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Labor Standards Cases for Reading and Digest

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De Leon vs. NLRC, G.R. No. 70705, August 21, 1989 Beta Electric Corp vs. NLRC, G.R. No. 86408, February 15, 1990 Viernes vs. NLRC, G.R. No. 108405, April 4, 2003 Labor Congress of the Philippines vs. NLRC, G.R. No. 123938, May 21, 1998 Mercado vs. NLRC, G.R. No. 79869, September 5, 1991 Filipinas Pre-fabricated Building Systems vs. Puente, G.R. No. 153832, March 18, 2005 Integrated Contractor and Plumbing Works vs. NLRC, G.R. No. 152427, August 9, 2005 Millares vs. NLRC, G.R. No. 110524, July 29, 2002 International Catholic Migration Commission vs. NLRC, G.R. No. 72222, January 30, 1989 Mariwasa Manufacturing Co. vs. Leogardo, G.R. No. 74246 January 26, 1989 La Sallete of Santiago, Inc. vs. NLRC, G.R. No. 82918 March 11, 1991 Hanjin vs. Ibanez, G.R. No. 170181, June 26, 2008 Baguio Country Club vs. NLRC, G.R. No. 71664 February 28, 1992 Pangilinan vs. General Milling, G.R. No. 149329, July 12, 2004 Alcira vs. NLRC, G.R. No. 149859, June 9, 2004 Philippine Daily Inquirer vs. Magtibay, G.R. No. 164532, July 24, 2007 Saberola vs. Suarez, G.R. No. 151227, July 14, 2008 Samson vs. NRLC, G.R. No. 113166, February 1, 1996 Cielo vs. NLRC, G.R. No. 78693 January 28, 1991 Tacloban Sagkahan Rice, etc. vs. NLRC, G.R. No. 73806 March 21, 1990 Panday vs. NLRC, G.R. No. 67664 May 20, 1992 Cathedral School of Technology vs. NLRC, G.R. No. L-101438 October 13, 1992 Philippine-Japan Active Carbon Corp. vs. NLRC, G.R. No. 83239 March 8, 1989 PEPSICO, Inc. vs. NLRC, G.R. No. L-51632 September 7, 1989 Batongbacal vs. Associated Bank, G.R. No. 72977 December 21, 1988 BIENVENIDO R. BATONGBACAL vs. ASSOCIATED BANK, G.R. No. 72977 December 21, 1988 SUPERSTAR SECURITY AGENCY, INC. vs. NLRC, G.R. No. 81493 April 3, 1990 YUCO CHEMICAL INDUSTRIES, INC., vs. MOLE, G.R. No. L-75656 May 28, 1990

Not required for digesting 1. ALEGRIA vs. JUDGE MANUEL N. DUQUE, A.M. No. RTJ-06-2019, April 4, 2007 2. BACSIN vs. EDUARDO O. WAHIMAN, G.R. No. 146053, April 30, 2008 3. DOMINGO vs. ROGELIO I. RAYALA, G.R. No. 155831, February 18, 2008 1

4. NBI vs. JUDGE FRANCISCO D. VILLANUEVA, A.M. No. MTJ-99-1207, November 21, 2001 5. PEOPLE vs. REYNALDO BAYON y RAMOS, G.R. No. 168627, July 2, 2010

G.R. No. 70705 August 21, 1989 MOISES DE LEON, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and LA TONDEA INC., respondents. Facts: Petitioner was employed by private respondent La Tonde;a Inc. on December 11, 1981, at the Maintenance Section of its Engineering Department in Tondo, Manila. His work consisted mainly of painting company building and equipment, and other odd jobs relating to maintenance. He was paid on a daily basis through petty cash vouchers. In the early part of January, 1983, after a service of more than one (1) year, petitioner requested from respondent company that he be included in the payroll of regular workers, instead of being paid through petty cash vouchers. Private respondent's response to this request was to dismiss petitioner from his employment on January 16, 1983. Having been refused reinstatement despite repeated demands, petitioner filed a complaint for illegal dismissal, reinstatement and payment of backwages before the Office of the Labor Arbiter of the then Ministry now Department of Labor and Employment. Petitioner alleged that he was dismissed following his request to be treated as a regular employee; that his work consisted of painting company buildings and maintenance chores like cleaning and operating company equipment, assisting Emiliano Tanque Jr., a regular maintenance man; and that weeks after his dismissal, he was re-hired by the respondent company indirectly through the Vitas-Magsaysay Village Livelihood Council, a labor agency of respondent company, and was made to perform the tasks which he used to do. Emiliano Tanque Jr. corroborated these averments of petitioner in his affidavit. On the other hand, private respondent claimed that petitioner was not a regular employee but only a casual worker hired allegedly only to paint a certain building in the company premises, and that his work as a painter terminated upon the completion of the painting job. Issue: Whether or not a casual employee who perform odd jobs from time to time as assigned aside from the performing his original task in for being employed for more one year can be considered as regular employee? Held: The Court held, the law on the matter is Article 281 of the Labor Code which defines regular and casual employment as follows: Art. 281. Regular and casual employment. The provisions of a written agreement to the contrary notwithstanding and regardless of the oral agreements of the parties, 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 services 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.

This provision reinforces the Constitutional mandate to protect the interest of labor. Its language evidently manifests the intent to safeguard the tenurial interest of the worker who may be denied the rights and benefits due a regular employee by virtue of lopsided agreements with the economically powerful employer who can maneuver to keep an employee on a casual status for as long as convenient. Thus, contrary agreements notwithstanding, an employment is deemed regular when the activities performed by the employee are usually necessary or desirable in the usual business or trade of the employer. Not considered regular are the so-called "project employment" the completion or termination of which is more or less determinable at the time of employment, such as those employed in connection with a particular construction project and seasonal employment which by its nature is only desirable for a limited period of time. However, any employee who has rendered at least one year of service, whether continuous or intermittent, is deemed regular with respect to the activity he performed and while such activity actually exists. The primary standard, therefore, of determining a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Also, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. In the case at bar, the respondent company, which is engaged in the business of manufacture and distillery of wines and liquors, claims that petitioner was contracted on a casual basis specifically to paint a certain company building and that its completion rendered petitioner's employment terminated. This may have been true at the beginning, and had it been shown that petitioner's activity was exclusively limited to painting that certain building, respondent company's theory of casual employment would have been worthy of consideration. However, during petitioner's period of employment, the records reveal that the tasks assigned to him included not only painting of company buildings, equipment and tools but also cleaning and oiling machines, even operating a drilling machine, and other odd jobs assigned to him when he had no painting job. A regular employee of respondent company, Emiliano Tanque Jr., attested in his affidavit that petitioner worked with him as a maintenance man when there was no painting job. Therefore, all things considered, the petitioners status of employment became regular hence private respondent is ordered to reinstate petitioner as a regular maintenance man and to pay petitioner backwages, ECOLA, and 13th Month Pay.

G.R. NO. 86408 FEBRUARY 15, 1990 BETA ELECTRIC CORPORATION VS. NATIONAL LABOR RELATIONS COMMISSION FACTS: The petitioner hired the private respondent as clerk typist III effective December 15, 1986 until January 16, 1987, and was subsequently rehired on January 16, 1987 up to February 15, 1987. On February 15, 1987, it gave her another extension up to March 15, 1987. On March 15, 1987, it gave her a further extension until April 30, 1987. On May 1, 1987, she was given until May 31, 1987. On June 1, 1987, she was given up to June 30, 1987. Her appointments were covered by corresponding written contracts. On June 22, 1987, her services were terminated without notice or investigation. On the same day, she went to the labor arbiter on a complaint for illegal dismissal. As the court has indicated, both the labor arbiter and the respondent National 3

Labor Relations Commission ruled for her. The petitioner argues mainly that the private respondent's appointment was temporary and hence she may be terminated at will. ISSUE Whether or not private respondent is temporary employee? HELD: The Court held NO. The private respondent was to all intents and purposes, and at the very least, a probationary employee, who became regular upon the expiration of six months. Under Article 281 of the Labor Code, a probationary employee is "considered a regular employee" if he has been "allowed to work after the probationary period." The fact that her employment has been a contract-to- contract basis cannot alter the character of employment, because contracts cannot override the mandate of law. Hence, by operation of law, she has become a regular employee. In the case at bar, the private employee was employed from December15, 1986 until June 22, 1987 when she was ordered laid off. Her tenure having exceeded six months, she attained regular employment.

G.R. NO. 108405. APRIL 4, 2003 VIERNES VS. NLRC AND BENGUET ELECTRIC COOPERATIVE, INC. (BENECO) FACTS: Petitioners services as meter readers were contracted for hardly a months duration, from October 8 to 31, 1990. The said term notwithstanding, petitioners were allowed to work until January 2, 1991. On January 3, 1991, they were each served their identical notices of termination. On the same date, they filed complaints for illegal dismissal. They contended that they were not apprentices but regular employees whose services were illegally and unjustly terminated in a manner that was whimsical and capricious. On the other hand, private respondent BENECO invoked Article 283 of the Labor Code in defense of the questioned dismissal. The Labor Arbiter dismissed the complaints for lack of merit. However, it ordered BENECO to extend to the petitioners the contract of temporary employment that the former had offered, with the exception of Jaime Viernes. Also, the Labor Arbiter directed BENECO to pay each the amount equivalent to their monthly salary as indemnity for its failure to give complainants the 30-day notice mandated under Article 283 of the Labor Code. Modifying the Arbiters decision, the NLRC rendered that the dismissal was illegal. It ordered petitioners reinstatement to their former position as meter readers or to any equivalent position with payment of backwages limited to one year deleting the award of indemnity. ISSUES: Whether or not the petitioners should be reinstated to their former position as meter readers on probationary status despite the finding that they are regular employees under Article 280 of the Labor Code? HELD: YES. Reinstatement means restoration to a state or condition from which one had been removed or separated. In case of probationary employment, Article 281 of the Labor Code requires the employer to make known to his employee at the time of the latters engagement of the reasonable standards under which they may qualify as a regular employee. In the case at bar, there is nothing on the letter of appointment that their employment as meter readers was on probationary basis. It was not shown that they were informed either, at the time of their appointment, the reasonable standards under which they could qualify as regular employees. Instead, they were initially engaged to perform their job for a limited period, their employment being fixed for a definite period. The principle enunciated in Brent School, Inc. vs. Zamora applies only to fixed term employments. While it is true that the petitioners were initially employed on a fixed term basis as their employment contracts were only for a month, they were allowed to continue working in the same capacity as meter readers without the benefit of a new contract or without the term of their employment being fixed a 4

new. After October 31, 1991, the employment of petitioners is no longer on a fixed term basis. The complexion of the employment relationship is totally changed for the petitioners have attained the status of regular employees. Under Article 280 of the Labor Code, there are two instances whereby it is determined that an employee is regular: (1) the particular activity performed by the employee is necessary or desirable to the usual trade or business of the employer; or (2) if the employee has been performing the job for at least one year. The petitioners fall under the first category. The job of a meter reader is necessary to the business of BENECO since unless the meter reader records the electric consumption of the subscribing public, there could not be a valid basis for billing the customers of BENECO. The fact that the petitioners were allowed to continue working after the expiration of their employment is evidence of the necessity and desirability of their service to BENECOs business. Since petitioners are already regular employees at the time of their illegal dismissal from employment, they are entitled to be reinstated to their former position as regular employees, not merely probationary. Moreover, under Article 279, as amended by R.A. No. 6715, an illegally dismissed employee is entitled to full backwages, inclusive of allowances and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Therefore, petitioners backwages should not be limited to one year only.

G.R. No. 123938 May 21, 1998 LABOR CONGRESS OF THE PHILIPPINES (LCP), petitioners vs. NATIONAL LABOR RELATIONS COMMISSION, EMPIRE FOOD PRODUCTS, respondents. Facts: Issue: Held:

G.R. No. 79869 September 5, 1991 FORTUNATO MERCADO, SR., et.al, petitioner vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC), STO. NIO REALTY, INCORPORATED, et.al., respondents. Facts: Petitioners were agricultural workers for a sugar plantation. Their employment with the private respondent was seasonal which means their services are usually utilized during the planting season and during harvest season of sugar cane. Petitioners filed a complaint for illegal dismissal, underpayment of wages, nonpayment of overtime pay, holiday pay, service incentive leave benefits, emergency cost of living allowances and 13th month pay against private respondents. Petitioners alleged in their complaint that they were agricultural workers utilized by private respondents in all the agricultural phases of work on the sugar land of the respondents and that they worked in the farm since 1949 to 1979. Private respondent Aurora Cruz in her answer to petitioners' complaint denied that said petitioners were her regular employees and instead averred that she engaged their services, through Spouses Fortunato Mercado, Sr. and Rosa Mercado, their "mandarols", that is, persons who take charge in supplying the number of workers needed by owners of various farms, but only to do a particular phase of agricultural work necessary in rice production and/or sugar cane production, after which they would be free to render services to other farm owners who need their services. Petitioners submit that it would be unjust, if not unlawful, to consider them as casual workers since they have been doing all phases of agricultural work for so many years, activities which are undeniably necessary, desirable and indispensable in the rice and sugar cane production business of the private respondents citing Art. 280 of the Labor Code specifically on paragraph 2. 5

The Labor Arbiter, as affirmed by the NLRC, ruled in favor of private respondents and held that petitioners were not regular and permanent workers of the private respondents, for the nature of the terms and conditions of their hiring reveal that they were required to perform phases of agricultural work for a definite period of time after which their services would be available to any other farm owner. Issue: Whether or not petitioners are regular and permanent farm workers and therefore entitled to the benefits which they pray for? Held: The Court held, petitioners contention that the provision in the second paragraph of Art. 280s applicability to their case and should have been considered as regular employees by virtue of said provision is without merit. The first paragraph of Art. 280 of the Labor Code answered the question of who are employees. It states that, regardless of any written or oral agreement to the contrary, an employee is deemed regular where he is engaged in necessary or desirable activities in the usual business or trade of the employer, except for project employees. A project employee has been defined to be one 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, or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season as in the present case. The second paragraph of Art. 280 demarcates as "casual" employees, all other employees who do not fan under the definition of the preceding paragraph. The proviso, in said second paragraph, 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. The general rule is that a provision is to qualify or modify only the phrase immediately preceding it or restrain or limit the generality of the clause that it immediately follows. Thus, it has been held that a provision is to be construed with reference to the immediately preceding part of the provision to which it is attached, and not to the statute itself or to other sections thereof. The only exception to this rule is where the clear legislative intent is to restrain or qualify not only the phrase immediately preceding it but also earlier provisions of the statute or even the statute itself as a whole. 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 season. The termination of their employment cannot and should not constitute an illegal dismissal.

G.R. No. 153832. March 18, 2005 FILIPINAS PRE-FABRICATED BUILDING SYSTEMS (FILSYSTEMS), INC., and FELIPE A. CRUZ JR., Petitioners, vs. ROGER D. PUENTE, Respondent. Facts: Respondent avers that he started working with petitioner, Filsystems, Inc., a corporation engaged in construction business, on June 12, 1989; that he was initially hired by petitioner-company as an installer; that he was later promoted to mobile crane operator and was stationed at the company premises at No. 69 Industria Road, Bagumbayan, Quezon City; that his work was not dependent on the completion or termination of any project; that since his work was not dependent on any project, his employment with the petitionercompany was continuous and without interruption for the past ten (10) years; that on October 1, 1999, he was dismissed from his employment allegedly because he was a project employee. He filed a pro forma complaint for illegal dismissal against the petitioner-company on November 18, 1999. The petitioner-company however claims that complainant was hired as a project employee in the companys various projects; that his employment contracts showed that he was a project worker with specific project assignments; that after completion of each project assignment, his employment was likewise terminated and the same was correspondingly reported to the DOLE. 6

The Labor Arbiter, as affirmed by the NLRC, dismissed the complaint for illegal dismissal for lack of merit. However, the CA reversed the decision and concluded that respondent was a regular employee of petitioners. The premised its decision on the following stating that, the employment contracts signed by petitioner Puente do not have the specified duration for each project contrary to the provision of Article 280 of the Labor Code, nor did petitioner work in the project sites, but had always been assigned at the company plant attending to the maintenance of all mobile cranes of the company, performing tasks vital and desirable in the employers usual business for ten (10) continuous years. Issue: Whether or not the private respondent is a regular employee and not a project employee? Held: The Court held, Department Order No. 19, which states: a) Project employees whose aggregate period of continuous employment in a construction company is at least one year shall be considered regular employees, in the absence of a "day certain" agreed upon by the parties for the termination of their relationship. Project employees who have become regular shall be entitled to separation pay. A "day" as used herein, is understood to be that which must necessarily come, although is may not be known exactly when. This means that where the final completion of a project or phase thereof is in fact determinable and the expected completion is made known to the employee, such project employee may not be considered regular, notwithstanding the one-year duration of employment in the project or phase thereof or the one-year duration of two or more employments in the same project or phase of the object. Evidently, although the employment contract did not state a particular date, it did specify that the termination of the parties employment relationship was to be on a "day certain" -- the day when the phase of work termed "Lifting & Hauling of Materials" for the "World Finance Plaza" project would be completed. Thus, respondent cannot be considered to have been a regular employee. He was a project employee. That he was employed with Petitioner Filsystems for ten years in various projects did not ipso facto make him a regular employee, considering that the definition of regular employment in Article 280 of the Labor Code makes a specific exception with respect to project employment. The mere rehiring of respondent on a project-to-project basis did not confer upon him regular employment status. "The practice was dictated by the practical consideration that experienced construction workers are more preferred." It did not change his status as a project employee.

G.R. No. 152427. August 9, 2005 INTEGRATED CONTRACTOR AND PLUMBING WORKS, INC., Petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and GLEN SOLON, Respondent. Facts: Petitioner is a plumbing contractor. Its business depends on the number and frequency of the projects it is able to contract with its clients. Private respondent Solon worked for petitioner in various projects since 1994 to 1998. On February 23, 1998, while private respondent was about to log out from work, he was informed by the warehouseman that the main office had instructed them to tell him it was his last day of work as he had been terminated. When private respondent went to the petitioners office on February 24, 1998 to verify his status, he found out that indeed, he had been terminated. He went back to petitioners office on February 27, 1998 to sign a clearance so he could claim his 13th month pay and tax refunds. However, he had second thoughts and refused to sign the clearance when he read the clearance indicating he had resigned. On March 6, 1998, he filed a complaint alleging that he was illegally dismissed without just cause and without due process. The Labor Arbiter ruled that private respondent was a regular employee and could only be removed for cause which the NLRC affirmed. The petitioner asserts that the private respondent was a project employee. Thus, when the project was completed and private respondent was not re-assigned to another project, petitioner did not violate any law since it was petitioners discretion to re-assign the private respondent to other projects. 7

Issue: Whether or not the respondent is a project employee of the petitioner or a regular employee? Held: The Court held, the test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. Also, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business. Thus, we held that where the employment of project employees is extended long after the supposed project has been finished, the employees are removed from the scope of project employees and are considered regular employees. While length of time may not be the controlling test for project employment, it is vital in determining if the employee was hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer. Here, private respondent had been a project employee several times over. His employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of petitioners business. Where from the circumstances it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee, they should be struck down as contrary to public policy, morals, good customs or public order. Further, Policy Instructions No. 20 requires employers to submit a report of an employees termination to the nearest public employment office every time his employment was terminated due to a completion of a project. The failure of the employer to file termination reports is an indication that the employee is not a project employee. Department Order No. 19 superseding Policy Instructions No. 20 also expressly provides that the report of termination is one of the indications of project employment. In the case at bar, there was only one list of terminated workers submitted to the Department of Labor and Employment. If private respondent was a project employee, petitioner should have submitted a termination report for every completion of a project to which the former was assigned. Juxtaposing private respondents employment history, vis the requirements in the test to determine if he is a regular worker, we are constrained to say he is. As a regular worker, private respondent is entitled to security of tenure under Article 279 of the Labor Code and can only be removed for cause. We found no valid cause attending to private respondents dismissal and found also that his dismissal was without due process.

G.R. No. 110524 March 14, 2000 DOUGLAS MILLARES and ROGELIO LAGDA, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, TRANS-GLOBAL MARITIME AGENCY, INC. and ESSO INTERNATIONAL SHIPPING CO., LTD., respondents. Facts: Petitioners were employed as seamen of the private respondent. Petitioner Millares was employed by private respondent ESSO International through its local manning agency, private respondent Trans-Global in 1968 as a machinist. In 1975, he was promoted as Chief Engineer which position he occupied until he opted to retire in 1989. While on leave, Millares informed ESSO International of his intention to avail of the optional retirement plan under the Consecutive Enlistment Incentive Plan (CEIP) considering that he had already rendered more than twenty (20) years of continuous service but was denied. Millares filed for an extension of leave of absence and was approved but after some time he receive a notice terminating his employment of the basis that he had gone AWOL. In the case of the other petitioner, Lagda, he was employed by private respondent Esso International as wiper/oiler in June 1969. He was promoted as Chief Engineer in 1980, a position he continued to occupy until his last contract of enlistment expired on April 10, 1989. Petitioner Lagda, applied for a leave on May 1989 up to the whole month of August 1989 but his employer approved only up to July 1989 of his leave and advised him to report for reassignment on July 1989. Petitioner Lagda wrote a letter informing respondent of his intention to avail of the optional early retirement plan in view of his 8

twenty (20) years continuous service in the company but was denied. He then applied for a LOA up to August 26, 1989 and was approved. However, on the next month respondent advised petitioner that he had been dropped from the roster of crew members. On October 5, 1989, petitioners Millares and Lagda filed a complaint-affidavit, for illegal dismissal and non-payment of employee benefits against private respondents Esso International and Trans-Global, before the POEA. POEA rendered a decision dismissing the complaint for lack of merit and was affirmed by the CA. Petitioners contend that public respondent NLRC gravely abused its discretion in ruling that they are not regular employees but are merely contractual employees whose employments are terminated every time their contracts of employment expire. Petitioners further aver that after rendering twenty (20) consecutive years of service, performing activities which were necessary and desirable in the trade or business of private respondents, they should be considered regular employees under Article 280 of the Labor Code. Issue: Whether or not petitioners were regular employees? Held: The Court held, the primary standard to determine a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Also, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. In the case at bar, it is undisputed that petitioners were employees of private respondents until their services were terminated on September 1, 1989. They served in their capacity as Chief Engineers, performing activities which were necessary and desirable in the business of private respondents Esso International, a shipping company; and Trans-Global, its local manning agency which supplies the manpower and crew requirements of Esso International's vessels. It is, likewise, clear that petitioners had been in the employ of private respondents for 20 years. The records reveal that petitioners were repeatedly re-hired by private respondents even after the expiration of their respective eight-month contracts. Such repeated re-hiring which continued for 20 years, cannot but be appreciated as sufficient evidence of the necessity and indispensability of petitioner's service to the private respondents' business or trade. Verily, as petitioners had rendered 20 years of service, performing activities which, were necessary and desirable in the business or trade of private respondents, they are, by express provision of Article 280 of the Labor Code, considered regular employees.

G.R. No. 72222 January 30, 1989 INTERNATIONAL CATHOLIC MIGRATION COMMISSION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and BERNADETTE GALANG, respondents. Facts: Petitioner International Catholic Migration Commission (ICMC), a non-profit organization dedicated to refugee service at the Philippine Refugee Processing Center in Morong, Bataan engaged the services of private respondent Bernadette Galang on January 24, 1983 as a probationary cultural orientation teacher with a monthly salary of P2,000.00. Three (3) months thereafter, private respondent was informed, orally and in writing, that her services were being terminated for her failure to meet the prescribed standards of petitioner as reflected in the 9

performance evaluation of her supervisors during the teacher evaluation program she underwent along with other newly-hired personnel. On August 1983, private respondent filed a complaint for illegal dismissal, unfair labor practice and unpaid wages against petitioner with the then Ministry of Labor and Employment, praying for reinstatement with backwages, exemplary and moral damages. On October 1983, after the parties submitted their respective position papers and other pleadings, the Labor Arbiter rendered his decision dismissing the complaint for illegal dismissal as well as the complaint for moral and exemplary damages but ordering the petitioner to pay private respondent the sum of P6,000.00 as payment for the last three (3) months of the agreed employment period pursuant to her verbal contract of employment. Dissatisfied, petitioner filed the instant petition. Petitioner maintains that private respondent is not entitled to the award of salary for the unexpired three-month portion of the probationary period since her services were terminated during such period when she failed to qualify as a regular employee in accordance with the reasonable standards prescribed by petitioner. Issue: Whether or not private respondent is a probationary employee? Held: The Court held, There is no dispute that private respondent was terminated during her probationary period of employment for failure to qualify as a regular member of petitioner's teaching staff in accordance with its reasonable standards. Records show that private respondent was found by petitioner to be deficient in classroom management, teacher-student relationship and teaching techniques. Failure to qualify as a regular employee in accordance with the reasonable standards of the employer is a just cause for terminating a probationary employee specifically recognized under Article 282 (now Article 281) of the Labor Code which provides thus: ART. 281. Probationary employment. Probationary employment shall not exceed six months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employer who has been engaged in a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employer in accordance with reasonable standard made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. A probationary employee, as understood under Article 282 (now Article 281) of the Labor Code, is one who is on trial by an employer during which the employer determines whether or not he is qualified for permanent employment. A probationary appointment is made to afford the employer an opportunity to observe the fitness of a probationer while at work, and to ascertain whether he will become a proper and efficient employee. The word "probationary", as used to describe the period of employment, implies the purpose of the term or period, but not its length. Being in the nature of a "trial period" the essence of a probationary period of employment fundamentally lies in the purpose or objective sought to be attained by both the employer and the employee during said period. The length of time is immaterial in determining the correlative rights of both in dealing with each other during said period. While the employer, as stated earlier, observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer, on the other, seeks to prove to the employer, that he has the qualifications to meet the reasonable standards for permanent employment. It is well settled that the employer has the right or is at liberty to choose who will be hired and who will be denied employment. In that sense, it is within the exercise of the right to select his employees that the employer may set or fix a probationary period within which the latter may test and observe the conduct of the former before hiring him permanently.

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G.R. No. 74246 January 26, 1989 MARIWASA MANUFACTURING, INC., and ANGEL T. DAZO, petitioners, vs. HON. VICENTE LEOGARDO, JR., in his capacity as Deputy Minister of Ministry of Labor and Employment judgment, and JOAQUIN A. DEQUILA, respondents. Facts: Private respondent Dequilla was hired on probation by petitioner Mariwasa Manufacturing, Inc. as a general utility worker on January 1979. Upon the expiration of the probationary period of six months, Dequila was informed by his employer that his work had proved unsatisfactory and had failed to meet the required standards. To give him a chance to improve his performance and qualify for regular employment, instead of dispensing with his service then and there, with his written consent Mariwasa extended his probation period for another three months from July to October 1979. His performance, however, did not improve and on that account Mariwasa terminated his employment at the end of the extended period. Dequila thereupon filed with the Ministry of Labor against Mariwasa a complaint for illegal dismissal and violation of Presidential Decrees Nos. 928 and 1389 but was dismissed by Ministry of Labor NCR and ruled that the termination of Dequila's employment was in the circumstances justified and rejected his money claims for insufficiency of evidence. On appeal to the Office of the Minister, however, said disposition was reversed and held that Dequila was already a regular employee at the time of his dismissal, therefore, could not have been lawfully dismissed for failure to meet company standards as a probationary worker. Issue: Whether or not private respondent is a probationary employee only? Held: The Court held, Art. 282 of the Labor Code, which provides that: Art. 282. Probationary Employment. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after probationary period shall be considered a regular employee.' The extension of Dequila's probation was ex gratia, an act of liberality on the part of his employer affording him a second chance to make good after having initially failed to prove his worth as an employee. Such an act cannot now unjustly be turned against said employer's account to compel it to keep on its payroll one who could not perform according to its work standards. The law, surely, was never meant to produce such an inequitable result. By voluntarily agreeing to an extension of the probationary period, Dequila in effect waived any benefit attaching to the completion of said period if he still failed to make the grade during the period of extension. The Court finds nothing in the law which by any fair interpretation prohibits such a waiver. And no public policy protecting the employee and the security of his tenure is served by prescribing voluntary agreements which, by reasonably extending the period of probation, actually improve and further a probationary employee's prospects of demonstrating his fitness for regular employment.

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G.R. No. 82918 March 11, 1991 LA SALETTE OF SANTIAGO, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and CLARITA JAVIER, respondents. Facts: Private respondent has been assigned to different administrative and teaching positions of the petitioners school system, a private school system, where private respondent was initially employed for three years as high school principal. In 1984 to 1986 private respondent was again assigned as the high school principal of the petitioner. After her term as high school principal she received a letter from the petitioner instructing her to report to La Sallete College and stating the person as her replacement as high school principal. Private respondent wrote a letter to the petitioner complaining of her sudden removal as high school principal but did not received any reply so she filed a complaint before the Labor Arbiter for illegal dismissal. The Labor Arbiter decided in her favor and the CA affirmed the decision of the Labor Arbiter. Issue: Whether or not private respondent had acquired permanency, or tenure in the position of high school principal of the educational system of La Salette of Santiago Inc.? Held: The Court held, according to Policy Instructions No. 11 issued by the Department of Labor and Employment, the probationary employment of professors, instructors and teachers shall be subject to standards established by the Department of Education and Culture. Said standards are embodied in paragraph 75 of the Manual of Regulations for Private Schools. Unlike teachers (assistant instructors, assistant, professors, associate professors, full professors) who aspire for and expect to acquired permanency, or security of tenure, in their employment, as faculty members, teachers who are appointed as department heads or administrative officials (e.g., college or department secretaries principals, directors, assistant deans, deans) do not normally, and should not expect to, acquire a second status of permanency, or an additional or second security of tenure as such officer. The acquisition of such an additional tenure, to repeat, is not consistent with normal practice, constitutes the exception rather than the rule, and may take place only where categorically and explicitly provided by law or agreement of the parties. Therefore, private respondent did not acquire permanency or tenure in the position of high school principal of the educational system of La Sallete of Santiago Inc.

G.R. No. 170181, June 26, 2008 Hanjin vs. Ibanez FACTS: Felicito Ibanez (tireman), Elmer Gacula (Crane Operator), Elmer Dagotdot (Welder), Aligwas Carolino (Welder), Ruel Calda (Warehouseman) filed a complaint at the NLRC for illegal dismissal with prayer for reinstatement and payment of backwages. The group alleged that the contract they have is good for three months, subject to automatic renewal if there is no notice of termination from Hanjin, and that the contract would automatically terminate upon the completion of the project. They further averred that during the time they were dismissed, the project was still ongoing and Hanjin hired people for the positions that they had vacated. Lastly, they also allege that they are entitled to a completion bonus as part of the industry practice and this was substantiated by past payroll payments. Hanjin failed to furnish a copy of the contract agreements with the dismissed group. Instead it showed the quitclaims that had been executed by the group that released Hanjin and its representatives from any claims with their employment. It contained clearance certificates that show that respondents are free from accountability. ISSUE: 12

WON the members of the dismissed group are project employees? HELD: No, Hanjin was unable to prove they were not regular employees. The rehiring of construction workers on a project to project basis does not confer upon them regular employment status, since their rehiring is only a natural consequence of the fact that experienced construction workers are preferred. Employees who are hired for carrying out a separate job, distinct from the other undertakings of the company, the scope and duration of which has been determined and made known to the employees at the time of the employment, are properly treated as project employees and their services may be lawfully terminated upon the completion of a project. Should the terms of their employment fail to comply with this standard, they cannot be considered project employees. Hanjin was unable to show the written contracts it had with the workers. While the absence of the contract does not grant permanent status it is the burden of the employer to prove that the employees were aware that their contract with the company is for per project only. While Hanjin submitted a termination report including the workers names to prove that the services of their services were only contracted for a per project basis, Hanjin only submitted one report. It was unable to disprove the allegation of the workers that they were part of a pool that Hanjin contacts once a project is to be completed. Employers cannot mislead their employees, whose work is necessary and desirable in the former's line of business, by treating them as though they are part of a work pool from which workers could be continually drawn and then assigned to various projects and thereafter denied regular status at any time by the expedient act of filing a Termination Report. This would constitute a practice in which an employee is unjustly precluded from acquiring security of tenure, contrary to public policy, morals, good customs and public order. Hanjin alleged that per Department Order 19, Series of 1993 of DOLE, the payment of completion bonus is further proof that the workers were only project employees as Hanjin is mandated by law to pay it to the temporary workers whose contracts are about to end upon the completion of the project. SC views the completion bonus terminology here reflectsthe fact that the project has already been completed and that is the premium they wished to pay. Quitclaims are viewed with disfavour, especially when a.There is clear proof that the waiver was wangled from an unsuspecting or gullible person b.Where the terms are unconscionable in its face.For quitclaims to be valid, it must constitute a reasonable settlement commensurate to their legal rights. It does not preclude them from seeking benefits they were entitled to suchas back wages.The respondents were also not granted the twin requirements of notice and hearing.

G.R. No. 71664, February 28, 1992 Baguio Country Club vs. NLRC Facts: Petitioner Baguio Country Club Corporation (corporation) is a recreational establishment certified by the ministry of labor and employment as an entertainment-service establishment. Private respondent Jimmy Calamba was employed by corporation on a day to day basis in various capacities as laborer and dishwasher for a period of ten months. Calamba was hired again as a gardener and rehired as such when he was dismissed by the petitioner corporation. Calamba filed a complaint against petitioner corporation with the ministry of labor (DOLE) for unfair labor practice, illegal dismissal and non-payment of 13th month pay. The executive labor arbiter ruled in favor of Calamba, declaring the latter as a regular employee and ordering petitioner corporation to reinstate Calamba to the position of gardener without loss of seniority and with full backwages, benefits and privileges from the time of his dismissal up to therein statement including 13th month pay. Petitioner corporation filed an appeal to the NLRC contending that Calamba was a contractual employee whose employment was for a fixed and specific period as set forth and evidenced by Calambas contracts of employment. However, the NLRC dismissed the appeal for lack of merit. The latter argued that Calamba having rendered services as laborer, gardener, and dishwasher for more than one year, was a regular employee at the time his employment was terminated. Hence, this petition. Issue: Whether or not Calamba is a regular employee at the time his employment was terminated? 13

Held: YES. The court held that 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. Also, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. In the case at bar, the records reveal that Calamba was repeatedly re-hired to perform tasks ranging from dishwashing and gardening, aside from performing maintenance work. Such repeated rehiring and the continuing need for his service are sufficient evidence of the necessity and indispensability of his service to the petitioners business or trade. Owing to Calambas length of service with the petitioners corporation, he became a regular employee, by operation of law, one year after he was employed. The employment contracts entered into by Calamba with the petitioner have the purpose of circumventing the employees security of tenure. The court therefore, rigorously disapproves said contracts which demonstrate a clear attempt to exploit the employee and deprive him of the protection sanctioned by the labor code. It is noteworthy that what determines whether a certain employment is regular or casual is not the will and word of the employer, it is the nature of the activities performed in relation to the particular business or trade considering all circumstances, and in some cases the length of time of its performance and its continued existence.

G.R. No. 149329, July 12, 2004 Pangilinan vs. General Milling Facts: General Milling Corporation is a domestic corporation engaged in the production and sale of livestock and poultry and is likewise the distributor of dressed chicken to various restaurants and establishments nationwide. It employs hundreds of employees, some on a regular basis and others on a casual basis, as emergency workers. Petitioners in this case were employed by GMC on different dates as emergency workers under separate temporary/casual contracts of employment for a period of five months. Upon the expiration of their respective contracts, their services were terminated. They later filed separate complaints for illegal dismissal and non-payment of particular fees. Petitioners allege that there work as chicken dressers was necessary and desirable in the usual business of GMC. They stressed that based on the nature of their work, they were regular employees of the respondent, and therefore they could not be dismissed from their employment unless for just case and after due notice. They made further assertions that GMC terminated their contract of employment without just cause and due notice and that GMC could not rely on the nomenclature of their employment as temporary casual. The Labor Arbiter ruled in favour of the petitioners, holding that they were regular employees and that they were illegally dismissed. Upon appeal to the NLRC, the latter reversed the decision of the Labor Arbiter and held that the petitioner, who were temporary or contractual employees were legally terminated upon the expiration of their respective contracts, citing the case of Brent School, Inc. vs Zamora where it was held that while petitioners work was necessary and desirable in the usual business of GMC, they cannot beconsidered as regular employees for having agreed to a fixed term. The Court of Appeals affirmed the decision of the NLRC. Issue: WON the petitioners were regular employees of GMC when their employment was terminated? Held: No. The petitioners were employees with a fixed period, and, as such, were not regular employees. There are two separate instances whereby it can be determined that an employment is regular: (1) if the particular activity performed by the employee is necessary or desirable in the usual business or trade of the 14

employer; and (2) if the employee has been performing the job for at least a year. In the case of St. Theresas School of Novaliches Foundation vs NLRC, it was held that Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period. It does not necessarily follow that where the duties of the employee consist of activities usually necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on a period of time for the performance of such activities. Records reveal that the stipulations in the employment contracts were knowingly and voluntarily agreed to by the petitioners without force, duress or improper pressure, or any circumstances that vitiated their consent. While the petitioners employment as chicken dressers is necessary and desirable in the usual business of the respondent, they were employed on a mere temporary basis, since their employment was limited to a fixed period. As such, they cannot be said to be regular employees, but are merely contractual employees. Consequently, there was no illegal dismissal when their services were terminated. Lack of notice of termination is of no consequence, because the it was specified in the contract when it shall expire.

G.R. No. 149859, June 9, 2004 Alcira vs. NLRC Facts: Petitioner Radin C. Alcira was hired by respondent Middle by as engineering support services supervisor on a probationary period for six months. Despite the indication of probationary period in the appointment paper, the dates indicated in the copies in the possession of the petitioner and the respondent, were different, May 20, 1996 and May 27, 1996, respectively. On November 20, 1996, unhappy with petitioners performance, respondent Midde by terminated the formers services. But according to the petitioner he is already a regular employee effective November 16,1996, using Article 13 of the Civil Code that one month is composed of 30 days, six months total 180 days. Hence, using May 20, 1996 as the reference point, it was already considered a dismissal since it was made after the lapse of his probationary employment. Issue: WON PROBATIONARY EMPLOYMENT IS EMPLOYMENT FOR A DEFINITE PERIOD? Held: Section 6 (d) of Rule 1 of the Implementing Rules of Book VI of the Labor Code (Department Order No. 10, Series of 1997) provides that: In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee. We hold that respondent Middle by substantially notified petitioner of the standards to qualify as a regular employee when it apprised him, at the start of his employment, that it would evaluate his supervisory skills after five months. Conversely, an employer is deemed to substantially comply with the rule on notification of standards if he apprises the employee that he will be subjected to a performance evaluation on a particular date after his hiring. We agree with the labor arbiter when he ruled that: In the instant case, petitioner cannot successfully say that he was never informed by private respondent of the standards that he must satisfy in order to be converted into regular status. This runs counter to the agreement between the parties that after five months of service the petitioners performance would be evaluated. It is only but natural that the evaluation should be made vis--vis the performance standards for the job. Private respondent Trifona Mamaradlo speaks of such standard in her affidavit referring to the fact that petitioner did not perform well in his assigned work and his attitude was below par compared to the companys standard required of him.

G.R. No. 113166, February 1, 1996 Samson vs. NRLC, Facts: 15

Petitioner had been working for respondent Atlantic Gulf and Pacific Co. Manila for approximately 28 years and his project-to-project employment was renewed several times. His successive contracts of employment required him to perform virtually the same kind of work throughout his period of employment. Petitioner would be re-hired immediately, some for a gap of one day to one week from the last project to the succeeding one.

Issue: Whether or not petitioner is a regular employee? Held: Article 281 of the Labor Code pertinently prescribes that the provisions of written agreement to the contrary notwithstanding and regardless of the oral agreements of the parties, 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. Where from the circumstances it appeared that periods have been imposed to preclude the acquisition of tenurial security by the employee, they should be struck down as contrary to public policy, morals, good customs, or public order. There can be no escape from the conclusion that the employee is a regular employee of the respondent.

Euro-Linea Phil, Inc. vs. NLRC G.R. No. 78782 December 1 , 1987 Laborers Welfare: Liberal Approach Facts: Petitioner Euro-Linea Phil, Inc hired private respondent Pastoral as shipping expediter on a probationary basis for a period of six months. Prior to hiring by petitioner, Pastoral had been employed by Fitscher Manufacturing Corporation also as shipping expediter. On 4 February 1984, Pastoral received a memorandum terminating his probationary employment in view of his failure to meet the performance standards set by the company. Pastoral filed a complaint for illegal dismissal against petitioner. On 19 July 1985, the Labor Arbiter found petitioner guilty of illegal dismissal. Petitioner appealed the decision to the NLRC on 5 August 1985 but the appeal was dismissed. Hence the petition for review seeking to reverse and set aside the resolution of public respondent NLRC, affirming the decision of the Labor Arbiter, which ordered the reinstatement of complainant with six months backwages. Issue: Whether or not the National Labor Relations Commission acted with grave abuse of discretion amounting to excess of jurisdiction in ruling against the dismissal of the respondent, a temporary or probationary employee, by his employer? Held: There is no dispute that failure to qualify as a regular employee in accordance with reasonable standards prescribed by the employer is a ground to terminate an employee engaged on a probationary basis (Art. 282, Labor Code; Bk. VI, Rule 1, Section 6(c), Implementing Rules, Labor Code). In this case, petitioner alleged that Pastoral was dismissed because he failed to meet its performance standard. However, petitioner did not bother to cite particular acts or instances in its position paper which show that Pastoral was performing below par. Petitioner's performance as shipping expediter can readily be gauged from specific acts as may be gleaned from his duties enumerated by petitioner to include processing of export and import documents for dispatch or release and talking to customs personnel regarding said documents. 16

Furthermore, what makes the dismissal highly suspicious is the fact that while petitioner claims that respondent was inefficient, it retained his services until the last remaining two weeks of the six months probationary employment. No less important is the fact that private respondent had been a shipping expediter for more than one and a half years before he was absorbed by petitioner. It therefore appears that the dismissal in question is without sufficient justification.

G.R. No. 78693 January 28, 1991 Cielo vs. NLRC Facts: The petitioner is a truck driver who claims he was illegally dismissed by the private respondent, the Henry Lei Trucking Company. Petitioner were made to sign an agreement with the private respondent that they dont have an employer-employee relationship but in an affidavit that petitioner is being forced to sign states that he received his salary and allowanced from the private respondent. Upon refusal to sign, private respondent dismissed petitioner on the basis of disrespect and insubordination. Issue: Whether or not petitioner was legally dismissed? Held: The private respondent's argument that the petitioner could at least be considered on probation basis only and therefore separable at will is self-defeating. The Labor Code clearly provides as follows: Art. 281. Probationary employment. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. There is no question that the petitioner was not engaged as an apprentice, being already an experienced truck driver when he began working for the private respondent. Neither has it been shown that he was informed at the time of his employment of the reasonable standards under which he could qualify as a regular employee. It is plain that the petitioner was hired at the outset as a regular employee. At any rate, even assuming that the original employment was probationary, the Labor Arbiter found that the petitioner had completed more than six month's service with the trucking company and so had acquired the status of a regular employee at the time of his dismissal.

G.R. No. 73806 March 21, 1990 TACLOBAN SAGKAHAN RICE and CORN MILLS, CO. vs. NLRC Facts: Private respondents were workers in the rice and corn mill of the petitioner. Respondents have been employed for approximately 15 years at the most for each respondent. Sometime in 1983, petitioner terminated the employment of the respondents stating that there is no more palay to mill. Respondents theny filed for illegal dismissal and demanded separation pay. Petitioner alleged that respondents are not regular employees but merely seasonal employees and further alleged that respondents are guilty of abandonment despite of repeated demands by the petitioner for the respondent to return to work. Issue: Whether or not respondents are regular employees and are guilty of abandonment? 17

Held: The evidence on record has established that private respondents Carlito Codilan and Maximo Docena had been working for petitioners for 25 years, respondent Eugenio Go for 22 years, respondent Teofilo Trangria for 15 years and respondent Reynaldo Tulin for 6 years. Aside from their lengthy service, it should be noted that private respondents' employment was not fixed for a specific project or undertaking the completion or termination of which has been determined at the time of their appointment or hiring. Likewise, it must be borne in mind that petitioners never rebutted private respondents' claim that they performed activities usually necessary or desirable in the usual business of the former. Furthermore, the services performed or to be performed by private respondents are not seasonal in nature. While it may be true that the harvest of palay is seasonal, the milling operations which is the main business of petitioners are not seasonal. The fact is that big rice mills such as the one owned by petitioners continue to operate and do business throughout the year even if there are only two or three harvest seasons within the year. It is a common practice among farmers and rice dealers to store their palay and to have the same milled as the need arises. Thus, the milling operations have no let-up.

G.R. No. 67664 May 20, 1992 ANANIAS PANDAY vs. NATIONAL LABOR RELATIONS COMMISSION Facts: Sometime in December, 1977 complainant was called by Martin Gaw, the owner-manager of respondent who instructed him to cut off the living allowance of the employees starting January 1, 1978. Complainant requested that a memorandum to this effect be made so that he would not be blamed by the workers. Respondent's manager got angry and shouted "what for is the memorandum? I am telling you to do so." At this point the General Manager suddenly butted in saying in a raised voice, "Ano ba talaga Naning (complainant) ang ibig mong sabihin? Sa tuwing magsasalita ka, panay ka "policy" ng companya at panay ka records". From the time of that incident complainant was deprived of free light. He was no longer given any accounting work. His per diem was abruptly cut off. All that was left for him to do was the simple clerical job of registering or paying SSS premiums. Still complainant continued to bear it out. In 1979, however he was totally divested of all his duties and he was compelled to approach Manager Martin Gaw to clear up matters. The latter referred him to Mr. Gerry Lumban who was supposed to give him some work to do. It turned out, however, that no such instructions were given to said Mr. Lumban. There was a time when respondent unduly delayed complainant's salary and he sought the help of the Public Assistance Office of Ilagan, Isabela, which resulted to an agreement wherein respondent promised to continue giving complainant his wages (Annex "A"). On April 12, 1979 complainant filed a request f or vacation leave with pay for 15 days from April 1430, 1979. On that same day he brought his son to Manila for medical treatment and stayed there up to the end of the month. Upon his return to Isabela, he asked for his salaries only to learn that his application for leave was disapproved. (Annex "B"). Hence, he filed this case for illegal dismissal, non-payment of 13th month pay for 1977, emergency allowance under P.D. 525 since 1975 up to 1977 and unpaid wages for April 16-30, 1979. Issue: Whether or not breach of trust of the respondent of the petitioner is justifiable legal termination of the petitioner? Held: The Court held, it has already been settled that there was indeed an illegal dismissal. However, from the facts of the case, we regret that we cannot order reinstatement. We agree with the Deputy Minister that "complainant as branch accountant occupied a position involving trust and confidence and in the light of the estranged relation between the complainant and the respondent that may not permit the full restoration of an employment relationship based on trust and confidence, we have to allow termination of the employer18

employee relationship but upon the payment of separation pay equivalent to one-half (1/2) month for every year of service rendered." 3-Year Rule and Exceptions (Awarding of Backwages) Obviously, the employer in this case was in bad faith when it ordered the petitioner to cut the other employees' living allowances. More so, when the petitioner requested for written authority to effect the said management order which management refused so that blame would be laid on the petitioner. This started harassment activities and the withdrawal of the petitioner's benefits, usual workload, and responsibilities. Moreover, the case has already dragged on for several years to the prejudice of the petitioner. In our previous decided case we adopted the policy of fixing the amount of backwages to a just and reasonable level without qualification and deduction to do away with the attendant delay in awarding backwages because of the extended hearing to prove the earnings elsewhere of each and every employee. Under this policy we have consistently awarded backwages to the maximum of only three (3) years. However, considering the peculiar circumstances of the present case, we cannot apply the three-year backwages rule. Neither shall we apply Republic Act 6715 which provides that backwages shall be awarded to cover the period from dismissal to the employer's date of actual reinstatement because said law has no retroactive effect. Instead, we adopt the principle in the case of New Manila Candy Workers Union (Naconwa-Paflu) v. Court of Industrial Relations, 86 SCRA 37 [1978], where five years backwages were awarded "on account of the employer's unfair labor practices and the long number of years during which the workers have been deprived of their work and their wages."

G.R. No. L-101438 October 13, 1992 Cathedral School of Technology vs. NLRC Facts: Initially, private respondent joined the Congregation of the Religious of Virgin Mary (RVM), which manage the Cathedral School of Technology, to be a nun. After sometime she decided not be a nun instead she worked as library aide for the said school. But due to unfavorable behavior and attitude of the private respondent, as according to complaints received against her, her attention was called but instead of heeding the advice of her superior she was arrogant to accept her fault. Because of her unlikely behavior she was given a 30-day notice of termination until such time she was not allowed to enter the school premises. Aggrieved, she filed for illegal dismissal against petitioner before the NLRC. The Labor Arbiter as affirmed by the NLRC ruled in her favor assailing that the dismissal was illegal due to lack of due process. Issue: Whether or not lack of due process is a valid ground for illegal dismissal? Held: The Court held, the existence of an employer-employee relationship is essentially a factual question and the respondent commission's findings thereon are accorded great weight and respect and even finality when the same are supported by substantial evidence. We find no reason to overrule the same. An evaluative review of the records of this case nonetheless supports a finding of a just cause for termination. The reason for which private respondent's services were terminated, namely, her unreasonable behavior and unpleasant deportment in dealing with the people she closely works with in the course of her employment, is analogous to the other "just causes" enumerated under the Labor Code, as amended: Art. 282. Termination by employer. An employer may terminate an employment for any of the following just causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (b) Gross and habitual breach by the employee of his duties; 19

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) Other causes analogous to the foregoing. On the matter of illegal dismissal, petitioners do not dispute the findings, and in effect admit, that private respondent was denied her right to due process. As found by the labor arbiter, no hearing on the impending dismissal was conducted as would have afforded private respondent an opportunity to explain her side and, if need be, to defend herself. True, petitioners notified her of the school's decision to terminate her services. But notice alone, without the requisite hearing does not suffice. Albeit with some ambiguity which will hereafter be clarified, this Court has held that: Under the Labor Code, as amended, the requirements of lawful dismissal of an employee by his employer are two-fold: the substantive and the procedural. Not only must the dismissal be for a valid or authorized cause as provided by law (Arts. 279, 281, 282-284), but the rudimentary requirements of due process notice and hearing must also be observed before an employee may be dismissed (Art. 277 [b]). One cannot go without the other, for otherwise the termination would, in the eyes of the law, be illegal. Nevertheless, we find no merit in public respondent's ratiocination, quoting the labor arbiter, that: It is likewise the finding (of) and this Branch so holds that complainant was illegally dismissed. This finding is anchored on the lack of due process. In this case complainant was not afforded the opportunity to defend herself in a hearing called for the purpose. She was just summarily dismissed contrary to the provision(s) of Batas Pambansa Bilang 130 and its Implementing Rules. Clearly, therefore, its ruling that private respondent was illegally dismissed was premised solely on the fact of alleged lack of procedural due process, without regard to whether or not there was lawful cause for such dismissal, which latter aspect constitutes the element of substantive due process. We accordingly proceed to resolve the issue that is thereby presented. It is the contention of petitioners that dismissal for cause but without due process does not warrant an order for reinstatement or separation pay, as the case may be nor of backwages, for these are sanctions that pertain to dismissals without just cause. On the other hand arbitrary dismissal for just cause only warrants an award of indemnity for the dismissed employee. We grant our imprimatur to this submission of petitioners, just as we view with disfavor public respondent's intransigence on the matter in this and other cases despite our pronouncements thereon. It is true that, exceptionally and as an equitable concession, separation pay may be allowed as a measure of social justice but only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. However, such exceptional circumstance does not obtain in the present case. In Section 7, Book VI of the Implementing Rules of the Labor Code which expressly states that: Sec. 7. That just causes for terminating the services of an employee shall be those provided in Article 282 of the Code. The separation from work of an employee for a just cause does not entitle him to the termination pay provided in the Code, without prejudice, however, to whatever rights, benefits and privileges he may have under the applicable individual or collective bargaining agreement with the employer or voluntary employer policy or practice.

G.R. No. 83239 March 8, 1989 PHILIPPINE JAPAN ACTIVE CARBON CORPORATION vs. NATIONAL LABOR RELATIONS COMMISSION Facts: The private respondent, who had been employed in petitioner corporation since January 19, 1982, as Assistant Secretary/Export Coordinator, was promoted on May 20, 1983 to the position of Executive Secretary to the Executive Vice President and General Manager. On May 31, 1986, for no apparent reason at all and without prior notice to her, she was transferred to the Production Department as Production Secretary, 20

swapping positions with Ester Tamayo. Although the transfer did not amount to a demotion because her salary and workload remained the same, she believed otherwise so she rejected the assignment and filed a complaint for illegal dismissal. The Labor Arbiter found, on the basis of the evidence of both parties, that the transfer would amount to constructive dismiss hence, her refusal to obey the transfer order was justified. In her comment to the petition, the private respondent argued that she was dismissed without due process because she was not given the opportunity to be heard concerning the causes of her transfer. Issue: Whether or not private respondent has been constructively discharged/dismissed? Held: The Court held, a constructive discharge is defined as: "A quitting because continued employment is rendered impossible, unreasonable or unlikely; as, an offer involving a demotion in rank and a diminution in pay." In this case, the private respondent's assignment as Production Secretary of the Production Department was not unreasonable as it did not involve a demotion in rank (her rank was still that of a department secretary) nor a change in her place of work (the office is in the same building), nor a diminution in pay, benefits, and privileges. It did not constitute a constructive dismissal. It is the employer's prerogative, based on its assessment and perception of its employees' qualifications, aptitudes, and competence, to move them around in the various areas of its business operations in order to "ascertain where they will function with maximum benefit to the company. An employee's right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal.

G.R. No. L-51632 September 7, 1989 PEPSICO, INC. vs. NATIONAL LABOR RELATIONS COMMISSION Facts: Jose S. Lapid occupied the position of "Director of Leasing" in petitioner firm, PEPSICO, Inc. Having been discovered that he had purchased for PEPSICO various types of machinery and equipment which he represented to be brand new but which, on subsequent inspection were discovered to be if not second-hand, over-valued, and that of twenty-four (24) lease agreements he had executed as PEPSICO's Director of Leasing, fourteen (14) had turned out to be "bad accounts," all said transactions involving an amount of more than P7 million, his employer terminated his services on account of loss of confidence in his competence and reliability. Thereafter, Lapid, through an attorney, wrote to PEPSICO requesting that he be reinstated or, alternatively, that he be allowed to retire under the company's retirement plan. His request was turned down, PEPSICO asserting that as shown by indubitable documentary evidence, he had "been grossly and habitually negligent in processing a number of leasing agreements with company customers ... and such gross and habitual neglect on ... (his part in the) performance of his duties (had) resulted in enormous losses to the company for which reason the latter could no longer retain him in its employ." Issue: Whether or not private respondents dismissal is valid on the basis of incompetence and negligence on his part? Held: The Court held, the private respondent being managerial employee attaches with him the trust and confidence of the employer and the lost of it could be a valid ground for his dismissal. 21

The evidence of his incompetence and negligence, is equally convincing; he had bought machinery which he represented to his employer as brand new but which was later discovered to be second-hand; he had foisted a fictitious supplier upon the company; he had purchased equipment at prices higher than those of the same type quoted to him by other sellers; he had caused enormous losses to his employer. These facts suffice by any standards to cause his employer to lose trust and confidence in him, in his ability and his trustworthiness, justifying his dismissal from employment, a dismissal which, it must be added, concerning as it did a managerial employee, required no prior clearance from the Department of Labor.

G.R. No. 72977 December 21, 1988 BIENVENIDO R. BATONGBACAL, petitioner, vs. ASSOCIATED BANK Facts: Petitioner Bienvenido R. Batongbacal, a lawyer who was admitted to the Bar in 1952, began his banking career in 1961 as manager of the Second Rizal Development Bank and from them on he had worked to several banking institutions and the last being the Associated Bank as assistant vice-president. on March 15,1983, because of the banks financial loses and reverses, the bank's board of directors met and approved a resolution stating that, the new management be given the necessary flexibility in streamlining the operations of the Bank and for the purpose it is hereby resolved that the Bank officers at the Head Office and the Branches with corporate rank of Manager and higher be required, as they hereby are required to submit immediately to the President their courtesy resignations. But petitioner did not submit his courtesy resignation. But nevertheless, he received a letter accepting his resignation. He asked for reconsideration of his termination/resignation but it was denied so he filed for illegal dismissal before the NLRC. The Labor Arbiter ruled in his favor ordering the respondent bank to reinstate petitioner and to pay salary differentials. But NLRC reversed the decision of the Labor Arbiter. Issue: Whether or not petitioner was illegally dismissed for courtesy resignation not really of his own? Held: The Court held, while it may be said that the private respondent's call for courtesy resignations was prompted by its determination to survive, we cannot lend legality to the manner by which it pursued its goal. By directing its employees to submit letters of courtesy resignation, the bank in effect forced upon its employees an act which they themselves should voluntarily do. It should be emphasized that resignation per se means voluntary relinquishment of a position or office. Adding the word "courtesy" did not change the essence of resignation. That courtesy resignations were utilized in government reorganization did not give private respondent the right to use it as well in its own reorganization and rehabilitation plan. There is no guarantee that all employers will not use it to rid themselves arbitrarily of employees they do not like, in the guise of "streamlining" its organization. On the other hand, employees would be unduly exposed to outright termination of employment which is anathema to the constitutional mandate of security of tenure. Petitioner's dismissal was effected through a letter "accepting" his resignation. Private respondent rationalizes that this was done, even if petitioner did not actually submit such letter, so as not to jeopardize his chances of future employment. But it is also clear from its pleadings that private respondent terminated petitioner's employment for insubordination in view of his failure to comply with the order to submit his letter of courtesy resignation. We hold, however, that insubordination may not be imputed to one who refused to follow an unlawful order. Private respondent asserts that petitioner's refusal to submit his letter of courtesy resignation was "sufficient reason to distrust him." Loss of confidence as a ground for dismissal must be supported by satisfactory evidence. Even with respect to managerial employees who, under Policy Instructions No. 8, may be dismissed for lack of confidence, loss of trust must be substantiated and clearly proven. The record fails to show any valid reasons for terminating the employment of petitioner. There are no proofs of malfeasance or misfeasance committed by petitioner which jeopardized private respondent's 22

interest. The latter's allegations that petitioner was "purged" because he sabotaged the bank 15 and that he "contributed, directly or indirectly" to its downfall 16 are mere subjective conclusions unsubstantiated by hard facts. To clothe with legality petitioner's dismissal for his failure to submit his letter of courtesy resignation is to add a ground for termination of employment to the provisions of the Labor Code.

G.R. No. 81493 April 3, 1990 SUPERSTAR SECURITY AGENCY, INC. vs. NATIONAL LABOR RELATIONS COMMISSION Facts: On June 24, 1981, Filomena Hermosa (Hermosa, for short) was hired by petitioner Superstar Security Agency (Agency, for short) as a Security Guard. She was assigned to different detachments in premises owned by the Agency's clients. On February 1, 1985, the Agency placed Hermosa on a temporary "off-detail." On March 5, 1985, Hermosa filed a complaint for illegal dismissal. She claimed that she was unceremoniously dismissed on suspicion that she was the author of an anonymous report about the irregularities committed by her fellow lady security guards. Issue: Whether or not the petitioners are guilty of illegal dismissal? Held: The Court held, we resolve the issue in the negative. The charge of illegal dismissal was prematurely filed. The records show that a month after Hermosa was placed on a temporary "off-detail," she readily filed a complaint against the petitioners on the presumption that her services were already terminated. Temporary "off-detail" is not equivalent to dismissal. In security parlance, it means waiting to be posted. However, it must be emphasized that such temporary inactivity should continue only for six months. Otherwise the security agency concerned could be liable for constructive dismissal under Article 287.

G.R. No. L-75656 May 28, 1990 YUCO CHEMICAL INDUSTRIES, INC., petitioner, vs. MINISTRY OF LABOR AND EMPLOYMENT Facts: In 1978, private respondents (complainants) George Halili and Amado Magno were employed by petitioner company which is engaged in the manufacture/assembly of ice boxes in Barangay Matatalaib, Tarlac, Tarlac. They were assigned to make aluminum handles for the ice boxes. On August 12,1981, after obtaining a favorable legal opinion from the Tarlac provincial office of MOLE concerning the legality of moving the production of aluminum handles from Tarlac to Manila, petitioner addressed a memorandum to private respondents directing them to report for work within one week from notice at their new place of work at Felix Huertas Street, Sta. Cruz, Manila. The memorandum further stated that private respondents would be paid with a salary of P27.00 and an additional allowance of P2.00 "to meet the higher cost of living in Manila. A day after or on August 13, 1981, instead of complying with the memorandum, private respondents filed a complaint with the provincial labor office for illegal dismissal, 13th month pay and service incentive leave pay. Issue: Whether or not the transfer of employee is a valid transfer? Held: First, some general principles on transfer. In a number of cases, the Court has recognized and upheld the prerogative of management to transfer an employee from one office to another within the business 23

establishment provided that there is no demotion in rank or a diminution of his salary, benefits and other privileges. This is a privilege inherent in the employer's right to control and manage its enterprise effectively. Even as the law is solicitous of the employees' welfare, it cannot ignore the right of the employer to exercise what are clearly and obviously management prerogatives. The freedom of management to conduct its business operations to achieve its purpose cannot be denied . But like all other rights, there are limits. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion and putting to mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which that right must be exercised. Thus it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. Nor when the real reason is to penalize an employee for his union activities and thereby defeat his right to self-organization. But the transfer can be upheld when there is no showing that it is unnecessary, inconvenient and prejudicial to the displaced employee.

G.R. No. 78491 March 16, 1989 STARLITE PLASTIC INDUSTRIAL CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and EDGAR GOMEZ, respondents. Facts: Private respondent GOMEZ was employed as a factory worker by STARLITE sometime in March 1981. On 22 June 1984, STARLITE dismissed him on the ground that he was caught attempting to steal one ballast costing P80.00. STARLITE reported the matter to the police on 19 July 1984, after grievance meetings failed to resolve the controversy. A criminal complaint was filed against GOMEZ, but the investigating fiscal dismissed the same saying that STARLITE failed to establish a prima facie case against GOMEZ. On 13 August 1983, private respondent GOMEZ filed a complaint for illegal dismissal against STARLITE. After the parties submitted their respective position papers, the Labor Arbiter rendered his decision on 15 January 1985 dismissing the complaint for lack of merit. GOMEZ appealed the decision to the public respondent NLRC which in a decision dated 18 February 1987 reversed the ruling of the Labor Arbiter. In contending that the decision of the public respondent NLRC was rendered in grave abuse of discretion petitioner argues that the act of dishonesty of GOMEZ led petitioner to lose its trust and confidence in him and is more than sufficient to justify his dismissal. Issue: Whether or not private respondent was illegal dismissed on the basis of drop complaint? Held: The Court held, at the outset, the Court finds it necessary to emphasize that contrary to the tenor of the Labor Arbiter's decision, a dismissed employee is not required to prove his innocence of the charges levelled against him by his employer. The Court has laid down the rule that in termination cases, the burden of proving the just cause of dismissing an employee rests on the employer and his failure to do so would result in a finding that the dismissal is unjustified. The Court, however, has time and again stressed that the right of an employer to dismiss employees on the ground that it has lost its trust and confidence in him must not be exercised arbitrarily and without just cause; that although the dropping of a criminal prosecution for an employee's alleged misconduct does not bar his dismissal and proof beyond reasonable doubt is not necessary to justify the same, still the basis thereof must be clearly and convincingly established. Further, loss of confidence should not be simulated. It should not be used as a subterfuge for causes which are improper, illegal or unjustified. Loss of confidence may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. It must be genuine, not a mere afterthought to justify earlier action taken in bad faith. Applying the foregoing legal precepts to the pertinent facts, the Court finds that there was utter failure here to establish or substantiate the theft charge against GOMEZ. The public respondent NLRC found, amply supported by the record, that contrary to the Labor Arbiter's findings that GOMEZ "failed to present an 24

iota of evidence to prove his innocence," GOMEZ indeed presented exculpatory evidence consisting of the statements of his co-employees. In view of the finding that GOMEZ was dismissed illegaly, STARLITE is obligated to reinstate GOMEZ to his former position or one reasonably equivalent thereto without loss of seniority rights, and to pay backwages for three years, without qualification or deduction.

G.R. No. 100969 August 14, 1992 CARLO RANARA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, ORO UNION CONSTRUCTION SUPPLY AND/OR JIMMY TING CHANG, GENERAL MANAGER/OWNER, respondents. Facts: Petitioner was employed as company driver by the private respondent. Sometime in November 1989 he was informed not to report to work anymore but thinking that it was only a joke from their secretary, he reported to work the following day only to find out that indeed hes employment had been terminated. Thus, petitioner filed for illegal dismissal reinstatement with full back wages, underpayment of wages, overtime pay, non-payment of 13th month pay, service incentive leave, separation pay and moral damages before the DOLE. Private respondent in his defense alleged that petitioner was not illegally dismissed but rather abandoned his employment. But investigation showed the contrary. Respondents allegation that he instructed the petitioner to report to work only after learning that petitioner had filed a complaint for illegal dismissal. Issue: Whether or not petitioners allegation of illegal dismissal is tenable after being instructed to report to work after his filing of complaints for illegal dismissal? Held: The Court held, we reject as a rank falsity the private respondents' claim that the petitioner had not been illegally dismissed and in fact abandoned his work. It is clear that the petitioner was illegally dismissed without even the politeness of a proper notice. Without cause and without any investigation, formal or otherwise, Ranara was simply told that he should not report back for work the following day. When he did so just the same, thinking she had only spoken in jest, he found that somebody else had been employed in his place. When he protested his replacement, he was even scolded for being "hard-headed" and not accepting his dismissal. The fact that his employer later made an offer to re-employ him did not cure the vice of his earlier arbitrary dismissal. The wrong had been committed and the harm done. Notably, it was only after the complaint had been filed that it occurred to Chang, in a belated gesture of good will, to invite Ranara back to work in his store. Chang's sincerity is suspect. We doubt if his offer would have been made if Ranara had not complained against him. At any rate, sincere or not, the offer of reinstatement could not correct the earlier illegal dismissal of the petitioner. The private respondents incurred liability under the Labor Code from the moment Ranara was illegally dismissed, and the liability did not abate as a result of Chang's repentance.

G.R. NO. 103215 November 6, 1992 MARANAW HOTELS AND RESORTS CORPORATION (CENTURY PARK SHERATON MANILA), petitioner, vs. COURT OF APPEALS, HON. SANTIAGO O. TAADA (Voluntary Arbitrator) and GREGORIO GALE, respondents. Facts: For blurting out offensive remarks against his supervisors in their absence but promptly reported to them, private respondent Gregorio Gale, a roomboy at the five-star Century Park Sheraton Manila owned and operated by petitioner Maranaw Hotels and Resorts Corporation, was dismissed for "discourtesy and use of disrespectful and impolite language against a superior which constitutes gross misconduct." 25

Gregorio Gale subsequently instituted a complaint for illegal dismissal which, conformably with their collective bargaining agreement, was then submitted to retired Judge Santiago O. Taada for voluntary arbitration. The voluntary arbiter ruled that the private respondent be reinstated. However, petitioner contends that they can no longer reinstate private respondent due to strained relation with the private respondent. Issue: Whether or not petitioner can no longer be reinstated due to strained relation? Held: The Court held, we do not agree with petitioner's submission that private respondent's reinstatement will not conduce to industrial peace and harmony in the hotel due to strained relations. Simply, the cases cited by petitioner are misplaced. We are not unmindful of the "strained relations" brought about by the filing of the case and the underlying causes. Indeed, relations may have become acrimonious and hostile. However, the doctrine of strained relations cannot be applied with impunity lest We trifle with the rights of wage earners by authorizing management to indiscriminately dismiss them and thereafter provide the employer with the convenient and ready excuse not to reinstate them. On the contrary, We have to exercise extreme caution in this regard. As the Court reasoned in Globe-Mackay Cable and Radio Corporation v. NLRC Obviously, the principle of strained relations' cannot be applied indiscriminately. Otherwise, reinstatement can never be possible simply because some hostility is invariably engendered between the parties as a result of litigation. That is human nature. Indeed, "strained relations" may be invoked only against employees whose positions demand trust and confidence, or whose differences with their employer are of such nature or degree as to preclude reinstatement. In the instant case, however, the relationship between private respondent, a roomboy, and management was clearly on an impersonal level. Gale did not occupy such a sensitive position as would require complete trust and confidence, where personal ill will would preclude his reinstatement. Hence, in Panday v. NLRC 14 We ruled that "[i]f the respondent had been a laborer, clerk or other rank-and-file employee, there would be no problem in ordering her reinstatement with facility." Neither is the enmity of such degree as to prevent private respondent's reinstatement. 3-Year Rule and Exceptions (Awarding of Backwages) In the case at bar, since the illegal dismissal of private respondent occurred on 4 December 1987, or before R.A. 6715 took effect on 21 March 1989, he is entitled only to three (3) years' backwages, inclusive of all allowances and other benefits, without deducting any remunerations he may have received as member of the Armed Forces of the Philippines, or from any other employment, and not to his full wages from the time he was dismissed up to the present. Certainly, private respondent cannot be allowed to receive salary from petitioner for the whole duration that he was not working as roomboy by reason of his unjust dismissal, while at the same time, draw compensation as member of the Armed Forces of the Philippines which would not have been possible had he continued to work for petitioner; for that would be unjust enrichment. Consequently, if private respondent already received more than what he is entitled to in accordance herewith, he should reimburse petitioner such amount in excess of what is due him; otherwise, petitioner should make good the corresponding deficiency.

G.R. No. 118651 October 16, 1997 PIONEER TEXTURIZING CORP. and/or JULIANO LIM, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, PIONEER TEXTURIZING WORKERS UNION and LOURDES A. DE JESUS, respondents. Facts: Private respondent Lourdes A. de Jesus is petitioners' reviser/trimmer since 1980. As reviser/trimmer, de Jesus based her assigned work on a paper note posted by petitioners. The posted paper which contains the 26

corresponding price for the work to be accomplished by a worker is identified by its P.O. Number. On August 15, 1992, de Jesus worked on P.O. No. 3853 by trimming the cloths' ribs. She thereafter submitted tickets corresponding to the work done to her supervisor. Three days later, de Jesus received from petitioners' personnel manager a memorandum requiring her to explain why no disciplinary action should be taken against her for dishonesty and tampering of official records and documents with the intention of cheating as P.O. No. 3853 allegedly required no trimming. The memorandum also placed her under preventive suspension for thirty days starting from August 19, 1992. In her handwritten explanation, de Jesus maintained that she merely committed a mistake in trimming P.O. No. 3853 as it has the same style and design as P.O. No. 3824 which has an attached price list for trimming the ribs and admitted that she may have been negligent in presuming that the same work was to be done with P.O. No. 3853, but not for dishonesty or tampering. Petitioners' personnel department, nonetheless, terminated her from employment and sent her a notice of termination dated September 18, 1992. On September 22, 1992, de Jesus filed a complaint for illegal dismissal against petitioners. The Labor Arbiter who heard the case noted that de Jesus was amply accorded procedural due process in her termination from service. Nevertheless, after observing that de Jesus made some further trimming on P.O. No. 3853 and that her dismissal was not justified, the Labor Arbiter held petitioners guilty of illegal dismissal. Petitioners were accordingly ordered to reinstate de Jesus to her previous position without loss of seniority rights and with full backwages from the time of her suspension on August 19, 1992. Dissatisfied with the Labor Arbiter's decision, petitioners appealed to public respondent National Labor Relations Commission (NLRC). In its July 21, 1994 decision, the NLRC ruled that de Jesus was negligent in presuming that the ribs of P.O. No. 3853 should likewise be trimmed for having the same style and design as P.O. No. 3824, thus petitioners cannot be entirely faulted for dismissing de Jesus. The NLRC declared that the status quo between them should be maintained and affirmed the Labor Arbiter's order of reinstatement, but without backwages. The NLRC further "directed petitioner to pay de Jesus her back salaries from the date she filed her motion for execution on September 21, 1993 up to the date of the promulgation of [the] decision." Petitioners filed their partial motion for reconsideration which the NLRC denied, hence this petition anchored substantially on the alleged NLRC's error in holding that de Jesus is entitled to reinstatement and back salaries. Issue: Whether or not private respondent was illegal dismissed? Held: The Court held, gleaned either from the Labor Arbiter's observations or from the NLRC's assessment, it distinctly appears that petitioners' accusation of dishonesty and tampering of official records and documents with intention of cheating against de Jesus was not substantiated by clear and convincing evidence. Petitioners simply failed, both before the Labor Arbiter and the NLRC, to discharge the burden of proof and to validly justify de Jesus' dismissal from service. The law, in this light, directs the employers, such as herein petitioners, not to terminate the services of an employee except for a just or authorized cause under the Label Code. 8 Lack of a just cause in the dismissal from service of an employee, as in this case, renders the dismissal illegal, despite the employer's observance of procedural due process. Equally unmeritorious is petitioners' assertion that the dismissal is justified on the basis of loss of confidence. While loss of confidence, as correctly argued by petitioners, is one of the valid grounds for termination of employment, the same, however, cannot be used as a pretext to vindicate each and every instance of unwarranted dismissal. To be a valid ground, it must be shown that the employee concerned is responsible for the misconduct or infraction and that the nature of his participation therein rendered him absolutely unworthy of the trust and confidence demanded by his position. 11 In this case, petitioners were unsuccessful in establishing their accusations of dishonesty and tampering of records with intention of cheating. Indeed, even if petitioners' allegations against de Jesus were true, they just the same failed to prove that her position needs the continued and unceasing trust of her employers. The breach of trust must be related to the performance of the employee's functions.

G.R. No. 77205 May 27, 1991 27

VALENTINO TORILLO, petitioner, vs. VICENTE LEOGARDO, JR., in his official capacity as Deputy Minister of Labor; the HONORABLE MINISTER OF LABOR AND EMPLOYMENT; and ABERDEEN COURT, INC., respondents. Facts: Petitioner Valentino Torillo, alias "Lady Valerie," was employed as an organist by private respondent Aberdeen Court, Inc. in October 1977 with a daily compensation of P115.00 for five hour work a day. On July 2, 1978, he invited his co-employees for a night out in his hometown in Rosario, Cavite in celebration of his birthday. Private respondent objected to such activity, requesting its employees, if possible, to refrain from attending the affair because the following day was a working day. Despite private respondent's objections, petitioner pushed through with his birthday party. Petitioner reported for work the next day, July 3. On July 4, 1978, private respondent, through its Floor Manager, informed petitioner that he was being dismissed from his employment effective that same day for having defied private respondent's order. Consequently, on October 8, 1978 petitioner filed with the Ministry of Labor & Employment, Region IV, a complaint against private respondent for illegal dismissal with prayer for reinstatement with backwages, including payment of his unpaid wages from July 1 to July 3, 1978, holiday pay and premium pay from February to July 1, 1978. Private respondent tried to justify petitioner's dismissal by claiming that the latter abandoned his work in failing to report for duty after his birthday celebration. On November 23, 1978, the Ministry of Labor, thru Director Francisco L. Estrella, ruled that private respondent's theory of abandonment of work was without factual and legal basis as petitioner reported for work on July 3, 1978 immediately following his birthday celebration; and that his dismissal was without the required prior clearance. Thus, the dismissal was illegal. On December 14, 1978, private respondent Aberdeen Court, Inc. appealed to the Ministry of Labor. On September 8, 1986, Deputy Minister Vicente Leogardo, Jr. issued an order setting aside the order dated July 23, 1986, stating therein that the February 13, 1986 Order stands with the clarification that the affirmative relief granted to complainant does not include the payment of backwages. In addition, the writ of execution dated May 13, 1986 to enforce payment of backwages in the amount of P280,715.00 was quashed. Issue: Whether or not petitioner is entitled to backwages? Held: The dispute in the instant case arose when Deputy Minister Leogardo, Jr. issued an Order on September 8, 1986 16 clarifying his previous Order of February 13, 1986 17 by declaring in the clarificatory order that the dispositive portion of the Order of February 13, 1986 should not be accorded the interpretation that backwages are likewise included as due the complainant (petitioner) for the affirmative relief of backwages is available only where reinstatement is ordered. We find the clarificatory order erroneous in so far as it declared that the affirmative relief of backwages is available only where reinstatement is ordered. A number of cases have already been decided by this Court whereby an illegally dismissed employee is awarded both backwages and separation pay. Article 280 (now Article 279) of the Labor Code provides that "an employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages . . . ." Backwages in general are granted on grounds of equity for earnings which a worker or employee has lost due to his illegal dismissal. 19 Reinstatement, on the other hand, means restoration to a state of condition from which one had been removed or separated. 20 Backwages and reinstatement are two reliefs given to an illegally dismissed employee. They are separate and distinct from each other. However, in the event that reinstatement is no longer possible, separation pay is awarded to the employee. Thus, the award of separation pay is in lieu of reinstatement and not of backwages. In other words, an illegally dismissed employee is entitled to (1) either reinstatement, if viable, or separation pay if reinstatement is no longer viable and (2) backwages.

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G.R. No. 77457 February 5, 1990 ANITA LLOSA-TAN, petitioner, vs. SILAHIS INTERNATIONAL HOTEL, CARMELITO REGALADO, VANESSA SUATENGCO AND NESTOR FAMATIGAN, respondents. Facts: The complainant was front office cashier of Silahis International Hotel since November 2, 1976 until her questioned dismissal on October 30, 1982. She is also a member of the Silahis International Hotel Employees Union. Sometime in August 1982 while on duty a customer of the hotel approached her and paid his accommodation using a two dollar checks with hesitation petitioner initially refused to accept the check as payment because of hotels policy but upon confirmation by her superior she accepted the check. On the time of encashment of all checks paid, the check accepted by petitioner bounced. Hence, she received a notice of explanation why she shouldnt be penalized for accepting a bounced check. In her explanation she said that she did accepted the check fully aware of the hotels policy and with confirmation from her superior and without bad faith, the management, nevertheless, terminated her employment stating a reason of loss of confidence. Thus, petitioner filed a complaint of illegal dismissal before the NLRC. The Labor Arbiter ruled in her favor ordering respondent to reinstate the petitioner. Upon appeal by the respondent, the decision was reversed. Issue: Whether or not the acts of petitioner constitute gross negligence resulting in a valid ground for the termination of her employment? Held: The Court held the dismissal was illegal. It is well settled that dismissal based on loss of trust and confidence arising from alleged misconduct of employee, is not to be used as a shield to dismiss an employee arbitrarily. Although the power to dismiss is a normal prerogative of the employer, the same is not without limitations. The right of the employer must not be exercised arbitrarily and without just cause. Admittedly, the encashment of the checks in question is a violation of Policy No. 014 of said hotel. But as found by the Labor Arbiter, it was established that: (a) complainant was not motivated by bad faith; (b) Policy No. 014 is not strictly or consistently enforced but has been relaxed repeatedly to meet business exigencies; and (c) complainant's encashment of the checks in question was not only with the knowledge but with clearance from her superiors who are more knowledgeable as to the circumstances under which the enforcement of the same may be relaxed. Finally, against the background of her previous experience when she refused to encash a similar check for Mr. Katte, the Food and Beverage Manager of Silahis International Hotel, and that she was reprimanded by the management of the Silahis International Hotel for her refusal, as well as threatened with suspension or dismissal from her job, coupled with the advice of Mr. Nestor Famatigan, Jr., Silahis International Hotel Comptroller, to use her discretion in handling similar requests in the future, it is not at all surprising that she opted to take subject course of action. Accordingly, also recently, this Court holding that NLRC gravely abused its discretion in setting aside the decision of the Labor Arbiter and in granting respondent company clearance to dismiss the petitioner, ruled that petitioner is entitled to reinstatement and to payment of full backwages from date of termination but not more than a maximum of three (3) years.

G.R. No. 111651 November 28, 1996 OSMALIK S. BUSTAMANTE, PAULINO A. BANTAYAN, FERNANDO L. BUSTAMANTE, MARIO D. SUMONOD, and SABU J. LAMARAN, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, FIFTH DIVISION, and EVERGREEN FARMS, INC. respondents. 29

Facts: This instant case is an appeal by the private respondent to modify the awarding of backwages as a result of an illegal dismissal case filed against them. In the case of Itogon-Suyoc Mines, Inc. v. Sagilo-Itogon Workers' Union, the Court restated the guidelines for determination of total backwages, thus: First. To be deducted from the backwages accruing to each of the laborers to be reinstated is the total amount of earnings obtained by him from other employment(s) from the date of dismissal to the date of reinstatement. Should the laborer decide that it is preferable not to return to work, the deduction should be made up to the time judgment becomes final. And these, for the reason that employees should not be permitted to enrich themselves at the expense of their employer. Besides, there is the "law's abhorrence for double compensation". Second. Likewise, in mitigation of the damages that the dismissed respondents are entitled to, account should be taken of whether in the exercise of due diligence respondents might have obtained income from suitable remunerative employment. We are prompted to give out this last reminder because it is really unjust that a discharged employee should, with folded arms, remain inactive in the expectation that a windfall would come to him. A contrary view would breed idleness; it is conducive to lack of initiative on the part of a laborer. Both bear the stamp of undesirability. From this ruling came the burden of disposing of an illegal dismissal case on its merits and of determining whether or not the computation of the award of backwages is correct. In order not to unduly delay the disposition of illegal dismissal cases, this Court found occasion in the case of Mercury Drug Co., Inc., et al. v. CIR, et al. 8 to rule that a fixed amount of backwages without further qualifications should be awarded to an illegally dismissed employee (hereinafter the Mercury Drug rule). This ruling was grounded upon considerations of expediency in the execution of the decision. Former Justice Claudio Teehankee approved of this formula expressing that such method of computation is a "realistic, reasonable and mutually beneficial solution" and "thus obviates the twin evils of idleness on the part of the employees and attrition and undue delay in satisfying the award on the part of the employer". Issue: Whether or not the income derived by the employee elsewhere during the period of his illegal dismissal should be deducted from the award of backwages? Held: Conformably with the evident legislative intent of RA 6715, backwages to be awarded to an illegally dismissed employee, should not, as a general rule, be diminished or reduced by the earnings derived by him elsewhere during the period of his illegal dismissal. The underlying reason for this ruling is that the employee, while litigating the legality (illegality) of his dismissal, must still earn a living to support himself and family, while full backwages have to be paid by the employer as part of the price or penalty he has to pay for illegally dismissing his employee. The clear legislative intent of the amendment in RA 6715 is to give more benefits to workers than was previously given them under the Mercury Drug rule or the deduction of earnings elsewhere rule. Thus, a closer adherence to the legislative policy behind RA 6715 points to full backwages as meaning exactly that, i.e., without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. In other words, the provision calling for full backwages to illegally dismissed employees is clear, plain and free from ambiguity and, therefore, must be applied without attempted or strained interpretation. Index animi sermo est (literally speech is the index of intention).

G.R. No. 75093 February 23, 1990 30

DELIA R. SIBAL, petitioner, vs. NOTRE DAME OF GREATER MANILA, NATIONAL LABOR RELATIONS COMMISSION, respondents. Facts: Delia Sibal, a school nurse at the Notre Dame of Greater Manila, was ordered to work during the summer, though her contract does not require her to do so, and was also assigned to teach health during SY 1981-1982.For filing an LOA and not reporting to work that summer, she was not paid her vacation pay; neither was she compensated for the extra teaching job. The school director claimed that the summer was the best time to update the students clinical records, and that she was not entitled to extra compensation for teaching, which was part of her regular working program as a school nurse. He threatened to take drastic measures against her if she kept refusing to report for work the next summer. Sibal filed a complaint for nonpayment of compensation and vacation pay, after which the school served Sibal with a letter of termination effective immediately. Issue: Whether or not unfair labor practice existed which would entitle petitioner to moral damages? Held: In arguing for petitioner's entitlement to moral damages, the Solicitor General has aptly summed up her plight. The Solicitor General has submitted this valid justification for the award of moral damages under Art. 1701 of the Labor Code: Petitioner had been the subject of discrimination for over a year before she was ultimately dismissed. When she justifiably refused to obey the order to report for work for two summers, she was not given her vacation pay for both occasions. Unlike her, the doctor and dentist who worked in the same clinic, were not required to report during summer and were given their respective vacation pay. Again, petitioner, unlike the teachers who accepted extra load, was not given extra compensation when she taught health subjects to 900 students for one year. By withholding such compensation, respondent school stood to gain at the expense of petitioner, the amount of the salary which it could have paid to two (2) health teachers. Petitioner's 13th month pay was likewise underpaid because the basis for computation was only ten months, and not one year as in the case of other regular office personnel. Finally, petitioner's travails culminated in her unceremonious termination without due process at the beginning of the school year on June 14, 1982, by the service of her termination paper antedated June 11, 1982. Termination without due process is specifically prohibited by Rule XIV Section 1 under Section 8 of the Rules Implementing BP Blg. 130: Security of tenure and due process. No worker shall be dismissed except for a just or authorized cause provided by law and after due process. The series of discriminatory and oppressive acts of respondent school against petitioner invariably makes respondent liable for moral damages under Art. 1701, which prohibits acts of capital or labor against each other, and Art. 21 on human relations in relation to Art. 2219 No. 10 and Art. 2220, all of the Civil Code

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