Agabon v NLRC

Facts:

Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and
installing ornamental and construction materials.  It employed the petitioners Agabon as gypsum
board and cornice installers on January 2, 1992 until February 23, 1999 when they were dismissed for
abandonment of work. Hence, the agabons filed a case for illegal dismissal and payment of money claims

Argument of Agabon

The agabons allege that rivera homes refused to give them work assignments, unless they agree to the
“paykaw basis”. However, the agabons refused such because this would mean losing their benefits as
members of SSS.
Argument of Rivera homes
Rivera homes on the other hand, asserted that they were not illegally dismissed, but rather that they
abandoned their work. Rivera homes sent letters to the last known address of the agabons advising them
to report to work. Moreover, the manager also talked to them via telephone regarding a new assignment.
However, the agabons still did not report for work and it was found out that they had subcontracted to
perform installation work for another company.
LA Decision – illegal dismissal and pay money claims
NLRC – reversed decision of LA and found out there was indeed abandonment hence the agabons were
not entitled to backwages and separation pay.
CA – affirmed decision of NLRC but ordered payment of money claims
Issue: WON they were illegally dismissed
Ratio: Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It
is a form of neglect of duty, hence, a just cause for termination of employment by the employer.[15] 
For a valid finding... of abandonment, these two factors should be present:
(1) the failure to report for work or absence without valid or justifiable reason; and
(2) a clear intention to sever employer-employee relationship, with the second as the more determinative
factor which is manifested by... overt acts
*In the case, subcontracting for another company was an overt act from the agabons manifesting to sever
their employer and employee relationship with rivera homes. Hindi naman to first time, nareprimand na
sila date kaso hindi sila nakinig
HENCE, THE AGABONS WERE HELD TO HAVE ABANDONED THEIR WORK AND THEIR DISMISSAL
WAS UPON A JUST CAUSE.
An employee who is clearly guilty of conduct violative of Article 282 should not be protected by the Social
Justice Clause of the Constitution. Social Justice should only be used to correct an injustice.
Social Justice is based on the understanding that there is an interdependence among diverse units in the
society. Given the fact that there is interdependence, there is a need to balance the rights and welfare of both
the employee and employer. That is why justice must not only be tilted towards the towards the employee just
because that is what is mandated by the constitution, but rather, justice should be served equally and evenly
among them.

As stated in the case, Justice in every case should only be for the deserving party. .
In the case at hand, wherein, the employee was dismissed for a just case, pero the employer failed to comply
with the notice requirement, anong damages meron dapat si employee?
Entitled ba ang mga nadismiss under just cause sa backwages? NO J. Tinga, disagrees with the serrano
ruling that employees terminated for just cause are to be paid backwages from the time employment was
terminated "until it is determined that the termination is for just cause because the failure to hear him before he is
dismissed renders the termination of his employment without legal effect.
How bout separation pay? Entitled ba ang mga nadismiss for just cause? NO. An employee whose
employment is terminated for a just cause is not entitled to the payment of separation benefits. 65 Separation pay is
traditionally a monetary award paid as an alternative to reinstatement
BASIS: Section 7, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code, "[t]he separation from
work of an employee for a just cause does not entitle him to the termination pay provided in the Code."
APPLYING IN THE CASE ENTITLED BA MGA AGABONS SA SEPARATION PAY? NO.  the Court has in the past
authorized the award of separation pay for duly terminated employees as a measure of social justice, provided that
the employee is not guilty of serious misconduct reflecting on moral character. 68 This doctrine is inapplicable in this
case, as the Agabons are guilty of abandonment, 
The award of separation pay as a measure of social justice has no statutory basis, but clearly emanates from the
Court's so-called "equity jurisdiction." BUT HINDI MO RIN PWEDENG APPLY ANG EQUITY JURISDICTION.
BECAUSE, DAPAT MAG yield to positive rules which pre-empt and prevail over such persuasions MUNA.
View ni J Tinga sa Social Justice: Social justice should be the aspiration of all that we do, yet I think it the more
mature attitude to consider that it ebbs and flows within our statutes, rather than view it as an independent source of
funding.
The proper legal basis for holding the employer liable for monetary damages to the employee dismissed for
just cause is the Civil Code. The award of damages should be measured against the loss or injury suffered
by the employee by reason of the employer's violation or, in case of nominal damages, the right vindicated
by the award. This is the proper paradigm authorized by our law, and designed to obtain the fairest possible
relief.
Asia Brewery Inc

ASIA BREWERY, INC., Petitioner, 

vs.
TUNAY NA PAGKAKAISA NG MGA MANGGAGAWA SA ASIA (TPMA), Respondent.

FACTS:Respondent union Tunay Na Pagkakaisa ng mga Manggagawa sa Asia (TPMA) yung labor org na
bargaining agent ng mga regular na R&F ng ABI.

They were negotiating for a new CBA kase nagexpire n yung luma but they were not able to settle their differences
regarding wages and other economic benefits. So yung union, declared a deadlock and filed notice of strike with
NLRC.

SI ABI pinetition nya si DOLE to assume jurisdiction. Kaso the union disagreed stating na hindi naman daw clothe
with national interest yung business ni ABI. The union filed a petition for injunction with the CA para ienjoin from the
case si DOLE Sec.

Later on, DOLE Sec resolved the deadlock and granted the ffg awards:

(1) WAGE INCREASES as follows:

First Year = ₱18.00

Second Year = 15.00
Third Year = 12.00

Total = ₱45.00

(2) HEALTH CARE (HMO)

₱1,300 premium to be shouldered by Asia Brewery, Inc., for each covered employee and ₱1,800 contribution
for each Union member-dependent.

The parties signed the CBA. Subsequently, the union filed again a petition for certiorari assailing the arbitral
award and imputing grave abuse of discretion upon the public respondent.

Argument of respondent:

*The respondent union moved for a reconsideration of the decision on the ground that the ruling lacks
evidentiary proof to sufficiently justify the same.

* arbitral award and imputing grave abuse of discretion upon the public respondent.

Argumemt ni ABI

*The DOLE Sec required ABI to produce to the former, audited FS for the last 5 years. However, they
submitted an unaudited FS. Despite the FS being unaudited, ABI contents na duly certified and signed naman
by their CFO. Also, the same FS was the one submitted to various govt agencies. Furthermore, the union did
not object during the proceedings regarding the unaudited FS. Hence, it should be considered as a substiantial
compliance by ABI.

*hindi lang naman daw yung FS ung basis sa award, CBA history, costing of the proposals, and wages in other
similarly situated bargaining units were considered
Issue: WON the awards granted by the Sec Labor gravely was reasonable in light of the parties' positions and
the evidence they presented thus constituting no grave abuse of discretion on her part

Held:No. Secretary of Labor gravely abused her discretion in making the subject wage award. The appellate
court, thus, correctly remanded this case to the Secretary of Labor for the proper determination of the wage
award which should utilize , the audited financial statements of petitioner corporation and state with sufficient
clarity the facts and law on which the wage award is based.

Ratio: collective bargaining dispute such as this one requires due consideration and proper balancing of the
interests of the parties to the dispute and of those who might be affected by the dispute.

Usually dapat based sa the bargaining history of the company, the trends and amounts of arbitrated and
agreed wage awards and the company's previous CBAs, and industry trends in general. HINDI LANG YUNG
CAPACITY TO PAY NI EMPLOYER ANG ICOCONSIDER.

What did the Sec of DOLE do? In this case, what the Sec of Labor used as a measure was the middle
ground approach. Kaso sbi ni court hindi ito ung best way, kase play safe method sya. Its merely finding the
midway point between the demands of the company and the union, and "splitting the difference" is a simplistic
solution that fails to recognize that the parties may already be at the limits of the wage levels they can afford

* the Secretary of Labor failed to indicate the actual data upon which the wage award was based

YUNG FS na unaudited na ginamit na basis ni Sec. MALI. Because, such evidence is self-serving and
inadmissible

Effect ng unaudited fs: resulted to a wage award that is based on an inaccurate and biased picture of
petitioner corporation's capacity to pay — one of the more significant factors in making a wage award

*Wala naman inoffer na dahilan si ABI bakit hindi sya nakapagproduce ng audited FS.

IMPORTANCE OF COMPLYING WITH THE PROCEDURE OF SUBMITTING AUDITED FS: TO NOT unduly
deprive labor of its right to a just share in the fruits of production29 and TO PREVENT employers IN
UNDERSTATING their profitability in order to defeat the right of labor to a just wage
 INNODATA PHILIPPINES, INC. vs. JOCELYN L. QUEJADA-LOPEZ and ESTELLA G.
NATIVIDAD-PASCUAL
Facts:

Innodata Philippines, Inc., is engaged in the encoding/data conversion business. Natividad and Quejada were
employed as formatters. from March 4, 1997, until their separation on March 3, 1998.

Natividad and Quejada filed a case for illegal dismissal and for damages.

Argument of Natividad and Quejada:

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

argument ni innodata:

respondents’] employment contracts expired, for [these were] only for a fixed period of one (1) year.

contends that the regularity of the employment of respondents does not depend on whether their task may be
necessary or desirable in the usual business of the employer. What is stated in their contracts is 1 yr so 1 yr
lang sila.

*hindi daw pwedeng magemploy si company ng matagalan na employees kase puro job orders lang clients
nya

avers that the present employment contracts it entered into with respondents no longer contain the so-called
"double-bladed" provisions previously found objectionable by the Court.

Issue: WON the said employees can be dismissed upon expiration of their fixed term contract

Held: No

Ratio: 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.11

The pertinent provision in the contract reads:

"TERM/DURATION

1. The EMPLOYER hereby employs, engages and hires the EMPLOYEE, and the EMPLOYEE hereby
accepts such appointment as FORMATTER effective March 04, 1997 to March 03, 1998, a period of
one (1) year.

xxxxxxxxx

"TERMINATION

7.1 This Contract shall automatically terminate on March 03, 1998 without need of notice or demand.

xxxxxxxxx
 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."15 (Emphasis supplied)

Hence, from the aforementioned provisions, it can be understood na, (2) yung periods involved. Yung 3 month
period na pwede iterminate si employee when “"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.” Tsaka ung
right ni employer na iterminate si employee upon expiration of the contract
Effect ng contract sa security of tenure: double bladed scheme sya ni employer kase may (2) ways sya kung
kelan pwedeng iterminate si employee.
"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. 
What is the nature of the employment contract:

a contract of employment is impressed with public interest. For this reason, provisions of applicable statutes
are deemed written into the contract. Hence, the "parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply contracting with each other."19 Moreover,
in case of doubt, the terms of a contract should be construed in favor of labor.

Anong sabi ni court dun sa reason ni ABI na puro job orders lang sya hence, hindi sya pwedeng maghire ng matagal na
employees?

- Being inherent in any enterprise, this entrepreneurial risk may not be used as an excuse to circumvent labor
laws; otherwise, no worker could ever attain regular employment status.
Marcopper Mining Corp

Facts:

Marcopper Mining Corp entered into a CBA with private respondent NAMAWU-MIF, a labor federation to which
the Marcopper Employees Union is affiliated with.

Sec. 1, Art. V of the said Collective Bargaining Agreement provides:

Sec. 1. The COMPANY agrees to grant general wage increase to all employees within the
bargaining unit as follows:

Increase per day on

Effectivity the Basic Wage

May 1, 1985 5%
May 1, 1986 5%

It is expressly understood that this wage increase shall be exclusive of any increase in the
minimum wage and/or mandatory living allowance that may be promulgated during the life of
this Agreement. 2

Bago yung expiration, Marcopper and NAMAWU-MIF executed a MOA that modified the terms of the CBA
which now read:

1. The COMPANY hereby grants a wage increase of 10% of the basic rate to all employees and
workers within the bargaining units (sic) as follows.

(a) 5% effective May 1, 1986.

This will mean that the members of the bargaining unit will get an effective increase of 10% from
May 1, 1986.

(b) 5% effective May 1, 1987.

2. The COMPANY hereby grants an increase of the facilities allowance from P50.00 to P100.00 per month
effective May 1, 1986

So, Marcopper implemented the first 5% increase. Thereafter, E.O 178 was passed which mandated the
integration of the cost of living allowance into the basic wage of workers, its effectivity retroacts to May 1 1987.
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.

Marcopper implemented the second 5% increase and then thereafter added the integrated COLA. Nagreklamo
na si respondent sabi nya daoat inadd daw muna yung COLA tapos saka nagwage increase na 5%

the union filed a complaint for underpayment of wages before the Regional Arbitration Branch IV, Quezon
City.

Marcopper argument:

It is petitioner's contention that the basic wage referred to in the CBA pertains to the "unintegrated" basic
wage.
it insists that what is involved here is the amended CBA which is essentially a contract between private
persons

Respondent argument:

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.

LA – favored the union

NLRC – sustained LA ruling

Issue: WON the wage increase should be based on the basic wage without the COLA or the so-called
"integrated" basic wage which, by mandate of E.O. No. 178, includes the COLA.

Held: It should be based on the "integrated" basic wage which, by mandate of E.O. No. 178, includes the
COLA.

Ratio: As of the the date of effectivity of the wage increase, the law mandates that the term "basic
wage" includes the COLA. This is what the law ordains and to which the collective bargaining agreement of the
parties must conform. 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

While the terms and conditions of the CBA constitute the law between the parties, it is not, however, an
ordinary contract to which is applied the principles of law governing ordinary contracts. A CBA, as a labor
contract within the contemplation of Article 1700 of the Civil Code of the Philippines which governs the
relations between labor and capital, is not merely contractual in nature but impressed with public
interest, thus, it must yield to the common good. As such it must be construed liberally rather than narrowly
and technically, and the courts must place a practical and realistic construction upon it, giving due
consideration to the context in which it is negotiated and purpose which it is intended to serve

petitioner has lost sight of is the avowed policy of the State, enshrined in our Constitution, to accord utmost
protection and justice to labor, a policy, we are, likewise, sworn to uphold

When conflicting interests of labor and capital are to be weighed on the scales of social justice, the heavier
influence of the latter should be counter-balanced by sympathy and compassion the law must accord the
underprivileged worker. (UNG INFLUENCE NA MERON SI EMPLOYER AY COUNTER BALANCED NG
SYMPATHY AND COMPASSION TOWARDS THE UNDERPRIVILEGED WORKER)

Any doubt concerning the rights of labor should be resolved in its favor pursuant to the social justice policy.

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.
PLDT V NLRC

Facts:

Marilyn Abucay was a traffic operator at PLDT. She was accused of 2 complainants who averred that she
promised the offer that she would help facilitate their application for tel installation for the price of P3,800.

She was investigated and found guilty, thereafter, separated from service. Marilyn, filed with Ministry of Labor
and Employment and filed a complaint for illegal dismissal. However, the complaint was dismissed for lack of
merit.

The parties appealed to the NLRC, but the latter affirmed in toto the decision of ministry of labor.

The petitioner, however, is now before us to question the affirmance of the above- quoted award as having
been made with grave abuse of discretion BECAUSE of the award of financial assistance to the employee.

The said employee has been awarded financial assistance equivalent to ten months pay corresponding to her
10 year service in the company despite her removal for cause

Argument of PLDT:

an employee dismissed for cause is entitled to neither reinstatement nor backwages and is not allowed any
relief at all because his dismissal is in accordance with law.

Marilyn is in effect rewarded rather than punished for her dishonesty, and without any legal authorization or
justification. The award is made on the ground of equity and compassion, which cannot be a substitute for law.
Moreover, such award puts a premium on dishonesty and encourages instead of deterring corruption.

RESPONDENT NLRC ARGUMENT:

The grant of financial assistance is not intended as a reward for her offense but merely to help her for the loss
of her employment after working faithfully with the company for ten years

the Solicitor General cites the cases of Firestone Tire and Rubber Company of the Philippines v. Lariosa  6 and
Soco v. Mercantile Corporation of Davao, 7 where the employees were dismissed for cause but were
nevertheless allowed separation pay on grounds of social and compassionate justice.

Issue: WON the grant of separation pay is justified

Held: the grant of separation pay in the case at bar is unjustified. The private respondent has been dismissed
for dishonesty, as found by the labor arbiter and affirmed by the NLRC and as she herself has impliedly
admitted

Ratio: The court has cited several cases where it allowed the payment of separation pay despite the employee
being terminated for a just case. Such were considered the exceptions to the rule that employees dismissed for
a just cause are not allowed the payment of separation pay. It can be seen that such award was based on
equity. It has been defined as the justice outside of the law. It is grounded on the precepts of conscience and
not on any positive sanction of law. Hence, it cannot prevail against the expressed provision of the labor laws
allowing dismissal of employees for cause and without any provision for separation pay.

The benediction of compassion was made to cover a multitude of sins, as it were, and to justify the helping
hand to the validly dismissed employee whatever the reason for his dismissal. This policy should be re-
examined. It is time we rationalized the exception, to make it fair to both labor and management, especially to
labor.

There should be no question that where it comes to such valid but not iniquitous causes as failure to comply
with work standards, the grant of separation pay to the dismissed employee may be both just and
compassionate, particularly if he has worked for some time with the company EX; WORKING MOTHER IS
LAGING ABSENT KASE KAILANGAN ALAGAAN UNG ANAK NYA TAPOS MAY S.P PA DIN.

Under these and similar circumstances, however, the award to the employee of separation pay would
be sustainable under the social justice policy even if the separation is for cause.

But where the cause of the separation is more serious than mere inefficiency, the generosity of the law must
be more discerning.

Rule now:

We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances
where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his
moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense
involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be
required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is
called, on the ground of social justice

Effect of still giving S.P regardless of cause:

A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than punishing the
erring employee for his offense

Purpose ng social justice:

The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the
underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for
the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an
undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels any more than can equity
be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their
hands are clean and their motives blameless and not simply because they happen to be poor. This great policy
of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the
workers who have tainted the cause of labor with the blemishes of their own character.

The fact that she has worked with the PLDT for more than a decade, if it is to be considered at all, should be
taken against her as it reflects a regrettable lack of loyalty that she should have strengthened instead of
betraying during all of her 10 years of service with the company. If regarded as a justification for moderating
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 v Minister of Labor

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.

It was found out that The six-month period of probation started from the said date of appointment and so
ended on August 17, 1978, but it is not shown that the private respondent's employment also ended then; on
the contrary, he continued working as usual. Under Article 282 of the Labor Code, "an employee who is
allowed to work after a probationary period shall be considered a regular employee." Hence, Pilones was
already on permanent status when he was dismissed on August 21, 1978, or four days after he ceased to be a
probationer.

Moreover, there is also a proof that was first hired not on Feb 17 1978 but earlier, 1977. Evidenced by the
1977 withholding tax statement issued by CRP to the employee.

Argument of Ministry of Labor:

Ramon was already a permanent employee when he was terminated because of "pulmonary tuberculosis
minimal” which was not certified as incurable within six months as to justify his separation.
Cebu royal plant should have first obtained a clearance for the termination of Ramon

Argument of Cebu:
*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
*Ramon was only a pro-b employee when he was terminated hence walang security of tenure.
*His dismissal was necessary for the protection of public health as he was handling ingredients in the
processing of soft drinks which were being sold to the public
*Hence, reinstatement should not be allowed.

ISSUE: WON the Ramon was a regular employee at the time of his dismissal hence, could validly claim
security of tenure

HELD: whether his employment began on February 16, 1978, or even earlier as he claims, the private
respondent was already a regular employee when he was dismissed on August 21, 1978. As such, he could
validly claim the security of tenure guaranteed to him by the Constitution and the Labor Code

Ratio: Rule:

Section 8, Rule I, Book VI, of the Rules and Regulations Implementing the Labor Code reading as follows:

Sec. 8. Disease as a ground for dismissal. — Where the employee suffers from a disease and
his continued employment is prohibited by law or prejudicial to his health or to the health of his
co-employees, 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. If the
disease or ailment can be cured within the period, the employer shall not terminate the
employee but shall ask the employee to take a leave. The employer shall reinstate such
employee to his former position immediately upon the restoration of his normal health.
Bali need ng certification from a COMPETENT PUBLIC AUTHORITY – which CRP did not have kase ung ed
cert was only issued by its own physician and merely stated the employees disease and no more.

CRP was not also able to apply for a clearance on time because CRP only filed with ministry of labor for such
clearance on August 28, 7 days after dismissal. the prior clearance rule 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. 7

We agree that there was here an attempt to circumvent the law by separating the employee after five months'
service to prevent him from becoming a regular employee, and then rehiring him on probation, again without
security of tenure. WE CANNOT PERMIT THIS.

On the other hand, we have also the health of the public and of the dismissed employee himself to consider.
Hence, 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.

. 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.

We ALSO 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. In the light of such delay, its protestations now
that reinstatement of Pilones would prejudice public health cannot but sound hollow and hypocritical. By its
own implied admission, the petitioner had exposed its customers to the employee's disease because of its
failure to examine him before entrusting him with the functions of a "syrup man."
CENTURY CANNING CORPORATION, RICARDO T. PO, JR. AND AMANCIO C. RONQUILLO, PETITIONERS, VS.
VICENTE RANDY R. RAMIL, RESPONDENT.

In case of doubt, cases should be resolved in favor of labor, pursuant to the social justice policy of labor laws and the Constitution
Facts: 

Century, employed Ramil as a technical specialist. His job included the preparation of PR forms and CAPEX forms as well as the
coordination with the purchasing dept.

March 3 1999, Ramil prepared a CAPEX form for external fax modems and terminal server by order of the technical manager. Ramil
endorsed it to Marivic (Sec nf Exec VP na si Po.) for Po’s signature. CAPEX form, however, did not have the complete
details3 and some required signatures.4 The following day, with the form apparently signed by Po, respondent
transmitted it to Purchasing Officer.
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 any participation in the alleged forgery. Ramil was then suspended and on
May 20, 1999 received notice of termination.
respondent, on May 24, 1999, filed a Complaint for illegal dismissal, non-payment of overtime pay, separation
pay, moral and exemplary damages and attorney's fees against petitioner
LA – dismissed the complaint
NLRC - declared respondent's dismissal to be illegal and directed petitioner to reinstate respondent with full
backwages and seniority rights and privileges. CENTURY FILED MR AND LRC REVERSED ITS DECISION
RAMIL FILED PETITION FOR CERTIORARI WITH CA and such rendered judgement in favor of ramil
Century filed MR and CA denied, hence this petition in court now.
Argument of Century:
respondent is the forger of the signature of Po, as he is the custodian and the one who prepared the CAPEX
form; the forged signature was already existing when he submitted the same for processing
may motive daw si respondent sa pagforge
respondent has the propensity to deviate from the Standard Operating Procedure as shown by the fact that the
CAPEX form, with the forged signature of Po, is not complete in details and lacks the required signatures;
respondent has the propensity to deviate from the Standard Operating Procedure as shown by the fact that the
CAPEX form, with the forged signature of Po, is not complete in details and lacks the required signatures;
mere existence of a basis for believing that respondent employee has breached the trust and
confidence of his employer suffices for his dismissal

his past violations of company rules and regulations are more than sufficient grounds to justify his
termination from employment.

Argument of Ramil:
petitioner failed to present clear and convincing evidence to prove his participation in the charge of forgery nor
any damage to the petitioner.

Issue: WON the evidence presented by Century is clear and convincing in proving the charge of
forgery against him, thus rendering his dismissal legal.

Held: record of the case is bereft of evidence that would clearly establish Ramil's involvement in the forgery.

Ratio: 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.

Rule: 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.

Why was the evidence presented by Century not clear and convincing?

In the termination letter addressed to Ramil, the information which petitioner allegedly obtained from the
"persons concerned" was not backed-up by any affidavit or proof. Petitioner did not even bother to name these
resource persons.

Petitioner based respondent's dismissal on its unsubstantiated suspicions and conclusion that since
respondent was the custodian and the one who prepared the CAPEX forms, he had the motive to commit the
forgery

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.

In the case at bar, there is neither direct evidence nor substantial documentary evidence pointing to
respondent as the one liable for the forgery of the signature of Po.

How bout dun sa sinasabi ni Century na the mere existence of basis for believing that the employee
has breached the trust of the employer is sufficient?

Court said na this does not mean na 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.19 Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful
breach of trust20 and founded on clearly established facts. The basis for the dismissal must be clearly and
convincingly established, but proof beyond reasonable doubt is not necessary.21 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.

How bout sa sinasabi ni Century na valid ang dismissal because of prior tardiness in work?

such previous offense may be used as valid justification for dismissal from work only if the infractions are
related to the subsequent offense upon which the basis of termination is decreed.25 His previous offenses were
entirely separate and distinct from his latest alleged infraction of forgery. Hence, the same could no longer be
utilized as an added justification for his dismissal.
LIBERAL CONSTRUCTION IN FAVOR OF LABOR

COLEGIO DE SAN JUAN DE LETRAN – CALAMBA, petitioner, 

vs.
BELEN P. VILLAS, respondent.

FACTS:

respondent Belen Villas was employed by the petitioner School as high school teacher in September 1985. On May 15,
1995, she applied for a study leave for six months. The principal of the high school department, told Villas that her request
for study leave was granted for one school year subject to the following conditions:

1. The requested study leave takes effect on June 5, 1995 and ends on March 31, 1996;

2. The requested study leave involves no remuneration on the part of the School;

3. The documents that justify the requested study leave should be submitted upon return on April 1, 1996;

4. Faculty Manual – Section 40 Special Provisions on the Granting of Leave of Absence should be observed:

a. Once proven beyond reasonable doubt during the period of the approved leave of absence that the faculty
member shall engage himself in employment outside the institution, the administration shall regard the faculty
member on leave as resigned;

However, yung masteral degree nya sa PWU did not push thru 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.

During the 2nd sem of her study leave, she studied and passed 12 units of education subjects at the Golden
Gate Colleges. she submitted a certification from Golden Gate Colleges and a letter explaining why she took
up an Old Testament course instead of enrolling in her masteral class during the first semester.

The president and rector of the school replied to her letter and stated that her failure to enroll during the first
semester was a violation of the conditions of the study leave and that the reasons she advanced for failure to
enroll during the first semester were not acceptable

Her case was referred to the grievance committee but they could not reach a decision.

The case was referred for a voluntary arbritation. Respondent then filed a case for illegal dismissal. VA
Mayuga who found that respondent was illegally dismissed. petitioner filed a petition for review with the Court
of Appeals. This was denied. Thus, this petition for review

Colegio argument:

respondent violated the following conditions of her study leave:

(a) she failed to report for work on April 1, 1996, the day after the lapse of her leave period, which was violative
of Section 40 of the Faculty Manual;

(b) she failed to submit proof of her studies during the first semester of her leave period, suggesting that she
was not enrolled during this period; and

(c) she engaged in employment outside the School.

IN SUM: conduct of respondent breached not only the provisions of the study grant, but also the Faculty
Manual. Respondent was thus guilty of serious misconduct which was a ground for termination.
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

RATIO: Misconduct is improper or wrongful conduct. willful in character, and implies wrongful intent and not
mere error of judgment

Rule on Misconduct:

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.

Examples of Misconduct:

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.14

With regards dun sa failure to work on April 1, what did the court say?

she did in fact report for work on April 1, 1996 and that she was in fact enrolled during the first semester.
Assuming arguendo that she did fail to report for work on April 1, 1996 and enroll during the first semester, the
most respondent could be charged with was simple misconduct. In both instances, there was evidence of
substantial compliance by respondent.

Her alleged failure to report for work exactly on April 1, 1996 is not equivalent to "failure to return for work," a
sanctionable offense under the Faculty Manual. , petitioner failed to establish that there was a distinct and
definite assignment that needed to be done personally by respondent

there is no disagreement that respondent reported for work on May 15, 1996 at which time petitioner School
could have asked her to assist in the enrollment period.

At most, respondent failed to help out during the preparations for graduation and this, to us, was not a
significant reason for terminating or dismissing her from her job.

With regard to the alleged failure to enroll sa first sem:

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

with regard dun sa employment:

Faculty Manual. Section 40 (a) of the Manual19 states:

a. Once proven beyond reasonable doubt during the period of the approved leave of absence that the
faculty member shall engage himself in employment outside the institution, the administration shall
regard the faculty member on leave resigned. (Emphasis supplied)

We find the provision of the Faculty Manual ambiguous as the term "employment" connotes a number of
meanings. Employment in its general sense connotes any work or service rendered in exchange for money.
The loose connotation of employment may therefore cover jobs without an employer-employee relationship.
petitioner School drafted the said policy, the term "employment" should be strictly construed against
it.20 Moreover, it is a settled rule that in controversies between a laborer and his master, doubts reasonably
arising from the evidence, or in the interpretation of agreements and writings should be resolved in the
former’s favor

act of respondent in selling insurance and cookware was not the "employment" prohibited by the Faculty
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
Brew Master Intl

Facts:

Private respondent, NAFLU, IS A LABOR UNION to which the complainant is a member of

Estrada was employed by Brew Master as a route helper with the daily wage of 119.00. For a period of 1 month, Estrada
went on absence w/o permission. Brew Master sent a memo to Estrada stating that the latter explain why no
disciplinary action should be taken against him.

Estrada explained that he took his children to Samar because his wife had left them. He was not able to send a telegram
because he had no money left. The money that he had was used to buy medicines and Estrada had debts still to pay.

Brew Master found estradas reasons un acceptable and issued a notice of termination. The basis was abandonment of
work because as stated in their company rules and regulations “absence without permission for six (6) consecutive
working days is considered abandonment of work.”

NAFLU contention:

Dismissal was w/o just cause and the penalty was too severe

respondent should have taken into consideration complainant’s length of service and as a first offender, a penalty less
punitive will suffice

YUNG IMMEDIATE NA immediate filing of a complaint for illegal dismissal verily indicated that he never intended to
abandon his work

invoked compassion in the application of sanctions, as dismissal from employment brings untold hardship and sorrows
on the dependents of the wage earners.

Brew Master argument:

The cause for dismissal was allowed by their company rules and regulation

act of complainant in absenting from work for one (1) month without official leave is deleterious to the business of
respondent; that it will result to stoppage of production

NLRC committed grave abuse of discretion in ordering complainant’s reinstatement, which in effect countenances the
reinstatement of an employee who is found guilty of "excessive" absences without prior approval

that it was deprived of its prerogative to enforce them; and that complainant’s reinstatement would adversely affect its
business and send the wrong signals to its employees.

LA – dismissed the complaint

Complainant appealed to the NLRC - and the latter held that complainant’s dismissal was invalid and declared that
Estrada be reinstated

Issue: WON Estrada’s dismissal was valid on the ground that it was as considered abandonment based on the company
rules and regulations

Held: No. complainant’s "prolonged" absence without approval does not fall within the definition of abandonment and
that his dismissal was unjustified

Ratio:

complainant’s absence was precipitated by a grave family problem as his wife unexpectedly deserted him and
abandoned the family. Considering that he had a full-time job, there was no one to whom he could entrust the children
and he was thus compelled to bring them to the province. It would have been extremely difficult for him to have been
husband and wife/father and mother at the same time to the children in the metropolis. He was then under emotional,
psychological, spiritual and physical stress and strain. The reason for his absence is, under these circumstances, justified.
While his failure to inform and seek petitioner’s approval was an omission which must be corrected and chastised, he
did not merit the severest penalty of dismissal from the service.

Moreover, complainant had no intention of severing the employee and employer relationship which is an essential
element for abandonment kase agad syang nagfile ng case for illegal dismissal. Also nagcomply naman sya sa memo
nung pinagexplain sya sa absence nya.

Basis ni Brew Master: yung rules and regulations lang

Tam aba basis ni Brew Master? No

petitioner’s Rules and Regulations on continuous, unauthorized absences was wielded with undue haste resulting in a
deprivation of due process, thus not allowing for a determination of just cause or abandonment. In this light, petitioner’s
dismissal was illegal

Doctrine:

While the employer is not precluded from prescribing rules and regulations to govern the conduct of his employees,
these rules and their implementation must be fair, just and reasonable.

Constitution looks with compassion on the workingman and protects his rights not only under a general statement of a
state policy, 21 but under the Article on Social Justice and Human Rights, 22 thus placing labor contracts on a higher
plane and with greater safeguards. Verily, relations between capital and labor are not merely contractual. They are
impressed with public interest and labor contracts must, perforce, yield to the common good
Leyte Geothermal Power

Facts:

PNOC-EDC is a GOCC engaged in the utilization, distribution of energy sources like geothermal energy. The company had
a project in Leyte which provided power and electricity not only in Region 7 and 8 but also in some parts of Luzon.

In accordance with the project, the company hired many employees on a contractual basis and their employment will
automatically expire upon completion of the said project.

Eventually lahat ng mga nahire na employees nagging member ng LEYTE GEOTHERMAL POWER PROGRESSIVE
EMPLOYEES UNION, petitioner.

The union, demands from the [respondent] for recognition of it as the collective bargaining agent of said employees and
for a CBA negotiation with it. However, the [respondent] did not heed such demands.

1998 when the project was about to be completed, the [respondent] proceeded to serve Notices of Termination of
Employment.

Petitioner filed a notice of strike for "refusal to bargain collectively, union busting and mass termination." The secretary
of labor intervened, certifying the labor dispute to the NLRC for compulsory arbitration. Accordingly, all the striking
workers were directed to return to work within twelve (12) hours from receipt of the Order and for the [respondent] to
accept them back under the same terms and conditions of employment prior to the strike.

Despite efforts ni secretary of labor to contain the situation, petitioner remained adamant and unreasonable in its
position, causing the failure of the negotiation towards a peaceful compromise

the [respondent] filed a Complaint for Strike Illegality, Declaration of Loss of Employment and Damages at the NLRC-
RAB and at the same time filed a Petition for Cancellation of Petitioner’s Certificate of Registration with DOLE

NLRC 4th Division rendered a decision in favor of respondent

Union arguments:

they were regular employees since they performed work which was usually necessary or desirable to the usual business
or trade of the Construction Department of respondent

its officers and members were assigned to the Construction Department of respondent as carpenters and masons which
are usually necessary and desirable to the department.

there was no interval in the employment contract of its officers and members, thus contending the proviso in the 2nd
par. Of Art 280 which deems as regular employees those "casual" employees who have rendered at least one year of
service regardless of the fact that such service may be continuous or broken.

Issue: Whether the officers and members of petitioner Union are project employees of respondent hence, their
dismissal upon completion of the project is deemed valid

Held: Yes. In this case, as previously adverted to, the officers and the members of petitioner Union were specifically
hired as project employees. Consequently, upon the completion of the project or substantial phase thereof, the officers
and the members of petitioner Union could be validly terminated.

Ratio:

The distinction between a regular and a project employment is provided in Article 280, paragraph 1, of the Labor Code:

an employment shall be deemed to be regular where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer, except where the employment has been
fixed for a specific project or undertaking the completion or termination of which has been determined at the time of
the engagement of the employee or where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is employed and his employment shall continue
while such actually exists

The foregoing contemplates four (4) kinds of employees:

(a) regular employees or those who have been "engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer";
(b) project employees or those "whose employment has been fixed for a specific project or undertaking[,] the
completion or termination of which has been determined at the time of the engagement of the employee";
(c) seasonal employees or those who work or perform services which are seasonal in nature, and the employment is for
the duration of the season;8 and
(d) casual employees or those who are not regular, project, or seasonal employees. Jurisprudence has added a fifth kind
— a fixed-term employee

Article 280 of the Labor Code, as worded, establishes that the nature of the employment is determined by law,
regardless of any contract expressing otherwise. The supremacy of the law over the nomenclature of the contract and
the stipulations contained therein is to bring to life the policy enshrined in the Constitution to "afford full protection
to labor."10 Thus, labor contracts are placed on a higher plane than ordinary contracts; these are imbued with public
interest and therefore subject to the police power of the State

the records reveal that the officers and the members of petitioner Union signed employment contracts indicating the
specific project or phase of work for which they were hired, with a fixed period of employment

Test to determine if Project or regular:

whether or not the "project employees" were assigned to carry out a "specific project or undertaking," the duration (and
scope) of which were specified at the time the employees were engaged for that project.

project" could refer to one or the other of at least two (2) distinguishable types of activities
First - a project could refer to a particular job or undertaking that is within the regular or usual business of the employer
company

Second- a particular job or undertaking that is not within the regular business of the corporation

With regards dun sa statcon issue:

The general rule is that the office of a proviso is to qualify or modify only the phrase immediately preceding it or restrain
or limit the generality of the clause that it immediately follows.

What it seeks to eliminate are abuses of employers against their employees and not, as petitioners would have us
believe, to prevent small-scale businesses from engaging in legitimate methods to realize profit. Hence, the proviso is
applicable only to the employees who are deemed "casuals" but not to the "project" employees nor the regular
employees treated in paragraph one of Art. 280.

Clearly, therefore, petitioners being project employees, or, to use the correct term, seasonal employees, their
employment legally ends upon completion of the project or the [end of the] season. The termination of their
employment cannot and should not constitute an illegal dismissal.
Rivera v Solidbank

Facts:

Rivera, had been working for Solidbank Corporation since July 1 1977. . Prior to his retirement, he became the Manager
of the Credit Investigation and Appraisal Division of the Consumer’s Banking Group. In the meantime, Rivera and his
brother-in-law put up a poultry business in Cavite

Solidbank offered (2) retirement programs, the ORP or the SRP. Since 45 yrs old palang si rivera hindi sya qualified sa
ORP kaya yung SRP ung inapply nya.

Deciding to devote his time and attention to his poultry business in Cavite, Rivera applied for retirement under the SRP.
Solidbank approved the application and Rivera was entitled to receive the net amount of P963,619.28.

Solidbank required Rivera to sign an undated Release, Waiver and Quitclaim, and acknowledged that he had no cause
of action against Solidbank. Rivera also agreed na the bank may bring any action to seek an award for damages resulting
from his breach of the Release, Waiver and Quitclaim, and that such award would include the return of whatever sums
paid to him by virtue of his retirement under the SRP

Rivera also signed an undertaking, wherein he promised na "[he] will not seek employment with a competitor bank or
financial institution within one (1) year from February 28, 1995, and that any breach of the Undertaking or the
provisions of the Release, Waiver and Quitclaim would entitle Solidbank to a cause of action against him before the
appropriate courts of law.11 Unlike the Release, Waiver and Quitclaim, the Undertaking was not notarized.

May 1 1995, equitable employed Rivera as manager of its credit investigation and appraisal division. Nung nalaman ng
solidbank, the latter informed river ana naviolate yung undertaking and demanded the return of the benefits received by
Rivera under the SRP.

Rivera refused and Solidbank filed a complaint for Sum of Money with Prayer for Writ of Preliminary Attachment

Solidbank Argument:

*naviolate ni rivera yung undertaking nya and Rivera accepted employment with Equitable barely three months after
executing the Undertaking, it was clear that he had no intention of honoring his commitment under said deed.
*WON void ang undertaking is a question of law, what matters is rivera signed the Undertaking voluntarily and for
valuable consideration;

*the undertaking was a mgmt. prerogative and that respondent avers that the Undertaking is the law between it and
petitioner.

*yung substantial monetary windfall given the retiring officers was meant to tide them over the one-year period of
hiatus, and did not prevent them from engaging in any kind of business or bar them from being employed except with
competitor banks/financial institution

Rivera Argument:

* genuine issues as to matters of fact - He insists that the resolution of the issue of whether the employment ban is
unreasonable requires the presentation of evidence on the circumstances which led to respondent bank’s offer of the
SRP and ORP, and petitioner’s eventual acceptance and signing of the Undertaking on March 1, 1995

*likewise a need to adduce evidence on whether the employment ban is necessary to protect respondent’s interest, and
whether it is an undue restraint on petitioner’s constitutional right to earn a living to support his family

* that respondent is burdened to prove that it sustained damage or injury by reason of his alleged breach
*nalaman lang ni rivera ung employment ban when he was made to sign the undertaking, bago yun Solidbank never
disclosed any condition to the retirement scheme, nor did it impose such employment ban on the bank officers and
employees who had previously availed of the SRP

*void ang undertaking being contrary to the Constitution, the law and public policy, that it was unreasonable, arbitrary,
oppressive, discriminatory, cruel, unjust, inhuman, and violative of his human rights

* He claimed that he would not have been allowed to avail of the SRP if he had not signed it, and consequently, his
retirement benefits would not have been paid. Kaya wala daw syang choice but to sign it.

*. He also asserted that he could not cause injury or prejudice to Solidbank’s interest since he never acquired any
sensitive or delicate information which could prejudice the bank’s interest if disclosed

*hindi naman din daw nagging consideration ung undertaking sa pagavail nya sa SRP kase even if d nya iavail he will still
continue working for the company and in fact even earn more.

* intended to go full time into the poultry business, but after about two months, found out that, contrary to his
expectations, the business did not provide income sufficient to support his family. Being the breadwinner, he was then
forced to look for a job, and considering his training and experience as a former bank employee, the job with Equitable
was all he could find.

*yung ban is an absolute ban, kase yun lang alam nyang gawin. He could not work for other companies kase he did not
have the skill and qualifications. Tapos kung after 1 yr pwede na sya sa mga competitor banks, , he would no longer have
any marketable skill, because by then, it would have been rendered obsolete by non-use and rapid technological
advances

The Undertaking contains no provision that he would have to return the amount he received under the SRP; much less
does it provide that he would have to pay 12% interest per annum on said amount. On the other hand, the Release,
Waiver and Quitclaim does not contain the provision prohibiting him from being employed with any competitor bank or
financial institution within one year from February 28, 1995. Petitioner insists that he acted in good faith when he
received his retirement benefits

Issue: , whether the employment ban incorporated in the Undertaking which petitioner executed upon his retirement is
unreasonable, oppressive, hence, contrary to public policy as to warrant the return of the benefits received by rivera as
unjustified

Held:

Ratio:

Rivera is not estopped from assailing the post-retirement competitive employment ban since under Article 1409 of the
New Civil Code, those contracts whose cause, object or purpose is contrary to law, morals, good customs, public order
or public policy are inexistent or void from the beginning. Estoppel cannot give validity to an act that is prohibited by law
or one that is against public policy

Hence, since hindi barred si Rivera na iassail ung employment ban, employer , is burdened to establish that such ban is
not an unreasonable or oppressive, or in undue or unreasonable restraint of trade, thus, unenforceable for being
repugnant to public policy. , the employer has to adduce evidence to prove that the restriction is reasonable and not
greater than necessary to protect the employer’s legitimate business interests.

How will the court determine reasonableness?

The Court reiterates that the determination of reasonableness is made on the particular facts and circumstances of each
case:
including the subject matter of the contract, the purpose to be served, the determination of the parties, the extent of
the restraint and the specialization of the business of the employer. The court has to consider whether its enforcement
will be injurious to the public or cause undue hardships to the employee, and whether the restraint imposed is greater
than necessary to protect the employer.

Bakit impt ang provision on territorial limitation?

Para alam ni employee what constitutes as a violation and if such territory is co-extensive with the business of the
employer.

In summary ano yung mga factors:

a) whether the covenant protects a legitimate business interest of the employer;

(b) whether the covenant creates an undue burden on the employee;
(c) whether the covenant is injurious to the public welfare;
(d) whether the time and territorial limitations contained in the covenant are reasonable; and
(e) whether the restraint is reasonable from the standpoint of public policy.62

Ano ba ang purpose ng post-retirement competitive employment restriction?

is designed to protect the employer against competition by former employees who may retire and obtain retirement or
pension benefits and, at the same time, engage in competitive employment.

Sa case, reasonable ba ang ban ?

YES. . The Undertaking and the Release, Waiver and Quitclaim do not provide for the automatic forfeiture of the benefits
petitioner received under the SRP upon his breach of said deeds. Thus, the post-retirement competitive employment
ban incorporated in the Undertaking of respondent does not, on its face, appear to be of the same class or genre as that
contemplated in Rochester.

. Even if petitioner had admitted to having breached the Undertaking, respondent must still prove that it suffered
damages and the amount thereof.68 In determining the amount of actual damages, the Court cannot rely on mere
assertions, speculations, conjectures or guesswork but must depend on competent proof and on the best evidence
obtainable regarding the actual amount of losses

Kelan daw void ang isang contract in restraint of trade:

two principal grounds on which the doctrine is founded that a contract in restraint of trade is void as against public
policy. One is, the injury to the public by being deprived of the restricted party’s industry; and the other is, the injury to
the party himself by being precluded from pursuing his occupation, and thus being prevented from supporting himself
and his family.

A genuine issue is an issue of fact which requires the presentation of evidence as distinguished from an issue which is a
sham, fictitious, contrived or a false claim.

Rivera made (2) undertakings

First - respondent may bring "an action for damages which may include, but not limited to the return of whatever sums
he may have received from respondent under said deed if he breaks his undertaking therein
Second - any breach on his part of said Undertaking or the terms and conditions of the Release, Waiver and Quitclaim
will entitle respondent to a cause of action against [petitioner] for protection before the appropriate courts of law

Article 1306 of the New Civil Code provides that the contracting parties may establish such stipulations, clauses, terms
and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order
or public policy
retirement plans, must be liberally construed in favor of the employee, it being the general rule that pension or
retirement plans formulated by the employer are to be construed against it.46 Retirement benefits, after all, are
intended to help the employee enjoy the remaining years of his life, releasing him from the burden of worrying for his
financial support, and are a form of reward for being loyal to the employer
Daisy Tsiu

Platinum Plans Philippines, Inc. is a domestic corporation engaged in the pre-need industry

1987 to 1989, petitioner Daisy B. Tiu was its Division Marketing Director.

1993, ni rehire ni platinum si Daisy petitioner as Senior Assistant Vice-President and Territorial Operations Head in
charge of its Hongkong and Asean operations. They executed a contract valid for 5 years

September 16, 1995, petitioner stopped reporting for work.

In November 1995, she became the Vice-President for Sales of Professional Pension Plans, Inc., a corporation engaged
also in the pre-need industry.

Platinum sued Daisy for damages.

Platinum argument:
*petitioner’s employment with Professional Pension Plans, Inc. violated the non-involvement clause in her contract of
employment, to wit:

NON INVOLVEMENT PROVISION – The EMPLOYEE further undertakes that during his/her engagement with EMPLOYER
and in case of separation from the Company, whether voluntary or for cause, he/she shall not, for the next TWO (2)
years thereafter, engage in or be involved with any corporation, association or entity, whether directly or indirectly,
engaged in the same business or belonging to the same pre-need industry as the EMPLOYER. Any breach of the
foregoing provision shall render the EMPLOYEE liable to the EMPLOYER in the amount of One Hundred Thousand Pesos
(P100,000.00) for and as liquidated damages

Daisy Argument:
* non-involvement clause was unenforceable for being against public order or public policy:
* the restraint imposed was much greater than what was necessary to afford respondent a fair and reasonable
protection
* transfer to a rival company was an accepted practice in the pre-need industry.
*since products sold were more or less the same, there was nothing peculiar or unique to protect
*hindi naman daw tinrain ni platinum si daisy and nung hinire si daisy si platinum pa daw ang nagbenefit
* strict application of the non-involvement clause would amount to a deprivation of petitioner’s right to engage in the
only work she knew.

Platinum argument:
* validity of a non-involvement clause has been sustained by the Supreme Court in a long line of cases
*reasonable yung 2 years since, her job gave her access to the company’s confidential marketing strategies.
* non-involvement clause merely enjoined her from engaging in pre-need business akin to respondent’s within two
years from petitioner’s separation from respondent. She had not been prohibited from marketing other service plans.

Issue: WON the non-involvement clause is valid.

Held: Yes. In sum, we find the non-involvement clause not contrary to public welfare and not greater than is necessary
to afford a fair and reasonable protection to respondent

Ratio:
a non-involvement clause is not necessarily void for being in restraint of trade as long as there are reasonable limitations
as to time, trade, and place.
In this case, the non-involvement clause has a time limit: two years from the time petitioner’s employment with
respondent ends. It is also limited as to trade, since it only prohibits petitioner from engaging in any pre-need business
akin to respondent’s

since petitioner was the Senior Assistant Vice-President and Territorial Operations Head in charge of respondent’s
Hongkong and Asean operations, she had been privy to confidential and highly sensitive marketing strategies of
respondent’s business. To allow her to engage in a rival business soon after she leaves would make respondent’s trade
secrets vulnerable especially in a highly competitive marketing environment
Ferrazzini

Facts:

Anselmo was employed by Carlos as a worker in the latter’s factory.

Nature of work ni Anselmo:

The plaintiff held a responsible position. In the first place it was his duty to make repairs to the machinery in all the
departments; later he was entrusted with the various departments — not at the same time; once he had the bleaching
department; once he had to help out in the umbrella factory; and then he was in charge of the hat factory. The plaintiff
had other employees under him.

A contract was entered into between them

1. That during the term of this contract, and for the period of five years after the termination of the employment of the
said party of the second part, whether this contract continue in force for the period of one, two, three or more years, or
be sooner terminated, the said party of the second party shall not engage or interest himself in any business enterprises
similar to or in competition with those conducted, maintained or operated by the said party of the first day in the
Philippines,
2. hereby obligated and bound to pay unto the party of the first part the sum of ten thousand pesos, Philippine currency
(P10,000) as liquidated damages for each and every breach of the present clause of this contract, whether such breach
occurred during the employment of the said party of the second part or at any time during the period of five years from
and after the termination of said employment, and without regard to the cause of the termination of said employment.

During anselmo’s employment, it was noticed that he would frequently go out in the mornings and in the afternoon to
have a drink. This is turn would affect his work given the fact that as Carlos has said, Anselmo had a responsibility in the
factory. Furthermore, one time during supper in Carlo’s house, Anselmo stated that Carlos did not trust them
(employees) and to the new employee he said that the pay he was getting was not enough.

Soon enough he was discharged. Anselmo, then entered the employment of Mr. Whalen in the Philippine Islands as a
foreman on some construction work for a cement factory within a few days after his discharge and without the consent,
either written or verbal, of the defendant

Argument ni Carlos:
act of the plaintiff was a technical violation of the above-quoted provisions of the contract wherein he expressly agreed
and obligated himself "not to enter into the employment of any enterprise in the Philippine Islands, whatever, save and
except after obtaining special written permission therefor" from the defendant. The question now arises whether these
provisions of the contract are valid and binding upon the plaintiff.

Issue: WON the subject stipulation was contrary to public policy

Held: Yes

Ratio:
By "public policy, hold that no subject or citizen can lawfully do that which has a tendency to be injurious to the public or
against the public good. .) Public policy is the principle under which freedom of contract or private dealing is restricted
by law for the good of the public. (Id., Id.) In determining whether a contract is contrary to public policy the nature of
the subject matter determines the source from which such question is to be solved

In the United States it is well settled that contracts in undue or unreasonable restraint of trade are unenforcible because
they are repugnant to the established public policy in that country. Such contracts are illegal in the sense that the law
will not enforce them.
. There are two principal grounds on which the doctrine is founded that a contract in restraint of trade is void as against
public policy. One is, the injury to the public by being deprived of the restricted party's industry; and the other is, the
injury to the party himself by being precluded from pursuing his occupation, and thus being prevented from supporting
himself and his family.

The contract under consideration, tested by the law, rules and principles above set forth, is clearly one in undue or
unreasonable restraint of trade and therefore against public policy. It is limited as to time and space but not as to trade.
It is not necessary for the protection of the defendant, as this is provided for in another part of the clause. It would force
the plaintiff to leave the Philippine Islands in order to obtain a livelihood in case the defendant declined to give him the
written permission to work elsewhere in this country.
Del Castillo

Facts:

Agreement between Shannon and Del Castillo:

1. Alfonso del Castillo, in consideration of a monthly remuneration of P125 to be paid to him by Shannon Richmond,
agrees to enter the employ of said Shannon Richmond beginning this date, as pharmacist, and to take charge of the
prescription department of the drugstore known as the Botica Americana
2. , Shannon Richmond hereby agrees to pay the said Alfonso del Castillo the salary of P125 each month.
3. in consideration of the fact that the said Alfonso del Castillo has just graduated as a pharmacist, Del Castillo agrees not
to open, nor own nor have any interest directly or indirectly in any other drugstore either in his own name or in the
name of another; nor have any connection with or be employed by any other drugstore situated within a radius of our
miles from the district of Legaspi, municipality and Province of Albay

Del Castillo Argument:

provisions and conditions contained in the third paragraph of said contract constitute an illegal and unreasonable
restriction upon his liberty to contract hence contrary to public policy
unnecessary in order to constitute a just and reasonable protection to the defendant;

Shannon argument:
that during the time the plaintiff was in the defendant's employ he obtained knowledge of his trade and professional
secrets and came to know and became acquainted and established friendly relations with his customers so that to now
annul the contract and permit plaintiff to establish a competing drugstore in the town of Legaspi, as plaintiff has
announced his intention to do, would be extremely prejudicial to defendant's interest."

Issue: WON the such limitation is legal and reasonable and not contrary to public policy

Held: Yes.

Ratio:
It will be noted that the restrictions placed upon the plaintiff are strictly limited (a) to a limited district or districts, and
(b) during the time while the defendant or his heirs may own or have open a drugstore, or have an interest in any other
one within said limited district.

the rule became well established that if the restriant was limited to "a certain time" and within "a certain place," such
contracts were valid and not "against the benefit of the state." Later cases, and we think the rule is now well
established, have held that a contract in restraint of trade is valid providing there is a limitation upon either time or
place
The general tendency, we believe, of modern authority, is to make the test whether the restraint is reasonably
necessary for the protection of the contracting parties. If the contract is reasonably necessary to protect the interest of
the parties, it will be upheld.

Considering the nature of the business in which the defendant is engaged, in relation with the limitation placed upon the
plaintiff both as to time and place, we are of the opinion, and so decide, that such limitation is legal and reasonable and
not contrary to public policy. Therefore the judgment appealed from should be and is hereby affirmed, with costs. So
ordered.