Labor Standards and Social Legislation Case Digests PDF

LABOR STANDARDS AND SOCIAL LEGISLATION
Aguirre, Nolaida
2011-0087
ABELLA VS NLRC
G.R. No. 71818
Date: July 20, 1987
Petitioners: Rosalina Perez Abella/Hda. Danao-Ramona
Respondents: The Honorable National Labor Relations Commission, Romeo Quitco and Ricardo
Dionele, Sr.,
Ponente: Paras, J.
FACTS:
On June 27, 1960 the petioner, Rosalina Perez Abella leased a farm land known as Hacienda
Danao-Ramona, for a period of ten (10) years. She opted to extend the leased contract for another ten
(10) years. During the existence of the lease, she employed the private respondents Ricardo Dionele, Sr.,
and Romeo Quitco. Upon the expiration of her leasehold rights, petitioner dismissed private respondents
and turned over the hacienda to the owners thereof on October 5, 1981, who continued the management,
cultivation and operation of the farm.
On November 20, 1981, private respondents filed a complaint against the petitioner at the
Ministry of Labor and Employment, Bacolod City District Office, for overtime pay, illegal dismissal and
reinstatement with backwages. After the parties had presented their respective evidence, Labor Arbiter
Manuel M. Lucas, Jr., in a Decision dated July 16, 1982, ruled that the dismissal is warranted by the
cessation of business, but granted the private respondents separation pay. Petitioner appealed, the
National Labor Relations Commission, in a Resolution affirmed the decision and dismissed the appeal for
lack of merit. Petitioner filed a Motion for Reconsideration, but the same was denied. Hence, the present
petition.
ISSUE:
 Whether or not private respondents are entitled to separation pay?
HELD:
The petition is devoid of merit. Article 284 of the Labor Code as amended by BP 130 is the law
applicable in this case. The purpose of Article 284 as amended is obvious-the protection of the workers
whose employment is terminated because of the closure of establishment and reduction of personnel.
Without said law, employees like private respondents in the case at bar will lose the benefits to which
they are entitled — for the thirty three years of service in the case of Dionele and fourteen years in the
case of Quitco. Although they were absorbed by the new management of the hacienda, in the absence of
any showing that the latter has assumed the responsibilities of the former employer, they will be
considered as new employees and the years of service behind them would amount to nothing.
It is well-settled that in the implementation and interpretation of the provisions of the Labor Code
and its implementing regulations, the workingman's welfare should be the primordial and paramount
consideration.
The instant petition is hereby dismissed and Decision of the Labor Arbiter and the resolution of the
ministry of labor and employment are hereby affirmed.
ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 1

Aguirre, Nolaida
2011-0087
CALALANG VS WILLIAMS (Social Justice as the aim of Labor Laws)

G.R. No. 47800
Date: December 2, 1940
Petitioner: Maximo Calalang
Respondents: A.D. Williams, et al.,
Ponente: Laurel, J.
FACTS:
Maximo Calalang, private citizen and a tax payer prayed for the prohibition against the
respondents, A.D. Williams at al.,. In his petition, Calalang alleged that the National Traffic Commission,
in its resolution of July 17, 1940, resolved to recommend to the director of Public Works and to the
Secretary of Public Works and Communication that animal-drawn vehicles be prohibited form passing
along the streets of Manila for a period of one year. The said resolution was enforced by the Mayor of
Manila and the Chief of Police of Manila, that as a consequence of such enforcement, all animal-drawn
vehicles are not allowed to pass and pick up passengers to the detriment not only of their owners but of
the riding public as well.
Petitioner attacked the constitutionality of the C.A. No. 548 which authorized the Secretary of
Public Works and Communication to promulgate rules and regulations for the regulation and control of the
use and traffic on the national road and streets. The said law became the basis of the resolution of July
17, 1940 prohibiting the animal-drawn vehicles from passing to some streets of the City of Manila.
One of the contentions raised by the petitioner is that the rules and regulations complained of
infringed upon the constitutional precept regarding the promotion of Social Justice to insure the well-being
and economic security of all the people.
ISSUE:
 Whether or not the complained resolution infringes the constitutional precept of promoting Social
Justice to insure the well-being and economic security of all the people?
HELD:
The answer is in the negative, the promotion of Social Justice, is to be achieved not through a
mistaken sympathy towards any given group. Social justice is "neither communism, nor despotism, nor
atomism, nor anarchy," but the humanization of laws and the equalization of social and economic forces
by the State so that justice in its rational and objectively secular conception may at least be
approximated. Social justice means the promotion of the welfare of all the people, the adoption by the
Government of measures calculated to insure economic stability of all the competent elements of society,
through the maintenance of a proper economic and social equilibrium in the interrelations of the members
of the community, constitutionally, through the adoption of measures legally justifiable, or extra-
constitutionally, through the exercise of powers underlying the existence of all governments on the time-
honored principle of salus populi est suprema lex.
Social justice, therefore, must be founded on the recognition of the necessity of interdependence
among divers and diverse units of a society and of the protection that should be equally and evenly
extended to all groups as a combined force in our social and economic life, consistent with the
fundamental and paramount objective of the state of promoting the health, comfort, and quiet of all
persons, and of bringing about "the greatest good to the greatest number."

Aguirre, Nolaida
2011-0087
CEREZO VS THE ATLANTIC & PACIFIC COMPANY

G.R. No. L-10107
Date: February 4, 1916
Plaintiff- appellant: Clara Cerezo
Defendant-appellant: The Atlantic Gulf & Pacific Company
Ponente: Trent, J.
FACTS:
The deceased was an employee of the defendant as a day laborer on the 8th of July, 1913,
assisting in laying gas pipes on Calle Herran in the city of Manila. The digging of the trench was
completed both ways from the cross-trench in Calle Paz, and the pipes were laid therein up to that point.
The men of the deceased's gang were filling the west end, and there was no work in the progress at the
east end of the trench. Shortly after the deceased entered the trench at the east end to answer a call of
nature, the bank caved in, burying him to his neck in dirt, where he died before he could be released. It
has not been shown that the deceased had received orders from the defendant to enter the trench at this
point; nor that the trench had been prepared by the defendant as a place to be used as a water-closet;
nor that did the defendant acquiesce in the using of this place for these purposes. The trench at the place
where the accident occurred was between 3 and 4 feet deep. Nothing remained to be done there except
to refill the trench as soon as the pipes were connected. The refilling was delayed at that place until the
completion of the connection. At the time of the accident the place where the deceased's duty of refilling
the trench required him to be was at the west end. There is no contention that there was any danger
whatever in the refilling of the trench.
An action for damages was instated against the defendant for negligently causing the death of the
plaintiff's son, Jorge Ocumen, on the 7th of July, 1913
The plaintiff insists that the defendant was negligent in failing to shore or brace the trench at the
place where the accident occurred. While, on the other hand, the defendant urges (1) that it was under no
obligation, in so far as the deceased was concerned, to brace the trench, in the absence of a showing
that the soil was of a loose character or the place itself was dangerous, and (2) that although the relation
of master and servant may not have ceased, for the time being, to exist, the defendant was under no duty
to the deceased except to do him no intentional injury, and to furnish him with a reasonably safe place to
work.
udgment was entered in a favor of the plaintiff for the sum of ₱ 1,250.00, together with interest
and costs. Defendant appealed.
ISSUES:
1. Whether or not the plaintiff has a right to recover for damages under the Employer’s Liability Act
(Act No. 1874) or the Civil Code; and
2. Whether or not it is necessary to determine the effect of the former upon the law of industrial
accidents in this country?

HELD:
1. The Plaintiff cannot recover from neither laws, an overwhelming jurisprudence holds master was
bound to exercise that measure of care which reasonably prudent men take under similar
circumstances. But the master was not an insurer and was not required to provide the safest
possible plant or to adopt the latest improvements or to warrant against latent defects which a
reasonable inspection did not disclose. It was only necessary that the danger in the work be not
enhanced through his fault. It is provided further that;
the right of the master to shift responsibility for the performance of all or at least most of
these personal duties to the shoulders of a subordinate and thereby escape liability for
the injuries suffered by his workmen through his non-performance of these duties, was,
in England, definitely settled by the House of Lords in the case of Wilson vs. Merry (L.R.
1 H.L. Sc. Appl Cas., 326; 19 Eng. Rul. Cas., 132). This was just two years before the
enactment of the Employers' Liability Act of 1880, and no doubt the full significance of
such a doctrine was one of the impelling causes which expedited the passage of the
Act, and chiefly accounts for the presence in it of subsection 1 of section 1.
The cause of Ocumen's death was not the weight of the earth which fell upon him, but
was due to suffocation. He was sitting or squatting when the slide gave way. Had he been even
half-erect, it is highly probable that he would have escaped suffocation or even serious injury.
Hence, the accident was of a most unusual character. Experience and common sense
demonstrate that ordinarily no danger to employees is to be anticipated from such a trench as
that in question. The fact that the walls had maintained themselves for a week, without indication
of their giving way, strongly indicates that the necessity for bracing or shoring the trench was
remote. To require the company to guard against such an accident as the one in question would
virtually compel it to shore up every foot of the miles of trenches dug by it in the city of Manila for
the gas mains. Upon a full consideration of the evidence, we are clearly of the opinion that
ordinary care did not require the shoring of the trench walls at the place where the deceased met
his death. The event properly comes within the class of those which could not be foreseen;
and, therefore, the defendant is not liable under the Civil Code (Article 1105, Civil Code).
2. Yes. Act No. 1874 is essentially a copy of the Massachusetts Employers' Liability Act. We now
come to the consideration of Act No. 1874 for the purpose of determining what effect this Act has
had upon the law of damages in personal injury cases in this country, bearing in mind that the
Act is, as we have indicated, essentially a copy of the Massachusetts Employers' Liability Act
which has "prevailed in the State of Massachusetts some years and upon which interpretations
have been made by the Massachusetts courts, defining the exact meaning of the provision of the
law." (Special report of the joint committee of the Philippine Legislature on the Employers'
Liability Act, Commission Journal 1908, p. 296.) We agree with the Supreme Court of
Massachusetts that the Act should be liberally construed in favor of employees. The main
purpose of the Act, as its title indicates, was to extend the liability of employers and to render
them liable in damages for certain classes of personal injuries for which it was thought they were
liable under the law prior to the passage of the Act.

Aguirre, Nolaida
2011-0087
COLGATE PALMOLIVE PHILIPPINES VS OPLE

G.R. No. 73681
Date: June 30, 1988
Petitioner: Colgate Palmolive Philippines, Inc.,
Respondent: Hon. Blas F. Ople and Colgate Palmolive Sales Union
Ponente: Paras, J.
FACTS:
On March 1, 1985, the respondent Union filed a Notice of Strike with the Bureau of Labor
Relations (BLR) on ground of unfair labor practice consisting of alleged refusal to bargain, dismissal of
union officers/members; and coercing employees to retract their membership with the union and
restraining non-union members from joining the union. After efforts at amicable settlement proved
unavailing, the Office of the MOLE, upon petition of petitioner assumed jurisdiction over the dispute
pursuant to Article 264 (g) of the Labor Code.
Colgate Palmolive Philippines, Inc in its position stated that there is no legal basis for the charge
that the company refused to bargain collectively with the union considering that the alleged union is not
the certified agent of the company salesmen. The union's status as a legitimate labor organization is still
under question because on March 6, 1985, a certain Monchito Rosales informed the BLR that an
overwhelming majority of the salesmen are not in favor of the Notice of Strike allegedly filed by the Union.
While the respondent Union, on the other hand, in its position paper, reiterated the issue in its Notice to
Strike, alleging that it was duly registered with the Bureau of Labor Relations.
On August 9,1985, respondent Minister rendered a decision which found no merit in the Union's
Complaint for unfair labor practice allegedly committed by petitioner as regards the alleged refusal of
petitioner to negotiate with the Union, and the secret distribution of survey sheets allegedly intended to
discourage unionism. It also found the three salesmen, Peregrino Sayson, Salvador Reynante & Cornelio
Mejia "not without fault" and that "the company has grounds to dismiss above named salesmen"
Respondent Minister directly certified the respondent Union as the collective bargaining agent for
the sales force in petitioner company and ordered the reinstatement of the three salesmen to the
company on the ground that the employees were first offenders. Hence, the Petitoner now seeks to set
and annul the order of then Minister Blas Ople.
ISSUES:
1. Whether or not respondent Minister committed a grave abuse of discretion when he directly
certified the Union solely on the basis of the latter's self-serving assertion that it enjoys the
support of the majority of the sales force in petitioner's company? and;
2. Whether or not respondent Minister committed a grave abuse of discretion when, notwithstanding
his very own finding that there was just cause for the dismissal of the three (3) salesmen, he
nevertheless ordered their reinstatement.

HELD:
1. Yes. The respondent Minister has the power to decide a labor dispute in a case assumed by him
under Art. 264 (g) of the Labor Code but this power was exceeded when he certified respondent
Union as the exclusive bargaining agent of the company's salesmen since this is not a
representation proceeding as described under the Labor Code. Moreover the Union did not pray
for certification but merely for a finding of unfair labor practice imputed to petitioner-company.
2. Yes. The order of the respondent Minister to reinstate the employees despite a clear finding of
guilt on their part is not in conformity with law. Reinstatement is simply incompatible with a finding
of guilt. Where the totality of the evidence was sufficient to warrant the dismissal of the
employees the law warrants their dismissal without making any distinction between a first
offender and a habitual delinquent. Under the law, respondent Minister is duly mandated to
equally protect and respect not only the labor or workers' side but also the management and/or
employers' side. The law, in protecting the rights of the laborer, authorizes neither oppression nor
self-destruction of the employer. To order the reinstatement of the erring employees namely,
Mejia, Sayson and Reynante would in effect encourage unequal protection of the laws as a
managerial employee of petitioner company involved in the same incident was already dismissed
and was not ordered to be reinstated. As stated by Us in the case of San Miguel Brewery vs.
National Labor Union, 2 "an employer cannot legally be compelled to continue with the
employment of a person who admittedly was guilty of misfeasance or malfeasance towards his
employer, and whose continuance in the service of the latter is patently inimical to his interest."
` Judgment is hereby rendered reversing and setting aside the Order of the respondent Minister,
dated December 27, 1985 for grave abuse of discretion. However, in view of the fact that the dismissed
employees are first offenders, petitioner is hereby ordered to give them separation pay. The temporary
restraining order is hereby made permanent.

Aguirre, Nolaida
2011-0087
EURO-LINEA PHIL., INC., VS NLRC

G.R. No. 78782
Petitioners: Euro-Linea Phil., Inc.
Respondents: National Labor Relations Commission and Jimmy O. Pastoral
Ponente: Paras, J.
FACTS:
On August 17, 1983, petitioner hired Pastoral as shipping expediter on a probationary basis for a
period of six months ending February 18, 1984. However, prior to hiring by petitioner, Pastoral had been
employed by Fitscher Manufacturing Corporation also as shipping expediter for more than one and a half
years. Pastoral was absorbed by petitioner but under a probationary basis. On February 4, 1984, Pastoral
received a memorandum terminating his probationary employment effective also on February 4, 1984 in
view of his failure to meet the performance standards set by the company. To contest his dismissal,
Pastoral filed a complaint for illegal dismissal against petitioner. The Labor Arbiter found petitioner guilty
of illegal dismissal and ordered to reinstate complainant with six months backwages. Petitioner appealed
the decision to the NLRC, but the appeal was dismissed.
ISSUE:
 Whether or not the National Labor Relations Commission acted with grave abuse of discretion
amounting to excess of jurisdiction in ruling against the dismissal of the respondent, a temporary
or probationary employee, by his employer (Petitioner)?
HELD:
In the instant case, it is evident that the NLRC correctly applied Article 282 in the light of the
foregoing and that its resolution is not tainted with unfairness or arbitrariness that would amount to grave
abuse of discretion or lack of jurisdiction. Although a probationary or temporary employee has a limited
tenure, he still enjoys the constitutional protection of security of tenure. During his tenure of employment
or before his contract expires, he cannot be removed except for cause as provided for by law. Petitioner
not only failed to present sufficient evidence to substantiate the cause of private respondent's dismissal,
but likewise failed to cite particular acts or instances to show the latter's poor performance.
It must be emphasized that the prerogative of management to dismiss or lay- off an employee
must be done without abuse of discretion, for what is at stake is not only petitioner's position but also his
means of livelihood…
Finally, it is significant to note that in the interpretation of the protection to labor and social justice
provisions of the constitution and the labor laws and rules and regulations implementing the constitutional
mandate, the Supreme Court has always adopted the liberal approach which favors the exercise of labor
rights

Aguirre, Nolaida
2011-0087
GELMART INDUSTRIES PHIL., INC., VS NLRC

G.R. No. 85668
Date: August 10, 1989
Petitioner: GELMART Industries Phil., Inc.,
Respondents: Hon. National Labor Relations Commission and Felix Francis
Ponente: Gancayco, J.
FACTS:
Private respondent Felix Francis started working as an auto-mechanic for petitioner Gelmart
Industries Phils., Inc. sometime in 1971. As such, his work consisted of the repair of engines and
underchassis, as well as trouble shooting and overhauling of company vehicles. He is likewise entrusted
with some tools and spare parts in furtherance of the work assigned to him.
On April 11, 1987, private respondent was caught by the security guards taking out of
GELMART's premises one (1) plastic container filled with about 16 ounces of "used' motor oil, without the
necessary gate pass to cover the same as required under GELMART's rules and regulations. By reason
thereof, petitioner, on April 13, 1987, was placed under preventive suspension pending investigation for
violation of company rules and regulations. Under the said rules, theft and/or pilferage of company
property merits an outright termination from employment. After due investigation, or on May 20, 1987,
private respondent was found guilty of theft of company property. As a consequence, his services were
severed.
Thereafter, private respondent filed a complaint for illegal dismissal before the NLRC. In a
decision dated February 26, 1988, Labor Arbiter Ceferina J. Diosana ruled that private respondent was
illegally dismissed and, accordingly, ordered the latter's reinstatement with full backwages from April 13,
1987 up to the time of actual reinstatement.
ISSUE:
 Whether or not the National Labor Relations Commission committed a grave abuse of discretion
amounting to lack or excess of jurisdiction in ordering the reinstatement of private respondent to
his former position with payment of backwages equivalent to six (6) months?
HELD:
No. Consistent with the policy of the State to bridge the gap between the underprivileged
workingmen and the more affluent employers, the NLRC rightfully tilted the balance in favor of the
workingmen — and this was done without being blind to the concomitant right of the employer to the
protection of his property.
Thus, without being too harsh to the employer, on the one hand, and naively liberal to labor, on
the other, the NLRC correctly pointed out that private respondent cannot totally escape liability for what is
patently a violation of company rules and regulations.

To reiterate, be it of big or small commercial value, intended to be re-used or altogether disposed
of or wasted, the "used" motor oil still remains, in legal contemplation, the property of GELMART. As
such, to take the same out of GELMART's premises without the corresponding gate pass is a violation of
the company rule on theft and/or pilferage of company property. However, as this Court ruled in Meracap
vs. International Ceramics Mfg. Co., Inc., "where a penalty less punitive would suffice, whatever missteps
may be committed by labor ought not to be visited with a consequence so severe. On this score, it is
very difficult for this Court to discern grave abuse of discretion on the part of the NLRC in
modifying the appealed decision. The suspension imposed upon private respondent is a sufficient
penalty for the misdemeanor committed.
Considering that private respondent herein has no previous derogatory record in his fifteen (15)
years of service with petitioner GELMART the value of the property pilfered (16 ounces of used motor oil)
is very minimal, plus the fact that petitioner failed to reasonably establish that non-dismissal of private
respondent would work undue prejudice to the viability of their operation or is patently inimical to the
company's interest, it is more in consonance with the policy of the State, as embodied in the Constitution,
to resolve all doubts in favor of labor…At this point, this Court does not see any reason to deviate from
the said ruling.

Aguirre, Nolaida
2011-0087
MANILA ELECTRIC COMPANY VS NLRC

G.R. No. 78763
Date: July 12,1989
Petitioner: Manila Electric Company
Respondents: The National Labor Relations Commission, and Apolinario M. Signo
Ponente: Medialdea, J.
FACTS:
In 1981, a certain Fernando de Lara filed an application with the petitioner company for electrical
services at his residence at Peñafrancia Subdivision, Marcos Highway, Antipolo, Rizal. Private
respondent Signo facilitated the processing of the said application as well as the required documentation
for said application at the Municipality of Antipolo, Rizal. In consideration thereof, private respondent
received from Fernando de Lara the amount of ₱ 7,000.00. Signo thereafter filed the application for
electric services with the Power Sales Division of the company. However, the residence of de Lara was
located is not yet within the serviceable point of Meralco, because the place was beyond the 30-meter
distance from the nearest existing Meralco facilities. In order to expedite the electrical connections,
certain employees of the company, including respondent Signo, made it appear in the application that the
sari-sari store at the corner of Marcos Highway, an entrance to the subdivision, is applicant de Lara's
establishment, which, in reality is not owned by the latter.
As a result of this scheme, the electrical connections to de Lara's residence were installed and
made possible. However, due to the fault of the Power Sales Division of Petitioner Company, Fernando
de Lara was not billed for more than a year. In an investigation conducted by the company, respondent
Signo was found responsible for the said irregularities in the installation. Thus, the services of the latter
were terminated on May 18, 1983. Notwithstanding that the private respondent has been employed by the
petitioner company since 1963. Signo filed a complaint for illegal dismissal, unpaid wages, and separation
pay.
The Labor Arbiter rendered a decision directing the petitioner to reinstate respondent without
back wages. Both parties appealed to the Commission and were dismissed to reinstate by the
Commission for lack of merit and affirmed the decision of the Labor Arbiter.
ISSUE:
 Whether or not respondent Signo should be dismissed from petitioner company on grounds of
serious misconduct and loss of trust and confidence?

HELD:
No. There is no question that herein respondent Signo is guilty of breach of trust and violation of
company rules, the penalty for which ranges from reprimand to dismissal depending on the gravity of the
offense. However, as earlier stated, the respondent Commission and the Labor Arbiter found that
dismissal should not be meted to respondent Signo considering his twenty (20) years of service in the
employ of petitioner, without any previous derogatory record, in addition to the fact that petitioner
company had awarded him in the past, two (2) commendations for honesty. If ever the petitioner suffered
losses resulting from the unlisted electric consumption of de Lara, this was found to be the fault of
petitioner's Power Sales Division.
This Court has held time and again, in a number of decisions, that notwithstanding the existence
of a valid cause for dismissal, such as breach of trust by an employee, nevertheless, dismissal should not
be imposed, as it is too severe a penalty if the latter has been employed for a considerable length of time
in the service of his employer.
Further, in carrying out and interpreting the Labor Code's provisions and its implementing
regulations, the workingman's welfare should be the primordial and paramount consideration. This kind of
interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided
for in Article 4 of the New Labor Code which states that "all doubts in the implementation and
interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be
resolved in favor of labor" (Abella v. NLRC, G.R. No. 71812, July 30,1987,152 SCRA 140).
In view of the foregoing, reinstatement of respondent Signo is proper in the instant case, but
without the award of backwages, considering the good faith of the employer in dismissing the respondent.

Aguirre, Nolaida
2011-0087
MATERNITY CHILDREN’S HOSPITAL VS SECRETARY OF LABOR (Labor Law defined)

G.R. No. 78909
Date: June 30, 1984
Petitioner: Maternity Children’s Hospital, represented by Antera L. Dorado
Respondents: The Honorable Secretary of Labor and the Regional Director of Labor, Region X
FACTS:
Petitioner is a semi-governmental hospital in Cagayan De Oro and Employing forty-one (41)
employees. Aside from salary and living allowances, the employees are given food, but the amount of
which is deducted from their respective salaries. On May 3, 1986, ten (10) employees filed a complaint
with the Regional Director of Labor and Employment, Region 10, for underpayment of their salaries and
ECOLAS. Consequently, the Regional Director directed two of his labor standard and welfare officers to
investigate and ascertain the truth of the allegations in the complaint.
Based on the report and recommendation, the Regional Director issued an order dated August 4,
1986, directing payment of ₱ 723, 888.58, to all the petitioner’s employees. The Secretary of Labor
likewise affirmed the Decision and dismissed the Motion for Reconsideration of the petitioner.
In a petition for certiorari, petitioner questioned the jurisdiction of the Regional Director and the all-
embracing applicability of the award involving salary differentials and ECOLAS, in that it covers not only
the hospitals employees who signed the complaints, but also those who are not signatories to the
complaint, and those who were no longer in the service of the hospital at the time the complaint was filed.
ISSUES:
1. Whether or not the Regional Director had jurisdiction over the case; and
2. Whether or not the Regional Director erred in extending the award to all hospital employess?
HELD:
1. The answer is in the affirmative the Regional Directos has a jurisdiction in this labor standard
case. This is Labor Standard case, and is governed by Article 128 (b) of the Labor Code , as
amended by E.O. No. 111.
“Labor standards refer to the minimum requirements prescribed by existing laws,

rules, and regulations relating to wages, hours of work, cost of living allowance
and other monetary and welfare benefits, including occupational, safety, and
health standards (Section 7, Rule I, Rules on the Disposition of Labor Standards
Cases in the Regional Office, dated September 16, 1987)”.
Under the present rules, a Regional Director exercises both visitorial and enforcement
power over labor standards cases, and is therefore empowered to adjudicate money
claims, provided there still exists an employer-employee relationship, and the findings of the
regional office is not contested by the employer concerned. We believed…that even in the
absence of E. O. No. 111, Regional Directors already had enforcement powers over money
claims, effective under P.D. No. 850, issued on December 16, 1975, which transferred labor
standards cases from the arbitration system to the enforcement system.

2. The Regional Director correctly applied the award with respect to those employees who signed
the complaint, as well as those who did not sign the complaint, but were still connected with the
hospital at the time the complaint was filed. The justification for the award to this group of
employees who were not signatories to the complaint is that the visitorial and enforcement
powers given to the Secretatry of Labor labor is relevant to, and exercisable over
establishments, not over individual members/employees, because what is sought to be
achieved by its exercise is the observance of, and/ or compliance by such firm/establishment with
the labor standards regulations. However, there is no legal justification for the award in favor of
those employees who were no longer connected with the hospital t the time the complaint was
filed. Article 129 of the Labor Code in aid of the enforcement power of the Regional Director is not
applicable where the employee seeking to be paid is separated from service. His claim is purely
money claim that has to be subject of arbitration proceedings and therefore within the original and
exclusive jurisdiction of the Labor Arbiter.

Aguirre, Nolaida
2011-0087
MENDOZA VS RURAL BANK OF LUCBAN

G.R. No. 155421
Date: July, 7, 2004
Petitioner: Elmer M. Mendoza
Respondent: Rural Bank of Lucban
Ponente: Panganiban, J.
FACTS:
On April 25, 1999, the Board of Directors of the Rural Bank of Lucban, Inc., issued Board
Resolution Nos. 99-52 and 99-53, “that in line with the policy of the bank to familiarize bank employees
with the various phases of bank operations and further strengthen the existing internal control system[,]
all officers and employees are subject to reshuffle of assignments. Moreover, this resolution does not
preclude the transfer of assignment of bank officers and employees from the branch office to the head
office and vice-versa.”. Pursuant to Board Res. No. 95-52 the following branch employees; Joyce V. Zeta,
Clodualdo Zagala, Elmer M. Mendoza and Chona R. Mendoza are reshuffled to their new assignments
without changes in their compensation and other benefits.
Petitioner Elmer Mendoza in an antedated letter expressed his opinion on the reshuffled to the
management. Upon the reply of the Bank Chairman, Daya, it informed it informed that it was never in their
intention to downgrade the position of the petitioner in the bank considering that his due compensation as
bank appraiser is maintained and no future reduction was intended. Petitioner filed a leave of absence for
10 days due to ailment and then another 20 days leave of absence.
While on his second leave of absence, petitioner filed a Complaint before Arbitration Branch No.
IV of the National Labor Relations Commission (NLRC). The Complaint -- for illegal dismissal,
underpayment, separation pay and damages -- was filed against the Rural Bank of Lucban and/or its
president, Alejo B. Daya; and its Tayabas branch manager, Briccio V. Cada.
Petitioner argues that he was compelled to file an action for constructive dismissal, because he
had been demoted from appraiser to clerk and not given any work to do, while his table had been placed
near the toilet and eventually removed. He adds that the reshuffling of employees was done in bad faith,
because it was designed primarily to force him to resign.
The Labor Arbiter rendered the decision in favor the petitioner, the respondent Bank appealed
and the NLRC reversed the Decision. After the NLRC denied his Motion for Reconsideration, petitioner
brought before the Court of Appeals a Petition for Certiorari assailing the foregoing Resolution. The Court
of appeals Find that no grave abuse of discretion could be attributed to the NLRC. Hence, this Petition.
ISSUE:
 Whether petitioner was constructively dismissed from his employment?

HELD:
No. The petition has no merit. Constructive dismissal is defined as an involuntary resignation
resorted to when continued employment is rendered impossible, unreasonable or unlikely; when there is
a demotion in rank or a diminution of pay; or when a clear discrimination, insensibility or disdain by an
employer becomes unbearable to the employee. In the case at bar, the reshuffling of its employees was
done in good faith and cannot be made the basis of a finding of constructive dismissal.
In the pursuit of its legitimate business interest, management has the prerogative to transfer or
assign employees from one office or area of operation to another -- provided there is no demotion in rank
or diminution of salary, benefits, and other privileges; and the action is not motivated by discrimination,
made in bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege
is inherent in the right of employers to control and manage their enterprise effectively. The right of
employees to security of tenure does not give them vested rights to their positions to the extent of
depriving management of its prerogative to change their assignments or to transfer them.
There appears no justification for denying an employer the right to transfer employees to expand
their competence and maximize their full potential for the advancement of the establishment. Petitioner
was not singled out; other employees were also reassigned without their express consent. Neither was
there any demotion in the rank of petitioner; or any diminution of his salary, privileges and other benefits.
This fact is clear in respondent's Board Resolutions, the April 30, 1999 letter of Bank President Daya to
Branch Manager Cada, and the May 10, 1999 letter of Daya to petitioner.
The law protects both the welfare of employees and the prerogatives of management. Courts will
not interfere with business judgments of employers, provided they do not violate the law, collective
bargaining agreements, and general principles of fair play and justice. The transfer of personnel from one
area of operation to another is inherently a managerial prerogative that shall be upheld if exercised in
good faith -- for the purpose of advancing business interests, not of defeating or circumventing the rights
of employees.

Aguirre, Nolaida
2011-0087
PEOPLE VS POMAR (Police Power as the basis of Labor Laws)

G.R. No. L-22008
Date: November 3, 1924
Plaintiff- appellee: The People of the Philippine Islands
Defendant-appellant: Julio Pomar
Ponente: Johnson, J.
FACTS:
The defendant is the manager and person in charge of La Flor de la Isabel, a tobacco factory
pertaining to the La Compania General de Tobaos de Filipinas. An employee by the name of Macaria
Fajardo was granted a vacation leave by the defendant which began on July 16, 1923, by the reason of
her pregnancy. Said manager failed and refused to ar Fajardo the sum of ₱ 80.00 to which she was
entitled as her regular wages corresponding to 30 days before and 30 days after the delivery and
confinement pursuant to Sec. 13 of Act No. 3071, which took place on August 12, 1923
Fajardo filed a complaint against the defendant. The defendant demurred, alleging that the facts
therein contained did not constitute an offense. The demurrer was overruled, whereupon the defendant
answered and admitted at the trial all the allegations contained in the complaint, he contended that the
provisions of Sec. 15 of Act. No. 3017 upon which the complaint was based was illegal, unconstitutional,
and void.
The defendant was found guilty of the allege offense described in the complaint and sentenced
him to pay a fine of ₱ 50.00 or to suffer a subsidiary imprisonment in case of insolvency, and to pat the
cost in accordance with the provisions of Sec. 15 of said Act.
ISSUE:
 Whether or not the provisions of sections 13 and 15 of Act No. 3071 are a reasonable and lawful
exercise of the police power of the state?
HELD:
Yes. We are fully persuaded, under the facts and the law, that the provisions of section 13, of Act
No. 3071 of the Philippine Legislature, are unconstitutional and void, in that they violate and are contrary
to the provisions of the first paragraph of section 3 of the Act of Congress of the United States of August
29, 1916. (Vol. 12, Public Laws, p. 238.)
Therefore, the sentence of the lower court is hereby revoked, the complaint is hereby dismissed,
and the defendant is hereby discharged from the custody of the law, with costs de oficio.

RATIO DECIDENDI:
The statute now under consideration is attacked upon the ground that it authorizes an
unconstitutional interference with the freedom of contract including within the guarantees of the due
process clause of the 5th Amendment. That the right to contract about one's affairs is a part of the liberty
of the individual protected by this clause is settled by the decision of this court, and is no longer open to
question. Within this liberty are contracts of employment of labor. In making such contracts, generally
speaking, the parties have an equal right to obtain from each other the best terms they can as the result
of private bargaining. (Allgeyer vs. Louisiana, 165 U. S., 578; 591; Adair vs. United States, 208 U. S.,
161; Muller vs. Oregon, 208 U. S., 412, 421.)
x x x x x x x x x
The law takes account of the necessities of only one party to the contract. It ignores the
necessities of the employer by compelling him to pay not less than a certain sum, not only whether the
employee is capable of earning it, but irrespective of the ability of his business to sustain the burden,
generously leaving him, of course, the privilege of abandoning his business as an alternative for going on
at a loss…The law takes no account of periods of distress and business depression, or crippling losses,
which may leave the employer himself without adequate means of livelihood. To the extent that the sum
fixed exceeds the fair value of the services rendered, it amounts to a compulsory exaction from the
employer for the support of a partially indigent person, for whose condition there rests upon him no
peculiar responsibility, and therefore, in effect, arbitrarily shifts to his shoulders a burden which, if it
belongs to anybody, belongs to society as a whole.
The failure of this state which, perhaps more than any other, puts upon it the stamp of
invalidity is that it exacts from the employer an arbitrary payment for a purpose and upon a basis
having no casual connection with his business, or the contract, or the work the employee
engages to do. The declared basis, as already pointed out, is not the value of the service rendered, but
the extraneous circumstances that the employee needs to get a prescribed sum of money to insure her
subsistence, health and morals. . . . The necessities of the employee are alone considered, and these
arise outside of the employment, are the same when there is no employment, and as great in one
occupation as in another. . . . In principle, there can be no difference between the case of selling labor
and the case of selling goods. If one goes to the butcher, the baker, or grocer to buy food, he is morally
entitled to obtain the worth of his money, but he is not entitle to more. If what he gets is worth what he
pays, he is not justified in demanding more simply because he needs more; and the shopkeeper, having
dealt fairly and honestly in that transaction, is not concerned in any peculiar sense with the question of his
customer's necessities. Should a statute undertake to vest in a commission power to determine the
quantity of food necessary for individual support, and require the shopkeeper, if he sell to the individual at
all, to furnish that quantity at not more than a fixed maximum, it would undoubtedly fall before the
constitutional test. The fallacy of any argument in support of the validity of such a statute would be quickly
exposed. The argument in support of that now being considered is equally fallacious, though the
weakness of it may not be so plain.
It has been said that the particular statute before us is required in the interest of social justice for
whose end freedom of contract may lawfully be subjected to restraint. The liberty of the individual to do as
he pleases, even in innocent matters, is not absolute. That liberty must frequently yield to the common
good, and the line beyond which the power of interference may not be pressed is neither definite nor
unalterable, may be made to move, within limits not well defined, with changing needs and
circumstances.

Aguirre, Nolaida
2011-0087
PEOPLE VS VERA REYES

G.R. No.L-45748
Date: April 5, 1939
Plaintiff-appellant: The People of the Philippines
Defendant-appellee: Franco Vera Reyes
Ponente: Imperial, J.
FACTS:
The defendant was charged in the Court of First Instance of Manila by the assistant city fiscal with
a violation of Act No. 2549, as amended by Acts Nos. 3085 and 3958 The information alleged that from
September 9 to October 28, 1936, and for the some time after, the accused, in his capacity as president
and general manager of the Consolidated Mines, having engaged the services of Severa Velasco de
Vera as stenographer, at an agreed salary of P35 a month willfully and illegally refused to pay the salary
of said stenographer corresponding to the above-mentioned period of time, which was long due and
payable, in spite of her repeated demands.
The accused interposed a demurrer on the ground that the facts alleged in the information do not
constitute any offense, and that even if they did, the laws penalizing it are unconstitutional. After the
hearing, the court sustained the demurrer, declaring unconstitutional the last part of section 1 of Act No.
2549 as last amended by Act No. 3958, which considers as an offense the facts alleged in the
information, for the reason that it violates the constitutional prohibition against imprisonment for debt, and
dismissed the case, with costs de oficio. The fiscal appealed from said order.
In this appeal the Solicitor-General contends that the court erred in declaring Act No. 3958
unconstitutional, and in dismissing the cause.
ISSUE:
3. Whether or not the last part of section 1 of Act No. 2549 as amended by Act. 3958 is
constitutional and valid?
HELD:
It is constitutional and valid. A close perusal of the last part of section 1 of Act No. 2549, as
amended by section 1 of Act No. 3958, will show that its language refers only to the employer who, being
able to make payment, shall abstain or refuse to do so, without justification and to the prejudice of the
laborer or employee. An employer so circumstanced is not unlike a person who defrauds another, by
refusing to pay his just debt. In both cases the deceit or fraud is the essential element constituting the
offense. The first case is a violation of Act No. 3958, and the second is estafa punished by the Revised
Penal Code. In either case the offender cannot certainly invoke the constitutional prohibition against
imprisonment for debt.

Police power is the power inherent in a government to enact laws, within constitutional limits, to
promote the order, safety, health, morals, and general welfare of society. (12 C. J., p. 904.) In the
exercise of this power the Legislature has ample authority to approve the disputed portion of Act No. 3958
which punishes the employer who, being able to do so, refuses to pay the salaries of his laborers or
employers in the specified periods of time. Undoubtedly, one of the purposes of the law is to suppress
possible abuses on the part of employers who hire laborers or employees without paying them the
salaries agreed upon for their services, thus causing them financial difficulties. Without this law, the
laborers and employees who earn meager salaries would be compelled to institute civil actions which, in
the majority of cases, would cost them more than that which they would receive in case of a decision in
their favor.
We hold that the last part of section 1 of Act No. 2549, as last amended by section 1 of Act No.
3958, is valid, and we reverse the appealed order with instructions to the lower court to proceed with the
trial of the criminal case until it is terminated, without special pronouncement as to costs in this instance.

Aguirre, Nolaida
2011-0087
PHILIPINE ASSOCIATION OF SERVICE EXPORTERS INC VS DRILON

G.R. No. 81958
Date: June 30, 1988
Petitioner: Philippine Association of Service Exporters, Inc.,
Respondents: Hon. Franklin M. Drilon as Secretary of Labor and Employment, and Tomas D. Achacoso,
as Administrator of the Philippine Overseas Employment Administration
Ponente: Sarmiento, J.
FACTS:
The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a firm
"engaged principally in the recruitment of Filipino workers, male and female, for overseas
placement," 1 challenges the Constitutional validity of Department Order No. 1, Series of 1988, of the
Department of Labor and Employment, in the character of "Guidelines Governing The Temporary
Suspension of Deployment of Filipino Domestic and Household Workers." Specifically, the measure
is assailed for "discrimination against males or females;" that it "does not apply to all Filipino workers but
only to domestic helpers and females with similar skills;" and that it is violative of the right to travel. It is
held likewise to be an invalid exercise of the lawmaking power, police power being legislative, and not
executive, in character.
On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary of Labor and
Administrator of the Philippine Overseas Employment Administration, filed a Comment informing the
Court that on March 8, 1988, the respondent Labor Secretary lifted the deployment ban in the states of
Iraq, Jordan, Qatar, Canada, Hongkong, United States, Italy, Norway, Austria, and Switzerland. In
submitting the validity of the challenged "guidelines," the Solicitor General invokes the police power of the
Philippine State.
ISSUE:
 Whether or not Department Order No. 1 in the police power measure is valid under the
Constitution?
HELD:
The concept of police power is well-established in this jurisdiction. It has been defined as the
"state authority to enact legislation that may interfere with personal liberty or property in order to promote
the general welfare."
Department Order No. 1 is a valid implementation of the Labor Code, in particular, its basic policy
to "afford protection to labor," pursuant to the respondent Department of Labor's rule-making authority
vested in it by the Labor Code. The disputed Order is a valid qualification thereto.

"Protection to labor" does not signify the promotion of employment alone. What concerns the Constitution
more paramountly is that such an employment be above all, decent, just, and humane. It is bad enough
that the country has to send its sons and daughters to strange lands because it cannot satisfy their
employment needs at home. Under these circumstances, the Government is duty-bound to insure that
our toiling expatriates have adequate protection, personally and economically, while away from home. In
this case, the Government has evidence, an evidence the petitioner cannot seriously dispute, of the lack
or inadequacy of such protection, and as part of its duty, it has precisely ordered an indefinite ban on
deployment.
The Court finds furthermore that the Government has not indiscriminately made use of its
authority. It is not contested that it has in fact removed the prohibition with respect to certain countries as
manifested by the Solicitor General.
The Government has convinced the Court in this case that this is its intent. We do not find the
impugned Order to be tainted with a grave abuse of discretion to warrant the extraordinary relief prayed
for.

Aguirre, Nolaida
2011-0087
REPUBLIC VS COURT OF APPEALS

G.R. No. 87676
Petitioner: Republic of the Philippines, represented by the National Parks Development Committee
Respndents: The Hon. Court of Appeals and the national Parks Development Supervisory Association &
their Members
Ponente: Griño-Aquino, J.
FACTS:
The NPDC was originally created in 1963 under Executive Order No. 30, as the Executive
Committee for the development of the Quezon Memorial, Luneta and other national parks, and later
renamed as the National Parks Development Committee under Executive Order No. 68, on September
21, 1967, it was registered in the Securities and Exchange Commission (SEC) as a non-stock and non-
profit corporation, known as "The National Parks Development Committee, Inc."
However, in August, 1987, the NPDC was ordered by the SEC to show cause why its Certificate
of Registration should not be suspended for. The NPDC Chairman, Amado Lansang, Jr., informed SEC
that his Office had no objection to the suspension, cancellation, or revocation of the Certificate of
Registration of NPDC.
By virtue of Executive Order No. 120, the NPDC was attached to the Ministry (later Department)
of Tourism and provided with a separate budget subject to audit by the Commission on Audit and
pursuant to Executive Order No. 120, all appointments and other personnel actions shall be submitted
through the Civil Service Commission Commission.
Meanwhile, the Rizal Park Supervisory Employees Association, consisting of employees holding
supervisory positions in the different areas of the parks, was organized and it affiliated with the Trade
Union of the Philippines and Allied Services (TUPAS) under Certificate No. 1206. Two collective
bargaining agreements were entered into between NPDC and NPDCEA (TUPAS local Chapter No. 967)
and NPDC and NPDCSA (TUPAS Chapter No. 1206), for a period of two years or until June 30, 1989.
On March 20, 1988, these unions staged a stake at the Rizal Park, Fort Santiago, Paco Park, and
Pook ni Mariang Makiling at Los Banos, Laguna, alleging unfair labor practices by NPDC.
On March 21, 1988, NPDC filed in the Regional Trial Court in Manila, Branch III, a complaint
against the union to declare the strike illegal and to restrain it on the ground that the strikers, being
government employees, have no right to strike although they may form a union. The Regional Trial Court
of Manila, Branch III, dismissed for lack of jurisdiction, the petitioner's complaint in Civil Case No. 88-
44048 praying for a declaration of illegality of the strike of the private respondents and to restrain the
same. The Court of Appeals denied the petitioner's petition for certiorari, hence, this petition for review.

ISSUE:
 Whether the petitioner, National Parks Development Committee (NPDC), is a government
agency, or a private corporation, for on this issue depends the right of its employees to strike.
HELD:
NPDC is a government agency, its employees are covered by civil service rules and regulations
(Sec. 2, Article IX, 1987 Constitution). Its employees are civil service employees (Sec. 14, Executive
Order No. 180).
While NPDC employees are allowed under the 1987 Constitution to organize and join unions of
their choice, there is as yet no law permitting them to strike. In case of a labor dispute between the
employees and the government, Section 15 of Executive Order No. 180 dated June 1, 1987 provides that
the Public Sector Labor- Management Council, not the Department of Labor and Employment, shall hear
the dispute. Clearly, the Court of Appeals and the lower court erred in holding that the labor dispute
between the NPDC and the members of the NPDSA is cognizable by the Department of Labor and
Employment.
The petition for review is granted. The private respondents' complaint should be filed in the Public Sector
Labor-Management Council as provided in Section 15 of Executive Order No. 180.

Aguirre, Nolaida
2011-0087
SOSITO VS AGUINALDO DEVELOPMENT CORPORATION

G.R. No. L-48926
Petitioner: Manuel Sosito
Respondent: Aguinaldo Development Corporation
Ponente: Cruz, J.
FACTS:
Petitioner Manuel Sosito was employed in 1964 by the private respondent, a logging company,
and was in charge of logging importation, with a monthly salary of P675.00, when he went on indefinite
leave with the consent of the company on January 16, 1976. On July 20, 1976, the private respondent,
through its president, announced a retrenchment program and offered separation pay to employees in the
active service as of June 30, 1976, who would tender their resignations not later than July 31, 1976. The
petitioner decided to accept this offer and so submitted his resignation on July 29, 1976, "to avail himself
of the gratuity benefits" promised. However, his resignation was not acted upon and he was never given
the separation pay he expected. The petitioner complained to the Department of Labor, where he was
sustained by the labor arbiter. The company was ordered to pay Sosito the sum of ₱ 4,387.50,
representing his salary for six and a half months. On appeal to the National Labor Relations Commission,
this decision was reversed and it was held that the petitioner was not covered by the retrenchment
program. Hence this petition.
ISSUE:
 Whether or not the etitioner is entitled to separation pay under the retrenchment program?
HELD:
No. It is clear from the memorandum that the offer of separation pay was extended only to those
who were in the active service of the company as of June 30, 1976. It is equally clear that the petitioner
was not eligible for the promised gratuity as he was not actually working with the company as of the said
date. Being on indefinite leave, he was not in the active service of the private respondent although, if one
were to be technical, he was still in its employ. Even so, during the period of indefinite leave, he was not
entitled to receive any salary or to enjoy any other benefits available to those in the active service.
We note that under the law then in force the private respondent could have validly reduced its
work force because of its financial reverses without the obligation to grant separation pay. This was
permitted under the original Article 272(a), of the Labor Code, which was in force at the time. The
company voluntarily offered gratuities to those who would agree to be phased out pursuant to the terms
and conditions of its retrenchment program, in recognition of their loyalty and to tide them over their own
financial difficulties. The Court feels that such compassionate measure deserves commendation and
support but at the same time rules that it should be available only to those who are qualified therefore.
We hold that the petitioner is not one of them.

While the Constitution is committed to the policy of social justice and the protection of the working
class, it should not be supposed that every labor dispute will be automatically decided in favor of labor.
Management also has its own rights which, as such, are entitled to respect and enforcement in the
interest of simple fair play. Out of its concern for those with less privileges in life, this Court has inclined
more often than not toward the worker and upheld his cause in his conflicts with the employer. Such
favoritism, however, has not blinded us to the rule 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.

Princess C. Aragon
2011-0238
ASSOCIATED WATCHMEN AND SECURITY UNION VS LANTING

G.R. No. L-141120
February 29, 1960
Petitioner: Associated Watchmen and Security Union (PTWO)
Respondent: The Hon. Judges Juan Lanting, Arsenio Martinez, Emiliano Tabigne, of the Court of
Industrial Relations and Macondray and Co., Inc.
Ponente: J. Labrador
Facts:
The Republic Ships Security Agency is one of three agencies, together with K. Tagle Ship
Watchmen Agency and the City Watchmen and Security Agency, employed by certain shipping agencies
in the City of Manila and respondent Macondray and Company, Inc., in guarding ships or vessels arriving
at the port of Manila and discharging cargo on its piers. Thirty-eight affiliates of the Republic Ships
Security Agency belong to the petitioner labor union.
Petitioner union and its members declared a strike against 19 shipping firms in the City of Manila.
Attempts were made by the Court of Industrial Relations to settle the strike. At the hearing or conference
before the court on 16 March 1956, the strikers, through counsel, expressed their desire to return back to
work and maintain the status quo.
The manager of respondent Macondray and Company, Inc. expressed willingness to employ the
strikers belonging to the petitioner union under the condition that the agency to which they belong file a
bond in the sum of P5,000 in favor of Macondray and Company, Inc. to respond for any negligence,
misfeasance or malfeasance of any of the watchmen of petitioner. However, the Republic Ships
Security Agency, to which most of the members of the petitioner union belonged, failed to comply with the
demands of Macondray and Company, Inc. that they furnish such a bond. Because of the failure of the
Republic Ships Security Agency to furnish a bond, Macondray and Company, Inc. refused to employ
watchmen from the said agency.
On 15 November 1956, Macondray and Company, Inc. was charged with unfair labor practice for
having dismissed and refused to employ 38 members of the petitioner herein.
Respondent contends that they did not demand a bond from the members of the petitioner union
but from the Republic Ships Security Agency; that it has not discriminated against members of the
petitioner union.
Issue:
Validity of the bond imposed by respondent Macondray and Company, Inc.
Held:
The refusal of the respondent to employ guards affiliated with a security or watchmen agency that
does not furnish a bond can not constitute an unfair labor practice. Such refusal is merely the exercise of
respondent's legitimate right to protect its own interests.
Respondent never had any contract or agreement with the petitioner union; respondent secured
security guards through the three watchmen agencies above mentioned, without reference to the unions
to which the different guards may have pertained. The members of the petitioner union or of the shipping
agencies are not ordinary permanent and continuous employees, but merely casual guards who are
employed only when there is a ship to be guarded and during the stay of the ship in the port of Manila.
Ruled in favor of the respondents.

Princess C. Aragon
2011-0238
CBTC EMPLOYEES UNION VS. CLAVE

G.R. No. L - 49582
January 7, 1986
Petitioner: CBTC EMPLOYEES UNION
Respondent: THE HONORABLE JACOBO C. CLAVE, Presidential Executive Assistant, and
COMMERCIAL BANK & TRUST COMPANY OF THE PHILIPPINES
Ponente: J. DE LA FUENTE
Facts:
Petitioner Commercial Bank and Trust Company Employees' Union (CBTC) lodged a complaint
with the Department of Labor, against private respondent bank (Comtrust) for non-payment of the holiday
pay benefits provided for under Article 95 (now Article 94) of the Labor Code. Failing to arrive at an
amicable settlement at conciliation level, the parties opted to submit their dispute for voluntary arbitration.
On 22 April 1976, the Arbitrator handed down an award on the dispute in favor of petitioner union. The
next day, 23 April 1976, the Department of Labor released Policy Instructions No. 9, a policy regarding
the implementation of the ten (10) paid legal holidays. Said bank interposed an appeal to the National
Labor Relations Commission (NLRC), contending that the Arbitrator demonstrated gross incompetence
and/or grave abuse of discretion when he failed to apply Policy Instructions No. 9. This appeal was
dismissed on 16 August 1976. Private respondent then appealed to the Secretary of Labor. On 30 June
1977, the Acting Secretary of Labor reversed the NLRC decision. On the principal issue of holiday pay,
the Acting Secretary, guided by Policy Instructions No. 9, applied the same retrospectively, among other
things.
Issue:
Whether or not the monthly pay of the covered employees already includes what Article 94 of the
Labor Code requires as regular holiday pay benefit in the amount of his regular daily wage.
Held:
In excluding the union members the benefits of the holiday pay law, public respondent predicated
his ruling on Section 2, Rule IV, Book III of the Rules to implement Article 94 of the Labor Code
promulgated by the then Secretary of Labor and Policy Instructions No. 9. In Insular Bank of Asia and
America Employees' Union (IBAAEU) vs. Inciong, this Court's Second Division, speaking through former
Justice Makasiar, expressed the view and declared that the section and interpretative bulletin are null and
void, having been promulgated by the then Secretary of Labor in excess of his rule-making authority. The
questioned Section 2, Rule IV, Book III of the Integrated Rules and the Secretary's Policy Instruction No.
9 add another excluded group, namely, 'employees who are uniformly paid by the month'. While the
additional exclusion is only in the form of a presumption that all monthly paid employees have already
been paid holiday pay, it constitutes a taking away or a deprivation which must be in the law if it is to be
valid. An administrative interpretation which diminishes the benefits of labor more than what the statute
delimits or withholds is obviously ultra vires.
Ruled in favor of the petitioners. Presidential Executive Assistant and the Acting Secretary of
labor are set aside, and the award of the Arbitrator reinstated.

Princess C. Aragon
2011-0238
CHINA BANKING CORPORATION VS. BORROMEO

G.R. No. 156515
October 19, 2004
Petitioner: China Banking Corporation
Respondent: Mariano M. Borromeo
Ponente: J. Callejo, Sr.
Facts:
Respondent Mariano Borromeo was Assistant Vice-President of the Branch Banking Group of
China Banking Corporation for the Mindanao Area. Without authority from the Executive Committee or
Board of Directors of the bank, he approved several DAUD/BP (Drawn Against Uncollected Deposits/Bills
Purhcased) accommodations amounting to P2,441,375 in favour of Joel Maniwan. Such checks, which
are not sufficiently funded by cash, are generally not honoured by banks. This came to the knowledge of
the bank authorities. A memorandum was issued to the Mariano seeking clarification relative to the
matter. The respondent accepted full responsibility for committing an error in judgment and abuse of
discretion.
Mariano resigned from the Bank and apologized “for all the trouble I have caused because of the
Maniwan case.” The respondent, however, vehemently denied benefitting therefrom. His acts having
constituted violation of the Bank’s Code of Ethics, the respondent was directed to restitute the amount of
P1,507,736.79 representing 90% of the total loss of P1,675,263.10 incurred by the Bank. However, in
view of his resignation and considering the years of service in the Bank, the management earmarked only
P836,637.08 from the respondent’s total separation benefits or pay. The said amount would be released
upon recovery of the sums demanded from Maniwan in a civil case filed against him by the bank with the
RTC in Cagayan de Oro City. The respondent made a demand on the bank for the payment of his
separation pay and other benefits, but the bank maintained its position to withhold the sum of
P836,637.08. Thus, Mariano filed with the NLRC a complaint for payment of separation pay, mid-year
bonus, profit share and damages against the bank.
The Labor Arbiter ruled in favor of the bank. Respondent appealed to the NLRC but it affirmed in
toto the findings of the Labor Arbiter. The CA, however, alleging that respondent was denied his right to
due process, set aside the NLRC decision and ordered that the records of the case be remanded to the
Labor Arbiter for further hearings on the factual issues involved. The bank filed a motion for reconsidered
but denied the same. Hence, this petition.
Issue:
Whether or not the bank has the prerogative or right to impose on the respondent what it
considered the appropriate penalty under the circumstances pursuant to its company rules and
regulations.

Held:
The bank was left with no other course but to impose the ancillary penalty of restitution. It was
certainly within the bank’s prerogative to impose on the respondent what it considered the appropriate
penalty under the circumstances pursuant to its company rules and regulations.
The petitioner’s bank business is essentially imbued with public interest and owes great fidelity to
the public it deals with. It is expected to exercise the highest degree of diligence in the selection and
supervision of their employees. As a corollary, and like all other business enterprises, its prerogative to
discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules
and regulations must be respected. The law, in protecting the rights of labor, authorized neither
oppression nor self-destruction of an employer company which itself is possessed of rights that must be
entitled to recognition and respect.
Significantly, the respondent is not wholly deprived of his separation benefits. As the Labor
Arbiter stressed in his decision, “the separation benefits due the complainant were merely withheld. Even
the petitioner bank itself gives “the assurance that as soon as the bank has satisfied a judgment in the
civil case, the earmarked portion of his benefits will be released without delay.
The petition is granted. The decision of the CA is reversed and set aside. The Resolution of the
NLRC is reinstated.

Princess C. Aragon
2011-0238
GREGORIO ARANETA EMPLOYEES VS. ROLDAN

G.R. No. L-6846
July 20, 1955
Petitioner: Gregorio Araneta Employees' Union, etc., et al.
Respondent: Arsenio C. Roldan, et al.
Ponente: J. Jugo
Facts:
The Agricultural Division of the Gregorio Araneta, Inc., was established in 1947 with a capital of
P200,000. The total investment in that Division in 1953 was about P3,000,000. To reduce this
overcapitalization, the Board of Directors felt that it was necessary either to invite fresh capital from
outside or to adopt a retrenchment policy. When Heacock and Company refused the invitation to invest in
the enterprise, the Board took the alternative of retrenchment.
The Board required a reduction in the volume of business necessitating likewise a reduction of
personnel and caused the laying off of 17 employees. The selection of those to be laid off was made by a
technical man and approved by the Board. These employees were given one month separation pay,
except Nicolas Gonzalez who refused to receive it.
Issue:
Whether or not the retrenchment policy adopted by the company is an unfair labor practice.
Held:
No. The reorganization of the Agricultural Division was adopted by unanimous resolution of the
Board of Directors as a consequence of the retrenchment policy. Thus, the laying off of the 17 employees
was due to the retrenchment policy which the Company had to adopt in order to reduce the
overcapitalization and minimize expenses. The volume of business was considerably reduced. This was
adopted even before the petitioner, "Gregorio Araneta Employees' Union", was organized and;
consequently, it was never directed against the union or any of its members for union or labor activities.
The petition is denied, without pronouncement as to costs.

Princess C. Aragon
2011-0238
LAGATIC VS. NLRC

G.R. No. 121004
January 28, 1998
Petitioner: Romeo Lagatic
Respondent: National Labor Relations Commission, Cityland Development Corporation, Stephen Roxas,
Jesus Go, Grace Liuson, and Andrew Liuson
Ponente: J. Romero
Facts:
Petitioner Lagatic was employed by Cityland, first as a probationary sales agent, and later on as a
marketingspecialist. He was tasked with soliciting sales for thecompany, with the corresponding duties of
accepting call-ins, referrals, and making client calls and cold calls. Cold calls refer to the practice of
prospecting for clients through the telephone directory. Cityland, believing that the same is an effective
and cost-efficient method of finding clients, requires all its marketing specialists to make cold calls.
Likewise, in order to assess cold calls made by the sales staff, as well as to determine the results thereof,
Cityland requires the submission of daily progress reports on the same. Cityland issued a written
reprimand to petitioner for his failure to submit cold call reports for some time. This notwithstanding,
petitioner again failed to submit cold call reports. Petitioner was required to explain his inaction, with a
warning that further non-compliance would result in his termination from the company. In a reply,
petitioner claimed that the same was an honest omission brought about by his concentration on other
aspects of his job.Cityland found said excuse inadequate and suspended him for three days, with a
similar warning. Notwithstanding the aforesaid suspension and warning, petitioner again failed to submit
cold call reports. He was verbally reminded to submit the same and was even given up a due date to do
so. Instead of complying with said directive, petitioner wrote a note, "TO HELL WITH COLD CALLS!
WHO CARES?" and exhibited the same to his co-employees. Petitioner received a memorandum
requiring him to explain why Cityland should not make good its previous warning for his failure to submit
cold call reports, as well as for issuing the written statement aforementioned. He sent a letter-reply
alleging that his failure to submit cold callreports should trot be deemed as gross insubordination. He
denied any knowledge of the damaging statement allegedly made by him.Finding petitioner guilty of gross
insubordination, Cityland served a notice of dismissal upon him on February 26,1993. Aggrieved by such
dismissal, petitioner filed a complaint against Cityland for illegal dismissal, illegal deduction,
underpayment, overtime and rest day pay, damages and attorney's fees. The labor arbiter dismissed the
petition for lack of merit. On appeal, the same was affirmed by the NLRC; hence the present recourse.
Issue:
1. Whether or not NLRC gravely abused its discretion in not finding that petitioner was illegally
dismissed.
2. Whether or not the petitioner is entitled to amounts illegally deducted from his commissions, to
unpaid overtime, rest day and holiday premiums, to moral and exemplary damages, as well as attorney's
fees and costs.

Held:
1. To constitute a valid dismissal from employment, two requisites must be met, namely:(1) the
employee must be afforded due process, and(2) the dismissal must be for a valid cause. Petitioner loses
sight of the fact that "(e)xcept as provided for, or limited by, special laws, an employer is free to regulate,
according to his discretion and judgment, all aspects of employment."
Employers may, thus, make reasonable rules and regulations for the government of their
employees, and when employees, with knowledge of an established rule, enter the service, the rule
becomes a part of the contract of employment.
It is also generally recognized that company policies and regulations, unless shown to be grossly
oppressive or contrary to law, are generally valid and binding on the parties and must be complied with.
"Corollarily, an employee may be validly dismissed for violation of a reasonable company rule or
regulation adopted for the conduct of the company business. An employer cannot rationally be expected
to retain the employment of a person whose . . . lack of regard for his employer's rules . . .has so plainly
and completely been bared." Petitioner's continued infraction of company policy requiring cold callreports,
as evidenced by the instances of non-submissionof aforesaid reports, justifies his dismissal.
Moreover, petitioner made it worse for himself when he wrote the statement, "TO HELL WITH COLD
CALLS! WHOCARES?" When required to explain, he merely denied ally knowledge of the same.
Cityland, on the other hand,submitted the affidavits of his co-employees attesting to his authorship of the
same. Petitioner's only defense is denial. The rule, however, is that denial, if unsubstantiated by clear and
convincing evidence, is negative and self-serving evidence which has no weight in law.
Based on the foregoing, we find petitioner guilty of willful disobedience. Willful disobedience requires the
concurrence of at least two requisites:a. the employee's assailed conduct must have been willful or
intentional, the willfulness being characterized by a wrongful and perverse attitude; and b. the order
violated must have been reasonable, lawful, made known to the employee and must pertain to the duties
which he had been engaged to discharge.
2. With the finding that petitioner's dismissal was for a just and valid cause, his claims for moral
and exemplary damages , as well as attorney's fees, must fail. Also, petitioner failed to show his
entitlement to overtime and rest day pay due, to the lack of sufficient evidence as to the number of days
and hours when he rendered overtime and rest day work. Entitlement to overtime pay must first be
established by proof that said overtime work was actuallyperformed, before an employee may avail of
said benefit.
The Assailed Resolution is affirmed and the petition is dismissed for lack of merit. Costs against
the petitioner.

Princess C. Aragon
2011-0238
LUZON DEVELOPMENT BANK VS. ASSOCIATION OF LUZON DEVELOPMENT BANK, ET AL.

G.R. No. 120319
October 6, 1995
Petitioner: Luzon Development Bank
Respondent: Association of Luzon Development Bank Employees and Atty. Ester S. Garcia in her
capacity as VOLUNTARY ARBITRATOR
Ponente: J. Romero
Facts:
From a submission agreement of the Luzon Development Bank (LDB) and the Association
of Luzon Development Bank Employees (ALDBE) arose an arbitration case to resolve the following issue:
whether or not the company has violated the Collective Bargaining Agreement provision and the
Memorandum of Agreement dated April1994, on promotion. At a conference, the parties agreed on the
submission of their respective Position Papers on December 1-15, 1994. Atty. Ester S. Garcia,in her
capacity as Voluntary Arbitrator, received ALDBE's Position Paper on January 18, 1995. LDB, on the
other hand, failed to submit its Position Paper despite a letter from the Voluntary Arbitrator reminding
them to do so. As of May 23, 1995 no Position Paper had been filed by LDB. On May 24, 1995, without
LDB's Position Paper, the Voluntary Arbitrator rendered a decision disposing as follows:
WHEREFORE, finding is hereby made that the Bank has not adhered to the Collective
Bargaining Agreement provision nor the Memorandum of Agreement on promotion.
Hence, this petition for certiorari and prohibition seeking to set aside the decision of the
Voluntary Arbitrator and to prohibit her from enforcing the same.
Issue:
Which court has the jurisdiction for the appellate review of adjudications of all quasi-judicial
entities
Held:
Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of
Appeals shall exercise:
(B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or
awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions,
including the Securities and Exchange Commission, the Employees Compensation Commission and the
Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442,
as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph
(4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.

The voluntary arbitrator no less performs a state function pursuant to a governmental power delegated to
him under the provisions therefor in the Labor Code and he falls, therefore, within the contemplation of
the term "instrumentality" in the aforequoted Sec. 9 of B.P. 129. The fact that his functions and powers
are provided for in the Labor Code does not place him within the exceptions to said Sec. 9 since he is a
quasi-judicial instrumentality as contemplated therein
A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be
appealable to the Court of Appeals, in line with the procedure outlined in Revised Administrative Circular
No. 1-95, just like those of the quasi-judicial agencies, boards and commissions enumerated therein.
This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to
provide a uniform procedure for the appellate review of adjudications of all quasi-judicial entities not
expressly excepted from the coverage of Sec. 9 of B.P. 129 by either the Constitution or another statute.
In the same vein, it is worth mentioning that under Section 22 of Republic Act No. 876, also known as the
Arbitration Law, arbitration is deemed a special proceeding of which the court specified in the contract or
submission, or if none be specified, the Regional Trial Court for the province or city in which one of the
parties resides or is doing business, or in which the arbitration is held, shall have jurisdiction. A party to
the controversy may, at any time within one (1) month after an award is made, apply to the court having
jurisdiction for an order confirming the award and the court must grant such order unless the award is
vacated, modified or corrected.
In effect, this equates the award or decision of the voluntary arbitrator with that of the regional trial
court. Consequently, in a petition for certiorari from that award or decision, ACCORDINGLY, the Court
resolved to REFER this case to the Court of Appeals.

Princess C. Aragon
2011-0238
NATIONAL HOUSING CORPORATION VS. JUCO

G.R. No. L-64313
January 17, 1985
Petitioner: National Labor Relations Commission and National Housing Corporation
Respondent: Benjamin C. Juco
Ponente: J. GUTIERREZ, JR.
Facts:
Petitioner Benjamin C. Juco was hired as a project engineer of respondent National Housing
Corporation (NHC) from November 16, 1970 to May 14, 1975. On May 14, 1975, he was separated from
the service for having been implicated in a crime of theft and/or malversation of public funds.
On March 25, 1977, petitioner filed a complaint for illegal dismissal against the NHC with the
Department of Labor.
On September 17, 1977, the Labor Arbiter rendered a decision dismissing the complaint on the
ground that the NLRC had no jurisdiction over the case because NHC is a government-owned
corporation and jurisdiction over its employees is vested in the Civil Service Commision.
Petitioner then elevated the case to the NLRC which rendered a decision on December 28, 1982,
reversing the decision of the Labor Arbiter remanded the case to the labor arbiter for further proceedings.
NHC in turn appealed to the Supreme Court.
Issue:
Whether or not the employees of the National Housing Corporation, a GOCC without original
charter, is covered by the Labor Code or by laws and regulations governing the civil service.
Held:
Sec. 11, Art XII-B of the Constitution specifically provides: "The Civil Service embraces every
branch, agency, subdivision and instrumentality of the Government, including every government owned
and controlled corporation.
The inclusion of GOCC within the embrace of the civil service shows a deliberate effort at the
framers to plug an earlier loophole which allowed GOCC to avoid the full consequences of the civil
service system. All offices and firms of the government are covered. This constitutional provision has
been implemented by statute PD 807 is unequivocal that personnel of GOCC belong to the civil service
and subject to civil service requirements.
"Every" means each one of a group, without exception. This case refers to a GOCC. It does not
cover cases involving private firms taken over by the government in foreclosure or similar proceedings.
The petition is GRANTED. The questioned decision of the respondent National Labor Relations
Commission is SET ASIDE. The decision of the Labor Arbiter dismissing the case before it for lack of
jurisdiction is REINSTATED.

Princess C. Aragon
2011-0238
NATIONAL SERVICE CORPORATION VS. NLRC

G.R. No. L-69870
November 29, 1988
Petitioner: NATIONAL SERVICE CORPORATION (NASECO) AND ARTURO L. PEREZ
Respondent: THE HONORABLE THIRD DIVISION, NATIONAL LABOR RELATIONS COMMISSION,
MINISTRY OF LABOR AND EMPLOYMENT, MANILA AND EUGENIA C. CREDO
Ponente: J. Padilla
Facts:
Eugenio Credo was an employee of the National Service Corporation. She claims she was
illegally dismissed. NLRC ruled ordering her reinstatement. NASECO argues that NLRC has no
jurisdiction to order her reinstatement. NASECO as a government corporation by virtue of its being a
subsidiary of the NIDC, which is wholly owned by the Phil. National Bank which is in turn a GOCC, the
terms and conditions of employment of its employees are governed by the Civil Service Law citing
National Housing vs. Juco.
Issue:
Whether or not the employees of NASECO, a GOCC without original charter, are governed by the
Civil Service Law.
Held:
NO. The holding in NHC v Juco should not be given retroactive effect, that is to cases that arose
before its promulgation of Jan 17, 1985. To do otherwise would be oppressive to Credo and other
employees similarly situated because under the 1973 Constitution but prior to the ruling in NHC vs. Juco,
this court recognized the applicability of the Labor jurisdiction over disputes involving terms and
conditions of employment in GOCC's, among them NASECO. In the matter of coverage by the civil
service of GOCC, the 1987 Constitution starkly differs from the 1973 constitution where NHC vs. Juco
was based. It provides that the "civil service embraces all branches, subdivisions, instrumentalities, and
agencies of the Government, including government owned or controlled corporation with original charter."
Therefore by clear implication, the civil service does not include GOCC which are organized as
subsidiaries of GOCC under the general corporation law.

Princess C. Aragon
2011-0238
PAMPANGA BUS COMPANY VS PAMBUSCO EMPLOYEES UNION

G.R. No. 46739
September 23, 1939
Petitioner: Pampanga Bus Company, Inc.
Respondent: Pambusco Employees Union, Inc.
Ponente: J. Moran
Facts:
On May 31, 1939, the Court of Industrial Relations issued an order, directing the petitioner herein,
Pampanga Bus Company, Inc., to recruit from the respondent, Pambusco Employees' Union, Inc., new
employees or laborers it may need to replace members of the union who may be dismissed from the
service of the company, with the proviso that, if the union fails to provide employees possessing the
necessary qualifications, the company may employ any other persons it may desire. This order, in
substance and in effect, compels the company, against its will, to employ preferentially, in its service, the
members of the union.
Issue:
Whether or not the right of the employer to select its employees was violated.
Held:
Yes.The Supreme Court hold that the Court of Industrial Relations has no authority to issue such
compulsory order. The general right to make a contract in relation to one's business is an essential part of
the liberty of the citizens protected by the due-process clause of the Constitution. The right of the laborer
to sell his labor to such person as he may choose is, in its essence, the same as the right of an employer
to purchase labor from any person whom it chooses. The employer and the employee have thus an
equality of right guaranteed by the Constitution. "If the employer can compel the employee to work
against the latter's will, this is servitude. If the employee can compel the employer to give him work
against the employer's will, this is oppression." (Mills vs. United States Printing Co., 99 App. Div., 605; 91
N.Y.S., 185, 189-192.) chanrobles virtual law library.
Section of Commonwealth Act No. 213 confers upon labor organizations the right "to collective
bargaining with employers for the purpose of seeking better working and living conditions, fair wages, and
shorter working hours for laborers, and, in general, to promote the material, social and moral well-being of
their members." The term "collective bargaining" denotes, in common usage as well as in legal
terminology, negotiations looking toward a collective agreement. This provision in granting to labor unions
merely the right of collective bargaining, impliedly recognizes the employer's liberty to enter or not into
collective agreements with them. Indeed, we know of no provision of the law compelling such
agreements. Such a fundamental curtailment of freedom, if ever intended by law upon grounds of public
policy, should be effected in a manner that is beyond all possibility of doubt. The supreme mandates of
the Constitution should not be loosely brushed aside. As held by the Supreme Court of the United States
in Hitchman Coal & Co. vs. Mitchell (245 U. S., 229; 62 Law. ed., 260, 276):

. . . Whatever may be the advantages of "collective bargaining," it is not bargaining at all, in any just
sense, unless it is voluntary on both sides. The same liberty which enables men to form unions, and
through the union to enter into agreements with employers willing to agree, entitles other men to remain
independent of the union, and other employers to agree with them to employ no man who owes any
allegiance or obligation to the union. In the latter case, as in the former, the parties are entitled to be
protected by the law in the enjoyment of the benefits of any unlawful agreements they make. This court
repeatedly has held that the employer is as free to make non-membership in a union a condition or
employment, as the working man is free to join the union, and that this is a part of the constitutional rights
of personal liberty and private property, not to be taken away by legislation, unless through some proper
exercise of the paramount police power.
Thus considered, the order appealed from was reversed, with costs against the respondent
Pambusco Employees' Union, Inc.

Princess C. Aragon
2011-0238
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS VS. DRILON

G.R. No. 81958
June 30, 1988
Petitioner: Philippine Association of Service Exporters, Inc.
Respondent: Hon. Franklin M. Drilon as Secretary of Labor and Employment, and Tomas D. Achacoso,
as Administrator of the Philippine Overseas Employment Administration
Ponente: J. Sarmiento
Facts:
The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a firm
1
"engaged principally in the recruitment of Filipino workers, male and female, for overseas placement,"
challenges the Constitutional validity of Department Order No. 1, Series of 1988, of the Department of
Labor and Employment, in the character of "GUIDELINES GOVERNING THE TEMPORARY
SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," in this
petition for certiorari and prohibition. Specifically, the measure is assailed for "discrimination against
males or females;" 2 that it "does not apply to all Filipino workers but only to domestic helpers and
females with similar skills;" 3 and that it is violative of the right to travel. It is held likewise to be an invalid
exercise of the lawmaking power, police power being legislative, and not executive, in character.
Issue:
Whether or not the Department Order No. 1 is constitutional.
Held:
The court held that there has been valid classification, the Filipino female domestics working
abroad were in a class by themselves, because of the special risk to which their class was exposed.
There is no question that Order No.1 applies only to female contract workers but it does not thereby make
an undue discrimination between sexes. It is well settled that equality before the law under the
constitution does not import a perfect identity of rights among all men and women.
Department Order No. 1 does not impair the right to travel. The consequence of the deployment
ban has on the right to travel does not impair the right, as the right to travel is subjects among other
things, to the requirements of “public safety” as may be provided by law. Deployment ban of female
domestic helper is a valid exercise of police power.
Police power as been defined as the state authority to enact legislation that may interfere with
personal liberty or property in order to promote general welfare. Neither is there merit in the contention
that Department Order No. 1 constitutes an invalid exercise of legislative power as the labor code vest the
DOLE with rule making powers.
The petition is DISMISSED. No costs.

Princess C. Aragon
2011-0238
PHILIPPINE SHEET METAL WORKERS' UNION VS. CIR

G..R. No. L-2028
April 28, 1949
Petitioner: Philippine Sheet Metal Workers Union
Respondent: Court of Industrial Relations, Philippine Can Co., and Liberal Labor Union
Ponente: J. Reyes
Facts:
On March 1, 1985, the respondent Union filed a Notice of Strike with the Bureau of Labor
Relations (BLR) on ground of unfair labor practice consisting of alleged refusal to bargain, dismissal of
union officers/members; and coercing employees to retract their membership with the union and
restraining non-union members from joining the union.The said order was issued of said court involving
an industrial dispute between the respondent company (a corporation engaged in the manufacture of tin
plates, aluminum sheets, etc.) and its laborers some of whom belong to the Philippine Sheet Metal
Workers' Union (CLO) and some to the Liberal Labor Union.
The dispute was over certain demands made upon the company by the laborers, one of the
demands, being for the recall of eleven workers who had been laid off. Temporarily taken back on certain
conditions pending final determination of the controversy, these eleven workers were in the end ordered
retained in the decision handed down by the court on February 19, 1947. The petitioner tried to prove that
the 11 laborers were laid off by the respondent company due to their union activities.
On February 10, 1947, that is, nine days before the decision came down, filed a motion in the
case, asking for authority to lay off at least 15 workers in its can department on the ground that the
installation and operation of nine new labor-saving machines in said department had rendered the
services of the said workers unnecessary.
Issue:
Whether or not the firing of the laborers due to their union activities is valid?
Held:
Yes. The right to reduce personnel should, of course, not be abused. It should not be made a
pretext for easing out laborers on account of their union activities. But neither should it be denied when it
is shows that they are not discharging their duties in a manner consistent with good discipline and the
efficient operation of an industrial enterprise.
The petitioner contends that the order complained of was made with grave abuse of discretion
and in excess of jurisdiction in that it is contrary to the pronouncement made by the lower court in its
decision in the main case where it disapproved of the dismissal of eleven workers "with whom the
management is displeased due to their union activities." It appears, however, that the pronouncement
was made upon a distinct set of facts, which are different from those found by the court in connection with

the present incident, and that very decision, in ordering the reinstatement of the eleven laborers, qualifies
the order by saying that those laborers are to be retained only "until the occurrence of facts that may give
rise to a just cause of their laying off or dismissal, or there is evidence of sufficient weight to convince the
Court that their conduct is not satisfactory."
After a careful review of the record, the court find that the Court of Industrial Relations has neither
exceeded its jurisdiction nor committed grave abuse of discretion in rendering the order complained of.
The petition for certiorari is, therefore, denied, but without costs against the petitioner for the reasons
stated in its motion to litigate as pauper.

Princess C. Aragon
2011-0238
RIZAL EMPIRE INSURANCE GROUP VS. NLRC

G.R. No. 73140
May 29, 1987
Petitioner: Rizal Empire Insurance Group, and/or Sergio Corpus
Respondent: National Labor Relations Commission, Teodorico L. Ruiz, as Labor Arbiter and Rogelio R.
Coria
Ponente: J. Paras
Facts:
In August, 1977, herein private respondent Rogelio R. Coria was hired by herein petitioner Rizal
Empire Insurance Group as a casual employee with a salary of P10.00 a day. On January 1, 1978, he
was made a regular employee, having been appointed as clerk-typist, with a monthly salary of P300.00.
Being a permanent employee, he was furnished a copy of petitioner company's "General Information,
Office Behavior and Other Rules and Regulations." In the same year, without change in his position-
designation, he was transferred to the Claims Department and his salary was increased to P450.00 a
month. In 1980, he was transferred to the Underwriting Department and his salary was increased to
P580.00 a month plus cost of living allowance, until he was transferred to the Fire Department as filing
clerk. In July, 1983, he was made an inspector of the Fire Division with a monthly salary of P685.00 plus
allowances and other benefits.
On October 15, 1983, private respondent Rogelio R. Coria was dismissed from work, allegedly,
on the grounds of tardiness and unexcused absences. Accordingly, he filed a complaint with the Ministry
of Labor and Employment (MOLE), and in a Decision dated March 14, 1985 (Record, pp. 80-87), Labor
Arbiter Teodorico L. Ruiz reinstated him to his position with back wages. Petitioner filed an appeal with
the National labor Relations Commission (NLRC) but, in a Resolution dated November 15, 1985 (Ibid, pp.
31-32), the appeal was dismissed on the ground that the same had been filed out of time. Hence, the
instant petition.
Issue:
Whether or not NLRC committed a grave abuse of discretion amounting to lack of jurisdiction in
dismissing petitioner’s appeal on a technicality.
Held:
Rule VIII of the Revised Rules of the National Labor Relations Commission on appeal, provides:
SECTION 1. (a) Appeal. — Decision or orders of a labor Arbiter shall be final and
executory unless appealed to the Commission by any or both of the parties within
ten (10) calendar days from receipt of notice thereof.
SECTION 6. No extension of period. — No motion or request for extension of the

period within which to perfect an appeal shall be entertained.
The record shows that the employer (petitioner herein) received a copy of the decision of the

Labor Arbiter on April 1, 1985. It filed a Motion for Extension of Time to File Memorandum of Appeal on
April 11, 1985 and filed the Memorandum of Appeal on April 22, 1985. Pursuant to the "no extension
policy" of the National Labor Relations Commission, aforesaid motion for extension of time was denied in
its resolution dated November 15, 1985 and the appeal was dismissed for having been filed out of time.
The Revised Rules of the National Labor Relations Commission are clear and explicit and leave
no room for interpretation. Moreover, it is an elementary rule in administrative law that administrative
regulations and policies enacted by administrative bodies to interpret the law which they are entrusted to
enforce, have the force of law, and are entitled to great respect (Espanol v. Philippine Veterans
Administration, 137 SCRA 314 [1985]).
Under the above-quoted provisions of the Revised NLRC Rules, the decision appealed from in
this case has become final and executory and can no longer be subject to appeal.
Even on the merits, the ruling of the Labor Arbiter appears to be correct; the consistent
promotions in rank and salary of the private respondent indicate he must have been a highly efficient
worker, who should be retained despite occasional lapses in punctuality and attendance. Perfection
cannot after all be demanded.
The petition is DISMISSED.

Princess C. Aragon
2011-0238
TIONG KING VS. CIR

G.R. No. L-3587
December 21, 1951
Petitioner: Tiong King
Respondent: Court of Industrial Relations and The National Tailor's Association
Ponente: J. Paras
Facts:
Gaw Pun So owned and operated a tailor shop known as the Army Shirt Factory, located in his
own house at Nos. 231-245 Soler Street, Manila. In January, 1948, he had a labor dispute with his
personnel and, pending the case in the Court of Industrial Relations, Gaw Pun So, irked and worried by
the incidents of litigation, thought of dissolving the business and selling the sewing machines. Tiong King
offered to take over the business by leasing the place and the sewing machines. The transfer was put in
writing. Tiong King continued the Army Shirt Factory from the month of February with the same
employees had by Gaw Pun So. This transfer was known to the personnel, so much so that the latter, as
petitioner in the pending dispute in the Court of Industrial Relations, prayed that Tiong King be included
as a respondent. In due time, the National Tailors Association entered that all cases were terminated
against the respondents. This agreement was duly approved by the Court of Industrial Relations.
On April 27, 1948, Tiong King filed a petition in the Court of Industrial Relations Case No. 117-V-
3, alleging that since he operated his shop in February, 1948, he had continually suffered losses; that as
there remained only very little of the capital originally invested, and that he was definitely closing the shop
on May 30, 1948. Tiong King accordingly prayed that he be allowed to close his tailor shop and business
from six o'clock in the afternoon of May 29, 1948. On May 29, 1948, Presiding Judge Arsenio C. Roldan
of the Court of Industrial Relations issued an order enjoining Tiong King not to close his factory and not to
dismiss, suspend or lay off any laborer or employee without previous authority of said court.
Upon petitioner for reconsideration filed by counsel for Tiong King, the Court of Industrial
Relations promulgated a resolution dated May 27, 1949, allowing Tiong King to close his business and
shop, subject to the condition that, upon reopening the same, his former personnel would be taken back.
Upon motion for reconsideration filed by counsel for the National Tailor's Association, the Court of
Industrial Relations, promulgated a resolution dated October 31, 1949, reaffirming their stand on the
resolution of the Court of Industrial Relations under date of July 1, 1949.
The present appeal by certiorari was taken by Tiong King against the last resolution of the Court
of Industrial Relations.
Issue:
Whether or not he was the owner or operator thereof and had the right to file the petition in the
Court of Industrial Relations to close the tailor’s shop.

Held:
Upon this point, it is only sufficient to recall that the National Tailors Association entered into a
stipulation with Tiong King alone whereby they agreed that all cases against the former owners of the
business were terminated. That Tiong King was conceded to be the owner and operator of the army shirt
factory at the time his petition to close it was filed, is conclusively borne out by the fact that Presiding
Judge Roldan in his decision of January 13, 1949, ordered Tiong King, and not Gaw Pun So, to pay the
salaries and wages of the personnel.
It is contended, however, that "If at all the court has approved of the agreement between the
National Tailors' Association and Mr. Tiong King it was because — 'this arrangement is a very good
solution to the present conflict as it is advantageous not only to the union but also the management, and,
is in consonance with the contract entered into between the management and the new workers." This
contention is followed with the remark that the approval of said agreement did not include a finding that
Tiong King was either the owner or the lessee of the Army Shirt Factory. We are unable to agree. In
entering into the agreement with the National Tailors Association, Tiong King acted in his own behalf,
regardless of the former owners of the business. Indeed, it was covenanted that all the cases against the
latter were deemed terminated. Considerations of fair play and justice demand that Tiong King be given
the full legal effect of said agreement which before the sanction of the Court of Industrial Relations.
There being no question that Tiong King's capital invested in the Army Shirt Factory was almost
exhausted at the time of the filing of his petition to close it, said petition must necessity be granted. It is
admitted by all the Judges of the Court of Industrial Relations that an employer may close his business,
provided the same is done in good faith and is due beyond his control. To rule otherwise, would be
oppressive and inhuman.
The court reversed the resolution of the Court of Industrial Relations dated October 31, 1949, and
affirmed the resolution of said court dated May 27, 1949.

Germarie I. Balberan
2011-0076
Case Title: Eastern Shipping Lines vs. POEA, Minister of Labor and Employment
G.R. No.: G.R. No. 76633
Date: October 18, 1988
Petitioner: Eastern Shipping Lines
Respondent: Philippine Overseas Employment Administration, Minister of Labor and Employment
Ponente: Cruz, J.
Facts:
Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accidentin
Tokyo, Japan on March 15, 1985.His widow sued for damages under Executive Order No. 797 and
Memorandum Circular No. 2of the POEA.The petitioner, as owner of the vessel, argued that the
complaint was cognizable not by thePOEA but by the Social Security System and should have been filed
against the State Fund Insurance.The POEA nevertheless assumed jurisdiction and after considering the
position papers of theparties ruled in favor of the complainant.The petition is DISMISSED, with costs
against the petitioner. The temporary restraining orderdated December 10, 1986 is hereby LIFTED. It is
so ordered.
Issue:
1. Whether or not the POEA had jurisdiction over the case as the husband was not an
overseasworker.
2. Whether or not the validity of Memorandum Circular No. 2 itself as violative of the principleof
non-delegation of legislative power.
Held:
1. Yes. The Philippine Overseas Employment Administration was created under Executive
OrderNo. 797, promulgated on May 1, 1982, to promote and monitor the overseas employment of
Filipinos and to protect their rights. It replaced the National Seamen Board created earlier underArticle 20
of the Labor Code in 1974. Under Section 4(a) of the said executive order, the POEAis vested with
"original and exclusive jurisdiction over all cases, including money claims,involving employee-employer
relations arising out of or by virtue of any law or contractinvolving Filipino contract workers, including
seamen." These cases, according to the 1985Rules and Regulations on Overseas Employment issued by
the POEA, include, “claims for death,disability and other benefits” arising out of such employment.
The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made
bythe POEA pursuant to its Memorandum Circular No. 2, which became effective on February 1,1984.
This circular prescribed a standard contract to be adopted by both foreign and domesticshipping
companies in the hiring of Filipino seamen for overseas employment.

2. No. Memorandum Circular No. 2 is an administrative regulation. The model contractprescribed

thereby has been applied in a significant number of the cases without challenge by theemployer. The
power of the POEA (and before it the National Seamen Board) in requiring themodel contract is not
unlimited as there is a sufficient standard guiding the delegate in theexercise of the said authority. That
standard is discoverable in the executive order itself which, increating the Philippine Overseas
Employment Administration, mandated it to protect the rightsof overseas Filipino workers to "fair and
equitable employment practices

2011-0076
Case Title: PACIFIC ASIA OVERSEAS SHIPPING CORP. VS NLRC
G.R. No.: G.R. No. 76595

Date: May 6, 1988
Petitioner: Pacific Asia Overseas Shipping Corporation
Respondent: National Labor Relations Commission
Ponente: Feliciano, J.:
Facts:
Pacific Asia Overseas Shipping Corporation (Pascor), petitioner seeks the annulment and setting
aside of the Resolutions of the public respondent National Labor Relations Commission (NLRC) dated 14
August 1986 and 19 November 1986, denying Pascor's appeal for having been filed out of time and
denying its Motion for Reconsideration, respectively. Private respondent Teodoro Rances sometime in
March 1984, was engaged by petitioner Pascor as Radio Operator of a vessel belonging to Pascor's
foreign principal, the Gulf-East Ship Management Limited. Four (4) months later, and after having been
transferred from one vessel to another four times for misbehavior and inability to get along with officers
and crew members of each of the vessels, the foreign principal terminated the services of private
respondent Rances citing the latter's poor and incorrigible work attitude and incitement of others to
insubordination. Petitioner Pascor filed a complaint against private respondent with the Philippine
Overseas Employment Administration (POEA) for acts unbecoming a marine officer and for, character
assassination.
On 4 September 1985, the POEA found private respondent liable for inciting another officer or
seaman to insubordination and challenging a superior officer to a fist fight and imposed six (6) months
suspension for each offense or a total of twelve (12) months suspension, with a warning that commission
of the same or similar offense in the future would be met with a stiffer disciplinary sanction. The POEA
decision passed over sub silentio the counterclaim of private respondent. In its answer filed on 11
December 1985, petitioner Pascor made four principal arguments: that the copy of the Dubai decision
relied upon by private respondent could not be considered as evidence, not having been properly
authenticated; that Pascor was not a party to the Dubai court proceedings; that the POEA had no
jurisdiction over cases for the enforcement of foreign judgments; and that the claim had already been
resolved in POEA, having been there dismissed as a counterclaim. In a decision dated 14 April 1986, the
POEA held petitioner Pascor liable to pay private respondent Rances the amount of US$ 1,500.00 "at the
prevailing rate of exchange at the time of payment." This decision was served on petitioner's counsel on
18 April 1986, which counsel filed a 'Memorandum on Appeal and/or Motion for Reconsideration" on 29
April 1986.
Issue:
Whether or not POEA denial of petitioner's appeal and Motion for Reconsideration is within its
jurisdiction in rendering decision of its Orders dated 14 August and 19 November 1986?

Held:
The court conclude that the POEA acted without or in excess of jurisdiction in rendering its
Decision dated 14 April 1986 and its Order dated 20 May 1986, and that public respondent NLRC
similarly acted without or in excess of jurisdiction in rendering its Orders dated 14 August 1986 and 19
November 1986 denying petitioner's appeal and Motion for Reconsideration. This, however, is without
prejudice to the right of respondent Rances to initiate another proceeding before the POEA against
petitioner Pascor, this time on the basis alone of the contract of employment which existed between said
respondent and petitioner or petitioner's foreign principal; there, respondent Rances may seek to show
that he is still entitled to the allotments which he claims were not remitted by his employer to his wife.
ACCORDINGLY, the Petition for certiorari is GRANTED and the Resolutions of public respondent
NLRC dated 14 August 1986 and 19 November 1986 are hereby NULLIFIED and SET ASIDE. The
Temporary Restraining Order issued by this Court on 8 December 1986 is hereby made PERCENT. No
pronouncement as to costs.

2011-0076
Case Title: PHILSA INTERNATIONAL PLACEMENT and SERVICES CORPORATION vs.

THE HON. SECRETARY OF LABOR AND EMPLOYMENT
G.R. No.: G.R. No. 103144
Date: April 4, 2001
Petitioner: Philsa International Placement And Services Corporation
Respondent: The Hon. Secretary Of Labor And Employment
Ponente: Gonzaga-Reyes, J
Facts:
Philsa is a domestic corporation engaged in the recruitment of workers for overseas employment.
Sometime in January 1985, private respondents, who were recruited by petitioner for employment in
Saudi Arabia, were required to pay placement fees in the amount of P5,000.00 for private respondent
Rodrigo L. Mikin and P6,500.00 each for private respondents Vivencio A. de Mesa and Cedric P. Leyson.
After the execution of their respective work contracts, private respondents left for Saudi Arabia on
January 29, 1985. They then began work for Al-Hejailan Consultants A/E, the foreign principal of
petitioner. While in Saudi Arabia, private respondents were allegedly made to sign a second contract
which changed some of the provisions of their original contract resulting in the reduction of some of their
benefits and privileges. They were again allegedly forced by their foreign employer to sign a third contract
which increased their work hours from 48 hours to 60 hours a week without any corresponding increase
in their basic monthly salary. When they refused to sign this third contract, the services of private
respondents were terminated by Al-Hejailan and they were repatriated to the Philippines.
Upon their arrival in the Philippines, private respondents demanded from petitioner Philsa the
return of their placement fees and for the payment of their salaries for the unexpired portion of their
contract. When petitioner refused, they filed a case before the POEA against petitioner Philsa and its
foreign principal, Al-Hejailan. On the aspects of the case involving money claims arising from the
employer-employee relations and illegal dismissal, the POEA rendered a decision dated August 31, 1988
ordering respondent PHILSA to pay complainants, jointly and severally with its principal Al-Hejailan.
In a decision dated July 26, 1989 , the NLRC modified the appealed decision of the POEA
Adjudication Office by deleting the award of salary deductions and differentials. The awards to private
respondents were deleted by the NLRC considering that these were not raised in the complaint filed by
private respondents. Private respondents then elevated the July 26, 1989 decision of the NLRC to the
Supreme Court in a petition for review for certiorari where it was docketed as G.R. No. 89089. However,
in a Resolution dated October 25, 1989, the petition was dismissed outright for "insufficiency in form and
substance, having failed to comply with the Rules of Court and Circular No. 1-88 requiring submission of
a certified true copy of the questioned resolution dated August 23, 1989.

Almost simultaneous with the promulgation of the August 31, 1988 decision of the POEA on
private respondents' money claims, the POEA issued a separate Order dated August 29, 1988 resolving
the recruitment violations aspect of private respondents' complaint. In this Order, the POEA found
petitioner guilty of illegal exaction, contract substitution, and unlawful deduction. Under the POEA Rules
and Regulations, the decision of the POEA thru the LRO suspending or canceling a license or authority to
act as a recruitment agency may be appealed to the Ministry (now Department) of Labor and
Employment. Accordingly, after the denial of its motion for reconsideration, petitioner appealed the
August 31, 1988 Order to the Secretary of Labor and Employment. However, in an Order dated
September 13, 1991, public respondent Secretary of Labor and Employment affirmed in toto the assailed
Order. Petitioner filed a Motion for Reconsideration but this was likewise denied in an Order dated
November 25, 1991.
Issue:
1. Whether or not the public respondent has acted without or in excess of jurisdiction, or with
grave abuse of discretion in holding petitioner liable for illegal deductions/withholding of salaries for the
supreme court itself has already absolved petitioner from this charge.
2. Whether or not the petitioner can be held liable for illegal exaction as POEA Memorandum
Circular No. 11, Series of 1983, which enumerated the allowable fees which may be collected from
applicants, is void for lack of publication.
Held:
1. Petitioner is correct in stating that the July 26, 1989 Decision of the NLRC has attained finality
by reason of the dismissal of the petition for certiorari assailing the same. However, the said NLRC
Decision dealt only with the money claims of private respondents arising from employer-employee
relations and illegal dismissal and as such, it is only for the payment of the said money claims that
petitioner is absolved. The administrative sanctions, which are distinct and separate from the money
claims of private respondents, may still be properly imposed by the POEA. In fact, in the August 31, 1988
Decision of the POEA dealing with the money claims of private respondents, the POEA Adjudication
Office precisely declared that "respondent's liability for said money claims is without prejudice to and
independent of its liabilities for the recruitment violations aspect of the case which is the subject of a
separate Order."
The fact that petitioner has been absolved by final judgment for the payment of the money claim
to private respondent de Mesa does not mean that it is likewise absolved from the administrative
sanctions which may be imposed as a result of the unlawful deduction or withholding of private
respondents' salary. The POEA thus committed no grave abuse of discretion in finding petitioner
administratively liable of one count of unlawful deduction/withholding of salary.

2. No. The administrative circular under consideration is one of those issuances which should be
published for its effectivity, since its purpose is to enforce and implement an existing law pursuant to a
valid delegation. Considering that POEA Administrative Circular No. 2, Series of 1983 has not as yet
been published or filed with the National Administrative Register, the same is ineffective and may not be
enforced. The fact that the said circular is addressed only to a specified group, namely private
employment agencies or authority holders, does not take it away from the ambit of our ruling in Tañada
vs. Tuvera. In the case of Phil. Association of Service Exporters vs. Torres, the administrative circulars
questioned therein were addressed to an even smaller group, namely Philippine and Hong Kong
agencies engaged in the recruitment of workers for Hong Kong, and still the Court ruled therein that, for
lack of proper publication, the said circulars may not be enforced or implemented.
Our pronouncement in Tañada vs. Tuvera is clear and categorical. Administrative rules and
regulations must be published if their purpose is to enforce or implement existing law pursuant to a valid
delegation. The only exceptions are interpretative regulations, those merely internal in nature, or those
so-called letters of instructions issued by administrative superiors concerning the rules and guidelines to
be followed by their subordinates in the performance of their duties. Administrative Circular No. 2, Series
of 1983 has not been shown to fall under any of these exceptions.

2011-0076
Case Title: Eastern Shipping Lines vs. POEA

G.R. No.: G.R. No. 76633
Respondent: Philippine Overseas Employment Administration
Ponente: Cruz, J.
Facts:
Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in
Tokyo, Japan on March 15, 1985. His widow sued for damages under Executive Order No. 797 and
complaint was cognizable not by the POEA but by the Social Security System and should have been filed
against the State Fund Insurance.The POEA nevertheless assumed jurisdiction and after considering the
position papers of the parties ruled in favor of the complainant.The petition is DISMISSED, with costs
so ordered.
Issue:
overseasworker.
Held:
1. No. Memorandum Circular No. 2 is an administrative regulation. The model contract prescribed
thereby has been applied in a significant number of the cases without challenge by the employer. The
power of the POEA (and before it the National Seamen Board) in requiring the model contract is not
unlimited as there is a sufficient standard guiding the delegate in the exercise of the said authority. That
Filipinos and to protect their rights. It replaced the National Seamen Board created earlier under Article 20
of the Labor Code in 1974. Under Section 4(a) of the said executive order, the POEA is vested with
"original and exclusive jurisdiction over all cases, including money claims, involving employee-employer

seamen." These cases, according to the 1985 Rules and Regulations on Overseas Employment
issued by the POEA, include, “claims for death,disability and other benefits” arising out of such
employment. The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made
by the POEA pursuant to its Memorandum Circular No. 2, which became effective on February 1,1984.
This circular prescribed a standard contract to be adopted by both foreign and domestic shipping

2011-0076
Case Title: DITAN VS. POEA ADMINISTRATOR

G.R. No.: G.R. No. 79560
Petitioner: Andres E. Ditan
Respondent: Philippine Overseas Employment Administration Administrator, National Labor Relations
Commission, Asiaworld Recruitment, Inc., And/Or Intraco Sales Corporation,
Ponente: Cruz, J
Facts:
Andres E. Ditan was recruited by private respondent Intraco Sales Corporation, through its local
agent, Asia World, the other private respondent, to work in Angola as a welding supervisor. The contract
was for nine months, at a monthly salary of US$1,100.00 or US$275.00 weekly, and contained the
required standard stipulations for the protection of our overseas workers. Arriving on November 30, 1984,
in Luanda, capital of Angola, the petitioner was assigned as an ordinary welder in the INTRACO central
maintenance shop from December 2 to 25, 1984. On December 26, 1984, he was informed, to his
distress that would be transferred to Kafunfo, some 350 kilometers east of Luanda. This was the place
where, earlier that year, the rebels had attacked and kidnapped expatriate workers, killing two Filipinos in
the raid. Naturally, Ditan was reluctant to go. However, he was assured by the INTRACO manager that
Kafunfo was safe and adequately protected by government troops; moreover, he was told he would be
sent home if he refused the new assignment. In the end, with much misgiving, he relented and agreed.
On December 29, 1984, his fears were confirmed. The Unita rebels attacked the diamond mining site
where Ditan was working and took him and sixteen other Filipino hostages, along with other foreign
workers. The rebels and their captives walked through jungle terrain for 31 days to the Unita stronghold
near the Namibian border. They trekked for almost a thousand kilometers. They subsisted on meager
fare. Some of them had diarrhea. Their feet were blistered. It was only on March 16, 1985, that the
hostages were finally released after the intercession of their governments and the International Red
Cross. Six days later, Ditan and the other Filipino hostages were back in the Philippines. The repatriated
workers had been assured by INTRACO that they would be given priority in re-employment abroad, and
eventually eleven of them were taken back. Ditan having been excluded, he filed in June 1985 a
complaint against the private respondents for breach of contract and various other claims. Specifically, he
sought the amount of US$4,675.00, representing his salaries for the unexpired 17 weeks of his contract;
US$25,000.00 as war risk bonus; US$2,196.50 as the value of his lost belongings; US$1,100 for unpaid
vacation leave; and moral and exemplary damages in the sum of US$50,000.00, plus attorney's fees.
All these claims were dismissed by POEA Administrator Tomas D. Achacoso in a decision dated
January 27, 1987. 2 This was affirmed in toto by respondent NLRC in a resolution dated July 14, 1987, 3
which is now being challenged in this petition.
Issue:
Whether or not this case is within NLRC jurisdictiona and if Ditan is entitled to any relief?

Held:
Yes. The fact that stands out most prominently in the record is the risk to which the petitioner was
subjected when he was assigned, after his reluctant consent, to the rebel-infested region of Kafunfo. This
was a dangerous area. The petitioner had gone to that foreign land in search of a better life that he could
share with his loved ones after his stint abroad. That choice would have required him to come home
empty-handed to the disappointment of an expectant family. It is not explained why the petitioner was not
paid for the unexpired portion of his contract which had 17 more weeks to go. The hostages were
immediately repatriated after their release, presumably so they could recover from their ordeal. The
promise of INTRACO was that they would be given priority in re-employment should their services be
needed. In the particular case of the petitioner, the promise was not fulfilled. It would seem that his work
was terminated, and not again required, because it was really intended all along to assign him only to
Kafunfo.
The private respondents stress that the contract Ditan entered into called for his employment in
Angola, without indication of any particular place of assignment in the country. This meant he agreed to
be assigned to work anywhere in that country, including Kafunfo. When INTRACO assigned Ditan to that
place in the regular course of its business, it was merely exercising its rights under the employment
contract that Ditan had freely entered into. Hence, it is argued, he cannot now complain that there was a
breach of that contract for which he is entitled to monetary redress. The private respondents also reject
the claim for war risk bonus and point out that POEA Memorandum Circular No. 4, issued pursuant to the
mandatory war risk coverage provision in Section 2, Rule VI, of the POEA Rules and Regulations on
Overseas Employment, categorizing Angola as a war risk took effect only on February 6, 1985"after the
petitioner's deployment to Angola on November 27, 1984." Consequently, the stipulation could not be
applied to the petitioner as it was not supposed to have a retroactive effect.
The paramount duty of this Court is to render justice through law. The law in this case allows two
opposite interpretations, one strictly in favor of the employers and the other liberally in favor of the worker.
The choice is obvious. We find, considering the totality of the circumstances attending this case, that the
petitioner is entitled to relief. The petitioner went to Angola prepared to work as he had promised in
accordance with the employment contract he had entered into in good faith with the private respondents.
Over his objection, he was sent to a dangerous assignment and as he feared was taken hostage in a
rebel attack that prevented him from fulfilling his contract while in captivity. Upon his release, he was
immediately sent home and was not paid the salary corresponding to the unexpired portion of his
contract. He was immediately repatriated with the promise that he would be given priority in re-
employment, which never came. To rub salt on the wound, many of his co-hostages were re-employed as
promised. The petitioner was left only with a bleak experience and nothing to show for it except dashed
hopes and a sense of rejection.
Under the policy of social justice, the law bends over backward to accommodate the interests of
the working class on the humane justification that those with less privileges in life should have more
privileges in law.
WHEREFORE, the challenged resolution of the NLRC is hereby MODIFIED. The private
respondents are hereby DIRECTED jointly and severally to pay the petitioner: a) the current equivalent in
Philippine pesos of US$4,675.00, representing his unpaid salaries for the balance of the contract term; b)
nominal damages in the amount of P20,000.00; and c) 10% attorney's fees. No costs.

2011-0076
Case Title: TIERRA INTERNATIONAL CONSTRUCTION CORP V NLRC (OLIVAR)

G.R. No.: G.R. No. 101825
Date: April 2, 1996
Petitioner: Tierra International Construction Corp
Respondent: National Labor Relations Commission (OLIVAR)
Ponente: Mendoza, J.:
Facts:
March 7 1984: private respondent Isidro P. Olivar was hired by FEBROE, a foreign shipping
company, through its local agent Tierra International Construction Corporation, to work as shift supervisor
in its Base Operating Support (BOS) project for the U.S. Navy in the British Indian Ocean Territory of
Diego Garcia, for a period of one (1) year with a basic monthly salary of US $680.00. Olivar’s employment
contract was renewed in 1985; the last renewal was on 8 May 1986. But on 1 October 1986, he was
dismissed from employment, and subsequently repatriated to the Philippines. Olivar alleged that he was a
victim of improper termination of employment thru gradual and systematic removal of high salaried
employees.
FEBROE averred that in July and August 1986, its management undertook a comprehensive
audit and evaluation of its entire work force to promote economy, efficiency and profitability in its
operations, and to reduce personnel whose positions were considered redundant or surplusage and/or to
re-assign personnel to other available useful positions. One of the positions listed for abolition was the
position of the olivar as "13401 — Supervisor, Technical. POEA held that the termination was for
authorized cause. POEA then ordered Tierra and FEBROE to pay Olivar his separation pay. Tierra
contended that the employment contract does not provide for separation pay in case of termination based
on redundancy or reduction of force due to a decrease in volume or scope of work. NLRC reversed the
decision of POEA and ordered the company to pay Olivar corresponding to the unexpired portion of his
contract.
Issue:
Whether or not termination of Olivar is illegal and Olivar is entitled to separation pay?
Held:
. YES, the termination was for a valid cause. In redundancy, what is looked into is the position
itself, the nature of the services performed by the employee and the necessity of such position.
Termination of an employee's services because of a reduction of work force due to a decrease in the
scope or volume of work of the employer is synonymous to, or a shade of termination because of
redundancy under Article 283 of the Labor Code. Redundancy exists where the services of an employee
are in excess of what is reasonably demanded by the actual requirements of the enterprise. A position is
redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a
number of factors, such as over-hiring of workers, decreased volume of business, or dropping of a
particular product line or service activity previously manufactured or undertaken by the enterprise.
Olivar received his notice of termination advising him that his position will be deleted because of a
reduction of force due to a decrease in scope of work assigned. 28 other positions were also abolished.
Olivar was not singled out and that his termination was not arbitrary or malicious on the part of the

employer. The law does not make any distinction between a technical and a non-technical position for
purposes of determining the validity of termination due to redundancy. Neither does the law nor the
stipulations of the employment contract here involved require that junior employees should first be
terminated (in answer to NLRC’s reasoning that junior employees should be terminated first before the
technical and senior positions).
YES, Olivar is entitled to separation pay. Not only are existing laws read into contracts in order to
fix the obligations as between the parties, but the reservation of essential attributes of sovereign power is
also read into contracts as a postulate of the legal order. There is no mention of an award of separation
pay in the contract between the parties. HOWEVER, Tierra admits that Article 283 of the Labor Code
governs its employer-employee relationship with the private respondent as the same is deemed written in
the employment contract signed by the parties. Thus, although a contract is the law between the parties,
thereto, this provisions of law which regulate such contracts are deemed included and shall limit and
govern the relations between the parties.
Decision of the NLRC is reversed and set aside, and the decision of the POEA is revived. No
pronouncements as to costs.

2011-0076
Case Title: MILLARES VS. NLRC

G.R. No.: G.R. No. 110524
Date: July 29, 2002
Petitioner: Douglas Millares and Rogelio Lagda
Respondent: National Labor Relations Commission, Trans-Global Maritime Agency, Inc. and
Esso International Shipping Co., Ltd.
Ponente: Kapunan, J.
Facts:
Douglas Millares was employed by ESSO International through its local manning agency, Trans-
Global, in 1968 as a machinist. In 1975, he was promoted as Chief Engineer which position he occupied
until he opted to retire in 1989. In 1989, petitioner Millares filed a leave of absence and applied for
optional retirement plan under the Consecutive Enlistment Incentive Plan (CEIP) considering that he had
already rendered more than twenty years of continuous service. Esso International denied Millares’
request for optional retirement on the following grounds, to wit:
1) he was employed on a contractual basis
2) his contract of enlistment (COE) did not provide for retirement before the age of sixty years;
3) he did not comply with the requirement for claiming benefits under the CEIP, i.e., to submit a written
advice to the company of his intention to terminate his employment within thirty days from his last
disembarkation date.
Subsequently, after failing to return to work after the expiration of his leave of absence, Millares
was dropped from the roster of crew members effective September 1, 1989. On the other hand, petitioner
Lagda was employed by Esso International as wiper/oiler in 1969. He was promoted as Chief Engineer in
1980, a position he continued to occupy until his last COE expired in 1989. In 1989, Lagda likewise filed a
leave of absence and applied to avail of the optional early retirement plan in view of his twenty years
continuous service in the company. Trans-global similarly denied Lagda’s request for availment of the
optional early retirement scheme on the same grounds upon which Millares request was denied. Unable
to return for contractual sea service after his leave of absence expire, Lagda was also dropped from the
roster of crew members effective September 1, 1989.
Millares and Lagda filed a complaint-affidavit for illegal dismissal and non-payment of employee
benefits against private respondents Esso International and Trans-Global before the POEA. The POEA
rendered a decision dismissing the complaint for lack of merit. On appeal, NLRC affirmed the decision of
the POEA dismissing the complaint. NLRC rationcinated that Millares and Lagda, as seamen and
overseas contract workers are not covered by the term “regular employment” as defined under Article 280
of the Labor Code. The POEA, which is tasked with protecting the rights of the Filipino workers for
overseas employment to fair and equitable recruitment and employment practices and to ensure their
welfare, prescribes a standard employment contract for seamen on board ocean-going vessels for a fixed
period but in no case to exceed twelve months.
Issue:
Whether or not seafarers are considered regular employees under Article 280 of the Labor Code

Held:
.
No, It is for the mutual interest of both the seafarer and the employer why the employment
status must be contractual only or for a certain period of time. Quoting Brent School Inc. v. Zamora, 1990,
and Pablo Coyoca v. NLRC, 1995, the Supreme Court ruled that seafarers are considered contractual
employees. They can not be considered as regular employees under Article 280 of the Labor Code. Their
employment is governed by the contracts they sign everytime they are rehired and their employment is
terminated when the contract expires. Their employment is contractually fixed for a certain period of time.
They fall under the exception of Article 280 whose employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of engagement of the
employee or where the work or services to be performed is seasonal in nature and the employment is for
the duration of the season.
As ruled in Brent case, there are certain forms of employment which also require the performance
of usual and desirable functions and which exceed one year but do not necessarily attain regular
employment status under Article 280. Overseas workers including seafarers fall under this type of
employment which are governed by the mutual agreements of the parties. And as stated in the Coyoca
case, Filipino seamen are governed by the Rules and Regulations of the POEA. The Standard
Employment Contract governing the employment of All Filipino seamen on Board Ocean-Going Vessels
of the POEA, particularly in Part I, Sec. C specifically provides that the contract of seamen shall be for a
fixed period. And in no case should the contract of seamen be longer than 12 months. Moreover, the
Court held that it is an accepted maritime industry practice that employment of seafarers are for a fixed
period only. Constrained by the nature of their employment which is quite peculiar and unique in itself, it is
for the mutual interest of both the seafarer and the employer why the employment status must be
contractual only or for a certain period of time. Seafarers spend most of their time at sea and
understandably, they can not stay for a long and an indefinite period of time at sea. Limited access to
shore society during the employment will have an adverse impact on the seafarer. The national, cultural
and lingual diversity among the crew during the COE is a reality that necessitates the limitation of its
period.

2011-0076
Case Title: VINTA MARITIME COMPANY V NLRC

G.R. No.: G.R. No. 113911
Date: January 23, 1998
Petitioner: Vinta Maritime Company
Ponente: Panganiban, J
Facts:
Leonides Basconsillo, private respondent, filed a complaint with the Philippine Overseas
Employment Administration IPOEA) for illegal dismissal against Vinta Maritime Co. Inc. and Elkano Ship
Management, Inc. petitioners alleged that Leonides was dismissed for his gross negligence and
incompetent performance as chief engineer of the M/V Boracay. The POEA ruled that private respondent
was illegally dismissed. On appeal, the NLRC affirmed the POEA. Likewise, the NLRC denied the motion
for reconsideration. Hence, this petition.
Issue:
Whether or not private respondent is illegally dismissed.
Held:
The absence of a valid cause for termination in this case is apparent. For an employee’s
dismissal to be valid, 1) the dismissal must be for a valid cause and 2) the employee must be afforded
due process. Petitioners allege that private respondent was dismissed because of his incompetence,
enumerating incidents in proof thereof. However, this is contradicted by private respondent’s seaman’s
book which states that his discharge was due to an emergency leave. Moreover, his alleged
incompetence is belied by the remarks made by petitioners in the same book that private respondent’s
services were “highly recommended” and that his conduct and ability were rated “very good “. Petitioners’
allegation that such remark and ratings were given to private respondent as an accommodation for future
employment fails to persuade. The Court cannot consent to such an accommodation, even if the
allegation were true, as it is a blatant misrepresentation. It cannot exculpate petitioners based on such
misrepresentation. When petitioners issued the accommodation, they must have known its possible
repercussions.
Due process, the second element for a valid dismissal, requires notice and hearing. Before the
employee can be dismissed under Art. 282, the Code requires the service of a written notice containing a
statement of the cause/s of termination and giving said employee ample opportunity to be heard and to
defend himself. A notice of termination in writing is further required if the employee’s dismissal is decided
upon. The employer must furnish the worker with two written notices before termination of employment
can be legally effected: (1) notice which apprises the employee of the particular acts or omissions for
which his dismissal is sought and (2) subsequent notice which informs the employee of the employer’s
decision to dismiss. The twin requirements of notice and hearing constitute the essential elements of due
process, and neither of these elements can be eliminated without running afoul of the constitutional

guaranty. Illegally dismissed workers are entitled to the payment of their salaries corresponding to
the unexpired portion of their employment where the employment is for a definite period. Conformably,
the administrator and the NLRC properly awarded private respondent salaries for the period of the
effectivity of his contract.
.

2011-0076
Case Title: Inter Orient Maritime Enterprises Inc, et al vs NLRC

G.R. No.: G.R. No. 115497
Date: September 16, 1996
Petitioner: Interorient Maritime Enterprises, Inc., Fircroft Shipping Corporation And Times
Surety & Insurance Co., Inc.,
Respondent: National Labor Relations Commission And Constancia Pineda
Facts:
The instant petition seeks the reversal and/or modification of the Resolution dated March 30,
1994 of public respondent National Labor Relations Commission dismissing the appeals of petitioners
and affirming the decision dated November 16, 1992 of Philippine Overseas Employment Administration
(POEA) Administrator Felicisimo C. Joson, This is a claim for death compensation benefits filed by
Constancia Pineda as heir of her deceased son, seaman Jeremias Pineda, against Interorient Maritime
Enterprises, Inc. and its foreign principal, Fircroft Shipping Corporation and the Times Surety and
Insurance Co., Inc. The following facts were found by the POEA Administrator. On September 28, 1989,
he finished his contract and was discharged from the port of Dubai for repatriation to Manila; that his flight
schedule from Dubai to the Philippines necessitated a stopover at Bangkok, Thailand, and during said
stopover he disembarked on his own free will and failed to join the connecting flight to Hongkong with
final destination to Manila; that on October 5, 1990, it received a fax transmission from the Department of
Foreign Affairs to the effect that Jeremias Pineda was shot by a Thai Officer on duty on October 2, 1989
at around 4:00 P.M.; that the police report submitted to the Philippine Embassy in Bangkok confirmed that
it was Pineda who "approached and tried to stab the police sergeant with a knife and that therefore he
was forced to pull out his gun and shot Pineda"
Petitioner contends that they are not liable to pay any death/burial benefits pursuant to the
provisions of Par. 6, Section C. Part II, POEA Standard Format of Employment which state(s) that "no
compensation shall be payable in respect of any injury, (in)capacity, disability or death resulting from a
willful (sic) act on his own life by the seaman"; that the deceased seaman died due to his own willful (sic)
act in attacking a policeman in Bangkok who shot him in self-defense. After the parties presented their
respective evidence, the POEA Administrator rendered his decision holding petitioners liable for death
compensation benefits and burial expenses. Petitioners appealed the POEA decision to the public
respondent. In a Decision dated March 30, 1994, public respondent upheld the POEA. Thus, this
recourse to this Court by way of a special civil action for certiorari per Rule 65 of the Rules of Court.
Issue:
Whether the petitioners can be held liable for the death of seaman Jeremias Pineda?
Held:
Yes, The petitioners contention that the assailed Resolution has no factual and legal bases is
belied by the adoption with approval by the public respondent of the findings of the POEA Administrator,
which recites at length the reasons for holding that the deceased Pineda was mentally sick prior to his
death and concomitantly, was no longer in full control of his mental faculties. In this instance, seaman
Pineda, who was discharged in Dubai, a foreign land, could not reasonably be expected to immediately
resort to and avail of psychiatric examination, assuming that he was still capable of submitting himself to

such examination at that time, not to mention the fact that when he disembarked in Dubai, he was already
discharged and without employment — his contract having already run its full term — and he had already
been put on a plane bound for the Philippines. Such mental disorder became evident when he failed to
join his connecting flight to Hongkong, having during said stopover wandered out of the Bangkok airport's
immigration area on his own. This Court agrees with the POEA Administrator that seaman Pineda was no
longer acting sanely when he attacked the Thai policeman. The report of the Philippine Embassy in
Thailand dated October 9, 1990 depicting the deceased's strange behavior shortly before he was shot
dead, after having wandered around Bangkok for four days, clearly shows that the man was not in full
control of his own self.
The POEA Administrator ruled, and this Court agrees, that since Pineda attacked the Thai
policeman when he was no longer in complete control of his mental faculties, the aforequoted provision of
the Standard Format Contract of Employment exemption the employer from liability should not apply in
the instant case. Firstly, the fact that the deceased suffered from mental disorder at the time of his
repatriation means that he must have been deprived of the full use of his reason, and that thereby, his will
must have been impaired, at the very least. Thus, his attack on the policeman can in no wise be
characterized as a deliberate, willful or voluntary act on his part. Secondly, and apart from that, we also
agree that in light of the deceased's mental condition, petitioners "should have observed some
precautionary measures and should not have allowed said seaman to travel home alone", and their failure
to do so rendered them liable for the death of Pineda.
Petitioners further argue that the cause of Pineda's death "is not one of the occupational diseases
listed by law", and that in the case of De Jesus vs. Employee's Compensation Commission, this Court
held that ". . . for the sickness and the resulting disability or death to be compensable, the sickness must
be the result of an occupational disease listed under Annex 'A' of the Rules (the Amended Rules on
Employee's Compensation) with the conditions set therein satisfied; otherwise, proof must be shown that
the risk of contracting the disease is increased by the working conditions. The foreign employer may not
have been obligated by its contract to provide a companion for a returning employee, but it cannot deny
that it was expressly tasked by its agreement to assure the safe return of said worker. The uncaring
attitude displayed by petitioners who, knowing fully well that its employee had been suffering from some
mental disorder, nevertheless still allowed him to travel home alone, is appalling to say the least. Such
attitude harks back to another time when the landed gentry practically owned the serfs, and disposed of
them when the latter had grown old, sick or otherwise lost their usefulness.
WHEREFORE, premises considered, the petition is hereby DISMISSED and the Decision assailed in this
petition is AFFIRMED. Costs against petitioners.

2011-0076
Case Title: MARSAMAN MANNING AGENCY, INC., ET AL. vs. NLRC

G.R. No.: G.R. No. 127195, August 25, 1999
Petitioner: Marsaman Manning Agency, Inc., Et Al.
Ponente: BELLOSILLO, J.
Facts:
Cajeras was hired by Marsaman, local manning agent of Diamantides, as Chief Cook Steward on
the MV Prigipos, for a contract period of 10 months with a monthly salary of US$600.00. Cajeras started
work on 8 August 1995 but less than 2 months later, or on 28 September 1995, he was repatriated to the
Philippines. Cajeras alleged that he was assigned not only as Chief Cook Steward but also as assistant
cook and messman and performed various inventory and requisition jobs. Because of his additional
assignments he began to feel sick and requested for medical attention. After the ship's arrival at Holland,
he was examined at the Medical Center for Seamen by Dr. Hoed, who neither apprised Cajeras about the
diagnosis nor issued the requested medical certificate allegedly because he himself would forward the
results to Cajeras' superiors. Upon returning to the vessel, Cajeras was ordered to prepare for immediate
repatriation the following day. He was handed his Seaman's Service Record Book with the entry: "Cause
of discharge — Mutual Consent" to which Cajeras promptly objected. After his arrival in Manila, Cajeras
complained to Marsaman but to no avail. The Labor Arbiter resolved the dispute in favor of Cajeras ruling
that the latter's discharge allegedly by "mutual consent" was not proved by convincing evidence. NLRC
affirmed the appealed findings and conclusions. Petitioners' motion for reconsideration was likewise
denied.
Issue:
Whether or not Cajeras was illegally dismissed and how much salary is due him?
Held:
.
Yes, Petitioners covenanted strict and faithful compliance with the terms and conditions of the
Standard Employment Contract approved by POEA/DOLE which provides that the employment of a
Filipino seaman may be terminated prior to the expiration of the stipulated period provided that the master
and the seaman (a) mutually consent thereto and (b) reduce their consent in writing. Petitioners fell short
of the requirement. No document exists whereby the alleged "mutual consent" was reduced to writing.
The vessel's Deck Log wherein an entry made by Capt. Alekos purported to show that Cajeras himself
asked for his repatriation has no evidentiary value. It is a unilateral act denied by Cajeras and the entry in
no way satisfies the bilateral documentation to prove early termination of an overseas employment
contract by mutual consent as required by the Standard Employment Contract.

On the amount of salaries due Cajeras, Sec. 10 of RA 8042 provides that an illegally dismissed
overseas contract worker shall be entitled to the full reimbursement of his placement fee with interest at
12% per annum, plus his salaries for the unexpired portion of the employment contract or for 3 months for
every year of the unexpired term whichever is less. Petitioners insist that Cajeras is entitled only to
salaries for 3 months pursuant to the last portion of Sec. 10 as opposed to the salaries for 8.6 months
awarded by the Labor Arbiter and affirmed by the NLRC. However, the choice of which amount to award
an illegally dismissed overseas contract worker, i.e., whether his salaries for the unexpired portion of his
employment contract or 3 months' salary for every year of the unexpired term, whichever is less, comes
into play only when the employment contract concerned has a term of at least 1 year or more. Therefore,
petitioners should pay Cajeras his salaries for the unexpired portion of his employment contract or
USD$5,100.00 and reimburse the latter's placement fee with 12% interest per annum conformably with
Sec. 10 of RA 8042.

2011-0076
Case Title: ATHENA INTL MANPOWER SERVICES INC V VILLANOS

G.R. No.: G.R. No. 151303
Date: April 15, 2005
Petitioner: Athenna International Manpower Services, Inc.,
Respondent: Nonito Villanos
Ponente: Quisumbing,J:
Facts:
The petitioner is a domestic corporation engaged in recruitment and placement of workers for
overseas employment. Respondent applied to work overseas as caretaker thru petitioner. The petitioner
asked for a placement fee amounting to P100,000 but the respondent begged to reduced the fee and it
was reduced to P94,000 with the petitioner paying only P30,000 and the remaining will be paid through
salary deductions. Upon arrival on Taiwan, he was assigned to a mechanical shop, owned by Hsien, as a
hydraulic installer/repairer for car lifters, instead of the job for which he was hired. He did not, however,
complain because he needed money to pay for the debts he incurred back home. Barely a month after his
placement, he was terminated by Hsien and received his salary and instructed for departure to the
Philippines. Upon arrival, the respondent went to petitioner’s office and demanded for the reimbursement
of P30,000 but instead the petitioner gave him a summary of expenses relating his deployment. The
respondent filed a complaint before Adjudication Office of the POEA. However, because of financial
constraints, he had to go home to Polanco, Zamboanga del Norte and filed a complaint against petitioner
for illegal dismissal, violation of contract, and recovery of unpaid salaries and other benefits before the
NLRC Sub-Regional Arbitration Branch No. 9, Dipolog City. In its defense, petitioner alleged that under
the employment contract, respondent was to undergo a probationary period of forty (40) days. However,
at the job site, respondent was found to be unfit for his work, thus he resigned from his employment and
requested for his repatriation signing a statement to that effect. The Labor Arbiter rendered a Decision
holding petitioner and Wei Yu Hsien solidarily liable for the wages representing the unserved portion of
the employment contract, the amount unlawfully deducted from respondent’s monthly wage, moral
damages, exemplary damages and attorney’s fees. On appeal, the NLRC reversed the Labor Arbiter and
dismissed the complaint for lack of merit. It found that respondent was not at all dismissed, much less
illegally. Respondent seasonably filed a motion for reconsideration, which the NLRC denied in its second
resolution. respondent appealed to the Court of Appeals and granted the petition and reversing the
questioned resolutions of the NLRC.
Issue:
1. Whether or not the respondent was illegally dismissed, was it proper for the Court of Appeals to affirm
in toto the monetary awards in the Decision of the Labor Arbiter?

Held:
Yes, the respondent was illegally dismissed.The SC denied the petition and affirmed with
modification the resolution by the Court of Appeals. On the first issue, An employee voluntarily resigns
when he finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor
of the exigency of the service; thus, he has no other choice but to disassociate himself from his
employment. In this case respondent avers that petitioner did not explain why he was unqualified nor
inform of any qualifications needed for the job prior to his deployment as mandated by Art 281[9] of the
Labor Code and failed to prove the legality of the dismissal, despite the fact that the burden of proof lies
on the employment and recruitment agency. On the second issue, the SC declared the petitioner
solidarily liable with Wei Yu Hsien to pay the unexpired portion based on Sec 10 RA 8042. Lastly,
because of the breach of contract and bad faith alleged against the employer and the petitioner, we must
sustain the award of P50,000 in moral damages and P50,000 as exemplary damages, in addition to
attorney’s fees of ten percent (10%) of the aggregate monetary awards.

2011-0076
Case Title: ASIAN CENTER FOR CAREER & EMPLOYMENT SERVICES V NLRC & IBNO
MEDIALES
G.R. No.: G.R. No. 131656
Petitioner: Asian Center For Career And Employment System And Services, Inc.
Respondent: National Labor Relations Commission And Ibno Mediales
Ponente: Puno, J.:
Facts:
Petitioner hired respondent IBNO MEDIALES to work as a mason in Jeddah, Saudi Arabia with a
monthly salary of 1,200 Saudi Riyals (SR). The term of his contract was two (2) years, from February 28,
1995 until February 28, 1997. On May 26, 1996, respondent applied with petitioner for vacation leave with
pay and was granted. While en route to the Philippines, his co-workers informed him that he has been
dismissed. respondent filed a complaint with the labor arbiter for illegal dismissal. And found guilty and to
pay the unexpired portion of the respondent ‘s contract which is 1,200 multiplied by 8 months
representing the unexpired portion. Petitioner appealed to the NLRC but the latter affirmed the decision of
labor arbiter but modified the appealed decision by deleting the order of refund of excessive placement
fee for lack of jurisdiction. Petitioner moved for reconsideration with respect to the labor arbiter’s award by
invoking Section 10 RA 8042 that a worker dismissed from overseas employment without just, valid or
authorized cause is entitled to his salary for the unexpired portion of his employment contract or for three
(3) months for every year of the unexpired term, whichever is less that is why it should be three years
should be used for the unexpired portion. NLRC denied the motion. Hence, this petition for certiorari.
Issue:
Whether or not the monetary awards granted by the NLRC to private respondent is correct?
Held:
The SC affirmed the decisions of NLRC with modifications regarding the basis of amount that the
petitioner will pay to the respondent for the unexpired portion of employment contract. In the case at bar,
petitioner’s illegal dismissal from service is no longer disputed. Petitioner merely impugns the monetary
awards granted by the NLRC to private respondent. The effectivity of Section 10 RA 8042 took effect a
year earlier from his vacation leave. Hence, it applies to the case. The respondent should be paid by
petitioner the 3 months unexpired portion of the contract.

2011-0076
Case Title: Eastern Shipping Lines vs. POEA

G.R. No.: G.R. No. 76633
Respondent: Philippine Overseas Employment Administration
Ponente: Cruz, J.
Facts:
Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accidentin
Tokyo, Japan on March 15, 1985.His widow sued for damages under Executive Order No. 797 and
complaint was cognizable not by thePOEA but by the Social Security System and should have been filed
against the State FundInsurance.The POEA nevertheless assumed jurisdiction and after considering the
position papers of theparties ruled in favour of the complainant.The petition is DISMISSED, with costs
so ordered.
Issue:
overseasworker.
Held:
Filipinos and to protect their rights. It replaced the National Seamen Board created earlier underArticle 20
of the Labor Code in 1974. Under Section 4(a) of the said executive order, the POEAis vested with
"original and exclusive jurisdiction over all cases, including money claims,involving employee-employer
seamen." These cases, according to the 1985Rules and Regulations on Overseas Employment issued by
the POEA, include, “claims for death,disability and other benefits” arising out of such employment.
The award of P180,000.00 for death benefits and P12,000.00 for burial expenses was made
bythe POEA pursuant to its Memorandum Circular No. 2, which became effective on February 1,1984.
This circular prescribed a standard contract to be adopted by both foreign and domesticshipping

2. No. Memorandum Circular No. 2 is an administrative regulation. The model contractprescribed

thereby has been applied in a significant number of the cases without challenge by theemployer. The
power of the POEA (and before it the National Seamen Board) in requiring themodel contract is not
unlimited as there is a sufficient standard guiding the delegate in theexercise of the said authority. That

Jose Mari R. Banico

2011-0148
Case title: MANUELA S. CATAN/M.S. CATAN PLACEMENT AGENCY VS THE NATIONAL LABOR
RELATIONS COMMISSION, PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION and FRANCISCO D. REYES
GR number: G.R. No. 77279
Petitioner: MANUELA S. CATAN/M.S. CATAN PLACEMENT AGENCY
Respondent: THE NATIONAL LABOR RELATIONS COMMISSION, PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATION and FRANCISCO D. REYES
Ponente: CORTES, J.
Facts:
The Petitioner, a duly licensed recruitment agency, as agent of Ali and Fahd Shabokshi Group, a
Saudi Arabian firm, recruited private respondent to work in Saudi Arabia as a steelman.
The contract was automatically renewed when private respondent was not repatriated by his
Saudi employer but instead was assigned to work as a crusher plant operator. On March 30, 1983, while
he was working as a crusher plant operator, private respondent's right ankle was crushed under the
machine he was operating. On September 9, 1983, he returned to Saudi Arabia to resume his work. On
May 15,1984, he was repatriated. Upon his return, he had his ankle treated for which he incurred further
expenses.
Issue:
Whether or not this was grounds for cancellation or suspension of license or authority of M. S. Catan
Placement Agency.
Held:
Yes, Power of the agency to sue and be sued jointly and solidarily with the principal or foreign-
based employer for any of the violations of the recruitment agreement and the contracts of employment.
[Section 10(a) (2) Rule V, Book I, Rules to Implement the Labor Code. The Court ruled that a recruitment
agency was solidarily liable for the unpaid salaries of a worker it recruited for employment in Saudi
Arabia. Even if indeed petitioner and the Saudi principal had already severed their agency agreement at
the time private respondent was injured, petitioner may still be sued for a violation of the employment
contract because no notice of the agency agreement's termination was given to the private respondent.

Jose Mari R. Banico

2011-0148
Case title: ESALYN CHAVEZ VS HON. EDNA BONTO-PEREZ, HON. ROGELIO T. RAYALA,
HON. DOMINGO H. ZAPANTA, HON. JOSE N. SARMIENTO, CENTRUM
PROMOTIONS PLACEMENT CORPORATION, JOSE A. AZUCENA, JR., and TIMES
SURETY & INSURANCE COMPANY, INC.
Date: March 1, 1995
Petitioner: ESALYN CHAVEZ
Respondent: HON. EDNA BONTO-PEREZ, HON. ROGELIO T. RAYALA, HON. DOMINGO H.
ZAPANTA, HON. JOSE N. SARMIENTO, CENTRUM PROMOTIONS PLACEMENT
CORPORATION, JOSE A. AZUCENA, JR., and TIMES SURETY & INSURANCE
COMPANY, INC.
Ponente: PUNO, J.
Facts:
On December 1, 1988, petitioner, an entertainment dancer, entered into a standard employment
contract for overseas Filipino artists and entertainers with Planning Japan Co., Ltd., through its Philippine
representative, private respondent Centrum Placement & Promotions Corporation. The contract had a
duration of two (2) to six (6) months, and petitioner was to be paid a monthly compensation of One
Thousand Five Hundred Dollars (US$1,5000.00). On December 5, 1888, the POEA approved the
contract. Subsequently, petitioner executed the following side agreement with her Japanese employer
through her local manager, Jaz Talents Promotion.
On December 16, 1988, petitioner left for Osaka, Japan, where she worked for six (6) months,
until June 10, 1989. She came back to the Philippines on June 14, 1989. Petitioner instituted the case at
bench for underpayment of wages with the POEA on February 21, 1991. She prayed for the payment of
Six Thousand U.S. Dollars (US$6,000.00), representing the unpaid portion of her basic salary for six
months. Charged in the case were private respondent Centrum Promotions and Placement Corporation,
the Philippine representative of Planning Japan, Co., Inc., its insurer, Times Surety and Insurance Co.,
Inc., and Jaz Talents Promotion.
Issue:
Whether or not the there was an invalid side agreement present in the case at bar.
Held:
Yes, IN VIEW WHEREOF, the petition is GRANTED Clearly, the basic salary of One Thousand
Five Hundred U.S. Dollars (US$1,500.00) guaranteed to petitioner under the parties' standard
employment contract is in accordance with the minimum employment standards with respect to wages set
by the POEA, Thus, the side agreement which reduced petitioner's basic wage to Seven Hundred Fifty
U.S. Dollars (US$750.00) is null and void for violating the POEA's minimum employment standards, and
for not having been approved by the POEA. Indeed, this side agreement is a scheme all too frequently
resorted to by unscrupulous employers against our helpless overseas workers who are compelled to
agree to satisfy their basic economic needs. Private respondents are held jointly and severally liable to
petitioner for the payment of SIX THOUSAND US DOLLARS (US$6,000.00) in unpaid wages.

Jose Mari R. Banico

2011-0148
Case title: EASTERN ASSURANCE & SURETY CORPORATION

VS SECRETARY OF LABOR, PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION, ELVIRA VENTURA, ESTER TRANGUILLAN, et al.
GR number: L-79436-50
Petitioner: EASTERN ASSURANCE & SURETY CORPORATION
Respondent: SECRETARY OF LABOR, PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION, ELVIRA VENTURA, ESTER TRANGUILLAN, et al.
Ponente: Narvasa, J.
Facts:
In connection with the application with the Philippine Overseas Employment Administration of
J&B Manpower Specialist, Inc. for a license to engage in business as a recruitment agency, a surety bond
was filed on January 2, 1985 by the applicant and the Eastern Assurance and Surety Corporation, herein
petitioner, in virtue of which they both held themselves firmly bound unto Philippine Overseas
Employment Administration, Ministry of Labor in the penal sum of PESOS ONE HUNDRED FIFTY
THOUSAND ONLY for the payment of which will and truly to be made, they bound themselves, their
heirs, executors, administrators, successors and assigns, jointly and severally.
In consideration of promised deployment, complainants paid respondent various amounts for

various fees. Because of non-deployment, the applicants filed separate complaints with the Licensing and
Regulation Office of POEA against J&Bfor violation of Articles 32 and 34 (a) of the Labor Code between
the months of April to October 1985.
EASCO essentially disclaimed liability on the ground that the claims were not expressly covered
by the bond, that POEA had no jurisdiction to order forfeiture of the bond, that some of the claims were
paid beyond or prior to the period of effectivity of the bond.
Issue:
Whether or not the POEA or the Secretary Labor had proper jurisdiction over the claims for refund filed by
non-employees.
Held:
Yes, The petition is DISMISSED for lack of merit, and this decision is declared to be immediately
executory. The penalties of suspension and cancellation of license or authority are prescribed for
violations of the above quoted provisions, among others. And the Secretary of Labor has the power under
Section 35 of the law to apply these sanctions, as well as the authority, conferred by Section 36, not only,
to "restrict and regulate the recruitment and placement activities of all agencies," but also to "promulgate
rules and regulations to carry out the objectives and implement the provisions" governing said activities.
Pursuant to this rule-making power thus granted, the Secretary of Labor gave the POEA "on its own
initiative or upon filing of a complaint or report or upon request for investigation by any aggrieved person,
authority to conduct the necessary proceedings for the suspension or cancellation of the license or
authority of any agency or entity" for certain enumerated offenses.

Jose Mari R. Banico

2011-0148
Case title: FINMAN GENERAL ASSURANCE CORP. VS

WILLIAM INOCENCIO, ET AL. AND EDWIN CARDONES, THE ADMINISTRATOR,
PHILIPPINE OVERSEAS AND EMPLOYMENT ADMINISTRATION, THE SECRETARY
OF LABOR AND EMPLOYMENT
GR number: 90273-75
Petitioner: FINMAN GENERAL ASSURANCE CORP.
Respondent: WILLIAM INOCENCIO, ET AL. AND EDWIN CARDONES, THE ADMINISTRATOR,
PHILIPPINE OVERSEAS AND EMPLOYMENT ADMINISTRATION, THE SECRETARY
OF LABOR AND EMPLOYMENT
Ponente: Feliciano, J.
Facts:
Pan Pacific Overseas Recruiting Services, Inc. ("Pan Pacific") is a private, fee-charging,
recruitment and employment agency. T in accordance with the requirements of Section 4, Rule II, Book II
of the Rules and Regulations of the Philippine Overseas Employment Administration (POEA), Pan Pacific
posted a surety bond issued by petitioner Finman General Assurance Corporation ("Finman") and was
granted a license to operate by the POEA.
Private respondents William Inocencio, Perfecto Palero, Jr., Edwin Cardones and one Edwin
Hernandez filed with the POEA separate complaints against Pan Pacific for violation of Articles 32 and 34
(a) of the Labor Code, as amended and for refund of placement fees paid to Pan Pacific. The
complainants alleged that Pan Pacific charged and collected such fees from them but did not secure
employment for them.
In the case at bar, the POEA held, and the Secretary of Labor affirmed, that Pan Pacific had
violated Article 32 of the Labor Code.
Issue:
Whether or not the POEA or the Secretary of Labor had proper jurisdiction over the case.
Held:
Yes, the Petition for certiorari with prayer for preliminary injunction or temporary restraining order
is hereby DISMISSED for lack of merit. The second paragraph of Article 31 of the Labor Code states that
the secretary of Labor shall have the exclusive power to determine, decide, order or direct payment from,
or application of, the cash or surety bond for any claim or injury covered and guaranteed by the bonds.
There is, hence, no question that, both under the Labor Code and the POEA Rules and Regulations, Pan
Pacific had violated at least one of the conditions for the grant and continued use of the recruitment
license granted to it.

Jose Mari R. Banico

2011-0148
Case title: NFD INTERNATIONAL MANNING AGENTS and BARBER INTERNATIONAL A/S VS
THE NATIONAL LABOR RELATIONS COMMISSION and NELIA MISADA, for herself
and in behalf of her minor children CAESAR and ALPHA JOY, all surnamed MISADA and
HIMAYA ENVIDIADO, for herself and in behalf of her minor children HENREA, HAZEL,
and HENDRICK, all surnamed ENVIDIADO
Petitioner: NFD INTERNATIONAL MANNING AGENTS and BARBER INTERNATIONAL A/S
Respondent: THE NATIONAL LABOR RELATIONS COMMISSION and NELIA MISADA, for herself
and in behalf of her minor children CAESAR and ALPHA JOY, all surnamed MISADA and
HIMAYA ENVIDIADO, for herself and in behalf of her minor children HENREA, HAZEL,
and HENDRICK, all surnamed ENVIDIADO
Ponente: PUNO, J.
Facts:
On July 5, 1991, private respondent Nelia Misada received notice that her husband, Eduardo
Misada, died on June 28, 1991 while on board the M/V Pan Victoria. On July 12 1991, private respondent
Himaya Envidiado likewise received notice that her husband, Enrico Envidiado, died on board the vessel.
As heirs of the deceased seamen, private respondents, in their behalf and in behalf of their minor
children, filed for death compensation benefits under the Philippine Overseas Employment Agency
(POEA) Standard Contract of Employment and the Norwegian National Insurance Scheme (NIS) for
Filipino Officers. Their claims were denied by petitioners.
Private respondents filed separate complaints before the POEA Adjudication Office. They prayed
for U.S. $13,000.00 each as death compensation under the POEA Standard Contract of Employment and
U.S. $30,000.00 for each wife and U.S. $8,000.00 for each child under eighteen years under the
Norwegian NIS.
The petitioners claimed that private respondents are not entitled to death benefits on the ground
that the seamen's deaths were due to their own willful act. They alleged that the deceased were among
three (3) Filipino seamen who implanted fragments of reindeer horn in their respective sexual organs on
or about June 18, 1991; that due to the lack of sanitary conditions at the time and place of implantation,
all three seamen suffered "severe tetanus" and "massive viral infections;" that Misada and Envidiado died
within days of the other; that the third seaman, Arturo Fajardo, narrowly missed death only because the
vessel was at port in Penang, Malaysia at the time the tetanus became critical.
Issue:
Whether or not the heirs of the private petitioners are entitled to the death compensation benefits.

Held:
Yes. the petition is dismissed and the decision of respondent National Labor Relations
Commission in NLRC CA No. 006490-94 is affirmed As correctly found by respondent Commission,
petitioners' evidence insufficiently proves the fact that the deaths of the two seamen were caused by their
own willful and deliberate act. And even if the seamen implanted fragments of reindeer horn in their sex
organs, the evidence does not substantially prove that they contracted tetanus as a result of the
unsanitary surgical procedures they performed on their bodies. Neither does the evidence show that the
tetanus was the direct cause of their deaths.

Jose Mari R. Banico

2011-0148
Case title: NORSE MANAGEMENT CO. (PTE) and PACIFIC SEAMEN SERVICES, INC.
VS NATIONAL SEAMEN BOARD, HON. CRESCENCIO M. SIDDAYAO, OSCAR
M. TORRES, REBENE C. CARRERA and RESTITUTA C. ABORDO
GR number: G.R. No. L-54204
Petitioner: NORSE MANAGEMENT CO. (PTE) and PACIFIC SEAMEN SERVICES, INC.
Respondent: NATIONAL SEAMEN BOARD, HON. CRESCENCIO M. SIDDAYAO, OSCAR M.
TORRES, REBENE C. CARRERA and RESTITUTA C. ABORDO
Ponente: RELOVA, J.
Facts:
Napoleon B. Abordo, the deceased husband of private respondent Restituta C. Abordo, was the
Second Engineer of M.T. "Cherry Earl" when he died from an apoplectic stroke in the course of his
employment with petitioner NORSE MANAGEMENT COMPANY (PTE). The M.T. "Cherry Earl" is a
vessel of Singaporean Registry. The late Napoleon B. Abordo at the time of his death was receiving a
monthly salary of US$850.00.
In her complaint for "death compensation benefits, accrued leave pay and time-off allowances,
funeral expenses, attorney's fees and other benefits and reliefs available in connection with the death of
Napoleon B. Abordo," filed before the National Seamen Board, Restituta C. Abordo alleged that the
amount of compensation due her from petitioners Norse Management Co. (PTE) and Pacific Seamen
Services, Inc., principal and agent, respectively, should be based on the law where the vessel is
registered. On the other hand, petitioners contend that the law of Singapore should not be applied in this
case because the National Seamen Board cannot take judicial notice of the Workmen's Insurance Law of
Singapore. As an alternative, they offered to pay private respondent Restituta C. Abordo the sum of
P30,000.00 as death benefits based on the Board's Memorandum Circular No. 25 which they claim
should apply in this case.
Issue:
Whether or not the National Seamen Board had proper jurisdiction over the case at bar.
Held:
Yes, According to Article 20 of the Labor Code of the Philippines, provides that the National
Seamen Board has original and exclusive jurisdiction over all matters or cases including money claims,
involving employer-employee relations, arising out of or by virtue of any law or contracts involving Filipino
seamen for overseas employment. Finally, Article IV of the Labor Code provides that "all doubts in the
implementation and interpretation of the provisions of this code, including its implementing rules and
resolved in favor of labor.

Jose Mari R. Banico

2011-0148
Case title: PHILIPPINE INTERNATIONAL SHIPPING CORPORATION VS NATIONAL

LABOR RELATIONS COMMISSION AND BRIGIDO SAMSON, represented by
wife, NORMA S. SAMSON
GR number: G.R. No. L-63535
Date: May 27, 1985
Petitioner: PHILIPPINE INTERNATIONAL SHIPPING CORPORATION
Respondent: HONORABLE NATIONAL LABOR RELATIONS COMMISSION AND BRIGIDO
SAMSON, represented by wife, NORMA S. SAMSON
Ponente: Alampay, J.
Facts:
The case at bar stems from a claim for disability compensation benefits and hospitalization
expenses under employment contract, filed by private respondent herein, Brigido Samson, against the
petitioner before the National Seaman's Board (NSB).
On December 17, 1981, the appealed decision was affirmed by the NLRC. After the said decision
reached finality, the corresponding writ of execution was issued and served on petitioner. On April 28,
1982, the Sheriff who served the writ submitted a report to the Board, stating that petitioner had paid
P18,000.00 to private respondent herein which the latter accepted and evidenced by a voucher and a
"Release" document dated May 7, 1981; and that because of said payment, the Sheriff had in the
meantime refrained from collecting the balance of the award until the Board shall have passed upon this
matter.
Hence, this instant petition for certiorari, with petitioner attributing to the NLRC the commission of
the following alleged errors, namely. The respondent NLRC erred in recognizing a clearly illegal decision,
because said decision orders payment in the dollar standard in violation of law.
Issue:
Whether or not the respondent was in violation of R.A. No. 529.
Held:
No, Republic Act No. 529 makes it unlawful to require payment of domestic obligations in foreign
currency, this particular statute is not applicable to the case at bar. A careful reading of the decision
rendered by the Executive Director of the NSB dated April 2, 1981 and which led to the Writ of Execution
protested to by petitioner, will readily disclose that the award to the private respondent does not compel
payment in dollar currency but in fact expressly allows payment of "its equivalent in Philippine currency."
WHEREFORE, the petition in this case is hereby dismissed for lack of merit.

Jose Mari R. Banico

2011-0148
Case title: HORTENCIA SALAZAR VS HON. TOMAS D. ACHACOSO, in his capacity as

Administrator of the Philippine Overseas Employment Administration, and FERDIE
MARQUEZ
Date: March 14, 1990
Petitioner: HORTENCIA SALAZAR
Respondent: HON. TOMAS D. ACHACOSO, in his capacity as Administrator of the Philippine
Overseas Employment Administration, and FERDIE MARQUEZ
Facts:
On October 21, 1987, Rosalie Tesoro of 177 Tupaz Street, Leveriza, Pasay City, in a sworn
statement filed with the Philippine Overseas Employment Administration charged petitioner Hortencia
Salazar with illegal recruitment.
On January 26, 1988 POEA Director on Licensing and Regulation Atty. Estelita B. Espiritu issued
an office order designating respondents Atty. Marquez, Atty. Jovencio Abara and Atty. Ernesto Vistro as
members of a team tasked to implement Closure and Seizure Order No. 1205. Doing so, the group
assisted by Mandaluyong policemen and mediamen Lito Castillo of the People's Journal and Ernie
Baluyot of News Today proceeded to the residence of the petitioner at 615 R.O. Santos St.,
Mandaluyong, Metro Manila. There it was found that petitioner was operating Hannalie Dance Studio.
Before entering the place, the team served said Closure and Seizure order on a certain Mrs. Flora
Salazar who voluntarily allowed them entry into the premises. Mrs. Flora Salazar informed the team that
Hannalie Dance Studio was accredited with Moreman Development (Phil.). However, when required to
show credentials, she was unable to produce any. Inside the studio, the team chanced upon twelve talent
performers — practicing a dance number and saw about twenty more waiting outside, The team
confiscated assorted costumes which were duly receipted for by Mrs. Asuncion Maguelan and witnessed
by Mrs. Flora Salazar.
Issue:
Whether or not the POEA had jurisdiction to validly issue warrants of search and seizure (or arrest) under
Article 38 of the Labor Code.
Held:
No. We reiterate that the Secretary of Labor, not being a judge, may no longer issue search or
arrest warrants. Hence, the authorities must go through the judicial process. WHEREFORE, the petition is
GRANTED. Article 38, paragraph (c) of the Labor Code is declared UNCONSTITUTIONAL and null and
void. The respondents are ORDERED to return all materials seized as a result of the implementation of
Search and Seizure Order No. 1205.

Jose Mari R. Banico

2011-0148
Case title: SEAGULL MARITIME CORP. AND PHILIMARE SHIPPING & EQUIPMENT SUPPLY VS
NERRY D. BALATONGAN, NATIONAL LABOR RELATIONS COMMISSION AND
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION
Petitioner: SEAGULL MARITIME CORP. AND PHILIMARE SHIPPING & EQUIPMENT SUPPLY
Respondent: NERRY D. BALATONGAN, NATIONAL LABOR RELATIONS COMMISSION AND
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION
Ponente: GANCAYCO, J.
Facts:
On October 6, 1983 Balatongan met an accident in the Suez Canal, Egypt as a result of which he
was hospitalized at the Suez Canal Authority Hospital. Later, he was repatriated to the Philippines and
was hospitalized at the Makati Medical Center from October 23, 1983 to March 27, 1984. On August 19,
1985 the medical certificate was issued describing his disability as "permanent in nature."Balatongan
demanded payment for his claim for total disability insurance in the amount of US $ 50,000.00 as
provided for in the contract of employment but his claim was denied for having been submitted to the
insurers beyond the designated period for doing so.
Seagull and Philimare appealed said decision to the National Labor Relations Commission
(NLRC) on June 4, 1986. Pending resolution of their appeal because of the alleged transfer of the agency
of Seagull to Southeast Asia Shipping Corporation, Seagull filed on April 28, 1987 a Motion For
Substitution/Inclusion of Party Respondent which was opposed by Balatongan. This was followed by an
ex-parte motion for leave to file third party complaint on June 4, 1987 by Seagull.
Issue:
Whether or not the respondent committed prohibited acts by altering or substituting employment contracts
approved and verified by the Department of Labor.
Held:
Yes, it shall be unlawful for any individual, entity, licensee, or holder of authority to substitute or
alter employment contracts approved and verified by the Department of Labor from the time of actual
signing thereof by the parties up to and including the period of expiration of the same without the approval
of the Department of Labor. The supplementary contract of employment was entered into between
petitioner and private respondent to modify the original contract of employment The reason why the law
requires that the POEA should approve and verify a contract under Article 34 of the Labor Code is to
insure that the employee shall not thereby be placed in a disadvantageous position and that the same are
within the minimum standards of the terms and conditions of such employment contract set by the POEA.

Jose Mari R. Banico

2011-0148
Case title: NORBERTO SORIANO VS OFFSHORE SHIPPING AND MANNING CORPORATION,

KNUT KNUTSEN O.A.S., and NATIONAL LABOR RELATIONS COMMISSION (Second
Division)
Petitioner: NORBERTO SORIANO
Respondent: OFFSHORE SHIPPING AND MANNING CORPORATION, KNUT KNUTSEN O.A.S., and
NATIONAL LABOR RELATIONS COMMISSION (Second
Division)

Ponente: Fernan, C. J.
Facts:
In search for better opportunities and higher income, petitioner Norberto Soriano, a licensed
Second Marine Engineer, sought employment and was hired by private respondent Knut Knutsen O.A.S.
through its authorized shipping agent in the Philippines, Offshore Shipping and Manning Corporation. As
evidenced by the Crew Agreement, petitioner was hired to work as Third Marine Engineer on board Knut
Provider" with a salary of US$800.00 a month on a conduction basis for a period of fifteen (15) days. He
admitted that the term of the contract was extended to six (6) months by mutual agreement on the
promise of the employer to the petitioner that he will be promoted to Second Engineer. Thus, while it
appears that petitioner joined the aforesaid vessel on July 23, 1985 he signed off on November 27, 1985
due to the alleged failure of private respondent-employer to fulfill its promise to promote petitioner to the
position of Second Engineer and for the unilateral decision to reduce petitioner's basic salary from
US$800.00 to US$560.00. Petitioner was made to shoulder his return airfare to Manila.
In the Philippines, petitioner filed with the Philippine Overseas Employment Administration, a complaint
against private respondent for payment of salary differential, overtime pay, unpaid salary for November,
1985 and refund of his return airfare and cash bond allegedly in the amount of P20,000.00 contending
therein that private respondent unilaterally altered the employment contract by reducing his salary of
US$800.00 per month to US$560.00, causing him to request for his repatriation to the Philippines.
Issue:
Whether or not the respondent committed prohibited acts by altering or substituting employment contracts
approved and verified by the Department of Labor.
Held:
Yes, There is no dispute that an alteration of the employment contract without the approval of the
Department of Labor is a serious violation of law. In the case at bar, both the Labor Arbiter and the
National Labor Relations Commission correctly analyzed the questioned annotations as not constituting
an alteration of the original employment contract but only a clarification thereof which by no stretch of the
imagination can be considered a violation of the above-quoted law. Under similar circumstances, this
Court ruled that as a general proposition, exceptions from the coverage of a statute are strictly construed.
But such construction nevertheless must be at all times reasonable, sensible and fair. Hence, to rule out
from the exemption amendments set forth, although they did not materially change the terms and
conditions of the original letter of credit, was held to be unreasonable and unjust, and not in accord with
the declared purpose of the Margin Law.

Jose Mari R. Banico
2011-0148
Case title: RESURRECCION SUZARA, CESAR DIMAANDAL, ANGELITO MENDOZA, ANTONIO

TANEDO, RAYMUNDO PEREZ, AMORSOLO CABRERA, DOMINADOR SANTOS,
ISIDRO BRACIA, CATALINO CASICA, VITALIANO PANGUE, RAMON DE BELEN,
EDUARDO PAGTALUNAN, ANTONIO MIRANDA, RAMON UNIANA, ERNESTO
SABADO, MARTIN MALABANAN, ROMEO HUERTO and WILFREDO CRISTOBAL VS
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION, THE NATIONAL
SEAMEN BOARD (now the Philippine Overseas Employment Administration), and
MAGSAYSAY LINES, INC.
GR number: G.R. Nos. L-64781-99
Petitioner: RESURRECCION SUZARA, CESAR DIMAANDAL, ANGELITO MENDOZA, ANTONIO
TANEDO, RAYMUNDO PEREZ, AMORSOLO CABRERA, DOMINADOR SANTOS,
ISIDRO BRACIA, CATALINO CASICA, VITALIANO PANGUE, RAMON DE BELEN,
EDUARDO PAGTALUNAN, ANTONIO MIRANDA, RAMON UNIANA, ERNESTO
SABADO, MARTIN MALABANAN, ROMEO HUERTO and WILFREDO CRISTOBAL
Respondent: THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION, THE NATIONAL
SEAMEN BOARD (now the Philippine Overseas Employment Administration), and
MAGSAYSAY LINES, INC.
Ponente: GUTIERREZ, JR., J
Facts:
The cases at bar involve a group of Filipino seamen who were declared by the defunct National
Seamen Board (NSB) guilty of breaching their employment contracts with the private respondent because
they demanded, upon the intervention and assistance of a third party, the International Transport
Worker's Federation (ITF), the payment of wages over and above their contracted rates without the
approval of the NSB. The petitioners were ordered to reimburse the total amount of US$91,348.44 or its
equivalent in Philippine Currency representing the said over-payments and to be suspended from the
NSB registry for a period of three years. The National Labor Relations Commission (NLRC) affirmed the
decision of the NSB.
In a corollary development, the private respondent, for failure of the petitioners to return the
overpayments made to them upon demand by the former, filed estafa charges against some of the
petitioners. The criminal cases were eventually consolidated in the sala of then respondent Judge Alfredo
Benipayo. Hence, these consolidated petitions, G.R. No. 64781-99 and G.R. Nos. 57999 and 58143-53,
which respectively pray for the nullification of the decisions of the NLRC and the NSB, and the dismissal
of the criminal cases against the petitioners.
In arriving at the questioned decision, the NSB ruled that the petitioners are not entitled to the
wage differentials as determined by the ITF because the means employed by them in obtaining the same
were violent and illegal and because in demanding higher wages the petitioners sought the aid of a third
party, which, in turn, intervened in their behalf and prohibited the vessel from sailing unless the owner
and/or operator of the vessel acceded to respondents' demand for higher wages.

Issue:
Whether or not the NSB and NLRC committed grave abuse of discretion in finding the petitioners guilty of
using intimidation and illegal means in breaching their contracts of employment and punishing them for
these alleged offenses.
Held:
Yes, WHEREFORE, the petitions are hereby GRANTED. The decisions of the National Seamen
Board and National Labor Relations Commission in G. R. Nos. 64781-99 are REVERSED and SET
ASIDE and a new one is entered holding the petitioners not guilty of the offenses for which they were
charged. The petitioners' suspension from the National Seamen Board's Registry for three (3) years is
LIFTED. The private respondent is ordered to pay the petitioners their earned but unpaid wages and
overtime pay/allowance from November 1, 1978 to December 14, 1978 according to the rates in the
Special Agreement that the parties entered into in Vancouver, Canada.

Kenneth Yves C. Bergantin

2011-0050
Case Title: ROYAL CROWN INTERNATIONALE VS. NATIONAL LABOR RELATIONS

COMMISSI0N and VIRGILIO P. NACIONALES
G.R. No.: G.R. No. 78085
Petitioner: Royal Crown Internationale
Respondent: National Labor Relations Commission and Virgilio P. Nacionales
Ponente: J. Cortes
Facts:
Petitioner, a duly licensed private employment agency, recruited and deployed private respondent
Virgilio for employment with ZAMEL as an architectural draftsman in Saudi Arabia. Service agreement
was executed by private respondent and ZAMEL whereby the former was to receive per month a salary of
US$500.00 plus US$100.00 as allowance for a period of one year commencing from the date of his
arrival in Saudi Arabia. However, ZAMEL terminated the employment of private respondent on the ground
that his performance was below par. For three successive days thereafter, he was detained at his
quarters and was not allowed to report to work until his exit papers were ready. On February 16, 1984, he
was made to board a plane bound for the Philippines. Private respondent then filed a complaint for illegal
termination against Petitioner Royal Crown Internationale and ZAMEL with the POEA.
Petitioner contends that there is no provision in the Labor Code, or the omnibus rules
implementing the same, which either provides for the "third-party liability" of an employment agency or
recruiting entity for violations of an employment agreement performed abroad, or designates it as the
agent of the foreign-based employer for purposes of enforcing against the latter claims arising out of an
employment agreement. Therefore, petitioner concludes, it cannot be held jointly and severally liable with
ZAMEL for violations, if any, of private respondent's service agreement.
Issue:
Whether or not petitioner as a private employment agency may be held jointly and severally liable
with the foreign-based employer for any claim which may arise in connection with the implementation of
the employment contracts of the employees recruited and deployed abroad.
Held:
Yes, Petitioner conveniently overlooks the fact that it had voluntarily assumed solidary liability
under the various contractual undertakings it submitted to the Bureau of Employment Services. In
applying for its license to operate a private employment agency for overseas recruitment and placement,
petitioner was required to submit, among others, a document or verified undertaking whereby it assumed
all responsibilities for the proper use of its license and the implementation of the contracts of employment
with the workers it recruited and deployed for overseas employment. It was also required to file with the
Bureau a formal appointment or agency contract executed by the foreign-based employer in its favor to
recruit and hire personnel for the former, which contained a provision empowering it to sue and be sued
jointly and solidarily with the foreign principal for any of the violations of the recruitment agreement and
the contracts of employment. Petitioner was required as well to post such cash and surety bonds as
determined by the Secretary of Labor to guarantee compliance with prescribed recruitment procedures,
rules and regulations, and terms and conditions of employment as appropriate.
These contractual undertakings constitute the legal basis for holding petitioner, and other private
employment or recruitment agencies, liable jointly and severally with its principal, the foreign-based
employer, for all claims filed by recruited workers which may arise in connection with the implementation
of the service agreements or employment contracts.


2011-0050
Case Title: FACILITIES MANAGEMENT CORPORATION, J. S. DREYER, and J. V. CATUIRA, VS.

LEONARDO DE LA ROSA AND THE HONORABLE COURT OF INDUSTRIAL
RELATIONS
G.R. No.: G.R. No. L-38649
Petitioner: Facilities Management Corporation, J. S. Dreyer and J. V. Catuira,
Respondent: Leonardo De La Rosa and the Honorable Court of Industrial Relation
Ponente: J. Makasiar
Facts:
Leonardo dela Osa sought his reinstatement. with full backwages, as well as the recovery of his
overtime compensation, swing shift and graveyard shift differentials. Petitioner alleged that he was
employed by respondents as, painter, houseboy and cashier. He further averred that from December,
1965 to August, 1966, inclusive, he rendered overtime services daily and that this entire period was
divided into swing and graveyard shifts to which he was assigned, but he was not paid both overtime and
night shift premiums despite his repeated demands from respondents.
The petitioner, a foreign corporation domiciled outside the Philippines was ordered by CIR then to
pay the unpaid overtime and premium pay. However, on certiorari, the petitioner contended that because
it was domiciled outside and not doing business in Philippines, it could not be sued in the country.
Issue:
Whether or not petitioner has been doing business in the Philippines so that the service of
summons upon its agent in the Philippines vested the Court of First Instance of Manila with jurisdiction.
Held:
Yes, the object of Sections 68 and 69 of the Corporation Law was not to prevent the foreign
corporation from performing single acts, but to prevent it from acquiring a domicile for the purpose of
business without taking the steps necessary to render it amenable to suit in the local courts. It was never
the purpose of the Legislature to exclude a foreign corporation which happens to obtain an isolated order
for business from the Philippines, from securing redress in the Philippine courts.
Indeed, if a foreign corporation, not engaged in business in the Philippines, is not banned from
seeking redress from courts in the Philippines, a fortiori, that same corporation cannot claim exemption
from being sued in Philippine courts for acts done against a person or persons in the Philippines.


2011-0050
Case Title: PEOPLE OF THE PHILIPPINES VS. BULU CHOWDURY

G.R. No.: G.R. No. 129577-80
Date: Feb. 15, 2000
Petitioner: Bulu Chowdury
Respondent: People of the Philippines
Ponente: J. Puno
Facts:
BuluChowdury was charged with the crime of illegal recruitment in large scale by recruiting
Estrella B. Calleja, Melvin C. Miranda and Aser S. Sasis for employment in Korea. Evidence shows that
accused –appellant interviewed private complainant in 1994 at Craftrade’s office. At that time, he was an
interviewer of Craftrade which was operating under temporary authority given by POEA pending the
renewal of license. He was charged based on the fact that he was not registered with the POEA as
employee of Craftrade and he is not in his personal capacity, licensed to recruit overseas workers. The
compalinants also averred that during their applications for employment for abroad, the license of
Craftrade was already expired.
For his defense Chowdury testified that he worked as interviewer at Craftrade from 1990
until 1994. His primary duty was to interview job applicants for abroad. As a mere employee, he only
followed the instructions given by his superiors, Mr. Emmanuel Geslani, the agency's President and
General Manager, and Mr. UtkalChowdury, the agency's Managing Director.
Issue:
Whether or not accused-appellant knowingly and intentionally participated in the commission of

the crime charged.
Held:
No, an employee of a company or corporation engaged in illegal recruitment may be held liable
as principal, together with his employer, if it is shown that he actively and consciously participated in
illegal recruitment. In this case, Chowdury merely performed his tasks under the supervision of its
president and managing director. The prosecution failed to show that the accused-appellant is conscious
and has an active participation in the commission of the crime of illegal recruitment. Moreover, accused-
appellant was not aware of Craftrade's failure to register his name with the POEA and the prosecution
failed to prove that he actively engaged in recruitment despite this knowledge. The obligation to register
its personnel with the POEA belongs to the officers of the agency. A mere employee of the agency cannot
be expected to know the legal requirements for its operation. The accused-appellant carried out his duties
as interviewer of Craftrade believing that the agency was duly licensed by the POEA and he, in turn, was
duly authorized by his agency to deal with the applicants in its behalf. Accused-appellant in fact confined
his actions to his job description. He merely interviewed the applicants and informed them of the
requirements for deployment but he never received money from them. Chowdury did not knowingly and
intentionally participated in the commission of illegal recruitment being merely performing his task and
unaware of illegality of recruitment.


2011-0050
Case Title: PEOPLE OF THE PHILIPPINES VS. NELLIE CABAIS y GAMUELA

G.R. No.: G.R. No. 129070
Petitioner: Nellie Cabais y Gamuela
Ponente: J. Pardo
Facts:
Accused-appellant Nellie Cabais met the complainants Joan Merante, Nancy Oidi, Florentino
Balanon, Jr. and Imelda Mortera on different occasions. They were told that the accused-appellant was a
legal recruiter working with a licensed recruitment agency based in Manila. She talked to complainants
several times during the period of February 1994 up to May 1994, persuading them to be contract
workers in South Korea. She even presented some persons to influence them. Convinced, the
complainants complied with requirement and paid all the needed amounts. After complying with all the
requirements, complainants were told to wait for their deployment. They waited and repeatedly inquired
about the status of their applications. However, several months passed and they were not deployed as
promised. Complainants checked with the office of the Philippine Overseas Employment Administration
(POEA) in Baguio and learned that Nellie Cabais was not licensed to recruit in Baguio or in any part of the
Cordillera Administrative Region.
The accused was indicted for illegal recruitment and estafa. For her part, accused Cabais denied
all the charges against her. She alleged that she was hired as an employee and as such employee, her
duties only included processing other applications for job placement and entertaining applicants. Accused
Cabais denied involvement in the recruitment of complainants, claiming that it was her boss who was
doing recruitment activities. She admitted, though, that she received payments from complainants, but
alleged that she was merely acting upon the instruction of Forneas and that she turned over all the
payments to her employer.
Issue:
Whether or not accused-appellant Accused-appellant Cabais is guilty of illegal recruitment

committed in large scale.
Held:
Yes, In this case, all the requisite of illegal recruitment are present. Accused-appellant was the
one who informed complainants of job prospects in Korea and the requirements for deployment. She also
received money from them as placement fees. Complainants parted with their money, evidenced by
receipts signed by accused Cabais. Thus, accused-appellant actively participated in the recruitment of the
complainants. Furthermore, accused-appellant did not possess any license to engage in recruitment
activities, as evidenced by a certification from the POEA and the testimony of a representative of said
government agency.
Her acts constituted recruitment, and considering that she admittedly had no license or authority to recruit
workers for overseas employment, accused-appellant is guilty of illegal recruitment. Despite the fact that
she was just an ordinary employee of the company, her criminal liability would still stand for being a
conspirator with the corporate officers in undertaking illegal recruitment activities. Since the recruitment
involves three or more persons, accused-appellant is guilty of illegal recruitment in a large scale.

2011-0050
Case Title: PEOPLE OF THE PHILIPPINES VS. LUZ GONZALES-FLORES

G.R. No.: G.R. No. 138535-38
Petitioner: Luz Gonzales-Flores
Ponente: J. Mendoza
Facts:
Accussed-appellant was charged and convicted before regional trial court of illegal recruitment
and estafa. Complainants Felixberto Leongson, Jr., Ronald Frederizo and Larry Tibor testified that the
accused-appellants are recruiting for seaman to work abroad. They paid the needed payments for the
processing of their applications but no receipts were issued upon them. They were assured of the
employment and that they will be informed of the developments. The complainant followed up their
application but each they were told to be patient. Realizing that they had been deceived, complainants
went to the Baler Police Station 2 in Quezon City on November 11, 1994 to file their complaints for illegal
recruitment and estafa against accused-appellant and other people who helped in recruitment with the
accused. On November 14, 1994, complainants went to the Philippine Overseas Employment
Administration (POEA) and discovered that accused-appellant and her companions did not have any
license or authority to engage in any recruitment activity.
Accused-appellant denied having promised complainants overseas employment and having collected
money from them. All she did was to refer the complainants to other persons who were the real recruiters.
Issue:
Whether or not referral made by accused-appellant would constitute of illegal recruitment in large
scale.
Held:
Yes, under Article 13 (b) of the Labor Code, recruitment includes "referral," which is defined as
the act of passing along or forwarding an applicant for employment after initial interview of a selected
applicant for employment to a selected employer, placement officer, or bureau. In these cases, accused-
appellant did more than just make referrals. She actively and directly enlisted complainants for supposed
employment abroad, even promising them jobs as seamen, and collected moneys from them. There was
also conspiracy among accused-appellant and other recruiters who used fraudulent means and under
pretense of legal recruiters in recruiting complainants for employment overseas.


2011-0050
Case Title: PEOPLE OF THE PHILIPPINES VS. LINDA SAGAYDO

G.R. No.: G.R. No. 124671-75
Date: Sep. 29, 2000
Petitioner: Linda Sagaydo
Ponente: J. Pardo
Facts:
Accused Linda Sagayado was convicted before the regional trial court of illegal recruitment in
large scale and fur charges of estafa. Complainants Gina Cleto, Rogelio Tebeb, Nata Pita and Jessie
Bolinao recounted that the accused Sagayado propsed and encourage them for employment abroad in
Korea. Complainants gave their respective payments to the accused for the processing of their travel
papers and passport. They were assured of their flight and of employment abroad. However, months
have passed but their flight never pushed through. They then inquired at the Baguio POEA office whether
the accused was a license recruiter to which they receive certification that the accused was not a license
recruiter.
In her defense, the accused denied having recruited any of the private complainants.
She claimed that they came to her voluntarily after being informed that she was able to send her three (3)
sons to Korea. While accused admitted having received money from complainants Gina Cleto and Naty
Pita, she said she used their money to buy their plane tickets. Gina and Naty were not able to leave
because the Korean government imposed a visa requirement beginning January, 1992. When asked why
she was not able to return the money of Gina and Naty, accused said that she returned the plane tickets
to the Tour Master travel Agency for refund but said agency did not make reimbursements. With respect
to complainants Jessie Bolinao and Rogelio Tibeb, the accused denied having received money from
them.
Issue:
Whether or not the accused is guilty of illegal recruitment in large scale.
Held:
Yes, Illegal recruitment is deemed committed in large scale if committed against three or more
person, individually or as a group. This crime requires proof that the accused: (1 ) engaged in
the recruitment and placement of workers defined under Article 13 or in any of the prohibited activities
under Article 34 of the Labor Code; (2) does not have a license or authority to lawfully engage in the
recruitment and placement of workers; and (3) committed the infraction against three or more persons,
individually or as a group.”
All the requisites are present in this case. The accused representations to the private
complainants that she could send them to Korea to work as factory workers, constituting a promise of
employment which amounted to recruitment as defined under Article 13(b) of the Labor Code. From
the testimonies of the priv ate complainants, there is no denying that accused gav e the
complainants the distinct impression that she had the power or ability to send them abroad for work such
that the latter were conv inced to part with their money in order to be employed. As against
the positiv e and categorical testimonies of the complainants, mere denial of accused cannot prevail. As
to the license requirement, the record showed that accused-appellant did not have the authority to recruit
for employment abroad as the certification issued by the POEA in Baguio City.


2011-0050
Case Title: PEOPLE OF THE PHILIPPINES VS. BENZONG ONG y SATE

G.R. No.: G.R. No. 119594
Date: Jan. 18, 2000
Petitioner: Benzong Ong y Sate
Ponente: J. Mendoza
Facts:
The regional trial court convicted accused Benson Ong of illegal recruitment and
sev en charges of estaf a f or promising employment abroad to the f ollowing:
1.Noel Bacasnot Baldivino;
2.Ruth A Eliw;
3.Samuel Bagni;
4.Francisca Cayaya;
5.Teofilo S. Gallao,Jr.;
6.Sally Kamura;
7.Paul G. Esteban;
8.David Joaquin; and
9. Solidad M. Malinias
The abov e complainants recounted that t he accused encourage them f or
employment abroad. Some of them voluntarily sought the help of the accused believ ing
that he is a legal and licensed recruiter. They paid the placement f ees and were assured
f or employment abroad upon completion of their papers. Accused nev er f ulfilled his
promise. Complainants sought help to the NBI about the recruitment activi ties of the
accused. The NBI conf irmed f rom the Philippine Overseas Employment Administration-Regional
Extension Unit (POEA-REU) in the Cordillera Autonomous Region that accused had not been licensed to
recruit for overseas employment. On June 27, 1994, a team composed of NBI and special
inv estigators conducted an entrapment operation which led to the arrest of the accused.
For his part, the accused denied the charges and f or collecting f ees f rom them. He
f urther claimed that his signatures on the receipt were f orged and he merely suggested to
the complainants employment abroad .
Issue:
Whether or not accused is guilty of illegal recruitment in large scale.
Held:
The essential elements of the crime of illegal recruitment in large scale are: (1) the accused
engages in acts of recruitment and placement of workers defined under Art. 13 (b) or in any prohibited
activities under Art. 34 of the Labor Code; (2) the accused has not complied with the guidelines issued by
the Secretary of Labor and Employment, particularly with respect to the securing of a license or an
authority to recruit and deploy workers, either locally or overseas; and (3) the accused commits the
unlawful acts against three or more persons, individually or as a group.

All the requi sites of Illegal recruitment in large scale are present in this case.
Accused represented himself to complainants as one capable of deploying workers abroad and even
quoted the alleged salary rates of factory and construction workers in Taiwan. He was not also
authorized to recruit workers abroad as he has not been licensed by the POEA and he
illegally recruited more than three persons. Even if accused-appellant did no more than "suggest"
to complainants where they could apply for overseas employment, his act constituted "referral" within the
meaning of Art.13 (b) of the Labor Code. Indeed, the testimonial and documentary evidence in the record
shows that accused-appellant did more than just make referrals. The evidence shows that he made
misrepresentations to them concerning his authority to recruit for overseas employment and collected
various amounts from them for placement fees. Clearly, accused-appellant committed acts constitutive of
large scale illegal recruitment.

2011-0050
Case Title: PEOPLE OF THE PHILIPPINES VS. REYDANTE CALONZO Y AMBROSIO

G.R. No.: G.R. No. 115150-
Date: Sep. 27, 1996
Petitioner: Reydante Calonzo Y Ambrosio
Ponente: J. Bellosillo
Facts:
Reydante Calonzo Y ambrosio was charged with illegal recruitment in large scale and 5 counts of
estafa by Brenando Miranda, Danilo de los Reyes, Elmer Clamor, Belarmino Torregrosa and Hazel de
Paula. The complainants recounted that they met the accused-appellant who was then employed in
R.A.C Business Agency and offered to them employment in Italy. The accused was glib and persuasive
that they were lured to give payment for the processing of their application for work in Italy. The accused-
appellant was able to send the complainants to Bangkok and were brought to P.S Guest Hotel. While in
Bangkok, the complainants again gave additional amounts to the accused. However, they only remain in
Bangkok and the promise of employment in Italy was not fulfilled. Upon return to the Philippines, the
complainants verified from POEA to which the latter issued a certification that the accused and R.A.C
Business Agency were not licensed to recruit workers for overseas employment.
As for his part, accused-appellant denies involvement in any recruitment activities.
Issue:
Whether or not accused-appellant is guilty of illegal recruitment committed in large scale.
Held:
Yes, Illegal recruitment in large scale is committed when a person "(a) undertakes any
recruitment activity defined under Article 13(b) or any prohibited practice enumerated under Article 34 of
the Labor Code; (b) does not have a license or authority to lawfully engage in the recruitment and
placement of workers; and (c) commits the same against three or more persons, individually or as a
group."
The above requisites to constitute illegal recruitment in large scale are present in this case, the
testimony of complainants evidently showed that Calonzo was engaged in recruitment activities in large
scale. Firstly, he deluded complainants into believing that jobs awaited them in Italy by distinctly
impressing upon them that he had the facility to send them for work abroad. He even showed them his
passport to lend credence to his claim. To top it all, he brought them to Bangkok and not to Italy. Neither
did he have any arrangements in Bangkok for the transfer of his recruits to Italy. Secondly, POEA likewise
certified that neither Calonzo nor R.A.C. Business Agency was licensed to recruit workers for employment
abroad. Appellant admitted this fact himself. Thirdly, appellant recruited five (5) workers thus making the
crime illegal recruitment in large scale constituting economic sabotage.


2011-0050
Case Title: PEOPLE OF THE PHILIPPINES VS. FRANCISCO HERNANDEZ (at large), KARL
REICHL, and YOLANDA GUTIERREZ DE REICHL,
G.R. No.: G.R. No. 141221-36
Date: March 7, 2002
Petitioners: Karl Reichl and Yolanda Gutierrez De Reichl
Ponente: J. Puno
Facts:
In April 1993, eight informations for syndicated and large scale illegal recruitment and eight
informations for estafa were filed against accused-appellants, spouses Karl and Yolanda Reichl, together
with Francisco Hernandez. Only the Reichl spouses were tried and convicted by the trial court as
Francisco Hernandez remained at large.
The complainants namely, Narcisa Autor de Hernandez, Leonora Perez, Melanie Bautista
Annaliza Perez, Edwin Coling, Estela Abel de Manalo, Anicel Umahon and Charito Balmes have their
own similar stories about the illegal recruitment conducted by the accused-appellants. They recounted
that accused Hernandez was the one convincing each of them to apply for employment abroad. Accused
Hernandez asked for the payment for the processing of their papers, travel documents and visas.
Complainants then were introduced by Hernandez to spouse Reichl who in turn promised them for
employment abroad. The spouse issued reciept for the payments made by the complainants. The
promises of employment however did not pushed through and the complainants remained in the
Phillippines. Upon demands, the accused spouse promise them to refund the payment if their
employments never materialized. These agreements were reduced into a document but the accused
spouse never complies with their obligations. There was also a certification from the Philippine Overseas
Employment Administration (POEA) that Francisco Hernandez, Karl Reichl and Yolanda Gutierrez Reichl
in their personal capacities were neither licensed nor authorized by the POEA to recruit workers for
overseas employment.
As for their part, the spouse denied any of involvement of Hernandez's recruitment and their
knowledge of promises for overseas employment. They further contended that they cannot be convicted
of illegal recruitment committed in large scale as the several information were only filed by single
complainant.
Issue:
Whether or not the accused-appellants were guilty of syndicated and large scale illegal
recruitment.

Held:
They cannot be convicted of illegal recruitment committed in large scale. Where only one
complainant filed individual complaints as in this case, there is no illegal recruitment in large scale.
However, they are guilty of syndicated illegal recruitment. 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 of Article 38 of the Labor Code. It has been shown that Karl Reichl, Yolanda Reichl and
Francisco Hernandez conspired with each other in convincing private complainants to apply for an
overseas job and giving them the guaranty that they would be hired as domestic helpers in Italy although
they were not licensed to do so. Thus, the accused-appellants are liable for illegal recruitment committed
by a syndicate.

2011-0050
Case Title: PEOPLE OF THE PHILIPPINES VS. TAN TIONG MENG alias "TOMMY TAN"
G.R. No.: G.R. No. 120835-40
Petitioner: Tan Tiong Meng
Ponente: J. Padilla
Facts:
Accused-appellant Tan Tiong Meng alias “Tommy Tan” was charged and convicted with illegal
recruitment in large scale and 6 counts of estafa before the regional trial court of cavity city. The
complainants namely: Ernesto Orcullo, Manuel Latina, Neil Mascardo, Librado C. Pozas, Edgardo
Tolentino and Cavino Asiman have similar stories about the illegal recruitment activities of the accused.
Each of them recounted that they were informed of job employment in Taiwan. The transactions
happened in certain house of Borja where the accused-appellant assured the complainants of
employment at Rainbow Ship Co.. They were asked to pay a certain amount for placement and
processing fees. The accused issued receipts. The promise of employment however did not push through
and the complainants decided to file a complaint for illegal recruitment. They later found out that the
accused-appellant was not a licensed overseas recruiter.
Issue:
Whether or not the accused-appellant was guilty of illegal recruitment in large scale.
Held:
Yes, the Labor Code defines recruitment and placement as any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not; Provided, that any
person or entity which, in any manner, offers or promises for a fee employment to two or more persons
shall be deemed engaged in recruitment and placement.
It is clear that accused-appellant's acts of accepting placement fees from job applicants and
representing to said applicants that he could get them jobs in Taiwan constitute recruitment and
placement under the above provision of the Labor Code. The accused was not also licensed by the POEA
and thus making him an illegal recruiter. Moreover, illegal recruitment is deemed committed in large scale
if committed against three or more persons individually or as a group. In this case, the accused-appellant
committed illegal recruitment in large scale for having recruited six complainants.


2011-0050
Case Title: PEOPLE OF THE PHILIPPINES VS. DIOSCORA M. ARABIA and FRANCISCA L.
TOMAS
G.R. No.: G.R. No. 138431-36
Petitioner: Dioscoro M. Arabia and Francisca L. Tomas
Ponente: J. Gonzaga-Reyes
Facts:
In October 1992, private complainants Violeta de la Cruz, Remelyn Jacinto, Teresita Lorenzo,
Rolando Rustia and Noel de la Cruz were introduced by the latter's mother, private complainant Pelagia
de la Cruz, to appellant Dioscora Arabia, a recruiter of job applicants for a factory in Taiwan.
They all saw appellants at Quezon City where the appellants convinced them and other
applicants to apply for jobs in Taiwan that would give them a monthly pay. Service fees for processing and
placement, private complainants were told by appellants Arabia and Tomas, would be P16, 000.00 for
each of them.
Each of the private complainants give certain amount to Arabia at the latter's residence and in the
presence of Tomas. Arabia, however, did not issue any receipt upon her assurance that she would not
fool them. Various requirements, such as pictures, passports and bio-data, were submitted also by private
complainants.
However, private complainants were not able to leave for Taiwan because appellants told them
that the person who was supposed to accompany them to Taiwan did not arrive. The departure date was
thus reset but private complainants were still unable to leave.
Private complainants asked for the return of their money as they were no longer interested in
working abroad. They were informed by Arabia's sister, however, that appellants were arrested by the
NBI and detained at the Quezon City Jail. Records also showed that appellants were neither licensed nor
authorized to recruit workers for overseas employment.
Issue:
Whether the accused-appellants committed illegal recruitment in large scale.
Held:
Large-scale illegal recruitment has the following essential elements:The accused undertook
recruitment activity defined under Article 13 or any prohibited practice under Art. 34 of the Labor Code, he
did not have the license or the authority to lawfully engage in the recruitment and placement of workers
and he committed the same against three or more persons, individually or as a group.
These essential elements are present in this case. Accused-appellants recruited at least four
persons, giving them the impression that they had the capability to send them to Taiwan for employment.
They collected various amounts allegedly for recruitment and placement fees without license or authority
to do so. It is settled that the fact that an accused in an illegal recruitment case did not issue the receipts
for amounts received from the complainants has no bearing on his culpability so long as complainants
show through their respective testimonies and affidavits that the accused was involved in the prohibited
recruitment. Thus, the accused-appellants were guilty of illegal recruitment in large scale.


2011-0050
Case Title: PEOPLE OF THE PHILIPPINES VS. ELENA VERANO Y ABANES

G.R. No.: G.R. No. 90017-18
Date: March 1, 1994
Petitioner: Elena Verano Y Abanes
Facts:
Sometime in October 1987, accused-appellant Elena Verano persuaded the three private
complainants, Jose Daep, Arturo Espiel and Alfonso Abanes to accept overseas employment as
salesmen in Bahrain. In consideration thereof, Alfonso, Arturo and Jose were required to pay P10, 000.00
each to cover the expenses for the processing of their passports, visas and the cost of their plane tickets,
medical examination and recruitment fees. The complainants paid the amount which is covered by
receipts issued and signed by the accused. However, for three times, the accused never showed up and
failed to deliver the plain tickets, passports and visas before the supposed flight to Bahrain. The
complainants then went to the Western Police District Headquarters to lodge their complaint. Accused-
appellant was arrested on the same day and charged with illegal recruitment committed in large scale,
and estafa. After trial, she was sentenced for life imprisonment. On appeal, the accused disputed the
finding of facts. She argues that, she never represented herself as having the capacity to contract
workers for overseas employment; and that she merely introduced private complainants to a certain
Juliet Majestrado who was the one who claimed to have such capacity.
Issue:
Whether or not the finding of fact made by the trial court can be reviewed on appeal
Held:
No, well-settled doctrine that findings of fact made by the trial court are final and conclusive and
cannot be reviewed on appeal. Except for a few recognized instances, which do not apply in the case at
bench, such findings are bindings and will not be reviewed by the Supreme Court for the latter is not a
trier of facts. The issues raised by appellant are purely and indisputably factual, as she herself admits.
Considering that none of the exceptions apply the court would not be justified in reversing the judgment of
conviction.


2011-0050
Case Title: JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM
COUNCIL VS. ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS,
DENNIS JEREZA, HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO and
PLANTERS' COMMITTEE, INC.
G.R. No.: G.R. No. 79310
Date: July 14, 1989
Petitioner: Arsenio Al. Acuna, Newton Jison, Victorino Ferarris, Dennis Jereza, Herminigildo Gustilo,
Paulino D. Tolentino and Planters’ Committee, Inc.
Respondent: Joker Arroyo, Philip E. Juico and Presidential Agrarian Reform
Ponente: J. Cruz
Facts:
The petitioners are landowners and sugar planters in the Victorias Mill District, Victorias, Negros
Occidental and organization composed of 1,400 planter-members which seeks to prohibit the
implementation of Proc. No. 131 and E.O. No. 229. The petitioners claim that the power to provide for a
Comprehensive Agrarian Reform Program as decreed by the Constitution belongs to Congress and not
the President. Although they agree that the President could exercise legislative power until the Congress
was convened, she could do so only to enact emergency measures during the transition period. At that,
even assuming that the interim legislative power of the President was properly exercised, Proc. No. 131
and E.O. No. 229 would still have to be annulled for violating the constitutional provisions on just
compensation, due process, and equal protection.
Proc. No. 131 and E.o. No. 229 were issued by President Corazon Aquino to institute comprehensive
agrarian reform program (CARP) to uphold the P.D. No. 27 which provides for the compulsory acquisition
of private lands for distribution among tenant-farmers and to specify maximum retention limits for
landowners.
Issue:
Whether or not the Proc. No. 131 and E.O. No. 229 are unconstitutional.
Held:
No, the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the
same was authorized under Section 6 of the Transitory Provisions of the 1987 Constitution.
The said measures were issued by President Aquino before July 27, 1987, when the Congress of
the Philippines was formally convened and took over legislative power from her. They are not "midnight"
enactments intended to pre-empt the legislature because measures Proc. No. 131 and E.O. No. 229,
were both issued on July 22, 1987. Neither is it correct to say that these measures ceased to be valid
when she lost her legislative power for, like any statute, they continue to be in force unless modified or
repealed by subsequent law or declared invalid by the courts. A statute does not ipso facto become
inoperative simply because of the dissolution of the legislature that enacted it. By the same token,
President Aquino's loss of legislative power did not have the effect of invalidating all the measures
enacted by her when and as long as she possessed it.

MITCHELLE D. BRACAMONTE
2011-0152
G.R. No. 111870

June 30, 1994
AIR MATERIAL WING SAVINGS AND LOAN ASSOCIATION, INC., petitioner,  vs. NATIONAL LABOR
RELATIONS COMMISSION, et al., respondents.
JUSTICE CRUZ, ponente.
FACTS:
Luis S. Salas was appointed "notarial and legal counsel" for petitioner Air Material Wings Savings
and Loan Association (AMWSLAI) in 1980. AMWSLAI issued order reminding Salas of the approaching
termination of his legal services under their contract. This prompted Salas to lodge a complaint against
AMWSLAI for separation pay, vacation and sick leave benefits, cost of living allowances, refund of SSS
premiums, moral and exemplary damages, payment of notarial services rendered from February 1, 1980
to March 2, 1990, and attorney's fees.
AMWSLAI moved to dismiss for lack of jurisdiction. It averred that there was no employer-
employee relationship between them and that his monetary claims properly fell within the jurisdiction of
the regular courts. Salas opposed the motion and presented documentary evidence to show that he was
indeed an employee of AMWSLAI. AMWSLAI was ordered to pay Salas his notarial fees from 1987 up to
March 2, 1990, and attorney's fee equivalent to 10% of the judgment award. The decision affirmed in toto
by the Commission prompted Air Material Wings Savings and Loan Association (AMWSLAI) to seek relief
in the court.
ISSUE:
Whether or not employer-employee relationship exist in the case at bar?
HELD:
Yes. The court held in their decisions that the elements of an employer-employee relationship
are: (1) selection and engagement of the employee; (2) payment of wages; (3) power of dismissal; and
(4) employer's own power to control employee's conduct. The existence of such a relationship is
essentially a factual question. Which can be substantiated in the present case.
In the case at bar the terms and conditions set out in the letter-contract entered into by the parties
on January 23, 1987, clearly show that Salas was an employee of the petitioner. His selection as the
company counsel was done by the board of directors in one of its regular meetings. The petitioner paid
him a monthly compensation/retainer's fee for his services. Though his appointment was for a fixed term
of three years, the petitioner reserved its power of dismissal for cause or as it might deem necessary for
its interest and protection. No less importantly, AMWSLAI also exercised its power of control over Salas
by defining his duties and functions as its legal counsel.

2011-0152
G.R. No. 100641

June 14, 1993
FARLE P. ALMODIEL, petitioner,  vs. NATIONAL LABOR RELATIONS COMMISSION (FIRST

DIVISION), RAYTHEON PHILS., INC., respondents.
NOCON, J.:
FACTS:
Farle P. Almodiel is a certified public accountant who was hired as Cost Accounting Manager of
Raytheon Philippines, Inc. He started as a probationary or temporary employee. After a few months, he
was regularized. Raytheon adopted and installed a new cost accounting system in their operation which
Raytheon plants and subsidiaries worldwide used. As a consequence, the submission of periodic reports
was no longer needed. Almodiel was told of the abolition of his position on the ground of redundancy.
Thus, constrained him to file the complaint for illegal dismissal.The Labor Arbiter ruled in his favor
declaring that complainant's termination on the ground of redundancy is highly irregular and without legal
and factual basis. On appeal.
NLRC reversed the decision and directed Raytheon to pay petitioner separation pay/financial
assistance. Unsatisfied, Almodiel filed the instant petition averring that the public respondent committed
grave abuse of discretion amounting to or in excess of jurisdiction in declaring as valid and justified the
termination of Almodiel on the ground of redundancy.
Almodiel claims that the functions of his position were absorbed by the Payroll/Mis/Finance
Department under the management of Danny Ang Tan Chai, a resident alien without any working permit
from the Department of Labor and Employment as required by law. Raytheon insists that Almodiel's
functions and duties had not been absorbed by Ang Tan Chai, a permanent resident born in this country,
because they are occupying entirely different and distinct positions requiring different sets of expertise or
qualifications and discharging functions altogether different and foreign from that of petitioner's abolished
position.
ISSUE:
Whether or not the Raytheon Phils., Inc. violates Art. 40 of the Labor Code in employing a
resident alien without a working permit?
HELD:
No. Article 40 of the Labor Code which requires employment permit of no-resident alien . The
employment permit is required for entry into the country for employment purposes and is issued after
determination of the non-availability of a person in the Philippines who is competent, able and willing at
the time of application to perform the services for which the alien is desired. Since Ang Tan Chai is a
resident alien, he does not fall within the ambit of the provision.

In the case at bar, since petitioner does not allege that Ang Tan Chai does not qualify for the
position, the Court cannot substitute its discretion and judgment for that which is clearly and exclusively
management prerogative. To do so would take away from the employer what rightly belongs to him as
aptly explained in National Federation of Labor Unions v. NLRC.
Further, it is a well-settled rule that labor laws do not authorize interference with the employer's
judgment in the conduct of his business. The determination of the qualification and fitness of workers for
hiring and firing, promotion or reassignment are exclusive prerogatives of management. The Labor Code
and its implementing Rules do not vest in the Labor Arbiters nor in the different Divisions of the NLRC
(nor in the courts) managerial authority. The employer is free to determine, using his own discretion and
business judgment, all elements of employment, "from hiring to firing" except in cases of unlawful
discrimination or those which may be provided by law. There is none in the instant case.

MITCHELLE D. BRACAMONTE 
2011-0152 
G.R. No. 87098

November 4, 1996
ENCYCLOPAEDIA BRITANNICA (PHILIPPINES), INC., petitioner, vs. NATIONAL LABOR RELATIONS

COMMISSION, HON. LABOR ARBITER TEODORICO L. ROGELIO and BENJAMIN LIMJOCO,
respondents.
TORRES, JR., J.:
FACTS:
Benjamin Limjoco was a Sales Division Manager of Encyclopaedia Britannica and was in charge
of selling the latter's products through some sales representatives and also allowed to use Encyclopaedia
Britannica's name, goodwill and logo. As agreed upon he will receive commissions from the product sold
by his agent less office expenses from Limjoco's commissions. Britannica will be informed about
appointments, promotions, and transfers of employees in Limjoco's district. That, he was under the
supervision of the Britannica's officials who issued to him and his other personnel, memoranda,
guidelines on company policies, instructions and other orders. Limjoco resigned from office to pursue his
private business. Respondent submitted his resignation letter containing the reasons of his decision
“...was brought about by conflict with other interests which lately have increasingly required my personal
attention....”
Encyclopaedia Britannica alleged that Limjoco was not its employee but an independent dealer
authorized to promote and sell its products and in return, received commissions therefrom. His salary and
his income was dependent on the volume of sales accomplished. Limjoco had his own separate office,
financed the business expenses, and maintained his own workforce. The salaries of his secretary, utility
man, and sales representatives were chargeable to his commissions. Britannica argued that it had no
control and supervision over the complainant as to the manner and means he conducted his business
operations. The latter did not even report to the office of the Britannica and did not observe fixed office
hours. Consequently, there was no employer-employee relationship.
After a year Limjoco filed a claim for his benefits and was granted by Labor Arbiter on appeal to
NLRC which affirmed the decision prompting the petition for certiorari.
ISSUE:
Whether or not there exist an employee-employer relationship in the case at bar?
HELD:
No. The court did not agree with the ruling of NLRC that there existed an employer-employee
relationship and petitioner failed to disprove this finding.

In determining the existence of an employer-employee relationship the following elements must

be present: 1) selection and engagement of the employee; 2) payment of wages; 3) power of dismissal;
and 4) the power to control the employee's conduct. Of the above, control of employee's conduct is
commonly regarded as the most crucial and determinative indicator of the presence or absence of an
employer-employee relationship. Under the control test, an employer-employee relationship exists where
the person for whom the services are performed reserves the right to control not only the end to be
achieved, but also the manner and means to used in reaching that end.
In ascertaining whether the relationship is that of employer-employee or one of independent

contractor, each case must be determined by its own facts and all features of the relationship are to be
considered.
The records of the case at bar showed that there was no such employer-employee
relationship."the element of control is absent; where a person who works for another does so more or less
at his own pleasure and is not subject to definite hours or conditions of work, and in turn is compensated
according to the result of his efforts and not the amount thereof, we should not find that the relationship of
employer and employee exists. In fine, there is nothing in the records to show or would "indicate that
complainant was under the control of the petitioner" in respect of the means and methods in the
performance of complainant's work.
The fact that petitioner issued memoranda to private respondents and to other division sales
managers did not prove that petitioner had actual control over them. The different memoranda were
merely guidelines on company policies which the sales managers follow and impose on their respective
agents. It should be noted that in petitioner's business of selling encyclopedias and books, the marketing
of these products was done through dealership agreements.
The sales operations were primarily conducted by independent authorized agents who did not
receive regular compensations but only commissions based on the sales of the products. These
independent agents hired their own sales representatives, financed their own office expenses, and
maintained their own staff. Thus, there was a need for the petitioner to issue memoranda to private
respondent so that the latter would be apprised of the company policies and procedures. Nevertheless,
private respondent Limjoco and the other agents were free to conduct and promote their sales operations.
The periodic reports to the petitioner by the agents were but necessary to update the company of the
latter's performance and business income and he had to notify the petitioner about such appointments for
purpose of deducting the employees' salaries from his commissions.
Private respondent was merely an agent or an independent dealer of the petitioner. He was free
to conduct his work and he was free to engage in other means of livelihood. At the time he was
connected with the petitioner company, private respondent was also a director and later the president of
the Farmers' Rural Bank. Had he been an employee of the company, he could not be employed
elsewhere and he would be required to devote full time for petitioner. If private respondent was indeed an
employee, it was rather unusual for him to wait for more than a year from his separation from work before
he decided to file his claims. Evidently, Limjoco was aware of "conflict with other interests which . . . have
increasingly required my personal attention". At the very least, it would indicate that petitioner has no
effective control over the personal activities of Limjoco,
Consequently, private respondent is not entitled to the benefits prayed for.

MITCHELLE D. BRACAMONTE 
2011-0152
G.R. No. L-48645

January 7, 1987
"BROTHERHOOD" LABOR UNITY MOVEMENT OF THE PHILIPPINES, ANTONIO CASBADILLO,

PROSPERO TABLADA, ERNESTO BENGSON, PATRICIO SERRANO, ANTONIO B. BOBIAS,
VIRGILIO ECHAS, DOMINGO PARINAS, NORBERTO GALANG, JUANITO NAVARRO, NESTORIO
MARCELLANA, TEOFILO B. CACATIAN, RUFO L. EGUIA, CARLOS SUMOYAN, LAMBERTO
RONQUILLO, ANGELITO AMANCIO, DANILO B. MATIAR, ET AL., petitioners,
vs. HON. RONALDO B. ZAMORA, PRESIDENTIAL ASSISTANT FOR LEGAL AFFAIRS, OFFICE OF
THE PRESIDENT, HON. AMADO G. INCIONG, UNDERSECRETARY OF LABOR, SAN MIGUEL
CORPORATION, GENARO OLIVES, ENRIQUE CAMAHORT, FEDERICO OÑATE, ERNESTO
VILLANUEVA, ANTONIO BOCALING and GODOFREDO CUETO, respondents.
GUTIERREZ, JR., J.:
FACTS:
Petitioners are workers who have been exclusively employed at the San Miguel Parola Glass
Factory averaging about seven (7) years of service at the time of their termination. They worked as
"cargadores" or "pahinante" at the SMC Plant loading, unloading, piling or palleting empty bottles and
woosen shells to and from company trucks and warehouses. At times, they accompanied the company
trucks on their delivery routes.
The petitioners first reported for work to Superintendent-in-Charge Camahort. They were issued
gate passes signed by Camahort and job orders and were provided with company tools, equipment and
paraphernalia used in the loading, unloading, piling and hauling operation. Petitioners were paid every ten
(10) days on a piece rate basis, that is, according to the number of cartons and wooden shells they were
able to load, unload, or pile. Camahort give the final approval of report. The pay check is given to the
group leaders for encashment, distribution, and payment to the petitioners in accordance with payrolls
prepared by said leaders.
The petitioner workers affiliated themselves with the petitioner union and engage in union
activities, they pressed management, airing other grievances such as being paid below the minimum
wage law, inhuman treatment, being forced to borrow at usurious rates of interest and to buy raffle tickets,
coerced by withholding their salaries, and salary deductions made without their consent. However, their
gripes and grievances were not heeded by the respondents.
The petitioner union filed a notice of strike with the Bureau of Labor Relations in connection with
the dismissal of some of its members who were allegedly castigated for their union membership and
warned that should they persist in continuing with their union activities they would be dismissed from their
jobs. The petitioner presented a letter to the respondent company containing proposals and/or labor
demands together with a request for recognition and collective bargaining. Despite several conciliation
conferences, refused to bargain with the petitioner union alleging that the workers are not their
employees. Respondent asserts that the petitioners are employees of the Guaranteed Labor Contractor,
an independent labor contracting firm.

On February 20, 1969, all the petitioners were dismissed from their jobs and, thereafter, denied
entrance to respondent company's glass factory despite their regularly reporting for work. A complaint for
illegal dismissal and unfair labor practice was filed by the petitioners.
The petitioners strongly argue that there exists an employer-employee relationship between them
and the respondent company and that they were dismissed for unionism, an act constituting unfair labor
practice "for which respondents must be made to answer."
ISSUE:
Whether or not an employer-employee relationship exists between petitioners-members of the

"Brotherhood Labor Unit Movement of the Philippines" (BLUM) and respondent San Miguel Corporation.
HELD:
Yes. In determining the existence of an employer-employee relationship, the elements that are
generally considered are the following: (a) the selection and engagement of the employee; (b) the
payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with
respect to the means and methods by which the work is to be accomplished. It. is the called "control test"
that is the most important element (Investment Planning Corp. of the Phils. v. The Social Security System,
21 SCRA 924; Mafinco Trading Corp. v. Ople, supra, and Rosario Brothers, Inc. v. Ople, 131 SCRA 72).
Applying the above criteria, the evidence strongly indicates the existence of an employer-
employee relationship between petitioner workers and respondent San Miguel Corporation.
The court find that Guaranteed and Reliable Labor contractors have neither substantial capital
nor investment to qualify as an independent contractor under the law. The premises, tools, equipment
and paraphernalia used by the petitioners in their jobs are admittedly all supplied by respondent
company. It is only the manpower or labor force which the alleged contractors supply, suggesting the
existence of a "labor only" contracting scheme prohibited by law (Article 106, 109 of the Labor Code;
Section 9(b), Rule VIII, Book III, Implementing Rules and Regulations of the Labor Code).
Documentary evidence presented by the petitioners establish respondent SMC's right to impose
disciplinary measures for violations or infractions of its rules and regulations as well as its right to
recommend transfers and dismissals of the piece workers. The inter-office memoranda submitted in
evidence prove the company's control over the petitioners. That respondent SMC has the power to
recommend penalties or dismissal of the piece workers. There is no evidence to show that the alleged
labor contractor had such right of control or much less had been there to supervise or deal with the
petitioners.

2011-0152
G.R. No. L-43825

May 9, 1988
CONTINENTAL MARBLE CORP. and FELIPE DAVID, petitioner,  vs. NATIONAL LABOR RELATIONS
COMMISSION (NLRC); ARBITRATOR JOSE T. COLLADO and RODITO NASAYAO, respondents.
PADILLA, J.:
FACTS:
Rodito Nasayao claimed that he was appointed plant manager of the corporation and receiving a
compensation of P3,000.00, a month or 25% of the monthly net income of the company, which ever is
greater, when the company failed to give his salary for the months of May, June and July Nasayo filed a
complaint with the NLRC.
Continental Marble Corp., denied the claim of Rodito Nasayao, that the latter was not an
employee of the company, an undertaking agreed upon by the parties as joint venture, a sort of
partnership, wherein Rodito Nasayao was to keep the machinery in good working condition and, in return,
he would get the contracts from end-users for the installation of marble products, in which the company
would not interfere. In addition, private respondent Nasayao was to receive an amount equivalent to 25%
of the net profits that the corporation will earn, should there be any.
The case was submitted for voluntary arbitration and the parties selected Jose T. Collado as
voluntary arbitrator. In the course of the proceeding, Continental Marble Corp., challenged the arbitrator's
capacity to try and decide the case fairly and judiciously and asked him to desist from further hearing the
case. But, the respondent arbitrator refused. Later a judgement was rendered in favor of Rodito Nasayao.
Upon receipt of the decision, Continental Marble Corp., appealed to the National Labor Relations
Commission on grounds that the labor arbiter gravely abused his discretion in persisting to hear and
decide the case notwithstanding petitioners' request for him to desist therefrom: and that the appealed
decision is not supported by evidence.
Rodito Nasayao filed a motion to dismiss the appeal on the ground that the decision of the
voluntary arbitrator is final, unappealable, and immediately executory; and a motion for the issuance of a
writ of execution. The Commission, dismissed the appeal on the ground that the decision appealed from
is final, unappealable and immediately executory. Continental Marble Corp., seek to annul and set aside
the decision.
ISSUE:
Whether or not there exist an employee-employer relationship between Rodito Nasayao and
Continental Marble Corp.?

HELD:
No. The court relied on the so -called "control test" that is the most important element, in
determining the existence of an employer-employee relationship, the elements that are generally
considered are the following: (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to
the means and methods by which the work is to be accomplished.
In the instant case, it appears that the petitioners had no control over the conduct of Rodito
Nasayao in the performance of his work. He decided for himself on what was to be done and worked at
his own pleasure. He was not subject to definite hours or conditions of work and, in turn, was
compensated according to the results of his own effort. He had a free hand in running the company and
its business.
The Court has accorded great respect for, and finality to, findings of fact of a voluntary arbitrator
and administrative agencies which have acquired expertise in their respective fields, like the Labor
Department and the National Labor Relations Commission, their findings of fact and the conclusions
drawn therefrom have to be supported by substantial evidence.
In that instant case, the finding of the voluntary arbitrator that Rodito Nasayao was an employee
of the petitioner corporation is not supported by the evidence or by the law.
The court find the version of the petitioners to be more plausible and in accord with human nature
and the ordinary course of things. As pointed out by the petitioners, it was illogical for them to hire the
private respondent Rodito Nasayao as plant manager with a monthly salary of P3,000.00, an amount
which they could ill-afford to pay, considering that the business was losing, at the time he was hired, and
that they were about to close shop in a few months' time.
Besides, there is nothing in the record which would support the claim of Rodito Nasayao that he
was an employee of the petitioner corporation. He was not included in the company payroll, nor in the list
of company employees furnished the Social Security System.
Most of all, the element of control is lacking. Absent the power to control the employee with
respect to the means and methods by which his work was to be accomplished, there was no employer-
employee relationship between the parties. Hence, there is no basis for an award of unpaid salaries or
wages to Rodito Nasayao.

2011-0152
G.R. No. L-2216

January 31, 1950
DEE C. CHUAN & SONS, INC., petitioner,  vs. THE COURT OF INDUSTRIAL RELATIONS,
CONGRESS OF LABOR ORGANIZATIONS (CLO), KAISAHAN NG MGA MANGGAGAWA SA KAHOY
SA PILIPINAS and JULIAN LUMANOG AND HIS WORK-CONTRACT LABORERS, respondents.
TUASON, J.:
FACTS:
During the trial of an industrial dispute between Dee C. Chuan & Sons, Inc., and the respondent
labor union, the former applied to the Court of Industrial Relations for authority "to hire about twelve more
laborers from time to time and on a temporary basis, to be chosen by the petitioner from either Filipinos or
Chinese." the court granted the authority applied for but imposed as a condition that the majority of the
twelve new laborers to be hired "should be native and only a nominal percentage thereof alien." In
imposing such condition Dee C. Chuan & Sons, Inc. assails the validity of the order of the Court of
Industrial Relations.
That, the Court of Industrial Relations cannot intervene in questions of selection of employees
and workers so as to impose unconstitutional restrictions," and that "The restrictions of the number of
aliens that nay be employed in any business, occupation, trade or profession of any kind, is a denial of
the equal protection of the laws."
ISSUE:
Whether or not an order issued by CIR limiting alien employment violates the equal protection of
the laws?
HELD:
No. The information does not name the persons who are supposed to be denied the equal
protection of the laws, it is clearly to be inferred that aliens in general are in petitioner's mind. An alien
may question the constitutionality of a statute (or court order) only when and so far as it is being, or is
about to be, applied to his disadvantage.
The decision is rooted under "Commonwealth Act No. 103 has precisely vested the Court of
Industrial Relations with authority to intervene in all disputes between employees or strikes arising from
the difference as regards wages, compensation, and other labor conditions which it may take cognizance
of."
The employer's right to hire labor is not absolute. "This privilege of hiring and firing ad libitum is,
of course, being subjected to restraints today."
The legislature has the power to make regulations subject only to the condition that they should
be affected with public interest and reasonableness under the circumstances.The power may be
exercised directly by the law-making body or delegated by appropriate rules to the courts or
administrative agencies. The court is in opinion that the order under consideration meets the test of
reasonableness and public interest.

2011-0152
G.R. No. L-32245

May 25, 1979
DY KEH BENG, petitioner,  vs. INTERNATIONAL LABOR and MARINE UNION OF THE PHILIPPINES,
ET AL., respondents.
DE CASTRO, J.:
FACTS:
Dy Keh Beng, proprietor of a basket factory was charge of unfair labor practice for discriminatory
acts within the meaning of Section 4(a), sub-paragraph (1) and (4). Republic Act No. 875, by dismissing
on September 28 and 29, 1960, respectively, Carlos N. Solano and Ricardo Tudla for their union
activities. After preliminary investigation was conducted, a case was filed in the Court of Industrial
Relations for in behalf of the International Labor and Marine Union of the Philippines and two of its
members, Solano and Tudla.
Dy Keh Beng contended that he did not know Tudla and that Solano was not his employee
because the latter came to the establishment only when there was work which he did on pakiaw basis,
each piece of work being done under a separate contract. That the private respondents "did not meet the
control test in the fight of the ... definition of the terms employer and employee, because there was no
evidence to show that petitioner had the right to direct the manner and method of respondent's work.
Moreover, it is argued that petitioner's evidence showed that "Solano worked on a pakiaw basis" and that
he stayed in the establishment only when there was work.
The Court of Industrial Relations in their decision found the petitioner guilty of unfair labor
practice. Prompted the petitioner to seek review by certiorari.
ISSUE:
Whether there existed an employee employer relation between petitioner Dy Keh Beng and the
respondents Solano and Tudla?
HELD:
Yes. An employee-employer relationship was found to have existed between Dy Keh Beng and
complainants Tudla and Solano, although Solano was admitted to have worked on piece basis.
The evidence for the complainant Union tended to show that Solano and Tudla became
employees of Dy Keh Beng from May 2, 1953 and July 15, 1955, respectively, and that except in the
event of illness, their work with the establishment was continuous although their services were
compensated on piece basis. Evidence likewise showed that at times the establishment had eight (8)
workers and never less than five (5); including the complainants, and that complainants used to receive
?5.00 a day. sometimes less.

The Court upholds the control test under which an employer-employee relationship exists "where
the person for whom the services are performed reserves a right to control not only the end to be
achieved but also the means to be used in reaching such end, " It should be borne in mind that the control
test calls merely for the existence of the right to control the manner of doing the work, not the actual
exercise of the right.
Findings shows that the establishment of Dy Keh Beng is "engaged in the manufacture of baskets
known as kaing, it is natural to expect that those working under Dy would have to observe, among
others, Dy's requirements of size and quality of the kaing. Some control would necessarily be exercised
by Dy as the making of the kaing would be subject to Dy's specifications. Parenthetically, since the work
on the baskets is done at Dy's establishments, it can be inferred that the proprietor Dy could easily
exercise control on the men he employed.

2011-0152
G.R. No. 75112

August 17, 1992
FILAMER CHRISTIAN INSTITUTE, petitioner,  vs. 

HON. INTERMEDIATE APPELLATE COURT, HON. ENRIQUE P. SUPLICO, in his capacity as Judge of
the Regional Trial Court, Branch XIV, Roxas City and POTENCIANO KAPUNAN, SR., respondents.
GUTIERREZ, JR., J.:
FACTS:
Potenciano Kapunan, Sr., seeking reconsideration on the decision rendered by this Court on
October 16, 1990 which ruled that the Filamer is not liable for the injuries caused by Funtecha on the
grounds that the latter was not an authorized driver, that Funtecha was merely a working scholar who,
under Section 14, Rule X, Book III of the Rules and Regulations Implementing the Labor Code is not
considered an employee of the Filamer.
Potenciano Kapunan, Sr., assert that the circumstances in the present case call for the
application of Article 2180 of the Civil Code since Funtecha is no doubt an employee of Filamer. That
under Article 2180 an injured party shall have recourse against the servant as well as the Filamer for
whom, at the time of the incident, the servant was performing an act in furtherance of the interest and for
the benefit of the Institute. Funtecha allegedly did not steal the school jeep nor use it for a joy ride without
the knowledge of the school authorities.
Funtecha was a working student, being a part-time janitor and a scholar of petitioner Filamer. He
was, in relation to the school, an employee assigned to clean the school premises for only two (2) hours
in the morning of each school day. While on their way home one late afternoon Funtecha requested the
driver, Allan Masa to drive, and was allowed. It is significant to note that the place where Allan lives is
also the house of his father, the school president, Agustin Masa. Moreover, it is also the house where
Funtecha was allowed free board while he was a student of Filamer Christian Institute. Hence, under their
supervision.
ISSUE:
Whether or not Section 14, Rule X, Book III of the Rules and Regulations Implementing the Labor
Code can be invoked in the case at bar?
HELD:
No. The court after a re-examination of the laws relevant to the facts, reinstate the Court of
Appeals' decision, applying Civil Code provisions. The Court reconsiders its decision.

Section 14, Rule X, Book III of the Rules implementing the Labor Code, on which the petitioner
anchors its defense, was promulgated by the Secretary of Labor and Employment only for the purpose of
administering and enforcing the provisions of the Labor Code on conditions of employment. Particularly,
Rule X of Book III provides guidelines on the manner by which the powers of the Labor Secretary shall be
exercised; on what records should be kept; maintained and preserved; on payroll; and on the exclusion of
working scholars from, and inclusion of resident physicians in the employment coverage as far as
compliance with the substantive labor provisions on working conditions, rest periods, and wages, is
concerned.
In other words, Rule X is merely a guide to the enforcement of the substantive law on labor. The
Court, thus, makes the distinction and so holds that Section 14, Rule X, Book III of the Rules is not the
decisive law in a civil suit for damages instituted by an injured person during a vehicular accident against
a working student of a school and against the school itself.
It is undisputed that Funtecha was a working student, being a part-time janitor and a scholar of
petitioner Filamer. He was, in relation to the school, an employee even if he was assigned to clean the
school premises for only two (2) hours in the morning of each school day.
In learning how to drive while taking the vehicle home in the direction of Allan's house, Funtecha
definitely was not having a joy ride. Funtecha was not driving for the purpose of his enjoyment or for a
"frolic of his own" but ultimately, for the service for which the jeep was intended by the petitioner school.
Therefore, the Court is constrained to conclude that the act of Funtecha in taking over the steering wheel
was one done for and in behalf of his employer for which act the petitioner-school cannot deny any
responsibility by arguing that it was done beyond the scope of his janitorial duties. The clause "within the
scope of their assigned tasks" for purposes of raising the presumption of liability of an employer, includes
any act done by an employee, in furtherance of the interests of the employer or for the account of the
employer at the time of the infliction of the injury or damage.
The fact that Funtecha was not the school driver or was not acting within the scope of his
janitorial duties does not relieve the petitioner of the burden of rebutting the presumption juris tantum that
there was negligence on its part either in the selection of a servant or employee, or in the supervision
over him. The petitioner has failed to show proof of its having exercised the required diligence of a good
father of a family over its employees Funtecha and Allan.
The present case does not deal with a labor dispute on conditions of employment between an
alleged employee and an alleged employer. It invokes a claim brought by one for damages for injury
caused by the patently negligent acts of a person, against both doer-employee and his employer. Hence,
the reliance on the implementing rule on labor to disregard the primary liability of an employer under
Article 2180 of the Civil Code is misplaced. An implementing rule on labor cannot be used by an employer
as a shield to avoid liability under the substantive provisions of the Civil Code.
The petitioner, thus, has an obligation to pay damages for injury arising from the unskilled manner
by which Funtecha drove the vehicle. The liability of the employer is, under Article 2180, primary and
solidary. However, the employer shall have recourse against the negligent employee for whatever
damages are paid to the heirs of the plaintiff.

2011-0152
G.R. No. 93666

April 22, 1991
GENERAL MILLING CORPORATION and EARL TIMOTHY CONE, petitioners,  vs. 

HON. RUBEN D. TORRES, in his capacity as Secretary of Labor and Employment, HON. BIENVENIDO
E. LAGUESMA, in his capacity as Acting Secretary of Labor and Employment, and BASKETBALL
COACHES ASSOCIATION OF THE PHILIPPINES, respondents.
FELICIANO, J.:
FACTS:
The National Capital Region of the Department of Labor and Employment issued Alien
Employment Permit No. M-0689-3-535 to petitioner Earl Timothy Cone, a United States citizen, as sports
consultant and assistant coach for General Milling Corporation ("GMC"). GMC and Cone entered into a
contract of employment whereby the latter undertook to coach GMC's basketball team.
On 9 February 1990, GMC requested renewal of Cone's alien employment permit. GMC also
requested that it be allowed to employ Cone as full-fledged coach. DOLE granted the request on 15
February 1990 under Alien Employment Permit No. M-02903-881, valid until 25 December 1990.
Basketball Coaches Association of the Philippines ("BCAP") appealed the issuance of said alien
employment permit to the respondent Secretary of Labor who, on 23 April 1990, issued a decision
ordering cancellation of Cone's employment permit on the ground that there was no showing that there is
no person in the Philippines who is competent, able and willing to perform the services required nor that
the hiring of Cone would redound to the national interest.
GMC filed a Motion for Reconsideration and two (2) Supplemental Motions for Reconsideration
but said Motions were denied. Petition for Certiorari was filed on the court.
GMC's claim that hiring of a foreign coach is an employer's prerogative.
ISSUE:
Whether or not Secretary of Labor gravely abuse his discretion in rendering decision revoking
petitioner Cone's Alien Employment Permit?
HELD:
No. The Court ruled that petitioners have failed to show that Secretary of Labor acted with grave
of discretion in revoking petitioner Cone's Alien Employment Permit.

Petitioner GMC's claim that hiring of a foreign coach is an employer's prerogative has no legal
basis at all. Under Article 40 of the Labor Code, an employer seeking employment of an alien must first
obtain an employment permit from the Department of Labor. Petitioner GMC's right to choose whom to
employ is, of course, limited by the statutory requirement of an alien employment permit.
There is no showing of the non-availability of a person in the Philippines who is competent, able
and willing at the time of application to perform the services required nor that the hiring of petitioner Cone
would redound to the national interest.
The Labor Code itself specifically empowers respondent Secretary to make a determination as to
the availability of the services of a "person in the Philippines who is competent, able and willing at the
time of application to perform the services for which an alien is desired." In short, the Department of Labor
is the agency vested with jurisdiction to determine the question of availability of local workers. The
constitutional validity of legal provisions granting such jurisdiction and authority and requiring proof of
non-availability of local nationals able to carry out the duties of the position involved, cannot be seriously
questioned.

2011-0152
G.R. No. 114337

September 29, 1995
NITTO ENTERPRISES, petitioner,  

vs. NATIONAL LABOR RELATIONS COMMISSION and ROBERTO CAPILI, respondents.
KAPUNAN, J.:
FACTS:
Respondent Roberto Capili was hired by petitioner Nitto Enterprise, a company engage in the
sale of glass and aluminum products, sometime in May 1990 as an apprentice machinist, molder and
core maker, thru an apprenticeship agreement for a period of six (6) months from May 28, 1990 to
November 28, 1990. An accidents happened because of respondents improper attitude towards work,
and asked to resign.
On August 3, 1990 private respondent executed a Quitclaim and Release in favor of petitioner for
and in consideration of the sum of P1,912.79. After three days, private respondent formally filed before
the NLRC Arbitration Branch, National Capital Region a complaint for illegal dismissal and payment of
other monetary benefits. The Labor Arbiter rendered his decision finding the termination of private
respondent as valid and dismissing the money claim for lack of merit.
On July 26, 1993, the National Labor Relations Commission issued an order reversing the
decision of the Labor Arbiter, directed to reinstate complainant to his work with backwages, and declared
that private respondent was a regular employee of petitioner. Hence, the instant petition for certiorari.
ISSUE:
Whether or not there exist an employer-apprentice relationship between petitioner and private
respondent in the case at bar?
HELD:
No. Based on the evidence, petitioner did not comply with the requirements of the law. It is
mandated that apprenticeship agreements entered into by the employer and apprentice shall be entered
only in accordance with the apprenticeship program duly approved by the Minister of Labor and
Employment.
Prior approval by the Department of Labor and Employment of the proposed apprenticeship
program is, therefore, a condition sine quo non before an apprenticeship agreement can be validly
entered into. The act of filing the proposed apprenticeship program with the Department of Labor and
Employment is a preliminary step towards its final approval and does not instantaneously give rise to an
employer-apprentice relationship.

Since the apprenticeship agreement between petitioner and private respondent has no force and
effect in the absence of a valid apprenticeship program duly approved by the DOLE, private respondent's
assertion that he was hired not as an apprentice but as a delivery boy ("kargador" or "pahinante")
deserves credence. He should rightly be considered as a regular employee of petitioner as defined by
Article 280 of the Labor Code.
Article 57 of the Labor Code provides that the State aims to "establish a national apprenticeship
program through the participation of employers, workers and government and non-government agencies"
and "to establish apprenticeship standards for the protection of apprentices." To translate such objectives
into existence, prior approval of the DOLE to any apprenticeship program has to be secured as a
condition sine qua non before any such apprenticeship agreement can be fully enforced.
Pursuant to the constitutional mandate to "protect the rights of workers and promote their
welfare."

2011-0152
G.R. No. L-41182-3

April 16, 1988
DR. CARLOS L. SEVILLA and LINA O. SEVILLA, petitioners-appellants,  vs. THE COURT OF

APPEALS, TOURIST WORLD SERVICE, INC., ELISEO S.CANILAO, and SEGUNDINA NOGUERA,
respondents-appellees.
SARMIENTO , J.:
FACTS:
On the strength of a contract entered into by and between Mrs. Segundina Noguera, and the
Tourist World Service, Inc., leased the premises at Mabini St., Manila for the former's use as a branch
office. In the said contract Una Sevilla held herself solidarily liable with the parties for the prompt payment
of the monthly rental agreed on. Mrs. Sevilla did not receive any salary from Tourist World Service, Inc.,
which had its own, separate office located at the Trade Commerce Building; Mrs. Sevilla earned
commissions for her own passengers, her own bookings her own business obtained from the airline
companies. She shared the 7% commissions given by the airline companies giving Tourist World Service,
Lic. 3% thereof aid retaining 4% for herself. Mrs. Sevilla likewise shared in the expenses of maintaining
the A. Mabini St. office, paying for the salary of an office secretary
It was the understanding between them that appellant Mrs. Sevilla would be given the title of
branch manager for appearance's sake only. Tourist World Service, Inc., maintains, that the relation
between the parties was in the character of employer and employee.
ISSUE:
Whether or not there exist an employee-employer relationship between Mrs. Sevilla and Tourist
World Service, Inc.?
HELD:
No. In this jurisdiction, there has been no uniform test to determine the evidence of an employer-
employee relation. In general, we have relied on the so-called right of control test, "where the person for
whom the services are performed reserves a right to control not only the end to be achieved but also the
means to be used in reaching such end." Subsequently, however, we have considered, in addition to the
standard of right-of control, the existing economic conditions prevailing between the parties, like the
inclusion of the employee in the payrolls, in determining the existence of an employer-employee
relationship.
In the case at bar, Lina Sevilla, was not subject to control by the private respondent Tourist World
Service, Inc., either as to the result of the enterprise or as to the means used in connection therewith. In
the first place, under the contract of lease covering the Tourist Worlds Ermita office, she had bound
herself in solidum as and for rental payments. A true employee cannot be made to part with his own
money in pursuance of his employer's business, or otherwise, assume any liability thereof. In that event,
the parties must be bound by some other relation, but certainly not employment.

Although, fares by any airline brought in on the effort of Mrs. Sevilla were payable to Tourist
World services, under these circumstances, it cannot be said that Sevilla was under the control of Tourist
World Service, Inc. "as to the means used." Sevilla in pursuing the business, obviously relied on her own
gifts and capabilities.
It is further admitted that Sevilla was not in the company's payroll.
The fact that Sevilla had been designated 'branch manager" does not make her, ergo, Tourist
World's employee. As we said, employment is determined by the right-of-control test and certain
economic parameters. But titles are weak indicators.

2011-0152
G.R. No. L-80680

January 26, 1989
DANILO B. TABAS, EDUARDO BONDOC, RAMON M. BRIONES, EDUARDO R. ERISPE, JOEL

MADRIAGA, ARTHUR M. ESPINO, AMARO BONA, FERDINAND CRUZ, FEDERICO A. BELITA,
ROBERTO P. ISLES, ELMER ARMADA, EDUARDO UDOG, PETER TIANSING, MIGUELITA
QUIAMBOA, NOMER MATAGA, VIOLY ESTEBAN and LYDIA ORTEGA, petitioners,  vs. CALIFORNIA
MANUFACTURING COMPANY, INC., LILY-VICTORIA A. AZARCON, NATIONAL LABOR RELATIONS
COMMISSION, and HON. EMERSON C. TUMANON, respondents.
SARMIENTO, J.:
FACTS:
The petitioners petitioned the National Labor Relations Commission for reinstatement and
payment of various benefits, including minimum wage, overtime pay, holiday pay, thirteen-month pay, and
emergency cost of living allowance pay, against the respondent, the California Manufacturing Company.
California denied the existence of an employer-employee relation between the petitioners and the
company and impleaded Livi Manpower Services, Inc. as a party-respondent.
Petitioners were assigned to work as "promotional merchandisers" for California pursuant to a

manpower supply agreement. The agreement provided that California "has no control or supervisions
whatsoever over Livi's workers with respect to how they accomplish their work or perform California's
obligation"; the Livi "is an independent contractor and nothing herein contained shall be construed as
creating between California and Livi . . . the relationship of principal-agent or employer-employee'; that "it
is hereby agreed that it is the sole responsibility of Livi to comply with all existing as well as future laws,
rules and regulations pertinent to employment of labor" and that "California is free and harmless from any
liability arising from such laws or from any accident that may befall workers and employees of Livi while in
the performance of their duties for California.
It was further expressly stipulated that the assignment of workers to California shall be on a
"seasonal and contractual basis"; that "cost of living allowance and the 10 legal holidays will be charged
directly to California at cost "; and that "payroll for the preceding week shall be delivered by Livi at
California's premises."
The petitioners were then made to sign employment contracts with durations of six months, upon
the expiration of which they signed new agreements with the same period. Pending proceeding they were
notified by California that they would not be rehired. As a result, they filed an amended complaint
charging California with illegal dismissal.
ISSUE:
Whether or not there exist an employee-employer relationship between petitioners and California
Manufacturing Company?

HELD:
Yes. The existence of an employer-employees relation is a question of law and being such, it
cannot be made the subject of agreement. Hence, the fact that the manpower supply agreement between
Livi and California had specifically designated the former as the petitioners' employer and had absolved
the latter from any liability as an employer, will not erase either party's obligations as an employer, if an
employer-employee relation otherwise exists between the workers and either firm. At any rate, since the
agreement was between Livi and California, they alone are bound by it, and the petitioners cannot be
made to suffer from its adverse consequences.
The Court has consistently ruled that the determination of whether or not there is an employer-
employee relation depends upon four standards: (1) the manner of selection and engagement of the
putative employee; (2) the mode of payment of wages; (3) the presence or absence of a power of
dismissal; and (4) the presence or absence of a power to control the putative employee's conduct. Of the
four, the right-of-control test has been held to be the decisive factor.
The fact that the petitioners have allegedly admitted being Livi's "direct employees" in their
complaints is nothing conclusive. For one thing, the fact that the petitioners were (are), will not absolve
California since liability has been imposed by legal operation. For another, and as the court indicated, the
relations of parties must be judged from case to case and the decree of law, and not by declarations of
parties.
In the case at bar, Livi is admittedly an "independent contractor providing temporary services of
manpower to its client. " When it thus provided California with manpower, it supplied California with
personnel, as if such personnel had been directly hired by California. Hence, Article 106 of the Code
applies.
The Court need not therefore consider whether it is Livi or California which exercises control over
the petitioner vis-a-vis the four barometers referred to earlier, since by fiction of law, either or both
shoulder responsibility.
The records show that the petitioners bad been given an initial six-month contract, renewed for
another six months. Accordingly, under Article 281 of the Code, they had become regular employees-of-
California-and had acquired a secure tenure. Hence, they cannot be separated without due process of
law.
The court reiterate that the petitioners are its employees and who, by virtue of the required one-
year length-of-service, have acquired a regular status.

2011-0152
G.R. No. 100665

February 13, 1995
ZANOTTE SHOES/LEONARDO LORENZO, petitioners,  vs. NATIONAL LABOR RELATIONS

COMMISSION, HON. BENIGNO C. VILLARENTE, JR., JOSEPH LLUZ, LOLITO LLUZ, NOEL
ADARAYAN, ROGELIO SIRA, VIRGINIA HERESANO, GENELITO HERESANO and CARMELITA DE
DIOS, respondents.
VITUG, J.:
FACTS:
Private respondents filed a complaint for illegal dismissal to Zanotte Shoes. Private respondents
averred that they started to work for petitioners on, respectively, the following dates:
NAME DATE
1. Joseph Lluz March, 1985
2. Noel Adarayan Feb. 17, 1980
3. Rogelio Sira January, 1982
4. Lolito Lluz March, 1982
5. Virginia Heresano May, 1987
6. Genelito Heresano 20-Oct-87
7. Carmelita de Dios January, 1975 1
that they worked for a minimum of twelve hours daily, including Sundays and holidays when needed; that
they were paid on piece-work basis; that it "angered" Lorenzo when they requested to be made members
of the Social Security System ("SSS"); and that, when they demanded an increase in their pay rates, they
were prevented from entering the work premises.
Zanotte Shoes, claimed that their business operations were only seasonal, normally twice a year,
one in June (coinciding with the opening of school classes) and another in December (during the
Christmas holidays), when heavy job orders would come in. Private respondents, according to Zanotte,
were engaged on purely contractual basis and paid the rates conformably with their respective
agreements. Labor Arbiter Benigno C. Villarente, Jr., rendered judgment in favor of the complainants,
ordered to pay the separation pay and all other cost. On appeal, NLRC sustained the findings of the
Labor Arbiter and dismissed the appeal, denied motion for reconsideration. Hence the instant petition.
ISSUE:
Whether an employer-employee relationship existed between petitioners and private

respondents?

HELD:
Yes. Well-settled is the rule that factual findings of the NLRC, particularly when they coincide with
that of the Labor Arbiter, are accorded respect, if not finality, and will not be disturbed absent any showing
that substantial evidence which might otherwise affect the result of the case has been discarded.
The court see no reason, in this case at bench, for disturbing the findings of the Labor Arbiter and
the NLRC on the existence of an employer-employee relationship between herein private parties.
The work of private respondents is clearly related to, and in the pursuit of, the principal business
activity of petitioners. The indicia used for determining the existence of an employer-employee
relationship, all extant in the case at bench, include (a) the selection and engagement of the employee;
(b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the
employee with respect to the result of the work to be done and to the means and methods by which the
work to be done and to the means and methods by which the work is to be accomplished. The
requirement, so herein posed as an issue, refers to the existence of the right to control and not
necessarily to the actual exercise of the right. Citing Dy Keh Beng v. International Labor and Marine
Union of the Philippines, et al.,

Delatado, Darwin A.
2011-0125
Case Title: AIR MATERIAL WING SAVINGS AND LOAN ASSOCIATION, INC., vs.
NATIONAL LABOR RELATIONS COMMISSION, et al.,
G.R. No.: G.R. No. 111870
Date: June 30, 1994
Petitioner: Air Material Wing Savings and Loan Association, Inc.
Respondent: National Labor Relations Commission, et. al.
Potente: CRUZ, J.:
Facts:
Private respondent Luis S. Salas was appointed "notarial and legal counsel" for petitioner Air Material
Wings Savings and Loan Association (AMWSLAI) in 1980 and then it was renewed for three years in
1987. On January 9, 1990, the petitioner issued another order reminding Salas of the approaching
termination of his legal services under their contract. This prompted Salas to lodge a complaint against
AMWSLAI for separation pay, vacation and sick leave benefits, cost of living allowances, refund of SSS
premiums, moral and exemplary damages, payment of notarial services rendered from February 1, 1980
to March 2, 1990, and attorney's fees.
Petitioner filed motion to dismiss for lack of jurisdiction. it agued that there was no employer employee
relationship, however the motion was denied. The parties were ordered to submit their position paper but
AMWSLAI did not comply. Never the less the Labor Arbiter found out that Salas was not illegally
dismissed and so not entitled to collect separation benefits. His claims for vacation leave, sick leave,
medical and dental allowances and refund of SSS premiums were rejected on the ground that he was a
managerial employee. He was also denied moral and exemplary damages for lack of evidence of bad
faith on the part of AMWSLAI. Neither was he allowed to collect his notarial fees from 1980 up to 1986
because the claim therefor had already prescribed. However, the petitioner was ordered to pay Salas his
notarial fees from 1987 up to March 2, 1990, and attorney's fee equivalent to 10% of the judgment award.
On appeal the decision was affirmed in toto by the NLRC.
Issue:
Whether or not Salas can be considered as an employee of the company?

Whether or not he is entitled to collect notarial fees.
Held:
Existence of employer-employee relationship can be determined through the four fold test, the elements
are: (1) selection and engagement of the employee; (2) payment of wages; (3) power of dismissal; and
(4) employer's own power to control employee's conduct. The existence of such a relationship is
essentially a factual question. The terms and conditions set out in the letter-contract entered into by the
parties on January 23, 1987, clearly show that Salas was an employee of the petitioner. His selection as
the company counsel was done by the board of directors in one of its regular meetings. The petitioner
paid him a monthly compensation/retainer's fee for his services. Though his appointment was for a fixed
term of three years, the petitioner reserved its power of dismissal for cause or as it might deem necessary
for its interest and protection. No less importantly, AMWSLAI also exercised its power of control over
Salas by defining his duties and functions as its legal counsel.

A lawyer like any other professional may very well be an employee of a big company. Some lawyers are
hired as regular members of the company's staff, at the same time may contract with law firms to act as
outside counsel on a retainer basis. Both groups of lawyers often work closely together, only that the one
is an employee while the other group is not.
With regard to the payment of notarial fees, the court does not agree with the findings of the decision of
NLRC. There is no evidence to support that his notarial services will be paid separately. The letter-
contract of January 23, 1987, does not contain any stipulation for the separate payment of notarial fees to
Salas in addition to his basic salary. On the contrary, it would appear that his notarial services were part
of his regular functions and were thus already covered by his monthly compensation.
SC affirmed the NLRC decision but modified it by deleting the payment of notarial fees and the award of
attorney's fees.

Delatado, Darwin A.
2011-0125
Case Title: ANGELINA FRANCISCO vs. NLRC

G.R. No.: 170087
Petitioner: Angelina Francisco
Respondents: NLRC, Kasei Corp., Seiichiro Takahashi, Timoteo Acedo, Delfin
Liza, Irene Ballesteros, Trinidad Liza, and Ramon Escueta
Ponente: YNARES-SANTIAGO, J.:
Facts:
In 1995, petitioner was hired by Kasei Corporation with the designation as Accountant and Corporate
Secretary and was assigned to handle all the accounting needs of the company. She was also
designated as Liaison Officer to the City of Makati to secure business permits, construction permits and
other licenses for the initial operation of the company.
In 1996, petitioner was designated Acting Manager. She was tasked to handle recruitment of all
employees and performs management administration functions; represent the company in all dealings
with government agencies, especially with the BIR, SSS and in the city government of Makati; and to
administer all other matters pertaining to the operation of Kasei Restaurant which is owned and operated
by Kasei Corporation. For five years, she manned this position. As of December 31, 2000 her salary was
P27,500.00 plus P3,000.00 housing allowance and a 10% share in the profit of Kasei Corporation.
In January 2001, petitioner was replaced by Liza R. Fuentes as Manager. Her salary was reduced to
P2500.00. Even worst the company stopped paying her reasoning that the company is not profiting.
Petitioner then filed an action for constructive dismissal against respondent company. The company
contended that she was not their employee, rather they only engaged her as technical consultant. As
technical consultant, petitioner performed her work at her own discretion without control and supervision
of Kasei Corporation. To prove further, they presented documents showing that she was not included in
the employees reported to BIR.
Labor Arbiter ruled in her favor, affirmed by NLRC but CA reversed the decision, thus this petition.
Issue:
Whether or not petitioner was an employee of Kasei Corporation.

Whether on not petitioner was illegally dismissed.

Held:
Generally the courts rely on the control test to determine the existence of employer-employee
relationship, but sometimes it was proved insufficient thus the necessity to adopt the two-tiered test which
would take into consideration the totality of circumstances surrounding the true nature of the relationship
between the parties. This is especially appropriate in this case where there is no written agreement or
terms of reference to base the relationship on; and due to the complexity of the relationship based on the
various positions and responsibilities given to the worker over the period of the latter’s employment. The
two-tiered test involve (1) the putative employer’s power to control the employee with respect to the
means and methods by which the work is to be accomplished; and (2) the underlying economic realities
of the activity or relationship.
Thus, the determination of the relationship between employer and employee depends upon the
circumstances of the whole economic activity, such as: (1) the extent to which the services performed are
an integral part of the employer’s business; (2) the extent of the worker’s investment in equipment and
facilities; (3) the nature and degree of control exercised by the employer; (4) the worker’s opportunity for
profit and loss; (5) the amount of initiative, skill, judgment or foresight required for the success of the
claimed independent enterprise; (6) the permanency and duration of the relationship between the worker
and the employer; and (7) the degree of dependency of the worker upon the employer for his continued
employment in that line of business.
By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation
because she was under the direct control and supervision of Seiji Kamura, the corporation’s Technical
Consultant. She reported for work regularly and served in various capacities as Accountant, Liaison
Officer, Technical Consultant, Acting Manager and Corporate Secretary, with substantially the same job
functions, that is, rendering accounting and tax services to the company and performing functions
necessary and desirable for the proper operation of the corporation such as securing business permits
and other licenses over an indefinite period of engagement. The company also registered her in the SSS.
She received regular compensation, bonus and other emoluments.
Evidence gave no other conclusion that petitioner is an employee of respondent Kasei Corporation. With
the above realities it is indeed certain that petitioner is the employee of the company. And that she was
constructively dismissed when her salary was reduced to P2500 which amount to illegal dismissal.
SC set aside CA decision and reinstated NLRC decision.

Delatado, Darwin A.
2011-0125
Case Title: ENCYCLOPAEDIA BRITANNICA (PHILIPPINES), INC., vs.

NLRC
G.R. No.: 87098
Petitioner(s): Encyclopedia Britanica (Philippines), Inc.
Respondent (s): NLRC, Labor Arbiter Teodorico Rogelio and Benjamin Limjoco
Ponente: Torres, Jr., J.:
Facts:
Benjamin Limjoco was a sales division manager of Encyclopedia Britanica. Limjoco has his own agents
on which he receives commission out of their sales. Limjoco and petitioner Britanica agreed however that
office expenses will be deducted from his commission. On June 14 1974, Limjoco resigned to pursue his
own business. On October 30, 1975 he filed a complaint against petitioner Encyclopedia Britannica with
the Department of Labor and Employment, claiming for non-payment of separation pay and other
benefits, and also for illegal deduction from his sales commissions.
Petitioner argued that respondent is not its employee but an independent dealer who received
commission there from. Respondent insisted his claim that he was indeed an employee of respondent
company assigned at the sales department earning an average monthly income of P4, 000.00 as his
sales commission. He further claimed that he was under the supervision of the petitioner's officials who
issued to him and his other personnel, memoranda, guidelines on company policies, instructions and
other orders. Petitioner argued that it had no control and supervision over the complainant as to the
manner and means he conducted his business operations. The latter did not even report to the office of
the petitioner and did not observe fixed office hours. Consequently, there was no employer-employee
relationship.
The Labor Arbiter decided in favor of respondent Limjoco, later affirmed by the NLRC, hence this petition.
Issue:
Whether or not respondent Limjoco is and employee of petitioner Encyclopedia Britanica.
Held:
The court held that respondent Limjoco is not an employee of Encyclopedia Britanica. He was merely an
agent or independent dealer of the company.
In determining the existence of an employer-employee relationship the following elements must be

present: 1) selection and engagement of the employee; 2) payment of wages; 3) power of dismissal; and
4) the power to control the employee's conduct. Of the above, control of employee's conduct is commonly
regarded as the most crucial and determinative indicator of the presence or absence of an employer-
employee relationship.

Although the company issued memoranda to respondent does not sufficiently prove that indeed the
company has control over Limjoco. In fact it only issued such memoranda merely to set up guidelines and
policies which the sales managers follow and impose on their respective agents. The issuance of such
memoranda was done by the petitioner only to notify the respondent and other sales manager of the
company's policies and procedures. Nevertheless, private respondent Limjoco and the other agents were
free to conduct and promote their sales operations. Furthermore, the fixing of the price by petitioner was
only for the purpose of uniformity, but never the less respondent is free to conduct his own marketing
operations. Finally, respondent was absolutely free to conduct his work and indulge in other means of
livelihood, wherein fact at that time he was also a director and later president of the Farmer's Rural Bank.
If he was indeed an employee of petitioner it could have barred him from indulging in other employment
or demanded his full time devotion to the company.

Delatado,Darwin A.
2011-0125
Case Title: Domasig vs. NLRC

G.R. No.: 118101
Petitioner: Eddie Domasig
Respondents: NLRC and/or Otto Ong and Catalina Co.
Ponente: Padilla, J.:
Facts:
Eddie Domasig was employed by respondent Cata Garments Corporation as Salesman since July 6,
1986. He received a monthly salary of 1500 a month plus commission. In August 29, 1992 respondent
company dismissed petitioner based on an allegation that he was being pirated by competitor company
but was declined by the petitioner.
Respondent company denied that petitioner was its regular employee; instead it tried to prove that
petitioner was only a commission agent who receives a commission of 5.00 per article sold and 2.50 on
bargain price. To support the claim, company presented the list of Sales Collections, Computation of
Commission due, expenses incurred, cash advances received for the month of January and March 1992.
On the other hand, petitioner presented the company ID issued to him by respondent company and the
cash vouchers to prove that he receives a monthly salary.
The labor arbiter decided in favor of petitioner, but was set aside by NLRC declaring that there was no
sufficient evidence presented to prove the presence of employer-employee relationship, thus Labor
Arbiter's decision was not supported by evidence. It ordered that the case be reverted to the arbitration
branch of origin for further proceeding.
Issue:
Whether or not the NLRC gravely abused its discretion in vacating and setting aside the decision of the
labor arbiter and remanding the case to the arbitration branch of origin for further proceedings.
Whether or not there is an employer-employee relationship between petitioner and respondent.
Held:
In the case at bar respondent NLRC was not convinced that the evidence presented by the petitioner,
consisting of the identification card issued to him by private respondent corporation and the cash
vouchers reflecting his monthly salaries covering the months stated therein, settled the issue of employer-
employee relationship between private respondents and petitioner. It has long been established that in
administrative and quasi-judicial proceedings, substantial evidence is sufficient as a basis for judgment on
the existence of employer-employee relationship. No particular form of evidence is required is required to
prove the existence of such employer-employee relationship. Any competent and relevant evidence to
prove the relationship may be admitted. Substantial evidence has been defined to be such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion.
In a business establishment, an identification card is usually provided not only as a security measure but
mainly to identify the holder thereof as a bona fide employee of the firm that issues it. Together with the
cash vouchers covering petitioner's salaries for the months stated therein, we agree with the labor arbiter
that these matters constitute substantial evidence adequate to support a conclusion that petitioner was
indeed an employee of private respondent. The list of sales collection including computation of
commissions due, expenses incurred and cash advances received (Exhibits "B" and "B-1") which,

according to public respondent, the labor arbiter failed to appreciate in support of private respondents"
allegation as regards the nature of petitioner's employment as a commission agent, cannot overcome the
evidence of the ID card and salary vouchers presented petitioner which private respondents have not
denied. The list presented by private respondents would even support petitioner's allegations that, aside
from a monthly salary of P1,500.00, he also received commissions for his work as a salesman of private
respondents.
Having been in the employ of private respondents continuously for more than one year, under the law,
petitioner is considered a regular employee. Proof beyond reasonable doubt is not required as a basis for
judgment on the legality of an employer's dismissal of an employee, nor even preponderance of evidence
for that matter, substantial evidence being sufficient.
Labor Arbiter's decision on the presence of employer-employee relationship is supported by substantial
evidence. On the issue of dismissal, it was indeed, illegal as it was not supported by any valid basis.
Respondent di not deny the allegation that the sole basis of the dismissal was the allege enticement of
other employer to work with them.
Labor Arbiter was reinstated with modifications on the computation of monetary claims.

Delatado, Darwin A.
2011-0125
Case Title:DY KEH BEN vs. INTERNATIONAL LABOR and MARINE UNION
OF THE PHILIPPINES, ET AL.
G.R. No.: L-32245
Date: May 25, 1979
Petitioner(s): Dy Keh Beng
Respondent(s): NLRC, et. al.
Ponente: De Castro, J.:
Facts:
A charge of unfair labor practice was filed against Dy Keh Beng, proprietor of a basket factory, for
discriminatory acts within the meaning of Section 4(a), sub-paragraph (1) and (4). Republic Act No. 875,
by dismissing on September 28 and 29, 1960, respectively, Carlos N. Solano and Ricardo Tudla for their
union activities.
Petitioner contended that he did not know Tudla while Solano was not his employee. He said that Solano
would only appear to the establishment when there is work which he did on pakyaw basis, each work
being under separate contact. Moreover, Dy Keh Beng countered with a special defense of simple
extortion committed by the head of the labor union, Bienvenido Onayan. Petitioner further contended that
without satisfying the control test there can be no employer-employee relationship.
The hearing examiner’s report which was affirmed in toto by the CIR found that indeed there was
employer-employee relationship between petitioner and respondents. Solano and Tudla became
employees of Dy Keh Beng from May 2, 1953 and July 15, 1955, respectively, and that except in the
event of illness, their work with the establishment was continuous although their services were
compensated on piece basis.
Issue:
Whether or not there existed an employee employer relation between petitioner Dy Keh Beng and the
respondents Solano and Tudla .
Held:
Contrary to the petitioners contention that the control test is not sufficiently satisfied, the court found that
indeed petition exercise control over respondents. It should be borne in mind that the control test calls
merely for the existence of the right to control the manner of doing the work, not the actual exercise of the
right. Considering the finding by the Hearing Examiner that the establishment of Dy Keh Beng is
"engaged in the manufacture of baskets known as kaing, it is natural to expect that those working under
Dy would have to observe, among others, Dy's requirements of size and quality of the kaing. Some
control would necessarily be exercised by Dy as the making of the kaing would be subject to Dy's
specifications. Since the work on the baskets is done at Dy's establishments, it can be inferred that the
proprietor Dy could easily exercise control on the men he employed.

As to the contention that Solano was not an employee since he only worked on pakyaw basis, the court
adopted the finding of the court examiner that payment by the piece is just a method of compensation and
does not define the essence of the relation. The court also noted the opinion of Justices Perfecto,
concurring with Chief Justice Ricardo Paras who penned the decision in "Sunrise Coconut Products Co.
v. Court of Industrial Relations" (83 Phil..518, 523), who stated that "Judicial notice of the fact that the so-
called "pakyaw" system mentioned in this case as generally practiced in our country, is, in fact, a labor
contract -between employers and employees, between capitalists and laborers."

Delatado, Darwin A.
2011-0125
Case Title: Equitable Banking Corporation vs. NLRC

G.R. No.: 102467
Date: June 13, 1997
Petitioner: Equitable Banking Corp, Manuel Morales, George L. Go,
John C. B. Go, et. al.
Respondent: NLRC and Ricardo Sadac
Ponente: VITUG, J.:
Facts:
Ricardo Sadac was hired by petitioner bank as Vice president for Legal Department. Later on was
designated also as General Cousel of the Bank. Various tasks of legal nature were assigned to him, he
was also given the power to supervise all personnel in the legal department. In the contract also is stated
that he may be given other duties as may be assigned by the president and Board of Directors.
Sometime, 9 lawyers under him filed a petition accusing private respondent of abusive conduct,
inefficiency, mismanagement, ineffectiveness and indecisiveness. Mr. Banico, one of the directors, was
assigned to investigate on the matter which declared that the allegations were true although no rigid
investigation was made.
Sadac was asked to resign, but refused instead demanded for a hearing in relation to the issue so that he
may well clear his name, he also expressed his intent to file libel case against Banico. His persistent
demand for hearing was not granted instead the president stated that he was not being terminated but
must bear in his conscience that he will keep receiving his monthly salary and other benefits with out
performing any work since his duties were now delegated to another lawyer, it was then that he lodged a
complain before the Labor Arbiter for illegal dismissal. The bank then formally terminated him.
Respondent bank denied the existence of employer-employee relationship but instead argued that what
exists is an ordinary client-lawyer relationship.
Labor Arbiter decided in favor of petitioner Bank, but was reversed by NLRC, hence the petition.
Issue:
Whether or not there exist an employer-employee relationship between petitioner bank and private
respondent.

Held:
The decision was relied upon on the case of Hydro Resouces vs. Pagalilauan, where in the court stated
that a lawyer like any other professionals may very well be an employee of a private corporation. The
respondent bank did not state, otherwise prove that respondent was hired as an outside counsel paid on
a retainer basis. On the contrary it is obvious that respondent performed functions directly related to the
banks operation. His notarial services was likewise not given to him but accrued to the bank's income.
More so, in several occasions evidenced by official company communications he was referred to by the
president as an employee. In company record he is registered as one of its corporate officers. The
company also registered him in the SSS as its employee. Furthermore, he enjoys benefits like any other
company officers such as when he availed the car loan benefit of the company.
The respondent bak also committed a grave error in dispensing with substantial and procedural due
process. In any case prior to termination of an employee, he must be accorded due process. The right to
be notified of the charges and to hearing cannot be dispensed with. Respondent was dismissed with out
sufficient basis, only that of the allegation in the petition of the 9 lawyers but with out substantial proof,
thus the dismissal is illegal.
SC affirmed NLRC decision with modification as to the grant of moral and exemplary damages.

Delatado, Darwin A.
2011-0125
Case Title: Equitable Banking Corporation vs. NLRC

G.R. No.: 102467
Date: June 13, 1997
Petitioner: Equitable Banking Corp, Manuel Morales, George L. Go,
John C. B. Go, et. al.
Respondent: NLRC and Ricardo Sadac
Ponente: VITUG, J.:
Facts:
Ricardo Sadac was hired by petitioner bank as Vice president for Legal Department. Later on was
designated also as General Cousel of the Bank. Various tasks of legal nature were assigned to him, he
was also given the power to supervise all personnel in the legal department. In the contract also is stated
that he may be given other duties as may be assigned by the president and Board of Directors.
Sometime, 9 lawyers under him filed a petition accusing private respondent of abusive conduct,
inefficiency, mismanagement, ineffectiveness and indecisiveness. Mr. Banico, one of the directors, was
assigned to investigate on the matter which declared that the allegations were true although no rigid
investigation was made.
Sadac was asked to resign, but refused instead demanded for a hearing in relation to the issue so that he
may well clear his name, he also expressed his intent to file libel case against Banico. His persistent
demand for hearing was not granted instead the president stated that he was not being terminated but
must bear in his conscience that he will keep receiving his monthly salary and other benefits with out
performing any work since his duties were now delegated to another lawyer, it was then that he lodged a
complain before the Labor Arbiter for illegal dismissal. The bank then formally terminated him.
Respondent bank denied the existence of employer-employee relationship but instead argued that what
exists is an ordinary client-lawyer relationship.
Labor Arbiter decided in favor of petitioner Bank, but was reversed by NLRC, hence the petition.
Issue:
Whether or not there exist an employer-employee relationship between petitioner bank and private
respondent.

Held:
The decision was relied upon on the case of Hydro Resouces vs. Pagalilauan, where in the court stated
that a lawyer like any other professionals may very well be an employee of a private corporation. The
respondent bank did not state, otherwise prove that respondent was hired as an outside counsel paid on
a retainer basis. On the contrary it is obvious that respondent performed functions directly related to the
banks operation. His notarial services was likewise not given to him but accrued to the bank's income.
More so, in several occasions evidenced by official company communications he was referred to by the
president as an employee. In company record he is registered as one of its corporate officers. The
company also registered him in the SSS as its employee. Furthermore, he enjoys benefits like any other
company officers such as when he availed the car loan benefit of the company.
The respondent bak also committed a grave error in dispensing with substantial and procedural due
process. In any case prior to termination of an employee, he must be accorded due process. The right to
be notified of the charges and to hearing cannot be dispensed with. Respondent was dismissed with out
sufficient basis, only that of the allegation in the petition of the 9 lawyers but with out substantial proof,
thus the dismissal is illegal.
SC affirmed NLRC decision with modification as to the grant of moral and exemplary damages.

Delatado, Darwin A.
2011-0125
Case Title: GREAT PACIFIC LIFE ASSURANCE CORPORATION vs.

HONORATO JUDICO
G.R. No.: 73887
Petitioner(s): Great Pacific Life Insurance Company
Respondent(s): Honorato Judico and NLRC
Ponente: PARAS J.:
Facts:
On June 9, 1976, private respondent Judico entered into an agreement of agency with petitioner
Grepalife to become a debit agent attached to the industrial life agency in Cebu City. Petitioner defines a
debit agent as "an insurance agent selling/servicing industrial life plans and policy holders. Industrial life
plans are those whose premiums are payable either daily, weekly or monthly and which are collectible by
the debit agents at the home or any place designated by the policy holder. Among his assigned duty was
to perform the collection of premiums. He receives a fixed wage known as "sales reserve". Furthermore
he receives a weekly allowance of 200. Later he was promoted to Zone supervisor and he was given an
additional fixed allowance of 110 per week.
On June 28, 1982, complainant was dismissed by way of termination of his agency contract. He then filed
a complaint for illegal dismissal.
Petitioner maintained its position that respondent is merely an agent and not its employee.
Labor Arbiter decided favoring petitioner Grepalife, but ordered the awards of 1000 for Christian reasons,
NLRC reversed the decision, although moot and academic at that point explained that the awards of 1000
has no legal justification.
Issue:
Whether or Not there exist an employer-employee relationship between petitioner and private
respondent?
Held:
To determine the whether Judico is a regular employee, his nature of employment must be scrutinized.
Unquestionably respondent Judico is an agent of the petitioner. However there are two types of insurance
company agent: (1) salaried employees who keep definite hours and work under the control and
supervision of the company; and (2) registered representatives who work on commission basis. The
agents who belong to the second category are not required to report for work at anytime, they do not
have to devote their time exclusively to or work solely for the company since the time and the effort they
spend in their work depend entirely upon their own will and initiative; they are not required to account for
their time nor submit a report of their activities; they shoulder their own selling expenses as well as
transportation; and they are paid their commission based on a certain percentage of their sales. One
salient point in the determination of employer-employee relationship which cannot be easily ignored is the
fact that the compensation that these agents on commission received is not paid by the insurance

company but by the investor (or the person insured). After determining the commission earned by an
agent on his sales the agent directly deducts it from the amount he received from the investor or the
person insured and turns over to the insurance company the amount invested after such deduction is
made. The test therefore is whether the "employer" controls or has reserved the right to control the
"employee" not only as to the result of the work to be done but also as to the means and methods by
which the same is to be accomplished.
Facts of the case showed that respondent has exercised control over petitioner. Moreover he receives a
regular wage in the form of sales reserve, where in case of poor performance would revert to the
beginner's stage wherein he will only receive the 200 weekly allowance. He was given a definite place to
work in the office. He was also mandated to make regular reports. Respondent clearly belong to the first
type of agents who are considered as regular employee.
Respondent Judico is an employee of Petitioner Company and his dismissal is illegal.

Delatado, Darwin A.
2011-0125
Case Title: Hydro Resources Contractors Corporation vs.

Pagalilauan
G.R. No.: L-62909
Ponente: Gutierrez, Jr., J.:
Facts:
On October 24, 1978, Petitioner Corporation hired the private respondent Aban as its "Legal Assistant."
He received a basic monthly salary of Pl,500.00 plus an initial living allowance of P50.00 which gradually
increased to P320.00.
On September 4, 1980, Aban received a letter from the corporation informing him that he would be
considered terminated effective October 4, 1980 because of his alleged failure to perform his duties well.
On October 6, 1980, Aban filed a complaint against the petitioner for illegal dismissal.
Petitioner contended that Aban was not its employee, but the relationship was only that of a client-lawyer
relation.
The labor arbiter ruled that Aban was illegally dismissed, affirmed by the NLRC
Issue:
Whether or not there was an employer-employee relationship between the Petitioner Corporation and
Aban.
Held:
A lawyer, like any other professional, may very well be an employee of a private corporation or even of
the government. It is not unusual for a big corporation to hire a staff of lawyers as its in-house counsel,
pay them regular salaries, rank them in its table of organization, and otherwise treat them like its other
officers and employees. At the same time, it may also contract with a law firm to act as outside counsel on
a retainer basis. The two classes of lawyers often work closely together but one group is made up of
employees while the other is not. A similar arrangement may exist as to doctors, nurses, dentists, public
relations practitioners, and other professionals.
Applying the four fold test, Aban was employed by the petitioner to be its Legal Assistant as evidenced by
his appointment paper (Exhibit "A"). The petitioner paid him a basic salary plus living allowance.
Thereafter, Aban was dismissed on his alleged failure to perform his duties well. (Exhibit "B"). Aban
worked solely for the petitioner and dealt only with legal matters involving the said corporation and its
employees. He also assisted the Personnel Officer in processing appointment papers of employees. This
latter duty is not an act of a lawyer in the exercise of his profession but rather a duty for the benefit of the
corporation.
The above-mentioned facts show that the petitioner paid Aban's wages, exercised its power to hire and
fire the respondent employee and more important, exercised control over Aban by defining the duties and
functions of his work all of which satisfies the elements of employer-employee relationship.
Furthermore, petitioner company is now barred by estoppel. It initially presented documents before the
labor arbiter to prove that Aban was a managerial employee, and now would try to prove that Aban was
not its employee.
The SC sustained the findings of the NLRC finding Aban was illegally dismissed, ordering that he shall be
reinstated without lose of seniority plus back wages, but if reinstatement is no longer feasible to pay him
separation pay.

Delatado, Darwin A.
2011-0125
Case Title: INSULAR LIFE ASSURANCE CO., LTD. vs. NATIONAL LABOR
RELATIONS COMMISSION (Fourth Division, Cebu City), LABOR ARBITER
NICASIO P. ANINON and PANTALEON DE LOS REYES.
G.R. No.: 119930
Petitioner(s): Insular Life Assurance Co., LTD
Respondet(s): NLRC, Labor Arbiter Aninon and Pantaleon De Los Reyes
Potente: BELLOSILLO, J.:
Facts:
21 August 1992 petitioner entered into an agency contract with respondent Pantaleon de los Reyes
authorizing the latter to solicit within the Philippines applications for life insurance and annuities for which
he would be paid compensation in the form of commissions. On 1 March 1993 petitioner and private
respondent entered into another contract where the latter was appointed as Acting Unit Manager under its
office.
In the contract it expressly stated that there is no employer-employee relationship between company and
De Los Reyes. Moreover, petitioner was prohibited from working in any other insurance company or even
in the government without the respondent’s approval.
The respondent was notified by petitioner on 18 November 1993 that his services were terminated
effective 18 December 1993. Thus he filed a complaint for illegal dismissal.
The Labor Arbiter decided adversely against respondent declaring that there in no employer-employee
relationship. This decision was reversed by the NLRC, thus the petition.
Issue:
Whether or not there exist employers-employee relationship between Petitioner Company and private
respondent.
Held:
Contrary to petitioner's argument the court found that the four fold test is sufficiently satisfied based on
the facts of the case. In the case at bar, facts showed that company exercised effective control over
respondent. De los Reyes was to serve exclusively the company, therefore, he was not an independent
contractor; (b) he was required to meet certain manpower and production quota; and, (c) petitioner
controlled the assignment to and removal of soliciting agents from his unit. Based on the new
management contract, there is no doubt that an employer employee relationship exist.
Finally, the existence of an employer-employee relationship cannot be negated by expressly repudiating it

in the management contract and providing therein that the "employee" is an independent contractor when
the terms of the agreement clearly show otherwise. For, the employment status of a person is defined
and prescribed by law and not by what the parties say it should be. In determining the status of the
management contract, the "four-fold test" on employment earlier mentioned has to be applied.
Respondent is an employee of Petitioner Company and his dismissal was illegal.

Delatado, Darwin A.
2011-0125
Case Title: Manaay vs. Juico

G.R. No.: 79777
Date: July 14, 1989
Petitioner(s): Nicolas S. Manaay and Agustin Hermano Jr.
Respondent(s): Hon. Philip Ella Juico, Sec of Agrarian Reform and LBP
Ponente: CRUZ, J.:
Facts:
Petitioners assail the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and R.A. No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner
Nicolas Manaay and his wife and a 5-hectare riceland worked by four tenants and owned by petitioner
Augustin Hermano, Jr. The tenants were declared full owners of these lands by E.O. No. 228 as qualified
farmers under P.D. No. 27.
With the adoption of CARP law, the tenant are to be granted full ownership of the portion of the land they
till. They also question the power of the president to issue the assailed E.O. arguing that such is a
usurpation of legislative powers. They also raise the issue that said laws violate the equal protection law.
Issue:
Whether or not the said laws are in contravention with the constitution.
Held:
In resolving questions of constitutionality, the court takes a cautious step. We believes that the congress
of the president before adopting a law made an exhaustive study that such law will be in accordance with
the law. Most of the questions raised here in are now moot and academic. The argument of some of the
petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated because they do not provide for
retention limits as required by Article XIII, Section 4 of the Constitution is no longer tenable. R.A. No.
6657 does provide for such limits now in Section 6 of the law, which in fact is one of its most controversial
provisions.
As to the power of the president to make a law, the presidential decrees are made in accordance with the
law as grand by the martial law rule. During the time of Pres. Aquino she is empowered to do so by the
transitory provisions of the 1987 Constitution. On the question of equal protection the court find no
violation of the elements of equal protection.
The court therefore rules that the assailed laws and issuances are all constitutional.

Delatado,Darwin A.
2011-0125
Case Title: Opulencia vs. NLRC

G.R. No.: L-98368
Date: December 15 1993
Petitioner: Opulencia Ice Plant and/or Melchor Opulencia
Respondent: NLRC, Labor Arbiter Villena and Manuel Esita
Ponente: Bellosillo, J.:
Facts:
Manuel Esita was an employee of Opulencia Ice Plant for 20 years. He was initially assigned to the plant
in San Pablo but was later moved to Calamba to replace the old and weak compressor operator Lorenzo
Eseta. Sometime, for about a month he helped in the renovation of Dr. Opulencia'a house. On 6 February
1989, for demanding the correct amount of wages due him, Esita was dismissed from service.
Consequently, he filed with Sub-Regional Arbitration Branch IV, San Pablo City, a complaint for illegal
dismissal, underpayment, non-payment for overtime, legal holiday, premium for holiday and rest day, 13th
month, separation/retirement pay and allowances against petitioners.
On his defense Opulencia denied that Esita was his employee in the Ice plant. He contended that he was
a mere peon during the renovation of his house. He further asserted that Esita was not even included in
the payroll. He further contended that granting arguendo Esita was truly a mechanic, his services would
only be required when there is a need for repair and therefore not on a regular basis. Lastly, Opulencia
justified the stay of Esita in the premises of the ice plant saying that it is purely out of benevolence.
Labor Arbiter decided in favor of Esita and affirmed by NLRC with modifications as the the amount of
monetary award. Thus the petition.
Issue:
Whether on not Manuel Esit is an employee of Opulencia ice plant?
Held:
The court cannot agree with the petitioner's contentions, his petition is devoid of merit. Absence of payroll
or material evidence does not give rise to the conclusion the employer-employee relationship could no
longer be proven. Absent such can still be validated through testimonial evidence. The admission of the
petitioner that the weekly payroll he presented do not contain all the names of employee negates his
claims. The court also took notice of his unwillingness to present the payroll covering the period on which
Esita claimed to be the period of his employment. In this regard the court aptly applied the disputable
presumption that evidence willfully suppressed would be adverse if produced.
On the petitioners argument that Esita's mechanic services is not regular but based on necessity alone is
likewise devoid of merit. We cannot sustain this argument. This circumstance cannot affect the regular
status of employment of Esita. An employee who is required to remain on call in the employer's premises
or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be
considered as working while on call. In sum, the determination of regular and casual employment is not
affected by the fact that the employee's regular presence in the place of work is not required, the more
significant consideration being that the work of the employee is usually necessary or desirable in the
business of the employer. More importantly, Esita worked for 9 years and, under the Labor Code, "any
employee who has rendered at least one year of service, whether such service is continuous or broken,
shall be considered a regular employee with respect to that activity in which he is employed . . . ."
Petition is dismissed

Case Title: EFREN P. PAGUIO vs. NATIONAL LABOR RELATIONS

COMMISSION
G.R. No.: 147816.
Date: May 9, 2003
Petitioner: Efren Paguio
Respondets: NLRC,Metro Media Times Corp, Robina Y. Gocongwei, Liberato
Gomez, Jr., Yolanda E. Aragon, Frederick D.Go and Alda Iglesia
Ponente: VITUG, J.:
Facts:
Metro Times Corporation, publisher of "The Manila times" hired petitioner as account executive tasked to
solicit advertisements for the said news paper. In return he will receive commission equivalent to 15% on
direct advertisements subject to tax deductions. Furthermore he receives a monthly allowance of 2000 if
he meets the quota.
On August 15, 1992 barely 2 months after the fifth renewal of his contract with the company he was
informed about his termination based on accusations not clearly established.
In their contract, there is a stipulation which states that petitioner in not an employee of the company.
Moreover, it states that either party may terminate the contract after 30 days notice.
Respondent filed a complaint for illegal dismissal. Labor Arbiter found respondent company liable for
illegal dismissal and ordered the reinstatement of the petitioner. On appeal NLRC reversed the decision
affirmed in toto by CA, hence the appeal.
Issue:
Whether on not petitioner in an employee of said company?

Whether or not the dismissal was proper?
Held:
The prime question here is whether petitioner is a regular employee or not. A regular employee is one
who is engaged to perform activities which are necessary and desirable in the usual business or trade of
the employer as against those which are undertaken for a specific project or are seasonal. Even in these
latter cases, where such person has rendered at least one year of service, regardless of the nature of the
activity performed or of whether it is continuous or intermittent, the employment is considered regular as
long as the activity exists, it not being indispensable that he be first issued a regular appointment or be
formally declared as such before acquiring a regular status. Admittedly, company's president acceded
that petitioners work is of great importance in the survival of the company being the advertisements
solicited by the petitioner are the lifeblood of the company.

Respondent company cannot seek refuge under the terms of the agreement it has entered into with
petitioner. The law, in defining their contractual relationship, does so, not necessarily or exclusively upon
the terms of their written or oral contract, but also on the basis of the nature of the work petitioner has
been called upon to perform. The law affords protection to an employee, and it will not countenance any
attempt to subvert its spirit and intent. A stipulation in an agreement can be ignored as and when it is
utilized to deprive the employee of his security of tenure. The sheer inequality that characterizes
employer-employee relations, where the scales generally tip against the employee, often scarcely
provides him real and better options.
The second question is whether the dismissal is justified. A lawful dismissal must meet both substantive
and procedural requirements; in fine, the dismissal must be for a just or authorized cause and must
comply with the rudimentary due process of notice and hearing. It is not shown that respondent company
has fully bothered itself with either of these requirements in terminating the services of petitioner. The
notice of termination recites no valid or just cause for the dismissal of petitioner nor does it appear that he
has been given an opportunity to be heard in his defense.
SC set aside the decision of CA which affirmed the decision of NLRC and reinstated the original decision
of the labor arbiter with modifications by deleting the award of moral damage there being no proof that the
dismissal was done in bad faith.

Delatado, Darwin A:
2011-0125
Case Title: ZAMUDIO VS. NLRC

G.R. NO.: 76723
Petitioner:
Respondent:
Ponente:
NOTE: No available full text. No copy in the SCRA, lawphil, SC e-library, Chan Robles virtual library.
Facts:
Petitioner rendered services important for the cultivation of respondents farm. However they do not work
everyday all through out the year because of the nature of the work they perform. They only report on
certain seasons. Never the less every year they come to do the same work. Since private respondent
started to hire them until their dismissal they never stopped working every year.
Issue:
Whether or not petitioners are considered as employees or respondent.
Held:
The elements of the four-fold test are present in the case at bar. Furthermore, the nature of their
employment, which is Pakyaw basis, does not make petitioners independent contractors. Pakyaw
workers are considered employees as long as the employer exercises control over the means by which
such workers are to perform their work inside private respondents farm, the latter necessarily exercised
control over the performed by petitioners.

The seasonal nature of petitioner’s work does not detract from the existence employer – employee
relationship. Seasonal workers whose work is not merely for the duration of the season, but who are
rehired every working season are considered regular employees. The absence of the petitioners name in
the payroll does not negate the fact of employer-employee relationship, as there are other factual bases
to establish the presence of such relationship. Omission of petitioners in the payroll was not within their
control, they had no hand in the preparation of the payroll. Such omission cannot be taken against
petitioner.

Delatado, Darwin A.
2011-0125
Case Title: Zanotte Shoes vs. NLRC

G.R. No.: 100665
Petitioner: Zanotte Shoes/Leonardo Lorenzo
Respodents: NLRC, Hon. Benigno Villarente, Joseph Lluz et. al.
Ponente: VITUG, J.:
Facts:
Private respondents filed a complaint against petitioner Zanotte Shoes owned by Leonardo Lorenzo for
illegal dismissal and other monetary claim, however later the monetary claims were dropped with the
respondents concentrating on the issue of illegal dismissal. Respondents alleged that they were
dismissed from work when they demanded to the respondent to make them members of SSS and
increase in their pay rates.
Petitioners, in turn, claimed that their business operations were only seasonal, normally twice a year, one
in June (coinciding with the opening of school classes) and another in December (during the Christmas
holidays), when heavy job orders would come in. Private respondents, according to petitioners, were
engaged on purely contractual basis and paid the rates conformably with their respective agreements.
After the labor Arbiter's investigation, he rendered his findings in favor of the respondents sustaining the
claim that indeed there exists an employer-employee relationship and ordered also the petitioner to pay
respondents their respective separation pay. These findings were sustained by the NLRC, thus this
petition.
Issue:
Whether on not the NLRC erred in sustaining the decision of the Labor arbiter finding the existence of
employer-employee relationship and the award of separation pay.
Held:
Once again the Supreme Court emphasized, that factual findings of the NLRC, particularly when they
coincide with that of the Labor Arbiter, are accorded respect, if not finality, and will not be disturbed
absent any showing that substantial evidence which might otherwise affect the result of the case has
been discarded.
There being no obvious manifestation that the NLRC committed a grave abuse of its discretion in arriving
at its conclusion. In the case at bar, we see no reason for disturbing the findings of the Labor Arbiter and
the NLRC on the existence of an employer-employee relationship between herein private parties. The
work of private respondents is clearly related to, and in the pursuit of, the principal business activity of
petitioners. The critteria used for determining the existence of an employer-employee relationship, all
extant in the case at bench, include (a) the selection and engagement of the employee; (b) the payment
of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to
the result of the work to be done and to the means and methods by which the work to be done and to the

means and methods by which the work is to be accomplished. The reckoning point is the existence of the
right to control but not the actual exercise of the right to control.
While the court sustained the finding of the NLRC, it did not however consider the award of separation
pay there being no actual dismissal nor abandonment. Where-in fact petitioner has insisted his
willingness to rehire respondents but they have steadfastly refused the offer.

Etcubañez, Emilson O.
2011-0248
ALITA VS COURT OF APPEALS

GR No 78517
February 27, 1989
Petitioner(s): GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN, SR., PEDRO RICALDE, VICENTE
RICALDE and ROLANDO SALAMAR
Respondent(s): HONORABLE COURT OF APPEALS, ENRIQUE M. REYES, PAZ M. REYES and FE M.
REYES
Ponente: J. PARAS
Facts:
Two parcels of land were acquired by private respondents' predecessors-in-interest through
homestead patent under the provisions of Commonwealth Act No. 141. Private respondents herein are
desirous of personally cultivating these lands, but petitioners refuse to vacate, relying on the provisions of
P.D. 27 and P.D. 316 and appurtenant regulations issued by the then Ministry of Agrarian Reform (MAR),
now Department of Agrarian Reform (DAR).
Private respondents instituted a complaint against Hon. Conrado Estrella as then Minister of
Agrarian Reform, P.D. Macarambon as Regional Director of MAR Region IX, and herein petitioners for
the declaration of P.D. 27 and all other Decrees, Letters of Instructions and General Orders issued in
connection therewith as inapplicable to homestead lands.
Issue: Whether the lands obtained through homestead patent are covered by the Agrarian Reform under
P.D. 27.
Held:
P.D. 27 decrees that the emancipation of tenants from the bondage of the soil and transferring to
them ownership of the land they till is a sweeping social legislation, a remedial measure promulgated
pursuant to the social justice precepts of the Constitution. However, such contention cannot be invoked to
defeat the very purpose of the enactment of the Public Land Act or Commonwealth Act No. 141.
The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a
needy citizen a piece of land where he may build a modest house for himself and family and plant what is
necessary for subsistence and for the satisfaction of life's other needs. The right of the citizens to their
homes and to the things necessary for their subsistence is as vital as the right to life itself. They have a
right to live with a certain degree of comfort as become human beings, and the State which looks after the
welfare of the people's happiness is under a duty to safeguard the satisfaction of this vital right.
The newly promulgated Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657
likewise contains a proviso supporting the inapplicability of P.D. 27 to lands covered by homestead
patents like those of the property in question, reading:
Section 6. Retention Limits.

... Provided further, That original homestead grantees or their direct compulsory heirs who still own the
original homestead at the time of the approval of this Act shall retain the same areas as long as they
continue to cultivate said homestead.

2011-0248
AUTO BUS TRANSPORT SYSTEM INC VS BAUTISTA

G.R. No. 156367
May 16, 2005
Petitioner(s): AUTO BUS TRANSPORT SYSTEMS, INC
Respondent(s): ANTONIO BAUTISTA
Ponente: J.CHICO-NAZARIO
Facts:
Respondent Antonio Bautista has been employed by petitioner Auto Bus Transport Systems, Inc.
(Autobus), as driver-conductor with travel routes Manila-Tuguegarao via Baguio, Baguio- Tuguegarao via
Manila and Manila-Tabuk via Baguio. Respondent was paid on commission basis, 7% of the total gross
income per travel, on a twice a month basis. While he was driving he accidentally bumped the rear
portion of Autobus No. 124. Respondent averred that the accident happened because he was compelled
by the management to go back to Roxas, Isabela, although he had not slept for almost 24 hours, as he
had just arrived in Manila from Roxas, Isabela. Respondent further alleged that he was not allowed to
work until he fully paid the amount of P75,551.50, representing thirty percent (30%) of the cost of repair of
the damaged buses and that despite respondent’s pleas for reconsideration, the same was ignored by
management. After a month, management sent him a letter of termination. Bautista instituted a Complaint
for Illegal Dismissal with Money Claims for nonpayment of 13th month pay and service incentive leave pay
against Autobus.
Issue: Whether Bautista is entitled to the grant of service incentive leave pay.
Held:
Bautista is entitled to Service Incentive Leave. The Supreme Court emphasized that it does not
mean that just because an employee is paid on commission basis he is already barred to receive service
incentive leave pay.
The question actually boils down to whether or not Bautista is a field employee. According to
Article 82 of the Labor Code, ‘field personnel shall refer to non-agricultural employees who regularly
perform their duties away from the principal place of business or branch office of the employer and whose
actual hours of work in the field cannot be determined with reasonable certainty.
As a general rule, field personnel are those whose performance of their job/service is not
supervised by the employer or his representative, the workplace being away from the principal office and
whose hours and days of work cannot be determined with reasonable certainty; hence, they are paid
specific amount for rendering specific service or performing specific work. If required to be at specific
places at specific times, employees including drivers cannot be said to be field personnel despite the fact
that they are performing work away from the principal office of the employee.
Certainly, Bautista is not a field employee. He has a specific route to traverse as a bus driver and
that is a specific place that he needs to be at work. There are inspectors hired by Auto Bus to constantly
check him. There are inspectors in bus stops who inspects the passengers, the punched tickets, and the
driver. Therefore he is definitely supervised though he is away from the Auto Bus main office.

2011-0248
CAURDANETAAN PIECE WORKERS UNION VS LAGUESMA

G.R. No. 114911
February 24, 1998
Petitioner(s): CAURDANETAAN PIECE WORKERS UNION, represented by JUANITO P. COSTALES,
JR. in his capacity as union president
Respondent(s): UNDERSECRETARY BIENVENIDO E. LAGUESMA and CORFARM GRAINS, INC.,
NATIONAL LABOR RELATIONS COMMISSION, CORFARM GRAINS, INC. and/or TEODY C.
RAPISORA and HERMINIO RABANG
Ponente: J. PANGANIBAN
Facts:
Complainants worked as cargador at the warehouse and ricemills of Private Respondent
Corfarm. As cargadores, they loaded, unloaded and piled sacks of palay from the warehouse to the cargo
trucks and those brought by cargo trucks for delivery to different places. They were paid by Corfarm on a
piece-rate basis. When Corfarm denied them some benefits, they formed their union. Corfarm replaced
them with non-members of the union.
Respondent Corfarm denies that it had the power of control over the complainants rationalizing
that they were street-hired workers engaged from time to time to do loading and unloading work; there
was no superintendent-in-charge to give orders; and there were no gate passes issued, nor tools,
equipment and paraphernalia issued by Cofarm for loading and unloading. It attributes error to the
Solicitor General's reliance on Art. 280 of the Labor Code. Citing Brent School, Inc. vs. Zamora, private
respondent asserts that a literal application of such article will result in “absurdity,” where petitioner’s
members will be regular employees not only of respondents but also of several other rice mills, where
they were allegedly also under service. Finally, Corfarm submits that the OSG’s position is negated by
the fact that “petitioner’s members contracted for loading and unloading services with respondent
company when such work was available and when they felt like it.
Issue: Whether the street-hired cargadores are considered as regular employees.
Held:
The court considers the cargadores as regular employee. It is undeniable that petitioner's
members worked as cargadores for private respondent. They loaded, unloaded and piled sacks of palay
from the warehouses to the cargo trucks and from the cargo trucks to the buyers. This work is directly
related, necessary and vital to the operations of Cofarm. Moreover, Cofarm did not even allege, much
less prove, that petitioner's members have substantial capital or investment in the form of tools,
equipment, machineries, and work premises among others.
Furthermore, said respondent did not contradict petitioner's allegation that it paid wages directly
to these workers without the intervention of any third party independent contractor. It also wielded the
power of dismissal over the petitioners. Clearly, the workers are not independent contractors.

2011-0248
CITIZENS' LEAGUE OF FREEWORKERS ET AL VS ABBAS

G.R. No. L-21212
September 23, 1966
Petitioner(s): CITIZENS' LEAGUE OF FREEWORKERS and/or BALBINO EPIS, NICOLAS ROJO, ET
AL
Respondent(s): HON. MACAPANTON ABBAS, Judge of the Court of First Instance of Davao and
TEOFILO GERONIMO and EMERITA MENDEZ
Ponente: J. DIZON
Facts: Respondents-spouses are owners and operators of auto-calesas. They filed a complaint with the
Court of First Instance of Davao to restrain the Union and its members, who were drivers of the spouses
in said business, from interfering with its operation. The complaint alleged that the defendants used to
lease the auto-calesas of the spouses on a daily rental basis. Unable to get the spouses to recognize said
defendants as employees instead of lessees and to bargain with it on that basis, the Union declared a
strike and since then had paralyzed plaintiffs' business operations through threats, intimidation and
violence.
Issues: Whether employer-employee relationship exists between respondents-spouses and the individual
petitioners.
Held:
In a similar case (NLRC vs DINGLASAN 98 PHIL 649), Court held that a driver of a jeep who
operates the same under the boundary system is considered an employee within the meaning of the law
and as such the case comes under the jurisdiction of the Court of Industrial Relations. In that case,
Dinglasan was the owner and operator of TPU jeepneys which were driven by petitioner under verbal
contracts that they will pay P7.50 for 10 hours use under the so called "boundary system." The drivers did
not receive salaries or wages from the owner. Their day's earnings were the excess over the P7.50 they
paid for the use of the jeepneys. In the event that they did not earn more, the owner did not have to pay
them anything.
The only features that would make the relationship of lessor and lessee between the respondent,
owner of the jeeps, and the drivers, members of the petitioner union, are the fact that he does not pay
them any fixed wage but their compensation is the excess of the total amount of fares earned or collected
by them over and above the amount of P7.50 which they agreed to pay to the respondent, and the fact
that the gasoline burned by the jeeps is for the account of the drivers. These two features are not,
however, sufficient to withdraw the relationship, between them from that of employer-employee, because
the estimated earnings for fares must be over and above the amount they agreed to pay to the
respondent for a ten-hour shift or ten-hour a day operation of the jeeps. Not having any interest in the
business because they did not invest anything in the acquisition of the jeeps and did not participate in the
management thereof, their service as drivers of the jeeps being their only contribution to the business, the
relationship of lessor and lessee cannot be sustained

2011-0248
FEATI UNIVERSITY VS HON. JOSE S. BAUTISTA and FEATI UNIVERSITY FACULTY CLUB-PAFLU
G.R. No. L-21278
December 27, 1966
Petitioner(s): FEATI UNIVERSITY
Respondent(s): HON. Jose S. Bautista, Presiding Judge of the Court of Industrial Relations, and FEATI
UNIVERSITY FACULTY CLUB-PAFLU
Ponente: J. ZALDIVAR
Facts:
The private respondent wrote a letter to president of petitioner informing her of the organization of
the Faculty Club into a registered labor union. President of the Faculty Club sent another letter containing
twenty-six demands that have connection with the employment of the members of the Faculty Club by the
University, and requesting an answer within ten days from receipt thereof. The President of the University
answered the two letters, requesting that she be given at least thirty days to study thoroughly the different
phases of the demands. Meanwhile counsel for the University, to whom the demands were referred,
wrote a letter to the President of the Faculty Club demanding proof of its majority status and designation
as a bargaining representative.
President of the Faculty Club filed a notice of strike with the Bureau of Labor alleging as reason
therefore the refusal of the University to bargain collectively. The parties were called to conferences but
efforts to conciliate them failed. Members of the Faculty Club declared a strike and established picket
lines in the premises of the University, resulting in the disruption of classes in the University. President of
the Philippines certified to the Court of Industrial Relations the dispute between the management of the
University and the Faculty Club pursuant to the provisions of Section 10 of Republic Act No. 875.
The Judge endeavored to reconcile the part and it was agreed upon that the striking faculty
members would return to work and the University would readmit them under a status quo arrangement.
On that very same day, however, the University, thru counsel filed a motion to dismiss the case upon the
ground that the CIR has no jurisdiction over the case, because (1) the Industrial Peace Act is not
applicable to the University, it being an educational institution, nor to the members of the Faculty Club,
they being independent contractors; and (2) the presidential certification is violative of Section 10 of the
Industrial Peace Act, as the University is not an industrial establishment and there was no industrial
dispute which could be certified to the CIR.
The respondent judge denied the motion to dismiss. The University filed a motion for
reconsideration by the CIRen banc, without the motion for reconsideration having been acted upon by the
CIR en banc, respondent Judge set the case for hearing but the University moved the cancellation of the
said hearing upon the ground that the court en banc should first hear the motion for reconsideration and
resolve the issues raised therein before the case is heard on the merits but denied.
Faculty Club filed with the CIR in Case 41-IPA a petition to declare in contempt of court certain
parties, alleging that the University refused to accept back to work the returning strikers, in violation of the
return-to-work order. The University filed its opposition to the petition for contempt by way of special
defense that there was still the motion for reconsideration which had not yet been acted upon by the CIR
en banc.

Issue: Whether FEATI is an employer within the purview of the Industrial Peace Act.
Held:
The Supreme Court denied the petition. Based on RA 875 Section 2(c) The term employer
include any person acting in the interest of an employer, directly or indirectly, but shall not include any
labor organization (otherwise than when acting as an employer) or any one acting in the capacity or agent
of such labor organization.
In this case, the University is operated for profit hence included in the term of employer.
Professors and instructors, who are under contract to teach particular courses and are paid for their
services, are employees under the Industrial Peace Act.
Professors and instructors are not independent contractors. university controls the work of the
members of its faculty; that a university prescribes the courses or subjects that professors teach, and
when and where to teach; that the professors’ work is characterized by regularity and continuity for a fixed
duration; that professors are compensated for their services by wages and salaries, rather than by profits;
that the professors and/or instructors cannot substitute others to do their work without the consent of the
university; and that the professors can be laid off if their work is found not satisfactory. All these indicate
that the university has control over their work; and professors are, therefore, employees and not
independent contractors.
The principal consideration in determining whether a workman is an employee or an independent

contractor is the right to control the manner of doing the work, and it is not the actual exercise of the right
of interfering with the work, but the right to control, which constitutes the test.

2011-0248
MAKATI HABERDASHERY, INC vs NLRC

G.R. Nos. 83380-81
November 15, 1989
Petitioner(s): MAKATI HABERDASHERY, INC., JORGE LEDESMA and CECILIO G. INOCENCIO
Respondent(s): NATIONAL LABOR RELATIONS COMMISSION, CEFERINA J. DIOSANA (Labor
Arbiter, Department of Labor and Employment, National Capital Region), SANDIGAN NG
MANGGAGAWANG PILIPINO (SANDIGAN)-TUCP and its members, JACINTO GARCIANO, ALFREDO
C. BASCO, VICTORIO Y. LAURETO, ESTER NARVAEZ, EUGENIO L. ROBLES, BELEN N. VISTA,
ALEJANDRO A. ESTRABO, VEVENCIO TIRO, CASIMIRO ZAPATA, GLORIA ESTRABO, LEONORA
MENDOZA, MACARIA G. DIMPAS, MERILYN A. VIRAY, LILY OPINA, JANET SANGDANG, JOSEFINA
ALCOCEBA and MARIA ANGELES
Ponente: C.J. FERNAN
Facts:
Individual complainants have been working for Makati Haberdashery Inc. as tailors, seamsters,
sewers, basters and plantsadoras. They were paid on a piece-rate basis except two who were paid on a
monthly basis. In addition to their piece-rate, they were given daily allowance of P3.00 provided they
report for work before 9:30am everyday. They were required to work from or before 9:30am up to 6-7pm
from Monday to Saturday and during peak periods even on Sundays and holidays.
The Sandigan ng Manggagawang Pilipino filed a complaint for underpayment of the basic wage,
underpayment of living allowance, nonpayment of overtime work, nonpayment of holiday pay and othe
money claims.
The Labor Arbiter rendered judgment in favor of complainants which the NLRC affirmed.
Petitioner urged that the NLRC erred in concluding that an employer-employee relationship existed
between the petitioners and the workers.
Issue: Whether employer - employee relationship is present between petitioners and its workers.
Held:
The test of employer-employee relationship is four-fold: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the
employee's conduct. It is the so called "control test" that is the most important element. This simply
means the determination of whether the employer controls or has reserved the right to control the
employee not only as to the result of the work but also as to the means and method by which the same is
to be accomplished.
The facts at bar indubitably reveal that the most important requisite of control is present. As
gleaned from the operations of petitioner, when a customer enters into a contract with the haberdashery
or its proprietor, the latter directs an employee who may be a tailor, pattern maker, sewer or "plantsadora"
to take the customer's measurements, and to sew the pants, coat or shirt as specified by the customer.
Supervision is actively manifested in all these aspects — the manner and quality of cutting, sewing and
ironing.

Assistant Manager also issued a memorandum on new procedures to be followed, it is evident
that petitioner has reserved the right to control its employees not only as to the result but also the means
and methods by which the same are to be accomplished. That private respondents are regular
employees is further proven by the fact that they have to report for work regularly from 9:30 a.m. to 6:00
or 7:00 p.m. and are paid an additional allowance of P 3.00 daily if they report for work before 9:30 a.m.
and which is forfeited when they arrive at or after 9:30 a.m.

2011-0248
MARAGUINOT AND ENERO VS NLRC AND VIVA FILMS

G.R. No. 120969
January 22, 1998
Petitioner(s): ALEJANDRO MARAGUINOT, JR. and PAULINO ENERO
Respondent(s): NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION) composed of
Presiding Commissioner RAUL T. AQUINO, Commissioner ROGELIO I. RAYALA and Commissioner
VICTORIANO R. CALAYCAY (Ponente), VIC DEL ROSARIO and VIVA FIMS
Ponente: J. DAVIDE JR
Facts:
Petitioners Maraguinot and Enero maintain that they were employed by VIVA Films as part of
their filming crew. Their tasks consist of loading, unloading, and arranging movie equipment in the
shooting area as instructed by the cameraman, returning the equipment to VIVA Films' warehouse,
assisting in the fixing of the lighting system, and performing other tasks that the cameraman and or
director may assign.
Sometime in May 1992, Maraguinot and Enero asked that their salary be adjusted to the
minimum wage rate. Instead of getting a pay increase, they were asked to sign a blank employment
contract, and when they refused, their services were terminated. Petitioners filed a suit for illegal
dismissal.
On the other hand, private respondents claim that VIVA Films is the trade name of VIVA
Productions Inc. which is primarily engaged in the distribution and exhibition, but not the making of
movies. In the same vein, Private respondent Del Rosario asserts that he is merely an executive producer
or the financier who invests money for the production of movies to be distributed and exhibited by VIVA.
The respondents further assert that they contract with persons called producers to produce or
make movies. VIVA Films and Del Rosario contend that the petitioners are project the employees of
associate producers who in turn, act as independent contractors. Hence they say, petitioners are not
employees of VIVA Films or of the executive producers.
Issue: Whether complainants are to be considered as employees of the respondents.
Held:
Private respondents insist that petitioners are project employees of associate producers who, in
turn, act as independent contractors. It is settled that the contracting out of labor is allowed only in case of
job contracting.
Assuming that the associate producers are job contractors, they must then be engaged in the
business of making motion pictures. As such, and to be a job contractor under the preceding description,
associate producers must have tools, equipment, machinery, work premises, and other materials
necessary to make motion pictures. However, the associate producers here have none of these. Private
respondents' evidence reveals that the movie-making equipment are supplied to the producers and
owned by VIVA. These include generators, cables and wooden platforms, cameras and "shooting
equipment;" in fact, VIVA likewise owns the trucks used to transport the equipment. It is thus clear that
the associate producer merely leases the equipment from VIVA.

If private respondents insist that the associate producers are labor contractors, then these
producers can only be "labor-only" contractors, defined by the Labor Code. As labor-only contracting is
prohibited, the law considers the person or entity engaged in the same a mere agent or intermediary of
the direct employer. But even by the preceding standards, the associate producers of VIVA cannot be
considered labor-only contractors as they did not supply, recruit nor hire the workers. In the instant case,
it was Juanita Cesario, Shooting Unit Supervisor and an employee of VIVA, who recruited crew members
from an available group of free-lance workers which includes the complainants Maraguinot and Enero.
The relationship between VIVA and its producers or associate producers seems to be that of
agency, as the latter make movies on behalf of VIVA, whose business is to "make" movies. As such, the
employment relationship between petitioners and producers is actually one between petitioners and
VIVA, with the latter being the direct employer.
The employer-employee relationship between petitioners and VIVA can further be established by
the "control test." While four elements are usually considered in determining the existence of an
employment relationship, namely: (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employer's power to control of the employee's conduct, the
most important element is the employer's control of the employee's conduct, not only as to the result of
the work to be done but also as to the means and methods to accomplish the same. These four elements
are present here.
VIVA's control is evident in its mandate that the end result must be a "quality film acceptable to
the company." The means and methods to accomplish the result are likewise controlled by VIVA, viz., the
movie project must be finished within schedule without exceeding the budget, and additional expenses
must be justified; certain scenes are subject to change to suit the taste of the company; and the
Supervising Producer, the "eyes and ears" of VIVA and del Rosario, intervenes in the movie-making
process by assisting the associate producer in solving problems encountered in making the film.
Notably,the appointment slip does not indicate that it was the producer or associate producer who
hired the crew members; moreover, it is VIVA's corporate name which appears on the heading of the
appointment slip. What likewise tells against VIVA is that it paid petitioners' salaries as evidenced by
vouchers, containing VIVA's letterhead, for that purpose. All the circumstances indicate an employment
relationship between petitioners and VIVA alone, thus the inevitable conclusion is that petitioners are
employees only of VIVA

2011-0248
NATIONAL SUGAR REFINERIES CORP VS NLRC

G.R. No. 101761
March 24, 1993
Petitioner(s): NATIONAL SUGAR REFINERIES CORPORATION
Respondent(s): NATIONAL LABOR RELATIONS COMMISSION and NBSR SUPERVISORY UNION,
(PACIWU) TUCP
Ponente: J. REGALADO
Facts:
Petitioner National Sugar Refineries Corporation, a corporation which is fully owned and
controlled by the Government, operates 3 sugar refineries located at Bukidnon, Iloilo and Batangas. The
Batangas refinery was privatized on April 11, 1992 pursuant to Proclamation No. 50. On June 1, 1988,
petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-file to
department heads. As a result, all positions were re-evaluated, and all employees including the members
of respondent union were granted salary adjustments and increases in benefits commensurate to their
actual duties and functions.We glean from the records that for about ten years prior to the JE Program,
the members of respondent union were treated in the same manner as rank-and file employees. As such,
they used to be paid overtime, rest day and holiday pay. With the implementation of the JE Program, the
following adjustments were made: (1) the members of respondent union were re-classified under levels
S-5 to S-8 which are considered managerial staff for purposes of compensation and benefits; (2) there
was an increase in basic pay of the average of 50% of their basic pay prior to the JE Program, with the
union members now enjoying a wide gap (P1,269.00 per month) in basic pay compared to the highest
paid rank-and-file employee; (3) longevity pay was increased on top of alignment adjustments; (4) they
were entitled to increased company COLA of P225.00 per month; (5) there was a grant of P100.00
allowance for rest day/holiday work.
Two years after the implementation of the JE Program, the members of herein respondent union
filed a complainant with the executive labor arbiter for non-payment of overtime, rest day and holiday pay
allegedly in violation of Article 100 of the Labor Code.
Executive Labor Arbiter decided in favour of labor. Respondent National Labor Relations
Commission (NLRC) affirmed the decision of the labor arbiter on the ground that the members of
respondent union are not managerial employees, as defined under Article 212 (m) of the Labor Code and,
therefore, they are entitled to overtime, rest day and holiday pay. Respondent NLRC declared that these
supervisory employees are merely exercising recommendatory powers subject to the evaluation, review
and final action by their department heads; their responsibilities do not require the exercise of discretion
and independent judgment; they do not participate in the formulation of management policies nor in the
hiring or firing of employees; and their main function is to carry out the ready policies and plans of the
corporation.
Issue: Whether supervisory employees, should be considered as officers or members of the managerial
staff, and hence are not entitled to overtime rest day and holiday pay.

Held:
A cursory perusal of the Job Value Contribution Statements of the union members will readily
show that these supervisory employees are under the direct supervision of their respective department
superintendents and that generally they assist the latter in planning, organizing, staffing, directing,
controlling communicating and in making decisions in attaining the company's set goals and objectives.
These supervisory employees are likewise responsible for the effective and efficient operation of their
respective departments. More specifically, their duties and functions include, among others, the following
operations whereby the employee assist the department superintendent, trains and guides subordinates,
recommends disciplinary actions etc.
It is apparent that the members of respondent union discharge duties and responsibilities which
ineluctably qualify them as officers or members of the managerial staff, as defined in Section 2, Rule I
Book III of the aforestated Rules to Implement the Labor Code, viz.: (1) their primary duty consists of the
performance of work directly related to management policies of their employer; (2) they customarily and
regularly exercise discretion and independent judgment; (3) they regularly and directly assist the
managerial employee whose primary duty consist of the management of a department of the
establishment in which they are employed (4) they execute, under general supervision, work along
specialized or technical lines requiring special training, experience, or knowledge; (5) they execute, under
general supervision, special assignments and tasks; and (6) they do not devote more than 20% of their
hours worked in a work-week to activities which are not directly and clearly related to the performance of
their work hereinbefore described.
Under the facts obtaining in this case, we are constrained to agree with petitioner that the union
members should be considered as officers and members of the managerial staff and are, therefore,
exempt from the coverage of Article 82. Perforce, they are not entitled to overtime, rest day and holiday.

2011-0248
ORLANDO FARM GROWERS VS NLRC

G.R. No. 129076
November 25, 1998
Petitioner(s): ORLANDO FARM GROWERS ASSOCIATION/GLICERIO AÑOVER
Respondent(s): NATIONAL LABOR RELATIONS COMMISSION (FIFTH DIVISION), ANTONIO
PAQUIT, ESTHER BONGGOT, FRANCISCO BAUG, LEOCADIO ORDONO, REBECCA MOREN,
MARCELINA HONTIVEROS, MARTIN ORDONO, TITO ORDONO, FE ORDONO, ERNIE COLON,
EUSTIQUIO GELDO, DANNY SAM, JOEL PIAMONTE, FEDERICO PASTOLERO, VIRGINIA BUSANO,
EDILMIRO ALDION, EUGENIO BETICAN, JR. and BERNARDO OPERIO
Ponente: J. ROMERO
Facts:
The Landowners, engaged in the production of export quality bananas, formed an unregistered
association envisioned to deal more effectively with the company that buys their banana produce, with
respect to technical services, canal maintenance, irrigation and pest control, among other services.
The association, called Orlando Farm Growers, was not registered and therefore, did not have
any legal personality of its own. However, it was authorized to transact business and carry out certain
activities in the interest of the individual landowner members.
The association's workers performed as packers, harvesters, etc. althought they were, in fact
hired by the individual landowner members who were the ones paying the SSS contributions of the
workers. The association issued identification cards to the workers and memoranda or circulars regarding
absences of workers, and disciplinary measures.
Later, about 20 workers were dismissed by the association. The workers filed individual suits for
illegal dismissal with reinstatement and money claims.
The association denied the existence of employer-employee relationship. It claimed that the
workers were hired by the individual landowner members and therefore they were employees of the
landowners. Furthermore, the association claimed that it was merely an unregistered association with no
legal personality of its own and formed solely by the landowner members.
Issue: Whether the Association is the employer of the workers and not the individual landowner
members.
Held:
The Labor Code defines an employer as any person who acts in the interest of an employer
directly or indirectly. The law does not require an employer be registered in order to be considered as an
employer. Otherwise it would bring about a situation where employees are denied not only redress of
their grievances but also the protection and benefits accorded them by law if their employer happens to
be simply an unregistered association.

An employer-employee relationship can be determined using the four fold test. In the case at
bench, it was the Association which issued memoranda and circulars regarding employees' conduct and
their identification cards. The Association was vested with powers to settle and pay the claims of the
workers.
While the original purpose in the formation of the Association was to provide the landowners with
a unified voice in effectively dealing with the buying company, it exceeded its avowed intentions when by
its subsequent actions, it performed the role of an employer to its workers. Thus, it is the Association that
is deemed the employer of the workers, not the individual landowner members.

2011-0248
PENARANDA VS BANGANGA PLYWOOD CORP

G.R. No. 159577
May 3, 2006
Petitioner(s): CHARLITO PEÑARANDA
Respondent(s): BAGANGA PLYWOOD CORPORATION and HUDSON CHUA
Ponente: C.J. PANGANIBAN
Facts:
In June 1999, Peñaranda was hired by Baganga Plywood Corporation, owned by Hudson Chua,
to take charge of the operations and maintenance of its steam plant boiler. Peñaranda was employed as
a Foreman/Boiler Head/Shift Engineer. He was tasked to supply the required and continuous steam to all
consuming units at minimum cost, to supervise, check and monitor manpower workmanship as well as
operation of boiler and accessories, to evaluate performance of machinery and manpower, to train new
employees for effective and safety while working, and to recommend personnel actions such as:
promotion, or disciplinary action.
In 2001, BPC shut down due to some repairs and maintenance. BPC did not technically fire
Peñaranda but due to the latter’s insistence, BPC gave him his separation benefits. BPC subsequently
reopened but Peñaranda did not reapply. Peñaranda now claims that BPC still needed to pay him his
overtime pays and premium pays.
The NLRC ruled that Peñaranda is a managerial employee and as such he is not entitled to
overtime and premium pay as stated under the Labor Code. Peñaranda appealed. He contends that he is
not a managerial employee.
Issue: Whether Peñaranda is entitled to overtime and premium pay.
Held:
Though there is an error made by the NLRC in finding Peñaranda as a managerial employee, the
Supreme Court still ruled that Peñaranda is not entitled to overtime and premium pay. Peñaranda is not a
managerial employee. Under the Implementing Rules and Regulations of the Labor Code, managerial
employees are those that perform the following:
1) Their primary duty consists of the management of the establishment in which they are
employed or of a department or subdivision thereof;
2) They customarily and regularly direct the work of two or more employees therein;
3) They have the authority to hire or fire other employees of lower rank; or their suggestions and
recommendations as to the hiring and firing and as to the promotion or any other change of status of
other employees are given particular weight.
Peñaranda does not meet the above requirements. Peñaranda is instead considered as a
managerial staff. Under the Implementing Rules and Regulations of the Labor Code, managerial staffs
are those that perform the following:
The primary duty consists of the performance of work directly related to management policies of
the employer;

2) Customarily and regularly exercise discretion and independent judgment;

3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty
consists of the management of the establishment in which he is employed or subdivision thereof; or (ii)
execute under general supervision work along specialized or technical lines requiring special training,
experience, or knowledge; or (iii) execute under general supervision special assignments and tasks; and
4) who do not devote more than 20 percent of their hours worked in a workweek to activities
which are not directly and closely related to the performance of the work described in paragraphs (1), (2),
and (3) above.”
Peñaranda’s function as a shift engineer illustrates that he was a member of the managerial staff.
His duties and responsibilities conform to the definition of a member of a managerial staff under the
Implementing Rules. Peñaranda supervised the engineering section of the steam plant boiler. His work
involved overseeing the operation of the machines and the performance of the workers in the engineering
section. This work necessarily required the use of discretion and independent judgment to ensure the
proper functioning of the steam plant boiler.
Further, Peñaranda in his position paper admitted that he was a supervisor for BPC. As
supervisor, petitioner is deemed a member of the managerial staff.

2011-0248
RUGA ET AL VS NLRC
G.R. No. L-72654-61
January 22, 1990
Petitioner(s): ALIPIO R. RUGA, JOSE PARMA, ELADIO CALDERON, LAURENTE BAUTU, JAIME
BARBIN, NICANOR FRANCISCO, PHILIP CERVANTES and ELEUTERIO BARBIN
Respondent(s): NATIONAL LABOR RELATIONS COMMISSION and DE GUZMAN FISHING
ENTERPRISES and/or ARSENIO DE GUZMAN
Facts:
Petitioners were the fishermen-crew members of one of the several fishing vessels owned by
respondent De Guzman Fishing Ent. Petitioners rendered service aboard the fishing vessel in various
capacities as patron or pilots, chief engineer, master fisherman, second fisherman and fisherman. For
services rendered in respondent's regular business of trawl fishing, petitioners were paid on percent
commission basis in cash. As agreed upon, they received 13% of the proceeds of the sale of the fish-
catch if the total proceeds exceeded the cost of crude oil consumed during the fishing trip. Otherwise,
they received 10% of the total proceeds of the sale. The patron or pilot, chief engineer, and master
fisherman received a minimum income of P350 per week while the assistant engineer, second fisherman,
and fisherman-winchman received a minimum income of P260 per week. When, for some unproved
charges, their services were terminated, the fishermen filed illegal dismissal complaint. The vessel
owners contended that they were not employees at all.
Issue: Whether employer-employee exists between respondents and petitioners.
Held:
Court ruled that in determining the existence of an employer-employee relationship, the elements
that are generally considered are the following (a) the selection and engagement of the employee; (b) the
payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee with
respect to the means and methods by which the work is to be accomplished. The employment relation
arises from contract of hire, express or implied. In the absence of hiring, no actual employer-employee
relation could exist. From the 4 elements mentioned, the court have generally relied on the so-called
right-of-control test where the person for whom the services are performed reserves a right to control not
only the end to be achieved but also the means to be used in reaching such end. The test calls merely for
the existence of the right to control the manner of doing the work, not the actual exercise of the right.
The case of Pajarillo vs. SSS, supra, invoked by the public respondent as authority for the ruling
that a "joint fishing venture" existed between private respondent and petitioners is not applicable in the
instant case. There is neither light of control nor actual exercise of such right on the part of the boat-
owners in the Pajarillo case, where the Court found that the pilots therein are not under the order of the
boat-owners as regards their employment; that they go out to sea not upon directions of the boat-owners,
but upon their own volition as to when, how long and where to go fishing; that the boat-owners do not in
any way control the crew-members with whom the former have no relationship whatsoever; that they
simply join every trip for which the pilots allow them, without any reference to the owners of the vessel;
and that they only share in their own catch produced by their own efforts.

The aforementioned circumstances obtaining in Pajarillo case do not exist in the instant case.
The conduct of the fishing operations was undisputably shown by the testimony of Ruga, the patron/pilot
of 7/B Sandyman II, to be under the control and supervision of private respondent's operations manager.
Matters dealing on the fixing of the schedule of the fishing trip and the time to return to the fishing port
were shown to be the prerogative of private respondent. While performing the fishing operations,
petitioners received instructions via a single-side band radio from private respondent's operations
manager who called the patron/pilot in the morning. They are told to report their activities, their position,
and the number of tubes of fish-catch in one day.
As distinguished from the Pajarillo case where the crew members are under no obligation to
remain in the outfit for any definite period as one can be a crew member of an outfit for one day and be
the crew member of othe crew of another vessel the next day, the petitioners were directly hired by
private respondent for a period of 8-15 years in various capacities.
Aside from performing activities usually necessary and desirable in the business of private
respondent, it must be noted that petitioners received compensation on a percentage commission based
on the gross sale of the fish-catch i.e. 13% of the proceeds of the sale if the total proceeds exceeded the
cost of the crude oil consumed during the fishing trip, otherwise only 10% of the proceeds of the sale.
Such compensation falls within the scope and meaning of the term "wage" as defined under Article 97(f)
of the Labor Code.

2011-0248
SY et al VS HON. COURT OF APPEALS and SAHOT

G.R. No. 142293
February 27, 2003
Petitioner(s): VICENTE SY, TRINIDAD PAULINO, 6B’S TRUCKING CORPORATION, and SBT1
TRUCKING CORPORATION
Respondent(s): HON. COURT OF APPEALS and JAIME SAHOT
Ponente: J. QUISUMBING
Facts:
Complainant started working with respondent SBT Trucking in 1958 at age 23, first as a fire truck
helper and later as truck driver, until 1994 when at age 59 he was separated for his inability to work due
to sickness. When he inquired with the SSS, he learned that the trucking company never paid his SSS
premiums. The company contended that he was never an employee but an industrial partner and that he
would not have been separated if he returned to his work after his sick leave; it was he, rather, that could
not resume his work.
Issue: Whether or not an employer-employee relationship existed between petitioners and respondent
Sahot.
Held:
It shows that the complainant was only 23 years old when he started working with respondent as
truck helper. SC questioned how a 23 year old man, working as a truck helper, be considered an
industrial partner. Hence the Court ruled that complainant was only an employee, not a partner of
respondents from the time complainant started working for respondent. There was no written agreement,
no proof that the complainant received a share in petitioners’ profits, nor was there anything to show he
had any participation with respect to the running of the business.
The elements to determine the existence of an employment relationship are: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employer’s power to control the employee’s conduct. The most important element is the employer’s
control of the employee’s conduct, not only as to the result of the work to be done, but also as to the
means and methods to accomplish it.
As found by the appellate court, petitioners owned and operated a trucking business since the
1950s and by their own allegations, they determined private respondent’s wages and rest day. Records of
the case show that private respondent actually engaged in work as an employee. During the entire course
of his employment he did not have the freedom to determine where he would go, what he would do, and
how he would do it. He merely followed instructions of petitioners and was content to do so, as long as he
was paid his wages. Indeed, said the CA, private respondent had worked as a truck helper and driver of
petitioners not for his own pleasure but under the latter’s control.

2011-0248
UNION OF FILIPINO EMPLOYEES VS VIVAR

G.R. No. 79255
January 20, 1992
Petitioner(s): UNION OF FILIPRO EMPLOYEES (UFE)
Respondent(s): BENIGNO VIVAR, JR., NATIONAL LABOR RELATIONS COMMISSION and NESTLÉ
PHILIPPINES, INC. (formerly FILIPRO, INC.)
Ponente: J. GUTIERREZ JR
Facts:
On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed with the
National Labor Relations Commission (NLRC) a petition for declaratory relief seeking a ruling on its rights
and obligations respecting claims of its monthly paid employees for holiday pay in the light of the Court's
decision in Chartered Bank Employees Association v. Ople.
Both Filipro and the Union of Filipino Employees (UFE) agreed to submit the case for voluntary
arbitration and appointed respondent Benigno Vivar, Jr. as voluntary arbitrator. On January 2, 1980,
Arbitrator Vivar rendered a decision directing Filipro to pay its monthly paid employees holiday pay
pursuant to Article 94 of the Code, subject only to the exclusions and limitations specified in Article 82
and such other legal restrictions as are provided for in the Code.
Filipro filed a motion for clarification seeking (1) the limitation of the award to three years, (2) the
exclusion of salesmen, sales representatives, truck drivers, merchandisers and medical representatives
from the award of the holiday pay, and (3) deduction from the holiday pay award of overpayment for
overtime, night differential, vacation and sick leave benefits due to the use of 251 divisor. Petitioner UFE
answered that the award should be made effective from the date of effectivity of the Labor Code, that
their sales personnel are not field personnel and are therefore entitled to holiday pay, and that the use of
251 as divisor is an established employee benefit which cannot be diminished.
On January 14, 1986, the respondent arbitrator issued an order declaring that the effectivity of the
holiday pay award shall retroact to November 1, 1974, the date of effectivity of the Labor Code. He
adjudged, however, that the company's sales personnel are field personnel and, as such, are not entitled
to holiday pay. He likewise ruled that with the grant of 10 days' holiday pay, the divisor should be changed
from 251 to 261 and ordered the reimbursement of overpayment for overtime, night differential, vacation
and sick leave pay due to the use of 251 days as divisor.
Both Nestle and UFE filed their respective motions for partial reconsideration. Respondent
Arbitrator treated the two motions as appeals and forwarded the case to the NLRC which issued a
resolution remanding the case to the respondent arbitrator on the ground that it has no jurisdiction to
review decisions in voluntary arbitration cases pursuant to Article 263 of the Labor Code. However, in a
letter the respondent arbitrator refused to take cognizance of the case reasoning that he had no more
jurisdiction to continue as arbitrator because he had resigned from service.

Issue: Whether Nestle's sales personnel are entitled to holiday pay
Held:
Under Article 82, field personnel are not entitled to holiday pay. Said article defines field
personnel as "non-agritultural employees who regularly perform their duties away from the principal place
of business or branch office of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty."
The Court finds that the clause "whose time and performance is unsupervised by the employer"
did not amplify but merely interpreted and expounded the clause "whose actual hours of work in the field
cannot be determined with reasonable certainty." The former clause is still within the scope and purview
of Article 82 which defines field personnel. Hence, in deciding whether or not an employee's actual
working hours in the field can be determined with reasonable certainty, query must be made as to
whether or not such employee's time and performance is constantly supervised by the employer.
The respondent arbitrator's order to change the divisor from 251 to 261 days would result in a
lower daily rate which is violative of the prohibition on non-diminution of benefits found in Article 100 of
the Labor Code. To maintain the same daily rate if the divisor is adjusted to 261 days, then the dividend,
which represents the employee's annual salary, should correspondingly be increased to incorporate the
holiday pay. There is thus no merit in respondent Nestle's claim of overpayment of overtime and night
differential pay and sick and vacation leave benefits, the computation of which are all based on the daily
rate, since the daily rate is still the same before and after the grant of holiday pay.
Respondent Nestle's invocation of solutio indebiti, or payment by mistake, due to its use of 251
days as divisor must fail in light of the Labor Code mandate that "all doubts in the implementation and
interpretation of this Code, including its implementing rules and regulations, shall be resolved in favor of
labor." (Article 4). Nevertheless, in order to fully settle the issues, the Court resolved to take up the
matter of effectivity of the holiday pay award raised by Nestle.
Applying the “operative fact”aforementioned doctrine to the case at bar, it is not far-fetched that
Nestle, relying on the implicit validity of the implementing rule and policy instruction before this Court
nullified them, and thinking that it was not obliged to give holiday pay benefits to its monthly paid
employees, may have been moved to grant other concessions to its employees, especially in the
collective bargaining agreement. This possibility is bolstered by the fact that respondent Nestle's
employees are among the highest paid in the industry. With this consideration, it would be unfair to
impose additional burdens on Nestle when the non-payment of the holiday benefits up to 1984 was not in
any way attributed to Nestle's fault.
The Court thereby resolves that the grant of holiday pay be effective, not from the date of
promulgation of the Chartered Bank case nor from the date of effectivity of the Labor Code, but from the
date of promulgation of the IBAA case.

2011-0248
VILLAMARIA vs COURT OF APPEALS and BUSTAMANTE

G.R. No. 165881
April 19, 2006
Petitioner(s): OSCAR VILLAMARIA, JR.
Respondent(s): COURT OF APPEALS and JERRY V. BUSTAMANTE
Ponente: J. CALLEJO, SR.,
Facts:
Petitioner Villamaria and respondent Bustamante executed a contract entitled “Kasunduan ng
Bilihan ng Sasakyan sa Pamamagitan ng Boundary-Hulog”. Under the “Kasunduan”, respondent would
remit to Villarama P550.00 a day for a period of four years; Bustamante would then become the owner of
the vehicle and continue to drive the same under Villamaria’s franchise. It was also agreed that
Bustamante would make a downpayment of P10,000.00. The parties agreed that if Bustamante failed to
pay the boundary-hulog for three days, Villamaria Motors would hold on to the vehicle until Bustamante
paid his arrears, including a penalty of P50.00 a day; in case Bustamante failed to remit the daily
boundary-hulog for a period of one week, the Kasunduan would cease to have legal effect and
Bustamante would have to return the vehicle to Villamaria Motors.
Bustamante continued driving the jeepney under the supervision and control of Villamaria. As
agreed upon, he made daily remittances of P550.00 in payment of the purchase price of the vehicle.
Bustamante failed to pay for the annual registration fees of the vehicle, but Villamaria allowed him to
continue driving the jeepney.
In 1999, Bustamante and other drivers who also had the same arrangement with Villamaria
Motors failed to pay their respective boundary-hulog. This prompted Villamaria to serve a "Paalala,"
reminding them that under the Kasunduan, failure to pay the daily boundary-hulog for one week, would
mean their respective jeepneys would be returned to him without any complaints. He warned the drivers
that the Kasunduan would henceforth be strictly enforced and urged them to comply with their obligation
to avoid litigation.
On July 24, 2000, Villamaria took back the jeepney driven by Bustamante and barred the latter from
driving the vehicle. Bustamante filed a Complaint for Illegal Dismissal against Villamaria.
Issue: Whether employer-employee relations exists
Held:
The juridical relationship of employer-employee between petitioner and respondent was not
negated by the foregoing stipulation in the Kasunduan, considering that petitioner retained control of
respondent’s conduct as driver of the vehicle. Even if the petitioner was allowed to let some other person
drive the unit, it was not shown that he did so; that the existence of an employment relation is not
dependent on how the worker is paid but on the presence or absence of control over the means and
method of the work; that the amount earned in excess of the “boundary hulog” is equivalent to wages;
and that the fact that the power of dismissal was not mentioned in the Kasunduan did not mean Villamaria
never exercised such power, or could not exercise such power. In view of Villamaria’s supervision and
control as employer, the fact that the "boundary" represented installment payments of the purchase price
on the jeepney did not remove the parties’ employer-employee relationship.

Marie Antoinette F. Espadilla
2011-0091
Case Title: JULIO N. CAGAMPAN ET AL. VS. NATIONAL LABOR RELATIONS COMMISSION
AND ACE MARITIME AGENCIES, INC.
G.R. No.: G.R. No. 85122 - 24
Petitioner: Julio N. Cagampan
Respondent: NLRC And Ace Maritime Agencies, Inc.
Ponente: J. Paras
Facts:
Petitioners, all seamen, entered into separate contracts of employment with the Golden Light
Ocean Transport, Ltd; through its local agency, the Ace Maritime Agencies, Inc. Petitioners worked from
May 7, 1985 until July 12, 1986. Later, petitioners collectively and / or individually filed complaints for non
– payment of overtime pay, vacation pay and terminal pay against private respondents. They also
claimed that they signed a blank contract. Also, although they agreed to work on board the vessel Rio
Colorado managed by Golden Light Ocean Transport, Ltd., the vessel they really boarded was MV ‘SOIC
I’ managed by Columbus Navigation. Two (2) petitioners argued that although they were employed as
Ordinary Seaman, they actually performed the work and duties of Able Seaman. Hence, this petition.
Issue:
Whether or not petitioners should be entitled to overtime pay?
Held:
No. The Court ruled that entitlement to overtime pay must first be established by proof that said
overtime work was actually performed, before an employee way avail of said benefit. The contract
provision means that the fixed overtime pay 30% would be the basis for computing the overtime pay if
and when overtime work would be rendered. For the employer to give him overtime pay for extra bonus
hours when he might be sleeping or attending to his personal chores or even just lulling away his time
would be extremely unfair and unreasonable. The criterion is determining whether or not seamen are
entitled to overtime pay is not, whether they were on board and cannot leave the ship beyond the regular
8 – working hours a day, but whether they actually rendered service in excess of said number of hours.
The decision of the
NLRC is affirmed with the modification that petitioners Cagampan and Vicera are awarded their leave pay
according to the terms of contract.

2011-0091
Case Title: FELIX GONZALES AND CARMEN GONZALES VS. HON. COURT OF APPEALS,
DECEASED SPOUSE ANDRES AGCAOILE AND LEONORA AGCAOILE
SUBSTITUTED BY LUCIA A. SISON
G.R. No.: G.R. No. 36213
Date: June 29, 1989
Petitioner: Felix Gonzales And Carmen Gonzales
Respondent: Hon. Court Of Appeals, Deceased Spouse Andres Agcaoile And Leonora Agcaoile
Substituted By Lucia A. Sison
Ponente: J. Grino, Aquino
Facts:
Petition for certiorari to review the decision of the Court of Appeals
Petitioners leased a lot in the subdivision on which they built their house, and, by tolerance of the
subdivision owner, they cultivated some vacant adjoining lots. When plaintiffs defaulted renting lot 1285 –
M, defendants sent a letter asking them to pay the accrued rentals or vacate the premises. Plaintiffs filed
the present action seeking to elect the leasehold system and praying for a reliquidation of past harvests
embracing the agricultural years 1961 – 1962 to 1967 – 1968. Defendants initiated an action for recovery
of possession alleging that the property subject of the action is residential land. Court of Agrarian
Relations, and CA ruled that the plaintiffs are not de jure agricultural tenants. Hence, this petition.
Issue:
Whether or not an agricultural tenancy relationship can be created over land embraced in an
approved residential subdivision?
Held:
No. The Court ruled that an agricultural leasehold cannot be established on land which has
ceased to be devoted to cultivation or farming because of its conversion into a residential land; petitioners
are not entitled to reinstatement under Sec. 36 (1) of RA 3844 for the petitioners were not agricultural
lessees or tenants of the land before its conversion into a residential subdivision in 1955. They may not
claim a right to reinstatement. Petition denied for lack of merit.

2011-0091
Case Title: INTERPHIL LABORATORIES EMPLOYEES UNION – FFW, ENRICO GONZALES

AND MARIA THERESA MONTEJO VS. INTERPHIL LABORATORIES, INC., AND
HONORABLE LEONARDO QUISIMBING, SECRETARY OF LABOR AND
EMPLOYMENT
G.R. No.: G.R. No. 142834
Petitioner: Interphil Laboratories Employees Union – FFW, Enrico Gonzales And Maria Theresa
Montejo.
Respondent: Interphil Laboratories, Inc., And Honorable Leonardo Quisimbing, Secretary Of Labor
And Employment
Ponente: J. Kapunan
Facts:
Interphil Laboratories Employees Union – FFW is the sole and exclusive bargaining agent of the
rank – and – file employees of Interphil Laboratories, Inc., a company engaged in the business of
manufacturing and packaging pharmaceutical products. They had a Collective Bargaining Agreement
effective from August 1, 1990 – July 31, 1993. The 2 union officers inquired about the duration of the CBA
but received no response, so later on, all the rand – and – file employees of the company refused to
follow their 2 shift work schedule of from 6am – 6pm and from 6pm to 6 am; at 2pm and 2am,
respectively. Later on the respondent company filed with the National Conciliation and Medication Board
(NCMB) an urgent request for preventive medication aimed to help the parties in their CBA negotiations.
However, it was unsuccessful so they filed with the Office of the Secretary of Labor and Employment a
petition for assumption of Jurisdiction.
Labor Arbiter Caday recommended that herein petitioners are guilty of unfair labor practice for
violating the then existing CBA which prohibits the union or any employee during the existence of the
CBA from staging a strike or engaging in slow down or interruption of work and ordering them to cease
and desist from further committing illegal acts, which approved the said report. Motion for reconsideration
was denied. Hence, this petition.
Issue:
Whether or not the working hours maybe changed at the direction of the company?
Held:
Yes. The Court ruled that the working hours may be changed, at the discretion of the company,
should such change be necessary for its operations, and that the employees shall observe such rules as
have been laid down by the company. Respondents Company had to adopt a continuous 24 – hour work
daily schedule by reason of the nature of business and the demands of its clients. It was established that
the employees adhered to the said work schedule since 1988. The employees are deemed to have
waived the eight – hour schedule since they followed, without any question or compliant, the two – shift
schedule while their CBA was still in force and even prior thereto. The two shift schedule effectively
changed the working hours stipulated in the CBA. As the employees assented by practice to this
arrangement, they cannot be heard to claim that the overtime boycott is justified because there were not
obliged to work beyond eight hours. Petition is denied due course and CA decision is affirmed.

2011-0091
Case Title: MANUEL LARA, ET AL. VS. PETRONILO DEL ROSARIO, JR.
G.R. No.: L-6339
Petitioner: Manuel Lara
Respondent: Petronilo Del Rosario, Jr
Ponente: J. Montemayor
Facts:
Defendant operated a taxi business in which the plaintiffs are employed as mechanics and
drivers. Later on, defendant sold his 25 units to La Mallorca, a transportation company, without giving
said mechanics and drivers 30 days advance notice ant the reason of losing their jobs because La
Mallorca did not want to continue them in their employment. The petition was filed praying to recover
compensation for overtime work rendered beyond eight hours and on Sundays and Legal holidays and
one month salary because the failure of their former employer to give them notice. The Court dismissed
the complaint because the defendant being engaged in the taxi of transportation business which is a
public utility, came under the exception provided by the eight hour Labor Law; and because plaintiffs did
not work on a salary basis, so they had no fixed or regular salary or remuneration other than the 20%.
Issue:
Whether or not Plaintiffs are entitled to extra compensation for work performed in excess of eight
hours a day, Sunday and holidays included?
Held:
No. The Court ruled that a laborer or employee with no fixed salary, wages or remuneration but
receiving compensation for his employer uncertain and variable amount depending upon the work done
or the result of said work irrespective of the amount of time employed, is not covered by the eight hour
Labor Law and is not entitled to extra compensation should he work in excess of eight hours a day. In the
case at bar, it is the result of their labor, not the labor itself, which determines their commissions. The
alleged termination of services of the plaintiffs by the defendant took place according to the complaint on
September 4, 1950, which was after the repeal of Art. 302 which they invoke. If the plaintiffs herein had
no fixed salary either by the day, week or month, then computation of the month’s salary payable would
be impossible. Art. 302 refer to employees receiving fixed salary. Order appealed is affirmed.

2011-0091
Case Title: LUZON STEVEDORING CO., INC., VS. LUZON MARINE DEPARTMENT UNION AND
THE HON. MODESTO CASTILLO, THE HON. JOSE S. BAUTISTA, THE HON. V.
JIMENEZ YANSON and THE HON. JUAN L. LANTING, JUDGE OF THE COURT OF
INDUSTRIAL RELATIONS
G.R. No.: L – 9265
Petitioner: Luzon Stevedoring Co., Inc.
Respondent: Luzon Marine Department Union And The Hon. Modesto Castillo, The Hon. Jose S.
Bautista, The Hon. V. Jimenez Yanson And The Hon. Juan L. Lanting
Ponente: J. Felix
Facts:
Petition for review on certiorari in the resolution of the Court of Industrial Relations.
Herein respondents filed a petition with the CIR containing the full recognition of the right of
Collective bargaining, close shop and check off. Also, that the work performed in excess of 8 hours be
paid an overtime pay of 50 per cent the regular rate of pay, and that work performed on Sundays and
legal holidays be paid double the regular rate of pay. In one of the hearing of the case, the Court ruled
that the employees are only entitled to receive overtime pay for work rendered in excess of 8 hours on
ordinary days including Sundays and legal holidays. Herein petitioner sought for the reconsideration of
the decision only in so far as it interpreted that the period during which a seaman is aboard a tugboat
shall be considered as “working time” for the purpose of the 8 – hours – Labor Law. However, it was
denied. Hence, this petition.
Issue:
Whether or not the definition for “hours of work” as presently applied to dry land laborers equally
applicable to seaman?
Held:
No. The Court ruled that we do not need to set for seaman a criterion different from that applied
to laborers on land, that the only thing to be done is to determine the meaning and scope of the term
“working place”. A laborer need not leave the premises of the factory, shop or boat in order that his period
of rest shall not be counted, it being enough that he “cease to work” may rest completely and leave or
may leave at his will the spot where he actually stays while working, to go somewhere else, whether
within or outside the premises of said factory, shop or boat. If these requires are complied with, the period
of such rest shall not be counted. Claimants rendered services to the Company from 6am to 6pm
including Sundays and holidays, which implies either that said laborers were not given any recess at all,
or that they were not allowed to leave the spot their working place, or that they could not rest completely.
Resolutions of the Court of Industrial Relations appealed from are affirmed with costs against petitioner.

2011-0091
Case Title: MANILA TERMINAL COMPANY, INC. V. THE COURT OF INDUSTRIAL RELATIONS
AND MANILA TERMINAL RELIEF AND MUTUAL AID ASSOCIATION
G.R. No.: L – 4148
Date: July 16, 1952
Petitioner: Manila Terminal Company, Inc.
Respondent: The Court Of Industrial Relations And Manila Terminal Relief And Mutual Aid
Association
Ponente: J. Paras
Facts:
On September 1, 1945, Herein petitioner undertook the arrastre service in some of the piers in
Manila’s Port Area at the request and under the control of the U.S. Army. Petitioner hired some 30 men
as watchmen on 12 hour shifts at a compensation of P3.00 per day for the day shift and P6.00 per day for
the night shift. On February 1, 1946, the petitioner began the postwar operation of the arrastre service at
the present at the request and under the control of the Bureau of Customs, by virtue of a contract entered
into with Philippine Government. The watchmen of the petitioner continued in the service with a number
of substitution and additions, their salaries having been raised during the month of February to P4.00 per
day for the dayshift and P6.25 per day for the nightshift.
Later, some of the members of the Manila Terminal Relief and Mutual Aid Association, sent a
letter to the Department of Labor, requesting that the overtime pay be investigated, but nothing was done
by the Department. On May 27, 1947 the petitioner instituted the system of strict 8 – hour shifts. On July
28, 1947 Manila Aid Association filed an amended petition with the Court of Industrial Relations praying,
among others, that petitioner be ordered to pay its watchmen or police force overtime pay from the
commencement of their employment.
The case thereafter alleviated in which Judge Lanting ruled;

1.) The decision under review should be affirmed in so far it grants compensation for overtime on
regular days during the period from the date of entrance to duty to May 24, 1947, such
compensation to consist of the amount that corresponds to the four hours’ overtime at the regular
rate and an additional amount of 25 per cent thereof.
2.) As the compensation for work done on Sundays and legal holidays, the petitioner should pay its
watchmen the compensation that corresponds to the overtime (in excess of 8 hours) at the
regular rate only.
3.) The watchmen are not entitled to night differential pay for past service, and therefore the decision
should be reversed.
Hence, this petition, contending that the agreement under which its police force were paid certain
specific wages for 12 hour shifts, included overtime compensation.
Issue:
Whether or not the agreement under which its police force were paid certain specific wages for 12
hour shifts, includes the overtime compensation?

Held:
No. The Court ruled that in times of acute employment, regardless of its terms and conditions,
their main concern in the first place being admission to some work. The petitioner’s watchmen must have
railroaded themselves into their employment for their subsistence, although they found themselves
required to work for 12 hours a day. True, there was agreement to work, but it cannot fairly be supposed
that they had the freedom to bargain in any way, much less to insist in the observance of the 8 hour labor
law.
Also, there was no reduction was made in the salaries which its watchmen received under the 12
hour arrangement. Although, it may be argued that the salary for the night shift was lessened, the fact
that the rate for the day shift was increased in a sense tends to militate against the contention that the
salaries given during the 12 hour shifts included overtime compensation.
The law gives the Association the right to extra compensation. And they could not be held to have
impliedly waived such extra compensation, for the obvious reason that could not have expressly waived
it.
It is high time that all employers were warned that the public is interested in the strict enforcement
of the Eight – Hour Labor Law. This was designed not only to safeguard the health and welfare of the
laborer or employee, but in a way to minimize unemployment by forcing employers, in cases where more
than 8 – hour operation is necessary, to utilize different shifts of laborers or employees working only for 8
hour each.
The appealed decision, in the form voted by Judge Lanting, is affirmed, it being understood that
the petitioner’s watchmen will be entitled to extra compensation only from the dates they respectively
entered the service of the petitioner.

2011-0091
Case Title: MERCURY DRUG COMPANY INCORPORATED VS. NARDO DAYAO, ET AL.
G.R. No.: L-30452
Petitioner: Mercury Drug Company, Incorporated
Respondent: Nardo Dayao
Ponente: J. Gutierrez, Jr.
Facts:
Petition for review on certiorari of the decision of the Court of Industrial Relations.
Herein respondent, filed a petition against Mercury Drug Company, Incorporated contenting: 1)
payment of their unpaid back wages for work done on Sundays and legal holidays plus 25% additional
compensation from date of their employment up to June 30, 1962; 2) payment of the extra compensation
on work done at night; 3) reinstatement of Januario Referente and Oscar Echalar to their former positions
with back salaries; and as against the respondent union, for its disestablishment and the refund of all
monies it had collected from petitioners.
Mercury Drug is hereby ordered to pay the 69 petitioners another additional sum or premium
equivalent to 25% of their respective basic or regular salaries for nighttime services rendered from March
20, 1961 up to June 30, 1962. Hence, this petition.
Issue:
Whether or not private respondents are entitled for nighttime work premiums although there is a
waiver of said claims and the total absence of evidence there on?
Held:
Yes. Work done at night should be paid more than work done at daytime, and that if that work is
done beyond the worker’s regular hours of duty, he should also be paid additional compensation for
overtime work; Ruling of C.I.R awarding additional pay for nighttime work is supported by evidence. No
additional evidence was necessary to prove that the private respondents were entitled to additional
compensation for whether or not they were entitled to the same is a question of law which the respondent
court answered correctly. The “waiver rule” does not apply in the case at bar. Additional compensation for
nighttime work is founded on public policy; hence the same cannot be waived. Petition is dismissed.

2011-0091
Case Title: NATIONAL DEVELOPMENT COMPANY VS. COURT OF INDUSTRIAL RELATIONS

AND NATIONAL TEXTILE WORKERS UNION
G.R. No.: L – 15422
Petitioner: National Development Company
Respondent: Court Of Industrial Relations And National Textile Workers Union
Ponente: J. Regala
Facts:
Case for review from the Court of Industrial Relations
The National Development Company or government – owned and controlled corporation had four
shifts of work.
8am – 4pm
6am – 2pm
2pm – 10pm
10pm – 6pm
Each shift had 1 – hr meal time period, to wit; from (1) 11am to 12nn for those working between 6am and
2pm and from (2) 7pm to 8om for those working between 2pm and 10pm.
The records show that although there was a one – hour meal time, petitioner nevertheless
credited the workers with 8 hours of work for each shift and paid them for the same number of hours.
Also, whenever workers in one shift were required to continue working until the next shift, petitioner has
been paying them for six hours only, and argued that the 2 hours corresponding to the mealtime periods
should not be included in computing compensation. Respondents, whose members are employed at the
NDC, asked the court of Industrial Relations to order the payment of additional overtime pay
corresponding to the mealtime periods.
CIR issued an order holding that mealtime should be counted in determining overtime work and
ordered to pay P101, 407.96 by way of overtime compensation. Petitioners filed a motion for
reconsideration but were dismissed by the CIR. Hence, this petition.
Issue:
Whether or not on the basis of evidence, the mealtime breaks should be considered working
time?
Held:
Yes. The Court ruled that when the work is not continuous, the time which the laborer is not
working place and can rest completely shall not be counted. Claimants herein rendered services to the
Company from 6am – 6pm implies either that they were not allowed to leave the spot of their working
place, or that they could not rest completely. The CIR’s finding that work in the petitioner company was
continuous and did not permit employees and laborers to rest completely is not without basis in evidence.
The timecards show that the work was continuous and without interruption breaks should be counted as
working time for purposes of overtime compensation. Order of March 19, 1959 and the resolution of April
27, 1959 are hereby affirmed and the appeal is dismissed.

2011-0091
Case Title: NATIONAL SHIPYARDS AND STEEL CORPORATION VS. COURT OF INDUSTRIAL
RELATIONS
G.R. No.: L-17068
Petitioner: National Shipyards And Steel Corporation
Respondent: Court Of Industrial Relations
Ponente: J. Reyes
Facts:
Petition for review by certiorari of the orders of the Court of Industrial relations requiring it to pay
its bargeman, Malondras, an overtime service of 16 hours a day for a period from January 1, 1954 -
December 31, 1956, and from January 1, 1957 to April 30, 1957, inclusive.
NASSOO, engaged in the business of ship building and repair that needs a service of a
bargeman. Bargeman are required to stay in their barges for on call duty, so they are given living quarters
and subsistence allowance of P1.50 per day during the time they are on board. However, Malondras filed
with the Industrial Court a complaint for the payment of overtime compensation because of his exclusion
from the second report of the examiner. The examiner then submitted an amended report giving
Malondras an average of 16 overtime hours a day, and recommending the payment to him of P15, 242.15
as overtime compensation during the period covered by the report. Hence, this petition.
Issue:
Whether or not respondent Malondras is entitled to 16 hours a day overtime pay?
Held:
No. The Court ruled that the correct criterions in determining whether or not sailors are entitled to
overtime pay is not whether they were on board and cannot leave ship beyond the regular eight working
hours a day, but whether they actually rendered service in excess of said number of hours; In such much
as the parties show that the subsistence allowance is independent of and has nothing to do with whatever
additional compensation for overtime work was due the petitioner, the same should not be deducted from
his overtime compensation. Respondent Malondras should be credited (5) overtime hours instead of (16)
hours a day for the periods covered by the examiner’s report. Order appealed is affirmed with
modifications.


2011-0091
Case Title: PAN AMERICAN WOLRD AIRWAYS SYSTEM (PHIL.) V. PAN AMERICAN
EMPLOYEES ASSOCIATION
G.R. No.: L - 16275
Petitioner: Pan American Wolrd Airways System (Phil.)
Respondent: Pan American Employees Association
Ponente: J. Reyes, J.B.L.
Facts:
Appeal by certiorari from the decision of the Court of Industrial Relations in case No. 1055 – V
dated October 10, 1959, and its resolution en banc denying the motion for reconsideration by the
petitioner herein.
The Court orders to compute the overtime compensation due the aforesaid fourteen (14) aircraft
mechanic and the 2 employees from the Communication Department based on the time sheet of said
employees from February 23, 1952 – July 15, 1958 and to submit his report within 30 days for further
disposition by the court.
Petitioner contends that the finding of that the 1 – hour meal period should be considered work
(deducting 15 minutes as time allowed for eating) is not supported by substantial evidence.
Issue:
Whether or not the 1 hour meal period should be considered as overtime work (after deducting 15
minutes)?
Held:
Yes. The Court ruled that during the so called meal period, the mechanics were required to stand
by for emergency work; that if they happened not to be available when called, they were reprimanded by
the lead man; that as in fact it happened on many occasions, the mechanics had been called from their
meals or told to hurry Employees Association up eating to perform work during this period. Judgment
appealed from is affirmed. Cost against appellant.


2011-0091
Case Title: PHILIPPINE NATIONAL BANK V. PHILIPPINE NATIONAL BANK EMPLOYEES

ASSOCIATION (PEMA) AND COURT OF INDUSTRIAL RELATIONS
G.R. No.: L-30279
Date: July 30, 1982
Petitioner: Philippine National Bank
Respondent: Philippine National Bank Employees Association (PEMA) And Court Of Industrial
Relations
Ponente: J. Barredo
Facts:
Appeal from the decision of the Court of Industrial Relations.
Petitioner allegedly failed to comply with its commitment of organizing a committee on Personnel
Affairs to take change of screening and deliberating on the promotion of employees covered by a
collecting bargaining agreement then in force between the said parties. In the first and causes of action
the respondent’s Board of Directors approved a revision of the computation of overtime pay, but since the
grant of benefits in question, without just cause, withdrew said benefits and in spite of repeated demands
refused, and still refuses to reinstate the same up to the present. Petitioner has repeatedly requested
Respondent that the cost of living allowance and longevity pay be taken into account in the computation
of OT pay.
Issue:
Whether or not the cost of living allowance and longevity pay should be included in the
computation of overtime pay?
Held:
No. The Court ruled that the rationale for overtime pay is thus the additional work, labor or service
employed and the adverse effects of his longer stay in place of work that justify and is the real reason for
the extra compensation for overtime pay; There is presently a consciousness towards helping our
employees by giving of additional allowance in times of economic uncertainly; The industrial court cannot
even in a certified labor dispute impose upon the parties terms and conditions inconsistent with existing
law and jurisprudence; Longevity pay cannot be included in the computation of overtime pay when the
Collective Bargaining Agreement so stipulates; The basis of computation of overtime pay beyond the
required by law must be the Collective Bargaining Agreement between the parties.

2011-0091
Case Title: SAN MIGUEL BREWERY, INC. VS. DEMOCRATIC LABOR ORGANIZATION, ET AL
G.R. No.: L – 18353
Date: July 31, 1963
Petitioner: San Miguel Brewery, Inc.
Respondent: Democratic Labor Organization, et al.
Ponente: J. Bautista
Facts:
Petition for review of a decision of the Court of Industrial Relations.
Herein respondent filed complaint the San Miguel Brewery embodying 12 demands for the
betterment of the condition of employment of its members. The union manifested its desire to confine its
claim to its demands for overtime night – shift differential pay and attorney’s fees, additional separation
pay and sick and vacation leave compensation.
Judge Bautista rendered decision that with regard to overtime compensation, the Eight – Hour
Labor law applies to the employees concerned for those working in the field or engaged in the sale of the
company’s products outside its premises should be paid the extra compensation accorded them in
addition to the monthly salary and commission by earned by them, regardless of the meal allowance
given to employees who work up to late at night.
Motion for Reconsideration in the industrial court en banc was denied, hence, this petition.
Issue:
Whether or not outside or field sales personnel are entitled to the benefits of the Eight Hour Labor
law?
Held:
No. The Court ruled that where after the morning roll call the outside or field sales personnel
leave the plant of the company to go on their respective sales routes and they do not have a daily time
record but the sales routes are so planned that they can be completed within 8 hours at most, and they
receive monthly salaries and sales commission in variable amounts, so that they are made to work
beyond the required eight hours similar to piece work, “pakiao”, or commission basis regardless of the
time employed, and the employees’ participation depends on their industry, it is held that the Eight – Hour
Labor Law has no application to said outside or field sales personnel and that they are not entitled to
overtime compensation. The decision of Industrial Court is modified.

2011-0091
Case Title: SIME DARBY PILIPINAS, INC. VS. NLRC (2ND DIVISION) AND SIME DARBY
SALARIED EMPLOYEES ASSOCIATION (ALU-TUCP)
G.R. No.: G.R. No. 119205
Petitioner: Sime Darby Pilipinas, Inc.
Respondent: NLRC (2nd Division) And Sime Darby Salaried Employees Association (ALU-TUCP)
Facts:
Special Civil Action in the Supreme Court. Certiorari.
Petitioner is engaged in the manufacture of automotive tires, tubes and other rubber products.
Private respondent is an association of monthly salaried employees of petitioner at its Marikina factory.
Beforehand, all company factory workers in Marikina including members of private respondent union
worked from 7:45am to 3:45pm with a 30-minute paid “on call” lunch break.
Petitioner issued a memorandum to all factory- based employees advising all its monthly salaried
employees in its Marikina Tire Plant, except those in the Warehouse and Quality Assurance Department
working on shifts.
Private respondent felt affected adversely by the change in the work schedule and
discontinuance of the 30-minute paid “on call” lunch break, hence the filling of complaint for unfair labor
practice, discrimination and evasion of liability. The Labor Article dismissed the complainant on the
ground that the change in the work schedule and the elimination of the 30-minute paid lunch break of
factory workers constituted a valid exercise of management prerogative and did not decrease the benefits
granted to factory workers as the working time did not go beyond 8 hours. Hence, this petition.
Issue:
Whether or not there was a diminution of benefits when the 30-minute paid lunch break was
eliminated?
Held:
The right to fix the work, schedules of the employees rests principally on their employer. The
petitioner cities as reason for the adjustment the efficient conduct of its business operations and its
improved production. Since the employees are no longer required during this one-hour lunch break, there
is no more need for them to be compensated for this period. The new work schedule fully complies with
the daily work period of eight (8) hours without violating the Labor Code. Also, the new schedule applies
to all employees in the factory similarly situated whether they are union members or not; Even as the law
is solicitous of the welfare of the employees; it must also protect the right of an employer to exercise what
are clearly management prerogatives; Management retains the prerogative, whenever exigencies of the
service so require, to change the working hours of its employees Petition is granted. The dismissed
complaint against petitioner for unfair labor practice is affirmed.

Ladylynne P. Flores
2011 – 0080
Case title: NICANOR M. BALTAZAR VS. SAN MIGUEL BREWERY, INC.

G.R. number: G.R. No. L-23076
Petitioner: Nicanor M. Baltazar
Respondent: San Miguel Brewery, Inc.
Ponente: Dizon, J.
Facts:
The petitioner is the salesman-in-charge of San Miguel Brewery, Inc. in Dagupan warehouse with
a monthly pay of P240.00, P5.00 per diem and a commission of P0.75 per case sold. On October 9,
1956, 8 days after Baltazar was appointed as the salesman-in-charge, the regular employees in Dagupan
warehouse went on strike because of unjust treatment. Baltazar was recalled to appellants Manila Office
on the 13th of October, 1956 upon the order of his superior and conduct an investigation. The investigation
found that the employees’ grievances were well founded. The next day, the strikers returned to their work
voluntarily. On October 15, the petitioner was informed that he was not to return to Dagupan anymore but
he still reported to work at the main office from October 16 to November 2, 1956 waiting for assignment.
From November 3 to December 19 on the same year, he absented himself from work without consent
from his superiors and without advising them or anybody else of the reason for his prolonged absence.
He was dismissed from work because of petitioner’s unauthorized absence and if the company would
consider its health, welfare and retirement plan requiring sick leave, still the petitioner did inexcusable
actions since sick leave, to be considered authorized and excusable, must be certified to by the company
physician and the appellant-company informed that Baltazar was dismissed effective November 30, 1956.
Baltazar initiated a complaint which the trial court ruled that Baltazar’s dismissal was justified but,
however, ordering San Miguel Brewery Inc. to pay Baltazar one month separation pay, plus the cash
value of 6 months accumulated sick leave.
Issue:
Whether or not the petitioner is entitled to one month separation pay and the cash value of 6
months accumulated sick leave.
Held:
No, the petitioner is not entitled to one month separation pay and the cash value of 6 months
accumulated sick leave. Under the Marcaida vs. Philippine Education Company 53 O.G. No. 23, RA 1052
makes reference to termination of employment, instead of dismissal, to exclude employees separated
from the service for causes attributable to their own fault. It is limited in its operation, to cases of
employment without definite period. When the employment is for a fixed duration, the employer may
terminate it even before the expiration of a stipulated period, should there be a substantial breach of
obligations by the employee; in which event the latter is not entitles to advance notice or separation pay. it
would patently, be absurd to grant a right thereto to an employee guilty of the same breach of obligation,
when the employment is without a definite period, as if he were entitled to greater protection than
employees engaged for a fixed duration. In connection with the question of whether or not petitioner is
entitled to the cash value of 6 months accumulated sick leave, it appears that while under the last
paragraph of Article 5 of appellant’s Rules and Regulations of Health, Welfare and Retirement Plan,
unused sick leave may be accumulated up to a maximum of 6 months, the same is not commutable or
payable in cash upon the employees’ option.

Ladylynne P. Flores
2011 – 0080
Case Title: CEZAR ODANGO IN HIS BEHALF OF 32 COMPLAINANTS VS. NATIONAL LABOR
RELATIONS COMMISSION AND ANTIQUE ELECTRIC COOPERATIVES, INC.
Date: June 10, 2004
Petitioner: Cezar Odango in his behalf of 32 complainants
Respondent: National Labor Relations Commissions and Antique Electric
Cooperatives, Inc.
Ponente: Carpio, J.
Facts:
Petitioners are monthly-paid employees whose workdays are from Monday to Friday and half of
Saturday. The Regional Branch of DOLE found Antique Electric Cooperatives, Inc. (ANTECO) liable for
underpayment of monthly-paid employees after a routine inspection, hence directing the ANTECO to pay
its employees wage differentials amounting to P1, 427,412.75. However, the respondent company failed
to comply. This lead to the filing of complaint of 33 monthly-paid employees with the NLRC Sub-Regional
Branch VI in Iloilo City, praying for the payment of wage differentials, damages and attorney’s fees. The
Labor arbiter, who heard the case, rendered a decision in favor of the petitioners granting them the wage
differentials amounting P1, 017,507.73 and attorney’s fees of 10%. In Labor Arbiter’s ruling, he pointed
out that ANTECO failed to disprove petitioners’ argument that monthly-paid employees are considered
paid for all the days in a month under Section 2, Rule IV of Book 3 of the Implementing Rules of the Labor
Code. Petitioners’ claim that this includes not only the 10 legal holidays, but also their un-worked half of
Saturdays and all of Sundays. The Labor Arbiter gave weight to petitioners’ arguments on the
computation of wages based on the 304 divisor used by ANTECO in converting the leave credits of its
employees. The Labor Arbiter concluded that ANTECO owed employees the wages for 61 days, the
difference between 365 and 304, for every year. ANTECO appealed the decision to the NLRC and the
latter reversed the Labor Arbiter’s decision and even dismissed the petitioner’s Motion for
Reconsideration. In NLRC’s ruling, the NLRC pointed out that the Labor Arbiter’s own computation
showed that the daily wage rate of the employees involved were above the minimum daily wage of P124.
It was shown that the lowest paid employees of ANTECO receiving a monthly wage of P3, 788. The
NLRC applied the formula in Section 2 (Daily Wage Rate = (Wage x 12)/365 to the monthly wage of P3,
788 to arrive at the daily wage rate of P124.54, an amount clearly above the minimum wage. Petitioners’
then elevated the case to the SC through a Petition for certiorari which the Court dismissed due to
petitioners’ failure to comply with Section II, Rule 13 of the Rules of Court. The SC referred the case to
CA which the latter also dismissed the petition due to petitioners’ failure to comply with Section 3, Rule 46
of the Rules of Court.
Issue:
Whether or not the petitioners’ being monthly-paid employees are entitled to their money claim.
Held:
The petition is denied. Petitioners’ argument that under Section 2, Rule IV of Book III of the
Omnibus Rules Implementing the Labor Code, monthly-paid employees are considered paid for all the
days of the month including un-worked days and since in the computation of leave credits, ANTECO uses
a divisor of 304, ANTECO is not paying them 61 days every year. This is unmeritorious. The said basis of

petitioners’ arguments is already void and in Insular Bank of Asia v. Inciong, it stated that, “Section 2, Rule
IV, Book 3 of the Implementing Rules and Policy Instructions No. 9 issued by the Secretary of Labor are
null and void since in the guise of clarifying the Labor Code’s provisions on holiday pay, they in effect
amended then by enlarging the scope of their exclusion. The Labor Code is clear that monthly-paid
employees are not excluded from the benefits of holiday pay. However, the implementing rules on holiday
pay promulgated by the Secretary of Labor excludes monthly-paid employees from the said benefits by
inserting, under Section 2, Rule IV of Book III of the implementing rules, that monthly-paid employees are
presumed to be paid for all days in the month whether worked or not.” Even assuming that the said
provision is valid, petitioners’ claim will still fail because of the basic rule of “no work, no pay.” The right to
be paid for un-worked days is generally limited to the 10 legal holidays in a year. On the other hand, the
use of ANTECO of a divisor less than 365 days cannot make the respondent company liable for
underpayment. The facts show that petitioners are required to work only from Monday to Friday and half
of Saturday. Thus, the minimum allowable divisor is 287, which is the result of 365 days, less 52 Sundays,
and less than 26 Saturdays (or 52 half Saturdays). Any divisor below 287 days means that ANTECO’s
workers are deprived of their holiday pay for some or all of the 10 legal holidays. The 304 divisor used by
ANTECO is clearly above the minimum of 287 days.

Ladylynne P. Flores
2011 – 0080
Case title: DAVAO INTEGRATED PORT STEVEDORING SERVICES VS. RUBEN V. ABARQUEZ
AND THE ASSOCIATION OF TRADE UNIONS (ATUTUCP)
G.R. number: G.R. No. 102132
Petitioner: Libron, Gaspar and Associates
Respondent: Bansalan B. Metilla for Association of Trade Unions (ATUTUCP)
Ponente: Romeo, J.
Facts:
The petitioner and the private respondent entered into a Collective Bargaining Agreement (CBA)
which, under Sections 1 and 3 of Article VIII, provides for sick leave with pay benefits each year to its
employees who have rendered at least one year of service with the company. Under Section 1, Article
VIII, the company agrees to grant 15 days sick leave with pay each year to every regular non-intermittent
worker who already rendered at least one year of service with the company. However, such sick leave
can only be enjoyed upon certification by a company designated physician, and if the same is not enjoyed
within one year period of the current year, any unenjoyed portion thereof, shall be converted to cash and
shall be paid at the end of the said one year period. And provided however, that only those regular
workers of the company whose work are not intermittent, are entitled to the sick leave privilege. On the
other hand, under Section 3 of the said article, it provides that all intermittent workers of the company who
are members of the Regular Labor Pool shall be entitled to vacation and sick leaves per year of service
with pay with the basis of the number of hours rendered including overtime. During the effectivity of the
CBA until three months of its renewal with a total of 3 years and 9 months, all the field workers of
petitioner who are members of the regular labor pool and the present regular extra labor pool who had
rendered at least 750 hours to 1,500 hours were extended sick leave with pay benefits. Every unenjoyed
portion thereof at the end of the current year was converted to cash and paid at the end of the said one-
year period. However, the commutation of unenjoyed portion of the sick leave was withdrawn when the
petitioner-company had a new assistant manager. It stopped the payment of its cash equivalent on the
ground that they are not entitled to the said benefits under the 1989 CBA, particularly Sections 1 and 3.
The Union brought the matter to NCMB and the parties mutually designated Ruben Abarquez, Jr. to act
as voluntary arbitrator. He ruled that Davao Integrated Port Stevedoring Corporation should grant and
extend sick leave privilege of the commutation of the unenjoyed portion of the sick leave of all the
intermittent field workers who are members of the regular labor pool and the present extra pool in
accordance with the CBA. The petitioner-company disagreed with the ruling. Hence, this petition.
Issue:
Whether or not intermittent field workers who are members of the regular labor pool and the
present extra pool in accordance with the CBA are entitled to the commutation of the unenjoyed portion of
the sick leave.

Held:
The petition is denied. A CBA, as used in Article 252 of the Labor Code, is a contract executed
upon request of either the employer or the exclusive bargaining representative incorporating the
agreement reached after the negotiations with respect to wages, hours of work and all other terms and
conditions of employment, including proposals for adjusting any grievances or questions arising such
agreement. It is unreasonable for the petitioner to isolate Section 1 of Article VIII of the 1989 CBA from
the other related section on sick leave with pay benefits. The manner they were deprive of the privilege
previously recognized and extended to them by the petitioner is not only tainted with arbitrariness but
likewise discriminatory in nature. Petitioner is of mistaken notion that since the privilege of commutation or
conversion to cash of the unenjoyed portion of the sick leave with pay benefits is found in Section 1,
Article VIII, only the regular non-intermittent workers and no other can avail of the said privilege because
of the proviso found in the last paragraph thereof. Public respondents correctly observed that the parties
to the CBA clearly intended the same sick leave privilege to be accorded the intermittent workers in the
same way that they are both given the same treatment with respect to vacation leaves – non-commutable
and non-cummulative. If they are treated equally with respect to vacation leave privilege, with more
reason should they be on par with each other with respect to sick leave benefits. Besides, if the intention
is otherwise, during its negotiations, why did not the parties expressly stipulate in the 1989 CBA that
regular intermittent workers are not entitled to commutation of the unenjoyed portion of their sick leave
with pay benefits? There had been no grave abuse of discretion by public respondent in issuing the
decision. Moreover, his interpretation of Sections 1 and 3, Article VIII of the 1989 CBA cannot be faulted
and is absolutely correct.

Ladylynne P. Flores
2011 – 0080
Case Title: CEZAR ODANGO IN HIS BEHALF OF 32 COMPLAINANTS VS. NATIONAL LABOR
RELATIONS COMMISSION AND ANTIQUE ELECTRIC COOPERATIVES, INC.
Date: June 10, 2004
Petitioner: Cezar Odango in his behalf of 32 complainants
Respondent: National Labor Relations Commissions and Antique Electric Cooperatives, Inc.
Ponente: Carpio, J.
Facts:
Petitioners are monthly-paid employees whose workdays are from Monday to Friday and half of
Saturday. The Regional Branch of DOLE found Antique Electric Cooperatives, Inc. (ANTECO) liable for
underpayment of monthly-paid employees after a routine inspection, hence directing the ANTECO to pay
its employees wage differentials amounting to P1, 427,412.75. However, the respondent company failed
to comply. This lead to the filing of complaint of 33 monthly-paid employees with the NLRC Sub-Regional
Branch VI in Iloilo City, praying for the payment of wage differentials, damages and attorney’s fees. The
Labor arbiter, who heard the case, rendered a decision in favor of the petitioners granting them the wage
differentials amounting P1, 017,507.73 and attorney’s fees of 10%. In Labor Arbiter’s ruling, he pointed
out that ANTECO failed to disprove petitioners’ argument that monthly-paid employees are considered
paid for all the days in a month under Section 2, Rule IV of Book 3 of the Implementing Rules of the Labor
Code. Petitioners’ claim that this includes not only the 10 legal holidays, but also their un-worked half of
Saturdays and all of Sundays. The Labor Arbiter gave weight to petitioners’ arguments on the
computation of wages based on the 304 divisor used by ANTECO in converting the leave credits of its
employees. The Labor Arbiter concluded that ANTECO owed employees the wages for 61 days, the
difference between 365 and 304, for every year. ANTECO appealed the decision to the NLRC and the
latter reversed the Labor Arbiter’s decision and even dismissed the petitioner’s Motion for
Reconsideration. In NLRC’s ruling, the NLRC pointed out that the Labor Arbiter’s own computation
showed that the daily wage rate of the employees involved were above the minimum daily wage of P124.
It was shown that the lowest paid employees of ANTECO receiving a monthly wage of P3, 788. The
NLRC applied the formula in Section 2 (Daily Wage Rate = (Wage x 12)/365 to the monthly wage of P3,
788 to arrive at the daily wage rate of P124.54, an amount clearly above the minimum wage. Petitioners’
then elevated the case to the SC through a Petition for certiorari which the Court dismissed due to
petitioners’ failure to comply with Section II, Rule 13 of the Rules of Court. The SC referred the case to
CA which the latter also dismissed the petition due to petitioners’ failure to comply with Section 3, Rule 46
of the Rules of Court.
Issue:
Whether or not the petitioners’ being monthly-paid employees are entitled to their money claim.
Held:
The petition is denied. Petitioners’ argument that under Section 2, Rule IV of Book III of the
Omnibus Rules Implementing the Labor Code, monthly-paid employees are considered paid for all the
days of the month including un-worked days and since in the computation of leave credits, ANTECO uses
a divisor of 304, ANTECO is not paying them 61 days every year. This is unmeritorious. The said basis of
petitioners’ arguments is already void and in Insular Bank of Asia v. Inciong, it stated that, “Section 2,
Rule IV, Book 3 of the Implementing Rules and Policy Instructions No. 9 issued by the Secretary of Labor
are null and void since in the guise of clarifying the Labor Code’s provisions on holiday pay, they in effect
amended then by enlarging the scope of their exclusion. The Labor Code is clear that monthly-paid
employees are not excluded from the benefits of holiday pay. However, the implementing rules on holiday
pay promulgated by the Secretary of Labor excludes monthly-paid employees from the said benefits by

inserting, under Section 2, Rule IV of Book III of the implementing rules, that monthly-paid employees are
presumed to be paid for all days in the month whether worked or not.” Even assuming that the said
provision is valid, petitioners’ claim will still fail because of the basic rule of “no work, no pay.” The right to
be paid for un-worked days is generally limited to the 10 legal holidays in a year. On the other hand, the
use of ANTECO of a divisor less than 365 days cannot make the respondent company liable for
underpayment. The facts show that petitioners are required to work only from Monday to Friday and half
of Saturday. Thus, the minimum allowable divisor is 287, which is the result of 365 days, less 52
Sundays, and less than 26 Saturdays (or 52 half Saturdays). Any divisor below 287 days means that
ANTECO’s workers are deprived of their holiday pay for some or all of the 10 legal holidays. The 304
divisor used by ANTECO is clearly above the minimum of 287 days.

Ladylynne P. Flores
2011 – 0080
Case title: UNION FILIPRO EMPLOYEES (UFE) VS. BENIGNO VIVAR, JR., NATIONAL
LABOR RELATIONS COMMISSION AND NESTLE PHILIPPINES, INC. (FORMERLY
FILIPRO, INC.)
Petitioner: Union Filipro Employees (UFE)
Respondent: Benigno Vivar, Jr., National Labor Relations Commission and Nestle Philippines, Inc.
(formerly Filipro, Inc.)
Ponente: Gutierrez, Jr., J.
Facts:
The respondent, Filipro Inc. (Nestle Philippines, Inc.), filed with the NLRC a petition for
declaratory relief seeking a ruling on its rights and obligations respecting claims of its monthly paid
employees for holiday pay. Both Filipro and the UFE agreed to submit the case voluntary arbitration and
appointed respondent Benigno Vivar, Jr. as voluntary arbitrator, which the latter rendered a decision
directing Filipro Inc. to pay its monthly-paid employees holiday pay pursuant to Article 94 of the Code,
subject only to the exclusions and limitations specified in Article 82 and such other legal restrictions as
are provided for in the Code. Filipro Inc. filed a motion for clarification requesting the limitation of award to
3 years; the exclusion of salesmen, sales representatives, truck drivers, merchandisers and medical
representatives from the award of the holiday pay and deduction from the holiday pay award of
overpayment for overtime, night differential, vacation and sick leave benefits due to the use of 251 divisor.
The respondent arbitrator ruled that the sales personnel are field personnel and are not entitled to holiday
pay. He even ruled that the 251 divisor should be changed to 261 and ordered the reimbursement of
overpayment for overtime, night differential, vacation and sick leave pay due to the use of the divisor 251.
Hence, this petition.
Issue/s:
(1) Whether or not Nestlé’s sales personnel are entitled to holiday pay; and (2) Whether or not, if
they are entitled to such holiday pay, the divisor should be change from 251 to 261 days.
Held:
Sales personnel are not entitled of holiday pay. Under Article 82, field personnel are not entitled
to holiday pay. Field personnel is defined as non-agricultural employees who regularly perform their
duties away from the principal place of business or branch office of the employer and whose actual hours
of work in the field cannot be determined with reasonable certainty. Even if there’s an 8:00 am to 4:00 or
4:30 pm working period of the said sales personnel, they are still considered “field personnel whose
actual work in the field cannot be determined.” The law requires that the actual hours of work in the field
be reasonably determined. The company has no way of determining whether or not these sales
personnel, even if they report to the office before 8:00 am prior to the field work and come back at 4:30
pm really spend the hours in between in actual field work. Moreover, under Rule IV, Book II of the
Implementing Rules provides the coverage of the holiday pay which states that rules on holiday pay shall
apply to all employees except “Field personnel and other employees whose in time and performance is
unsupervised by the employer..” Petitioner contends these sales personnel are strictly supervised as
shown by the SOD (Supervisor of the Day) schedule, however, this SOD does not at least signify that
these sales personnel’s time and performance are supervised. The purpose of this schedule is merely to
ensure that the sales personnel are out of the office not later than 8:00 am and are back in the office not
earlier than 4:00 pm.
With regards the change of divisor from 251 to 261 is modified since the change would result in a
the Labor Code.

Ladylynne P. Flores
2011 – 0080
Case title: WELLINGTON INVESTMENT AND MANUFACTURING CORPORATION VS.

CRESENCIANO B. TRAJANO, ELMER ABADILLA AND 34 OTHERS
Date: July 3, 1995
Petitioner: Wellington Investment and Manufacturing Corporation
Respondent: Cresenciano B. Trajano, Under-Secretary of Labor and Employment, Elmer Abadilla, and
34 others
Ponente: Narvasa, C.J.
Facts:
By virtue of the routine inspection conducted by a Labor Enforcement Officer, Wellington Flour
Mills owned by the petitioner-company was found non-payment of regular holidays falling on a Sunday for
monthly-paid employees. Wellington argued that the monthly-paid employees already includes holiday
pay for all regular holidays and there is no legal basis for the finding of alleged non-payment of regular
holidays falling on a Sunday. It further contends that it pays its monthly paid employees a fixed monthly
compensation using the “314 factor” which undeniably covers and already includes payment for all the
working days in a month as well as all the 10 un-worked regular holidays within a year. The Regional
Director ordered the petitioner to pay the employees additional compensation corresponding to 4 extra
working days. However, the petitioner argued that the company, using the “314 factor” already gave
complete payment of all compensation due to its workers. Petitioner appealed and was acted on by the
respondent Undersecretary. But still, Regional Director’s decision was affirmed. Hence, this petition.
Issue:
Whether or not a monthly-paid employees, receiving a fixed monthly compensation, is entitled to
an additional pay aside from his usual holiday pay whenever a regular holiday falls on a Sunday.
Held:
Regional Director’s decision, affirmed by the Undersecretary, is nullified and set aside. Every
worker should be paid his regular daily wage during regular holidays; except in retail and service
establishments regularly employing less than 10 workers, even if the worker does not work on these
regular holidays. The Wellington had been paying its employees a salary of not less than the statutory
minimum wage and that the monthly salary, thus, paid was not less than the statutory minimum wage
multiplied by 365 days divided by 12. Apparently the monthly salary was fixed by Wellington to provide for
compensation for every working day of the year including holidays specified by law and excluding only
Sundays. Wellington leaves no day unaccounted for, it is paying for all the days of a year with the
exception only of 51 Sundays.

Ladylynne P. Flores
2011 – 0080
Case title: JOSE RIZAL COLLEGE VS. NLRC AND NAT/OFFICE WORKERS
G.R number: G.R. No. L-65482
Petitioner: Jose Rizal College
Respondent: National Labor Relations Commission and National Alliance of Teachers/Office Workers
Ponente: Paras, J.
Facts:
Petitioner is a non-stock, non-profit educational institution. It has three groups of employees
categorized as follows: (a) personnel on monthly basis, who receive their monthly salary uniformly
throughout the year, irrespective of the actual number of working days in a month without deduction for
holidays; (b) personnel on daily basis who are paid on actual days worked and they received un-worked
holiday pay; and (c) collegiate faculty who are paid on the basis of student contract hour. They sign
contracts before the start of the semester. National Alliance of Teachers and Office Workers filed a
complaint against the college when the latter failed to pay them the required holiday pay. In the ruling of
the Labor Arbiter, it stated that the faculty and personnel of Jose Rizal College who are paid their salary
by the month uniformly in a school year, irrespective of the number of working days in a month, without
deduction for holidays, are presumed to be already paid the 10 paid legal holidays and are no longer
entitled to the separate payment for the said regular holidays; the personnel of Jose Rizal College who
are paid their wages daily are entitles to be paid the 10 un-worked regular holidays according to the
pertinent provisions of the Rules and Regulations Implementing the Labor Code; and, Collegiate faculty of
Jose Rizal College who by contract are paid compensation per student contract hour are not entitled to
un-worked holiday pay considering that these regular holidays have been excluded in the programming of
the student contract hours. The NLRC modified the Labor Arbiter’s decision with regards to the collegiate
faculty. NLRC held that collegiate faculty is entitled to holiday pay. Hence, this petition.
Issue:
Whether or not the collegiate faculty according to their contracts is paid per lecture hour are
entitled to un-worked holiday pay.
Held:
The NLRC rendered a new decision exempting the college from paying hourly paid faculty
members their pay for regular holidays, whether the same be during the regular semesters of the school
year or during semestral, Christmas, or Holy Week vacations but ordering the said college to pay the
faculty members their regular hourly rate on days declares as special holidays or for some reason classes
are called off or shortened for the hours they are supposed to have taught, whether extensions of class
days be ordered or not; in case of extensions said faculty members shall likewise be paid their hourly
rates should they teach during said extensions. Article 94 of the Labor Code states the right to holiday
pay. Under par. a, every worker shall be paid his regular daily wage during regular holidays, except in
retail and service establishments regularly employing less than 10 workers, and Section 8, Rule IV, Book
III of the IRR states the holiday pay of certain employees in which under par. a, private school teachers,
including faculty members of colleges and universities, may not be paid for the regular holidays during
semestral vacations. They shall, however, be paid for the regular holidays during Christmas vacations
etc. Under these provisions, the faculty members are entitled for un-worked holiday pay. However, the
law is silent with respect to the faculty members paid by the hour who because of their teachings
contracts are obliged to work and consent to be paid only for work actually done. Regular holidays
specified as such by law are known to both school and faculty members as no class days, certainly the
latter do not expect payment for said un-worked days, and thus this was clearly in their minds when they
entered into the teaching contract.

Ladylynne P. Flores
2011 – 0080
Case title: NICANOR M. BALTAZAR VS. SAN MIGUEL BREWERY, INC.

Petitioner: Nicanor M. Baltazar
Respondent: San Miguel Brewery, Inc.
Ponente: Dizon, J.
Facts:
The petitioner is the salesman-in-charge of San Miguel Brewery, Inc. in Dagupan warehouse with
a monthly pay of P240.00, P5.00 per diem and a commission of P0.75 per case sold. On October 9,
1956, 8 days after Baltazar was appointed as the salesman-in-charge, the regular employees in Dagupan
warehouse went on strike because of unjust treatment. Baltazar was recalled to appellants Manila Office
on the 13th of October, 1956 upon the order of his superior and conduct an investigation. The
investigation found that the employees’ grievances were well founded. The next day, the strikers returned
to their work voluntarily. On October 15, the petitioner was informed that he was not to return to Dagupan
anymore but he still reported to work at the main office from October 16 to November 2, 1956 waiting for
assignment. From November 3 to December 19 on the same year, he absented himself from work without
consent from his superiors and without advising them or anybody else of the reason for his prolonged
absence. He was dismissed from work because of petitioner’s unauthorized absence and if the company
would consider its health, welfare and retirement plan requiring sick leave, still the petitioner did
inexcusable actions since sick leave, to be considered authorized and excusable, must be certified to by
the company physician and the appellant-company informed that Baltazar was dismissed effective
November 30, 1956. Baltazar initiated a complaint which the trial court ruled that Baltazar’s dismissal was
justified but, however, ordering San Miguel Brewery Inc. to pay Baltazar one month separation pay, plus
the cash value of 6 months accumulated sick leave.
Issue:
Whether or not the petitioner is entitled to one month separation pay and the cash value of 6
months accumulated sick leave.
Held:
No, the petitioner is not entitled to one month separation pay and the cash value of 6 months
accumulated sick leave. Under the Marcaida vs. Philippine Education Company 53 O.G. No. 23, RA 1052
makes reference to termination of employment, instead of dismissal, to exclude employees separated
from the service for causes attributable to their own fault. It is limited in its operation, to cases of
employment without definite period. When the employment is for a fixed duration, the employer may
terminate it even before the expiration of a stipulated period, should there be a substantial breach of
obligations by the employee; in which event the latter is not entitles to advance notice or separation pay. it
would patently, be absurd to grant a right thereto to an employee guilty of the same breach of obligation,
when the employment is without a definite period, as if he were entitled to greater protection than
employees engaged for a fixed duration. In connection with the question of whether or not petitioner is
entitled to the cash value of 6 months accumulated sick leave, it appears that while under the last
paragraph of Article 5 of appellant’s Rules and Regulations of Health, Welfare and Retirement Plan,
unused sick leave may be accumulated up to a maximum of 6 months, the same is not commutable or
payable in cash upon the employees’ option.

Ladylynne P. Flores
2011 – 0080
Case title: DAVAO INTEGRATED PORT STEVEDORING SERVICES VS. RUBEN V. ABARQUEZ
AND THE ASSOCIATION OF TRADE UNIONS (ATUTUCP)
Petitioner: Libron, Gaspar and Associates
Respondent: Bansalan B. Metilla for Association of Trade Unions (ATUTUCP)
Facts:
The petitioner and the private respondent entered into a Collective Bargaining Agreement (CBA)
which, under Sections 1 and 3 of Article VIII, provides for sick leave with pay benefits each year to its
employees who have rendered at least one year of service with the company. Under Section 1, Article
VIII, the company agrees to grant 15 days sick leave with pay each year to every regular non-intermittent
worker who already rendered at least one year of service with the company. However, such sick leave
can only be enjoyed upon certification by a company designated physician, and if the same is not enjoyed
within one year period of the current year, any unenjoyed portion thereof, shall be converted to cash and
shall be paid at the end of the said one year period. And provided however, that only those regular
workers of the company whose work are not intermittent, are entitled to the sick leave privilege. On the
other hand, under Section 3 of the said article, it provides that all intermittent workers of the company who
are members of the Regular Labor Pool shall be entitled to vacation and sick leaves per year of service
with pay with the basis of the number of hours rendered including overtime. During the effectivity of the
CBA until three months of its renewal with a total of 3 years and 9 months, all the field workers of
petitioner who are members of the regular labor pool and the present regular extra labor pool who had
rendered at least 750 hours to 1,500 hours were extended sick leave with pay benefits. Every unenjoyed
portion thereof at the end of the current year was converted to cash and paid at the end of the said one-
year period. However, the commutation of unenjoyed portion of the sick leave was withdrawn when the
petitioner-company had a new assistant manager. It stopped the payment of its cash equivalent on the
ground that they are not entitled to the said benefits under the 1989 CBA, particularly Sections 1 and 3.
The Union brought the matter to NCMB and the parties mutually designated Ruben Abarquez, Jr. to act
as voluntary arbitrator. He ruled that Davao Integrated Port Stevedoring Corporation should grant and
extend sick leave privilege of the commutation of the unenjoyed portion of the sick leave of all the
intermittent field workers who are members of the regular labor pool and the present extra pool in
accordance with the CBA. The petitioner-company disagreed with the ruling. Hence, this petition.
Issue:
Whether or not intermittent field workers who are members of the regular labor pool and the
present extra pool in accordance with the CBA are entitled to the commutation of the unenjoyed portion of
the sick leave.
Held:
The petition is denied. A CBA, as used in Article 252 of the Labor Code, is a contract executed
upon request of either the employer or the exclusive bargaining representative incorporating the
agreement reached after the negotiations with respect to wages, hours of work and all other terms and
conditions of employment, including proposals for adjusting any grievances or questions arising such
agreement. It is unreasonable for the petitioner to isolate Section 1 of Article VIII of the 1989 CBA from
the other related section on sick leave with pay benefits. The manner they were deprive of the privilege
previously recognized and extended to them by the petitioner is not only tainted with arbitrariness but
likewise discriminatory in nature. Petitioner is of mistaken notion that since the privilege of commutation or
conversion to cash of the unenjoyed portion of the sick leave with pay benefits is found in Section 1,

Article VIII, only the regular non-intermittent workers and no other can avail of the said privilege because
of the proviso found in the last paragraph thereof. Public respondents correctly observed that the parties
to the CBA clearly intended the same sick leave privilege to be accorded the intermittent workers in the
same way that they are both given the same treatment with respect to vacation leaves – non-commutable
and non-cummulative. If they are treated equally with respect to vacation leave privilege, with more
reason should they be on par with each other with respect to sick leave benefits. Besides, if the intention
is otherwise, during its negotiations, why did not the parties expressly stipulate in the 1989 CBA that
regular intermittent workers are not entitled to commutation of the unenjoyed portion of their sick leave
with pay benefits? There had been no grave abuse of discretion by public respondent in issuing the
decision. Moreover, his interpretation of Sections 1 and 3, Article VIII of the 1989 CBA cannot be faulted
and is absolutely correct.

Ladylynne P. Flores
2011 – 0080
Case title: DONALD KWOK VS. PHILIPPINE CARPET MANUFACTURING CORPORATION

Petitioner: Donald Kwok
Respondent: Philippine Carpet Manufacturing Corporation
Ponente: Callejo, Sr., J.
Facts:
Donald Kwok and his father-in-law, Patricio L. Lim, along with some other stockholders,
established the Philippine Carpet Manufacturing Company in 1965. The petitioner retired 36 years later
and upon retirement, he claimed the cash equivalent of what he believed to be his accumulated vacation
and sick leave credits during the entire length of his service with the company, which the total amount
reached P7, 080, 546.00 plus interest. The respondent corporation refused to accede to the petitioner’s
demand claiming that the latter is not entitled to it. The petitioner filed a complaint before the NLRC. He
claimed that Lim made a verbal promise to give him unlimited sick leave and vacation leave benefits and
its cash conversion upon his retirement or resignation without the need for application therefor. The
respondent denied all of these and claimed that petitioner’s demand was without legal basis. It was
further pointed out that as per Memorandum dated November 6, 1981, only regular employees and
managerial and confidential employees falling under Category I were entitled to vacation and sick leave
credits. The petitioner, whose position did not fall under Category I was not entitled to the benefits under
the said memorandum. Labor Arbiter ruled in favor of the petitioner. The corporation was directed to pay
the petitioner the amount he was demanding plus interest and 10% attorney’s fees. The corporation
appealed the decision and the NLRC reversed the decision of the Labor Arbiter. the petitioner appealed
the NLRC’s decision to the CA but the CA affirmed the NLRC’s decision. Hence, this petition.
Issue:
Whether or not the petitioner is entitled, based on the documentary and testimonial evidence on
record, to the cash value of his vacation and sick leave credits in the total amount of P7, 080, 546.00.
Held:
The petition is denied. The petitioner failed to convince the Court that the actual findings of the
CA were arbitrary. Contracts entered into by a corporate officer or obligations or prestations assumed by
such officer for and in behalf of such corporation are binding on the said corporation only if such ofiicer
acted within the scope of his authority or if such officer exceeded the limits of his authority, the
corporation has ratified such contracts. In the present case, the petitioner relied principally on his
testimony to prove that Lim made a verbal promise to give him vacation and sick leave credits, as well as
the privilege of converting the same into cash upon retirement. The Court agrees that those who belong
to the upper corporate echelons would have more privileges. However, the Court cannot presume the
existence of such privileges. The petitioner was burdened to prove not only the existence of such benefits
but also that he is entitled to the same, especially considering that such privileges are not inherent to the
positions occupied by the petitioner in the respondent corporation. In a testimonial evidence, the
petitioner is aware that he is not covered of the Memorandum granting the PCMC employees the
conversion of their unused vacation and sick leaves into cash. Even assuming that the petitioner is
included among the regular employees referred in the memorandum, there is no evidence that he
complied with the cut-off dates for the filing of the cash conversion of vacation and sick leaves. This being
so, the petitioner’s money claim have already been barred by the three-year prescriptive period under
Article 291 of the Labor Code. Additional to that, there is no proof that petitioner has filed vacation and
sick leaves with the company’s personnel department. Without a record of petitioner’s absences, there is
no way to determine the actual number of leave credits he is entitled to. The amount which the petitioner

is demanding is baseless. Regarding the verbal promise that Lim made to the petitioner, the promise
cannot bind the company in the absence of any Board resolution to that effect. The personal act of the
company president cannot bind the corporation.

Ladylynne P. Flores
2011 – 0080
Case title: JOSE SONGCO VS. NLRC (FIRST DIVISION)

Petitioner: Jose Songco, Romeo Cipres and Amancio Manuel
Respondent: National Labor Relations Commission (First Division), Labor Arbiter Flavio Aguas, and
F.E. Zuellig (M), Inc.
Facts:
Zuellig (M) Inc. filed with the Department of Labor (Regional Office No. 4) a clearance to
terminate the services of petitioners Jose Songco, Romeo Cipres and Amancio Manuel due to alleged
financial losses. However, the petitioners argued that the company is not suffering any losses and the
real reason for their termination was their membership in the union. At the last hearing of the case, the
petitioner manifested that they no longer contesting their dismissal, however, they argued that they
should be granted a separation pay. Each of the petitioners was receiving a monthly salary of P40,
000.00 plus commissions for every sale they made. Under the CBA entered by the Zuellig Inc. and the
petitioners, in Article XIV, Section 1(a), Any employee, who is separated from employment due to old age,
sickness, death or permanent lay-off not due to the fault of said employee shall receive from the company
a retirement gratuity in an amount equivalent to one month’s salary per year of service. One month of
salary as used in this paragraph shall be deemed equivalent to the salary at date of retirement; years of
service shall be deemed equivalent to total service credits, a fraction of at least six months being
considered one year, including probationary employment. Other basis for petitioners’ contention are
Article 284 of the Labor Code with regards to reduction of personnel and Sections 9(b) and 10 of Rule 1,
Book VI of the Rules Implementing the Labor Code. The Labor Arbiter rendered his decision directing the
company to pay the complainants separation pay equivalent to their one month salary (exclusive of
commissions, allowances, etc.) for every year of service that they have worked with the company. The
petitioners appealed to the NLRC but it was denied. Petitioner Romeo Cipres filed a Notice of Voluntary
Abandonment and Withdrawal of petition contending that he had received, to his full and complete
satisfaction, his separation pay. Hence, this petition.
Issue:
Whether or not earned sales commissions and allowances should be included in the monthly
salary of petitioners for the purpose of computation of their separation pay.
Held:
The petition is granted. Petitioners’ contention that in arriving at the correct and legal amount of
separation pay due to them, whether under the Labor Code or the CBA, their basic salary, earned sales
commissions and allowances should be added together. Insofar as whether the allowances should be
included in the monthly salary of petitioners for the purpose of computation of their separation pay is
concerned, this has been settled in the case of Santos vs. NLRC, 76721, in the computation of
backwages and separation pay, account must be taken not only of the basic salary of petitioner but also
of her transportation and emergency living allowances. In the issue of whether commission should be
included in the computation of their separation pay, it is proper to define first commission. Black’s Law
Dictionary defined commission as the recompensed, compensation or reward of an agent, salesman,
executor, trustees, receiver, factor, broker or bailee, when the same is calculated as a percentage on the
amount of his transactions or on the profit to the principal. The nature of the work of a salesman and the
reason for such type of remuneration for services rendered demonstrate clearly that the commission are
part of petitioners’ wage and salary. Some salesmen do not receive any basic salary but depend on
commission and allowances or commissions alone, are part of petitioners’ wage and salary. Some

salesman do not received any basic salary but depend on commission and allowances or commissions
alone, although an employer-employee relationship exist. In Soriano v. NLRC, it is ruled then that, the
commissions also claimed by petitioner (override commission plus net deposit incentive) are not properly
includible in such base figure since such commissions must be earned by actual market transactions
attributable to petitioner. Applying this by analogy, since the commissions in the present case were
earned by actual market transactions attributable to petitioners, these should be included in their
separation pay. In the computation thereof, what should be taken into account is the average
commissions earned during their last year of employment.

Ladylynne P. Flores
2011 – 0080
Case title: ALIPIO R. RUGA ET AL. VS. NLRC

G.R. number: G.R. No. L-72654-61
Petitioner: Alipio R. Ruga, Jose Parma, Eladio Calderon, Laurente Bautu, Jaime Barbin, Nicanor
Francisco, Philip Cervantes and Eleuterio Barbin
Respondent: National Labor Relations Commission and De Guzman Fishing Enterprises and/or
Arsenio de Guzman
Ponente: Fernan, J.
Facts:
The petitioners were the fishermen-crew members of 7/B Sandyman II, one of several fishing
vessels owned by the De Guzman Fishing Enterprises which is primarily in the fishing business with port
and office at Camarines Sur. On September 11, 1983, petitioners were told to proceed to the police
station for investigation on the report that they sold some of their fish-catch at midsea. The petitioners
denied the charge claiming that the allegation was a countermove because of the formation of their union.
The complaint was dismissed because there were no witnesses that would support the company’s
allegation. The petitioners, however, were not allowed to return to the fishing vessel to resume their work
on that same day. Each of the them filed a complaints for illegal dismissal and non-payment of 13th month
pay, emergency cost-of-living allowance and service incentive pay with the Ministry (now DOLE). The
company denied the petitioners being their employees, further contending that they were only engaged in
a joint venture. The Labor Arbiter rendered a joint decision dismissing all the complaint of the petitioners.
Petitioners appealed the case to the NLRC which affirmed the Labor Arbiter’s decision that a joint fishing
venture and not employer-employee relationship exist between the private respondent and the
petitioners. Hence, this petition.
Issue:
Whether or not the fishermen-crew members of the trawl fishing vessel 7/B Sandyman II are
employees of its owner-operator, De Guzman Fishing Enterprise, and if so, whether or not they were
illegally dismissed from their employment.
Held:
The petitioners were illegally dismissed from their employment. In determining the existence of
employer-employee relationship, the elements that are generally considered are the following: (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d)
the employer’s power to control the employee with respect to the means and methods by which the work
is to be accomplished. The employment arises from contract of hire, express or implied. In the absence of
hiring, no employer-employee relationship could exist. Records show in the instant case that petitioners
were directly hired by the general manager of the company and its operations manager. Petitioner Alipio
Ruga was hired on September 29, 1974 as patron/captain of the fishing vessels; Eladio Calderon started
as mechanic on April 16, 1968 until he was promoted as chief engineer of the fishing vessel; Jose Pama
was employed on September 29, 1974 as assistant engineer; Jaime Barbin started as a pilot of the motor
boat until he was transferred as a master fisherman to the fishing vessel 7/B Sandyman II; Philip
Cervantes was hired as winchman on August 1, 1972 while Eleuterio Barbin was hired as winchman on
April 15, 1976. While tenure or length of employment is not considered as the test of employment,
nevertheless the hiring of petitioners to perform work which is necessary or desirable in the usual
business or trade of private respondent for a period of 8-15 years since 1968 qualify them as regular
employees within the meaning of Article 281 of the Labor Code as they were indeed engaged to perform
activities usually necessary or desirable in the usual fishing business or occupation of private respondent.
The virtual dismissal of petitioners from their employment was characterized by undue haste when less
extreme measures consistent with the requirements of due process should have been first exhausted. In
that sense, the dismissal of petitioners was tainted with illegality.

Ladylynne P. Flores
2011 – 0080
Case title: STATE MARINE CORPORATION VS. CEBU SEAMEN’S ASSOCIATION

Petitioner: State Marine Corporation and Royal Line, Inc.
Respondent: Cebu Seamen’s Association
Ponente: Paredes, J.
Facts:
The petitioners were engaged in the business of marine coastwise transportation. They had a
CBA with the Cebu Seamen’s Association. On September 12, 1952, the respondent union filed a
complaint against the petitioners alleging that the officers and men working on board the petitioners’
vessels have not been paid their sick leave, vacation leave and overtime pay; that the petitioners’
threatened then to accept the reduction of salaries, observed by other shipowners; that after the Minimum
Wage Law had taken effect, the petitioners required their employees on board their vessels, to pay the
sum of P0.40 for every meal, while the masters and officers were required to pay their meals and that
because the captain had refused to yield to the general reduction of salaries, the petitioners dismissed
the captain. The petitioner, on their defense, stated that they have suffered a financial losses in the
operation of their vessels and there is no law which provides for the payment of sick leave or vacation
leave to employees of private firms; that with regards to their overtime pay, they have always observed
the Eight-hour labor Law and that overtime does not apply to those who provide means of transportation.
The decision ruled in favor of the respondent union. Hence, this petition.
Issue:
Whether or not the required meals which the petitioner company deducted from the salary of the
employees is considered as facilities, and not supplements.
Held:
Supplements constitute extra remuneration or special privileges or benefits given to or received
by the laborers over and above their ordinary earnings or wages. Facilities, on the other hand, are items
of expense necessary for the laborer’s and his family’s existence and subsistence so that by express
provisions of law, they form part of the wage and when furnished by the employer are deductible
therefrom, since if they are not so furnished, the laborer would spend and pay them just the same. It is
argued that the food or meal given to the deck officers, marine engineers and unlicensed crew members
in question, were mere facilities which should be deducted from wages, and not supplements which,
according to Section 19 of the Minimum Wage Law, should not be deducted from such wages. It was
found out that the meals were freely given to crew members prior to the effectivity of the Minimum Wage
Law while they were on the high seas not as part of their wages but as a necessary matter in the
maintenance of the health and efficiency of the crew members during the voyage. The deductions therein
made for the meals given after August 4, 1951, should be returned to them, and the operator of the
coastwise vessels should continue giving the benefits. Wherefore, the petition is dismissed, finding out
that the meals or food in question are not facilities but supplements.

Ladylynne P. Flores
2011 – 0080
Case title: NORMA MABEZA VS. NLRC

Petitioner: Norma Mabeza
Respondent: National Labor Relations Commission and Peter Ng/Hotel Supreme
Facts:
Petitioner Norma Mabeza and her co-employees at the Hotel Supreme in Baguio City were asked
by the hotel’s management to sign an instrument attesting to the latter’s compliance with minimum wage
and other labor standard provision. The instrument provides that they have no complaints against the
management of the Hotel Supreme as they are paid accordingly and that they are treated well. The
petitioner signed the affidavit but refused to go to the City’s Prosecutor’s Office to confirm the veracity and
contents of the affidavit as instructed by management. That same day, as she refused to go to the City
Prosecutor’s Office, she was ordered by the hotel management to turn over the keys to her living quarters
and to remove her belongings to the hotel’s premises. She then filed a leave of absence which was
denied by her employer. She attempted to return to work but the hotel’s cashier told her that she should
not report to work and instead continue with her unofficial leave of absence. Three days after her attempt
to return to work, she filed a complaint against the management for illegal dismissal before the Arbitration
Branch of the NLRC in Baguio City. In addition to that, she alleged underpayment of wages, non-payment
of holiday pay, service incentive leave pay, 13th month pay, night differential and other benefits. Peter Ng,
in their Answer, argued that her unauthorized leave of absence from work is the ground for her dismissal.
He even maintained that her alleged of underpayment and non-payment of benefits had no legal basis.
He raises a new ground of loss of confidence, which was supported by his filing of criminal case for the
alleged qualified theft of the petitioner. The Labor Arbiter ruled in favor of the hotel management on the
ground of loss of confidence. She appealed to the NLRC which affirmed the Labor Arbiter’s decision.
hence, this petition.
Issue:
Whether or not the dismissal by the private respondent of petitioner constitutes an unfair labor
practice.
Held:
The NLRC’s decision is reversed. The pivotal question in any case where unfair labor practice on
the part of the employer is alleged is whether or not the employer has exerted pressure, in the form of
restraint, interference or coercion, against his employee’s right to institute concerted action for better
terms and conditions of employment. Without doubt, the act of compelling employees to sign an
instrument indicating that the employer observed labor standard provisions of the law when he might not
have, together with the act of terminating or coercing those who refuse to cooperate with the employees’
scheme constitutes unfair labor practice. The labor arbiter’s contention that the reason for the monetary
benefits received by the petitioner between 1981 to 1987 were less than the minimum wage was because
petitioner did not factor in the meals, lodging, electric consumption and water she received during the
period of computations. Granting that meals and lodging were provided and indeed constituted facilities,
such facilities could not be deducted without the employer complying first with certain legal requirements.
Without satisfying these requirements, the employer simply cannot deduct the value from the employee’s
ages. First, proof must be shown that such facilities are customarily furnished by the trade. Second, the
provision of deductible facilities must be voluntary accepted in writing by the employee. Finally, facilities
must be charged at fair and reasonable value. These requirements were not met in the instant case.

Private respondent failed to present any company policy to show that the meal and lodging are part of the
salary. He also failed to provide proof of the employee’s written authorization and he failed to show how
he arrived at the valuations. More significantly, the food and lodging, or electricity and water consumed by
the petitioner were not facilities but supplements. A benefit or privilege granted to an employee for the
convenience of the employer is not a facility. The criterion in making a distinction between the two not so
much lies in the kind but the purpose. Considering, therefore, that hotel workers are required to work on
different shifts and are expected to be available at various odd hours, their ready availability is a
necessary matter in the operations of a small hotel, such as the private respondent’s hotel.

Ladylynne P. Flores
2011 – 0080
Case title: PHILIPPINE AIRLINES, INC. VS. NLRC

Petitioner: Philippine Airlines Inc.
Respondent: National Labor Relations Commission and Armando Dolina
Ponente: Cortes, J.
Facts:
Armando Dolino was admitted to the PAL Aviation School for training as a pilot. The training
agreement bound PAL to provide regular and permanent employment to Dolina upon the completion of
the training course. Dolina completed the course and he was issued a license as Commercial Pilot and
PAL extended him a temporary appointment for 6 months for Limited First Officer. When his appointment
was due to expire, he fell short of the required time and to enable him to complete the requirement, his
employment was extended for another 6 months which appointment was described as permanent. When
he’s appointment was due to expire again, he was still short of the minimum flying time requirement and
he was extended again. On the third extension of his appointed, he completed the flying time
requirements. Pending his physical examination, he’s employment was extended again. When Dolina
took a psychological examination, his adaptability rating was found unacceptable. The Board then
decided that Dolina is not qualified for regular employment in the Company. PAL filed a clearance
application for Dolina’s termination and in the meantime, Dolina was placed under preventive suspension.
However, the Department of Labor lifted the preventive suspension and ordered petitioner to reinstate
Dolina to his former position with full backwages. PAL appealed the case and the decision was reversed.
PAL removed Dolina from its payroll and claiming that it was no longer obliged to return Dolina from its
payroll since the decision of the Labor Arbiter was a final resolution of the case by arbitration. Dolina
appealed to the NLRC which the latter dismissed the clearance application of PAL. Dolina must be
restored to the payroll and paid for his salaries from the date he was dropped from the PAL’s payroll.
Issue:
Whether or not the NLRC committed grave abuse of discretion in holding that private respondent
Dolina was entitled to his salaries from the time he was dropped from PAL’s payroll until this case is
finally resolved.
Held:
The decision requiring the petitioner to restore private respondent to its payroll and ordering the
payment of his salaries from the time he was dropped from PAL’s payroll until this case is finally resolved
is null and void. In lieu of reinstatement and the payment of his backwages, private respondent was
included in the petitioner’s payroll; effective from the time he was preventively suspended until final
resolution of the case by arbitration, without having to perform any work for the petitioner. In entering into
agreement, the parties could not have intended to include in the clause “final resolution of the case by
arbitration” the whole adjudicatory process, including appeal. For it were so, even proceedings on
certiorari before this court would be embraced by the term “arbitration” and private respondent will
continue to receive monthly salary without rendering any service to the petitioner regardless of the
outcome of the proceedings before the Labor Arbiter, for as long as one of the parties appeal to the
NLRC and until the case is finally resolved by this court. This is absolutely in contrast with the principle of
“Fair Day’s Wage for a Fair Day’s Labor.” The court holds that respondents NLRC’s order for the
continued payment of Dolina’s salaries from he was dropped from the PAL’s payroll until the case is
finally resolved is contrary to law and established jurisprudence and the NLRC acted in excess of its
jurisdiction in issuing the assailed order.

Ladylynne P. Flores
2011 – 0080
Case title: SSS vs. SSS Supervisors’ Union-CUGCO

Petitioner: Social Security System
Respondent: SSS Supervisors’ Union-CUGCO and Court of Industrial Relations
Ponente: Melencio-Herrera, J.
Facts:
The members of the respondent Union did not work during the 17-day strike declared in 1968 by
the rank and file Union (the Philippine Association of Free Labor Unions <PALFU>). The SSS and the
PALFU had a disagreement concerning the interpretation of the provisions of their CBA. The PALFU’s
decision to strike is the effect of the CIR Order of August 29, 1968 enjoining the parties, for the sake of
industrial peace..to maintain the status quo- the Union not to declare any strike and the Management not
to dismiss nor suspend any of its employees nor to declare any lock out. The SSS, in that same case,
filed an Urgent Petition to declare the strike illegal. The respondent Union filed a Motion for Intervention in
the said case alleging that it had not participated in the strike; that it’s members wanted to report for work
but were prevented by the picketers from entering the work premises; that under the circumstances, they
were entitled to their salaries corresponding to the duration of the strike, which could be deducted from
the accrued leave credits of their members.
Issue:
Whether or not the members of the respondent Union who admittedly did not work during the 17-
day strike conducted by the PALFU is entitled to their salaries.
Held:
According to the doctrine of “Fair day’s wage for a Fair day’s labor”, if there is no work performed
by the employee there can be no wage or pay, unless of course the laborer was able, willing and ready to
work but was illegally locked out, dismissed nor suspended. It is hardly fair or just for an employee or
laborer to fight or litigate against his employer on the employer’s time. In this case, the failure to work on
the part of the members of the respondent Union was due to circumstances not attributable to
themselves. But neither should the burden of the economic loss suffered by them be shifted to their
employer, the SSS, which was equally faultless, considering that the situation was not a direct
consequence of the employer’s lockout or unfair practice. With this, it is fair that they won’t be receiving
their salary for those days they did not work.

Ladylynne P. Flores
2011 – 0080
Case title: PEOPLE VS. DOMINGO PANIS

G.R. number: G.R. Nos. L-58674-77
Date: July 11, 1990
Petitioner: People of the Philippines
Respondent: Hon. Domingo Panis, presiding judge of the Court of First Instance of ZAmbales and
Olongapo City, Branch III and Serapio Abug
Ponente: Cruz, J.
Facts:
Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales and
Olongapo City alleging that Serapio Abug, without first securing a license from the Ministry of Labor as a
holder of authority to operate a fee-charging employment agency, operate a private fee-charging
employment agency by charging fees and expenses from and promising employment in Saudi Arabia to
four separate individuals, thus, violating Article 16 in relation to Article 39 of the Labor Code. The private
respondent filed a motion to quash alleging that the information do not constitute an offense because he
was accused of illegally recruiting only one person in each of the four informations and according to him,
under Article 13(b), there would be illegal recruitment only “whenever two or more persons are in any
manner promised of offered any employment for a fee”. The position of the petitioner is that the private
respondent is being prosecuted under Article 39 in relation to Article 16 of the Labor Code and not under
Article 13(b). However, Article 13(b) is somehow applicable since Article 39 in relation to Article 16
punishes acts of recruitment without proper authority.
Issue:
Whether or not Article 13(b) of the Labor Code is applicable in determining the liability of the
private respondent.
Held:
Article 13(b) of the Labor Code was merely specified to create a presumption. The presumption is
that the individual or entity is engaged in recruitment and placement whenever he or it is dealing with two
or more persons to whim, in consideration of a fee, an offer or promise of employment is made in the
course of the “canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring of workers”.
The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of
workers. Any of the acts mentioned in the basic rule in Article 13(b) win constitute recruitment and
placement even if only one prospective worker is involved. It merely lays down a rule of evidence that
where a fee is collected in consideration of a promise or offer of employment to two or more prospective
workers, the individual or entity dealing with them shall be deemed to be engaged in the act of
recruitment and placement. The words “shall be deemed” create that presumption.

Ladylynne P. Flores
2011 – 0080
Case title: JOSE RIZAL COLLEGE VS. NLRC AND NAT/OFFICE WORKERS
G.R number: G.R. No. L-65482
Petitioner: Jose Rizal College
Respondent: National Labor Relations Commission and National Alliance of Teachers/Office Workers
Ponente: Paras, J.
Facts:
Petitioner is a non-stock, non-profit educational institution. It has three groups of employees
categorized as follows: (a) personnel on monthly basis, who receive their monthly salary uniformly
throughout the year, irrespective of the actual number of working days in a month without deduction for
holidays; (b) personnel on daily basis who are paid on actual days worked and they received un-worked
holiday pay; and (c) collegiate faculty who are paid on the basis of student contract hour. They sign
contracts before the start of the semester. National Alliance of Teachers and Office Workers filed a
complaint against the college when the latter failed to pay them the required holiday pay. In the ruling of
the Labor Arbiter, it stated that the faculty and personnel of Jose Rizal College who are paid their salary
by the month uniformly in a school year, irrespective of the number of working days in a month, without
deduction for holidays, are presumed to be already paid the 10 paid legal holidays and are no longer
entitled to the separate payment for the said regular holidays; the personnel of Jose Rizal College who
are paid their wages daily are entitles to be paid the 10 unworked regular holidays according to the
pertinent provisions of the Rules and Regulations Implementing the Labor Code; and, Collegiate faculty of
Jose Rizal College who by contract are paid compensation per student contract hour are not entitled to
unworked holiday pay considering that these regular holidays have been excluded in the programming of
the student contract hours. The NLRC modified the Labor Arbiter’s decision with regards to the collegiate
faculty. NLRC held that collegiate faculty is entitled to holiday pay. Hence, this petition.
Issue:
Whether or not the collegiate faculty according to their contracts is paid per lecture hour are
entitled to unworked holiday pay.
Held:
The NLRC rendered a new decision exempting the college from paying hourly paid faculty
members their pay for regular holidays, whether the same be during the regular semesters of the school
year or during semestral, Christmas, or Holy Week vacations but ordering the said college to pay the
faculty members their regular hourly rate on days declares as special holidays or for some reason classes
are called off or shortened for the hours they are supposed to have taught, whether extensions of class
days be ordered or not; in case of extensions said faculty members shall likewise be paid their hourly
rates should they teach during said extensions. Article 94 of the Labor Code states the right to holiday
pay. Under par. a, every worker shall be paid his regular daily wage during regular holidays, except in
retail and service establishments regularly employing less than 10 workers, and Section 8, Rule IV, Book
III of the IRR states the holiday pay of certain employees in which under par. a, private school teachers,
including faculty members of colleges and universities, may not be paid for the regular holidays during
semestral vacations. They shall, however, be paid for the regular holidays during Christmas vacations etc.

Under these provisions, the faculty members are entitled for un-worked holiday pay. However, the law is
silent with respect to the faculty members paid by the hour who because of their teachings contracts are
obliged to work and consent to be paid only for work actually done. Regular holidays specified as such by
law are known to both school and faculty members as no class days, certainly the latter do not expect
payment for said un-worked days, and thus this was clearly in their minds when they entered into the
teaching contract.

Ladylynne P. Flores
2011 – 0080
Case title: DONALD KWOK VS. PHILIPPINE CARPET MANUFACTURING CORPORATION

Petitioner: Donald Kwok
Respondent: Philippine Carpet Manufacturing Corporation
Ponente: Callejo, Sr., J.
Facts:
Donald Kwok and his father-in-law, Patricio L. Lim, along with some other stockholders,
established the Philippine Carpet Manufacturing Company in 1965. The petitioner retired 36 years later
and upon retirement, he claimed the cash equivalent of what he believed to be his accumulated vacation
and sick leave credits during the entire length of his service with the company, which the total amount
reached P7, 080, 546.00 plus interest. The respondent corporation refused to accede to the petitioner’s
demand claiming that the latter is not entitled to it. The petitioner filed a complaint before the NLRC. He
claimed that Lim made a verbal promise to give him unlimited sick leave and vacation leave benefits and
its cash conversion upon his retirement or resignation without the need for application therefor. The
respondent denied all of these and claimed that petitioner’s demand was without legal basis. It was
further pointed out that as per Memorandum dated November 6, 1981, only regular employees and
managerial and confidential employees falling under Category I were entitled to vacation and sick leave
credits. The petitioner, whose position did not fall under Category I was not entitled to the benefits under
the said memorandum. Labor Arbiter ruled in favor of the petitioner. The corporation was directed to pay
the petitioner the amount he was demanding plus interest and 10% attorney’s fees. The corporation
appealed the decision and the NLRC reversed the decision of the Labor Arbiter. the petitioner appealed
the NLRC’s decision to the CA but the CA affirmed the NLRC’s decision. Hence, this petition.
Issue:
Whether or not the petitioner is entitled, based on the documentary and testimonial evidence on
record, to the cash value of his vacation and sick leave credits in the total amount of P7, 080, 546.00.
Held:
The petition is denied. The petitioner failed to convince the Court that the actual findings of the
CA were arbitrary. Contracts entered into by a corporate officer or obligations or prestations assumed by
such officer for and in behalf of such corporation are binding on the said corporation only if such ofiicer
acted within the scope of his authority or if such officer exceeded the limits of his authority, the corporation
has ratified such contracts. In the present case, the petitioner relied principally on his testimony to prove
that Lim made a verbal promise to give him vacation and sick leave credits, as well as the privilege of
converting the same into cash upon retirement. The Court agrees that those who belong to the upper
corporate echelons would have more privileges. However, the Court cannot presume the existence of
such privileges. The petitioner was burdened to prove not only the existence of such benefits but also that
he is entitled to the same, especially considering that such privileges are not inherent to the positions

occupied by the petitioner in the respondent corporation. In a testimonial evidence, the petitioner is aware
that he is not covered of the Memorandum granting the PCMC employees the conversion of their unused
vacation and sick leaves into cash. Even assuming that the petitioner is included among the regular
employees referred in the memorandum, there is no evidence that he complied with the cut-off dates for
the filing of the cash conversion of vacation and sick leaves. This being so, the petitioner’s money claim
have already been barred by the three-year prescriptive period under Article 291 of the Labor Code.
Additional to that, there is no proof that petitioner has filed vacation and sick leaves with the company’s
personnel department. Without a record of petitioner’s absences, there is no way to determine the actual
number of leave credits he is entitled to. The amount which the petitioner is demanding is baseless.
Regarding the verbal promise that Lim made to the petitioner, the promise cannot bind the company in
the absence of any Board resolution to that effect. The personal act of the company president cannot bind
the corporation.

Ladylynne P. Flores
2011 – 0080
Case title: NORMA MABEZA VS. NLRC

Petitioner: Norma Mabeza
Respondent: National Labor Relations Commission and Peter Ng/Hotel Supreme
Facts:
Petitioner Norma Mabeza and her co-employees at the Hotel Supreme in Baguio City were asked
by the hotel’s management to sign an instrument attesting to the latter’s compliance with minimum wage
and other labor standard provision. The instrument provides that they have no complaints against the
management of the Hotel Supreme as they are paid accordingly and that they are treated well. The
petitioner signed the affidavit but refused to go to the City’s Prosecutor’s Office to confirm the veracity and
contents of the affidavit as instructed by management. That same day, as she refused to go to the City
Prosecutor’s Office, she was ordered by the hotel management to turn over the keys to her living quarters
and to remove her belongings to the hotel’s premises. She then filed a leave of absence which was
denied by her employer. She attempted to return to work but the hotel’s cashier told her that she should
not report to work and instead continue with her unofficial leave of absence. Three days after her attempt
to return to work, she filed a complaint against the management for illegal dismissal before the Arbitration
Branch of the NLRC in Baguio City. In addition to that, she alleged underpayment of wages, non-payment
of holiday pay, service incentive leave pay, 13th month pay, night differential and other benefits. Peter Ng,
in their Answer, argued that her unauthorized leave of absence from work is the ground for her dismissal.
He even maintained that her alleged of underpayment and non-payment of benefits had no legal basis.
He raises a new ground of loss of confidence, which was supported by his filing of criminal case for the
alleged qualified theft of the petitioner. The Labor Arbiter ruled in favor of the hotel management on the
ground of loss of confidence. She appealed to the NLRC which affirmed the Labor Arbiter’s decision.
hence, this petition.
Issue:
Whether or not the dismissal by the private respondent of petitioner constitutes an unfair labor
practice.
Held:
The NLRC’s decision is reversed. The pivotal question in any case where unfair labor practice on
the part of the employer is alleged is whether or not the employer has exerted pressure, in the form of
restraint, interference or coercion, against his employee’s right to institute concerted action for better
terms and conditions of employment. Without doubt, the act of compelling employees to sign an
instrument indicating that the employer observed labor standard provisions of the law when he might not
have, together with the act of terminating or coercing those who refuse to cooperate with the employees’
scheme constitutes unfair labor practice. The labor arbiter’s contention that the reason for the monetary
benefits received by the petitioner between 1981 to 1987 were less than the minimum wage was because
petitioner did not factor in the meals, lodging, electric consumption and water she received during the
period of computations. Granting that meals and lodging were provided and indeed constituted facilities,
such facilities could not be deducted without the employer complying first with certain legal requirements.
Without satisfying these requirements, the employer simply cannot deduct the value from the employee’s
ages. First, proof must be shown that such facilities are customarily furnished by the trade. Second, the

provision of deductible facilities must be voluntary accepted in writing by the employee. Finally, facilities
must be charged at fair and reasonable value. These requirements were not met in the instant case.
Private respondent failed to present any company policy to show that the meal and lodging are part of the
salary. He also failed to provide proof of the employee’s written authorization and he failed to show how
he arrived at the valuations. More significantly, the food and lodging, or electricity and water consumed by
the petitioner were not facilities but supplements. A benefit or privilege granted to an employee for the
convenience of the employer is not a facility. The criterion in making a distinction between the two not so
much lies in the kind but the purpose. Considering, therefore, that hotel workers are required to work on
different shifts and are expected to be available at various odd hours, their ready availability is a
necessary matter in the operations of a small hotel, such as the private respondent’s hotel.

Ladylynne P. Flores
2011 – 0080
Case title: PHILIPPINE AIRLINES, INC. VS. NLRC

Petitioner: Philippine Airlines Inc.
Respondent: National Labor Relations Commission and Armando Dolina
Ponente: Cortes, J.
Facts:
Armando Dolino was admitted to the PAL Aviation School for training as a pilot. The training
agreement bound PAL to provide regular and permanent employment to Dolina upon the completion of
the training course. Dolina completed the course and he was issued a license as Commercial Pilot and
PAL extended him a temporary appointment for 6 months for Limited First Officer. When his appointment
was due to expire, he fell short of the required time and to enable him to complete the requirement, his
employment was extended for another 6 months which appointment was described as permanent. When
he’s appointment was due to expire again, he was still short of the minimum flying time requirement and
he was extended again. On the third extension of his appointed, he completed the flying time
requirements. Pending his physical examination, he’s employment was extended again. When Dolina
took a psychological examination, his adaptability rating was found unacceptable. The Board then
decided that Dolina is not qualified for regular employment in the Company. PAL filed a clearance
application for Dolina’s termination and in the meantime, Dolina was placed under preventive suspension.
However, the Department of Labor lifted the preventive suspension and ordered petitioner to reinstate
Dolina to his former position with full backwages. PAL appealed the case and the decision was reversed.
PAL removed Dolina from its payroll and claiming that it was no longer obliged to return Dolina from its
payroll since the decision of the Labor Arbiter was a final resolution of the case by arbitration. Dolina
appealed to the NLRC which the latter dismissed the clearance application of PAL. Dolina must be
restored to the payroll and paid for his salaries from the date he was dropped from the PAL’s payroll.
Issue:
Whether or not the NLRC committed grave abuse of discretion in holding that private respondent
Dolina was entitled to his salaries from the time he was dropped from PAL’s payroll until this case is
finally resolved.
Held:
The decision requiring the petitioner to restore private respondent to its payroll and ordering the
payment of his salaries from the time he was dropped from PAL’s payroll until this case is finally resolved
is null and void. In lieu of reinstatement and the payment of his backwages, private respondent was
included in the petitioner’s payroll; effective from the time he was preventively suspended until final
resolution of the case by arbitration, without having to perform any work for the petitioner. In entering into
agreement, the parties could not have intended to include in the clause “final resolution of the case by
arbitration” the whole adjudicatory process, including appeal. For it were so, even proceedings on
certiorari before this court would be embraced by the term “arbitration” and private respondent will
continue to receive monthly salary without rendering any service to the petitioner regardless of the
outcome of the proceedings before the Labor Arbiter, for as long as one of the parties appeal to the
NLRC and until the case is finally resolved by this court. This is absolutely in contrast with the principle of
“Fair Day’s Wage for a Fair Day’s Labor.” The court holds that respondents NLRC’s order for the
continued payment of Dolina’s salaries from he was dropped from the PAL’s payroll until the case is
finally resolved is contrary to law and established jurisprudence and the NLRC acted in excess of its
jurisdiction in issuing the assailed order.

Ladylynne P. Flores
2011 – 0080
Case title: PEOPLE VS. DOMINGO PANIS

G.R. number: G.R. Nos. L-58674-77
Date: July 11, 1990
Respondent: Hon. Domingo Panis, presiding judge of the Court of First Instance of ZAmbales and
Olongapo City, Branch III and Serapio Abug
Ponente: Cruz, J.
Facts:
Four informations were filed on January 9, 1981, in the Court of First Instance of Zambales and
Olongapo City alleging that Serapio Abug, without first securing a license from the Ministry of Labor as a
holder of authority to operate a fee-charging employment agency, operate a private fee-charging
employment agency by charging fees and expenses from and promising employment in Saudi Arabia to
four separate individuals, thus, violating Article 16 in relation to Article 39 of the Labor Code. The private
respondent filed a motion to quash alleging that the information do not constitute an offense because he
was accused of illegally recruiting only one person in each of the four informations and according to him,
under Article 13(b), there would be illegal recruitment only “whenever two or more persons are in any
manner promised of offered any employment for a fee”. The position of the petitioner is that the private
respondent is being prosecuted under Article 39 in relation to Article 16 of the Labor Code and not under
Article 13(b). However, Article 13(b) is somehow applicable since Article 39 in relation to Article 16
punishes acts of recruitment without proper authority.
Issue:
Whether or not Article 13(b) of the Labor Code is applicable in determining the liability of the
private respondent.
Held:
Article 13(b) of the Labor Code was merely specified to create a presumption. The presumption is
that the individual or entity is engaged in recruitment and placement whenever he or it is dealing with two
or more persons to whim, in consideration of a fee, an offer or promise of employment is made in the
course of the “canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring of workers”.
workers. Any of the acts mentioned in the basic rule in Article 13(b) win constitute recruitment and
placement even if only one prospective worker is involved. It merely lays down a rule of evidence that
where a fee is collected in consideration of a promise or offer of employment to two or more prospective
workers, the individual or entity dealing with them shall be deemed to be engaged in the act of
recruitment and placement. The words “shall be deemed” create that presumption.

Ladylynne P. Flores
2011 – 0080
Case title: ALIPIO R. RUGA ET AL. VS. NLRC

G.R. number: G.R. No. L-72654-61
Petitioner: Alipio R. Ruga, Jose Parma, Eladio Calderon, Laurente Bautu, Jaime Barbin, Nicanor
Francisco, Philip Cervantes and Eleuterio Barbin
Respondent: National Labor Relations Commission and De Guzman Fishing Enterprises and/or
Arsenio de Guzman
Ponente: Fernan, J.
Facts:
The petitioners were the fishermen-crew members of 7/B Sandyman II, one of several fishing
vessels owned by the De Guzman Fishing Enterprises which is primarily in the fishing business with port
and office at Camarines Sur. On September 11, 1983, petitioners were told to proceed to the police
station for investigation on the report that they sold some of their fish-catch at midsea. The petitioners
denied the charge claiming that the allegation was a countermove because of the formation of their union.
The complaint was dismissed because there were no witnesses that would support the company’s
allegation. The petitioners, however, were not allowed to return to the fishing vessel to resume their work
on that same day. Each of the them filed a complaints for illegal dismissal and non-payment of 13th month
pay, emergency cost-of-living allowance and service incentive pay with the Ministry (now DOLE). The
company denied the petitioners being their employees, further contending that they were only engaged in
a joint venture. The Labor Arbiter rendered a joint decision dismissing all the complaint of the petitioners.
Petitioners appealed the case to the NLRC which affirmed the Labor Arbiter’s decision that a joint fishing
venture and not employer-employee relationship exist between the private respondent and the
petitioners. Hence, this petition.
Issue:
Whether or not the fishermen-crew members of the trawl fishing vessel 7/B Sandyman II are
employees of its owner-operator, De Guzman Fishing Enterprise, and if so, whether or not they were
illegally dismissed from their employment.
Held:
The petitioners were illegally dismissed from their employment. In determining the existence of
employer-employee relationship, the elements that are generally considered are the following: (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d)
the employer’s power to control the employee with respect to the means and methods by which the work
is to be accomplished. The employment arises from contract of hire, express or implied. In the absence of
hiring, no employer-employee relationship could exist. Records show in the instant case that petitioners
were directly hired by the general manager of the company and its operations manager. Petitioner Alipio
Ruga was hired on September 29, 1974 as patron/captain of the fishing vessels; Eladio Calderon started
as mechanic on April 16, 1968 until he was promoted as chief engineer of the fishing vessel; Jose Pama
was employed on September 29, 1974 as assistant engineer; Jaime Barbin started as a pilot of the motor
boat until he was transferred as a master fisherman to the fishing vessel 7/B Sandyman II; Philip
Cervantes was hired as winchman on August 1, 1972 while Eleuterio Barbin was hired as winchman on
April 15, 1976. While tenure or length of employment is not considered as the test of employment,
nevertheless the hiring of petitioners to perform work which is necessary or desirable in the usual
business or trade of private respondent for a period of 8-15 years since 1968 qualify them as regular
employees within the meaning of Article 281 of the Labor Code as they were indeed engaged to perform
activities usually necessary or desirable in the usual fishing business or occupation of private respondent.

The virtual dismissal of petitioners from their employment was characterized by undue haste when less
extreme measures consistent with the requirements of due process should have been first exhausted. In
that sense, the dismissal of petitioners was tainted with illegality.
Ladylynne P. Flores

2011 – 0080
Case title: JOSE SONGCO VS. NLRC (FIRST DIVISION)

Petitioner: Jose Songco, Romeo Cipres and Amancio Manuel
Respondent: National Labor Relations Commission (First Division), Labor Arbiter Flavio Aguas, and
F.E. Zuellig (M), Inc.
Facts:
Zuellig (M) Inc. filed with the Department of Labor (Regional Office No. 4) a clearance to
terminate the services of petitioners Jose Songco, Romeo Cipres and Amancio Manuel due to alleged
financial losses. However, the petitioners argued that the company is not suffering any losses and the
real reason for their termination was their membership in the union. At the last hearing of the case, the
petitioner manifested that they no longer contesting their dismissal, however, they argued that they
should be granted a separation pay. Each of the petitioners was receiving a monthly salary of P40,
000.00 plus commissions for every sale they made. Under the CBA entered by the Zuellig Inc. and the
petitioners, in Article XIV, Section 1(a), Any employee, who is separated from employment due to old age,
sickness, death or permanent lay-off not due to the fault of said employee shall receive from the company
a retirement gratuity in an amount equivalent to one month’s salary per year of service. One month of
salary as used in this paragraph shall be deemed equivalent to the salary at date of retirement; years of
service shall be deemed equivalent to total service credits, a fraction of at least six months being
considered one year, including probationary employment. Other basis for petitioners’ contention are
Article 284 of the Labor Code with regards to reduction of personnel and Sections 9(b) and 10 of Rule 1,
Book VI of the Rules Implementing the Labor Code. The Labor Arbiter rendered his decision directing the
company to pay the complainants separation pay equivalent to their one month salary (exclusive of
commissions, allowances, etc.) for every year of service that they have worked with the company. The
petitioners appealed to the NLRC but it was denied. Petitioner Romeo Cipres filed a Notice of Voluntary
Abandonment and Withdrawal of petition contending that he had received, to his full and complete
satisfaction, his separation pay. Hence, this petition.
Issue:
Whether or not earned sales commissions and allowances should be included in the monthly
salary of petitioners for the purpose of computation of their separation pay.
Held:
The petition is granted. Petitioners’ contention that in arriving at the correct and legal amount of
separation pay due to them, whether under the Labor Code or the CBA, their basic salary, earned sales
commissions and allowances should be added together. Insofar as whether the allowances should be
included in the monthly salary of petitioners for the purpose of computation of their separation pay is
concerned, this has been settled in the case of Santos vs. NLRC, 76721, in the computation of
backwages and separation pay, account must be taken not only of the basic salary of petitioner but also
of her transportation and emergency living allowances. In the issue of whether commission should be
included in the computation of their separation pay, it is proper to define first commission. Black’s Law
Dictionary defined commission as the recompensed, compensation or reward of an agent, salesman,
executor, trustees, receiver, factor, broker or bailee, when the same is calculated as a percentage on the
amount of his transactions or on the profit to the principal. The nature of the work of a salesman and the
reason for such type of remuneration for services rendered demonstrate clearly that the commission are
part of petitioners’ wage and salary. Some salesmen do not receive any basic salary but depend on
commission and allowances or commissions alone, are part of petitioners’ wage and salary. Some
salesman do not received any basic salary but depend on commission and allowances or commissions

alone, although an employer-employee relationship exist. In Soriano v. NLRC, it is ruled then that, the
commissions also claimed by petitioner (override commission plus net deposit incentive) are not properly
includible in such base figure since such commissions must be earned by actual market transactions
attributable to petitioner. Applying this by analogy, since the commissions in the present case were
earned by actual market transactions attributable to petitioners, these should be included in their
separation pay. In the computation thereof, what should be taken into account is the average
commissions earned during their last year of employment.

Ladylynne P. Flores
2011 – 0080
Case title: SSS vs. SSS Supervisors’ Union-CUGCO

Petitioner: Social Security System
Respondent: SSS Supervisors’ Union-CUGCO and Court of Industrial Relations
Facts:
The members of the respondent Union did not work during the 17-day strike declared in 1968 by
the rank and file Union (the Philippine Association of Free Labor Unions <PALFU>). The SSS and the
PALFU had a disagreement concerning the interpretation of the provisions of their CBA. The PALFU’s
decision to strike is the effect of the CIR Order of August 29, 1968 enjoining the parties, for the sake of
industrial peace..to maintain the status quo- the Union not to declare any strike and the Management not
to dismiss nor suspend any of its employees nor to declare any lock out. The SSS, in that same case,
filed an Urgent Petition to declare the strike illegal. The respondent Union filed a Motion for Intervention in
the said case alleging that it had not participated in the strike; that it’s members wanted to report for work
but were prevented by the picketers from entering the work premises; that under the circumstances, they
were entitled to their salaries corresponding to the duration of the strike, which could be deducted from
the accrued leave credits of their members.
Issue:
Whether or not the members of the respondent Union who admittedly did not work during the 17-
day strike conducted by the PALFU is entitled to their salaries.
Held:
According to the doctrine of “Fair day’s wage for a Fair day’s labor”, if there is no work performed
by the employee there can be no wage or pay, unless of course the laborer was able, willing and ready to
work but was illegally locked out, dismissed nor suspended. It is hardly fair or just for an employee or
laborer to fight or litigate against his employer on the employer’s time. In this case, the failure to work on
the part of the members of the respondent Union was due to circumstances not attributable to
themselves. But neither should the burden of the economic loss suffered by them be shifted to their
employer, the SSS, which was equally faultless, considering that the situation was not a direct
consequence of the employer’s lockout or unfair practice. With this, it is fair that they won’t be receiving
their salary for those days they did not work.

Ladylynne P. Flores
2011 – 0080
Case title: STATE MARINE CORPORATION VS. CEBU SEAMEN’S ASSOCIATION

Petitioner: State Marine Corporation and Royal Line, Inc.
Respondent: Cebu Seamen’s Association
Ponente: Paredes, J.
Facts:
The petitioners were engaged in the business of marine coastwise transportation. They had a
CBA with the Cebu Seamen’s Association. On September 12, 1952, the respondent union filed a
complaint against the petitioners alleging that the officers and men working on board the petitioners’
vessels have not been paid their sick leave, vacation leave and overtime pay; that the petitioners’
threatened then to accept the reduction of salaries, observed by other shipowners; that after the Minimum
Wage Law had taken effect, the petitioners required their employees on board their vessels, to pay the
sum of P0.40 for every meal, while the masters and officers were required to pay their meals and that
because the captain had refused to yield to the general reduction of salaries, the petitioners dismissed
the captain. The petitioner, on their defense, stated that they have suffered a financial losses in the
operation of their vessels and there is no law which provides for the payment of sick leave or vacation
leave to employees of private firms; that with regards to their overtime pay, they have always observed
the Eight-hour labor Law and that overtime does not apply to those who provide means of transportation.
The decision ruled in favor of the respondent union. Hence, this petition.
Issue:
Whether or not the required meals which the petitioner company deducted from the salary of the
employees is considered as facilities, and not supplements.
Held:
Supplements constitute extra remuneration or special privileges or benefits given to or received
by the laborers over and above their ordinary earnings or wages. Facilities, on the other hand, are items
of expense necessary for the laborer’s and his family’s existence and subsistence so that by express
provisions of law, they form part of the wage and when furnished by the employer are deductible
therefrom, since if they are not so furnished, the laborer would spend and pay them just the same. It is
argued that the food or meal given to the deck officers, marine engineers and unlicensed crew members
in question, were mere facilities which should be deducted from wages, and not supplements which,
according to Section 19 of the Minimum Wage Law, should not be deducted from such wages. It was
found out that the meals were freely given to crew members prior to the effectivity of the Minimum Wage
Law while they were on the high seas not as part of their wages but as a necessary matter in the
maintenance of the health and efficiency of the crew members during the voyage. The deductions therein
made for the meals given after August 4, 1951, should be returned to them, and the operator of the
coastwise vessels should continue giving the benefits. Wherefore, the petition is dismissed, finding out
that the meals or food in question are not facilities but supplements.

Ladylynne P. Flores
2011 – 0080
Case title: UNION FILIPRO EMPLOYEES (UFE) VS. BENIGNO VIVAR, JR., NATIONAL
LABOR RELATIONS COMMISSION AND NESTLE PHILIPPINES, INC. (FORMERLY
FILIPRO, INC.)
Petitioner: Union Filipro Employees (UFE)
Respondent: Benigno Vivar, Jr., National Labor Relations Commission and Nestle Philippines, Inc.
(formerly Filipro, Inc.)
Facts:
The respondent, Filipro Inc. (Nestle Philippines, Inc.), filed with the NLRC a petition for
declaratory relief seeking a ruling on its rights and obligations respecting claims of its monthly paid
employees for holiday pay. Both Filipro and the UFE agreed to submit the case voluntary arbitration and
appointed respondent Benigno Vivar, Jr. as voluntary arbitrator, which the latter rendered a decision
directing Filipro Inc. to pay its monthly-paid employees holiday pay pursuant to Article 94 of the Code,
subject only to the exclusions and limitations specified in Article 82 and such other legal restrictions as
are provided for in the Code. Filipro Inc. filed a motion for clarification requesting the limitation of award to
3 years; the exclusion of salesmen, sales representatives, truck drivers, merchandisers and medical
representatives from the award of the holiday pay and deduction from the holiday pay award of
overpayment for overtime, night differential, vacation and sick leave benefits due to the use of 251 divisor.
The respondent arbitrator ruled that the sales personnel are field personnel and are not entitled to holiday
pay. He even ruled that the 251 divisor should be changed to 261 and ordered the reimbursement of
overpayment for overtime, night differential, vacation and sick leave pay due to the use of the divisor 251.
Issue/s:
(1) Whether or not Nestlé’s sales personnel are entitled to holiday pay; and (2) Whether or
not, if they are entitled to such holiday pay, the divisor should be change from 251 to 261 days.
Held:
Sales personnel are not entitled of holiday pay. Under Article 82, field personnel are not entitled to
holiday pay. Field personnel is defined as non-agricultural employees who regularly perform their duties
away from the principal place of business or branch office of the employer and whose actual hours of
work in the field cannot be determined with reasonable certainty. Even if there’s an 8:00 am to 4:00 or
4:30 pm working period of the said sales personnel, they are still considered “field personnel whose
actual work in the field cannot be determined.” The law requires that the actual hours of work in the field
be reasonably determined. The company has no way of determining whether or not these sales
personnel, even if they report to the office before 8:00 am prior to the field work and come back at 4:30
pm really spend the hours in between in actual field work. Moreover, under Rule IV, Book II of the
Implementing Rules provides the coverage of the holiday pay which states that rules on holiday pay shall

apply to all employees except “Field personnel and other employees whose in time and performance is
unsupervised by the employer..” Petitioner contends these sales personnel are strictly supervised as
shown by the SOD (Supervisor of the Day) schedule, however, this SOD does not at least signify that
these sales personnel’s time and performance are supervised. The purpose of this schedule is merely to
ensure that the sales personnel are out of the office not later than 8:00 am and are back in the office not
earlier than 4:00 pm.
With regards the change of divisor from 251 to 261 is modified since the change would result in a
the Labor Code.

Ladylynne P. Flores
2011 – 0080
Case title: WELLINGTON INVESTMENT AND MANUFACTURING CORPORATION VS.

CRESENCIANO B. TRAJANO, ELMER ABADILLA AND 34 OTHERS
Date: July 3, 1995
Petitioner: Wellington Investment and Manufacturing Corporation
Respondent: Cresenciano B. Trajano, Under-Secretary of Labor and Employment, Elmer Abadilla, and
34 others
Ponente: Narvasa, C.J.
Facts:
By virtue of the routine inspection conducted by a Labor Enforcement Officer, Wellington Flour
Mills owned by the petitioner-company was found non-payment of regular holidays falling on a Sunday for
monthly-paid employees. Wellington argued that the monthly-paid employees already includes holiday
pay for all regular holidays and there is no legal basis for the finding of alleged non-payment of regular
holidays falling on a Sunday. It further contends that it pays its monthly paid employees a fixed monthly
compensation using the “314 factor” which undeniably covers and already includes payment for all the
working days in a month as well as all the 10 un-worked regular holidays within a year. The Regional
Director ordered the petitioner to pay the employees additional compensation corresponding to 4 extra
working days. However, the petitioner argued that the company, using the “314 factor” already gave
complete payment of all compensation due to its workers. Petitioner appealed and was acted on by the
respondent Undersecretary. But still, Regional Director’s decision was affirmed. Hence, this petition.
Issue:
Whether or not a monthly-paid employees, receiving a fixed monthly compensation, is entitled to
an additional pay aside from his usual holiday pay whenever a regular holiday falls on a Sunday.
Held:
Regional Director’s decision, affirmed by the Undersecretary, is nullified and set aside. Every
worker should be paid his regular daily wage during regular holidays; except in retail and service
establishments regularly employing less than 10 workers, even if the worker does not work on these
regular holidays. The Wellington had been paying its employees a salary of not less than the statutory
minimum wage and that the monthly salary, thus, paid was not less than the statutory minimum wage
multiplied by 365 days divided by 12. Apparently the monthly salary was fixed by Wellington to provide for
compensation for every working day of the year including holidays specified by law and excluding only
Sundays. Wellington leaves no day unaccounted for, it is paying for all the days of a year with the
exception only of 51 Sundays.

Maria Benelyn Joy D. Gardoce

2011 – 0159
ATOK BIG WEDGE MINING CO. INC. VS. ATOK BIG WEDGE MUTUAL BENEFIT ASSOCIATION
G.R. No. L-5276
March 3, 1953
Petitioners: Vicente Hilado, Pedro Lopez and Artemio A. Almendral
Respondents: Sanidad, Ayson and Casia
Ponente: Labrador, J.
Facts:
This is an appeal by certiorari against a decision of the Court of Industrial Relations. On September 4,
1950, demand was submitted to petitioner by respondent union through its officers for various
concession, among which were (a) an increase of P0.50 in wages, (b) commutation of sick and vacation
leave if not enjoyed during the year, (c) various privileges, such as free medical care, medicine, and
hospitalization, (d) right to a closed shop, check off, etc., (e) no dismissal without prior just cause and with
a prior investigation, etc. Some of the demands were granted by the petitioner, and the other were
rejected, and so hearings were held and evidence submitted on the latter. After the hearing the
respondent court rendered a decision, the most important provisions of which were those fixing the
minimum wage for the laborers at P3.20, declaring that additional compensation representing efficiency
bonus should not be included as part of the wage, and making the award effective from September 4,
1950. It is against these portions of the decision that this appeal is taken.
Issue:
Whether or not the contention by petitioner that as the respondent court found that the laborer and his
family at least need the amount of P2.58 for food, this should be the basis for the determination of his
wage, not what he actually spends
Held:
The petition is dismissed. It is contended by petitioner that as the respondent court found that the laborer
and his family at least need the amount of P2.58 for food, this should be the basis for the determination of
his wage, not what he actually spends; that it is not justifiable to fix a wage higher than that provided by
Republic Act No. 602; and that respondent union made the demand in accordance with a pernicious
practice of claiming more after an original demand is granted. The respondent court found that P2.58 is
the minimum amount actually needed by the laborer and his family. That does not mean that it is his
actual expense. A person's needs increase as his means increase. This is true not only as to food but as
to everything else — education, clothing, entertainment, etc. The law guarantees the laborer a fair and
just wage. The minimum must be fair and just. The "minimum wage" can by no means imply only the
actual minimum. Some margin or leeway must be provided, over and above the minimum, to take care of
contingencies such as increase of prices of commodities and desirable improvement in his mode of living.
That the P3 minimum wage fixed in the law is still far below what is considered a fair and just minimum is
shown by the fact that this amount is only for the year after the law takes effect, as thereafter the law fixes
it at P4. Neither may it be correctly contended that the demand for increase is due to an alleged
pernicious practice. Frequent demands for increase are indicative of a healthy spirit of wakefulness to the
demands of a progressing and an increasingly more expensive world. We, therefore, find no reason or
ground for disturbing the finding contained in the decision fixing the amount of P3.20 as the minimum
wage.


2011 – 0159
CEBU INSTITUTE OF TECHNOLOGY VS. OPLE

G. R. No. L-58870
April 15, 1988
Petitioner: CEBU INSTITUTE OF TECHNOLOGY (CIT)
Respondents: HON. BLAS OPLE, in his capacity as Minister, Ministry of Labor and Employment,
JULIUS ABELLA, ARSENIO ABELLANA, RODRIGO ALIWALAS, ZOSIMO ALMOCERA, GERONIDES
ANCOG, GREGORIO ASIA; ROGER BAJARIAS, BERNARDO BALATAYO, JR., BASILIO
CABALLES, DEMOCRITO TEVES, VOLTAIRE DELA CERNA, ROBERTO CABARRUBIAS, VILMA
GOMEZ CHUA, RUBEN GALLITO, EDGARDO CONCEPCION, VICTOR COQUILLA, JOSE
DAKOYKOY, PATERNO WONG, EVELYN LACAYA, RODRIGO GONZALES, JEOGINA GOZO,
MIGUEL CABAL, LES, CONSUELO JAVELOSA, QUILIANO LASCO, FRANKLIN LAUTA,
JUSTINIANA LARGO, RONALD LICUPA, ALAN MILANO, MARIA MONSANTO, REYNALDO
NOYNAY, RAMON PARADELA, NATALIO PLAZA LUZPURA QUIROGA, NOE RODIS, COSMENIA
SAAVEDRA, LEONARDO SAGARIO,LETICIA SERRA, SIEGFREDO TABANAG, LUCINO TAMAOSO,
DANILO TERANTE, HELEN CALVO TORRES, ERNESTORES SANANAM, RODRIGO BACALSO,
YOLANDA TABLANTE, ROMERO BALATUCAN, CARMELITA LADOT, PANFILO CANETE,
EMMANUEL CHAVEZ, JR., SERGIO GALIDO, ANGEL COLLERA, ZOSIMO CUNANAN, RENE BURT
LLANTO, GIL O VILLANUEVA, DOLORES VILLONDO, EDWARD YAP, ROWENA VIVARES,
DOLBATAYOLA VICENTE DELANTE, CANDELARIO DE DIOS, JOSE MA. ESTELLA, NECITA
TRINIDAD, ROTELLO ILUMBA, TEODORICO JARAYMUNDO ABSIN, RUDY MANEJA, REYNA
RAMOS, ANASTACIA BLANCO, FELICISIMO DELMUNDO, ELNORA MONTERA, MORRISON
MONTESCLAROS, ELEAZAR PANIAMOGAN, BERNARDO PILAPIL, RODOLFO POL,
DEMOSTHENES REDOBLE, PACHECO ROMERO, DELLO SABANAL, SARAH SALINAS, RENATO
SOLATORIO, EDUARDO TABLANTE, EMMANUEL TAN, FELICISIMO TESALUNA, JOSE VERALLO,
JR., MAGDALENO VERGARA, ESMERALDA ABARQUEZ, MAC ARTHUR DACUYCUY
ACOMPANADA, TRINIDAD ADLAWAN, FE ELIZORDO ALCANTARA, REOSEBELLA AMPER,
ZENAIDA BACALSO, ELISA BADANA, GEORGIA BAS, ERLINDA BURIAS, ELDEFONSO BURIAS,
CORAZON CASENAS, REGINO CASTANEDA, GEORGE CATADA, CARMENCITA G. CHAVEZ,
LORETTA CUNANAN, FLORES DELFIN, TERESITA ESPINO, ELVIE GALANZA, AMADEA GALELA,
TERESITA JUNTILLA, LEONARDA KAPUNGAN, ADORACION LANAWAN, LINDA LAYAO,
GERARDO LAYSON, VIRGILIO LIBETARIO, RAYMOND PAUL LOGARTA, NORMA LUCERO,
ANATOLIA MENDEZ, ELIODORO MENDEZ, JUDALINE MONTE, ELMA OCAMPO, ESTEFA
OLIVARES, GEORGE ORAIS, CRISPINA PALANG, GRETA PEGARIDO, MELBA QUIACHON,
REMEDIOS QUIROS, VIRGINIA RANCES, EDNA DELOS REYES, VICENTE TAN, EMERGENCIA
ROSELL, JULIETA TATING, MERCIA TECARRO, FELISA VERGARA, WEMINA VILLACIN, MACRINA
YBARSABAL, MILAGROS CATALAN, JULIETA AQUINDE, SONIA ARTIAGA, MA. TERESITA
OBANDO, ASUNCION ABAYAN, ESTHER CA VITLIANA VENERACION, LEONCIA ABELLAR,
REYNITA VILLACARLOS
Ponente: Cortes, J.
Facts:
Motions for Reconsideration and Clarification in four of these six consolidated cases decided by the Court
on December 18, 1987 were filed and questions not clearly raised as issues or dealt with in the main
petitions but which are necessary for the full resolution of the cases are presented in the following:

I. Fabros Case (G.R. No. 70832)

The petitioners express doubt on the applicability of the three-year period of prescription under the Labor
Code. There is no doubt that the three-year period within which to file actions involving money claims
arise out of an employer-employee relationship fixed by Article 292 of Pres. Dec. No. 442 (Labor Code),
as amended, equally applies to claims for the incremental proceeds arising from tuition fee increases
under Pres. Dec. No. 451. The claims which gave rise to all these cases are clearly money claims arising
from an employer-employee relationship and thus falls under the coverage of Article 292 of the Labor
Code.
II. Biscocho Case (G.R. No. 76521)
This case concerns the award of ten percent (10%) of the backwages payable to all members of the
bargaining unit as negotiation fee which covers attorney's fees. agency fee and the like. This Court in its
December 18, 1987 Decision affirmed this award with the modification that only members of the
bargaining unit should be made to pay this assessment.
The present source of ambiguity is the basis for compute the ten percent (10%) negotiation fee.
Petitioners and respondent Espiritu Santo Parochial School share the opinion that the negotiation fee of
ten percent (10%) should not be charged against the sixty percent (60%) incremental proceeds from
tuition fee increases on the ground that this is not a bargainable matter as it has already been fixed by
law; hence, only thirty percent (30%) should be subject to the computation of the ten percent (10%)
negotiation fee. The respondent Espiritu Santo Parochial School Faculty Association takes the contrary
view by arguing that the whole ninety percent (90%) incremental proceeds from tuition fee increases
should be the subject to the computation the ten percent (10%) negotiation fee.
III. Divine Word College Case(G.R. No. 68345)
The original complaint in this case which covered claims for the school years 1979-1980, 1980-1981,
1981-1982 and 1982-1983 was filed on February 17, 1983 before the Regional Office. Invoking Article
292 of the Labor Code, petitioner school submits that all claims prior to February 17, 1980 have already
prescribed. Artide 292 of the Labor Code expressly provides that the period within which to file actions for
money claims which accrued during the effectivity of the Labor Code is three (3) years from the accrual of
the cause of action. Money claims which accrued more than three (3) years prior to the filing of the
complaint are barred by prescription. In the instant case, inasmuch as the original complaint was filed on
February 17, 1983, the claims prior to February 17, 1980 have indeed already prescribed.
IV. Far Eastern University Case (G.R. Nos. 69224-25)
The Court notes the Motion for Clarification of Judgment filed by counsel for petitioner Union as regards
the payment of the " transportation allowance" which was held to be an equivalent an order requiring
respondent Far Eastern University to pay its employees who have been paid such transportation
allowance less than one-twelfth (1/2) of the latter's basic vary, the amount of the difference. A Motion for
Issuance of An Order Awarding Attorney's Lien was filed by petitioner Union's former counsel, Atty.
Herminio Z. Florendo. Movant alleges that pursuant to an agreement with the members of the Union, he
filed the complaint for unpaid holiday pays, underpayment of thirteenth (13th) month pay and for violation
of Pres. Dec. No. 451 with the Department of Labor. The agreement which is attached to the motion
provides that the prosecution of the Union members' claim is on a contingent fee basis in an amount
equivalent to thirty percent (30%) of whatever may be recovered relative to Id claim. The Labor Arbiter in

his March 10, 1980 Order awarded the Union's claim for payment of legal holiday and thirteenth (13th)
month pay but dismissed its claim under Pres. Dee. No. 451. Atty. Florendo perfected the partial appeal
and memorandum for complainants-appellants with the National Labor Relations Commission. Pending
the appeal, however, another lawyer entered his appearance for the appellant Union thereby substituting
Atty. Florendo.
Issue:
Whether or not salary must be excluded in allowances
Held:
In the Biscocho case, (G.R. No. 76521), to CLARIFY the following points:
A. The ten percent (10%) negotiation fee should be computed only on the amount in excess of the sixty
percent (60%) portion allocated for teachers and other school employees under the law;
B. The ten percent (10%) negotiation fee should be computed on the above amount for the period starting
school year 1985-1986 and ending school year 1987-1988.
In the Divine Word College of Legaspi case (G.R. No. 68345), (1) to MODIFY the Court's Decision of
December 18, 1987 so that all claims of private respondents prior to February 17, 1980 shall be
considered prescribed; and (2) to ORDER a recomputation of the actual incremental proceeds received
from tuition fee increases.
In the Far Eastern Universitycase (G.R. Nos. 6922425), (1) to MODIFY the Court's Decision of December
18,1987 so that claims for the school year 1974-1975 shall be considered prescribed; (2) to CLARIFY that
Far Eastern University's remaining liability for the sixty percent (60%) allotment of the incremental
proceeds shall be limited only to the portion of said sixty percent (60%) which answered for the increases
in allowances and other benefits under Pres. Dec. No. 451; (3) to ORDER respondent Far Eastern
University t0 pay its employees who have been paid the transportation allowance in an amount less than
one-twelfth (1/12) of their basic salary, the amount of the difference in thirteenth (13th) month pay subject
to the three-year period of prescription under the Labor Code; (4) to NOTE the two (2) motions for
recording of attorney's lien and to REMAND to the National Labor Relations Commission the matter of
recording attorney's lien and the determination of the matter of entitlement of Atty. Herminio Z. Florendo
to Attorney's fees.


2011 – 0159
DE RACHO VS. MUNICIPALITY OF ILIGAN

G.R. No. L-23542
January 2, 1968
Petitioner: JUANA T. VDA. DE RACHO
Respondent: MUNICIPALITY OF ILAGAN
Ponente: Bengzon, J.P., J.
Facts:
Plaintiff Juana T. Vda. de Racho and the decedent, Manuel Racho, were spouses and had five minor
children. On July 1, 1954 the decedent was appointed as market cleaner in the Municipality of Ilagan,
Isabela, at the rate of P660.00 per annum (P55.00 monthly) which amount he received up to June 30,
1958. On July 1, 1958, decedent's salary was increased to P720.00 per annum (P60.00 monthly) by
virtue of a promotional appointment extended to him by the Municipal Mayor. Decedent was then paid the
money value of his accumulated leaves. Decedent died intestate at Ilagan. Plaintiff then filed on
December 9, 1960 a claim for salary differentials with the Regional Office of the Department of Labor
which dropped the case later for lack of jurisdiction.
Based on the foregoing facts, the Court of First Instance of Isabela ruled that defendant Municipality of
Ilagan must pay P1,766.00 to plaintiff representing the wage differentials and adjusted terminal leave of
the decedent from December 9, 1957 to May 23, 1960, based on the monthly wage rate of P120.00
pursuant to the Minimum Wage Law.
Issue:
Whether or not the shortage and lack of available funds and expected revenue of a municipality validly
exempt from complying with the Minimum Wage Law
Held:
The appealed judgment is affirmed. Lack of funds of a municipality does not excuse it from paying the
statutory minimum wages to its employees, which, after all, is a mandatory statutory obligation of the
municipality. To uphold such defense of lack of available funds would render the Minimum Wage Law
futile and defeat its purpose. This also disposes of the implication appellant is trying to make that its duty
to pay minimum wages is not a statutory obligation which would command preference in the municipal
budget and appropriation ordinance.
Moreover, we cannot sanction appellant's proposition that it would eventually and gradually implement the
Minimum Wage Law, "if and when its revenues can afford." The law — insofar as it affects government
employees — took effect in 1952. It should have been implemented — or at least steps to implement it
should have been taken — right then. To excuse the defendant municipality now would be to permit it to
benefit from its non-feasance. It would also make the effectivity of the law dependent upon the will and
initiative of said municipality without statutory sanction. Defendant's remedy, therefore, is not to seek an
excuse from implementing the law but, as the lower court suggested, to upgrade and improve its tax
collection machinery with a view towards realizing more revenues. Or, it could for the present forego all
non-essential expenditures.


2011 – 0159
DURABUILT RECAPPING PLANT AND CO. VS NLRC

G.R No. 76746
July 27, 1987
Petitioner: DURABUILT RECAPPING PLANT & COMPANY and EDUARDO LAO, GENERAL
MANAGER
Respondents: NATIONAL LABOR RELATIONS COMMISSION, HON. COMM. RICARDO C. CASTRO,
HON. ARBITER AMELIA M. GULOY, KAPISANAN NG MGA MANGGAGAWA SA DURABUILT and
REYNALDO BODEGAS
Facts:
On July 11, 1983, a complaint for illegal dismissal was filed by respondent Reynaldo Bodegas, against
petitioner Durabuilt, a tire recapping company.
In a decision rendered by the Labor Arbiter, the private respondent was ordered reinstated to his former
position with full back wages, from the time he was terminated up to the time he is actually reinstated,
without loss of seniority rights and benefits accruing to him. The petitioners failed to file a seasonable
appeal and entry of final judgment. The petitioner filed its opposition to the computation on the ground
that it contemplated a straight computation of twenty six (26) working days in one month when the period
covered by the computation was intermittently interrupted due to frequent brownouts and machine trouble
and that respondent Bodegas had only a total of 250.75 days of attendance in 1982 due to absences.
According to the petitioner, Bodegas is entitled only to the amount of P3,834.05 broken down as follows:
salaries — P1,993.00; ECOLA — P1,433.50, and 13th month pay — P407.55. The Labor Arbiter denied
the opposition to the computation. The petitioner appealed to the NLRC which affirmed the order of the
Labor Arbiter and dismissed the appeal.
Issue:
Whether or not the computation of back wages should be based on daily rather than on monthly pay
schedules
Held:
The petition is granted. We have held that where the failure of workers to work was not due to the
employer's fault, the burden of economic loss suffered by the employees should not be shifted to the
employer. Each party must bear his own loss.
It would neither be fair nor just to allow respondent to recover something he has not earned and could not
have earned and to further penalize the petitioner company over and above the losses it had suffered due
to lack of raw materials and the energy-saving programs of the government. The private respondent

cannot be allowed to enrich himself at the expense of the petitioner company. The computation of back
wages should be based on daily rather than on monthly pay schedules where, as in the case at bar, such
basis is more realistic and accurate.

2011 – 0159
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE) VS. HON. LEANDRO QUISUMBING

ET. AL.
G.R. No. 128845
June 1, 2000
Petitioner: INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE)
Respondents: HON. LEONARDO A. QUISUMBING in his capacity as the Secretary of Labor and
Employment; HON. CRESENCIANO B. TRAJANO in his capacity as the Acting Secretary of Labor
and Employment; DR. BRIAN MACCAULEY in his capacity as the Superintendent of International
School-Manila; and INTERNATIONAL SCHOOL, INC.
Facts:
Private respondent International School, Inc. is a domestic educational institution established primarily for
dependents of foreign diplomatic personnel and other temporary residents. To enable the School to
continue carrying out its educational program and improve its standard of instruction, Section 2(c) of the
same decree authorizes the School to employ its own teaching and management personnel selected by it
either locally or abroad, from Philippine or other nationalities, such personnel being exempt from
otherwise applicable laws and regulations attending their employment, except laws that have been or will
be enacted for the protection of employees. The School hires both foreign and local teachers as members
of its faculty, classifying the same into two: (1) foreign-hires and (2) local-hires. The School grants foreign-
hires certain benefits not accorded local-hires. These include housing, transportation, shipping costs,
taxes, and home leave travel allowance. Foreign-hires are also paid a salary rate twenty-five percent
(25%) more than local-hires. The School justifies the difference on two "significant economic
disadvantages" foreign-hires have to endure, namely: (a) the "dislocation factor" and (b) limited tenure.
Petitioner claims that the point-of-hire classification employed by the School is discriminatory to Filipinos
and that the grant of higher salaries to foreign-hires constitutes racial discrimination. The Acting Secretary
of Labor found that these non-Filipino local-hires received the same benefits as the Filipino local-hires.
The Acting secretary upheld the point-of-hire classification for the distinction in salary rates. A perusal of
the parties' 1992-1995 CBA points us to the conditions and provisions for salary and professional
compensation wherein the parties agree as follows: All members of the bargaining unit shall be
compensated only in accordance with Appendix C hereof provided that the Superintendent of the School
has the discretion to recruit and hire expatriate teachers from abroad, under terms and conditions that are
consistent with accepted international practice.
Issue:
Whether there is difference in salary rates between foreign and local-hires

Held:
The petition is given due course. If an employer accords employees the same position and rank, the
presumption is that these employees perform equal work. There is no evidence here that foreign-hires
perform 25% more efficiently or effectively than the local-hires. Both groups have similar functions and
responsibilities, which they perform under similar working conditions.
The need of the School to attract foreign-hires is recognized, salaries should not be used as an
enticement to the prejudice of local-hires. The local-hires perform the same services as foreign-hires and
they ought to be paid the same salaries as the latter. For the same reason, the "dislocation factor" and the
foreign-hires' limited tenure also cannot serve as valid bases for the distinction in salary rates. The
dislocation factor and limited tenure affecting foreign-hires are adequately compensated by certain
benefits accorded them which are not enjoyed by local-hires, such as housing, transportation, shipping
costs, taxes and home leave travel allowances.
The Constitution enjoins the State to "protect the rights of workers and promote their welfare,", "to afford
labor full protection." The State, therefore, has the right and duty to regulate the relations between labor
and capital. These relations are not merely contractual but are so impressed with public interest that labor
contracts, collective bargaining agreements included, must yield to the common good. Should such
contracts contain stipulations that are contrary to public policy, courts will not hesitate to strike down
these stipulations.
In this case, we find the point-of-hire classification employed by respondent School to justify the
distinction in the salary rates of foreign-hires and local hires to be an invalid classification. There is no
reasonable distinction between the services rendered by foreign-hires and local-hires.


2011 – 0159
PEOPLE VS. GOCE

G.R. No. 113161
August 9, 1995
Respondents: Loma Goce y Olalia, Dan Goce and Nelly D. Agustin
Ponente: Regalado, J.
Facts:
On January 12, 1998, Information for illegal recruitment committed by a syndicate and in a large scale
was filed against spouses Dan and Loma Goce and accused-appellant Nelly Agustin in the RTC. On
January 21, 1987, a warrant of arrest was issued against the three accused but not one of them was
arrested. Hence, the trial court ordered the case archived but it issued a standing warrant of arrest
against the accused. Thereafter, on learning the whereabouts of the accused, one of the offended parties,
Rogelio Salado, requested for a copy of the warrant of arrest. Eventually, Nelly Agustin was apprehended
by the Paranaque police. Her counsel filed a motion to revive the case and requested that it be set for
hearing. Four of the complainants testified for the prosecution. Only appellant Agustin testified for the
defense. She asserted that Dan and Loma Goce were licensed recruiters and owners of the Clover
Placement Agency. The trial court rendered judgment finding appellant guilty as principal in the crime of
illegal recruitment in large scale.
Issue:
Whether or not Agustin’s act of introducing the couple Goce falls within the meaning of illegal recruitment
and placement under Article 13(b) in relation to Article 34 of the Labor Code
Held:
The appealed judgment of the court is affirmed. The testimonial evidence hereon shows that she indeed
further committed acts constitutive of illegal recruitment.
All four prosecution witnesses testified that it was Agustin whom they initially approached regarding their
plans of working overseas. It was from her that they learned about the fees they had to pay, as well as
the papers that they had to submit. It was after they had talked to her that they met the accused spouses
who owned the placement agency.
As correctly held by the trial court, being an employee of the Goces, it was therefore logical for appellant
to introduce the applicants to said spouses, they being the owners of the agency. As such, appellant was
actually making referrals to the agency of which she was a part. She was therefore engaging in
recruitment agency.
There is illegal recruitment when one gives the impression of having the ability to send worker abroad. It
is undisputed that appellant gave complainants the distinct impression that she had the power or ability to
send people abroad for work such that the latter were convinced to give her money she demanded in
order to be so employed.

Maria Victoria G. Guarino

2011-0131
Case Title: C. PLANAS COMMERCIAL VS NLRC, A. OFIALDA ET. AL.,

GR NO.: G.R. No. 144619
Petitioner: C. PLANAS COMMERCIAL and/or MARCIAL COHU
Respondents: NATIONAL LABOR RELATIONS COMMISSION (Second Division),
ALFREDO OFIALDA, DIOLETO MORENTE and RUDY ALLAUIGAN
Ponente: AUSTRIA-MARTINEZ, J.
Facts:
On September 14, 1993, Dioleto Morente, Rudy Allauigan and Alfredo Ofialda (private
respondents) together with 5 others filed a complaint for underpayment of wages, nonpayment of
overtime pay, holiday pay, service incentive leave pay and premium pay for holiday and rest day and night
shift differential against petitioners with the Arbitration Branch of the NLRC.
In their position paper, private respondents alleged that petitioner Cohu, owner of C. Planas
Commercial, is engaged in wholesale of plastic products and fruits of different kinds with more than 24
employees; that private respondents were hired by petitioners on January 14, 1990, May 14, 1990 and
July 1, 1991, respectively, as helpers/laborers; that they were paid below the minimum wage law for the
past 3 years.
In the instant case, complainants alleged that despite employing more than twenty-four (24)
workers in his establishment, hence covered by the minimum wage law, nevertheless the individual
respondent did not pay his workers the legal rates and benefits due them since their employment. By way
of answer, respondents countered that they employ less than ten (10) persons, hence the money claims
of complainants lack factual and legal basis, the respondents raised the defense of exemption from
coverage of the minimum wage law and in support thereof alleged that they regularly employed less than
ten (10) workers to serve as basis for their exemption under the law, they (respondents) must prove that
they employed less than ten workers, instead of more than twenty-four (24) workers as alleged by the
complainants.
However, apart from their allegation, respondents presented no evidence to show the number of
workers they employed regularly.
Issue:
Whether or not petitioner is exempted from paying the minimum wage to its employees.

Held:
R.A. No. 6727 known as the Wage Rationalization Act provides for the statutory minimum wage
rate of all workers and employees in the private sector. Section 4 of the Act provides for exemption from
the coverage, thus:
Sec. 4.
(c) Exempted from the provisions of this Act are household or domestic helpers and persons employed in
the personal service of another, including family drivers.
Retail/service establishments regularly employing not more than ten (10) workers may be
exempted from the applicability of this Act upon application with and as determined by the appropriate
Regional Board in accordance with the applicable rules and regulations issued by the Commission.
Whenever an application for exemption has been duly filed with the appropriate Regional Board, action
on any complaint for alleged non-compliance with this Act shall be deferred pending resolution of the
application for exemption by the appropriate Regional Board.
Clearly, for a retail/service establishment to be exempted from the coverage of the minimum
wage law, it must be shown that the establishment is regularly employing not more than ten (10) workers
and had applied for exemptions with and as determined by the appropriate Regional Board in accordance
with the applicable rules and regulations issued by the Commission. Petitioners’ main defense in
controverting private respondents’ claim for underpayment of wages is that they are exempted from the
application of the minimum wage law, thus the burden of proving such exemption rests on petitioners.
Petitioners had not shown any evidence to show that they had applied for such exemption and if they had
applied, the same was granted.


2011-0131
Case Title: DAVAO INTEGRATED PORT STEVEDORING SERVICES VS. ABARQUEZ

GR No.: G.R. No. 102132
Petitioner: DAVAO INTEGRATED PORT STEVEDORING SERVICES
Respondents: RUBEN V. ABARQUEZ, in his capacity as an accredited Voluntary
Arbitrator and THE ASSOCIATION OF TRADE UNIONS (ATU-TUCP)
Ponente: ROMERO, J
Facts:
Petitioner and private respondent and the exclusive collective bargaining agent of the rank and
file workers entered into collective bargaining agreement under Sections 1 and 3, Article VIII thereof,
provide for sick leave with pay benefits each year to its employees who have rendered at least one (1)
year of service with the company, thus:
Section 1. Sick Leaves — The Company agrees to grant 15 days sick leave with pay each year to every
regular non-intermittent worker who already rendered at least one year of service with the company.
However, such sick leave can only be enjoyed upon certification by a company designated physician, and
if the same is not enjoyed within one year period of the current year, any unenjoyed portion thereof, shall
be converted to cash and shall be paid at the end of the said one year period. And provided however, that
only those regular workers of the company whose work are not intermittent, are entitled to the herein sick
leave privilege.
Section 3. — All intermittent field workers of the company who are members of the Regular Labor Pool
shall be entitled to vacation and sick leaves per year of service with pay under the following schedule
based on the number of hours rendered including overtime.
Upon its renewal, the coverage of the said benefits was expanded to include the "present Regular
Extra Labor Pool as of the signing of this Agreement." Section 3, Article VIII, as revised, provides, thus:
"Section 3. — All intermittent field workers of the company who are members of the Regular Labor Pool
and present Regular Extra Labor Pool as of the signing of this agreement shall be entitled to vacation and
sick leaves per year of service with pay under the following schedule based on the number of hours
rendered including overtime.

Also, all the field workers of petitioner who are members of the regular labor pool and the present regular
extra labor pool hours were extended sick leave with pay benefits. Any unenjoyed portion thereof at the
end of the current year was converted to cash and paid at the end of the said one-year period pursuant to
Sections 1 and 3, Article VIII of the CBA.
The commutation of the unenjoyed portion of the sick leave with pay benefits of the intermittent
workers or its conversion to cash was, however, discontinued or withdrawn when petitioner-company
under a new assistant manager, Mr. Benjamin Marzo (who replaced Mr. Cecilio Beltran, Jr. upon the
latter's resignation), stopped the payment of its cash equivalent on the ground that they are not entitled to
the said benefits under Sections 1 and 3 of the 1989 CBA.
The Union objected said discontinuance because it would violate the principle in labor laws that
benefits already extended shall not be taken away and that it would result in discrimination between the
non-intermittent and the intermittent workers of the petitioner-company. The Union brought it before the
National Conciliation and Mediation Board and said public respondent issued an award in favour of the
Union. Hence, this instant petition.
Issue:
Whether or not the petitioner, in refusing to convert unused leave to cash, violated Article 100 of
the Labor Code of the Philippines
Held:
There is a violation of Article 100 of the Labor Code of the Philippines committed by the petitioner.
It was said that CBA is not an ordinary contract but impressed with public interest, thus it must yield to the
common good.
It must be noted that the 1989 CBA has two (2) sections on sick leave with pay benefits which
apply to two (2) distinct classes of workers in petitioner's company, namely: (1) the regular non-
intermittent workers or those workers who render a daily eight-hour service to the company and are
governed by Section 1, Article VIII of the 1989 CBA; and (2) intermittent field workers who are members
of the regular labor pool and the present regular extra labor pool as of the signing of the agreement on
April 15, 1989 or those workers who have irregular working days and are governed by Section 3, Article
VIII of the 1989 CBA.
It is thus erroneous for petitioner to isolate Section 1, Article VIII of the 1989 CBA from the other
related section on sick leave with pay benefits, specifically Section 3 thereof, in its attempt to justify the
discontinuance or withdrawal of the privilege of commutation or conversion to cash of the unenjoyed
portion of the sick leave benefit to regular intermittent workers because well-settled is it that the said
privilege of commutation or conversion to cash, being an existing benefit, the petitioner-company may not
unilaterally withdraw, or diminish such benefits.
It is a fact that petitioner-company had, on several instances in the past, granted and paid the
cash equivalent of the unenjoyed portion of the sick leave benefits of some intermittent workers. Under
the circumstances, these may be deemed to have ripened into company practice or policy which cannot
be peremptorily withdrawn.


2011-0131
Case Title: NESTLE PHILIPPINES VS. NLRC

GR No: G.R. No. 91231
Petitioner: NESTLÉ PHILIPPINES, INC
Respondents: THE NATIONAL LABOR RELATIONS COMMISSION and UNION OF
FILIPRO EMPLOYEES
Ponente: GRIÑO-AQUINO,J
Facts:
Nestlé Philippines, Inc., seeks to annul, on the ground of grave abuse of discretion, the decision
dated August 8, 1989 of the National Labor Relations Commission (NLRC), insofar as it modified the
petitioner's existing non-contributory Retirement Plan.
Four (4) collective bargaining agreements separately covering the petitioner's employees in its
several factories all expired on June 30, 1987.
Thereafter, UFE ( Union of Filipro Employees ) was certified as the sole and exclusive bargaining
agent for all regular rank-and-file employees at the petitioner's Cagayan de Oro factory, as well as its
Cebu/Davao Sales Office.
The employees at Cabuyao resorted to a "slowdown" and walk-outs prompting the petitioner to
shut down the factory. Marathon collective bargaining negotiations between the parties ensued, but led to
filing complaints.
After the parties had filed their pleadings, the NLRC issued a resolution on June 5, 1989, whose
pertinent disposition regarding the union's demand for liberalization of the company's retirement plan for
its workers, provides as follows: 7. Retirement Plan
The company shall continue implementing its retirement plan modified as follows:
a) for fifteen years of service or less — an amount equal to 100% of the employee's
monthly salary for every year of service;
b) more than 15 but less than 20 years — 125% of the employee's monthly salary for
every year of service;
c) 20 years or more — 150% of the employee's monthly salary for every year of service.
On December 14, 1989, the petitioner filed this petition for certiorari, alleging that since its
retirement plan is non-contributory, it (Nestlé) has the sole and exclusive prerogative to define the terms
of the plan "because the workers have no vested and demandable rights thereunder, the grant thereof
being not a contractual obligation but merely gratuitous. At most the company can only be directed to
maintain the same but not to change its terms. It should be left to the discretion of the company on how to
improve or mollify the same"

Issue:
Whether or not NLRC erred insofar as it modified the petitioner's existing non-contributory
Retirement Plan.
Held:
The Court agrees with the NLRC's finding that the Retirement Plan was "a collective bargaining
issue right from the start". The union's original proposal was to modify the existing plan by including a
provision for early retirement. The company did not question the validity of that proposal as a collective
bargaining issue but merely offered to maintain the existing non-contributory retirement plan which it
believed to be still adequate for the needs of its employees, and competitive with those existing in the
industry. The union thereafter modified its proposal, but the company was adamant. Consequently, the
impassé on the retirement plan become one of the issues certified to the NLRC for compulsory
arbitration.
The company's contention that its retirement plan is non-negotiable, is not well-taken. The NLRC
correctly observed that the inclusion of the retirement plan in the collective bargaining agreement as part
of the package of economic benefits extended by the company to its employees to provide them a
measure of financial security after they shall have ceased to be employed in the company, reward their
loyalty, boost their morale and efficiency and promote industrial peace, gives "a consensual character" to
the plan so that it may not be terminated or modified at will by either party
The fact that the retirement plan is non-contributory, that the employees contribute nothing to the
operation of the plan, does not make it a non-issue in the CBA negotiations. As a matter of fact, almost all
of the benefits that the petitioner has granted to its employees under the CBA — salary increases, rice
allowances, mid-year bonuses, 13th and 14th month pay, seniority pay, medical and hospitalization plans,
health and dental services, vacation, sick & other leaves with pay — are non-contributory benefits. Since
the retirement plan has been an integral part of the CBA since 1972, the Union's demand to increase the
benefits due the employees under said plan, is a valid CBA issue. The deadlock between the company
and the union on this issue was resolvable by the Secretary of Labor, or the NLRC, after the Secretary
had assumed jurisdiction over the labor dispute (Art. 263, subparagraph [i] of the Labor Code).
The petitioner's contention, that employees have no vested or demandable right to a non-
contributory retirement plan, has no merit for employees do have a vested and demandable right over
existing benefits voluntarily granted to them by their employer. The latter may not unilaterally withdraw,
eliminate or diminish such benefits.
The NLRC's resolution of the bargaining deadlock between Nestlé and its employees is neither
arbitrary, capricious, nor whimsical. The benefits and concessions given to the employees were based on
the NLRC's evaluation of the union's demands, the evidence adduced by the parties, the financial

capacity of the Company to grant the demands, its longterm viability, the economic conditions prevailing
in the country as they affect the purchasing power of the employees as well as its concommitant effect on
the other factors of production, and the recent trends in the industry to which the Company belongs . Its
decision is not vitiated by abuse of discretion.


2001-0131
Case Title: R. TIANGCO AND V. TIANGCO VS. HON. VICENTE LEOGARDO JR

GR No.: G.R. No. 57636
Date: MAY 16, 1983
Petitioner: Reynaldo Tiangco and Victoria Tiangco
Respondent: Hon. Vicente Leogardo Jr.,
Ponente: CONCEPCION, JR., J
Facts:
The petitioner, Reynaldo Tiangco, is a fishing operator who owns th e
ReynaldoTiangco Fishing Company and a fleet of fishing vessels engaged in deep-sea fishing which
operates from Navotas, Rizal.
His business is capitalized at P2,000,000.00, while the petitioner, Victoria Tiangco, is a fish
broker whose business is capitalized at P100,000.00
Some of the priv ate respondent s were engaged by Reynaldo Tiangco as
batillos,who were tasked to unload the fish catch from the vessels and take them to the Fish Stall of the
petitioner Victoria Tiangco. The other private respondents were batillos engaged by Victoria Tiangco.
They were all working as part -time since their work were limited to days of arrival of the
fishing vessels and their working days in a month are comparatively few. Their working hours average
four (4) hours a day.
The priv ate respondent s f iled a complaint against the petitioners with the Ministry
of Labor and Employment for non-payment of their legal holiday pay and service incentive leave pay, as
well as underpayment of their emergency cost of living allowances which used to be paid in full
irrespective of their working days, but which were reduced effective February, 1980, in contravention of
Article 100 of the new Labor Code which prohibits the elimination or diminution of existing benefits.
The petitioners on th e other hand, denied the laborers’ contention and stated that
in addition to their regular daily wage, a daily extra pay in amounts ranging from 30centavos to 10 pesos
were given to offset the laborers' claim for service incentive leave and legal holiday pay. They however,
admitted that they had discontinued their practice of paying a fixed monthly allowance, and allowances for
non-working days. They invoked the principle of “No work, no allowances” and said that the payment of
such allowances will cause losses to their business.
The petitioners now f iled a petition f or certiorari and prohibition, with preliminary
mandatory injunction and/or restraining order to annul and set aside the order of the respondent Deputy
Minister of Labor which modified and affirmed the order of Director of the National Capital Region of the
Ministry of Labor, which directed the petitioners to pay the private respondents their legal holiday pay,
service incentive pay, and differentials in their emergency cost of living allowances.

Issue:
Whether the Deputy Minister of Labor and Employment erred in deciding that there is diminution of benefits in the
discontinuance of giving of allowance.

Held:
The Deputy Minister of Labor and Employment correctly ruled that, since the petitioners had been
paying the private respondents a fixed monthly emergency allowance since November, 1976 up to
February, 1980, as a matter of practice and/or verbal agreement between the petitioners and the private
respondents, the discontinuance of the practice and/or agreement unilaterally by the petitioners
contravened the provisions of the Labor Code, particularly Article 100 thereof which prohibits the
elimination or diminution of existing benefits. Section 15 of the Rules on P.D. 525 and Section 16 pf the
Rules on P.D. 1123 also prohibits the diminution of any benefit granted to the employees under existing
laws, agreements and voluntary employer practice. The decision of the Deputy Minister of Labor was
modified, taking into consideration that the respondent employees are employed by different individuals
with varying capitalization.


2011-0131
Case Title: GLOBE MACKAY CABLE VS. NLRC

GR No: G.R. NO. 74156
Date: JUNE 29, 1988
Petitioner: GLOBE MACKAY CABLE AND RADIO CORPORATION
Respondent: NLRC, FFW- GLOBEMACKAY EMPLOYEES UNION
Ponente: MELENCIO- HERRERA, J.
Facts:
Wage Order No. 6 increased the cost -of-living allowance of non-agricultural
workers in the private sector. Petitioner corporation (GMCR) complied with the said Wage Order by
paying its monthly-paid employees the mandated P3.00 per day COLA. However, in computing said
COLA, GMCR multiplied the P3.00 daily COLA by 22days, which is the number of working days in the
company.
Respondent Union disagreed with the computation of the monthly COLA claiming
that the daily COLA rate of P3.00 should be multiplied by 30 days to arrive at the monthly COLA rate. The
union alleged furthermore that prior to the effectivity of Wage Order No. 6, GMCR had been computing
and paying the monthly COLA on the basis of thirty (30) days per month and that this constituted an
employer practice,which should not be unilaterally withdrawn.
The Labor Arbiter ruled that the monthly COLA should be c omputed on the basis of
twenty two (22) days, since the evidence showed that there are only 22 paid days in a month for monthly-
paid employees in the company. To compel the respondent company to use 30 days in a month to
compute the allowance and retain 22 days for vacation and sick leave, overtime pay and other benefits is
inconsistent and unjust. If 30 days is used as divisor, then it must be used for the computation of all
benefits, not just the allowance. But this is not fair to complainants, not to mention that it will contravene
the provision of the parties' CBA.
Howev er, the NLRC rev ersed the Labor Arbiter and held that petitioner was guilty of
illegal deductions, upon the following considerations: (1) that the P3.00 daily COLA should be paid and
computed on the basis of thirty (30) days instead of twenty two(22) days since workers paid on a monthly
basis are entitled to COLA on Saturdays,Sundays and legal holidays "even if unworked;" (2) that the full
allowance enjoyed by monthly-paid employees before the CBA executed in 1982 constituted voluntary
employer practice, which cannot be unilaterally withdrawn.
Issue:
Whether or not petitioner, in computing COLA based on the number of working days of the company , violated Article
100 of the Labor Code of the Philippines
Held:
There is no violation of Article 100 of the Labor Code on prohibition of wage
diminution. The primordial consideration f or entitlement to COLA is that basic wage is
being paid. In other words, the payment of COLA is mandated only for the days that the employees are

paid their basic wage, even if said days are unworked. So that, on the days that employees are not paid
their basic wage, the payment of COLA is not mandated. Peculiar to this case, however, is the
circumstance that pursuant to the Collective Bargaining Agreement (CBA) between Petitioner and
Respondent Union,the monthly basic pay is computed on the basis of five (5) days a week, or twenty two
(22) days a month. In determining the hourly rate of monthly paid employees for purposes of computing
overtime pay, the monthly wage is divided by the number of actual work days in a month and then, by
eight (8) working hours. If a monthly-paid employee renders overtime work, he is paid his basic salary
rate plus one-half thereof. Thus, where the company observes a 5-day work week, it will have to be held
that the COLA should be computed on the basis of twenty two (22) days, which is the period during which
the employees of petitioner receive their basic wage. The CBA is the law between the parties and, if not
acceptable, can be the subject of future re-negotiation.
Payment in f ull by petitioner of the COLA bef ore the execution of the CBA in
compliance with Wage Orders Nos. 1 to 5,should not be construed as constitutive of
voluntary employer practice, which cannot now be unilaterally withdrawn by petitioner. To
be considered as such, it should hav e been practiced ov er a long period of time, and must
be shown to hav e been consistent and deliberate. Adequate proof is wanting in this
respect. The test of long practice has been enunciated in Oceanic Pharmaceutical
Employees Union v s.Inciong such that “respondent company agreed to continue giving
holiday pay knowing f ully well that said employees are not cov ered by the law requiring
payment of holiday pay."Absent clear administrativ e guidelines, petitioner cannot be
f aulted f or erroneous application of the law. Payment may be said to hav e been made by
reason of a mistake in the construction or application of a "doubtf ul or difficult question o f
law."Since it is a past error that is being corrected, no vested right may be said to hav e
arisen nor any diminution of benefit under Article 100 of the Labor Code may be said to
hav e resulted by virtue of the correction.


2011-0131
Case Title: SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING VS. NLRC

GR No.: G.R. No. 113856
Petitioner:SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING UNITED
WORKERS OF THE PHILIPPINES (SMTFM-UWP), its officers and members
Respondents: NATIONAL LABOR RELATIONS COMMISSION, HON. JOSE G. DE VERA
and TOP FORM MANUFACTURING PHIL., INC.
Ponente: ROMERO, J.
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. At the collective bargaining
negotiation, the parties agreed to discuss unresolved economic issues. Union proposed that any future
wage increase given by the government should be implemented by the company across-the-board or
non-conditional. Management requested the union to retain this provision since their sincerity was already
proven when the P25.00 wage increase was granted across-the-board.
On October 15, 1990, the RTWPB-NCR issued Wage Order No. 01 granting an increase of
P17.00 per day in the salary of workers. This was followed by Wage Order No. 02 dated December 20,
1990 providing for a P12.00 daily increase in salary.
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.The
union, through its legal counsel, demanded that it should "fulfill its pledge of sincerity to the union by
granting an across-the-board wage increases to all employees under the wage orders." The union
reiterated that it had agreed to "retain the old provision of CBA" on the strength of private respondent's
"promise and assurance" of an across-the-board salary increase should the government mandate salary
increases. Several conferences between the parties notwithstanding, private respondent adamantly
maintained its position on the salary increases it had granted that were purportedly designed to avoid
wage distortion.
Consequently, the union filed a complaint with the NCR NLRC alleging that private respondent's
act of "reneging on its undertaking/promise clearly constitutes act of unfair labor practice through
bargaining in bad faith." It charged private respondent with acts of unfair labor practices or violation of
Article 247 of the Labor Code, as amended, specifically "bargaining in bad faith," and prayed that it be
awarded actual, moral and exemplary damages. In its position paper, the union added that it was
charging private respondent with "violation of Article 100 of the Labor Code."

Private respondent, on the other hand, contended that in implementing Wage Orders Nos. 01 and
02, it had avoided "the existence of a wage distortion" that would arise from such implementation.
Issue:
Whether or not private respondent violated Article 100 Of the Labor Code of the Philippines, by
refusing to grant an across-the-board wage increase.
Held:
The alleged discrimination in the implementation of the subject wage orders does not inspire
belief at all where the wage orders themselves do not allow the grant of wage increases on an across-
the-board basis. That there were employees who were granted the full extent of the increase authorized
and some others who received less and still others who did not receive any increase at all, would not
ripen into what the complainants termed as discrimination. That the implementation of the subject wage
orders resulted into an uneven implementation of wage increases is justified under the law to prevent any
wage distortion. What the respondents did under the circumstances in order to deter an eventual wage
distortion without any arbitral proceedings is certainly commendable.
The alleged violation of Article 100 of the Labor Code, as amended, as well as Article XVII,
Section 7 of the existing CBA as herein earlier quoted is likewise found to have no basis in fact and in law.
No benefits or privileges previously enjoyed by the employees were withdrawn as a result of the
implementation of the subject orders. Likewise, the alleged company practice of implementing wage
increases declared by the government on an across-the-board basis has not been duly established by the
complainants' evidence. The complainants asserted that the company implemented Republic Act No.
6727 which granted a wage increase of P25.00 effective July 1, 1989 on an across-the-board basis.
Granting that the same is true, such isolated single act that respondents adopted would definitely not
ripen into a company practice. It has been said that "a sparrow or two returning to Capistrano does not a
summer make."


2011-0131
Case Title: PAG ASA STEEL WORKS VS. CA

GR No.: G.R. 166647
Petitioner: PAG-ASA STEEL WORKS, INC.
Repondents: COURT OF APPEALS, FORMER SIXTH DIVISION and PAG-ASA STEEL WORKERS UNION
(PSWU)
Ponente: CALLEJO, SR., J.
Facts:
Petitioner is engaged in the manufacture of steel bars and wire rods while Pag-Asa Steel Workers
Union is the duly authorized bargaining agent of the ran-and-file employees. RTWPB of NCR issued a wage
order which provided for a P 13.00 increase of the salaries receiving minimum wages. The Petitioner and the union
negotiated on the increase. Petitioner forwarded a letter to the union with the list of adjustments involving rank
and file employees. In September 1999, the petitioner and union entered into an collective bargaining agreement where it
provided wage adjustments namely P 15, P 25, P 30 for three succeeding year. On the first year, the increase provided
were followed until RTWPB issued another wage order where it provided for a P 25.50 per day increase in the
salary of employees receiving the minimum wage and increased the minimum wage to P 223.50 per day.
Petitioner paid the P 25.50 per day increase to all of its rank-and-file employees .On November 2000, Wage Order
No. NCR-08 was issued where it provided the increase of P 26.50 per day. The union president asked that
the wage order be implemented where petitioner rejected the request claiming that there was no wage
distortion and it was not obliged to grant the wage increase. The union submitted the matter for voluntary
arbitration where it favored the position of the company and dismissed the complaint. The matter was
elevated to CA where it favored the respondents.
Issue:
Whether or not the company was obliged to grant the wage increase under the Wage Order as a matter of
practice.
Held:
Company is not obliged to grant the wage increase. It is submitted that employers
unless exempt are mandated to i mplement the said wage order but limited to those
entitled thereto. A perusal of the record shows that the lowest paid employee before the implementation of Wage Order
#8 is P 250.00/day and none was receiving below P 223.50 minimum. This could only mean that the union can no longer
demand for any wage distortion adjustment. The provision of wage order #8 and its implementing rules are
very clear as to who are entitled to the P 26.50/day increase i. e., "private sector workers and employees in
the National Capital Region receiving the prescribed daily minimum wage rate of P 223.50 shall receive an increase
of Twenty-six Pesos and Fifty Centavos ( P 26.50) per day," and since the lowest paid is P 250.00/day
the company is not obliged to adjust the wages of the workers. The provision in the CBA that "Any Wage
Order to be implemented by the Regional Tripartite Wage and Productivity Board shall be
in addition to the wage increase adv erted above" cannot be interpreted in support of an across-

the-board increase. Wage Order No. NCR 08 clearly states that only those employees receiving
salaries below the prescribed minimum wage are entitled to the wage increase prov ided
therein,and not all employees across the board as respondent Union would want petitioner to do. Considering wage,
petitioner is not obliged to grant the wage increase to them. Moreov er, to ripen into a
company practice that is demandable as a matter of right, the giving of the increase
should not be by reason of a strict legal or contractual obligation, but by reason of an act of liberality on the part of
the employer. Hence, even if the company continuously grants a wage increase as mandated by a wage order or pursuant to
a CBA, the same would not automatically ripen into a company practice.


2011-0131
Case Title: DARVIN VS. CA

GR No.: G.R. No. 125044
Date: July 13, 1998
Petitioner: IMELDA DARVIN
Respondents:HON. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES
Ponente: ROMERO,J
Facts:
Imelda Darvin was convicted of simple illegal recruitment under the Labor Code by the RTC. It
stemmed from a complaint of one Macaria Toledo who was convinced by the petitioner that she has the
authority to recruit workers for abroad and can facilitate the necessary papers in connection thereof. In
view of this promise, Macaria gave her P150,000 supposedly intended for US Visa and air fare.
On appeal, the CA affirmed the decision of the trial court in toto, hence this petition.
Issue:
Whether or not appellant is guilty beyond reasonable doubt of illegal recruitment.
Held:
Art. 13 of the Labor Code provides the definition of recruitment and placement as:
...b.) any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and
includes referrals, contract services, promising or advertising for employment locally or abroad, whether
for profit or not: Provided, that any reason person or entity which, in any manner, offers or promises for a
fee employment to two or more persons shall be deemed engaged in recruitment and placement.
Art. 38 of the Labor Code provides:
a.)Any recruitment activities, including the prohibited practices enumerated under Article 43 of the Labor
Code, to be undertaken by non-licensees or non-holders of authority shall be deemed illegal and
punishable under Article 39 of the Labor Code.
Applied to the present case, to uphold the conviction of accused-appellant, two elements need to
be shown: (1) the person charged with the crime must have undertaken recruitment activities: and (2) the
said person does not have a license or authority to do so.
In the case, the Court found no sufficient evidence to prove that accused-appellant offered a job
to private respondent. It is not clear that accused gave the impression that she was capable of providing
the private respondent work abroad. What is established, however, is that the private respondent gave
accused-appellant P150,000.

By themselves, procuring a passport, airline tickets and foreign visa for another individual, without
more, can hardly qualify as recruitment activities. Aside from the testimony of private respondent, there is
nothing to show that appellant engaged in recruitment activities.
At best, the evidence proffered by the prosecution only goes so far as to create a suspicion that
appellant probably perpetrated the crime charged. But suspicion alone is insufficient, the required
quantum of evidence being proof beyond reasonable doubt. When the People’s evidence fail to
indubitably prove the accused’s authorship of the crime of which he stand accused, then it is the Court’s
duty, and the accused’s right, to proclaim his innocence.

ALEXANDER O. GUEVARRA, JR
2011-0128
ELIMINATION OR DIMINUTION OF BENEFITS (THIRTEENTH MONTH PAY)
G.R. No. L-60403
August 3, 1983
ALLIANCE OF GOVERNMENT WORKERS (AGW); PNB-FEMA BANK EMPLOYEES ASSOCIATION
(AGW); KAISAHAN AT KAPATIRAN NG MGA MANGAGAWA AT KAWANI NG MWSS (AGW);
BALARA EMPLOYEES ASSOCIATION (AGW); GSIS WORKERS ASSOCIATION (AGW); SSS
EMPLOYEES ASSOCIATION (AGW); PVTA EMPLOYEES ASSOCIATION (AGW); NATIONAL
ALLIANCE OF TEACHERS AND OFFICE WORKERS (AGW); , petitioners, vs.THE HONORABLE
MINISTER OF LABOR and EMPLOYMENT, PHILIPPINE NATIONAL BANK (PNB); METROPOLITAN
WATERWORKS and SEWERAGE SYSTEM (MWSS); GOVERNMENT SERVICE INSURANCE
SYSTEM (GSIS); SOCIAL SECURITY SYSTEM (SSS); PHILIPPINE VIRGINIA TOBACCO
ADMINISTRATION (PVTA) PHILIPPINE NORMAL COLLEGE (PNC); POLYTECHNIC UNIVERSITY OF
THE PHILIPPINES (PUP),
FACTS: In 1983, the Philippine Government Employees Association (PGEA) filed a motion pursuant to
P.D. No. 851 that requires all employers to pay the 13th-month pay to their employees with one sole
exception found in Section 2 which states that, employers already paying their employees a 13th month
pay or its equivalent are not covered by this Decree. The petitioners contend that Section 3 of the Rules
and Regulations Implementing P.D. No. 851 included other types of employers not exempted by the
decree. They state that nowhere in the decree is the secretary, now Minister of Labor and Employment,
authorized to exempt other types of employers from the requirement.
ISSUE: Whether or not the private sectors or of government-owned and - controlled corporations and
government agencies, are thereunder obligated to pay their employees receiving a basic salary of not
more than P1,000 a month, a 13th-month pay not later than December 24th of every year?
HELD: It is the legislature or, in proper cases, the administrative heads of government and not the
collective bargaining process nor the concessions wrung by labor unions from management that
determine how much the workers in government-owned or controlled corporations may receive in terms of
salaries, 13th month pay, and other conditions or terms of employment. There are government institutions
which can afford to pay two weeks, three weeks, or even 13th-month salaries to their personnel from their
budgetary appropriations. Here as in other countries, government salaries and wages have always been
lower than salaries, wages, and bonuses in the private sector. However, civil servants have no cause for
despair. Service in the government may at times be a sacrifice but it is also a welcome privilege. Section
3 of the Rules and Regulations Implementing Presidential Decree No. 851 is, therefore, a correct
interpretation of the decree. It has been implemented and enforced from December 22, 1975 to the
present; the petitioners have shown no valid reason why it should be nullified because of their petition
filed six and a half years after the issuance and implementation of the rule. WHEREFORE, the petition is
hereby DISMISSED for lack of merit.

2011-0128
ELIMINATION OR DIMINUTION OF BENEFITS (EXCEPTIONS)
G.R. No. 155059
April 29, 2005
AMERICAN WIRE AND CABLE DAILY RATED EMPLOYEES UNION, Petitioner, vs.AMERICAN
WIRE AND CABLE CO., INC. and THE COURT OF APPEALS, Respondents.
FACTS: American Wire and Cable Co., Inc., is a corporation engaged in the manufacture of wires and
cables. Two unions in this company, the American Wire and Cable Monthly-Rated Employees
Union and Cable Daily-Rated Employees Union. In 2001, an action was filed before the NCMB of
the Department of Labor and Employment (DOLE) by the two unions for voluntary arbitration.
They alleged that, without valid cause, suddenly and unilaterally withdrew and denied certain
benefits and entitlements which they have long enjoyed, which are the ff: Service Award; 35%
premium pay of an employee’s basic pay for the work rendered during Holy Monday, Holy
Tuesday, Holy Wednesday, December 23, 26, 27, 28 and 29; Christmas Party; and Promotional
Increase. A promotional increase was asked by the petitioner for fifteen of its members who were
given or assigned new job classifications. The new job classifications were in the nature of a
promotion, necessitating the grant of an increase in the salaries of the said 15 members. In 2001,
a Submission Agreement was filed by the parties for Voluntary Arbitration, Angel A. Ancheta.
Decision was rendered in favor of the private respondent. A motion for reconsideration was filed
by both unions and was denied for lack of merit.
ISSUE: Whether or not private respondent is guilty of violating Article 100 of the Labor Code, as
amended, when the benefits/entitlements given to the members of petitioner union were
withdrawn?
HELD: ART. 100. PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS. The

petitioner submits that the withdrawal of the private respondent of the 35% premium pay for
selected days during the Holy Week and Christmas season, the holding of the Christmas Party
and its incidental benefits, and the giving of service awards violated Article 100 of the Labor
Code. The grant of these benefits was a customary practice that can no longer be unilaterally
withdrawn by private respondent without the tacit consent of the petitioner. The benefits in
question were given by the respondent to the petitioner consistently, deliberately, and
unconditionally since time immemorial. As such, it cannot be withdrawn from the petitioner at
respondent’s whim and caprice, and without the consent of the former. The benefits given by the
respondent cannot be considered as a "bonus" as they are not founded on profit. Even assuming
that it can be treated as a "bonus," the grant of the same, by reason of its long and regular
concession, may be regarded as part of regular compensation. WHEREFORE, in view of all the
foregoing, the assailed Decision and Resolution of the Court of Appeals dated 06 March 2002
and 12 July 2002, respectively, which affirmed and upheld the decision of the Voluntary
Arbitrator, are hereby AFFIRMED.

Alexander O. Guevarra, Jr.

2011-0128
G.R. No. 72616-17
March 8, 1989
FRAMANLIS FARMS, INC., ELOISA SYCIP and LINCOLN SYCIP, petitioners vs.HON. MINISTER OF
LABOR, MANILA, respondent
GRIÑO-AQUINO, J.:
FACTS: In 1980, 18 employees of the petitioners filed against their employer, alleging that in 1977 to
1979 they were not paid emergency cost of living allowance (ECOLA) minimum wage, 13th month pay,
holiday pay, and service incentive leave pay. In their answer to the amended complaint, petitioners
alleged that the private respondents were not regular workers on their hacienda but were migratory or
pakyaw workers who worked on-and-off and were hired seasonally, or only during the milling season, to
do piece-work on the farms, hence, they were not entitled to the benefits claimed by them. They also
alleged that under the decrees, the living allowance shall be paid on a monthly, not percentage, basis
depending on the total assets or authorized capital stock of the employer, whichever is higher and
applicable. They admitted that their total assets and authorized capital stock exceeded P2 million.
However, in 1977 they had applied for exemption under PDs 525 and 1123 but no ruling has been issued
by the Ministry of Labor on their application. The claims for holiday pay, service incentive leave pay,
social amelioration bonus and underpayment of minimum wage were not controverted. With respect to
the complainants' other claims, the petitioners submitted only random payrolls which showed that the
women workers were underpaid as they were receiving an average daily wage of P5.94 only, although
the male workers received P10 more or less, per day.
ISSUE: Whether or not the employees are entitled to their thirteenth month pay.
HELD: The respondents argued that they substantially complied with the law by giving their workers a
yearly bonus and other non-monetary benefits amounting to not less than 1/12th of their basic salary, in
the form of:1.a weekly subsidy of choice pork meat for only P9.00 per kilo and later increased to P11 per
kilo in March 1980, instead of the market price of P10 to P15 per kilo; 2.free choice pork meat in May and
December of every year; and 3.free light or electricity; 4.all of which were allegedly "the equivalent" of the
13th month pay. Unfortunately, under Section 3 of PD No. 851, such benefits in the form of food or free
electricity, assuming they were given, were not a proper substitute for the 13th month pay required by
law. The failure of the Minister's decision to identify the pakyaw and non-pakyaw workers does not render
said decision invalid. The workers may be identified or determined in the proceedings for execution of the
judgment. WHEREFORE, the petition for certiorari is dismissed with costs against the petitioners.

2011-0128
G.R. No. 111744
September 8, 1995
LOURDES G. MARCOS, ALEJANDRO T. ANDRADA, BALTAZARA J. LOPEZ AND VILMA L. CRUZ,
petitioners, vs.NATIONAL LABOR RELATIONS COMMISSION and INSULAR LIFE ASSURANCE
CO., LTD., respondents.
FACTS: Petitioners were regular employees of respondent, but they were dismissed In 1990 when their
positions were declared redundant. A special redundancy benefit was paid to them, which included
payment of accrued vacation leave and fifty percent of unused current sick leave, special redundancy
benefit, equivalent to three months’ salary for every year of service; and additional cash benefits, in lieu of
other benefits provided by the company or required by law. Before the termination of their services,
petitioner Marcos had been in the employ of private respondent for more than twenty years, Andrada,
more than twenty-five years, Lopez, exactly thirty years, Cruz, more than twenty years. They claimed that
they should receive their respective service awards and other prorated bonuses which they had earned at
the time they were dismissed. NLRC held that either was there any unwritten agreement between
complainants and respondent upon separation, which entitled the former to other remunerations or
benefits. On the contrary, they voluntarily accepted the redundancy benefit package; otherwise, they
would not have been separated from employment.
ISSUE: Whether or not respondent NLRC committed reversible error or grave abuse of discretion in
affirming the validity of the "Release and Quitclaim" and, consequently, that petitioners are not entitled to
payment of service awards and other bonuses.
HELD: A bonus is not a gift or gratuity, but is paid for some services or consideration and is in addition to
what would ordinarily be given. 25 The term "bonus" as used in employment contracts, also conveys an
idea of something which is gratuitous, or which may be claimed to be gratuitous, over and above the
prescribed wage which the employer agrees to pay. While there is a conflict of opinion as to the validity of
an agreement to pay additional sums for the performance of that which the promise is already under
obligation to perform, so as to give the latter the right to enforce such promise after performance, the
authorities hold that if one enters into a contract of employment under an agreement that he shall be paid
a certain salary by the week or some other stated period and, in addition, a bonus, in case he serves for a
specified length of time, there is no reason for refusing to enforce the promise to pay the bonus, if the
employee has served during the stipulated time, on the ground that it was a promise of a mere gratuity. In
the case at bar, equity demands that the performance and anniversary bonuses should be prorated to the
number of months that petitioners actually served respondent company in the year 1990. This
observation should be taken into account in the computation of the amounts to be awarded to petitioners.
WHEREFORE, the assailed decision and resolution of respondent National Labor Relations Commission
are hereby SET ASIDE and the decision of Labor Arbiter Alex Arcadio Lopez is REINSTATED.

ALEXANDER O. GUEVARRA, JR.
2011-0128
G.R. No. 100167
March 2, 1995
ISALAMA MACHINE WORKS CORPORATION, petitioner,
vs.
HON. LABOR RELATIONS COMMISSION, FIFTH DIVISION
FACTS: In 1987 both petitioner and respondent entered into a collective bargaining agreement. Following
the signing of the CBA, the union made repeated demands on the corporation, allegedly to no avail, for it
to comply with the CBA provisions, i.e., to furnish the workers with safety shoes and free company
laminated IDs and, in general, to improve the employees' working conditions. In 1987, the corporation
paid the workers the 13th month pay based on the average number of days actually worked during the
year. The union, private respondent Henry Baygan, demanded that the 13th month pay should, instead,
be made on the basis of a full one month basic salary. The corporation countered that its own
computation of the 13th month pay accorded with the CBA provisions and Presidential Decree No. 851.
The union filed a notice of strike alleging the commission of unfair labor practice and CBA violation by the
corporation. After several conferences. Petitioner submits that private respondents cannot claim good
faith in staging their strike since the attention of both parties had been called by the conciliator at the
hearings before the NCMB to the "non-strikeable" character of the 13th month pay. Private respondents
continue to claim.
ISSUE: Whether or not 13th month pay should be considered a strikeable issue?
HELD: In this case, the real reason for the strike is clearly traceable to the unresolved dispute between
the parties on 13th month pay differentials under Presidential Decree No. 851, i.e., the proper manner of
its application and computation. The Court does not see this issue, given the aforequoted provisions of
the law and its implementing rules, to be constitutive of unfair labor practice. Petitioner tells us that it can
no longer accept the strikers due to its decision to close down its operations on account of damages and
losses it has incurred because of the strike, and that Golden Engineering, which has taken over the
business, is presently owned by one Alfredo Chan and not Charlie Chan of petitioner corporation. 11 This
claim raises factual issues which evidently are still awaiting resolution by the NLRC in the motion for
execution now pending before it. It is there, not here, where these issues can be finally resolved. This
case arose in 1988 or prior to the effectivity of Republic Act No. 6715; accordingly, the back salaries of
the dismissed employee should be limited to three years, without deduction or qualification, following the
rule in Maranaw Hotels and Resorts Corporation vs. Court of Appeals. WHEREFORE, the questioned
decision and resolution of the NLRC are AFFIRMED subject to the MODIFICATION that the back salaries
ordered to be paid should be limited, without deduction or qualification, to only three (3) years. No costs.

2011-0128
G.R. No. L-24632
October 26, 1968
LEXAL LABORATORIES and/or JOSE ANGELES, Manager, petitioners, vs.NATIONAL CHEMICAL
INDUSTRIES WORKERS UNION-PAFLU (Lexal Laboratories Chapter) and THE COURT OF
INDUSTRIAL RELATIONS, respondents.
FACTS: Lexal to reinstate Guillermo Ponseca, a dismissed employee, to his former position "with full
back wages from the day of his dismissal up to the time he is actually reinstated without loss of his
seniority rights and of such other rights and privileges enjoyed by him prior to his lay-off." CIR, confirming
the report of its Chief Examiner and Economist, ruled in its order of February 16, 1965 that Ponseca was
entitled to back wages from November 5, 1958 when he ceased reporting for work, to November 24, 1963
a day prior to his reinstatement on November 25, 1963. Petitioners vigorously objected to the inclusion of
the P4.00 per diem in the computation of Ponseca's back wages because the latter "did not actually
spend for his meals and lodgings for he was all the time in Manila, his station." CIR brushed this
contention aside. Whereupon, petitioners appealed to this Court from the order of February 16, 1965 and
the resolution of May 22, 1965.
ISSUE: Whether or not Guillermo Ponseca is entitled of back wages?
HELD: It would seem to us that per diem is intended to cover the cost of lodging and subsistence of
officers and employees when the latter are on duty outside of their permanent station.4 Lexal concedes
that whenever its employee, Guillermo Ponseca, was out of Manila, he was allowed a per diem of P4.00
broken down as follows: P1.00 for breakfast; P1.00 for lunch; P1.00 for dinner; and P1.00 for lodging.
Ponseca — during the period involved — did not leave Manila. Therefore, he spent nothing for meals and
lodging outside of Manila. Because he spent nothing, there is nothing to be reimbursed. Since per diems
are in the nature of reimbursement, Ponseca should not be entitled to per diems. For the foregoing
reasons, the order of February 16, 1965, and the resolution of May 22, 1965, both of the Court of
Industrial Relations, in its Case No. 2002-ULP, entitled "National Chemical Industries Workers Union-
PAFLU (Lexal Laboratories Chapter), Complainant, versus Lexal Laboratories and Jose Angeles, its
Manager, Respondents", are hereby modified; and Judgment is hereby rendered ordering petitioner Lexal
Laboratories to pay Guillermo Ponseca, by way of net backpay, the sum of P2,697.00. No costs. So
ordered.

2011-0128
G.R. No. L-59743
May 31 1982
NATIONAL FEDERATION OF SUGAR WORKERS (NFSW), petitioner, vs.ETHELWOLDO R.
OVEJERA, CENTRAL AZUCARERA DE LA CARLOTA (CAC), COL. ROGELIO DEINLA, as
Provincial Commander, 3311st P.C. Command, Negros Occidental, respondents.
FACTS: In 1981, NFSW struck allegedly to compel the payment of the 13th month pay under PD 851, in
addition to the Christmas, milling and amelioration bonuses being enjoyed by CAC workers. The decision
having become final and executory entry of judgment was made. After the Marcopper decision had
become final, NFSW renewed its demand that CAC give the 13th month pay. CAC refused, NFSW filed
with the Ministry of Labor and Employment (MOLE) Regional Office in Bacolod City a notice to strike
based on non-payment of the 13th month pay. Six days after, NFSW struck.
ISSUE: Whether or not under Presidential Decree 851 (13th Month Pay Law), CAC is obliged to give its
workers a 13th month salary in addition to Christmas, milling and amelioration bonuses, the aggregate of
which admittedly exceeds by far the disputed 13th month pay?
HELD: CAC is obliged to give its workers a 13th month salary in addition to Christmas, milling and
amelioration bonuses stipulated in a collective bargaining agreement amounting to more than a month's
pay. When this agreement was forged on November 30,1981, the original decision dismissing the petition
in the aforecited Marcopper case had already been promulgated by this Court. On the votes of only 7
Justices, including the distinguished Chief Justice, the petition of Marcopper Mining Corp. seeking to
annul the decision of Labor Deputy Minister Amado Inciong granting a 13th month pay to Marcopper
employees (in addition to mid- year and Christmas bonuses under a CBA) had been dismissed. But a
motion for reconsideration filed by Marcopper was pending as of November 30, 1981. In December 1981,
the original decision was affirmed when this Court finally denied the motion for reconsideration. But the
resolution of denial was supported by the votes of only 5 Justices. The Marcopper decision is therefore a
Court decision but without the necessary eight votes to be doctrinal. This being so, it cannot be said that
the Marcopper decision "clearly held" that "the employer is liable to pay a 13th month pay separate and
distinct from the bonuses already given," within the meaning of the NFSW-CAC compromise agreement.
At any rate, in view of the rulings made herein, NFSW cannot insist on its claim that its members are
entitled to a 13th month pay in addition to the bonuses already paid by CAC. WHEREFORE, the petition
is dismissed for lack of merit. No costs.

2011-0128
ELIMINATION OR DIMINUTION OF BENEFITS (EXEPTIONS)
G.R. No. 101761.
March 24, 1993.
NATIONAL SUGAR REFINERIES CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and NBSR SUPERVISORY UNION, (PACIWU) TUCP, respondents.
FACTS: Petitioner, a corporation controlled by the Government. The Batangas refinery was privatized in
1992. Private respondent union represents the former supervisors of the NASUREFCO Batangas Sugar.
In 1988, petitioner implemented a Job Evaluation (JE) Program affecting all employees, from rank-and-file
to department heads. The JE Program was designed to rationalize the duties and functions of all
positions. They used to be paid overtime, rest day and holiday pay pursuant to the provisions of Articles
87, 93 and 94 of the Labor Code as amended. In 1990, petitioner NASUREFCO recognized herein
respondent union, which was organized pursuant to Republic Act NO. 6715 allowing supervisory
employees to form their own unions, as the bargaining representative of all the supervisory employees at
the NASUREFCO Batangas Sugar Refinery. Two years after the implementation of the JE Program, in
1990, the members of herein respondent union filed a complainant with the executive labor arbiter for
non-payment of overtime, rest day and holiday pay allegedly in violation of Article 100 of the Labor Code.
Respondent National Sugar refineries Corporation is hereby directed to pay the said penalties. On
appeal, in a decision promulgated In 1991 by its Third Division, respondent National Labor Relations
Commission (NLRC) affirmed the decision of the labor arbiter on the ground that the members of
respondent union are not managerial employees, therefore, they are entitled to overtime, rest day and
holiday pay.
ISSUE: Whether or not the members of respondent union are entitled to overtime, rest day and holiday
pay?
Whether or not supervisory employees, as defined in Article 212 (m), Book V of the Labor Code,
should be considered as officers or members of the managerial staff under Article 82, Book III of the
same Code, and hence are not entitled to overtime rest day and holiday pay?
HELD: The distinction made by respondent NLRC on the basis of whether or not the union members are
managerial employees, to determine the latter's entitlement to the questioned benefits, is misplaced and
inappropriate. It is admitted that these union members are supervisory employees and this is one
instance where the nomenclatures or titles of their jobs conform with the nature of their functions. Hence,
to distinguish them from a managerial employee, as defined either under Articles 82 or 212 (m) of the
Labor Code, is puerile and in efficacious. The controversy actually involved here seeks a determination of
whether or not these supervisory employees ought to be considered as officers or members of the
managerial staff. The distinction, therefore, should have been made along that line and its corresponding
conceptual criteria.Promotion of its employees is one of the jurisprudentially-recognized exclusive
prerogatives of management, provided it is done in good faith. In the case at bar, private respondent
union has miserably failed to convince this Court that the petitioner acted implementing the JE Program.
There is no showing that the JE Program was intended to circumvent the law and deprive the members of
respondent union of the benefits they used to receive.
WHEREFORE, the impugned decision and resolution of respondent National Labor Relations
Commission promulgated on July 19, 1991 and August 30, 1991, respectively, are hereby ANNULLED
and SET ASIDE for having been rendered and adopted with grave abuse of discretion, and the basic
complaint of private respondent union is DISMISSED.

2011-0128
G.R. No. 114280
July 26, 1996
PHILIPPINE AIRLINES, INC. (PAL), petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION
and AIRLINE PILOTS ASSOCIATION OF THE PHILIPPINES (ALPAP), respondents.
FACTS: Refusing to pay its pilots their thirteenth month pay for unfair labor practice was filed against
Philippine Airlines by the Airline Pilots Association of the Philippines. The Labor Arbiter ruled in favor of
ALPAP and ordered PAL to pay its pilots belonging to ALPAP their thirteenth month pay from 1988 to
1990. Disputing PAL's contention, ALPAP argued that the payment of the year-end bonus cannot be
equated within the thirteenth month pay since the payment of the former is conditional in character and
not fixed in its amount, while that of the thirteenth month pay is mandatory in character and definite in its.
Both parties appealed to the National Labor Relations Commission which in turn affirmed with
modifications the decision of the Labor Arbiter.
ISSUE: Whether or not PAL can claim the exception provided under the law by equation the year-end
bonus with the payment of the thirteenth month pay deserves a very close scrutiny in this case?
HELD: It appears that the rationale for the grant of the year-end bonus by PAL coincides with the nature
of the bonus which can be equated with the payment of a thirteenth month pay. However, notwithstanding
the above disquisitions, the peculiar circumstances in this case wavers against the outright application of
the rule preventing the imposition of a double burden against the employer who is already paying the
equivalent of the thirteenth month pay, and hereby exempt PAL from granting both benefits of a year-end
bonus and a thirteenth month pay to its pilots. The inclusion of a provision for the continued payment of
the year-end bonus in the 1988-1991 CBA of ALPAP and PAL belies the latter contention that the grant of
the year-end bonus was intended to be credited as compliance with the mandate to pay the pilots a
thirteenth month pay.As early as said date, PAL was therefore fully aware that it was legally obliged to
grant all its rank and file employees a thirteenth month pay. Moreover, there is no rational basis for
withholding from the members of ALPAP the benefit of a year-end bonus is addition to the thirteenth
month pay, while the same being granted to the other rank and field employees of PAL. WHEREFORE,
finding no merit in the petitions, the same are hereby DENIED and the Resolutions of public respondent
NLRC promulgated on November 23, 1993 and February 28, 1994 are hereby AFFIRMED.

2011-0128
G.R. No. 110068
November 11, 1993
PHILIPPINE DUPLICATORS, INC., petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION and
PHILIPPINE DUPLICATORS EMPLOYEES UNION - TUPAS, respondents.
FACTS: Petitioner Philippine Duplicators, Inc. is a domestic corporation engaged in the distribution of
foreign-made copying machines and related consumables. In petitioner's employ are salesmen who are
paid a fixed or guaranteed salary plus commissions, which commissions are computed on the selling
price of the duplicating machines sold by the respective salesmen. Private respondent union, for and on
behalf of its member-salesmen, asked petitioner corporation for payment of 13th month pay computed on
the basis of the salesmen's fixed or guaranteed wages plus commissions. Petitioner corporation refused
the union's request. Respondent, union thereupon instituted a complaint against petitioner corporation for
payment of the demand of its salesmen-members for 13th month pay. After submission of the parties'
respective position papers, the Labor Arbiter rendered a decision dated 24 October 1989 directing
petitioner corporation to pay 13th month pay to its salesmen computed in accordance with the
requirements of Explanatory Bulletin No. 86-12.
ISSUE: Whether or not the appropriate mode of computation of the 13th month pay of the employees
who receive a fixed or guaranteed salary plus sales commissions?
HELD: In the instant case, there is no question that the sales commissions earned by salesmen who
make or close a sale of duplicating machines distributed by petitioner corporation constitute part of the
compensation or remuneration paid to salesmen for serving as salesmen, and hence as part of the
"wage" or "salary" of petitioner's salesmen. Indeed, it appears that petitioner pays its salesmen a small
fixed or guaranteed wage; the greater part of the salesmen's wages or salaries being composed of the
sales or incentive commissions earned on actual sales closed by them. To recapitulate, the 13th month
pay of employees paid a fixed or guaranteed wage plus sales commission must be equivalent to one-
twelfth (1/12) of the total earnings (fixed or guaranteed wage-cum-sales commissions) during the
calendar year. Considering that petitioner has excluded from the computation of the 13th month pay the
sales commissions earned by its individual salesmen, we believe and so hold that petitioner must be held
liable to pay for the deficiency. WHEREFORE, petitioner failed to show any grave abuse of discretion on
the part of the National Labor Relations Commission in rendering its decision dated 17 November 1992,
the petition for Certiorari is hereby DISMISSED for lack of merit. Costs against the petitioner.

2011-0128
G.R. No. L-49774
February 24, 1981
SAN MIGUEL CORPORATION (CAGAYAN COCA-COLA PLANT), petitioner, vs.Hon. AMADO G.
INCIONG, Deputy Minister of Labor and CAGAYAN COCA-COLA FREE WORKERS UNION,
respondents.
FACTS: In 1977, Coca-Cola Free Workers Union, private respondent herein, filed a complaint against
San Miguel Corporation, petitioner, alleging failure or refusal of the latter to include in the computation of
13th- month pay such items as sick, vacation or maternity leaves, premium for work done on rest days
and special holidays, including pay for regular holidays and night differentials. An Order 3 dated February
15, 1977 was issued by Regional Office No. X where the complaint was filed requiring herein petitioner
San Miguel Corporation to pay the difference of whatever earnings and the amount actually received as
13th month pay excluding overtime premium and emergency cost of living allowance. Herein petitioner
appealed from that Order to the Minister of Labor in whose behalf the Deputy Minister of Labor Amado G.
Inciong issued an Order affirming the Order of Regional Office No. X and dismissing the appeal for lack of
merit. Petitioner's motion for reconsideration having been denied, it filed the instant petition.
ISSUE: Whether or not in the computation of the 13th-month pay under Presidential Decree 851,
payments for sick, vacation or maternity leaves, premium for work done on rest days and special
holidays, including pay for regular holidays and night differentials should be considered?
HELD: The all-embracing phrase "earnings and other remuneration" which are deemed not part of the
basic salary includes within its meaning payments for sick, vacation, or maternity leaves. Maternity
premium for works performed on rest days and special holidays pays for regular holidays and night
differentials. As such they are deemed not part of the basic salary and shall not be considered in the
computation of the 13th-month they, were not so excluded, it is hard to find any "earnings and other
remunerations" expressly excluded in the computation of the 13th-month pay. Then the exclusionary
provision would prove to be Idle and with no purpose. It is likewise clear that premium for special holiday
which is at least 30% of the regular wage is an additional compensation other than and added to the
regular wage or basic salary. For similar reason it shall not be considered in the computation of the 13th-
month pay.WHEREFORE, the Orders of the Deputy Labor Minister dated June 7, 1978 and December
19, 1978 are hereby set aside and a new one entered as above indicated. The Temporary Restraining
Order issued by this Court on February 14, 1979 is hereby made permanent. No pronouncement as to
costs.

Alexander O. Guevarra, Jr.

2011-0128
G.R. No. 88168
August 30, 1990
TRADERS ROYAL BANK, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION &
TRADERS ROYAL BANK EMPLOYEES UNION, respondents.
GRIÑO-AQUINO, J.
FACTS: In 1986, the Union, filed a letter-complaint against TRB claiming that first; the management of
TRB per memo paid the employees their HOLIDAY PAY, but has withheld from the Union the basis of
their computation. Second, the computation in question has allegedly decreased the daily salary rate of
the employees. Third, the diminution of benefits being enjoyed by the employees since time immemorial
mid-year bonus, from two (2) months gross pay to two (2) months basic and year-end bonus from three
(3) months gross to only two (2) months.. Fourth, the refusal by management to recall active union
members from the branches which were being transferred without prior notice, solely at the instance of
the branch manager. IN its answer to the union's complaint, TRB pointed out that the NLRC, not the
Bureau of Labor Relations, had jurisdiction over the money claims of the employees. NLRC rendered a
decision in favor of the employees. A motion for reconsideration was filed by TRB but it was denied.
Hence, this petition for certiorari. There is merit in the petitioner's contention that the NLRC gravely
abused its discretion in ordering it to pay mid-year/year-end bonus differential for 1986 to its employees.
ISSUE: Whether or not the respondents are guilty of diminution of benefits?
HELD: A bonus is "a gratuity or act of liberality of the giver which the recipient has no right to demand as
a matter of right", "It is something given in addition to what is ordinarily received by or strictly due the
recipient." The granting of a bonus is basically a management prerogative which cannot be forced upon
the employer "who may not be obliged to assume the onerous burden of granting bonuses or other
benefits aside from the employee's basic salaries or wages". It is clear from the above-cited rulings that
the petitioner may not be obliged to pay bonuses to its employees.
Private respondent's contention, that the decrease in the midyear and year-end bonuses constituted a
diminution of the employees' salaries, is not correct, for bonuses are not part of labor standards in the
same class as salaries, cost of living allowances, holiday pay, and leave benefits, which are provided by
the Labor Code.
WHEREFORE, the petition for certiorari is granted. The decision of the National Labor Relations
Commission is modified by deleting the award of bonus differentials to the employees for 1986. In other
respects, the decision is affirmed. Costs against the respondent union.

2011-0128
G.R. No. L-60337
August 21, 1987
UNIVERSAL CORN PRODUCTS (A DIVISION OF UNIVERSAL ROBINA CORPORATION), petitioner,
vs.THE NATIONAL LABOR RELATIONS COMMISSION
FACTS: In 1972, the petitioner and the Universal Corn Products Workers Union entered into a collective
bargaining agreement. The COMPANY agrees to grant all regular workers within the bargaining unit with
at least one (1) year of continuous service, a Christmas bonus equivalent to the regular wages for seven
(7) working days.The agreement had a duration of three years. On account however of differences
between the parties with respect to certain economic issues, the collective bargaining agreement in
question expired without being renewed. In 1979, the parties entered into an "addendum" stipulating
certain wage increases covering the years from 1974 to 1977. Simultaneously, they entered into a
collective bargaining agreement for the years from 1979 to 1981. Like the "addendum," the new collective
bargaining agreement did not refer to the "Christmas bonus" theretofore paid but dealt only with salary
adjustments. According to the petitioner, the new agreements deliberately excluded the grant of
Christmas bonus with the enactment of Presidential Decree No. 851. It further claims that since 1975, it
had been paying its employees 13th-month pay pursuant to the Decree. For failure of the petitioner to pay
the seven-day Christmas bonus for 1975 to 1978 inclusive, in accordance with the 1972 CBA, the union
went to the labor arbiter for relief. In his decision, the labor arbiter ruled that the payment of the 13th
month pay precluded the payment of further Christmas bonus. The union appealed to NLRC. The NLRC
set aside the decision of the labor arbiter appealed from and entered another one, "directing respondent
company [now the petitioner to pay the members concerned of complainants union their 7-day wage
bonus in accordance with the 1972 CBA from 1975 to 1978.
ISSUE: Whether or not the Christmas bonus can be considered as 13th month pay?
HELD: The collective bargaining agreement accords a reward, in this case, for loyalty, to certain
employees. This is evident from the stipulation granting the bonus in question to workers "with at least
one (1) year of continuous service is a purpose not found in P.D. 851. It is claimed, however, that as a
consequence of the impasse between the parties beginning 1974 through 1979, no collective bargaining
agreement was in force during those intervening years. Hence, there is allegedly no basis for the money
award granted by the respondent labor body. The fact, therefore, that the new agreements are silent on
the seven-day bonus demanded should not preclude the private respondents' claims thereon. The 1972
agreement is basis enough for such claims for the whole writing is instinct with an obligation, imperfectly
express. WHEREFORE, premises considered, the petition is hereby DISMISSED. The Decision of the
public respondent NLRC promulgated on February 11, 1982, and its Resolution dated March 23, 1982,
are hereby AFFIRMED. The temporary restraining order issued on May 19, 1982 is LIFTED.

Marc Aerone Paul P. Imperio

2011-0147
Case Title: Rolando Y. Tan vs Leovigildo Lagarama

G.R. No.: 151228
Petitioner: Rolando Y. Tan
Respondent: LEOVIGILDO LAGRAMA and THE HONORABLE COURT OF APPEALS
Ponente: Mendoza
Facts:
The Respondent works as a painter, making ad billboards and murals for the motion pictures
shown at the Empress, Supreme and Crown Theaters, the Petitioner was the general manager of these
theaters. The petitioner denied that the respondent was his employee, he asserted that the respondent
was an independent contractor who did his work according to his methods and that he was paid on a
fixed piece-work basis.
Issue:
Was the contention of the petitioner tenable?
Held:
The court found no merits on the contention of the petitioner. Payment by result is a method of
compensation and does not define the essence of employee-employer relationship. It is a method of
computing compensation, not as basis for determining the existence or absence of employer-employee
relationship.

Case Title: Avelino Lambo v NLRC and JC Tailor Shop

GR No.: 111042
Petitioner: AVELINO LAMBO and VICENTE BELOCURA
Respondent: NATIONAL LABOR RELATIONS COMMISSION and J.C. TAILOR SHOP
and/or JOHNNY CO
Ponente: Mendoza
Facts:
Petitioners Avelino Lambo and Vicente Belocura were employed as tailors by private respondents
J.C. Taylor Shop on September 10, 1985 and March 3, 1985 respectively. They worked from 8:00 am to
7:00 pm daily including Sundays and holidays. They are paid in a piece-work basis, according to the style
of suits they made. Regardless of the number of pieces they finished in a day they are given a daily pay
of at least 64.00php
Issue:
Are the petitioners considered Regular Employees even if they are under piece-work basis?
Held:
Yes. The court declared that they are regular employees. The mere fact that they were paid on a
Piece-rate basis does not negate their status as a regular employees of the private respondents. Because
the private respondent exercised control over the work of petitioners, as tailors working in the company’s
premises from 8:00 am to 7:00 pm. The court also distinguished the two categories of employees paid by
result, first are those whose time and performance are supervised by the employer and second are those
whose time and performance are unsupervised.
Piece Rate Workers

Case Title: Makati Haberdashery, Inc. v National Labor Relations Commission
GR No.: 83380-81
Petitioner: MAKATI HABERDASHERY, INC., JORGE LEDESMA and CECILIO G.
INOCENCIO
Respondent: NATIONAL LABOR RELATIONS COMMISSION, CEFERINA J. DIOSANA
(Labor Arbiter, Department of Labor and Employment, National Capital Region),
SANDIGAN NG MANGGAGAWANG PILIPINO (SANDIGAN)-TUCP and its
members, JACINTO GARCIANO, ALFREDO C. BASCO, VICTORIO Y.
LAURETO, ESTER NARVAEZ, EUGENIO L. ROBLES, BELEN N. VISTA,
ALEJANDRO A. ESTRABO, VEVENCIO TIRO, CASIMIRO ZAPATA, GLORIA
ESTRABO, LEONORA MENDOZA, MACARIA G. DIMPAS, MERILYN A. VIRAY,
LILY OPINA, JANET SANGDANG, JOSEFINA ALCOCEBA and MARIA
ANGELES
Ponente: Fernan
Facts:
The individual complainants have been working for petitioner Makati Haberdashery, Inc. as
tailors, seamstress, sewers, basteros and plantsadoras. They are paid on a piece-rate basis. In addition
to their piece-rate, they are given a daily allowance of three pesos, provided they report for work before
9:30 am daily. They are also required to work from 9:30 am up to 6:00 pm or 7:00 pm from Monday to
Saturday and during peak periods even on Sundays and holidays.
The respondents claim that they are under paid, deprived of their overtime pay, holiday pay,
service incentive pay, 13th month pay, and benefits provided for under Wage Orders Nos. 1,2,3,4 and 5.o
To counter the claims the petitioner denies the presence of Employer-Employee Relationship.
Issue/s:
1. Were the respondents entitled to their claims?
2. Does the Employer-Employee Relationship Exist?
Held:
The essential Employer-Employee Relationship exist, the power of control by the petitioner is
present. On the other issue, the respondents are entitled to the benefits they are claiming. Except service
incentive pay because as piece-rate workers being paid at a fixed amount for performing work
irrespective of time consumed in the performance thereof, they fall under one of the exceptions stated in
Implementing Regulations, book 3, Labor Code.

Case Title: Labor Congress of the Philippines v NLRC, Empire Food Products et al.
GR No.: 123938
Date: May 21, 1998
Petitioner: LABOR CONGRESS OF THE PHILIPPINES (LCP) for and in behalf of its
members, ANA MARIE OCAMPO, MARY INTAL, ANNABEL CARESO,
MARLENE MELQIADES, IRENE JACINTO, NANCY GARCIA, IMELDA
SARMIENTO, LENITA VIRAY
Respondent: NATIONAL LABOR RELATIONS COMMISSION, EMPIRE FOOD PRODUCTS,
its Proprietor/President & Manager, MR. GONZALO KEHYENG and MRS.
EVELYN KEHYENG
Ponente: Davide Jr.
Facts:
The 99 petitioners in this case were rank-and-file employees of Empire Food Products. They filed
complaints for money claims and violations of Labor Standards Laws. They are paid on a piece-rate
basis, working as repackers, they were paid a certain amount for every thousand pieces of cheese curls
and other products repacked. They are seeking for backwages and other statutory benefits from the
respondent.
Issue:
What are the statutory benefits granted to the petitioner as piece-rate employees?
Held:
The court declared that the petitioners are entitled to;
Holiday Pay
Premium Pay
13th Month Pay
Service Incentive Leave
The court laid down 3 factors that led them to rule, granting the petitioners’ claim. That they were
regular employees, although piece-rate workers, first is that their task as repackers of food was necessary
in the usual business of the private respondent, second the petitioners worked throughout the year, and
third, the length of time that petitioners worked for the private respondent.

Case Title: Bernardo Jimenez v NLRC, Pedro Juanatas

GR No.: 116960
Date: April 2, 1996
Petitioner: BERNARDO JIMENEZ and JOSE JIMENEZ, as Operators of JJ's TRUCKING
Respondent: NATIONAL LABOR RELATIONS COMMISSION, PEDRO JUANATAS and
JUANATAS
Ponente: Regalado
Facts:
On June 29, 1990, herein private respondent Pedro and Fredelito Juanatas, father and son, filed
a claim for unpaid wages/commissions, separation pay and damages against JJ's Trucking and/or Dr.
Bernardo Jimenez. Said respondents, as complainants therein, alleged that in December, 1987, they
were hired by herein petitioner Bernardo Jimenez as driver/mechanic and helper, respectively, in his
trucking firm, JJ Trucking. They were assigned to a ten-wheeler truck to haul soft drinks of Coca-Cola
Bottling Company and paid on commission basis, initially fixed at 17% but later increased to 20% in 1988.
Private respondents further alleged that for the years 1988 and 1989 they received only a partial
commission of P84,000.00 from petitioners' total gross income of almost P1,000,000.00 for the said two
years. Consequently, with their commission for that period being computed at 20% of said income, there
was an unpaid balance to them of P106,211.86; that until March, 1990 when their services were illegally
terminated, they were further entitled to P15,050.309 which, excluding the partial payment of P7,000.00,
added up to a grand total of P114,261.86 due and payable to them; and that petitioners' refusal to pay
their aforestated commission was a ploy to unjustly terminate them.
Issue:
Who has the burden of proof to ascertain payment of wages?
Held:
Where the employee alleges non-payment of wages, the employer has the burden to prove
payment. As a general rule, one who pleads payment has the burden of proving it. Even where the
plaintiff must allege non-payment, the general rule is that the burden rests on the defendant to prove
payment, rather than on the plaintiff to prove non-payment. The debtor has the burden of showing with
legal certainty that the obligation has been discharged by payment.

Case Title: Virginia G. Neri v NLRC, Far East Bank & Trust Company and Building Care
Corporation
GR No.: 97008-09
Date: July 23, 1993
Petitioner: VIRGINIA G. NERI and JOSE CABELIN
Respondent: NATIONAL LABOR RELATIONS COMMISSION FAR EAST BANK & TRUST
COMPANY (FEBTC) and BUILDING CARE CORPORATION
Ponente: Bellosillo
Facts:
Respondents are sued by two employees of Building Care Corporation, which provides janitorial
and other specific services to various firms, to compel Far Bast Bank and Trust Company to recognize
them as its regular employees and be paid the same wages which its employees receive.
Building Care Corporation (BCC, for brevity), in the proceedings, established that it had
substantial capitalization of P1 Million or a stockholders equity of P1.5 Million. Thus the Labor Arbiter
ruled that BCC was only job contracting and that consequently its employees were not employees of Far
East Bank and Trust Company (FEBTC, for brevity). On appeal, this factual finding was affirmed by
respondent National Labor Relations Commission (NLRC, for brevity). Nevertheless, petitioners insist
before us that BCC is engaged in "labor-only" contracting hence, they conclude, they are employees of
respondent FEBTC.
Issue:
Was claim of the petitioner that BCC is engaged in Labor-only contracting?
Held:
The court is on the contrary, the BCC is not engaged in Labor-only contracting. BCC cannot be
considered a labor-only contractor because it has substantial capital. The court also stated to factors that
will determine labor-only contracting first is the person supplying workers does not have substantial
capital the second is the workers recruited and placed by such person are performing activities which are
directly related to the principal business of the employer.

Case Title: Manila Waters Company Inc. vs Herminio D. Pena
GR No.: 158255
Date: July 8, 2004
Petitioner: MANILA WATER COMPANY, INC.
Respondent: HERMINIO D. PENA, ESTEBAN B. BALDOZA, JORGE D. CANONIGO, JR., IKE
S. DELFIN, RIZALINO M. INTAL, REY T. MANLEGRO, JOHN L. MARTEJA,
MARLON B. MORADA, ALLAN D. ESPINA, EDUARDO ONG, AGNESIO D.
QUEBRAL, EDMUNDO B. VICTA, VICTOR C. ZAFARALLA, EDILBERTO C.
PINGUL and FEDERICO M. RIVERA
Ponente: Ynares-Santiago
Facts:
When MWSS contracted with Manila Water Co. to manage the water distribution system in Metro
Manila East Zone, the MWC absorbed some MWSS employee. But 121 contractual collectors of MWSS
were not absorbed but retained on contractual basis only. A few months later these collectors formed the
Association Collectors Group Inc. (ACGI) which MWC contracted to collect water charges. When the
contract was terminated after fourteen months, the collectors filed a complaint of illegal dismissal against
MWC which, for its part, argued that the employer was ACGI not MWC.
Issue:
Is Association Collectors Group Inc. a legitimate contractor?
Held:
No. The court declared that it is a Labor-only contractor and the collectors have remained
employees of MWC because the latter has not relinquished control over them. The court noted that, first,
ACGI had no substantial capital and secondly, the work was directly related to the principal business or
operation of MWC; and lastly ACGI did not carry on an independent business or undertake the
performance of its service contract according to its own manner and method, free from MWC’s control
supervision and MWC required the workers to report daily and their attendance was strictly checked by
MWC. Considering the facts, the court concluded that ACGI was not an independent contractor.

Case Title: San Miguel Corporation v Aballa et al.

GR No.: 149011
Date: June 28, 2005
Petitioner: San Miguel Corporation
Respondent: Aballa et al.
Ponente: Carpio-Morales
Facts:
Petitioner San Miguel Corporation (SMC) and Sunflower Multi-Purpose Cooperative (Sunflower)
entered into a one-year Contract of Service and such contract is renewed on a monthly basis until
terminated. Pursuant to this, respondent Prospero Aballa et al. rendered services to SMC. After one year
of rendering service, Aballa et al., filed a complaint before National Labor Relations Commission (NLRC)
praying that they be declared as regular employees of SMC. On the other hand, SMC filed before the
Department of Labor and Employment (DOLE) a Notice of Closure due to serious business losses.
Hence, the labor arbiter dismissed the complaint and ruled in favor of SMC. Aballa et al. then appealed
before the NLRC. The NLRC dismissed the appeal finding that Sunflower is an independent contractor.
On appeal, the Court of Appeals reversed NLRC·s decision on the ground that the agreement between
SMC and Sunflower showed a clear intent to abstain from establishing an employer-employee
relationship.
Issue:
Whether or not Aballa et al. are employees of SMC
Held:
The test to determine the existence of independent contractorship is whether one claiming to be
an independent contractor has contracted to do the work according to his own methods and without
being subject to the control of the employer, except only as to the results of the work. In legitimate labor
contracting, the law creates an employer-employee relationship for a limited purpose, i.e.,to ensure that
the employees are paid their wages. The principal employer becomes jointly and severally liable with the
job contractor, only for the payment of the employees· wages whenever the contractor fails to pay the
same. Other than that, the principal employer is not responsible for any claim made by the employees. 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 Contract of Services between
SMC and Sunflower shows that the parties clearly disavowed the existence of an employer-employee
relationship between SMC and private respondents. The language of a contract is not, however,
determinative of the parties· relationship; rather it is the totality of the facts and
surrounding circumstances of the case. A party cannot dictate, by the mere expedient of a unilateral
declaration in a contract, the character of its business, i.e., whether as labor-only contractor or job
contractor, it being crucial that its character be measured in terms of and determined by the criteria set by
statute. What appears is that Sunflower does not have substantial capitalization or investment in the form
of tools, equipment, machineries, work premises and other materials to qualify it as an independent
contractor. On the other hand, it is gathered that the lot, building, machineries and all other working tools
utilized by Aballa et al.in carrying out their tasks were owned and provided by SMC.

And from the job description provided by SMC itself, the work assigned to Aballa et al. was directly
related to the aquaculture operations of SMC. As for janitorial and messengerial services, that they are
considered directly related to the principal business of the employer has been jurisprudentially
recognized. Furthermore, Sunflower did not carry on an independent business or undertake the
performance of its service contract according to its own manner and method, free from the control and
supervision of its principal, SMC, its apparent role having been merely to recruit persons to work for
SMC. All the foregoing considerations affirm by more than substantial evidence the existence of an
employer-employee relationship between SMC and Aballa et al. Since Aballa et al. who were engaged in
shrimp processing performed tasks usually necessary or desirable in the aquaculture business of SMC,
they should be deemed regular employees of the latter and as such are entitled to all the benefits and
rights appurtenant to regular employment. They should thus be awarded differential pay corresponding to
the difference between the wages and benefits given them and those accorded SMC’s other regular
employees.

Case Title: Philippine Banks of Communication v NLRC

GR No.: L-66598
Petitioner: PHILIPPINE BANK OF COMMUNICATIONS
Respondent: THE NATIONAL LABOR RELATIONS COMMISSION, HONORABLE ARBITER
TEODORICO L. DOGELIO and RICARDO ORPIADA
Ponente: Feliciano
Facts:
Petitioner Philippine Bank of Communications and the Corporate Executive Search Inc. (CESI)
entered into a letter agreement dated January 1976 under which (CESI) undertook to provide
"Tempo[rary] Services" to petitioner Consisting of the "temporary services" of eleven (11) messengers.
The contract period is described as being "from January 1976—." The petitioner in truth undertook to pay
a "daily service rate of P18, " on a per person basis.
Attached to the letter agreement was a "List of Messengers assigned at Philippine Bank of
Communications" which list included, as item No. 5 thereof, the name of private respondent Ricardo
Orpiada. He rendered messengerial services to the bank within its premise, together with others doing
similar job. In or about October 1976, the bank requested CESI to withdraw Opriada’s assignment
because his service “were no longer needed.” He filed a complaint against the bank for illegal dismissal
and failure to pay the 13th month pay.
During the arbitration the Bank impleaded CESI as additional respondent. Both the bank and
CESI maintained that CESI (and not the bank) was Opriada’s employer.
Issue:
Whether or not an Employer-Employee relationship existed between the bank and private
respondent Opriada.
Held:
The Court held that, in the circumstances 'instances of this case, (CESI) was engaged in "labor-
only" or attracting vis-a-vis the petitioner and in respect c Ricardo Orpiada, and that consequently, the
petitioner bank is liable to Orpiada as if Orpiada had been directly, employed not only by (CESI) but also
by the bank. It may well be that the bank may in turn proceed against (CESI) to obtain reimbursement of,
or some contribution to, the amounts which the bank will have to pay to Orpiada; but this it is not
necessary to determine here.

Case Title: Tabas et al vs California Manufacturing Company

GR No.: L-80680
Petitioner: DANILO B. TABAS, EDUARDO BONDOC, RAMON M. BRIONES, EDUARDO
R. ERISPE, JOEL MADRIAGA, ARTHUR M. ESPINO, AMARO BONA,
FERDINAND CRUZ, FEDERICO A. BELITA, ROBERTO P. ISLES, ELMER
ARMADA, EDUARDO UDOG, PETER TIANSING, MIGUELITA QUIAMBOA,
NOMER MATAGA, VIOLY ESTEBAN and LYDIA ORTEGA
Respondent: CALIFORNIA MANUFACTURING COMPANY, INC., LILY-VICTORIA A.
AZARCON, NATIONAL LABOR RELATIONS COMMISSION, and HON.
EMERSON C. TUMANON
Ponente: Sarmiento
Facts:
Petitioners filed a petition in the NLRC for reinstatement and payment of various benefits against
California Manufacturing Company. The respondent company then denied the existence of an employer-
employee relationship between the company and the petitioners.
Pursuant to a manpower supply agreement, it appears that the petitioners prior their involvement
with California Manufacturing Company were employees of Livi Manpower service, an independent
contractor, which assigned them to work as "promotional merchandisers." The agreement provides that:
California "has no control or supervisions whatsoever over Livi's workers with respect to how they
accomplish their work or perform Californias obligation" It was further expressly stipulated that the
assignment of workers to California shall be on a "seasonal and contractual basis"; that “cost of living
allowance and the 10 legal holidays will be charged directly to California at cost "; and that "payroll for the
preceeding week [shall] be delivered by Livi at California's premises."
Issue:
Whether the petitioners are California's or Livi's employees?
Held:
There is no doubt that in the case at bar, Livi performs "manpower services", meaning to say, it contracts
out labor in favor of clients. We hold that it is one notwithstanding its vehement claims to the contrary, and
notwithstanding the provision of the contract that it is "an independent contractor." The nature of one's
business is not determined by self-serving appellations one attaches thereto but by the tests provided by
statute and prevailing case law. The bare fact that Livi maintains a separate line of business does not
extinguish the equal fact that it has provided California with workers to pursue the latter's own business.
In this connection, we do not agree that the petitioners had been made to perform activities 'which are not
directly related to the general business of manufacturing," California's purported "principal operation
activity. " The petitioner's had been charged with "merchandizing promotion or sale of the products of
[California] in the different sales outlets in Metro Manila including task and occasional price tagging," an
activity that is doubtless, an integral part of the manufacturing business. It is not, then, as if Livi had
served as its (California's) promotions or sales arm or agent, or otherwise, rendered a piece of work it
(California) could not have itself done; Livi, as a placement agency, had simply supplied it with the
manpower necessary to carry out its (California's) merchandising activities, using its (California's)
premises and equipment.
Neither Livi nor California can therefore escape liability, that is, assuming one exists.
Petition granted

INDEPENDENT CONTRACTOR
Case Title: Mafinco Trading Corp. vs Ople

GR No.: L-37790
Petitioner: MAFINCO TRADING CORPORATION
Respondent: THE HON. BLAS F. OPLE, in his capacity as Secretary of Labor, The NATIONAL
LABOR RELATIONS COMMISSION RODRIGO REPOMANTA and REY
MORALDE
Ponente: Aquino
Facts:
Cosmos Aerated Water Factory, a firm based at Malabon, Rizal, appointed petitionerMafinco as
its sole distributor of Cosmos soft drinks in Manila.Rodrigo Repomanta and Mafinco executed a peddling
contract whereby Repomanta agreed to buy and sell Cosmos soft drinks. Rey Moralde entered into a
similar contract. Months later, Mafinco terminated the peddling contract with Repomanta and Moralde.
Consequently, Repomanta and Moralde, through their union, filed a compliant with the NLRC, charging
the general manager of Mafinco for illegally dismissing them. Mafinco filed a motion to dismiss the
complaint on the ground that the NLRC had no jurisdiction because Repomanta and Moralde were not its
employees but were independent contractors. It stressed that there was termination of the contract not a
dismissal of an employee.
Issue:
Whether or not there exist an employer-employee relationship between petitioner Mafinco and
private respondents Repomanta and Moralde.
Held:
The Supreme Court held that under the peddling contracts, Repomanta and Moralde werenot
employees of Mafinco but were independent contractors as found by the NLC and its fact finder and by
the committee appointed by the Secretary of Labor to look into the status of Cosmos and Mafinco
peddlers. A contract whereby one engages to purchase and sell soft drinks on trucks supplied by the
manufacturer but providing that the other party (peddler) shall have the right to employ his own workers,
shall post a bond to protect the manufacturer against losses, shall be responsible for damages caused to
third persons, shall obtain the necessary licenses and permits and bear the expenses incurred in the sale
of the soft drinks is not a contract of employment.

Case Title: INSULAR LIFE INSURANCE CO., LTD. V NLRC

GR No.: 84484
Petitioner: INSULAR LIFE INSURANCE CO., LTD.
Respondent: NATIONAL LABOR RELATIONS COMMISSION and MELECIO BASIAO
Ponente: Narvasa
Facts:
Insular Life (company) and Basiao entered into a contract by which Basiao was authorized to solicit for
insurance in accordance with the rules of the company. He would also received compensation, in the
form of commissions. The contract also contained the relations of the parties, duties of the agent and the
acts prohibited tohim including the modes of termination. After 4 years, the parties entered into another
contract – an Agency Manager’s Contract – and to implement this end of it, Basiao organized an agency
while concurrently fulfilling his commitment under the first contract. The company terminated the Agency
Manager’s Contract. Basiao sued the company in a civil action. Thus,the company terminated Basiao’s
engagement under the first contract and stopped payment of his commissions.
Issue:
Whether or not Basiao had become the company’s employee by virtue of the contract, thereby
placing his claim for unpaid commissions
Held:
No. Rules and regulations governing the conduct of the business are provided for in the Insurance Code.
These rules merely serve as guidelines towards the achievement of the mutually desired result without
dictating the means or methods to be employed in attaining it. Its aim is only to promote the result,
thereby creating no employer-employee relationship. It is usual and expected for an insurance company
to promulgate a set of rules to guide its commission agents in selling its policies which prescribe the
qualifications of persons who may be insured. None of these really invades the agent’s contractual
prerogative to adopt his own selling methods or to sell insurance at his own time and convenience, hence
cannot justifiable be said to establish an employer-employee relationship between Basiao and the
company. The respondents limit themselves to pointing out that Basiao’s contract with the company
bound him toobserve and conform to such rules. No showing that such rules were in fact promulgated
which effectivelycontrolled or restricted his choice of methods of selling insurance. Therefore, Basiao was
not an employee of the petitioner, but a commission agent, an independent contractwhose claim for
unpaid commissions should have been litigated in an ordinary civil action.Wherefore, the complain of
Basiao is dismissed.


2011-0147
Case Title: RHONE-POULENC AGROCHEMICALS PHILIPPINES, INC. VS. NLRC
GR No.: 102633-35
Date: JANUARY 19, 1993
Petitioner: RHONE-POULENC AGROCHEMICALS PHILIPPINES, INC.
Respondent: NATIONAL LABOR RELATIONS COMMISSION, URCISIO A. ORAIN, and
PAULINO G. ROMAN
Ponente: Gutierrez, Jr.
Facts:
The petitioner is a domestic corporation engaged in the manufacture of agro-chemicals. Its

business operations involve the formulation, production, distribution and sale in the local market of its
agro-chemical products. On January 1, 1988, as a consequence of the sale by Union Carbide, Inc. of all
its agricultural-chemical divisions worldwide in favor of Rhone-Poulenc Agrochemie, France, the
petitioner's mother corporation, the petitioner acquired from Union Carbide Philippines Far East, Inc. the
latter's agro-chemical formulation plant in Namayan, Mandaluyong, Metro Manila. In 1987, prior to the
sale, Union Carbide had entered into a contract with CSI for the latter's supply of janitorial services.
During the transition period, Union Carbide continued to avail itself of CSI's janitorial services. Thus,
petitioner Rhone-Poulenc found itself sharing the Namayan plant with Union Carbide while the factory
was being serviced and maintained by janitors supplied by CSI. Midway through the transition period,
Union Carbide instructed CSI to reduce thenumber of janitors working at the plant from eight (8) to seven
(7). Private respondent Paulino Roman, one of the janitors, was recalled by CSI onFebruary 15, l988 for
reassignment. However, Roman refused to acknowledge receipt of the recall memorandum. On March 9,
1988, Union Carbide formally notified CSI of the termination of their janitorial service agreement, effective
April 1, 1988, citing as reason the global buy-out by Rhone-Poulenc, Agrochemie, France of Union
Carbides Inc.'s agro-chemical business. CSI thereafter issued a memorandum dated March 20, 1988 to
the seven remaining janitors assigned to the Namayan plant, including respondent Urcisio Orain, recalling
and advising them to report to the CSI office for reassignment. Like Roman, the janitors refused to
acknowledge receipt of the recall memorandum. Meanwhile, in anticipation of the March 31, 1988 pull-out
by Union Carbide, the petitioner started screening proposals by prospective service contractors. Rhone-
Poulenc likewise invited CSI to submit to its Bidding Committee a cost quotation of its janitorial services.
However, another contractor, the Marilag Business and Industrial Services, Inc. passed the bidding
committee's standards and obtained the janitorial services contract.9.On April 1, 1988, the eight janitors
reported for work at the Namayan plant but were refused admission and were told that another group of
janitors had replaced them. These janitors then filed separate complaints for illegal dismissal, payment of
13thmonth salary, service leave and overtime pay against Union Carbide, Rhone-Poulenc and CSI.

Issue/s:
1 Whether or not the janitors were employees of Union Carbide

2. Whether or not the CSI is a labor only contractor
3. Whether or not petitioner absorbed the janitors in its workforce
Held:
The court held that the petition is meritorious. In determining the existence of employer-employee
relationship, the following elements are generally considered, namely: (1) the selection and engagement
of employees (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the
employee's conduct — although the latter is the most important element. There is no employer-employee
relationship between Union Carbide and the respondent janitors. The respondents themselves admitted
that they were selected and hired by CSI and were assigned to Union Carbide. CSI likewise
acknowledged that the two janitors were its employees. The janitors drew their salaries from CSI and not
from Union Carbide. CSI exercised control over these janitors through Richard Barroga, also a CSI
employee, who gave orders and instructions to CSI janitors assigned to the Namayan plant. Moreover,
CSI had the power to assign its janitors to various clients and to pull out as it had done in a number of
occasions, any of its janitors working at Union Carbide. As to whether CSI is engaged in labor-only
contracting or in job contracting, applying the test prescribed by the Labor Code and the implementing
rules, the court finds sufficient basis from the records to conclude that CSI is engaged in job contracting.
Without regard to the third issue, even if the janitors were, indeed, employees of Union Carbide or that
CSI is a labor-only contractor, thus making Union Carbide a direct employer of these janitors, petitioner
Rhone-Poulenc, as purchaser of Union Carbide's business is not compelled to absorb these janitors into
its workforce. An innocent transferee of a business establishment has no liability to the employees of the
transferor to continue employing them.


2011-0147
Case Title: ILOILO DOCK & ENGINEERING CO., v WORKMEN'S COMPENSATION
COMMISSION
GR No.: L-26341
Petitioner: ILOILO DOCK & ENGINEERING CO.,
Respondent: WORKMEN'S COMPENSATION COMMISSION and IRENEA M. PABLO, for
herself and in behalf of her minor children EDWIN, EDGAR and EDNA, all
surnamed PABLO
Ponente: Castro
Facts:
At about 5:02 o'clock in the afternoon of January 29, 1960, Pablo, who was employed as a
mechanic of the IDECO, while walking on his way home, was shot to death in front of, and about 20
meters away from, the main IDECO gate, on a private road commonly called the IDECO road. The slayer,
Martin Cordero, was not heard to say anything before or after the killing. The motive for the crime was
and still is unknown as Cordero was himself killed before he could be tried for Pablo's death. At the time
of the killing, Pablo's companion was Rodolfo Galopez, another employee, who, like Pablo, had finished
overtime work at 5:00 p.m. and was going home. From the main IDECO gate to the spot where Pablo
was killed, there were four "carinderias" on the left side of the road and two "carinderias" and a residential
house on the right side. The entire length of the road is nowhere stated in the record. According to the
IDECO, the Commission erred (1) in holding that Pablo's death occurred in the course of employment and
in presuming that it arose out of the employment; (2) in applying the "proximity rule;" and (3) in holding
that Pablo's death was an accident within the purview of the Workmen's Compensation Act.
Issue:
Whether the injuries are "in the course of" and not "out of" the employment.
Held:
The general rule in workmen's compensation law known as the "going & coming rule," simply
stated, is that "in the absence of special circumstances, an employee injured in, going to, or coming from
his place of work is excluded from the benefits of workmen's compensation acts. This rule, however,
admits of four well-recognized exceptions, to wit: (1) where the employee is proceeding to or from his
work on the premises of his employer; (2) where the employee is about to enter or about to leave the
premises of his employer by way of the exclusive or customary means of ingress and egress; (3) where
the employee is charged, while on his way to or from his place of employment or at his home, or during
his employment, with some duty or special errand connected with his employment; and (4) where the
employer, as an incident of the employment, provides the means of transportation to and from the place
of employment. We address ourselves particularly to an examination and consideration of the second
exception, i.e., injuries sustained off the premises of the employer, but while using a customary means

of ingress and egress. Some of our states refuse to extend this definition of "in the course of" to include
these injuries. Most of the states will protect the employee from the moment his foot or person reaches
the employer's premises, whether he arrives early or late. These states find something sacred about the
employment premises and define "premises" very broadly, not only to include premises owned by the
employer, but also premises leased, hired, supplied or used by him, even private alleyways merely used
by the employer. Adjacent private premises are protected by many states, and a few protect the
employee even on adjacent public sidewalks and streets. Where a city or any employer owns or controls
an island, all its streets are protected premises. There is no reason in principle why states should not
protect employees for a reasonable period of time prior to or after working hours and for a reasonable
distance before reaching or after leaving the employer's premises. The Supreme Court of the United
States has declared that it will not overturn any state decision that so enlarges the scope of its act.
Hence, a deaf worker, trespassing on railroad tracks adjacent to his employer's brick-making premises
(but shown by his superintendent the specific short crossing over the track), and killed by a train, was
held to be in the course of his employment when hit by an oncoming train fifteen minutes before his day
would have begun. So long as causal relation to the employment is discernible, no federalquestion arises.
The narrow rule that a worker is not in the course of his employment until he crosses the employment
threshold is itself subject to many exceptions. Off-premises injuries to or from work ,in both liberal and
narrow states, are compensable (1) if the employee is on the way to or from work in a vehicle owned or
supplied by the employer, whether in a public (e.g., the employer's street car) or private conveyance; (2) if
the employee is subject to call at all hours or at the moment of injury; (3) if the employee is travelling for
the employer, i.e., travelling workers; (4) if the employer pays for the employee's time from the moment
he leaves his home to his return home; (5) if the employee is on his way to do further work at home, even
though on a fixed salary; (6) where the employee is required to bring his automobile to his place of
business for use there. Other exceptions undoubtedly are equally justified, dependent on their own
peculiar circumstances

Jabines, Ines H.
2011 – 0151
ALANO VS. ECC
G.R. No. L-48594
March 16, 1988
Petitioner: GENEROSO ALANO
Respondent: EMPLOYEES' COMPENSATION COMMISSION
Ponente: J. GUTTIERREZ, JR.
Facts: Dedicacion de Vera, a government employee during her lifetime, worked as principal of Salinap
Community School in San Carlos City, Pangasinan. Her tour of duty was from 7:30 a.m. to 5:30 p.m. On
November 29, 1976, at 7:00 A.M., while she was waiting for a ride at Plaza Jaycee in San Carlos City on
her way to the school, she was bumped and run over by a speeding Toyota mini-bus which resulted in
her instantaneous death. She is survived by her four sons and a daughter.
On June 27, 1977, Generoso C. Alano, brother of the deceased, filed the instant claim for income
benefit with the GSIS for and in behalf of the decedent's children. The claim was, however, denied on the
same date on the ground that the "injury upon which compensation is being claimed is not an
employment accident satisfying all the conditions prescribed by law." On July 19, 1977 appellant
requested for a reconsideration of the system's decision, but the same was denied and the records of the
case were elevated to this Commission for review. (Rollo, p. 12)
Issue: Whether or not the death of Dedicacion de Vera can be compensable.
Held: In this case, it is not disputed that the deceased died while going to her place of work. She was at
the place where, as the petitioner puts it, her job necessarily required her to be if she was to reach her
place of work on time. There was nothing private or personal about the school principal's being at the
place of the accident. She was there because her employment required her to be there.
As to the Government Service Insurance System's manifestation, we hold that it is not fatal to this
case that it was not impleaded as a party respondent. As early as the case of La O v. Employees'
Compensation Commission, (97 SCRA 782) up to Cabanero v. Employees' Compensation
Commission (111 SCRA 413) and recently, Clemente v. Government Service Insurance System (G.R.
No. L-47521, August 31,1987), this Court has ruled that the Government Service Insurance System is a
proper party in employees' compensation cases as the ultimate implementing agency of the Employees'
Compensation Commission. We held in the aforecited cases that "the law and the rules refer to the said
System in all aspects of employee compensation including enforcement of decisions (Article 182 of
Implementing Rules)."

Jabines, Ines H.
2011 – 0151
ESCARIO ET.AL. VS. NLRC
G.R. No. 124055
June 8, 2000
Petitioners: ROLANDO E. ESCARIO, NESTOR ANDRES, CESAR AMPER, LORETO BALDEMOR,
EDUARDO BOLONIA, ROMEO E. BOLONIA, ANICETO CADESIM, JOEL CATAPANG,
NESTOR DELA CRUZ, EDUARDO DUNGO ESCARIO REY, ELIZALDE ESTASIO,
CAROLINO M. FABIAN, RENATO JANER, EMER B. LIQUIGAN, ALEJANDRO
MABAWAD, FERNANDO M. MAGTIBAY, DOMINADOR B. MALLILLIN, NOEL B.
MANILA, VIRGILIO A. MANIO, ROMEO M. MENDOZA, TIMOTEO NOTARION,
FREDERICK RAMOS, JOSEPH REYES, JESSIE SEVILLA, NOEL STO. DOMINGO,
DODJIE TAJONERA, JOSELITO TIONLOC, ARNEL UMALI, MAURLIE C. VIBAR,
ROLANDO ZALDUA, RODOLFO TUAZON, TEODORO LUGADA, MAURING MANUEL,
MARCIANO VERGARA, JR., ARMANDO IBASCO, CAYETANO IBASCO, LEONILO
MEDINA, JOSELITO ODO, MELCHOR BUELA, GOMER GOMEZ, HENRY PONCE,
RAMON ORTIZ, JR., ANTONIO MIJARES, JR., MARIO DIZER, REYNANTE PEJO,
ARNALDO RAFAEL, NELSON BERUELA, AUGUSTO RAMOS, RODOLFO VALENTIN,
ANTONIO CACAM, VERNON VELASQUEZ, NORMAN VALLO, ALEJANDRO ORTIZ,
ROSANO VALLO, ANDREW ESPINOSA, EDGAR CABARDO, FIDELES REYES,
EDGARDO FRANCISCO, FERNANDO VILLARUEL, LEOPOLDO OLEGARIO, OSCAR
SORIANO, GARY RELOS, DANTE IRANZO, RONALDO BACOLOR, RONALD
ESGUERA, VICTOR ALVAREZ, JOSE MARCELO, DANTE ESTRELLADO,
MELQUIADES ANGELES, GREGORIO TALABONG, ALBERT BALAO, ALBERT
CANLAS, CAMILO VELASCO, PONTINO CHRISTOPHER, WELFREDO RAMOS,
REYNALDO RODRIGUEZ, RAZ GARIZALDE, MIGUEL TUAZON, ROBERTO SANTOS,
AND RICARDO MORTEL
Respondent: EMPLOYEES' COMPENSATION COMMISSION
Ponente: J. GUTTIERREZ, JR.
Facts: Petitioners are merchandisers of respondent company. They withdraw stocks from the warehouse
, fix the prices, price-tagging, displaying the products and inventory. They were paid by the company
through an agent to avoid liability. They claim that they were under the control and supervision of the
company. They asked for regularization of their status. They were then given notice of their termination.
The company denied any employer-employee relationship. They claim that they used an agent or
independent contractors to sell the merchandise. The Labor Arbiter ruled that there was an employer-
employee relationship. The NLRC set aside the decision and said that there was no such relationship.
The agent was a legitimate independent contractor.
Issue: Whether or not the petitioners are employees of the company.
Held: The Court ruled that there is no employer-employee relationship and that petitioners are employees
of the agent. The agent is a legitimate independent contractor. Labor-only contractor occurs only when
the contractor merely recruits, supplies or places workers to perform a job for a principal. The labor-only
contractor doesn’t have substantial capital or investment and the workers recruited perform activities
directly related to the principal business of the employer. There is permissible contracting only when the
contractor carries an independent business and undertakes the contract in his own manner and method,
free from the control of the principal and the contractor has substantial capital or investment. The agent,
and not the company, also exercises control over the petitioners. No documents were submitted to prove
that the company exercised control over them. The agent hired the petitioners. The agent also pays the
petitioners, no evidence was submitted showing that it was the company paying them and not the agent.
It was also the agent who terminated their services. By petitioning for regularization, the petitioners
concede that they are not regular employees.

Jabines, Ines H.
2011 – 0151
RADIO COMMUNICATIONS OF THE PHILS., INC. VS. SECRETARY OF LABOR
G.R. No. 77959
January 9, 1989
Petitioner: RADIO COMMUNICATIONS OF THE PHILIPPINES, INC.
Respondents: THE SECRETARY OF LABOR AND EMPLOYMENT, THE REGIONAL
DIRECTOR OF THE NATIONAL CAPITAL REGION, DEPARTMENT OF LABOR AND
EMPLOYMENT and UNITED RCPI COMMUNICATIONS LABOR ASSOCIATION (URCPICLA)-
FUR
Ponente: J. REGALADO
Facts: On May 4, 1981, petitioner, a domestic corporation engaged in the telecommunications business,
filed with the National Wages Council an application for exemption from the coverage of Wage Order No.
1. The application was opposed by respondent United RCPI Communications Labor Association
(URCPICLA-FUR), a labor organization affiliated with the Federation of Unions of Rizal (FUR).
On May 22, 1981, the National Wages Council disapproved said application and ordered
petitioner to pay its covered employees the mandatory living allowance of P2.00 daily effective March 22,
1981.
As early as March 13, 1985, before the aforesaid case was elevated to this Court, respondent
union filed a motion for the issuance of a writ of execution, asserting therein its claim to 15% of the total
backpay due to all its members as "union service fee" for having successfully prosecuted the latter's claim
for payment of wages and for reimbursement of expenses incurred by FUR and prayed for the
segregation and remittance of said amount to FUR thru its National President.
On October 24, 1985, without the knowledge and consent of respondent union, petitioner entered
into a compromise agreement with Buklod ng Manggagawa sa RCPI-NFL (BMRCPI-NFL) as the new
bargaining agent of oppositors RCPI employees. Thereupon, the parties filed a joint motion praying for
the dismissal of the decision of the National Wages Council for it had already been novated by the
Compromise Agreement re-defining the rights and obligations of the parties. Respondent Union on
November 7, 1985, countered by opposing the motion and alleging that one of the signatories thereof -
BMRCPI-NFL is not a party in interest in the case but that it was respondent Union which represented
oppositors RCPI employees all the way from the level of the National Wages Council up the Supreme
Court. Respondent Union, therefore, claimed that the Compromise Agreement is irregular and invalid,
apart from the fact that there was nothing to compromise in the face of a final and executory decision.
Director Severo M. Pucan issued an Order dated November 25, 1985 awarding to URCPICLA-
FUR and FUR 15% of the total backpay of RCPI employees as their union service fees, and directing
RCPI to deposit said amount with the cashier of the Regional Office for proper disposition to said
awardees. Despite said order, petitioner paid in full the covered employees on November 29, 1985,
without deducting the union service fee of 15%. In an order dated May 7, 1986, NCR officer-in-charge
found petitioner RCPI and its employees jointly and severally liable for the payment of the 15% union
service fee amounting to P427,845.60 to private respondent URCPICLA-FUR and consequently ordered
the garnishment of petitioner's bank account to enforce said claim.
Secretary of Labor and Employment issued an order on August 18, 1986 modifying the order
appealed from by holding petitioner solely liable to respondent union for 10% of the awarded amounts as
attorney's fees.
Issue: Whether or not public respondents acted with grave abuse of discretion amounting to lack of
jurisdiction in holding the petitioner solely liable for "union service fee” to respondent URCPICLA-FUR.

Held: No. Attorney's fee due the oppositor is chargeable against RCPI. The defaulting employer or
government agency remains liable for attorney's fees because it compelled the complainant to employ the
services of counsel by unjustly refusing to recognize the validity of the claim. (Cristobal vs. ECC)
It is undisputed that oppositor (private respondent herein) was the counsel on record of the RCPI
employees in their claim for EC0LA under Wage Order No. 1 since the inception of the proceedings at the
National Wages Council up to the Supreme Court. It had, therefore, a valid claim for attorney's fee which
it called union service fee.
As is evident in the compromise agreement, petitioner was bound to pay only 30% of the amount
due each employee on November 30, 1985, while the balance of 70% would still be the subject of
renegotiation by the parties. Yet, despite such conditions beneficial to it, petitioner paid in full the backpay
of its employees on November 29, 1985, ignoring the service fee due the private respondent. Worse,
petitioner supposedly paid to one Atty. Rodolfo M. Capocyan the 10% fee that properly pertained to
herein private respondent, an unjustified and baffling diversion of funds.
Finally, petitioner cannot invoke the lack of an individual written authorization from the employees
as a shield for its fraudulent refusal to pay the service fee of private respondent. Be that as it may, the
lack thereof was remedied and supplied by the execution of the compromise agreement whereby the
employees, expressly approved the 10% deduction and held petitioner RCPI free from any claim, suit or
complaint arising from the deduction thereof. When petitioner was thereafter again ordered to pay the
10% fees to respondent union, it no longer had any legal basis or subterfuge for refusing to pay the latter.
We agree that the Labor Code in requiring an individual written authorization as a prerequisite to
wage deductions seeks to protect the employee against unwarranted practices that would diminish his
compensation without his knowledge and consent. However, for all intents and purposes, the deductions
required of the petitioner and the employees do not run counter to the express mandate of the law since
the same are not unwarranted or without their knowledge and consent. Also, the deductions for the union
service fee in question are authorized by law and do not require individual check-off authorizations.

Jabines, Ines H.
2011 – 0151
APODACA VS. NLRC
G.R. No. 80039
April 18, 1989
Petitioner: ERNESTO M. APODACA
Respondents: NATIONAL LABOR RELATIONS COMMISSION, JOSE M. MIRASOL and
INTRANS PHILS., INC.
Ponente: J. GANCAYCO
Facts: Petitioner was employed in respondent corporation. On August 28, 1985, respondent Jose M.
Mirasol persuaded petitioner to subscribe to 1,500 shares of respondent corporation at P100.00 per share
or a total of P150,000.00. He made an initial payment of P37,500.00. On September 1, 1975, petitioner
was appointed President and General Manager of the respondent corporation. However, on January 2,
1986, he resigned.
On December 19, 1986, petitioner instituted with the NLRC a complaint against private
respondents for the payment of his unpaid wages, his cost of living allowance, the balance of his gasoline
and representation expenses and his bonus compensation for 1986. Petitioner and private respondents
submitted their position papers to the labor arbiter. Private respondents admitted that there is due to
petitioner the amount of P17,060.07 but this was applied to the unpaid balance of his subscription in the
amount of P95,439.93. Petitioner questioned the set-off alleging that there was no call or notice for the
payment of the unpaid subscription and that, accordingly, the alleged obligation is not enforceable.
In a decision dated April 28, 1987, the labor arbiter sustained the claim of petitioner for
P17,060.07 on the ground that the employer has no right to withhold payment of wages already earned
under Article 103 of the Labor Code. Upon the appeal of the private respondents to public respondent
NLRC, the decision of the labor arbiter was reversed in a decision dated September 18, 1987. The NLRC
held that a stockholder who fails to pay his unpaid subscription on call becomes a debtor of the
corporation and that the set-off of said obligation against the wages and others due to petitioner is not
contrary to law, morals and public policy.
Issue: Does the National Labor Relations Commission (NLRC) have jurisdiction to resolve a claim for
non-payment of stock subscriptions to a corporation? Assuming that it has, can an obligation arising
therefrom be offset against a money claim of an employee against the employer?
Held: First, the NLRC has no jurisdiction to determine such intra-corporate dispute between the
stockholder and the corporation as in the matter of unpaid subscriptions. This controversy is within the
exclusive jurisdiction of the Securities and Exchange Commission.
Second, assuming arguendo that the NLRC may exercise jurisdiction over the said subject matter
under the circumstances of this case, the unpaid subscriptions are not due and payable until a call is
made by the corporation for payment. Private respondents have not presented a resolution of the board
of directors of respondent corporation calling for the payment of the unpaid subscriptions. It does not
even appear that a notice of such call has been sent to petitioner by the respondent corporation.
What the records show is that the respondent corporation deducted the amount due to petitioner
from the amount receivable from him for the unpaid subscriptions. No doubt such set-off was without
lawful basis, if not premature. As there was no notice or call for the payment of unpaid subscriptions, the
same is not yet due and payable.
Lastly, assuming further that there was a call for payment of the unpaid subscription, the NLRC
cannot validly set it off against the wages and other benefits due the petitioner. Article 113 of the Labor

Code allows such a deduction from the wages of the employees by the employer, only in three instances,
to wit:
ART. 113. Wage Deduction. — No employer, in his own behalf or in behalf of any person, shall
make any deduction from the wages of his employees, except:
(a) In cases where the worker is insured with his consent by the employer, and the
deduction is to recompense the employer for the amount paid by him as premium on the
insurance;
(b) For union dues, in cases where the right of the worker or his union to checkoff has been
recognized by the employer or authorized in writing by the individual worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by the
Secretary of Labor.
The petition is GRANTED and the questioned decision of the NLRC dated September 18, 1987 is
set aside and another judgment is rendered ordering private respondents to pay petitioner the amount of
P17,060.07 plus legal interest computed from the time of the filing of the complaint on December 19,
1986, with costs against private respondents.
An obligation arising from non-payment of stock subscriptions to a corporation cannot be offset

against a money claim of an EE against an ER.

Jabines, Ines H.
2011 – 0151
METROPOLITAN BANK AND TRUST COMPANY EMPLOYEES VS. NLRC
G.R. No. 102636
September 10, 1993
Petitioners: METROPOLITAN BANK & TRUST COMPANY EMPLOYEES UNION-ALU- TUCP
and ANTONIO V. BALINANG
Respondents: NATIONAL LABOR RELATIONS COMMISSION (2nd Division) and
METROPOLITAN BANK and TRUST COMPANY
Ponente: J. VITUG
Facts: Metrobank entered into a CBA with Petitioner, granting a P900 increase in wages. Subsequently,
a law was passed increasing the minimum wage. Metrobank classified employees into those receiving
less than 100 per day and those receiving more. Those receiving more were not covered by the
implementation of the new law but only the increase as agreed upon in the CBA. Petitioners argue that
the method of implementation created a wage distortion within the employees of Metrobank because the
differences in the salaries of the employee classifications were substantially reduced.
Issue: Whether or not there was wage distortion?
Held: There was wage distortion.
Wage Distortion means a situation where an increase in prescribed wage rates results in the
elimination or severe contradiction of intentional quantitative differences in wage or salary rates between
and among employee groups in an establishment as to effectively obliterate the distinctions embodied in
such wage structure based on skills, length of service, or other logical bases of differentiation.

Jabines, Ines H.
2011 – 0151
NATIONAL FEDERATION OF LABOR VS. NLRC
G.R. No. 103586
July 21, 1994
Petitioner: NATIONAL FEDERATION OF LABOR
Respondents: NATIONAL LABOR RELATIONS COMMISSION and FRANKLIN BAKER
COMPANY OF THE PHILIPPINES (DAVAO PLANT)
Ponente: J. FELICIANO
Facts: Between 1 November 1983 and 1 November 1984, Wage Orders Nos. 3, 4, 5 and 6 were
promulgated increasing the statutory minimum wages of workers with differing increases being specified
for agricultural plantation and non-agricultural workers. As a result of the implementation of such wage
orders and the increases brought about by the effectivity of the CBA, there was no more significant
differential between regular and non-regular/newly regularized employees.
Meantime, while the above wage developments were unfolding, the Company experienced a
work output slow down. The Company directed some 205 workers to explain the reduction in their work
output. The workers failed to comply and they were accordingly issued notices of dismissal by the
Company. As a response to its decreasing productivity levels, the Company suspended operations on 16
August 1984. Operations were resumed on 14 September 1984; the Company, however, refused to take
back the 205 dismissed employees. Petitioner Union then went on strike alleging a lock-out on the part of
the Company and demanding rectification of the wage distortion. The case was certified by the Secretary
of Labor to the National Labor Relations Commission (NLRC) for compulsory conciliation.
On 19 June 1985, the Union and the Company reached an agreement with respect to the lock-out
issue. The agreement, which was approved by the NLRC En Banc, granted the 205 employees "financial
assistance" equivalent to thirty (30) days' separation pay. This left unresolved only the wage distortion
issue.
On 11 November 1987, the NLRC En Banc rendered a decision which in effect found the
existence of wage distortion and required the Company to pay a P1.00 wage increase effective 1 May
1984.
On motion for partial reconsideration filed by the Company, the above quoted portion of the
NLRC En Banc's decision was reconsidered and set aside by the NLRC Fifth Division. The Fifth Division
of the NLRC in effect found that while a wage distortion did exist commencing 16 June 1984, the
distortion persisted only for a total of fifteen (15) days and accordingly required private respondent
company to pay "a wage increase of P2.00 per day to all regular workers effective June 16, 1984 up to
June 30, 1984 or a total of fifteen (15) days." The rest of the decision of 11 November 1987 was left
untouched.
Issue: Whether a wage distortion occured due to the implementation of Wage Orders?
Held: We believe and so hold that the re-establishment of a significant gap or differential between regular
employees and casual employees by operation of the CBA was more than substantial compliance with
the requirements of the several Wage Orders (and of Article 124 of the Labor Code). That this re-
establishment of a significant differential was the result of collective bargaining negotiations, rather than
of a special grievance procedure, is not a legal basis for ignoring it. The NLRC En Banc was in serious
error when it disregarded the differential of P3.60 which had been restored by 1 July 1985 upon the

ground that such differential represented negotiated wage increases which should not be considered
covered and in compliance with the Wage Orders. The Wage Orders referred to above had provided for
the crediting of increases in wages or allowances granted or paid by employers within a specified time
against the statutorily prescribed increases in minimum wages.
In relation, NLRC in its Resolution dated 11 November 1987, provided some elaboration of the
notion of wage distortion:
As used herein, a wage distortion shall mean a situation where an increase in prescribed
wage rates results in the elimination or severe contraction of intentional quantitative
differences in wage or salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions embodied in such wage structure
based on skills, length of service, or other logical bases of differentiation.
From the above quoted material, it will be seen that the concept of wage distortion assumes an
existing grouping or classification of employees which establishes distinctions among such employees on
some relevant or legitimate basis. This classification is reflected in a differing wage rate for each of the
existing classes of employees. The wage distortion anticipated in Wage Orders Nos. 3, 4, 5 and 6 was a
"distortion" (or "compression") which ensued from the impact of those Wage Orders upon the different
wage rates of the several classes of employees. Thus, distortion ensued where the result of
implementation of one or another of the several Wage Orders was the total elimination or the severe
reduction of the differential or gap existing between the wage rates of the differing classes of employees.
The Petition for Certiorari is DISMISSED for lack of merit.

Jabines, Ines H.
2011 – 0151
MANILA MANDARIN EMPLOYEES UNION VS. NLRC
G.R. No. 108556
November 19, 1996
Petitioner: MANILA MANDARIN EMPLOYEES UNION
Respondents: NATIONAL LABOR RELATIONS COMMISSION, Second Division, and the
MANILA MANDARIN HOTEL
Ponente: C. J. NARVASA
Issue: On October 30, 1986, the Manila Mandarin Employees Union, as exclusive bargaining agent of
the rank-and-file employees of the Manila Mandarin Hotel, Inc., filed with the NLRC Arbitration Branch a
complaint in its members' behalf to compel MANDARIN to pay the salary differentials of the individual
employees concerned because of wage distortions in their salary structure allegedly created by the
upward revisions of the minimum wage pursuant to various Presidential Decrees and Wage Orders, and
the failure of MANDARIN to implement the corresponding increases in the basic salary rate of newly-hired
employees.
The relevant Presidential Decrees and Wage Orders were invoked during the said trial.
On January 15, 1987, the UNION filed its Position Paper amplifying the allegations of its
complaint and setting forth the legal bases of its demands against MANDARIN; and on March 25, 1987, it
filed an Amended Complaint presenting an additional claim for payment of salary differentials to the union
members affected, allegedly resulting from underpayment of wages.
The Labor Arbiter eventually ruled in favor of the UNION, however it was later reversed by the
Commission. Hence, this petition.
Issue: Whether or not wage distortion exists.
Held: There was no wage distortion that existed. Wage distortion is a situation where an increase in
prescribed wage rates results in the elimination or severe contraction of intentional quantitative
differences in wage or salary rates between and among employee groups in an establishment as to
effectively obliterate the distinctions embodied in such wage structure based on skills, length of service,
or other logical bases of differentiation. A review of the records convinces this Court that respondent
NLRC committed no grave abuse of discretion in holding that no wage distortion was demonstrated by
the UNION.

Jabines, Ines H.
2011 – 0151
CAGAYAN SUGAR MILLING CO., VS. SECRETARY OF LABOR, ET.AL.
G.R. No. 128399
January 15, 1998
Petitioner: CAGAYAN SUGAR MILLING COMPANY
Respondents: SECRETARY OF LABOR AND EMPLOYMENT, DIRECTOR RICARDO S.
MARTINEZ, SR., and CARSUMCO EMPLOYEES UNION
Ponente: J. PUNO
Facts: On September 12 and 13, 1994, labor inspectors from the DOLE Regional Office examined the
books of petitioner to determine its compliance with the wage order. They found that petitioner violated
the wage order as it did not implement an across the board increase in the salary of its employees.
During the hearing at the DOLE Regional Office for the alleged violation, petitioner maintained
that it complied with Wage Order No. RO2-02 as it paid the mandated increase in the minimum wage.
In an Order dated December 16, 1994, public respondent Regional Director Ricardo S. Martinez,
Sr. ruled that petitioner violated Wage Order RO2-02 by failing to implement an across the board increase
in the salary of its employees. He ordered petitioner to pay the deficiency in the salary of its employees in
the total amount of P555,133.41.
On January 6, 1995, petitioner appealed to public respondent Labor Secretary Leonardo A.

Quisumbing. On the same date, the Regional Wage Board issued Wage Order No. RO2-02-A, amending
the earlier wage order.
On October 8, 1996, the Secretary of Labor dismissed petitioner's appeal and affirmed the Order
of Regional Director Martinez, Sr. Petitioner's motion for reconsideration was likewise denied. On
February 12, 1997, private respondent CARSUMCO EMPLOYEES UNION moved for execution of the
December 16, 1994 Order. Regional Director Martinet, Sr. granted the motion and issued the writ of
execution. On March 4, 1997, petitioner moved for reconsideration to set aside the writ of execution. On
March 5, the DOLE regional sheriff served on petitioner a notice of garnishment of its account with the
Far East Bank and Trust Company. On March 10, the sheriff seized petitioner's dump truck and
scheduled its public sale on March 20, 1997.
On April 3, 1997, this Court issued a TRO enjoining respondents from enforcing the writ of
execution. On July 16, upon petitioner's motion, the TRO was amended by also enjoining respondents
from enforcing the Decision of the Secretary of Labor and conducting further proceedings until further
orders from this Court.
Issue: Wage Order RO2-02 is null and void for having been issued in violation of the procedure provided
by law and in violation of petitioner's right to due process of law.
Held: Art. 123. Wage Order. — Whenever conditions in the region so warrant, the Regional Board shall
investigate and study all pertinent facts, and, based on the standards and criteria herein prescribed, shall
proceed to determine whether a Wage Order should be issued. Any such Wage Order shall take effect
after (15) days from its complete publication in at least one (1) newspaper of general circulation in the
region.
The record shows that there was no prior public consultation or hearings and newspaper
publication insofar as Wage Order No. RO2-02-A is concerned. In fact, these allegations were not denied
by public respondents in their Comment. Public respondents' position is that there was no need to comply
with the legal requirements of consultation and newspaper publication as Wage order No. RO2-02-A

merely clarified the ambiguous provision of the original wage order.
Public respondents insist that despite the wording of Wage Order RO2-02 providing for a
statutory increase in minimum wage, the real intention of the Regional Board was to provide for an across
the board increase. Hence, they urge that petitioner is liable for merely providing an increase in the
statutory minimum wage rates of its employees.
The contention is absurd. Petitioner clearly complied with Wage Order RO2-02 which provided for
an increase in statutory minimum wage rates for employees in Region II. It is not just to expect petitioner
to interpret Wage RO2-02 to mean that it granted an across the board increase as such interpretation is
not sustained by its text. Indeed, the Regional Wage Board had to amend Wage Order RO2-02 to clarify
this alleged intent.
In sum, we hold that RO2-02-A is invalid for lack of public consultations and hearings and non-
publication in a newspaper of general circulation, in violation of Article 123 of the Labor Code. We
likewise find that public respondent Secretary of Labor committed grave abuse of discretion in upholding
the findings of Regional Director Ricardo S. Martinez, Sr. that petitioner violated Wage Order RO2-02.
The petition is GRANTED. The Decision of the Secretary of Labor, dated October 8, 1996, is set
aside for lack of merit.

Jabines, Ines H.
2011 – 0151
ECOP VS. NWPC
G.R. No. 96169
September 24, 1991
Petitioner: EMPLOYERS CONFEDERATION OF THE PHILIPPINES
Respondents: NATIONAL WAGES AND PRODUCTIVITY COMMISSION AND REGIONAL
TRIPARTITE WAGES AND PRODUCTIVITY BOARD-NCR, TRADE UNION
CONGRESS OF THE PHILIPPINES
Ponente: J. SARMIENTO
Facts: On October 15, 1990, the Regional Board of the National Capital Region issued Wage Order No.
NCR-01, increasing the minimum wage by P17.00 daily in the National Capital Region. The Trade Union
Congress of the Philippines (TUCP) moved for reconsideration, so did the Personnel Management
Association of the Philippines (PMAP). ECOP opposed.
On October 23, 1990, the Board issued Wage Order No. NCR-01-A amending Wage Order No.
NCR-01, as follows:
Section 1. Upon the effectivity of this Wage Order, all workers and employees in the
private sector in the National Capital Region already receiving wages above the statutory
minimum wage rates up to one hundred and twenty-five pesos (P125.00) per day shall
also receive an increase of seventeen pesos (P17.00) per day.
ECOP appealed to the National Wages and Productivity Commission. On November 6, 1990, the
Commission promulgated an Order, dismissing the appeal for lack of merit. On November 14, 1990, the
Commission denied reconsideration.
Issue: The Employers Confederation of the Philippines (ECOP) is questioning the validity of Wage Order
No. NCR-01-A dated October 23, 1990 of the Regional Tripartite Wages and Productivity Board, National
Capital Region, promulgated pursuant to the authority of Republic Act No. 6727.
Held: The Commission noted that the increasing trend is toward the salary-cap method, which has
reduced disputes arising from wage distortions (brought about, apparently, by the floor-wage method).
Precisely, Republic Act No. 6727 was intended to rationalize wages, first, by providing for full-time boards
to police wages round-the-clock, and second, by giving the boards enough powers to achieve this
objective. The Court is of the opinion that Congress meant the boards to be creative in resolving the
annual question of wages without labor and management knocking on the legislature's door at every turn.
The petition is DENIED.

Jabines, Ines H.
2011 – 0151
MEYCAUAYAN COLLEGE VS. DRILON
G.R. No. 81144
May 7, 1990
Petitioner: MEYCAUAYAN COLLEGE
Respondents: HONORABLE FRANKLIN M. DRILON, in his capacity as Secretary of the
Department of Labor and Employment and MEYCAUAYAN COLLEGE
FACULTY AND PERSONNEL ASSOCIATION (MCFPA)
Facts: Petitioner is a private educational institution duly organized and existing under Philippine laws,
and operating in Meycauayan, Bulacan. On January 16, 1987, its board of trustees recognized the
Meycauayan College Faculty and Personnel Association as the employees union in the Meycauayan
College.
Prior to said recognition or on July 17, 1983, petitioner and the union, then headed by Mrs.
Teresita V. Lim, entered into a collective bargaining agreement for 1983-1986. Article IV thereof provides:
SALARY SCALE
IV. 4.0 ANG ANTAS NG PAGPAPASUWELDO SA MGA GURO SA MATAAS NA

PAARALAN AY UMAALINSUNOD SA PARAAN NG PAGRARANGGONG KALAKIP
NITO BILANG "TAKDA" AT AYON PA RIN SA SUMUSUNOD NA HALAGA NG
PAGPAPASUWELDO (IPATUTUPAD SA AÑO-ESCOLAR 1983-1986):
PAGSUBOK A (1-3 TAON) P51.50

KLASE 1 (4-5 TAON) P52.00
(6-8 TAON) P53.00
KLASE II (9-12 TAON) P54.00
KLASE III (13-14 TAON) P57.00
KLASE IV (15-17 TAON) P60.00
KLASE V (18-21 TAON) P63.00
(22 PATAAS) P70.00
When the collective bargaining agreement was entered into, the following presidential decrees
were in effect:
(a) P.D No. 1389 dated May 29, 1978 adjusting the existing statutory minimum wages;
(b) P.D. No. 1713 dated August 18, 1980 providing for an increase in the minimum daily
wage rates and for additional mandatory living allowances, and ;
(c) P.D. No. 1751 dated May 14, 1980 increasing the statutory daily minimum wage at all levels
by P4.00 after integrating the mandatory emergency living allowance under P.D.
Nos. 525 and 1123 into the basic pay of all covered workers. Wage Order No. 2 increasing the
mandatory basic minimum wage and living allowance was also issued on July 6, 1983
just before the collective bargaining agreement herein involved was entered into.
During the lifetime of the collective bargaining agreement, the following were issued:
(a) Wage Order No. 3 dated November 7, 1983 increasing the minimum daily living
allowance in the private sector;

(b) Wage Order No. 4 dated May 1, 1984 integrating as of said date the emergency cost of living
allowances under P.D. Nos. 1614, 1634 and 1713 into the basic pay of covered workers in the
private sector;
(c) Wage Order No. 5 dated June 11, 1984 increasing the cost of living allowance of workers
in the private sector whose basic salary or wage is not more than P1,800 a month; and
(d) Wage Order No. 6 dated October 26, 1984 increasing the daily living allowances.
The union admits herein that its members were paid all these increases in pay mandated by law.
It appears, however, that in 1987, shortly after union president Mrs. Teresita V. Lim, who held the
managerial position of registrar of the college, had turned over the presidency of the union to Mrs. Fe
Villarico, the latter unintentionally got a copy of the collective bargaining agreement and discovered that
Article IV thereof had not been implemented by the petitioner.
Consequently, on March 27, 1987, the union filed with the Department of Labor and Employment,
Regional Office No. III in San Fernando, Pampanga, a notice of strike on the ground of unfair labor
practice alleging therein violation of the collective bargaining agreement particularly the provisions of
Article IV thereof on salary scale.
Issue: Whether increases in employees' salaries resulting from the implementation of presidential
decrees and wage orders, which are over and above the agreed salary scale contracted for between the
employer and the employees in a collective bargaining agreement, preclude the employees from claiming
the difference between their old salaries and those provided for under said salary scale.
Held: Non-compliance with the mandate of a standards law or decree may give rise to an ordinary action
for recovery while violation of a collective bargaining agreement may even give rise to a criminal action
for unfair labor practice. And while the relief sought for violation of a standard law or decree is primarily
for restitution of unpaid benefits, the relief sought for violating a CBA is ordinarily for compliance and
desistance. Moreover, there is no provision in the aforecited Presidential Decrees providing that
compliance thereto is sufficient compliance with a provision of a collective bargaining agreement and
vice-versa.
As correctly ruled by public respondent, a collective bargaining agreement is a contractual

obligation. It is distinct from an obligation imposed by law. The terms and conditions of a collective
bargaining contract constitute the law between the parties. Beneficiaries thereof are therefore, by right,
entitled to the fulfillment of the obligation prescribed therein. Consequently, to deny binding force to the
collective bargaining agreement would place a premium on a refusal by a party thereto to comply with the
terms of the agreement. Such refusal would constitute an unfair labor practice.

Jabines, Ines H.
2011 – 0151
ST. JOSEPH’S COLLEGE VS. ST. JOSEPH’S COLLEGE WORKERS ASSOCIATION
G.R. No. 155609
January 17, 2005
Petitioner: ST. JOSEPH’S COLLEGE
Respondents: ST. JOSEPH’S COLLEGE WORKERS’ ASSOCIATION (SAMAHAN)
Ponente: J. PANGANIBAN
Facts. Petitioner is a non-stock, non-profit Catholic educational institution while respondent is a

legitimate labor organization which is currently the official bargaining representative of all employees of
petitioner except the faculty and consultants of the Graduate School, managerial employees and those
who occupy confidential positions. Respondent has an existing CBA with petitioner for the period from
June 1, 1999 to May 31, 2004. For the SY 2000-2001, petitioner increased its tuition fees for all its
departments. Based on petitioner’s computation, the incremental proceeds from the tuition fees increase
for SY 2000-2001 is P1,560,942.74, 85% of which is equivalent to P1,326,801.33. Consequently,
respondent averred that 85% of P4,906,307.58, which is P4,170,360.59 should have been released to its
members as provided for in their CBA effective June 1, 2000.
Issue: How should the 70%-30% tuition fee increase be allocated?
Held: The law allows an increase in school tuition fees on the condition that 70 percent of the increase
shall go to the payment of personnel benefits. Plainly unsupported by the law or jurisprudence is
petitioner’s contention that the payment of such benefits should be based not only on the rate of tuition
fee increases, but also on other factors like the decrease in the number of enrollees; the number of those
exempt from paying the fees, like scholars; the number of dropouts who, as such, do not pay the whole
fees; and the bad debts incurred by the school. The financial dilemma of petitioner may deserve
sympathy and support, but its remedy lies not in the judiciary but in the lawmaking body.
The law plainly states that 70 percent of the tuition fee increase shall be allotted for the teaching
and the nonteaching personnel; and that the payment of other costs of operation, together with the
improvement of the school’s infrastructure, shall be taken only from the remaining 30 percent. The law
does not speak, directly or indirectly, of the contention of petitioner that in the event that its total tuition
income is lesser than that in the previous year, then the whole amount of the increase in tuition fee, and
not merely up to 30 percent as provided by law, may be used for the improvement and modernization of
infrastructure and for the payment of other costs of operation.

Jabines, Ines H.
2011 – 0151
COCOFED ET. AL. VS. HON. CRESENCIANO B. TRAJANO
G.R. No. 982767
February 15, 1995
Petitioners: COCOFED (Kalamansig) and/or CRISPIN ROSETE
Respondents: HON. CRESENCIANO B. TRAJANO, Undersecretary of the Department of Labor
and Employment and HON. MELENCIO Q. BALANAG, Director IV, DOLE, Regional XII, Cotabato
City,
Ponente: J. Romero
Facts: Philippine Coconut Producers Federation operates petitioner COCOFED (Kalamansig), a coconut
plantation utilized as a demonstration farm for replanting and/or training area for coconut farmers, located
in Kalamansig, Sultan Kudarat.
On November 15, 1988, a complaint inspection was conducted by the Department of Labor and
Employment, Region XII, Cotabato City in response to complaints filed by two of petitioner's employees,
Alex Edicto and Delia Pahuwayan. The inspection revealed that petitioner was guilty of underpayment of
wages, emergency cost of living allowance (ECOLA) and 13th month pay. Accordingly, notice of
inspection results was issued: requiring petitioner to effect restitution or correction within five (5) days
from notice.
Summary Petitioner submitted its position paper claiming that it should be classified as an
establishment with less than 30 employees and with a paid-up capital of P500,000.00 or less as
evidenced by the assessment of the municipal treasurer. Moreover, complainants worked for less than
eight hours, a minimum of four and maximum of six. A three (3) year actual payrolls from March 1985 to
February 1989 showing the daily actual payment made by the respondent to involved workers are
substantial evidence against the mere memorandum issued by the respondents on the matter. Further,
such payrolls submitted by respondents are not mere summaries of daily efforts of workers but these are
daily records showing workers actual daily rate.
Issue: Whether or not the petitioner was justified in paying an amount less than the statutory minimum
wage.
Held: Petitioner would have us overturn the factual finding of public respondents that its employees are
daily paid workers. This we are unable to do for the payrolls submitted by it support the latters' position.
Findings of administrative agencies which have acquired expertise because their jurisdiction is confined
to specific matters are generally accorded not only respect but finality. Moreover, there is absolutely
nothing in the records which show that petitioner's employees worked for less than eight hours. Finally,
there would have been no need for petitioner to make an offer increasing the wage to P45.00 per day if
complainants were indeed piece rate workers, as it claimed and if their wages were not underpaid, as
found by public respondents.
The petition is DISMISSED.

Jabines, Ines H.
2011 – 0151
CEBU OXYGEN AND ACETYLENE CO., INC. VS. DRILON
G.R. No. 82849
August 2, 1989
Petitioner: CEBU OXYGEN & ACETYLENE CO., INC. (COACO)
Respondents: SECRETARY FRANKLIN M. DRILON OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT, ASSISTANT REGIONAL DIRECTOR CANDIDO CUMBA OF THE
DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 7 AND CEBU
OXYGEN-ACETYLENE & CENTRAL VISAYAS EMPLOYEES ASSOCIATION (COACVEA)
Ponente: J. GANCAYCO
Facts: Petitioner and the union of its rank and file employees, Cebu Oxygen, Acetylene and Central
Visayas Employees Association (COAVEA) entered into a collective bargaining agreement (CBA)
covering the years 1986 to 1988.
1) For the first year which will be paid on January 14, 1986 - P200 to each covered employee.
2) For the second year which will be paid on January 16, 1987 - P 200 to each covered employee.
3) For the third year which will be paid on January 16, 1988 - P300 to each covered employee.
On December 14, 1987, Republic Act No. 6640 was passed increasing the minimum wage, in
sum, Section 8 of the implementing rules prohibits the employer from crediting anniversary wage
increases negotiated under a collective bargaining agreement against such wage increases mandated by
Republic Act No. 6640.
On February 22, 1988, a Labor and Employment Development Officer, pursuant to Inspection
Authority No. 058-88, commenced a routine inspection of petitioner's establishment. Upon completion of
the inspection on March 10, 1988, and based on payrolls and other records, he found that petitioner
committed violations of the law as follows:
1. Under payment of Basic Wage per R.A. No. 6640 covering the period of two (2) months
representing 208 employees who are not receiving wages above P100/day prior to the
effectivity of R.A. No. 6640 in the aggregate amount of EIGHTY THREE THOUSAND AND
TWO HUNDRED PESOS (P83,200.00); and
2. Under payment of 13th month pay for the year 1987, representing 208 employees who are not
receiving wages above P 100/day prior to the effectivity of R.A. No. 6640 in the aggregate
amount of FORTY EIGHT THOUSAND AND FORTY EIGHT PESOS (P48,048.00).
Issue: Whether or not an Implementing Order of the Secretary of Labor and Employment (DOLE) can
provide for a prohibition not contemplated by the law it seeks to implement.
Held: The issue of the validity of Section 8 of the rules implementing Republic Act No. 6640, which
prohibits the employer from crediting the anniversary wage increases provided in collective bargaining
agreements, is a fundamental rule that implementing rules cannot add or detract from the provisions of
law it is designed to implement. The provisions of Republic Act No. 6640, do not prohibit the crediting of
CBA anniversary wage increases for purposes of compliance with it. The implementing rules cannot
provide for such a prohibition not contemplated by the law. Administrative regulations adopted under
legislative authority by a particular department must be in harmony with the provisions of the law, and
should be for the sole purpose of carrying into effect its general provisions. The law itself cannot be
expanded by such regulations. An administrative agency cannot amend an act of Congress.
Thus petitioner's contention that the salary increases granted by it pursuant to the existing CBA
including anniversary wage increases should be considered in determining compliance with the wage
increase mandated by Republic Act No. 6640, is correct. However, the amount that should only be

credited to petitioner is the wage increase for 1987 under the CBA when the law took effect. The wage
increase for 1986 had already accrued in favor of the employees even before the said law was enacted.
The petition is hereby GRANTED. Section 8 of the rules implementing Republic 6640, is hereby
declared null and void in so far as it excludes the anniversary wage increases negotiated under collective
bargaining agreements from being credited to the wage increase provided for under the said Act.

Jabines, Ines H.
2011 – 0151
ODIN SECURITY AGENCY VS. HON. DIONISIO DELA SERNA, ET.AL.
G.R. No. 87439
February 21, 1990
Petitioner: ODIN SECURITY AGENCY
Respondents: HON. DIONISIO C. DE LA SERNA, in his capacity as Undersecretary, Department
of Labor and Employment, HON. LUNA C. PIEZAS, in his capacity as Regional
Director (DOLE), National Capital Region and SERGIO APILADO, MAMERTO
GENER, ARMANDO YUMUL, HERMINIGILDO BARGAS, MARCIANO BOLOCON,
WILLIAM ADAMI, ANTONIO PUBLICO, LEOPOLDO SAAVEDRA, WARLITO
ILAGA, JOVANY SERATO, DANIEL MINGLANA, JOSE MIRANDA, JR.,
ANASTACIO SANTILLAN, ROLANDO FERNANDEZ, NICANOR FEREAS,
FRANCISCO VERZOSA, PLARIDEL ELORIA, APSIN PAGAYAO, JAIME
DORADO, GUILLERMO ELLARES, ARTURO FACTOR, DANIEL FERUISH,
CRISOSTOMO FONSECA, JERRY GA, FRANCISCO GUINSATAO, SIXTO LIPER,
ALLAN MANALLA, GEORGE ORQUESTA, WILFREDO QUIROZ, BENJAMIN UY,
EDWIN ORDONA and DEMETRIO TORRES
Ponente: J. GRIÑO-AQUINO
Facts: On July 8, 1986, a complaint was filed by Sergio Apilado and fifty-five (55) others charging the
petitioner Odin Security Agency, underpayment of wages, illegal deductions, non-payment of night shift
differential, overtime pay, premium pay for holiday work, rest days and Sundays, service incentive leaves,
vacation and sick leaves, and 13th-month pay. When conciliation efforts failed, the parties were required
to submit their position papers.
Private respondents alleged in their position paper that their latest monthly salary was P1,600;
that from this amount, petitioner deducted P100 as administrative cost and P20 as bond; that they were
not paid their premium pay and overtime pay for working on the eleven (11) legal holidays per year; and,
that since private respondents were relieved or constructively dismissed, they must also be paid
backwages.
Petitioner, on the other hand, contended that on July 21, 1986, some 48 security guards
threatened mass action against it. Alarmed by a possible abandonment of post by the guards and mindful
of its contractual obligations to its clients/principals, petitioner relieved and re-assigned the complaining
guards to other posts in Metro Manila. Those relieved were ordered to report to the agency's main office
for reassignment. Only few complied, so those who failed to comply were placed on "AWOL" status.
Petitioner claimed it complied with the Labor Code provisions, and in support thereof, it submitted the
"Quitclaim and Waiver" of thirty-four (34) complainants. It further alleged that complainants who rendered
over-time work as shown by their time sheets were paid accordingly; that service incentive leaves not
availed of, night shift differential, rest days, and holidays were paid in cash.
Earlier, on October 21, 1986, seventeen (17) complainants repudiated their quitclaim and waiver.
They alleged that management pressured them to sign documents which they were not allowed to read
and that if such waiver existed, they did not have any intention of waiving their rights under the law.
Petitioner in its reply argued that complainants were estopped from denying their quitclaims on
the ground of equity; that being high school graduates, complainants fully understood the document they
signed; and that complainant's allegation of coercion or threat was a mere afterthought.
Later, six (6) of the seventeen (17) complainants who repudiated their quitclaims again executed
quitclaims and waivers.
Issue: Whether or not petitioner was denied due process?

Held: The petition has no merit.
The petitioner was not denied due process for several hearings were in fact conducted by the
hearing officer of the Regional Office of the DOLE and the parties submitted position papers upon which
the Regional Director based his decision in the case. There is abundant jurisprudence to the effect that
the requirements of due process are satisfied when the parties are given an opportunity to submit position
papers (Parel, 156 SCRA 768; Adamson & Adamson, Inc. vs. Amores, 152 SCRA 237). Since petitioner
herein participated in the hearings, submitted a position paper, and filed a motion for reconsideration of
the March 23, 1988 decision of the Labor Undersecretary, it was not denied due process.
Furthermore, it has also been held that after voluntarily submitting a cause and encountering an
adverse decision on the merits, it is too late for the loser to question the jurisdiction or power, the Court
said that it is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular
matter to secure an affirmative relief, to afterwards deny that same jurisdiction, to escape a penalty.
Under the present rules, a Regional Director exercises both visitorial and enforcement power over
labor standards cases, and is therefore empowered to adjudicate money claims, provided there still exists
an employer-employee relationship, and the findings of the regional office is not contested by the
employer concerned. (p. 5, Decision.)
The petition is dismissed and the orders dated March 23, 1988 and March 13, 1989 of the
Undersecretary of Labor are hereby affirmed.

Jao, Harris D.
2010-0083
Case Title: ADMIRALTY REALTY VS NLRC

GR NO: GR NO. 112043
Date: May 18, 1999
Petitioner: ADMIRALTY REALTY COMPANY INC.
Respondent: NATIONAL LABOR RELATIONS COMMISSION and ANGELINA M. BALANI
Ponente: PARDO, J.:
FACTS:
On July 1976, Admiral Hotel hired Angelina M. Balani as Cost Controller. She occupied and
served in that position for fifteen (15) years. On June 21, 1991, petitioner, through Managing Director Ma.
Victoria A. Concepcion, issued a memorandum.
On the memorandum issued it was stated that Mrs. Balani committed the following;
1. ENTERTAIN MANY PERSONAL VISITORS DURING OFFICE HOURS.
2. PHONE IS USED A LOT ON PERSONAL CALLS THAT HAVE NOTHING TO DO WITH HOTEL
BUSINESS.
3. MAKING A BUSINESS OF LENDING MONEY TO CO-EMPLOYEES.
On June 22, 1991, respondent replied thereto, denying the charges leveled against her. On June 25,
1991, respondent submitted a letter of resignation, effective at the close of office hours of June 30,
1991. On June 28, 1991, petitioner accepted the resignation with deep regret.
On June 29, 1991, the personnel officer of the hotel issued a certificate of clearance to the effect that
respondent, who was leaving Admiral Hotel effective June 30, 1991, by reason of resignation, had been
cleared of obligations and/or accountabilities.
On July 16, 1991, respondent received the sum of ten thousand eight hundred ninety eight pesos and ten
centavos (P10,898.10) for her salary, overtime, vacation and sick leave, 13th month pay and participation
in service charges.
ISSUE:
Whether the termination of Mrs. Balani was due to her resignation or it was a constructive
dismissal on the part of the admiralty realty company.
HELD:
We agree with the petitioner. The Court is convinced that this is a case of voluntary resignation.
Respondent claims that she was constructively dismissed from her office as its location was transferred
from under the steps of the stairs to the kitchen. Such transfer caused her mental torture which forced her
to resign. However, it was not shown that her transfer was prompted by ill will of management. Indeed,
the manager of the hotel swore that the transfer affected not only the Cost Control office but also other
offices.

The transfer involved only a change in location of the office. It does not involve a change in petitioner's
position. Even a transfer in position is valid when based on sound judgment, unattended by demotion in
rank or diminution of pay or bad faith.
With respect to the memorandum requiring the private respondent to explain why disciplinary action
should not be taken against her for violations of hotel rules, we find that the memorandum was not
unreasonable nor an act of harassment that left petitioner with no choice but to resign.
There is no showing that petitioner was coerced into resigning from the company. On the contrary,
respondent resigned without any element of coercion attending her option. She voluntarily resigned from
employment and signed the quitclaim and waiver after receiving all the benefits for her separation. To
allow respondent to repudiate the same will be to countenance unjust enrichment on her part. "The Court
will not permit such a situation."

Jao, Harris D.
2010-0083
Case Title: APEX MINING VS NLRC

GR NO: GR NO. 94951
Petitioner: APEX MINING COMPANY INC.
Respondent: NATIONAL LABOR RELATIONS COMMISSION and SINCLICITA CANDIDO
Ponente: GANCAYCO, J.:
FACTS:
Private respondent Sinclita Candido was employed by petitioner Apex Mining Company, Inc. on
May 18, 1973 to perform laundry services at its staff house located at Masara, Maco, Davao del Norte. In
the beginning, she was paid on a piece rate basis. However, on January 17, 1982, she was paid on a
monthly basis at P250.00 a month which was ultimately increased to P575.00 a month.
On December 18, 1987, while she was attending to her assigned task and she was hanging her laundry,
she accidentally slipped and hit her back on a stone. She reported the accident to her immediate
supervisor Mila de la Rosa and to the personnel officer, Florendo D. Asirit. As a result of the accident she
was not able to continue with her work. She was permitted to go on leave for medication. De la Rosa
offered her the amount of P 2,000.00 which was eventually increased to P5,000.00 to persuade her to
quit her job, but she refused the offer and preferred to return to work. Petitioner did not allow her to return
to work and dismissed her on February 4, 1988.
ISSUE:
Whether Sinclitica Candido is a domestic helper or a regular employee.
HELD:
The criteria is the personal comfort and enjoyment of the family of the employer in the home of
said employer. While it may be true that the nature of the work of a househelper, domestic servant or
laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in their
circumstances is that in the former instance they are actually serving the family while in the latter case,
whether it is a corporation or a single proprietorship engaged in business or industry or any other
agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises of the
business of the employer. In such instance, they are employees of the company or employer in the
business concerned entitled to the privileges of a regular employee.
Petitioner contends that it is only when the househelper or domestic servant is assigned to certain
aspects of the business of the employer that such househelper or domestic servant may be considered
as such as employee. The Court finds no merit in making any such distinction. The mere fact that the
househelper or domestic servant is working within the premises of the business of the employer and in
relation to or in connection with its business, as in its staffhouses for its guest or even for its officers and
employees, warrants the conclusion that such househelper or domestic servant is and should be
considered as a regular employee of the employer and not as a mere family househelper or domestic
servant as contemplated in Rule XIII, Section l(b), Book 3 of the Labor Code, as amended.
Petitioner denies having illegally dismissed private respondent and maintains that respondent abandoned
her work. This argument notwithstanding, there is enough evidence to show that because of an accident
which took place while private respondent was performing her laundry services, she was not able to work
and was ultimately separated from the service. She is, therefore, entitled to appropriate relief as a regular

employee of petitioner. Inasmuch as private respondent appears not to be interested in returning to her
work for valid reasons, the payment of separation pay to her is in order.
WHEREFORE, the petition is DISMISSED and the appealed decision and resolution of public respondent
NLRC are hereby AFFIRMED. No pronouncement as to costs.

Jao, Harris D.
2010-0083
Case Title: Atilano vs Dela Cruz

GR NO: GR NO. 82488
Pettitioner: Vicente Atilano / Rose Shipping Lines
Respondent: Dionisio C De la Serna, Adriran Lomuntad, and company
Ponente: Feliciano, J:
Facts:
On May 20, 1995, private respondents filed a letter – complaint in the Regional Office of the then
Ministry of Labor and Employment, Cebu City, against petitioner Rose Shipping Lines and its
Proprietor/Manager Vicente Atilano docketed as LSED Case No. 055-85. The letter – complaint alleged
violations by petitioner of labor standard laws on minimum wages, allowances, 13th month pay and
overtime pay.
Acting on the letter – complaint, the Office of the Regional Director ordered a Labor Standards and
Welfare Officer to conduct a complaint inspection on July 22, 1985 at the establishment of petitioner in
Cebu City. However, no actual inspection was effected because the owner, petitioner Mr. Vicente Atilano,
allegedly on a business trip to Manila, and his employees declined to allow the inspection in his absence.
Respondent Regional Director subsequently summoned the parties to conciliation conferences the first of
which was held on August 5, 1985 where only the complainants (private respondents herein) appeared.
The conference was then rescheduled to August 16, 1985 and on that meeting both the parties were
represented. Another hearing was held on August 21, 1985 and there the private respondents submitted
their position paper elaborating and documenting their claims. Petitioner did not file any position paper.
Issue:
Whether or not the public respondents have jurisdiction over the subject matter of the case.
Held:
The lack of inspection was cured when the Regional Director called the parties to several
conferences, petitioner could have presented whatever he had in his books and records to refute the
claims of private respondents; petitioner did not do so and his failure must be deemed a waiver of his
right to contest the conclusions of the Regional Director on the basis of the evidence and records actually
made available to him.
WHEREFORE, the Petition is DISMISSED for lack of merit. Costs against petitioner.
SO ORDERED.

Jao, Harris D.
2010-0083
Case Title: Belarmino vs Employees Compensation Commission

GR NO: GR NO. 90204
Date: May 11, 1990
Petitioner: Manuel Belarmino
Respondent: Employees’ Compensation Commission
Ponente: GRINA – AQUINO, J:
Facts:
Before her death on February 19, 1982, petitioner’s wife, Oania Belarmino, was a classroom
teacher of the Department of Education, Culture and Sports assigned at the Buracan Elementary School
in Dimasalang, Masbate. She had been a classroom teacher since October 18, 1971, or for eleven years.
Her husband, the petitioner, is also a public school teacher.
On January 14, 1982, at nine o’clock in the morning, while performing her duties as a classroom teacher,
Mrs. Belarmino who was in her 8th month of pregnancy, accidentally slipped and fell on the classroom
floor. Moments later, she complained of abdominal pain and stomach cramps. For several days, she
continued to suffer from recurrent abdominal pain and a feeling of heaviness in her stomach, but,
needless of the advice of her female co-teachers to take a leave of absence, she continued to report to
school because there was much work to do. On January 25, 1982, eleven days after her accident, she
went into labor and prematurely delivered a baby girl at home.
Issue:
Whether Belarmino is entitled to death benefits.
Held:
The government is not entirely blameless for her death for it is not entirely blameless for her
poverty. Government has yet to perform its declared policy to free the people from poverty, provide
adequate social services, extend to them a decent standard of living, and improve the quality of life for all.
WHEREFORE, the petition for certiorari is granted. The respondents employees compensation
commission and the government service insurance system are ordered to pay death benefits to the
petitioner and/or the dependents of the late Oania Belarmino, with legal rate of interest from the filing of
the claim until it is fully paid, plus attorney’s fees equivalent to ten percent of the award, and costs of suit.

Jao, Harris D.
2010-0083
Case Title: BROKENSHIRE MEMORIAL HOSPITAL INC. VS MINISTER OF LABOR

GR NO: GR NO. 74621
Petitioner: BROKENSHIRE MEMORIAL HOSPITAL INC.
Respondent: MINISTER OF LABOR and EMPLOYMENT AND BROKENSHIRE MEMORIAL HOSPITAL
EMPLOYEES AND WORKER'S UNION-FFW Represented by EDUARDO A. AFUAN
Ponente: PARAS, J.:
FACTS:
Petitioner contends that the respondent Minister of Labor and Employment acted without, or in excess of
his jurisdiction or with grave abuse of discretion in failing to hold:
A) That the Regional Director committed grave abuse of discretion in asserting exclusive
jurisdiction and in not certifying this case to the Arbitration Branch of the National Labor
Relations Commission for a full-blown hearing on the merits;
B) That the Regional Director erred in not ruling on the counterclaim raised by the
respondent (in the labor case, and now petitioner in this case);
C) That the Regional Director erred -in skirting the constitutional and legal issues raised.
This case originated from a complaint filed by private respondents against petitioner on September 21,
1984 with the Regional Office of the MOLE, Region XI, Davao City for non-compliance with the provisions
of Wage Order No. 5. After due healing the Regional Director rendered a decision dated November 16,
1984 in favor of private respondents. Judgment having become final and executory, the Regional Director
issued a Writ of Execution whereby some movable properties of the hospital (petitioner herein) were
levied upon and its operating expenses kept with the bank were garnished. The levy and garnishment
were lifted when petitioner hospital paid the claim of the private respondents (281 hospital employees)
directly, in the total amount of P163,047.50 covering the period from June 16 to October 15, 1984.
ISSUE:
Whether or not the Regional Director has jurisdiction over money claims of workers concurrent with the
Labor Arbiter.
HELD:
Based on the foregoing considerations, it is our shared view that the findings of the labor regulations
officers may not be deemed uncontested as to bring the case at bar within the competence of the
Regional Director, as duly authorized representative of the Secretary of Labor, pursuant to Article 128 of
the Labor Code, as amended. Considering further that the aggregate claims involve an amount in excess
of P5,000.00, We find it more appropriate that the issue of petitioner hospital's liability therefor, including
the proposal of petitioner that the obligation of private respondents to the former in the aggregate amount
of P507,237.57 be used to offset its obligations to them, be ventilated and resolved, not in a summary
proceeding before the Regional Director under Article 128 of the Labor Code, as amended, but in
accordance With the more formal and extensive proceeding before the Labor Arbiter. Nevertheless, it
should be emphasized that the amount of the employer's liability is not quite a factor in determining the
jurisdiction of the Regional Director. However, the power to order compliance with labor standards

provisions may not be exercised where the employer contends or questions the findings of the labor
regulation officers and raises issues which cannot be determined without taking into account evidentiary
matters not verifiable in the normal course of inspection, as in the case at bar.
Viewed in the light of RA 6715 and read in consonance with the case of Briad Agro Development Corp.,
as reconsidered, We hold that the instant case falls under the exclusive original jurisdiction of the Labor
Arbiter RA 6715 is in the nature of a curative statute. Curative statutes have long been considered valid in
our jurisdiction, as long as they do not affect vested rights. In this case, We do not see any vested right
that will be impaired by the application of RA 6715. Inasmuch as petitioner had already paid the claims of
private respondents in the amount of P163,047.50 pursuant to the decision rendered in the first
complaint, the only claim that should be deliberated upon by the Labor Arbiter should be limited to the
second amount given by the Regional Director in the second complaint together with the proposal to
offset the obligations.
WHEREFORE, the assailed decision of the Regional Director dated April 12, 1985, is SET ASIDE. The
case is REFERRED, if the respondents are so minded, to the Labor Arbiter for proper proceedings.
SO ORDERED.

Jao, Harris D.
2010-0083
Case title: Cheniver Deco Print Technics Corporation vs National Labor Relations Commission
Petitioner: Cheniver Deco Print Technics Corporation
Respondent: NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION), CFW-
MAGKAKAISANG LAKAS NG MGA MANGGAGAWA SA CHENIVER DECO PRINT
TECHNIC CORPORATION, EDGARDO VIGUESILLA
Ponente: Quisumbing, J:
Facts:
Petitioner is a duly organized corporation operating its printing business in Visita St., Barangay
Sta. Cruz, Makati. Private respondent CFW-Magkakaisang Lakas ng mga Manggagawa sa Cheniver
Deco Print Technic Corporation is a registered labor union affiliated with the Confederation of Free
Workers (CFW). Private respondent Edgardo Viguesilla and twenty two (22) others are members of
aforesaid union and former employees of petitioner.
The records disclose that on June 5, 1992, petitioner informed its workers about the transfer of the
company from its site in Makati to Sto. Tomas, Batangas. Petitioner decided to relocate its business in
view of the expiration of the lease contract on the premises it occupied in Makati and the refusal of the
lessor to renew the same. Earlier, the local authorities also took action to force out petitioner from Makati
because of the alleged hazards petitioner's plant posed to the residents nearby.
In view of the impending transfer, petitioner gave its employees up to the end of June 1992 to inform
management of their willingness to go with petitioner, otherwise, it would hire replacements.
Issue:
Whether the wage differential should be given different and independent from monetary benefits?
Held:
Petitioner's contention that private respondents resigned from their jobs, does not appear
convincing. As public respondent observed, the subsequent transfer of petitioner to another place hardly
accessible to its workers resulted in the latter's untimely separation from the service not to their own
liking, hence, not construable as resignation.7 Resignation must be voluntary and made with the intention
of relinquishing the office, accompanied with an act of relinquishment. 8 Indeed, it would have been
illogical for private respondents herein to resign and then file a complaint for illegal dismissal. Resignation
is inconsistent with the filing of the said complaint. 9
As to petitioner's assertion that private respondents resorted to forum shopping, the same deserves scant
consideration. As noted by the Solicitor General, private respondents' claims in this case are based on
underpayment of wages, legal holiday pay, service incentive leave pay and 13th month pay. On the other
hand, the other cases separately filed in different fora by Danilo Canares, Aurelia Gabucan, Dexter
Mitschek and Ruel Viray involved different issues which are distinct and have no bearing on the case at
bar.10 The case pursued by Canares is for diminution of salary on account of his demotion which was
decided in his favor with finality by this Court; 11 Gabucan's case involves reinstatement to her job;
Mitschek's case pertains to diminution of his salary; and Viray's complaint was dismissed without
prejudice for failure to prosecute. Thus, there is no basis for petitioner's forum shopping charge as the
instant case and the others do not raise identical causes of action, subject matter and issues. 12

Lastly, petitioner alleges that claims of other private respondents have already been paid upon the
enforcement of the order dated February 26, 1992 in case number NRC-00-9112-CI-001. This is not
correct. As correctly pointed out by the Solicitor General, the aforesaid order refers to the enforcement of
Wage Order No. NCR-02 mandating P2.00 wage increase.13 Certainly, the wage differential received by
private respondents by virtue of the mandated wage increase is different from the monetary benefits
herein being claimed by private respondents. Hence, public respondent cannot be faulted for grave abuse
of discretion on this score.
WHEREFORE, the instant petition is DENIED, and the assailed RESOLUTIONS of public respondent are
AFFIRMED. Cost against petitioners.

Jao, Harris D.
2010-0083
Case title: GOVERNMENT SERVICE INSURANCE SYSTEM vs COURT OF APPEALS and

FELONILA ALEGRE
GR NO: GR No. 128524
Petitioner: GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS)
Respondent: THE HONORABLE COURT OF APPEALS and FELONILA ALEGRE
Ponente: ROMERO, J.;
Facts:
Felonila Alegre's deceased husband, SPO2 Florencio A.. Alegre, was a police officer assigned to
the Philippine National Police station in the town of Vigan, Ilocos Sur. On that fateful day of December 6,
1994, he was driving his tricycle and ferrying passengers within the vicinity of Imelda Commercial
Complex when SPO4 Alejandro Tenorio, Jr., Team/Desk Officer of the Police Assistance Center located
at said complex, confronted him regarding his tour of duty. SPO2 Alegre allegedly snubbed SPO4
Tenorio and even directed curse words upon the latter. A verbal tussle then ensued between the two
which led to the fatal shooting of the deceased police officer.êt
On account of her husband's death, private respondent seasonably filed a claim for death benefits with
petitioner Government Service Insurance System (GSIS) pursuant to Presidential Decree No. 626. In its
decision on August 7, 1995, the GSIS, however, denied the claim on the ground that at the time of SPO2
Alegre's death, he was performing a personal activity which was not work-connected. Subsequent appeal
to the Employees' Compensation Commission (ECC) proved futile as said body, in a decision dated May
9, 1996, merely affirmed the ruling of the GSIS.
Private respondent finally obtained a favorable ruling in the Court of Appeals when on February 28, 1997,
2
the appellate court reversed the ECC's decision and ruled that SPO2 Alegre's death was work-
connected and, therefore, compensable.
Aggrieved, GSIS comes to us on petition for review on certiorari reiterating its position that SPO2 Alegre's
death lacks the requisite element of compensability which is, that the activity being performed at the time
of death must be work-connected.
Issue:
May a moonlighting policeman's death be considered compensable?
Held:
Taking together jurisprudence and the pertinent guidelines of the ECC with respect to claims for
death benefits, namely: (a) that the employee must be at the place where his work requires him to be; (b)
that the employee must have been performing his official functions; and (c) that if the injury is sustained
elsewhere, the employee must have been executing an order for the employer, it is not difficult to
understand then why SPO2 Alegre's widow should be denied the claims otherwise due her. Obviously,
the matter SPO2 Alegre was attending to at the time he met his death, that of ferrying passengers for a
fee, was intrinsically private and unofficial in nature proceeding as it did from no particular directive or
permission of his superior officer. In the absence of such prior authority as in the cases
of Hinoguin and Nitura, or peacekeeping nature of the act attended to by the policeman at the time he

died even without the explicit permission or directive of a superior officer, as in the case of P/Sgt. Alvaran,
there is no justification for holding that SPO2 Alegre met the requisites set forth in the ECC guidelines.
That he may be called upon at any time to render police work as he is considered to be on a round-the-
clock duty and was not on an approved vacation leave will not change the conclusion arrived at
considering that he was not placed in a situation where he was required to exercise his authority and duty
as a policeman. In fact, he was refusing to render one pointing out that he had already complied with the
duty detail. 8 At any rate, the 24-hour duty doctrine, as applied to policemen and soldiers, serves more as
an after-the-fact validation of their acts to place them within the scope of the guidelines rather than a
blanket license to benefit them in all situations that may give rise to their deaths. In other words, the 24-
hour duty doctrine should not be sweepingly applied to all acts and circumstances causing the death of a
police officer but only to those which, although not on official line of duty, are nonetheless basically police
service in character.
WHEREFORE, the petition is hereby GRANTED. The assailed decision of the Court of Appeals in CA-
G.R. SP No. 42003 dated February 28, 1997, is hereby REVERSED and SET ASIDE.
No pronouncement as to costs.

Jao, Harris D.
2010-0083
Case title: GOVERNMENT SERVICE INSURANCE SYSTEM vs COURT OF APPEALS and

FELONILA ALEGRE
GR NO: GR No. 128524
Petitioner: GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS)
Respondent: THE HONORABLE COURT OF APPEALS and FELONILA ALEGRE
Ponente: ROMERO, J.;
Facts:
Felonila Alegre's deceased husband, SPO2 Florencio A.. Alegre, was a police officer assigned to
the Philippine National Police station in the town of Vigan, Ilocos Sur. On that fateful day of December 6,
1994, he was driving his tricycle and ferrying passengers within the vicinity of Imelda Commercial
Complex when SPO4 Alejandro Tenorio, Jr., Team/Desk Officer of the Police Assistance Center located
at said complex, confronted him regarding his tour of duty. SPO2 Alegre allegedly snubbed SPO4
Tenorio and even directed curse words upon the latter. A verbal tussle then ensued between the two
which led to the fatal shooting of the deceased police officer.êt
On account of her husband's death, private respondent seasonably filed a claim for death benefits with
petitioner Government Service Insurance System (GSIS) pursuant to Presidential Decree No. 626. In its
decision on August 7, 1995, the GSIS, however, denied the claim on the ground that at the time of SPO2
Alegre's death, he was performing a personal activity which was not work-connected. Subsequent appeal
to the Employees' Compensation Commission (ECC) proved futile as said body, in a decision dated May
9, 1996, merely affirmed the ruling of the GSIS.
Private respondent finally obtained a favorable ruling in the Court of Appeals when on February 28, 1997,
2
the appellate court reversed the ECC's decision and ruled that SPO2 Alegre's death was work-
connected and, therefore, compensable.
Aggrieved, GSIS comes to us on petition for review on certiorari reiterating its position that SPO2 Alegre's
death lacks the requisite element of compensability which is, that the activity being performed at the time
of death must be work-connected.
Issue:
May a moonlighting policeman's death be considered compensable?
Held:
Taking together jurisprudence and the pertinent guidelines of the ECC with respect to claims for
death benefits, namely: (a) that the employee must be at the place where his work requires him to be; (b)
that the employee must have been performing his official functions; and (c) that if the injury is sustained
elsewhere, the employee must have been executing an order for the employer, it is not difficult to
understand then why SPO2 Alegre's widow should be denied the claims otherwise due her. Obviously,
the matter SPO2 Alegre was attending to at the time he met his death, that of ferrying passengers for a
fee, was intrinsically private and unofficial in nature proceeding as it did from no particular directive or
permission of his superior officer. In the absence of such prior authority as in the cases
of Hinoguin and Nitura, or peacekeeping nature of the act attended to by the policeman at the time he

died even without the explicit permission or directive of a superior officer, as in the case of P/Sgt. Alvaran,
there is no justification for holding that SPO2 Alegre met the requisites set forth in the ECC guidelines.
That he may be called upon at any time to render police work as he is considered to be on a round-the-
clock duty and was not on an approved vacation leave will not change the conclusion arrived at
considering that he was not placed in a situation where he was required to exercise his authority and duty
as a policeman. In fact, he was refusing to render one pointing out that he had already complied with the
duty detail. 8 At any rate, the 24-hour duty doctrine, as applied to policemen and soldiers, serves more as
an after-the-fact validation of their acts to place them within the scope of the guidelines rather than a
blanket license to benefit them in all situations that may give rise to their deaths. In other words, the 24-
hour duty doctrine should not be sweepingly applied to all acts and circumstances causing the death of a
police officer but only to those which, although not on official line of duty, are nonetheless basically police
service in character.
WHEREFORE, the petition is hereby GRANTED. The assailed decision of the Court of Appeals in CA-
G.R. SP No. 42003 dated February 28, 1997, is hereby REVERSED and SET ASIDE.
No pronouncement as to costs.

Jao, Harris D.
2010-0083
Case Title: INTERTROD MARITIME, INC. and TROODOS SHIPPING CO. vs NATIONAL LABOR
RELATIONS COMMISSION and ERNESTO DE LA CRUZ
GR NO: GR NO. 81087
Date: June 19, 1991
Petitioner: INTERTROD MARITIME, INC. and TROODOS SHIPPING CO.
Respondent: NATIONAL LABOR RELATIONS COMMISSION and ERNESTO DE LA CRUZ
Ponente: PADILLA, J:
Facts:
Private respondent Ernesto de la Cruz signed a shipboard employment contract with petitioner
Troodos Shipping Company as principal and petitioner Intertrod Maritime, Inc., as agent to serve as Third
Engineer on board the M/T "BREEDEN" for a period of twelve (12) months with a basic monthly salary of
US$950.00.
Private respondent eventually boarded a sister vessel, M/T "AFAMIS" and proceeded to work as the
vessel's Third Engineer under the same terms and conditions of his employment contract previously
referred to.
On 26 August 1982, while the ship (M/T "Afamis") was at Port Pylos, Greece, private respondent
3
requested for relief, due to "personal reason." The Master of the ship approved his request but informed
private respondent that repatriation expenses were for his account and that he had to give thirty (30) days
notice in view of the Clause 5 of the employment contract so that a replacement for him (private
respondent) could be arranged.
On 30 August 1982, while the vessel was at Port Said in Egypt and despite the fact that it was only four
(4) days after private respondent's request for relief, the Master "signed him off" and paid him in cash all
amounts due him less the amount of US$780.00 for his repatriation expenses, as evidenced by the
wages account signed by the private respondent.
On his return to the Philippines, private respondent filed a complaint with the National Seamen Board
(NSB)(now POEA) charging petitioners for breach of employment contract and violation of NSB rules and
6
regulations. Private respondent alleged that his request for relief was made in order to take care of a
Filipino member of the crew of M/T "AFAMIS" who was hospitalized on 25 August 1982 in Athens,
Greece. However, the Master of the ship refused to let him immediately disembark in Greece so that the
reason for his request for relief ceased to exist. Hence, when the Master of the ship forced him to step out
in Egypt despite his protestations to the contrary, there being no more reason to request for relief, an
illegal dismissal occurred and he had no other recourse but to return to the Philippines at his own
expense.
In its Answer to the complaint, petitioners denied the allegations of the complainant and averred that the
contract was cut short because of private respondent's own request for relief so that it was only proper
that he should pay for his repatriation expenses in accordance with the provisions of their employment
contract.
The sole issue to be resolved in this case is whether or not complainant's termination is illegal.

POEA rendered a decision dismissing the complaint for lack of merit. On appeal to the NLRC, the
decision was reversed.
Issue:
Whether or not complainant's termination is illegal.
Held:
Private respondent claims that his request for relief was only for the reason of taking care of a
fellow member of the crew so much so that when he was not allowed to disembark in Port Pylos, Greece,
the reason no longer existed and, therefore, when he was forced to "sign off" at Port Said, Egypt even
when he signified intentions of continuing his work, he was illegally dismissed. 15 We sympathize with the
private respondent; however, we cannot sustain such contention. Resignation is the voluntary act of an
employee who "finds himself in a situation where he believes that personal reasons cannot be sacrificed
in favor of the exigency of the service, then he has no other choice but to disassociate himself from his
employment." 16 The employer has no control over resignations and so, the notification requirement was
devised in order to ensure that no disruption of work would be involved by reason of the resignation. This
practice has been recognized because "every business enterprise endeavors to increase its profits by
adopting a device or means designed towards that goal." 17
Resignations, once accepted and being the sole act of the employee, may not be withdrawn without the
consent of the employer. In the instant case, the Master had already accepted the resignation and,
although the private respondent was being required to serve the thirty (30) days notice provided in the
contract, his resignation was already approved. Private respondent cannot claim that his resignation
ceased to be effective because he was not immediately discharged in Port Pylos, Greece, for he could no
longer unilaterally withdraw such resignation. When he later signified his intention of continuing his work,
it was already up to the petitioners to accept his withdrawal of his resignation. The mere fact that they did
not accept such withdrawal did not constitute illegal dismissal for acceptance of the withdrawal of the
resignation was their (petitioners') sole prerogative.
Once an employee resigns and his resignation is accepted, he no longer has any right to the job. If the
employee later changes his mind, he must ask for approval of the withdrawal of his resignation from his
employer, as if he were re-applying for the job. It will then be up to the employer to determine whether or
not his service would be continued. If the employer accepts said withdrawal, the employee retains his job.
If the employer does not, as in this case, the employee cannot claim illegal dismissal for the employer has
the right to determine who his employees will be. To say that an employee who has resigned is illegally
dismissed, is to encroach upon the right of employers to hire persons who will be of service to them.
Furthermore, the employment contract also provides as follows:
4. That all terms and conditions agreed herein are for a service period of twelve (12)
months provided the vessel is in a convenient port for his repatriation, otherwise at
Master's discretion, on vessel's arrival at the first port where repatriation is practicable
provided that such continued service shall not exceed three months. 18
Under the terms of the employment contract, it is the ship's Master who determines where a seaman
requesting relief may be "signed off." It is, therefore, erroneous for private respondent to claim that his
resignation was effective only in Greece and that because he was not immediately allowed to disembark
in Greece (as the employer wanted compliance with the contractual conditions for termination on the part
of the employee), the resignation was to be deemed automatically withdrawn.

The decision of the NLRC is therefore set aside. To sustain it would be to authorize undue oppression of
the employer. After all, "the law, in protecting the rights of the laborer, authorizes neither oppression nor
19
self-destruction of the employer."
WHEREFORE, the petition is GRANTED. The questioned resolution of the National Labor Relations
Commission dated 11 December 1987 is hereby REVERSED and SET ASIDE and the decision of then
POEA Administrator Patricia Sto. Tomas dated 20 December 1983 is REVIVED. No pronouncement as to
costs.

Jao, Harris D.
2010-0083
Case Title: Jose Sarmento vs Employees Compensation Commission

GR NO: GR NO. L-65680
Date: May 11, 1989
Petitioner: JOSE B. SARMIENTO
Respondent: EMPLOYEES' COMPENSATION COMMISSION & GOVERNMENT SERVICE
INSURANCE SYSTEM (National Power Corporation)
Ponente: GUTIERREZ, JR., J.:
Facts:
The record shows that the late Flordeliza Sarmiento was employed by the National Power
Corporation in Quezon City as accounting clerk in May 1974. At the time of her death on August 12, 1981
she was manager of the budget division. History of the deceased's illness showed that symptoms
manifested as early as April 1980 as a small wound over the external auditory canal and mass over the
martoid region. Biopsy of the mass revealed cancer known as "differentiated squamous cell carcinoma."
The employee sought treatment in various hospitals, namely, Veterans Memorial Hospital, United Doctors
Medical Hospital and Makati Medical Center. In March 1981, a soft tissue mass emerged on her left
upper cheek as a result of which her lips became deformed and she was unable to close her left eye. She
continued treatment and her last treatment at the Capitol Medical Center on July 12, 1 981 was due to her
difficulty of swallowing food and her general debility. On August 12, 1981, she succumbed to
cardiorespiratory arrest due to parotid carcinoma. She was 40 years old.
Believing that the deceased's fatal illness having been contracted by her during employment was service-
connected, appellant herein filed a claim for death benefits under Presidential Decree No. 626, as
amended. On September 9, 1982, the GSIS, through its Medical Services Center, denied the claim. It
was pointed out that parotid carcinoma is "Malignant tumor of the parotid gland (salivary gland)" and that
its development was not caused by employment and employment conditions. Dissatisfied with the
respondent System's decision of denial, claimant wrote a letter dated October 8, 1982 to the GSIS
requesting that the records of the claim be elevated to the Employees' Compensation Commission for
review pursuant to the law and the Amended Rules on Employees' Compensation.
On August 25, 1983, the respondent Commission affirmed the GSIS' decision. It found that the
deceased's death causation by parotid carcinoma is not compensable because she did not contract nor
suffer from the same by reason of her work but by reason of embryonic rests and epithelial growth.
Issue:
Whether the surviving spouse of Flordeliza Sarmiento is entitled to the death benefits herein in
question with the GSIS?
Held:
We find these allegations as mere conjectures. As with other kinds of cancer, the cause and
nature of parotid carcinoma is still not known. A medical authority, however, declares that:
SALIVARY GLANDS —
Painless swelling of the parotid glands is often noted in hepatic cirrhosis in sarcoidis, in mumps, following
abdominal surgery, or associated with neoplasm or infections. The common factors may be dehydration
and inattention to oral hygiene. The latter promotes the growth of large numbers of bacteria which, in the
absence of sufficient salivary flow, ascend from the mouth into the duct of a gland. Another cause of a

painful salivary gland is sialolithiasis (salivary duct stone). The submandibular glands are most commonly
affected. Pain and swelling associated with eating are characteristic. Saliva promotes retention of artificial
dentures because of its mucin content. Thus, conditions characterized by diminished saliva flow often
adversely affect the ease with which dentures may be worn. Calcium phosphate stone tend to form
because of a high pH and viscosity of the submandibular gland saliva which has a high mucin content.
Stones are removed by manipulation or excision.
Autoimmune sialosis is the Mikulics—Sjogren Syndrome, a unilateral or bilateral enlargement of the

parotid and/or submandibular gland, and often the lacrimal glands. Occasionally painful, it is associated
with xerostomia (dry mouth) due to impaired saliva formation that is most common in older women.
Beriow et al., The Merek Manuel, 14th Edition, pp. 2095-2096).
Another author states the following regarding squamous cell carcinoma:
Moreover, when the salivary gland is almost totally destroyed and replaced by epidermoid cancer it may
be difficult or even impossible to ascribe the origin of the growth to salivary gland tissue. Indeed many
squamous cell carcinomas, especially of the parotid, may be metastatic lesions that develop in lymph
nodes included within the parotid. And it is important to stress that the juxtaparotid and intraparotid lymph
nodes are not merely accumulations of lymphoid tissue but nodes with efferent and afferent lymphatics.
Squamous cell carcinomas of the major salivary glands are generally fixed to the skin and the underlying
tissues and, in the case of the parotid, are often the cause of facial palsy.
Epidermoid cancers grow swiftly and the clinical course is usually rapid. A few tumours, however, have
been present for as long as two years before the patient seeks advice. Some patients remain alive and
asymptomatic after radical surgery, but ordinarily the lesions are highly malignant, infiltrating locally and
metastasizing to the regional nodes Distant metastasis is seldom a prominent clinical feature. In the case
of the submandibular gland the tumor may simulate osteomyelitis of the mandible or an abscess in the
gland itself, and if such lesions are incised a chronic sinus is liable to persist until radical treatment is
undertaken. (Evans and Cruickshank, Epithelial Tumours of the Salivary Glands, Vol. 1, p. 254)
Given the preceding medical evaluations, we affirm the findings of the public respondents which found no
proof that the deceased's working conditions have indeed caused or increased the risk of her contracting
her illness.
WHEREFORE, the petition is DISMISSED. The decisions of the Government Service Insurance System
and the Employees' Compensation Commission denying the claim are AFFIRMED.

Jao, Harris D.
2010-0083
Case Title: Maternity Children’s Hospital vs Secretary of Labor

GR NO: GR NO. 78909
Date: June 30, 1989
Petitioner: MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L. DORADO, President
Respondent: THE HONORABLE SECRETARY OF LABOR AND THE REGIONAL DlRECTOR OF
LABOR, REGION X
Ponente: MEDIALDEA, J.
Facts:
Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan de

Oro Women's Club and Puericulture Center, headed by Mrs. Antera Dorado, as holdover President. The
hospital derives its finances from the club itself as well as from paying patients, averaging 130 per month.
It is also partly subsidized by the Philippine Charity Sweepstakes Office and the Cagayan De Oro City
government.
Petitioner has forty-one (41) employees. Aside from salary and living allowances, the employees are
given food, but the amount spent therefor is deducted from their respective salaries (pp. 77-78, Rollo).
On May 23, 1986, ten (10) employees of the petitioner employed in different capacities/positions filed a
complaint with the Office of the Regional Director of Labor and Employment, Region X, for underpayment
of their salaries and ECOLAS, which was docketed as ROX Case No. CW-71-86.
On June 16, 1986, the Regional Director directed two of his Labor Standard and Welfare Officers to
inspect the records of the petitioner to ascertain the truth of the allegations in the complaints (p.
98, Rollo). Payrolls covering the periods of May, 1974, January, 1985, November, 1985 and May, 1986,
were duly submitted for inspection.
On July 17, 1986, the Labor Standard and Welfare Officers submitted their report confirming that there
was underpayment of wages and ECOLAs of all the employees by the petitioner, the dispositive portion of
which reads:
IN VIEW OF THE FOREGOING, deficiency on wage and ecola as verified and confirmed
per review of the respondent payrolls and interviews with the complainant workers and all
other information gathered by the team, it is respectfully recommended to the Honorable
Regional Director, this office, that Antera Dorado, President be ORDERED to pay the
amount of SIX HUNDRED FIFTY FOUR THOUSAND SEVEN HUNDRED FIFTY SIX &
01/100 (P654,756.01), representing underpayment of wages and ecola to the THIRTY
SIX (36) employees of the said hospital as appearing in the attached Annex "F"
worksheets and/or whatever action equitable under the premises. (p. 99, Rollo)
Based on this inspection report and recommendation, the Regional Director issued an Order
dated August 4, 1986, directing the payment of P723,888.58, representing underpayment of
wages and ECOLAs to all the petitioner's employees.
Issue:
Whether or not the Regional Director had jurisdiction over the case and if so, the extent
of coverage of any award that should be forthcoming, arising from his visitorial and

enforcement powers under Article 128 of the Labor Code.
Held:
The justification for the award to this group of employees who were not signatories to the
complaint is that the visitorial and enforcement powers given to the Secretary of Labor is relevant to, and
exercisable over establishments, not over the individual members/employees, because what is sought to
be achieved by its exercise is the observance of, and/or compliance by, such firm/establishment with the
labor standards regulations. Necessarily, in case of an award resulting from a violation of labor legislation
by such establishment, the entire members/employees should benefit therefrom. As aptly stated by then
Minister of Labor Augusto S. Sanchez:
. . It would be highly derogatory to the rights of the workers, if after categorically finding
the respondent hospital guilty of underpayment of wages and ECOLAs, we limit the
award to only those who signed the complaint to the exclusion of the majority of the
workers who are similarly situated. Indeed, this would be not only render the enforcement
power of the Minister of Labor and Employment nugatory, but would be the pinnacle of
injustice considering that it would not only discriminate but also deprive them of legislated
benefits.
. . . (pp. 38-39, Rollo).
This view is further bolstered by the provisions of Sec. 6, Rule II of the "Rules on the Disposition of Labor
Standards cases in the Regional Offices" (supra) presently enforced, viz:
SECTION 6. Coverage of complaint inspection. — A complaint inspection shall not be

limited to the specific allegations or violations raised by the complainants/workers but
shall be a thorough inquiry into and verification of the compliance by employer with
existing labor standards and shall cover all workers similarly situated. (Emphasis
supplied)
However, there is no legal justification for the award in favor of those employees who were no longer
connectedwith the hospital at the time the complaint was filed, having resigned therefrom in 1984, viz:
1. Jean (Joan) Venzon (See Order, p. 33, Rollo)

2. Rosario Paclijan
3. Adela Peralta
4. Mauricio Nagales
5. Consesa Bautista
6. Teresita Agcopra
7. Felix Monleon
8. Teresita Salvador
9. Edgar Cataluna; and
10. Raymond Manija ( p.7, Rollo)
The enforcement power of the Regional Director cannot legally be upheld in cases of separated
employees. Article 129 of the Labor Code, cited by petitioner (p. 54, Rollo) is not applicable as said article
is in aid of the enforcement power of the Regional Director; hence, not applicable where the employee
seeking to be paid underpayment of wages is already separated from the service. His claim is purely a
money claim that has to be the subject of arbitration proceedings and therefore within the original and
exclusive jurisdiction of the Labor Arbiter.

Petitioner has likewise questioned the order dated August 4, 1986 of the Regional Director in that it does
not clearly and distinctly state the facts and the law on which the award is based.
We invite attention to the Minister of Labor's ruling thereon, as follows:
Finally, the respondent hospital assails the order under appeal as null and void because
it does not clearly and distinctly state the facts and the law on which the awards were
based. Contrary to the pretensions of the respondent hospital, we have carefully
reviewed the order on appeal and we found that the same contains a brief statement of
the (a) facts of the case; (b) issues involved; (c) applicable laws; (d) conclusions and the
reasons therefor; (e) specific remedy granted (amount awarded). (p. 40, Rollo)
ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED, as regards all persons
still employed in the Hospital at the time of the filing of the complaint, but GRANTED as regards those
employees no longer employed at that time.

Jao, Harris D.
2010-0083
Case Title: Philippine Global Communications vs Ricardo de Vera

Date: June 7, 2005
Petitioner: Philippine Global Communications
Respondent: Ricardo de Vera
Ponente: GARCIA, J.
Facts:
Petitioner Philippine Global Communications, Inc. (PhilCom), is a corporation engaged in the

business of communication services and allied activities, while respondent Ricardo De Vera is a physician
by profession whom petitioner enlisted to attend to the medical needs of its employees. At the crux of the
controversy is Dr. De Vera’s status vis a vis petitioner when the latter terminated his engagement.
It appears that on 15 May 1981, De Vera, via a letter dated 15 May 1981,3 offered his services to the
petitioner, therein proposing his plan of works required of a practitioner in industrial medicine, The parties
agreed and formalized respondent’s proposal in a document denominated as RETAINERSHIP
CONTRACT 4 which will be for a period of one year subject to renewal, it being made clear therein that
respondent will cover "the retainership the Company previously had with Dr. K. Eulau" and that
respondent’s "retainer fee" will be at P4,000.00 a month. Said contract was renewed yearly. 5 The
retainership arrangement went on from 1981 to 1994 with changes in the retainer’s fee. However, for the
years 1995 and 1996, renewal of the contract was only made verbally.
The turning point in the parties’ relationship surfaced in December 1996 when Philcom, thru a
letter6 bearing on the subject boldly written as "TERMINATION – RETAINERSHIP CONTRACT",
informed De Vera of its decision to discontinue the latter’s "retainer’s contract with the Company effective
at the close of business hours of December 31, 1996" because management has decided that it would be
more practical to provide medical services to its employees through accredited hospitals near the
company premises.
Issue:
Whether an employer-employee relationship exist between petitioner and respondent, the

existence of which is, in itself, a question of fact.
Held:
Respondent takes no issue on the fact that petitioner’s business of telecommunications is not
hazardous in nature. As such, what applies here is the last paragraph of Article 157 which, to stress,
provides that the employer may engage the services of a physician and dentist "on retained basis",
subject to such regulations as the Secretary of Labor may prescribe. The successive "retainership"
agreements of the parties definitely hue to the very statutory provision relied upon by respondent.
Deeply embedded in our jurisprudence is the rule that courts may not construe a statute that is free from
doubt. Where the law is clear and unambiguous, it must be taken to mean exactly what it says, and courts
have no choice but to see to it that the mandate is obeyed.26 As it is, Article 157 of the Labor Code clearly
and unequivocally allows employers in non-hazardous establishments to engage "on retained basis" the
service of a dentist or physician. Nowhere does the law provide that the physician or dentist so engaged

thereby becomes a regular employee. The very phrase that they may be engaged "on retained basis",
revolts against the idea that this engagement gives rise to an employer-employee relationship.
With the recognition of the fact that petitioner consistently engaged the services of respondent on a
retainer basis, as shown by their various "retainership contracts", so can petitioner put an end, with or
27
without cause, to their retainership agreement as therein provided.
We note, however, that even as the contracts entered into by the parties invariably provide for a 60-day
notice requirement prior to termination, the same was not complied with by petitioner when it terminated
on 17 December 1996 the verbally-renewed retainership agreement, effective at the close of business
hours of 31 December 1996.
Be that as it may, the record shows, and this is admitted by both parties, 28 that execution of the NLRC
decision had already been made at the NLRC despite the pendency of the present recourse. For sure,
accounts of petitioner had already been garnished and released to respondent despite the previous
29
Status Quo Order issued by this Court. To all intents and purposes, therefore, the 60-day notice
requirement has become moot and academic if not waived by the respondent himself.
WHEREFORE, the petition is GRANTED and the challenged decision of the Court of Appeals
REVERSED and SET ASIDE. The 21 December 1998 decision of the labor arbiter is REINSTATED.

Jao, Harris D.
2010-0083
Case Title: ZAIDA G. RARO vs EMPLOYEES' COMPENSATION COMMISSION and

GOVERNMENT SERVICE INSURANCE SYSTEM
GR NO: GR NO. L-58445
Petitioner: ZAIDA G. RARO
Respondent: Employees Compensation Commission and Government Service Insurance System
Ponente: GUTIERREZ, JR., J.
Facts:
The petitioner states that she was in perfect health when employed as a clerk by the Bureau of
Mines and Geo-Sciences at its Daet, Camarines Norte regional office on March 17, 1975. About four
years later, she began suffering from severe and recurrent headaches coupled with blurring of vision.
Forced to take sick leaves every now and then, she sought medical treatment in Manila. She was then a
Mining Recorder in the Bureau.
The petitioner was diagnosed at the Makati Medical Center to be suffering from brain tumor. By that time,
her memory, sense of time, vision, and reasoning power had been lost.
A claim for disability benefits filed by her husband with the Government Service Insurance System (GSIS)
was denied. A motion for reconsideration was similarly denied. An appeal to the Employees'
Compensation Commission resulted in the Commission's affirming the GSIS decision.
Issue:
Whether brain tumor which causes are unknown but contracted during employment is
compensable under the present compensation laws.
Whether the presumption of compensability is absolutely inapplicable under the present

compensation laws when a disease is not listed as occupational disease.
Held:
In a case like the present one, even medical experts have not determined its cause, and therefore
the duty to prove does not exist for it is absurd for the law to require an impossibility. Thus in the case of
139 SCRA 270 citingCristobal v. ECC, 103 SCRA 329, We ruled as follows:
While the presumption of compensability and the theory of aggravation espoused under
the Workmen's Compensation Act may have been abandoned under the New Labor
Code (the constitutionality of such abrogation may still be challenged), it is significant that
the liberality of the law in general still subsists.
... As agents charged by the law to implement social justice guaranteed and secured by
both 1935 and 1973 Constitutions, respondents should adopt a more liberal attitude in
deciding claims for compensability especially where there is some basis in the facts for
inferring a work connection, (103 SCRA 329, 336).
... Where however, the causes of an ailment are unknown to and or undetermined even
by medical science, the requirement of proof of any casual link between the ailment and

the working conditions petitions should be liberalized so that those who have less in life
will have more in law ... .
... The point is that it is grossly inequitable to require as a condition for an award of
compensation that the claimant demonstrate that his ailment – the cause or origin of
which is unknown to and undetermined even by medical science – was in fact caused or
the risk of contracting the same enhanced by his working conditions. Plainly the condition
would be an impossible one, specially considering that said claimant is most probably not
even conversant with the intricacies of medical science and the claimant invariably bereft
of the material resources to employ medical experts to demonstrate the connection
between the cause and the disease. Considering the liberal character of employment
compensation schemes, the impossible condition should be deemed as not having been
intended and/or imposed. (139 SCRA, pp. 275-276).
... As an employee, he had contributed to the funds of respondent for 34 years until his
forced retirement. In turn respondent should comply with its duty to give him the fullest
protection, relief and compensation benefits as guaranteed by law. (Ibid., p. 277).
In the more recent case of Flaviano Nemaria, 1 Petitioner versus Employees' Compensation Commission
and Government Service Insurance System (Ministry of Education and Culture), Respondents,
promulgated October 28, 1987 and following the rule We enunciated in the Mercado case, We stated:
Thus the requirement that the disease was caused or aggravated by the employment or
work applies only to an illness where the cause can be determined or proved. Where
cause is unknown or cannot be ascertained, no duty to prove the link exist For certainly,
the law cannot demand an impossibility.
PREMISES CONSIDERED, it is my humble opinion that this petition should be GRANTED. The decision
of the respondent Employees Compensation Commission should be SET ASIDE and another should be
rendered ordering the respondents to pay the herein petitioner the full amount of compensation under
Presidential Decree No. 626 as amended.

Jao, Harris D.
2010-0083
Case Title: Southeast Asian Fisheries Development Center Aquaculture Department vs National
Labor Relations Commission and Juvenal Lazaga
GR NO: GR NO. 86773
Petitioner: Southeast Asian Fisheries Development Center Aquaculture Department
Ponente: NOCON, J:
Facts:
SEAFDEC – AQD is a department of an international organization, the Southeast

Asian Fisheries Development Center, organized through an agreement entered into in Bangkok,
Thailand on December 28, 1967 by the governments of Malaysia, Singapore, Thailand, Vietnam,
Indonesia, and the Philippines with Japan as the sponsoring country.
On April 20, 1975, private respondent Juvenal Lazaga was employed as a Research Associate
on a probationary basis by the SEAFDEC – AQD and was appointed Senior External Affairs Officer on
January 5, 1983 with a monthly basic salary of P8,000.00 and a monthly allowance of
P4,000.00. Thereafter, he was appointed to the position of Professional III and designated as Head of
External Affairs Office with the same pay and benefits.
On May 8, 1986, petitioner Lacanilao in his capacity as Chief of SEAFDEC – AQD sent a notice of
termination to private respondent informing him that due to the financial constraints being experienced by
the department, his services shall be terminated at the close of office hours on May 15, 1986 and that he
is entitled to separation benefits equivalent to one month of his basic salary for every year of service plus
other benefits.
Upon petitioner SEAFDEC AQD’s failure to pay private respondent his separation pay, the latter filed on
March 18, 1987 a complaint against petitioners for non-payment of separation benefits plus moral
damages and attorney’’s fees with the Arbitration Branch of the NLRC .
Issue:
Whether NLRC has jusrisdiction over the said case.
Held:
Respondent NLRC’s citation of the ruling of this court in Lacanilao vs De Leon to justify its
assumption of jurisdiction over SEAFDEC is misplaced. On the contrary, the court in said case explained
why it took cognizance of the case.
WHEREFORE, finding SEAFDEC – AQD to be an international agency beyond the jurisdiction of the
courts or local agency of the Philippine Government, the questioned decision and resolution of the NLRC
dated July 26, 1988 and January 9, 1989, respectively, are hereby REVERSED and SET ASIDE for
having been rendered without jurisdiction. No costs.

Maranatha M. Manginsay
2011-0043
Case title: GSIS VS. COURT OF APPEALS AND ROSA BALAIS

G.R. No.: G.R. No. 117572
Petitioner: Government Service Insurance System (GSIS)
Respondents: The Hon. Court Of Appeals and Rosa Balais
Ponente: J. Romero
Facts:
On December 17, 1989, Rosa Balais suddenly experienced chills, followed by loss of
consciousness. She suffered from Subarachnoid Hemorrhage Secondary to Ruptured Aneurysm,
otherwise known as stroke. Even if Balais had undergone an operation, she could not perform her duties
well so she was forced to retire early from the government service on March 1, 1990 at the age of sixty-
two (62) years old.
On March 13, 1990, private respondent filed a claim for disability benefits with the GSIS.
However, the GSIS Medical Evaluation and Underwriting Department which evaluated her claim found no
basis to alter its findings. The results of the physical examination did not satisfy the criteria for permanent
total disability.
Issue:
Whether or not the ailment of Subarachnoid Hemorrhage Secondary to Ruptured Aneurysm is

considered as a permanent total disability.
Held:
A person's disability may not manifest fully at one precise moment in time but rather over a period
of time. It is possible that an injury which at first was considered to be temporary may later on become
permanent or one who suffers a partial disability becomes totally and permanently disabled from the
same cause. The ruling also stressed out that "disability should not be understood more on its medical
significance but on the loss of earning capacity." Permanent total disability can be the "lack of ability to
follow continuously some substantially gainful occupation without serious discomfort or pain and without
material injury or danger to life." Balais retired at the age of 62 because of her impaired physical
condition. This shows that her disability is permanent and total.
The petition is denied and the challenged decision of the Court Of Appeals is affirmed.

2011-0043
Case title: MANUZON VS. ECC

G.R. No.: G.R. No. 88573
Date: June 25, 1990
Petitioner: Consorcia F. Manuzon
Respondents: Employees’ Compensation Commission (ECC) and Government Service
Insurance System (GSIS), Mindanao State University (MSU), Marawi City
Ponente: J. Gancayco
Facts:
Petitioner's late husband started his government service as a national language researcher in
December 1957 at the Institute of National Language. Later he transferred to the Mindanao State
University in Marawi City as an instructor in June 1974. He rose to become assistant professor. In
October 1982, he was diagnosed with Hemiparesis, otherwise known as paralysis. On June 17, 1987, he
died of acute Myocardial Infraction.
Petitioner Manuzon requested the GSIS for a continued pension. She was granted additional
pension up to January of 1988 only. GSIS denied Manuzon’s request stating that her husband's death
due to Myocardial Infraction was evaluated not compensable having occurred 4-½ years after his
retirement from the service. Moreover, his retirement no longer established an employer-employee
relationship.
Issue:
Whether or not petitioner is entitled to the death benefits of her late husband.
Held:
Petitioner’s late husband was compelled to retire from the service because of disability that was
work-oriented. Permanent total disability means incapacity to perform gainful work which is expected to
be permanent. The Employees Compensation Commission denied petitioner's claim because the cause
of death, Myocardial Infraction, came four and one half years after his retirement caused by work-oriented
paralysis arising from cerebrovascular attack. He had to retire because of paralysis caused by that cardio
vascular attack when he was an assistant professor. He died after his compulsory retirement due to total
disability, caused by cardio vascular attack or myocardial infraction. The disease was work-oriented
because of the nature of his employment as a professor. Death benefits must be granted to the primary
beneficiaries who became disabled because of causes that are work-oriented. The rule applies even if
that disabled person later dies because of the same cause or related cause.
The decision is reversed. The heirs of Mr. Manuzon are entitled to the benefits they are claiming.

2011-0043
Case title: EMPLOYEES’ COMPENSATION COMMISSION VS. E. SANICO

G.R. No.: G.R. No. 134028
Petitioner: Employees’ Compensation Commission (Social Security System)
Respondent: Edmund Sanico
Ponente: J. Kapunan
Facts:
Respondent Sanico was a former employee of John Gotamco and Sons. He worked in as “wood
filer” from 1986 until he was separated from employment on December 31, 1991 due to Pulmonary
Tuberculosis (PTB). Sanico filed with the Social Security System (SSS) a claim for compensation benefits
but SSS denied the claim on the ground of prescription. The SSS ruled that under Article 201 of the Labor
Code, a claim for compensation shall be given due course only when the same is filed with the System
three (3) years for the time the cause of action accrued. In Sanico’s case, the SSS reckoned the three-
year prescriptive period on September 21, 1999, when his PTB first became manifest.
Issue:
Whether or not respondent’s claim for compensation benefit had already prescribed when he filed
his claim.
Held:
Disability should not be understood more on its medical significance but rather on the loss of an
employee’s earning capacity. Permanent total disability means disablement of an employee to earn
wages in the same kind of work, or work of similar nature that he was trained for. It does not mean
absolute helplessness. The prescriptive period for filing compensation claims should be reckoned from
the time the employee lost his earning capacity, i.e., terminated from employment, due to his illness and
not when the same first became manifest. Sanico’s employment was terminated on December 31, 1991
due to his illness then he filed his claim for compensation benefits on November 9, 1994. Accordingly,
Sanico’s claim was filed within the three-year prescriptive period under Article 201 of the Labor Code.
Therefore, the petition is dismissed.

2011-0043
Case title: SUANES VS. THE WORKMEN'S COMPENSATION COMMISSION

G.R. No.: L- 42808
Petitioner: Rosario Vda. De Suanes
Respondents: The Workmen’s Compensation Commission and The Republic of the
Philippines (Bureau of Public Highways)
Ponente: J. Feliciano
Facts:
Artemio A. Suanes was a government employee. From 1933 to 1970, he served as market
collector, municipal councilor, and a construction capataz of the Bureau of Public Highways (BPH),
Batangas Provincial Office. He was holding his current position as a construction capataz when he died of
Cardio-respiratory Arrest due to Cerebrovascular Accident in June 21, 1973. Rosario, the surviving
spouse of Artemio Suanes, filed with the Workmen's Compensation Unit (WCU) a claim for compensation
under the applicable provisions of the Workmen's Compensation Act (Act No. 3428, as amended).
BPH controverted the claim because it had been filed against the wrong party. It should be filed
on the Provincial Engineer's Office of the Provincial Government of Batangas, not in BPH.
Issue:
Whether or not petitioner had a valid claim for death benefits.
Held:
The petitioner's original claim named the BPH as the decedent's employer. However, in her
Motion to Set Aside Order of Dismissal, petitioner designated the Republic of the Philippines as the
respondent, which refers to the Bureau of Public Highways. Thus, the BPH and the Office of the
Provincial Engineer of Batangas are both governmental offices and both are embraced in the term
Republic of the Philippines,' for purposes of the Workmen's Compensation Act. The funds of the BPH and
the fund of the Office of the Provincial Engineer of Batangas, are equally government funds. Artemio's
ailment entered in the course of his employment either with the BPH or the Office of the Batangas
Provincial Engineer. It is well settled that, under the Workmen's Compensation Act, petitioner is
accordingly relieved of the burden of proving causation between the illness and the employment in view
of the legal presumption that said illness arose out of the decedent's employment.
The decision is reversed. The petitioner is given reimbursement for the doctors, medical and
hospital bills incurred in connection with the decedent's last illness, in addition to any other applicable
death benefits.

2011-0043
Case title: PHIL. FEDERATION OF CREDIT COOPERATIVES, INC. VS. NLRC

G.R. No.: GR. No. 121071
Petitioners: Phil. Federation of Credit Cooperatives, Inc. and Fr. Benedicto Jayoma
Respondents: National Labor Relations Commission (First Division) and Victoria Abril
Ponente: J. Romero
Facts:
Victoria Abril was employed by petitioner Philippine Federation of Credit Cooperatives, Inc.
(PFCCI) from 1982 to 1988 as a Junior Auditor/Field Examiner. She went on leave when she gave birth to
a baby girl but upon her return, she discovered that a certain Vangie Santos had been permanently
appointed to her former position. She, nevertheless, accepted the position of Regional Field Officer with a
probationary period of six (6) months. After that, her employment was terminated. She then filed a
complaint of illegal dismissal against PFCCI.
Issue:
Whether or not respondent Abril is considered as a regular employee and thus entitled to the
security of tenure under labor laws.
Held:
There are three kinds of employees: (a) regular employees or those whose work is necessary or
desirable to the usual business of the employer; (b) project employees or those 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 or where the work or services to be performed
is seasonal in nature and the employment is for the duration of the season; and (c) casual employees or
those who are neither regular nor project employees. Abril already rendered at least one year of service
which makes her a regular employee. Moreover, this entitles her to the security of tenure guaranteed
under the Constitution and labor laws. She also completed the probationary period which makes her a
regular employee and dismissing her is illegal.
Therefore, the petition is dismissed.

2011-0043
Case title: DE LEON VS. NLRC

G.R. No.: G.R. No. 70705
Petitioner: Moises de Leon
Respondents: National Labor Relations Commission (NLRC) and La Tondeña
Ponente: C.J. Fernan
Facts:
Petitoner de Leon was employed by private respondent La Tondeña Inc. on December 11, 1981,
at the Maintenance Section. After a service of more than one (1) year, de Leon requested that he be
included in the payroll of regular workers. However, La Tondeña dismissed de Leon which compelled him
to file a complaint for illegal dismissal.
Issue:
Whether or not petitioner is only a casual worker and not a regular employee.
Held:
Petitioner was not a mere casual employee but a regular employee. It can be determined by
considering the nature of the work performed and its relation to the scheme of the particular business or
trade in its entirety. If the employee has been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems the repeated and continuing need for
its performance as sufficient evidence of the necessity if not indispensability of that activity to the
business. Hence, the employment is also considered regular, but only with respect to such activity and
while such activity exists.
The petition is granted.

2011-0043
Case title: VIOLETA VS. NLRC

G.R. No.: G.R. No. 119523
Petitioners: Isabelo Violeta and Jovito Baltazar
Respondents: National Labor Relations Commission and Dasmariñas Industrial and
Steelworks Corporation
Ponente: J. Regalado
Facts:
Petitioners Isabelo Violeta and Jovito Baltazar were former employees of Dasmariñas Industrial
and Steelworks Corporation (DISC). They were hired from one project to another from 1980 to 1992.
Upon their separation, petitioners executed a quitclaim wherein they declared that they have no claim
against DISC. Contending that they are already regular employees who cannot be dismissed on the
ground of completion of the particular project where they are engaged, petitioners filed two separate
complaints for illegal dismissal DISC.
Issue:
Whether or not petitioners are only casual workers and not regular employees.
Held:
Although the appointment contracts of petitioners specified fixed terms or periods of employment,
the fact that they were hired and transferred from one project to another made both petitioners non-
project employees who cannot be terminated by reason alone of the completion of the project. The
principal test for determining whether particular employees are properly characterized as ”project
employees,” as distinguished from “regular employees,” is whether or not the “project employees” were
assigned to carry out a “specific project or undertaking,” the duration (and scope) of which were specified
at the time the employees were engaged for that project. Project employees are those workers hired (1)
for a specific project or undertaking, and (2) the completion or termination of such project or undertaking
has been determined at the time of engagement of the employee. Petitioners are then regular employees
and not project employees as said by NLRC. Petitioners’ dismissal could not be justified by the
completion of their items of work.
Therefore, the petition is granted.

2011-0043
Case title: ROMARES VS. NLRC

G.R. No.: G.R. No. 122327
Petitioner: Artemio J. Romares
Respondents: National Labor Relations Commission and PILMICO Foods Corporation
Ponente: J. Martinez
Facts:
Petitoner Romares worked at PILMICO’s Maintenance/Projects/Engineering Department

performing maintenance work, particularly the painting of company buildings, maintenance chores, and
sometimes operating company equipment. He was hired, terminated and rehired again for three times in
a span of more than three (3) years from September 1989 to January 1983. He performed the same
functions at work. However, he was illegally dismissed.
Issue:
Whether or not petitioner is only a casual worker and not a regular employee.
Held:
There are two kinds of regular employees: (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 or broken, with respect to
the activity in which they are employed. Where an employee has been engaged to perform activities
which are usually necessary or desirable in the usual business of the employer, such employee is
deemed a regular employee and is entitled to security of tenure notwithstanding the contrary provisions of
his contract of employment.

2011-0043
Case title: PHILIPPINE FRUIT AND VEGETABLE INDUSTRIES, INC. VS. NLRC
G.R. No.: G.R. No. 122122
Date: July 20, 1999
Petitioners: Philippine Fruit and Vegetable Industries, Inc. and Mr. Pedro Castillo
Respondents: National Labor Relations Commission (NLRC) and Philippine Fruit and
Vegetables Workers Union- Tupas Local Chapter
Ponente: J. Kapunan
Facts:
Philippine Fruit and Vegetable Industries, Inc. (PFVII) is a government-owned and controlled
corporation engaged in the manufacture and processing of fruit and vegetable purees for export. On
September 5, 1988 herein private respondent Philippine Fruit and Vegetable Workers Union-Tupas Local
Chapter, for and in behalf of 127 of its members, filed a complaint for unfair labor practice and illegal
dismissal with damages against petitioner corporation. Private respondent alleged that many of its
complaining members started working for PFVII in January or February 1983 until their dismissal on
different dates in 1985, 1986, 1987 and 1988.
Petitioner Pedro Castillo is the former President and General Manager of petitioner PFVII.
Petitioners further argue that PFVII operates on a seasonal basis and the complainants who are
members of respondent union are seasonal workers because they work only during the period that the
company is in operation. Its operation starts only in February and ceases by the end of the same month
when the supply is consumed. It then resumes operations at the end of April or early May, depending on
the availability of supply and ceases operation in June. The severance of complainants' employment from
petitioner corporation was a necessary consequence of the nature of seasonal employment; and since
complainants are seasonal workers as defined by the Labor Code, they cannot invoke any benefit.
Issue:
Whether or not respondents are seasonal employees whose employments ceased during the off-
season due to no work and not due to illegal dismissal.
Held:
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 employers, except where the employment has been fixed
for a specific project. An employment shall be deemed to be casual if it is not covered by the preceding
paragraph; provided, that, any employee who has rendered at least one year of service whether such
service is continuous or broken, shall be considered a regular employee with respect to the activity in
which he is employed and his employment shall continue while such actually exists.
An employment shall be deemed regular where the employee: a) has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer; or b)
has rendered at least one year of service, whether such service is continuous or broken, with respect to
the activity in which he is employed. The work of complainants as seeders, operators, sorters, slicers,
janitors, drivers, truck helpers, mechanics and office personnel is without doubt necessary in the usual
business of a food processing company like petitioner PFVII.

While it may be true that some phases of petitioner company's processing operations is
dependent on the supply of fruits for a particular season, the other equally important aspects of its
business, such as manufacturing and marketing are not seasonal. The fact is that large-scale food
processing companies such as petitioner company continue to operate and do business throughout the
year even if the availability of fruits and vegetables is seasonal.
Therefore, the petition is reversed with respect to the union members, who did not adduce
evidence in support of their claims.

2011-0043
Case title: E. GANZON, INC., VS. NLRC

G.R. No.: G.R. No. 123769
Petitioner: E. Ganzon Inc.
Respondents: National Labor Relations Commission (NLRC), Rene Permaran, Nerio
Valenzuela, Rodrigo Prado, Mario Plaquia, Ernesto Mateo, Rommel
Naadat, Artemio Agosto, Salvador Urbanozo, Cesar Castillo, and
Ponciano del Rosario
Ponente: Bellosillo, J.
Facts:
E. Ganzon, Inc., is engaged in the construction business. It manufactures its own building
materials, and all kinds of aluminum and concrete products. Respondents said that during the period of
their employment from 1984 to 1991, insurance premiums were deducted from their salaries without their
consent, and they were not given overtime pay, legal holiday pay, premium pay for holiday and rest day,
five (5) days incentive leave pay despite having rendered services for more than a year, vacation/sick
leave pay and 13th month pay.
Valenzuela, Rodrigo Prado, Mario Plaquia, Ernesto Mateo, Rommel Naadat, Artemio Agosto, Salvador
Urbanozo, Cesar Castillo, and Ponciano del Rosario
Petitioner E. Ganzon Inc. countered that the complainants were all contractual, project, temporary or
casual employees as evidenced by their employment contracts expressly providing that the acceptance of
their services was based on the need for their skill such that upon completion of the project and/or when
reduction of the workforce was necessary, their services would be terminated. Their employment
contracts were renewed every three (3) months.
Issue:
Whether or not respondents are contractual or project employees, as borne by their respective
employment contracts.
Held:
Article 280 of the Labor Code states that written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties 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 services to be performed is seasonal in nature and the employment is for
the duration of the season.
Determining a regular employment is the reasonable connection between the particular activity
performed by the employee in relation to the usual business or trade of the employer. The test is whether
the former is usually necessary or desirable in the usual business or trade of the employer. The
connection can be determined by considering the nature of the work performed and its relation to the
scheme of the particular business or trade in its entirety. Also, if the employee has been performing the
job for at least one year, even if the performance is not continuous or merely intermittent, the law deems
the repeated and continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is also considered regular, but
only with respect to such activity and while such activity exists.

Therefore, respondents are declared regular employees of E. Ganzon, Inc. They are likewise
declared to have been illegally dismissed. The petitioner is ordered to reinstate them without loss of
seniority rights and other privileges and to grant them full back wages, inclusive of allowances, and other
benefits or their monetary equivalent computed from the time compensation was withheld from them up to
actual reinstatement.

2011-0043
Case title: LAZO VS. EMPLOYEES' COMPENSATION COMMISSION

G.R. No.: G.R. No. 78617
Date: June 18, 1990
Petitioner: Salvador Lazo
Respondents: Employees’ Compensation Commission (ECC) and Government Service
Insurance System (GSIS)
Ponente: Padilla, J.
Facts:
Petitioner Lazo is a security guard of the Central Bank of the Philippines assigned to its main
office in Malate, Manila. His regular tour of duty is from 2:00 o'clock in the afternoon to 10:00 o'clock in
the evening. On June 18, 1986, he rendered an overtime duty from 2:00 o'clock in the afternoon up to
5:00 o'clock in the morning of June 19, 1986. On his way home, the passenger jeepney he was riding on
turned turtle due to the slippery road; he then sustained injuries. He filed a claim for disability benefits but
GSIS denied for the reason that he was not at his work place performing his duties when the incident
occurred.
Issue:
Whether or not the injuries he sustained due to the vehicular accident should be construed as
"arising out of or in the course of employment" and thus, compensable.
Held:
The petitioner was asked to go on overtime since the reliever did not arrive. He did not deviate
from his usual, regular homeward route. The Employees Compensation Commission should adopt a
liberal attitude in favor of the employee in deciding claims for compensability, especially where there is
some basis in the facts for inferring a work connection to the accident.
As embodied in Article 4 of the New Labor Code which states that “all doubts in the
implementation and interpretation of the provisions of the Labor Code including its implementing rules
and regulations shall be resolved in favor of labor.”
Therefore, the decision appealed from is reversed and set aside.

2011-0043
Case title: INTERTROD MARITIME INC. VS. NLRC

G.R. No.: G.R. No. 81087
Date: June 19, 1991
Petitioner: Intertrod Maritime Inc. and Troodos Shipping Co.
Respondents: National Labor Relations Commission (NLRC) and Ernesto de la Cruz
Ponente: J. Padilla
Facts:
On May 10, 1982, respondent de la Cruz signed a shipboard employment contract with
petitioners Troodos Shipping Company and Intertrod Maritime, Inc. to serve as Third Engineer and
boarded the sister vessel, M/T "AFAMIS".
On August 26, 1982, while the M/T "Afamis" was at Port Pylos, Greece, private respondent
requested for relief, due to a "personal reason." The Master of the ship approved his request but him
respondent that repatriation expenses were for his account and that he had to give thirty (30) days notice
in view of the Clause 5 of the employment contract so that a replacement for him could be arranged. Four
days after private respondent's request for relief, the Master "signed him off". The Master of the ship
forced him to step out in Egypt despite his protests and he had no other recourse but to return to the
Philippines at his own expense. Petitioners said that the contract was cut short because of private
respondent's own request for relief; it was proper that he should pay for his repatriation expenses in
accordance with the provisions of their employment contract.
Issue:
Whether or not respondent de la Cruz’s termination is illegal.
Held:
Resignation is the voluntary act of an employee who "finds himself in a situation where he
believes that personal reasons cannot be sacrificed in favor of the exigency of the service, he has no
other choice but to disassociate himself from his employment." Once resignation is accepted, it may not
be withdrawn without the consent of the employer. In this case, the Master had already accepted the
resignation and, although the private respondent was being required to serve the thirty (30) days notice
provided in the contract, his resignation was already approved. When he later signified his intention of
continuing his work, it was already up to the petitioners to accept his withdrawal of his resignation. The
mere fact that they did not accept such withdrawal did not constitute illegal dismissal for acceptance of
the withdrawal of the resignation was the petitioners' sole prerogative.
Once an employee resigns and his resignation is accepted, he no longer has any right to the job.
If the employee later changes his mind, he must ask for approval of the withdrawal of his resignation from
his employer, as if he were re-applying for the job. It will then be up to the employer to determine whether
or not his service would be continued.

2011-0043
Case title: MANILA BROADCASTING CO. VS. NLRC

G.R. No.: G.R. No. 121975

Petitioner: Manila Broadcasting Company
Respondents: National Labor Relations Commission, Hon. Ricardo Olairez, and Samuel
L. Bangloy
Ponente: J. Mendoza
Facts:
Respondent Bangloy was a production supervisor and a radio commentator of the DZJC-AM
radio station in Laoag City. The radio station is owned by petitioner Manila Broadcasting Company. He
applied for leave of absence for 50 days, from March 24 to May 13, 1992 in order to “run for Board
Member” in Ilocos Norte under the Kilusang Bagong Lipunan (KBL) but lost. He tried to return to work, but
was not allowed by petitioner on the ground that his employment had been terminated.
He was later informed that he could not be re-employed because: 1) there is a company policy
considering any employee who runs for public office resigned. 2) A maximum of 30 days only is allowed
for leave. 3) Although R.A. No. 6646 requires radio commentators who file certificates of candidacy to go
on leave during the campaign period, private respondent was not required to take such leave as
production supervisor hence he could not have taken a leave for said position. 4) The private
respondent’s leave was not in accordance with R.A. No. 6646 which allows leave of absence only from
the time of the filing of the certificate of candidacy until the day of the election.
Issue:
Whether or not respondent Bangloy was illegally and unjustly dismissed.
Held:
Under Art. 282(a) of the Labor Code, an employee may be dismissed for willful disobedience of
the lawful orders of his employer in connection with his work. To justify the dismissal of an employee on
this ground, it must be shown that his conduct was willful and that the order violated (1) is reasonable
and lawful, (2) is known to the employee, and (3) pertains to the duties which the employee has been
engaged to discharge.
Respondent claims that when he filed his application for leave, he was not aware of the company
policy considering employees who file certificates of candidacy for elective public office as resigned. The
policy is also not written. Respondent believed in good faith that notwithstanding the company policy in
question, he could go on leave without resigning in order to run for a seat in the Sangguniang
Panlalawigan. Considering that at the time of his dismissal, he had been in the company for six (6) years,
dismissal would be too severe. Suspension for one month would be a sufficient penalty for his
unauthorized absences.
Therefore, the decision is affirmed.

Montilla, Rosalie M.
2011-0038
ABAYA VS ECC
GR No: L-64255
Date: Aug. 19, 1989
Petitioner: Evaristo Abaya Jr.
Ponente: Cruz, J.
FACTS:
Petitioner Abaya retired as a principal teacher at the age of 60 on after serving the government in various
capacities for 38 and a half years. He applied with GSIS for medical services, appliance and supplies and
permanent total disability benefits under basis of cardiovascular disease and cerebral encephalopathy
secondary to hypertension. However, his application was denied for the grounds that his ailment was not
an occupational disease. Upon appeal to the ECC it was sent back to the GSIS for reception of additional
evidence showing that the applicant's illness was work-connected. Thereafter, the GSIS delivered to the
petitioner a check in the amount of P l,218.25, representing his permanent partial disability benefits for
the period from October 15,1975, to March 1976. After his motion for reconsideration was denied, the
petitioner appealed once again to the ECC, which this time sustained the GSIS. He was then referred to
the Citizens Legal Assistance Office, hence this petition.
ISSUE:
 Whether or not the petitioner’s disability is permanent total?
HELD: YES. Sec. 2 Rule VII of the Amended Rules on Employees Compensation states that:
Sec. 2. Disability—(a) A total disability is temporary if as a result of the injury or sickness the employee is
unable to perform any gainful occupation for a continuous period not exceeding 120 days, except as
otherwise provided in Rule X of these Rules.
(b) A disability is total and permanent if as a result of the injury or sickness the employee is unable to
perform any gainful occupation for a continuous period exceeding 120 days except as otherwise provided
for in Rule X of these Rules.
(c) A disability is partial permanent if as a result of the injury or sickness the employee suffers a
permanent partial loss of the use of any part of his body.
In the case, the petitioner opted to retire when he was only 60 years of age although he was entitled to
continue during good behavior for five more years. It indicates that he was no longer able to cope with his
work because of his illness and therefore falling under the category of Sec. 2 (b) of Rule VII of the
Amended Rules on Employees Compensation which is Permanent Total Disability.
The appealed decision is reversed.

2011-0038
ALU – TUCP VS. NLRC

GR No: 109902
Petitioner: ALU-TUCP, Representing Members: Alan Barinque, with 13 others, namely: Engr. Alan G.
Barinque, Engr. Darrell Lee Eltagonde, Eduard H. Fookson, JR., Romeo R. Sarona,
Russsell Gacus, Jerry Bontilao, Eusebio Marin Jr., Leonido Echavez, Bonifacio Mejos,
Edgar S. Bontuyan, Jose G. Garguena Jr., Osias Dandasan, and Gerry Fetalvero,
Respondent: NLRC and National Steel Corporation
FACTS:
Petitioners were employed by respondent NSC in connection with its Five Year Expansion Program for
varying lengths of time when they were separated from NSC's service. They filed complaints at NLRC for
unfair labor practice, regularization and monetary benefits. The Labor Arbiter declared the petitioners as
regular project employees. It is said that those in such classification shall continue their employment as
such for as long as the project exists and who shall be entitled to the salary of a regular employee. Both
parties appealed the decision, which was later affirmed with modifications by the NLRC. The petitioners
invoked Article 280 of the Labor Code arguing that they are “regular” employees due to the reason that
their jobs were necessary and essential to NSC's business and that they had rendered services for 6
years already.
ISSUE:
 Whether or not the petitioners are project employees.
HELD:
YES. Article 280 of the Labor Code states that:
Regular and Casual Employment — The provisions of the written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, and employment shall be deemed to
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 services to be performed is seasonal in nature
and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided,
That, any employee who has rendered at least one year service, whether such service is continuous or
broken, shall be considered a regular employee with respect to the activity in which he is employed and
his employment shall continue while such actually exists.
The component projects embraced in the Five Year Expansion Program were different from the regular
business of NSC. There was nothing in the facts to prove that the petitioners were hired for other
purposes. Also, the petitioners’ service to NSC of more than six years should qualify them as regular
employees are without legal basis. The simple fact that the employment of petitioners as project
employees had gone beyond one year does not detract from their status as project employees.
Petition for Certiorari is hereby DISMISSED.

2011-0038
CEBU MARINE BEACH RESORT VS NLRC

GR No. 143252
Date: Oct. 23, 2003
Petitioner: Cebu Marine Beach Resort, Ofelia Perez, Tsuyoshi Sasaki
Respondent: National Labor Relations Commission, Ric Rodrigo Rodriguez, Manulito Villegas, Lorna G.
Igot
Ponente: Sandoval-Guttierez, J.
FACTS:
On January 1990, Cebu Marine Beach Resort started operations with the recruitment of its
employees including petitioners Rodriguez, Villegas and Igot and became fully operational on March
1990. The respondents had to undergo a special training in Japanese customs, traditions, and discipline,
as well as hotel and resort services. This special training was supervised by petitioner Sasaki.
On May 24, 1990, Sasaki suddenly scolded respondents and hurled brooms, floor maps, iron
trays, fire hoses and other things at them. Respondents staged a walk-out as a sign of protest and
gathered in front of the resort. The former reacted by shouting at them to go home and never to report
back to work. Thus the employees filed with the Regional Arbitration Branch at Cebu City a complaint for
illegal dismissal and other monetary claims against petitioners.
On May 28, 1990, the company through its acting general manager Pelaez sent letters to
respondents requiring them to explain why they should not be terminated from employment on the
grounds of abandonment of work and failure to qualify with the standards for probationary employees.
The Labor Arbiter rendered a Decision date March 23, 1993 dismissing respondents’ complaint but
directing them to immediately report back to work.
On June 28, 1994, NLRC reversed the Labor Arbiters Decision, declaring that the respondents
were dismissed illegally and ordering their reinstatement with payment of full back wages from May 24,
1990 up to their actual reinstatement or in lieu thereof, the payment of their respective separation pay
from May 24, 1990 up to the date they were supposed to be reinstated, as well as attorney’s fees.
On February 28, 1995, the NLRC issued a Resolution declaring that the back wages shall
correspond only to the period from May 24, 1990 (the date of their dismissal) until March 23, 1993 (when
they were ordered reinstated by the Labor Arbiter), subject to the deduction of their earnings from other
sources during the pendency of the appeal.
On March 22, 1995, petitioners filed with this Court a petition for certiorari, prohibition and
injunction with prayer for the issuance of a temporary restraining order. On November 5, 1999, the Court
of Appeals rendered its Decision affirming with modification the Decision and Resolution of the NLRC that
the back wages should be computed from the date of the dismissal of private respondents until the finality
of this Decision without deduction from earnings during the pendency of the appeal and the award of
separation pay must be equivalent to one-half months’ salary for every year of service commencing
likewise on the date of the dismissal of private respondents until the finality of this Decision. Petitioner
filed a motion for reconsideration, but was denied. Hence, a petition for review on certiorari was done.

ISSUE:
 Whether or not the respondents were illegally dismissed from employment by petitioner
company?
HELD:
NO. Article 282 (now Article 281) of the Labor Code states that Probationary employment shall
not exceed six months from the date the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The services of an employee who has been
engaged in a probationary basis may be terminated for a just cause or when he fails to qualify as a
regular employee in accordance with reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is allowed to work after a probationary period
shall be considered a regular employee. In the case, petitioners terminated respondents’ probationary
employment on the grounds of persistent abandonment despite being asked to explain why they should
not be terminated and failure to qualify for the positions for which they were employed. While the
employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is
qualified for permanent employment, the probationer, on the other hand, seeks to prove to the employer
that he has the qualifications to meet the reasonable standards for permanent employment which
obviously were made known to him. Thus, assailed Decision and Resolution of the Court of Appeals
dated November 5, 1999 and April 18, 2000 are hereby affirmed with modification.

2011-0038
DE LA CRUZ JR VS NLRC
GR No: 145417
Date: Dec. 11, 2003
Petitioner: Florencio M. De la Cruz Jr.
Respondent: National Labor Relations Commission,
Shemberg Marketing Corporation, Ernesto Dacay Jr.
Ponente: Corona, J.
FACTS:
On May 27, 1996, petitioner de la Cruz Jr. was hired by Shemberg Marketing Corporation as
senior sales manager. On September 14, 1996, the management decided to terminate his services. The
only reason De la Cruz was told by HR manager Llanto was that it had something to do with the drop in
the company’s sales and further attempts to negotiate were not entertained. Petitioner filed a complaint
for illegal dismissal, non-payment of salary, back wages, 13th month pay and damages against
Shemberg, Dacay, Jr. and Llanto. Shemberg answered by explaining that De la Cruz was terminated for
his failure to meet the required company standards and for loss of trust and confidence.
On August 25, 1997, the labor arbiter ruled that de la Cruz was illegally dismissed and granted
his claim for separation pay, back wages and unpaid wages totaling P438,750. Other claims and the
cases against respondents Dacay, Jr. and Llanto are dismissed for lack of merit. The NLRC dismissed an
appeal dated May 13, 1998. On July 9, 1999, the NLRC partially granted the motion for reconsideration
and modified its previous resolution ordering respondent to pay de la Cruz P23,900. De la Cruz filed a
motion for reconsideration of the above resolution but the same was denied by the NLRC on November
19, 1999. De la Cruz elevated the case to the Court of Appeals on a petition for certiorari but it was
dismissed for lack of merit. A subsequent motion for reconsideration was also denied on September 8,
2000.
ISSUE:
 Whether or not petitioner was illegally dismissed and thus should be awarded his separation pay,
back wages and unpaid wages?
HELD:
NO. Article 281 of the Labor Code expresses that Probationary employment shall not exceed six
(6) months from the date the employee started working, unless it is covered by an apprenticeship
agreement stipulating a longer period. The services of an employee who has been engaged on a
probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in
accordance with reasonable standards, made known by the employer to the employee at the time of his
engagement. An employee who is allowed to work after a probationary period shall be considered a
regular employee. In the case, petitioner was only employed for 4 months, thus still being considered as
under probationary employment. As a probationary employee, he enjoyed only temporary employment
status. This meant that he was terminable anytime, permanent employment not having been attained in
the meantime. The employer could well decide he no longer needed the probationary employee’s
services or his performance fell short of expectations, etc. As long as the termination was made before
the expiration of the six-month probationary period, the employer was well within his rights to sever the
employer-employee relationship. Petition was dismissed for lack of merit.

2011-0038
ESCORPIZO VS UNIVERSITY OF BAGUIO

GR No. 121962
Date: Apr. 30, 1999
Petitioner: Esperanza C. Escorpizo, University of Baguio Faculty Education Workers Union
Respondent: University of Baguio and Virgilio Bautista, National Labor Relations Commission
Ponente: Quisumbing, J.
FACTS:
On June 13, 1989, petitioner Escorpizo was hired by University of Baguio as a high school
teacher. It was on March 18, 1991 when the university informed Escorpizo that her employment was
being terminated at the end of the school semester for failure to pass the professional board examination
for teachers (PBET). As her appeal to be given a second chance was considered, she was allowed to
teach the next school year. Her continued employment was conditioned on her passing the PBET.
Escorpizo failed again on the subsequent PBET and thus was not included in the list of those who will
teach on the next school year.
On June 8, 1992, Escorpizo passed the PBET. But on June 15, 1992, the university no longer
renewed her contract of employment on the ground that she failed to qualify as a regular teacher. She
filed on July 16, 1992 a complaint for illegal dismissal, payment of back wages and reinstatement against
the university. On June 22, 1993, the labor arbiter ruled that respondent university had a permissible
reason in not renewing the employment contract but the labor official ordered the reinstatement of
Escorpizo. An instant petition imputing grave abuse of discretion on the part of public respondent in
affirming the decision of the labor arbiter is now done by the petitioner.
ISSUE:
 Whether or not Escorpizo is still entitled to security of tenure?
HELD:
NO. Article 281 of the Labor Code expresses that the services of an employee who has been
engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a
regular employee in accordance with reasonable standards, made known by the employer to the
employee at the time of his engagement. Escorpizo was entitled to security of tenure during the period of
her probation but such protection ended the moment her employment contract expired at the close of
school year 1991-1992 and she was not extended a new appointment. No vested right to a permanent
appointment had as yet accrued in her favor since she had not yet complied, during her probation, with
the prerequisites necessary for the acquisition of permanent status. There was only an expiration of
contract. Petition was dismissed.

2011-0038
PHILIPPINE GRAND MOTOR PARTS CORP. VS MINISTER OF LABOR

GR No: L-58958
Date: July 16, 1984
Petitioner: Grand Motor Parts Corporation
Respondent: The Minister of Labor, The Regional Director, Ministry of Labor Region VI, and Narciso
Belicena Jr.
Ponente: Guerrero, J.
FACTS:
Respondent Belicena was the Branch Manager of petitioner Philippine Grand Motor Parts Corporation’s
Iloilo Branch. Previously he was the Finance Officer of Warner, Barnes, & Co. During the period of his
previous work he was induced to apply for the position of Branch Manager since they were scouting for
one who is a CPA. He started working for the petitioner company on April 1 and it was only on Apr. 28 he
resigned from his position in his previous workplace.
After 4 months he was terminated and several allegations were made against the petitioner such as
failure to submit promptly the monthly Income and Loss Statement, Comparative Projections & Actual
Sales Report; the Comparative Performance Report dated 7/8/1980 on the operation of the Iloilo Branch
for the month of June and May, 1980, the Cash Sales of the Iloilo Branch went down to P91,318.41 for
June, 1980, as compared with the sales for the month of May, 1980 in the sum of P174,697.77; Belicena
in violation of company policy and without clearance from the head office in Cebu, extended personal
accounts in favor of 15 persons which as of November, 1980 produced delinquent accounts amounting to
P18,435.80; and Belicena claimed lack of knowledge of the vehicular accident caused by a subordinate
and failed to provide prompt administrative disciplinary action against the erring employee.
They claimed that Balicena is only a probationary employee but the Regional Director and Minister of
Labor ruled in favor of Balicena.
ISSUE:
 Whether or not private respondent is a probationary employee?
HELD:
YES. Art. 282 of the Labor Code states that:
Probationary Employment. — Probationary employment shall not exceed six (6) months from the date the
employee started working, unless it is covered by an apprenticeship agreement stipulating a longer
period. The services of an employee who has been engaged on a probationary basis may be terminated
for a just cause or when he fails to qualify as a regular employee at the time of his engagement. An
employee who is allowed to work after a probationary period shall be considered a regular employee.
There was no written proof of Belicena’s employment as regular Branch Manager. He assumed his work
as of April 1 but resigned from his previous company on April 28. Therefore, if he was indeed appointed
as regular and permanent then he would have resigned immediately from his previous company. But
since he was not yet sure of his status in the petitioner corporation, he resigned on a later date. Also,
Philippine Grand Motors Corporation and Warner, Barnes & Co were engaged in different nature of
business so it was needed for respondent to undergo a probationary period to test his skills and
qualifications.
Petition was granted.

2011-0038
INTERNATIONAL CATHOLIC MIGRATION COMMISSION VS NLRC

GR No. 72222
Date: Jan 30, 1989
Petitioner: International Catholic Migration Commission
Respondent: National Labor Relations Commission and Bernadette Galang
Ponente: Fernan, J.
FACTS:
On January 24, 1983, Bernadette Galang was accepted as a probationary cultural orientation
teacher by petitioner International Catholic Migration Commission (ICMC). Three months after, Galang
was informed orally and in writing that her services were being terminated for her failure to meet the
th
prescribed standards of petitioner. The proportionate amount of her 13 month pay and the equivalent of
her two week pay were received by her father on her behalf since she became ill during that period.
On August 22, 1983, private respondent filed a complaint for illegal dismissal, unfair labor
practice and unpaid wages against ICMC and hoping for reinstatement with back wages, exemplary and
moral damages. Complaints were dismissed on October 8, 1983 but it was ordered that ICMC pay
Galang the sum of P6000 as payment for the last three (3) months of the agreed employment period
pursuant to her verbal contract of employment. Both ICMC and Galang appealed the decision to the
National Labor Relations Commission. On August 22, 1985, the NLRC sustained the decision of the
Labor Arbiter and thus dismissed both appeals for lack of merit.
ISSUE:
 Whether or not private respondent is entitled to the award of salary for the unexpired three-month
portion of the probationary period?
HELD:
NO. An order petitioner to pay private respondent her salary for the unexpired three-month
portion of her six-month probationary employment when she was validly terminated during her
probationary employment would be oppressive on the part of the employer. Failure to qualify as a regular
employee in accordance with the reasonable standards of the employer is a just cause for terminating a
probationary employee specifically recognized under Article 282 (now Article 281) of the Labor Code
which states that Probationary employment shall not exceed six months from the date the employee
started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged in a probationary basis may be terminated for a just
cause or when he fails to qualify as a regular employee in accordance with reasonable standards made
known by the employer to the employee at the time of his engagement. An employee who is allowed to
work after a probationary period shall be considered a regular employee. Petition was thus granted.

2011-0038
KIAMCO VS NLRC
GR No: 129449
Date: Dec 11, 1998
Petitioner: Cisell A. Kiamco
Respondent: National Labor Relations Commission, Philippine National Oil Company, PNOC Energy
Development Corporation
FACTS:
On July 1, 1992 private respondent PNOC hired petitioner Kiamco as a project employee in its
Geothermal Agro-Industrial Plant Project. The contract stated that he was being hired by the company as
a technician for a period of five months or up to the completion of the project. He was re-hired after two
more periods.
It was on October 1993 when Kiamco received a Memorandum from the administration
department demanding an explanation from him on certain infractions he allegedly committed such as
misconduct, AWOL, non-compliance of admin reporting procedure on accidents, and unauthorized use of
company vehicles. A few days later, another Memorandum was sent placing him under preventive
suspension pending further investigation. No investigation however was ever conducted. He attempted to
go back to work but was prevented by security guards from entering the company premises. On May 27,
1994 private respondent PNOC-EDC reported to the Department of Labor and Employment that petitioner
Kiamco was terminated on November 1 1993 due to the expiration of his employment contract and the
abolition of his position. On April 25, 1994 Kiamco filed before the NLRC a complaint for illegal
suspension and dismissal against the PNOC. It was dismissed on June 30, 1995 by the Labor Arbiter for
lack of merit. Kiamco appealed the decision of the Labor Arbiter to public respondent NLRC which on
September 27, 1996 reversed the Labor Arbiter.
ISSUE:
 Whether or not the petitioner is a regular employee and not a project employee?
HELD:
NO. Article 280 of the Labor Code states that in 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.
Also in Violeta v. NLRC it is stated that the principal test for determining whether particular
employees are properly characterized as project employees, as distinguished from regular employees, is
whether or not the project employees were assigned to carry out a specific project or undertaking, the
duration (and scope) of which were specified at the time the employees were engaged for that project. As
defined, project employees are those workers hired (1) for a specific project or undertaking, and (2) the

completion or termination of such project or undertaking has been determined at the time of engagement
of the employee.
Kiamco was correctly labeled by the NLRC as a project employee. The three (3) Contracts of
Employment entered into by Kiamco clearly established that he was a project employee because (a) he
was specifically assigned to work for a particular project, which was the Geothermal Agro-Industrial
Demonstration Plant Project of private respondents, and (b) the termination and the completion of the
project or undertaking was determined and stipulated in the contract at the time of his employment.
However, the argument that petitioner could no longer be reinstated since he failed to
substantiate the existence of the project is untenable. The burden of proving that petitioner Kiamco is not
entitled to reinstatement rests on private respondent corporations. Being the employer, the private
respondents would have in their possession the necessary documents and proof to show that the project
had already been terminated. Earlier decision is thus modified and petitioner is reinstated to former
position.

2011-0038
LAO CONSTRUCTION VS NLRC

GR No: 116781
Date: Sept.5, 1997
Petitioner: Tomas Lao Construction, LVM Construction Corporation, Thomas and James Developers
(Phil.) Inc. Q.
Respondent: National Labor Relations Commission, Mario O. Labendia, Sr., Roberto Labendia, Narciso
Adan, Florencio Gomez, Ernesto Bagatsolon, Salvado Babob, Paterno Bisnar, Cipriano Bernales, Angel
Mabulay, Sr., Leo Surigao, and Roque Morillo
FACTS:
Private complainants were hired for various periods by petitioner as follows:
(a) Roberto Labendia, general construction foreman, from 1971 to 17 October 1990
(b) Narciso Adan, tireman, from October 1981 to November 1990
(c) Florencio Gomez, welder, from July 1983 to July 1990
(d) Ernesto Bagatsolon leadman/checker, from June 1982 to October 1990
(e) Salvador Babon, clerk/timekeeper/paymaster, from June 1982 to October 1990
(f) Paterno Bisnar, road grader operator, from January 1979 to October 1990
(g) Cipriano Bernales, instrument man, from February 1980 to November 1990
(h) Angel Mabulay, Sr., dump truck driver, from August 1974 to October 1990
(I) Leo Surigao, payloader operator, from March 1975 to January 1978
(J) Mario Labendia, Sr. surveyor/foreman, from August 1971 to July 1990
(k) Roque Morillo, company watchman, from August 1983 to October 1990
On 1989 Andres Lao, Managing Director of LVM and President issued a memorandum requiring
all workers and company personnel to sign employment contract forms and clearances which were
issued on 1 July 1989 but antedated 10 January 1989. To ensure compliance with the directive, the
company ordered the withholding of the salary of any employee who refused to sign. The contracts
expressly described the construction workers as project employees. They were also required to explain
why their services should not be terminated for violating company rules and warned that failure to
satisfactorily explain would be construed as disinterest in continued employment with the company.
NLRC RAB VIII dismissed the complaints lodged before but however granted each employee a
separation pay of P6,435.00 computed at one-half (1/2) month salary for every year of service, uniformly
rounded at five (5) years.
The decision of Labor Arbiter Gabino A. Velasquez, Jr., was reversed on appeal by the Fourth
Division of the National Labor Relations Commission (NLRC) of Cebu City.

ISSUE:
 Whether or not respondents were only project employees thus not entitled to security of tenure?
HELD:
NO. The principal test in determining whether particular employees are project employees
distinguished from regular employees is whether the project employees are assigned to carry out specific
project or undertaking, the duration and scope of which are specified at the time the employees are
engaged for the project. Project in the realm of business and industry refers to a particular job or
undertaking that is within the regular or usual business of 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.
In the case the workers were initially hired for specific projects or undertakings of the company
and hence can be classified as project employees. But the repeated re-hiring and the continuing need for
their services over a long span of time have undeniably made them regular employees. The court held
that where the employment of project employees is extended long after the supposed project has been
finished, the employees are removed from the scope of project employees and considered regular
employees. Thus petition was denied.

2011-0038
MAGCALAS VS NLRC
GR No. 100333
Date: Mar. 13, 1997
Petitioner: Hilario Magcalas, Porspero Marinda, Celso Gamalo, Epifanio Omega, Virgilio Campos,
Antonio Llagas, Bernard Bendanillo, Shaldy Autencio, Ciriaco Reyes, Juanito de Leon, Edmundo
Guzman, Alfredo Santos, Benedicto Dagcutan, Norbie Lopena, Ismale Alonzo, Elmer Baleta, Genito
Dalmero, and Cesar Ledesma
Respondent: National Labor Relations Commission, Koppel Inc.
FACTS:
The complainants were all regular employees of Koppel Inc. (engaged in the business of
installing air conditioning and refrigeration equipment) having rendered continuous services in various
capacities ranging from lead man, tinsmith, trades helper to general clerk from a range of 1 ½ years to 8
years. On August 30, 1988, all were dismissed without prior notice and that their dismissals were
effected for no other cause than their persistent demands for payment of money claims. The
respondents interposed the defense of contract/project employment. According to them, with the
completion of their task on August 31, 1988 in their respective installation projects, the employment of
the complainants expired as they had no more work to do. The employees now claim that they were
illegally dismissed.
ISSUE:
 Whether or not petitioners were regular workers under the contemplation of Art. 280 of the Labor
Code?
HELD:
YES. A mere provision in the CBA recognizing contract employment does not sufficiently
establish that petitioners were ipso facto contractual or project employees. Regular employees cannot at
the same time be project employee since Article 280 of the Labor Code states that regular employees are
those whose work is necessary or desirable to the usual business of the employer. The two exceptions
following the general description of regular employees refer to either project or seasonal employees. The
Court reiterates the rule that all doubts, uncertainties, ambiguities and insufficiencies should be resolved
in favor of labor. It is a well-entrenched doctrine that in illegal dismissal cases, the employer has the
burden of proof. This burden was not discharged in the present case. Petition was granted.

2011-0038
PHIL. FEDERATION OF CREDIT COOPERATIVES, INC. VS NLRC

GR No: 121071
Date: Dec 11, 1998
Petitioner: Phil. Federation of Credit Cooperatives Inc, Fr. Benedicto Jayoma
Respondent: National Labor Relations Commission, Victoria Abril
Ponente: Romero, J.
FACTS:
On September 1982, private respondent Abril was employed by petitioner Philippine Federation
of Credit Cooperatives, Inc. (PFCCI) and held different positions such as office secretary in 1985 and as
cashier-designate for four months ending in April 1988. After resuming her position as office secretary,
she went on leave until she gave birth. On November 1989 she returned but she discovered that she had
been permanently replaced. She then accepted the position of Regional Field Officer as evidenced by a
contract which stipulated that her employment status shall be probationary for a period of six months.
Abril was allowed to work after the period until PFCCI presented to her another employment contract for a
period of one year commencing on January 2, 1991 until December 31, 1991, after which period, her
employment was terminated.
On April 1, 1992, a complaint for illegal dismissal was filed by respondent against PFCCI and on
March 10, 1993 it was dismissed for lack of merit but ordered PFCCI to reimburse her the amount
of P2,500 which had been deducted from her salary. On appeal, the said decision was reversed by the
National Labor Relations Commission (NLRC) stating that respondents are hereby directed to reinstate
Abril to her position last held, which is that of a Regional Field Officer, or to an equivalent position if such
is no longer feasible, with full back wages computed from January 1, 1992 until she is actually reinstated.
ISSUE:
 Whether or not respondent has become a regular employee entitled to security of tenure
guaranteed under the Constitution and labor laws
HELD:
YES. Article 281 of the Labor Code expresses that Probationary employment shall not exceed six
(6) months from the date the employee started working, unless it is covered by an apprenticeship
agreement stipulating a longer period. The services of an employee who has been engaged on a
probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in
accordance with reasonable standards, made known by the employer to the employee at the time of his
engagement. An employee who is allowed to work after a probationary period shall be considered a
regular employee. Having completed the probationary period and allowed to work thereafter, Abril
became a regular employee regardless of the designations and may be dismissed only for just or
authorized causes under Articles 282, 283 and 284 of the Labor Code, as amended. Petition was
dismissed.

2011-0038
PHILIPPINE JAI-ALAI & AMUSEMENT CORP. VS CLAVE

GR No: L-54136
Date: Dec. 21, 1983
Petitioner: Philippine Jai-Alai & Amusement Corporation
Respondent: Hon. Jacobo C. Clave, Hon. Amado G. Inciong, Hon. Vicente Leogardo Jr., Rufino Cadatal
Jr., Antonio Delgra
FACTS:
On February 2, 1976, petitioner hired plumber Cadatal and mason Delgra together with 30 other
workers for a period of one month to continue even after that period should their services be needed
further in the renovation work. This renovation was completed by the end of October 1976 but their
services were still need for further projects. On November 17, 1976, private respondents received notice
of termination effective November 29, 1976, but since minor repairs were still needed, they worked up to
December 11, 1976 and were fully paid for their labor up to that date.
On December 13, 1976, petitioner filed with the former Department of Labor a report of
termination of the services of private respondents and 30 others, due to completion of the project. The
report listed them as "casual emergency workers." A summary Order was issued on December 24, 1976
for reinstatement with full back wages.
The Order of December 24, 1976 was affirmed in an Order dated July 13, 1977. This Order was
in turn appealed to the Office of the President. The appeal was dismissed on January 25, 1979.
Petitioner's Motion for Reconsideration was denied on March 19, 1979. On April 26, 1980, an Alias Writ of
Execution was issued to collect from petitioner corporation the total amount of 26,260.00, representing
private respondents' full back wages. And, on June 5, 1980, a second Motion for Reconsideration dated
April 24, 1980, was denied by respondent Clave, since only one such Motion is allowed and the grounds
invoked were substantially the same as those previously raised.
Respondents allege that they had been terminated without just cause.
ISSUE:
 Whether or not private respondents are regular employees?
HELD:
NO. Art 281 of the Labor Code states that:
Art. 281. Regular and Casual Employment. — The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreements of the parties, an employment shall be deemed to
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 services to be performed is seasonal in nature
and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided,
That, any employee who has rendered at least one year of service, whether such service is continuous or
broken, shall be considered a regular employee with respect to the activity in which he is employed and
his employment shall continue while such actually exists.

The casual or limited character of private respondents' employment, therefore, is evident. They
were engaged for a specific project or undertaking and fall within the exception provided for in Article 281
of the Labor Code, supra. Not being regular employees, it cannot be justifiably said that petitioner had
dismissed them without just cause. They are not entitled to reinstatement with full back wages
Thus previous decision is reversed and set aside.

2011-0038
SANDOVAL SHIPYARDS INC VS. NLRC

GR No: L-66119
Date: May 31, 1986
Petitioner: Sandoval Shipyards Inc.
Respondent: Vicente Leogardo, Jr, Deputy Minister of Labor and Employment, Danilo dela Cruz,
Rodrigo Villaruz, Rodrigo Perez, Aquilino Tabilon, Armando Esglanda, Manuel Medina,
Freddie Abadiez, Feliciano Tolang, Alfredo dela Cruz, Nicolas Mariano, Vicente Cebuano,
Rolando Roldan, Teodoro Roldan, Solomon Gemino, Mario Ricafort, Rolando Lopez,
Angel Samson
Ponente: Aquino, J.
FACTS: The private respondents are all workers of petitioner Sandoval Shipyards Inc. engaged in the
building and repair of vessels. According the petitioner, each vessel is a separate project and thus
employment shall cease upon completion of a vessel. On the contrary, the private respondents claim that
they are regular employees because the termination of one project does not mean the end of their
employment since they can be assigned to unfinished projects.
ISSUE:
 Whether or not the workers are project employees?
HELD: YES. Policy Instructions No. 20 of the Secretary of Labor states that:
Project employees are those employed in connection with a particular construction project. Non-project
(regular) employees are those employed by a construction company without reference to any particular
project.
Project employees are not entitled to termination pay if they are terminated as a result of the completion
of the project or any phase thereof in which they are employed, regardless of the number of projects in
which they have been employed by a particular construction company. Moreover, the company is not
required to obtain clearance from the Secretary of Labor in connection with such termination.
In the case, it cannot be said that even after the completion of one vessel the employment shall still
continue because each vessel is a different project depending on the need of the client.
The complaints for illegal layoff are dismissed

2011-0038
VICENTE VS ECC
GR No: 85024
Date: Jan. 23, 1991
Petitioner: Domingo Vicente
FACTS:
The petitioner Vicente was a nursing attendant at the Veterans Memorial Medical Center. After having
more than 25 years in service and at 45 years old, he applied for optional retirement duet to his physical
disability of osteoarthritis, hypertension, cardiomegaly, and left ventricular hypertrophy. The petitioner
likewise filed with the Government Service Insurance System an application for income benefits claim for
payment. His application was granted but only for permanent partial disability compensation or for a
period of nineteen months starting from August 16, 1981 up to March 1983. A motion for reconsideration
granted him the equivalent of additional four months benefits. Still unsatisfied, the petitioner again sent a
letter to the GSIS Disability Compensation Department Manager on November 6, 1986. He claims that he
should be compensated no less than for permanent total disability. His request had been denied. His
case was elevated to the respondent Employees Compensation Commission. On August 24, 1988, the
respondent rendered a decision affirming the ruling of the GSIS Employees' Disability Compensation and
dismissed the petitioner's appeal.
ISSUE:
 Whether or not the petitioner has permanent total disability?
HELD: YES. Sec. 2 Rule VII of the Amended Rules on Employees Compensation states that:
Sec. 2. Disability—(a) A total disability is temporary if as a result of the injury or sickness the employee is
unable to perform any gainful occupation for a continuous period not exceeding 120 days, except as
otherwise provided in Rule X of these Rules.
(b) A disability is total and permanent if as a result of the injury or sickness the employee is unable to
perform any gainful occupation for a continuous period exceeding 120 days except as otherwise provided
for in Rule X of these Rules.
(c) A disability is partial permanent if as a result of the injury or sickness the employee suffers a
permanent partial loss of the use of any part of his body.
In the case, the petitioner's permanent total disability is established beyond doubt. The petitioner's
application for optional retirement on the basis of his ailments had been approved. The decision of the
respondent Commission even admits that the petitioner retired from government service at the age of 45.
Considering that the petitioner was only 45 years old when he retired and still entitled, under good
behavior, to 20 more years in service, the approval of his optional retirement application proves that he
was no longer fit to continue in his employment. Optional retirement is allowed only upon proof that the
employee-applicant is already physically incapacitated to render sound and efficient service.
The decision of the respondent Employees' Compensation Commission is set aside and another one is
hereby entered declaring the petitioner to be suffering from permanent total disability.

PASCUA, JETTNER R.
2011-0095
WORKPOOL EMPLOYEES – AGUILAR CORP. v NLRC

G.R. No. 116352
March 13, 1997
Petitioner:
J. & D.O. AGUILAR CORPORATION
Respondents:
NATIONAL LABOR RELATIONS COMMISSION and ROMEO ACEDILLO
Ponente:
ROMERO, J.
Facts:
Private respondent Romeo Acedillo began working for petitioner in February 1989 as a helper-electrician.
On January 16, 1992, he received a letter from petitioner informing him of his severance from the
company allegedly due to lack of available projects and excess in the number of workers needed. He
decided to file a case for illegal dismissal before the NLRC after learning that new workers were being
hired by petitioner while his request to return to work was being ignored. In reply, petitioner maintained
that its need for workers varied, depending on contracts procured in the course of its business of
contracting refrigeration and other related works. It contended that its workers are hired on a contractual
or project basis, and their employment is deemed terminated upon completion of the project for which
they were hired. Finally, petitioner argued that Acedillo was not a regular employee because his
employment was for a definite period and apparently made only to augment the regular work force.
Issue:
Whether or not private respondent is a member of the work pool of employees of petitioner.
Ruling:
Yes. It is immediately apparent that the issues raised in the instant petition are factual, dealing as they do
with the appreciation of evidence by the Labor Arbiter and the NLRC. On this sole ground, the petition
may justifiably be dismissed. However, a closer examination of the records and of the papers and
pleadings filed doubly convinces the Court of the futility of this action.
Petitioner is to be reminded that a project employee 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 or where the work or services to be performed is seasonal in nature and
the employment is for the duration of the season." The records reveal that petitioner did not specify the
duration and scope of the undertaking at the time Acedillo's services were contracted. Petitioner could
have easily presented an employment contract showing that he was engaged only for a specific project,
but it failed to do so. It is not even clear if Acedillo ever signed an employment contract with petitioner.
Neither is there any proof that the duration of his assignment was made clear to him other than the self-
serving assertion of petitioner that the same can be inferred from the tasks he was made to perform.
What is clear is that Acedillo's work as a helper-electrician was an activity "necessary or desirable in the
usual business or trade" of petitioner, since refrigeration requires considerable electrical work. This

necessity is further bolstered by the fact that petitioner would hire him anew after the completion of each
project, a practice which persisted throughout the duration of his tenure.
The petitioner admits that it maintains two sets of workers, viz., those who are permanently employed and
get paid regardless of the availability of work and those who are hired on a project basis.

PASCUA, JETTNER R.
2011-0095
Employer Obligation – A.M. ORETA AND CO., INC. v NLRC

G.R. No. 74004
August 10, 1989
Petitioner:
A.M. ORETA & CO., INC.
Respondents:
NATIONAL LABOR RELATIONS COMMISSION and SIXTO GRULLA JR.
Ponente:
MEDIALDEA, J.
Facts:
Private respondent Grulla was engaged by Engineering Construction and Industrial Development
Company (ENDECO) through A.M. Oreta and Co., Inc., as a carpenter in its projects in Jeddah, Saudi
Arabia. The contract of employment, which was entered into June 11, 1980 was for a period of twelve
(12) months. Respondent Grulla left the Philippines for Jeddah, Saudi Arabia on August 5, 1980.
On August 15, 1980, Grulla met an accident which fractured his lumbar vertebra while working at the
jobsite. He was rushed to the New Jeddah Clinic and was confined there for twelve (12) days. On August
27, 1980, Grulla was discharged from the hospital and was told that he could resume his normal duties
after undergoing physical therapy for two weeks.
On September 18, 1980, respondent Grulla reported back to his Project Manager and presented to the
latter a medical certificate declaring the former already fit for work. Since then, he started working again
until he received a notice of termination of his employment on October 9, 1980.
In December, 1981, respondent Grulla filed a complaint for illegal dismissal, recovery of medical benefits,
unpaid wages for the unexpired ten (10) months of his contract and the sum of P1,000.00 as
reimbursement of medical expenses against A.M. Oreta and Company, Inc., and Engineering
Construction and Industrial Development Co. (ENDECO) with the Philippine Overseas Employment
Administration (POEA).lâwphî1.ñèt
The petitioner A.M. Oreta and Company, Inc and ENDECO filed their answer and alleged that the
contract of employment entered into between petitioners and Grulla provides, as one of the grounds for
termination, violations of the rules and regulations promulgated by the contractor; and that Grulla was
dismissed because he has not performed his duties satisfactorally within the probationary period of three
months.
Issue:
Whether or not petitioner has an employer obligation over private respondent.
Ruling:
Yes. The law is clear to the effect that in all cases involving employees engaged on probationary period
basis, the employer shall make known to the employee at the time he is hired, the standards by which he
will qualify as a regular employee. Nowhere in the employment contract executed between petitioner
company and respondent Grulla is there a stipulation that the latter shall undergo a probationary period
for three months before he can qualify as a regular employee. There is also no evidence on record
showing that the respondent Grulla has been appraised of his probationary status and the requirements
which he should comply in order to be a regular employee. In the absence of this requisites, there is

justification in concluding that respondent Grulla was a regular employee at the time he was dismissed by
petitioner. As such, he is entitled to security of tenure during his period of employment and his services
cannot be terminated except for just and authorized causes enumerated under the Labor Code and under
the employment contract.
Anent the respondent Commission's finding of lack of due process in the dismissal of Grulla, the petitioner
claims that notice and hearing are important only if the employee is not aware of the problems affecting
his employment; that the same is not true in the instant case where respondent Grulla knew all along that
he could no longer effectively perform his job due to his physical condition. We find that this contention
has no legal basis.
The twin requirements of notice and hearing constitute essential elements of due process in cases of
employee dismissal: the requirement of notice is intended to inform the employee concerned of the
employer's intent to dismiss and the reason for the proposed dismissal, while the requirement of hearing
affords the employee an opportunity to answer his employer's charges against him and accordingly to
defend himself therefrom before dismissal is effected. Neither of these requirements can be dispensed
with without running afoul of the due process requirement of the Constitution.
In the case at bar, respondent Grulla was not, in any manner, notified of the charges against him before
he was outrightly dismissed. Neither was any hearing or investigation conducted by the company to give
the respondent a chance to be heard concerning the alleged unsatisfactory performance of his work.
In view of the foregoing, the dismissal of respondent Grulla violated the security of tenure under the
contract of employment which specifically provides that the contract term shall be for a period of twelve
(12) calendar months. Consequently the respondent Grulla should be paid his salary for the unexpired
portion of his contract of employment which is ten (10) months.

PASCUA, JETTNER R.
2011-0095
PROJECT EMPLOYMENT – IMBUIDO v NLRC

G.R. No. 114734
March 31, 2000
Petitioner:
VIVIAN Y. IMBUIDO
Respondent:
. NATIONAL LABOR RELATIONS COMMISSION, INTERNATIONAL INFORMATION SERVICES, INC.
and GABRIEL LIBRANDO
Ponente:
BUENA, J
Facts:
Petitioner was employed as a data encoder by private respondent International Information Services, Inc.,
a domestic corporation engaged in the business of data encoding and keypunching, from August 26,
1988 until October 18, 1991 when her services were terminated. From August 26, 1988 until October 18,
1991, petitioner entered into thirteen (13) separate employment contracts with private respondent, each
contract lasting only for a period of three (3) months. Aside from the basic hourly rate, specific job
contract number and period of employment, each contract contains the following terms and conditions:
"a. This Contract is for a specific project/job contract only and shall be effective for the period covered as
above-mentioned unless sooner terminated when the job contract is completed earlier or withdrawn by
client, or when employee is dismissed for just and lawful causes provided by law. The happening of any
of these events will automatically terminate this contract of employment.
In her position paper dated August 3, 1992 and filed before labor arbiter Raul T. Aquino, petitioner alleged
that her employment was terminated not due to the alleged low volume of work but because she "signed
a petition for certification election among the rank and file employees of respondents," thus charging
private respondent with committing unfair labor practices. Petitioner further complained of non-payment of
service incentive leave benefits and underpayment of 13th month pay.
On the other hand, private respondent, in its position paper filed on July 16, 1992, maintained that it had
valid reasons to terminate petitioner’s employment and disclaimed any knowledge of the existence or
formation of a union among its rank-and-file employees at the time petitioner’s services were terminated.
Private respondent stressed that its business "…relies heavily on companies availing of its services. Its
retention by client companies with particular emphasis on data encoding is on a project to project basis,"
usually lasting for a period of "two (2) to five (5) months." Private respondent further argued that
petitioner’s employment was for a "specific project with a specified period of engagement." According to
private respondent, "…the certainty of the expiration of complainant’s engagement has been determined
at the time of their (sic) engagement (until 27 November 1991) or when the project is earlier completed or
when the client withdraws," as provided in the contract. "The happening of the second event [completion
of the project] has materialized, thus, her contract of employment is deemed terminated per the Brent
School ruling." Finally, private respondent averred that petitioner’s "claims for non-payment of overtime
time (sic) and service incentive leave [pay] are without factual and legal basis."
Issue:
Whether or not Petitioner was a "regular employee," NOT a "project employee" as found by public
respondent NLRC.

Ruling:
Yes. In the instant case, petitioner was engaged to perform activities which were usually necessary or
desirable in the usual business or trade of the employer, as admittedly, petitioner worked as a data
encoder for private respondent, a corporation engaged in the business of data encoding and
keypunching, and her employment was fixed for a specific project or undertaking the completion or
termination of which had been determined at the time of her engagement, as may be observed from the
series of employment contracts between petitioner and private respondent, all of which contained a
designation of the specific job contract and a specific period of employment.
However, even as we concur with the NLRC’s findings that petitioner is a project employee, we have
reached a different conclusion. In the recent case of Maraguinot, Jr. vs. NLRC, we held that "[a] project
employee or a member of a work pool may acquire the status of a regular employee when the following
concur:
1) There is a continuous rehiring of project employees even after [the] cessation of a

project; and
2) The tasks performed by the alleged "project employee" are vital, necessary and
indispensable to the usual business or trade of the employer."
The evidence on record reveals that petitioner was employed by private respondent as a data encoder,
performing activities which are usually necessary or desirable in the usual business or trade of her
employer, continuously for a period of more than three (3) years, from August 26, 1988 to October 18,
1991 and contracted for a total of thirteen (13) successive projects. We have previously ruled that
"[h]owever, the length of time during which the employee was continuously re-hired is not controlling, but
merely serves as a badge of regular employment." Based on the foregoing, we conclude that petitioner
has attained the status of a regular employee of private respondent.

PASCUA, JETTNER R.
2011-0095
PROJECT EMPLOMENT – MANANSANG v NLRC

G.R. No. 97520
February 9, 1993
Petitioners:
LETICIA MAMANSAG, MAXIMINIA DOREZA, MARILOU B. DAVID, SONIA G. TAN, URBINA G.
TORREFRANCA, MYRA M. FRANEHE, NANCY S. CAPELLAN, GUILLERMA C. MENDOZA,
CONCHITA C. SEVILLA, EDELINA S. CAMACHO, LELIA A. PEREZ, MARIE A. ARDILA, NONA FE C.
CACANINDIN, GLORIA TIONGCO, MERIE OSIGAN, JULIETA T. FABIAN, SONIA E. DONES, LEONILA
A. URBI, ESTER T. MIRANDA, LORNA R. NAVARRO, CHERILYN A. BATANG, MERISSA MARTINEZ,
BELINDA P. RAMOS, DOLOR L. ENRIQUEZ, DOLLY CLAVEL, CORA UBEREZ, MARILYN
RAMBOANGA, HELENITA T. BAGASBAS, TERESA D. BEUMEJO, ISABEL B. GALONGAN,
HENRIETTA N. NAPILAN, ROSEMELY B. CASTILO, MYRNA M. VICENTE, NORA L. TUGBO,
ROSARIO M. LAO, MYRNA L. PERVASDO, BUENA Y. BALPERMOSO, MILA ROLLEQUE, GLORIA
CORAZON, LORELIE TORRES, ROSARIO F. ARCANYA, SEGUNDA S. MAGBUTAY, MA. JESIFINA
GALAPON, MARISSA P. ALBERTO, LUZ R. CORTEZ, AZUCENA H. CORTEZ, MARY JANE B. NARAG,
MYRNA F. DIMALAIWAN, ALTHEA G. BALIBOC, AVELINA F. TRINIDAD, ALFRENITA BARANGUELA
Respondents:
NATIONAL LABOR RELATIONS COMMISSION (2ND DIVISION), CONSUMER PULSE INC. AND
ROSARIO CHEW
Ponente:
NOCON, J
Facts:
Private respondent Consumer Pulse Inc. is engaged in the business of conducting market researches
and public surveys on consumer products and services for its clients. Due to the very nature of its
business, private respondent hired the services of petitioners as field interviewers whose job was to
gather data on consumer products to be submitted to the office of private respondent for evaluation or
analysis.
In the course of petitioners' employment with private respondent company, petitioners were required by
the latter to sign contracts specifying the name of the project and the duration of their employment.
Sometime in February 1987, petitioners were called to a meeting by private respondent company's
Human Resources Department Director, Thelma Baricawa, where they were told that they would be
transferred to a sub-contractor who would be paying them directly. However, petitioners objected to this
proposal as they are regular employees of private respondent. They likewise rejected the offer of
Consumer Pulse, Inc. to become members of the Rosie Chew Foundation whose founder is private
respondent Rosario Chew, a major stockholder of private respondent Consumer Pulse, Inc.
Private respondents, however, deny having dismissed petitioners. Since their contract with petitioners
was on a per project basis, their completion of the project resulted in the completion of their contract and
automatic cessation of their employment.
On the other hand, private respondent's Human Resources Department Director Thelma Baricawa denied
having told petitioners that they would be transferred to a sub-contractor. What she told them was to
upgrade the quality of their work and form themselves into a group of duly licensed job contractors or sub-
contractors since private respondent company would henceforth engage only the services of duly
licensed contractors or sub-contractors to handle its job projects.

Issue:
Whether or not petitioners are project employees of private respondent.
Ruling:
Yes. An examination of the petitioners contract of employment showed that they were hired by private
respondent company for a specific project and the completion or termination of said project was
determined at the start of their employment. Petitioners cannot be hired for an indefinite period of time
and carried on the company's payroll even without projects to work, with without respondent company
incurring financial losses.
As field interviewers of private respondent company, the latter depends for its business on the contract it
is able to obtain from its clients. Necessarily, the duration of the employment of its employees is not
permanent but co-terminus with the projects to which they are assigned and from whose payrolls they are
paid. The fact that petitioners worked for several projects of private respondent company is no basis to
consider them as regular employees. By the very nature of their employer's business, they will always
remain project employees regardless of the number of projects in which they have worked.

PASCUA, JETTNER R.
2011-0095
LENGTH OF TIME – MARAGUINOT v NLRC

G.R. No. 120969
January 22, 1998
Petitioners:
ALEJANDRO MARAGUINOT, JR. and PAULINO ENERO
Respondents:
NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION) composed of Presiding
Commissioner RAUL T. AQUINO, Commissioner ROGELIO I. RAYALA and Commissioner VICTORIANO
R. CALAYCAY (Ponente), VIC DEL ROSARIO and VIVA FILMS.
Ponente:
DAVIDE, JR., J.
Facts:
Petitioner Alejandro Maraguinot, Jr. maintains that he was employed by private respondents on 18 July
1989 as part of the filming crew with a salary of P375.00 per week. About four months later, he was
designated Assistant Electrician with a weekly salary of P400.00, which was increased to P450.00 in May
1990. In June 1991, he was promoted to the rank of Electrician with a weekly salary of P475.00, which
was increased to P593.00 in September 1991.
Petitioner Paulino Enero, on his part, claims that private respondents employed him in June 1990 as a
member of the shooting crew with a weekly salary of P375.00, which was increased to P425.00 in May
1991, then to P475.00 on 21 December 1991.
Sometime in May 1992, petitioners sought the assistance of their supervisor, Mrs. Alejandria Cesario, to
facilitate their request that private respondents adjust their salary in accordance with the minimum wage
law. In June 1992, Mrs. Cesario informed petitioners that Mr. Vic del Rosario would agree to increase
their salary only if they signed a blank employment contract. As petitioners refused to sign, private
respondents forced Enero to go on leave in June 1992, then refused to take him back when he reported
for work on 20 July 1992. Meanwhile, Maraguinot was dropped from the company payroll from 8 to 21
June 1992, but was returned on 22 June 1992. He was again asked to sign a blank employment
contract, and when he still refused, private respondents terminated his services on 20 July 1992.
Petitioners thus sued for illegal dismissal before the Labor Arbiter.
Issue:
Whether or not does the length of time that the petitioners were employed by respondent made them
regular employees.
Ruling:
Yes. The length of time during which the employee was continuously re-hired is not controlling, but
merely serves as a badge of regular employment.
In the instant case, the evidence on record shows that petitioner Enero was employed for a total of two
(2) years and engaged in at least eighteen (18) projects, while petitioner Maraguinot was employed for
some three (3) years and worked on at least twenty-three (23) projects. Moreover, as petitioners’ tasks
involved, among other chores, the loading, unloading and arranging of movie equipment in the shooting
area as instructed by the cameramen, returning the equipment to the Viva Films’ warehouse, and
assisting in the “fixing” of the lighting system, it may not be gainsaid that these tasks were vital, necessary
and indispensable to the usual business or trade of the employer. As regards the underscored phrase, it

has been held that this is ascertained by considering the nature of the work performed and its relation to
the scheme of the particular business or trade in its entirety.

PASCUA, JETTNER R.
2011-0095
PROJECT EMPLOYMENT – PHIL. AIRLINES, INC. v NLRC

G.R. No. 120506
October 28, 1996
Petitioner:
PHILIPPINE AIRLINES, INC.
Respondents:
NATIONAL LABOR RELATIONS COMMISSION, HON. LABOR ARBITER CORNELIO LINSANGAN,
UNICORN SECURITY SERVICES, INC., and FRED BAUTISTA, et al.,
Ponente:
DAVIDE, JR., J.
Facts:
On 23 December 1987, private respondent Unicorn Security Services, Inc. (USSI) and petitioner
Philippine Airlines, Inc. (PAL) executed a security service agreement. USSI was designated therein as the
CONTRACTOR. Among the pertinent terms and conditions of the agreement are as follows:
(4) The CONTRACTOR shall assign to PAL an initial force of EIGHTY ONE (81) bodies … which may be
decreased or increased by agreement in writing … . It is, of course, understood that the CONTRACTOR
undertakes to pay the wages or salaries and cost of living allowance of the guards in accordance with the
provisions of the Labor Code, as amended, the different Presidential Decrees, Orders and with the rules
and regulations promulgated by competent authorities implementing said acts, assuming all
responsibilities therefor.
Xxx
(10) The security guards employed by CONTRACTOR in performing this Agreement shall be paid by the
CONTRACTOR and it is distinctly understood that there is no employee-employer relationship between
CONTRACTOR and/or his guards on the one hand, and PAL on the other. CONTRACTOR shall have
entire charge, control and supervision of the work and services herein agreed upon, and PAL shall in no
manner be answerable or accountable for any accident or injury of any kind which may occur to any
guard or guards of the CONTRACTOR in the course of, or as a consequence of, their performance of
work and services under this Agreement, or for any injury, loss or damage arising from the negligence of
or carelessness of the guards of the CONTRACTOR or of anyone of its employ to any person or persons
or to its or their property whether in the premises of PAL or elsewhere; and the CONTRACTOR hereby
covenants and agrees to assume, as it does hereby assume, any and all liability or on account of any
such injury, loss or damage, and shall indemnify PAL for any liability or expense it may incur by reason
thereof and to hold PAL free and harmless from any such liability.
On 16 February 1990, PAL terminated the security service agreement with USSI without giving the latter
the 30-day prior notice required in paragraph 20 thereof. Instead, PAL paid each of the security guards
actually assigned at the time of the termination of the agreement an amount equivalent to their one-month
salary to compensate for the lack of notice.
Issue:
Whether or not petitioner became an indirect employer of guards herein supplied by private respondent.

Ruling:
No. The security service agreement between PAL and USSI provides the key to such consideration. A
careful perusal thereof, especially the terms and conditions embodied in paragraphs 4 and 10 quoted
earlier in this ponencia, demonstrates beyond doubt that USSI-and not PAL – was the employer of the
security guards. It was USSI which (a) selected, engaged or hired and discharged the security guards;
(b) assigned them to PAL according to the number agreed upon; (c) provided, at its own expense, the
security guards with firearms and ammunitions; (d) discipline and supervised them or controlled their
conduct; and (e) determined their wages, salaries, and compensation; and (f) paid them salaries or
wages. Even if we disregard the explicit covenant in said agreement that “there exist no employer-
employee relationship between CONTRACTOR and/or his guards on the one hand, and PAL on the
other” all other considerations confirm the fact that PAL was not the security guards’ employer.
Considering then that no employer-employee relationship existed between PAL and the security guards,
the Labor Arbiter had no jurisdiction over the claim Article 217 of the Labor Code (P.D. No. 442), as
amended, vests upon Labor Arbiter exclusive original jurisdiction only over the following:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates
of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from employer-employee
relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving legality of
strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other
claims, arising from employer-employee relations, including those of persons in domestic or house hold
service, involving an amount exceeding five thousand pesos(P5,000.00) regardless of whether
accompanied with a claim for reinstatement.
In all these cases, an employer-employee relationship is an indispensable jurisdictional requisite.
The Labor Arbiter cannot avoid the jurisdictional issue or justify his assumption of jurisdiction on the
pretext that PAL was the indirect employer of the security guards under Article 107 in relation to Articles
106 and 109 of the Labor Code and, therefore, it is solidarily liable with USSI. We agree with the Solicitor
General that these Articles are inapplicable to PAL under the facts of this case. Article 107 provides:
ART. 107. Indirect employer. -- The provisions of the immediately preceding Article shall likewise apply
to any person, partnership, association or corporation which, not being an employer, contracts with an
independent contractor for the performance of any work, task, job or project.
The preceding Article referred to, which is Article 106, partly reads as follows:
ART. 106. Contractor or subcontractor. -- Whenever an employer enters into a contract with another
person for the performance of the former’s work, the employees of the contractor and of the latter’s
subcontractor, if any, shall be paid in accordance with the provisions of this Code.

In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance
with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to
such employees to the extent of the work performed under the contract, in the same manner and extent
that he is liable to employees directly employed by him.

PASCUA, JETTNER R.
2011-0095
PROJECT EMPLOYMENT – PHIL. FRUITS AND VEGETABLES INDUSTRIES, INC. v NLRC

G.R. No. 122122
July 20, 1999
Petitioners:
PHILIPPINE FRUIT & VEGETABLE INDUSTRIES, INC. and its President and General Manager, MR.
PEDRO CASTILLO
Respondents:
NATIONAL LABOR RELATIONS COMMISSION, and Philippine Fruit and Vegetable Workers Union-
Tupas Local Chapter
Ponente:
KAPUNAN, J.
Facts:
Petitioner Philippine Fruit and Vegetable Industries, Inc. (PFVII, for brevity) is a government-owned and
controlled corporation engaged in the manufacture and processing of fruit and vegetable purees for
export. Petitioner Pedro Castillo is the former President and General Manager of petitioner PFVII.
On September 5, 1988 herein private respondent Philippine Fruit and Vegetable Workers Union-Tupas
Local Chapter, for and in behalf of 127 of its members, filed a complaint for unfair labor practice and/or
illegal dismissal with damages against petitioner corporation. Private respondent alleged that many of its
complaining members started working for San Carlos Fruits Corporation which later incorporated into
PFVII in January or February 1983 until their dismissal on different dates in 1985, 1986, 1987 and
1988. They further alleged that the dismissals were due to complainants' involvement in union activities
and were without just cause.
The above arguments boil down to the issue of whether or not complaining members of respondent union
are regular employees of PFVII or are seasonal workers whose employment ceased during the off-
season due to the non-availability of work.
Issue:
WHETHER OR NOT PRIVATE RESPONDENTS ARE SEASONAL EMPLOYEES WHOSE

EMPLOYMENTS CEASED DURING THE OFF-SEASON DUE TO NO WORK AND NOT DUE TO
ILLEGAL DISMISSAL.
Ruling:
No. As culled from the records, it appears that herein 194 individual complainants are members of
complainant union in respondent company which is engaged in the manufacture and processing of fruit
xxx and vegetable purees for export. They were employed as seeders, operators, sorters, slicers,
janitors, drivers, truck helpers, mechanics and office personnel.
xxx

By the very nature of things in a business enterprise like respondent company’s, to our mind, the services
of herein complainants are, indeed, more than six (6) months a year. We take note of the undisputed fact
that the company did not confine itself just to the processing of tomatoes and mangoes. It also processed
guyabano, calamansi, papaya, pineapple, etc. Besides, there is the office administrative functions,
cleaning and upkeeping of machines and other duties and tasks to keep up (sic) a big food processing
corporation.
Under the above provision, an employment shall be deemed regular where the employee: a) has been
engaged to perform activities which are usually necessary or desirable in the usual business or trade of
the employer; or b) has rendered at least one year of service, whether such service is continuous or
broken, with respect to the activity in which he is employed.
In the case at bar, the work of complainants as seeders, operators, sorters, slicers, janitors, drivers, truck
helpers, mechanics and office personnel is without doubt necessary in the usual business of a food
processing company like petitioner PFVII.
It should be noted that complainants' employment has not been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time of their appointment or hiring.
Neither is their employment seasonal in nature. While it may be true that some phases of petitioner
company's processing operations is dependent on the supply of fruits for a particular season, the other
equally important aspects of its business, such as manufacturing and marketing are not seasonal. The
fact is that large-scale food processing companies such as petitioner company continue to operate and
do business throughout the year even if the availability of fruits and vegetables is seasonal.

PASCUA, JETTNER R.
2011-0095
SPECIFIED PERIOD/FIXED TERM – PUREFOODS CORP. v NLRC

G.R. No. 122653
December 12, 1997
Petitioner:
PURE FOODS CORPORATON
Respondents:
NATIONAL LABOR RELATIONS COMMISSION, RODOLFO CORDOVA, VIOLETA CRUSIS, ET AL.
Ponente:
DAVIDE, JR., J.
Facts:
The private respondents (numbering 906) were hired by petitioner Pure Foods Corporation to work for a
fixed period of five months at its tuna cannery plant in Tambler, General Santos City. After the expiration
of their respective contracts of employment in June and July 1991, their services were terminated. They
forthwith executed a “Release and Quitclaim” stating that they had no claim whatsoever against the
petitioner.
On 29 July 1991, the private respondents filed before the National Labor Relations Commission (NLRC)
Sub-Regional Arbitration Branch No. XI, General Santos City, a complaint for illegal dismissal against the
petitioner and its plant manager, Marciano Aganon.
The petitioner submits that the private respondents are now estopped from questioning their separation
from petitioner’s employ in view of their express conformity with the five-month duration of their
employment contracts. Besides, they fell within the exception provided in Article 280 of the Labor Code
which reads: “[E]xcept 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.”
The private respondents, on the other hand, argue that contracts with a specific period of employment
may be given legal effect provided, however, that they are not intended to circumvent the constitutional
guarantee on security of tenure. They submit that the practice of the petitioner in hiring workers to work
for a fixed duration of five months only to replace them with other workers of the same employment
duration was apparently to prevent the regularization of these so-called “casuals,” which is a clear
circumvention of the law on security of tenure.
Issue:
Whether or not private respondents are employed and that of having secured term/fixed term, by
petitioner.
Ruling:
Yes. 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.
Now on the validity of private respondents' five-month contracts of employment. In the leading case of
Brent School, Inc. v. Zamora, which was reaffirmed in numerous subsequent cases, this Court has upheld
the legality of fixed-term employment. It ruled that the decisive determinant in term employment should
not be the activities that the employee is called upon to perform but the day certain agreed upon by the
parties for the commencement and termination of their employment relationship. But, this Court went on
to say that where from the circumstances it is apparent that the periods have been imposed to preclude
acquisition of tenurial security by the employee, they should be struck down or disregarded as contrary to
public policy and morals.
Brent also laid down the criteria under which term employment cannot be said to be in circumvention of
the law on security of tenure:
1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any
force, duress, or improper pressure being brought to bear upon the employee and absent any other
circumstances vitiating his consent; or
2) It satisfactorily appears that the employer and the employee dealt with each other on more or less
equal terms with no moral dominance exercised by the former or the latter.
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.

PASCUA, JETTNER R.
2011-0095
SECURITY OF TENURE – SOUTHERN COTOBATO v NLRC

G.R. No. 121582
October 16, 1997
Petitioners:
SOUTHERN COTABATO DEVELOPMENT AND CONSTRUCTION, INC.
or SODECO/LIBERTY CONSTRUCTION JOINT VENTURE/ELLA G. DEMANDANTE
Respondents:
NATIONAL LABOR RELATION COMMISSION, Fourth Division, and
PEDRO RABINA, ALEXANDER YBA, BILLY BULFA, JOSE GERONILLA,
ALFREDO SEIT, JUANITO DUEÑAS,
RICHARD SILORIO, NENITO NALIPAY, ENIE DINOLAN, JOSE NICO
ESPAÑOL, ROBERTO ALABATA, JOSE SUELTO, ARTEMIO VILAN,
SENENIO B. SALACOT, JESUS BANQUERIGO, MOISES REPOLLO,
WEBSTER SERION, RENATO DUE-ÑAS, JAIME RODRIGUEZ, RAUL AGUSTIN, WELIJADO
SALOMA, JOSEPH SALOMA, MELICIO DARING, JR., GUILLERMO ALMARIO, GUIL-BERT
TIO, BENEGILDO ARABE, ROMULO SALACOT, MIGUELITO ORIOLA, ARTEMIO VILAN, JR.,
ARMANDO VILAN, ALBERT SUELTO, ALBERTO QUINQUELERIA, SIXTO TOLEDO, RODRIGO
MARAVILLAS, RAMON SILORIO, HAROLD MIRAFLOR, DAVID RABINA, AL-FONSO DUENAS,
ROBERTO FER-NANDO ALABATA, ANTONIO MONTEDERAMOS, JR., DANNY SEDILLO,
PURIFICACION BAL-BUENA, WEBSTER SERION, JR., MARIANO SILORIO, BENITO MAG-SINO, and
TOMAS ESPAÑOL
Ponente:
DAVIDE, JR., J.
Facts:
Petitioners Southern Cotabato Development and Construction, Inc. (SODECO) and Liberty Construction
entered into a joint venture for the construction of a road, funded by the Asian Development Bank
(ADB), connecting the municipality of Sibulan in Negros Oriental and Bais City. Petitioner Ella G.
Demandante was the Managing Director of SODECO.
Private respondents, hired by SODECO as watchmen, survey aides, laborers and carpenters in
connection with the road construction project, alleged that they were dismissed by Demandante when
they asked for salary increases. They then sued for illegal dismissal and sought reinstatement with
payment of wage differentials, overtime pay, premium pay for rest days and holidays, thirteenth month
pay and damages with Regional Arbitration Branch VII of the NLRC.
In their position paper, private respondents alleged that they were underpaid as petitioners paid a daily
wage of merely P50 for the carpenters, P40 or P35 for the other workers, with the exception of Danny
Sedillo and Purificacion Balbuena who earned P400 a month. Private respondents- watchmen also
claimed that they were not paid their premium pay for working on their rest days or holidays, and for
overtime of at least four hours which they were required to render daily. Private respondents further
alleged that they signed petitioners’ copy of the payroll in triplicate, with the first page indicating the actual
amount received and the second and third pages left blank and stapled closely to the first sheet.
Issue:
Whether or not respondents were entitled to security of tenure and have they been unlawfully dismissed.

Ruling:
Yes. It is not disputed that private respondents were project employees. As such, they were entitled to
security of tenure guaranteed by the Constitution and the Labor Code for the duration of the project they
were hired for, or the phases thereof to which they were assigned or in connection with which they
rendered services. The length of their employment is determined by the completion of the task for which
they were hired.
In the instant case, hearings were conducted as the parties opted for hearing instead of a submission of
the case based on position papers and supporting documents; and yet the respondents presented only
their paymaster who is ostensibly not in a position to testify as to the legality of the dismissals. The
respondents argued that the complainants, who were project employees, were laid-off upon the
completion of the phases of the project to which they were assigned and yet, produced no notices
thereof. As to the case of the watchmen, it unmistakably appears that they were illegally and unjustly
dismissed. They were hired to watch the facilities, and the respondents later discharged them for the
simple reason that they had to be replaced with licensed and armed guards. The respondents failed to
show that the watchmen by their service contracts were hired for a definite period or up to their
replacement by licensed and armed guards.

PASCUA, JETTNER R.
2011-0095
ONE YEAR SERVICE – TABAS v CALIFORNIA MANUFACTURING CO. INC,

G.R. No. L-80680
January 26, 1989
Petitioners:
DANILO B. TABAS, EDUARDO BONDOC, RAMON M. BRIONES, EDUARDO R. ERISPE, JOEL
MADRIAGA, ARTHUR M. ESPINO, AMARO BONA, FERDINAND CRUZ, FEDERICO A. BELITA,
ROBERTO P. ISLES, ELMER ARMADA, EDUARDO UDOG, PETER TIANSING, MIGUELITA
QUIAMBOA, NOMER MATAGA, VIOLY ESTEBAN and LYDIA ORTEGA
Respondents:
CALIFORNIA MANUFACTURING COMPANY, INC., LILY-VICTORIA A. AZARCON, NATIONAL LABOR
RELATIONS COMMISSION, and HON. EMERSON C. TUMANON
Ponente:
SARMIENTO, J.
Facts:
Petitioners were, prior to their stint with California, employees of Livi Manpower Services, Inc. (Livi), which
subsequently assigned them to work as "promotional merchandisers" for the former firm pursuant to a
manpower supply agreement. Among other things, the agreement provided that California "has no control
or supervisions whatsoever over [Livi's] workers with respect to how they accomplish their work or
perform [Californias] obligation"; the Livi "is an independent contractor and nothing herein contained shall
be construed as creating between [California] and [Livi] . . . the relationship of principal[-]agent or
employer[-]employee'; that "it is hereby agreed that it is the sole responsibility of [Livi] to comply with all
existing as well as future laws, rules and regulations pertinent to employment of labor" and that
"[California] is free and harmless from any liability arising from such laws or from any accident that may
befall workers and employees of [Livi] while in the performance of their duties for [California].
It was further expressly stipulated that the assignment of workers to California shall be on a "seasonal
and contractual basis"; that "[c]ost of living allowance and the 10 legal holidays will be charged directly to
[California] at cost "; and that "[p]ayroll for the preceeding [sic] week [shall] be delivered by [Livi] at
[California's] premises."
The petitioners were then made to sign employment contracts with durations of six months, upon the
expiration of which they signed new agreements with the same period, and so on. Unlike regular
California employees, who received not less than P2,823.00 a month in addition to a host of fringe
benefits and bonuses, they received P38.56 plus P15.00 in allowance daily.
The petitioners now allege that they had become regular California employees and demand, as a
consequence whereof, similar benefits. They likewise claim that pending further proceedings below, they
were notified by California that they would not be rehired. As a result, they filed an amended complaint
charging California with illegal dismissal.
Issue:
Whether or not petitioners had already incurred one year of service as employees of respondent.
Ruling:
Yes. The records show that the petitioners bad been given an initial six-month contract, renewed for
another six months. Accordingly, under Article 281 of the Code, they had become regular employees-of-
California-and had acquired a secure tenure. Hence, they cannot be separated without due process of
law.

California resists reinstatement on the ground, first, that the petitioners are not its employees, and
second, by reason of financial distress brought about by "unfavorable political and economic atmosphere"
"coupled by the February Revolution." As to the first objection, we reiterate that the petitioners are its
employees and who, by virtue of the required one-year length-of-service, have acquired a regular status.
As to the second, we are not convinced that California has shown enough evidence, other than its bare
say so, that it had in fact suffered serious business reverses as a result alone of the prevailing political
and economic climate. We further find the attribution to the February Revolution as a cause for its alleged
losses to be gratuitous and without basis in fact.

PASCUA, JETTNER R.
2011-0095
PROJECT EMPLOYMENT – UY v NLRC

G.R. No. 117983
September 6, 1996
Petitioner:
RIZALINO P. UY
Respondents:
NATIONAL LABOR RELATIONS COMMISSION (Fourth Division), FELIPE O. MAGBANUA, CARLOS
DELA CRUZ, REMY ARNAIZ, BILLY ARNAIZ, ROLLY ARNAIZ, DOMINGO SALARDA, JULIO CAHILIG,
and NICANOR LABUEN
Ponente:
PUNO,J.
Facts:
Private respondents alleged in common that during their employment with petitioner, they rendered
services in petitioner's construction projects and in his other businesses such as gasoline station, lumber
and equipment yards; that their working hours were from 7:00 A.M. to 5:00 P.M. with a one to two-hour
noon break for six days a week, from Monday to Saturday; that they worked during holidays but were paid
only their daily wages; and that after their dismissal, petitioner hired new workers at wages lower that
what they were receiving at the time they were dismissed.
In his answer, petitioner denied having businesses other than his construction company. He alleged that
private respondents were project employees; that they were hired by his foremen who paid them on a
"pakyaw" or daily wage basis in a construction project; that after completion of a project, private
respondents were free to find other jobs and engage in other sources of livelihood; that in fact, Felipe
Magbanua and Nicanor Labuen were farmers who worked for petitioner only after the harvest season,
Carlos dela Cruz worked for another businessman and was hired by petitioner only once in 1985, Remy
Arnaiz worked for the National Irrigation Administration, Billy and Rolly Arnaiz were fishermen and Rolly
was sometimes employed by the Department of Public Works and Highways, Domingo Salarda was a
tricycle driver who also worked in a farm, and Julio Cahilig was a carpenter who worked for petitioner
whenever his services were not contracted by other persons.
Issue:
WHETER OR NOT PRIVATE RESPONDENTS HEREIN ARE REGULAR EMPLOYEES. DESPITE

THEIR ADMISSIONS AND CORROBORATING EVIDENCE ON RECORD THAT THEY WORKED ON
PROJECTS.
Ruling:
No. Petitioner has not shown that private respondents were hired for a specific project the duration of
which had been determined at the time of hiring. In fact, petitioner has not identified the specific project
or undertaking or any phase thereof for which private respondents were hired. He failed to submit any
document such as private respondents employment contracts and employment records that would show
the dates of hiring and termination in relation to the particular construction project or the phases in which
they were employed. More importantly, petitioner has not presented the termination reports required to be
submitted to the Department of Labor and Employment Regional Office every time his employees'
services were terminated upon completion of a project.

Even assuming that the contracts were admitted, they, at best, prove that petitioner was engaged in
construction projects in the province of Antique and Region VI, and that his firm is capable of undertaking
several major construction projects simultaneously contrary to petitioner's claims of being a modest
provincial contractor. In two of these contracts, petitioner is referred to as "Rizalino P. Uy General
Merchant." This description ironically supports private respondents' allegation that aside from his
construction firm, petitioner was also engaged as in other businesses to which he assigned private
respondents in-between projects.
Clearly, private respondents were non-project employees. As mason, carpenter and laborer, they
performed work necessary and desirable in the usual business of petitioner, and are thus deemed regular
employees. They were, however, dismissed without just cause and without proper notice and
hearing. Their dismissal was illegal for which reason the respondent Commission correctly awarded them
back wages and separation pay.

PASCUA, JETTNER R.
2011-0095
PROJECT EMPLYMENT – VILLA v NLRC

G.R. No. 131552
February 19, 1999
Petitioner:
ARSENIO V. VILLA
Respondents:
NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), OCEAN-LINK CONTAINER
TERMINAL CENTER, BENJAMIN S. TAN and VICTORIA ACORDA
Ponente:
PUNO, J.
Facts:
This is a petition for certiorari to set aside the July 4, 1997 Decision and the September 22, 1997
Resolution of public respondent National Labor Relations Commission (First Division) which deleted the
awards of reinstatement and backwages including attorney’s fees made by the Labor Arbiter in favor of
petitioner Arsenio V. Villa.
First, we fastrack the facts which are well established. Private respondent Ocean Link Container
Terminal Center Inc., is a private corporation engaged in the warehousing, shipping and delivery of
goods. Private respondent Benjamin Chua is its President while private respondent Victoria Acorda is its
general manager.
Petitioner was absorbed by respondent company from his previous employer when the company was
sold to the respondents. Petitioner’s services from 1991 up to May 1, 1993 was continued by the
respondent company. From May 1, 1993, petitioner served as a checker in the warehouse of respondent
company and his latest salary was P135.00 a day.
On June 22, 1994, petitioner met an accident while in the course of performing his job. His left hand was
pinned down by a crane and resulted in the deformity and total disability of his middle finger. He was
given a month of sick leave which he extended for another month as his hand had not completely
healed. Later, he discovered that respondent company terminated his services on August 27,
1994. Petitioner filed a complaint for illegal dismissal, underpayment of wages, non-payment of overtime,
13th month pay, differentials, and attorney’s fees against the private respondents.
Issue:
Whether or not petitioner was lawfully discharged as an employee of respondent company.
Ruling:
No. In view of the failure and/or refusal of the complainant to explain his position/side in writing, the
Respondent Corporation was left with no other alternative but to terminate for cause the employment of
the complainant effective August 29, 1994.
The date of termination of complainant’s employment is very significant because if complainant’s

employment is indeed terminated on August 17, 1994 as ruled and declared in the Appealed Decision,
then the Appealed Decision is not in error in its findings of facts and the Decision would have been in
order.

However, contrary to the findings in the Appealed Decision, complainant’s employment was terminated
for cause on August 29, 1994 and upon due notice.
Since the monetary award in favor of the complainant was anchored on the wrongful and baseless
findings that complainant's employment was terminated on August 17, 1994 without notice and hearing,
necessarily the monetary award has also no basis in fact and in law.
th
That with respect to the award for the 13 month pay differential, complainant himself in one of the
hearings admitted to have received said 13th month pay.”
As aforestated, public respondent NLRC modified the Decision of the Labor Arbiter by deleting the
awards of reinstatement and backwages including attorney’s fees. It ratiocinated, viz:
“An evaluative review of the case as borne out by the record reveals that the cause for complainant’s
dismissal was due to repeated violation of company rules.

Alvin Pasicolan
2011-0089
Case Title: AGUILAR CORP v. NLRC

G.R. No.: G.R. No. 116352
Petitioner: J. & D.O. Aguilar Corporation
Respondent: National Labor Relations Commission and Romeo Acedillo
Ponente: J. Romero
Facts:
Private respondent Romeo Acedillo began working for petitioner in February 1989 as a helper-
electrician. On January 16, 1992, he received a letter from petitioner informing him of his severance from
the company allegedly due to lack of available projects and excess in the number of workers needed. He
decided to file a case for illegal dismissal before the NLRC after learning that new workers were being
hired by petitioner while his request to return to work was being ignored. In reply, petitioner maintained
that its need for workers varied. It contended that its workers are hired on a contractual or project basis,
and their employment is deemed terminated upon completion of the project for which they were hired.
On June 17, 1993, Labor Arbiter rendered judgment declaring Acedillo's dismissal to be illegal,
finding him to be a member of the regular work pool, and ordering petitioner to pay him backwages, 13th
month pay, separation pay in lieu of reinstatement, service incentive leave pay and underpayment of
wages.
On appeal, the NLRC affirmed the Labor Arbiter decision. Its motion for reconsideration of the said
decision having been rejected by the NLRC, petitioner filed the instant petition arguing that the NLRC
committed grave abuse of discretion in ruling that Acedillo was a permanent worker and in affirming the
labor arbiter's grant of monetary benefits to him.
Issue:
Whether respondent was a permanent or regular employee of the company.
Held:
Yes. The records reveal that petitioner did not specify the duration and scope of the undertaking at
the time Acedillo's services were contracted. Neither is there any proof that the duration of his assignment
was made clear to him other than the self-serving assertion of petitioner that the same can be inferred
from the tasks he was made to perform.
What is clear is that Acedillo's work as a helper-electrician was an activity "necessary or desirable
in the usual business or trade" of petitioner. This necessity is further bolstered by the fact that petitioner
would hire him anew after the completion of each project, a practice which persisted throughout the
duration of his tenure.
The petitioner admits that it maintains two sets of workers, viz., those who are permanently
employed and get paid regardless of the availability of work and those who are hired on a project basis.
This practice of keeping a work pool further renders untenable petitioner's position that Acedillo is not a
regular employee. As was held in the case of Philippine National Construction Corporation v. NLRC,

"Members of a work pool from which a construction company draws its project employees, if
considered employees of the construction company while in the work pool, are non-project employees or
employees for an indefinite period. If they are employed in a particular project, the completion of the
project or any phase thereof will not mean severance of (the) employer-employee relationship."

Alvin Pasicolan
2011-0089
Case Title: BRENT SCHOOL v. ZAMORA

G.R. No.: G.R. No. 48494
Petitioner: Brent School, Inc., and REV. Gabriel Dimache,
Respondent: Ronaldo Zamora, the Presidential Assistant for Legal Affairs, Office of the President, and
Doroteo R. Alegre
Ponente: J. Romero
Facts:
The root of the controversy at bar is an employment contract in virtue of which Doroteo R. Alegre
was engaged as athletic director by 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.
Some three months before the expiration of the stipulated period, 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."
However, at the investigation conducted by a Labor Conciliator of said report of termination of his
services, Alegre protested the announced termination of his employment. He argued that although his
contract did stipulate that the same would terminate on July 17, 1976, since his services were necessary
and desirable in the usual business of his employer, and his employment had lasted for five years, he had
acquired the status of a regular employee and could not be removed except for valid cause.
The Regional Director accepting the recommendation of the Labor Conciliator, required the
reinstatement of Alegre, as a "permanent employee," to his former position without loss of seniority rights
and with full back wages.
Brent School filed a motion for reconsideration. The Regional Director denied the motion and
forwarded the case to the Secretary of Labor for review. The latter sustained the Regional Director. Brent
appealed to the Office of the President. The Office dismissed its appeal for lack of merit and affirmed the
Labor Secretary's decision, hence this petition.
Issue:
Whether respondent was a permanent employee of the company.
Held:
No. 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. Indeed, the
Code did not come into effect until November 1, 1974, some three years after the perfection of the
employment contract, and rights and obligations thereunder had arisen and been mutually observed and
enforced.
At that time, i.e., before the advent of the Labor Code, there was no doubt whatever about the
validity of term employment. It was impliedly but nonetheless clearly recognized by the Termination Pay
Law, R.A. 1052, 11 as amended by R.A. 1787. 12 Basically, this statute provided that—
In cases of employment, without a definite period, in a commercial, industrial, or

agricultural establishment or enterprise, the employer or the employee may terminate at any time

the employment with just cause; or without just cause in the case of an employee by serving
written notice on the employer at least one month in advance, or in the case of an employer, by
serving such notice to the employee at least one month in advance or one-half month for every
year of service of the employee, whichever is longer, a fraction of at least six months being
considered as one whole year.
The employer, upon whom no such notice was served in case of termination of employment
without just cause, may hold the employee liable for damages.
The employee, upon whom no such notice was served in case of termination of employment without just
cause, shall be entitled to compensation from the date of termination of his employment in an amount
equivalent to his salaries or wages corresponding to the required period of notice.
There was, to repeat, clear albeit implied recognition of the licitness of term employment. RA
1787 also enumerated what it considered to be just causes for terminating an employment without a
definite period, either by the employer or by the employee without incurring any liability therefor.
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.

Alvin Pasicolan
2011-0089
Case Title: CEBU ENGINEERING and DEVELOPMENT CO. v. NLRC

G.R. No.: G.R. No. 118695
Petitioner: Cebu Engineering and Development Company, Inc.
Respondent: National Labor Relations Commission and Jaime Perez
Facts:
On November 1991 private respondent Jaime Perez was hired as clerk by Cebu Engineering and
Development Company (CEDCO) and was assigned to the Metro Cebu Development Project (MCDP)
II. In the last week of May 1992, however, he was reassigned to MCDP III effective 1 June 1992.
On 16 December 1992 respondent Perez was ordered by his supervisor Ms. Tudtud to drive an
engineer and her team to the job site but Perez refused because the car could only be used by the
President of the company or by one specifically authorized by him. On 23 December 1992 respondent
Perez was summoned by Mr. Butalid, CEDCO Vice President for Administration and Finance and after a
confrontation with Ms. Tudtud among others, Perez was given a notice of recall and a notice of
termination at the same time. Resisting his recall and termination, Perez filed a case for illegal dismissal
with the Labor Arbiter's office.
On 4 January 1994 the Labor Arbiter ruled that private respondent's employment was not regular
and was merely coterminous with the MCDP project. The Labor Arbiter however found the dismissal to
be groundless and granted Perez back wages from the time of termination up to the time of completion of
the project. Both parties appealed to the NLRC and on 17 November 1994 the NLRC reversed the Labor
Arbiter's decision on the status of Perez' employment and found him to be a regular employee, affirmed
the finding of illegal dismissal and ordered his reinstatement.
Petitioner’s motion for reconsideration was denied; hence, this petition raising the issue of whether
the NLRC among others committed grave abuse of discretion amounting to lack or excess of jurisdiction
in finding private respondent a regular employee.
Issue:
Whether private respondent was a regular employee of the company.
Held:
Yes. Private respondent belonged to a work pool from which CEDCO drew its employees and
assigned them to different projects. He was not hired for a specific project. He was in fact a mainstay of
the company. Contrary to petitioner’s claim, his services were not terminated on 30 November 1992 but
he continued working after that. Hence, according to the law, on 1 December 1992, after a year of
continuous work, he became a regular employee regardless of any contract to the contrary. It is in
keeping with the intent and spirit of the law to rule that the status of regular employment attaches to the
casual worker on the day immediately after the end of the first year of service.

Alvin Pasicolan
2011-0089
Case Title: CIELO v. NLRC

G.R. No.: G.R. No. 78693
Petitioner: Zosimo Cielo
Respondent: National Labor Relations Commission, Henry Lei and/or Henry Lei Trucking
Ponente: J. Cruz
Facts:
The petitioner is a truck driver who claims he was illegally dismissed by the private respondent, the
Henry Lei Trucking Company. The Labor Arbiter found for him and ordered his reinstatement with back
wages. On appeal, the decision was reversed by the National Labor Relations Commission, which held
that the petitioner's employment had expired under a valid contract.
The private respondent rests its case on the agreement and maintains that the labor laws are not
applicable because the relations of the parties are governed by their voluntary stipulations. The contract
having expired, it was the prerogative of the trucking company to renew it or not as it saw fit.
The agreement was supposed to have commenced on June 30, 1984, and to end on December
31, 1984. On December 22, 1984, however, the petitioner was formally notified by the private respondent
of the termination of his services on the ground of expiration of their contract. Soon thereafter, on January
22, 1985, the petitioner filed his complaint.
The petitioner claimed he started working for the private respondent on June 16, 1984, and having
done so for more than six months had acquired the status of a regular employee. As such, he could no
longer be dismissed except for lawful cause.
Issue:
Whether the petitioner was a regular employee of the company.
Held:
Yes. The factual finding of the Labor Arbiter that the petitioner was a regular employee of the
private respondent was correct. The private respondent is engaged in the trucking business as a hauler of
cattle, crops and other cargo for the Philippine Packing Corporation. This business requires the services
of drivers, and continuously because the work is not seasonal, nor is it limited to a single undertaking or
operation. Even if ostensibly hired for a fixed period, the petitioner should be considered a regular
employee of the private respondent, conformably to Article 280 of the Labor Code. The agreement in
question was null and void ab initio to prevent circumvention of the employee's right to be secure in his
tenure.
It appears from the records that all the drivers of the private respondent have been hired on a fixed
contract basis, as evidenced by the mimeographed form of the agreement and of the affidavit. The private
respondent's intention is obvious. There is no question that the purpose behind these individual contracts
was to evade the application of the labor laws by making it appear that the drivers of the trucking
company were not its regular employees.
It is plain that the petitioner was hired at the outset as a regular employee. At any rate, even
assuming that the original employment was probationary, the Labor Arbiter found that the petitioner had
completed more than six month's service with the trucking company and so had acquired the status of a
regular employee at the time of his dismissal.

Alvin Pasicolan
2011-0089
Case Title: HIGHWAY COPRA TRADERS v. NLRC

G.R. No.: G.R. No. 108889
Date: July 30, 1998
Petitioner: Highway Copra Traders and/or Gerson Dulang (owner-operator)/ Luzviminda Dulang
Respondent: National Labor Relations Commission- Cagayan de Oro, and David Empaynado
Ponente: J. Martinez
Facts:
On May 15, 1986, petitioners employed David Empeynado as a general utility man. Private
respondent, however, was not paid his full salary but was merely given cash advances. When he sought
full payment thereof, petitioners informed him not to report for work starting January 12, 1987, and wait
until he is re-hired which never happened. Thus, on December 16, 1987, he filed before the Labor Arbiter
a complaint for illegal dismissal and non-payment of regular salaries against petitioners. After hearing, the
Labor Arbiter found that private respondent was merely a casual employee and accordingly dismissed his
complaint.
On appeal, the National Labor Relations Commission (NLRC) reversed the Labor Arbiter’s
decision. When their motion for reconsideration was denied by the NLRC, petitioners elevated the
case via petition for certiorari. Petitioners principally ascribe grave abuse of discretion on the part of the
NLRC for declaring private respondent a regular employee and thus, entitled to unpaid wages and other
monetary benefits. They argue that private respondent performed tasks that were menial and not in any
way connected with petitioners’ copra business and that he was hired only on a “per need basis.”
Issue:
Whether respondent is a regular employee of the company.
Held:
Yes. The factual milieu of this case undisputedly shows that private respondent was a regular
employee of petitioners’ copra business. Article 280 of the Labor Code describes a regular employee as
one who is either (1) engaged to perform activities which are necessary or desirable in the usual business
or trade of the employer; and (2) those casual employees who have rendered at least one year of service,
whether continuous or broken, with respect to the activity in which he is employed.
In this case, the nature of private respondent’s work as a general utility man was definitely
necessary and desirable to petitioners’ business of trading copra and charcoal regardless of the length of
time he worked therein. As such, he is a regular employee pursuant to the first paragraph of Article 280 of
the Labor Code.
Petitioners further argue that private respondent was only engaged for a specific task, the
completion of which resulted in the cessation of his employment. This is not correct. By "specific project
or undertaking," 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 in which case, the services of an employee are necessary and
desirable in the employer’s usual business only for the period of time it takes to complete the project.
Such circumstance does not obtain in this case.

Alvin Pasicolan
2011-0089
Case Title: INTERNATIONAL PHARMACEUTICALS, INC., v. NLRC

G.R. No.: G.R. No. 106331
Date: March 9, 1998
Petitioner: International Pharmaceuticals, Inc.,
Respondent: National Labor Relations Commission Fourth Division, and Dr. Virginia Camacho Quinta
Ponente: J. Mendoza
Facts:
Petitioner International Pharmaceuticals, Inc. employed private respondent Virginia Camacho

Quintia as Medical Director of its Research and Development department. The contract of employment
provided for a term of one year from the date of its execution on March 19, 1983, subject to renewal by
mutual consent of the parties at least thirty days before its expiration.
When Quintia’s contract was about to expire, she was invited by Xavier University in Cagayan de
Oro City to be the chairperson of its pharmacology department. However, Pio Castillo, the president and
general manager, prevailed upon her to stay, assuring her of security of tenure and because of this
assurance, she declined the offer of Xavier University. Indeed, after her contract expired on March 19,
1984, she remained in the employ of petitioner.
On July 10, 1986, Paz Wong replaced Quintia as head of the Research and Development
department and two days later, received an inter-office memorandum officially terminating her services
because of the expiration of her contract of employment.
On January 21, 1987, private respondent filed a complaint, charging petitioner with illegal dismissal
and praying that petitioner be ordered to reinstate private respondent and to pay her full back wages and
moral damages. In a decision rendered on December 18, 1990, the Labor Arbiter found private
respondent to have been illegally dismissed. He held that private respondent was a regular employee
and not a project employee as provided in the Labor Code.
Petitioner contends among others that the NLRC’s reliance on Art. 280 is “clearly contrary to this
Court’s decisions;” that private respondent’s tasks are really not necessary and desirable to the usual
business of petitioner and that that there is “clearly no legal or factual basis to support respondent
NLRC’s reliance on the absence of a new written contract as indicating that respondent Quintia became a
regular employee.” hence this petition.
Issue:
Whether private respondent become a regular employee after the expiration of the written
contract?
Whether or not the one-year service of respondent made her into a regular employee of the
petitioner?
Held:
Yes on both counts. 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.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph:

Provided, That any employee who has rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with respect to the activity in which he is
employed and his employment shall continue while such activity exists.
In Brent School, Inc. v. Zamora, it was held that although work done under a contract is necessary
and desirable in relation to the usual business of the employer, a contract for a fixed period may
nonetheless be made so long as it is entered into freely, voluntarily and knowingly by the
parties. Applying this ruling to the case at bar, the NLRC held that the written contract between petitioner
and private respondent was valid, but, after its expiration on March 18, 1984, as the petitioner had
decided to continue her services, it must respect the security of tenure of the employee in accordance
with Art. 280.
Petitioner’s ground is that the ruling of the NLRC is contrary to the Brent School decision. He
contends that Art. 280 should not be so interpreted as to render employment contracts with a fixed term
invalid. But the NLRC precisely upheld the validity of the contract in accordance with the Brent
School case. Indeed, the validity of the written contract is not in issue in this case. What is in issue is
whether private respondent did not become a regular employee after the expiration of the written contract
on March 18, 1984 on the basis of the facts pointed out by the NLRC, simply because there was in the
beginning a contract of employment with a fixed term.

Alvin Pasicolan
2011-0089
Case Title: MERCADO v. NLRC

G.R. No.: G.R. No. 79869
Petitioner: Fortunado Mercado, Sr., Rosa Mercado, Fortunado Mercado Jr., Antonio Mercado, Jose
Cabral, Lucia Mercado, Asuncion Guevara, Anita Mercado, Marina Mercado, Juliana
Cabral, Guadalupe Paguio, Brigida Alcantara, Emerlita Mercado, Romeo Guevara,
Romeo Mercado and Leon Santillan
Respondent: National Labor Relations Commission Third Division Labor Arbiter Luciano Aquino, RAB-
III; Aurora L. Cruz; Spouses Francisco De Borja and Leticia De Borja; and Sto. Niño
Realty, Incorporated
Ponente: J. Padilla
Facts:
Petitioners alleged in their complaint that they were agricultural workers utilized by private
respondents in all the agricultural phases of work on the 7 1/2 hectares of ace land and 10 hectares of
sugar land owned by the latter. They were all allegedly dismissed on April 1979 from their employment.
Private respondent Aurora Cruz in her answer to petitioners' complaint denied that said petitioners
were her regular employees and instead averred that she engaged their services, through Spouses
Fortunato Mercado, Sr. and Rosa Mercado, their "mandarols", that is, persons who take charge in
supplying the number of workers needed by owners of various farms, but only to do a particular phase of
agricultural work necessary in rice production and/or sugar cane production.
The Labor Arbiter ruled in favor of private respondents and held that petitioners were not regular
and permanent workers of the private respondents, for the nature of the terms and conditions of their
hiring reveal that they were required to perform phases of agricultural work for a definite period of time
after which their services would be available to any other farm owner. Both parties filed their appeal with
the National Labor Relations Commissions (NLRC).
Petitioners questioned respondent Labor Arbiter's finding that they were not regular and permanent
employees of private respondent Aurora Cruz while private respondents questioned the award of financial
assistance granted by respondent Labor Arbiter.
The NLRC ruled in favor of private respondents affirming the decision of the Labor Arbiter, with the
modification of the deletion of the award for financial assistance to petitioners.
In the present Petition for certiorari, petitioners seek the reversal of the above-mentioned rulings.
Petitioners contend that respondent Labor Arbiter and respondent NLRC erred when both ruled that
petitioners are not regular and permanent employees of private respondents based on the terms and
conditions of their hiring, for said findings are contrary to the provisions of Article 280 of the Labor
Code. They submit that petitioners' employment, even assuming said employment were seasonal,
continued for so many years such that, by express provision of Article 280 of the Labor Code as
amended, petitioners have become regular and permanent employees.
Issue:
Whether petitioners are regular and permanent farm workers.

Held:
No. A careful examination of the facts reveals that the findings of the Labor Arbiter in the case are
ably supported by evidence. There is, therefore, no circumstance that would warrant a reversal of the
questioned decision of the Labor Arbiter as affirmed by the National Labor Relations Commission.
The contention of petitioners that the second paragraph of Article 280 of the Labor Code should
have been applied in their case presents an opportunity to clarify the afore-mentioned provision of law. A
project employee has been defined to be 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, or where the work or service to be performed is seasonal in nature and the employment
is for the duration of the season as in the present case.
Clearly, therefore, petitioners being project employees, or, to use the correct term, seasonal
employees, their employment legally ends upon completion of the project or the season. The termination
of their employment cannot and should not constitute an illegal dismissal.

Alvin Pasicolan
2011-0089
Case Title: NAESS SHIPPING PHILIPPINES, INC., v. NLRC

G.R. No.: G.R. No. 73441
Petitioner: NAESS SHIPPING PHILIPPINES, INC.,
Respondent: National Labor Relations Commission and Zenaida R. Dublin
Ponente: J. Narvasa
Facts:
On the night of September 3, 1983, while the vessel M/V DYVI PACIFIC was plying the seas en
route from Santos, Brazil to Port Said, Egypt, Pablo Dublin the vessel's chief steward, fatally stabbed the
second cook, Rodolfo Fernandez, during a quarrel, then ran to the deck from which he jumped or fell
overboard. An alarm was immediately raised, and the vessel turned to comb the surrounding area for
Dublin. After some time his floating body was briefly sighted, but it disappeared from view even as
preparations to retrieve it were being made, and was never seen again.
There is no dispute that Dublin had been hired by NAESS Shipping, Philippines, Inc. (NAESS) to
serve aboard the M/V DYVI PACIFIC under an employment contract which incorporated as part thereof
the Special Agreement between the International Workers Federation (ITF) and NAESS Shipping
(Holland) B.V. of Amsterdam, the mother company of NAESS (Philippines). Said Agreement bound
NAESS to pay cash benefits for loss of life the of workers enrolled therein.
After answer was filed by NAESS denying liability on the ground that Pablo Dublin had taken his
own life and that suicide was not compensable under the Agreement invoked, the parties agreed to
submit the case for decision on the basis of position papers. Thereafter, the POEA rendered judgment for
the complainant, holding Dublin's death compensable under said Special Agreement and ordering
NAESS to pay complainant and her child compensation benefits.
NAESS argues the thesis that suicide is not compensable under the employment contract of
Pablo Dublin because said agreement did not constitute it the insurer of Dublin's life, that to allow the
payment of death benefits in the particular circumstances of this case would amount to paying a price or
reward for murder, and that the NLRC incurred in serious error in finding that there was no conclusive
proof that Dublin had intentionally killed himself .
Issue:
Whether the payment of cash benefits to Dublin’s immediate next of kin of said crewman's death
by suicide is compensable.
Held:
Yes. At first blush these arguments would seem to possess some merit. They fail, however, to
stand closer scrutiny. There is no question that NAESS freely bound itself to a contract which on its face
makes it unqualifiedly liable to pay compensation benefits for Dublin's death while in its service,
regardless of whether or not it intended to make itself the insurer, in the legal sense, of Dublin's life. No
law or rule has been cited which would make it illegal for an employer to assume such obligation in favor
of his or its employee in their contract of employment.
In view of what has already been stated, it makes no difference whether Dublin intentionally took
his own life, or he killed himself in a moment of temporary aberration triggered by remorse over the killing
of the second cook, or he accidentally fell overboard while trying to flee from imagined pursuit, which last

possibility cannot be ruled out considering the state of the evidence. The POEA and the NLRC had every
reason to declare that there was lack of conclusive or credible proof that Dublin intentionally took his own
life.

Alvin Pasicolan
2011-0089
Case Title: PHIL. GEOTHERMAL INC. v. NLRC

G.R. No.: G.R. No. 82643-67
Petitioner: Philippine Geothermal Inc.
Respondent: National Labor Relations Commission, Teodula C. Cuebillas , Armando Cilot, Mariano
Corullo, Yolanda Cal, Efren Clerigo, Felicissimo Vargas, et al.
Ponente: J. Paras
Facts:
Petitioner Philippine Geothermal, Inc. is a U.S. corporation engaged in the exploration and
development of geothermal energy resources as an alternative source of energy. Private respondents, on
the other hand, are employees of herein petitioner occupying various positions ranging from carpenter to
Clerk II, categorized as contractual employment, for a period ranging from fifteen (15) days to three (3)
months. These contracts were regularly renewed to the extent that individual private respondents had
rendered service from three (3) to five (5) years until 1983 and 1984 when petitioner started terminating
their employment by not renewing their individual contracts. Thus, complainant union and herein
respondent employees filed a case for illegal lockout and unfair labor practice.
On March 3, 1987, Labor Arbiter rendered a decision in favor of the respondents and they are
hereby declared regular and permanent employees and finding their dismissal from the service illegal,
ordered to reinstate them to their former positions without loss of seniority rights and with one year back
wages without qualification or deduction.
On Appeal, the National Labor Relations Commission on November 9, 1987 rendered a decision
dismissing the appeal and affirming the decision of the Labor Arbiter. A motion for reconsideration was
denied on March 9, 1988 for lack of merit. Hence, this petition which was filed on April 22, 1988.
Issue:
Whether private respondents may be considered regular and permanent employees due to their
length of service in the company despite the fact that their employment is on contractual basis.
Held:
Yes. In the recent case of Kimberly Independent Labor Union for Solidarity, Activism, and
Nationalism-Olalia vs. Hon. Franklin M. Drilon, G.R. Nos. 77629 and 78791 promulgated last May 9,
1990, this Court classified the two kinds of regular employees, as: 1) those who are engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer; and 2)
those who have rendered at least one (1) year of service, whether continuous or broken with respect to
the activity in which they are employed.
Assuming therefore, that an employee could properly be regarded as a casual (as distinguished
from a regular employee) he becomes entitled to be regarded as a regular employee of the employer as
soon as he has completed one year of service. Under the circumstances, employers may not terminate
the service of a regular employee except for a just cause or when authorized under the Labor Code. It is
not difficult to see that to uphold the contractual arrangement between the employer and the employee
would in effect be to permit employers to avoid the necessity of hiring regular or permanent employees
indefinitely on a temporary or casual status, thus to deny them security of tenure in their jobs. Article 106
of the Labor Code is precisely designed to prevent such result.

It is the policy of the state to assure the right of workers to "security of tenure." The guarantee is an
act of social justice. When a person has no property, his job may possibly be his only possession or
means of livelihood. Therefore, he should be protected against any arbitrary deprivation of his job. Article
280 of the Labor Code has construed "security of tenure" as meaning that "the employer shall not
terminate the services of the employee except for a just cause or when authorized by the Code."

Alvin Pasicolan
2011-0089
Case Title: PUREFOODS CORP., v. NLRC

G.R. No.: G.R. No. 122653
Petitioner: Purefoods Corporation
Respondent: National Labor Relations Commission, Rodolfo Cordova, Violeta Crusis, et al.
Ponente: J. Davide
Facts:
The private respondents (numbering 906) were hired by petitioner Pure Foods Corporation to work
for a fixed period of five months at its tuna cannery plant in Tambler, General Santos City. After the
expiration of their respective contracts of employment in June and July 1991, their services were
terminated.
On 29 July 1991, the private respondents filed before the NLRC a complaint for illegal dismissal
against the petitioner and its plant manager, Marciano Aganon. On 23 December 1992, the Labor Arbiter
handed down a decision dismissing 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 private respondents appealed from the decision to the NLRC and on 28 October 1994, the
NLRC affirmed the Labor Arbiter's decision. However, on private respondents’ motion for
reconsideration, the NLRC rendered another decision on 30 January 1995 holding that the private
respondents 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
the Supreme Court contending that respondent NLRC committed grave abuse of discretion amounting to
lack of jurisdiction in reversing the decision of the Labor Arbiter.
The petitioner submits that the private respondents are now estopped from questioning their
separation from petitioner’s employ in view of their express conformity with the five-month duration of their
employment contracts. Besides, they fell within the exception provided in Article 280 of the Labor Code
which reads: “[E]xcept 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.”
The private respondents, on the other hand, argue that contracts with a specific period of employment
may be given legal effect provided, however, that they are not intended to circumvent the constitutional
guarantee on security of tenure. They submit that the practice of the petitioner in hiring workers to work
for a fixed duration of five months only to replace them with other workers of the same employment
duration was apparently to prevent the regularization of these so-called “casuals,” which is a clear
circumvention of the law on security of tenure.
Issue:
Whether employees hired for a definite period and whose services are necessary and desirable in
the usual business or trade of the employer are regular employees.
Held:
Yes. The 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 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.
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.

Alvin Pasicolan
2011-0089
Case Title: SOUTHERN COTABATO v. NLRC

G.R. No.: G.R. No. 121582
Petitioner: Southern Cotabato Development and Construction Inc., or SODECO/Liberty Construction
joint venture/Ella G. Amandante
Respondent: National Labor Relations Commission Fourth Division, and Pedro Rabina, Alexander Yba,
Billy Bulfa, Jose Geronilla, Alfredo Seit, Juanito Dueñas, Richard Silorio, Nenito Nalipay,
Enie Dinolan, Jose Nico Español, Roberto Alabata, Jose Suelto, Artemio Vilan, Senenio
B. Salacot, Jesus Banquerigo, Moises Repollo, Webster Serion, Renato Dueñas, Jaime
Rodriguez, Raul Agustin, Welijado Saloma, Joseph Saloma, Melicio Daring Jr., Guillermo
Almario, Guilbert Tio, Benegildo Arabe, Romulo Salacot, Miguelito Oriola, Artemio Vilan
Jr., Armando Vilan, Albert Suelto, Alberto Quinqueleria, Sixto Toledo, Rodrigo Maravillas,
Ramon Silorio, Harold Miraflor, David Rabina, Alfonso Dueñas, Roberto Fernando
Alabata, Antonio Montederamos Jr., Danny Sedillo, Purificacion Balbuena, Webster
Serion Jr., Mariano Selorio, Benito Magsino, and Tomas Español
Ponente: J. Davide
Facts:
Petitioners Southern Cotabato Development and Construction, Inc. (SODECO) and Liberty
Construction entered into a joint venture for the construction of a road, connecting the municipality of
Sibulan in Negros Oriental and Bais City. Petitioner Ella G. Demandante was the Managing Director of
SODECO.
Private respondents, hired by SODECO as watchmen, survey aides, laborers and carpenters in
connection with the road construction project, alleged that they were dismissed by Demandante when
they asked for salary increases. They then sued for illegal dismissal and sought reinstatement with
payment of wage differentials, overtime pay, premium pay for rest days and holidays, thirteenth month
pay and damages with the NLRC. Petitioners denied the charge of illegal dismissal. They alleged that
private respondents were project employees whose work was coterminous with the phases of project to
which they were assigned. The labor arbiter rules in favor of the workmen and awarded payment of their
back wages and reinstatement.
Private respondents appealed to the NLRC, which, however, dismissed the appeal on 11 March
1993 for private respondents’ failure to appeal within the ten-day reglementary period. In its assailed
Decision of 29 March 1995, the NLRC thus ruled the respondents [petitioners herein] are hereby ordered
to pay the back wages of the petitioners. Petitioners sought reconsideration of the NLRC decision, but the
NLRC denied their plea it in its resolution of 27 July 1995. Petitioners then filed this special civil action,
asserting that the public respondent NLRC committed grave abuse of discretion in holding that the private
respondents were illegally dismissed.
Issue:
Whether the employees had security of tenure during their contract.

Held:
Yes. It is not disputed that private respondents were project employees. As such, they were
entitled to security of tenure guaranteed by the Constitution and the Labor Code for the duration of the
project they were hired for, or the phases thereof to which they were assigned or in connection with which
they rendered services. The length of their employment is determined by the completion of the task for
which they were hired.

It is settled that the burden of proving that an employee was dismissed with just cause rests upon
the employer. The best evidence would have been the service contract of each complainant and the
schedule of completion of the various phases of the construction project, which should have been in
petitioners’ possession. However, petitioners failed to present even copies of these documents.
Since private respondents were illegally dismissed, the NLRC committed no error in awarding full
back wages to private respondents from the time they were dismissed up to the completion of the project
or the phases thereof to which they were assigned, as the case may be, pursuant to Article 279 of the
Labor Code.

Alvin Pasicolan
2011-0089
Case Title: ST. THERESA’S SCHOOL v. NLRC

G.R. No.: G.R. No. 211955
Petitioner: St. Theresa’s School of Novaliches Foundation and Adoracion Roxas
Respondent: National Labor Relations Commission Esther Reyes
Ponente: J. Purisima
Facts:
Petitioner Adoracion Roxas is the president of St. Theresa’s School of Novaliches

Foundation. She hired private respondent, Esther Reyes, on a contract basis, for the period from June 1,
1991 to March 31, 1992. However, private respondent commenced work on May 2, 1991. She went on a
leave of absence from February 17 to 21 and from February 24 to 28, 1992, such leave of absence
having been duly approved by petitioner Roxas. On March 2, 1992, private respondent reported for work,
but she only stayed in her place of work from 6:48 to 9:38 a.m. Thereafter, she never
returned. Respondent maintains that she was replaced. When she went back to work on February 20,
1992, she was replaced by Annie Roxas, daughter of petitioner Adoracion Roxas. She tried to
contact her employer but the latter could not be found within the school premises.
On March 25, 1992, petitioners sent private respondent a letter by registered mail, informing her
that her contract, due to expire on March 31, 1992, would not be renewed. Prior thereto, or on March 3,
1992, to be precise, the private respondent instituted NLRC NCR Case against the herein petitioners
for “unfair labor practice based on harassment, illegal dismissal etc” The Labor Arbiter came out with a
decision reinstating respondent and awarding back wages. On December 7, 1993, after posting the
necessary supersedeas bond, petitioners appealed the aforesaid decision to the NLRC. Unfortunately for
private respondent, she never interposed any appeal from NLRC’s ruling, upholding the validity of her
dismissal. It is therefore settled, beyond the reach of this court’s power of review, that private
respondent’s employment was validly terminated.
Issue:
Whether contract of employment with a fixed period is valid.
Held:
Yes. The court takes note of the undisputed fact that private respondent was employed on a
contract basis. Article 280 of the Labor Code does not proscribe or prohibit an employment contract with
a fixed period provided the same is entered into by the parties, without any force, duress or improper
pressure being brought to bear upon the employee and absent any other circumstance vitiating
consent. It does not necessarily follow that where the duties of the employee consist of activities usually
necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on
a period of time for the performance of such activities. There is thus nothing essentially contradictory
between a definite period of employment and the nature of the employee’s duties.
It goes without saying that contracts of employment govern the relationship of the parties. In this
case, private respondent’s contract provided for a fixed term of nine (9) months, from June 1, 1991 to
March 31, 1992. Such stipulation, not being contrary to law, morals, good customs, public order and
public policy, is valid, binding and must be respected.
It bears stressing that private teachers are subject to special rules with respect to requisites for
their permanent employment and security of tenure, to wit:
1. He must be a full time teacher,

2. He must have rendered at least three consecutive years of service; and,
3. Such service must be satisfactory.
This is in accord with the Manual of Regulations for Private Schools issued by the then Department
of Education.

Alvin Pasicolan
2011-0089
Case Title: TABAS v. CALIFORNIA MANUFACTURING CO. INC.

G.R. No.: G.R. No. 80680
Petitioner: Danilo B. Tabas, Eduardo Bondoc, Ramon M. Briones, Eduardo R. Erispe, Joel
Madriaga, Arthur M. Espino, Amaro Bona, Ferdinand Cruz, Federico A. Belita, Roberto P.
Isles, Elmer Armada, Eduardo Udog, Peter Tiansing, Miguelita Quiamboa, Nomer
Mataga, Violy Esteban and Lydia Ortega
Respondent: California Manufacturing Company Inc., Lily Victoria A. Azarcon, National Labor
Relations Commission, and Hon. Emerson C. Tumanon
Ponente: J. Sarmiento
Facts:
On July 21, 1986, July 23, 1986, and July 28, 1986, the petitioners petitioned the National Labor
Relations Commission for reinstatement and payment of various benefits, including minimum wage,
overtime pay, holiday pay, thirteen-month pay, and emergency cost of living allowance pay, against the
respondent, the California Manufacturing Company.
Petitioners were, prior to their stint with California, employees of Livi Manpower Services, Inc. (Livi),
which subsequently assigned them to work as "promotional merchandisers" for the former firm pursuant
to a manpower supply agreement. It was stipulated that the assignment of workers to California should be
on a "seasonal and contractual basis".
The petitioners now allege that they had become regular California employees and demand, as a
consequence whereof, similar benefits. California admits having refused to accept the petitioners back to
work but deny liability therefore for the reason that it is not, to begin with, the petitioners' employer and
that the "retrenchment" had been forced by business losses as well as expiration of contracts. It appears
that thereafter, Livi re-absorbed them into its labor pool on a "wait-in or standby" status.
The labor arbiter's decision, a decision affirmed on appeal, ruled against the existence of any
employer-employee relation between the petitioners and California ostensibly in the light of the manpower
supply contract and absolved Livi from any obligation because the "retrenchment" in question was
allegedly "beyond its control."
Issue:
Whether the petitioners are California's or Livi's regular employees.
Held:
The petitioners are regular employees. Neither Livi nor California can escape liability that is,
assuming one exists. The fact that the petitioners have been hired on a "temporary or seasonal" basis
merely is no argument. A temporary or casual employee, under Article 281 of the Labor Code, becomes
regular after service of one year, unless he has been contracted for a specific project. And we cannot say
that merchandising is a specific project for the obvious reason that it is an activity related to the day-to-
day operations of California.
In the case at bar, Livi is admittedly an "independent contractor providing temporary services of
manpower to its client." When it thus provided California with manpower, it supplied California with
personnel, as if such personnel had been directly hired by California. The records show that the
petitioners had been given an initial six-month contract, renewed for another six months. Accordingly,
under Article 281 of the Code, they had become regular employees-of-California-and had acquired a
secure tenure. Hence, they cannot be separated without due process of law.

Quiñones, Shirley Marie C.

2011-0114
A’ PRIME SECURITY SERVICES, INC V. NLRC

GR No. 107320
January 19, 2000
Petitioner: A’ Prime Security Services, Inc.
Respondents: NLRC (2nd Division), Hon. Arbiter Valentin Guanio and Othello Moreno
Facts: Private respondent Othello Moreno alleged that he worked as a security guard for a year with
Sugarland Security Services, Inc., a sister company of petitioner A’ Prime.
On January 30, 1988, he was rehired as a security guard by the petitioner. He was assigned to the same
post at the U.S. Embassy Building. According to him, he was forced by petitioner to sign new
probationary contracts of employment for six (6) months. On August 1, 1988, his employment was
terminated. He also claimed that during his employment, the amount of P20.00 per month was deducted
from his salary allegedly for withholding tax and the salary he was receiving was only P2,187.00 a month
contrary to the P2,410.17 stipulated in the PADPAO memorandum of agreement.
On the other hand, A’ Prime countered that Othello Moreno was hired on
January 30, 1988 on a probationary basis and he signed an authority to deduct from his salary any
reimbursement for any loss or damage caused to properties of the client. Petitioner contended that he
was given a copy of petitioner’s rules and regulations which provided that sleeping on post is punishable
by warning, suspension and dismissal. He was caught sleeping on post on March 17, 1988, for which he
was sent a memorandum giving him a last warning. On March 25, 1988, he figured in a quarrel with
another security guard, which resulted in a near shootout. At the end of his probationary employment, he
was given a psychological test and on the basis of the foregoing, petitioner told him that his probationary
employment had come to an end as he did not pass the company’s standard. Thus, he could not be hired
as a regular employee.
Thus, Othello Moreno filed a complaint for illegal dismissal, illegal deduction and underpayment
of wages against petitioner A’ Prime. Labor Arbiter Valentin Guanio handed down a decision in favor of
complainant. A’ Prime was ordered to reinstate the complainant to his former position and accord to him
the status of a regular employee, and to refund to the complainant the deduction it had made from his
salary in the amount of P20.00 per month. On appeal, the NLRC affirmed the decision of the labor arbiter
with a slight modification of setting aside the refund of the deductions from complainant’s salaries in the
amount of P20.00 per month. Likewise, the backwages should in no case exceed the period of three (3)
years.
Issues:
1. Whether private respondent’s employment with A’ Prime Security Services, Inc. was just a
continuation of his employment with Sugarland Security Services, Inc.;
2. Whether private respondent is a regular or probationary employee of petitioner; and
3. Whether private respondent’s dismissal is illegal.
Held:
1. In the first issue, records show that the allegations of Moreno that Sugarland is a sister company
of A’Prime and that the latter absorbed the security contracts and security guards of Sugarland with the
U.S. Embassy were neither denied nor controverted by the petitioner before Labor Arbiter Guanio. Under
Sec. 1, Rule 9 of the Rules of Court, in relation to Sec. 3, Rule I of the Rules of NLRC, material averments
in the complaint are deemed admitted when not specifically denied.
2. The Court holds that Othello Moreno became a regular employee upon completion of his six-
month period of probation. He started working on January 30, 1988 and completed the said period of
probation on July 27, 1988. Thus, at the time he was dismissed on August 1, 1988, he was already a
regular employee with a security of tenure. He could only be dismissed for a just and authorized cause.

Relative thereto, there is no basis for subjecting Moreno to a new probationary or temporary
employment on January 30, 1988, considering that he was already a regular employee when he was
absorbed by A’ Prime from Sugarland, its sister company.
3. Finally, on the issue of whether the dismissal of private respondent was unjust and illegal, the
Court ruled in the affirmative.
The dismissal of the private respondent was presumably based on the results of his behavioral
and neuropsychological tests and on his violation of a company rule on sleeping on post. With respect to
the behavioral and neuropsychological tests, a discrepancy was observed in the test results. In the first
page of the Evaluation Report, the complainant was ruled as “Steadiness and Endurance under pressure-
Average”. However, in the Summary page thereof, it states, “Under pressure, he needs emotional
support.” Evidently, the evaluator’s mind was already preconditioned towards enforcing A’ Prime’s intent
of terminating Othello Moreno’s employment, considering that the same was issued on the very day of his
dismissal. Hence, Moreno was not given a chance to contest his dismissal and therefore, deprived of an
opportunity to be heard.
In relation to the private respondent’s violations of sleeping on post and quarrelling with a co-
worker, the infractions were merely first offenses not punishable by outright dismissal. As such, these are
not deemed to be valid grounds for terminating the employment of private respondent.
Wherefore, the petition is DISMISSED and NLRC’s decision and resolution AFFIRMED.

2011-0114
BERNARDO V. NLRC
GR No. 122917
July 12, 1999
Petitioners: Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David p. Pascual, Raquel Estiller,
Albert Hallare, Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr., Celso M. Yazar, Alex G.
Corpuz, Ronald M. Delfin, Rowena M. Tabaquero, Corazon C. Delos Reyes, Robert G. Noora, Milagros
O. Lequigan, Adriana F. Tatlonghari, Ike Cabanducos, Cocoy Nobello, Dorenda Cantimbuhan, Robert
Marcelo, Lilibeth Q. Marmolejo, Jose E. Sales, Isabel Mamauag, Violeta G. Montes, Albino Tecson,
Melody V. Gruela, Bernadeth D. Agero, Cynthia De Vera, Lani R. Cortez, Ma. Isabel B. Concepcion,
Dindo Valerio, Zenaida Mata, Ariel Del Pilar, Margaret Cecilia Canoza, Thelma Sebastian, Ma. Jeanette
Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura, Grace S. Pardo and Rico
Timosa
Respondents: NLRC and Far East Bank and Trust Company
Ponente: J. Panganiban
Facts: Private respondent Far East Bank and Trust Company employed the forty-three (43) deaf-mutes
complainants as money sorters and counters under an "Employment Contract for Handicapped Workers"
on various periods from 1988 to 1993. Petitioners maintain that they should be considered regular
employees, because their task as money sorters and counters were necessary and desirable to the
business of respondent bank.
Far East Bank, on the other hand, countered that petitioners were hired only as "special workers
and should not in any way be considered as part of the regular complement of the Bank." Private
respondent claimed that the complainants were informed from the start that they could not become
regular employees because there were no plantilla positions for "money sorters," whose task used to be
performed by tellers. Their contracts were renewed several times, not because of need "but merely for
humanitarian reasons." Respondent further explained that the "special position" of the petitioners no
longer exists in private respondent bank after the latter had decided not to renew anymore their special
employment contracts.
Issue: Whether the petitioners have become regular employees.
Held: The petition is meritorious. As provided in Art. 280 of the Labor Code, “xxx 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 xxx”. Undoubtedly, the task of
counting and sorting bills is necessary and desirable to the business of respondent bank.
Based on records, twenty-seven (27) petitioners performed these tasks for more than six months.
Thus, Marites Bernardo, Elvira Go Diamante, Rebecca E. David, David P. Pascual, Raquel Estiller, Albert
Hallare, Edmund M. Cortez, Joselito O. Agdon, George P. Ligutan Jr., Lilibeth Q. Marmolejo, Jose E.
Sales, Isabel Mamauag, Violeta G. Montes, Albino Tecson, Melody V. Gruela, Bernadeth D. Agero,
Cynthia de Vera, Lani R. Cortez, Ma. Isabel B. Concepcion, Margaret Cecilia Canoza, Thelma Sebastian,
Ma. Jeanette Cervantes, Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth Ventura and Grace
S. Pardo should be deemed regular employees.
The Court emphasizes the concern of the State for the plight of the disabled. The noble
objectives of Magna Carta for Disabled Persons are not based merely on charity or accommodation, but
on justice and the equal treatment of qualified persons, disabled or not.
Wherefore, the petition is hereby GRANTED.


2011-0114
BUISER V. LEOGARDO, JR.

GR No. L-63316
July 31, 1984
Petitioners: Iluminada Ver Buiser, Ma. Cecilia Rillo-Acuña and Ma. Mercedes P. Intengan
Respondents: Hon. Vicente Leogardo, Jr., in his capacity as Deputy Minister of the Ministry of Labor and
Employment and GENERAL TELEPHONE DIRECTORY, CO.
Ponente: J. Guerrero
Facts: Petitioners were employed by the private respondent GENERAL TELEPHONE DIRECTORY
COMPANY as sales representatives charged with the duty of soliciting advertisements for inclusion in the
directory of the Philippine Long Distance Telephone Company. Based on records, Buiser and Intengan
entered into an "Employment Contract on Probationary Status" on May 26, 1980 with private respondent
while Acuña entered into the same employment contract on June 11, 1980.
The Employment Contract on Probationary Status provided the provisions as follows:
“The company hereby employs the employee as telephone sales representative on a
probationary status for a period of eighteen (18) months, i.e. from May 1980 to October 1981, inclusive. It
is understood that during the probationary period of employment, the Employee may be terminated at the
pleasure of the company without the necessity of giving notice of termination or the payment of
termination pay.
The Employee recognizes the fact that the nature of the telephone sales representative's job is
such that the company would be able to determine his true character, conduct and selling capabilities
only after the publication of the directory, and that it takes about eighteen (18) months before his worth as
a telephone sales representative can be fully evaluated inasmuch as the advertisement solicited by him
for a particular year are published in the directory only the following year.”
Relative thereto, the private respondent prescribed sales quotas to be accomplished by the
petitioners. Failing to meet their respective sales quotas, the petitioners were dismissed from the service
by the company. Thus, petitioners filed with the National Capital Region, Ministry of Labor and
Employment, a complaint for illegal dismissal with claims for backwages, earned commissions and other
benefits. The Regional Director dismissed the complaints of the petitioners, except the claim for
allowances which private respondent was ordered to pay.
On appeal, Deputy Minister Vicente Leogardo, Jr. affirmed the Order of the Regional Director.
Issue: Whether the 18-months probationary status is contrary to law, morals and public policy.
Held: No. The 18-months probationary status is not contrary to law, morals and public policy.
Generally, the probationary period of employment is limited to six (6) months. The exception to
this general rule is when the parties to an employment contract may agree otherwise, such as when the
same is established by company policy or when the same is required by the nature of work to be
performed by the employee. In the latter case, there is recognition of the exercise of managerial
prerogatives in requiring a longer period of probationary employment, such as in the present case where
the probationary period was set for eighteen (18) months, i.e. from May, 1980 to October, 1981 inclusive,
especially where the employee must learn a particular kind of work such as selling, or when the job
requires certain qualifications, skills, experience or training.
The petitioners’ failure to meet the sales quota assigned to each of them also constituted a just
cause for their dismissal.
Wherefore, the petition is DISMISSED for lack of merit.


2011-0114
DE LA CRUZ, JR. V. NLRC

GR No. 145417
December 11, 2003
Petitioner: Florencio M. De la Cruz, Jr.
th
Respondents: NLRC (4 Division), Shemberg Marketing Corporation and Ernesto U. Dacay, Jr.
Ponente: J. Corona
Facts: On May 27, 1996, petitioner Florencio M. De la Cruz, Jr. was employed as senior sales manager
of Shemberg Marketing Corporation. However, on September 14, 1996, petitioner was informed by Ms.
Lilybeth Llanto, the HRD Manager, that his services were terminated due to the significant drop in the
company’s sales. Thus, he immediately requested for a meeting with Shemberg’s Vice President, Ernesto
U. Dacay, Jr. but to no avail. His request to be furnished a 30-day written notice was also denied by the
management. Thus, he filed a complaint for illegal dismissal, non-payment of salary, backwages, 13th
month pay and damages against Shemberg, Ernesto Dacay, Jr. and Lilybeth Llanto.
Respondents answered that petitioner’s dismissal was premised, among others, on the
substantial drop in the company’s sales and his unauthorized reimbursement of the plane tickets of his
wife and child. Thus, petitioner was terminated for his failure to meet the required company standards and
for loss of trust and confidence. Labor Arbiter Ernesto Carreon ruled that petitioner was illegally dismissed
and granted his claim for separation pay, backwages and unpaid wages. Upon the dismissal of the
respondents’ appeal, they moved for reconsideration presenting additional evidence to support its claim.
The NLRC partially granted the motion for reconsideration. The petitioner filed a motion for
reconsideration but was denied by NLRC. He elevated the case to the Court of Appeals, but was also
dismissed. Hence, this petition.
Issue: Whether the petitioner was legally dismissed.
Held: Yes. The petitioner was legally dismissed.

Florencio M. De la Cruz, Jr. was holding a managerial position which required the full trust and
confidence of his employer. Although he could exercise some discretion, it does not include acts for his
own personal benefit. As found by the court a quo, he committed a transgression that betrayed the trust
and confidence of his employer by reimbursing his family’s personal travel expenses out of company
funds. He also failed to present any persuasive evidence or argument to prove otherwise.
Art. 281 of the Labor Code also provides “xxx Probationary employment shall not exceed six (6)
months from the date the employee started working, unless it is covered by an apprenticeship agreement
stipulating a longer period. The services of an employee who has been engaged on a probationary basis
may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with
reasonable standards, made known by the employer to the employee at the time of his engagement. xxx”
There is no dispute that as a probationary employee, he enjoyed only temporary employment
status. The employer could well decide he no longer needed the probationary employee’s services or his
performance fell short of expectations. The employer has the absolute right to severe the employer-
employee relationship provided that the termination was made before the expiration of the six-month
probationary period. In the case at bar, respondent Shemberg had good reason to terminate petitioner’s
employment on the ground of dishonesty.
Wherefore, the petition was DISMISSED for lack of merit and the decision of the Court of Appeals
dated July 11, 2000 is hereby AFFIRMED.


2011-0114
ESCORPIZO V. UNIVERSITY OF BAGUIO

GR No. 121962
April 30, 1999
Petitioners: Esperanza C. Escorpizo and University of Baguio Faculty Education Workers Union
Respondents: University of Baguio, Virgilio C. Bautista and NLRC
Ponente: J. Quisumbing
Facts: On June 13, 1989, petitioner Esperanza Escorpizo was employed by University of Baguio as a
high school teacher. In order that a probationary teacher may be extended a regular appointment: (1) the
faculty member must satisfactorily complete the probationary period of four semesters or two years, within
which his performance shall be observed and evaluated to determine his competence and fitness to be
extended permanent status; and (2) the faculty member must pass the Professional Board Examination
for Teachers (PBET).
On March 18, 1991, respondent university informed Escorpizo that her employment was being
terminated at the end of school semester in view of her failure to pass the PBET. Before the start of
school year 1991-1992, she pleaded to be given another chance on the premise that she had just taken
the PBET and hoped to pass it. Her request was favorably considered. Thus, she was allowed to teach
during SY 1991-1992. Unfortunately, Escorpizo failed again. Undaunted, she took the examination for the
third time in November 1991. On June 8, 1992, the results of PBET were released, and this time,
Escorpizo finally passed the exam. However, on June 15, 1992, respondent university no longer renewed
her contract of employment on the ground that she failed to qualify as a regular teacher. Hence, she filed
a complaint for illegal dismissal, payment of backwages and reinstatement against University of Baguio.
The Labor Arbiter ruled that respondent university had a “permissible reason” in not renewing
Escorpizo’s employment contract. Nevertheless, the labor official ordered the reinstatement of Escorpizo
but without backwages, and to extend her regular status. Due to the absence of the award for
backwages, Escorpizo appealed to NLRC. It was dismissed and the latter affirmed the labor arbiter’s
decision. Instead of filing the required motion for reconsideration, Escorpizo filed the instant petition
imputing grave abuse of discretion against NLRC in affirming the decision of the labor arbiter.
Issue: Whether Esperanza Escorpizo was illegally dismissed.
Held: No. Esperanza Escorpizo was not illegally dismissed, her contract merely expired.
In the instant case, Escorpizo was entitled to security of tenure during the period of her probation
but such protection ended the moment her employment contract expired at the close of school year 1991-
1992 due to her failure to pass the PBET examination. Consequently, as respondent university was not
under obligation to renew Escorpizo’s employment contract, her separation cannot be said to have been
without justifiable cause. In fact, the services of an employee hired on probationary basis may be
terminated when he fails to qualify as a regular employee in accordance with reasonable standards made
known by the employer to the employee at the time of his engagement.
It should also be noted that the precipitate filing of petition for certiorari under Rule 65 without first
moving for reconsideration of the assailed resolution warrants the outright dismissal of the case.
Moreover, the petitioners did not also comply with the rule on certification against forum shopping. The
certification was executed by the counsel of petitioners, which is not correct. Rather, it must be executed
by the plaintiff or any of the principal party.
Wherefore, the petition is DISMISSED and NLRC’s assailed resolution is AFFIRMED.


2011-0114
GRAND MOTOR PARTS CORP V. MOLE

GR No. L-58958
July 16, 1984
Petitioners: Grand Motor Parts Corporation
Respondents: The Minister of Labor, the Regional Director, Ministry of Labor, Region VI and Narciso
Belicena Jr.
Ponente: J. Guerrero
Facts: Private respondent Narciso Belicena Jr. was the Branch Manager of Grand Motor Parts
Corporation - Iloilo Branch. Prior to his employment in Grand Motor, he was the Finance Officer of
Warner, Barnes, & Co. Allegedly, the then acting Branch Manager, Mr. Alfredo Cisneros, induced him to
apply for the said position as the petitioner company was looking for a Certified Public Accountant. He
applied for the job and was accepted. He started working for the petitioner company on April 1, 1980 and
resigned from Warner, Barnes, & Co. only on
April 28, 1980.
However, he was terminated after working for the petitioner company for only four (4) months
because of infractions alleged by the petitioner. To wit, he failed to submit promptly the monthly Income
and Loss Statement, Comparative Projections & Actual Sales Report. The Cash Sales of the Iloilo Branch
went down to P91,318.41 for June, 1980, as compared with the sales for the month of May, 1980 in the
sum of P174,697.77. He also extended personal accounts in favor of fifteen (15) persons which as of
November, 1980 produced delinquent accounts amounting to P18,435.80. Finally, Belicena claimed lack
of knowledge of the vehicular accident caused by a subordinate and failed to provide prompt
administrative disciplinary action against the erring employee.
Issues:
1. Whether private respondent's employment as Branch Manager was probationary.
2. Whether private respondent was terminated for just cause.
Held:
1. Yes. Private respondent's employment as Branch Manager was probationary.
Given the fact that he had never been hired as manager, and the petitioner company and
Belicena’s former company are engaged in different kinds of business, it was necessary for Belicena to
undergo a period of probation to test his qualifications, skills and experience since managing is a new
experience for him.
2. Yes. Private respondent was terminated for just cause.

As stated in Article 282 of the Labor Code, a probationary employee may be terminated after six
months for a just cause or when he fails to qualify as a regular employee. In the case at bar, the petitioner
has valid grounds to charge its Branch Manager with loss of confidence by reason of the overall
performance he has demonstrated within the probationary period which showed that he is not qualified to
be the regular or permanent Branch Manager of petitioner corporation in Iloilo City.
In the last and ultimate analysis, the prerogative and judgment to hire employees under terms
and conditions designed to achieve success in its business activities belongs to management which may
not be unduly impaired, limited or restricted.
Wherefore, the petition is GRANTED.

2011-0114
HOLIDAY INN MANILA V. NLRC

GR No. 109114
September 14, 1993
Petitioners: Holiday Inn Manila and/or Hubert Liner and Baby Disquitado
Respondents: NLRC (2nd Division) and Elena Honasan
Ponente: J. Cruz
Facts: On April 15, 1991, Elena Honasan was accepted for on-the-job training as a telephone operator in
Holiday Inn Manila for a period of three (3) weeks. On May 13, 1991, after the completion of her training,
she was employed on a "probationary basis" for a period of six (6) months ending on November 12, 1991.
Her employment contract stipulated that the Hotel could terminate her probationary employment at any
time prior to the expiration of the six-month period in the event of her failure (a) to learn or progress in her
job; (b) to faithfully observe and comply with the hotel rules and the instructions and orders of her
superiors; or (c) to perform her duties according to hotel standards.
On November 8, 1991, Holiday Inn Manila notified her of her dismissal on the ground that her
performance had not come up to the standards of the Hotel. Hence, Honasan filed a complaint for illegal
dismissal contending that she was already a regular employee at the time of her separation. Therefore,
she was entitled to full security of tenure. The complaint was dismissed by the Labor Arbiter. On appeal,
the decision was reversed by the NLRC which held that Honasan had become regular employee and so
could not be dismissed as a probationer. NLRC ordered Holiday Inn Manila to reinstate Honasan to her
former position without loss of seniority rights and other privileges with backwages without deduction and
qualification.
Issue: Whether Elena Honasan was illegally dismissed.
Held: Yes. Elena Honasan was illegally dismissed. She was placed by the petitioner on probation twice,
to wit, (1) during her on-the-job training for three weeks and (2) during another period of six months. The
Hotel’s system of double probation was a transparent scheme to circumvent the plain mandate of the law
and make it easier for it to dismiss its employees even after they shall have already passed probation.
The petitioners had ample time to terminate Honasan’s services during her period of probation if they
were deemed unsatisfactory.
There is also no reason why the three-week period of on-the-job training should not be included
in the stipulated six-month period of probation. Since she was accepted on April 15, 1991, she had
become a regular employee of Holiday Inn and acquired full security of tenure as of October 15, 1991. As
a regular employee, she had acquired the protection of Art. 279 of the Labor Code stating as follows:
Art. 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the
services of an employee except for a just cause or when authorized by this Title. An employee who is
unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the time of his actual
reinstatement.
The policy of the Constitution is to give the utmost protection to the working class when
subjected to such maneuvers as the one attempted by the petitioners. The Supreme Court is fully
committed to that policy and has always been quick to rise in defense of the rights of labor.
Wherefore, the petition is DISMISSED, with costs against the petitioners.


2011-0114
INTERNATIONAL CATHOLIC MIGRATION COMMISSION V. NLRC

GR No. 72222
January 30, 1989
Petitioner: International Catholic Migration Commission (ICMC)
Respondents: NLRC and Bernadette Galang
Ponente: C.J. Fernan
Facts: On January 24, 1983, petitioner ICMC engaged the services of Bernadette Galang as a
probationary cultural orientation teacher with a monthly salary of P2,000.00. Three months later, ICMC
informed her, orally and in writing, that her services were being terminated for her failure to meet the
prescribed standards as reflected in the performance evaluation conducted by her supervisors. As a
result, she filed a complaint for illegal dismissal, unfair labor practice and unpaid wages against ICMC
with the then Ministry of Labor and Employment, praying for reinstatement with backwages, exemplary
and moral damages.
Labor Arbiter Pelagio Carpio dismissed the complaint for illegal dismissal as well as the complaint
for moral and exemplary damages, but ordered ICMC to pay Bernadette Galang the sum of P6,000.00 as
payment for the last three (3) months of the agreed employment period pursuant to her verbal contract of
employment. Both parties appealed. Galang contended that her dismissal was illegal considering that it
was effected without valid cause. On the other hand, ICMC countered that private respondent who was
employed for a period of three (3) months could not rightfully be awarded P 6,000.00 because her
services were terminated for failure to qualify as a regular employee in accordance with the reasonable
standards prescribed by the employer. On August 22, 1985, the NLRC, by a majority vote of
Commissioners Guillermo C. Medina and Gabriel M. Gatchalian, sustained the decision of the Labor
Arbiter and dismissed both appeals for lack of merit. Dissatisfied, petitioner ICMC filed the instant petition.
Issue: Whether Bernadette Galang is entitled to her salary for the unexpired portion of her
six-month probationary employment.
Held: No. Private respondent Bernadette Galang is not entitled to her salary for the unexpired portion of
her six-month probationary employment.
There is a justifiable basis for the reversal of NLRC’s award of salary for the unexpired three-
month portion of Galang’s six-month probationary employment in the light of its express finding that there
was no illegal dismissal. Records show that Galang was found by ICMC to be deficient in classroom
management, teacher-student relationship and teaching techniques. As provided for in Art. 281 of the
Labor Code, “xxx The services of an employee who has been engaged in a probationary basis may be
terminated for a just cause or when he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the time of his engagement. xxx”
The dissatisfaction of petitioner ICMC over her performance is a legitimate exercise of its
prerogative to select whom to hire or refuse employment for the success of its program or undertaking.
Thus, it was a grave abuse of discretion on the part of NLRC to order ICMC to pay Bernadette Galang her
salary for the unexpired three-month portion of her six-month probationary employment when she was
validly terminated. To sanction such action would not only be unjust, but oppressive on the part of the
employer.
Wherefore, the petition is GRANTED and the resolution of the NLRC is hereby REVERSED and
SET ASIDE insofar as it ordered petitioner to pay private respondent her P6,000.00 salary for the
unexpired portion of her six-month probationary employment.


2011-0114
ORIENT EXPRESS PLACEMENT PHILIPPINES V. NLRC

GR No. 124766
January 30, 1997
Petitioner: Orient Express Placement Philippines and Dominador Batenga, Jr.
Respondents: NLRC, Hon. Labor Arbiter Ernesto Dinopol and Ma. Luisa P. Collins
Ponente: J. Hermosisima, Jr.
Facts: Petitioner Orient Express employed respondent Ma. Luisa P. Collins as liaison officer tasked of
dealing with the Philippine Overseas Employment Agency (POEA). During a meeting dated November 9,
1993, Dominador Batenga, Jr., the President and General Manager of Orient Express, confronted private
respondent regarding the charge of exaction of excessive placement fees and was there and then
dismissed shortly after explaining herself.
Due to such incident, Collins filed a complaint for illegal dismissal, various monetary claims,
damages and attorney’s fees with the NLRC Arbitration Branch on November 17, 1993. Labor Arbiter
Ernesto Dinopol ruled in favor of Collins. Based on the documentary and testimonial evidence, he pointed
out that it was Jose Batenga, cousin of Dominador Batenga, Jr., who acted as officer-in-charge of the
ground floor of Orient Express who directed Collins to charge excessive placement fees and signed
receipts thereof. Thus, there was no substantial evidence to prove the charge against Collins resulting to
her reinstatement order and payment of backwages. Likewise, petitioner Orient Express violated Collin’s
right to due process. Relative thereto, the Labor Arbiter also awarded moral and exemplary damages as
well as attorney’s fees. On appeal by the petitioner Orient Express, NLRC agreed with the Labor Arbiter
that complainant was dismissed without due process. She was not afforded due notice and the chance to
be heard. Yet, the NLRC deleted the award of moral and exemplary damages as well as attorney’s fees
for lack of legal basis.
Both petitioners and private respondent filed tardy motions for reconsideration of the NLRC
decision.
Issue: Whether the late filing of motion for reconsideration shall render the assailed order, resolution or
decision of NLRC final and executory after ten (10) calendar days from receipt thereof.
Held: Yes. As stated in Sec. 14, Rule VII, New Rules of Procedure of the NLRC, in the absence of a
motion for reconsideration timely filed within the ten-day reglementary period, the assailed order,
resolution or decision of NLRC, becomes final and executory after ten (10) calendar days from receipt
thereof.
Nonetheless, private respondent also seeks to restore the award of moral and exemplary
damages as well as attorney’s fees deleted by the NLRC in its decision. To the same extent that the
NLRC decision must be deemed to be final and executory as regards petitioner, the same is true as
regards private respondent.
Wherefore, premises considered, the petition is hereby dismissed.


2011-0114
PHILIPPINE TOBACCO FLUE-CURING & REDRYING CORPORATION VS. NLRC

GR No. 127395
December 10, 1998
Petitioners: Philippine Tobacco Flue-Curing & Redrying Corporation
Respondents: National Labor Relations Commission, Ligaya Lubat, Mary Jane Estaris, Eufrecina Javier,
Ofelia Plandez, Edgardo Formento, Crescencia Tiu, Ma. Victoria Leon, Gellen Eulalia, Aida Licudo,
Lucina Luris, Erlinda Borce, Dominga Ayala, Carmelita Apanto, Aida Albaniel, Salvacion Sorio, Petronila
Samson, Erlinda Caranay, Rosalie Tiu, Milagros Quismundo, Luz Dela Cruz, Vivian Derla, Irene Eniego,
Vicenta Garcia, Yolanda Ignacio, Adoracion Ladera, Gloria Mendez, Leonila Mendoza, Rebecca Morales,
Teresita Tiu, Emelita Quilano, Julieta Pedrigal, Antonia Reyes, Josefa Rosales, Francisca Tismo, Norma
Aguirre, Carolina Aviso, Amelia Bautista, Rosa Borja, Apolonia Castillo, Carmelita Cayetano, Roselfida
Centina, Patria Bustillo, Feliciad Cipriano, Marina Corpuz, Matilde Corpuz, Josefina Cuenza, Bienvenida
De Guzman, Eugenia Dela Cruz, Maria Pineda, Panchita Narca, Crisanta Mulawin, Virginia Mengolio,
Rosario Osma, Arceli Madrilejo, Cristopher Labador, Candelaria Lazona, Angelita Lestingyo, Carmelita
Espiritu, Helen Estaris, Rosa Japson, Ardionela Lazona, Ariel Ultra, Reynante Tumbucon, Antenor
Remollino, Alexander Remollino, Arnaldo Napalit, Macario Moriel, Joselito Licudo, Paterno Lavalla, Jerry
Licudo, Cesar Samson, Eduardo Esguerra Jr., Ramises Centaran, Juan Bustillo, Rolando Albaniel,
Reynaldo Aquino, Jaime Esguerra, Armando Japson, Fernando Esguerra, Carlito Eniego, Reynaldo
Dayot, Marcelo Dayot, Rodolfo Cerbite, Artemio Boquilla, Pascual Aguja, Eric Aguja, Celestina Aquino,
Reynaldo Barquin, Felomena Begonia, Rosita Bagonia, Regina Benitez, Edgardo Bergano, Rodolfo
Borromeo, Ludivico Dalay, Ascilipiades Goyena, Remedio Goyena, Oscar Emnace, Gertrudes Guiao,
Lolita Musne, Alberto Parama, Luningning Peralta, Amelia Ranches, Ernesto San Juan, Liwayway San
Juan, Ricardo Triumfante, Lorena Torcido, Priscilla Villasin, Luzviminda Villegas, Rosile Versoza, Charito
Isidro, Peter Labayne, and Shirley Lubat
Ponente: J. Panganiban
Facts: This involves two groups of seasonal workers, the Lubat group and the Luris group, respectively.
The Lubat group is composed of petitioner's seasonal employees who were not rehired for the 1994
tobacco season. At the start of that season, they were merely informed that their employment had been
terminated at the end of the 1993 season. They claimed that petitioner's refusal to allow them to report for
work without mention of any just or authorized cause constituted illegal dismissal. Thus, they prayed for
separation pay, back wages, attorney's fees and moral damages.
On the other hand, the Luris group is made up of seasonal employees who worked during the
1994 season. On August 3, 1994, they received a notice informing them that, due to serious business
losses, petitioner planned to close its Balintawak plant and transfer its tobacco processing and redrying
operations to Ilocos Sur. Although the closure was to be effective September 15, 1994, they were no
longer allowed to work starting August 4, 1994. Hence, they contended that they were also illegally
dismissed and prayed for back wages.
The labor arbiter ordered the petitioner to pay complainant's separation pay differential plus
attorney's fees in the total amount of P3,092,896.76. On appeal, NLRC affirmed the decision of the labor
arbiter. Nonetheless, both labor agencies held that the Luris and Lubat groups were entitled to separation
pay equivalent to one-half (1/2) month salary for every of service, provided that the employee worked at
least one month in a given year.
Issues:
1. Whether the Lubat group was illegally dismissed.
2. Whether the Luris group was illegally dismissed.
3. How should the separation pay be computed?

Held:
1. Yes. The petitioner illegally dismissed the members of the Lubat group when it refused to allow
them to work during the 1994 season.
The Supreme Court cited the case of Manila Hotel Company v. CIR , 9 SCRA 184, 186,
September 30, 1963 , that seasonal workers who are called to work from time to time and are temporarily
laid off during off-season are not separated from service in said period, but are merely considered on
leave until reemployed. Based on the foregoing, it follows that the employer-employee relationship
between petitioner and members of the Lubat group was not terminated at the end of the 1993 season.
Rather, they were considered only on leave but still in the employ of petitioner from the end of the 1993
season until the beginning of the 1994 season.
2. Yes. The Luris group was illegally dismissed.

Serious business losses were not proven. The petitioner did not actually close its entire business.
It merely transferred or relocated its tobacco processing and redrying operations. Moreover, it was also
engaged in, among others, corn and rental operations, which were unaffected by the closure of its
Balintawak plant.
To justify retrenchment, the following should be considered: (1) the losses expected should be
substantial and not merely de minimis; (2) substantial loss must be reasonably imminent; (3)
retrenchment must be reasonably necessary; and lastly (4) alleged losses must be proven by sufficient
and convincing evidence.
Art. 283 of the Labor Code also requires the employer to furnish both the employee and the
Department of Labor and Employment a written Notice of Closure at least one month prior to closure. In
the present case, the Notices of Termination were given to the employees on August 3, 1994, and the
intended date of closure was September 15, 1994. However, the employees were in fact not allowed to
work after August 3, 1994. Thus, the termination notices, though issued, violated the one month prior
notice requisite.
3. The amount of separation pay is based on the amount of monthly salary and the number of years
of service. Articles 283 and 284 both state in connection with separation pay that a fraction of at least six
months shall be considered one whole year. In the case at bar, the amount of separation pay which
respondent members of the Lubat and Luris groups should receive is one-half (1/2) their respective
average monthly pay during the last season they worked multiplied by the number of years they actually
rendered service, provided that they worked for at least six months during a given year.
WHEREFORE, the assailed Decision of Respondent NLRC is hereby AFFIRMED WITH THE
MODIFICATION that private respondents are hereby awarded separation pay equivalent to one (1)
month, or to one-half (1/2) month pay for each year that they rendered service, whichever is higher,
provided that they rendered service for at least six (6) months in a given year. The separation pay to be
awarded to members of the Luris group shall be taken from the amount which petitioner has already
awarded to them, and any excess need not be refunded by the workers. The ten percent (10%) attorney's
fees given by the NLRC and the labor arbiter shall be based on the award modified herein.


2011-0114
PURE FOODS CORP V. NLRC

GR No. 122653
December 12, 1997
Petitioner: Pure Foods Corporation
Respondents: NLRC, Rodolfo Cordova, Violeta Crusis, et al.,
Ponente: J. Davide, Jr.
Facts: The petitioner Pure Foods Corporation hired the private respondents (numbering 906) to work for
a fixed period of five (5) months at its tuna cannery plant in Tambler, General Santos City. The
respondents’ services were terminated after the expiration of their respective contracts of employment in
June and July 1991. Thereafter, they executed a “Release and Quitclaim” stating that they had no claim
whatsoever against the petitioner.
On July 29, 1991, the private respondents filed a complaint for illegal dismissal before the NLRC
Sub-Regional Arbitration Branch No. XI, General Santos City. Labor Arbiter Arturo Aponesto dismissed
the complaint on the ground that the respondents were mere contractual employees. Thus, the
termination of their services was justified. By way of appeal to NLRC Cagayan de Oro City dated October
28, 1994, the latter affirmed the Labor Arbiter’s decision. However, on private respondents’ motion for
reconsideration, the NLRC set aside the decision and held that the private respondents were regular
employees.
Therefore, petitioner contends that respondent NLRC committed grave abuse of discretion
amounting to lack of jurisdiction in reversing the decision of the Labor Arbiter.
Issue: Whether the private respondents are regular employees.
Held: Yes. The private respondents are regular employees.

Art. 280 of the Labor Code provide the two kinds of regular employees. To wit, (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 or broken, with respect to the activity in which they are employed.
In the case at bar, the private respondents’ activities consisted in the receiving, skinning, loining,
packing and casing-up of tuna fish which were necessary in petitioner’ business. Contrary to petitioner’s
contention, the private respondents could not be regarded as having been hired for a specific project or
undertaking. Under Art. 280 of the Labor Code, the term “specific project or undertaking” contemplates a
type of work which is not done on a daily basis but only for a specific duration of time or until completion.
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 the petitioner’s claim that those workers were
hired for a specific project or undertaking only. The five-month period stated in the private respondents’
employment contracts should be struck down as it is contrary to public policy or morals by reason of
circumventing the employees’ right to security of tenure. The scheme of the petitioner was apparently
designed to prevent the private respondents and other “casual” employees from attaining the status of a
regular employee.
Since reinstatement is no longer possible due to the closure of the business, the proper remedy is
the payment of separation pay and back wages.
Wherefore, the instant petition is DISMISSED and the challenged decision of NLRC is hereby
AFFIRMED subject to the modification in the computation of separation pay and back wages.

2011-0114
SAN MIGUEL CORP V. NLRC

GR No. 125606
October 7, 1998
Petitioner: San Miguel Corporation
Respondents: NLRC, 3rd Division and Francisco de Guzman, Jr.
Ponente: J. Quisumbing
Facts: Private respondent Francisco de Guzman, Jr. was hired as helper/bricklayer for a specific project
of repair and upgrading of furnace C at San Miguel Corporations’ Manila Glass Plant in November 1990.
His contract of employment provided that such temporary employment was for a specific period of
approximately four (4) months.
On April 30, 1991, he was able to complete the repair and upgrading of furnace C resulting to his
termination of service because there was no more work to be done. On May 10, 1991, he was again hired
for a specific job which involved the draining/cooling down of furnace F and the emergency repair of
furnace E. This project was for a specific period of approximately three (3) months. After the completion of
these tasks, his services were terminated at the end of July 1991. Then, on August 12, 1994, he filed a
complaint for illegal dismissal against petitioner.
Labor Arbiter Felipe Garduque II dismissed the complaint for lack of merit sustaining petitioner’s
argument that private respondent was a project employee. On appeal, public respondent NLRC reversed
the Labor Arbiter’s decision contending that San Miguel Corp failed to adduce substantial evidence to
prove that Francisco de Guzman, Jr. was dismissed for a just or authorized cause and after due process.
Hence, this petition, based on the following grounds:
1. Respondent NLRC gravely abused its discretion in failing to rule that private respondent is a
project or a fixed period employee.
2. Respondent NLRC gravely abused its discretion in ruling that petitioner violated private
respondent’s security of tenure and that private respondent was illegally dismissed.
3. Respondent NLRC gravely abused its discretion in ruling that laches or silence or inaction for
an unreasonable length of time did not bar private respondent’s claim.
Issues: 1. Whether the private respondent is a project employee.

2. Whether he was legally terminated.
Held: 1. Yes. The private respondent is a project employee.

Following Article 280, whether one is employed as a project employee or not would depend on
whether he was hired to carry out a “specific project or undertaking”, the duration and scope of which
were specified at the time his services were engaged for that particular project. Private respondent was
engaged in the manufacture of glass for a total of seven (7) months only. Although the activity was
necessary to enable the petitioner to continue manufacturing glass, the necessity arose only when a
particular furnace reached the end of its life or operating cycle or as in the second undertaking, when a
particular furnace required an emergency repair.
2. Yes. He was legally terminated.
The undertakings, the duration and scope of which had been determined and made known to the
private respondent at the time of his employment clearly indicated the nature of his employment as
project employee. Thus, his services were terminated legally.
Wherefore, the instant petition is hereby GRANTED. The decision of NLRC is hereby
REVERSED and the judgment of Labor Arbiter REINSTATED.

2011-0114
SERVIDAD V. NLRC
GR No. 128682
March 18, 1999
Petitioner: Joaquin T. Servidad
Respondents: National Labor Relations Commission (NLRC), INNODATA Philippines Inc./INNODATA
Corporation, Todd Solomon
Facts: Petitioner Joaquin T. Servidad was employed as a “Data Control Clerk” by respondent INNODATA
on May 9, 1994. Sec. 2 of the contract states that the employment shall be effective for a period of one
(1) year commencing on May 10, 1994 until May 10, 1995 unless sooner terminated pursuant to the
provisions thereof. He shall be contractual for a period of six (6) months covering the period of May 10,
1994 to November 10, 1994, during which the employer shall serve a written notice should the latter
opted to terminate his services. However, should he continue his employment beyond November 10,
1994, he shall become a regular employee upon demonstration of sufficient skill depending on his ability
to meet the standards by the employer. Should he fail to demonstrate the ability to master his task during
the first six months, he can be placed on probation for another six months after which he will be evaluated
for promotion as a regular employee.
On November 9, 1994, he was made to sign a 3-month probationary employment and an
extended 3-month probationary employment effective until May 9, 1995. Then, he was dismissed from the
service on May 9, 1995 on the ground of alleged termination of contract of employment. Hence, he filed
an illegal dismissal complaint before the Labor Arbiter who rendered respondent INNODATA guilty of the
charge and ordered to pay backwages and reinstatement of petitioner. On appeal thereto by INNODATA,
the NLRC reversed the decision declaring that the contract between petitioner and private respondent
was for a fixed term and the dismissal, at the end of his one year term agreed upon, was valid.
Issue: Whether the contract of employment entered into by the parties is valid and enforceable.
Held: No. The contract of employment entered into by the parties is NOT valid and enforceable.
The tenor of the contract jeopardizes the right of the worker to security of tenure guaranteed by
the Constitution given the fact that the private respondent had two (2) options of termination, either by
reason of contract expiration or failure to meet work standards.
It was also clear that the petitioner was hired as a regular employee at the outset. His job as a
“Data Control Clerk” was directly related to the data processing and encoding business of INNODATA.
Thus, his work was necessary to the business of the employer. Such scenario embeds the principle under
Art. 280 of the Labor Code, which states that “xxx 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 xxx” . At any rate, even assuming that his employment was
probationary, petitioner was anyway permitted to work beyond the first six-month period. Under Art. 281
of the Labor Code, an employee allowed to work beyond the probationary period is deemed a regular
employee.
Wherefore, the petition is GRANTED, the questioned decision of NLRC is SET ASIDE and the
decision of the Labor Arbiter, dated August 20, 1996, is REINSTATED.

2011-0114
YSMAEL MARITIME CORPORATION V. AVELINO

GR No. L-43674
June 30, 1987
Petitioners: Ysmael Maritime Corporation
Respondents: Hon. Celso Avelino, in his capacity as Presiding Judge of Branch XIII, Court of First
Instance of Cebu and Spouses Felix C. Lim and Consorcia Geveia
Ponente: J. Fernan
Facts: On December 22, 1971, Rolando G. Lim, licensed second mate, was on board the vessel M/S
Rajah when it sank near Sabtan Island, Batanes causing his death. The vessel was owned by Ysmael
Maritime Corporation. Claiming that Lim’s untimely death was due to the negligence of petitioner, his
parents Felix Lim and Consorcia Geveia sued the petitioner in the Court of First Instance of Cebu for
damages on January 28, 1972. Ysmael Maritime Corporation alleged by way of affirmative defenses (1)
that the complaint stated no cause of action; (2) that respondent-plaintiffs had received P4,160.00 from
petitioner and had signed release papers discharging petitioner from any liability arising from the death of
their son; (3) that most significantly, the respondents had already been compensated by the Workmen’s
Compensation Commission for the same incident. Hence, they are now precluded from seeking other
remedies against the same employer under the Civil Code.
Petitioner sought for the dismissal of the complaint. Judge Avelino denied the petitioner’s motion
to dismiss the complaint as well as their motion for reconsideration. Hence, this petition.
Issue: Whether the compensation remedy under the Workmen’s Compensation Act (WCA), and now
under the Labor Code, for work-connected death or injuries sustained by an employee is exclusive of the
other remedies available under the Civil Code.
Held: As reiterated in Art. 173 of the Labor Code entitled Exclusive on Liability, it provides that “xxx The
payment of compensation under this Title shall bar the recovery of benefits as provided for in Sec. 699 of
the Revised Administrative Code, Republic Act No. 1161, as amended and other laws.” In the case of
Floresca vs. Philex Mining Company, GR No. L-30642, April 30, 1985, 136 SCRA 141, the third view on
exclusivity rule states that the action is selective and the employee or his heirs have a choice of availing
themselves of the benefits under WCA or of suing in the regular courts under the Civil Code for higher
damages from the employer by reason of his negligence. But once the election has been done, the
employee or his heirs are no longer free to opt for the other remedy. Thus, both actions cannot be
pursued simultaneously.
In the case at bar, respondent Lim spouses cannot be allowed to maintain their present action to
recover additional damages against petitioner under the Civil Code. In an open court, respondent
Consorcia Geveia admitted that they had previously filed a claim for death benefits with the WCC and had
received the compensation payable to them under the WCA. Therefore, it is clear that the respondents
had not only opted to recover under the Act but they had also been duly paid. At the very least, a sense of
fair play would demand that if a person entitled to a choice of remedies made a first election and
accepted the benefits thereof, he should no longer be allowed to exercise the second option.
In the light of the Court’s pronouncement in the Floresca case, respondent Judge Avelino’s denial
order of petitioner’s motion to dismiss the complaint is adjudged to be improper.
Wherefore, the respondent Judge Avelino’s orders are REVERSED and SET ASIDE.

Name: Julie Ann Q. Santos
Student number: 2011-0031
ACESITE COPORATION HOLIDAY INN, JOHANN ANGERBAUER and PHIL KENNEDY, petitioners,
vs. NATIONAL LABORS RELATIONS COMMISSION and LEO A. GONZALES, respondents
GR number: G.R. no. 152308

Petitioner: Acesite Corporation Holiday Inn, Johann Angerbauer and Phil Kennedy
Respondent: National Labors Relations Commission and Leo A. Gonzales
Ponente: Carpio-Morales, J:
FACTS:
Leo Gonzales was hired on October 18, 1993 as Chief of Security of Manila Pavillion Hotel. On
January 1, 1995, Acesite Corporation took over the operations of Manila Pavillion and renamed it Holiday
Inn Manila. Acesite retained Gonzales as Chief of Security of the Hotel.
Starting on March 25, 1998, Gonzales claimed his available leaves consecutively until April 29,
1998. But when he asked for leave up to May 13, 1998 it was not approved, however, such notice was
through a telegram where, it was alleged, by Gonzales, that such notice was received only after many
days.
Gonzales still does not report for work, and on May 5, 1998, Acesite reiterated that Gonzales
should get back to work for urgent matters.
On May 8, 1998, Gonzales went back to the Hotel to work but was blocked from entering the
premises by his subordinate and it appears that on May 7, 1998, he was terminated from work on the
ground of gross disobedience or insubordination.
ISSUES:
Whether or not there is gross disobedience/willful disobedience or insubordination on the part of
Gonzales
RATIONALE:
Willful disobedience requires the ff: (a.) the employee’s assailed conduct has been willful or
intentional, the willfulness being characterized by a “wrongful and perverse attitude”; and (b.) the order
violated must have been reasonable, lawful, made known to the employee and must pertain to the duties
which he had been engaged to discharge.
In the case at bar, Gonzalez’s receipt of the telegram disapproving his application for emergency
leave starting April 30, 1998 has not been shown. And it cannot be said that he disobeyed the May 5,
1998 telegram since he received it only on May 7, 1998. On the contrary, that he immediately went back
to Manila upon receipt thereof negates a perverse attitude.
There has been no just cause to dismiss Gonzales from employment.
HELD:
Petition denied. Acesite Corporation is ordered to pay Gonzales


DANILO DIMABAYAO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, ISLAND

BISCUIT INC. and CHENG SUY EH, respondents

Petitioner: Danilo Dimabayao
Respondent: National Labor Relations Commission and Island Biscuit Inc. and Cheng Suy Eh
Ponente: Bellosillo, J.:
FACTS:
Petitioner was an employee of respondent Island Biscuit, Inc., which manufactures biscuits.
On July 30, 1992, while petitioner was assigned to sort out rejects, with prior permission first
obtained from his checker, he went to the comfort room to answer the call of nature and relieve himself,
afterwhich he returned to his work place. But the manager, Cheng Suy Eh, was unhappy seeing petitioner
away from his work station and immediately demanded from him a written explanation allegedly for
abandoning his work. As a matter of policy, respondent company discourages its employees from going
to the comfort room during working hours for sanitary or hygienic purposes as the company is engaged in
the food business. He was suspended for 15 days for such reason. And on October 20, 1992, such
occurrence happened again, but petitioner even asked his co-employee to take over his post while
petitioner is in the comfort room. This time, petitioner was dismissed from his work on the grounds of
willful disobedience, gross and habitual neglect of duties and abandonment of work.
ISSUES:
Whether or not petitioner’s dismissal is valid
RATIONALE:
Willful disobedience of the employer’s lawful orders, as a just cause for dismissal of an employee
requires at least the ff: (1.) the employee’s assailed conduct must have been willful being characterized
by a ‘wrongful and perverse attitude’, and (2.) the order violated must have been reasonable, lawful,
made known to the employee and must pertain to the duties which he had been engaged to discharge.
Petitioner’s act of leaving his work place to relieve himself can hardly be characterized as
abandonment, much less a willful or intentional disobedience of company rules since he was merely
answering the call of nature over which he had no control. There was also no gross and habitual neglect
of duties by petitioner, since he merely relieved himself which could not have constituted abandonment,
neither could it have disrupted the operations of the company.
DECISION:
Petition GRANTED. Danilo Dimabayao be immediately reinstated to his former work.

GOLDEN THREAD KNITTING INDUSTRIES, INC., GEORGE NG and WILFREDO BICO, petitioners vs.
NATIONAL LABORS RELATIONS COMMISSION, GEORGE MACASPAC, MARY ANN MACASPAC,
ROMULA ALBASIN, MELCHOR CACHUCA, GILBERT RIVERA and FLORA BALBINO, respondents

Petitioner: Golden Thread Knitting Industries, Inc., George Ng and Wilfredo Bico
Respondent: National Labors Relations Commission, George Macaspac, Mary Ann Macaspac,
Romula Albasin, Melchor Cachuca, Gilbert Rivera and Flora Balbino
Ponente: Bellosillo, J:
This is a consolidation of 4 complaints against the petitioners.
FACTS:
GENERAL FACTS:
Private respondents, together with some of their co-worker, organized a Labor Union on the 1st
week of May, and on July 1, 1992 the Union filed a petition for certification election.
Certification Election – is a secret ballot election among employees to ascertain their freely chosen
representative for the purpose of collective bargaining. (Philippine Legal Dictionary)
ISSUES:
4.) Whether private respondents shall be reinstated on their jobs; and
5.) Whether private respondents are entitled to holiday pay
FACTS regarding the DISMISSAL of George Macaspac and Romulo Albasin:

The 2 private respondents, who worked as printers and also union members, were barred from
entering the company premises on July 6, 1992 on the ground of serious misconduct by
slashing/destructing of several bundles of towels, one of the products produced by the petitioner
company, with the use of razor on July 3, 1992.
RATIONALE:
As the Supreme Court reviews the record, it shows that the petitioners failed to give aforenamed
respondents an opportunity to be heard. There was no investigation conducted, calling the attention of the
2 respondents to the charge against them and requiring them to explain and/or answer the same.
In addition, the 2 respondents were also denied procedural due process, since not only
petitioners failed to afford Macaspac and Albasin the benefit of hearing before termination, but also
petitioners failed to comply with the requirement of notices. An established rule is that to effect a
completely valid and unassailable dismissal, an employer must show not only sufficient ground but also
proves the observation of the notice rule by giving an employee 2 notices: one, of the intention to dismiss,
indicating his acts or omissions complaint against, and two, notice of the decision to dismiss.
Macaspac and Albasin where summarily eased out of employment when they were
refused entry into the company premises 3 days after allegedly slashing the bundles of towels.
FACTS for Gilbert Rivera and Mary Ann Macaspac:

On August 14, 1992, Union Vice Chairman Gibert Rivera, as artist, was dismissed from
employment together with Union Secretary Mary Ann Macaspac on the ground of redundancy of
positions, wherein the Design Section where they worked as artists became overmanned when the
volume of work was drastically reduced.
RATIONALE:
The SC questioned petitioner’s exercise of management prerogative because it was not shown
that Rivera and Macaspac’s positions were indeed unnecessary, much les was petitioner’s claim
supported by any evidence. It is not enough for the company to merely declare that it has become
overmanned. It must produce adequate proof that such is actual situation in order to justify the dismissal
of the affected employees for redundancy.

Also, SC laid down the principle that in selecting the employees to be dismissed, these criteria
must be used, such as but not limited to: (a) less preferred status (e.g temporary employee), (b)
efficiency, and (c) seniority. The record shows that no criterion was adopted by petitioners in dismissing
Rivera and Macaspac. Another procedural lapse committed by petitioners is the lack of written notice to
the DOLE required under Article 283 of the Labor Code. The purpose of such notice is to ascertain the
verity of the cause of termination of employment.
FACTS for Flora Balbino:

On August 5, 1992, Balbino was suspended, then on the same day terminated from her job as
sewer, on the ground that she threatened the personnel manager and violated the company rules by
removing her time card from the rack.
RATIONALE:
The utterances by an employee of obscene, insulting or offensive words against a superior justify
his dismissal for gross misconduct. The scornful attitude is also destructive of his co-employee’s morale.
However, the dismissal will not be upheld where it appears that the employee’s act of disrespect was
provoked by the employer. In this case, the SC believes that the dismissal was a harsh penalty, since
Balbino was provoked by the baseless suspension imposed on her.
In regards with Balbino taking the time card, no material damage was done since only her work
performed on July 31 and August 3, 1992 was unpaid. Also, Balbino was denied procedural due process
when she was summarily dismissed.
FACTS for Melchor Cachucha’s dismissal:

The petitioners argue that Melchor was not dismissed but abandoned his employment on July 7,
1992.
RATIONALE:
The SC sustained NLRC that Cachucha did not abandoned his work considering that he filed a
complaint for illegal dismissal against petitioner on July 16, 1992 and disavowed any notice to return to
work allegedly sent to him by petitioners. In addition, for abandonment to exist, it is essential that (1) the
employee must have failed to report fro work or must have been absent without valid or justifiable reason;
and (2) there must have been a clear intention to sever the employer-employee relationship manifested
by some over acts.
The circumstance that Cachucha lost no time in filing a complaint for illegal dismissal against
petitioners on July 16, 1992 is incompatible with the charge of abandonment and confirms, actually, that
he was refused entry in to the company premises.
GENERAL RATIONALE:
The petitioners exercised their authority to dismiss without due regard to the pertinent provisions
of the Labor Code. In addition, in regards with whether private respondents are entitled to holiday pay, the
dismissed workers distinctly set forth in their Position Paper that they were not remunerated for 10 regular
holidays for the years 1990, 1991 and 1992 and such claim stands undisputed.
DECISION:
Wherefore, petitioners are directed to reinstate private respondents to their former positions and
to give private respondents their pay for 10 regular holidays for each year.

CRISTONICO B. LEGAHI, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and UNITED
PHILIPPINE LINES, INC., NORTHSOUT SHIP MGT., (PTE), LTD., SINGAPORE, GREGORIO V. DE
LIMA, JR., TOR KARLSEN and PIONEER INSURANCE & SURETY CORP., respondents

Petitioner: Cristonico B. Legahi
Respondent: National Labors Relations Commission, United Philippine Lines, Inc., Northsouth
Ship Mgt., (PTE), LTD., Singapore, Gregorio V. De Lima, Jr., Tor Karlsen and
Pioneer Insurance & Surety Corp.
FACTS:
Cristonico Legahi was hired as Chief Cook aboard M/V Federal Nord with a contract of
employment for 10 months beginning October 9, 1992.
Sometime in November 1992, petitioner was asked by the Shipmaster to prepare a
victualling cost statement for the month of October, 1992. After learning that such preparation involves
mathematical skills, as it would require estimation of food cost, value of stocks, etc., he intimated that he
did not know how to do such work as it was not part of the duties of a chief cook. He was told that it was
not a difficult job, and so Legahi complied. It happened again on December, cost for the month of
November, and on January for the month of December. On 6th day of that same month, January, the
Shipmaster asked petitioner to do a corrected victualling cost for December, but Legahi refused for he
stated that he was busy doing his chores.
On January 14, a committee was formed headed by the Shipmaster himself and read to
Legahi his alleged offenses and thereafter dismissed from his work on the ground of serious and gross
insubordination.
ISSUE:
Whether or not there is gross insubordination or willful disobedience on the part of Legahi
RATIONALE:
For willful disobedience to be considered as just cause for dismissal, the employee’s
conduct must be willful or intentional, the willfulness being characterized by a wrongful and perverse
attitude and the order violated must have been reasonable, lawful, made known to the employee and
must pertain to the duties which he has been engaged to discharge.
In the case at bar, it was actually not petitioner’s duty to prepare the victualling statement.
From the beginning, petitioner already stated that he did not know how to accomplish such statement,
since he only came aboard to cook, and his refusal for that time, only because he was busy doing his
chores, cannot be considered as being characterized by a wrongful and perverse attitude.
HELD:
Wherefore, petition is Granted.


ANICETO W. NAGUIT, JR., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and
MANILA ELECTRIC COMPANY, respondents

Petitioner: Aniceto W. Naguit, Jr.
Respondent: National Labor Relations Commission and Manila Electric Company
Ponente: Carpio-Morales, J.:
FACTS:
Petitioner was an employee of respondent MERALCO since August 11, 1959 until his dismissal
on June 13, 1991, 32 years of service.
On June 5, 1987, petitioner informed his supervisor that he would render overtime work on June
6, 1987, Saturday, and after finishing his field work on that day, he would proceed to Quezon to
accompany his wife who was a principal sponsor to a kin’s wedding.
On June 6, 1987, petitioner went at the office to work until 12:00 noon, then, he, together with his
co-employee, Fidel Cabuhat, who drove for petitioner, proceeded to Quezon.
A cash voucher for Cabuhat was prepared on account of petitioner for the alleged overtime work
of Cabuhat on June 6, which voucher represents meal allowance and rental for jeep.
More than 2 years later, petitioner received from the Legal and Investigation Staffs of MERALCO
a letter informing him of Administrative hearings to be conducted in regards with his alleged violation:
1. Causing the reimbursement of transportation expense for Mr. Cabuhat for alleged work not
actually rendered
2. Leaving of work assignment without permission from his superior
After the hearings were conducted and results came out, petitioner was dismissed from his work.
ISSUES:
Whether or not petitioner’s dismissal is valid
RATIONALE:
Petitioner, as and Administrative Officer, is covered by respondent MERALCO’s policy pertaining
to field personnel, particularly when he is designated to perform field assignments. MERALCO’s policy for
field personnel would be giving them considerations when given a project where they could leave early as
long as their work has been satisfactorily done.
In regards with the reimbursement for Cabuhat, petitioner committed dishonesty and breached
MERALCO’s trust when he released the reimbursement for Cabuhat since he knew that Cabuhat did not
conduct any field work on June 6, 1987, but merely drove for him to Pagbilao, Quezon. And petitioner’s
attempt at exoneration cannot be a defense since as a custodian of the petty cash fund, he had the duty
to ascertain the circumstances which brought about any claim therefrom.
However, dismissal is too harsh as a penalty; given his 32 years of service which he had no
derogatory record. But he cannot be reinstated now that petitioner was over 60 years of age, the
retirement age for MERALCO.
DECISION:
MERALCO is ORDERED to pay petitioner his retirement benefits from the inception of
his service up to 60 years of age, in accordance with its retirement plan.


PNOC-EDC, et. Al., petitioners, vs. FREDERICK V. ABELLA, respondent

Petitioners: PNOC-EDC, Nazario Vasquez, president; Marcelino Tongco, Acting Manager
Project Operations & Manager, Project Development; Jesus Quevenco, Jr.,
Resident Manager, SNGP/PIPE; and Remegio B. Cornelio, Human Resource
Officer, SNGP-PIPE
Respondent: Frederick V. Abella
Ponente: Chico-Nazario, J.
FACTS:
Frederick V. Abella started working for Philippine National Oil Company-Energy
Development Corporation (PNOC-EDC) on June 1, 1989. Less than one year later, or on April 20, 1990,
Abella was informed that his employment with PNOC-EDC would be terminated effective May 21, 1990,
due to a company-wide reorganization in regards to its Manpower Reduction Program, wherein the
position of Security Assistant, Abella’s position, had been abolished.
Abella filed complaint and, when the results came, he was recalled to the company but to
another position since his old position was abolished. As time passes, he was repositioned to the security
department and then transferred to different sites.
However, the directives, such as reporting immediately to one site and then immediately
reporting back to the other, were disregarded or ignored by Abella stating that he was not reinstated to his
former position as Security Assistant per Writ of Execution issued by the labor arbiter.
Abella continue disregarding directives for transferring another until he received notice of
termination on the ground of insubordination or willful disobedience.
ISSUE:
Whether or not there is insubordination or willful disobedience on the part of Abella.
RATIONALE:
Insubordination or willful disobedience must have: (a.) reasonable and lawful orders,
regulations or instructions of the employer, (b.) sufficiently known to the employee, and (c.) in connection
with the duties which the employee has been engaged to discharge.
In the case at bar, respondent Abella was well informed of the orders of transfer and said
orders were well in connection with the security functions of respondent.
The reasonableness and lawfulness of an order depend on the circumstances availing in
each case. Reasonableness pertains to the kind or character of directives and commands and to the
manner in which they are made. The petitioners claim that the orders were well within their managerial
prerogative to make.
Review of records shows that there is a valid reason behind the transfer of Abella: due to
the emergency need of the state of affairs in the geothermal plant/or other site of the company. In
addition, the job description of Abella states reassignment from one place to another, depending on
security needs and he also state that he’s willing to accept a provincial assignment on his application for
employment. Therefore, the dismissal is valid.
HELD:
Wherefore, petition is Granted.


TEODORICO ROSARIO, petitioner, vs. VICTORY RICEMILL, respondent
GR number: G.R No. 147572

Petitioner: Teodorico Rosario
Respondent: Victory Ricemill
Ponente: Callejo, J.
Facts:
Petitioner Teodorico Rosario was a Truck Driver for the bussinessman Emilio Uy
who was engaged in the business of milling palay under the business name Victory Ricemill from January
11, 1982 up to his dismissal on June 22, 1993.
According to respondent, petitioner was guilty of insubordination when he
refused to serve as a driver of Mr. Uy's son when the latter needed a driver. Also, once when Rosario was
instructed to deliver 600 bags of cement to the Felix Hardware in Tuguegarao, Rosario delivered the
same to one Eduardo Interior. And because of Rosario's tendency to disobey the order to him, Uy
engaged the services of another driver.
On June 21, 1993, Rosario, armed with a dagger, fought with the new driver and
inflicted an injury on the latter, in addition, inflicted injuries on the head of another co-employee, when he
intervened in the fight and tried to pacify the petitioner.
Respondent terminated petitioner's employment for the latter's notorious acts of
insubordination and the attempt to kill a fellow employee.
This is an instant petition for review on certiorari.
Issue:
Whether or Not petitioner's termination was for a just and lawful cause.
Held:
The findings that the petitioner is guilty of willful disobedience is based on
substantial evidence and is not helped by the fact that he committed a crime against his co-worker.
Willful disobedience of the employer's lawful orders, as a just caused for
dismissal, have 2 requisites: (1) the employee's assailed conduct must have been willful or intentional, the
willfulness being characterized by a “wrongful and perverse attitude”; and (2) the order violated must
have been reasonable, lawful, made known to the employee and must pertain to the duties which he had
been engaged to discharge.
Petitioner's conduct of not delivering the cement to Felix Hardware showed that
he could not even be trusted with the task. Every employee is charged with the implicit duty of caring for
the employer's property. Further, his hostile attitude towards his co-workers which eventually led him to
inflict injuries cannot be countenanced.
Wherefore, the decision of NLRC that petitioner's dismissal was valid is
AFFIRMED.

WESTIN PHILIPPINE PLAZA HOTEL, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION
and LEN RODRIGUEZ, respondents
GR number: G.R No. 121621

Date: May 3, 1999
Petitioner: Westin Philippine Plaza Hotel
Respondent: National Labor Relations Commission and Len Rodriguez
Ponente: Quisumbing, J.
Facts:
Len Rodriguez was continuously employed by petitioner Plaza Hotel from 1997 until 1993, the
year Len was terminated. At first, he was hired as pest controller, then later posted as room attendant.
Next he served as bellman, until he was finally assigned as doorman in 1981 and stayed in that position
until his termination from employment.
On December 1992, petitioner transferred Len from the position of doorman, a guest-contact
position, to linen attendant, a non-guest contact position, on the ground of negative feedback on the
services to hotel guests by Len but without a demotion in rank or pay. But petitioner continuously refused
such transfer of position: he took a vacation leave until January 16, 1993 and, when he reported back to
work, he still did not assume his post at the linen room but just stayed in the union room instead.
On February 1993, petitioner terminated Rodriguez’s employment on the ground of
insubordination.
Issue:
Whether or Not petitioner is guilty of insubordination or not
Rationale:
Willful disobedience by the employee requires at least of the ff: (a.) the employees assailed
conduct must have been willful or intentional, the willfulness being characterized by a wrongful and
perverse attitude; and (b.) the order violated must have been reasonable, lawful, made known to the
employee and must pertain to the duties which he has been engaged to discharge.
In addition, the Court recognizes and upheld the prerogative of management to transfer an
employee from one office to another within the business establishment, provided that there is no
demotion in rank or a diminution of salary, benefits and other privileges.
The willfulness of Rodriguez’s insubordination was shown by his continued refusal to report to his
new work assignment. Therefore, the dismissal was legal.
Held:
Wherefore, the petition is GRANTED.

EUGENIO P. CARREON
2011-0106
CASE TITLE : GONZALES VS. COURT OF APPEALS

GR NO. : 36213
DATE : JUNE 29,1989
PETITIONER : FELIX AND CARMEN GONZALES
RESPONDENT : HON. COURT OF APPEALS, DECEASED SPOUSES ANDRES AGCAOILE &
LEONORA
AGCAOILE, substituted by LUCIA A. SISON
PONENTE : GRINO-AQUINO, J.:
FACTS:
Petitioner leased a lot in the subdivision on which they built their house and, by tolerance of the
subdivision owner, they cultivated some vacant adjoining lots. The Court of Agrarian Relations, as well
as the Court of Appeals ruled that the plaintiffs are not de jure agricultural tenants.
Issue:
The ruling is assailed in this appeal for certiorari.
Held :
There is no merit in the petitioners argument that inasmuch as residential commercial lots may be
considered “agricultural”, an agricultural tenancy can be established on land in residential subdivision.
The Krivenko decision interpreting the constitutional prohibition against transferring private agricultural
land to individuals, corporations, or associations not qualified to acquire or hold lands of the public
domain, save in the case of hereditary succession has nothing to do with agricultural tenancy. An
agricultural leasehold cannot be established on land which has ceased to be devoted to cultivation or
farming because of its conversion into residential subdivision.
EUGENIO P. CARREON
2011-0106

CASE TITLE : ALITA VS. CA

GR NO. : 78517
DATE : FEBRUARY 27,1989
PETITIONER : GABINO ALITA, JESUS JULIAN JR. & JESUS SR., PEDRO AND VICENTE
RICALDE AND
ROLANDO SALAMAR
RESPONDENT : HON COURT OF APPEALS, ENRIQUE , PAZ AND FE REYES
PONENTE : PARAS,J.:
FACTS:
This is a petition seeking reversal of the CA on March 3,1987 affirming the judgement of the court a quo
dtd April 29,1986, the dispositive portion are as follows;
1. Declaring the P.D. No. 27 is inapplicable to lands obtained thru the homestead law,
2. Declaring the four registered co-owners will cultivate and operate the farmholding themselves as
owners thereof; and
3. Ejecting from the land the so-called tenants-petitioner, as the owners would want to cultivate the
farmholding themselves.
The subject matter of the case consists of two (2) parcels of land, acquired by private respondents’
predecessors-in-interest through homestead patent under the provisions of Commonwealth Act No. 141.
Said lands are situated at Guilinan, Tungawan, Zamboanga del Sur.
Private respondents herein are desirous of personally cultivating these lands, but petitioners refuse to
vacate, relying on the provisions of P.D. 316 and appurtenant regulation issued by DAR.
Thus on April 29,1986, the RTC issued the aforequoted decision prompting the defendants to move for a
reconsideration but the same was denied, on appeal the CA sustained the RTC judgement.
Issue:
WON the lands obtained through homestead patent are covered by the Agrarian Reform under PD 27.
Held :
PD 27 cannot be invoked to defeat the very purpose of the Public Land Act No.141, the decision of the
CA and RTC is hereby affirmed.
EUGENIO P. CARREON
2011-0106

CASE TITLE : SOCIAL SECURITY SYSTEM EMPLOYEES ASSN. VS. CA

GR NO. : 85279
DATE : JULY 28,1989
PETITIONER : SOCIAL SECURITY SYSTEMS EMPLOYEES ASSOCIATION (SSSEA), DIONISION
T. BAYLON,
RAMON MODESTO, JUANITO MADURA, REUBEN ZAMORA, VIRGILIO DE
ALDAY,
SERGIO ARANETA, PLACIDO AGUSTIN AND VIRGILIO MAGPAYO
RESPONDENT : THE COURT OF APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON. CEZAR C.
PARALEJO,
RTC, BRANCH 98, QUEZON CITY
PONENTE : CORTES, J.:
FACTS:
On June 11,1987, the SSS filed with the RTC of Quezon City a complaint for damages with a prayer for a
writ of preliminary injunction against petitioners, alleging that on June 09 ,1987, the officers and members
of SSSEA staged an illegal strike and barricaded the entrances to the SSS Building; that the strike was
reported to the Public Sector Labor-Management Council, which ordered the strikers to return to work;
that the strikers refused to return to work; and that SSS suffered damages as a result of the strike.
It appears that the SSSEA went to strike after the SSS failed to act on the union demands on certain job
related issues and unfair labor practices. The court a quo, on June 11,1987, issued a temporary
restraining order pending resolution of the application for a writ of preliminary injunction. In the meantime,
petitioners filed a motion to dismiss alleging the trial court’s lack of jurisdiction over the subject matter.
The SSS filed an opposition, on July 22,1987, the court a quo denied the motion to dismiss and converted
the restraining order into an injunction upon posting of a bond, after finding the strike illegal. As
petitioners motion for reconsideration of the aforesaid order was also denied on August 14,1988,
petitioners filed petition for certiorari and prohibition with preliminary injunction before the SC, the SC
referred the case to COA.
Upon motion of the SSS on Feb.06,1989, the Court issued a temporary restraining order enjoining the
petitioners from staging another strike or from pursuing the notice of strike they filed with the DOLE on
Jan.25,1989 and to maintain the status quo.
The COA dismiss the petition for certiorari and prohibition with preliminary injunction filed by the
petitioners and held that since the strikers are government employees, they are not allowed to strike, and
may be enjoined by the RTC, which has jurisdiction over the SSS complaint for damages, from continuing
with their strike.
Issue:
Do the employees of the SSS have the right to strike and the RTC have jurisdiction?
HELD:
SSS is one of such GOCC with original charter, having been created under R.A No. 1161, its employees
are part of the civil service and covered by a memorandum prohibiting strikes. This being the case, the
strike staged by the employees of the SSS was illegal.
No reversible error having been committed by the COA, the petition is hereby denied.

EUGENIO P. CARREON
2011-0106
CASE TITLE : LUZ FARMS VS. SEC. OF DEPT. OF AGRARIAN REFORM

GR NO. : 86889
DATE : DEC. 04,1990
PETITIONER : LUZ FARMS
RESPONDENT : THE HON. SECRETARY OF DEPARTMENT OF AGRARIAN REFORM
PONENTE : PARAS J,:
FACTS:
This is a petition for prohibition with prayer for restraining order and/or preliminary and permanent
injunction against the Hon. Sec of Agrarian Reform for acting without jurisdiction in enforcing the assailed
provisions of RA no.6657 otherwise known as the Comprehensive Agrarian Reform Law of 1998 and in
the promulgating the Guidelines and Procedure Implementing Production and Profit Sharing under RA
No.6657, insofar as the same apply herein petitioner, and further from performing an act in violation of the
constitutional rights of the petitioner.
Luz Farms is a corporation engaged in the livestock and poultry business and together with others in the
same business allegedly stands to be adversely affected by the enforcement of section 3(b), Section 11,
Section 13, Section 16(d) and 17 and Section 32 of RA No.6657 otherwise known as Comprehensive
Agrarian Reform L aw and of the Guidelines and Procedures Implementing Production and Profit Sharing
under RA No. 6657.
Hence Luz Farms file a petition praying that aforesaid laws, guidelines and rules be declared
unconstitutional. Meanwhile, it is also prayed that a writ of preliminary injunction or restraining order be
issued enjoining public respondent from enforcing the same.
Issue:
The main issue in this petition is the constitutionality of Sec 3(b), 11, 13 and 32 of RA No. 6657, insofar
as the said law, includes the raising of livestock, poultry and swine in its coverage as well as the
Implementing Rules and Guidelines promulgated in accordance therewith.
Held :
Pettiton is granted , said sections and implementing rules are hereby declared null and void.

EUGENIO P. CARREON
2011-0106
CASE TITLE : REPUBLIC VS. CA

GR NO. : 87676
DATE : December 20,1989
PETITIONER : REPUBLIC OF THE PHILIPPINES represented by NATIONAL PARKS
DEVELOPMENT
COMMITTEE
RESPONDENT : THE HON. COURT OF APPEALS and the NATIONAL PARKS DEVELOPMENT
SUPERVISORY ASSOCIATION & THEIR MEMBERS
PONENTE : GRINO – AQUINO, J.
FACTS:
The Regional Trial Court of Manila, Branch III, dismissed for lack of jurisdiction, the petitioner’s complaint
in Civil Case No. 88-44048 praying for a declaration of illegality of the strike of the private respondents
and to restrain the same. The Court of Appeals denied the petitioners petition for certiorari, hence, this
petition for review.
This issue came about because although the NPDC was originally created in 1963 under Executive Order
no. 30, as the Executive Committee for the development of the Quezon Memorial, Luneta and other
national parks and later renamed as the National Parks Development Committee under Executive Order
No. 68 on Sept. 21,1967.
By virtue of Executive Order No. 120 dated Jan. 30,1989, the NPDC was attached to the Ministry (later
Department) of Tourism and provided with a separate budget subject to audit by the Commission of Audit.
On Sept. 10,1987, the Civil Service Commission notified NPDC that pursuant to E.O. No. 120, all
appointments and other personnel actions shall be submitted through the Commission.
Meanwhile, the Rizal Park Supervisory Employees Association, consisting of employees holding
supervisory positions in the different areas of the parks, was organized.
On March 20,1988, these unions staged a strike at the Rizal Park, Fort Santiago, Paco Park and Pook ni
Mariang Makiling , alleging unfair labor practises by NPDC. On March 21 of the same year, NPDC filed in
the RTC in Manila, Branch III against the union to declare the strike illegal and to restrain it on the ground
that the strikers, being government employees, have no right to strike although they may form a union.
On March 24,1988, the RTC dismissed the complaint and lifted the restraining order for lack of
jurisdiction, the Court of Appeal affirmed the order of the trial court.
Issue:
WON the NPDC is a government agency or private corporation, for this issue depends the right of its
employee to strike.
Held :
In Jesus P. Perlas Jr. vs People, GR no. 84637-39, Aug.2,1989, we ruled that the NPDC is an agency of
the government, not a GOCC. While NPDC employees are allowed under the 1987 Constitution to
organize and join unions of their choice, there is as yet no law permitting them to strike. In case a labor
dispute between the employees and the government, that the Public Sector Labor Management Council
not the DOLE shall hear the dispute.
The petition for review is granted. The decision of the COA is hereby set aside.

EUGENIO P. CARREON
2011-0106
CASE TITLE : PEOPLE VS. GOCE

GR NO. : 113161
DATE : AUGUST 29,1995
PETITIONER : PEOPLE OF THE PHILIPPINES
RESPONDENT : LOMA GOCE y OLALIA, DAN GOCE and NELLY D. AGUSTIN, accussed. NELLY
D.
AGUSTIN, accussed-appelant.
PONENTE : REGALADO, J.:
FACTS:
On Jan. 12,1988, an information for illegal recruitment committed by a syndicate and in a large scale
against spouses Dan and Loma Goce and herein accussed-appelant Nelly Agustin in the RTC of Manila
Branch 5 for 8 persons in different occasions between May 1986 to June 25,l987. The victims are (1)
Rolando Dalida y Piernas, (2) Ernesto Alvarez y Lubangco, (3)Rogelio Salada y Savillo (4) Ramona
Salado y Alvarez, (5) Dionisio Masaya y de Guzman (6) Dave Rivera y de Leon, (7) Lorenzo Alvares y
Velayo and (8) Nelson Trinidad y Santos.
On Jan. 21,1987, a warrant of arrest was issued against the three accused but not one of them was
arrested. Hence on February 02,1989, the trial court ordered the case archived but it issued a standing
warrant of arrest against the accused.
On Feb. 26,1993 Nelly Agustin was apprehended by the Paranaque police. On March 08,1993, her
counsel filed a motion to revive the case and requested that it be set for hearing for the purpose of due
process and for the accused to immediately have her day in court.
Four of the complainant testified for the prosecution and all of the corroborated that indeed Nelly Agustin
is involved in large scale illegal recruitment. Nelly denied any participation and that the recruitment was
perpetrated only by the Goce couple.
On Nov. 19,1993, the trial court rendered judgement finding the herein appellant guilty as a principal in
the crime of illegal recruitment in large scale and sentenced her to serve the penalty of life imprisonment,
as well as to pay a fine of P100,000.00.
Issue:
WON the crime does not fall within the meaning of Art 13(b) in relation to Art 34 of the Labor Code?
Held :
The appealed judgement of the court a quo is hereby affirmed in toto, with cost against accused-appellant
Nelly D. Agustin

EUGENIO P. CARREON
2011-0106
CASE TITLE : LUZON DEVELOPMENT BANK VS. ASSOCIATION OF LUZON DEVELOPMENT

BANK ET AL
GR NO. : 120319
DATE : OCTOBER 06,1995
PETITIONER : LUZON DEVELOPMENT BANK
RESPONDENT : ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES and ATTY.
ESTER S.
GARCIA in her capacity as VOLUNTARY ARBITRATOR
PONENTE : ROMERO,J.:
FACTS:
From a submission agreement of the Luzon Development Bank (LDB) and the Association of Luzon
Development Bank Employees (ALDBE) arise voluntary arbitration case to resolve the following issue:
WON the LDB has violated the CBA provision and the MOA dated April 1994.
On May 24,1995, without the LDB’s position paper, the Voluntary Arbitrator rendered a decision that the
bank has not adhered to the CBA provision nor the MOA on promotion. Hence, LDB file a petition for
certiorari and prohibition seeking set aside the decision of the Voluntary Arbitrator and to prohibit her for
enforcing the same.
Issue:
WON the SC has jurisdiction over the case?
Held :
The voluntary arbitrator no less performs a state function pursuant to a governmental power delegated to
him under the provisions therefor in the Labor Code and he falls therefore within the contemplation of the
term “instrumentality” in the Sec 9 of B.P. 129, likewise his decision is appealable to the CA in line with
the procedure outlined in Revised Administrative Circular No.1-95, just like those of the quasi-judicial
agencies, boards and commissions enumerated therein.
Accordingly, the Court resolved to refer the case to the CA.

EUGENIO P. CARREON
2011-0106
CASE TITLE : DARVIN VS. CA

GR NO. : 125044
DATE : JULY 13,1998
PETITIONER : IMELDA DARVIN
RESPONDENT : HON. COURT OF APPEALS AND PEOPLE OF THE PHILIPPINES
PONENTE : ROMERO,J.:
FACTS:
This is a petition for review of the decision of the Court of Appeal in CA-GR No. 15624 dated
Jan.31,1996, which affirmed in toto the judgement of the RTC Branch 19, Bacoor, Cavite convicting the
accused-appellant for simple illegal recruitment under Art 38 and Art 39, in relation to Article 13(b) of the
Labor Code as amended.
Sometime in March, 1992 Macaria Toledo met Darvin in the latter’s residence at Dimasalang, Imus,
Cavite, through the introduction of their common friends. In said meeting, Darvin convinced Toledo that
by giving her Php 150,000.00, the latter can immediately leave for the U.S without any appearance before
the U.S. Embassy. Thus on April 13,1992 Toledo gave Darvin the amount of P150,000.00 as evidence
by a receipt stating that the amount of P150,000.00 was for U.S. Visa and Airfare. However, when after a
week, there was no word from Darvin and could not find the latter at her residence.
Accused-appellant was then charged for estafa and illegal recruitment by the Office of the Provincial
Prosecutor of Cavite. In its judgement on june 17,1993 the Bacoor Cavite RTC found the accused-
appellant guilty of the crime of simple illegal recruitment but acquitted her of the crime of estafa.
Issue:
WON the guilt of the accused-appellant was proven beyond reasonable doubt?
Held :
The SC find no sufficient evidence to prove the accused-appellant offered a job to private respondent and
it is not clear that accused gave the impression that she was capable of providing the respondent
work abroad.
The appeal is hereby granted and the decision of the CA is reversed and set aside.

EUGENIO P. CARREON
2011-0106
CASE TITLE : PEOPLE VS. PANIS

GR NO. : L-58674-77
DATE : JULY 11,1990
PETITIONER : PEOPLE OF THE PHILIPPINES
RESPONDENT : HON. DOMINGO PANIS and SERAPIO ABUG
PONENTE : CRUZ,J:
FACTS:
Four informations were filed on January 9,1981, in the Court of First Instance of Zambales and Olongapo
City alleging Serapio Abug in violation of Article 16 in relation to Article 39 of the Labor Code. Abug filed
a motion to quash on the ground that the informations did not charge an offense because he was
accused of illegal recruiting only one person in each of the four informations. Under the proviso of Article
13(b), he claimed, there would be illegal recruitment only whenever two or more persons are in any
manner promised or offered any employment for a fee.
Denied at first, the motion was reconsidered and finally granted in the Orders of the trial court dated June
24 and Sept. 17,1981.
Issue:
The correct interpretation of Article 13(b) of P.D. 442 otherwise known as the Labor Code
Held :
workers. Any of the acts mentioned is the basic rule in Art 13(b) will constitute recruitment and the
placement even if only one prospective worker is involved.

Toledo, Mary Rose O.
2011-0081
CARMELITA V. SANTOS VS SAN MIGUEL CORPORATION

GR No. 149416
Petitioner: Carmelita V. Santos
Respondent: San Miguel Corporation
Ponente: Sandoval-Gutierrez, J.
FACTS:
The antecedents facts are as follows which prompted the complaint and dismissal of Carmelita
Santos:
4) On September 15, 1987, respondent San Miguel Corporation (SMC) appointed petitioner
Carmelita V. Santos as Finance Director of its Beer Division for Luzon Operations.
5) On September 6, 1989, respondent's Cash Department issued a Memorandum
prohibiting the encashment of personal checks at respondent's Plants and Sales Offices.
6) On January 10, 1991, respondent SMC, through its Cash Management Department,
noticed that petitioner encashed her three (3) personal checks in various Metro Manila
Sales Offices.
7) On January 24, 1991, respondent commenced an audit investigation of the personal
checks encashed by petitioner at its sales offices. Pending the audit investigation,
petitioner agreed to take a fifteen-day vacation leave from January 25 to February 14,
1991.
8) On January 29, 1991, petitioner received from respondent an inter-office memorandum
requiring her to explain in writing why no disciplinary action should be taken against her
in view of her unauthorized encashment of her three personal checks at respondent's
sales offices.
In a reply-memorandum dated January 31, 1991, petitioner admitted that she encashed three
personal checks at respondent's sales offices but claimed that such act was not irregular since all
personnel in respondent's Beer Division were allowed to encash their personal checks at any sales office
upon clearance from the region management concerned. She stated that her encashment of personal
checks had prior clearance.
Meanwhile, respondent obtained a copy of the audit results and learned that aside from
petitioner's reported encashment of three personal checks, she had previously encashed fifty (50)
personal checks from June 13, 1989 to January 19, 1991 in varying amounts, from P1,500.00 to
P20,000.00, which were not endorsed by the Sales Operations Manager or the Region Finance Officer.
Additionally, petitioner encashed two other personal checks in the amounts of P150,000.00 on December
12, 1990, and P100,000.00 on December 27, 1990. After receiving such report, respondent SMC formed
an Investigating Panel to conduct a full-blown investigation of petitioner's encashment of personal checks
and to determine: (1) whether the region management gave prior consent to the transactions; (2) whether
the person or persons who accepted or encashed the personal checks were in fact authorized to do so;
(3) if there is any policy, procedure and/or accommodation for the encashment of personal checks and the
extent/amount and frequency of such; and (4) the loss or damage accruing to respondent, if any.
When the petitioner returned from her vacation leave, on or February 15, 1991, she found that

she had been transferred from her room to a cubicle on the 19th Floor of the same building. There, spent
each day doing nothing for no assignment was given to her.
Subsequently, petitioner received two inter-office memoranda informing her of the
commencement of an administrative investigation pertaining to her encashment of her personal checks
and that she was relieved of her present assignment/position until the conclusion of the investigation.9
At the first investigative hearing on February 27, 1991, petitioner appeared but requested a
postponement of five days to enable her to submit a supplemental letter to the Investigating Panel.
On March 15, 1991, petitioner called the Investigating Panel by phone, expressing her doubts on
its impartiality. Despite notice, she refused to attend subsequent hearings. The Investigating Panel
considered her refusal as a waiver of her right to be heard and thus continued the investigation in her
absence.
On March 21, 1991, the Investigating Panel found her to have violated the policy reiterated in the
Cash Management Department Memo dated September 6, 1989, the alleged practice permitting Payroll 2
personnel to encash their personal checks. In addition to this, the panel thought that what Santos did
consitutes estafa. In lieu of the foregoing arguments, they recommend the termination of employment of
the petitioner.
In a memorandum dated April 5, 1991, respondent adopted the findings of the Investigating Panel
and informed petitioner of her termination from employment for abuse of position as Finance Director.
Five days before the end of the administrative investigation, or on March 15, 1991, petitioner filed
with the Labor Arbiter a complaint for constructive dismissal against respondent SMC and Ernesto S.
Escalante, Chairman of the Investigating Panel. The complaint was later amended to illegal dismissal.
On April 24, 1996, Labor Arbiter Dominador M. Cruz rendered judgment dismissing the complaint
for lack of merit. On June 30, 1999, the NLRC promulgated a decision reversing that of the Labor Arbiter.
On July 4, 2001, the Court of Appeals rendered its Decision annulling and setting aside that of the NLRC.
ISSUE:
6.) Whether the respondent SMC dismissed the petitioner from employment without just cause and
violated her right to due process.
HELD:
No. Under the Labor Code, a valid dismissal from employment requires that: (1) the dismissal
must be for any of the causes expressed in Article 282 of the Labor Code and (2) the employee must be
given an opportunity to be heard and to defend himself. Article 282(c) of the same Code provides that
"willful breach by the employee of the trust reposed in him by his employer" is a cause for the termination
of employment by an employer. This ground should be duly established. Substantial evidence is sufficient
as long as such loss of confidence is well-founded or if the employer has reasonable ground to believe
that the employee concerned is responsible for the misconduct and her act rendered her unworthy of the
trust and confidence demanded of her position.
As Finance Director, she is in charge of the custody, handling, care and protection of respondent's funds.
The encashment of her personal checks and her private use of such funds, albeit for short periods of
time, are contrary to the fiduciary nature of her duties. Prolonged practice of encashing personal checks
among respondent's payroll personnel does not excuse or justify petitioner's misdeeds.

2011-0081
CATHEDRAL SCHOOL OF TECHNOLOGY VS NLRC

GR No: L-101438
Date:
Petitioner: Cathedral School of Technology and Sr. Apolinaria Tambien, RVM
Respondent: National Labor Relations Commission and Teresita Vallejera
FACTS:
Sometime in February, 1981, private respondent Teresita Vallejera sought admission as an

aspirant to the Congregation of the Religious of Virgin Mary (RVM), upon the recommendation of
Archbishop Patrick Cronin. In order to observe the life of a religious, she came to live with the sisters of
the congregation and received free board and lodging at the house of the nuns. During the period of her
aspirancy and in return for her accommodations, she volunteered to assist as a library aide in the library
section of the Cathedral School of Technology, an educational institution run by the RVM sisters. In return
for her work as such, she was given a monthly allowance of P200.00.
After spending years with the congregation, Vallejera had a change of heart and confessed to the
sisters that she was no longer interested in becoming a nun. She pleaded, however, to be allowed to
continue living with the sisters for she had no other place to stay in, to which request the sisters acceded
and, in exchange therefor, she voluntarily continued to assist in the school library.
On January 29, 1988, private respondent formally applied for and was appointed to the position of
library aide with a monthly salary of P1,171.00. It was at around this time, however, that trouble
developed. The sisters began receiving complaints' from students and employees about private
respondent's difficult personality and sour disposition at work which even triggered the resignation of the
chief librarian Heraclea Nebria. To clarify the differences, she was summoned to the Office of the
Directress by herein petitioner Sister Apolinaria Tambien, RVM. Vallejera was also informed of the
complainaints received by the directress about her. Private respondent resented the observations about
her actuations and was completely unreceptive to the advice given by her superior. She reacted violently
to petitioner's remarks and angrily offered to resign, repeatedly saying, "OK, I will resign. I will resign."
Thereafter, without waiting to be dismissed from the meeting, she stormed out of the office in
discourteous disregard and callous defiance of authority.
On separate occasions thereafter, petitioners sent at least three persons to talk to and convince
private respondent to settle her differences with the former. Private respondent, however, remained
adamant in her refusal to submit to authority. On June 15, 1989, Sister Apolinaria sent a letter formally
informing private respondent that she had a month from said date or until July 15, 1989 to look for
another job as the school had decided to accept her resignation. Private respondent then filed a
complaint for illegal deduction and underpayment of salary, overtime pay and service incentive pay. On
July 19, 1989, she was prevented from entering the school premises by one Sister Virginia Villamino in
view of her dismissal from the service as per the aforestated letter of June 15, 1989. Consequently,
private respondent amended her complaint to include illegal dismissal.
Conversely, private respondent contends that on February 11, 1981, she was hired as a library
aide by petitioner school with a monthly salary of P200.00 but was provided with free board and lodging.
Her salary was gradually increased so that by 1986, she was already receiving P1,171.00 per month and

by June, 1988, her monthly salary was P1,386.00. Inexplicably, this was reduced to P1,227.00 in July,
1988, which amount she continued to receive until May 31, 1989, when it was raised to P2,316.00.
However. private respondent alleges that on June 2, 1989, she was forced by petitioner school directress
to tender her resignation but she refused. She was informed that her services would be terminated
effective July 15, 1989 through the letter dated June 15, 1989.
Private respondent nonetheless insists that she continued to report for work, but on July 17, 1989
and thereafter she could not find her daily time record, so she just requested a fellow employee to sign a
piece of paper to show that she reported for work. On July 19, 1989 she was barred from entering the
school due to the fact that she had already been dismissed. She requested that she be furnished a copy
of the termination paper but she was told that the letter of June 15, 1989 served that purpose. Hence, her
complaint for illegal dismissal.
On May 21, 1990, the labor arbiter rendered a decision in favor of private respondent, holding
that she was illegally dismissed for lack of due process, in that she was summarily dismissed without a
hearing being conducted in order to afford her an opportunity to present her side. The complementary
adjudication was to the effect that private respondent was not entitled to reinstatement with backwages,
but the payment of separation pay was ordered as an appropriate remedy under the circumstances. On
appeal, the NLRC affirmed the labor arbiter's decision.
ISSUE:
 Whether the respondent is illegally dismissed.
HELD:
The repondent was LEGALLY dismissed. An evaluative review of the records of this case
nonetheless supports a finding of a just cause for termination. The reason for which private respondent's
services were terminated, namely, her unreasonable behavior and unpleasant deportment in dealing with
the people she closely works with in the course of her employment, is analogous to the other "just
causes" enumerated under the Labor Code in Art.282: (a) Serious misconduct or willful disobedience by
the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross
and habitual breach by the employee of his duties; (c) Fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense
by the employee against the person of his employer or any immediate member of his family or his duly
authorized representative; and (e) Other causes analogous to the foregoing.
This being so, there can be no award for backwages, for it must be pointed out that while
backwages are granted on the basis of equity for earnings which a worker or employee has lost due to his
illegal dismissal, where private respondent's dismissal is for just cause, as is the case herein, there is no
factual or legal basis to order payment of backwages; otherwise, private respondent would be unjustify
enriching herself at the expense of petitioners. Where the employee's dismissal was for a just cause, it
would be neither fair nor just to allow the employee to recover something he has not earned or could not
have earned. Neither can there be an award for separation pay.


2011-0081
DANILO LEONARDO VS NLRC AND FUERTE VS AQUINO

GR No: 125303
Date: June 16, 2000
Petitioner: Danilo Leonardo
Respondent: National Labor Relations Commission and Reynaldo’s Marketing Corporation, et. al
Ponente: de Leon, Jr., J.
GR No: 126937
Date: June 16, 2000
Petitioner: Aurelio Fuerte and Danilo Leonardo
Respondent: Raul T. Aquino, Victoriano R. Calaycay and Rogelio I. Ralaya, as Chairman and Members
of the National Labor Relations Commission, Second Division and Reynaldo's Marketing and/or Reynaldo
Padua
Ponente: de Leon., J.
FACTS:
Petitioner Aurelio Fuerte was originally employed by private respondent REYNALDO'S

MARKETING CORPORATION on August 11, 1981 as a muffler specialist, receiving P45.00 per day.
When he was appointed supervisor in 1988, his compensation was increased to P122.00 a day,
augmented by a weekly supervisor's allowance of P600.00. On the other hand, DANILO LEONARDO was
hired by private respondent on March 4, 1988 as an auto-aircon mechanic at a salary rate of P35.00 per
day. His pay was increased to P90.00 a day when he attained regular status six months later. From such
time until he was allegedly terminated, he claims to have also received a monthly allowance equal to
P2,500.00 as his share in the profits of the auto-aircon division.
FUERTE alleges that on January 3, 1992, he was instructed to report at private respondent's
main office where he was informed by the company's personnel manager that he would be transferred to
its Sucat plant due to his failure to meet his sales quota, and for that reason, his supervisor's allowance
would be withdrawn. For a short time, Fuerte reported for work at the Sucat plant; however, he protested
his transfer, subsequently filing a complaint for illegal termination.
On his part, Leonardo alleges that on April 22, 1991, private respondent was approached by the
same personnel manager who informed him that his services were no longer needed. He, too, filed a
complaint for illegal termination.
The case was heard by Labor Arbiter Jesus N. Rodriguez, Jr. On December 15, 1994, Labor
Arbiter Emerson C. Tumanon, to whom the case was subsequently assigned, rendered judgment in favor
of petitioners. To reinstate complainant Aurelio Fuerte, to the position he was holding before the
demotion, and to reinstate likewise complainant Danilo Leonardo to his former position or in lieu thereof,
they be reinstated through payroll reinstatement without any of them losing their seniority rights and other
privileges, inclusive of allowance and to their other benefits.
On appeal, the respondent Commission modified the decision ordering the reinstatement of
Fuerte but without any monetary claims and finding the complaint of Danilo Leonardo lack or merit,
hence, dismissed.

ISSUE:
 Whether the petitioners were illegally dismissed.
HELD:
In Fuerte's case, private respondent claims that the latter was demoted pursuant to a company
policy intended to foster competition among its employees. Under this scheme, private respondent's
employees are required to comply with a monthly sales quota. Should a supervisor such as Fuerte fail to
meet his quota for a certain number of consecutive months, he will be demoted, whereupon his
supervisor's allowance will be withdrawn and be given to the individual who takes his place. When the
employee concerned succeeds in meeting the quota again, he is re-appointed supervisor and his
allowance is restored.
Insofar as the action taken against Fuerte is concerned, private respondent's justification is well-
illustrated in the record. He was unable to meet his quota for five months in 1991, from July to November
of that year. Yet he insists that it could not possibly be so. He argues that he must have met his quota
considering that he received his supervisor's allowance for the period aforesaid.
Fuerte nonetheless decries his transfer as being violative of his security of tenure, the clear
implication being that he was constructively dismissed. We have held that an employer acts well within its
rights in transferring an employee as it sees fit provided that there is no demotion in rank or diminution in
pay. The two circumstances are deemed badges of bad faith, and thus constitutive of constructive
dismissal.
Yet here, the transfer was undertaken beyond the parameters as aforesaid. The instinctive
conclusion would be that his transfer is actually a constructive dismissal, but oddly, private respondent
never denies that it was really demoting Fuerte for cause. It should be borne in mind, however, that the
right to demote an employee also falls within the category of management prerogatives.
This arrangement appears to us to be an allowable exercise of company rights. An employer is

entitled to impose productivity standards for its workers, and in fact, non-compliance may be visited with a
penalty even more severe than demotion. In the case at bar, the petitioners' failure to meet the sales
quota assigned to each of them constitute a just cause of their dismissal, regardless of the permanent or
probationary status of their employment. This management prerogative of requiring standards may be
availed of so long as they are exercised in good faith for the advancement of the employer's interest.
Neither can we say that Fuerte's actions are indicative of abandonment. To constitute such a
ground for dismissal, there must be (1) failure to report for work or absence without valid or justifiable
reason; and (2) a clear intention, as manifested by some overt acts, to sever the employer-employee
relationship. We have accordingly held that the filing of a complaint for illegal dismissal, as in this case, is
inconsistent with a charge of abandonment.
Hence, given that Fuerte may not be deemed to have abandoned his job, and neither was he
constructively dismissed by private respondent, the Commission did not err in ordering his reinstatement
but without backwages. In a case where the employee's failure to work was occasioned neither by his
abandonment nor by a termination, the burden of economic loss is not rightfully shifted to the employer;
each party must bear his own loss.

With regard to Leonardo, private respondent likewise insists that it never severed the former's
employment. On the contrary, the company claims that it was Leonardo who abandoned his post
following an investigation wherein he was asked to explain an incident of alleged "sideline" work which
occurred on April 22, 1991. It would appear that late in the evening of the day in question, the driver of a
red Corolla arrived at the shop looking for Leonardo. The driver said that, as prearranged, he was to pick
up Leonardo who would perform a private service on the vehicle. When reports of the "sideline" work
reached management, it confronted Leonardo and asked for an explanation. According to private
respondent, Leonardo gave contradictory excuses, eventually claiming that the unauthorized service was
for an aunt. When pressed to present his aunt, it was then that Leonardo stopped reporting for work, filing
his complaint for illegal dismissal some ten months after his alleged termination.
It must be stressed that while Leonardo alleges that he was illegally dismissed from his
employment by the respondents, surprisingly, he never stated any reason why the respondents would
want to ease him out from his job. Moreover, why did it take him ten (10) long months to file his case if
indeed he was aggrieved by respondents. All the above facts clearly point that the filing of his case is a
mere afterthought on the part of complainant Leonardo.
Leonardo protests that he was never accorded due process. As testified to by Merlin P. Orallo,
the personnel manager, he was given a memorandum asking him to explain the incident in question, but
he refused to receive it. In an analogous instance, we held that an employee's refusal to sign the minutes
of an investigation cannot negate the fact that he was accorded due process. We find no reason to
disturb the Commission's ruling that Leonardo had abandoned his position.

2011-0081
GREENHILLS PRODUCTS, INC. VS NATIONAL LABOR RELATIONS COMMISSION

GR No: 123950
Petitioner: Greenhills Products, Inc. and/or Jessie Yu
Respondent: National Labor Relations Commission And Buenaventura F. Abajo
Ponente: ROMERO, J.
FACTS:
Private respondent Buenaventura F. Abajo was employed by petitioner Greenhills Products Inc.
(GPI), a company engaged in the manufacture and export of rattan furnitures, as a laborer assigned at its
Bending Department.
Sometime in June 1988, he was allegedly offered by one Ruben Godornes, petitioner's Assistant
Production/Preparation Manager, to be the president of a union which the company intended to organize
which the former, however, refused. At the time, the existing collective bargaining agreement between
petitioner and the then bargaining agent Nagkakaisang Lakas ng Manggagawa was about to expire.
During the 60-day freedom period from August 14 to October 14, 1988, respondent actively campaigned
for the recognition of the Association of Labor Union (ALU) of which he was the local president.
On September 3, 1988, respondent was summoned to appear before company owner and
manager Jessie Yu's office to explain his unyielding stand to their offer. When respondent argued that the
proposed union could not guarantee his members their security of tenure, Yu was infuriated and
thereupon directed the latter to withdraw his membership with ALU which order was, however, disobeyed.
In view of his unrelenting refusal, his services were terminated. He was made to sign a memorandum
dated September 3, 1988, effecting his immediate severance therefrom, on grounds that his honesty,
sincerity and loyalty to the company has become suspect.
Petitioner, on the other hand, recounted that respondent was initially assigned at its Bending
Department. Claiming that his performance was lackluster and that he has become a problem employee
in view of his tardiness, he was transferred to the Parts Preparation Department where he allegedly
continue to perform inefficiently. As penalty therefore, he was assigned as a stockman.
On June 30, 1988, Godornes conducted an inventory of company properties and he reported that
several furniture parts and samples entrusted to respondent were found missing. When confronted with
the missing properties, the latter allegedly promised to produce them but later on allegedly refused to
comment on the loss. Thus, for loss of trust and confidence, respondent was therefore dismissed from
employment.
In a complaint for illegal dismissal and unfair labor practice against petitioner, the labor arbiter
rendered a decision dated December 7, 1993, in favor of Greenhills Products, Inc. The judgment was,
however, reversed on appeal by the NLRC in its decision dated October 24, 1995,

ISSUE:
 Whether or not the respondent was justly dismissed because of the alleged loss of trust and
confidence.
HELD:
In the instant case, petitioner failed, not only to show cause for the alleged loss of confidence, but
disregarded procedural and substantive due process as well.
First, In the case at bar, respondent was not furnished with either of the two written notices
required by law. There was no counsel to assist the respondent nor an actual hearing for him to defend
himself.
Second, guidelines for the doctrine of loss of confidence to apply are: (1) loss of confidence
should not be simulated; (2) it should not be used as a subterfuge for causes which are improper, illegal,
or unjustified; (3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary;
and (4) it must be genuine, not a mere afterthought to justify an earlier action taken in bad faith.
The lost or missing furniture parts and samples have not been sufficiently established by
evidence on record. Assuming in the remote possibility that some furniture parts were really lost or
missing, there is no evidence on record to establish or pinpoint that the complainant was responsible for
the said losses, except the general allegation of the respondent that the furniture parts stored in the
stockroom are entrusted to the complainant. Also, this could be a part of the plan of the petitioner to
cover up the respondent's termination on the account of his union activities.
Again, the requirement that the dismissal of an employee due to loss of trust and confidence must
be based on reasonable basis and supported by substantial evidence has not been met in the instant
case. looked askance at ALU as a "troublemaker." When respondent opted to stay with ALU, petitioner
dismissed him on trumped-up charges.


2011-0081
HACIENDA DAPDAP VS NATIONAL LABOR RELATIONS COMMISSION

GR No. 120556
Petitioner: Hda. Dapdap I And/Or Lumbia Agricultural And Development Corporation
Respondent: National Labor Relations Commission And National Federation Of Sugar Workers Food
And General Trades (Nfsw-Fgt)/Pedro Barrientos Jr.
FACTS:
Sometime on March 1992 nine (9) workers of Hda. Dapdap I, a sugar farm in Victorias, Negros
Occidental, filed a complaint for illegal dismissal against its owner Magdalena Fermin with the NLRC
Regional Arbitration Branch in Bacolod City alleging that they had been working in the farm since 1977
but were unjustly terminated, without notice and without any valid ground, on 27 January 1992. The only
reason for their dismissal was their refusal to return the 6-hectare lot given to them for cultivation under
an "Amicable Settlement" dated 30 September 1986 in connection with an illegal dismissal case
previously filed against the management of Hda. Dapdap I by its workers. In addition, complainants
charged Magdalena Fermin with unfair labor practice for trying to bust the National Federation of Sugar
Workers Food and General Trades (NFSW-FGT) Union which forged the 1986 "Amicable Settlement."
On 7 September 1992 eight (8) of the original complainants withdrew from the complaint and
returned to work on the ground that their misunderstanding with management was already settled. Pedro
Barrientos Jr. was left as the sole complainant who amended the complaint on 30 March 1993 by
impleading Lumbia Agricultural and Development Corporation (LADCOR), the real owner of Hda. Dapdap
I, as co-respondent with its President Magdalena Fermin.
LADCOR denied that complainant was terminated on 27 January 1992; on the contrary, it alleged
that complainant voluntarily abandoned his work after 1 March 1992 to transfer to the adjacent farm of a
certain Mr. Ramos. In addition, LADCOR alleged that it had a personality separate and distinct from its
president, Magdalena Fermin, hence the latter could not be held personally liable for the alleged illegal
dismissal.
Labor Arbiter Merlin D. Deloria ruled in favor of complainant. LADCOR appealed to the National
Labor Relations Commission (NLRC). The NLRC affirmed the Labor Arbiter's decision in toto.
ISSUE:
 Whether the respondent abandoned his job and he was not illegally dismissed.
HELD:
No, the respondent did not abandoned his job, thus, he was illegally dismissed. The NLRC
correctly applied the consistent ruling in labor cases that a charge of abandonment is totally inconsistent
with the immediate filing of a complaint for illegal dismissal. It is indeed inconceivable that an employee
like herein respondent who has been working at Hda. Dapdap I since 1977 and cultivating a substantial

portion of a 6-hectare lot therein for himself would just abandon his work in 1992 for no apparent reason.
As quoted by the Court in Judric Canning Corporation v. Inciong, "To get a job is difficult; to run from it is
foolhardy.”

2011-0081
INTERNATIONAL RICE RESEARCH INSTITUTE VS NLRC

GR No: 97239
Date: May 12, 1993
Petitioner: INTERNATIONAL RICE RESEARCH INSTITUTE
Respondent: National Labor Relations Commission and Nestor B. Micosa
Ponente: Nocon, J.
FACTS:
In 1977, International Rice Research Institute (IRRI), an international organization, hired private
respondent Nestor B. Micosa as laborer, who thereby became bound by IRRI Employment Policy and
Regulations, the Miscellaneous Provisions of which states in a certain portion that: “An employer who has
been convicted of a (sic) criminal offense involving moral turpitude may be dismissed from the service.”
On September 15, 1987, Micosa was accused of the crime of homicide. During the pendency of
the criminal case, Micosa voluntarily applied for inclusion in IRRI's Special Separation Program. However,
on January 9, 1990, IRRI's Director General, Klaus L. Lampe expressed deep regret that he had to
disapprove Micosa's application for separation because of IRRI's desire to retain the skills and talents that
persons like him possess. Later on, he was found guilty of homicide but appreciating, however, in his
favor the presence of the mitigating circumstances of (a) incomplete self-defense and (b) voluntary
surrender, plus the total absence of any aggravating circumstance.
On February 8, 1990, IRRI's Director General personally wrote Micosa that his appointment as
laborer was confirmed, making him a regular core employee whose appointment was for an indefinite
period and who "may not be terminated except for justifiable causes as defined by the pertinent
provisions of the Philippine Labor Code.
However, sometime on March 1990, IRRI's Human Resource Development Head, J.K. Pascual
wrote Micosa urging him to resign from employment in view of his conviction in the case for homicide. On
April 1990, Micosa informed the latter that he refused to resign from his job but Pascual insisted that the
crome he committed involves moral turpitude which violates IRRI's Policy. Micosa explained to J.K.
Pascual that the slaying of Reynaldo Ortega on February 6, 1987 arose out of his act of defending himself
from unlawful aggression; that his conviction did not involve moral turpitude and that he opted not to
appeal his conviction so that he could avail of the benefits of probation, which the trial court granted to
him. Still, on May 21, 1990, J.K. Pascual issued a notice to Micosa that the latter's employment was to
terminate effective May 25, 1990. On May 29, 1990, Micosa filed a case for illegal dismissal.
On August 21, 1990, Labor Arbiter Numeriano D. Villena rendered judgment finding the
termination of Micosa illegal and ordering his reinstatement with full backwages from the date of his
dismissal up to actual reinstatement. On appeal, the National Labor Relations Commission affirmed the
appealed decision.
Issue:
 Whether a conviction of a crime involving moral turpitude is a ground for dismissal from
employment.

Held:
Conviction of a crime involving moral turpitude is not a ground for dismissal. Article 282 of the
Labor Code enumerates the just causes wherein an employer may terminate an employment. Verily,
conviction of a crime involving moral turpitude is not one of these justifiable causes.
In the case at bar, the commission of the crime of homicide was outside the perimeter of the IRRI
complex, having been committed in a restaurant after office hours and against a non-IRRI employee.
Thus, the conviction of Micosa for homicide was not work-related, his misdeed having no relation to his
position as laborer and was not directed or committed against IRRI or its authorized agent.
Besides, IRRI failed to show how the dismissal of Micosa would be in consideration of the safety
and welfare of its employees, its reputation and standing in the community and its special obligations to
its host country. It did not present evidence to show that Micosa possessed a tendency to kill without
provocation or that he posed a clear and present danger to the company and its personnel. On the
contrary, the records reveal that Micosa's service record is unblemished.
Also, Moral turpitude has been defined in Can v. Galing citing In Re Basa and Tak Ng v.
Republic as everything which is done contrary to justice, modesty, or good morals; an act of baseness,
vileness or depravity in the private and social duties which a man owes his fellowmen, or to society in
general, contrary to justice, honesty, modesty or good morals. Thus, the precipitate conclusion of IRRI
that conviction of the crime of homicide involves moral turpitude is unwarranted considering that the said
crime which resulted from an act of incomplete self-defense from an unlawful aggression by the victim
has not been so classified as involving moral turpitude.


2011-0081
JONERI ESCOBIN VS NATIONAL LABOR RELATIONS COMMISSION

GR No: 118159
Petitioner: Joneri Escobin, Rodolfo Rojas, Federico Laguyo, Gaspar Montejo, Rolando Caballes, Romeo
Belarmino, Eliseo Codilla, Eleuterio Benitez, Elpidio Casinillo, Fernando Ablong, Prudencio Sacristan,
Rodolfo Briones, Primitivo Calixto, Andres Fernando, Angel Avenido, Felix Guipitacio, Taracio Abilla,
Antonio Patino, Antonio Helen, Nerio Canoy, Vicente Francisco, Teofilo Tura, Antonio Ledesma,
Marcelino Hipolito, Benjamin Flores, Pablo Lascota, Wilfredo Cantay, Genaro Deliverio, Marciano
Pioquinto, Federick Jimenez, Vicente Sm Lim, Luis Tubil, Angel Sumayo, Salvador Salcedo, Rigoberto
Utod, Feliciano Salona, Geronimo Canete, Maximo Aquillon, Larry Turco, Sr., Porferio Garado, Perfecto
Cuevas, Feliciano, Juanillo, Roberto Tucay, Sr., And Nicolas Amones, Jr.
Respondent: National Labor Relations Commission, Peftok Integrated Services, Inc., Teodolfo E.
Santos, And/Or Up-Ndc Basilan Plantations, Inc.
FACTS:
The petitioners in this case are bona fide members of the Basilan Security Force Association
hired by PISI in Sta. Clara, Lamitan, Basilan, to work as guards in UP-NDC Basilan Plantations, Inc.
premises, for the purpose of guarding and protecting plantation property and installations from theft,
pilferage, robbery, trespass and other unlawful acts by strangers or third persons, and plantation
employees, pursuant to an agreement between PISI and UP-NDC Basilan Plantations, Inc. dated May 17,
1989. The complainants, residents of Sta. Clara, Lamitan, Basilan, are heads of families, hired by PISI as
security guards in and for plantation premises of UP-NDC Basilan Plantations, Inc. While, Respondent
PEFTOK Integrated Services, Inc., (PISI for short), is a duly licensed watchman and protective agency
while respondent UP-NDC Basilan Plantations, Inc. is a corporation duly organized in accordance with
law, and the owner/possessor of lands principally planted to rubber, coconut, citrus, coffee, and other fruit
trees in Lamitan, Province of Basilan. Respondent Teodolfo E. Santos is the general manager of PISI.
In 1988, some of the complainants, namely: Gene Engracia, Andres Fernandez, Rolando C.
Caballes, Larry Turco, Fernando E. Ablong, Sr. Constancio Silagan, Winifredo N. Obedencia, Federick
Laguyo, Primitivo Calixto, Felix C. Guipitacio and Claudio Calixto were dismissed by PISI for
insoburdination [sic] and grave misconduct, as a result of their refusal to ring the bell in the evening of
May 25, 1988 while on duty in the premises of the plantation, but were later reinstated in an agreement
forged between the parties at the initiative of Congressman Alvin Dans of Basilan Province.
On June 1, 1990, respondent UP-NDC Basilan Plantations, Inc. ordered the reduction of the
contracted guards assigned in the plantation from seventy (70) to sixty-seven (67), in a letter addressed
by Mr. Roman R. Yap to PISI. It was then repeated through a letter dated January 22, 1991 sent to Col.
Raymundo C. Sobrevega, President of PISI, by Hector A. Quesada, President of UP-NDC Basilan
Plantations, Inc., PISI was advised to reduce further the guards from sixty-seven (67) to only ten, (10).
Subsequently, thereafter, PISI issued Office Memorandum No. 4 dated February 6, 1991 placing
the fifty-nine (59) affected guards under reserved or floating status effective February 1, 1991, subject to
be posted or assigned upon notice.

On February 12, 1991, PISI issued Office Order No. 5 amending Office Order No. 4 by deleting
therefrom the names of S/G Calixto Florentino Paddit and Sergio Quimpo.
Subsequently, on April 8, 1991, the guards placed on reserved or floating status were instructed
by registered letter to report to PISI Head Office at Rm. 405, Sunrise Condominium, Ortigas Avenue,
Greenhills, San Juan, Metro Manila, for posting to PISI clients within the Metro-Manila area not later than
April 30, 1991.
That complainants did not reply nor answer the letter sent them, prompting PISI to reinstate by
way of another letter dated May 2, 1991, its order to complainants to report to PISI Head Office for
posting, and to explain their failure to report as previously instructed.
Still failing to receive a reply nor answer from the complainants despite receipt of said letters, PISI
once more sent individual letters to complainants on May 29, 1991 ordering them to explain why no
disciplinary action shall be taken against them for failing to comply with PISI's Order, at the same time,
reiterating its previous Order for complainants to report to PISI Head Office for posting.
Despite all these, complainants, for reasons known only to them, did not bother even sending a
courtesy reply nor answer to PISI. Neither did they comply with the reiterated Order to report to their Head
Office for posting. They did not also explain why they were unable to so comply with the Order.Thus, on
June 28, 1991, they were dismissed on ground of insubordination or willful disobedience to lawful orders
of their employer.
Late in the day however, on July 1, 1991, complainants wrote PISI General Manager, Teodolfo
Santos, saying they had no intention to abandon their employment, nor to defy fair, reasonable and lawful
orders. In the same letter, they acknowledged receipt of all PISI's letters to them dated April 8 and May 2,
1991.
After having been terminated, and during the arbitral proceedings below, complainants belatedly
justified their inability to comply with PISI's Order to report to Head Office in Metro-Manila for posting,
saying: they are residents of Basilan, have families of their own in Basilan, have never traveled beyond
Visayas and Mindanao, not provided by PISI with fare money as they cannot, on their own, finance their
travel from Basilan to Manila; that to comply with PISI's Order to report to Head Office for posting under
said circumstances was absurd, to say the least. Complainants therefore, charged PISI with bad faith in
issuing said Order.
Petitioners filed at the Regional Arbitration Branch No. 09 in Zamboanga City a Complaint.
against private respondents for illegal termination by way of constructive dismissal. After conciliation
proceedings failed to settle the matter, the parties were ordered to submit their respective position
papers. On February 17, 1992, Labor Arbiter Rhett Julius J. Plagata rendered a Decision in favor of
petitioners. On appeal, Respondent Commission reversed the labor arbiter holding that private
respondent had no choice but to place petitioners and other security guards on floating status for lack of
clients to which they could be immediately reassigned. The directive to report to Manila for posting was
issued, because private respondent knew that it could place petitioners on reserve status for only six
months. Petitioners' refusal to comply with said Order and their "wanton disregard of the order to explain
their inability to . comply and obey lawful orders from their employer" constituted the "proximate cause for
their dismissal."
In according due process to petitioners, private respondent gave them ample time to explain why
no disciplinary measures should be taken against them, but petitioners still refused to comply. Hence,
private respondent was justified in dismissing petitioners.

ISSUE:
 Whether the petitioners’ conduct amounted to clear insubordination and constituted willful
disobedience, thus, justifies the dismissal of the petitioners.
HELD:
It is true that petitioners failed to report to Manila and to respond to private respondent's letters,
this is not the end-all and be-all of the matter. It must be noted that the petitioners’ live in Basilan, the time
they were placed in a floating status means that they were not receiving their respective salaries. The
respondents knew very well about the situation. Insisting the petitioners to travel all the way to Manila will
cause them inconveniences since the employer will not shoulder any of their expenses.
One of the fundamental duties of an employee is to obey all reasonable rules, orders and
instructions of the employer. Disobedience, to be a just cause for termination, must be willful or
intentional, willfulness being characterized by a wrongful and perverse mental attitude rendering the
employee's act inconsistent with proper subordination. A willful or intentional disobedience of such rule,
order or instruction justifies dismissal only where such rule, order or instructions is (1) reasonable and
lawful, (2) sufficiently known to the employee, and (3) connected with the duties which the employee has
been engaged to discharge. The assailed Resolution of Respondent Commission and the arguments of
the solicitor general failed to prove these requisites.

2011-0081
LIM VS NLRC
GR No: 118434
Date: July 26, 1996
Petitioner: Sixta C. Lim
Respondent: National Labor Relations Commission and Pepsi-Cola Far East Trade Development Co.,
Inc.
Ponente: Davide, Jr., J.
FACTS:
PEPSI, a manufacturer of concentrates to be sold to Pepsi-Cola Bottlers Co., Inc., has a

workforce of only nineteen employees, the petitioner being one of them. PEPSI employed her on 15 June
1983, but she had been with the Pepsi Group since 1 January 1981 as a secretary for Pepsi Bottling Co.
(Phil.), Inc. At the time of her dismissal, she held the position of Staff Accountant. As such, she assisted
and worked closely with the Plant Accountant to carry out the accounting department's tasks necessary to
ensure an accurate, timely, and coordinated compilation of data for each accounting transaction.
As per company policy, PEPSI regularly evaluated its employees' performance. In the old
assessment criteria, the petitioner got a very high grade. But on the latest assessment standard it seems
to pull her assessment grade down. In response thereto, the petitioner wrote her superior, Mr. Wilbert
Young, asking for a reevaluation of her performance appraisal as: (a) she was the first to be evaluated
using the revised evaluation sheet; (b) the long unresolved discrepancies referred to were committed in
1989 while she was on maternity leave; (c) she did appreciate the importance of her reports, for which
reason she even worked Saturdays to accomplish them; and (d) the delays were caused by the delay of
the submission of data she needed to accomplish her reports. PEPSI conducted another appraisal 16 of
the petitioner's performance for the period from 1 January 1990 to 31 December 1990. The petitioner
received an overall rating of Below Target (BT).
Unsatisfied, the petitioner wrote a letter on 4 March 1991 to Mr. Yasuyuki Mihara of PepsiCo,
Inc., Japan. She pointed out that Mr. Young issued a memorandum asking the Plant Manger, Mr.
Marianito Lucero, about her case without furnishing her a copy thereof, and that Messrs. Young and
Lucero never discussed the matter with her. In response, Mr. Mihara sent her a telegram dated 22 March
1991 informing her that he understood her point and would discuss the matter with her superiors on his
visit to the Philippines after his return from New York. PEPSI, however, did not wait for Mr. Mihara's visit.
It asked the petitioner to voluntarily resign and offered to pay her termination benefits, but she refused. On
6 May 1991, the petitioner was verbally informed of her termination as an employee of PEPSI. On 15 May
1991, the petitioner received a Termination Letter from PEPSI's Marianito Lucero advising her of PEPSI's
decision to terminate her services for "gross inefficiency effective 31 May 1991.
ISSUES:
 Whether there is a just cause for her dismissal.
 Whether the respondent was not accorded with due process when the petitioner terminated her.

HELD:
The grade given to her cannot be a ground for dismissal and she was not accorded with due
process. Prior to the issuance of the Termination Letter on 15 May 1991, PEPSI never called the
petitioner's attention to any alleged "gross inefficiency" on her part. Likewise, she was never warned of
possible disciplinary action due to any alleged "gross inefficiency." The evaluation report merely indicated
her areas for improvement. Moreover, in PEPSI's brochure entitled "Managing Performance For the
34
90's," a BT rating does not merit dismissal from the service; as a matter of fact, the lower rating —
Significantly Below Target (SB) — is not even a ground for termination of employment, but may only
justify putting the employee "on probation and [telling him] that improvement is necessity."
Also, PEPSI violated the petitioner's right to due process — the heart of the employee's right to
security of tenure which is guaranteed in full by no less than the Constitution.his right is implemented by
the requirements of twin notice and hearing prescribed in Article 277 of the Labor Code, as amended, and
in Sections 2 to 7, Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code. The first notice
apprises the employee of the particular acts or omissions for which his dismissal is sought, which may be
loosely considered as the proper charge; while the second informs the employee of the employer's
decision to dismiss him. The latter must come only after the employee is given a reasonable period from
receipt of the first notice within which to answer the charge, and ample opportunity to be heard and
defend himself with the assistance of his representative, if he so desires. Non-compliance therewith is
fatal as these requirements are conditions sine qua non before dismissal may be validly effected.


2011-0081
OANIA VS NLRC
GR No: 97162-64
Date: June 1, 1995
Petitioner: Alfredo L. Oania, Aurelio S. Caluza and Santiago B. Biay
Respondent: National Labor Relations Commission and PHILEX Mining Corporation
Ponente: Romero, J.
FACTS:
Petitioners Alfredo L. Oania, a welder, and Aurelio B. Caluza and Santiago B. Biay, miners, were
employed by respondent Philex Mining Corporation in Pacdal, Tuba, Benguet. They were accused of
mauling their co-worker, Felipe P. Malong, at the gasoline area within the company compound at about
9:00 o'clock in the evening of May 21, 1986. Malong's injuries almost proved fatal were it not for the
immediate medical attendance given him, both at the company clinic and at the Dr. Efraim Montemayor
Medical Center in Baguio City.
Private respondent conducted an investigation regarding the incident and arrived at the decision
to terminate their employment on the ground that petitioners violated Article I, paragraph 1 of the
company rules and regulations which states: “Inflicting or attempting to inflict bodily injury on the job-site
on company time or property for any reason, or attempting to inflict or inflicting bodily injury anywhere at
anytime, in any dispute involving one's employment.”
On October 11, 1986, copies of the decision were served upon petitioners but they refused to
receive them.
Thereupon, Malong instituted a criminal complaint against petitioners before the provincial fiscal
of Benguet. In due time, petitioners were charged with frustrated homicide before the Regional Trial Court
of Baguio City in Criminal Case No. 3681-R but later, Malong desisted from pursuing the criminal case.
Armed with Malong's affidavit of desistance, petitioners sought reconsideration of their dismissal
from employment, alleging that when the incident occurred, they were asleep. Because private
respondent refused to take them back, petitioners filed separate complaints for illegal dismissal before the
labor arbiter in Baguio City.
On August 31, 1988, Labor Arbiter Amado T. Adquilen rendered a decision holding that
petitioners had been illegally dismissed from employment and directing private respondent to reinstate
them to their former positions or substantially equivalent positions and to pay each of them one year's
backwages. Private respondent appealed to the National Labor Relations Commission (NLRC). On
3
October 31, 1989, the NLRC rendered a decision finding that "there is prima facie evidence that the
complainants injured physically a co-employee under circumstance(s) which constitute an infraction of
specific company rules; and that the respondent had valid cause to terminate their employment."
ISSUE:
 Whether alleged mauling a fellow employee within the company's premises constitutes a ground
for dismissal as it violates the company's rule.

HELD:
The decision of the NLRC is hereby REVERSED and SET ASIDE. Private respondent is hereby
ordered to REINSTATE petitioners to their respective former positions or substantially equivalent
positions without loss of seniority rights and with backwages equivalent to three years computed from the
time of their dismissal.
Violation of a company rule prohibiting the infliction of harm or physical injury against any person
under the particular circumstances provided for in the same rule may be deemed analogous to "serious
misconduct" stated in Art. 282 (a) above. To repeat, however, there is no substantial evidence definitely
pointing to petitioners as the perpetrators of the mauling of Malong.


2011-0081
OSS SECURITY & ALLIED SERVICES, INC., VS NLRC

GR No: 112752
Petitioner: OSS Security & Allied Services, Inc., Juan Miguel M. Vasquez and Ma. Victoria M. Vasquez
Respondent: National Labor Relations Commission and Eden Legaspi
Ponente: de Leon, Jr., J.
FACTS:
Private respondent worked as a lady security guard of OSS Security Agency from June 16, 1986.
On January 17, 1986 petitioner of acquired the assets and properties of OSS Security Agency and
absorbed some of its personnel, including private respondent. As a lady security guard she was assigned
to render security services to the different clients of petitioner.She was last assigned at the Vicente
Madrigal Condominium II located in Ayala Avenue, Makati.
In a memorandum dated July 30, 1991 addressed to petitioner's company President, retired
General Honesta Isleta, the Building Administrator of VM Condominium II, Licerio E. Baguyong,
complained of the laxity of the guards in enforcing security measures and requested for the
reorganization of the men and women assigned to the building to instill more discipline and proper
decorum by changing, if need be, some of the personnel, replacing, if possible, on a temporary basis, the
women complement, to find out if it would improve the service.
In compliance, petitioner issued an order on August 1, 1991 relieving private respondent and
another lady security guard, Digna Suelan, of their assignment at VM Condominium II effective August 2,
1991 for reassignment to other units or detachments where vacancy exists. On August 3, 1991, petitioner
issued an order which detailed private respondent to the Minami International Corporation in Taytay, Rizal
from August 3 to September 2, 1991 to replace lady security guard Susan Tan who filed her vacation
leave for August 1991. However, it appears that private respondent did not report for duty at her new
assignment.
On August 6, 1991 private respondent filed her complaint for under payment and constructive
dismissal. On February 25, 1993, Labor Arbiter Oswald B. Lorenzo rendered his decision upholding
private respondent's position and declared that private respondent's transfer was not sanctioned by law,
hence illegal and tantamount to unjust dismissal. Private respondent then appealed the decision to the
NLRC but it only affirmed the decision of the Labor Arbiter.
ISSUE:
 Whether the transfer of assignment of private respondent Eden Legaspi as effected by petitioner
OSS Security & Allied Services, Inc. was illegal tantamount to unjust dismissal.

HELD:
No, the transfer of assignment of private respondent Eden Legaspi as effected by petitioner OSS
Security & Allied Services, Inc. was not illegal. Service-oriented enterprises, such as petitioner's business
of providing security services, generally adhere to the business adage that "the customer or client is
always right". To satisfy the interests, conform to the needs, and cater to the whims and wishes of its
clients, along with its zeal to gain substantial returns on its investments, employers adopt means
designed towards these ends. These are called management prerogatives in which the free will of
management to conduct its own affairs to achieve its purpose, takes from. Accordingly, an employer can
regulate, generally without restraint, according to its own discretion and judgment, every aspect of
business.
In the employment of personnel, the employer can prescribe the hiring, work assignments,
working methods, time, place and manner of work, tools to be used, processes to be followed,
supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers
and the discipline, dismissal and recall of work, subject only to limitations imposed by laws.
Thus, the transfer of an employee ordinarily lies within the ambit of management prerogatives.
However, a transfer amounts to constructive dismissal when the transfer is unreasonable, inconvenient,
or prejudicial to the employee, and it involves a demotion in rank or diminution of salaries, benefits and
other privileges. In the case at bench, nowhere in the record does it show that that the transfer of private
respondent was anything but done in good faith, without grave abuse of discretion, and in the best
interest of the business enterprise.


2011-0081
PREMIERE DEVELOPMENT BANK VS NLRC

GR No: 114695
Date: July 23, 1998
Petitioner: Premiere Development Bank, Procopio C. Reyes, Pacita M. Araos and Renato Dionisio
Respondent: National Labor Relations Commission and Teodora Labanda
Ponente: Martinez., J.
FACTS:
On August 8, 1985, Ramon T. Ocampo, a depositor of petitioner bank, issued a check in the
amount of P6,792.66 in favor of and for deposit to the account of Country Banker's Insurance Corporation
(CBISCO), also a depositor of petitioner bank. On the same day, after the check and the deposit slip were
presented to respondent Teodora Labanda, who was employed as teller at petitioner's Taytay Branch,
they were turned over to the Branch cashier for verification of the fund balance and signature of the
drawer. There was a confirmation of the check and the same was accepted by Labanda for deposit to the
current account of CBISCO.
The check was posted by Manuel S. Torio, the Taytay Branch bookkeeper. But instead of posting
it to CSISCO's account, the same was posted to the account of Ocampo treating it as "On-Us Check,"
that is, drawn against the Taytay Branch where the check was deposited.
On January 13, 1986, the wife of Ocampo, together with the auditor from CBISCO, went to
petitioner bank and complained to petitioner Dr. Procopio C. Reyes that her husband was being held
accountable for the amount. It was only then that petitioner bank discovered the misposting of the check
issued by Ocampo, resulting in the overstatement of his outstanding daily balance by P6,792.66. The
overstatement remained undetected until Ocampo withdrew the money from the bank.
Due to this incident, petitioner Pacita M. Araos sent a demand letter to private respondent
requesting her to explain in writing the misposting and erroneous crediting of the subject check in issue
as well as the circumstances surrounding the incident within three (3) days from receipt thereof, and in
case she fails to do so, necessary action shall be taken against her.
Petitioner Renato G. Dionisio, upon instructions of petitioner Reyes, sent the internal auditors of
the bank to investigate and make a detailed report about the incident. On January 22, 1986, the auditors
came out with a report finding private respondent Labanda and bookkeeper Torio primarily liable for the
incident, for the following reasons: a) Firstly, there was no end-of-the-day independent balancing of cash
and checks between Labanda and Torio, thus the former failed to notice the over-stated cash and
understated check reflected in the latter's blotter posting tape ;b) Manuel Torio did not affix his initial on
Labanda's blotter to indicate the balancing between them.
These findings prompted petitioner Dionisio to send a letter to private respondent Labanda
requiring her to shoulder 20% of the amount lost via salary deduction. Private respondent replied,
objecting to such move, reasoning out that she is the breadwinner in the family. She further asked the
bank to furnish her a copy of the audit report and requested for a full-dress investigation. For this reason,
petitioners held in abeyance the salary deductions.

On March 13, 1986, respondent Labanda was placed under preventive suspension pending
investigation of the incident. She was requested to report on April 4, 1986 so that she can present her
side of the story. Labanda then wrote a letter to petitioner Reyes requesting information on the duration of
her suspension and at the same time asking for an expeditious investigation. In response thereto, she
was informed that the period of her suspension shall last until the investigation is completed and a
decision is made thereon.
On the date of said inquiry, Labanda executed a statement.However, she manifested before Atty.
Revelo during the inquiry that she will not sign any of the preliminary statements she made unless the
same is with the consent and advice of her husband. She also told the inquiring officer that she could not
inform petitioners of the dates when she would be available for investigation.
On April 8, 1986, another letter was sent to respondent Labanda by petitioner Reyes informing
the former that her refusal to sign or authenticate preliminary statements given on April 4, 1986 was a
clear indication of her unwillingness to cooperate or an effort to hide something or suppress the truth.
The dates of the hearing were rescheduled by petitioners several times. The first rescheduled
hearing was on April 14, 1986 where private respondent sent her lawyer bringing with him a letter asking
that she be given time to confer with her counsel for which she was given until April 23. Notices were sent
to inform her of the rescheduled dates with warning that failure to attend the same shall be taken as a
tacit admission of her liability and the case shall be resolved based on the evidence available. In the
meantime, Bookkeeper Torio admitted liability and was allowed to resign.
On April 7, 1986, petitioners received a letter from private respondent through her counsel
demanding payment of actual damages in the amount of P50,000.00 for their alleged arbitrary, illegal and
oppressive acts. 12Petitioners did not heed the demand.
On May 23, 1986, private respondent filed a complaint for damages before the court. Petitioners'
subsequent motion to dismiss was denied. When their motion for reconsideration was likewise denied,
petitioners filed a petition for certiorari with the Court of Appeals, which however dismissed the case
without prejudice to the refiling of the complaint with the labor arbiter. The decision became final and
executory on July 30, 1987.
On April 4, 1988, respondent Labanda filed an illegal dismissal case. After trial, the Labor Arbiter
dismissed the labor case ruling that by filing of the complaint with the Regional Trial Court, the
respondent on her own, terminated her employment with the Bank. She was not dismissed by her
employer. However, the NLRC reversed the decision of the Labor Arbiter ruling that private respondent's
indefinite preventive suspension amounted to constructive dismissal, thus, illegal and unjust.
ISSUE:
Whether or not the filing of a complaint for damages by respondent Labanda against the petitioners
amounts to abandonment.
HELD:
Private respondent's preventive suspension is without valid cause since she was outrightly
suspended by petitioner. As of the date of her preventive suspension on March 13, 1986 until the date
when the last investigation was rescheduled on April 23, 1986, more than 30 days had expired. The
NLRC correctly observed that the preventive suspension beyond the maximum period amounted to
constructive dismissal.

The High Court agrees with the NLRC and the Solicitor General that respondent Labanda did not
abandon her job. To constitute abandonment, two elements must concur: (1) the failure to report for work
or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee
relationship, with the second element as the more determinative factor and being manifested by some
overt acts. An employee who merely took steps to protest her indefinite suspension and to subsequently
file an action for damages, cannot be said to have abandoned her work nor is it indicative of an intention
to sever the employer-employee relationship. Her failure to report for work was due to her indefinite
suspension. Petitioner's allegation of abandonment is further belied by the fact that private respondent
filed a complaint for illegal dismissal. Abandonment of work is inconsistent with the filing of said
complaint.
On procedural considerations, respondent NLRC held that there was a violation by petitioner
bank of the due process requirements under the Labor Code when it held that we also have not seen any
effort of notifying complainant about her interest in her job by sending letters at her home address. The
twin requirements of notice and hearing constitute the essential elements of due process which are set
out in Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code.
Granting arguendo that there was abandonment in this case, it nonetheless cannot be denied that
notice still has to be served upon the employee sought to be dismissed.
Moreover, the observation of the Solicitor General must be noted that to the records of this case
will show that private respondent Labanda never intended to abandon her job. First, after her indefinite
suspension, she requested that the "full-dressed" investigation be done at the quickest time possible, and
appealed to petitioner Reyes to consider that she was the breadwinner in the family. Second, she actively
fought for her right to security of tenure by filing first with the Regional Trial Court an action for damages,
and later with the Labor Arbiter a complaint for illegal dismissal. Also, private respondent Labanda's
inability to report for work was not voluntary but was rather the result of her indefinite suspension, which
in reality was a constructive dismissal.
The foregoing considerations indubitably show that private respondent Labanda did not abandon
her job but was illegally dismissed from employment without due process of law.


2011-0081
SULPICIO LINES, INC., VS QUINCIANO GULDE

GR No: 149930
Petitioner: Sulpicio Lines, Inc.
Respondent: Quinciano Gulde
Ponente: Kapunan, J.:
FACTS:
Petitioner Quinciano Gulde and one Martin Manatad were employed as truck driver and truck helper
of private respondent Sulpicio Lines, Inc. (SLI), respectively. Petitioner Gulde has been in the employ of
SLI for thirteen (13) years until his termination from the company on October 9, 1996.
Sometime on September 1996, when, Gulde and Manapat picked up private respondent SLI’s
cargoes from Nasipit Port delivery to its warehouse in Butuan City. It appears that two (2) persons by the
name of Doming and Etat boarded their truck while they were in Nasipit. Manapat knew of the same since
he was riding at the back of the truck.
In his affidavit, Manatad related that while they were on their way to Butuan, Domeng and Etat
slashed open the cargo where the basketballs were loaded. The two (2) were able to cart away four (4)
basketballs when they are alighted from the truck at the time petitioner Gulde stopped at the house of one
Benedicto Cagampang, a checker of SLI at Calao Street, near the Agusan Institute of Technology (AIT),
to give to him his medicines. Manapat added that he did not do anything to stop Domeng and Etat for fear
for his life because they have weapons.
Manapat further stated that petitioner Gulde was not aware that the two (2) persons boarded their
truck. Petitioner Gulde only knew of the same when Manapat told him that Domeng and Etat stole four (4)
basketballs. Manapat likewise added that they no longer reported the incident to SLI because one Boy
Oco, who has a cargo in their truck and was following them, saw the incident that when Gulde stopped at
Calao Street, Oco proceeded to the SLI’s warehouse and reported the incident to the warehouseman.
Thereafter, SLI reported the incident to the police and petitioner Gulde and Manapat were
investigated. On October 1, 1996, they were further investigated by the SLI’s officers and on October 9,
1996, they were dismissed for having been found guilty of connivance with the two pilferers.
The Labor Arbiter ruled in favor of petitioner finding that respondent’s dismissal from employment
was valid. On appeal, the NLRC initially reversed the decision of the Labor Arbiter. In its decision of April
30, 1998, the NLRC declared that respondent was illegally dismissed and ordered petitioner to reinstate
him.
However, when petitioner filed a motion for reconsideration, the NLRC reversed itself as it held that
respondent's dismissal was valid for loss of trust and confidence.
ISSUE:
 Whether there was loss of trust and confidence in the case which constitute a just cause for the
termination of the employment.
HELD:
The case at bar does not constitute loss of trust and confidence to the employee. The basic requisite

for dismissal on the ground of loss of trust and confidence is that the employee concerned must be one
holding a position of trust and confidence. Loss of confidence as a just cause for termination of
employment is premised on the fact that the employee concerned holds a position of responsibility or trust
and confidence. He must be invested with confidence on delicate matters, such as custody handling or
care and protection of the property and assets of the employer. And, in order to constitute a just cause for
dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to
continue to work for the employer.
In this case, contrary to the allegations of petitioner, there is no sufficient evidence to show that
respondent conspired with the thieves in stealing four (4) pieces of basketball from petitioner’s truck.

2011-0081
VITARICH CORPORATION VS NLRC

GR No: 121905
Date: May 20, 1999
Petitioner: Vitarich Corporation, Danilo Sarmiento and Onofre Sebastian
Respondent: National Labor Relations Commission and Isagani E. Recodo Ponente: Bellosillo, J.
FACTS:
Private respondent Isagani E. Recodo was hired by VITARICH, a feeds manufacturing

corporation, as an Accounting Clerk in its office in Marilao, Bulacan. In 1979, he was promoted as
Accounting Supervisor, then in 1986 as Sales Superintendent while assigned in Davao City. In 1988 he
became the Sales Manager for Western Visayas based in Iloilo City with a monthly salary of
P18,200.00. 2
As Sales Manager Recodo was supervised successively by three (3) division heads who were his
immediate supervisors, namely, Dave Fernandez (1988-1989), Ben Cruz (1990-1992), and Onofre
Sebastian (15 June 1992 up to Recodo's termination). 3 He also underwent several audit examinations in
his line of work.
In March 1991 VITARICH conducted an audit in Iloilo in response to a letter of a certain Espinosa
pointing to anomalies in the backloading and arras transactions of Recodo. The evaluation of the audit
team found no concrete evidence that Recodo was receiving direct commission from the backloading of
the chartered vessel but faulted him for his inadequate exercise of internal control regarding the matter,
and no evidence either that Recodo had been receiving a share in the arrastre since the shipper and the
arrastre operators managed by the Espinosa family denied this. However, an unaccounted difference of
P14,002.50 in the backloading profits surfaced.
On 25 June 1992 another audit report was submitted detailing the accommodation of Mr. Elbert
Jeanjacquet as a trade client whose account was 74% past due and unsecured yet was allowed as a
contract grower for two thousand (2,000) chicken heads. The accounts of twelve (12) other customers
granted extensions over and beyond the credit limit were further enumerated in the report. Except for two,
all these accounts did not have any collaterals to secure them.
On 6 June 1992 a cash audit generated these findings: (a) cash collections were diverted to
defray the area's operational and administrative expenses as the revolving fund was consumed before its
replenishment in the form of countersigned checks from Cebu came; (b) personal "vales" (cash
advances) were disbursed from the revolving fund in violation of company policies; and, (c) payments to
suppliers were taken from the revolving fund instead of being paid in checks. But, unlike in the first two
audit examinations where no action was taken by VITARICH after receipt of the corresponding reports,
Recodo this time was required to explain why he allowed the reported violations of company policies.
In his letter of 11 August 1992 Recodo clarified that the alleged personal "vales" were actually for
business expenses and for wages of employees and that the use of collections to dafay operational and
administrative expenses was unavoidable particularly when the chartered vessel was on dock unloading
feeds while the replenishment of the revolving fund was delayed. He further assured VITARICH that all
transactions with stevedores, shipping lines, PAL and piece workers were all on C.O.D. basis.

Admittedly, when petitioner Onofre Sebastian took over in June 1992 as Division head he was
faced with a high volume of account receivables (A/R) accumulated during the time of Ben Cruz, his
predecessor. To address the problem petitioner Sebastian and respondent Recodo conferred in the
middle of July 1992 with the latter being instructed to cut down the accountabilities of Rex Cordova, a
company salesman in Iloilo. Thereafter Recodo advised Cordova to reduce his technical credit
extensions. In less than a month, the amount of account receivables was reduced from P800,000.00 to
P205,000.00. However on 27 August 1992 Recodo was asked again to explain within forty-eight (48)
hours why he should not be terminated for failure to ground Rex Cordova in accordance with the 4 August
1992 memorandum of vice president Onofre Sebastian.
The other grounds cited for terminating Recodo were his failure to reduce Cordova's A/R driver,
the allowance of extension of his credit line, as well as the misrepresentation of his outstanding
11
A/R. The memorandum of 4 August 1992 instructed Recodo to confirm all A/R drivers who were
already two (2) weeks overdue to preclude any ghost deliveries and to ground all salesmen with A/R
drivers who were already thirty (30) days old so that they could only resume deliveries after accounts
were collected or payment arrangements were made.
In his 5 September 1992 letter Recodo explained that only the first paragraph of the faxed
memorandum was readable so he had it verified. He only learned its full context when he was negotiating
for the security of Cordova's past accounts. Thus, he postponed grounding Cordova until 20 August 1992
in order to bring about positive results. The negotiation reduced Cordova's A/R driver from P800,000.00
to P250,000.00 as of 19 August 1992 which amount would be further lowered to P150,000.00 by
September. The alleged misrepresentation in the figures given was not deliberate but was merely a
mental lapse due to tension at work.
After investigation, E.T. Enriquez, Head of Personnel, submitted his report on Recodo's alleged
insubordination. Enriquez found that there was "no defensible ground for terminating (Recodo's)
services." Nevertheless, VITARICH terminated Recodo on 15 October 1992 for violation of the 4 August
1992 Memorandum including policies on credit extensions and cash advances.
On 13 October 1992, Recodo filed a complaint for illegal dismissal, non-payment of managerial incentive
bonus and for moral and exemplary damages. Initially the complaint was directed against VITARICH and
its president Danilo Sarmiento, but on 21 January 1993 vice president Onofre Sebastian was also
included as respondent.
On 23 June 1993 the Labor Arbiter adjudged VITARICH and its impleaded officers guilty of illegal
dismissal and ordered them to pay Recodo seven (7) months back wages from November 1992 to May
1993 in the total amount of P418,600.00 plus 10% attorney's fees of P41,860.00. A separation pay of
P291,200.00 was granted Recodo because reinstatement was no longer feasible in view of the strained
relations between the parties. Moral and exemplary damages were not awarded since there was no
finding of a valid reason to do so. For one to be entitled to theses damages, the manner in which the
dismissal was made must be deliberate, malicious and tainted with bad faith. In this case the Labor
Arbiter found no proof that petitioners acted in bad faith when they dismissed Recodo from employment.
The claim for management incentive bonus was likewise denied as the grant of a bonus is a management
prerogative.
The Labor Arbiter pointed out that although VITARICH justified the dismissal of Recodo by the
audit reports on backloading, unauthorized credit extensions and cash disbursements and
insubordination the company's dismissal letter was only anchored on insubordination without any mention
of the past audits as bases thereof. Consequently, for want of prior notice, the Labor Arbiter ruled that

lack of due process attended Recodo's termination. Nonetheless, the evidence of VITARICH relative to
the charges of backloading and unauthorized transactions was examined.
Thus, the Labor Arbiter reached the following conclusions: Firstly, there was no concrete
evidence to support the claim that Recodo was receiving commissions or profited through hidden deals in
the backloading transactions; nor did the company suffer any material loss as it even profited
substantially therefrom. The Labor Arbiter noted that the transactions were undertaken upon the
instructions of Recodo's supervisor, Dave Fernandez, hence, officially authorized by the company.
Secondly, credit extension limits, unsecured accounts and disbursements of cash collection for
operational and administrative expenses were already part of the system when petitioner Onofre
Sebastian took the helm as division head and instructed Recodo to solve the problems. Lastly, the Labor
Arbiter significantly found that Recodo's explanation to the charges imputed to him by VITARICH was
sincere and reasonable and that any breaches in company policies he might have committed were only
ordinary, not willful to warrant his dismissal.
On appeal by VITARICH, the NLRC while finding a lack of due process in Recodo's dismissal
reversed the Labor Arbiter's decision on the following rationale: (a) had the backloading transactions been
properly handled by Recodo the profits would have been greater, hence, VITARICH suffered losses by
such mismanagement; (b) although the backloading transactions were authorized by the division head,
the proper handling thereof was the duty of Recodo and his failure to do so was enough basis for the
company's loss of confidence in him; (c) violations of company policies were not mere carelessness since
they were due to mismanagement by Recodo; (d) the non-grounding of salesman Cordova might have
had a sincere and reasonable explanation but the very act of defying management's specific directives
constituted a strong ground for its loss of trust and confidence; and, (e) Recodo's failure to require
security for accounts and his allowing them to exceed the limit were contrary to accepted business
practices and company policies. All told then, the series of infractions committed by Recodo were enough
bases for his termination.
Thus, in its 19 September 1994 decision, the NLRC set aside the judgment of the Labor Arbiter
but awarded Recodo a P2,000.00 indemnity fee because he was terminated without due process.
Upon motion for reconsideration by Recodo, the NLRC issued its assailed resolution of 18 July
1995 reversing its earlier decision. It acknowledged that its previous decision was flawed by surmises on
the backloading transactions, conjectures on the credit line extensions and speculations on the grounding
of Cordova. The resolution applied the time-honored doctrine that the Labor Arbiter, as a trier of facts,
had the superior oppotunity to test the credibility of witnesses and the veracity of the documentary
evidence submitted. It further upheld the findings and recommendations of the audit teams that failed to
find the accusation that Recodo violated a number of company policies.
On 14 August 1995 the NLRC denied a motion for reconsideration by VITARICH.
ISSUE:
 Whether VITARICH illegally dismissed Recodo.
HELD:
The very inaction by VITARICH on every audit belies its posture that it had lost its trust and
confidence in Recodo as a consequence of the audit results. That it did not even notify Recodo of any
charge against him after each audit nor that it asked for any explanation from him therefor, only proves

that the imputations of alleged company violations were nothing more than mere garnishings to the more
relevant charge of insubordination. The records do not even show that VITARICH deemed it necessary to
penalize Recodo, not even only to warn him of any infraction. In fact, except for the alleged
insubordination, it did not include any other charge against him in the termination notice.
Quite obviously, since the alleged insubordination could not stand on its own merit, VITARICH
had to prop it up with charges that had already been forgotten, set aside and deemed inconsequential.
Being a mere afterthought to justify its earlier action of terminating Recodo, the allegations of policy
violations do not constitute just causes of dismissal on account of the lack of confidence contemplated
in Midas Touch Food Corporation v. NLRC under which the guidelines for the application of the doctrine
of loss of confidence are: (a) loss of confidence which should not be simulated; (b) it should not be used
as a subterfuge for causes which are improper, illegal or unjustified; (c) it should not be arbitrarily
asserted in the face of overwhelming evidence to the contrary; and, (d) it must be genuine, not a mere
afterthought to justify earlier action taken in bad faith.
Of the charge of insubordination, there is concrete evidence on record that Recodo was
instructed by his superior to ground all all salesmen with due accounts; that Recodo delayed
implementing the order and eventually grounded Cordova only after being made to explain his previous
inaction. Apparently, there was a lawful, reasonable order to Recodo to support his actuations.
While it may be true that there was a delay by Recodo in the implementation of his superior's
order as regards Cordova's accounts, the question now to be resolved is whether the delay constitutes
disobedience. The High Court already ruled in this matter in the past jurisprudences, to wit “. . . willful
disobedience of the employer's lawful orders, as a just cause for dismissal of an employee, envisages the
concurrence of at least two (2) requisites: the employees assailed conduct must be willful or intentional,
the willfulness being characterized by a wrongful and perverse attitude; and the order violated must have
been reasonable, lawful, made known to the employee and must pertain to the duties which he had been
engaged to discharge.”

Cyruz P. Tuppal
2011-0134
Case Title: Batonhbacal Vs Associated Bank

G.R. No.: 72977
Petitioner: Bienvenido R. Batongbacal
Respondent: Associated Bank And National Labor Relations Commission
Ponente: Fernan, C.J
Facts:
Petitioner Bienvenido Batongbacal started his banking career as a manager of the Second Rizal
Development Bank. He then transferred to Citizens Bank and Trust Company and was appointed as
assistant vice-president and concurrently, as acting manager of the personnel department. Subsequently,
Citizens Bank merged with Association Banking Corporation and later became known as Associated
Bank. In the new bank, petitioner resumed his position as assistant vice president. Years later, he found
out that his salary was very much below the standard remuneration of the bank’s other assistant vice
presidents. He asked for the board to give him the accrued salary withheld from him but to no avail.
Thereafter, as part of its streamlining measures, the management required all bank officers to submit their
courtesy resignations. Petitioner did not submit his courtesy resignation. As a result, he received a letter
from the Bank informing him that his resignation was accepted. Petitioner made repeated demands for
the reconsideration of the bank’s decision to terminate his employment. He then filed a complaint for
illegal dismissal and damages in the arbitration branch of the National Labor Relations Commission. The
NLRC ordered petitioner’s reinstatement with full back wages. Its motion for reconsideration having been
denied, the bank appealed to the NLRC which ruled in favour of the legality of petitioner’s dismissal.
Issue:
WON respondent bank legally dismissed petitioner for refusing to tender his courtesy resignation.
Held:
No. Petitioner’s dismissal was effected through a letter “accepting” his resignation, even if
petitioner did not actually submit such letter. It is clear from private respondent’s pleadings that it
terminated petitioner for insubordination in view of his failure to comply with the order to submit his letter
of courtesy resignation. However, the Court held that insubordination may not be imputed to one who
refused to allow an unlawful order. Moreover, the Court held that the record fails to show any valid
reasons for terminating the employment of petitioner.

Cyruz P. Tuppal
2011-0134
Case Title: Manila Electric Company vs NLRC

G.R. No.: 78763
Petitioner: Manila Electric Company
Respondent: National Labor Relations Commission & Apolinario Signo
Ponente: Hermosisima, Jr., J.
Facts:
Signowas employed in Meralco as supervisor-leadman since Jan 1963.In 1981, hesupervised the
installation of electricity in de Lara’s house in Antipolo. DeLara’s house was not yet within the required 30-
meter distance from the Meralco facility hence he is not yet within the service scope of Meralco. As a
work around, Signo had it be declared that a certain sarisari store nearer the facility be declared as de
Lara’s so as to facilitate the installation. Evertything would have been smooth thereafter but due to fault of
the PowerSales Division of Meralco, de Lara was not billed for a year. Investigation was conducted and
Meralco found out the irregularity in Signo’s work on de Lara’selectricity installation. Signo was dismissed
on May 18, 1983. Signo filed a case for illegal dismissal and for backwages. The Lanor Arbiter ruled that
though there is a breach of trust in the actuations of Signo dismissal is aharsh penalty as Signo has been
employed for more than 20 years by Meralco andhas been commended twice before for honesty. The
NLRC affirmed the Labor Arbiter. Meralco appealed.
Issue:
WON there has beendue process in the dismissal of Signo.
Held:
The SC sustained the decision of the NLRC. Well-established is the principle that findings of
administrative agencies which have acquired expertise because their jurisdiction is confined to specific
matters are generally accorded not only respect but even finality. Judicial review by this Court on labor
cases does not go so far as to evaluate the sufficiency of the evidence upon which the proper labor officer
or office based his or its determination but is limited to issues of jurisdiction or grave abuse of discretion.
Notwithstanding the existence of a valid cause for dismissal, such as breach of trust by an employee,
nevertheless, dismissal should not be imposed, as it is too severe a penalty if the latter has been
employed for a considerable length of time in the service of his employer. Reinstatement of respondent
Signo is proper in the instant case, but without the award of back wages, considering the good faith of the
employer in dismissing the respondent.

Cyruz P. Tuppal
2011-0134
Case Title: BRENT SCHOOL vs. ZAMORA

G.R. No.: G.R. No. L-48494
Petitioner: Brent School vs.
Respondent: Zamora
Ponente: Narvasa, J
Facts:
Doroteo R. Alegre was engaged as athletic director by Brent School, Inc. The contract was fixed
for five (5) years, i.e., from July 18, 1971, the date of execution of the agreement, to July 17, 1976. Three
months before the expiration of the stipulated period, or more precisely on April 20,1976, Alegre was
given a copy of the report filed by Brent School 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." Alegre protested and argued that although his contract did stipulate that the same
would terminate on July 17, 1976, since his services were necessary and desirable in the usual business
of his employer, and his employment had lasted for five years, he had acquired the status of a regular
employee and could not be removed except for valid cause. 6 The Regional Director considered Brent
School's report as anapplication 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. Brent School filed a motion for reconsideration but was denied.
The School is now before this Court in a last attempt at vindication. That it will get here.
Issue:
WON the provisions of the Labor Code, as amended, have anathematized "fixed period
employment" or employment for a term.
Held:
On one hand, there is the gradual and progressive elimination of references to term or fixed-
period employment in the Labor Code, and the specific statement of the rule that 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 employed is seasonal in nature and the employment is for
the duration of the season. An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: provided, that, any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee with respect to the
activity in which he is employed and his employment shall continue while such actually exists. On the
other hand, the Civil Code, which has always recognized, and continues to recognize, the validity and
propriety of contracts and obligations with a fixed or definite period, and imposes no restraints on the
freedom of the parties to fix the duration of a contract, whatever its object, be it specie, goods or services,
except the general admonition against stipulations contrary to law, morals, good customs, public order or
public policy. Under the Civil Code, therefore, and as a general proposition, fixed-term employment
contracts are not limited, as they are under the present Labor Code, to those by nature seasonal or for
specific projects with pre-determined dates of completion; they also include those to which the parties by
free choice have assigned a specific date of termination. 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. 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.

Cyruz P. Tuppal
2011-0134
Case Title: Ramirez Vs. The Honorable Secretary Of Labor And Employment
G.R. No.: 89894.
Petitioner: M. Ramirez Industries and/or Manny Ramirez
Respondent: The Honorable Secretary of Labor and Employment
Facts:
Petitioner M. Ramirez Industries is a single proprietorship in Tungkop, Minglanilla, Cebu. It is

engaged in the manufacture of handmade rattan baskets for export abroad, principally to Japan, and has
in its employ from 400 to 500 employees. On April 1, 1986, Carolyn Alfonso and 260 other employees
filed a complaint with the Regional Office No. VII of the Department of Labor in Cebu City, alleging non-
payment of minimum wage, living allowances and non-compliance with other labor standard laws against
M. Ramirez Industries and/or Manny Ramirez, its proprietor. Accordingly, an inspection was conducted in
the company premises on the same day by Labor Standard Officer Juanito Yallosa. After verifying the
allegations of the complaint, the case was docketed as LSED Case No. 028-86. Meantime it appears that
private respondents stopped working on April 8, 1986. On April 11, 1986, petitioner filed an ex
parte motion to dismiss the case alleging voluntary desistance by private respondents. Attached to the
motion was a letter, signed by 215 employees, affirming their decision to desist from proceeding with their
claim against petitioner. The motion was set for conference on May 7, 1986. Both petitioner and private
respondents were notified, but only private respondents appeared. Private respondents opposed the
motion on the ground that they were not signatories to the letter of affirmation supporting the motion to
dismiss. The Regional Director denied petitioner’s motion in an order dated May 22, 1986, after finding
that 90 per cent of the signatures in the letter were not those of the complainants, while complainants,
whose signatures appeared in the letters, had been deceived into signing the letters.
Issue:
WON that the matter was outside the jurisdiction of the Regional Director. Without acting on the
motion, the Regional Director on July 18, 1986 ordered petitioner to pay private respondents the total
amount of P430,901.75.
Held:
With respect to the first ground, petitioner contends that the case falls within the original and
exclusive jurisdiction of the Labor Arbiter, citing in support of its contention Art. 217 of the Labor
Code, which, before its amendment by R.A. No. 6715 on March 21, 1989, provided:
Art. 217. Jurisdiction of Labor Arbiter and the Commission. (a) The Labor Arbiters shall have the original
and exclusive jurisdiction to hear and decide within thirty (30) working days after submission of the case
by the parties for decision, the following cases involving all workers, whether agricultural or non-
agricultural: 1. Unfair labor practice cases; 2. Those that workers may file involving wages, hours of work
and other terms and conditions of employment; 3. All money claims of workers, including those based on
non-payment or underpayment of wages, overtime compensation, separation pay and other benefits
provided by law or appropriate agreement, except claims for employees’ compensation, social security,
medicare and maternity benefits; 4. Cases involving household services; and 5. Cases arising from any
violation of Article 265 of this Code, including questions involving the legality of strikes and lockouts.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.

Cyruz P. Tuppal
2011-0134
Case Title: Santos Vs Nlrc

G.R. No.: G.R. No. 101699.
Petitioner: Benjamin A. Santos,
Respondent: National Labor Relations Commission, Hon. Labor Arbiter Fructuoso T. Aurellano and
Melvin D. Millena
Ponente: Vitug, J.
Facts:
Private respondent expressed “shock” over the termination of his employment. He complained
that he would not have resigned from the Sycip, Gorres & Velayo accounting firm, where he was already
a senior staff auditor, had it not been for the assurance of a “continuos job” by MMDC’s Engr. Rodillano
E. Velasquez. Private respondent requested that he be reimbursed the “advances” he had made for the
company and be paid his “accrued salaries/claims. The respondents are hereby ordered to pay the
petitioner the amount of P37,132.25 corresponding to the latter’s unpaid salaries and advances:
P5,400.00 for petitioner’s 13th month pay; P3,340.95 as service incentive leave pay; and P5,400.00 as
separation pay. The respondents are further ordered to pay the petitioner 10% of the monetary awards as
attorney’s fees. Alleging abuse of discretion by the Labor Arbiter, the company and its co-respondents
filed a “motion for reconsideration and/or appeal.”[8]The motion/ appeal was forthwith indorsed to the
Executive Director of the NLRC in Manila.
Issue:
WON having held illegal the termination of employment of private respondent Melvin D. Millena,
has ordered petitioner MMDC, as well as its president (herein petitioner) and the executive vice-president
in their personal capacities, to pay Millena his monetary claims.
Held:
A corporation is a juridical entity with legal personality separate and distinct from those acting for
and in its behalf and, in general, from the people comprising it. The rule is that obligations incurred by the
corporation, acting through its directors, officers and employees, are its sole liabilities. Nevertheless,
being a mere fiction of law, peculiar situations or valid grounds can exist to warrant, albeit done sparingly,
the disregard of its independent being and the lifting of the corporate veil. As a rule, this situation might
arise when a corporation is used to evade a just and due obligation or to justify a wrong, to shield or
perpetrate fraud, to carry out similar other unjustifiable aims or intentions, or as a subterfuge to commit
injustice and so circumvent the law.

Cyruz P. Tuppal
2011-0134
Case Title: Chua-Qua Vs. Clave

G.R. No.: L-49549
Date: 30 August 1990
Petitioner: Evelyn Chua-Qua
Respondent: Hon. Jacobo C. Clave, In His Capacity as Presidential Executive Assistant,
And Tay Tung High School, Inc.
Ponente: Regalado, J
Facts:
Tay Tung High School, Inc. is an educational institution in Bacolod City. Petitioner Evelyn Chua-
Cua had been employed in the said school as a teacher since 1963 and, in 1976 when this dispute arose,
was the class adviser in the sixth grade where one Bobby Qua was enrolled. Since it was the policy of the
school to extend remedial instructions to its students, Bobby Qua was imparted such instructions in
school by Evelyn Chua-Cua. In the course thereof, the couple fell in love and on 24 December 1975, they
got married in a civil ceremony solemnized in Iloilo City by Hon. Cornelio G. Lazaro, City Judge of Iloilo.
The teacher Evelyn Chua-Cua was then thirty (30) years of age but Bobby Qua was just sixteen (16)
years old. Consent and advice to the marriage was given by Bobby Cua’s mother. Their marriage was
ratified in accordance with the rites of their religion in a church wedding solemnized by Fr. Nick Melicor at
Bacolod City on 10 January 1976. On 4 February 1976, the school filed with the sub-regional office of the
Department of Labor at Bacolod City an application for clearance to terminate the employment of
petitioner on the following ground: "For abusive and unethical conduct unbecoming of a dignified school
teacher and that her continued employment is inimical to the best interest, and would downgrade the high
moral values, of the school." Evelyn Chua-Cua was placed under suspension without pay. Executive
Labor Arbiter Jose Y. Aguirre, Jr. of the National Labor Relations Commission, Bacolod City, to whom the
case was certified for resolution, required the parties to submit their position papers and supporting
evidence. Affidavits were submitted by the school to bolster its contention that petitioner, "defying all
standards of decency, recklessly took advantage of her position as school teacher, lured a Grade VI boy
under her advisory section and 15 years her junior into an amorous relation." The school raised issues on
the fact that Evelyn Chua-Cua stayed alone with Bobby Qua in the classroom after school hours when
everybody had gone home, with one door allegedly locked and the other slightly open. This would have
been just another illegal dismissal case were it not for the controversial and unique situation that the
marriage of Evelyn Chua-Cua, then a classroom teacher, to her student who was fourteen (14) years her
junior, was considered by the school authorities as sufficient basis for terminating her services.
Issue:
WON the suspension was illegal
Held:
The case reached all the way to the Supreme Court. The high court ruled that termination of
employment cannot be adjudged if the grounds are not substantiated. The court said: the avowed policy
of the school in rearing its students should not be capitalized on, to defeat security of tenure, especially
when there is no clear proof to establish a valid cause for dismissal. The court also faulted the school for
failing to show that the teacher took advantage of her position to court her student. The court also
dismissed the inappropriateness of a May-December affair in school. The court said: If the two eventually
fell in love despite the disparity in their ages and academic levels, this only lends substance to the truism
that the heart has reasons of its own which reason does not know. The court also imparted that a teacher
in her thirties falling in love with a teen-ager student should not automatically be deemed immoral. But
definitely, yielding to this gentle and universal emotion is not to be so casually equated with immorality,

the court noted. The court added that “The deviation of the circumstances of their marriage from the usual
social pattern cannot be considered as a defiance of contemporary social mores”. In the end, while the
court ruled in favor of the teacher Evelyn Chua-Cua, and found her dismissal illegal, the court also
recognized the strained relations between Evelyn Chua-Cua and the school. Reinstatement of Evelyn
Chua-Cua would no longer be prudent, the court said. The court awarded Evelyn Chua-Cua three (3)
years backwages and separation pay.

Cyruz P. Tuppal
2011-0134
Case Title: Aparente, Sr. v. NLRC

G.R. No.: 117652
Petitioner: Rolando Aparente, Sr.
Respondent: National Labor Relations Commission, And Coca-Cola Bottlers
Philippines, Inc.
Ponente: De Leon, Jr.
Facts:
Petitioner was employed by Coca-Cola Bottlers Phils. Inc., as assistant mechanic. Petitioner
drove private respondent’s truckto install a panel sign and accidentally sideswiped a ten year old girl
whose injuries incurred hospitalization expenses of up to Php 19, 534. 45. Such amount was not
reimbursed by insurance as petitioner had no driver’s license at the time of the accident; therefore private
respondent shouldered the expenses. Private respondent conducted an investigation where petitioner
was given the opportunity to defend himself. Petitioner was then dismissed for violating the company
rules and regulation for blatant disregard of established control procedures resulting in company
damages.
Issue:
WON petitioner was validly dismissed.
Held:
Yes. Although petitioner contends that he was investigated simply for the offense of driving
without a valid driver’s license, it was clear that he was fully aware that he was being investigated for his
involvement in the vehicular accident. It was also known to him that the accident caused the victim to
suffer serious injuries leading to expenses which the insurance refused to cover. Due process does not
necessarily require a hearing, as long as one is given reasonable opportunity to be heard. Despite
petitioner’s 18 years of satisfactory service and that the infraction committed by him was his first offense;
petitioner’s dismissal is justified by the company rules and regulations. In order to constitute wilful
disobedience, the employee’s conduct must have been willful or intentional and the order violated must
have been reasonable, lawful, made known to the employee and must pertains to the duties which he had
been engaged to discharge. Such elements are attendant in the present case. Although
an employee who is dismissed for just cause is not entitled to any financial assistance, due to equity
considerations as this is petitioner’s first offense in 18 years of service, he is to be granted separation pay
by way of financial assistance of ½ month’s pay every year of service.

Cyruz P. Tuppal
2011-0134
Case Title: Lacorte Vs Inciong

G.R. No.: L-52034
Petitioner: Salvador Lacorte
Respondent: Hon. Amado G. Inciong In His Capacity As Deputy Minister Of Labor; Hon.
Francisco L. Estrella
Ponente: Fernan, J.
Facts:
Petitioner, an employee of Respondent Corporation, was found by respondent Estrella to have

committed certain acts in breach of the trust and confidence of his employer. On January 19, 1977,
complainant offered to purchase some obsolete, defective and non-usable junk materials from
respondent. The respondent agreed and issued a cash invoice for the purchase of the scrap items. When
complainant tried to bring out these items he was accosted by respondent's security guard and in the
course of the investigation, it was discovered that the items sought to be brought out by complainant
weighed more than what he actually purchased. Furthermore, it was found out that the items were not
junk since some parts were brand new and usable. As a consequence the respondent filed a case for
qualified theft against complainant before the Provincial Fiscal of Bulacan. The criminal complaint was
however, dismissed for insufficiency of evidence. Hence, petition.
Issue:
WON the court erred in its decision
Held:
The purpose of the proceedings before the fiscal is to determine if there is sufficient evidence to
warrant the prosecution and conviction of the accused. In assessing the evidence before him, the fiscal
considers the basic rule that to successfully convict the accused the evidence must be beyond
reasonable doubt and not merely substantial. On the other hand, to support findings and conclusion of
administrative bodies only substantial evidence is required. It does not follow that once the fiscal
dismisses the complaint for qualified theft, respondent officials should also have decided in favor of
petitioner. For one, the evidence presented before the two bodies may not be necessarily identical.
Secondly, the appreciation of the facts and evidence presented is an exercise of discretion on the part of
administrative officials over which one cannot impose his conclusion on the other. As the court has
already ruled, "the conviction of an employee in a criminal case is not indispensable to warrant his
dismissal, and the fact that a criminal complaint against the employee has been dropped by the fiscal is
not binding and conclusive upon a labor tribunal.

Cyruz P. Tuppal
2011-0134
Case Title: Starlite vs NLRC

G.R. No.: 78491
Petitioner: Starlite Plastic Industrial Corporation
Respondent: National Labor Relations Commission and Edgar Gomez
Ponente: Cortes, J.
Facts:
Private respondent GOMEZ was employed as a factory worker by STARLITE sometime in March
1981. On 22 June 1984, STARLITE dismissed him on the ground that he was caught attempting to steal
one ballast costing P80.00. STARLITE reported the matter to the police on 19 July 1984, after grievance
meetings failed to resolve the controversy. A criminal complaint was filed against GOMEZ, but the
investigating fiscal dismissed the same saying that STARLITE failed to establish a prima facie case
against GOMEZ. On 13 August 1983, private respondent GOMEZ filed a complaint for illegal dismissal
against STARLITE. After the parties submitted their respective position papers, the Labor Arbiter
rendered his decision on 15 January 1985 dismissing the complaint for lack of merit. GOMEZ appealed
the decision to the public respondent NLRC which in a decision dated 18 February 1987 reversed the
ruling of the Labor Arbiter.
Issue:
WON decision of the NLRC was rendered in grave abuse of discretion petitioner argues that the
act of dishonesty of GOMEZ led petitioner to lose its trust and confidence in him and is more than
sufficient to justify his dismissal. Private respondent GOMEZ appealed the decision to public respondent
NLRC which, on 18 February 1987, reversed the ruling of the Labor Arbiter, holding that the facts on
record did not support the Labor Arbiter's conclusion.
Held:
The Court finds petitioner's contentions unmeritorious. At the outset, the Court finds it necessary
to emphasize that contrary to the tenor of the Labor Arbiter's decision, a dismissed employee is not
required to prove his innocence of the charges levelled against him by his employer. The Court has laid
down the rule that in termination cases, the burden of proving the just cause of dismissing an employee
rests on the employer and his failure to do so would result in a finding that the dismissal is unjustified. In
view of the finding that GOMEZ was dismissed illegally, STARLITE is obligated to reinstate GOMEZ to his
former position or one reasonably equivalent thereto without loss of seniority rights, and to pay back
wages for three years, without qualification or deduction.

Cyruz P. Tuppal
2011-0134
Case Title: Quiambao Vs Nlrc

G.R. No.: 91935
Date: March 4, 1996
Petitioner: Rodolfo Quiambao
Respondent: National Labor Relations Commission and Central Cement Marketing Corp
Ponente: Mendoza, J.
Facts:
Rodolfo Quiambao was hired as officer-in-charge of private respondent Central Cement

Corporation’s Tuguegarao Branch on December 1, 1982. Six months later, he was made permanent
Branch Manager at a monthly salary of P2,500.00 with a monthly emergency cost of living allowance of
P3 50.00 and a representation allowance of P200.00. Among other things, petitioner, together with
William Kho, the Branch Cashier, was in charge of credit collections. He submitted monthly reports to the
Central Office on the operations of the branch and the outstanding balances of its customers. He was
also required to attend regular monthly meetings in the Central Office, together with the Vice President for
Marketing and the Marketing Manager.
In April 1984, a financial and performance audit made by the Central Office showed the
Tuguegarao Branch of which he was the Manager to be in “a state of disarray and chaos.”
On May 25, 1984, petitioner was suspended for an indefinite period for poor performance in extending
credit to customers, violation of company rules and regulations and gross negligence. He was informed
that a committee would be created to investigate him and that afterward he would be informed of the
management’s decision. As a result of further investigation petitioner was charged with estafa before the
Provincial Fiscal of Tuguegarao, while a civil case for collection was brought against him in the Regional
Trial Court of Makati.
The criminal complaint was dismissed by Acting Provincial Fiscal Alejandro de Guzman. Although on
appeal to the Ministry of Justice the then Deputy Minister of Justice, now Associate Justice of this Court,
Reynato S. Puno reversed the provincial fiscal and ordered the filing of an information for estafa against
petitioner, the case was eventually dismissed by the Regional Trial Court of Tuguegarao because of the
failure of the prosecution witnesses to appear. The civil suit filed by Central Cement was likewise
dismissed by Branch 60 of the Regional Trial Court of Makati for failure of Central Cement to prove its
case against petitioner Quiambao.
Issue:
WON NLRC committed a grave abuse of its discretion
Held:
This case is to be distinguished from those cases in which it was held that the acquittal of the
[
employee in the criminal case was not a bar to his dismissal on the ground of loss of confidence. The
rulings in those cases were based on findings that the evidence in the criminal case was not sufficient to
satisfy the requirement of proof beyond reasonable doubt but otherwise adequate to support a finding that
there was substantial evidence that the employee was guilty. In contrast, in the case at bar, there is
entire want of evidence to justify the dismissal of the petitioner. The NLRC merely relied on the fact that
the Ministry of Justice found petitioner probably guilty of estafa. In fact, the NLRC found that the charges
against him had not been substantiated. Moreover there was, in this case, no investigation by the private
respondent. There was only a financial and performance audit conducted. The alleged “state of disarray
and chaos” in the Tuguegarao Branch of the company had not been shown to have been caused by
petitioner. Petitioner was served with a notice of indefinite preventive suspension on the ground that he
violated company rules and regulations, extended credit to customers beyond the limit and neglected his

duties. But petitioner was not informed of these charges nor given the chance to be heard. On top of
this, the NLRC found no evidence substantiating the charges. Nor is there evidence that he
misappropriated funds of the company or extorted money from customers, as charged. As already
stated, private respondent simply relied on the outcome of the preliminary investigation and the
subsequent filing of the criminal case as basis for the dismissal of petitioner on this ground. That case
was eventually dismissed by the RTC of Tuguegarao for failure of prosecution witnesses to testify, as was
the civil case brought in the RTC of Makati, which found that it was not petitioner Quiambao but the
company’s cashier, Antonio Kho, who had misappropriated the money. With the dismissal of both the
criminal and civil cases and without any company investigation conducted to establish petitioner’s
culpability, private respondent’s claim of loss of confidence became untenable. It was grave abuse of
discretion for the NRLC to uphold petitioner’s dismissal.

Cyruz P. Tuppal
2011-0134
Case Title: San Miguel Corp. Vs NLRC

G.R. No.: 146121-22,
Petitioner: San Miguel Corporation and Geribern Abella
Respondent: National Labor Relations Commission (First Division), Labor Arbiter Pedro
Ramos and Ernesto Ibias
Ponente: Tinga, J.
Facts:
Ernesto M. Ibias (respondent) was employed by petitioner SMC on 24 December 1978 initially as
a CRO operator in its Metal Closure and Lithography Plant. Respondent continuously worked therein until
he advanced as Zamatic operator. He was also an active and militant member of a labor organization
called Ilaw Buklod Manggagawa (IBM)-SMC Chapter. According to SMC's Policy on Employee Conduct,
absences without permission or AWOPs, which are absences not covered either by a certification of the
plant doctor that the employee was absent due to sickness or by a duly approved application for leave of
absence filed at least six (6) days prior to the intended leave, are subject to disciplinary action
characterized by progressively increasing weight.
Issue:
WON the court of appeals decided the cases in a way not in accord with law and the applicable
decisions of the Supreme Court, and in violation of the accepted rules on evidence and usual course of
judicial proceedings.
Held:
The Court agrees with the tribunals below that SMC was unable to prove the falsification charge
against respondent. Respondent cannot be legally dismissed on the basis of the uncorroborated and self-
serving testimonies of SMC's employees. SMC merely relied on the testimonies of Marabe and Siwa, who
both stated that respondent admitted to them that he falsified his medical consultation card to cover up
his excessive AWOPs. For his part, respondent denied having had any knowledge of said falsification,
both in his testimony during the company-level investigation and in his handwritten explanation. He did
not even claim that he had not requested for, nor had been granted any sick leave for the days that the
falsified entries were made. Siwa, being responsible for the medical cards, should take the blame for the
loss and alleged tampering thereof, and not respondent who had no control over the same. Proof beyond
reasonable doubt is not required as a basis for judgment on the legality of an employer's dismissal of an
employee, nor even preponderance of evidence for that matter, substantial evidence being sufficient. In
the instant case, while there may be no denying that respondent's medical card had falsified entries in it,
SMC was unable to prove, by substantial evidence, that it was respondent who made the unauthorized
entries. Besides, SMC's (Your) Guide on Employee Conduct punishes the act of falsification of company
records or documents; it does not punish mere possession of a falsified document. SMC acted well within
its rights when it dismissed respondent for his numerous absences. Respondent was afforded due
process and was validly dismissed for cause.

Cyruz P. Tuppal
2011-0134
Case Title: Westin Philippine Plaza Hotel v. National Labor Relations Commission,
G.R. No.: 121621
Date: 3 May 1999
Petitioner: Westin Philippine Plaza Hotel
Respondent: National Labor Relations Commission,
Ponente: Quisimbing, J.
Facts:
Accused Enriquez promised employment in Taiwan to at least 42 people. They were each asked
to pay processing fees ranging from P3, 370 to P5, 000 for which no receipts were issued and to submit
documents to facilitate their travel and subsequent deployment abroad. The POEA issued a certification
showing the Enriquez is not licensed to engage in the recruitment of workers for overseas employment. In
her defense, Enriquez claimed that it was her common-law husband who was engaged in the “business”
and she only acted as his secretary when she dealt with the complainants. She allowed him to establish
his recruitment office at her residence. Enriquez claimed that she only helped her husband in the office
for three months while he was looking for a secretary. Part of her duties then was to collect the
documents submitted by the applicants and receive the money they paid as placement fees.
Issue:
WON the accused was guilty of illegal recruitment in large-scale
Held:
Yes. The essential elements of the crime of illegal recruitment in large-scale can be summarized
as follows: Case Digest on 1- Labor Law the accused engages in acts of recruitment and placement of
workers as defined in the Labor Code; Case Digest on 2- Labor Law the accused does not have a license
or authority from the Secretary of Labor to recruit and deploy workers; and Case Digest on 3- Labor Law
the accused commits the same unlawful acts against three or more persons, individually or as a group.
The theory of the defense unduly strains the credulity of the Court. The complainants positively identified
Enriquez as the one who dealt directly with them from the time they inquired about the job prospects
abroad until they complied with the requirements and followed up their applications. Worth reiterating is
the rule that illegal recruitment in large-scale is malum prohibitum, not malum in se, and that the fact
alone that a person violated the law warrants her conviction. Any claim of lack of criminal intent is
unavailing.

Cyruz P. Tuppal
2011-0134
Case Title: Castillo vs NLRC

G.R. No. 104319.
Date: June 17, 1999
Petitioner: Carolina Castillo
Respondent: National Labor Relations Commission and Philippine Commercial &
International Bank
Ponente: Gonzaga-Reyes, J.
Facts:
Petitioner was an employee since April 1981 of private respondent Philippine Commercial &
International Bank (PCIB) as Foreign Remittance Clerk from 1987 to January 31, 1988 in the private
respondent bank’s Ermita branch. On January 12, 1988, Faisal Al Shahab, a Jordanian national, went to
respondent bank’s Ermita branch to claim a foreign remittance in the amount of US$2,000.00. Shahab
paid P450.00 as commission charges as computed by petitioner. Upon re-computation, the correct
amount of the charges amounted to onlyP248.75. On January 25, 1988, Shahab filed a formal complaint
with the branch manager of the respondent bank regarding the over-charging of commission on foreign
remittances, specifically mentioning petitioner as the one who attended to his withdrawals. The branch
manager decided to pursue further investigation on the matter.
Issue:
WON NLRC erred in ruling that petitioner was not constructively and illegally dismissed
Held:
Well-settled is the rule that it is the prerogative of the employer to transfer and reassign
employees for valid reasons and according to the requirement of its business. An owner of a business
enterprise is given considerable leeway in managing his business. The law recognizes certain rights
collectively called management prerogative as inherent in the management of business enterprises. One
of the prerogatives of management is the right to transfer employees in their work station. This Court has
consistently recognized and upheld the prerogative of management to transfer an employee from one
office to another within the business establishment, provided that there is no demotion in rank or a
diminution of his salary, benefits and other privileges. The Court, as a rule, will not interfere with an
employer’s prerogative to regulate all aspects of employment which includes among others, work
assignment, working methods, and place and manner of work. The rule is well-settled that labor laws
discourage interference with an employer’s judgment in the conduct of his business. In case of a
constructive dismissal, the employer has the burden of proving that the transfer and demotion of an
employee are for valid and legitimate grounds, i.e., that the transfer is not unreasonable, inconvenient, or
prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries,
privileges and other benefits. Where the employer fails to overcome this burden of proof, the employee’s
demotion shall no doubt be tantamount to unlawful constructive dismissal.

Name : Ventura, Gerandel S.
Student No. : 2011-0118
Case Title : SAN MIGUEL CORPORATION, petitioner, vs. NATIONAL LABOR

RELATIONS COMMISSION, SECOND DIVISION, AND SAN MIGUEL
CORPORATION EMPLOYEES UNION (SMCEU) - PTGWO, respondents
GR Number : 99266
Date : March 2, 1999
Petitioner : San Miguel Corporation
Respondent : NLRC Second Division, and SMCEU-PTGWO
Ponente : Purisima, J.
Facts
1. In July 1990, San Miguel Corporation streamlined its operations due to financial losses and shut
down some of its plants declaring 55 positions as redundant.
2. Consequently, the respondent union filed several grievance cases for the said retrenched employees,
praying for the redeployment of the said employees to the other divisions of the company.
3. The grievance proceedings were conducted pursuant to Sections 5 and 8, Article VIII of the parties’
1990 CBA.
4. During the grievance proceedings, however, most of the employees were redeployed, while others
accepted early retirement. As a result only 17 employees remained when the parties proceeded to
the third level of the grievance procedure.
5. In a meeting on October 26, 1990, petitioner informed respondent union that if by October 30, 1990,
the remaining 17 employees could not yet be redeployed; their services would be terminated on
November 2, 1990.
6. The said meeting adjourned when Daniel S. L. Borbon II, a representative of the union, declared that
there was nothing more to discuss in view of the deadlock.
7. On November 7, 1990, respondent filed with the National Conciliation and Mediation Board (NCMB)
of DOLE a notice of strike on the following grounds: a) bargaining deadlock; b) union busting; c) gross
violation of CBA such as non-compliance with the grievance procedure; d) failure to provide
respondent with a list of vacant positions pursuant to the parties side agreement that was appended
to the 1990 CBA; and e) defiance of voluntary arbitration award.
8. Petitioner on the other hand, moved to dismiss the notice of strike but the NCMB failed to act on the
motion.
9. On December 21, 1990, petitioner filed a complaint with the respondent NLRC, praying for: (1) the
dismissal the notice of strike; (2) an order compelling the respondent union to submit to grievance
and arbitration the issue listed in the notice of strike; (3) the recovery of the expenses of litigation.
10. NLRC dismissed the complaint.
Issue
1. Whether or not NLRC gravely abused its discretion in dismissing the complaint of petitioner SMC
based on a dispute arising from abolition of position
Held
Abolition of departments or positions in the company is one of the recognized management
prerogatives.
In the absence of proof that the act of petitioner was ill-motivated, it is presumed that petitioner San
Miguel Corporation acted in good faith.
In fact, petitioner acceded to the demands of the private respondent union by redeploying most of the
employees involved.
In the case under consideration, the grounds relied upon by the private respondent union are non-
strikeable. The issues which may lend substance to the notice of strike filed by the private
respondent union are: collective bargaining deadlock and petitioner’s alleged violation of the
collective bargaining agreement. These grounds, however, appear more illusory than real.

Collective Bargaining Deadlock is the situation between the labor and the management of the
company where there is failure in the collective bargaining negotiations resulting in a stalemate.
This situation is non-existent in the present case since there is a Board assigned on the third level of
the grievance machinery to resolve the conflicting views of the parties.
Instead of asking the Conciliation Board composed of five representatives each from the company
and the union, to decide the conflict, petitioner declared a deadlock, and thereafter, filed a notice of
strike.
For failing to exhaust all the steps in the grievance machinery and arbitration proceedings provided in
CBA, the notice of strike should have been dismissed by the NLRC and respondent union ordered to
proceed with the grievance and arbitration proceedings.
In abandoning the grievance proceedings and stubbornly refusing to avail of the remedies under the
CBA, private respondent violated the mandatory provisions of the collective bargaining agreement.
NLRC gravely abused its discretion in dismissing the complaint of petitioner SMC for the dismissal of
the notice of strike, issuance of a temporary restraining order, and an order compelling the
respondent union to settle the dispute under the grievance machinery of their CBA.
The instant petition is denied.


Student No. : 2011-0118
Case Title : FARLE P. ALMODIEL, petitioner, vs. NATIONAL LABOR RELATIONS

COMMISSION (FIRST DIVISION), RAYTHEON PHILS., INC., respondents
GR Number : 100641
Date : June 14, 1993
Petitioner : Farle P. Almodiel
Respondent : NLRC First Division, and Raytheon Phils., Inc.
Ponente : Nocon, J.
Facts
1. Almodiel is a CPA who was hired in October, 1987 as Cost Accounting Manager of respondent
Raytheon Philippines.
2. As Cost Accounting Manager, his major duties were: (1) plan, coordinate and carry out year and
physical inventory; (2) formulate and issue out hard copies of Standard Product costing and other
cost/pricing analysis if needed and required and (3) set up the written Cost Accounting System for the
whole company.
3. On August 17, 1988, he recommended and submitted a Cost Accounting/Finance Reorganization, but
was disapproved by the Controller.
4. However, he was assured by the Controller that should his position or department becomes
untenable or unable to deliver the needed service due to manpower constraint, he would be given a
three year advance notice.
5. In the meantime, the standard cost accounting system was installed and used at the Raytheon
subsidiaries worldwide and was adopted and installed in the Philippine operations.
6. As a consequence, the services of a Cost Accounting Manager allegedly entailed only the submission
of periodic reports
7. On January 27, 1989, petitioner was summoned by his immediate boss and was told of the abolition
of his position on the ground of redundancy.
8. He pleaded with management to defer its action or transfer him to another department, but he was
told that the decision of management was final and that the same has been conveyed to the DOLE.
9. He was constrained to file the complaint for illegal dismissal.
10. Judgment is rendered declaring that complainant's termination on the ground of redundancy is highly
irregular and without legal and factual basis, thus ordering the respondents to reinstate complainant
to his former position with full back wages without lost of seniority rights and other benefits.
11. NLRC reversed the decision and directed Raytheon to pay petitioner the total sum of P100,000.00 as
separation pay/financial assistance.
Issue
1. Whether or not NLRC committed grave abuse of discretion amounting to lack of or in excess of
jurisdiction in declaring as valid and justified the termination of petitioner on the ground of redundancy
in the face of clearly established finding that petitioner's termination was tainted with malice, bad faith
and irregularity
Held
Termination of an employee's services because of redundancy is governed by Article 283 of the
Labor Code.
There is no dispute that petitioner was duly advised, one month before, of the termination of his
employment on the ground of redundancy in a written notice by his immediate superior.
The controversy lies on whether bad faith, malice and irregularity crept in the abolition of petitioner's
position of Cost Accounting Manager on the ground of redundancy.

Petitioner claims that the functions of his position were absorbed by the Payroll/Mis/Finance
Department under the management of Danny Ang Tan Chai, a resident alien without any working
permit from DOLE as required by law.
Petitioner relies on the testimony of Raytheon's witness to the effect that corollary functions
appertaining to cost accounting were dispersed to other units in the Finance Department.
Granting that his department has to be declared redundant, he claims that he should have been the
Manager of the Payroll/Mis/Finance Department which handled general accounting, payroll and
encoding.
The Court said that redundancy, for purposes of our Labor Code, exists where the services of an
employee are in excess of what is reasonably demanded by the actual requirements of the
enterprise.
The characterization of an employee's services as no longer necessary or sustainable, and therefore,
properly terminable, was an exercise of business judgment on the part of the employer.
An employer has no legal obligation to keep more employees than are necessary for the operation of
its business. The functions of a position simply added to the duties of another does not affect the
legitimacy of the employer's right to abolish a position when done in the normal exercise of its
prerogative to adopt sound business practices in the management of its affairs.
The petition is dismissed.


Student No. : 2011-0118
Case Title : WILTSHIRE FILE CO., INC., petitioner, vs. NLRC and VICENTE T. ONG,
respondents
GR Number : 82249
Date : February 7, 1991
Petitioner : Wiltshire File Co., Inc.
Respondent : NLRC, and Vicente T. Ong
Ponente : Feliciano, J.
Facts
1. Ong was the Sales Manager of Wiltshire from 16 March 1981 up to 18 June 1985.
2. On 13 June 1985, upon Ong’s return from a business and pleasure trip abroad, he was informed by
the president of Wiltshire that his services were being terminated upon the ground of redundancy.
3. Ong filed a complaint for illegal dismissal alleging that his position could not possibly be redundant
because nobody the company was then performing the same duties.
4. Wiltshire alleged that the termination of Ong’s services was a cost-cutting measure: that in December
1984, the company had experienced an unusually low volume of orders: and that it was in fact forced
to rotate its employees in order to save the company.
5. Despite the rotation of employees, Wiltshire alleged that it continued to experience financial losses
and Ong’s position, Sales Manager of the company, became redundant.
6. During the proceedings, Wiltshire, in a letter addressed to the Regional Director of the then Ministry of
Labor and Employment, notified that effective 2 January 1987, Wiltshire would close its doors
permanently due to substantial business losses.
7. The Labor Arbiter declared the termination of private respondent's services illegal.
Issue
1. Whether or not Ong’s dismissal was justified and not illegal
Held
Wiltshire maintains that it had been incurring business losses beginning 1984 and that it was
compelled to reduce the size of its personnel force.
Petitioner also contends that redundancy as a cause for termination does not necessarily mean
duplication of work but a situation where the services of an employee are in excess of what is
demanded by the needs of an undertaking.
The Court declared that indeed petitioner had serious financial difficulties before, during and after the
termination of the services of Ong.
Turning to the legality of the termination of Ong’s employment, the Court finds merit in Wiltshire’s
basic argument. It is unable to sustain NLRC's holding that private respondent's dismissal was not
justified by redundancy and hence illegal.
Termination of an employee's services because of retrenchment to prevent further losses or redundancy,
is governed by Article 283 of the Labor Code which provides as follows:
Art. 283. Closure of establishment and reduction of personnel. –– The employer may also
terminate the employment of any employee due to the installation of labor saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of circumventing the provisions of
this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at
least one month before the intended date thereof. In case of termination due to the installation of
labor saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay
equivalent to at least his one month pay or to at least one month pay for every year of service,
whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation

of operations of establishment or undertaking not due to serious business losses or financial
reverses, the separation pay shall be equivalent to one month pay or at least one-half month pay for
every of service, whichever is higher. A fraction of at least six months shall be considered one whole
year.
Termination of services for any of the above described causes should be distinguished from
termination of employment by reason of some blameworthy act or omission on the part of the
employee, in which case the applicable provision is Article 282 of the Labor Code
This is not to say that the employee may not contest the reality or good faith character of the
retrenchment or redundancy asserted as grounds for termination of services.
The appropriate forum for such controversy would be the Department of Labor and Employment and
not an investigation or hearing to be held by the employer itself. It is precisely for this reason that an
employer seeking to terminate services of an employee or employees because of closure of
establishment and reduction of personnel, is legally required to give a written notice not only to the
employee but also to DOLE at least one month before effectivity date of the termination.
In the instant case, Ong did controvert before the appropriate labor authorities the grounds for
termination of services set out in Wiltshire’s letter to him.
The Court resolved to grant due course to the petition. The decision of NLRC is set aside and
nullified.

Student No. : 2011-0118
Case Title : EDGE APPAREL, INC., petitioner, vs. NLRC, Fourth Division, Cebu City;
Regional Arbitration Branch No. 7, Cebu City; and JOSEPHINE ANTIPUESTO,
NORINA ANDO, JULIET BAGUIO, APOLINARIA VELONTA, CORAZON PINO,
and JOSEPHINE CAÑETE, respondents
GR Number : 121314
Date : February 12, 1998
Petitioner : Edge Apparel, Inc
Respondent : NLRC Fourth Division Cebu City, Regional Arbitration Branch No. 7,
Cebu City, and Josephine Antipuesto, Norina Ando, Juliet Baguio, Apolinaria
Velonta, Corazon Pino and Josephine Canete
Ponente : Vitug, J.
Facts
1. Pursuing its retrenchment program, Edge Apparel dismissed private respondents from employment
effective 03 September 1992.
2. Feeling aggrieved, Antipuesto, et al., consulted with the Regional Director of DOLE who opined that it
would be best for them to receive the separation pay being offered by the corporation. His advice
was heeded.
3. The subsequent receipt of their separation pay benefits, nevertheless, did not deter Antipuesto, et al.,
from later going through with their complaint for illegal dismissal against the corporation. The charge
averred that the retrenchment program was a mere subterfuge used by Edge Apparel to give a
semblance of regularity and validity to the dismissal of the complainants.
4. Edge Apparel countered that its financial obligations, amounting to about P8 Million, had begun to eat
up most of its capital outlay and resulted in unabated losses, constraining the company to adopt and
implement a retrenchment program.
5. Satisfied with the legality of the retrenchment program, the Labor Arbiter dismissed the complaint of
Antipuesto, et al., against Edge Apparel.
6. Antipuesto, et al., appealed the decision of the Labor Arbiter to NLRC. In their appeal, Antipuesto, et
al., claimed that the documents submitted by Edge Apparel to demonstrate its alleged losses had
been "bloated" so as to reflect financial losses.
7. The decision of the Labor Arbiter is affirmed in all other respects. The respondents are ordered to pay
the complainants an additional separation pay equivalent to 1/2 month pay for every year of service.
8. Edge Apparel filed a motion for a partial reconsideration of the above decision. NLRC denied the
motion and ruled that the cause of termination of the employment of the complainants was
redundancy.
Issue
1. Whether or not NLRC erred in holding that the dismissal of private respondents is by redundancy
since it was only their line of work which was phased out by Edge Apparel
Held
Redundancy exists where the services of an employee are in excess of what would reasonably be
demanded by the actual requirements of the enterprise. A position is redundant when it is
superfluous, and superfluity of a position or positions could be the result of a number of factors, such
as the over hiring of workers, a decrease in the volume of business or the dropping of a particular line
or service previously manufactured or undertaken by the enterprise. An employer has no legal
obligation to keep on the payroll employees more than the number needed for the operation of the
business.
Retrenchment, in contrast to redundancy, is an economic ground to reduce the number of employees.
In order to be justified, the termination of employment by reason of retrenchment must be due to
business losses or reverses which are serious, actual and real. Retrenchment is normally resorted to

by management during periods of business reverses and economic difficulties occasioned by such
events as recession, industrial depression, or seasonal fluctuations. It is an act of the employer of
reducing the work force because of losses in the operation of the enterprise, lack of work, or
considerable reduction on the volume of business.
The payment of separation pay would be due when a dismissal is on account of an authorized cause.
The amount of separation pay depends on the ground for the termination of employment. A dismissal
due to the installation of labor saving devices, redundancy or disease entitles the worker to a
separation pay equivalent to one month pay or at least one month pay for every year of service,
whichever is higher.
When the termination of employment is due to retrenchment to prevent losses, or to closure or
cessation of operations of establishment or undertaking not due to serious business losses or
financial reverses, the separation pay is only an equivalent of one month pay or at least one-half
month pay for every year of service, whichever is higher. In the above instances, a fraction of at least
six (6) months is considered as one (1) whole year.
The Court, accordingly, must sustain the position taken by the Labor Arbiter that private respondents
should only be entitled to severance compensation equivalent to one-half month pay for every year of
service.
In this case, the Labor Arbiter and the NLRC both concluded that there had been a valid ground for
the retrenchment of private respondents. The elements needed for the retrenchment to be valid - i.e.,
that the losses expected are substantial; that the expected losses are reasonably imminent such as
can be perceived objectively and in good faith by the employer; that the retrenchment is reasonably
necessary and likely to effectively prevent the expected losses; and that the imminent losses sought
to be forestalled are substantiated -were adequately shown in the present case.
In order to validly effect retrenchment, the employer must observe two other requirements: (a) service
of a prior written notice of at least one month on the workers and the Department of Labor and
Employment, and (b) payment of the due separation pay.
The NLRC, unfortunately, went further by holding that the dismissal of private respondents could
likewise be considered to have been occasioned by redundancy since it was only private
respondents' line of work which was phased out by petitioner.
The Court held that here the NLRC has gravely abused its discretion.
The appealed decision is modified by deleting the additional award of separation pay to private
respondents decreed by the NLRC.

Student No. : 2011-0118
Case Title : HAGONOY RURAL BANK, INC., petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, BASILIO G. DEL ROSARIO, REYNALDO C.
CRUZ, CESAR C. DEL ROSARIO, VICTOR JOVENES, ANTONIA P. RAMIREZ,
ARACELI C. CUZON, LIWAYWAY G. BALTAZAR, DAISY D. REYES,
FEDERICO OWERA, and RODOLFO MANALO, respondents
GR Number : 122075
Date : January 28, 1998
Petitioner : Hagonoy Rural Bank, Inc.
Respondent : NLRC, and Basilio G. del Rosario, Reynaldo C. Cruz, Cesar C. del
Rosario, Victor Jovenes, Antonia P. Ramirez, Araceli C. Cuzon, Liwayway G.
Baltazar, Daisy D. Reyes, Federico Owera, and Rodolfo Manalo
Ponente : Davide, Jr., J.
Facts
1. Private respondents are all regular employees of petitioner and its executive vice-president, Emilio
Suntay III, having been employed for different positions on different dates and salaries.
2. Sometime in 1992, Suntay engaged the services of an external auditor, the Laya, Manabat, Salgado
& Co., to conduct an audit of the financial affairs of the bank.
3. The audit started in August 1992 and in the course of the audit, it became evident that to be
conducted effectively and to avoid possible tampering with, concealment or loss of records and
interference, as initial findings of auditors disclosed that some of the bank employees were guilty of
irregularities, it was necessary for all the bank employees to be preventively suspended during the
audit but as an act of leniency, all of them, except the employees in the Money Shop, were given the
choice of either voluntarily going on leave or being preventively suspended.
4. After 30 days, private respondents reported back to the bank but they were told by respondent
Suntay that the audit was not yet over and so there was a need for them to extend their leave for
another 30 days and they were told that their extended leave was with pay.
5. On 29 September 1993, the final audit report was released by the external auditor, and on October
23, 1993, respondents thru their counsel offered complainants to report back to work.
6. Private respondents refused to accept petitioner’s offer made during the mandatory conference on 23
October 1993 to take them back to work, the parties were required to submit their position papers.
7. Acts of petitioner which acts were effected in bad faith, constitute constructive illegal dismissal
8. Private respondents were dismissed on the grounds of abandonment, serious misconduct and
irregularities, violation of regulations and gross neglect of duties as far as Basilio del Rosario and
Daisy Reyes are concerned, and alleged abstraction thru manipulation of bank records in the case of
Rodolfo Manalo.
9. Hagonoy Rural Bank, Inc. is found guilty of illegally dismissing the private respondents.
Issue
1. Whether or not the private respondents were constructively dismissed
Held
While it may be true that the private respondents had chosen to go on leave for one month, the choice
was not of their complete free will because the other alternative given by the petitioner was suspension.
The threat of suspension thus became the proximate cause of the “leave.” It was a coerced option
imposed by the petitioner.
That the petitioner had in fact in mind private respondents’ suspension was finally made evident by its
refusal to take them back after the expiration of the leave.

The petitioner extended their leave for another month with a promise to pay them salaries. After the
expiration of the "extended” leave, the petitioner still refused to accept them back.
Thus, the private respondents were constructively dismissed from 16 October 1992.


Student No. : 2011-0118
Case Title : MARK ROCHE INTERNATIONAL AND/OR EDUARDO DAYOT and

SUSAN DAYOT, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION, MARK ROCHE WORKERS UNION and WILMA PATACAY,
EILEEN RUFON, LILIA BRIONES, BEATRIZ MANAGAYTAY, DELIA
ARELLANO, ANITA MARCELO, RIO MARIANO, MARISSA SADILI, ESTRELLA
MALLARI, DELIA LAROYA, and DIVINA VILLARBA, respondents
GR Number : 123825
Date : August 31, 1999
Petitioner : Mark Roche International and/or Eduardo Dayot, and Susan Dayot
Respondent : Mark Roche Workers Union, and Wilma Patacay, Eileen Rufon, Lilia
Briones, Beatriz Managaytay, Delia Arellano, Anita Marcelo, Rio Mariano,
Marissa Sadili, Estrella Mallari, Delia Laroya and Divina Villarba
Ponente : Bellosillo, J.
Facts
1. Petitioners Eduardo Dayot and Susan Dayot were President and Vice President, respectively, of their
co-petitioner Mark Roche International, a corporation engaged in the garments business. Private
respondents were employed as sewers of MRI.
2. On different dates private respondents filed separate complaints for underpayment of wages and non-
payment of overtime pay against petitioners.
3. Private respondents alleged that they usually worked eleven (11) to twelve (12) hours daily, except on
Mondays during which they worked eight (8) hours, and were paid wages on a piece-rate basis
amounting to P450.00 to P600.00 per week.
4. They likewise asserted that sometime in 1992 they were unable to avail of their SSS benefits, as they
found out, the company did not remit their contributions to the SSS.
5. On 11 October 1992 private respondents sought the assistance of a labor organization which helped
them organize the Mark Roche Workers Union.
6. On 14 October 1992 they registered the union with DOLE-NCR and on the same date filed a Petition
for Certification Election before the Med-Arbitration Board.
7. On 27 October 1992 petitioners received a notice of hearing of the petition.
8. Apparently irked by the idea of a union within the company, petitioners ordered private respondents to
withdraw the petition and further threatened them that should they insist in the organization of a union
they would be dismissed. Unfazed, private respondents refused.
9. On 29 October 1992 they were discharged from work.
10. On 30 October 1992 private respondents amended their earlier complaints to include as additional
causes of action their illegal dismissal, unfair labor practice, non-payment of 13th month pay,
underpayment for legal holidays, and for damages.
11. Petitioners countered that private respondents were not dismissed from work but voluntarily
abandoned their jobs thereby paralyzing company operations.
12. Petitioners contended that private respondents incurred numerous absences without prior notice and
clearance from their superiors as evidenced by several company memos sent to them.
13. It was only later that petitioners learned that private respondents’ absences were due to their
preoccupation with the organization of a labor union.
14. On 3 March 1993 the Labor Arbiter rendered his decision declaring as illegal the constructive
dismissal of private respondents.
Issue
Whether or not NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in
sustaining the Labor Arbiter by declaring private respondents as having been constructively dismissed
from their jobs

Held
Abandonment, as a just and valid ground for dismissal, means the deliberate and unjustified refusal
of an employee to resume his employment.
The burden of proof is on the employer to show an unequivocal intent on the part of the employee to
discontinue employment. There must be a concurrence of both the intention to abandon and some
overt act from which it can be deducted that the employee has no more intention to resume his work.
These are not obtaining in the instant case. No overt act was established by petitioners from which to
infer the clear intention of private respondents to desist from their employment.
The company memos submitted by petitioner could not be the basis of such intention since they
referred to absences incurred by private respondents long before their dismissal.
On the contrary, there is ample proof showing that private respondents were dismissed from their
jobs for their refusal to withdraw their petition for certification election filed before the DOLE.
The dismissal of private respondents was not a constructive dismissal but an illegal dismissal, and
this is where both the NLRC and the Labor Arbiter erred.
Constructive dismissal or a constructive discharge has been defined as a quitting because continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in
rank and a diminution in pay.
In the instant case, private respondents were not demoted in rank nor their pay diminished
considerably. They were simply told without prior warning or notice that there was no more work for
them.
Evidently it was the filing of the petition for certification election and organization of a union within the
company which led petitioners to dismiss private respondents and not petitioners' allegations of
absence or abandonment by private respondents.
The formation of a labor union has never been a ground for valid termination, and where there is an
absence of clear, valid and legal cause; the law considers the termination illegal.
The Court finds that private respondents were illegally dismissed - not merely illegally constructively
dismissed.

Student No. : 2011-0118
Case Title : PHILIPPINE WIRELESS INC. (Pocketbell) and/or JOSE LUIS

SANTIAGO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and
GOLDWIN LUCILA, respondents
GR Number : 112963
Date : July 20, 1999
Petitioner : Philippine Wireless Inc. (Pocketbell) and/or Jose Luis Santiago
Respondent : NLRC, and Goldwin Lucila
Ponente : Pardo, J.
Facts
1. On January 8, 1976, petitioner hired respondent Goldwin Lucila as operator/encoder.
2. On January 7, 1979, he was promoted as Head Technical and Maintenance Department of the
Engineering Department.
3. On September 11, 1987, he was promoted as Supervisor, Technical Services of the same
department.
4. On October 1, 1990, he was again promoted as Superintendent, Project Management.
5. On December 28, 1990, he tendered his resignation.
6. On December 3, 1991, he filed with the Arbitration Branch, National Labor Relations Commission, a
complaint for illegal/constructive dismissal.
7. He alleged that he was constructively dismissed inasmuch as his promotion from Supervisor,
Technical Services to Superintendent, Project Management is demeaning, illusory and humiliating.
8. The basis of his allegation was the fact that he was not given any secretary, assistant and/or
subordinates.
9. On June 29, 1992, labor arbiter rendered a decision declaring that respondent actually resigned and
dismissed the complaint for lack of merit.
10. On June 15, 1993, public respondent NLRC reversed the findings of the labor arbiter, and ordered
respondent’s reinstatement with back wages or separation pay.
11. On August 27, 1993, petitioners filed a motion for reconsideration which the National Labor Relations
Commission denied for lack of merit in a resolution dated November 16, 1993.
Issue
1. Whether or not petitioner was constructively dismissed from the petitioner’s employment
Held
The Court has held that constructive dismissal is “an involuntary resignation resorted to when continued
employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank and/or a
diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes
unbearable to the employee.”
In this particular case, respondent voluntarily resigned from his employment. He was not pressured into
resigning.
Voluntary resignation is defined as the act of an employee who “finds himself in a situation where he
believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has no
other choice but to disassociate himself from his employment.”
Respondent considered his transfer/promotion as a demotion due to the fact that he had no support staff
to assist him in his work and whom he could supervise.
There is no demotion where there is no reduction in position, rank or salary as a result of such transfer.
In fact, respondent Goldwin Lucila was promoted three times from the time he was hired until his
resignation from work.

Student No. : 2011-0118
Case Title : PHILIPPINE JAPAN ACTIVE CARBON CORPORATION and

TOKUICHI SATOFUKA, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION and OLGA S. QUIÑANOLA, respondents
GR Number : 83239
Petitioner : Philippine Japan Active Carbon Corporation and Tokuichi Satofuka
Respondent : NLRC, and Olga S. Quiñanola
Ponente : Grino-Aquino, J.
Facts
1. Quiñanola has been employed as Assistant Secretary/Export Coordinator in petitioner corporation
since January 19, 1982.
2. She was promoted on May 20, 1983 to the position of Executive Secretary to the Executive Vice
President and General Manager.
3. On May 31, 1986, for no apparent reason at all and without prior notice to her, she was transferred to
the Production Department as Production Secretary, swapping positions with Ester Tamayo.
4. Although the transfer did not amount to a demotion because her salary and workload remained the
same, she believed otherwise so she rejected the assignment and filed a complaint for illegal
dismissal.
5. The Labor Arbiter found, on the basis of the evidence of both parties, that the transfer would amount
to constructive dismissal hence, her refusal to obey the transfer order was justified.
6. Judgment is rendered declaring Quiñanola's dismissal illegal and for respondents to reinstate her to
her former position.
7. Upon appeal to the NLRC, the Commission approved the Labor Arbiter's decision.
8. The employer filed a petition for review.
Issue
2. Whether or not the decisions of the Labor Arbiter and of the NLRC are tainted with grave abuse of
discretion in finding that the private respondent was constructively and illegally dismissed as a result
of her transfer even if she would have received the same salary rank, rights and privileges
Held
Quiñanola argued that she was dismissed without due process because she was not given the
opportunity to be heard concerning the causes of her transfer.
A constructive discharge is defined as: "A quitting because continued employment is rendered
impossible, unreasonable or unlikely; as, an offer involving a demotion in rank and a diminution in pay."
In this case, Quiñanola's assignment as Production Secretary of the Production Department was not
unreasonable as it did not involve a demotion in rank or a change in her place of work, nor a diminution in
pay, benefits, and privileges. It did not constitute a constructive dismissal.
It is the employer's prerogative, based on its assessment and perception of its employees' qualifications,
aptitudes, and competence, to move them around in the various areas of its business operations in order
to "ascertain where they will function with maximum benefit to the company.
An employee's right to security of tenure does not give him such a vested right in his position as would
deprive the company of its prerogative to change his assignment or transfer him where he will be most
useful.
When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a
demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee may not
complain that it amounts to a constructive dismissal.
The Court rejects the petitioner's contention that the private respondent's absence from work on June 2 to
June 3, 1986 constituted an abandonment of her job in the company resulting in the forfeiture of the
benefits due her.

While she was guilty of insubordination for having refused to move out of her position, dismissal from the
service would be a punishment for it, as her complaint for illegal dismissal was filed in good faith.
The decision of the NLRC insofar as it orders the petitioner to reinstate the private respondent is affirmed,
but she shall be reinstated to her position as Production Secretary of the Production Department of
petitioner's corporation without loss of seniority rights and other privileges.

Student No. : 2011-0118
Case Title : PHILIPPINE AIRLINES, INC., petitioner, vs. NATIONAL LABOR

RELATIONS COMMISSION (2nd Division), LABOR ARBITER JOSE DE VERA,
and EDILBERTO CASTRO, respondents
GR Number : 114307
Date : July 8, 1998
Petitioner : Philippine Airlines, Inc.
Respondent : NLRC Second Division, Labor Arbiter Jose de Vera, and Edilberto
Casto
Ponente : Romero, J.
Facts
1. Private respondent Edilberto Castro was hired as manifesting clerk by petitioner.
2. On March 12, 1984, respondent, together with co-employee Arnaldo Olfindo, were apprehended by
government authorities while about to board a flight en route to Hongkong in possession of P39,
850.00 and P6, 000.00 respectively, in violation of Central Bank (CB) Circular 265, as amended by
CB Circular 383.
3. When informed of the incident, PAL required respondent to explain within 24 hours why he should not
be charged administratively.
4. Upon failure of the latter to submit his explanation thereto, he was placed on preventive suspension
effective March 27, 1984 for grave misconduct.
5. Respondent, through PALEA, sought not only the dismissal of his case but likewise prayed for his
reinstatement, to which appeal, PAL failed to make a reply thereto.
6. Three years and six months after his suspension, PAL issued a resolution finding respondent guilty of
the offense charged but nonetheless reinstated the latter explaining that the period within which he
was out of work shall serve as his penalty for suspension.
7. Upon his reinstatement, respondent filed a claim against PAL for back wages and salary increases
granted under the CBA covering the period of his suspension which the latter, however, denied on
account that under the existing CBA, an employee under suspension is not entitled to the CBA salary
increases granted during the period covered by his penalty.
8. Judgment is rendered limiting the suspension imposed upon the complainant to one month, and the
respondent to pay complainant his salaries, benefits, and other privileges from April 26, 1984 up to
September 18, 1987 and to grant complainant his salary increases accruing during the period
aforesaid.
Issue
1. Whether or not an employee who has been preventively suspended beyond the maximum 30-day
period is entitled to back wages and salary increases granted under the CBA during his period of
suspension
Held
Preventive suspension is a disciplinary measure for the protection of the company’s property pending
investigation of any alleged malfeasance or misfeasance committed by the employee.
Sections 3 and 4, Rule XIV of the Omnibus Rules Implementing the Labor Code respectively provides
that the employer may place the worker concerned under preventive suspension if his continued
employment poses a serious and imminent threat to the life or property of the employer or of his co-
workers, and that no preventive suspension shall last longer than 30 days. The employer shall thereafter
reinstate the worker in his former or in a substantially equivalent position or the employer may extend the
period of suspension provided that during the period of extension, he pays the wages and other benefits
due to the workers
It is undisputed that the period of suspension of respondent lasted for three (3) years and six months.

PAL, therefore, committed a serious transgression when it manifestly delayed the determination of
respondent’s culpability in the offense charged. PAL stated lamely in its petition that “due to numerous
administrative cases pending at that time, the Committee inadvertently failed to submit its
recommendation to management.”
The rules clearly provide that a preventive suspension shall not exceed a maximum period of 30 days,
after which period, the employee must be reinstated to his former position. If the suspension is otherwise
extended, the employee shall be entitled to his salaries and other benefits that may accrue to him during
the period of such suspension. The provisions of the rules are explicit and direct; hence, there is no
reason to further elaborate on the same.
PAL faults the Labor Arbiter and the NLRC for allegedly equating preventive suspension as remedial
measure with suspension as penalty for administrative offenses.
A distinction between the two measures was clearly elucidated by the Court in the case of Beja Sr. v. CA.
Imposed during the pendency of an administrative investigation, preventive suspension is not a penalty in
itself. It is merely a measure of precaution so that the employee who is charged may be separated, for
obvious reasons, from the scene of his alleged misfeasance while the same is being investigated.
While the former may be imposed on a respondent during the investigation of the charges against him,
the latter is the penalty which may only be meted upon him at the termination of the investigation or the
final disposition of the case.


Student No. : 2011-0118
Case Title : GLOBE-MACKAY CABLE AND RADIO CORPORATION, petitioner, vs.

NLRC and IMELDA SALAZAR, respondents
GR Number : 82511
Petitioner : Globe-Mackay Cable and Radio Corporation
Respondent : NLRC, and Imelda Salazar
Facts
1. In May 1982, Salazar was employed by GMCR as general systems analyst. Also employed as
manager for technical operations' support was Delfin Saldivar with whom Salazar was allegedly very
close.
2. Sometime in 1984, GMCR, prompted by reports that company equipment and spare parts worth
thousands of dollars under the custody of Saldivar were missing, caused the investigation of the
latter's activities. The report indicated that Saldivar had entered into a partnership with Richard
Yambao, owner and manager of Elecon Engineering Services, a supplier of petitioner often
recommended by Saldivar.
3. It likewise appeared that Salazar violated company regulations by involving herself in transactions
conflicting with the company's interests. Evidence showed that she signed as a witness to the articles
of partnership between Yambao and Saldivar.
4. Consequently, GMCR placed Salazar under preventive suspension for one month, effective October
9, 1984, thus giving her thirty days within which to, explain her side. But instead of submitting an
explanation, Salazar filed a complaint against petitioner for illegal suspension, which she
subsequently amended to include illegal dismissal, after GMCR notified her in writing that she was
considered dismissed in view of her inability to refute and disprove these findings.
5. After due hearing, the Labor Arbiter ordered petitioner company to reinstate Salazar to her former or
equivalent position and to pay her full back wages and other benefits she would have received were it
not for the illegal dismissal. She was also awarded payment for moral damages.
6. On appeal, NLRC affirmed the aforesaid decision with respect to the reinstatement of private
respondent but limited the back wages to a period of two years and deleted the award for moral
damages.
Issue
1. Whether or not NLRC committed grave abuse of discretion in holding that the suspension and
subsequent dismissal of private respondent were illegal
Held
The inestigative findings, which pointed to Saldivar's acts in conflict with his position as technical
operations manager, necessitated immediate and decisive action on any employee closely, associated
with Saldivar.
Under such circumstances, preventive suspension was the proper remedial recourse available to the
company pending Salazar's investigation.
Preventive suspension does not signify that the company has adjudged the employee guilty of the
charges she was asked to answer and explain. Such disciplinary measure is resorted to for the protection
of the company's property pending investigation any alleged malfeasance or misfeasance committed by
the employee.
Thus, it is not correct to conclude that GMCR had violated Salazar's right to due process when she was
promptly suspended.
The fault lay with Salazar when she ignored petitioner's memorandum giving her ample opportunity to
present her side to the management. Instead, she went directly to the Labor Department and filed her

complaint for illegal suspension without giving her employer a chance to evaluate her side of the
controversy.
But while the Court agrees with Salazar's preventive suspension, the Court holds that her separation from
employment was not for cause.
There being no evidence to show an authorized, much less a legal, cause for the dismissal of private
respondent, she had every right, not only to be entitled to reinstatement, but as well to full back wages.
The intendment of the law in prescribing the twin remedies of reinstatement and payment of back wages
is, in the former, to restore the dismissed employee to her status before she lost her job, and in the latter,
to give her back the income lost during the period of unemployment.
In the first place the wording of the Labor Code is clear and unambiguous: An employee who is unjustly
dismissed from work shall be entitled to reinstatement and to his full back wages.
The assailed resolution of NLRC is affirmed. GMCR is ordered to reinstate Imelda Salazar and to pay her
back wages equivalent to her salary for a period of two years only.

Student No. : 2011-0118
Case Title : KWIKWAY ENGINEERING WORKS, petitioner, vs. NLRC AND

ROSALINDA VARGAS, respondents
GR Number : 85014
Petitioner : Kwikway Engineering Works
Respondent : NLRC and Rosalinda Vargas
Ponente : Medialdea, J.
Facts
1. Petitioner is a corporation engaged in the business of fabrication of machine parts and allied works.
2. Vargas was formerly employed by petitioner as bookkeeper and secretary of its Cubao branch. As
bookkeeper, it was her duty to fill up the check vouchers and indicate therein the name of the
customer agent and the amount payable to each before they are presented to the agents for signing.
3. The newly designated branch manager of petitioner's Cubao branch discovered that several blank
vouchers already contained the signatures of the mechanic agents. Thus, the branch manager
confronted the branch cashier in charge of the vouchers, Marina Corpus, concerning the irregularity.
4. Corpus explained that Vargas was aware of this practice. When asked for an explanation about the
matter, Vargas stated that the aforesaid procedure has been the practice in that office since the time
of the former branch manager who had knowledge thereof. This was however later denied by the
former manager of the Cubao branch office.
5. Vargas and Corpus were placed under preventive suspension for an indefinite period of time on the
ground of loss of trust and confidence.
6. Soon, Vargas went to the head office upon instruction of petitioner, where she was informed of the
result of the investigation. Petitioner offered her a chance to resign with separation pay, which she
accepted.
7. However, the Labor Arbiter rendered a decision directing the reinstatement of respondent Vargas to
her former position with back wages.
8. Not satisfied with the decision, petitioner appealed to NLRC. NLRC affirmed the decision of the Labor
Arbiter.
Issue
1. Whether or not the dismissal of respondent Vargas was for a just and valid cause
Held
Petitioner contends that the nature of the position of Vargas, which involves the preparation of vouchers
and handling of funds involves trust and confidence. It also maintains that Vargas’s acts of dishonesty as
well as her active participation in violating and infringing company accounting procedure which allowed
the cashier to personally misappropriate sums of money provide sufficient basis for dismissing
respondent.
Petitioner further submits that respondent Vargas was aware that her cashier Corpus was committing acts
of dishonesty and misappropriation of company funds but she did not report the matter to her superiors in
the company. Petitioner argues that the actuations of respondent Vargas were in violation of the
company's code of conduct, which is punishable by dismissal.
The rule is settled that if there is sufficient evidence to show that the employee has been guilty of breach
of trust or that his employer has ample reason to distrust him, the labor tribunal cannot justly deny to the
employer the authority to dismiss such employee
More so in the case of supervisors or personnel occupying positions of responsibility, loss of trust justifies
termination
Vargas's position involves a high degree of responsibility requiring trust and confidence. Her position
carries with it the duty to observe proper company procedures in the fulfillment of her job as it relates
closely to the financial interests of the company.

Despite the knowledge of the cashier's dishonesty, as a result of her failure to fill up the vouchers
properly, Vargas still continued not to comply with the company operating procedure knowing fully well
that her negligence is causing an opportunity for the cashier to commit fraud upon the company.
Further, there was no effort on the part of respondent Vargas to report to petitioner the anomalies that are
being committed by the cashier.
Although it may be true that respondent Vargas has no direct participation in the cashier's acts of
dishonesty concerning the funds of the office, Vargas’s non-performance of her duties is sufficient to
breach the trust and confidence of her employer.
The Court finds that the dismissal of respondent Vargas was for a just cause. For failure of the employer
to comply with the requirements of due process in terminating the employees service, however, it shall be
liable to indemnify the employee payment of damages.

Student No. : 2011-0118
Case Title : IMELDA DARVIN, petitioner, vs. COURT OF APPEALS and PEOPLE OF
THE PHILIPPINES, respondents
GR Number : 125044
Petitioner : Imelda Darvin
Respondent : Court of Appeals, and People of the Philippines
Facts
1. Macaria Toledo met Imelda Darvin in the latter's residence in Cavite, through the introduction of their
common friends, Florencio Jake Rivera and Leonila Rivera.
2. Darvin allegedly convinced Toledo that by giving her P150,000.00, the latter can immediately leave
for the United States without any appearance before the U.S. embassy.
3. Toledo gave Darvin the amount of P150,000.00, as evidenced by a receipt stating that the amount of
P150,000.00 was for U.S. Visa and Air fare.
4. After receiving the money, Darvin assured Toledo that she can leave within one week. However,
when after a week, there was no word from Darvin, Toledo went to her residence to inquire about any
development, but could not find Darvin.
5. Toledo filed a complaint with the Bacoor Police Station against Imelda Darvin. Upon further
investigation, a certification was issued by POEA stating that Darvin is neither licensed nor authorized
to recruit workers for overseas employment.
6. Darvin was then charged for estafa and illegal recruitment by the Office of the Provincial Prosecutor
of Cavite.
7. Cavite RTC found Darvin guilty of the crime of simple illegal recruitment but acquitted her of the crime
of estafa.
8. The Court of Appeals affirmed the decision of the trial court.
Issue
1. Whether Darvin engaged in recruitment activities, as defined under the Labor Code
Held
To uphold the conviction of Darvin, two elements need to be shown: (1) the person charged with the
crime must have undertaken recruitment activities; and (2) the said person does not have a license or
authority to do so.
It is not disputed that Darvin does not have a license or authority to engage in recruitment activities.
It must be shown that Darvin gave Toledo the distinct impression that she had the power or ability to send
her abroad for work such that the latter was convinced to part with her money in order to be so employed.
The Court finds no sufficient evidence to prove that Darvin offered a job to private respondent. It is not
clear that accused gave the impression that she was capable of providing the private respondent work
abroad.
The claim of the accused that the P150,000.00 was for payment of Toledo’s air fare and US visa and
other expenses cannot be ignored because the receipt for the P150,000.00 stated that it was "for Air Fare
and Visa to USA."
Aside from the testimony of Toledo, there is nothing to show that Darvin engaged in recruitment activities.
This Court can hardly rely on the bare allegations of Toledo that she was offered by Darvin employment
abroad, nor on mere presumptions and conjectures, to convict the latter.
The appeal is granted and the decision of the Court of Appeals is reversed and set aside. Imelda Darvin
is acquitted on ground of reasonable doubt.

Student No. : 2011-0118
Case Title : PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. LOMA GOCE y

OLALIA, DAN GOCE and NELLY D. AGUSTIN, accused. NELLY D. AGUSTIN,
accused-appellant
GR Number : 113161
Date : August 29, 1995
Petitioner : People of the Philippines
Respondent : Nelly D. Agustin
Ponente : Regalado, J.
Facts
1. An information for illegal recruitment committed by a syndicate and in large scale was filed
against spouses Dan and Loma Goce and Nelly Agustin in RTC Manila.
2. A warrant of arrest was issued against the three accused but not one of them was arrested.
The trial court ordered the case archived but it issued a standing warrant of arrest against the
3. On
accused.
learning of the whereabouts of the accused, one of the offended parties, Rogelio Salado,
requested for a copy of the warrant of arrest. Eventually, Nelly Agustin was apprehended by
the Parañaque police.
4. Four of the complainants testified for the prosecution.
5. Representing herself as the manager of the Clover Placement Agency, Agustin showed
Salado a job order as proof that he could readily be deployed for overseas employment. He
learned that he had to pay P5,000.00 as processing fee, which amount he gave. He was
6. Ramona
issued theSalado,
corresponding
wife of receipt.
Rogelio, was persuaded by Agustin to apply as a cutter/sewer in
Oman so that she could join her husband. Encouraged by Agustin's promise that she and her
husband could live together while working in Oman, she instructed her husband to give
Agustin P2,000.00 for each of them as placement fee.
7. Dionisio Masaya applied for a job in Oman with the Clover Placement Agency at Parañaque,
the agency's former office address. Masaya gave Dan Goce P1,900.00 as an initial down
payment for the placement fee, and in September of that same year, he gave an additional
P10,000.00. He was issued receipts for said amounts and was advised to go to the
placement office once in a while to follow up his application.
8. Ernesto Alvarez was offered a job by Agustin as an ambulance driver at the Royal Hospital in
Oman. Alvarez gave an initial amount of P3,000.00 as processing fee to Agustin at the latter's
residence. In the same month, he gave another P3,000.00, this time in the office of the
9. Only
placement
Agustin
agency.
testified for the defense. She asserted that Dan and Loma Goce were her
neighbors in Parañaque and that they were licensed recruiters and owners of the Clover
10. Denying
Placement any
Agency.
participation in the illegal recruitment and maintaining that the recruitment was
perpetrated only by the Goce couple, Agustin denied any knowledge of the receipts
presented by the prosecution..
11. The trial court rendered judgment finding herein appellant guilty as a principal in the crime of
illegal recruitment in large scale.
Issue
1) Whether or not Agustin committed illegal recruitment and placement

Held
Agustin is accused of violating Articles 38 and 39 of the Labor Code. Article 38 of the Labor Code
provides that any recruitment activity, including the prohibited practices enumerated in Article 34 of said
Code, undertaken by non-licensees or non-holders of authority shall be deemed illegal and punishable
under Article 39 thereof.
The same article further provides that illegal recruitment shall be considered an offense involving
economic sabotage if any of these qualifying circumstances exist, namely, (a) when illegal recruitment is
committed by a syndicate; or (b) when illegal recruitment is committed in large scale, i.e., if it is committed
against three or more persons individually or as a group.
All the accused in this case were not authorized to engage in any recruitment activity, as evidenced by a
certification issued by POEA.
It is Agustin’s defensive theory that all she did was to introduce complainants to the Goce spouses.
Under said Code, recruitment and placement refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or
advertising for employment, locally or abroad, whether for profit or not; provided, that any person or entity
which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed
engaged in recruitment and placement.
On the other hand, referral is the act of passing along or forwarding of an applicant for employment after
an initial interview of a selected applicant for employment to a selected employer, placement officer or
bureau.
She indeed further committed acts constitutive of illegal recruitment. All four prosecution witnesses
testified that it was Agustin whom they initially approached regarding their plans of working overseas. It
was from her that they learned about the fees they had to pay, as well as the papers that they had to
submit.
Being an employee of the Goces, it was therefore logical for Agustin to introduce the applicants to said
spouses, they being the owners of the agency. As such, appellant was actually making referrals to the
agency of which she was a part. She was therefore engaging in recruitment activity.
There is illegal recruitment when one gives the impression of having the ability to send a worker abroad. It
is undisputed that Agustin gave complainants the distinct impression that she had the power or ability to
send people abroad for work such that the latter were convinced to give her the money she demanded in
order to be so employed.
The decision of the trial court is affirmed.

Student No. : 2011-0118
Case Title : PEOPLE OF THE PHILIPPINES, petitioner, vs. HON. DOMINGO PANIS,
Presiding Judge of the Court of First Instance of Zambales & Olongapo City,
Branch III and SERAPIO ABUG, respondents
GR Number : L-58674-77
Petitioner : People of the Philippines
Respondent : Domingo Panis, and Serapio Abug
Ponente : Cruz, J.
Facts
Four informations were filed alleging that Serapio Abug, without first securing a license from the
Ministry of Labor as a holder of authority to operate a fee-charging employment agency, operated a
private fee charging employment agency by charging fees and expenses and promising employment in
Saudi Arabia to four separate individuals, in violation of Article 16 in relation to Article 39 of the Labor
Code.
Abug filed a motion to quash on the ground that the informations did not charge an offense because
he was accused of illegally recruiting only one person in each of the four informations.
Under the proviso in Article 13(b), he claimed, there would be illegal recruitment only whenever two or
more persons are in any manner promised or offered any employment for a fee.”
Denied at first, the motion was reconsidered and finally granted by the trial court.
Issue
Whether or not private respondent is being prosecuted under Article 39 in relation to Article 16 of the
Labor Code; hence, Article 13(b) is not applicable.
Held
Article 13(b) of P.D. 442: Recruitment and placement refers to any act of canvassing, enlisting,
contracting, transporting, hiring, or procuring workers, and includes referrals, contract services, promising
or advertising for employment, locally or abroad, whether for profit or not: Provided, That any person or
entity which, in any manner, offers or promises for a fee employment to two or more persons shall be
deemed engaged in recruitment and placement.
The view of respondents is that to constitute recruitment and placement, all the acts mentioned in this
article should involve dealings with two or more persons as an indispensable requirement.
On the other hand, the petitioner argues that the requirement of two or more persons is imposed only
where the recruitment and placement consists of an offer or promise of employment to such persons and
always in consideration of a fee. The other acts mentioned in the body of the article may involve even
only one person and are not necessarily for profit.
The proviso was intended neither to impose a condition on the basic rule nor to provide an exception
thereto but merely to create a presumption.
The presumption is that the individual or entity is engaged in recruitment and placement whenever he or it
is dealing with two or more persons to whom, in consideration of a fee, an offer or promise of employment
is made in the course of the canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring of
workers.
workers.
Any of the acts mentioned in the basic rule in Article 13(b) would constitute recruitment and placement
even if only one prospective worker is involved.
The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a
promise or offer of employment to two or more prospective workers, the individual or entity dealing with
them shall be deemed to be engaged in the act of recruitment and placement.

The interpretation here adopted should give more force to the campaign against illegal recruitment and
placement, which has victimized many Filipino workers seeking a better life in a foreign land, and
investing hard- earned savings or even borrowed funds in pursuit of their dream, only to be awakened to
the reality of a cynical deception at the hands of their own countrymen.
The orders of the trial court are set aside and the four informations against the private respondent are
reinstated.

Student No. : 2011-0118
Case Title : CAROLINA CASTILLO, petitioner, vs. NATIONAL LABOR RELATIONS

COMMISSION and PHILIPPINE COMMERCIAL & INTERNATIONAL BANK,
respondents
GR Number : 104319
Date : June 17, 1999
Petitioner : Carolina Castillo
Respondent : NLRC, and Philippine Commercial and International Bank
Ponente : Gonzaga-Reyes, J.
Facts
Petitioner was an employee since April 1981 of PCIB as Foreign Remittance Clerk from 1987 to
January 31, 1988 in the private respondent bank’s Ermita branch.
On January 12, 1988, Faisal Al Shahab, a Jordanian national, went to respondent bank’s Ermita
branch to claim a foreign remittance in the amount of US$2,000.00. Shahab paid P450.00 as
commission charges as computed by petitioner. Upon re-computation, the correct amount of the charges
amounted to only P248.75.
On January 13, 1988, petitioner received a Memorandum: In line with the Bank’s policy on flexibility
employee development.
Another Memorandum dated January 13, 1988 was sent to petitioner reassigning her temporarily as
Remittance Clerk-Inquiry.
On January 21, 1988, petitioner filed with the NCR Arbitration Branch a complaint-affidavit for illegal
dismissal asking for her reinstatement as Foreign Remittance Clerk
Subsequently, petitioner received allegedly under protest, a Memorandum dated January 25, 1988
which states that as Remittance Clerk-Inquiry, her specific duties and responsibilities will be confined to
handling of inquiring by phone, by walk-in clients over the counter and to assist the FX Supervisor-Inquiry
& Investigation in verifying inquiries of correspondent banks, agencies, other banks and branches.
She was instructed further to desist from performing functions of other staff positions particularly
those of the Remittance Clerk-POP/Collection Items.
On January 25, 1988, Shahab filed a formal complaint with the branch manager of the respondent
bank regarding the over-charging of commission on foreign remittances, specifically mentioning petitioner
as the one who attended to his withdrawals. The branch manager decided to pursue further investigation
on the matter.
On February 2, 1988, branch manager Gilbert Marquez issued a Memorandum to petitioner requiring
her to explain within seventy-two hours why no disciplinary action should be taken against her. Petitioner
did not submit a written explanation. Respondent bank deferred further action on the matter.
In the meantime, trial ensued in the case for illegal dismissal earlier filed by petitioner and, the Labor
Arbiter rendered a decision ruling that petitioner was “constructively dismissed from her employment
when she was transferred to the position of Remittance Clerk-Inquiry from her position of Foreign
Remittance Clerk.
On appeal, NLRC set aside the labor arbiter’s decision. It ruled that there was no demotion because
the position to which she was being reassigned belongs to the same job level as her former position and
both positions have the same rate of compensation.
Issue
Whether or not NLRC erred in ruling that petitioner was not constructively and illegally dismissed

Held
PCIB alleged that the reassignment of petitioner could not result in demotion as both positions of Foreign
Remittance Clerk for Payment Order/Collection and Foreign Remittance Clerk for Inquiry are given the
same weight in terms of duties and responsibilities and there was no diminution in rank, wages and other
benefits.
NLRC argued that it is the prerogative of management to transfer an employee from one office to another
within the business establishment provided there is no demotion in rank or diminution of his salary,
benefits and other privileges.
One of the prerogatives of management is the right to transfer employees in their work station. This
Court has consistently recognized and upheld the prerogative of management to transfer an employee
from one office to another within the business establishment, provided that there is no demotion in rank or
a diminution of his salary, benefits and other privileges.
In case of a constructive dismissal, the employer has the burden of proving that the transfer and demotion
of an employee are for valid and legitimate grounds, i.e., that the transfer is not unreasonable,
inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his
salaries, privileges and other benefits. Where the employer fails to overcome this burden of proof, the
employee’s demotion shall no doubt be tantamount to unlawful constructive dismissal.
In this case, NLRC upheld PCIB’s contention that the remittance clerk payment order/collection item is
given the same weight in terms of duties and responsibilities as that of a remittance clerk inquiry. It was
established that both positions are remittance clerks under level S-S III and that these positions are of co-
equal footing, co-important and of the same level of authority and that the transfer did not entail any
reduction of wages and other benefits.
The respondent Commission sustained the position of the respondent bank that the duties of the second
position include not only receiving the complaints of clients and the scope is wider in the sense that she
can get access to some other records which are not being prepared by her and which also entitle her to
communicate directly with higher officers of the bank.
In her position paper, Castillo claims that her transfer to the position of Remittance Clerk-Inquiry was a
demotion. This lacks factual basis since the transfer did not entail any reduction of wages and other
benefits. As a matter of fact, had she accepted her new position, she would have assumed a bigger
responsibility, a big departure from her former position where she merely did routine processing work.
Neither did Ms. Castillo’s transfer result in constructive dismissal since she was transferred to a position
which would have required her to do much more work than before.

Student No. : 2011-0118
Case Title : WESTIN PHILIPPINE PLAZA HOTEL, petitioner, vs. NATIONAL

LABOR RELATIONS COMMISSION (THIRD DIVISION) and LEN RODRIGUEZ,
respondents
GR Number : 121621
Date : May 3, 1999
Petitioner : Westin Philippine Plaza Hotel
Respondent : NLRC Third Division, and Len Rodriguez
Ponente : Quisumbing, J.
Facts
On December 28, 1992, Rodriguez received a memorandum from the management transferring him
from doorman to linen room attendant in the Housekeeping Department effective December 29, 1992.
The position of doorman is categorized as guest-contact position while linen room attendant is a non-
guest contact position.
The transfer was taken because of the negative feedback on the manner of providing service to hotel
guests by Rodriguez.
Instead of accepting his new assignment, he went on vacation leave from December 29, 1992, to
January 16, 1993.
The President of the National Union of Workers in Hotels, Restaurants and Allied Industries
(NUWHRAIN) appealed to management concerning private respondent’s transfer.
Merceditas Santos, petitioner’s director for HRD, clarified that his transfer is merely a lateral
movement and that there was no demotion in rank or pay.
When he reported back to work, he still did not assume his post at the linen room notwithstanding
reminders from HRD and even his union.
Later on, he was given a memorandum asking him to explain in writing why no disciplinary action
should be taken against him for insubordination.
In his reply, he merely questioned the validity of his transfer without giving the required explanation.
On February 16, 1993, petitioner terminated private respondent’s employment on the ground of
insubordination.
Rodriguez filed with the DOLE which later endorsed to the NLRC for appropriate action a complaint
for illegal dismissal against petitioner.
The labor arbiter declared that the dismissal was legal.
On appeal, NLRC reversed the judgment of the labor arbiter. In its decision, it declared that the
intended transfer was in the nature of a disciplinary action and that there was no just cause in dismissing
private respondent.
Issue
Whether or not the transfer of Rodriguez is a valid exercise of petitioner’s management prerogative
Held
The Court has recognized and upheld the prerogative of management to transfer an employee from
one office to another within the business establishment, provided that there is no demotion in rank or
a diminution of his salary, benefits and other privileges.
This is a privilege inherent in the employer’s right to control and manage its enterprise effectively.
An employee’s right to security of tenure does not give him such a vested right in his position as
would deprive the company of its prerogative to change his assignment or transfer him where he will
be most useful.
Petitioner is justified in reassigning private respondent to the linen room. Petitioner’s right to transfer
is expressly recognized in the collective bargaining agreement between the hotel management and
the employees union as well as in the hotel employees handbook.

The transfer order was issued in the exercise of petitioner’s management prerogative in view of the
several negative reports vis-à-vis the performance of private respondent as doorman. It was a lateral
movement as the positions of doorman and linen room attendant are equivalent in rank and
compensation.
On the issue of dismissal, under Article 282 (a) of the Labor Code, as amended, an employer may
terminate an employment for serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work.
Disobedience to be a just cause for dismissal requires the concurrence of at least two (2) requisites:
(a) the employee’s assailed conduct must have been willful or intentional, the willfulness being
characterized by a wrongful and perverse attitude; and, (b) the order violated must have been
reasonable, lawful, made known to the employee and must pertain to the duties which he has been
engaged to discharge.
In the present case, the willfulness of private respondent’s insubordination was shown by his
continued refusal to report to his new work assignment.
H was repeatedly reminded not only by management but also by his union to report to his work
station but to no avail. His continued refusal to follow a legal order brought on the fit consequence of
dismissal from his position for which management could not be justly faulted. The petition is granted.

Czarina Marta AJ. Vergara
2011-0237
Case Title: AG & P United Rank and File Association vs. NLRC
G.R. No.: G.R. No. 108259
Petitioner: AG&P United Rank and File Association (AG&P Urfa) Reynaldo V. Reyes, Marcelino
Adlit, Quintin Ong III, Teofilo C. Ramos, Felimon R. Valiente, Ma. Magdalena Magalong,
Toribio B. de Leon, Severo C. Balbastro, Julio F. Montano, Conrado D. Mangaran, Jesus
M. Canonigo, Sarah S. dela Pena, Anita A. Caintic, Asuncion L. Cordero, Jaime B.
Sandoval, Oscar O. Gomez, Bonifacio A. Espiritu, Jesus E. Amarante, Ricardo M.
Landayan, Faustino C. San Esteban, Francisco M. Manalo, Roland C. Tupalar, Ireneo T.
Andan, Maria G. Guevarra, Erlina B. Sanchez, Saturnino C. Quinto, Deogenes F.
Senorin, Oscar P. Palattao, Augusto A. Rius, Annie J. Napicol, Cecilia D. Fornaliza,
Ananias S. Cahilig, Constancio R. Pelias, Juanito A. Pimentel, Rolando L. Holgado,
Ramon M. Permicillo
Respondent: National Labor Relations Commission (First Division) and Atlantic Gulf and Pacific
Company of Manila, Inc.
Ponente: J. Mendoza
Facts:
Petitioners are officers and members of the duly certified bargaining agent of the rank and file
employees of the Atlantic Gulf and Pacific Company of Manila, Inc. They declared a strike on September
22, 1987 due to a deadlock in the negotiations for a collective bargaining agreement. Before the
Secretary of Labor and Employment assumed jurisdiction over the dispute, the president of the
respondent company announced the adoption of the company of several cost-cutting measures to
forestall impending financial losses. Among these measures was so called “redundancy program,” which
was implemented on March 1, 1988. The program resulted in the layoff of around 177 employees, some
of whom were officers and members of the petitioner union. The affected employees were given
separation pay equivalent to one month pay for every year of service, for which they signed documents of
waiver.
However, on March 14, 1988, petitioners filed a complaint for unfair labor practice and illegal
dismissal. After trial, Labor Arbiter Mendoza found the complaint to be without merit and accordingly
dismissed it. He found the “redundancy program” necessary for the company’s existence and considered
private respondent’s practice of rehiring or reemploying dismissed employees under the said program as
managerial prerogative. On appeal, the Third Division of the National Labor Relations Commission
reversed the Labor Arbiter’s ruling. It found that the company did not incur losses but instead made
substantial profits from 1983 to 1986. Consequently, it held private respondents guilty of unfair labor
practice and illegal dismissal of petitioners and ordered the company to reinstate the individual petitioners
to their former positions without loss of seniority rights with full back wages, plus ten percent (10%) of the
total award as attorney’s fees. On the other hand, on May 29, 1992, the First Division, to which the case
was reassigned after the reorganization of the NLRC under R.A. No. 6715, reconsidered the decision of
the Third Division and reinstated the decision of the Labor Arbiter. Petitioners then filed a motion for
reconsideration but their motion was denied.
Issue:
Whether or not the petitioners were illegally dismissed by the respondent company and the action by
the latter constitutes unfair labor practice

Held:
No. Article 283 of the Labor Code mentioned retrenchment and redundancy as just causes for the
closing of establishments or reduction of personnel. “Redundancy” exists when the services of an
employee are in excess of what is required by an enterprise. “Retrenchment” on the other hand, is one of
the economic grounds for dismissing employees and is resorted to primarily to avoid or minimize business
losses. Private respondent’s “redundancy program,” while denominated as such, is more precisely termed
“retrenchment” because it is primarily intended to prevent serious business losses. Thus, the Labor Code
recognizes retrenchment as one of the authorized causes for terminating the employer-employee
relationship and the decision to retrench or not to retrench is a management prerogative. In the case at
bar, the company losses were duly established by the financial statements presented by both parties.
Petitioners, on the other hand, contend that the “redundancy program” was actually a union-busting
scheme of management, aimed at removing union officers who had declared a strike. The Court
mentioned that this contention cannot stand in the face of evidence of substantial losses suffered by the
company. Moreover, while it is true that the company rehired or reemployed some of the dismissed
workers, it has been shown that such action was made only as company projects became available and
that this was done in pursuance of the company’s policy of giving preference to its former workers in the
hiring of project employees. The rehiring or reemployment does not negate the imminence of losses,
which prompted private respondent to retrench.
Hence, there is substantial evidence supporting the decision of both the Labor Arbiter and the NLRC
to dismiss the case.

2011-0237
Case Title: ALMODIEL VS. NLRC

G.R. No.: G.R. No. 100641
Date: June 14, 1993
Petitioner: Farle P. Almodiel
Respondent: National Labor Relations Commission (First Division), Raytheon Phils., Inc.,
Ponente: J. Padilla
Facts:
Petitioner Farle P. Almodiel is a certified public accountant who was hired as Cost Accounting
Manager of Raytheon Philippines, Inc. through a reputable placement firm, John Clements Consultants,
Inc. He started as a probationary or temporary employee and was subsequently given regularization. On
January 27, 1989, petitioner was summoned by his immediate boss and in the presence of IRD Manager,
Mr. Rolando Estrada, he was told of the abolition of his position on the ground of redundancy. He pleaded
with management to defer its action or transfer him to another department, but he was told that the
decision of management was final and that the same has been conveyed to the Department of Labor and
Employment. Thus, he was constrained to file the complaint for illegal dismissal before the Arbitration
Branch of the National Capital Region, NLRC, Department of Labor and Employment.
On September 27, 1989, Labor Arbiter Daisy Cauton-Barcelona rendered a decision declaring
that complainant's termination on the ground of redundancy is highly irregular and without legal and
factual basis, thus ordering the respondents to reinstate complainant to his former position with full
backwages without lost of seniority rights and other benefits. However, on March 21, 1991, the NLRC
reversed the decision and directed Raytheon to pay petitioner the total sum of P100,000.00 as separation
pay/financial assistance.
Issue:
Whether or not the petitioner’s termination from employment was just and valid
Held:
Yes. The respondent company was upheld in terminating the petitioner’s employment as it
properly observed the requisites provided in Article 283 of the Labor Code. The petitioner was duly
advised, one (1) month before, of the termination of his employment on the ground of redundancy in a
written notice and was issued a check for P54,863.00 representing separation pay. The Department of
Labor and Employment was also served a copy of the notice of termination of petitioner in accordance
with the pertinent provisions of the Labor Code and the implementing rules.
Petitioner claims that the functions of his position were absorbed by the Payroll/Mis/Finance
Department under the management of Danny Ang Tan Chai, a resident alien without any working permit
from the Department of Labor and Employment as required by law, which according to him was done in
bad faith for he is more qualified than the one who succeed on his position. However, the Court
repeatedly held that redundancy, for purposes of our Labor Code, exists where the services of an
employee are in excess of what is reasonably demanded by the actual requirements of the enterprise.
The characterization of an employee's services as no longer necessary or sustainable, and therefore,
properly terminable, was an exercise of business judgment on the part of the employer. The wisdom or
soundness of such characterization or decision was not subject to discretionary review on the part of the
Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary and malicious
action is not shown. Thus, the fact that the functions of a position were simply added to the duties of
another does not affect the legitimacy of the employer's right to abolish a position when done in the
normal exercise of its prerogative to adopt sound business practices in the management of its affairs.

Furthermore, the petitioner herein held a position which was definitely managerial in character;
Raytheon had a broad latitude of discretion in abolishing his position. An employer has a much wider
discretion in terminating employment relationship of managerial personnel compared to rank and file
employees. The reason obviously is that officers in such key positions perform not only functions which by
nature require the employer's full trust and confidence but also functions that spell the success or failure
of an enterprise.
It is a well-settled rule that labor laws do not authorize interference with the employer's judgment
in the conduct of his business. The determination of the qualification and fitness of workers for hiring and
firing, promotion or reassignment are exclusive prerogatives of management. The Labor Code and its
implementing Rules do not vest in the Labor Arbiters nor in the different Divisions of the NLRC (nor in the
courts) managerial authority. The employer is free to determine, using his own discretion and business
judgment, all elements of employment, "from hiring to firing" except in cases of unlawful discrimination or
those which may be provided by law.
Hence, the termination of petitioner's employment was anchored on a valid and authorized cause
under Article 283 of the Labor Code,

2011-0237
Case Title: ASIAN ALCOHOL CORP VS. NLRC

G.R. No.: G.R. No. 131108
Petitioner: Asian Alcohol Corporation
Respondent: National Labor Relations Commission, and Ernesto A. Carias, Roberto C.
Martinez, Rafael H. Sendon, Carlos A. Amacio, Leandro O. Verayo and Ereneo
S. Tormo,
Ponente: J. Puno
Facts:
The Parsons family, who originally owned the controlling stocks in Asian Alcohol, sell their majority
rights to Prior Holdings, Inc., because of mounting business losses. The Prior Holdings Inc. subsequently
took over its management and operation the next month. Prior Holdings implemented a reorganizational
plan and other cost-saving measures to prevent further losses. One hundred seventeen (117) employees
out of a total workforce of three hundred sixty (360) were separated. Seventy two of them occupied
redundant positions that were abolished due to redundancy, and of these positions, twenty one were held
by union members, which the respondents are members, and fifty one by non-union members.
In October, 1992, the respondents received their individual notices of termination effective November
30, 1992. They were paid the equivalent of one month salary for every year of service as separation pay,
the money value of their unused sick, vacation, emergency and seniority leave credits, thirteenth (13 th)
month pay for the year 1992, medicine allowance, tax refunds, and goodwill cash bonuses for those with
at least ten (10) years of service. All of them executed sworn releases, waivers and quitclaims. They also
all signed sworn statements of conformity to the company retrenchment program except for Verayo and
Tormo. And they all tendered letters of resignation except for Martinez.
However, on December 18, 1992, private respondents filed with the NLRC Regional Arbitration
Branch VI, Bacolod City, complaints for illegal dismissal with a prayer for reinstatement with backwages,
moral damages and attorney’s fees. They alleged that Asian Alcohol used the retrenchment program as
a subterfuge for the union busting. They claimed that they were singled out for separation by reason for
their active participation in the union. They also asseverated that Asian Alcohol was not bankrupt as it
has engaged in an aggressive scheme of contractual hiring.
Acting on the complaints, the Executive Labor Arbiter dismissed the complaints on the ground that
the petitioner has incurred substantial losses prior to the implementation of its retrenchment program as
supported by the documents presented and the pretense is untenable for the retrenchment includes the
termination of service of members and non-union members. On the other hand, the NLRC set aside the
decision of the Labor Arbiter and ordered the petitioner to reinstate the respondents on the ground that
retrenchment and/or redundancy has not been clearly proven for the positions formerly held by the
respondents are now being occupied by casuals.
Issue:
Whether or not the private respondents were illegally dismissed
Held:
No. The right of management to dismiss workers during periods of business recession and to
install labor saving devices to prevent losses is governed by Article 283 of the Labor Code, as amended.
Under Article 283, retrenchment and redundancy are just causes for the employer to terminate the
services of workers to preserve the viability of the business. In exercising its right, however, management
must faithfully comply with the substantive and procedural requirements laid down law and jurisprudence.

In the case at bar, private respondents never contested the veracity of the audited financial
documents proffered by Asian Alcohol before the Executive Labor Arbiter. Neither did they object to their
admissibility. The Court find that the reorganizational plan and comprehensive cost-saving program to
turn the business around were not designed to bust the union of the private respondents. Retrenched
were one hundred seventeen (117) employees. Seventy two (72) of them including private respondents
were separated because their positions had become redundant.
Redundancy exists when the service capability of the work force is in excess of what is
reasonably needed to meet the demands on the enterprise. A redundant position is one rendered
superfluous by any number of factors, such as over hiring of workers, decreased volume of business,
dropping of a particular product line previously manufactured by the company or phasing out of a service
activity priorly undertaken by the business. For the implementation of a redundancy program to be valid,
the employer must comply with the following requisites:
Written notice served on both the employees and the Department of Labor and Employment at least
one month prior to the intended date of retrenchment
Payment of separation pay equivalent to at least one month pay or at least one month pay for every
year of service, whichever is higher;
Good faith in abolishing the redundant positions;
Fair and reasonable criteria in ascertaining what positions are to be declared redundant and
accordingly abolished.
In the case at bar, private respondents failed to proffer any proof that the management acted in a
malicious or arbitrary manner. Absent such proof, the Court has no basis to interfere with the bona fide
decision of management to effect more economic and efficient methods of production.
Hence, the petition is granted. The decision made by the NLRC are annulled and set aside, thus,
the decision of the Labor Arbiter is ordered reinstated.

2011-0237
Case Title: CAFFCO INTERNATIONAL LTD. VS. OFFICE MOLE

G.R. No.: G.R. No. 76966
Petitioner: CAFFCO INTERNATIONAL LIMITED (Philippines Branch) herein represented by
its General-Manager, JOSEPH C.K. TANG
Respondent: Office of the Minister-Ministry of Labor & Employment and the Caffco Employees
Union-Association of Democratic Labor Organizations
Ponente: J. Bidin
Facts:
Petitioner is an export-oriented corporation which is engaged in the manufacture of artificial
flowers, for which it employs 400 employees. Due to losses it was suffering, petitioner contemplated on
the possible retrenchment of employees. It submitted queries to the MOLE Office in La Union, and the
latter replied that it was the company's prerogative to do so. Petitioner informed the MOLE Office that the
Vinyl Section would be phased out due to shortage of orders and stiff competition. Petitioner also filed
with the MOLE, a retrenchment program, for the phase-out of different sections of the company consisting
of 130 employees (four were union officers and more than a majority were union-members). On
September 1, 1986, private respondent union filed a notice of strike for unfair labor practice on the part of
petitioner, consisting of dismissal of union members, discrimination and coercion of employees. The
following day private respondent union staged a strike. The strikers formed stationary pickets, barricading
all gates and entrances, preventing ingress and egress to the company premises.
On September 4, 1986, petitioner filed a petition with the MOLE for the latter to assume
jurisdiction over the strike. It grounded its petition on then Article 264 paragraph 9 of the Labor Code,
which covers labor disputes affecting the national interest. The MOLE assumed jurisdiction over the labor
dispute and directed the workers to return to work, while petitioner was on the other hand directed to
accept the returning workers under the same terms and conditions prevailing previous to the work
stoppage. At the same time, management was told to hold in abeyance its intended retrenchment
measures. It created a committee composed of representatives from the MOLE and submitted a
recommendation of a departmental-wide retrenchment based on the "first in, last out policy" be adopted. It
authorized the petitioner to implement its retrenchment program only with respect to the Vinyl Department
effective December 31, 1986. It further ordered petitioner to award a separation pay to workers adversely
affected by the retrenchment program "equivalent to 1 month pay for every year of service, a fraction of at
least six (6) months being considered one whole year".
Private respondents went on strike anew, barricading and blocking all gates and entrances to and from
the company's premises. As a consequence of the two strikes, petitioner entered into an Agreement with
private respondent which they agreed to get back all retrenched employees of the Vinyl Department,
provided they reported back to work on January 12, 1987. All returning retrenched employees were,
before reporting for work, to return the separation pay received by them from the company. If an
employee did not do so, he was to be considered to have accepted retrenchment.
ISSUE:
Whether or not the separation from service of the workers in petitioner's company is a result of
retrenchment (and not redundancy)

HELD:
The court held that the company was exercising its prerogative of retrenchment in order to
minimize business losses. It is said that when an employer decides to reduce the number of its personnel
in order to prevent further losses, he is exercising his right to retrench employees to prevent losses in his
business operations. On the other hand, where for purposes of economy, a company decides to
reorganize its departments by imposing on employees of one department the duties performed by the
employees of the other department, thus rendering unnecessary the job of the latter, the services of the
employees whose functions are now being performed by the others, may be validly terminated on the
ground of redundancy.
The termination of employees will be valid if the intent of the employer in undertaking the change
in operations is economic in relation either to profitability or protection of its investment. However, if the
employer's intent is to discharge its employees for union activity, or to break an existing union, the
proposed change shall be construed as an unfair labor practice. In the case at bar, the facts disclose that
the change in operation intended by the petitioner, having complied with the three (3) requirements
specified by law, is a valid retrenchment of the employees in the Vinyl Department to prevent losses.
Thus, the retrenchment of the employees in the Vinyl Department was legal, and under the
aforementioned provision of the Labor Code, they are entitled to a separation pay equivalent to one
month pay or at least one-half (1/2) month pay for every year of service, whichever is higher, and not, one
(1) month pay for every year of service, as erroneously ruled by the MOLE in its Order dated December
22, 1987.

2011-0237
Case Title: ESCAREAL VS. NLRC

G.R. No.: G.R. No. 99359
Petitioner: Orlando M. Escareal
Respondent: National Labor Relations Commission, Hon. Manuel P. Asuncion, Labor Arbiter,
Philippine Refining Company, Inc., Cesar Bautista and George B. Ditching
Ponente: J. Davide, Jr.
Facts:
Petitioner was hired by the PRC for the position of Pollution Control Manager effective on 16
September 1977. His employment was made permanent on 16 March 1978. His contract of employment
provides, inter alia, that his “retirement date will be the day you reach your 60th birthday, but there is
provision for voluntary retirement when you reach your 50th birthday.
Sometime in the first week of November 1987, respondent George B. Ditching, who was then
PRC’s Personnel Administration Manager, informed petitioner about the company’s plan to declare the
position of Pollution Control and Safety Manager redundant. Ditching attempted to convince petitioner to
accept the redundancy offer or avail of the company’s early retirement plan. Petitioner refused and
instead insisted on completing his contract as he still had about three and a half (3 ½) years left before
reaching the mandatory retirement age of sixty (60). On 15 June 1988, Jesus P. Javelona, PRC’s
Engineering Department Manager and petitioner’s immediate superior, formally informed the petitioner
that the position of “Safety and Pollution Control Manager will be declared redundant effective at the close
of work hours on 15th July 1988.” Petitioner was also notified that the functions and duties of the position
to be declared redundant will be absorbed and integrated with the duties of the Industrial Engineering
Manager. And as a result thereof, the petitioner “will receive full separation benefits provided under the
PRC Retirement Plan and additional redundancy payment under the scheme applying to employees who
are 50 years old and above and whose jobs have been declared redundant by Management.” Petitioner
protested his dismissal. Subsequently, Bernardo N. Jambalos III sent a Notice of Termination to the
Ministry of Labor and Employment (MOLE) informing them that the petitioner was being terminated on the
ground of redundancy effective 15 August 1988.
Petitioner filed a complaint for illegal dismissal with damages against the respondent. However,
the Labor Arbiter and the NLRC ruled that the dismissal of the petitioner on the ground of redundancy is
valid.
Issue:
Whether or not the dismissal from employment of the petitioner is valid - ignoring the fact that petitioner’s
position was never abolished but was merely given to another employee who was immediately
designated as a replacement
Held:
No. Settled is the rule that redundancy, for purposes of the Labor Code, exists where the services
of an employee are in excess of what is reasonably demanded by the actual requirements of the
enterprise; a position is redundant when it is superfluous, and superfluity of a position or positions may be
the outcome of a number of factors, such as the over hiring of workers, a decreased volume of business
or the dropping of a particular product line or service activity previously manufactured or undertaken by
the enterprise. Redundancy in an employer’s personnel force, however, does not necessarily or even
ordinarily refer to duplication of work. That no other person was holding the same position which the
dismissed employee held prior to the termination of his services does not show that his position had not
become redundant.

In the case at bar, respondent PRC had no valid and acceptable basis to declare the position of
Pollution Control and Safety Manager redundant as the same may not be considered as superfluous by
the express mandate of Article 283 of the Labor Code. Thus, it cannot be gainsaid that the services of the
petitioner are in excess of what is reasonably required by the enterprise.
Otherwise, PRC would not have allowed ten (10) long years to pass before opening its eyes to
that fact; neither would it have increased the petitioner’s salary to P23,100.00 a month effective 1 April
1988. The latter by itself is an unequivocal admission of the specific and special need for the position and
an open recognition of the valuable services rendered by the petitioner. Such admission and recognition
are inconsistent with the proposition that petitioner’s positions are redundant. It cannot also be argued
that the said functions were duplicative, and hence could be absorbed by the duties pertaining to the
Industrial Engineering Manager. If indeed they were, and assuming that the Industrial Engineering
department of the PRC had been created earlier, petitioner’s positions should not have been created and
filled up. If, on the other hand, the department was created later, and there is no evidence to this effect,
and it was to absorb the petitioner’s positions, and then there would be no reason for the unexplained
delay in its implementation, the restructuring then should have been executed long before the salary
increases in petitioner’s favor. That petitioner’s positions were not duplicitous is best evidenced by the
PRC’s recognition of their imperative need thereof, this is underscored by the fact that Miguelito S.
Navarro, the company’s Industrial Engineering Manager, was designated as Pollution Control and Safety
Manager on the very same day of petitioner’s termination.
Hence, the petitioner’s dismissal from employment is without valid cause and should be given his
backwages and other benefits.

2011-0237
Case Title: GUERRERO. VS NLRC

G.R. No.: G.R. No. 119842
Petitioner: Venancio Guerrero, Norberto H. Escullar, Joaquin C. Samson, Emerito C.
Dorado, Ireneo Consignado, Ruperto Refraccio, Antonio Fiesta, Jose M.
Caguicla, Amado Salonga, Constancio Ambrad, Rolando N. Abenio, Rogelio E. Abenio,
Romelito M. Arizobal, Teodoro M. Caamoan, Jr.
Respondent: National Labor Relations Commission, R.O.H. Auto Products Phils., Inc.
and Goeff Kemp
Ponente: J. Puno
Facts:
On March 24, 1992, members of the union in R.O.H. Auto Products Phils., Inc. went on strike. The
petitioners, which are former employees of the company, however, did not participate in the strike.
Respondent company allegedly sustained huge losses as the strike virtually paralyzed its operations
and to prevent further losses, the company proposed to the non-striking employees a "financial
assistance" in exchange for their resignation. It assured them priority in hiring when positions of equal
stature and compensation become available.
On April 24, 1992, the petitioners availed of respondent company's offer. They signed individual Quit
Claim and Release deeds upon receipt of their separation pay. On May 3, 1992, the strike ended. The
operations in respondent company resumed and all the striking employees returned to their posts. The
petitioners offered to re-assume their former positions but respondent company refused to admit
them. Hence, they filed separate complaints for illegal dismissal.
The Labor Arbiter Geobel A. Bartolabac dismissed the complaints for lack of merit. However,
respondents are ordered to pay each complainant an additional financial assistance equivalent to their
one month salary, which was affirmed by the NLRC.
Issue:
Whether or not the petitioners were illegally dismissed when the respondent company refused to
admit them to re-assume their former positions
Held:
Yes. While the law gives an employer the right to terminate the services of its employees to
obviate or to minimize business losses, this right, however, may not be exercised arbitrarily or
whimsically. According to Article 283 of the Labor Code, three requisites must concur in order for
retrenchment to be valid, to wit: (1) necessity of the retrenchment to prevent losses and proof of such
losses; (2) written notice to the employees and to the Department of Labor and Employment at least one
month prior to the intended date of retrenchment; and (3) payment of separation pay equivalent to one
month pay or at least 1/2 month pay for every year or service, whichever is higher.
In the case at bar, the respondent company did not satisfy the legal requirements for valid
retrenchment. First, respondent company did not present sufficient evidence to prove the extent of its
losses. To justify the employees' termination of service, the losses must be serious, actual and real, and
they must be supported by sufficient and convincing evidence. The respondent company alleged that the
strike paralyzed its operations and resulted in the withdrawal of its clients' orders, it failed, however, to
prove its claim with competent evidence which would show that it was indeed suffering from business
losses so serious as would necessitate retrenchment or reduction of personnel. The rule is that not every
loss incurred or expected to be incurred by a company will justify retrenchment. The losses must be

substantial and the retrenchment must be reasonably necessary to avert such losses. It also failed to
prove that retrenchment was necessary to prevent further losses. There is no showing in this case that
respondent company has taken other measures to abate the losses it sustained because of the
strike. Thus, retrenchment must be exercised only as a last resort, considering that it will lead to the loss
of the employees' livelihood. Retrenchment is justified only when all other less drastic means have been
tried and found insufficient. Second, the respondent company did not follow the proper procedure for
retrenchment under Article 283, which is to give written notices to both the employees/petitioners and the
DOLE at least one month prior to the retrenchment. Nevertheless, this requisite is mandatory in nature as
it is intended to protect the workers’ right to security of tenure. And last, petitioners' availment of the
"financial assistance" given by respondent company did not estop them from questioning the legality of
their separation from the company. Petitioners were constrained to accept whatever relief the respondent
company offered at that time.
Hence, the decision is reversed and set aside, with the order to respondents to reinstate the
petitioners without loss of seniority rights and with full backwages minus the amount received by them as
"financial assistance" upon their separation.

2011-0237
Case Title: LOPEZ SUGAR CORPORATION VS. FEDERATION FREE WORKERS

G.R. No.: G.R. No. 75700-01
Petitioner: Lopez Sugar Corporation
Respondent: National Labor Relations Commission and Federation of Free Workers, Philippine
Labor Union Association (PLUA-NACUSIP)
Facts:
Lopez Sugar Corporation seeks the reversal of the decision of the NLRC which affirmed the
decision of the Labor Arbiter in denying its application to retrench some of its employees. Petitioner
applied for the retrenchment and force the retirement of its employees to prevent losses due to major
economic problems, and as an exercise of its privilege under Article XI, Section 2 of its 1975-1977
Collective Bargaining Agreement entered into between the petitioner and respondent Philippine Labor
Union Association ("PLUA-NACUSIP").
On 3 January 1980, the Federation of Free Workers, as the certified bargaining agent of the rank-
and-file employees of the petitioner, filed with the Bacolod District Office of the MOLE a complaint for
unfair labor practices and recovery of union dues. In said complainant, FFW claimed that the terminations
undertaken by petitioner were violative of the security of tenure of its members and were intended to
"bust" the union and hence constituted an unfair labor practice. FFW further argued that to justify
retrenchment, serious business reverses must be "actual, real and amply supported by sufficient and
convincing evidence." Petitioner averred that it is the company’s prerogative to retrench since there are
two major economic problems that the company is facing like the rising cost of production and the
stoppage of its railway facilities, which when put together pose a very serious threat against the economic
survival of the company. Petitioner argues that under the law, it has the right to reduce its workforce if
made necessary by economic factors which would endanger its existence, and that for retrenchment to
be valid, it is not necessary that losses be actually sustained. The existence of valid grounds to anticipate
or expect losses would be sufficient justification to enable the employer to take the necessary actions to
prevent any threat to its survival.
The Labor Arbiter denied petitioner's application for clearance to retrench its employees on the
ground that for retrenchment to be valid, the employer's losses must be serious, actual and real and must
be amply supported by sufficient and convincing evidence. On appeal, the NLRC, finding no justifiable
reason to disturb the decision of the Labor Arbiter, affirmed the decision.
Issue:
Whether or not the company’s application for retrenchment should be approved
Held:
No. The phrase "to prevent losses" means that retrenchment or termination of the services of
some employees is authorized to be undertaken by the employer sometime before the losses anticipated
are actually sustained or realized. It is not, in other words, the intention of the lawmaker to compel the
employer to stay his hand and keep all his employees until sometime after losses shall have in fact
materialized; if such an intent were expressly written into the law, that law may well be vulnerable to
constitutional attack as taking property from one man to give to another. It seems equally clear that not
every asserted possibility of loss is sufficient legal warrant for reduction of personnel. In the nature of
things, the possibility of incurring losses is constantly present, in greater or lesser degree, in the carrying
on of business operations, since some, indeed many, of the factors which impact upon the profitability or
viability of such operations may be substantially outside the control of the employer. Thus, the difficult

question is determination of when, or under what circumstances, the employer becomes legally privileged
to retrench and reduce the number of his employees. First, the losses expected should be substantial and
not merely de minimis in extent. If the loss purportedly sought to be forestalled by retrenchment is clearly
shown to be insubstantial and inconsequential in character, the bona fide nature of the retrenchment
would appear to be seriously in question. Secondly, the substantial loss apprehended must be reasonably
imminent, as such imminence can be perceived objectively and in good faith by the employer. There
should, in other words, be a certain degree of urgency for the retrenchment, which is after all a drastic
recourse with serious consequences for the livelihood of the employees retired or otherwise laid-off.
Because of the consequential nature of retrenchment, it must, thirdly, be reasonably necessary and likely
to effectively prevent the expected losses. The employer should have taken other measures prior or
parallel to retrenchment to forestall losses, i.e., cut other costs than labor costs. An employer who, for
instance, lays off substantial numbers of workers while continuing to dispense fat executive bonuses and
perquisites or so-called "golden parachutes", can scarcely claim to be retrenching in good faith to avoid
losses. To impart operational meaning to the constitutional policy of providing "full protection" to labor, the
employer's prerogative to bring down labor costs by retrenching must be exercised essentially as a
measure of last resort, after less drastic means — e.g., reduction of both management and rank-and-file
bonuses and salaries, going on reduced time, improving manufacturing efficiencies, trimming of
marketing and advertising costs, etc. — have been tried and found wanting. Lastly, but certainly not the
least important, alleged if already realized, and the expected imminent losses sought to be forestalled,
must be proved by sufficient and convincing evidence. Hence, the petition prayed for by the petitioner
was denied.


2011-0237
Case Title: PANLILIO VS NLRC

G.R. No.: G.R. No. 117459
Petitioner: Moises B. Panlilio
Respondent: National Labor Relations (First Division) and Findstaff Placement Services, Inc.
and Oman Sheraton Hotel, Inc.
Ponente: J. Romero
Facts:
Moises B. Panlilio was recruited by Findstaff Placement Services (FPS) for employment in the
Sheraton Hotel in Oman as Recreational Manager. His contract was for a period of two years with a
monthly compensation of one thousand one hundred dollars ($1,100.00). However, his services were
terminated on the ground that his position had become redundant. He then filed a complaint for illegal
dismissal before the Adjudication Office of the Philippine Overseas Employment Administration (POEA).
After due trial, the POEA rendered a decision ruling that petitioner was illegally dismissed on the premise
that the alleged redundancy of his position was not adequately proven. FPS filed an appeal before the
National Labor Relations Commission; however, it affirmed the POEA's decision and dismissed the
appeal for lack of merit. Undaunted by another setback, FFS filed a motion for reconsideration. To
petitioner's surprise and dismay, the NLRC reversed itself and rendered a new decision upholding the
validity of his dismissal on ground of redundancy.
Issue:
Whether or not the dismissal of the petitioner is valid on the ground of redundancy
Held:
The dismissal of the petitioner on the ground of redundancy was not valid. FPS failed to present
substantial evidence to justify the dismissal of the petitioner. The affidavits and documents it submitted do
not prove the superfluity of petitioner's position. It does not explain the reason why petitioner’s position
had become redundant, but only elucidated the fact that he was not a victim of any discrimination in
effecting the termination. In fact, these documents do not even present the necessary factors which would
confirm that a position is indeed redundant, such as over hiring of workers, decreased volume of business
or dropping of a product line or service activity.
Thus, it is important for a company to have fair and reasonable criteria in implementing its
redundancy program, such as but not limited to, (a) preferred status, (b) efficiency and (c) seniority. In the
case at bar, unfortunately for FPS, such appraisal was not done.
Hence, the decision of the NLRC was reversed and set aside and the decision of the POEA was
reinstated.

2011-0237
Case Title: PHIL. WIRELESS INC. VS NLRC

G.R. No.: G.R. No. 112963
Date: July 20, 1999
Petitioner: Philippine Wireless Inc. (Pocketbell) and/or Jose Luis Santiago
Respondent: National Labor Relations Commission and Goldwin Lucila
Ponente: J. Pardo
Facts:
On January 8, 1976, petitioner Philippine Wireless Inc. hired respondent Doldwin Lucila as
operator/encoder. Doldwin Lucila was promoted three times after his employment from the petitioner. He
was promoted as Head Technical and Maintenance Department of the Engineering Department on
January 7, 1979 and from that position, as Supervisor, Technical Services of the same department and
on October 1, 1990, he was again promoted as Superintendent, Project Management.
However, on December 28, 1990, he tendered his resignation. Subsequently, he filed with the
Arbitration Branch, National Labor Relations Commission, a complaint for illegal/constructive dismissal.
He alleged that he was constructively dismissed inasmuch as his promotion from Supervisor, Technical
Services to Superintendent, Project Management is demeaning, illusory and humiliating as he was not
given any secretary, assistant and/or subordinates.
Acting on the complaint, Labor Arbiter Benigno Villarente Jr. rendered a decision declaring that
respondent actually resigned and dismissed the complaint for lack of merit. However, the NLRC reversed
the findings of the Labor Arbiter and ordered respondent’s reinstatement with back wages or separation
pay.
Issue:
Whether or not Doldwin Lucila was constructively dismissed from the petitioner’s employment
Held:
No. The Court held that constructive dismissal is “an involuntary resignation resorted to when
continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank
and/or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer
becomes unbearable to the employee.”
In the case at bar, Doldwin Lucila voluntarily resigned from his employment on December 28, 1990
and was not pressured into resigning. Furthermore, there is no demotion to be considered as he had no
support staff support staff to assist him in his work and whom he could supervise. There is only demotion
where there is a reduction in position, rank or salary as a result of such transfer.
Hence, the petition is granted. The decision of the National Labor Relations Commission is set aside
and the decision of the Labor Arbiter is reinstated and affirmed.

2011-0237
Case Title: REVIDAD VS NLRC

G.R. No.: G.R. No. 111105
Date: June 27, 1995
Petitioner: Rolando Revidad, Pablito Laluna, Rafael Angeles, Teodoro Rosario, Romeo
Revidad, Jacinto Gruta, Jose Español, Florentino Locsin, Rogelio Paradero, Marcelino
Derota, Armando Cabales, Benjamin Montesa and Raymond Vidal
Respondent: National Labor Relations Commission and Atlantic, Gulf and Pacific Company of Manila,
Inc.
Ponente: J. Regalado
Facts:
Sometime in March, 1988, the respondent Atlantic, Gulf and Pacific Company of Manila, Inc.
terminated the services of 178 employees under a redundancy program. As a consequence, a complaint
for illegal dismissal with prayer for reinstatement was filed by herein petitioners and were subsequently
decided in favor of of them. As a result of which, they were reinstated and assigned to the Batangas plant
of private respondent. However, pursuant to Presidential Directive No. 0191 AG & P implemented and
effected the temporary lay-off of some 705 employees. By reason thereof, the AG & P United Rank and
File Association staged a strike. As an act of conciliation, the issue was resolved by the voluntary
arbitrator where it was held that AG & P had the right to exercise its management prerogative to
temporarily lay off its employees owing to the unfavorable business climate being experienced by the
company consequent to the financial reverses it suffered from 1987 to 1991.
On February 11, 1992, considering that petitioners were not being recalled by the AG & P
management, they filed a complaint for illegal dismissal and unfair labor practice against AG & P before
respondent commission. On August 24, 1992, Labor Arbiter Nieves V. de Castro rendered
judgment ordering the reinstatement of petitioners, with payment of full back wages, on the ground that
AG & P failed to substantiate the alleged continuous losses it incurred in 1991 which resulted in the
retrenchment of its operations. On appeal, public respondent NLRC reversed and set aside the decision
of the labor arbiter, and dismissed the complaint for illegal dismissal for lack of merit.
Issue:
Whether or not the petitioner’s termination from employment was just and valid
Held:
Yes. The temporary lay-off of the herein petitioners were valid and justified for having complied
with the requisites set forth in Article 283 of the Labor Code, as it has been sufficiently and convincingly
established that it was suffering financial reverses, the conclusions made by the voluntary arbitrator's
were premised upon and substantiated by the audited financial statements and the proof of actual
financial losses incurred by the company is not a condition sine qua non, for retrenchment. The reason of
management's failure to recall the petitioners, their services shall be considered duly terminated and they
shall be entitled to separation pay equivalent to one month pay or at least one-half (½) month pay for
every year of service, whichever is higher.
The bare allegation that the dismissal of petitioners was a retaliatory move by the company after
the former won in an earlier illegal termination case and by reason of which they were reinstated by the
latter, without any supporting evidence to prove bad faith or ill motive on the part of the company, cannot
stand against and is diametrically opposed to the findings in the voluntary arbitration proceedings. The
exercise of AG & P's management prerogative to lay off employees was fair, reasonable and just and that
it was neither oppressive, malicious, harsh, nor vindictive. Worse, it was there stated that the union, to

which herein petitioners belonged, never imputed bad faith or ill motives in the selection of the employees
to be temporarily laid off.
Thus, the Court sets out the general standards in terms of which the acts of an employer in
retrenching or reducing the number of its employees. First, the losses expected should be substantial and
not merely de minimis in extent. If the loss purportedly sought to be forestalled by retrenchment is clearly
shown to be insubstantial and inconsequential in character, the bona fide nature of the retrenchment
would appear to be seriously in question. Second, the substantial loss apprehended must be reasonably
imminent, as such imminence can be perceived objectively and in good faith by the employer. There
should, in other words, be a certain degree of urgency for the retrenchment, which is after all a drastic
recourse with serious consequences for the livelihood of the employees retired or otherwise laid off.
Because of the consequential nature of retrenchment, it must, thirdly, be reasonably necessary and likely
to effectively prevent the expected losses. The employer should have taken other measures prior or
parallel to retrenchment to forestall losses, i.e., cut other costs than labor costs. And last, but certainly not
the least important, alleged losses if already realized, and the expected imminent losses sought to be
forestalled, must be proved by sufficient and convincing evidence. The reason for requiring this quantum
of proof is apparent; any less exacting standard of proof would render too easy the abuse of this ground
for termination or services of employees.
Hence, the law in protecting the rights of the laborer authorizes neither oppression nor self-
destruction of the employer. While the Constitution is committed to the policy of social justice and the
protection of the working class, it should not be supposed that every labor dispute will be automatically
decided in favor of labor. Management also has its own rights, which as such are entitled to respect and
enforcement in the interest of simple fair play. Out of its concern for those with less privileges in life, the
Supreme Court has inclined more often than not toward the worker and upheld his cause with his conflicts
with the employer. Such favoritism, however, has not blinded the Court to rule that justice is in every case
for the deserving, to be dispensed in the light of the established facts and applicable law and doctrine.

2011-0237
Case Title: SEBUGUERO VS NLRC

G.R. No.: G.R. No. 115394
Petitioner: Fe S. Sebuguero, Carlos Ong, Nene Manaog, Juanito Custodio, Crisanta Lacsam,
Saturnino Gural, Wilma Baldera, Leonila Valdez, Fatima Potestad, Evangeline
Agnado, Restituto Glorioso, Janese de los Reyes, Rodolfo Sanchez, Wilma Orbello,
Daisy Pascua, and Alex Masaya
Respondent: National Labor Relations Commission, G.T.I. Sportswear Corporation and/or
Benedicto Yujuico
Ponente: J. Davide Jr.
Facts:
The petitioners were among the thirty-eight regular employees of GTI Sportswear Corporation,
who were given "temporary lay-off" notices by the company, due to alleged lack of work and heavy losses
caused by the cancellation of orders from abroad and by the garments embargo of 1990. Petitioners
believe that their "temporary lay-off" was a ploy to dismiss them which resorted to by the company
because of their union activities, and therefore was no valid ground. The 38 laid-off employees filed with
the Labor Arbiter's office in the National Capital Region complaints for illegal dismissal, unfair labor
practice, underpayment of wages under Wage Orders Nos. 01 and 02, and non-payment of overtime pay
and 13th month pay. GTI denied the claim of illegal dismissal and asserted that it was its prerogative to
lay-off its employees temporarily for a period not exceeding six months to prevent losses which according
to them they communicated to the petitioners and the other complainants who were all offered severance
pay. The Labor Arbiter Pablo C. Espiritu, Jr. ordered that G.T.I. Sportswear Corporation is liable for
constructive dismissal, underpayment of wages under NCR 01 and 02, and 13th-month pay differentials.
The NLRC concurred with the findings of the Labor Arbiter that there was a valid lay-off of the petitioners
due to lack of work, but disagreed with the latter's ruling granting back wages after 22 July 1991. Hence,
this petition.
Issue:
Whether or not the petitioners were validly dismissed on the ground of the company’s prerogative
for retrenchment
Held:
Retrenchment is used interchangeably with the term "lay-off." It is the termination of employment
initiated by the employer through no fault of the employee's and without prejudice to the latter which is
resorted to by the management during the periods of business recession, industrial depression, or
seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials, conversion of
the plant for a new production program or the introduction of new methods or more efficient machinery, or
of automation. Simply put, it is an act of the employer of dismissing employees because of losses in the
operation of a business, lack of work, and considerable reduction on the volume of his business.
Article 283 of the Labor Code provides for the requisites that should be followed in order for the
retrenchment to be valid. However, it speaks of a permanent retrenchment as opposed to a temporary
lay-off as is the case here. There is no specific provision of law which treats of a temporary retrenchment
or lay-off and provides for the requisites in effecting it or a period or duration therefor. The employees
cannot forever be temporarily laid-off. Hence, in order to remedy this situation Article 286 may be applied
but only by analogy to set a specific period that employees may remain temporarily laid-off or in floating
status which is six months. The temporary lay-off wherein the employees likewise cease to work should
also not last longer than six months. After six months, the employees should either be recalled to work or

permanently retrenched following the requirements of the law, and that failing to comply with this would
be tantamount to dismissing the employees and the employer would thus be liable for such dismissal.
Thus, the constructive lay-off of the employees must be read concurringly with the requisites
provided for in Articles 283 and 286 of the Labor Code. In the case at bar there is no showing that the
company observed the requisites set for by law in order for the retrenchment to be valid, i.e., their
compliance in the written notice to be given to the employees and the DOLE one month before the
intended date of retrenchment. Consequently, with their failing to observe the rules, the petitioners herein
were not validly dismissed by the GTI Company, and the latter was ordered to pay the petitioners their
th
13 month pay, separation pay and indemnification for damages.

2011-0237
Case Title: TIERRA INTERNATIONAL CONSTRUCTION CORPORATION VS. NLRC

G.R. No.: G.R. No. 88912
Date: July 3, 1992
Petitioner: Tierra International Construction Corporation
Respondent: National Labor Relations Commission, Sheriff of the Philippine Overseas
Employment Administration and Isidro P. Olivar
Ponente: J. Padilla
Facts:
On 7 March 1984, Isidro P. Olivar was hired by FEBROE, a foreign shipping company, through its
local agent, Tierra International Construction Corporation, to work as shift supervisor in its Base
Operating Support (BOS) project for the U.S. Navy in the British Indian Ocean Territory of Diego Garcia.
The respondent eventually left for Diego Garcia and assumed his position. His employment contract was
renewed in 1985; the last renewal was on 8 May 1986. But on 1 October 1986, he was dismissed from
employment, and subsequently repatriated to the Philippines. Upon his return to the Philippines, private
respondent filed a complaint with the Philippine Overseas Employment Administration (POEA) against
petitioner and FEBROE, as the principal, for breach of employment contract, unfair labor practice and
moral damages. Private respondent alleged that he was a victim of improper termination of employment
thru gradual and systematic removal of high salaried employees. He averred that granting that there was
a decrease in the volume or scope of work of FEBROE, his actual volume of work in the department
where he was assigned had increased significantly as evidenced by the assignment of additional
personnel in the same department.
Petitioner denied having illegally dismissed the private respondent. Petitioner averred that
FEBROE management undertook a comprehensive audit and evaluation of its entire work force with the
end in view of promoting economy, efficiency and profitability in its operations, and to reduce personnel
whose positions were considered redundant or surplusage and/or to re-assign personnel to other
available useful positions.
The POEA then rendered a decision holding that the termination of the private respondent from
his employment was for an authorized cause. The reversed the POEA decision.
Issue:
Whether or not private respondent’s termination from employment is illegal
Held:
No. Termination of an employee's services because of a reduction of work force due to a

decrease in the scope or volume of work of the employer is synonymous to, or a shade of termination
because of redundancy under Article 283 (formerly 284) of the Labor Code. Redundancy exists where the
services of an employee are in excess of what is reasonably demanded by the actual requirements of the
enterprise. A position is redundant where it is superfluous, and superfluity of a position or positions may
be the outcome of a number of factors, such as over hiring of workers, decreased volume of business, or
dropping of a particular product line or service activity previously manufactured or undertaken by the
enterprise.
In fact, the notice given to the respondent stated that in case the private respondent qualifies for
another position, he will be transferred to said other position. If not, he will be scheduled for are turn flight
to his point of hire. Unfortunately, there was no other position available. It also appears that the
respondent was not singled out and his termination was not arbitrary or malicious on the part of the
employer because there are also other positions that were abolished, including both U.S. and Third

Country Nations (TCN) positions and was forced to leave the site. Thus, it is clearly stated that the law
does not make any distinction between a technical and a non-technical position for purposes of
determining the validity of termination due to redundancy. Neither does the law nor the stipulations of the
employment contract involved require that junior employees should first be terminated. In redundancy,
what is looked into is the position itself, the nature of the services performed by the employee and the
necessity of such position.
Therefore, the private respondent's termination from employment was for a valid or just cause.

2011-0237
Case Title: TIERRA INTERNATIONAL CONSTRUCTION CORPORATION VS. NLRC

G.R. No.: G.R. No. 88912
Date: July 3, 1992
Petitioner: Tierra International Construction Corporation
Respondent: National Labor Relations Commission, Sheriff of the Philippine Overseas
Employment Administration and Isidro P. Olivar
Ponente: J. Padilla
Facts:
On 7 March 1984, Isidro P. Olivar was hired by FEBROE, a foreign shipping company, through its
local agent, Tierra International Construction Corporation, to work as shift supervisor in its Base
Operating Support (BOS) project for the U.S. Navy in the British Indian Ocean Territory of Diego Garcia.
The respondent eventually left for Diego Garcia and assumed his position. His employment contract was
renewed in 1985; the last renewal was on 8 May 1986. But on 1 October 1986, he was dismissed from
employment, and subsequently repatriated to the Philippines. Upon his return to the Philippines, private
respondent filed a complaint with the Philippine Overseas Employment Administration (POEA) against
petitioner and FEBROE, as the principal, for breach of employment contract, unfair labor practice and
moral damages. Private respondent alleged that he was a victim of improper termination of employment
thru gradual and systematic removal of high salaried employees. He averred that granting that there was
a decrease in the volume or scope of work of FEBROE, his actual volume of work in the department
where he was assigned had increased significantly as evidenced by the assignment of additional
personnel in the same department.
The POEA then rendered a decision holding that the termination of the private respondent from
his employment was for an authorized cause. The reversed the POEA decision stating that, petitioner’s
position, being a technical one, can be the subject of redundancy only in the remotest possible manner
after exhausting first other junior employees in complainant's department.
Issue:
Whether or not the petitioner was illegally dismissed based on his position, being a technical one
Held:
No. The law does not make any distinction between a technical and a non-technical position for
purposes of determining the validity of termination due to redundancy. Neither does the law nor the
stipulations of the employment contract here involved require that junior employees should first be
terminated. In redundancy, what is looked into is the position itself, the nature of the services performed
by the employee and the necessity of such position. The determination of the continuing necessity of a
particular officer or position in a business corporation is management's prerogative, and the courts will not
interfere with the exercise of such so long as no abuse of discretion or merely arbitrary or malicious action
on the part of management is shown. Hence, the private respondent's termination from employment was
for a valid or just cause.


2011-0237
Case Title: WILTSHIRE FILE CO., INC. VS. NLRC

G.R. No.: G.R. No. 82249
Petitioner: Wiltshire File Co., Inc.
Respondent: National Labor Relations Commission and Vicente T. Ong
Facts:
Vicente T. Ong was the Sales Manager of Wiltshire File Co., Inc from 16 March 1981 up to 18
June 1985. On 13 June 1985, upon the respondent's return from a business and pleasure trip abroad, he
was informed by the President of Wiltshire that his services were being terminated. The respondent tried
to get an explanation from management of his dismissal but to no avail. The company's security guard
handed him a letter which formally informed him that his services were being terminated upon the ground
of redundancy. The respondent then filed a complaint before the Labor Arbiter for illegal dismissal
alleging that his position could not possibly be redundant because nobody in the company was then
performing the same duties. The petitioner alleged that the termination of respondent's services was a
cost-cutting measure for the company had experienced an unusually low volume of orders and that it was
in fact forced to rotate its employees in order to save the company. Despite the rotation of employees,
petitioner alleged that it continued to experience financial losses and the respondent's position became
redundant. Wiltshire, on the other hand, proposes that it would close its doors permanently due to
substantial business losses.
The Labor Arbiter then declared that the termination of the respondent's services was illegal. On
appeal the National Labor Relations Commission affirmed in toto the decision of the Labor Arbiter which
states that the main reason in terminating the services of Vicente Ong was redundant and not
retrenchment. It also held that the termination was attended by malice and bad faith on the part of
petitioner, considering the manner of ordering the respondent to pack up and remove his personal
belongings from the office without having to explain the reasons behind the termination of his services.
The petitioner contends that private respondent's dismissal was justified and not illegal because it had
been incurring business losses beginning 1984 and they were compelled to reduce the size of its
personnel force. Redundancy, for them, as a cause for termination does not necessarily mean duplication
of work but a "situation where the services of an employee are in excess of what is demanded by the
needs of an undertaking..."
Issue:
Whether or not the termination of the termination of the respondent’s services was illegal
Held:
No. First, the Court was satisfied that indeed the petitioner had serious financial difficulties before,
during and after the termination of the services of private respondent for Wiltshire finally closed its doors
and terminated all operations in the Philippines on January 1987, barely two (2) years after the
termination of private respondent's employment. They are of the opinion that finally shutting down
business operations constitutes strong confirmatory evidence of petitioner's previous financial distress
because it was very difficult to suppose that Wiltshire would take the final and irrevocable step of closing
down its operations in the Philippines simply for the sole purpose of easing out a particular officer or
employee.
Second, the letter informing the respondent of the termination of his services uses the word
"redundant", having referred also by the company as having "incurred financial losses which fact has
compelled it to resort to retrenchment to prevent further losses". Thus, retrenchment was necessary,

which retrenchment in turn resulted in the redundancy of private respondent's position. Redundancy in an
employer's personnel force does not necessarily or even ordinarily refers to duplication of work. It also
does not mean that because no other person was holding the same position prior to the termination of his
services his position had not become redundant. Indeed, in any well-organized business enterprise, it
would be surprising to find duplication of work and two (2) or more people doing the work of one person.
Redundancy, for purposes of our Labor Code, exists where the services of an employee are in excess of
what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is
redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a
number of factors, such as over hiring of workers, decreased volume of business, or dropping of a
particular product line or service activity previously manufactured or undertaken by the enterprise. The
employer has no legal obligation to keep in its payroll more employees than are necessarily for the
operation of its business.
In the case at bar, petitioner Wiltshire, in view of the contraction of its volume of sales and in
order to cut down its operating expenses, effected some changes in its organization by abolishing some
positions and thereby effecting a reduction of its personnel. Thus, the position of Sales Manager was
abolished and the duties previously discharged by the Sales Manager simply added to the duties of the
General Manager, to whom the Sales Manager used to report.
It is of no legal moment that the financial troubles of the company were not of private
respondent's making. Private respondent cannot insist on the retention of his position upon the ground
that he had not contributed to the financial problems of Wiltshire. The characterization of private
respondent's services as no longer necessary or sustainable, and therefore properly terminable, was an
exercise of business judgment on the part of petitioner’s company. The wisdom or soundness of such
characterization or decision was not subject to discretionary review on the part of the Labor Arbiter nor of
the NLRC so long as violation of law or merely arbitrary and malicious action is not shown.

Marah Danielle D. Villarubia
2011-0470
Case Title: Azcor Manufacturing Inc. v. NLRC

G.R. no: G.R. 117963
Petitioner: Azcor Manufacturing Inc., Filipinas Paso and/or Arturo Zuluaga/Owner
Respondent: National Labor Relations Commission (NLRC) and Candido Capulso
Facts:
Respondent Capulso filed with the Labor Arbiter a complaint for constructive illegal
dismissal and illegal deduction of P50.00 per day for the period April to September 1989. Suddenly,
Petitioners Azcor Manufacturing, Inc. (AZCOR) and Arturo Zuluaga who were respondents before the
Labor Arbiter (Filipinas Paso was not yet a party then in that case) moved to dismiss the complaint on the
ground that there was no employer-employee relationship between AZCOR and herein respondent. In the
second week of February 1991, upon his doctor’s recommendation, Capulso verbally requested to go on
sick leave due to bronchial asthma. It was diagnosed that his illness was directly caused by his job as
ceramics worker where, (for lack of the prescribed occupational safety gadgets), he inhaled and absorbed
harmful ceramic dusts. With the present of Ms. Emily Apolinaria, his supervisor approved the said
request. After four months, Capulso went back to petitioner AZCOR to resume his work after recuperating
from his illness; unfortunately, he was not allowed to do so by his supervisors who informed him that only
the owner, Arturo Zuluaga, could allow him to continue in his job.
Issue:
Whether or not the private respondent suffered illegal dismissal from the petitioners
Held:
The Court answered in the negative. In illegal dismissal cases like the present one, the
onus of proving that the dismissal of the employee was for a valid and authorized cause rests on the
employer and failure to discharge the same would mean that the dismissal is not justified and therefore
illegal – with this, the petitioners failed in this regard.
To constitute a resignation, it must be unconditional and with the intent to operate as

such. There must be an intention to relinquish a portion of the term of office accompanied by an act of
relinquishment. In the instant case, the act of determination from the respondent proved the fact that
Capulso signified his desire to resume his work when he went back to petitioner AZCOR after
recuperating from his illness.

2011-0470
Case Title: Balbalec v. NLRC

G.R. no: G.R. 107756
Petitioner: Paulino Balbalec, Juan Bolante and Rolando Beleno
Respondent: National Labor Relations Commission and The Rural Bank of Bangued
Facts:
By 1989, the Rural Bank of Bangued dismissed three of its employees, namely, Paulino
Balbalec, Juan Bolante and Rolando Beleno alleging that its workforce was being retrenched for losses
suffered by respondent bank during the years 1984-1988. Based on the result of their termination, the
petitioners filed an individually complaints for unfair labor practice, illegal dismissal, unpaid salaries,
reinstatement and backwages with the Cordillera Administrative Division of the National Labor Relations
Commission (NLRC) in Baguio City. Petitioners alleged that they were singled out for dismissal after they
refused to sign an agreement for determent of wage increases under Republic Act 6727, an agreement
which all of respondent bank's other employees signed, with the sole exception of petitioners. On the
other hand, respondent averred that retrenchment of its workforce was necessary to prevent business
losses. It further alleged that said termination would not hamper its operations and denied that petitioners
were singled out, claiming that the latter ranked last in seniority among its employees.
Issue:
Whether or not the dismissal of the petitioners are invalid
Held:
The Court found that petitioners were dismissed on the basis of a valid retrenchment.
The law recognizes the right of every business entity to reduce its workforce if the same
is made necessary by compelling economic factors which would endanger its existence or stability. The
Court has authorized valid reductions in the workforce to forestall business losses, the hemorrhaging of
capital, or even to recognize an obvious reduction in the volume of business which has rendered certain
employees redundant. Thus, Article 283 of the Labor Code provides not only contemplates the
termination of employment of workers or employees to minimize established business losses but also
to prevent impending losses. However, retrenchment strikes at the very core of an individual's
employment and the burden clearly falls upon the employer to prove economic or business losses with
appropriate supporting evidence. After all, not every asserted potential loss is sufficient legal warrant for a
reduction of personnel. Moreover, the findings by the NLRC established from both parties’ submissions,
the bank encountered financial losses in the year of 1989, 1985, and 1986, in addition, the respondent
bank was faced with a serious financial problem resulting from its considerable reduction of resources.
Together with the NLRC, the Court come with an agreement that “…there is no dispute that the
complainants were terminated by the respondent bank, this Commission is persuaded, however, by the
evidence that their dismissal was carried out due to retrenchment to prevent losses or the closing or
cessation of operation of the establishment as borne by its losses, decrease in resources as well as
increase in past due loans. Retrenchment was rightfully undertaken in the case at bar by the
employer/respondent rural bank before the anticipated losses are actually sustained or realized.

2011-0470
Case Title: Bogo-Medellin Sugarcane Planters Association, Inc. v. NLRC

G.R. no: G.R. 97846
Petitioner: Bogo-Medellin Sugarcane Planters Association, Inc. and Horacio Franco
Respondent: National Labor Relations Commission, Associated Labor Unions, Bonifacio Montilla, Jose
Ybañez Jr., Bernardo dela Rama, Ildefonso Carredo, Roseto Canales, Fortunato
Migabon Jr., and Heracleo Megabon
Facts:
The respondents performed the functions of computer, sampler and scalers. They joined
and became members of Associated Labor Unions, with Bonifacio Montilla as its local president. Upon
campaigning for union membership, the treasurer of respondent firm Mr. Jose Mari Miranda called
Montilla to his office and told him to withdraw his membership from the Associated Labor Unions or else
they will not be hired at the start of the milling season and will be dismissed. As a consequence, notices
of termination were sent to the respondents, informing them that their services will be terminated due to
financial difficulties. While the said notices stated that their services will be terminated 30 days from date,
they were not allowed to work within that 30 day period and Montilla was immediately replaced by a
certain name Gavino Negapatan. The respondents alleged that their dismissal was sought due to their
membership in union as they have not violated any company rules and regulations.
Issue:
Whether or not the retrenchment is in good faith
Held:
The petition is denied.
Retrenchment is the termination of employment effected by management during periods
of business recession, industrial depression, seasonal fluctuations, and lack of work or considerable
reduction in the volume of the employer’s business. Resorted to by an employer to avoid or minimize
business losses, it is a management prerogative consistently recognized by this Court and allowed under
Article 283 of the Labor Code. The Court held that the "'loss' referred to in Article 283 cannot be just any
kind or amount of loss; otherwise, a company could easily feign excuses to suit its whims and prejudices
or to rid itself of unwanted employees.
In the present case no financial statement or statement of profit and loss or books of
account have been presented to substantiate the alleged losses.
The Court agreed with the conclusion of the labor arbiter that the real motive behind the
retrenchment must have been to discriminate against private respondents as a consequence of their
membership in Respondent Union.

2011-0470
Case Title: Catatista v. NLRC

G.R. no: G.R. 102422
Petitioner: Antonio Catatista, Jaime Monserate, Francisco Elisan, Fernando de la Peña, Diego
Tupas, Rosendo Monserate, Ernesto Sibunal, Dioscoro Hino-o, Aurelio Descatamiento,
Lodovico dela Peña, and Dionisio Ballados
Respondent: National Labor Relations Commission and Victorias Milling Company, Inc.
Ponente: Romero, J.
Facts:
Sometime in June 1984, private respondent decided to permanently stop and close its
sugarcane operations in Hacienda Binanlutan “due to low sugar prices which affected the viability and
profitability of said hacienda” and convert it instead into an ipil-ipil plantation. In view of such decision,
management subsequently held a conference with all thirteen field workers to explain to them the reason
for this move, as well as the computation of their termination pay. Three years after, petitioners filed a
complaint against private respondent with the arbitration branch of the National Labor Relations
Commission for illegal dismissal.
Issue:
Whether or not the petitioners were illegally terminated from work resulting from the
closure of Hacienda Binanlutan
Held:
The petition is hereby dismissed.
The Court ruled that “the requisites of a valid retrenchment are: (a) the losses expected
should be substantial and not merely de minimis in extent; (b) the substantial losses apprehended must
be reasonably imminent; (c) the retrenchment must be reasonably necessary and likely to effectively
prevent the expected losses; and (d) the alleged losses, if already incurred, and the expected imminent
losses sought to be forestalled, must be proved by sufficient and convincing evidence.”
The losses incurred are clearly substantial and sufficiently proven by means of an income
statement of Hacienda Binanlutan and the financial statement of the company haciendas. Considering the
losses suffered by private respondent, it is logical for it to implement a retrenchment program to prevent
further losses. Private respondent’s personnel reduction program was meant to reduce excessive labor
cost in the company. Also, the Court held that private respondent was within its rights in closing Hacienda
Binanlutan and in terminating the service of petitioners.

2011-0470
Case Title: Central Azucarera de la Carlota v. NLRC

G.R. no: G.R. 100092
Petitioner: Central Azucarera de la Carlota
Respondent: National Labor Relations Commission, Fourth Division, Cebu City and Reynaldo
Decrepito
Facts:
Petitioner's Board of Directors passed a resolution authorizing its Vice President-
Resident Manager to undertake and implement a comprehensive cost reduction program
to address petitioner's financial difficulties "on account of huge financial losses suffered
due to a big production shortfall in the last crop year which was further aggravated by the
reduction of areas planted to cane in the district and the recent dry spell.
As a consequence, private respondent Decrepito filed a complaint against petitioner
alleging that the retrenchment program resorted to by the petitioner was not based on
valid grounds.
Issue:
Whether or not the dismissal due to retrenchment of Decrepito was valid
Held:
The petition for certiorari is hereby dismissed.
Art. 283 of the Labor Code allowed the employers to dismiss employees on economic
grounds and retrenchment, to avoid or minimize business losses. Citing the case of Lopez Sugar
Corporation v. Federation of Free Workers wherein the so-called "four standards of retrenchment" are
enumerated such as follows, (a) the losses expected should be substantial and not merely de minimis in
extent; (b) the substantial loss apprehended must be reasonably imminent, as such imminence can be
perceived objectively and in good faith by the employer; (c) be reasonably necessary and likely to
effectively prevent the expected losses; and (d) alleged losses if already realized, and the expected
imminent losses sought to be forestalled, must be proved by sufficient and convincing evidence.
In the case at bar, the petitioner failed to present evidence that it was suffering from dire
financial straits and from drastic business losses.
There’s an accurate statement that the petitioner sent private respondent a

memorandum regarding the retrenchment. However, this was given only five (5) days before the
effectivity of said retrenchment. It was getting worse that the said notice of retrenchment was received by
the Department of Labor and Employment (DOLE) only or after private respondent was dismissed. Such
perfunctory "compliance" cannot be countenanced for it defeats the purpose of requiring notice in the first
place.


2011-0470
Case Title: Habana v. NLRC

G.R. no: G.R. 121486
Petitioner: Antonio Habana
Respondent: The National Labor Relations Commission, Hotel Nikko Manila Garden, Masakasu
Tsuruoka, Masao Yokoo, and Tamiyasu Okawa
Facts:
The respondent Nikko employed the petitioner as Rooms Division Director. Soon then,
General Manager Masakazu Tsuruoka issued the following inter-department memorandum announcing
petitioner’s appointment. In the course of the petitioner’s employment, he encountered several difficulties
to unite and control his managerial staff and several conflicts with his Senior Rooms Manager. Thereafter,
Assistant General Manager Masao Yokoo issued a memorandum expressing concern over the dispute
between petitioner and his managerial staff in the Rooms Division. In addition to the petitioner’s
employment, there were several complaints regarding wrong key issuances and double check-in of
guests in one room and the rooms in the hotel were often found dirty and unkempt. As a result, Mr.
Tamiyasu Okawa issued a memorandum instructing Ms. Vicky Raquepo (Roomskeeping Manager) and
Mr. Danilo Cabaluna (Housekeeping Manager) to conduct a daily inspection of the guestrooms and the
public areas, due to the several complaints received by management. Afterwards, petitioner sent a
memorandum of protest to Mr. Okawa alleging that the latter’s order for petitioner was a form of
harassment to “ease him out of his position” also caused him serious anxiety.
Issue:
Whether or not the petitioner voluntarily resigned
Held:
The petition for certiorari is hereby dismissed.
It must be emphasized as well that the petitioners are not ordinary laborers or rank-and-
file personnel who may not be able to completely comprehend and realize the consequences of their
acts. The petitioners are managerial employees holding responsible positions.
Voluntary resignation is defined as the voluntary act of an employee who “finds himself in
a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the
service and he has no other choice but to dissassociate himself from his employement.”
From the foregoing, it clearly appears that the petitioner voluntarily resigned from the
company for a valuable consideration. The quitclaim they executed in favor of the company amounts to
a valid and binding compromise agreement. To allow the petitioners to repudiate the same will be to
countenance unjust enrichment on their part. As testified by Ms. Aragon, in early April 1990, petitioner
told her that he was thinking of resigning. At that time petitioner had not yet made up his
mind. Apparently, he made his decision to voluntarily quit after the incident.

2011-0470
Case Title: Lopez Sugar Corp. v. Federation of Free Workers

G.R. no: G.R. 75700-01
Petitioner: Lopez Sugar Corporation
Respondent: Federation of Free Workers, Philippine Labor Union Association (PLUA-NACUSIP) and
National Labor Relations Commission
Facts:
Petitioner filed with the Bacolod District Office of the then Ministry of Labor and
Employment (“MOLE”) a combined report on retirement and application for clearance to retrench for
alleging of the prevent losses due to major economic problems, and exercising its privilege under Article
XI, Section 2 of its 1975-1977 Collective Bargaining Agreement (“CBA”) entered into between petitioner
and private respondent Philippine Labor Union Association (“PLUA-NACUSIP”). In the complaint, the
Federation of Free Workers claimed that the terminations undertaken by petitioner were violative of the
security of tenure of its members and were intended to “bust” the union and hence constituted an unfair
labor practice.
Issue:
Whether or not the dismissal were valid and justified
Held:
In the instant case, the Labor Arbiter found no sufficient and convincing evidence to
sustain petitioner’s essential contention that it was acting in order to prevent substantial and serious
losses. However, petitioner argued that under the law, it has the right to reduce its workforce if made
necessary by economic factors which would endanger its existence, and that for retrenchment to be valid,
it is not necessary that losses be actually sustained.
Clearly, the dismissal was not justified. Under the provision of the Labor
Code, the phrase "to prevent losses" means that retrenchment or termination of the services of some
employees is authorized to be undertaken by the employer sometime before the losses anticipated are
actually sustained or realized.

Marah Danielle D, Villarubia

2011-0470
Case Title: Metro Transit Organization Inc. v. NLRC

G.R. no: G.R. 119724
Date: May 31, 1999
Petitioner: Metro Transit Organization Inc.
Respondent: National Labor Relations Commission and Victorio T. Turing
Ponente: Mendoza, J.
Facts:
Private respondent Victorio T. Turing was a train operator of the light rail transit system of
petitioner and was dismissed due to abandonment of work for having been absent without leave (AWOL)
for a total of 10 days; after the incident, he applied for leave of absence for three days and after the
expiration of his leave, Turing failed to report for work. And because of numbers of absences, the
company’s social worker went to his house but unfortunately she learned that Turing had gone to
Calamba Laguna for the reason of domestic problems.
Issue:
Whether or not private respondent is guilty of abandonment of work
Held:
The resoulution of the NLRC is hereby affirmed.
For abandonment of work to be a just and valid ground for dismissal, there must be a (a)
deliberate and (b) unjustified refusal on the part of an employee to resume his employment. The burden
of proof is on the employer to show an unequivocal intent on the part of the employee to discontinue
employment. To warrant an abandonment, there must be (a) evidence (not only of the failure of an
employee to report for work or his absence without valid or justifiable reason), but also of his intention to
sever the employer-employee relationship. The second element is the more (b) determinative factor,
being manifested by overt acts.
In this case, petitioner was declared guilty of illegal dismissal on the basis by the Labor
Arbiter that the notice of termination addressed to complainant Turing showed that he was dismissed for
abandonment of work for having incurred a total of 17 days of absence without official leave and after his
explanation was found unmeritorious.

2011-0470
Case Title: Pascua v. NLRC

G.R. no: G.R. 123518
Petitioner: Lilia Pascua, Susan C. de Castro, Violeta M. Soriano and Victoria L. Santos
Respondent: National Labor Relations Commission (Third Division) and Tiongsan Super Bazaar
Facts:
The petitioners are among the thirty seven (37) employees of Henry Lao at the Tiongsan
Super Bazaar. They filed at the Regional Arbitration Branch of the NLRC separate complaints against
Henry Lao for illegal dismissal and claims for violation of labor standards pertaining to payment of wages.
Afterwards, both petitioners and respondent appealed to the NLRC. It found the termination of petitioners’
employment to be due either to voluntary resignation or dismissals with just cause; however, it awarded
separation pay to Victoria Santos. Petitioners’ motion for reconsideration was unavailing.
Petitioners further alleged that their dismissals were “oppressive and anti-social,”
complaining that it was “off-tangent and immaterial” for private respondent to discuss the “theft and price-
cutting of some employees of respondent bazaar because the offenses of some employees cannot be
imputed against the petitioners.”
Issue:
Whether or not the petitioners’ employment terminated due to resignation, abandonment,
or illegal dismissal
Held:
The petition is GRANTED. Petitioners Pascua, Macanlalay, De Castro and Soriano
are FOUND to have been illegally dismissed.
In the first place, the petitioners were not even served “a formal notice of dismissal.”
Citing Molave Tours Corporation vs. NLRC, et al., they argue that since resignation must be made with
the intent of relinquishing one’s office, the filing of their complaints for illegal dismissal is “wholly
incompatible” with private respondent’s assertion that they “voluntarily resigned.” The Solicitor General
contends that Petitioners Lilia Pascua, Victoria Santos and Susan C. De Castro resigned from their jobs;
that Mimi Macanlalay voluntarily left private respondent’s employ; and that Petitioner Violeta Soriano was
dismissed for just cause.
In the present case, the Court is convinced that the answer is in negative, regarding the
termination of the petitioners. Based on the evidence on record, the Court are more than convinced that
petitioners did not voluntarily quit their jobs. Rather, they were forced to resign or were summarily
dismissed without just cause; except in the case of Victoria L. Santos, who immediately took steps to
protest their layoff and thus cannot, by any logic, be said to have abandoned their work. Under the Labor
Code, as amended, the dismissal of an employee which the employer must validate has a twofold
requirement: one is substantive, the other procedural. Not only must the dismissal be for a just or an
authorized cause as provided by law (Articles 282, 283 and 284 of the Labor Code, as amended); the
rudimentary requirements of due process -- the opportunity to be heard and to defend oneself -- must be
observed as well.

2011-0470
Case Title: Revidad v. NLRC

G.R. no: G.R. 111105
Date: June 27, 1995
Petitioner: Rolando Revidad, Pablito Laluna, Rafael Angeles, Teodoro Rosario, Romeo Revidad,
Jacinto Gruta, Jose Español, Florentino Locsin, Rogelio Paradero, Marcelino Derota,
Armando Cabales, Benjamin Montesa and Raymond Vidal
Respondent: National Labor Relations Commission and Atlantic, Gulf and Pacific Company of Manila,
Inc.
Facts:
The present controversy started when private respondent terminated the services of 178
employees, including herein petitioners, under a redundancy program. As a
consequence, a complaint for illegal dismissal with prayer for reinstatement was filed by
herein petitioners. The said termination was pursuant to Presidential Directive No. 0191
issued on July 25, 1991 by the company’s president and containing management’s
decision to lay off 40% of the employees due to financial losses incurred from 1989-1990
– with this, the union of the employees staged a strike.
Issue:
Whether or not the en masse lay-off was valid and justified
Held:
The Decision appealed is hereby affirmed.
Petitioners contend that their lay-off on September 17, 1991 cannot be justified by the
losses suffered by AG & P from 1989 to 1990 since it had not been shown that such losses continued up
to 1991.
The Court found that the temporary lay-off of the petitioners is valid and justified, and that
by reason of management’s failure to recall them, their services shall be considered duly terminated and
they shall be entitled to separation pay equivalent to one month pay or at least one-half (1/2) month pay
for every year of service, whichever is higher. Also, convinced, that both the retrenchment program of
private respondent and the dismissal of petitioners were valid and legal. Added to it, it follows that the
employer bears the burden to prove his allegation of economic or business reverses with clear and
satisfactory evidence, it being in the nature of an affirmative defense.

2011-0470
Case Title: Reyes v. Court of Appeals

G.R. no: G.R. 154448
Petitioner: Dr. Pedrito F. Reyes
Respondent: Court of Appeals, Phil. Malay Poultry Breeders, Inc. and Leong Hup Poultry Farm SDN,
BHD., Mr. Francis T.N. Lau, President and Chairman of the Board and Mr. Chor Tee Lim,
Director
Ponente: Ynares-Santiago, J.
Facts:
Respondent Leong Hup Poultry Farms SDN. BHD (Leong Hup) of Malaysia, thru its
Managing Director Francis T. Lau, appointed petitioner Pedrito F. Reyes as Technical/Sales Manager.
Unfortunately, the respondent suffered losses which caused them to reduce production and retrench
employees in Philmalay. Furthermore, petitioner confirmed his verbal notice of resignation, provided, that
he be given the same benefits granted to retrenched and resigned employees of the company, consisting
of separation pay equivalent to one month salary for every year of service and the monetary equivalent of
his sick leave and vacation leave.
Issue:
Whether or not the termination of petitioner’s employment caused by retrenchment or by
voluntary resignation
Held:
The Court found that petitioner’s dismissal from service was due to retrenchment, as
supported by the evident from the termination letter sent by Philmalay to petitioner. The NLRC also
correctly ruled that the car and insurance benefits are granted only during the course of employment;
hence, they should not be part of petitioner’s separation package likewise in claiming for payment of
rental – for the reason that, it may constituted with a wrong standard. However, petitioner is entitled to the
award of vacation leave as part of respondents’ retrenchment incentives.


2011-0470
Case Title: San Miguel Jeepney Service v. NLRC

G.R. no: G.R. 92772
Petitioner: San Miguel Jeepney Service and Mamerto Galace
Respondent: National Labor Relations Commission, Edelberto Padua, and 23 others
Facts:
The 23 complainants were formerly working (as drivers, dispatchers and mechanic) with
petitioner San Miguel Jeepney Service (SMJS), with services ranging from two to eight years. Petitioner
SMJS had a contract with the U.S. Naval Base Facility located in San Miguel, San Antonio, Zambales, to
provide transportation services to personnel and dependents inside said facility. When the said contract
expired on May 2, 1988, Galace, owner and general manager of SMJS, “opted not to renew the existing
contract nor bid on the new contract,” due to financial difficulties, he having suffered a net loss the prior
year. As a consequence, the services of the complainants were terminated and had already filed a
complaint for non-compliance with the minimum wage law from 1980 onwards, plus non-payment of the
13th month pay, legal holiday pay, overtime pay, service incentive leave pay and separation pay. On the
other hand, petitioners rejected any liability for the money claims.
Issue:
Whether or not SMJS is suffering from sliding income
Held:
The assailed Resolution of public respondent NLRC is hereby affirmed.
Prior with the status of the petitioners, they were in misery because of “sliding income”
also known as, decreasing gross revenues. What the law speaks of is serious business losses or financial
reverses. Clearly, sliding incomes are not necessarily losses, much less serious business losses within
the meaning of the law. Thus, it cannot justify the non-payment of separation pay.

2011-0470
Case Title: Somerville Stainless Steel Corporation v. NLRC

G.R. no: G.R. 125887
Petitioner: Somerville Stainless Steel Corporation
Respondent: National Labor Relations Commission and Jerry Macandog, Reynaldo Miranda, Roberto
Tagala, et al.
Facts:
The present controversy was triggered by the inability of the respondent company to pay
its workers certain benefits stipulated in their collective bargaining agreement (CBA) starting on March 16,
1993. The CBA benefits (rice subsidy, incentive leave pay, hospitalization, t-shirts and safety shoes and
incentive bonus) were withheld by management. A month after, the complainants alleged that their union
represented by their president and vice-president, communicated with respondents for a renegotiation of
their CBA but the same was rejected by the latter. Complainants stressed out that their dismissal was
without just cause and in utter disregard of their right to due process and also asserted that the true
intention of management was to bust their union which was very insistent on the renegotiation and
renewal of their CBA with the respondent company.

Issue:
Whether or not the retrenchment undertaken is valid
Held:
Retrenchment is one of the “authorized” causes for the dismissal of employees. Resorted
to by an employer to avoid or minimize business losses. To prove its loss, petitioner presented only its
financial statements including the gross income and net loss for the fiscal year that ended on December
31, 1992. The failure of petitioner to show its income or loss for the immediately preceding years or to
prove that it expected no abatement of such losses in the coming years bespeaks the weakness of its
cause. The financial statement for 1992, by itself, does not sufficiently prove petitioner’s allegation that it
“already suffered actual serious losses,” because it does not show whether its losses increased or
decreased.

2011-0470
Case Title: Willi Hahn Enterprises v. Maghuyop

G.R. no: G.R. 160348
Petitioner: Willi Hahn Enterprises and/or Willi Hahn
Respondent: Lilia R. Maghuyop
Ponente: Ynares-Santiago, J.
Facts:
The controversy started when the respondent was hired by the petitioner as nanny to one
of his sons and later on employed as salesclerk of Willi Hahn Enterprises, soon after got promoted as
Store Manager of its branch. While the petitioner conducted an Inventory Report, he discovered that its
branch in Cebu incurred stock shortages and non remittanced with a total of almost P27, 000. Afterwards,
the petitioner decided to terminate the services of Maghuyop, on which at that time, the latter caring her
resignation, too. Maghuyop claimed that she was approached by certain persons who ordered her to
close the shop and to provide a letter for thanking the Hahn spouses for all the benefits she received
coming from the spouses, but the respondent disobey the order. Due to force, Tony Abu typed the
resignation letter then later on haved her signature on it. As a consequence, respondent filed a complaint
with the NLRC for alleging that she should be awarded backwages, separation pay which was withheld by
Mr. Hahn
Issue:
Whether or not respondent voluntarily resigned as manager of the SM Cebu branch
Held:
Based from the letter presented by the respondent, the Court found no merit in
respondent’s claim that being a mere clerk, she did not realize the consequences of her resignation. The
rule that the filing of a complaint for illegal dismissal is inconsistent with resignation is not applicable to
the instant case. The filing of an illegal dismissal case by respondent was evidently a mere afterthought. It
was filed not because she wanted to return to work but to claim separation pay and backwages. The
failure of petitioner to pursue the termination proceedings against respondent and to make her pay for the
shortage incurred did not cast doubt on the voluntary nature of her resignation and be deemed as an act
of consideration being a close member of the household.
Hence, the Court found, no reason to deviate from the conclusion of both the NLRC and
the Labor Arbiter that respondent, having tendered a voluntary resignation was not illegally dismissed.


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LABOR STANDARDS AND SOCIAL LEGISLATION

 Whether or not private respondents are entitled to separation pay?

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 1

CALALANG VS WILLIAMS (Social Justice as the aim of Labor Laws)

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 2

CEREZO VS THE ATLANTIC & PACIFIC COMPANY

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 3

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 4

COLGATE PALMOLIVE PHILIPPINES VS OPLE

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 5

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 6

EURO-LINEA PHIL., INC., VS NLRC

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 7

GELMART INDUSTRIES PHIL., INC., VS NLRC

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 8

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 9

MANILA ELECTRIC COMPANY VS NLRC

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 10

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 11

MATERNITY CHILDREN’S HOSPITAL VS SECRETARY OF LABOR (Labor Law defined)

“Labor standards refer to the minimum requirements prescribed by existing laws,

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 12

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 13

MENDOZA VS RURAL BANK OF LUCBAN

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 14

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 15

PEOPLE VS POMAR (Police Power as the basis of Labor Laws)

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 16

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 17

PEOPLE VS VERA REYES

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 18

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 19

PHILIPINE ASSOCIATION OF SERVICE EXPORTERS INC VS DRILON

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 20

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 21

REPUBLIC VS COURT OF APPEALS

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 22

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 23

SOSITO VS AGUINALDO DEVELOPMENT CORPORATION

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 24

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 25

ASSOCIATED WATCHMEN AND SECURITY UNION VS LANTING

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 26

CBTC EMPLOYEES UNION VS. CLAVE

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 27

CHINA BANKING CORPORATION VS. BORROMEO

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 28

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 29

GREGORIO ARANETA EMPLOYEES VS. ROLDAN

The petition is denied, without pronouncement as to costs.

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 30

LAGATIC VS. NLRC

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 31

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 32

LUZON DEVELOPMENT BANK VS. ASSOCIATION OF LUZON DEVELOPMENT BANK, ET AL.

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 33

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 34

NATIONAL HOUSING CORPORATION VS. JUCO

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 35

NATIONAL SERVICE CORPORATION VS. NLRC

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 36

PAMPANGA BUS COMPANY VS PAMBUSCO EMPLOYEES UNION

ARELLANO UNIVERSITY SCHOOL OF LAW LSSL CASE DIGESTS Page 37