Augustin International vs. Bartolome, G.R. No.
Whether or not the LA correctly took cognizance of
226578, Jan. 28, 2019
Labor Law; Jurisdiction of the Labor Arbiter vis – a –
vis Dispute Settlement Provision in Employment
Contract: Section 10 of Republic Act No. (RA) 8042,
as amended by RA 10022 provides that
notwithstanding any provision of law to the contrary,
the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within
ninety (90) calendar days after filing of the
complaint, the claims arising out of an employer-
employee relationship or by virtue of any law or
contract involving Filipino workers for overseas
deployment including claims for actual, moral,
exemplary and other forms of damages. Settled is
the rule that jurisdiction over the subject matter is
conferred by law and cannot be acquired or
waived by agreement of the parties. The dispute
settlement provision in respondents’ employment
contracts cannot divest the LA of its jurisdiction over
the illegal dismissal case.
PERLAS – BERNABE, J.:
FACTS:
Respondents Bartolome and Yamat were hired as
carpenter and tile setter by Golden Arrow Company
Ltd. (Golden Arrow) which had its office in
Khartoum, Republic of Sudan, through petitioner
AICI, an employment agency providing manpower
to foreign corporations. Their employment contracts
stated that they would render services for a period
of not less than 24 months. Also, it included a
provision on dispute settlement which reads:
14. Settlement of disputes: All claims and complaints
relative to the employment contract of the
employee shall be settled in accordance with
Company policies, rules[,] and regulations. In case
the Employee contests the decision of the employer,
the matter shall be settled amicably with [the]
participation of the Labor Attaché or any authorized
representative of the Philippines Embassy nearest the
site of employment.
Upon arrival in Sudan, Bartolome and Yamat were
transferred by Golden Arrow to its sister company, Al
Mamoun Trading and Investment Company (Al
Mamoun) which terminated their services after a
year due to abandonment of duties. Respondents
then filed a complaint before the NLRC for illegal
dismissal, breach of contract and payment of
unexpired portion of the contract against AICI and
Al Mamoun. The Labor Arbiter (LA) ruled in favor of
the respondents. Upon appeal, the NLRC affirmed
the decision of the LA which led AICI and Al
Mamoun to file a petition for certiorari before the
CA. The latter denied the petition holding that AICI
and Al Mamoun failed to comply with procedural
and substantive due process in dismissing the
respondents.
ISSUE:
the case despite the presence of a provision in the
employment contract on dispute settlement.
HELD:
AFFIRMATIVE. Section 10 of Republic Act (RA) 8042,
as amended by RA 10022, explicitly provides that
LA’s have original and exclusive jurisdiction over
claims arising out of employer-employee relations or
by virtue of any law or contract involving Filipino
workers for overseas deployment.
Settled is the rule that jurisdiction over the subject
matter is conferred by law and cannot be acquired
or waived by agreement of the parties. As herein
applied, the dispute settlement provision in
respondents’ employment contracts cannot divest
the LA of its jurisdiction over the illegal dismissal case.
Hence, it correctly took cognizance of the
complaint filed by respondents before it.
Moreover, issues not raised in the previous
proceedings cannot be raised for the first time at a
late stage. In this case, the Court observes that AICI
failed to raise the issue of respondents’ supposed
non-compliance with the dispute settlement
provision before the LA, as well as before the NLRC.
In fact, AICI only mentioned this issue for the first time
before the CA in its motion for reconsideration.
Therefore, such argument or defense is deemed
waived and can no longer be considered on
appeal. Hence, the Court rules that the LA properly
took cognizance of this case.
Disability complaint filed prior to the issuance of
medical assessment is not premature if delay is
cause by the company.
Paringit vs. Global Gateway, G.R. No. 217123, Feb. 6,
2019
DOCTRINE: Disability benefits entitlement rules
provide that:
a. 120 days provided under Section 20-B (3) of the
POEA-SEC is the period given to the employer to
determine fitness to work and when the seafarer is
deemed to be in a state of total and temporary
disability;
b. the 120 days of total and temporary disability may
be extended up to a maximum of 240 days should
the seafarer require further medical treatment; and
c. a total and temporary disability becomes
permanent when so declared by the company
designated physical within 120 or 240 days, as the
case may be, or upon the expiration of the said
periods without a declaration of either fitness to work
or permanent disability and the seafarer is still unable
to resume his regular seafaring duties.
Disability benefits; Compensability; nature of
employment is not the only determinant of seafarer's
illness; Reasonable connection; m120-day rule; 240-
day rule; Filing of complaint prior to issuance of
medical assessment; Effect of filing if the cause of
delay of assessment is the company.
LEONEN, J.:
FACTS:
Petitioner Paringit entered into a six (6)-month
employment contract with MidSouth Ship and Crew
Management, Inc., representing Seaworld Marine
Services, S.A. He was employed as Chief mate of the
Panaman vessel Tsavliris Hellas.
Prior to his deployment, Paringit underwent a pre-
employment medical examination, where he
disclosed that he had high blood pressure. Still, he
was declared fit for duty. A few months later, Paringit
began to feel constantly fatigues and stressed. He
also noticed blood in his feces.
When the vessel was docked at the port of Las
Palmas, Spain, Paringit was rushed to the intensive
care unit of Clinica Perpetuo Soccoro, where he
underwent blood transfusion. He was later on
discharged from the ICU with a diagnosis of:
"decompensated cardiac insufficiency. Severe
anemia. Renal dysfunction." He was transferred to a
regular room for further treatment and monitoring
and was discharge from the hospital.
He was soon medically repatriated and arrived in
Manila on February 9, 2012.
Paringit was admitted to the YGEIA Medical Center
for evaluation and management. He again
underwent blood transfusion and was placed on
medication. He was discharged from the hospital
with a work diagnosis of: 'Congestive Heart Failure;
Hypertensive Cardiovascular Disease; Valvular Heart
Disease; Anemia Secondary to Upper GI Bleeding to
Bleeding Peptic Ulcer Disease." Dr. Quetulio, the
company-designated physician, prescribed
Paringit's medication and advised him to return to
the hospital for checkup.
On June 4, 2012, Paringit consulted Dr. Donato-Tan a
cardiologist at the Philippine Heart Center. After
evaluating Paringit and reviewing the results of his
laboratory examinations, Dr. Donate-Tan concluded
that with his heart condition, he would need regular
medication, further laboratory procedures, and
periodic check-ups with a cardiologist to prevent
any aggravation of his illness. She declared him to
be permanently disabled and unfit for duty as a
seaman.
On June 11, 2012, Paringit filed a Complaint for
medical expenses and other money claims against
Global Gateway Crewing Services, Inc., Mid-South
Ship & Crew Management, Inc., Seaworld Marine
Services, S.A., and Captain Simeon Flores (Captain
Flores), president of Global Gateway.
On June 13, 2012, Paringit executed a
quitclaim,[25] where he acknowledged receiving
US$6,636.70 from St. Tsavliris Hellas as his sickness
allowance from February 8, 2012 to June 8, 2012.
On June 18, 2012, Dr. Quetulio informed Global
Gateway that Paringit seemed hesitant to undergo
the recommended operation and instead opted for
herbal treatment. She also stated that Paringit's
heart condition was preexisting, not work-related
After the parties failed to settle the issue, they were
directed to submit their respective position papers.
Labor Arbiter’s Ruling: It granted Paringit's
Complaint. The LA Arbiter found that his various
illnesses were work-related or work-aggravated,
brought about by the type of food served and the
stressful nature of his job aboard the ship.
Further, LA Savari found that since Dr. Donato-Tan
declared Paringit's unfitness to work as a seafarer, his
disability was total and permanent. (jointly and
severally to pay disability Grade 1,
US$60,000.00 plus 10% thereof as and by way of
attorney's fees.)
NLRC Ruling: It dismissed the Appeal and affirmed
Labor Arbiter Savari 's Decision.
The National Labor Relations Commission upheld
Labor Arbiter Savari's ruling that Paringit was entitled
to permanent total disability benefits, his illness being
work-related and acquired during the term of his
employment contract.
CA Ruling: Granted their Petition.
The Court of Appeals faulted Paringit for choosing an
alternative treatment, then demanding permanent
and total disability benefits based on his doctor's
assessment on his unfitness for sea duty, rather than
consulting a third physician as required by law.
Further, the Court of Appeals noted that Paringit filed
his Complaint 124 days after his medical repatriation,
which was still well within the 240-day medical
treatment period granted to his employer. Thus, the
Complaint was premature since he had no cause of
action for his claim of total and permanent disability
benefits.
ISSUES:
1. Whether or not compensability shall be
determined solely by the nature of work
2. Whether or not the filing of the complaint prior to
the issuance of disability assessment is premature
when the company refused to respond to seafarer's
request for open-heart surgery as recommended by
the physician
RULING:
1. The POEA Standard Employment Contract defines
a work-related illness as "any sickness as a result of an
occupational disease listed under Section 32-A of
this Contract with the conditions set therein satisfied."
Paringit took medication to normalize his blood
p[pressure, but the working conditions and
mandatory diet abroad the vessel made it difficult
and nearly impossible for him to maintain a healthy
lifestyle. he stressed that he and other seafarers were
severed mostly of high-fat, high-cholesterol and low-
fiber food abroad the vessel. Furthermore, his work
as Chief mate carried considerable stress and
required him to stay up for long stretches of time, up
to the early hours of the morning.
The SC likewise adhered to the factual finding of the
LA that Paringit despite being hypertensive was
declared fit to work in his pre-employment medical
examination. Moreover, the poor food choices in his
workplace led to contributed to his heart disease. He
was declared fit to work prior to embarkation,
hence, there is no other conclusion that that he
developed or his illness were triggered or
aggravated on board and his working conditions
precipitated his unknown illness. Hence, his disease
which are congestive heart failure, hypertensive
cardiovascular disease, valvular heart disease are
work-related or aggravated because the fats and
chemical in frozen and preserved meats congested
his arteries. His stress caused peptic ulcer to him.
Clearly, his illness are work-related and aggravated.
Citing Magsaysay Maritime Services, et al. vs Laurel,
the SC emphasized that in determining the
compensability of an illness, it is not necessary that
the nature of the employment be the sole reason for
the seafarer's illness. A reasonable connection
between the disease and work undertaken already
suffices.
2. The case of Vergara vs Hammonia Maritime
Services, Inc et.al explained the relevant rules and
period for reckoning a seafarer's permanent
disability for entitlement to disability benefits. Kestrel
Shipping Co., Inc vs Muna then summarized the rules
for entitlement to disability benefits discussed in
Vergara.
The records show that Dr. Quetulio recommended
Parinigit to undergo open-heart surgery, but Global
gateway failed or refused to act on this. Dr. Quetulio
first broached the possibility of open-heart surgery on
March 5, 2012, about a month after Paringit’s
medical repatriation. the succeeding weeks led to
her formally advising Global gateway of Paringit's
need for open-heart surgery, yet the company failed
or refused to respond her request, despite repeated
follow-ups.
The CA faulted Paringit for filing a Complaint before
Dr. Quetulio could issue disability assessment, and
declared that she had 240 days to do so since
Paringit needed additional treatment and
evaluation. However, Global Gateway's deafening
silence over the requested operation, stretching
beyond the mandated 120 days within which Dr.
Quetulio could give her assessment, it cannot be
said that she needed additional time to assess
Paringit’s condition.
The facts show that Paringit had to undergo an
open-heart surgery before Dr. Quetulio could
properly assess his condition and issue a disability
assessment. Unfortunately, Dr. Quetulio had reached
an impasse with her management of Paringit's case.
Global gateway's silence meant that she could
neither issue the required disability assessment within
120-day period nor extend the period to 240 days to
further evaluate and treat Paringit.
Dr. Quetulio's failure to timely issue a disability
assessment was due to Global Gateway, not
because Paringit impliedly refused treatment due to
his supposed inclination toward an alternative
treatment, as the CA held. Thus, the labor tribunals
did not err in giving credence to the findings of the
private physician.
The POEA Standard Employment Contract spells out
the conditions for compensability. Here, the
compensability of Paringit's conditions is clear;
however, instead of fulfilling its responsibilities, Global
Gateway delayed his treatment and raised
technical procedure barriers that were clearly
unwarranted.
Employee can be validly dismissed for violation of
Union Security Clause: Parallel treatment of Violation
with Just Cause:
Slord Development vs. Noya, G.R. No. 232687, Feb. 4,
2019
DOCTRINE: Employee who violates the union security
clause provision in the CBA may be validly dismissed.
Due process must be observed by the employer.
Union Security Clause; Valid Dismissal for Violation of
the Union Security Clause Provision; Parallel
Treatment Between Violation of Union Security
Clause and Just Clause; procedural Due Process in
Termination Due to Violation of Union Security
Clause; Freedom Period; Member-Employee
Cannot Organize Another Union Outside of the
Freedom Period
PERLAS – BERNABE, J.:
FACTS:
Respondent Noya was employed as a welder by
Slord Development Corporation (Slord). Noya's
employment was covered by a CBA effective April
14, 2009 to April 15, 2014 between Slord's and NLM-
Katipunan, the company’s sole and exclusive
bargaining agent for all the regular rank-and-file
employees.
Among its provisions was a union security clause
which states as cause for dismissal of any new
employee covered by the bargaining unit, who
attains regular status in the company but fails to join
the union mentioned and any union member who us
expelled from the union or fails to maintain their
membership in the union.
Slord claimed that sometime in December 2013,
Noya asked several employees to affix their
signatures on a blank sheet of yellow paper for the
purpose of forming a new union, prompting the
president of NLM-Katipunan to file expulsion
proceedings against him for disloyalty.
Subsequently, Noya organized a new union named
the Bantay Manggawa sa SLORD Development
Corporation (BMSDC), which he registered with the
DOLE.
In the ensuing investigation, Noya failed to appear
and participate at the scheduled hearings before
the union. Thus, NLM-Katipunan resolved, with the
ratification of its members, to expel Noya on the
ground of disloyalty. Accordingly, a notice of
expulsion was issued by NLM-Katipunan to Slord,
demanding his termination from employment
pursuant to the union security clause of the CBA.
After notifying Noya of the union's decision to expel
him and showing min all the documents attached to
the union's demand for his dismissal, Noya's
employment was terminated.
Consequently, Noya filed a complaint for illegal
dismissal, unfair labor practice, and illegal deduction
against Slord before the NLRC, asserting that he did
not violate any CBA provisions since he validly
organized BMSDC during the freedom period.
LA Ruling:
The LA dismissed the case for lack of merit, ruling that
Noya's dismissal was neither illegal nor an unfair labor
practice.
Among others, the LA held that Slord was duty-
bound to terminate Noya's employment after
having been expelled by NLM-Katipunana for
organizing a rival union. Notably, NLM-Katipunan has
a valid closed shop agreement in the CBA that
required the member to remain with the union as a
condition for continued employment.
NLRC Ruling:
The NLRC affirmed the LA Decision with modification,
ordering Slord to pay Noya P10, 000.00 as nominal
damages.
In so ruling, the NLRC held that while Noya had
committed an act of disloyalty that caused his
expulsion from NLM-Katipunan and subsequent
dismissal from work pursuant to the closed shop
agreement provision of the CBA, Slord failed to
provide Noya ample opportunity to defend himself
through written notices and subsequent hearing.
CA Ruling:
The CA granted Noya's peition, finding his dismissal
to be illegal.
Accordingly, it ordered Slord to immediately
reinstate Noya and pay full backwages and other
allowances, computed from the time he was illegally
dismissed up to the time of actual reinstatement, plus
attorney's fees.
The CA found no just cause in terminating Noya's
employment for lack of sufficient evidence to
support the union's decision to expel him, explaining
that the act of soliciting signatures on a blank yellow
paper was not prohibited under the Labor Code not
could it be automatically considered as an act of
disloyalty. Finally, it also found Noya to have been
deprived of procedural due process.
Slord moved for reconsideration by the same was
denied. Hence, the petition before the SC.
ISSUE:
Whether or not an employee can be validly
dismissed for non-compliance with the union security
clause in the CBA
RULING:
The SC found the petition meritorious.
While not explicitly mentioned in the Labor Code,
case law recognizes that dismissal from employment
due to the enforcement of the union security clause
in the CBA is another just cause for termination of
employment.
Similar to the enumerated just causes in the Labor
Code, the violation of the Union security clause
amount to a commission of a wrongful act or
omission out of one's own volition; hence, it can be
said that the dismissal process was initiated not by
the employer but by the employee's indiscretion.
Further, a stipulation in the CBA authorizing the
dismissal of employees is of equal import as the
statutory provisions on dismissal under the Labor
Code, since a CBA is the law between the company
and the union and compliance therewith is
mandated by the express policy to give protection
to labor; thus there is parallel treatment between just
causes and violation of the union security clause.
Pertinent is Article 259 (formerly 248), paragraph (e)
of the Labor Code, which states that nothing in this
Code or in any other law shall stop the parties from
requiring membership in a recognized collective
bargaining agent as a condition for employment,
except those employees who are already member
of another union at the time of the signing of the
collective bargaining agreement. The stipulation in
a CBA based on this provision of the Labor Code is
commonly known as the "union security clause".
"Union security is a generic term which is applied to
and comprehends "closed shop, " union shop",
"maintenance of membership" or any other form of
agreement which imposes upon employees the
obligation to acquire or retain union membership as
a condition affecting employment.
There is union shop when all new regular employees
are required to join the union within a certain period
for their continued employment.
There is maintenance of membership shop when
employees, who are union members as of the
effective date of the agreement, or who thereafter
become members, must maintain union
membership as a condition for continued
employment until they are promoted or transferred
out of the bargaining unit, or the agreement is
terminated.
A closed shop, on the other hand, may be defined
as an enterprise in which, by agreement between
the employer and his employees or their
representatives, no person may be employed in any
or certain agreed departments of the enterprise
unless he or she is, becomes, and for the duration of
the agreement, remains a member in good standing
of a union entirely comprised of or of which the
employees in interest are apart.
To validly terminate the employment of an
employee through the enforcement of the union
security clause, the following requisites must concur:
a. the union security clause is applicable;
b. the union is requesting for the enforcement of the
union security provision on the CBA; and
3. there is sufficient evidence to support the decision
of the union to expel the employee from the union.
In this case, the Court finds the confluence of the
foregoing requisites, warranting the termination of
Noya's employment. It is undisputed that the CBA
contains a closed shop agreement stipulation that
Slord's employees must join NLM-Katipunan and
remain to be a member in good standing; otherwise,
through a written demand, NLM-Katipunan can insist
the dismissal of an employee. Notably, the Court has
consistently upheld the validity of a closed shop
agreement as a form of union security clause.
Further, record show that NLM-Katipunan requested
the enforcement of the union security clause by
demanding the dismissal of Noya from employment.
in a letter, NLM-Katipunan asked Slord to dismiss
Noya from employment for having committed an
act of disloyalty in violation of the CBA's union
security clause. NLM-Katipunan explained that Noya
solicited support from employees and thereafter,
formed and organized a new union outside the
freedom period, or from February 14, 2014 to April 14,
2014.
Finally, there is sufficient evidence to support the
union's decision to expel Noya. In Tanduay Distillery
labor Union vs NLRC, the Court ruled that the
organization by union members of a rival union
outside the freedom period, without first terminating
their membership in the union and without the
knowledge of the officers of the latter union, is
considered as an act of disloyalty, for which the
union members may be sanctioned. As an act of
disloyalty, a union may require its members no to
affiliate with any other labor union and to consider
its infringement as a reasonable cause for
separation, pursuant to the union security clause in
its CBA. Having ratified the CBA and being member
of the union, union members owe fealty and are
required under the union security clause to maintain
their membership in good standing during the term
thereof. This requirement ceases to be binding only
during the sixty (60) day freedom period
immediately preceding the expiration of the CBA,
which enjoys the principle of sanctity or inviolability
of contracts guaranteed by the Constitution.
Thus, based on the above-discussed circumstances,
the NLRC did not gravely abuse its discretion in ruling
that there existed just cause to vaildly terminate
Noya's employment. this notwithstanding, Slord
howeever, failed to observe the proper procedure in
terminating Noya's employment, warranting the
payment of nominal damages.
In Distribution and Control Products Inc vs Santos, the
Court has explained that procedural due process
consists of the twin requirements of notice and
hearing:
1. the first apprises the employee of the particular
acts or omissions for which his dismissal is sought;
2. the second informs the employee of the
employer's decision to dismiss him. The requirement
of a hearing is complied with as long as there was an
opportunity to be heard, and not necessarily that an
actual hearing was conducted.
Cadavas vs. Court Of Appeals, Davao Doctors, G.R.
No. 228765, Mar. 20, 2019
PERALTA, J.:
PETITIONER Minda Cadavas was hired as a staff nurse
by respondent Davao Doctors Hospital (DDH). She
was later promoted to nurse supervisor.
Sometime in February 2012, Cadavas’ aunt, Shirley
Aninion, was confined at DDH for stage four breast
cancer. Cadavas, with the help of some hospital
staff, was able to obtain supplies and medicines
used in her aunt’s operation from the Emergency
Department and Operating Room Central Supply
Service without being entered in the records so that
said supplies and medicines would not be charged
to her aunt’s bill, but Cadavas would replace and
eventually replaced them.
During the administrative hearing, Cadavas
admitted that she was aware of the hospital policy
prohibiting what she did, but alleged it has been a
long practice among employees.
Subsequently, Cadavas was dismissed from the
service for dishonesty and loss of trust and
confidence.
ISSUE:
Is the dismissal justified?
RULING:
Yes.
In the minutes of the administrative hearing
conducted by respondent DDH, petitioner admitted
that there is no policy that employees can borrow
supplies for personal use. She also admitted that she
was aware of the hospital’s policy against the
purchase of medicines outside the hospital. She
apologized for buying medicines and supplies
outside the hospital (to replace the ones used by her
aunt).
Thus, it is clear that despite knowing that there is a
policy against the purchase of supplies and
medicines outside the hospital, petitioner chose to
violate the policy by asking a nursing aide if she
could replace the supplies and medicines used by
her aunt. As the nursing aide acceded to petitioner’s
request, the medicines and supplies used by
petitioner’s aunt were not recorded and charged to
her per the agreement that petitioner would replace
the said medicines and supplies.
In effect, petitioner caused the transaction not to be
recorded. Although petitioner was not then
performing her duties and functions as nurse
supervisor in her departments, nevertheless, as an
employee and nurse supervisor of respondent DDH,
she was covered by the policy against the use of
hospital medicines and supplies without recording
such use, and purchasing medicines and supplies
outside of respondent hospital to replace hospital
medicines and supplies already used.
Notably, petitioner was aware of such hospital
policy, but she still violated it. As a nurse supervisor
holding a position of trust, petitioner was expected
to enforce and observe hospital policies. Clearly,
petitioner breached the trust and confidence
reposed in her by respondent DDH by her willful
violation of the said hospital policy, causing loss of
income to respondent DDH.
As a general rule, employers are allowed a wider
latitude of discretion in terminating the services of
employees who perform functions by which their
nature requires the employer’s full trust and
confidence. Mere existence of basis for believing
that the employee has breached the trust and
confidence of the employer is sufficient and does
not require proof beyond reasonable doubt. (Minda
Topinio Cadavas vs. Court of Appeals, et.al. G.R. No.
228765, March 20, 2019).
Philippine Journalists vs. De Guzman, G.R. No.
208027, April 1, 2019
Erika Marie de Guzman and Edna Quirante6 are
both employees of Philippine Journalists, lnc.7 ('PJI').
De Guzman started with the company on 11 May
1994 and left the company on 15 November 2008.
On the other hand, Quirante was employed since 05
September 1989 and was the HRD Supervisor at the
time the cessation of her employment on 15 March
2009. In separate letters, informed the company of
their desire to avail of the company's optional
retirement plan as embodied in the CBA
Because of PJI's failure and refusal to process the
payment of the optional retirement benefits due
them, [respondents] filed a complaint for unfair labor
practice and money claims, nonpayment of
optional retirement benefits and service incentive
leave against PJI and its corporate officers,
LA- dismissed the complaint for lack of merit.
According to the Labor Arbiter, the Collective
Bargaining Agreement categorized certain positions
as managerial and are therefore excluded from the
bargaining unit. [Respondents] are not rank and file
employees and therefore not entitled to optional
retirement benefits.
NLRC - sustained [respondents'] contention.
Section 3, Article XIV of the CBA provides:
'Section 3. Optional Retirement. A regular employee
who
[h.]as continuously rendered .five (5) years qf
service, may optionally retire from employment with
the COMP ANY. A qualified employee who avails
himself an optional retirement shall receive optional
retirement pay computed on the basis of the
approved Retirement Plan. '
The language of this provision is clear and leaves no
room for interpretation. Clearly an 'approved
optional retirement plan' is no longer required as the
optional retirement pay shall be 'computed on the
basis of the Approved Retirement Plan' which is
provided for in Section 2 of the same Article of the
CBA. xxx
xx xx
The CBA however specifically provides that the word
'employee' 'when used in this Agreement without
any classification shall be deemed to refer only to
person within the appropriate bargaining unit as
herein defined.'
The preceding paragraph of the same Section 1
defined appropriate bargaining unit as 'covered by
this AGREEMENT consists of regular rank-and-file
employees except those occupying the position/job
classifications enumerated in Annex A hereof
assigned to its various operations in Metro Manila
and other branches of operations which the COMP
ANY may establish in the Philippines during the term
of this AGREEMENT.'
Admittedly, the respondents belong to the listed
employees in Annex A of the CBA who are excluded
from its coverage.
[Respondents] argued that even if there are
categories of employees who are excluded from the
coverage of the CBA, the company, as a matter of
practice, has extended benefits under the CBA to
those who have been excluded. They cite in
particular the cases of former employees, Nepthalie
Hernandez, Ferdinand Trinidad, and Atty. Liza
Madera, who availed of, and were granted optional
retirement benefits despite being managerial
employees.
CA- affirmed NLRC. xx x The provision of the CBA
granting xx x optional retirement is clear.
Petitioners insist that x x x respondents are not
covered by the CBA pursuant to the provisions
thereof that Quirante and De Guzman belong to the
listed employees who are excluded from the
coverage of the CBA. Quirante was the Supervisor of
the HR Department, hence a managerial employee.
De Guzman, aside from being an Ad Taker, was the
Executive Security of the Chairman of Pll, thus
receiving a salary commensurate to the position of
an executive staff.
Therefore, De Guzman and Quirante are not entitled
to the optional retirement benefits pursuant to the
provisions of the CBA.
Nonetheless, they can still avail of the optional
retirement benefits because it has been a company
practice to grant retirement benefits to PJI
Employees.
In Philippine Appliance Corporation v. Court of
Appeals, as accentuated in Metropolitan Bank and
Trust Companyv. NLRC and in Eastern
Telecommunications Philippines, Inc. v. Eastern
Telecoms Employees Union:
To be considered a 'regular practice', however, the
giving of the bonus should have been done over a
long period oftime, and must be shown to have
been consistent and deliberate. The test or rationale
of this rule on long practice requires an indubitable
showing that the employer agreed to continue
giving the benefits knowing fully well that said
employees are not covered by the law requiring
payment thereof.
Thus, the grant of optional retirement benefits by PJI,
even if it is not obliged under the CBA, already
constitutes voluntary employer practice which
cannot be unilaterally withdrawn or diminished by
the employer without violating the spirit and
intendment of Article 100 of the Labor Code, to wit:
Art. 100. Prohibition against elimination or diminution
of benefits. - Nothing in this Book shall be construed
to eliminate or in any way diminish supplements, or
other employee benefits being enjoyed at the time
of promulgation of this Code.
ISSUES:
1. WHAT IS THE DISTINCTION BETWEEN COMPULSORY
RETIREMENT BENEFIT AND OPTIONAL RETIREMENT
BENEFIT.
2. WHETHER OR NOT THE OPTIONAL RETIREMENT
BENEFIT CAN BE DEMANDED AS A MANDATORY
BENEFIT BY A REGULAR EMPLOYEE WHO VOLUNTARILY
RESIGNS EVEN WITHOUT AN OPTIONAL RETIREMENT
PROGRAM APPROVED BY THE MANAGEMENT.
Petitioners' Arguments
Petitioners argue that a distinction must be made
between compulsory retirement benefit and that
optional retirement benefit, in that while the former
may be demanded as a matter of right pursuant to
Article 287 of the Labor Code, 17 the latter may not.
Petitioners allege that PJI was suffering losses at the
time respondents applied for optional retirement,
and in fact the company implemented a
retrenchment program owing to these losses. They
also aver that there was no express company policy
on optional retirement at the time that respondents
applied for the same, but with respect to those
employees who were granted optional retirement
benefits in the past, these were covered by an
existing approved optional retirement program as
attested to by one of those who availed of the
program, Atty. Madera, and two other longtime Pil
employees, Carolina Mendoza and Ernesto San
Agustin.
Our Ruling
Quite the contrary, in Philippine Journalists, Inc. v.
National Labor Relations Commission, it became
evident that PJI was not suffering from claimed
business reverses such that it was compelled to
reinstate several employees it originally fired as a
result of a retrenchment program it undertook but
which the NLRC officially found to be without basis.
There was also the undisputed findings of fact that
during that time, PJI office renovations were being
made as evidenced by numerous purchase orders;
that certain employees were granted merit
increases; that a Christmas party for employees was
held at a plush hotel; and that Pil executives refused
to forego their quarterly bonuses.
Petitioners' claim of business reverses is supported
solely by a statement contained in a supposed 2005
agreement between PJI and its employees, a
"Memorandum of Understanding xx x,"21 to the
effect that PJI "suffered financial reverses x x x since
1997, as declared by the Supreme Court" - which is
otherwise self-serving, at the very least, and untrue,
within the context of the findings of facts in the
above-mentioned decided case. Other than this
claim, petitioners have not shown any other proof of
business losses. PJI’s s act of reinstating its employees
only proves that it could not have been suffering
business losses at the time; petitioners were unable
to rebut or disprove the finding in the above-cited
case that PJI was not incurring financial reverses, but
in fact accepted such finding with finality when it
reinstated its illegally retrenched employees.
The CA ruled in respondents' favor on the ground
that PJI’s grant of optional retirement benefits to its
managerial employees and executive staff had
ripened into a company practice that it could not
deny to respondents but grant to others in
contravention of the non-diminution provision in the
Labor Code, to wit:
ART. 100. Prohibition against elimination or diminution
of benefits. -
Nothing in this Book shall be construed to eliminate
or in any way diminish supplements, or other
employee benefits being enjoyed at the time of
promulgation of this Code.
The Court finds the CA pronouncement tenable, not
only because its factual findings must be upheld as
this Court is not a trier of facts, but that, given the
factual milieu, it appears that petitioners' denial of
respondents' application for optional retirement was
unfair as it granted the same privilege to others
previously. Indeed,
PJI appears to discriminate against its core
employees, while it favors those in the upper tier; it
had been found guilty of illegal dismissal based on
an illegal retrenchment scheme, while upper
management continued to enjoy its perks and
privileges and refused to tighten its belt in this
respect. While respondents are not considered as
belonging to the rank-and-file, they do not belong
to the upper echelon of PJI management either: De
Guzman was Executive Security to the Chairman,
while Quirante was HR Supervisor - not exactly juicy
positions that find immediate favor with
management.
Furthermore, the CA's ruling is correct in light of PJI's
conduct of pursuing a scheme to reduce its
personnel by any means necessary, which is both
unfair and prejudicial to the interests of labor. Take
for example respondents' case. Operating under the
honest belief that they could avail of an optional
retirement scheme that P n allowed with respect to
other employees in the past, respondents tendered
their respective resignation letters on the sole ground
that they were availing of the company's optional
retirement package. Instead of clarifying the matter
with respondents, petitioners treated the latters'
actions with a lack of understanding and sympathy.
If petitioners believed that respondents were not
entitled to avail of the optional retirement scheme
which respondents in good faith thought was
available to them, and which was obviously the sole
reason for tendering their resignations, then
petitioners should have at least put their respective
resignations on ·hold pending clarification of the
issues. Instead, petitioners immediately took a hostile
stance, and quickly grabbed the opportunity to
declare respondents separated from PJI by
voluntary resignation with its concomitant effects
such as non-payment of benefits, separation pay,
etc. They did not take time to explain, if so, that the
optional retirement program was no longer in effect
and give respondents the opportunity to reconsider
their actions. This is tantamount to bad faith,
considering the factual milieu and petitioners'
conduct, where they have consistently shown an
interest in dismissing their employees, yet keeping for
themselves their corporate bonuses, perks, and
privileges.
Finally, Pil's bad faith is evident from its 2005
"Memorandum of
Understanding xx x" with its employees, where it
falsely declared that P n "suffered financial reverses
x x x since 1997, as declared by the Supreme Court."
As earlier shown, this statement is untrue, yet
petitioners deliberately included this false claim in its
agreement with its employees in order to secure
concessions favorable to them.
In other words, petitioners deceived their employees
and used this false claim to deprive the latter of a fair
appraisal of the facts and circumstances during
negotiations leading to such agreement.
To be considered as a regular company practice,
the employee must prove by substantial evidence
that the giving of the benefit is done over a long
period of time, and that it has been made
consistently and deliberately. Jurisprudence has not
laid down any hard-and-fast rule as to the length of
time that company practice should have been
exercised in order to constitute voluntary employer
practice. The common denominator in previously
decided cases appears to be the regularity and
deliberateness of the grant of benefits over a
significant period of time. It requires an indubitable
showing that the employer agreed to continue
giving the benefit knowing fully well that the
employees are not covered by any provision of the
law or agreement requiring payment thereof In sum,
the benefit must be characterized by regularity,
voluntary and deliberate intent of the employer to
grant the benefit over a considerable period of
time.22
The grant of optional retirement benefits to two
management employees in the past was voluntary,
deliberate, and done with sufficient regularity as
would indicate that this had become a company
practice within Pil, which petitioners now refuse to
apply in the case of respondents, on the pretext that
the company was losing money at that time. But Pn
was not incurring losses, and was in fact exhibiting
conduct inconsistent with the claim. What is clear is
that it engaged in unfair labor activities and took an
anti-labor stance at the expense of its employees,
including respondents. PJI has shown that its
employees' interests take a backseat to the perks
and prerogatives of management. This cannot be
countenanced.
WHEREFORE, the Petition is DENIED. The November 7,
2012 Decision and July 4, 2013 Resolution of the
Court of Appeals in CA-G.R. SP No. 123901 are
AFFIRMED in toto.
In addition, the judgment award in favor of
respondents or their retirement and other benefits
shall earn interest of 12% per annum, computed from
the filing of the Complaint up to June 30, 2013, and
thereafter, 6% per annum from July 1, 2013 until their
full satisfaction. SO ORDERED.
Moral vs. Momentum Properties, G.R. No. 226240,
Mar. 6, 2019
FOR RECIT PURPOSES:
SUBJECT/S: DISMISSAL OF PROBATIONARY EMPLOYEE
DISPOSITIVE:
“WHEREFORE, the petition is DENIED. The Decision
dated 22 March 2016 and the Resolution dated 19
July 2016 of the Court of Appeals in CA-G.R. SP No.
138704 are AFFIRMED.
SO ORDERED.”
SUBJECTS/DOCTRINES/DIGEST:
WHAT HAPPENED IN THIS CASE?
DISMISSAL OF PROBATIONARY EMPLOYEE WAS
UPHELD BUT EMPLOYER WAS MADE TO PAY NOMINAL
DAMAGES BECAUSE IT FAILED TO GIVE THE EMPLOYEE
PROPER NOTICE OF TERMINATION.
HOW SHOULD TERMINATION NOTICE BE GIVEN IN
CASE TERMINATION WAS DUE TO FAILURE TO QUALIFY
AS A REGULAR EMPLOYEE IN ACCORDANCE WITH THE
REASONABLE STANDARDS PRESCRIBED BY THE
EMPLOYER?
A WRITTEN NOTICE MUST BE SERVED THE EMPLOYEE
WITHIN A REASONABLE TIME FROM THE EFFECTIVE
DATE OF TERMINATION.
IN THIS CASE NOTICE WAS GIVEN BY TEXT MESSAGES
ONLY.
FOR FAILURE TO FOLLOW THE RULE ON HOW NOTICE
BE GIVEN TO THE PROBATIONARY EMPLOYEE IS THE
DISMISSAL STILL LEGAL? YES.
BUT EMPLOYER SHALL PAY NOMINAL DAMAGES. IN
THIS CASE FOLLOWING A PRECEDENT DECISION THE
DAMAGES IMPOSED WAS P30,000.00.
HOW SHALL A PROBATIONARY EMPLOYEE BE
DISMISSED?
THERE ARE THREE WAYS:
(1) A JUST CAUSE;
(2) AN AUTHORIZED CAUSE;
AND (3) WHEN HE OR SHE FAILS TO QUALIFY AS A
REGULAR EMPLOYEE IN ACCORDANCEWITH THE
REASONABLE STANDARDS PRESCRIBED BY THE
EMPLOYER.41
A probationary employee enjoys security of tenure,
although it is not on the same plane as that of a
permanent employee. Other than being terminated
for a just or authorized cause, a probationary
employee may also be dismissed due to his or her
failure to qualify in accordance with the standards
of the employer made known to him or her at the
time of his or her engagement.40 Hence, the
services of a probationary employee may be
terminated for any of the following: (1) a just cause;
(2) an authorized cause; and (3) when he or she fails
to qualify as a regular employee in accordance with
the reasonable standards prescribed by the
employer.41
WHAT IS MANAGEMENT PREROGATIVE TO HIRE?
AN EMPLOYER HAS THE RIGHT OR IS AT LIBERTY TO
CHOOSE WHO WILL BE HIRED AND WHO WILL BE
DENIED EMPLOYMENT.
It is a well-established principle that an employer has
the right or is at liberty to choose who will be hired
and who will be denied employment. Accordingly, it
is within the exercise of the right to select one’s
employees that an employer may set or fix a
probationary period within which the latter may test
and observe the conduct of the former before the
former is hired on a permanent basis. 49 As long as
the employer has made known to the employee the
regularization standards at the time of the
employee’s engagement, the refusal of the former
to regularize the latter, by reason of the latter’s
failure to comply with the regularization standards, is
within the ambit of the law.
DOCTRINE: The ruling in the case of Abbot v. Alcaraz
[G.R. No. 192571, July 23, 2013, Justice Perlas-
Bernabe (2019 Bar Examiner) ] --- that the usual two-
notice rule does not govern in terminating a
probational employee--- has attained doctrinal
status.
The aforementioned case was recently cited in
Moral v. Momentum Properties [G.R. No. 226240,
March 6, 2019, Justice Carpio]. The latter expounded
that the twin-notice rule as found in Article 292(b) of
the Labor Code is inapplicable in terminating
probational employees who do not meet the
standards of the employer during the probationary
period --- but Department Order No. 147-15, which
provides:
“Section 2. Security of Tenure. -
xx xx
If the termination is brought about by the x x x failure
of an employee to meet the standards of the
employer in case of probationary employment, it
shall be sufficient that a written notice is served the
employee within a reasonable time from the
effective date of termination.”
This only means that a single notice (and not two
notices) is sufficient to comply the due process
requirements in dismissing a probational employee
who does not meet the employer’s standards
FACTS:
Petitioner alleged that Momentum Properties
Management Corporation (respondent) hired her as
a probationary employee, with her designation
being that of a Leasing Assistant. Six months after her
employment, she was informed of her dismissal and
was advised to no longer report for work. According
to petitioner, upon inquiring the reason for her
dismissal, respondent coldly ignored her query and
thereafter, no longer contacted her.
She contended that respondent failed to provide
any notice or justifiable cause as to why her
employment was being severed. Because of
respondent's failure to comply with both substantive
and procedural due process requirements, as
mandated by law, petitioner alleged that she was
illegally dismissed.
In its defense, respondent denied the illegal dismissal
allegation of petitioner. According to respondent, in
line with the provisions of their Employment
Agreement, petitioner was subjected to the
respondent's evaluation procedure on the fifth
month of her employment.
Petitioner was likewise asked to take the Verbal,
Non-Verbal, and Numerical Examinations which
were administered by the Human Resources (HR)
Department. Petitioner garnered below average
(BA) scores in the aforesaid tests, rendering her
qualifications for regularization doubtful under HR
Standards. In addition, based on respondent's set
criteria for quantitative and qualitative performance
and developmental assessment, findings indicated
that petitioner failed to satisfactorily meet the level
of performance expected from her position.
Petitioner's over-all rating indicated a BA] score,
which made her unqualified for regularization
purposes. Hence, in accordance with standard
procedure, the HR and Administration Manager,
Annie Ocampo (Ocampo), directed Tungol to
advise petitioner to report to the head office, for the
purpose of discussing her poor evaluation scores.
Unfortunately, petitioner disregarded the aforesaid
request. However, petitioner no longer reported for
work. Petitioner then filed a complaint for illegal
dismissal against respondent Momentum.
LA - in favor of the petitioner and found the
allegation of respondent that petitioner was guilty of
abandonment untenable. It emphasized that, in
order for there to be abandonment, which is a just
ground for dismissal, there must be a deliberate and
unjustified refusal on the part of the employee to
resume employment. It held that mere absence or
failure to report for work, after a notice of return is
given to such employee, is not enough to amount to
abandonment.
NLRC - upheld the view of the LA that respondent
failed to defend its argument that it did not dismiss
petitioner.
CA - set aside the Decision and Resolution of the
NLRC. Respondent argued that petitioner failed to
show through substantial evidence that she was
dismissed from work.
It held that the status of petitioner as a probationary
employee was established and not contested.
Hence, her employment was under respondent's
observation for a period of six months. It ruled that
respondent had the option of hiring petitioner or
terminating her services, because she failed to
qualify as a regular employee in accordance with
the reasonable standards made known to her at the
time of her engagement.
Furthermore, the Court of Appeals noted that
petitioner's tests were given "appropriately, fairly and
with proper notice before they were taken." Hence,
the instant petition before this Court.
ISSUE:
The issue in this case is whether or not petitioner was
illegally dismissed by respondent. NO
The Court's Ruling
A probationary employee is one who is placed on
trial by an employer, during which the latter
determines whether or not the former is qualified for
permanent employment. By virtue of a probationary
employment, an employer is given an opportunity to
observe the fitness and competency of a
probationary employee while at work. During the
probationary period of employment, an employer
has the right or is at liberty to decide who will be hired
and who will be denied employment.
As a general rule, probationary employment cannot
exceed six months.
Otherwise, the employee concerned shall be
regarded as a regular employee.
Moreover, it is indispensable in probationary
employment that the employer informs the
employee of the reasonable standards that will be
used as basis for his or her regularization at the time
of his or her engagement. In the event that the
employer fails to comply with the aforementioned,
then the employee is considered a regular
employee.
A probationary employee enjoys security of tenure,
although it is not on the same plane as that of a
permanent employee. Other than being terminated
for a just or authorized cause, a probationary
employee may also be dismissed due to his or her
failure to qualify in accordance with the standards
of the employer made known to him or her at the
time of his or her engagement.40 Hence, the
services of a probationary employee may be
terminated for any of the following: (1) a just cause;
(2) an authorized cause; and (3) when he or she fails
to qualify as a regular employee in accordance with
the reasonable standards prescribed by the
employer.
In connection with the abovementioned, Section 6(
d), Rule I, Book VI, as amended by Department
Order No. 147-15, of the Omnibus Rules
Implementing the Labor Code of the Philippines
(Labor Code) provides the following:
xx xx
( d) In all cases of probationary employment, the
employer shall make known to the employee the
standards under which he will qualify as a regular
employee at the time of his engagement. Where no
standards are made known to the employee at that
time, he shall be deemed a regular employee.
In other words, the employer is mandated to comply
with two requirements when dealing with a
probationary employee, viz: ( 1) the employer must
communicate the regularization standards to the
probationary employee; and (2) the employer must
make such communication at the time of the
probationary employee's engagement. If the
employer fails to abide by any of the
aforementioned obligations, the employee is
deemed as a regular, and not a probationary
employee.
In the instant case, the evidence is clear that
petitioner is a probationary employee of
respondent. Evidently, an examination of the
Employment Agreement executed by petitioner
and respondent positively indicates the hiring of the
former by the latter as a probationary employee.
Petitioner was well-aware that her regularization
would depend on her ability and capacity to fulfill
the requirements of her position as a Leasing
Assistant and that her failure to perform such would
give respondent a valid cause to terminate her
probationary employment.
A thorough examination of the records of the instant
case reveals that petitioner failed to comply with the
regularization standards of respondent made known
to her at the time of her engagement.
All the same, while respondent had the right to
terminate petitioner's employment, and not to
accord her the status of a regular employee, the
manner by which petitioner's dismissal was carried
out was not in accordance with the standards set
forth under the law.
With respect to the termination of a probationary
employee, a different procedure is applied - the
usual two-notice rule does not govem. The aforesaid
two-notice rule is that which is found under Article
292(b) of the
Labor Code, as amended by Section 33 of Republic
Act No. 10151, viz:
Article 292. Miscellaneous Provisions. -
xx xx
(b) Subject to the constitutional right of workers to
security of tenure and their right to be protected
against dismissal except for a just and authorized
cause and without prejudice to the requirement of
notice under Article 283 (now, Article 298) of this
Code, the employer shall furnish the worker whose
employment is sought to be terminated a written
notice containing a statement of the cause for
termination and shall afford the latter ample
opportunity to be heard and to defend· himself with
the assistance of his representative if he so desires in
accordance with company rules and regulations
promulgated pursuant to guidelines set by the
Department of Labor and Employment. x x x.
The aforementioned procedure is also found in
Section 2, Rule I, Book VI, as amended by
Department Order No. 147-15, of the Omnibus Rules
Implementing the Labor Code which states:
Section 2. Security of Tenure. -
xx xx
In all cases of termination of employment, the
following standards of due process shall be
substantially observed:
xx xx
For termination of employment based on just causes
as defined in Article 288 (now, Article 297) of the
Labor Code:
(i) A written notice served on the employee
specifying the ground or grounds for termination,
and giving said employee reasonable opportunity
within which to explain his side.
(ii) A hearing or conference during which the
employee concerned, with the assistance of
counsel if he so desires, is given opportunity to
respond to the charge, present his evidence, or
rebut the evidence presented against him.
(iii) A written notice of termination served on the
employee, indicating that upon due consideration
of all the circumstances, grounds have been
established to justify his termination.
Section 2, Rule I, Book VI, as amended by
Department Order No. 147- 15, of the Omnibus Rules
Implementing the Labor Code governs the
procedure for the termination of a probationary
employee, to wit:
Section 2. Security of Tenure. -
xx xx
If the termination is brought about by the x x x failure
of an employee to meet the standards of the
employer in case of probationary employment, it
shall be sufficient that a written notice is served the
employee within a reasonable time from the
effective date of termination.
A perusal of the records reveals that petitioner's
dismissal was effected through a series of text
messages from Tungol, instead of the
abovementioned mandated procedure. As
correctly pointed out by the CA, the NAWOL issued
by Ocampo was nothing more than an
afterthought, considering it was furnished to
petitioner on 7 January 2014 or five days after she
was informed of her dismissal. Hence, in view of the
procedural infirmity attending the termination of
petitioner, respondent is liable to pay nominal
damages.
Willful Breach of Trust cannot be established by
erroneous presumption of conspiracy in a theft case.
Lepanto vs. Mamaril, G.R. No. 225725, Jan. 16, 2019
CARPIO, J.:
DOCTRINE: Willful breach of trust is a ground for
dismissal. a breach is willful if it is done intentionally,
knowingly and purposely, without justifiable excuse,
as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently.
FACTS:
ON Nov. 21, 2006, respondents Maximo C. Mamaril
and 15 others filed a complaint against petitioner
Lepanto Consolidated Mining Company
(Lepanto) with a claim for payment of overtime
pay, among others.
The Court of Appeals (CA) sustained the decision
of the National Labor Relations Commission
(NLRC) awarding respondents overtime pay. The
CA noted that both lawyer Weldy Manlong, the
administrative service group manager of
petitioner, and Edgar K. Langeg, the assistant
security superintendent of the security and
communications services department, hinted in
their respective affidavits that respondents were
ordered to render overtime work and work during
the holiday and their rest day. They pointed out
that some of these security guards remained at
their post beyond the regular eight working hours
to keep an eye on the strikers. Edgar Langeg
specifically stated that the overtime work that the
security guards rendered during the duration of
the strike was approved by the administrative
group manager and resident manager of
petitioner.
Petitioner Lepanto contested with the Supreme
Court the award of overtime pay.
ISSUE:
Can the CA decision be sustained?
RULING:
Yes.
In Damasco v. NLRC, 400 Phil. 568, 586 (2000), we
held that an employer’s formal admission that an
employee worked beyond eight hours should
entitle the employee to overtime compensation.
In this case, such admissions, that respondents
rendered overtime work and work during their
holiday and rest days on the period specified
therein, can be gleaned from the affidavits
executed by Lepanto’s managers, Weldy
Manlong, and Edgar Langeg. Thus, respondents
are clearly entitled to these benefits.
This Court has repeatedly ruled that any doubt
arising from the evaluation of evidence as
between the employer and the employee must
be resolved in favor of the latter. As an employer,
it is incumbent upon Lepanto to prove payment.
In G & M (Phils.) Inc. v. Cruz, 496 Phil. 119, 124-125
(2005), we held that the burden of proving
payment of monetary claims rests on the
employer since the pertinent personnel files,
payrolls, records, remittances and other similar
documents—which will show that overtime,
differentials, service incentive leave, and other
claims of workers have been paid—are not in the
possession of the worker but in the custody and
absolute control of the employer. Thus, the burden
of showing with legal certainty that the obligation
has been discharged with payment falls on the
debtor, in accordance with the rule that one who
pleads payment has the burden of proving it.
In this case, Lepanto failed to discharge such
burden of proof. Lepanto submitted daily time
sheets showing that respondents rendered eight-
hour work days, signed by respondents and
countersigned by a Col. Doromal as the
department head. However, as found by the CA
in its decision dated 21 October 2015:
Then again the daily time sheets presented by
petitioner are not substantial proof that private
respondents did not render overtime work. It can
be plainly observed from these daily time sheets
that the number of hours worked by private
respondents were uniform and were written by the
same hand. For this reason, these daily time sheets
should be taken with a grain of salt xx x.
Petitioner, nonetheless, insists that it paid private
respondents’ overtime pay and holiday pay.
Hence, petitioner should have at least presented
copies of its payroll or copies of the pay slips of
respondents to show payment of these benefits.
However, it failed to do so. Due to such failure of
the petitioner, there arises a presumption that
such evidence, if presented, would be prejudicial
to it. Likewise, petitioner could be deemed to
have waived its defense and admitted the
allegations of the private respondents. (Lepanto
Consolidated Mining Company vs. Maximo C.
Mamaril, et.al., G.R. No. 225725, January 16, 2019).
FACTS:
Lepanto Consolidated Mining Company (Lepanto)
hired respondent Mamaril as security guard on
November 14, 2003.
Mamaril was assigned to the Security Reaction Force
9SRF), a group of security guards tasked to do
special duties and one that would "react"
accordingly in case of any eventuality without
pulling out posted security guards which would
create a vacuum in the said posts. SRF is group of
security guards tasked to do special duties for the
company.
On October 8, 20063 at around 7:25 p.m. Lepanto
Security Guard Intelligence Operative Bangkilas and
Velasco apprehended Sumibang Jr., and employee
of Lepanto Mine Division who worked as a mucker,
for stealing skinned copper wires from the Lepanto
Mine Division located in Sapid, Manakyan, Benguet.
Mamaril, the guard on duty at the time, was also
apprehended since he was the one who allegedly
opened the main door of the Tubo Collar Gate and
allegedly conspired with Sumibang so that the wires
would be brought out and loaded into a tricycle.
Thereafter, Sumibang and Mamaril were both
placed under preventive suspension by the
company for qualified theft of skinned copper wires.
At the formal hearing Mamaril stated that he was the
3rd shift guard assigned at the Tubo Collar gate.
Mamaril was assigned not only to guard the Tubo
Collar gate but also patrol and inspect the adjacent
buildings such as the compressor, lamp house, hoist
room, shaft and perimeter fence, and the NPC gate.
Mamaril denied that he was involved or that he
conspired with Sumibang in the alleged qualified
theft. Mamaril claimed that on October 8, 2006 he
was on roving patrol at the NPC station when the
theft occurred. He narrated that about past 7:00 in
the evening, he opened the man door and allowed
Foreman Arceo Manginga to exit the premises.
Afterwards, NPC Security Guard Macaraeg arrived
and together they conducted a roving inspection of
the NPC and the compressor compound.
Mamamril admitted that he left the man door
hooked on its barrel bolt but did not padlock it since
the employees of the Diamond Drilling Corporation
of the Philippines, who were underground at that
time
, might come out anytime. At the back of the shaft
the mechanics working for the NPC were attending
to their welding job. Suddenly, Mamaril heard
somebody blew a whistle at the direction of the Tubo
Collar gate. Immediately, he went to his post and
saw some security men so he unhooked the barrel
bolt of the man door and allowed them to enter.
Mamaril stated that his only fault, if any, was that he
forgot to secure the man door. Padlocking the man
door is a standard operating procedure of the
company if the man door is not in use. Mamaril
submitted the sworn affidavit of mechanics who all
saw him on roving patrol, while the theft was taking
place.
Tubo Electrical Foreman Dacyon also gave a
statement. Dacyon stated that they had no losses of
power line stock at the Tubo Electrical storage and
Tubo Collar compound. Dacyon surmised that the
skinned copper wires recovered by the Security men
might have come from the abandoned place in the
mine underground. Security Guard Macaraeg and
miner Badua also gave their own recollection of the
events on the date in question.
After investigation, Lepanto's Security Investigator
submitted an Investigation Report that the estimated
value for the stolen items was worth P 16, 898.85.
Thereafter, Lepanto's Legal Office submitted a
Resolution finding Mamaril guilty of qualified theft for
conspiring with Sumibang in pilfering or stealing
skinned copper wires on the night of October 8,
2006. Lepanto dismissed Mamaril from employment
for dishonesty and breach of trust and confidence.
Mamaril filed a complaint against Lepanto with the
NLRC RAB-CAR for illegal dismissal with claims for
payment of his full backwages or in lieu thereof,
payment of separation pay, overtime pay, rest day
pay, damages and attorney's fees. Thereafter,
several security guards of Lepanto and members of
the SRF also filed a complaint with the NLRC
RAB_CAR for payment of overtime pay, rest day pay,
night shift differentials, moral and exemplary
damages, and attorney's fees. More aggrieved
members of the SRF filed another complaint against
Lepanto with the NLRC RAB-CAR for payment of
overtime pay, damages and attorney's fees. Upon
motion, these cases were all consolidated.
LA Ruling:
In a Joint Decision, the LA ruled in favor of Lepanto.
The LA declared that as a security guard in charge
of the handling, custody, care and protection of
company property, Mamaril occupied a position of
trust and confidence. Thus, he was terminated for a
just cause. The LA gave credence to the testimonies
of Bangkilas and Velasco and found the testimonies
of Mamaril's witnesses, who did not have any
knowledge of the fact of pilferage, as hearsay. With
regard to the money claims, the LA declared that
Mamaril et al failed to discharge the burden of
proving that they are entitled to such money claims.
NLRC Ruling:
The NLRC partially granted the appeal and declared
that the dismissal of Mamaril from the service was
without any valid cause and just cause.
The NLRC found the claim of Bangkilas and Velasco
that they recognized Mamaril as the one who
opened the man door to be physically impossible,
improbable and contrary to human experience
given that (1) it was dark and the light at the guard
post was switched off, (2) Bangkilas and Velasco
were positioned at the back of the store located
along the national road which was more or less 40
meters away from the man door, (3) the only
illumination came from a bulb post along the left
perimeter fence road near the outside gate nearer
to the two guards, and (4) the incident happened in
more or less a minute.
The NLRC added that there was no reason to doubt
the alibi of Mamaril that he was on roving duty when
the incident occurred and his admission that he had
been lax in leaving his post, under pain of possible
sanction, without padlocking the man door first. The
NLRC declared Mamaril was entitled to separation
pay and full backwages. However, with regard to
other complainants, the NLRC found that they failed
to present sufficient evidence to prove that they are
entitled to overtime pay, holiday pay and rest day
pay.
Both parties filed Partial Motions for Reconsideration.
The NLRC partly granted the motion for
reconsideration filed by Mamaril et al and ordered
Lepanto to pay them overtime pay, holiday pay and
rest day pay.
Lepanto filed a Petition for Certiorari with the CA.
CA Ruling:
The CA decided in favor of Mamaril et al. Lepanto
file a Motion for Partial Reconsideration which was
denied by the CA.
ISSUES:
Whether or not the affidavits of security guards who
were positioned at the back of a store along the
national road and of considerable distance from the
Tubo Collar gate, stating that Mamaril conspired in a
theft incident by opening the gate, can establish the
charge of loos of trust and confidence.
Whether or not assumption of conspiracy can be
made when an employee was caught red-handed
of theft company property which was taken through
the gate manned by the Mamaril
Whether or not an admission in affidavits by
company officers that Mamaril, et al rendered
overtime work and work during their holiday and rest
days on the period specified therein places the
burden on Lepanto to prove payment thereof.
RULING:
The SC did not find merit in the petition.
The SC held that in dismissal cases, the burden of
proof is on the employer to so that the employee
was dismissed for a valid and just cause. Here,
Lepanto dismissed Mamaril based on loss of trust and
confidence. To be valid ground for dismissal, the loss
of trust and confidence must be based on a willful
breach and founded on clearly established facts.
A breach of willful trust if is done intentionally,
knowingly and purposely, without justifiable excuse,
as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. Loss of trust
and confidence must rest on substantial grounds
and not on the employer’s arbitrariness, whims,
caprices or suspicion; otherwise, the employee
would eternally remain at the mercy of the
employer. The employer, thus, carries the burden of
clearly and convincingly establishing the facts upon
which loss or confidence in the employee may be
made to rest.
Lepanto contends that Mamaril is not ordinarily
outsourced security guard, but an in-house security
officer and a member of Lepanto's SRF, this holding
a position of trust and confidence. Lepanto adds
that Mamaril's duties and functions made him privy
to company secrets and to confidential matters that
are shared with the management. However, the
records show that when the theft occurred, Mamaril
was no longer a member of the SRF.
Also, even if Mamaril was occupying a position of
trust as an ordinary security guard, to be valid cause
for termination of employment, the act or acts
constituent breach of trust must have been done
intentionally, knowingly and purposely; and they
must be founded on clearly established facts. In
Lopex vs Alturas Group of Companies and/or Uy, loss
of trust and confidence must be based on willful
breach of trust reposed in the employee by his
employer and must be based on substantial
evidence and not on the employer's whims or
caprices or suspicions.
Here, Lepanto asserts that the dismissal of Mamaril
due to loss of trust and confidence was justified since
the Tubo Collar’s gate was lit and that guards
Bangkilas and Velasco positively identified Mamaril
as the open who opened the man door since they
were familiar with his face, being their co-security
guard. However, Lepanto relied heavily on the
affidavit and report made by Bangkilas and Velasco.
The two stated that while they are positioned at the
back of a store along the national road about 40
meters away from Tubo Collar gate, they saw
Mamaril open the man door gate and then
someone went out carrying something that was
loaded into a tricycle, which lasted for more or less a
minute.
According to SC, this can hardly be believed as an
accurate report or one founded on clearly
established facts given that the incident occurred at
night and the witness were at a considerable
distance away from the man doo. Also, the breach
of trust was not shown to have been done
intentionally, knowingly and purposely.
Here, Lepanto merely assumed that Sumibang, who
was caught re-handed on the qualified theft of
skinned copper wires, conspired with Mamaril to
execute the wrongdoing. Aside from the report filed
by Bangkilas and Velasco, Lepanto did not present
an admission from Sumibang and his companion
that Mamaril assisted them in any way to carry out
their plan; neither did Lepanto produce any other
evidence corroborating what Bangkilas and
Velasco allegedly saw. Clearly, conspiracy cannot
be readily presumed. It must be based on sufficient
evidence to stand.
Hence, the SC found that Mamaril was dismissed
without a just and valid cause and is thus entitle to
be paid a separation pay and full backwages,
inclusive of allowances and other benefits.
In Damasco vs NLRC, it was held that an employer's
formal admission that an employee worked beyond
eight hours should entitle the employee to overtime
compensation. in this case, such admission, that
Mamaril et al rendered overtime work and work
during their holiday and rest days on the period
specified therein, can be gleaned from the affidavits
executed by Lepanto's manager’s, Atty. Manlong
and Capt. Langeg. Thus, they are clearly entitle to
these benefits.
Any doubt arising from the evaluation of evidence
as between the employer and the employee must
be resolved in favor of the matter. As an employer, it
is incumbent upon Lepanto to prove payment. In G&
M Phils, Inc vs Cruz, it was held that the burden of
proving paymenty of monetary claims rests on the
employer since the pertinent personnel files, payrolls,
record, remittances and other similar documents -
which will show that overtime, differentials, service
incentive leave, and other claims of workers have
been paid - are not in the possession of the worker
but in the custody and absolute control of the
employer. Thus, the burden of showing with legal
certainty that the obligation has been discharged
with payment falls on the debtor, in accordance
with the rule that one who pleads payment has the
burden of proving it.
In this case, Lepanto failed to discharge such burden
of proof. Lepanto submitted daily time sheets
showing that, Mamaril , et al rendered eight-hour
work days, signed by Mamaril et al and
countersigned by Col. Doromal as the Department
Head. However, as found by the CA in its Decision,
the daily time sheets presented by Lepanto are not
substantial proof that Mamaril et al did not render
overtime work. It can ne plainly observed from these
daily time sheets that the number of hours worked by
them were uniform and were written by the same
hand. For this reason, these daily time sheers should
be taken with a grain of salt.
Gsis Family Bank Employees Union vs. Villanueva,
G.R.No.210773, Jan. 23, 2019
DOCTRINE: Officers and employees of GOCCs
without original charters are covered by the Labor
Code, not the Civil Service Law. However, non-
chartered GOCCs are limited by law in negotiating
economic terms with their employees. This is
because the law has provided the Compensation
and Position Classification System, which applies to
all GOCCs, chartered or non-chartered.
Praying that GSIS Family Bank be declared outside
the coverage of RA 10149 and, therefore, be
directed to negotiate a new collective bargaining
agreement with its employees.
FACTS:
Application of Royal Savings Bank for
conservatorship was denied and instead BSP placed
it under receivership. Royal Savings Bank filed several
complaints against the Central Bank for grave abuse
of discretion. To amicably settle the cases, then
Central Bank Governor Jose B. Fernandez, Jr. offered
to reopen and rehabilitate Royal Savings Bank if it
would drop all its complaints against the Central
Bank and transfer all its shares of stock to
Commercial Bank of Manila, a wholly-owned
subsidiary of the GSIS.
When it comes to collective bargaining agreements
and collective negotiation agreements in
government-owned or controlled corporations,
Executive Order No. 203 unequivocally stated that
while it recognized the right of workers to organize,
bargain, and negotiate with their employers, "the
Governing Boards of all covered [government-
owned or controlled corporations], whether
Chartered or Non-chartered, may not negotiate
with their officers and employees the economic
terms of their [collective bargaining agreements]."
Thus, considering the existing law at the time, GSIS
Family Bank could not be faulted for refusing to enter
into a new collective bargaining agreement with
petitioner as it lacked the authority to negotiate
economic terms with its employees. Unless directly
challenged in the appropriate case and with a
proper actual controversy, the constitutionality and
validity of RA 10149, as it applies to fully government-
owned and controlled non-chartered corporations,
prevail.
WHEREFORE, premises considered, the Petition is
DENIED
Pacios vs. Tahanang Walang Hagdanan, G.R. No.
229579, Nov. 14, 2018
LEONEN, J.:
FACTS:
Tahanang Walang Hagdanan (Tahanan) is a private
organization engaged in the business of producing
and marketing various handicrafts, utilizing
employees who are mostly physically disabled,
without one or both limbs. Respondent Sister
Valeriana Baerts (Baerts) is a nun who recruited
Bernardo B Pacios, Marilou T. Abedes, Alexis L. Elinon,
Armando V. Absedes, Gina P. Ariate, Vivencia N.
Buela, Hermenigilfo E. Cansino and several others
more (collectively called workers) to work for
Tahanan. They were dismissed last June 11, 2012.
The workers filed an amended complaint for illegal
dismissal, underpayment of salary, non-payment of
13th month pay, service incentive leave, separation
pay, retirement benefits, with claims for moral
damages, exemplary damages and attorney’s fees
against Tahanan, Pangarap Sheltered Home for
Disabled People, Inc. (Pangarap), Venus Amoncio
(Amoncio) and Baerts,
Labor arbiter rendered a decision in favor of the
workers, and ordered that Tahanang Walang
Hagdanan, Pangarap, Amoncio, and Baerts pay
them P16,629,163.63.
Tahanan, Pangarap, Amoncio and Baerts appealed
before the NLRC but was denied due to non-
compliance to the payment of the appeal bond in
the amount of P40,000.00. Their Motion for
Reconsideration plus surety bond in the amount of
P1,622,916.37 as Supersedeas Bond was also denied
by the NLRC. Thus, Tahanan, Pangarap, Amoncio
and Baerts filed a Petition for certiorari.
CA reversed the NLRC’s decision on dismissing the
Appeal based on the non-perfection of said appeal
for the lacking cash bond. The petitioner’s appeal
was reinstated. Meanwhile, the Labor Arbiter issued
a writ of Execution on March 30, 2015 to implement
the Labor Arbiter’s October 24, 2013 Decision
awarding P16,629,163.63 to the workers. Thus, the
cash bond of P40,000.00 was released to them.
Thereafter they filed a Motion to Release the
Supersedeas Bond but was opposed by Tahanan,
Walang Hagdanan, Pangarap, Amoncio and Baerts
because the CA Decision dated April 27, 2015
reinstating their appeal before the NLRC.
The Labor Arbiter issued a Resolution suspending the
resolution of the workers’ Motion to Release the
Supersedeas Bond, as well as all subsequent motions
seeking its immediate release.
In view thereof, the workers assailed the refusal of the
labor Arbiter to the NLRC but fell on deaf ears.
As a result, the workers filed a motion for mandamus
before the CA which was denied by the CA citing
the 2011 NLRC Rules of Procedure, Tule XI, Section 17
which states that:
“Sec 17. Effect of Reversal During Execution
Proceedings. – In case of total or partial reversal of
judgment by the CA, the execution proceedings
shall be suspended insofar as the reversal is
concerned notwithstanding the pendency of a
motion for reconsideration on such judgment.
However, where the judgment of the Court of
Appeals is reversed by the Supreme Court,
execution proceedings shall commence upon
presentation of certified true copy of the decision
and entry of judgment.”
Workers filed their Motion for Reconsideration which
was denied by CA.
The workers then filed their Petition for Certiorari
before the SC. They claimed that it was a purely
ministerial act or duty of the NLRC to order the
release of the supersedes bond to them citing NLRC
Rule XI, Section 4 which provides:
“Section 4 – Effect of Petition for Certiorari on
Execution – A petition for certiorari with the CA or the
SC shall not stay the execution of the assailed
decision unless a restraining order is issued by said
courts.”
Workers pointed out that the CA did not include any
restraining order in its Decision dated April 27, 2015.
Thus, the execution proceedings of the labor arbiters
October 24, 2013 Decision should have continued.
Petitioners claim that there is conflict between
sections 4 and 17 of Rule XI of the NLRC Rules, and
that CA gave undue and preferential application to
Section 17. At the very least the CA should have
reconciled the two (2) provisions in accordance with
the tenet that full protection should be accorded tp
the labor sector. Thus, the Court of Appeals should
have applied Section 4 over Section 17.
ISSUE:
The sole issue for this Court’s resolution is whether or
not the CA erred in affirming the suspension of the
execution proceedings.
HELD:
Petition is granted.
Although the CA affirms the suspension of the
execution was incomplete. The CA pointed out that
RULE XI, Section 17 of the NLRC Rules “explicitly
mandates the suspension of the execution
proceedings in case of total or partial reversal of
judgment by the Court of Appeals. It held that
because its April 27, 2015 Decision reversed the NLRC
Feb 25, 2014 Resolution, suspension of the execution
was mandated under the rules however, CA failed
to note that under the Rules, the execution
proceedings should be suspended only “insofar as
the reversal is concerned.” This omission leads to an
incorrect reading of the rule and suggests that any
reversal on appeal leads to the automatic
suspension of execution of the appealed decision.
When used as basis for suspending execution, the
rule requires an extra step, namely, the
determination of what part of the execution is
affected by the reversal. Based on Section 3. Effect
of Perfection of Appeal on Execution – The
perfection of an appeal shall stay the execution of
the decision of the Labor Arbiter except execution
for reinstatement pending appeal. Under this
provision, the perfection of an appeal stays the
execution of a Labor Arbiter’s decision. Thus, for
clarity, the CA should have explained that because
its April 27, 2015 Decision deemed respondents'
appeal before the National Labor Relations
Commission as reinstated, the execution of the
Labor Arbiter's October 24, 2013 Decision was stayed
under Rule XI, Section 3 of the National Labor
Relations Commission Rules of Procedure. However,
despite the applicability of Rule XI, Section 3 of the
National Labor Relations Commission Rules to the
factual circumstances before the Court of Appeals
as of its assailed July 22, 2016 Decision and January
23, 2017 Resolution in CA-G.R. SP No. 142199, the
Petition must be granted.
This Motion for Reconsideration is the only
procedural incident preventing the execution of the
Labor Arbiter's October 24, 2013 Decision as it has
stalled the complete resolution of the reinstated
appeal before the National Labor Relations
Commission.
However, execution may be authorized even
pending appeal. In Aris (Phil.), Inc. v. National Labor
Relations Commission, this Court explained the
reasons for authorizing execution of decisions
reinstating dismissed employees in labor cases
pending appeal:
Before its amendment by Section 12 of R.A. No. 6716,
Article 223 of the Labor Code already allowed
execution of decisions of the NLRC pending their
appeal to the Secretary of Labor and Employment.
In authorizing execution pending appeal of the
reinstatement aspect of a decision of the Labor
Arbiter reinstating a dismissed or separated
employee, the law itself has laid down a
compassionate policy which, once more, vivifies
and enhances the provisions of the 1987 Constitution
on labor and the workingman. These duties and
responsibilities of the State are imposed not so much
to express sympathy for the workingman as to
forcefully and meaningfully underscore labor as a
primary social and economic force, which the
Constitution also expressly affirms with equal
intensity. Labor is an indispensable partner for the
nation's progress and stability.
This Court finds that the principles allowing execution
pending appeal invoked in Aris are equally
applicable here as petitioners are poor employees,
deprived of their only source of livelihood for years
and reduced to begging on the streets. In view of
their dire straits and since the National Labor
Relations Commission has already ruled twice on the
case in a way that supports the release of the
supersedeas bond, it is proper to continue with
execution proceedings in this case despite a
pending motion for reconsideration.
Labor-Only Contracting Arises Where the Deployed
Employee Performs Directly Related Function and the
Contractor has No Control over Him
Lingnam Restaurant vs. Skills & Talent, G.R. No.
214667, Dec. 3, 2018
PERALTA, J.:
DOCTRINE: Labor-only contracting is prohibited.
Labor-only contracting refer to an arrangement
where the contractor or subcontractor merely
recruits, supplies or places workers to perform a job,
work or service for a principal and where any of the
elements established by law is present.
RESPONDENT Skills and Talent Employment Pool
Inc. (Step) is engaged in human resource
management and technical services.
One of its clients is petitioner Lingnam Restaurant.
In a contract of employment, respondent Jessie
Colaste is a project employee of respondent Step
assigned to work with petitioner Lingnam
Restaurant as assistant cook.
Colaste filed a complaint for illegal dismissal
against Lingnam Restaurant and Step. In defense,
Lingnam Restaurant denied that it was the
employer of Colaste and alleged that Step was
Colaste’s real employer.
The Labor Arbiter (LA) found no merit in the
defense of Lingnam Restaurant. The National
Labor Relations Commission (NLRC) reversed the
LA decision and held that Step is an independent
contractor. The Court of Appeals (CA) reversed
the NLRC decision and reinstated the LA decision.
Did the CA err?
Ruling: No.
The Court notes that Step, in its cautionary
pleading filed before the Labor Arbiter, stated that
it entered into an agreement with petitioner
Lingnam Restaurant in 2002, where it agreed to
provide Lingnam Restaurant with human
resources to perform activities related to the
operation of its restaurant. Thus, as stated by the
Court of Appeals, Step merely acted as a
placement agency providing human resources to
Lingnam Restaurant. The service rendered by Step
in favor of Lingnam Restaurant was not the
performance of a specific job, but the supply of
personnel to work at Lingnam Restaurant. In this
case, Step provided petitioner with an assistant
cook in the person of Jessie Colaste.
In the employment contract between Jessie
Colaste and Step from Jan. 4, 2006 up to June 3,
2007, Colaste was assigned as kitchen helper at
Lingnam Restaurant, while in the subsequent
employment contracts from Nov. 5, 2007 up to
Jan. 5, 2008, and from Jan. 5, 2008 up to March 5,
2008, he was assigned as assistant cook.
The three employment contracts state that Jessie
Colaste’s “work result performance shall be under
the strict supervision, control and make sure that
the end result is in accordance with the standard
specified by client to Step Inc.”
Hence, the Court agrees with the Court of
Appeals that the work performance of Colaste is
under the strict supervision and control of the
client (Lingnam Restaurant) as well as the end
result.
As assistant cook of Lingnam Restaurant, Colaste’s
work is directly related to the restaurant business
of petitioner. He works in petitioner’s restaurant
and presumably under the supervision of its chief
cook. This falls under the definition of labor-only
contracting under Section 5 of Rule VIII-A, Book III
of the Amended Rules To Implement The Labor
Code, since the contractor, Step, merely supplied
Jessie Colaste as assistant cook to the principal,
Lingnam Restaurant; the job of Colaste as assistant
cook is directly related to the main business of
Lingnam Restaurant, and Step does not exercise
the right to control the performance of the work of
Colaste, the contractual employee.
As Step is engaged in labor-only contracting, the
principal, petitioner Lingnam Restaurant, are
deemed the employer of Colaste, in accordance
with Section 7, Rule VIII-A, Book III of the Amended
Rules To Implement The Labor Code.
Colaste started working with petitioner since 2006
and he should be considered a regular employee
of petitioner. (Lingnam Restaurant vs. Skills & Talent
Employment Pool, Inc., and Jessie Colaste, G.R.
No. 214667, December 3, 2018).
Respondent Skill’s and Talent Employment Pool, Inc.
(STEP) is engaged in man power management and
technical services and one of its clients is petitioner
Lingnam Restaurant.
In a contract of employment, Colaste is a project
employee of respondent STEP assigned to work with
petitioner Lingnamn Restaurant as assistant cook.
Colaste filed with the LA an amended Complaint for
illegal dismissal against Lingnam Restaurant and
STEP.
Colaste alleged that he started working at Lingnam
Restaurant as an assistant cook/general utility. He
worked six days a week, eight hours a day on two
shifts. On March 5, 2008, at about 10:00 am, Colaste
reported to the main office of STEP at Ortiogas
Center, Pasig City. He was informed by one
Katherine Barrun that his contract with Lingnam
Restaurant had expired. He was given a clearance
form to be signed by his supervisor at Lingnam
Restaurant. However, he reported for work as usual
at Lingnam Restaurant from 2:00 p.m. to 10:00 p.m.
On March 6, 2008 he was on day-off. On March 7,
2008, he reported for work at Lingnam Restaurant at
Greenhills, San Juan City, MM. However, the Chief
Cook told him not to punch in his time card because
he was already terminated from work. After a few
minutes, the Chief Cook handed him the telephone
and Supervisor Philipp Prado of the main office of
Lingnamn Restaurant was on the line and told him,
"finish contract ka na, hindi ka na pwede pumasaok
sa trabaho mo, tanggal ka na."
Hence, Colaste's illegal dismissal complaint.
For its part, Lingnam Restaurant denied that it is the
employer of Colaste and alleged that STEP is
Colaste's real employer. Hence, it is not liable for the
claims and causes of action of Colaste, and that the
complaint should be dismissed insofar as it is
concerned.
LA Ruling:
The LA dismissed the complaint for lack of merit. He
ruled that Colaste's real employer is STEP because it
directly exercised all powers and responsibilities over
Colaste. The LA also dismissed Colaste's money
claims for lack of merit.
Colaste appealed from the LA's decision before the
NLRC.
NLRC Ruling:
The NLRC remanded the case to the arbitration
branch of origin for further proceedings as the LA
failed to rule on the issue of illegal dismissal.
LA Ruling: (remanded)
In a remanded case, the LA held that Lingnam
restaurant was guilty of illegal dismissal. The LA rule
that Colaste's job as assistant cook is necessary and
desirable to the restaurant business of Lingnam
Restaurant; thus, he is considered as a regular
employee of Lingnam restaurant. Moreover, the LA
found that Colaste was not paid his salary in
accordance with applicable wage orders.
Lingnam Restaurant appealed from the Decision of
the LA before the NLRC.
NLRC Ruling (appeal on remanded case):
The NLRC reverse and set aside the Decision of the
LA.
The NLRC held that STEP is an independent
contractor providing manpower services toi
Lingnam Restaurant. An ER-EE relationship existed
between STEP and Colaste, who was assigned to
one of STEP's clients, Lingnam Restaurant. As Colaste
had been employed with STEP for more than a year
and performing duties necessary and desirable to its
trade and business, he is considered a regular
employee. The failure of STEP to assign Colaste to its
other business clients after the lapse of 6 months
rendered himn constructively dismissed.
STEP's motion for reconsideration was denied.
STEP file with the CA a petition for certiorari, alleging
that the NLRC committed grave abuse of discretion
amounting to lack or excess of jurisdiction in (1)
setting aside the Decision of the LA, (2) ruling that
there was constructive dismissal and in considering
the said issue not raised in the appeal nor in the
Complaint; (3) holding STEP liable for constructive
dismissal for its alleged failure to assign complainant
to other business clients after the lapse of 6 months;
(4) ordering STEP to immediately reinstate
complainant Colaste and to pay him full backwages
plus other monetary awards; and (5) giving due
course to the appeal of Lingnam Restaurant and in
completely absolving the latter from any liability in
the subject complaint of Colaste.
CA Ruling:
The CA reversed and set aside the Decision and
Resolution of the NLRC and reinstated and affirmed
the Decision of the LA holding that Colaste's
employer is Lingnam Restaurant, which illegally
dismissed Colaste; hence, Colaste is entitled to
reinstatement, payment of full backwages and
other monetary benefits.
The CA found that STEP is a labor-only contractor;
hence, the workers it supplied to Lingnam
Restaurant, including Colaste, should be considered
employees of Lingnam restaurant.
Lingnam restaurant's MR was denied for lack of merit
by the CA.
ISSUES:
Whether or not the contract where the deployed
employee's performance is under strict supervision
and control of the client as well as the end result
constitutes labor-only contracting
Whether or not a regular employee can be dismissed
for expiration of contract
RULING:
The SC, citing the case of PCI Automation Center,
Inc vs NLRC, held that the legitimate job contractor
provides services, while the labor-only contractor
provides only manpower. The legitimate job
contractor undertakes to perform a specific job for
the principal employer, while the labor0only
contractor merely provides the personnel to work for
the principal employer.
The SC agreed with the CA that STEP was engaged
in labor-only contracting. The SC noted that STEP, in
its Cautionary Pleading filed before the LA, stated
that it entered into an agreement with petitioner
Lingnam Restaurant in 2002, wherein it agreed to
provide Lingnam Restaurant with manpower to
perform activities related to the operation of its
restaurant business. Thus, as stated by the CA,
respondent STEP merely acted as placement
agency providing manpower to petitioner Lingnam
Restaurant. The service rendered by STEP in favor of
Lingnam Restaurant was not the performance of a
specific job but the supply of personal to work at
Lingnam Restaurant. In this case, STEP provided
petitioner with an assistant cook in the person of
Colaste.
In the Employment Contract between Colaste and
STEP from January 4, 2006 to June 3, 2007, Colaste
was assigned as kitchen helper at petitioner Lingnam
Restaurant, while in the subsequent employment
contracts from November 5, 2007 up to January 5,
2008; and from January 5, 2008 up to March 5, 2008,
he was assigned as assistant cook at Lingnam
Restaurant.
The three employment contracts state that Colaste's
"work result performance shall be under the Strict
Supervision, Control and make sure that the end
result is in accordance with the standard specified
by client to STEP Inc." Hence, the work performance
of Colaste is under the strict supervision and control
of the client (Lingnam Restaurant) as well as the end
result thereof. As assistant cook of Lingnam
Restaurant, Colaste's work is directly related to the
restaurant business.
In this case, Lingnam Restaurant was not denied due
process, since it filed with the CA a
Manifestation/Notice and Comment to the petition
for certiorari, which contained the same arguments
as to the insufficient in form and substance of the
petition, among others.

Colaste worked in its restaurant and presumably
under the supervision of its Chief Cook. This falls
under the definition of labor-only contracting under
Section 5 of Rule VIII-A, Book III of the Amended Rules
to Implement the Labor Code, since the contractor,
STEP, merely supplied Colaste as assistant cook to
the principal, Lingnam Restaurant; the job of Colaste
as assistant cook is directly related to the main
business of petitioner and STEP does not exercise the
right to control the performance of the work of
Colaste, the contractual employee.
As STEP is engaged in labor-only contracting, the
principal, Lingnam Restaurant, shall be deemed the
employer of Colaste. In accordance with Section 7,
Rule VII-A, Book III of the Amended Rules to
Implement the Labor Code. Colaste started working
with petitioner since 2006 and he should be
considered a regular employee of petitioner.
The reason for the termination of Colaste was his
contract with Lingnam Restaurant through STEP had
expired. Lingnam Restaurant explained that
Colaste's real employer is STEP. But since respondent
STEP is engaged in labor-only contracting, Lingnam
Restaurant is deemed the employer of Colaste. Thus,
the reason for Colaste's termination is not a just or
authorized cause for his dismissal under Articles 282
to 284 of the Labor Code.
As regards Lingnam Restaurant's allegation that its
right to due process was violated because it "could
not intelligently identify and discern the matters
which it ought to address or oppose in the Petition
for Certiorari" filed by STEP with the CA, only Lingnam
Restaurant can be held responsible for its
misapprehension and it could not be attributed to
the CA, which did not find the petition insufficient in
form and substance.
Lastly, the Decision of the NLRC did not become final
and executory because STEP timely filed a petition
for certiorari, assailing the said Decision before the
CAR, which was, thus necessarily empowered to
determine whether or not the NLRC committed
grave abuse of discretion amounting to lack or
excess of jurisdiction in this decision. Given this power
of judicial review of Labor Cases under Rule 65 RoC,
the CA has the authority to affirm, modify or reverse
the assailed Decision of the NLRC.

Moreover, Colaste was not afforded procedural due

process, since Lingnam restaurant failed to comply
with the written-notice requirement under Article
2277(b) of the Labor Code. The lack of valid cause
for dismissal and failure to comply with the twin-
notice requirement rendered the dismissal of Colaste
illegal.

Lingnam Restaurant contends that its right to due

process was violated as it could not intelligently
identify and discern the matter which it ought to
address or oppose in the petition for certiorari filed
by STEP with the CA because there were no claims
and reliefs against it, and the petition was insufficient
inform and substance. Petitioner also contends that
the NLRC's decision already became final and
executory insofar as it is concerned because
complainant Colaste did not appeal from the
decision of the NLRC.

The SC found the contention unmeritorious. The

essence of due process is simply an opportunity to
be heard or as applied to administrative
proceedings, an opportunity to explain one's side or
an opportunity to seek a reconsideration of the
action or ruling complained of. What the law
prohibits is absolute absence of the opportunity to
be hear; hence, a party cannot feign denial of due
process where he had been afforded the
opportunity to present his side.