1).

ACUNA vs CA
FACTS: Petitioners are Filipino overseas workers deployed by private respondent JIC, a
licensed recruitment agency. Sometime in September 1999, petitioners iled wit! private
respondents applications or employment abroad. "ter t!eir papers were processed,
petitioners claimed t!ey signed a uniormly#worded employment contract wit! private
respondents w!ic! stipulated t!at t!ey were to work as mac!ine operators wit! a
mont!ly salary o $%&1',()*.**, e+clusive o overtime, or a period o two years. ,pon
arriving at t!e -ob site, t!ey were made to sign anot!er contract w!ic! stated t!at t!eir
salary was only $%&11,()*.**. %!ey were likewise inormed t!at t!e dormitory w!ic!
would serve as t!eir living .uarters was still under construction. %!ey were re.uested to
temporarily bear wit! t!e inconvenience but were assured t!at t!eir dormitory would be
completed in a s!ort time.
%!e petitioners averred t!at on /ecember 10, 1999, due to unbearable working
conditions, t!ey were constrained to inorm management t!at t!ey were leaving. 1eore
t!ey let, t!ey were made to sign a written waiver. In addition, petitioners were not paid
any salary or work rendered on /ecember 11#1', 1999. Immediately upon arrival in t!e
P!ilippines, petitioners went to private respondents2 oice, narrated w!at !appened, and
demanded t!e return o t!eir placement ees and plane are. Private respondents reused.
Petitioners invoking 3epublic "ct $o. (*)4, iled a complaint beore t!e $53C. %!e 5abor
"rbiter and t!e $53C ruled t!at t!ere was constructive dismissal. 6owever t!e C" ruled
ot!erwise.
1. Whether or not there was constructive dismissal.
"s we !ave !eld previously, constructive dismissal covers t!e involuntary resignation
resorted to w!en continued employment becomes impossible, unreasonable or unlikely7
w!en t!ere is a demotion in rank or a diminution in pay7 or w!en a clear discrimination,
insensibility or disdain by an employer becomes unbearable to an employee.
In t!is case, t!e appellate court ound t!at petitioners did not deny t!at t!e
accommodations were not as !omely as e+pected. In t!e petitioners2 memorandum, t!ey
admitted t!at t!ey were told by t!e principal, upon t!eir arrival, t!at t!e dormitory was
still under construction and were re.uested to bear wit! t!e temporary inconvenience and
t!e dormitory would soon be inis!ed. 8e likewise note t!at petitioners did not reute
private respondents2 assertion t!at t!ey !ad deployed appro+imately si+ty ot!er workers
to t!eir principal, and to t!e best o t!eir knowledge, no ot!er worker assigned to t!e
same principal !as resigned, muc! less, iled a case or illegal dismissal.
%o our mind t!ese cited circumstances do not relect malice by private respondents
nor do t!ey s!ow t!e principal2s intention to sub-ect petitioners to un!ealt!y
accommodations. ,nder t!ese acts, we cannot rule t!at t!ere was constructive dismissal.
2. Whether or not petitioners are entitled to overtime pay despite the fact
that the offered no proof that they actually rendered overtime work
since the records were all in the custody of the principal employer.
9n t!is matter, we rule or t!e petitioners. %!e claim or overtime pay s!ould not !ave
been disallowed because o t!e ailure o t!e petitioners to substantiate t!em. %!e claim
o overseas workers against oreign employers could not be sub-ected to same rules o
evidence and procedure easily obtained by complainants w!ose employers are locally
based. 8!ile normally we would re.uire t!e presentation o payrolls, daily time records
and similar documents beore allowing claims or overtime pay, in t!is case, t!at would be
re.uiring t!e near#impossible.
%o our mind, it is private respondents w!o could !ave obtained t!e records o t!eir
principal to reute petitioners2 claim or overtime pay. 1y t!eir ailure to do so, private
respondents waived t!eir deense and in eect admitted t!e allegations o t!e petitioners.
It is a time#!onored rule t!at in controversies between a worker and !is employer,
doubts reasonably arising rom t!e evidence or in t!e interpretation o agreements and
writing s!ould be resolved in t!e worker2s avor. %!e policy is to e+tend t!e applicability o
t!e decree to a greater number o employees w!o can avail o t!e beneits under t!e law,
w!ic! is in consonance wit! t!e avowed policy o t!e State to give ma+imum aid and
protection to labor. "ccordingly, we rule t!at private respondents are solidarily liable wit!
t!e oreign principal or t!e overtime pay claims o petitioners.
3. Whether or not the quitclaim made by the employees before they left is
valid and enforceable against them.
:uitclaims e+ecuted by t!e employees are commonly rowned upon as contrary to public
policy and ineective to bar claims or t!e ull measure o t!e workers2 legal rig!ts,
considering t!e economic disadvantage o t!e employee and t!e inevitable pressure upon
!im by inancial necessity. $onet!eless, t!e so#called ;economic diiculties and inancial
crises; allegedly conronting t!e employee is not an acceptable ground to annul t!e
compromise agreement unless it is accompanied by a gross disparity between t!e actual
claim and t!e amount o t!e settlement.
" perusal o t!e records reveals t!at petitioners were not in any way deceived,
coerced or intimidated into signing a .uitclaim waiver in t!e amounts o P1<,0)*, P1',*(*
and P10,4** respectively. $or was t!ere a disparity between t!e amount o t!e .uitclaim
and t!e amount actually due t!e petitioners.
2) G & M PHILIPPINES, INC. v. CUAMBOT
FACTS: Cuambot was deployed to Saudi "rabia by = > ? P!ilippines, a duly licensed
placement and recruitment agency. 6e worked as a car builder at "l 8a!a 8orks!op
under a 4#year employment contract. 6owever, !e did not inis! t!is contract and
returned to t!e P!ilippines si+ mont!s later. 6e alleged t!at !e was made to work 1'#
!ours@day and t!at !e was never paid !is mont!ly basic salary including !is overtime pay.
Cuambot demanded or !is salary, but !e was told by t!e president o "l 8a!a t!at !e
would be sent !ome t!e ne+t time !e demanded or !is salary. /ue to !is amily2s
inancial need, Cuambot did w!at !e was told not to do and as result, !e was asked to
pack up and leave.
Cuambot iled beore t!e $53C a complaint or unpaid wages and illegal
dismissal. = > ? deended by insisting t!at Cuambot was religiously paid !is salaries on
time, t!at ater A mont!s, !e pleaded to !is employer to be allowed to return !ome and
t!at !e even submitted a resignation letter. "s evidence t!ereo, = > ? submitted pay
slips and t!e alleged resignation letter. Cuambot responded by alleging orgery. %!e 5abor
"rbiter ruled in avor o Cuambot relying on t!e close semblance o t!e !andwriting in t!e
pay slips and t!at o t!e resignation letter. %!e 5" concluded t!at t!ey were written by
one and t!e same person. ,pon appeal, t!e $53C remanded t!e case to t!e 5" or
reerral to t!e government agency concerned or calligrap!y e+amination. 6owever,
wit!out acting upon said recommendation, t!e second 5" ruled against Cuambot !olding
t!at t!e latter ailed to substantiate !is claims and at t!e same time giving more weig!t
to t!e documentary evidences submitted by = > ? over Cuambot2s oral allegations. %!e
Court o "ppeals reversed t!e ruling and arrived at t!e same conclusion wit! t!e irst 5".
6ence, = > ? petitioned t!e SC.
ISSUE: 8!et!er or not t!e pay slips and t!e resignation letter were orged.
HELD: " cursory perusal o t!e resignation letter and t!e !andwritten pay slips will
readily s!ow t!at t!ey were written by only one person. " mere layman will immediately
notice t!at t!e strokes and letters in t!e documents are very similar, i not, identical to
one anot!er. It is also unbelievable t!at ater t!e !aving waited or so long to be deployed
to Saudi "rabia, Cuambot would -ust suddenly decide to abandon !is work and go !ome
due to amily problems. Indeed, t!e rule is t!at all doubts in t!e implementation and t!e
interpretation o t!e 5abor Code s!all be resolved in avor o labor. It is a well#settled
doctrine, t!at i doubts e+ist between t!e evidence presented by t!e employer and t!e
employee, t!e scales o -ustice must be tilted in avor o t!e latter. It is a time#!onored
rule t!at in controversies between a laborer and !is master, doubts reasonably arising
rom t!e evidence, or in t!e interpretation o agreements and writing s!ould be resolved
in t!e ormer2s avor. %!e policy is to e+tend t!e doctrine to a greater number o
employees w!o can avail o t!e beneits under t!e law, w!ic! is in consonance wit! t!e
avowed policy o t!e State to give ma+imum aid and protection o labor.
?oreover, one w!o pleads payment !as t!e burden o proving it. %!e reason or
t!e rule is t!at t!e pertinent personnel iles, payrolls, records, remittances and ot!er
similar documents B w!ic! will s!ow t!at overtime, dierentials, service incentive leave,
and ot!er claims o workers !ave been paid B are not in t!e possession o t!e worker but
in t!e custody and absolute control o t!e employer. %!us, t!e burden o s!owing wit!
legal certainty t!at t!e obligation !as been disc!arged wit! payment alls on t!e debtor,
in accordance wit! t!e rule t!at one w!o pleads payment !as t!e burden o proving it.
9nly w!en t!e debtor introduces evidence t!at t!e obligation !as been e+tinguis!ed does
t!e burden s!it to t!e creditor, w!o is t!en under a duty o producing evidence to s!ow
w!y payment does not e+tinguis! t!e obligation. In t!is case, = > ? was unable to
present ample evidence to prove its claim t!at respondent !ad received all !is salaries
and beneits in ull.
<C. CONTINENTAL STEEL vs. MONTAO
FACTSD In January 4**0, t!e wie o 3olando 6ortillano !ad a miscarriage w!ic!
caused t!e deat! o t!eir unborn c!ild. 6ortillano, in accordance wit! t!e C1"
iled deat! beneits claim rom !is employer, t!e Continental Steel ?anuacturing
Corporation w!ic! subse.uently denied t!e claim. %!e issue was submitted or
arbitration. %!e arbitrator, "tty. "llan ?ontaEo, ruled t!at 6ortillano is entitled to
!is claims. %!e Court o "ppeals airmed t!e decision o ?ontaEo.
9n appeal, Continental Steel insisted t!at 6ortillano is not entitled
because under t!e C1", deat! beneits are awarded i an employee2s legitimate
dependent !as died7 but t!at in t!is case, no ;deat!; !as occurred because t!e
etus died inside t!e womb o t!e mot!er, t!at a etus !as no -uridical personality
because it was never born pursuant to "rticle )* o t!e Civil Code w!ic! provides
a conceived c!ild ac.uires personality only w!en it is born7 t!at t!e etus was not
born !ence it is not a legitimate dependent as contemplated by t!e C1" nor did it
suer deat! as contemplated under civil laws.
ISSUE: Can 6ortillano claim bereavement leave wit! pay and ot!er deat!
beneits based on t!e deat! o !is unborn c!ildF
HELDD Ges. %!e unborn c!ild can be considered a dependent under t!e C1". "s
Continental Steel itsel deines, a dependent is ;one w!o relies on anot!er or
support7 one not able to e+ist or sustain onesel wit!out t!e power or aid o
someone else.; 6ortillanoHs c!ild could not !ave reac!ed <(#<9 weeks o its
gestational lie wit!out depending upon its mot!er, 6ortillanoHs wie, or
sustenance. "dditionally, it is e+plicit in t!e C1" provisions in .uestion t!at t!e
dependent may be t!e parent, spouse, or c!ild o a married employee7 or t!e
parent, brot!er, or sister o a single employee. %!e C1" did not provide a
.ualiication or t!e c!ild dependent, suc! t!at t!e c!ild must !ave been born or
must !ave ac.uired civil personality, as Continental Steel avers. 8it!out suc!
.ualiication, t!en c!ild s!all be understood in its more general sense, w!ic!
includes t!e unborn etus in t!e mot!er2s womb.
%!e act o marriage between 6ortillano and !is wie was never put in
.uestion, !ence t!ey are presumed to be married. C!ildren conceived or born
during t!e marriage o t!e parents are legitimate. 6ence, t!e unborn c!ild IetusC
is already a legitimate dependent t!e moment it was conceived.
%!ere is no need to discuss w!et!er or not t!e unborn c!ild ac.uired
-uridical personality B t!at is not t!e issue !ere. 1ut nevert!eless, lie s!ould not
be e.uated to civil personality. ?oreover, w!ile t!e Civil Code e+pressly provides
t!at civil personality may be e+tinguis!ed by deat!, it does not e+plicitly state
t!at only t!ose w!o !ave ac.uired -uridical personality could die. In t!is case,
6ortillanoHs etus !ad !ad lie inside t!e womb as evidenced by t!e act t!at it
clung to lie or <( weeks beore t!e unortunate miscarriage. %!us, deat!
occurred on a dependent !ence 6ortillano as an employee is entitled to deat!
beneit claims as provided or in t!eir C1".
)C. MANOLO A. PEAFLOR vs. OUTDOOR CLOTHING MANUFACTURING
CORPORATION
FACTS: PeEalor was !ired on September 4, 1999 as probationary 63/ ?anager o
respondent 9utdoor Clot!ing ?anuacturing Corporation. PeEalor claimed t!at !is
relations!ip wit! 9utdoor Clot!ing went well during t!e irst ew mont!s o !is
employment. 6is woes began w!en t!e company2s Jice President or 9perations, Kdgar
5ee, let t!e company ater a big ig!t between 5ee and C!ie Corporate 9icer $at!aniel
Syu. 1ecause o !is close association wit! 5ee, PeEalor claimed t!at !e was among
t!ose w!o bore Syu2s ire. "ter PeEalor returned rom !is ield work on ?arc! 1<, 4***,
!is oicemates inormed !im t!at w!ile !e was away, Syu !ad appointed $at!aniel
1uenaobra as t!e new 63/ ?anager. 6e tried to talk to Syu to clariy t!e matter, but was
unable to do so. PeEalor claimed t!at under t!ese circumstances, !e !ad no option but to
resign. 6e submitted a letter to Syu declaring !is irrevocable resignation rom !is
employment wit! 9utdoor Clot!ing eective at t!e close o oice !ours on ?arc! 1',
4***. PeEalor t!en iled a complaint or illegal dismissal wit! t!e labor arbiter, claiming
t!at !e !ad been constructively dismissed. 9utdoor Clot!ing denied PeEalor2s allegation
o constructive dismissal. It posited instead t!at PeEalor !ad voluntarily resigned rom
!is work. %!e labor arbiter agreed wit! Penalor and issued a decision in !is avor. 9n
appeal, t!e $53C reversed t!e arbiter2s decision and t!e C" airmed t!e $53C2s decision.
6ence, petitioner iled a petition or review beore t!e SC.
ISSUE: Can PeEalor2s resignation be considered as constructive dismissal e.uivalent to
an illegal dismissalF
RULING: Ges. PeEalor started working or t!e company on September 4, 1999 so t!at
by ?arc! 1, 4***, !is probationary period would !ave ended and !e would !ave become
a regular employee. 8e ind it !ig!ly unlikely t!at !e would resign on ?arc! 1 and would
simply leave given !is undisputed record o !aving successully worked wit!in !is
probationary period. It does not appear sound and logical to us t!at an employee would
tender !is resignation on t!e very same day !e was entitled by law to be considered a
regular employee, especially w!en a downsiLing was taking place and !e could !ave
availed o its beneits i !e would be separated rom t!e service as a regular employee. It
was strange, too, t!at !e would submit !is resignation on ?arc! 1 and keep .uiet about
t!is until its eective date on ?arc! 1'. In our view, it is more consistent wit! !uman
e+perience t!at PeEalor indeed learned o t!e appointment o 1uenaobra only on ?arc!
1<, 4*** and reacted to t!is by tendering !is resignation letter ater realiLing t!at !e
would only ace !ostility and rustration in !is working environment. %!ree very basic
labor law principles support t!is conclusion and militate against t!e company2s case.
%!e irst is t!e settled rule t!at in employee termination disputes, t!e employer
bears t!e burden o proving t!at t!e employee2s dismissal was or -ust and valid cause.
%!at PeEalor did indeed ile a letter o resignation does not !elp t!e company2s case as,
ot!er t!an t!e act o resignation, t!e company must still prove t!at t!e employee
voluntarily resigned. %!ere can be no valid resignation w!ere t!e act was made under
compulsion or under circumstances appro+imating compulsion, suc! as w!en an
employee2s act o !anding in !is resignation was a reaction to circumstances leaving !im
no alternative but to resign. In sum, t!e evidence does not support t!e e+istence o
voluntariness in PeEalor2s resignation.
"not!er basic principle is t!at e+pressed in "rticle ) o t!e 5abor CodeMt!at all
doubts in t!e interpretation and implementation o t!e 5abor Code s!ould be interpreted
in avor o t!e workingman. %!us, we ind t!at PeEalor was constructively dismissed
given t!e !ostile and discriminatory working environment !e ound !imsel in, particularly
evidenced by t!e escalating acts o unairness against !im t!at culminated in t!e
appointment o anot!er 63/ manager wit!out any prior notice to !im. 8!ere no less
t!an t!e company2s c!ie corporate oicer was against !im, PeEalor !ad no alternative
but to resign rom !is employment.
5ast but not t!e least, we !ave repeatedly given signiicance in abandonment
and constructive dismissal cases to t!e employee2s reaction to t!e termination o !is
employment. 8e ind rom t!e records t!at PeEalor soug!t almost immediate oicial
recourse to contest !is separation rom service t!roug! a complaint or illegal dismissal.
%!is is not t!e act o one w!o voluntarily resigned7 !is immediate complaints c!aracteriLe
!im as one w!o deeply elt t!at !e !ad been wronged.
5. DANSART SECURITY FORCE & ALLIED SERICES COMPANY !"# DANILO A.
SARTE vs.
$EAN O. BAGOY
F!%&s: 3espondent Jean 9. 1agoy was employed by /ansart Security Force and "llied
Services Company to guard t!e establis!ments o its various clients. 6owever, rom "pril
1999 until $ovember 4**1, respondent !ad allegedly been caug!t sleeping on t!e -ob
and incurred absences wit!out leave, or w!ic! !e was given notices o disciplinary action.
3espondent iled wit! t!e 3egional "rbitration 1ranc! a Complaint against petitioners or
underpayment o salaries and non#payment o overtime pay, !oliday pay, premium pay,
1<t! mont! pay and service incentive leave pay. Petitioners countered t!at it was
respondent w!o abandoned !er work beginning $ovember 4**1. Petitioners, likewise,
presented several reports issued by t!e $ational Capital 3egion, /epartment o 5abor and
Kmployment I/95KC stating t!at all mandatory wage increases and ot!er related
monetary beneits were complied wit! by petitioner security agency, in rebuttal o
respondent2s claim o non#payment o wages and beneits.
%!e 5abor "rbiter issued a /ecision avorable to respondent wit! regard to !er
money claims, but did not rule on t!e issue o illegal dismissal as t!is was not included in
!er complaint. %!e oregoing /ecision was appealed to t!e $53C w!ic! !eld t!at t!e
/95K reports, stating t!at petitioner security agency !ad been complying wit! all
mandatory wage increases and ot!er monetary beneits s!ould be given proper respect.
3espondent iled a petition or certiorari wit! t!e Court o "ppeals under 3ule 0', w!ic!
!eld t!at t!e resolution o t!e $53C s!ould be set aside and t!e 5abor "rbiter2s /ecision
reinstated.
Iss'(: 8!et!er t!e /95K Certiications s!ould be considered as suicient proo t!at
petitioners paid respondent proper wages and all ot!er monetary beneits to w!ic! s!e
was entitled as an employee.
H()#: $o. %!e 5abor "rbiter, as sustained by t!e C", ruled t!at t!e /95K reports stating
t!at petitioners !ave not violated any provision o t!e 5abor Code , nor is t!ere any
pending case wit! said government agency iled against t!e respondent, and t!e 9rder o
t!e /95K 3egional /irector dated January 1A, 4**1 stating t!at petitioner security
agency !as complied wit! t!e payment o backwages or 4A9 guards, are insuicient to
prove t!at petitioners !ave indeed paid respondent w!atever is due !er. 9n t!e ot!er
!and, t!e $53C considered t!e very same pieces o evidence as substantial proo o
payment.
%!e Court !as repeatedly ruled t!at any doubt arising rom t!e evaluation o
evidence as between t!e employer and t!e employee must be resolved in avor o t!e
latter. ?oreover, it is settled -urisprudence t!at t!e burden o proving payment o
monetary claims rests on t!e employer. %!us, as reiterated in G & M Philippines, Inc. v.
Cuambot, 507 SCRA 552 200!", to witD + + + None w!o pleads payment !as t!e burden
o proving it. %!e reason or t!e rule is t!at t!e pertinent personnel iles, payrolls,
records, remittances and ot!er similar documentsMw!ic! will s!ow t!at overtime,
dierentials, service incentive leave, and ot!er claims o workers !ave been paidMare not
in t!e possession o t!e worker but in t!e custody and absolute control o t!e employer.
%!us, t!e burden o s!owing wit! legal certainty t!at t!e obligation !as been disc!arged
wit! payment alls on t!e debtor, in accordance wit! t!e rule t!at one w!o pleads
payment !as t!e burden o proving it.O
I" &*+s %!s(, ,(&+&+-"(.s /!+)(# &- #+s%*!.0( s'%* 1'.#(" -/ ,.--/. %!e
Certiications rom t!e /95K stated t!at t!ere are no pending labor cases against
petitioners iled beore said oice, but said certiications Ndo not cover cases iled beore
t!e $ational 5abor 3elations Commission and t!e $ational Conciliation and ?ediation
1oard.O It was entirely wit!in petitioners2 power to present suc! employment records t!at
s!ould necessarily be in t!eir possession7 !ence, ailure to present suc! evidence must be
taken against t!em.
2. U3 v. C("&.- C(.!4+5!
F!%&s: %!is is a case o illegal dismissal iled by petitioner ,y against respondent
company, its pres. Sy and JP =arcia.
"ccording to petitioner, ater !e was inormed t!at !e was to assume a new
position o w!ic! !e responded !e will t!ink it over, !e was summoned by Sy and =arcia
or a closed#door meeting. 9n said meeting !e was inormed by Sy o t!e termination o
!is services due to NinsubordinationO and advised !im to turn over !is samples and iles
immediately. Petitioner t!en turned over company samples, accounts and receivables and
t!ereater did not report or work anymore. 9n a later date, petitioner received a written
notice o c!arges, irst or !is alleged ailure to meet !is sales .uota and anot!er memo
sent on anot!er date, c!arging !im o absence wit!out leave.
9n t!e ot!er !and, respondents denied dismissing petitioner and countered t!at
ater being inormed o !is poor sales perormance, petitioner in.uired !ow muc! !e will
get i !e resigns. "ter !earing an unavourable response rom Sy, petitioner got mad and
said t!at i t!at would be t!e case, t!e company president s!ould -ust terminate !im.
3espondents urt!er maintained t!at petitioner voluntarily leaving !is workplace, reusal
to report or work and turning over !is accountabilities, indicate !is resignation.
%!e labor arbiter dismissed petitioner2s complaint on t!e basis t!at it was
petitioner w!o opted not to report or work ater oering to resign because !e could not
accept !is possible transer.
%!e $53C reversed t!e labor arbiter2s ruling but t!e C" supported t!e labor
arbiter2s inding t!us airming t!e decision o t!e latter.
Iss'(: #hethe$ petitione$ %as &ismisse& b' the $espon&ents o$ volunta$il' seve$e& his
emplo'ment b' aban&onin( his )ob.
R')+"0: =iven t!e strained working relations!ip wit! =arcia, or at least a perception o
suc! gap on t!e part o petitioner, t!e latter could not !ave been properly inormed o t!e
actual ground or !is dismissal. 1ut more importantly, respondents terminated petitioner
irst and only belatedly sent !im written notices o t!e c!arge against !im. Fairness
re.uires t!at dismissal, being t!e ultimate penalty t!at can be meted out to an employee,
must !ave a clear basis. "ny ambiguity in t!e ground or t!e termination o an employee
s!ould be interpreted against t!e employer, w!o ordained suc! ground in t!e irst place.
In t!is case, t!e evidence on record suggests t!at petitioner did not resign7 !e
was orally dismissed by Sy. It is t!is lack o clear, valid and legal cause, not to mention
due process t!at made !is dismissal illegal. 8!en t!ere is no s!owing o a clear, valid and
legal cause or t!e termination o employment, t!e law considers it a case o illegal
dismissal. Furt!ermore, "rticle ) o t!e 5abor Code e+presses t!e basic principle t!at all
doubts in t!e interpretation and implementation o t!e 5abor Code s!ould be interpreted
in avor o t!e workingman. %!is principle !as been e+tended by -urisprudence to cover
doubts in t!e evidence presented by t!e employer and t!e employee. %!us we !ave !eld
t!at i t!e evidence presented by t!e employer and t!e employee are in e.uipoise, t!e
scales o -ustice must be tilted in avor o t!e latter. "ccordingly, t!e $53C2s inding o
illegal dismissal must be up!eld.
A. CEBU METAL CORPORATION vs. GREGORIO ROBERT SALILING, ELIAS BOLIDO,
MANUEL AL6UI7A, !"# BEN$IE AMPARADO
FACTSD C?C is engaged in t!e buying and selling o scrap iron. Complainants =, K, ? and
1 claimed t!ey were !ired by deendant C?C, and t!at rom t!e time t!ey were
employed, received salaries ranging rom P'#P(.A' per !our. %!ey never received any
ot!er beneits rom C?C, including 1<
t!
mont! pay, !oliday pay, incentive leave pay,
bonuses and ot!er labor beneits even i t!ey were re.uired to work eig!t !ours a day,
seven days a week, <* days a mont!. %!us, t!e complainants demanded an increase in
t!eir salary, but instead respondent told t!em to stop working. In /ecember 1990,
complainants were prevented rom entering C?C2s loading and unloading compound.
Complainants t!en iled a Complaint beore t!e 3egional "rbitration 1ranc!, 1acolod City
or underpayment o wages, non#payment o 1<
t!
mont! pay, !oliday pay and service
incentive leave pay, as well as a Complaint or illegal dismissal.
C?C !owever claims t!at it only !as t!ree regular employees in its 1acolod
branc!, w!ile t!e rest are undertaking pakiao work in t!e unloading o scrap iron or
stockpiling. "s compensation, t!ese pakiao workers are paid at P1'@ton or w!ic! eac!
person can unload at least 4#< tons per !our, totalling P4)*#<0* in ( !ours i work is only
available w!ic! payment necessarily includes C95" and 1<
t!
mont! pay. It urt!er
e+plains t!at t!ey do not !ave a steady supply o scrap metal, and so t!ere may be
weeks w!ere t!ey receive truckloads o metal, and weeks w!ere t!ere is no supply at all.
It is or t!is reason t!at t!e unloaders !ired by C?C are considered seasonal workers, as
t!ey are !ired only w!enever metal is delivered to t!e stockyard.
%!e 5abor "rbiter rendered a decision ordering C?C to reinstate complainants
wit! backwages o 1 year, and 1<
t!
mont! pay, K3" and C95", or in case reinstatement is
no longer easible, a separation pay e.uivalent to 1' days or every year o service. %!e
$53C !owever reversed t!e decision and ruled t!at complainants were not regular
employees, and t!us could not !ave been illegally dismissed.
ISSUE: 8ON &*( %-4,)!+"!"&s 9(.( %-"s+#(.(# .(0')!.)3 (4,)-3((s, &*'s
("&+&)(# &- .(+"s&!&(4("&:1!%;9!0(s, (&%.
RULING: $o, complainants are not regular employees. %!eir services are only needed
w!en scrap metals are delivered to t!e stockyard, once or twice a week, but sometimes
not at all. %!e irregular nature o work, depending on t!e supply o scrap metal !as not
been denied by complainants. 1ecause o t!is irregularity, it would be un-ust to re.uire
C?C to maintain complainants in t!e payroll even i t!ere is no more work to be done. %o
do so would make complainants privileged retainers w!o collect payment rom t!eir
employer or work not done. %!is is e+tremely unair and amount to cuddling o labor at
t!e e+pense o management.
It s!ould be remembered t!at %!e P!ilippine Constitution, w!ile ine+orably
committed towards t!e protection o t!e working class rom e+ploitation and unair
treatment, nevert!eless mandates t!e policy o social -ustice so as to strike a balance
between an avowed predilection or labor, on t!e one !and, and t!e maintenance o t!e
legal rig!ts o capital, t!e proverbial !en t!at lays t!e golden egg, on t!e ot!er. Indeed,
we s!ould not be unmindul o t!e legal norm t!at -ustice is in every case or t!e
deserving, to be dispensed wit! in t!e lig!t o establis!ed acts, t!e applicable law, and
e+isting -urisprudence.
Since complainants are not regular employees, t!ere can be no illegal dismissal
to speak o. 1esides, complainants cannot claim regularity in t!e !iring every time a truck
comes loaded wit! scrap metal. %!is is conirmed in t!e Petty cas! Jouc!ers w!ic! are in
t!e names o dierent leaders w!o apportion t!e amount earned among !is members.
In addition, not every truck delivery o scrap metal re.uires t!e services o respondent
complainants w!en a particular truck is accompanied by its own ;unloader.; "nd
w!enever re.uired, respondent complainants were not always t!e ones contracted to
undertake t!e unloading o t!e trucks since t!e work was oered to w!omever were
available at a given time.
<. SAROCAM S INTERORIENT MARITIME =>? SCRA 5@2 A2@@2)
FACTS: 9n June 4A, 4***, petitioner 1en-amin Sarocam was !ired by Interorient
?aritime and /emaco ,nited 5td., or 14#mont! contract as Pbosun on board ?@J /espina.
8!ile navigating to C!ina, Sarocam suered lumbar sprain w!en !e accidentally ell
rom a ladder. 9n $ov 1', 4***, !e was e+amined and was ound to !ave
neuromyositis and diabetes. %!e e+amining p!ysician prescribed medicine and
recommended signing o and !ospitaliLation. 6e was repatriated on $ov <*, 4***.9n /ec
', 4***, petitioner was reerred to t!e company#designated p!ysician. Sarocam was
given medicine or !is back pain and diabetes and was advised to return or a
c!eckup. 9n /ec 1<, !e returned to t!e clinic wit! normal results7 petitioner was t!en
declared Pit or duty.
9n ?ar 4*, 4**1, petitioner e+ecuted a release and .uitclaim in avor o !is
Interorient ?aritime w!ere !e acknowledged receipt o &)*' as sick wages. 6owever
on $ov4**1, petitioner iled a complaint wit! $53C or disability beneit, illness
allowance@reimbursement o medical e+penses, damages and ees. %o support !is claim,
!e presented medical certiicates issued by !is < personal doctors, recommending =rade
JIII disability under P9K" sc!edule o disability grading.5" dismissed t!e complaint citing
t!at !e was not entitled to disability beneits because !e was declared it or duty and !ad
previously e+ecuted a release and .uitclaim in avor o !is employers and !ad already
received !is sickness allowance. $53C airmed t!e same.
SarocamQs argumentD t!e .uitclaim !e e+ecuted is invalid, as t!e amount !e received was
muc! lower t!an w!at !e s!ould !ave received under t!e P9K" standard employment
contract. :uitclaims are rowned upon by t!e courts as t!ey are contrary to public policy.
ISSUES: 8@$ S"39C"?QS KRKC,%I9$ 9F " 3K5K"SK "$/ :,I%C5"I? KS%9P 6I? F39?
C5"I?I$= /IS"1I5I%G 1K$KFI%S ,/$K3 %6K P9K" S%"$/"3/K?P59G?K$% C9$%3"C%
HELD: 8!ile t!e petitioner may be correct in stating t!at .uitclaims are rowned upon or
being contrary to public policy, t!e Court !as, likewise recogniLed legitimate waivers t!at
represent voluntary and reasonable settlement o a workerQs claim w!ic! s!ould be respected as t!e
law between t!e parties. 8!ere t!e person making t!e waiver !as done so voluntarily, wit! a ull
understanding t!ereo, and consideration or t!e .uitclaim is credible and reasonable, t!e transaction must
be recogniLed as being a valid and binding undertaking.
In t!e present case, Sarocam wrote t!e release and .uitclaim wit! !is own
!and. From t!e document itsel, t!e element o voluntariness in its e+ecution
is evident. 6e also appears to !ave ully understood t!e contents o t!e document !e was
signing, as t!e important provision t!ereo !ad been relayed to !im in Filipino. $ot all
waivers and .uitclaims are invalid as against public policy. I t!e agreement was
voluntarily entered into and represents a reasonable settlement, it is binding on t!e
parties and may not later be disowned simply because o a c!ange o mind.
It is only w!ere t!ere is clear proo t!at t!e waiver was wangled rom an unsuspecting or
gullible person, or t!e terms o t!e settlement are unconscionable on its ace, t!e law will step in to annul
t!e .uestionable transaction. 1ut w!ere it is s!own t!at t!e person making t!e waiver did so
voluntarily, and t!e consideration or t!e .uitclaim is credible and reasonable, t!e
transaction must be recogniLed as a valid and binding undertaking. 5et it be emp!asiLed t!at
t!e constitutional policy to provide ull protection to labor is not meant to be a sword to oppress
employers. %!e commitment o t!is Court to t!e cause o labor does not prevent us rom
sustaining t!e employer w!en it is in t!e rig!t.
M!"!0(4("& P.(.-0!&+v(s
>. P)!%+#- U.1!"(s v. CA
J started working as a security guard in P2s agency in 19(). In 199), t!e agency2s
contract wit! SSS 1uendia, w!ere J was assigned, e+pired. So J repeatedly reported to P2s
oice on several occasions or a new assignment, but was not given one. 6e was !owever
inormed by a ormer supervisor t!at t!ere was a vacant position or !im in t!e $6?FC,
but w!en !e reported t!ere, !e was inormed t!at t!ere was no post available or !im. 6e
was again oered by t!e agency a post in 1ataan but !e re-ected as !e was residing in
?anila. %!ereater, J iled a complaint beore t!e $53C against P and !is agency or illegal
dismissal, illegal deduction, underpayment o wages, non payment o premium pay or
!oliday, rest day, !oliday pay, service incentive leave, 1<t! mont! pay, backwages and
attorney2s ees.
%!e 5abor "rbiter ruled in avor o J, and stated t!at t!ere was illegal dismissal,
it being t!e duty o respondent agency to provide a reassignment to J considering t!at !is
relie rom !is last post does not constitute a severance o employer#employee
relations!ip. %!e $53C and C" airmed t!e decision o t!e 5abor "rbiter.
ISSUED 89$ t!e assignment oered to J in 1ataan was unreasonable and pre-udicial to
!is interest w!ic! is tantamount to a constructive dismissal.
RULINGD Ges. "s a general rule, t!e rig!t to transer or reassign employees is recogniLed
as an employerHs rig!t and t!e prerogative o management. "n employer, in t!e e+ercise
o !is prerogative may transer an employee, provided t!at said transer does not result
in a demotion in rank or diminution in salary, beneits and ot!er privileges o t!e
employee7 or is not unreasonable, inconvenient or pre-udicial to t!e latter7 or is not used
as a subteruge by t!e employer to rid !imsel o an undesirable worker.
6owever, t!ere are limits. %!ere must be no s!owing t!at it is unnecessary,
inconvenient and pre-udicial to t!e displaced employee. %!us, it is clear t!at w!ile
petitioner !as t!e prerogative to transer its guards pursuant to business e+igencies, !e
!as t!e burden, !owever, to s!ow t!at t!e e+ercise o suc! prerogative was not done wit!
grave abuse o discretion or contrary to -ustice and air play.
%!is petitioner ailed to do. 6e argues t!at t!ere can be no constructive
dismissal as t!ere was a continuous oer or a -ob post in 1ataan, w!ic! J continued to
reuse. 6owever, petitioner also claimed t!at t!ere were also many ot!er posts available
in ?anila or J, it never made an oer to J during t!e conerences conducted beore t!e
5abor "rbiter2s 9ice. %!us instead o ade.uately s!owing t!e necessity o J2s transer to
1ataan, petitioner cast doubt as to t!e urgency o suc! decision. 8!ile transer o
assignment w!ic! may occasion !ards!ip or inconvenience is allowed, t!is Court !owever
s!all not countenance a transer t!at is unnecessary, inconvenient and pre-udicial to
employees.
1@. GUALBERTO AGUAN7A vs ASIAN TERMINAL, INC.
FACTS: Petitioner =ualberto "guanLa was employed wit! respondent company "sian
%erminal, Inc. rom "pril 1', 19(9 to 9ctober 199A. 6e was initially employed as
/erickman or Crane 9perator and was assigned as suc! aboard 1ismark IJ, a loating
crane barge owned by "sian %erminals, Inc. based at t!e port o ?anila. 9n 9ctober 4*,
199A, respondent James Seit! issued a memo to t!e crew o 1ismark IJ stating t!at t!e
barge !ad been permanently transerred to t!e ?ariveles =rains terminal beginning
9ctober 1, 199A and because o t!at, its crew would no longer be entitled to out o port
beneits o 10 !ours overtime and P4** a day allowance.
T"guanLaU, wit! our ot!er members o t!e crew, stated t!at t!ey did not ob-ect to
t!e transer o 1ismark IJ to ?ariveles, 1ataan, but t!ey ob-ected to t!e reduction o
t!eir beneits. Kventually, t!e ot!er members o t!e crew o 1ismark IJ accepted t!e
transer and it was only T"guanLaU w!o reused t!e transer. T"guanLaU insisted on
reporting to work in ?anila alt!oug! !is barge, 1ismark IJ, and its ot!er crew were
already permanently based in ?ariveles, 1ataan. T"guanLaU was not allowed to time in in
?anila because !is work was in ?ariveles, 1ataan. 8!en !is re.uest was not granted !e
iled a case o illegal dismissal beore t!e 5abor "rbiter w!ic! ruled in !is avor, stating
t!at "%I violated t!e rule against diminution o beneits. %!e $53C, !owever, reversed t!e
5"2s decision and !eld t!at "guanLa2s insistence to be paid out#o#town beneits, despite
t!e act t!at t!e crane to w!ic! !e was assigned was already permanently based outside
?etro ?anila, was unreasonable. %!e C" sustained t!e decision o t!e $53C.
1. Whether or not Aguanzas transfer constituted constructive dismissal.
$9. "%I2s transer o 1ismark IJ2s base rom ?anila to 1ataan was, contrary to "guanLa2s
assertions, a valid e+ercise o management prerogative. %!e transer o employees !as
been traditionally among t!e acts identiied as a management prerogative sub-ect only to
limitations ound in law, collective bargaining agreement, and general principles o air
play and -ustice. Kven as t!e law is solicitous o t!e welare o employees, it must also
protect t!e rig!t o an employer to e+ercise w!at are clearly management prerogatives.
%!e ree will o management to conduct its own business aairs to ac!ieve its purpose
cannot be denied.
9
9n t!e ot!er !and, t!e transer o an employee may constitute constructive
dismissal ;w!en continued employment is rendered impossible, unreasonable or unlikely7
w!en t!ere is a demotion in rank and@or a diminution in pay7 or w!en a clear
discrimination, insensibility or disdain by an employer becomes unbearable to t!e
employee.;
1*
"guanLa2s continued employment was not impossible, unreasonable or unlikely7
neit!er was t!ere a clear discrimination against !im. "mong t!e employees assigned to
1ismark IJ, it was only "guanLa w!o did not report or work in 1ataan. "guanLa2s
assertion t!at !e was not allowed to ;time in; in ?anila s!ould be taken on its aceD
"guanLa reported or work in ?anila, w!ere !e wanted to work, and not in 1ataan, w!ere
!e was supposed to work. %!ere was no demotion in rank, as "guanLa would continue !is
work as Crane 9perator. Furt!ermore, despite "guanLa2s assertions, t!ere was no
diminution in pay.
8!en 1ismark IJ was based in t!e port o ?anila, "guanLa received basic salary, meal
allowance, and i+ed overtime pay o 10 !ours and per diem allowance w!en t!e barge
was assigned outside o ?anila. %!e last two items were given to "guanLa upon t!e
condition t!at 1ismark IJ was assigned outside o ?anila. "guanLa was not entitled to t!e
i+ed overtime pay and additional allowances w!en 1ismark IJ was in ?anila.
11. PAL v. NLRC
F!%&s: P!ilippine "irlines !ired respondent 3aul /iamante as Integrated %icket
3epresentative or 1acolod City station. 9n "pril (, 19((, Kdgardo Pineda, 3iLalino
Cabarloc, Krnesto Subia and 3olando Jelasco went to 1acolod "irport to !ave t!eir tickets
booked or t!eir lig!t to ?anila on "pril 9 and 1*, 19((. 3omeo Jista, a ormer
oicemate o Kdgardo Pineda, was t!eir contact person. Pineda re.uested /iamante i !e
could book t!eir tickets or t!e "pril (, 19(( lig!t, particularly Subia, w!o !ad to attend
an important meeting in ?anila. /iamante answered t!at all lig!ts or t!e week were
ully booked. 6e suggested t!at !e leave wit! !im t!eir tickets. Pineda gave our I)C
tickets to /iamante toget!er wit! t!e amount o 9ne %!ousand Pesos IP1,***.**C t!en
/iamante assured t!em t!at t!ey will be accommodated. %!e manager c!arged /iamante
administratively wit! bribery@e+tortion and violation o P"5Hs Code o /iscipline,
particularly "rticle JIII, Section 1, paragrap! 4 t!ereo, w!ic! providesD
;"ny employee w!o directly or indirectly re.uests or receives any consideration,
s!are, percentage or commission or !imsel or or anot!er person in connection wit! t!e
perormance o !is duties.;
9n /ecember 1), 19((, /iamante received a notice o !is dismissal rom t!e
service by an oice memorandum. /iamante iled wit! t!e $ational 5abor 3elations
Commission, 3egional "rbitration 1ranc! $o. JI, 1acolod City, a complaint against
P!ilippine "irlines, Inc. or illegal dismissal, reinstatement wit! backwages and damages.
%!e 5abor "rbiter declared t!e dismissal legal and valid. /iamante appealed w!ic! $53C
granted, setting aside t!e 5abor "rbiterHs decision and ordering t!e reinstatement o
/iamante wit! t!ree years back#wages. 6ence, t!is petition.
Iss'(s: 8as t!e dismissal o /iamante validF 8as /iamante2s rig!t to due process
violatedF
R')+"0: I1CGes 4C$o
3egarding t!e legality o respondentHs dismissal, we note t!at respondent was
ound to !ave violated t!e Company Code o /iscipline. 8e recogniLe t!e rig!t o an
employer to regulate all aspects o employment. %!is rig!t, aptly called management
prerogative, gives employers t!e reedom to regulate, according to t!eir discretion and
best -udgment, all aspects o employment, including work assignment, working met!ods,
processes to be ollowed, working regulations, transer o employees, work supervision,
lay#o o workers and t!e discipline, dismissal and recall o workers. In general,
management !as t!e prerogative to discipline its employees and to impose appropriate
penalties on erring workers pursuant to company rules and regulations.
8it! respect to t!e procedural aspect o private respondentHs dismissal, !e was
given ample opportunity to present !is side and to deend !imsel against t!e c!arges
against !im. 6e !ad every opportunity to be !eard. Petitioner sent a letter dated July (,
19((, to respondent, re.uiring !im to answer t!e c!arges against !im. 6e participated in
t!e investigation conducted by t!e company and !e appeared wit! !is counsel on 9ctober
<, 19((. "ter investigation, !e was notiied o !is dismissal. %!e act t!at respondent
/iamante was not able to conront Pineda did not mean t!at !e was deprived o !is rig!t
to due process.
12. P*+) A4 L+/( v. G.!4!B(
F!%&s: P!il#am 5ie Company, in t!e e+ercise o its management prerogative re#assigns
"ngelita =rama-e rom marketing o =roup 5ie /ivision o t!e company to legal
department. Prior to t!is, some top e+ecutives o t!e company oered !er to pay a
substantial amount Ht!oug! not enoug!, in e+c!ange or !er to vacate !er position as
marketing manager. 8!en s!e reused to vacate, s!e was ordered to transer to 5egal
/epartment as one o t!e company lawyers considering t!at s!e is also a lawyer !ersel.
Corollary to t!e actions o management, s!e was also denied o !er application
or car loan privilege and ot!er beneits. Feeling aggrieved, s!e iled a complaint beore
5abor "rbiter, t!e proper .uasi#-udicial body !earing complaint relating to employer#
employee relations!ip. S!e iled an illegal@constructive dismissal against t!e company.
%!e 5abor "rbiter !owever, rendered a decision against t!e complainant declaring s!e was
not illegally dismissed since t!e management merely e+ercised its management
prerogative.
=rama-e appealed to $ational 5abor 3elations Commission w!ere it airmed in
toto t!e decision o t!e 5abor "rbiter. S!e t!en appealed urt!er to t!e Court o "ppeals
w!ere t!is court reversed and set aside t!e decision o t!e lower courts ordering t!e
company to pay t!e complainant in lieu o reinstatement, backwages inclusive o
allowances and ot!er beneits.
%!e Company, at t!is point, iled certiorari beore t!e Supreme Court assigning
as error declaring t!e transer to legal department is tantamount to constructive
dismissal.
Iss'(: 8as t!ere a proper e+ercise o management prerogative or t!ere was constructive
dismissalF
R')+"0: %!ere was constructive dismissal. In a long line o decisions, t!e SC !eld t!at t!e
rig!t and privilege o t!e employer to e+ercise t!e so#called management prerogative is
recogniLed, and t!e courts will not interere wit! it. %!is privilege is in!erent in t!e rig!t
o employers to control and manage t!eir enterprise eectively.
?anagerial prerogatives, !owever, are sub-ect to limitations provided by law,
collective bargaining agreements, and general principles o air play and -ustice. In t!e
case o 1lue /airy Corporation v. $53C, we e+plained t!e test or determining t!e validity
o t!e transer o employees, as ollowsD 1ut, like ot!er rig!ts, t!ere are limits t!ereto.
%!e managerial prerogative to transer personnel must be e+ercised wit!out grave abuse
o discretion, bearing in mind t!e basic elements o -ustice and air play. 6aving t!e rig!t
s!ould not be conused wit! t!e manner in w!ic! t!at rig!t is e+ercised. %!us, it cannot
be used as a subteruge by t!e employer to rid !imsel o an undesirable worker.
In particular, t!e employer must be able to s!ow t!at t!e transer is not
unreasonable, inconvenient or pre-udicial to t!e employee7 nor does it involve a demotion
in rank or a diminution o !is salaries, privileges and ot!er beneits. S!ould t!e employer
ail to overcome t!is burden o proo, t!e employee2s transer s!all be tantamount to
constructive dismissal, w!ic! !as been deined as a .uitting because continued
employment is rendered impossible, unreasonable or unlikely7 as an oer involving a
demotion in rank and diminution in pay. 5ikewise, constructive dismissal e+ists w!en an
act o clear discrimination, insensibility or disdain by an employer !as become so
unbearable to t!e employee leaving !im wit! no option but to orego wit! !is continued
employment. %!e circumstances w!ic! prevailed in t!e working environment o t!e
respondent clearly demonstrate t!is. %!e Supreme Court, airmed t!e decision o Court
o "ppeals.
1?. S&. M+%*!()Cs I"s&+&'&( v. S!"&-s
FACTS: 3espondents are teac!ers o petitioner sc!ool. %!eir services were terminated
because t!ey participated in a public rally aimed at calling t!e attention o t!e sc!ool to
certain grievances relative to substandard sc!ool acilities and t!e economic demands o
t!e teac!ers. %!e investigation committee o t!e sc!ool revealed t!at respondents
actively participated in t!e rally, in w!ic! t!ey denounced t!e /irector o said sc!ool.
%!eir termination was recommended by t!e committee.
3espondents iled a complaint or illegal dismissal. %!e 5abor "rbiter ound and
declared respondents guilty o dereliction o duty and insubordination or ailing to
conduct classes on t!e day o t!e rally. %!e 5abor "rbiter opined t!at t!eir willul
disobedience is a -ust cause or termination. %!e $53C reversed t!e ruling o t!e 5" and
!eld t!at respondents were illegally dismissed. 9n appeal, t!e C" sustained t!e $53C2s
decision.
ISSUED 8!et!er or not respondents were illegally dismissed.
HELDD %!e employerHs rig!t to conduct t!e aairs o !is business, according to its own
discretion and -udgment, is well#recogniLed. "n employer !as a ree reign and en-oys
wide latitude o discretion to regulate all aspects o employment, including t!e
prerogative to instill discipline in its employees and to impose penalties, including
dismissal, upon erring employees. %!is is a management prerogative. %!e only criterion
to guide t!e e+ercise o its management prerogative is t!at t!e policies, rules and
regulations on work#related activities o t!e employees must always be air and
reasonable and t!e corresponding penalties, w!en prescribed, commensurate to t!e
oense involved and to t!e degree o t!e inraction.
%!e dismissal meted out on t!e respondents or dereliction o duty or one
sc!ool day and denouncing sc!ool aut!ority, appears to be too !ars! a penalty. It must
be noted t!at t!e respondents are being !eld liable or a irst time oense despite long
years o unblemis!ed service. Kven w!en an employee is ound to !ave transgressed t!e
employerHs rules, in t!e actual imposition o penalties upon t!e erring employee, due
consideration must still be given to !is lengt! o service and t!e number o violations
committed during !is employment.
"s a -ust cause or termination, t!e misconduct must be serious, w!ic! implies
t!at it must be o suc! grave and aggravated c!aracter and not merely trivial or
unimportant. 9n t!e ot!er !and, disobedience, as a -ust cause or termination, must be
willul or intentional. 8illulness is c!aracteriLed by a wrongul and perverse mental
attitude rendering t!e employeeHs act inconsistent wit! proper subordination. In t!e
instant case, evidence is wanting on t!e depravity o conduct, and willulness o t!e
disobedience on t!e part o t!e respondents. "bsence o one day o work to -oin a public
rally cannot be o suc! great dimension as to e.uate it wit! an oense punis!able wit!
t!e penalty o dismissal.
1=. D'"%!" Ass-%+!&+-" v. G)!D- 9()%-4(
F!%&s: Petitioner Pedro ". %ecson was !ired by respondent =la+o 8ellcome P!ilippines,
Inc.C as medical representative on 9ctober 199', ater %ecson !ad undergone training
and orientation. %ecson signed a contract o employment w!ic! stipulates, among ot!ers,
t!at !e agrees to study and abide by e+isting company rules7 to disclose to management
any e+isting or uture relations!ip by consanguinity or ainity wit! co#employees or
employees o competing drug companies and s!ould management ind t!at suc!
relations!ip poses a possible conlict o interest, to resign rom t!e company.
%!e Kmployee Code o Conduct o =la+o similarly provides t!at an employee is
e+pected to inorm management o any e+isting or uture relations!ip by consanguinity or
ainity wit! co#employees or employees o competing drug companies. I management
perceives a conlict o interest or a potential conlict between suc! relations!ip and t!e
employee2s employment wit! t!e company, t!e management and t!e employee will
e+plore t!e possibility o a Ntranser to anot!er department in a non#counterc!ecking
positionO or preparation or employment outside t!e company ater si+ mont!s.
%ecson was initially assigned to market =la+o2s products in t!e Camarines Sur#Camarines
$orte sales area. Subse.uently, %ecson entered into a romantic relations!ip wit! 1ettsy,
an employee o "stra P!armaceuticals I"straC, a competitor o =la+o. 1ettsy was "stra2s
1ranc! Coordinator in "lbay. /espite o warnings, %ecson married 1ettsy. %!e superiors o
%ecson reminded !im o t!e company policy and suggested t!at eit!er !im or 1ettsy s!all
resign rom t!eir respective companies. %ecson re.uested more time to resolve t!e issue.
In $ovember o 1999, =la+o transerred %ecson to ?indanao area involving t!e provinces
o 1utuan, Surigao and "gusan del Sur. %ecson did not agree to t!e reassignment and
reerred t!is matter to t!e grievance committee. It was resolved and was submitted to
voluntary arbitration.
%!e $C?1 rendered decision t!at =la+o2s policy was a valid one. "ggrieved,
%ecson iled a petition to t!e C" w!ere C" !eld t!at =la+o2s policy pro!ibiting its
employees rom !aving personal relations!ips wit! employees o competitor companies is
a valid e+ercise o its management prerogatives. 6ence, t!is petition.
Iss'(: 8!et!er or not t!e policy o a p!armaceutical company pro!ibiting its employees
rom marrying employees o any competitor company is valid.
R')+"0: %!ere is no error to t!e Court o "ppeals w!en it ruled t!at =la+o2s policy
pro!ibiting an employee rom !aving a relations!ip wit! an employee o a competitor
company is a valid e+ercise o management prerogative. =la+o !as a rig!t to guard its
trade secrets, manuacturing ormulas, marketing strategies and ot!er conidential
programs and inormation rom competitors, especially so t!at it and "stra are rival
companies in t!e !ig!ly competitive p!armaceutical industry.
%!e pro!ibition against personal or marital relations!ips wit! employees o
competitor companies upon =la+o2s employees is reasonable under t!e circumstances
because relations!ips o t!at nature mig!t compromise t!e interests o t!e company. In
laying down t!e assailed company policy, =la+o only aims to protect its interests against
t!e possibility t!at a competitor company will gain access to its secrets and procedures.
%!at =la+o possesses t!e rig!t to protect its economic interests cannot be denied.
$o less t!an t!e Constitution recogniLes t!e rig!t o enterprises to adopt and
enorce suc! a policy to protect its rig!t to reasonable returns on investments and to
e+pansion and growt!. Indeed, w!ile our laws endeavor to give lie to t!e constitutional
policy on social -ustice and t!e protection o labor, it does not mean t!at every labor
dispute will be decided in avor o t!e workers. %!e law also recogniLes t!at management
!as rig!ts w!ic! are also entitled to respect and enorcement in t!e interest o air play.
1'. SCA HYGIENE PRODUCTS CORPORATION EMPLOYEES ASSOCIATIONEFF8 .
SCA HYGIENE PRODUCTS CORPORATION
FACTS: 3espondent SC" 6ygiene Products Corporation is a domestic corporation engaged
in t!e manuacture, sale and distribution o industrial paper, tissue and allied products. It
!as e+isting Collective 1argaining "greements IC1"sC wit! SC" 6ygiene Products
Corporation ?ont!ly Kmployees ,nion#FS? I?ont!ly Kmployees ,nionC and petitioner
SC" 6ygiene Products Corporation Kmployees "ssociation#FF8 I/aily Kmployees ,nionC,
w!ic! represents t!e mont!ly and daily paid rank#and#ile employees, respectively.
1ot! C1"s o t!e ?ont!ly Kmployees ,nion and t!e /aily Kmployees ,nion contain
provisions on Job Kvaluation.
In a 5etter dated 4) February 4**), respondent inormed 44 daily paid rank#and#ile
employees t!at t!eir positions !ad been classiied as Job =rade 5evel 4.
"s a result, t!e ?ont!ly Kmployees ,nion demanded t!at t!e 44 daily paid rank#
and#ile employees be given conversion increase, promotion increase as well as
retroactive salary increase rom t!e time t!e -ob evaluation was completed on t!e ground
t!at t!eir positions !ad been converted into a !ig!er -ob grade level w!ic! amounted to a
promotion. 5ikewise, t!e /aily Kmployees ,nion asked or t!e ad-ustment o said
employees2 compensation since t!e conversion warranted t!eir entitlement to t!e
beneits, status and privileges o a mont!ly paid rank#and#ile employee.
"s respondent ailed to respond, bot! unions submitted t!eir grievances or
mediation. 8!en t!e parties ailed to reac! an amicable settlement, t!ey submitted t!e
case or voluntary arbitration.
%!e company countered t!at t!e -ob evaluation was merely a process o
determining t!e relative contribution and value o t!e positions in its operations and does
not provide or any ad-ustment in t!e salaries o t!e covered employees. %!e sub-ect
employees cannot be converted to mont!ly paid rank#and#ile employees and given a
conversion increase since t!ey continue to occupy t!e same positions t!at t!ey were
occupying prior to t!e -ob evaluation. %!eir promotion did not involve any increase in
t!eir duties and responsibilities.
9n 4 "ugust 4**A, Joluntary "rbitrator 3enato :. 1ello ruled in avor o t!e unions
and awarded conversion increase and attorney2s ees to t!e 44 daily paid rank#and#ile
employees.
9n appeal, t!e Court o "ppeals ruled in avor o respondent. It !eld t!at t!e -ob
evaluation was conducted as a reorganiLation process to standardiLe t!e company2s
organiLational set#up. It was not designed to provide any conversion or ad-ustment to
t!e salaries o t!e employees. %!e C1"s merely provided t!e procedure or t!e
implementation o t!e -ob evaluation. It did not speciically state t!at t!e covered
employees are entitled to any salary ad-ustment ater t!e -ob evaluation.
ISSUES: 8ere t!e 44 daily paid rank#and#ile employees promoted ater t!eir positions
!ave been converted rom Job =rade 5evel 1 to Job =rade 5evel 4F7 and I4C i so, are
t!ey entitled to conversion increase e.uivalent to 1*V o t!eir current basic salaryF
RULING: $9. It is a well#settled rule t!at labor laws do not aut!oriLe intererence wit!
t!e employerHs -udgment in t!e conduct o its business. %!e 5abor Code and its
implementing rules do not vest managerial aut!ority in t!e labor arbiters or in t!e
dierent divisions o t!e $ational 5abor 3elations Commission or in t!e courts. %!e
!iring, iring, transer, demotion, and promotion o employees !ave been traditionally
identiied as a management prerogative sub-ect to limitations ound in t!e law, a
collective bargaining agreement, or in general principles o air play and -ustice. %!is is a
unction associated wit! t!e employerHs in!erent rig!t to control and manage eectively
its enterprise. Kven as t!e law is solicitous o t!e welare o employees, it must also
protect t!e rig!t o an employer to e+ercise w!at are clearly management prerogatives.
%!e ree will o management to conduct its own business aairs to ac!ieve its purpose
cannot be denied. "ccordingly, t!is Court !as recogniLed and airmed t!e prerogative o
management to implement a -ob evaluation program or a re#organiLation or as long as it
is not contrary to law, morals or public policy.
12. $')+( B!;(s*-, v. H(".3 A."!+5
F!%&s: 3eyes !ired respondents as c!ie bakers in !is t!ree ranc!ise branc!es o Julie2s 1akes!op
in Sibalom and San Jose, "nti.ue. 9n January 40, 4***, respondents iled separate complaints
against petitioners or underpayment o wages, payment o premium pay or !oliday and rest day,
service incentive leave pay, 1<
t!
mont! pay, cost o living allowance IC95"C and attorney2s ees.
Subse.uently, 3eyes reassigned respondents as utility@security personnel tasked to clean t!e
outside vicinity o !is bakes!ops and to maintain peace and order in t!e area. 3espondents reused
to perorm t!eir new assignments by not reporting or work. In two letters#memoranda, 3eyes
directed respondents to report back or work and to e+plain w!y t!ey ailed to assume t!eir duties
as utility@security personnel but bot! were un!eeded.
%!e 5abor "rbiter dismissed respondents2 complaints. ,pon appeal, t!e $53C rendered
its irst /ecision w!ic! remanded t!e case to t!e 5abor "rbiter or purposes o identiying t!e real
respondents and separating t!e consolidated cases i warranted, and or t!e conduct o urt!er
proceedings due to 3eyes2s allegation t!at "rnaiL and $apal !ave a dierent employer. ,pon
petitioners2 motion, !owever, t!e $53C reconsidered t!is ruling and resolved t!e case on t!e merits.
In so doing, it ound t!e respondents to !ave been constructively dismissed. %!e $53C, !owever,
once again reversed itsel in a 3esolution upon 3eyes2s iling o a ?otion or 3econsideration. %!is
time, t!e $53C !eld t!at respondents were not illegally dismissed but instead abandoned t!eir -obs.
3espondents soug!t recourse to t!e C". %!e C" ound merit in t!e petition, ruling t!at respondents
were constructively dismissed since t!eir designation rom c!ie bakers to utility@security personnel
is undoubtedly a demotion in rank w!ic! involved Na drastic c!ange in t!e nature o work resulting
to a demeaning and !umiliating work condition.O 6ence, t!e petition to t!e SC.
Petitioners insist t!at t!e order transerring or reassigning respondents rom c!ie bakers
to utility@security personnel is a valid e+ercise o management prerogative or it does not involve any
diminution in pay and privileges and t!at same is in accordance wit! t!e re.uirements o t!e
business, vi*+ to protect its goodwill and reputation as well as t!e !ealt! and welare o t!e
consuming public It!e baker supposedly tinkered wit! bread recipeC.
Iss'(: Is t!e transerring or reassigning o t!e respondents a valid e+ercise o management
prerogative even i it did not involve any diminution in pay and privilegesF
R')+"0: $o, it was not a valid e+ercise o management prerogative. 3at!er, it amounted
to a constructive dismissal. %!e e+ercise o management prerogative, is not absolute as it
must be e+ercised in good ait! and wit! due regard to t!e rig!ts o labor.
In constructive dismissal cases, t!e employer !as t!e burden o proving t!at t!e transer
o an employee is or -ust or valid ground, suc! as genuine business necessity. %!e employer must
demonstrate t!at t!e transer is not unreasonable, inconvenient, or pre-udicial to t!e employee and
t!at t!e transer does not involve a demotion in rank or a diminution in salary and ot!er beneits.
NI t!e employer ails to overcome t!is burden o proo, t!e employee2s transer is tantamount to
unlawul constructive dismissal.O
In t!is case, petitioners ailed to satisy t!e burden o proving t!at t!e transer was
based on -ust or valid ground. Petitioners2 bare assertions o imminent t!reat rom t!e respondents
are mere accusations w!ic! are not substantiated by any proo. %!e Court is proscribed rom
making conclusions based on mere presumptions or suppositions. "n employee2s ate cannot be
-ustly !inged upon con-ectures and surmises. %!e act attributed against %olores does not even
convince us as !e was merely a suspected culprit in t!e alleged sabotage or w!ic! no investigation
took place to establis! !is guilt or culpability. 1esides, 3eyes still retained %olores as an employee
and c!ie baker w!en !e could !ave dismissed !im or cause i t!e allegations were indeed ound
true. %!e Court ound no compelling reason to -ustiy t!e transer o respondents rom c!ie bakers
to utility@security personnel. 8!at appeared is t!at respondents2 transer was an act o retaliation
on t!e part o petitioners due to t!e ormer2s iling o complaints against t!em, and t!us, was clearly
made in bad ait!. In act, petitioner 3eyes even admitted t!at !e caused t!e reassignments due to
t!e pending complaints iled against !im.
?oreover, t!e transer o respondents amounted to a demotion. "lt!oug! t!ere was no
diminution in pay, t!ere was undoubtedly a demotion in titular rank. 9ne cannot deny t!e disparity
between t!e duties and unctions o a c!ie baker to t!at o a utility@security personnel tasked to
clean and manage t!e orderliness o t!e outside premises o t!e bakes!op. 3espondents were even
pro!ibited rom entering t!e bakes!op. %!e c!ange in t!e nature o t!eir work undeniably resulted
to a demeaning and !umiliating work condition.
WnotesD 1. ?anagement prerogative##?anagement is ree to regulate, according to its own
discretion and -udgment, all aspects o employment, including !iring, work assignments, working
met!ods, time, place and manner o work, processes to be ollowed, supervision o workers,
working regulations, transer o employees, work supervision, lay o o workers and discipline,
dismissal and recall o workers.
4. NT/Uemotion involves a situation in w!ic! an employee is relegated to a subordinate or
less important position constituting a reduction to a lower grade or rank, wit! a corresponding
decrease in duties and responsibilities, and usually accompanied by a decrease in salary.O 8!en
t!ere is a demotion in rank and@or a diminution in pay7 w!en a clear discrimination, insensibility or
disdain by an employer becomes unbearable to t!e employee7 or w!en continued employment is
rendered impossible, unreasonable or unlikely, t!e transer o an employee may constitute
constructive dismissal.
2
"#
1!&%*
I"v-)'"&!.3 s(.v+&'#( ,.-*+1+&+-"
1). FLORES vs. CA G.R. N-. 12@2>=. $!"'!.3 21, 2@@=
FACTS: Kco#%riangle %ec!nologies, Inc. INKco#%riangleOC iled a complaint or damages
against Flores wit! t!e 3egional %rial Court IN3%COC o ?akati City, 1ranc! 01. %!e
complaint, anc!ored on "rticles 19 and 41 o t!e Civil Code, alleged, among ot!ers, t!at
Flores was employed by Kco#%riangle as Sales Supervisor7, Flores became t!e most
trusted person o t!e ?anaging /irector o Kco#%riangle7 as "ssistant Sales ?anager,
Flores was entrusted wit! sensitive and conidential inormation suc! as t!e list o Kco#
%riangle2s suppliers, customers and prices7 in "ugust 199(, Kco#%riangle2s ?anaging
/irector went on study leave and in !is absence, entrusted t!e sales department to
Flores7 Flores entered into a covert agreement wit! =ouldstar, Kco#%riangle2s ormer
supplier, to engage in business in direct competition wit! Kco#%riangle7 in breac! o t!e
trust and conidence reposed on !im by Kco#%riangle, Flores took advantage o t!e
absence o t!e ?anaging /irector to sabotage Kco#%riangle2s business and, in connivance
wit! =ouldstar, diverted t!e sales o Kco#%riangle to =ouldsta. Flores iled a Motion to
,ismiss on t!e ground o lack o -urisdiction claiming t!at since t!e complaint stemmed
rom t!e employer#employee relations between t!e parties, t!e labor arbiter !ad
-urisdiction. %!e 3%C denied t!e Motion to ,ismiss or lack o merit.
!ssue" Whether or not the #abor Arbiter has $urisdiction over the instant case.
R')+"0D In order to be cogniLable by t!e labor arbiter, t!e claim or damages arising rom
employer#employee relations under paragrap! ), "rticle 41A o t!e 5abor Code must !ave
a reasonable causal connection wit! any o t!e claims provided or in t!at article. 9nly i
t!ere is suc! a connection wit! t!e ot!er claims can t!e claim or damages be considered
as arising rom employer#employee relations. In t!e instant case, t!e damages claimed
by Kco#%riangle do not !ave a reasonable causal connection wit! any o t!e claims
enumerated under "rticle 41A o t!e 5abor Code. %!e allegations in t!e complaint
une.uivocally reveal t!at t!e action was based on "rticles 19 and 41 o t!e Civil Code and
does not involve t!e ad-udication o a labor dispute. Plainly, t!e employer#employee
relations!ip between Kco#%riangle and Flores is merely incidental and does not negate t!e
-urisdiction o t!e trial court. "s lucidly !eld in Geo$( G$ot)ahn GM-. & Co. v. Isnani+$ot
every dispute between an employer and employee involves matters t!at only labor
arbiters and t!e $53C can resolve in t!e e+ercise o t!eir ad-udicatory or .uasi#-udicial
powers. %!e -urisdiction o labor arbiters and t!e $53C under "rticle 41A o t!e 5abor
Code is limited to disputes arising rom an employer#employee relations!ip w!ic! can only
be resolved by reerence to t!e 5abor Code, ot!er labor statutes, or t!eir collective
bargaining agreement.
N-"E+4,!+.4("& %)!'s(
2). P!0%-. v. BIR, GR N-. 1F@2<FM!.%* 15, 2@11
F!%&s: P"=C93 was created pursuant to Presidential /ecree IP./.C $o. 1*0A#"4 on
January 1, 19AA. Simultaneous to its creation, P./. $o. 1*0A#1< Isupplementing P./. $o.
1*0A#"C was issued e+empting P"=C93 rom t!e payment o any type o ta+, e+cept a
ranc!ise ta+ o ive percent I'VC o t!e gross revenue. %!ereater, on June 4, 19A(, P./.
$o. 1<99 was issued e+panding t!e scope o P"=C93Hs e+emption. %!is is a petition or
certiorari and pro!ibition wit! prayer or t!e issuance o a %emporary 3estraining 9rder
and@or Preliminary In-unction o petitioner P!ilippine "musement and =aming Corporation
IP"=C93C, seeking t!e declaration o nullity o Section 1 o 3epublic "ct I3.".C $o. 9<<A
insoar as it amends Section 4A IcC o t!e $ational Internal 3evenue Code o 199A, by
e+cluding petitioner rom e+emption rom corporate income ta+ or being repugnant to
Sections 1 and 1* o "rticle III o t!e Constitution. Petitioner urt!er seeks to pro!ibit t!e
implementation o 1ureau o Internal 3evenue I1I3C 3evenue 3egulations $o. 10#4**'
or being contrary to law.
Iss'(D /oes 3" 9<<A w!ic! wit!draws P"=C932s e+emption rom corporate income ta+
violate t!e non#impairment clauseF
R')+"0D $o. %!e non#impairment clause is contained in Section 1*, "rticle III o t!e
Constitution, w!ic! provides t!at no law impairing t!e obligation o contracts s!all be
passed. %!e non#impairment clause is limited in application to laws t!at derogate rom
prior acts or contracts by enlarging, abridging or in any manner c!anging t!e intention o
t!e parties. %!ere is impairment i a subse.uent law c!anges t!e terms o a contract
between t!e parties, imposes new conditions, dispenses wit! t!ose agreed upon or
wit!draws remedies or t!e enorcement o t!e rig!ts o t!e parties. "s regards
ranc!ises, Section 11, "rticle RII o t!e Constitution provides t!at no ranc!ise or rig!t
s!all be granted e+cept under t!e condition t!at it s!all be sub-ect to amendment,
alteration, or repeal by t!e Congress w!en t!e common good so re.uires.
P"=C93 was granted a ranc!ise to operate and maintain gambling casinos,
clubs and ot!er recreation or amusement places, sports, gaming pools, i.e., basketball,
ootball, lotteries, etc., w!et!er on land or sea, wit!in t!e territorial -urisdiction o t!e
3epublic o t!e P!ilippines. ,nder Section 11, "rticle RII o t!e Constitution, P"=C932s
ranc!ise is sub-ect to amendment, alteration or repeal by Congress suc! as t!e
amendment under Section 1 o 3.". $o. 9<AA. 6ence, t!e provision in Section 1 o 3.".
$o. 9<<A, amending Section 4A IcC o 3.". $o. ()4) by wit!drawing t!e e+emption o
P"=C93 rom corporate income ta+, w!ic! may aect any beneits to P"=C932s
transactions wit! private parties, is not violative o t!e non#impairment clause o t!e
Constitution.
In ?anila Klectric Company v. Province o 5aguna, t!e Court !eld t!at a
ranc!ise partakes t!e nature o a grant, w!ic! is beyond t!e purview o t!e non#
impairment clause o t!e Constitution.
L!1-. %-#( !,,)+%!1+)+&3
?). AUSTRIA v. NLRC, G.R. NO. 12=?<2, AUGUST 12, 1>>>
FACTS: Petitioner "ustria worked wit! t!e S/" or twenty eig!t I4(C years. 9n various
occasions, petitioner received several communications rom ?r. Ibesate, t!e treasurer o
t!e $egros ?ission asking !im to admit accountability and responsibility or t!e c!urc!
tit!es and oerings collected by !is wie, in !is district, and to remit t!e same to t!e
$egros ?ission. In !is written e+planation, petitioner reasoned out t!at !e s!ould not be
made accountable or t!e unremitted collections since it was private respondents Pastor
1u!at and ?r. Ibesate w!o aut!oriLed !is wie to collect t!e tit!es and oerings since !e
was very sick to do t!e collecting at t!at time.
%!ereater, petitioner went to t!e oice o Pastor 1u!at, t!e president o t!e
$egros ?ission, w!ere tried to persuade Pastor 1u!at to convene t!e K+ecutive
Committee or t!e purpose o settling t!e dispute between !im and t!e private
respondent, Pastor /avid 3odrigo. Pastor 1u!at denied t!e re.uest o petitioner since
some committee members were out o town and t!ere was no .uorum. %!ereater, t!e
two e+c!anged !eated arguments.
9n a later date, petitioner received a letter inviting !im and !is wie to attend t!e
K+ecutive Committee meeting. %o be discussed in t!e meeting were t!e non#remittance o
c!urc! collection and t!e events t!at transpired at t!e oice o Pastor 1u!at.
Subse.uently, petitioner received a letter o dismissal citing misappropriation o
denominational unds, willul breac! o trust, serious misconduct, gross and !abitual
neglect o duties, and commission o an oense against t!e person o employerHs duly
aut!oriLed representative, as grounds or t!e termination o !is services.
3eacting against t!e adverse decision o t!e S/", petitioner iled a complaint
beore t!e 5abor "rbiter or illegal dismissal against t!e S/" and its oicers and prayed
or reinstatement wit! backwages and beneits, moral and e+emplary damages and ot!er
labor law beneits. %!e 5abor "rbiter rendered a decision in avor o petitioner. %!e S/",
t!roug! its oicers, appealed t!e decision o t!e 5abor "rbiter to t!e $ational 5abor 5abor
3elations Commission, w!ere t!e $53C vacated t!e indings o t!e 5abor "rbiter.
Petitioner iled a motion or reconsideration o t!e above#named decision. %!e $53C t!en
issued a 3esolution reversing its original decision. In view o t!e reversal o t!e original
decision o t!e $53C, t!e S/" iled a motion or reconsideration o t!e above resolution.
Private respondents invoked t!at t!e 5abor "rbiter !as no -urisdiction over t!e complaint
iled by petitioner due to t!e constitutional provision on t!e separation o c!urc! and
state since t!e case allegedly involved an ecclesiastical aair to w!ic! t!e State cannot
interere. %!e $53C, wit!out ruling on t!e merits o t!e case, reversed itsel once again,
sustained t!e argument posed by private respondents and, accordingly, dismissed t!e
complaint o petitioner. Petitioner soug!t recourse wit! t!e Supreme Court.
ISSUES:
1C 8!et!er or not t!e 5abor "rbiter@$53C !as -urisdiction to try and decide t!e complaint
iled by petitioner against t!e S/"7 4C 8!et!er or not t!e termination o t!e services o
petitioner is an ecclesiastical aair, and, as suc!, involves t!e separation o c!urc! and
state7 and <C 8!et!er or not suc! termination is valid.
RULING:
1 > 4C %!e principle o separation o c!urc! and state inds no application in t!is case.
%!e case at bar does not concern an ecclesiastical or purely religious aair as to bar t!e
State rom taking cogniLance o t!e same. "n ecclesiastical aair involves t!e relations!ip
between t!e c!urc! and its members and relate to matters o ait!, religious doctrines,
wors!ip and governance o t!e congregation. 8!ile t!e matter at !and relates to t!e
c!urc! and its religious minister it does not ipso acto give t!e case a religious
signiicance. Simply stated, w!at is involved !ere is t!e relations!ip o t!e c!urc! as an
employer and t!e minister as an employee. It is purely secular and !as no relation
w!atsoever wit! t!e practice o ait!, wors!ip or doctrines o t!e c!urc!.
,nder t!e 5abor Code, t!e provision w!ic! governs t!e dismissal o employees, is
compre!ensive enoug! to include religious corporations, suc! as t!e S/", in its coverage.
"rticle 4A( o t!e 5abor Code on post#employment states t!at ;t!e provisions o t!is %itle
s!all apply to all establis!ments or undertakings, w!et!er or proit or not.; 9bviously,
t!e cited article does not make any e+ception in avor o a religious corporation.
<C $o. In termination cases, t!e settled rule is t!at t!e burden o proving t!at t!e
termination was or a valid or aut!oriLed cause rests on t!e employer. %!us, private
respondents must not merely rely on t!e weaknesses o petitionerHs evidence but must
stand on t!e merits o t!eir own deense.
%!e issue being t!e legality o petitionerHs dismissal, t!e same must be measured against
t!e re.uisites or a valid dismissal, namelyD IaC t!e employee must be aorded due
process, i.e., !e must be given an opportunity to be !eard and to deend !imsel, and7 IbC
t!e dismissal must be or a valid cause as provided in "rticle 4(4 o t!e 5abor Code.
8it!out t!e concurrence o t!is twin re.uirements, t!e termination would, in t!e eyes o
t!e law, be illegal.
1eore t!e services o an employee can be validly terminated, "rticle 4AA IbC o t!e 5abor
Code and Section 4, 3ule RRIII, 1ook J o t!e 3ules Implementing t!e 5abor Code urt!er
re.uire t!e employer to urnis! t!e employee wit! two I4C written notices, to witD IaC a
written notice served on t!e employee speciying t!e ground or grounds or termination,
and giving to said employee reasonable opportunity wit!in w!ic! to e+plain !is side7 and,
IbC a written notice o termination served on t!e employee indicating t!at upon due
consideration o all t!e circumstances, grounds !ave been establis!ed to -ustiy !is
termination. %!is is in consonance wit! t!e e+press provision o t!e law on t!e protection
to labor and t!e broader dictates o procedural due process. $on#compliance t!erewit! is
atal because t!ese re.uirements are conditions sine .ua non beore dismissal may be
validly eected. Private respondent ailed to substantially comply wit! t!e above
re.uirements.
%!e Court inds petitioner illegally dismissed, and is entitled to reinstatement to !is
ormer position wit!out loss o seniority rig!t and t!e payment o ull backwages wit!out
any deduction corresponding to t!e period rom !is illegal dismissal up to actual
reinstatement.
5). $.. ANGELES CONSTRUCTION CORPORATION vs NLRC G.R. N-. 122<<< A,.+)
1=, 1>>>
FACTS: Private respondent Pedro Santos was employed in 1909, as a carpenter, by t!e
petitioner, J.J. "ngeles Construction Corporation ICorporationC. In 19A<, !e was promoted
to t!e position o oreman w!ic! !e !eld until !is retirement in February 1994 w!en !e
was si+ty#two I04C years old. 9n 9ctober 4', 199<, !e broug!t a complaint or retirement
beneits and service incentive leave pay beore t!e $53C, $ational Capital 3egion
"rbitration 1ranc!, against t!e corporation. "ter t!e parties ailed to reac! an amicable
settlement during t!e conciliatory proceedings o t!e case, t!ey were re.uired to submit
t!eir respective position papers. 9n July 4', 199', 5abor "rbiter "riel Cadiente Santos
came out wit! a decision or private respondent. PetitionerHs appeal iled wit! t!e $53C on
"ugust 1), 199', assailed t!e said ruling o t!e 5abor "rbiter granting retirement beneits
to t!e !erein private respondent, by giving 3ep. "ct. $o. A0)1 I3etirement Pay 5awC a
retroactive application alt!oug! respondent Pedro Santos !ad retired almost a year prior
to t!e eectivity o said law on January A, 199<.
1. When can a labor law have retroactive application%
In C/C 0$a&in(, Inc. v. 12RC,
2
t!e aorecited doctrine was elaborated upon by
enumerating t!e circumstances w!ic! must concur beore t!e law could be given
retroactive eect, to witD I1C t!e claimant or retirement beneits was still t!e employee
o t!e employer at t!e time t!e statute took eect7 and I4C t!e claimant !as complied
wit! t!e re.uirements or eligibility under t!e statute or suc! retirement beneits.
2. !n the case at bar& can 'A ()*1 be retroactively applied%
$9. In t!e case under scrutiny, private respondent Santos retired and ceased to be an
employee o petitioner on February 1994, eleven I11C mont!s beore t!e eectivity o
3.". A0)1, and !e broug!t !is complaint on 9ctober 4<, 199<, nine I9C mont!s ater t!e
lawHs eectivity. It is t!us decisively clear t!at t!e provisions o 3.". A0)1 could not be
given retroactive eect in !is avor. Conse.uently, t!e $53C erred in up!olding t!e 5abor
"rbiterHs award o retirement beneits to private respondent..
I))(0!) .(%.'+&4("&
F). P(-,)( vs. D()! P+(#.! =3 $o. 141AAA January 4), 4**1
F!%&s: In t!e course o t!eir investigation, it was discovered t!at Carol Figueroa !ad
many aliases, among t!em, Carol 5lena and Carol dela Piedra."tty. 3amos o t!e P9K"
received a telep!one call rom an unidentiied woman in.uiring about t!e legitimacy o
t!e recruitment conducted by a certain ?rs. Carol Figueroa. 3amos, w!ose duties include
t!e surveillance o suspected illegal recruiters, immediately contacted a riend, a certain
?ayet! 1ellotindos, so t!ey could bot! go t!e place w!ere t!e recruitment was reportedly
being undertaken. ,pon arriving at t!e reported area at around )D** p.m., 1ellotindos
entered t!e !ouse and pretended to be an applicant. 3amos remained outside and stood
on t!e pavement, rom w!ere !e was able to see around 0 persons in t!e sala. 3amos
even !eard a woman, identiied as Carol Figueroa, talk about t!e possible employment
s!e !as to provide in Singapore and t!e documents t!at t!e applicants !ave to comply
wit!. 5ater, 1ellotindos came out wit! a bio#data orm in !and.
%!ereater, 3amos conerred wit! a certain Capt. ?endoLa o t!e Criminal
Investigation Service ICISC to organiLe t!e arrest o t!e alleged illegal recruiter. "
surveillance team was t!en organiLed to conirm t!e report. "ter w!ic!, a raid was
e+ecuted. Conse.uently, Carol was c!arged and convicted by t!e trial court o illegal
recruitment. /ela Piedra argues t!at t!e acts t!at constitute Nrecruitment and placementO
suer rom overbreadt! since by merely NreerringO a person or employment, a person
may be convicted o illegal recruitment.
Iss'(: Can t!e contentions o appellant o against !er conviction or illegal recruitment in
large scale and t!e constitutionality o t!e law be given meritF
R')+"0D %!ese contentions cannot be sustained. 9n t!e issue w!et!er or not accused was
denied e.ual protection, t!e court !eld t!at !e number o persons dealt wit! in Illegal
3ecruitment is not an essential ingredient o t!e act o recruitment and placement o
workers. "ny o t!e acts mentioned in t!e basic rule in "rticle 1<IbC will constitute
recruitment and placement even i only one prospective worker is involved. %!e proviso
merely lays down a rule o evidence t!at w!ere a ee is collected in consideration o a
promise or oer o employment to two or more prospective workers, t!e individual or
entity dealing wit! t!em s!all be deemed to be engaged in t!e act o recruitment and
placement.
%!e prosecution o one guilty person w!ile ot!ers e.ually guilty are not prosecuted, is
not, by itsel, a denial o t!e e.ual protection o t!e laws. %!e unlawul administration by
oicers o a statute air on its ace, resulting in its une.ual application to t!ose w!o are
entitled to be treated alike, is not a denial o e.ual protection unless t!ere is s!own to be
present in it an element o intentional or purposeul discrimination. 1ut a discriminatory
purpose is not presumed, t!ere must be a s!owing o Nclear and intentional
discrimination.OIn t!e case at bar, /ela Piedra !as ailed to s!ow t!at, in c!arging !er,
t!ere was a Nclear and intentional discriminationO on t!e part o t!e prosecuting oicials.
<). PP vs G'&+(..(5
F!%&s: Complainants IKJK5G$ J. 3"?9S, 39SK?"3IK I. %,="/K, =K$K39S" =.
"S,$CI9$ and 39S"5G$ 1. S,?"G9C were recruited and promised or employment in
/ubai as domestic !elpers. Complainants submitted t!eir application wit! accused
guiterreL2s recruiter agents ICKCI5I" 1",%IS%", KS%6K3 ="?I5/K, 5I$/" 3"1"I$9 and
?"3I5G$ ="3CI"C and paid a certain amount or placement, passport, medical ees,
among ot!er ees@payment re.uested by t!e accused rom complainants. Kac!
complainant were promised on several occasion t!at t!ey would be leaving or work
abroad, but none o t!e supposed sc!eduled departure ever pus! t!roug!. In act,
complainant Sumayo e+perienced t!e worse because s!e was broug!t by accused t!ree
times to t!e airport, raising !er e+pectations, but leaving !er !anging in mid#air. %!e
accused even !ad t!e audacity to demand cancellation ees rom t!e complainants w!en
t!ey asked or reund.
8it! t!e promises o -obs abroad unulilled, complainants decided to veriy i
t!e accused was a licensed recruiter. ,pon learning rom t!e P9K" t!at t!e accused was
not so licensed, t!ey proceeded to t!e P!ilippine anti#crime commission, and t!e latter
conducted an entrapment operation against accused.
%!e accused was t!en arrested and in !er deense, accused claimed t!at s!e was an
employee o a duly licensed agency ISariudin ?anpower and =eneral ServicesC and !er
aut!ority to recruit and oer -ob placement abroad emanated rom a SP" and certiication
issued by said licensed agency.
P9K" certiied t!at S"riudin was duly licensed to engaged in recruitment agency but t!e
said agency !ad revoked t!e appointment o =uiterres as overseas marketing
director@manager, alt!oug! it !as not received nor acknowledged t!e representation o
gutierreL.
%!e trial court ound accused guilty o illegal recruitment in large scale. 9n
appeal, accused argues t!at as a representative o a duly licensed recruitment agency,
s!e cannot be !eld guilty o Illegal 3ecruitment in 5arge Scale.
Iss'(D 8!et!er or not accused committed t!e crime o illegal recruitment in large scale.
R')+"0D %!e crime o Illegal 3ecruitment in 5arge Scale is committed w!enD 1C t!e
oender !as no valid license or aut!ority re.uired by law to enable one to lawully engage
in recruitment and placement o workers7 I4C !e undertakes eit!er any activity wit!in t!e
meaning o ;recruitment and placement; deined under "rt. 1<IbC, or any o t!e
pro!ibited practices enumerated under "rt. <) o t!e 5abor Code7 I<C t!e recruiter
committed t!e same against t!ree or more persons, individually or as a group.
Section 11, 3ule II, 1ook II o t!e 3ules and 3egulations =overning 9verseas
Kmployment re.uires t!e prior approval o t!e P9K" o t!e appointment o
representatives or agentsD
Section 11. A,,-+"&4("& -/ R(,.(s("&!&+v(s. Kvery appointment o representatives or
agents o licensed agency s!all be sub-ect to prior approval or aut!ority o t!e
"dministration.
%!e approval may be issued upon submission o or compliance wit! t!e ollowing
re.uirementsD
a. Proposed appointment or Special Power o "ttorney7
b. Clearances o t!e proposed representative or agent rom $1I7
c. " sworn or veriied statement by t!e designating or appointing person or
company assuming ull responsibility or all t!e acts o t!e agent or
representative done in connection wit! t!e recruitment and placement o
workers.
"pproval by t!e "dministration o t!e appointment or designation does not aut!oriLe t!e
agent or representative to establis! a branc! or e+tension oice o t!e licensed agency
represented.
"ny revocation or amendment in t!e appointment s!ould be communicated to t!e
administration. 9t!erwise, t!e designation or appointment s!all be deemed as not
revoked or amended.
Section 1, 3ule R o t!e same 1ook, in turn, provides t!at ;recruitment and placement
activities o agents or representatives appointed by a licensee, w!ose appointments were
not aut!oriLed by t!e "dministration s!all likewise constitute illegal recruitment.;
%!e Certiication rom t!e P9K" t!at it ;!as not received nor acknowledged t!e
representation o ?s. =utierreL; establis!es t!at t!e appointment o appellant by
Seraudin as a representative or agent was not aut!oriLed by t!e P9K". It may be true
t!at t!e P9K" received rom Seraudin a revocation o appellantHs appointment, but still is
o no conse.uence since Seraudin in t!e irst place did not submit !er appointment to t!e
P9K", and so t!e P9K" !as not!ing to approve.
"s ound by t!e trial court t!e evidence on record, notably appellantHs own version,
indicates t!at s!e was running !er own labor recruitment business.
1@). P(-,)( vs C*-9#'.3
F!%&s: 1ulu C!owdury was c!arged wit! t!e crime o illegal recruitment in large scale by
recruiting Kstrella 1. Calle-a, ?elvin C. ?iranda and "ser S. Sasis or employment in
Sorea. Kvidence s!ows t!at accused Bappellant interviewed private complainant in 199)
at Cratrade2s oice. "t t!at time, !e was an interviewer o Cratrade w!ic! was operating
under temporary aut!ority given by P9K" pending t!e renewal o license. 6e was c!arged
based on t!e act t!at !e was not registered wit! t!e P9K" as employee o Cratrade and
!e is not in !is personal capacity, licensed to recruit overseas workers. %!e complainants
also averred t!at during t!eir applications or employment or abroad, t!e license o
Cratrade was already e+pired. For !is deense C!owdury testiied t!at !e worked as
interviewer at Cratrade rom 199* until 199). 6is primary duty was to interview -ob
applicants or abroad. "s a mere employee, !e only ollowed t!e instructions given by !is
superiors, ?r. Kmmanuel =eslani, t!e agencyHs President and =eneral ?anager, and ?r.
,tkalC!owdury, t!e agencyHs ?anaging /irector.
Iss'(: 8!et!er or not accused#appellant knowingly and intentionally participated in t!e
commission o t!e crime c!arged.
H()#: $o, an employee o a company or corporation engaged in illegal recruitment may
be !eld liable as principal, toget!er wit! !is employer, i it is s!own t!at !e actively and
consciously participated in illegal recruitment. In t!is case, C!owdury merely perormed
!is tasks under t!e supervision o its president and managing director. %!e prosecution
ailed to s!ow t!at t!e accused#appellant is conscious and !as an active participation in
t!e commission o t!e crime o illegal recruitment. ?oreover, accused#appellant was not
aware o CratradeHs ailure to register !is name wit! t!e P9K" and t!e prosecution ailed
to prove t!at !e actively engaged in recruitment despite t!is knowledge. %!e obligation to
register its personnel wit! t!e P9K" belongs to t!e oicers o t!e agency. " mere
employee o t!e agency cannot be e+pected to know t!e legal re.uirements or its
operation. %!e accused#appellant carried out !is duties as interviewer o Cratrade
believing t!at t!e agency was duly licensed by t!e P9K" and !e, in turn, was duly
aut!oriLed by !is agency to deal wit! t!e applicants in its be!al. "ccused#appellant in
act conined !is actions to !is -ob description. 6e merely interviewed t!e applicants and
inormed t!em o t!e re.uirements or deployment but !e never received money rom
t!em. C!owdury did not knowingly and intentionally participated in t!e commission o
illegal recruitment being merely perorming !is task and unaware o illegality o
recruitment.
WWWWIor oral recitation purposesC
%!e elements o illegal recruitment in large scale areD
I1C %!e accused undertook any recruitment activity deined under "rticle 1< IbC or any
pro!ibited practice enumerated under "rticle <) o t!e 5abor Code7
I4C 6e did not !ave t!e license or aut!ority to lawully engage in t!e recruitment and
placement o workers7 and
I<C 6e committed t!e same against t!ree or more persons, individually or as a group.T1(U
%!e last paragrap! o Section 0 o 3epublic "ct I3"C (*)4T19U states w!o s!all be !eld
liable or t!e oense, t!usD
;%!e persons criminally liable or t!e above oenses are t!e principals, accomplices and
accessories. In case o -uridical persons, t!e oicers !aving control, management or
direction o t!eir business s!all be liable.;
%!e 3evised Penal Code w!ic! supplements t!e law on illegal recruitmentT4*U deines w!o
are t!e principals, accomplices and accessories.
%!e principals areD
I1C t!ose w!o take a direct part in t!e e+ecution o t!e act7
I4C t!ose w!o directly orce or induce ot!ers to commit it7 and
I<C t!ose w!o cooperate in t!e commission o t!e oense by anot!er act wit!out w!ic! it
would not !ave been accomplis!ed.
%!e accomplices are t!ose persons w!o may not be considered as principal as deined in
Section 1A o t!e 3evised Penal Code but cooperate in t!e e+ecution o t!e oense by
previous or simultaneous act.
%!e accessories are t!ose w!o, !aving knowledge o t!e commission o t!e crime, and
wit!out !aving participated t!erein, eit!er as principals or accomplices, take part
subse.uent to its commission in any o t!e ollowing mannerD
I1C by proiting t!emselves or assisting t!e oenders to proit by t!e eects o t!e
crime7
I4C by concealing or destroying t!e body o t!e crime, or t!e eects or instruments
t!ereo, in order to prevent its discovery7 and
I<C by !arboring, concealing, or assisting in t!e escape o t!e principal o t!e crime,
provided t!e accessory acts wit! abuse o !is public unctions or w!enever t!e aut!or o
t!e crime is guilty o treason, parricide, murder, or an attempt at t!e lie o t!e c!ie
e+ecutive, or is known to be !abitually guilty o some ot!er crime.
$'.+s#+%&+-" -/ 4-"(3 %)!+4s
11). STOLTENIELSEN v. SULPECIO MEDE6UILLO, $R. G.R. N-. 1FF=><, 1<
$!"'!.3 2@12,
FACTS: Sulpecio ?ede.uillo, Jr. was !ired by Stolt#$ielsen %ransportation =roup, Inc.
IS%=, Inc.C on be!al o its principal C!ung#=ai S!ip ?anagement o Panama ICS?PC or
a period o nine I9C mont!s. For nearly t!ree I<C mont!s o rendering service, ?ede.uillo,
Jr. was ordered by t!e s!ip2s master to disembark t!e vessel and repatriated back to
?anila or no reason or e+planation. ,pon ?ede.uillo, Jr.2s return to ?anila, !e was
transerred to anot!er vessel under t!e same terms and conditions o t!e First Contract.
%!e Second Contract was noted and approved by t!e P!ilippine 9verseas Kmployment
"dministration IP9K"C. 6owever, S%=, Inc. ailed to deploy ?ede.uillo, Jr. wit! t!e
vessel. ?ede.uillo, Jr. iled a complaint against S%=, Inc. and CS?P or illegal dismissal
under t!e irst contract and or ailure to deploy under t!e second contract.
ISSUE: #hethe$ o$ not the non3&eplo'ment o4 Me&e5uillo, /$. 4$ust$ate& the cont$act
bet%een him an& S0G, Inc. an& CSMP
HELDD %!e non#deployment o ?ede.uillo, Jr. did not rustrate t!e contract between !im
and petitioners. %!e P9K" Standard Kmployment Contract provides t!at employment s!all
commence Nupon t!e actual departure o t!e seaarer rom t!e airport or recent
-urisprudence Inovember 4*14C seaport in t!e port o !ire.O
%!e Court ad!eres to t!e terms and conditions o t!e contract so as to credit t!e valid
prior stipulations o t!e parties beore t!e controversy started. Klse, t!e obligatory orce
o every contract will be useless. Parties are bound not only to t!e ulillment o w!at !as
been e+pressly stipulated but also to all t!e conse.uences w!ic!, according to t!eir
nature, may be in keeping wit! good ait!, usage and law.
%!us, even i by t!e standard contract employment commences only Nupon actual
departure o t!e seaarer,O t!is does not mean t!at t!e seaarer !as no remedy in case o
non#deployment wit!out any valid reason. Parent!etically, t!e contention o t!e S%= Inc.
and CS?P o t!e alleged poor perormance o ?ede.uillo, Jr. w!ile on board t!e irst s!ip
?J NStolt "spirationO cannot be sustained to -ustiy t!e non#deployment, or no evidence
to prove t!e same was presented.
%!e Court ruled t!at distinction must be made between t!e perection o t!e employment
contract and t!e commencement o t!e employer#employee relations!ip. %!e perection
o t!e contract, w!ic! in t!is case coincided wit! t!e date o e+ecution t!ereo, occurred
w!en ?ede.uillo, Jr. and S%=, Inc., et al. agreed on t!e ob-ect and t!e cause, as well as
t!e rest o t!e terms and conditions t!erein. %!e commencement o t!e employer#
employee relations!ip, as earlier discussed, would !ave taken place !ad ?ede.uillo, Jr.
been actually deployed rom t!e point o !ire. %!us, even beore t!e start o any
employer#employee relations!ip, contemporaneous wit! t!e perection o t!e employment
contract was t!e birt! o certain rig!ts and obligations, t!e breac! o w!ic! may give rise
to a cause o action against t!e erring party. %!us, i t!e reverse !ad !appened, t!at is
t!e seaarer ailed or reused to be deployed as agreed upon, !e would be liable or
damages.
1607+ Actual &eplo'ment commences emplo'ment8 ho%eve$, the same is not necessa$'
to (ive $ise to the 4ul4ilment o4 obli(ations in a pe$4ecte& cont$act.