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while the Constitution mandates a bias in favor of
Filipino goods, services, labor and enterprises, at
the same time, it recognizes the need for business
exchange with the rest of the world on the bases
of equality and reciprocity and limits protection of
Filipino enterprises only against foreign
competition and trade practices that are unfair.
The only limitation provided by law is that the
closure must be "bona fide in character and not
impelled by a motive to defeat or circumvent the
tenurial rights of employees."Thus, when an
employer complies with the foregoing conditions, the
Court cannot prohibit closure "just because the
business is not suffering from any loss or because of
the desire to provide the workers continued
employment."
overtime pay does not fall within the definition of
benefits under Article 100 of the Labor Code on
prohibition against elimination or diminution of
benefits.
employer-employee relationship in the public
sector is primarily determined by special laws, civil
service laws, rules and regulations. While the four-
fold test and other standards set forth in the labor
code may aid in ascertaining the relationship
between the government and its purported
employees, they cannot be overriding factors over
the conditions and requirements for public
employment as provided for by civil service laws,
rules and regulations.
the basic principle in termination cases is that the
burden of proof rests upon the employer to show
that the dismissal is for just and valid cause
quitclaims are frowned upon for beingcontrary to
public policy, the Court has, likewise, recognized
legitimate waivers thatrepresent a voluntary and
reasonable settlement of a worker's claim which
should berespected as the law between the parties
Where the person making the waiver has done
sovoluntarily, with a full understanding thereof, and
the consideration for the quitclaim iscredible and
reasonable, the transaction must be recognized as
being a valid and bindingundertaking.

Management has exclusive prerogatives to

management is free to regulate, according to its
own discretion and judgment, all aspects of
employment, including hiring, work assignments,
working methods, time, place and manner of work,
processes to be followed, supervision of workers,
working regulations, transfer of employees, work
supervision, layoff of workers and discipline,
dismissal, and recall of workers.
determine the qualifications and fitness of workers f
the employer's exercise of management
prerogatives, with or without reason, does not per se
the employer’s exercise of its management
constitute unjust discrimination, unless there is a
prerogative is subject to the caveat that it should not
showing of grave abuse of discretion.It is only in
performed in violation of any law and that it is not
instances of unlawful discrimination, limitations
tainted by any arbitrary or malicious motive on the
imposed by law and collective bargaining agreement
part of the employer.
can the prerogative of management be reviewed.

set the required fair and reasonable criteria in the

termination of the petitioners’ employment

labor relations system in the Philippines has extra-

territorial jurisdiction
NLRC shall have the original and exclusive
jurisdiction to hear and decide all claims arising out
of employer-employee relationship or by virtue of any
law or contract involving Filipino workers for
overseas deployment
The first level, based on Asian Alcohol case, is to
recognized distinctions on a per position basis.
Whether employed locally or overseas, all Filipino
workers enjoy the protective mantle of Philippine
labor and social legislation, contract stipulations to
The second level, derived from Golden Thread
the contrary notwithstanding
case, is where the distinction narrows down to
particular employees occupying the same positions
which were declared to be redundant.

. The provisions of the Constitution as well as the

Labor Code which afford protection to labor apply to Moreover, the principle of lex loci contractus
Filipino employees whether working within the governs in this jurisdiction.
Philippines or abroad.

the Contract of Employment between petitioners

and private respondent was executed here in the the employer should strictly comply with the twin
Philippines with the approval of POEA. Hence, Labor requirements of notice and hearing without regard
Code and other laws affecting labor apply in this to the nature and situs of employment or the
case. nationality of the employer.

It is a basic fundamental rule in the interpretation

of a contract that if the terms thereof are clear and
leave no doubt upon the intention of the contracting
parties the literal meaning of the stipulation shall
control, but when the words appear to be contrary
to the evident intention of the parties, the latter shall
prevail over the former when the words and language of documents are
clear and plain or readily understandable by an
ordinary reader thereof, there is absolutely no room
The real nature of a contract may be determined
for interpretation or construction
from the express terms of the written agreement and
from the contemporaneous and subsequent acts of
the contracting parties

Art. 106 of the Labor Code provides that there is

"labor-only" contracting where (1) the person
supplying workers to an employer does not have As a general rule, a contractor is presumed to be a
substantial capital or investment in the form of tools, labor-only contractor, unless such contractor
equipment, machineries, work premises, among overcomes the burden of proving that it has the
others, and (2) the workers recruited and placed by substantial capital, investment, tools and the like
such person are performing activities which are
directly related to the principal business of such
employer.
Thus, a finding that a contractor is a labor-only
contractor is equivalent to a declaration that there is
In labor-only contracting, it is the law which
an employer-employee relationship between the
creates an employer-employee relationship between
principal, and the workers of the labor-only
the principal and the workers of the labor-only
contractor; the labor-only contractor is deemed only
contractor.I
as the agent of the principal.

provision classifies employees into regular, project,
seasonal, and casual. It further classifies regular
employees into two kinds: (I) those "engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the
As regular employees, respondents were entitled nature of complainants' work is one where
to security of tenure and could be dismissed only for services are needed only when scrap metals are
just or authorized causes and after the observance delivered
of due process.
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provision classifies employees into regular, project,
seasonal, and casual. It further classifies regular
employees into two kinds: (I) those "engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the
employer"; and (2) casual employees who have
"rendered at least one year of service, whether such
service is continuous or broken."
A regular employment, whether it is one or not, is
aptly gauged from the concurrence, or the non-
concurrence, of the following factors (a) the manner
of selection and engagement of the putative
employee; (b) the mode of payment of wages; (c)
the presence or absence of the power of dismissal;
and (d) the presence or absence of the power to
control the conduct of the putative employee or the
power to control the employee with respect to the
means or methods by which his work is to be
accomplished.
determine the existence of employer-employee
relationship is to adopt a two-tiered test involving: (1)
the putative employer's power to control the
employee with respect to the means and methods
by which the work is to be accomplished; and (2) the
underlying economic realities of the activity or
relationship
Under the broader economic reality test,
apparent that petitioner is economically
dependent on respondent corporation for
her continued employment in the latter's
line of business.
This is especially appropriate in this case where
there is no written agreement or terms of reference
to base the relationship on; and due to the
complexity of the relationship based on the various
positions and responsibilities given to the worker
over the period of the latter's employment.
Execution of a judgment can only be issued
against one who is a party to the action, and not
against one who, not being a party to the action,
has not yet had his day in court.
respondents were never mentioned in the illegal
dismissal proceedings
LA never acquired jurisdiction over them as to
order the piercing of the veil of corporate fiction, and
to make them jointly and severally liable
Constructive dismissal has often been defined as a
"dismissal in disguise" or "an act amounting to
dismissal but made to appear as if it were not."
In this case, petitioners were neither demoted nor
did they receive a diminution in pay and benefits.
Petitioners also failed to show that employment is
rendered impossible, unreasonable or unlikely.
two theories of employment discrimination: the
disparate treatment and the disparate impact.
On the other hand, to establish disparate impact,
the complainants must prove that a facially neutral
policy has a disproportionate effect on a particular
class.
As regular employees, respondents were entitled nature of complainants' work is one where
to security of tenure and could be dismissed only for services are needed only when scrap metals are
just or authorized causes and after the observance delivered
of due process.
The irregular nature of work, stoppage of work and
then work again depending on the supply
the fact that petitioner had registered the
respondents with SSS is proof that they were indeed
his employees. mandates the policy of social justice so as to
strike a balance between an avowed predilection for
labor, on the one hand, and the maintenance of the
legal rights of capital, the proverbial hen that lays the
golden egg, on the other.
The application of the four-fold test in this case
proves that an employer-employee relationship did
exist
State policy is to afford full protection to labor.
When conflictinginterests of labor and capital are
weighed on the scales of social justice, the heavier
influenceof capital should be counterbalanced by
the compassion that the law accords the less,
privileged workingman.
Security of tenure is indeed constitutionally
guaranteed. However, this should not
beindiscriminately invoked to deprive an employer
of its management prerogatives and right toshield The law, in protecting the rights of the employee,
itself from incompetence, inefficiency and authorizes neither oppression nor self-destruction of
disobedience displayed by its employees. the employer.
The "control test" assumes primacy in the overall
the control test, an employer-employee
consideration. Under this test, an employment
relationship exists where the person for whom the
relation obtains where work is performed or
services are performed reserves the right to control
services are rendered under the control and
not only the end achieved, but also the manner and
supervision of the party contracting for the service,
means to be used in reaching that end
not only as to the result of the work but also as to the
manner and details of the performance desired.
the control test merely calls for the existence of the
right to control, and not necessarily the exercise
thereof. It is not essential that the employer actually
supervises the performance of duties by the
employee. It is enough that the former has a right to
wield the power
One of the roles of the POEA is the regulation and
Indispensable to the DOLE' s exercise of such
adjudication of private sector participation in the
power is theexistence of an actual employer-
recruitment and placement of overseas workers.
employee relationship between the parties.
The law and rules implementing the same
automatic disqualification of officers and directors unequivocally state that once a recruitment license of
of herein petitioner, without specifically impleading an entity is cancelled, its officers and directors are
the parties concerned automatically prohibited from engaging in such
activity.
essence of due process in administrative
proceedings is the opportunity to explain one's side
or a chance to seek reconsideration of the action or In labor cases, it has been held that due process
ruling complained of is simply an opportunity to be heard and not that an
actual hearing
However, when such a formal hearing is allowed
but a party is not informed thereof, as a
consequence of which he is unable to attend
We stressthat the circumstances contemplated in
constructive dismissal cases are clear acts of such failure to attend should not be taken
discrimination, insensibility or disdain which against him.
necessarily precedes the apparent "voluntary"
separation from work. can be found.
Under the disparate treatment analysis, the
plaintiff must prove that an employment policy is
discriminatory on its face.
No- spouse employment policies requiring an
employee of a particular sex to either quit,
For example, an employment policy prohibiting the
employer from hiring wives of male employees, but
not husbands of female employees, is discriminatory
on its face
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two theories of employment discrimination: the
disparate treatment and the disparate impact.
On the other hand, to establish disparate impact,
the complainants must prove that a facially neutral
policy has a disproportionate effect on a particular
class.
For example, although most employment policies
do not expressly indicate which spouse will be
required to transfer or leave the company, the policy
often disproportionately affects one sex.
These courts also find the no-spouse employment
policy invalid for failure of the employer to present
any evidence of business necessity other than the
general perception that spouses in the same
workplace might adversely affect the business.
unless the employer can prove that the
reasonable demands of the business require a
distinction based on marital status and there is no
better available or acceptable policy which would
better accomplish the business purpose. This is
known as the bona fide occupational qualification
exception
To justify a bona fide occupational qualification,
the employer must prove two factors: (1) that the
employment qualification is reasonably related to the
essential operation of the job involved; and, (2) that
there is a factual basis for believing that all or
substantially all persons meeting the qualification
would be unable to properly perform the duties of
the job.
provides for “disgraceful or immoral conduct” as a
ground for dismissal in addition to the just causes
for termination of employment
disclose to management any existing or future
relationship by consanguinity or affinity with co-
employees or employees of competing drug
companies and should management find that such
relationship poses a possible conflict of interest, to
resign from the company
prohibition against personal or marital relationships
with employees of competitor companies upon
Glaxo’s employees is reasonable under the
circumstances
Glaxo possesses the right to protect its
economic interests
Constitution recognizes the right of enterprises to
adopt and enforce such a policy to protect its right to
reasonable returns on investments and to expansion
and growth
reminded about the company’s policy of not
accepting married women
employer discriminates against married women,
but not against married men, the variable is sex and
the discrimination is unlawfu
in derogation of the provisions of Article 136 of the
Labor Code on the right of a woman to be free from
any kind of stipulation against marriage in
connection with her employment
Under the disparate treatment analysis, the
plaintiff must prove that an employment policy is
discriminatory on its face.
No- spouse employment policies requiring an
employee of a particular sex to either quit,
For example, an employment policy prohibiting the
employer from hiring wives of male employees, but
not husbands of female employees, is discriminatory
on its face
absence of such a bona fide occupational
qualification invalidates a rule denying employment
to one spouse due to the current employment of the
other spous
a bona fide occupational qualification justifies
an employer's no-spouse rule, the exception is
interpreted strictly and narrowly by these state
courts. There must be a compelling business
necessity for which no alternative exists other
than the discriminatory practice.
whether a conduct is disgraceful or immoral
involves a two-step process: first, a consideration
of the totality of the circumstances surrounding the
conduct; and second, an assessment of the said
circumstances vis-à-visthe prevailing norms of
conduct
pregnancy out of wedlock cannot be considered
as disgraceful or immoral
Tecson’s superiors informed him that his marriage
to Bettsy gave rise to a conflict of interest. Tecson’s from the wordings of the contractual provision and
superiors reminded him that he and Bettsy should the policy
decide which one of them would resign
company merely seeks to avoid is a conflict of
interest between the employee and the company
that may arise out of such relationships.
because relationships of that nature might
compromise the interests of the company
An employee of the company remains free to
marry anyone of his or her choosing. The policy is
not aimed at restricting a personal prerogative that
aims to protect its interests against the possibility belongs only to the individual. However, an
that a competitor company will gain access to its employee’s personal decision does not detract the
secrets and procedures. employer from exercising management prerogatives
to ensure maximum profit and business success.
Indeed, while our laws endeavor to give life to the
constitutional policy on social justice and the
protection of labor, it does not mean that every labor
dispute will be decided in favor of the workers. The
law also recognizes that management has rights
which are also entitled to respect and enforcement
in the interest of fair play.
a woman employee must remain unmarried could
be justified as a "bona fide occupational
qualification," or BFOQ, where the particular
requirements of the job would justify the same, but
not on the ground of a general principle, such as
the desirability of spreading work in the workplace.
no-marriage rule applicable to both male and
A requirement of that nature would be valid female flight attendants, was regarded as unlawful
provided it reflects an inherent quality reasonably since the restriction was not related to the job
necessary for satisfactory job performance performance of the flight attendants

reminded about the company’s policy of not
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employer discriminates against married women,
but not against married men, the variable is sex and
the discrimination is unlawfu
in derogation of the provisions of Article 136 of the
Labor Code on the right of a woman to be free from
any kind of stipulation against marriage in
connection with her employment
likewise assaults good morals and public policy,
tending as it does to deprive a woman of the
freedom to choose her status, a privilege that by all
accounts inheres in the individual as an intangible
and inalienable right
a woman employee must remain unmarried could
be justified as a "bona fide occupational
qualification," or BFOQ, where the particular
requirements of the job would justify the same, but
not on the ground of a general principle, such as
the desirability of spreading work in the workplace.
no-marriage rule applicable to both male and
A requirement of that nature would be valid female flight attendants, was regarded as unlawful
provided it reflects an inherent quality reasonably since the restriction was not related to the job
necessary for satisfactory job performance performance of the flight attendants
parties to a contract may establish any
agreements, terms, and conditions that they may
deem convenient, the same should not be contrary
to law, morals, good customs, public order, or
public policy.