LABOR CASES: HELD: Yes.
Even an unborn child is a dependent of its
FINALS PERIOD
CONTINENTAL STEEL MANUFACTURING VS
MONTANO
FACTS: Hortillano, an employee of petitioner
Continental Steel, filed a claim for Paternity Leave,
Bereavement Leave and Death and Accident Insurance
for dependent, pursuant to the CBA. The claim was for
Hortillano’s unborn child who died. Hortillano’s wife had
a premature delivery while she was on her 38th week of
pregnancy. The female fetus died during the labor. The
company granted Hortillano’s claim for paternity leave
but denied his claims for bereavement leave and death
benefits. Hortillano claimed that the provision in CBS did
not specifically state that the dependent should have first
been born alive or must have acquired juridical
personality. Petitioner argued that the said provision of
CBA did not contemplate death of an unborn child or a
fetus without legal personality. They also claimed that
there are two elements for the entitlement of the benefit:
1) death; and 2) status of legitimate dependent. None
which existed in Hortillano’s case. They further contend
that the only one with civil personality could die, based
on Art 40-42 of Civil Code. Hence, according to
petitioner, the unborn child never died. Labor Arbiter
Montana argued that the fetus had the right to be
supported by the parents from the very moment he/she
was conceived. Petitioner appealed to CA but CA
affirmed Labor Arbiter’s decision. Hence, this petition.
ISSUE: W/N only one with juridical personality can die.
HELD: No. The reliance of Continental Steel on Articles
40, 41 and 42 of the Civil Code for the legal definition of
death is misplaced. Article 40 provides that a conceived
child acquires personality only when it is born, and
Article 41 defines when a child is considered
born. Article 42 plainly states that civil personality is
extinguished by death. The issue of civil personality is
irrelevant in this case. Arts 40-42 do not provide at all
definition of death. Life is not synonymous to civil
personality. One need not acquire civil personality first
before s/he could die. The Constitution in fact recognizes
the life of the unborn from conception.
ISSUE2: W/N a fetus can be considered as a dependent.
parents. The fetus would have not reached 38-39 weeks
without depending upon its mother.
UNITED KIMBERLY CLARK UNION VS
KIMBERLY CLARK
FACTS: United Kimberly-Clark Employees Union
(UKCEU), a local chapter affiliate of the Philippine
Transport General Workers’ Organization (PTGWO), is
the certified collective bargaining agent of all rank-and-
file employees of the San Pedro milling plant of
Kimberly-Clark Philippines, Inc. (KCPI), a multinational
corporation engaged in the manufacture of bathroom and
facial tissues, paper napkins, feminine care products,
disposable diapers and absorbent cotton.
In 1980, KCPI and the UKCEU executed a CBA which
essentially states that the Company agrees to employ,
regardless of sex, the immediate member of the family of
an employee provided qualified, upon the employee’s
resignation, retirement, disability or death. The phrase
“immediate member of the family of an employee”
referred to the employee’s legitimate children and in
default thereof to the employee’s collateral relative within
the third civil degree. The recommendee of the
retired/resigned employee shall, if qualified, be hired on
probationary status. But the KCPI did not set any other
qualifying standards for the recommendees of retired,
resigned, deceased or disabled employees and agreed to
hire such recommendees who were high school graduates
as an act of liberality and generosity. The provision
remained unchanged.
November 7, 1995, KCPI issued Guidelines on the Hiring
of Replacements of Retired/Resigned Employees. The
Guidelines require, among others, that: (a) such
recommendees must be at least 18 years of age but not
more than 30 years old at the time of the hiring, and (b)
have completed, after graduating from high school, at
least a two-year technical/vocational course or a third year
level of college education
During the negotiation for the new 1997 CBA, UKCEU
proposed the amendment of Article XX, Section 1
(concerning the recommendation of relatives as
replacement of former employees) of the CBA. After the
negotiation, KCPI and UKCEU executed a CBA to cover
the period from July 1, 1997 to June 30, 1999. The
educational qualifications contained in the Guidelines
were not incorporated in the CBA. CBA was retained
1
without any modification. KCPI continued to hire
employees pursuant to the CBA up to 1998.
In the second half of 1998, KCPI started to suspend the
implementation of the CBA. This was partly due to the
depressed economic conditions then prevailing in the
Philippines, and in compliance with the freeze hiring
policy of its Asia-Pacific headquarters. It refused to hire,
as regular employees, 80 recommendees of retiring
employees. KCPI and UKCEU failed to settle the matter
through the existing grievance machinery.
April 23, 1999, the parties filed before the National
Conciliation and Mediation Board (NCMB), a
Submission Agreement referring to arbitration the issue
of whether KCPI violated the CBA. Meantime, in August
1999, KCPI and UKCEU executed a new CBA. Article
XX, Section 1 was incorporated in the new CBA,
governing the relation of the parties up to June 30, 2002.
UKCEU averred in its pleadings that the “qualification in
terms of education,” that is, admitting recommendees
who were at least high school graduates, had been an
established practice of KCPI since 1980 so that KCPI
could not just unilaterally revoke such practice without its
(UKCEU) consent and approval, and that while KCPI had
the discretion to raise the educational qualification of its
applicants for employment, this did not apply to
recommendees due to the manner by which Article XX,
Section 1 was implemented in the past. Thus, in refusing
to hire the 80 recommendees as regular employees, KCPI
violated its CBA with the union, equivalent to breach of
contract and unfair labor practice.
KCPI maintained that pursuant to its management
prerogative, it had the right to determine hiring standards
under Article XX, Section 1 of the CBA without the
consent or approval of UKCEU. It argued that like
applicants for regular positions, recommendees of retiring
employees must also be college graduates, in accordance
with its Guidelines.
March 19, 2001, the Voluntary Arbitrator (VA) issued a
Resolution favoring UKCEU. And held that the company
cannot suspend implementation of Section 1, Article XX
of the existing CBA unilaterally by upgrading the
educational qualifications of “applicants-replacements”
than are required previously; and that since the CBA is
the law between the parties, KCPI could not just
unilaterally change or suspend the implementation of the
existing employment requirements, even in the light of
the business situation then prevailing in the Philippines.
KCPI questioned the decision of the VA via petition for
review before the CA. CA partially set aside the
Resolution of the VA and ruled that KCPI may validly
exercise its management prerogative and impose the
requirement on recommendees. Only UKCEU moved for
a partial reconsideration of CA Decision. CA denied the
MR. hence this instant petition.
ISSUE: WON the CA erred in ruling that, under Article
XX, Section 1 of the CBA, respondent is required to hire
only those recommendees of retired/resigned, deceased or
disabled members of petitioner who had completed at
least a two-year technical/vocational course or a third-
year level of college education.
RULING: The court ruled against the petitioner. An
arbitrator is confined to the interpretation and application
of the collective bargaining agreement. He does not sit to
dispense his own brand of industrial justice: his award is
legitimate only in so far as it draws its essence from the
CBA.
A CBA is more than a contract. It covers the whole
employment relationship and prescribes the rights and
duties of the parties. It is a system of industrial self-
government with the grievance machinery at the very
heart of the system. The parties solve their problems by
molding a system of private law for all the problems
which may arise and to provide for their solution in a way
which will generally accord with the variant needs and
desires of the parties.
If the terms of a CBA are clear and have no doubt
upon the intention of the contracting parties, the literal
meaning of its stipulation shall prevail. But, if, in a CBA,
the parties stipulate that the hirees must be presumed of
employment qualification standards but fail to state such
qualification standards in said CBA, the VA may resort to
evidence extrinsic of the CBA to determine the full
agreement intended by the parties. Gaps may be left to be
filled in by reference to the practices of the industry, and
the step which is equally a part of the CBA although not
expressed in it. In order to ascertain the intention of the
contracting parties, their contemporaneous and
subsequent acts shall be principally considered. VA may
also consider and rely upon negotiating and contractual
history of the parties, evidence of past practices
interpreting ambiguous provisions. The VA has to
examine such practices to determine the scope of their
agreement, as where the provision of the CBA has been
loosely formulated. CBA must be construed liberally
2
rather than narrowly and technically and the Court must
place a practical and realistic construction upon it.
In the present case, the parties are in agreement that,
on its face, Article XX, Section 1 of their 1997 CBA does
not contain any provision relative to the employment
qualification standards of recommendees of
retired/resigned, deceased or disabled employees of
respondent who are members of petitioner. However, in
determining the employment qualification standards for
said recommendees, the VA should have relied on the
Guidelines issued by respondent. By executing the 1997
CBA, in its present form, petitioner is bound by the terms
and conditions therein set forth.
The VA, however, ignored the plain language of the
1997 CBA of the parties, as well as the Guidelines issued
by respondent. He capriciously based his resolution on
the respondent’s practice of hiring.
The Court has recognized the undoubted right of the
employer to regulate, according to his own discretion and
best judgment, all aspects of employment, including but
not limited to, work assignments and supervision,
working methods and regulations, time, place and manner
of work, processes to be followed, and hiring,
supervision, transfer, discipline, lay off, dismissal and
recall of workers. But the exercise of this right is not
absolute. Management prerogative must be exercised in
good faith for the advancement of the employer’s interest
and not for the purpose of defeating or circumventing the
rights of the employees under special laws, valid
agreements such as the individual contract of employment
and the CBA, and general principles of justice and fair
play. In this case, the Court finds that respondent acted in
accord with the CBA and the Guidelines, which, by
agreement of the parties, may be implemented by
respondent.
HOLY CROSS OF DAVAO COLLEGE VS HOLY
CROSS OF DAVAO FACULTY UNION-KAMAPI
(book page 497: no digest)
SAMAHAN NG MANGGAGAWA NG TOP FORM
VS NLRC
Facts:
 Petitioner Samahang Manggagawa sa Top Form
Manufacturing — United Workers of the Philippines
(SMTFM) was the certified collective bargaining
representative of all regular rank and file employees
of private respondent Top Form Manufacturing
Philippines, Inc
 On February 27, 1990, A the collective bargaining
negotiation was held.
 The parties agreed to discuss unresolved economic
issues. According to the minutes of the meeting,
Article VII of the collective bargaining agreement
was discussed.
o In the minutes of the meeting, across the board
wage increase was tackled but it was not stated
anymore in the CBA since the union dropped
such proposals relying to the undertakings made
by the officials of the company
 As expected, the union requested the implementation
of said wage orders. However, they demanded that the
increase be on an across-the-board basis.
 Private respondent refused to accede to that demand.
Instead, it implemented a scheme of increases
purportedly to avoid wage distortion, thus the issue of
this case
Issues:
(1) whether or not private respondent committed an
unfair labor practice in its refusal to grant across-the-
board wage increases in implementing Wage Orders
Nos. 01 and 02, which was stated in the minutes of
the meeting on their discussions on February 27,
1990?\
(2) whether or not an employer committed an unfair labor
practice by bargaining in bad faith and discriminating
against its employees?
(3) whether or not there was a significant wage distortion
of the wage structure in private respondent as a result
of the manner by which said wage orders were
implemented?
Held:
1 No. Since the across-the-board wage increase is not
part of the CBA
a. The petitioner’s main point that the Minutes of
the collective bargaining negotiation meeting
forms part of the entire agreement is pointless, it
3
 could only be demandable in law if incorporated 3 Since it is a question of fact, the NLRC has the
in the CBA, but in this case it was not. jurisdiction. As such, the factual findings of the
NLRC are generally accorded not only respect but
b. The Minutes only reflects the proceedings and
also finality provided that its decisions are supported
discussions undertaken in the process of
by substantial evidence and devoid of any taint of
bargaining for worker benefits in the same way
unfairness or arbitrariness.
that the minutes of court proceedings show what
transpired therein. a. the NLRC Decision in this case which was
penned by the dissenter in that case, Presiding
c. If indeed private respondent promised to
Commissioner Edna Bonto-Perez, unanimously
continue with the practice of granting across-the-
ruled that no wage distortions marred private
board salary increases ordered by the
respondents implementation of the wage orders.
government, such promise could only be
demandable in law if incorporated in the CBA. i. On the issue of wage distortion, there was a
meaningful implementation of Wage Orders
d. Moreover, petitioner union had the right and the
Nos. 01 and 02. This debunks the claim that
opportunity to insist on
there was wage distortion as could be shown by
the foreseeable fulfillment of the private
the itemized wages implementation quoted
respondent's promise by demanding its
above. It should be noted that the itemization
incorporation in the CBA but they did not.
has not been successfully traversed by the
i. Because the proposal was never appellants
embodied in the CBA, the promise has
ii. the petitioners contention on the issue of wage
remained just that, a promise, the
distortion and the resulting allegation of
implementation of which cannot be
discrimination against the private respondents
validly demanded under the law.
employees are anchored on its dubious position
2 No. With the execution of the CBA, bad faith that private respondents promise to grant an
bargaining can no longer be imputed upon any of the across-the-board increase in government-
parties thereto. All provisions in the CBA are mandated salary benefits reflected in the
supposed to have been jointly and voluntarily Minutes of the negotiation is an enforceable
incorporated therein by the parties. This is not a case part of the CBA.
where private respondent exhibited an indifferent
Disposition: The Supreme Court denied the petition and
attitude towards collective bargaining because the
affirmed the decision of the NLRC
negotiations were not the unilateral activity of
petitioner union. The CBA is proof enough that
private respondent exerted "reasonable effort at good
faith bargaining." SUNDOWNER DEVT CORP VS DRILON
FACTS: Hotel Mabuhay leased the premises belonging
a. Moreover, private respondent may not be
to Syjuco. However, due to non-payment of rentals, a case
considered in bad faith since As earlier said,
for ejectment was filed and Hotel Mabuhay offered to
petitioner union had, under the law, the right and
amicably settle by surrendering the premises and to sell
the opportunity to insist on
its assets and property to any interested party, to which
the foreseeable fulfillment of the private
Syjuco acceded.
respondent's promise by demanding its
incorporation in the CBA. Because the proposal
HELD: The absorption of the employees of Hotel
was never embodied in the CBA, the promise has
Mabuhay may not be imposed on Sundowner, who has no
remained just that, a promise, the implementation
liability whatsoever to the employees of Hotel Mabuhay
of which cannot be validly demanded under the
and its responsibility if at all, is only to consider them for
law.
re-employment in the operation of the business in the
b. same premises. There can be no implied acceptance of the
employees of Hotel Mabuhay by petitioner as it is

4
expressly provided in the agreement that petitioner has no
commitment or duty to absorb them.
The rule is that unless expressly assumed. labor contracts
such as employment contracts and CBAs are not
enforceable against a transferee of an enterprise, labor
contracts being IN PERSONAM, thus, binding only
between the parties. A labor contract merely creates an
action in personam and does not create an real right which
should be respected by third parties. This conclusion
draws its force from the right of an employer to select his
employees and to decide when to engage them as
protected under our Constitution and the same can only
be restricted by law through the exercise of police power.
As a general rule, there is no law requiring a bona fide
purchaser of assets of an on-going concern to absorb in its
employ the employees of the latter. However, although
the purchaser is not legally bound to absorb in its employ
the employees of the seller, the parties are liable to the
employees if the transaction between is clothed with bad
faith.
SANYO PHILS UNION VS CANIZARES
FACTS: PSSLU had an existing CBA with Sanyo. The
CBA contained a union security clause. PSSLU wrote
Sanyo that the private respondents/employees were
notified that their membership with PSSLU were
cancelled for anti-union, activities, economic sabotage,
threats, coercion and intimidation, disloyalty and for
joining another union called KAMAO. In accordance
with the security clause of the CBA, Sanyo dismissed the
employees. The dismissed employees filed a complaint
with the NLRC for illegal dismissal. Named respondent
were PSSLU and Sanyo. PSSLU filed a motion to dismiss
the complaint alleging that the Labor Arbiter was without
jurisdiction over the case, relying on Article 217 (c) of the
Labor Code which provides that cases arising from the
interpretation or implementation of the CBA shall be
disposed of by the labor arbiter by referring the same to
the grievance machinery and voluntary arbitration.
Nevertheless, the Labor Arbiter assumed jurisdiction.
Public respondent through the Sol Gen, argued that the
case at bar does not involve an "interpretation or
implementation" of a collective bargaining agreement or
"interpretation or enforcement" of company policies but
involves a "termination." Where the dispute is just in the
interpretation, implementation or enforcement stage, it
may be referred to the grievance machinery set up in the
CBA or by voluntary arbitration. Where there was already
actual termination, i.e., violation of rights, it is already
cognizable by the Labor Arbiter.
ISSUE: Whether or not the Labor Arbiter has jurisdiction
over the case.
HELD: We hold that the Labor Arbiter and not the
Grievance Machinery provided for in the CBA has the
jurisdiction to hear and decide the case. While it appears
that the dismissal of the private respondents was made
upon the recommendation of PSSLU pursuant to the
union security clause provided in the CBA, We are of the
opinion that these facts do not come within the phrase
"grievances arising from the interpretation or
implementation of (their) Collective Bargaining
Agreement and those arising from the interpretation or
enforcement of company personnel policies," the
jurisdiction of which pertains to the Grievance Machinery
or thereafter, to a voluntary arbitrator or panel of
voluntary arbitrators. No grievance between them exists
which could be brought to a grievance machinery. The
problem or dispute in the present case is between the
union and the company on the one hand and some union
and non-union members who were dismissed, on the other
hand. The dispute has to be settled before an impartial
body. The grievance machinery with members designated
by the union and the company cannot be expected to be
impartial against the dismissed employees. Due process
demands that the dismissed workers grievances be
ventilated before an impartial body. Since there has
already been an actual termination, the matter falls within
the jurisdiction of the Labor Arbiter.
MANEJA VS NLRC
Facts: Maneja worked for Manila Midtown Hotel as a
telephone operator. She was also a member of the Union
(NUWHRAIN) with a CBA. A fellow telephone operator
named Lelong received a Request for Long Distance Call
(RLDC) and a deposit from a guest named Hiota Ieda. The
call was unanswered and the P500 deposit was forwarded
to the cashier. Ieda made a second call and second P500
deposit but the call was also unanswered. Loleng passed
on the RLDC to Maneja for follow up. Maneja monitored
the call. A hotel cashier after inquired about the P1000
deposit made by Ieda. After a search, Loleng found the
first deposit in the guest folio and the second in the folder
for cancelled calls.
5
Finding that the second call was stamped with the wrong
date, Maneja changed it from Feb. 15 to Feb 13, 1990.
Loleng then delivered the RLDC and money to the
cashier. The chief telephone operator issued a
memorandum directing Maneja and Loleng to explain the
incident and recommended they be subject to disciplinary
action for forging falsifying official documents and
culpable carelessness for failure to follow specific
instruction or established procedure. Maneja was served
with a notice of dismissal, and wrote instead “under
protest”.
Petitioner filed for illegal dismissal before the labor
arbiter, who held that petitioner was illegally dismissed,
however he held that the complaint was on its face within
the juridical ambit of the grievance procedure under the
CBA and if unresolved one for proper voluntary
arbitration.
The Hotel appealed on the ground of lack of jurisdiction
as the case should have been filed with the proper
grievance procedure or voluntary arbitration. The NLRC
affirmed the decision.
Petitioner’s MR was denied, hence this petition for
certiorari arise.
Issues: 1. WON the LA had jurisdiction over the illegal
dismissal case.
2. Was there illegal dismissal?
Held: 1. Termination cases fall under the original and
exclusive jurisdiction of the Labor Arbiter as
contemplated in LC 217, but it should be read in
conjunction with LC 261 which grants to voluntary
arbitrators original and exclusive jurisdiction to hear and
decide all unresolved grievances arising from the
interpretation of CBA or of enforcement of personnel
policies. In the Sanyo case, the Sol. Gen. argued that a
distinction should be made between interpreting the CBA
and enforcing personnel policies and a termination case.
Dismissal does not involve CBA or personnel policy.
Where the dispute is just in interpretation, they could
resort to the grievance mechanism, but when there was
actual termination, it was already cognizable by the Labor
Arbiter. In this case, there has been an actual termination.
The LA does have jurisdiction under LC 217, otherwise
an employee who was on AWOL or committed offenses
would no longer be able to file illegal dismissal cases
because the discharge would be premised on the
interpretation enforcement of company policies. The
Hotel also voluntarily submitted to the jurisdiction of the
tribunal.
2. Yes. Given the factual circumstances there was no
dishonesty. The money was all eventually found and the
date was a correction, not falsification. There was also no
hearing, merely a request for written explanation.
SIME DARBY VS MAGSALIN
Facts: On 13 June 1989, petitioner Sime Darby and
private respondent Sime Darby Employees Association
(SDEA) executed a Collective Bargaining Agreement
(CBA) providing, among others, that:
Article X, Section 1. A performance bonus shall be
granted, the amount of which [is] to be determined by the
Company depending on the return of [sic] capital
investment as reflected in the annual financial statement.
On 27 July 1989, private respondent SDEA filed with the
National Conciliation and Mediation Board (NCMB) an
urgent request for preventive conciliation between private
respondent and petitioner, for the reason that petitioner
failed to grant the performance bonus corresponding to
the fiscal year 1988-1989, on the ground that the workers'
performance during said period did not justify the award
of such bonus.
On 1 August 1989, the parties were called to a conciliation
meeting and in such meeting, both parties agreed to
submit their dispute to voluntary arbitration.
On 17 August 1989, the Voluntary Arbitrator issued an
award which declared respondent union entitled to a
performance bonus equivalent to 75% of the monthly
basic pay of its members.
Issues:
(1.) whether or not the Voluntary Arbitrator acted
with grave abuse of discretion or without or in
excess of jurisdiction in passing upon both the
question of whether or not a performance bonus
is to be granted by petitioner Sime Darby to the
private respondents and the further question of
the amount thereof.
(2.) whether or not the award by the Arbitrator of a
performance bonus amounting to seventy five
percent (75%) of the basic monthly salary of
members of private respondent union itself
6
 constituted a grave abuse of discretion or an act
without or in excess of jurisdiction.
Held:
I. It is thus essential to stress that the Voluntary Arbitrator
had plenary jurisdiction and authority to interpret the
agreement to arbitrate and to determine the scope of his
own authority subject only, in a proper case, to the
certiorari jurisdiction of this Court. The Arbitrator, as
already indicated, viewed his authority as embracing not
merely the determination of the abstract question of
whether or not a performance bonus was to be granted but
also, in the affirmative case, the amount thereof. Without
doubt, the Sime Darby Employees Association is entitled
to performance bonus. This conclusion arises from an
analysis of the imperative terms of the CBA provision on
production bonus.
II. The award by the Arbitrator of a performance bonus
amounting to seventy five percent (75%) of the basic
monthly salary of members of private respondent union
itself does not constitute a grave abuse of discretion or an
act without or in excess of jurisdiction. The award of a
Voluntary Arbitrator is final and executory after ten (10)
calendar days from receipt of the award by the parties.
The Labor Code and its Implementing Rules thus clearly
reflect the important public policy of encouraging
recourse to voluntary arbitration and of shortening the
arbitration process by rendering the arbitral award non-
appealable to the NLRC.
The CBA provision refers to the return on investment of
the company (ROI). Among those factors would be the
cost of production, the quality of the products, the cost of
money, the debt-equity ratio, the cost of sales, the level of
taxes due and payable, the gross revenues realized, and so
forth. The Voluntary Arbitrator explicitly considered the
net earnings of petitioner Sime Darby in 1988 (P
100,000,000.00) and in the first semester of 1989 (P
95,377,507.00) as well as the increase in the company's
retained earnings from P 265,729,826.00 in 1988 to P 324,
370,372.00 as of 30 June 1989. Thus, the Arbitrator
impliedly or indirectly took into account the return on
stockholders' investment realized for the fiscal year 1988-
1989. It should also be noted that the relevant CBA
provision does not specify a minimum rate of return on
investment (ROI) which must be realized before any
particular amount of bonus may or should be declared by
the company. The Voluntary Arbitrator also took into
account, again in an indirect manner, the performance of
Sime Darby's employees by referring in his award to "the
total labor cost incurred by the Company".
COCA COLA BOTTLERS PHILS ETC VS COCA
COLA (JULY 28, 2005)
FACTS In January 1989, the Coca-Cola Bottlers
Philippines, Inc. Sales Force Union-PTGWO (UNION)
filed a Notice of Strike with the National Conciliation and
Mediation Board raising certain issues for conciliation.
As a result of said dispute, the UNION staged a strike.
Subsequently, the Board succeeded in making the parties
agree to a voluntary settlement of the case via a
Memorandum of Agreement signed by them on February
9, 1989. Among others, the petitioner and the respondent
agreed, as follows:
1. Christmas Bonus
The Company shall grant to all those covered by the
Bargaining Unit represented by the Union an amount
equivalent to fifty (50%) percent of their average
commission for the last six (6) months.
The union hereby acknowledges that the granting of a
Christmas bonus is purely a Management prerogative and
as such, in determining the amount thereof the same is
solely a discretion of Management. The parties however
agree that henceforth whenever Management exercises
this prerogative, the same shall include the average
commission for the last six (6) months prior to the grant.
Since then, the management granted to each covered
employee every December of the year a certain
percentage of his basic pay and an amount equivalent to
fifty (50%) percent of his average commission for the last
six months prior to the grant. However, in December
1999, the respondent granted a fixed amount of P4,000.00
only, eliminating thereby the said 50% employee’s
average commission for the last six months for members
of the union. Thus, claiming the same as violation of the
MOA, the union submitted its grievance to the
respondent. No settlement was reached, hence, the case
was then referred to a Panel of Voluntary Arbitrators.
The Union asseverates that the grant of the additional 50%
of the average commission has become a practice since
1989 and has ripened into a contractual obligation. On the
other hand, the respondent company countered that in
1999 it suffered its worst financial performance in its
history; that its sales volume was twenty percent (20%)
7
behind plan and ten percent (10%) below the sales in
1998, as a result, it suffered an abnormal loss of Two
Billion Five Hundred Million Pesos (P2,500,000,000.00);
that faced with tremendous losses, the management
decided not to grant bonuses to its employees in 1999; that
through Memorandum 99010 dated December 14, 1999,
its President, Mr. Peter Baker explained to the employees
the company’s financial situation and the decision not to
grant bonuses; that in the same memo however, the
company granted a special ex gratia payment of Four
Thousand Pesos (P4,000.00) to all its permanent
employees.
After hearing and the submission of evidence and position
papers, the Arbitration Panel composed of Apron
Mangabat and Noel Sanchez, as chairman and member,
respectively, denied petitioner’s claim and declared that
the P4,000.00 given as ex gratia is not a bonus, while
Arnel Dolendo, another member dissented.
A copy of this Decision dated 21 January 2001 was
received by petitioner’s counsel on 20 February 2001. It
was only signed by the Chairman of the Panel, Mr. Apron
Mangabat, and one of its members, Atty. Noel Sanchez
and not by Atty. Arnel Dolendo. Petitioners claim that
because “the Panel’s decision without such dissenting and
separate opinion attached thereto makes the decision
incomplete and prematurely issued.”
On 12 March 2001, petitioner filed a motion for
reconsideration of the 21 January 2001 Decision.On 30
May 2001, the Panel denied petitioner’s motion for
reconsideration. A copy of the Order of denial was
received by petitioner on 09 July 2001. By virtue thereof,
petitioner filed a Petition for Review before the Court of
Appeals on 24 July 2001.
The Court of Appeals ruled that the the P4,000.00 “special
ex gratia” payment is a Christmas bonus, hence,
petitioner’s members are entitled to the additional 50%
average commission but dismissed the petition on the
ground that petitioner’s motion for reconsideration dated
12 March 2001 of the Decision of the Panel that was
originally received on 20 February 2001 was filed out of
time; hence, the said Decision already became final and
executory after ten (10) calendar days from receipt of the
copy of the Decision by the parties pursuant to Article
262-A of the Labor Code.
ISSUE Whether or not the Court of Appeals committed a
reversible error when it dismissed the petition on mere
technicality contrary to settled jurisprudence, after
favorably ruling on the merits in favor of petitioner.
HELD The resolution of the present controversy hinges
for the most part on the correct disposition of petitioner’s
argument that the Panel’s Decision sans the dissenting
opinion of one of its members was irregularly issued;
hence, did not toll the running of the prescriptive period
within which to file a motion for reconsideration. To
sustain petitioner’s argument would mean that the subject
Decision could still be reviewed by the Court of Appeals.
A contrary resolution would stamp the subject decision
with finality rendering it impervious to review pursuant to
the doctrine of finality of judgments.
Rule VII, Section 1 of the “Procedural Guidelines in the
Conduct of Voluntary Arbitration Proceedings” provides
the key. Therein, what constitutes the voluntary
arbitrator’s decision is defined with precision, to wit:
Section 1. Decision Award. -- The final arbitral
disposition of issue/s submitted to voluntary arbitration is
the Decision. The disposition may take the form of a
dismissal of a claim or grant of specific remedy, either by
way of prohibition of particular acts or specific
performance of particular acts. In the latter case the
decision is called an Award.
In herein case, the Decision of the Panel was in the form
of a dismissal of petitioner’s complaint. Naturally, this
dismissal was contained in the main decision and not in
the dissenting opinion. Thus, under Section 6, Rule VII of
the same guidelines implementing Article 262-A of the
Labor Code, this Decision, as a matter of course, would
become final and executory after ten (10) calendar days
from receipt of copies of the decision by the parties even
without receipt of the dissenting opinion unless, in the
meantime, a motion for reconsideration or a petition for
review to the Court of Appeals under Rule 43 of the Rules
of Court is filed within the same 10-day period. As
correctly pointed out by the Court of Appeals, a dissenting
opinion is not binding on the parties as it is a mere
expression of the individual view of the dissenting
member from the conclusion held by the majority of the
Court, following our ruling in Garcia v. Perez as reiterated
in National Union of Workers in Hotels, Restaurants and
Allied Industries v. NLRC.
Prescinding from the foregoing, the Court of Appeals
correctly dismissed the petition before it as it no longer
had any appellate jurisdiction to alter or nullify the
8
decision of the Panel. The Panel’s Decision had become
final and executory, hence, unchallengeable.
ALCATEL VS RELOS
FACTS: Complainant Rene R. Relos field a complaint
for illegal dismissal with monetary claims against
defendant Alcatel Philippines. Previously, complainant
was repeatedly rehired in various capacities
(estimator/draftsman, civil works inspector, civil
engineer, etc.) for several projects of defendant from
January 1988 to December 1993 (with different periods,
from 1 to 11 months). On 31 December 1995,
complainant’s last contract terminated. In March 1997, he
instituted the labor case claiming that he was illegally
dismissed as he was a regular employee.
“Alcatel argues that respondent was a project employee
because he worked on distinct projects with the terms of
engagement and the specific project made known to him
at the time of the engagement. Alcatel clarifies that
[complainant’s] employment was coterminous with the
project for which he was hired and, therefore,
[complainant] was not illegally dismissed but was validly
dismissed upon the expiration of the term of his project
employment. Alcatel explains that its business relies
mainly on the projects it enters into and thus, it is
constrained to hire project employees to meet the
demands of specific projects.
“On the other hand, [complainant] insists that he is a
regular employee because he was assigned by Alcatel on
its various projects since 4 January 1988 performing
functions desirable or necessary to Alcatel’s business.
[Complainant] adds that his employment contracts were
renewed successively by Alcatel for seven
years. [Complainant] contends that, even assuming that
he was a project employee, he became a regular employee
because he was re-hired every termination of his
employment contract and he performed functions
necessary to Alcatel’s business. [Complainant] also
claims that he was illegally dismissed because he was
dismissed during the existence of the project.”
HELD: Defendant was not liable; complainant was a
project employee.“The principal test for determining
whether a particular employee is a project employee or a
regular employee is whether the project employee was
assigned to carry out a specific project or undertaking, the
duration and scope of which were specified at the time the
employee is engaged for the project. ‘Project’ may refer
to a particular job or undertaking that is within the regular
or usual business of the employer, but which is distinct
and separate and identifiable as such from the
undertakings of the company. Such job or undertaking
begins and ends at determined or determinable times.
The complainant was a project employee. “The specific
projects for which respondent was hired and the periods
of employment were specified in his employment
contracts. The services he rendered, the duration and
scope of each employment are clear indications that
respondent was hired as a project employee.
While complainant was continuously rehired by Alcatel
and he “performed tasks that were clearly vital, necessary
and indispensable to the usual business or trade of Alcatel,
respondent was not continuously rehired by Alcatel after
the cessation of every project. Records show that
respondent was hired by Alcatel from 1988 to 1995 for
three projects, namely the PLDT X-5 project, the PLDT
X-4 IOT project and the PLDT 1342 project. On 30 April
1988, upon the expiration of respondent’s contract for the
PLDT X-4 IOT project, Alcatel did not rehire respondent
until 1 February 1991, or after a lapse of 33 months, for
the PLDT 1342 project. Alcatel’s continuous rehiring of
respondent in various capacities from February 1991 to
December 1995 was done entirely within the framework
of one and the same project ― the PLDT 1342
project. This did not make [complainant] a regular
employee of Alcatel as respondent was not continuously
rehired after the cessation of a project. [Complainant]
remained a project employee of Alcatel working on the
PLDT 1342 project.
“The employment of a project employee ends on the
date specified in the employment contract. Therefore,
respondent was not illegally dismissed but his
employment terminated upon the expiration of his
employment contract…” (Emphasis supplied.)
Best Legal Practices: Stipulate clearly the paramaters for
project or fixed-period employment – In order to avoid
doubts on the status of an employee, the employment
contract should clearly stipulate the terms and conditions
for the project employment. In particular, the project
should be clearly specified.
Refrain from continuous rehiring of the same project
employee – While project employment is valid, a
continuous rehiring of the same project employee who
performs work that is vital, necessary and indispensable
to the usual business or trade of the employer, may result
9
in the latter becoming a regular employee by operation of
law.
BRENT VS ZAMORA
FACTS: Private respondent Doroteo R. Alegre was
engaged as athletic director by petitioner Brent School,
Inc. at a yearly compensation of P20,000.00. The contract
fixed a specific term for its existence, five (5) years, i.e.,
from July 18, 1971, the date of execution of the
agreement, to July 17, 1976. Subsequent subsidiary
agreements dated March 15, 1973, August 28, 1973, and
September 14, 1974 reiterated the same terms and
conditions, including the expiry date, as those contained
in the original contract of July 18, 1971.
On April 20,1976, Alegre was given a copy of the report
filed by Brent School with the Department of Labor
advising of the termination of his services effective on
July 16, 1976. The stated ground for the termination was
"completion of contract, expiration of the definite period
of employment." Although protesting the announced
termination stating that his services were necessary and
desirable in the usual business of his employer, and his
employment lasted for 5 years - therefore he had acquired
the status of regular employee - Alegre accepted the
amount of P3,177.71, and signed a receipt therefor
containing the phrase, "in full payment of services for the
period May 16, to July 17, 1976 as full payment of
contract."
The Regional Director considered Brent School's report
as an application for clearance to terminate employment
(not a report of termination), and accepting the
recommendation of the Labor Conciliator, refused to give
such clearance and instead required the reinstatement of
Alegre, as a "permanent employee," to his former position
without loss of seniority rights and with full back wages.
ISSUE: Whether or not the provisions of the Labor Code,
as amended, have anathematized "fixed period
employment" or employment for a term.
RULING: Respondent Alegre's contract of employment
with Brent School having lawfully terminated with and by
reason of the expiration of the agreed term of period
thereof, he is declared not entitled to reinstatement.
The employment contract between Brent School and
Alegre was executed on July 18, 1971, at a time when the
Labor Code of the Philippines (P.D. 442) had not yet been
promulgated. At that time, the validity of term
employment was impliedly recognized by the
Termination Pay Law, R.A. 1052, as amended by R.A.
1787. Prior, thereto, it was the Code of Commerce
(Article 302) which governed employment without a
fixed period, and also implicitly acknowledged the
propriety of employment with a fixed period. The Civil
Code of the Philippines, which was approved on June 18,
1949 and became effective on August 30,1950, itself
deals with obligations with a period. No prohibition
against term-or fixed-period employment is contained in
any of its articles or is otherwise deducible therefrom.
It is plain then that when the employment contract was
signed between Brent School and Alegre, it was perfectly
legitimate for them to include in it a stipulation fixing the
duration thereof Stipulations for a term were explicitly
recognized as valid by this Court.
The status of legitimacy continued to be enjoyed by fixed-
period employment contracts under the Labor Code (PD
442), which went into effect on November 1, 1974. The
Code contained explicit references to fixed period
employment, or employment with a fixed or definite
period. Nevertheless, obscuration of the principle of
licitness of term employment began to take place at about
this time.
Article 320 originally stated that the "termination of
employment of probationary employees and those
employed WITH A FIXED PERIOD shall be subject to
such regulations as the Secretary of Labor may prescribe."
Article 321 prescribed the just causes for which an
employer could terminate "an employment without a
definite period." And Article 319 undertook to define
"employment without a fixed period" in the following
manner: …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.
Subsequently, the foregoing articles regarding
employment with "a definite period" and "regular"
employment were amended by Presidential Decree No.
850, effective December 16, 1975.
10
Article 320, dealing with "Probationary and fixed period
employment," was altered by eliminating the reference to
persons "employed with a fixed period," and was
renumbered (becoming Article 271).
As it is evident that Article 280 of the Labor Code, under
a narrow and literal interpretation, not only fails to
exhaust the gamut of employment contracts to which the
lack of a fixed period would be an anomaly, but would
also appear to restrict, without reasonable distinctions, the
right of an employee to freely stipulate with his employer
the duration of his engagement, it logically follows that
such a literal interpretation should be eschewed or
avoided. The law must be given a reasonable
interpretation, to preclude absurdity in its application.
Outlawing the whole concept of term employment and
subverting to boot the principle of freedom of contract to
remedy the evil of employer's using it as a means to
prevent their employees from obtaining security of tenure
is like cutting off the nose to spite the face or, more
relevantly, curing a headache by lopping off the head.
Such interpretation puts the seal on Bibiso upon the effect
of the expiry of an agreed period of employment as still
good rule—a rule reaffirmed in the recent case of
Escudero vs. Office of the President (G.R. No. 57822,
April 26, 1989) where, in the fairly analogous case of a
teacher being served by her school a notice of termination
following the expiration of the last of three successive
fixed-term employment contracts, the Court held:
Reyes (the teacher's) argument is not persuasive. It loses
sight of the fact that her employment was probationary,
contractual in nature, and one with a definitive period. At
the expiration of the period stipulated in the contract, her
appointment was deemed terminated and the letter
informing her of the non-renewal of her contract is not a
condition sine qua non before Reyes may be deemed to
have ceased in the employ of petitioner UST. The notice
is a mere reminder that Reyes' contract of employment
was due to expire and that the contract would no longer
be renewed. It is not a letter of termination.
Paraphrasing Escudero, respondent Alegre's employment
was terminated upon the expiration of his last contract
with Brent School on July 16, 1976 without the necessity
of any notice. The advance written advice given the
Department of Labor with copy to said petitioner was a
mere reminder of the impending expiration of his
contract, not a letter of termination, nor an application for
clearance to terminate which needed the approval of the
Department of Labor to make the termination of his
services effective. In any case, such clearance should
properly have been given, not denied.
PUREFOODS CORP VS NLRC (DEC 12, 1997)
FACTS: The private respondents were hired by
petitioner Pure Foods to work for a fixed period of five
months at its tuna cannery plant in General Santos City.
After the expiration of their respective contracts of
employment, their services were terminated. They
forthwith executed a "Release and Quitclaim" stating that
they had no claim whatsoever against the petitioner.
Private respondents then filed before the NLRC-Sub-
RAB a complaint for illegal dismissal against the
petitioner.
The Labor Arbiter dismissed the complaint on the ground
that the private respondents were mere contractual
workers, and not regular employees; hence, they could not
avail of the law on security of tenure. The termination of
their services by reason of the expiration of their contracts
of employment was, therefore, justified.
The private respondents appealed the decision to the
NLRC which affirmed the LA’s decision. However, on
private respondents' motion for reconsideration, the
NLRC rendered another decision holding that the private
respondent and their co-complainants were regular
employees. It declared that the contract of employment
for five months was a "clandestine scheme employed by
the petitioner to stifle private respondents' right to security
of tenure" and should therefore be struck down and
disregarded for being contrary to law, public policy, and
morals. Hence, their dismissal on account of the
expiration of their respective contracts was illegal. Its
motion for reconsideration having been denied, the
petitioner came to this Court contending that respondent
NLRC committed grave abuse of discretion amounting to
lack of jurisdiction in reversing the decision of the Labor
Arbiter.
ISSUE: Whether or not private respondents are regular
employees of petitioner company or mere contractual
employees.
HELD: The SC held that the petition devoid of merit.
Under Art. 280, there are two kinds of regular employees
are (1) those who are 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
11
or broken, with respect to the activity in which they are
employed.
In the instant case, the private respondents' activities
consisted in the receiving, skinning, loining, packing, and
casing-up of tuna fish which were then exported by the
petitioner. Indisputably, they were performing activities
which were necessary and desirable in petitioner's
business or trade. Contrary to petitioner's submission, the
private respondents could not be regarded as having been
hired for a specific project or undertaking. The term
"specific project or undertaking" under Article 280 of the
Labor Code contemplates an activity which is not
commonly or habitually performed or such type of work
which is not done on a daily basis but only for a specific
duration of time or until completion; the services
employed are then necessary and desirable in the
employer's usual business only for the period of time it
takes to complete the project. The fact that the petitioner
repeatedly and continuously hired workers to do the same
kind of work as that performed by those whose contracts
had expired negates petitioner's contention that those
workers were hired for a specific project or undertaking
only.
Although, this Court has upheld the legality of fixed-term
employment, none of the criteria had been met in the
present case. It could not be supposed that private
respondents and all other so-called "casual" workers of
the petitioner KNOWINGLY and VOLUNTARILY
agreed to the 5-month employment contract. Cannery
workers are never on equal terms with their employers.
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 does not deny or rebut private respondents'
averments (1) that the main bulk of its workforce
consisted of its so-called "casual" employees; (2) that as
of July 1991, "casual" workers numbered 1,835; and
regular employee, 263; (3) that the company hired
"casual" every month for the duration of five months,
after which their services were terminated and they were
replaced by other "casual" employees on the same five-
month duration; and (4) that these "casual" employees
were actually doing work that were necessary and
desirable in petitioner's usual business. This scheme of the
petitioner was apparently designed to prevent the private
respondents and the other "casual" employees from
attaining the status of a regular employee. It was a clear
circumvention of the employees' right to security of
tenure and to other benefits like minimum wage, cost-of-
living allowance, sick leave, holiday pay, and 13th month
pay. Indeed, the petitioner succeeded in evading the
application of labor laws. Also, it saved itself from the
trouble or burden of establishing a just cause for
terminating employees by the simple expedient of
refusing to renew the employment contracts.
The five-month period specified in private respondents'
employment contracts 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 between the petitioner and the
private respondents 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 employees' security of tenure in their jobs.
BUISER ET AL VS HON VICENTE LEOGARDO
JR AND GENERAL TELEPHONE DIRECTORY
FACTS: Petitioners Iluminada Buiser, Ma. Cecilia
Rilloacuña, and Ma. Mercedes Intengan all entered into
an eighteen-month probationary employment contract
with private respondent General Telephone Directory
Company (GTPD), as sales representatives charged with
soliciting advertisements to include in the telephone
directories. All petitioners were terminated after the
provisionary period (May 1981), on the ground of failing
to meet their sales quotas that were set by respondent
company. In response to their termination, petitioners
filed before the NCR Ministry of Labor of and
Employment a complaint for illegal dismissal with claims
for backwages. However, the petition was denied in a
decision by the Regional Director and the same was
affirmed by herein respondent Deputy Minister of Labor
Vicente Leogardo, ruling that (a) they have not attained
regular status; (b) the stipulated probationary period was
valid; and (c), that the termination was valid because they
have not reached their required sales quotas set by the
GTPD.
12
Petitioners filed before the Supreme Court a petition for
certiorari, contending that respondent Deputy Minister
Leogardo committed grave abuse of discretion in
rendering the decision in favor of the private respondent
and that as provided for by the Labor Code, probationary
period cannot exceed 6 months, therefore the
probationary period of GTPD was illegal.
ISSUE: Whether or not the stipulated eighteen month
probationary period is violative of the Labor Code.
HELD: The Supreme Court rejects the petitioner’s
contentions. While the Labor Code, specifically Article
282, provides that probationary periods cannot exceed 6
months, it still allows the both employer and employee to
stipulate the terms of the employment, provided that they
can come into agreement. Given that both petitioner and
private respondent came into agreement (by signing and
agreeing) that the 18 month probationary period is the law
between them, petitioners cannot impugn this by invoking
the provision of the Labor Code in their favor.
Additionally, the grounds for their dismissal were just,
because it was proven in the records that they did in fact
failed to meet their sales quotas set by private respondent
GTPD in the employment contract. Hence, petition is
dismissed for lack of merit.
ABBOT VS ALCARAZ
FACTS:
 On June 27, 2004, Abbott Laboratories, Philippines
published in major broadsheet that it is in need of
Medical and Regulatory Affairs Manager stating
therein the responsibilities and qualifications of said
position.
 On December 7, 2004, Abbott formally offered
Alcaraz the abovementioned position which was an
item under the company’s Hospira Affiliate Local
Surveillance Unit (ALSU) department.
 On February 12, 2005, Alcaraz signed an
employment contract which stated, inter alia, that she
was to be placed on probation for a period of six (6)
months beginning February 15, 2005 to August 14,
2005.
 She underwent pre-employment orientation where
she was briefed on her duties and responsibilities.
 On March 3, 2005, Alcaraz received an e-mail from
the HR Director explaining the procedure for
evaluating the performance of probationary
employees and further indicated that Abbott had only
one evaluation system for all of its employees.
Alcaraz was also given copies of Abbott’s Code of
Conduct and Probationary Performance Standards
and Evaluation and Performance Excellence
Orientation Modules which she had to apply in line
with her task of evaluating the Hospira ALSU staff.
 On April 12, 2005, Alcaraz received an e-mail from
Misa requesting immediate action on the staff’s
performance evaluation as their probationary periods
were about to end. This Alcaraz eventually submitted.
 On May 16, 2005, Alcaraz was called to a meeting
with her immediate supervisor and the former HR
Director where she was informed that she failed to
meet the regularization standards for the position of
Regulatory Affairs Manager. Thereafter she was
asked to tender her resignation, else they be forced to
terminate her services.
 She filed a case of illegal dismissal against Abott and
its officers.
 Labor Arbiter dismissed her complaint for lack of
merit.
 NLRC reversed and set aside the LA’s ruling and
ordered Abott to reinstate and pay Alcaraz moral and
exemplary damages.
 CA affirmed NLRC decision.
ISSUE(S):
(1) Whether or not Alcaraz was sufficiently informed
of the reasonable standards to qualify her as a
regular employee; and
(2) Whether or not Alcaraz was validly terminated
from her employment.
HELD:
(1) Yes, Alcaraz was sufficiently informed of the
reasonable standards. The employer is made to
comply with two (2) requirements when dealing
with a probationary employee: first, the employer
must communicate the regularization standards to
the probationary employee; and second, the
employer must make such communication at the
time of the probationary employee’s engagement.
13
 If the employer fails to comply with either, the
employee is deemed as a regular and not a
probationary employee.
A punctilious (detailed) examination of the records
reveals that Abbott had indeed complied with the above-
stated requirements. This conclusion is largely impelled
by the fact that Abbott clearly conveyed to Alcaraz her
duties and responsibilities as Regulatory Affairs Manager
prior to, during the time of her engagement, and the
incipient stages of her employment.
(2) A probationary employee, like a regular
employee, enjoys security of tenure. However, in
cases of probationary employment, aside from
just or authorized causes of termination, an
additional ground is provided under Article 295
of the Labor Code, i.e., the probationary
employee may also be terminated for failure to
qualify as a regular employee in accordance with
the reasonable standards made known by the
employer to the employee at the time of the
engagement.
A different procedure is applied when terminating a
probationary employee; the usual two-notice rule does not
govern. Section 2, Rule I, Book VI of the Implementing
Rules of the Labor Code states that "if the termination is
brought about by the failure of an employee to meet the
standards of the employer in case of probationary
employment, it shall be sufficient that a written notice is
served the employee, within a reasonable time from the
effective date of termination."
As the records show, Alcaraz's dismissal was effected
through a letter dated May 19, 2005 which she received
on May 23, 2005 and again on May 27, 2005. Stated
therein were the reasons for her termination, i.e., that after
proper evaluation, Abbott determined that she failed to
meet the reasonable standards for her regularization
considering her lack of time and people management and
decision-making skills, which are necessary in the
performance of her functions as Regulatory Affairs
Manager. Undeniably, this written notice sufficiently
meets the criteria set forth above, thereby legitimizing the
cause and manner of Alcaraz’s dismissal as a
probationary employee under the parameters set by the
Labor Code.
MARAGUINOT VS NLRC
Facts: Maraguinot and Enero were separately hired by
Vic Del Rosario under Viva Films as part of the filming
crew. Sometime in May 1992, sought the assistance of
their supervisor to facilitate their request that their salary
be adjusted in accordance with the minimum wage law.
On June 1992, Mrs. Cesario, their supervisor, told them
that Mr. Vic Del Rosario would agree to their request only
if they sign a blank employment contract. Petitioners
refused to sign such document. After which, the Mr.
Enero was forced to go on leave on the same month and
refused to take him back when he reported for work. Mr.
Maraguinot on the other hand was dropped from the
payroll but was returned days after. He was again asked
to sign a blank employment contract but when he refused,
he was terminated.
Consequently, the petitioners sued for illegal dismissal
before the Labor Arbiter. The private respondents claim
the following: (a) that VIVA FILMS is the trade name of
VIVA PRODUCTIONS, INC. and that it was primarily
engaged in the distribution & exhibition of movies- but
not then making of movies; (b) That they hire contractors
called “producers” who act as independent contractors as
that of Vic Del Rosario; and (c) As such, there is no
employee-employer relation between petitioners and
private respondents.
The Labor Arbiter held that the complainants are
employees of the private respondents. That the producers
are not independent contractor but should be considered
as labor-only contractors and as such act as mere agent of
the real employer. Thus, the said employees are illegally
dismissed.
The private respondents appealed to the NLRC which
reversed the decision of the Labor Arbiter declaring that
the complainants were project employees due to the ff.
reasons: (a) Complainants were hired for specific movie
projects and their employment was co-terminus with each
movie project; (b)The work is dependent on the
availability of projects. As a result, the total working
hours logged extremely varied; (c) The extremely
irregular working days and hours of complainants work
explains the lump sum payment for their service; and (d)
The respondents alleged that the complainants are not
prohibited from working with other movie companies
whenever they are not working for the independent movie
producers engaged by the respondents.
14
A motion for reconsideration was filed by the
complainants but was denied by NLRC. In effect, they
filed an instant petition claiming that NLRC committed a
grave abuse of discretion in: (a) Finding that petitioners
were project employees; (b) Ruling that petitioners were
not illegally dismissed; and (c) Reversing the decision of
the Labor Arbiter.
In the instant case, the petitioners allege that the NLRC
acted in total disregard of evidence material or decisive of
the controversy.
Issues:
(a) W/N there exist an employee- employer relationship
between the petitioners and the private respondents.
(b) W/N the private respondents are engaged in the
business of making movies.
(c) W/N the producer is a job contractor.
Held: There exist an employee- employer relationship
between the petitioners and the private respondents
because of the ff. reasons that nowhere in the appointment
slip does it appear that it was the producer who hired the
crew members. Moreover, it was VIVA’s corporate name
appearing on heading of the slip. It can likewise be said
that it was VIVA who paid for the petitioners’ salaries.
Respondents also admit that the petitioners were part of a
work pool wherein they attained the status of regular
employees because of the ff. requisites: (a) There is a
continuous rehiring of project employees even after
cessation of a project; (b) The tasks performed by the
alleged “project employees” are vital, necessary and
indispensable to the usual business or trade of the
employer; and (c) However, the length of time which the
employees are continually re-hired is not controlling but
merely serves as a badge of regular employment.
Since the producer and the crew members are employees
of VIVA and that these employees’ works deal with the
making of movies. It can be said that VIVA is engaged of
making movies and not on the mere distribution of such.
The producer is not a job contractor because of the ff.
reasons: (Sec. Rule VII, Book III of the Omnibus Rules
Implementing the Labor Code.)
a. A contractor carries on an independent business and
undertakes the contract work on his own account under
his own responsibility according to his own manner and
method, free from the control and direction of his
employer or principal in all matters connected with the
performance of the work except as to the results thereof.
The said producer has a fix time frame and budget to make
the movies.
b. The contractor should have substantial capital and
materials necessary to conduct his business. The said
producer, Del Rosario, does not have his own tools,
equipment, machinery, work premises and other materials
to make motion pictures. Such materials were provided by
VIVA.
It can be said that the producers are labor-only
contractors. Under Article 106 of the Labor Code
(reworded) where the contractor does not have the
requisites as that of the job contractors.
SOSITO VS AGUINALDO DEVT
Facts: Petitioner Manuel Sosito filed for an indefinite
leave from the company on January 16, 1976. Months
later, the company underwent a retrenchment program but
offered separation pay to those who had been in the active
service as of June 30, 1976 and had tendered their
resignation not later than July 31, 1976. Petitioner, to
avail of the benefits, submitted his resignation. The
company denied him the benefits.
Issue: Whether or not petitioner was entitled to the
benefits?
Held: The Court held that the petitioner was not qualified
to avail of the benefits because at the time he submitted
his resignation, he was not in the active service, having
been on voluntary indefinite leave. The petitioner cannot
just do as he please to the detriment of the company.
The Court expressed that labor disputes aren’t
necessarily immediately tipped in favor of labor. The
Management also has its own rights, which must also be
afforded the same protection as that of labor. The Court
held “that justice is in every case for the deserving, to be
dispensed in the light of the established facts and the
applicable law and doctrine.”
TIU VS PLATINUM DEVT (none)
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