Statutory Reference: Art. XIII, Sec. 3 of the Constitution, Art.

293-296 of the
Labor Code and related provisions in the Omnibus Rules

Topics: Coverage, Security of Tenure, Rules on imposition of penalties,

dismissal, termination of employment by employee, resignation,
suspension of employment

Cases:

Quijano vs. Bartolabac, 480 SCRA 204, AC No. 5629,

January 27, 2006
FACTS:
On 19 March 2002, complainant Dandy Quijano filed before this Court a verified complaint
written in Pilipino against herein respondents Atty. Geobel A. Bartolabac (Bartolabac),
Labor Arbiter of the National Labor Relations Commission (NLRC), and Commissioner
Alberto R. Quimpo (Quimpo) of the same Commission for violating Canon 1 and Rule
1.01 of the Code of Professional Responsibility.
According to complainant, respondents violated his constitutional right to due process in
failing to execute the final and executory judgment of this Court in G.R. No. 126561
entitled Quijano v. Mercury Drug Corporation.
The antecedent facts are as follows:
Complainant was dismissed from service by the Mercury Drug Corporation (corporation).
He filed a complaint for illegal dismissal before the NLRC. Eventually, the case was
elevated to this Court. On 8 July 1998, the Court promulgated its Decision in favor of
herein complainant ordering, among others, his reinstatement. The corporation’s motion
for reconsideration was denied by this Court in its Resolution dated 5 July 1999.
Complainant relates that he filed with respondent Labor Arbiter Bartolabac a motion for
execution on 9 December 1998 but despite the final resolution of his case, Bartolabac
issued an order that in effect changed the tenor of the final judgment. While the decision
of this Court had mandated complainant’s reinstatement, Bartolabac instead awarded
back wages and separation pay.
Pursuant to the Resolution of this Court, Bartolabac issued an alias writ of execution on
18 February 2000. However, respondent Bartolabac allegedly again unilaterally issued
another order dated 5 April 2000, amending his previous order and assigning the
complainant to the position of self-service attendant of the corporation instead of his
original position of warehouseman. Subsequently, respondent Commissioner Quimpo
overturned the above order of Bartolabac and directed the payment of separation pay
rather than reinstatement to a substantially similar position as ordered by this Court.
ISSUE:
Whether or not respondents are liable for their acts in deviating from the final and
executory judgment of this Court in G.R. No. 126561.
HELD:
The Court is unyielding in its adjudication that complainant must be reinstated to his
former position as warehouseman or to a substantially equivalent position.
Clearly, the Court is unwilling to accept the corporation and respondent labor arbiter’s
reason that reinstatement is no longer feasible because the position of warehouseman
had already been abolished and there is no substantially equivalent position in the
corporation.
Both respondents labor arbiter and commissioner do not have any latitude to depart from
the Court’s ruling. The Decision in G.R. No. 126561 is final and executory and may no
longer be amended. It is incumbent upon respondents to order the execution of the
judgment and implement the same to the letter. Respondents have no discretion on this
matter, much less any authority to change the order of the Court. The acts of respondent
cannot be regarded as acceptable discretionary performance of their functions as labor
arbiter and commissioner of the NLRC, respectively, for they do not have any discretion
in executing a final decision. The implementation of the final and executory decision is
mandatory.
As held in Siy v. National Labor Relations Commission and Embang:
Once the case is decided with finality, the controversy is settled and the matter is laid to
rest. The prevailing party is entitled to enjoy the fruits of his victory while the other party
is obliged to respect the court’s verdict and to comply with it. We reiterate our
pronouncement in Salicdan v. Court of Appeals:
Well-settled is the principle that a decision that has acquired finality becomes immutable
and unalterable and may no longer be modified in any respect even if the modification is
meant to correct erroneous conclusions of fact or law and whether it will be made by the
court that rendered it or by the highest court of the land.
Again, we are unceasing in emphasizing that the decision in the labor case has become
final and executory since 1999. There can be no justification for the overturning of the
Court’s reinstatement order by the NLRC First Division and full satisfaction of the
monetary award of only three (3) years after the finality of the judgment.
The Court is not wont to compel the corporation to instantly restore the position of
warehouseman if it has been already abolished. Indeed, the Court granted that
complainant could be reinstated to a substantially equivalent or similar position as a viable
alternative for the corporation to carry out.
WHEREFORE, premises considered, the Court finds respondents liable for violating
Canon 1 and Rule 1.01 of the Code of Professional Responsibility. Respondents Labor
Arbiter Geobel A. Bartolabac and Commissioner Alberto R. Quimpo are hereby
SUSPENDED from the practice of law for a period of THREE (3) months.

Labajo vs. Alejandro, 165 SCRA 747, GR 80383, Sep.

26, 1988
NATURE
Petition for certiorari with preliminary injunction to review NLRC resolution

FACTS
- The 6 private respondents had all been contracted by the petitioners to work as
classroom teachers at the San Andres HS, a private learning institution situated in
Maramag, Bukidnon. They then filed a complaint before the Ministry of Labor and
Employment, alleging that they had each received a letter from petitioner Fr. Labajo,
Director of the San Andres High School which contained: “Please be informed that your
service at the San Andres High School will be terminated effective March 31, 1985.Thank
you for all services you have rendered to the school.” Thus, their dismissal was without
justifiable cause and violated their rights to due process and security of tenure.
Petitioners’ Claims
> It was admitted that they had not paid in full the employment benefits claimed by the
teachers. It was alleged, however, that private respondents, prior to their acceptance of
teaching jobs at the San Andres High School, "were already made aware that the school
could not give them everything due them under existing laws" and, hence, were estopped
from claiming such benefits.
> At time of their dismissal, they were merely probationary employees of the San Andres
HS whose services were terminated for just cause (upon expiration on 31 March 1985 of
their respective contracts and before any of them had achieved regular or permanent
status in their jobs.)
* Labor Arbiter ruled in favor of the teachers. It held that they were not probationary
employees, and that they could only be dismissed for cause and only after having been
accorded due process.
* NLRC affirmed Labor Arbiter’s decision.

ISSUE
WON the respondents were illegally dismissed

HELD
NO
Ratio As probationary and contractual employees, private respondents enjoyed security
of tenure, but only to a limited extent — i.e., they remained secure in their employment
during the period of time their respective contracts of employment remained in effect. As
petitioners were not under obligation to renew those contracts of employment, the
separation of private respondents in this case cannot be said to have been without
justifiable cause, much less illegal.
Reasoning
- Par 75 of the Manual of Regulations for Private Schools is applicable in this case: “Full-
time teachers who have rendered three years of satisfactory service shall be considered
permanent.” This 3-year period is the maximum period or upper limit of probationary
employment allowed. Whether or not one has indeed attained permanent status in one's
employment, before the passage of 3 years, is a matter of proof.
- NONE of them had been able to accumulate at least 3 years of service with the San
Andres HS at the time of their separation.
- Private respondent AMAR argued that the 12 years of teaching experience he had
accumulated prior to his acceptance of employment at San Andres qualified him as a
regular employee thereof. This is not persuasive since it is the length of time Mr. Amar
has been teaching at San Andres that is material in determining whether or not he in fact
qualified as a regular employee.
- Respondent ALEJANDRO asserted that her appointment as "Night Principal" — after
having served a year thereat as a non-regular full-time teacher — amounted to a
promotion which raised her status to that of a regular employee. This is also not
persuasive because mere appointment as "Night Principal" is not, by itself and absent
any additional evidence, sufficient proof that her employment status had in fact been
upgraded from probationary to regular.
- The contracts of employment entered into by the San Andres HS separately with each
of the respondents stipulated, among others: (a) that employment of the individual
concerned took effect at the beginning of the school year, or sometime in the month of
June; and (b) that payment of that individual's salary would be made "every month for 10
months." We read these stipulations together to mean that such contracts each had an
effective term of ten (10) months, i.e., from June until either March or April of the following
year. New contracts for another period of ten months were negotiated between them at
the beginning of each school year. It does not appear from the record or from the
stipulations in those contracts, however, that renewal was obligatory upon either party.
- Private respondents claimed that Fr. Labajo’s allegedly "unusual antedated letter of
termination" did not sufficiently inform them of the reasons for their dismissal, nor did it
satisfy the due process requirements in termination cases. These contentions ignore the
fact that their employment was on a contractual basis and for a stipulated period of time.
- The use of the word "terminated" was inept and unfortunate but need not preclude
recognition of the real nature of that letter. Such letter was either a formal reminder that
their contracts were due to expire OR advance notice that such contracts would no longer
be renewed for the next school year OR both. Assuming that prior notice of expiration of
the contractual term was necessary in this case, we consider that Fr. Labajo's letter
substantially complied with that requirement.
* Since the six (6) private respondents were not illegally dismissed, the twin remedies of
reinstatement and backwages are not available to them. Dispositive NLRC Resolution
is SET ASIDE, except for the portion directing petitioners to pay P52,173.67 in favor of
private respondents.
Skillworld vs NLRC, 186 SCRA 465, GR 74412, June
13, 1990
NATURE
Petition for certiorari
FACTS
- On June 24, 1983, Francisco Manuel was deployed to Saudi Arabia to work as driver
by petitioner Skillworld Management and Marketing, a duly licensed recruitment agency
operated by petitioners-spouses Serafin and Alicia Ramos. Upon his arrival in Jeddah,
Manuel signed a 2-year employment contract with his foreign employer, petitioner Shary
Limousine for a monthly basic salary of $300. 2 months later, Manuel was repatriated to
the Philippines. Upon his arrival in the Philippines, Manuel confronted the Ramoses who
promised to deploy him to other projects.
- After the lapse of more than one year without being deployed to other projects of
petitioners, Manuel filed a complaint with the POEA against petitioners for illegal
dismissal. He alleged that while he was employed as driver of Shary Limousine in its
branch at Jeddah he was stopped, and his driver's license sought for inspection, by Saudi
Arabian police. He showed the police two documents given to him by his employer, Shary
Limousine who made him believe that these pertained to a driver's temporary license.
However, Manuel was informed that the documents were not valid for a drivers license.
Together with eleven other drivers, they brought the matter before their superiors. Three
days after bringing the matter to his superior, respondent was ordered to pack his things.
He was taken to Riyadh and from there, repatriated to the Philippines. Upon respondent's
arrival in the Philippines, he requested the Ministry of Foreign Affairs for a translation of
what purported to be his driver's license. When translated it was only a certification of
employment with Shary Limousine in its branch at Jeddah.
- Petitioners alleged that Manuel’s dismissal was for a valid and just cause. Petitioners
alleged that Manuel was dismissed because of disobedience, absenteeism, refusal to
work and banding together to engage in concerted activities against the employer.
- POEA rendered judgment in favor of Manuel, directing petitioners to pay him $6,900.00
or its peso equivalent. Upon appeal, the NLRC affirmed said decision.
- According to petitioners, because of the probationary status of the employment of
Manuel, he may be dismissed at any time. Furthermore, this agreement was contained in
paragraph four (4) of the employment contract signed by Manuel.
ISSUE
WON Manuel was illegally dismissed
HELD
YES
- There is no dispute that as a probationary employee, Manuel had but a limited tenure.
Although on probationary basis, however, he still enjoys the constitutional protection on
security of tenure. During his tenure of employment therefore, or before his contract
expires, he cannot be removed except for cause as provided for by law.
- The alleged causes for which private respondent was dismissed (disobedience,
absenteeism, refusal to work, etc.) were not established. Respondent NLRC found that
the purported temporary licenses to drive issued to Manuel and his co-drivers by their
employer-the Shary Rent a Car/Limousine, turned out to be mere certifications to the
effect that they are Filipino citizens who are holders of given passport numbers and that
they were sent to work with the Shary Limousine Branch in Jeddah. It is for this reason
that after being accosted twice at checkpoints by Saudi police, who informed complainant
and his co-drivers that the alleged temporary licenses were not valid, they brought the
matter first to their Lebanese superior and then to the Philippine Embassy. - - Further,
records show that Manuel reported for work regularly and even rendered regular overtime
services; that he did not even attempt to join a strike or any other form of mass action
while working in Jeddah, because he knew that the laws in Jeddah are very strict and
being a foreigner he did not have the courage to join much less lead a strike which is
prohibited there; that he and his co-workers merely inquired from the Philippine Embassy
why they were allowed to drive without licenses; and that their action prompted the
Philippine Embassy to write their employer, which is perfectly in order as it was designed
to protect them in foreign soil.

Interorient Maritime vs. NLRC, 235 SCRA 268, GR

115286, Aug. 11, 1994
NATURE
PETITION for reviewof a decision of the National Labor Relations Commission
FACTS
- Captain Rizalino Tayong, a licensed Master Mariner with experience in commanding
ocean-going vessels, was employed on 1989 by petitioners for 1 yr as stated in his
employment contract. He assumed command of petitioners’ vessel at the port of
Hongkong. His instructions were to replenish bunker and diesel fuel, to sail to South Africa
and there to load 120,000 metric tons of coal. However, while in HK and unwarding cargo,
he received a weather report that a storm would hit HK, so precautionary measures were
taken to secure the safety of the vessel and its crew, considering that the vessel’s turbo-
charger was leaking and the vessel was 14 yrs old. He also followed-up the
requisition by the former captain for supplies of oxygen and acetylene necessary for the
welding-repair of the turbo-charger and the economizer.
-The vessel then sailed from HK for Singapore. Captain Tayong reported a water leak
from M.E. Turbo Chapter No. 2 Exhaust gas casing so he was instructed to black
off the cooling water and maintain reduced RPM unless authorized by the owners.
However, the vessel stopped in mid-ocean for 6 hrs and 45 minutes due to a leaking
economizer. He was instructed to shut down the economizer and use the auxiliary boiler
instead.
- The Chief Engineer reminded Captain Tayong that the oxygen and acetylene supplies
had not been delivered. He then informed the shipowner that the departure of the vessel
for South Africa may be affected because of the delay in the delivery of the supplies. The
shipowner advised Captain Tayong to contact its technical director who would provide a
solution for the supply of said oxygen and acetylene. The technical director recommended
to Captain Tayong that by shutting off the water to the turbo charger and using the
auxiliary boiler, there should be no further problem. Captain Tayong agreed to the
recommendation of the technical director, but communicated his reservations regarding
proceeding to South Africa without the requested supplies. So the shipowner advised him
to wait for the supplies.
- Finally, the vessel arrived at South Africa. However, Captain Tayong was instructed to
turn-over his post to the new captain, and was repatriated to the Philippines after serving
petitioners for around 2 wks. He was not informed of the charges against him, and was
just sent a letter after arriving in the Philippines. He therefore instituted a complaint for
illegal dismissal before the POEA, claiming his unpaid salary for the unexpired portion of
the written employment contract, plus attorney’s fees.
- POEA: dismissed complaint, there was valid cause for his untimely repatriation (the
company alleged that due to Captain Tayong’s refusal to sail immediately to South Africa,
the vessel was placed “off-hire” by the charterers, and the charterers refused to pay the
charter hire or compensation corresponding to 12 hours, amounting to US
$15,500.00.They fired Captain Tayong for lost of confidence; POEA believed that the
Captain’s concern for the oxygen and acetylene was not legitimate as these supplies were
not necessary or indispensable for running the vessel.)
- NLRC: reversed and set aside POEA decision because Captain Tayong had not been
afforded an opportunity to be heard and that no substantial evidenced was adduced to
establish the basis for petitioners’ loss of trust or confidence. Captain had acted in
accordance with his duties to maintain the seaworthiness of the vessel and to insure the
safety of the ship and crew.
ISSUE
WON Captain Tayong was arbitrarily dismissed and without cause as reasonably
established in an appropriate investigation (whether or not Captain Tayong had
reasonable grounds to believe that the safety of the vessel and the crew under his
command or the possibility of substantial delay at sea required him to wait for the
delivery of the supplies needed for the repair of the turbo-charger and the
economizer before embarking on the long voyage from Singapore to South Africa)
HELD
YES
Ratio It is well settled in this jurisdiction that confidential and managerial employees
cannot be arbitrarily dismissed at any time, and without cause as reasonably
established in an appropriate investigation. Such employees, too, are entitled to
security of tenure, fair standards of employment and the protection of labor laws.
Reasoning
- Captain Tayong was denied any opportunity to defend himself. Petitioners curtly
dismissed him from his command and summarily ordered his repatriation to the
Philippines without informing him of the charge or charges against him, and much less
giving him a chance to refute any such charge. In fact, it was only 2 months after his
repatriation that Captain Tayong received a telegram dated 24 October 1989 from Inter-
Orient requiring him to explain why he delayed sailing to South Africa.
- NLRC’s conclusion was supported by substantial evidence: The official report of the
technical director, which stated that a disruption in the normal functioning of the vessel’s
turbo charger and economizer had prevented the full or regular operation of the vessel
and that he was the one who recommended the reduction of RPM during the voyage to
South Africa instead of waiting in Singapore for the supplies that would permit shipboard
repair of the malfunctioning machinery and equipment, supported NLRC’s conclusion that
Captain Tayong did not arbitrarily and maliciously delay the voyage to South Africa.
- Captain Tayong's decision (arrived at after consultation with the vessel's Chief Engineer)
to wait seven (7) hours in Singapore for the delivery on board the Oceanic Mindoro of the
requisitioned supplies needed for the welding-repair, on board the ship, of the turbo-
charger and the economizer equipment of the vessel, did not constitute merely arbitrary,
capricious or grossly insubordinate behavior on his part. In the view of the NLRC, that
decision of Captain Tayong did not constitute a legal basis for the summary dismissal of
Captain Tayong and for termination of his contract with petitioners prior to the expiration
of the term thereof.
Obiter
- The captain of a vessel is a confidential and managerial employee within the
meaning of the above doctrine. A master or captain, for purposes of maritime
commerce, is one who has command of a vessel. A captain commonly performs three (3)
distinct roles: (1) he is a general agent of the shipowner; (2) he is also commander and
technical director of the vessel; and (3) he is a representative of the country under whose
flag he navigates. Of these roles, by far the most important is the role performed by the
captain as commander of the vessel; for such role (which, to our mind, is analogous to
that of "Chief Executive Officer" [CEO] of a present-day corporate enterprise) has to do
with the operation and preservation of the vessel during its voyage and the protection of
the passengers (if any) and crew and cargo. In his role as general agent of the shipowner,
the captain has authority to sign bills of lading, carry goods aboard and deal with the
freight earned, agree upon rates and decide whether to take cargo. The ship captain, as
agent of the shipowner, has legal authority to enter into contracts with respect to
the vessel and the trading of the vessel, subject to applicable limitations
established by statute, contract or instructions and regulations of the shipowner.
To the captain is committed the governance, care and management of the vessel.
Clearly, the captain is vested with both management and fiduciary functions.
- Indeed, if the ship captain is convinced, as a reasonably prudent and competent
mariner acting in good faith that the shipowner's or ship agent's instructions
(insisted upon by radio or telefax from their officers thousand of miles away) will
result, in the very specific circumstances facing him, in imposing unacceptable
risks of loss or serious danger to ship or crew, he cannot casually seek absolution
from his responsibility, if a marine casualty occurs, in such instructions. 23
- Compagnie de Commerce v. Hamburg: xxx where by the force of circumstances, a man
has the duty cast upon him of taking some action for another, and under that obligation
adopts a course which, to the judgment of a wise and prudent man, is apparently the best
for the interest of the persons for whom he acts in a given emergency, it may properly be
said of the course so taken that it was in a mercantile sense necessary to take it."
- ON management prerogative: that prerogative is nevertheless not to be exercised, in
the case at bar, at the cost of loss of Captain Tayong's rights under his contract with
petitioner's and under Philippine law.
Disposition petitioners having failed to show grave abuse of discretion amounting to
loss or excess of jurisdiction on the part of the NLRC in rendering its assailed decision,
the Petition for Certiorari is hereby DISMISSED, for lack of merit. Costs against petitioners

Valiao vs. CA, 435 SCRA 543, GR 146621, July 30,

2004
FACTS: Petitioner Valiao was appointed by private respondent West Negros College
(WNC) as Student Affairs Office (SAO) Director, with a starting salary of P2,800 per
month. Subsequently, he was assigned as Acting Director, Alumni Affairs Offfice. He was
transferred to staff position and designated as Records Chief at the Registrar’s Office but
was again re-assigned as a typist. The latest reassignment was due to his tardiness and
absences, as reflected in the summary of tardiness and absences report, which showed
him to have been absent or late for work from a minimum of seven to maximum of 75
minutes for the period March to October 31, 1991 and to have reported late almost every
day for the period November to December 1991.
Copies of his tardiness/absences reports were furnished petitioner, along with
memoranda requiring him to explain but his explanations were either unacceptable or
unsatisfactory. Subsequently, reports also showed that he did not change his habits
resulting in tardiness and absences. He was even caught one time manipulating the
bundy clock, thus necessitating another memorandum to him asking him to explain his
dishonest actuations in accomplishing the daily attendance logbook and in using the
bundy clock. He received a suspension order without pay for fifteen days because of
dishonesty in reporting his actual attendance. He reported back to office after serving the
suspension but was another adverse report on tardiness and absences was made against
the petitioner, prompting WNC to send him another memorandum with an attached
tardiness and absences report. Petitioner sent a letter of appeal and explained his side
to the new college president who gave petitioner another chance. The petitioner was
appointed as Information Assistant effective immediately. However, petitioner did not
promptly assume his post, prompting the president to call his attention.

Subsequently, WNC won a case against the official of the union before the NLRC.
Petitioner was ordered to prepare a media blitz of this victory but the petitioner did not
comply with the order on the ground that such a press release would only worsen the
aggravated situation and strained relations between WNC management and the union
officials. When petitioner reported for work on the first day of January 1993, he was
relieved from his post and transferred to the College of Liberal Arts as Records Evaluator.
Not for long, the Dean of the Liberal Arts sent a letter to the Human Resources Manager
complaining about the petitioner’s poor performance and habitual absenteeism as shown
in the daily absence reports.
- On January 18, 1993, petitioner was again absent from work without permission or
notice to his immediate superior. It turned out that he went to Bacolod City and on
January 28, 1993, the petitioner was one of those arrested during a raid in the house of
“Toto Ruiz,” a suspected drug pusher and was brought to the Bacolod Police Station
along with four other suspects. The petitioner and other suspects were then charged with
violation of the Dangerous Drugs Act of 1972.

Petitioner was asked to explain within 24 hours why he should not be terminated as a
result of the raid and charged against him for violation of RA No. 6425 as amended.
Petitioner was dismissed for failure to answer said memorandum. Subsequently, he wrote
to the president of WNC explaining his side and asking for due process. The petitioner
was notified through a memorandum about the grant of his request and that a hearing
would be conducted. He was then placed under preventive suspension and an
investigation committee was organized to conduct the probe. A notice of
hearing/investigation was sent to the petitioner.
After the investigation attended by the petitioner and his counsel, with proceedings duly
recorded, the investigation committee recommended the dismissal of petitioner. A notice
of termination was then sent to petitioner informing him of his termination from the service
for serious misconduct and gross and habitual neglect of duty. The petitioner received the
notice but did not file a grievance concerning the notice of termination.

Petitioner filed a complaint against WNC for illegal suspension, illegal dismissal
backwages, salary differential for salary increases and other benefits granted after his
dismissal as well as for moral and exemplary damages and attorney’s fees. After due
proceedings, the Labor Arbiter found no justifiable reason to place the petitioner under
preventive suspension as there was no serious or imminent threat to the life or property
of his coworkers. However, the Labor Arbiter found the dismissal of the petitioner to be
valid due to absenteeism and tardiness and after he was accorded the procedural due
process aspect of the law as reflected in the records showing that petitioner was formally
investigated and given the opportunity to refute the alleged findings by the management
of WNC. The Labor Arbiter held that frequent absenteeism and tardiness of the petitioner
constituted not only willful disobedience but also gross and habitual neglect of duties,
which are valid grounds for termination of employment. He stressed that petitioner’s
frequent absences without proper leave of absence was not only unfair to WNC and the
petitioner’s co-employees but also set an undesirable example to the employees under
his supervision, considering that the petitioner was not a mere rank-and-file employee but
one who owed more than the usual fealty to the organization.
- On appeal to the NLRC, the latter affirmed the decision of the Labor Arbiter, sustained
the latter’s findings of facts, and made its own findings of the apprehension of the
petitioner for possession of prohibited drugs. Petitioner then filed a Petition for Certiorari
under Rule 65 before the CA but this was dismissed for lack of merit. Petitioner duly filed
a Motion for Reconsideration, which was denied by the CA.

ISSUE: WON petitioner was validly dismissed from employment on the ground of serious
misconduct and gross habitual neglect of duties, including habitual tardiness and
absenteeism

HELD: YES, So irresponsible an employee like petitioner does not deserve a place in the
workplace, and it is within the management’s prerogative of WNC 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 company’s exercise of those rights and prerogatives 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.
The essence of due process is simply an opportunity to be heard, or as applied to
administrative proceedings, an opportunity to explain one’s side or an opportunity
to seek a reconsideration of the action or ruling complained of. A formal or trial-type
hearing is not at all times and in all instances essential, as the due process requirements
are satisfied where the parties are afforded fair and reasonable opportunity to explain
their side of the controversy at hand. What is frowned upon is the absolute lack of
notice and hearing.
Disposition Assailed decision and resolution affirmed with modification

Reyno vs. Manila Electric, 434 SCRA 660, GR 148105,

July 22, 2004
NATURE
Petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure

FACTS
- Reyno was employed by MERALCO where he eventually occupied the position of
Assistant Squad Leader of Squad 12 at the Inspection Department. Petitioner and his
team of inspectors were in charge of monitoring and inspecting electric meters installed
at the premises of respondent’s customers; ensuring the accuracy of the electric
consumption recorded in these meters; and reporting and apprehending violators who
use insidious schemes or devices to reduce their electric consumption deliberately.
- Later, MERALCO implemented an incentive scheme aimed at encouraging its
inspectors to perform their duties zealously. Under this incentive scheme, the inspector
concerned shall be paid an additional 30-minute overtime pay for every submitted report
of major violation/s committed by customers against respondent.
- Roger Sacdalan, Senior Investigator of respondent’s Special Presidential Committee
(SPC), received several complaints against Gilbert Villapa, Leader of Squad 12, about an
illegal connection.
- SPC conducted an investigation wherein members of Squad 12 were summoned to
explain. However, they failed to establish Villapa’s involvement in such illegal
connection. Instead, their declarations pointed to Reyno’s irregular performance of his
duties.
- This prompted SPC to conduct clarificatory hearing. But the hearing was cancelled for
failure of Reyno’s counsel to appear despite notice. When the case was called for hearing
as scheduled, his counsel again failed to appear. He then opted to proceed with the
clarificatory hearing without the assistance of his counsel.
- After evaluating the records on hand, the SPC found petitioner guilty of dishonesty,
serious misconduct and willful breach of trust. Respondent then sent petitioner a notice
terminating his services.
- Reyno filed with the Labor Arbiter a complaint for illegal dismissal and payment of
overtime pay, premium pay for holidays and rest days, damages and attorney’s fees.

ISSUES
1. WON Reyno was deprived of his right to cross examine witnesses before the Labor
Arbiter
2. WON Reyno was illegally dismissed

HELD
1. NO
- His right to cross-examine the three witnesses, did not err as it was not required to apply
strictly the Rules of Evidence. At any rate, MERALCO had valid reasons why it did not
present those three witnesses during the proceedings before the Labor Arbiter
2. NO
- The standard of substantial evidence is satisfied where the employer, as in this case,
has reasonable ground to believe that the employee is responsible for the misconduct
and his participation therein renders him unworthy of trust and confidence demanded by
his position. Reyno violated MERALCO’s Code of Employee Discipline and committed
serious misconduct in the performance of his duties have been proved by the affidavits
of petitioner’s own subordinates in Squad 12 of which he was the Assistant Squad Leader.
Moreover, MERALCO had lost his trust and confidence in petitioner. Under Article 282
of the Labor Code, as amended, these are just causes for his dismissal from the service.
- The longer an employee stays in the service of the company, the greater is his
responsibility for knowledge and compliance with the norms of conduct and the code of
discipline in the company.
- An employee’s length of service with the company even aggravates his offense. He
should have been more loyal to company from which he has derived his family bread and
butter for seventeen (17) years.
Disposition Petition is DENIED. The assailed Decision dated January 17, 2001 and
Resolution dated May 3, 2001 of the Court of Appeals in CA-G.R. SP No. 53987 are
hereby AFFIRMED.
Assoc. Labor Union vs. NLRC, 302 SCRA 708, GR
120450, Feb. 10, 1999
Central Pangasinan Elec. Corp vs. Macaraeg, 395
SCRA 720, GR No. 145800, Jan. 22, 2003
NATURE
Petition for review on certiorari
FACTS
- De Vera was employed as teller and Geronima Macaraeg as cashier by Central
Pangasinan Electric cooperative inc. They accommodated and encashed two hundred
eleven crossed checks of Evelyn Joy Estrada (de Vera’s sister) amounting to
P6,945,128.95 payable to the cooperative despite the absence of any transaction or any
outstanding obligation with it. They credited the checks as part of their collection and
deposited the same together with their cash collection to the coop’s account at the Rural
Bank of Central Pangasinan.
- The finance department noticed these checks which bounced (insufficient funds).De
Vera and Macaraeg were confronted with the discovery. De Vera admitted that the
checks were issued by her sister and that she encashed them from the money collected
from petitioner’s customers.
- De Vera testified and admitted that she encashed the checks of Evelyn Joy Estrada
because the latter is her older sister. Macaraeg admitted that she knew of the
accommodations given by respondent de Vera to her sister; that she allowed her
subordinate to do it because respondent de Vera is her kumare, and that she knew that
Mrs. Estrada’s checks were sufficiently funded.
- On March 19, 1999, on the basis of the findings and recommendation of Atty. Fernandez
(presided over the hearing), the General Manager issued to respondents separate notices
of termination for “serious misconduct, and breach of trust and confidence reposed on
them by management.”
- Respondents questioned their dismissal before the National Conciliation and Mediation
Board (NCMB),claiming that their dismissal was without just cause and in violation of the
Collective Bargaining Agreement (CBA), which requires that the case should first be
brought before a grievance committee. Eventually, the parties agreed to submit the case
to a voluntary arbitrator for arbitration.
- LA-ruled in favor of defendants and ordered their reinstatement
CA-affirmed
ISSUES
1. WON the procedure leading to the termination of respondents Maribeth de Vera and
Geronima Macaraeg was in violation of the provisions of the CBA
2. WON the respondents were validly dismissed

HELD
1. Issue is moot and academic
- The parties’ active participation in the voluntary arbitration proceedings, and their failure
to insist that the case be remanded to the grievance machinery, shows a clear intention
on their part to have the issue of respondents’ illegal dismissal directly resolved by the
voluntary arbitrator.
2. YES
- The respondents were validly dismissed. Article 282(c) of the Labor Code allows an
employer to dismiss employees for willful breach of trust or loss of confidence. Proof
beyond reasonable doubt of their misconduct is not required, it being sufficient that there
is some basis for the same or that the employer has reasonable ground to believe that
they are responsible for the misconduct and their participation therein rendered them
unworthy of the trust and confidence demanded of their position.
Reasoning
- the acts of the respondents were clearly inimical to the financial interest of the petitioner.
During the investigation, they admitted accommodating Evelyn Joy Estrada by encashing
her checks from its funds for more than a year. They did so without petitioner’s
knowledge, much less its permission.
- there was willful breach of trust on the respondents’ part, as they took advantage of their
highly sensitive positions to violate their duties.
- the acts of the respondents caused damage to the petitioner. During those times the
checks were illegally encashed, petitioner was not able to fully utilize the collections,
primarily in servicing its debts.
- it is not material that they did not “misappropriate any amount of money, nor incur any
shortage relative to the funds in their possession.” The basic premise for dismissal on the
ground of loss of confidence is that the employees concerned hold positions of trust. The
betrayal of this trust is the essence of the offence for which an employee is penalized.
- the respondents held positions of utmost trust and confidence. As teller and cashier,
respectively, they are expected to possess a high degree of fidelity. They are entrusted
with a considerable amount of cash. Respondent de Vera accepted payments from
petitioner’s consumers while respondent Macaraeg received remittances for deposit at
petitioner’s bank. They did not live up to their duties and obligations.

Phil. Semiconductors vs. Fadriquela, 427 SCRA 408,

GR 141717, April 14, 2004
FACTS: The petitioner Philips Semiconductors is a domestic corporation engaged in the
production and assembly of semiconductors such as power devices, RF modules, CATV
modules, RF and metal transistors and glass diods. It caters to domestic and foreign
corporations that manufacture computers, telecommunications equipment and cars.
Aside from contractual employees, the petitioner employed 1,029 regular workers. The
employees were subjected to periodic performance appraisal based on output, quality,
attendance and work attitude.[2] One was required to obtain a performance rating of at
least 3.0 for the period covered by the performance appraisal to maintain good standing
as an employee.

Respondent, during her 5 consecutive contracts, got the following ratings: 3.15, 3.8, 3.4,
and 2.8. The reason for her failed mark on the last contract was her absences. She was
then asked to explain such absences but she failed to do the same. Subsequently,
respondent’s supervisor recommended that her employment be terminated due to
habitual absenteeism. Thus, her contract of employment was no longer renewed.
Respondent then filed a complaint for illegal dismissal. On the other hand, petitioner
contends that respondent was not dismissed; her contract merely expired.

The Labor Arbiter and the NLRC based their decision on the CBA between the petitioner
and the labor union which provides that a contractual employee would only be considered
a regular employee if he has completed 17 months of service and a performance rating
of at least 3.0. The respondent filed a motion for reconsideration but the NLRC denied
the same. On appeal, the CA reversed the decision of the NLRC. Hence, this petition.

ISSUE: Whether or not respondent was still a contractual employee of the company.

HELD: The SC agreed with the appellate court. Article 280 of the Labor Code of the
Philippines was emplaced in our statute books to prevent the circumvention by
unscrupulous employers of the employee’s right to be secure in his tenure by
indiscriminately and completely ruling out all written and oral agreements inconsistent
with the concept of regular employment defined therein. The language of the law
manifests the intent to protect the tenurial interest of the worker who may be denied the
rights and benefits due a regular employee because of lopsided agreements with the
economically powerful employer who can maneuver to keep an employee on a casual or
temporary status for as long as it is convenient to it. In tandem with Article 281 of the
Labor Code, Article 280 was designed to put an end to the pernicious practice of making
permanent casuals of our lowly employees by the simple expedient of extending to them
temporary or probationary appointments, ad infinitum.

The two kinds of regular employees under the law are (1) those engaged to perform
activities which are necessary or desirable in the usual business or trade of the employer;
and (2) those casual employees who have rendered at least one year of service, whether
continuous or broken, with respect to the activities in which they are employed. The
primary standard to determine a regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the business or
trade of the employer. The test is whether the former is usually necessary or desirable in
the usual business or trade of the employer. If the employee has been performing the job
for at least one year, even if the performance is not continuous or merely intermittent, the
law deems the repeated and continuing need for its performance as sufficient evidence
of the necessity, if not indispensability of that activity to the business of the employer.
Hence, the employment is also considered regular, but only with respect to such activity
and while such activity exists. The law does not provide the qualification that the employee
must first be issued a regular appointment or must be declared as such before he can
acquire a regular employee status.

In this case, the original contract of employment had been extended or renewed four
times, to the same position, with the same chores. Such a continuing need for the services
of the respondent is sufficient evidence of the necessity and indispensability of her
services to the petitioner’s business. By operation of law, then, the respondent had
attained the regular status of her employment with the petitioner, and is thus entitled to
security of tenure as provided for in Article 279 of the Labor Code.

The limited period specified in petitioner’s employment contract having been imposed
precisely to circumvent the constitutional guarantee on security of tenure should,
therefore, be struck down or disregarded as contrary to public policy or morals. To uphold
the contractual arrangement would, in effect, permit the former to avoid hiring permanent
or regular employees by simply hiring them on a temporary or casual basis, thereby
violating the employee’s security of tenure in their jobs.
Under Section 3, Article XVI of the Constitution, it is the policy of the State to assure the
workers of security of tenure and free them from the bondage of uncertainty of tenure
woven by some employers into their contracts of employment. The guarantee is an act of
social justice. When a person has no property, his job may possibly be his only
possession or means of livelihood and those of his dependents. When a person loses his
job, his dependents suffer as well. The worker should therefor be protected and insulated
against any arbitrary deprivation of his job.

The ruling in Brent School, Inc. v. Zamora is also not applicable in this case because it
could not be supposed that private respondents and all other so-called “casual” workers
of the petitioner KNOWINGLY and VOLUNTARILY agreed to the employment contract.
Almost always, they agree to any terms of an employment contract just to get employed
considering that it is difficult to find work given their ordinary qualifications. Their freedom
to contract is empty and hollow because theirs is the freedom to starve if they refuse to
work as casual or contractual workers. Indeed, to the unemployed, security of tenure has
no value. It could not then be said that petitioner and private respondents “dealt with each
other on more or less equal terms with no moral dominance whatever being exercised by
the former over the latter.

The petitioner’s reliance on the CBA is also misplaced. It is the express mandate of the
CBA not to include contractual employees within its coverage. Such being the case, we
see no reason why an agreement between the representative union and private
respondent, delaying the regularization of contractual employees, should bind petitioner
as well as other contractual employees. Indeed, nothing could be more unjust than to
exclude contractual employees from the benefits of the CBA on the premise that the same
contains an exclusionary clause while at the same time invoke a collateral agreement
entered into between the parties to the CBA to prevent a contractual employee from
attaining the status of a regular employee.

The CBA, during its lifetime, constitutes the law between the parties. Such being the rule,
the aforementioned CBA should be binding only upon private respondent and its regular
employees who were duly represented by the bargaining union. The agreement
embodied in the “Minutes of Meeting” between the representative union and private
respondent, providing that contractual employees shall become regular employees only
after seventeen months of employment, cannot bind petitioner. Such a provision runs
contrary to law not only because contractual employees do not form part of the collective
bargaining unit which entered into the CBA with private respondent but also because of
the Labor Code provision on regularization. The law explicitly states that an employee
who had rendered at least one year of service, whether such service is continuous or
broken, shall be considered a regular employee. The period set by law is one year. The
seventeen months provided by the “Minutes of Meeting” is obviously much longer. The
principle is well settled that the law forms part of and is read into every contract without
the need for the parties expressly making reference to it.

Petition is denied.

Azcor Manufacturing vs. NLRC, 303 SCRA 26, GR

122046, January 16, 1998
NATURE
Petition for certiorari

FACTS
- Candido Capulso filed with the Labor Arbiter a complaint for constructive illegal dismissal
and illegal deduction of P50.00 per day for the period April to September 1989.
The evidence presented by Capulso showed that he worked for AZCOR as ceramics
worker for more than two (2) years starting from 3 April 1989 to 1 June 1991. From April
to September 1989 the amount of P50.00 was deducted from his salary without informing
him of the reason therefor.
- In the second week of February 1991, upon his doctor's recommendation, Capulso
verbally requested to go on sick leave due to bronchial asthma. It appeared that his illness
was directly caused by his job as ceramics worker where, for lack of the prescribed
occupational safety gadgets, he inhaled and absorbed harmful ceramic dusts. His
supervisor, Ms. Emily Apolinaria, approved his request. Later, on 1 June 1991, Capulso
went back to petitioner AZCOR to resume his work after recuperating from his illness. He
was not allowed to do so by his supervisors who informed him that only the owner, Arturo
Zuluaga, could allow him to continue in his job. He returned five (5) times to AZCOR but
when it became apparent that he would not be reinstated, he immediately filed the instant
complaint for illegal dismissal.
- Capulso presented the following documentary evidence in support of his claim: (a) His
affidavit and testimony to prove that he was terminated without just cause and without
due process; (b) Identification card issued by AZCOR which he continued to use even
after his supposed employment by Filipinas Paso; (c) Certification of SSS premium
payments; (d) SSS Member Assistance Form wherein he stated that he worked with
AZCOR from March 1989 to April 1991; (e) Certification of Employee Contribution with
SSS; and, (f) Payslips issued by AZCOR.
- AZCOR alleged that Capulso was a former employee of AZCOR who resigned on 28
February 1990 as evidenced by a letter of resignation and joined Filipinas Paso on 1
March 1990 as shown by a contract of employment; in February 1991 Capulso allegedly
informed his supervisor, Ms. Emilia Apolinaria, that he intended to go on terminal leave
because he was not feeling well; on 1 March 1991 he submitted a letter of resignation
addressed to the President of Filipinas Paso, Manuel Montilla; and, in the early part of
June 1991 Capulso tried to apply for work again with Filipinas Paso but there was no
vacancy.
- Petitioners submitted the following documentary evidence: (a) Sworn Statement of Ms.
Emilia Apolinaria and her actual testimony to prove that respondent indeed resigned
voluntarily from AZCOR to transfer to Filipinas Paso, and thereafter, from Filipinas Paso
due to failing health; (b) Contract of Employment between Filipinas Paso and respondent
which took effect 1 March 1991; (c) Letter of resignation of respondent from AZCOR dated
28 February 1990, to take effect on the same date; (d) Undated letter of resignation of
respondent addressed to Filipinas Paso to take effect 1 March 1991; (e) BIR Form No.
W-4 filed 6 June 1990; (f) Individual Income Tax Return of respondent for 1990; and, (g)
BIR Form 1701-B which was an alphabetical list of employees of Filipinas Paso for the
year ending 31 December 1990.
- Labor Arbiter rendered a decision dismissing the complaint for illegal dismissal for lack
of merit, but ordered AZCOR and/or Arturo Zuluaga to refund to Capulso P200.00
representing the amount illegally deducted from his salary.
- NLRC modified the Labor Arbiter's decision by: (a) declaring the dismissal of Capulso
as illegal for lack of just and valid cause; (b) ordering petitioners to reinstate Capulso to
his former or equivalent position without loss of seniority rights and without diminution of
benefits; and, (c) ordering petitioners to jointly and solidarily pay Capulso his back wages
computed from the time of his dismissal up to the date of his actual reinstatement.
- Petitioners' motion for reconsideration was denied by the NLRC. Meanwhile, during the
pendency of the case before this Court, Capulso succumbed to asthma and heart
disease, and died.
- Petitioners insist that Capulso voluntarily resigned. They also contend that they could
not be held jointly and severally liable for back wages since AZCOR and Filipinas Paso
are separate and distinct corporations with different corporate personalities; and, the
mere fact that the businesses of these corporations are interrelated and both owned and
controlled by a single stockholder are not sufficient grounds to disregard their separate
corporate entities.

ISSUE
WON NLRC erred in finding that Capulso was illegally dismissed and in holding
petitioners jointly and solidarily liable to Capulso for back wages
HELD
NO
- On resignation, requisites
Ratio To constitute a resignation, it must be unconditional and with the intent to
operate as such. There must be an intention to relinquish a portion of the term of
office accompanied by an act of relinquishment.
- The fact that Capulso signified his desire to resume his work when he went back to
petitioner AZCOR after recuperating from his illness, and actively pursued his case for
illegal dismissal before the labor courts when he was refused admission by his employer,
negated any intention on his part to relinquish his job at AZCOR.
- a closer look at the subject resignation letters readily reveals the following: (a) the
resignation letter allegedly tendered by Capulso to Filipinas Paso was identically worded
with that supposedly addressed by him to AZCOR; (b) both were pre-drafted with blank
spaces filled up with the purported dates of effectivity of his resignation; and, (c) it was
written in English, a language which Capulso was not conversant with considering his low
level of education. No other plausible explanation can be drawn from these circumstances
than that the subject letters of resignation were prepared by a person or persons other
than Capulso. And the fact that he categorically disowned the signatures therein and
denied having executed them clearly indicates that the resignation letters were drafted
without his consent and participation.
- Even assuming for the sake of argument that the signatures were genuine, the
resignation letters still cannot be given credence in the absence of any showing that
Capulso was aware that what he was signing then were in fact resignation letters or
that he fully understood the contents thereof.
- On illegal dismissal
> In illegal dismissal cases, the onus of proving that the dismissal of the employee was
for a valid and authorized cause rests on the employer, and failure to discharge the same
would mean that the dismissal is not justified and therefore illegal.
- On joint and several liability
> The doctrine that a corporation is a legal entity or a person in law distinct from the
persons composing it is merely a legal fiction for purposes of convenience and to
subserve the ends of justice. This fiction cannot be extended to a point beyond its reason
and policy. Where, as in this case, the corporate fiction was used as a means to
perpetrate a social injustice or as a vehicle to evade obligations or confuse the legitimate
issues, it would be discarded and the two (2) corporations would be merged as one, the
first being merely considered as the instrumentality, agency, conduit or adjunct of the
other.
Disposition petition is DISMISSED. NLRC Decision is MODIFIED. Petitioners AZCOR
MANUFACTURING, INC., FILIPINAS PASO and ARTURO ZULUAGA are ORDERED to
pay, jointly and solidarily, the heirs of private respondent Candido Capulso the amounts
representing his back wages, inclusive of allowances and other benefits, and separation
pay to be computed in accordance with law.

Manila Broadcasting vs. NLRC, 294 SCRA 486, GR

121975, Aug. 20, 1998
NATURE
Petition for certiorari to set aside the decision of the National Labor Relations
Commission, affirming the decision of the Labor Arbiter which found private respondent
to have been illegally dismissed and which ordered him reinstated with damages.

FACTS
- Private respondent Samuel L. Bangloy was production supervisor and radio
commentator of the DZJC-AM radio station in Laoag City. The radio station is owned by
petitioner Manila Broadcasting Company.
- On February 28, 1992, private respondent applied for leave of absence for 50 days,
from March 24 to May 13, 1992, in order to “run for Board Member” in Ilocos Norte under
the Kilusang Bagong Lipunan (KBL). He made his application pursuant to §11(b) of R.A.
No. 6646 which provides:
Sec. 11(b) . . . Any mass media columnist, commentator, announcer, or personality who
is a candidate for any elective public office shall take a leave of absence from his work
as such during the campaign period.
- After a week, private respondent’s application was returned to him, together with a copy
of an office memorandum of Eugene Jusi, Assistant Vice-President for Personnel and
Administration, to Atty. Edgardo Montilla, Executive Vice-President and General Manager
of the FJE Group of Companies, in which it was stated that as a matter of “company
policy,” any employee who files a certificate of candidacy for any elective national or local
office would be considered resigned from the company.
- It would appear that private respondent nonetheless ran in the election but lost. On May
25, 1992, he tried to return to work, but was not allowed to do so by petitioner on the
ground that his employment had been terminated.
- Private respondent filed a complaint for illegal dismissal against petitioner before the
Department of Labor and Employment.
ISSUES
1. WON the company policy that any employee who files a certificate of candidacy for any
elective national or local office would be considered resigned from the company valid
2. WON the company policy was made known to employees before it was sought to be
applied to private respondent

HELD
1. YES
- the policy is valid and justified.
2. NO
- There are a number of circumstances which raise some doubts whether the company
policy was strictly enforced.
Ratio Although §11(b) of R.A. No. 6646 does not require mass media commentators and
announcers such as private respondent to resign from their radio or TV stations but only
to go on leave for the duration of the campaign period, we think that the company may
nevertheless validly require them to resign as a matter of policy.
- The policy is justified on the following grounds:
1) Working for the government and the company at the same time is clearly
disadvantageous and prejudicial to the rights and interest not only of the company but
the public as well. In the event an employee wins in an election, he cannot fully serve,
as he is expected to do, the interest of his employer. The employee has to serve two (2)
employers, obviously detrimental to the interest of both the government and the private
employer.
2) In the event the employee loses in the election, the impartiality and cold neutrality of
an employee as broadcast personality is suspect, thus readily eroding and adversely
affecting the confidence and trust of the listening public to employer’s station.
These are valid reasons for petitioner. No law has been cited by private respondent
prohibiting a rule such as that in question.
Disposition Decision AFFIRMED