No.

14

G.R. No. 121004, January 28, 1998

ROMEO LAGATIC, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, CITYLAND DEVELOPMENT
CORPORATION, STEPHEN ROXAS, JESUS GO, GRACE LIUSON, and ANDREW
LIUSON, respondents

Facts of the case:

Petitioner Romeo Lagatic was employed in May 1986 by Cityland, first as a probationary
sales agent, and later on as a marketing specialist. He was tasked with soliciting sales for the
company, with the corresponding duties of accepting call-ins, referrals, and making client calls
and cold calls. Cold calls refer to the practice of prospecting for clients through the telephone
directory. Cityland, believing that the same is an effective and cost-efficient method of finding
clients, requires all its marketing specialists to make cold calls. The number of cold calls depends
on the sales generated by each: more sales mean less cold calls. Likewise, in order to assess cold
calls made by the sales staff, as well as to determine the results thereof, Cityland requires the
submission of daily progress reports on the same.

On October 22, 1991, Cityland issued a written reprimand to petitioner for his failure to
submit cold call reports for September 10, October 1 and 10, 1991. This notwithstanding,
petitioner again failed to submit cold call reports for September 2, 5, 8, 10, 11, 12, 15, 17, 18, 19,
20, 22, and 28, as well as for October 6, 8, 9, 10, 12, 13 and 14, 1992. Petitioner was required to
explain his inaction, with a warning that further non-compliance would result in his termination
from the company. In a reply dated October 18, 1992, petitioner claimed that the same was an
honest omission brought about by his concentration on other aspects of his job. Cityland found
said excuse inadequate and, on November 9, 1992, suspended him for three days, with a similar
warning.

Notwithstanding the aforesaid suspension and warning, petitioner again failed to submit
cold call reports for February 5, 6, 8, 10 and 12, 1993. He was verbally reminded to submit the
same and was even given up to February 17, 1993 to do so. Instead of complying with said
directive, petitioner, on February 16, 1993, wrote a note, “TO HELL WITH COLD CALLS!
WHO CARES?” and exhibited the same to his co-employees. To worsen matters, he left the
same lying on his desk where everyone could see it.

On February 23, 1993, petitioner received a memorandum requiring him to explain why
Cityland should not make good its previous warning for his failure to submit cold call reports, as
well as for issuing the written statement aforementioned. On February 24, 1993, he sent a letter-
reply alleging that his failure to submit cold call reports should trot be deemed as gross
insubordination. He denied any knowledge of the damaging statement, “TO HELL WITH COLD
CALLS!”
 Finding petitioner guilty of gross insubordination, Cityland served a notice of dismissal
upon him on February 26, 1993. Aggrieved by such dismissal, petitioner filed a complaint
against Cityland for illegal dismissal, illegal deduction, underpayment, overtime and rest day
pay, damages and attorney’s fees. The labor arbiter dismissed the petition for lack of merit. On
appeal, the same was affirmed by the NLRC; hence the present recourse.

Issue:

Whether or not the NLRC gravely abused its discretion in not finding that petitioner was
illegally dismissed?

Ruling:

The petition lacks merit.

To constitute a valid dismissal from employment, two requisites must be met, namely: (1)
the employee must be afforded due process, and (2) the dismissal must be for a valid cause.

In the instant case, the employers may, thus, make reasonable rules and regulations for
the government of their employees, and when employees, with knowledge of an established rule,
enter the service, the rule becomes a part of the contract of employment. It is also generally
recognized that company policies and regulations, unless shown to be grossly oppressive or
contrary to law, are generally valid and binding on the parties and must be complied with.
Corollarily, an employee may be validly dismissed for violation of a reasonable company rule or
regulation adopted for the conduct of the company business. An employer cannot rationally be
expected to retain the employment of a person whose . . . lack of regard for his employer’s rules .
. . has so plainly and completely been bared.” 5 Petitioner’s continued infraction of company
policy requiring cold call reports, as evidenced by the 28 instances of non-submission of
aforesaid reports, justifies his dismissal. Hence, the finding that petitioner’s dismissal was for a
just and valid cause, his claims for moral and exemplary damages, as well as attorney’s fees,
must fail.
No. 15

G.R. No. 156515, October 19, 2004

CHINA BANKING CORPORATION, petitioner.

Vs.
MARIANO M. BORROMEO, respondent.

Facts of the case:

Respondent Mariano Borromeo was Assistant Vice-President of the Branch Banking

Group of China Banking Corporation for the Mindanao Area.
Without authority from the Executive Committee or Board of Directors of the bank, he
approved several DAUD/BP (Drawn Against Uncollected Deposits/Bills Purhcased)
accommodations amounting to P2,441,375 in favour of Joel Maniwan. Such checks, which are
not sufficiently funded by cash, are generally not honoured by banks. This came to the
knowledge of the bank authorities. A memorandum was issued to the Mariano seeking
clarification relative to the matter. The respondent accepted full responsibility for committing an
error in judgment and abuse of discretion.

His acts having constituted violation of the Bank’s Code of Ethics, the respondent was
directed to restitute the amount of P1,507,736.79 representing 90% of the total loss of
P1,675,263.10 incurred by the Bank. However, in view of his resignation and considering the
years of service in the Bank, the management earmarked only P836,637.08 from the
respondent’s total separation benefits or pay. The said amount would be released upon recovery
of the sums demanded from Maniwan in a civil case filed against him by the bank with the RTC
in Cagayan de Oro City.
The respondent made a demand on the bank for the payment of his separation pay and
other benefits, but the bank maintained its position to withhold the sum of P836,637.08. Thus,
Mariano filed with the NLRC a complaint for payment of separation pay, mid-year bonus, profit
share and damages against the bank.

The Labor Arbiter ruled in favour of the bank. Respondent appealed to the NLRC but it
affirmed in toto the findings of the Labor Arbiter The bank filed a motion for reconsidered but
denied the same. Hence, this petition.

Issue:

Whether or not the bank has the prerogative/right to impose on the respondent what it
considered the appropriate penalty under the circumstances pursuant to its company rules and
regulations.
Ruling:

The petition is meritorious.

The bank was left with no other course but to impose the ancillary penalty of restitution.
It was certainly within the bank’s prerogative to impose on the respondent what it considered the
appropriate penalty under the circumstances pursuant to its company rules and regulations.
The petitioner’s bank business is essentially imbued with public interest and owes great
fidelity to the public it deals with. It is expected to exercise the highest degree of diligence in the
selection and supervision of their employees. As a corollary, and like all other business
enterprises, its prerogative to discipline its employees and to impose appropriate penalties on
erring workers pursuant to company rules and regulations must be respected. The law, in
protecting the rights of labor, authorized neither oppression nor self-destruction of an employer
company which itself is possessed of rights that must be entitled to recognition and respect.
In this case, the respondent is not wholly deprived of his separation benefits. As the
Labor Arbiter stressed in his decision, “the separation benefits due the complainant were merely
withheld. Even the petitioner bank itself gives “the assurance that as soon as the bank has
satisfied a judgment in the civil case, the earmarked portion of his benefits will be released
without delay.

WHEREFORE, the petition is granted. The decision of the CA is reversed and set aside.
The Resolution of the NLRC is reinstated.
No. 16

G.R. No. 46739, September 23, 1939

PAMPANGA BUS COMPANY, INC., Petitioner,

Vs.
PAMBUSCO EMPLOYEES’ UNION, INC, Respondent.

Facts of the case:

On May 31, 1939, the Court of Industrial Relations issued an order, directing the
petitioner herein, Pampanga Bus Company, Inc., to recruit from the respondent, Pambusco
Employees’ Union, Inc., new employees or laborers it may need to replace members of the union
who may be dismissed from the service of the company, with the proviso that, if the union fails
to provide employees possessing the necessary qualifications, the company may employ any
other persons it may desire. This order, in substance and in effect, compels the company, against
its will, to employ preferentially, in its service, the members of the union.

Issue:

Whether or not the right of the employer to select its employees was violated.

Ruling:

Yes. The Supreme Court ruled that the Court of Industrial Relations has no authority to
issue such compulsory order. The general right to make a contact in relation to one’s business is
an essential part of the liberty of the citizens protected by the process clause of the constitution.
The right of the laborer to sell his labor to such person as he may choose is, in its essence, the
same as right of an employer to purchase label from any person who meet chooses. The
employer and employee have thus an equality of right guaranteed by the constitution. Hence, if
the employer can compel the employee to work against the latter’s will, this is servitude. If the
employee can compel the employer to give him work against the employer’s will, this is
oppression.

Thus considered, the order appealed from is hereby reversed, with costs against
respondent Pambusco Employees’ Union, Inc.
No. 17

G.R. No. L-14120, February 29, 1960

ASSOCIATED WATCHMEN AND SECURITY UNION (PTWO), Petitioner,

Vs.
THE HON. JUDGES JUAN LANTING, ARSENIO MARTINEZ, EMILIANO TABIGNE,
of the Court of Industrial Relations and MACONDRAY AND COMPANY, INC.,
Respondents.

Facts of the case:

The Republic Ships Security Agency is one of three agencies, together with K. Tagle
Ship Watchmen Agency and the City Watchmen and Security Agency, employed by certain
shipping agencies in the City of Manila and respondent Macondray and Company, Inc., in
guarding ships or vessels arriving at the port of Manila and discharging cargo on its piers. Thirty-
eight affiliates of the Republic Ships Security Agency belong to the petitioner labor union.

Petitioner union and its members declared a strike against 19 shipping firms in the City of
Manila. Attempts were made by the Court of Industrial Relations to settle the strike. At the
hearing or conference before the court on 16 March 1956, the strikers, through counsel,
expressed their desire to return back to work and maintain the status quo.

The manager of respondent Macondray and Company, Inc. expressed willingness to

employ the strikers belonging to the petitioner union under the condition that the agency to
which they belong file a bond in the sum of P5,000 in favor of Macondray and Company, Inc. to
respond for any negligence, misfeasance or malfeasance of any of the watchmen of petitioner

However, the Republic Ships Security Agency, to which most of the members of the
petitioner union belonged, failed to comply with the demands of Macondray and Company, Inc.
that they furnish such a bond.

On 15 November 1956, Macondray and Company, Inc. was charged with unfair labor
practice for having dismissed and refused to employ 38 members of the petitioner herein.
 Respondent contends that they did not demand a bond from the members of the petitioner
union but from the Republic Ships Security Agency; that it has not discriminated against
members of the petitioner union.

Issue:

Validity of the bond imposed by respondent Macondray and Company, Inc.

Ruling:

The refusal of the respondent to employ guards affiliated with a security or watchmen
agency that does not furnish a bond can not constitute an unfair labor practice. Such refusal is
merely the exercise of respondent’s legitimate right to protect its own interests.
In the instant case, the respondent never had any contract or agreement with the petitioner
union; respondent secured security guards through the three watchmen agencies above
mentioned, without reference to the unions to which the different guards may have pertained.
The members of the petitioner union or of the shipping agencies are not ordinary permanent and
continuous employees, but merely casual guards who are employed only when there is a ship to
be guarded and during the stay of the ship in the port of Manila.

Ruled in favor of the respondents.

No. 18

G.R. No. L-6846, July 20, 1955

GREGORIO ARANETA EMPLOYEES UNION, ETC., ET AL., petitioners,
Vs.
ARSENIO C. ROLDAN, ET AL., respondents.

Facts of the case:

The Agricultural Division of the Gregorio Araneta, Inc., was established in 1947 with a
capital of P200,000. The total investment in that Division in 1953 was about P3,000,000. To
reduce this overcapitalization, the Board of Directors felt that it was necessary either to invite
fresh capital from outside or to adopt a retrenchment policy. When Heacock and Company
refused the invitation to invest in the enterprise, the Board took the alternative of retrenchment.

The Board decided not to import as much merchandise as usual. It also reduced credits.
All these plans required a reduction in the volume of business necessitating likewise a reduction
of personnel and caused the laying off of 17 employees. The selection of those to be laid off was
made by a technical man and approved by the Board. These employees were given one month
separation pay, except Nicolas Gonzalez who refused to retrenchment.

The reorganization of the Agricultural Division was adopted by unanimous resolution of

the Board of Directors as a consequence of the retrenchment policy. This was adopted even
before the petitioner, “Gregorio Araneta Employees’ Union”, was organized and; consequently,
it was never directed against the union. Judge Bautista, however, believed that Gonzales should
not have been separated because his work was shifted to another employee by the name of
Augusto Achacoso, who was thus overburdened.

Both parties filed their respective motions for reconsideration with the court en banc.

Issue:
 Whether or not the retrenchment made by the employer can be categorized as unfair labor
practice?

Ruling:

No. The Supreme Court, find that no reason for disturbing the decision of the Court of
Industrial Relations, en banc. The laying off of the 17 employees was due to the retrenchment
policy which the Company had to adopt in order to reduce the overcapitalization and minimize
expenses. The volume of business was considerably reduced.

It should be noted that the retrenchment policy was adopted before even the organization
of the petitioning union. It was not, therefore, aimed at the Union or any of its members for
union or labor activities. It was not an unfair labor practice.

In view of the foregoing, the petition is denied, without pronouncement as to costs. It is

so ordered.
No. 19

G.R. No. L-2028, April 28, 1949

Philippine sheet metal workers’ union

Vs.
The Court of Industrial Relations, Can Company and Liberal Labor Union.

Facts of the case:

The respondent company filed a motion, in the case pending in the court of industrial
relations, asking for authority to lay off at least 15 workers in its can department on the ground
that the installation and operation of nine new labor-saving machines in the said department had
rendered the services of the said workers unnecessary. Petitioner alleged that there was more
than sufficient work in the company to keep all its workers busy.

Issue:

Whether or not the laying off of the 15 employees valid?

Held:

Yes. There was justification for reducing the number of workers in respondent’s factory
by the introduction of machinery in the manufacture of its products. There is no question as to
the right of the manufacturer to use new labor-saving devices with the view to effecting more
economy and efficiency in its method of production. But the right to reduce personnel should not
be abused. It should not be made a pretext for easing out laborers on account of their union
activities. But neither should it be denied when it is shown that they are not discharging their
duties in a manner consistent with good discipline and efficient operation of an industrial
enterprise.

No. 20

G.R. No. L-3587, December 21, 1951

TIONG KING, petitioner,

Vs.
COURT OF INDUSTRIAL RELATIONS and THE NATIONAL TAILOR’S
ASSOCIATION, respondents

Facts of the case:

Gaw Pun So owned and operated a tailor shop known as the Army Shirt Factory, located
in his own house at Nos. 231-245 Soler Street, Manila. In January, 1948, he had a labor dispute
with his personnel and, pending the case in the Court of Industrial Relations, Gaw Pun So, irked
and worried by the incidents of litigation, thought of dissolving the business and selling the
sewing machines. Tiong King offered to take over the business by leasing the place and the
sewing machines. The transfer was put in writing. Tiong King continued the Army Shirt Factory
from the month of February with the same employees had by Gaw Pun So. This transfer was
known to the personnel, so much so that the latter, as petitioner in the pending dispute in the
Court of Industrial Relations, prayed that Tiong King be included as a respondent. In due time,
the National Tailors Association entered that all cases were terminated against the respondents.
This agreement was duly approved by the Court of Industrial Relations.

On April 27, 1948, Tiong King filed a petition in the Court of Industrial Relations Case
No. 117-V-3, alleging that since he operated his shop in February, 1948, he had continually
suffered losses; that as there remained only very little of the capital originally invested, and that
he was definitely closing the shop on May 30, 1948. Tiong King accordingly prayed that he be
allowed to close his tailor shop and business from six o’clock in the afternoon of May 29, 1948.
On May 29, 1948, Presiding Judge Arsenio C. Roldan of the Court of Industrial Relations issued
an order enjoining Tiong King not to close his factory and not to dismiss, suspend or lay off any
laborer or employee without previous authority of said court.

Upon petitioner for reconsideration filed by counsel for Tiong King, the Court of
Industrial Relations promulgated a resolution dated May 27, 1949, allowing Tiong King to close
his business and shop, subject to the condition that, upon reopening the same, his former
personnel would be taken back.

Upon motion for reconsideration filed by counsel for the National Tailor’s Association,
the Court of Industrial Relations, promulgated a resolution dated October 31, 1949, reaffirming
their stand on the resolution of the Court of Industrial Relations under date of July 1, 1949.

The present appeal by certiorari was taken by Tiong King against the last resolution of
the Court of Industrial Relations.

Issue:

Whether he was the owner or operator thereof and had the right to file the petition in the
Court of Industrial Relations to close the tailor’s shop?

Ruling:

The high court held that it is only sufficient to recall that the National Tailors Association
entered into a stipulation with Tiong King alone whereby they agreed that all cases against the
former owners of the business were terminated. That Tiong King was conceded to be the owner
and operator of the army shirt factory at the time his petition to close it was filed, is conclusively
borne out by the fact that Presiding Judge Roldan in his decision of January 13, 1949, ordered
Tiong King, and not Gaw Pun So, to pay the salaries and wages of the personnel.

It is contended, however, that “If at all the court has approved of the agreement between
the National Tailors’ Association and Mr. Tiong King it was because — ‘this arrangement is a
very good solution to the present conflict as it is advantageous not only to the union but also the
management, and, is in consonance with the contract entered into between the management and
the new workers.” This contention is followed with the remark that the approval of said
agreement did not include a finding that Tiong King was either the owner or the lessee of the
Army Shirt Factory. We are unable to agree. In entering into the agreement with the National
Tailors Association, Tiong King acted in his own behalf, regardless of the former owners of the
business. Indeed, it was covenanted that all the cases against the latter were deemed terminated.
Considerations of fair play and justice demand that Tiong King be given the full legal effect of
said agreement which before the sanction of the Court of Industrial personnel.
 Thus, there being no question that Tiong King’s capital invested in the Army Shirt
Factory was almost exhausted at the time of the filing of his petition to close it, said petition
must necessity be granted. It is admitted by all the Judges of the Court of Industrial Relations
that an employer may close his business, provided the same is done in good faith and is due
beyond his control. To rule otherwise, would be oppressive and personnel.

Wherefore, reversing the resolution of the Court of Industrial Relations dated October 31,
1949, we hereby affirm the resolution of said court dated May 27, 1949. So ordered without
costs.

No. 21 ?????? NOT FOUND ( Roldan vs. Cebu Portland Cement case)
-----------

No. 22

G.R. No. 73140, May 29, 1987

RIZAL EMPIRE INSURANCE GROUP AND/OR SERGIO CORPUS, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION, TEODORICO L. RUIZ, as Labor
Arbiter and ROGELIO R. CORIA, respondents.

Facts of the case:

In August, 1977, herein private respondent Rogelio R. Coria was hired by herein
petitioner Rizal Empire Insurance Group as a casual employee with a salary of P10.00 a day. On
January 1, 1978, he was made a regular employee, having been appointed as clerk-typist, with a
monthly salary of P300.00. Being a permanent employee, he was furnished a copy of petitioner
company’s “General Information, Office Behavior and Other Rules and Regulations.” In the
same year, without change in his position-designation, he was transferred to the Claims
Department and his salary was increased to P450.00 a month. In 1980, he was transferred to the
Underwriting Department and his salary was increased to P580.00 a month plus cost of living
allowance, until he was transferred to the Fire Department as filing clerk. In July, 1983, he was
made an inspector of the Fire Division with a monthly salary of P685.00 plus allowances and
other benefits.

On October 15, 1983, private respondent Rogelio R. Coria was dismissed from work,
allegedly, on the grounds of tardiness and unexcused absences. Accordingly, he filed a complaint
with the Ministry of Labor and Employment (MOLE), and in a Decision dated March 14, 1985
(Record, pp. 80-87), Labor Arbiter Teodorico L. Ruiz reinstated him to his position with back
wages. Petitioner filed an appeal with the National labor Relations Commission (NLRC) but, in a
Resolution dated November 15, 1985 (Ibid, pp. 31-32), the appeal was dismissed on the ground
that the same had been filed out of time. Hence, the instant benefits.

Issue:

Whether or not NLRC committed a grave abuse of discretion amounting to lack of

jurisdiction in dismissing petitioner’s appeal on a technicality.

Ruling:

No. Under the Rule VIII of the Revised Rules of the National Labor Relations
Commission on appeal, provides that in Section 1 , an Appeal. — Decision or orders of a labor
Arbiter shall be final and executory unless appealed to the Commission by any or both of the
parties within ten (10) calendar days from receipt of notice thereof, and Section 6, that no
extension of period. — No motion or request for extension of the period within which to perfect
an appeal shall be entertained.

The record shows that the employer (petitioner herein) received a copy of the decision of
the Labor Arbiter on April 1, 1985. It filed a Motion for Extension of Time to File Memorandum
of Appeal on April 11, 1985 and filed the Memorandum of Appeal on April 22, 1985. Pursuant
to the “no extension policy” of the National Labor Relations Commission, aforesaid motion for
extension of time was denied in its resolution dated November 15, 1985 and the appeal was
dismissed for having been filed out of time.

In the instant case, the Revised Rules of the National Labor Relations Commission are
clear and explicit and leave no room for interpretation. Moreover, it is an elementary rule in
administrative law that administrative regulations and policies enacted by administrative bodies
to interpret the law which they are entrusted to enforce, have the force of law, and are entitled to
great respect. Under the above-quoted provisions of the Revised NLRC Rules, the decision
appealed from in this case has become final and executory and can no longer be subject to
appeal.

Hence, the high court held that the ruling of the Labor Arbiter appears to be correct; the
consistent promotions in rank and salary of the private respondent indicate he must have been a
highly efficient worker, who should be retained despite occasional lapses in punctuality and
attendance. Perfection cannot after all be demanded.

WHEREFORE, this petition is DISMISSED.

No. 23

G.R. No. 81958 June 30, 1988

PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner,

Vs.
HON. FRANKLIN M. DRILON as Secretary of Labor and Employment, and TOMAS D.
ACHACOSO, as Administrator of the Philippine Overseas Employment Administration,
respondents.

Facts of the case:

The petitioner, engaged principally in the recruitment of Filipino workers, male and
female, for overseas placement, challenges the Constitutional validity of Department Order No.
1, Series of 1988, of the Department of Labor and Employment, in the character of
“GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF DEPLOYMENT OF
FILIPINO DOMESTIC AND HOUSEHOLD WORKERS,” in this petition for certiorari and
prohibition. Specifically, the measure is assailed for “discrimination against males or females;”
that it “does not apply to all Filipino workers but only to domestic helpers and females with
similar skills;” and that it is violative of the right to travel. It is held likewise to be an invalid
exercise of the lawmaking power, police power being legislative, and not executive, in character.
In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the Constitution,
providing for worker participation “in policy and decision-making processes affecting their
rights and benefits as may be provided by law.” 4 Department Order No. 1, it is contended, was
passed in the absence of prior consultations. It is claimed, finally, to be in violation of the
Charter’s non-impairment clause, in addition to the “great and irreparable injury” that PASEI
members face should the Order be further enforced.

Issue:

Whether or not the Department Order of the Respondent is in violation of the Equal
Protection Clause and Discriminatory against Sexes?

Ruling:

No. The petitioner has shown no satisfactory reason why the contested measure should be
nullified. There is no question that Department Order No. 1 applies only to “female contract
workers,” but it does not thereby make an undue discrimination between the sexes. It is well-
settled that “equality before the law” under the Constitution does not import a perfect Identity of
rights among all men and women. It admits of classifications, provided that (1) such
classifications rest on substantial distinctions; (2) they are germane to the purposes of the law;
(3) they are not confined to existing conditions; and (4) they apply equally to all members of the
same class.

In this case, the Court is well aware of the unhappy plight that has befallen our female
labor force abroad, especially domestic servants, amid exploitative working conditions marked
by, in not a few cases, physical and personal abuse. The sordid tales of maltreatment suffered by
migrant Filipina workers, even rape and various forms of torture, confirmed by testimonies of
returning workers, are compelling motives for urgent Government action. As precisely the
caretaker of Constitutional rights, the Court is called upon to protect victims of exploitation. In
fulfilling that duty, the Court sustains the Government’s efforts. The State through the labor
Secretary Exercise the police power which is a power coextensive with self- protection, and it is
not inaptly termed the “law of overwhelming necessity.” It may be said to be that inherent and
plenary power in the State which enables it to prohibit all things hurtful to the comfort, safety,
and welfare of society.”
No. 24

G.R. No. L-49582 January 7, 1986

CBTC EMPLOYEES UNION, petitioner,
Vs.
THE HONORABLE JACOBO C. CLAVE, Presidential Executive Assistant, and
COMMERCIAL BANK & TRUST COMPANY OF THE PHILIPPINES, respondents.

Facts of the case:

 Petitioner Commercial Bank and Trust Company Employees’ Union (Union for short)
lodged a complaint with the Regional Office No. IV, Department of Labor, against private
respondent bank (Comtrust) for non-payment of the holiday pay benefits provided for under
Article 95 of the Labor Code in relation to Rule X, Book III of the Rules and Regulations
Implementing the Labor Code. Failing to arrive at an amicable settlement at conciliation level,
the parties opted to submit their dispute for voluntary arbitration. The issue presented was:
“Whether the permanent employees of the Bank within the collective bargaining unit paid on a
monthly basis are entitled to holiday pay effective November 1, 1974, pursuant to Article 95
(now Article 94) of the Labor Code, as amended and Rule X (now Rule IV), Book III of the
Rules and Regulations Implementing the Labor Code.

In the course of the hearing, the Arbitrator apprised the parties of an interpretative
bulletin on “holiday pay” about to be issued by the Department of Labor. On April 22, 1976, the
NLRC affirmed the Arbitrator’s ruling to award damages to the employees but the same was
reversed by the Labor Secretary and affirmed by respondent Presidential Executive Assistant
Clave

Issue:

Whether or not be permanent employees of the bank paid on a monthly basis entitled to
holiday pay effective on November 1, 1974 pursuant to Article 95 of the Labor Code as
amended?

Ruling:

Yes. The High Court must be pointed out that the reason for denying the employees their
holiday pay was based on Section 2, Rule IV, Book III of the Implementing Rules and
Regulations pf the amended Labor Code which merely provides a disputable presumption for
monthly paid employees of being paid holiday pay and can be destroyed by evidence to the
contrary.

In the instant case, in excluding the union members the benefits of the holiday pay law,
public respondent predicated his ruling on Section 2, Rule IV, Book III of the Rules to
implement Article 94 of the Labor Code promulgated by the then Secretary of Labor and Policy
Instructions No. 9.

The questioned Section 2, Rule IV, Book III of the Integrated Rules and the Secretary’s
Policy Instruction No. 9 add another excluded group, namely, ‘employees who are uniformly
paid by the month’. While the additional exclusion is only in the form of a presumption that all
monthly paid employees have already been paid holiday pay, it constitutes a taking away or a
deprivation which must be in the law if it is to be valid. An administrative interpretation which
diminishes the benefits of labor more than what the statute delimits or withholds is obviously
ultra vires.

Ruled in favor of the petitioners. Presidential Executive Assistant and the Acting
Secretary of labor are set aside, and the award of the Arbitrator reinstated.
No. 25

G.R. No. L-64313, January 17, 1985

NATIONAL HOUSING CORPORATION, petitioner,
Vs.
BENJAMIN JUCO AND THE NATIONAL LABOR RELATIONS COMMISSION,
respondents.

Facts of the case

Juco was an employee of the NHA. He filed a complaint for illegal dismissal w/ MOLE
but his case was dismissed by the labor arbiter on the ground that the NHA is a govt-owned corp.
and jurisdiction over its employees is vested in the CSC. On appeal, the NLRC reversed the
decision and remanded the case to the labor arbiter for further proceedings. NHA in turn
appealed to the SC.

Issue:

Whether or not the employees of the National Housing Corporation, a GOCC without
original charter, covered by the Labor Code or by laws and regulations governing the civil
service.

Ruling:

Under the law, Sec. 11, Art XII-B of the Constitution specifically provides: “The Civil
Service embraces every branch, agency, subdivision and instrumentality of the Government,
including every government owned and controlled corporation. The inclusion of GOCC within
the embrace of the civil service shows a deliberate effort at the framers to plug an earlier
loophole which allowed GOCC to avoid the full consequences of the civil service system. All
offices and firms of the government are covered.

In this case, this Constitution provision has been implemented by statute PD 807 is
unequivocal that personnel of GOCC belong to the civil service and subject to civil service
requirements. “Every” means each one of a group, without exception. This case refers to a
GOCC. It does not cover cases involving private firms taken over by the government in
foreclosure or similar proceedings. For purposes of coverage in the Civil Service, employees of
government- owned or controlled corporations. Whether created by special law or formed as
subsidiaries are covered by the Civil Service Law, not the Labor Code, and the fact that owned
or controlled by the government may be created by special charter does not mean that such
corporations. Not created by special law are not covered by the Civil Service.

Hence, all government-owned or controlled corporations could be created, no longer by

special charters, but through incorporation. Under the general law. The Constitutional
amendment including such corps. In the embrace of the civil service would cease to have
application. Certainly, such a situation cannot be allowed.
No. 26

G.R. No. L-69870 November 29, 1988

NATIONAL SERVICE CORPORATION (NASECO) AND ARTURO L. PEREZ,

petitioners,
Vs.
THE HONORABLE THIRD DIVISION, NATIONAL LABOR RELATIONS
COMMISSION, MINISTRY OF LABOR AND EMPLOYMENT, MANILA AND
EUGENIA C. CREDO, respondents.

Facts of the case:

Eugenia Credo, Chief of Property and Records of NATIONAL SERVICE

CORPORATION (NASECO) filed a complaint before the Arbitration Branch of the Ministry of
Labor after having been placed in forced leave without due process. Said forced leave was a
product of her alleged non-compliance of a memorandum coming from a Finance Manager, and
other past acts of misconduct as found by NASECO’s committee on Personnel Affairs.

In the Manager’s office, Credo was made to explain her side in connection with the
conducts for which she is complained of. But because she failed to explain, she was handed a
Notice of Termination. Credo thus filed a supplemental complaint for illegal dismissal and lack
of opportunity to be heard.

Issue:

Was there an illegal dismissal?

Ruling:

Yes. Under the law there are the guidelines mandate that the employer furnish an
employee sought to be dismissed two written notices of dismissal before a termination of
employment can be legally effected which are the: Notice which apprises the employee of the
particular acts or omissions for which his dismissal is sought and the subsequent notice which
informs the employee of the employer’s decision to dismiss him.

In the case at bench, the rules dictate of procedural due process requires that decision to
dismiss can only be handed after employer has afforded employee concerned ample opportunity
to be heard and defend himself. In the case at bar, the compliance with the injunction to apprise
her of the charges filed against her and to afford her a chance to prepare her defense was
dispensed in only a day. This is not effective compliance with the legal requirements.

Hence, the high court challenged the decision of the NLRC is AFFIRMED with
modifications ordering the Petitioners in G.R. No. 69870, who are the private respondents in
G.R. No. 70295, to reinstate Eugenia C. Credo to her former position at the time of her
termination, or if such reinstatement is not possible, to place her in a substantially equivalent
position, with three (3) years backwages, from 1 December 1983.