Labor Law

Dean’s
Circle
2016
UNIVERSITY OF SANTO TOMAS
Digested by: DC 2016 Members
Editors:
Tricia Lacuesta
Lorenzo Gayya
Cristopher Reyes
Macky Siazon
Janine Arenas
Ninna Bonsol
Lloyd Javier
LABOR LAW
Supreme Court decisions penned by Associate
Justice Presbitero J. Velasco, Jr.
Table of Contents
2
Illegal
Recruitment ..........................................................................................................
... 2
Regulatory and Visitorial Powers of the DOLE
Secretary............................................ 3
Labor
Standards .............................................................................................................
.... 4
Wages ...................................................................................................................
.............. 4
Minimum
Wage .................................................................................................................. 5
Non-diminution of
Benefits................................................................................................. 6
Separation
Pay ................................................................................................................... 7
Retirement
Pay ................................................................................................................. 8
Employer-employee
Relationship .................................................................................... 8
Four-fold
Test ...................................................................................................................
10
Project-
employment ........................................................................................................
11
Job
Contracting ...........................................................................................................
. 12
Effects of Labor-Only
Contracting ............................................................................. 12
Termination of
Employment ........................................................................................... 14
Just
Causes...................................................................................................................
. 14
Authorized
Causes........................................................................................................ 19
Twin-Notice
Requirement ................................................................................................ 22
Hearing: Meaning of Opportunity to be
Heard ........................................................ 23
Reinstatement ......................................................................................................
........... 28
Preventive
Suspension ..................................................................................................... 29
Constructive
Dismissal ..................................................................................................... 30
3
Certification
Election ....................................................................................................... 31
Union Security
Clauses ................................................................................................... 32
Unfair Labor Practice of
Employers ............................................................................... 33
Illegal
Strike ...................................................................................................................
34
Liability of Ordinary
Workers ........................................................................................ 37
Procedure and
Jurisdiction ......................................................................................... 38
Appeal to the
NLRC ........................................................................................................ 39
Jurisdiction of
NLRC ......................................................................................................... 40
Remedies ..............................................................................................................
............ 41
Original and Appellate Jurisdiction of Med
Arbiters ................................................. 42
Social
Legislation.............................................................................................................
. 45
SSS
Law .......................................................................................................................
.. 45
Employees
Compensation ......................................................................................... 46
4
LABOR LAW
Recruitment and Placement
Illegal Recruitment (Sec. 5, R.A. No. 10022)
PEOPLE OF THE PHILIPPINES v. GLORIA BARTOLOME
G.R. No. 129486, July 4, 2008, Velasco, Jr., J.
Illegal recruitment is committed when two (2) elements concur: First, the
offender does not have the required license or authority to engage in the
recruitment and placement of workers. Second, the offender undertook (a)
recruitment and placement activity defined under Article 13(b) of the Labor
Code or (b) any prohibited practice under Art. 34 of the same code. Illegal
recruitment is qualified into large scale, when three or more persons,
individually or as group, are victimized.
Facts:
Gloria Bartolome, without a license for the placement of workers, impressed
upon four (4) of her childhood acquaintances that she could send them to
Bahrain for overseas employment. For her promise of employment, Gloria asked
a fee from all of them to cover all expenses. Upon receiving payment, Gloria
sent a photocopied plane ticket to each person. Gloria vanished after her
promises did not materialize. The POEA initiated the complaints against Gloria,
and the latter was convicted of illegal recruitment in large scale.
Issue:
Whether Gloria is guilty of illegal recruitment in large scale
Ruling:
Yes. Gloria lacked the required license as shown by the fact that the POEA no
less initiated the filing of the complaints. Gloria also engaged in recruitment
activities per Art. 13(b) of the Labor Code when she promised employment for a
fee to all four (4) persons. Finally, she recruited more than three (3) persons.
Hence, Gloria is guilty of illegal recruitment in large scale.
PEOPLE OF THE PHILIPPINES v. RODOLFO GALLO y GADOT, FIDES

PACARDO y JUNGCO and PILAR MANTA DUNGO
G.R. No. 187730, June 29, 2010, Velasco, Jr., J.
The elements of syndicated illegal recruitment are: (a) the offender undertakes
any activity within the meaning of recruitment and placement as defined under
the Labor Code; (b) he has no valid license or authority to lawfully engage in
recruitment and placement; and (c) the illegal recruitment is committed by a
group of three or more persons conspiring or confederating with one another.
Facts:
The accused were convicted for the crime of syndicated illegal recruitment and
estafa based on the complaint of Dela Caza. After having been assured that
MPM Agency had already sent many workers abroad and that there are job
placements for the complainant and other applicants in Korea, Dela Caza was
convinced to part with her money in the amount of P45,000 as placement fee.
After a few months of waiting to be deployed, Dela Caza and the other
applicants took action. Thereafter, the accused were arrested. Rodolfo Gallo
5
asserted that he was an errand boy, not an employee of the agency; thus, he
could not be held criminally liable.
Issue:
Whether accused is guilty of syndicated illegal recruitment
Held:
Yes. Testimonial evidence presented by the prosecution shows that, in
consideration of a promise of foreign employment, accused-appellant received
the amount of PHP45,000.00 from Dela Caza. When accused-appellant made
misrepresentations concerning the agency’s purported power and authority to
recruit for overseas employment and collected money in the guise of placement
fees, the former clearly committed illegal recruitment. Accused-appellant
cannot argue that the trial court erred in finding that he was indeed an
employee of the recruitment agency. His active participation in the illegal
recruitment is unmistakable. The fact that he was the one who issued and
signed the official receipt belies his profession of innocence.
Regulatory and Visitorial Powers of the DOLE Secretary

PEOPLE’S BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.) v. THE
SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE
REGIONAL DIRECTOR,
DOLE REGION VII, AND JANDELEON JUEZAN
G.R. No. 179652, March 6, 2012, Velasco, Jr., J.
The DOLE can make a prima facie determination of the existence of EER, to the
exclusion of the NLRC, for purposes of determining if it has jurisdiction over a
complaint brought before it.
Facts:
Jandeleon filed a complaint against Bombo Radyo with the DOLE Regional Office
for delayed payment of wages, and non-payment of other benefits. Bombo
Radyo disputed the existence of an employer-employee relationship (EER). After
summary investigation, the Regional Director, as affirmed by the Acting
Secretary of Labor and Employment, found the presence of EER and ruled for
Jandeleon. The SC originally ruled that the DOLE Secretary has no jurisdiction to
determine the presence of EER.
The Public Attorney’s Office and the DOLE moved to clarify the original decision
as to the extent of the visitorial and enforcement powers of the DOLE.
Issue:
Whether the DOLE Secretary may determine the existence of an EER to the
exclusion of the NLRC
Ruling:
Yes. (1) The law did not say that the DOLE must first seek the NLRC’s
determination of the existence of an EER, or that should the existence of the
EER be disputed, the DOLE should refer the matter to the NLRC. (2) The DOLE
can use the same test (i.e. the four-fold test) used by the NLRC to determine
6
the existence of EER. (3) The expanded visitorial and enforcement power of the
DOLE granted by RA 7730 would be rendered nugatory if the alleged employer
could, by the simple expedient of disputing the EER, force the referral of the
matter to the NLRC. As to the extent of the findings of EER by the DOLE
Secretary, a prima facie determination of the existence of EER is sufficient to
determine if the DOLE has jurisdiction over the case.
The following are guidelines to determine if the DOLE has jurisdiction should a
complaint be brought before the DOLE to give effect to labor standards
provision of the Labor Code or other labor legislation: (1 The DOLE shall make a
prima facie determination of the existence of EER, to the exclusion of the NLRC;
(2) If the DOLE finds that there is no EER, the jurisdiction is properly with the
NLRC; (3) If the complaint before the DOLE is accompanied by a claim for
reinstatement, the jurisdiction belongs with the Labor Arbiter under Art. 217
(3); and (4) The findings of the DOLE may still be questioned through a petition
for certiorari under Rule 65 of the Rules of Court. If the complaint is filed with
the NLRC while there is still an existing employer-employee relationship, the
jurisdiction is properly with the DOLE.
Labor Standards
Wages
ASSOCIATED LABOR UNIONS(ALU) and DIVINE WORD UNIVERSITY
EMPLOYEES UNION-ALU(DWUEU-ALU) v. CA, THE ROMAN CATHOLIC
ARCHBISHOP OF PALO, LEYTE (RCAP) and DIVINE WORD UNIVERSITY
OF TACLOBAN (DWUT)
G.R. No. 156882, October 31, 2008, Velasco, Jr., J.
Art. 110 of the Labor Code applies only to cases of bankruptcy and liquidation.
Likewise, the concurrence and preference of credits properly come into play
only in cases of insolvency.
Facts:
RCAP is a corporation sole which sold to Societas Verbum Dei (SVD) the subject
13 parcels of land, the last 4 of which were untitled when the sale was
concluded. While the conveying document was not notarized, the SVD was able
to secure the corresponding TCTs over the subject lots, but the deed conditions,
restrictions, and reversionary right of the RCAP were not annotated. Due to
labor unrest, DWUT, run by the SVD, and the Union engaged in a protracted
legal battle. RCAP filed a petition for annotation. DWUT issued notices to
union’s members of the closing of the university and consider themselves
dismissed. Prompted by the closure of DWUT and the resulting termination of
its members’ services, the Union filed a complaint.
The Union alleged in its complaint that the sale of the subject properties over
which the DWUT is located was incomplete. What is more, the RCAP did not,
despite the sale, sever its employment relations with DWUT which, thus,
rendered the RCAP solidarily liable with DWUT for the payment of the benefits
of the Union members. RTC dismissed the petition. The parties entered in a
Memorandum of Agreement (MOA). CA reversed and granted the petition to
annotate.
7
Issue:
Whether Article 110 of the Labor Code in relation to the Civil Code provisions on
concurrence and preference of credits apply in the instant case
Ruling:
No. The judgment lien over the subject properties is really non-existent as it has
not been shown that a levy on execution has been imposed over the subject
properties. We agree with the RCAP that a judgment lien over the subject
properties has not legally attached and that Art. 110 of the LC, in relation to
Arts. 2242, 2243, and 2244 of the Civil Code on concurrence and preference of
credits, does not cover the subject properties. Art. 110 of the LC applies only to
cases of bankruptcy and liquidation. Likewise, the abovementioned articles of
the Civil Code on concurrence and preference of credits properly come into play
only in cases of insolvency. Since there is no bankruptcy or insolvency
proceeding to speak of, much less a liquidation of the assets of DWUT, the
Union cannot look to said statutory provisions for support.
Moreover, we note the utter lack of showing that DWUT has no other assets to
answer its obligations. DWUT may have liquidity problems hampering its ability
to meet its judicially-imposed obligations. The school, however, appears to have
other properties it can and in fact did use to settle its obligations as shown in
the MOA. A scrutiny of the MOA readily shows that the subject properties were
not included in the assets or properties earmarked to settle DWUT’s obligations.
Minimum Wage
NASIPIT INTEGRATED ARRASTRE AND STEVEDORING SERVICES, INC.
(NIASSI) v.
NASIPIT EMPLOYEES LABOR UNION (NELU)-ALU-TUCP
G.R. No. 162411 June 30, 2008 Velasco, Jr., J.
Expressio unius est exclusio alterius. The express mention of one person, thing,
act, or consequence excludes all others. The beneficent, operative provision of
WO RXIII-02 is specific enough to cover only minimum wage earners.
Necessarily excluded are those receiving rates above the prescribed minimum
wage.
Facts:
Wage Board of Caraga Region in Northeastern Mindanao issued Wage Order No.
(WO) RXIII-02 which granted an additional PhP12 per day cost of living
allowance to the minimum wage earners in that region. Owing allegedly to
NIASSI’s failure to implement the wage order, the Union filed a complaint before
the DOLE for inspection and the enforcement of WO RXIII-02. But the inspection
team stated that WO RXIII-02 was not applicable to NIASSI’s employees since
they were already receiving a wage rate higher than the prescribed minimum
wage.
Voluntary Arbitrator Jesus G. Chavez rendered a decision granting the Union’s
prayer for the implementation of WO RXIII-02 on the rationale that WO RXIII-02
did not specifically prohibit the grant of wage increase to employees earning
above the minimum wage. On the contrary, Chavez said, the wage order
specifically enumerated those who are outside its coverage, but did not include
8
in the enumeration those earning above the minimum wage. On appeal, CA

affirmed.
Issue:
Whether the WO RXIII-02 may be made to apply and cover Nasipit’s employees
who, at the time of the issuance and effectivity of the wage order, were
receiving a wage higher than the prevailing minimum wage
Ruling:
No. WO RXIII-02 and its IRR provide that only minimum wage earners are
entitled to the wage increase. The only situation when employees receiving a
wage rate higher than that prescribed by the WO RXIII-02 may still benefit from
the order is, as indicated in Sec. 1 (c) of the IRRs, through the correction of
wage distortions. In any case, it would be highly irregular for the Wage Board to
issue an across-the-board wage increase, its mandate being limited to
determining and fixing the minimum wage rates within its area of concern, in
this case the Caraga Region, and to issue the corresponding wage orders and
implementing rules.
In the same case, the Court held that a RTWPB commits an ultra vires act when,
instead of setting a minimum wage rate, it prescribes a wage increase cutting
across all levels of employment and wage brackets:
The RTWPB did not determine or fix the minimum wage rate by the floor-wage
method or the salary-ceiling method in issuing the Wage Order. The RTWPB did
not set a wage level nor a range to which a wage adjustment or increase shall
be added. Instead, it granted an across-the-board wage increase of P15.00 to all
employees and workers of Region 2. In doing so, the RTWPB exceeded its
authority by extending the coverage of the Wage Orders to wage earners
receiving more than the prevailing minimum wage rate, without a denominated
salary ceiling.
Only employees receiving salaries below the prescribed minimum wage are
entitled to the wage increase set forth under WO RXIII-02, without prejudice, to
the grant of increase to correct wage distortions consequent to the
implementation of such wage order. Considering that NIASSI’s employees are
undisputedly already receiving a wage rate higher than that prescribed by the
wage order, NIASSI is not legally obliged to grant them wage increase. Decision
of the arbitrator is reversed.
Non-diminution of Benefits
TSPIC CORPORATION v. TSPIC EMPLOYEES UNION (FFW)
G.R. No. 163419, February 13, 2008, Velasco, Jr., J.
An erroneously granted benefit may be withdrawn without violating the
prohibition against non-diminution of benefits.
Facts:
TSPI Corporation entered into a Collective Bargaining Agreement with the
corporation Union for the increase of salary for the latter’s members for the
year 2000 to 2002. Thus, the increase in salary was materialized on January 1,
9
2000. However, on October 6, 2000, the Regional Tripartite Wage and

production Board raised daily minimum wage from P223.50 to P250.00 starting
November 1, 2000. Conformably, the wages of the 17 probationary employees
were increased to P250.00. They therefore became regular employees and
received another 10% increase in salary. In January 2001, TSPIC implemented
the new wage rates as mandated by the CBA. As a result, the nine employees
who were senior to the 17 recently regularized employees, received less wages.
On January 19, 2001, TSPIC’s Human Resource Development notified the 24
employees who are private respondents, that due to an error in the automated
payroll system, they were overpaid and the overpayment would be deducted
from their salaries starting February 2001. The Union asserted that there was
no error and the deduction of the alleged overpayment constituted diminution
of pay.
They brought the issue to the grievance machinery but the TSPIC and the Union
failed to reach an agreement. They went to a voluntary arbitration where the
arbitrator held that the unilateral deduction made by TSPIC violated Art. 100 of
the Labor Code. The decision was affirmed by the CA.
Issue:
Whether the deduction of the overpayment constitutes diminution of benefits
Ruling:
No. Diminution of benefits is the unilateral withdrawal by the employer of
benefits already enjoyed by the employees. There is diminution of benefits
when it is shown that: (1) the grant or benefit is founded on a policy or has
ripened into a practice over a long period; (2) the practice is consistent and
deliberate; (3) the practice is not due to error in the construction or application
of a doubtful or difficult question of law; and (4) the diminution or
discontinuance is done unilaterally by the employer. The overpayment of its
employees was a result of an error. This error was immediately rectified by
TSPIC upon its discovery. No vested right accrued to individual respondents
when TSPIC corrected its error by crediting the salary increase for the year
2001 against the salary increase granted under WO No. 8, all in accordance
with the CBA. Hence, any amount given to the employees in excess of what
they were entitled to may be legally deducted by TSPIC from the employees’
salaries. It was also fair that TSPIC deducted the overpayment in installments
over a period of 12 months starting from the date of the initial deduction to
lessen the burden on the overpaid employees. TSPIC must refund to
respondents any amount deducted from their salaries which was in excess of
what TSPIC is legally allowed to deduct from the salaries.
Separation Pay
CENTRAL PHILIPPINES BANDAG RETREADERS, INC. v. PRUDENCIO J.
DIASNES
10
When dismissal is due to the employee’s fault, separation pay should not be
awarded.
Facts:
Due to personal problems, Prudencio’s performance as sales manager of
Central Philippines Bandag Retreaders, Inc. (Bandag) waned and his absences
became more frequent. The Employee Adjudication Committee unanimously
agreed to relieve Prudencio for three (3) months to settle his problems, after
which Prudencio may either return to work but with another position, or retire
and receive his separation pay.
Instead of availing either option in the report, Prudencio requested that he be

transferred from Tacloban City to Cebu City, to which Bandag agreed. However,
Prudencio’s attendance and punctuality were still poor. The company eventually
dismissed Prudencio for gross and habitual neglect of duty under Art. 282 of the
Labor Code. Prudencio claims that assuming that he was legally separated from
his employment, he is still entitled to separation pay.
Issue:
Whether an employee validly dismissed due to his own fault is entitled to
separation pay
Ruling:
No. When an employee is lawfully dismissed, separation pay may only be
awarded if the cause of dismissal was not due to the employee’s fault, but due
to: (1) the installation of labor saving devices, (2) redundancy, (3)
retrenchment, (4) cessation of employer’s business, or (5) when the employee
is suffering from a disease and his continued employment is prohibited by law
or is prejudicial to his health and to the health of his co-employees (Art. 283 &
284, Labor Code). It may also be awarded in case of strained relations.
When the case falls under Art. 282, like gross and habitual neglect of duty,
separation pay should not be paid to the employee. Although there are cases
when social justice may warrant the award of separation pay or financial
assistance, the labor adjudicatory officials and the CA must be most judicious
and circumspect lest the constitutional policy to provide full protection to labor
be at the expense of the employers.
In addition, while the company did make an offer of separation pay upon
adopting the original recommendation of the Committee, the same offer was
superseded when Bandag agreed to Prudencio’s proposal to transfer to Cebu
City.
Retirement Pay
RICARDO G. PALOMA v. PHILIPPINE AIRLINES, INC. AND
THE NATIONAL LABOR RELATIONS COMMISSION
G.R. No. 148415, 156764, July 14, 2008, Velasco, Jr., J.
Unlike the public sector, there is no law allowing for commutation of unused or
accrued sick leave credits in the private sector. Commutation in the private
11
sector is allowed only by way of voluntary endowment by an employer through

company policy or by a Collective Bargaining Agreement (CBA).
Facts:
Ricardo worked with Philippine Airlines (PAL) for 35 years and retired on March
1992, or 9 months before PAL was privatized. Ricardo was paid his sick leave
credits worth in accord with company policy. Ricardo complained, arguing that
the sick leave credits paid to him was much lower than that required by
Executive Order No. 1077, issued in 1986. The said EO, allows retiring
government employees to commute, without limit, all his accrued vacation and
sick leave credits.
Issue:
Whether Ricardo is entitled to the benefits under EO 1077
Ruling:
No. PAL never ceased to be operated as a private corporation, and was not
subjected to the Civil Service Law. PAL was incorporated as a private
corporation. While PAL’s controlling interest was once owned by GSIS for a time,
and while during the said period, PAL may be considered as a GOCC, one fact
remains: PAL still functioned as a private corporation and for profit. It was the
Labor Code and not the Civil Service Law that was applied to PAL through the
years, since its incorporation. Since Ricardo was never a government employee
covered by the Civil Service Law, he never acquired the benefits accorded by
EO 1077. What applies instead is the company policy of PAL.
Employer-employee Relationship
RAUL G. LOCSIN and EDDIE B. TOMAQUIN v. PHILIPPINE LONG
DISTANCE TELEPHONE CO.
The power of control is the right to control not only the end to be achieved but
also the means to be used in reaching such end.
Facts:
Philippine Long Distance Telephone Company (PLDT) and the Security and
Safety Corporation of the Philippines (SSCP) entered into a Security Services
Agreement (Agreement) whereby SSCP would provide armed security guards to
PLDT to be assigned to its various offices. Pursuant to such agreement, Raul
Locsin and Eddie Tomaquin, among other security guards, were posted at a
PLDT office. PLDT issued a Letter terminating the Agreement effective October
1, 2001. Despite the termination of the Agreement, however, petitioners
continued to secure the premises of their assigned office. They were allegedly
directed to remain at their post by representatives of respondent. In support of
their contention, petitioners provided the Labor Arbiter with copies of petitioner
Locsin’s pay slips for the period of January to September 2002. On September
30, 2002, petitioners’ services were terminated. They filed a complaint before
the Labor Arbiter for illegal dismissal and recovery of money claims.
Issue:
12
Whether petitioners became employees of PLDT after the Agreement between

SSCP and PLDT was terminated
Ruling:
Yes. Respondent must be considered as petitioners’ employer from the
termination of the Agreement onwards as this was the only time that any
evidence of control was exhibited by respondent over petitioners. Respondent,
by directing petitioners to remain at their posts and continue with their duties,
exercised control over them. This is sufficient to establish the existence of an
employer-employee relationship. While respondent and SSCP no longer had any
legal relationship with the termination of the Agreement, petitioners remained
at their post securing the premises of respondent while receiving their salaries,
allegedly from SSCP. With the behest and, presumably, directive of respondent,
petitioners continued with their services. Evidently, such are indicia of control
that respondent exercised over petitioners.
GREGORIO V. TONGKO v. THE MANUFACTURERS LIFE INSURANCE CO.

(PHILS.), INC. and RENATO A. VERGEL DE DIOS
G.R. No. 167622, November 7, 2008, Velasco, Jr., J.
Whenever the existence of an employment relationship is in dispute, four
elements constitute the reliable yardstick: (a) the selection and engagement of
the employee; (b) the payment of wages; (c) the power of dismissal; and (d)
the employer's power to control the employee's conduct. It is the so-called
"control test" which constitutes the most important index of the existence of
the employer-employee relationship that is, whether the employer controls or
has reserved the right to control the employee not only as to the result of the
work to be done but also as to the means and methods by which the same is to
be accomplished.
Facts:
Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic
corporation engaged in life insurance business. Petitioner Gregorio Tongko
(Tongko) entered into a Career Agent’s Agreement with Manulife. As an agent,
his duties consisted of canvassing for applications for group policies and other
products of the company. Tongko was named unit manager in Manulife's Sales
Agency Organization, branch manager, and sales manager. Tongko failed to
comply with policies of Manulife, his Agency Agreement was terminated.
Tongko filed a complaint with the NLRC for illegal dismissal. Tongko, in a bid to
establish an employer-employee relationship, alleged that De Dios gave him
specific directives on how to manage his area of responsibility and also claimed
that his dismissal was without basis and that he was not afforded due process.
Manulife alleged that Tongko is not its employee, and that it did not exercise
"control" over him. Manulife claimed that the NLRC has no jurisdiction over the
case.
The labor arbiter decreed that no employer-employee relationship existed

between the parties. The NLRC reversed the labor arbiter’s decision finding
Tongko to have been illegally dismissed. The CA reversed the decision of the
13
NLRC finding the absence of an employer-employee relationship between the

parties and deeming the NLRC with no jurisdiction over the case.
Issues: Whether there was an employer-employee relationship between

Manulife and Tongko
Ruling:
Yes. The NLRC arrived at its conclusion, first, on the basis of the letter dated
November 6, 2001 addressed by De Dios to Tongko. According to the NLRC, the
letter contained "an abundance of directives or orders that are intended to
directly affect complainant's authority and manner of carrying out his functions
as Regional Sales Manager."
The NLRC further ruled that the different codes of conduct that were applicable
to Tongko served as the foundations of the power of control wielded by Manulife
over Tongko that is further manifested in the different administrative and other
tasks that he was required to perform. The NLRC also found that Tongko was
required to render exclusive service to Manulife, further bolstering the
existence of an employer-employee relationship. Finally, the NLRC ruled that
Tongko was integrated into a management structure over which Manulife
exercised control, including the actions of its officers. The NLRC held that such
integration added to the fact that Tongko did not have his own agency belied
Manulife's claim that Tongko was an independent contractor. Additionally, it
must be pointed out that the fact that Tongko was tasked with recruiting a
certain number of agents, in addition to his other administrative functions,
leads to no other conclusion that he was an employee of Manulife.
Four-fold Test
MARIAN B. NAVARETTE v. MANILA INTERNATIONAL FREIGHT
FORWARDERS, INC./MIFFI LOGISTICS COMPANY, INC., MR. HARADA,
AND MBI MILLENNIUM EXPERTS, INC.,
The power of control is determinative of the existence of employer-employee
relationship.
Facts:
MIFFI entered into a contract with MBI for the provision of production workers
and technical personnel for MIFFI's projects or temporary needs. MBI hired
Navarette and assigned her as a temporary project employee to MIFFI's
Packaging Department. For a fixed period of three (3) months, she worked
amongst MIFFI's regular employees who performed the same tasks as hers. She
used MIFFI's equipment and was supervised by employees of MIFFI. Navarette,
joined by other employees, filed a complaint for inspection against respondents
MIFFI, MLCI, MBI and a certain PAMS with the DOLE Regional Arbitration Branch
IV. Following an inspection of respondents' premises, certain violations of labor
laws were uncovered, including labor-only contracting by MBI. Several hearings
were had and eventually, the parties decided to submit an agreement to be
signed by all concerned and to be approved by DOLE officials.
14
Pursuant to said covenant, MBI called a meeting where Navarette and her co-
workers were asked to sign a document. However, Navarette found the
contents of the document to be erroneous since it stated that the parties had
already come to an agreement on the issues and conditions when, in fact, no
such agreement was made. This angered Navarette, causing her to throw the
document and to say, "Hindi ito ang pinag-usapan natin sa DOLE! Niloloko niyo
lang kami." Her actuations, to MBI, constituted serious misconduct, for which a
show-cause memorandum was issued directing her to explain herself. After
issuing several memoranda setting conferences on the matter to which
Navarette could not attend because of her work schedule, MBI terminated
Navarette's employment. Navarette filed a complaint for illegal dismissal before
the NLRC against MBI, MIFFI and MCLI. The respondents claimed that since MBI
is a legitimate labor contractor, MBI is liable to the petitioner.
Issue:
Whether Navarette is MBI's employee
Ruling:
Yes. A fundamental principle in Philippine labor law is the application of the four-
fold test in determining the existence of an employer-employee relationship,
thus: (1) selection and engagement; (2) payment of wages; (3) power to
dismiss; and (4) power of control over the means and methods by which the
work is to be accomplished. There are, however, instances when these
elements are not exercised by a single person or entity. There are cases where
one or more of the said factors are assumed by another entity, for which
reason, the Court made it clear that of the four tests mentioned, it is the power
of control that is determinative. One such instance is whenever an employer
supplies workers to another pursuant to a contracting agreement, i.e., job
contracting.
Per DOLE Order No. 3, Series of 2001, there is contracting or subcontracting

whenever an employer, referred to as the principal, farms out the performance
of a part of its business to another, referred to as the contractor or
subcontractor, and for the purpose of undertaking the principal's business that
is farmed out, the contractor or subcontractor then employs its own employees.
In such an arrangement, the four-fold test must be satisfied by the contractor or
subcontractor. Otherwise, it is the principal that shall be considered as the
employer.
Project employment
EQUIPMENT TECHNICAL SERVICES (ETS) & JOSEPH JAMES DEQUITO v.
CA, ALEX ALBINO, et.al.
The principal test for determining whether one is a "project employee," as
distinguished from "regular employee," is whether he was assigned to carry out
"a specific project or undertaking," the duration and scope of which were
specified at the time the employee was engaged for that project.
15
Facts:
One of ETS’ clients was Uniwide. Dequito was occupying the position of
manager of ETS. ETS hired the services of Albino, et.al. as pipe fitters,
plumbers, or threaders. ETS experienced financial difficulties when Uniwide
failed to pay for the plumbing work being done at its Coastal Mall. ETS was only
able to pay its employees 13th month pay equivalent to two weeks’ salary.
Thus, Albino, et. al. filed a case before the LA, which decided in favor of Albino,
et. al. and declared that their dismissal was illegal. NLRC reversed but upheld
the validity of the monetary award given. The CA reversed and ordered ETS to
pay their holiday pay and service incentive leave pay.
Issue:
Whether Albino, et. al. are project employees
Ruling:
No. The service of project employees are coterminous with the project and may
be terminated upon the end or completion of that project or project phase for
which they were hired. Regular employees, in contrast, enjoy security of tenure
and are entitled to hold on to their work or position until their services are
terminated by any of the modes recognized under the Labor Code.
ETS admits hiring Albino, et. al. to perform plumbing works for various projects.
Regular employment may reasonably be presumed and it behooves ETS to
prove otherwise, that the employment in question was contractual in nature
ending upon the expiration of the term fixed in the contract or for a specific
project or undertaking. But the categorical finding of the CA is that not a single
written contract of employment fixing the terms of employment for the duration
of the Uniwide project, or any other project, was submitted by ETS. Records of
payroll and other pertinent documents, such as job contracts secured by ETS
showing that they were hired for specific projects, were also not submitted by
ETS. Moreover, if they were indeed employed as project employees, ETS should
have had submitted a report of termination every time their employment was
terminated owing to the completion of each plumbing project. ETS’ failure to
report the employment termination and file the necessary papers after every
project completion tends to support the claim of not being project employees.
Also, the constitutionally-protected right of labor to security of tenure covers

both regular and project workers. Their termination must be for lawful cause
and must be done in a way which affords them proper notice and hearing.
Private respondents are regular employees whose services were terminated
without lawful cause and effected without the requisite notice and hearing.
Job Contracting
Effects of Labor-only Contracting
FONTERRA BRANDS PHILS., INC. v. LEONARDO LARGADO AND TEOTIMO
ESTRELLADO
G.R. No. 205300, March 18, 2015, Velasco, Jr., J.
16
Respondents, by accepting the conditions of the contract, cannot now argue

that they were illegally dismissed when their contracts were not renewed after
expiration.
Facts:
Fonterra contracted the services of Zytron for the marketing of its dairy
products. Pursuant to the contract, Zytron provided Fonterra with trade
merchandising representatives (TMRs), including herein respondents.
Subsequently, Fonterra sent Zytron a letter terminating its promotions contract
and it soon entered into an agreement for manpower supply with A.C. Sicat
Marketing and Promotional Services. Respondents submitted their job
applications with A.C. Sicat, which hired them for a term of five months. When
respondents’ 5-month contracts with A.C. Sicat were about to expire, they
allegedly sought renewal thereof, but were allegedly refused. Respondents filed
complaints for illegal dismissal, regularization, non-payment of service
incentive leave and 13th month pay, and actual and moral damages, against
Zytron and A.C. Sicat.
Issues:
1. Whether Zytron and A.C. Sicat are labor-only contractors
2. Whether respondents were illegally dismissed
Ruling:
1. Yes. A person is considered engaged in legitimate job contracting or
subcontracting if the following conditions concur:
17
The contractor or subcontractor carries on a distinct and independent business

and undertakes to perform the job, work or service on its own account and
under its own responsibility according to its own manner and method, and free
from the control and direction of the principal in all matters connected with the
performance of the work except as to the results thereof;
The contractor or subcontractor has substantial capital or investment; and

The agreement between the principal and contractor or subcontractor assures
the contractual employees entitlement to all labor and occupational safety and
health standards, free exercise of the right to self-organization, security of
tenure, and social and welfare benefits.
2. No. The termination of respondents’ employment with the latter was simply
brought about by the expiration of their employment contracts.
Respondents were employed by A.C. Sicat as project employees. In their

employment contract with the latter, it is clearly stated that “[A.C. Sicat is]
temporarily employing [respondents] as TMR[s] effective June 6, 2006 under
the following terms and conditions: The need for your service being only for a
specific project, your temporary employment will be for the duration only of
said project of our client, namely to promote FONTERRA BRANDS products xxx
which is expected to be finished on or before Nov. 06, 2006.”
Non-renewal of their contracts by A.C. Sicat is a management prerogative, and

failure of respondents to prove that such was done in bad faith militates against
their contention that they were illegally dismissed. The expiration of their
contract with A.C. Sicat simply caused the natural cessation of their fixed-term
employment thereat.
W.M. MANUFACTURING, INC. v. RICHARD R. DALAG AND GOLDEN ROCK

MANPOWER SERVICES
G.R. No. 209418, December 07, 2015, Velasco, Jr., J.
There is "labor-only" contracting where the person supplying workers to an
employer does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others, and the workers
recruited and placed by such person are performing activities which are directly
related to the principal business of such employer. In such cases, the person or
intermediary shall be considered merely as an agent of the employer who shall
be responsible to the workers in the same manner and extent as if the latter
were directly employed by him.
Facts:
Golden Rock contracted a “Service Agreement” with WM MFG. WM MFG
engaged the services of Dalag as a factory worker assigned at its factory thus
creating a five-month Employment Contract between them. Dalag later on filed
a complaint for illegal dismissal as he was not allowed to work and that he was
denied due process as to why he is not allowed. He further claimed that he was
assigned as a side seal machine operator which was necessary and desirable
for WM MFG’s plastic manufacturing business making him a regular employee.
He alleged that Golden Rock and WM MFG engaged in labor-only contracting
because all equipment for the job were furnished by WM MFG and all jobs were
18
to be done in the vicinity of WM MFG and he was under the control by the
supervisors of WM MFG. WM MFG alleged in their position paper that Dalag
abandoned his work and was not illegally dismissed. He was sent memos for
several faults he has done but never received them and did not report for work
anymore. The Labor Arbiter dismissed the complaint of Dalag. The NLRC
reversed the decision of the Labor Arbiter agreeing to the fact that WM MFG
and Golden Rock engaged in labor-only contracting. A Motion for
Reconsideration was later granted and setting aside the previous NLRC
decision. The CA ultimately reversed the decision and ruled in favor of Dalag
stating that Golden Rock was not able to prove that it was an independent
contractor as they were not able to show proof that they had substantial capital
and exercise control over Dalag.
Issue:
Whether WM MFG and Golden Rock engaged in labor-only contracting
Ruling:
Yes. It may be that the DOLE Regional Director for the National Capital Region
was satisfied by Golden Rock's capitalization as reflected on its financial
documents, but the basis for determining the substantiality of a company's
"capital" rests not only thereon but also on the tools and equipment it owns in
relation to the job, work, or service it provides. DO 18-02 defines "substantial
capital or investment" in the context of labor-only contracting as referring not
only to a contractor's financial capability, but also encompasses the tools,
equipment, implements, machineries and work premises, actually and directly
used by the contractor or subcontractor in the performance or completion of
the job, work or service contracted out.
Notwithstanding the contract stipulation leaving Golden Rock the exclusive

right to control the working warm bodies it provides WM MFG, evidence shows
that it was WM MFG who exercised supervision over Dalag's work performance.
Dalag was supervised by WM MFG's employees. WM MFG even furnished Dalag
with not less than seven memos directing him to explain within twenty-four
hours his alleged work infractions. The company took pains in issuing
investigation reports detailing its findings on Dalag's culpability. Clearly, WM
MFG disciplined Dalag for violation of company rules, regulations, and policies,
validating the presence of the right to control.
Termination of Employment
Just Causes
ESTRELLITA G. SALAZAR v. PHILIPPINE DUPLICATORS, INC., and /or
LEONORA FONTANILLA G.R. No. 154628, December 6, 2006, Velasco,
Jr., J.
The constitutional policy to provide full protection to labor is not meant to
oppress employers. The cause of labor does not prevent us from sustaining the
employer when the law is clearly on its side.
Facts:
Salazar was terminated from her employment due to alleged falsification of
company records. Salazar denies receiving Duplicator's termination letter. The
Labor Arbiter held that the dismissal was for a just cause but the company
19
breached the twin-notice requirement as provided by law. It ordered Duplicators

to pay the indemnity of PHP10,000.
Issue:
Whether Salazar validly dismissed
Ruling:
Yes. Petitioner was charged with falsifying company records. On this issue,
Labor Arbiter Caday made the following findings, viz: A scrutiny of these
documentary evidence reveals that on November 20, 1998, at around 3:00 PM
complainant Salazar visited Juliet Alvarez of Banco-Filipino-Legal, Paseo de
Roxas, Legaspi Village, Makati City (Annex A and A-1 attached to Respondents
Rejoinder). This belies complainants claim that she visited the respondent’s
customer, D.M. Consunji, Inc. on November 20, 1998 at around 3:00P.M. (Annex
C attached to Complainants Reply). Moreover, Mr. Enrique Patag signed the
Certification on December 15, 1998 on the date when complainant (Salazar)
was no longer reporting for work and filed a case for illegal dismissal against
respondents docketed as NLRC Case No. 00-12-10174-98 which was later
ordered dismissed by Labor Arbiter Eduardo Carpio for lack of interest to
prosecute. Similarly, the certification issued by Mr. Frederick Sison of the D.M.
Consunji, Inc. attesting to complainants visit on November 20, 1998, at 2:00
p.m. is confuted [sic] by the fact that on November 20, 1998, complainant
[Salazar] visited Fely/Federico and Lilian at the Makati Medical Center as
appearing in customer ledger of Makati Medical Center. (Annex B and B-1
attached to Respondents Rejoinder). With the foregoing observations,
complainant’s pretensions [are] at once noticeable and [merit] scant
consideration.
The findings of Arbiter Caday jibe with those of the NLRC, to wit:
Specifically, in a report she stated that she made a follow-up with Leny
Sambrano of Bengson Law Office on November 20, 1998. However, in her
Reply, she admitted that she saw, not Sambrano, who was not around, but his
secretary. It appears that [in] the report in question, Sambrano wrote, there was
no visit last Friday,11/20 and then affixed [her] signature. In another report, she
stated that she made a follow-up with Jun of ICLARM on November 20, 1998,
but it appeared that Jun Fedrigon wrote on the same report, which he also
signed, that she did not visit his office on the date in question. In a letter dated
December 15, 1998, he stated that he had no memory of seeing the
complainant on the date in question. x x x
The findings of both Arbiter Caday and the NLRC were sustained by the CA,
which ruled that there is ample proof to bear out that the petitioner knowingly
recorded erroneous entries in her Daily Sales Reports. It is well-settled that the
findings of fact of quasi-judicial agencies like the NLRC are accorded not only
respect but even finality if the findings are supported by substantial evidence;
more so when such findings were affirmed by the CA and such findings are
binding and conclusive upon this Court. Petitioner committed fraud or willful
breach of the employer’s trust reposed in her under Article 282 of the Labor
Code.
20
EDI-STAFFBUILDERS INTERNATIONAL, INC. v. NATIONAL LABOR

RELATIONS COMMISSION and ELEAZAR S. GRAN
In termination disputes or illegal dismissal cases, the employer has the burden
of proving that the dismissal is for just and valid causes. The employer is bound
to adduce clear, accurate, consistent, and convincing evidence to prove that
the dismissal is legal.
Facts:
EDI is engaged in recruitment and placement of OFWs. Eleazar Gran was an
OFW recruited by EDI to work Omar Ali Bin Bechr Est. at Riyadh, Saudi Arabia.
EDI and OAB entered into an employment contract with Gran whereby the latter
will work as a computer specialist for OAB while EDI would process the papers
of Gran necessary for his employment at Saudi Arabia. Gran started working for
OAB. However, Gran was terminated by OAB on the ground of insubordination
against the management of OAB. Gran was given his final pay and was sent
back to the Philippines. Gran filed a complaint for underpayment and illegal
dismissal against EDI before the LA. The LA dismissed the complaint. On appeal
with the NLRC, the NLRC reversed the decision of the LA and held that there
was underpayment and illegal dismissal thus warranting the award of
backwages in favor of Gran. The CA affirmed the decision of the NLRC. Hence
this petition.
Issue:
Whether EDI is guilty of underpayment of wages and illegal dismissal
Ruling:
Yes. EDI claims that Gran was validly dismissed for just cause, due to
incompetence and insubordination or disobedience. To prove its allegations, EDI
submitted two letters as evidence. The first is the July 9, 1994 termination
letter, addressed to Gran, from Andrea E. Nicolaou, Managing Director of OAB.
The second is an unsigned April 11, 1995 letter from OAB addressed to EDI and
ESI, which outlined the reasons why OAB had terminated Gran’s employment.
Petitioner claims that Gran was incompetent for the Computer Specialist
position because he had insufficient knowledge in programming and zero
knowledge of the ACAD system. Petitioner also claims that Gran was justifiably
dismissed due to insubordination or disobedience because he continually failed
to submit the required Daily Activity Reports. However, other than the
abovementioned letters, no other evidence was presented to show how and
why Gran was considered incompetent, insubordinate, or disobedient.
EDI failed to overcome the burden of proving that Gran was validly dismissed.
An allegation of incompetence should have a factual foundation. Incompetence
may be shown by weighing it against a standard, benchmark, or criterion. EDI
failed to establish any such bases to show how petitioner found Gran
incompetent.
21
ROLANDO V. AROMIN v. NATIONAL LABOR RELATIONS COMMISSION,

BANK OF THE PHILIPPINE ISLANDS, XAVIER P. LOINAZ, President, and
EDMUNDO A. BARCELON, Senior Vice-President
G.R. No. 164824, April 30, 2008, Velasco, Jr., J.
Loss of confidence, as a ground for dismissal, is premised on the fact that the
employee concerned holds a position of responsibility or of trust and
confidence.
Facts:
Aromin worked for BPI for 26 years and he was the assistant vice-president
when he was terminated. He headed the BPI’s Real Property Management Unit
(RPMU) when the botched purchase by Limketkai of a trust asset held by BPI
happened. Revilla, authorized by the owner to sell the lot, informed BPI that he
has a buyer in Limketkai. The brothers Limketkai met with Aromin to negotiate
whether they can pay the purchase price on terms instead of in cash. Limketkai
tendered full payment a few days after but BPI refused to receive it. Limketkai,
in a bid to consummate the sale, filed a case against BPI. Asked to comment on
the material allegations of the said complaint, Aromin sent to the BPI Legal
Services Division a September 6, 1988 memorandum. He also received a
warning about belated submission of work assignments, tardiness, and
unexplained absences. In the course of the trial of the civil case filed by
Limketkai, specifically on December 3, 1990 hearing, Aromin testified to the
surprise of BPI’s legal counsel. A show-cause memorandum gave Aromin five
days to explain why he did so. It appears that Aromin’s testimony, apart from
being inimical to BPI’s interests, contradicted what he wrote in the September
6, 1988 memorandum. The RTC found the testimony of Aromin vital in
determining a "meeting-of-the-minds" regarding the sale of, and the price for,
the Pasig property. The RTC rendered judgment finding for Limketkai. BPI served
on Aromin a Notice of Termination, citing willful breach of trust and loss of
confidence, as grounds for termination. Aromin filed a complaint for illegal
dismissal.
Issue:
Whether Aromin was illegally dismissed
Ruling:
No. BPI had indeed a valid case for dismissal against Aromin on the ground of
loss of confidence. Being an AVP during the period material, Aromin falls under
the category of a managerial employee upon whom trust and confidence had
been reposed by the employing bank. Violating that trust and confidence is a
valid cause for dismissal under Art. 282 of the Labor Code. However, the
employer must clearly and convincingly establish the charges. Loss of
confidence, as a ground for termination, should not be (1) simulated; (2) used
as a subterfuge for causes which are improper, illegal, or unjustified; (3)
arbitrarily asserted; and (4) a mere afterthought to justify earlier action taken in
bad faith.
The position assumed and the answers given by Aromin when he testified
proved to be adverse to his employer’s interest. The acts committed, inclusive
of those done before he took the witness stand to testify falsely against the
22
interest of the employer, adversely reflected on his competence, loyalty, and

integrity. Said acts were sufficient for his employer to lose trust and in him.
BLUE ANGEL MANPOWER AND SECURITY SERVICES, INC. v. COURT OF

APPEALS, ROMEL CASTILLO, WILSON CIRIACO, GARY GARCES, AND
CHESTERFIELD MERCADER
To constitute resignation, it must be unconditional with the intent to operate as
such. There must be clear intention to relinquish the position. The filing of a
complaint for illegal dismissal is inconsistent with resignation.
Facts:
Blue Angel hired respondents as security guards and detailed them at the
National College of Business and Arts (NCBA). On April 20, 1999, respondents
filed a complaint for illegal deductions against Blue Angel and later on amended
it to be an action for illegal dismissal. The respondents allege that Blue Angel
deducted P100 from their salary as a cash bond. Upon being apprised of the
original complaint for illegal deductions, Blue Angel terminated their services. In
its defense, Blue Angel contended that the respondents committed
Insubordination, sleeping on duty, and absence without leave and when told
that they will be subjected to investigation, they pleaded that they be allowed
to resign instead. They tendered their pro-forma letters of resignation, followed
by handwritten resignation letters.
Issue:
Whether the pro-forma letters of resignation and handwritten resignation letters
are indication of respondents’ resignation
Ruling:
No. The undated, similarly worded resignation letters tended to show that the
guards were made to copy the pro-forma letters, in their own hand, to make
them appear more convincing that the guards had voluntarily resigned. The
element of voluntariness of the resignations is even more suspect considering
that the second set of resignation letters were pre-drafted, similarly worded,
and with blank spaces filled in with the effectivity dates of the resignations.
Respondents claimed being forced to sign and copy the pro-forma resignation
letters on pain that they would not get their remaining compensations. The fact
that respondents filed a complaint for illegal dismissal from employment
against Blue Angel completely negates the claim that private respondents
voluntarily resigned. Respondents actively pursued their illegal dismissal case
against Blue Angel such that they cannot be said to have voluntarily resigned
from their jobs.
GREGORIO V. TONGKO v. THE MANUFACTURERS LIFE INSURANCE CO.

(PHILS.), INC. and RENATO A. VERGEL DE DIOS
The burden of proving the validity of the termination of employment rests with
the employer. Failure to discharge this evidentiary burden would necessarily
mean that the dismissal was illegal. Unsubstantiated suspicions, accusations
and conclusions of employers do not provide for legal justification for
dismissing employees. In case of doubt, such cases should be resolved in favor
of labor, pursuant to the social justice policy of our labor laws and Constitution.
23
Facts:
Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic
corporation engaged in life insurance business. Gregorio Tongko entered into a
Career Agent’s Agreement with Manulife. As an agent, his duties consisted of
canvassing for applications for group policies and other products of the
company. Tongko was named unit manager in Manulife's Sales Agency
Organization, branch manager, and sales manager. Tongko failed to comply with
policies of Manulife; thus, his Agency Agreement was terminated.
Tongko filed a complaint with the NLRC against Manulife for illegal dismissal.
Tongko, in a bid to establish an employer-employee relationship, alleged that
De Dios gave him specific directives on how to manage his area of
responsibility and also claimed that his dismissal was without basis and that he
was not afforded due process. Manulife alleged that Tongko is not its employee,
and that it did not exercise control over him. Manulife claimed that the NLRC
has no jurisdiction over the case.
The labor arbiter decreed that no employer-employee relationship existed

between the parties. The NLRC reversed the labor arbiter’s decision finding
Tongko to have been illegally dismissed. The CA reversed the decision of the
NLRC finding the absence of an employer-employee relationship between the
parties and deeming the NLRC with no jurisdiction over the case.
Issues:
Whether Manulife is guilty of illegal dismissal
Ruling:
Yes. Manulife failed to cite evidence to support its claims. Manulife did not point
out the specific acts that Tongko was guilty of that would constitute gross and
habitual neglect of duty or disobedience. Manulife merely cited Tongko's alleged
"laggard performance," without substantiating such claim.
Manulife failed to overcome such burden of proof. Manulife even failed to

identify the specific acts by which Tongko's employment was terminated much
less support the same with substantial evidence. Mere conjectures cannot work
to deprive employees of their means of livelihood. Tongko was illegally
dismissed. Moreover, as to Manulife's failure to comply with the twin notice
rule, it reasons that Tongko not being its employee is not entitled to such
notices. Since we have ruled that Tongko is its employee, however, Manulife
clearly failed to afford Tongko said notices. Thus, on this ground too, Manulife is
guilty of illegal dismissal.
WESLEYAN UNIVERSITY PHILIPPINES v. NOWELLA REYES

An employer cannot be compelled to retain an employee who is guilty of acts
inimical to the interests of the employer.
Facts:
Wesleyan University dismissed its University Treasurer Nowella Reyes since it
allegedly lost trust and confidence owing to an interplay of the events such as:
(1) encashing a check payable to the University Treasurer in the amount 300K;
(2) encashing crossed checks payable to the University Treasurer, when the
24
intention of management in this regard was to merely transfer funds from one
of petitioner’s accounts to another in the same bank; and (3) spurious duplicate
checks bearing her signature were encashed causing damage to petitioner.
Respondent post-haste filed a complaint for illegal dismissal. Labor Arbiter ruled
in her favor. However, this was reversed by NLRC. On appeal, CA reinstated the
Decision of the Labor Arbiter. Hence, this Petition.
Issue:
Whether there was a valid dismissal on the ground of loss of trust and
confidence
Ruling:
Yes. Petitioner adequately proved respondent’s dismissal was for a just cause,
based on a willful breach of trust and founded on clearly established facts as
required by jurisprudence. The question of whether she was a managerial or
rank-and file employee does not matter in this case because not only is there
basis for believing that she breached the trust of her employer, her
involvement in the irregularities attending to petitioner’s finances has also been
proved.
A company has the right to dismiss its employees if only as a measure of self-
protection. This is truer in the case of supervisors or personnel occupying
positions of responsibility. Respondent was not an ordinary rank-and-file
employee as she was the Treasurer who was in charge of the coffers of the
University. It would be oppressive to require petitioner to retain in their
management an officer who has admitted to knowingly and intentionally
committing acts which jeopardized its finances and who was untrustworthy in
the handling and custody of University funds.
Authorized causes
RUBEN L. ANDRADA, BERNALDO V. DELOS SANTOS, JOVEN M.
PABUSTAN, FILAMER ALFONSO, VICENTE A. MANTALA, JR., HARVEY D.
CAYETANO, and JOVENCIO L. POBLETE v. NATIONAL LABOR RELATIONS
COMMISSION, SUBIC LEGEND RESORTS AND CASINO, INC., and/or MR.
HWA PUAY, MS. FLORDELIZA MARIA REYES RAYEL, and its CORPORATE
OFFICERS
G.R. No. 173231, December 28, 2007, Velasco, Jr., J.
Employment is not merely a lifestyle choice to stave off boredom. Employment
to the common man is his very life and blood, which must be protected against
concocted causes to legitimize an otherwise irregular termination of
employment. Imagined or undocumented business losses present the least
propitious scenario to justify retrenchment.
Facts:
Ruben Andrada, Jovencio Poblete, Filamer Alfonso, Harvey Cayetano, Vicente
Mantala, Jr., Bernaldo delos Santos, and Joven Pabustan were hired on various
dates as architects, draftsmen, operators, engineers, and surveyors in the Subic
Legend Resorts and Casino, Inc. (Legend) Project Development Division on
various projects. Legend sent notice to the DOLE of its intention to retrench and
25
terminate the employment of thirty-four (34) of its employees, which include

petitioners, in the Project Development Division. Legend explained that it would
be retrenching its employees on a last-in-first-out basis on the strength of the
updated status report of its Project Development Division.
Legend sent the 34 employees their respective notices of retrenchment, stating

the same reasons for their retrenchment. On the same day, the Labor and
Employment Center of the Subic Bay Metropolitan Authority advertised that
Legend was in need of employees for positions similar to those vacated by
petitioners.
Subsequently, 14 of the 34 retrenched employees filed before the Labor Arbiter

(LA) a complaint for illegal dismissal and money claims which ruled in their
favor. On appeal, the NLRC reversed the LA’s decision. Said employees filed a
petition for certiorari before the CA but it was dismissed on the ground that the
retrenched employees were validly dismissed from employment due to
redundancy and not retrenchment. It also held that the CA held that the NLRC
had sufficiently explained that it was not Legend but Gaehin International Inc.
(Gaehin) which asked for Subic Bay Metropolitan Authority’s help in recruiting
personnel. Hence, this petition was filed.
Issue:
Whether the petitioners were validly dismissed based on redundancy and not
on retrenchment
Ruling:
No. Retrenchment and redundancy are two different concepts; they are not
synonymous and therefore should not be used interchangeably. This Court
explained in detail the difference between the two concepts in Sebuguero v.
NLRC (G.R. No. 115394, September 27, 1995):
Redundancy exists where the services of an employee are in excess of what is

reasonably demanded by the actual requirements of the enterprise. A position
is redundant where it is superfluous, and superfluity of a position or positions
may be the outcome of a number of factors, such as over hiring of workers,
decreased volume of business, or dropping of a particular product line or
service activity previously manufactured or undertaken by the enterprise.
Retrenchment is used interchangeably with the term lay-off. It is the

termination of employment initiated by the employer through no fault of the
employees and without prejudice to the latter, resorted to by management
during periods of business recession, industrial depression, or seasonal
fluctuations, or during lulls occasioned by lack of orders, shortage of materials,
conversion of the plant for a new production program or the introduction of new
methods or more efficient machinery, or of automation. It is an act of the
employer of dismissing employees because of losses in the operation of a
business, lack of work, and considerable reduction on the volume of his
business, a right consistently recognized and affirmed by this Court.
26
Redundancy exists when the number of employees is in excess of what is

reasonably necessary to operate the business. The declaration of redundant
positions is a management prerogative. The determination that the employees
services are no longer sustainable and therefore properly terminable is an
exercise of business judgment by the employer. The wisdom or soundness of
this judgment is not subject to the discretionary review of the Labor Arbiter and
NLRC.
However, the pieces of evidence submitted by Legend are mere allegations and
conclusions not supported by other evidence. Legend did not even or explain
why it considered petitioners’ positions superfluous. The CA puts too much
weight on petitioners’ failure to refute Legend’s allegations contained in the
document it submitted. However, the employer bears the burden of proving the
cause or causes for termination. Its failure to do so would necessarily lead to a
judgment of illegal dismissal.
Substantial evidence is the question of evidence required to establish a fact in

cases before administrative and quasi-judicial bodies. It is that amount of
relevant evidence which a reasonable mind might accept as adequate to
support a conclusion.
The basis for retrenchment was not established by substantial evidence,

Legend failed to establish by the same quantum of proof the fact of
redundancy; hence, petitioners termination from employment was illegal.
ALFREDO A. MENDROS, JR. v. MITSUBISHI MOTORS PHILS.

CORPORATION (MMPC)
Decisional law teaches that the requirements for a valid retrenchment are: (1)
that the retrenchment is reasonably necessary and likely to prevent business
losses which, if already incurred, are not merely de minimis, but substantial,
serious, and real, or only if expected, are reasonably imminent as perceived
objectively and in good faith by the employer; (2) that the employer serves
written notice both to the employees concerned and the DOLE at least a month
before the intended date of retrenchment; (3) that the employer pays the
retrenched employee separation pay in an amount prescribed by the Code; (4)
that the employer exercises its prerogative to retrench in good faith; and (5)
that it uses fair and reasonable criteria in ascertaining who would be
retrenched or retained.
Facts:
Mitsubishi Motors Philippines Corporation (MMPC) hired Alfredo A. Mendros, Jr.
as regular body prepman, he was then promoted as an assembler major in the
company’s manufacturing division. Due to some economic problems, MMPC
sustained financial losses. MMPC implemented various cost-cutting measures,
such as but not limited to: cost reduction on the use office supplies and energy,
curtailment of representation and travel expenses, employment-hiring freeze,
separation of casuals and trainees, manpower services reduction, intermittent
plant shutdowns, and reduced work week for managerial and other monthly-
27
salaried personnel. Eventually MMPC instituted a series of retrenchment

program, one of those who were affected is Petitioner. The temporary lay-off
move was not enough to avert the losses; thus, petitioner and other personnel
received notices of their permanent lay-off. Alfredo filed a case for illegal
dismissal and damages.
Issues:
Whether Alfredo’s temporary lay-off and eventual retrenchment is legal and
valid.
Ruling: Yes. The right of management to retrench or to lay-off workers to meet
clear and continuing economic threats or during periods of economic recession
to prevent losses is recognized by Article 283 of the Labor Code. First, MMPC
suffered substantial losses in FY 1997 and continued to bleed in 1998. Second,
Alfredo cannot feign ignorance that MMPC was in dire straits in 1997 and 1998.
Neither can he impugn the bona fides of MMPC’s retrenchment strategy. Third,
Art. 283 uses the phrase "retrenchment to prevent losses." The phrase implies
that retrenchment may be effected even in the event only of expected losses.
The employer need not wait for substantial losses to materialize before
preventing such losses. MMPC was already financially hemorrhaging before
finally resorting to retrenchment. Fourth, MMPC had complied with the prior
written notice and separation pay requirements. Finally, as the Court sees it,
the merit rating system MMPC adopted as one of the criteria for selecting who
are to be eased out was fair and reasonable under the premises.
ROSALES v. NEW A.N.J.H. ENTERPRISES
G.R. No. 203355, August 18, 2015, Velasco, Jr., J.
Mere ownership by a single stockholder of all or nearly all of the capital stock of
the corporation does not by itself justify piercing the corporate veil.
Facts:
Due to alleged dwindling capital, respondent wrote the Director of the DOLE
Region IV-A a letter regarding New ANJH’s impending cessation of operations
and the sale of its assets to respondent NH Oil Mill Corporation (NH Oil), as well
as the termination of thirty-three (33) employees by reason thereof. Petitioners
received their respective separation pays, signed the corresponding check
vouchers and executed Quitclaims and Release before Labor Arbiter
Melchisedek A. Guan (LA Guan). LA Guan then declared the “labor dispute”
between New ANJH and petitioners as “dismissed with prejudice on ground of
settlement.”
Petitioners however, filed a complaint for illegal dismissal, with NLRC Regional
Arbitration alleging in their complaint that while New ANJH stopped its
operations, it resumed its operations as NH Oil using the same machineries and
with the same owners and management, thus, in circumvention of their security
of tenure. Petitioners advance the application of the doctrine because they
were terminated from employment on the pretext that there will be an
impending permanent closure of the business as a result of an intended sale of
its assets to an undisclosed corporation, and that there will be a change in the
management.
Issue:
28
Whether the cessation of the operations and subsequent sale of ANJH

constitutes illegal dismissal
Ruling:
Yes. The application of the doctrine of piercing the veil of corporate fiction is
frowned upon. However, the Court may disregard the corporate fiction if it is
used to such an extent that injustice, fraud, or crime is committed against
another. Subsequent events revealed that the buyer of the assets of their
employer was a corporation owned by the same employer and members of his
family. Furthermore, the business re-opened in less than a month under the
same management. Mere ownership by a single stockholder of all or nearly all
of the capital stock of the corporation does not by itself justify piercing the
corporate veil. Nonetheless, in this case, other circumstances show that the
buyer of the assets of petitioners’ employer is none other than his alter ego.
Twin-notice requirement
ALEX Q. NARANJO, DONNALYN DE GUZMAN, RONALD V. CRUZ,
ROSEMARIE P. PIMENTEL, and ROWENA B. BARDAJE v. BIOMEDICA
HEALTH CARE, INC. and CARINA "KAREN" J. MOTOL
G.R. No. 193789, September 19, 2012, Velasco, Jr., J.
The termination of employment must be based on a just or authorized cause of
dismissal and the dismissal must be effected after due notice and hearing.
Facts:
Petitioners are employees of Biomedica Health Care, Inc. with Carina J. Motol as
its president. On November 7, 2006, petitioners were all absent for various
personal reasons. Later that day, the petitioners went to Biomedica to report to
work after having received a text message requiring them to proceed to
Biomedica. However, they were refused entry and told to start looking for
another workplace. The next day, petitioners came to work but were not
allowed to enter the premises. Carina J. Motol ordered them to look for another
employer. On November 9, 2006 Biomedica sent notices to petitioners accusing
them of having conducted an illegal strike. On November 20, 2006 petitioners
filed a case for illegal dismissal with the NLRC. On November 29, 2006
Biomedica sent notices of termination to petitioners. In its decision, the Labor
Arbiter found that petitioners indeed conducted a mass leave akin to an illegal
strike. On appeal, the NLRC reversed the Labor Arbiter decision saying that
petitioners were indeed illegally dismissed. Biomedica then appealed the case
to the CA which reversed the NLRC decision and reinstated the Labor Arbiter’s
decision. The CA ruled that petitioners staged a mass leave, and such act
constitutes serious misconduct.
Issue:
Whether the petitioners were illegally dismissed
Ruling:
Yes. Petitioners were not afforded procedural due process because the notice
given to them did not specify the exact acts that the company considers as
constituting an illegal strike. A mere general description of the charges against
the employee by the employer is insufficient. Secondly, petitioners were not
afforded substantive due process. The dismissal of an employee must be based
on Just and Authorized causes as provided under the Labor Code. Serious
misconduct is one of the just causes of dismissal under the said code. However,
29
to justify the dismissal of an employee on the ground of serious misconduct, the

employer must first establish that the employee is guilty of improper conduct,
that the employee violated an existing and valid company rule or regulation, or
that the employee is guilty of a wrongdoing. Biomedica failed to establish that
petitioners indeed violated any company rules.
Hearing; meaning of opportunity to be heard
KING OF KINGS TRANSPORT, INC., et al. v. SANTIAGO MAMAC

G.R. No. 170083, June 29, 2007, Velasco, Jr., J.
The following should be considered in terminating an employee: (1) first written
notice to be served on the employees should contain the specific causes or
grounds for termination, (2) hearing or conference, and (3) written notice of
termination.
Facts:
Santiago Mamac was hired as bus conductor of Don Mariano Transit Corporation
(DMTC). Most DMTC employees were transferred to KKTI and were not able to
participate in the certification election in DMTC. Mamac was required to
accomplish a "Conductor's Trip Report" which indicates the ticket opening and
closing for that day of duty and to submit it to the company after each trip for
auditing. An "Irregularity Report" against the employee is issued once
irregularity is discovered and the employee is asked to explain the incident.
Upon audit of Mamac’s report, KKTI discovered that he declared some sold
tickets as returned tickets causing KKTI to lose income. Although no irregularity
report was made, KKTI asked Mamac to explain the discrepancy as part of its
procedure. Mamac said that it was unintentional and that during that day's trip,
the windshield of the bus assigned to them was smashed and they had to cut
short the trip. Hence, he got confused in making the report. Later, he received a
letter terminating his employment alleging that the irregularity which occurred
was an act of fraud against the company and also cited other offenses he
allegedly made. Mamac filed a complaint but was dismissed by the labor
arbiter. Upon appeal to the NLRC, it ruled that KKTI shall indemnify Mamac for
failure to comply with due process. Mamac filed a Petition for Certiorari before
the CA which affirmed the NLRC but modified its decision by awarding full
backwages and further ruled that there was just cause for his dismissal.
Issue:
Whether KKTI complied with the due process requirements in terminating
Mamac
Ruling:
No. The following should be considered in terminating the services of
employees:
(1) The first written notice to be served on the employees should contain the
specific causes or grounds for termination against them, and a directive that
the employees are given the opportunity to submit their written explanation
within a reasonable period. "Reasonable opportunity" under the Omnibus Rules
means every kind of assistance that management must accord to the
employees to enable them to prepare adequately for their defense. This should
be construed as a period of at least five (5) calendar days from receipt of the
notice to give the employees an opportunity to study the accusation against
30
them, consult a union official or lawyer, gather data and evidence, and decide
on the defenses they will raise against the complaint. Moreover, in order to
enable the employees to intelligently prepare their explanation and defenses,
the notice should contain a detailed narration of the facts and circumstances
that will serve as basis for the charge against the employees. A general
description of the charge will not suffice. Lastly, the notice should specifically
mention which company rules, if any, are violated and/or which among the
grounds under Art. 282 is being charged against the employees.
(2) After serving the first notice, the employers should schedule and conduct a
hearing or conference wherein the employees will be given the opportunity
to: (1) explain and clarify their defenses to the charge against them; (2) present
evidence in support of their defenses; and (3) rebut the evidence presented
against them by the management. During the hearing or conference, the
employees are given the chance to defend themselves personally, with the
assistance of a representative or counsel of their choice. Moreover, this
conference or hearing could be used by the parties as an opportunity to come
to an amicable settlement.
(3) After determining that termination of employment is justified, the employers

shall serve the employees a written notice of termination indicating that:
(1) all circumstances involving the charge against the employees have been
considered; and (2) grounds have been established to justify the severance of
their employment.
After a finding that petitioners failed to comply with the due process
requirements, the CA awarded full backwages in favor of respondent in
accordance with the doctrine in Serrano v. NLRC (G.R. No. 117040, January 27,
2000). However, the doctrine in Serrano had already been abandoned in
Agabon v. NLRC (G.R. No. 158693, November 17, 2004) by ruling that if the
dismissal is done without due process, the employer should indemnify the
employee with nominal damages. Thus, for non-compliance with the due
process requirements in the termination of respondent's employment,
petitioner KKTI is sanctioned to pay respondent the amount of PhP30,000 as
damages.
MARILOU S. GENUINO v. NATIONAL LABOR RELATIONS COMMISSION,

CITIBANK, N.A., WILLIAM FERGUSON, and AZIZ RAJKOTWALA
G.R. Nos. 142732-33, December 4, 2007, Velasco, Jr., J.
In dismissing an employee, the Labor Code mandates that the requirement of
twin-notices must be met. The first written notice to be served on the
employees should contain the specific causes or grounds for termination
against them, and a directive that the employees are given the opportunity to
submit their written explanation within a reasonable period. The notice should
specifically mention which company rules, if any, are violated and/or which
among the grounds under Art. 282 is being charged against the employees.
After serving the first notice, the employers should schedule and conduct a
hearing or conference wherein the employees will be given the opportunity
to: (1) explain and clarify their defenses to the charge against them; (2)
31
present evidence in support of their defenses; and (3) rebut the evidence
presented against them by the management. After determining that
termination of employment is justified, the employers shall serve the
employees a written notice of termination indicating that: (1) all
circumstances involving the charge against the employees have been
considered; and (2) grounds have been established to justify the severance of
their employment.
Facts:
Marilou Genuino, an employee of Citibank, received a letter from the latter
charging her with "knowledge and/or involvement" in transactions "which were
irregular or even fraudulent." In the same letter, Genuino was informed that she
was under preventive suspension. Genuino in turn wrote Citibank asking for a
bill of particulars regarding the charges against her. Citibank replied that it had
no intention of converting the case into a full blown trial, as such, Citibank
informed Genuino that what it can only give her is an opportunity to explain her
side on the issue of whether she violated the conflict of interest rule, either in
writing or in person during the administrative investigation. Genuino failed to
submit a written explanation. Genuino likewise failed to appear during the
administrative investigation. Consequently, Genuino's employment was
terminated by Citibank on grounds of (1) serious misconduct, (2) willful breach
of the trust reposed upon her by the bank, and (3) commission of a crime
against the bank.
Issue:
Whether the dismissal of Genuino was made in accordance with procedural due
process
Ruling:
No. The letters dated August 23, September 13 and 20, 1993 sent by Citibank
did not identify the particular acts or omissions allegedly committed by
Genuino. The August 23, 1993 letter charged Genuino with having "some
knowledge and/or involvement" in some transactions "which have the
appearance of being irregular at the least and may even be fraudulent." The
September 13, 1993 letter, on the other hand, mentioned "irregular
transactions" involving Global Pacific and/or Citibank and 12 bank clients.
Lastly, the September 20, 1993 letter stated that Genuino and "Mr. Dante
Santos, using the facilities of their family corporations appear to have
participated in the diversion of bank clients' funds from Citibank to, and
investment thereof in, other companies and that they made money in the
process, in violation of the conflict of law rule [sic]." The extent of Genuino's
alleged knowledge and participation in the diversion of bank's clients' funds,
manner of diversion, and amounts involved; the acts attributed to Genuino that
conflicted with the bank's interests; and the circumstances surrounding the
alleged irregular transactions, were not specified in the notices/letters. While
the bank gave Genuino an opportunity to deny the truth of the allegations in
writing and participate in the administrative investigation, the fact remains that
the charges were too general to enable Genuino to intelligently and adequately
prepare her defense.
While we hold that Citibank failed to observe procedural due process, we

nevertheless find Genuino's dismissal justified. Art. 282(c) of the Labor Code
32
provides that an employer may terminate an employment for fraud or willful

breach by the employee of the trust reposed in him/her by his/her employer or
duly authorized representative. In order to constitute as just cause for
dismissal, loss of confidence should relate to acts inimical to the interests of the
employer. Also, the act complained of should have arisen from the performance
of the employee's duties. For loss of trust and confidence to be a valid ground
for an employee's dismissal, it must be substantial and not arbitrary, and must
be founded on clearly established facts sufficient to warrant the employee's
separation from work.
As Assistant Vice-President of Citibank's Treasury Department, Genuino was

tasked to solicit investments, and peso and dollar deposits for, and keep them
in Citibank; and to sell and/or push for the sale of Citibank's financial products,
such as the MBS, for the account and benefit of Citibank. She held a position of
trust and confidence. There is no way she could deny any knowledge of the
bank's policies nor her understanding of these policies as reflected in the
survey done by the bank. She could not likewise feign ignorance of the
businesses of Citibank, and of Global and Torrance. Assuming that Citibank did
not engage in the same securities dealt with by Global and Torrance;
nevertheless, it is to the interests of Citibank to retain its clients and continue
investing in Citibank. Curiously, Genuino did not even dissuade the depositors
from withdrawing their monies from Citibank, and was even instrumental in the
transfers of monies from Citibank to a competing bank through Global and
Torrance, the corporations under Genuino's control.
R.B. MICHAEL PRESS and ANNALENE REYES ESCOBIA v. NICASIO C.

GALIT
“Reasonable opportunity” under the Omnibus Rules means every kind of
assistance that management must accord to the employees to enable them to
prepare adequately for their defense. This should be construed as a period of at
least five (5) calendar days from receipt of the notice to give the employees an
opportunity to study the accusation against them, consult a union official or
lawyer, gather data and evidence, and decide on the defenses they will raise
against the complaint.
Facts:
R.B. Michael Press hired Nicasio Galit as its offset machine operator. Due to the
latter’s tardiness, absences, discourtesy to his superiors and unwillingness to
render overtime work. Michael Press sent an office memorandum warning Galit
of his dismissal from work and informing him that a hearing shall be held in the
afternoon of the same day to determine the status of his employment.
Consequently, Galit was dismissed.
Issue:
Whether Michael Press complied with the two-notice rule
Ruling:
No. Under the twin notice requirement, the employees must be given two (2)
notices before his employment could be terminated: (1) a first notice to apprise
the employees of their fault, and (2) a second notice to communicate to the
employees that their employment is being terminated. Not to be taken lightly of
33
course is the hearing or opportunity for the employee to defend himself

personally or by counsel of his choice.
The undue haste in effecting respondent’s termination shows that the

termination process was a mere simulation that the required notices were
given, a hearing was even scheduled and held, but respondent was not really
given a real opportunity to defend himself; and it seems that petitioners had
already decided to dismiss respondent from service, even before the first notice
had been given.
Anent the written notice of charges and hearing, there was merely a general
description of the claimed offenses of respondent. The hearing was immediately
set in the afternoon of February 23, 1999the day respondent received the first
notice. Therefore, he was not given any opportunity at all to consult a union
official or lawyer, and, worse, to prepare for his defense.
Regarding the February 23, 1999 afternoon hearing, respondent, without any
lawyer or friend to counsel him, was not given any chance at all to adduce
evidence in his defense. At most, he was asked if he did not agree to render
overtime work on February 22, 1999 and if he was late for work for 197 days.
He was never given any real opportunity to justify his inability to perform work
on those days. This is the only explanation why petitioners assert that
respondent admitted all the charges.
In the February 24, 1999 notice of dismissal, petitioners simply justified

respondent’s dismissal by citing his admission of the offenses charged. It did
not specify the details surrounding the offenses and the specific company rule
or Labor Code provision upon which the dismissal was grounded. In view of the
infirmities in the proceedings, we conclude that termination of respondent was
railroaded in serious breach of his right to due process.
ARMANDO ALILING v. JOSE B. FELICIANO, MANUEL F. SAN MATEO,

JOSEPH R. LARIOSA, AND WIDE WIDE WORLD EXPRESS CORPORATION
To justify the dismissal of an employee, the employer must prove that the
dismissal was for just cause and that the employee was afforded due process
prior to dismissal. The employer has the onus of proving with clear, accurate,
consistent, and convincing evidence the validity of the dismissal.
Facts:
Armando Aliling and Wide Wide World Express Corporation (WWWEC) entered
into an employment contract. Under the terms of the contract, Aliling’s regular
status shall be determined on the basis of his performance. Barely a month
after, Manuel F. San Mateo e-mailed Aliling to express dissatisfaction with the
latter’s work performance. Joseph R. Lariosa sent a letter to Aliling to report to
the Human Resources Department and explain his absence from September 20
to 25. Aliling responded two days after and denied being absent on such days,
he presented his timesheet to prove his claim. Aliling’s explanation came with a
query regarding the withholding of his salary from September 11 to 25. Later
on, in a letter dated September 27, Aliling expressed his resignation. However,
34
WWWEC failed to take action so Aliling requested for reinstatement. Lariosa

replied on October 1 informing Aliling that his case is still in the process of
being evaluated. Lariosa again wrote Aliling to advise him of the termination of
his services due to non-satisfactory performance during his probation period.
Aliling filed a case for illegal dismissal. The Labor Aribiter, NLRC, and CA ruled
that Aliling was illegally dismissed because he was not informed, at the time of
his engagement, of the reasonable standards under which he will qualify as a
regular employee.
Issue:
Whether Armando Aliling was illegally dismissed
Ruling:
Yes. Lariosa’s letter betrayed management’s intention to dismiss the petitioner
for alleged unauthorized absences. Aliling was in fact made to explain and he
did so satisfactorily. But WWWEC nonetheless proceeded with its plan to dismiss
the petitioner for non-satisfactory performance, although the corresponding
termination letter did not even specifically state Aliling’s non-satisfactory
performance, or that Aliling’s termination was by reason of his failure to achieve
his set quota. In order for the quota imposed to be considered a valid
productivity standard and thereby validate a dismissal, management’s
prerogative of fixing the quota must be exercised in good faith for the
advancement of its interest. The duty to prove good faith, however, rests with
WWWEC as part of its burden to show that the dismissal was for a just cause.
WWWEC must show that such quota was imposed in good faith. This WWWEC
failed to do.
WWWEC also failed to comply with procedural due process. The adverted memo
dated September 20, 2004 of WWWEC supposedly informing Aliling of the
likelihood of his termination and directing him to account for his failure to meet
the expected job performance would have had constituted the charge sheet,
sufficient to answer for the first notice requirement, but for the fact that there is
no proof such letter had been sent to and received by him.
Reinstatement
ALEXANDER B. BANARES v. TABACO WOMEN'S TRANSPORT SERVICE
COOPERATIVE (TAWTRASCO), represented by DIR. RENOL BARCEBAL,
ET AL.
Reinstatement presupposes that there shall be no demotion in rank and/or
diminution of salary, benefits and other privileges. If the position previously
occupied no longer exists, the restoration shall be to a substantially equivalent
position in terms of salary, benefits and other privileges.
Facts:
Banares was the general manager of Tabaco Women's Transport Service
Cooperative (TAWTRASCO) until its management terminated his services.
Banares filed a complaint for illegal dismissal and payment of monetary claims
before the Labor Arbiter. Judgment is rendered declaring Banares to have been
illegally dismissed. Eventually, the parties entered into a Compromise
Agreement, in which petitioner waived a portion of his monetary claim,
specifically his backwages. In turn, TAWTRASCO reinstated the petitioner.
35
However, barely a week into his new assignment in Virac terminal, Banares has
not reported for work. Banares in a letter-reply to management, stated that the
reason for not reporting for work is that the reinstatement effected is an
artificial kind of return-to-work order. Banares filed a complaint against
TAWTRASCO for non-payment of salaries and withholding of privileges before
the LA which was granted. TAWTRASCO appealed to the NLRC which dismissed
the appeal. The CA on the other hand found TAWTRASCO to have fully
reinstated Banares to his former post and that he abandoned his work when he
stopped reporting to his Virac terminal assignment.
Issue:
1. Whether there is a genuine reinstatement of petitioner to his former position
2. Whether petitioner’s refusal to report to work at the Virac terminal

constitutes abandonment
Ruling:
1. No. Management has a prerogative to transfer an employee from one office
or station to another within the business establishment, as long as there is no
resulting demotion or diminution of salary and other benefits and/or the action
is not motivated by consideration less than fair or effected as a punishment or
to get back at the reinstated employee. In this case, the "reinstatement" of
Banares as general manager of TAWTRASCO, was not a real, bona fide
reinstatement in the context of the Labor Code and pertinent decisional law.
First, TAWTRASCO directed Banares to report to the Virac terminal with duties
and responsibilities not befitting a general manager of a transport company.
Second, TAWTRASCO did not even provide him with a formal office space.
2. No. For abandonment to exist, it is essential (1) that the employee must have
failed to report for work or must have been absent without valid or justifiable
reason; and (2) that there must have been a clear intention to sever the
employer-employee relationship manifested by some overt acts. As reflected
above, the reinstatement order has not been faithfully complied with. And
varied but justifiable reasons obtain which made Banares’s work at the Virac
terminal untenable. To reiterate, there was a lack of a viable office: no proper
office space, no office furniture and equipment, no office supplies. This is not to
mention Banares’s board and lodging privilege which he was deprived of
without explanation.
Preventive Suspension
SMART COMMUNICATIONS, INC, MR. NAPOLEON L. NAZARENO, AND
MR. RICKY P. ISLA v. JOSE LENI Z. SOLIDUM and JOSE LENI Z. SOLIDUM
v. SMART COMMUNICATIONS, INC., MR. NAPOLEON L. NAZARENO, AND
MR. RICKY P. ISLA
G.R. Nos. 197836 and 197763, December 07, 2015, Velasco, Jr., J.
Preventive suspension is a disciplinary measure for the protection of the
company's property pending investigation of any alleged malfeasance or
misfeasance committed by the employee.
FACTS:
36
Smart hired Solidum as Department Head of Smart Prepaid/Buddy Activations.

Solidum later on received a Notice to Explain charging him with acts of
dishonesty and breach of trust and confidence stating that he violated various
company policies. He was charged with several offenses and was placed in
preventive suspension for 30 days. In a letter, Soldium denied the charges
against him. The continued audit investigation found that he was guilty for
more offenses and thus, he was placed under preventive suspension again for
10 days. He was given an opportunity to present his stand as Smart sent the
documents he requested so he can prepare an explanation but then he refused
to accept them, thus, he was placed under an additional 10 days of preventive
suspension. The company wished to remove him for breach and trust and
confidence. A Notice of Termination was served on him. Solidum filed a
complaint for illegal suspension and dismissal with money claims before the
NLRC claiming his suspension and termination were without just cause and due
process. The labor arbiter declared that the extended period of suspension
without pay was illegal and that Solidum was unjustly dismissed from work
without observance of procedural due process. He stated that the ground for his
dismissal is untenable as Solidum is not a managerial employee. Smart
appealed to the NLRC but it was denied for having been filed out of time. Smart,
in its MR, claimed that they filed it on time as they received the Labor Arbiter’s
decision at a later date. The NLRC granted the motion. The NLRC reversed the
labor arbiter’s decision which the CA affirmed.
ISSUE:
(1) Whether Solidum’s 2nd preventive suspesion is valid
(2) Whether Solidum is a managerial employee and can be validly dismissed for
loss of trust and confidence.
RULING:
(1) Yes. The 2nd preventive suspension is valid
While the Omnibus Rules limits the period of preventive suspension to thirty
(30) days, such time frame pertains only to one offense by the employee.
However, if the employee is charged with another offense, then the employer is
entitled to impose a preventive suspension not to exceed 30 days specifically
for the new infraction. A fresh preventive suspension can be imposed for a
separate or distinct offense. An employer is well within its rights to preventively
suspend an employee for other wrongdoings that may be later discovered while
the first investigation is ongoing.
(2) Yes. Solidum is a managerial employee.
Solidum denies that he is a managerial employee by stating that just because
he directed subordinates and had a large salary, it does not mean that he was a
managerial employee. Solidum denies having the power to lay down and
execute management policies.
However, Solidum does not deny having "the authority to devise, implement
and control strategic and operational policies of the Department he was then
heading." This is clearly the authority to lay down and execute management
policies. The CA affirmed these findings. Thus, the NLRC and the CA correctly
found that Solidum was a managerial employee. As such, he may be validly
dismissed for loss of trust and confidence.
37
Constructive Dismissal
EXOCET SECURITY AND ALLIED SERVICES CORPORATION AND/OR MA.
TERESA MARCELO v. ARMANDO D. SERRANO G.R. No. 198538,
September 29, 2014, Velasco Jr., J.
Temporary “off-detail” or the period of time security guards are made to wait
until they are transferred or assigned to a new post or client does not
constitute constructive dismissal, so long as such status does not exceed six
months.
Facts:
Exocet is engaged in providing security personnel to its clients. By virtue of its
contract with JG Summit, Exocet assigned Armando Serrano as close-in security
for various officers. 11 years after, Serrano was relieved by JG Summit. For
more than six months after he reported back to Exocet, Serrano was without
any re-assignment. Serrano then filed a complaint for illegal dismissal against
Exocet with the NLRC.
The Labor Arbiter found that Serrano, while not actually dismissed, was placed
on a floating status for more than six months and so, was deemed
constructively dismissed. Acting on Exocet’s motion for reconsideration, the
NLRC deviated, finding that Serrano’s termination was due to his own fault and
failure to accept a re-assignment. The NLRC removed the award for backwages
but proceeded to affirm in toto the decision of the Labor Arbiter. The CA
however, found Serrano to have been constructively dismissed.
Issue:
Whether Serrano was constructively dismissed
Ruling:
No. The floating status situation was considered by this Court as a form of
temporary retrenchment or lay-off. It is that period when security guards are in
between assignments or when they are made to wait after being relieved from
a previous post until they are transferred to a new one.
The Court has applied Article 292 of the Labor Code by analogy to set the
period of temporary lay-off to a maximum of six months. Consequently, the
DOLE issued DO 14-01, providing in Section 6.5 in relation to Sec. 9.3, that the
lack of service assignment for a continuous period of six months is an
authorized cause for the termination of the employee, who is then entitled to a
separation pay equivalent to half month pay for every year of service. The
Employer shall still serve a written notice on Serrano and the DOLE one month
before the intended date of termination. However, Serrano’s lack of assignment
for more than six months cannot be attributed to Exocet because the latter had
already offered Serrano a position in the general security service since there
were no available clients requiring positions for VIP security. It was only Serrano
who declined the position because it was not the post that suited his
preference.
Certification Election
S.S. VENTURES INTERNATIONAL, INC. v. S.S. VENTURES LABOR UNION
AND DIRECTOR HANS LEO CACDAC, IN HIS CAPACITY AS DIRECTOR OF
THE BUREAU OF LABOR RELATIONS
38

To decertify a union, it is not enough to show that the union includes ineligible
employees in its membership. It must also be shown that there was
misrepresentation, false statement, or fraud in connection with the application
for registration and the supporting documents, such as the adoption or
ratification of the constitution and by-laws or amendments thereto and the
minutes of ratification of the constitution or by-laws, among other documents.
Facts:
On March 21, 2000, S.S. Ventures Labor Union (Union) filed a petition for
certification election in behalf of the rank-and-file employees of S.S. Ventures
with the DOLE. Of the 542 signatures, 82 of which belong to terminated SS
Ventures employees on the basic documents supporting the petition. The
certification election was successful and the Union obtained a Certificate of
Registration. On August 21, 2000, SS Ventures sought to cancel the Union’s
Certificate of Registration alleging that the 82 signatures belonging to
terminated employees were obtained through fraud, and misrepresentation.
Issue:
Whether the Union’s Certificate of Registration must be cancelled
Ruling:
No. According to Art. 239(a) of the Labor Code, the grounds for cancellation of
Certificate of Registration of a Union is the commission of Fraud and
Misrepresentation in connection with the adoption or ratification of the Union’s
constitution and like documents. After a labor organization has filed the
necessary registration documents, it becomes mandatory for the Bureau of
Labor Relations to check if the requirements under Art. 234 of the Labor Code
have been complied with. The issuance to the Union of Certificate of
Registration necessarily implies that its application for registration and the
supporting documents thereof are prima facie free from any vitiating
irregularities.
EAGLE RIDGE GOLF & COUNTRY CLUB v. COURT OF APPEALS and EAGLE
RIDGE EMPLOYEES UNION (EREU) G.R. No. 178989, March 18, 2010,
Velasco, Jr., J.
39
Any seeming infirmity in the application and admission of union membership,

most especially in cases of independent labor unions, must be viewed in favor
of valid membership.
Facts:
Eagle Ridge Employees Union (EREU) filed a petition for certification election.
The employer opposed the petition on the ground of misrepresentation and
fraud in connection with the adoption of its constitution and the numerical
composition of the union.
The employer alleges that EREU declared having 30 members in the application
when the minutes only show 26 members. It also alleged that one signature in
the ratified constitution was forged. The employer further contended that five
employees already withdrew from the union. EREU, on the other hand, asserts
bona fide compliance with the registration requirements.
Issue:
Whether there was fraud in the application of the union
Ruling:
No. The members of the EREU totaled 30 employees when it applied on
December 19, 2005 for registration. The Union complied with the mandatory
minimum 20% membership requirement under Art. 234(c). The Union has
sufficiently explained the discrepancy between the number of those who
attended the organizational meeting showing 26 employees and the list of
union members showing 30. The difference is due to the additional four
members admitted two days after the organizational meeting as attested to by
their duly accomplished Union Membership forms. Consequently, the total
number of union members, as of December 8, 2005, was 30, which was
truthfully indicated in its application for registration on December 19, 2005.
As aptly found by the BLR Director, the Union already had 30 members when it
applied for registration, for the admission of new members is neither prohibited
by law nor was it concealed in its application for registration. Eagle Ridge’s
contention is flawed when it equated the requirements under Art. 234(b) and
(c) of the Labor Code. Par. (b) clearly required the submission of the minutes of
the organizational meetings and the list of workers who participated in the
meetings, while par. (c) merely required the list of names of all the union
members comprising at least 20% of the bargaining unit. The fact that EREU
had 30 members when it applied for registration on December 19, 2005 while
only 26 actually participated in the organizational meeting is borne by the
records.
The right of employees to self-organization and membership in a union must

not be trammeled by undue difficulties. When the Union said that the four
employee-applicants had been admitted as union members, it is enough to
establish the fact of admission of the four that they had duly signified such
desire by accomplishing the membership form. The fact that the Union owing to
its scant membership, had not yet fully organized its different committees
evidently shows the direct and valid acceptance of the four employee
applicants rather than deter their admission as erroneously asserted by Eagle
Ridge.
Union Security Clauses
40
ALABANG COUNTRY CLUB, INC. v. NATIONAL LABOR RELATIONS

COMMISSION, ALABANG COUNTRY CLUB INDEPENDENT EMPLOYEES
UNION, CHRISTOPHER PIZARRO, MICHAEL BRAZA, and NOLASCO
CASTUERAS
G.R. No. 170287, February 14, 2008, J. Velasco, Jr.
In terminating the employment of an employee by enforcing the union security
clause, the employer needs only to determine and prove that: (1) the union
security clause is applicable; (2) the union is requesting for the enforcement of
the union security provision in the CBA; and (3) there is sufficient evidence to
support the union’s decision to expel the employee from the union. These
requisites constitute just cause for terminating an employee based on the
CBA’s union security provision.
Facts:
Pizarro, Braza and Castueras were officers of Alabang Country Club Union. They
were expelled from the union for alleged malversation of union funds. The union
invoked the Security Clause of the CBA which provided for a maintenance of
membership shop, and demanded that the Club dismiss private respondents.
The Club required the three respondents to show cause in writing, and called
private respondents for an informal conference inquiring about the charges
against them. Nonetheless, after weighing the verbal and written explanations,
the Club dismissed private respondents. Private respondents challenged their
dismissal in an illegal dismissal complaint.
Issue:
Whether respondents were illegally dismissed
Ruling:
No The three respondents were expelled from the after due investigation for
malversation of Union funds. The Union properly requested the Club to
terminate respondents. In compliance with the Union’s request, the Club
reviewed the documents submitted by the Union, requested said respondents
to submit written explanations, and afforded them reasonable opportunity to
present their side. After it had determined that there was sufficient evidence,
the Club dismissed them from their employment.
Unfair Labor Practice of Employers

UNIVERSITY OF SANTO TOMAS FACULTY UNION v. UNIVERSITY OF
SANTO TOMAS, REV. FR. ROLANDO DE LA ROSA, REV. FR. RODELIO
ALIGAN, DOMINGO LEGASPI, and MERCEDES HINAYON
Whether the employee or employer alleges that the other party committed ULP,
it is the burden of the alleging party to prove such allegation with substantial
evidence. Such principle finds justification in the fact that ULP is punishable
with both civil and/or criminal sanctions.
Facts:
Two groups were claiming to be the University of Santo Tomas Faculty Union
(USTFU): the Gamilla Group and Mariño Group. The latter is led by Atty. Eduardo
J. Mariño, Jr., the incumbent president of the union while the former is led by Gil
Gamilla who was elected as its president during a convocation held on October
4, 1996. The Mariño Group filed a complaint for ULP against the UST with the
Arbitration Branch of the NLRC. It also filed a complaint with the Office of the
41
Med-Arbiter of the DOLE praying for the nullification of the election of the
Gamilla Group as officers of the USTFU. The said election was declared null and
void. On the other hand, the Arbitration Branch of the NLRC issued a decision
dismissing the complaint on the ground that USTFU failed to establish with clear
and convincing evidence that indeed UST was guilty of ULP. The acts of UST
which USTFU complained of as ULP were the following: (1) allegedly calling for a
convocation of faculty members which turned out to be an election of officers
for the faculty union; (2) subsequently dealing with the Gamilla Group in
establishing a new CBA; and (3) the assistance to the Gamilla Group in
padlocking the USTFU office.
Issue:
Whether UST is guilty of unfair labor practice
Ruling:
No. Whether the employee or employer alleges that the other party committed
ULP, it is the burden of the alleging party to prove such allegation with
substantial evidence. Such principle finds justification in the fact that ULP is
punishable with both civil and/or criminal sanctions.
The Memorandum issued by the Secretary General of UST does not support a
claim that UST organized the convocation in connivance with the Gamilla
Group. In no way can the contents of this memorandum be interpreted to mean
that faculty members were required to attend the convocation. Respondents
could not have been expected to stop dealing with the Gamilla Group on the
mere accusation of the Mariño Group that the former was not validly elected
into office. As the CA ruled correctly, until the validity of the election of the
Gamilla Group is resolved with finality, respondents could not be faulted for
negotiating with said group. As to the padlocking of the USTFU office, the mere
presence of Justino Cardenas, Detachment Commander of the security agency
contracted by the UST, cannot be equated to a positive act of "aiding" the
Gamilla Group in securing the USTFU office.
Petitioner makes several allegations that UST committed ULP. The onus
probandi falls on the shoulders of petitioner to establish or substantiate such
claims by the requisite quantum of evidence. In labor cases as in other
administrative proceedings, substantial evidence or such relevant evidence as a
reasonable mind might accept as sufficient to support a conclusion is required.
In the petition at bar, petitioner miserably failed to adduce substantial evidence
as basis for the grant of relief.
Illegal Strike
TOYOTA MOTOR PHILS. CORP. WORKERS ASSOCIATION (TMPCWA) v.
NATIONAL LABOR RELATIONS COMMISSION, (NLRC-2ND DIVISION),
HON. COMMISSIONERS: VICTORINO CALAYCAY, ANGELITA GACUTAN,
and RAUL AQUINO, TOYOTA MOTOR PHILIPPINES CORPORATION,
TAKESHI FUKUDA, and DAVID GO
G.R. Nos. 158798-99, October 19, 2007, Velasco, Jr., J.
Noted authority on labor law, Ludwig Teller, lists six (6) categories of an illegal
strike, viz: (1) [when it] is contrary to a specific prohibition of law, such as strike
by employees performing governmental functions; or (2) [when it] violates a
42
specific requirement of law[, such as Article 263 of the Labor Code on the
requisites of a valid strike]; or (3) [when it] is declared for an unlawful purpose,
such as inducing the employer to commit an unfair labor practice against non-
union employees; or (4) [when it] employs unlawful means in the pursuit of its
objective, such as a widespread terrorism of non-strikers [for example,
prohibited acts under Art. 264(e) of the Labor Code]; or (5) [when it] is declared
in violation of an existing injunction[, such as injunction, prohibition, or order
issued by the DOLE Secretary and the NLRC under Art. 263 of the Labor Code];
or (6) [when it] is contrary to an existing agreement, such as a no-strike clause
or conclusive arbitration clause.
Facts:
TMPCWA filed a petition for certificate election among the rank-and-file
employees of Toyota Motor Phil. Corp (TMPC), herein private respondent with
the National Conciliation and Mediation Board (NCMB) to be considered its sole
and legitimate Union of TMPC. The NCMB decided in favor of TMPCWA. TMPC
appealed to the DOLE Secretary. During the pendency of the appeal, TMPCWA
submitted its CBA proposals to TMPC but the latter refused to negotiate on the
ground that there is a pending appeal as regards the legality of being the sole
and legitimate union of TMPCWA on behalf of TMPC’s employees. This prompted
TMPCWA to hold numerous strikes which resulted to huge losses on the part of
TMPC. This prompted TMPC to file a petition to declare the strike illegal against
TMPCWA with the NLRC praying that the erring Union members be dismissed
from employment.
The NLRC held for TMPC. On appeal with the CA, the CA affirmed the decision of
the NLRC. Now, TMPCWA assails the decision of the CA on the ground that the
strikes and protest undertaken by TMPCWA was an exercise of their
constitutional right to peaceably assemble and to petition the government for
redress of grievances. Hence this petition.
Issue:
Whether the strikes undertaken by TMPCWA were legal
Ruling:
No. The Union’s position is weakened by the lack of permit from the City of
Manila to hold rallies. Shrouded as demonstrations, they were in reality
temporary stoppages of work perpetrated through the concerted action of the
employees who deliberately failed to report for work on the excuse that they
will hold a rally at the BLR and DOLE offices. The purported reason for these
protest actions was to safeguard their rights against any abuse which the med-
arbiter may commit against their cause. However, the Union failed to advance
proof that the med-arbiter was biased against them. The acts of the med-
arbiter in the performance of his duties are presumed regular. The decision not
to work for two days was calculated to cripple the manufacturing arm of Toyota.
The ultimate goal of the Union is to coerce Toyota to acknowledge the Union as
the sole bargaining agent of the company.
The Union failed to comply with the following requirements: (1) a notice of
strike filed with the DOLE 30 days before the intended date of strike, or 15 days
in case of unfair labor practice; (2) strike vote approved by a majority of the
total union membership in the bargaining unit concerned obtained by secret
43
ballot in a meeting called for that purpose; and (3) notice given to the DOLE of
the results of the voting at least seven days before the intended strike. These
requirements are mandatory and the failure of a union to comply with them
renders the strike illegal. The intention of the law in requiring the strike notice
and the strike-vote report is to reasonably regulate the right to strike, which is
essential to the attainment of legitimate policy objectives embodied in the law.
NATIONAL UNION OF WORKERS IN THE HOTEL RESTAURANT AND

ALLIED INDUSTRIES (NUWHRAIN-APL-IUF) DUSIT HOTEL NIKKO
CHAPTER v. THE HONORABLE COURT OF APPEALS (Former Eighth
Division), THE NATIONAL LABOR RELATIONS COMMISSION (NLRC),
PHILIPPINE HOTELIERS INC., owner and operator of DUSIT HOTEL
NIKKO and/or CHIYUKI FUJIMOTO, and ESPERANZA V. ALVEZ
Public officials entrusted with specific jurisdictions enjoy great confidence from
this Court. The Secretary surely meant only to ensure industrial peace as she
assumed jurisdiction over the labor dispute. In this case, we are not ready to
substitute our own findings in the absence of a clear showing of grave abuse of
discretion on her part.
Facts:
National Union of Workers in the Hotel Restaurant and Allied Industries Dusit
Hotel Nikko Chapter (Union) is the certified bargaining agent of the regular
rank-and-file employees of Dusit Hotel Nikko (Hotel). The Union submitted its
CBA negotiation proposals to the Hotel but the parties failed to arrive at
mutually acceptable terms and conditions. Due to the bargaining deadlock and
unsuccessful conciliation, a strike vote was conducted by the Union on which it
decided that it would wage a strike.
The Union held a general assembly where some members sported closely
cropped hair or cleanly shaven heads. The next day more male Union members
came to work sporting the same hair style. The Hotel prevented these workers
from entering the premises claiming that they violated the Hotel's Grooming
Standards. In view of the Hotel's action, the Union staged a picket outside the
Hotel premises. For this reason the Hotel experienced a severe lack of
manpower which forced them to temporarily cease operations in three
restaurants.
The Hotel issued notices to Union members, preventively suspending them and
subsequently dismissing them for violation of the duty to bargain in good faith
and violation of the Hotel's Grooming Standards and commission of illegal acts
during the illegal strike. The Union filed with the NCMB a Notice of Strike on the
ground of unfair labor practice and union-busting.
The Secretary assumed jurisdiction over the labor dispute and certified the case
to the NLRC for compulsory arbitration. The NLRC held that the concerted action
was an illegal strike in which illegal acts were committed by the Union. The CA
affirmed the rulings of the NLRC.
Issue:
Whether the Union conducted an illegal strike
44
Ruling:
Yes. Art. 212(o) of the Labor Code defines a strike as "any temporary stoppage
of work by the concerted action of employees as a result of an industrial or
labor dispute."
In Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor

Relations Commission (G.R. Nos. 158798-99, October 19, 2007), we cited the
various categories of an illegal strike, to wit: (1) when it is contrary to a specific
prohibition of law, such as strike by employees performing governmental
functions; or (2) when it violates a specific requirement of law, [such as Article
263 of the Labor Code on the requisites of a valid strike]; or (3) when it is
declared for an unlawful purpose, such as inducing the employer to commit an
unfair labor practice against non-union employees; or (4) when it employs
unlawful means in the pursuit of its objective, such as a widespread terrorism of
non-strikers [for example, prohibited acts under Art. 264(e) of the Labor Code];
or (5) when it is declared in violation of an existing injunction, [such as
injunction, prohibition, or order issued by the DOLE Secretary and the NLRC
under Art. 263 of the Labor Code]; or (6) when it is contrary to an existing
agreement, such as a no-strike clause or conclusive arbitration clause.
With the foregoing parameters as guide and the following grounds as basis, we
hold that the Union is liable for conducting an illegal strike for the following
reasons:
First, the Union's violation of the Hotel's Grooming Standards was clearly a
deliberate and concerted action to undermine the authority of and to embarrass
the Hotel and was, therefore, not a protected action. The appearances of the
Hotel employees directly reflect the character and well-being of the Hotel,
being a five-star hotel that provides service to top-notch clients. In view of the
Union's collaborative effort to violate the Hotel's Grooming Standards, it
succeeded in forcing the Hotel to choose between allowing its inappropriately
hair styled employees to continue working, to the detriment of its reputation, or
to refuse them work, even if it had to cease operations in affected departments
or service units, which in either way would disrupt the operations of the Hotel.
The act of the Union was not merely an expression of their grievance or
displeasure but, indeed, a calibrated and calculated act designed to inflict
serious damage to the Hotel's finances or its reputation. The Union's concerted
violation of the Hotel's Grooming Standards which resulted in the temporary
cessation and disruption of the Hotel's operations is an unprotected act and
should be considered as an illegal strike.
Second, the Union's concerted action which disrupted the Hotel's operations
clearly violated the CBA's "No Strike, No Lockout" provision. The facts are clear
that the strike arose out of a bargaining deadlock in the CBA negotiations with
the Hotel. The concerted action is an economic strike upon which the afore-
quoted "no strike/work stoppage and lockout" prohibition is squarely applicable
and legally binding.
45
Third, the Union officers and members' concerted action to shave their heads
and crop their hair not only violated the Hotel's Grooming Standards but also
violated the Union's duty and responsibility to bargain in good faith.
Liability of ordinary workers

MADGALA MULTIPURPOSE & LIVELIHOOD COOPERATIVE v.
KILUSANG MANGGAGAWA NG LGS
G.R. No. 191138-39, October 19, 2011 Velasco, Jr., J.
For union officers, knowingly participating in an illegal strike is a valid ground
for termination of their employment. But for union members who participated
in a strike, their employment may be terminated only if they committed illegal
acts during the strike and there is substantial proof of their participation.
Facts:
Kilusang Manggagawa ng LGS, Magdala Multipurpose and Livelihood
Cooperative (KMLMS) is the union operating in Magdala Multipurpose &
Livelihood Cooperative and Sanlor Motors Corp. KMLMS filed a notice of strike
on March 5, 2002 and conducted its strike-vote on April 8, 2002. However,
KMLMS only acquired legal personality when its registration as an independent
labor organization was granted on April 9, 2002. Thereafter, on May 6, 2002,
KMLMS, now a legitimate labor organization (LLO) staged a strike where several
prohibited and illegal acts were committed by its participating members. On the
ground of lack of valid notice of strike, ineffective conduct of a strike-vote and
commission of prohibited and illegal acts, petitioners filed their Petition to
Declare the Strike of May 6, 2002 Illegal before the NLRC Regional Arbitration
Board (RAB) and prayed that the officers and members of respondent KMLMS
who participated in the illegal strike and who knowingly committed prohibited
and illegal activities, respectively, be declared to have lost or forfeited their
employment status.
LA, NLRC, and CA ruled in favor of petitioners but ruled that only 34 workers to
have lost their employment status.
Issue:
Whether the CA erred in refusing to declare as having lost their employment
status the rest of the union strikers who have participated in the illegal strike
and committed illegal acts
Ruling:
Yes. The May 6, 2002 strike was illegal, first, because when KMLMS filed the
notice of strike on March 5 or 14, 2002, it had not yet acquired legal personality
and, thus, could not legally represent the eventual union and its members. And
second, similarly when KMLMS conducted the strike-vote on April 8, 2002, there
was still no union to speak of, since KMLMS only acquired legal personality as
an independent LLO only on April 9, 2002 or the day after it conducted the
strike-vote.
In refusing to declare the other strikers as dismissed, the appellate court found
that not all of the photographs in evidence sufficiently show the strikers
committing illegal acts and that the identification of said strikers is questionable
considering that some were still identified even when their faces were
indiscernible from the photographs. We, however, cannot agree with the
46
appellate court’s view that there is no substantial proof of the identity of the
other 72 striking union members who committed prohibited and illegal
activities. The prohibited and illegal acts are undisputed. It is only the identity
of the striking union workers who committed said acts that is the crux of the
partial modification prayed for by petitioners.
The petitioners have substantially proved the identity of 72 other union

members who committed prohibited and illegal acts during the May 6, 2002
illegal strike, thus:
First, the photographs submitted by petitioners show the identities of the union
members who committed prohibited and illegal acts. Second, the identities of
these union members were substantially proved through the eyewitness of
petitioners who personally knew and recognized them. Thus, the identities of
these 72 other union members who participated in the strike and committed
prohibited and illegal acts are not only shown through the photographs, but are
also sufficiently supported, as earlier cited, by police blotter certifications, a
criminal complaint for grave coercion, and affidavits of several workers and a
proprietor. Absent any exculpating circumstance, they must all suffer the same
fate with the statutorily provided consequence of termination of employment.
Procedure and Jurisdiction

MARTICIO SEMBLANTE and DUBRICK PILAR v. COURT OF APPEALS, 19th
DIVISION, now SPECIAL FORMER 19th DIVISION, GALLERA DE
MANDAUE / SPOUSES VICENTE and MARIA LUISA LOOT
The posting of a bond is indispensable to the perfection of an appeal in cases
involving monetary awards from the Labor Arbiter’s decision. However, the rule
may be relaxed considering the substantial merits of the case and to prevent
miscarriage of justice.
Facts:
Marticio Semblante and Dubrick Pilar filed a complaint for illegal dismissal
against Spouses Vicente and Maria Luisa Loot. They alleged that they were
hired as the official masiador and sentenciador of the cockpit in 1993. However,
in 2003, they were denied entry. Respondents denied that petitioners were their
employees and alleged that they were associates of respondents’ independent
contractor, Tomas Vega. They claimed that petitioners have no regular working
time or day and that they are free to decide for themselves whether to report
for work or not. They were only issued identification cards to indicate that they
were free from the normal entrance fee. On June 16, 2004, the Labor Arbiter
ruled that petitioners were illegally dismissed. Respondents’ counsel received
the decision on September 14, 2004 and within the 10-day appeal period, he
filed the respondents’ appeal with the NLRC, but without posting a cash or
surety bond. It was only on October 11, 2004 that respondents filed an appeal
bond. NLRC initially denied but subsequently reversed itself on the postulate
that the appeal was meritorious and the filing of an appeal bond, although
belated, is a substantial compliance with the law. The CA ruled that an
exceptional circumstance obtains in the case at bench which warrants a
relaxation of the bond requirement as a condition for perfecting the appeal.
Issue:
47
Whether the CA correctly entertained the appeal although the appeal bond was
filed late
Ruling:
Yes. While respondents had failed to post their bond within the 10-day period, it
is evident that petitioners are NOT employees of respondents. Respondents
could never have dismissed petitioners, legally or illegally, since respondents
were without power or prerogative to do so because they are not petitioners’
employers. The rule on the posting of an appeal bond cannot defeat the
substantive rights of respondents to be free from an unwarranted burden of
answering for an illegal dismissal for which they were never responsible.
Appeal to NLRC
G.R. No. 203355, August 18, 2015, Velasco Jr., J.
The NLRC has wide discretion in determining the reasonableness of the bond
for purposes of perfecting an appeal.
Facts:
Petitioners filed a complaint for illegal dismissal, with NLRC Regional Arbitration
alleging in their complaint that while New ANJH stopped its operations, it
resumed its operations as NH Oil using the same machineries and with the
same owners and management, thus, in circumvention of their security of
tenure. Executive Labor Arbiter Santos (ELA Santos) found that petitioners had
been illegally dismissed and ordered their reinstatement and the payment of
PHP1,006,045.87 corresponding to the petitioners’ full backwages less the
amount paid to them as their respective “separation pay.” Respondents filed
their Notice of Appeal with Appeal Memorandum along with a Verified Motion to
Reduce Bond with the NLRC and posted 60% of the award ordered by the LA, or
PHP 603,627.52, as their appeal bond. The NLRC denied respondents’ Verified
Motion to Reduce Bond for lack of merit and so dismissing their appeal for non-
perfection, prompting respondents to file a Motion for Reconsideration with
Motion to Admit Additional Appeal Cash Bond with corresponding payment of
additional cash bond but the same was denied. Hence, petitioners filed a
petition for certiorari with the CA. The CA held that private respondents had
substantially complied with the rule requiring the posting of an appeal bond
equivalent to the total award given to the employees.
Issue:
Whether there was substantial compliance with the rule requiring the posting of
an appeal bond
Ruling:
Yes. On the issue of perfecting the appeal, the CA was correct when it pointed
out that Rule VI of the New Rules of Procedure of the NLRC provides that a
motion to reduce bond shall be entertained “upon the posting of a bond in a
reasonable amount in relation to the monetary award.”
In Garcia v. KJ Commercial (G.R. No. 196830, February 29, 2012), the SC

explained: The NLRC has full discretion to grant or deny the motion to reduce
bond, and it may rule on the motion beyond the 10-day period within which to
perfect an appeal. In order to give full effect to the provisions on motion to
reduce bond, the appellant must be allowed to wait for the ruling of the NLRC
48
on the motion even beyond the 10-day period to perfect an appeal. If the NLRC
grants the motion and rules that there is indeed meritorious ground and that
the amount of the bond posted is reasonable, then the appeal is perfected. If
the NLRC denies the motion, the appellant may still file a motion for
reconsideration as provided under Section 15, Rule VII of the Rules. If the NLRC
grants the motion for reconsideration and rules that there is indeed meritorious
ground and that the amount of the bond posted is reasonable, then the appeal
is perfected. If the NLRC denies the motion, then the decision of the labor
arbiter becomes final and executory. In any case, the rule that the filing of a
motion to reduce bond shall not stop the running of the period to perfect an
appeal is not absolute.
The Court may relax the rule under certain exceptional circumstances in order
to resolve controversies on their merits. These circumstances include: (1)
fundamental consideration of substantial justice; (2) prevention of miscarriage
of justice or of unjust enrichment; and (3) special circumstances of the case
combined with its legal merits, and the amount and the issue involved.” In this
case, the NLRC had reconsidered its original position and declared that the 60%
bond was reasonable given the merits of the justification provided by
respondents in their Motion to Reduce Bond, as supplemented by their Motion
for Reconsideration with Motion to Admit Additional Appeal Cash Bond. The CA
affirmed the merits of the grounds cited by respondents in their motions and
the reasonableness of the bond originally posted by respondents. This is in
accord with the guidelines established in McBurnie v. Ganzon (G.R. Nos. 178034
& 178117 G R. Nos. 186984-85, October 17, 2013) where this Court declared
that the posting of a provisional cash or surety bond equivalent to ten percent
(10%) of the monetary award subject of the appeal is sufficient provided that
there is meritorious ground therefor.
Jurisdiction of NLRC
ESTRELLITA G. SALAZAR v. PHILIPPINE DUPLICATORS, INC., and /or
LEONORA FONTANILLA G.R. No. 154628, December 6, 2006, Velasco,
Jr., J.
The NLRC, in aid of its exclusive appellate jurisdiction, has the authority under
Article 218 (d) of the Labor Code to correct or amend any error committed by a
labor arbiter.
Facts:
Salazar was terminated from her employment due to alleged falsification of
company records. Salazar denies receiving Duplicators’ termination letter. The
Labor Arbiter held that the dismissal was for a just cause but the company
breached the twin-notice requirement as provided by law. It ordered Duplicators
to pay the indemnity of PhP10,000.
However, on appeal, the NLRC ruled that there was no dismissal but due to
strained relationship, Duplicators is liable to pay separation pay instead of
49
paying the indemnity imposed by the LA. Salazar now questions the deletion of
the indemnity.
Salazar claims that the NLRC should not have deleted the award of indemnity in
her favor since both Duplicators and Fontanilla did not interpose any appeal
from the Decision of Labor Arbiter Caday and hence, no affirmative relief could
be granted to said respondents.
Issue:
Whether the NLRC violated the rule in labor cases that an appellee cannot be
awarded any affirmative relief
Ruling:
No. Petitioner's first ground in her Memorandum of Appeal before the NLRC
stated that Labor Arbiter Caday's ruling that she was not illegally dismissed was
erroneous. In resolving this issue, the NLRC overturned Caday's finding of
petitioner’s valid dismissal, and instead concluded that there was no
termination of petitioner’s employment. As a consequence, the NLRC had to
recall the award of PhP10,000.00 indemnity imposed by Arbiter Caday although
not prayed for by Duplicators since the said award was inconsistent with the
finding that petitioner’s employment subsisted. Without petitioner’s dismissal,
there can be no legal basis for the indemnity; hence, Duplicators is not obliged
to comply with the two-notice requirement. Petitioner has no reason to
complain that she was deprived of monetary benefits since the NLRC’s Decision
did not actually benefit Duplicators as the PhP14,095.76 separation pay granted
to petitioner is certainly greater than the PhP10,000.00 indemnity deleted by
the NLRC.

G.R. No. 203355, August 18, 2015, Velasco Jr. J.
Res Judicata does not bar the filing of complaints for illegal dismissal.
Facts:
Due to alleged dwindling capital, respondent wrote the Director of the DOLE
Region IV-A a letter regarding New ANJH’s impending cessation of operations
and the sale of its assets to respondent NH Oil Mill Corporation, as well as the
termination of thirty-three (33) employees by reason thereof. Petitioners
received their respective separation pays, signed the corresponding check
vouchers and executed Quitclaims and Release before Labor Arbiter
Melchisedek A. Guan (LA Guan). LA Guan then declared the “labor dispute”
between New ANJH and petitioners as “dismissed with prejudice on ground of
settlement.”
Petitioners however, filed a complaint for illegal dismissal, with NLRC Regional
Arbitration alleging in their complaint that while New ANJH stopped its
operations, it resumed its operations as NH Oil using the same machineries and
with the same owners and management, thus, in circumvention of their security
of tenure. Executive Labor Arbiter Generoso V. Santos (ELA Santos) found that
petitioners had been illegally dismissed and ordered their reinstatement and
payment of full backwages less the amount paid to them as their respective
“separation pay.” In a Resolution, the NLRC reversed its earlier Decision and
ordered the dismissal of petitioners’ complaint on the ground that it was barred
50
by the Orders issued by LA Guan under the doctrine of res judicata. Hence,
petitioners filed a petition for certiorari with the CA. The CA declared that the
petitioners’ complaint for illegal dismissal was already barred by res judicata.
Issue:
Whether the complaint for illegal dismissal was already barred by res judicata
Ruling:
No. For res judicata to apply, the concurrence of the following requisites must
be verified: (1) the former judgment is final; (2) it is rendered by a court having
jurisdiction over the subject matter and the parties; (3) it is a judgment or an
order on the merits; (4) there is—between the first and the second actions—
identity of parties, of subject matter, and of causes of action. The third requisite
is not present. The Orders rendered by LA Guan cannot be considered as
constituting a judgment on the merits. The Orders simply manifest that
petitioners “are amenable to the computations made by the company
respecting their separation pay.” Nothing more. They do not clearly state the
petitioners’ right or New ANJH’s corresponding duty as a result of the
termination. The fourth requisite is also absent. While there may be substantial
identity of the parties, there is no identity of subject matter or cause of action.
In SME Bank, Inc. v. De Guzman (G.R. No. 184517, October 8, 2013), the SC
held that the acceptance of separation pay is an issue distinct from the legality
of the dismissal of the employees. The conformity of the employees to the
corporation’s act of considering them as terminated and their subsequent
acceptance of separation pay does not remove the taint of illegal dismissal.
Acceptance of separation pay does not bar the employees from subsequently
contesting the legality of their dismissal, nor does it bar them from challenging
the legality of their separation from the service. In the absence of the third and
fourth requisites, the appellate court should have proceeded to rule on the
validity of petitioners’ termination.
51
DAIKOKU ELECTRONICS PHILS., INC v. ALBERTO J. RAZA G.R. No.

181688, June 5, 2009, Velasco, Jr., J.
Motions for reconsideration of any decision, resolution or order of the NLRC
should be filed within ten calendar days from receipt of decision.
Facts:
Daikoku hired respondent Alberto J. Raza as company driver, eventually
assigning him to serve as personal driver to its president, Mamuro Ono. Alberto,
after being let off by Ono, took the company vehicle to his own place in Makati
City. When asked where he parked the car the night before Alberto lied. Alberto
thereafter received a show-cause notice. He submitted his written explanation
of the incident, apologizing and expressing his regret. Daikoku’s General Affairs
Manager ordered Alberto dismissed from the service. Dishonesty and other
work related performance offenses appeared in the corresponding notice of
termination as grounds for the dismissal action. The Labor Arbiter ordered
Daikoku to reinstate Alberto and to pay backwages. On appeal, the NLRC
dismissed Daikoku’s appeal for failure to perfect it in the manner and
formalities prescribed by law but reinstated the same on Daikoku’s motion for
reconsideration on May 31, 2006. However, for Daikoku’s failure to reinstate
Alberto pending appeal, the NLRC ordered the payment of Alberto’s backwages.
The CA denied Daikoku’s appeal.
Issue:
Whether Daikoku’s motion for reconsideration was belatedly filed
Ruling:
Yes. Daikoku admitted receiving a copy of the May 31, 2006 NLRC resolution on
June 16, 2006, however he only filed its motion for reconsideration on July 3,
2006, or 17 days after the receipt. As provided in Section 15, Rule VII of the
NLRC 2005 Rules of Procedure, motions for reconsideration of any decision,
resolution or order of the Commission should be filed within ten calendar days
from receipt of decision. Procedural rules may be relaxed but only on valid and
compelling reasons. The bare invocation of the interest of substantial justice
line is not some magic wand that will automatically compel the Court to
suspend the procedural rules. Procedural rules are not to be belittled, let alone
dismissed simply because their non-observance may have resulted in prejudice
to a party’s substantial rights. Utter disregard of the rules cannot be justly
rationalized by harping on the policy of liberal construction.
Original and Appellate Jurisdiction of Med Arbiters

TEMIC SEMICONDUCTORS, INC. EMPLOYEES UNION-FFW, et al. v.
FEDERATION OF FREE WORKERS, et al.
G.R. No. 160993, May 20, 2008, Velasco, Jr., J.
TSIEU and Dimaano never raised the issue of any monetary or property claims
before the Office of the NCR-RD and before the proceedings with the Hearing
Officer. Much less did they raise this issue on appeal before the BLR when such
was not granted. TSIEU and Dimaano's failure to do so is fatal to its claims
insofar as the enforcement of the appealed order is concerned. They cannot
now assert such claims in the enforcement of said final and executory order.
FACTS:
TSIEU is the accredited bargaining agent for rank-and-file employees of Temic
Telefunken Microelectronics (Phils.), Inc. and is an affiliate of the Federation of
52
Free Workers (FFW). During the incumbency of Dimaano as president of TSIEU,

the collective bargaining negotiations resulted in a deadlock which prompted
the Dimaano-led union to hold a strike. The Secretary of DOLE issued a return-
to-work order, leading to a split between employee-union members who
returned to work and those who continued to strike, as led by Olivia Robles and
Dimaano, respectively.
The two groups of TSIEU conducted separate elections where in Robles and
Dimaano were elected by their respective factions. The result of both elections
were communicated to the National Capital Region Regional Director (NCR-RD)
of the Bureau of Labor Relations (BLR), but only the election result of TSIEU-
Dimaano were noted and certified by the Vice President for Political Affairs of
FFW. The governing board of FFW, in an emergency meeting, decided to place
TSIEU under its receivership, despite Dimaano’s objection as a member of the
same and on the ground that the twin elections resulted in a crisis of
leadership. Dimaano resigned from all of her positions in the FFW.
TSIEU and Dimaano filed the instant case against FFW before the NCR-RD of the
BLR for Declaration of Nullity of Receivership. The RD granted the same on the
ground that FFW had no authority to put TSIEU under receivership. The appeal
before the BLR was dismissed. The BLR’s resolution became final and executory
and a writ of execution was issued on September 18, 2000. The NCR RD of BLR
issued an order directing the sheriffs to lift the notices of garnishment on the
ground that there was a need for prior determination of the actual amounts due
to TSIEU. Later on, the BLR voided its prior writ of execution and notices of
garnishment. The CA affirmed the BLR resolution.
ISSUE:
Whether the writ of execution granting the turnover of properties and
remittance of monetary claims was within the terms of the final and executory
order sought to be enforced
RULING:
No. The receivership of TSIEU ordered by private respondents has been duly
nullified. The bone of contention is: What level does the declaration of nullity of
receivership extend? A scrutiny of the March 24, 1998 Order of the NCR RD
clearly bears out that what had been granted thereat was the nullification of
the receivership of TSIEU by FFW, no more and no less. The fallo of the March
24, 1998 Order unequivocally granted merely the nullification of the
receivership. The disquisitive part, body, or ratio decidendi of the March 24,
1998 Order--as distinguished from the fallo or dispositive portion--where the
findings of fact and law, the reasons, and evidence to support such findings
including the discussions of the issues leading to their determination are drawn
from, likewise obviously did not include the claim for properties and the
remittance of any monetary claim.
ST. MARTIN FUNERAL HOMES v. NATIONAL LABOR RELATIONS

COMMISSION, AND BIENVENIDO ARICAYOS G.R. NO. 142351, November
22, 2006, Velasco, Jr. J.
While a formal trial or hearing is discretionary on the part of the Labor Arbiter,
when there are factual issues that require a formal presentation of evidence in
53
a hearing, the Labor Arbiter cannot simply rely on the position papers, more so,
on mere unsubstantiated claims of parties.
Facts:
Bienvenido Aricayos assisted in managing St. Martin Funeral Homes without
compensation. When Amelita took over as manager of the company, she found
out that St. Martin had arrearages in the payment of taxes, but company
records show that payments were made. Because of this, Amelita dismissed
Aricayos from managing St. Martin's business.
Aricayos filed a case for illegal dismissal. The NLRC remanded the case to the
LA to determine if there is an employer-employee relationship.
St. Martin insists that the Labor Arbiter actually concluded that there was no
employer-employee relationship between the parties considering the
memoranda, position papers, and the documentary evidence presented in
support of their respective positions.
Issue:
Whether the Supreme Court can make a determination of the presence of an
employer-employee relationship between St. Martin and Aricayos based on the
evidence on record
Ruling:
No. The issue submitted for resolution is a question of fact which is proscribed
by the rule disallowing factual issues in appeal by certiorari to the Supreme
Court under Rule 45. This is explicit in Rule 45, Section 1 that petitions of this
nature shall raise only questions of law which must be distinctly set forth. St.
Martin would like the Court to examine the pleadings and documentary
evidence extant on the records of the Labor Arbiter to determine if said official
indeed made a finding on the existence of the alleged employer-employee
nexus between the parties based on the facts contained in said pleadings and
evidence. Evidently, this issue is embraced by the circumscription.
Even if we would like to relax the rule and allow the examination of the
documentary evidence as an exception to the general rule, we are precluded by
the abject failure of petitioner to attach to the petition important and material
portions of the records as would support the petition prescribed by Rule 45,
Section 4. St. Martin asks us to find out if the Labor Arbiter was correct in
concluding that respondent Aricayos was not in its employ; but committed the
blunder of not attaching to the petition even the Decision of the Labor Arbiter
sought to be reviewed, the NLRC Decision, the position papers and memoranda
of the parties filed with the Labor Arbiter, the affidavits of petitioner’s
employees, and other pieces of evidence that we can consider in resolving the
factual issue on employment. Without these documents, petitioner cannot be
given the relief prayed for.
Even with the inadequate information and few documents on hand, one thing is
clear that the Labor Arbiter did not set the labor case for hearing to be able to
determine the veracity of the conflicting positions of the parties. On this point
alone, a remand is needed.
54
There are certain admissions by petitioner St. Martin that should have prodded
the Labor Arbiter to conduct a hearing for a more in-depth examination of the
contrasting positions of the parties, namely; that respondent helped Amelita’s
mother manage the funeral parlor business by running errands for her,
overseeing the business from 1995 up to January 1996 when the mother died,
and that after Amelita made changes in the business operation, private
respondent and his wife were no longer allowed to participate in the
management of St. Martin. These facts could have been examined more in
detail by the Labor Arbiter in a hearing to convince himself that there was
indeed no employment relationship between the parties as he originally found.
DANILO OGALISCO v. HOLY TRINITY COLLEGE OF GENERAL SANTOS

CITY, INC.
Factual findings of the labor arbiter and the NLRC are accorded respect and
finality when supported by substantial evidence, which means such evidence
as that which a reasonable mind might accept as adequate to support a
conclusion.
Facts:
Danilo Ogalisco was employed by respondent Holy Trinity College as a regular
faculty member. In 1997, the school through its vice president, called his
attention to a widespread rumor that he was having an illicit affair with Mrs.
Crisanta Hitalia, a married co-teacher. In 1998, he received an invitation to
attend an investigation to be conducted by a panel appointed by the school
president. He attended the investigation, but was deeply surprised when
instead of having an investigation regarding the complaints against the school,
it became an investigation against him. He received a copy of the minutes of
the investigation and was given until 7:30 p.m. the next day to answer the
charges against him. Petitioner timely submitted his comment. Nevertheless,
the panel recommended his termination. Consequently, Holy Trinity College
terminated his services.
Petitioner filed a complaint for illegal dismissal with the NLRC. The labor arbiter
dismissed the complaint but nevertheless awarded PhP 17,460 to petitioner as
indemnity for the school’s failure to afford petitioner due process. Upon appeal
to the NLRC, the NLRC likewise affirmed the Decision of the labor arbiter and
denied petitioner’s Motion for Reconsideration. Petitioner then filed a petition
for certiorari with the CA. However, the CA also dismissed the petition and
denied petitioner’s Motion for Reconsideration. Hence, this petition.
Issue:
Whether the petitioner was validly dismissed
Ruling:
Yes. The labor arbiter, NLRC, and CA unanimously found that petitioner was
validly dismissed. Petitioner, however, failed to show any extraordinary
circumstance why this Court should disturb the factual findings of the labor
arbiter which were affirmed by the NLRC and the CA. Indeed, substantial
evidence is extant on record that showed convincingly the extra-marital affair
55
of petitioner with his co-teacher, Hitalia. Hence, petitioner’s termination is valid

and legal under Article 282 of the Labor Code.
Social Welfare Legislation (P.D. 626)

SSS Law (R.A. No. 8282)
BERNARDINA P. BARTOLOME v. SOCIAL SECURITY SYSTEM and
SCANMAR MARITIME SERVICES, INC.
The term "parents" in the phrase "dependent parents" in Article 167 (j) of the
Labor Code is used and ought to be taken in its general sense and cannot be
unduly limited to "legitimate parents."
Facts:
Due to the death of John Colcol, an employee of Scanmar Maritime Services,
Inc., Bernardina P. Bartolome, John’s biological mother filed a claim for death
benefits with the Social Security System (SSS). However, the SSS La Union
office denied the claim and ruled that Bartolome is not entitled to death
benefits of Colcol because she is no longer considered as the parent of John
Colcol as he was legally adopted by Cornelio Colcol. On appeal, the Employees’
Compensation Commission (ECC) affirmed the decision of SSS. The ECC ruled
that the legal parent referred to by P.D. 626, as amended, as the beneficiary,
who has the right to file the claim, is the adoptive father of the deceased and
not herein appellant. Hence, this petition.
Issue:
Whether the biological mother is entitled to receive the benefits
Ruling:
Yes. The rule limiting death benefits claims to the legitimate parents is contrary
to law. Rule XV, Sec. 1(c)(1) of the Amended Rules on Employees’
Compensation deviated from the clear language of Art. 167 (j) of the Labor
Code when it interpreted the phrase "dependent parents" as "legitimate
parents."
When the law does not distinguish, one should not distinguish. Plainly,
"dependent parents" are parents, whether legitimate or illegitimate, biological
or by adoption, who are in need of support or assistance. Article 167 (j), as
couched, clearly shows that Congress did not intend to limit the phrase
"dependent parents" to solely legitimate parents. Article 167 provides that "in
their absence, the dependent parents and subject to the restrictions imposed
on dependent children, the illegitimate children and legitimate descendants
who are secondary beneficiaries." Had the lawmakers contemplated
"dependent parents" to mean legitimate parents, it would have simply said
descendants and not "legitimate descendants."
Employee’s Compensation
JESSIE V. DAVID, represented by his wife, MA. THERESA S. DAVID, and
children, KATHERINE and KRISTINA DAVID v. OSG SHIP MANAGEMENT
MANILA, INC., and/or MICHAELMAR SHIPPING SERVICES
G.R. No. 197205, September 26, 2012, Velasco, Jr., J.
It is sufficient that there is a reasonable linkage between the disease suffered
by the employee and his work to lead a rational mind to conclude that his work
may have contributed to the establishment or, at the very least, aggravation of
any pre-existing condition he might have had.
56
Facts:
Jessie David entered into a Contract of Employment with OSG Manila for its
principal Michaelmar as Third Officer of its crude tanker. Prior to embarkation,
David was declared “fit for further sea duty.” While onboard the ship, he
suffered intolerable pains on his left foot. He was diagnosed with “lipoma on the
upper left leg with a possible calcaneus spur on the left foot.”, but found to be
fit for work. After his return to the country, David was referred to Dr. Lim, OSG
Manila’s company-designated physician. The MRI showed a mass on his left
foot. Reports from Dr. Lim and Dr. Pena of Metropolitan Medical Center showed
that the soft tissue sarcoma was caused by exposure to certain chemicals.
Despite the non-conclusive findings of both doctors, OSG Manila issued a
certification stating that David has been given a permanent disability Grade 1
by the Marine Medical Services of the hospital. David underwent chemotherapy
but the company refused to shoulder his expenses. He filed a complaint for
total and permanent disability benefits and damages. The Labor Arbiter and
NLRC ruled in his favor, finding the certification binding on the company. The CA
reversed the ruling. David argues that the illness was presumed work-related
and it is up to the company to overcome such presumption.
Issue:
Whether the illness was work-related, thus entitling David to disability benefits
Ruling:
Yes. Deemed incorporated into the contract of employment are the provisions of
the 2000 POEA-Standard Employment Contract. Sec. 20(B) provides that
illnesses not listed in Sec. 32 are disputably presumed as work-related. David
suffered from malignant fibrous histiocytoma (MFH) in his left thigh. MFH is not
one of the diseases enumerated under Sec. 32 of the POEA-SEC. This disputable
presumption works in favor of the employee pursuant to the mandate under EO
247 under which the POEA-SEC was created: "to secure the best terms and
conditions of employment of Filipino contract workers and ensure compliance
therewith" and "to promote and protect the well-being of Filipino workers
overseas." Hence, unless contrary evidence is presented by the seafarer’s
employer/s, this disputable presumption stands.
David showed that part of his duties as a Third Officer of the crude tanker M/T
Raphael involved "overseeing the loading, stowage, securing and unloading of
cargoes." As a necessary corollary, David was frequently exposed to the crude
oil that M/T Raphael was carrying. It has been regarded that the hazardous
chemicals in crude oil can possibly contribute to the formation of cancerous
masses. David has provided more than a reasonable nexus between the nature
of his job and the disease that manifested itself on the sixth month of his last
contract with respondents.
This reasonable connection has not been convincingly refuted by respondents.

On the contrary, respondents do not deny the functions performed by David on
board M/T Raphael or the cargo transported by the tanker in which he was
assigned. The quantum of evidence required in labor cases to determine the
liability of an employer for the illness suffered by an employee under the POEA-
SEC is not proof beyond reasonable doubt but mere substantial evidence or
57
"such relevant evidence as a reasonable mind might accept as adequate to

support a conclusion.”
TRANSOCEAN SHIP MANAGEMENT (PHILS.), INC., CARLOS S. SALINAS,

and GENERAL MARINE SERVICES CORPORATION v. INOCENCIO B.
VEDAD
G.R. Nos. 194490-91, March 20, 2013, Velasco, Jr., J.
Where the evidence may be reasonably interpreted in two divergent ways, one
prejudicial and the other favorable to the overseas workers, the balance must
be tilted in their favor consistent with the principle of social justice.
Facts:
Inocencio B. Vedad was a seafarer employed by Transocean. Inocencio's
employment under the POEA-SEC was for a 10-month period and he was
deployed and went on board M/V Invicta after the required pre-employment
medical examination (PEME) which gave him a clean bill of health.
Before the expiry of his 10-month contract, Inocencio was repatriated for
medical reasons because while on board M/V lnvicta he fell ill and experienced
fever, sore throat and pain in his right ear. He underwent medical examination
with the finding of ''chronic suppurative otitis media right CSOM(R) with acute
pharyngitis, with mild maxillary sinusitis," for which he was prescribed
antibiotics and ear drops with the recommendation of a follow-up examination
of the CSOM(R). He underwent tonsillectomy but was later found by a
histopathology report to be suffering from cancer of the right tonsil. Inocencio
was advised to undergo chemotherapy and linear treatment at a cost of P500,
000, which Transocean and General Marine promised to shoulder. Inocencio
started with the procedure but could not continue due to the failure of
Transocean and General Marine to provide the necessary amount. Inocencio
filed a complaint before the Labor Arbiter praying for total permanent disability
benefits and sickness allowance. The Labor Arbiter awarded permanent total
disability benefits plus attorney’s fees while dismissing all other claims. The
Labor Arbiter, applying Section 20 of the POEA-SEC, ruled Inocencio's tonsil
cancer to be presumptively work-related. The NLRC vacated that of the Labor
Arbiter and awarded sickness allowance equivalent to 120 days salary and
reimbursement of Inocencio's medical expenses. The CA modified the NLRC’s
decision by setting aside the award of sickness allowance but affirming the
grant of reimbursement of medical expenses.
Issues:
1. Whether Inocencio is entitled to sickness allowance and reimbursement of
his medical expenses
2. Whether Inocencio is entitled to permanent total disability benefits
Ruling:
1. Yes. Inocencio got ill with what appeared to be tonsillitis while on board M/V
lnvicta, for which he was treated at a foreign port where the ship docked. His
malady still continued despite the treatment as he was, in fact, repatriated
before the end of his 10-month contract on medical grounds.
58
Inocencio is entitled to receive sickness allowance from his repatriation for

medical treatment, which is equivalent to his basic wage for a period not
exceeding 120 days or four months. The fact that Inocencio's sickness was later
medically declared as not work-related does not prejudice his right to receive
sickness allowance, considering that he got ill while on board the ship and was
repatriated for medical treatment before the end of his 10-month employment
contract. He is entitled to sickness allowance pending assessment and
declaration by the company-designated physician on the work-relatedness of
his ailment. When the assessment of the company physician is that the ailment
is not work-related but such assessment is duly contested by the second
opinion from a physician of the seafarer's choice, then pending the final
determination by a third opinion pursuant to the mechanism provided under the
third paragraph of Sec. 20(B) (3), the seafarer is still entitled to sickness
allowance but not to exceed 120 days.
2. No. Tonsil cancer or tonsillar carcinoma is not work-related. The NLRC and the
CA correctly ruled on this issue. It is not included in the list of occupational
diseases. Inocencio carried the burden of showing by substantial evidence that
his cancer developed or was aggravated from work-related causes. As both the
NLRC and the CA found, he had nothing to support his claim other than his bare
allegations.
In determining whether or not a given illness is work-related, it is

understandable that a company-designated physician would be more positive
and in favor of the company than, say, the physician of the seafarer's choice. It
is on this account that a seafarer is given the option by the POEA-SEC to seek a
second opinion from his preferred physician. And the law has anticipated the
possibility of divergence in the medical findings and assessments by
incorporating a mechanism for its resolution wherein a third doctor selected by
both parties decides the dispute with finality, as provided by Sec. 20(B) (3) of
the POEA-SEC.
Inocencio, however, failed to seek a second opinion from a physician of his

choice. The company-designated doctor's certification must prevail. In the
absence of any duly medically proven work-relatedness, Inocencio cannot be
accorded permanent total disability benefits.

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Dean’s

PEOPLE OF THE PHILIPPINES v. RODOLFO GALLO y GADOT, FIDES

Regulatory and Visitorial Powers of the DOLE Secretary

in the enumeration those earning above the minimum wage. On appeal, CA

2000. However, on October 6, 2000, the Regional Tripartite Wage and

Instead of availing either option in the report, Prudencio requested that he be

sector is allowed only by way of voluntary endowment by an employer through

Whether petitioners became employees of PLDT after the Agreement between

GREGORIO V. TONGKO v. THE MANUFACTURERS LIFE INSURANCE CO.

The labor arbiter decreed that no employer-employee relationship existed

NLRC finding the absence of an employer-employee relationship between the

Issues: Whether there was an employer-employee relationship between

Per DOLE Order No. 3, Series of 2001, there is contracting or subcontracting

Also, the constitutionally-protected right of labor to security of tenure covers

Respondents, by accepting the conditions of the contract, cannot now argue

The contractor or subcontractor carries on a distinct and independent business

The contractor or subcontractor has substantial capital or investment; and

Respondents were employed by A.C. Sicat as project employees. In their

Non-renewal of their contracts by A.C. Sicat is a management prerogative, and

W.M. MANUFACTURING, INC. v. RICHARD R. DALAG AND GOLDEN ROCK

Notwithstanding the contract stipulation leaving Golden Rock the exclusive

breached the twin-notice requirement as provided by law. It ordered Duplicators

EDI-STAFFBUILDERS INTERNATIONAL, INC. v. NATIONAL LABOR

ROLANDO V. AROMIN v. NATIONAL LABOR RELATIONS COMMISSION,

interest of the employer, adversely reflected on his competence, loyalty, and

BLUE ANGEL MANPOWER AND SECURITY SERVICES, INC. v. COURT OF

GREGORIO V. TONGKO v. THE MANUFACTURERS LIFE INSURANCE CO.

The labor arbiter decreed that no employer-employee relationship existed

Manulife failed to overcome such burden of proof. Manulife even failed to

WESLEYAN UNIVERSITY PHILIPPINES v. NOWELLA REYES

terminate the employment of thirty-four (34) of its employees, which include

Legend sent the 34 employees their respective notices of retrenchment, stating

Subsequently, 14 of the 34 retrenched employees filed before the Labor Arbiter

Redundancy exists where the services of an employee are in excess of what is

Retrenchment is used interchangeably with the term lay-off. It is the

Redundancy exists when the number of employees is in excess of what is

Substantial evidence is the question of evidence required to establish a fact in

The basis for retrenchment was not established by substantial evidence,

ALFREDO A. MENDROS, JR. v. MITSUBISHI MOTORS PHILS.

salaried personnel. Eventually MMPC instituted a series of retrenchment

Whether the cessation of the operations and subsequent sale of ANJH

to justify the dismissal of an employee on the ground of serious misconduct, the

Hearing; meaning of opportunity to be heard

KING OF KINGS TRANSPORT, INC., et al. v. SANTIAGO MAMAC

(3) After determining that termination of employment is justified, the employers

MARILOU S. GENUINO v. NATIONAL LABOR RELATIONS COMMISSION,

While we hold that Citibank failed to observe procedural due process, we

provides that an employer may terminate an employment for fraud or willful

As Assistant Vice-President of Citibank's Treasury Department, Genuino was

R.B. MICHAEL PRESS and ANNALENE REYES ESCOBIA v. NICASIO C.

course is the hearing or opportunity for the employee to defend himself

The undue haste in effecting respondent’s termination shows that the

In the February 24, 1999 notice of dismissal, petitioners simply justified

ARMANDO ALILING v. JOSE B. FELICIANO, MANUEL F. SAN MATEO,

WWWEC failed to take action so Aliling requested for reinstatement. Lariosa

2. Whether petitioner’s refusal to report to work at the Virac terminal

Smart hired Solidum as Department Head of Smart Prepaid/Buddy Activations.

G.R. No. 161690, July 23, 2008, Velasco, Jr., J.

Any seeming infirmity in the application and admission of union membership,

The right of employees to self-organization and membership in a union must

ALABANG COUNTRY CLUB, INC. v. NATIONAL LABOR RELATIONS

Unfair Labor Practice of Employers