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People's Security, Inc. and Nestor Racho vs. Julius S. Flores and Esteban S.


G.R. No. 211312. December 5, 2016


Julius S. Flores and Esteban S. Tapiru (respondents) were security guards previously employed by People's Security, Inc.
(PSI). The respondents were assigned at the varfous facilities of Philippine Long Distance Telephone Company (PLDT)
pursuant to a security services agreement between PSI and PLDT. On October 1, 2001, however, PSI's security services
agreement with PLDT was terminated and, accordingly, PSI recalled its security guards assigned to PLDT including the
respondents. On October 8, 2001, the respondents, together with several other security guards employed by PSI, filed a
complaint for illegal dismissal with the National Labor Relations Commission (NLRC) against PLDT and PSI, claiming that
they are PLDT employees.

Thereafter, PSI assigned the respondents to the facilities of its other clients such as the warehouse of a certain Marivic
Yulo in Sta. Ana, Manila and Trinity College's Elementary Department in Quezon City.

Meanwhile, on January 13, 2003, the respondents were relieved from their respective assignments pursuant to Special
Order No. 200310108 dated January 10, 2003 issued by Col. Leonardo L. Aquino, the Operations Manager of PSI.9
Accordingly, Flores and Tapiru, on September 6 and 27, 2005, respectively, filed with the Regional Arbitration Branch of
the NLRC in Quezon City a complaint for illegal dismissal and non-payment of service incentive leave pay and cash bond,
with prayer for separation pay, against PSI and its President Nestor Racho (Racho) (collectively, the petitioners).

In their position paper, the respondents claimed that, after they were relieved from their assignment in the warehouse in
Sta. Ana, Manila on January 13, 2003, they repeatedly reported to PSI's office for possible assignment, but the latter
refused to give them any assignment. On the other hand, the petitioners, in their position paper, claimed that the
respondents were merely relieved from their assignment in the warehouse in Sta. Ana, Manila and that the same was on
account of their performance evaluation, which indicated that they were ill-suited for the said assignment.

On January 30, 2009, the LA rendered a Decision finding that the respondents were illegally from their employment and,
thus, directing the petitioners jointly and severally liable to pay the former separation pay and backwages.

On appeal, the NLRC, in its Decision dated April 14, 2010, reversed the LA Decision dated January 30, 2009. On April 25,
2013, the CA rendered the herein assailed Decision, reversing the NLRC's Decision dated April 14, 2010 and Resolution
dated June 15, 2010. In finding that the respondents were illegally dismissed, the CA found that the petitioners failed to
prove that the respondents had abandoned their work and that their defense of abandonment was negated by the filing
of a case for illegal dismissal.

In this petition for review on certiorari, the petitioners claim that the CA committed reversible error in ruling that the
respondents were illegally dismissed from their employment. They maintain that PSI never terminated the respondents'
employment. On the contrary, they claim that the respondents freely and voluntarily resigned from their employment.
They also claim that the CA erred when it ruled that they should be held jointly and solidarily liable to pay the respondents
separation pay and backwages considering that there was absolutely no allegation or proof of participation, bad faith, or
malice on the part of Racho in dealing with the respondents.


Whether respondents were illegally dismissed.

Whether Racho is jointly and solidarily liable with PSI for the payment of the monetary awards to the respondents.

1. Yes. a As rule, employment cannot be terminated by an employer without any just or authorized cause. No less than
the 1987 Constitution in Section 3, Article 13 guarantees security of tenure for workers and because of this, an employee
may only be terminated for just or authorized causes that must comply with the due process requirements mandated by
law. Hence, employers are barred from arbitrarily removing their workers whenever and however they want.

There is no merit to the petitioners' claim that the respondents were not dismissed, but merely relieved from their
respective assignments. While it is true that Special Order No. 20031010, which the petitioners issued to the respondents
on January 13, 2003, indicated that the latter were merely relieved from the warehouse in Sta. Ana, Manila, such fact
alone would not negate the respondents' claim of illegal dismissal. Indeed, the respondents pointed out that after they
were relieved from their previous assignment, the petitioners refused to provide them with new assignment.

Further, as aptly ruled by the CA, the petitioners miserably failed to prove that the respondents abandoned their work.
Abandonment is a matter of intention and cannot lightly be inferred or legally presumed from certain equivocal acts. For
abandonment to exist, two requisites must concur: first, the employee must have failed to report for work or must have
been absent without valid or justifiable reason; and second, there must have been a clear intention on the part of the
employee to sever the employer-employee relationship as manifested by some overt acts. The Court is not convinced
that the respondents failed to report for work or have been absent without valid or justifiable cause. After the petitioners
relieved them from their previous assignment in Sta. Ana, Manila, the respondents were no longer given any assignment.

What is more, PSI did not afford the respondents due process. The validity of the dismissal of an employee hinges not only
on the fact that the dismissal was for a just or authorized cause, but also on the very manner of the dismissal itself. It is
elementary that the termination of an employee must be effected in accordance with law. It is required that the employer
furnish the employee with two written notices: (1) a written notice served on the employee specifying the ground or
grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; and (2) a
written notice of termination served on the employee indicating that upon due consideration of all the circumstances,
grounds have been established to justify his termination.

Beyond dispute is the fact that no written notice was sent by PSI informing the respondents that they had been terminated
due to abandonment of work. This failure on the part of PSI to comply with the twin-notice requirement, indeed, placed
the legality of the dismissal in question, at the very least, doubtful, rendering the dismissal illegal.

2. No. Anent, the propriety of holding Racho, PSI's President, jointly and solidarily liable with PSI for the payment of the
money awards in favor of the respondents, the Court finds for the petitioners. The doctrine of piercing the corporate veil
applies only when the corporate fiction is used to defeat public convenience, justify wrong, protect fraud, or defend crime.
In the absence of malice, bad faith, or a specific provision of law making a corporate officer liable, such corporate officer
cannot be made personally liable for corporate liabilities. The respondents failed to adduce any evidence to prove that
Racho, as President and General Manager of PSI, is hiding behind the veil of corporate fiction to defeat public convenience,
justify wrong, protect fraud, or defend crime. Thus, it is only PSI who is responsible for the respondents' illegal dismissal.
Peninsula Employees Union (PEU) vs. Michael B. Esquivel, et al.

G.R. No. 218454. December 1, 2016


On December 13, 2007, Peninsula Employees Union' (PEU) Board of Directors passed Local Board Resolution No. 12, series
of 20078 authorizing, among others, the affiliation of PEU- National Union of Workers in Hotel Restaurants and Allied
Industries (NUWHRAIN), and the direct membership of its individual members thereto. On the same day, the said act was
submitted to the general membership, and was duly ratified by 223 PEU members. Beginning January 1, 2009, PEU-
NUWHRAIN sought to increase the union dues/agency fees from one percent (1% ) to two percent (2%) of the rank and
file employees' monthly salaries, brought about by PEU's affiliation with NUWHRAIN, which supposedly requires its
affiliates to remit to it two percent (2%) of their monthly salaries.

The non-PEU members objected to the assessment of increased agency fees arguing that: (a) the new CBA is unenforceable
since no written CBA has been formally signed and executed by PEU-NUWHRAIN and the Hotel; (b) the 2% agency fee is
exorbitant and unreasonable; and (c) PEU-NUWHRAIN failed to comply with the mandatory requirements for such


Whether PEU-NUWHRAIN has right to collect the increased agency fees.

Whether PEU-NUWHRAIN failed to comply with the mandatory requirements for such increase.

Whether the agency is exorbitant and unreasonable.


1. Yes. The recognized collective bargaining union which successfully negotiated the CBA with the employer is given the
right to collect a reasonable fee called "agency fee" from non-union members who are employees of the appropriate
bargaining unit, in an amount equivalent to the dues and other fees paid by union members, in case they accept the
benefits under the CBA. While the collection of agency fees is recognized by Article 259 (formerly Article 248) of the Labor
Code, as amended, the legal basis of the union's right to agency fees is neither contractual nor statutory, but quasi-
contractual, deriving from the established principle that non-union employees may not unjustly enrich themselves by
benefiting from employment conditions negotiated by the bargaining union. In the present case, PEU-NUWHRAIN's right
to collect agency fees is not disputed.

2. Yes. Case law interpreting Article 250 (n) and ( o ) of the Labor Code mandates the submission of three (3) documentary
requisites in order to justify a valid levy of increased union dues. These are: (a) an authorization by a written resolution of
the majority of all the members at the general membership meeting duly called for the purpose; (b) the secretary's record
of the minutes of the meeting, which shall include the list of all members present, the votes cast, the purpose of the
special assessment or fees and the recipient of such assessment or fees; and (c) individual written authorizations for check-
off duly signed by the employees concerned. In the present case, however, PEU-NUWHRAIN failed to show compliance
with the foregoing requirements. It attempted to remedy the "inadvertent omission" of the matter of the approval of the
deduction of two percent (2%) union dues from the monthly basic salary of each union member.

While the matter of implementing the two percent (2%) union dues was taken up during the PEU-NUWHRAIN's 8th
General Membership Meeting on October 28, 2008, there was no sufficient showing that the same had been duly
deliberated and approved. The minutes of the Assembly itself belie PEU-NUWHRAIN's claim that the increase in union
dues and the corresponding check-off were duly approved since it merely stated that "the [two percent (2%)] Union dues
will have to be implemented," meaning, it would still require the submission of such matter to the Assembly for
deliberation and approval.
3. Yes. Having failed to establish due deliberation and approval of the increase in union dues from one percent ( 1 % ) to
two percent (2% ), as well as the deduction of the two percent (2%) union dues during PEU-NUWHRAIN's 8th General
Membership Meeting on October 28, 2008, there was nothing to confirm, affirm, or ratify through the July 1, 2010 GMR.
Contrary to the ruling of the OSEC in its March 6, 2012 Order, the July 1 2010 GMR, by itself, cannot justify the collection
of two percent (2%) agency fees from the non-PEU members beginning July 2010. The Assembly was not called for the
purpose of approving the proposed increase in union dues and the corresponding check-off, but merely to "confirm and
affirm" a purported prior action which PEU-NUWHRAIN, however, failed to establish.

Corollarily, no individual check-off authorizations can proceed therefrom, and the submission of the November 2008
check-off authorizations becomes inconsequential. Jurisprudence states that the express consent of the employee to any
deduction in his compensation is required to be obtained in accordance with the steps outlined by the law, which must
be followed to the letter; however, PEU-NUWHRAIN failed to comply. Thus, the CA correctly ruled that there is no legal
basis to impose union dues and agency fees more than that allowed in the expired CBA, i.e., at one percent (1 %) of the
employee's monthly basic salary.