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#################################################################################Un
iversity of the PhilippinesCOLLEGE OF LAW LABOR LAW ITFernandez Notes* 1ST Semester,
AY 2008-2009Introduction to Labor LawLABOR: ConceptIn its general sense physical
toil (skilled or unskilled)In its technical sense work force (working or
potential workers)LABOR LAW :Definition1. Justification: Social Justice aim and
reason or justification of labor law, promotion of public welfare.Classification
Labor Standards minimum requirements prescribed by existing laws, rules and
regulations relating to wages, hours of work, cost of living, monetary and welfare
benefits and occupational, safety and health hazardsmaterial or subject to be
processedLabor RelationsRegulates the institutional relationship between workers
organized into a union and employersDefines status, rights and duties that govern
interactions of employers and employeesW elfare LegislationDesigned to take care of
contingencies that may affect the workersParticular kind of protection or benefits
for furtherance of social welfare and justice.BasisEconomic Basisinherent
inequality between labor and capitalAzucena: 7 Principles underlying codeLabor
relations to be responsive and responsible for national developmentLabor laws to
substitute rationality for controntationLabor justice as expeditious without
sacrificing due processManpower development as a major dimension of labor policy
Global labor marketLabor laws for adequate resources and capable machinery to
sustain implementationPolicy making through tripartism of government, laborer and
employerLegal Basis1987 constitution, * 1935 Const Art XIV, Section 6, * 1973 Const
Art II Sec 6, 9PNB v. CabansagFlorence Cabansag was hired by the PNB Branch in
Singapore and was terminated (even if her good work was commended) allegedly due to
cost cutting then because of the need for a Chinese speaking employee. She was not
properly notified by her boss and she was not given a chance to be heard. There was
no due process. PNB should have 1) apprised her of her particular act or omission
2) inform her of their decision to dismiss her. 282, 283, 284 valid grounds of
dismissal. She did not commit any offenses or omissions under 282, the business was
not closing (283) and she did not have any diseases (284). She was simple forced to
resign and was illegally dismissed. contract of employment is imbued with public
interest and cannot insinuate themselves from impact of labor lawsi.a. Right to
Security of TenureCasimiro v. Stern Real Estate, IncStern owns Rembrandt Hotel and
due to losses, they offered a Special Separation Program which the petitioners did
not avail of. Rembrandt, the court held, gave valid notifications and proved their
reason for retrenching (283) due to major business losses. Quitclaims were also
voluntarily signed by Casimiro and others after receiving their pay and are thus
valid and binding on them. There is no illegal dismissal. Retrenchment termination
of employment initiated by employer without fault or prejudice to the employees
resorted to by management in times of business recession It is not the function
of law to compel a business to operate at a continuing loss simply because it has
to maintain its workers in employment. Such an act would be tantamount to taking of
property without due process of lawCivil CodeInnodata Philippines, Inc. v.
Quejada-LopezQuejada and Natividad were employed as formatters for Innodata under a
supposed fixed-term employment. They were separated from the company and therefore
they files a case for illegal dismissal. The court ruled that the fixed-term
employment agreement fixed not only a one year term but also a 3 month probationary
period where the employer can pre terminate the employment therefore making it
illegal.blocking the acquisition of tenure by employees deserve to be struck down
for being contrary to law, morals, good customs, public order and public policy.
Labor Code and Omnibus Rules Implementing to Labor CodeInternational Conventions,
RecommendationsInternational Labor Organization> tripartism: government
representatives, employees, workers organization. Philippines is an ILO member
Universal Declaration of Human Rights (23, 24, 25, Covenant on Economic, Social and

Cultural Rights)International School Alliance of Educators v. QuisumbingLocal Hires


of the ISchool claim discrimination in pay as compared to foreign hires (those who
are hired from abroad to do expatriate teaching here) who earn 25% more than them
and are entitled to benefits such as housing. The court ruled that salaries could
not be used to entice foreign hires. (but lodging is okay) public policy abhors
inequality and discrimination. Foreign hires do not perform 25% more efficiently
and thus should be paid equal pay for work of equal value.The Labor Code of the
PhilippinesBrief History: began in 1968 under Blas Ople to address needs of
economic development and justice.Name of Decree (Art 1) Labor Code of the
Philippines PD 442Date of Effectivity (2) 6 mos. After promulgation which was on
(May 1, 1974) therefore, Nov 1, 1974Declaration of Basic Policy (3) Full
employment, Equal work opportunity, Security of Tenure, etc.Construction in Favor
of Labor (4) in favor of safety and decent living of the laborer however, it must
be noted that the management also has rights (management prerogatives)Reyes v. CA
Dr. Pedrito demanded PhilMalay for separation payment similar to its employees as
well as for underpayment of salary, a new car, life insurance policy, office
rentals and legal service costs he incurred. The LA claimed that the retrenchment
of PhilM is valid. NLRC reduced the awards. His appeal was dismissed by CA for
failure to attach position paper, decision by Labor Arbiter and Memorandul of
Appeal.Leniency should be applied. If the rules of procedure are applied very
rigidly, justice would be defeated. Labor laws mandate speedy disposition of cases
without sacrificing fundamental requisites of due processSalinas Jr. v.NLRC
Constant renewals by AG&P of Salinas etc. contracts as cement workers etc. as
project based employees but did not comply with department order which requires
them to submit to DOLE the notice and reason of termination upon the end of the
project. It would be prejudicial and would run counter to the constitutional
mandate on social justice and protection to labor Technical Rules not binding
(221) Commission and its members and the Labor Arbiters shall use every and all
reasonable means to ascertain the facts in each case speedily and objectively and
without regard to technicalities of law as well as due process.Huntington Steel
Products, Inc. v. NLRCComplaint for illegal dismissal by Orbase and 11 other
employees against Huntington Steel Products was dismissed due to the lack of a
certificate of non-forum shopping required by Circular No. 28-91 with the
petitioners commenting that the complaint was a mere scrap of paper. Labor cases
must be supported by evidence. Disregarding technical rules of procedure will not
sacrifice the fundamental requisites of due process ALSO the complaint form
supplied by the LA were just filled up by them and therefore, respondents should
not be faulted.CA ruled that technical rules shall not be applied strictly if the
result would be detrimental to the working man REMEDIED BY A POSITION PAPER.
Industrial Timber Corp v. Ababon (2 petitions are consolidated as one)Industrial
Plywood Group Corporation did not continue to lease the plant to ITC (herein
petitioner) which led to ITC to close its operations. ITC posted a final notice of
closure of business and asked its workers to collect the benefits due them. Ababon
is one of the 387 workers laid off due to the plants shutdown and thus he and 96
of his co-workers filed a case of illegal dismissal. LA required (1/2 mo)
separation pay, reinstatement etc. ITC filed with the NLRC who reinstated the LAs
decision. Ababon filed with the SC and was referred to the CA which ruled that
retrenchment was valid because of proof on non-renewal of license HOW EVER, ITC did
not properly notify its employees (1 month before) 50k as damages was awarded.ITC:
they were 3 days late in filing the MoR and thus, CA cannot validly overturn NLRCs
decision. Apply liberality in applying technical rules. Substantial Justice is
best served by allowing the petition for relief despite the procedural defect of
PETITIONERS of filing the motion for reconsideration 3 days late INJUSTICE TO
EMPLOYER.Art 218 (c), LC: it is within power of commission to correct, amend, or
waive any error, defect or irregularity whether in substance or in formRules and
Regulations or Limitation (5)Department of Labor and Employment shall promulgate
necessary regulations which shall have the force of law and is entitled to great
respect + ANY OTHER (TO ADMINISTER, ENFORCE AND IMPLEMENT)EXCEPT if its in the
excess of authorityKapisanan ng mga manggagawang Pinagyakap v. NLRCThe negotiated

daily wage increase of P. 1.33 could be credited to and deducted from the
P60/monthly living allowance which in effect, nullified the P 1. 33 increase. The
LA ruled according to Sec 1(k) of the Labor departments rules implementing PD 1123
(made to protect wages against inflation) which exempts those
that have granted the 60-peso monthly allowance from paying for anything extra.
ALL DOUBTS SHALL BE RESOLVED IN FAVOR OF LABOR.In the Philippine Apparel case, this
paragraph was already declared void for contravening the statutory authority
granted to the secretary of Labor., Due to facts as well as the ruling with regard
to dismissal for lack to serve a Memorandum of Agreement as being inconsistent with
the requirement of social justice to terminate employee of his employment on a mere
technicality, the petition is grantedApplicability (6) All rights and benefits
granted to workers under this Code shall, except as may otherwise be provided
herein, apply alike to all workers, whether agricultural or nonagricultural.276:
Government employees. The terms and conditions of employment of all government
employeesshall be governed by the Civil Service Law, rules and
regulationsHowever, there shall be no reduction of benefits and other terms and
conditions of employment being enjoyed by them atthe time of the adoption of this
Code.Consti Art IX- B Sec (2) 1: The civil service embraces all branches,
subdivisions, instrumentalities, and agencies of the Government, including
government-owned or controlled corporations with original charters. PNOC Energy
Development Corp v. NLRCDanilo Mercado was dismissed for alleged acts of dishonesty
(negotiating cost then pocketing the money)1. The decision was made when the 1987
constitution was in effect and not the 1973 constitution therefore it is already
the Labor Code and not the Civil Service Decree that it in effect. The test is the
manner of its creation, those under the civil service law, CS. Those created under
the General Corporation Law, are under the Labor Code. ALSO case arose in 1973 but
it was promulgated on July 1987, therefore under the 1987 constitution.2. Also,
there was no evidence of the alleged violations, in fact the testimony as well as
the explanations provided by Mercados affidavit is satisfactory for the Labor
Arbiter.Enforcement and sanctions217 a Labor Arbiters Jurisdiction128 Visitorial
and enforcement power.129 Recovery of wages, simple money claims and other
benefits.288 Penalties.289 W ho are liable when committed by other than natural
person.290 Offenses.291 Money claims292 Institution of Money claimsArt III
Constitution Sec 11 Free access to the courts and quasi-judicial bodies and
adequate legal assistance shall not be denied to any person by reason of poverty.
16 All persons shall have the right to a speedy disposition of their cases before
all judicial, quasi-judicial, or administrative bodies.W ork RelationshipDefinition
97 a: person- individual, partner etcB: employer person acting directly or
indirectly in interest of employer167 c: employee employed by employerF: employer
employing employeeG: employee compulsorily covered by GSISH: person - any
individual, partnership, firm, association, trust, corporation or legal
representative thereof. 212 e: employer acting in the interest of employerF:
employee: in employ of employer even those whose work has ceased given unfair labor
practices.Employer Employee relationshipFactors/ TestsFour Fold Test of ER-EE
relationshipSelection and engagement of EEPayment of W ages by ERPower of Dismissal
is with ERControl Test: is the end achieved controlled by ER?;
manner or means it is achieved controlled by ER?Television and Prod. Exponents Inc.
v. RC ServanaRoberto Servana served as a security guard for TAPE and was terminated
due to TAPEs decision to hire a professional security agency. TAPE says that
Servana is an independent contractor, a talent and part of the support group. His
termination, TAPE said, was due to redundancy. The court ruled that there is, in
fact a ER-EE relationship because the four-fold test and the ID given as well as
the bundy cards of Servana serve as proof of the employer employee relationship of
TAPE and Servana (Servana was hired, paid by and controlled by respondents)
( (even if program employee, already regularized, more than 1 yr, 281). Nominal
damages of 10k. POLICY INSTRUCTION 40. SHOULD BE FILED W ITH BROADCAST MEDIA
COUNCIL. Chavez v. NLRCPedro Chavez is a truck driver for Supreme Packaging Inc.
since 1984. In 1992, he wanted to be regularized to get the benefits of the regular
employees. In 1995, this not being granted, he filed complaint for regularization

but he was terminated (due to gross negligence in proper maintenance of truck,


wanting to sever ties with the company etc) before the case was heard. ER-EE
relationship is present due to the four fold test. (Same work, paid by SPI,
dismissed by SPI, his truck is owned by SPI and his truck routes are controlled by
SPI.) That he was paid on a per trip basis is not significant. Reinstated to his
work with full backwages, 279. However, separation pay instead of reinstatement is
more equitable in this case. NOT INDEPENDENT CONTRACTOR BECAUSE NOT ENOUGH CAPITAL
Vicente Sy v. CAJamie Sahot was with SB Trucking (owned by Sy) since 1965. In 1994,
Sahot strated to have thigh pains and filed for leave. He was later dismissed for
failure to go to work. He found out later that his SSS premiums were not paid by
employers. Court found that an ER-EE relationship is present between SBT and Sahot
and he was not, infact, an industrial partner (he did not receive any share of the
division of profits and he was not shown to be part of any managerial duty; he was
in fact content to follow the instructions of petitioners during those years).
Dismissal was not valid and it was without notice (he was simply threatened then
dismissed). Even if he was offered a job which is less strenuous is of no matter;
also, being terminated of a disease under 284 requires a medical certificate by the
employer which was not shown in the case. He is entitled to separation pay.
Piercing the Corporate veil See through protective shroud to distinguish a
corporaion from a seemingly separate one.Pamplona Plantation Co., Inc. v. Tinghil
PPCI took over the operations of Hacienda Pamplona but did not absorb all of them.
CA ruled that Pamplona illegally dismissed its employees. Pamplona claimed that no
relationship was formed between them and that the non-joinder of PAMPLONA
PLANTATION LEISURE CORP in the complaint warrants a dismissal and that there is no
ER-EE between them. The court ruled that there is a relationship (ER-EE) since they
were hired, being paid under the corporate control of Jose Luis Bondoc, the
managing director of the company (2 separate entities as far as workers are
concerned; devious), also, there should be no need to implead PPLC since
petitioner company and Leisure Corporation are one and the same entity
(Corporation has same incorporators and are under one management)Independent
Contractor and Labor-Only ContractorIndependent contractor: implementing rules
section 8own account and responsibility and capitalfree from control of performance
but toward same resultLabor only contractorno substantial capital or toolsworkers
recruited perform activities related (necessary and desirable) to the principal
business of ERArt. 106. Contractor or subcontractor. W henever an employer enters
into a contract with another person for the performance of the formers work, the
employees of the contractor and of the latters subcontractorIn the event that the
contractor or subcontractor fails to pay the wages of his employees in accordance
with this Code, the employer shall be jointly and severally liable with his
contractor or subcontractor to such employees to the extent of the work performed
under the contract There is "labor-only" contracting where the person supplying
workers to an employer does not have substantial capital or investment in the form
of tools, equipment, machineries, work premises, among others, and the workers
recruited and placed by such person are performing activities which are directly
related to the principal business of such employer. In such cases, the person or
intermediary shall be considered merely as an agent of the employer who shall be
responsible to the workers in the same manner and extent as if the latter were
directly employed by him.Art. 107. Indirect employer. The provisions of the
immediately preceding article shall likewise apply to any person, partnership,
association or corporation which, not being an employer, contracts with an
independent contractor for the performance of any work, task, job or project.Art.
108. Posting of bond. An employer or indirect employer may require the contractor
or subcontractor to furnish a bond equal to the cost of labor under contract, on
condition that the bond will answer for the wages due the employees should the
contractor or subcontractor, as the case may be, fail to pay the same.Art. 109.
Solidary liability. The provisions of existing laws to the contrary
notwithstanding, every employer or indirect employer shall be held responsible with
his contractor or subcontractor for any violation of any provision of this Code.
For purposes of determining the extent of their civil liability under this Chapter,

they shall be considered as direct employers.D.O. No. 10, Rule VIII-A Bk III, 1997
(Rules implementing above)D.O. No. 3, S. May 2001 (Revoked above D.O.) Labor only
Contracting prohibited, non-impairment of existing contractsD.O. No. 14, September
18, 2001, Section 8: Re employment of security guards and similar personnel.
Security service contractor as the employer of the security guards. Not company
assigned to them etcPhil. Bank of Communications v. NLRCPBC and CESI (Corporate
Executive Search Inc) entered into an agreement for the hiring of 11 mesengers.
Orpiada and the others were relieved of their jobs because of the eventual
termination of PBC and CESIs agreement. The court ruled
that although Orpiada was assigned to and not chosen by bank the fact remains that
PBC agreed. Also, control as to what they are to do etc. is with bank. The payment
and the power to dismiss was with CESI. Having completed more than 1 yr (16 mos) of
service Orpiada is considered to be a regular employee (Art 281, LC). CESI is not a
parcel delivery company it is a recruitment corporation who, in this case, made a
letter agreement with PBC for only the temporary services of the msgrs. Temporary
service leads to the presumption to labor-only contracting. CESI is then rendered
as a mere agent. PBC to pay Orpiada because he is liable as though it directly
employed him but can sue CESI of reimbursementAlexander Vinoya v. NLRCAlexander
Vinoya worked in Regent Food as a sales rep. booking sales in groceries, getting
payment etc. He was required to post a monthly bond of 200 to ensure compliance
with his duties. He was then moved to PMCI then reassigned to RFC and was soon
terminated because of the expiration of the contract of service between RFC and
PMCI. Court said that PMCI is engaged in labor-only contracting not having
substantial capital and investment and did not carry on an independent business OR
own manner of undertaking of its contract. The Court cited Neri v. NLRC saying that
in the case, BCC was found to be an independent contractor because (4 fold test)
control of employees is with BCC, employer is concerned only with end result BCC
had the power to reassign the employees, deployment of which is not subject to the
approval of the employer. BCC is paid with lump sumIn Vinoyas case ( PMCI did not
have substantial capital or investment in form of tools. Authorized capital stock
of 1M but only 75k paid in capital nor did they carry on an independent business
nor did it undertake the performance of its contract according to its own manner or
method.PMCI was not engaged to perform a specific and special job or servicethus,
satisfying the application of the 4 fold test. Issuance if ID is also proof of
Vinoyas employment with RFC prior to his reassignment to PMCI and ALSO there was
no sufficient notice. Reinstatement and Backwages.PAL v. E. Ligan, et al.Synergy
undertook loading and unloading of baggage for PAL. PAL soon cut ties with Synergy
and thus, E. Ligan etc. were dismissed. Applying the 4 fold test, it is shown that
respondent performed desirable and necessary duties related to the main business of
PAL and that the equipment used was owned by PAL. Also, Synergy mentioned but did
not show that it had substantial capital and as to how much that capital is. Also
according to D.O. 18-02, labor-only contracting is present when one of these
elements are present:The contractor does not have substantial capitalContractor
does not exercise the right to control the performance of the work of the employee.
Synergy was not shown to have substantial capital and it was PAL who had control
over the schedule and the tasks of the employees (dependent on the frequency of
plane arrivals) Also, respondents and PALs employees were doing the same kind of
work therefore, there is labor only contracting. Synergy, being categorized as a
mere agent and respondents having acquired security of tenure are therefore
entitled to reinstatement or separation pay, wage differential and backwages from
PAL.Mandaue Galleon Trade Inc. v. V. AndalesVicente Andales is one of the 260
workers laid off due to the termination of their contracts by MGTI. MGTI claims
that due to the dwindling demand for rattan products, they retrenched some of their
employees and the 260 envied the substantial separation pay of the regular
employees. The court held that the 260 independent contractors did not have
substantial capital and tools and that their work is directly related to MGTIs
business. This proves a labor only contraction and thus, equivalent to declaring
that there is an ER-EE relationship between the principal and the employees of the
supposed contractor. They are entitled to separation pay of month for every year

of service. EXECPTIONS to the rule- W hen the findings are grounded entirely on
speculation- W hen the inference made is manifestly mistaken- W here there is grave
abuse of discretion- Judgment is made from misapprehension of facts- Findings of
fact are conflicting- (in making its findings) CA went beyond issue- Findings are
contrary to the trial court- Conclusions without citation- Facts set forth not
disputed by respondent - Findings premised on absence of evidence- CA overlooked
relevant facts disputed by parties.* The first 2 par. Of article 106 set the general
rule that a principal is permitted by law to engage the services of a contractor
for the performance of a particular job, but the principal, nevertheless, becomes
SOLIDARILY liable with the contractor. Registration of ContractorsD.O. 18-03 (1112: registration requirements, submission of annual report (SSS, GSIS, HDMF,
PhilHealth)Effect of non compliance D.O. 18-02, Sec 11, 3rd par: failure to
register gives rise to presumption of labor-only contractingSandoval Shipyards v.
Pepito et al., The Natl Fed of Labor NFL filed a petition for certification
election with DOLE alleging that its members are already regular employees of SSI
and were dismissed due tot heir participation in the strike. Finding an EE-EE to
exist, the Med Arbiter granted the petition. Undersecretary Laguesma reversed
saying that there is a valid subcontracting agreement between the parties. Illegal
dismissal cases were filed and the LA and NLRC upheld Laguesma saying that there
was illegal dismissal but that they are not employees of SSI. CA reversed the
decision and said that SSI is their direct employer. On the basis that:A) The socalled subcontractors do not even have a license to engage in subcontracting
(presumption of LO)B) Salaries are paid by SSIC) They were hired by SSI and placed
under their respective subcontractorsD) Tools used are owned by SSI. EVIDENCE OF
LABOR ONLY CONTRACTION.Liability of Indirect EmployerSec 7 D.O. No 18-02 (109)
indirect employers are solidarily liable with principal.Eparwa Security and
Janitorial Services Inc. v. Liceo de Cagayan UniversityEparwa and LDCU entered into
a contract for services of 11 security guards. Security guards filed a claim for
underpayment of wages (leave, overtime, holiday, 13th month etc.) against both
entities.LDCU made a claim for reimbursement from Eparwa and was not approved by
NLRC.Both companies appealed. NLRC held that although both were solidarily liable
(Art 109): Eparwa as employer and LDCU as agent, It is Eparwa that may claim
reimbursement from LDCU in lieu of allowing an adjustment of the contract (since
their contract expired, the payment needed by Eparwa cannot be amended
anymore).LDCU cannot ask for reimbursement. If contractor does not pay overtime/
busts union, to hold principal liable will be absurd and unfair. Based on Eagle
Security Agency CaseLabor Standards LawEmployment Policies, Recruitment and
Placement of W orkers, and AgenciesReference Arts 12-39, Local Employment,
Overseas Employment, POEA RulesEmployment Policies: 12 a-f, Constitution, Art II,
Sec. 9, RA 8042 Sec 2,4,5* * Art. 12. Statement of objectives. It is the policy of
the State:a. To promote and maintain a state of full employment through improved
manpower training,allocation and utilization;b. To protect every citizen desiring
to work locally or overseas by securing for him the bestpossible terms and
conditions of employment;c. To facilitate a free choice of available employment by
persons seeking work in conformitywith the national interest;d. To facilitate and
regulate the movement of workers in conformity with the national interest;e. To
regulate the employment of aliens, including the establishment of a registration
and/orwork permit system;f. To strengthen the network of public employment offices
and rationalize the participation ofthe private sector in the recruitment and
placement of workers, locally and overseas, toserve national development
objectives;g. To insure careful selection of Filipino workers for overseas
employment in order to protectthe good name of the Philippines abroad.RA 8042,
Migrant W orkers and Overseas Filipino Act of 1995 declares that the state does not
promote overseas employment as a means to sustain economic growth, instead THE
STATE SHALL CONTINUOUSLY CREATE LOCAL EMPLOYMENT OPPORTUNITIES AND PROMOTE THE
EQUITABLE DISTRIBUTION OF W EALTH AND THE BENEFITS OF DEVELOPMENT. It requires a
certain guarantee of protection for the overseas worker.Section 9. The State shall
promote a just and dynamic social order that will ensure the prosperity and
independence of the nation and free the people from poverty through policies that

provide adequate social services, promote full employment, a rising standard of


living, and an improved quality of life for all. Section 3. The State shall afford
full protection to labor, local and overseas, organized and unorganized, and
promote full employment and equality of employment opportunities for all. It shall
guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane
conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by
law. The State shall promote the principle of shared responsibility between workers
and employers and the preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual compliance therewith to
foster industrial peace. The State shall regulate the relations between workers
and employers, recognizing the right of labor to its just share in the fruits of
production and the right of enterprises to reasonable returns to investments, and
to expansion and growth.SEC. 2. DECLARATION OF POLICIES--(a) In the pursuit of an
independent foreign policy and while considering national sovereignty, territorial
integrity, national interest and the right to self-determination paramount in its
relations with other states, the State shall, at all times, uphold the dignity of
its citizens whether in country or overseas, in general, and Filipino migrant
workers, in particular.(b) The State shall afford full protection to labor, local
and overseas, organized and unorganized, and promote full employment and equality
of employment opportunities for all. Towards this end, the State shall provide
adequate and timely social, economic and legal services to Filipino migrant
workers.(c) W hile recognizing the significant contribution of Filipino migrant
workers to the national economy through their foreign exchange remittances, the
State does not promote overseas employment as a means to sustain economic growth
and achieve national development. The existence of the overseas employment program
rests solely on the assurance that the dignity and fundamental human rights and
freedoms of the Filipino citizens shall not, at any time, be compromised or
violated. The State, therefore, shall continuously create local employment
opportunities and promote the equitable distribution of wealth and the benefits of
development.(d) The State affirms the fundamental equality before the law of women
and men and the significant role of women in nation-building. Recognizing the
contribution of overseas migrant women workers and their particular
vulnerabilities, the State shall apply gender sensitive criteria in the formulation
and implementation of policies and programs affecting migrant workers and the
composition of bodies tasked for the welfare of migrant workers.(e) Free access to
the courts and quasi-judicial bodies and adequate legal assistance shall not be
denied to any persons by reason of poverty. In this regard, it is imperative that
an effective mechanism be instituted to ensure that the rights and interest of
distressed overseas Filipinos, in general, and Filipino migrant workers, in
particular, documented or undocumented, are adequately protected and safeguarded.
(f) The right of Filipino migrant workers and all overseas Filipinos to participate
in the democratic decision-making processes of the State and to be represented in
institutions relevant to overseas employment is recognized and guaranteed.(g) The
State recognizes that the ultimate protection to all migrant workers is the
possession of skills. Pursuant to this and as soon as practicable, the government
shall deploy and/or allow the deployment only to skilled Filipino workers.(h) Nongovernmental organizations, duly recognized as legitimate, are partners of the
State in the protection of Filipino migrant workers and in the promotion of their
welfare, the State shall cooperate with them in a spirit of trust and mutual
respect.(I) Government fees and other administrative costs of recruitment,
introduction, placement and assistance to migrant workers shall be rendered free
without prejudice to the provision of Section 36 hereof.Nonetheless, the deployment
of Filipino overseas workers, whether land-based or sea-based by local service
contractors and manning agencies employing them shall be encouraged. Appropriate
incentives may be extended to them.SEC. 3. DEFINITIONS. - For purposes of this Act:
(a) "Migrant worker" refers to a person who is to be engaged, is engaged or has

been engaged in a renumerated activity in a state of which he or she is not a legal


resident to be used interchangeably with overseas Filipino worker.(b) "Gendersensitivity" shall mean cognizance of the inequalities and inequities prevalent in
society between women and men and a commitment to address issues with concern for
the respective interests of the sexes.(c) "Overseas Filipinos" refers to dependents
of migrant workers and other Filipino nationals abroad who are in distress as
mentioned in Sections 24 and 26 of this Act.I. DEPLOYMENTSEC. 4. Deployment of
Migrant W orkers - The State shall deploy overseas Filipino workers only in
countries where the rights of Filipino migrant workers are protected. The
government recognizes any of the following as guarantee on the part of the
receiving country for the protection and the rights of overseas Filipino workers:
(a) It has existing labor and social laws protecting the rights of migrant workers;
(b) It is a signatory to multilateral conventions, declaration or resolutions
relating to the protection of migrant workers;(c) It has concluded a bilateral
agreement or arrangement with the government protecting the rights of overseas
Filipino workers; and(d) It is taking positive, concrete measures to protect the
rights of migrant workers.SEC. 5. TERMINATION OR BAN ON DEPLOYMENT Notwithstanding the provisions of Section 4 hereof, the government, in pursuit of
the national interest or when public welfare so requires, may, at any time,
terminate or impose a ban on the deployment of migrant workers.Employment Agencies
b.1. Private Sector- Agencies and EntitiesPartiesW orker13 a: W orker means any
member of the labor force, whether employed or unemployed.RA 8042, Sec 3 (a) <the
countries they are deployed to has existing labor and social laws protecting the
rights of the migrant workers.Private employment agencyArt. 13. Definitions.c.
"Private fee-charging employment agency" means any person or entity engaged in
recruitment and placement of workers for a fee which is charged, directly or
indirectly, from the workers or employers or both.d. "License" means a document
issued by the Department of Labor authorizing a person or entity to operate a
private employment agency.Art. 12. Statement of objectives. It is the policy of the
State:f. To strengthen the network of public employment offices and rationalize the
participation of the private sector in the recruitment and placement of workers,
locally and overseas, to serve national development objectives;Art. 14. Employment
promotion. The Secretary of Labor shall have the power and authority: a. To
organize and establish new employment offices in addition to the existing
employment offices under the Department of Labor as the need arises;Private
recruitment entityArt. 13. Definitions.e. "Private recruitment entity" means any
person or association engaged in the recruitment and placement of workers, locally
or overseas, without charging, directly or indirectly, any fee from the workers or
employers.f. "Authority" means a document issued by the Department of Labor
authorizing a person or association to engage in recruitment and placement
activities as a private recruitment entity.Recruitment and PlacementLocal
EmploymentArt. 13. Definitions.b. "Recruitment and placement" refers to any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring
workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not: Provided, That any person
or entity which, in any manner, offers or promises for a fee, employment to two or
more persons shall be deemed engaged in recruitment and placement.* * * W ON for
profit, IF ANY PERSON OFFERS OF PROMISES A FEE EMPLOYMENT TO 2 OR MORE PERSONS
SHALL BE DEEMED ENGAGED IN RECRUITMENT AND PLACEMENT.Overseas employment Sec 6,
RA 8042Illegal recruitment is deemed committed by a syndicate carried out by a
group of three (3) or more persons conspiring or confederating with one another. It
is deemed committed in large scale if committed against three (3) or more persons
individually or as a group.The persons criminally liable for the above offenses are
the principals, accomplices and accessories. In case of juridical persons, the
officers having control, management or direction of their business shall be liable.
Allowed and Protected EntititesAllowed private agencies and entitiesArt. 12.
Statement of objectives. It is the policy of the State:f. To strengthen the network
of public employment offices and rationalize the participation of the private
sector in the recruitment and placement of workers, locally and overseas, to serve

national development objectives;Art. 16. Private recruitment. Except as provided in


Chapter II of this Title, no person or entity other than the public employment
offices, shall engage in the recruitment and placement of workers.Art. 25. Private
sector participation in the recruitment and placement of workers.Pursuant to
national development objectives and in order to harness and maximize the use of
private sector resources and initiative in the development and implementation of a
Comprehensive employment program, the private employment sector shall participate
in the recruitment and placement of workers, locally and overseas, under such
guidelines, rules and regulations as may be issued by the Secretary of Labor.
Prohibited business agencies and entities.Art. 26. Travel agencies prohibited to
recruit. Travel agencies and sales agencies of airline companies are prohibited
from engaging in the business of recruitment and placement of workers for overseas
employment whether for profit or not.Exceptions: 18, 2nd sentence (See below)ii.1.
Direct Hiring - Art. 18. Ban on direct-hiring. No employer may hire a Filipino
worker for overseas employment except through the Boards and entities authorized by
the Secretary of Labor. Direct-hiring by members of the diplomatic corps,
international organizations and such other employers as may be allowed by the
Secretary of Labor is exempted from this provision.ii.2. Travel Agencies
Art. 26. Travel agencies prohibited to recruit. Travel agencies and sales
agencies of airline companies are prohibited from engaging in the business of
recruitment and placement of workers for overseas employment whether for profit or
not.POEA rules II, Sec 2Section 2. Disqualification. The following are not
qualified to engage in the business of recruitmentand placement of Filipino workers
overseas:a. Travel agencies and sales agencies of airline companies;b. Officers or
members of the Board of any corporation engaged in the business of a travel agency;
c. Corporations, when any of its officers is also an officer of a corp. engaged in
the business of a travel agency;d. Persons, partnerships or corporations which have
derogatory records, such as but not limited to the following:1) Those certified to
have derogatory record 2) Those with prima facie finding of guilt for illegal
recruitment or other related cases exists;3) Those convicted for illegal
recruitment or other related cases and/or crimes involving moral turpitude4) Those
agencies whose licenses have been previously revoked or cancelled (violation of RA
8042, PD 442) f. Persons or partners, officers and Directors of corporations whose
licenses have been previously cancelled or revoked for violation of recruitment
laws.Hornales v. NLRCMario Hornales filed a complaint for nonpayment of wages and
recovery of damages against JEAC (run by Cayanan). JEAC sent Hornales to Singapore
to work and upon meeting Mr. Victor Lim, he was assigned as a fisherman. There,
Hornales was subjected to maltreatment, lack of food and water, and 22 hours/day
work for no pay. He managed to return to the Philippines and demanded for the
rightful payment of his wages. JEAC simply asked him of his passport and gave him
500 pesos. The issue is W on JEAC is responsible for petitioners recruitment and
deployment to Singapore. NLRCs conclusions (overturning POEAs findings) that JEAC
was a mere travel agency and Hornales is a tourist is unfounded since even
respondents claim they are a licensed recruitment agency. Also the PNB checks and
the letter agreements issued by JEAC to Hornales and Lim respectively show a
quantum of evidence that proves JEACs connivance with the foreign employer (Step
Up). JEAC and its surety are jointly and severally liable to Hornales. (under Rule
5 Book 1 Sec 2 e or the IRR: requires a private employment agency to assume all
responsibilities for the implementation of the contract of employment of an
overseas worker; under book 2 Rule 2 Section 3 of the POEA rules and regulations,
private employment agency shall assume joint and solidary liability with the
implementation of a contract) POEA decision reinstated (but minus 16,000 paid by
JEAC for Hornales travel)Government Techniques of Regulation Private Recruitment
Licensing: Citizenship 27: for permit to participate in recruitment and placement
of workers (local and overseas) i. Filipino Citizensii. Corp or partnerships at
least 75% of the authorized and voting capital stock of which is owned and
controlled by Filipino Citizens.POEA Rules Part II, Rule I, Sec 1 (a)Section 1.
Requirements Qualifications. Only those who possess the following qualifications
may be permitted toengage in the business of recruitment and placement of Filipino

workers:a. Filipino citizens, partnerships or corporations at least seventy five


percent (75%) of the authorized capital stock of which is owned and controlled by
Filipino citizens;Capitalization 28: substantial capitalization as determined by
the secretary of labor. Required for all applicants for authority to hire or
renewal of license to recruit.POEA Rules Part II, Rule I, Sec 1 (b)b. A minimum
capitalization of Two Million Pesos (P2,000,000.00) in case of a single
proprietorship or partnership and a minimum paid-up capital of Two Million Pesos
(P2,000,000.00) in case of a corporation; Provided that those with existing
licenses shall, within four years from effectivity hereof, increase their
capitalization or paid up capital, as the case may be, to Two Million Pesos
(P2,000,000.00) at the rate of Two Hundred Fifty Thousand Pesos (P250,000.00) every
year.DurationPOEA Rules Part II, Rule II, Sec 5, 6Section 5. Provisional License.
Applicants for new license shall be issued a provisional license which shall be
valid for a limited period of one (1) year within which the applicant should be
able to comply with its undertaking to deploy 100 workers to its new principal. The
license of a complying agency shall be upgraded to a full license entitling them to
another three years of operation. Non-complying agencies will be notified of the
expiration of their license. Section 6. Validity of the License. Except in case of
a provisional license, every license shall be valid for four (4) years from the
date of issuance unless sooner cancelled, revoked or suspended for violation of
applicable Philippine law, these rules and other pertinent issuances. Such license
shall be valid only at the place/s stated therein and when used by the licensed
person, partnership or corporation.Non-transferability 29: n-t of license or
authority. W ho may use? Only the person in whose favor it was issued. W here it may
be used? Only at place stated in the license or authority. Prohibition?
Transfer/conveyance to other person or entity. Approval of DOLE required in: 1.
transfer of business address 2. appointment or designation of any
agent/representative 3. establishment of additional offices.POEA Rules Part II,
Rule II, Sec 7Non-Transferability of License. No license shall be transferred,
conveyed or assigned to any person, partnership or corporation. It shall not be
used directly or indirectly by any person, partnership or corporation other than
the one in whose favor it was issued.Registration fees 30Art. 30. Registration
fees. The Secretary of Labor shall promulgate a schedule of fees for the
registration of all applicants for license or authority.POEA Rules Part II, Rule
II, Sec 4: Payment of Fees and Posting of Bonds.Bonds 31Art. 31. Bonds. All
applicants for license or authority shall post such cash and surety bonds as
determined by the Secretary of Labor to guarantee compliance with prescribed
recruitment procedures, rules and regulations, and terms and conditions of
employment as may be appropriate.W orkers Fees (Placement Fees) 32Art. 32. Fees
to be paid by workers. Any person applying with a private fee-charging employment
agency for employment assistance shall not be charged any fee until he has obtained
employment through its efforts or has actually commenced employment. Such fee shall
be always covered with the appropriate receipt clearly showing the amount paid. The
Secretary of Labor shall promulgate a schedule of allowable fees.POEA Rules Part
II, Rule V, Sec 3Section 3. Fees/Costs Chargeable to the W orkers. Except where the
prevailing system in the country where the worker is to be deployed, either by law,
policy or practice, do not allow the charging or collection of placement and
recruitment fee, a landbased agency may charge and collect from its hired workers a
placement fee in an amount equivalent to one month salary, exclusive of
documentation costs. Documentation costs to be paid by the worker shall include,
but not limited to, expenses for the following:a. Passportb. NBI/Police/Barangay
Clearancec. Authenticationd. Birth Certificatee. Medicaref. Trade Test, if
necessaryg. Inoculation, when required by host countryh. Medical Examination feesIn
the event that the recruitment agency agrees to perform documentation services, the
workershall pay only the actual cost of the document which shall be covered by
official receipts.The above-mentioned placement and documentation costs are the
only authorized payments that may be collected from a hired worker. No other
charges in whatever form, manner or purpose, shall be imposed on and be paid by the
worker without prior approval of the POEA. Such fees shall be collected from a

hired worker only after he has obtained employment through the facilities of the
recruitment agency.Reports/ Employment Information 33, 14 d, 34 h, RA 8042 Sec 6h
Art. 14. Employment promotion. The Secretary of Labor shall have the power and
authority:* * * d. To require any person, establishment, organization or institution
to submit such employment information as may be prescribed by the Secretary of
Labor.Art. 33. Reports on employment status. W henever the public interest requires,
the Secretary of Labor may direct all persons or entities within the coverage of
this Title to submit a report on the status of employment, including job vacancies,
details of job requisitions, separation from jobs, wages, other terms and
conditions and other employment data.Art. 34. Prohibited practices. It shall be
unlawful for any individual, entity, licensee, or holder ofauthority:h. To fail to
file reports on the status of employment, placement vacancies, remittance of
foreign exchange earnings, separation from jobs, departures and such other matters
or information as may be required by the Secretary of Labor.Illegal Recruitment
RA 8042 Sec 6-12; 34, 38 a b Art. 38. Illegal recruitment.a. Any recruitment
activities, including the prohibited practices enumerated under Article 34 of this
Code, to be undertaken by non-licensees or non-holders of authority, shall be
deemed illegal and punishable under Article 39 of this Code. The Department of
Labor and Employment or any law enforcement officer may initiate complaints under
this Article.b. Illegal recruitment when committed by a syndicate or in large scale
shall be considered an offense involving economic sabotage and shall be penalized
in accordance with Article 39 hereof. Illegal recruitment is deemed committed by a
syndicate if carried out
by a group of three (3) or more persons conspiring and/or confederating with one
another in carrying out any unlawful or illegal transaction, enterprise or scheme
defined under the first paragraph hereof. Illegal recruitment is deemed committed
in large scale if committed against three (3) or more persons individually or as a
group.REPEALEDc. The Secretary of Labor and Employment or his duly authorized
representatives shall have the power to cause the arrest and detention of such nonlicensee or non-holder of authority if after investigation it is determined that
his activities constitute a danger to national security and public order or will
lead to further exploitation of job-seekers. The Secretaryshall order the search of
the office or premises and seizure of documents, paraphernalia, properties and
other implements used in illegal recruitment activities and the closure of
companies, establishments and entities found to be engaged in the recruitment of
workers for overseas employment, without having been licensed or authorized to do
so.W hen Undertaken by non-licensees, non-holdersProhibited PracticesRodolfo v.
People of the Philippines Rosa Rodolfo approached the complainants and invited them
to apply for overseas employment in Dubai claiming that she knew Florante Hinahon,
the owner of the agency. She collected the processing fees. Their flights were
being constantly rescheduled and as a result of this they asked for their money
back. Aside from the 1k given to Ferre (one of the complainants) no reimbursement
was given. A case of illegal recruitment was filed against Rodolfo who claimed that
she was the one approached by complainants and that she gave the money directly to
Hinahon. The court said that sinceShe had no valid license to recruitRodolfo
undertook activity wherein she passed along or forwarded an applicant for
employment and the court said that it is sufficient that the accused promises or
offers for a fee employment.The court further said that she could have advised them
to pay directly to the agency. CA affirmed. Pp v. JamilosaJamilosa, under the guise
of an FBI agent of the US on a mission recruited a number of people whom he met
on the bus, in malls etc. by saying that his sister is the head nurse in a nursing
home in California and that he has connections in the US embassy being an FBI
agent. The complainants gave him the money (and on a few instances jewelry and 2
bottles of black label) for processing of their application. He even insisted to
meet a few of the complainants family and showed to them the Xerox of the passport
as well as the ticket. The appellant never issued receipts. They were never able to
fly out of the country and upon asking the money from the petitioner, he avoided
them. Bamba, one of the complainants filed an illegal recruitment case against him.
Jamilosa claims that Bamba is an aggrieved lover who is imputing the case against

him because of their separation. Also, he showed certifications signed by


complainants stating that Jamilosa is not an illegal Recruiter.COURT: Petition has
no merit. It is sufficient that the accused promises or offers for a fee employment
to warrant conviction for illegal recruitment. The certifications were signed after
the notice that he was being sued was issued because he did not present them in his
counter affidavit. (graduate of UE dapat mas matalino). Appeal is dismissed.Pp v.
ComilaAida and Comila was looking for workers for a factory in Intaly. Comila
introduced the complainants to Erlinda Ramos, one of the agents of Mrs. Indira
Lastra. After their flights not pushing through, they ask for a refund which was
not given but rather, they were left with an assurance and they were brought to
Lastra who was in Manila City Jail. A case of illegal recruitment was filed against
them. Aida said she never professed she has the authority to recruit and was merely
trying to help the complainants process their papers. As for her husband, he
claimed that the prosecution failed in proving his participation.The court said
that they cannot feign ignorance of the matters that were happening as it was Aida
herself who informed the complainants of the existence of the job orders. There
must be at least a promise or offer of employment from the person posing as a
recruiter whether locally or abroad. Also, they can be charged with estafa and
illegal recruitment given that estafa is malum in se and IL is malum prohibitum.
Appeal of Comilas is dismissed.Salazar v. Achacoso 183 SCRA 145 Due to the refusal
of Salazar to return the PECC card of complainant Rosalie Tesoro, Tesoro filed an
illegal recruitment case against her. The POEA ordered a closure and seizure order
and soon went to her dance studio and confiscated certain costumes. Hortencia
Salazar sent a letter to POEA demanding the return of her seized items and also
filed a suit for prohibition. The sole issue of the case is W ON issuing of a
warrant of arrest against her by the POEA/ Secretary of Labor as well as the
seizing of her dance studio, pursuant to Art 38, LC, is valid. The court held that
38 c is a product of several decrees which were the dying vestiges of an
authoritarian rule. The court further said that the secretary of labor, not being a
judge cannot issue search and arrest warrants. Under the constitution, these can
only be exercised by the courts. The president issuing an arrest of aliens for
deportation is the only exception. 38 c of labor code is UNCONSTITUTITONAL.
(declared Art 38 unconstitutional because of Art III, Section 2. The right of the
people to be secure in their persons, houses, papers, and effects against
unreasonable searches and seizures of whatever nature and for any purpose shall be
inviolable, and no search warrant or warrant of arrest shall issue except upon
probable cause to be determined personally by the judge after examination under
oath or affirmation of the complainant and the witnesses he may produce, and
particularly describing the place to be searched and the persons or things to be
seized. )Enforcement PowersRegulatory power 35, 36Art. 35. Suspension and/or
cancellation of license or authority. The Minister of Labor shall have the power to
suspend or cancel any license or authority to recruit employees for overseas
employment for violation of rules and regulations issued by the Ministry of Labor,
the Overseas Employment Development Board, or for violation of the provisions of
this and other applicable laws, General Orders and Letters of Instructions.
MISCELLANEOUS PROVISIONSArt. 36. Regulatory power. The Secretary of Labor shall
have the power to restrict and regulate the recruitment and placement activities of
all agencies within the coverage of this Title and is hereby authorized to issue
orders and promulgate rules and regulations to carry out the objectives and
implement the provisions of this Title.Art. 37. Visitorial Power. The Secretary of
Labor or his duly authorized representatives may, at any time, inspect the
premises, books of accounts and records of any person or entity covered by this
Title, require it to submit reports regularly on prescribed forms, and act on
violation of any provisions of this Title.Rule-making power -36Visitorial Power
37DOLE Phil Inc. v. EstevaDole Phil hired members of CAMPCO (Cannery Multi Purpose
Coop) depending on their sole needs. Upon evaluation, DOLE Regional Task force
found CAMPCO and Dole Phil engaged in Labor Only contracting, having no substantial
capital as well as the fact that the workers recruited are performing activities
directly related to the principal business of Dole. Dole Philippines appealed

raising that the DOLE Regional Director committed error in Law in directing
cooperatives to cease and desist from Labor Only Contracting saying that this had
been their practice ever since. Despite the order being final and executory, Dole
Phil continued its operations. On appeal LA and NLRC found CAMPCO is not engaged in
Labor Only Contracting. CA reversed LA and NLRC holding that the order by DOLE
should be given weight in the exercise of its visitorial and enforcement power (Art
128 a and b). Ruling: Art 128 Secretary of Labor can issue compliance orders to
give effect to Labor standards. The regional director of DOLE made procedural steps
such as sending a task force to investigate before issuing his order to cease and
desist based on his findings that CAMPCO is guilty of Labor Only Contracting. Dole
Phil is found guilty. CA affirmed. Joint and Several Liability of Employment agent
and principalPOEA Part II, Rule IISection 1. Requirements for Licensing. Every
applicant for license to operate a private employment agency shall submit a written
application together with the following requirements: A verified undertaking
stating that the applicant:1. Shall select only medically and technically qualified
recruits;2. Shall assume full and complete responsibility for all claims and
liabilities which may arise in connection with the use of the license;3. Shall
assume joint and solidary liability with the employer for all claims and
liabilities which may arise in connection with the implementation of the contract,
including but not limited to payment of wages, death and disability compensation
and repatriations;4. Shall guarantee compliance with the existing labor and social
legislations of the Philippines and of the country of employment of the recruited
workers;5. Shall assume full and complete responsibility for all acts of its
officials, employees and representatives done in connection with recruitment and
placement;6. Shall negotiate for the best terms and conditions of employment;7.
Shall disclose the full terms and conditions of employment to the applicant
workers;8. Shall deploy at least 100 workers to its new markets within one (1) year
from the issuance of
its license;9. Shall provide orientation on recruitment procedures, terms and
conditions and other relevant information to its workers and provide facilities
therefor; and10. Shall repatriate the deployed workers and his personal belongings
when the need arises. For the purpose of compliance with item (1), the agency may
require the worker to undergo trade testing and medical examination only after the
worker has been pre-qualified for employment.RA 8042 Sec 10 2nd par. (See below)OSM
Shipping Phil Inc. v. NLRCFermin Gurrero filed a case against OSM Shipping since
despite the services he rendered to OSM, no compensation was paid to him. OSM
alleged that the ship owner changed its plans on the use of the vessel (Princess
Hoa) and instead chartered it to PCSLC. Since OSM and PCSLCs contract was
terminated, PCSLC became employer of the crew.Issues: Sec 3 Rule 46 of RoC requires
a certified true copy of LAs decision but court said that it is not necessary to
send pleadings as long as Guerrero is represented by counsel. Also, from the
inception of the case at the LAs office, Guerrero, a seaman was often not there.
Service of pleadings is futile. The fact that petitioner and its principal have
already terminated their agency agreement does not retrieve the formenr of its
liability. Responsibilities of such parties towards the contracted employees under
the agreement do not end but rather extends until the expiration of the employment
contract.JurisdictionRTC over criminal action arising from illegal recruitmentRA
8042,SEC. 9. VENUE. - A criminal action arising from illegal recruitment as
defined herein shall be filed with the Regional Trial Court of the province or city
where the offense was committed or where the offended party actually resides at the
same time of the commission of the offense: Provided, That the court where the
criminal action is first filed shall acquire jurisdiction to the exclusion of other
courts. Provided, however, That the aforestated provisions shall also apply to
those criminal actions that have already been filed in court at the time of the
effectivity of this Act.LA over money claimsRA 8042, SEC. 10. MONEY CLAIMS. Notwithstanding any provision of law to the contrary, the Labor Arbiters of the
National Labor Relations Commission (NLRC) shall have the original and exclusive
jurisdiction to hear and decide, within ninety (90) calendar days after filing of
the complaint, the claims arising out of an employer-employee relationship or by

virtue of any law or contract involving Filipino workers for overseas deployment
including claims for actual, moral, exemplary and other forms of damages.The
liability of the principal/employer and the recruitment/placement agency for any
and all claims under this section shall be joint and several. This provisions shall
be incorporated in the contract for overseas employment and shall be a condition
precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all money
claims or damages that may be awarded to the workers. If the recruitment/placement
agency is a juridical being, the corporate officers and directors and partners as
the case may be, shall themselves be jointly and solidarily liable with the
corporation or partnership for the aforesaid claims and damages.Flourish Maritime
Shipping v. Donato AlmazorAlmazor worked in a Taiwan vessel as a fisherman for
Flourish or FSM for only 26 days and he was subjected to working with almost no
sleep and was not provided with food. His contract with Flourish is for 2 years. In
RA 8042 Sec 10, it says that there are 2 money claims available for illegal
dismissal. Salaries for the unexpired portion of the employment contract3 months
salary for every year of the unexpired term. W hichever is less.He was given option
2 by the LA because even if his contract is for 2 years, he was only made to work
for 26 days.POEA over administrative casesPre-employment CasesOmnibus rules
implementing RA 8042 Sec 28 aSection 28. Jurisdiction of the POEA. - The POEA shall
exercise original and exclusive jurisdiction to hear and decide: a. all cases,
which are administrative in character, involving or arising out of violations of
rules and regulations relating to licensing and registration of recruitment and
employment agencies or entities; and b. disciplinary action cases and other special
cases, which are administrative in character, involving employers, principals,
contracting partners and Filipino migrant workers.Disciplinary CasesOmnibus rules
implementing RA 8042 Sec 28 bAlien Employment RegulationArt. 12. Statement of
objectives. It is the policy of the State:e. To regulate the employment of aliens,
including the establishment of a registration and/or work permit system;EMPLOYMENT
OF NON-RESIDENT ALIENSArt. 40. Employment permit of non-resident aliens. Any alien
seeking admission to the Philippines for employment purposes and any domestic or
foreign employer who desires to engage an alien for employment in the Philippines
shall obtain an employment permit from the Department of Labor.The employment
permit may be issued to a non-resident alien or to the applicant employer after a
determination of the non-availability of a person in the Philippines who is
competent, able and willing at the time of application to perform the services for
which the alien is desired. For an enterprise registered in preferred areas of
investments, said employment permit may be issued upon recommendation of the
government agency charged with the supervision of said registered enterprise.Art.
41. Prohibition against transfer of employment.a. After the issuance of an
employment permit, the alien shall not transfer to another job or change his
employer without prior approval of the Secretary of Labor. b. Any non-resident
alien who shall take up employment in violation of the provision of this Title and
its implementing rules and regulations shall be punished in accordance with the
provisions of Articles 289 and 290 of the Labor Code. In addition, the alien worker
shall be subject to deportation after service of his sentence.Art. 42. Submission
of list. Any employer employing non-resident foreign nationals on the effective
date of this Code shall submit a list of such nationals to the Secretary of Labor
within thirty (30) days after such date indicating their names, citizenship,
foreign and local addresses, nature of employment and status of stay in the
country. The Secretary of Labor shall then determine if they are entitled to an
employment permit.Omnibus Rules, Book I, Rule XIVD.O. No. 12 Omnibus Guidelines for
Issuance of Employment Permits to Foreign Nationals (see reviwer) Book III Rule I.1
Exemption Rule I.2 D.O. Nos 19-02, 26-02Const., Art XII: Section 12. The State
shall promote the preferential use of Filipino labor, domestic materials and
locally produced goods, and adopt measures that help make them competitiveCoverage
40Art. 40. Employment permit of non-resident aliens. Any alien seeking admission
to the Philippines for employment purposes and any domestic or foreign employer who
desires to engage an alien for employment in the Philippines shall obtain an

employment permit from the Department of Labor.The employment permit may be issued
to a non-resident alien or to the applicant employer after a determination of the
non-availability of a person in the Philippines who is competent, able and willing
at the time of application to perform the services for which the alien is desired.
For an enterprise registered in preferred areas of investments, said employment
permit may be issued upon recommendation of the government agency charged with the
supervision of said registered enterprise.Almodiel v. NLRCFarle Almodiel claims
that he was illegally dismissed by Raytheon Philippines after the company
terminated his services on the basis of redundancy. LA granted his petition for
reinstatement but the NLRC only allowed him his separation pay. He claims that
there is bad faith, malice and irregularity on the part of Raytheon. The court
found that prior to his termination, he was notified by the company and was given
separation pay which he did not accept. Furthermore, his allegations that Ang Tan
Chai, an alien with no working permit absorbed his position is untenable given the
fact that it is immaterial whether his job was absorbed rendering him jobless
because it is the managements prerogative. Also, Ang Tan Chai was found to be a
resident alien and therefore according to Article 40, LC he does not need a working
permit. Petition Dismissed. Conditions for Grant of PermitOmnibus rules, Book I
Part III, Rule II, 1 2 3 (See page 613 of Azucena if Maam asks)Accreditation of
foreign principals, employers and projects with no POLO (Philippine Overseas Labor
Office) shall undergo accreditation under POEADocumentary Requirements for
Accreditation to be submitted to the POEA for evaluation. (SPoA, Employment
Contract, Manpower request <position and salary of workers>, Business License, Visa
assurance)Validity of Accreditation will be valid up to 4 years unless revoked by
POEA (grounds: expiration of business license, written mutual agreement, false
documentation, final judgment) Pacific Consultants Intl Asia Inc. v. Schonfeld
Klaus Schonfeld, a Canadian was hired by PCIJ thru PPI as its VP of water and
sanitation. He was dismissed and was not given the money claims he was promised
such as the cost of shipment of goods and unpaid salary. LA and NLRC dismissed his
complaint for illegal recruitment on the basis of the employment contract he signed
stating that all disputes between employer and employee should be filed in London,
ruling that PCIJ is its employer and PPI is only a mere subsidiary. Respondent
company
PCIJ say that it should have been filed in London or Japan where PCIJ is based and
not in the Philippines since its courts did not have jurisdiction. CA declared that
the claim of the respondents of multiple venues of filing actually shows that the
venue is not limited to just one place. Also, CA found that Schonfeld is an
employee of PPI and not PCIJ. Schonfelds Alien Employment Permit obtained in the
Philippines was obtained by PPI stating that Schofeld is its employee. Also, using
the 4 fold test, it can be proven that Schonfeld is indeed an employee of PPI. SC
denied petition and upheld CA decision.
Validity of AEP (Alien Employment
Regulation) DO- 12 Omnibus R. Rule II 7 Revocation/Cancellation, Grounds Rule III.1
Development of Human ResourcesArt 57-81Technical Education and Skills Development
of Filipino Middle-level ManpowerManpower Development Definition Article 44 (a)
Art. 44. Definitions. As used in this Title:a. "Manpower" shall mean that portion
of the nations population which has actual or potential capability to contribute
directly to the production of goods and services.RA 7796 Sec 4 b c eGeneral Policy
RA 7796, Sec 2Specific Goals and Objectives RA 7796, Sec 3Training and
Employment of Special W orkers Apprentices and LearnersPolicy Objectives 57Art.
57. Statement of objectives. This Title aims:1. To help meet the demand of the
economy for trained manpower;2. To establish a national apprenticeship program
through the participation of employers, workers and government and non-government
agencies; and3. To establish apprenticeship standards for the protection of
apprentices.Definition : RA 7796 Sec 4 j k l m nApprentice:Art. 58. Definition of
Terms. As used in this Title:a. "Apprenticeship" means practical training on the
job supplemented by related theoretical instruction.b. An "apprentice" is a worker
who is covered by a written apprenticeship agreement with an individual employer or
any of the entities recognized under this Chapter.RA 7796 Sec 4 kLearner: Art. 73.
Learners defined. Learners are persons hired as trainees in semi-skilled and other

industrial occupations which are non-apprenticeable and which may be learned


through practical training on the job in a relatively short period of time which
shall not exceed three (3) months.RA 7796 Sec 4 nAllowed Employment and W hen 60,
74 Art. 60. Employment of apprentices. Only employers in the highly technical
industries may employ apprentices and only in apprenticeable occupations approved
by the Secretary of Labor and Employment. (As amended by Section 1, Executive Order
No. 111, December 24, 1986)Art. 74. W hen learners may be hired. Learners may be
employed when no experienced workers are available, the employment of learners is
necessary to prevent curtailment of employment opportunities, and the employment
does not create unfair competition in terms of labor costs or impair or lower
working standards.RA 7796 Sec 4 mConditions of Employment 61, 281, 75, 76, 72Art.
61. Contents of apprenticeship agreements. Apprenticeship agreements, including the
wage rates of apprentices, shall conform to the rules issued by the Secretary of
Labor and Employment. The period of apprenticeship shall not exceed six months.
Apprenticeship agreements providing for wage rates below the legal minimum wage,
which in no case shall start below 75 percent of the applicable minimum wage, may
be entered into only in accordance with apprenticeship programs duly approved by
the Secretary of Labor and Employment. The Department shall develop standard model
programs of apprenticeship. (As amended by Section 1, Executive Order No. 111,
December 24, 1986)Art. 281. Probationary employment. Probationary employment shall
not exceed six (6) months from the date the employee started working, unless it is
covered by an apprenticeship agreement stipulating a longer period. The services of
an employee who has been engaged on a probationary basis may be terminated for a
just cause or when he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the time of his
engagement. An employee who is allowed to work after a probationary period shall be
considered a regular employee.Art. 75. Learnership agreement. Any employer desiring
to employ learners shall enter into a learnership agreement with them, which
agreement shall include:a. The names and addresses of the learners;b. The duration
of the learnership period, which shall not exceed three (3) months;c. The wages or
salary rates of the learners which shall begin at not less than seventy-five
percent (75%) of the applicable minimum wage; andd. A commitment to employ the
learners if they so desire, as regular employees upon completion of the
learnership. All learners who have been allowed or suffered to work during the
first two (2) months shall be deemed regular employees if training is terminated by
the employer before the end of the stipulated period through no fault of the
learners.The learnership agreement shall be subject to inspection by the Secretary
of Labor and Employment or his duly authorized representative.Art. 76. Learners in
piecework. Learners employed in piece or incentive-rate jobs during the training
period shall be paid in full for the work done.Art. 72. Apprentices without
compensation. The Secretary of Labor and Employment may authorize the hiring of
apprentices without compensation whose training on the job is required by the
school or training program curriculum or as requisite for graduation or board
examination.W age Order No. NCR-14Enforcement 65, 66, 67Art. 65. Investigation of
violation of apprenticeship agreement. Upon complaint of any interested person or
upon its own initiative, the appropriate agency of the Department of Labor and
Employment or its authorized representative shall investigate any violation of an
apprenticeship agreement pursuant to such rules and regulations as may be
prescribed by the Secretary of Labor and Employment.Art. 66. Appeal to the
Secretary of Labor and Employment. The decision of the authorized agency of the
Department of Labor and Employment may be appealed by any aggrieved person to the
Secretary of Labor and Employment within five (5) days from receipt of the
decision. The decision of the Secretary of Labor and Employment shall be final and
executory.Art. 67. Exhaustion of administrative remedies. No person shall institute
any action for the enforcement of any apprenticeship agreement or damages for
breach of any such agreement, unless he has exhausted all available administrative
remedies.Disabled Persons (Handicapped W orkers) 78-81Art. 78. Definition.
Handicapped workers are those whose earning capacity is impaired by age or physical
or mental deficiency or injury.Art. 79. W hen employable. Handicapped workers may be

employed when their employment is necessary to prevent curtailment of employment


opportunities and when it does not create unfair competition in labor costs or
impair or lower working standards.Art. 80. Employment agreement. Any employer who
employs handicapped workers shall enter into an employment agreement with them,
which agreement shall include: 1. The names and addresses of the handicapped
workers to be employed; 2. The rate to be paid the handicapped workers which shall
not be less than seventy five (75%) percent of the applicable legal minimum wage;
3. The duration of employment period; and 4. The work to be performed by
handicapped workers. The employment agreement shall be subject to inspection by the
Secretary of Labor or his duly authorized representative.Art. 81. Eligibility for
apprenticeship. Subject to the appropriate provisions of this Code, handicapped
workers may be hired as apprentices or learners if their handicap is not such as to
effectively impede the performance of job operations in the particular occupations
for which they are hired.Magna Carta for Disabled Persons (RA 7277)Definition RA
7277 Sec 4 a b c dPolicy Declaration - RA 7277 Sec 2Coverage - RA 7277 Sec 3Rights
and Privileges 81RA 7277 Sec 4 I 5, 6, 7Bernardo v. NLRC 43 deaf mute employees
were dismissed by Far East Bank after their contracts with the bank as money
counters were terminated. The employees filed for illegal dismissal. The Bank
claimed that they 1. hired them only as an answer to the Governments pakiusap 2.
that it was already their tellers job to count the money 3. the workers were told
from the start that they will not be regularized. LA and NLRC dismissed the
complaint for lack of meritThe court granted the petition because they noted that
RA 7277 was controlling and not Art 80 as used by the LA and NLRC the workers being
considered as QULAIFIED for their jobs. The court held that the an employee is
considered regular because of the nature of the work & the length of the service,
not because of the mode or reasoning for hiring them.The Petitioners contracts
(except for 17 of them) were regularly renewed and since they have already
completed the 6 moth probationary period, they are entitled to separation pay
(cannot reinstate because there is no more job title of money counters.)
Discrimination Sec 32, 33 (see pg 8 of RA)Enforcement Sec 44-46 (see pg 13 of
RA)Conditions of employmentHours of W orkArt 82-90Art. 82. Coverage. The provisions
of this Title shall apply to employees in all establishments and undertakings
whether for profit or not, but not to government employees, managerial employees,
field personnel, members of the family of the employer who are dependent on him for
support, domestic helpers, persons in the personal service of another, and workers
who are paid by results as determined by the Secretary of Labor in appropriate
regulations. As used herein, "managerial employees"
refer to those whose primary duty consists of the management of the establishment
in which they are employed or of a department or subdivision thereof, and to other
officers or members of the managerial staff. "Field personnel" shall refer to nonagricultural employees who regularly perform their duties away from the principal
place of business or branch office of the employer and whose actual hours of work
in the field cannot be determined with reasonable certainty.Art. 83. Normal hours
of work. The normal hours of work of any employee shall not exceed eight (8) hours
a day.Health personnel in cities and municipalities with a population of at least
one million (1,000,000) or in hospitals and clinics with a bed capacity of at least
one hundred (100) shall hold regular office hours for eight (8) hours a day, for
five (5) days a week, exclusive of time for meals, except where the exigencies of
the service require that such personnel work for six (6) days or forty-eight (48)
hours, in which case, they shall be entitled to an additional compensation of at
least thirty percent(30%) of their regular wage for work on the sixth day. For
purposes of this Article, "health personnel" shall include resident physicians,
nurses, nutritionists, dietitians, pharmacists, social workers, laboratory
technicians, paramedical technicians, psychologists, midwives, attendants and all
other hospital or clinic personnel.Omnibus Rules, Book III, rule I, IA, II (go to
page 663 of Azucena if maam asks)RULE I-A #Hours of W ork of Hospital and Clinic
PersonnelSECTION 1. General statement on coverage. This Rule shall apply to: (a)
All hospitals and clinics, including those with a bed capacity of less than one
hundred (100) which are situated in cities or municipalities with a population of

one million or more; and (b) All hospitals and clinics with a bed capacity of at
least one hundred (100), irrespective of the size of the population of the city or
municipality where they may be situated. SECTION 2. Hospitals or clinics within the
meaning of this Rule. The terms "hospitals" and "clinics" as used in this Rule
shall mean a place devoted primarily to the maintenance and operation of facilities
for the diagnosis, treatment and care of individuals suffering from illness,
disease, injury, or deformity, or in need of obstetrical or other medical and
nursing care. Either term shall also be construed as any institution, building, or
place where there are installed beds, or cribs, or bassinets for twenty-four (24)
hours use or longer by patients in the treatment of disease, injuries, deformities,
or abnormal physical and mental states, maternity cases or sanitorial care; or
infirmaries, nurseries, dispensaries, and such other similar names by which they
may be designated. SECTION 3. Determination of bed capacity and population. (a)
For purposes of determining the applicability of this Rule, the actual bed capacity
of the hospital or clinic at the time of such determination shall be considered,
regardless of the actual or bed occupancy. The bed capacity of hospital or clinic
as determined by the Bureau of Medical Services pursuant to Republic Act No. 4226,
otherwise known as the Hospital Licensure Act, shall prima facie be considered as
the actual bed capacity of such hospital or clinic. (b) The size of the population
of the city or municipality shall be determined from the latest official census
issued by the Bureau of the Census and Statistics. SECTION 4. Personnel covered by
this Rule. This Rule applies to all persons employed by any private or public
hospital or clinic mentioned in Section 1 hereof, and shall include, but not
limited to, resident physicians, nurses, nutritionists, dieticians, pharmacists,
social workers, laboratory technicians paramedical technicians, psychologists,
midwives, and attendants. SECTION 5. Regular working hours. The regular working
hours of any person covered by this Rule shall not be more than eight (8) hours in
any one day nor more than forty (40) hours in any one week. For purposes of this
Rule a "day" shall mean a work day of twenty-four (24) consecutive hours beginning
at the same time each calendar year. A "week" shall mean the work of 168
consecutive hours, or seven consecutive 24-hour work days, beginning at the same
hour and on the same calendar day each calendar week. SECTION 6. Regular working
days. The regular working days of covered employees shall not be more than five
days in a work week. The work week may begin at any hour and on any day, including
Saturday or Sunday, designated by the employer. Employers are not precluded from
changing the time at which the work day or work week begins, provided that the
change is not intended to evade the requirements of this Rule. SECTION 7. Overtime
work. W here the exigencies of the service so require as determined by the
employer, any employee covered by this Rule may be scheduled to work for more than
five (5) days or forty (40) hours a week, provided that the employee is paid for
the overtime work an additional compensation equivalent to his regular wage plus at
least thirty percent (30%) thereof, subject to the provisions of this Book on the
payment of additional compensation for work performed on special and regular
holidays and on rest days. SECTION 8. Hours worked. In determining the
compensable hours of work of hospital and clinic personnel covered by this Rule,
the pertinent provisions of Rule 1 of this Book shall apply. SECTION 9. Additional
compensation. Hospital and clinic personnel covered by this Rule, with the
exception of those employed by the Government, shall be entitled to an additional
compensation for work performed on regular and special holidays and rest days as
provided in this Book. Such employees shall also be entitled to overtime pay for
services rendered in excess of forty hours a week, or in excess of eight hours a
day, whichever will yield the higher additional compensation to the employee in the
work week. SECTION 10. Relation to Rule I. All provisions of Rule I of this Book
which are not inconsistent with this Rule shall be deemed applicable to hospital
and clinic personnel. Coverage: This rule shall apply to all employees except
government, retail, domestic helpers, managerial employees, field personnel. Night
Shift differential (same as Art 86)Regulation. Rationale-Manila Terminal Co. Inc.
v. CIRManila Terminal Company Inc (MTC) took the arrastre service in some of the
piers in Manila for which it hired 30 watchmen on 12 hour shifts. These watchmen

are part of the Manila Terminal Relief and Mutual Aid; after organizing themselves,
they asked the Court of Industrial relations for MTC to pay them their overtime
shifts. CIR granted their request. MTC filed a petition for certiorari saying that
CIR has no jurisdiction over the case and that in the agreement for the 12 hour
shifts, the overtime pay is already included in the salary and that due to the
passage of time, MTRMA are barred due to laches and estoppel. According to the
court, CIR has jurisdiction over the case. The findings of the court point out that
after strict 8 hour shifts were imposed by MTC in lieu of the 12 hour shifts, the
salary was not reduced which proves that overtime pay was not yet included in the
salary. Also, it cannot be said that the watchmen have waived their rights to
compensation due to laches and estoppel for this would be contrary to the 8 hour
law which should always be construed as for the employee (another point: so the
contract, being against the law should not be the reason why the employer should
not pay. It is because of its nullity that he should.)Coverage 82, 276Art. 276.
Government employees. The terms and conditions of employment of all government
employees, including employees of government-owned and controlled corporations,
shall be governed by the Civil Service Law, rules and regulations. Their salaries
shall be standardized by the National Assembly as provided for in the New
Constitution. However, there shall be no reduction of existing wages, benefits and
other terms and conditions of employment being enjoyed by them at the time of the
adoption of this Code.Book III, Rule I, Sec 1-2 (See page 658 of Azucena)General
Statement on Coverage: apply to all employees except to those exempted.Government
Employees, Managerial Employees, Officers or members of Managerial Staff, Domestic
Servants, W orkers paid by results, Nonagricultural field personnel. SECTION 2.
Exemption. The provisions of this Rule shall not apply to the following persons
if they qualify for exemption under the conditions set forth herein: (a) Government
employees whether employed by the National Government or any of its political
subdivision, including those employed in government-owned and/or controlled
corporations; (b) Managerial employees, if they meet all of the following
conditions: (1) Their primary duty consists of the management of the establishment
in which they are employed or of a department or sub-division thereof. (2) They
customarily and regularly direct the work of two or more employees therein. (3)
They have the authority to hire or fire employees of lower rank; or their
suggestions and recommendations as to hiring and firing and as to the promotion or
any other change of status of other employees, are given particular weight. (c)
Officers or members of a managerial staff if they perform the following duties and
responsibilities: (1) The primary duty consists of the performance of work directly
related to management policies of their employer; (2) Customarily and regularly
exercise discretion and independent judgment; and (3) (i) Regularly and directly
assist a proprietor or a managerial employee whose primary duty consists of the
management of the establishment in which he is employed or
subdivision thereof; or (ii) execute under general supervision work along
specialized or technical lines requiring special training, experience, or
knowledge; or (iii) execute, under general supervision, special assignments and
tasks; and (4) W ho do not devote more than 20 percent of their hours worked in a
work week to activities which are not directly and closely related to the
performance of the work described in paragraphs (1), (2) and (3) above. (d)
Domestic servants and persons in the personal service of another if they perform
such services in the employer's home which are usually necessary or desirable for
the maintenance and enjoyment thereof, or minister to the personal comfort,
convenience, or safety of the employer as well as the members of his employer's
household. (e) W orkers who are paid by results, including those who are paid on
piece-work, "takay," "pakiao" or task basis, and other non-time work if their
output rates are in accordance with the standards prescribed under Section 8, Rule
VII, Book Three of these regulations, or where such rates have been fixed by the
Secretary of Labor and Employment in accordance with the aforesaid Section. (f)
Non-agricultural field personnel if they regularly perform their duties away from
the principal or branch office or place of business of the employer and whose
actual hours of work in the field cannot be determined with reasonable certainty.

ExemptionsGovernment Employees 82, 276Constitution Art IX-B, Section 2. (1) The


civil service embraces all branches, subdivisions, instrumentalities, and agencies
of the Government, including government-owned or controlled corporations with
original charters.Managerial Employees 82212 m. "Managerial employee" is one who
is vested with the powers or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees. Supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of such
authority is not merely routinary or clerical in nature but requires the use of
independent judgment. All employees not falling within any of the above definitions
are considered rank-and-file employees for purposes of this Book.Omnibus Rules,
Book III, Rule I, Sec 2 (b)(c) (Managerial employees, officers/ members of
managerial staff)International Pharmaceuticals Inc. v. NLRCVirginia Quintia was
hired by Intl Pharmaceuticals (IPI) as its Medical Director for the Research
Department which is still in its experimental stage and because of this, the
contract of employment was subject to renewal. Her contract was renewed and she was
given the added task of being the company Physician. In one meeting, she pointed
out the inequality of the interest rates given to low salaried employees which led
them to demand full disclosure of the financials. She was later on dismissed due to
the expiration of her contract and Paz W ong replaced her as head. LA and NLRC found
her to be illegally dismissed and held that she was a regular employee not a
project employee.The court was of the same opinion, pointing out that Quinta was
continued as the Medical director and was even given the job of company physician.
Although she was not required to report her number of hours at work as a managerial
employee, she performed acts which are necessary and desirable to IPIs business
therefore satisfied the test of W ON a person is a regular employee of the company.
Also, the court said that if she was a project employee and that her contract
expired due to the project being terminated, there would be no need to replace her.
IPI is allowed wider discretion in terminating the management personnel and loss of
confidence can be alleged; however, mere allegation is not sufficient, it must be
substantiated by evidence because managerial employees are entitled to security of
tenure as well. Separation pay and backwages.Field Personnel 82Omnibus Rules,
Book III, Rule I, Sec 2 (f) (Non agricultural field personnel)Mercidar Fishing Corp
v. NLRCFermin Agao filed a case against Mercidar for illegal dismissal because when
he reported back for work after his sick leave, the Company refused to give him
work nor issue him a certificate of employment after. LA ordered his reinstatement
and NLRC affirmed dismissing Mercidars claim that Agao is a field personnel and
thus not entitled to service incentive leave pay. Art 82 defined field personnel as
the non-agricultural employees who perform their duties away from principal place
of business and are therefore not covered by the W orking Conditions and Rest
Periods title. In this case, Agao cannot be considered as a field personnel even
though his work is performed away from the principal place of business or office of
Mercidar given the fact that the crew has no choice but to remain on the vessel and
stay under the supervision of the vessel master. Petition dismissed.Far East
Agricultural Supply, Inc. v. LebatiqueJimmy Lebatique was hired by Far East as a
truck driver to deliver animal feeds. Lebatique complained of nonpayment of
overtime work and was dismissed by the Uy brothers (one as the general manager of
far east). LA found that Lebatique was illegally dismissed. NLRC dismissed
Lebatiques complaint for lack of merit finding him to be a field personnel. CA
reversed the NLRC decision ruling that he was illegally dismissed and that he was
not a field personnel. The court ruled that Far East failed to prove the burden
that the termination was for a valid cause and in fact, the court found, that it
was his complaint for non payment of overtime work which prompted his dismissal.The
court also found that he is not a field personnel given that being one does not
only concern the location of the job but also the fact that the employees time and
performance is not controlled and unsupervised by the employer. The fact that
company drivers are given a specific schedule to deliver goods as well as the
instance that drivers are directed to stay in the company premises during truck ban
shows that Lebatique is a regular employee and thus entitled to the benefit of

overtime pay. Petition denied.Dependent Family Members 82Domestic Helpers 82,


141, 145Art. 141. Coverage. This Chapter shall apply to all persons rendering
services in households for compensation."Domestic or household service" shall mean
service in the employers home which is usually necessary or desirable for the
maintenance and enjoyment thereof and includes ministering to the personal comfort
and convenience of the members of the employers household, including services of
family drivers.Art. 145. Assignment to non-household work. No househelper shall be
assigned to work in a commercial, industrial or agricultural enterprise at a wage
or salary rate lower than that provided for agricultural or non-agricultural
workers as prescribed herein. Omnibus Rules, Book III, Rule I, Sec 2 (d) (Domestic
servants)Persons in the Personal Service of Another 82Piece W orkers 82Omnibus
Rules, Book III, Rule I, Sec 2 (e) (W orkers who are paid by results)Labor Congress
vs. NLRC99 rank and file employees of Empire food products were dismissed due to
abandonment of post which led to the spoiling of the cheese curls. They filed a
case of illegal dismissal and underpayment of wages which the LA and the NLRC
dismissed due to the testimonies of the company guard as well as the management and
that the employees, being piece workers or pakiao workers, are not entitled to
underpayment of wages. Upon appeal by the employees under the Office of the
Solicitor General, it was shown to the court that the LA disregarded the
testimonies of the 99 complainants because he was of the perception that he would
not be subjected to the rebuke of the NLRC if it were not for the employees. The
court held that even if petitioners are pakiao workers does not imply that they are
not regular employees. Given the fact that they perform necessary operations in the
day to day operations of Empire food, makes them regular employees. Pieceworkers,
however, are not entitled to overtime pay if the output rates are in accordance
with Sec 8 Rule VII Book III or fixed rates of the Secretary of Labor (Sec 2(e)
Rule I Book III). The court found however, that Empire Foods did not adhere to the
standard in Section 8 nor with the rates of the Sec. of Labor therefore, they are
not exempted from giving overtime pay. Petition granted.Normal Hours of W ork 83
Art. 83. Normal hours of work. The normal hours of work of any employee shall not
exceed eight (8) hours a day. Health personnel in cities and municipalities with a
population of at least one million (1,000,000) or in hospitals and clinics with a
bed capacity of at least one hundred (100) shall hold regular office hours for
eight (8) hours a day, for five (5) days a week, exclusive of time for meals,
except where the exigencies of the service require that such personnel work for six
(6) days or forty-eight (48) hours, in which case, they shall be entitled to an
additional compensation of at least thirty percent (30%) of their regular wage for
work on the sixth day. For purposes of this Article, "health personnel" shall
include resident physicians, nurses, nutritionists, dietitians, pharmacists, social
workers, laboratory technicians, paramedical technicians, psychologists, midwives,
attendants and all other hospital or clinic personnel.Compensable Hours of W ork
In GeneralArt. 84. Hours worked. Hours worked shall include (a) all time during
which an employee is required to be on duty or to be at a prescribed workplace; and
(b) all time during which an employee is suffered or permitted to work. Rest
periods of short duration during working hours shall be counted as hours worked. On
Duty
84(a), Book III, Rule I, Sec 3 (a) (page 659 of Azucena): Hours worked: All time
during which an employee is required to be on duty or to be at the employers
remises or to be at the prescribed work place and; Sec (4) a: Principles in
determining hours worked: All hours are hours worked which the employee is required
to give the employer regardless of W ON such hours are spent in productive labor or
involve physical or mental exertion.At W ork 84(a), Book III, Rule I, Sec 3 (b):
All time during which an employee is suffered or permitted to work.Specific Rules
Rest PeriodShort Duration or coffee break 84 2nd ParBook III Rule I Sec 7 2nd
Par: Rest periods or coffee breaks running from 5 to 20 minutes shall be considered
as compensable working time.More than 20 minutesBook III Rule I Sec 4 (b): An
employee need not leave the premises of the workplace in order that his rest period
shall not be counted, it being enough that he stops working, may rest completely
and may leave his work place, to go elsewhere, whether within or outside the

premises of his workplace.Meal PeriodRegular Meal Period (1 hour) Art. 85. Meal
periods. Subject to such regulations as the Secretary of Labor may prescribe, it
shall be the duty of every employer to give his employees not less than sixty (60)
minutes time-off for their regular meals.Book III, Rule I Section 7 1st paragraph
(page 660, Azucena) : Every employer shall give his employees, regardless of sex,
not less than 1 hour time of for regular meals except for (nonmanual labor; not
less than 16 hours a day; actual or impending emergencies; work is necessary to
prevent loss of perishable goods)Philippine Airlines v. NLRC (1999)Dr. Herminio
Fabros a flight surgeon, left the clinic to have his dinner at his residence which
was only 5 minutes away. Manuel Acosta suffered a heart attack and was brought to
the clinic at 7:50pm. Fabros reached the clinic at 7:51 when the Nurse Eusebio has
already left with Acosta. Acosta died the next day. Fabros was suspended by PAL
because he abandoned his post while on duty because he was obliged to stay in the
company premises for not less than 8 hours. Fabros contested this suspension
claiming that he was entitled to a thirty minute break. LA and NLRC nullified the
suspension. The court affirmed their ruling and said that the eight hour work
period does not include the meal break and no where in the law (Art 83, 85) is it
stated that employees must take their meal within the company premises. Suspension
is void.Shorter Meal Period (Less than 1 hour but not less than 20 minutes)Section
7 1st parW aiting TimeBook III Rule I, Sec 5(a): W aiting time spent by an employee
shall be considered as working time if waiting is an integral part of his work or
the employee is required or engaged by the employer to wait.Arica v. NLRCW orkers of
Standard Philippine Fruits Corporation (Stanfilco) filed a complaint against the
company claiming that the 30 minute assembly time is considered as waiting time or
work time. LA and NLRC held that an agreement of the parties includes the long
standing practice of non-compensable assembly time. The Minister of Labor, relied
on by the LA and the court held that the 30 minute assembly time was
institutionalized by mutual consent of the parties under Article IV of their
collective bargaining agreement and is a deeply-rooted routinary practice of the
employees. Given that their houses are on the farms, they can attend to household
chores during the assembly time and are therefore not subject to the control of the
management during this time. The assembly time is primarily for the employees to
indicate their availability or non availability for work during that day. Petition
Dismissed. On CallBook III, Rule I, Sec 5 (b): An employee who is required to
remain on call in the employers premises or so close thereto that he cannot use
the time effectively and gainfully for his own purpose shall be considered as
working while on call. An employee who is not required to leave word at his home or
with company officials where he may be reached is NOT working while on call.
Inactive due to work interruptionsBook III, Rule I, Sec 4(d): The time during
which an employee is inactive by reason of interruptions in his work beyond his
control shall be considered time either if the imminence of the resumption of work
requires the employees presence at the place of work or if the interval is too
brief to be utilized effectively and gainfully in the employees own interest
University of Pangasinan Faculty Union v. University of Pangasinan.The University
of Pangasinan Union filed a complaint against the university for payment of the
Emergency Cost of Living Allowances or ECOLA for the semestral break as well as for
salary increases from 60 percent of the tuition increase mandated under PD 451 sec
3. The University claims that the principle of no work no pay applies to this
case and that the increase in tuition fees is for the increasing operating
expenditures, development, student assistance and ROI of the school. The court held
that no work no pay does not apply to this case because although it is a forced
leave, they are still tasked with checking papers, grading reports and other tasks
during the break. Also, Section 4d of the Omnibus Rules Implementing the Labor Code
provides that time during which employee is inactive because of interruptions in
his work beyond his control shall be considered as hours worked. As for the
tuition increase, PD 451 is clear and unambiguous, 60% of the increase should be
dedicated to salary increase of the teachers. Petition granted. W ork after normal
hoursBook III Rule I Sec 4 (c): If the work performed was necessary, or it
benefited the employer, or the employee could not abandon his work at the end of

his normal working hours because he had no replacement, all time spent for such
work shall be considered as hours worked, if the work was with the knowledge of his
employer or immediate supervisor.Lectures, meetings, trainingsBook III Rule I Sec.
6: Attendance at lectures, meetings, training programs, and other similar
activities shall not be counted as working time if all of the following conditions
are met:Attendance is outside of the employees regular working hoursAttendance is
voluntaryThe employee does not perform any productive work during such attendance.
Travel timeRada v. NLRCHilario Rada was hired as a truck driver for the
construction supervision phase of the Manila North Expressway Extension. Having
dismissed after working for 8 years with Philnor Consultants and Planters Inc.,
Rada filed a case for illegal dismissal and for overtime pay for picking up and
dropping off Philcors other employees. LA ordered his reinstatement and NLRC
reversed this decision dismissing Radas petition. The court found that Philnor
hired the petitioner as a contractual or project employee as supported by documents
which show that Rada was hired and re-hired during the continually extending
duration of the project because of his satisfactory work. His services were
rendered only for a particular project. The court however, granted the overtime
compensation to Rada claiming that the pickup and drop off was primarily for the
benefit of Philnor to delay inefficiencies. Proof of this is that when Rada was
absent, another driver replaced him for the day. If it is not part of Radas job,
there would be no need to find a replacement. NLRC affirmed except with respect to
overtime pay.
Overtime W ork/Pay Art. 87. Overtime work. W ork may be performed
beyond eight (8) hours a day provided that the employee is paid for the overtime
work, an additional compensation equivalent to his regular wage plus at least
twenty-five percent (25%) thereof. W ork performed beyond eight hours on a holiday
or rest day shall be paid an additional compensation equivalent to the rate of the
first eight hours on a holiday or rest day plus at least thirty percent (30%)
thereof.Art. 88. Undertime not offset by overtime. Undertime work on any particular
day shall not be offset by overtime work on any other day. Permission given to the
employee to go on leave on some other day of the week shall not exempt the employer
from paying the additional compensation required in this Chapter.Art. 89. Emergency
overtime work. Any employee may be required by the employer to perform overtime
work in any of the following cases:a. W hen the country is at war or when any other
national or local emergency has been declared by the National Assembly or the Chief
Executive;b. W hen it is necessary to prevent loss of life or property or in case of
imminent danger to public safety due to an actual or impending emergency in the
locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic,
or other disaster or calamity;c. W hen there is urgent work to be performed on
machines, installations, or equipment, in order to avoid serious loss or damage to
the employer or some other cause of similar nature; d. W hen the work is necessary
to prevent loss or damage to perishable goods; and e. W here the completion or
continuation of the work started before the eighth hour is necessary to prevent
serious obstruction or prejudice to the business or operations of the employer. Any
employee required to render overtime work under this Article shall be paid the
additional compensation required in this Chapter.Art. 90. Computation of additional
compensation. For purposes of computing overtime and other additional remuneration
as required by this Chapter, the "regular wage" of an employee shall include the
cash wage only, without deduction on account of facilities provided by the
employer.Book III, Rule I, Secs. 8-11 (see page 660, Azucena) (8: overtime pay:
25%, 9: Premium and Overtime pay for holiday and rest day work: not less
than 30% of his regular wage; 10: Compulsory Overtime work; 11: Computation:
regular wage without deduction of facilities provided by employer.)Overtime in
ordinary working day 87, Book III, Rule I, Secs. 8Emergency or compulsory
overtime work -89Undertime work/leave - 88Additional Compensation 87Night W ork
Art. 86. Night shift differential. Every employee shall be paid a night shift
differential of not less than ten percent (10%) of his regular wage for each hour
of work performed between ten oclock in the evening and six oclock in the
morning.Coverage/ Exclusion Sec 1 Book III, RULE II Night Shift Differential
SECTION 1. Coverage. This Rule shall apply to all employees except: (a) Those of

the government and any of its political subdivisions, including government-owned


and/or controlled corporations; (b) Those of retail and service establishments
regularly employing not more than five (5) workers; (c) Domestic helpers and
persons in the personal service of another; (d) Managerial employees as defined in
Book Three of this Code; (e) Field personnel and other employees whose time and
performance is unsupervised by the employer including those who are engaged on task
or contract basis, purely commission basis, or those who are paid a fixed amount
for performing work irrespective of the time consumed in the performance thereof.
SECTION 2. Night shift differential. An employee shall be paid night shift
differential of no less than ten per cent (10%) of his regular wage for each hour
of work performed between ten o'clock in the evening and six o'clock in the
morning. SECTION 3. Additional compensation. W here an employee is permitted or
suffered to work on the period covered after his work schedule, he shall be
entitled to his regular wage plus at least twenty-five per cent (25%) and an
additional amount of no less than ten per cent (10%) of such overtime rate for each
hour or work performed between 10 p.m. to 6 a.m. SECTION 4. Additional compensation
on scheduled rest day/special holiday. An employee who is required or permitted
to work on the period covered during rest days and/or special holidays not falling
on regular holidays, shall be paid a compensation equivalent to his regular wage
plus at least thirty (30%) per cent and an additional amount of not less than ten
(10%) per cent of such premium pay rate for each hour of work performed. SECTION 5.
Additional compensation on regular holidays. For work on the period covered
during regular holidays, an employee shall be entitled to his regular wage during
these days plus an additional compensation of no less than ten (10%) per cent of
such premium rate for each hour of work performed. SECTION 6. Relation to
agreements. Nothing in this Rule shall justify an employer in withdrawing or
reducing any benefits, supplements or payments as provided in existing individual
or collective agreements or employer practice or policy. SECTION 1. General
statement on coverage. The provisions of this Rule shall apply to all employees
in all establishments and undertakings, whether operated for profit or not, except
to those specifically exempted under Section 2 hereof. Additional Compensation Art.
86. Night shift differential. Every employee shall be paid a night shift
differential of not less than ten percent (10%) of his regular wage for each hour
of work performed between ten oclock in the evening and six oclock in the
morning.Rule II, Sec 2 3 4 5 Shell Oil Co. of the Philippines, Ltd. v. National
Labor UnionActing on a request by the National Labor Union, The industrial
relations court rendered a decision allowing a 50% in salary for the night shift
workers of Shell Oil Company. Shell Oil had to hire workers for night shifts
because the plane from abroad often land an take off at night and chores such as
supplying gasoline, lubricants and other duties are needed to be performed. Shell
invokes Commonwealth Act 444 which does not provide that night work is considered
overtime work but rather provides that it is when work goes over 8 hours a day that
compensation is required and that also, CIR has no jurisdiction.The petitioner
employees on the other hand contend that it is Commonwealth Act No. 103 that is in
force. 103 stipulates that differences arising from wages, compensation, hours of
work or conditions of employment are taken cognizance by the Court of Industrial
relations.The court concludes that CA 444 pertains only to wages or compensation
during the day of Sunday and holidays and goes on a lengthy discussion about the
effects of night work. They say that there are injurious effects of permanently
remote nightwork manifested in the later years of the employees life. The workers
social life is also disarranged, including the recreational activities of his
leisure hours and family relations. From on economic point of view, nightwork has
an adverse effect on efficiency and output. There is also a moral argument in the
case of women working out late.Night was made for rest and sleep and not for work
W eekly Rest PeriodsArt. 91. Right to weekly rest day.a. It shall be the duty of
every employer, whether operating for profit or not, to provide each of his
employees a rest period of not less than twenty-four (24) consecutive hours after
every six (6) consecutive normal work days.b. The employer shall determine and
schedule the weekly rest day of his employees subject to collective bargaining

agreement and to such rules and regulations as the Secretary of Labor and
Employment may provide. However, the employer shall respect the preference of
employees as to their weekly rest day when such preference is based on religious
grounds.Art. 92. W hen employer may require work on a rest day. The employer may
require his employees to work on any day:a. In case of actual or impending
emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic
or other disaster or calamity to prevent loss of life and property, or imminent
danger to public safety;b. In cases of urgent work to be performed on the
machinery, equipment, or installation, to avoid serious loss which the employer
would otherwise suffer;c. In the event of abnormal pressure of work due to special
circumstances, where the employer cannot ordinarily be expected to resort to other
measures; d. To prevent loss or damage to perishable goods; e. W here the nature of
the work requires continuous operations and the stoppage of work may result in
irreparable injury or loss to the employer; andf. Under other circumstances
analogous or similar to the foregoing as determined by the Secretary of Labor and
Employment.Art. 93. Compensation for rest day, Sunday or holiday work.a. W here an
employee is made or permitted to work on his scheduled rest day, he shall be paid
an additional compensation of at least thirty percent (30%) of his regular wage. An
employee shall be entitled to such additional compensation for work performed on
Sunday only when it is his established rest day.b. W hen the nature of the work of
the employee is such that he has no regular workdays and no regular rest days can
be scheduled, he shall be paid an additional compensation of at least thirty
percent (30%) of his regular wage for work performed on Sundays and holidays.c.
W ork performed on any special holiday shall be paid an additional compensation of
at least thirty percent (30%) of the regular wage of the employee. W here such
holiday work falls on the employees scheduled rest day, he shall be entitled to an
additional compensation of at least fifty per cent (50%) of his regular wage.d.
W here the collective bargaining agreement or other applicable employment contract
stipulates the payment of a higher premium pay than that prescribed under this
Article, the employer shall pay such higher rate.Book III RULE III: W eekly Rest
PeriodsSECTION 1. General statement on coverage. This Rule shall apply to all
employers whether operating for profit or not, including public utilities operated
by private persons. SECTION 2. Business on Sundays/Holidays. All establishments
and enterprises may operate or open for business on Sundays and holidays provided
that the employees are given the weekly rest day and the benefits as provided in
this Rule. SECTION 3. W eekly rest day. Every employer shall give his employees a
rest period of not less than twenty-four (24) consecutive hours after every six
consecutive normal work days. SECTION 4. Preference of employee. The preference
of the employee as to his weekly day of rest shall be respected by the employer if
the same is based on religious grounds. The employee shall make known his
preference to the employer in writing at least seven (7) days before the desired
effectivity of the initial rest day so preferred. W here, however, the choice of the
employee as to his rest day based on religious grounds will inevitably result in
serious prejudice or obstruction to the operations of the undertaking and the
employer cannot normally be expected to resort to other remedial measures, the
employer may so schedule the weekly rest day of his choice for at least two (2)
days in a month. SECTION 5. Schedule of rest day. (a) W here the weekly rest is
given to all employees simultaneously, the employer shall make known such rest
period by means of a written notice posted conspicuously in the work place at least
one week before it becomes effective. (b) W here the rest period is not granted to
all employees simultaneously and collectively, the employer shall make known to the
employees their respective schedules of weekly rest through written notices posted
conspicuously in the work place at least one week before they become effective.
SECTION 6. W hen work on rest day authorized. An employer may require any of his
employees to work on his scheduled
rest day for the duration of the following emergencies and exceptional conditions:
(a) In case of actual or impending emergencies caused by serious accident, fire,
flood, typhoon, earthquake, epidemic or other disaster or calamity, to prevent loss
of life or property, or in cases of force majeure or imminent danger to public

safety; (b) In case of urgent work to be performed on machineries, equipment or


installations to avoid serious loss which the employer would otherwise suffer; (c)
In the event of abnormal pressure of work due to special circumstances, where the
employer cannot ordinarily be expected to resort to other measures; (d) To prevent
serious loss of perishable goods; (e) W here the nature of the work is such that the
employees have to work continuously for seven (7) days in a week or more, as in the
case of the crew members of a vessel to complete a voyage and in other similar
cases; and (f) W hen the work is necessary to avail of favorable weather or
environmental conditions where performance or quality of work is dependent thereon.
No employee shall be required against his will to work on his scheduled rest day
except under circumstances provided in this Section: Provided, However, that where
an employee volunteers to work on his rest day under other circumstances, he shall
express such desire in writing, subject to the provisions of Section 7 hereof
regarding additional compensation. SECTION 7. Compensation on rest
day/Sunday/holiday. (a) Except those employees referred to under Section 2, Rule
I, Book Three, an employee who is made or permitted to work on his scheduled rest
day shall be paid with an additional compensation of at least 30% of his regular
wage. An employee shall be entitled to such additional compensation for work
performed on a Sunday only when it is his established rest day. (b) W here the
nature of the work of the employee is such that he has no regular work days and no
regular rest days can be scheduled, he shall be paid an additional compensation of
at least 30% of his regular wage for work performed on Sundays and holidays. (c)
W ork performed on any special holiday shall be paid with an additional compensation
of at least 30% of the regular wage of the employees. W here such holiday work falls
on the employee's scheduled rest day, he shall be entitled to additional
compensation of at least 50% of his regular wage. (d) The payment of additional
compensation for work performed on regular holiday shall be governed by Rule IV,
Book Three, of these regulations. (e) W here the collective bargaining agreement or
other applicable employment contract stipulates the payment of a higher premium pay
than that prescribed under this Section, the employer shall pay such higher rate.
SECTION 8. Paid-off days. Nothing in this Rule shall justify an employer in
reducing the compensation of his employees for the unworked Sundays, holidays, or
other rest days which are considered paid-off days or holidays by agreement or
practice subsisting upon the effectivity of the Code. SECTION 9. Relation to
agreements. Nothing herein shall prevent the employer and his employees or their
representatives in entering into any agreement with terms more favorable to the
employees than those provided herein, or be used to diminish any benefit granted to
the employees under existing laws, agreements, and voluntary employer practices.
Caltex Regular Employees, etc. vs. Caltex (Phils.) Inc. and NLRCCaltex Regular
Employees Association called Caltexs attention to the non payment of night shift
differential and overtime pay for work performed during a Saturday as stipulated in
their collective bargaining agreement. After promises by the company, the workers
were paid excluding the first 2 hours of Saturday. The Union filed a complaint of
unfair labor practice against Caltex because in effect they were paying regular
rates during Saturdays which was supposed to be a day of rest or day off. Caltex
claimed that Saturday was never designated as a day of rest in their CBA.LA ruled
for the Union and this decision was set aside by NLRC for lack of evidence. The
court is not asked to interpret Article III and Annex B of the CBA which provides
that Caltex agreed to pay day of rest rates for work performed on an employees
day of rest The Union mistakenly interpreted Annex B, which was intended only as
a guide, to appropriate Saturday as a day of rest. The decision of the labor
arbiter therefore was based on mere allegation by the Union. The court held that
Saturday is not a day off. Extra compensation applies only when the worker is made
to work for an excess of 40 hours per calendar week. (Union was unable to show
grave abuse of discretion in the part of NLRC.) Petition Dismissed.CoverageArt. 82.
Coverage. The provisions of this Title shall apply to employees in all
establishments and undertakings whether for profit or not, but not to government
employees, managerial employees, field personnel, members of the family of the
employer who are dependent on him for support, domestic helpers, persons in the

personal service of another, and workers who are paid by results as determined by
the Secretary of Labor in appropriate regulations. As used herein, "managerial
employees" refer to those whose primary duty consists of the management of the
establishment in which they are employed or of a department or subdivision thereof,
and to other officers or members of the managerial staff."Field personnel" shall
refer to non-agricultural employees who regularly perform their duties away from
the principal place of business or branch office of the employer and whose actual
hours of work in the field cannot be determined with reasonable certainty.Art. 91.
Right to weekly rest day.a. It shall be the duty of every employer, whether
operating for profit or not, to provide each of his employees a rest period of not
less than twenty-four (24) consecutive hours after every six (6) consecutive normal
work days.b. The employer shall determine and schedule the weekly rest day of his
employees subject to collective bargaining agreement and to such rules and
regulations as the Secretary of Labor and Employment may provide. However, the
employer shall respect the preference of employees as to their weekly rest day when
such preference is based on religious grounds.Book III RULE III W eekly Rest Periods
SECTION 1. General statement on coverage. This Rule shall apply to all employers
whether operating for profit or not, including public utilities operated by private
persons. Determination, Compulsory work, CompensationW EEKLY REST PERIODS Art. 91.
Right to weekly rest day.a. It shall be the duty of every employer, whether
operating for profit or not, to provide each of his employees a rest period of not
less than twenty-four (24) consecutive hours after every six (6) consecutive normal
work days.b. The employer shall determine and schedule the weekly rest day of his
employees subject to collective bargaining agreement and to such rules and
regulations as the Secretary of Labor and Employment may provide. However, the
employer shall respect the preference of employees as to their weekly rest day when
such preference is based on religious grounds.Art. 92. W hen employer may require
work on a rest day. The employer may require his employees to work on any day:a. In
case of actual or impending emergencies caused by serious accident, fire, flood,
typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life
and property, or imminent danger to public safety;b. In cases of urgent work to be
performed on the machinery, equipment, or installation, to avoid serious loss which
the employer would otherwise suffer;c. In the event of abnormal pressure of work
due to special circumstances, where the employer cannot ordinarily be expected to
resort to other measures;d. To prevent loss or damage to perishable goods;e. W here
the nature of the work requires continuous operations and the stoppage of work may
result in irreparable injury or loss to the employer; andf. Under other
circumstances analogous or similar to the foregoing as determined by the Secretary
of Labor and Employment.Manila Electric Company v. Public Utilities Employees
AssociationManila Electric, the petitioner, assails the decision of the CIR that
they should grant 1 day vacation with pay to every workingman who had worked for 7
consecutive days including Sundays and that because Sundays and holidays are for
rest, the CIR interposed a 50% increase in pay for work during these times.Manila
Electric contends that the decision is against the provision of Sec 4 Commonwealth
Act 444 which provides that the prohibition shall not apply to public utilities
performing some public service such a supplying gas, electricity, power, water or
providing means of transportation or communicationThe court held that the decision
of the CIR is erroneous and contrary to CA 444 because appellant is a public
utility which supplies electricity and is therefore obviously exempted from the
prohibition. They may compel workers to work on Sunday without extra compensation
because public utilities are exempted from the prohibition given that they are
required to perform a continuous service including Sundays.The purpose of the Rule
(CA 444) is to restrict the power of the CIR given in Act 103, to fix the minimum
additional compensation and to exempt public utilities affected with public
interest from payment of compensation. The rling of the CIR is therefore contrary
to law.Premium PayArt. 93. Compensation for rest day, Sunday or holiday work.a.
W here an employee is made or permitted to work on his scheduled rest day, he shall
be paid an additional compensation of at least thirty percent (30%) of his regular
wage. An employee shall be entitled to such additional

compensation for work performed on Sunday only when it is his established rest
day.b. W hen the nature of the work of the employee is such that he has no regular
workdays and no regular rest days can be scheduled, he shall be paid an additional
compensation of at least thirty percent (30%) of his regular wage for work
performed on Sundays and holidays. c. W ork performed on any special holiday shall
be paid an additional compensation of at least thirty percent (30%) of the regular
wage of the employee. W here such holiday work falls on the employees scheduled
rest day, he shall be entitled to an additional compensation of at least fifty per
cent (50%) of his regular wage.CBA on higher premium payd. W here the collective
bargaining agreement or other applicable employment contract stipulates the payment
of a higher premium pay than that prescribed under this Article, the employer shall
pay such higher rate.Holidays[ REPUBLIC ACT NO. 9492 ] amending EO 203AN ACT
RATIONALIZING THE CELEBRATION OF NATIONAL HOLIDAYS AMENDING FOR THE PURPOSE SECTION
26, CHAPTER 7, BOOK I OF EXECUTIVE ORDER NO. 292, AS AMENDED, OTHERW ISE KNOW N AS
THE ADMINISTRATIVE CODE OF 1987. Be it enacted by the Senate and House of
Representatives of the Philippines in Congress assembled:SECTION 1. Section 26,
Chapter 7, Book I of Executive Order No. 292, as amended, otherwise known as the
Administrative Code of 1987, is hereby amended to read as follows:
Sec. 26,
Regular Holidays and Nationwide Special Days. (1) Unless otherwise modified by
law, and or proclamation, the following regular holidays and special days shall be
observed in the country:Regular HolidaysNew years Day
January 1Maundy Thursday
Movable dateGood Friday
Movable dateEidul Fitr
Movable dateAraw
ng Kagitingan
Monday nearest April 9(Bataaan and Corregidor
Day)Labor Day
Monday nearest May 1Independence Day
Monday nearest June 12National Heroes Day
Last
Monday of AugustBonifacio Day
Monday nearest November 30
Christmas Day
December 25Rizal Day
Monday nearest December 30
b) Nationwide Special Holidays:Ninoy
Aquino Day
Monday nearest August 21All Saints Day
November 1Last Day of the Year
December 31In the
event the holiday falls on a W ednesday, the holiday will be observed on the Monday
of the week. If the holiday falls on a Sunday, the holiday will be observed on the
Monday that follows:Provided, That for movable holidays, the President shall issue
a proclamation, at least six months prior to the holiday concerned, the specific
date that shall be declared as a nonworking day:Provided, however, The Eidul Adha
shall be celebrated as a regional holiday in the Autonomous Region in Muslim
Mindanao. SEC. 2. All laws, orders, presidential issuances, rules and regulations
or part thereof inconsistent with this Act are hereby repealed or modified
accordingly.
SEC. 3. This Act shall take effect after fifteen (15) days
following its publication in at least two newspapers of general circulation.PD 1083
(Code of Muslim Personal Laws)Coverage/ ExclusionsArt. 94. Right to holiday pay.a.
Every worker shall be paid his regular daily wage during regular holidays, except
in retail and service establishments regularly employing less than ten (10)
workers; Book III RULE IV Holidays with PaySECTION 1. Coverage. This rule shall
apply to all employees except: (a) Those of the government and any of the political
subdivision, including government-owned and controlled corporation; (b) Those of
retail and service establishments regularly employing less than ten (10) workers;
(c) Domestic helpers and persons in the personal service of another; (d) Managerial
employees as defined in Book Three of the Code; (e) Field personnel and other
employees whose time and performance is unsupervised by the employer including
those who are engaged on task or contract basis, purely commission basis, or those
who are paid a fixed amount for performing work irrespective of the time consumed
in the performance thereof. DefinitionRetail Establishment: Rules Implementing RA
6727 par fRULES IMPLEMENTING REPUBLIC ACT NO. 6727. Pursuant to the authority
granted to the Secretary of Labor and Employment under Section 13 of Republic Act
No. 6727, otherwise known as the W age Rationalization Act, the following rules are
hereby issued for guidance and compliance by all concerned:Pursuant to the
authority granted to the Secretary of Labor and Employment under Section 13 of

Republic Act No. 6727, otherwise known as the W age Rationalization Act, the
following rules are hereby issued for guidance and compliance by all concerned:
Definition of Terms. As used in this Rules -f."Retail Establishment" is one
principally engaged in the sale of goods to end-users for personal or household
use;Service Establishment: par gg."Service Establishment" is one principally
engaged in the sale of service to individuals for their own or household use and is
generally recognized as such;Mantrade/FMMC Division Employees and W orkers Union v.
Arbitator Bacungan and Mantrade CorpMantrade Union questions the validity of Art 94
of the LC providing holiday pay. The respondent Corporation says that the
petitioner is barred from pursuing the present action regarding the holiday pay
because it was already held that any stipulation of the arbitrators award shall be
final and executory under Art 2044, CC. Respondent Arbitrator stated that although
monthly salaried employees are not among those excluded in Art 94 of the LC, Sec 2
Rule IV Book III of the omnibus rules provides otherwise (SECTION 2. Status of
employees paid by the month. Employees who are uniformly paid by the month,
irrespective of the number of working days therein, with a salary of not less than
the statutory or established minimum wage shall be paid for all days in the month
whether worked or not. For this purpose, the monthly minimum wage shall not be less
than the statutory minimum wage multiplied by 365 days divided by twelve.) The
court held that In Insular Bank of Asia v. Inciong, the Section was considered void
because it AMENDED the provision of holiday pay by including monthly paid employees
thus enlarging the scope. It is clear in Art 94, LC that monthly paid employees are
not excluded from the benefits of holiday pay. Chartered Bank Employees Association
v. Ople also reiterated this ruling. Therefore, the court concluded that it is the
legal duty of the Corporation to grant the holiday pay. The decision of the
Arbitrator is set aside. Holiday PayArt. 94. Right to holiday pay. b. The employer
may require an employee to work on any holiday but such employee shall be paid a
compensation equivalent to twice his regular rate; andFaculty in Private School
Book III Rule IV SECTION 8. Holiday pay of certain employees. (a) Private school
teachers, including faculty members of colleges and universities, may not be paid
for the regular holidays during semestral vacations. They shall, however, be paid
for the regular holidays during Christmas vacation; (b) W here a covered employee,
is paid by results or output, such as payment on piece work, his holiday pay shall
not be less than his average daily earnings for the last seven (7) actual working
days preceding the regular holiday; Provided, However, that in no case shall the
holiday pay be less than the applicable statutory minimum wage rate. (c) Seasonal
workers may not be paid the required holiday pay during off-season when they are
not at work. (d) W orkers who have no regular working days shall be entitled to the
benefits provided in this Rule. Jose Rizal College v. NLRCThe National Alliance of
Teachers and Office W orkers (NATOW ) in behalf of the faculty of Jose Rizal College,
filed a complaint with the Ministry of Labor for non-payment of holiday pay. The
issue in the case is W ON school faculty whoa re aid per lecture per hour are
entitled to holiday pay. Petitioner maintains that it is not covered by Book V of
the LC and that its hourly paid employees are paid on a contact basis. The
Solicitor General Argued that holiday pay applies to all employees except those in
retail/ service establishments because the purpose of holiday pay is to prevent
diminution of the monthly income of the workers on account of work interruptions;
although the worker is forced to take a rest, he should earn what he should earn.
Under Art 94,LC and Rule IV Book III Section A, although JRC is a non-profit
institution, it is under the obligation to give pay even on unworked regular
holidays to the hourly paid faculty members because of the purpose of the holiday
pay as stated earlier. The court held that for the hourly paid teachers, it is
already understood that when they entered their contracts, they should not expect
payment for the no class days or the regular holidays. For Special Public
holidays, the regular class day is cancelled and the hourly paid teacher does not
earn what he should earn that day. Therefore, for special holidays, the petitioner
should pay their hourly paid teachers. SECTION 8. Holiday pay of certain
employees. (a) Private school teachers, including faculty members of colleges and
universities, may not be paid for the regular holidays during semestral vacations.

They shall, however, be paid for the regular holidays during Christmas vacation;
(b) W here a covered employee, is paid by results or output, such as payment on
piece work, his holiday pay shall not be less than his average daily earnings for
the last seven (7) actual working days preceding the regular holiday; Provided,
However, that in no case shall the holiday pay be less than the applicable
statutory minimum wage rate. (c) Seasonal workers may not be paid the required
holiday pay during off-season when they are not at work.
(d) W orkers who have no regular working days shall be entitled to the benefits
provided in this Rule. Divisor as FactorTrans-Asia Phil Employees Association
(TAPEA)v. NLRCTAPEA entered into a Collective Bargaining Agreement with their
employer with the stipulation that on a legal holiday, the employee is entitled to
200% of the regular daily wage and a 60% premium pay. Due to non-compliance of
their employer, TAPEA filed a complaint for the non inclusion of the holiday pays
in their monthly pay. They showed the Employees manual, the appointment papers of
their employer as well as the CBA itself as proof that their employer does not
include their holiday pay in their monthly salary. TransAsia contended that these
do not prove their non-payment of holiday pay stating that they have used the 286
divisor in computing for the employees overtime pay which is based on RA 6640
where 262 is used instead of 286. (52 weeks/yr x 44 hours per week 8 work hours
per day = 286); (262 + 26 working Saturdays of employees = 286, their divisor). The
LA dismissed the complaint and was affirmed by the NLRC. Thus this petition. The
court held that the use of 286 clearly shows the inclusion of the employees
benefits and deductions in Trans-Asias computation. The court upheld the decision
of the NLRC with the slight modification of changing the divisor to 287 to include
the regular and special holidays as set in EO 203. Sunday: Art. 93. Compensation
for rest day, Sunday or holiday work.a. W here an employee is made or permitted to
work on his scheduled rest day, he shall be paid an additional compensation of at
least thirty percent (30%) of his regular wage. An employee shall be entitled to
such additional compensation for work performed on Sunday only when it is his
established rest day.b. W hen the nature of the work of the employee is such that he
has no regular workdays and no regular rest days can be scheduled, he shall be paid
an additional compensation of at least thirty percent (30%) of his regular wage for
work performed on Sundays and holidays.Book III Rule III SECTION 2. Business on
Sundays/Holidays. All establishments and enterprises may operate or open for
business on Sundays and holidays provided that the employees are given the weekly
rest day and the benefits as provided in this Rule. SECTION 9. Regular holiday
falling on rest days or Sundays. (a) A regular holiday falling on the employee's
rest day shall be compensated accordingly. (b) W here a regular holiday falls on a
Sunday, the following day shall be considered a special holiday for purposes of the
Labor Code, unless said day is also a regular holiday. W ellington Investment Inc.
v. TrajanoA routine inspection by the Labor enforcement officer held that
W ellington flour wills did not pay regular holidays falling on Sunday for monthly
paid employees. The petitioner raised the issue of W ON a monthly paid employee
receiving a fixed monthly compensation is entitled to additional pay aside from his
usual holiday pay whenever a regular holiday pay falls on a Sunday. The petitioner
contends that it uses the 314 factor and that it undeniably covers and already
includes payment for all the working days of the month including the 10 unworked
regular holidays. On a motion for reconsideration, the Undersecretary affirmed the
order of the regional director finding the divisor of W ellington does not reflect
the actual working days in a year.
The court held that W ellington was paying the holiday pay according to Art 94 of
LC. That at the time of inspection, wellington was already paying its employees a
salary not less than the statutory or established minimum wage. The 314 facor
simply deducts the 51 Sundays from the 365 days per year to determine the monthly
salary which in effect leaves no day unaccounted for during the 365 day year. To
uphold the ruling of the undersecretary that the 317 factor should be used in the
year of 1988 (because of the regular holidays falling on a Sunday that year) would
make it a year of 368 days. The public respondents have acted beyond their
authority in using the power to order and administer given to the Regional director

under Sec 2 Rule X Book III. Undersecretary and Regional Directors orders are
nullified.Muslim HolidayPD 1083 169-172Article 169. Official Muslim holidays. The
following are hereby recognized as legal Muslim holidays: (a) 'Amun Jadid (New
Year), which falls on the first day of the first lunar month of Muharram; (b)
Maulid-un-Nabi (Birthday of the Prophet Muhammad), which falls on the twelfth day
of the third lunar month of Rabi-ul-Awwal; (c) Lailatul Isra W al Mi'raj (Nocturnal
Journey and Ascension of the Prophet Muhammad), which falls on the twenty-seventh
day of the seventh lunar month of Rajab; (d) 'Id-ul-Fitr (Hari Raya Pausa), which
falls on the first day of the tenth lunar month of Shawwal, commemorating the end
of the fasting season; and (e) 'Id-ul-Adha (Hari Raja Haji), which falls on the
tenth day of the twelfth lunar month of Dhu 1-Hijja. Article 170. Provinces and
cities where officially observed. (1) Muslim holidays shall be officially observed
in the Provinces of Basilan, Lanao del Norte, Lanao del Sur, Maguindanao, North
Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi, Zamboanga del Norte and Zamboanga del
Sur, and in the Cities of Cotabato, Iligan, Marawi, Pagadian, and Zamboanga and in
such other Muslim provinces and cities as may hereafter be created. (2) Upon
proclamation by the President of the Philippines, Muslim holidays may also be
officially observed in other provinces and cities. Article 171. Dates of
observance. The dates of Muslim holidays shall be determined by the Office of the
President of the Philippines in accordance with the Muslim Lunar Calendar (Hijra).
Article 172. Observance of Muslim employees. (1) All Muslim government officials
and employees in places other than those enumerated under Article 170 shall also be
excused from reporting to office in order that they may be able to observe Muslim
holidays.(2) The President of the Philippines may, by proclamation, require private
offices, agencies or establishments to excuse their Muslim employees from reporting
for work during a Muslim holiday without reduction in their usual compensation.SMC
v. CAThe Department of Labor and Employment conducted a routine inspection in San
Miguel, Iligan finding that there was underpayment by SMC of regular Muslim Holiday
pay to its employees. Director of DOLE issue a compliance order from which SMC
filed an appeal. SMCs appeal was dismissed. CA ruled that SMC should pay muslim
holiday (150% of basic salary) thus this petition for certiorari. The court upheld
the decision of the CA citing PD 1083 (Sec 169-170) and 94, LC. Petitioner asserts
that the provisions of PD 1083 (Art 3(3) of the PD) should be applicable only to
muslims. The court held however, that there should be no distinction between
muslims and non-m as regard the payment of benefits. (Only if maam asks: Given Art
128 of the LC as amended by RA 7730, Regional director Macarayas issuing of the
compliance order is within his power) The petition is dismissed.AbsencesBook III
Rule IV SECTION 6. Absences. (a) All covered employees shall be entitled to the
benefit provided herein when they are on leave of absence with pay. Employees who
are on leave of absence without pay on the day immediately preceding a regular
holiday may not be paid the required holiday pay if he has not worked on such
regular holiday. (b) Employees shall grant the same percentage of the holiday pay
as the benefit granted by competent authority in the form of employee's
compensation or social security payment, whichever is higher, if they are not
reporting for work while on such benefits. (c) W here the day immediately preceding
the holiday is a non-working day in the establishment or the scheduled rest day of
the employee, he shall not be deemed to be on leave of absence on that day, in
which case he shall be entitled to the holiday pay if he worked on the day
immediately preceding the non-working day or rest day. SECTION 10. Successive
regular holidays. W here there are two (2) successive regular holidays, like Holy
Thursday and Good Friday, an employee may not be paid for both holidays if he
absents himself from work on the day immediately preceding the first holiday,
unless he works on the first holiday, in which case he is entitled to his holiday
pay on the second holiday. Non-W orking day/Schedule. Rest Day. Section 6 cBook III
Rule IV SECTION 6. Absences. (c) W here the day immediately preceding the holiday
is a non-working day in the establishment or the scheduled rest day of the
employee, he shall not be deemed to be on leave of absence on that day, in which
case he shall be entitled to the holiday pay if he worked on the day immediately
preceding the non-working day or rest day. Service Incentive Leave Book III RULE V

Service Incentive LeaveSECTION 1. Coverage. This rule shall apply to all


employees except: (a) Those of the government and any of its political
subdivisions, including government-owned and controlled corporations; (b) Domestic
helpers and persons in the personal service of another; (c) Managerial employees as
defined in Book Three of this Code; (d) Field personnel and other employees whose
performance is unsupervised by the employer including those who are engaged on task
or contract basis, purely commission basis, or those who are paid a fixed amount
for performing work irrespective of the time consumed in the performance thereof;
(e) Those who are already enjoying the benefit herein provided; (f) Those enjoying
vacation leave with pay of at least five days; and (g) Those
employed in establishments regularly employing less than ten employees. SECTION 2.
Right to service incentive leave. Every employee who has rendered at least one
year of service shall be entitled to a yearly service incentive leave of five days
with pay. SECTION 3. Definition of certain terms. The term "at least one-year
service" shall mean service for not less than 12 months, whether continuous or
broken reckoned from the date the employee started working, including authorized
absences and paid regular holidays unless the working days in the establishment as
a matter of practice or policy, or that provided in the employment contract is less
than 12 months, in which case said period shall be considered as one year. SECTION
4. Accrual of benefit. Entitlement to the benefit provided in this Rule shall
start December 16, 1975, the date the amendatory provision of the Code took effect.
SECTION 5. Treatment of benefit. The service incentive leave shall be commutable
to its money equivalent if not used or exhausted at the end of the year. SECTION 6.
Relation to agreements. Nothing in the Rule shall justify an employer from
withdrawing or reducing any benefits, supplements or payments as provided in
existing individual or collective agreements or employer's practices or policies.
Coverage Art. 95. Right to service incentive leave.a. Every employee who has
rendered at least one year of service shall be entitled to a yearly service
incentive leave of five days with pay.b. This provision shall not apply to those
who are already enjoying the benefit herein provided, those enjoying vacation leave
with pay of at least five days and those employed in establishments regularly
employing less than ten employees or in establishments exempted from granting this
benefit by the Secretary of Labor and Employment after considering the viability or
financial condition of such establishment.c. The grant of benefit in excess of that
provided herein shall not be made a subject of arbitration or any court or
administrative action.Makati Haberdashery Inc. v. NLRCRespondents have been working
for Makati Haberdashery as tailors, seamstress, basters and plantsadoras. They are
paid on a piece rate basis and are given a daily allowance of 3 pesos to report for
work before 9:30 am everyday. They are required to work from Monday to Saturday and
even Sundays on peak periods. The workers filed a complaint for underpayment,
nonpayment of overtime work, non payment of service incentive pay. During the
pendency of the case, respondent Pelobello left a jusi barong tagalog with Zapata
who admitted he as copying the design. A memorandum was issued to each of them
which they did not reply to, instead, they did not report for work and thus they
were dismissed by petitioners. LA found respondents to have violated cost of living
allowance, service incentive leave pay and 13th month. This was affirmed by NLRC.
Thus this petition. The court found that the petitioners were the employers of the
respondents using the four fold test and the memorandum as the courts basis. They
also found that the Respondents are entitled to the minimum wage, COLA and 13th
month pay but they are NOT entitled to service incentive leave pay because as
piece-rate workers, they are being paid at a fixed amount irrespective of the time
consumed. They fall under the exceptions in Book III Rule V 1(d).Also, their
blatant disregard of their employers memorandum is an open defiance to their
lawful orders. It should not be assumed that every labor dispute would be decided
in favor of labor. Haberdashery had lawful ground in terminating them. Decision of
NLRC modified. Complaint for illegal dismissal dismissed.Labor Congress v. NLRC
supra99 rank and file employees of Empire food products were dismissed due to
abandonment of post which led to the spoiling of the cheese curls. They filed a
case of illegal dismissal and underpayment of wages which the LA and the NLRC

dismissed due to the testimonies of the company guard as well as the management and
that the employees, being piece workers or pakiao workers, are not entitled to
underpayment of wages. Upon appeal by the employees under the Office of the
Solicitor General, it was shown to the court that the LA disregarded the
testimonies of the 99 complainants because he was of the perception that he would
not be subjected to the rebuke of the NLRC if it were not for the employees. The
court held that even if petitioners are pakiao workers does not imply that they are
not regular employees. Given the fact that they perform necessary operations in the
day to day operations of Empire food, makes them regular employees. Pieceworkers,
however, are not entitled to overtime pay if the output rates are in accordance
with Sec 8 Rule VII Book III or fixed rates of the Secretary of Labor (Sec 2(e)
Rule I Book III). The court found however, that Empire Foods did not adhere to the
standard in Section 8 nor with the rates of the Sec. of Labor therefore, they are
not exempted from giving overtime pay. Petition granted.Section 1 (e), Rule II,
Sec. 1(e) Rule IV and Sec. 1(d), Rule V of Book IIThe Rules Implementing the Labor
Code exclude certain employees from receiving benefits such as nighttime pay,
holiday pay, service incentive leave# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1998/may1998/123938.htm" \l
"_edn17" \o "" ## and 13th month pay,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1998/may1998/123938.htm" \l
"_edn18" \o "" ## inter alia, field personnel and other employees whose time and
performance is unsupervised by the employer, including those who are engaged on
task or contract basis, purely commission basis, or those who are paid a fixed
amount for performing work irrespective of the time consumed in the performance
thereof. Plainly, petitioners as piece-rate workers do not fall within this
group. As mentioned earlier, not only did petitioners labor under the control of
private respondents as their employer, likewise did petitioners toil throughout the
year with the fulfillment of their quota as supposed basis for compensation.
Further, in Section 8 (b), Rule IV, Book III which we quote hereunder, piece
workers are specifically mentioned as being entitled to holiday pay.Requirements
Paternity LeaveRA 8187, Sec 1-6 AND implementing guidelinesCoverageRequirements
Employment- related rights and benefitsParental LeaveRA 8972 (Solo Parents W elfare
Act of 2000)CoverageRequirementsEmployment- related rights and benefitsVictims
LeaveRA 9262 Sec 43 March 08, 2004 AN ACT DEFINING VIOLENCE AGAINST W OMEN AND THEIR
CHILDREN, PROVIDING FOR PROTECTIVE MEASURES FOR VICTIMS, PRESCRIBING PENALTIES
THEREFORE, AND FOR OTHER PURPOSESSECTION 43. Entitled to Leave. Victims under
this Act shall be entitled to take a paid leave of absence up to ten (10) days in
addition to other paid leaves under the Labor Code and Civil Service Rules and
Regulations, extendible when the necessity arises as specified in the protection
order.Any employer who shall prejudice the right of the person under this section
shall be penalized in accordance with the provisions of the Labor Code and Civil
Service Rules and Regulations. Likewise, an employer who shall prejudice any person
for assisting a co-employee who is a victim under this Act shall likewise be liable
for discrimination.Implementing Rules Section 42. Ten-day paid leave in addition to
other leave benefits. - At any time during the application of any protection order,
investigation, prosecution and/or trial of the criminal case, a victim of VAW C who
is employed shall be entitled to a paid leave of up to ten (10) days in addition to
other paid leaves under the Labor Code and Civil Service Rules and Regulations and
other existing laws and company policies, extendible when the necessity arises as
specified in the protection order. The Punong Barangay/kagawad or prosecutor or the
Clerk of Court, as the case may be, shall issue a certification at no cost to the
woman that such an action is pending, and this is all that is required for the
employer to comply with the 10-day paid leave. For government employees, in
addition to the aforementioned certification, the employee concerned must file an
application for leave citing as basis R.A. 9262. The administrative enforcement of
this leave entitlement shall be considered within the jurisdiction of the Regional
Director of the DOLE under Article 129 of the Labor Code of the Philippines, as
amended, for employees in the private sector, and the Civil Service Commission, for
government employees.The availment of the ten day-leave shall be at the option of

the woman employee, which shall cover the days that she has to attend to medical
and legal concerns. Leaves not availed of are noncumulative and not convertible to
cash.The employer/agency head who denies the application for leave, and who shall
prejudice the victim-survivor or any person for assisting a co-employee who is a
victim-survivor under the Act shall be held liable for discrimination and violation
of R.A 9262.The provision of the Labor Code and the Civil Service Rules and
Regulations shall govern the penalty to be imposed on the said employer/agency
head.Service Charges Art. 96. Service charges. All service charges collected by
hotels, restaurants and similar establishments shall be distributed at the rate of
eighty-five percent (85%) for all covered employees and fifteen percent (15%) for
management. The share of the employees shall be equally distributed among them. In
case the service charge is abolished, the share of the covered employees shall be
considered integrated in their wages.Book III Rule VI Service ChargesSECTION 1.
Coverage. This rule shall apply only to establishments collecting service charges
such as hotels, restaurants, lodging
houses, night clubs, cocktail lounge, massage clinics, bars, casinos and gambling
houses, and similar enterprises, including those entities operating primarily as
private subsidiaries of the Government. SECTION 2. Employees covered. This rule
shall apply to all employees of covered employers, regardless of their positions,
designations or employment status, and irrespective of the method by which their
wages are paid except to managerial employees. As used herein, a "managerial
employee" shall mean one who is vested with powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign, or discipline employees or to effectively recommend such
managerial actions. All employees not falling within this definition shall be
considered rank-and-file employees. SECTION 3. Distribution of service charges.
All service charges collected by covered employers shall be distributed at the rate
of 85% for the employees and 15% for the management. The 85% shall be distributed
equally among the covered employees. The 15% shall be for the disposition by
management to answer for losses and breakages and distribution to managerial
employees at the discretion of the management in the latter case. SECTION 4.
Frequency of distribution. The shares referred to herein shall be distributed and
paid to the employees not less than once every two (2) weeks or twice a month at
intervals not exceeding sixteen (16) days. SECTION 5. Integration of service
charges. In case the service charges is abolished the share of covered employees
shall be considered integrated in their wages. The basis of the amount to be
integrated shall be the average monthly share of each employee for the past twelve
(12) months immediately preceding the abolition of withdrawal of such charges.
SECTION 6. Relation to agreements. Nothing in this Rule shall prevent the
employer and his employees from entering into any agreement with terms more
favorable to the employees than those provided herein, or be used to diminish any
benefit granted to the employees under existing laws, agreement and voluntary
employer practice. SECTION 7. This rule shall be without prejudice to existing,
future collective bargaining agreements. Nothing in this rule shall be construed to
justify the reduction or diminution of any benefit being enjoyed by any employee at
the time of effectivity of this rule. Covered Employees - 96Sharing - 96Minimum
W ages and W age Fixing Machinery 97-119, Omnibus Rules Book III Rules VII-VIII
Minimum W ages 99Art. 99. Regional minimum wages. The minimum wage rates for
agricultural and nonagricultural employees and workers in each and every region of
the country shall be those prescribed by the Regional Tripartite W ages and
Productivity Boards. (As amended by Section 3, Republic Act No. 6727, June 9,
1989).1987 Constitution, ARTICLE XIII LABORSection 3. The State shall afford full
protection to labor, local and overseas, organized and unorganized, and promote
full employment and equality of employment opportunities for all. It shall
guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane
conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by

law. The State shall promote the principle of shared responsibility between workers
and employers and the preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual compliance therewith to
foster industrial peace. The State shall regulate the relations between workers and
employers, recognizing the right of labor to its just share in the fruits of
production and the right of enterprises to reasonable returns to investments, and
to expansion and growth.General PrinciplesNo work, no pay OR A fair days wage for
a fair days laborAtok Big W edge Mining Co. Inc. v. Atok Big W edge Mutual Benefit
AssociationA demand was sent to Atok Big W edge Mining Corp by the Officers of the
companys union which the CIR fixed the wage at P3.20 declaring that additional
compensation representing efficiency bonus should not be included as part of the
wage.The court ruled ruling that P2.58 as provided by RA 602 is only the minimum
amount needed by the laborer and his family AND that a persons needs increase as
his means increase. That the law guarantees the laborer a fair and just wage
therefore the minimum must be fair and just. The extra amount of P0.22 a day is not
excessive for the purpose of improving the workers mode of living.As for the
efficiency bonus, it should not be part of the minimum wage the same as living
quarters because the bonus is given when actual work accomplished is efficient and
is paid as a prize, therefore not part of the wage. Petition dismissed.Aklan
Electric Corp., Inc. v. NLRCThe main office in Lezo. Aklan, was, BY RESOLUTION,
temporarily moved to Kalibo Aklan because it was dangerous to hold office at Lezo
during the time. Despite the resolution, a majority of the workers continued to
report at Lezo and were not paid their wages. W hen it was safe the work at Lezo
again, the workers and the office were removed from Kalibo. Herein complainants
however, reported for work at Lezo and were not paid their salaries from Apr to May
1993. Complainant and 163 other workers submitted a complaint for non-payment of
wages. LA dismissed complaint. NLRC reversed the decision of the LA and ordered AEC
to pay wages. The petitioner assailed the decision in this petition for certiorari
saying that NLRC committed grave abuse of discretion when it reversed the findings
of the LA that the workers refused to work under the lawful orders of AEOs
management and therefore, they are not covered by the no work, no pay claim for
unpaid wages. The court found that the letter of the exchange of letters between
Leyson (one of the complainants) and Mationg (the general manager), as well as the
computation used as basis for the request of the unpaid wages are self serving and
that the temporary resolution of AEO should be given credence. If there is no work
performed by the employee there can be no wage pay unless the laborer was able
willing and ready to work but was ILLEGALLY locked out, suspended or dismissed. In
this case, the company legally transferred it business to Kalibo without prejudice
to its workers. NLRC decision reversed.Equal pay for work of equal value 135, 248
Art. 135. Discrimination prohibited. It shall be unlawful for any employer to
discriminate against any woman employee with respect to terms and conditions of
employment solely on account of her sex.The following are acts of discrimination:a.
Payment of a lesser compensation, including wage, salary or other form of
remuneration and fringe benefits, to a female employees as against a male employee,
for work of equal value; andb. Favoring a male employee over a female employee with
respect to promotion, training opportunities, study and scholarship grants solely
on account of their sexes. Criminal liability for the willful commission of any
unlawful act as provided in this Article or any violation of the rules and
regulations issued pursuant to Section 2 hereof shall be penalized asprovided in
Articles 288 and 289 of this Code: Provided, That the institution of any criminal
action under this provision shall not bar the aggrieved employee from filing an
entirely separate and distinct action for money claims, which may include claims
for damages and other affirmative reliefs. The actions hereby authorized shall
proceed independently of each other. (As amended by Republic Act No. 6725, May 12,
1989)Art. 248. Unfair labor practices of employers. It shall be unlawful for an
employer to commit any of the following unfair labor practice:a. To interfere with,
restrain or coerce employees in the exercise of their right to selforganization;b.
To require as a condition of employment that a person or an employee shall not join
a labor organization or shall withdraw from one to which he belongs;c. To contract

out services or functions being performed by union members when such will interfere
with, restrain or coerce employees in the exercise of their rights to
selforganization;d. To initiate, dominate, assist or otherwise interfere with the
formation or administration of any labor organization, including the giving of
financial or other support to it or its organizers or supporters;e. To discriminate
in regard to wages, hours of work and other terms and conditions of employment in
order to encourage or discourage membership in any labor organization. Nothing in
this Code or in any other law shall stop the parties from requiring membership in a
recognized collective bargaining agent as a condition for employment, except those
employees who are already members of another union at the time of the signing of
the collective bargaining agreement. Employees of an appropriate bargaining unit
who are not members of the recognized collective bargaining agent may be assessed a
reasonable fee equivalent to the dues and other fees paid by members of the
recognized collective bargaining agent, if such non-union members accept the
benefits under the collective bargaining agreement: Provided, that the individual
authorization required under Article 242, paragraph (o) of this Code shall not
apply to the non-members of the recognizedcollective bargaining agent;f. To
dismiss, discharge or otherwise prejudice or discriminate against an employee for
having given or being about to give testimony under this Code; g. To violate the
duty to bargain
collectively as prescribed by this Code;h. To pay negotiation or attorneys fees
to the union or its officers or agents as part of the settlement of any issue in
collective bargaining or any other dispute; ori. To violate a collective bargaining
agreement.The provisions of the preceding paragraph notwithstanding, only the
officers and agents of corporations, associations or partnerships who have actually
participated in, authorized or ratified unfair labor practices shall be held
criminally liable. (As amended by Batas Pambansa Bilang 130, August 21, 1981)Intl
School Alliance of Education v. Sec. Quisumbing (supra) Local Hires of the ISchool
claim discrimination in pay as compared to foreign hires (those who are hired from
abroad to do expatriate teaching here) who earn 25% more than them and are entitled
to benefits such as housing. The court ruled that salaries could not be used to
entice foreign hires. (but lodging is okay) public policy abhors inequality and
discrimination. Foreign hires do not perform 25% more efficiently and thus should
be paid equal pay for work of equal value.Form: agreement for compensation of
services Art 97 (f)Art. 97. Definitions. As used in this Title:f. "W age" paid to
any employee shall mean the remuneration or earnings, however designated, capable
of being expressed in terms of money, whether fixed or ascertained on a time, task,
piece, or commission basis, or other method of calculating the same, which is
payable by an employer to an employee under a written or unwritten contract of
employment for work done or to be done, or for services rendered or to be rendered
and includes the fair and reasonable value, as determined by the Secretary of Labor
and Employment, of board, lodging, or other facilities customarily furnished by the
employer to the employee. "Fair and reasonable value" shall not include any profit
to the employer, or to any person affiliated with the employer.Arms Taxi v. NLRC
Ludivico C. Culla was hired by the Tanongon spouses to work as a mechanic, shop
manager, garage caretaker etc in their taxi business and he was paid P5K a month.
His quarters were forced open without his consent and he was ejected from his
living quarters there and was dismissed by the spouses. Culla filed a complaint
saying that his ejectment and dismissal were illegal and he prayed for
reinstatement with backwages as well as his 15% commission of the gross income of
the tax business. Tanongon spouses denied that Culla was their employee. LA found
for Culla but denied 13th month pay, over time pay and 15% commission. Both parties
appealed to the NLRC which affirmed the LA. The court holds that salary is a fixed
compensation for regular work whereas commission is a percentage or allowance made
to a factor or agent transacting business for another. If it were true that he had
commission he must show memorandum to prove it and he should not have waited for 6
years to claim it. Also, Culla was found to be an employee and is entitled to
reinstatement and full backwages. Petition dismissed.CoverageArt. 97. Definitions.
As used in this Title:b. "Employer" includes any person acting directly or

indirectly in the interest of an employer in relation to an employee and shall


include the government and all its branches, subdivisions and instrumentalities,
all government-owned or controlled corporations and institutions, as well as nonprofit private institutions, or organizations.c. "Employee" includes any individual
employed by an employer.e. "Employ" includes to suffer or permit to work. 98.
Application of Title. This Title shall not apply to farm tenancy or leasehold,
domesticservice and persons working in their respective homes in needle work or in
any cottage industryduly registered in accordance with law.Book III Rule VII
SECTION 3. Phil. Fisheries Development Authority v. NLRCPFD entered into a contract
with Odin Security Agency for the security services of its Iloilo Fishing Port
which was renewable unless terminated by either party. W age order number 6 was
enforced, increasing the wages for security, janitorial and similar service
contracts prompting the respondents asked for an adjustment of the contract, which
was ignored by the petitioners. Thus, Odin filed a complaint for unpaid amounts of
re-adjustment rate under W age Order No. 6. LA dismissed case claiming that the
petitioner is a government owned corporation and should be under the Civil Service
Commission and not the NLRC. NLRC reversed. This court agrees because the guards
are not employees of the petitioner but are contractual employees of Odin working
for PFD therefore under the scope of the NLRC. The employees must be guaranteed
wages due them for the performance of any work and it is the Odin as the employers
duty to know the labor laws and adequacy of compensation. Odin and PFD are held
jointly and severally liable (1/2, because Odin entered into a contract without
taking W age O.N. 6 into consideration. Costs against petitioner.Minimum W ageArt.
99. Regional minimum wages. The minimum wage rates for agricultural and
nonagricultural employees and workers in each and every region of the country shall
be those prescribed by the Regional Tripartite W ages and Productivity Boards. (As
amended by Section 3, Republic Act No. 6727, June 9, 1989).Art. 61. Contents of
apprenticeship agreements. Apprenticeship agreements, including the wage rates of
apprentices, shall conform to the rules issued by the Secretary of Labor and
Employment. The period of apprenticeship shall not exceed six months.
Apprenticeship agreements providing for wage rates below the legal minimum wage,
which in no case shall start below 75 percent of the applicable minimum wage, may
be entered into only in accordance with apprenticeship programs duly approved by
the Secretary of Labor and Employment. The Department shall develop standard model
programs of apprenticeship. (As amended by Section 1, Executive Order No. 111,
December 24, 1986)Art. 75. Learnership agreement. Any employer desiring to employ
learners shall enter into a learnership agreement with them, which agreement shall
include: c. The wages or salary rates of the learners which shall begin at not less
than seventy-five percent (75%) of the applicable minimum wage; and The learnership
agreement shall be subject to inspection by the Secretary of Labor and Employment
or his duly authorized representative.Art. 80. Employment agreement. Any employer
who employs handicapped workers shall enter into an employment agreement with them,
which agreement shall include:1. The names and addresses of the handicapped workers
to be employed;2. The rate to be paid the handicapped workers which shall not be
less than seventy five (75%) percent of the applicable legal minimum wage;W age
Order NO. 14RA 7323 of 1992 AN ACT TO HELP POOR BUT DESERVING STUDENTS PURSUE THEIR
EDUCATION BY ENCOURAGING THEIR EMPLOYMENT DURING SUMMER AND/OR CHRISTMAS VACATIONS,
THROUGH INCENTIVES GRANTED TO EMPLOYERS, ALLOW ING THEM TO PAY ONLY SIXTY PER CENTUM
OF THEIR SALARIES OR W AGES AND THE FORTY PER CENTUM THROUGH EDUCATION VOUCHERS TO
BE PAID BY THE GOVERNMENT, PROHIBITING AND PENALIZING THE FILING OF FRAUDULENT OR
FICTITIOUS CLAIMS AND FOR OTHER PURPOSESSection 2. Sixty per centum (60%) of said
salary or wage shall be paid by the employer in cash and forty per centum be
applicable in the payment for his tuition fees and books in any educational
institution for secondary, tertiary, vocational or technological education. The
amount of the education voucher shall be paid by the government to the educational
institutionconcerned within thirty (30) days from its presentation to the officer
or agency designated by the Secretary of Finance.The voucher shall not be
transferable except when the payee thereof dies or for a justifiable cause stops in
his duties in which case it can be transferred to his brothers or sisters. If there

be none, the amount thereof shall be paid his heirs or to the payee himself, as the
case may be.Book III Rule VII Determination of Compliance with minimum wageIran v.
NLRCAntonio Iran is engaged in Softdrinks merchandising and distribution in Cebu
and they employ truck drivers who double as salesmen who receive commissions per
case sold. W hile conducting an audit, Iran noted that there were cash shortages and
disallowed employees to go on their respective routes. They stopped reporting for
work and Iran construed this as abandonment of post and he filed estafa charges
against them. Complaints were filed against Iran for illegal dismissal and
underpayment of wages. LA ruled for Iran but ruled that the 13th month pay was not
paid. Both parties appealed to NLRC. Iran presented vouchers signed by the
employees showing payment of 13th month pay while respondents claim that they were
illegally dismissed. NLRC affirmed the validity of dismissal but said that the same
did not comply with proper procedure and that commissions are not included in the
minimum wage already given and thus still demandable. According to Art 97, f,
commissions are part of wages. The commission earned by private respondents selling
soft drinks must be considered part of the wages paid them there is no law
mandating that the commissions should be given AFTER the wage as contended by the
NLRC. Also, vouchers presented only cover 1 year and thus are admissible only for
that year. The decision is reversed and set aside, remanded to the LA for
determination of proper wages.Facilities and Supplements or AllowancesBook III Rule
VII Sec 4-7Millares v. NLRC and PICOPPetitioners are the 116 workers of Paper
Industries Corp (PICOP) who were terminated in the retrenchment of the respondents
due to major financial setbacks. Petitioners now ask that the allowances they
received on a monthly basis should be included in the computation
of their separation pay. LA granted the petition and NLRC reversed said decision
by decreeing that allowances are not part of the salary base in computing the
separation pay. In this petition for certiorari, petitioners contend that the
allowances are part of the definition of facilities in 97,f of the LC defining
wage. The court here clarifies that the retrenchment pay under 283 is not
synonymous to wage in Art 97f. The receipt of an allowance does not ipso facto
characterize it as regular and forming part of the salary. Also, the disputed
allowance was not regularly received by petitioners and thus there is really no
reason for petitioners to claim what is not part of their salary. Petition
Dismissed.Cash W age/ Commission97 (f)Art. 97. Definitions. As used in this Title:f.
"W age" paid to any employee shall mean the remuneration or earnings, however
designated, capable of being expressed in terms of money, whether fixed or
ascertained on a time, task, piece, or commission basis, or other method of
calculating the same, which is payable by an employer to an employee under a
written or unwritten contract of employment for work done or to be done, or for
services rendered or to be rendered and includes the fair and reasonable value, as
determined by the Secretary of Labor and Employment, of board, lodging, or other
facilities customarily furnished by the employer to the employee. "Fair and
reasonable value" shall not include any profit to the employer, or to any person
affiliated with the employerBook III Rule VII-A Section 1Songco v. NLRCF.E. Zuelig
M. Inc. filed with DOLE an application to terminate Jose Songco, Cipres and Manuel
on the gound of retrenchment. The petitioners opposed this claiming that the
company is not suffering from any losses but later on, contended that they are no
longer contesting their dismissal but rather wanted to receive separation pay
including the commissions, allowances etc which they receive every month. LA
excluded the commissions and NLRC dismissed the appeal. Hence this petition. For
allowances, the court used Santos v. NLRC as the prevailing doctrine wherein it
said that computation of backwages and separation pay should include
transportation and emergency living allowances. As for commissions, the court held
that commission is not part of the basic salary but is the reward of an agent or
salesman and that the nature of his job as a salesman demonstrates that such type
of remuneration is part of their salary. Petition is Granted.Boie Takeda v. De La
SernaA routine inspection was conducted in the premises of Boie Takeda Chemicals
and it was found that BT had not been including the commissions earned by its
medical representatives in the computation of their 13th month pay. Labor Dept

issued a notice of inspection results which was disputed by BT expressing that


commissions are not part of the basic or regular pay of their med reps. Regional
Director issued the order of payment/ BT filed a motion for reconsideration which
the Labor Secretary ruled on, affirming the regional director. Hence this petition.
The court rules for BT. Memorandum 28 issued by Corazon Aquino did not repeal PD
851 but rather merely modified Sec 1 of PD 851 removing the P1k salary ceiling.
Therefore, the interpretation of basic salary in PD 851 should be followed in
memorandum 28 which is rate of pay for a standard work period exclusive of such
additional payments as bonuses and overtime. Petitions Granted.
Phil.
Duplicators v. NLRCLA directed petitioner to pay 13th month pay to private
respondent employees plus the sales commissions. NLRC affirmed this order and the
petition for certiorari was dismissed. Thus this petition for reconsideration
submitting that the decision in Boie Takeda has reversed the decision of Philippine
Duplicators and should thus be applicable in their case. The court said that Boie
Takeda is not a precedent under stare decisis and that the petirion of PD has been
decided with finality. Also, PD did not raise the issue of the validity of the 13th
month pay law as issued by Franklin Drilon and that the doctrines in the two cases
actually co-exist.Sales commissions received for every duplicating machine sold are
part of the basc compensatin of the salesmen of Philippine Duplicators in doing
their job and that these are not over time payments or profit sharing payments not
any other benefit. These salesmens commissions form part of the definition of
basic salary. A bonus is a gratuity or act of liberality on the part of the giver
which the recipient has no right to demand. Productivity bonuses, although similar
to Sales commission (both being incentives) are tied to productivity or profit
generation whereas sales commissions are directly proportional to the extent or
energy of the employees endeavors such as in the case of BT and PD. Petition is
denied.Gratuity and Salary/ W ages. DifferencesPlastic Town Center Corp (PTCC) v.
NLRC+Nagkakaisang Lakas ng Manggagawa (NLM)NLM Katipunan filed a complaint for
violation of wage order No. 5 and unfair labor practices by giving only 26 days of
pay instead of 30 as gratuity pay. LA ruled for PTCC sating that the 1 peso
increase was ahead of the implementation of the CBA and thus the LA cannot fault
PTCC for a refusal for a 2nd increase. Union appealed to NLRC which reversed LAs
decision. Motion for reconsideration was denied and thus this petition. W age order
No. 4 provided for the integration of the mandatory emergency cost of living
allowances into the basic pay. W age order No. 5 provided for a 3 peso increase to
the basic salary of the employees. Petitioner argues that W age order No. 5 provided
an across the board increase in salary and they incurred a 1 peso deficiency after
implementing W age order No.4 and thus advanced (to May 1, 1984) the increase, 2
months before W age order No. 4s implementation to help their employees; AND that
the gratuity pay should be computed at 26 days because workers do not work on
Sundays and Holidays. Sec 3 of the CBA provides that increases shall be granted
against future allowances or wage orders and thus, the increase on May 1 was not a
July increase but a May increase and that complying with the wage orders does not
relieve them of their obligations in the CBA. As for the gratuity pay, it is not
intended to pay the worker for actual service rendered but it is supposed to
reward employees or laborers who have rendered satisfactory and efficient service
o the company. Grant of this pay is not mandatory and thus s not part of salary
but a reward for the employee. Court dismissed the petition because it was devoid
of merit.Effect on BenefitsArt. 100. Prohibition against elimination or diminution
of benefits. Nothing in this Book shall be construed to eliminate or in any way
diminish supplements, or other employee benefits being enjoyed at the time of
promulgation of this Code.Davao Fruits Coporation v. NLRC+ Associated Labor Unions
(ALU)ALU filed a complaint against Davao Fruits for payment of the 1982 13th month
pay differentials of DFCs employees equivalent to sick, vacation, maternity
leaves, rest day and holidays, which had been the practice of the company since
1975. Petitioner claimed that it has erroneously added these and the mistake was
only discovered in 1981. LA and NLRC ruled for ALU. Thus this petition for review.
Basic salary under IRR of PD 851 includes all remunerations or earnings paid by
the employer to the employee but excludes cost of living allowances, profit sharing

payments and all allowances and monetary benefits which have not been considered as
part of the basic salary such as fringe benefits or allowances. From 1975 to
1981, petitioner had freely and continuously included these in their computation
and this practice had ripened into a benefit which cannot b reduced or eliminated
by the employer (Sec 10 IRR PD 851, Art 100, LC). Solution indebiti cannot be
invoked because it is a concept in civil law and also because it did not demand the
return of the wages mistakenly paid but rather rectify the mistake. Petition
dismissed NLRC affirmed.W AGE FIXING MACHINERYRA 6727, Sec 3Sec. 3. In line with the
declared policy under this Act, Article 99 of Presidential Decree No. 442, as
amended, is hereby amended and Articles 120, 121, 122, 123, 124, 126 and 127, are
hereby incorporated into Presidential Decree No. 442, as amended, to read as
follows: "Art. 99. Regional Minimum W ages. - The minimum wage rates for
agricultural and non- agricultural employees and workers in each and every region
of the country shall be those prescribed by the Regional Tripartite W ages and
Productivity Boards." #"Art. 120. Creation of the National W ages and Productivity
Commission"Art. 121. Powers and Functions of the Commission #"Art. 122. Creation
of Regional Tripartite W ages and Productivity Boards"Art. 123. W age Order"Art. 124.
Standards/Criteria for Minimum W age Fixing "Art. 126. Prohibition Against
Injunction. "Art. 127. Non-Diminution of Benefits. Art 120-127Book III Rule IX W age
Studies and DeterminationW age order No. NCR-14Rationale for W age Rationalization
(6727, Sec 2)Sec. 2. It is hereby declared the policy of the State to rationalize
the fixing of minimum wages and to promote productivity-improvement and gainsharing measures to ensure a decent standard of living for the workers and their
families; to guarantee the rights of labor to its just share in the fruits of
production; to enhance employment generation in the countryside through industry
dispersal; and to allow business and industry reasonable returns on investment,
expansion and growth. Agencies in W age Fixing MachineryNational W ages and
Productivity CommissionArt. 120. Creation of National W ages and Productivity
Commission. There is hereby created a National W ages and Productivity
Commission, hereinafter referred to as the Commission, which shall be attached to
the Department of Labor and Employment (DOLE) for policy and program coordination.
(As amended by Republic Act No. 6727, June 9, 1989).Art. 121. Powers and functions
of the Commission. The Commission shall have the following powers and functions:a.
To act as the national consultative and advisory body to the President of the
Philippines and Congress on matters relating to wages, incomes and productivity;b.
To formulate policies and guidelines on wages, incomes and productivity improvement
at the enterprise, industry and national levels;c. To prescribe rules and
guidelines for the determination of appropriate minimum wage and productivity
measures at the regional, provincial, or industry levels;d. To review regional wage
levels set by the Regional Tripartite W ages and Productivity Boards to determine if
these are in accordance with prescribed guidelines and national development plans;
e. To undertake studies, researches and surveys necessary for the attainment of its
functions and objectives, and to collect and compile data and periodically
disseminate information on wages and productivity and other related information,
including, but not limited to, employment, cost-of-living, labor costs, investments
and returns;f. To review plans and programs of the Regional Tripartite W ages and
Productivity Boards to determine whether these are consistent with national
development plans;g. To exercise technical and administrative supervision over the
Regional Tripartite W ages and Productivity Boards;h. To call, from time to time, a
national tripartite conference of representatives of government, workers and
employers for the consideration of measures to promote wage rationalization and
productivity; andi. To exercise such powers and functions as may be necessary to
implement this Act. The Commission shall be composed of the Secretary of Labor and
Employment as ex-officio chairman, the Director-General of the National Economic
and Development Authority (NEDA) as exofficio vice-chairman, and two (2) members
each from workers and employers sectors who shall be appointed by the President
of the Philippines upon recommendation of the Secretary of Labor and Employment to
be made on the basis of the list of nominees submitted by the workers and
employers sectors, respectively, and who shall serve for a term of five (5) years.

The Executive Director of the Commission shall also be a member of the Commission.
The Commission shall be assisted by a Secretariat to be headed by an Executive
Director and two (2) Deputy Directors, who shall be appointed by the President of
the Philippines, upon the recommendation of the Secretary of Labor and Employment.
The Executive Director shall have the same rank, salary, benefits and other
emoluments as that of a Department Assistant Secretary, while the Deputy Directors
shall have the same rank, salary, benefits and other emoluments as that of a Bureau
Director. The members of the Commission representing labor and management shall
have the same rank, emoluments, allowances and other benefits as those prescribed
by law for labor and management representatives in the EmployeesCompensation
Commission. (As amended by Republic Act No. 6727, June 9, 1989)Art. 126.
Prohibition against injunction. No preliminary or permanent injunction or temporary
restraining order may be issued by any court, tribunal or other entity against any
proceedings before the Commission or the Regional Boards. (As amended by Republic
Act No. 6727, June 9, 1989)Art. 127. Non-diminution of benefits. No wage order
issued by any regional board shall provide for wage rates lower than the statutory
minimum wage rates prescribed by Congress. (As amended by Republic Act No. 6727,
June 9, 1989)Regional Tripartite W ages and Productivity Board (3, 122, 126)Regions:
## HYPERLINK "http://www.gov.ph/directory/main.asp?child=1&sid=873" #Region I
(ILOCOS REGION)# ## HYPERLINK "http://www.gov.ph/directory/main.asp?
child=1&sid=883" #Region II (CAGAYAN VALLEY)# ## HYPERLINK
"http://www.gov.ph/directory/main.asp?child=1&sid=887" #Region III (CENTRAL LUZON)#
## HYPERLINK "http://www.gov.ph/directory/main.asp?child=1&sid=888" #Region IV
(CALABARZON & MIMAROPA)# ## HYPERLINK "http://www.gov.ph/directory/main.asp?
child=1&sid=889" #Region V (BICOL REGION)# ## HYPERLINK
"http://www.gov.ph/directory/main.asp?child=1&sid=890" #Region VI (W ESTERN
VISAYAS)# ## HYPERLINK "http://www.gov.ph/directory/main.asp?child=1&sid=891"
#Region VII (CENTRAL VISAYAS)# ## HYPERLINK "http://www.gov.ph/directory/main.asp?
child=1&sid=892" #Region VIII (EASTERN VISAYAS)# ## HYPERLINK
"http://www.gov.ph/directory/main.asp?child=1&sid=893" #Region IX (ZAMBOANGA
PENINSULA)# ## HYPERLINK "http://www.gov.ph/directory/main.asp?child=1&sid=894"
#Region X (NORTHERN MINDANAO)# ## HYPERLINK "http://www.gov.ph/directory/main.asp?
child=1&sid=895" #Region XI (DAVAO REGION)# ## HYPERLINK
"http://www.gov.ph/directory/main.asp?child=1&sid=896" #Region XII (SOCCSKSARGEN)#
## HYPERLINK "http://www.gov.ph/directory/main.asp?child=1&sid=897" #Region XIII
(CARAGA)### HYPERLINK "http://www.gov.ph/directory/main.asp?child=1&sid=898"
#AUTONOMOUS REGION IN MUSLIM MINDANAO (ARMM)# ## HYPERLINK
"http://www.gov.ph/directory/main.asp?child=1&sid=899" #CORDILLERA ADMINISTRATIVE
REGION (CAR)### HYPERLINK "http://www.gov.ph/directory/main.asp?child=1&sid=900"
#NATIONAL CAPITAL REGION (NCR)#Sec. 3. In line with the declared policy under this
Act, Article 99 of Presidential Decree No. 442, as amended, is hereby amended and
Articles 120, 121, 122, 123, 124, 126 and 127, are hereby incorporated into
Presidential Decree No. 442, as amended, to read as follows: "Art. 99. Regional
Minimum W ages. - The minimum wage rates for agricultural and non- agricultural
employees and workers in each and every region of the country shall be those
prescribed by the Regional Tripartite W ages and Productivity Boards." #"Art. 120.
Creation of the National W ages and Productivity Commission"Art. 121. Powers and
Functions of the Commission #"Art. 122. Creation of Regional Tripartite W ages and
Productivity Boards"Art. 123. W age Order"Art. 124. Standards/Criteria for Minimum
W age Fixing "Art. 126. Prohibition Against Injunction. "Art. 127. Non-Diminution
of Benefits. Art. 122. Creation of Regional Tripartite W ages and Productivity
Boards. There is hereby created Regional Tripartite W ages and Productivity Boards,
hereinafter referred to as Regional Boards, in all regions, including autonomous
regions as may be established by law. The Commission shall determine the
offices/headquarters of the respective Regional Boards. The Regional Boards shall
have the following powers and functions in their respective territorial
jurisdictions:a. To develop plans, programs and projects relative to wages, incomes
and productivity improvement for their respective regions;b. To determine and fix
minimum wage rates applicable in their regions, provinces or industries therein and

to issue the corresponding wage orders, subject to guidelines issued by the


Commission;c. To undertake studies, researches, and surveys necessary for the
attainment of their functions, objectives and programs, and to collect and compile
data on wages, incomes, productivity and other related information and periodically
disseminate the same; d. To coordinate with the other Regional Boards as may be
necessary to attain the policy and intention of this Code;e. To receive, process
and act on applications for exemption from prescribed wage rates as may be provided
by law or any W age Order; and f. To exercise such other powers and functions as may
be necessary to carry out their mandate under this Code.Implementation of the
plans, programs, and projects of the Regional Boards referred to in the second
paragraph, letter (a) of this Article, shall be through the respective regional
offices of the Department of Labor and Employment within their territorial
jurisdiction; Provided, however, That the Regional Boards shall have technical
supervision over the regional office of the Department of Labor and Employment with
respect to the implementation of said plans, programs and projects.Each Regional
Board shall be composed of the Regional Director of the Department of Labor and
Employment as chairman, the Regional Directors of the National Economic and
Development Authority and the Department of Trade and Industry as vice-chairmen and
two (2) members each from workers and employers sectors who shall be appointed by
the President of the Philippines, upon the recommendation of the Secretary of Labor
and Employment, to be made on the basis ofthe list of nominees submitted by the
workers and employers sectors, respectively, and who shall serve for a term of
five (5) years. Each Regional Board to be headed by its chairman shall be assisted
by a Secretariat. (As amendedby Republic Act No. 6727, June 9, 1989)Nasipit Lumber
Co. v. National W ages and Productivity Commission (NW PC) and the UnionsNasipit
Lumber Co. Anakan Lumber Co. and Phil. W atershed Corp jointly filed an application
for exemption to W age Order No. RX-01 and 01-A (issued by Region Tripartite W ages
and Productivity Board) which increased the minimum wage by 11 to 13 pesos. Nasipit
applied for exemption from W age Orders issued by Region 10 Board due to:depressed
economic activities due to worldwide recessionpeace and order and other related
problems causing disruption and suspension of normal logging operationsimposition
of environmental fee for timber production in addition to regular forest charges
logging moratorium in BukidnonUnions claimed that company was not distressed since
capitalization has not been impaired by 25%The RTW PB approved the exemption but
granting them only temporary reprieve as stated
in Guideline No. 3. Respondents appealed with NW PC and it affirmed ALCOs
application but reversed the two others. It is said that the commission does not
approve rules implementing wage orders issued by the RTW PB. Thus this petition. W ON
guidelines by an RTW PB without approval of NW PC is valid. NO.RA 6727 amended LC and
grants NW PC power to prescribe rules and guidelines for determination of minimum
wage and productivity measuresRTW PB has power to issue wage orders but subject to
rules on Minimum W age FixingNW PC never assented to Guideline No. 3Insertion of
Guideline of distressed industry as criterion for exemption is void: irregularly
takes away mandated increase in minimum wage awarded to workersALCO application
approved: sustained capital impairment of 28.72%. Petition dismissed.Standards or
Criteria for Minimum W age Fixing (3, 124)Sec. 3. In line with the declared policy
under this Act, Article 99 of Presidential Decree No. 442, as amended, is hereby
amended and Articles 120, 121, 122, 123, 124, 126 and 127, are hereby incorporated
into Presidential Decree No. 442, as amended, to read as follows: "Art. 99.
Regional Minimum W ages. - The minimum wage rates for agricultural and nonagricultural employees and workers in each and every region of the country shall be
those prescribed by the Regional Tripartite W ages and Productivity Boards." #"Art.
120. Creation of the National W ages and Productivity Commission"Art. 121. Powers
and Functions of the Commission #"Art. 122. Creation of Regional Tripartite W ages
and Productivity Boards"Art. 123. W age Order"Art. 124. Standards/Criteria for
Minimum W age Fixing "Art. 126. Prohibition Against Injunction. "Art. 127. NonDiminution of Benefits. Art. 124. Standards/Criteria for minimum wage fixing. The
regional minimum wages to be established by the Regional Board shall be as nearly
adequate as is economically feasible to maintain the minimum standards of living

necessary for the health, efficiency and general wellbeing of the employees within
the framework of the national economic and social development program. In the
determination of such regional minimum wages, the Regional Board shall, amongother
relevant factors, consider the following:a. The demand for living wages;b. W age
adjustment vis--vis the consumer price index;c. The cost of living and changes or
increases therein;d. The needs of workers and their families;e. The need to induce
industries to invest in the countryside;f. Improvements in standards of living;g.
The prevailing wage levels;h. Fair return of the capital invested and capacity to
pay of employers;i. Effects on employment generation and family income; andj. The
equitable distribution of income and wealth along the imperatives of economic and
social development.The wages prescribed in accordance with the provisions of this
Title shall be the standard prevailing minimum wages in every region. These wages
shall include wages varying with industries, provinces or localities if in the
judgment of the Regional Board, conditions make such local differentiation proper
and necessary to effectuate the purpose of this Title.Any person, company,
corporation, partnership or any other entity engaged in business shall file and
register annually with the appropriate Regional Board, Commission and the National
Statistics Office, an itemized listing of their labor component, specifying the
names of their workers and employees below the managerial level, including
learners, apprentices and disabled/handicapped workers who were hired under the
terms prescribed in the employment contracts, and their corresponding salaries and
wages.W here the application of any prescribed wage increase by virtue of a law or
wage order issued by any Regional Board results in distortions of the wage
structure within an establishment, the employer and the union shall negotiate to
correct the distortions. Any dispute arising from wage distortions shall be
resolved through the grievance procedure under their collective bargaining
agreement and, if it remains unresolved, through voluntary arbitration. Unless
otherwise agreed bythe parties in writing, such dispute shall be decided by the
voluntary arbitrators within ten (10) calendar days from the time said dispute was
referred to voluntary arbitration.In cases where there are no collective agreements
or recognized labor unions, the employers and workers shall endeavor to correct
such distortions. Any dispute arising therefrom shall be settled through the
National Conciliation and Mediation Board and, if it remains unresolved after ten
(10) calendar days of conciliation, shall be referred to the appropriate branch of
the National Labor Relations Commission (NLRC). It shall be mandatory for the NLRC
to conduct continuous hearingsand decide the dispute within twenty (20) calendar
days from the time said dispute is submitted for compulsory arbitration.The
pendency of a dispute arising from a wage distortion shall not in any way delay the
applicability of any increase in prescribed wage rates pursuant to the provisions
of law or wage order.As used herein, a wage distortion shall mean a situation where
an increase in prescribed wage rates results in the elimination or severe
contraction of intentional quantitative differences in wage or salary rates between
and among employee groups in an establishment as to effectively obliterate the
distinctions embodied in such wage structure based on skills, length of service, or
other logical bases of differentiation. All workers paid by result, including those
who are paid on piecework, takay, pakyaw or task basis, shall receive not less than
the prescribed wage rates per eight (8) hours of work a day, or a proportion
thereof for working less than eight (8) hours.All recognized learnership and
apprenticeship agreements shall be considered automatically modified insofar as
their wage clauses are concerned to reflect the prescribed wage rates. (As amended
by Republic Act No. 6727, June 9, 1989)W age Order (3, 123-124)Sec. 3. In line with
the declared policy under this Act, Article 99 of Presidential Decree No. 442, as
amended, is hereby amended and Articles 120, 121, 122, 123, 124, 126 and 127, are
hereby incorporated into Presidential Decree No. 442, as amended, to read as
follows: "Art. 99. Regional Minimum W ages. - The minimum wage rates for
agricultural and non- agricultural employees and workers in each and every region
of the country shall be those prescribed by the Regional Tripartite W ages and
Productivity Boards." #"Art. 120. Creation of the National W ages and Productivity
Commission"Art. 121. Powers and Functions of the Commission #"Art. 122. Creation

of Regional Tripartite W ages and Productivity Boards"Art. 123. W age Order"Art. 124.
Standards/Criteria for Minimum W age Fixing "Art. 126. Prohibition Against
Injunction. "Art. 127. Non-Diminution of Benefits. Art. 123. W age Order. W henever
conditions in the region so warrant, the Regional Board shall investigate and study
all pertinent facts; and based on the standards and criteria herein prescribed,
shall proceed to determine whether a W age Order should be issued. Any such W age
Order shall take effect after fifteen (15) days from its complete publication in at
least one (1) newspaper of general circulation in the region.In the performance of
its wage-determining functions, the Regional Board shall conduct public
hearings/consultations, giving notices to employees and employers groups,
provincial, city and municipal officials and other interested parties.Any party
aggrieved by the W age Order issued by the Regional Board may appeal such order to
the Commission within ten (10) calendar days from the publication of such order. It
shall be mandatory for the Commission to decide such appeal within sixty (60)
calendar days from the filing thereof. The filing of the appeal does not stay the
order unless the person appealing such order shall file with the Commission, an
undertaking with a surety or sureties satisfactory to the Commission for the
payment to the employees affected by the order of the corresponding increase, in
the event such order is affirmed. (As amended by Republic Act No. 6727, June 9,
1989)Methods of Fixing (According to Employers Confederation case)Floor W age
methodfixing of determinate amount that would be added to the prevailing statutory
minimum wageSalary-ceiling or Salary Cap methodwage adjustment is applied to
employees receiving a certain denominated salary ceiling (RA 6640 and 6727). Shift
to this kind of salary method is brought about by labor disputes arising from wage
distortions (brought about by the floor wage method) Employers Confederation of the
Phil v. National W ages and Productivity CommissionECOP is questioning the validity
of W age Order No. 01-A of the RTW PB pursuant to RA 6727 which amended No. 01 by not
only increasing the minimum wage by 17 pesos but also entitling the employees
receiving P125 and above to the said order. ECOP appealed to the NW PC and this was
dismissed for lack of merit. ECOP claims that RA6727 may only prescribe minimum
wages and not determine salary ceiling. It insists that wage fixing is a
legislative function and that the boards may adjust only floor wages. The Solicitor
General argued that RA 6727 is intended to correct wage distortions through the
salary ceiling method. In this petition the court held that the constitution
protects that rights of the workers and ECOP is mistaken in interpreting RA 6727 in
empowering management to decide the wages. In this case, it seems that Congress has
delegated the power to fix rates to the commission and that the Commission has
correctly upheld the Boards decision in this case. The statute would have no need
of a board if the only question to be solved is how much. The state is concerned
woth
distributing wages more evenly. The petition is denied.
ValidityMetropolitan
Bank and Trust company Inc. v. National W ages and Productivity Commission and
Regional Tripartite W ages and Productivity BoardRTW PB Tuguegarao issued W age Order
No. R02-03 which raised the wage P15.00 across the board. In a letter inquiry to
the NW PC, The Bankers Council for Personnel Management (BCPM) in behalf of its
member banks requested for an exemption from the wage order since the member banks
are already paying for more than the minimum wage rate in the NCR which is the
principal place of their business. NW PC replied that they are not under the
exemptible categories. In a letter inquiry, BCPM asked for interpretation on the
applicability of the wage order. NW PC referred the inquiry to the RTW PB who said
that the wage order covers all private establishments in Region II regardless of
the adoption of the establishments of wage orders in Metro Manila.Pet filed a
petition for certiorari and prohibition with the CA asking to nullify the wage
order claiming that RTW PB acted without authority in issuing said order and that
implementing it will cause the petitioner and similarly situated employers to incur
huge financial losses and eventually labor unrest. OSG affirmed the petitioners
claim. Ca denied the petition saying that the wage order had long become fait
accompli and that no appeal from the said wage order was done during the time
allotted (10 days from publication of order as shown in Sec 13 of the wage order).

RA 6727 gives RTW PB the authority to fix minimum wage rates as applicable in their
respective regions. In the present case however, the RTW PB did not set a wage level
(floor wage method) or set a range to which a wage adjustment or increase shall be
added (salary-ceiling method). In simply increasing P15 across the board, it
exceeded its authority. W hen the application of administrative issuances modifies
existing laws by exceeding the intended scope, issuance become VOID not only for
being ultra vires but for being unreasonable. Petition partially granted. W age
order is void as to employees who receive more than the prevailing minimum wage.
W age Distortion (3, 124)Sec. 3. In line with the declared policy under this Act,
Article 99 of Presidential Decree No. 442, as amended, is hereby amended and
Articles 120, 121, 122, 123, 124, 126 and 127, are hereby incorporated into
Presidential Decree No. 442, as amended, to read as follows: "Art. 99. Regional
Minimum W ages. - The minimum wage rates for agricultural and non- agricultural
employees and workers in each and every region of the country shall be those
prescribed by the Regional Tripartite W ages and Productivity Boards." #"Art. 120.
Creation of the National W ages and Productivity Commission"Art. 121. Powers and
Functions of the Commission #"Art. 122. Creation of Regional Tripartite W ages and
Productivity Boards"Art. 123. W age Order"Art. 124. Standards/Criteria for Minimum
W age Fixing "Art. 126. Prohibition Against Injunction. "Art. 127. Non-Diminution
of Benefits. Prubankers Association v. Prudential Bank and Trust Co.Petitioner
granted a Cost Of Living Allowance of 17.50 to its Naga branch employees pursuant
to W age Order RB 05-03 (issued by RTW PB which provided for COLA to workers of the
private sector who had rendered services for at least 3 months before its
effectivity). It also integrated 150 per month COLA into the basic pay of its rankand-file employees at its Cebu, Mabolo, and P. del Rosario branches. Prubankers
Association wanted to extend the application of the order to its employees outside
regions V and VII claiming that regional implementation resulted in a wage
distortion. The matter was submitted to a voluntary arbitration which held that
there was a wage distortion. On an appeal to the CA, it was held that there was no
wage distortion Thus this petition for review on certiorari.Issue: W ON there was
wage distortion Held: NO. Quantitative difference in compensation between different
pay classes remained the same in all branches in the affected region Disparity in
wages between employees holding similar positions but in different regions does not
constitute wage distortion but is expected by the law. W age distortion arises when
a wage order engenders wage parity between employees in different rungs of the
organizational ladder of same establishmentW age distortion involves four elements:
an existing hierarchy of positions with corresponding salariesa significant change
in the salary rate of a lower pay class without a concomitant increase in the
salary rate of a higher oneelimination of the distinction between the 2 levels
existence of the distortion in the same region of the countryRA 6727 recognizes
that there are different needs for the different situations in different regions.
The fact that a person is receiving more in one region does not mean that she/he is
better off than a person in another region. W ages per region depends on the
situation per region as determined by the RTW PB as explained in RA 6727. Petition
denied.* establishment (NW PC Guideline No 1) an economic unit which engages in one
or predominantly one kind of economic activity with a single fixed locationFreedom
to Bargain (6727, Sec 2, 2nd par)Art. 125. Freedom to bargain. No wage order shall
be construed to prevent workers in particular firms or enterprises or industries
from bargaining for higher wages with their respective employers. (As amended by
Republic Act No. 6727, June 9, 1989)Penalty for violation (RA 8188) AN ACT
INCREASING THE PENALTY AND INCREASING DOUBLE INDEMNITY FOR VIOLATION OF THE
PRESCRIBED INCREASES OR ADJUSTMENT IN THE W AGE RATES, AMENDING FOR THE PURPOSE
SECTION TW ELVE OF REPUBLIC ACT NUMBERED SIXTY-SEVEN HUNDRED TW ENTY-SEVEN,
OTHERW ISE KNOW N AS THE W AGE RATIONALIZATION ACTSECTION 1. Section 12 of Republic
Act Numbered Sixty-seven hundred twenty-seven is hereby amended to read to as
follows: "Section 12. Any person, corporation, trust, firm, partnership,
association or entity which refuses or fails to pay any of the prescribed increases
or adjustments in the wage rates made in accordance with this Act shall be
punished by a fine not less than Twenty-five thousand pesos (P25,000) nor more

than One hundred thousand pesos (P100,000) or imprisonment of not less than two
(2) years nor more than four (4) years, or both such fine and imprisonment at the
discretion of the court: Provided, That any person convicted under this Act shall
not be entitled tothe benefits provided for under the Probation Law. "The
employer concerned shall be ordered to pay an amount equivalent to double the
unpaid benefits owing to the employees: Provided, That payment of indemnity shall
not absolve the employer from the criminal liability imposable under this Act. "If
the violation is committed by a corporation, trust or firm, partnership,
association or any other entity the penalty of imprisonment shall be imposed upon
the entity's responsible officers, including, but not limited to, the president,
vice-president, chief executive officer, general manager, managing director or
partner."SECTION 2. All laws, presidential decrees, executive orders, rules and
regulations or parts thereof inconsistent with the provisions of this Act are
hereby repealed or modified accordingly. # SECTION 3. This Act shall take
effect fifteen (15) days after its complete publication in a newspaper of general
circulation.W AGE PAYMENT AND PROTECTIONForm of PaymentArt. 102. Forms of payment.
No employer shall pay the wages of an employee by means of promissory notes,
vouchers, coupons, tokens, tickets, chits, or any object other than legal tender,
even when expressly requested by the employee.Payment of wages by check or money
order shall be allowed when such manner of payment is customary on the date of
effectivity of this Code, or is necessary because of special circumstances as
specified in appropriate regulations to be issued by the Secretary of Labor and
Employment or as stipulated in a collective bargaining agreement.1705,CC The
laborer's wages shall be paid in legal currency. Book III, Rule VIII, Sec 1-2
SECTION 1. Manner of wage payment. As a general rule, wages shall be paid in
legal tender and the use of tokens, promissory notes, vouchers, coupons, or any
other form alleged to represent legal tender is absolutely prohibited even when
expressly requested by the employee. SECTION 2. Payment by check. Payment of
wages by bank checks, postal checks or money orders is allowed where such manner of
wage payment is customary on the date of the effectivity of the Code, where it is
so stipulated in a collective agreement, or where all of the following conditions
are met: (a) There is a bank or other facility for encashment within a radius of
one (1) kilometer from the workplace; (b) The employer or any of his agents or
representatives does not receive any pecuniary benefit directly or indirectly from
the arrangement; (c) The employees are given reasonable time during banking hours
to withdraw their wages from the bank which time shall be considered as compensable
hours worked if done during working hours; and (d) The payment by check is with the
written consent of the employees concerned if there is no collective agreement
authorizing the payment of wages by bank checks. Congson v. NLRCDominico Congson is
the owner of Southern Fishing Industry and Respondents are hired as piece rate
workers. They were paid P1 per tuna weighing 30 to 80 kilos. They unloaded the fish
from the fishing boats to the truck haulers then unloaded them again at the cold
storage plant of the petitioner. Petitioner announced that it will reduce the rateper-tuna and Respondents resisted the said reduction. W hen they reported for work
the next day, they had been replaced.
They filed a case for underpayment of wages, nonpayment of overtime pay, holiday
pay, restday pay, 5 day incentive leave pay, for constructive dismissal as well as
for violation of the minimum wage law alleging that with the petitioners rates and
the scarcity of tuna, their earnings did not exceed P1k a month.
Petitioners
claim that the respondents abandoned their work for 1 month and that they failed to
return to work when asked. LA ruled for respondents (illegally dismissed!) and NLRC
affirmed this decision. Thus this petition. Petitioners claim that they paid the
respondents with up to 3 kilos of the valuable liver and intestines of the tuna
which is highly convertible to cash (15 to 20 pesos per kilo). Combined with the
per-tuna rate, this exceeds the minimum wage. Court explains that as stated in Art
102 of the LC, wages shall be paid only by means of legal tender. The only instance
when an employer is permitted to pay wages in forms other than legal tender is by
checks or money order. NLRC affirmed. Time of PaymentArt. 103. Time of payment.
W ages shall be paid at least once every two (2) weeks or twice a month at intervals

not exceeding sixteen (16) days. If on account of force majeure or circumstances


beyond the employers control, payment of wages on or within the time herein
provided cannot be made, the employer shall pay the wages immediately after such
force majeure or circumstances have ceased. No employer shall make payment with
less frequency than once a month.The payment of wages of employees engaged to
perform a task which cannot be completed in two (2) weeks shall be subject to the
following conditions, in the absence of a collective bargaining agreement or
arbitration award:1. That payments are made at intervals not exceeding sixteen (16)
days, in proportion to the amount of work completed;2. That final settlement is
made upon completion of the work.Book III, Rule VIII SECTION 3. Time of payment.
(a) W ages shall be paid not less than once every two (2) weeks or twice a month at
intervals not exceeding sixteen (16) days, unless payment cannot be made with such
regularity due to force majeure or circumstances beyond the employer's control in
which case the employer shall pay the wages immediately after such force majeure or
circumstances have ceased. (b) In case of payment of wages by results involving
work which cannot be finished in two (2) weeks, payment shall be made at intervals
not exceeding sixteen days in proportion to the amount of work completed. Final
settlement shall be made immediately upon completion of the work. Place of Payment
Art. 104. Place of payment. Payment of wages shall be made at or near the place of
undertaking, except as otherwise provided by such regulations as the Secretary of
Labor and Employment may prescribe under conditions to ensure greater protection of
wages.Book III, Rule VIII SECTION 4. Place of payment. As a general rule, the
place of payment shall be at or near the place of undertaking. Payment in a place
other than the work place shall be permissible only under the following
circumstances: (a) W hen payment cannot be effected at or near the place of work by
reason of the deterioration of peace and order conditions, or by reason of actual
or impending emergencies caused by fire, flood, epidemic or other calamity
rendering payment thereat impossible; (b) W hen the employer provides free
transportation to the employees back and forth; and (c) Under any other analogous
circumstances; Provided, That the time spent by the employees in collecting their
wages shall be considered as compensable hours worked; (d) No employer shall pay
his employees in any bar, night or day club, drinking establishment, massage
clinic, dance hall, or other similar places or in places where games are played
with stakes of money or things representing money except in the case of persons
employed in said places. Person to PayArt. 105. Direct payment of wages. W ages
shall be paid directly to the workers to whom they are due, except:a. In cases of
force majeure rendering such payment impossible or under other special
circumstances to be determined by the Secretary of Labor and Employment in
appropriate regulations, in which case, the worker may be paid through another
person under written authority given by the worker for the purpose; orb. W here the
worker has died, in which case, the employer may pay the wages of the deceased
worker to the heirs of the latter without the necessity of intestate proceedings.
The claimants, if they are all of age, shall execute an affidavit attesting to
their relationship to the deceased and the fact that they are his heirs, to the
exclusion of all other persons. If any of the heirs is a minor, the affidavit shall
be executed on his behalf by his natural guardian or next-of-kin. The affidavit
shall be presented to the employer who shall make payment through the Secretary of
Labor and Employment or his representative. The representative of the Secretary of
Labor and Employment shall act as referee in dividing the amount paid among the
heirs. The payment of wages under this Article shall absolve the employer of any
further liability with respect to the amount paid.Book III, Rule VIII SECTION 5.
Direct payment of wages. Payment of wages shall be made direct to the employee
entitled thereto except in the following cases: (a) W here the employer is
authorized in writing by the employee to pay his wages to a member of his family;
(b) W here payment to another person of any part of the employee's wages is
authorized by existing law, including payments for the insurance premiums of the
employee and union dues where the right to check-off has been recognized by the
employer in accordance with a collective agreement or authorized in writing by the
individual employees concerned; or (c) In case of death of the employee as provided

in the succeeding Section. SECTION 6. W ages of deceased employee. The payment of


the wages of a deceased employee shall be made to his heirs without the necessity
of intestate proceedings. W hen the heirs are of age, they shall execute an
affidavit attesting to their relationship to the deceased and the fact that they
are his heirs to the exclusion of all other persons. In case any of the heirs is a
minor, such affidavit shall be executed in his behalf by his natural guardian or
next of kin. Upon presentation of the affidavit to the employer, he shall make
payment to the heirs as representative of the Secretary of Labor. Bermiso v.
Escano, Inc. et al.Case was originally instituted by the Democratic Labor
Association and the Katubsanan sa Mamumuo in the CIR praying for reinstatement with
backwages and direct payment to the workers rather than to the union. CIR found
that Hijos de F. Escano is a corporation engaged in transporting people and goods
for compensation. The unions are laborers from Visayas and Mindanao who load and
unload vessels in cebu and have respondent Jose Muana and Vitaliano Sabay as
general president and gen treasurer respectively. Its members in cebu are numerous
and divided to chapters. One of these chapters are headed by Sabay (SABAY group).
CIR ordered the reinstatement of the SABAY group but without backwages . Thus this
petition for certiorari. The court found that the workers are employees of Escano.
However, the work of stevedoring was taken as a group and not as individuals. There
was also no evidence that racketeering was employed by the unions. Futhermore,
Escano did not pay for the stevedoring charges. They were collected by the group
from the shippers themselves, there is no ground for escano to pay backwages.
Petition denied.W AGE PROHIBITIONSProhibition against interference in disposal of
wagesArt. 112. Non-interference in disposal of wages. No employer shall limit or
otherwise interfere with the freedom of any employee to dispose of his wages. He
shall not in any manner force, compel, or oblige his employees to purchase
merchandise, commodities or other property from any other person, or otherwise make
use of any store or services of such employer or any other person.Book III Rule
VIII SECTION 12. SECTION 12. Non-interference in disposal of wages. No employer
shall limit or otherwise interfere with the freedom of any employee to dispose of
his wages and no employer shall in any manner oblige any of his employees to
patronize any store or avail of the setrvices offered by any person.Prohibition
against wage deductionArt. 113. W age deduction. No employer, in his own behalf or
in behalf of any person, shall make any deduction from the wages of his employees,
except:a. In cases where the worker is insured with his consent by the employer,
and the deduction is to recompense the employer for the amount paid by him as
premium on the insurance;b. For union dues, in cases where the right of the worker
or his union to check-off has been recognized by the employer or authorized in
writing by the individual worker concerned; andc. In cases where the employer is
authorized by law or regulations issued by the Secretary of Labor and Employment.
Book III Rule VIII SECTION 13. W age deduction. Deductions from the wages of the
employees may be made by the employer in any of the following cases: (a) W hen the
deductions are authorized by law, including deductions for the insurance premiums
advanced by the employer in behalf of the employee as well as union dues where the
right to check-off has been recognized by the employer or authorized in writing by
the individual employee himself. (b) W hen the deductions are with the written
authorization of the employees for payment to the third person and the employer
agrees to do so; Provided, That the latter does not receive any pecuniary benefit,
directly or indirectly, from the transaction. Apocada v. NLRC + Jose Mirasol+
Intrans
Phil CorpErnesto Apocada is employed in Intrans. Mirasol persuaded him to
subscribe to 1,500 shares of the corporation at 100 per share (150k). He made an
initial payment of 37,500. On 1975, Apocada was appointed President and General
Manager of the Company. He resigned in 1986. That same year, he instituted a
complaint with the NLRC for payment of unpaid wages, cost of living allowance,
gasoline etc. Respondents admitted the money due to the petitioner but said that
the same was offset to the unpaid balance of his subscription. Petitioner said that
he was not even informed or notified for the unpaid subscription and thus the
obligation is not enforceable. NLRC ruled for the co. thus this petition wherein it

is held that the NLRC has NO jurisdiction to resolve a claim for nonpayment of
stock subscriptions to a corporation. This jurisdiction belongs to the SEC.
Furthermore, the unpaid subscriptions are not yet due and demandable and such
setoff was without lawful basis. Petition granted.Prohibition against requirement
to make deposits for loss or damageArt. 114. Deposits for loss or damage. No
employer shall require his worker to make deposits from which deductions shall be
made for the reimbursement of loss of or damage to tools, materials, or equipment
supplied by the employer, except when the employer is engaged in such trades,
occupations or business where the practice of making deductions or requiring
deposits is a recognized one, or is necessary or desirable as determined by the
Secretary of Labor andEmployment in appropriate rules and regulations. Art. 115.
Limitations. No deduction from the deposits of an employee for the actual amount of
the loss or damage shall be made unless the employee has been heard thereon, and
his responsibility has been clearly shown.Book III Rule VIII SECTION 14. Deduction
for loss or damage. W here the employer is engaged in a trade, occupation or
business where the practice of making deductions or requiring deposits is
recognized to answer for the reimbursement of loss or damage to tools, materials,
or equipment supplied by the employer to the employee, the employer may make wage
deductions or require the employees to make deposits from which deductions shall be
made, subject to the following conditions: (a) That the employee concerned is
clearly shown to be responsible for the loss or damage; (b) That the employee is
given reasonable opportunity to show cause why deduction should not be made; (c)
That the amount of such deduction is fair and reasonable and shall not exceed the
actual loss or damage; and (d) That the deduction from the wages of the employee
does not exceed 20 percent of the employee's wages in a week. Dentech Manufacturing
Corp v. NLRCRespondents used to work as welders, upholsterers, and painters of
company making dental equipment. They were dismissed: allegedly because of union
activities (Confederation of Citizens Labor Union) They wanted to get their 13th
month pay as well as refund of cash bond filed. They cited PD 851 saying that they
are receiving more than 1k per month and thus they are entitled (under the PD) to
13th month pay. Company claimed that due to financial losses, they are, under the
same PD, exempted as distressed employers. LA ruled for reinstating complainants
and NLRC affirmed LA. Case was elevated to the Supreme Ct. by the Pet saying that
Respondents abandoned their work and that Memorandum No. 28 (eliminating 1k salary
ceiling) does not apply to the case since it was enforced long after he case was
instituted. Court held that 1k salary ceiling in PD 851 pertains to basic salary
and not monthly compensation and that in invoking exemption, the company must be
deemed qualified after prior authorization from the Secretary of Labor and
Employment. As to another Issue: As for refund of the cash bond, the company said
that these have been given to a certain carinderia to pay for the outstanding
accounts of private respondents. The main issue is W ON such requirement of cash
bond is valid. No. Company failed to show that it is authorized by law to require
workers to file cash bond. Refund! Petition dismissed.Five J Taxi v. NLRCThe two
drivers of Five J Taxi failed to report for work. Maldigan: allegedly working with
Mine of GoldSabsalon: allegedly working with Bulaklak Company after not reporting
for work after a holdap incident while driving taxi. LA and NLRC dismissed the case
abandoned cab in Makati without fuel refill worth 300refused to workW anted
reimbursement of daily cash deposit:20- car washing15- for any deficiency in their
boundary for every actual dayIssue: W ON such deposits may be reimbursedCourt Held:
Yes to 15, no to 20Ratio: to defray deficiency in boundary is not contemplated by
114 (loss or damage to tools, materials, equipment). The same is illegal.Also, when
they stopped working, alleged purpose for deposits no longer existed and should be
returned20 pesos:not entitled to refundnothing prevents them from washing cars
themselvesNLRC decision modified. 15 deposit reimbursable.Prohibition against
W ithholding of wagesArt. 116. W ithholding of wages and kickbacks prohibited. It
shall be unlawful for any person,directly or indirectly, to withhold any amount
from the wages of a worker or induce him to give upany part of his wages by force,
stealth, intimidation, threat or by any other means whatsoeverwithout the workers
consent.Art. 1706, CC. W ithholding of the wages, except for a debt due, shall not

be made by the employer. Prohibition against deduction to ensure employmentArt.


117. Deduction to ensure employment. It shall be unlawful to make any deduction
fromthe wages of any employee for the benefit of the employer or his representative
or intermediary asconsideration of a promise of employment or retention in
employment.Prohibition against retaliatory measuresArt. 118. Retaliatory measures.
It shall be unlawful for an employer to refuse to pay or reducethe wages and
benefits, discharge or in any manner discriminate against any employee who hasfiled
any complaint or instituted any proceeding under this Title or has testified or is
about totestify in such proceedings.Prohibition against false reportingArt. 119.
False reporting. It shall be unlawful for any person to make any statement, report,
orrecord filed or kept pursuant to the provisions of this Code knowing such
statement, report orrecord to be false in any material respect.Book III, Rule X,
SECTION 13. False reporting. It shall be unlawful for any employer or any person
to make any false statement, report or record on matters required to be kept or
maintained pursuant to the provisions of this Rule. Prohibition against keeping of
employees records in a place other than the work place Book III, RULE X, SECTION
11. Place of records. All employment records of the employees shall be kept and
maintained by the employer in or about the premises of the work place. The premises
of a work-place shall be understood to mean the main or branch office of the
establishment, if any, depending upon where the employees are regularly assigned.
The keeping of the employee's records in another place is prohibited. SECTION 12.
Preservation of records. All employment records required to be kept and
maintained by employers shall be preserved for at least three (3) years from the
date of the last entry in the records. South Motorists Enterprises v. TostocOn the
strength of an inspection report, an order was issued by Labor Officer Domingo
Reyes directing South Motorists to pay Tostoc his ECOLA. MFR filed were all denied.
Hence this petition by South Motorists questioning the monetary award as well as
his jurisdiction to grant the same and claiming that only the labor arbiter may
determine the existence of an employer employee relationship. Art 129 (Recovery of
W ages) and Art 217 (Jurisdiction of LA) were applied by the court to this case in
explaining that regional directors are empowered to hear and decide in summary
proceeding claims for recovery of wages and other monetary claims or benefits. It
is only when the ff requisites do not concur that the jurisdiction falls with the
LA:claim of a worker employed as a domestic helper or household service under the
codeclaim arises from employer-employee relationsdoes not seek reinstatementmoney
claim does not exceed 5k, < Art 217 (6)>The court ruled that 11 out of the 46
respondents, the money claims being above 5k should be remanded to the LA. Decision
Modified and Petition partially granted.Prohibition against garnishment or
executionArt. 1708, CC. The laborer's wages shall not be subject to execution or
attachment, except for debts incurred for food, shelter, clothing and medical
attendance. Rosario Gaa v. CA +Europhil Industries Corporation Gaa was building
admin of Trinity Building. Europhil Industries filed a civil action in CFI for
damages against petitioner for cutting off its electricity, removing its name from
building directory, gate passes of their employees. CFI ruled for Europhil. W rit of
garnishment of Gaas salary, commission, and/or remuneration was served to El
Grande Hotel where petitioner worked due to these acts. She filed a motion to lift
the writ on the ground that her salaries, commission/remuneration are exempted from
execution according to Art 1708 of the NCC. This was denied by the CA because Gaa,
being a person who holds a managerial position, is not a laborer as the word is
contemplated in 1708. 1708 used the word wages and not salary. Salary is
contemplated as to relate to a person of office or position. W ages refer to those
who look to the reward of a day;s labor for immediate or present support, and thus
in need of the exeption of 1708. Gaa is not part of this group. CA affirmed.wages
vs salary: wages for manual labor, skilled or unskilled,
paid at stated times, and measured by day, week, month or season while salary
denotes a higher degree of employmentW ORKER PREFERNCE IN THE EVENT OF BANKRUPTCY
Art. 110. W orker preference in case of bankruptcy. In the event of bankruptcy or
liquidationof an employers business, his workers shall enjoy first preference as
regards their wages and othermonetary claims, any provisions of law to the contrary

notwithstanding. Such unpaid wages andmonetary claims shall be paid in full before
claims of the government and other creditors may bepaid. (As amended by Section 1,
Republic Act No. 6715, March 21, 1989)Book III, Rule VIII Sec SECTION 10. Payment
of wages and other monetary claims in case of bankruptcy. In case of bankruptcy
or liquidation of the employers business, the unpaid wages and other monetary
claims of the employees shall be given first preference and shall be paid in full
before the claims of government and other creditors may be paid (as amended by Sec
1 of the IRR of RA 6715, 1989)Civil CodeArt. 1707. The laborer's wages shall be a
lien on the goods manufactured or the work doneArt. 2241. W ith reference to
specific movable property of the debtor, the following claims or liens shall be
preferred: (1) Duties, taxes and fees due thereon to the State or any subdivision
thereof; (2) Claims arising from misappropriation, breach of trust, or malfeasance
by public officials committed in the performance of their duties, on the movables,
money or securities obtained by them; (3) Claims for the unpaid price of movables
sold, on said movables, so long as they are in the possession of the debtor, up to
the value of the same; and if the movable has been resold by the debtor and the
price is still unpaid, the lien may be enforced on the price; this right is not
lost by the immobilization of the thing by destination, provided it has not lost
its form, substance and identity; neither is the right lost by the sale of the
thing together with other property for a lump sum, when the price thereof can be
determined proportionally; (4) Credits guaranteed with a pledge so long as the
things pledged are in the hands of the creditor, or those guaranteed by a chattel
mortgage, upon the things pledged or mortgaged, up to the value thereof; (5)
Credits for the making, repair, safekeeping or preservation of personal property,
on the movable thus made, repaired, kept or possessed; (6) Claims for laborers'
wages, on the goods manufactured or the work done; In the foregoing cases, if the
movables to which the lien or preference attaches have been wrongfully taken, the
creditor may demand them from any possessor, within thirty days from the unlawful
seizure. (1922a)Art. 2242. W ith reference to specific immovable property and real
rights of the debtor, the following claims, mortgages and liens shall be preferred,
and shall constitute an encumbrance on the immovable or real right: (3) Claims of
laborers, masons, mechanics and other workmen, as well as of architects, engineers
and contractors, engaged in the construction, reconstruction or repair of
buildings, canals or other works, upon said buildings, canals or other works; Art.
2244. W ith reference to other property, real and personal, of the debtor, the
following claims or credits shall be preferred in the order named: (2) Credits for
services rendered the insolvent by employees, laborers, or household helpers for
one year preceding the commencement of the proceedings in insolvency; W AGE
RECOVERYJURIDICTIONADMINISTRATION AND ENFORCEMENTArt. 128. Visitorial and
enforcement power.a. The Secretary of Labor and Employment or his duly authorized
representatives, including labor regulation officers, shall have access to
employers records and premises at any time of the day or night whenever work is
being undertaken therein, and the right to copy therefrom, to question any employee
and investigate any fact, condition or matter which may be necessary to determine
violations or which may aid in the enforcement of this Code and of any labor law,
wage order or rules and regulations issued pursuant thereto.b. Notwithstanding the
provisions of Articles 129 and 217 of this Code to the contrary, and in cases where
the relationship of employer-employee still exists, the Secretary of Labor and
Employment or his duly authorized representatives shall have the power to issue
compliance orders to give effect to the labor standards provisions of this Code and
other labor legislation based on the findings of labor employment and enforcement
officers or industrial safety engineers made in the course of inspection. The
Secretary or his duly authorized representatives shall issue writs of execution to
the appropriate authority for the enforcement of their orders, except in cases
where the employer contests the findings of the labor employment and enforcement
officer and raises issues supported by documentary proofs which were not considered
in the course of inspection. (As amended by Republic Act No. 7730, June 2, 1994).An
order issued by the duly authorized representative of the Secretary of Labor and
Employment under this Article may be appealed to the latter. In case said order

involves a monetary award, an appeal by the employer may be perfected only upon the
posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Secretary of Labor and Employment in the amount equivalent to the
monetary award in the order appealed from. (As amended by Republic Act No. 7730,
June 2, 1994) c. The Secretary of Labor and Employment may likewise order stoppage
of work or suspension of operations of any unit or department of an establishment
when non-compliance with the law or implementing rules and regulations poses grave
and imminent danger to the health and safety of workers in the workplace. W ithin
twenty-four hours, a hearing shall beconducted to determine whether an order for
the stoppage of work or suspension of operations shall be lifted or not. In case
the violation is attributable to the fault of the employer, he shall pay the
employees concerned their salaries or wages during the period of such stoppage of
work or suspension of operation.d. It shall be unlawful for any person or entity to
obstruct, impede, delay or otherwise render ineffective the orders of the Secretary
of Labor and Employment or his duly authorized representatives issued pursuant to
the authority granted under this Article, and no inferior court or entity shall
issue temporary or permanent injunction or restraining order orotherwise assume
jurisdiction over any case involving the enforcement orders issued in accordance
with this Article.e. Any government employee found guilty of violation of, or abuse
of authority, under this Article shall, after appropriate administrative
investigation, be subject to summary dismissal from the service.f. The Secretary of
Labor and Employment may, by appropriate regulations, require employers to keep and
maintain such employment records as may be necessary in aid of his visitorial and
enforcement powers under this Code.Art. 129. Recovery of wages, simple money claims
and other benefits. Upon complaint of any interested party, the Regional Director
of the Department of Labor and Employment or any of the duly authorized hearing
officers of the Department is empowered, through summary proceeding and after due
notice, to hear and decide any matter involving the recovery of wages and other
monetary claims and benefits, including legal interest, owing to an employee or
personemployed in domestic or household service or househelper under this Code,
arising from employeremployee relations: Provided, That such complaint does not
include a claim for reinstatement:Provided further, That the aggregate money claims
of each employee or househelper does not exceed Five thousand pesos (P5,000.00).
The Regional Director or hearing officer shall decide or resolve the complaint
within thirty (30) calendar days from the date of the filing of the same. Any sum
thus recovered on behalf of any employee or househelper pursuant to this Article
shall be held in a special deposit account by, and shall be paid on order of, the
Secretary of Labor andEmployment or the Regional Director directly to the employee
or househelper concerned. Any such sum not paid to the employee or househelper
because he cannot be located after diligent and reasonable effort to locate him
within a period of three (3) years, shall be held as a special fund of the
Department of Labor and Employment to be used exclusively for the amelioration and
benefit of workers.Any decision or resolution of the Regional Director or hearing
officer pursuant to this provision may be appealed on the same grounds provided in
Article 223 of this Code, within five (5) calendar days from receipt of a copy of
said decision or resolution, to the National Labor Relations Commission which shall
resolve the appeal within ten (10) calendar days from the submission of the last
pleading required or allowed under its rules.The Secretary of Labor and Employment
or his duly authorized representative may supervise the payment of unpaid wages and
other monetary claims and benefits, including legal interest, found owing to any
employee or househelper under this Code. (As amended by Section 2, Republic Act No.
6715, March 21, 1989)Art. 217. Jurisdiction of the Labor Arbiters and the
Commission.a. Except as otherwise provided under this Code, the Labor Arbiters
shall have original and exclusive jurisdiction to hear and decide, within thirty
(30) calendar days after the submission of the case by the parties for decision
without extension, even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or nonagricultural:1. Unfair labor
practice cases;2. Termination disputes;3.
If accompanied with a claim for reinstatement, those cases that workers may file

involving wages, rates of pay, hours of work and other terms and conditions of
employment;4. Claims for actual, moral, exemplary and other forms of damages
arising from the employer-employee relations;5. Cases arising from any violation of
Article 264 of this Code, including questions involving the legality of strikes and
lockouts; and6. Except claims for Employees Compensation, Social Security, Medicare
and maternity benefits, all other claims arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount
exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a
claim for reinstatement.b. The Commission shall have exclusive appellate
jurisdiction over all cases decided by Labor Arbiters.c. Cases arising from the
interpretation or implementation of collective bargaining agreements and those
arising from the interpretation or enforcement of company personnel policies shall
be disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements. (As
amended by Section9, Republic Act No. 6715, March 21, 1989)Art. 111. Attorneys
fees.a. In cases of unlawful withholding of wages, the culpable party may be
assessed attorneys fees equivalent to ten percent of the amount of wages
recovered.b. It shall be unlawful for any person to demand or accept, in any
judicial or administrative proceedings for the recovery of wages, attorneys fees
which exceed ten percent of the amount of wages recoveredBOOK III RULE X
Administration and EnforcementSECTION 1. Visitorial power. The Secretary of Labor
and Employment or his duly authorized representatives, including Labor Regulations
Officers or Industrial Safety Engineers, shall have access to employer's records
and premises at any time of the day or night whenever work is being undertaken
therein, and right to copy therefrom, to question any employee, and to investigate
any fact, condition or matter relevant to the enforcement of any provision of the
Code and of any labor law, wage order or rules and regulations issued pursuant
thereto. SECTION 2. Enforcement power. (a) The Regional Director in cases where
employer relations shall exist, shall have the power to order and administer, after
due notice and hearing, compliance with the labor standards provisions of the Code
and other labor legislations based on the findings of the Labor Regulation Officers
or Industrial Safety Engineers (Labor Standard and W elfare Officer) and made in the
course of inspection, and to issue writs of execution to the appropriate authority
of the enforcement of his order. In line with the provisions of Article 128 in
relation to Articles 289 and 290 of the Labor Code as amended in cases, however,
where the employer contests the findings of the Labor Standards and W elfare
Officers and raises issues which cannot be resolved without considering evidentiary
matters that are not verifiable in the normal course of inspection, the Regional
Director concerned shall indorse the case to the appropriate arbitration branch of
the National Labor Relations Commission for adjudication. (b) The Regional Director
shall give the employer fifteen (15) days within which to comply with his order
before issuing a writ of execution. Copy of such order or writ of execution shall
immediately be furnished the Secretary of Labor and Employment. SECTION 3.
Enforcement power on health and safety of workers. (a) The Regional Director may
likewise order stoppage of work or suspension of operations of any unit or
department of an establishment when non-compliance with the law, safety order or
implementing rules and regulations poses grave and imminent danger to the health
and safety of workers in the workplace. (b) W ithin 24 hours from issuance of the
order of stoppage or suspension, a hearing shall be conducted to determine whether
the order for the stoppage of work or suspension of operation shall be lifted or
not. The proceedings shall be terminated within seventy-two (72) hours and a copy
of such order or resolution shall be immediately furnished the Secretary of Labor
and Employment. In case the violation is attributable to the fault of the employer,
he shall pay the employees concerned their salaries or wages during the period of
such stoppage of work or suspension of operation. SECTION 4. Power to review. (a)
The Secretary of Labor and Employment, at his own initiative or upon request of the
employer and/or employee, may review the order of the Regional Director. The order
of the Regional Director shall be immediately final and executory unless stayed by
the Secretary of Labor and Employment upon posting by the employer of a reasonable

cash or surety bond as fixed by the Regional Director. (b) In aid of his power of
review, the Secretary of Labor and Employment may direct the Bureau of W orking
Conditions to evaluate the findings or orders of the Regional Director. The
decision of the Secretary of Labor and Employment shall be final and executory.
SECTION 5. Interference and injunctions prohibited. It shall be unlawful for any
person or entity to obstruct, impede, delay or otherwise render ineffective the
exercise of the enforcement power of the Secretary of Labor and Employment,
Regional Director or their duly authorized representatives pursuant to the
authority granted by the Code and its implementing rules and regulations, and no
inferior court or entity shall issue temporary or permanent injunction or
restraining order or otherwise assume jurisdiction over any case involving the
enforcement orders issued in accordance with the Code. In addition to the penalties
provided for by the Labor Code, any government employees found guilty of violation
or abuse of authority, shall be subject to the provisions of Presidential Decree
No. 6Thirteenth Month Pay (PD 851)PRESIDENTIAL DECREE NO. 851; REQUIRING ALL
EMPLOYERS TO PAY THEIR EMPLOYEES A 13th-MONTH PAY W HEREAS, it is necessary to
further protect the level of real wages from the ravage of worldwide inflation; #
#W HEREAS, there has been no increase in the legal minimum wage rates since 1970; #
#W HEREAS, the Christmas season is an opportune time for society to show its concern
for the plight of the working masses so they may properly celebrate Christmas and
New Year. # #NOW , THEREFORE, I, FERDINAND E. MARCOS, by virtue of the powers
vested in me by the Constitution, do hereby decree as follows: # #Section 1. All
employers are hereby required to pay all their employees receiving a basic salary
of not more than P1,000 a month, regardless of the nature of their employment, a
13th-month pay not later than December 24 of every year. # #Sec. 2. Employers
already paying their employees a 13th-month pay or its equivalent are not covered
by this Decree. # #Sec. 3. This Decree shall take effect immediately. #History of
the LawDentech Mfg. Corp v. NLRC Respondents used to work as welders, upholsterers,
and painters of company making dental equipment. They were dismissed: allegedly
because of union activities (Confederation of Citizens Labor Union) They wanted to
get their 13th month pay as well as refund of cash bond filed. They cited PD 851
saying that they are receiving more than 1k per month and thus they are entitled
(under the PD) to 13th month pay. Company claimed that due to financial losses,
they are, under the same PD, exempted as distressed employers. LA ruled for
reinstating complainants and NLRC affirmed LA. Case was elevated to the Supreme Ct.
by the Pet saying that Respondents abandoned their work and that Memorandum No. 28
(eliminating 1k salary ceiling) does not apply to the case since it was enforced
long after he case was instituted. Court held that 1k salary ceiling in PD 851
pertains to basic salary and not monthly compensation and that in invoking
exemption, the company must be deemed qualified after prior authorization from the
Secretary of Labor and Employment. As to another Issue: As for refund of the cash
bond, the company said that these have been given to a certain carinderia to pay
for the outstanding accounts of private respondents. The main issue is W ON such
requirement of cash bond is valid. No. Company failed to show that it is authorized
by law to require workers to file cash bond. Refund! Petition dismissed.Coverage
REVISED GUIDELINES ON THE IMPLEMENTATION OF THE 13TH MONTH PAY LAW .1.Removal of
Salary Ceiling. On August 13, 1986, President Corazon C. Aquino issued Memorandum
Order No. 28 which provides as follows: "Section 1 of Presidential Decree No. 851
is hereby modified to the extent that all employers are hereby required to pay all
their rank-and-file employees a 13th month pay not later than December 24 of every
year."Before its modification by the aforecited Memorandum Order, P.D. No. 851
excludes from entitlement to the 13th month pay those employees who were receiving
a basic salary of more than P1,000.00 a month. W ith the removal of the salary
ceiling of P1,000.00, all rank and file employees are now entitled to a 13th month
pay regardless of the amount of basic salary that they receive in a month if their
employers are not otherwise exempted from the application of P.D. No. 851. Such
employees are entitled to the benefit regardless of their designation or employment
status, and irrespective of the method by which their wages are paid, provided that
they have worked for at least one (1) month during a calendar year. 2.Exempted

Employers. The following employers are still not covered by P.D. No. 851: a.The
Government and any of its political subdivisions, including government-owned and
controlled corporations, excepts those corporations operating essentially
as private subsidiaries of the Government; b.Employers already paying their
employees a 13th month pay or more in a calendar year or its equivalent at the time
of this issuance; c.Employers of household helpers and persons in the personal
service of another in relation to such workers; and d.Employers of those who are
paid on purely commission, boundary, or task basis, and those who are paid a fixed
amount for performing specific work, irrespective of the time consumed in the
performance thereof, except where the workers are paid on piece-rate basis in which
case the employer shall grant the required 13th month pay to such workers. As used
herein, workers paid on piece-rate basis shall refer to those who are paid a
standard amount for every piece or unit of work produced that is more or less
regularly replicated, without regard to the time spent in producing the same. The
term "its equivalent" as used on paragraph (b) hereof shall include Christmas
bonus, mid-year bonus, cash bonuses and other payments amounting to not less than
1/12 of the basic salary but shall not include cash and stock dividends, cost of
living allowances and all other allowances regularly enjoyed by the employee, as
well as non-monetary benefits. W here an employer pays less than required 1/12th of
the employees basic salary, the employer shall pay the difference.3.W ho are Rankand File Employees. The Labor Code distinguishes a rank-and-file employee from a
managerial employee. It provides that a managerial employee is one who is vested
with powers of prerogatives to lay down and execute management policies and/or to
hire, transfer, suspend, lay-off, recall discharge, assign or discipline employees,
or to effectively recommend such managerial actions. All employees not falling
within this definition are considered rank-and-file employees. The above
distinction shall be used as guide for the purpose of determining who are rank-andfile employees entitled to the mandated 13th month pay. 4.Amount and payment of
13th Month Pay (a)Minimum of the Amount. The minimum 13th month pay required by
law shall not be less than one-twelfth of the total basic salary earned by an
employee within a calendar year. For the year 1987, the computation of the 13th
month pay shall include the cost of living allowances (COLA) integrated into the
basic salary of a covered employee pursuant to Executive Order 178. E.O. No. 178
provides, among other things, that the P9.00 of the daily COLA of P17.00 for nonagricultural workers shall be integrated into the basic pay of covered employees
effective 1 May 1987, and the remaining P8.00 effective 1 October 1987. For
establishments with less than 30 employees and paid-up capital of P500,000 or less,
the integration of COLAs shall be as follows: P4.50 effective on 1 May 1987; P4.50
on 1 October 1987; and P8.00 effective 1 January 1988. Thus, in the computation of
the 13th month pay for 1987, the COLAs integrated into the basic pay shall be
included as of the date of their integration. W here the total P17.00 daily COLA
was integrated effective 1 May 1987 or earlier the inclusion of said COLA as part
of the of the basic pay for the purpose of computing the 13th month pay shall be
reckoned from the date of actual integration. The "basic salary" of an employee for
the purpose of computing the 13th month pay shall include all remunerations or
earning paid by this employer for services rendered but does not include allowances
and monetary benefits which are not considered or integrated as part of the regular
or basic salary, such as the cash equivalent of unused vacation and sick leave
credits, overtime, premium, night differential and holiday pay, and cost-of-living
allowances. However, these salary-related benefits should be included as part of
the basic salary in the computation of the 13th month pay if by individual or
collective agreement, company practice or policy, the same are treated as part of
the basic salary of the employees. (b)Time of Payment. The required 13th month
pay shall be paid not later than December 24 of each year. An employer, however,
may give to his employees one half () of the required 13th month pay before the
opening of the regular school year and the other half on before the 24th of
December of every year. The frequency of payment of this monetary benefit may be
the subject of agreement between the employer and the recognized/collective
bargaining agent of the employees. 5.13th Month Pay for Certain Types of

Employees. (a)Employees Paid by Results. Employees who are paid on piece work
basis are by law entitled to the 13th month pay. Employees who are paid a fixed or
guaranteed wage plus commission are also entitled to the mandated 13th month pay,
based on their total earnings during the calendar year, i.e., on both their fixed
or guaranteed wage and commission. (b)Those with Multiple Employers. Government
employees working part time in a private enterprise, including private educational
institutions, as well as employees working in two or more private firms, whether on
full or part time basis, are entitled to the required 13th month pay from all their
private employers regardless of their total earnings from each or all their
employers.(c)Private School Teachers. Private school teachers, including
faculty members of universities and colleges, are entitled to the required 13th
month pay, regardless of the number of months they teach or are paid within a year,
if they have rendered service for at least one (1) month within a year. 6.13th
Month Pay of Resigned or Separated Employee. An employee who has resigned or whose
services were terminated at any time before the time for payment of the 13th month
pay is entitled to this monetary benefit in proportion to the length of time he
worked during the year, reckoned from the time he started working during the
calendar year up to the time of his resignation or termination from the service.
Thus, if he worked only from January up to September his proportionate 13th month
pay should be equivalent of 1/12 his total basic salary he earned during that
period. The payment of the 13th month pay may be demanded by the employee upon the
cessation of employer-employee relationship. This is consistent with the principle
of equity that as the employer can require the employee to clear himself of all
liabilities and property accountability, so can the employee demand the payment of
all benefits due him upon the termination of the relationship. 7.Non-inclusion in
Regular W age. The mandated 13th month pay need not be credited as part of regular
wage of employees for purposes of determining overtime and premium pays, fringe
benefits insurance fund, Social Security, Medicare and private retirement plans.
Prohibitions against reduction or elimination of benefits. Nothing herein shall be
construed to authorize any employer to eliminate, or diminish in any way,
supplements, or other employee benefits or favorable practice being enjoyed by the
employee at the time of promulgation of this issuance. Rationale (W hereas Clauses)
Amount and Date of Payment- Revised GuidelinesRevised Guidelines, Sec 4.Amount
and payment of 13th Month Pay (a)Minimum of the Amount. The minimum 13th month
pay required by law shall not be less than one-twelfth of the total basic salary
earned by an employee within a calendar year. For the year 1987, the computation of
the 13th month pay shall include the cost of living allowances (COLA) integrated
into the basic salary of a covered employee pursuant to Executive Order 178. E.O.
No. 178 provides, among other things, that the P9.00 of the daily COLA of P17.00
for non-agricultural workers shall be integrated into the basic pay of covered
employees effective 1 May 1987, and the remaining P8.00 effective 1 October 1987.
For establishments with less than 30 employees and paid-up capital of P500,000 or
less, the integration of COLAs shall be as follows: P4.50 effective on 1 May 1987;
P4.50 on 1 October 1987; and P8.00 effective 1 January 1988. Thus, in the
computation of the 13th month pay for 1987, the COLAs integrated into the basic pay
shall be included as of the date of their integration. W here the total P17.00
daily COLA was integrated effective 1 May 1987 or earlier the inclusion of said
COLA as part of the of the basic pay for the purpose of computing the 13th month
pay shall be reckoned from the date of actual integration. The "basic salary" of an
employee for the purpose of computing the 13th month pay shall include all
remunerations or earning paid by this employer for services rendered but does not
include allowances and monetary benefits which are not considered or integrated as
part of the regular or basic salary, such as the cash equivalent of unused vacation
and sick leave credits, overtime, premium, night differential and holiday pay, and
cost-of-living allowances. However, these salary-related benefits should be
included as part of the basic salary in the computation of the 13th month pay if by
individual or collective agreement, company practice or policy, the same are
treated as part of the basic salary of the employees. (b)Time of Payment. The
required 13th month pay shall be paid not later than December 24 of each year. An

employer, however, may give to his employees one half () of the required 13th
month pay before the opening of the regular school year and the other half on
before the 24th of December of every year. The frequency of payment of this
monetary benefit may be the subject of agreement between the employer and the
recognized/collective bargaining agent of the employees. Basic W age/ Commissions
Sec 4Songco v. NLRCF.E. Zuelig M. Inc. filed with DOLE an application to terminate
Jose Songco, Cipres and Manuel on the gound of retrenchment. The petitioners
opposed this claiming that the company is not suffering from any losses but later
on, contended that they are no longer contesting their dismissal but rather wanted
to receive separation pay including the commissions, allowances etc which they
receive every month. LA excluded the commissions and NLRC dismissed the appeal.
Hence this petition. For allowances, the court used Santos v. NLRC as the
prevailing doctrine wherein it said that computation of backwages and separation
pay should include transportation and emergency living allowances. As for
commissions, the court held that commission is not part of the basic salary but is
the reward of an agent or salesman and that the nature of his job as a salesman
demonstrates that such type of remuneration is part of their salary. Petition is
Granted.Boie Takeda v. De La SernaA routine inspection was conducted in the
premises of Boie Takeda Chemicals and it was found that BT had not been including
the commissions earned by its medical representatives in the computation of their
13th month pay. Labor Dept issued a notice of inspection results which was disputed
by BT expressing that commissions are not part of the basic or regular pay of their
med reps. Regional Director issued the order of payment/ BT filed a motion for
reconsideration which the Labor Secretary ruled on, affirming the regional
director. Hence this petition.The court rules for BT. Memorandum 28 issued by
Corazon Aquino did not repeal PD 851 but rather merely modified Sec 1 of PD 851
removing the P1k salary ceiling. Therefore, the interpretation of basic salary in
PD 851 should be followed in memorandum 28 which is rate of pay for a standard
work period exclusive of such additional payments as bonuses and overtime.
Petitions Granted.
Phil. Duplicators v. NLRCLA directed petitioner to pay 13th
month pay to private respondent employees plus the sales commissions. NLRC affirmed
this order and the petition for certiorari was dismissed. Thus this petition for
reconsideration submitting that the decision in Boie Takeda has reversed the
decision of Philippine Duplicators and should thus be applicable in their case. The
court said that Boie Takeda is not a precedent under stare decisis and that the
petirion of PD has been decided with finality. Also, PD did not raise the issue of
the validity of the 13th month pay law as issued by Franklin Drilon and that the
doctrines in the two cases actually co-exist.Sales commissions received for every
duplicating machine sold are part of the basc compensatin of the salesmen of
Philippine Duplicators in doing their job and that these are not over time payments
or profit sharing payments not any other benefit. These salesmens commissions form
part of the definition of basic salary. A bonus is a gratuity or act of liberality
on the part of the giver which the recipient has no right to demand. Productivity
bonuses, although similar to Sales commission (both being incentives) are tied to
productivity or profit generation whereas sales commissions are directly
proportional to the extent or energy of the employees endeavors such as in the case
of BT and PD. Petition is denied.Substitute Payment Sec 2BonusNatureDefinition,
W hen demandableW orking Conditions for Special Groups of W orkersW omenRA 7192 W omen
in Development and Nation Building ActRA 7877 Anti sexual Harassment ActW omen under
the constitutionArt II Section 14. The State recognizes the role of women in
nation-building, and shall ensure the fundamental equality before the law of women
and men. Art XIII Section 14. The State shall protect working women by providing
safe and healthful working conditions, taking into account their maternal
functions, and such facilities and opportunities that will enhance their welfare
and enable them to realize their full potential in the service of the nation.
CoverageBook III, Rule XII, SECTION 1. General statement on coverage. This Rule
shall apply to all employers, whether operating for profit or not, including
educational, religious and charitable institutions, except to the Government and to
government-owned or controlled corporations and to employers of household helpers

and persons in their personal service insofar as such workers are concerned.
Prohibited ActsNight W ork/ExceptionArt. 130. Nightwork prohibition. No woman,
regardless of age, shall be employed or permitted or suffered to work, with or
without compensation:a. In any industrial undertaking or branch thereof between ten
oclock at night and six oclock in the morning of the following day; orb. In any
commercial or non-industrial undertaking or branch thereof, other than
agricultural, between midnight and six oclock in the morning of the following day;
orc. In any agricultural undertaking at nighttime unless she is given a period of
rest of not less than nine (9) consecutive hours.Art. 131. Exceptions. The
prohibitions prescribed by the preceding Article shall not apply in any of the
following cases:a. In cases of actual or impending emergencies caused by serious
accident, fire, flood, typhoon, earthquake, epidemic or other disasters or
calamity, to prevent loss of life or property, or in cases of force majeure or
imminent danger to public safety;b. In case of urgent work to be performed on
machineries, equipment or installation, to avoid serious loss which the employer
would otherwise suffer;c. W here the work is necessary to prevent serious loss of
perishable goods;d. W here the woman employee holds a responsible position of
managerial or technical nature, or where the woman employee has been engaged to
provide health and welfare services;e. W here the nature of the work requires the
manual skill and dexterity of women workers and the same cannot be performed with
equal efficiency by male workers;f. W here the women employees are immediate members
of the family operating the establishment or undertaking; andg. Under other
analogous cases exempted by the Secretary of Labor and Employment in appropriate
regulations.DiscriminationArt. 135. Discrimination prohibited. It shall be unlawful
for any employer to discriminate against any woman employee with respect to terms
and conditions of employment solely on account of her sex.The following are acts of
discrimination:a. Payment of a lesser compensation, including wage, salary or other
form of remuneration and fringe benefits, to a female employees as against a male
employee, for work of equal value; andb. Favoring a male employee over a female
employee with respect to promotion, training opportunities, study and scholarship
grants solely on account of their sexes. Criminal liability for the willful
commission of any unlawful act as provided in this Article or any violation of the
rules and regulations issued pursuant to Section 2 hereof shall be penalized as
provided in Articles 288 and 289 of this Code: Provided, That the institution of
any criminal action under this provision shall not bar the aggrieved employee from
filing an entirely separate and distinct action for money claims, which may include
claims for damages and other affirmative reliefs. The actions hereby authorized
shall proceed independently of each other. (As amended by Republic Act No. 6725,
May 12, 1989)Stipulation against Marriage Art. 136. Stipulation against marriage.
It shall be unlawful for an employer to require as a condition of employment or
continuation of employment that a woman employee shall not get married, or to
stipulate expressly or tacitly that upon getting married, a woman employee shall be
deemed resigned or separated, or to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by reason of her marriage.Book III Rule
XII SECTION 13. Prohibited acts. It shall be unlawful for any employer:
(e) To
require as a condition for a continuation of employment that a woman employee shall
not get married or to stipulate expressly or tacitly that upon getting married, a
woman employee shall be deemed resigned or separated, or to actually dismiss,
discharge, discriminate or otherwise prejudice a woman employee merely by reason of
her marriage. Discharge to prevent enjoyment of benefits (137, 1)Art. 137.
Prohibited acts.a. It shall be unlawful for any employer:1. To deny any woman
employee the benefits provided for in this Chapter or to discharge any woman
employed by him for the purpose of preventing her from enjoying any of the benefits
provided under this Code.Book III Rule XII SECTION 13. Prohibited acts. It shall
be unlawful for any employer: To discharge any woman employed by him for the
purpose of preventing such woman from enjoying the maternity leave, facilities and
other benefits provided under the Code;Discharge on account of pregnancy (137, 2-3)
Art. 137. Prohibited acts.a. It shall be unlawful for any employer:2. To discharge
such woman on account of her pregnancy, or while on leave or in confinement due to

her pregnancy;3. To discharge or refuse the admission of such woman upon returning
to her work for fear that she may again be pregnant.Book III Rule XII SECTION 13.
Prohibited acts. It shall be unlawful for any employer: (b) To discharge such
woman employee on account of her pregnancy, or while on leave or in confinement due
to her pregnancy; (c) To discharge or refuse the admission of such woman upon
returning to her work for fear that she may be pregnant; Discharge on account of
testimonyBook III Rule XII SECTION 13. Prohibited acts. It shall be unlawful for
any employer: (d) To discharge any woman or child or any other employee for having
filed a complaint or having testified or being about to testify under the Code; and
FacilitiesArt. 132. Facilities for women. The Secretary of Labor and Employment
shall establish standards that will ensure the safety and health of
women employees. In appropriate cases, he shall, by regulations, require any
employer to:a. Provide seats proper for women and permit them to use such seats
when they are free from work and during working hours, provided they can perform
their duties in this position without detriment to efficiency;b. To establish
separate toilet rooms and lavatories for men and women and provide at least a
dressing room for women;c. To establish a nursery in a workplace for the benefit of
the women employees therein; andd. To determine appropriate minimum age and other
standards for retirement or termination in special occupations such as those of
flight attendants and the like.Art. 134. Family planning services; incentives for
family planning.a. Establishments which are required by law to maintain a clinic or
infirmary shall provide free family planning services to their employees which
shall include, but not be limited to, the application or use of contraceptive pills
and intrauterine devices.b. In coordination with other agencies of the government
engaged in the promotion of family planning, the Department of Labor and Employment
shall develop and prescribe incentive bonus schemes to encourage family planning
among female workers in any establishment or enterprise.Book III Rule XII SECTION
14. Facilities for woman employees. Subject to the approval of the Secretary of
Labor and Employment, the Bureau of W omen and Young W orkers shall, within thirty
(30) days from the effective date of these Rules, determine in an appropriate
issuance the work situations for which the facilities enumerated in Article 131 of
the Code shall be provided, as well as the appropriate minimum age and other
standards for retirement or termination of employment in special occupations in
which women are employed.Special W omen MattersArt. 138. Classification of certain
women workers. Any woman who is permitted or suffered to work, with or without
compensation, in any night club, cocktail lounge, massage clinic, bar or similar
establishments under the effective control or supervision of the employer for a
substantial period of time as determined by the Secretary of Labor and Employment,
shall be considered as an employee of such establishment for purposes of labor and
social legislation.Maternity LeaveSocial Security Act of 1997, RA 8282, Sec 14-A
Maternity Leave Benefit. - A female member who has paid at least three (3) monthly
contributions in the twelve-month period immediately preceding the semester of her
childbirth or miscarriage shall be paid a daily maternity benefit equivalent to one
hundred percent (100%) of her average daily salary credit for sixty (60) days or
seventy-eight (78) days in case of caesarian delivery, subject to the following
conditions: "(a) That the employee shall have notified her employer of her
pregnancy and the probable date of her childbirth, which notice shall be
transmitted to the SSS in accordance with the rules and regulations it may provide;
"(b) The full payment shall be advanced by the employer within thirty (30) days
from the filing of the maternity leave application; "(c) That payment of daily
maternity benefits shall be a bar to the recovery of sickness benefits provided by
this Act for the same period for which daily maternity benefits have been received;
"(d) That the maternity benefits provided under this section shall be paid only for
the first four (4) deliveries or miscarriages; "(e) That the SSS shall immediately
reimburse the employer of one hundred percent (100%) of the amount of maternity
benefits advanced to the employee by the employer upon receipt of satisfactory
proof of such payment and legality thereof; and "(f) That if an employee member
should give birth or suffer miscarriage without the required contributions having
been remitted for her by her employer to the SSS, or without the latter having been

previously notified by the employer of the time of the pregnancy, the employer
shall pay to the SSS damages equivalent to the benefits which said employee member
would otherwise have been entitled to. Art. 133. Maternity leave benefits.a. Every
employer shall grant to any pregnant woman employee who has rendered an aggregate
service of at least six (6) months for the last twelve (12) months, maternity leave
of at least two (2) weeks prior to the expected date of delivery and another four
(4) weeks after normal delivery or abortion with full pay based on her regular or
average weekly wages. The employer may require from any woman employee applying for
maternity leave the production of a medical certificate stating that delivery will
probably take place within two weeks.b. The maternity leave shall be extended
without pay on account of illness medically certified to arise out of the
pregnancy, delivery, abortion or miscarriage, which renders the woman unfit for
work, unless she has earned unused leave credits from which such extended leave may
be charged.c. The maternity leave provided in this Article shall be paid by the
employer only for the first four (4) deliveries by a woman employee after the
effectivity of this Code.Sexual Harrassment (RA 7877)MinorsArt. 139. Minimum
employable age.a. No child below fifteen (15) years of age shall be employed,
except when he works directly under the sole responsibility of his parents or
guardian, and his employment does not in any way interfere with his schooling. b.
Any person between fifteen (15) and eighteen (18) years of age may be employed for
such number of hours and such periods of the day as determined by the Secretary of
Labor and Employment in appropriate regulations.c. The foregoing provisions shall
in no case allow the employment of a person below eighteen (18) years of age in an
undertaking which is hazardous or deleterious in nature as determined by the
Secretary of Labor and Employment.Art. 140. Prohibition against child
discrimination. No employer shall discriminate against any person in respect to
terms and conditions of employment on account of his age.Omnibus Rules RULE XII
Employment of W omen and MinorsSECTION 2. Employable age. Children below fifteen
(15) years of age may be allowed to work under the direct responsibility of their
parents or guardians in any non-hazardous undertaking where the work will not in
any way interfere with their schooling. In such cases, the children shall not be
considered as employees of the employers or their parents or guardians. SECTION 3.
Eligibility for employment. Any person of either sex, between 15 and 18 years of
age, may be employed in any non-hazardous work. No employer shall discriminate
against such person in regard to terms and conditions of employment on account of
his age. For purposes of this Rule, a non-hazardous work or undertaking shall mean
any work or activity in which the employee is not exposed to any risk which
constitutes an imminent danger to his safety and health. The Secretary of Labor and
Employment shall from time to time publish a list of hazardous work and activities
in which persons 18 years of age and below cannot be employed.Minors under the
constitutionArt II Section 13. The State recognizes the vital role of the youth in
nation-building and shall promote and protect their physical, moral, spiritual,
intellectual, and social well-being. It shall inculcate in the youth patriotism and
nationalism, and encourage their involvement in public and civic affairs. Coverage
RA 9231 Section 2. Section 12 of the same Act, as amended, is hereby further
amended to read as follows:"Sec. 2. Employment of Children - Children below fifteen
(15) years of age shall not be employed except:"1) W hen a child works directly
under the sole responsibility of his/her parents or legal guardian and where only
members of his/her family are employed: Provided, however, That his/her employment
neither endangers his/her life, safety, health, and morals, nor impairs his/her
normal development: Provided, further, That the parent or legal guardian shall
provide the said child with the prescribed primary and/or secondary education; or
"2) W here a child's employment or participation in public entertainment or
information through cinema, theater, radio, television or other forms of media is
essential: Provided, That the employment contract is concluded by the child's
parents or legal guardian, with the express agreement of the child concerned, if
possible, and the approval of the Department of Labor and Employment: Provided,
further, That the following requirements in all instances are strictly complied
with:"(a) The employer shall ensure the protection, health, safety, morals and

normal development of the child;"(b) The employer shall institute measures to


prevent the child's exploitation or discrimination taking into account the system
and level of remuneration, and the duration and arrangement of working time; and
"(c) The employer shall formulate and implement, subject to the approval and
supervision of competent authorities, a continuing program for training and skills
acquisition of the child."In the above-exceptional cases where any such child may
be employed, the employer shall first secure, before engaging such child, a work
permit from the Department of Labor and Employment which shall ensure observance of
the above requirements."For purposes of this Article, the term "child" shall apply
to all persons under eighteen (18) years of age."Book III RULE XII, Employment of
W omen and Minors. SECTION 1. General statement on coverage. This Rule shall apply
to all employers, whether operating for profit or not, including educational,
religious and charitable institutions, except to the Government and to governmentowned or controlled corporations and to employers of household helpers and persons
in their personal service insofar as such workers are concerned.
Employment of ChildrenArt. 139. Minimum employable age.a. No child below fifteen
(15) years of age shall be employed, except when he works directlyunder the sole
responsibility of his parents or guardian, and his employment does not in anyway
interfere with his schooling.b. Any person between fifteen (15) and eighteen (18)
years of age may be employed for suchnumber of hours and such periods of the day as
determined by the Secretary of Labor andEmployment in appropriate regulations.c.
The foregoing provisions shall in no case allow the employment of a person below
eighteen(18) years of age in an undertaking which is hazardous or deleterious in
nature asdetermined by the Secretary of Labor and Employment.RA 7610 ARTICLE VIII
W ORKING CHILDREN SECTION 12. Employment of Children. Children below fifteen (15)
years of age may be employed: Provided, That the following minimum requirements are
present:(a) The employer shall secure for the child a work permit from the
Department of Labor and Employment;(b) The employer shall ensure the protection,
health, safety and morals of the child;(c) The employer shall institute measures to
prevent exploitation or discrimination taking into account the system and level of
remuneration, and the duration and arrangement of working time; and(d) The employer
shall formulate and implement a continuous program for training and skill
acquisition of the child.The Department of Labor Employment shall promulgate rules
and regulations necessary for the effective implementation of this section.SECTION
13. Non-formal Education for W orking Children. The Department of Education,
Culture and Sports shall promulgate a course design under its non-formal education
program aimed at promoting the intellectual, moral and vocational efficiency of
working children who have not undergone or finished elementary or secondary
education. Such course design shall integrate the learning process deemed most
effective under giver circumstances.SECTION 14. Prohibition on the Employment of
Children Certain Advertisements. No person shall employ child models in all
commercials or advertisements promoting alcoholic beverages, intoxicating drinks,
tobacco and its byproducts and violence.SECTION 15. Duty of Employer. Every
employer shall comply with the duties provided for in Articles 108 and 109 of
Presidential Decree No. 603.SECTION 16. Penalties. Any person who shall violate
any provision of this Article shall suffer the penalty of a fine of not less than
One thousand pesos (P1,000) but not more than Ten thousand pesos (P10,000) or
imprisonment of not less than three (3) months but not more than three (3) years,
or both at the discretion of the court; Provided, That, in case of repeated
violations of the provisions of this Article, the offender's license to operate
shall be revoked.Department Order No. 4: RE: Hazardous W ork and Activities to
Persons Below 18 Years of AgeThe Department of Labor and Employments (DOLE) Order
No. 4 of 1999 outlines categories of hazardous work and prohibits the employment of
children in these categories. The list includes work with dangerous substances
(e.g., adhesives used in footwear manufacture), work hazardous to morals (e.g.,
employment in dance halls), work that entails exposure to extreme elements of cold,
heat, noise or pressure (e.g., deep-sea diving and underground work), and work that
is hazardous by its nature (e.g., mining, logging and pyrotechnics production).#
HYPERLINK

"http://www.dol.gov/ilab/media/reports/iclp/Advancing1/html/philippines.htm" \l
"1483" ##Hours of W orkRA 9231 Section 3. The same Act, as amended, is hereby
further amended by adding new sections to be denominated as Sections 12-A, 12-B,
12-C, and 12-D to read as follows:"Sec. 2-A. Hours of W ork of a W orking Child. Under the exceptions provided in Section 12 of this Act, as amended:"(1) A child
below fifteen (15) years of age may be allowed to work for not more than twenty
(20) hours a week: Provided, That the work shall not be more than four (4) hours at
any given day;"(2) A child fifteen (15) years of age but below eighteen (18) shall
not be allowed to work for more than eight (8) hours a day, and in no case beyond
forty (40) hours a week;"(3) No child below fifteen (15) years of age shall be
allowed to work between eight o'clock in the evening and six o'clock in the morning
of the following day and no child fifteen (15) years of age but below eighteen (18)
shall be allowed to work between ten o'clock in the evening and six o'clock in the
morning of the following day."Prohibitions against W orst forms of child laborRA
9231 Sec 3 "Sec. 12-D. Prohibition Against W orst Forms of Child Labor. - No child
shall be engaged in the worst forms of child labor. The phrase "worst forms of
child labor" shall refer to any of the following:"(1) All forms of slavery, as
defined under the "Anti-trafficking in Persons Act of 2003", or practices similar
to slavery such as sale and trafficking of children, debt bondage and serfdom and
forced or compulsory labor, including recruitment of children for use in armed
conflict; or"(2) The use, procuring, offering or exposing of a child for
prostitution, for the production of pornography or for pornographic performances;
or"(3) The use, procuring or offering of a child for illegal or illicit activities,
including the production and trafficking of dangerous drugs and volatile substances
prohibited under existing laws; or"(4) W ork which, by its nature or the
circumstances in which it is carried out, is hazardous or likely to be harmful to
the health, safety or morals of children, such that it:"a) Debases, degrades or
demeans the intrinsic worth and dignity of a child as a human being; or"b) Exposes
the child to physical, emotional or sexual abuse, or is found to be highly
stressful psychologically or may prejudice morals; or"c) Is performed underground,
underwater or at dangerous heights; or"d) Involves the use of dangerous machinery,
equipment and tools such as power-driven or explosive power-actuated tools; or"e)
Exposes the child to physical danger such as, but not limited to the dangerous
feats of balancing, physical strength or contortion, or which requires the manual
transport of heavy loads; or"f) Is performed in an unhealthy environment exposing
the child to hazardous working conditions, elements, substances, co-agents or
processes involving ionizing, radiation, fire, flammable substances, noxious
components and the like, or to extreme temperatures, noise levels, or vibrations;
or"g) Is performed under particularly difficult conditions; or"h) Exposes the child
to biological agents such as bacteria, fungi, viruses, protozoans, nematodes and
other parasites; or"i) Involves the manufacture or handling of explosives and other
pyrotechnic products."DiscriminationArt. 140. Prohibition against child
discrimination. No employer shall discriminate against anyperson in respect to
terms and conditions of employment on account of his age.JurisdictionRA 9231
Section 9. The same Act is hereby further amended by adding new sections to Section
16 to be denominated as Sections 16-A, 16-B and 16-C to read as follows:"Sec. 16-A.
Jurisdiction - The family courts shall have original jurisdiction over all cases
involving offenses punishable under this Act: Provided, That in cities or provinces
where there are no family courts yet, the regional trial courts and the municipal
trial courts shall have concurrent jurisdiction depending on the penalties
prescribed for the offense charged."The preliminary investigation of cases filed
under this Act shall be terminated within a period of thirty (30) days from the
date of filing."If the preliminary investigation establishes a prima facie case,
then the corresponding information shall be filed in court within forty eight (48)
hours from the termination of the investigation."Trial of cases under this Act
shall be terminated by the court not later than ninety (90) days from the date of
filing of information. Decision on said cases shall be rendered within a period of
fifteen (15) days from the date of submission of the case."Sec. 15. Exemptions from
Filing Fees. - W hen the victim of child labor institutes a separate civil action

for the recovery of civil damages, he/she shall be exempt from payment of filing
fees."Sec. 16-C. Access to Immediate Legal, Medical and Psycho-Social Services The working child shall have the right to free legal, medical and psycho-social
services to be provided by the State."HOUSEHELPERS/ CAREGIVERSDefinition, Section
1bRULE XIII Employment of Househelpers SECTION 1. General statement on coverage.
(a) The provisions of this Rule shall apply to all househelpers whether employed on
full or part-time basis. (b) The term "househelper" as used herein is synonymous to
the term "domestic servant" and shall refer to any person, whether male or female,
who renders services in and about the employer's home and which services are
usually necessary or desirable for the maintenance and enjoyment thereof, and
ministers exclusively to the personal comfort and enjoyment of the employer's
family.CoverageArt. 141. Coverage. This Chapter shall apply to all persons
rendering services in households for compensation."Domestic or household service"
shall mean service in the employers home which is usually necessary or desirable
for the maintenance and enjoyment thereof and includes ministering to the personal
comfort and convenience of the members of the employers household, including
services of family drivers.Non Household W orkArt. 145. Assignment to non-household
work. No househelper shall be assigned to work in a commercial, industrial or
agricultural enterprise at a wage or salary rate lower than that provided for
agricultural or non-agricultural workers as prescribed
herein. Apex Mining Co v. NLRCCandido performed laundry services at the staff
house of company. Began as piece rate worker then later was paid on monthly basis.
On Dec. 18, 1987, while she was hanging laundry, she fell on her back. She
immediately reported incident to dela Rosa, her immediate supervisor who offered
her 2thou then 5thou for her to quit her job. She refused and preferred to return
to work but petitioner did not allow her to work and she was dismissed. Petitioner
claims that Candido should be treated as a mere househelper or domestic servant and
not as a regular employee.Issue: W ON Candida was a householder; Held: No; Ratio: 1.
(b) The term "househelper" as used herein is synonymous to the term "domestic
servant" and shall refer to any person, whether male or female, who renders
services in and about the employer's home and which services are usually necessary
or desirable for the maintenance and enjoyment thereof, and ministers exclusively
to the personal comfort and enjoyment of the employer's family. 2. criteria:
personal comfort and enjoyment of the family of the employer in the home of said
employer(Separation pay granted. Reinstatement no longer possible.Conditions of
Employment141; Art. 142. Contract of domestic service. The original contract of
domestic service shall not last for more than two (2) years but it may be renewed
for such periods as may be agreed upon by the parties.Art. 143. Minimum wage.a.
Househelpers shall be paid the following minimum wage rates:1. Eight hundred pesos
(P800.00) a month for househelpers in Manila, Quezon, Pasay, and Caloocan cities
and municipalities of Makati, San Juan, Mandaluyong, Muntinlupa, Navotas, Malabon,
Paraaque, Las Pias, Pasig, Marikina, Valenzuela,Taguig and Pateros in Metro
Manila and in highly urbanized cities;2. Six hundred fifty pesos (P650.00) a month
for those in other chartered cities and first-class municipalities; and3. Five
hundred fifty pesos (P550.00) a month for those in other municipalities. Provided,
That the employers shall review the employment contracts of their househelpers
every three (3) years with the end in view of improving the terms and conditions
thereof.Provided, further, That those househelpers who are receiving at least One
thousand pesos (P1,000.00) shall be covered by the Social Security System (SSS) and
be entitled to all the benefits provided thereunder. (As amended by Republic Act
No. 7655, August 19, 1993)Art. 144. Minimum cash wage. The minimum wage rates
prescribed under this Chapter shall be the basic cash wages which shall be paid to
the househelpers in addition to lodging, food and medical attendance.145; Art. 146.
Opportunity for education. If the househelper is under the age of eighteen (18)
years, the employer shall give him or her an opportunity for at least elementary
education. The cost of education shall be part of the househelpers compensation,
unless there is a stipulation to the contrary.Art. 147. Treatment of househelpers.
The employer shall treat the househelper in a just and humane manner. In no case
shall physical violence be used upon the househelper. Art. 148. Board, lodging, and

medical attendance. The employer shall furnish the househelper, free of charge,
suitable and sanitary living quarters as well as adequate food and medical
attendance.Art. 149. Indemnity for unjust termination of services. If the period of
household service is fixed, neither the employer nor the househelper may terminate
the contract before the expiration of the term, except for a just cause. If the
househelper is unjustly dismissed, he or she shall be paid the compensation already
earned plus that for fifteen (15) days by way of indemnity. If the househelper
leaves without justifiable reason, he or she shall forfeit any unpaid salary duehim
or her not exceeding fifteen (15) days.Art. 150. Service of termination notice. If
the duration of the household service is not determined either in stipulation or by
the nature of the service, the employer or the househelper may give notice to put
an end to the relationship five (5) days before the intended termination of the
service.Art. 151. Employment certification. Upon the severance of the household
service relation, the employer shall give the househelper a written statement of
the nature and duration of the service and his or her efficiency and conduct as
househelper. Art. 152. Employment record. The employer may keep such records as he
may deem necessary to reflect the actual terms and conditions of employment of his
househelper, which the latter shall authenticate by signature or thumbmark upon
request of the employer. Civil CodeArt. 1689. Household service shall always be
reasonably compensated. Any stipulation that household service is without
compensation shall be void. Such compensation shall be in addition to the house
helper's lodging, food, and medical attendance. Art. 1690. The head of the family
shall furnish, free of charge, to the house helper, suitable and sanitary quarters
as well as adequate food and medical attendance. Art. 1691. If the house helper is
under the age of eighteen years, the head of the family shall give an opportunity
to the house helper for at least elementary education. The cost of such education
shall be a part of the house helper's compensation, unless there is a stipulation
to the contrary. Art. 1692. No contract for household service shall last for more
than two years. However, such contract may be renewed from year to year. Art. 1693.
The house helper's clothes shall be subject to stipulation. However, any contract
for household service shall be void if thereby the house helper cannot afford to
acquire suitable clothing. Art. 1694. The head of the family shall treat the house
helper in a just and humane manner. In no case shall physical violence be used upon
the house helper. Art. 1695. House helper shall not be required to work more than
ten hours a day. Every house helper shall be allowed four days' vacation each
month, with pay. Art. 1696. In case of death of the house helper, the head of the
family shall bear the funeral expenses if the house helper has no relatives in the
place where the head of the family lives, with sufficient means therefor. Art.
1697. If the period for household service is fixed neither the head of the family
nor the house helper may terminate the contract before the expiration of the term,
except for a just cause. If the house helper is unjustly dismissed, he shall be
paid the compensation already earned plus that for fifteen days by way of
indemnity. If the house helper leaves without justifiable reason, he shall forfeit
any salary due him and unpaid, for not exceeding fifteen days. Art. 1698. If the
duration of the household service is not determined either by stipulation or by the
nature of the service, the head of the family or the house helper may give notice
to put an end to the service relation, according to the following rules: (1) If the
compensation is paid by the day, notice may be given on any day that the service
shall end at the close of the following day; (2) If the compensation is paid by the
week, notice may be given, at the latest on the first business day of the week,
that the service shall be terminated at the end of the seventh day from the
beginning of the week; (3) If the compensation is paid by the month, notice may be
given, at the latest, on the fifth day of the month, that the service shall cease
at the end of the month.Art. 1699. Upon the extinguishment of the service relation,
the house helper may demand from the head of the family a written statement on the
nature and duration of the service and the efficiency and conduct of the house
helper.HOMEW ORKERSCoverage and Regulation Art. 153. Regulation of industrial
homeworkers. The employment of industrial homeworkers and field personnel shall be
regulated by the government through the appropriate regulations issued by the

Secretary of Labor and Employment to ensure the general welfare and protection of
homeworkers and field personnel and the industries employing them.Art. 154.
Regulations of Secretary of Labor. The regulations or orders to be issued pursuant
to this Chapter shall be designed to assure the minimum terms and conditions of
employment applicable to the industrial homeworkers or field personnel involved.
Art. 155. Distribution of homework. For purposes of this Chapter, the "employer" of
homeworkers includes any person, natural or artificial who, for his account or
benefit, or on behalf of any person residing outside the country, directly or
indirectly, or through an employee, agent contractor, sub-contractor or any other
person: 1. Delivers, or causes to be delivered, any goods, articles or materials to
be processed or fabricated in or about a home and thereafter to be returned or to
be disposed of or distributed in accordance with his directions; or2. Sells any
goods, articles or materials to be processed or fabricated in or about a home and
then rebuys them after such processing or fabrication, either by himself or through
some other person.D.O 5 now Book IIII Rule XIV, SECTION 1. General statement on
coverage. This Rule shall apply to any homeworker who performs in or about his
home any processing of goods or materials, in whole or in part, which have been
furnished directly or indirectly by an employer and thereafter to be returned to
the latter. DEPARTMENT ORDER NUMBER 5DefinitionDEPARTMENT ORDER NUMBER 5; SEC 2D.O
5 now Book IIII Rule XIV, SECTION 2. Definitions. As used in this Rule, the
following terms shall have the meanings indicated hereunder: (a) "Home" means any
room, house, apartment, or other premises used regularly, in whole or in part, as a
dwelling place, except those situated within the premises or compound of an
employer,
contractor, and the work performed therein is under the active or personal
supervision by, or for, the latter. (b) "Employer" means any natural or artificial
person who, for his own account or benefit, or on behalf of any person residing
outside the Philippines, directly or indirectly, or through any employee, agent,
contractor, sub-contractor; or any other person: (1) Delivers or causes to be
delivered any goods or articles to be processed in or about a home and thereafter
to be returned or to be disposed of or distributed in accordance with his
direction; or (2) Sells any goods or articles for the purpose of having such goods
or articles processed in or about a home and then repurchases them himself or
through another after such processing. (c) "Contractor" or "sub-contractor" means
any person who, for the account or benefit of an employer, delivers or caused to be
delivered to a homeworker goods or articles to be processed in or about his home
and thereafter to be returned, disposed of or distributed in accordance with the
direction of the employer. (d) "Processing" means manufacturing, fabricating,
finishing, repairing, altering, packing, wrapping or handling any material.
RegistrationDEPARTMENT ORDER NUMBER 5; 4 AND 6Conditions of Employment/ Deductions
DEPARTMENT ORDER NUMBER 5; 6 TO 9Book IIII Rule XIV, SECTION 4. Deductions. No
employee, contractor, or sub-contractor shall make any deduction from the
homeworker's earnings for the value of materials which have been lost, destroyed,
soiled or otherwise damaged unless the following conditions are met: (a) The
homeworker concerned is clearly shown to be responsible for the loss or damage; (b)
The employee is given reasonable opportunity to show cause why deductions should
not be made; (c) The amount of such deduction is fair and reasonable and shall not
exceed the actual loss or damages; and (d) The deduction is made at such rate that
the amount deducted does not exceed 20% of the homeworker's earnings in a week.
Book IIII Rule XIV, SECTION 5. Conditions for payment of work. (a) The employer
may require the homeworker to re-do work which has been improperly executed without
having to pay the stipulated rate more than once. (b) An employer, contractor, or
sub-contractor need not pay the homeworker for any work which has been done on
goods and articles which have been returned for reasons attributable to the fault
of the homeworker. Joint and Several Liability of Employment/ ContractorDEPARTMENT
ORDER NUMBER 5; SEC 11Book IIII Rule XIV, SECTION 7. Liability of employer and
contractor. W henever an employer shall contract with another for the performance
of the employer's work, it shall be the duty of such employer to provide in such
contract that the employees or homeworkers of the contractor and the latter's sub-

contractor shall be paid in accordance with the provisions of this Rule. In the
event that such contractor or sub-contractor fails to pay the wages or earnings of
his employees or homeworkers as specified in this Rule, such employer shall be
jointly and severally liable with the contractor or sub-contractor to the workers
of the latter, to the extent that such work is performed under such contract, in
the same manner as if the employees or homeworkers were directly engaged by the
employer.ProhibitionsDEPARTMENT ORDER NUMBER 5; SEC 13EnforcementDEPARTMENT ORDER
NUMBER 5; SEC 10Medical Dental and Occupational SafetyCoverageBOOK FOUR Health,
Safety and W elfare Benefits RULE I Medical and Dental ServicesSECTION 1. Coverage.
This Rule shall apply to all employers, whether operating for profit or not,
including the Government and any of its political subdivisions and government-owned
or controlled corporations, which employs in any workplace one or more workers. The
development and enforcement of dental standards shall continue to be under the
responsibility of the Bureau of Dental Health Services of the Department of Health.
First Aid TreatmentArt. 156. First-aid treatment. Every employer shall keep in his
establishment such first-aid medicines and equipment as the nature and conditions
of work may require, in accordance with such regulations as the Department of Labor
and Employment shall prescribe. The employer shall take steps for the training of a
sufficient number of employees in first-aidtreatment.Emergency Medical and Dental
ServicesW hen RequiredArt. 157. Emergency medical and dental services. It shall be
the duty of every employer to furnish his employees in any locality with free
medical and dental attendance and facilities consisting of:a. The services of a
full-time registered nurse when the number of employees exceeds fifty (50) but not
more than two hundred (200) except when the employer does not maintain hazardous
workplaces, in which case, the services of a graduate first-aider shall be provided
for the protection of workers, where no registered nurse is available. The
Secretary of Labor and Employment shall provide by appropriate regulations, the
services that shall be required where the number of employees does not exceed fifty
(50) and shall determine by appropriate order, hazardous workplaces for purposes of
this Article;b. The services of a full-time registered nurse, a part-time physician
and dentist, and an emergency clinic, when the number of employees exceeds two
hundred (200) but not more than three hundred (300); andc. The services of a fulltime physician, dentist and a full-time registered nurse as well as a dental clinic
and an infirmary or emergency hospital with one bed capacity for every one hundred
(100) employees when the number of employees exceeds three hundred (300). In cases
of hazardous workplaces, no employer shall engage the services of a physician or a
dentistwho cannot stay in the premises of the establishment for at least two (2)
hours, in the case of those engaged on part-time basis, and not less than eight (8)
hours, in the case of those employed on full-time basis. W here the undertaking is
non-hazardous in nature, the physician and dentist may be engaged on retainer
basis, subject to such regulations as the Secretary of Labor and Employment may
prescribe to insure immediate availability of medical and dental treatment and
attendance in case of emergency. (As amended by Presidential Decree NO. 570-A,
Section 26)W hen Not RequiredArt. 158. W hen emergency hospital not required. The
requirement for an emergency hospitalor dental clinic shall not be applicable in
case there is a hospital or dental clinic which is accessiblefrom the employers
establishment and he makes arrangement for the reservation therein of thenecessary
beds and dental facilities for the use of his employees.Employer AssistanceArt.
161. Assistance of employer. It shall be the duty of any employer to provide all
thenecessary assistance to ensure the adequate and immediate medical and dental
attendance andtreatment to an injured or sick employee in case of emergency.
Occupational Safety and Health Standards, training of supervisor or technicianW hen
RequiredBook IV Rule II SECTION 5. Training of personnel in safety and health.
Every employer shall take steps to train a sufficient number of his supervisors or
technical personnel in occupational safety and health. An employer may observe the
following guidelines in the training of his personnel: (a) In every non-hazardous
establishment or workplace having from fifty (50) to four hundred (400) workers
each shift, at least one of the supervisors or technical personnel shall be trained
in occupational health and safety and shall be assigned as part-time safety man.

Such safety man shall be the secretary of the safety committee. (b) In every nonhazardous establishment or workplace having over four hundred (400) workers per
shift, at least two of its supervisors shall be trained and a full-time safety man
shall be provided. (c) In every hazardous establishment or workplace having from
twenty (20) to two hundred (200) workers each shift, at least one of it supervisors
or technical man shall be trained who shall work as part-time safety man. He shall
be appointed as secretary of the safety committee therein. (d) In every hazardous
establishment or workplace having over two hundred (200) workers each shift, at
least two of its supervisors or technical personnel shall be trained and one of
them shall be appointed full-time safety man and secretary of the safety committee
therein. W hen Not RequiredBook IV Rule II SECTION 5. Training of personnel in
safety and health. Every employer shall take steps to train a sufficient number
of his supervisors or technical personnel in occupational safety and health. An
employer may observe the following guidelines in the training of his personnel:
(e) The employment of a full-time safety man not be required where the employer
enters into a written contract with a qualified consulting organization which shall
develop and carry out his safety and health activities; Provided, That the
consultant shall conduct plant visits at least four (4) hours a week and is subject
to call anytime to conduct accident investigations and is available during
scheduled inspections or surveys by the Secretary of Labor and Employment or his
authorized representatives. The provisions of this Section shall be made mandatory
upon orders of the Secretary of Labor and Employment as soon as he is satisfied
that adequate facilities on training in occupational safety and health are
available in the Department of Labor and Employment and other public or private
entities duly accredited by the Secretary of Labor and Employment. Enforcement or
DOLE obligationsChapter II OCCUPATIONAL HEALTH AND SAFETYArt. 162. Safety and
health standards. The Secretary of Labor and Employment shall, by appropriate
orders, set and enforce mandatory
occupational safety and health standards to eliminate or reduce occupational
safety and health hazards in all workplaces and institute new, and update existing,
programs to ensure safe and healthful working conditions in all places of
employment.Art. 163. Research. It shall be the responsibility of the Department of
Labor and Employment to conduct continuing studies and research to develop
innovative methods, techniques and approaches for dealing with occupational safety
and health problems; to discover latent diseases by establishing causal connections
between diseases and work in environmental conditions; and to develop medical
criteria which will assure insofar as practicable that no employee will suffer
impairment or diminution in health, functional capacity, or life expectancy as a
result of his work and working conditions.Art. 164. Training programs. The
Department of Labor and Employment shall develop and implement training programs to
increase the number and competence of personnel in the field of occupational safety
and industrial health.Art. 165. Administration of safety and health laws.a. The
Department of Labor and Employment shall be solely responsible for the
administration and enforcement of occupational safety and health laws, regulations
and standards in all establishments and workplaces wherever they may be located;
however, chartered cities may be allowed to conduct industrial safety inspections
of establishments within theirrespective jurisdictions where they have adequate
facilities and competent personnel for the purpose as determined by the Department
of Labor and Employment and subject to national standards established by the
latter.b. The Secretary of Labor and Employment may, through appropriate
regulations, collect reasonable fees for the inspection of steam boilers, pressure
vessels and pipings and electrical installations, the test and approval for safe
use of materials, equipment and other safety devices and the approval of plans for
such materials, equipment and devices. The fee so collected shall be deposited in
the national treasury to the credit of the occupational safety and health fund and
shall be expended exclusively for the administration and enforcement of safety and
other labor laws administered by the Department of Labor and Employment.Article 166
to 208 is repealed by the SSS Law of 1997Re: Art. 209 See: NHI Law Art. 209.
Medical care. The Philippine Medical Care Plan shall be implemented as provided

under RA 6111, as amended.Book IV Rule II SECTION 8. Administration and


enforcement. (a) Every employer shall give to the Secretary of Labor and
Employment or his duly authorized representative access to its premises and records
at any time of the day and night when there is work being undertaken therein for
the purpose of determining compliance with the provisions of this Rule. (b) Every
establishment or workplace shall be inspected at least once a year to determine
compliance with the provisions of this Rule. Special inspection visits, however,
may be authorized by the Regional Office to investigate accidents, conduct surveys
requested by the Bureau of W orking Conditions, follow-up inspection,
recommendations or to conduct investigations or inspections upon request of an
employer, worker or a labor union in the establishmentEmployee Classification
Omnibus Rules Book VI (Post Employment) Sec 1, 5, 6: TITLE I: Termination of
Employment Section 1. Coverage. This Rule shall apply to all establishments and
undertakings, whether operated for profit or not, including educational, medical,
charitable and religious institutions and organizations in cases of regular
employment with the exception of the Government and its political subdivisions
including government-owned or controlled corporations. Coverage Art. 278.
Coverage. The provisions of this Title shall apply to all establishments or
undertakings, whether for profit or not.Omnibus Rules Book VI (Post Employment) Sec
1, 5, 6: TITLE I: Termination of Employment Section 1. Coverage. This Rule shall
apply to all establishments and undertakings, whether operated for profit or not,
including educational, medical, charitable and religious institutions and
organizations in cases of regular employment with the exception of the Government
and its political subdivisions including government-owned or controlled
corporations.Employee Classification 280 to 281Art. 280. Regular and casual
employment. The provisions of written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or service to be performed is seasonal
in nature and the employment is for the duration of the season.An employment shall
be deemed to be casual if it is not covered by the preceding paragraph: Provided,
That any employee who has rendered at least one year of service, whether such
service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue
while such activity exists. Art. 281. Probationary employment. Probationary
employment shall not exceed six (6) months from the date the employee started
working, unless it is covered by an apprenticeship agreement stipulating a longer
period. The services of an employee who has been engaged on a probationary basis
may be terminated for a just cause or when he fails to qualify as a regular
employee in accordance with reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee.Omnibus Rules Book VI
(Post Employment) Sec 1, 5, 6: TITLE I: Termination of Employment Section 5. (a)
Regular employment. - The provisions of written agreements to the contrary
notwithstanding and regardless of the oral agreements of the parties, employment
shall be deemed regular for purposes of Book VI of the # HYPERLINK
"http://www.chanrobles.com/legal4labor.htm" \l "LABOR%20CODE%20OF%20THE
%20PHILIPPINES%20%5BFULL%20TEXT%5D" #Labor Code# where employee has been engaged to
perform activities which are usually necessary or desirable in the usual business
or trade of the employer, except where the employment has been fixed for a specific
project or undertaking, the completion or termination of which has been determined
at the time of the engagement of the employee or where the job, work or service to
be performed is seasonal in nature and the employment is for the duration of the
season. (b) Casual employment. - There is casual employment where an employee is
engaged to perform a job, work or service which is merely incidental to the
business of the employer, and such job, work or service is for a definite period

made known to the employee at the time of engagement: Provided, that any employee
who has rendered at least one year of service, whether such service is continuous
or not, shall be considered a regular employee with respect to the activity in
which he is employed and his employment shall continue while such activity exists.
Notwithstanding the foregoing distinctions, every employee shall be entitled to the
rights and privileges, and shall be subject to the duties and obligations, as may
be granted by law to regular employees during the period of their actual
employment."Section 6. Probationary employment. - There is probationary employment
where the employee, upon his engagement, is made to undergo a trial period during
which the employer determines his fitness to qualify for regular employment based
on reasonable standards made known to him at the time of engagement. "Probationary
employment shall be governed by the following rules: (a) W here the work for which
the employee has been engaged is learnable or apprenticeable in accordance with the
standards prescribed by the Department of Labor and Employment, the period of
probationary employment shall be limited to the authorized learnership or
apprenticeship period, which is applicable. (b) W here the work is neither learnable
nor apprenticeable, the period of probationary employment shall not exceed six
months reckoned from the date the employee actually started working. (c) The
services of an employee who has been engaged on probationary basis may be
terminated only for a just or authorized cause, when he fails to qualify as a
regular employee in accordance with reasonable standards prescribed by the
employer. (d) In all cases of probationary employment, the employer shall make
known to the employee the standards under which he will qualify as a regular
employee at the time of his engagement. W here no standards are made known to the
employee at that time, he shall be deemed a regular employee.Employer recognition
Romares v. NLRCArtemio Romares was employed by PILMICO Foods Corporation in its
Maintenance/Projects/Engineering Department to paint, repair and conduct
maintenance on the Corporations business premises. Upon his dismissal from the
company he filed a complaint with the LA for illegal dismissal. The LA agreed with
him saying that the records revealed that he was hired, terminated, and rehired
again 3 times in a span of more than 3 years and performed the same functions in
the same department.In Kimberly Independent Labor Union v. Hon. Franklin Drilon,
the court classified 2 kinds of regular employeesThose engaged to perform
activities which are usually necessary or desirable in the
usual business or trade of the employerThose who have rendered at least one year
of service whether continuous or broken.The LA ruled that Romares falls within the
2nd classification and thus a regular employee.As for his illegal dismissal the 2
requisites laid down in National Service Corp v. NLRC which are:Notice which
apprises the employee of particular acts or omissionsSubsequent notice which
informs the employee of the employers decision to dismiss him.Both of which were
not complied with by PILMICO. NLRC ruled that the termination was due to the
expiration of the contracts and reversed the ruling f the LA.They said that the
applicable rule is Art 280, LC which governs employment contracts for fixed or
temporary periods.Thus this petition. The court found the petition meritorious
because the petitioners work with the company as a mason is usually necessary and
desirable in the business and trade of PILMICO and during each rehiring, he was
assigned to the same position. The contracts were not of Romares temporary
employment but a clear circumvention of the employees right to security of tenure.
The court cited Brent School v. Zamora which laid down criteria under which the
term employment cannot be said to be in circumvention of the law of security of
tenure (279,LC)Fixed Period of employment was knowingly and voluntarily agreed upon
by the parties without any force, duress or improper pressure. (with consent)ER and
EE dealt with each other in equal terms with no moral dominance exercised by the
former on the latter.The court held that none of the requisites were complied with
by PILMICO and thus the petition is granted.Employer Determination/ DesignationPhil
Federation v. NLRC and Victoria AbrilVictoria Abril was employed by Philippine
Federation of Credit Cooperatives (PFCCI) in different positions within the company
such as secretary in 1985 and cashier and again as secretary in 1988, shortly after
resuming her position, she gave birth and upon her return in Nov 1989, she found

that she was already replaced. However, she accepted the offer of the position of
Regional Field Officer as evidenced by the contract prepared by PFCCI which
stipulated tat respondents employment status shall be probationary for 6 months.
She was dismissed in 1991.She then filed a case for illegal dismissal which was
dismissed by the LA for lack of merit. NLRC reversed the decision thus this
petition. The court found no merit in the companys petition.International Catholic
Migration v. NLRC defined a probationary employee as one who is on trail by an
employer who determines whether he is qualified for permanent employment. However,
probationary employees are also afforded by the Labor Code with security of tenure,
except for a just cause, he cannot be terminated. The petitioners argue that Abril
is a casual employee under Art 280, LC. Art 280 defines 3 kinds of employees:
Regular employees: those whose work is necessary and desirable to the usual
business of the employerProject employees: those whose employment has been fixed
for a specific project (only for the duration of the season)Casual employees:
neither regular nor private.Upon construing the contract, it can be seen that the
stipulations are ambiguous and thus because a contract of employment is a contract
of adhesion, it must be construed strictly against the party who prepared it.
Therefore the dismissal is illegal and the petition is dismissed.Management
PrerogativeIndustrial Timber v. AbabonIndustrial Plywood Group Corporation (IPGC)
is the owner of a plywood plant leased to Industrial Timber Corporation (ITC) on
August 30, 1985 for a period of five years. They hired 387 workers. ITC notified
the Department of Labor and Employment (DOLE) and its workers that effective March
19, 1990 it will undergo a no plant operation due to lack of raw materials. IPGC
notified ITC of the expiration of the lease contract in August 1990 and its
intention not to renew the same. ITC notified the DOLE and its workers of the
plants shutdown due to the non-renewal of anti-pollution permit that expired in
April 1990. This was followed by a final notice of closure or cessation of business
operations on August 17, 1990 with an advice for all the workers to collect the
benefits due them under the law and CBA.IPGC took over the plywood plant after it
was issued a W ood Processing Plant Permit which included the anti-pollution permit,
by the DENR on the same day the ITC ceased operation of the plant.This prompted
Virgilio Ababon, et al. to file a complaint against ITC and IPGC for illegal
dismissal, LA ruled for ITC. Ababon, et al. appealed to the NLRC. NLRC ordered the
reinstatement of the employees to their former positions. ITC and IPGC filed a
Motion for Reconsideration; it was dismissed for being filed out of time. CA set
aside the decision of the NLRC. Both parties filed their respective motions for
reconsideration which were denied, hence, the present consolidated petitions. The
court allowed the petition for relief despite procedural defect of filing the
motion for reconsideration three days late.The court also held that the right to
close the operation of an establishment or undertaking is one of the authorized
causes in terminating employment of workers, the only limitation being that the
closure must not be for the purpose of circumventing the provisions on termination
of employment embodied in the Labor Code. Article 283 of the Labor Code provides
that a partial or total closure or cessation of operations of establishment or
undertaking may either be due to serious business losses or financial reverses or
otherwise. Three requirements are necessary for a valid cessation of business
operations: (a) service of a written notice to the employees and to the DOLE at
least one month before the intended date thereof; (b) the cessation of business
must be bona fide in character; and (c) payment to the employees of termination pay
amounting to one month pay or at least one-half month pay for every year of
service, whichever is higher.The court found that ITCs closure or cessation of
business was done in good faith and for valid reasons. Records reveal that the
decision to permanently close business operations was arrived at after a suspension
of operation for several months precipitated by lack of raw materials used for
milling operations, the expiration of the anti-pollution permit. But although the
closure was done in good faith and for valid reasons, we find that ITC did not
comply with the notice requirement. ITC notified its employees and the DOLE of the
no plant operation on March 16, 1990 due to lack of raw materials. This was
followed by a shut down notice dated June 26, 1990 due to the expiration of the

anti-pollution permit. However, this shutdown was only temporary as ITC assured
its employees that they could return to work once the renewal is acted upon by the
DENR.The court said that where dismissal is based on an authorized cause under
Article 283 of the Labor Code but the employer failed to comply with the notice
requirement, the sanction should be stiff because the dismissal process was
initiated by the employers exercise of his management prerogative. P50,000.00 to
each employee was awarded as nominal damages. CA reversed. NLRC affirmed. Regular
EmployeesArt. 280. Regular and casual employment. The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreement of
the parties, an employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer, except where the employment has been fixed
for a specific project or undertaking the completion or termination of which has
been determined at the time of the engagement of the employee or where the work or
service to be performed is seasonal in nature and the employment is for the
duration of the season.An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That any employee who has rendered at
least one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is employed
and his employment shall continue while such activity exists. Art. 281.
Probationary employment. Probationary employment shall not exceed six (6) months
from the date the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The services of an employee
who has been engaged on a probationary basis may be terminated for a just cause or
when he fails to qualify as a regular employee in accordance with reasonable
standards made known by the employer to the employee at the time of his engagement.
An employee who is allowed to work after a probationary period shall be considered
a regular employee.Art. 75. Learnership agreement. Any employer desiring to employ
learners shall enter into a learnership agreement with them, which agreement shall
include:a. The names and addresses of the learners; b. The duration of the
learnership period, which shall not exceed three (3) months; c. The wages or salary
rates of the learners which shall begin at not less than seventy-five percent (75%)
of the applicable minimum wage; andd. A commitment to employ the learners if they
so desire, as regular employees upon completion of the learnership. All learners
who have been allowed or suffered to work during the first two (2) months shall be
deemed regular employees if training is terminated by the employer before the end
of the stipulated period through no fault of the learners.Omnibus Rules Book VI
Rule I Sec 5 A&B and 6Section 5. (a) Regular employment. - The provisions of
written agreements
to the contrary notwithstanding and regardless of the oral agreements of the
parties, employment shall be deemed regular for purposes of Book VI of the #
HYPERLINK "http://www.chanrobles.com/legal4labor.htm" \l "LABOR%20CODE%20OF%20THE
%20PHILIPPINES%20%5BFULL%20TEXT%5D" #Labor Code# where employee has been engaged to
perform activities which are usually necessary or desirable in the usual business
or trade of the employer, except where the employment has been fixed for a specific
project or undertaking, the completion or termination of which has been determined
at the time of the engagement of the employee or where the job, work or service to
be performed is seasonal in nature and the employment is for the duration of the
season. (b) Casual employment. - There is casual employment where an employee is
engaged to perform a job, work or service which is merely incidental to the
business of the employer, and such job, work or service is for a definite period
made known to the employee at the time of engagement: Provided, that any employee
who has rendered at least one year of service, whether such service is continuous
or not, shall be considered a regular employee with respect to the activity in
which he is employed and his employment shall continue while such activity exists.
Notwithstanding the foregoing distinctions, every employee shall be entitled to the
rights and privileges, and shall be subject to the duties and obligations, as may
be granted by law to regular employees during the period of their actual
employment."Section 6. Probationary employment. - There is probationary employment

where the employee, upon his engagement, is made to undergo a trial period during
which the employer determines his fitness to qualify for regular employment based
on reasonable standards made known to him at the time of engagement. "Probationary
employment shall be governed by the following rules: (a) W here the work for which
the employee has been engaged is learnable or apprenticeable in accordance with the
standards prescribed by the Department of Labor and Employment, the period of
probationary employment shall be limited to the authorized learnership or
apprenticeship period, which is applicable. (b) W here the work is neither learnable
nor apprenticeable, the period of probationary employment shall not exceed six
months reckoned from the date the employee actually started working. (c) The
services of an employee who has been engaged on probationary basis may be
terminated only for a just or authorized cause, when he fails to qualify as a
regular employee in accordance with reasonable standards prescribed by the
employer. (d) In all cases of probationary employment, the employer shall make
known to the employee the standards under which he will qualify as a regular
employee at the time of his engagement. W here no standards are made known to the
employee at that time, he shall be deemed a regular employee.Nature of W orkPoseidon
Fishing v. NLRCJimy S. Estoquia was hired by Poseidon Fishing as a Chief Mate and
was promoted to Boat Captain 5 years later (1993). He was demoted to radio operator
in 1999 for unknown reasons. On July 2000, he failed to record a 7:25am call in the
log book but was able to record it after the 7:30 call. This prompted Poseidon to
demand from him an explanation and he was instructed the same day to collect his
separation pay from the company. Estoquia filed for illegal dismissal with the LA
who ruled in his favor. The LA ruled that even if he was hired as a casual
employee, he earned the status of regular employee after 12 years of service.
Petitioners filed their memorandum of appeal with the NLRC for the reversal of the
aforesaid decision. NLRC affirmed the LA. Thus this petition. The petitioner claims
that he was paid on a por viaje scheme and that Estoquia was hired on a fixed term
contract. They also say that deep sea fishing is seasonal in nature and thus he was
only a project employee (assigned to carry out a specific project for the projects
duration and scope only). The court held that in Brent v. Zamora, the acid test in
considering fixed term contracts as valid if from the circumstances it is apparent
that periods have been imposed to preclude acquisition of tenurial security by the
employee, they should be disregarded for being contrary to public policy. In
Pakistan International Airlines Corporation v. Ople it ruled that the critical
consideration is the presence or absence of a substantial indication that the
period specified in an employment agreement was designed to circumvent the security
of tenure of regular employees. In the case at bar, the Kasunduan was not only
vague, it also failed to provide an actual of specific date or period for the
contract.It was shown by the respondent through his SSS employee contribution and
payrolls that he was repeatedly hired as an employee of the company for 12 years.
Poseidon, who was supposed to carry the records was not able to refute the payrolls
and SSS shown by Estioquia. Also, the court held in Philex Mining v. NLRC that
fishing is not seasonal but continuous in nature. In the same case, project
employees were defined as 1) those hired for a specific project or undertaking 2.
the completion of which has been determined at the time of employment or engagement
of the employee.The test is W ON the project employees were assigned to carry out a
specific project for a duration which was already specified to the employees at the
time they were engaged. These were not complied with by the petitioner; Estoquia is
a regular employee. Petition denied.Eddie Pacquing v. Coca ColaEddie Pacquing was
one of the sales route helpers or cargadores-pahinantes of Coca-Cola Bottlers
Philippines, Inc. Petitioners were part of a complement of three personnel
comprised of a driver, a salesman and a regular route helper, for every delivery
truck. Petitioners filed a Complaint against respondent for unfair labor practice
and illegal dismissal with claims for regularization, recovery of benefits.
Petitioners alleged that they should be declared regular employees of respondent
since the nature of their work as cargadores-pahinantes was necessary or desirable
to respondent's usual business.Respondent denied liability to petitioners and
countered that petitioners were temporary workers who were engaged for a five-month

period to act as substitutes for an absent regular employee.LA dismissed the


complaint NLRC affirmed the LA. The petitioners filed a Petition for Certiorari
with the CA who dismissed the petition. It held that the failure of all the
petitioners to affix their signatures in the verification and certification against
non-forum shopping rendered the petition dismissable. Thus this petition. The court
held it is sufficient, for one of the plaintiffs, acting as representative, to sign
the certificate provided that the plaintiffs share a common interest in the subject
matter of the case or filed the case as a collective raising only one common cause
of action or defense. In the instant case where petitioners have filed their case
as a collective group, sharing a common interest and having a common single cause
of action against respondent. The issue left to be resolved is W ON the petitioners
are regular employees of the respondent. The basic law on the case is Article 280
of the Labor Code. An employment shall be deemed to be casual if it is not covered
by the preceding paragraph. The applicable test is the reasonable connection
between the particular activity performed by the employee in relation to the usual
business or trade of the employer. Even if he is a project or season employee, if
he has been performing the job for at least one year the law deems the repeated and
continuing need for its performance as being sufficient to indicate the necessity
or desirability of that activity to the business or trade of the employer.The
repeated rehiring of respondent workers and the continuing need for their services
clearly attest to the necessity or desirability of their services in the regular
conduct of the business or trade of petitioner company. Being regular employees of
respondent, petitioners are entitled to security of tenure. Petition GRANTED.Dante
D. Dela Cruz v. Maersk Filipinas CrewingRespondent Elite Shipping A.S. hired
petitioner Dante D. de la Cruz as third engineer. The contract of employment was
for a period of nine months. Petitioner was deployed UAE> His chief engineer
expressed dissatisfaction over petitioner's performance and wrote this is a log
book. He was subsequently informed of hid dismissal. Petitioner thereafter filed a
complaint for illegal dismissal with claims for the monetary equivalent of the
unexpired portion of his contract. LA ruled for petitioner. NLRC affirmed LA. CA
reversed NLRC because it deemed the logbook entries to be sufficient compliance
with the first notice requirement of the law. Petitioner filed a motion for
reconsideration of the CA decision. It was denied. Hence, this petition.The
question is whether or not petitioner was illegally dismissed by respondents. The
court held that an employer has the burden of proving that an employee's dismissal
was for a just cause. it should also comply with the rudimentary requirements of
due process, The employer is bound to furnish him two notices: (1) the written
charge and (2) the written notice of dismissal (in case that is the penalty
imposed). Contrary to the decision of the CA the logbook entries did not
substantially comply with the first notice because it was only a vague and general
accusation and the nature of the acts or omissions relied upon as basis for the
termination of petitioner's employment were not given.It was petitioner's position
that he was already a regular employee when his services were terminated;
respondents, on the other hand,
insisted that he was then still on probationary status. In Brent School, Inc. v.
Zamora the court already held that seafarers are not covered by the term regular
employment they are considered contractual employees whose rights and obligations
are governed primarily by the POEA Standard Employment Contract for Filipino Seamen
in no case shall a contract of employment concerning seamen exceed 12 months.It is
an accepted maritime industry practice that the employment of seafarers is for a
fixed period only. In using the terms "probationary" and "permanent" vis--vis
seafarers, what was really meant was "eligible for re-hire and not employees.
Petition is hereby GRANTED.Extended PeriodTomas Lao Construction v. NLRCRespondents
filed individual complaints against petitioner for illegal dismissal. Respondents
claim that they are working under the Lao Group of Companies: Tomas Lao Corp,
Thomas and James Developers, and LVM Construction Company, which enter into joint
venture agreements with each other and lease tools and equipment to one another. In
1989, Lao (Managing Director of LVM and president of T&J) issued a memorandum
asking the employees to sign employment contract forms allegedly for audit

purposes. However, the contracts described the construction workers as project


employees. All but one refused to sign the contract. They were asked to explain why
they refused to sign and were later on dismissed. They filed a case with the LA who
ruled that the workers were project employees and agreed with the Lao company that
they were merely trying to formalize their position as project employees. The NLRC
reversed the LA holding that the workers were already regularized and the NLRC
pierced the corporate veil of the companies holding they solidarily liable for the
payment of wages. Thus this petition saying that the petitioners were merely trying
to formalize the workers status as project employees. The court found that the
principal test is whether the project employees are assigned to carry out specific
project or undertaking, the duration of which are specified at the time the
employees were engaged for the project. The court also reiterated their ruling that
project employees whose service has been employed long after the supposed project
has been finished are considered regular employees. In the case at bar, the fact
that the workers were continuously being rehired due to the demands of the
petitioners business satisfied the court as proof of their regular employment.
Moreover, the Lao corporations should have immediately submitted the report of
termination as required by DOLE for termination of project employees. The court
upheld NLRC. Petition Dismissed. Repeated renewal of contractBeta Electric Corp v.
NLRCLuzviminda Petilla was hired as a clerk typist and was given 5 extensions after
which, her services were terminated. LA, NLRC and the court ruled in her favor. The
court held that she was already a regular employee, her tenure having exceeded six
months. Her work is not temporary just because her employment hinged from contract
to contract. Contrary to the allegations of the petitioner, the nature of the work
is not seasonal or specific but rather, it was engaged as an activity which I
necessary and desirable in the usual business of the employer. Specific undertaking
means: a special type of venture or project whose duration is coterminous with the
completion of the project; this does not apply to the case at bar. Petition is
dismissed.Project Employees 1st paragraph 280Art. 280. Regular and casual
employment. The provisions of written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or service to be performed is seasonal
in nature and the employment is for the duration of the season.Policy Instructions
20 on 1977 entitled "Stabilizing Employer-Employee Relations in the Construction
Industry", provides in relevant part:"In the interest of stabilizing employeremployee relations in the construction industry and taking into consideration its
unique characteristics, the following policy instructions are hereby issued for the
guidance of all concerned:Generally, there are two types of employees in the
construction industry, namely: 1) Project employees, and 2) Non-Project employees.
Project employees are those employed in connection with a particular construction
project. Non-project employees are those employed by a construction company
without reference to any particular project.Project employees are not entitled to
termination pay if they are terminated as a result of the completion of the project
or any phase thereof in which they are employed, regardless of the number of
projects in which they have been employed by a particular construction company.
Moreover, the company is not required to obtain a clearance from the Secretary of
Labor in connection with such termination. W hat is required of the company is a
report to the nearest Public Employment Office for statistical purposes.If a
construction project or any phase thereof has a duration of more than one year and
a Project employee is allowed to be employed therein for at least one year, such
employee may not be terminated until the completion of the project or of any phase
thereof in which he is employed with a previous written clearance from the
Secretary of Labor. If such an employee is terminated without a clearance from the
Secretary of Labor, he shall be entitled to reinstatement with backwages.The
employees of a particular project are not terminated at the same time. Some phases

of the project are completed ahead of others. For this reason, the completion of a
phase of the Project is the completion of the project for an employee employed in
such phase. In other words, employees terminated upon the completion of their
phase of the project are not entitled to separation pay and exempt from the
clearance requirement.On the other hand, those employed in a particular phase of a
construction project are also not terminated at the same time. Normally, less and
less employees are required as the phase draws closer to completion. Project
employees terminated because their services are no longer needed in their
particular phase of the project are not entitled to separation pay and are exempt
from the clearance requirement, provided they are not replaced. If they are
replaced, they shall be entitled to reinstatement with backwages.Members of a work
pool from which a construction company draws its project employees, if considered
employees of the construction company while in the work pool, are non-project
employees or employees for an indefinite period. If they are employed in a
particular project, the completion of the project or of any phase thereof will not
mean severance of employer-employee relationship.However, if the workers in the
work pool are free to leave anytime and offer their services to other employers
then they are project employees employed by a construction company in a particular
project or in a phase thereof.Generally, there are three (3) types of non-project
employees: first, probationary employees; second, regular employees; and third,
casual employees.Probationary employees are those who, upon the completion of the
probationary period, are entitled to regularization. Regular employees are those
who have completed the probationary period or those appointed to fill up regular
positions vacated as a result of death, retirement, resignation, or termination of
the regular holder thereof. On the other hand, casual employees are those employed
for a short term duration to perform work not related to the main line of the
business of the employer.xxx
xxx xxx.Policy Instructions No. 20 was subsequently
superseded by Department Order No. 19 (series of 1993) dated April 1, 1993 of the
Department of Labor and Employment.D.O. No. 19 of 1993According to the Department
of Labor and Employment Order No. 19, [April 1, 1993] Series of 1993, the following
are considered indicators of project employment:##(a) The duration of the
specific/identified undertaking for which the worker is engaged is reasonably
determinable.##(b) Such duration, as well as the specific work/service to be
performed, is defined in an employment agreement and is made clear to the employee
at the time of hiring.##(c) The work/service performed by the employee is in
connection with the particular project/undertaking for which he is engaged.##(d)
The employee, while not employed and awaiting engagement, is free to offer his
services to any other employer.##(e) The termination of his employment in the
particular project/undertaking is reported to the Department of Labor and
Employment (DOLE) Regional Office having jurisdiction over the workplace within 30
days following the date of his separation from work, using the prescribed form on
employees terminations/dismissals/suspensions.##(f) An undertaking in the
employment contract by the employer to pay completion bonus to the project employee
as practiced by most construction companies.##In ABC, Inc. v. NLRC, the Supreme
Court has ruled that the length of service of a project employee is not the
controlling test of employment tenure but whether or not the employment has been
fixed for a specific project or undertaking the completion or termination of which
has been determined at the time of the engagement
of the employee.##It is also worthy to note Clause 3.3(a) of Department Order
No. 19, which states: Project employees whose aggregate period of continuous
employment in a construction company is at least one year shall be considered
regular employees, in the absence of a day certain agreed upon by the parties for
the termination of their relationship. Project employees who have become regular
shall be entitled to separation pay.##A day as used herein, is understood to be
that which must necessarily come, although is may not be known exactly when. This
means that where the final completion of a project or phase thereof is in fact
determinable and the expected completion is made known to the employee, such
project employee may not be considered regular, notwithstanding the one-year

duration of employment in the project or phase thereof or the one-year duration of


two or more employments in the same project or phase of the object.#Considering the
above facts and circumstances, what are the rights of a project employee under
labor laws if he has been illegally dismissed? W ell settled is the rule that the
burden of proving that an employee was lawfully dismissed lies with the employer.
Thus employers who hire project employees are mandated to state the actual basis
for the project employees dismissal.##Section 3.2 of Department Order No. 19,
Series of 1993 states that:Project employees are not entitled to separation pay if
their services are terminated as a result of the completion of the project or any
phase thereof in which they are employed. Likewise, project employees whose
services are terminated because they have no more to do or their services are no
longer needed in the particular phase of the project are not by law entitled to
separation pay.The rights of an illegally dismissed project employee is based only
in the current project contract where he was illegally terminated. If the
employer fails to prove that the project was already completed, there is a
presumption that the services of the project employee has been terminated with no
valid cause prior to the expiration of the period of his project employment. In
such a case, the illegally dismissed project employee is entitled to reinstatement
with full back wages, inclusive of allowances and other benefits. If the project
has already been completed during the pendency of the labor suit, the project
employee can no longer be reinstated. Instead, he shall be entitled to the payment
of his salary and other benefits corresponding to the unexpired portion of his
employment, specifically from the time of the termination of his employment, until
the date of completion of the project.DefinitionImbuido v. NLRCVivian Imbuido was
employed as a data encoder by International Information Services Inc. She was
employed for a span of 3 years (August 1988 to October 1991) wherein 13 separate
contracts of employment were entered into by the petitioner, each lasting 3 months.
She was terminated allegedly due to low volume of work. Imbuido filed a case for
illegal dismissal claiming that she was fire not because of the volume of her work
but because she signed a petition for certification election among the rank and
file employees of the company. The company insisted that she was terminated due to
her work as well as because of the expiration of the complainants contact, she
being a project employee. The LA ruled in favor of petitioner and ordered her
reinstatement finding her to be a regular employee while the NLRC reversed the
decision and ruled that she is a project employee employed for a specific project
of the company.Thus she filed a petition for certiorari in the SC. The SC ruled
that petitioner is a project employee using the principal test which is determining
W ON the employee was assigned to carry out a specific project, the duration and
scope of which were specified at the time the employee was engaged for that
project. As observed by the court through the employment contracts, Imbuido worked
for a specific undertaking, the completion or termination of which had been
determined at the time of her engagement. Although she is a project employee, in
Maraguinot v. NLRC it was held that a project employee or a member of the work pool
may acquire the status of a regular employee when1.. there is a continuous rehiring
of project employees even after a cessation of the project2.. the tasks performed
by the alleged project employee are vital, necessary and indispensable to the usual
business or trade of the employer.To rule otherwise would be to allow circumvention
of labor laws in industries not falling within the ambit of Policy instruction 20
or DO 19. Being a regular employee, Imbuido is entitiled to security of tenure (Art
279). Petition is granted.project employmentUy v. NLRCRizalino Uy, a private
contractor, were charged by his employees (masons, laborers, carpenters) with
illegal dismissal. The employees claimed that they also rendered services in their
other business of UY. The LA dismissed the complaints for lack of merit and NLRC
reversed the LA after finding private respondents to be regular employees and not
project employees. Petitioner filed a motion for reconsideration and a
manifestation to admit and consider evidence. Thus this petition. Uy insists that
the employees are just project employees and as such they were validly terminated.
The court held that according to 280 of the LC project employees are those workers
hired for 1. a specific project or undertaking 2. the completion or termination of

which has been determined at the time of engagement of the employee.In the present
case, Uy did not identify the specific project or the phase of the project for
which the employees were hired. Termination reports, required to be submitted to
DOLE upon termination of project employees, were also not presented. Their jobs
were continuous and ongoing. According to Policy Instructions No. 20: members of a
work pool from which a construction company draws its project employees are nonproject employees if considered employees of the construction company while in the
work pool, for an indefinite period. If they are employed in a particular project,
the completion of the project or any phase therof will non means severance of EE-ER
relationship. The court held that. the private respondents are non-project
employeesVilla v. NLRC + National Steel CorporationNSC is one of the biggest modern
steel mills in southeast asia. They embarked on a 5 year program using 100% scrap
venturing into a ship breaking operation wherein a ship would be cut up into large
chunks and brought to land to be further cut into smaller sizes. This was stopped
due to high costs as well as lack of ships. Felix Villa and the other petitioners
were the workers for this particular project and were terminated from their service
once the project was stopped. The NSC association filed a notice of strike with the
company for illegal termination. The La ruled for the company stating that the
short periods wherein the company hired the petitioners clearly show the intent of
the company to hire them on a per project basis only. NLRC affirmed the LA upon the
factual findings it reviewed saying that the test in determining regularity or
employment is the nature of the functions performed which should be necessary and
desirable in the usual business or trade of the employer. However, the exception is
that if it is fixed for a specific project or undertaking, the completion of which
has been predetermined at the time of engagement or where the services to be
performed is seasonal in nature, the same is considered as casual or temporary in
nature. Motions for reconsideration were denied. But upon appeal, the NLRC accepted
the motion and ruled that project employees are not regular employees within the
purview of Art 280 of the LC. Thus this petition. The court held that Art 280
contemplates on 3 kinds of employees:i.. regular employees (engaged to perform
activities which are necessary and desirable in the usual business and trade of the
employer)ii.. project employees (whose employment has been fixed for a specific
project the termination of which has been predetermined at the time of engagement)
iii... casual employees (those who are neither regular nor project employees)The
court held that contracts of project employment are valid under our law. A project
employment terminates as soon as the project is completed. The services of project
employees are coterminous with the project and may be terminated upon the end or
completion of the project for which they were hired. There are two kinds of
projects a business or industry may undertake1.. a project referring to a
particular job or undertaking that is within the usual business of company but is
distinct and separate from other undertakings of the company2.. a project may refer
to a particular job or undertaking that is not within the regular business of the
corporationNSCs project falls under the second type.Regardless of how many
projects the employees worked on, they remain project employees. Art. 280 stating
that employees working for more than 1 year are deemed to be regular employees
pertain to casual and not project employees. Petition dismissed.Sapio v. UndalocA
complaint filed by petitioner against Undaloc Construction and/or Engineer Cirilo
Undaloc for illegal dismissal by Virgilio Sapio saying that he had been employed as
watchman for 3 years when he was terminated on the ground that the project he was
assigned to was already finisished.Petitioner asserted he was a regular employee
having been engaged to perform works which are "usually necessary or desirable" in
respondents' business. Cirilo Undaloc maintained that petitioner was hired as a
project employee and was assigned as watchman from one project
to another until the termination of the project on 30 May 1998. LA found
complainant to be a project employee and his termination was for an authorized
cause. Respondents appealed the award of salary differential to NLRC which
sustained the findings of the Labor Arbiter. Court of Appeals which deleted the
award of salary differential and attorney's fees. Thus, this petition for review on
the ground that respondents failed to attach certified true copies of the NLRC's

decision and resolution denying the motion for reconsideration. It is only now
before this Court that petitioner proffered the same. That petitioner was a project
employee became a non-issue beginning with the decision of the Labor Arbiter. He
should have contested this issue when Undaloc filed a motion for reconsideration of
award with the NLRC. Petitioner avers that he was paid a daily salary way below the
minimum wage provided for by lawTo counter petitioner's assertions, respondents
submitted typewritten and signed payroll sheets. Labor Arbiter and NLRC concluded
that the entries were susceptible to change or erasure and that that susceptibility
in turn rendered the other payroll sheets though typewritten less credible. Court
of Appeals did not subscribe to the common findings of the Labor Arbiter and the
NLRC. The appellate court pointed out that allegations of fraud in the preparation
of payroll sheets must be substantiated by evidence. Moreover, absent any evidence
to the contrary, good faith must be presumed in this case. Petitioner's bare
assertions of fraud do not suffice to overcome the disputable presumption of
regularity. Petition is partially granted.application of rule in non construction
industriesMaraguinot v. NLRC + Viva FilmsAlejandro Maraguinot and Paulino Enero
claim that they have been employed by Viva films as part of their filming crew
tasked to load, unload and arrange the movie equipment. They claim that they asked
for an increase in their wage in accordance with the minimum wage law and that
thereafter, they were asked to sign a blank employment contract and when they
refused to sign, they were terminated. Viva films on the other hand, claims that
they contracts producers or associate producers who produce the movies and hire
project employees such as petitioner. Petitioners filed for illegal dismissal and
the LA declared them to be illegally dismissed, NLRC reversed the LA. Thus this
petition.The OSG rejects their contention that since they were hired for a series
of projects, they are deemed as regular employees. The court disagrees with the
OSG. According to Sec 8 Rule VIII Book VIII of the Omnibus rules implementing the
LS, job contracting is permitted id the contractor has substantial capital and
creates the job according to his own mean or method. The court found in the case at
hand that the movie-making equipment are supplied BY Viva and that the associate
producer merely leases the equipment from VIVA (Vivas generators broke down and
they had to rent generators, equipment and crew fro another company) This was, as
found by the court, labor only contracting. The relationship between Viva and its
producers or associate producers are that of agency and the control as to the
quality of the film lies with Viva. It may not be argued that petitioners are
subject to the control of the Movie Director and not Vivas control. The court then
said that a project employee or a member of the work pool ma acquire the status of
a regular employee when the following concur:1.. there is continuous rehiring of
project employees even after cessation of the project; and2.. the tasks performed
by the alleged project employee are vital, necessary and indispensable to the
usual business or trade of the employer.The court further held that once these
requisites are complied with, he is a regular employee because to rule otherwise
would be to prevent the acquisition of tenurial security by project or work pool
employees who have already gained the status of employee due to the employers
conduct. Petition is granted.Casual EmployeesArt. 280. 2nd paragraph. Regular and
casual employment. An employment shall be deemed to be casual if it is not covered
by the preceding paragraph: Provided, That any employee who has rendered at least
one year of service, whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is employed
and his employment shall continue while such activity exists. Omnibus Rules Book VI
Rule 1 Sec 5bSection 5. (b) Casual employment. - There is casual employment where
an employee is engaged to perform a job, work or service which is merely incidental
to the business of the employer, and such job, work or service is for a definite
period made known to the employee at the time of engagement: Provided, that any
employee who has rendered at least one year of service, whether such service is
continuous or not, shall be considered a regular employee with respect to the
activity in which he is employed and his employment shall continue while such
activity exists. Notwithstanding the foregoing distinctions, every employee shall
be entitled to the rights and privileges, and shall be subject to the duties and

obligations, as may be granted by law to regular employees during the period of


their actual employment."Nature of W orkA.M. Oreta and Co. v, NLRCSixto Grulla was
engaged by Engineering Construction and Industrial Development Company (ENDECO)
through A.M. Oreta and Co. as a carpenter in its project n Saudi for a period of 12
months. 10 days into the job, Grulla met an accident which fractured his lumbar
vertebrae while working at the jobsite. He was discharged from the hospital 12 days
after and he underwent therapy for 2 weeks before he was told that he was
physically fit to go back to work. He started working again but was later given a
notice of termination due to his alleged unsatisfactory performance.Grulla filed a
complaint for illegal dismissal with the POEA who ruled for Grulla. NLRC dismissed
the appeal for lack of merit. Thus this petition.The issue is W ON the employment of
Grulla was illegally terminated. A.M. Oreta contends that since he is still a
probationary employee, Grulla is validly dismissed. The court rules otherwise
satying that Grulla was employed in the company for 12 month before he was
dismissed and it is clear from the contract that the company hired him as a regular
employee and not just a probationary employee; there was no stipulation in the
contract that the latter shall undergo a probationary period and there is no
evidence that he has been apprised of is probationary status. Even given that he
was a project employee, as gleaned from the provision of Art 281 in the LC
probationary employees may be terminated only for a just cause. In the case at bar,
the ground of unsatisfactory performance is not one of the just causes of dismissal
in Art 282, LC. Also the twin requirements of notice and hearing were not complied
with. NLRC affirmed. One Year ServiceTabas v. California Manufacturing Co. Inc
Petitioners were prior employees of Livi Manpower Services who assigned them to
work as promotional merchandisers wherein an agreement was made stipulating that
California Manufacturing company had no control over the employees and that the
assignment shall be on a seasonal and contractual basis. Petitioners signed a 6month contract. Petitioners now allege that they have become regular California
employees and demand similar benefits as the employees of California due to their
being terminated by the company. LA found no EE-ER relationship to exist. NLRC
affirmed LA. Thus this petition. The court reverses saying that the EE-ER
relationship cannot be subject to agreement but rather must be proved through
evidence as well as the four fold test. In the case at bar, the court found that
Livi contracts out labor in favor of its clients thus falling within the ambit of
Labor only contracting. W hat is the Liability of Livi and California? The court
holds that they have become regular employees of California and acquired security
of tenure after performing 6 months of servces which was renewed for another 6
months. California did not show evidence that it had suffered serious business
reverses as to warrant valid retrenchment of petitioners. Petition granted.
Fortunato Mercado Sr. v. NLRC+Sto. Nino Realty Incorporated +Aurora CruzPetitioners
are agricultural workers utilized by private respondents in all phases of the work
on the 7 hectares of rice land and 10 hectares of sugar land owned by the
company, they demand for benefits in accordance with the fact that they are regular
employees. Aurora Cruz denied the allegations saying that she engaged the services
of petitioners through Sps. Fortunato Mercado. LA ruled in favor of Sto. Nino
saying that the workers are not permanent workers because the nature of the terms
and conditions of their hiring reveal that they were required to perform phases of
agricultural work for a definite period of time only. However, the LA awarded them
financial assistance. Both parties appealed to the NLRC who affirmed the decision
of the LA deleting the financial assistance. NLRC denied the MFR. Thus this
petition.The court held that based on the sworn statements of the Mercados, the
petitioners were only hired as casuals. A project employee is defined as to be one
whose employment has been fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the
engagement of the employee. Petitioners were found to be project employees or
seasonal employees and that their employment legally ends upon the completion of
the project. Petition dismissed.Cansino v. Prudential Shipping and Management
CorporationDeogracias Cansino worked as a seaman in
the Medbulk Maritime Management Corporation for a term of 12 mos. Capt. Nikolaos

Kandylis altered the terms and conditions of the contract asnd changed his position
to pumpman. Several derogatory reports were received by the Captain against Cansino
for drunkenness, insubordination and abandonment of post. 7 members of the crew
including Cansino submitted a request for early repatriation because f family
problems which were granted. Upon his return, he filed a complaint for illegal
dismissal. LA dismissed the complaint, NLRC reversed and ruled for Cansino. CA set
aside the decision of NLRC. The court relied on the Masters Report signed by the
Captain as to the illegal consumption of alcoholic drinks of the crew. The court
held that drunkenness is equivalent to serious misconduct and thus a valid cause of
termination in Art 282 of the LC. Petition denied. Fixed Term EmployeesBrent School
v. ZamoraDoroteo Alegre was engaged as athletic director by Brent School by virtue
of a contract fixed at a specific term of 5 years. Three months before its
expiration, Alegre was given a copy of the application for clearance filed by Brent
with the Department of Labor advising the termination of his services stating the
ground of completion of contract as its reason. Alegre filed a protest to his
termination with the Labor Director saying his services are usual and necessary to
the business of Brent. The Labor Director denied the application and required his
reinstatement. Brent school filed a MFR and the Regional Director denied it,
forwarding the case to the Secretary of Labor who affirmed the decision. The school
appealed to the office of the president but the appeal was dismissed. Thus this
petition.Before the advent of the labor code, term employment was already
recognized as valid due to the Termination pay law (RA1052), Code of Commerce
(Article 302 discusses the mesada who is given the salary of the month; mes=month
in Spanish) and the civil code which repealed the code of commerce specifically
provisions of oblicon which discusses contracts with a period. The court held that
there is nothing contradictory with fixing the term of employment of an employer
who renders usual and necessary services to the company. Although the Labor Code is
more strict than the Civil code as to fixed term employments, the law, in this case
Art 280 LC, must be given a reasonable interpretation as to reflect the intent of
the law which is to prevent the circumvention of the employee right to security of
tenure. It should have no application to instances when the employee knowingly and
voluntarily entered into the contract of employment for a fixed term. The court
cited Escudero v. Office of the president and applied it to Alegres case saying
that in a fixed term contract, no notice is needed as he already knows the dae of
its expiration at the time of engagement. Petition granted. Dumpit Murillo v. CA
Thelma Dumpit-Morillo was employed by the Associated Broadcasting company (ABC) as
a newscaster and a co-anchor of Balitang Balita and Live on Five for which her
contract of 3 months was constantly renewed. After four years of constant renewals
of her talent contract, she sent a letter to the VP of ABC saying that she was
interested in renewing her contract subject to a salary increase. She stopped
reporting for work after and a month later ABC still has not replied thus prompting
Thelma to send a demand letter to ABC asking for her reinstatement as well as
backwages. She then filed a case of illegal constructive dismissal with the LA who
dismissed the complaint. Upon appeal to the NLRC, it found that an ER-EE
relationship existed and that she was a regular employee. CA, in a petition for
certiorari by ABS, reversed the decision saying that she entered into the contract
knowingly and that she was a fixed term employee and not a regular employee
according to Art 280. Thus this petition.The court held that the talent contracts
are valid but not as to categorizing her as a fixed term employee. Applying the
four fold test (selection and engagement, wages, dismissal, control) the court
found that it applies to the case. The law also recognizes those who 1. perform
activities necessary and desirable in the usual business and trade of the employer
as well as 2. those who have worked for more than a year as regular employees. For
the contract to be valid as a fixed term contract, no force, duress or improper
pressure should be brought upon the employee thus in effect vitiating her consent,
in the case at hand, Thelma had no choice but to sign her name every 3 months
without objection as to maintain the job she loved and the workplace she has grown
accustomed to. As a regular employee, she is entitled to security of tenure and can
be dismissed only for just cause. CA reversed.#AMA Computer College Paranaque v.

AustriaRespondent Rolando A. Austria# HYPERLINK "file:///F:\\ama.htm" \l "_ftn4" \o


"" ## (respondent) was hired by AMA Computer College, Paraaque on probationary
employment as a college dean on his appointment as dean was confirmed by AMAs
Officer-in-Charge. Sometime in August 2000, respondent was charged with violating
AMAs Employees Conduct and Discipline provided in its Orientation Handbook.
Respondent refuted the charges against him but was placed on preventive suspension
and eventually dismissed due to the loss of trust and confidence in hisr
credibility as a company officer holding a highly sensitive position. Respondent
filed a Complaint# HYPERLINK "file:///F:\\ama.htm" \l "_ftn11" \o "" ## for Illegal
Dismissal. LA held that respondent substantially refuted the charges of gross
inefficiency, incompetence, and leaking of test questions filed against him but
held that the nature of respondent's employment is one for a fixed term. The NLRC
and the CA both held that respondent is a regular employee because respondent had
fully served the three (3)-month probationary period required in the Handbook,
which the petitioners failed to deny or contravene. Hence, this Petition asking the
nature of respondent's employment? And W ON he lawfully dismissed? As an exception
to the general rule, the court held in Molina v. Pacific Plans, Inc. that when the
findings of the National Labor Relations Commission contradict those of the Labor
Arbiter, this Court, in the exercise of its equity jurisdiction, may look into the
records of the case. The court held that the letter of appointment states that he
was officially confirmed as Dean of AMA College, Paraaque, effective from April
17, 2000 to September 17, 2000 and that the nature of respondent's employment as
dean is one with a fixed term. Art. 280 of the Labor Code does not proscribe or
prohibit an employment contract with a fixed period.Citing Brent School, Inc. v.
Zamora# HYPERLINK "file:///F:\\ama.htm" \l "_ftn35" \o "" ##, the court said that
as to appointments to the positions of dean, assistant dean, college
secretary, which are by practice or tradition rotated among the faculty
members, and where fixed terms are a necessity without which no
reasonable rotation would be possible, these are normally an employment for a
fixed term.The resolution of the second question requires full cognizance of
respondents fixed term of employment and all the effects thereof. It is axiomatic
that a contract of employment for a definite period terminates on its own force at
the end of such period.# HYPERLINK "file:///F:\\ama.htm" \l "_ftn43" \o "" ##
Petition is GRANTED. LA decision REINSTATED.Seasonal EmployeesPhil Tobacco v. NLRC
Philippine Tobbaco has 2 groups of employees, the Lubat group and the Luris groups
The Lubat group is composed of seasonal workers who were not rehired for the next
years season (1994) at the start of the season, they were informed that their
employment has been terminated as of the 1993 season. The Luris group is made up of
seasonal employees who worked for the 1994 season in the Balintawak plant and was
informed that due to serious business losses, petitioner planned to move its
operations to Ilocos Sur. They were given separation pay which was not based on the
number of years served but rather based only on the duration of the 1994 season.
Both groups filed a case for illegal dismissal against the petitioner to which the
LA ruled that the petitioner should pay separation pay and differential plus
attorneys fees ACCORDING TO THE NUMBER OF YEARS SERVED, ruling that the closure of
the business was due to serious financial losses and thus the termination of
employment is due to a legal cause. The NLRC affirmed the decision upon appeal thus
this petition. The court ruled that the petition is not meritorious.The court found
that the business losses pertain only to a unit or division and not the W HOLE
business of the petitioner which is the loss that is referred to in Art 283 LC.
This is so that a company will not be able to easily feign excuses to get rid of
unwanted employees. Serious business losses as contemplated by Art 283 was not
proved by the petitioners, infact, the financial statement given by the petitioner
reflects not only its tobacco business but also its other businesses. A perusal
made by the court shows that there is a net gain made by the petitioner for each
year of business. As to the Luris group, there was defective notice given by the
petitioner as they did not inform their employees 1 month before their termination
which is a requisite under Art 283 LC. Thus, the Luris group is entitled to 1 month
pay or at least month pay for every year of service, whichever is higher.As for

the Lubat group, the court ruled that they were illegally dismissed citing Manila
Hotel Company v. CIR which ruled that seasonal workers who are called to work from
time to time are temporarily laid off during the off-season are not separated
from service during this period but are merely considered on unpaid leave until
employed. Petitioners tried to invoke Mercado v. NLRC and Magcalas v. NLRC but the
court ruled that the facts in this case are different from those cases because
Mercado and Magcalas offered their services to other farm owners which makes them
project employees.The court computed a seasonal workers separation pay as No. of
days worked/ No. of total working days in one year x Daily rate of 15 days. For
this case, the court held that separation pay should be at of their average
monthly pay times the number of years worked. NLRC affirmed with modification.
Probationary EmployeesArt. 281. Probationary employment. Probationary employment
shall not exceed six (6) months from the date the employee started working, unless
it is covered by an apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged on a probationary basis may be
terminated for a just cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the employee at
the time of his engagement. An employee who is allowed to work after a probationary
period shall be considered a regular employee.Art. 61. Contents of apprenticeship
agreements. Apprenticeship agreements, including thewage rates of apprentices,
shall conform to the rules issued by the Secretary of Labor andEmployment. The
period of apprenticeship shall not exceed six months. Apprenticeship agreements
providing for wage rates below the legal minimum wage, which in no case shall start
below 75 percent of the applicable minimum wage, may be entered into only in
accordance withapprenticeship programs duly approved by the Secretary of Labor and
Employment. TheDepartment shall develop standard model programs of apprenticeship.
(As amended by Section 1,Executive Order No. 111, December 24, 1986)Art. 75.
Learnership agreement. Any employer desiring to employ learners shall enter into a
learnership agreement with them, which agreement shall include:a. The names and
addresses of the learners; b. The duration of the learnership period, which shall
not exceed three (3) months; c. The wages or salary rates of the learners which
shall begin at not less than seventy-five percent (75%) of the applicable minimum
wage; andd. A commitment to employ the learners if they so desire, as regular
employees upon completion of the learnership. All learners who have been allowed or
suffered to work during the first two (2) months shall be deemed regular employees
if training is terminated by the employer before the end of the stipulated period
through no fault of the learners.Omnibus Rules Book VI Rule I Sec 6 Section 6.
Probationary employment. - There is probationary employment where the employee,
upon his engagement, is made to undergo a trial period during which the employer
determines his fitness to qualify for regular employment based on reasonable
standards made known to him at the time of engagement. "Probationary employment
shall be governed by the following rules: (a) W here the work for which the employee
has been engaged is learnable or apprenticeable in accordance with the standards
prescribed by the Department of Labor and Employment, the period of probationary
employment shall be limited to the authorized learnership or apprenticeship period,
which is applicable. (b) W here the work is neither learnable nor apprenticeable,
the period of probationary employment shall not exceed six months reckoned from the
date the employee actually started working. (c) The services of an employee who has
been engaged on probationary basis may be terminated only for a just or authorized
cause, when he fails to qualify as a regular employee in accordance with reasonable
standards prescribed by the employer. (d) In all cases of probationary employment,
the employer shall make known to the employee the standards under which he will
qualify as a regular employee at the time of his engagement. W here no standards are
made known to the employee at that time, he shall be deemed a regular employee.
Definition/PurposeCebu Marine Beach Resort v. NLRCCBMR is owned by Victor Dualan
and recruited respondent employees. The resort caters primarily to Japanese
tourists and thus Dualan hired Tsuyoshi Sasaki to give respondents special training
in Japanese customs, traditions, discipline as well as hotel and resort services.
One day Sasaki suddenly scolded respondednts and hurld at them brooms, iron trays

etc. warning them not to come back. They filed a case for illegal dismissal pending
which the company sent letters to them demanding them to explain why they shuld not
be terminated from work due to abandonment and FAILURE TO QUALIFY W ITH THE
STANDARDS OF PROBATIONARY EMPLOYEES. LA dismissed complaint but held that
respondents should go back to work. On appeal, NLRC ruled that the employees have
been illegally dismissed. Petitioners filed a petitioner for certiorari which was
referred to the CA who then affirmed the decision of the NLRC. Thus this petition
for review. The court ruled that they were illegally dismissed and that the
utterances of Sasaki was tantamount to a dismissal despite his lack of authority to
terminated the employees. The dismissal was ratified due to petitioners subsequent
acts of sending the letter to employees demanding explanation of their failure to
qualify with the standards. The petitioner in this case, did not give time to
employees to rove that they possess the qualifications to meet reasonable standards
for permanent employment due to premature dismissal. The court ruled in Lopez v.
Javier that probationary employees who are unjustly dismissed from work during the
probationary period shall be entitled to reinstatement and payment of full
backwages. CA affirmed.Espina v. Hon. Court of AppealsRespondent M.Y. San Biscuits,
Inc. (M.Y. San) was previously engaged in the business of manufacturing biscuits
and other related products. In a conciliation proceeding M.Y. San W orkers Union
was informed of the closure or cessation of business operations because of the
intended sale of the business to Monde. A separation package and cash equivalents
of their vacation and sick leaves were given to the employees. The written notice
of the sale and purchase of the assets of respondent M.Y San to respondent Monde.
All the employees of respondent M.Y. San received their separation pay and the cash
equivalent of their vacation and sick leaves. Thereafter, they signed their
respective Quitclaims. Monde commenced its operations. All the former employees of
respondent M.Y. San who were terminated upon its closure and who applied and
qualified for probationary employment, including petitioners herein, started
working for respondent Monde on a contractual basis for a period of six
months.Subsequently, petitioners were terminated on various dates. Petitioners
filed a Complaint for illegal dismissal alleging that sale of respondent M.Y. San
to respondent Monde was merely a ploy to circumvent the provisions of the Labor
Code.M.Y. San insisted that its employer-employee relationship with petitioners had
ceased to exist, respondent Monde alleged that petitioners had no cause of action
saying that the probationary employees of Monde who passed the performance
appraisal and who qualified as regular employees thereof were accordingly appointed
as such. Out of the one hundred sixteen (116) probationary employees engaged by
respondent Monde, a total of seventy-four employees qualified for regular
employment.LA dismissed the case for lack of merit. NLRC affirmed the Decision of
the Labor Arbiter. CA denied petition. Thus this petiton. The court held that as
long as the companys exercise of the same is in good faith to advance its interest
and not for the purpose of circumventing the rights of employees under the law or a
valid agreement, such exercise will be upheld.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/march2007/164582.htm" \l
"_ftn30" \o "" ## Thus, since private respondent M.Y. Sans closure and cessation
of business was lawful, there was no illegal dismissal of petitioners to speak of.
In the case at bar, petitioners were notified of the standards they have to meet to
qualify as regular employees of respondent Monde when the latter apprised them, at
the start of their employment, Respondent Monde exercised its management
prerogative in good faith when it dismissed petitioners due to absence without
leave (AW OL), gross and habitual neglect of duties, failure to qualify as regular
employees in accordance with the terms and conditions of their probationary
employment with respondent Monde. During the probationary period, the employer is
given the opportunity to observe the skill, competence and attitude of the employee
to determine if he has the qualification to meet the reasonable standards for
permanent employment. The length of time is immaterial in determining the
correlative rights of both the employer and the employee in dealing with each other
during said period. Thus, as long as the termination was made before the
expiration of the six-month probationary period, the employer was well within his

rights to sever the employer-employee relationship. CA reversed.Duration: Rule/


ExceptionDela Cruz v. NLRC+Shemberg Marketing Corporation (SMC)Florencio Dela Cruz
was hired by SMC as senior sales manager with a probationary period of 6 months. He
was subsequently fired 4 months after due to his failure to meet the required
company standards and for loss of trust and confidence (alleged poor performance,
the dissatisfaction of his subordinates over his management style, his unauthorized
use of company cellular phone and the unauthorized plane tickets of his wife and
child.) He filed a case for illegal dismissal.
LA declared he was illegally dismissed. NLRC dismissed the appeal. CA dismissed
the case for lack of merit. Hence this petition. The court found the petition to be
without merit. The evidence shows that petitioner was informed of the standards to
be met before he could qualify as a regular employee. For a given period of a time,
a probationary employee is placed under observation and evaluation to determine W ON
he is qualified for permanent employment. As the termination was made before the
expiration of the 6 month probationary period, the employer was within his right to
terminate the ER-EE relationship. Petition dismissed. Cathay Pacific Airways Ltd v.
Philip Luis MarinMarin applied as a Reservation Officer in Cathay Pacific wherein
he was accepted with an initial probationary period of 6 months. He was terminated
before the end of the probationary period and he filed for illegal dismissal. He
claimed that he started to work without even being briefed as to the rules and
regulations of Cathay and that he did not commit any infraction during his
probationary period as shown by his performance ratings. He said that he never
received any memorandum calling attention to his alleged infractions and that he
did not resign as Cathay was impleading against him. Cathay Pacific as represented
by Marins supervisor Gozun, testified that Marin has been constantly caught
chatting with his workers who are not on break and thus disrupting their work. He
was also caught chatting while on the job leaving calls unanswered. He was informed
of this as disruptive conduct and was asked to mend his ways. He was also, despite
his denials, informed of the rules and regulations of the company as testified to
by the reservations manager. Cathay recommended Marin that he should resign so as
not to prejudice him in applying in other companies. LA dismissed the complaint.
NLRC affirmed LA. CA reversed NLRC. Thus this petition. The court held that the
employment of a probationary employee may only be terminated either1.. for a just
cause ; or2.. when the employee fails to qualify as a regular employee in
accordance with the reasonable standards made known to him at the start of the
employment._____________________________________Power of an employer to terminate
an employee on probation is subject to the following conditions:1.. it must be
exercised in accordance with the specific requirements of the contract2.. the
dissatisfaction on the part of the employer must be real and in good faith (not
violating the contract nor the law)3.. there must be no unlawful discrimination in
the dismissalThe burden of proof rests on the employer.A probationary employee
remains secure in his employment during the time of contract remains in effect but
once it expires, the employee can no longer invoke the constitutional protection
because it is in the discretion of the employer W ON to renew the contract. The
court found that based on his staff assessment reports, his work was unsatisfactory
especially conduct wise which is a very important field in a working environment.
Petition granted.Extension of ContractPhil Federation v. NLRC+Victoria Abril supra
Victoria Abril was employed by Philippine Federation of Credit Cooperatives, Inc.
(PFCCI), Respondent, shortly after resuming her position as office secretary,
subsequently went on leave until she gave birth to a baby girl.W hen she returned,
she had already been replaced and thus she was offered the position of Regional
Field Officer as evidenced by a contract which stipulated, among other things, that
respondents employment status shall be probationary for a period of six (6)
months, which she accepted. Respondent was allowed to work until PFCCI presented to
her another employment contract for a period of one year after which period, her
employment was terminated.She filed a complaint for illegal dismissal. LA dismissed
the same for lack of merit. NLRC reversed LA. Thus this petition. The court found
no merit in the petition. Article 281 of the Labor Code, as amended, allows the
employer to secure the services of an employee on a probationary basis which allows

him to terminate the latter for just cause or upon failure to qualify in accordance
with reasonable standards set forth by the employer. Probationary employees,
notwithstanding their limited tenure, are also entitled to security of tenure.
Except for just cause as provided by law,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1998/dec1998/121071.htm" \l
"_edn2" \o "" ## or under the employment contract, a probationary employee cannot
be terminated.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1998/dec1998/121071.htm" \l
"_edn3" \o "" ##In the instant case, petitioner refutes the findings of the NLRC
arguing that, after respondent had allegedly abandoned her secretarial position for
eight (8) months, she applied for the position of Regional Field Officer.
Petitioner insisted that respondent was employed to perform work related to a
project funded by the W orld Council of Credit Unions (W OCCU) and hence, her status
is that of a project employee. The court cited Villanueva v. NLRC,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1998/dec1998/121071.htm" \l
"_edn6" \o "" ## where the Court ruled that where a contract of employment, being a
contract of adhesion, is ambiguous, any ambiguity therein should be construed
strictly against the party who prepared it.The court found from the facts that the
respondent has become a regular employee Regardless of the designation petitioner
may have conferred upon respondents employment status, having completed the
probationary period and allowed to work thereafter, she became a regular employee
who may be dismissed only for just or authorized causes under Articles 282, 283 and
284 of the Labor Code, as amended.Petition is hereby DISMISSED.Absorbed Employees
Cebu Stevedoring Co. Inc. v. Regional Director/Minister of LaborArsenio Gelig and
Maria Quijano were former employees of Cebu Customs Arrastre Service (CCAS) which
was abolished by a resolution by the Secretary of Finance for which all the
employees of CCAS were given their termination pay. All the employees of CCAS were
absorbed by herein petitioner Cebu Stevedoring with the same positions they
formerly held. 5 months after they were terminated allegedly for redundancy and
retrenchment and that their probationary period has already expired. A complaint
for reinstatement with backwages was filed by the respondents. The Labor Regional
Director ruled for the employees saying that there was no need to employ them as
probationary employees as they have been doing the same work for a long time prior
to being absorbed by the petitioner company. The Minister of Labor affirmed this
ruling. Petitioner appealed to the Office of the President who dismissed the
appeal. Thus this petition. The petitioner claimed that the employees, being
casuals, can be terminated within the 6 month period without clearance from the
Minister of Labor. The court however, agrees with the Minister of Labor that the
private respondents cannot be considered as probationary employees as they were
already well-trained in their respective functions. Also, the petitioners were
unable to substantiate supposed business losses. Petitions dismissed.Standardsnot-determinedOrient Express v. NLRC + FloresAntonio Flores was hired as a crane
operator by Orient Express Placement Philippines in behalf of Nadrico Saudi
Limited. After only a month, Flores was repatriated to the Philippines allegedly
due to poor job performance for his uncooperative attitude. He filed a complaint
for illegal termination with the POEA who decided in his favor. NLRC affirmed this
decision saying that he was originally assigned as a crane operator and was instead
assigned to be a floorman thus, his employer could not have observed his work as a
crane operator. Thus this petition. The court held that petitioner failed to
specify the reasonable standards by which the private respondents poor performance
was evaluated. They were also not able to prove that these standards were made
known to him at the time of his recruitment in Manila. That there was a Licensure
Examination on which depended his ultimate employment cannot be attributable as the
fault of Flores. Art 281 LC implicitly requires that reasonable standards be made
known to the employee AT THE TIME OF HIS ENGAGEMENT. NLRC affirmed.Private School
Teachers Rule La Salette of Santiago Inc. v. NLRCLa Salette of Santiago hired
Clarita Javier as a highschool principal for 3 years. She then became a college
instructor for the companys college and became head of the Colleges Education and
Liberal Arts Department. She later on accepted the offer to return to the

highschool as assistant principal. She then finished her doctorate degree and
worked only part time at the college. After this, she transferred back to the
highschool as its principal for one year. Her term was extended for another year.
Before the term ended, the school wrote to her asking her to move to the college as
a certain Sister Saturnina Pascual will replace her as principal. Javier wrote to
the board of trustees of La Salette questioning her sudden removal. They did not
inform her of the reason but rather advised her of her teaching load in the
college. Clarita filed a complaint for illegal dismissal. The President of La
Salette College wrote to her saying that there would be no dimunition of
compensation or loss of seniority in her transfer. Despite this, she still refused
to report to her teaching assignment. LA ruled in her favor. NLRC upon appeal
affirmed the LA. An MFR was denied thus this petition. The court held that she had
not acquired permanency or tenure as a principal of La Salette. As observed by the
court, she had been regularly moved
from the highschool to the college department and that she was aware that her
position with the highschool as an administrative staff is not a permanent one but
rather at the pleasure of the school or at a fixed term. It is her work as a
teacher that is continuous. Unlike teachers, those appointed as department heads or
administrative officials (college or department secretaries, dean, assistant dean,
principal, director) should not expect to acquire a second status of permanency.
The petition is granted.# Escorpizo v. University of BaguioEsperanza Escorpizo was
hired as a highschool teacher. Attainment of permanent status depended on passing
the professional board examination for teachers (PBET). She failed. She appealed
her employment and asked for a second chance. She failed again. She took the next
exam at the end of the same school year. As the results were not yet given, she was
not included in the final list of the accepted teachers for the incoming school
year. Even though she passed, the school no longer renewed her contract of
employment. She filed a case for illegal dismissal. The LA ruled that the school
had permissible reason not to hire her. NLRC affirmed the LA. Thus this petition.
The court held that a probationary employee is one who, for a given period of time,
is being observed and evaluated to determine W ON he is qualified for permanent
employment. She was made aware of the fact of the rules given to her at the time of
her engagement that she had to pass the PBET before she becomes a permanent
employee and that she was on probation for a period of four semesters of two years.
Also, the court cited DECS Order No. 38 of 1990 saying that no teacher in the
private schools shall be allowed to teach unless he or she is a registered
professional teacher. Undoubtedly, Escorpizo was entitled to security of tenure
during her probationary period but it is the discretion of management W ON they will
rehire her once the contract expires. Her separation is not without justifiable
cause as the university was not under the obligation to rehire her. Petition
dismissed. Aklan College v. GuarinoRodolfo Guarino was hired as an instructor and
was later on appointed as Dean of the Commerce and Secretarial Department and was
dean for 17 years. Guarino eventually took a 1 year leave. A month before the end
of his leave, he informed the school of his intention to resume his position in the
college to which Aklan wrote back saying that he is not qualified for the position
due to DECS Order No. 5 of 1990 which required that appointment as a Dean depended
on graduation in an MBA course; and also that the position was already filled up by
the regular incumbent. The respondent filed a case for illegal dismissal against
petitioner. LA dismissed the case for lack of merit. NLRC reversed the LA saying
that Guarino should he reinstated. The CA affirmed the NLRC. Hence this petition.
Aklan cited La Salette of Santiago v. NLRC which lad down the rule that while an
employee attains security of tenure as a member of the teaching staff, he cannot
aspire for a second tenure in an administrative position. The court sides with
Aklan saying that the facts of La Salette are similar to this case. The court cited
Achacoso v. Macaraig saying that a permanent employment can only be issued to a
person who meets all of the requirement s for the position to which he is being
appointed. In the case at hand, Guarino was not able to finish his MBA. Also, DECS
Order No. 35 of 1990 and the Manual of Regulations of Private Schools required that
an incumbent dean should have finished his masters and that he should have taught

for 3 years at the college. The court also cited La Salette saying that unlike
teachers, those appointed as department heads or administrative officials (college
or department secretaries, dean, assistant dean, principal, director) should not
expect to acquire a second status of permanency. Petition is granted. (No
separation pay. He was not dismissed. He was still an instructor.)Termination of
EmploymentConstitution, ARTICLE XIII LABORSection 3. The State shall afford full
protection to labor, local and overseas, organized and unorganized, and promote
full employment and equality of employment opportunities for all. It shall
guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane
conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by
law. The State shall promote the principle of shared responsibility between workers
and employers and the preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual compliance therewith to
foster industrial peace. The State shall regulate the relations between workers and
employers, recognizing the right of labor to its just share in the fruits of
production and the right of enterprises to reasonable returns to investments, and
to expansion and growth. Art. 282. Termination by employer. An employer may
terminate an employment for any of thefollowing causes:a. Serious misconduct or
willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;b. Gross and habitual neglect by the
employee of his duties;c. Fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized representative;d. Commission of a
crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representatives; and e. Other
causes analogous to the foregoing.Art. 283. Closure of establishment and reduction
of personnel. The employer may also terminate the employment of any employee due to
the installation of labor-saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the establishment or undertaking
unless the closing is for the purpose of circumventing the provisions of this
Title, by serving a written notice on the workers and the Ministry of Labor and
Employment at least one (1) month before the intended date thereof. In case of
termination due to the installation of labor-saving devices or redundancy, the
worker affected thereby shall be entitled to a separation pay equivalent to at
least his one (1) month pay or to at least one (1) month pay for every year of
service, whichever is higher. In case of retrenchment to prevent losses and in
cases of closures or cessation of operations of establishment or undertaking not
due to serious business losses or financial reverses, the separation pay shall be
equivalent to one (1) month pay or at least one-half (1/2) month pay for every year
of service, whichever is higher. A fraction of at least six (6) months shall be
considered one (1) whole year. Art. 284. Disease as ground for termination. An
employer may terminate the services of an employee who has been found to be
suffering from any disease and whose continued employment is prohibited by law or
is prejudicial to his health as well as to the health of his co-employees:
Provided, That he is paid separation pay equivalent to at least one (1) month
salary or to one-half (1/2) month salary for every year of service, whichever is
greater, a fraction of at least six (6) months being considered as one (1) whole
year.Art. 285. Termination by employee.a. An employee may terminate without just
cause the employee-employer relationship by serving a written notice on the
employer at least one (1) month in advance. The employer upon whom no such notice
was served may hold the employee liable for damages. b. An employee may put an end
to the relationship without serving any notice on the employer for any of the
following just causes:1. Serious insult by the employer or his representative on
the honor and person of the employee;2. Inhuman and unbearable treatment accorded
the employee by the employer or his representative;3. Commission of a crime or
offense by the employer or his representative against the person of the employee or
any of the immediate members of his family; and4. Other causes analogous to any of

the foregoing.Art. 286. W hen employment not deemed terminated. The bona-fide
suspension of the operation of a business or undertaking for a period not exceeding
six (6) months, or the fulfillment by the employee of a military or civic duty
shall not terminate employment. In all such cases, the employer shall reinstate the
employee to his former position without loss of seniority rights if he indicates
his desire to resume his work not later than one (1) month from the resumption of
operations of his employer or from his relief from the military or civic duty.
General ConceptsCoverageArt. 278. Coverage. The provisions of this Title shall
apply to all establishments or undertakings,whether for profit or not.Omnibus Rules
Book VI (Post Employment) TITLE I: Termination of Employment Section 1. Coverage.
This Rule shall apply to all establishments and undertakings, whether operated
for profit or not, including educational, medical, charitable and religious
institutions and organizations in cases of regular employment with the exception of
the Government and its political subdivisions including government-owned or
controlled corporations.Equitable PCI Bank v. CaguioaGenerosa Caguioa was a senior
manager of Equitable PCI Bank and had been serving the bank for 35 years when she
was discharged for alleged connection with accounting activities specifically
discounting checks which caused Antonio Jarina (the customer who instituted the
complaint against her)
considerable damage. She denied any connection with the said activities and filed
a case of illegal dismissal. The LA upheld the dismissal of the private respondent
ruling that the dismissal was a valid exercise of management prerogative for having
violated the code of conduct on loyalty and honesty. Upon appeal, the same was
denied and thus it was raised to the CA who held that the testimonies of the people
who were in on her with the scheme were insufficient to prove her involvement and
justify her dismissal. CA held that she has been illegally dismissed. Hence this
petition. The court held that it was the petitioner bank who had the burden of
proving the legality of the dismissal through substantial evidence. The court found
that there was more than substantial evidence supporting the decision of the labor
arbiter in Caguioas participation in the check-discounting scheme when the LA used
bank records of Jarina and Caguioa which showed 21 matches of deposits and
withdrawals, the letter of Jarina to the bank as well as the testimonies of the
audit examiner. Caguioa only had denials and imputation of lack of probative value
of the evidence to counter the banks evidence. Despite her 35 years of service,
the court held being a managerial employee and because of her proven acts, Caguioa
may be validly terminated for breach of trust. Petition granted.
Security of
TenureArt. 277. Miscellaneous provisions.b. Subject to the constitutional right of
workers to security of tenure and their right to be protected against dismissal
except for a just and authorized cause and without prejudice to the requirement of
notice under Article 283 of this Code, the employer shall furnish the worker whose
employment is sought to be terminated a written notice containing a statement of
the causes for termination and shall afford the latter ample opportunity to be
heard and to defend himself with the assistance of his representative if he so
desires in accordance with company rules and regulations promulgated pursuant to
guidelines set by the Department of Labor and Employment. Any decision taken by the
employer shall be without prejudice to the right of the worker to contest the
validity or legality of his dismissal by filing a complaint with the regional
branch of the National Labor Relations Commission. The burden of proving that the
termination was for a valid or authorized cause shall rest on the employer. The
Secretary of the Department of Labor and Employment may suspend the effects of the
termination pending resolution of the dispute in the event of a prima facie finding
by the appropriate official of the Department of Labor and Employment before whom
such dispute is pending that the termination may cause a serious labor dispute or
is in implementation of a mass lay-off. (As amended by Section 33, Republic Act No.
6715, March 21, 1989)Art. 279. Security of tenure. In cases of regular employment,
the employer shall not terminate the services of an employee except for a just
cause or when authorized by this Title. An employee who is unjustly dismissed from
work shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to his other

benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement. (As amended by
Section 34, Republic Act No. 6715, March 21, 1989)Espina v. Hon of Court of Appeals
Respondent M.Y. San Biscuits, Inc. (M.Y. San) was previously engaged in the
business of manufacturing biscuits and other related products. In a conciliation
proceeding M.Y. San W orkers Union was informed of the closure or cessation of
business operations because of the intended sale of the business to Monde. A
separation package and cash equivalents of their vacation and sick leaves were
given to the employees. The written notice of the sale and purchase of the assets
of respondent M.Y San to respondent Monde. All the employees of respondent M.Y. San
received their separation pay and the cash equivalent of their vacation and sick
leaves. Thereafter, they signed their respective Quitclaims. Monde commenced its
operations. All the former employees of respondent M.Y. San who were terminated
upon its closure and who applied and qualified for probationary employment,
including petitioners herein, started working for respondent Monde on a contractual
basis for a period of six months.Subsequently, petitioners were terminated on
various dates. Petitioners filed a Complaint for illegal dismissal alleging that
sale of respondent M.Y. San to respondent Monde was merely a ploy to circumvent the
provisions of the Labor Code.M.Y. San insisted that its employer-employee
relationship with petitioners had ceased to exist, respondent Monde alleged that
petitioners had no cause of action saying that the probationary employees of Monde
who passed the performance appraisal and who qualified as regular employees thereof
were accordingly appointed as such. Out of the one hundred sixteen (116)
probationary employees engaged by respondent Monde, a total of seventy-four
employees qualified for regular employment.LA dismissed the case for lack of merit.
NLRC affirmed the Decision of the Labor Arbiter. CA denied petition. Thus this
petiton. The court held that as long as the companys exercise of the same is in
good faith to advance its interest and not for the purpose of circumventing the
rights of employees under the law or a valid agreement, such exercise will be
upheld.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/march2007/164582.htm" \l
"_ftn30" \o "" ## Thus, since private respondent M.Y. Sans closure and cessation
of business was lawful, there was no illegal dismissal of petitioners to speak of.
In the case at bar, petitioners were notified of the standards they have to meet to
qualify as regular employees of respondent Monde when the latter apprised them, at
the start of their employment, Respondent Monde exercised its management
prerogative in good faith when it dismissed petitioners due to absence without
leave (AW OL), gross and habitual neglect of duties, failure to qualify as regular
employees in accordance with the terms and conditions of their probationary
employment with respondent Monde. During the probationary period, the employer is
given the opportunity to observe the skill, competence and attitude of the employee
to determine if he has the qualification to meet the reasonable standards for
permanent employment. The length of time is immaterial in determining the
correlative rights of both the employer and the employee in dealing with each other
during said period. Thus, as long as the termination was made before the
expiration of the six-month probationary period, the employer was well within his
rights to sever the employer-employee relationship. CA reversed.Philippine Daily
Inquirer v. MagtibayPDI hired Leon Magtibay on a contractual basis for 5 months as
a phone operator. Magtibays contract was extended for 15 days, after the
expiration of the contract, PDI announce the availability of a position for
telephone operator for which Magtibay was hired for an initial 6 month probationary
period. A week before the end of the probationary period, PDI terminated Magtibay
for failure to meet company standards. Magtibay filed a complaint for illegal
dismissal saying that he had been employed for 10 months, more than the 6 month
probationary period requires and that he was not appraised of the company standards
and thus, there was no basis for his dismissal. PDI denied this and also countered
that the period of his contractual employment does not count as probationary
period. LA ruled for PDI saying that the dismissal is for a valid reason since he
repeatedly violated the company rule of letting unauthorized people to enter the

operators room, he did not say that he has a child and that he locked the room
without switching the proper lines to the company guards such that no calls were
entertained. NLRC reversed LA saying that the probationary employment has already
ripened into a regular one. CA agreed with the NLRC because it said that PDI failed
to prove that the standards were made known to him at the time of engagement. Thus
this petition. The court held that Magtibay is not a regular employee. Art 279
provides security of tenure for both regular as well as probationary employees. Art
281 or probationary employment stresses that employment shall not exceed 6 months
from the day the employee started working and that they may be terminated only for
just cause or when he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the time of his
engagement.The court held that all employees, regular or probationary are expected
to comply with company imposed rules and regulations. The rationale that Magtibay
did not follow this because he was not advised to follow these rules does not
convince the court. PDI was only exercising its hiring prerogative in not hiring
Magtibay. CA reversed.Nature of Right/ RationaleAlhambra Industries Inc. v. NLRC
Alhambra is a Filipino cigar manufacturing company. It employed Danilo Rupisan as a
salesman on a 6 month probationary basis. A surprise audit was conducted on the
records of Rusipan where the company found he incurred cash shortages due to
reimburseable expenses he has incurred. He was suspended for one month and was
eventually terminated at the end of that month for serious misconduct. He filed a
complaint for illegal dismissal. LA ruled for the company finding his termination
is for a just cause but it also ruled that the company violated Rupisans right to
due process when he was not given a copy of the audit report on which his dismissal
was based. Both parties appealed to the NLRC. NLRC ruled for Rupisans
reinstatement due to lack of due process. Thus this petition. The court held that
the LA found a valid ground for dismissal which was not disputed by the NLRC and
that to order reinstatement would be circuitous because the case would have to be
remanded to the LA. The desicion to dismiss Rupisan was not according to the rules
(then Sec 6 Rule XIV Book V) because it did not state the reason for his
termination but having been found guilty of serous misconduct, reinstatement and
separation pay cannot be awarded. He is only entitiled to damages. Petition
granted.Management PrerogativeSuldao v. Cimech Systems Construction Inc.Ruperto
Suldao was hired as a machinist by Cimech for 5 months on a contractual status. His
services were continually contracted by the company until he became a permanent
employee. Due to the lack of jobs that could be assigned to him, he was asked to
take a leave of absence for 15 days in which he complied. He was then asked to make
a letter request for field work transfer which he did. He failed to report for work
the following day because he was sick and he was barred from entering the premises.
He filed a case of constructive dismissal. The LA found that he was indeed
constructively dismissed. NLRC affirmed the LA. The CA reversed the NLRC,
dismissing the petition.Thus this petition. The court held that constructive
dismissal is equal to quitting because continued employment is rendered impossible,
unreasonable or unlikely. In cases of constructive dismissal, the burdn of proof is
in the employer to show that his dismissal is for a just and valid cause. In this
case, the employers say that Suldao committed insubordination and abandonment in
his refusal to move to the fabrication department, his arrogant asking for a raise
as well as not reporting for work also, that he was not constructively dismissed as
he participated in the Christmas party. The court found that even if the transfer
is valid, the manner in which he was barred after the transfer runs counter to good
faith. The court also found that, upon presentment of a medical certificate, that
he was indeed sick that day and that because of his letter request as required by
the company, it can be shown that he readily accepted the transfer. As to the
christmas party, the court held that this not prove that he has not been
constructively dismissed. Petition granted.Duldulao v. CAConstancia Duldulao was
hired by Baguio Colleges Foundation as a secretary or clerk typist in their College
of Law. A law student filed a case against her for irregularities in the
performance of her work as well as fraternizing with students of the College. The
petitioner was asked to submit her answer to the complaint but she failed to do so.

The Dean recommended her assignment outside the College of Law because of this, the
Vice President of Administration issued a Department Order asking her to move to
the highschool. She filed a motion to extend her answer with the dean which was not
allowed as the matter was already elevated to the Executive Board. The petitioner
filed a case with the BCF Grievance Committee but the case was transferred to the
Administrative Investigating Committee who found the Department Order appropriate
since it was intended to prevent to prevent the controversy from affecting the
harmonious relationship within the College of Law. The respondednt constituted a
Fact Finding Committee to investigate the allegations concerning the administrative
matters and found the petitioner guilty of the charges against her.The petitioner
did not report for work and instead took a vacation leave and several other leave
of absences. Petitioner then finally filed a complaint for constructive dismissal.
She claimed that she was arbitrarily asked to transfer from her place of work which
is far from her original place of assignment. LA ruled in Duldulaos favor. NLRC
reversed LA saying that petitioner was neither demoted nor dismissed and her salary
remained he same. CA upheld the NLRC. Thus this petition saying that the
constructive dismissal was tainted in bad faith and that it was intended as a
punishment. The court held that there is constructive dismissal if an act of clear
discrimination, insensibility or disdain by an employer becomes so unbearable on
the part of the employee that it would foreclose any choice by him except to forego
his continued employment. It exists when there is cessation of work because
continued employment is rendered impossible, unreasonable or unlikely as an offer
involving a demotion in rank and a dimunition in pay.The court held that at the
onset, the petitioner has no vested tight to the position of secretary/clerk typist
to the college of law because petitioner was employed not by the college but the
BCF system itself and thus, BCF can exercise its management prerogative, transfer
her to any of the departments as long as the transfer does not result in a demotion
in rank or diminution in benefits or salary of the employee. In this case, she
merely had to change the route she took for her new assignment, almost the same
distance from her house as that of her job in the college of law. The court ruled
that the transfer is not as a penalty but a preventive measure to avoid further
damage to the college. Petitioner cannot claim constructive dismissal simply becaue
her transfer to another department was against her wishes. Petition denied.
Requisites for Lawful dismissal: Concurrence of Substantive and Procedural Due
ProcessLandtex Industries v. CALandtex hired Salvador Ayson, who is also an officer
of the union, as a knitting operator. Ayson later on received a letter requiring
him to explain within 24 hours why no disciplinary action should be taken against
him for spreading damaging rumors about the personal life of an unspecified person
and for having an altercation with one of the company owners when he was asked to
submit an ID picture. Ayson replied that he cannot defend himself as to the rumors
because he does not know what those rumors are and that as to the ID pictures, he
was carrying something and he merely replied in a loud voice for which he
apologized for his actions. Landtex decided to conduct an investigation. In a
letter, the company informed Ayson of his termination due to his lack of
cooperation during the investigations. The union asked to hold meeting with Landtex
to discuss Aysons case. Landtex reaffirmed its decision to terminate and thus,
Ayson and the union filed a complaint before the LA. The LA ruled in favor of Ayson
saying that it has jurisdiction and that it did not find any evidence supporting
Landtexs allegations that Ayson spread malicious rumors he allegedly spread during
a drinking session about W iliam Go (owner of Landtex) and in shouting at Gos wife
regarding the ID picture. NLRC agreed with Landtex that Aysons case falls in the
original and exclusive jurisdiction of the voluntary arbitrators as provided in Art
261 of the LC and as agreed by them in their CBA. Upon appeal, the CA ruled that
the jurisdiction in with the LA and found Ayson to be illegally dismissed as there
was no proof or reason of his alleged acts and that his termination was
characterized by bad faith and wanton and reckless exercise of management
prerogative. The court awarded him separation pay. Both Landtex and Ayson filed a
petition for review. Landtex wanted to overturn the decision and insists that the
subject of the petition is covered by the CBA provision on voluntary arbitration

and thus excluded from the LAs jurisdiction. Ayson wanted reinstatement.
Substantive and Procedural Due ProcessArt 217, 261, 262 of the LC tackle the
jurisdiction of the LA. According to the NLRC, when the union called for a meeting
with Landtex, it initiated the grievance procedure and Aysons case should have
been subjected to voluntary arbitration. However, there is nothing in the records
which show that the meetings are already the grievance machinery contemplated in
their CBA. It did not comply with the requisite number of participants, (CBA: 3
members from union and landtex; 2 landtex, 7 union in their meeting) and there was
nothing in the minutes that shows that the attendes constituted a ManagementEmployement Committee (as mandated in their CBA during a grievance proceeding).
Lastly, if Landtx believed that the LA does not have jurisdiction, it should have
filed a motion to dismiss and not have participated in the proceedings before the
LA. The requisites for valid dismissal are For any of the causes in Art 282
Opportunity to be heard and to defend ones self. Landtex invokes the second
requisite and says that it invokes its management prerogative in dismissing Ayson
for insubordination. However, as earlier stated, there was not evidence of the
alleged offenses of Ayson. Procedural due process in the dismissal of the employee
requires notice and hearing. Landtex failed to understand the laws purpose in
requiring the opportunity of being heard. All the meetings conducted were not free
from arbitrariness and Ayson was not able to defend himself from the accusations.
No witness was ever presented against Ayson. A suspicion no matter how sincerely
felt cannot substitute for factual findings carefully established through an
orderly procedure. Petition Denied.Coca-cola Bottlers v. Valentina GarciaCoca-Cola
Bottlers Philippines, Inc. hired Valentina G. Garcia as Quality Control Technician
on probationary status. Petitioner adopted some modernization programs which
resulted in increased efficiency and production. Likewise, the work load of
their employees was substantially reduced. As a result, one employee in the
Department became redundant. Respondent, as the most junior employee of the
Department could be validly terminated. However,
instead of terminating respondent on ground of redundancy, petitioner decided to
assign her to its Iloilo plant.Petitioner informed respondent that she would be
transferred to the Iloilo plant for being an excess or redundant employee in the
Tacloban plant. Respondent refused to be transferred.Petitioner gave respondent
notice of her transfer to take effect on July 2, 1990. Yet, on said date,
respondent reported for work at the Tacloban plant.After she was refused entry,
respondent filed a complaint for illegal dismissal with Regional Arbitration
Branch. LA ruled for her. NLRC reversed. CA held that abandonment of work was a
just cause to effect respondent's dismissal, it found that the dismissal was
ineffectual since it did not comply with due process requirements, It held
petitioner liable for backwages from the time respondent was dismissed Petitioner
and respondent filed their respective motions for partial reconsideration.#
HYPERLINK "http://www.supremecourt.gov.ph/jurisprudence/2008/jan2008/159625.htm" \l
"_ftn10" \o "" ## Hence, the present petition.The sole issue for resolution in the
present petition is whether respondent was accorded procedural due process before
her separation from work. The court answered in the negative.In dismissing an
employee, the employer has the burden of proving that the dismissed worker has been
served two notices: (1) the first to inform the employee of the particular acts or
omissions for which the employer seeks his dismissal, and (2) the second to inform
the employee of his employers decision to terminate him.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/jan2008/159625.htm" \l
"_ftn18" \o "" ## The first notice must state that the employer seeks dismissal
for the act or omission charged against the employee; otherwise, the notice does
not comply with the rules.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/jan2008/159625.htm" \l
"_ftn19" \o "" ## According to the case of Maquiling v. Philippine Tuberculosis
Society, Inc this notice will afford the employee an opportunity to avail all
defenses and exhaust all remedies to refute the allegations hurled against him for
what is at stake is his very life and limb his employment. Petitioner argues that
the purpose of the notice requirement was achieved when petitioner sent several

notices to respondent at her last known address. The Court is not persuaded by such
argument.Article 277 of the Labor Code explicitly provides that the employer shall
furnish the worker whose employment is sought to be terminated a written notice
containing a statement of the causes for termination Section 2, Rule XXIII, Book V
of the Omnibus Rules Implementing the Labor Code provides the proper Standards of
due process: requirements of notice. In the case, proof that respondent was
properly apprised of the charges against her and given an opportunity to explain
her side is lacking. Respondent's dismissal was effected without the notice
required by law. Thus, petitioner failed to satisfy the two-notice requirement.
Petition is DENIEDBurden of ProofArt. 277. 3rd sentence. Miscellaneous provisions.
b. Subject to the constitutional right of workers to security of tenure and their
right to be protected against dismissal except for a just and authorized cause and
without prejudice to the requirement of notice under Article 283 of this Code, the
employer shall furnish the worker whose employment is sought to be terminated a
written notice containing a statement of the causes for termination and shall
afford the latter ample opportunity to be heard and to defend himself with the
assistance of his representative if he so desires in accordance with company rules
and regulations promulgated pursuant to guidelines set by the Department of Labor
and Employment. Any decision taken by the employer shall be without prejudice to
the right of the worker to contest the validity or legality of his dismissal by
filing a complaint with the regional branch of the National Labor Relations
Commission. The burden of proving that the termination was for a valid or
authorized cause shall rest on the employer. The Secretary of the Department of
Labor and Employment may suspend the effects of the termination pending resolution
of the dispute in the event of a prima facie finding by the appropriate official of
the Department of Labor and Employment before whom such dispute is pending that the
termination may cause a serious labor dispute or is in implementation of a mass
lay-off. (As amended by Section 33, Republic Act No. 6715, March 21, 1989)Chavez v.
NLRC + Supreme Packaging Inc.Pedro Chavez is a truck driver for Supreme Packaging
Inc. since 1984. In 1992, he wanted to be regularized to get the benefits of the
regular employees. In 1995, this not being granted, he filed complaint for
regularization but he was terminated (due to gross negligence in proper maintenance
of truck, wanting to sever ties with the company etc) before the case was heard. LA
ruled for Chavez finding them guilty of illegal dismissal. NLRC affirmed the
decision of the LA. The respondents sought reconsideration which was granted by the
NLRC saying that the fixed period f employment was already included in the contract
of employment and dismissed the petition. Upon appeal, the CA affirmed the decision
of the LA. It also disbelieved the respondents clam that the petitioner abandoned
his job noting that he just filed a complaint for regularization. However, on a
motion for reconsideration, the CA made a complete turn and reinstated the decision
of the NLRC. Thus this petition.The court found that the ER-EE relationship is
present due to the four fold test. (Same work, paid by SPI, dismissed by SPI, his
truck is owned by SPI and his truck routes are controlled by SPI.) That he was paid
on a per trip basis is not significant. That there is ER-EE relationship, there is
an illegal dismissal. As a rule, the employer bears the burden of proving that the
dismissal was for a valid and just cause. In this case, the respondents failed to
prove abandonment as the cause for the petitioners dismissal. To constitute
abandonment, there are 2 factors that must concur the failure to report for work or
absence without valid or justifiable reasona clear intention to sever employeremployee relationship. The court found that he just filed a complaint for
regularization and that a charge of abandonment s totally inconsistent with the
immediate filing of a complaint for illegal dismissal. Negligence cant also be
invoked by the company as a reason because it implied want or absence or failure to
exercise slight care or diligence. The single and isolated case of petitioners
negligence in proper maintenance of the truck does not amount to gross and habitual
neglect. Due to the lack of valid and just causes in terminating the services of
the petitioner thus violating Art 279 LC or security of tenure of Chavez, he is
reinstated to his work with full backwages. However due to the circumstances of the
case, separation pay instead of reinstatement is more equitable in this case.

Petition granted.Pepsi Cola Product Philippines v. E.V. Santos Emmanuel V. Santos


was employed by petitioner Pepsi Cola Products Phils he was promoted as Acting
Regional Sales Manager. 11 months later, he received from petitioner Ernesto F.
Gochuico a memorandum# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/april2008/165968.htm" \l "_ftn4"
\o "" ## charging him with violation of company rules and Article 282(a)# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/april2008/165968.htm" \l "_ftn5"
\o "" ## of the Labor Code.The charges arose out of alleged artificial sales by the
sales personnel of the Libis Sales Office allegedly upon the instruction of
respondent which resulted in damage to petitioners amounting to P795,454.54. It is
petitioners view that since respondent never denied these allegations, he is
deemed to have admitted the same. Petitioners found respondent guilty of the
aforesaid charges Respondent filed a case for illegal dismissal which the Labor
Arbiter. The Labor Arbiter ruled that petitioners failed to satisfactorily prove
the serious charges against respondent. Petitioners appealed to the NLRC which
affirmed the LA. Petitioners appealed to the CA who affirmed the NLRC decision
ruling that the charges in the memorandum of suspension and the notice of
termination were not satisfactorily proven. The only evidence submitted by
petitioners was the notice of termination which narrated what happened during the
administrative investigation. It also observed that while petitioners discovered
the alleged fictitious sales in April 1996, it was only on February 14, 1997 that
petitioners placed respondent on preventive suspension and commenced administrative
investigation. Thus this petition. The court held that in an illegal dismissal
case, the onus probandi rests on the employer to prove that its dismissal of an
employee is for a valid cause.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/april2008/165968.htm" \l
"_ftn16" \o "" ## In the instant case, petitioners failed to present evidence to
justify respondents dismissal. Save for the notice of termination, there is no
other evidence which would clearly and convincingly show that respondent was guilty
of the charges imputed against him.Petition is PARTIALLY GRANTED. Measure of
PenaltyBago v. NLRC + Standard Insurance Co Inc.Arlyn Bago was hired by Standard as
an encoder. A complaint was filed by Celia Abordo, the head of the Tuguegarao
Branch of SICI, against Bago for manipulating money out of the agents commissions
and for the spreading of rumors that Abordo was having an affair with the claims
assistant. An audit was conducted against Bago which disclosed that the commission
slips
were not signed and were pocketed by those in connivance in the scheme to get part
of the commission. The audit also disclosed that the rumor started when she asked
the claims assistant to drive her home and allowed him to bring home her car. HRD
asked Arlyn and those liable to explain why appropriate sanction should not be
imposed. Arlyn wrote back asking for forgiveness. HRD wrote back asking why proper
sanction should not be given them due to their admission. Later on Arlyn stated
that she admitted to the offense deliberately as to end the form of dishonesty
served against her and that she had not been involved in any act of dishonesty. The
accused employees were soon terminated from employment and Bago filed a complaint
for illegal dismissal with the LA. The LA found the employees to be illegally
dismissed. NLRC reversed the LA and found them to be validly terminated. CA denied
the petition. Thus this petition. The court held that the dismissal is valid. That
loss of trust is one of the reasons for her termination and that she is NOT a
management employee does not lie as her work required a substantial amount of trust
and confidence on the part of her employer. Even given that she is an ordinary rank
and file employer, there is sufficient evidence to show her involvement in the
dishonest scheme of pocketing the commissions. Even if Arlyn has been working there
for 8 years, the court held in the cases of Salvador v. Phil. Mining Service Corp
and Flores v. NLRC that the measure of penalty takes the length of time of service
into consideration but given that the offense is pilferage by petitioner which
shoes a lack of loyalty, the same cannot be used as a mitigating factor for it will
be like rewarding disloyalty. Petition is denied.Supreme Steel Pipe Corporation v.
BardajeRogelio Bardaje was hired by Petitioner Supreme as a warehouseman. Supreme

employees are required to wear the yellow uniform while at work but it was common
practice for warehousemen to wear longsleeved shirts over their uniform to serve as
protection from heat and dust while working. A security guard arrogantly ordered
him to remove his shirt and Bardaje feeling singled out and offended challenged him
to fight wherein a scuffle ensued but was later on subdued by another security
guard.Bardaje later on received a memorandum of his 1 month suspension due to his
violation of the rule prohibiting the inciting of a fight. W hen he reported back
after his suspension, he was terminated due to previous infraction of company
rules. He filed a complaint for illegal dismissal with the LA. LA ruled that
Bardaje is illegally dismissed and that the company failed to substantiate its
claim that complainant was guilty for serious misconduct but that the suspension
was proper as he could just have called the attention of his superiors instead of
inciting a fight. Petitioners appealed but pending this reinstated the petitioner
in their payroll. NLRC dismissed the complaint and imposed the penalty of
dismissal. On appeal, the CA reversed the NLRC and reinstated the decision of the
LA finding the penalty of dismissal too harsh. Thus this petition. The court ruled
that for the reason to be a just cause of termination under Art 282 of the LC, the
misconduct must be serious or that it must be of such grave and aggravated
character and not merely trivial or unimportant. Thus for misconduct or improper
behavior to be a just cause of dismissal (Lopez v. NLRC):it must be serious2. it
must relate to the performance of the employees dutiesit must show that the
employee has become unfit to continue working with the employer.The court said that
not every fight within the company premises would automatically warrant a dismissal
from service. The court found that the accusations of violent temper of the
respondent were due to the provocations of the security guard as corroborated by
witnesses from the company. As to the penalty, the court agrees that the same is
too harsh and that it is cruel and unjust to impose the drastic penalty of
dismissal if not commensurate to the gravity of the misdeed. Petition Denied.
Jackqui R. Moreno v. San Sebastian Collegio RecoletosSan Sebastian CollegeRecoletos, Manila (SSC-R), a domestic corporation and an educational institution
employed petitioner Jackqui R. Moreno (Moreno) as a teaching fellow.Moreno became
a member of the permanent college faculty.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/175283.htm" \l "_ftn6"
\o "" ## She was also offered the chairmanship# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/175283.htm" \l "_ftn7"
\o "" ## of the Business Finance and Accountancy Department. Reports and rumors of
Morenos unauthorized external teaching engagements allegedly circulated and
reached SSC-R. Moreno had unauthorized teaching assignments at the Centro Escolar
University and at the College of the Holy Spirit. Moreno received a memorandum#
HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/175283.htm" \l "_ftn9"
\o "" ## from the Dean of her college, requiring her to explain the reports
allegedly violated Section 2.2 of Article II of SSC-Rs Faculty Manual. Moreno sent
a written explanation# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/175283.htm" \l
"_ftn11" \o "" ## in which she admitted her failure to secure any written
permission before she taught in other schools.Moreno admitted she did not formally
disclose her teaching loads and that she went beyond the maximum limit because she
needed to support her mother and sister. On the same day that Moreno sent her
letter, the grievance committee unanimously found that she violated the prohibition
and her employment was to be terminated. Moreno thus instituted with the NLRC a
complaint for illegal termination against SSC-R, LA dismissed Morenos complaint
for lack of merit. SSC-R filed a Motion for Reconsideration# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/175283.htm" \l
"_ftn18" \o "" ## of the NLRC Decision, which was denied for lack of merit. SSC-R
instituted with the Court of Appeals which granted the petition saying that:
W illful disobedience of the employers lawful orders, as a just cause for
dismissal of an employee, envisages the concurrence of at least two (2) requisites:
the employees assailed conduct must have been willful or intentional, the

willfulness being characterized by a wrongful or perverse attitude; and the order


violated must have been reasonable, lawful, made known to the employee and must
pertain to the duties which he had been engaged to discharge and that the charges
are present in the case Moreno impugns the CA decision. Moreno insists that her
right to security of tenure is a more significant consideration in this case. The
court said that: No worker shall be dismissed from employment without the
observance of substantive and procedural due process and in termination cases, the
burden of proof rests on the employer to show that the dismissal is for just cause.
Respondent SSC-R contends that Morenos dismissal from employment was valid because
she knowingly violated the prohibition and in so doing, Moreno allegedly committed
serious misconduct and willful disobedience against the school. The court held
that: Under Art. 282(a) of the Labor Code, willful disobedience of the employers
lawful orders as a just cause for termination of employment envisages the
concurrence of at least two requisites: (1) the employees assailed conduct must
have been willful or intentional, the willfulness being characterized by a
"wrongful and perverse attitude"; and (2) the order violated must have been
reasonable, lawful, made known to the employee and must pertain to the duties which
he has been engaged to discharge.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/175283.htm" \l
"_ftn27" \o "" ##SSC-R miserably failed to prove that Morenos misconduct was
induced by a perverse and wrongful intent as required in Art. 282(a) of the Labor
Code. The Court finds the punishment to be disproportionate to the offense. Court
deems it appropriate to impose the penalty of suspension of one (1) year on Moreno,
to be counted from her illegal dismissal. However, given the period of time in
which Moreno was actually prevented from working in the respondent school, the said
suspension should already be deemed served. Petition for Review is GRANTED.
Termination of Employment by EmployeeResignationOriental Shipmanagement Co Inc. v.
NLRC + Felecisimo Cuesta, W ilfredo GonzagaOrental is a recruitment agency duly
licensed by the Philippine Overseas Employment Administration (POEA) to recruit
seafarers for employment on board vessels accredited to it. Kara Seal Shipping Co.,
Ltd. is petitioner's foreign-based principal, which owns and manages M/V Agios
Andreas, a vessel accredited to petitioner. Respondents Cuesta and Gonzaga were
hired as Third Engineers on board the said vessel for a one-year contract. Kara
Seal through its vessels Shipmaster signed an Agreement with the International
Transport W orkers Federation (ITF for brevity) increasing the monthly salary.
Later, the ITF inspector found out that the vessels crew has not been paid
properly. The Shipmaster assured him that the workers will be paid accordingly.
Upon reaching Port Piombino, however, respondents were ordered repatriated to
Manila and before such repatriation, they were made to sign Letters of Indemnity
saying the contract of employment of the above crewmember is terminated by mutual
agreementconsequently he declares to have no claim whatever against the
Shipowner. Respondents received from Kara Seal payments not in accordance with
the Agreement. As such respondents filed Complaint against Oriental and Kara Seal
for illegal dismissal. LA dismissed
the complaint saying The voluntariness of their resignation is confirmed and
reflected from the Letter of Indemnity they executed. They were executed in the
presence and with the participation of the ITF there is no evidence of threat or
intimidation to the complainant's resignation. NLRC affirmed LA. Upon appeal, the
CA reversed the NLRC decision saying that the Letters of Indemnity were void. The
CA also denied the MFR filed by Oriental and Kara Seal. Thus this petition.The
court used the doctrine of Pacta privata juri publico derogare non possunct.
Private agreements between parties cannot derogate from public right in ruling that
the quitclaims are invalid. Public policy dictates that they be presumed to have
been executed at the behest of the employer. It is the employer's duty to prove
that such quitclaims were voluntary. The employee's acknowledgment of his
termination is not enough to satisfy the requirement of voluntariness on his part.
Resignation is defined as the voluntary act of an employee who finds himself in a
situation where he believes that personal reasons cannot be sacrificed in favor of
the exigency of the service, and he has no other choice but to disassociate himself

from his employment. It would have been illogical for respondents to resign and
then claim that they were illegally terminated. W ell-entrenched is the rule that
resignation is inconsistent with the filing of a complaint for illegal dismissal.
Based on the foregoing disquisition, The SC is convinced that respondents were
forced to sign the Letters of Indemnity. Thus, said Letters of Indemnity must be
deemed void. Given this, the court ruled that they were illegally dismissed since
there was no justification for terminating their services and there was no due
process as Oriental did not serve two written notices to respondents prior to their
termination from employment, as required by the Labor Code. Petition DENIED.(As an
add on if maam asks)paragraph 5; Section 10 of Republic Act No. 8042 provides:In
case of termination of overseas employment without just, valid or authorized cause
as defined by law or contract, the worker shall be entitled to the full
reimbursement of his placement fee with interest at twelve percent (12%) per annum,
plus his salaries for the unexpired portion of his employment contract or for three
(3) months for every year of the unexpired term, whichever is less. The SC also
noted that there is no evidence on record of payment of placement fee. Hence, it is
unable to award reimbursement of the same. Cuesta is also entitled to vacation
leave pay. Lastly, for petitioner's breach of contract and bad faith, respondents
should be awarded P50,000 in moral damages and another P50,000 as exemplary
damages. In addition, they should also be awarded attorney's fees equivalent to ten
percent (10%) of the aggregate monetary awards.Globe Telecom v. Jenette Marie
CrisologoMarie Crisologo is a lawyer who was employed by Globe as a manager in its
corporate legal services department. During her pregnancy, she was rushed to the
hospital due to profuse bleeding and possible miscarriage and after a week tendered
her resignation citing the advise of the doctor for her to rest for the duration of
her pregnancy. Globe accepted her resignation. A few weeks after, she was informed
that an email was circulating within the company that she solicited money from one
of the companys suppliers. She requested a copy but was declined as there was no
longer any reason to pursue the matter. She also asked for a certification to clear
her reputation and said that she resigned because of the damaging email. The
certification was not given, instead, a certification of her resignation was
issued. She filed a complaint for illegal dismissal saying that she was fired on
the basis of a rumor, the veracity of which was never proven. LA dismissed the
complaint saying that a lawyer like her would never sign her rights away. NLRC
affirmed LA. Upon appeal, the CA granted the petition stating that given that there
is no sufficient proof that she voluntarily resigned and that it is unlikely that a
person receiving a high salary to resign. Thus this petition. The court said that
the resignation letter was drafted in a clear, concise and categorical language;
that a person of her professional standing will not easily relinquish her legal
rights; and that she resigned because of the health of her child. The court defined
resignation as the voluntary act of an employee who finds herself in a situation
where she believes that personal reasons cannot be sacrificed in favor of the
exigency of the service. The court noted that her letter of resignation expressed
gratitude towards the company and in Michael Academy v. NLRC , the court held that
expressions of gratitude cannot possibly come from an employee who is just forced
to resign since it belies the allegation of coercion. Petition Granted. Lazaro v.
Dacut et alLazaro V. Dacut, Cesario G. Cajote, Romerlo F. Tungala were crew members
of the LCT BASILISA, an inter-island cargo vessel owned by private respondent
Sta. Clara International Transport and Equipment Corporation. Dacut discovered a
hole in the vessels engine room. The company had the hole patched up with a piece
of iron and cement. Despite the repair, Dacut and Tungala resigned in July 1999
due to the vessels alleged unseaworthiness. Cajote went on leave from April 12-28,
1999 to undergo eye treatment. Fearing that he will be charged as Absent W ithout
Leave (AW OL), Cajote resigned in June 1999.Petitioners filed a complaint# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/169434.htm" \l "_ftn7"
\o "" ## for constructive dismissal amounting to illegal dismissal. Dacut and
Tungala claimed that they resigned after Reynalyn G. Orlina, the secretary of the
Personnel Manager, told them that they will be paid their separation pay if they
voluntarily resigned. They also resigned because the vessel has become unseaworthy

after the company refused to have it repaired properly. Cajote alleged that he
resigned because the company hired a replacement while he was still on leave. W hen
he returned, the Operations Manager told him that he will be paid his separation
pay if he voluntarily resigned;Labor Arbiter dismissed petitioners complaint.
There was sufficient evidence to prove that the vessel was seaworthy. Thus, the
fear of Dacut and Tungala was unfounded; also, Cajote has incurred excessive
unauthorized absences which would warrant his dismissal under the Labor Code.
Petitioners appealed to the NLRC. NLRC affirmed the Labor Arbiters decision.
Petitioners elevated the case to the Court of Appeals which likewise affirmed the
findings of the NLRC. Thus this petition.The court is asked to resolve: (1)
whether the Labor Arbiter erred in admitting the companys reply after the case had
been submitted for decision; (2) whether Dacut, Tungala and Cajote voluntarily
resigned from their employment; and (3) whether petitioners were entitled to their
monetary claims.Technical rules of procedure are not binding in labor cases. The
fact that the Labor Arbiter admitted the companys reply after the case had been
submitted for decision did not make the proceedings before him irregular. Here, the
Labor Arbiter, the NLRC, and the Court of Appeals were unanimous in their findings
that they voluntarily resigned. In fact, the company tried to give Cajote another
assignment but he refused it.The court rules that all factual findings are amply
supported by substantial evidence. There is insufficient evidence to prove
petitioners entitlement thereto. As crew members, petitioners were required to
stay on board the vessel by the very nature of their duties, the correct criterion
in determining whether they are entitled to overtime pay or night shift
differential is not whether they were on board. The petitioners failed to submit
sufficient proof that overtime and night shift work were actually performed to
entitle them to the corresponding pay. Petition is DENIED. Just CausesArt. 285.
Termination by employee.b. An employee may put an end to the relationship without
serving any notice on the employer for any of the following just causes:1. Serious
insult by the employer or his representative on the honor and person of the
employee;2. Inhuman and unbearable treatment accorded the employee by the employer
or his representative;3. Commission of a crime or offense by the employer or his
representative against the person of the employee or any of the immediate members
of his family; and4. Other causes analogous to any of the foregoing.W ithout Just
CauseArt. 285. Termination by employee.a. An employee may terminate without just
cause the employee-employer relationship by serving a written notice on the
employer at least one (1) month in advance. The employer upon whom no such notice
was served may hold the employee liable for damages.ARTICLE III BILL OF RIGHTS
Section 18. (1) No person shall be detained solely by reason of his political
beliefs and aspirations. (2) No involuntary servitude in any form shall exist
except as a punishment for a crime whereof the party shall have been duly
convicted. Azcor Manufacturing Inc. v. NLRC + Candido CapulsoAzcor Manufacturing
hired Capulso as a ceramics worker for more than 2 years. He asked to go on sick
leave as recommended by his doctor because he had developed bronchial asthma due to
his work at the ceramic factory (inhaled ceramic dust due to the lack of safety
gadgets). He was allowed to do so but upon returning to work, his supervisor
informed him that only the owner can allow him to continue his job. W hen it became
apparent that he will not be reinstated, he filed the complaint for illegal
dismissal. The company claims that Capulso resigned as evidenced by a letter of
resignation. LA dismissed the complaint. NLRC reversed and ruled that there is
illegal dismissal. Hence this petition. During the pendency of the case, Capulso
died of the asthma and a heart disease. The court held that to constitute a
resignation, it must be unconditional and with the intent to operate as such. There
must be an intent to relinquish a portion of the term of office. In this case,
Capulso signified his desire to return to work after he recuperated. The court
looked at the subject resignation letters and found that the letters were pre
drafted with blank spaces filled up with the alleged date of resignation and it was
in English which was not the normal vernacular of Capulso given his low level of
education. The court said that the company failed to show that the dismissal of the
employee is for a valid reason and that they are now liable for illegal dismissal.

Separation pay. Petition dismissed.A Prime Security Services Inc. v. NLRCOthello


Moreno had been working as a security guard for a year with the Sugarland Security
Services, Inc., a sister company of petitioner A Prime. He was rehired as a
security guard by the petitioner and assigned to the same post at the U.S. Embassy
Building after A Prime absorbed Sugarland. He was forced by petitioner to sign new
probationary contracts of employment for 6 months and before the period was over,
her was terminated. A Prime said that Moreno was caught sleeping on post for which
he was sent a memorandum giving him a last warning after which he had a quarrel
with another security guard, which resulted in a near shootout. Also that based on
a psychological test in which he did not pass the company standard and therefore,
he could not be hired as a regular employee. Moreno filed a complaint for illegal
dismissal. LA ruled for Moreno. NLRC affirmed the LA. Thus this petition.The court
ruled that Morenos employment with A Prime is just a continuation of his
employment in Sugarland. Petitioners failure to deny that Sugarland is its sister
company and that petitioner absorbed Sugarlands security contract and security
personnel assumes overriding significance over the resignation theorized upon,
evincing petitioners design to ignore or violate labor laws through the use of the
veil of corporate personality. The court said that Moreno has already gained the
status of regular employee upon completing the probationary period imposed on him
when he was employed in Sugarland.The court, having found that Moreno is a regular
employee, ruled that he has been illegally dismissed because there was just, legal
and valid basis to do so. W hat is more, he was not given a chance to contest his
dismissal. He was deprived of an opportunity to be heard.The dismissal of private
respondent was presumably based on the results of his behavioral and
neuropsychological tests and on his violation of a company rule on sleeping on
post. W ith respect to the behavioral and neuropsychological tests, the Court agrees
with NLRCs assessment: "Complainants result of his behavioral research and
neuropsychological test to our mind, is of no moment, considering that the said
test appeared to have been conveniently contrived to be conducted, and the result
produced on the very day of his dismissal, in question. Also, private respondents
alleged violations of sleeping on post, and quarrelling with a co-worker, may not
be proper grounds for dismissal, as the same were first infractions. Circular No. I
of A Prime,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2000/jan2000/107320.html" \l "_ftn11"
\o "" ## governing discipline, suspension and separation from the service of
security guards, provides:"SECTION VIII - SLEEPING ON POST1st Offense........W arning2nd Offense.......- 30 days suspension without pay3rd Offense........DismissalSECTION IX - CHALLENGING A POSTED SECURITY/LADY GUARD AND SUPERIORS1st
Offense - One (1) month suspension2nd Offense DismissalThe infractions of
Sections VIII and IX of Circular No. 1 by private respondent were first offenses,
they were not punishable by dismissal. They were not valid grounds for terminating
the employment of private respondent. Petition is DISMISSEDPerformance of Military
of Civic DutyArt. 286. W hen employment not deemed terminated. The bona-fide
suspension of the operation of a business or undertaking for a period not exceeding
six (6) months, or the fulfillment by the employee of a military or civic duty
shall not terminate employment. In all such cases, the employer shall reinstate the
employee to his former position without loss of seniority rights if he indicates
his desire to resume his work not later than one (1) month from the resumption of
operations of his employer or from his relief from the military or civic duty.Book
VI, Rule I, SECTION 12. Suspension of relationship. The employer-employee
relationship shall be deemed suspended in case of suspension of operation of the
business or undertaking of the employer for a period not exceeding six (6) months,
unless the suspension is for the purpose of defeating the rights of the employees
under the Code, and in case of mandatory fulfillment by the employee of a military
or civic duty. The payment of wages of the employee as well as the grant of other
benefits and privileges while he is on a military or civic duty shall be subject to
special laws and decrees and to the applicable individual or collective bargaining
agreement and voluntary employer practice or policy.Forced ResignationJSS Indochina
Corp v. FerrerGerardo Ferrer and the other respondents were deployed to Taiwan but

only 20 workers were employed as construction workers at the Formosa Plastics


Corporation. The respondents sought assistance from the Manila Economic and
Cultural Office who directed them to sign separate affidavits saying that they were
assigned at Shin Kwan Enterprise and not at Formosa. They were soon repatriated to
the Philippines. The employees filed a complaint for illegal dismissal with the LA.
The Company said that they refused to work after being assigned as pipe tract
workers in Shin Kwan. The LA ruled for the employees saying that they have been
forced to resign. Upon appeal, the NLRC affirmed the LA. In the petition with the
CA, the CA dismissed the petition saying that the corporation was not able to prove
that the private respondents dismissal was for just, valid or authorized cause.
Thus this petition. The court held that the petitioners violated their contract by
not hiring the respondents as construction workers as agreed upon. The respondents
decision to resign from their employment was made by force of circumstances not
attributable to their own fault. The respondents were forced to resign and preterminate their employment contracts in view of the petitioners breach of its
provisions. RA 8042 (Migrant workers act) provides that in cases of termination of
contract without valid cause, they shall be entitled to full reimbursement of
placement fee plus salaries for the unexpired portion of the contract or for 3
months for every year of the unexpired term. Petition denied.Termination of
Employment by EmployerSubstantive Requirements Just Causes Art. 282. Termination
by employer. An employer may terminate an employment for any of the following
causes:a. Serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;b. Gross and
habitual neglect by the employee of his duties;c. Fraud or willful breach by the
employee of the trust reposed in him by his employer or duly authorized
representative;d. Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or his duly authorized
representatives; and e. Other causes analogous to the foregoing.Art. 277.
Miscellaneous provisions.b. Subject to the constitutional right of workers to
security of tenure and their right to be protected against dismissal except for a
just and authorized cause and without prejudice to the requirement of notice under
Article 283 of this Code, the employer shall furnish the worker whose employment is
sought to be terminated a written notice containing a statement of the causes for
termination and shall afford the latter ample opportunity to be heard and to defend
himself with the assistance of his representative if he so desires in accordance
with company rules and regulations promulgated pursuant to guidelines set by the
Department of Labor and Employment. Any decision taken by the employer shall be
without prejudice to the right of the worker to contest the validity or legality of
his dismissal by filing a complaint with the regional branch of the National Labor
Relations Commission. The burden of proving that the termination was for a valid or
authorized cause shall rest on the employer. The Secretary of the Department of
Labor and Employment may suspend the effects of the termination pending resolution
of the dispute in the event of a prima facie finding by the appropriate official of
the Department of Labor and Employment before whom such dispute is pending that the
termination may cause a serious labor dispute or is in implementation of a mass
lay-off. (As amended by Section 33, Republic Act No. 6715, March 21, 1989)Art. 279.
Security of tenure. In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when authorized by
this Title. An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the
time of his actual reinstatement.
(As amended by Section 34, Republic Act No. 6715, March 21, 1989)Basis Employer
RightOcean East Agency Corp v. NLRC + Capt. Pepito GucorOcean East hired Capt.
Gucor as a master of M/V Alpine for one year. He was later on informed of his
transfer to another vessel pursuant to the transfer clause of the Standard
Employment Contract (SEC). He viewed this as an insult and he signified that all
his benefits should be accorded him and that the cause for his repatriation is

unreasonable. The company assured him that he is not being terminated and that the
repatriation s for documentary purposes only. He finally agreed to be repatriated
to the M/V Eleptheria but failed to disembark when ordered to do so. On the ground
of serious misconduct or willful disobedience, Ocean East terminated his services.
He filed a complaint for illegal dismissal. LA dismissed the complaint. NLRC
reversed the LA. Thus this petition. The court held that the transfer clause in the
SEC is not violative of Art 34 I of the LC which provides that it shall be unlawful
to substitute or alter employment contracts approved by the DOLE without the
approval of the Secretary of Labor and that in fact it is complementary as a
transfer is sanctioned only if it is to any vessel owned by the same employer and
that the rating (terms of service and wages) are in no way inferior or that the
period of employment is not shortened. The transfer clause is incorporated into the
original contract and so the approval of the Sec of Labor is no longer necessary.
In AHS Philippines v. CA the court held that an employer may terminate an employee
on the ground of willful disobedience or to the employers order, regulation or
instruction. (given that the regulations are:reasonable and lawfulsufficiently
known to the employee at the time of his engagementin connection with the duties
which the employee has been engaged to discharge.)In the case at hand, respondents
defiance of the order posed a considerable prejudice to the business of the
employer; there is a valid and legal cause for the termination of the respondent.
Petition granted.Just Causes RequisitesSerious Misconduct, W illful disobedience
(Insubordination)Art. 282. Termination by employer. An employer may terminate an
employment for any of the following causes:a. Serious misconduct or willful
disobedience by the employee of the lawful orders of his employer or representative
in connection with his work;Ha Yuan Restaurant v. NLRCJuvy Soria worked as a
cashier in petitioners establishment located inside the SM Food Court
Makati.Respondents co-worker Sumalague was eating at the back of the store, when
respondent rushed toward Ma. Teresa Sumalague and hit the latter on the face
causing injuries and resulting in a scuffle between the two. Despite the
intervention of their supervisor Fiderlie Recide, they were not pacified. They were
brought to the SM Food Court Administration Office and then to the Customer
Relations Office for further investigation.SM Food Court Manager banned the two
from working within the SM Food Courts premises. Respondent then filed with the
Labor Arbiter a complaint for illegal dismissalLA dismissed case. NLRC affirmed. CA
affirmed NLRC. Hence, herein petition The court held in Philippine Long Distance
Telephone Co. vs. NLRC that separation pay shall be allowed as a measure of social
justice only in those instances where the employee is validly dismissed for causes
other than serious misconduct or those reflecting on his moral character.
Separation pay therefore, depends on the cause of dismissal, and may be accordingly
awarded provided that the dismissal does not fall under either of two
circumstances: (1) there was serious misconduct, or (2) the dismissal reflected on
the employees moral character.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/jan2006/G.R.%20No.%20147719.htm"
\l "_ftn5" \o "" ##The Court holds that respondents cause of dismissal in this
case amounts as a serious misconduct and as such, separation pay should not have
been awarded to her. Thus, the petition should be granted.Her cause of dismissal
amounting to a serious misconduct, respondent is not entitled to an award of
separation pay. As further stated in Philippine Long Distance Telephone Co. vs.
NLRC: The policy of social justice is not intended to countenance wrongdoing simply
because it is committed by the underprivileged.Social justice cannot be permitted
to be refuge of scoundrels any more than can equity be an impediment to the
punishment of the guilty.Petition is GRANTED. First Dominion Resources Corp v.
PenarendaPetitioner is a domestic corporation engaged in textile manufacturing. It
employed Pearanda as packer and Vidal as drugman. Both were assigned to the night
shift.Pearanda was caught sleeping on the job on two occasions for which he was
asked to explain why he should not be terminated for committing the same offense.
Pearanda merely denied the allegations against him. Petitioner, however, found his
denial insufficient and terminated his employment on June 20, 2001.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/jan2006/G.R.%20No.%20166616.htm"

\l "_ftn5" \o "" ##Respondents filed separate complaints for illegal dismissal


which were consolidated. NLRC reversed the decision of the labor arbiter, ruling
that the dismissal was without just cause, but withheld reinstatement and payment
of backwages.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/jan2006/G.R.%20No.%20166616.htm"
\l "_ftn13" \o "" ## Respondents elevated the case to the Court of Appeals ruled
that the dismissal was illegal. Both parties moved for reconsideration of the
decision but both motions were denied.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/jan2006/G.R.%20No.%20166616.htm"
\l "_ftn15" \o "" ## Thus this petition.The court held that under Article 282 of
the Labor Code, willful disobedience of a lawful order of the employer is a valid
cause for dismissal. W illful disobedience of the employers lawful orders, as a
just cause for the dismissal of an employee, requires the concurrence of at least
two requisites: (1) the employees assailed conduct must have been willful or
intentional, the willfulness being characterized by a wrongful and perverse
attitude; and (2) the order violated must have been reasonable, lawful, made known
to the employee and must pertain to the duties which he had been engaged to
discharge. On the first requisite, it is undisputed that respondents violated
Company Rule 8 twice. Vidal cleverly tried to avoid being caught sleeping a second
time by sneaking inside the container van. Pearanda, after being awakened and
warned by his supervisor, ignored the same and continued sleeping. The second
requisite is also present in this case. As a manufacturer of finished textile,
petitioner utilizes machines which are operated continuously. The machines
functions are interlocked in a way that a disruption in one interrupts the entire
operation. Court has recognized that management has the right to formulate
reasonable rules to regulate the conduct of its employees for the protection of its
interests. W e find Company Rule 8 to be a valid exercise of management prerogative.
As for affording due process to the respondents, Petitioner not only satisfied the
two-notice requirement, it also conducted an investigation, albeit summary, to
determine the culpability of the respondents. Respondents were confronted in detail
with the charges against them and given the opportunity to present their side. As
long as the employee is given the opportunity to explain his side and to present
evidence in support of his defense, due process is served. Petition is hereby
GRANTED.Citibank NA v. NLRCRosita Paragas was hired by Citibank as Secretary to
several important people but because of the reorganization, respondent bank
declared Paragas position redundant.She was moved around from task to task until
she was assigned to undertake the special project of reorganizing the Universal
Account Opening Forms. The company went thru 9 files boxes only and found 9
misfiles.This level of errors is not acceptable because a misfiled document is
considered LOST and you will have to go through the file one by one to be able to
retrieve it.As she failed to complete the project she was given another 30 days to
complete it.AVP Ferrera directed complainant to explain in writing why her
employment should not be terminated on the ground of serious misconduct, willful
disobedience, gross and habitual neglect of her duties and gross inefficiency.
Correspondingly, complainant was placed under Preventive suspension. An
administrative conference took place with the complainant, her counsel and the
Union President in attendance. Respondent bank notified complainant that her
written explanation were found self-serving, and consequently, terminating her
employment on the ground of serious misconduct, willful disobedience, gross and
habitual neglect of duties and gross inefficiency.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/159302.htm" \l
"_ftn2" \o "" ##Following the termination of her services, respondent filed a
complaint for illegal dismissalLA dismissed the complaint for lack of merit, NLRC
affirmed LA. Respondent filed a MOTION FOR PARTIAL RECONSIDERATION of the NLRC
Resolution. She no longer challenged her dismissal on the ground of work
inefficiency, but prayed that petitioner be ordered to pay her the Provident Fund
benefits under its retirement plan for which she claimed to be qualified pursuant
to petitioners W orking Together Manual, Finding that respondents dismissal was
for causes other than misconduct, the NLRC, by the above-mentioned October 24,

2001 Resolution granted respondents motion for partial reconsideration.#


HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/159302.htm" \l
"_ftn5" \o "" ##Petitioner thereupon filed a petition for certiorari with the
Court of Appeals to set aside and nullify the NLRC Resolution. Ca dismissed for
lack of merit. Thus this present petition.The court held that: her Notice of
Appeal and Appeal Memorandum was filed after she had already submitted her
position paper. Thus, any mention of the Provident Fund therein would fail to
adhere to the above-ruling in the Maebo case cited by the court which requires all
facts, evidence, and causes of action should already be proffered in the position
papers and the supporting documents thereto, not in any later pleading. Also, the
court held that respondent is not entitled to retirement benefits as this Court
finds that she was validly dismissed for serious misconduct and not merely for work
inefficiency. In support of its ruling that respondents dismissal was valid, the
labor arbiter relied on the performance appraisals of respondent wherein the court
noted significant behavioral problems in respondent. Evaluation of respondent cited
above finds corroboration in her admission that she may have been tactless and
insolent in dealing with her superior but it does not allegedly warrant the supreme
penalty of dismissal.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/159302.htm" \l
"_ftn24" \o "" ##In the case of Cathedral School of Technology v. NLRC, the court
held that her unreasonable behavior and unpleasant deportment in dealing with the
people she closely works with in the course of her employment, is analogous to the
other just causes enumerated under the Labor Code. It is respondents obstinate
refusal to reform herself which ultimately persuades this Court to find that her
dismissal on the ground of serious misconduct was valid.Having been validly
dismissed on the ground of serious misconduct, respondent is thus disqualified from
receiving her retirement benefits pursuant to the provision of petitioners
W orking Together Manual. petition is GRANTEDCosmos Bottling Co v. P NagramaCosmos
Bottling Corporation hired Pablo Nagrama, Jr. as a maintenance mechanic he was
elected by the local union as chief shop steward. Respondent was designated by
petitioner as waste water treatment operator. Petitioner hired Clean Flow
Philippines, Inc. to conduct training seminars and Respondent was instructed to
attend the seminar. He failed to attend the first two (2) days of the seminar.#
HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/164403.htm" \l "_ftn9"
\o "" ## His immediate supervisor, Josephine D. Calacien wrote a letter to Nagrama
informing him that the charges of abandonment of duty and gross insubordination had
been lodged against him. He was required to submit his written explanation.#
HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/164403.htm" \l
"_ftn10" \o "" ## Respondent filed his explanation and contended that he had to
attend to an administrative hearing for fellow unionists. He averred that as a
union official, he is obligated to attend to the problems of his fellow union
members. LA rendered judgment sustaining the legality of the dismissal due to the
letter Nagrama sent to Cosmos apologizing, considering it as a judicial admission
of guilt. Respondent appealed the matter to the NLRC who affirmed the decision of
the LA. On petition for certiorari to the CA, it reversed the NLRC. Thus this
petition.The court held that the there is no evidence to justify Nagramas
termination. Two (2) elements must be satisfied for an employee to be guilty of
abandonment.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/164403.htm" \l
"_ftn74" \o "" ## The first is the failure to report for work or absence without
valid or justifiable reason. The second is a clear intention to sever the
employer-employee relationship. A review of the facts discloses that these twin
elements are not present here.He also asked for and was given permission. For the
second charge against him: for gross insubordination, also called willful
disobedience of a lawful order, to lie, two (2) requisites are also necessary.#
HYPERLINK

"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/164403.htm" \l
"_ftn81" \o "" ## First, the assailed conduct must have been intentional and
characterized by a wrongful and perverse attitude.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/164403.htm" \l
"_ftn82" \o "" ## Second, the order violated must have been reasonable, lawful,
and made known to the employee and should pertain to the duties which he has been
engaged to discharge. These were not found to be present in the case. Petition is
DENIED for lack of merit.Oscar P. Garcia and Alex Morales v. Malayan Insurance
Petitioners were employed as risk inspectors by Malayan Insurance Company, Inc.
Malayan issued to petitioner Garcia an Inter-Office Memorandum# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/160339.htm" \l "_ftn4"
\o "" ## giving him 24 hours to explain his involvement in the theft of company
property. Private respondent also issued to petitioner Morales a similar memorandum
but with additional instruction for his preventive suspension for 30 days pending
investigation. # HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/160339.htm" \l "_ftn5"
\o "" ##Petitioners denied their involvement in the theft and countered that the
filing of the charges against them was a form of harassment against their union.
Malayan notified petitioner Garcia, through a letter dated February 28, 2000, of
the termination of his employment. Petitioners filed before the Labor Arbiter (LA)
a Complaint for illegal dismissal, LA dismissed their Complaint. Petitioners
appealed to NLRC who affirmed the LA. CA affirmed the NLRC. Hence, the present
petition. LA and the NLRC declared the dismissal of petitioners valid in view of
substantial evidence that petitioner Garcia was involved in the theft of private
respondent's confidential records and that petitioner Morales participated in the
cover-up thereof relying on the affidavits of Umila and De Guzman. The NLRC found
these witnesses credible because they were not shown to hold any grudge against
[petitioners], much more because said witnesses are ordinary members of the union.
W hile the CA did not elaborate on its view, it bound itself by the concurrent
factual findings of the LA and NLRC. Petitioners argue that the affidavits of Umila
and De Guzman have no probative value for neither had direct knowledge of the
taking of private respondent's properties. De Guzman's statement detailed the
effort to bring said properties back into the premises of private respondent and to
make it appear that these were merely misplaced.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/160339.htm" \l
"_ftn23" \o "" ##Court cannot agree that no direct evidence was presented on the
theft of the properties or the cover-up thereof.W hile the participation of
petitioner Garcia in saidtheftandcover-upis detailed in said affidavit, the
same cannot be said of the connection of Morales to said incidents. The only
evidence of petitioner Morales's involvement in the cover-up is the statement of
De Guzman that it was said petitioner who instructed him to get a parcel from a
third person.There is no proof that Morales knew the contents of the parcel.
Nowhere does it appear that petitioner Morales had knowledge of what was to happen
or had participation in it. Court finds the affidavit of De Guzman so lacking in
crucial detail as to Morales. dismissal.Petition is PARTLY GRANTED as to Morales
only.
Gross and Habitual Neglect of DutiesArt. 282. Termination by employer.
An employer may terminate an employment for any of the following causes:b. Gross
and habitual neglect by the employee of his duties;c. Fraud or willful breach by
the employee of the trust reposed in him by his employer or duly authorized
representative;d. Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or his duly authorized
representatives; and e. Other causes analogous to the foregoing.National Book Store
v. CANational Bookstore Inc. employed Marietta Ymasa and Edna Gabriel as Cash
Custodian and Head Cashier respectively. They were assigned to the SM North Branch.
They reported for work to count the previous days sales as a matter of routine.
The money is to be deposited with INTERBANK and PCIB. After preparing the deposit
slips, the counted money was placed inside 2 separate plastic bags sealed with
scotch tapes and rubber bands. Ymasa placed the money n her cabinet and locked it.
It was only in the evening when the plastic bags were taken out because the branch

manager was not in his office, It was handed over to the Assistant Manager for
safekeeping in the Branch vault. The private respondents retrieved the bags from
the Assistant Manager the next day in order to give the money to the roving tellers
of PCIB and INTERBANK. It was again counted before being deposited. It was found
that the amount was short of 42,000. The management asked the respondents why they
should not be dismissed for the loss of company funds. In writing, the employees
explained that they had no access to the Bookstores vault and that before leaving
the office, they were subjected to a thorough body search. They also claimed that
they have served the petitioner for 13 years without being required to have a proof
of receipt in turning over the collection. They were subsequently terminated for
gross neglect of duty and loss of confidence. The employees filed a complaint for
illegal dismissal against the company. LA ruled for them,
entitling them t reinstatement. NLRC affirmed the LA. Upon appeal, the CA affirmed
the NLRC. Hence this petition. The court held that for valid dismissal, the
employee must be afforded due processthe dismissal must be for a valid and just
cause as provided in Art 282 of the LCAs to the requirement of due process, the
employer should give 2 written notices, 1 to inform the cause of the termination 2.
to inform the employee of the decision to dismiss him. National Bookstore complied
with this requirement but they also carry the burden of showing convincing evidence
that the dismissal is based on the just causes enumerated in Art 282 of the LC. The
records show that they were not even remotely negligent of their duties and that
they had no access to the vault. Even given arguendo that they are negligent, it
was only a single and isolated act and this does not constitute gross or habitual
neglect of duties. The court found the respondents to have been illegally dismissed
and they are entitled to full backwages inclusive of allowances. LA is affirmed.
Tres Reyes v. Maxims Tea HouseMaxims Tea House employed Ariel Tres Reyes as a
driver. In the wee hors of the morning as he was driving to fetch the employees
from a ballroom dancing establishment, he figured in an accident when a 10 wheeler
truck failed to stop during a red light and struck the van he was driving. The
management of Maxim required him to explain what happened that morning but upon
finding his explanation unsatisfactory, he was terminated, thus he filed the
complaint for illegal dismissal where the LA found him grossly negligent in failing
to avoid the collision. The NLRC reversed the decision of the La saying that there
was no negligence on his part. Upon appeal, the CA ruled in favor of the employer.
Hence the instant case. The court held that the case before the Labor Arbiter
depended primarily on the position papers of the parties and no trial was held thus
the finding of the CA that the LA was in a better position to observe the parties
cannot be applied to this case. Upon looking at the evidence, the court found that
truck was n the wrong lane and that it was purely an accident. Thus, the immediate
dismissal of the petitioner is unjustified. The argument that it was already his
second vehicular accident is not also applicable to the case because the court
found that the same was also a pure accident wherein Tres Reyes was a victim.
Defenisve driving is also not a defense. The test to determine the existence of
negligence is the question: Did the petitioner, in doing the alleged negligent act,
use that reasonable care and caution which an ordinarily prudent person would use
in the same situation?The court, as stated earlier said yes as he was the victim of
the vehicular accident. Petition is granted. Loss of Trust and ConfidenceArt. 282.
Termination by employer. An employer may terminate an employment for any of the
following causes:c. Fraud or willful breach by the employee of the trust reposed in
him by his employer or duly authorized representative;Mercury Drug Corp v. Zenaida
Serrano Zenaida Serrano was employed by Mercury Drug as a pharmacy assistant who
was tasked to attend to customers and handing the money paid to them to the cashier
for the receipt. Mercury, upon decision of the Branch Manager, put Serrano under
observation due to the reports from other pharmacy assistants that she has been
pocketing money. The Branch Manager enlisted the help of a mason and 2 students.
After the 2 students bought the medicine furnished with the receipt, the mason soon
bought 10 capsules of squalene worth 120 pesos which was the exact amount given by
the mason. He was not given the receipt. He soon came back as per the Branch
Managers instruction, asking for the receipt and pinpointing Zenaida as the woman

who served him. She then took out the 120 pesos from her pocket and gave it to the
cashier. The Branch Manager confronted her and thus she gave a resignation letter
apologizing as well as saying that she as tempted because it was the exact amount.
Mercury did not accept this and made her undergo an investigation who subsequently
found her guilty. Mercury sent a letter to Zenaida terminating her employment due
to loss of trust and confidence. She filed a complaint for illegal dismissal saying
that she had a lot customers at the time and that she just forgot about the 120
pesos. LA found that the allegations against Zenaida were fabricated and the the
evidence was not substantial to prove her dishonesty. NLRC dismissed the petition
finding the respondent dishonest in her duties. CA upheld the LA. Thus this
petition. The court held that although the reason for her termination, loss of
trust and confidence, generally applies to management employees, if the employee
holds a position whose functions may only be performed by someone who has the
confidence f management or has a greater duty to management than ordinary workers,
can be terminated due to the betrayal of trust. Loss of trust and confidence does
not need proof beyond reasonable doubt. In this case, mercury alleged that the
pocketing of the 120 pesos was a ground for her termination due to her dishonesty.
Furthermore, she was already convicted of the crime of qualified theft to which the
mason testified aganst her. Adding credence to her committing of the offense.
However, Mercury failed to abide by the two notice rule and thus deprived her of
due process. Thus, she may be awarded damages. Petition partly granted.Amelia R.
Enriquez v. BPIEnriquez and Sia were the branch manager and assistant branch
manager of BPI-Bacolod. They maintain their branch experienced a heavy volume of
transactions owing to the fact that it was the last banking day of the year and
that Descartin, one of the tellers had a cash shortage of P36,000.00 due to an
innocent oversight of her mother-in-law, Remedios Descartin (Remedios), to sign the
withdrawal slip when the latter withdrew P36,000.00 earlier that day. Descartin was
permitted to leave the bank to look for Remedios so that the latter could sign the
withdrawal slip. Thus, petitioners aver, the transaction was regularized before the
end of the day. # HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/172812.htm" \l
"_ftn6" \o "" ##It is the position of petitioners that as there was neither
shortage nor loss to the bank. Initial discrepancy was accounted for. Respondents,
however, have a different version of what transpired. Descartin confided to her coteller Fregil, was incurred because she had temporarily borrowed the money that
week. Fregil was allegedly informed that teller Descartin was going to prepare a
white lie report. Petitioners were instructed to report to the BPI head office
for polygraph testing. Petitioners submitted their respective replies in which they
denied the charges against them. Petitioners were dismissed from employment on
grounds of breach of trust and confidence and dishonesty.Petitioners filed their
respective Complaints# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/172812.htm" \l
"_ftn9" \o "" ## for illegal dismissal against respondents andprayed for
reinstatement. LA found that petitioners had been illegally dismissed. NLRC ruled
that respondents had just cause to terminate their employment. Petitioners
thereafter elevated the case to the Court of Appeals. The appellate court, agreeing
with the NLRC, denied petitioners appeal and affirmed in toto the latters
assailed decision. Thus this petition.The petition should be denied. There is no
denying that loss of trust and confidence is a valid ground for termination of
employment.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/172812.htm" \l
"_ftn23" \o "" ## Also, it must be shown that the employee is a managerial
employee, since the term trust and confidence is restricted to said class of
employees.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/172812.htm" \l
"_ftn27" \o "" ## A review of the tellers transaction summary# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/172812.htm" \l
"_ftn28" \o "" ## of teller Descartin reinforces the conclusion that the shortage
in her pico box was due to a temporary borrowing, under BPIs bank policy,

failure to report a shortage is not a ground to terminate employment. Taken


together with the attending circumstances of the case, the failure of petitioners
to report the cash shortage of teller Descartin, even if done in good faith,
nonetheless resulted in their abetting the dishonesty committed by the latter. It
is well-settled that the power to dismiss an employee is a recognized prerogative
that is inherent in the employers right to freely manage and regulate his
business. Their manifest condonation and even concealment of an offense prejudicial
to their employers interest committed by a subordinate under their supervision
reflect a regrettable lack of loyalty which they should have reinforced, instead of
betrayed. Petition is DENIED.Uniwide Sales W arehouse Club v. NLRCAmalia P. Kawada
was employed by Uniwide and was promoted to Full Assistant Store Manager in
1995.In 1998, Uniwide received reports from the other employees regarding some
problems in Kawadas departments. Uniwide, through Store Manager Apduhan, issued a
Memorandum summarizing the various reported incidents signifying unsatisfactory
performance (commingling of good and damaged items, sale of a voluminous quantity
of damaged stocks) Private respondent answered all the allegations. Unsatisfied,
Apduhan sent 2 other Memorandums# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn7" \o "" ## where Apduhan claimed that the answers given by the private
respondent were all hypothetical; and seeking from the private respondent
an explanation regarding the incidents. Private respondent sought medical help due
to complaints of dizziness.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn12" \o "" ## Finding private respondent to be suffering from hypertension,
Dr. Zambrano advised her to take five days sick leave. Dr. Zambrano mistakenly
wrote the wrong surname in the med cert which led to a shouting match between
Apduhan and Kawada which allegedly caused her to collapse.Private respondent
reported the confrontation between her and Apduhan to the Central Police District.#
HYPERLINK "http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn20" \o "" ## Apduhan issued a Memorandum advising Kawada of a hearing
and warning her that failure to appear shall constitute as waiver and the case
shall be submitted for decision based on available papers and evidence. Private
respondent filed a case for illegal dismissal before the LA.Apduhan issued a
Memorandum# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn30" \o "" ## stating that since private respondent was unable to attend the
scheduled hearing, the case was evaluated on the basis of the evidence on record;
LA# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn32" \o "" ## dismissed the complaint for lack of merit.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn33" \o "" ## Private respondent appealed the LAs decision to NLRC the NLRC
ruled in favor of private respondent, Petitioners appealed the NLRC Decision to the
CA.CA affirmed in toto the NLRC Decision. Hence, the present petition.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn38" \o "" ##The court found the petition to be meritorious. The Court agrees
with the findings of the LA that the termination of private respondent was grounded
on the existence of just cause under Article 282 (c) of the Labor Code# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn59" \o "" ## or willful breach by the employee of the trust reposed on him by
his employer or a duly authorized representative.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn60" \o "" ##Private respondent occupies a managerial position. As a
managerial employee, mere existence of a basis for believing that such employee has
breached the trust of his employer would suffice for his dismissal.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn61" \o "" ## In Caoile v. National Labor Relations Commission
managerial employee, mere existence of a basis for believing that such employee has
breached the trust of his employer would suffice for his dismissal. Hence, in the

case of managerial employees, proof beyond reasonable doubt is not required.The


irregularities and offenses committed by private respondent, corroborated by the
various pieces of evidence supporting such charges, i.e. records, reports and
testimonies of Uniwide employees,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn67" \o "" ## in the mind of the Court, constitute substantial evidence.
Although she worked for Uniwide for almost 17 years with a clean bill of record,
this is not sufficient to overcome the findings of petitioners that the private
respondent is guilty of the charges imputed to her.The September 1, 1998 Memorandum
where the private complainant was dismissed for loss of trust and confidence is
valid and complies with the due process requirement. Clearly, private respondent
was given an opportunity to be heard. However, private respondent chose not to
attend the scheduled hearing because of her mistaken belief that she had already
been constructively dismissed.Petition is GRANTED. Mitsubishi Motors Phil v.
Rolando SimonRolando Simon and Constantino Ajero (respondents) were employees of
petitioner and members of the Hourly Union.Simonwas designated as Union Chairman.
Rodolfo Siena, one of the accredited rice suppliers complained to petitioner that
respondents had extorted money from him in exchange for union protection for his
rice stores continued accreditation. He detailed that he was approached by
respondents who introduced themselves as newly elected union officers, and demanded
that he pay them P50.00 per sack of rice given to petitioners employees
threatening him that they would no longer get him as a rice supplier.
Petitioner, through its Industrial Relations Department, issued a Notice of
Disciplinary Charge with Preventive Suspension against respondents. Administrative
hearings were conducted, after which respondents were found guilty. Respondents
filed a case for illegal dismissal but their complaint was dismissed by the LA.
NLRC affirmed the LA but deleted the award of financial assistance, considering
that respondents were dismissed for cause on the ground of serious misconduct. Upon
appeal CA granted the petition. Thus this petition. The court finds for the
petitioner. According to petitioner, said act is a clear case of serious
misconduct, fraud and willful breach of trust, and disloyalty to the Company as
their employer as it sabotages the Companys Rice Subsidy Program and disrupts
the efficient administration of services and benefits to employees. Thus, they
claim that respondents betrayed not only the Company, but also the union members
whom they had sworn to serve. W e find substantial evidence to support respondents
dismissal. The core of petitioners decision to dismiss respondents is the
statements of the spouses Siena. However, testimonies are to be weighed, not
numbered; thus it has been said that a finding of guilt may be based on the
uncorroborated testimony of a single witness when the tribunal finds such
testimony positive and credible. # HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/april2008/164081.htm" \l
"_ftn22" \o "" ##W e see no reason to doubt their credibility, nor any motive for
themto make up the story. They are not employees of petitioner; even respondents
admitted that they could not think of any motive why Siena would accuse them of
extortion. Respondents denials and alibi of committing said act fall flat in the
face of the credible testimonies of the spouses Siena. Respondents acts
constitute seriousmisconduct and willful breach of trust reposed by the employer,
which are just causes for termination under the Labor Code.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/april2008/164081.htm" \l
"_ftn27" \o "" ## For serious misconduct to exist, the act complained of should be
corrupt or inspired by an intention to violate the law or a persistent disregard of
well-known legal rules.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/april2008/164081.htm" \l
"_ftn28" \o "" ## On the other hand, in loss of trust and confidence, it must be
shown that the employee concerned is responsible for the misconduct or infraction
and that the nature of his participation therein rendered him absolutely unworthy
of the trust and confidence demanded by his position.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/april2008/164081.htm" \l
"_ftn29" \o "" ## Petition is GRANTEDCommission of a CrimeArt. 282. Termination by

employer. An employer may terminate an employment for any of the following causes:
d. Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representatives; and Analogous CasesArt. 282. Termination by employer. An employer
may terminate an employment for any of the following causes:e. Other causes
analogous to the foregoing.Cathedral School of Technology v. NLRCTeresita Vallejera
aspired to be a nun in their congregation and thus she came to live with the
sisters. During her stay, she volunteered to assist as a library aide and in return
for her work she was given 200/month. Later on, she confessed to the sisters that
she no longer wanted to be an nun, she pleaded however, t that they allow her to
live with them. The sisters agreed and tasked her as a library aide with a salary
of more than 1k. The sisters then began receiving numerous complaints about her
sour disposition at work and her difficult personality both the students as well as
with her co-workers. She even managed to have the chief librarian resign She was
summoned to the office of the directress where she walked out upon hearing the
negative comments about her while saying OK I will resign The school, after trying
to settle her differences with the directress after storming out of the meeting,
was informed that her resignation has been accepted. She filed a case for illegal
dismissal and the LA ruled for her saying she was illegally dismissed. The NLRC and
the CA affirmed the decision of the LA Thus this petition. The court held that her
unreasonable behavior and unpleasant deportment in dealing with the people she
closely works with in the course of her employment, is analogous to the other just
causes enumerated under the Labor Code. It is respondents obstinate refusal to
reform herself which ultimately persuades this Court to find that her dismissal on
the ground of serious misconduct was valid.Being a Catholic School, it is expected
that good behavior and proper deportment is exercised at all times. The lack of
procedural due process in giving her notice and hearing, this does not make her
illegally dismissed. The court further held that there can be no backwages or
separation pay given that the termination was for a just cause. NLRC s decisions
annulled. Lim v. NLRCSixta Lim was employed
by the Pepsi Cola Company as a secretary since 1981 and when she was dismissed due
to low performance levels, she was already the staff accountant. Pepsi evaluated
its employees as Marginal, Fair, Commendable, Superior and Distinguished wherein
Lim rated as Superior. Later on, the Ratings were changed to Significantly Above
Target, AT, On T, Below T, Significantly BT. This time, she has rated BT since she
was poor in production reporting which was raised to 40% of the overall rating. She
was appraised negatively regarding this matter. She asked for a reappraisal which
returned with the same results. She wrote to the Mr. Yasuki Mihara of PepsiCo Japan
but before Mihara could visit the Philippines, she was asked to voluntarily resign
but she refused to do so. Petitioner was verbally informed of her termination. She
filed a complaint for dismissal without due process. The LA ruled for her. NLRC
Reversed the LA. Thus this petition. The court agrees with PEPSI that gross
inefficiency falls within the purview of other causes analogous to those enumerated
in Art 282. gross Inefficiency is related to gross neglect because both involve
specific acts of omission on the part of the employee resulting in damage to the
employer or to his business. In the case however, she was never informed of her
gross inefficiency and the brochure of PEPSI entitled Managing Performance, BT
rating does not merit a dismissal, infact, even the SBT is just a ground for
probation not termination. PEPSI did not characterize the deficiencies it
attributed to the petitioner as gross inefficiency. As for procedure, PEPSI
violated her right to due process when they served her with the notice of her
resignation but did not afford her a venue to be heard or defend herself of the
charges before her actual termination. Petition Granted.
Genuino v. NLRC +
CITIBANK v. NLRCMarilou Genuino was employed by Citibank as a Treasury Sales
Division Head. Later on, she received a letter from the bank charging her with
knowledge or involvement which was irregular or even fraudulent. Genuino asked for
a bill of particulars. She was accused of using her family corporations in order to
participate in the diversion of bank client funds from Citibank. The company set an
investigation and Genuino, who did not attend, found her guilty of using their

familys corporation Global Pacific in diversion of bank clients funds to their


products which yielded higher interests that what Citibank offered. She was
terminated on grounds of serious misconduct, willful breach f trust and commission
of crime against the bank. She filed a complaint for illegal dismissal. LA ruled
fro her reinstatement. Both parties appealed to the NLRC who ruled that the
dismissal was valid and legal. On appeal to the CA, the court dismissed both
petitions. Thus these petitions. The court held that Genuino was dismissed for just
cause but without the observance of due process since even if the bank gave Genuino
an opportunity to deny the truth of the allegations in writing and participate in
the administrative investigation, the fact remains that the charges were too
general to enable Genuino to intelligently and adequately prepare her defense.
However, the dismissal remains valid since the employer, according to Art 282 of
the LA, may terminate an employee for fraud or willful breach of trust. For loss of
trust and confidence to be a valid ground, it must be substantial and not arbitrary
and must be founded on clearly established facts but t need not be proven beyond
reasonable doubt. The evidence shows that Genuino did not have her employers
interest during these transactions. Genuinos petition dismissed. Citibank
affirmed.Other CausesAbandonmentPadilla Machine Shop v. Rufino JavilgasRufino
Javilgas was hired by Padilla Machine Shop. His work consisted of reconditioning
machines. Petitioners made regular deductions for his SSS contributions, but
sometime in 2002, he found out that his employer was not remitting the
contributions to the SSS; when he complained about the failure of his employer to
remit his SSS contributions, the latter transferred him to the Novaliches branch
office.Rodolfo Padilla called him by telephone and told him to stop working, but
without giving any reason therefor. He stopped reporting for work and sued
petitioners for illegal dismissal, Padilla (Rodolfo), proprietor of Padilla Machine
Shop, alleged that SSS and Medicare contributions were deducted from Javilgas
salary and remitted to the SSS; that in 2000, they (petitioners) submitted a report
to the SSS that Javilgas had voluntarily left and abandoned his work, some months
after, Javilgas returned and pleaded to be re-employed with them; that Rodolfo
Padilla took Javilgas back to work, but their customers were not satisfied with the
quality of his work; hence Javilgas was assigned to the Novaliches branch.He
alleged that Javilgas had opened his own machine shop and even pirated the
clients of petitioners; and finally, Javilgas again voluntarily left Padilla
Machine Shop without prior notice.LA held that Javilgas was illegally dismissed,
The NLRC found no sufficient evidence to show that Javilgas was dismissed or
prevented from reporting for work; CA reinstated decision of LA. It held that the
burden of proof is on the petitioners, to show that Javilgas was dismissed for a
valid and just cause. Thus this petition.The court found Javilgas was found to be
illiterate, as he did not even get to finish Grade School. It likewise declared as
without basis the petitioners claim that Javilgas was operating a rival machine
shop, since petitioners failed to prove with sufficient evidence the veracity of
said claim. In illegal dismissal cases, the burden of proof is on the employer to
show that the employee was dismissed for a valid and just cause.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/175960.htm" \l
"_ftn8" \o "" ## Petitioners have failed to discharge themselves of the burden.
W ith respect to Javilgas claim of illegal dismissal, petitioners merely alleged
that Javilgas did not anymore report for work. He did not elaborate or show proof
of the claimed abandonment. For abandonment to exist, it is essential (a) that the
employee must have failed to report for work or must have been absent without valid
or justifiable reason; and, (b) that there must have been a clear intention to
sever the employer-employee relationship manifested by some overt acts.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/175960.htm" \l
"_ftn10" \o "" ## The establishment of his own shop is not enough proof that
Javilgas intended to sever his relationship with his employer. Petitioners, in like
manner, consistently deny that Javilgas was dismissed from service; that he
abandoned his employment when he walked out after his conversation with Rodolfo and
never returned to work again. But denial, in this case, does not suffice; it should
be coupled with evidence to support it. In the instant case, petitioners failed to

adduce evidence to rebut Javilgas claim of dismissal and satisfy the burden of
proof required. Petition is DENIED.Big AA Manufacturer v. AntonioBig AA
Manufacturer is a sole proprietorship registered in the name of its proprietor,
Enrico E. Alejo who fired the respondents due to abandonment. Respondents filed a
complaint with the LA for illegal lay-off and illegal deductions saying that they
worked from 8:00 a.m. to 5:00 p.m. at petitioners office manufacturing company
using petitioners tools and equipment and they received P250 per day. Big AA
denied that respondents were its regular employees. It claimed that Eutiquio
Antonio was one of its independent contractors who used the services of the other
respondents. It said that its independent contractors were paid by results and were
responsible for the salaries of their own workers. Allegedly, it allowed
respondents to use its facilities to meet job orders. It also claimed that the
workers are project employees only. It added that since Eutiquio Antonio had
refused a job order of office tables, their contractual relationship ended. LA
ruled against petitioners. Both appealed to NLRC. Respondents appealed for not
ordering their reinstatement to their former positions. The NLRC modified the Labor
Arbiters decision. It ordered petitioner to reinstate respondents to their former
positions or to pay them separation pay in case reinstatement was no longer
feasible, with full backwages in either case. The NLRC ruled that respondents were
regular employees, not independent contractors. It further held that petitioner
failed to justify its reason for terminating respondents and its failure to comply
with the due process requirements. CA affirmed NLRC ruling. Thus this petition. The
court found that respondents were employed for more than 1 year and their work as
carpenters was necessary or desirable in petitioners usual trade or business of
manufacturing office furniture. Under Art. 280 of the Labor Code, the applicable
test to determine whether an employment should be considered regular or non-regular
is the reasonable connection between the particular activity performed by the
employee in relation to the usual business or trade of the employer. Also, the
court found that respondents cannot be considered project employees. Petitioner had
neither shown that respondents were hired for a specific project the duration of
which was determined at the time of their hiring nor identified the specific
project or phase thereof for which respondents were hired.The court also held that
they were illegally dismissed. The consistent rule is that the employer must
affirmatively show rationally adequate evidence that the dismissal was for a
justifiable cause, failing in which would make the termination illegal, as in this
case.
Contrary to petitioners claim of abandonment as a valid just cause for
termination, herein respondents did not abandon their work. Petitioner failed to
prove that (1) not only of respondents failure to report for work or absence
without valid reason, but (2) also of respondents clear intention to sever
employer-employee relations as manifested by some overt acts.By filing the
complaint for illegal dismissal within two days of their dismissal and by seeking
reinstatement in their position paper, respondents manifested their intention
against severing their employment relationship with petitioner and abandoning their
jobs. It is settled that an employee who forthwith protests his layoff cannot be
said to have abandoned his work. Petition denied.Nueva Ecija Electric Corp v. NLRC
Nueva Ecija Electric Cooperative (NEECO) II employed private respondent Eduardo M.
Cairlan in 1978 as driver. Danilo dela Cruz, petitioners General Manager,
terminated private respondents services on ground of abandonment. Immediately
thereafter, private respondent talked with Mr. dela Cruz regarding this and dela
Cruz promised that he would talk to the Board of Directors about it, which he never
did thus Cairlan filed a complaint for illegal dismissal with prayer for
reinstatement and payment of backwages. Dela Cruz said that since he assumed the
position of General Manager he never saw Cairlan also, that he sent a memorandum to
Cairlan asking him to report for duty. Dela Cruz also said that upon investigation,
he found that Cairlan has been working for the Provincial Government of Nueva Ecija
under a different name. LA rules that he was illegally dismissed. NLRC dismissed
for lack of merit. Court of Appeal upheld the decisions of the NLRC and the Labor
Arbiter. Thus this petition. As for the due process issue, the court ruled that the

Labor Arbiter is given the latitude to determine the necessity for a formal hearing
or investigation, once the position papers and other documentary evidence of the
parties have been submitted before him.As for the issue of illegal dismissal, the
memorandum was not found in the records and the claim of him working for another
was not sufficiently proven by evidence. The court found that petitioner miserably
failed to establish the fact of abandonment to justify private respondents
dismissal. The evidence submitted by petitioner to buttress its allegation that
private respondent abandoned his work consists merely of indexes of payments to
employees under the name Eduardo Caimay without any further evidence showing that
Eduardo Caimay and private respondent Eduardo Cairlan. Abandonment is the
deliberate and unjustified refusal of an employee to resume his employment; it is a
form of neglect of duty hence, a just cause for termination of employment by the
employer under Article 282 of the Labor Code.Cairlan is entitled to reinstatement
without loss of seniority rights and other privileges and full backwages. Petition
is hereby DENIED. Courtesy ResignationBatongbacal v. Associatied BankBienvenido R.
Batongbacal, a lawyer, appointed assistant vice-president of Rizal Devt Bank. The
bank merged with Associated Banking Corporation and here, the petitioner resumed
his position as assistant VP. More than six years later or in March, 1982,
petitioner learned that the salary and allowances he was receiving were very much
below the standard remuneration of the bank's other assistant vice presidents. He
wrote the bank's board of directors asking foe the money due him. Bank's board of
directors met and approved the resolution asking all those with the rank of manager
or higher to submit their courtesy resignations due to the DEW EY DEE scandal.
Petitioner did not submit his courtesy resignation but was later on set a letter
thanking him for his service and saying that his resignation has been accepted. He
filed a complaint for illegal dismissal. LA upheld the petitioner's arguments and
claims. NLRC found the petitioner's dismissal valid. Thus this petition.The court
said that to "streamline" its operation, the new management of the bank called upon
all its employees to submit their courtesy resignations and considered all
executive positions vacant. However, by directing its employees to submit letters
of courtesy resignation, the bank in effect forced upon its employees an act which
they themselves should voluntarily do. Resignation means voluntary relinquishment
of a position or office. The court added that Batongbacals dismissal was effected
through a letter "accepting" his resignation and based on the pleadings, also
because of insubordination in view of his failure to comply with the order to
submit his letter of courtesy resignation. The court held that insubordination may
not be imputed to one who refused to follow an unlawful order.As to the salary, the
NLRC merely relied on the presumption that Batongbacal is a management employee.
Thus, the case is remanded to the NLRC to determine W ON he is a management
employee.(212(k) of the Labor Code defines a managerial employee as "one who is
vested with powers or prerogatives to lay down and execute management policies
and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees, or to effectively recommend such managerial actions."(Policy
Instructions No. 8 which was issued by the then Secretary of Labor and which took
effect on April 23, 1976, managerial employees are those (1) who have the power to
lay down management policies; (2) who have the power to hire, fire, demote,
promote, etc.; and (3) who have the power to recommend effectively (1) and (2).
Change of OwnershipManlimos v. NLRCSuper Mahogany Plywood Corporation hired
petitioners as patchers, taper-graders, and receivers-dryers. A new
owner/management group headed by Alfredo Roxas acquired complete ownership of the
corporation. The petitioners were advised of such change of ownership and thus they
were terminated. The new owner published a notice for the hiring of workers. The
petitioners then filed their applications for employment and were hired on
probationary basis for six months as patchers or tapers, but were compensated on
piece-rate or task basis.For their alleged absence without leave, Perla Cumpay and
Virginia Etic were considered, as of 4 May 1992, to have abandoned their work. The
others, were considered as not up to the standards of production of the company.
They were all dismissed. They filed a complaint for illegal dismissal. LA ruled for
the employees saying that the transfer of ownership partook of a cessation of

business operation not due to business reverses under Article 283 of the Labor Code
and the following requisites must be complied with before the dismissal of
employees may be effected: (1) service of a written notice to the employees and to
the Ministry of Labor and Employment (MOLE) at least one month before the intended
date thereof, (2) the cessation of or withdrawal from business operations must be
bona fide in character; and (3) payment to the employees of termination pay
amounting to at least one half month pay for each year of service or one month pay
whichever is higher.The Labor Arbiter ruled that the first and third requisites
were present in this case. NLRC reversed LA saying that the general rule is that
"(C)hange of ownership or management of a business establishment or enterprise
however, is not one of the just causes x x x terminate employment without a
definite period." Thus, "an innocent transferee of a business has no liability to
the employees of the transfer or to continue employing them hiring of employees on
probationary basis is an exclusive management prerogative. subsequent hiring of
complainants on probationary basis by the new management/corporate owners being the
prerogative of management must be sustainedAs probationary employees, they are
therefore on trial to afford new management to determine whether or not they would
qualify for permanent employment. In the case at bar, the change in ownership of
the management was done bona fide. Because the transfer was in good faith, the
transferee is under no legal duty to absorb the transferor's employees as there is
no law compelling such absorption. Thus, the employees have been validly dismissed.
As to Cumpay and Etic, however, they should have been accorded the constitutional
protection of security of tenure such that they may only be terminated for just
cause. Petition is partly GRANTED (as to Cumpay and Etic only. Elecee Farms Inc. v.
NLRCElcee Farms entered into a Lease Agreement with Garnele Aqua Culture
Corporation (Garnele).Garnele sub-leased Hacienda Trinidad to Daniel Hilado, who
operated HILLA. The contract of lease executed between Garnele and HILLA stipulated
the continued employment of 120 of the former employees by the latter, but the
contract was silent as to the benefits which may accrue to the employees Soon after
HILLA took over it entered into a CBA with another union and due to their refusal
to join the labor union, the private respondents were terminated by HILLA. Pampelo
Semillano and one hundred forty-three (143) other complainants, represented by
their labor union, Sugar Agricultural Industrial Labor Organization (SAILO), filed
this complaint for illegal dismissal. Labor Arbiter dismissed their claim for
damages and denied all claims. Complainants appealed and NLRC affirmed the amount
awarded by the Labor Arbiter as separation pay. The three sets of parties (1) the
complainants; (2) Elcee Farms and Corazon Saguemuller; and (3) HILLA filed their
own Motions for Reconsideration. The NLRC ruled that the simulation of the lease
agreement between Elcee Farms and Garnele was made in bad faith. Thus this
Petition for Certiorari.The court held that the above findings show that even after
the execution of the lease agreement between
Elcee and Garnele, Elcee continued to act as the employer of the farm workers of
Hacienda Trinidad. Elcee Farms effectively ceased to operate and manage Hacienda
Trinidad when, through Garnele, it leased the hacienda to HILLA. After the said
lease was executed, the employer-employee relationship between the farm employees
and Elcee Farms was severed. The lease agreement between Garnele and Daniel Hilado
identified the employees who will continue working with the new management and
stipulated that workers who were not in the list, whether new or employed in the
past, will not be employed by the lessee. Clearly, there was a cessation of
operations of Elcee Farms, which renders it liable for separation pay to its
employees, under Section 283 of the Labor Code. In a similar case, Abella v.
National Labor Relations Commission, the Court ruled that an employer whose lease
agreement had already expired, and therefore no longer manages and controls the
hacienda, is still required to pay the separation pay. But although they were
absorbed by the new management of the hacienda, in the absence of any showing that
the latter has assumed the responsibilities of the former employer, they will be
considered as new employees. Petition is partially granted. (modification: Corazon
Saguemuller should not be held subsidiarily liable)Habitual AbsenteeismManila
Electric Co v. NLRCJeremias Cortez, Jr. was employed on probationary status by

Meralco as a lineman driver. Cortez service with petitioner is his perennial


suspension from work and he was found to have grossly neglected his duties by not
attending to his work as lineman. He filed a complaint for illegal dismissal
against petitioner.LA dismissed the case for lack of merit. NLRC set aside the
decision of the Labor Arbiter and ordered petitioner to reinstate respondent with
backwages. Hence, this petition. The court held that the regulation of manpower by
the company clearly falls within the ambit of management prerogative. This court
had defined a valid exercise of management prerogative as the employer being free
to regulate, according to his own discretion and judgment, all aspects of
employment. The nature of Cortez job as a lineman-driver requires his physical
presence to minister to incessant complaints often faulted with electricity. In
the case at bar, it was established that complainant violated respondents Code on
Employee Discipline, not only once, but ten (10) times and an employees habitual
absenteeism without leave, which violated company rules and regulation is
sufficient to justify termination from the service. The petition is GRANTED. RB
Michael Press v. Nicasio GalitGalit was employed by petitioner R.B. Michael Press
as an offset machine operator and he was tardy for a total of 190 times and was
absent without leave for a number of days. W hen he was ordered to render overtime
service in order to comply with a deadline, he refused to do so, supposedly because
he was not feeling well. And so her was told not to work, and to return later in
the afternoon for a hearing. In the hearing, respondent was terminated from
employment. Galit filed a complaint for illegal dismissal. LA found him to be
illegally dismissed. NLRC affirmed the LA. CA affirmed the NLRC. Petitioners aver
that Galit was dismissed due to the following offenses: (1) habitual and excessive
tardiness; (2) commission of discourteous acts and disrespectful conduct when
addressing superiors; (3) failure to render overtime work despite instruction to do
so; and (4) insubordinationThe court held that habitual tardiness is a form of
neglect of duty. Lack of initiative, diligence, and discipline to come to work on
time everyday exhibit the employees deportment towards work. The fact that the
numerous infractions of respondent have not been immediately subjected to sanctions
cannot be interpreted as condonation of the offenses or waiver of the company to
enforce company rules. For willful disobedience to be a valid cause for dismissal,
these two elements must concur: (1) conduct must have been characterized by a
wrongful and perverse attitude; and (2) the order violated must have been
reasonable, lawful, made known to the employee, and must pertain to the duties
which he had been engaged to discharge. In the present case, there is no question
that petitioners order for respondent to render overtime service to meet a
production deadline complies with the second requisite and that the excuse he used
will not hold water as not evidence was shown to support it. CA REVERSEDFixed Term
EmploymentMedenilla v. PVBBecause of the liquidation of Philippine Veterans banks,
petitioners were terminated but were rehired on the condition that the employment
shall be strictly on a temporary basis and only for the duration of the particular
undertaking. Petitioners received a uniform notice of dismissal containing the
reasons justifying the termination. The petitioners instituted a case for illegal
dismissal. LA came out with a decision declaring petitioners' dismissal illegal.
NLRC reversed the decision of the LA and dismissed the Complaints for lack of
merit. Thus this petition.The court held that the important features of the
contract were that the employment shall be on a strictly temporary basis and only
for the duration of the particular undertaking for which he was hired and only for
the particular days during which actual work is available. The Court has repeatedly
upheld the validity of fixed-term employment. Guidelines by which fixed contracts
of employment can be said NOT to circumvent security of tenure, are either:1. The
fixed period of employment was knowingly and voluntarily agreed upon by the
parties, without any force, duress or improper pressure being brought to bear upon
the employee and absent any other circumstances vitiating his consent2. It
satisfactorily appears that the employer and employee dealt with each other on more
or less equal terms with no moral dominance whatever being exercised by the former
on the latter.The employment contract entered into by the parties herein appears to
have observed the said guidelines since the termination of petitioners' employment

was in line with the objective of the Central Bank of the Philippines to reduce
costs and expenses in the liquidation of closed banks. In cases of illegal
dismissal, the burden is on the employer to prove that there was a valid ground for
dismissal. Mere allegation of reduction of costs without any proof to substantiate
the same cannot be given credence by the Court. As the respondents failed to rebut
petitioners evidence, the irresistible conclusion is that the dismissal in
question was illegal. As held by this Court, if the contract is for a fixed term
and the employee is dismissed without just cause, he is entitled to the payment of
his salaries corresponding to the unexpired portion of the employment contract. But
because PVB is already liquidated, cannot be reinstated. Petition is PARTLY
granted. Pamantasan ng Lungsod ng Maynila v. Civil Service Commission16 individual
private respondents were full-time instructors of PLM under "temporary contracts"
of employment renewable on a yearly basis. They were given uniform notices of
termination informing them of "the expiration of their temporary appointments and
that their retention was not recommended by their respective Deans. Respondents
filed a complaint for illegal dismissal and unfair labor practice against
petitioner with the Public Sector Labor-Management Council 1 ("PSLMC"). PLM denied
having committed any unfair labor practice or having illegally dismissed private
respondents. In its defense, PLM interposed (1) the temporary nature of private
respondents' contracts of employment and (2) reasons that could justify the nonrenewal of the contracts. PSLMC found petitioner guilty of "Unfair Labor Practice"
PSLMC transmitted the case to the CSC for appropriate action who then held that the
findings of PSLMC are entitled to respect and there is no need to conduct an
investigation of their own, sustaining the findings of the PSLMC. Thus this
petition. The court held that unfair labor practice charge and the complaint for
illegal dismissal both filed by private respondents are linked since the nonrenewal of an employment contract with a term, it is true, is ordinarily a valid
mode of removal at the end of each period. This rule, however, must yield to the
superior constitutional right of employees to self-organization. W hile, a temporary
employment may be ended with or without cause, it certainly may not, however, be
terminated for an illegal cause. PSLMC found that on two occasions, PLM was
directed to produce the evaluation results of the 16 complainants, evidence points
to the fact that PLM seeks to remove their employees that have been appointed as
officers of the union. The finding of the PSLMC that the non-renewal by petitioner
of the questioned contracts of employment had been motivated by private
respondents' union activities is conclusive on the parties. Petition for certiorari
is DISMISSED Past OffensesJanssen Pharmaceuticals v. SilayroJanssen employed
Benjamin Silayro as a Medical Representative. During his employment, respondent
received from petitioner several awards and citations and a Nomination as one of
the Ten Outstanding Philippine Salesmen but he was also investigated and was found
guilty of several administrative charges. A Notice of Disciplinary Action was
issued finding respondent guilty of(1) delayed submission of process reports, for
which he was subjected to a one-day suspension without pay, and(2) cheating in his
ROL test, for which he was subjected again to a one-day suspension.#A Notice of
Preventive Suspension against respondent was also issued for(1) Failure to turn
over company vehicles assigned after the receipt of
instruction to that effect from superiors, and (2) Refusing or neglecting to obey
Company management orders to perform work without justifiable reason.#Silayro was
terminated and thus he filed a complaint for illegal dismissal. LA ruled that he
breached company rules, and which were sufficient grounds for dismissal but found
that the penalty of dismissal is too harsh and recommended his reinstatement. NLRC
declared that reinstatement was improper where respondent was dismissed for just
and authorized causes. CA affirmed LA decision. Thus this petition. The court ruled
that to constitute a valid dismissal from employment, two requisites must concur:
(1) the dismissal must be for any of the causes provided in Article 282 of the
Labor Code; and,(2) the employee must be given an opportunity to be heard and to
defend himself.#Petitioner had not been able to identify an act of dishonesty,
misappropriation, or any illicit act, which the respondent may have committed in
connection with the erroneously reported product samples. As for the three other

offenses, Silayro already admitted to them. The court said that even if the
respondent was already punished for the three prior infractions, these offenses,
among other offenses, may still be used as justification for his dismissal. The
court found him negligent in preparing his reports and he was guilty of giving free
samples and in answering the ROL exam. However, the records show that in the same
year it was committed, in 1994, petitioner still gave respondent two awards (5 year
service and W ild Boar Arard) Also, the rest of the infractions were committed
during the time he was undergoing serious family problems. As for the ROL exam, the
court found him guilty of such but ratiocinated that his inability to comply with
the deadlines for his process reports are the result of his preoccupation with very
serious problems and that due consideration must be given because of the ill
fortune that befell a normally excellent employee. The petitioner had not shown
that during his employment, respondent took a willfully defiant attitude against
it. It also failed to show a pattern of negligence which would indicate that
respondent is incapable of performing his responsibilities. Petition is DISMISSED.
Silayro subjected to 5 months suspension without pay.Ramoran v. Jardine CMGVirginia
Ramoran started working with Jardine as an accounting clerk and later on was
promoted to junior accountant with Antonio Robles as her immediate supervisor. The
HRD noticed some irregularities in the overtime slips submitted by Ramoran and upon
confirmation of its invalidity with Robles, petitioner was terminated from
employment. Petitioner stated that she just wanted to catch up with work backlog
caused by her serving a previous penalty of suspension for tampering with the
receipt for her 6K glasses (she bought P100 worth contacts lang naman talaga) and,
for that reason, she did not immediately file her OT authorization slips and
submitted only when she was reminded by the HRD.On the other hand, Robles,
consistently denied having signed and approved the OTShe filed a complaint of
illegal dismissal. Jardine filed a complaint with the Arbitration Board of the
National Labor Relations Commission. Jardine also filed a criminal complaint
against petitioner. LA dismissed the case. The MTC acquitted her of the crime.
Believing that the decision of the Panel of Voluntary Arbitrators may now be
overturned following her acquittal in the two criminal cases filed against her,
petitioner filed with CA. Hence, this petition.The court held that conclusions of
voluntary arbitrator (or a panel as in this case) when they are sufficiently
corroborated by the evidence on record, should be respected by appellate tribunals.
It should be noted that the panel did not have the benefit of examining the other
evidence apparently adduced by RAMORAN. Even if the trial court found the same
documentary evidence to be inadequate to sustain Ramoran's conviction, by no means
does it prevent the panel from considering the evidence sufficient to warrant
dismissal.The authorized time must be indicated in the overtime authorization for
the purpose of establishing and limiting the basis of overtime to be performed by
an employee. After the same was signed by Mr. Robles she entered her alleged
overtime. Also, due to her previous infraction with the company causing her
suspension, she was already issued a memorandum, warning her that "any future
violation of the same nature, irrespective of the time frame that it is repeated or
committed, would result in the imposition of the maximum penalty of dismissal."
Dismissal on the basis of loss of trust and confidence calls for substantial
evidence and in the instant case, petitioner was apprised of the charges against
her but petitioner offers no evidence to disprove her accusation.Petition is hereby
DENIED.Habitual InfractionsGustilo v. W yeth PhilGustilo was employed by W yeth Phils
Inc. as a pharmaceutical territory manager and among his tasks was submitting
periodic reports of his daily call visits, monthly itinerary and weekly locator and
expenses but he was often suspended or reprimanded for neglecting to submit his
periodic reports.- W yeth put Gustilo in charge of promoting 4 Lederle (W s sister
company) pharmaceutical products. G then submitted to W a plan of action but
Gustilo failed to achieve his objectives so W sent him 2 notices charging him with
willful violation of company rules and regulations and directed him to submit a
written explanation. G explained that he was overworked and an object of reprisal
by his immediate supervisor. W yeth, upon the recommendation of a review panel,
terminated Gustilos services.G filed a complaint for illegal dismissal. LAfound

that G was illegally dismissed. NLRC- affirmed. W s MR was denied. CA- reversed
NLRCs decision and dismissed Gs complaint for illegal dismissal (as G was
terminated based on A282 of the LC-gross and habitual neglect by the employee of
his duties) but awarded him separation pay considering the Gustilo isnt entitled
to his SP OR to reinstatement as there was a just cause for dismissal. - Piedad v
Lanao del Norte Electric Cooperative, Inc.- a series of irregularities when put
together may constitute serious misconduct, which under A282 of the LC, as amended,
is a just cause for dismissal.- The rule embodied in the Omnibus Rules Implementing
the Labor Code is that a person dismissed for cause as defined therein is not
entitled to separation pay.In the case at bar, there is NO exceptional
circumstances to warrant the grant of financial assistance or separation pay to
petitioner. G did not only violate company disciplinary rules and regulations. He
falsified his employment application form by not stating therein that he is the
nephew of Mr. Danao, respondent W yeths Nutritional Territory Manager. G manifested
his slack of moral principle through his infractions. In simple terms, he is
dishonest. Petition is DENIEDImmoralitySantos v. NLRCJose Santos and Arlene T.
Martin both married to different people and employed by the same school Hagonoy
Institute Inc. fell in love with each other. Rumors of their affair spread and
prompted the school officials to inquire about the matter. She was asked to take a
leave of absence but she continued to work and was eventually terminated by force.
Martin filed a compliant for illegal dismissal. LA dismissed petition. NLRC
reversed the petition because of lack of due process. Meanwhile, Santos was
charged administratively for immorality and was dismissed from service. he filed a
complaint for illegal dismissal. LA dismissed complaint but awarded monetary sums
as financial assistance. NLRC dismissed appeal and removed the awards. Thus this
petition.The court upheld the NLRC saying that in order to constitute a valid
dismissal, two requisites must concur: (a) the dismissal must be for any of the
causes expressed in Art. 282 of the Labor Code, and (b) the employee must be
accorded due process, basic of which are the opportunity to be heard and defend
himself.Also, under Section 94 (E) of the Manual of Regulations for Private
Schools: is says that school personnels, including faculty, may be terminated for
disgraceful or immoral conduct. The court held that teachers must adhere to the
exacting standards of morality and decency. There is no dichotomy of morality and
when a teacher engages in extra-marital relationship, especially when the parties
are both married, such behavior amounts to immorality, justifying his termination
from employment.In this case, the burden of proof rests upon the employer to show
that the dismissal was for a just and valid cause and the testimonies of nine
witnesses (a fourth year student, a security guard, a janitor and six co-teachers)
as well as the absence of any motive on their part to falsely testify against the
petitioner led to the courts decision to dismiss petition.
Conviction or
Commission of a Crime Sampaguita Garments Corp v. NLRCEmilia Santos, an employee of
petitioner Sampaguita Garments Corporation was charged with theft for attempting to
bring out of the company premises a piece of cloth belonging to the petitioner. She
was dismissed and so she filed a complaint for illegal dismissal LA ruled for the
company and the decision was reversed by the NLRC, which ordered her reinstatement.
Sampaguita also filed a criminal action against Santos. After trial, she was found
guilty Court dismissed the petition for certiorari against the decision of the
NLRC. The decisions in both cases became final and executory; the petitioner
opposed, invoking her conviction in the criminal case. However, the NLRC sustained
her on the ground that its decision had long become final and executory. Thus this
petition. The court held that even if once a judgment
has become final and executory, it can no longer be disturbed but reinstatement is
no longer feasible in view of the subsequent conviction of the private respondent.
A contrary rule would have the effect of rewarding rather than punishing the erring
employee for his offense. The punishment is not dismissal only because if the
employee who steals from the company is granted separation pay even as he is
validly dismissed, he might commit a similar offense in the future. Santos
conviction of the crime of theft of property belonging to the petitioner has
affirmed the existence of a valid ground for her dismissal and thus removed the

justification for the decision ordering her reinstatement with back wages. Petition
is GRANTED. Eduardo Bughaw Jr. v. Treasure Island IndustrialEduardo Bughaw was
employed as production worker by Treasure Island. Erlito Loberanes (Loberanes), who
was caught in flagrante delicto by the police officers in possession of shabu
implicated Bughaw as providing him the money to buy the illegal drugs. Treasure
Island served a Memo for Explanation# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/173151.htm" \l "_ftn6"
\o "" ## to Bughaw but he failed to appear before the counsel during the hearing
date to explain his side. A second letter was sent to him asking him to attend an
administrative hearing but he failed to show up. A third letter as issued
terminating the services of the petitioner. Bughaw filed a complaint for illegal
dismissal. He claimed that he was suspended for 30 days based on the unfounded
allegation of his co-worker that he used illegal drugs within company premises and
that when he reported back to work he was no longer allowed to enter the work
premises and was told not to report back to work. LA ruled in favor of Bughaw
saying that the company failed to substantiate the charge against him. NLRC
affirmed the decision of the LA saying that Treasue Island failed to accord due
process to petitioner when it dismissed him from employment and that the use of
illegal drugs can be a valid ground for terminating employment only if it is proven
true. An accusation of illegal drug use, standing alone, without any proof or
evidence presented in support thereof, would just remain an accusation. CA reversed
NLRC saying that the petitioner# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/173151.htm" \l
"_ftn12" \o "" ## was afforded the opportunity to explain and defend himself from.
Hence this petition. The court ruled that the requirements for the lawful dismissal
of an employee are two-fold, the substantive and the procedural aspects.2 facets
of a valid termination of employment are: (a) the legality of the act of dismissal,
i.e., the dismissal must be under any of the just causes provided under Article 282
of the Labor Code; and (b) the legality of the manner of dismissal, which means
that there must be observance of the requirements of due process. Loberaness
statements given to police during investigation is evidence which can be considered
by the respondent against the petitioner. Bughaw failed to controvert Loberanes
claim that he too was using illegal drugs through the administrative hearings which
were set. The respondent cannot be faulted for considering only the evidence at
hand, which was Loberanes statement. The burden therefore is on respondent to
present clear and unmistakable proof that petitioner was duly served a copy of the
notice of termination. The Agabon v. NLRC doctrine enunciates the rule that if the
dismissal was for just cause but procedural due process was not observed, the
dismissal should be upheld. W here the dismissal is for just cause the lack of
statutory due process should not nullify the dismissal or render it illegal or
ineffectual. Petition is DENIED. Qualification RequirementsSantos + St Lukes
Medical Center Employees Association AFW v. St. LukesMaribel Santos was hired as XRay Technician in the Radiology department of St. Lukes Medical Center. At this
time, congress passed and enacted RA 7431 known as the Radiologic Technology Act
of 1992 which requires radiology and/or x-ray technologists in the Philippines to
get a proper certificate of registration from the Board of Radiologic Technology.
Director of the Institute of Radiology issued a final notice to petitioner Maribel
S. Santos requiring her to comply with RA 7431. Another memorandum to petitioner
Maribel S. Santos advising her that only a license can assure her of her continued
employment at the Institute of Radiology of the private respondent SLMC. A month
later, Santos was imformed that the management of private respondent SLMC has
approved her retirement in lieu of separation pay. She filed a complaint for
illegal dismissal. LA ruled for Santos ordering SLMC to pay her separation pay but
denied all her other requests. NLRC and CA affirmed the LA. Thus this petition. The
court held that in section 2 of RA 7431, it clearly states that: Sec. 2. Statement
of Policy. It is the policy of the State to upgrade the practice of radiologic
technology in the Philippines for the purpose of protecting the public from the
hazards posed by radiation as well as to ensure safe and proper diagnosis,
treatment and research through the application of machines and/or equipment using

radiation.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/march2007/162053.htm" \l
"_ftn11" \o "" ##And that the enactment of R.A. 7431 is an exercise of the States
inherent police power. No malice or ill-will can be imputed upon private respondent
as the separation of petitioner Santos was undertaken by it conformably to an
existing statute. It is undeniable that her continued employment without the
required Board certification exposed the hospital to possible sanctions and even to
a revocation of its license to operate. Private respondent is free to determine,
using its own discretion and business judgment, all elements of employment, "from
hiring to firing" except in cases of unlawful discrimination or those which may be
provided by law. None of these exceptions is present in the instant case.
Furthermore, the records show that Ms. Santos did not even seriously apply for
another position in the company. Petition is DENIED Constructive DismissalUniwide
Sales v. NLRC supra 23Amalia P. Kawada was employed by Uniwide and was promoted to
Full Assistant Store Manager in 1995.In 1998, Uniwide received reports from the
other employees regarding some problems in Kawadas departments. Uniwide, through
Store Manager Apduhan, issued a Memorandum summarizing the various reported
incidents signifying unsatisfactory performance (commingling of good and damaged
items, sale of a voluminous quantity of damaged stocks) Private respondent answered
all the allegations. Unsatisfied, Apduhan sent 2 other Memorandums# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn7" \o "" ## where Apduhan claimed that the answers given by the private
respondent were all hypothetical; and seeking from the private respondent an
explanation regarding the incidents. Private respondent sought medical help due to
complaints of dizziness.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn12" \o "" ## Finding private respondent to be suffering from hypertension,
Dr. Zambrano advised her to take five days sick leave. Dr. Zambrano mistakenly
wrote the wrong surname in the med cert which led to a shouting match between
Apduhan and Kawada which allegedly caused her to collapse.Private respondent
reported the confrontation between her and Apduhan to the Central Police District.#
HYPERLINK "http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn20" \o "" ## Apduhan issued a Memorandum advising Kawada of a hearing
and warning her that failure to appear shall constitute as waiver and the case
shall be submitted for decision based on available papers and evidence. Private
respondent filed a case for illegal dismissal before the LA.Apduhan issued a
Memorandum# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn30" \o "" ## stating that since private respondent was unable to attend the
scheduled hearing, the case was evaluated on the basis of the evidence on record;
LA# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn32" \o "" ## dismissed the complaint for lack of merit.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn33" \o "" ## Private respondent appealed the LAs decision to NLRC the NLRC
ruled in favor of private respondent, Petitioners appealed the NLRC Decision to the
CA.CA affirmed in toto the NLRC Decision. Hence, the present petition.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn38" \o "" ##The court found the petition to be meritorious. Court finds the
records bereft of evidence to substantiate the conclusions of the NLRC and the CA
that private respondent was constructively dismissed from employment.Case law
defines constructive dismissal as a cessation of work because continued employment
is rendered impossible, unreasonable or unlikely; when there is a demotion in rank
or diminution in pay or both; or when a clear discrimination, insensibility, or
disdain by an employer becomes unbearable to the employee.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn44" \o "" ## The test of constructive dismissal is whether a reasonable person
in the employees position would have felt compelled to give up his position under
the circumstances.# HYPERLINK

"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn45" \o "" ## It is an act amounting
to dismissal but made to appear as if it were not. (dismissal in disguise.) The
law recognizes and resolves this situation in favor of employees in order to
protect their rights and interests from the coercive acts of the employer.#
HYPERLINK "http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn46" \o "" ##In the present case, private respondent claims that she had been
subjected to constant harassment, ridicule and inhumane treatment by Apduhan. The
Court finds that private respondents allegation of harassment is a specious
statement which contains nothing but empty imputation. Bare allegations of
constructive dismissal, when uncorroborated by the evidence on record, cannot be
given credence in court.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn51" \o "" ## # HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/154503.htm" \l
"_ftn52" \o "" ##Petitioners gave private respondent successive memoranda so as to
give the latter an opportunity to explain herself. The memoranda are not forms of
harassment, but petitioners compliance with the requirements of due process.As to
the September 1, 1998 Memorandum where the private complainant was dismissed for
loss of trust and confidence, the Court finds the notice of the scheduled August
12, 1998 hearing sufficient compliance with the due process requirement. Respondent
was given an opportunity to be heard. However, private respondent chose not to
attend the scheduled hearing because of her mistaken belief that she had already
been constructively dismissed. The court adopts the findings of the LA: In fact,
as it even appears the constructive dismissal allegedly committed on complainant
looks simply an excuse to avoid and/or evade the investigation and consequences of
the violations imputed against her while employed and/or acting as respondents
assistant store manager.Petition is GRANTED. Duldulao v. CA supra 21Constancia
Duldulao was hired by Baguio Colleges Foundation as a secretary or clerk typist in
their College of Law. A law student filed a case against her for irregularities in
the performance of her work as well as fraternizing with students of the College.
The petitioner was asked to submit her answer to the complaint but she failed to do
so. The Dean recommended her assignment outside the College of Law because of this,
the Vice President of Administration issued a Department Order asking her to move
to the highschool. She filed a motion to extend her answer with the dean which was
not allowed as the matter was already elevated to the Executive Board. The
petitioner filed a case with the BCF Grievance Committee but the case was
transferred to the Administrative Investigating Committee who found the Department
Order appropriate since it was intended to prevent to prevent the controversy from
affecting the harmonious relationship within the College of Law. The respondednt
constituted a Fact Finding Committee to investigate the allegations concerning the
administrative matters and found the petitioner guilty of the charges against her.
The petitioner did not report for work and instead took a vacation leave and
several other leave of absences. Petitioner then finally filed a complaint for
constructive dismissal. She claimed that she was arbitrarily asked to transfer from
her place of work which is far from her original place of assignment. LA ruled in
Duldulaos favor. NLRC reversed LA saying that petitioner was neither demoted nor
dismissed and her salary remained he same. CA upheld the NLRC. Thus this petition
saying that the constructive dismissal was tainted in bad faith and that it was
intended as a punishment. The court held that there is constructive dismissal if
an act of clear discrimination, insensibility or disdain by an employer becomes so
unbearable on the part of the employee that it would foreclose any choice by him
except to forego his continued employment. It exists when there is cessation of
work because continued employment is rendered impossible, unreasonable or unlikely
as an offer involving a demotion in rank and a dimunition in pay.The court held
that at the onset, the petitioner has no vested tight to the position of
secretary/clerk typist to the college of law because petitioner was employed not by
the college but the BCF system itself and thus, BCF can exercise its management
prerogative, transfer her to any of the departments as long as the transfer does

not result in a demotion in rank or diminution in benefits or salary of the


employee. In this case, she merely had to change the route she took for her new
assignment, almost the same distance from her house as that of her job in the
college of law. The court ruled that the transfer is not as a penalty but a
preventive measure to avoid further damage to the college. Petitioner cannot claim
constructive dismissal simply becaue her transfer to another department was against
her wishes. Petition denied. TransferNorkis Trading Co v. Melvin GniloMelvin Gnilo
held various positions in the company until he was appointed as Credit and
Collection Manager. A special audit team was conducted and Gnilo admitted his
negligence for the monthly collection reports of his subordinates which were all
overstated. Norkis placed him in a 15 day suspension. Another memorandum# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/159730.htm" \l
"_ftn6" \o "" ## was issued to him to report to the head office for a re-training
or a possible new assignment. Petitioner requsted that he be assigned as Sales
Engineer or to any position commensurate with his qualifications. However, he was
appointed as Marketing Assistant. He filed a complaint for illegal dismissal with
the LA who dismissed the case for lack of merit. NLRC reversed the LA. The NLRC
ruled that respondent was constructively dismissed and therefore he was entitled to
reinstatement. CA affirmed the NLRC. Thus this petition. Petitioners submit that
the positions of Credit and Collection Manager and Marketing Assistant does not
constitute demotion, since respondent's position is more encompassing and vital to
the company and he is receiving the same salary. W ell-settled is the rule that it
is the prerogative of the employer to transfer and reassign employees for valid
reasons and according to the requirement of its business however, the employer
bears the burden of showing that the transfer is not unreasonable, inconvenient or
prejudicial to the employee; and does not involve a demotion in rank or a
diminution of his salaries.Constructive dismissal is defined as a quitting because
continued employment is rendered impossible, unreasonable or unlikely; when there
is a demotion in rank or a diminution of pay.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/159730.htm" \l
"_ftn22" \o "" ## Likewise, constructive dismissal exists when an act of clear
discrimination, insensibility or disdain by an employer becomes unbearable to the
employee, leaving him with no option but to forego his continued employment.#
HYPERLINK "http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/159730.htm" \l
"_ftn23" \o "" ##A transfer is defined as a movement from one position to another
which is of equivalent rank, level or salary, without break in service.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/159730.htm" \l
"_ftn24" \o "" ## Promotion, on the other hand, is the advancement from one
position to another with an increase in duties and responsibilities as authorized
by law, and usually accompanied by an increase in salary.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/159730.htm" \l
"_ftn25" \o "" ## A demotion involves a situation in which an employee is
relegated to a subordinate or less important position constituting a reduction to a
lower grade or rank, with a corresponding decrease in duties and responsibilities,
and usually accompanied by a decrease in salary.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/feb2008/159730.htm" \l
"_ftn26" \o "" ##In this case, while the transfer of respondent from Credit and
Collection Manager to Marketing Assistant did not result in the reduction of his
salary, there was a reduction in his duties and responsibilities which amounted to
a demotion tantamount to a constructive dismissal since the position of Credit and
Collection Manager entails great duties and responsibilities and involves
discretionary powers. The work of a Marketing Assistant, on the other hand, is
clerical in nature. W hile petitioners have the prerogative to transfer respondent
to another position, such transfer should be done without diminution of rank and
benefits which has been shown to be present in respondent's case.Petition is
DENIEDW estmont Pharmaceuticals v. Ricardo SamaniegoUnilab hired Samaniego as
Professional Service Representative of its marketing arm, W estmont. Later, Unilab
promoted him as Senior Business Development Associate and assigned him in Isabela
as Acting District Manager of W estmont. He was transferred to Metro Manila pending

investigation of his involvement in a sales discount and Rx trade-off controversy.


He was then placed under "floating status" and assigned to perform duties not
connected with his position, like fetching at the airport physicians coming from
the provinces; making deposits in banks; fetching field men and doing messengerial
works. His transfer to Metro Manila resulted in the diminution of his salary.
Ricardo Samaniego then filed a complaint for illegal dismissal with the LA who
ordered his reinstatement and payment of his full backwages. NLRC declared the LAs
Decision null and void. CA reinstated LA. Hence, these consolidated petitions.
Samaniego claims that upon his reassignment and/or transfer
to Metro Manila, he was placed on "floating status" and directed to perform
functions not related to his position. For their part, W estmont and Unilab explain
that his transfer is based on a sound business judgment, a management prerogative.
In constructive dismissal, the employer has the burden of proving that the transfer
of an employee is for just and valid grounds, such as genuine business necessity.
The employer must be able to show that the transfer is not unreasonable,
inconvenient, or prejudicial to the employee. It must not involve a demotion in
rank or a diminution of salary and other benefits. If the employer cannot overcome
this burden of proof, the employees transfer shall be tantamount to unlawful
constructive dismissal. W estmont and Unilab failed to discharge this burden.
Samaniego was unceremoniously transferred from Isabela to Metro Manila. W e hold
that such transfer is economically and emotionally burdensome on his part. He was
constrained to maintain two residences. W orse, immediately after his transfer to
Metro Manila, he was placed "on floating status" and was demoted in rank,
performing functions no longer supervisory in on the part of the employee that it
could foreclose any choice by him except to forego his continued employment. This
was what happened to Samaniego. CA AFFIRMED.SMC v. Angel C. PontillasSan Miguel
Corporation employed Angel Pontillas as a daily wage company guard. Ricardo
Elizagaque, SMCs Vice President issued a Memorandum ordering the transfer of
responsibility of the Oro Verde W arehouse to the newly-organized VisMin Logistics
Operations. Respondent continued to report at Oro Verde W arehouse. He alleged that
he was not properly notified of the transfer and that he did not receive any
written order from Capt. Fortich, his immediate superior. Respondent also alleged
that he was wary of the transfer because of his pending case against petitioner.
Petitioner informed of an administrative investigation relative to his alleged
offenses of Insubordination or W illful Disobedience in Carrying Out Reasonable
Instructions of his superior. During the investigation, respondent was given an
opportunity to present his evidence and be assisted by counsel.He was eventually
terminated for violating company rules and regulations. Angel filed an amended
complaint against petitioner for illegal dismissal. LA dismissed the case for lack
of merit. NLRC ruled that respondent was not informed of his transfer and that her
was a victim of discrimination.CA affirmed NLRC. Thus this petition. The court
held that an employer may terminate an employment for serious misconduct or willful
disobedience by the employee of the lawful orders of his employer or representative
in connection with his work.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/may2008/155178.htm" \l
"_ftn16" \o "" ## W illful disobedience requires the concurrence of two elements:
(1) the employees assailed conduct must have been willful, that is, characterized
by a wrongful and perverse attitude; and (2) the order violated must have been
reasonable, lawful, made known to the employee, and must pertain to the duties
which he had been engaged to discharge.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/may2008/155178.htm" \l
"_ftn17" \o "" ## The records show that respondent was not singled out for the
transfer and that it was the effect of the integration of the functions of the
companys 2 operations. The employer exercises the prerogative to transfer an
employee for valid reasons and according to the requirements of its business,
provided the transfer does not result in demotion in rank or diminution of the
employees salary, benefits, and other privileges.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/may2008/155178.htm" \l
"_ftn25" \o "" ## In this case, we found that the order of transfer was reasonable

and lawful considering the integration of Oro Verde W arehouse with VisMin
Logistics. Petiion Granted.PromotionPhil Telegraph Telephone Company (PT&T) v. CA
Petitioner came up with a Relocation and Restructuring Program designed to (a)
sustain its (PT&Ts) retail operations; (b) decongest surplus (c) lower expenses
and (d) avoid retrenchment # HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/sep2003/152057.htm" \l
"_ftn3" \o "" ##Respondents Cristina Rodiel, Jesus Paracale, Romeo Tee, Benjamin
Lakandula, Avelino Acha, Ignacio Dela Cerna and Guillermo Demigillo rejected the
petitioners offer of giving them the option of the branch of transfer.The
petitioner sent letters to the private respondents requiring them to explain in
writing why no disciplinary action should be taken against them for their refusal
to be transferred/relocated. # HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/sep2003/152057.htm" \l
"_ftn6" \o "" ##The private respondents explained that their new assignment involve
distant places which would require their separation from their respective families.
Dissatisfied with this explanation, the petitioner considered the private
respondents refusal as insubordination and willful disobedience to a lawful order;
hence, the private respondents were dismissed from work.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/sep2003/152057.htm" \l
"_ftn8" \o "" ## PT&T W orkers Union-NAFLU-KMU, filed a complaint against the
petitioner for illegal dismissal. LA dismissed the complaint. NLRC ruled that the
employees have been illegally dismissed thus said transfers of the respondents as a
promotion; that the movement was not merely lateral but of scalar ascent,
considering the movement of the job grades, and the corresponding increase in
salaries. As such, the respondents had the right to accept or refuse the said
promotions.. CA affirmed the NLRC. Thus this petition. The court held that the
transfer of the complainants is not unreasonable nor does it involve demotion in
rank. They are being moved to branches where the complainants will function with
maximum benefit to the company and they were in fact promoted not demoted from a
lower job-grade to a higher job-grade and receive even higher salaries than before
and considering the fact that they were being moved to provinces provides them with
greater spending power. The increase in the respondents responsibility can be
ascertained from the scalar ascent of their job grades. W ith or without a
corresponding increase in salary, the respective transfer of the private
respondents were in fact promotions. Promotion, as defined in Millares v, Subido,
is the advancement from one position to another with an increase in duties and
responsibilities as authorized by law, and usually accompanied by an increase in
salary.The admissions of the petitioner are conclusive on it. An employee cannot
be promoted, even if merely as a result of a transfer, without his consent. A
transfer that results in promotion or demotion, advancement or reduction or a
transfer that aims to lure the employee away from his permanent position cannot be
done without the employees consent.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/sep2003/152057.htm" \l
"_ftn24" \o "" ## Hence, the exercise by the private respondents of their right
cannot be considered in law as insubordination, or willful disobedience of a lawful
order of the employer. As such, there was no valid cause for the private
respondents dismissal. The court ruled for their reinstatement. CA affirmed.
Preventive Suspension Book V, RULE XIV: Termination of Employment (OLD RULES)
SECTION 3. Preventive suspension. The employer may place the worker concerned
under preventive suspension if his continued employment poses a serious and
imminent threat to the life or property of the employer or of his co-workers.
SECTION 4. Period of suspension. No preventive suspension shall last longer than
30 days. The employer shall thereafter reinstate the worker in his former or in a
substantially equivalent position or the employer may extend the period of
suspension provided that during the period of extension, he pays the wages and
other benefits due to the worker. In such case, the worker shall not be bound to
reimburse the amount paid to him during the extension if the employer decides,
after completion of the hearing, to dismiss the worker. Renato Gabonton v. NLRC +
Mapua Institute of TechnologyRenato Gatbonton is an associate professor of

respondent Mapua Institute of Technology (MIT), Faculty of Civil Engineering. A


civil engineering student of respondent MIT filed a complaint against petitioner
for unfair/unjust grading system, sexual harassment and conduct unbecoming of an
academician. Pending investigation Gatbonton was placed under a 30-day preventive
suspension. He filed a complaint for illegal suspension, damages and attorneys
fees. LA ruled that his suspension is illegal. Both respondents and petitioner
filed their appeal from the Labor Arbiters Decision, with petitioner questioning
the dismissal of his claim for damages. NLRC granted respondents appeal and set
aside the Labor Arbiters decision. CA affirmed the NLRC. Hence, the present
petition. The court held that: Preventive suspension is a disciplinary measure for
the protection of the companys property pending investigation of any alleged
malfeasance or misfeasance committed by the employee. The employer may place the
worker concerned under preventive suspension if his continued employment poses a
serious and imminent threat to the life or property of the employer or of his coworkers. However, when it is determined that there is no sufficient basis to
justify an employees preventive suspension, the latter is entitled to the payment
of salaries during the time of preventive suspension. R.A. No. 7877 imposed the
duty on educational or training institutions to promulgate
rules and regulations in consultation with and jointly approved by the employees
or students or trainees and Gatbontons preventive suspension was based on
respondent MITs Rules and Regulations for the Implemention of the Anti-Sexual
Harassment Act of 1995, or R.A. No. 7877. Rule II Section 1 of the MIT Rules and
Regulations provides: Section 1. Preventive Suspension of Accused in Sexual
Harassment Cases. Any member of the educational community may be placed
immediately under preventive suspension during the pendency of the hearing of the
charges of grave sexual harassment against him if the evidence of his guilt is
strong and the school head is morally convinced that the continued stay of the
accused during the period of investigation constitutes a distraction to the normal
operations of the institution or poses a risk or danger to the life or property of
the other members of the educational community.##The Mapua Rules is one of those
issuances that should be published for its effectivity, since its purpose is to
enforce and implement R.A. No. 7877, In fact, the Mapua Rules itself explicitly
required publication of the rules for its effectivity thus, at the time of his
suspension, the Mapua Rules were not yet legally effective, and therefore the
suspension had no legal basis. Moreover, even assuming that the Mapua Rules are
applicable, the Court finds that there is no sufficient basis to justify his
preventive suspension since it is not shown that evidence of petitioners guilt is
strong and that the school head is morally convinced that petitioners continued
stay during the period of investigation constitutes a distraction to the normal
operations of the institution; or that petitioner poses a risk or danger to the
life or property of the other members of the educational community. Even under the
Labor Code, petitioners preventive suspension finds no valid justification. As
provided in Section 8, Rule XXIII, Book V of the Omnibus Rules Implementing the
Labor Code:Sec. 8. Preventive Suspension. The employer may place the worker
concerned under preventive suspension if his continued employment poses a serious
threat to the life or property of the employer or of his coworkers. ##Petition is
PARTIALLY GRANTED. (damages denied because no showing of Badfaith by MIT)Federito
Pido v. NLRC + Cherubim Security Services (2007)Federito Pido was hired on October
1, 1995 by Cherubim Security and General Services, Inc. (respondent) as a security
guard at the tower and Exchange Plaza of Ayala Center where he worked as a computer
operator at the Console Room, responsible for observing occurrences. He had an
altercation with Richard Alcantara of the ASF because Alcantara allegedly
questiones the expiration of the gun of Pido and tried to grab the gun from his
holster. Respondent thus conducted an investigation. After more than nine months
had elapsed since the investigation was conducted by respondent with no categorical
findingsmade, Pido filed a complaint for illegal constructive dismissal. The
company denied this saying that Pido, after a new assignment was offered to him,
said pahinga muna ako. La found him to be constructiveley dismissed. NLRC found
that petitioner was indeed constructively dismissed, it set aside the award of

separation pay. CA upheld the NLRC decision and accordingly dismissed petitioner s
appeal. Thus this petition. ART. 286. W hen employment not deemed terminated. The
bona fide suspension of the operation of a business or undertaking for a period not
exceeding six (6) monthsor the fulfillment of the employee of a military or civic
duty shall not terminate employment. In all such casesthe employer shall reinstate
the employee to his former position without loss of seniority rights if he
indicates his desire to resume his work not later than one (1) month from the
resumption of operations of his employer or from his relief from the military or
civic duty.##In Philippine Industrial Security Agency Corporation v. Dapiton, the
court held that Article 286 applies only when there is a bona fide suspension of
the employer's operation of a business or undertaking for a period not exceeding
six (6) months. In such a case, there is no termination of employment but only a
temporary displacement of employees, albeit the displacement should not exceed six
(6) months. W hen a security guard is placed on a "floating status," he does not
receive any salary or financial benefit provided by law. Due to the grim economic
consequences to the employee, the employer should bear the burden of proving that
there are no posts available to which the employee temporarily out of work can be
assigned. Cherubim failed to discharge this burden. Sections 8 and 9 of Rule XXIII,
Book V of the Omnibus Rules Implementing the Labor Code SEC. 8. Preventive
suspension.The employer may place the worker concerned under preventive suspension
if his continued employment poses a serious and imminent threat to the life or
property of the employer or of his coworkers.SEC. 9. Period of suspension.No
preventive suspension shall last longer than thirty (30) days. The employer shall
thereafter reinstate the worker in his former or in a substantially equivalent
position or the employer may extend the period of suspension provided that during
the period of extension, he pays the wages and other benefits due to the worker. In
such case, the worker shall not be bound to reimburse the amount paid to him during
the extension if the employer decides, after completion of the hearing, to dismiss
the worker.##In the event the employer chooses to extend the period of suspension,
he is required to pay the wages and other benefits due the worker and the worker is
not bound to reimburse the amount paid to him during the extended period of
suspension even if, after the completion of the hearing or investigation, the
employer decides to dismiss him. In this case, the respondent did not inform
petitioner that it was extending its investigation, nor did it pay him his wages
and other benefits after the lapse of the 30-day period of suspension. Court of
Appeals are AFFIRMED Substantive Requirements Business Related CausesArt. 283.
Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to the installation of labor-saving
devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is for the purpose
of circumventing the provisions of this Title, by serving a written notice on the
workers and the Ministry of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to the installation of laborsaving devices or redundancy, the worker affected thereby shall be entitled to a
separation pay equivalent to at least his one (1) month pay or to at least one (1)
month pay for every year of service, whichever is higher. In case of retrenchment
to prevent losses and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business losses or financial
reverses, the separation pay shall be equivalent to one (1) month pay or at least
one-half (1/2) month pay for every year of service, whichever is higher. A fraction
of at least six (6) months shall be considered one (1) whole year. Basis
Employers RightEdge Apparel Inc. v. NLRCEdge Apparel, Inc., dismissed private
respondents due to retrenchment and thus Antipuesto, et al., averred that the
retrenchment program was a mere subterfuge used by Edge Apparel to give a semblance
of regularity and validity to the dismissal of the complainants. LA dismissed the
complaint of Antipuesto, et al., against Edge Apparel. NLRC held that "There is
therefore basis in the retrenchment of these 27 workers. Redundancy exists where
the services of an employee are in excess of what is reasonably demanded by the
actual requirements of the enterprise. Edge Apparel filed a motion for a partial

reconsideration due to the award of separation pay. NLRC denied the motion; thus
this petition. The court held that: the employer has a right to dismiss employees
for valid causes after proper observance of due process. Retrenchment, in contrast
to redundancy, is an economic ground to reduce the number of employees. In order to
be justified, the termination of employment by reason of retrenchment must be due
to business losses or reverses which are serious, actual and real. The payment of
separation pay would be due when a dismissal is on account of an authorized cause.
The amount of separation pay depends on the ground for the termination of
employment. But business enterprises today are faced with the pressures of economic
recession, stiff competition, and labor unrest. Thus, businessmen are always
pressured to adopt certain changes and programs in order to enhance their profits .
The Court sustains the position of the LA. Additional award of separation pay
deleted.Business Related or Authorized CausesInstallation of Labor DevicesArt. 283.
Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to the installation of labor-saving
devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is for the purpose
of circumventing the provisions of this Title, by serving a written notice on the
workers and the Ministry of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to the installation of laborsaving devices or redundancy, the worker affected thereby shall be entitled to a
separation pay equivalent to at least his one (1) month pay or to at least one (1)
month pay for every year of service, whichever
is higher. In case of retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to serious business
losses or financial reverses, the separation pay shall be equivalent to one (1)
month pay or at least one-half (1/2) month pay for every year of service, whichever
is higher. A fraction of at least six (6) months shall be considered one (1) whole
year. Complex Electronics Employees Association v. NLRCComplex Electronics
Corporation received a message from their client Lite-On Philippines requiring it
to lower its price by 10%. Due to this demand, Complex informed its Lite-On
personnel that such request of lowering their selling price by 10% was not feasible
as they were already incurring losses at the present prices of their products and
thus the employees were informed Complex was closing down the operations of the
Lite-On Line. The Union of Complex, on the other hand, pushed for a retrenchment
pay. Eventually, machinery, equipment and materials being used for production at
Complex were pulled-out from the company premises and transferred to the premises
of Ionics Circuit, Inc. The union filed a complaint for illegal closure and filed a
notice of strike. Ionics contended that it was an entity separate and distinct from
Complex and had been in existence since July 5, 1984 or eight (8) years before the
labor dispute arose at Complex. LA ruled for the Union asking Complex to reinstate
them. NLRC reversed the LA and ordered the company to pay the employees in lieu of
notice and separation pay. Hence these petitions. The Union claimed that the said
clipping showed that both corporations, Ionics and Complex are one and the same.
The court held that the mere fact that one or more corporations are owned or
controlled by the same or single stockholder is not a sufficient ground for
disregarding separate corporate personalities.The court cited Del Rosario vs.
National Labor Relations Commission where the Court stated that substantial
identity of the incorporators of two corporations does not necessarily imply that
there was fraud committed to justify piercing the veil of corporate fiction.Ionics
may be engaged in the same business as that of Complex, but this fact alone is not
enough reason to pierce the veil of corporate fiction of the corporation. The
closure, therefore, was not motivated by the union activities of the employees, but
rather by necessity since it can no longer engage in production without the much
needed materials, equipment and machinery. The purpose of the notice requirement is
to enable the proper authorities to determine after hearing whether such closure is
being done in good faith. W hile the law acknowledges the management prerogative of
closing the business, it does not, however, allow the business establishment to
disregard the requirements of the law. The case of Magnolia Dairy Products v. NLRC

as cited by the court says that: The installation of these devices is a management
prerogative, and the courts will not interfere with its exercise in the absence of
abuse of discretion, arbitrariness, or maliciousness on the part of management, as
in this case. Nonetheless, this did not excuse petitioner from complying with the
required written notice to the employee and to the Department of Labor and
Employment (DOLE) at least one month before the intended date of termination. NLRC
is AFFIRMED.Retrenchment to Prevent Losses -283Art. 283. Closure of Establishment
and Reduction of Personnel. The employer may also terminate the employment of any
employee due to the installation of labor-saving devices, redundancy, retrenchment
to prevent losses or the closing or cessation of operations of the establishment or
undertaking unless the closing is for the purpose of circumventing the provisions
of this Title, by serving a written notice on the worker and the Department of
Labor and Employment, at least one (1) month before the intended date thereof. x x
x. In case of retrenchment to prevent losses and in cases of closure or cessation
of operations of the establishment or undertaking not due to serious business
losses or financial reverses, the separation pay shall be equivalent to one (1)
month pay or at least one-half (1/2) month pay for every year of service, whichever
is higher. A fraction of at least six (6) months shall be considered as one (1)
whole year.TPI Philippines Cement Corp v. CajucomTPI Philippines Cement Corporation
employedAtty. Benedicto A. Cajucom VII, respondent, as Vice-President for Legal
Affairs. As a result of the economic slowdown of the Philippines, TPI had cut on
its expenses. Petitioners sent Cajucom a notice terminating his services. He
contested TPIs action, claiming that the termination of his services was based
erroneously on petitioners probable losses, instead of their actual, substantial
and imminent losses, as shown by the following: (1) an increase or
raise in his monthly salary from (2) hiring by petitioners of more marketing and
accounting (3) acquisition by petitioners in 1998 of a warehouse; (4) expansion in
1998 of their operations by including sales and marketing of oil products.
Cajucom filed a complaint for illegal dismissal. LA held that TPI failed to adduce
sufficient evidence to show thattheir alleged losses are substantial and imminent.
NLRC reversed the LA. CA affirmed the NLRC. Hence this petition.The court held
that: Retrenchment is an authorized cause for the dismissal of an employee from the
service.The court held that in Trendline Employees Association-Southern Philippines
Federation of Labor v. NLRC,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/feb2006/G.R.%20No.%20149138.htm"
\l "_ftn6" \o "" ## the requisites of retrenchment are:(1) The retrenchment is
necessary to prevent losses and the same is proven; (2) W ritten notice to the
employees and to the DOLE at least one month prior to the intended date thereof;(3)
Payment of separation pay equivalent to one month pay or at least month pay for
every year of service, whichever is higher. Records show that on December 3, 1998,
petitioners sent respondent and the DOLE separate notices of retrenchment effective
December 30, 1998. Following the provision of Article 283, these notices should
have been served one month before, or on November 30, 1998. Clearly, petitioners
failed to comply with the one-month notice requirement. W e reiterate that the
dismissal of respondent from the service is by reason of retrenchment, an
authorized cause. But due process was not observed as the required notices were
not sent to respondent and the DOLE one month prior to the effectivity of his
termination. Thus, petitioners should be liable for violation of his right to due
process and should pay him indemnity in the form of nominal damages, pursuant to
our ruling in Agabon, which we fix at P20,000.00.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/feb2006/G.R.%20No.%20149138.htm"
\l "_ftn12" \o "" ## Petition is partly GRANTEDAMA Computer College v. Ely Garcia
and Teresa BallaEly Garcia was hired as a janitress by ACC and Balla was hired as a
Social W orker. ACC informed Garcia and Balla and 52 other employees of the
termination of their employment. Balla and Garcia filed a complaint for illegal
dismissal LA affirmed by NLRC and CA, ruled for the employees. Hence, this
Petition.The court held that in termination cases, the burden of proving just and
valid cause for dismissing an employee from his employment rests upon the employer,
and the latter's failure to discharge that burden would result in a finding that

the dismissal is unjustified. At the outset that ACC raised different grounds to
justify its dismissal of Garcia and Balla: LA, retrenchment; NLRC, redundancy; CA,
both retrenchment and redundancy. ACC itself is confused as to the real reason why
it terminated Garcia and Balla's employment. Both retrenchment and redundancy are
authorized causes for the termination of employment as enumerated in Article 283 of
the Labor Code but retrenchment and redundancy are two distinct grounds for
termination arising from different circumstances, thus, they are in no way
interchangeable.Redundancy exists when the service capability of the workforce is
in excess of what is reasonably needed to meet the demands of the business
enterprise. (overhiring of workers, decreased volume of business, dropping of a
particular product line) Requisites of a valid redundancy program are: (1) the good
faith of the employer in abolishing the redundant position; and (2) fair and
reasonable criteria in ascertaining what positions are to be declared redundant and
accordingly abolishedACC presented several memoranda to prove that Garcia and Balla
had been remiss in the performance of their duties, as well as perennially tardy
and absent. Other than being self-serving, said memoranda are irrelevant to prove
redundancy of the positions held by Garcia and Balla. Redundancy arises because
there is no more need for the employee's position in relation to the whole business
organization, and not because the employee unsatisfactorily performed the duties
and responsibilities required by his position. Among the accepted criteria in
implementing a redundancy are: (a) less preferred status, e.g., temporary employee;
(b) efficiency; and (c) seniority. There is no showing that ACC applied any of
these criteria in determining that, among its employees, Garcia and Balla should be
dismissed, thus, making their dismissal arbitrary and illegal. ##Retrenchment is
the termination of employment effected by management during periods of business
recession, industrial depression, seasonal fluctuations, lack of work or
considerable reduction in the volume of the employer's business. There are three
basic requisites for a valid
retrenchment to exist:(a) the retrenchment is necessary to prevent losses and such
losses are proven; (b) written notice to the employees and to the DOLE at least one
(1) month prior to the intended date of retrenchment; and (c) payment of separation
pay equivalent to one (1) month pay or at least one-half (1/2) month pay for every
year of service, whichever is higher.In a number of cases, the Court has identified
the necessary conditions for the company losses to justify retrenchment: (1) the
losses incurred are substantial and not de minimis; (2) the losses are actual or
reasonably imminent; (3) the retrenchment is reasonably necessary and is likely to
be effective in preventing the expected losses; and (4) the alleged losses or the
expected imminent losses are proven by sufficient and convincing evidence. ACC
miserably failed to prove any of the foregoing. In the case at bar, ACC claimed
that the retrenchment of Garcia and Balla was justified due to the financial
difficulties experienced by the college. Not only was ACC unable to prove its
losses, it also failed to present proof that it served the necessary notice to the
DOLE one month before the purported retrenchment of Garcia and Balla. Petition
DENIED. Juvy Manatad v. Phil Telegraph and Tel. CoManatad was employed by
respondent Philippine Telegraph and Telephone Corporation (PT&T) as junior clerk.
She was separated from employment due to the Temporary Staff Reduction Program
adopted by respondent due to serious business reverses which gave her the option to
avail of the Staff Reduction Program Package. She did not avail of the package and
was subsequently retrenched from employment. She filed a complaint for illegal
dismissal saying that respondent was obtaining profits and was that it was
economically viable for respondent to continue its business operations without
downsizing its workforce. LA ruled that the retrenchment program is invalid.NLRC
affirmed the LA. CA reversed the NLRC. Thus this petition.The court defines
retrenchment as the termination of employment initiated by the employer through no
fault of the employees and without prejudice to the latter, resorted to by
management during periods of business recession; industrial depression; or seasonal
fluctuations. Retrenchment is a valid management prerogative but subject to
faithful compliance with the substantive and procedural requirements. For a valid
retrenchment, the following requisites must be complied with: (a) the retrenchment

is necessary to prevent losses and such losses are proven; (b) written notice to
the employees and to the DOLE at least one month prior to the intended date of
retrenchment; (c) payment of separation pay equivalent to one-month pay or at least
one-half month pay for every year of service, whichever is higher.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/172363.htm" \l
"_ftn19" \o "" ##In the case at bar, respondent instituted a retrenchment program
to arrest its alleged escalating financial losses by downsizing its workforce.The
financial statements prepared by SGV & Co. reflect that respondent suffered
substantial loss in the amount of P558 Million. The company was fully justified in
implementing a retrenchment program since it was undergoing business reverses, not
only for a single fiscal year, but for several years prior to and even after the
program. The fact that the financial statements were audited by independent
auditors settles any doubt on the authenticity of these documents for lack of
signature of the person who prepared it. Even if there were no losses, the company
is still authorized by Article 283# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/march2008/172363.htm" \l
"_ftn26" \o "" ## of the Labor Code to cease its business operations. The law
recognizes the right of every business entity to reduce its work force if the same
is made necessary by compelling economic factors which would endanger its existence
or stability. In this case, Juvy failed to refute that she received the written
notice of retrenchment from respondent. Although respondent failed to furnish DOLE
with a formal letter notifying it of the retrenchment, it still substantially
complied with the requirement. Since the National Conciliation and Mediation
Board, the reconciliatory arm of DOLE, supervised the negotiation for separation
package, we agree with the petitioner is not entitled to backwages.Petition is
DENIED.Retrenchment vis--vis closureAlabang Country Club Inc. v. NLRC + Union
Francisco Ferrer, then President of ACCI found that the profitability of ACCIs
Food and Beverage Department was not profitable and thus management decided to
cease from operating the department and to open the same to a contractor, such as a
concessionaire, which would be willing to operate its own food and beverage
business within the club. ACCI subsequently entered on December 1, 1994 into an
agreement with La Tasca Restaurant Inc. ACCI sent its F & B employees letters of
termintation. A complaint for illegal dismissal was filed against ACCI. LA
dismissed the complaint for illegal dismissal on the ground that a business entity
has the right to reduce its work force if necessitated by compelling economic
factors which endanger its existence or stability. NLRC acknowledged the right of
ACCI to regulate, according to its own discretion and judgment, all aspects of
employment including the lay-off of workers and dismissed the appeal. CA reversed
those of the NLRC. It held that due to ACCIs failure to prove by sufficient and
competent evidence that its alleged losses were substantial, continuing. Thus this
petition.The court held that the case is not retrenchment but of the closure of a
business undertaking. Retrenchment and closure of a business establishment or
undertaking are are independent authorized causes for termination of employment.
Retrenchment is the reduction of personnel for the purpose of cutting down on costs
of operations in terms of salaries and wages resorted to by an employer because of
losses in operation of a business occasioned by lack of work and considerable
reduction in the volume of business. Closure of a business or undertaking due to
business losses is the reversal of fortune of the employer whereby there is a
complete cessation of business operations to prevent further financial drain upon
an employer who cannot pay anymore his employees since business has already
stopped. One of the prerogatives of management is the decision to close the entire
establishment or to close or abolish a department or section thereof for economic
reasons, such as to minimize expenses and reduce capitalization.In the present
case, when petitioner decided to cease operating its F & B Department and open the
same to a concessionaire, it did not reduce the number of personnel assigned
thereat. It terminated the employment of all personnel assigned at the
department.Petitioners failure to prove that the closure of its F & B Department
was due to substantial losses notwithstanding, this Court finds that individual
respondents were dismissed on the ground of closure or cessation of an undertaking

not due to serious business losses or financial reverses. For any bona fide reason,
an employer can lawfully close shop anytime. Just as no law forces anyone to go
into business, no law can compel anybody to continue the same. Managements
exercise of its prerogative to close a section, branch, department, plant or shop
will be upheld as long as it is done in good faith to advance the employers
interest and not for the purpose of defeating or circumventing the rights of
employees under the law or a valid agreement. Petition GRANTED.Redundancy - 283
Dusit School Nikko v. NUW HRAINRowena Agoncillo was employed by the Hotel and after
some time, she was promoted as Supervisor of Outlet Cashiers and later promoted as
Senior Front Office Cashier. The Hotel though an Inter-Office Memorandum offered a
Special Early Retirement Program (SERP) to all its employees. A total of 243
employees, including Agoncillo, 161 of whom were Union officers and members, were
separated from the Hotels employment. Her supervisor advised Agoncillo to just
avail of the Hotel's SERP. Agoncillo wanted to a complaint for illegal dismissal
against the Hotel but before she could do so, she was offered to be reinstated but
not to her former position, she suggested the position of reservation clerk but the
Hotel only allowed her the option of Linen Dispatcher of Head of Houekeeping para
nakatago because the Hotel wanted fresh graduates and new faces since nagpabaya
na daw si Agoncillo sa katawan niya Agoncillo filed a complaint for illegal
dismissal. LA dismissed the complaint. SOLE issued an Order in NCMB-NCR-NS-11-42596 in favor of the Union.On March 10, 2000, the Union and the Hotel executed a MOA
however, the MOA was not submitted to the NLRC for its approval. Neither did
Agoncillo receive any monetary benefits based on the MOA. NLRC reversed the LA
relying on the evidence of the complainant and the Order of the SOLE. CA dismissed
the petition. Thus this petition. The court held that the requisites of a valid
redundancy program are: (1) the good faith of the employer in abolishing the
redundant position; and (2) fair and reasonable criteria in ascertaining what
positions are to be declared redundant and accordingly abolished. It is the
prerogative of management to transfer an employee from one office to another within
the business establishment based on its assessment and perception of the employees
qualification, aptitude and competence but the managerial prerogative to transfer
personnel must be exercised without grave abuse of discretion. In the present case,
the petitioners recalled the termination of respondent Agoncillo when they learned
that she
was going to file a complaint against them with the NLRC for illegal dismissal.
However, instead of reinstating her to her former position, she was offered the
position of Linen Dispatcher in the hotel basement or Secretary of the Roomskeeping
Section, which are lower positions than what she held before. Offers by the
petitioners to transfer respondent Agoncillo to other positions were made in bad
faith; in fact, respondent Agoncillo had not been transferred to another position
at all. Petition Denied.Andrada v. NLRCPetitioners Ruben Andrada et al. were hired
on various dates from 1995 up to 1997 and worked as architects, draftsmen,
operators, engineers, and surveyors in the Subic Legend Resorts and Casino, Inc.
Legend sent notice to the DOLE of its intention to retrench and terminate the
employment of thirty-four (34) of its employees due to its last-in-first-out basis
on the strength of the status report of its Project Development Division. Legend
sent the 34 employees their respective notices of retrenchment. Legend gave said
employees a period of one week or until January 14, 1998 to choose their option,
with option number 2 (permanent retrenchment) as the default choice in case they
failed to express their preferences. The petitioners filed a complaint for illegal
dismissal when they found out that Legend was hiring (on the same day) new
employees for the positions they vacated. LA ruled for petitioners. NLRC reversed
the LA. The CA held that the retrenched employees were validly dismissed from
employment due to redundancy and not retrenchment. The CA ratiocinated that Legend
had validly terminated the employment of its employees since it had proven that
complainants positions were superfluous. Thus this petition. Retrenchment is an
exercise of managements prerogative to terminate the employment of its employees
#en masse, to either minimize or prevent losses. In the present case, Legend
glaringly failed to show its financial condition prior to and at the time it

enforced its retrenchment program. It failed to submit audited financial


statements regarding its alleged financial losses. Legend also failed to establish
redundancy. Retrenchment and redundancy are two different concepts; they are not
synonymous and therefore should not be used interchangeably. Redundancy exists when
the number of employees are in excess of what is reasonably necessary to operate
the business. Retrenchment, on the other hand, is used interchangeably with the
term lay-off. It is an act of the employer of dismissing employees because of
losses in the operation of a business, lack of work, and considerable reduction on
the volume of his business. It is however not enough for a company to merely
declare that positions have become redundant. It must produce adequate proof of
such redundancy to justify the dismissal of the affected employees. The pieces of
evidence submitted by Legend (such as a status review of its project division where
it reported that the 78-man personnel exceeded the needs of the company ) are mere
allegations and conclusions not supported by other evidence. Legend also failed to
establish by the same quantum of proof the fact of redundancy; hence, petitioners
termination from employment was illegal. Petition is GRANTED.Smart Communications
Inc. v. Regina AstorgaRegina M. Astorga was employed by respondent Smart
Communications as District Sales Manager. SMART launched an organizational
realignment to achieve more efficient operations and entered into a joint venture
agreement with NTT forming SNMI. Since SNMI was formed to do the sales and
marketing work, SMART abolished the CSMG/FSD, Astorgas division. NMI agreed to
absorb the CSMG personnel who would be recommended by SMART. SMART then conducted
a performance evaluation of CSMG personnel and those with the highest ratings were
recommended. Astorga landed last in the performance evaluation so she was not
recommended but she was offered a supervisory position in the Customer Care
Department, but she refused the offer because the position carried lower salary
rank and rate. SMART issued a memorandum advising Astorga of the termination of
her employment on ground of redundancy. Astorga filed a complaint# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/jan2008/148132.htm" \l
"_ftn9" \o "" ## for illegal dismissal. LA ruled that the dismissal was illegal.
NLRC ruled for Smart. CA affirmed the NLRC that the reorganization undertaken by
SMART resulting in the abolition of CSMG was a legitimate exercise of management
prerogative. Thus this petition.Astorga was terminated due to redundancy. The
nature of redundancy in W iltshire File Co., Inc. v. National Labor Relations
Commission,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2008/jan2008/148132.htm" \l
"_ftn36" \o "" ## is that it ordinarily refers to duplication of work. Astorga
claims that the termination of her employment was illegal and tainted with bad
faith and that the reorganization was done in order to get rid of her but she did
not substantiate these claims. Moreover, Astorga never denied that SMART offered
her a supervisory position in the Customer Care Department. The court held that if
SMART wanted to get rid of her, it would not have offered her a position in any
department in the enterprise.However, SMART failed to comply with the mandated one
(1) month notice prior to termination. CA affirmed with modification of 50K to be
paid as damages for not issuing the proper notices.Closure of Business -283Business
Services of the Future today Inc +Ramon Allado v. CA + Sps. VeruasaMailboxes,
Etc.s sstockholders are petitioner Ramon Allado et al. They hired spouses Gilbert
and Ma. Celestina Veruasa, as manager and assistant manager. Allado personally gave
notices of termination effective immediately to the spouses due to negative
cashflow. No written notice of closure of business was given to DOLE. Allado then
padlocked the office and appropriated for himself all the transferable rights and
equipment of the office. The sps filed a complaint for illegal dismissal. LA ruled
for them. NLRC dismissed the case saying that (1) Gilbert was both a BSFTI employee
and stockholder (2) BSFTI was not obliged to pay separation benefits to the spouses
since there was a valid closure of business due to serious financial losses; (3)
the spouses were not entitled to backwages. CA reversed the NLRC and the LA saying
that using the 4fold test, the sps are in fact employees of the Company. Thus this
petition.The court cited Agabon v. National Labor Relations Commission, where it
was held that if the dismissal is for an authorized cause, the lack of statutory

due process should not nullify the dismissal, or render it illegal, or ineffectual.
Since the NLRC and the CA found bonafide reason for closing shop ang that the
records before us revealed that there were losses from 1996 to 1998, absent the
requisite of due notice, P40,000 as nominal damages are awarded. Petition is
PARTIALLY GRANTED.John Mcleod v. NLRC + Filipinas Synthetic Corporation (Filsyn),
Far Eastern Textile Mills, Inc., Sta. Rosa Textiles, Inc., Patricio Lim and Eric
Hu.Mcleod was hired as the Assistant Spinning Manager of Universal Textiles, Inc.
(UTEX) and was eventually promoted to Senior Manager. He retired and demanded the
full benefits of his retirement plan, rejecting offers of other motary awards by
the company. He filed a complaint for retirement benefits, vacation and sick leave
benefits, non-payment of unused airline tickets, holiday pay, underpayment of
salary and 13th month pay, moral and exemplary damages, attorneys fees plus
interest against the respondents. LA ruled that the companies are solidarily liable
for Mcleods money claims. NLRC reversed the LA ordering Peggy Mills alone to pay
the money claims. CA upheld the NLRC. Hence, this petition. The court found that
records disclose that McLeod was a managerial employee only of PMI.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/jan2007/146667.htm" \l
"_ftn14" \o "" ## PMI hired McLeod as its acting Vice President and General
Manager and# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/jan2007/146667.htm" \l
"_ftn15" \o "" ## PMI confirmed McLeods appointment as Vice President/Plant
Manager in the Special Meeting of its Board of Directors. W hen PMIs rank-and-file
employees staged a strike PMI incurred serious business losses and thus PMI closed
shop and sent a notice of closure to DOLE. As a rule, a corporation that purchases
the assets of another will not be liable for the debts of the selling corporation,
provided the former acted in good faith and paid adequate consideration for such
assets. In this case, PMI transferred its assets to SRTI to settle its obligation
to SRTI. There was also no merger or consolidation of PMI and SRTI. Consolidation
is the union of two or more existing corporations to form a new corporation called
the consolidated corporation. It is a combination by agreement between two or more
corporations by which their rightsFranchises and property are united and become
those of a singlenew corporation. Merger on the other hand is a union whereby one
corporation absorbs one or more existing corporationsand the absorbing corporation
survives and continues the combined business. ##McLeod is not entitled to payment
of vacation leave and sick leave as well as to holiday pay. Article 82, Title I,
Book Three of the Labor Code, on W orking Conditions and Rest Periods, provides:
Coverage. ####################################################################%
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#b#u#t# #n#o#t#
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#e#m#p#l#o#y#e#e#s#,# #f#i#e#l#d# #p#e#r#s#o#n#n#e#l#,# #m#e#m#b#e#r#s# #o#f#
#t#h#e# #f#a#m#i#l#y# #o#f# #t#h#e# #e#m#p#l#o#y#e#r# #w#h#o# #a#r#e#
#d#e#p#e#n#d#e#n#t# #o#n# #h#i#m# for support, domestic helpers, persons in the
personal service of another, and workers who are paid by results McLeod knew that
PMI was then suffering from serious business losses. In fact, McLeod testified
that PMI was not able to operate or a period because of the strike. As Vice
President of PMI, McLeod was aware that the company had incurred huge loans from
DBP.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/jan2007/146667.htm" \l
"_ftn77" \o "" ## Since PMI has no retirement plan,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/jan2007/146667.htm" \l
"_ftn80" \o "" ## we apply Section 5, Rule II of the Rules Implementing the New
Retirement Law which provides:5.1 In the absence of an applicable
agreement or retirement plan, an employee who retires pursuant to the Act shall be
entitled to retirement pay equivalent to at least one-half (1/2) month salary for
every year of service, a fraction of at least six (6) months being considered as
one whole year. 5.#2###### #C#o#m#p#o#n#e#n#t#s# #o#f# #O#n#e#-#h#a#l#f#

#(#1#/#2#)# #M#o#n#t#h# #S#a#l#a#r#y#.## ##%## #F#o#r# #t#h#e# #p#u#r#p#o#s#e#


######## #o#f# #d#e#t#e#r#m#i#n#i#n#g# #t#h#e# #m#i#n#i#m#u#m#
#r#e#t#i#r#e#m#e#n#t# #p#a#y# #d#u#e# #a#n# #e#m#p#l#o#y#e#e# ###########
#u#n#d#e#r# #t#h#i#s# #R#u#l#e#,# #t#h#e# #t#e#r#m# ## o#n#e#-#h#a#l#f# #m#o#n#t#h#
#s#a#l#a#r#y## #s#h#a#l#l# #i#n#c#l#u#d#e# #a#l#l# #o#f# #t#h#e#
#f#o#l#l#o#w#i#n#g#:# #(#a#)##### #F#i#f#t#e#e#n# #(#1#5#)# #days salary of the
employee based on his latest salary rate.W ith McLeod having worked with PMI for
12 years, from 1980 to 1992, he is entitled to a retirement pay equivalent to
month salary for every year of service based on his latest salary rate of P50,495 a
month. CA affirmed.Antonio Carag v. NLRC + NAFLU, and MAC LABOR UNIONW ithout notice
of any kind Mariveles Apparel Corporation for unknown reasons ceased operations
with the intention of completely closing its shop as manifested in a letter filed
on the same day the company closed. MACs employees filed a complant for illegal
closure of business through their labor union. LA found them liable for illegal
closure. NLRC dismissed the petitions and affirmed the LA. Thus this petition. The
court held that the LAs decision to hold Antonio Carag as MACs stockholder and
Chairman has not basis since Complainants did not allege or prove, and Arbiter
Ortiguerra did not make any finding, that Carag approved or assented to any
patently unlawful act to which the law attaches a penalty for its commission. On
this score alone, Carag cannot be held personally liable for the separation pay of
complainants. As for his liability as an employer as enumerated under Article
212(e) of the Labor Code (Employer' includes any person acting in the interest of
an employer, directly or indirectly. The term shall not include any labor
organization or any of its officers or agents except when acting as employer.)The
court recounted the cases of McLeod v. NLRC and Spouses Santos v. NLRC that Article
212(e) of the Labor Code, by itself, does not make a corporate officer personally
liable for the debts of the corporation. The governing law on personal liability of
directors for debts of the corporation is still Section 31 of the Corporation Code.
Thus in McLeod: Personal liability of corporate directors, trustees or officers
attaches only when (1) they assent to a patently unlawful act of the corporation,
or when they are guilty of bad faith or gross negligence in directing its affairs,
(2) they consent to the issuance of watered down stocks or when, having knowledge
of such issuance, do not forthwith file with the corporate secretary their written
objection; (3) they agree to hold themselves personally and solidarily liable with
the corporation; or (4) they are made by specific provision of law personally
answerable for their corporate action. Thus, it was error for Arbiter Ortiguerra,
the NLRC, and the Court of Appeals to hold Carag personally liable for the
separation pay owed by MAC to complainants based on Article 212(e) since it does
not state that corporate officers are personally liable for the unpaid salaries or
separation pay of employees of the corporation. The liability of corporate officers
for corporate debts remains governed by Section 31 of the Corporation Code.
Petition Granted.Temporary Closure/ Bona fide suspension of operations Art. 286.
W hen employment not deemed terminated. The bona-fide suspension of the operation of
a business or undertaking for a period not exceeding six (6) months, or the
fulfillment by the employee of a military or civic duty shall not terminate
employment. In all such cases, the employer shall reinstate the employee to his
former position without loss of seniority rights if he indicates his desire to
resume his work not later than one (1) month from the resumption of operations of
his employer or from his relief from the military or civic duty. JPL Marketing
Promotions v. CAJPL Marketing and Promotions is a domestic corporation engaged in
the business of recruitment and placement of workersmand they hired Noel Gonzales,
Ramon Abesa and Faustino Aninipot as merchandisers. JPL notified respondents that
it would stop its direct merchandising activity in the Bicol Region and that they
would be ransferrd to other clients effective 15 August 1996. On 17 October 1996,
respondents filed complaints for illegal dismissal. LA dismissed the complaints for
lack of merit. The Labor Arbiter found that Gonzales and Abesa applied with and
were employed by the store where they were originally assigned by JPL even before
the lapse of the six (6)-month period given by law to JPL to provide private
respondents a new assignment. NLRC affirmed the LA. CA affirmed the NLRC but was

required by law to grant the 13th month pay and that since its exemption from
paying service incentive leave pay was not shown, it should be liable for it as
well. Thus the petition. The court held that under Arts. 283 and 284 of the Labor
Code, separation pay is authorized only in cases of dismissals due to any of these
reasons: (a) installation of labor saving devices; (b) redundancy; (c)
retrenchment; (d) cessation of the employer's business; (e) when the employee is
suffering from a disease and his continued employment is prohibited by law or is
prejudicial to his health and to the health of his co-employees. However,
separation pay shall be allowed as a measure of social justice in those cases where
the employee is validly dismissed for causes other than serious misconduct or those
reflecting on his moral character, but only when he was illegally dismissed.In the
the employees were not dismissed at all, whether legally or illegally. W hat they
received from JPL was not a notice of termination of employment, but a memo
informing them of the termination of CMCs contract with JPL.Art. 286 of the Labor
Code allows the bona fide suspension of the operation of a business or undertaking
for a period not exceeding (6) months, wherein an employee is placed on a floating
status. After 6 months, he may be considered illegally dismissed. But in this
case, the 6 month period has not yet elapsed and also as they admitted in their
comment, all three of them applied for and were employed by another establishment
after they received the notice from JPL. In seeking and obtaining employment
elsewhere, private respondents effectively terminated their employment with JPL.
Petition partly granted. Only liable for 13th month pay.DiseaseArt. 284. Disease as
ground for termination. An employer may terminate the services of an employee who
has been found to be suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as to the health of his
co-employees: Provided, That he is paid separation pay equivalent to at least one
(1) month salary or to one-half (1/2) month salary for every year of service,
whichever is greater, a fraction of at least six (6) months being considered as one
(1) whole year.Vicente Sy v. CA supraJamie Sahot was with SB Trucking (owned by Sy)
since 1965. In 1994, Sahot strated to have thigh pains and filed for leave. He
found out later that his SSS premiums were not paid by employers. He asked for
extension of leave but he was later dismissed for failure to go to work. LA ruled
for Sy. NLRC found Sahot to be an employee of Sy. CA affirmed NLRC. Thus this
petition. Court found that an ER-EE relationship is present between SBT and Sahot
and he was not, infact, an industrial partner as ruled by the LA (since he did not
receive any share of the division of profits and he was not shown to be part of any
managerial duty; he was in fact content to follow the instructions of petitioners
during those years). The court also held that dismissal was not valid and it was
without notice (he was simply threatened then dismissed). Even if he was offered a
job which is less strenuous is of no matter; also, being terminated of a disease
under 284 requires a medical certificate by the employer and is indispensable which
was not complied with by Sy. The burden is on the employer to show that all the
requisites for valid dismissal due to disease have been complied with. He is
entitled to separation pay. Petition Denied.Crayons Processing v. Felipe Pula
Crayons Processing, Inc. employed Felipe Pula as a Preparation Machine Operator. At
a young age of 34, Pula suffered a heart attack and was rushed to the hospital,
where he was confined for a week. Pula was advised
to rest for 3 months. After an angiogram procedure he was certified as fit to
work. However, 13 days after returning to work, he was taken to the company clinic
after complaining of dizziness. Diagnosed as having suffered a relapse, he was
advised by his physician to take a leave of absence from work for one (1) month.
W hen he returned for work, he was asked by the company to resign and to accept
P12,000 as financial assistance.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/july2007/167727.htm" \l
"_ftn3" \o "" ## Pula refused the offer and instead filed a complaint for illegal
dismissal. LA ruled for Pula. It was pointed out that under Section 8, Rule I, Book
VI of the Omnibus Rules Implementing the Labor Code, implementing in particular
Article 284 of the Labor Code, termination on the ground of disease is prohibited
unless there is a certification by a competent public health authority that the

disease is of such nature or at such a stage that it cannot be cured within a


period of six months even with proper medical treatment.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/july2007/167727.htm" \l "_ftn10"
\o "" ## NLRC ruled for Crayons saying that the fact that Pula was on leave for
more than six months due to his illness rendered unnecessary the certification from
a public health authority as required under the Omnibus Implementing Rules. CA
reinstated the decision of the LA.The termination as upheld by the NLRC was
grounded on Article 284 of the Labor Code, which reads:An employer may terminate
the services of an employee who has been found to be suffering from any disease and
whose continued employment is prohibited by law or is prejudicial to his health as
well as to the health of his co-employees: Sec. 8. Disease as a ground for
dismissal. W here the employee suffers from a disease ##unless there is a
certification by a competent public health authority that the disease is of such
nature or at such a stage that it cannot be cured within a period of six (6) months
even with proper medical treatment. ##For a dismissal on the ground of disease to
be considered valid, two requisites must concur: (a) the employee must be suffering
from a disease which cannot be cured within six months and his continued employment
is prohibited by law or prejudicial to his health or to the health of his coemployees; and (b) a certification to that effect must be issued by a competent
public health authority.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/july2007/167727.htm" \l "_ftn26"
\o "" ## The burden falls upon the employer to establish these requisites,#
HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/july2007/167727.htm" \l "_ftn27"
\o "" ##and in the absence of such certification, the dismissal must
necessarily be declared illegal.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/july2007/167727.htm" \l "_ftn28"
\o "" ## W ithout the required certification, the characterization or even diagnosis
of the disease would primarily be shaped according to the interests of the parties
rather than the studied analysis of the appropriate medical professionals. The
requirement of a medical certificate under Article 284 cannot be dispensed with.
Petition is DENIED. Decision of LA reinstated.Procedural RequirementsArt. 277.
Miscellaneous provisions.b. Subject to the constitutional right of workers to
security of tenure and their right to be protected against dismissal except for a
just and authorized cause and without prejudice to the requirement of notice under
Article 283 of this Code, the employer shall furnish the worker whose employment is
sought to be terminated a written notice containing a statement of the causes for
termination and shall afford the latter ample opportunity to be heard and to defend
himself with the assistance of his representative if he so desires in accordance
with company rules and regulations promulgated pursuant to guidelines set by the
Department of Labor and Employment. Any decision taken by the employer shall be
without prejudice to the right of the worker to contest the validity or legality of
his dismissal by filing a complaint with the regional branch of the National Labor
Relations Commission. The burden of proving that the termination was for a valid or
authorized cause shall rest on the employer. The Secretary of the Department of
Labor and Employment may suspend the effects of the termination pending resolution
of the dispute in the event of a prima facie finding by the appropriate official of
the Department of Labor and Employment before whom such dispute is pending that the
termination may cause a serious labor dispute or is in implementation of a mass
lay-off. (As amended by Section 33, Republic Act No. 6715, March 21, 1989)Omnibus
Rules Book VI (Post Employment) TITLE I: Termination of Employment Section 1.
Coverage. This Rule shall apply to all establishments and undertakings, whether
operated for profit or not, including educational, medical, charitable and
religious institutions and organizations in cases of regular employment with the
exception of the Government and its political subdivisions including governmentowned or controlled corporations.Section 2. Security of tenure. - (a) In cases of
regular employment, the employer shall not terminate the services of an employee
except for just or authorized causes as provided by law, and subject to the
requirements of due process. (b) The foregoing shall also apply in cases of

probationary employment: Provided, however, that in such cases, termination of


employment due to failure of the employee to qualify in accordance with the
standards of the employer made known to the former at the time of engagement may
also be a ground for termination of employment. (c) In cases of employment covered
by contracting or subcontracting arrangements, no employee shall be dismissed prior
to the expiration of the contract between the principal and contractor or
subcontractor as defined in Rule VIII-A, Book III of these Rules, unless the
dismissal is for just or authorized cause, or is brought about by the completion of
the phase of the contract for which the employee was engaged but, in any case,
subject to the requirements of due process or prior notice. (d) In all cases of
termination of employment, the following standards of due process shall be
substantially observed: For termination of employment based on just cases as
defined in Article 282 of the # HYPERLINK
"http://www.chanrobles.com/legal4labor.htm" \l "LABOR%20CODE%20OF%20THE
%20PHILIPPINES%20%5BFULL%20TEXT%5D" #Labor Code#: "(i) A written notice served on
the employee specifying the ground or grounds for termination, and giving said
employee reasonable opportunity within which to explain his side. "(ii) A hearing
or conference during which the employee concerned, with the assistance of counsel,
if he so desires, is given opportunity to respond to the charge, present his
evidence, or rebut the evidence presented against him. (iii) A written notice of
termination served on the employee, indicating that upon due consideration of all
the circumstances, grounds have been established to justify his termination.For
termination of employment as defined in Article 283 of the # HYPERLINK
"http://www.chanrobles.com/legal4labor.htm" \l "LABOR%20CODE%20OF%20THE
%20PHILIPPINES%20%5BFULL%20TEXT%5D" #Labor Code#, the requirement of due process
shall be deemed complied with upon service of a written notice to the employee and
the appropriate Regional Office of the Department of Labor and Employment at least
thirty days before effectivity of the termination, specifying the ground or grounds
for termination. If the termination is brought about by the completion of a
contract or phase thereof, or by failure of an employee to meet the standards of
the employer in the case of probationary employment, it shall be sufficient that a
written notice is served the employee within a reasonable time from the effective
date of termination.Section 3. Reinstatement An employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of seniority
rights and to backwages.In General/Liability for non-compliance with procedural
requisites/Essential Elements of Due ProcessAgabon v. NLRC and Riviera HomeRiviera
Home Improvements, employed petitioners Virgilio Agabon and Jenny Agabon as gypsum
board and cornice installers and after years under their employ, were dismissed for
abandonment of work.Petitioners then filed a complaint for illegal dismissal and
payment of money claims. LA declared the dismissals illegal. NLRC reversed the
LA.CA ruled that the dismissal of the petitioners was not illegal because they had
abandoned their employment but ordered the payment of money claims. Hence, this
petition.The court held that abandonment is the deliberate and unjustified refusal
of an employee to resume his employment. It is a form of neglect of duty, hence, a
just cause for termination of employment by the employer. For a valid finding of
abandonment, these two factors should be present: (1) the failure to report for
work or absence without valid or justifiable reason; and (2) a clear intention to
sever employer-employee relationship through overt acts. The court found that the
Agabond were frequently absent having subcontracted for an installation work for
another company. Subcontracting for another company clearly showed the intention
to sever the employer-employee relationship with private respondentStandards of due
process: requirements of notice. In all cases of termination of employment, the
following standards of due process shall be substantially observed:For termination
of employment based on just causes as defined in Article 282 of the Code:(a)
A written notice
served on the employee specifying the ground or grounds for termination, and
giving to said employee reasonable opportunity within which to explain his side;
(b) A hearing or conference during which the employee concerned, with the
assistance of counsel if the employee so desires, is given opportunity to respond

to the charge, present his evidence or rebut the evidence presented against him;
and (c) A written notice of termination served on the employee indicating
that upon due consideration of all the circumstances, grounds have been established
to justify his termination. In case of termination, the foregoing notices shall be
served on the employees last known address.## Dismissals based on just causes
contemplate acts or omissions attributable to the employee Dismissals based on
authorized causes involve grounds under the Labor Code which allow the employer to
terminate employees. A termination for an authorized cause requires payment of
separation pay. ##Procedurally(1) if the dismissal is based on a just cause under
Article 282 the employer must give the employee two written notices and a hearing
or opportunity to be heard (2) if the dismissal is based on authorized causes under
Articles 283 and 284the employer must give the employee and the Department of Labor
and Employment written notices 30 days prior to the effectivity of his
separation.##From the foregoing rules four possible situations may be derived: (1)
the dismissal is for a just cause under Article 282 of the Labor Code for an
authorized cause under Article 283or for health reasons under Article 284 and due
process was observed; (2) the dismissal is without just or authorized cause but due
process was observed; (3) the dismissal is without just or authorized cause and
there was no due process; and (4) the dismissal is for just or authorized cause but
due process was not observed. (W enphil or Belated Due Process Rule.)##In the fourth
situation, the dismissal should be upheld. W hile the procedural infirmity cannot
be cured, it should not invalidate the dismissal. However, the employer should be
held liable for non-compliance with the procedural requirements of due process. Due
process under the Labor Code, like Constitutional due process, has two aspects:
substantive, i.e., the valid and authorized causes of employment termination under
the Labor Code; and procedural, i.e., the manner of dismissal. Procedural due
process requirements for dismissal are found in the Implementing Rules of P.D. 442,
Book VI, Rule I, Sec. 2, as amended by Department Order Nos. 9 and 10.Breaches of
these due process requirements violate the Labor Code. Therefore statutory due
process should be differentiated from failure to comply with constitutional due
process. The case at bar squarely falls under the fourth situation. The dismissal
should be upheld because it was established that the petitioners abandoned their
jobs to work for another company.Petition Denied.Serrano v. NLRC and IsetannRuben
Serrano was hired by private respondent Isetann Department Store as a security
checker to apprehend shoplifters and prevent pilferage of merchandise.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2000/jan2000/117040_jan2000.htm" \l
"_ftn1" \o "" ## To cut costs, Isetann phased out its entire security section and
engage the services of an independent security agency. Serrano filed a complaint
for illegal dismissal upon his termination. The LA found this termination to be
illegal. NLRC held that the phase-out of private respondents security section and
the hiring of an independent security agency constituted an exercise by private
respondent of a legitimate business decision. Hence this petition. The court held
that contrary to the allegations of Serrano, the dismissal falls under Art. 283 of
the Labor Code for redundancy Art. 283 also provides that to terminate the
employment of an employee for any of the authorized causes the employer must serve
"a written notice on the workers and the DOLE at least one (1) month before the
intended date thereof." In this case, Serrano was given notice the same day of his
termination The rule reversed a long standing policy theretofore followed that even
though the dismissal is based on a just cause or the termination of employment is
for an authorized cause, the dismissal or termination is illegal if effected
without notice to the employee. The shift in doctrine took place in 1989 in W enphil
Corp. v. NLRC.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2000/jan2000/117040_jan2000.htm" \l
"_ftn20" \o "" ## The Court holds that the policy of ordering the reinstatement to
the service of an employee without loss of seniority and the payment of his wages
during the period of his separation until his actual reinstatement but not
exceeding three (3) years should be re-examined. The remedy is to order the payment
to the employee of full backwages from the time of his dismissal until the court
finds that the dismissal was for a just cause. But, otherwise, his dismissal must

be upheld and he should not be reinstated. This is because his dismissal is


ineffectualFor the same reason, if an employee is laid off for any of the causes in
Arts. 283-284, i.e., installation of a labor-saving device, but the employer did
not give him and the DOLE a 30-day written notice of termination in advance, then
the termination of his employment should be considered ineffectual and he should be
paid backwages.There are three reasons why, on the other hand, violation by the
employer of the notice requirement cannot be considered a denial of due process
resulting in the nullity of the employees dismissal or layoff.##First is that the
Due Process Clause of the Constitution is a limitation on governmental powers. It
does not apply to the exercise of private power, such as the termination of
employment under the Labor Code. ##Second reason is that notice and hearing are
required under the Due Process Clause before the power of organized society are
brought to bear upon the individual. ##Third reason why the notice requirement
under Art. 283 can not be considered a requirement of the Due Process Clause is
that the employer cannot really be expected to be entirely an impartial judge of
his own cause. ##Art. 283 of the Labor Code, the employers failure to comply with
the notice requirement does not constitute a denial of due process but a mere
failure to observe a procedure for the termination of employment which makes the
termination of employment merely ineffectual. Thus, only if the termination of
employment is not for any of the causes provided by law is it illegal and,
therefore, the employee should be reinstated and paid backwages. If the employees
separation is without cause, instead of being given separation pay, he should be
reinstated. In either case, whether he is reinstated or only granted separation
pay, he should be paid full backwages if he has been laid off without written
notice at least 30 days in advance.On the other hand, with respect to dismissals
for cause under Art. 282, if it is shown that the employee was dismissed for any of
the just causes mentioned in said Art. 282, then, in accordance with that article,
he should not be reinstated. However, he must be paid backwages from the time his
employment was terminated until it is determined that the termination of employment
is for a just cause because the failure to hear him before he is dismissed renders
the termination of his employment without legal effect. Petition Granted.Cabalen
Management Co Inc v. QuiambaoThe CA Decision held that except for respondents
Vizier Inocencio and Vincent Edward Mapa whose petitions were dismissed , the SC
affirmed the CA. Thus this motion of reconsideration because Cabalen argues that
the affidavits of their witnesses, Henry dela Vega Balen and Roderick Malana, as
well as the audit report are admissible and of rational probative value becasue the
respondents did not contest the findings of the audit report that the cancelled
Order Slips (OS) and receipts, and the incidents of swapping dining OS with bar OS
were beyond the course of ordinary business and as opined by the LA and NLRC gives
a wholly credible scenario of tip pocketing by respondents and the alleged
admission of respondent Jesus Quiambao in his Sinumpaang Salaysay of the existence
of the anomalous activity. However, in this motion of reconsideration, the court
held that It is the employers burden to prove a valid dismissal. It is not enough
that petitioners showed that Quiambao had confirmed the occurrence of incidents of
tip pocketing; they also had to prove that he and the rest of the respondents were
responsible for it. This duty is all the more pressing in the case of Quiambao
considering that it was he who called the managements attention to the incidents
of tip pocketing among some of his co-employees, only to be charged with the
offense he had asked to be investigated.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/july2007/169494.htm" \l
"_ftn8" \o "" ##Petitioners also had to prove that due process was observed in
terminating the employment of respondents. Petitioners unfortunately failed in all
respects. Petition Denied except as to Quiambaos dismissal since it is still
unresolved.Right to CounselEspero Santos Salaw v. NLRCEspero Santos Salaw was
employed by the private respondents as a credit investigator-appraiser. Criminal
Investigation Service (CIS) of the Philippine Constabulary, National Capital
Region, extracted from the petitioner without the assistance of counsel a Sworn
Statement which made it appear that the petitioner, in cahoots with a co-employee,
Reynaldo Madrigal sold twenty sewing machines and electric generators which had

been foreclosed by the respondent bank. Salaw was asked to appear before
the bank's Personnel Discipline and Investigation Committee (PDIC) and he was soon
terminated from his employment for alleged serious misconduct or willful
disobedience and fraud or willful breach of the trust reposed on him by the private
respondents. Salaw filed a complaint for illegal dismissal. LA ruled that the
complaint is illegal. NLRC reversed the LA and dismissed the case for lack of
merit. Hence, this petition. The court held that the requirements for the lawful
dismissal of an employee by his employer are two-fold: the substantive and the
procedural. Not only must thedismissal be for a valid or authorized cause as
provided by law (Articles 279, 281, 282-284, New Labor Code), but the rudimentary
requirements of due process notice and hearing must also be observed before an
employee may be dismissed. The investigation of petitioner Salaw by the respondent
Bank' investigating committee violated his constitutional right to due process, in
as much as he was not given a chance to defend himself, as provided in Rule XIV,
Book V of the Implementing Rules and Regulations of the Labor Code governing the
dismissal of employees. Section 5 of the said Rule requires that "the employer
shall afford the worker ample opportunity to be heard and to defend himself with
the assistance of his representative, if he so desires." Here petitioner was
perfunctorily denied the assistance of counsel during investigation. The court held
that the right to counsel, a very basic requirement of substantive due process, has
to be observed as guaranteed by the 1987 constitution. Considering further that the
admission by the petitioner was made without the assistance of counsel and was the
sole basis for his dismissal, it can not be admitted in evidence against him.
Decision of LA reinstated.NoticeKing of Kings Transport v. Santiago MamacSantiago
O. Mamac worked as a bus conductor of King of Kings Transport, Inc. Pending the
holding of a certification election in DMTC, petitioner KKTI was incorporated with
the Securities and Exchange Commission which acquired new buses. Many DMTC
employees were subsequently transferred to KKTI they organized the Kaisahan ng mga
Kawani sa King of Kings (KKKK) which was registered with DOLE. Respondent was
elected KKKK president. Mamac was required to accomplish a Conductors Trip
Report and submit it to the company after each trip. Upon audit KKTI noted an
irregularity. It discovered that respondent declared several sold tickets as
returned tickets causing KKTI to lose an income of eight hundred and ninety pesos.
In his letter of explanation,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/june2007/166208.htm" \l
"_ftn3" \o "" ## respondent said that the erroneous declaration was unintentional.
He explained that during that days trip, the windshield of the bus assigned to
them was smashed; and they had to cut short the trip in order to immediately report
the matter to the police. As a result of the incident, he got confused in making
the trip report. He was later on terminated. He filed a complaint for illegal
dismissal. LA dismissed the complaint for lack of merit.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/june2007/166208.htm" \l
"_ftn6" \o "" ## NLRC ordered KKTI to indemnify complainant in the amount of ten
thousand pesos (P10,000) for failure to comply with due process prior to
termination. Affirming the NLRC, the CA held that there was just cause for
respondents dismissal. It ruled that respondents act in declaring sold tickets
as returned tickets constituted fraud or acts of dishonesty justifying his
dismissal. Hence, we have this petition.The court held that Due process under the
Labor Code involves two aspects: first, substantivethe valid and authorized
causes of termination of employment under the Labor Code; and second,
proceduralthe manner of dismissal.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/june2007/166208.htm" \l "_ftn12"
\o "" ## In the present case, the CA affirmed the findings of the labor arbiter
and the NLRC that the termination of employment of respondent was based on a just
cause. Art. 277 of the Labor Code provides the manner of termination of
employment. The implementing rule of the aforesaid provision states: To clarify,
the following should be considered in terminating the services of employees: ##(1)
The first written notice to be served on the employees should contain the specific
causes or grounds for termination against them, and a directive that the employees

are given the opportunity to submit their written explanation within a reasonable
period. ##Reasonable opportunity under the Omnibus Rules means every kind of
assistance that management must accord to the employees to enable them to prepare
adequately for their defense.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/june2007/166208.htm" \l "_ftn15"
\o "" ## This should be construed as a period of at least five (5) calendar days
from receipt of the notice##After serving the first notice, the employers should
schedule and conduct a hearing or conference wherein the employees will be given
the opportunity to: (1) explain and clarify their defenses to the charge against
them; (2) present evidence in support of their defenses; and (3) rebut the evidence
presented against them by the management. During the hearing or conference, the
employees are given the chance to defend themselves personally, with the assistance
of a representative or counsel of their choice. ##In this case, First, respondent
was not issued a written notice charging him of committing an infraction. The law
is clear on the matter. A verbal appraisal of the charges against an employee does
not comply with the first notice requirement. Second, even assuming that
petitioner KKTI was able to furnish respondent an Irregularity Report notifying him
of his offense, such would not comply with the requirements of the law. W e observe
from the irregularity reports against respondent for his other offenses that such
contained merely a general description of the charges against him.Third, no
hearing was conducted. Regardless of respondents written explanation, a hearing
was still necessary in order for him to clarify and present evidence in support of
his defense. Thus, for non-compliance with the due process requirements in the
termination of respondents employment, petitioner KKTI is sanctioned to pay
respondent the amount of thirty thousand pesos (PhP 30,000) as damages. Petition is
PARTLY GRANTED. Decision of the CA is MODIFIED by deleting the award of backwages
and 13th-month pay.Magro Placement v. Cresenciano HernandezCresenciano E. Hernandez
filed with Magro Placement for an application for employment abroad as Auto
Electrician. He was hired by Al Yamama in Jeddah, K.S.A. for a two-year contract.
Respondent worked at the Al Yamama as an electrician but because of lack of
equipment or tools, the work became harder. Respondent executed a Statement that:
he could no longer continue his job with Al Yamama. He was soon repatriated to the
Philippines for the reason that he was recruited for Al Yamama as Auto Electrician,
but he was not qualified since he had no experience as Auto Electrician; he was
allowed to go for a trade test but failed; he was allowed to find a new job, but he
was not qualified to work in Budget Rent-A-Car Company & Nissan; he was given
P2,000.00 as financial assistance. He filed a Complaint for illegal dismissal. LA
dismissed the case for lack of merit. NLRC affirmed this ruling and the CA MODIFIED
THE DECISION by ordering private respondents to pay petitioner separation pay
equivalent to one (1) month pay for every year of service since it found that Magro
had just cause to effect respondent's dismissal but that it found the dismissal did
not comply with the due process requirements. Thus this petition.The court held
that Al Yamama failed to satisfy the two-notice requirement. W ithout prior notice
or explanation, Al Yamama took respondent's passport and simply brought him to
petitioner's foreign principal, Orbit, and told the latter that respondent did not
know his job as electrician. Respondent heard his employer's complaint against him
at that instance only. From these facts, it is clear that respondent's dismissal
was effected without the notice required by law. Article 277 of the Labor Code
explicitly provides: The Serrano doctrine# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/july2007/156964.htm" \l "_ftn28"
\o "" ## which awarded full backwages in ineffectual dismissal cases where an
employee dismissed for cause was denied due process, which was applied by the CA,
has been abandoned by the Court's ruling in Agabon v. National Labor Relations
Commission.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/july2007/156964.htm" \l "_ftn29"
\o "" ## In that case, the Court held that if the dismissal was for a cause, the
lack of statutory due process should not nullify the dismissal, or render it
illegal or ineffectual. However, the employers violation of the employees right
to statutory due process warrants the payment of indemnity# HYPERLINK

"http://www.supremecourt.gov.ph/jurisprudence/2007/july2007/156964.htm" \l "_ftn30"
\o "" ## in the form of nominal damages. The amount of such damages is addressed to
the sound discretion of the Court, taking into account the relevant circumstances.
Court deems the amount of P30,000.00 as sufficient nominal damages, pursuant to
prevailing jurisprudence. Petition is PARTLY GRANTEDHearingHearingPermex Inc v.
NLRCPermex initially hired Emmanuel Filoteo as a mechanic but he was soon promoted
to water treatment operator. One day, Filoteo entered his time-in at 8:45 p.m. and
since he was scheduled to work until 7:00 a.m. the next day, he wrote 7:00 a.m.
in his scheduled time-out but at around 9:20 p.m., Filoteo went to see the
Assistant Production Manager to inquire if "butchering" of fish would be done that
evening so they could start operating the boiler. Since they were informed that no
butchering would be done, he asked permission to go home and caught the service
jeep provided by Permex without correcting the 7:00am time out.Later, he received a
memorandum from the Assistant Personnel Officer asking him to explain, in writing,
the entry he made in his DTR. Filoteo complied and submitted his written
explanation that same evening. Filoteo was soon suspended indefinitely and thus he
filed a complaint for illegal dismissal. Labor Arbiter dismissed the complaint for
lack of merit. NLRC reversed LA. Thus this petition.The court held that whether
private respondent was illegally dismissed or not is governed by Article 282 of the
Labor Code.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2000/jan2000/125031_jan2000.html" \l
"_ftn7" \o "" ## To constitute a valid dismissal from employment, two requisites
must concur: (a) the dismissal must be for any of the causes provided for in
Article 282 of the Labor Code; and (b) the employee must be afforded an opportunity
to be heard and defend himself.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2000/jan2000/125031_jan2000.html" \l
"_ftn8" \o "" ## This means that an employer can terminate the services of an
employee for just and valid causes, which must be supported by clear and convincing
evidence.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2000/jan2000/125031_jan2000.html" \l
"_ftn9" \o "" ## It also means that, procedurally, the employee must be given
notice, with adequate opportunity to be heard,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2000/jan2000/125031_jan2000.html" \l
"_ftn10" \o "" ## before he is notified of his actual dismissal for cause.In the
present case, the NLRC found that the two-fold requirements for a valid dismissal
were not satisfied by the petitioners.First, petitioner's charge of serious
misconduct of falsification or deliberate misrepresentation was not supported by
the evidence on the record contrary Second, the private respondent was not afforded
an opportunity to be heard. As found by the NLRCSuch dismissal, in our view, was
too harsh a penalty for an unintentional infraction, not to mention that it was his
first offense committed without malice, and committed also by others who were not
equally penalized.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2000/jan2000/125031_jan2000.html" \l
"_ftn12"# #\#o# #"#"# ##### #C#o#n#s#i#d#e#r#i#n#g# #t#h#e# #f#a#c#t#o#r#y#
#p#r#a#c#t#i#c#e# #w#h#i#c#h# #m#a#n#a#g#e#m#e#n#t# #t#o#l#e#r#a#t#e#d# #t#h#e#
#c#o#u#r#t# #h#e#l#d# #t#h#a#t# #F#i#l#o#t#e#o#,# #i#n# #h#i#s# #r#u#s#h# #t#o#
#c#a#t#c#h# #t#h#e# #s#e#r#v#i#c#e# #v#e#h#i#c#l#e#,# #m#e#r#e#l#y# #f#o#r#g#o#t#
#t#o# #c#o#r#r#e#c#t# #h#i#s# #i#n#i#t#i#a#l# #t#i#m#e#-#o#u#t# #e#n#t#r#y#.#
#P#e#t#i#t#i#o#n# #i#s# #D#E#N#I#E#D#.##M#u#a#j#e#-#T#u#a#z#o#n# #v#.#
#W #e#n#p#h#i#l# #C#o#r#p##A#n#n#a#b#e#l#l#e# #M#. Tuazon and Almer R. Abing worked
as branch managers of the W endys food chains in MCU Caloocan and Meycauayan,
respectively, of respondent W enphil Corporation. From September 14 to November 8,
1998, W endys had a Biggie Size It! Crew Challenge promotion contest.Meycauayan
branch won 2 times in a row. Management received reports that as early as the first
round of the contest, the Meycauayan, MCU Caloocan, Tandang Sora and Fairview
branches cheated. An internal investigation ensued. # HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/december2006/162447.htm" \l
"_ftn4" \o "" ##Immediately thereafter, petitioners were notified, in writing, of
scheduled hearings regarding the matter and of their immediate suspension.#

HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/december2006/162447.htm" \l
"_ftn5" \o "" ##On February 29, 2000, petitioners were dismissed. They filed a
complaint for illegal dismissal. Petitioners insisted that the real reason for
their termination was their persistent demands for overtime and holiday pay.
Respondents maintained that petitioners were terminated for dishonesty amounting to
serious misconduct and willful breach of trust.LA ruled in favor of the employees.
NLRC affirmed the LA. CA found substantial proof of petitioners misconduct.Thus
this petition. Petitioners aver that their right to due process was violated. They
were not notified of the accusation against them before they were summoned to the
main office of W enphil on February 3, 2000 for investigation. The court held that
First, the law requires that the employee be given two written notices before
terminating his employment, namely: (1) a notice which apprises the employee of the
particular acts or omissions for which his dismissal is sought; and (2) the
subsequent notice which informs the employee of the employers decision to dismiss
him.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/december2006/162447.htm" \l
"_ftn15" \o "" ## The records show that the petitioners were given written notices
informing them that they were charged with serious misconduct and dishonesty in
relation to the Biggie Size It! Crew Challenge program, and notifying them of the
scheduled hearings. The petitioners, thinking that their verbal explanations were
sufficient, opted to forego a written explanation, and did not appear during the
set hearing.Petitioners contend that respondents did not sufficiently prove the
existence of a just cause for their termination, hence they were illegally
dismissed. In the present case, the tape receipts presented by respondents showed
that there were anomalies committed in the branches managed by the petitioners.
Additionally, some employees declared in their affidavits# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/december2006/162447.htm" \l
"_ftn25" \o "" ## that the cheating was actually the idea of the petitioners. Even
without the affidavits, sufficient basis exists for respondents loss of trust and
confidence on the petitioners as managerial officers. Petition is DENIED. Use of
Position PaperSeastar Marine Services Inc v. Lucio Bul-an Jr.Lucio A. Bul-an, Jr.
was hired by petitioner Seastar as an Able Seaman for and in behalf of H.S.S.
Holland Ship. Shortly thereafter, Chief Mate Benjamin A. Paruginog mauled the
respondent, causing bodily harm and physical injuries. Bul-An immediately reported
the incident to Master Captain Stumpe Jacobus, who assured him that he would settle
the matter. In a Letter, Captain Jacobus reported to his superiors at the Topaz
Seal Shipping Company, that Bul-An was uncooperative, refused to obey his orders
and those of the chief officer, and often pretended to be ill. In a Letter
Paruginog reported the respondents unusual behavior since boarding the ship.
Paruginog denied the respondents allegations that he made threats to kill the
respondent.Bul-An was forced to seek help from the Philippine Embassy at
Barcelona, Spain, and executed an Affidavit on the matter. Bul-An was terminted and
thus, the he filed a complaint for illegal dismissal with prayer for payment of
back wages, as well as actual, moral and exemplary damages against the
petitioners. He immediately reported the matter to the petitioners, but instead of
receiving assistance, he was even scolded for returning home. Seastar alleged that
the respondent was psychologically ill and was dismissed for a justified and
lawful cause. It was averred that even only after a few days of boarding the M/V
Blue Topaz, the respondent already showed unusual behavior. He not only refused to
obey orders from his superior officers; he also refused to work, after about a week
on board, he confronted the Master of the vessel and told him that the vessel was
too small for him and too many work. Due to the troubles and problems being
encountered by the Master of the vessel and the crew with complainant, he was
dismissed and repatriated.LA ruled that the petitioner was dismissed without just
cause. NLRC ruled in favor of the respondent and dismissed the appeal for lack of
merit. Petitioners allege that the NLRC should have remanded the case to the labor
arbiter for further proceedings, the following pronouncement of the Court in Caete
v. National Labor Relations Commission is instructive: The case may be decided on

the basis of the pleadings and other documentary evidence presented by the
parties.In the absence of any palpable error, arbitrariness or partiality, the
method adopted by the labor arbiter to decide a case must be respected by the
NLRC.Thus, a formal trial-type hearing is not at all times and in all instances
essential to due process. It is enough that the parties are given a fair and
reasonable opportunity to explain their respective sides of the controversy and to
present supporting evidence on which a fair decision can be based. Rule V of the
Rules of Procedure of the NLRC, as amended, outlines the procedure to be followed
in cases before the labor arbiter, as follows:Section 3. Submission of Position
Papers/Memorandum. #Should the parties fail to agree upon an amicable settlement,
either in whole or in part, during the conferences, the Labor Arbiter shall issue
an order stating therein the matters taken up and agreed upon during the
conferences and directing the parties to simultaneously file their respective
verified position papers.#Those verified position papers shall cover only those
claims and causes of action raised in the complaint excluding those that may have
been amicably settled, and shall be accompanied by all the supporting documents
including the affidavits of their respective witnesses which shall take the place
of the latters direct testimony.
##The parties shall, thereafter, not be allowed to allege facts, or present
evidence to prove facts, not referred to and any cause or causes of action not
included in the complaint or position papers, affidavits, and other documents.
Unless otherwise requested in writing by both parties, the Labor Arbiter shall
direct both parties to submit simultaneously their position papers/memorandum with
the supporting documents and affidavits within fifteen (15) calendar days from the
date of the last conference, with proof of having furnished each other with copies
thereof.#Section 4. Determination of Necessity of Hearing. Immediately after
the submission by the parties of their position papers/memorandum, the Labor
Arbiter shall motu proprio determine whether there is a need for a formal trial or
hearing. At this stage, he may, at his discretion and for the purpose of making
such determination, ask clarificatory questions to further elicit facts or
information, including but not limited to the subpoena of relevant documentary
evidence, if any from any party or witness.#Section 5. Period to Decide Case.
##(a) Should the Labor Arbiter find it necessary to conduct a hearing, he shall
issue an order to that effect setting the date or dates for the same which shall be
determined within ninety (90) days from initial hearing.#He shall render his
decision within thirty (30) calendar days, without extension, after the submission
of the case by the parties for decision, even in the absence of stenographic notes:
Provided, however, that OFW cases shall be decided within ninety (90) calendar days
after the filing of the complaint and the acquisition by the labor arbiter of
jurisdiction over the parties.#(b) If the Labor Arbiter finds no necessity of
further hearing after the parties have submitted their position papers and
supporting documents, he shall issue an Order to that effect and shall inform the
parties, stating the reasons therefore. In any event, he shall render his decision
in the case within the same period provided in paragraph (a) hereof.##Petition is
DENIED.Decision or AwardARTICLE VIII JUDICIAL DEPARTMENT, Section 14. No decision
shall be rendered by any court without expressing therein clearly and distinctly
the facts and the law on which it is based. No petition for review or motion for
reconsideration of a decision of the court shall be refused due course or denied
without stating the legal basis therefor. ABD Overseas v. NLRC + Mohmina Macaraya
Mohmina Macaraya applied for employment as a dressmaker with respondent Mars
International Manpower, Inc. MARS submitted to the POEA an overseas contract worker
information sheet stating that she would be employed as a domestic helper for two
years with a monthly salary of US$200.00. Macaraya was soon deployed to Riyadh,
Saudi Arabia where her employer took the only copy of her employment contract and
never returned it to her and she was forced to work as a domestic helper. After
working for three months and thirteen days, Macaraya was dismissed by her employer
and repatriated to the Philippines. Macaraya filed with the POEA a complaint#
HYPERLINK "http://www.supremecourt.gov.ph/jurisprudence/1998/feb1998/117056.htm" \l
"_edn1" \o "" ## for illegal dismissal. POEA, ruled that Macaraya had been

illegally dismissed as both her foreign employer and recruitment agency failed to
prove that the dismissal was for a just and valid cause. On appeal to the NLRC ABB
Overseas opined that the failure of MARS to prove the legality of Macarayas
dismissal from employment should not mean that the same burden should fall upon
petitioner who was not even privy to Macarayas employment contract. If it were to
be held liable for the monetary awards in favor of Macaraya, then it would result
in undue enrichment on the part of MARS.NLRC affirmed the LA. Thus this petition.
The court cited Section 6, Rule I, Book III of the POEA Rules and Regulation which
provides:# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1998/feb1998/117056.htm" \l
"_edn7" \o "" ## It is clear from the aforementioned provision of the POEA Rules
and Regulation that the transferee agency shall assume full and complete
responsibility to all contractual obligations of the principals to its workers
originally recruited and processed by its former agency.In the case at bar,
respondent ABD Overseas Manpower Corporation being the transferee agency must
assume (the) full liability of the principal. Section 13Rule VII of the New Rules
of Procedure of the NLRC provides as follows:SEC. 13. Form of
Decision/Resolution/Order. The Decision/ Resolution shall state clearly and
distinctly the findings of facts issues and conclusions of law on which it is based
and the relief granted if any. If the decision or resolution involves monetary
awards the same shall contain the specific amount awarded as of the date the
decision is rendered.This provision of the Rules is obviously in consonance with
Section 14 Article VIII of the Constitution providing that (n)o decision shall be
rendered by any court without expressing therein clearly and distinctly the facts
and the law on which it is based. - Nicos Industrial Corporation v. Court of
Appeals # HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1998/feb1998/117056.htm" \l
"_edn9" \o "" ## the Court said: It is a requirement of due process that the
parties to a litigation be informed of how it was decided with an explanation of
the factual and legal reasons that led to the conclusions of the court. It ill
becomes an appellate judge to write his rulings with a pair of scissors and a pot
of paste as if he were a mere researcher. He is an innovator not an echo. ##In the
case at bar, petitioner became the accredited recruitment agency of the principal,
M.S. Al Babtain Recruitment In labor cases, however, technical rules of procedure
are not applicable,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1998/feb1998/117056.htm" \l
"_edn18" \o "" ## but may apply only by analogy or in a suppletory character. Basic
principles of justice and equity dictate that MARS should not be totally cleared of
its liability to Macaraya under the peculiar circumstances of this case.
Considering that it was MARS with whom Macaraya entered into a contract and that it
had been accorded due process at the proceedings before the POEA MARS is the one to
be held accountable for her claims. NLRC Affirmed.Burden of ProofLimketkai Sons
Milling Inc. v. Editha LlameraLimketkai Sons Milling received reports that some of
its oil products, particularly Marca Leon Cooking Oil and Corn Oil had visible
impurities and rancid taste.The concerned employees, except respondent who was
then on maternity leave, submitted their respective written explanations and were
placed under preventive suspension. LSMI terminated the services of the suspended
employees. Llamera filed against LSMI a complaint for illegal dismissal. LA ruled
in her favor. NLRC reversed the LA. CA affirmd the NLRC with the MODIFICATION that
petitioners dismissal was illegal. Thus this petition. The court held that where
there is no showing of a just or authorized cause for termination of employment,
the law considers the case a matter of illegal dismissal. The burden is on the
employer to prove that the termination of employment was for a just or authorized
cause. In the case at hand, we find untenable petitioners claim of breach of trust
and confidence committed by the employee. The willful breach by the employee of the
trust reposed in him by his employer must be founded on facts established by the
employer. The latter must clearly and convincingly prove by substantial evidence
the facts and incidents leading to the loss of confidence in the employee.
Petitioners simply alleged that respondents failure to report to the quality

control head the batch that did not meet the minimum standard showed connivance to
sabotage petitioners business. Not only is petitioners logic flawed, it is an
instance of arguing non sequitur. An employee who has been illegally dismissed is
entitled to reinstatement and full back wages, that is, without deducting earnings
earned elsewhere during the period of his illegal dismissal. Petition is DENIED.
Skippers United Pacific Inc v. NLRC Gervacio Rosaroso was signed up as a Third
Engineer with Nicolakis Shipping, S.A. through its recruitment and manning agency,
herein petitioner Skippers United Pacific. The term of the contract was for one
year. Barely a month after boarding the vessel M/V Naval Gent respondent was
ordered to disembark in Varna, Bulgaria and repatriated to the Philippines.
Immediately after arriving in the Philippines, respondent filed a complaint for
illegal dismissal. Labor Arbiter found that respondent was illegally dismissed.
NLRC and CA affirmed the LA, not giving credence to the telexed Chief Engineers
Report saying that Rosaroso was slacking in his duties and was unwilling to help
with the repairs. The reason was that the Report cannot be given any probative
value as it is uncorroborated by other evidence and that it is merely hearsay,
having come from a source, the Chief Engineer, who did not have any personal
knowledge of the events reported therein. Thus this Petition. The court held that
the rule in labor cases is that the employer has the burden of proving that the
dismissal was for a just cause; failure to show this would necessarily mean that
the dismissal was unjustified and, therefore, illegal.The two-fold requirements for
a valid dismissal are as follows: (1) dismissal must be for a cause provided for in
the Labor Code, which is substantive; and (2) the observance of notice and hearing
prior to the employees dismissal, which is proceduralSubstantial evidence is
defined as that amount of relevant evidence which a reasonable mind might accept
as adequate to justify a conclusion. As all three tribunals found, the Report
cannot be given any weight or credibility because it is uncorroborated, based
purely on hearsay, and obviously merely an afterthought. Skippers failed to
overcome the burden of proof tasked upon it in proving that the dismissal has a
just cause. Petition Denied. Degree of Proof/Substantial EvidencePhiltread Tire
and Rubber Corp v. VicenteAlberto M. Vicente was employed by Philtread Tire and
Rubber Corporation as a housekeeping coordinator. A complaint against Vicente was
from a sign painter with whom petitioner had a service contract.The painter
reported that he was being forced by respondent to overprice by P1,000.00 his
service fee of PP3,800.00. Petitioner assigned respondent to perform janitorial
duties, prompting him to request an immediate disposition of his case. But when
petitioner directed him to submit his evidence within three (3) days from notice,
he failed to comply. Philtread found respondent guilty of extortion, fraud, serious
misconduct and willful breach of trust and confidence and he was terminated. LA
ruled for Philtread. NLRC reversed the LA and held that the respondent was
illegally dismissed. CA affirmed the NLRC. Hence this petition. The court held that
there is neither direct nor documentary evidence to prove that respondent was
involved in extortion. In the minutes of the companys investigation, it was
revelaed that Avis did not categorically state that he was pressured by respondent
to overprice his service fee. The court held that the petitioner failed to prove
its charge by substantial evidence. Substantial evidence is that amount of
relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion. CA affirmed with the modification that in lieu of reinstatement,
respondent is awarded separation pay. Etcuban v. Sulpicio Lines Inc.Sulpicio Lines,
Inc. hired Vicente Ectuban in 1978 and in 1994 he was the Chief Purser of the M/V
Surigao Princess. The boat was subjected to a surprise inspection an it was
discovered that several yellow passengers duplicate original of unissued passage
tickets already contained the amount of P88.00 the fare for adult passengers for
the boats route. Suplicio Lines instructed him to report to the main office for an
explanation and investigation. He refused to sign the minutes of the investigation
claiming that it was self-incriminatory. And thus he was placed under suspension
and replaced by the company. Ectuban thought that he was fired from his work.
Barely a week after the preventive suspension, he filed a compalint for illegal
dismissal claiming that the dismissal was without basis. LA ruled for him. NLRC

affirmed LA since the offense allegedly has not been established by clear and
competent evidence that the alleged irregular condition of the tickets was
attributable to the complainant or to other members of the team of inspectors who
have equal access to the tickets. CA reversed NLRC saying that there was sufficient
basis for loss of trust and confidence on him since as the custodian of the tickets
with the authority to issue them, and the fact that the tampered tickets were in
his possession, it was logical that Etcuban committed the tampering.Thus this
petition. The court held that the degree of proof required in labor cases is not as
stringent as in other types of cases. Uncorroborated assertions and accusations by
the employer will not be sufficient but as regards a managerial employee, the mere
existence of a basis for believing that such employee has breached the trust of his
employer would suffice for his dismissal. Hence, in the case of managerial
employees, proof beyond reasonable doubt is not required, it being sufficient that
there is some basis for such loss of confidence. In the present case, the
petitioner is not an ordinary rank-and-file employee. The petitioners work is of
such nature as to require a substantial amount of trust and confidence on the part
of the employer. The fact that the petitioner has worked with the respondent for
more than 16 years should be taken against him. The infraction that he committed,
vis-a-vis his long years of service with the company, reflects a regrettable lack
of loyalty. If an employees length of service is to be regarded as a justification
for moderating the penalty of dismissal, it will actually become a prize for
disloyalty, perverting the meaning of social justice and undermining the efforts of
labor to cleanse its ranks of all undesirables. Petition is DENIED. De Guzman v.
NLRCFernandito De Guzman was employed as a bus conductor by private respondent
Philippine Rabbit Bus Line Company. He filed an LOA since he claimed he was
experiencing chronic pain from the gunshot wounds he sustained when he tried to
defend the earnings of the company from brigands. His leg shrunk by at least two
(2) inches and three (3) feet of his intestines had to be removed. A bullet was
still imbedded in his leg which allegedly still gave him chronic pain. The
Companys operation manager placed him under preventive suspenson when he went
beyond the period of the leave of absence he applied for. De Guzman gave a
statement on the reason for his absences.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/december2007/167701.htm" \l
"_ftn4" \o "" ## According to him, he did not report for duty because the left
side of his body above his thigh was very painful and rendered him unable to stand.
He thereafter received a memorandum in reply which claims that he has abandoned his
post. De Guzman filed a complaint for illegal dismissal. LA dismissed the
complaint.The NLRC granted the appeal and gave DeGuzman the money clams. CA
reinstated the LA. Thus this petition. The court found that there was a dismissal
and that for a dismissal to be completely valid and faultless, the employer must
show that the dismissal was for a just or authorized cause and that it observed
procedural due process. In the case at bar, private respondents contend that
petitioner was validly dismissed for abandonment of work. To constitute
abandonment, two elements must concur: (1) the failure to report for work or
absence without valid or justifiable reason, and (2) a clear intention to sever the
employer-employee relationship. The burden of proof is on the employer to show an
unequivocal intent on the part of the employee to discontinue employment.#
HYPERLINK
"http://elibrary.supremecourt.gov.ph/DOCUMENTS/SUPREME_COURT/Decisions/1999.zip
%3E314,df%7C1999/MAY99/119724.htm" \l "_edn8" \o "" ### HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/december2007/167701.htm" \l
"_ftn16" \o "" ## In this case, the respondent company failed to discharge this
burden. Petition is GRANTED.PrescriptionMenandro B. Laureano v. CA +Singapore
Airlines.Menandro B. Laureano was hired as B-707 captain. He was offered an
extension of his two-year contract to five (5) years. In Zurich Airport he
committed a noise violation offense for which he apologized. He also figured in a
tail scraping incident. Spore Air was hit by a recession and he was one of the
pilots who were terminated. He filed a complaint for illegal dismissal. The trial
court found for Menandro. CA reversed the trial court due to prescription and

dismissed the complaint. Thus this petition. Petitioner raises the issue of whether
his action is one based on Article 1144 or on Article 1146 of the Civil
Code.According to him, his termination of employment effective November 1, 1982,
was based on an employment contract which is under Article 1144, so his action
should prescribe in 10 years and not 4 years under Article 1146 used as basis by
the CA. The appellate court concluded that the action for illegal dismissal
originally filed before the Labor Arbiter on June 29, 1983, but which was
withdrawn, then filed again in 1987 before the Regional Trial Court, had already
prescribed.The court held that neither Article 1144 nor Article 1146 of the Civil
Code is here pertinent. W hat is applicable is Article 291 of the Labor Code:Art.
291. Money claims. All money claims arising from employee employer relations
accruing during the effectivity of this Code shall be filed within three (3) years
from the time the cause of action accrued; In illegal dismissal, it is settled,
that the ten year prescriptive period fixed in Article 1144 of the Civil Code may
not be invoked by petitioners, for the Civil Code is a law of general application,
##In the light of Article 291, aforecited, we agree with the appellate court's
conclusion that petitioner's action for damages due to illegal termination filed
again on January 8, 1987 or more than four (4) years after the effective date of
his dismissal on November 1, 1982 has already prescribed. W e base our conclusion
not on Article 1144 of the Civil Code but on which sets the prescription period at
three (3) years and which governs under this jurisdiction. In Olympia
International, Inc., vs., Court of Appeals, the court held that "although the
commencement of a civil action stops the running of the statute of prescription or
limitations, its dismissal or voluntary abandonment by the plaintiff leaves in
exactly the same position as though no action had been commenced at all." CA
AFFIRMED.Victory Liner Inc. v. RacePablo Race was employed by Victory Liner as a
bus driver and as a requisite for his hiring, the respondent deposited a cash bond
in the amount of P10,000.00 to the petitioner. In Tarlac, the bus Race was driving
was bumped by a Dagupan-bound bus and he suffered a fractured left leg. One month
after his release from the hospital, the respondent was confined again for further
treatment of his fractured left leg. Upon his return to the office to report for
work he was informed that he was considered resigned from his job. Race talked
with his officer who told him that he was resigned and asked him to accept 50k.
Race, through hi counsel sent a demand letter to the company and there being no
response, they filed a compalont for illegal dismissal. LA dismissed the complaint
saying that respondent was not a regular employee but a mere field personnel and,
therefore, not entitled to service incentive leave, holiday pay, overtime pay and
13th month pay. He also ruled that Race failed to present evidence showing that
Race was entitled to the abovestated money claims. NLRC reversed the LA. It
ratiocinated that respondent did not abandon his work and, instead, continued to be
an employee of petitioner after he was discharged from the hospital. In illegal
dismissal cases, the employee concerned is given a period of four years from the
time of his dismissal within which to institute a complaint. This is based on
Article 1146 of the New Civil Code which states that actions based upon an injury
to the rights of the plaintiff must be brought within four years. In Callanta v.
Carnation Philippines, Inc, it was held that: [O]ne's employment, profession, trade
or calling is a "property right," and the wrongful interference therewith is an
actionable wrong. The right is considered to be property within the protection of a
constitutional guaranty of due process of law.The four-year prescriptive period
shall commence to run only upon the accrual of a cause of action of the worker. It
is error to conclude that the employment of the respondent was unjustly terminated
on 10 November 1994 because he was, at that time, still confined at the Specialist
Group Hospital, Dagupan City. It is apparent that respondent did not abandon his
work. His absence from work for a long period of time was obviously due to the fact
that he was still recuperating from two operations on his fractured leg. Petitioner
knew this very well. In fact, petitioner shouldered the respondent's medication and
hospital expenses during the latter's confinement and operation in two hospitals.
Petitioner failed to establish the fact that the respondent ceased to be its
employee on 10 November 1994. Except for its flimsy reason that the sick leave,

disability leave and physician consultations were given to the respondent as mere
accommodations for a former employee. It should be stressed that petitioner is a
common carrier and, as such, is obliged to exercise extra-ordinary diligence in
transporting its passengers safely.To allow the respondent to drive the
petitioner's bus under such uncertain condition would, undoubtedly, expose to
danger the lives of the passengers and the property of the petitioner. Petition is
PARTLY GRANTED insofar as it prays for the non-reinstatement of respondent.
QuitclaimRCBC v. BithaoLeonardo Bithao was hired by Rizal Commercial Banking
Corporation and eventually filed a complaint for illegal dismissal when he was
terminated based on his signing of a quitclaim. LA ruled for Bithao; On appeal,
except for deleting the award of moral and exemplary damages, and attorneys fees,
the NLRC affirmed the Labor Arbiters decision. CA affirmed the LA and the NLRC.
Hence, this appeal. RCBC says that (1) when respondent executed the quitclaim, the
decisions of both the Labor Arbiter and the NLRC were still pending review by the
Court of Appeals; (2) respondent expressly acknowledged and waived in the quitclaim
all amounts due him based on the Labor Arbiters decision.The court ruled that even
if Bithaos quitclaim was to the effect that the amount stated therein was the full
and final settlement of all his claims (including all the amounts due him by reason
of the decisions of the Labor Arbiter and the NLRC) it does not mean that he
actually received the judgment award. The SC agreed with the appellate court that
petitioner took undue advantage of respondents predicament and dire financial
needs to let him sign the quitclaim in exchange for his retirement benefits.#
HYPERLINK "http://www.supremecourt.gov.ph/jurisprudence/2006/august2006/G.R.%20No.
%20162240.htm" \l "_ftn11" \o "" ##In the instant case, when the quitclaim was
executed, petitioners appeal before the Court of Appeals was still pending. Since
both the Labor Arbiter and the NLRC have previously ruled in respondents favor,
petitioner was aware of the slim chances it had before the appellate court. RCBC
could not deny that the quitclaim was in its own interest. Petition is DENIED.
Solgus Corporation v. CAThe employees of Solgus separately filed complaints#
HYPERLINK "http://www.supremecourt.gov.ph/jurisprudence/2007/feb2007/157488.htm" \l
"_ftn5" \o "" ## for illegal dismissal and underpayment of salaries and related
benefits allegeing that upn hiring there was no stipulation that they were being
hired as probationary employees and that they worked twelve (12) hours daily and
were made to sign blank payrolls. They were subsequently dismissed from employment.
Solgus submitted a Memorandum alleging that: complainants Telin,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/feb2007/157488.htm" \l
"_ftn11" \o "" ## Lacerna,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/feb2007/157488.htm" \l
"_ftn12" \o "" ## Emano,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/feb2007/157488.htm" \l
"_ftn13" \o "" ## Ballon,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/feb2007/157488.htm" \l
"_ftn14" \o "" ## Menor, Jr.,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/feb2007/157488.htm" \l
"_ftn15" \o "" ## and Alagos# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/feb2007/157488.htm" \l
"_ftn16" \o "" ## had executed Affidavits of Desistance evidencing that their
complaints had been amicably settled; and the complaints of Deseo and Soriano
should be dismissed because they failed to complete their six-month probationary
period and were, therefore, not regular employees. LA# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/feb2007/157488.htm" \l
"_ftn17" \o "" ### HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/feb2007/157488.htm" \l
"_ftn18" \o "" ## dismissed the complaints and affirmed the validity of the
Affidavits of Desistance. NLRC reversed the LA and ordered the reinstatement of the
employees. CA affirmed the NLRC with a few modifications in the award such as
reintstatement of Diosdado Telin. Thus this petition. The court held that the
Affidavits deserve little consideration. In Periquet v. National Labor Relations
Commission,# HYPERLINK

"http://www.supremecourt.gov.ph/jurisprudence/2007/feb2007/157488.htm" \l
"_ftn34" \o "" ## it was held that: Not all waivers and quitclaims are invalid as
against public policy. If the agreement was voluntarily entered into and
represents a reasonable settlement, it is binding on the parties and transaction.
But where it is shown that the person making the waiver did so voluntarily, with
full understanding of what he was doing, and the consideration for the quitclaim is
credible and reasonable, the transaction must be recognized as a valid and binding
undertaking.However, in the case the company presented the Affidavits of
Desistance for the 1st time 7 months after the company received the order of the
LA. The Affidavits of Desistance do not even bear the prima facie evidence of their
due execution accorded to private documents, because even the notaries public
before whom they were acknowledged issued a certification that no such affidavit
was acknowledged by Telin and Alagos before them.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/feb2007/157488.htm" \l
"_ftn40" \o "" ## Quitclaims, releases and other waivers of benefits granted by law
or contracts in favor of workers should be strictly scrutinized to protect the weak
and the disadvantaged. The waivers should be carefully examined, in regard not
only to the words and terms used, but also to the factual circumstances under which
they have been executed.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/feb2007/157488.htm" \l
"_ftn41" \o "" ##The mere fact that the respondents were not physically coerced or
intimidated does not necessarily imply that they freely or voluntarily consented to
the terms thereof. Petition is denied.Dismissal of case purely on a technical
ground frowned uponQuintano v. NLRCANTONIO S. QUINTANO filed a complaint for
illegal dismissal against Moldex Group saying that he joined respondent MLI as
Senior Executive Vice-President upon respondent Uys inducement of a superior
compensation package that included a signing bonus in the amount of P5,150,000.00.
The petitioner alleged that he was to use the said amount to purchase condominium
unit and that the employment contract was for a period of five years.However, on
November 11, 1997, without any warning or explanation, respondents Uy and Vinuya
enjoined him to resign from his position. He refused to do so. Nonetheless,
during a company party held on November 13, 1997, to the petitioners
consternation, respondent Uy made a unilateral announcement of the petitioners
resignation from the company. The company averred that when the petitioner joined
respondent MRMI, he requested for a cash advance in the amount of P5,150,000.00 to
purchase a condominium unit, a car, and to pay for his outstanding cash advances
from his former employer and that later on the company learned that he mortgaged
the condominium unit to Citytrust Bank. Uy and Vinuya asked the petitioner to
resign for loss of trust and confidence, On November 13, 1997, a despedida party
was tendered for the petitioner at the Heritage Hotel in Pasay City. The LA found
that petitioner violated his contractual obligation to the respondents by renting
out the condo and resulted in a loss of trust and confidence in the petitioner.
NLRC dismissed the appeal.
CA dismissed the petition saying that Quintano failed to attach to the instant
petition for certiorari certified true copies of the assailed NLRC Orders and
copies of the following: his complaint for illegal dismissal, motion for formal
trial, notice of appeal, and the Decision of the Labor Arbiter dated April 16,
1999 (Section 1, Rule 65 in relation to Section 3, Rule 46 of the 1997 Rules of
Civil Procedure, as amended). Ths this petition. The court held that in Section 3,
Rule 46, of the Rules of Court it reads:The submission of the duplicate original or
certified true copy of the judgment, order, resolution or ruling subject of a
petition for certiorari is essential to determine whether the court, body or
tribunal, which rendered the same, indeed, committed grave abuse of discretion.#
HYPERLINK "http://www.supremecourt.gov.ph/jurisprudence/2004/dec2004/144517.htm" \l
"_ftn6" \o "" #[6]# The provision states that either a legible duplicate original
or certified true copy thereof shall be submitted. If what is submitted is a copy,
then it is required that the same is certified by the proper officer of the court,
tribunal, agency or office involved or his duly authorized representative. The
purpose for this requirement is not difficult to see. It is to assure that such

copy is a faithful reproduction of the judgment, order, resolution or ruling


subject of the petition.##In this case, the submission by the petitioner of copies
of the assailed NLRC resolutions each bearing the stamp certified xerox copy
instead of certified true copy is substantial compliance with the aforesaid
requirement. Citing Section 4(b),# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2004/dec2004/144517.htm" \l
"_ftn8" \o "" #[8]# Rule 48 of the Rules of Court, the appellate court, likewise,
justified the dismissal of the petition for certiorari for the petitioners failure
to manifest his willingness to post a bond which would answer for whatever damages
that may be caused to the respondents The Court agrees with the petitioner that his
failure to manifest his willingness to post the said bond is not fatal. In this
case, the CA did not act upon the petitioners application for injunctive relief.
It did not require him to post such bond; neither did the CA determine the amount
that he must post for the grant thereof. The appellate courts dismissal of the
petition for certiorari on the ground that the petitioner failed to manifest his
willingness to post the said bond is, thus, unwarranted. Petition is GRANTED.
Criminal CasesSalvador Lacorte v. InciongSALVADOR LACORTE was hired by Asean
Fabricators as a warehouseman who was tasked to receive and store raw and junk
materials used by the respondent. One day, he asked to purchase the junk of the
company and signed a cash invoice. It was found that he brought out more than he
purchased, some of whch were brand new. He was found to have committed certain acts
in breach of the trust and confidence of his employer and was terminated. ASEAN
filed a case for qualified theft against Salvador. The dismissal was upheld but the
criminal complaint was however, dismissed for insufficiency of evidence. On appeal
by petitioner, the aforementioned order was affirmed. Thus this petition. The court
held that petitioner was accorded more than ample opportunities to fully present
his side of the case. After private respondent's application for clearance to
terminate petitioner's employment was filed on October 7, 1977, the case was set
for hearing in Regional Office No. IV. It defies explanation other than that it was
a mere afterthought why it took petitioner so much time to prepare those two
affidavits which contain nothing more than the bare allegation, obviously selfserving, that his union activities prompted his termination. Lacorte, however,
contends that the dismissal by the Provincial Fiscal of the criminal complaint for
qualified theft filed against him by private respondent for insufficiency of
evidence supports his claim that he is innocent of the imputed acts of stealing.
The purpose of the proceedings before the fiscal is to determine if there is
sufficient evidence to warrant the prosecution and conviction of the accused. In
assessing the evidence before him, the fiscal considers the basic rule that to
successfully convict the accused the evidence must be beyond reasonable doubt and
not merely substantial. Respondent company conducted its investigation on the
alleged theft before filing the criminal charges and the application for clearance,
and only after having been convinced of the veracity of the reported attempt to
steal. That the company investigated the incident first while allowing petitioner
to stay on his job pending the investigation is not only proper but in accord with
fair process. Petition is dismissed. Quiambao v. NLRCRodolfo Quiambao was hired as
officer-in-charge of private respondent Central Cement Corporations Tuguegarao
Branch. Six months later, he was made permanent Branch Manager. He was subsequently
suspended for an indefinite period for poor performance in extending credit to
customers, violation of company rules and regulations and gross negligence. As a
result of further investigation petitioner was charged with estafa before the
Provincial Fiscal of Tuguegarao, while a civil case for collection was brought
against him in the Regional Trial Court of Makati.The criminal complaint was
dismissed but on appeal to the Ministry of Justice the then Deputy Minister of
Justice, now Associate Justice of this Court, Reynato S. Puno reversed the
provincial fiscal and ordered the filing of an information for estafa against
Quiambao. Petitioner filed a complaint for illegal dismissal. After hearing, the
Labor Arbiter found petitioner to have been illegally dismissed. NLRC reversed the
LA saying that the case was subsequently dismissed by the RTC of Tuguegarao for
failure of the prosecution to prosecute. On the other hand, the civil suit for

collection was dismissed by the RTC of Makati for failure of private respondent to
prove its case. The filing of these cases, therefore, cannot support the private
respondents claim of loss of trust and confidence in petitioner. This case is to
be distinguished from those cases in which it was held that the acquittal of the
employee in the criminal case was not a bar to his dismissal on the ground of loss
of confidence.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1996/mar1996/91935.htm" \l
"_edn10" \o "" ## The rulings in those cases were based on findings that the
evidence in the criminal case was not sufficient to satisfy the requirement of
proof beyond reasonable doubt but otherwise adequate to support a finding that
there was substantial evidence that the employee was guilty. In contrast, in the
case at bar, there is entire want of evidence to justify the dismissal of the
petitioner. The NLRC merely relied on the fact that the Ministry of Justice found
petitioner probably guilty of estafa. In fact, the NLRC found that the charges
against him had not been substantiated. Moreover there was, in this case, no
investigation by the private respondent. There was only a financial and performance
audit conducted.NLRC found no evidence substantiating the charges nor is there
evidence that he misappropriated funds of the company or extorted money from
customers. That case was eventually dismissed by the RTC of Tuguegarao for failure
of prosecution witnesses to testify, as was the civil case brought in the RTC of
Makati, which found that it was not petitioner Quiambao but the companys cashier,
Antonio Kho, who had misappropriated the money. Petition is GRANTED.Good Faith of
EmployeeCruz v. Coca-Cola Bottlers Phils IncCORNELIO C. CRUZ has been working for
respondent companys plant in Calamba, Laguna, as a driver/helper at times, he gets
designated as Acting Salesman for respondents soft drinks and other beverages. He
loaded their their truck with CCBPI products. After the required verification and
confirmation of the products loaded petitioner proceeded to leave the plant
vicinity. After gate inspection, however, petitioner drove back inside the plant on
the pretext of refueling. W hile waiting in line to refuel, petitioner allegedly
asked Aguila to load an additional thirty (30) cases of assorted canned soft drinks
as plus load.He went out again but when asked to be subjected to inspection ge
shouted, Ayos na. Miguel Legaspi, one of the security guards, noticed several
cases of canned soft drinks loaded at the back of the truck which he verified to be
unlisted in the trucks LOGP. He was then directed to return to the plant and
unload the products. At this point, it was confirmed that petitioner did not
actually secure any paper for the added products nor did he follow the established
procedure before taking out the extra cases.An investigation was conducted on the
alleged violations committed by petitioner and he was eventually terminated. Cruz
filed a complaint for illegal dismissal. LA dismissed the complaint. NLRC found the
penalty of dismissal too excessive and not proportionate to the alleged infractions
committed. Court of Appeals which ruled that while there was valid cause for
petitioners termination, respondent company failed to satisfy the procedural
requirements because the notices it sent to petitioner were legally deficient in
failing to notify with particularity the specific acts of violation he was being
charged of.Thus this peitition. Several factors militate against petitioners
claim of good faith. Petitioners length of service, which spans almost fifteen
(15) years, works against his favor in this case. W e have held that the longer an
employee stays in the service of the company, the greater is his responsibility for
knowledge and compliance with the norms of conduct
and the code of discipline in the company. Moreover, in his sworn statement,
Aguilar attested that he reminded petitioner of whether he had secured the gate
pass for the products, and petitioner merely replied, Ayos na. Termination of
employment by reason of loss of confidence is governed by Article 282(c) of the
Labor Code, which provides that an employer can terminate the employment of the
employee concerned for fraud or willful breach by an employee of the trust reposed
in him. The company rules violated by petitioner are punishable, for the first
offense, with the penalty of suspension. However, respondent company has presented
evidence showing that petitioner has a record of other violations from as far back
as 1986.To be sure, the nature of petitioners offenses is downright inimical to

the interests of respondent company. Petition is DENIED.Reliefs/Remedies in


Illegal DismissalArt. 279. Security of tenure. In cases of regular employment, the
employer shall not terminate the services of an employee except for a just cause or
when authorized by this Title. An employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to his other
benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement. (As amended by
Section 34, Republic Act No. 6715, March 21, 1989)Art. 223. Appeal. Decisions,
awards, or orders of the Labor Arbiter are final and executory unless appealed to
the Commission by any or both parties within ten (10) calendar days from receipt of
such decisions, awards, or orders. Such appeal may be entertained only on any of
the following grounds:a. If there is prima facie evidence of abuse of discretion on
the part of the Labor Arbiter;b. If the decision, order or award was secured
through fraud or coercion, including graft and corruption;c. If made purely on
questions of law; and d. If serious errors in the findings of facts are raised
which would cause grave or irreparable damage or injury to the appellant. In case
of a judgment involving a monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in the amount equivalent to the
monetary award in the judgment appealed from.In any event, the decision of the
Labor Arbiter reinstating a dismissed or separated employee, insofar as the
reinstatement aspect is concerned, shall immediately be executory, even pending
appeal. The employee shall either be admitted back to work under the same terms and
conditions prevailing prior to his dismissal or separation or, at the option of the
employer, merely reinstated in the payroll. The posting of a bond by the employer
shall not stay the execution for reinstatementprovided herein. To discourage
frivolous or dilatory appeals, the Commission or the Labor Arbiter shall impose
reasonable penalty, including fines or censures, upon the erring parties. In all
cases, the appellant shall furnish a copy of the memorandum of appeal to the other
party who shall file an answer not later than ten (10) calendar days from receipt
thereof. The Commission shall decide all cases within twenty (20) calendar days
from receipt of the answer of the appellee. The decision of the Commission shall be
final and executory after ten (10) calendar days from receipt thereof by the
parties.Any law enforcement agency may be deputized by the Secretary of Labor and
Employment or the Commission in the enforcement of decisions, awards or orders. (As
amended by Section 12, Republic Act No. 6715, March 21, 1989)In generalLopez v.
NLRCMelody Paulino Lopez, then Guidance Counselor of the elementary department,
created an agenda where the students witnessed soldiers exhibit. She wrote a letter
to Letran College where she said that the program was a success but that some
quarters had objections. After that event, she couldnt help but feel that she was
being forced to resign since after the Career Orientation, Mr. Moralino, Elementary
Principal, ordered Dr. Ramos to remove complainant as Elementary Guidance Counselor
and she was replaced by another staff who had no experience in the school set-up.
Later, complainant was offered a sizable amount of money by respondents in exchange
for her voluntary resignation. She was soon dismissed by Letran. Labor Arbiter
found that petitioner was dismissed for just cause and with due process.NLRC ruled
that there was an illegaldismissal due to absence of just cause and due process but
ordered private respondents to grant petitioner separation pay in lieu of
reinstatement. THE SC HELD that despite a finding of illegal dismissal against
private respondent school, petitioner should not be reinstated. W hether or not
complainant uttered defamatory words against respondent Fr. Edwin Lao is of no
moment, the focal inquiry being addressed is whether or not such alleged misconduct
was in connection with, or in relation to, with the work of complainant as Head
Psychometrician. Records are bereft of such fact. In general, the remedy for
illegal dismissal is the reinstatement of the employee to his former position
without loss of seniority rights and the payment of backwages. But there may be
instances as when reinstatement is not a viable remedy as where as in this case
the relations between the employer and the employee have been so severely strained

that it is not advisable to reinstate. The fact remains that petitioner is not
required to prove her innocence on the charges leveled against her but the burden
rests upon private respondents to establish the valid cause of petitioner's
termination. Bustamante vs. NLRC# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1998/oct1998/124548.htm" \l
"_edn16" \o "" ## with regard to illegal dismissals effected after March 21, 1989.#
HYPERLINK "http://www.supremecourt.gov.ph/jurisprudence/1998/oct1998/124548.htm" \l
"_edn17" \o "" ## W e ruled in recent cases# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1998/oct1998/124548.htm" \l
"_edn18" \o "" ## that an illegally dismissed employee is entitled to his full
backwages from the time his compensation was withheld from him up to the time of
his actual reinstatement. The legislative policy behind Republic Act No. 6715
points to "full backwages" as meaning exactly that, i.e. without deducting from
backwages the earnings derived elsewhere by the concerned employee during the
period of his illegal dismissal.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1998/oct1998/124548.htm" \l
"_edn19" \o "" ## NLRC is AFFIRMED subject to the MODIFICATION that private
respondents are also ordered to pay petitioner full backwages.United Field Sea
W atchman and Checkers Agency v. RequilloW illie Requillo etc. were security guards
of the United Field Sea W atchman and Checkers Agency (UFSW CA), petitioner and they
applied for loans but they founs that their SSS was not remitted. Upon advice of
the SSS, they filed with the Department of Labor and Employment in Surigao del
Norte complaints against UFSW CA. They were transferred but they continued reporting
for work at the PPA office in Surigao City. Hence, UFSW CA refused to pay their
salaries for the month of June 1997 as they were considered absent without leave.
They filed a complaint for illegal dismissal. UFSW CA denied dismissing the
respondents from employment. They were merely transferred to other places of work.
LA ruled that they were illegally dismissed. NLRC agreed and deleted the awards. CA
set aside the NLRC. Thus this petition. The sole issue for our resolution is
whether the Court of Appeals erred in holding that petitioners appeal to the NLRC
was filed beyond the reglementary period. The registry return slips addressed to
Jaime Amamio and Atty. Estanislao Ebarle show a significant difference when
compared to the registry return slips addressed to PPA. The non-submission of the
original return slips is an indication that if the originals were submitted they
would reveal that private respondent Jaime Amamio and Atty. Estanislao Ebarle
received the Decision of the Labor Arbiter not on April 27, 1998 but on a much
earlier date. Thus, the appeal not having been filed within the ten (10) day period
to appeal, the appeal filed by private respondents before the NLRC should not have
been given due course. ART. 223. Appeals. Decisions awards or orders of the Labor
Arbiter are final and executory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt of such decisions awards or
orders.##The right to appeal is not part of due process but a mere statutory
privilege that has to be exercised only in the manner and in accordance with the
provisions of law. Petition Denied.ReinstatementDefinitionAsian Terminals Inc. v.
VillanuevaThe 4 respondents were employees of Marina Port Services, Inc.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/november2006/143219.htm" \l
"_ftn4" \o "" ## (MPSI) and members of the Associated W orkers Union of the
Philippines (AW U). AW U president sought the dismissal from service of respondents
who were expelled from AW U. Respondents filed a complaint# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/november2006/143219.htm" \l
"_ftn6" \o "" ## for constructive illegal dismissal and unfair labor practice. LA
found the termination to be illegal. NLRC affirmed the decision which became final
and executory. Labor Arbiter Dinopol issued a partial writ of execution.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/november2006/143219.htm" \l
"_ftn8" \o "" ## Pursuant thereto, MPSI reinstated respondents. However,
respondents
alleged that MPSI did not reinstate them to their former positions or to
equivalent positions. Respondents filed a motion# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/november2006/143219.htm" \l

"_ftn13" \o "" ## for contempt against AW U and MPSI for non-compliance with the
partial writ of execution.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/november2006/143219.htm" \l
"_ftn14" \o "" ## Respondents also prayed for additional backwages because they
were allegedly not reinstated to their former positions or to equivalent positions.
Labor Arbiter Bartolabac held that it was proper for MPSI to reinstate them to
their former positions. Labor Arbiter Bartolabac granted additional backwages. NLRC
modified the order of Labor Arbiter Bartolabac by deleting the award of additional
backwages. The Court of Appeals held that at the time of respondents illegal
dismissal, respondents were already regular employees. MPSI asserts that it
reinstated respondents to their former positions. According to MPSI, respondents
were regular employees and that their designation as casual rotation employees
merely meant that they work on rotation. The NLRC found that MPSI indeed reinstated
respondents to their former positions or to substantially equivalent positions.
Reinstatement means restoration to a state or condition from which one had been
removed or separated.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/november2006/143219.htm" \l
"_ftn19" \o "" ## The person reinstated assumes the position he had occupied prior
to his dismissal.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/november2006/143219.htm" \l
"_ftn20" \o "" ## Reinstatement presupposes that the previous position from which
one had been removed still exists, or that there is an unfilled position which is
substantially equivalent or of similar nature as the one previously occupied by the
employee.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/november2006/143219.htm" \l
"_ftn21" \o "" ##Reinstatement means restoration to the former position occupied
prior to dismissal or to substantially equivalent position. Reinstatement does not
mean promotion. Promotion is based primarily on an employees performance during a
certain period. Just because their contemporaries are already occupying higher
positions does not automatically entitle respondents to similar positions. Petition
Granted.Composite Enterprises v. CaparosoCOMPOSITE ENTERPRISES hired EMILIO M.
CAPAROSO and JOEVE QUINDIPAN who filed a complaint for illegal dismissal upon their
termination. LA ruled in favor of the employees. Petitioner appealed ans said that
it cannot reinstate respondents to their former positions since their previous
positions were no longer available. Labor Arbiter issued a W rit of Execution
directing the Sheriff to effect respondent's reinstatement.Consistent with its
stand that physical reinstatement was no longer possible, petitioner reinstated
respondents into its payroll, conditioned on the NLRC's ruling on its motion to be
allowed to pay separation pay in lieu of reinstatement. NLRC set aside the Decision
of the Labor Arbiter, holding that there was no illegal dismissal since
respondents' contracts of employment were for a fixed period.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/159919.htm" \l
"_ftn8" \o "" ## CA# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/159919.htm" \l
"_ftn15" \o "" ## dismissed the petition for petitioner's failure to present proof
that its General Manager was duly authorized to sign the petition's Verification
and Certification of Non-Forum Shopping. Hence, the present petition. Petitioner
insists that the NLRC should have ordered the payment of separation pay since
respondents' reinstatement to their former positions was physically impossible due
to petitioner's implementation of a retrenchment program. Article 223 (3rd
paragraph) of the Labor Code,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/159919.htm" \l
"_ftn33" \o "" ## as amended by Section 12 of Republic Act (R.A.) No. 6715,#
HYPERLINK "http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/159919.htm"
\l "_ftn34" \o "" ## and Section 2 of the NLRC Interim Rules on Appeals under R.A.
No. 6715, Amending the Labor Code,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/159919.htm" \l
"_ftn35" \o "" ## provide that an order of reinstatement by the Labor Arbiter is
immediately executory even pending appeal. Reinstatement is the restoration to a

state or condition from which one has been removed or separated.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/159919.htm" \l
"_ftn38" \o "" ## The intent of the law in making a reinstatement order immediately
executory is much like a return to work order, i.e., to restore the status quo in
the workplace in the meantime that the issues raised and the proofs presented by
the contending parties have not yet been finally resolved.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/159919.htm" \l
"_ftn39" \o "" ## ##Payment of separation pay as a substitute for reinstatement is
allowed only under exceptional circumstances, viz: ##(1) when reasons exist which
are not attributable to the fault or are beyond the control of the employer, such
as when the employer -- who is in severe financial strait, has suffered serious
business losses, and has ceased operations -- implements retrenchment, or abolishes
the position due to the installation of labor-saving devices; ##(2) when the
illegally dismissed employee has contracted a disease and his
reinstatement will endanger the safety of his co-employees; or, ##(3) where
a strained relationship exists between the employer and the dismissed employee.#
HYPERLINK "http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/159919.htm"
\l "_ftn41" \o "" ####Retrenchment: it is a management prerogative consistently
recognized and affirmed by this Court. It isHowever subject to faithful compliance
with the substantive and procedural requirements laid down by law and
jurisprudence.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/159919.htm" \l
"_ftn42" \o "" ## For retrenchment to be considered valid the following substantial
requirements must be met: (a) the losses expected should be substantial and not
merely de minimis in extent; (b) the substantial losses apprehended must be
reasonably imminent such as can be perceived objectively and in good faith by the
employer; (c) the retrenchment must be reasonably necessary and likely to
effectively prevent the expected losses; and (d) the alleged losses if already
incurred and the expected imminent losses sought to be forestalled must be proved
by sufficient and convincing evidence.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/159919.htm" \l
"_ftn43" \o "" ####In this case, petitioner sought to justify the payment of
separation pay instead of reinstatement on the basis of its implementation of a
retrenchment program for serious and persistent financial difficulties.#
HYPERLINK "http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/159919.htm"
\l "_ftn46" \o "" ## However, petitioner only submitted as evidence the notice of
its intention to implement a retrenchment program, which it sent to the Department
of Labor and Employment on July 25, 2000.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/159919.htm" \l
"_ftn47" \o "" ## It did not submit its financial statements. the petition is
GRANTED. ExceptionsJohnson and Johnson v. Johnson Office and Sales UnionMa. Jesusa
Bonsol and Rizalinda Hirondo filed against petitioners Johnson & Johnson (Phils.),
Inc. and Janssen Pharmaceutica. Labor Arbiter dismissed the complaint. NLRC
rendered a Resolution,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/july2007/172799.htm" \l
"_ftn3" \o "" ## modifying the decision of the Labor Arbiter. The NLRC ruled that
the violations of company procedure committed by respondents did not constitute
serious misconduct or willful disobedience warranting their dismissal; hence,
respondents were entitled to reinstatement. Neither party appealed from the
resolution decision of the NLRC within the reglementary period. The Resolution
dated 14 December 2001 became final and executory. At the conference petitioners
reiterated their intention to satisfy respondents monetary award but the latter
refused and insisted on their reinstatement. NLRC issued a Resolution,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/july2007/172799.htm" \l "_ftn10"
\o "" ## which directed the reinstatement of respondents Aggrieved, petitioners
filed a petition for certiorari with the Court of Appeals. They contended that
respondents Motion for the Issuance of a W rit of Execution had the effect of
altering the Resolution, which had already become final and executory and which
clearly granted petitioners the option to either reinstate respondents to their

former positions or to pay the monetary award. Court of Appeals rendered the
assailed Decision dismissing the petition and affirming the resolutions of the NLRC
Hence, the instant petition. An illegally dismissed employee is entitled to
reinstatement as a matter of right. Over the years, however, case law developed
that where reinstatement is not feasible, expedient or practical, as where
reinstatement would only exacerbate the tension and strained relations between the
parties, or where the relationship between the employer and employee has been
unduly strained by reason of their irreconcilable differences, particularly where
the illegally dismissed employee held a managerial or key position in the
company, it would be more prudent to order payment of separation pay. Petition
DENIED. Closure of BusinessRetuya v. Hon. DumarpaPrivate respondent, Insular
Builders, Inc., is a family-owned corporation managed and operated principally by
Antonio Murillo, father, and his son, Rodolfo Murillo. It is engaged in the
construction business. Petitioners, on the other hand, were workers who have
rendered services in various corporations of private respondents. At the height of
the feud between private respondents Antonio Murillo and Rodolfo Murillo, the
former discharged the latter from his position as manager of Insular Builders, Inc.
and assumed control of the company. Petitioners found themselves in the middle of
the crossfire and were told to temporarily stop working. Petitioners filed a
complaint for illegal dismissal. Labor Arbiter found Murillos guilty of illegal
dismissal.Hence, this Petition.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/148848.htm" \l
"_ftn10" \o "" ##In the present case, petitioners were dismissed because of a
change of management.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/148848.htm" \l
"_ftn15" \o "" ## They were not given any prior written notice, but simply told
that their services were terminated on the day they stopped working for Insular
Builders, Inc. Under the circumstances, the CA was correct in upholding the labor
arbiters finding that they had been illegally dismissed.Having been illegally
dismissed, petitioners should be awarded back wages in accordance with Bustamante
v. NLRC. Therefore, in accordance with R.A. No. 6715, petitioners are entitled to
their full backwages, inclusive of allowances and other benefits or their monetary
equivalent, from the time their actual compensation was withheld from them up to
the time of their actual reinstatement.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/148848.htm" \l
"_ftn17" \o "" ##W hile it may be true that petitioners continued to work in the
same place and office as in their previous employment, it is equally true that they
had in fact been illegally dismissed by their previous employer. Thus, they lost
their former work status and benefits in a manner violative of the law.The records
indicate that reinstatement is no longer feasible. Insular Builders, Inc. has
ceased operations. Absent any showing that its business was deliberately stopped
to avoid reinstating the complaining employees, the amount of back wages shall be
computed from the time of their illegal termination, petitioners are entitled to
separation pay.These are distinct and separate reliefs given to alleviate the
economic setback brought about by the employees dismissal.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/148848.htm" \l
"_ftn20" \o "" ## The award of one does not bar the other.W HEREFORE, the Petition
is PARTLY GRANTED. The Decision of the CA is AFFIRMED with the MODIFICATION that
petitioners shall be paid full back wages from the date of their dismissal until
the cessation of the business operations Economic Business ConditionsUnion of
Supervisors v. Secretary of LaborLuna filed a complaint against respondent Bank,
charging it with unfair labor practice committed against its president Mr. Norberto
Luna. A supplemental complaint was filed by the same petitioner with the allegation
that after filing of the original complaint, the respondent Bank followed up its
harassment of Mr. Luna by terminating his employment as Branch Manager and as
trustee. At the meeting of the Board of Trustees of the RB Provident Fund, Mr. de
Vera proposed a reorganization of the fund in order to carry out the instruction of
the (respondent's) Board of Directors, which wants to have control of the fund so
as to tie it up with the Investment Money Market Operations of the bank. Mr. Luna

vehemently objected to this, saying that the Provident Fund does not belong to the
respondent bank but to the officers and employees. It was during the ensuing
discussion that Mr. Luna allegedly uttered the libelous remarks. Respondent bank
had wanted to do away with Luna even before that eventful February 12th meeting of
the PF Board of Trustees, when one of its Assistant Vice-Presidents, de Vera, who
had just been appointed to fill the temporary vacancy therein. This is evident from
the words of de Vera when he said, "the management proposed a reorganization
because it thinks that a new administration can serve the PF better. You have been
tried. W hy can we not appoint a new administrator and give us a chance to do things
in our way or fashion ? Luna challenged the accuracy of the stenographic notes of
the said meeting on the ground that Mrs. Unson was not a court stenographer and her
notes do not truly reflect all that transpired during the meeting. These
allegations were never refuted. The minutes should have been signed by him before
being officially released. W ithout such signature, neither probative value nor
credibility could be accorded to such minutes. The other basis for dismissal
insubordination appears to be likewise without justifiable ground. Such charge
arose out of the alleged refusal of Luna to obey the order of his superior, to turn
over the records of the Provident Fund to the new administrator. The Board of
Trustees, upon receipt of such written explanation, should have referred the matter
to the grievance machinery under the collective bargaining agreement. That the
respondent bank tried to maneuver Luna's ouster is evident from the way the
investigation was conducted by its Committee on Personnel. As shown in the above
narration of events, the testimonies of witnesses who were not even under oath were
taken without notice to Luna and without giving him a chance to cross-examine them.
The respondent bank, however, argues that Luna's union activities had nothing to do
with his dismissal, and that the same was for cause. THE RESPONDENT REPUBLIC BANK
IS HEREBY DIRECTED TO IMMEDIATELY REINSTATE COMPLAINANT NORBERTO LUNA TO HIS FORMER
POSITION W ITHOUT LOSS OF SENIORITY RIGHTS
???????????????????????????????????????????????????????????????????????????????????
???????????????????????Employees UnsuitabilityDivine W ord High School v. NLRC
Complaint filed by Luz Catenza, a high school teacher of petitioner Divine W ord
College, for illegal dismissal. She alleged in her complaint that she went on a
vacation leave but that when she tried to report back to work she was informed that
she is not anymore allowed to teach because of the "misdeeds" and "immoral acts" of
her husband Pablo Catenza, then the principal of petitioner school. Court agrees
with the following finding of the Labor Arbiter (which finding has also been
affirmed by the NLRC); A careful review and evaluation of the entire records of the
case show clearly that complainant was dismissed without a valid cause. ALL
throughout the records of the case it is very apparent that the main reason she was
dismissed was because of the alleged immoral conduct of her husband. Granting that
allegation is true, there being no clear showing that complainant's husband was
ever investigated or convicted of the serious act alluded to him, why should his
wife be made to suffer for her husband's indiscretion and infidelity. Scrutiny of
the records shows that petitioners were afforded every opportunity to present their
evidence but they repeatedly failed to appear at the four (4) consecutive hearings
scheduled for the purpose.W e hesitate ordering the reinstatement of private
respondent Luz Ballano Catenza as a high school teacher in the petitioner high
school, which is a Catholic institution, serving the educational and moral needs of
its Catholic studentry. Pay separation pay equivalent to one month pay for every
year of service, plus her backwages.Employees Retirement/OverageEspejo v. NLRC
EDUARDO M. ESPEJO was hired by Cooperative Insurance System of the Philippines
(CISP) as General Manager. cease and desist order was issued by the Office of the
Insurance Commission against CISP on grounds of capital impairment and margin of
solvency deficiency. In order to put up the needed capital requirements, Board
authorized the sale of some CISP properties, including the company car assigned to
petitioner for his personal use. Petitioner objected to such sale. Board overruled
petitioners opposition prompting the latter to tender his resignation. Petitioner
filed a case against CISP for illegal dismissal. Labor Arbiter rendered a decision
ordering CISP to (1) reinstate petitioner to his former position. NLRC promulgated

its decision affirming the finding of illegal dismissal by the Labor Arbiter but
modifying the rest thereof by deleting the reinstatement of petitioner for having
become moot and academic considering that he (petitioner) was already 60 years old.
SC sustains the challenged decision insofar as it disallowed reinstatement. The
law recognizes as valid any retirement plan, agreement or management policy
regarding retirement at an earlier or older age. In the case of petitioner, CISP
did not have any retirement plan for its employees. In such situation, Sec. 13,
Book IV, of the Omnibus Rules Implementing the Labor Code provides that in the
absence of a retirement plan, agreement or policy an employee may be retired upon
reaching the age of sixty (60) years.Thus, an employee held to be illegally
dismissed cannot be reinstated if he had already reached the age of sixty (60)
years at the time of his second complaint (pressing for reinstatement). However
considering that petitioner has already reached the statutory retirement age of
sixty (60), we agree with NLRC that petitioner is entitled only to backwages.An
award of damages would be improper. The decision to sell certain company
properties, including
the complainants car, was not that of Director Benjamin Cruz (the complainants
ostensible enemy) alone, but that of at least a majority of the respondents board
of directors.NLRC AFFIRMED.Antipathy and Antagonism Strained RelationsCapitol
Medical Center Inc. v. MerisCapitol Medical Center, Inc. hired Dr. Cesar Meris one
of its stockholders, as in charge of its Industrial Service Unit (ISU). Dr. Meris
received from Capitols president and chairman of the board, Dr. Thelma NavaretteClemente (Dr. Clemente), a notice advising him of the managements decision to
close or abolish the ISU. Dr. Meris thus filed on September 7, 1992 a complaint
against Capitol and Dr. Clemente for illegal dismissal. Labor Arbiter held that the
abolition of the ISU was a valid and lawful exercise of management prerogatives.
NLRC modified the Labor Arbiters decision. It held that in the exercise of
Capitols management prerogatives, it had the right to close the ISU. The appellate
court went on to hold that the ISU was not in fact abolished, its operation and
management having merely changed hands from Dr. Meris to Dr. Clemente. Hence, the
present petition. The right to close the operation of an establishment or
undertaking is explicitly recognized under the Labor Code as one of the authorized
causes in terminating employment of workers, the only limitation being that the
closure must not be for the purpose of circumventing the provisions on termination
of employment embodied in the Labor Code.The phrase closures or cessation of
operations of establishment or undertaking includes a partial or total closure or
cessation AND That not due to serious business losses or financial reverses
recognizes the right of the employer to close or cease his business operations or
undertaking even if he is not suffering from serious business losses or financial
reverses. It would indeed be stretching the intent and spirit of the law if a court
were to unjustly interfere in managements prerogative to close or cease its
business operations just because said business operation or undertaking is not
suffering from any loss. In the case at bar, Capitol failed to sufficiently prove
its good faith in closing the ISU. Existence of business losses is not required to
justify the closure or cessation of establishment or undertaking as a ground to
terminate employment of employees. Even if the ISU were not incurring losses, its
abolition or closure could be justified on other grounds like that proffered by
Capitol extinct demand. Capitol failed, however, to present sufficient and
convincing evidence to support such claim of extinct demand. The termination of the
services of Dr. Meris not having been premised on a just or authorized cause, he is
entitled to either reinstatement or separation pay if reinstatement is no longer
viable, and to backwages. Reinstatement, however, is not feasible in case of a
strained employer-employee relationship or when the work or position formerly held
by the dismissed employee no longer exists, as in the instant case. Dr. Meris is
thus entitled to payment of separation pay at the rate of one (1) month salary for
every year of his employment, with a fraction of at least six (6) months being
considered as one(1) year, and full backwages from the time of his dismissal from
April 30, 1992 until the expiration of his term as Chief of ISU. CA affirmed.
W estmont Pharmaceuticals v. Samaniego supra 25Unilab hired Samaniego as

Professional Service Representative of its marketing arm, W estmont. Later, Unilab


promoted him as Senior Business Development Associate and assigned him in Isabela
as Acting District Manager of W estmont. He was transferred to Metro Manila pending
investigation of his involvement in a sales discount and Rx trade-off controversy.
He was then placed under "floating status" and assigned to perform duties not
connected with his position, like fetching at the airport physicians coming from
the provinces; making deposits in banks; fetching field men and doing messengerial
works. His transfer to Metro Manila resulted in the diminution of his salary.
Ricardo Samaniego then filed a complaint for illegal dismissal with the LA who
ordered his reinstatement and payment of his full backwages. NLRC declared the LAs
Decision null and void. CA reinstated LA. Hence, these consolidated petitions.
Samaniego claims that upon his reassignment and/or transfer to Metro Manila, he was
placed on "floating status" and directed to perform functions not related to his
position. For their part, W estmont and Unilab explain that his transfer is based on
a sound business judgment, a management prerogative. In constructive dismissal, the
employer has the burden of proving that the transfer of an employee is for just and
valid grounds, such as genuine business necessity. The employer must be able to
show that the transfer is not unreasonable, inconvenient, or prejudicial to the
employee. It must not involve a demotion in rank or a diminution of salary and
other benefits. If the employer cannot overcome this burden of proof, the
employees transfer shall be tantamount to unlawful constructive dismissal.
W estmont and Unilab failed to discharge this burden. Samaniego was unceremoniously
transferred from Isabela to Metro Manila. W e hold that such transfer is
economically and emotionally burdensome on his part. He was constrained to maintain
two residences. W orse, immediately after his transfer to Metro Manila, he was
placed "on floating status" and was demoted in rank, performing functions no longer
supervisory in on the part of the employee that it could foreclose any choice by
him except to forego his continued employment. This was what happened to Samaniego.
However, the circumstances obtaining in this case do not warrant the reinstatement
of Samaniego. Antagonism caused a severe strain in the relationship between him and
his employer. A more equitable disposition would be an award of separation pay
equivalent to at least one month pay, or one month pay for every year of service,
whichever is higher (with a fraction of at least six [6 months being considered as
one [1 whole year),9 in addition to his full backwages, allowances and other
benefits.CA AFFIRMED.Offer to ReinstateRanara v. NLRCPetitioner Carlos Ranara had
been working as a driver with Oro Union Construction Supply when he was told by Fe
Leonar, secretary of the other private respondent, Jimmy Ting Chang, not to come
back the following day. Thinking that she was only joking, be reported for work as
usual. Chang said he was in a hospital in Manila and that he had not authorized
Leonar, or even his mother who was the officer-in-charge during his absence, to
terminate Ranara's employment.W e reject as a rank falsity the private respondents'
claim that the petitioner had not been illegally dismissed and in fact abandoned
his workPrivate respondents themselves claim they have a staff of less than ten
persons, and Chang or his mother could not have failed to notice Ranara's absence
after November 1, 1989. Yet they took no steps to rectify the secretary's act if it
was really unauthorized. Neither can Ranara's rejection of Chang's offer to
reinstate him be legally regarded as an abandonment because the petitioner had been
placed in an untenable situation that left him with no other choice. Given again
the smallness of the private respondents' staff, Ranara would have found it
uncomfortable to continue working under the hostile eyes of the employer who had
been forced to reinstate him.It was not as if Ranara were only one among many other
complainants ordered reinstated in a big company, for whatever enmity the employer
might harbor against them would be diluted and less personalized, so to speak.
There would be a certain degree of anonymity, and a resultant immunity from
retaliationIt is clear that the petitioner was illegally dismissed without even the
politeness of a proper notice. The fact that his employer later made an offer to
re-employ him did not cure the vice of his earlier arbitrary dismissal. The wrong
had been committed and the harm done. NLRC is AFFIRMED.BackwagesEffect of Failure
OrderAurora Land etc v. NLRCDagui was hired by Doa Aurora Suntay Tanjangco in 1953

to take charge of the maintenance and repair of the Tanjangco apartments and
residential buildings. Upon the death of Doa Aurora Tanjangco in 1982, her
daughter, petitioner Teresita Tanjangco Quazon, took over the administration of all
the Tanjangco properties. Mrs. Quazon suddenly told him: "W ala ka nang trabaho mula
ngayon,"# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1997/jan1997/114733.htm" \l
"_edn3" \o "" ## on the alleged ground that his work was unsatisfactory. Private
respondent, who was then already sixty-two (62) years old, filed a complaint for
illegal dismissal with the Labor Arbiter. Honorio Dagui earns a measly sum of
P180.00 a day (latest salary).# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1997/jan1997/114733.htm" \l
"_edn7" \o "" ## Ostensibly, and by no stretch of the imagination can Dagui qualify
as a job contractor. The bare allegation of petitioners, without more, that private
respondent Dagui is a job contractor has been disbelieved by the Labor Arbiter and
NLRC. Private respondent Dagui should likewise be considered a regular employee by
the mere fact that he rendered service for the Tanjangcos for more than one year,
that is, beginning 1953 until 1982, under Doa Aurora; and then from 1982 up to
June 8, 1991 under the petitioners, for a total of twenty-nine (29) and nine (9)
years respectively. The Court, however, is bewildered why only an award for
separation pay in lieu of reinstatement was made by both the Labor Arbiter and the
NLRC. No backwages were awarded. It must be remembered that backwages and
reinstatement are two reliefs that should
be given to an illegally dismissed employee. They are separate and distinct from
each other. In the event that reinstatement is no longer possible, as in this
case,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1997/jan1997/114733.htm" \l
"_edn33" \o "" ## separation pay is awarded to the employee. The award of
separation pay is in lieu of reinstatement and not of backwages. In other words, an
illegally dismissed employee is entitled to (1) either reinstatement, if viable, or
separation pay if reinstatement is no longer viable, and (2) backwages.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1997/jan1997/114733.htm" \l
"_edn34" \o "" ## Payment of backwages is specifically designed to restore an
employee's income that was lost because of his unjust dismissal.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1997/jan1997/114733.htm" \l
"_edn35" \o "" ## On the other hand, payment of separation pay is intended to
provide the employee money during the period in which he will be looking for
another employment. # HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1997/jan1997/114733.htm" \l
"_edn36" \o "" ##Petition is partly GRANTED. St. Michaels Institution v. Santos
Carmelita Santos, Florencio Magcamit and Albert Rosarda were regular classroom
teachers and Their service with the school was abruptly interrupted when each of
them was served a notice of termination of employment stemming from a public rally
held at the town plaza aimed at calling the attention of the school administration
to certain grievances relative to substandard school facilities and the economic
demands of teachers and other employees of St. Michaels Institute. The dismissal
meted out on the respondents for dereliction of duty for one school day and
denouncing school authority, appears to be too harsh a penalty. In termination of
employment disputes that the burden of proof is always on the employer to prove
that the dismissal was for a just and valid cause.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/..%5C..
%5C2001%5Cdec2001%5C145280.htm" \l "_edn22" \o "" ## Evidence must be clear,
Misconduct is the transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in character, and implies
wrongful intent and not mere error of judgment.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/..%5C..
%5C2001%5Cdec2001%5C145280.htm" \l "_edn23" \o "" ## As a just cause for
termination, the misconduct must be serious. On the other hand, disobedience, as
a just cause for termination, must be willful or intentional. In the instant case,
evidence is wanting on the depravity of conduct, and willfulness of the

disobedience on the part of the respondents. On the matter of the award of


backwages, petitioners advance the view that by awarding backwages, the appellate
court unwittingly reversed a time-honored doctrine that a party who has not
appealed cannot obtain from the appellate court any affirmative relief other than
the ones granted in the appealed decision.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/..%5C..
%5C2001%5Cdec2001%5C145280.htm" \l "_edn26" \o "" ## W e do not agree.Article 279 of
the Labor Code, as amended, mandates that an illegally dismissed employee is
entitled to the twin reliefs of (a) either reinstatement or separation pay, if
reinstatement is no longer viable, and (b) backwages.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/..%5C..
%5C2001%5Cdec2001%5C145280.htm" \l "_edn29" \o "" ## Both are distinct reliefs
given to alleviate the economic damage suffered by an illegally dismissed employee#
HYPERLINK "http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/..%5C..
%5C2001%5Cdec2001%5C145280.htm" \l "_edn30" \o "" ## and, thus, the award of one
does not bar the other. Both reliefs are rights granted by substantive law which
cannot be defeated by mere procedural lapses.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/..%5C..
%5C2001%5Cdec2001%5C145280.htm" \l "_edn31" \o "" ## Petition is hereby DENIED.
ComputationMercury Drug Co. Inc v. CIRNardo Dayao was employed by the petitioners
originally as driver, later assigned as delivery man, then as checker and was last
promoted to the position of assistant chief checker in the checking department.
Dayao in vain urged herein petitioners to pay them overtime pay, criticized their,
employees' association for failing to protect the welfare of the employees by not
securing such additional compensation for overtime, and campaigned among his coemployees to organize another labor union. Hearing of Dayao's union activities
company told him to resign and persuaded him to accept the amount of P562.50 as
termination pay and to sign a clearance stating to the effect that he has no claims
whatsoever of any kind and nature against herein petitioners. Exactly two years and
fifteen days from his separation on April 10, 1961, Dayao filed a complaint for
unfair labor practice against herein petitioners for dismissing him because of his
having campaigned among his co-employees to become members of a new labor union
that he was then organizing. Unfair labor practice charge with the prayer for
reinstatement with back wages should be filed within a reasonable period of time.
But laches, like estoppel, should also be alleged as a defense in the answer,
otherwise the same is considered renounced. However, the lapse of two years and 15
days from the dismissal from the service to the filing of the ULP charge is not an
unreasonable period of time under the circumstances. Finally, if the dismissal of
herein private respondent Dayao was for just cause, then there was no reason for
petitioners-employers to give him termination pay; because under the Termination
Pay Law, otherwise known as Republic Act No. 1052, as amended by Republic Act No.
1787, the employee whose services are terminated for just cause is not entitled to
termination pay. The remaining question is how much back wages shall be allowed
private respondent Dayao.The period of delay in instituting this ULP charge with
claim for reinstatement and back wages, although within the prescriptive period,
should be deducted from the liability of the employer to him for back wages.The
employer in the case at bar should be directed to pay private respondent Dayao back
wages equivalent to one year, eleven months, and fifteen days without further
disqualifications.In fairness to the employer, he should not be compelled to
reinstate an employee who is no longer physically fit for the job from which he was
illegally ousted. W HEREFORE, THE PETITION IS HEREBY DISMISSED AND PETITIONERS ARE
HEREBY DIRECTED:(1) TO PAY PRIVATE RESPONDENT NARDO DAYAO BACK W AGES EQUIVALENT TO
ONE YEAR, ELEVEN MONTHS, AND FIFTEEN DAYS; .(2) TO REINSTATE HIM AFTER
CERTIFICATION OF HIS PHYSICAL FITNESS BY A GOVERNMENT PHYSICIAN; AND(3) TO PAY THE
COSTS. Bustamante v. NLRCThe decision of the Labor Arbiter dated 26 April 1991 is
AFFIRMED with the modification that backwages shall be paid to petitioners. The
first labor relations law governing the award of backwages was Republic Act No.
875, the Industrial Peace Act, approved on 17 June 1953. Itogon-Suyoc Mines, Inc.
v. Sagilo-Itogon W orkers' Union,# HYPERLINK

"http://www.supremecourt.gov.ph/jurisprudence/1996/nov1996/111651.htm" \l
"_edn7" \o "" ## this Court restated the guidelines for deternination of total
backwages, thus:"First. To be deducted from the backwages accruing to each of the
laborers to be reinstated is the total amount of earnings obtained by him from
other employmentSecond. Likewise, in mitigation of the damages that the dismissed
respondents are entitled to, account should be taken of whether in the exercise of
due diligence respondents might have obtained income from suitable remunerative
employment. From this ruling came the burden of disposing of an illegal dismissal
case on its merits of determining whether or not the computation of the award of
backwages is correct. Mercury Drug Co., Inc., et al. v. CIR, et al.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/1996/nov1996/111651.htm" \l
"_edn8" \o "" ##: Justice Teehankee dissented from the majority view that the
employee in said case should be awarded backwages only for a period of 1 year, 11
months and 15 days which represented the remainder of the prescriptive period after
deducting the period corresponding to the delay incurred by the employee in filing
the complaint for unfair labor practice and reinstatement. Justice Teehankee
opined that: " an award of back wages equivalent to three years (where the case
is not terminated sooner) should serve as the base figure for such awards without
deduction, subject to deduction where there are aggravating circumstances (e.g.
oppression or dilatory appeals) on the employer's part. The effectivity of P.D. 442
Art 279. the Court enforced the Mercury Drug rule and in effect qualified the
provision under P.D. No. 442 by limiting the award of backwages to three (3) years.
On 21 march 1989 Republic Act No. 6715 took effect amending the Labor Code.
##Article 279 thereof states in part:"ART. 279. Security of Tenure. . . . An
employee who unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary equivalent
computed from the time his compensation was withheld from him up to the time of his
actual reinstatement." (underscoring supplied)##An illegally dismissed employee is
entitled to his full backwages from the time his compensation was withheld from him
(which as a rule, is from the time of his illegal dismissal) up to the time of his
actual reinstatement. The clear legislative intent of the amendment in Rep. Act
No. 6715 is to give more benefits to workers than was previously given them under
the Mercury Drug rule or the "deduction of earnings elsewhere" rule. Thus, a
closer adherence to the legislative policy behind Rep. Act No. 6715 points to "full
backwages" as meaning exactly that, i.e., without deducting from backwages the
earnings derived elsewhere. Peititon Denied.Star Paper Corporation v. Espiritu
Complainants in this case worked in respondents paper manufacturing business in
various capacities as machine operator, bookbinding head and/or helper. They
claimed that, for refusal to sign for the ratification of an addendum to an
existing Collective Bargaining Agreement which was intended to effect a reduction
in their leave benefits of fifteen (15) days for every year of service, they were
subjected to acts of harassment. They were instructed by the company to receive a
Memorandum of Transfer which they refused. The Court agrees with the analysis and
conclusion of the CA that, based on the facts of the case, respondents were
constructively dismissed. It must be stressed that where an employee complains of
constructive dismissal, it is the employer who bears the burden of proving that the
transfer of an employee is for just and valid grounds, such as genuine business
necessity, and such transfer is not unreasonable, inconvenient, or prejudicial to
the employee. The combined circumstances of the immediate transfer of respondents
to far-off provinces after their refusal to sign the signature sheet of the
document for the ratification of the Addendum to the Collective Bargaining
Agreement point to the fact that the transfers are motivated by ill-will on the
part of petitioner.Petitioner, therefore, failed to sufficiently prove that
respondents transfer is for a just and valid cause. the Court has ruled in a long
line of cases that where an employee would have been entitled to reinstatement with
full backwages, but circumstances, i.e., strained relationships, makes
reinstatement impossible, the more equitable disposition would be an award of
separation pay equivalent to at least one month pay, or one month pay for every

year of service, whichever is higher, in addition to full backwages, inclusive of


allowances, and other benefits or their monetary equivalent, computed from the time
the employees compensation was withheld from him up to the time of his supposed
actual reinstatement.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/November2006/154006.htm" \l
"_ftn14" \o "" ## In this case, since payment of backwages and separation pay were
ordered only upon promulgation of the CA Decision. The computation of full
backwages, inclusive of allowances, and other benefits or their monetary
equivalent, should be computed from the time the respondents compensation was
withheld from them up to the time of the finality of this decision. Petition is
DENIED.Candano Shipping Lines Inc v. Florantina Sugata-OnCandano Shipping hired
Melquiades Sugata-on was employed by Candano Shipping as Third Marine Engineer. The
vessel encountered rough seas and strong winds while traversing the waters of
Lianga Bay, Surigao del Sur, causing her to tilt. M/V David, Jr. sank together with
her cargo at around eleven oclock in the evening. Upon learning of Melquiades
fate, Florentina immediately went to the office of Candano Shipping in Manila to
claim the death benefits of her husband but it refused to pay. # HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/march2007/163212.htm" \l "_ftn6"
\o "" ##Such refusal prompted Florentina to institute an action seeking indemnity.
She grounded her case on the provision of Article 1711# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/march2007/163212.htm" \l "_ftn7"
\o "" ## of the New Civil Code, which imposes upon the employer liability for the
death of his employee in the course of employment, even if the death is caused by a
fortuitous eventRTC resolved the controversy in favor of Florentina and
ratiocinated that the provision of Article 391 of the New Civil Code on presumptive
death had become operative since the period of four years had already elapsed since
Melquiades was reported missing Appellate court applied the standard prescribed by
Article 194 of the Labor Code of the PhilippinesHence, this instant Petition
Floresca v. Philex Mining Company: employee cannot pursue both remedies
simultaneously but has the option to proceed by interposing one remedy and waiving
his right over the other. As we have explained in Floresca, this doctrinal rule is
rooted on the theory that the basis of the compensation under the W orkmens
Compensation Act is separate and distinct from the award of damages under the Civil
Code. In the case at bar, Florentina was forced to institute a civil suit for
indemnity under the New Civil Code, after Candano Shipping refused to compensate
her husbands death.In Villa Rey, the common carrier was made liable for the death
of its passenger on board a passenger bus owned and operated by Villa Rey Transit,
Inc. going to Manila from Lingayen, Pangasinan.The obligation of the common
carrier to indemnify its passenger or his heirs for injury or death arose from the
contract of carriage entered into by the common carrier and the passenger. In the
same breadth, the employer shall be liable for the death or personal injury of its
employees in the course of employment as sanctioned by Article 1711 of the New
Civil Code.In the case at bar, only the award of actual damages, specifically the
award for unearned income is warranted by the circumstances since it has been duly
proven that the cause of death of Melquiades is a fortuitous event for which
Candano Shipping cannot be faulted. The formula for the computation of unearned
income is:Net Earning Capacity = life expectancy x (gross annual income reasonable and necessary living expenses). Life expectancy is determined in
accordance with the formula: 2 / 3 x [80 age of deceased at the time of death]
Life expectancy = 2 / 3 x [80 age of deceased at the time of death]
2 /3 x [80 56]
2 / 3 x [24] Life expectancy = 16The argument
raised by Candano Shipping that the formula for determining the life expectancy
under Villa Rey cannot be automatically applied without proof of the basis for the
expected length of life of a Filipino does not merit our consideration. In the case
at bar, Candano Shipping cannot validly assert that the standard life expectancy
factor laid down in Villa Rey cannot be applied in this case. Petition is DENIED.
Fringe BenefitsAcesite Corp. v. NLRCLeo A. Gonzales was hired on October 18, 1993
as Chief of Security of Manila Pavillion Hotel. Gonzales took a 4-day sick leave
and took emergency leave he again took a 12-day vacation leave, thereby using up

all leaves that he was entitled for the year. It appears that on May 7, 1998,
Angerbauer issued the following Notice of Termination# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2005/jan2005/152308.htm" \l
"_ftn10" \o "" #[10]# through an inter-office memo: Gonzales thus filed on May 27,
1998 a complaint against Acesite for illegal dismissal. Labor Arbiter, by Decision
of February 7, 2000, dismissed the complaint. NLRC reversed that of the Labor
Arbiter, Court of Appeals, finding that Gonzales was illegally dismissed, affirmed
with modification the NLRC decision. In the present case, the records do not show
compliance by petitioners with the two (2)-notice rule prescribed in the above
provision of law. Although several telegrams were sent to private respondent
Gonzales, there is not one (1) telegram Moreover, as previously discussed, bad
faith or malice was not proven. Angerbauer, acting on behalf of Acesite, was, like
Gonzales, perhaps also too presumptuous in thinking that the telegrams ordering the
latter to report for work were all received on time, drawing him to hastily
conclude that Gonzales intentionally disobeyed the orders contained therein. As to
the deletion of the fringe benefits or their monetary equivalent, this Court
agrees with Gonzales that it is not in accord with law and jurisprudence. Article
279 of the Labor Code provides:ART. 279 SECURITY OF TENURE. In cases of regular
employment, the employer shall not terminate the services of an employee except for
just cause or when authorized by this Title. An employee who is unjustly dismissed
from work shall be entitled to reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent computed from the time his compensation
was withheld from him up to the time of his actual reinstatement. (Emphasis and
underscoring supplied). Court affirms the assailed decision.Damages and Attorneys
feesPhilippine Aeolus Auto-Motive United Corp v. NLRCA memorandum was issued to
Rosalinda Cortez, the company nurse, requiring her to explain why no disciplinary
action should be taken against her for throwing a stapler at W illiam Chua, the
plant manager, for the loss of money to be deposited and for asking a co-employee
to punch in her time card making it appear she was in the office earlier than her
actual time to arrive. The company placed her under preventive suspension. She was
terminated from services. She filed a complaint for illegal dismissal. LA held the
termination to be legal. NLRC reversed and found her the victim of illegal
dismissal. Thus this petition. The court held that for misconduct or improper
behavior to be a just cause for dismissal, it must be serious, relate to the
performance of the employees duties and must show that the employee has become
unfit to continue working for the employer.
The throwing of a stapler though serious misconduct, was not done in the
performance of her duties. Also, the other offenses are not connected to her duties
as a company nurse. As for the punching in of the time card, this is a violation of
company rules but is not SERIOUS misconduct. Also, it was found that Chua has been
continually harassing her since her first year at work. That she failed to report
the sexual harassment right away is of no matter. For moral damages, it must be
proven that the complainant suffered anxiety, sleepless nights, besmirched
reputation and social humiliation. For exemplary damages are granted by way of
example or correction for the public good. Her dismissal even her 30 day suspension
was not found by the court to be commensurate to her offense. NLRC affirmed. Reyes
v. CADr. Pedrito demanded PhilMalay for separation payment similar to its employees
as well as for underpayment of salary, a new car, life insurance policy, office
rentals and legal service costs he incurred. The LA claimed that the retrenchment
of PhilM is valid. NLRC reduced the awards. His appeal was dismissed by CA for
failure to attach position paper, decision by Labor Arbiter and Memorandul of
Appeal.Court of Appeals should have reconsidered its dismissal of petitioners
appeal after petitioner submitted a certified true copy of the MeTCs decision. It
was clear from the petition for review that the RTC incurred serious errors in
awarding damages to private respondents which were made without evidence to support
the award and without any explanation# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/154448.htm" \l
"_ftn17" \o "" ##In the same vein, there is no basis in awarding moral and

exemplary damages, inasmuch as respondents were not shown to have acted in bad
faith in initially refusing to award separation pay equivalent to 1 month salary
for every year of service. Respondents even offered to pay petitioner separation
pay, albeit in an amount not acceptable to petitioner. Moral damages are
recoverable only where the act complained of is tainted by bad faith or fraud, or
where it is oppressive to labor, and done in a manner contrary to morals, good
customs, or public policy. Exemplary damages may be awarded only if the act was
done in a wanton, oppressive, or malevolent manner.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/154448.htm" \l
"_ftn27" \o "" ## None of these circumstances exist in the present case. In its
extraordinary concept, attorneys fees are deemed indemnity for damages ordered by
the court to be paid by the losing party in a litigation. The instances where
these may be awarded are those enumerated in Article 2208 of the Civil Code,
specifically par. 7 thereof which pertains to actions for recovery of wages, and is
payable not to the lawyer but to the client, unless they have agreed that the award
shall pertain to the lawyer as additional compensation or as part thereof. The
extraordinary concept of attorneys fees is the one contemplated in Article 111 of
the Labor Code, which provides:Art. 111. Attorneys fees. (a) In cases of
unlawful withholding of wages, the culpable party may be assessed attorneys fees
equivalent to ten percent of the amount of wages recoveredThe afore-quoted Article
111 is an exception to the declared policy of strict construction in the awarding
of attorneys fees. Although an express finding of facts and law is still
necessary to prove the merit of the award, there need not be any showing that the
employer acted maliciously or in bad faith when it withheld the wages. There need
only be a showing that the lawful wages were not paid accordingly, as in this
case.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/154448.htm" \l
"_ftn33" \o "" ##In carrying out and interpreting the Labor Code's provisions and
its implementing regulations, the employees welfare should be the primordial and
paramount consideration. In the case at bar, what was withheld from petitioner was
not only his salary, vacation and sick leave pay, and 13th month pay differential,
but also his separation pay. Hence, pursuant to current jurisprudence, separation
pay must be included in the basis for the computation of attorneys fees.
Petitioner is entitled to attorneys fees equivalent to 10% of his total monetary
award.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/154448.htm" \l
"_ftn35" \o "" ##Petition is GRANTED. Elcee Farms v. NLRCElcee Farms entered into
a Lease Agreement with Garnele Aqua Culture Corporation (Garnele).Garnele subleased Hacienda Trinidad to Daniel Hilado, who operated HILLA. The contract of
lease executed between Garnele and HILLA stipulated the continued employment of 120
of the former employees by the latter, but the contract was silent as to the
benefits which may accrue to the employees Soon after HILLA took over it entered
into a CBA with another union and due to their refusal to join the labor union, the
private respondents were terminated by HILLA. Pampelo Semillano and one hundred
forty-three (143) other complainants, represented by their labor union, Sugar
Agricultural Industrial Labor Organization (SAILO), filed this complaint for
illegal dismissal. Labor Arbiter dismissed their claim for damages and denied all
claims. Complainants appealed and NLRC affirmed the amount awarded by the Labor
Arbiter as separation pay and allowed their petition for damages for disturbance of
their right to labor. The three sets of parties (1) the complainants; (2) Elcee
Farms and Corazon Saguemuller; and (3) HILLA filed their own Motions for
Reconsideration. The NLRC ruled that the simulation of the lease agreement between
Elcee Farms and Garnele was made in bad faith and thus the award of damages
isjustifed. Thus this Petition for Certiorari.The court held that the above
findings show that even after the execution of the lease agreement between Elcee
and Garnele, Elcee continued to act as the employer of the farm workers of Hacienda
Trinidad. Elcee Farms effectively ceased to operate and manage Hacienda Trinidad
when, through Garnele, it leased the hacienda to HILLA. After the said lease was
executed, the employer-employee relationship between the farm employees and Elcee

Farms was severed. The lease agreement between Garnele and Daniel Hilado identified
the employees who will continue working with the new management and stipulated that
workers who were not in the list, whether new or employed in the past, will not be
employed by the lessee. However, the court held that, moral damages are recoverable
when the dismissal of an employee is attended by bad faith or fraud or constitutes
an act oppressive to labor, or is done in a manner contrary to good morals, good
customs or public policy. Exemplary damages, on the other hand, are recoverable
when the dismissal was done in a wanton, oppressive, or malevolent manner. Bad
faith on the part of Elcee Farms is shown by the act of simulating a lease
agreement with Garnele in order to evade paying private respondents the proper
amount of separation benefits based on the number of years they worked in the
hacienda, as provided by the Labor Code. Records show that Elcee Farms did not pay
any separation benefits to the private respondents when they allegedly leased the
hacienda to Garnele, and again when the hacienda was leased to Daniel Hilado.
Clearly, there was a cessation of operations of Elcee Farms, but although they were
absorbed by the new management of the hacienda, in the absence of any showing that
the latter has assumed the responsibilities of the former employer, they will be
considered as new employees. Petition is partially granted and the awards of
damages and separation pay are given. (modification: Corazon Saguemuller should not
be held subsidiarily liable)Separation PayHa Yuan Restaurant v. NLRCJuvy Soria
worked as a cashier in petitioners establishment located inside the SM Food Court
Makati.Respondents co-worker Sumalague was eating at the back of the store, when
respondent rushed toward Ma. Teresa Sumalague and hit the latter on the face
causing injuries and resulting in a scuffle between the two. Despite the
intervention of their supervisor Fiderlie Recide, they were not pacified. They were
brought to the SM Food Court Administration Office and then to the Customer
Relations Office for further investigation.SM Food Court Manager banned the two
from working within the SM Food Courts premises. Respondent then filed with the
Labor Arbiter a complaint for illegal dismissalLA dismissed case. NLRC affirmed. CA
affirmed NLRC. Hence, herein petition The court held in Philippine Long Distance
Telephone Co. vs. NLRC that separation pay shall be allowed as a measure of social
justice only in those instances where the employee is validly dismissed for causes
other than serious misconduct or those reflecting on his moral character.
Separation pay therefore, depends on the cause of dismissal, and may be accordingly
awarded provided that the dismissal does not fall under either of two
circumstances: (1) there was serious misconduct, or (2) the dismissal reflected on
the employees moral character.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/jan2006/G.R.%20No.%20147719.htm"
\l "_ftn5" \o "" ##The Court holds that respondents cause of dismissal in this
case amounts as a serious misconduct and as such, separation pay should not have
been awarded to her. Thus, the petition should be granted.Her cause of dismissal
amounting to a serious misconduct, respondent is not entitled to an award of
separation pay. As further stated in Philippine Long Distance Telephone Co. vs.
NLRC: The policy of social justice is not intended to countenance wrongdoing simply
because it is committed by the underprivileged.Social
justice cannot be permitted to be refuge of scoundrels any more than can equity be
an impediment to the punishment of the guilty.Petition is GRANTED. Amkor
Technology Philippine Inc. v. JuancoIn our Decision of September 20, 2006, we
affirmed with modification the Decision dated October 20, 2004 of the Court of
Appeals finding that Nory A. Juangco, respondent, was illegally dismissed. W e
upheld the appellate courts ruling that respondent is entitled to separation pay,
backwages and other privileges and benefits. However, we deleted the awards for
moral and exemplary damages for lack of basis. Petitioners anchored their motion
for partial reconsideration on our recent Decision in Domondon v. National Labor
Relations CommissionThe NLRC, relying on the affidavits of the officers of
petitioner-company, found that respondent was not coerced into signing the notice
of voluntary retirement. On the other hand, the Court of Appeals found that
respondent was coerced to retire.Records show that due to business losses,
petitioner-company saw the need to reduce its existing manpower complement.

Several meetings were held among its officers and department heads to discuss
actions to be taken to implement the same. Respondent denied the due execution of
her Release Quitclaim and W aiver, alleging that she signed the same under duress
and intimidation. She claimed that she was threatened that she will receive
nothing if she will not sign it.The voluntariness of her retirement is attested
and confirmed by top ranking officials of petitioner- company then present during
the meeting in October 2001. She failed to present evidence to contradict their
statements. Respondent is a well-educated woman holding a managerial position. It
is highly improbable that with her employment stature and educational attainment,
she could have been duped into signing a retirement letter against her will.It is
safe to conclude that such retirement package was the reason why she opted to
retire. Respondent received her retrenchment backwage a week after she submitted
her resignation paper. She had ample time to mull over what courses of action to
take if indeed she was illegally dismissed. Instead, she returned to the company
to sign the Receipt and Release W aiver and Quit Claim and to receive her retirement
package. Thereafter, she looked for employment in other companies.It is thus
clear that the filing of the complaint was merely an afterthought when she failed
to find another employment. W e GRANT petitioners Motion for Partial
Reconsideration and RECONSIDER our Decision. Central Pangasinan Electric
Cooperative v. NLRCLito Cagampan was the Acting Power Use Coordinator of petitioner
Central Pangasinan Electric Cooperative, Inc. (CENPELCO). Cagampan received a check
amounting to P100,831 from Aurora B. Bonifacio as partial payment for the
installation of a transformer in her building and expansion of a three-phase line.
Bonifacio informed CENPELCOs General Manager Salvador de Guzman of the said
transaction and that Cagampan did not issue a receipt for the partial payment
made. She also requested the immediate installation of the transformer.
Thereafter, Cagampan was directed to explain in writing why he should not be
disciplined or dismissed for the unauthorized acceptance of payments for new
electrical connections. Cagampan was found guilty of violating CENPELCOs Code of
Ethics and Discipline, namely: (1) unauthorized acceptance of payments for new
connection; (2) dishonest or unauthorized activity whether for personal gain or
not; and (3) defrauding others by using the name of the company. He was dismissed
from service.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/july2007/163561.htm" \l
"_ftn6" \o "" ## Cagampan filed a complaint for illegal dismissal, praying for
payment of backwages and damages, and reinstatement. at issue in this case is the
propriety of the award of separation pay to private respondent. W e find for
petitioner.Separation pay should not be awarded. Section 7, Rule I, Book VI of the
Omnibus Rules Implementing the Labor Code provides that when the employee is
dismissed for any of the just causes under Article 282# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/july2007/163561.htm" \l "_ftn13"
\o "" ## of the Labor Code, he shall not be entitled to termination pay Separation
pay shall be allowed only in those instances where the employee is validly
dismissed for causes other than serious misconduct or those reflecting on his moral
character.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/july2007/163561.htm" \l "_ftn15"
\o "" ## Separation pay in such case is granted to stand as a measure of social
justice.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/july2007/163561.htm" \l "_ftn16"
\o "" ## If the cause for the termination of employment cannot be considered as one
of mere inefficiency or incompetence but an act that constitutes an utter disregard
for the interest of the employer or a palpable breach of trust in him, the grant by
the Court of separation benefits is hardly justifiable.Although long years of
service might generally be considered for the award of separation benefits or some
form of financial assistance to mitigate the effects of terminationThe fact that
private respondent served petitioner for more than twenty years with no negative
record prior to his dismissal, in our view of this case, does not call for such
award of benefits, since his violation reflects a regrettable lack of loyalty and
worse, betrayal of the company. petition is GRANTEDBackwages and Separation Pay,

Distinct ReliefsTriad Security and Allied Services v. OrtegaRespondents Silvestre


Ortega, Jr., Ariel Alvaro, Richard Sevillano, Martin Callueng, and Isagani Capila
were formerly employed by petitioner Triad Security as security guards. Respondents
filed a complaint against petitioners According to respondents, during the time
that they were in the employ of petitioners, they were receiving compensation which
was below the minimum wage fixed by law. They were also made to render services
everyday for 12 hours but were not paid the requisite overtime pay. Labor Arbiter
issued an alias writ of execution# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/feb2006/G.R.%20No.%20160871.htm"
\l "_ftn20" \o "" ## commanding the sheriff to collect from petitioners the amount
of six hundred three thousand seven hundred ninety-four and seventy-seven centavos
(P603,794.77) representing the unsatisfied balance of the judgment award. Given
the foregoing, we hold that the Court of Appeals correctly dismissed the petition
for certiorari brought before it. Notwithstanding this procedural defect committed
by petitioners, in the interest of substantial justice, we shall proceed to resolve
the other issues presented by petitioners. Petitioners insist that their monetary
obligation, as contained in the 28 February 2000 decision of the labor arbiter, had
already been fully satisfied. They posit the argument that with respondents
receipt of their separation pay, they had opted not to seek reinstatement to their
former jobs and elected instead to sever their employment with petitioner Triad
Security. In fact, according to petitioners, respondents had already found new
employments and to award them further backwages would be tantamount to unjust
enrichment. Article 279 of the Labor Code, as amended, states: ART. 279. SECURITY
OF TENURE In cases of regular employment the employer shall not
terminate the services of an employee except for a just cause or when authorized by
this Title. An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the
time of his actual reinstatement.As the law now stands, an illegally dismissed
employee is entitled to two reliefs, namely: backwages and reinstatement. These
are separate and distinct from each other.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/feb2006/G.R.%20No.%20160871.htm"
\l "_ftn37" \o "" ## However, separation pay is granted where reinstatement is no
longer feasible because of strained relations between the employee and the
employer.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/feb2006/G.R.%20No.%20160871.htm"
\l "_ftn38" \o "" ## Backwages and separation pay are, therefore, distinct reliefs
granted to one who was illegally dismissed from employment.W HEREFORE, premises
considered, this Court AFFIRMS the Decision of the Court of Appeals dated 31 July
2003 and the Order dated 23 April 2003 of the Labor Arbiter declaring petitioners
liable for additional accrued backwages. Skippers United Pacific v. NLRC supra 27
Gervacio Rosaroso was signed up as a Third Engineer with Nicolakis Shipping, S.A.
through its recruitment and manning agency, herein petitioner Skippers United
Pacific. The term of the contract was for one year. Barely a month after boarding
the vessel M/V Naval Gent respondent was ordered to disembark in Varna, Bulgaria
and repatriated to the Philippines. Immediately after arriving in the Philippines,
respondent filed a complaint for illegal dismissal. Labor Arbiter found that
respondent was illegally dismissed. NLRC and CA affirmed the LA, not giving
credence to the telexed Chief Engineers Report saying that Rosaroso was slacking
in his duties and was unwilling to help with the repairs. The reason was that the
Report cannot be given any probative value as it is uncorroborated by other
evidence and that it is merely hearsay, having come from a source, the Chief
Engineer, who did not have
any personal knowledge of the events reported therein. Thus this Petition. The
court held that as all three tribunals found, the Report cannot be given any weight
or credibility because it is uncorroborated, based purely on hearsay, and obviously
merely an afterthought. Skippers failed to overcome the burden of proof tasked upon
it in proving that the dismissal has a just cause. Finally, with regard to the

monetary claims of the respondent, the court held that a seafarer is not a regular
employee as defined in Article 280 of the Labor Code. Hence, he is not entitled to
full backwages and separation pay in lieu of reinstatement as provided in Article
279.Seafarers are contractual employees whose rights and obligations are governed
primarily by the POEA Standard Employment Contract for Filipino Seamen, the Rules
and Regulations Governing Overseas Employment, and, more importantly, by Republic
Act (R.A.) No. 8042, or the Migrant W orkers and Overseas Filipinos Act of 1995.
Section 10 of R.A. 8042 provides for the award of money claims in cases of illegal
dismissals, thus:##Section 10. Money Claims.##In case of termination of overseas
employment without just, valid or authorized cause as defined by law or contract,
the worker shall be entitled to the full reimbursement of his placement fee with
interest at twelve percent (12%) per annum, plus his salaries for the unexpired
portion of his employment contract or for three (3) months for every year of the
unexpired term, whichever is less.##The award of salaries for the unexpired portion
of his employment contract or for three (3) months for every year of the unexpired
term, whichever is less, is not an award of backwages or separation pay, but a form
of indemnity for the worker who was illegally dismissed. The Labor Arbiter may have
mislabeled it as separation pay, nonetheless, the award was made in conformity with
law.Petition Denied. CA affirmed with the modifications that monetary awards of
US$2,400.00 and US$186.69 made by the Labor Arbiter in its Decision should be
payable in its equivalent in Philippine currency computed at the prevailing rate of
exchange at the time of payment. Computation/RationaleBusiness Day Information
Systems and Services Inc. v. NLRCBusinessday Information Systems due to financial
reverses, some plant employees, including the private respondents, were laid off.
BSSI retained some employees in an attempt to rehabilitate its business as a
trading company. However, barely two and a half months later, these remaining
employees were likewise discharged because the company decided to cease business
operations altogether. At the conciliation proceedings before Labor Arbiter Manuel
P. Asuncion, petitioners denied that there was unlawful discrimination in the
payment of separation benefits to the employees. They argued that the first batch
of employees was paid "retrenchment" benefits mandated by law, while the remaining
employees were granted higher "separation" benefits because their termination was
on account of the closure of the business.In case of retrenchment of a company to
prevent losses and closure of business operation, the law provides:Art. 283.
Closure of establishment and reduction of personnel.-The employer may also
terminate the employment of any employee due to the installation of labor saving
devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operations of the establishment or undertaking unless the closing is for the
purpose of circumventing the provisions of this Title, by serving a written notice
on the workers and the Ministry of Labor and Employment at least one (1) month
before the intended date thereof. In case of termination due to the installation
of labor saving devices or redundancy, the worker affected thereby shall be
entitled to a separation pay equivalent to at least his one (1) month pay or to at
least one (1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closures or cessation of operations
of establishment or undertaking nut due to serious business losses or financial
reverses, the separation pay shall be equivalent to one (1) month pay or at least
one half (1/2) month pay for every year of service, whichever is higher. A fraction
of at least six (6) months shall be considered one (1) whole year." (Labor Code;
emphasis supplied.)Undoubtedly, petitioners' right to terminate employees on
account of retrenchment to prevent losses or closure of business operations, is
recognized by law, but it may not pay separation benefits unequally for such
discrimination breeds resentment and ill-will among those who have been treated
less generously than others.The law requires the granting of the same amount of
separation benefits to the affected employees in any of the cases. The respondent
argued that the giving of more separation benefit to the second and third batches
of employees separated was their expression of gratitude and benevolence to the
remaining employees who have tried to save and make the company viable in the
remaining days of operations. The law requires an employer to extend equal

treatment to its employees. It may not, in the guise of exercising management


prerogatives, grant greater benefits to some and less to others. Management
prerogatives are not absolute prerogatives but are subject to legal limits,
collective bargaining agreements, or general principles of fair play and justice
(UST vs. NLRC, 190 SCRA 758). Article 283 of the Labor Code, as amended, protects
workers whose employment is terminated because of closure of the establishment or
reduction of personnel (Abella vs. NLRC, 152 SCRA 141, 145).NLRC AFFIRMED.Songco v.
NLRC supraF.E. Zuelig M. Inc. filed with DOLE an application to terminate Jose
Songco, Cipres and Manuel on the ground of retrenchment. The petitioners opposed
this claiming that the company is not suffering from any losses but later on,
contended that they are no longer contesting their dismissal but rather wanted to
receive separation pay including the commissions, allowances etc which they receive
every month. LA excluded the commissions and NLRC dismissed the appeal. Hence this
petition. For allowances, the court used Santos v. NLRC as the prevailing doctrine
wherein it said that computation of backwages and separation pay should include
transportation and emergency living allowances. As for commissions, the court held
that commission is not part of the basic salary. The court held that the purpose of
separation pay is to alleviate the difficulties which confront the dismissed
employee (thrown to the streets to face the harsh necessities of life) and in
adopting the general rule that commissions arent part of the basic salary of
salesmen, the purpose of the separation pay will not be satisfied. The court took
judicial notice of the fact that the nature of his job as a salesman demonstrates
that such type of remuneration is part of their salary since some salesmen do not
receive basic salary but rather, rely on allowances or commissions. Petition is
Granted.Effect of ReceiptSan Miguel Corp v. JavatePrivate respondent was a casual
employee of the petitioner assigned to its B-Meg warehouse in San Miguel, Bulacan.
He figured in an accident and was initially confined at the Figueroa Emergency
Hospital. Upon his discharge from the hospital private respondent was fetched by
his immediate supervisor However, they were unable to reach San Miguel, Bulacan, as
the roads were rendered impassable by typhoon "Norming"; to prevent his being
declared absent without leave, private respondent, with the assistance of his
supervisor, filed an application for vacation leave for eleven (11) days with pay.
This being so, the absences incurred by private respondent during said period were
charged to his remaining sick leave benefits with pay, thus fully exhausting them.
W e find no merit in petitioner's contention. In the case at bar, the labor arbiter
found that the evidence presented by private respondent sufficiently showed his
fitness to resume his work thereby making his termination illegal. There is
likewise no merit to petitioner's contention that private respondent is estopped
from assailing his retirement as he has accepted the benefits under the retirement
plan. Private respondent vehemently denied this contention, and the filing of the
complaint for illegal dismissal indisputably strengthens such denial.Furthermore,
even assuming arguendo that private respondent indeed received his retirement
benefits, it does not estop him from questioning the legality of his dismissal. As
this Court stated in De Leon vs. NLRC: The contention of respondents that
petitioner is barred from contesting the illegality of his dismissal since he has
already received his separation pay cannot be sustained. Since he was forced to
retire, he suddenly found himself jobless with a family of eight (8) children to
support. He had no alternative but to accept what was offered to him. . . .
Employees who received their separation pay are not barred from contesting the
legality of their dismissal. The acceptance of those benefits would not amount to
estoppel as held in the leading case of Mercury Drug Co. vs. CIR (56 SCRA 694) as
aptly cited in the decision of the Labor Arbiter. (emphasis supplied). Petition is
DISMISSED for lack of merit.Financial Assistance (W hen Allowed/Not Allowed)Phil
Long Distance Tel Co. v. NLRCThe only issue presented in the case at bar is the
legality of the award of financial assistance to an employee who had been dismissed
for cause as found by the public respondent. Marilyn Abucay, a traffic operator of
the Philippine Long Distance Telephone Company, was accused by two complainants of
having demanded and received from them the total amount of P3,800.00 in
consideration

of her promise to facilitate approval of their applications for telephone


installation.The Court feels that distinctions are in order. W e note that
heretofore the separation pay, when it was considered warranted, was required
regardless of the nature or degree of the ground proved, be it mere inefficiency or
something graver like immorality or dishonesty. The benediction of compassion was
made to cover a multitude of sins, as it were, and to justify the helping hand to
the validly dismissed employee whatever the reason for his dismissal. This policy
should be re-examined. It is time we rationalized the exception, to make it fair to
both labor and management, especially to labor. But where the cause of the
separation is more serious than mere inefficiency, the generosity of the law must
be more discerning. There is no doubt it is compassionate to give separation pay to
a salesman if he is dismissed for his inability to fill his quota but surely he
does not deserve such generosity if his offense is misappropriation of the receipts
of his sales. This is no longer mere incompetence but clear dishonesty. A security
guard found sleeping on the job is doubtless subject to dismissal but may be
allowed separation pay since his conduct, while inept, is not depraved. But if he
was in fact not really sleeping but sleeping with a prostitute during his tour of
duty and in the company premises, the situation is changed completely. This is not
only inefficiency but immorality and the grant of separation pay would be entirely
unjustified. W e hold that henceforth separation pay shall be allowed as a measure
of social justice only in those instances where the employee is validly dismissed
for causes other than serious misconduct or those reflecting on his moral
character. A contrary rule would, as the petitioner correctly argues, have the
effect, of rewarding rather than punishing the erring employee for his offense. The
policy of social justice is not intended to countenance wrongdoing simply because
it is committed by the underprivileged. At best it may mitigate the penalty but it
certainly will not condone the offenseThe Court also rules that the separation pay,
if found due under the circumstances of each case, should be computed at the rate
of one month salary for every year of service, assuming the length of such service
is deemed material. Petition is GRANTED. IndemnitySerrano v. NLRC and Isetan supra
26Ruben Serrano was hired by private respondent Isetann Department Store as a
security checker to apprehend shoplifters and prevent pilferage of merchandise.#
HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2000/jan2000/117040_jan2000.htm" \l
"_ftn1" \o "" ## To cut costs, Isetann phased out its entire security section and
engage the services of an independent security agency. Serrano filed a complaint
for illegal dismissal upon his termination. The LA found this termination to be
illegal. NLRC held that the phase-out of private respondents security section and
the hiring of an independent security agency constituted an exercise by private
respondent of a legitimate business decision. Hence this petition. The court held
that contrary to the allegations of Serrano, the dismissal falls under Art. 283 of
the Labor Code for redundancy Art. 283 also provides that to terminate the
employment of an employee for any of the authorized causes the employer must serve
"a written notice on the workers and the DOLE at least one (1) month before the
intended date thereof." In this case, Serrano was given notice the same day of his
termination Art. 283 of the Labor Code, the employers failure to comply with the
notice requirement does not constitute a denial of due process but a mere failure
to observe a procedure for the termination of employment which makes the
termination of employment merely ineffectual. Thus, only if the termination of
employment is not for any of the causes provided by law is it illegal and,
therefore, the employee should be reinstated and paid backwages. If the employees
separation is without cause, instead of being given separation pay, he should be
reinstated. In either case, whether he is reinstated or only granted separation
pay, he should be paid full backwages if he has been laid off without written
notice at least 30 days in advance.On the other hand, with respect to dismissals
for cause under Art. 282, if it is shown that the employee was dismissed for any of
the just causes mentioned in said Art. 282, then, in accordance with that article,
he should not be reinstated. However, he must be paid backwages from the time his
employment was terminated until it is determined that the termination of employment

is for a just cause because the failure to hear him before he is dismissed renders
the termination of his employment without legal effect. Petition Granted.Agabon v.
NLRC supra 26Riviera Home Improvements, employed petitioners Virgilio Agabon and
Jenny Agabon as gypsum board and cornice installers and after years under their
employ, were dismissed for abandonment of work.Petitioners then filed a complaint
for illegal dismissal and payment of money claims. LA declared the dismissals
illegal. NLRC reversed the LA.CA ruled that the dismissal of the petitioners was
not illegal because they had abandoned their employment but ordered the payment of
money claims. Hence, this petition.Abandonment is the deliberate and unjustified
refusal of an employee to resume his employment. The court found that the Agabon
were frequently absent having subcontracted for an installation work for another
company.Subcontracting for another company clearly showed the intention to sever
the employer-employee relationship with private respondent. Given that abandonment
was established, the court held in that where the dismissal is for a just cause, as
in the case, the lack of statutory due process should not nullify the dismissal but
the employer should indemnify the employee for the violation of his statutory
rights. The indemnity to be imposed should be stiffer to discourage the abhorrent
practice of dismiss now, pay later, which the court sought to deter in the
Serrano ruling. The sanction should be in the nature of indemnification or penalty
and should depend on the facts of each case, taking into special consideration the
gravity of the due process violation of the employer. The violation of the
petitioners right to statutory due process by the private respondent warrants the
payment of indemnity in the form of nominal damages. In this case, the award was
fixed at P30,000.00.Pettion Dismissed.Liability of Corporate OfficersPetron Corp
v. NLRCPetron, through its Cebu District Office, hired the herein private
respondent Chito S. Mantos, an Industrial Engineer, as a managerial, professional
and technical employee. It was while assigned at Petrons Cebu District Office with
petitioner Peter Maligro as his immediate superior, when Mantos, thru a Notice of
Disciplinary Action dated October 29, 1996,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/october2006/154532.htm" \l
"_ftn3" \o "" ## a copy of which was received by him on November 18, 1996,#
HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/october2006/154532.htm" \l
"_ftn4" \o "" ## was suspended for 30 days for violating company rules and
regulations regarding Absence W ithout Leave (AW OL), not having reported for work.
Subsequently, in a notice Termination of Services received by him,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/october2006/154532.htm" \l
"_ftn6" \o "" ## Mantos services were altogether terminated. W e are, however, with
the petitioners in their submission that the NLRC erred in holding petitioner Peter
Maligro jointly and severally liable with petitioner Petron for the money claims of
the private respondent.Settled is the rule in this jurisdiction that a corporation
is invested by law with a legal personality separate and distinct from those acting
for and in its behalf and, in general, from the people comprising it.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/october2006/154532.htm" \l
"_ftn31" \o "" ## Thus, obligations incurred by corporate officers acting as
corporate agents are not theirs but the direct accountabilities of the corporation
they represent.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/october2006/154532.htm" \l
"_ftn32" \o "" ## True, solidary liabilities may at times be incurred by corporate
officers, but only when exceptional circumstances so warrant.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/october2006/154532.htm" \l
"_ftn33" \o "" ## For instance, in labor cases, corporate directors and officers
may be held solidarily liable with the corporation for the termination of
employment if done with malice or in bad faith.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/october2006/154532.htm" \l
"_ftn34" \o "" ## In the present case, the apparent basis for the NLRC in holding
petitioner Maligro solidarily liable with Petron were its findings that (1) the
Investigation Committee was created a day after the summons in NLRC RAB-VII Case
No. 11-1439-96 was received, with Maligro no less being the chairman thereof; and

(2) the basis for the charge of insubordination was the private respondents
alleged making of false accusations against Maligro. Those findings, however,
cannot justify a finding of personal liability on the part of Maligro inasmuch as
said findings do not point to Maligros extreme personal hatred and animosity with
the respondent. It cannot, therefore, be said that Maligro was motivated by malice
and bad faith in connection with private respondents dismissal from the service.
If at all, what said findings show are the illegality itself of private
respondents dismissal, the
lack of just cause therefor and the non-observance of procedural due process.
Verily, the creation of the investigation committee and said committees
consideration of the insubordination charge against the private respondent, were
merely aimed to cover up the illegal dismissal or to give it a semblance of
legality.Besides, the fact that Maligro himself was the committee chairman is not
itself sufficient to impute bad faith on his part or attribute bias against him. It
is undisputed that Maligro was private respondents superior, being Petrons
Operations Assistant Manager for Visayas and Mindanao. It is thus logical for him
to be part of the committee that will investigate private respondents alleged
infractions of company rules and regulations. As well, the committee was composed
of three other Petron officers as members, and nowhere is there any showing that
Maligro, as committee chairman, influenced the other committee members to side
against the private respondent.In any event, it must be stressed that private
respondents allegation of bad faith on the part of Maligro was not established in
this case. W e quote the NLRCs finding in this regard: W hether he really caught
the ire of his immediate supervisor (respondent Maligro) in view of his alleged
closeness to the previous one who migrated to Canada, and whether or not he was
assigned to menial clerical jobs when his designation was that of Operations
Engineer, were not clearly established by complainant.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/october2006/154532.htm" \l
"_ftn35" \o "" ## W HEREFORE, the assailed Resolution of the Court of
Appeals is SET ASIDE, and the NLRC decision dated July 31, 2000 is AFFIRMED Carag
v. NLRC supra 26W ithout notice of any kind Mariveles Apparel Corporation for
unknown reasons ceased operations with the intention of completely closing its shop
as manifested in a letter filed on the same day the company closed. MACs employees
filed a complant for illegal closure of business through their labor union. LA
found them liable for illegal closure. NLRC dismissed the petitions and affirmed
the LA. Thus this petition. The court held that the LAs decision to hold Antonio
Carag as MACs stockholder and Chairman has not basis since Complainants did not
allege or prove, and Arbiter Ortiguerra did not make any finding, that Carag
approved or assented to any patently unlawful act to which the law attaches a
penalty for its commission. On this score alone, Carag cannot be held personally
liable for the separation pay of complainants. As for his liability as an employer
as enumerated under Article 212(e) of the Labor Code (Employer' includes any
person acting in the interest of an employer, directly or indirectly. The term
shall not include any labor organization or any of its officers or agents except
when acting as employer.)The court recounted the cases of McLeod v. NLRC and
Spouses Santos v. NLRC that Article 212(e) of the Labor Code, by itself, does not
make a corporate officer personally liable for the debts of the corporation. The
governing law on personal liability of directors for debts of the corporation is
still Section 31 of the Corporation Code. Thus in McLeod: Personal liability of
corporate directors, trustees or officers attaches only when (1) they assent to a
patently unlawful act of the corporation, or when they are guilty of bad faith or
gross negligence in directing its affairs, (2) they consent to the issuance of
watered down stocks or when, having knowledge of such issuance, do not forthwith
file with the corporate secretary their written objection; (3) they agree to hold
themselves personally and solidarily liable with the corporation; or (4) they are
made by specific provision of law personally answerable for their corporate action.
Thus, it was error for Arbiter Ortiguerra, the NLRC, and the Court of Appeals to
hold Carag personally liable for the separation pay owed by MAC to complainants
based on Article 212(e) since it does not state that corporate officers are

personally liable for the unpaid salaries or separation pay of employees of the
corporation. The liability of corporate officers for corporate debts remains
governed by Section 31 of the Corporation Code. Petition Granted.RetirementREPUBLIC
ACT NO. 7641 (December 9, 1992):RETIREMENT PAY LAW : AN ACT AMENDING ARTICLE 287 OF
PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERW ISE KNOW N AS THE LABOR CODE OF THE
PHILIPPINES, BY PROVIDING FOR RETIREMENT PAY TO QUALIFIED PRIVATE SECTOR EMPLOYEES
IN THE ABSENCE OF ANY RETIREMENT PLAN IN THE ESTABLISHMENTSection 1. Article 287
of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of
the Philippines, is hereby amended to read as follows: "Art. 287. Retirement. Any employee may be retired upon reaching the retirement age established in the
collective bargaining agreement or other applicable employment contract. # #"In
case of retirement, the employee shall be entitled to receive such retirement
benefits as he may have earned under existing laws and any collective bargaining
agreement and other agreements: Provided, however, That an employee's retirement
benefits under any collective bargaining and other agreements shall not be less
than those provided herein. # #"In the absence of a retirement plan or agreement
providing for retirement benefits of employees in the establishment, an employee
upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65)
years which is hereby declared the compulsory retirement age, who has served at
least five (5) years in the said establishment, may retire and shall be entitled to
retirement pay equivalent to at least one-half (1/2) month salary for every year of
service, a fraction of at least six (6) months being considered as one whole year.
# #"Unless the parties provide for broader inclusions, the term one-half (1/2)
month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month
pay and the cash equivalent of not more than five (5) days of service incentive
leaves. # #"Retail, service and agricultural establishments or operations
employing not more than (10) employees or workers are exempted from the coverage of
this provision. # #"Violation of this provision is hereby declared unlawful and
subject to the penal provisions provided under Article 288 of this Code." Sec.
2. Nothing in this Act shall deprive any employee of benefits to which he may be
entitled under existing laws or company policies or practices. Sec. 3. This Act
shall take effect fifteen (15) days after its complete publication in the Official
Gazette or in at least two (2) national newspapers of general circulation,
whichever comes earlier. Pursuant to the provisions of Article 287 of the Labor
Code as amended by Republic Act No. 7641, in relation to Article 5 of the same
Code, RULE II of Book VI of the Rules Implementing the Labor Code is hereby issued,
the full text of which shall read as follows: RULE II Retirement BenefitsSECTION 1.
General Statement on Coverage. This Rule shall apply to all employees in the
private sector, regardless of their position, designation or status and
irrespective of the method by which their wages are paid, except to those
specifically exempted under Section 2 hereof. As used herein, the term Act shall
refer to Republic Act No. 7641 which took effect on January 7, 1993. SECTION 2.
Exemptions. This Rule shall not apply to the following employees: 2.1 Employees
of the National Government and its political subdivisions, including Governmentowned and/or controlled corporations, if they are covered by the Civil Service Law
and its regulations. 2.2 Domestic helpers and persons in the personal service of
another. (Deleted by Department Order No. 20 issued by Secretary Ma. Nieves R.
Confessor on May 31, 1994.) 2.3 Employees of retail, service and agricultural
establishment or operations regularly employing not more than ten (10) employees.
As used in this sub-section; (a) Retail establishment is one principally engaged
in the sale of goods to end-users for personal or household use. It shall lose its
retail character qualified for exemption if it is engaged in both retail and
wholesale sale of goods. (b) Service establishment is one principally engaged in
the sale of service to individuals for their own or household use and is generally
recognized as such. (c) Agricultural establishment/operations refers to an
employer which is engaged in agriculture. This terms refers to all farming
activities in all its branches and includes among others, the cultivation and
tillage of the soil, production, cultivation, growing and harvesting of any
agricultural or horticultural commodities, dairying, raising of livestock or

poultry, the culture of fish and other aquatic products in farms or ponds, and any
activities performed by a farmer or on a farm as incident to or in conjunction with
such farming operations, but does not include the manufacture and/or processing of
sugar, coconut, abaca, tobacco, pineapple, aquatic or other farm products. SECTION
3. Retirement under CBA/contract. 3.1 Any employee may retire or be retired by his
employer upon reaching the retirement age established in the collective bargaining
agreement or other applicable employment contract or retirement plan subject to the
provisions of Section 5 hereof on the payment of retirement benefits. 3.2 In case
of retirement under this Section, the employee shall be entitled to receive such
retirement benefits as he may have earned under existing laws and any collective
bargaining agreement and other agreements; provided, however, that an employees
retirement benefits under any collective bargaining and other agreements shall not
be less than those provided under this Rule,
and provided further that if such benefits are less, the employer shall pay the
difference between the amount due the employee under this Rule and that provided
under the collective or individual agreement or retirement plan. 3.3 W here both
the employer and the employee contribute to a retirement fund in accordance with an
individual or collective agreement or other applicable employment contract, the
employers total contribution thereto shall not be less than the total retirement
benefits to which the employee would have been entitled had there been no such
retirement fund. In case the employers contribution is less than the retirement
benefits provided under this Rule, the employer shall pay the deficiency. SECTION
4. Optional; Compulsory Retirement. 4.1 Optional Retirement. In the absence of a
retirement plan or other applicable agreement providing for retirement benefits of
employees in an establishment, an employee may retire upon reaching the age of
sixty (60) years or more if he has served for at least five (5) years in said
establishment. 4.2 Compulsory Retirement. W here there is no such plan or
agreement referred to in the immediately preceding sub-section, an employee shall
be retired upon reaching the age of sixty-five (65) years. 4.3 Upon retirement of
an employee, whether optional or compulsory, his services may be continued or
extended on a case to case basis upon agreement of the employer and employee. 4.4
Service Requirement. The minimum length of service in an establishment or with an
employer of at least five (5) years required for entitlement to retirement pay
shall include authorized absences and vacations, regular holidays and mandatory
fulfillment of a military or civic duty. SECTION 5. Retirement Benefits. 5.1 In the
absence of an applicable agreement or retirement plan, an employee who retires
pursuant to the Act shall be entitled to retirement pay equivalent to at least onehalf () month salary for every year of service, a fraction of at least six (6)
months being considered as one whole year. 5.2 Components of One-half () Month
Salary. For the purpose of determining the minimum retirement pay due an employee
under this Rule, the term one-half month salary shall include all of the
following: (a) Fifteen (15) days salary of the employee based on his latest salary
rate. As used herein, the term salary includes all remunerations paid by an
employer to his employees for services rendered during normal working days and
hours, whether such payments are fixed or ascertained on a time, task, piece of
commission basis, or other method of calculating the same, and includes the fair
and reasonable value, as determined by the Secretary of Labor and Employment, of
food, lodging or other facilities customarily furnished by the employer to his
employees. The term does not include cost of living allowances, profit-sharing
payments and other monetary benefits which are not considered as part of or
integrated into the regular salary of the employees. (b) The cash equivalent of not
more than five (5) days of service incentive leave; (c) One-twelfth of the 13th
month pay due the employee. (d) All other benefits that the employer and employee
may agree upon that should be included in the computation of the employees
retirement pay. 5.3 One-half month salary of employees who are paid by results.
For covered workers who are paid by results and do not have a fixed monthly rate,
the basis for determination of the salary for fifteen days shall be their average
daily salary (ADS), subject to the provisions of Rule VII-A, Book III of the Rules
Implementing the Labor Code on the payment of wages of workers who are paid by

results. The ADS is the average salary for the last twelve (12) months reckoned
from the date of their retirement, divided by the number of actual working days in
that particular period. SECTION 6. Exemption from tax. The retirement pay
provided in the Act may be exempted from tax if the requirements set by the Bureau
of Internal Revenue under Sec. 2 (b) item (1) of Revenue Regulations No. 12-86
dated August 1, 1986 are met, to wit: Pensions, retirement and separation pay.
Pensions, retirement and separation pay constitute compensation subject to
withholding, except the following: (1) Retirement benefits received by officials
and employees of private firms under a reasonable private benefit plan maintained
by the employer, if the following requirements are met: (i) The benefit plan must
be approved by the Bureau of Internal Revenue; (ii) The retiring official or
employee must have been in the service of the same employer for at least ten (10)
years and is not less than fifty (50) years of age at the time of retirement; and
(iii) The retiring official or employee shall not have previously availed of the
privilege under the retirement benefit plan of the same or another employer.SECTION
7. Penal Provision. It shall be unlawful for any person or entity to circumvent
or render ineffective the provisions of the Act. Violations thereof shall be
subject to the penal provisions provided under Article 288 of the Labor Code of the
Philippines. SECTION 8. Relation to agreements and regulations. Nothing in this
Rule shall justify an employer from withdrawing or reducing any benefits,
supplements or payments as provided in existing laws, individual or collective
agreements or employment practices or policies. All rules and regulations, policy
issuances or orders contrary to or inconsistent with these rules are hereby
repealed or modified accordingly. SECTION 9. Effectivity. This Rule took effect
on January 7, 1993 when the Act went into force. Labor Advisory on Retirement Pay:
GUIDELINES FOR THE EFFECTIVE IMPLEMENTATION OF R.A. 7641, THE RETIREMENT PAY LAW A.
Coverage Republic Act No. 7641 or the Retirement Pay Law shall apply to all
employees in the private sector, regardless of their position, designation or
status and irrespective of the method by which their wages are paid. They shall
include part-time employees, employees of service and other job contractors and
domestic helpers or persons in the Personal service of another. The law does not
cover employees of retail, service and agricultural establishments or operations
employing not more than ten (10) employees or workers and employees of the National
Government and its political subdivisions, including Government-owned and/or
controlled corporations, if they are covered by the Civil Service Law and its
regulations. B. Computation of Retirement Pay A covered employee who retires
pursuant to RA 7641 shall be entitled to retirement pay equivalent to at least onehalf (1/2) month salary for every year of service, a fraction of at least six (6)
months being considered as one whole year. The law is explicit that one-half
month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month
pay and the cash equivalent of not more than five (5) days service incentive
leaves unless the parties provide for broader inclusions. Evidently, the law
expanded the concept of one-half month salary from the usual one-month salary
divided by two. In reckoning the length of service, the period of employment with
the same employer before the effectivity date of the law on January 7, 1993 should
be included. C. Substitute Retirement Plan Qualified workers shall be entitled to
the retirement benefit under RA 7641 in the absence of any individual or collective
agreement, company policy or practice. In case there is such an agreement, policy
or practice providing retirement benefit which is equal or superior to that which
is provided in the Act, said agreement, policy or practice will prevail. As
provided in RA 7742, a private employer shall have the option to treat the coverage
of the PAG-IBIG Fund as a substitute retirement benefit for the employee concerned
within the purview of the Labor Code as amended; provided, such option does not in
any way contravene an existing collective bargaining agreement or other employment
agreement. Thus, the PAG-IBIG Fund can be considered as a substitute retirement
plan of the company for its employees provided that such scheme offers benefits
which are more than or at least equal to the benefits under RA 7641. If said scheme
provides less than what the employee is entitled to under RA 7641, the employer is
liable to pay the difference. If both the employee and the employer contribute to a

retirement plan, only the employers contribution and its increments shall be
considered for full or partial compliance with the benefit under RA 7641. On the
other hand, where the employee is the lone contributor to the PAG-IBIG Fund, the
employer being exempted from its coverage, the employer is under obligation to give
his employee retirement benefits under the Act. Adopted: 24 October 1996 Enriquez
Security Services Inc. v. CabotajeVictor A. Cabotaje was employed as a security
guard by Enriquez Security and Investigation Agency (ESIA). Petitioner acknowledged
that respondent was entitled to retirement benefits but opposed his claim that the
computation of such benefits must be reckoned from January 1979 when he started
working for ESIA. W e find no merit in the petition. First. Petitioners
contention that RA 7641 cannot be applied retroactively has long been settled in
the Guidelines for Effective Implementation of RA 7641 issued on October 24, 1996
by the Department of Labor and Employment. Paragraph B of the guidelines provides:
In reckoning the length of service, the period of employment with the same employer
before the effectivity date of the law on January 7, 1993 should be included.
Rufina Patis Factory v. Lucas, Sr: RA 7641 is undoubtedly a social legislation.
The law has been enacted as a labor protection measure and as a curative statute
that absent a retirement plan devised by, an agreement with, or a voluntary
grant from, an employer can respond, in part at least, to the financial wellbeing of workers during their twilight years soon following their life of labor.
There should be little doubt about the fact that the law can apply to labor
contracts still existing at the time the statute has taken effect, and that its
benefits can be reckoned not only from the date of the laws enactment but
retroactively to the time said employment contracts have started. Petitioner was
thus correctly ordered to pay respondents retirement under RA 7641, computed from
January 1979 up to the time he applied for retirement in July 1997.Petition is
hereby DENIEDJaculbe v. Siliman UniversityIN 1958 ALPHA C. JACULBE began working
for respondents university medical center as a nurse.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/march2007/156934.htm" \l "_ftn4"
\o "" ## In a letter dated December 3, 1992,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/march2007/156934.htm" \l "_ftn5"
\o "" ## respondent, through its Human Resources Development Office, informed
petitioner that she was approaching her 35th year of service with the university
and was due for automatic retirement. Petitioner emphatically insisted that the
compulsory retirement under the plan was tantamount to a dismissal. From the
language of the schools retirement plan rules, the compulsory nature of both
membership in and contribution to the plan debunked the CAs theory that
petitioners voluntary contributions were evidence of her willing participation
therein. It was through no voluntary act of her own that petitioner became a member
of the plan. In fact, the only way she could have ceased to be a member thereof was
if she stopped working for respondent altogether. According to the assailed
decision, respondents retirement plan ha(d) been in effect for more than 30
years.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/march2007/156934.htm" \l
"_ftn17" \o "" ## W hat was not pointed out, however, was that the retirement plan
came into being in 1970# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/march2007/156934.htm" \l
"_ftn18" \o "" ## or 12 years after petitioner started working for respondent. In
short, it was not part of the terms of employment to which petitioner agreed when
she started working for respondent. Retirement is the result of a bilateral act of
the parties, a voluntary agreement between the employer and the employee whereby
the latter, after reaching a certain age agrees to sever his or her employment with
the former.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/march2007/156934.htm" \l
"_ftn19" \o "" ## Pantranco North Express, Inc. v. NLRC,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/march2007/156934.htm" \l
"_ftn20" \o "" ## to which both the CA and respondent refer, the imposition of a
retirement age below the compulsory age of 65 was deemed acceptable because this
was part of the CBA between the employer and the employees. The consent of the

employees, as represented by their bargaining unit, to be retired even before the


statutory retirement age of 65 was laid out clearly in black and white and was
therefore in accord with Article 287. Not only was petitioner still a good eight
years away from the compulsory retirement age but she was also still fully capable
of discharging her duties as shown by the fact that respondents board of trustees
seriously considered rehiring her after the effectivity of her compulsory
retirement.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/march2007/156934.htm" \l
"_ftn22" \o "" ## Thus, having terminated petitioner solely on the basis of a
provision of a retirement plan which was not freely assented to by her, respondent
was guilty of illegal dismissal.Petition is hereby GRANTEDReyes v. NLRCPetitioner
was employed as a salesman at respondents Grocery Division in Davao. He was
eventually appointed as unit manager of Sales Department., a position he held until
his retirement on November 30, 1997.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/160233.htm" \l
"_ftn3" \o "" ##Thereafter, he received a letter regarding the computation of his
separation pay. Insisting that his retirement benefits and 13th month pay must be
based on the average monthly salary petitioner refused to accept the check#
HYPERLINK "http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/160233.htm"
\l "_ftn5" \o "" ## issued by private respondent; instead, he filed a complaint
before the arbitration branch of the NLRC for retirement benefits. The petition
lacks merit. Any seeming inconsistencies between Philippine Duplicators and BoieTakeda had been clarified by the Court.Philippine Duplicators, the salesmens
commissions, comprising a pre-determined percentage of the selling price of the
goods sold by each salesman, were properly included in the term basic salary for
purposes of computing the 13th month pay.The salesmens commission are not overtime
payments, nor profit-sharing payments nor any other fringe benefit,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/160233.htm" \l
"_ftn17" \o "" ## but a portion of the salary structure which represents an
automatic increment to the monetary value initially assigned to each unit of work
rendered by a salesman.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/160233.htm" \l
"_ftn18" \o "" ## Boie-Takeda, the so-called commissions paid to or received by
medical representatives of Boie-Takeda Chemicals or by the rank and file employees
of Philippine Fuji Xerox Co., were excluded from the term basic salary because
these were paid to the medical representatives and rank-and-file employees as
productivity bonuses, which are generally tied to the productivity, or capacity for
revenue production, of a corporation and such bonuses closely resemble profitsharing payments and have no clear direct or necessary relation to the amount of
work actually done by each individual employee.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/160233.htm" \l
"_ftn19" \o "" ## Further, commissions paid by the Boie-Takeda Company to its
medical representatives could not have been sales commissions in the same sense
that Philippine Duplicators paid the salesmen their sales commissions. Medical
representatives are not salesmen; they do not effect any sale of any article at
all.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/160233.htm" \l
"_ftn20" \o "" ##In fine, whether or not a commission forms part of the basic
salary depends upon the circumstances or conditions for its payment. Nevertheless,
should petitioners commissions be considered in the computation of his retirement
benefits and 13th month pay? W e rule in the negative. Article 287 of the Labor
Code, as amended by Republic Act No. 7641, otherwise known as The New Retirement
Law,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2007/august2007/160233.htm" \l
"_ftn22" \o "" ## provides:Art. 287. Retirement. ##Any employee may be retired
upon reaching the retirement age established in the collective bargaining agreement
or other applicable employment contract. ##In the absence of a retirement plan or
agreement providing for retirement benefits of employees in the establishment, an
employee upon reaching the age of sixty (60) years or more, but not beyond sixty

five (65) years which is hereby declared the compulsory retirement age, who has
served at least five (5) years in the said establishment, may retire and shall be
entitled to retirement pay equivalent to at least one half (1/2) month salary for
every year of service, a fraction of at least six (6) months being considered as
one whole year.##Unless the parties provide for broader inclusions, the term one
half (1/2) month salary shall mean fifteen (15) days plus one twelfth (1/12) of the
13th month pay and the cash equivalent of not more than five (5) days of service
incentive leaves.##Section 5 of Rule II of the Rules Implementing the New
Retirement Law, provides: Section 5. Retirement Benefits. ##5.1 In the
absence of an applicable agreement or retirement plan, an employee who retires
pursuant to the Act shall be entitled to retirement pay equivalent to at least onehalf (1/2) month salary for every year of service, a fraction of at least six (6)
months being considered as one whole year.##5.2 Components of One-half
(1/2) Month Salary. For the purpose of determining the minimum retirement pay due
an employee under this Rule, the term one-half-month salary shall include all the
following:##(a) Fifteen (15) days salary of the employee based on
his latest salary rate. As used herein, the term salary includes all
remunerations paid by an employer to his employees for services rendered during
normal working days and hours, whether such payments are fixed or ascertained on a
time, task, piece or commission basis, or other method of calculating the same, and
includes the fair and reasonable value, as determined by the Secretary of Labor and
Employment, of food, lodging, or other facilities customarily furnished by the
employer to his employees. The term does not include cost of living allowance,
profit-sharing payments and other monetary benefits which are not considered as
part of or integrated into the regular salary of the employees.##(b)
The cash equivalent of not more than five (5) days of service incentive
leave.##(c) One-twelfth of the 13 month pay due the
employee.##(d) All other benefits that the employer and employee may
agree upon that should be included in the
computation of the employees retirement pay. (Emphasis supplied)##The article
provides for two types of retirement:(a) compulsory and (b) optional. The first
takes place at age 65, while the second is primarily determined by the collective
bargaining agreement or other employment contract or employers retirement plan.
In the absence of any provision on optional retirement in a collective bargaining
agreement, other employment contract, or employers retirement plan, an employee
may optionally retire upon reaching the age of 60 years or more, but not beyond 65
years, provided he has served at least five years in the establishment concerned.
For the purpose of computing retirement pay, one-half month salary shall include
all of the following:1) 15 days salary based on the latest salary
rate;2) cash equivalent of 5 days of service incentive leave (or
vacation leave);3) 1/12 of the 13th month pay;4)
other benefits as may be agreed upon by employer and employee for inclusion.##But,
it shall not include the following:1) cost of living allowance;
2) profit-sharing payments; and3) other monetary
benefits which are not considered as part of or integrated into the regular salary
of the employees##Petitioner filed for optional retirement upon reaching the age of
60. However, the basis in computing his retirement benefits is his latest salary
rate of P10,919.22 as the commissions he received are in the form of profit-sharing
payments specifically excluded by the foregoing rules. Petition is DENIED
Intercontinental Broadcasting Corporation v. AmarillaOn various dates, petitioner
employed the following persons at its Cebu station. And eventually, the four (4)
employees retired from the company. The complainants averred that their retirement
benefits are exempt from income tax under Article 32 of the NIRC. Sections 28 and
72 of the NIRC, which petitioner relied upon in withholding their differentials, do
not apply to them since these provisions deal with the applicable income tax rates
on foreign corporations and suits to recover taxes based on false or fraudulent
returns. They pointed out that, under Article VIII of the CBA, only those employees
who reached the age of 60 were considered retired. W hile petitioner admits that its
previous directors had paid the withholding taxes on the retirement benefits of

respondents, it explains that this practice was stopped when the new management
took over.The new management could not be expected to enforce and follow through
the illegal policy of the old management which is adverse to the interests of the
petitioner; hence, the decisions of the NLRC and the CA affirming such undertaking
should be reversed. W e agree with petitioners contention that, under the CBA, it
is not obliged to pay for the taxes on the respondents retirement benefits. W e
have carefully reviewed the CBA and find no provision where petitioner obliged
itself to pay the taxes on the retirement benefits of its employees.W e also agree
with petitioners contention that, under the NIRC, the retirement benefits of
respondents are part of their gross income subject to taxes. Section 28 (b) (7) (A)
of the NIRC of 1986# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2006/october2006/162775.htm" \l
"_ftn23" \o "" ## provides:Sec. 28. Gross Income. ##(b)
Exclusions from gross income. - The following items shall not be included in gross
income and shall be exempt from taxation under this Title:##(7) Retirement
benefits, pensions, gratuities, etc. - (A) Retirement benefits received by
officials and employees of private firms whether individuals or corporate, in
accordance with a reasonable private benefit plan maintained by the employer:
Provided, That the retiring official or employee has been in the service of the
same employer for at least ten (10) years and is not less than fifty years of age
at the time of his retirement: Provided, further, That the benefits granted under
this subparagraph shall be availed of by an official or employee only once. For
purposes of this subsection, the term "reasonable private benefit plan" means a
pension, gratuity, stock bonus or profit-sharing plan maintained by an employer for
the benefit of some or all of his officials or employees, where contributions are
made by such employer for officials or employees, or both, for the purpose of
distributing to such officials and employees the earnings and principal of the fund
thus accumulated, and wherein it is provided in said plan that at no time shall any
part of the corpus or income of the fund be used for, or be diverted to, any
purpose other than for the exclusive benefit of the said official and employees.##
Revenue Regulation No. 12-86, the implementing rules of the foregoing provisions,
provides:##(b) Pensions, retirements and separation pay. Pensions, retirement
and separation pay constitute compensation subject to withholding tax, except the
following:##(1) Retirement benefit received by official and employees of
private firms under a reasonable private benefit plan maintained by the employer,
if the following requirements are met:##(i) The retirement plan must be
approved by the Bureau of Internal Revenue;##(ii) The retiring official or
employees must have been in the service of the same employer for at least ten (10)
years and is not less than fifty (50) years of age at the time of retirement;
and##(iii) The retiring official or employee shall not have previously
availed of the privilege under the retirement benefit plan of the same or another
employer.##Thus, for the retirement benefits to be exempt from the withholding tax,
the taxpayer is burdened to prove the concurrence of the following elements: ##(1)
a reasonable private benefit plan is maintained by the employer; ##(2) the retiring
official or employee has been in the service of the same employer for at least 10
years; ##(3) the retiring official or employee is not less than 50 years of age at
the time of his retirement; and ##(4) the benefit had been availed of only
once.##Respondents received their retirement benefits from the petitioner in three
staggered installments without any tax deduction for the simple reason that
petitioner had remitted the same to the BIR with the use of its own funds. It was
only when respondents demanded the payment of their salary differentials that
petitioner alleged, for the first time, that it had failed to present the 1993 CBA
to the BIR for approval, rendering such retirement benefits not exempt from taxes.
An agreement to pay the taxes on the retirement benefits as an incentive to
prospective retirees and for them to avail of the optional retirement scheme is not
contrary to law or to public morals. Petitioner had agreed to shoulder such taxes
to entice them to voluntarily retire early, on its belief that this would prove
advantageous to it. Respondents agreed and relied on the commitment of petitioner.
For petitioner to renege on its contract with respondents simply because its new

management had found the same disadvantageous would amount to a breach of


contract.Petition is DENIED 3 kinds of retirement plansGerlach v. ReutersReuters
Limited, Phils. (Reuters), a company engaged in news dissemination with offices
worldwide, hired Marilyn Odchimar Gerlach, petitioner, as its local correspondent.
On January 23, 1984, respondent assigned petitioner as a journalist to Reuters
Singapore. Before leaving, Rachel Addison, Reuters Eastern Region Staff Manager,
apprised her of the details of her forthcoming assignment, specifically that her
home base will always be the Philippines. She soon retired.Article 287 of the Labor
Code reads: "Article 287. Retirement. Any employee may be retired upon reaching
the retirement age established in the collective bargaining agreement or other
applicable employment contract.In case of retirement, the employee shall be
entitled to receive such retirement benefits as he may have earned under existing
laws and any collective bargaining agreement and other agreements." (Emphasis
supplied)The first paragraph of the above provisions deals with the retirement age
of an employee established in (a) a collective bargaining agreement or (b) other
applicable employment contract.The second paragraph deals with the retirement
benefits to be received by a retiring employee which he may have earned under (a)
an existing law, (b) a collective bargaining or (c) other agreements.Llora Motors,
Inc. vs. Drilon,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2005/jan2005/148542.htm" \l
"_ftn29" \o "" #[29]# we held that Article 287, does not in itself purport to
impose any obligation upon employers to set up a retirement scheme for their
employees over and above that already established under existing laws, like the
Social Security Act.Nonetheless, Section 14(a), Rule 1 of the Rules and Regulations
Implementing Book VI of the Labor Code, provides: "Sec. 14. Retirement benefits.
(a) An employee who is retired pursuant to a bona fide retirement plan or in
accordance with the applicable individual or collective agreement or established
employer policy shall be entitled to all the retirement benefits provided therein .
. ."Respondent based petitioners retirement benefits on its Plan and established
policy, which is in accord with the above provision. Consequently, petitioners
theory that the computation of her retirement benefits should be based on her basic
annual salary while stationed abroad is untenable. W e agree with the Court of
Appeals that petitioners retirement benefits must be based on her notional
Philippine salary. It is very clear that from the very start of her first
assignment
overseas, respondent apprised her that the companys contribution to the Plan is
based on her notional Philippine salary. In fact, under the Plan, the companys
contribution to the fund is 10% of the basic monthly salary of each participant.
Respondent also informed petitioner of the amount of her notional Philippine salary
whenever she was transferred to her next overseas assignment or when there were
increases in her salary, both actual and notional. Significantly, respondent was
able to prove that it has been its practice worldwide that the notional salary of
an employee is its basis in computing its contribution to the retirement plan for a
local employee detailed abroad. It follows that the amount of retirement benefits
of a retiring employee assigned abroad is based on his notional salary. Besides, it
is a basic rule in evidence that the burden of proof is on the part of the party
who makes the allegations ei incumbit probatio, qui dicit, non qui negat.
Petition is hereby DENIED.PAL v. Airline Pilots AssociationIssue is between PAL and
respondent Airline Pilots Association of the Philippines (ALPAP), the exclusive
bargaining representative of all commercial airline pilots of petitioner, stemmed
from petitioner's act of unilaterally retiring airline pilot Captain Albino
Collantes under Section 2, Article VII, of the 1967 PAL-ALPAP Retirement Plan.The
pertinent provision of the 1967 PAL-ALPAP Retirement Plan states:##SECTION 1.
Normal Retirement. (a) Any member who completed twenty (20) years of service as a
pilot for PAL or has flown 20,000 hours for PAL shall be eligible for normal
retirement. The normal retirement date is the date on which he completes twenty
(20) years of service, or on which he logs his 20,000 hours as a pilot for PAL.
The member who retires on his normal retirement shall be entitled to either (a) a
lump sum payment of P100,000.00 or (b) to such termination pay benefits to which

he may be entitled to under existing laws, whichever is the greater


amount.##SECTION 2. Late Retirement. Any member who remains in the service of the
Company after his normal retirement date may retire either at his option or at the
option of the Company and when so retired he shall be entitled either (a) to a lump
sum payment of P5,000.00 for each completed year of service rendered as a pilot, or
(b) to such termination pay benefits to which he may be entitled under existing
laws, whichever is the greater amount.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2002/jan2002/143686.htm" \l
"_edn9" \o "" ####A pilot who retires after twenty years of service or after flying
20,000 hours would still be in the prime of his life and at the peak of his career,
compared to one who retires at the age of 60 years old. Based on this peculiar
circumstance that PAL pilots are in, the parties provided for a special scheme of
retirement different from that contemplated in the Labor Code. ##Provisions of
Article 287 of the Labor Code could not have contemplated the situation of PALs
pilots. Rather, it was intended for those who have no more plans of employment
after retirement, and are thus in need of financial assistance and reward for the
years that they have rendered service. In any event, petitioner contends that its
pilots who retire below the retirement age of 60 years not only receive the
benefits under the 1967 PAL-ALPAP Retirement Plan but also an equity of the
retirement fund under the PAL Pilots Retirement Benefit Plan,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2002/jan2002/143686.htm" \l
"_edn10" \o "" ## entered into between petitioner and respondent on May 30, 1972.
The PAL Pilots Retirement Benefit Plan# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2002/jan2002/143686.htm" \l
"_edn11" \o "" ## is a retirement fund raised from contributions exclusively from
petitioner of amounts equivalent to 20% of each pilots gross monthly pay. Upon
retirement, each pilot stands to receive the full amount of the contribution. In
sum, therefore, the pilot gets an amount equivalent to 240% of his gross monthly
income for every year of service he rendered to petitioner. This is in addition to
the amount of not less than P100,000.00 that he shall receive under the 1967
Retirement Plan.On the other hand, Article 287 of the Labor Code:Art. 287.
Retirement. Any employee may be retired upon reaching the retirement age
established in the collective bargaining agreement or other applicable employment
contract.##In case of retirement, the employee shall be entitled to receive such
retirement benefits as he may have earned under existing laws and any collective
bargaining agreement and other agreements: provided, however, That an employees
retirement benefits under any collective bargaining and other agreements shall not
be less than those provided herein.##In the absence of a retirement plan or
agreement plan providing for retirement benefits of employees in the establishment,
an employee upon reaching the age of sixty (60) years or more, but not beyond
sixty-five (65) years which is hereby declared as the compulsory retirement age,
who has served at least five (5) years in the said establishment, may retire and
shall be entitled to retirement pay equivalent to at least one-half (1/2) month
salary for every year of service, a fraction of at least six (6) months being
considered as one whole year.##Unless the parties provide for broader inclusions,
the term one-half (1/2) month salary shall mean fifteen (15) days plus onetwelfth (1/12) of the 13th month pay and the cash equivalent of not more than five
(5) days of service incentive leaves. xxx xxx xxx. ##In short, the retirement
benefits that a pilot would get under the provisions of the above-quoted Article
287 of the Labor Code are less than those that he would get under the applicable
retirement plans of petitioner.Bulletin Publishing Corp. v. Sanchez,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2002/jan2002/143686.htm" \l
"_edn13" \o "" ## this Court held: The aforestated sections explicitly declare, in
no uncertain terms, that retirement of an employee may be done upon initiative and
option of the management. And where there are cases of voluntary retirement, the
same is effective only upon the approval of management.The requirement to consult
the pilots prior to their retirement defeats the exercise by management of its
option to retire the said employees. Petition is GRANTEDNaguit v. NLRCAniceto W .
Naguit, Jr., an employee of respondent Manila Electric Company (MERALCO) since

August 11, 1959, was dismissed after 32 years of service. In fine, this Court
credits the petitioner with good faith when he did not correct the entry in the
Notice of Overtime and Timesheet reflecting that he worked up to 5:00 p.m. on June
6, 1987. The charge of falsification against him does not thus lie. # HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/120474.htm" \l
"_ftn27" \o "" ##As clearly established by his own account, petitioner, despite his
knowledge that Cabuhat did not hire any jeep nor conduct field verification on June
6, 1987, released the petty cash representing Cabuhats meal allowance and rental
fee for a jeep. At best, petitioner wants to convey that it was mere oversight on
his part not to have reviewed the voucher, it having already borne the signature
of the approving officer and, therefore, he should not be held culpable.
Petitioners attempt at exoneration deserves scant consideration. As custodian of
the petty cash fund, he had the duty to ascertain that the circumstances which
brought about any claim therefrom were in order.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/120474.htm" \l
"_ftn32" \o "" ## He cannot now shirk from this responsibility by indirectly
pinning the blame on the approving officer and asserting that the transgression was
the result of mere inadvertence, given his admission that he very well knew that
Cabuhat did not conduct any field work on June 6, 1987, he (Cabuhat) having merely
driven for him to Pagbilao.Petitioner thus committed dishonesty and breached
MERALCOs trust, which dishonesty calls for reprimand to dismissal under MERALCOs
rules.At the time petitioner was dismissed, he was still below the retirement age
of employees of MERALCO at 60.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/120474.htm" \l
"_ftn33" \o "" ## To date, however, he is now about 65.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/120474.htm" \l
"_ftn34" \o "" ## Imposing a penalty less harsh than dismissal and ordering his
reinstatement are thus functus oficio, the Labor Arbiters order for his
reinstatement not having been executed.To this Court, a denial of the award of
backwages to petitioner from the time of his dismissal up to his age of retirement
suffices as punishment for his dishonesty.# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/aug2003/120474.htm" \l
"_ftn35" \o "" ## He should not, however, be deprived of his retirement benefits.
NLRC are hereby SET ASIDE. Sta. Catalina v. NLRCIn June 1955, Hilaria was hired as
an elementary school teacher at the Sta. Catalina College In 1970, she applied for
and was granted a one year leave of absence without pay on account of the illness
of her mother. After the expiration in 1971 of her leave of absence, she had not
been heard fromby petitioner school. She went back to the school and on May 31,
1997, Hilaria reached the compulsory retirement age of 65. Retiring pursuant to
Article 287 of the Labor Code, as amended by Republic Act 7641, petitioner school
pegged her retirement benefits at P59,038.35,# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/nov2003/144483.htm" \l
"_ftn4" \o "" ## computed on the basis of fifteen
years of service from 1982 to 1997. Hilaria insisted, however, that her
retirement benefits should be computed on the basis of her thirty years of service,
inclusive of the period from 1955 to 1970; and that the gratuity pay earlier given
to her should not be deducted therefrom. Hilaria cannot be credited for her
services in 1955-1970 in the determination of her retirement benefits. For, after
her one year leave of absence expired in 1971 without her requesting for extension
thereof as in fact she had not been heard from until she resurfaced in 1982 when
she reapplied with petitioner school, she abandoned her teaching position as in
fact she was employed elsewhere. As Hilaria was considered a new employee when she
rejoined petitioner school upon re-applying in 1982, her retirement benefits should
thus be computed only on the basis of her years of service from 1982 to 1997.JAM
Transportation Co., Inc. v. Flores# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2003/nov2003/144483.htm" \l
"_ftn25" \o "" ## teaches:Private respondents re-employment as a new employee x x
x would mean a demotion in rank and privileges, retirement benefits, for example,
as his entire previous eighteen (18) years of service with petitioner, would simply

be considered as non-existent.Article 287 of the Labor Code as amended by Republic


Act 7641 or the New Retirement Lawprovides: ART. 287. Retirement. Any employee
may be retired upon reaching the retirement age established in the collective
bargaining agreement or other applicable employment contract.In case of retirement
the employee shall be entitled to receive such retirement benefits as he may have
earned under existing laws and any collective bargaining agreement and other
agreements: Provided however That an employees retirement benefits under any
collective bargaining and other agreements shall not be less than those provided
herein.##Likewise Section 3.3 Rule II of the Rules Implementing R.A. 7641 provides:
3.3 W here both the employer and the employee contribute to a retirement fund in
accordance with an individual or collective agreement or other applicable
employment contractthe employers total contribution thereto shall not be less than
the total retirement benefits to which the employee would have been entitled had
there been no such retirement fund. In case the employers contribution is less
than the retirement benefits provided under this Rulethe employer shall pay the
difference.##Hence, Hilaria is entitled to receive P98,706.45 computed as
follows:##One-half month salary = (15 days x latest salary per day) + (5 days
leave x latest salary per day) + (1/12 of 13th month pay) ##
= P4,512.30 + P1,504.10 + P547.33##
= P6,563.73##Retirement Pay =
number of years in service x one-half month salary##
= 15 years x P6,580.43##
= P98,455.95 ##Petition is GRANTED in part.Voluntary RetirementAriola v.
Philex Mining CorpRoberto Ariola, Franco Mallare, Benjamin Biete and Hermogenes
Mamayson (petitioners) are former supervisors of respondent Philex Mining
Corporation. On 14 May 1993, Philex informed the Department of Labor and Employment
(DOLE), Cordillera Administrative Region, Baguio City, of its plan to retrench
241 employees. On 1 June 1993, petitioners, with six# HYPERLINK
"http://www.supremecourt.gov.ph/jurisprudence/2005/aug2005/147756.htm" \l
"_ftn9" \o "" #[9]# other supervisors and 49 rank-and-file employees, received from
Philex termination notices informing them of their retrenchment. This Office holds
that the separation of the other complainants namely, Messrs. Banayat, Mallare,
Martin, Ariola, Ferraro, Mamayson, Candol, Brian and Biente (sic) may not be
questioned because complainants opted to avail of the early voluntary retirement
program offered by the Company. Thus, from the evidences presented, it clearly
appears that complainants voluntarily retired from the company for a valuable
consideration. The quitclaim[s] executed in favor of the company [amount] to a
valid and binding agreement.As basis for their findings that petitioners retired
from service, the Court of Appeals and Arbitrator Advincula cited the vouchers
petitioners signed showing their receipt of retirement gratuity. Although there
is no dispute that petitioners received varied amounts denominated in the vouchers
in question as retirement gratuity, the records show that Philex paid these
amounts because of petitioners retrenchment.Clearly, under Philexs Retirement
Gratuity Plan, retirement gratuity is paid not only to retiring employees but
also to those who, like petitioners, are dismissed for cause beyond their control
such as retrenchment. Indeed, Philex treated the retirement gratuity as
petitioners basic separation pay, which, with transportation allowance.
Significantly, Philex paid petitioners such separation pay after notifying them of
their retrenchment. Furthermore, Philexs failure to submit other documents proving
petitioners claimed retirement, such as their applications for retirement under
Philexs early voluntary retirement program and their clearance slips, undermines
its claim. The submission of these documents, which should indicate the reason for
petitioners separation from service, would have put to rest any doubt on the cause
of such separation.In sum, we hold that by themselves, the vouchers in question do
not suffice to prove petitioners retirement from Philex. Retirement results from a
voluntary agreement between the employer and the employee where the latter, after
reaching a certain age, agrees to sever his employment with the former. The intent
to retire is not clearly established or if the retirement is involuntary, it is to
be treated as a discharge. W e GRANT the petition. If reinstatement is no longer

possible Philex Mining Corporation shall pay backwages as computed above plus, in
lieu of reinstatement, separation pay equal to one-half month pay for every year of
service.Forfeiture of BenefitsEquitable PCI Bank v. CaguoiaGenerosa Caguioa was a
senior manager of Equitable PCI Bank and had been serving the bank for 35 years
when she was discharged for alleged connection with accounting activities
specifically discounting checks which caused Antonio Jarina (the customer who
instituted the complaint against her) considerable damage. She denied any
connection with the said activities and filed a case of illegal dismissal. The LA
upheld the dismissal of the private respondent ruling that the dismissal was a
valid exercise of management prerogative for having violated the code of conduct on
loyalty and honesty. Upon appeal, the same was denied and thus it was raised to the
CA who held that the testimonies of the people who were in on her with the scheme
were insufficient to prove her involvement and justify her dismissal. CA held that
she has been illegally dismissed. Hence this petition. The court held that it was
the petitioner bank who had the burden of proving the legality of the dismissal
through substantial evidence. The court found that there was more than substantial
evidence supporting the decision of the labor arbiter in Caguioas participation in
the check-discounting scheme when the LA used bank records of Jarina and Caguioa
which showed 21 matches of deposits and withdrawals, the letter of Jarina to the
bank as well as the testimonies of the audit examiner. Caguioa only had denials and
imputation of lack of probative value of the evidence to counter the banks
evidence. Despite her 35 years of service, the court held that since banks thrive
on honesty and loyalty of its employees, the valid dismissal of Caguioa from
service deprives her of retirement benefits. The court said that even government
employees who are validly terminated are also deprived of these benefits. Being a
managerial employee, Caguioa may be validly terminated for breach of trust.
Petition granted.
Sy v. Metropolitan Bank and Trust CompanyDennis D. Sy, herein
substituted by his heirs Soledad Y. Sy, Ronald Allan Y. Sy, and Melinda S.
Pompenada, was the branch manager in Bajada, Davao City, of respondent Metropolitan
Bank and Trust Company. Under the bank's Retirement Plan, an employee must retire
upon reaching the age of 55 years or after rendering 30 years of service, whichever
comes first. W e hold that petitioner Sy was validly dismissed on the ground of
fraud and willful breach of trust under Article 282 of the Labor Code. Records show
that as bank manager, he authorized "kiting" or drawing of checks against
uncollected funds in wanton violation of the bank's policies. It was sufficient
basis for the bank to lose trust in him.#Petitioner, however, theorizes that having
been compulsorily retired, he could no longer be dismissed by the bank. His premise
is absurd. Indeed, he would have qualified for compulsory retirement under the
bank's Retirement Plan. However, he opted to accept the bank's offer of extending
his employment for another year with a corresponding salary increase. Thus, in
effect, he had never retired. Unfortunately for him, while serving such extended
term, the bank discovered his unauthorized grant of accommodation to accounts
engaged in "kiting" activity.Such act is a clear breach of the trust reposed in him
by the bank. He cannot now elude dismissal for a just cause by claiming he was
already retired compulsorily.#Is petitioner nevertheless entitled to retirement
benefits?#Under the Labor Code, only unjustly dismissed employees are entitled to
retirement benefits and other privileges including reinstatement and backwages.
Since petitioner's dismissal was for a just cause, he is not entitled to any
retirement benefit. To hold
otherwise would be to reward acts of willful breach of trust by the employee. It
would also open the floodgate to potential anomalous banking transactions by bank
employeesNotably, the Court has also disallowed claims for retirement benefits in
valid dismissal cases because the retirement plan itself precluded employees
dismissed for cause from availing it. Although no such prohibition in the
retirement plan was alleged or proved in this case, we nevertheless deny
petitioner's claims because his offenses, vis--vis his long years of service with
the bank, reflect a regrettable lack of loyalty which he should have strengthened
instead of betrayed.Petition is hereby DENIED.The end. Bow.# How do you reconcile
this with Brent? Shouldnt ABC have let her work again instead of ignored her

constructive resignation in order to recognize her services as regularized? The 4


fold test is present in Brent also but is it necessary to use the 4 fold test as
to fixed term employment? E wala namang conflict sa job nila and sa term kasi they
know the day certain. M confused. Does the time matter (5 years v. 3 months)? Or
does the amount of renewing matter (none v. 14 times)? So if Alegres contract was
renewed and the again, the day certain came and his services were terminated, does
it make him a regular employee???# I think the issue here more than anything is her
unceremonious termination as a principal W ITHOUT ANY EXPLANATION except that the
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