willful disobedience of the lawful orders of the employer, gross
insubordination, gross and habitual neglect of duties, and willful breach of trust.

The respondent said that since the grievance machinery under their CBA had already
been initiated, his transfer must be held in abeyance. Then, MPH initiated administrative
proceeding against him, in which he attended hearings together with union
However, no settlement was reached during the grievance meeting re: validity of MPH’s
transfer order. Respondent elevated his grievance to the Peers Resources Development
Director, but still, no settlement was reached. Respondent appealed to the Grievance
Committee level, and the said committee recommended that he proceed to the next level
of the grievance procedure, since no decision was reached. Respondent then filed a
complaint before the National Conciliation and Mediation Board. The two parties
submitted the following issues for voluntary arbitration:

1. WON the transfer is valid and justified.

2. WON the preventive suspension of the complainant is valid and justified.
3. WON the preventive suspension is a valid ground to strike.
4. WON the respondent may be held liable for moral and exemplary damages and
attorney’s fees.
5. WON the complainant may be held liable for moral and exemplary damages and
attorney’s fees.

MPH continued with the disciplinary action while the respondent’s complain re: validity of
his transfer was pending before the Panel of Voluntary Arbitrators (PVA). A 30-day
preventive suspension was ordered against the respondent. Another 90-day suspension
was imposed to the respondent based on the MPH Decision which found him guilty of
insubordination and willful disobedience of the transfer order. Delada opposed the
decision since MPH had lost its authority to proceed with the disciplinary action against
him, being the matter had been included in the voluntary arbitration.

On December 14, 2007, PVA issued a decision and ruled that the transfer order was a
valid exercise of management prerogative, and it was done in the interest of the efficient
and economic operations of MPH, and the transfer did not prejudice or inconvenience
him, neither resulted to diminution of salaries nor demotion in rank. Thus, Delada had no
valid and justifiable reason to refuse or delay compliance with the management’s
PVA also ruled that there was no legal and factual basis to support petitioner’s imposition
of preventive suspension on Delada. In addition, it ruled that MPH went beyond the 30-
day preventive suspension as prescribed by the Implementing Rules of the Labor Code,
when petitioner proceeded to impose a separate penalty of 90-day suspension on him.
MPH lost its authority to continue with the administrative proceedings for insubordination
and willful disobedience of the transfer order and to impose the penalty of 90-day
suspension. PVA acquired exclusive jurisdiction over the issue when the parties
submitted the aforementioned issues. Thus, MPH relinquished its power to impose
disciplinary action on Delada.

PVA found that there was no valid justification to conduct any strike or concerted action
because of the respondent’s preventive suspension. It was also ruled that MPH was
liable to pay back wages and other benefits since the 30-day and 90-day preventive
suspensions were invalid.

Aggrieved, the petitioners filed to CA for Motion for Reconsideration. But the CA affirmed
the PVA’s Decision and denied said motion. Then, the petitioner filed a Petition for
Review on Certiorary under Rules 45 of the Revised Rules of Court.


1. WON MPH retained the authority to continue with the administrative case
against Delada for insubordination and willful disobedience of the transfer order.
2. WON MPH is liable to pay back wages.


1. MPH 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.

The refusal to obey a valid transfer order constitutes willful disobedience of a

lawful order of an employer. Employees may object to, negotiate and seek
redress against employers for rules or orders that they regard as unjust or illegal.
However, until and unless these rules or orders are declared illegal or improper
by competent authority, the employees ignore or disobey them at their peril.
Delada cannot hide under the legal cloak of the grievance machinery of the CBA
or the voluntary arbitration proceedings to disobey a valid order of transfer from
the management of the hotel. Even though Delada’s transfer to Seasons is the
subject of the grievance machinery in accordance with their CBA, he is expected
to comply first with the said lawful directive while awaiting the results of the
decision in the grievance proceedings.

Unless the order of MPH is rendered invalid, there is a presumption of the

validity of that order. Since PVA ruled that the transfer order was a valid exercise
of management prerogative, the Decision and the Resolution of the CA affirming
the Dcision of the PVA are reversed as to this respect.

2. As a consequence to the imposition of penalty of 90-day suspension, petitioner

is not liable to pay back wages and other benefits
G.R. No. 145280. December 4, 2001
and ALBERT M. ROSARDA, respondents.


Petitioner is a learning institute in Bacoor, Cavite with Fr. Victorino as Director and
Blanco as the Principal and respondents Santos, Magcamit and Rosarda were regular
classroom teachers. The respondent’s service with the school was interrupted when
each of them was served a notice of termination of employment. On August 10, 1993,
there held a rally, organized and participated in by faculty members, parents and some
students of petitioner school aimed at calling the attention of the school administration to
certain grievances relative to substandard school facilities and the economic demands of
teachers and other employees of St. Michael’s Institute. The school principal sent each
of the respondent’s identical memoranda requiring them to explain their acts. The
investigation committee created by the petitioner school principal found that respondents
had led and actively participated in the said rally, in which they denounced the Director
of the Institute without justification and consequently recommended their termination
from service. The respondents then filed a complaint for illegal dismissal against the
petitioners. The Labor Arbiter found and declared that there was just cause for the
dismissal of the respondents’ complaints since they were guilty of dereliction of duty and
insubordination. The NLRC reversed the ruling of the Labor Arbiter and held that the
respondents had been illegally dismissed. The Court of Appeals sustained the decision
of the NLRC.


Whether or not the conduct of the respondents warranted their dismissal from their


We agree with the appellate court's conclusion that, under the attendant factual
antecedents, the dismissal meted out on the respondents for dereliction of duty for one
school day and denouncing school authority appears to be too harsh a penalty. It must
be noted that the respondents are being held liable for a first time offense and, in the
case of respondent Santos, despite long years of unblemished service. Even when an
employee is found to have transgressed the employer's rules, in the actual imposition of
penalties upon the erring employee, due consideration must still be given to his length of
service and the number of violations committed during his employment. Where a penalty
less punitive would suffice, whatever missteps may have been committed by the
employee ought not to be visited with a consequence so severe such as dismissal from
employment. Moreover, the facts, as further established on appeal in the NLRC, paint
out a picture that the respondents were singled out by the petitioners apparently for
being officers of the teachers' union which they formed, despite the fact that several
other teachers also joined the August 10, 1993 rally.
G.R. No. 119076. March 25, 2002
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ROGER SEGUN and
JOSEPHINE CLAM, accused-appellants.


Appellants Roger Segun and Josephine Clam were accused of illegally recruiting 13
persons violating Article 38 of the Labor Code. The appellants are without any license
and/or authority to engage in recruitment and placement of workers from the Department
of Labor and Employment.

According to appellant, the thirteen persons listed in the information went to the house of
Josephine Clam to ask her to help them find jobs in Cabanatuan City. Their neighbors
knew that Josephine used to work in Cabanatuan City, Pangasinan and Dagupan City.
Josephine told them that she was not a recruiter although she would help them find
work. Appellants and the thirteen persons they purportedly recruited left for Manila by
boat. Appellants paid for their fare and were able to find work for them in Manila,
Cabanatuan and other places in Luzon. Thereafter, appellants returned to Linamon.

The prosecution presented eight (8) witnesses. Appellants presented five witnesses to
support their case. The Iligan City RTC convicted appellants for violating Article 38 of the
Labor Code. Appellants contend that their guilt was not proven beyond reasonable
doubt. They maintain that it was their neighbors who approached them in the house of
Josephine Clam’s mother and solicited their assistance in their (the neighbors’) desire to
go to Manila.


Whether appellants undertook any activity constituting recruitment and placement as

defined by Article 13 (b) of the Labor Code


The crime of illegal recruitment in large scale is committed when three elements

First, the offender has no valid license or authority required by law to enable one to
lawfully engage in recruitment and placement of workers. Second, he or she undertakes
either any activity within the meaning of "recruitment and placement" defined under
Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor
Code. Third, the offender commits said acts against three or more persons, individually
or as a group.

In examining the prosecution’s evidence, we bear in mind that a conviction for large
scale illegal recruitment must be based on a finding in each case of illegal recruitment
of three (3) or more persons whether individually or as a group. While the law does not
require that at least three (3) victims testify at the trial, it is necessary that there is
sufficient evidence proving that the offense was committed against three (3) or more
persons. Testimony constituting conclusions of law has no probative value and is not
binding upon the court. The term “recruit” is a conclusion of law. If two inculpatory
facts are capable of two different interpretations, that which would favor the accused
should be adopted. In sum, the prosecution failed to elicit from many of its witnesses the
specific acts constituting the recruitment of the other alleged victims. The prosecution
was able to prove that appellants performed recruitment activities only in the cases of
Victoria Collantes and Loreta Cavan. The third element of illegal recruitment, i.e., that
the offender commits the acts of recruitment against three or more persons is, therefore,
absent. Consequently, appellants can be convicted only of two counts of "simple" illegal
GR NO 177498, JANUARY 10, 2012


On March 6, 1995, Sulpecio Madequillo filed a complaint before the Adjudication Office
of POEA against the petitioners for illegal dismissal under a first contract and failure to
deploy under a second contract.

Madequillo alleged in his complaint affidavit that he was hired by Stolt Nielsen Marine
Services Inc. on behalf of Chung Gai Ship Management of Panama as 3rd Assistant
Engineer on board the vessel “Stolt Aspiration” for a period of 9 mos. And to be paid
monthly for $ 808.00 and a fixed OT pay of $404.00, a total of $ 1.212.00/ month.

For nearly 3 mos. Of rendering services and while the vessel was at Batangas, he was
ordered by ship’s master to disembark the vessel and repatriated back to Manila for no
reason. Upon his return he was transferred employment by the petitioner’s office with
another vessel named MV Stolt Pride under the same terms and conditions of the first
contract. This second contract was noted and approved by the POEA without knowledge
that he was not deployed with the vessel. He made a follow-up but the petitioner refused
to comply with the second contract and he was as well constrained to sign the document
involuntarily in exchange of his employment documents.

Stolt contended that they were denied due process and that the respondent cannot be
considered dismissed from employment because he was not even deployed yet and the
monetary award of $12,537.00 was exorbitant and not in accordance with law.


How will the seafarer be compensated by reason of the unreasonable non-deployment

of Stolt.


The POEA rules governing the recruitment and employment of seafarers do not provide
for the award of damages to be given in favour of the employees. However, the absence
of the POEA rules with regard to the payment of damages does not mean that the
seafarer is precluded from claiming the same.

We thus decree the application of Sec 10 of RA 8042 which provide for money claims by
reason of contract.

Petitioners appeal is denied and CA’s decision affirming NLRC’s decision upholding the
finding of unjustified termination of contract and denying stolt’s claim for the monetary
award to be limited only to 3 mos. for every year of the unexpired term of the contract is
hereby affirmed. The petitioners are hereby ordered to pay res. The award of actual
damages equivalent to his salary for 9 months as provided by the second contract.
G.R. NO. 174158. JUNE 27, 2011


Our labor laws are enacted not solely for the purpose of protecting the working class but
also the management by equally recognizing its right to conduct its own legitimate
business affairs. In November 1991, William Barroga was hired as an instructor by Data
Center College in its Laoag City, Ilocos Norte campus. In June 1992, Barroga was re-
assigned to Vigan, Ilocos Sur. Part of the deal for his re-assignment was that Barroga
will receive a monthly allowance of P1,200.00 for board and lodging while performing his
job in Vigan. However, Data Center made it clear in writing that Barroga is only entitled
to the additional allowance while assigned in Vigan and such allowance may be changed
or forfeited if he will be re-assigned somewhere. In 1994, he was recalled to Laoag.
Later, Barroga was also assigned as the temporary Head of Education; he was also
given a scholarship grant to support his post-graduate studies. In 2003, Barroga was
advised that he will be transferred to Bangued, Abra. Barroga refused because his father
was sick and second, he found out that there will be no additional allowance this time
and that he will be working there as an instructor and not as a Head of Education. In the
same year, he filed a labor case against Data College for constructive dismissal.
Barroga alleged that the real purpose of his transfer is to demote him to the rank of an
instructor from being the Head for Education performing administrative functions and
that his re-assignment will entail an indirect reduction of his salary or diminution of pay
considering that no additional allowance will be given to cover for board and lodging
expenses. He claims that such additional allowance was given in the past and therefore
cannot be discontinued and withdrawn without violating the prohibition against non-
diminution of benefits.


Whether or not the absence of additional allowance in Barroga’s supposed re-

assignment constitutes a diminution of benefits.


No, the absence of additional allowance in Barroga’s supposed reassignment does not
constitute a diminution of benefits. As a general rule, benefits and perks enjoyed by
employees cannot be reduced and discontinued or diminished. But this rule is only
applicable to grants or benefits which are founded on an express policy or has ripened
into a practice over a long period which is consistent and deliberate. In this case,
Barroga’s additional allowance while in Vigan is not permanent. In fact, Data College
made clear that such allowance is only applicable while Barroga is in Vigan and such
allowance is no longer applicable if he is going to be assigned somewhere. Further, Data
College showed that it is experiencing financial difficulties hence the need to withdraw
the scholarship previously granted to Barroga. On the issue of his removal as Head for
Education, the same is valid. Barroga was merely assigned in a temporary capacity,
such designation is terminable at the pleasure of Data College which made such
G.R. No. 192558, February 15, 2012


Javier an employee of Fly Ace performing various work for the latter filed a complaint
before the NLRC for underpayment of salaries and other labor standard benefits.
He alleged that he reported for work from Monday to Saturday from 7:00 o’clock in the
morning to 5:00 o’clock in the afternoon; that during his employment, he was not issued
an identification card and pay slips by the company; that he reported for work but he was
no longer allowed to enter the company premises by the security guard upon the
instruction of Ruben Ong (Mr. Ong), his superior; that after several minutes of begging to
the guard to allow him to enter, he saw Ong whom he approached and asked why he
was being barred from entering the premises; that Ong replied by saying, “Tanungin mo
anak mo”; that he discovered that Ong had been courting his daughter Annalyn after the
two met at a fiesta celebration in Malabon City; that Annalyn tried to talk to Ong and
convince him to spare her father from trouble but he refused to accede; that thereafter,
Javier was terminated from his employment without notice; and that he was neither
given the opportunity to refute the cause/s of his dismissal from work; Javier presented
Bengie Valenzuela’s affidavit to support his allegations.

Fly Ace denied the existence of employer-employee relationship between them and
Javier as the latter was only called roughly 5 to 6 times only in a month whenever the
vehicle of its contracted hauler, Milmar Hauling Services, was not available. Fly Ace no
longer needed the services of Javier. Denying that he was their employee and insisted
that there was no illegal dismissal. Fly Ace submitted a copy of its agreement with
Milmar Hauling Services and copies of acknowledgment receipts evidencing payment to
Javier for his contracted services bearing the words, daily manpower (pakyaw/piece rate
pay) and the latters signatures/initials.

Labor Arbiter dismissed the complaint ruling that respondent Fly Ace is not engaged in
trucking business but in the importation and sales of groceries. Since there is a regular
hauler to deliver its products, we give credence to Respondents claim that complainant
was contracted on pakiao basis.

On appeal, NLRC reversed the decision of the LA. It was of the view that a pakyaw-
basis arrangement did not preclude the existence of employer-employee relationship.
Payment by result x x x is a method of compensation and does not define the essence of
the relation. It is a mere method of computing compensation, not a basis for determining
the existence or absence of an employer-employee relationship. The NLRC further
averred that it did not follow that a worker was a job contractor and not an employee, just
because the work he was doing was not directly related to the employers trade or
business or the work may be considered as extra helper as in this case; and that the
relationship of an employer and an employee was determined by law and the same
would prevail whatever the parties may call it. Finding Javier to be a regular employee,
the NLRC ruled that he was entitled to a security of tenure. For failing to present proof of
a valid cause for his termination, Fly Ace was found to be liable for illegal dismissal of
Javier who was likewise entitled to backwages and separation pay in lieu of

However, on appeal, CA reversed the ruling of NLRC.

The CA ruled that Javier’s failure to present salary vouchers, pay slips, or other pieces of
evidence to bolster his contention, pointed to the inescapable conclusion that he was not
an employee of Fly Ace. Further, it found that Javier’s work was not necessary and
desirable to the business or trade of the company, as it was only when there were
scheduled deliveries, which a regular hauling service could not deliver, that Fly Ace
would contract the services of Javier as an extra helper. Lastly, the CA declared that the
facts alleged by Javier did not pass the control test.

He contracted work outside the company premises; he was not required to observe
definite hours of work; he was not required to report daily; and he was free to accept
other work elsewhere as there was no exclusivity of his contracted service to the
company, the same being co-terminous with the trip only. Since no substantial evidence
was presented to establish an employer-employee relationship, the case for illegal
dismissal could not prosper.


Does an employer-employee relationship exist between Javier and Fly Ace, thereby
holding the latter guilty of illegal dismissal?


The LA and the CA found Javier’s claim of employment with Fly Ace as wanting and
deficient. The Court is constrained to agree. Labor officials are enjoined to use
reasonable means to ascertain the facts speedily and objectively with little regard to
technicalities or formalities but nowhere in the rules are they provided a license to
completely discount evidence, or the lack of it. The quantum of proof required, however,
must still be satisfied. Hence, when confronted with conflicting versions on factual
matters, it is for them in the exercise of discretion to determine which party deserves
credence on the basis of evidence received, subject only to the requirement that their
decision must be supported by substantial evidence. Accordingly, the petitioner needs to
show by substantial evidence that he was indeed an employee of the company against
which he claims illegal dismissal.

In sum, the rule of thumb remains: the onus probandi falls on petitioner to establish or
substantiate such claim by the requisite quantum of evidence. Whoever claims
entitlement to the benefits provided by law should establish his or her right thereto x x x.
Sadly, Javier failed to adduce substantial evidence as basis for the grant of relief.

By way of evidence on this point, all that Javier presented were his self-serving
statements purportedly showing his activities as an employee of Fly Ace. Clearly, Javier
failed to pass the substantiality requirement to support his claim. Hence, the Court sees
no reason to depart from the findings of the CA.

While Javier remains firm in his position that as an employed stevedore of Fly Ace, he
was made to work in the company premises during weekdays arranging and cleaning
grocery items for delivery to clients, no other proof was submitted to fortify his claim. The
lone affidavit executed by one Bengie Valenzuela was unsuccessful in strengthening
Javier’s cause.

The Court is of the considerable view that on Javier lies the burden to pass the well-
settled tests to determine the existence of an employer-employee relationship, viz:
(1) the selection and engagement of the employee; (2) the payment of wages; (3)
the power of dismissal; and (4) the power to control the employees conduct. Of
these elements, the most important criterion is whether the employer controls or has
reserved the right to control the employee not only as to the result of the work but
also as to the means and methods by which the result is to be accomplished.

The petition is DENIED

G.R. No. 168654 March 25, 2009ZA


Respondent KPMG Mananghaya & Co. hired petitioner Zayber John B. Protacio as Tax
Manager in 1996.He was subsequently promoted as Senior Tax Manager then as Tax
Principal in 1 October 1997.However, petitioner resigned effective 30 September 1999.
On 1 December 1999, petitioner sent a letter to responded firm demanding
the immediate payment of his 13th month pay, the cash commutation of his leave credits
and the issuance of his 1999 Certificate of Income Tax Withheld on Compensation. He
sent two more demand letters for the payment of his reimbursement claims under pain of
a legal action. Respondent firm failed to act upon the demand letters. Thus, on 15
December 1999, petitioner filed before the NLRC a complaint for the non-issuance of
petitioner’s W-2 tax form for 1999 and the non-payment of the following benefits: 1) cash
equivalent of petitioner’s leave credits in the amount of P55,467.60; 2) proportionate
13th month pay for 1999; 3) reimbursement claims of P19,012; and 4) lump sum pay for
the FY 1999 of P674,756.7. He also sought moral and exemplary damages and
attorney’s fees. During the pendency of the case, respondent firm on three occasions
sent check payments to petitioner in the following amounts:

1) P17, 250 13th month pay;

2) P54, 824.18 cash equivalent of his leave credits and reimbursement claims;

3) P10, 762.57 refund of taxes withheld on his vacation leave credits.

Petitioner acknowledged the receipt of the 13th month pay but disputed the computation
of the cash value of his vacation leave credits and reimbursement claims.

The Labor Arbiter rendered a decision, ordering respondent to pay complainant the

P12,681 reimbursement claims;

P28,407.08 for underpayment of cash equivalent of the unused leave credits;

P573,000 year-end lump sum payment for 1999, and;

10% of total judgment awards way of attorney’s fees.

The Labor Arbiter held that the respondent firm had erroneously based the computation
of the cash equivalent of the leave credits on a basic pay of P61,000. He held that
evidence showed that petitioner’s monthly basic salary was P95,000 inclusive of the
other benefits that were deemed included and integrated in the basic salary and that
respondent firm had computed petitioner’s 13th month pay based on a monthly basic pay
of P95,000, thus the cash commutation of the leave credits should also be based on this
figure. The Labor Arbiter also ruled that petitioner was entitled to a year-end payment of
P573,000 on the basis of the company policy of granting yearly lump sum payments
to petitioner during all the years of service and that respondent firm had failed to
give petitioner the same benefit for 1999 without any explanation.

Whether or not petitioner is entitled to the year-end lump sum as part of his
compensation package.


While the amount was drawn from the annual net income of the firm, the distribution to
non-partners of employees of the firm was not a profit-sharing arrangement contrary to
CA’s finding. The payment to non-partners like the petitioner was discretionary on
the part of the chairman and managing chairman coming from their authority to fix
compensation of any employee based on a share in the partnership’s net income. The
distribution being merely discretionary, the year-end lump sum payment may properly be
considered as a year-end bonus or incentive. Contrary to petitioner’s claim, the granting
of the year end lump sum amount was payable only after the firm’s annual net income
and cash position were determined.

The granting of the bonus is basically a management prerogative which cannot be

enforced upon the employer who may not be obliged to assume the onerous burden of
granting bonuses or other benefits aside from the employees’ basic salaries or wages.
Respondents had consistently maintained that petitioner was not entitled to the bonus as
a matter of right. The payment of the year-end lump sum bonus based upon the firm’s
productivity or the individual performance of his employees was well within respondent
firm’s prerogative. Thus, respondent was also justified in declining to give the bonus to
petitioner on account of the latter’s unsatisfactory performance. The granting of the year-
end lump sum bonus was discretionary and conditional, thus, petitioner may not
question the basis for the granting of a mere privilege. The monthly compensation of
P71,250 used as base figure by the CA is totally without basis. As correctly held by the
Labor Arbiter and the NLRC, the evidence on record reveals that petitioner was
receiving a monthly compensation of P95,000 consisting of a basic salary of
P61,000, advance incentive pay ofP15,000, transportation allowance of P15,000, and
representation allowance of P4,000, totaling to P95,000 and are all deemed part of
petitioner’s monthly compensation package, and as such, should be the basis in the
cash commutation of his leave credits. These allowances were customarily furnished by
respondent firm and regularly received by the petitioner on top of the basic monthly pay
of P61, 000. Moreover, respondent firm’s act of paying petitioner a 13thmonth pay at the
rate of P95, 000 was as admission that petitioner’s basic monthly salary was P95, 000.

The Court was also perplexed on the use of the CA, the Labor Arbiter and the NLRC of a
30-working day divisor instead of 26 days which petitioner insists and which even the
respondent firm used in the cash commutation of leave credits. The reliance of CA on
Section 2, Rule IV, Book III of the Implementing Rules of Labor Code in using the 30-day
working divisor is inapplicable to the instant case because it referred to the computation
of holiday pay for monthly-paid employees. Thus, with a monthly compensation of P95,
000 and using a 26-working day divisor, petitioner’s daily rate is P3, 653.85. Based on
this rate, petitioner’s cash equivalent of his leave credits of 23.5 is P85, 865.48. Since he
has already received the amount of P46, 009.67, a balance of P39, 855.80 remains
payable to petitioner. Wherefore, the instant petition for review on certiorari is partly
granted. The Decision of the CA is affirmed with the modification that respondents are
liable for the underpayment of the cash equivalent of petitioner’s leave credits in the
amount of P39, 855.80.