Manila Prince shelter for it emprises the majority and controlling stock.

The Court also

reiterated how much of national pride will vanish if the nation¶s cultural
heritage will fall on the hands of foreigners. 
Facts: Pursuant to the privatization program of the government, GSIS chose
In his dissenting opinion, Justice Puno said that the provision in question
to award during bidding in September 1995 the 51% outstanding shares of
should be interpreted as pro-Filipino and, at the same time, not anti-alien in
the respondent Manila Hotel Corp. (MHC) to the Renong Berhad, a
itself because it does not prohibit the State from granting rights, privileges
Malaysian firm, for the amount of Php 44.00 per share against herein
and concessions to foreigners in the absence of qualified Filipinos. He also
petitioner which is a Filipino corporation who offered Php 41.58 per share.
argued that the petitioner is estopped from assailing the winning bid of
Pending the declaration of Renong Berhad as the winning bidder/strategic
Renong Berhad because the former knew the rules of the bidding and that
partner of MHC, petitioner matched the former¶s bid prize also with Php
the foreigners are qualified, too.
44.00 per share followed by a manager¶s check worth Php 33 million as Bid
Security, but the GSIS refused to accept both the bid match and the
manager¶s check. 

One day after the filing of the petition in October 1995, the Court issued
a TRO enjoining the respondents from perfecting and consummating
the sale to the Renong Berhad. In September 1996, the Supreme Court
En Banc accepted the instant case. 

Issue: Whether or not the GSIS violated Section 10, second

paragraph, Article 11 of the 1987 Constitution

Ruling: The Supreme Court directed the GSIS and other

respondents to cease and desist from selling the 51% shares of
the MHC to the Malaysian firm Renong Berhad, and instead to
accept the matching bid of the petitioner Manila Prince Hotel. 

According to Justice Bellosillo, ponente of the case at bar, Section 10,

second paragraph, Article 11 of the 1987 Constitution is a mandatory
provision, a positive command which is complete in itself and needs no
further guidelines or implementing laws to enforce it. The Court En Banc
emphasized that qualified Filipinos shall be preferred over foreigners, as
mandated by the provision in question. 

The Manila Hotel had long been a landmark, therefore, making the 51% of
the equity of said hotel to fall within the purview of the constitutional

Tañada v. Angara G.R. No. 118295 | May 2, 1997 Petitioners: Wigberto
Tanada, et al. Respondents: Edgardo Angara, et al.
Summary: Petitioners assail the constitutionality of the Philippines acceding
to the World Trade Organization for being violative of provisions which are
supposed to give preference to Filipino workers and economy and on the
ground that it infringes legislative and judicial power. The WTO, through it
provisions on “most favored nation” and national treatment, require that
nationals and other member countries are placed in the same footing in
terms of products and services. However, the Court brushed off these
contentions and ruled that the WTO is constitutional. Sections 10 and 12 of
Article XII (National Economy and Patrimony) should be read in relation to
Sections 1 and 13 (promoting the general welfare). Also, Section 10 is self-
executing only to “rights, privileges, and concessions covering national
economy and patrimony” but not every aspect of trade and commerce.
There are balancing provisions in the Constitution allowing the Senate to
ratify the WTO agreement. Also, the Constitution doesn’t rule out foreign
competition. States waive certain amount of sovereignty when entering into
treaties.
Facts: • This case questions the constitutionality of the Philippines being
part of the World Trade Organization, particularly when President Fidel
Ramos signed the Instrument of Ratification and the Senate concurring in
the said treaty.
• Following World War 2, global financial leaders held a conference in
Bretton Woods to discuss global economy. This led to the establishment of
three great institutions: International Bank for Reconstruction and
Development (World Bank), International Monetary Fund and International
Trade Organization.
• However, the ITO failed to materialized. Instead, there was the General
Agreement on Trades and Tariffs. It was on the Uruguay Round of the GATT
that the WTO was then established.
• The WTO is an institution regulating trade among nations, including the
reduction of tariff and barriers.
• Petitioners filed a case assailing the WTO Agreement for violating the
mandate of the 1987 Constitution to “develop a self-reliant and
independent national economy effectively controlled by Filipinos, to give
preference to qualified Filipinos and to promote the preferential use of
Filipino labor, domestic materials and locally produced goods.”
• It is petitioners’ position that the “national treatment” and “parity
provisions” of the WTO Agreement “place nationals and products of
member countries on the same footing as Filipinos and local products,” in
contravention of the “Filipino First” policy of the Constitution. They
allegedly render meaningless the phrase “effectively controlled by
Filipinos.”
Issue 1: Does the petition present a justiciable controversy? YES! In seeking
to nullify the Senate’s act as being unconstitutional, the petition no doubt
raises a justiciable controversy. It becomes not only the right but in fact the
duty of the judiciary to settle the dispute
Issue 2: Do the provisions of the WTO Agreement contravene Section 19,
Article II and Section 10 & 12, Artilce XII of the 1987 Constitution? NO!
Petitioners’ Contentions:
• Petitioners argue that the “letter, spirit and intent” of the Constitution
mandating “economic nationalism” are violated by the so-called “parity
provisions” and “national treatment” clauses scattered in parts of WTO
Agreement
o This is in view of the most-favored nation clause (MFN) of the TRIMS
(trade-related investment measures), TRIPS (Trade Related aspects of
intellectual property rights), Trade in Services, and par. 4 of Article III of
GATT 1994. o “shall be accorded treatment no less favorable than that
accorded to like products of national
origin”
• Sec. 19, Art II:The State shall develop a self-reliant and independent
national economy effectively controlled by Filipinos.
• Sec. 10, Art XII: Congress shall enact measures that will encourage the
formation and operation of enterprises whose capital is wholly owned by
Filipinos. In the grant of rights, privileges, and concessions covering the
national economy and patrimony, the State shall give preference to
qualified Filipinos.
• Sec. 12, Art XII: The State shall promote the preferential use of Filipino
labor, domestic materials and locally produced goods, and adopt measures
that help make them competitive.”
Ruling:
• These provisions are not self-executing
10 years
• Constitution Does Not Rule Out Foreign Competition
o Encourages industries that are competitive in both domestic and foreign
markets
• The Court will not pass upon the advantages and disadvantages of trade
liberalization as an economic policy. It will only perform its constitutional
duty of determining whether the Senate committed grave abuse of
discretion

o Merely guides in the exercise of judicial review and in making laws. Issue 3: Does the text of the WTO and its Annexes limit, restrict or impair
the exercise of legislative power by Congress? NO!
• Secs. 10 and 12 of Article XII should be read and understood in relation to
the other sections in said article, especially Sec. 1 and 13: • A portion of sovereignty may be waived without violating the Constitution.

o A more equitable distribution of opportunities, income and wealth; o A • While sovereignty has traditionally been deemed absolute and all-
sustained increase in the amount of goods and services encompassing on the domestic level, it is however subject to restrictions
and limitations voluntarily agreed to by the Philippines, expressly or
o An expanding productivity as the key to raising the quality of life
impliedly, as a member of the family of nations.
• The issue here is not whether this paragraph of Sec. 10 of Art. XII is self-
• The sovereignty of a state therefore cannot in fact and in reality be
executing or not. Rather, the issue is whether, as a rule, there are enough
considered absolute. Certain restrictions enter into the picture: limitations
balancing provisions in the Constitution to allow the Senate to ratify the
imposed by the nature of membership in the family of nations & limitations
Philippine concurrence in the WTO Agreement. And we hold that there are.
imposed by treaty stipulations.
• WTO Recognizes Need to Protect Weak Economies

o Unlike in the UN where major states have permanent seats and veto
powers in the Security Council, in the WTO, decisions are made on the basis
of sovereign equality, with each member’s vote equal in weight.

• Specific WTO Provisos Protect Developing Countries

o Tariff reduction – developed countries must reduce at rate of 36% in 6

years, developing 24%

in 10 years o Domestic subsidy – developed countries must reduce 20% over

six (6) years, developing

countries at 13% in 10 years o Export subsidy – developed countries, 36% in

6 years; developing countries, 3/4ths of 36% in
 written notice of termination to the employee concerned and to the DOLE
at least 30 days prior to its effectivity. This Isetann failed to do.

The question now arises as to whether the failure of Isetann to comply with
RUBEN SERRANO, petitioner, vs. NATIONAL LABOR RELATIONS
the procedural requirements renders the dismissal invalid, or, in the event
COMMISSION and ISETANN DEPARTMENT STORE, respondents.
that it is valid, what the appropriate sanction or penalty must be meted out.
FACTS Ruben Serrano was the head of the security checkers section of
Prior to the doctrine laid down in the decision rendered in Wenphil Corp.
Isetann Department Store. He was charged with the task of supervising
NLRC in 1989, the termination of an employee, even for just cause but
security checkers in their jobs (apprehending shoplifters and preventing
without following the requisite procedure, renders such dismissal illegal,
pilfirege of merchandise). On October 11, 1991, the management sent him a
and therefore null and void.
letter immediately terminating his services as security section head,
effective on the same day. The reason given by the management was In the Wenphil doctrine, this was reversed; the said rule was unjust to
“retrenchment”; they had opted to hire an independent security agency as a employers. Instead, the dismissal was held to be still valid but the employer
cost-cutting measure. Serrano filed a complaint for ID, illegal layoff, ULP, was sanctioned by way of the payment of indemnity (damages) – in that
underpayment of wages and nonpayment of salary and OT pay with the LA. case, P1,000. The amount of indemnity will be depended on the
circumstances of each case, taking into account the gravity of the offense
The LA rendered a decision in favor of Serrano. It stated that Isetann failed
committed by the employer.
to establish that it had retrenched its security division, that the petitioner
was not accorded due process, etc. and even stated that the day after Now, the Court once again examines the Wenphil doctrine. Puno says that
Serrano’s dismissal, Isetann employed a safety and security supervisor with the effect of the Wenphil doctrine was such that there has been a “dismiss
similar duties to that of the former. now, pay later” policy where the employers were able to circumvent the
procedural requisites of termination, which is more convenient than the
The NLRC on the other hand reversed the LA but ordered Isetann to pay
compliance with the 30-day notice. Panganiban said that the monetary
separation pay equivalent to one month per year of service, unpaid salary,
sanctions were too insignificant, niggardly, sometimes even late. Both
et al. It held that the phase-out of the security section was a valid exercise
justices are of the opinion that the deprivation of due process which must
of management prerogative on the part of Isetann, for which the NLRC
be accorded to the employee renders the dismissal illegal. Puno quoted that
cannot substitute its judgment in the absence of bad faith or abuse of
Legislative, Executive and Judicial proceedings that deny due process do so
discretion on the part of the latter; and that the security and safety
under the pain of nullity. Panganiban stated that such denial of due process
supervisor’s position was long in place prior to Serrano’s separation from
renders decisions and proceedings void for lack of jurisdiction.
the company, or the phase-out of the Security Section.
The present ruling of the Court held that the dismissal of the employee is
ISSUE Whether the petitioner’s dismissal was illegal.
merely ineffectual, not void. The dismissal was upheld but it is ineffectual.
RULING: Valid, but ineffectual (without legal effect) – payment of
The sanction provided was the payment of backwages from the time of
backwages, separation pay and other monetary claims No. The Court held
dismissal up to the decision of the court finding just or authorized cause.
that the dismissal was due to an authorized cause under Art. 283 of the
This was thought to balance the interests of both parties, recognizing the
Labor Code, i.e. redundancy. However, while an authorized cause exists,
employee’s right to notice and at the same time the right of the employer to
Isetann failed to follow the procedural requirement provided by Art. 283 of
dismiss for any of the just and authorized causes.
LC. For termination due to authorized causes, the employer must give a
The Court also responded to the arguments of Justices Puno and Petition was denied.
Panganiban by stating that the violation in the procedural requirement of
termination is not a denial of the fundamental right to due process. This is
because of the ff reasons:

1) The due process clause is a limitation on governmental powers,

inapplicable to the exercise of private power, such as in this case. The

provision “No person shall be deprived of life, liberty and property without
due process of law” pertains only to the State, as only it has the authority to
do the same. 2) The purpose of the notice and hearing under the Due
process

clause is to provide an opportunity for the employee to be heard before the

power of the organized society is brought upon the individual. Under Art.
283, however, the purpose is to give him time to prepare for the eventual
loss of his job and for DOLE to determine whether economic causes exist to
justify termination. It is not to give opportunity to be heard – there is no
charge against the employee under Art. 283 3) The employer cannot be
expected to be an impartial judge of his

own cause. 4) Not all notice requirements are requisites of due process.
Some

are simply a part of a procedure to be followed before a right granted to

party can be exercised; others are an application of the Justinian precept.
Such is the case here. The failure of the employer to observe a procedure
for the termination of employment which makes the termination of
employment merely ineffectual. 5) Art. 279 of the LC provides that only
dismissal without just or

authorized cause renders such dismissal illegal. To consider termination

without observing procedural reqt’s as also ID is to add another ground for
ID, thereby amending Art. 279.; Further, there is a disparity in legal
treatment, as employees who resign without giving due notice are only
liable for damages; it does not make their resignation void.

In this case, the separation pay was a distinct award from the payment of
backwages as a way of penalty.

ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. TERRIBLE, EDWIN D.
FEIST, MARIA OLIVIA T. YABUTMISA, TERESITA C. BERNARDO, AND ALLAN
G. ALMAZAR, Petitioners, vs. PEARLIE ANN F. ALCARAZ, Respondent. (G.R.
No. 192571; July 23, 2013)
FACTS: Petitioner Abbott Laboratories, Philippines (Abbott) caused the
publication in a major broadsheet newspaper of its need for a Medical and
Regulatory Affairs Manager. Alcaraz - who was then a Regulatory Affairs and
Information Manager at Aventis Pasteur Philippines, Incorporated (another
pharmaceutical company like Abbott) showed interest and submitted her
application.
In Abbotts offer sheet, it was stated that Alcaraz was to be employed on a
probationary basis. Later that day, she accepted the said offer and received
an electronic mail (e-mail) from Abbotts Recruitment Officer, petitioner
Teresita C. Bernardo (Bernardo), confirming the same. Attached to
Bernardos e-mail were Abbotts organizational chart and a job description of
Alcarazs work.
During Alcarazs pre-employment orientation, petitioner Allan G. Almazar
(Almazar), Hospiras Country Transition Manager, briefed her on her duties
and responsibilities as Regulatory Affairs Manager. Petitioner Kelly Walsh
(Walsh), Manager of the Literature Drug Surveillance Drug Safety of Hospira,
will be her immediate supervisor. Petitioner Maria Olivia T. Yabut-Misa
(Misa), Abbotts Human Resources (HR) Director, sent Alcaraz an e-mail
which contained an explanation of the procedure for evaluating the
performance of probationary employees.
During the course of her employment, Alcaraz noticed that some of the staff
had disciplinary problems. Thus, she would reprimand them for their
unprofessional behavior such as non-observance of the dress code,
moonlighting, and disrespect of Abbott officers. However, Alcarazs method
of management was considered by Walsh to be "too strict."
Alcaraz was called to a meeting with Walsh and Terrible, Abbotts former HR
Director, where she was informed that she failed to meet the regularization
standards for the position of Regulatory Affairs Manager. Walsh, Almazar,
and Bernardo personally handed to Alcaraz a letter stating that her services
had been terminated effective May 19, 2005. The letter detailed the reasons
for Alcarazs termination. Alcaraz felt that she was unjustly terminated from
her employment and thus, filed a complaint for illegal dismissal and
damages against Abbott and its officers, namely, Misa, Bernardo, Almazar,
Walsh, Terrible, and Feist. She claimed that she should have already been
considered as a regular and not a probationary employee given Abbotts
failure to inform her of the reasonable standards for her regularization upon
her engagement as required under Article 295of the Labor Code.
LA dismissed Alcarazs complaint for lack of merit. The LA rejected Alcarazs
argument that she was not informed of the reasonable standards to qualify
as a regular employee. The NLRC reversed the findings of the LA and ruled
that there was no evidence showing that Alcaraz had been apprised of her
probationary status and the requirements which she should have complied
with in order to be a regular employee. On appeal, CA affirmed the NLRC
decision. Hence, this petition.
ISSUE: Was Alcaraz illegally dismissed?
HELD: The probationary employee may also be terminated for failure to
qualify as a regular employee in accordance with the reasonable standards
made known by the employer to the employee at the time of the
engagement.
A probationary employee, like a regular employee, enjoys security of
tenure. However, in cases of probationary employment, aside from just or
authorized causes of termination, an additional ground is provided under
Article 295 of the Labor Code, i.e., the probationary employee may also be
terminated for failure to qualify as a regular employee in accordance with
the reasonable standards made known by the employer to the employee at
the time of the engagement. Thus, the services of an employee who has
been engaged on probationary basis may be terminated for any of the
following: (a) a just or (b) an authorized cause; and (c) when he fails to
qualify as a regular employee in accordance with reasonable standards
prescribed by the employer.
A punctilious examination of the records reveals that Abbott had indeed
complied with the above-stated requirements. This conclusion is largely
impelled by the fact that Abbott clearly conveyed to Alcaraz her duties and
responsibilities as Regulatory Affairs Manager prior to, during the time of
her engagement, and the incipient stages of her employment. On this score,
the Court finds it apt to detail not only the incidents which point out to the
efforts made by Abbott but also those circumstances which would show that
Alcaraz was well-apprised of her employers expectations that would, in
turn, determine her regularization.
Abbott caused the publication in a major broadsheet newspaper of its need
for a Regulatory Affairs Manager, indicating therein the job description for
as well as the duties and responsibilities attendant to the aforesaid position.
In Abbotts December 7, 2004 offer sheet, it was stated that Alcaraz was to
be employed on a probationary status. On the day Alcaraz accepted Abbotts
employment offer, Bernardo sent her copies of Abbotts organizational
structure and her job description through e-mail. Alcaraz was made to
undergo a pre-employment orientation where Almazar informed her that
she had to implement Abbotts Code of Conduct and office policies on
human resources and finance and that she would be reporting directly to
Walsh. Alcaraz received copies of Abbotts Code of Conduct and
Performance Modules from Misa who explained to her the procedure for
evaluating the performance of probationary employees; she was further
notified that Abbott had only one evaluation system for all of its employees.
Considering the totality of the above-stated circumstances, it cannot,
therefore, be doubted that Alcaraz was well-aware that her regularization
would depend on her ability and capacity to fulfill the requirements of her
position as Regulatory Affairs Manager and that her failure to perform such
would give Abbott a valid cause to terminate her probationary employment.
An employer who terminates an employee for a valid cause but does so
through invalid procedure is liable to pay the latter nominal damages.
Despite the existence of a sufficient ground to terminate Alcarazs
employment and Abbotts compliance with the Labor Code termination
procedure, it is readily apparent that Abbott breached its contractual
obligation to Alcaraz when it failed to abide by its own procedure in
evaluating the performance of a probationary employee.
Records show that Abbotts PPSE procedure mandates, inter alia, that the
job performance of a probationary employee should be formally reviewed
and discussed with the employee at least twice: first on the third month and
second on the fifth month from the date of employment. Abbott is also
required to come up with a Performance Improvement Plan during the third
month review to bridge the gap between the employees performance and
the standards set, if any. In addition, a signed copy of the PPSE form should
be submitted to Abbotts HRD as the same would serve as basis for
recommending the confirmation or termination of the probationary
employment.
In this case, it is apparent that Abbott failed to follow the above-stated
procedure in evaluating Alcaraz. For one, there lies a hiatus of evidence that
a signed copy of Alcarazs PPSE form was submitted to the HRD. It was not
even shown that a PPSE form was completed to formally assess her
performance. Neither was the performance evaluation discussed with her
during the third and fifth months of her employment. Nor did Abbott come
up with the necessary Performance Improvement Plan to properly gauge
Alcarazs performance with the set company standards.
In this light, while there lies due cause to terminate Alcarazs probationary
employment for her failure to meet the standards required for her
regularization, and while it must be further pointed out that Abbott had
satisfied its statutory duty to serve a written notice of termination, the fact
that it violated its own company procedure renders the termination of
Alcarazs employment procedurally infirm, warranting the payment of
nominal damages. A further exposition is apropos. GRANTED.

ANTONIO M. SERRANO
Petitioner was hired by Gallant Maritime Services, Inc. and Marlow
Navigation Co., Ltd. (respondents) under a Philippine Overseas Employment
Administration (POEA)-approved Contract of Employment. However, his
position was downgraded to second officer. Respondent assured him that
he would be made Chief Officer. Respondents did not deliver on their
promise to make petitioner Chief Officer.7 Hence, petitioner refused to stay
on as Second Officer and was repatriated to the Philippines.Petitioner's
employment contract was for a period of 12 monthshe had served only two
(2) months and seven (7) days of his contract, leaving an unexpired portion
of nine (9) months and twenty-three (23) days.Petitioner filed with the
Labor Arbiter (LA) a Complaint9 against respondents for constructive
dismissal and for payment of his money claims in the total amount of
US$26,442.73LA- granted US$8,770.00- 3monthsLA based his computation
on the salary period of three months only -- rather than the entire
unexpired portion of nine months Petitioner appealed to the NLRC
contending that he is entitled to his salaries for the unexpired portion of
their contracts.NLRC- US$4,669.50 -3 months The NLRC reduced the
applicable salary rate from US$2,590.00 to US$1,400.00 because R.A. No.
8042 "does not provide for the award of overtime pay, which should be
proven to have been actually performed, and for vacation leave pay.
CA- sustained NLRC
Petitioner claims that the last clause in the 5th paragraph of Section 10,
Republic Act (R.A.) No. 8042 violates the OFWs' constitutional rights in that
it impairs the terms of their contract, deprives them of equal protection and
denies them due process.Sec. 10. Money Claims. - x x x In case of
termination of overseas employment without just, valid or authorized cause
as defined by law or contract, the workers shall be entitled to the full
reimbursement of his placement fee with interest of twelve percent (12%)
per annum, plus his salaries for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term,
whichever is less.
He contends that he is entitled to US$25,382.23, equivalent to his salaries
for the entire nine months and 23 days left of his employment contract,
computed at the monthly rate of US$2,590.00.
Issue: Does the subject clause violate Section 1,Article III of the Constitution,
and Section 18,Article II and Section 3, Article XIII on laboras a protected
sector?YES unconstitutional for violating the equal protection clause and
substantive due process
Petitioner:The law impinges on the equal protection clause, for it treats
OFWs differently from local Filipino workers (local workers) by putting a cap
on the amount of lump-sum salary to which OFWs are entitled in case of
illegal dismissal, while setting no limit to the same monetary award for local
workers when their dismissal is declared illegal.Petitioner further
underscores R.A. No. 8042 serves no other purpose but to benefit local
placement agencies. Petitioner argues that in mitigating the solidary liability
of placement agencies, the subject clause sacrifices the well-being of OFWs.
He marks the statement made by the Solicitor General in his
Memorandum, viz.:
Often, placement agencies, their liability being solidary, shoulder the
payment of money claims in the event that jurisdiction over the foreign
employer is not acquired by the court or if the foreign employer reneges on
its obligation. Hence, placement agencies that are in good faith and which
fulfill their obligations are unnecessarily penalized for the acts of the foreign
employer. To protect them and to promote their continued helpful
contribution in deploying Filipino migrant workers, liability for money claims
was reduced under Section 10 of R.A. No. 8042.the subject clause has a
discriminatory intent against, and an invidious impact on, OFWs at two
levels:
First, OFWs with employment contracts of less than one year vis-à-vis OFWs
with employment contracts of one year or more;
Second, among OFWs with employment contracts of more than one year;
and
Third, OFWs vis-à-vis local workers with fixed-period employment;
OFWs with employment contracts of less than one year vis-à-vis OFWs with
employment contracts of one year or moreA plain reading of Sec. 10 clearly
reveals that the choice of which amount to award an illegally dismissed
overseas contract worker, i.e., whether his salaries for the unexpired
portion of his employment contract or three (3) months’ salary for every
year of the unexpired term, whichever is less, comes into play only when
the employment contract concerned has a term of at least one (1) year or
more.Refer to the table. The subject clause classifies OFWs into two
categories. The first category includes OFWs with fixed-period employment
contracts of less than one year; in case of illegal dismissal, they are entitled
to their salaries for the entire unexpired portion of their contract. The
second category consists of OFWs with fixed-period employment contracts
of one year or more; in case of illegal dismissal, they are entitled to
monetary award equivalent to only 3 months of the unexpired portion of
their contracts.
since been differently treated in that their money claims are subject to a 3-
month cap, whereas no such limitation is imposed on local workers with
fixed-term employment.
The Court concludes that the subject clause contains a suspect classification
in that, in the computation of the monetary benefits of fixed-term
employees who are illegally discharged, it imposes a 3-month cap on the
claim of OFWs with an unexpired portion of one year or more in their
contracts, but none on the claims of other OFWs or local workers with fixed-
term employment. The subject clause singles out one classification of OFWs
and burdens it with a peculiar disadvantage.the Court dug deep into the
records but found no compelling state interest that the subject clause may
possibly serve.his salaries for the entire unexpired portion of his
employment contract consisting of nine months and 23 days computed at
the rate of US$1,400.00 per month.

The disparity in the treatment of these two groups cannot be discounted.

Among OFWs With Employment Contracts of More Than One YearThe
subject clause "for three (3) months for every year of the unexpired
term, whichever is less" shall apply is not the length of the original contract
period as held in Marsaman,106 but the length of the unexpired portion of
the contract period -- the subject clause applies in cases when the
unexpired portion of the contract period is at least one year, which
arithmetically requires that the original contract period be more than one
year.the subject clause creates a sub-layer of discrimination among OFWs
whose contract periods are for more than one year: those who are illegally
dismissed with less than one year left in their contracts shall be entitled to
their salaries for the entire unexpired portion thereof, while those who are
illegally dismissed with one year or more remaining in their contracts shall
be covered by the subject clause, and their monetary benefits limited to
their salaries for three months only.OFWs vis-à-vis Local Workers With
Fixed-Period Employmentwith the enactment of R.A. No. 8042, specifically
the adoption of the subject clause, illegally dismissed OFWs with an
unexpired portion of one year or more in their employment contract have
 Whether or not the petitioners be dismissed on the ground of resignation
from the union.

RULING:

NO. The court ruled that the petitioners cannot be summarily dismissed
from their employment the Hacienda as a result of their resignation from
DOMINADOR ANUCENSION AND 114 OTHER IGLESIA NI CRISTO the respondent Union, notwithstanding the existence of a union shop
AGRICULTURAL WORKERS OFHACIENDA LUISITA security clause in the Collective Bargaining Agreement. Sec 4, par. 4 of the
(PETITIONER)vs.NATIONAL LABOR UNION, TARLAC DEVELOPMENT RA 3350, provides that, nothing in this Act or in any Act or statute of the
CORPORATION AND COURT OFINDUSTRIAL RELATIONS Republic of the Philippines shall preclude an employer from making an
(RESPONDENTS)FACTS: agreement with a labor organization to require as a condition of
employment membership therein, if such labor organization is the
 On July 11, 1964, then Executive Secretary Calixto, acting by authority of representative of the employees as provided in Section twelve, but such
the President of the Philippines, sent a letter to the Presiding Judge of the agreement shall not cover members of any religious sects which prohibit
respondent court, certifying the labor dispute between the management of affiliation of their members in any such labor organization.
the Hacienda and the 115 members of the United Luisita Workers' Union, an
affiliate of respondent Union.

Petitioner union and the Hacienda entered into a collective bargaining

agreement on August 2,1962. (See Sec. 3-5). The said agreement provides
that all employees shall be required to be a member of the said UNION.
Moreover, it provides that failure to comply with the conditions set forth in
the agreement shall be discharged immediately.

 In a letter to the union president, Rufino D. Lagman, dated May 8, 1964, a
group of more than115 person representing themselves to be members of
the UNION and followers of a religious sect known as the Iglesia ni Cristo,
made manifest their 'irrevocable resignation' from the UNION.

The followers of Iglesia ni Cristo were prompted to resign from the union

because of the circular, dated April 1, 1959, from the Iglesia ni Cristo,
enjoining all members of the sect not to join any outside association or
organization of whatever kind or nature or that if they are already
members of such association or organization that they disaffiliate
themselves, otherwise they would be expelled from the church.

 ISSUE:

International School Alliance of Educators v. Quisimbing
The School, an internaitonal school, hires both foreign and local teachers as
members of its faculty, classifying the same into two: (1) foreign-hires and
(2) local-hires. The School employs four tests to determine whether a
faculty member should be classified as a foreign-hire or a local hire:
a. What is one's domicile?
b. Where is one's home economy?
c. To which country does one owe economic allegiance?
d. Was the individual hired abroad specifically to work in the School and was
the School responsible for bringing that individual to the Philippines?The
School grants foreign-hires certain benefits not accorded local-hires. These
include housing, transportation, shipping costs, taxes, and home leave travel
allowance. Foreign-hires are also paid a salary rate twenty-five percent
(25%) more than local-hires. The School justifies the difference on two
"significant economic disadvantages" foreign-hires have to endure, namely:
(a) the "dislocation factor" and (b) limited tenure.Petitioner International
School Alliance of Educators contested the difference in salary rates
between foreign and local-hires. Petitioner claims that the point-of-hire
classification employed by the School is discriminatory to Filipinos and that
the grant of higher salaries to foreign-hires constitutes racial discrimination.
Principle of “equal pay for equal work" Persons who work with substantially
equal qualifications, skill, effort and responsibility, under similar conditions,
should be paid similar salaries.If an employer accords employees the same
position and rank, the presumption is that these employees perform equal
work. If the employer pays one employee less than the rest, it is not for that
employee to explain why he receives less or why the others receive more.
(Bec the school contends that petitioner failed to prove that local-hires
perform work equal to that foreign-hires).There is no evidence here that
foreign-hires perform 25% more efficiently or effectively than the local-
hires. Both groups have similar functions and responsibilities, which they
perform under similar working conditions.
"Salary" - is a reward or recompense for services performed.The local-hires
perform the same services as foreign-hires and they ought to be paid the
same salaries as the latter. For the same reason, the "dislocation factor" and
the foreign-hires' limited tenure also cannot serve as valid bases for the
distinction in salary rates. The dislocation factor and limited tenure affecting
foreign-hires are adequately compensated by certain benefits accorded
them which are not enjoyed by local-hires, such as housing, transportation,
shipping costs, taxes and home leave travel allowances.Labot contracts,
collective bargaining agreements included, must yield to the common good.

Held: The Constitution specifically provides that labor is entitled to "humane

conditions of work."The Constitution also directs the State to promote
"equality of employment opportunities for all." Similarly, the Labor
Code provides that the State shall "ensure equal work opportunities
regardless of sex, race or creed."Article 248 declares it an unfair labor
practice for an employer to discriminate in regard to wages in order to
encourage or discourage membership in any labor organization.
 CA: The computation of wage increase should be remanded to the Secretary
of Labor because the computation was based on petitioner corporation’s
unaudited financial statements, which have no probative value pursuant to
the ruling in Restaurante Las Conchas v. Llego, and was done in
contravention of DOLE Advisory No. 1, Series of 2004, which contained the
guidelines in resolving bargaining deadlocks 
Asia Brewery vs. Tunay na Pagkakaisa Ng Mga Manggagawa Sa Asia ISSUE: Whether or not the secretary of labor was correct in adjusting the
(TPMA)  wage increase based on unaudited financial statements of the petitioner
DOCTRINE: In cases of compulsory arbitration before the Secretary of Labor corporation. 
pursuant to Article 263(g) of the Labor Code, the financial statements of the HELD: NO. Secretary of Labor gravely abused her discretion when she relied
employer must be properly audited by an external and independent auditor on the unaudited financial statements of petitioner corporation in
in order to be admissible in evidence for purposes of determining the determining the wage award because such evidence is self-serving and
proper wage award.  inadmissible. Not only did this violate the December 19, 2003 Order of the 
FACTS: Tunay Na Pagkakaisa ng mga Manggagawa sa Asia (TPMA) is a Secretary of Labor herself to petitioner corporation to submit its complete
legitimate labor organization, certified as the sole and exclusive bargaining audited financial statements, but this may have resulted to a wage award
agent of all regular rank and file employees of [petitioner corporation] Asia that is based on an inaccurate and biased picture of petitioner corporation's
Brewery, Incorporated (ABI), a company engaged in the manufacture, sale capacity to pay — one of the more significant factors in making a wage
and distribution of beer, shandy, glass and bottled water products.  award. 
Respondent union and petitioner had been negotiating for a new CBA for Petitioner corporation has offered no reason why it failed and/or refused to
the years 2003-2006 for 18 sessions and negotiations but to no avail due to submit its audited financial statements for the past five years relevant to
their differences on their respective positions on most items, particularly on this case. This only further casts doubt as to the veracity and accuracy of the
wages and other economic benefits.  unaudited financial statements it submitted to the Secretary of Labor.
Respondent union subsequently declared a deadlock and conducted a strike Verily, we cannot countenance this procedure because this could unduly
after filing a notice for one. Petitioner then petitioned the Secretary of Labor deprive labor of its right to a just share in the fruits of production and
to assume jurisdiction over the parties’ labor dispute, invoking Article 263 provide employers with a means to understate their profitability in order to
(g) of the Labor Code. In answer, Respondent union opposed the defeat the right of labor to a just wage.
assumption of jurisdiction, reasoning therein that the business of petitioner
corporation is not in dispensable to the national interest. 

In the meantime, the Secretary resolved the deadlock between the parties
concerning the dispute on the wages. The secretary granted wage increase
under the opposition of respondent contending that the ruling lacks
evidentiary proof to sufficiently justify the same. 

Innodata
Innodata Philippines, Inc., is engaged in the encoding/data conversion
business.Estrella G. Natividad and Jocelyn L. Quejada were employed as
formatters by Innodata Philippines, Inc.Innodata terminated their
employment on the ground that their 1yr employment contracts have
already expired.
The respondents believed that their job was necessary and desirable to the
usual business of the company which is data processing/conversion and that
their employment is regular pursuant to Article 280 of the Labor Code,they
filed a complaint for illegal dismissal and for damages as well as for
attorney’s fees against Innodata Phils., Incorporated.
LABOR ARBITER - in favor of respondentsCA- regular employees mga
respondents
whether the alleged fixed-term employment contracts are valid.General
rule: yes
When the circumstances of a case show that the periods were imposed to
block the acquisition of security of tenure, they should be struck down for
being contrary to law, morals, good customs, public order or public policy.
The language of the contract in dispute is truly a double-bladed scheme to
block the acquisition of the employee of tenurial security.The contract
provides for a three-month period during which petitioner has the right to
pre-terminate the employment for the "failure of the employees to meet
and pass the qualifications and standards set by the employer and made
known to the employee prior to" their employment. Thus, although
couched in ambiguous language, paragraph 7.4 refers in reality to a
probationary period.If the contract was really for a fixed term, the
[employer] should not have been given the discretion to dismiss the
[employee] during the one year period of employment for reasons other
than the just and authorized causes under the Labor Code. Settled is the
rule that an employer can terminate the services of an employee only for
valid and just causes which must be shown by clear and convincing
evidence.To avoid regularization, petitioner has again sought to resort
alternatively to probationary employment and employment for a fixed term.
7.4 The EMPLOYEE acknowledges that the EMPLOYER entered into this
Contract upon his express representation that he/she is qualified and
possesses the skills necessary and desirable for the position indicated
herein. Thus, the EMPLOYER is hereby granted the right to pre-terminate
this Contract within the first three (3) months of its duration upon failure of
the EMPLOYEE to meet and pass the qualifications and standards set by the
EMPLOYER and made known to the EMPLOYEE prior to execution hereof.
Failure of the EMPLOYER to exercise its right hereunder shall be without
prejudice to the automatic termination of the EMPLOYEE’s employment
upon the expiration of this Contract or cancellation thereof for other causes
provided herein and by law."
“Art. 1700. The relations between capital and labor are not merely
contractual. They are so impressed with public interest that labor contracts
must yield to the common good. Therefore, such contracts are subject to
the special laws on labor unions, collective bargaining, strikes and lockouts,
closed shop, wages, working conditions, hours of labor and similar
subjects.”The probationary period also allows an employer to terminate an
employee who is not doing well at their job or is otherwise deemed not
suitable for a particular position or any position.

MARCOPPER MINING CORPORATION v. NLRC, GR No. 103525, 1996-03-29
Facts:
On 23 August 1984, Marcopper Mining Corporation, a corporation duly
organized and existing under the laws of the Philippines, engaged in the
business of mineral prospecting, exploration and extraction, and private
respondent NAMAWU-MIF, a labor federation duly organized and...
registered with the Department of Labor and Employment (DOLE), to which
the Marcopper Employees Union (the exclusive bargaining agent of all rank-
and-file workers of petitioner) is affiliated, entered into a Collective
Bargaining Agreement (CBA) effective from 1 May 1984 until
30 April 1987.
Prior to the expiration of the aforestated Agreement, on 25 July 1986,
petitioner and private respondent executed a Memorandum of Agreement
(MOA) wherein the terms of the CBA, specifically on matters of wage
increase and facilities allowance, were modified
In compliance with the amended CBA, petitioner implemented the initial 5%
wage increase due on 1 May 1986.
On 1 June 1987, Executive Order (E.O.) No. 178 was promulgated mandating
the integration of the cost of living allowance under Wage Orders Nos. 1, 2,
3, 5 and 6 into the basic wage of workers, its effectivity retroactive to 1 May
1987.[5] Consequently,... effective on 1 May 1987, the basic wage rate of
petitioner's laborers categorized as non-agricultural workers was increased
by P9.00 per day.[6]
Petitioner implemented the second five percent (5%) wage increase due on
1 May 1987 and thereafter added the integrated COLA.[7]
Private respondent, however, assailed the manner in which the second
wage increase was effected.  It argued that the COLA should first be
integrated into the basic wage before the 5% wage increase is computed.[8]
Consequently, on 15 December 1988, the union filed a complaint for
underpayment of wages before the Regional Arbitration Branch IV, Quezon
City.
On 24 July 1989, the Labor Arbiter promulgated a decision in favor of the
union.
Petitioner appealed the Labor Arbiter's decision and on 18 November 1991
the NLRC rendered its decision sustaining the Labor Arbiter's ruling.
It is petitioner's contention that the basic wage referred to in the CBA
pertains to the "unintegrated" basic wage.  Petitioner maintains that the
rules on interpretation of contracts, particularly Art. 1371 of the New Civil
Code which states that:
Art. 1371. In order to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be principally considered.
should govern.
Siding with the petitioner, the Solicitor General opines that for the purpose
of complying with the obligations imposed by the CBA, the integrated COLA
should not be considered due to the exclusivity of the benefits under the
said CBA and E.O. No. 178.
Private respondent counters by asserting that the purpose, nature and
essence of CBA negotiation is to obtain wage increases and benefits over
and above what the law provides and that the principle of non-diminution
of benefits should prevail.
Issues:
what should be the basis for the computation of the CBA increase, the basic
wage without the COLA or the so-called "integrated" basic wage which, by
mandate of E.O. No. 178, includes the COLA.
Ruling: The purpose of E.O. No. 178 is to improve the lot of the workers covered by
the said statute. We are bound to ensure its fruition.
We rule for the respondents.
WHEREFORE, premises considered, the petition is hereby DISMISSED.
The principle that the CBA is the law between the contracting parties stands
strong and true.[17] However, the present controversy involves not merely Principles:
an interpretation of CBA provisions.  More importantly, it requires a
While the terms and conditions of the CBA constitute the law between the
determination of the effect of... an executive order on the terms and the
parties, it is not, however, an ordinary contract to which is applied the
conditions of the CBA.
principles of law governing ordinary contracts.  A CBA, as a labor contract
It is unnecessary to delve too much on the intention of the parties as to within the contemplation of Article
what they allegedly meant by the term "basic wage" at the time the CBA
1700 of the Civil Code of the Philippines which governs the relations
and MOA were executed because there is no question that as of 1 May
between labor and capital, is not merely contractual in nature but
1987, as mandated by E.O. No. 178, the basic wage of workers, or... the
impressed with public interest, thus, it must yield to the common good. As
statutory minimum wage, was increased with the integration of the COLA. 
such, it must be construed liberally rather than narrowly and... technically,
As of said date, then, the term "basic wage" includes the COLA.   This is what
and the courts must place a practical and realistic construction upon it,
the law ordains and to which the collective bargaining agreement of the
giving due consideration to the context in which it is negotiated and
parties must conform.
purpose which it is intended to serve.
Petitioner's arguments eventually lose steam in the light of the fact that
compliance with the law is mandatory and beyond contractual stipulation
by and between the parties; consequently, whether or not petitioner
intended the basic wage to include the COLA becomes... immaterial.  There
is evidently nothing to construe and interpret because the law is clear and
unambiguous.  Unfortunately for petitioner, said law, by some uncanny
coincidence, retroactively took effect on the same date the CBA increase
became effective. 

Therefore, there cannot be any doubt that the computation of the CBA
increase on the basis of the "integrated" wage does not constitute a
violation of the CBA.

What E.O. No. 178 did was exactly to integrate the COLA under Wage
Orders Nos. 1, 2, 3, 5 and 6 into the basic pay so as to increase the statutory
daily minimum wage.

Integration of monetary benefits into the basic pay of workers is not a new
method of increasing the minimum wage.

Philippine Long Distance Telephone Company (PLDT) v. National Labor
Relations Commission (NLRC)164 SCRA 671 (1988)
FACTS:
Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone
Company, was accused bytwo complainants of having demanded and
received from them the total amount of P3,800.00 in considerationof her
promise to facilitate approval of their applications for telephone installation.
Investigated and heard, shewas found guilty as charged and accordingly
separated from the service. She went to the Ministry of Labor
andEmployment claiming she had been illegally removed. Despite of her
being dismissed for cause, (as contendedby PLDT) the labor arbiter (from
NLRC) in his decision ruled that the complainant (herein private
respondent)must be given one month pay for every year of service
as financial assistance. The labor arbiter finds the same asequitable, taking
into consideration her long years of service to the company whereby she
had undoubtedlycontributed to the success of the company.NOTE: Marilyn
Abucay had served in the company for 10 years. Thus, she must be awarded
10 monthsseparation pay for every year of her service.
ISSUE:
Whether or not the award of separation pay for the private respondent is
just.
RULING:
NO. The rule embodied in the Labor Code is that a person dismissed for
cause as defined therein is notentitled to separation pay. The separation
pay, when it was considered warranted, was required regardless of the
nature or degree of the ground proved, be it mere inefficiency or something
graver like immorality ordishonesty. Separation pay shall be allowed as a
measure of social justice only in those instances where theemployee is
validly dismissed for causes other than serious misconduct or those
reflecting on his moralcharacter. Where the reason for the valid dismissal is,
for example, habitual intoxication or an offense involvingmoral turpitude,
like theft or illicit sexual relations with a fellow worker, the employer may
not be required togive the dismissed employee separation pay, or financial
assistance, or whatever other name it is called, on theground of social
justice. If the employee who steals from the company is granted separation
pay even as he isvalidly dismissed, it is not unlikely that he will commit a
similar offense in his next employment because hethinks he can expect a
like leniency if he is again found out. This kind of misplaced compassion is
not going to dolabor in general any good as it will encourage the infiltration
of its ranks by those who do not deserve theprotection and concern of the
Constitution.
Those who invoke social justice may do so only if their hands areclean and
their motives blameless and not simply because they happen to be poor.
 
We hold that the grant of separation pay in the case at bar is unjustified.
The private respondent hasbeen dismissed for dishonesty, as found by the
labor arbiter and affirmed by the NLRC and as she herself hasimpliedly
admitted. The fact that she has worked with the PLDT for more than a
decade, if it is to be consideredat all, should be taken against her as it
reflects a regrettable lack of loyalty that she should have
strengthenedinstead of betraying during all of her 10 years of service with
the company. If regarded as a justification formoderating the penalty of
dismissal, it will actually become a prize for disloyalty, perverting the
meaning of social justice and undermining the efforts of labor to cleanse its
ranks of all undesirables.

CEBU ROYAL PLANT (SAN MIGUEL CORPORATION), vs.
THE HONORABLE DEPUTY MINISTER OF LABOR and RAMON PILONES
FACTS:
Ramon Pilones, private respondent, was employed on February 16, 1978 on
a probationary period of employment for six (6) months with petitioner CRP.
After said period, he underwent medical examination for qualification as
regular employee but the results showed that he is suffering from PTB
minimal. Consequently, he was informed of the termination of his
employment by respondent since his illness was not curable within 6
months.
Pilones complained against his termination before the Ministry of Labor
which dismissed the same. The dismissal was reversed by the public
respondent who ordered the reinstatement and payment of back wages.
Granting reinstatement, the public respondent argues that Pilones was
already a permanent employee at the time of his dismissal and so was
entitled to security of tenure. The alleged ground for his removal, to wit,
“pulmonary tuberculosis minimal,” was not certified as incurable within six
months as to justify his separation and that the petitioner should have first
obtained a clearance, as required by the regulations then in force, for the
termination of his employment.
CRP claims that the private respondent was still on probation at the time of
his dismissal and so had no security of tenure. The dismissal was necessary
for the protection of the public health, as he was handling ingredients in the
processing of soft drinks which were being sold to the public.
ISSUE: Whether the dismissal was proper.
HELD: No. The dismissal was not proper. Under Article 282 of the Labor
Code, “an employee who is allowed to work after a probationary period
shall be considered a regular employee.” Pilones was already on permanent
status when he was dismissed on August 21, 1978, or four days after he
ceased to be a probationer. As such, he could validly claim the security of
tenure guaranteed to him by the Constitution and the Labor Code.
The petitioner claims it could not have dismissed the private respondent
earlier because the x-ray examination was made only on August 17, 1978,
and the results were not immediately available. That excuse is untenable.
We note that when the petitioner had all of six months during which to
conduct such examination, it chose to wait until exactly the last day of the
probation period.
The applicable rule on the ground for dismissal invoked against him is
Section 8, Rule I, Book VI, of the Rules and Regulations Implementing the
Labor Code which states that “the employer shall not terminate his
employment unless there is a certification by a competent public health
authority that the disease is of such nature or at such a stage that it cannot
be cured within a period of six (6) months even with proper medical
treatment.” The record does not contain the certification required by the
above rule. Hence, dismissal was illegal.
It is also worth noting that the petitioner’s application for clearance to
terminate the employment of the private respondent was filed with the
Ministry of Labor only on August 28, 1978, or seven days after his
dismissal. As the NLRC has repeatedly and correctly said, the prior clearance
rule (which was in force at that time) was not a “trivial technicality.” It
required “not just the mere filing of a petition or the mere attempt to
procure a clearance” but that “the said clearance be obtained prior to the
operative act of termination.
Although we must rule in favor of his reinstatement, this must be
conditioned on his fitness to resume his work, as certified by competent
authority.
**Another Doctrine under Sec4 of Labor Code on construction:
Concern for the lowly worker who, often at the mercy of his employers,
must look up to the law for his protection. Fittingly, that law regards him
with tenderness and even favor and always with faith and hope in his
capacity to help in shaping the nation’s future. It is error to take him for
granted. He deserves our abiding respect. How society treats him will
determine whether the knife in his hands shall be a caring tool for beauty
and progress or an angry weapon of defiance and revenge. The choice is
obvious, of course. If we cherish him as we should, we must resolve to
lighten “the weight of centuries” of exploitation and disdain that bends his
back but does not bow his head.
signatures. The following day, with the form apparently signed by Po,
respondent transmitted it to Purchasing Officer Lorena Paz in Taguig Main
Office. Paz processed the paper and found that some details in the CAPEX
form were left blank. She also doubted the genuineness of the signature of
Po, as appearing in the form. Paz then transmitted the CAPEX form to
Purchasing Manager Virgie Garcia and informed her of the questionable
signature of Po. Consequently, the request for the equipment was put on
hold due to Po's forged signature. However, due to the urgency of
purchasing badly needed equipment, respondent was ordered to make
another CAPEX form, which was immediately transmitted to the Purchasing
Department. 
Suspecting him to have committed forgery, respondent was asked to explain
in writing the events surrounding the incident. He vehemently denied the
alleged forgery. Respondent was, thereafter, suspended on April 21, 1999.
Subsequently, he received a Notice of Termination on May 20, 1999, for loss
of trust and confidence. 

20. CENTURY CANNING CORPORATION, RICARDO T. PO, JR. and AMANCIO Respondent filed a Complaint for illegal dismissal, non-payment of overtime
C. RONQUILLO, vs. VICENTE RANDY R. RAMIL  pay, separation pay, moral and exemplary damages and attorney's fees
against petitioner and its officers before the Labor Arbiter. LA Potenciano S.
G.R. No. 171630 : August 8, 2010  Canizares rendered a Decision dismissing the complaint for lack of merit.
PERALTA, J.:  Aggrieved by the LA's finding, respondent appealed to the National Labor
Relations Commission. Upon recommendation of LA Cristeta D. Tamayo,
FACTS:  who reviewed the case, the NLRC First Division set aside the ruling of LA
Petitioner Century Canning Corporation, a company engaged in canned food Canizares. The NLRC declared respondent's dismissal to be illegal and
manufacturing, employed respondent Vicente Randy Ramil in August 1993 directed petitioner to reinstate respondent with full backwages and
as technical specialist. Prior to his dismissal his job included the preparation seniority rights and privileges. It found that petitioner failed to show clear
of the purchase requisition (PR) forms and capital expenditure (CAPEX) and convincing evidence that respondent was responsible for the forgery of
forms, as well as the coordination with the purchasing department the signature of Po in the CAPEX form. 
regarding technical inquiries on needed products and services of petitioner's NLRC reversed itself and upheld LA Canizares' dismissal of his complaint.
different departments.  The CA ordered petitioner to reinstate respondent, without loss of seniority
On March 3, 1999, respondent prepared a CAPEX form for external fax rights and privileges, and to pay respondent full backwages from the time
modems and terminal server, per order of Technical Operations Manager his employment was terminated on May 20, 1999 up to the time of the
Jaime Garcia, Jr. and endorsed it to Marivic Villanueva, Secretary of finality of its decision. 
Executive Vice-President Ricardo T. Po, for the latter's signature. The CAPEX ISSUE: 
form, however, did not have the complete details and some required
W.O.N. MERE EXISTENCE OF A BASIS FOR BELIEVING THAT SUCH EMPLOYEE
HAS BREACHED THE TRUST AND CONFIDENCE OF HIS EMPLOYER SUFFICES
FOR HIS DISMISSAL.  breach of trust and founded on clearly established facts. The basis for the
HELD: 
The rule is that high respect is accorded to the findings of fact of quasi-
judicial agencies, more so in the case at bar where both the LA and the NLRC
share the same findings. The rule is not, however, without exceptions one of
which is when the findings of fact of the labor officials on which the
conclusion was based are not supported by substantial evidence. The same
holds true when it is perceived that far too much is concluded, inferred or
deduced from bare facts adduced in evidence. In the case at bar, the NLRC's
findings of fact upon which its conclusion was based are not supported by
substantial evidence, that is, the amount of relevant evidence, which a
reasonable mind might accept as adequate to justify a conclusion. 
Further, as correctly found by the NLRC, if respondent was the one who
forged the signature of Po in the CAPEX form, there was no need for him to
endorse the same to Villanueva and transmit it the next day. He could have
easily forged the signature of Po on the same day that he prepared the
CAPEX form and submitted it on the very same day to petitioner's main
office without passing through any officer of petitioner. 
The law mandates that 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 not
justified and, therefore, 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 labor laws and the Constitution.  environment. On the other hand, the payment releases the employer from
Lastly, while We have previously held that employers are allowed a wider
latitude of discretion in terminating the services of employees who perform
functions which by their nature require the employers' full trust and
confidence and the mere existence of basis for believing that the employee
has breached the trust of the employer is sufficient, this does not mean that
the said basis may be arbitrary and unfounded. The right of an employer to
dismiss an employee on the ground that it has lost its trust and confidence
in him must not be exercised arbitrarily and without just cause. Loss of trust
and confidence, to be a valid cause for dismissal, must be based on a willful
dismissal must be clearly and convincingly established, but proof beyond
reasonable doubt is not necessary. It must rest on substantial grounds and
not on the employer's arbitrariness, whim, caprice or suspicion; otherwise,
the employee would eternally remain at the mercy of the employer. There is
neither direct evidence nor substantial documentary evidence pointing to
respondent as the one liable for the forgery of the signature of Po. 
Respondent's illegal dismissal carries the legal consequences defined under
Article 279 of the Labor Code, that is, an employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights
and other privileges, and to the payment of his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent,
computed from the time his compensation was withheld from him up to the
time of his actual reinstatement. 
However, the Court finds that it would be best to award separation pay
instead of reinstatement, in view of the strained relations between
petitioner and respondent. Respondent was dismissed due to loss of trust
and confidence and it would be impractical to reinstate an employee whom
the employer does not trust, and whose task is to handle and prepare
delicate documents. 
Under the doctrine of strained relations, the payment of separation pay has
been considered an acceptable alternative to reinstatement when the latter
option is no longer desirable or viable. On the one hand, such payment
liberates the employee from what could be a highly oppressive work 
the grossly unpalatable obligation of maintaining in its employ a worker it
could no longer trust. 
In view of the foregoing, respondent is entitled to the payment of full
backwages, inclusive of allowances, and other benefits or their monetary
equivalent, computed from the date of his dismissal on May 20, 1999 up to
the finality of this decision, and separation pay in lieu of reinstatement
equivalent to one month salary for every year of service, computed from
the time of his engagement by petitioner on August 1993 up to the finality a. Once proven beyond reasonable doubt during the period of the approved
of the decision.  leave of absence that the faculty member shall engage himself in
employment outside the institution, the administration shall regard the
The case is, therefore, remanded to the Labor Arbiter for the purpose of
faculty member on leave as resigned;
computing the proper monetary award due to the respondent. 
b. The maximum length of leave of absence that may be applied for by the
WHEREFORE, the petition is DENIED. The Decision and Resolution of the
faculty member and granted by administration is twelve (12) months. If, at
Court of Appeals in CA- G.R. SP No. 86939, dated December 1, 2005 and
the lapse of the period, the faculty member fails to return for work, the
February 17, 2006, respectively, are AFFIRMED with MODIFICATION that
administration shall regard the faculty member as resigned.
the order of reinstatement is deleted, and in lieu thereof, Petitioner Century
Canning Corporation is DIRECTED to pay respondent separation pay.  RESPONDENT ALLEGED: that she intended to utilize the first semester of her
study leave to finish her masteral degree at the Philippine Women’s
University (PWU). Unfortunately, it did not push through so she took up an
Old Testament course in a school of religion and at the same time utilized
her free hours selling insurance and cookware to augment her family’s
income. However, during the second semester of her study leave, she
studied and passed 12 units of education subjects at the Golden Gate
Colleges in Batangas City. In response to the letters sent her by petitioner to
COLEGIO DE SAN JUAN DE LETRAN – CALAMBA, petitioner, justify her study leave, she submitted a certification from Golden Gate
vs. Colleges and a letter explaining why she took up an Old Testament course
BELEN P. VILLAS, respondent. instead of enrolling in her masteral class during the first semester.
FACTS: respondent Belen Villas was employed by the petitioner School as President and Rector of the School, Fr. Ramonclaro G. Mendez, O. P., wrote
high school teacher in September 1985. On May 15, 1995, she applied for a her, stating that her failure to enroll during the first semester was a
study leave for six months, from June to December 31, 1995. In a letter violation of the conditions of the study leave and that the reasons she
dated June 2, 1995, Mrs. Angelina Quiatchon, principal of the high school advanced for failure to enroll during the first semester were not acceptable
department, told Villas that her request for study leave was granted for one and thus:
school year subject to the following conditions:
In the first place, prudence dictates that you should have ascertained first
1. The requested study leave takes effect on June 5, 1995 and ends on that you are still eligible to study at PWU to finish your masteral degree
March 31, 1996; before applying and securing the approval of your leave by the School. In
2. The requested study leave involves no remuneration on the part of the the second place, you should have informed the School at once that you
School; could not enroll in the first semester so that your leave could have been
3. The documents that justify the requested study leave should be adjusted for only one-half (1/2) year. Thirdly, your engaging in some part-
submitted upon return on April 1, 1996; time business instead of studying in the first semester of your leave is
4. Faculty Manual – Section 40 Special Provisions on the Granting of Leave sufficient justification for the School to consider you as resigned under the
of Absence should be observed: Faculty Manual. And lastly, your failure to study in the first semester of your
study leave without informing the School beforehand constitutes deception,
to say the least, which is not a good example to the other teachers.
Voluntary Arbitrator Mayuga who found that respondent was illegally
dismissed. MR denied. CA affirmed, Hence, this petition.
ISSUE: whether or not respondent’s alleged violation of the conditions of
the study grant constituted serious misconduct which justified her
termination from petitioner School.
HELD: NO
Under the Labor Code, there are twin requirements to justify a valid
dismissal from employment: (a) the dismissal must be for any of the causes
provided in Article 282 of the Labor Code (substantive aspect) and (b) the
employee must be given an opportunity to be heard and to defend himself
(procedural aspect).7 The procedural aspect requires that the employee be
given two written notices before she is terminated consisting of a notice
which apprises the employee of the particular acts/omissions for which the
dismissal is sought and the subsequent notice which informs the employee
of the employer’s decision to dismiss him.
In the case at bar, the requirements for both substantive and procedural
aspects were not satisfied.
petitioner School argues that the conduct of respondent breached not only
the provisions of the study grant (which was a contractual obligation) but
also the Faculty Manual. Respondent was thus guilty of serious misconduct
which was a ground for termination.
Misconduct is improper or wrongful conduct. It is the transgression of some
established and definite rule of action, a forbidden act, a dereliction of duty,
willful in character, and implies wrongful intent and not mere error of
judgment.9 Under Article 282 of the Labor Code, the misconduct, to be a
just cause for termination, must be serious. This implies that it must be of
such grave and aggravated character and not merely trivial or unimportant.
The alleged infractions of the respondent could hardly be considered
serious misconduct:
1. Her alleged failure to report for work EXACTLY on April 1, 1996
(respondent reported on May 15, 1996) is not equivalent to “failure to
return for work,” a sanctionable offense under the Faculty Manual.
Although we give credence to petitioner’s argument that a private high
school teacher still has work at the end of the schoolyear – to assist in the
graduation preparations – and in the beginning of the school year – to assist
in the enrollment – such tasks cannot be considered a teacher’s main duties,
the failure to perform which would be tantamount to dereliction of duty or
abandonment.
2. With regard to her alleged failure to enroll during the first semester,
although we agree with the President and Rector, Fr. Mendez, that
respondent should have first ascertained whether she was still eligible to
study at the PWU before applying for a study leave,17 such lapse was more
of an error in judgment rather than an act of serious misconduct. If
respondent intended to use her study leave for other unauthorized
purposes, as petitioner would like us to believe, she would not have
enrolled at the Golden Gate Colleges during the second semester. Yet she
did, as borne out by the certification18 prepared by the Registrar of Golden
Gate Colleges.
3. Respondent did not violate the prohibition on engaging in employment
outside the school as specified in her study leave grant and as provided in
the Faculty Manual. Section 40 (a) of the Manual. The prohibition against
outside employment was enacted to prevent the teacher from using the
study leave period for unsanctioned purposes since the School pays the
teacher while pursuing further studies. That rationale was not violated by
respondent for the reason that her part-time activity of selling insurance
and cookware could not have prevented her in any way from studying and,
more importantly, she was not being paid by the School while on leave. How
did the school expect her and her family to survive without any income for
one whole year?
Petitioner also failed to comply with the procedural requirements for a valid
dismissal. Petitioner failed to give respondent the first notice which should
have informed the latter of the former’s intention to dismiss her. Petitioner
argues that it complied with this requirement as there were several
exchanges of communication between the School and respondent regarding
the cause of her termination. However, we find that these letters did not
apprise respondent that her dismissal was being sought by petitioner School
as said letters only required respondent to submit proof of enrollment.
PETITION DENIED.
________________________
NOTES:
 Examples of serious misconduct justifying termination, as held in some of
our decisions, include: sexual harassment (the manager’s act of fondling the
hands, massaging the shoulder and caressing the nape of a secretary);11
fighting within company premises;12 uttering obscene, insulting or offensive
words against a superior;13 misrepresenting that a student is his nephew
and pressuring and intimidating a co-teacher to change that student’s failing
grade to passing.
 respondent is not entitled to the six-month study leave and vacation pay,
the same was expressly waived by complainant when she signed conforme
to the letter dated June 2, 1995 approving her study leave which states
among others, to wit: ‘2. The requested study leave involves no
remuneration on the part of the school
Calalang vs. Williams  2. Whether the rules and regulations complained of infringe upon the
Facts:Maximo Calalang in his capacity as a private citizen and a taxpayer of
Manila filed a petition for a writ of prohibition against the respondents. 
It is alleged in the petition that the National Traffic Commission, in its
resolution of July 17, 1940, resolved to recommend to the Director of the
Public Works and to the Secretary of Public Works and Communications that
animal-drawn vehicles be prohibited from passing along Rosario Street
extending from Plaza Calderon de la Barca to Dasmariñas Street from 7:30
Am to 12:30 pm and from 1:30 pm to 530 pm; and along Rizal Avenue
extending from the railroad crossing at Antipolo Street to Echague Street
from 7 am to 11pm for a period of one year from the date of the opening of
the Colgante Bridge to traffic.  in order to secure the general comfort, health, and prosperity of the State.
The Chairman of the National Traffic Commission on July 18, 1940
recommended to the Director of Public Works with the approval of the
Secretary of Public Works the adoption of the measure proposed in the
resolution aforementioned in pursuance of the provisions of the
Commonwealth Act No. 548 which authorizes said Director with the
approval from the Secretary of the Public Works and Communication to
promulgate rules and regulations to regulate and control the use of and
traffic on national roads. 
On August 2, 1940, the Director recommended to the Secretary the
approval of the recommendations made by the Chairman of the National
Traffic Commission with modifications. The Secretary of Public Works
approved the recommendations on August 10, 1940. 
The Mayor of Manila and the Acting Chief of Police of Manila have enforced
and caused to be enforced the rules and regulation. As a consequence, all
animal-drawn vehicles are not allowed to pass and pick up passengers in the
places above mentioned to the detriment not only of their owners but of
the riding public as well. 
Issue: 1. Whether the rules and regulations promulgated by the
respondents pursuant to the provisions of Commonwealth Act NO. 548
constitute an unlawful inference with legitimate business or trade and
abridged the right to personal liberty and freedom of locomotion? 
constitutional precept regarding the promotion of social justice to insure
the well-being and economic security of all the people? 
Held: 1. No. The promulgation of the Act aims to promote safe transit upon
and avoid obstructions on national roads in the interest and convenience of
the public. In enacting said law, the National Assembly was prompted by
considerations of public convenience and welfare. It was inspired by the
desire to relieve congestion of traffic, which is a menace to the public safety.
Public welfare lies at the bottom of the promulgation of the said law and
the state in order to promote the general welfare may interfere with
personal liberty, with property, and with business and occupations.
Persons and property may be subject to all kinds of restraints and burdens
To this fundamental aims of the government, the rights of the individual are
subordinated. Liberty is a blessing which should not be made to prevail over
authority because society will fall into anarchy. Neither should authority be
made to prevail over liberty because then the individual will fall into slavery.
The paradox lies in the fact that the apparent curtailment of liberty is
precisely the very means of insuring its preserving. 

2. No. Social justice means the promotion of the welfare of all the people,
the adoption by the Government of measures calculated to insure economic
stability of all the competent elements of society, through the maintenance
of a proper economic and social equilibrium in the interrelations of the
members of the community, constitutionally, through the adoption of
measures legally justifiable, or extra-constitutionally, through the exercise
of powers underlying the existence of all governments on the time-honored
principles of salus populi est suprema lex. 

Social justice must be founded on the recognition of the necessity of

interdependence among divers and diverse units of a society and of the
protection that should be equally and evenly extended to all groups as a
combined force in our social and economic life, consistent with the
fundamental and paramount objective of the state of promoting health,
comfort and quiet of all persons, and of bringing about “the greatest good
to the greatest number.” 

THE PETITION IS DENIED WITH COSTS AGAINST THE PETITIONER.