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1. Orozco vs.

Fifth Division of the Court of Appeals Facts: PDI engaged the services of Orozco to write a weekly column for its Lifestyle section. She religiously submitted her articles except for a 6-month stint when she went to NY City. Nevertheless, she continued to send her articles through mail. She also received compensation for every column that was published. When Orozcos column appeared in the newspaper for the last time, her editor, Logarta, told her that the PDIs editor-inchief, Magsanoc, wanted to stop publishing her columns for no reason at all and advised her to talk to the editor-in-chief. When Orozco talked to Magsanoc, the latter told her that it was the PDI chairperson who wanted to stop the publication of her column. However, when Orozco talked to Apostol, the latter told her that Magsanoc informed her that the Lifestyle section had already many columnists. PDI claims that Magsanoc met with the editor of the Lifestyle section to discuss how to improve said section. They agreed to cut down the number of columnists by keeping only those whose columns were well-written, with regular feedback and following. In their judgment, petitioners column failed to improve, continued to be superficially and poorly written, and failed to meet the high standards of the newspaper. Hence, they decided to terminate petitioners column. Orozco filed a complaint for illegal dismissal. The LA decided in favor of petitioner. On appeal, the NLRC dismissed the appeal and affirmed the LAs decision. The CA on the other hand, set aside the NLRCs decision and dismissed Orozcos complaint. Issue: Whether petitioner is an employee of PDI. Whether petitioner was illegally dismissed. Decision: Petition dismissed. Judgment and Resolution affirmed. Applying the four-fold test, the Court held that PDI lacked control over the petitioner. Though PDI issued guidelines for the petitioner to follow in the course of writing her columns, careful examination reveals that the factors enumerated by the petitioner are inherent conditions in running a newspaper. In other words, the so-called control as to time, space, and discipline are dictated by the very nature of the newspaper business itself. Aside from the constraints presented by the space allocation of her column, there were no restraints on her creativity; petitioner was free to write her column in the manner and style she was accustomed to and to use whatever research method she deemed suitable for her purpose. The apparent limitation that she had to write only on subjects that befitted the Lifestyle section did not translate to control, but was simply a logical consequence of the fact that her column appeared in that section and therefore had to cater to the preference of the readers of that section.

unique viewpoint as a feminist advocate. How she utilized all these in writing her column was not subject to dictation by respondent. As in Sonza, respondent PDI was not involved in the actual performance that produced the finished product. It only reserved the right to shorten petitioners articles based on the newspapers capacity to accommodate the same. This fact was not unique to petitioners column. It is a reality in the newspaper business that space constraints often dictate the length of articles and columns, even those that regularly appear therein.

Furthermore, respondent PDI did not supply petitioner with the tools and instrumentalities she needed to perform her work. Petitioner only needed her talent and skill to come up with a column every week. As such, she had all the tools she needed to perform her work. Hence, since Orozco is not an employee of PDI, the latter cannot be held guilty of illegally dismissing the petitioner.

2. Meralco Industrial Engineering Services, Co., vs. NLRC


Meralco and the private respondent executed a contract where the latter would supply the petitioner janitorial services, which include labor, materials, tools and equipment, as well as supervision of its assigned employees, at Meralcos Rockwell Thermal Plant in Makati City.

The 49 employees lodged a Complaint for illegal deduction, underpayment, non-payment of overtime pay, legal holiday pay, premium pay for holiday and rest day and night differentials against the private respondent before the LA.

By virtue of RA 6727, the contract between Meralco and the private respondent was amended to increase the minimum daily wage per employee. 2 months after the amendment of the contract, Meralco sent a letter to private respondent informing them that at the end of business hours of Jan. 31, 1990, it would be terminating contract entered into with the private respondents. On the said date, the complainants were pulled out from their work. The complainants amended their complaint to include the charge of illegal dismissal and to implead Meralco as a party respondent.

Orozco in this case is considered as an independent contractor. As stated in the case of Sonza vs. ABS-CBN, independent contractors often present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees. Like the petitioner in the cited case, Petitioner was engaged as a columnist for her talent, skill, experience, and her

The LA dismissed the complaint. On appeal, the NLRC affirmed the decision of the LA with the modification that Meralco was solidarily liable with the private respondents. The CA on the other hand, modified the Decision of the NLRC and held Meralco

to be solidarily liable with the private respondent for the satisfaction of the laborers separation pay.

the private respondents for the judgment awards underpayment of wages and non-payment of overtime pay.


Issue: Whether Meralco should be liable for the payment of the dismissed laborers separation pay.


Petition GRANTED, Reversed and SET ASIDE.




In this case, however, private respondents had already posted a surety bond in an amount sufficient to cover all the judgment awards due the complainants, including those for underpayment of wages and non-payment of overtime pay. The joint and several liability of the principal with the contractor and subcontractor were enacted to ensure compliance with the provisions of the Labor Code, principally those on statutory minimum wage. This liability facilitates, if not guarantees, payment of the workers compensation, thus, giving the workers ample protection as mandated by the 1987 Constitution. With private respondents surety bond, it can therefore be said that the purpose of the Labor Code provision on the solidary liability of the indirect employer is already accomplished since the interest of the complainants are already adequately protected. Consequently, it will be futile to continuously hold the petitioner jointly and solidarily liable with the private respondents for the judgment awards for underpayment of wages and non-payment of overtime pay.

The CA used Art. 109 of the Labor Code to hold Meralco solidarily liable with the private respondent as regard to the payment of separation pay. However, the SC ruled that Art. 109 should be read in relation to Art. 106 and 107 of the LC. Thus, an indirect employer can only be held liable with the independent contractor or subcontractor in the event that the latter fails to pay the wages of its employees. While it is true that the petitioner was the indirect employer of the complainants, it cannot be held liable in the same way as the employer in every respect. Meralco may be considered an indirect employer only for purposes of unpaid wages.

But while this Court had previously ruled that the indirect employer can recover whatever amount it had paid to the employees in accordance with the terms of the service contract between itself and the contractor, the said ruling cannot be applied in reverse to this case as to allow the private respondents (the independent contractor), who paid for the judgment awards in full, to recover from the petitioner (the indirect employer).

The only instance when the principal can also be held liable with the independent contractor or subcontractor for the backwages and separation pay of the latters employees is when there is proof that the principal conspired with the independent contractor or subcontractor in the illegal dismissal of the employees. In the present case, there is no allegation, much less proof presented, that the petitioner conspired with private respondents in the illegal dismissal of the latters employees; hence, it cannot be held liable for the same.

3. Aklan vs. San Miguel Corporation 573 SCRA 675 Facts: BMA is a corporation eganged in the business of transporting and hauling of cargoes, goods and commodities with a business address at San Miguel Corporation's warehouse in Pasig City. Aklan, together with the others, on the other hand are employees of BMA hired under fixed-term contracts. Petitioners went to DOLE's District Office to file a complaint against BMA for underpayment of wages and nonpayment of premium pay for rest day, 13th month pay, and service incentive leave pay. One of tha petitioners (Caboteja) was charged with insubordination and direspect to superior, failure to properly perform his job assignment and unauthorized change of schedule. Caboteja was asked to submit his explanation but was nevertheless terminated from his job for the offenses of disregard of company rules and regulations and rude attitude to supervisors. On a later date, Dumalagan and Salvador were also terminated for failure to perform their job responsibilities. The three filed for a complaint for illegal dismissal. On another incident, several other employees staged a picket at the warehouse to protest BMA's refusal to pay the claim for underpayment of the rest of the workers. Because of the said picket, the business operations of BMA was disrupted and caused the latter to terminate the services of those employees who participated in the picket. Another case for illegal dismissal was filed against BMA which all later on were consolidated.

Neither can the liability for the separation pay of the complainants be extended to the petitioner based on contract. Contract Order No. 166-84 executed between the petitioner and the private respondents contains no provision for separation pay in the event that the petitioner terminates the same. It is basic that a contract is the law between the parties and the stipulations therein, provided that they are not contrary to law, morals, good customs, public order or public policy, shall be binding as between the parties. Hence, if the contract does not provide for such a liability, this Court cannot just read the same into the contract without possibly violating the intention of the parties.

Although petitioner is not liable for complainants separation pay, the Court conforms to the consistent findings in the proceedings below that the petitioner is solidarily liable with

Petitioners allege that BMA is a labor-only contractor. They further allege that SMC was not only the owner of the warehouse and equipment being used by BMA but that SMC was their true employer. Lastly, they raise the fact that the manner and means by which they perform their work were controlled by SMC. On its part, SMC argued that it had no er-ee relationship with petitioners who were hired and supervised exclusively by BMA pursuant to a warehousing and delivery agreement in consideration of a fixed montly fee. SMC argued that BMA is a legitimate and independent contractor, duly registered with SEC as a aseparate and distinct corporation withj substantial capitalization, incvestment, equipment and tools. It also submitted documentary evidence proving that BMA engaged services of petitioners, paid for their wages and benefits and exercised exclusive contorl and supervision over them. The LA held that there was illegal dismissal and ordered for the reinstatement of the petitioners but found that the evidence presented duly established that BMA was a legitimate independent contractor and the actual employer of pertitioners. However, due to its failure to comply with the registration and reportorial requirements of DOLE, SMC was held to be the principal and to be directly liable to the claims of petitioners. BMA and SMC were found by the LA as jointly and severally liable for the payment of the backwages and money claims of the petitioners.s The NLRC reversed the decision of the Labor Arbiter and ruled that there was no illegal dismissal which was affirmed in toto by the Court of Appeals. Issue: Is SMC the real employer of the petitioners? Held: A finding that a contractor is a labor-only contractor, as opposed to permissible job contracting, is equivalent to declaring that there is an employer-employee relationship between the principal and the employees of the supposed contractor, and the labor-only contractor is considered as a mere agent of the principal, the real employer. Both the LA and the NLRC found that the employment contracts of petitioners duly prove that and er-ee relationship existed between petitioners and BMA. In its ruling, the NLRC considered the following elements to determine the existence of an employer-employee relationship: (1) the selection and engagement of the workers; (2) power of dismissal; (3) the payment of wages by whatever means; and (4) the power to control the workers conduct. All four elements were found by the NLRC to be vested in BMA. This NLRC finding was affirmed by the CA: x x x It is the BMA which actually conducts the hauling, storage, handling, transporting, and delivery operations of SMCs products pursuant to their warehousing and Delivery Agreement. BMA itself hires and supervises its own workers to carry out the aforesaid business activities. Apart from the fact that it was BMA which paid for the wages and benefits, as well as SSS contributions of petitioners, it was also the management of BMA which directly supervised and imposed disciplinary actions on the basis of established rules and regulations of the company. The documentary evidence consisting of numerous memos throughout the period of petitioners employment leaves no doubt in the mind of this Court that petitioners are only too aware of who is their true employer. Petitioners received daily instructions on their tasks form BMA management, particularly, private respondent Arlene C. Eusebio, and whenever they committed lapses or offenses in connection with their work, it was to said officer that they submitted compliance such as

written explanations, and brought matters connected with their specific responsibilities. The employer-employee relationship between BMA and petitioners is not tarnished by the absence of registration with DOLE as an independent job contractor on the part of BMA. The absence of registration only gives rise to the presumption that the contractor is engaged in labor-only contracting, a presumption that respondent BMA ably refuted. While labor should be protected at all times, this protection must not be at the expense of capital. Petition was denied and decision of the Court of Appeals was affirmed.

4. Equipment Technical Services (ETS) vs. Court of Appeals 568 SCRA 122 Facts: ETS is primarily engaged in the business of subcontracting plumbing woks of on-going building construction. Among its clients was Uniwide. On various occasions involving different projects, ETS hired the services of private respondents as pipe fitters, plumbers or threaders. ETS experienced financial difficulties when its client, Uniwide, failed to pay the forner for the plumbing work being done at Uniwide's Coastal Mall. As a result, ETS was only able to pay its employees 13th months pay equivalent to two weeks' salary. Due to non-payment of the balance of the employees 13th month pay, they filed a complaint before the NLRC against ETS. A complaint for illegal dismissal and payment of money claims were later on filed against ETS when they were refused work in another ETS project (Richville Project) on the ground that they refused to sign individual employement conracts with ETS. The dismissed employees raised that they were regular employees of ETS. ETS, however counters such claim and said that the dismissed employees were only contractual/project employees engaged for different projects of the company and that they were not illegally dismissed as they were hired on a per project basis. The LA held that the dismissed employees were regular employees of ETS and not only contractual or project-based employees and that there was illegal dismissal. The NLRC reversed the decision of the LA and that there was no illegal dismissal. Issue: Are the respondent's regular employees of ETS? Held: The principal test for determining whether an employee is properly characterized as project employee, as distinguished from regular employee, is whether or not the project employee was assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employees were engaged for that project. And as Article 280 of the Labor Code, defining a regular employee vis-vis a project employee, would have it: Art. 280. Regular and casual employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement 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 x x x. It bears to stress at the outset that ETS admits hiring or employing private respondents to perform plumbing works for various projects. Given this postulate, regular employment may reasonably be presumed and it behooves ETS to prove otherwise, that is, that the employment in question was contractual in nature ending upon the expiration of the term fixed in the contract or for a specific project or undertaking. But the categorical finding of the CA, confirmatory for the most part of that of the labor arbiter, is that not a single written contract of employment fixing the terms of employment for the duration of the Uniwide project, or any other project, was submitted by ETS despite the latters allegations that private respondents were merely contractual employees. Records of payroll and other pertinent documents, such as job contracts secured by ETS showing that private respondents were hired for specific projects, were also not submitted by ETS. Moreover, if private respondents were indeed employed as project employees, petitioners should have had submitted a report of termination every time their employment was terminated owing to the completion of each plumbing project. As correctly held by the CA in its Amended Decision, citing Tomas Lao Construction v. NLRC, ETS failure to report the employment termination and file the necessary papers after every project completion tends to support the claim of private respondents about their not being project employees. Under Policy Instruction No. 20, Series of 1977, the report must be made to the nearest public office employment. Private respondents may have initially been hired for specific projects or undertaking of petitioner ETS and, hence, may be classified as project employees. Their repeated rehiring to perform tasks necessary to the usual trade or business of ETS changed the legal situation altogether, for in the later instance, their continuous rehiring took them out from the scope of workers coterminus with specific projects and had made them regular employees. Parenthetically, petitioners assertion that there can be no illegal dismissal of project employees inasmuch as they are not entitled to security of tenure is inaccurate. The constitutionally-protected right of labor to security of tenure covers both regular and project workers. Their termination must be for lawful cause and must be done in a way which affords them proper notice and hearing. Decision of the Labor Arbiter was affirmed and ordered ETS to reinstate respondents to their former positions, without loss of rank and seniority rights with backwages from the date of dismissal until reinstated. 5. Woodridge School vs. Benito and Balaguer | Nachura G.R. No. 160240, October 29, 2008 |570 SCRA 164 PROBATIONARY EMPLOYMENT; SECURITY OF TENURE FACTS Woodridge School, a private educational institution, hired Benito and Balaguer as probationary school teachers effective June 1998 and June 1999. Sometime February 2001, the respondents, along with 20 other teachers presented Woodridge a Manifesto Establishing Relevant Issues Concerning the School. Some issues raised were with regard to an NSAT/NEAT anomaly, Teachers right to due process, Issuance of Individual Contracts and Non-Clear-Cut School Policies. A confrontation between the school administrators and concerned teachers was held but no settlement was arrived at. For failure to resolve the issues, especially the one with regard to the NSAT/NEAT anomaly, the respondents

filed a formal complaint against Woodridge with the DECS, requesting for a formal investigation, institute appropriate charges, and impose proper sanctions against Woodridge. During the pendency of the DECS case, and for lack of a positive action from Woodridge, respondents appeared on television and spoke over the radio on the alleged NEAT/NSAT anomaly. February 28, 2001, Woodridge sent 2 separate memos to respondents placing them under preventive suspension for a period of thirty days on the following grounds: 1) uttering defamatory remarks against the school principal in the presence of their co-teachers; 2) announcing to the students and teachers their alleged immediate termination from service; 3) tardiness; 4) spreading false accusations against petitioner; 5) absence without official leave; and 6) appearing on television and speaking over the radio to malign petitioner. In the same memoranda, respondents were required to explain in writing within seventy-two (72) hours why they should not be terminated from their employment. This prompted respondents to commence an action for illegal suspension before the NLRC. The respondents then filed for illegal suspension before the NLRC Barely a month after, Woodridge issued the respondents their Notice of Termination citing the same grounds. In addition, they informed the respondents that they did not qualify as regular employees for their failure to meet the performance standards made known to them at the start of their probationary period. The respondents then amended their initial complaint to include illegal dismissal. LA dismissed their complaint. The NLRC affirmed the LAs disposition in its entirety. The CA granted the petition and set aside the NLRC ruling. It ruled that the 30 day suspension as illegal and ordered the school to pay both Benito and Balaguer their salaries and benefits accruing during said period of illegal suspension. Woodridge was also ordered to pay Balaguer backwages and each of them P50,000 as moral damages and P50,000 as exemplary damages and attorneys fees.


On the effective date of their dismissal, respondents were not regular or permanent employees; they had not yet completed three (3) years of satisfactory service as academic personnel which would have entitled them to tenure as permanent employees in accordance with the Manual of Regulations for Private Schools. On that date, Benitos contract of employment still had two months to run, while Balaguers probationary

employment was to expire after one year and two months. A probationary employee is one who, for a given period of time, is being observed and evaluated to determine whether or not he is qualified for permanent employment. A probationary appointment affords the employer an opportunity to observe the skill, competence and attitude of a probationer. The word probationary, as used to describe the period of employment, implies the purpose of the term or period. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer at the same time, seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment. Probationary employees enjoy security of tenure in the sense that during their probationary employment, they cannot be dismissed except for cause or when he fails to qualify as a regular employee. However, upon expiration of their contract of employment, probationary employees cannot claim security of tenure and compel their employers to renew their employment contracts. There is nothing that would hinder the employer from extending a regular or permanent appointment to an employee once the employer finds that the employee is qualified for regular employment even before the expiration of the probationary period The notices of termination sent by Woodridge to respondents stated that the latter failed to qualify as regular employees. However, nowhere in the notices did petitioner explain the details of said failure to qualify and the standards not met by respondents.

tainted with bad faith, as obvious retaliatory acts on the part of Woodridge. The totality of the acts of respondents cannot be characterized as misconduct under the law, serious enough to warrant the severe penalty of dismissal. This is especially true because there is no finding of malice or wrongful intent attributable to respondents. In light of this disquisition, it is settled that petitioner failed to comply with the requirement of substantial due process in terminating the employment of respondents. With regard to the procedural aspect of the case, respondents were afforded their rights to answer to petitioners allegation and were given the opportunity to present evidence in support of their defense. However, the SC still finds that the dismissal is illegal, because of petitioners failure to satisfy the substantive aspect.

No, they may not be dismissed on the ground of serious misconduct. The Labor Code commands that before an employer may legally dismiss an employee from the service, the requirement of substantial and procedural due process must be complied with. Under the requirement of substantial due process, the grounds for termination of employment must be based on just or authorized causes. Petitioner anchored its imputation of serious misconduct principally on the respondents expose of the NSAT/NEAT anomaly. Misconduct is defined as improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. The misconduct to be serious within the meaning of the Act, must be of such a grave and aggravated character and not merely trivial or unimportant. Such misconduct, however serious, must nevertheless be in connection with the work of the employee to constitute just cause for his separation. It is not sufficient that the act or conduct complained of has violated some established rules or policies. It is equally important and required that the act or conduct must have been performed with wrongful intent. As correctly observed by the CA, the tenor of the manifesto indicated good faith, as the teachers, in fact, expressly stated that their ultimate objective was not to put the school down, but to work for some changes which would be beneficial to the students, teachers, the school and the country as a whole. The chronology of events, therefore, supports the view that respondents suspension and eventual dismissal from service were

No, their preventive suspension was illegal. While the employer may place the worker concerned under preventive suspension, it can do so only if the latters continued employment poses a serious and imminent threat to the life or property of the employer or of his co-workers. The grounds relied upon by Woodridge do not show that their employment poses a threat to the employer or other co-workers. As probationary employees, respondents security of tenure is limited to the period of their probation for Pe Benito, until June 2001 and for Balaguer, June 2002. As they were no longer extended new appointments, they are not entitled to reinstatement and full backwages. Rather, Pe Benito is only entitled to her salary for her 30-day preventive suspension. As to Balaguer, in addition to his 30-day salary during his illegal preventive suspension, he is entitled to his backwages for the unexpired term of his contract of probationary employment. YES, there is enough basis to support the award of damages. A dismissed employee is entitled to moral damages when the dismissal is attended by bad faith or fraud; or constitutes an act oppressive to labor; or is done in a manner contrary to good morals, good customs or public policy. Exemplary damages, on the other hand, may be awarded if the dismissal is effected in a wanton, oppressive or malevolent manner. The award of said damages cannot be justified solely upon the premise that the employer fired his employee without just cause or due process. It is necessary that additional facts be pleaded and proven that the act of dismissal was attended by bad faith, fraud, et al., and that social humiliation, wounded feelings and grave anxiety resulted therefrom. The SC finds that the award of the damages proper.


FACTS: Michael J. Lagrosas was employed by Bristol-Myers

Squibb Inc. as Territory Manager in its Medical Sales Force Division. Ma. Dulcinea S. Lim, also a Territory Manager and Lagrosas'

former girlfriend, attended a district meeting of territory managers at McDonald's Alabang Town Center. After the meeting, she dined out with her friends. She left her car at McDonald's and rode with Cesar R. Menquito, Jr. When they returned to McDonald's, Lim saw Lagrosas' car parked beside her car. Lim told Menquito not to stop his car but Lagrosas followed them and slammed Menquito's car thrice. Menquito and Lim alighted from the car. Lagrosas approached them and hit Menquito with a metal steering wheel lock. When Lim tried to intervene, Lagrosas accidentally hit her head.

outside of company premises and office hours and not intentionally directed against a co-employee, as hereafter explained. First, the incident occurred outside of company premises and after office hours since the district meeting of territory managers which Lim attended at McDonald's had long been finished. McDonald's may be considered an extension of Bristol-Myers' office and any business conducted therein as within office hours, but the moment the district meeting was concluded, that ceased too. When Lim dined with her friends, it was no longer part of the district meeting and considered official time. Thus, when Lagrosas assaulted Lim and Menquito upon their return, it was no longer within company premises and during office hours. Second, Bristol-Myers itself admitted that Lagrosas intended to hit Menquito only. In the Memorandum it was stated that "You got out from your car holding an umbrella steering wheel lock and proceeded to hit Mr. Menquito. Dulce tried to intervene, but you accidentally hit her on the head, knocking her unconscious." Indeed, the misconduct was not directed against a co-employee who unfortunately got hit in the process. Third, Lagrosas was not performing official work at the time of the incident. He was not even a participant in the district meeting. Hence, we fail to see how his action could have reflected his unfitness to continue working for Bristol-Myers. In light of Bristol-Myers' failure to adduce substantial evidence to prove that Lagrosas was guilty of serious misconduct, it cannot use this ground to justify his dismissal. Thus, the dismissal of Lagrosas' employment was without factual and legal basis. 6b. R.B. MICHAEL PRESS and ANNALENE REYES

Respondent company dismissed petitioner, hence the latter filed a complaint for illegal dismissal. The LA held that the dismissal was illegal, stating that
while Lagrosas committed a misconduct, it was not connected with his work. The incident occurred outside of company premises and office hours. He also observed that the misconduct was not directed against a co-employee who just happened to be accidentally hit in the process. On appeal, the NLRC reversed the ruling of the LA. It held that Lagrosas was validly dismissed for serious misconduct in hitting his co-employee and another person with a metal steering wheel lock. The gravity and seriousness of his misconduct is clear from the fact that he deliberately waited for Lim and Menquito to return to McDonald's. The NLRC also ruled that the misconduct was committed in connection with his duty as Territory Manager since it occurred immediately after the district meeting of territory managers. However, it was reversed by the NLRC. On appeal to the CA,it considered the misconduct as having been committed in connection with Lagrosas' duty as Territory Manager since it occurred immediately after the district meeting of territory managers. It also held that the gravity and seriousness of the misconduct cannot be denied. Lagrosas employed such a degree of violence that caused damage not only to Menquito's car but also physical injuries to Lim and Menquito. ISSUE: w/o LAgrosas dismissal legal? HELD: serious misconduct as a valid cause for the dismissal of an employee is defined simply as improper or wrong conduct. It is a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. To be serious within the meaning and intendment of the law, the misconduct must be of such grave and aggravated character and not merely trivial or unimportant. However serious such misconduct, it must, nevertheless, be in connection with the employee's work to constitute just cause for his separation. The act complained of must be related to the performance of the employee's duties such as would show him to be unfit to continue working for the employer. Thus, for misconduct or improper behavior to be a just cause for dismissal, it (a) must be serious; (b) must relate to the performance of the employee's duties; and (c) must show that the employee has become unfit to continue working for the employer. Tested against the foregoing standards, it is clear that Lagrosas was not guilty of serious misconduct. It may be that the injury sustained by Lim was serious since it rendered her unconscious and caused her to suffer cerebral contusion that necessitated hospitalization for several days. But we fail to see how such misconduct could be characterized as work-related and reflective of Lagrosas' unfitness to continue working for Bristol-Myers. Although we have recognized that fighting within company premises may constitute serious misconduct, we have also held that not every fight within company premises in which an employee is involved would automatically warrant dismissal from service. More so, in this case where the incident occurred

ESCOBIA, Petitioners, vs. NICASIO C. GALIT, Respondent FACTS: respondent was employed by petitioner R.B. Michael
Press as an offset machine operator.Respondent was ordered to render overtime service in order to comply with a job order deadline, but he refused to do so. The following day, respondent reported for work but petitioner Escobia told him not to work, and to return later in the afternoon for a hearing. When he returned, a copy of an Office Memorandum was served on him, as follows: This warning for dismissal is being issued for the following offenses: (1) habitual and excessive tardiness (2) committing acts of discourtesy, disrespect in addressing superiors (3) failure to work overtime after having been instructed to do so (4) Insubordination - willfully disobeying, defying or disregarding company authority The offenses youve committed are just causes for termination of employment as provided by the Labor Code. You were given verbal warnings before, but there had been no improvement on your conduct. Further investigation of this matter is required, therefore, you are summoned to a hearing Subsequently, respondent was terminated from employment. Hence the latter filed a complaint for illegal dismissal The labor arbiter rendered a decision finding that complainant was illegally dismissed. On appeal, NLRC affirmed the LA decision.

On appeal to the CA,it held that it was not the tardiness and absences committed by respondent, but his refusal to render overtime work which caused the termination of his employment

to go to work the next day, thus belying his excuse, which is, at most, a self-serving statement. After a re-examination of the facts, we rule that respondent unjustifiably refused to render overtime work despite a valid order to do so. 7. Janssen Pharmaceutica vs. Silayro |Chico-Nazario G.R. No. 172528, February 26, 2008| 546 SCRA 628 JUST CAUSE; DISHONESTY FACTS Janssen Pharmaceutica (JANSSEN) is a division of Johnson and Johnson Philippines engaged in the sale and manufacture of pharmaceutical products. In 1989, Benjamin Silayro (SILAYRO) was hired as Territory/Medical Representative. Sometime 1994, Silayro was found guilty of granting unauthorized premium/free goods to and unauthorized pull-outs from customers. JANSSEN failed to attach records to support its allegations but Silayro admitted to granting unauthorized goods but vehemently denied violating the rule on or having been charged with unauthorized pull-outs. Silayro was also investigated for dishonesty in connection with the Rewards of Learning Test. This ROL test ROL test is a one-page take-home examination, with two questions to be answered by an enumeration of the standards of performance by which territory representatives are rated as well as the sales competencies expected of territory representatives. It was discovered that SILAYROs ROL answers were written by another co-employee, Joedito Gasendo. He was then sent subsequent memos: o July 1998 - A memo requiring an explanation for the ROL incident. o August 1998 - A memo requiring Silayro to explain his delay in submitting process reports September 1998 Silayro submitted an explanation stating that the delay in the submission of reports was caused by the deaths of his grandmother and his aunt, and the hospitalization of his mother. He also averred that he had asked his co-employee Joedito Gasendo to write his answers to the ROL test because at the time when the examination was due, he already needed to leave to see his father-in-law, who was suffering from cancer and confined in a hospital in Manila. o October 20, 1998 another memo regarding the discrepancies between the number of product samples recorded in his Daily/Weekly Coverage Report (DCR) and the number of product samples found in his possession during the 14 October 1998 audit. The actual number of sample products found in his possession exceeded the number of sample products he reported to JANSSEN. Silayro explained, through a "Response Memo" dated 24 October 1998, that he failed to count the quantity of samples when they were placed in his custody. Thus, he failed to take note of the excess samples from previous months. He, likewise, admitted to committing errors in posting the samples that he distributed to some doctors during the months of August and September 1998.

ISSUES: whether there was just cause to terminate the

employment of respondent.

HELD: SC held that there was a valid dismissal. Stating that while the CA is correct that the charge of serious
misconduct was not substantiated, the charge of insubordination however is meritorious. For willful disobedience to be a valid cause for dismissal, these two elements must concur: (1) the employees assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge. In the present case, there is no question that petitioners order for respondent to render overtime service to meet a production deadline complies with the second requisite. Art. 89 of the Labor Code empowers the employer to legally compel his employees to perform overtime work against their will to prevent serious loss or damage: Art. 89. EMERGENCY OVERTIME WORK Any employee may be required by the employer to perform overtime work in any of the following cases: xxxx (c) When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature; xxxx In the present case, petitioners business is a printing press whose production schedule is sometimes flexible and varying. It is only reasonable that workers are sometimes asked to render overtime work in order to meet production deadlines. Dennis Reyes, in his Affidavit stated that he approached and asked respondent to render overtime work so as to meet a production deadline on a printing job order, but respondent refused to do so for no apparent reason. Respondent, on the other hand, claims that the reason why he refused to render overtime work was because he was not feeling well that day. The issue now is, whether respondents refusal or failure to render overtime work was willful; that is, whether such refusal or failure was characterized by a wrongful and perverse attitude. In Lakpue Drug Inc. v. Belga, willfulness was described as characterized by a wrongful and perverse mental attitude rendering the employees act inconsistent with proper subordination.] The fact that respondent refused to provide overtime work despite his knowledge that there is a production deadline that needs to be met, and that without him, the offset machine operator, no further printing can be had, shows his wrongful and perverse mental attitude; thus, there is willfulness. Respondents excuse that he was not feeling well that day is unbelievable and obviously an afterthought. He failed to present any evidence other than his own assertion that he was sick. Also, if it was true that he was then not feeling well, he would have taken the day off, or had gone home earlier, on the contrary, he stayed and continued to work all day, and even tried

He was later on issued a Notice of Disciplinary action upon finding him guilty of the following offenses: delayed submission of process reports and cheating on his ROL test. He was subjected to a one day suspension without pay for each offense. On the same day, he was also issued a Notice of Preventive Suspension for Dishonesty in Accomplishing other Accountable documents in connection with the October discrepancy. He was then directed to surrender the car, promotional materials and all other accountabilities by Nov. 25, 1998. In line with his promise to surrender his accountabilities, SILAYRO wrote a letter asking his superiors where he should return his accountabilities but he did not receive any instructions. SILAYROs services were later on terminated by JANSSEN. SILAYRO was found guilty of dishonesty in that issue of the discrepancy of the samples and failing to return the company vehicle and other accountabilities in violation of Sec. 9.5.5 of the Code of Conduct. He was also found to be a habitual offender. SILAYRO later on filed a complaint for unfair labor practice, illegal dismissal. The Labor Arbiter found the penalty of dismissal too harsh and ordered his reinstatement without payment of backwages. NLRC declared the reinstatement improper and that the dismissal was just and authorized. The CA declared the dismissal illegal, granted reinstatement , ordered payment of backwages and if reinstatement is no longer feasible, payment of separation pay.

ISSUE W/N THERE WERE SUFFICIENT GROUNDS FOR SILAYROS DISMISSAL. HOLDING & RATIO NO, there was no sufficient ground for his dismissal. The SC affirmed the decision of the CA To constitute a valid dismissal from employment, two requisites must concur: (1) the dismissal must be for any of the causes provided in Article 282 of the Labor Code; and, (2) the employee must be given an opportunity to be heard and to defend himself With regard to the issue of his dishonesty in accomplishing his report on product samples, JANSSEN failed to present evidence that SILAYRO was guilty of dishonesty in accomplishing the report. It In termination cases, the burden of proof rests with the employer to show that the dismissal is for just and valid cause. Failure to do so would necessarily mean that the dismissal was not justified and therefore was illegal. Dishonesty is a serious charge, which the employer must adequately prove, especially when it is the basis for termination. In this case, JANSSEN had not been able to identify an act of dishonesty, misappropriation, or any illicit act, which the respondent may have committed in connection with the erroneously reported product samples. JANSSEN merely relied on the fact that the number of product samples SILAYRO reported was incorrect. While respondent was admittedly negligent, his errors alone are insufficient evidence of a dishonest purpose. Since fraud implies willfulness or wrongful intent, the innocent non-disclosure of or inadvertent errors in declaring facts by the employee to the employer will not constitute a just cause for the dismissal of the employee. In addition, the subsequent

acts of respondent belie a design to misappropriate product samples. So as to escape any liability, SILAYRO could have easily just submitted for audit only the number of product samples which he reported. Instead, he brought all the product samples in his custody during the audit and, afterwards, honestly admitted to his negligence. Negligence is defined as the failure to exercise the standard of care that a reasonably prudent person would have exercised in a similar situation. The SC found that SILAYRO did not commit any willful violation, rather he merely failed to exercise the standard care required of a territory representative to carefully count the number of product samples delivered to him. The gravest charge that SILAYRO faced was cheating in his ROL test. Although he avers that he formulated the answers himself and that he merely allowed his coemployee Joedito Gasendo to write down his answers for him, the SC found this excuse to be very flimsy. The ROL test consists of one page and two straightforward questions, which can be answered by more or less ten sentences. He could have spared the few minutes it would take to write the examination. If he had lacked the time due to a family emergency, a request for an extension would have been the more reasonable and honest alternative. The improper taking of the ROL test, while it puts into question the examinees moral character, does not result in any potential loss of property or damage to the reputation of the employer. The respondents ten years of commendable performance cannot be cancelled out by a single mistake made during a difficult period of his life, a mistake that did not pose a potential danger to his employer. SILAYROs violations of petitioners Code of Conduct, even if taken as a whole, would not fall under the just causes of termination provided under Article 282 of the Labor Code. They are mere blunders, which may be corrected. JANSSEN failed to point out even a potential danger that respondent would misappropriate or improperly dispose of company property placed in his custody. It had not shown that during his employment, that SILAYRO took a willfully defiant attitude against it. It also failed to show a pattern of negligence which would indicate that he is incapable of performing his responsibilities. At any other time during his employment, he had shown himself a commendable worker. Nonetheless, the infractions committed by SILAYRO, while disproportionate to a penalty of dismissal, will not be overlooked. The suspension of five months without pay, imposed by the Court of Appeals, would serve as a sufficient and just punishment for his violations of the companys Code of Conduct.

8. PADILLA MACHINE SHOP VS. JAVILGAS FACTS: Javilgas was hired by Padilla Machine Shop. His work consisted of reconditioning machines. In July 1998, his salary was increased and in January 1999, his salary was again increased until his dismissal in April 2002. Petitioners made regular deductions for his SSS contributions, but sometime in 2002, he found out that his employer was not remitting the contributions to the SSS; as a result, he was not able to avail of the benefits thereof when his wife gave birth. When he complained about the

failure of his employer to remit his SSS contributions, the latter transferred him to the Novaliches branch office. Javilgas further alleged that in April 2002, Rodolfo Padilla called him by telephone and told him to stop working but without giving any reason therefor. He stopped reporting for work and sued petitioners for illegal dismissal, with a prayer for the payment of backwages, pro rated 13th month pay, separation pay, and moral and exemplary damages. On the other hand, petitioner Rodolfo Padilla (Rodolfo), proprietor of Padilla Machine Shop, alleged that in 1999, SSS and Medicare contributions were deducted from Javilgass salary and remitted to the SSS; that in 2000, they (petitioners) submitted a report to the SSS that Javilgas had voluntarily left and abandoned his work, and transferred to another shop, Raymond Machine Shop, located within the same vicinity as Padilla Machine Shop; that some months after, Javilgas returned and pleaded to be re-employed with them; that Rodolfo Padilla took Javilgas back to work, but their customers were not satisfied with the quality of his work; hence Javilgas was assigned to the Novaliches branch; that Javilgas incurred numerous absences in the Novaliches branch; that Javilgas had opened his own machine shop and even pirated the clients of petitioners; and finally, Javilgas again voluntarily left Padilla Machine Shop without prior notice.


That there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts.

The establishment of his own shop is not enough proof that Javilgas intended to sever his relationship with his employer. Petitioners consistently deny that Javilgas was dismissed from service; that he abandoned his employment when he walked out after his conversation with Rodolfo and never returned to work again. But denial, in this case, does not suffice; it should be coupled with evidence to support it. In the Machica case, the memorandum, among others, represented clear and convincing proof that there was no intention to dismiss the employees; it constituted evidence in support of the employers denial. In the instant case, petitioners failed to adduce evidence to rebut Javilgas claim of dismissal and satisfy the burden of proof required. As regards the eight-month hiatus before Javilgas instituted the illegal dismissal case, we sustain the Court of Appeals ruling that Javilgas filed the complaint within a reasonable period during the three-year period provided under Article 291 of the Labor Code.

Decisions of Lower Tribunals 1. 2. The Labor arbiter found that he was illegally dismissed. The NLRC reversed the LAs decision as Javilgas was never dismissed stating that he was never notified of his dismissal nor was he prevented from returning to work. Javilgasas allegation as to the dates of his dismissal likewise was not appreciated. The Court of Appeals reversed the NLRC and reinstated the Decision of the Labor Arbiter. It held that the burden of proof is on the petitioners, to show that Javilgas was dismissed for a valid and just cause. As to the inconsistency in the dates of Javilgas termination, the appellate court noted that it was a case of miscommunication. Javilgas was found to be illiterate, as he did not even get to finish Grade School. Likewise, the delay of eight months in the filing of the complaint should not work against respondent because it took time for him to obtain the services of a counsel. Machica Case: In Machica v. Roosevelt Services Center, Inc.,[12] we sustained the employers denial as against the employees categorical assertion of illegal dismissal. In that case, several employees who allegedly refused to sign a memorandum[13] from their employer, detailing the commission of alleged anomalies that resulted in the overpricing and overcharging of customers, filed an illegal dismissal case three days after receiving the said memorandum. They claimed that they were illegally dismissed and were told not to report for work anymore; the employer denied this and asserted that the workers (who appeared to be the suspects in the anomalies) were merely given three to five days off to decide whether or not to agree to share the loss suffered by it as a result of the anomalies. The Court, in ruling that there was no illegal dismissal, held that: The rule is that one who alleges a fact has the burden of proving it; thus, petitioners were burdened to prove their allegation that respondents dismissed them from their employment. It must be stressed that the evidence to prove this fact must be clear, positive and convincing. The rule that the employer bears the burden of proof in illegal dismissal cases finds no application here because the respondents deny having dismissed the petitioners. We have reviewed the Memorandum of respondent Dizon and find nothing therein to indicate that any of the employees of respondent corporation, including the petitioners, would be considered terminated from employment if they refused to share in the P23,997.58 loss. Petitioners and other employees of respondent corporation were merely required to affix their signatures in the


ISSUE: Was there abandonment so as to give a valid cause of dismissal? HELD: No. In illegal dismissal cases, the burden of proof is on the employer to show that the employee was dismissed for a valid and just cause. Petitioner did not elaborate or show proof of the claimed abandonment. Instead, he concluded that Javilgas abandoned his corresponding duties and responsibilities when he established and created his own machine shop outfit. For abandonment to exist, it is essential: (a) That the employee must have failed to report for work or must have been absent without valid or justifiable reason; and

Memorandum on the space opposite their respective names, to confirm that they had read and understood the same. As elucidated by the NLRC in the assailed Resolution: Read in its entirety, the Memorandum reflects the GOOD FAITH of the employer in resolving a discovered anomaly. First, it is a declaration of AMNESTY and FORGIVENESS; it did not name names; it did not state that the guilty ones will be pursued and punished. Second, it asked for SHARING among the employees for the loss due to the discovered anomaly. Third, it indicated a POSITIVE BUSINESS DIRECTION as it exhorted the employees from participating in similar anomalies henceforward. 9. YRASUEGUI VS. PAL FACTS: Armando G. Yrasuegui was an international flight steward of Philippine Airlines, Inc. (PAL). He stands five feet and eight inches (5'8") with a large body frame. The proper weight for a man of his height and body structure is from 147 to 166 pounds, the ideal weight being 166 pounds, as mandated by the Cabin and Crew Administration Manual of PAL. Yraseguis weight problem Yrasegui encountered a great deal of weight problem. From meeting the required weight limit of 166 pounds, he ballooned, reaching the weights upto 215 to 217 pounds. PAL was lenient enough to grant him a number of vacation leaves to address his weight concerns. He was thus required to report for periodical weight checks. However, instead of losing, he gained more weight. It was when he reached 217 pounds where he made a commitment in writing to lose 17 pounds in 90 days and continue reducing from then on. He remained overweight despite the 90day period given him to reach his ideal weight. Time and again, Yrasuegui refused to comply with the weight checks. When he finally tipped the scale, he weighed at 212 pounds. Clearly, he was still way over his ideal weight of 166 pounds. From then on, nothing was heard from petitioner until he followed up his case requesting for leniency. He continuously gained weight. On November 13, 1992, PAL finally served petitioner a Notice of Administrative Charge for violation of company standards on weight requirements. Ultimately, Yrasuegui was formally informed by PAL that due to his inability to attain his ideal weight, "and considering the utmost leniency" extended to him "which spanned a period covering a total of almost five years," his services were considered terminated "effective immediately." 1. The Labor Arbiter ruled in favor of Yrasuegui stating that although reasonable, the weight standards need not be complied with under pain of dismissal since his weight did not hamper the performance of his duties. The NLRC AFFIRMED the decision of the LA. According to the NLRC, "obesity, or the tendency to gain weight uncontrollably regardless of the amount of food intake, is a disease in itself. As a consequence, there can be no intentional defiance or serious misconduct by petitioner to the lawful order of PAL for him to lose weight. The CA reversed the NLRC opining that the weight standards of PAL are meant to be a continuing qualification for an employee's position. The failure to adhere to the weight standards is an analogous cause for the dismissal of an employee under Article 282(e) of the Labor Code in relation to Article 282(a).

ISSUE: Is obesity a just cause in terminating the employees services? HELD: The obesity of petitioner is a ground for dismissal under Article 282(e) of the Labor Code. It is a continuing qualification. Tersely put, an employee may be dismissed the moment he is unable to comply with his ideal weight as prescribed by the weight standards. The dismissal of the employee would thus fall under Article 282(e) of the Labor Code. The standards violated in this case were not mere "orders" of the employer; they were the "prescribed weights" that a cabin crew must maintain in order to qualify for and keep his or her position in the company. In this sense, the failure to maintain these standards does not fall under Article 282(a) whose express terms require the element of willfulness in order to be a ground for dismissal. The failure to meet the employer's qualifying standards is in fact a ground that falls under Article 282(e) - the "other causes analogous to the foregoing." By its nature, these "qualifying standards" are norms that apply prior to and after an employee is hired. They apply prior to employment because these are the standards a job applicant must initially meet in order to be hired. They apply after hiring because an employee must continue to meet these standards while on the job in order to keep his job. Under this perspective, a violation is not one of the faults for which an employee can be dismissed pursuant to pars. (a) to (d) of Article 282; the employee can be dismissed simply because he no longer "qualifies" for his job irrespective of whether or not the failure to qualify was willful or intentional. In fine, We hold that the obesity of petitioner, when placed in the context of his work as flight attendant, becomes an analogous cause under Article 282(e) of the Labor Code that justifies his dismissal from the service. His obesity may not be unintended, but is nonetheless voluntary. As the CA correctly puts it, voluntariness basically means that the just cause is solely attributable to the employee without any external force influencing or controlling his actions. This element runs through all just causes under Article 282, whether they be in the nature of a wrongful action or omission. Gross and habitual neglect, a recognized just cause, is considered voluntary although it lacks the element of intent found in Article 282(a), (c), and (d).
Extra: Yraseguis contentions are interesting enough to take note of: 1. Obesity is a "physical abnormality and/or illness. Relying on Nadura v. Benguet Consolidated, Inc.. The reliance on Nadura is off-tangent. The factual milieu in Nadura is substantially different from the case at bar. First, Nadura was not decided under the Labor Code. The law applied in that case was Republic Act (RA) No. 1787. Second, the issue of flight safety is absent in Nadura, thus, the rationale there cannot apply here. Third, in Nadura, the employee who was a miner, was laid off from work because of illness, i.e., asthma. Here, petitioner was dismissed for his failure to meet the weight standards of PAL. He was not dismissed due to illness. Fourth, the issue in Nadura is whether or not the dismissed employee is entitled to separation pay and damages. Here, the issue centers on the propriety of the dismissal of petitioner for his failure to meet the weight standards of PAL. Fifth, in Nadura, the employee was not accorded due process. Here, petitioner was accorded utmost leniency. He was given more than four (4) years to comply with the weight standards of PAL.



2. On Discrimination Petitioner cites Bonnie Cook v. State of Rhode Island, Department of Mental Health, Retardation and Hospitals, decided by the United States Court of Appeals. In that case, Cook worked from 1978 to 1980 and from 1981 to 1986 as an institutional attendant for the mentally retarded at the Ladd Center that was being operated by respondent. She twice resigned voluntarily with an unblemished record. Even respondent admitted that her performance met the Center's legitimate expectations. In 1988, Cook re-applied for a similar position. At that time, "she stood 5'2" tall and weighed over 320 pounds." Respondent claimed that the morbid obesity of plaintiff compromised her ability to evacuate patients in case of emergency and it also put her at greater risk of serious diseases. Unlike Cook, however, petitioner is not morbidly obese. In the words of the District Court for the District of Rhode Island, Cook was sometime before 1978 "at least one hundred pounds more than what is considered appropriate of her height." According to the Circuit Judge, Cook weighed "over 320 pounds" in 1988. Clearly, that is not the case here. At his heaviest, petitioner was only less than 50 pounds over his ideal weight.

indicating as grounds therefor his failure to report back to work despite the DOLE order and his supposed role in the striking union. Labor Arbiter Antonio R. Macam dismissed the spouses' complaints for want of jurisdiction upon a finding that there was no employer-employee relationship between the parties, the fourth requisite or the "control test" in the determination of an employment bond being absent. The NLRC, reversed the Labor Arbiter's findings. The appellate court, by June 30, 2004 Decision, initially granted petitioner's petition and set aside the NLRC ruling. However, upon a subsequent motion for reconsideration filed by respondents, it reinstated the NLRC decision in an Amended Decision and declared that respondents were illegally dismissed. ISSUE:


Whether or not there is an employer-employee relationship between petitioner and the spouses-respondents? RULING: This Court is unimpressed. Under the "control test," an employment relationship exists between a physician and a hospital if the hospital controls both the means and the details of the process by which the physician is to accomplish his task. That petitioner exercised control over respondents gains light from the undisputed fact that in the emergency room, the operating room, or any department or ward for that matter, respondents' work is monitored through its nursing supervisors, charge nurses and orderlies. Without the approval or consent of petitioner or its medical director, no operations can be undertaken in those areas. For control test to apply, it is not essential for the employer to actually supervise the performance of duties of the employee, it being enough that it has the right to wield the power. Finally, under Section 15, Rule X of Book III of the Implementing Rules of the Labor Code, an employer-employee relationship exists between the resident physicians and the training hospitals, unless there is a training agreement between them, and the training program is duly accredited or approved by the appropriate government agency. In respondents' case, they were not undergoing any specialization training. They were considered non-training general practitioners, assigned at the emergency rooms and ward sections. Petitioner thus failed to observe the two requirements,before dismissal can be effected notice and hearing The termination notice sent to and received by Dr. Lanzanas on April 25, 1998 was the first and only time that he was apprised of the reason for his dismissal. As for the case of Dr. Merceditha, her dismissal was worse, it having been effected without any just or authorized cause and without observance of due process. 11. SARI-SARI GROUP OF COMPANIES, INC. v PIGLAS KAMAO FACTS: In December 1990, Mariko Novel Wares, Inc. (petitioner) began its retail outlet operations under the name Sari-Sari in the

FACTS: The Calamba Medical Center (petitioner), a privately-owned hospital, engaged the services of medical doctors-spouses Ronaldo Lanzanas (Dr. Lanzanas) and Merceditha Lanzanas (Dr. Merceditha), as part of its team of resident physicians. Reporting at the hospital twice-a-week on twenty-four-hour shifts, respondents were paid a monthly "retainer" of P4,800.00 each. They were also given a percentage share out of fees charged for out-patient treatments, operating room assistance and discharge billings. The work schedules of the members of the team of resident physicians were fixed by petitioner's medical director Dr. Raul Desipeda (Dr. Desipeda). And they were issued identification cards by petitioner and were enrolled in the Social Security System (SSS). Income taxes were withheld from them. On March 7, 1998, Dr. Meluz Trinidad (Dr. Trinidad), also a resident physician at the hospital, inadvertently overheard a telephone conversation of respondent Dr. Lanzanas with a fellow employee, Diosdado Miscala, through an extension telephone line. Apparently, Dr. Lanzanas and Miscala were discussing the low "census" or admission of patients to the hospital. Dr. Desipeda issued to Dr. Lanzanas a Memorandum of March 7, 1998 placing Dr. Lanzanas under 30-day preventive suspension. Inexplicably, petitioner did not give respondent Dr. Merceditha, who was not involved in the said incident, any work schedule after sending her husband Dr. Lanzanas the memorandum, nor inform her the reason therefor, albeit she was later informed by the Human Resource Department (HRD) officer that that was part of petitioner's cost-cutting measures. On March 14, 1998, the rank-and-file employees union of petitioner went on strike due to unresolved grievances over terms and conditions of employment. On March 20, 1998, Dr. Lanzanas filed a complaint for illegal suspension before the National Labor Relations Commission (NLRC)-Regional Arbitration Board (RAB) IV. Dr. Merceditha subsequently filed a complaint for illegal dismissal. Secretary of Labor issued on April 21, 1998 return-to-work Order to the striking union officers and employees of petitioner pending resolution of the labor dispute.Petitioner later sent Dr. Lanzanas a notice of termination which he received on April 25, 1998,

basement of Robinsons Galleria in Quezon City. Among its employees were: Head Checker Ronnie Tamayo, Checker Jose del Carmen, Section Heads Jocylene Padua, Vicky Bermeo, and ElizabethMatutina (respondents), all of whom were assigned at the Robinsons Galleria branch. On November 30, 1993, respondents organized a union known as Piglas Kamao. At the time of the formation, the officers of the union were respondents Ronnie Tamayo, President; Jose del Carmen, Vice-President; and Jocelyne Padua, Secretary. Respondents claim that petitioner, through its President, Rico Ocampo, interfered with the formation of the union. Respondents were informed of the petitioners plan to close the basement level store to give way to the opening of a Sari-Sari outlet on the third floor of Robinsons Galleria. Respondents were supposed to be absorbed in other Sari-Sari store branches. However, on January 9, 1994, petitioner put up an advertisement in the Manila Bulletin, announcing its need for inventory, accounting, and sales clerks.Applicants were requested to apply personally at the Robinsons Galleria branch. During the month of January 1994, petitioners managerial staff approached union members to express disapproval of the union membership. On January 26, 1994, respondent union filed an unfair labor practice case with the Labor Arbiter (LA) against the petitioner for harassment, coercion, and interference with the workers right to selforganization. On the next day, January 27, 1994, petitioner notified DOLE and the respondents of the closure of the Galleria branch due to irreversible losses and non-extension of the lease of the store premises, to be effective on February 28, 1994. Moreover, the respondents were told that they would not be absorbed in the other branches of the petitioner because of redundancy. On February 11, 1994, respondents Tamayo, Del Carmen, and Padua filed amended complaints of unfair labor practice and illegal dismissal against petitioner. On March 28, 1994, respondents filed six supplemental complaints for illegal dismissal, non-payment of premium pay for holiday and rest day for the years 1992 and 1993, and non-payment of 13th month pay for the year 1994 as well as for moral and exemplary damages. In its defense, petitioner denied that the closure of the Galleria branch was intended to prevent the formation of the union, saying that the closure was due to consistent losses the branch was incurring. On April 27, 1997, the LA rendered his decision dismissing the complaint for illegal dismissal, unfair labor practices and damages for lack of merit. However, the LA ordered the petitioner to pay the respondents separation pay and proportionate 13th month pay. During the pendency of the appeal, respondents Bermeo, Matutina, and Padua separately filed their respective manifestations and Motions to Dismiss, praying that the appeal be dismissed as to them due to their having already executed their respective quitclaims releasing Mariko from liability. cralawThe NLRC affirmed the decision of the LA but dismissed the claims of Bermeo, Matutina and Padua as they had executed quitclaims. Respondents filed a Motion for Reconsideration which was denied by the NLRC. The CA ruled that petitioner failed to discharge its burden of submitting competent proof to show the irreversible substantial losses it suffered warranting the

closure of the Galleria branch. Also, the release and quitclaims executed by respondents Padua, Bermeo and Matutinadid not preclude them from assailing their termination. ISSUE: Whether or not the CA committed serious error in granting respondents petition for certiorari and setting aside the findings of both the NLRC and the Labor Arbiter? RULING: Effect of Quitclaims It is well-established that quitclaims and/or complete releases executed by the employees do not estop them from pursuing their claims arising from the unfair labor practice of the employer. The basic reason for this is that such quitclaims and/ or complete releases are against public policy and, therefore, null and void.The acceptance of termination pay does not divest a laborer of the right to prosecute his employer for unfair labor practice acts. Closure or Retrenchment? The decision of the LA, disposed of the issue by stating that the decision to close the Robinsons branch was a management prerogative. After a perusal of the records of the case and pleadings submitted, we find that petitioner had in fact retrenched workers. All the pleadings submitted to the LA by the petitioner clearly showed that what it had in mind when it terminated the services of respondents was that it had retrenched workers. It was only when respondents appealed the LA decision that petitioner pursued a new theory, that is, that what was involved was a simple closure of business which did not require proof of substantial losses. Having concluded that petitioner retrenched workers, we now decide as to whether or not petitioner had complied with the requisites of retrenchment. For retrenchment to be valid, the following requisites must be satisfied: 1. The losses expected should be substantial and not merely de minimis in extent; The substantial losses apprehended must be reasonably imminent; The retrenchment must be reasonably necessary and likely to effectively prevent the expected losses; and The alleged losses, if already incurred, and the expected imminent losses sought to be forestalled, must be proven by sufficient and convincing evidence.

2. 3.


The CA was correct in finding that petitioner failed to discharge its duty of showing that the dismissal of the employees was legal.

In the case at bar, petitioner failed to submit its audited financial statements to the Securities and Exchange Commission for the years 1991 and 1992. Thus, other than petitioners bare allegation of irreversible loss, there is no evidence to prove and substantiate it. Petitioner having failed in discharging its burden of submitting sufficient and convincing evidence required by law, we hold that respondents Ronnie Tamayo, Jose del Carmen, Jocylene Padua, Vicky Bermeo and Elizabeth Matutina were illegally dismissed. cralawAn illegally dismissed employee is entitled to either (1) reinstatement, if viable, or separation pay, if reinstatement is no longer viable; and (2) backwages. In the case at bar, since fourteen years have already lapsed since the termination of the respondents, we deem it proper that separation pay in lieu of reinstatement be awarded. Since petitioner has already paid respondents their separation pay, it is only liable to pay the respondents their backwages computed from the time of their illegal dismissal up to the time of the finality of this judgment. 12. Manatad v. PTTC, March 7. 2008 Authorized Cause; Closure or Cessation not due to losses Manatad was an employee at PT&T (Philippine Telegraph and Telephone Corp) since 1988. She started as a junior clerk and was later promoted as Account Executive before she was temporarily laid off in 1998. Due to serious business reverses, PT&T adopted the Temporary Staff Reduction Program and Manatad later received an invitation to avail of the Staff Reduction Program Package equivalent to 1-month salary for every year of service, 1 month salary, pro-rated 13th month pay, conversion to cash of unused vacation and sick leave credits, and Health Maintenance Organization and group life insurance coverage until full payment of the separation package. Manatad opted not to avail of this but she later received a Notice of Retrenchment dismissing her from employment in 1999. Alleging that PT&T's retrenchment program was illegal for it was actually gaining profits from 1997 to 1998 and had even granted several salary increases, Manatad presented the Central Visayas Operating Margin Reports and filed a complaint for Illegal Dismissal and prayed for the award of separation pay in the amount of P107,000.00, unpaid salary, prorated 13th month pay, unpaid vacation leave benefits and attorney's fees. For its part, PT&T submitted its financial statements 1996 to 1998, as audited by Sycip Gorres Velayo (SGV) & Co. and Alba Ledesma & Co. showing that it incurred a loss of P558 Million. Labor Arbiter ruled that PT&T failed to substantiate its claim of financial reverses and the retrenchment program was invalid, awarding Manatad her claim. Upon appeal, the NLRC affirmed the LA's decision. The NLRC further noted that the DOLE was not notified by the respondent of its retrenchment program as required by law. On Certiorari, the Court of Appeals upheld the validity of PT&Ts retrenchment program. The financial standing of PT&T cannot be determined by the performance of a single branch or unit alone but by the performance of all its branches integrated as a whole. In addition, the comparative statements of income prepared by independent auditors constitute a normal method of proving the profit and loss performance of a business company. PT&T also duly complied with the requirement of service of

notice to Manatad one month before the intended date of retrenchment. On the issue of whether or not the retrenchment program was valid and legal, the Supreme Court held that it was. Upon examination of the evidence adduced by both parties, it was convinced that PT&T experienced serious financial crises as shown in the financial statements audited by independent auditors. For a valid retrenchment, the following requisites must be complied with: (a) the retrenchment is necessary to prevent losses and such losses are proven; (b) written notice to the employees and to the DOLE at least one month prior to the intended date of retrenchment; and (c) payment of separation pay equivalent to one-month pay or at least one-half month pay for every year of service, whichever is higher. Jurisprudential standards for the losses which may justify retrenchment, viz:
Firstly, the losses expected should be substantial and not merely de minimis in extent. If the loss purportedly sought to be forestalled by retrenchment is clearly shown to be insubstantial and inconsequential in character, the bonafide nature of the retrenchment would appear to be seriously in question. Secondly, the substantial loss apprehended must be reasonably imminent, as such imminence can be perceived objectively and in good faith by the employer. There should, in other words, be a certain degree of urgency for the retrenchment, which is after all a drastic recourse with serious consequences for the livelihood of the employees retired or otherwise laid-off. Thirdly, because of the consequential nature of retrenchment, it must be reasonably necessary and likely to effectively prevent the expected losses. The employer should have taken other measures prior or parallel to retrenchment to forestall losses, i.e., cut other costs than labor costs. An employer who, for instance, lays off substantial numbers of workers while continuing to dispense fat executive bonuses and perquisites or socalled "golden parachutes", can scarcely claim to be retrenching in good faith to avoid losses. To impart operational meaning to the constitutional policy of providing "full protection" to labor, the employer's prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of last resort, after less drastic means - e.g., reduction of both management and rank-and-file bonuses and salaries, going on reduced time, improving manufacturing efficiencies, trimming of marketing and advertising costs, etc.have been tried and found wanting. Lastly, but certainly not the least important, alleged losses if already realized, and the expected imminent losses sought to be forestalled, must be proved by sufficient and convincing evidence. The reason for requiring this quantum of proof is readily apparent: any less exacting standard of proof would render too easy the abuse of this ground for termination of services of employees.

PT&T was fully justified in implementing a retrenchment program since it was undergoing business reverses, not only for a single fiscal year, but for several years prior to and even after the program. In a span of six years, respondent realized profits only in one year, in 1997. The numbers presented by Manatad, which she obtained from the Central Visayas office, do not bespeak the overall financial standing in light of the fact that PT&T is operating nationwide and the Central Visayas office is only one of its many branches. Losses or gains of a business entity cannot be fully assessed by isolating or selecting only particular branches or offices. Manatad is not entitled to backwages, but is entitled to separation pay. 13. Mora v. Avesco Marketing Corp, Nov. 14, 2008 Voluntary Resignation; Employers Acceptance Required

Mora was a sales engineer for Avesco since 1996 tasked to supervise and install sound and communications systems for its clientele. On March 25, 2003, he tendered his letter of resignation to be effective a month after.
It is with much reluctance and regret that I must ask to be released from my position of Sales Engineer at Avesco Marketing. For the past seven years, I cannot forget how much this company has meant to me. With this regard, I'm tendering my resignation effective on April 25, 2003. Please extend to Mr. Jimmy Tang my appreciation of his kindness during the time I served. (Emphasis and underscoring supplied)

employee as proof of voluntary resignation yet the employee specifically denies such evidence, as in petitioner's case, the employer is burdened to prove the due execution and genuineness of such evidence. Avesco failed to discharge such burden. For a resignation tendered by an employee to take effect, it should first be accepted or approved by the employer. That Avesco issued the "show cause" letter a day after petitioner filed the controversial letter of resignation could only mean that it did not accept the same. Petitioner's "resignation" being premised on a qualification that it be effective April 25, 2003 was conditional in character. It is thus only considered as a mere offer. Since respondent did not accept the condition attendant to the offer as, it bears repeating, he was in fact given a "show cause" letter a day after, there was no resignation to speak of. This brings the Court to the issue of whether petitioner was illegally dismissed. The Court finds in the affirmative. While selling of respondent's competitors' products is a valid ground for termination of employment, an employer cannot just hurl generalized accusations but should at least cite specific instances and proof in support thereof. There was no testimonial or documentary proof proffered. There is also no showing that an investigation was conducted.

Prior to this letter, Mora was confronted for "selling competitors' products" to the prejudice and detriment of respondent and was given the option of either immediately resigning or face administrative charges. On the same day, he changed his mind and withdrew his letter of resignation after Avesco denied such request. The following day, Mora was issued a notice of disciplinary action alleging that he committed a breach of trust by surreptitiously undertaking a sales transaction patently inimical to the interest of the Company that results to sales loss for the company. Mora was required to explain within 48 hours from receipt why he should not be dismissed and was placed under preventive suspension. Mora gave his side on March 27, claiming that he was not culpable and that the allegations were based on speculation for he never transacts with products other than Avescos. Despite this explanation, Mora did not hear from Avesco and only learned from third party sources that his employment was terminated as of April 1, 2003. The labor arbiter dismissed Moras complaint for illegal dismissal for lack of jurisdiction since the dispute falls within the province of the grievance procedure provided for by the Collective Bargaining Agreement between Avesco and the workers' union. The case was thus referred to the National Conciliation and Mediation Board for voluntary arbitration. Voluntary Arbitrator (VA) Barriatos, by Decision of August 23, 2004, dismissed Mora's complaint upon the ground that he had voluntarily resigned. On certiorari, the Court of Appeals denied such, similarly finding him to have voluntarily resigned. On the issue of whether or not his resignation was valid, the Supreme Court held in the negative. There was also an issue on procedural infirmity1, but the Court has resolved to rule on the merits of the present petition in the interest of substantial justice to arrive at the proper conclusion that is conformable to the evidentiary facts. It is incumbent upon the employer to prove that the employee voluntarily resigned (Mobile Protective & Detective Agency v. Ompad). Voluntary resignations being unconditional in nature, both the intent and the overt act of relinquishment should concur. If the employer introduces evidence purportedly executed by an

14. Alabang Country Club vs. NLRC GR. No. 170287, February 14, 2008 Facts: Petitioner Alabang Country Club Inc. is a domestic non profit corporation while respondent Alabang Country Club Independent Employees Union is the exclusive bargaining agent of the Clubs rank and file employees. Other respondents to the case are Christopher Pizarro, Michael Braza, and Nolasco Castueras were elected as Union President, Vice President, and Treasurer. In 1999, the petitioner and respondent union entered into a collective bargaining agreement which provided for a union shop and maintenance of membership shop. The pertinent section states: Sec. 4 Termination Upon Union Demand Upon written demand of the Union and after observing due process, the Club shall dismiss a regular employee on any of the following grounds A) Failure to join the Union within 5 days form the time of regularization; B) Resignation from the Union, except within the period allowed by law; C) Conviction of a crime involving moral turpitude; D) Non payment of Union dues, fees, and assessments; E) Joining another Union except within the period allowed by law; F) Malversation of Union funds; G) Actively campaigning to discourage membership in the Union and; F) Inflicting harm or injury to any member or officer of the Union. Subsequently, the club and the union discovered some

The Court notes that the appellate court erred in giving due course to petitioner's petition for certiorari, for his proper mode of appeal was for review under Rule 43 of the 1997 Rules of Civil Procedure. Section 1 of Rule 43 states that the rule applies to voluntary arbitrators. Sec. 4, however, requires that the petition for review to be taken to the Court of Appeals should be filed within fifteen (15) days from notice of the award, judgment or final order or resolution of the VA. Mora filed before the appellate court a petition for certiorari 49 days after receipt of the decision of the VA at which time the 15-day period to file appeal had expired.

irregularly recorded entries, unaccounted expenses and disbursement and uncollected loans form the Union funds. The three respondents were called for a meeting to explain their side, they were given the opportunity to explain all their accountabilities verbal and written and they all denied their wrong doing however failed to satisfy the board for the acts they have committed Despite their explanation, the three were furnished an individual letters of expulsion for Malversation of Funds. In the letter, the Union invoking the Security Claus of the CBA demanded that the Club dismiss the three. The three respondents challenged their dismissal and filed a complaint in the Labor Arbiter. The latter dismiss their complaint and ruled that their dismissal in based on just cause and thus they were not illegally dismissed The respondents appeal to the NLRC and CA which reverse the decision of the Labor Arbiter sighting sec. 2(b), Rule XXIII Book V of the Omnibus Rules Implementing the Labor Code finding that respondents were not accorded with due process and were not given the opportunity to be heard in a separate hearing, thus the NLRC issued an order for the reinstatement of the respondents without loss of their seniority rights and full backwages. Hence, petitioner Alabang Country Club filed a petitioner for certiorari to the Supreme Court

reasons to distrust her. The court denied her petition and affirmed the decision of the CA. Petitioner not contented; file a motion for reconsideration arguing that the court failed to consider her length service to PET in affirming her termination from employment. She pleaded that she be awarded separation pay and retirement benefits out of humanitarian consideration. The court denied her motion for reconsideration with FINALITY for lack of merit. Hence, the petitioner filed another Motion for Reconsideration for the second time

Issues: Whether or not a second motion for reconsideration can be entertained by the Supreme Court Whether or not petitioner is entitled to separation pay and retirement benefits for just termination. Held: On the first issue, the court ruled that Sec. 2 of Rule 52 Rules of court explicitly states that no second motion for reconsideration of a judgment or final resolution by the same party be entertained. Accordingly, a second motion for reconsideration is prohibited pleading which shall not be allowed, except for extraordinarily persuasive reasons only after an express leave shall have first been obtained. However, in this case, the court failed to find such any extraordinarily persuasive reason to allow Tirazonas second motion for reconsideration. With regards to the second issue the general rule is that separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for cause other than those serious misconduct or those reflecting on his moral character. However the court contends that this would tolerate the employee who steals from the company is granted separation pay even as he is validly dismissed, it is not unlikely that he will commit a similar offense in his next employment because he thinks he can expect leniency. Thus, her attitude towards her employer was a clear inconsistent with her position of trust and confidence. Her poor character became even more evident when she read what was supposed to be a confidential letter of the legal counsel of PET to PET officer and directors. In accordance to separation pay, it is valid that Tirazona is not entitled to separation pay. With regards to her retirement benefits, it is also denied. Wherefore, the Motion for Leave to File a Second Motion for Reconsideration is denied and NOTED WITHOUT ACTION.

Issues: Whether or not the three respondents were illegally dismissed by the petitioner Whether or not respondents were afforded due process On the first issue, the court enumerated the valid grounds for termination namely: Art. 282, Art. 283, Art. 284 and Art. 285. Further another cause for termination of dismissal from employment is due to the enforcement of the union security clause in the CBA. Termination of employment by virtue of a union security clause embodied in the CBA is recognized in our jurisdiction. It is also clear upon demand by the Union and after due process; the Club shall dismiss the employment of the respondents who were found liable to the offense. Not let us go with the second issue. In the present case, the Club has substantially complied with due process. The three respondents were notified that their dismissal was being requested by the Union, and their explanations were heard. The three were dismissed only after the Club reviewed and considered the documents submitted by the Union and the written explanation submitted by the three respondents. Upon these circumstances, the court held that the Club has afforded the three respondents with a reasonable opportunity to be heard and defend themselves Wherefore, the decision of the NLRC and CA were dismissed and upholding the decision of the Labor Arbiter. 15. Tirazona vs. Philippine Techno Service GR. No. 169712, January 20, 2009 Facts: Petitioner Tirazona being the Administrative Manager of the Philippine EDS Techno Service, Inc. was a managerial employee who held a position of trust and confidence; that after PET officer/ directors called her attention to her improper handling of a situation involving a rank and file employee, she claimed that she was denied due process for which she demanded Php 2,000,000.00. Thus, she admitted reading a confidential letter addressed to PET regarding her case and that she was validly terminated from her employment on the ground that she willfully breached the trust and confidence reposed in her by her employer. The court concludes that Tirazona has given PET more enough

16 Masmud v. NLRC G.R. No. 183385 February 13, 2009 NACHURA,J: Facts: Evangelina Masmuds husband, the late Alexander Masmud filed a complaint against First Victory Shipping Services Angelakos (Hellas) for non-payment of permanent disability benefits, medical expenses, sickness allowance, moral and exemplary damages and attorneys fees. Alexander engaged the services of Atty. Rolando Go as his counsel. In consideration of Atty. Gos legal services, Alexander agreed to pay on contingent basis: 20% of total monetary claims as settled or paid and an additional 10% in case of appeal. And any award for attorneys fees shall pertain to respondents law firm as compensation.

The LA granted monetary claims of Alexander wherein Hellas shall jointly and severally pay Alexander total permanent disability benefits of US$60,000 and his sickness allowance of US$2,348, both in Philippine currency at current exchange rate and to further pay P200,000 as moral damages, P100,000 as exemplary damages and attorneys fees of 10% of the total monetary award. Claim for medical expenses were dismissed Hellas appealed to NLRC, during pendency Alexander died, Atty. Go explained to Evangelina the terms of the lawyers fees and she became the substitute complainant. NLRC dismissed the appeal of Hellas. It filed a motion for reconsideration but was denied.On appeal before the CA, the decision of LA was affirmed with modification deleting award for moral and exemplary damages. Hellas filed a petition for certiorari but was dismissed. The decision of the NLRC became final and executory. Atty. Go. Filed the execution of the decision of the NLRC and was granted by LA.Surety bond of the employer was garnished and it was delivered to NLRC cashier, through NLRC sheriff, the check of P 3,454,079.20. Atty. Go moved for the release of the said amount to Evangelina. LA directed the release of the amount. Evangelina paid Atty. GO the sum of P680,000 Atty. Go filed a motion to record and enforce the attorneys lien alleging that Evangelina reneged (break her promise) on the contingent fee agreement. The amount paid was only 20% of the award as attorneys fees leaving 10% balance, plus the award to the counsel as attorneys fees.In Reply to Atty. Gos motion, Evangelina manifested that the claim for attorneys fees of 40% of the total monetary award was null and void based on Art. 111 of the Labor Code. LA granted Atty. Gos motion wherein the balance of unpaid 20% of attorneys fees or P839,587.39 should be paid by Evangelina. NLRC Cashier is directed to pay the counsel the amount of P677,589.96 which is currently deposited. Evangelina questioned the order of LA before the NLRC and it was dismissed. It was elevated before the CA, partially granting the petition. Declaring Atty. Go is fully compensated with the amount of 1,347,950.11 that he already received.Evangelina filed for a Motion for Reconsideration but CA denied. Hence this petition. Issue: W/N the CA erred awarding the claim of 40% of the monetary award in a labor case as attorneys fees to Atty. Go? NO. Held: There are 2 concepts of attorneys fees: 1) in the ordinary concept where it represent the reasonable compensation paid to a lawyer by his client for the legal services and 2) extraordinary concept where it may be awarded by the court as indemnity for the damages to be paid by the losing party to the prevailing party. Ordinary Concept is applied in this case, Atty. Go is entitled to receive compensation for representing Evangelina. Art. 111 of the Labor Code Attorney's fees. (a) In cases of unlawful withholding of wages the culpable party may be assessed attorney's fees equivalent to ten percent of the amount of the wages recovered deals with the extraordinary concept where it regulated the amount recoverable as attorneys fees in the nature of damages sustained by and awarded to the prevailing party. It may not be used as the standard in fixing the amount payable to the lawyer by his client for the legal services he rendered.

Sec. 24, Rule 138 Rules of Court should be observed in determining Atty. Gos compensation. The contract between Atty. Go and Evangelina provides for a contingent fee. The contract shall control unless found by the court to be unconscionable or unreasonable. Fees are unconscionable if they affront ones sense of justice,decency or reasonableness. The decree of unconscionability of a stipulated amount in a contingent fee contract will not preclude recovery. It merely justifies the fixing by the court of a reasonable conpensation for the lawyers services. Under Canon 20, Rule 20.01, Canon of Profession responsibility set a criteria for assessing the proper amount of compensation that a lawyer should receive: (a) The time spent and the extent of the services rendered or required;(b) The novelty and difficulty of the question involved;(c) The importance of the subject matter;(d) The skill demanded;(e) The probability of losing other employment as a result of acceptance of the proffered case;(f) The customary charges for similar services and the schedule of fees of the IBP Chapter to which he belongs;(g) The amount involved in the controversy and the benefits resulting to the client from the service;(h) The contingency or certainty of compensation;(i) The character of the employment, whether occasional or established; and(j) The professional standing of the lawyer. Contingent fee contracts are subject to supervision and close scrutiny of the court it order that clients may be protected from unjust charges. The court finds nothing illegal in the contingent fee contract between Atty. Go and Alexander (Evangelinas husband). CA committed no error of law when it awarded attoryneys fees. 17 San Miguel Corporation v. Teodisio G.R. No 163033 October 2, 2009 PERALTA, J: Facts: On Sept. 5, 1991, Teodisio was hired by SMC as casual forklift operator in Bacolod city brewery. He continuously worked until March 1992 after which he was asked to rest for a while. A month after, sometime in April 1992, Teodisio was rehired to the same position and served for 5 to 6 months and again asked to rest. After 3 weeks he was again rehired, and he continued to work until Aug. 1993. On Aug 1993 he was made to sign an Employment with a fixed Period contract by SMC where it was stipulated that Teodisios employment would be from Aug 7, 1993 to Aug 30, 1995 or upon cessation of the instability/ fluctuation on the market demand, whichever comes first. Teodisio worked at the plant without interruption. On Mar 20,1995, Teodisio was transferred to the bottling section as a case piler. In a letter dated April 10,1995, Teodisio formally informed SMC of his opposition to the transfer. He asserted that would be more effective as a forklift operator because he was employed as such for more than 3 years. He requested to be transferred to his former position but SMC did not answer. In an undated letter, Teodisio informed SMC that he was applying for the vacant position of bottling crew because he wanted to become a regular employee of SMC. SMC notified Teodisio that his employment shall be terminated in compliance with the Employment with a Fixed period contract. SMC explained that it was due to the reorganization and streamlining operation. Teodisio expressed his dismay for the dismissal in a letter where he informed SMC, despite of being compelled to receive

separation pay and forced to sign a waiver, this does not mean that he was waiving his right to question his dismissal and to claim employment benefits as provided in CBA and company policies. Thereafter Teodisio signed a Receipt and Release document in favor of SMC and accepted his separation pay and thereby releasing all his claims with SMC. Teodisio filed a complaint against SMC before the NLRC for illegal dismissal and underpayment of wages and other benefits. LA dismissed the complaint for lack of merit. The said contract of employment with fixed period was a legitimate exercise of management prerogative and termination is in accordance of employment contract. Also he is not a regular employee, therefore not entitled to benefit under CBA. Before the NLRC, affirmed the LAs decision. In the CA, it granted the petition to annul and set aside the decision of NLRC. CA ratiocinated that the Employment with a Fixed period contract was just a scheme of SMC to circumvent the respondents security of tenure and concluded that before Teodisio signed the employment contracts he already attained the status of a regular employee. His transfer and dismissal is tainted with bad faith and declared the Receipt and Release document signed, since the law proscribes any agreement whereby a worker agrees to receive less compensation than what he is entitled to recover. It also added that a deed of release or quitclaim cannot bar an employee from demanding benefits. SMC filed for MR but was denied and hence this petition. Issue: W/N Teodisio was a regular employee? YES Held: Under Art. 280, Labor Code, there are 2 kinds of regular employees: 1) regular employees by nature of work refers to those employees who perform a particular activity which is necessary or desirable in the usual business or trade of the employer, regardless of their length or service 2) regular employees by years of service refers to employees who have been performing the job, regardless of the nature, for at least a year, even if 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. The court is convinced that Teodisio has attained the status of regular employee long before he executed the employment contract with a fixed period. Teodisio was initially hired by SMC on Sept. 5, 1992, rehired for the same position on April 1992 which lasted for 5 to 6 months, after 3 weeks rehired again until August 1993. When he signed the Employment with fixed period contract. He has already been in the employment of SMC for 23 months. The labor code provides that a casual employee shall be considered as regular employee if said causal employee has rendered at least one year of service regardless of the fact that such service may be continuous or broken. The nature of Teodisios work is necessary for business in which SMC is engaged. SMC maintains a brewery while Teodisio is a forklift operator whose task is to lift and transfer pallets and pile them from the bottling section to piling area. SMC also wanted the court to believe that its full automation o the brewery and new marketing distribution systems resulted the reduction of personnel and termination of employees with a fixed period contract. However after installation of automated palletizers, SMC did not leave the position of forklift operator

vacant. This shows the necessity and indispensability of hiring a forklift operator to the business of SMC. Teodisio is a regular employee of SMC and employment contract with a fixed period was meant only to circumvent respondents right to security of tenure and therefore invalid. In the case of Brent School, Inc. v. Zamora, the court made it clear that a contract of employment stipulating a fixed term is invalid if it can be shown that it was executed with intention of circumventing an employees right to security of tenure and should thus be ignored. Moreover, that the period that was imposed to preclude the acquisition of tenurial security by the employee should struck down as contrary to law, morals, good customs, public order and public policy. Teodisio having gained a status of a regular employee is entitled to security of tenure and could only be dismissed on just or authorized causes after he has been accorded due process. The termination of respondents employment based on the fixed contract and giving Teodisio opportunity to become a regular employee when he was transferred to bottling section do not constitute just or authorized cause. The receipt and release document signed by Teodisio wherein he is barred from demanding benefits to which he is legally entitled are frowned upon by the court because it is contrary to public policy. The burden of proving that the quitclaim or waiver was voluntarily entered rests on the employer. SMC failed to discharge this burden, in effect Teodisio did not waive his right to question his dismissal and claims to employment benefits.

18. Becmen Service Exporter & Promotion, Inc. v. Cuaresma G.R. Nos. 182978-79. April 7, 2009. FACTS: Jasmin Cuaresma was deployed by Becmen Service Exporter and Promotion, Inc. to serve as assistant nurse in Al-Birk Hospital in the Kingdom of Saudi Arabia (KSA), for a contract duration of 3 years, with a corresponding salary of US$247.00 per month. A year later, she was found dead in her dormitory room. The examining physician of the Al-Birk Hospital concluded that the cause of her death was poisoning. Her body was repatriated to Manila and the following day, the City Health Officer of Cabanatuan City conducted an autopsy and found that Jasmin died of violent circumstances due to lacerations and abrasions on various parts of her body and not poisoning as found by the physician from KSA. The NBI also conducted another autopsy and the toxicology report tested negative for non-volatile, metallic poison and insecticides. Jasmins parents received from the Overseas Workers Welfare Administration (OWWA) amounts for death, funeral and medical reimbursement benefits.The Cuaresmas filed a complaint against Becmen and its principal in the KSA, Rajab & Silsilah Company, claiming death and insurance benefits, as well as moral and exemplary damages for Jasmins death, claiming that Jasmins death was work-related, having occurred at the employers premises. Becmen and Rajab insist that Jasmin committed suicide, citing a prior unsuccessful suicide attempt and relying on the medical report of the KSA physician. While the case was pending, Becmen filed a manifestation and motion for substitution alleging that Rajab terminated their agency relationship and had appointed White Falcon Services, Inc. (White Falcon) as its new recruitment agent in the Philippines. Thus, White Falcon was impleaded as respondent and it adopted and reiterated Becmens arguments.

The LA dismissed the complaint for lack of merit, gave weight to the medical report of the Al-Birk Hospital finding that Jasmin died of suicide through poisoning and held that her death was not service-connected, nor did it occur while she was on duty. The LA also noted that her parents have received all corresponding benefits they were entitled to under the law. The NLRC reversed the same and held that Jasmins death was the result of an accident occurring within the employers premises that is attributable to her employment, or to the conditions under which she lived, and thus arose out of and in the course of her employment as nurse. The CA affirmed the decision of the NLRC but amended the same with respect to the monetary award. ISSUE; Whether or not Rajab & Silsilah Company, White Falcon Services, Inc., Becmen Service Exporter and Promotion, Inc. are liable for the death of Jasmin Cuaresma. RULING: They are liable. Under Republic Act No. 8042 (R.A. 8042), or the Migrant Workers and Overseas Filipinos Act of 1995, the State shall, uphold the dignity of its citizens whether in country or overseas, and provide adequate and timely social, economic and legal services to Filipino migrant workers. Recruitment agencies should be the first to come to the rescue of our OFWs. Upon them lies the primary obligation to protect the rights and ensure the welfare of our OFWs, whether distressed or not. Private employment agencies are held jointly and severally liable with the foreign-based employer for any violation of the recruitment agreement or contract of employment. This joint and solidary liability imposed by law against recruitment agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages Becmen and White Falcon, as licensed local recruitment agencies, miserably failed to abide by the provisions of R.A. 8042.Recruitment agencies are expected to extend assistance to their deployed OFWs, especially those in distress. The evidence does not even show that Becmen and Rajab lifted a finger to provide legal representation and seek an investigation of Jasmins case. They even stood by the argument that Jasmin committed suicide in order to render the case closed and place their own financial and corporate interests above their moral and social obligations, by choosing to secure and insulate themselves from the perceived responsibility of having to answer for and indemnify Jasmins heirs for her death. Clearly, Rajab, Becmen and White Falcons acts and omissions are against public policy because they undermine and subvert the interest and general welfare of our OFWs abroad, who are entitled to full protection under the law. Their shabby and callous treatment of Jasmins case; their uncaring attitude; their unjustified failure and refusal to assist in the determination of the true circumstances surrounding her mysterious death, and instead finding satisfaction in the unreasonable insistence that she committed suicide just so they can conveniently avoid pecuniary liability; placing their own corporate interests above of the welfare of their employees all these are contrary to morals, good customs and public policy, and constitute taking advantage of the poor employee and her familys ignorance, helplessness, indigence and lack of power and resources 19. Alcatel Phils., Inc. and Delos Reyes v. Relos

G.R. No. 164315. July 3, 2009 FACTS: Alcatel is a domestic corporation primarily engaged in the business of installation and supply of telecommunications equipment. The company offered respondent Relos temporary employment as Estimator/Draftsman Civil Works to assist in the preparation of manholes and conduit design for the proposal preparation for a project for a period of approximately 1 month. When Alcatel undertook the same project in the Eastern Visayas and Eastern Mindanao for PLDT, Relos was again given temporary employment as Civil Works Inspector for another period of more than one month. Upon the expiration of his contract, Relos was again offered temporary employment this time as Civil Works Engineer for a certain period. He was offered temporary employment in the same capacity for 5 more times and the company renewed respondents contract 2 more times. Thereafter, Alcatel informed respondent through a letter that the civil works portion of the project was near completion; however, the remaining works encountered certain delays and had not been completed as scheduled. Alcatel then extended respondents employment for another 3 months. Alcatel informed Relos that the project was nearing completion and that his contract with Alcatel would expire on the same day. He was also asked to settle all his accountabilities with the company and advised him that he would be called if it has future projects that require his expertise. Relos filed a complaint for illegal dismissal, separation pay, unpaid wages, unpaid overtime pay, damages, and attorneys fees against Alcatel, alleging that he was a regular employee and that he was dismissed during the existence of the project. The LA declared that respondent was a regular employee of Alcatel and that he was illegally dismissed. The NLRC reversed the LAs decision. The CA set aside the NLRCs decision and held that Relos was a regular employee of Alcatel. ISSUE: Whether or not respondent was a regular employee of Alcatel. RULING: Relos is not a regular employee. He is only a project employee. The specific projects for which respondent was hired and the periods of employment were specified in his employment contracts. The services he rendered, the duration and scope of each employment are clear indications that respondent was hired as a project employee. The principal test for determining whether a particular employee is a project employee or a regular employee is whether the project employee was assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employee is engaged for the project. Project may refer to a particular job or undertaking that is within the regular or usual business of the employer, but which is distinct and separate and identifiable as such from the undertakings of the company. Such job or undertaking begins and ends at determined or determinable times. The specific projects for which respondent was hired and the periods of employment were specified in his employment contracts. The services he rendered, the duration and scope of each employment are clear indications that respondent was hired as a project employee. Relos contention that he became a regular employee because he was continuously rehired by Alcatel every termination of his contract is untenable. In Maraguinot, Jr. v. NLRC, A project employee or a member of a work pool may acquire the status of a regular

employee when the following concur: (1) There is a continuous rehiring of project employees even after the cessation of a project; (2) The tasks performed by the alleged project employee are vital, necessary and indispensable to the usual business or trade of the employer. While respondent performed tasks that were clearly vital, necessary and indispensable to the usual business or trade of Alcatel, respondent was not continuously rehired by Alcatel after the cessation of every project. Alcatels continuous rehiring of respondent in various capacities from February 1991 to December 1995 was done entirely within the framework of one and the same project the PLDT 1342 project The employment of a project employee ends on the date specified in the employment contract. Therefore, respondent was not illegally dismissed but his employment terminated upon the expiration of his employment contract. 20. Escasinas and Singco VS Shangrila Mactan Island Resort GR. No. 178827, March 4, 2009 Carpio-Morales FACTS: Registered nurses Jeromie D. Escasinas and Evan Rigor Singco (petitioners) were engaged in 1999 and 1996, respectively, by Dr. Jessica Joyce R. Pepito (respondent doctor) to work in her clinic at respondent Shangri-las Mactan Island Resort (Shangri-la) in Cebu of which she was a retained physician. In late 2002, petitioners filed with the National Labor Relations Commission (NLRC) a complaint for regularization, underpayment of wages, non-payment of holiday pay, night shift differential and 13th month pay differential against respondents, claiming that they are regular employees of Shangri-la. Shangrila claimed, however, that petitioners were not its employees but of respondent doctor whom it retained via Memorandum of Agreement. Respondent doctor for her part claimed that petitioners were already working for the previous retained physicians of Shangri-la before she was retained by Shangri-la; and that she maintained petitioners services upon their request. Labor Arbiter Ernesto F. Carreon, declared petitioners to be regular employees of Shangri-la. The Arbiter thus ordered Shangri-la to grant them the wages and benefits due them as regular employees from the time their services were engaged. The Arbiter noted that they usually perform work which is necessary and desirable to Shangri-las business; that they observe clinic hours and render services only to Shangri-las guests and employees; that payment for their salaries were recommended to Shangri-las Human Resource Department (HRD); that respondent doctor was Shangri-las in-house physician, hence, also an employee; and that the MOA between Shangri-la and respondent doctor was an insidious mechanism in order to circumvent [the doctors] tenurial security and that of the employees under her. The NLRC granted Shangri-las and respondent doctors appeal finding that no employer-employee relationship exists between petitioner and Shangri-la. In so deciding, the NLRC held that the Arbiter erred in interpreting Article 157 in relation to Article 280 of the Labor Code, as what is required under Article 157 is that the employer should provide the services of medical personnel to its employees, but nowhere in said article is a provision that nurses are required to be employed; that contrary to the finding of the Arbiter, even if Article 280 states that if a worker performs work usually necessary or desirable in the business of the employer, he cannot be automatically deemed a

regular employee; and that the MOA amply shows that respondent doctor was in fact engaged by Shangri-la on a retainer basis, under which she could hire her own nurses and other clinic personnel. Petitioners thereupon brought the case to the Court of Appeals, which affirmed the NLRC Decision that no employeremployee relationship exists between Shangri-la and petitioners. ISSUE: (1) Whether or not the full time nurses are regular employees. (2) Whether or not the doctor is an independent contractor. RULING: (1) Pursuant to Article 157 of the Labor Code, Shangri-la, which employs more than 200 workers, is mandated to furnish its employees with the services of a full-time registered nurse, a part-time physician and dentist, and an emergency clinic which means that it should provide or make available such medical and allied services to its employees, not necessarily to hire or employ a service provider. The term full-time in Art. 157 cannot be construed as referring to the type of employment of the person engaged to provide the services, for Article 157 must not be read alongside Art. 280 in order to vest employer-employee relationship on the employer and the person so engaged. The phrase services of a full-time registered nurse should thus be taken to refer to the kind of services that the nurse will render in the companys premises and to its employees, not the manner of his engagement. (2) In ruling in the affirmative, the court held that the existence of an independent and permissible contractor relationship is generally established by considering the following determinants: whether the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of a specified piece of work; the control and supervision of the work to another; the employer's power with respect to the hiring, firing and payment of the contractor's workers; the control of the premises; the duty to supply the premises, tools, appliances, materials and labor; and the mode, manner and terms of payment. 21. La Rosa Vs Ambassador Hotel GR No. 177059, March 13, 2009 Carpio-Morales FACTS: On April 17, 2002, employees of Ambassador Hotel including herein petitioners filed before the National Labor Relations Commission (NLRC) several complaints for illegal dismissal, illegal suspension, and illegal deductions against the hotel (respondent) and its manager, Yolanda L. Chan. They alleged that, following their filing of complaints with the Department of Labor and Employment-NCR which prompted an inspection of the hotels premises by a labor inspector, respondent was found to have been violating labor standards laws and was thus ordered to pay them some money claims. This purportedly angered respondents management, which retaliated by suspending and/or constructively dismissing them by drastically reducing their workdays through the adoption of a work reduction/rotation scheme. Criminal cases for estafa were likewise allegedly filed against several of the employees involved, some of which cases were eventually dismissed by the prosecutors office for lack of merit.

The labor arbiter found respondent and its manager Yolanda L. Chan guilty of illegal dismissal and ordered them to pay petitioners separation pay at month for every year of service with full backwages, and 10% of the monetary award as attorneys fees. The NLRC affirmed the labor arbiters ruling with the modification that five of the complainants were directed to report back to work, and respondent was directed to accept them without having to pay them backwages. The appellate court reversed the NLRC decision and dismissed petitioners complaints, holding that there was no constructive dismissal because petitioners "simply disappeared from work" upon learning of the work reduction/rotation scheme; and that in their position paper submitted before the NLRC, petitioners only prayed for separation pay and not for reinstatement, hence, following settled jurisprudence, the latter relief has been foreclosed. ISSUE: Whether or not petitioners were illegally dismissed. RULING: In ruling in the affirmative he Court held constructive dismissal occurs when there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee.9 Respondents sudden, arbitrary and unfounded adoption of the two-day work scheme, which greatly reduced petitioners salaries, renders it liable for constructive dismissal. Respecting the appellate courts ruling that petitioners "simply disappeared" from their work, hence, they are guilty of abandonment, the same does not lie. Absence must be accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work anymore. And the burden of proof to show that there was unjustified refusal to go back to work rests on the employer. Abandonment is a matter of intention and cannot lightly be inferred or legally presumed from certain equivocal acts. For abandonment to exist, two requisites must concur: first, the employee must have failed to report for work or must have been absent without valid or justifiable reason; and second, there must have been a clear intention on the part of the employee to sever the employer-employee relationship as manifested by some overt acts. The second element is the more determinative factor. Abandonment as a just ground for dismissal thus requires clear, willful, deliberate, and unjustified refusal of the employee to resume employment. Mere absence or failure to report for work, even after notice to return, is not tantamount to abandonment. Also, petitioners immediate filing of complaints for illegal suspension and illegal dismissal after the implementation of the questioned work scheme, which scheme was adopted soon after petitioners complaints against respondent for violation of labor standards laws were found meritorious, negates respondents claim of abandonment. An employee who takes steps to protest his dismissal cannot by logic be said to have abandoned his work.