ALPHA

RHO
LAMBDA
LAW
SOCIETY
BAR OPERATIONS 2018
CASES DECIDED/PENNED BY JUSTICE
MARIANO DEL CASTILLO

LABOR LAW
 PEOPLE OF THE PHILIPPINES vs. GILDA ABELLANOSA
G.R. No. 214340, July 19, 2017
Illegal Recruitment

DOCTRINE: Recruitment becomes illegal when undertaken by non-licensees or non-

holders of authority, and, when committed against a minimum of three persons, then it
qualifies as illegal recruitment in large scale.

Facts:

Appellant was charged with Illegal Recruitment in large scale in an Information alleging
that that accused falsely representing to possess authority to recruit job applicants for
employment abroad without first having secured the required authority from the POEA,
illegally collect and receive from GEPHRE O. POMAR the amount of (₱5,500.00), as partial
payment of processing and placement fees for overseas employment, which illegal
recruitment activities is considered an offense involving economic sabotage, it being
committed in large scale under Sec. 6(m) paragraph 2 of Republic Act [No.] 8042, having
committed the same not only against GEPHRE O. POMAR but also against seven (7) others.
Appellant denied meeting any of the private complainants while she was in Iloilo and
maintained that her purpose in going to Iloilo was only to assist Shirley in processing the
latter's business license. Appellant likewise denied that she received money from the
private complainants; she claimed that it was Shirley who was engaged in recruitment
activities.

Issue:
Whether or not appellant is guilty of illegal recruitment in large scale.

HELD:

Recruitment becomes illegal when undertaken by non-licensees or non--holders of

authority. Article 38 of the Labor Code provides: Art. 38. Illegal Recruitment.—(a) Any
recruitment activities, including the prohibited practices enumerated under Article 34 of
this Code, to be undertaken by non-licensees or non-holders of authority shall be deemed
illegal and punishable under Article 39 of this Code. The Secretary of Labor and
Employment or any law enforcement officer may initiate complaints under this Article. (b)
Illegal recruitment when committed by a syndicate or in large scale shall be considered an
offense involving economic sabotage and shall be penalized in accordance with Article 39
hereof. Illegal recruitment is deemed committed by a syndicate if carried out by a group of
three (3) or more persons conspiring and/or confederating with one another in carrying
out any unlawful or illegal transaction, enterprise or scheme defined under the first
paragraph hereof. Illegal recruitment is deemed committed in large scale if committed
against three (3) or more persons individually or as a group.
The prosecution was able to establish that appellant was engaged in illegal recruitment in
large scale. It was proved that appellant was non-licensee or non-holder of authority to
recruit workers for deployment abroad; she offered or promised employment abroad to
private complainants; she received monies from private complainants purportedly as
placement or processing fees; that private complainants were not actually deployed to
Brunei; that despite demands, appellant failed to reimburse or refund to private
complainants their monies; and that appellant committed these prohibited acts against
three (3) or more persons, individually or as a group.
 HERMA SHIPYARD, INC. VS. DANILO OLIVARES ET AL.
G.R. No. 208936; April 17, 2017
Employer-Employee Relationship

DOCTRINE: The test in determining whether one is a project-based employee is whether

he was assigned to carry out a specific project or undertaking, the duration and scope of
which was specified, and made known to him, at the time of his engagement.

FACTS:

Herma Shipyard is a domestic corporation engaged in the business of shipbuilding and

repair. The respondents were its employees occupying various positions such as welder,
leadman, pipe fitter, laborer, helper, etc.

On June 17, 2009, the respondents filed a complaint for illegal dismissal, regularization, and
non-payment of service incentive leave pay with prayer for the payment of full backwages
and attorney's fees against petitioners. Respondents alleged that they are Herma
Shipyard's regular employees who have been continuously performing tasks usually
necessary and desirable in its business. On various dates, however, petitioners dismissed
them from employment.

Respondents further alleged that as a condition to their continuous and uninterrupted

employment, petitioners made them sign employment contracts for a fixed period ranging
from one to four months to make it appear that they were project-based employees. Per
respondents, petitioners resorted to this scheme to defeat their right to security of tenure,
but in truth there was never a time when they ceased working for Henna Shipyard due to
expiration of project-based employment contracts. In fact, if they were indeed project
employees, petitioners should have reported to the Department of Labor and Employment
(DOLE) the completion of such project. But petitioners have never submitted such report to
the DOLE.

For their defense, petitioners argued that respondents were its project-based employees in
its shipbuilding projects and that the specific project for which they were hired had already
been completed, In support thereof, Herma Shipyard presented contracts of employment.

ISSUE:
Whether or not the respondents were project-based employees?
HELD:
NO.
A project employee under Article 280 (now Article 294) of the Labor Code, as amended, is
one whose employment has been fixed for a specific project or undertaking, the completion
or termination of which has been determined at the time of the engagement of the
employee. Thus: Art. 280. Regular and Casual Employment.—The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreement of the
parties, an employment shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment has been fixed for a
specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or service to
be performed is seasonal in nature and the employment is for the duration of the season.
The records of this case reveal that for each and every project respondents were hired, they
were adequately informed of their employment status as project--based employees at least
at the time they signed their employment contract. They were fully apprised of the nature
and scope of their work whenever they affixed their signature to their employment
contract.
By voluntarily entering into the aforementioned project employment contracts,
respondents are deemed to have understood that their employment is coterminous with
the particular project indicated therein.—There is no indication that respondents were
coerced into signing their employment contracts or that they affixed their signature thereto
against their will. While they claim that they signed the said contracts in order to secure
continuous employment, they have not, however, presented sufficient evidence to support
the same other than their bare allegations.
The fact that the job is usually necessary or desirable in the business operation of the
employer does not automatically imply regular employment; neither does it impair the
validity of the project employment contract stipulating fixed duration of employment. The
repeated and successive rehiring of respondents as project-based employees does not also,
by and of itself, qualify them as regular employees.
What is important is that the respondents were apprised at the time of their engagement
that their employment is coterminous with the specific project and that should their
employment be extended by virtue of paragraph 10, the purpose of the extension is only to
complete the same specific project, and not to keep them employed even after the
completion thereof.

TSM SHIPPING PHILS., INC. and/or DAMPSKIBSSELSKABET NORDEN A/S

and/or CAPT. CASTILLO, petitioners, vs. LOUIE L. PATIÑO, respondent.
GR No. 210289; March 20, 2017
Special Groups of Employees

DOCTRINE: A temporary total disability only becomes permanent when the company-
designated physician, within the 240-day period, declares it to be so, or when after the
lapse of the said period, he fails to make such declaration.

FACTS:
On January 13, 2010, TSM, for and in behalf of its foreign principal, DNAS, entered into a
Contract of Employment with respondent for a period of six months as GP2/OS (General
Purpose 2/Ordinary Seaman) for the vessel Nord Nightingale.
On May 20, 2010, while working on board the vessel, respondent injured his right hand
while securing a mooring rope. He was brought to a medical facility in Istanbul, Turkey,
where X-ray showed a fracture on his 5th metacarpal bone. Respondent's right hand was
placed in a cast and thereafter he was repatriated.
Upon arrival in Manila on May 24, 2010, petitioners referred respondent to the company-
designated physician, Dr. Nicomedes G. Cruz (Dr. Cruz), for further treatment. Respondent
was also referred to an orthopedic surgeon who recommended surgical operation to
correct the malunited fractured metacarpal bone. On June 8, 2010, respondent underwent
Open Reduction and Internal Fixation of the fractured 5th metacarpal bone at Manila
Doctors Hospital. He then went through physical therapy.
After extensive medical treatments, therapy, and follow-up examinations, Dr. Cruz, on
August 17, 2010, rendered an interim assessment of respondent's disability under the
Philippine Overseas Employment Administration - Standard Employment Contract (POEA-
SEC), at Grade 10, or loss of grasping power for small objects between the fold of the finger
of one hand. Despite continuing physical therapy sessions with the company-designated
physician, respondent filed on September 8, 2010 a complaint with the NLRC against
petitioners for total and permanent disability benefits, damages, and attorney's fees.
Thereafter, in a Medical Report dated October 11, 2010, Dr. Cruz declared respondent to
have reached the maximum medical cure after rendering a final disability rating of Grade
10 on September 29, 2010.
On November 19, 2010, respondent consulted Dr. Nicanor Escutin (Dr. Escutin), who
assessed him to have permanent disability unfit for sea duty in whatever capacity as a
seaman.

ISSUE:
Whether or not respondent is entitled to total permanent disability
HELD:
Based on this pronouncement in Vergara v. Hammonia Maritime Services, Inc., 567 SCRA
610 (2008), the Court then held, in the case of C.F. Sharp Crew Management, Inc. v. Taok,
677 SCRA 296 (2012), that a seafarer may have basis to pursue an action for total and
permanent disability benefits in any of the following conditions: (a) the company-
designated physician failed to issue a declaration as to his fitness to engage in sea duty or
disability even after the lapse of the 120-day period and there is no indication that further
medical treatment would address his temporary total disability, hence, justify an extension
of the period to 240 days; (b) 240 days had lapsed without any certification being issued by
the company-designated physician; (c) the company-designated physician declared that he
is fit for sea duty within the 120-day or 240-day period, as the case may be, but his
physician of choice and the doctor chosen under Section 20(B)(3) of the POEA-SEC are of a
contrary opinion; (d) the company-designated physician acknowledged that he is partially
permanently disabled but other doctors whom he consulted, on his own and jointly with
his employer, believed that his disability is not only permanent but total as well; (e) the
company-designated physician recognized that he is totally and permanently disabled but
there is a dispute on the disability grading; (f) the company-designated physician
determined that his medical condition is not compensable or work-related under the
POEA-SEC but his doctor-of-choice and the third doctor selected under Section 20(B)(3) of
the POEA-SEC found otherwise and declared him unfit to work; (g) the company-
designated physician declared him totally and permanently disabled but the employer
refuses to pay him the corresponding benefits; and (h) the company-designated physician
declared him partially and permanently disabled within the 120-day or 240-day period but
he remains incapacitated to perform his usual sea duties after the lapse of the said periods.
To stress, the rule is that a temporary total disability only becomes permanent when the
company-designated physician, within the 240-day period, declares it to be so, or when
after the lapse of the said period, he fails to make such declaration.” After the initial interim
assessment of Dr. Cruz, respondent continued with his medical treatment. Dr. Cruz then
rendered on September 29, 2010 a final assessment of Grade 10 upon reaching the
maximum medical cure. Counting from the date of repatriation on May 24, 2010 up to
September 29, 2010, this assessment was made within the 240-day period. Clearly, before
the maximum 240-day medical treatment period expired, respondent was issued a Grade
10 disability rating which is merely equivalent to a permanent partial disability under the
POEA-SEC. Thus, respondent could not have been suffering from a permanent total
disability as would entitle him to the maximum benefit of US$60,000.00.
The Court finds the labor tribunals’ rulings seriously flawed as they were rendered in total
disgregard of the provisions of the POEA-SEC, which is the law between the parties. The
medical opinion of Dr. Escutin ought not to be given more weight than the disability
grading given by Dr. Cruz. The POEA-SEC clearly provides that when a seafarer sustains a
work-related illness or injury while onboard the vessel, his fitness or unfitness for work
shall be determined by the company-designated physician. However, if the doctor
appointed by the seafarer makes a finding contrary to that of the assessment of the
company-designated physician, a third doctor may be agreed jointly between the employer
and the seafarer and the latter’s decision shall be final and binding on both of them. The
Court has held that nonobservance of the requirement to have the conflicting assessments
determined by a third doctor would mean that the assessment of the company-designated
physician prevails.
 JULIETA B. STA. ANA VS. MANILA JOCKEY CLUB, INC.
GR No. 208459 February 15, 2017
Termination of Employment

DOCTRINE: To legally dismiss an employee on the ground of loss of trust, the employer
must establish that a) the employee occupied a position of trust and confidence, or has
been routinely charged with the care and custody of the employer’s money or property; b)
the employee committed a willful breach of trust based on clearly established facts; and c)
such loss of trust relates to the employee’s performance of duties. It is a cardinal rule that
loss of trust and confidence should be genuine, and not simulated; it must arise from
dishonest or deceitful conduct, and must not be arbitrarily asserted in the face of
overwhelming contrary evidence.
An illegally dismissed employee is entitled to two (2) separate reliefs: full backwages and
reinstatement.

FACTS:
Julieta Sta. Ana was hired by MJCI as outlet teller of its off-track betting (OTB) station in
Tayuman, Manila. It was found out by MJCI that its treasury department has been illegally
appropriating funds and lending it out to the employees of the latter corporation. The
Special Disciplinary Committee of MJCI found Sta. Ana conducting her lending business
during office hours and using the funds and personnel of MJCI; thus, she was found guilty of
dishonesty and other fraudulent acts by the said committee.
On her defense, she alleged that she started her lending business 15 years ago prior to the
takeover of the new management of MJCI and she sold her fishing vessels 2 years ago to
finance her lending business.
She was eventually terminated by MJCI. Consequently, she filed a complaint for illegal
dismissal.
Note that Sta. Ana was dismissed for willful breach of trust and confidence.

ISSUE:
Whether or not Sta. Ana was legally dismissed by MJCI.

HELD:
To legally dismiss an employee on the ground of loss of trust, the employer must establish
that a) the employee occupied a position of trust and confidence, or has been routinely
charged with the care and custody of the employer’s money or property; b) the employee
committed a willful breach of trust based on clearly established facts; and c) such loss of
trust relates to the employee’s performance of duties.—It is settled that the employer has
the right to dismiss an employee for just causes, which include willful breach of trust and
confidence. Complementary to such right is the burden of the employer to prove that the
employee’s dismissal is for a just cause, and the employer afforded the latter due process
before termination.
It is a cardinal rule that loss of trust and confidence should be genuine, and not simulated;
it must arise from dishonest or deceitful conduct, and must not be arbitrarily asserted in
the face of overwhelming contrary evidence. While proof beyond reasonable doubt is not
required, loss of trust must have some basis or such reasonable ground for one to believe
that the employee committed the infraction, and the latter’s participation makes him or her
totally unworthy of the trust demanded by the position. Here, MJCI failed to prove that Sta.
Ana committed willful breach of its trust. Particularly, it failed to establish that Sta. Ana
used its employee for her personal business during office hours, and used its money,
without authority, to lend money to another. Hence, to dismiss her on the ground of loss of
trust and confidence is unwarranted.
An illegally dismissed employee is entitled to two separate reliefs: full backwages and
reinstatement. In such case where reinstatement is no longer an option, payment of
separation pay is justified. The Court considers “considerable time,” which includes the
lapse of eight years or more (from the filing of the complaint up to the resolution of the
case) to support the grant of separation pay.
 JACK C. VALENCIA VS. CLASSIQUE VINYL PRODUCTS CORPORATION,
JOHNNY CHANG (Owner) and/or CANTINGAS MANPOWER SERVICES
GR No. No. 206390; JANUARY 30, 2017
Employer-Employee Relationship

DOCTRINE: Generally, the presumption is that the contractor is a labor-only contractor

unless such contractor overcomes the burden of proving that it has the substantial capital,
investment, tools and the like. In labor-only contracting, the statute creates an employer-
employee relationship for a comprehensive purpose: to prevent a circumvention of labor
laws. The contractor is considered merely an agent of the principal employer and the latter
is responsible to the employees of the labor-only contractor as if such employees had been
directly employed by the principal employer. The principal employer therefore becomes
solidarily liable with the labor-only contractor for all the rightful claims of the employees.

FACTS:
On March 24, 2010, Valencia filed with the Labor Arbiter a Complaint for Underpayment of
Salary and Overtime Pay; Non-Payment of Holiday Pay, Service Incentive Leave Pay, 13th
Month Pay; Regularization; Moral and Exemplary Damages; and, Attorney’s Fees against
respondents Classique Vinyl Products Corporation (Classique Vinyl) and its owner Johnny
Chang (Chang) and/ or respondent Cantingas Manpower Services (CMS). When Valencia,
however, asked permission from Chang to attend the hearing in connection with the said
complaint on April 17, 2010, the latter allegedly scolded him and told him not to report for
work anymore. Hence, Valencia amended his complaint to include illegal dismissal.
In his Sinumpaang Salaysay, Valencia alleged that he applied for work with Classique Vinyl
but was told by the latter’s personnel office to proceed to CMS, a local manpower agency,
and therein submit the requirements for employment. Upon submission thereof, CMS made
him sign a contract of employment but no copy of the same was given to him. He then
proceeded to Classique Vinyl for interview and thereafter started working for the company
in June 2005 as fertilizer operator. Valencia claimed that he worked 12 hours a day from
Monday to Saturday and was receiving P187,52 for the first eight hours and an overtime
pay of P117.20 for the next four hours, or beyond the then minimum wage mandated by
law. Five months later, he was made to serve as extruder operator but without the
corresponding increase in salary. He was neither paid his holiday pay, service incentive
leave pay, and 13th month pay. Worse, premiums for Philhealth and Pag-IBIG Fund were
not paid and his monthly deductions for Social Security System (SSS) premiums were not
properly remitted. He was also being deducted the amounts of P100.00 and P60.00 a week
for Cash Bond and Agency Fee, respectively. Valencia averred that his salary was paid on a
weekly basis but his pay slips neither bore the name of Classique Vinyl nor of CMS; that all
the machineries that he was using/operating in connection with his work were all owned
by Classique Vinyl; and, that his work was regularly supervised by Classique Vinyl. He
further averred that he worked for Classique Vinyl for four years until his dismissal. Hence,
by operation of law, he had already attained the status of a regular employee of his true
employer, Classique Vinyl, since according to him. CMS is a mere labor-only contractor.
Valencia, therefore, argued that Classique Vinyl should be held guilty of illegal dismissal for
failing to comply with the twin-notice requirement when it dismissed him from the service
and be made to pay for his monetary claims.
Classique Vinyl, for its part, denied having hired Valencia and instead pointed to CMS as the
one who actually selected, engaged, and contracted out Valencia’s services. It averred that
CMS would only deploy Valencia to Classique Vinyl whenever there was an urgent specific
task or temporary work and these occasions took place sometime in the years 2005, 2007,
2009 and 2010. It stressed that Valencia’s deployment to Classique Vinyl was intermittent
and limited to three to four months only in each specific year. Classique Vinyl further
contended that Valencia’s performance was exclusively and directly supervised by CMS and
that his wages and other benefits were also paid by the said agency. It likewise denied
dismissing Valencia from work and instead averred that on April 16, 2010, while deployed
with Classique Vinyl, Valencia went on a prolonged absence from work for reasons only
known to him. In sum, Classique Vinyl asserted that there was no employer-employee
relationship between it and Valencia, hence, it could not have illegally dismissed the latter
nor can it be held liable for Valencia’s monetary claims. Even assuming that Valencia is
entitled to monetary benefits, Classique Vinyl averred that it cannot be made to pay the
same since it is an establishment regularly employing less than 10 workers. As such, it is
exempted from paying the prescribed wage orders in its area and other benefits under the
Labor Code. At any rate, Classique Vinyl insisted that Valencia’s true employer was CMS,
the latter being an independent contractor as shown by the fact that it was duly
incorporated and registered not only with the Securities and Exhange Commission but also
with the Department of Labor and Employment; and, that it has substantial capital or
investment in connection with the work performed and services rendered by its employees
to clients.
CMS, on the other hand, denied any employer-employee relationship between it and
Valencia. It contended that after it deployed Valencia to Classique Vinyl, it was already the
latter which exercised full control and supervision over him. Also, Valencia’s wages were
paid by Classique Vinyl only that it was CMS which physically handed the same to Valencia.

ISSUE:
Whether or not Valencia is a regular employee of Classique Vinly

HELD:
It is an oft-repeated rule that in labor cases, as in other administrative and quasi-
judicial proceedings, ‘the quantum of proof necessary is substantial evidence, or such
amount of relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion.’ ‘The burden of proof rests upon the party who asserts the affirmative of an
issue.’” Since it is Valencia here who is claiming to be an employee of Classique Vinyl, it is
thus incumbent upon him to proffer evidence to prove the existence of employer-employee
relationship between them. He “needs to show by substantial evidence that he was indeed
an employee of the company against which he claims illegal dismissal.” Corollary, the
burden to prove the element 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 of control, lies upon Valencia.
Indeed, there is no hard and fast rule designed to establish the aforementioned elements of
employer-employee relationship.[23] "Any competent and relevant evidence to prove the
relationship may be admitted."[24] In this case however, Valencia failed to present
competent evidence, documentary or otherwise, to support his claimed employer
employee relationship between him and Classique Vinyl. All he advanced were mere tactual
assertions unsupported by proof.
In fact, most of Valencia's allegations even militate against his claim that Classique Vinyl
was his true employer. For one, Valencia stated in his Sinumpaang Salaysay that his
application was actually received and processed by CMS which required him to submit the
necessary requirements for employment. Upon submission thereof, it was CMS that caused
him to sign an employment contract, which upon perusal, is actually a contract between
him and CMS. It was only after he was engaged as a contractual employee of CMS that he
was deployed to Classique Vinyl. Clearly, Valencia's selection and engagement was
undertaken by CMS and conversely, this negates the existence of such element insofar as
Classique Vinyl is concerned. It bears to state, in addition, that as opposed to Valencia's
argument, the lack of notarization of the said employment contract did not adversely affect
its veracity and effectiveness since significantly, Valencia does not deny having signed the
same.
Aside from the afore-mentioned inconsistent allegations of Valencia, his claim that his work
was supervised by Classique Vinyl does not hold water. Again, the Court finds the same as a
self-serving assertion unworthy of credence. On the other hand, the employment contract
which Valencia signed with CMS categorically states that the latter possessed not only the
power of control but also of dismissal over him,
2. That the employee shall observe all rules and regulations of the company during the
period of employment and [the] lawful instructions of the management or its
representatives. Failure to do so or if performance is below company standards,
management [has] the right to immediately cancel this contract.
Clearly, therefore, no error can be attributed on the part of the labor tribunals and the CA in
ruling out the existence of employer-employee relationship between Valencia and
Classique Vinyl.
 ASIAN INSTITUTE OF MANAGEMENT v. ASIAN INSTITUTE OF
MANAGEMENT FACULTY ASSOCIATION
G.R. No. 207971; Jan 23, 2017
Right to Self-Organization

DOCTRINE: In case of alleged inclusions of disqualified employees in a union, the proper

procedure for an employer is to directly file a petition for cancellation of the union's
certificate of registration due to misrepresentation, false statement or fraud under the
circumstances enumerated in the Labor Code.

FACTS:
Asian Institute of Management (AIM) is a duly registered non-stock, non-profit
educational institution. Asian Institute of Management Faculty Association (Union) is a
labor organization composed of members of the AIM faculty. The Union filed a petition for
certification election (1st case), seeking to represent a bargaining unit in AIM, consisting of
40 faculty members. AIM opposed this petition, claiming that the Union’s members are
managerial employees, who the Labor Code prohibits from being members of a union. AIM
also filed a petition for cancellation of the Union’s certificate of registration (2nd case)
based on the same reason.
Both petitions were raised to the CA for review. For the 1st case, the CA ruled in favor of
AIM; and so, the Union elevated the same to the SC (this remained pending while the SC
disposed of herein case).
For the 2nd case, the CA ruled in favor of the Union; and so, AIM elevated this case before
the SC. AIM reiterated that the members of the Union are managerial employees, but it also
added that, due to this fact, the Union committed misrepresentation by declaring that its
members are eligible to join, assist, or form a labor organization, which is a ground to
cancel a union’s registration.

ISSUE: Whether or not AIM’s petition for cancellation of the Union’s certificate of
registration was the proper remedy to avail of.

HELD: Yes, AIM was correct in filing a petition for cancellation of the Union’s certificate of
registration. AIM’s sole ground for seeking cancellation of the Union’s certificate of
registration — that its members are managerial employees and for this reason, its
registration is thus a patent nullity for being an absolute violation of Article 245 of the
Labor Code which declares that managerial employees are ineligible to join any labor
organization — is, in a sense, an accusation that the Union is guilty of misrepresentation for
registering under the claim that its members are not managerial employees.
The resolution of the issue of whether the Union’s members are managerial employees is
still pending resolution in the 1st case, which is still pending. The resolution of this issue
cannot be pre-empted; until it is determined with finality in the 1st case, the petition for
cancellation of the Union’s certificate of registration on the grounds alleged by petitioner
cannot be resolved. As a matter of courtesy and in order to avoid conflicting decisions, we
must await the resolution of the petition in the 1st case.
 TURKS SHAWARMA COMPANY v. PAJARON
G.R. No. 207156; January 16, 2017
Labor Arbiter

DOCTRINE: The posting of cash or surety bond is mandatory and jurisdictional; failure to
comply renders the decision of the Labor Arbiter final and executory.

FACTS:
Turks Shawarma hired Pajaron as service crew and Carbonilla as head crew.
Pajaron and Carbonilla filed their respective complaints for constructive and actual illegal
dismissal. The Labor Arbiter ruled that Pajaron et al were constructively and illegally
dismissed by petitioners. It ordered Turks/Zeñarosa to pay Pajaron et al damages,
backwages, etc. Zeñarosa himself filed a Notice of Appeal and Motion to Reduce Bond
before the NLRC. Along with this, he posted a partial cash bond of P15,000.00,maintaining
that he cannot afford to post the full amount of the award since he is a mere backyard
micro-entrepreneur, and payment of the full amount of the award will greatly affect the
company’s operations.
The NLRC denied Turk’s motion on the ground that the grounds cited to reduce the
appeal bond are not meritorious and that the partial bond posted is not reasonable. The
posting of the remaining balance of the bond on more than 3 months from receipt of the
Labor Arbiter’s cannot be allowed; otherwise, it will be tantamount to extending the period
to appeal which is limited only to 10 days from receipt of the assailed Decision.
The CA affirmed the decision of the NLRC on the ground that Turks failed to comply
with the requisites in filing a motion to reduce bond, namely, the presence of a meritorious
ground and the posting of a reasonable amount of bond.

ISSUE: Whether or not the lower court should strictly apply the requirement of an appeal
bond?

HELD: Yes, the appeal bond should be strictly applied. Pursuant to the Labor Code, in case
of a judgment involving a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the Commission in the amount equivalent to the
monetary award in the judgment appealed from. Sections 6 of Rule VI of the 2005
Revised Rules of Procedure of the NLRC provides that no motion to reduce bond shall be
entertained except on meritorious grounds, and upon the posting of a bond in a reasonable
amount. The mere filing of a motion to reduce bond without complying with the requisites
in the preceding paragraphs shall not stop the running of the period to perfect an appeal.

The Labor Code and the NLRC Rules of Procedure are clear that there is legislative and
administrative intent to strictly apply the appeal bond requirement. The posting of cash or
surety bond is therefore mandatory and jurisdictional; failure to comply with this
requirement renders the decision of the Labor Arbiter final and executory.
The reduction of the appeal bond is allowed, subject to the following conditions: (1) the
motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable
amount in relation to the monetary award is posted by the appellant. Compliance with
these two conditions will stop the running of the period to perfect an appeal. The NLRC
correctly held that the supposed ground cited in the motion is not well-taken for there was
no evidence to prove Zeñarosa’s claim that the payment of the full amount of the award
would greatly affect his business due to financial setbacks. Besides, the law does not
require outright payment of the total monetary award; the appellant has the option to post
either a cash or surety bond.
 WESLEYAN UNIVERSITY v. WESLEYAN UNIVERSITY FACULTY
AND STAFF ASSOCIATION
G.R. No. 181806; March 12, 2014
Wages

DOCTRINE: A collective bargaining agreement cannot be unilaterally changed.

FACTS:
Wesleyan University and Union signed a 5-year CBA. A Memorandum providing
guidelines on the implementation of vacation and sick leave credits as well as vacation
leave commutation was issued by petitioner. Union President wrote a letter to the
president of the university informing him that respondent is not amenable to the unilateral
changes made by petitioner and questioning the guidelines for being contrary to the
existing practices and the CBA.
Petitioner advised respondent to file a grievance complaint on the implementation
of the vacation and sick leave policy during their Labor Management Committee Meeting.
Petitioner announced therein its plan of implementing a one-retirement policy which was
unacceptable to respondent. Unable to settle their differences at the grievance level, the
parties referred the matter to a Voluntary Arbitrator.
Respondent submitted affidavits showing that there is an established practice of
giving two retirement benefits: one from the Private Education Retirement Annuity
Association (PERAA) Plan and another from the CBA Retirement Plan.
ISSUE: Whether or not the CBA provision regarding retirement benefits may be unilaterally
amended.

HELD: No, the Non-Diminution Rule found in Article 100 of the Labor Code explicitly
prohibits employers from eliminating or reducing the benefits received by their employees.
This rule, however, applies only if the benefit is based on an express policy, a written
contract, or has ripened into a practice. To be considered a practice, it must be consistently
and deliberately made by the employer over a long period of time. An exception to the rule
is when “the practice is due to error in the construction or application of a doubtful or
difficult question of law.”The error, however, must be corrected immediately after its
discovery; otherwise, the rule on Non-Diminution of Benefits would still apply. In the case,
the practice of giving two retirement benefits to petitioner’s employees is supported by
substantial evidence. The Memorandum dated August 16, 2005 is contrary to the existing
CBA. Considering that the Memorandum dated August 16, 2005 imposes a limitation not
agreed upon by the parties nor stated in the CBA, we agree with the CA that it must be
struck down.

NAHAS v. OLARTE
G.R. No. 169247; June 2, 2014
Illegal Recruitment

DOCTRINE: If the recruitment/placement agency is a juridical being, the corporate officers

and directors and partners as the case may be, shall themselves be jointly and solidarily
liable with the corporation or partnership for the aforesaid claims and damages.

FACTS:
Olarte was deployed as a domestic helper to Hail, Saudi Arabia for a contract term of
two years. In the succeeding months, Olarte was diagnosed to be suffering from ostro-
arthritis. Olarte requested her employer, Fahad, to allow her go home to the Philippines but
such was denied. At that point, Fahad was already frequently maltreating her since she
could no longer accomplish all the household chores due to her illness. Olarte had the
chance to go home when she was allowed to go to Riyadh wherein she sought refuge at the
Philippine Embassy.
 Olarte filed a Complaint for illegal dismissal, damages, attorney’s fees and refund of
placement fees against her foreign employer Fahad and Nahas/PETRA/Royal Dream.

ISSUE: Whether or not Nahas, as the manager and owner of the recruitment agency, can be
held liable?
HELD: Yes, if the recruitment/placement agency is a juridical being, the corporate officers
and directors and partners as the case may be, shall themselves be jointly and solidarily
liable with the corporation or partnership for the aforesaid claims and damages.
Inconsistent and unsupported as they are, the labor tribunals and the CA correctly rejected
the contentions of Nahas. It is worth stating that recruitment agencies, as part of their
bounden duty to protect the welfare of the Filipino workers sent abroad from whom they
take their profit, should in conscience not add to the misery of maltreated and abused
Filipino workers by denying them the reparation to which they are entitled. Instead, they
must "faithfully comply with their government prescribed responsibilities" and be the first
to ensure the welfare of the very people upon whose patronage their industry thrives.

PHIL. TRANSMARINE CARRIERS, INC. (PTC) v. ALIGWAY

G.R. No. 201793; September 16, 2015
Special Groups of Employees

DOCTRINE: For disability to be compensable, (1) the seafarer’s injury or illness must be
work-related; and (2) the work-related injury or illness must have existed during the term
of his employment contract. A person who claims entitlement to the benefits provided by
law must establish his right thereto by substantial evidence or “such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.” The Court cannot
grant a claim for disability benefits without such substantial evidence because to do so
would be offensive to due process.

FACTS:
PTC, in behalf of its foreign principal, employed Aligway as chief cook on board the
vessel Amasis. Aligway’s employment contract was for nine months. Aligway alleged that
before his deployment, he was declared fit to work in a preemployment medical
examination. Then, while aboard the vessel, Aligway suffered from “vomiting, anorexia,
weight loss, and palpitations followed by dizziness and lightheadedness.”
As a result, he was medically repatriated. This condition allegedly rendered him
incapacitated to work as a seafarer, but the PTC refused to pay him disability benefits.

ISSUE: Whether or not Aligway was entitled to disability benefits.

HELD: No, because Aligway did not suffer from an occupational disease.For disability to be
compensable, (1) the seafarer’s injury or illness must be work-related; and (2) the work-
related injury or illness must have existed during the term of his employment contract.
Also, a person who claims entitlement to the benefits provided by law must establish his
right thereto by substantial evidence or such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion. The Court cannot grant a claim for disability
benefits without such substantial evidence because to do so would be offensive to due
process.In this case, considering that Aligway did not suffer from an occupational disease
— or such diseases listed under Section 32-A of the 2000 POEA-SEC — it stands to reason
that to be entitled to disability benefits, he must establish that he suffered from a work
related injury or illness. Here, Aligway failed to discharge this burden. He failed to prove
the required causal connection between his stomach cancer and his work as chief cook
aboard the vessel. Thus, he is not entitled.
 CELIZ v. CORD CHEMICALS, INC.
G.R. No. 200352; July 20, 2016
Termination by Employer

DOCTRINE: When a managerial employee violates the trust and confidence reposed in her,
she is not entitled to any benefit in leaving her employer.

FACTS:
Mary June Celiz, an employee of Cord Chemicals, Inc. with the positions of Chief of
Sales and Senior Operations Manager, filed a case for illegal dismissal against her Cord.
She claims that her dismissal on the ground of loss and confidence was not supported by
substantial evidence in that it was not proven that she received the PhP445,000.00 out of
the PhP 713,000.00 unliquidated cash advances attributed to her; that the charges against
her were fabricated by the current CEO of Cord (wife of former CEO) as revenge for the
unproved claim that she was the mistress of the former CEO; and that she was deprived of
procedural due process.

ISSUE: 1. Whether or not Celiz was illegally dismissed.

2. Whether or not procedural due process was accorded to Celiz.

HELD:
1. No, Celiz was not illegally dismissed. Since there is no divergence between the findings of
these three tribunals (LA, NLRC, CA), there is no need to go over the evidence once more in
order to resolve the issues relative to Celiz's failure to liquidate her cash advances and the
manner by which she was terminated. Suffice it to state that, in cases of dismissal for
breach of trust and confidence, proof beyond reasonable doubt of an employee's
misconduct is not required. It is sufficient that the employer had reasonable ground to
believe that the employee is responsible for the misconduct which renders him unworthy
of the trust and confidence demanded by his position.
2. No, it is also beyond cavil that Cord observed the requirements of procedural due
process. In the first Notice to Explain, Cerizwas properly informed of the charge against
her, i.e. , failure to liquidate the cash advances. In addition, Cord allowed Ceriz access to
company records in order for the latter to thoroughly prepare her explanation and defense.
Considering the circumstances, Cord even generously granted Ceriz more time to sift
through the company records. However, Ceriz was only able to liquidate a small portion of
the cash advances; she failed to explain how and where she spent the rest. Consequently,
Cord had no other recourse but to dismiss Ceriz for loss of trust and confidence. It is on
record that Cord notified Ceriz of her termination from service.

TABUK MULTIPURPOSE COOPERATIVE, INC. (TAMPCO) v. DUCLAN

G.R. No. 203005; March 14, 2016
Discipline

DOCTRINE: The persistent refusal of the employee to obey the employer's lawful order
amounts to willful disobedience.

FACTS:
TAMPCO is a duly registered cooperative based in Tabuk City, Kalinga, engaged in
the business of obtaining investments from its members which are lent out to qualified
member-borrowers.
TAMPCO’s Board of Directors issued a Board Action (BA) to limit the grant of Special
Investment Loans (SILs) to PhP 5M. Later, because too many SILs were being granted, a
number exceeding the mentioned limit, the BoD decided to issue another BA to completely
halt the grant of the SILs pending the collection of outstanding loans.
However, despite the moratorium on granting SILs, the same were still granted, even
exceeding the amount limit placed by the BA.
Due to the violations of the BAs, TAMPCO indefinitely suspended Duclan, the
treasurer/cashier, and a number of other involved persons. The BoD created a committee
to investigate the SIL debacle. It later recommended, which the BoD adopted, for Duclan be
suspended again and for her to collect the SIL released in violation of the BAs, on the
condition that she will be dismissed if she is unable to collect or pay for the said amount.
Duclan filed a complaint for illegal dismissal, wherein one of her allegations is that her right
to equal protection was violated, because the General Manager (who was charged with the
same violations as her) was permitted to retire and collect his benefits instead of being
dismissed.

ISSUE: Whether or not TAMPCO was unfair in dismissing Duclan.

HELD: No, Duclan’s TAMPCO was fair in dismissing Duclan. Her right to equal protection
was not violated. While the CA finds that it is unfair for TAMPCO to treat respondent
differently from the former General Manager, who was permitted to retire and collect his
benefits in full, the appellate court must nonetheless be reminded that "[t]he law protects
both the welfare of employees and the prerogatives of management. Courts will not
interfere with prerogatives of management on the discipline of employees, as long as they
do not violate labor laws, collective bargaining agreements if any, and general principles of
fairness and justice." Moreover, management is not precluded from condoning the
infractions of its employees; as with any other legal right, the management prerogative to
discipline employees and impose punishment may be waived. As far as Duclan is
concerned, TAMPCO chose not to waive its right to discipline and punish her; this is its
privilege as the holder of such right. Finally, it cannot be said that Duclanwas discriminated
against or singled out, for among all those indicted, only the former General Manager was
accorded leniency; the rest, including Duclan, were treated on equal footing. As to why the
former General Manager was allowed to retire, this precisely falls within the realm of
management prerogative; what matters, as far as the Court is concerned, is that Duclanwas
not singled out and treated unfairly.

VILLAMOR v. EMPLOYEES’ COMPENSATION COMMISSION

G.R. No. 204422; November 21, 2016
Employee’s Compensation

DOCTRINE: What the law requires for a claim of sickness benefits before the ECC is not a
direct causal relation between the sickness and the work, but a reasonable work-
connection.

FACTS:
Villamor was employed by Valle Verde Country Club, Inc. (VVCCI) as a Sports Area-
In Charge, tasked to deal with the needs and complaints of the club members and their
guests who wish to use the club's facilities. o The SSS and the ECC characterized his
responsibilities as that of a “clerk”, merely responsible for issuance of vouchers. On
November 2006, Villamor was brought to Our Lady of Lourdes Hospital in Manila, due to
dizziness associated with numbness and weakness on his left arm and leg. This was ruled
as a stroke. o A CT scan revealed that Villamor had hypertension.
Villamor filed a claim before the SSS for sickness benefits under the SSS Law. This was
denied by the SSS for lack of a causal relationship between Villamor's job as a clerk and his
illness. o The SSS also cited, among others, Villamor’s smoking history, drinking habit, and
poor compliance with anti-hypertensive medication, which increased Villamor’s risk of
hypertension. Villamor filed a claim before the ECC. This was also denied. The ECC ruled
that the illness was a result of complications expected from a progressive disease,
enhanced by major risk factors.

ISSUE: Whether or not the Villamor is entitled to sickness benefits?

HELD: Yes, Villamor is entitled to sick benefits, because his duties and responsibilities as
Sports Area In-Charge were not merely limited to issuance of vouchers and receipts (as a
clerk would do). His responsibilities required him to deal with laborious and stressful
situations, which included receiving complaints and requests of club members and their
guests. He was also the president of the union. Moreover, under the Amended Rules on
Employees' Compensation, cerebro-vascular accident and essential hypertension are
considered as occupational diseases. As such, a covered claimant suffering from an
occupational disease is automatically paid benefits. What the law requires in a claim of
benefits before the ECC is not a direct causal relation, but a reasonable work-connection.

MALIXI v. MEXICALI PHILIPPINES

G.R. No. 205061; June 08, 2016
National Labor Relations Commission

DOCTRINE: The reglementary period for an appeal before the NLRC must be counted from
the receipt of the Decision by the counsel or representative on record. The NLRC may rule
upon the merits of a case in a motion for reconsideration, even when not raised, if these
form part of the record attached to the motion for reconsideration.

FACTS:
Malixi was hired by Mexicali Philippines as a team leader assigned at the delivery
service. In 2008, Mexicali’s training officer informed Malixi that the management intended
to transfer and appoint her as store manager in a newly opened branch in Alabang Town
Center, due to her satisfactory performance. The Alabang branch was a joint venture
between Mexicali and Calexico. Malixi was compelled by Teves, the training officer, to sign
an end-of-contract letter by reason of a criminal complaint that Malixi filed against Pontero,
Mexicali’s operations manager, for sexual harassment.
Malixi refused to sign the end-of-contract letter. Due to this, Mexicali’s administrative
officer personally went to the Alabang branch and sought Malixi’s signature. Malixi
complained of illegal dismissal before the LA. The LA ruled in favor of Malixi.
The NLRC dismissed the appeal filed by Mexicali for being filed out of time. The NLRC
reckoned the start of the period from the time Mexicali actually received a copy of the
decision. The NLRC granted Mexicali’s Motion for Reconsideration of the dismissal, and
reinstated the appeal. The NLRC, this time, reckoned the period from the time Mexicali’s
counsel received a copy of the decision. The NLRC also ruled on the merits of the petition,
and partially granted the same.
MENDOZA V. OFFICERS OF MANILA WATER EMPLOYEES UNION
G.R. No. 201595; January 25, 2016
Bureau of Labor Relations

DOCTRINE: The charge of unfair labor practice falls within the original and exclusive
jurisdiction of the Labor Arbiters, pursuant to Article 217 of the Labor Code; not the BLR.

FACTS:
MWEU (union) informed Mendoza, a member of MWEU, that the union was unable
to fully deduct the increased P200 union dues from his salary due to the lack of the
required check-off authorization from him. He was further warned that his failure to pay
the union dues would result in sanctions as it would violate the By-Laws.
The President of the MWEU’s Executive Board referred the charge to the grievance
committee, which recommended that Mendoza be suspended for 30 days. Mendoza
appealed to the General Membership Assembly but said appeal was denied. He was again
charged with non-payment of union dues, and he again invoked his right to appeal through
the General Membership Assembly but this was not acted upon by respondents. He was
again penalized with a 30-day suspension.
MWEU scheduled an election of officers of which Mendoza filed his certificate of candidacy
for Vice-President, but was disqualified on account of the suspension. He was charged for
non-payment of union dues for the third time and was expelled from the union. During the
freedom period and negotiations for a new CBA, Mendoza joined WATER-AFWC and was
elected union president. Mendoza then filed a complaint for unfair labor practice, alleging
that he was illegally terminated.

ISSUE: Whether or not the officers of MWEU are guilty of unfair labor practices?

HELD: Yes, unfair labor practice relates to the commission of acts that transgress the
workers’ right to organize. Article 248 (a) declares it to be an unfair labor practice for an
employer, among others, to ‘interfere with, restrain or coerce employees in the exercise of
their right to self-organization.’ Similarly, Article 249 (a) makes it an unfair labor practice
for a labor organization to ‘restrain or coerce employees in the exercise of their rights to
self-organization. The officers of MWEU’s repeated violations and disregard of Mendoza’s
rights as a union member -- by their inaction on his appeals which resulted in his
suspension, disqualification and expulsion without due process – connote willfulness and
bad faith.

HERNANDEZ v. CROSSWORLD MARINE SERVICES INC.

G.R. No. 209098; November 14, 2016
National Labor Relations Commission

DOCTRINE: A waiver which intends to skirt the Labor Code’s requirement for mandatory
execution proceedings following a favorable judgment is void.

FACTS:
Hernandez was working as a cook of Mykronos, Crossworld, and Diaz (Respondents) since
2005, under different employment contracts covering the respondents’ oceangoing vessels.
On October 2008, Hernandez was engaged by Respondents as a Chief Cook aboard M/V
Nikomarin for 9 months. The salary was inclusive of fixed overtime pay, food allowance,
leave pay, and long service bonus. Upon expiration of the contract, Hernandez was again
engaged for an additional 5 months. Hernandez was repatriated in December 2009.
Hernandez was made to undergo a pre-employment medical examination prior to another
engagement under a new contract. He was diagnosed with hypertension and diabetes;
however, he was declared fit for work, and was required to take maintenance medication.
Even after the declaration that Hernandez was fit for work, Respondents deferred
Hernandez’s employment on account of his state of health. Mykronos consulted two
separate physicians, who diagnosed Hernandez of hypertension and diabetes, but he was
declared unfit for sea duty in whatever capacity as seaman. Hernandez claimed
compensation by way of disability benefits before the NLRC by way of medical expenses
from Respondents, as they refused to pay. The NLRC declared that Hernandez is entitled to
disability benefits.

Pending the petition for certiorari before the CA, Mykronos paid Hernandez the amount of
the NLRC judgment award. In return, Hernandez was made to sign a Conditional
Satisfaction of Judgment (without prejudice to the pending petition for certiorari in the
Court of Appeals). o The Conditional Satisfaction of Judgment provided that the payment:
(1) was made to prevent imminent execution by the NLRC of its decision; that it (2) was
made in the understanding that in case of modification of judgment by the CA or SC,
Hernandez shall return the amounts due and owing to Mykronos/manning agents without
need of further demand; and (3) that Hernandez has no further claims against the owners
of M/V Nikomarin. The CA granted the petition for certiorari, and ordered Hernandez to
return the amount received under the Conditional Satisfaction of Judgment on the ground
of Article 19 of the Civil Code.

ISSUE: Whether or not Hernandez must return the judgment award received under the
Conditional Satisfaction of Judgment.

HELD: No, Hernandez does not need to return the judgment award her received. This is
because the Conditional Satisfaction of Judgment constituted a “waiver that amounted to
nothing”. Hidden behind these documents appears to be a convenient ploy to deprive
Hernandez of all his rights to claim indemnity from respondents under all possible causes
of action and in all available fora, and effectively for nothing in return or exchange —
because in the that the NLRC ruling is reversed, then Hernandez must return what he
received, thus leaving him with the proverbial empty bag. This is fundamentally unfair, and
goes against public policy. Within the context of the constitutional, legislative, and
jurisprudential guarantees afforded to labor, such a waiver is unfair, unjust, and arbitrary,
as it skirted the intended consequence of the law, which is the mandatory execution
proceedings following a favorable judgment allowed under the Labor Code.
Respondents could have simply paid the judgment award without attaching conditions that
have far-reaching consequences other than those intended by a simple compliance with
what was required under the circumstances — that is, the mandatory execution
proceedings following a favorable judgment allowed under the Labor Code. For what they
did, the respondents herein are held to be in bad faith, and should suffer the consequences
of their actions. One is that their payment of petitioner's claim should properly be treated
as a voluntary settlement of his claim in full satisfaction of the NLRC judgment.
 VICMAR DEVELOPMENT CORPORATION v. ELARCOSA
G.R. No. 202215; December 09, 2015
Employee-Employer Relationship

DOCTRINE: The test to determine whether an employee is regular is the reasonable

connection between the activity he performs and its relation to the employer's business or
trade, as in the case of respondents assigned to the boiler section. Nonetheless, the
continuous re-engagement of all respondents to perform the same kind of tasks proved the
necessity and desirability of their services in the business of Vicmar. They were shown to
have performed activities necessary in the usual business for at least one year so the
presumption of regular employment should be granted in their favor.
FACTS:
The respondents filed complaints for illegal dismissal against Vicmar Development
Corporation, alleging that Vicmar had employed them as extra workers but their
assignments were necessary and desirable to the business. In 2004, Vicmar informed them
that they would be handled by contractors who had no equipment or facilities of their own,
thus resulting in a reduction of their wages despite overtime work. They also claimed that
28 of them were no longer scheduled for work and that the remaining respondents were
subsequently not given any work schedule. As such, they averred that Vicmar dismissed
them from service without due process after they instituted the complaint. On the other
hand, Vicmar contended that hiring said contractors was a cost-saving measure, which was
part of Vicmar's management prerogative. Said extra workers were employed on a pakyaw
basis.

ISSUE: Whether or not respondents are regular employees and their termination without
valid cause amounts to illegal dismissal?

HELD: Yes, the respondents were regular employees whose separation from work without
valid cause amounted to illegal dismissal. Section 280 of the Labor Code defines a regular
employee as one who is 1) engaged to perform tasks usually necessary or desirable in the
usual business or trade of the employer, unless the employment is one for a specific project
or undertaking or where the work is seasonal and for the duration of a season; or 2) has
rendered at least 1 year of service, whether such service is continuous or broken, with
respect to the activity for which he is employed and his employment continues as long as
such activity exists. The test to determine whether an employee is regular is the
reasonable connection between the activity he performs and its relation to the
employer's business or trade, as in the case of respondents assigned to the boiler section.
Nonetheless, the continuous re-engagement of all respondents to perform the same kind of
tasks proved the necessity and desirability of their services in the business of Vicmar. They
were shown to have performed activities necessary in the usual business for at least one
year so the presumption of regular employment should be granted in their favor.
Likewise, Vicmar failed to prove that the contractors it engaged were legitimate labor
contractors. To determine the existence of independent contractorship, it is necessary to
establish that the contractor carries a distinct and independent business, and undertakes to
perform work on its own account and under its responsibility and pursuant to its own
manner and method, without the control of the principal, except as to the result; that the
contractor has substantial capital or investment; and, that the agreement between the
principal and the contractor assures the contractual employees to all labor and
occupational safety and health standards, to right to self-organization, security of tenure
and other benefits. The registration of the contractors is not conclusive of the status of a
legitimate contractor; rather, it merely prevents the presumption of being a labor-only
contractor from arising, especially when no evidence has been shown to prove that E.A.
Rosales Contracting has substantial capital and that contractors undertook performance of
service contracts without the control and supervision of Vicmar.
 LITEX GLASS AND ALUMINUM SUPPLY v. SANCHEZ
G.R. No. 198465; April 22, 2015
Termination By Employer

DOCTRINE: Requisites for Abandonment: (1) Employee failed to report to work w/o any
valid and justifiable reason and (2) There is clear intent to sever employer-employee
relationship.

FACTS:
Sanchez was employed by Litex since 1994 and from that time until 2008, he has been
working diligently for his employer Ong-Sitco without any work related offense. On
December 23, 2008, he was surprised when Sitco along with the latter’s wife, scolded him
without any reason an ordered him to go on indefinite leave. On December 28, 2008 and
January 2 and 9, 2009, he attempted to talk to his Sitco about his employment status but
was repeatedly ignored. This prompted him to file a case for Illegal Dismissal against
petitioners.
After the filing of the Complaint, Sanchez received two memorandum-letters from
petitioners. The first one was dated January 7, 2009 but was mailed on February 23, 2009
and received by Sanchez on February 26,2009. The said memorandum-letter instructed
Sanchez to return to work and to explain his allegedly unauthorized absence from
December 22,2008-Jan 7, 2009 which was after he was given a verbal warning for some
supposed infractions against the company. The second one was dated January 22, 2009 but
was mailed on March 10, 2009 and received by Sanchez on March 22, 2009. It contained a
warning that his refusal to follow the earlier instruction to report for work and explain his
absence within 24 hours would mean abandonment of work on his part. Petitioners argue
that they did not dismiss Sanchez, that it was the latter who abandoned his job by now
reporting for work.

ISSUE: Whether or not Sanchez abandoned his work.

HELD: No, there was no abandonment. The Requisites for Abandonment are: (1) Employee
failed to report to work w/o any valid and justifiable reason and (2) There is clear intent to
sever employer-employee relationship. The acts of Ong-Sitco belie any claim of
abandonment. After asking to take an indefinite leave, Sanchez tried several times to talk to
his employer but was repeatedly ignored. Also during this instance Ong-Sitco did not even
warn Sanchez about his continued absence and neither did he instruct him to report back
to work. This is also strengthened by the fact that the two memorandum letters were sent
after Sanchez after he filed the complaint. This would imply that this was merely an
afterthought by Ong-Sitco to give some justification for his termination. Also, the
immediate filing of a complaint by Sanchez is proof of his desire to return to work.
Moreover, it has been held in a long line of cases that the filing of a complaint negates any
intention of abandoning employment.

INUTAN ET AL v. NAPAR CONTRACTING AND ALLIED SERVICES

G.R. No. 195654; November 25, 2015
Transfer of Employees

DOCTRINE: Management is free to regulate, according to its own discretion and judgment,
all aspects of employment, including hiring, work assignments, working methods, time,
place and manner of work, processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, layoff of workers and discipline,
dismissal and recall of workers. The exercise of management prerogative, however, is not
absolute as it must be exercised in good faith and with due regard to the rights of labor.”
Such “cannot be used as a subterfuge by the employer to rid himself of an undesirable
worker.”

FACTS:
Petitioners were employees of Napar, a recruitment agency. Napar assigned petitioners to
work as factory workers, machine operator, quality control inspector, selector, mixer and
warehouseman at Jonas, a corporation engaged in the manufacture of food products.
Petitioners and respondents entered into a Joint Compromise Agreement (JCA) which
required petitioners, among others (1) to submit their respective bio-data/resume and
several documents such as Police Clearance, NBI Clearance, Barangay Clearance, Mayor’s
Permit, Health Certificate, drug test results, community tax certificate, eye test results and
medical/physical examination results; (2) to attend orientation seminars; (3) to undergo
series of interviews; and (4) to take and pass qualifying examinations, before they could be
posted to their new assignments.
These requirements, according to Napar, are needed to properly assess petitioners’ skills
for new placement with the agency’s other clients. Petitioners failed to fully comply; hence
they were not given new assignments.

ISSUE: Whether or not Napar validly exercised its management prerogative in not giving
the petitioners assignments for the latter’s failure to fully comply with the requirements in
the JCA.

HELD: No, while we consider Napar’s decision to require petitioners to submit documents
and employment clearances, to attend seminars and interviews and take examinations,
which according to Napar is imperative in order for it to effectively carry out its business
objective, as falling within the ambit of management prerogative, this undertaking should
not, however, deny petitioners their constitutional right of tenure. Besides, there is no
evidence nor any allegation proffered that Napar has no available clients where petitioners
can be assigned to work in the same position they previously occupied. Plainly, Napar’s
scheme of requiring petitioners to comply with reassessment procedures only seeks to
prevent petitioners’ immediate reassignment.It has been held that management is free to
regulate, according to its own discretion and judgment, all aspects of employment,
including hiring, work assignments, working methods, time, place and manner of work,
processes to be followed, supervision of workers, working regulations, transfer of
employees, work supervision, layoff of workers and discipline, dismissal and recall of
workers. The exercise of management prerogative, however, is not absolute as it must be
exercised in good faith and with due regard to the rights of labor. Such cannot be used as a
subterfuge by the employer to rid himself of an undesirable worker.

SOCIAL SECURITY SYSTEM v. UBANA

G.R. No. 200114; August 24, 2015
Labor Arbiter

DOCTRINE: Where no employer-employee relationship exists between the parties and no

issue is involved which may be resolved by reference to the Labor Code, other labor
statutes or any collective bargaining agreement, the action is within the realm of civil law
hence jurisdiction over the case belongs to the regular courts.

FACTS:
While Ubana’s service contract with the DBP Service Corporation was never
renewed, she continued to be employed by the SSS; she was continually assured of being
absorbed into the SSS; in fact, she was qualified for the position as she passed the required
training. Because of the oppressive and prejudicial treatment of the SSS, she was forced to
resign in August 2002. The defendants conspired to exploit her and violate civil service
rules and regulations and Civil Code provisions. She filed a complaint and prayed for
damages before the RTC. SSS filed MTD for lack of jurisdiction, averring that the complaint
was predicated on the claims that arose out of employer-employee relations, thus
cognizable by the NLRC.

ISSUE: Whether or not RTC has jurisdiction over the case filed by Ubana?

HELD: Yes, for Article 217 of the Labor Code to apply, and in order for the Labor Arbiter to
acquire jurisdiction over a dispute, there must be an employer-employee relation between
the parties thereto. It is well settled in law and jurisprudence that where no employer-
employee relationship exists between the parties and no issue is involved which may be
resolved by reference to the Labor Code, other labor statutes or any collective bargaining
agreement, it is the Regional Trial Court that has jurisdiction. The action is within the realm
of civil law hence jurisdiction over the case belongs to the regular courts. While the
resolution of the issue involves the application of labor laws, reference to the labor code
was only for the determination of the solidary liability of the petitioner to the respondent
where no employer-employee relation exists. Notably, an employer-employee relationship
is an indispensable jurisdictional requisite. Since there is no employer-employee
relationship between the parties herein, then there is no labor dispute cognizable by the
Labor Arbiters or the NLRC. There being no employer-employee relation or any other
definite or direct contract between respondent and petitioner, the latter being responsible
to the former only for the proper payment of wages, respondent is thus justified in filing a
case against petitioner, based on Articles 19 and 20 of the Civil Code, to recover the proper
salary due her as SSS Processor.