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[G.R. No.

164156 September 26, 2006] ABS-CBN BROADCASTING CORPORATION, Petitioner, vs MARLYN NAZARENO, MERLOU GERZON, JENNIFER DEIPARINE, and JOSEPHINE LERASAN, Respondents. FACTS Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants (PAs) on different dates. They were assigned at the news and public affairs, for various radio programs in the Cebu Broadcasting Station, with a monthly compensation of P4,000. They were issued ABS-CBN employees identification cards and were required to work for a minimum of eight hours a day, including Sundays and holidays. The PAs were under the control and supervision of Assistant Station Manager Dante J. Luzon, and News Manager Leo Lastimosa. On October 12, 2000, respondents filed a Complaint for Recognition of Regular Employment Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against the petitioner before the NLRC. Complainants alleged that they were engaged by respondent ABS-CBN as regular and full-time employees for a continuous period of more than five (5) years with a monthly salary rate of Four Thousand (P4,000.00) pesos beginning 1995 up until the filing of this complaint on November 20, 2000. Respondents insisted that they belonged to a work pool from which petitioner chose persons to be given specific assignments at its discretion, and were thus under its direct supervision and control regardless of nomenclature. Complainants further pray of this Arbiter to declare them regular and permanent employees of respondent ABS-CBN as a condition precedent for their admission into the existing union and collective bargaining unit of respondent company where they may as such acquire or otherwise perform their obligations thereto or enjoy the benefits due therefrom. For its part, petitioner alleged in its position paper that the respondents were PAs who basically assist in the conduct of a particular program ran by an anchor or talent. Among their duties include monitoring and receiving incoming calls from listeners and field reporters and calls of news sources; generally, they perform leg work for the anchors during a program or a particular production. They are considered in the industry as program employees in that, as distinguished from regular or station employees, they are basically engaged by the station for a particular or specific program broadcasted by the radio station. Petitioner asserted that as PAs, the complainants were issued talent information sheets which are updated from time to time, and are thus made the basis to determine the programs to which they shall later be called on to assist. Petitioner maintained that PAs, reporters, anchors and talents occasionally sideline for other programs they produce, such as drama talents in other productions. As program employees, a PAs engagement is coterminous with the completion of the program, and may be extended/renewed provided that the program is on-going; a PA may also be assigned to new programs upon the cancellation of one program and the commencement of another. As such program employees, their compensation is computed on a program basis, a fixed amount for performance services irrespective of the time consumed. At any rate, petitioner claimed, as the payroll will show, respondents were paid all salaries and benefits due them under the law. Upon appeal, the NLRC held that respondents are regular employees of the petitioner and that they

are covered by the CBA. The CA likewise dismissed the petition for certiorari filed by the petitioner. Hence, this petition. ISSUE W/n respondents are regular employees of ABS CBN. HELD

Respondents are Regular employees of the petitioner, ABS CBN.

Where a person has rendered at least one year of service, regardless of the nature of the activity performed, or where the work is continuous or intermittent, the employment is considered regular as long as the activity exists, the reason being that a customary appointment is not indispensable before one may be formally declared as having attained regular status. Article 280 of the Labor Code provides: 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 or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. The primary standard, therefore, of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of work performed and its relation to the scheme of the particular business or trade in its entirety. Also, if the employee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but only with respect to such activity and while such activity exists. Not considered regular employees are project employees, the completion or termination of which is more or less determinable at the time of employment, such as those employed in connection with a particular construction project, and seasonal employees whose employment by its nature is only desirable for a limited period of time. Even then, any employee who has rendered at least one year of service, whether continuous or intermittent, is deemed regular with respect to the activity performed and while such activity actually exists. It is of no moment that petitioner hired respondents as talents. The fact that respondents received pre-agreed talent fees instead of salaries, that they did not observe the required office hours, and that they were permitted to join other productions during their free time are not conclusive of the nature of their employment. Respondents cannot be considered talents

because they are not actors or actresses or radio specialists or mere clerks or utility employees. They are regular employees who perform several different duties under the control and direction of ABS-CBN executives and supervisors. Thus, there are two kinds of regular employees under the law: (1) those engaged to perform activities which are necessary or desirable in the usual business or trade of the employer; and (2) those casual employees who have rendered at least one year of service, whether continuous or broken, with respect to the activities in which they are employed. Additionally, respondents cannot be considered as project or program employees because no evidence was presented to show that the duration and scope of the project were determined or specified at the time of their engagement. Under existing jurisprudence, project could refer to two distinguishable types of activities. First, a 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 other undertakings of the company. Such job or undertaking begins and ends at determined or determinable times. Second, the term project may also refer to a particular job or undertaking that is not within the regular business of the employer. Such a job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer. The job or undertaking also begins and ends at determined or determinable times. The principal test is whether or not the project employees were assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employees were engaged for that project. As gleaned from the records of this case, petitioner itself is not certain how to categorize respondents. In its earlier pleadings, petitioner classified respondents as program employees, and in later pleadings, independent contractors. Program employees, or project employees, are different from independent contractors because in the case of the latter, no employer-employee relationship exists. Petition is denied. G.R. No. 144376, September 13, 2006 SALVADOR BUNAGAN versus SENTINEL WATCHMAN & PROTECTIVE AGENCY, INC., FACTS Petitioner was employed by respondent as security guard and was assigned to one of its clients, La Suerte Cigar and Cigarette Factory (La Suerte). In May 1994, petitioner filed a criminal complaint for oral defamation against Lt. Maravillas, Security Manager of La Suerte. Lt. Maravillas thus requested respondent to replace petitioner. On June 1, 1994, respondent formally relieved petitioner from his post at La Suerte. Prior to said date, however, petitioner was no longer allowed to report for duty at the clients premises. Petitioner filed a complaint for illegal dismissal and money claims against respondent and La Suerte. He claimed, among others, that there was no valid or just cause for his dismissal and

that he was not accorded due process before his services were terminated. The Labor Arbiter ruled in favor of petitioner. Respondent appealed to the NLRC. The NLRC, in its resolution dated February 13, 1996, dismissed the appeal for late filing. Entry of judgment was made on March 18, 1996. On March 22, 1996, respondent filed a motion for reconsideration of the February 13, 1996 resolution. In its Decision dated July 31, 1996, the NLRC granted the motion for reconsideration despite the entry of judgment, as it was shown that respondent received a copy of the February 13, 1996 resolution only on March 21, 1996. The entry of judgment on March 18, 1996 was therefore premature. ISSUE Whether or not the Court of Appeals and the NLRC erred: 1. in not considering the Resolution dismissing the appeal of Sentinel -- with the issuance and release of Entry of Judgment for having been filed out of time, final and nothing more could be done as the NLRC thereafter had lost jurisdiction over the case; and 2. in holding that the petitioner merely relied upon his submission that there was already an Entry of Judgment and did not argue anymore on the merits of the case, which failure of petitioner was even made point against him. HELD We agree with the Court of Appeals that the entry of judgment made on March 18, 1996 was premature as respondent received a copy of the NLRC resolution dismissing the appeal only on March 21, 1996. However, despite the timeliness of the motion for reconsideration which was filed on March 22, 1996, it still failed on the merits. The NLRC initially dismissed respondents appeal for being late. It is undisputed that respondent received a copy of the decision of the Labor Arbiter on December 1, 1995. On the tenth day, or on December 11, 1995, respondent filed a Notice of Appeal with Motion for Extension of Time to File Memorandum of Appeal. Although respondent posted a surety bond on that date, it nonetheless moved for an extension of one day to file its memorandum of appeal. Under the law, an appeal from the decision of the Labor Arbiter is perfected upon filing of a memorandum of appeal and payment of the appeal fee within ten (10) calendar days from receipt of the questioned decision, award or order of the Labor Arbiter. In case of a judgment involving a monetary award, the appellant is also required to post a cash or surety bond in the amount equivalent to the monetary award in the judgment appealed from. The Rules of Procedure of the NLRC prohibits the filing of a motion for extension of time to perfect the appeal, and the filing of a notice of appeal without the memorandum of appeal will not stall the running of the period to appeal. A mere notice of appeal without complying with the other requisites shall not stop the running of the period for perfecting an appeal. Respondent did not even cite in its motion for reconsideration any justifiable excuse for the belated filing of the memorandum of appeal. Well-settled is the principle that the perfection of

an appeal within the statutory or reglementary period is not only mandatory, but jurisdictional, and failure to do so renders the questioned decision final and executory and deprives the appellate court of jurisdiction to alter the final judgment, much less to entertain the appeal. Moreover, under Article 223 of the Labor Code, an appeal from the decisions, awards or orders of the Labor Arbiter may be entertained only on the following grounds: a. If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter; b. If the decision, order or award was secured through fraud or coercion, including graft and corruption; c. If made purely on questions of law; and d. If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant. A reading of the decision of the Labor Arbiter shows that none of these conditions exists in the case at bar thus petition is GRANTED. [G.R. No. 164888 December 6, 2006] RURAL BANK OF CORON (PALAWAN), INC., EMPIRE COLD STORAGE AND DEVELOPMENT CORPORATION, CITIZENS DEVELOPMENT INCOPRORATED, CARIDAD B. GARCIA, SANDRA G. ESCAT, LORNA GARCIA, and OLGA G. ESCAT, Petitioners, vs. ANNALISA CORTES, Respondent. FACTS Respondent Annalisa Cortes was hired as of the Rural Bank of Coron. Later, she married a member of the family which ran the corporation. Respondent later on became the Financial Assistant, Personnel Officer and Corporate Secretary of The Rural Bank of Coron and some other sensitive positions in the sister companies of the Bank. On examination of the financial books of the corporations by petitioner Sandra Garcia Escat, she found out that respondent was involved in several anomalies, drawing petitioners to terminate respondents services on November 23, 1998 in petitioner corporations. Respondent filed a complaint for illegal dismissal and non-payment of salaries and other benefits with the NLRC. Petitioners moved for the dismissal of the complaint on the ground of lack of jurisdiction, contending that the case was an intra-corporate controversy involving the removal of a corporate officer, respondent being the Corporate Secretary of the Rural Bank of Coron, Inc., hence, cognizable by the Securities and Exchange Commission (SEC) pursuant to Section 5 of PD 902-A. ISSUE Whether or not the NLRC had jurisdiction over the case.

HELD The SC held that Labor Arbiter has jurisdiction over respondents complaint. While, indeed, respondent was the Corporate Secretary of the Rural Bank of Coron, she was also its Financial Assistant and the Personnel Officer of the two other petitioner corporations. Mainland Construction Co., Inc. v. Movilla instructs that a corporation can engage its corporate officers to perform services under a circumstance which would make them employees. The Labor Arbiter has thus jurisdiction over respondents complaint. Petition is denied. [G.R. No. 148372. June 27, 2005] CLARION PRINTING HOUSE, INC., and EULOGIO YUTINGCO, petitioners, vs. THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION (Third Division) and MICHELLE MICLAT, respondents. FACTS Private Respondent Michelle Miclat (Miclat) was employed on April 21, 1997 on a probationary basis as marketing assistant by petitioner Clarion Printing House (CLARION) owned by its copetitioner Eulogio Yutingco. At the time of her employment, she was not informed of the standards that would qualify her as a regular employee. On September 16, 1997, the EYCO Group of Companies of which CLARION formed part filed with the SEC a Petition for Suspension of Payments and Rehabilitation. As a result of the petition, on September 30, 1997, the SEC issued an Order approving the creation of an interim receiver for the EYCO Group of Companies. On October 10, 1997, the EYCO Group of Companies issued to its employees a Memorandum announcing the formal entry of the Receiver Group and the functions thereof. Nothing more was said in the Memorandum. On October 22, 1997, CLARION informed Miclat by telephone that her employment contract had been terminated effective October 23, 1997. Miclat filed a case for Illegal Dismissal against CLARION and Yutingco before the NLRC. On January 7, 1998 CLARION issued a Memorandum informing their company managers that the company had to shut down some operations of the company due to numerous external factors such as slowdown in business and consumer demand. Miclats Assertions before the L.A (Labor Arbiter) March, 1998: 1. She was a regular employee since CLARION never informed her of the standards to qualify as a regular EE. 2. The claims of CLARION regarding their financial status is disputable. 3. Irregardless, assuming that her termination was necessary, it was done in violation of

her right to due process since the requirement for notice was not followed, she being informed of her termination only a day before it took effect. 4. Miclat claims separation pay, 13th month pay and salaries for October 21, 22 and 23, 1997. ON the other hand, CLARION claims that: 1. Their financial status, as can be deduced from their state of receivership, justified their retrenchment. They were only following the Last In, First One Out Policy. 2. They sufficiently complied with due process, referring to a July 21, 1997 Memorandum where notice of the companys state of receivership and an offer for voluntary separation to any EE who was interested. This Memo, constituted as notice issued more than a month before Miclats termination on October 23. The Labor Arbiter decided in favor of Miclat and ordered her reinstatement, backwages and proportionate 13th month pay. CLARION appealed to the NLRC emphasizing that the dismissal of Miclat was done in good faith and in accordance with law thus she did not deserve the award given by the LA. In addition, CLARION presented their balance sheets from 1997 to 1998 and the fact that they had to shut down on 1998 as evidence of a reverse in their financial situation. The NLRC affirmed the LAs decision: There are three (3) valid requisites for valid retrenchment: (1) the retrenchment is necessary to prevent losses and such losses are proven; (2) written notices to the employees and to the Department of Labor and Employment at least one (1) month prior to the intended date of retrenchment; and (3) payment of separation pay equivalent to one (1) month pay or at least month pay for every year of service, whichever is higher. The two notices are mandatory. If the notice to the workers is later than the notices sent to DOLE, the date of termination should be at least one month from the date of notice to the workers. Also in Lopez Sugar Corporation v. Federation of Free Workers Philippine Labor Union Association (PLUA-NACUSIP) and National Labor Relations Commission, the Supreme Court had the occasion to set forth four standards which would justify retrenchment, being, 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 bona fide 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 course 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 cost than labor costs; and lastly, - the alleged losses if already realized and the expected imminent losses sought to be forestalled, must be proven by sufficient and convincing evidence. The NLRC dismissed CLARIONs petition due to its failure to present sufficient evidence pointing to the requirements mentioned regarding a justifiable retrenchment (no sufficient evidence regarding financial status) and a valid retrenchment (no compliance with two notices or

evidence regarding payment of separation pay, etc.). Hence, CLARION appealed to the CA, contending in fine that: 1. That the mere fact that CLARION was placed under receivership is evidence that they were in dire straights. 2. They complied in good faith with the requirements under law regarding dismissal of EEs. The CA affirmed the NLRCs decision in this wise: that once again, CLARION failed to prove the justifying circumstances for retrenchment and the evidence they presented regarding their subsequent shut down was inadmissible since those were presented for the first time on appeal with cause. And likewise notice was unsatisfactory. CLARION appealed to the SC. It contended in addition that Labor cases were not governed by the usual rules of procedure and therefore, the evidence presented on appeal should be admitted. The SC ruled that CLARIONs petition was partly meritorious. CLARION was right in saying that Labor cases werent governed by the usual Rules of Procedure hence the evidence should be admitted. It was also wrong for the lower court not to take judicial notice of the evidences regarding CLARIONs financial problem. In fine, CLARIONs claim that at the time it terminated Miclat it was experiencing business reverses gains more light from the SECs disapproval of the EYCO Group of Companies petition to be declared in state of suspension of payment, filed before Miclats termination, and of the SECs consequent order for the group of companies dissolution and liquidation. Notwithstanding, the SC found that Miclat was a regular EE. Section 6, Rule I of the Implementing Rules of Book VI of the Labor Code says that : SEC. 6. Probationary employment. There is probationary employment where the employee, upon his engagement, is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment, based on reasonable standards made known to him at the time of engagement. Probationary employment shall be governed by the following rules: xxx (d) In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee. Miclat must therefore be entitled to the privileges of a regular EE which brings us to the question: Should Miclat be entitled to the privileges of an illegally dismissed regular employee? The SC said yes since CLARION failed to comply with the requirements for valid dismissal under Article 283 of the LC to wit: ART. 283. CLOSURE OF ESTABLISHMENT AND REDUCTION OF PERSONNEL. The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of

the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the worker and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. Hence, nominal damages are awarded to Miclat for CLARIONs violation of her statutory due process rights. (see Tort principles) Additionally, Article 283 of the Labor Code also provides that [i]n case of retrenchment to prevent losses, . . . the separation pay shall be equivalent to one (1) month pay or at least onehalf (1/2) month pay for every year of service, whichever is higher. . . , [a] fraction of at least six (6) months [being] considered one (1) whole year,. Also, paragraph 6 of the Revised Guidelines on the 13th Month Pay Law provides: 6. 13th Month Pay of Resigned or Separated Employee An employee x x x whose services were terminated any time before the time for payment of the 13th month pay is entitled to this monetary benefit in proportion to the length of time he worked during the calendar year up to the time of his resignation or termination from the service. Thus if he worked only from January up to September his proportionate 13th month pay shall be equivalent to 1/12 of his total basic salary he earned during that period. Hence, Miclat was also rewarded separation pay and 13th month pay in addition to nominal damages.


In consequence, the Bank adopted a retrenchment and reorganization program which was challenged before the Supreme Court by the Philippine Veterans Bank Employees Union (Union, hereafter) on the ground that the program allegedly violated the security of tenure of the Banks employees. While G.R. No. 67125 was pending, the Monetary Board issued Resolution No. 612, dated June 7, 1985, ordering the liquidation of the Bank. The Monetary Board then appointed a liquidator who, pursuant to the authority vested by the same Board, terminated the employment of all the employees of the Bank Thereafter, the liquidator commenced payment of separation pay and other benefits to the terminated employees. Congress enacted Republic Act (R.A.) No. 7169, authorizing the Central Bank to reopen the Bank. Labor Arbiter The Labor Arbiter rendered a decision dismissing the claim of the Union for reinstatement of the individual complainants it represents as well as the claims for payment of backwages, for lack of merit. NLRC In time, the Union appealed the Labor Arbiters decision to the NLRC proper. NLRC rendered a Decision reversing and setting aside that of the Labor Arbiter. Additionally, the NLRC directed the immediate reinstatement of all Union members subject to the operational requirements of the Bank which it likewise ordered to cease and desist from further hiring new employees. The Bank, in its petition, docketed as G.R. No. 113423, sought to nullify the NLRC decision of September 14, 1993, reinstating the members of the Union, and its Resolution of November 22, 1993, denying the Banks motion for reconsideration. While in its petition, docketed as G.R. No. 115421, the Union sought a modification of the same decision so as to include the award of backwages. While G.R. Nos. 113423 and 115421 were pending before the Court, the Union, through its duly authorized officers, and the Bank entered into a Compromise Agreement for the amicable settlement of all other cases and claims then pending with the NLRC and/or other tribunals arising from the employment of the individual complainants with the Bank. A substantial majority of the members of the Union ratified the compromise agreement. The Labor Arbiter approved the compromise agreement and issued an Order finding the terms and conditions set forth in the Compromise Agreement to be not contrary to law, morals and public policy. A number of the employees, in separate appeals to the NLRC, contested the foregoing Order of

the Labor Arbiter. They argued that the compromise agreement is contrary to law and jurisprudence. On October 2, 1996, the NLRC decided the aforementioned separate appeals from the Labor Arbiters Order of February 16, 1996 approving the compromise agreement. The NLRC ruled that those who received and acknowledged receipt of the first payment, as agreed upon in the questioned Compromise Agreement, and who executed the corresponding Quitclaim, Waiver and Release were bound by the same Compromise Agreement. CA On December 21, 2001, the CA rendered the herein challenged consolidated decision declaring that the NLRC gravely abused its discretion in ordering the reinstatement of the union members and accordingly declared null and void its September 14, 1993 decision and the November 22, 1993 resolution, and instead reiterated the March 31, 1993 decision of the Labor Arbiter. ISSUE Was the compromise agreement entered into by the Union officers with the Bank valid? RULING Yes. The compromise agreement entered into by the Union with the Bank was valid. Petitioners fault the CA in upholding the validity of the Compromise Agreement. They claim that said agreement is not binding on employees who did not ratify it and even to those who were allegedly tricked and/or deceived by the Union into accepting the first payment under the same agreement. The argument is utterly baseless. A labor unions function is to represent its members. It can file an action or enter into compromise agreements on behalf of its members. Here, majority of the Banks employees authorized the Union to enter into a compromise agreement with the Bank on their behalves. Union members were bound by the resulting compromise agreement when they affixed their signatures thereon, thereby giving their individual assent thereto, and when they accepted the benefits due them under that agreement. As it is, the Compromise Agreement in question detailed the amounts to be received by each employee. Petitioners and other employees of the Bank knew exactly what they were ratifying when they affixed their signatures in the said compromise agreement. Further, respondent Union is a closed shop union. For this reason, it was the only one with legal authority to negotiate, transact, and enter into any agreement with the Bank. The Compromise Agreement was ratified by 282 Union members representing a majority of its entire 529 membership. The ratification of the Compromise Agreement by the majority of the Union members necessarily binds the minority. The general rule that the Labor Arbiter must be present during the signing of the compromise agreement is not immune to certain exceptions. Here, the submission of the Compromise Agreement on joint motion of the parties for approval by the Labor Arbiter cured whatever defect the signing of the agreement in the absence of the Labor Arbiter would have caused. So

it is that in Santiago v. De Guzman, the Court ruled: A compromise agreement entered into by the parties not in the presence of the Labor Arbiter before whom the case is pending shall be approved by him, if after confronting the parties, particularly the complainants, he is satisfied that they understand the terms and conditions of the settlement and that it was entered into freely and voluntarily by them. It is incumbent upon the Labor Arbiter not only to persuade the parties to settle amicably, but equally to ensure the compromise agreement is a fair one and that the same was forged freely, voluntarily with full understanding of the terms and conditions embodies therein as well as the consequences thereof. It is likewise noteworthy that as of March 31, 2004, thirty (30) of the herein thirty-seven (37) petitioners already received payment under the same Compromise Agreement. The acceptance by said petitioners of the benefits bars them from repudiating the agreement. They cannot be allowed to adopt an inconsistent position at the expense of the Bank. Petitioners cannot belatedly reject or repudiate their acts of accepting the monetary consideration under the compromise agreement, to the prejudice of the Bank. Evidently, Domingo, et. al. ratified the Compromise Agreement and even voluntarily received the first payment under that agreement, executing the corresponding Quitclaim, Waiver and Release in the process. Having done that, they are deemed bound by the Compromise Agreement under the previously discussed principle of res judicata and/or estoppel. We find that the subsequent decision of petitioners Domingo, et. al. to repudiate the Compromise Agreement was merely an afterthought, whatever would be the reason for their subsequent change of mind. Since they had entered into a binding contract on their own volition and received benefits therefrom, they are therefore estopped from questioning the validity of said contract later on. Parenthetically, it is interesting to note that while the petitioners try to impugn the Compromise Agreement that they themselves entered into, they have not made any offer or effort to return the money they received as first payment under said agreement. Records reveal that when the Bank offered termination or separation pay to its remaining employees by way of a compromise agreement, a great majority of them accepted the amount as justifiable settlement of their claims. Like these quitclaims and releases, there are voluntary agreements which represent reasonable settlements and are considered binding on the parties. Petitioners, therefore, cannot renege on the compromise agreement they entered into after accepting benefits earlier simply because they may have felt that they committed a mistake in accepting their termination/separation pay. As no proof was presented to show that the compromise agreement in dispute was entered into through fraud, misrepresentation or coercion, the same must be recognized as valid and binding upon all the 529 employees of the Bank. In fine, the petitioners and the other employees are estopped from questioning the validity of the Compromise Agreement. In law, a compromise agreement, once approved, has the effect of res judicata between the parties and should not be disturbed except for vices of consent, forgery, fraud, misrepresentation and coercion, none of which exists in this case. The Compromise Agreement

between the Union and the Bank binds the minority Union members. [G.R. No. 151021 May 4, 2006] CAINTA CATHOLIC SCHOOL vs. CAINTA CATHOLIC SCHOOL EMPLOYEES UNION FACTS On 6 March 1986, a Collective Bargaining Agreement was entered into between Cainta Catholic School (School) and the Cainta Catholic School Employees Union (Union) effective 1 January 1986 to 31 May 1989. Msgr. Mariano Balbago (Balbago) was appointed School Director in April 1987. From this time, the Union became inactive. It was only in 10 September 1993 that the Union held an election of officers, with Mrs. Rosalina Llagas (Llagas) being elected as President; Paz Javier (Javier), Vice-President; Fe Villegas (Villegas), Treasurer; and Maria Luisa Santos (Santos), Secretary. Llagas was then the Dean of the Student Affairs while Villegas and Santos were Year-Level Chairmen. The other elected officers were Rizalina Fernandez, Ester Amigo, secretaries; Nena Marvilla, treasurer; Gilda Galange and Jimmy del Rosario, auditors; Filomeno Dacanay and Adelina Andres, P.R.O.s; and Danilo Amigo and Arturo Guevarra, business managers. On 15 October 1993, the School retired Llagas and Javier, who had rendered more than twenty (20) years of continuous service, pursuant to Section 2, Article X of the CBA, to wit: An employee may be retired, either upon application by the employee himself or by the decision of the Director of the School, upon reaching the age of sixty (60) or after having rendered at least twenty (20) years of service to the School the last three (3) years of which must be continuous. Because of this union struck and picketed the Schools entrances. On 11 November 1993, then Secretary of Labor Ma. Nieves R. Confesor issued an Order certifying the labor dispute to the National Labor Relations Commission (NLRC). On 20 December 1993, the School filed a petition directly with the NLRC to declare the strike illegal. While On 27 July 1994, the Union filed a complaint for unfair labor practice before the NLRC On 31 January 1997, the NLRC rendered a Resolution favoring the School. The NLRC ruled that the retirement of Llagas and Javier is legal as the School was merely exercising an option given to it under the CBA. The NLRC dismissed the unfair labor practice charge against the School for insufficiency of evidence. Furthermore, it was found that the strike declared by the Union from 8 to 12 November 1993 is illegal, thereby declaring all union officers to have lost their employment status.

However Court of Appeals ruled in favor of the respondents And concluded that the retirement of the two (2) union officers was clearly to bust the reactivated union. ISSUE Whether or not Llagas a supervisory level is entitled to join a union? HELD Llagas cannot join the union. The School insisted that Llagas and Javier were actually managerial employees, and it was illegal for the Union to have called a strike on behalf of two employees who were not legally qualified to be members of the Union in the first place. The Union, on the other hand, maintains that they are rank-and-file employees. Article 212(m) of the Labor Code defines a managerial employee as "one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions." The functions of the Dean of Student Affairs, as occupied by Llagas, are enumerated in the Faculty Manual. The salient portions are hereby enumerated: a. Manages the High School Department with the Registrar and Guidance Counselors (acting as a COLLEGIAL BODY) in the absence of the Director or Principal. b. Enforces the school rules and regulations governing students to maintain discipline. g. Plans with the Guidance Counselors student leadership training programs to encourage dynamic and responsible leadership among the students and submits the same for the approval of the Principal/Director. i. Studies proposals on extra-curricular or co-curricular activities and projects proposed by teachers and students and recommends to the Principal/Director the necessary approval. j. Implements and supervises activities and projects approved by the Principal/Director so that the activities and projects follow faithfully the conditions set forth by the Principal/Director in the approval. k. Assists in the planning, supervising and evaluating of programs of co-curricular activities in line with the philosophy and objectives of the School for the total development of the students. l. Recommends to the Principal policies and rules to serve as guides to effective implementation of the student activity program. It is fairly obvious from a perusal of the list that the Dean of Student Affairs exercises managerial functions, thereby classifying Llagas as a managerial employee. Javier was occupying the position of Subject Area Coordinator. Her duties and responsibilities include: 1. Recommends to the principals consideration the appointment of faculty members in the department, their promotion, discipline and even termination; 2. Recommends advisory responsibilities of faculty members; 3. Recommends to the principal curricular changes, purchase the books and periodicals, supplies and equipment for the growth of the school;

4. Recommends his/her colleagues and serves as channel between teachers in the department the principal and/or director. Supervisory employees, as defined in Article 212(m) are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. In the same vein, a reading of the above functions leads us to conclude that Javier was a supervisory employee. Verily, Javier made recommendations as to what actions to take in hiring, termination, disciplinary actions, and management policies, among others. We can concede, as the Court of Appeals noted, that such job descriptions or appellations are meaningless should it be established that the actual duties performed by the employees concerned are neither managerial nor supervisory in nature. Yet on this point, we defer to the factual finding of the NLRC, the proximate trier of facts, that Llagas and Javier were indeed managerial and supervisory employees, respectively. Having established that Llagas is a managerial employee, she is proscribed from joining a labor union, more so being elected as union officer. In the case of Javier, a supervisory employee, she may join a labor union composed only of supervisory employees. Finding both union officers to be employees not belonging to the rank-and-file, their membership in the Union has become questionable, rendering the Union inutile to represent their cause.





Petitioner is a domestic corporation engaged in textile manufacturing. It employed Pearanda as packer and Vidal as drugman. Both were assigned to the night shift. Pearanda was caught sleeping on the job on two occasions: first, on February 22, 2001 on the table in the packing section, for which he was penalized with a 2-day suspension and given a stern warning that a repetition of the offense would mean his dismissal; and second, on March 30, 2001, for which he was asked to explain why he should not be terminated for committing the same offense. Pearanda merely denied the allegations against him. Petitioner, however, found his denial insufficient and terminated his employment on June 20, 2001. Similarly, Vidal was caught sleeping during work hours on March 25, 2001. He was meted the same penalty and warned, as in the case of his co-respondent, since it was his first offense. On May 18, 2001, Vidal was caught sleeping for the second time inside a container van parked beside the company premises. He was asked to explain why he should not be terminated from work but he refused to comply with the order. This notwithstanding, he was given another chance to submit his written explanation but again, he stubbornly refused to comply. Petitioner dismissed him from work on June 20, 2001.

Thereafter, respondents filed separate complaints for illegal dismissal. ISSUE Whether or not respondents were validly terminated for just cause. HELD The SC held that under Article 282 of the Labor Code, willful disobedience of a lawful order of the employer is a valid cause for dismissal. Willful disobedience of the employers lawful orders, as a just cause for the dismissal of an employee, envisages the concurrence of at least two requisites: (1) the employees assailed conduct must have been willful or intentional, the willfulness being 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. On the first requisite, it is undisputed that respondents violated Company Rule 8 twice. For their first offense, both were given stern warning that another violation would cost them their jobs. Refusing to heed the warning, Vidal cleverly tried to avoid being caught sleeping a second time by sneaking inside the container van to doze off. On the other hand, Pearanda, after being awakened and warned by his supervisor, ignored the same and continued sleeping until caught by the roving guard. These circumstances clearly show that respondents behavior was perverse and willful. The second requisite is also present in this case. As a manufacturer of finished textile, petitioner utilizes machines which are operated continuously. The machines functions are interlocked in a way that a disruption in one interrupts the entire operation. Thus, petitioner found it necessary to be very explicit in prohibiting sleeping on the job in Company Rule 8. In numerous decisions, this Court has recognized that management has the right to formulate reasonable rules to regulate the conduct of its employees for the protection of its interests. These reasonable house rules are considered by the Court as lawful orders and therefore violations thereof will justify dismissal under Article 282(a) of the Labor Code. We find Company Rule 8 to be a valid exercise of management prerogative and thus a lawful order. Respondents were expected to abide by them and their transgression, despite clear warnings, provided just cause for the termination of their employment. In addition to the presence of just cause, procedural due process must also be observed to legally dismiss an employee. The Labor Code requires the employer to furnish the employee two written notices before it can terminate the latter from service: (a) a written notice containing a statement of the cause for termination to afford the employee ample opportunity to be heard and defend himself with the assistance of his representative, if he so desires; and, (b) if the employer decides to terminate the services of the employee, the employer must notify him in writing of the decision to dismiss him, stating clearly the reasons therefor. Petitioner not only satisfied the two-notice requirement, it also conducted an investigation,

albeit summary, to determine the culpability of the respondents. Respondents were confronted in detail with the charges against them and given the opportunity to present their side. Vidal, however, adamantly refused to respond to the charges and Pearanda merely chose to give a lame denial of the offense imputed to him. They were afforded a chance to defend themselves but they opted to be obstinate and complacent. The requirement of notice and hearing in termination cases does not connote full adversarial proceedings as elucidated in numerous cases decided by this Court. Actual adversarial proceedings become necessary only for clarification or when there is a need to propound searching questions to witnesses who give vague testimonies. This is a procedural right which the employee must ask for since it is not an inherent right, and summary proceedings may be conducted thereon. As long as the employee is given the opportunity to explain his side and to present evidence in support of his defense, due process is served. Petition is granted.

[G.R. No. 141371 March 24, 2006] EDNA ABAD, JOSEPH MARTINEZ and ELISEO ESCANILLAS, JR., Petitioners, vs. ROSELLE CINEMA, SILVER SCREEN CORPORATION and VERMY TRINIDAD, Respondents. FACTS This case originated from individual complaints filed by petitioners against Roselle Cinema, Silver Screen Corporation and Vermy Trinidad (respondents) for illegal dismissal, underpayment, non-payment of overtime pay, premium for holiday, premium pay for rest day, holiday pay, service incentive leave, night shift differentials, separation pay, damages, and attorneys fees. Escanillas last reported for work on January 5, 1997 after he was chastised by respondent Trinidad for cleaning the semi-dark theater without a flashlight. When he did not report for work the next day, Trinidad sent an employee to check on him, and the employee reported that Escanillas was not sick, but was driving his tricycle. The next day, an employee was again sent to Escanillas to tell the latter that he should report for work. On January 16, 1997, Escanillas, who was then under the influence of alcohol, went to see Trinidad and confronted him. Escanillas left, and was heard muttering that he was better off driving his tricycle. Escanillas was also seen milling around the theater premises with other men, in what Trinidad perceived to be an attempt on Escanillass part to make good his previous threat that he would pounce on Trinidad should Escanillas see him outside. He never reported for work again. With regard to petitioner Martinez, he last reported for work on January 15, 1997. In the evening of that day, Trinidad called him to replace a light bulb. Instead of complying, he told Trinidad that it was not his job to do it. Despite this, Trinidad asked him to report for work early the next day because he has to assist the repairman that would be coming to fix the electric fan; but Martinez did not report for work the next day. It was discovered on January 16, 1997 that a part of the company vehicle that Martinez drove was missing, and the suspect

for the loss was Martinez. Two days after he last reported for work, Martinez assumed his new job as driver with the Israel Pork and Beef Dealer. The LA found that petitioner Abad was not dismissed. On January 31, 1997, Abad was asked to explain regarding the missing shortages and overages on the canteen stocks and remittances. She was also reminded to observe decorum in the workplace, as there were several instances when her suitors had been rude to Trinidad. Abad, however, stated that she would rather resign than her personal life be interfered with. Abad then verbally offered to resign and left her station without getting her wages. ISSUE Are the employees illegally dismissed? Is there abandonment by employee in the present case? HELD 1. No. The employees are not illegally dismissed. On the part of petitioner Escanillas, he was not deprived of his chance to return to work despite his disagreement with Trinidad, and in fact, he was reminded several times by Trinidad, through his employee, to report for work, but he did not do so; he was seen driving his tricycle on a certain day when Trinidad sent his employee to ask him to report for work; and he was heard muttering that he was better off driving his tricycle. The same goes with petitioner Martinez. Inspite of his earlier insubordination, when he refused to change the light bulb as ordered by Trinidad, he was asked to report early the next day, but, like Escanillas, he did not return to work. Instead, two days after he last reported for work with respondents, he took on another job as a driver with the Israel Pork and Beef Dealer. With regard to petitioner Abad, apparently, she resented it when Trinidad asked her to explain the shortages on her charge, and when she was reminded to observe proper ethics in the workplace. Consequently, Abad was heard saying that shed rather resign, after which she manifested her intention to terminate her employment by leaving her station without getting her pay check. 2. No. The case does not involve abandonment as ground for termination. Abandonment, involves termination of an employee by the employer. There is no evidence showing that respondents were actually dismissed by petitioners, let alone, on ground of abandonment. Neither is there a showing that petitioners formally resigned from work. What is actually involved herein is the informal voluntary termination of employment by the petitioners employees. Given that petitioners were not illegally dismissed, but voluntarily terminated their work, therefore, they are not entitled to an award of separation pay and backwages.

[G.R. No. 160871 February 6, 2006] TRIAD SECURITY & ALLIED SERVICES, INC. and ANTHONY U. QUE, Petitioners, VS. SILVESTRE ORTEGA, JR., ARIEL ALVARO, RICHARD SEVILLANO, MARTIN CALLUENG, and ISAGANI CAPILA, Respondents. FACTS On 25 March 1999, respondents filed a complaint against petitioners and a certain Ret. B/Gen. Javier D. Carbonell for underpayment/nonpayment of salaries, overtime pay, premium pay for holiday and rest day, service incentive leave pay, holiday pay, and attorneys fees. The complaint was amended on 20 April 1999 to include the charges of illegal dismissal, illegal deductions, underpayment/nonpayment of allowance, separation pay, and claims for 13th month pay, moral and exemplary damages as well as night shift differential. According to respondents, during the time that they were in the employ of petitioners, they were receiving compensation which was below the minimum wage fixed by law. They were also made to render services everyday for 12 hours but were not paid the requisite overtime pay, nightshift differential, and holiday pay. Respondents likewise lamented the fact that petitioners failed to provide them with weekly rest period, service incentive leave pay, and 13th month pay. As a result of these perceived unfairness, respondents filed a complaint before the Labor Standards Enforcement Division of the Department of Labor on 6 January 1999. Upon learning of the complaint, respondents services were terminated without the benefit of notice and hearing. For their part, petitioners denied respondents claim of illegal dismissal. Petitioners explained that management policies dictate that the security guards be rotated to different assignments to avoid fraternization and that they be required to take refresher courses at their headquarters. Respondents allegedly refused to comply with these policies and instead went on leave or simply refused to report at their headquarters. As for respondents money claims, petitioners insisted that respondents worked for only eight hours a day, six days a week and that they received their premium pays for services rendered during holidays and rest day. The service incentive leave of respondents was allegedly made payable as soon as respondents applied for said benefit. ISSUE WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT DECLARED THAT THE REMEDY ADOPTED BY THE PETITIONERS IS ERRONEOUS. HELD Petitioners contend that based on the rules of procedure of the NLRC, the order granting the issuance of the 2nd alias writ of execution could not have been the proper subject of an appeal before the NLRC neither could petitioners have sought the remedy of certiorari from the NLRC. Petitioners argue that the rules of procedure of the NLRC do not provide for any remedy or procedure for challenging the order granting a writ of execution; hence, the pertinent provision of the Revised Rules of Court should apply which in this case is Section 1 of Rule 41

It is a basic tenet of procedural rules that for a special civil action for a petition for certiorari to prosper, the following requisites must concur: (1) the writ is directed against a tribunal, a board or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law. In this case, petitioners insist that the NLRC is bereft of authority to rule on a matter involving grave abuse of discretion that may be committed by a labor arbiter. Such conclusion, however, proceeds from a limited understanding of the appellate jurisdiction of the NLRC under Article 223 of the Labor Code Given the foregoing, we hold that the Court of Appeals correctly dismissed the petition for certiorari brought before it. Notwithstanding this procedural defect committed by petitioners, in the interest of substantial justice WHEREFORE, premises considered, this Court AFFIRMS the Decision of the Court of Appeals dated 31 July 2003 and the Order dated 23 April 2003 of the Labor Arbiter declaring petitioners liable for additional accrued backwages. The amount of money claims due the respondents is, however, MODIFIED. Let the records of this case be remanded to the Computation and Examination Unit of the NLRC for proper computation of subject money claims as abovediscussed. [G.R. No. 148261 October 9, 2006] NENUCA A. VELEZ, Petitioner, vs. SHANGRI-LA'S EDSA PLAZA HOTEL, TERRY KO, COEN MASSELINK and VANESSA SUATENGCO, Respondents. FACTS Petitioner Nenuca A. Velez was employed by respondent Edsa Shangri-la Hotel as an Executive Housekeeper, the highest ranking executive of the Hotel's housekeeping department, from April 1, 1991 until her dismissal on July 20, 1995. Her assistants and supervisors raised some issues and problems involving her working relationship within the department. She agreed to the petitioner that she would go on leave with pay. While on leave, investigations were conducted on the matter. Ko required the petitioner to explain her side and provided her with the staff's individual complaints. Instead of submitting the desired comment, the petitioner, through counsel, requested for a formal written notice stating the particular acts or omissions for which she was being charged. Despite the disagreement on the alleged particularity of the charges and the non-participation of the petitioner in the fact-finding investigation, the committee proceeded and came out with the following infractions committed by the petitioner: 1. Causing dissatisfaction among her staff as a result of her autocratic management style. 2. Violating some important provisions of the Hotel's Code of Conduct, to wit: Section 19. Use of Company Time Premises, etc., for Personal Benefit: Using company time,

premises, vehicles, tools, equipment or materials for personal benefit. (accusation of dishonesty (when she brought a vacuum cleaner out of the Hotel's premises and utilized the services of the Hotel contract employees to work in her house without the knowledge of the Hotel) Section 20. Unauthorized Possession of Company Property: Unauthorized possession or use of any company, employee or guest property, hotel supplies. 3. Violating, on the basis of the testimonies of her staff, the following provisions of the Hotel's Code of Conduct: Section 4. Special Treatment or Privilege/ Bribery: Bribery in any form or manner; soliciting or demanding anything of value in exchange for or in consideration of any act, decision or service connected with the performance of the employee's duties or functions. Section 5. Borrowing, Accepting Money or Soliciting Material favors from supplier/ customers: Borrowing or accepting money, gifts, commission, offers of promises or soliciting material favors from suppliers or customers with which the Company has a business relationship for his own personal benefits. Section 13. Kickbacks: Entering into arrangements with suppliers, customers or guests to certain kickbacks or other preferential treatment. On the basis of the above findings, the Hotel management terminated petitioner's employment due to "loss of confidence". The petitioner consequently filed with the NLRC-RAB a complaint for illegal dismissal against the respondents.

ISSUE Whether or not the petitioner illegally dismissed by the respondent Hotel. HELD The SC held that petitioner was not illegally dismissed by the Hotel. She was dismissed due to breach of trust, otherwise known as loss of trust and confidence. The petitioner betrayed the trust and confidence reposed on and expected of her when she brought home the Hotels vacuum cleaner and personally utilized the services of the Hotel's contract employees to work in her house without the knowledge of her employer, in violation of the Hotel's Code of Conduct. She used employees of a labor contractor of the hotel, to clean her house on a regular basis, is another case of misconduct. For a dismissal to be valid, two requisites must concur, namely: (a) the dismissal must be for any of the causes stated in Article 282 of the Labor Code; and (b) the employee must have been accorded due process, basic of which is the opportunity to be heard and to defend himself. An employer can terminate the services of an employee for just and valid causes, which must be supported by clear and convincing evidence, and with due process, meaning that the employee must be given notice with adequate opportunity to be heard before he is notified of his actual dismissal for cause.

Paragraph (c) of Article 282 of the Labor Code provides that an employer may terminate an employment for fraud or willful breach by the employee of the trust reposed in him by his employer or the latters duly authorized representative. A breach is willful if done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. The following guidelines for the application of the doctrine of loss of confidence: (a) the loss of confidence should not be simulated; (b) it should not be used as a subterfuge for causes which are improper, illegal or unjustified; (c) it should not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and (d) it must be genuine, not a mere afterthought to justify an earlier action taken in bad faith. The treatment of managerial employees from that of the rank-and-file personnel, insofar as the application of the doctrine of loss of trust and confidence is concerned, with respect to rankand-file personnel, loss of trust and confidence, as ground for valid dismissal, requires proof of involvement in the alleged events in question, and that mere uncorroborated assertions and accusations by the employer will not be sufficient. But as regards a managerial employee, the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. Hence, in the case of managerial employees, proof beyond reasonable doubt is not required, albeit the evidence must be substantial and must establish clearly and convincingly the facts on which the loss of confidence rests and not on the employer's arbitrariness, whims and caprices or suspicion, otherwise the employee would eternally remain at the mercy of the employer. Petition is dismissed.

[G.R. No. 171392 October 30, 2006] RUPERTO SULDAO, Petitioner, vs. CIMECH SYSTEM CONSTRUCTION, INC. and ENGR. RODOLFO S. LABUCAY, Respondents. FACTS Respondent Cimech employed the services of petitioner Ruperto Suldao as a machinist with a daily wage of P300.00 on a contractual status for a period of five months, but was later on retained his services, making him a permanent employee. Petitioner alleged that owing to a dearth in projects being handled by the respondent, he was ordered by Ms. Elsa Labocay to take a leave of absence from November 1 to 6, 2002. He reported for work on November 7, 2002 but was again ordered to take a leave of absence from November 7 to 14, 2002. On November 15, 2002, he was purportedly ordered to make a letterrequest for field work transfer which he complied. The following day, he failed to report back for work because he was sick. On November 17, 2002, he reported for work but was allegedly barred from entering by the security guard on duty. On November 21, 2002, he was again

barred from entering the premises. Hence he filed the instant complaint for constructive dismissal. On the other hand, respondent alleged that due to lack of available work in the machine shop, petitioner was temporarily transferred to its fabrication department sometime in November 2002. Petitioner refused to accept the transfer and insisted to work as a machinist. Because of petitioners arrogant and unruly behavior, he was led away by a guard. When petitioner returned for work, he purportedly demanded a salary increase and wages for the days that he did not work. Respondent considered the actuations of petitioner tantamount to insubordination, hence, it suspended the petitioner for six days. After his suspension on November 28, 2002, petitioner accepted his transfer to the fabrication department but worked for only one day. During the companys Christmas party on December 21, 2002, petitioner came and asked for his 13th month pay. On January 13, 2003, petitioner demanded to get his one day salary deposit but was told to secure a clearance which he failed to comply. Thereafter, petitioner filed the instant complaint for illegal dismissal. ISSUE Whether or not petitioner was constructively dismissed. HELD The SC held that petitioner was constructively dismissed. Constructive dismissal or a constructive discharge has been defined as quitting because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. In the instant case, there is constructive dismissal because the continued employment of petitioner is rendered impossible so as to foreclose any choice on his part except to resign from such employment. While the decision to transfer employees to other areas of its operations forms part of the well recognized prerogatives of management, it must be stressed, however, that the managerial prerogative to transfer personnel must not be exercised with grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. In the instant case, while petitioners transfer was valid, the manner by which respondent unjustifiably prevented him from returning to work on several occasions runs counter to the claim of good faith on the part of respondent corporation. By reporting for work, petitioner manifested his willingness to comply with the regulations of the corporation and his desire to continue working for the latter. However, he was barred from entering the premises without any explanation. This is a clear manifestation of disdain and insensibility on the part of an employer towards a particular employee and a veritable hallmark of constructive dismissal. Petition is granted.

[G.R. No. 168052 February 20, 2006] POSEIDON FISHING/TERRY DE JESUS, petitioners,- versus - NATIONAL LABOR RELATIONS COMMISSION and JIMMY S. ESTOQUIA, Respondents. FACTS Private respondent was employed by Poseidon Fishing in January 1988 as Chief Mate. After five years, he was promoted to Boat Captain. In 1999, petitioners, without reason, demoted respondent from Boat Captain to Radio Operator of petitioner Poseidon. As a Radio Operator, he monitored the daily activities in their office and recorded in the duty logbook the names of the callers and time of their calls. On 3 July 2000, private respondent failed to record a 7:25 a.m. call in one of the logbooks. However, he was able to record the same in the other logbook. Consequently, when he reviewed the two logbooks, he noticed that he was not able to record the said call in one of the logbooks so he immediately recorded the 7:25 a.m. call after the 7:30 a.m. entry. Around 9:00 oclock in the morning of 4 July 2000, petitioner Jesus, the manager, detected the error in the entry in the logbook. Subsequently, she asked private respondent to prepare an incident report to explain the reason for the said oversight. At around 2:00 oclock in the afternoon of that same day, petitioner Poseidons secretary, summoned private respondent to get his separation pay amounting to Fifty-Five Thousand Pesos (P55,000.00). However, he refused to accept the amount as he believed that he did nothing illegal to warrant his immediate discharge from work. Private respondent then filed a complaint for illegal dismissal with the Labor Arbiter. He averred that petitioner Poseidon employed him as a Chief Mate sometime in January 1988. He claimed that he was promoted to the position of Boat Captain five years after. However, in 1999, he was demoted from Boat Captain to Radio Operator without any reason and shortly, he was terminated without just cause and without due process of law. Conversely, petitioners Poseidon and Terry de Jesus strongly asserted that private respondent was a contractual or a casual employee whose services could be terminated at the end of the contract even without a just or authorized cause in view of Article 280 of the Labor Code. Petitioners further posited that when the private respondent was engaged, it was made clear to him that he was being employed only on a por viaje or per trip basis and that his employment would be terminated at the end of the trip for which he was being hired. As such, the private respondent could not be entitled to separation pay and other monetary claims. ISSUE Whether or not respondent Estoquia is a regular employee of petitioner. HELD The SC held that the ruling in the Brent case could not apply in the case at bar. The acid test in considering fixed-term contracts as valid is: if from the circumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security by the employee, they should be

disregarded for being contrary to public policy. The SC will not hesitate to nullify employment contracts stipulating a fixed term after finding that the purpose behind these contracts was to evade the application of the labor laws, since this is contrary to public policy. Moreover, unlike in the Brent case where the period of the contract was fixed and clearly stated, note that in the case at bar, the terms of employment of private respondent as provided in the Kasunduan was not only vague, it also failed to provide an actual or specific date or period for the contract. There is nothing in the contract that says complainant, who happened to be the captain of said vessel, is a casual, seasonal or a project worker. The date July 1 to 31, 1998 under the heading Pagdating had been placed there merely to indicate the possible date of arrival of the vessel and is not an indication of the status of employment of the crew of the vessel. Furthermore, as petitioners themselves admitted in their petition before this Court, private respondent was repeatedly hired as part of the boats crew and he acted in various capacities onboard the vessel. The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. And, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business. Ostensibly, in the case at bar, at different times, private respondent occupied the position of Chief Mate, Boat Captain, and Radio Operator. The act of hiring and re-hiring in various capacities is a mere gambit employed by petitioner to thwart the tenurial protection of private respondent. Such pattern of re-hiring and the recurring need for his services are testament to the necessity and indispensability of such services to petitioners business or trade. Even if petitioners contention that its industry is seasonal in nature, once a project or work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee. In fine, inasmuch as private respondents functions as described above are no doubt usually necessary or desirable in the usual business or trade of petitioner fishing company and he was hired continuously for 12 years for the same nature of tasks, we are constrained to say that he belongs to the ilk of regular employee. Being one, private respondents dismissal without valid cause was illegal. Petition is denied. Petition is denied. [G.R. No. 160854 March 3, 2006] BIG AA MANUFACTURER, Petitioner, vs. EUTIQUIO ANTONIO, JAY ANTONIO, FELICISIMO ANTONIO, and LEONARDO ANTONIO, SR., Respondents. FACTS

Petitioner is a sole proprietorship registered in the name of its proprietor, Enrico E. Alejo. Respondents Eutiquio Antonio,Jay Antonio, Felicisimo Antonio, Leonardo Antonio, Sr. and Roberto Fabian filed a complaint for illegal lay-off and illegal deductions before the NLRCs Regional Arbitration Branch No. III. They claimed that they were dismissed on January 11, 2000 and sought separation pay from petitioner. The respondents alleged that as regular employees, they worked from 8:00 a.m. to 5:00 p.m. at petitioners premises using petitioners tools and equipment and they received P250 per day. Eutiquio was employed as carpenter-foreman from 1991-1999; Jay as carpenter from 19931999; Felicisimo as carpenter from 1994-1999; and Leonardo, Sr. also as carpenter from 19971999. According to respondents, they were dismissed without just cause and due process; hence, their prayer for reinstatement and full backwages. They also impleaded one Hermie Alejo, a relative of the petitioners owner, as co-respondent in their complaint. On the other hand, petitioner Big AA Manufacturer, affirmed it is a sole proprietorship registered in the name of Enrico Alejo and engaged in manufacturing office furniture, but it denied that respondents were its regular employees. Instead, petitioner claimed that Eutiquio Antonio was one of its independent contractors who used the services of the other respondents. According to petitioner, its independent contractors were paid by results and were responsible for the salaries of their own workers. Allegedly, there was no employer-employee relationship between petitioner and respondents. However, petitioner stated it allowed respondents to use its facilities to meet job orders. Petitioner also denied that respondents were laid-off by Big AA Manufacturer, since they were project employees only. It added that since Eutiquio Antonio had refused a job order of office tables, their contractual relationship ended. Petitioner surmised that Eutiquio resented the January 10, 2000 Implementing Guidelines it issued to improve efficiency and performance. ISSUE Whether or not respondents are regular employees of petitioner Big AA. HELD The SC held that considering the submission of the parties, it is constrained to agree with the unanimous ruling of the Court of Appeals, NLRC and Labor Arbiter that respondents are petitioners regular employees. Respondents were employed for more than one year and their work as carpenters was necessary or desirable in petitioners usual trade or business of manufacturing office furniture. Under Article 280 of the Labor Code, the applicable test to determine whether an employment should be considered regular or non-regular is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. True, certain forms of employment require the performance of usual or desirable functions and exceed one year but do not necessarily result to regular employment under Article 280 of the Labor Code.21Some specific exceptions include project or seasonal employment. Yet, in this case, respondents cannot be considered project employees. Petitioner had neither shown that respondents were hired for a specific project the duration of which was determined at the time

of their hiring nor identified the specific project or phase thereof for which respondents were hired. It also agreed that Eutiquio was not an independent contractor for he does not carry a distinct and independent business, and he does not possess substantial capital or investment in tools, equipment, machinery or work premises.He works within petitioners premises using the latters tools and materials, as admitted by petitioner. Eutiquio is also under petitioners control and supervision. Attesting to this is petitioners admission that it allowed respondents to use its facilities for the "proper implementation" of job orders. Moreover, the Implementing Guidelines regulating attendance, overtime, deadlines, penalties; providing petitioners right to fire employees or "contractors"; requiring the carpentry division to join petitioners exercise program; and providing rules on machine maintenance, all reflect control and supervision over respondents. Petition is denied.

HANJIN ENGINEERING and CONSTRUCTION CO. LTD., NAM HYUM KIM, petitioners, vs. HONORABLE COURT OF APPEALS FACTS On October 18, 1991 and August 21, 1992, Hanjin and the Philippine Government, through the National Irrigation Administration (NIA), executed contracts for the construction of the Malinao Dam at Pilar, Bohol. From August 1995 to August 1996, Hanjin contracted the services of 712 carpenters, masons, truck drivers, helpers, laborers, heavy equipment operators, leadmen, engineers, steelmen, mechanics, electricians and others. In April 1998, 712 employees filed complaints for illegal dismissal and for payment of benefits against Hanjin and Nam Hyun Kim before the National Labor Relations Commission (NLRC). The complainants averred that they were regular employees of Hanjin and that they were separated from employment without any lawful or just cause. Petitioners alleged that the complainants were mere project employees in its Bohol Irrigation Project. On May 12, 1998, the Labor Arbiter rendered judgment in favor of the 428 complainants. Petitioners appealed the decision to the NLRC, which affirmed with modification the Labor Arbiters ruling. The NLRC dismissed the complaints of 34 complainants and awarded monetary benefits to the others. Unsatisfied, petitioners filed a Petition for Certiorari under Rule 65 of the Revised Rules of Court in the CA. On March 18, 2004, the CA dismissed the petition and affirmed the NLRCs ruling. Petitioners moved to reconsider the decision, which the CA denied.

Thus Petitioner filed for Petition for Certiorari under Rule 65 of the Revised Rules of Court. ISSUE Whether or not the petitioner, Hanjin Engineering should have filed an Appeal under Rule 45 of the Rules of Court or Petition for certiorari under Rule 65. HELD The proper recourse of the aggrieved party from a decision of the CA is a petition for review on certiorari under Rule 45 of the Revised Rules of Court. As gleaned from the records, petitioners received a copy of the assailed CA decision on March 24, 2004 and filed its motion for reconsideration on April 6, 2004. Petitioners received a copy of the Order dated October 11, 2004 denying their Motion for Reconsideration on October 20, 2004. Instead of filing a petition under Rule 45, they filed on November 23, 2004 the instant Petition for Certiorari under Rule 65. Petitioners had until November 4, 2004 within which to file a petition for review on certiorari on pure questions of law. However, as already stated, petitioners filed their petition in this Court only on November 23, 2004; indubitably, the decision of the CA had by then already become final and executory, beyond the purview of this Court to act upon. Since the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari. If the aggrieved party fails to do so within the reglementary period, and the decision accordingly becomes final and executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate inaction. The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, of the 1997 Rules of Civil Procedure. Rule 45 is clear that the decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceeding involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the appellate process over the original case. Under Rule 45, the reglementary period to appeal is fifteen (15) days from notice of judgment or denial of motion for reconsideration. For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must show that he has no plain, speedy and adequate remedy in the ordinary course of law against its perceived grievance. A remedy is considered plain, speedy and adequate if it will promptly relieve the petitioner from the injurious effects of the judgment and the acts of the lower court or agency. In this case, appeal was not only available but also a speedy and adequate remedy. Clearly, petitioners interposed the present special civil action of certiorari under Rule 65 as an alternative to their petition not because it is the speedy and adequate remedy but to

make up for the loss of their right of an ordinary appeal. It is elementary that the special civil action of certiorari is not and cannot be a substitute for an appeal, where the latter remedy is available, as it was in this case. A special civil action under Rule 65 of the Rules of Court cannot cure a partys failure to timely file a petition for review on certiorari under Rule 45 of the Revised Rules of Court. Rule 65 is an independent action that cannot be availed of as a substitute for the lost remedy of an ordinary appeal, including that under Rule 45, especially if such loss or lapse was occasioned by a partys neglect or error in the choice of remedies. There are exceptions to this rule: (a) when public welfare and the advancement of public policy dictates; (b) when the broader interest of justice so requires; (c) when the writs issued are null and void; or (d) when the questioned order amounts to an oppressive exercise of judicial authority. None of these recognized exceptions, however, is present in the case at bar. Petitioners failed to show circumstances that would justify a deviation from the general rule as to make available a petition for certiorari in lieu of taking an appeal.



Petitioner Renato S. Gatbonton is an associate professor of respondent Mapua Institute of Technology (MIT), Faculty of Civil Engineering. Some time in November 1998, a civil engineering student of respondent MIT filed a letter-complaint against petitioner for unfair/unjust grading system, sexual harassment and conduct unbecoming of an academician. Pending investigation of the complaint, respondent MIT, through its Committee on Decorum and Investigation placed petitioner under a 30-day preventive suspension effective January 11, 1999. The committee believed that petitioners continued stay during the investigation affects his performance as a faculty member, as well as the students learning; and that the suspension will allow petitioner to prepare himself for the investigation and will prevent his influences to other members of the community. Thus, petitioner filed with the NLRC a complaint for illegal suspension, damages and attorneys fees. Petitioner questioned the validity of the administrative proceedings with the Regional Trial Court of Manila in a petition for certiorari but the case was terminated on May 21, 1999 when the parties entered into a compromise agreement wherein respondent MIT agreed to publish in the school organ the rules and regulations implementing R.A. No. 7877 or the Anti-Sexual Harassment Act; disregard the previous administrative proceedings and conduct anew an investigation on the charges against petitioner. Petitioner agreed to recognize the validity of the published rules and regulations, as well as the authority of respondent to investigate, hear and decide the administrative case against him. ISSUE Whether or not the preventive suspension of petitioner was valid.

HELD The SC held that preventive suspension is a disciplinary measure for the protection of the companys property pending investigation of any alleged malfeasance or misfeasance committed by the employee. The employer may place the worker concerned under preventive suspension if his continued employment poses a serious and imminent threat to the life or property of the employer or of his co-workers. However, when it is determined that there is no sufficient basis to justify an employees preventive suspension, the latter is entitled to the payment of salaries during the time of preventive suspension. R.A. No. 7877 imposed the duty on educational or training institutions to promulgate rules and regulations in consultation with and jointly approved by the employees or students or trainees, through their duly designated representatives, prescribing the procedures for the investigation of sexual harassment cases and the administrative sanctions therefor. Petitioners preventive suspension was based on respondent MITs Rules and Regulations for the Implementation of the Anti-Sexual Harassment Act of 1995, or R.A. No. 7877. Rule II, Section 1 of the MIT Rules and Regulations provides: Section 1. Preventive Suspension of Accused in Sexual Harassment Cases. Any member of the educational community may be placed immediately under preventive suspension during the pendency of the hearing of the charges of grave sexual harassment against him if the evidence of his guilt is strong and the school head is morally convinced that the continued stay of the accused during the period of investigation constitutes a distraction to the normal operations of the institution or poses a risk or danger to the life or property of the other members of the educational community. However, the same is still not effective since it was still to be published as ruled in Taada vs. Tuvera: all statutes, including those of local application and private laws, shall be published as a condition for their effectivity, which shall begin fifteen days after publication unless a different effectivity is fixed by the legislature. Covered by this rule are presidential decrees and executive orders promulgated by the President in the exercise of legislative powers whenever the same are validly delegated by the legislature or, at present, directly conferred by the Constitution. Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation. Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the administrative agency and not the public, need not be published. Neither is publication required of the so-called letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties. The SC agreed that the publication must be in full or it is no publication at all since its purpose is to inform the public of the contents of the laws.

The Mapua Rules is one of those issuances that should be published for its effectivity, since its purpose is to enforce and implement R.A. No. 7877, which is a law of general application.[14] In fact, the Mapua Rules itself explicitly required publication of the rules for its effectivity, as provided in Section 3, Rule IV (Administrative Provisions), which states that [T]hese Rules and Regulations to implement the Anti-Sexual Harassment Act of 1995 shall take effect fifteen (15) days after publication by the Committee. Thus, at the time of the imposition of petitioners preventive suspension on January 11, 1999, the Mapua Rules were not yet legally effective, and therefore the suspension had no legal basis. Moreover, even assuming that the Mapua Rules are applicable, the Court finds that there is no sufficient basis to justify his preventive suspension. Under the Mapua Rules, an accused may be placed under preventive suspension during pendency of the hearing under any of the following circumstances: (a) if the evidence of his guilt is strong and the school head is morally convinced that the continued stay of the accused during the period of investigation constitutes a distraction to the normal operations of the institution; or (b) the accused poses a risk or danger to the life or property of the other members of the educational community. In petitioners case, there is no indication that petitioners preventive suspension may be based on the foregoing circumstances. Committee Resolution No. 1 passed by the Committee on Decorum and Investigation states the reasons for petitioners preventive suspension. Said resolution does not show that evidence of petitioners guilt is strong and that the school head is morally convinced that petitioners continued stay during the period of investigation constitutes a distraction to the normal operations of the institution; or that petitioner poses a risk or danger to the life or property of the other members of the educational community. Even under the Labor Code, petitioners preventive suspension finds no valid justification. As provided in Section 8, Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code: Sec. 8. Preventive Suspension. The employer may place the worker concerned under preventive suspension if his continued employment poses a serious threat to the life or property of the employer or of his co-workers. As previously stated, there is nothing on record which shows that respondent MIT imposed the preventive suspension on petitioner as his continued employment poses a serious threat to the life or property of the employer or of his co-workers; therefore, his preventive suspension is not justified. Consequently, the payment of wages during his 30-day preventive suspension, i.e., from January 11, 1999 to February 10, 1999, is in order. Petition is partially granted.


FACTS JPL Marketing and Promotions is a domestic corporation engaged in the business of recruitment and placement of workers. On the other hand, private respondents Noel Gonzales, Ramon Abesa III and Faustino Aninipot were employed by JPL as merchandisers on separate dates and assigned at different establishments in Naga City and Daet, Camarines Norte as attendants to the display of California Marketing Corporation , one of petitioners clients. On 13 August 1996, JPL notified private respondents that CMC would stop its direct merchandising activity in the Bicol Region, Isabela, and Cagayan Valley effective 15 August 1996. they were advised to wait for further notice as they would be transferred to other clients. However, on 17 October 1996, private respondents Abesa and Gonzales filed before the National Labor Relations Commission Regional Arbitration Branch (NLRC) Sub V complaints for illegal dismissal, praying for separation pay, 13th month pay, service incentive leave pay and payment for moral damages. Aninipot filed a similar case thereafter. Executive Labor Arbiter Gelacio L. Rivera, Jr. dismissed the complaints for lack of merit. The Labor Arbiter found that Gonzales and Abesa applied with and were employed by the store where they were originally assigned by JPL even before the lapse of the six (6)-month period given by law to JPL to provide private respondents a new assignment. Thus, they may be considered to have unilaterally severed their relation with JPL, and cannot charge JPL with illegal dismissal. The Labor Arbiter held that it was incumbent upon private respondents to wait until they were reassigned by JPL, and if after six months they were not reassigned, they can file an action for separation pay but not for illegal dismissal. The claims for 13th month pay and service incentive leave pay was also denied since private respondents were paid way above the applicable minimum wage during their employment. NLRC. agreed with the Labor Arbiters finding that when private respondents filed their complaints, the six-month period had not yet expired, and that CMCs decision to stop its operations in the areas was beyond the control of JPL, thus, they were not illegally dismissed. However, it found that despite JPLs effort to look for clients to which private respondents may be reassigned it was unable to do so, and hence they are entitled to separation pay. The Court of Appeals dismissed the petition and affirmed in toto the NLRC resolution. While conceding that there was no illegal dismissal, it justified the award of separation pay on the grounds of equity and social justice. Issue Whether or not the respondents are entitled to separation pay? Held Under Arts. 283 and 284 of the Labor Code, separation pay is authorized only in cases of dismissals due to any of these reasons: (a) installation of labor saving devices; (b) redundancy; (c) retrenchment; (d) cessation of the employer's business; and (e) when the employee is suffering from a disease and his continued employment is prohibited by law or is prejudicial to his health and to the health of his co-employees. However, separation pay shall be allowed as a measure of social justice in those cases where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character, but only when he was illegally dismissed.

In addition, Sec. 4(b), Rule I, Book VI of the Implementing Rules to Implement the Labor Code provides for the payment of separation pay to an employee entitled to reinstatement but the establishment where he is to be reinstated has closed or has ceased operations or his present position no longer exists at the time of reinstatement for reasons not attributable to the employer. The common denominator of the instances where payment of separation pay is warranted is that the employee was dismissed by the employer. In the instant case, there was no dismissal to speak of. Private respondents were simply not dismissed at all, whether legally or illegally. What they received from JPL was not a notice of termination of employment, but a memo informing them of the termination of CMCs contract with JPL. More importantly, they were advised that they were to be reassigned. At that time, there was no severance of employment to speak of. Furthermore, Art. 286 of the Labor Code allows the bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, wherein an employee/employees are placed on the so-called floating status. When that floating status of an employee lasts for more than six months, he may be considered to have been illegally dismissed from the service. Thus, he is entitled to the corresponding benefits for his separation, and this would apply to suspension either of the entire business or of a specific component thereof. As clearly borne out by the records of this case, private respondents sought employment from other establishments even before the expiration of the six (6)-month period provided by law. As they admitted in their comment, all three of them applied for and were employed by another establishment after they received the notice from JPL. JPL did not terminate their employment; they themselves severed their relations with JPL. Thus, they are not entitled to separation pay. Nonetheless, JPL cannot escape the payment of 13th month pay and service incentive leave pay to private respondents. Said benefits are mandated by law and should be given to employees as a matter of right. [G.R. No. 166111 August 25, 2005] STANDARD ELECTRIC MANUFACTURING CORPORATION, Petitioner -versusSTANDARD ELECTRIC EMPLOYEES UNION-NAFLU- KMU and ROGELIO JAVIER, Respondents. FACTS Rogelio Javier was employed by the Standard Electric Manufacturing Corporation (SEMC) on January 15, 1973 as radial spot machine operator in its Production Department. On July 31, 1995, Javier failed to report for work. He failed to notify the SEMC of the reason for his absences. On August 9, 1995, he was arrested and detained for the charge of rape upon complaint of his neighbor, Genalyn Barotilla. After the requisite preliminary investigation, an Information for rape was filed in the Regional Trial Court (RTC) of Pasig. On January 13, 1996, the SEMC received a letter from Javier, through counsel, informing the SEMC that Javier was detained for the charge of rape and for that reason failed to report for work. He requested the SEMC to defer the implementation of its intention to dismiss him. The SEMC denied Javiers request and issued a Memorandum terminating his employment for having been absent without leave (AWOL) for more than fifteen days from July 31, 1995; and (b) for committing rape.

On May 17, 1996, the RTC issued an Order granting Javiers demurrer to evidence and ordered his release from jail. Shortly thereafter, Javier reported for work, but the SEMC refused to accept him back. A grievance meeting between the Union, Javier and the SEMC was held, but SEMC refused to re-admit Javier. On August 2, 1996, the Union and Javier filed a Complaint for illegal dismissal against the SEMC before the NLRC. He averred that since the reason for his detention for rape was non-existent, the termination of his employment was illegal. For its part, the SEMC averred that Javiers prolonged absences caused irreparable damages to its orderly operation; he had to be replaced so that the continuity and flow of production would not be jeopardized. It could not afford to wait for Javiers indefinite return from detention, if at all. The SEMC insisted that conformably with its Rules and Regulations, it was justified in dismissing Javier for being absent without leave for fifteen days or so. ISSUE Whether or not Javier was illegally dismissed. HELD The SC held that respondent Javiers absence from August 9, 1995 cannot be deemed as an abandonment of his work. Abandonment is a matter of intention and cannot lightly be inferred or legally presumed from certain equivocal acts. To constitute as such, 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, with the second element being the more determinative factor. Abandonment as a just ground for dismissal requires clear, willful, deliberate, and unjustified refusal of the employee to resume his employment. Mere absence or failure to report for work, even after notice to return, is not tantamount to abandonment. Moreover, respondent Javiers acquittal for rape makes it more compelling to view the illegality of his dismissal. The trial court dismissed the case for insufficiency of evidence, and such ruling is tantamount to an acquittal of the crime charged, and proof that respondent Javiers arrest and detention were without factual and legal basis in the first place. The petitioner acted with precipitate haste in terminating respondent Javiers employment on January 30, 1996, on the ground that he had raped the complainant therein. Respondent Javier had yet to be tried for the said charge. In fine, the petitioner prejudged him, and preempted the ruling of the RTC. The petitioner had, in effect, adjudged respondent Javier guilty without due process of law. While it may be true that after the preliminary investigation of the complaint, probable cause for rape was found and respondent Javier had to be detained, these cannot be made as legal bases for the immediate termination of his employment. Moreover, the petitioner did not accord respondent Javier an opportunity to explain his absences from July 31, 1995. The petitioners reliance on the alleged Letter dated August 17, 1995 is misplaced. There is no evidence on record that respondent Javier received such letter, and its sudden presence is highly suspect. The Court agrees with respondent Javiers

observation that the letter was not mentioned nor annexed in the petitioners Position Paper, Rejoinder and even in its Opposition to the Appeal. The letter surfaced only on a much later date, in 1999, when it was formally offered in evidence[26] and referred to in the petitioners Memorandum before the Labor Arbiter a clear inference that the said letter was but an afterthought to justify petitioners termination of respondent Javiers employment. Further, we cannot subscribe to the petitioners contention that the due process requirement relative to the dismissal of respondent Javier was duly complied with when he was allowed to explain his side during the grievance machinery conferences. Indeed, in the case at bar, the petitioner did not conduct any investigation whatsoever prior to his termination, despite being informed of respondent Javiers predicament by the latters siblings, his Union and his counsel. The meetings held pursuant to the grievance machinery provisions of the collective bargaining agreement were only done after his dismissal had already taken effect on February 5, 1996. Clearly, well-meaning these conferences might be, they can not cure an otherwise unlawful termination. It bears stressing that for a dismissal to be validly effected, the twin requirements of due process notice and hearing must be observed. In dismissing an employee, an employer has the burden of proving that the former worker has been served two notices: (1) one to apprise him of the particular acts or omissions for which his dismissal is sought; and (2) the other to inform him of his employers decision to dismiss him. As to the requirement of a hearing, the essence of due process lies in an opportunity to be heard, and not always and indispensably in an actual hearing. Petition is dismissed.


Respondent Galaxie Steel is a corporation engaged in the business of manufacturing and sale of re-bars and steel billets which are used primarily in the construction of high-rise buildings. On account of serious business losses which occurred in 1997 up to mid-1999 totaling around P127,000,000.00, Galaxie decided to close down its business operations. Galaxie thus filed on July 30, 1999 a written notice with DOLE informing the latter of its intended closure and the consequent termination of its employees effective August 31, 1999. And it posted the notice of closure on the corporate bulletin board. On September 8, 1999, petitioners Galaxie Steel Workers Union and Galaxie employees filed a complaint for illegal dismissal, unfair labor practice, and money claims against Galaxie. Petitioners contend that Galaxies closure of business operations was motivated not by serious business losses but by their anti-union stance; and that Galaxie did not serve written notices of the closure of business operations upon its employees, it having merely posted a notice on the company bulletin board. ISSUE Whether or not the closure of respondent company valid. HELD The SC held that the closure of the respondent company because the reason of the closure is valid, being that, it is due to serious business reverses. The NLRCs finding on the legality of the closure should be upheld for it is supported by substantial evidence consisting of the audited financial statements showing that Galaxie continuously incurred losses from 1997 up to mid1999, to wit: P65,753,480.65 in 1997, P48,429,785.89 in 1998, and P13,204,389.97 in 1999; and of the various demand notices of payments from creditor banks. Besides, the petitioners had not presented evidence to the contrary; nor did they establish that the closure was motivated by Galaxies anti-union stance. True, the union was seeking the holding of a certification election at the time that Galaxie closed its business operation, but that, without more, was not sufficient to attribute anti-unionism against Galaxie. However, the mere posting by the company of the notice in its bulletin board does not meet the requirement of service of notice under Article 283 of the labor Code. The purpose of the written notice is to inform the employees of the specific date of termination or closure of business operations, and must be served upon them at least one month before the date of effectivity to give them sufficient time to make the necessary arrangements. In order to meet the foregoing purpose, service of the written notice must be made individually upon each and every employee of the company. Nevertheless, the validity of termination of services can exist independently of the procedural infirmity in the dismissal. Where the dismissal is for an authorized cause, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee, in the form of nominal damages, for the violation of his right to statutory due process.

Decision of the CA is affirmed with modifications.