CASES ON RECRUITMENT AND PLACEMENT 1.

People vs Panis The specification of two or more

persons is not to create a condition prior to filing but rather itstates a presumption that the
individual is engaged in recruitment in consideration of a fee, however thenumber of persons is not
an essential ingredient to the act of recruitment or placement, and it will stillqualify even if only
one person has been involved. 2. People v Taguinay The three elements of the crime of illegal
recruitment in large scale, to wit: a) the offender has no valid license or authority required by law to
enable him to lawfully engage in recruitment and placement of workers; b) the offender undertakes
any of the activities within the meaning of "recruitment and placement" under Article 13(b) of the
Labor Code, or any of the prohibited practices enumerated under Article 34 of the said Code (now
Section 6 of Republic Act No. 8042); and c) the offender committed the same against three or more
persons, individually or as a group, are present in this case. 3. People vs Hashim The concerted
efforts of Aringoy, Lalli and Relampagos, Lolita was recruited and deployed to Malaysia to work as a
prostitute. Such conspiracy among Aringoy, Lalli and Relampagos could be deduced from the
manner in which the crime was perpetrated each of the accused played a pivotal role in
perpetrating the crime of illegal recruitment, and evinced a joint common purpose and design,
concerted action and community of interest. 4. People vs Cabais that an employee of a company or
corporation engaged in illegal recruitment may be held liable as principal, together with the
employer, if it is shown that he actively and consciously participated in the recruitment process. 5.
People vs Gamboa The precise degree of participation of accused-appellant Lourdes Gamboa in the
illegal recruitment scheme is very clear from the. She was present when the complainants were
being recruited and in fact personally recruited some of them, providing and assisting them in filling
up the application forms, answering their queries, receiving documents and payments, and
repeatedly assuring them that they would be able to leave for their respective jobs abroad. These
acts demonstrated beyond any cavil of doubt that she was a knowing and willing participant in
the recruitment activities of Melba Mioza and her group. 6. People vs Chowdury an employee of a
company or corporation engaged in illegal recruitment may be held liable as principal, together
with his employer, if it is shown that he actively and consciously participated in illegal recruitment.
7. People vs Gasacao Contrary to appellant's claim, he is not a mere employee of the manning
agency but the crewing manager. As such, he receives job applications, interviews applicants and
informs them of the agency's requirement of payment of performance or cash bond prior to the
applicant's deployment. As the crewing manager, he was at the forefront of the company's
recruitment activities. 8. Republic vs PASEI But the Court has already held, pending adjudication of
this case, that the liability of corporate directors and officers is not automatic. To make them jointly
and solidarily liable with their company, there must be a finding that they were remiss in directing the
affairs of that company, such as sponsoring or tolerating the conduct of illegal activities. 9. sunace
international management services vs nlrc There was an implied revocation of its agency relationsip
with its foreign principal when, after the termination of the original employment contract, the foreign
principal directly negotiated with Divina and entered into a new and separate employment contract in
Taiwan. 10. People vs Gallardo When the Labor Code speaks of illegal recruitment committed
against three (3) or more persons individually or as a group, it must be understood as referring
to the number of complainants in each case who are complainants therein, otherwise, prosecutions
for single crimes of illegal recruitment can be cumulated to make out a case of large scale illegal
recruitment. In other words, a conviction for large-scale illegal recruitment must be based on a
finding in each case of illegal recruitment of three or more persons whether individually or as a
group. 11. Marsaman Manning Agency vs NLRC the choice of which amount to award an illegally
dismissed overseas contract worker, i.e., whether his salaries for the unexpired portion of his
employment contract or three months salary for every year of the unexpired term, whichever is less,
comes into play only when the employment contract concerned has a term of at least one year or
more (Cajeras was contracted for 10 months only). 12. Serrano vs Gallant Maritim Service The
subject clause or for three months for every year of the unexpired term, whichever is less in
the 5th paragraph of Section 10 of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL. 13.
Yap vs Thenamaris Ship s Management The aforesaid provision of three months
violates the equal protection clause of the Constitution as it only applies to overseas workers with
less than one year contracts and not to local workers with fixed term employment and also not to
overseas workers with unexpired portion of one year or more in their contract. 14. Skipper s
United Pacific vs Doza the Supreme Court found the dismissal of De Gracia, et al. to be illegal
since Cosmoship merely sent a telex to Skippers, the local manning agency, claiming that De
Gracia, et al. were repatriated because the latter voluntarily pre-terminated their contracts. 15.
PERT/CPM Manpower Exponent co vs Vinuy Amendment introduced by RA 10022 cannot be given
retroactive application because it will result in an impairment of right that had accrued to the
respondents by virtue of Serrano ruling. 16. Sameer Overseas Placement Agency vs Cabiles
unconstitutional was Section 7 of Republic Act No. 10022 which provides that in case of
termination of overseas employment without just, valid, or authorized cause the migrant worker
shall be entitled to his salaries for the unexpired portion of his employment contract or for three
months for every year of the unexpired term, whichever is less. What made the provision
unconstitutional is the phrase or for three months for every year of the unexpired term,
whichever is less as this violates the equal protection clause and substantive due process
enshrined in the Constitution. Cases on Labor Standards 1. NASECO v NLRC The civil service does
not include Government owned or controlledcorporations (GOCC) which are organized as
subsidiaries of GOCC under the general corporation law 2. National Sugar Refineries Corp vs NLRC
The mere fact that ann employee is designated manager does not ipso facto make him
one. Designation should be reconciled with the actual job description of the employee, for it is the
Job Description that determines the nature of employment. 3. Makati Haberdashery Inc vs
NLRC Because the workers were proven to be regular employees, they shall be entitled to minimum
wages. 4. Labor Congress of the Phil vs NLRC The failure to work for one day, which resulted in the
spoilage of cheese curls does not amount to abandonment of work. The deliberate and unjustified
refusal to resume employment and not mere absence that constitutes abandonment. 5. Jose Rizal
College vs NLRC Regular holidays specified as such by law are known to both school and faculty
members as no class days, certainly the latter do not expect payment for said unworked
days and this was clearly in their minds when they entered into the teaching contracts. 6. Lambo vs.
NLRC G.R. No. 111042 October 26,1999 To be sure, not all quitclaims are per se invalid or against
public policy. But those (1) where there is clear proof that the waiver was wangled from an
unsuspecting or gullible person or (2) where the terms of settlement are unconscionable on their
face are invalid. 7. UFE VS. Vivar Jr. G.R. No. 79255 January 20, 1992 that the grant of holiday pay
be effective, not from the date of promulgation of the Chartered Bank case nor from
the date of effectivity of the Labor Code, butfrom October 23, 1984, the date of promulgation of
the IBAA case. 8. Autobus Transport Systems Inc. vs. Bautista G.R. No. 156367 May 16,2005 The
Supreme Court emphasized that it does not mean that just because an employee is paid on
commission basis he is already barred to receive service incentive leave pay. 9. Mercidar Fishing
Corporation vs. NLRC G.R. No. 112574 October 8,1998 Although fishermen perform non-agricultural
work away from their employer s business offices, the fact remains that throughout the duration
of their work they are under the effective control and supervision of the employer throught the
vessel s patron or master. Thus, Fishermen are not field personnels. 10. Duterte vs. Kingswood
Trading Co. Inc. G.R. No. 160325 October 4,2007 The employer, before it can legally dismiss its
employee on the ground of disease, must adduce a certification from a competent public authority
that the disease of which its employee is suffering is of such nature or at such a stage that it cannot
be cured within a period of six months even with proper treatment. 11. Asian Transmission
Corporation vs. Court of Appeals G.R. No. 144664 March 15, 2004
Since a worker isentitled to the enjoyment of ten (10) paidregular holidays, the fa
ct that two holidaysfall on the same date should not operate toreduce to nine the ten holiday pay
benefits aworker is entitled to receive 12. San Miguel Corporation vs. Court of Appeals, G.R. No.
G.R. No. 146775. January 30, 2002 there should be nodistinction between Muslims and non-
Muslimsas regards to payment of benefits for Muslimholidays 13. SSS v. SSS Supervisors Union-
CUGCO, 117 SCRA 746 The age-old rule governing the relation between labor and capital, or
management and employee of a "fair day's wage for a fair day's labor" remains as the basic factor in
determining employees' wages, and for that matter backwages. If there is no work performed by the
employee there can be no wage or pay unless, of course, the laborer was able, willing and ready to
work but was illegally locked out, or suspended 14. National Waterworks and Sewerage Authority vs.
NWSA Consolidated Unions, et al., G.R. No. L-18939 August 31, 1964 One of the distinguishing
characteristics by which a managerial employee may be known as expressed in the explanatory
note of Republic Act No. 2377 is that he is not subject to the rigid observance of regular office hours.
The true worth of his service does not depend so much on the time he spends in office but more on
the results he accomplishes. In fact, he is free to go out of office anytime. 15. Eastern
Telecommunications Philippines, Inc. v. Eastern Telecoms Employees Union G.R. No. 185665,
February 8,2012 A bonus is a gratuity or act of liberality of the giver which the recipient cannot
demand as amatter of right. The grant of a bonus is basically a management prerogative which
cannot be forced upon the employer who maynot be obliged to assume the onerous burden of
granting bonuses. However, a bonus becomes a demandable or enforceableobligation if the
additional compensation is granted without any conditions imposed for its payment. In such case,
the bonus istreated as part of the wage, salary or compensation of the employee. 16. Linton
Commercial Co. Inc. vs. Hellera, G.R. No. 163147, October 10,2007 the validity of the reduction of
working hours, taking into consideration the ff: arrangement was temporary, it was a more
humane solution instead of retrenchment of personnel, notice and consultations with workers,
consensus on how to solve problems and sufficient proof that company was suffering a
substantial loss. Management prerogative must be exercised in good faith and with due regard to
the rights of labor. 17. Bisig Manggagawa sa Tryco vs. NLRC, G.R. No. 151309, October 15,2008
Management prerogative of transferring and reassigning employees from one area of operation to
another in order to meet the requirements of the business is therefore generally not constitutive of
constructive dismissal. 18. Honda Philippines Inc. vs. Samahan ng Malayang Manggagawa sa
Honda G.R. No. 145561 June 15,2005 Payments for sick, vacation and maternity leaves, night
differentials, regular holiday pay and premiums for work done on rest days and special holidays are
excluded from the computation of basic salary. Pro-rating an employee s 13th month pay is to
undermine the wisdom behind such grant. 19. GAA vs. COURT OF APPEALS, G.R. No. L-44169
December 3, 1985. Article 1708 of the Civil Code provides: The laborer's wage shall not be
subject to execution or attachment,except for debts incurred for food, shelter, clothing and medical
attendance." It is beyond dispute that petitioner is not an ordinary or rank and file laborer but a
responsibly placeemployee, of El Grande Hotel, responsible for planning, directing, controlling, and
coordinating the activitiesof all housekeeping personnel so as to ensure
the cleanliness, maintenance and orderliness of allguestrooms, function rooms, public areas,
and the surroundings of the hotel. Considering the importanceof petitioner's function in El Grande
Hotel, it is undeniable that petitioner is occupying a position equivalent to that of a managerial or
supervisory position. We do not think that the legislature intended the exemption in Art.1708 of th
NCC to operate in favour of any laboring men or women in the sense that their work is manual. 20.
Prubankers Association vs. Prudential Bank and Trust Co. G.R. No. 131247 Jan. 25,1999
A disparity in wages between employees holding similar positions but indifferent regions
does not constitute wage distortion as contemplated by law. Different regional wages are
mandated by the law (specifically RA 6727) as there isrecognition that there exist regional disparities
in the cost of living. RA 6727 recognizesthat there are different needs for the different situations in
different regions of the country 21. Metropolitan Bank and Trust Company Employees Union-ALU-
TUCP vs. NLRC G.R. No. 102636 Sept. 10,1993 Wage Distortion means a situation where an
increase in prescribed wage rates results in the elimination or severe contradiction of
intentional quantitative differences in wage or salaryrates 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. 22. Mabeza vs.
NLRC, G.R. No. 118506, April 18,1997 It is true that loss of confidence is a valid ground to dismiss
an employee. But this is ideally only applied to workers whose positions require a certain level or
degree of trust particularly those who are members of the managerial staff. Evidently, an ordinary
chambermaid who has to sign out for linen and other hotel property from the property custodian
each day and who has to account for each and every towel or bedsheet utilized by the hotel s
guests at the end of her shift would not fall under any of these two classes of employees for which
loss of confidence, if ably supported by evidence, would normally apply. 23. Philippine Duplicators
Inc. vs. NLRC G.R. No. 110068, February 15,1995
Productivity bonuses are generally tied to the productivity, orcapacity for revenue pr
oduction, of a corporation; such bonusesclosely resemble profit-sharing payments and have
no clear directornecessary relation to the amount of work actually done by eachindividual employee.
More generally, a bonus is an amount grantedand paid ex gratia to the employee; its payment
constitutes an actof enlightened generosity and self interest on the part of theemployer,
rather than as a demandable or enforceable obligation.Since productivity bonus is not
demandable, then it cannot beconsidered part of basic salary when time comes to compute
13th month pay 24. Boie-Takeda Chemicals, Inc. vs. Dela Serna, G.R. No. 92174 The exigencies of
the work of seafearers necessitates that they be employed on a contractual basis. Thus, even with
the continued r-hiring by respondent company of petitioner to serve as radi officer onboard he
former s different vessels, this should be interpreted not as a basis for regularization but rather a
series of contract renewals. 25. Philippine Fuji Xerox Corp. vs. Trajano, G.R. No. 102552, March
24,1994 In remunerative schemes consisting of a fixed or guaranteed wage plus commission, the
fixed or guaranteed wage is patently the "basic salary" for this is what the employee receives for a
standard work period. Commissions are given for extra efforts exerted in consummating sales or
other related transactions. They are, as such, additional pay, which this Court has made clear do not
form part of the "basic salary." 26. PT&TC vs. NLRC, G.R. No. 99858, June 5,1995 The policy of not
accepting or considering as disqualified from work any woman worker who contracts marriage runs
afoul of the test of and the right against afforded all women workers by our labor laws and by no less
than the Constitution. While it is true that the parties to a contract may establish any agreements,
terms and conditions that may deem convenient, the same should not be contrary to law, morals,
good customs, public order or public policy. 27. Barayoga vs. APT, G.R. No. 160073, October
24,2005 Workers' claims for unpaid wages and monetary benefits cannot be paid outside of a
Bankruptcy or judicial liquidation proceedings against the employer. It is settled that
the application of Article 110 of the Labor Code is contingent upon the institution of those
proceedings, during which all
creditorsare convened,their claims ascertained and inventoried, and their preferences
determined. Assured thereby is an orderly determination of the preference given to creditors' claims;
andpreserved in harmony is the legal scheme of classification, concurrence and preference of
credits inthe Civil Code, the Insolvency Law, and the Labor Code 28. Kaisahan at Kapatiran ng Mga
Manggagawa at Kawani sa MWC-East Zone vs. Manila Water Company Inc. G.R. No. 174179,
November 16,2011 The award by the NLRC cannot be taken to mean an additional grant of
attorney s fees, in violation of the ten percent (10%) limit under Article 111 of the Labor Code
since it rests on an entirely different legal obligation than the one contracted under the
MOA. Simply stated, the attorney s fees contracted under the MOA do not refer to the amount
of attorney s fees awarded by the NLRC 29. Yrasuegui vs. PAL G.R. No. 168081,October
17,2008 Bona Fide Occupational Qualification: employment in particular jobs may not be limited to
persons of a particular sex, religion or national origin unless the employer can show that sex, religion
or national origin is an actual qualification for performing the job. BFOQ is valid provided that it
reflects an inherent quality reasonably necessary for satisfactory job performance 30. PT&TC vs.
NLRC G.R. No. 118978, May 23,1997 Same as above 31. Star Paper Corp. vs. Simbol, G.R. No.
164774,April 12,2006 ARTICLE 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. 32.
Duncan Association of Detailman-PTGWO vs. Galxo Welcome Philippines Inc. G.R. No. 162994
September 17,2004 The prohibition against pesonal or marital relationships with employees of
competitor companies upon Glaxo's employees is reasonable under the circumstances because
relationships of that nature might compromise the interests of the company. That Glaxo possesses
the right to protect its economic interest cannot be denied. 33. Domingo vs. Rayala, G.R. No.
155831, February 18,2008 It is enough that respondent's acts result in creating an intimidating,
hostile, or offensive environment for the employee, which was clearly manifested by the fact that
Domingo filed for leave of absence and requested transfer to another unit. CASES ON
CONTRACTING 1. Aliviado vs. Procter & Gamble Phils., Inc., G.R. No. 160506, March 9,2010
control test is only one of the factors that will be considered in determining whether there is
labor-only contracting. The existence of any one of the above factors would be sufficient. 2. San
Miguel Corporation v. MAERC Integrated Services, Inc., G.R. No. 144672, July 10, 2003 While
petitioner s checkers may not have stayed the full eight hours in the workplace because they
had to leave for their office to make their reports, their attendance need not be continuous to be
considered constant and therefore an indication of control. We find in fact that they maintained
sufficient presence at the workplace to be able to pinpoint the workers whose performance was not
at par and to report who they are. 3. Government Service Insurance System v. National Labor
Relations Commission G.R. No. 180045, November 17,2010 Petitioner cannot be allowed to deny its
obligation to respondents after it had benefited from their services. So long as the work, task, job, or
project has been performed for petitioner s benefit or on its behalf, the liability accrues for such
services. 4. New Golden City Builders & Development Corp. v. Court of Appeals, 463 Phil. 821, 829
[2003]) The test to determine the existence of independent contractorship is whether one claiming
to be an independent contractor has contracted to do the work according to his own methods and
without being subject to the control of the employer, except only to the results of the work. CASES
ON TERMINATION, JUST/AUTHORIZED CAUSES/BACKWAGES/REINSTATEMENT 1. Jo Cinema
Corporation v. Abellana, G.R. No. 132837, June 28, 2001, 360 SCRA 142, 148 The employee
was placed under preventive suspension for 20 days for unauthorized encashment of check, before
the lapse of said period and while the investigation was on-going, she filed a case for illegal
dismissal. The Supreme Court ruled that she was not dismissed. She could not have been
dismissed on the day she was preventively suspended because a formal investigation was still being
conducted. In fact, she even attended said investigation where she admitted having encashed the
checks. If she was indeed dismissed on said date, as she claims, petitioners would not have
continued with he investigation. Undoubtedly, the employee pre-empted the outcome of the
investigation by filing a complaint for illegal dismissal. Thus, it was she who signified her intention
not to report for work when she filed the instant case. 2. Industrial & Transport Equipment, Inc.
v.Tugade, G.R. No. 158539, January 15,2009 Their complaint for illegal dismissal was premature,
since after the expiration of the suspension period, they refused despite due notice to report for
work. 3. Caltex Philippines, Inc. v. Agad, G.R. No. 162017, April 23, 2010, 619 SCRA 196, 207,
citing Misconduct has been defined as a transgression of some established and definite rule of
action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not
mere error in judgment. To be serious, the misconduct must be of such grave and aggravated
character. 4. AMA Computer College-East Rizal v. Ignacio, G.R. No. 178520, June 23, 2009, 590
SCRA 633 Gross negligence has been defined as the want or absence of even slight care or
diligence as to amount to a reckless disregard of the safety of person or property. It evinces a
thoughtless disregard of consequences without exerting any effort to avoid them. To constitute a just
cause for termination of employment, the neglect of duties must not only be gross but habitual as
well. The single or isolated act of negligence does not constitute a just cause for the dismissal of
the employee. 5. St. Michael s Institute, et al. vs. NLRC, G.R. No. 145280, December 4,
2001; Department of Labor Manual, Sec. 4343.01 6. Philippine Aeolus Automotive United
Corporation v. NLRC, G.R. No. 124617, April 28,2000 Even when an employee is found to have
transgressed the employer's rules, in the actual imposition of penalties upon the erring employee,
due consideration must still be given to his length of service and the number of violations committed
during his employment. Where a penalty less punitive would suffice, whatever missteps may have
been committed by the employee ought not to be visited with a consequence so severe such as
dismissal from employment. 7. Libres vs. NLRC, National Steel Corp. et al., 307 SCRA 675 [1999])
It is the the duty of every employer to protect his employees from oversexed superiors. 8.
Royo vs. NLRC, 256 SCRA 639 [1996] FIGHTING WITHIN THE PREMISES OF A COMPANY IS A
JUST CAUSE FOR TERMINATING ONE'S EMPLOYMENT. - We hold that there was a just and
valid cause for the dismissal of petitioners. There is no question that they beat up Mario Alvarez,
inflicting on him physical injuries, for which they were convicted of slight physical injuries by the
Municipal Trial Court. The matter cannot be treated lightly. We agree with the NLRC that
petitioners committed serious misconduct within meaning of Art. 282(a) of the Labor Code, providing
for the dismissal of employees. The mauling incident was not just a private matter which had no
effect on the interests of the company. The fact is that petitioners mauled Alvarez because the
latter had reported them to the management for alleged anomalies committed against the
company. Even if it was a purely private quarrel between petitioners and Alvarez, the fact is that,
as a result of what they had done, they disturbed the peace in the company and committed a breach
of its discipline. We have held in several cases that fighting within the premises of a company is
a just cause for terminating one's employment. 9. Asian Design and Manufacturing Corp. vs. Hon.
Deputy Minister of Labor, 142 SCRA 79 [1986]) Misconduct has been defined as improper or wrong
conduct. It is the transgression of some established and definite rule of action, a forbidden act, a
dereliction of duty, willful character, and implies wrongful intent and not mere error of
judgment. The misconduct to be serious must be of such grave and aggravated character and
not merely trivial and unimportant. Such misconduct, however serious, must nevertheless be in
connection with the employee s work to constitute just cause for his separation.[20] Thus, for
misconduct or improper behavior to be a just cause for dismissal, (a) it must be serious; (b) must
relate to the performance of the employee s duties; and (c) must show that the employee has
become unfit to continue working for the employer.[21] Indeed, an employer may not be
compelled to continue to employ such person whose continuance in the service would be patently
inimical to his employer s business. 10. Padilla vs. NLRC and San Beda College, 273 SCRA 457
[1997]) The essence of due process in administrative proceedings is the opportunity to explain
one s side or a chance to seek reconsideration of the action or ruling complained of.[7] Thus,
the Labor Code requires the employer to furnish the employee with a written notice containing a
statement of the cause for termination and to afford said employee ample opportunity to be heard
and to defend himself with the assistance of his representative, if he so desires. The employer
is also required to notify the worker in writing of the decision to dismiss him, stating clearly the
reasons therefore.[8] In the instant case, SBC amply complied with the abovementioned requisites.
11. Chua-Qua vs. Clave G.R. No. 49549 August 30, 1990 Private respondent [the school]
utterly failed to show that petitioner [30-year old lady teacher] took advantage of her position to court
her student [16-year old]. If the two eventually fell in love, despite the disparity in their ages and
academic levels, this only lends substance to the truism that the heart has reasons of its own which
reason does not know. But, definitely, yielding to this gentle and universal emotion is not to be so
casually equated with immorality. The deviation of the circumstances of their marriage from the
usual societal pattern cannot be considered as a defiance of contemporary social mores. 12.
Santos Jr. vs. NLRC, G.R. No. 115795 March 6, 1998 A teacher, both in his official and personal
conduct, must display exemplary behavior. He must freely and willingly accept restrictions on his
conduct that might be viewed irksome by ordinary citizens. In other words, the personal behavior of
teachers, in and outside the classroom, must be beyond reproach. 13. Villarama vs. NLRC, G.R. No.
106341 September 2, 1994 As a managerial employee, petitioner is bound by a more exacting work
ethics. He succumbed to his moral perversity and perpetrated against his subordinate, he provides
justifiable ground for his dismissal for lack of trust and confidence. Sexual harassment is
reprehensible enough but more when inflicted by those with moral ascendancy over their victims. 14.
Gilles v. Court of Appeals, G.R. No. 149273, June 5, 2009 the law recognizes and resolves such
a situation in favor of the employees in order to protect their rights from the coercive acts of the
employer. Resignation contemplates a voluntary act; thus, an employee who is forced to
relinquish his position due to the employer s unfair or unreasonable treatment is deemed to
have been illegally terminated or discharged. The test of constructive dismissal is whether a
reasonable person in the employee s position would have felt compelled to give up his position
under the circumstances. 15. Westin Philippine Plaza Hotel vs. NLRC, G. R. No. 121621, May 3,
1999) the willfulness of private respondent s insubordination was shown by his continued
refusal to report to his new work assignment. Thus, upon receipt of the order of transfer, private
respondent simply took an extended vacation leave. Then, when he reported back to work, he
did not discharge his duties as linen room attendant despite repeated reminders from the personnel
office as well as his union. Worse, while he came to the hotel everyday, he just went to the union
office instead of working at the linen room. More than that, when he was asked to explain why no
disciplinary action should be taken against him, private respondent merely questioned the transfer
order without submitting the required explanation. Based on the foregoing facts, private
respondent s intransigence was very evident. 16. Allied Banking Corporation vs. Court of
Appeals , G.R. No. 144412. November 18, 2003 The rule is that the transfer of an employee
ordinarily lies within the ambit of the employer s prerogatives.[23] The employer exercises the
prerogative to transfer an employee for valid reasons and according to the requirement of its
business, provided the transfer does not result in demotion in rank or diminution of the
employee s salary, benefits and other privileges.[24] In illegal dismissal cases, the employer
has the burden of showing that the transfer is not unnecessary, inconvenient and prejudicial to the
displaced employee.[25] The constant transfer of bank officers and personnel with accounting
responsibilities from one branch to another is a standard practice of Allied Bank, which has more
than a hundred branches throughout the country 17. Homeowners Savings and Loan Association,
Inc. v. NLRC, G.R. No. 97067, 26 September 1996, 262 SCRA 406) The acceptability of the
proposition that transfer made by an employer for an illicit or underhanded purpose i.e., to
defeat an employee s right to self-organization, to rid himself of an undesirable worker, or to
penalize an employee for union activities cannot be upheld is self-evident and cannot be
gainsaid. The difficulty lies in the situation where no such illicit, improper or underhanded
purpose can be ascribed to the employer, the objection to the transfer being grounded solely upon
the personal inconvenience or hardship that will be caused to the employee by reason of the
transfer. 18. Philippine Industrial Security Agency Corporation v. Aguinaldo, G.R. No. 149974, June
15, 2005, 460 SCRA 229, 239; A transfer amounts to constructive dismissal when the transfer is
unreasonable, unlikely, inconvenient, impossible, or prejudicial to the employee. 19. Mendoza v.
Rural Bank of Lucban, G.R. No. 155421, July 7, 2004, 433 SCRA 756, 765-766 In the pursuit of its
legitimate business interest, management has the prerogative to transfer or assign employees from
one office or area of operation to another -- provided there is no demotion in rank or diminution of
salary, benefits, and other privileges; and the action is not motivated by discrimination, made in bad
faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is
inherent in the right of employers to control and manage their enterprise effectively. The right of
employees to security of tenure does not give them vested rights to their positions to the extent of
depriving management of its prerogative to change their assignments or to transfer them. 20.
Floren Hotel v. National Labor Relations Commission, G.R. No. 155264, May 6, 2005, 458 SCRA
128, 145; diminution of benefits of an employee may constitute constructive dismissal. This is
an involuntary resignation resorted to when continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in rank and/or a diminution in pay; or when a
clear discrimination, insensibility or disdain by an employer becomes unbearable to the
employee. 21. Jarcia Machine Shop and Auto Supply, Inc. v. NLRC, G.R. No. 118045,
January 2, 1997, 266 SCRA 97, 109) In case of constructive dismissal, the employer has the
burden of proving that the transfer and demotion of an employee are for valid and legitimate grounds
such as genuine business necessity. Particularly, for a transfer not to be considered a constructive
dismissal, the employer must be able to show that such transfer is not unreasonable, inconvenient,
or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries,
privileges and other benefits. Failure of the employer to overcome this burden of proof, the
employee s demotion shall no doubt be tantamount to unlawful constructive dismissal. 22.
Damasco vs. NLRC, G. R. No. 115755, December 4, 2000 As to Sia s allegation that Ms.
Damasco committed serious misconduct or willful disobedience of lawful order in connection with her
work, we find no tenable support. Even if Sia directed her to be assigned at his store in Metro
Manila, her act of refusing to be detailed in Metro Manila could hardly be characterized a willful or
intentional disobedience of her employer s order. It was Sia s order that appears to us
whimsical if not vindictive. Reassignment to Metro Manila is prejudicial to Ms. Damasco, as she
and her family are residing in Olongapo City. This would entail separation from her family and
additional expenses on her part for transportation and food. Damasco s reassignment order was
unreasonable, considering the attendant circumstances. 23. Phil. Telegraph and Telephone Corp. v.
Laplana. G.R. No. 76645, July 23, 1991, 199 SCRA 485 The situation here presented is of an
employer transferring an employee to another office in the exercise of what it took to be sound
business judgment and in accordance with pre-determined and established office policy and
practice, and of the latter having what was believed to be legitimate reasons for declining that
transfer, rooted in considerations of personal convenience and difficulties for the family. Under these
circumstances, the solution proposed by the employee herself, of her voluntary termination of her
employment and the delivery to her of corresponding separation pay, would appear to be the most
equitable. Certainly, the Court cannot accept the proposition that when an employee opposes his
employer's decision to transfer him to another work place, there being no bad faith or underhanded
motives on the part of either party, it is the employee's wishes that should be made to prevail. 24.
Dosch v. NLRC, 208 Phil. 259; 123 SCRA 296 (1983). There can be no dispute that the
constitutional guarantee of security of tenure mandated under Section 9, Article 2, 1973 Constitution
applies to all employees and laborers, whether in the government service or in the private sector.
The fact that petitioner is a managerial employee does not by itself exclude him from the protection
of the constitutional guarantee of security of tenure. Even a manager in a private concern has the
right to be secure in his position, to decline a promotion where, although the promotion carries an
increase in his salary and rank but results in his transfer to a new place of assignment or station and
away from his family. Such an order constitutes removal without just cause and is illegal. Nor can the
removal be justified on the ground of loss of confidence as now claimed by private respondent
Northwest, insisting as it does that by petitioner's alleged contumacious refusal to obey the transfer
order, said petitioner was guilty of insubordination. 25. Escobin vs. NLRC, G.R. No. 118159. April
15, 1998 It was grossly inconvenient for the guards who were residents and heads of families in
Basilan. The guards were not provided with funds to defray their transportation and living
expenses. The dismissal in this case was too harsh a penalty for the insubordination which
was neither willful nor intentional. The guards failure to answer PISI s show-cause
letters does not negate this conclusion as PISI granted other guards a second chance to explain, an
opportunity it denied Escobin and his group. 26. Yuco Chemical Industries, Inc. vs. Ministry of Labor
and Employment, 185 SCRA 727, 730-731, May 28, 1990 The managerial prerogative to transfer
personnel must be exercised without grave abuse of discretion and putting to mind the basic
elements of justice and fair play. 5 Having the right should not be confused with the manner in
which that right must be exercised. Thus it cannot be used as a subterfuge by the employer to rid
himself of an undesirable worker. Nor when the real reason is to penalize an employee for his union
activities and thereby defeat his right to self-organization. But the transfer can be upheld when there
is no showing that it is unnecessary, inconvenient and prejudicial to the displaced employee . 6 27.
Manila Memorial Park Cemetery, Inc. v. Panado, G.R. No. 167118, June 15, 2006, 490 SCRA
751, 770) An employer may terminate the services of an employee due to loss of trust and
confidence. However, the loss must be based not on ordinary breach by the latter of the trust
reposed in him by the former, but, in the language of Article 282(c) of the Labor Code, on willful
breach. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable
excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently. Elsewise stated, it must rest on substantial grounds and not on the
employer s arbitrariness, whims, caprices or suspicion; otherwise, the employee would eternally
remain at the mercy of the employer. It should be genuine and not simulated; nor should it
appear as a mere afterthought to justify earlier action taken in bad faith or a subterfuge for causes
which are improper, illegal or unjustified. It has never been intended to afford an occasion for
abuse because of its subjective nature. There must, therefore, be an actual breach of duty
committed by the employee which must be established by substantial evidence.[32] (Underscoring
ours.) 28. Premiere Development Bank v. Mantal, G.R. No. 167716, March 23, 2006, 485
SCRA 234, 239) An employer may terminate an employee for fraud or willful breach by the
employee of the trust reposed in him by his employer or duly authorized representative. However,
the right of an employer to terminate an employee based on loss of confidence must not be
exercised arbitrarily and without just cause. To be a valid reason for dismissal, loss of confidence
must be genuine. Uncorroborated assertions and accusations by the employer will not suffice,
otherwise it will jeopardize the constitutional guarantee of security of tenure of the employee. 29.
National Sugar Refineries Corporation v. National Labor Relations Commission G.R. No.
122277. February 24, 1998 the Court ruled that supervisory employees should be considered as
officers or members of the managerial staff. As officers or members of the managerial staff, they
are not entitled to overtime, rest day, and holiday pay. 30. JGB & Associates v. National Labor
Relations Commission, G.R. No. 109390. March 7, 1996; Employees enjoy security of
tenure; they can only be dismissed for just cause and only after due process.[5] If an employee is
dismissed without just cause, he is entitled to reinstatement with backwages up to the time of his
actual reinstatement,[6] if the contract of employment is not for a definite period; or to the payment
of his salaries corresponding to the unexpired portion of the employment contract, if the contract is
for a definite period.[7] If the dismissal is for a just cause but it was made without due process, the
employee is entitled to the payment of an indemnity.[8] 31. Chua v. National Labor Relations
Commission, G.R. No. 146780, March 11, 2005, 453 SCRA 244, 254) Gross negligence under
Article 282 of the Labor Code, as amended, connotes want of care in the performance of one s
duties, while habitual neglect implies repeated failure to perform one s duties for a period of
time, depending upon the circumstances.[25] Clearly, the petitioner s repeated failure to submit
the DCRs on time, as well as the failure to submit the doctors call cards constitute habitual
neglect of duties. Needless to state, the foregoing clearly indicate that the employer had a just
cause in terminating the petitioner s employment. 32. National Bookstore, Inc. v. Court of
Appeals, G.R. No. 146741. February 27, 2002) Significantly, in order to constitute a just cause
for the employee s dismissal, the neglect of duties must not only be gross but also habitual.
Thus, the single or isolated act of negligence does not constitute a just cause for the dismissal of the
employee.[20] Verily, assuming arguendo that private respondents were negligent, although we
find otherwise, it could only be a single or an isolated act that cannot be categorized as habitual,
hence, not a just cause for their dismissal. 33. Abandonment (De Paul/King Philip Custom Tailor v.
NLRC, G.R. No. 129824, March 10,1999); Simple logic should tell us that the receipt of Renato and
Priscila Villavecer of the notices sent to them is not proof that the other private respondents received
their notices. Furthermore, these notices were sent after private respondents had been
dismissed on 6 and 12 April 1993. By then, the illegal dismissal of the private respondents was
already an accomplished fact. The letters cannot validate their illegal dismissal. It must be
stressed that abandonment of work does not per se sever the employer-employee relationship. It
is merely a form of neglect of duty, which is in turn a just cause for termination of
employment. The operative act that will ultimately put an end to this relationship is the dismissal
of the employee after complying with the procedure prescribed by law. If the employer does not
follow this procedure, there is illegal dismissal. 34. Habitual absenteeism (Challenge Socks
Corporation v. Court of Appeals, G.R. No. 165268, November 8,2005); and Habitual neglect implies
repeated failure to perform one s duties for a period of time. Buguat s repeated acts of
absences without leave and her frequent tardiness reflect her indifferent attitude to and lack of
motivation in her work. Her repeated and habitual infractions, committed despite several warnings,
constitute gross misconduct. Habitual absenteeism without leave constitute gross negligence and
is sufficient to justify termination of an employee. 35. Continued unexplained absences (Philippine
Geothermal, Inc. v. NLRC, G.R. No. 106370, September 8,1994) Petitioner has not been shown to
be without sympathy or concern for Alvarez. He was given fifty (50) days work-connected accident
(WCA) leave with pay to allow him to recuperate from his injury without loss of earnings. He was
allowed to use his leave credits and was actually given an additional fifteen (15) days WCA leave to
allow him to consult his doctors and fully recover from his injuries. Moreover, petitioner gave Alvarez
several warnings to report for work, otherwise, he would face disciplinary sanctions. In spite of these
warnings, Alvarez was absent without official leave (AWOL) for eighteen (18) days. Under company
policy, of which Alvarez was made aware, employees who incur without valid reason six (6) or
more absences are subject to dismissal. 36. Philippine Airlines, Inc. v. NLRC, G.R. No.
82471, February 18, 1991, 194 SCRA 139 Philippine Airlines (PAL) cannot be legally compelled to
continue with the employment of a person admittedly guilty of gross negligence in the performance
of his duties although it was his first offense. In that case, we noted that a mere delay on PAL's
flight schedule due to aircraft damage entails problems like hotel accommodations for its
passengers, re-booking, the possibility of law suits, and payment of special landing fees not to
mention the soaring costs of replacing aircraft parts. 37. Fuentes v. National Labor Relations
Commission, G.R. No. L-75955, October 28, 1988, 166 SCRA 752 it would be unfair to compel
Philippine Banking Corporation to continue employing its bank teller. In that case, we observed
that although the teller's infraction was not habitual, a substantial amount of money was lost. The
deposit slip had already been validated prior to its loss and the amount reflected thereon is already
considered as current liabilities in the bank's balance sheet. Indeed, the sufficiency of the evidence
as well as the resultant damage to the employer should be considered in the dismissal of the
employee. In this case, the damage went as far as claiming the life of a child. 38. School of the
Holy Spirit of Quezon City vs. Taguiam, G.R. No. 165565,July 14,2008 respondent's negligence,
although gross, was not habitual. In view of the considerable resultant damage, however, we are in
agreement that the cause is sufficient to dismiss respondent. This is not the first time that we have
departed from the requirements laid down by the law that neglect of duties must be both gross and
habitual. 39. Columbus Philippine Bus Corporation v. NLRC, 417 Phil. 81, 100 [2001] For a valid
finding of abandonment, two (2) factors must be present, viz: (a) the failure to report for work or
absence without valid or justifiable reason; and (b) a clear intention to sever employer-employee
relationship, with the second element as the more determinative factor being manifested by some
overt acts.[15] The herein petitioner failed to present evidence to justify the dismissal of the private
respondents. The position paper of petitioner merely contains bare allegations that the hiring of
private respondents was purely on commission basis; that they have no working hours; that they are
not required to work everyday and that they work only when they wish to earn. It also alleged that
private respondents were not dismissed nor suspended, but that they allegedly abandoned their jobs
by simply failing to work. 40. Sta. Catalina College v. NLRC, G.R. No. 144483, 19 November 2003)
HILARIA ABANDONED HER WORK, for which reason, she could not be credited for her services
from 1955 to 1970 in determining her retirements benefits for after 1 year of leave of absence in
1971 without her requesting for extension thereof as in fact she had not been heard from until she
resurfaces in 1982 when she reapplied, she abandoned her teaching position as in fact she was
employed elsewhere and effectively relinquished the retirement benefits that accumulated during
said period. 41. Jo vs. NLRC, G.R. No. 121605. February 2, 2000 In determining the existence of an
employer-employee relationship, the following elements are considered: 1) selection and
engagement of worker; 2) power of dismissal; 3) the payment of wages; and 4) the power to control
the worker s conduct, with the latter assuming primacy in the overall consideration. The power of
control refers to the existence of the power and not necessarily to the actual exercise thereof. It is
not essential for the employer to actually supervise the performance of duties of the employee; it is
enough that the employer has the right to wield that power. 42. A Prime Security Services
Inc. v. NLRC, 220 SCRA 142, 145 [1993] The Court cannot uphold and give weight to private
respondent s resignation letter (Annex "D"[8]) which appears to have been written and submitted
at the instance of petitioner. Its form is of the company s and its wordings are more of a waiver
and quitclaim. Moreover, the supposed resignation was not acknowledged before a notary public.
Petitioner s failure to deny that Sugarland is its sister company and that petitioner absorbed
Sugarland s security contract and security personnel assumes overriding significance over the
resignation theorized upon, evincing petitioner s design to ignore or violate labor laws through
the use of the veil of corporate personality. The Court cannot sanction the practice of some
companies which, shortly after a worker has become a regular employee, effects the transfer of the
same employee to another entity whose owners are the same, or identical, in order to deprive
subject employee of the benefits and protection he is entitled to under the law. 43. Bombase v.
NLRC, 245 SCRA 496, 500 [1995] the relationship between the petitioner and the officials of private
respondent has been strained by too much antagonism. Officials of private respondent have
expressed lack of confidence on petitioner while petitioner has moved to cite the general manager of
private respondent for contempt as indeed he was fined for contempt. Given this strained
relationship, the reinstatement of petitioner will be neither beneficial for her nor her employer. 44.
Bristol Myers Squibb (Phils.), Inc. v. Baban, G.R. No. 167449, December 17, 2008, 574 SCRA
198 Respondent anchors his plea of mercy on filial loyalty to his father and the fact that the samples
were still going to the proper parties. His father s loss is of no
moment since petitioner has a right not to associate their product with
winning or losing politicians. It has every right to ensure that the distribution of medical samples
is done in the manner exactly prescribed. Moreover, his claim that the samples would have still
gone to the proper parties is wrong. These products were supposed to have been
returned to petitioner or one of its agents. 45. Philippine Pizza, Inc. v. Bungabong, G.R. No. 154315,
May 9,2005 the employee was not afforded due process despite the dismissal being upon a just
cause, considering that he was not given a fair and reasonable opportunity to confront his accusers
and to defend himself against the charge of theft notwithstanding his having submitted his
explanation denying that he had stolen beer from the company dispenser. 46. Mendoza vs. HMS
Credit Corporation, G.R. No. 187232, April 17,2013 It is evident that although there was a just cause
in terminating the services of Mendoza, respondents were amiss in complying with the two-notice
requirement. Following prevailing jurisprudence on the matter, if the dismissal is based on just
cause, then the non-compliance with non-procedural due process should not render the termination
from employement illegal or ineffectual. Instead, the employer must indemnify the employee in the
form of nominal damages 47. Community Rural Bank of San Isidro (N.E.), Inc. v. Paez, G.R. No.
158707, November 27,2006 in the case of supervisors or personnel occupying positions of
responsibility, loss of trust justifies termination.[45] Loss of confidence as a just cause for
termination of employment is premised on the fact that an employee concerned holds a position of
trust and confidence. This situation holds where a person is entrusted with confidence on delicate
matters, such as the custody, handling, or care and protection of the employer s property. But,
in order to constitute a just cause for dismissal, the act complained of must be work-related
such as would show the employee concerned to be unfit to continue working for the employer. 48.
Concepcion vs. Minex Import Corp., G.R. No. 153569, January 24,2012 It is unfair to require an
employer to first be morally certain of the guilt of the employee by awaiting a conviction before
terminating him when there is already sufficient showing of the wrongdoing. Requiring that certainty
may prove too late for the employer, whose loss may potentially be beyond repair. In the present
case, no less than the DOJ Secretary found probable cause for qualified theft against Concepcion.
That finding was enough to justify her termination for loss of confidence. 49. Nicolas v. National
Labor Relations Commission, (327 Phil. 883, 886-887 (1996) Under the law, proof beyond
reasonable doubt is required to sustain a criminal conviction, an inapplicable requirement in a labor
complaint. In fact, and as correctly ruled by the NLRC, the judgment in a criminal case has no
binding or conclusive effect in a labor case. Conviction of an employee in a criminal case is not
indispensable to warrant an employee s dismissal. 50. Reno Foods, Inc. v. Nagkakaisang Lakas
ng Manggagawa (NLM) Katipunan, G.R. No. 164016, 15 March 2010, 615 SCRA 240
Criminal cases require proof beyond reasonable doubt while labor
disputes require only substantial evidence, which means such rele
vant evidence a reasonable mind might accept as adequate to justify a
conclusion.[20] The evidence in this case was reviewed by the appellate court and two labor
tribunals endowed with expertise on the matter the Labor Arbiter and the NLRC. They all
found substantial evidence to conclude that Capor had been validly dismissed for dishonesty or
serious misconduct. It is settled that factual findings of quasi-judicial agencies are generally
accorded respect and finality so long as these are supported by substantial evidence. In the
instant case, we find no compelling reason to doubt the common findings of the three reviewing
bodies. 51. Lynvil Fishing Enterprises, Inc. v. Ariola, G.R. No.181974, February 1,2012 that proof
beyond reasonable doubt of an employee s misconduct is not required when loss of confidence
is the ground for dismissal. It is sufficient if the employer has some basis to lose confidence
or that the employer has reasonable ground to believe or to entertain the moral conviction that the
employee concerned is responsible for the misconduct and that the nature of his participation therein
rendered him absolutely unworthy of the trust and confidence demanded by his position. 52. Lim v.
National Labor Relations Commission, G.R. No. 118434, July 26, 1996, 259 SCRA 485, 496-497
gross inefficiency falls within the purview of other causes analogous to the
foregoing, and constitutes, therefore, just cause to terminate an employee under Article 282 of
the Labor Code. One is analogous to another if it is susceptible of comparison with the latter
either in general or in some specific detail; or has a close relationship with the latter.[32] Gross
inefficiency is closely related to gross neglect, for both involve specific acts of omission
on the part of the employee resulting in damage to the employer or to his business. 53. Leonardo
v. National Labor Relations Commission, G.R. No. 125303 June 16, 2000, 333 SCRA 589, 598-
599 the right to demote an employee also falls within the category of management
prerogatives. An employer is entitled to impose productivity standards for its workers, and in fact,
non-compliance may be visited with a penalty even more severe than demotion. Failure to observe
prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may
constitute just cause for dismissal. 54. Aliling v. Feliciano, G.R. No. 185829, April 25,2012 The letter-
offer to Aliling states that the regularization standards or the performance norms to be used are still
to be agreed upon by him and his supervisor. Moreover, Aliling was assigned to GX trucking sales,
an activity entirely different to the Seafreight Sales for which he was originally hired and trained for.
In the present case, there was no proof that Aliling was informed of the standards for his continued
employment, such as the sales quota, at the time of his engagement. 55. Cathedral School of
Technology v. NLNRC, G.R. No. L-101438 October 13, 1992) there can be no award for
backwages, for it must be pointed out that while backwages are granted on the basis of equity for
earnings which a worker or employee has lost due to his illegal dismissal, 24 where private
respondent's dismissal is for just cause, as is the case herein, there is no factual or legal basis to
order payment of backwages; otherwise, private respondent would be unjustify enriching herself at
the expense of petitioners. 25 Where the employee's dismissal was for a just cause, it would be
neither fair nor just to allow the employee to recover something he has not earned or could not have
earned 56. Oania v. National Labor Relations Commission, G.R. Nos. 97162-64, 1 June 1995, 244
SCRA 669, 674 Violation of a company rule prohibiting the infliction of harm or physical injury
against any person under the particular circumstances provided for in the same rule may be deemed
analogous to "serious misconduct" stated in Art. 282 (a) above. To repeat, however, there is no
substantial evidence definitely pointing to petitioners as the perpetrators of the mauling of Malong.
What is an established fact is that, after investigation, private respondent dismissed them and,
thereafter, a criminal complaint was filed against petitioners M.F. VIOLAGO OIL TANK TRUCKS VS
NLRC There is constructive dismissal of employees when the proprietor of an oil-tank trucking
business, withdrew the trucks driven by them for no just cause and without prior clearance from the
Ministry of Labor and when the employer unilaterally reduced the employees' wages in 1979 without
their consent and with no Ministry of Labor's authority. PHIL SHEET METAL WORKERS' UNION VS
COURT OF INDUSTRIAL RELATIONS In formulating the substitutionary doctrine, the only
consideration involved was the employees (principal) interest in the existing bargaining
agreement. The agent s (union) interest never entered the picture. The majority of the
employees, as an entity under the statute, is the true party in interest to the contract, holding rights
through the agency of the union representative. Thus, any exclusive interest claimed by the agent is
defeasible at the will of the principal. The substitutionary doctrine only provides that the
employees cannot revoke the validly executed collective bargaining contract with their employer by
the simple expedient of changing their bargaining agent. And it is in the light of this that the phrase
said new agent would have to respect said contract must be understood. It only means that
the employees, thru their new bargaining agent, cannot renege on their collective bargaining
contract, except of course to negotiate with management for the shortening thereof. The
substitutionary doctrine cannot be invoked to support the contention that a newly certified
collective bargaining agent automatically assumes all the personal undertakings like the no-
strike stipulation here in the collective bargaining agreement made by the deposed union.
When BBWU bound itself and its officers not to strike, it could not have validly bound also all the
other rival unions existing in the bargaining units in question. BBWU was the agent of the
employees, not of the other unions which possess distinct personalities. EDGE APPAREL VS NLRC
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.Not every loss incurred or
expected to be incurred by the employer will justify retrenchment, since, in the nature of things, the
possibility of incurring losses is constantly present, in greater or lesser degree, in carrying on the
business operations.Retrenchment is normally resorted to by management during periods of
business reverses and economic difficulties occasioned by such events as recession, industrial
depression, or seasonal fluctuations. It is an act of the employer of reducing the work force because
of losses in the operation of the enterprise, lack of work, or considerable reduction on the volume of
business.Retrenchment is, in many ways, a measure of last resort when other less drastic means
have been tried and found to be inadequate. A lull caused by lack of orders or shortage of materials
must be of such nature as would severely affect the continued business operations of the employer
to the detriment of all and sundry if not properly addressed. The institution of "new methods or
more efficient machinery, or of automation" is technically a ground for termination of employment by
reason of installation of labor-saving devices but where the introduction of these methods is resorted
to not merely to effect greater efficiency in the operations of the business but principally because of
serious business reverses and to avert further losses, the device could then verily be considered one
of retrenchment. The general standards or elements needed for the retrenchment to be valid - i.e.,
that the losses expected are substantial and not merely de minimis in extent; that the expected
losses are reasonably imminent such as can be perceived objectively and in good faith by the
employer; that the retrenchment is reasonably necessary and likely to effectively prevent the
expected losses; and that the imminent losses sought to be forestalled are substantiated[21] -were
adequately shown in the present case. WILTSHIRE FILE CO. VS NLRC Redundancy in an
employer's personnel force necessarily or even ordinarily refers to duplication of work. That no other
person was holding the same position that private respondent held prior to the termination of his
services, does not show that his position had not become redundant. Indeed, in any well-organized
business enterprise, it would be surprising to find duplication of work and two (2) or more people
doing the work of one person. We believe that redundancy, for purposes of our Labor Code, exists
where the services of an employee are in excess of what is reasonably demanded by the actual
requirements of the enterprise. Succinctly put, a position is redundant where it is superfluous, and
superfluity of a position or positions may be the outcome of a number of factors, such as overhiring
of workers, decreased volume of business, or dropping of a particular product line or service activity
previously manufactured or undertaken by the enterprise. AMERICAN HOME ASSURANCE CO. VS
NLRC While it is true that an employer s exercise of management prerogatives, with or without
reason, does not per se constitute unjust discrimination, such exercise, if clearly shown to be in
grave abuse of discretion, may be looked into by the courts. Indeed, the hiring, firing, transfer,
demotion, and promotion of employees are traditionally identified as management
prerogatives. However, they are not absolute management prerogatives. They are subject to
limitations found in law, a collective bargaining agreement, or general principles of fair play and
justice LOPEZ SUGAR CORPORATION VS FRANCO A redundant position is one rendered
superfluous by any number of factors, such as over-hiring of workers, decreased volume of
business, dropping of a particular product line previously manufactured by the company or phasing
out of a service activity priorly undertaken by the business. Under these conditions, the employer
has no legal obligation to keep in its payroll more employees than are necessary for the operation of
its business. Contrary to the petitioner s claim, the employer must comply with the following
requisites to ensure the validity of the implementation of a redundancy program: (1) a written notice
served on both the employees and the Department of Labor and Employment at least one month
prior to the intended date of retrenchment; (2) payment of separation pay equivalent to at least one
month pay or at least one month pay for every year of service, whichever is higher; (3) good faith in
abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what positions
are to be declared redundant and accordingly abolished. ASUFRIN JS. VS. SAN MIGUEL The
determination that employee s services are no longer necessary or sustainable and, therefore,
properly terminable is an exercise of business judgment of the employer. The wisdom or
soundness of this judgment is not subject to discretionary review of the Labor Arbiter and the NLRC,
provided there is no violation of law and no showing that it was prompted by an arbitrary or malicious
act. In other words, it is not enough for a company to merely declare that it has become
overmanned. It must produce adequate proof that such is the actual situation to justify the dismissal
of the affected employees for redundancy. PANLILIO VS NLRC We have held that it is important for
a company to have fair and reasonable criteria in implementing its redundancy program, such as but
not limited to, (a) preferred status, (b) efficiency and (c) seniority PHILIPPINE CARPET
EMPLOYEES ASSOCIATION VS SECRETARY OF LABOR AND EMPLOYMENT The prerogative
of an employer to retrench its employees must be exercised only as a last resort, considering that it
will lead to the loss of the employees livelihood. It is justified only when all other less drastic
means have been tried and found insufficient or inadequate. Moreover, the employer must prove the
requirements for a valid retrenchment by clear and convincing evidence; otherwise, said ground for
termination would be susceptible to abuse by scheming employers who might be merely feigning
losses or reverses in their business ventures in order to ease out employees. The requirements
are: xxx (1) that the retrenchment is reasonably necessary and likely to
prevent business losses which, if already incurred, are not merely de minimis, but substantial,
serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in
good faith by the employer; (2) that the employer served written notice both to the employees and to
the Department of Labor and Employment at least one month prior to the intended date of
retrenchment; (3) that the employer pays the retrenched employees separation pay equivalent to
one month pay or at least month pay for every year of service, whichever is higher; (4) that the
employer exercises its prerogative to retrench employees in good faith for the advancement of its
interest and not to defeat or circumvent the employees right to security of tenure; and (5) that
the employer used fair and reasonable criteria in ascertaining who would be dismissed and who
would be retained among the employees, such as status (i.e., whether they are temporary, casual,
regular or managerial employees), efficiency, seniority, physical fitness, age, and financial hardship
for certain workers. What the law speaks of is serious business losses or
financial reverses. Sliding incomes or decreasing gross revenues are not necessarily losses, much
less serious business losses within the meaning of the law. The bare fact that an employer may
have sustained a net loss, such loss, per se, absent any other evidence on its impact on the
business, nor on expected losses that would have been incurred had operations been continued,
may not amount to serious business losses mentioned in the law.The employer must also show that
its losses increased through a period of time and that the condition of the company will not likely
improve in the near future. PEPSI COLA PRODUCTS, PHILIPPINES VS MOLON Retrenchment is
defined as the termination of employment initiated by the employer through no fault of the employee
and without prejudice to the latter, resorted by management during periods of business recession,
industrial depression or seasonal fluctuations or during lulls over shortage of materials. It is a
reduction in manpower, a measure utilized by an employer to minimize business losses incurred in
the operation of its business. COCA-COLA BOTTLERS INC VS NLRC The definition that regular
employees are those who perform activities which are desirable and necessary for the business of
the employer is not determinative in this case. Any agreement may provide that one party shall
render services for and in behalf of another for a consideration (no matter how necessary for the
latter's business) even without being hired as an employee. This is precisely true in the case of an
independent contractorship as well as in an agency agreement. The Court agrees with the
petitioner's argument that Article 280 is not the yardstick for determining the existence of an
employment relationship because it merely distinguishes between two kinds of employees, i.e.,
regular employees and casual employees, for purposes of determining the right of an employee to
certain benefits, to join or form a union, or to security of tenure. Article 280 does not apply where
the existence of an employment relationship is in dispute. INTERNATIONAL HARDWARE INC VS
NLRC In case of termination due to the installation of labor-saving devices or redundancy the worker
affected thereby shall be entitled to separation pay equivalent to at least one (1) month pay or to at
least one month pay for every year of service, whichever is higher. However, 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. SEBUGUERO VS NLRC The requirement of notice to both the
employees concerned and the Department of Labor and Employment (DOLE) is mandatory and
must be written and given at least one month before the intended date of retrenchment. In this case,
it is undisputed that the petitioners were given notice of the temporary lay-off. they were already on
temporary lay-off at the time notice should have been given to them is not an excuse to forego the
one-month written notice because by this time, their lay-off is to become permanent and they were
definitely losing their employment. INDUSTRIAL TIMBER CORPORATION VS ABABON Where the
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 as the dismissal process
was initiated by the employer s exercise of his management prerogative, as opposed to a
dismissal based on a just cause under Article 282 with the same procedural infirmity where the
sanction to be imposed upon the employer should be tempered as the dismissal process was, in
effect, initiated by an act imputable to the employee. AGABON VS NLRC Where there is just cause
for dismissal but due process has not been properly observed by an employer, it would not be right
to order either the reinstatement of the dismissed employee or the payment of backwages to him. In
failing, however, to comply with the procedure prescribed by law in terminating the services of the
employee, the employer must be deemed to have opted or, in any case, should be made liable, for
the payment of separation pay. PHILIPPINE ROBACCO FLUE-CURING AND REDRYING
CORPORATION VS NLRC The amount of separation pay is based on two factors: the amount of
monthly salary and the number of years of service. Although the Labor Code provides different
definitions as to what constitutes one year of service, Book Six does not specifically define
one year of service for purposes of computing separation pay. However, Articles 283
and 284 both state in connection with separation pay that a fraction of at least six months shall be
considered one whole year. COCA COLA BOTTLERS VS NLRC the company is required to notify
both the employees concerned and the Department of Labor and Employment ("DOLE") at least one
(1) month before the intended date of closure. The notice to the DOLE is, of course, intended to
enable the proper authorities to determine after hearing whether such closure is being done in good
faith, i.e., for bonafide business reasons, or whether, to the contrary, the closure is being resorted to
as a means of evading compliance with the just obligations of the employer to the employees
affected. JAT GENERAL SERVICES VS NLRC A careful examination of Article 283 of the Labor
Code shows that closure or cessation of business operation as a valid and authorized ground of
terminating employment is not limited to those resulting from business losses or reverses. Said
provision in fact provides for the payment of separation pay to employees terminated because of
closure of business not due to losses, thus implying that termination of employees other than closure
of business due to losses may be valid. CAFFCO INTERNATIONAL LIMITED VS OFFICE OF THE
MINISTER-MINISTRY OF LABOR AND EMPLOYMENT There are three (3) requirements are
necessary for a valid cessation of business operations, namely: (a) service of a written notice to the
employees and to the MOLE at least one (1) 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 at least one-half (1/2) month pay for every year of service, or one (1)
month pay, whichever is higher. CEBU ROYAL PLANT VS DEPUTY MINISTER OF LABOR Where
the employee suffers from a disease and his continued employment is prohibited by law or
prejudicial to his health or to the health of his co-employees, the employer shall not terminate his
employment 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. If the disease or ailment can be cured within the period, the employer
shall not terminate the employee but shall ask the employee to take a leave. The employer shall
reinstate such employee to his former position immediately upon the restoration of his normal health.
ALABANG COUNTRY CLUB VS NLRC 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.While the Labor Code
provides for the payment of separation package in case of retrenchment to prevent losses, it does
not obligate the employer for the payment thereof if there is closure of business due to serious
losses. MERIN VS NLRC Fitness for continued employment cannot be compartmentalized into tight
little cubicles of aspects of character, conduct and ability separate and independent of each other.
While it may be true that petitioner was penalized for his previous infractions, this does not and
should not mean that his employment record would be wiped clean of his infractions. After all, the
record of an employee is a relevant consideration in determining the penalty that should be meted
out since an employee s past misconduct and present behavior must be taken together in
determining the proper imposable penalty Despite the sanctions imposed upon petitioner, he
continued to commit misconduct and exhibit undesirable behavior on board. Indeed, the
employer cannot be compelled to retain a misbehaving employee, or one who is guilty of acts
inimical to its interests. It has the right to dismiss such an employee if only as a measure of self-
protection. FILIPRO INC VS THE HON. MINISTER BLAS OPLE While it is not generally possible for
an employee to anticipate when he will be ill or have to attend to some family problem or emergency,
and be able to give prior notice to his employer, he should give such notice when he will be absent
for some other cause, such as when he will attend to some other business elsewhere, for such
engagements can be properly scheduled by him so as not to interfere with his regular working hours
and disrupt the operations of the company in his particular area of assignment. Without prior notice
of the employee's absence, the company is not afforded enough time to get a temporary
replacement for him. MERCURY DRUG CO. INC VS CIR Even under the Termination Pay Law, the
alleged quarrel between private respondent Dayao and one Ranin, the president of the labor union,
in the presence of herein petitioner Mariano Que as manager of petitioner corporation, is not one of
the grounds justifying the dismissal of private respondent Dayao. It is not even analogous to "serious
misconduct or willful disobedience of the orders of his employer or its representative in connection
with his work." FERRER VS NLRC 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. PINES CITY EDUCATIONAL CENTER
VS NLRC The amendment to Art. 279 of the Labor Code introduced by Rep. Act. No. 6715 inserted
the qualification "full" to the word "backwages". The intent of the law seems to be clear. The plain
words of the statute provide that an employee who is unjustly dismissed is entitled to FULL
backwages from the time of his dismissal to actual reinstatement. The law provides no qualification
nor does it state that income earned by the employee during the period between his unjust dismissal
and reinstatement should be deducted from such backwages. When the law does not provide, the
court should not improvise.chanroblesvirtualawlibrarychanrobles virtual law library BUSTAMANTE
VS NLRC In accordance with the above provision, 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. It is true that this Court had
ruled in the case of Pines City Educational Center vs. NLRC (G.R. No. 96779, 10 November 1993,
227 SCRA 655) that "in ascertaining the total amount of backwages payable to them (employees),
we go back to the rule prior to the Mercury Drug rule that the total amount derived from employment
elsewhere by the employee from the date of dismissal up to the date of reinstatement, if any, should
be deducted therefrom."The rationale for such ruling was that, the eraning derived elsewhere by the
dismissed employee while litigating the legality of his dismissal, should be deducted from the full
amount of backwages which the law grants him upon reinstatement, so as not to unduly or unjustly
enrich the employee at the expense of the employer. PARAMOUNT VINYL PRODUCTS
CORPORATION VS NLRC Well-settled is the rule that the perfection of an appeal within the
statutory or reglementary period is not only mandatory, but also jurisdictional. Failure to interpose a
timely appeal (or a motion for reconsideration) renders the assailed decision, order or award final
and executory that deprives the appellate body of any jurisdiction to alter the final judgment.
Equitable Banking Corporation (now known as Equitable-PCI Bank) V. Ricardo Sadac G.R No.
164772, June 8,2006: when a final judgment becomes executory, it thereby becomes immutable and
unalterable. The judgment may no longer be modified in any respect, even if the modification is
meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of
whether the modification is attempted to be made by the Court rendering it or by the highest Court of
the land. The only recognized exceptions are the correction of clerical errors or the making of so-
called nunc pro tunc entries which cause no prejudice to any party, and, of course, where the
judgment is void. General Baptist Bible College v. National Labor Relations Commission "The term
"backwages without qualification and deduction" means that the workers are to be paid their
backwages fixed as of the time of the dismissal or strike without deduction for their earnings
elsewhere during their layoff and without qualification of their wages as thus fixed; i.e., unqualified by
any wage increases or other benefits that may have been received by their co-workers who are not
dismissed or did not go on strike. Awards including salary differentials are not allowed. The salary
base properly used should, however, include not only the basic salary but also the emergency cost
of living allowances and also transportation allowances if the workers are entitled thereto. Paguio v.
Philippine Long Distance Telephone Co., Inc. The Court has held that in determining entitlement to
moral damages, it suffices to prove that the claimant has suffered anxiety, sleepless nights,
besmirched reputation and social humiliation by reason of the act complained of. Exemplary
damages, on the other hand, are granted in addition to moral damages by way of example or
correction for the public good. Furthermore, as petitioner was compelled to litigate and incur
expenses to enforce and protect his rights, he is entitled to an award of attorney s fees. The
amount of damages recoverable is, in turn, determined by the business, social and financial position
of the offended parties and the business and financial position of the offender. Reyes vs. NLRC,
G.R. No. 180551, February 10,2009 Article 279 of the Labor Code provides that an illegally
dismissed employee shall be entitled, inter alia, to the payment of his full backwages, inclusive of
allowances and to his other benefits or their monetary equivalent computed from the time that his
compensation was withheld from him, i.e., from the time of his illegal dismissal, up to the time of his
actual reinstatement. Thus, where reinstatement is adjudged, the award of backwages and other
benefits continues beyond the date of the Labor Arbiter s Decision ordering reinstatement and
extends up to the time said order of reinstatement is actually carried out PIONEER TEXTURIZING
CORP. and/or JULIANO LIM, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION,
PIONEER TEXTURIZING WORKERS UNION and LOURDES A. DE JESUS, respondents. In case
the decision includes an order of reinstatement, the Labor Arbiter shall direct the employer to
immediately reinstate the dismissed or separated employee even pending appeal. The order of
reinstatement shall indicate that 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. In declaring that reinstatement order is not self-executory and
needs a writ of execution, the Court, in Maranaw, adverted to the rule provided under Article
224. We said: It must be stressed, however, that although the reinstatement aspect of the
decision is immediately executory, it does not follow that it is self-executory. There must be a writ
of execution which may be issued motu proprio or on motion of an interested party. Article 224 of
the Labor Code provides: ART. 224. Execution of decisions, orders or awards. (a) The
Secretary of Labor and Employment or any Regional Director, the Commission or any Labor Arbiter,
or med-arbiter or voluntary arbitrator may, motu propio or on motion of any interested party, issue a
writ of execution on a judgment within five (5) years from the date it becomes final and executory
Pfizer Inc. vs. Velasco Reinstatement, as a labor law concept, means the admission of an
employee back to work prevailing prior to his dismissal; restoration to a state or position from which
one had been removed or separated, which presupposes that there shall be no demotion in rank
and/or diminution of salary, benefits and other privileges; if the position previously occupied no
longer exists, the restoration shall be to a substantially equivalent position in terms of salary, benefits
and other privileges.19 Management s prerogative to transfer an employee from one office or
station to another within the business establishment, however, generally remains unaffected by a
reinstatement order, as long as there is no resulting demotion or diminution of salary and other
benefits and/or the action is not motivated by consideration less than fair or effected as a
punishment or to get back at the reinstated employee. Genuino v. National Labor Relations
Commission It is established in jurisprudence that reinstatement means restoration to a state or
condition from which one had been removed or separated. The person reinstated assumes the
position he had occupied prior to his dismissal. 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.
GARCIA VS PAL Worth stressing, upon appointment by the SEC of a rehabilitation receiver, all
actions for claims against the corporation pending before any court, tribunal or board shall ipso jure
be suspended. the actions that are suspended cover all claims against the corporation whether for
damages founded on a breach of contract of carriage, labor cases, collection suits or any other
claims of a pecuniary nature.19 No exception in favor of labor claims is mentioned in the law.
KIMBERLY CLARK PHILS VS FACUNDO Labor disputes naturally involve strained relations
between labor and management, and that in most strikes, the relations between the strikers and the
non-strikers will similarly be tense. Bitter labor disputes always leave an aftermath of strong
emotions and unpleasant situations.[18]cralaw Thus, the doctrine of strained relations should be
strictly applied[19]cralaw and must be demonstrated as a fact.[20]cralaw This, petitioner failed to do.
Nevertheless, in case of strained relations or the nonavailability of positions, the employer is given
the option to reinstate the employee merely in the payroll precisely to avoid the intolerable presence
in the workplace by the unwanted employee. Philippine Tobacco Flue-Curing & Redrying
Corporation VS NLRC Loss of confidence as a just cause for termination of employment is premised
from the fact that an employee concerned holds a position of trust and confidence. However, in order
to constitute a just cause for dismissal, the act complained of must be work-related such as would
show the employee concerned to be unfit to continue working for the employer. Abaria v. NLRC,
G.R. No. 154113 As a general rule, back wages are granted to indemnify a dismissed employee for
his loss of earnings during the whole period that he is out of his job. Considering that an illegally
dismissed employee is not deemed to have left his employment, he is entitled to all the rights and
privileges that accrue to him from the employment.37 The grant of back wages to him is in
furtherance and effectuation of the public objectives of the Labor Code, and is in the nature of a
command to the employer to make a public reparation for his illegal dismissal of the employee in
violation of the Labor Code. San Miguel Corporation v. Lao 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 offense. the Court, categorizing
the two causes for the dismissal of an employee - just causes under Article 282 of the
Labor Code and authorized causes under Article 283 and 284 of the same code -reiterated
that an employee whose employment was terminated for a just cause would not be so entitled as a
matter of right to the payment of separation benefits. PLDT VS NLRC 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.
Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving
moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be
required to give the dismissed employee separation pay, or financial assistance, or whatever name it
is called, on the ground of social justice. DUP SOUND PHILS VS CA This Court has ruled in many
instances that reinstatement is no longer viable where, among others, the relations between the
employer and the employee have been so severely strained, that it is not in the best interest of the
parties, nor is it advisable or practical to order reinstatement, or where the employee decides not to
be reinstated.30 In the instant case, the resulting circumstances show that reinstatement would be
impractical and would hardly promote the best interest of the parties. Resentment and enmity
between petitioners and private respondent necessarily strained the relationship between them or
even provoked antipathy and antagonism as shown by the acts of the parties subsequent to the
order of reinstatement. Besides, private respondent expressly prayed for an award of separation pay
in lieu of reinstatement from the very start of the proceedings before the Labor Arbiter. By so doing,
he forecloses reinstatement as a relief by implication. Golden Ace Builders v. Talde The basis for the
payment of backwages is different from that for the award of separation pay. Separation pay is
granted where reinstatement is no longer advisable because of strained relations between the
employee and the employer. Backwages represent compensation that should have been earned
but were not collected because of the unjust dismissal. The basis for computing backwages is
usually the length of the employee s service while that for separation pay is the actual period
when the employee was unlawfully prevented from working. Fernandez v. Newfield Staff Solutions,
Inc. Bad faith does not connote bad judgment or negligence; It Imports dishonest purpose or some
moral obliquity and conscious doing of wrong; it means breach of a known duty through some motive
or interest or ill will; it partakes of the nature of fraud. 41 To sustain such a finding, there should be
evidence on record that an officer or director acted maliciously or in bad faith in terminating the
employee. Coca-Cola Bottlers Phils., Inc. v. Daniel Under the doctrine of strained relations, the
payment of separation pay has been considered an acceptable alternative to reinstatement when the
latter option is no longer desirable or viable. On the one hand, such payment liberates the
employee from what could be a highly oppressive work environment. On the other, the payment
releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it
could no longer trust. Nevertheless, the principle of strained relations should not be used so
indiscriminately as to bar the reinstatement of illegally dismissed workers, especially when they
themselves have not indicated any aversion to returning to work, as in this case. It is only normal
to expect a certain degree of antipathy and hostility to arise from a litigation between parties, but not
in every instance does such an atmosphere of antagonism exist as to adversely affect the efficiency
and productivity of the employee concerned. GLOBE-MACKAY CABLE AND RADIO
CORPORATION, VS NLRC An employee who not be dismissed on mere presumptions and
suppositions. Petitioner's allegation that since Salazar and Saldivar lived together in the same
apartment, it "presumed reasonably that complainant's sympathy would be with Saldivar" and its
averment that Saldivar's investigation although unverified, was probably true, do not pass this
Court's test. 36 While we should not condone the acts of disloyalty of an employee, neither should
we dismiss him on the basis of suspicion derived from speculative inferences. Abalos v. Philex
Mining Corporation A basic tenet in our rules of procedure is that an award that is final and
executory cannot be amended or modified anymore. One exception is that where facts and/or
events transpire after a decision has become executory, which facts and/or events present a
supervening cause or reason which renders the final and executory decision no longer enforceable.
Under the law, the court may modify or alter a judgment even after the same has become executory
whenever circumstances transpire rendering its execution unjust and inequitable, as where certain
facts and circumstances justifying or requiring such modification or alteration transpired after the
judgment has become final and executory. Procter and Gamble Philippines v. Bondesto, While the
Court recognizes the rights of an employer to terminate the services of an employee for a just or
authorized cause, the dismissal of an employee must be made within the parameters of law and
pursuant to the tenets of equity and fair play. Truly, the employer s power to discipline its
workers may not be exercised in such an arbitrary manner as to erode the constitutional guarantee
of security of tenure. The Constitution mandates the protection of labor. This command the Court
has to heed and cannot disregard. ASIAWORLD PUBLISHING VS OPLE It should be underscored
that the backwages are being awarded on the basis of equity or in the nature of a severance pay.
This means that a monetary award is to be paid to the striking employees as an alternative to
reinstatement which can no longer be effected in view of the long passage of time or because of the
realities of the situation. Citytrust Finance Corp. v. NLRC Loss of confidence is a valid ground
for dismissing an employee and proof beyond reasonable doubt of the employee's misconduct is not
required to dismiss him on this charge. It is sufficient if there is some basis for such loss of
confidence or if the employer has reasonable ground to believe or to entertain the moral conviction
that the employee concerned is responsible for the misconduct and that the nature of his
participation therein rendered him absolutely unworthy of the trust and confidence demanded by his
position. Bautista v. Inciong In the case at bar, the Regional director correctly found that the
petitioner was an employee of the respondent union as reflected in the latter's individual payroll
sheets and shown by the petitioner's membership with the Social Security System (SSS) and the
respondent union's share of remittances in the petitioner's favor. Even more significant, is the
respondent union's act of filing a clearance application with the MOL to terminate the petitioner's
services. Bautista was selected and hired by the Union. He was paid wages by the Union. ALU had
the power to dismiss him as indeed it dismissed him. And definitely, the Union tightly controlled the
work of Bautista as one of its organizers Esmalin v. NLRC However, in this case, there is no doubt
that the relationship of employer to employee is so strained and ruptured as to preclude a
harmonious working relationship should reinstatement of private respondent be decreed. Instead,
private respondent should be afforded the right to separation pay so that he can be spared the
agony of having to work anew with petitioner under an atmosphere of antipathy and antagonism and
the petitioner does not have to endure the continued services of private respondent in whom it has
lost confidence. Maglutac v. NLRC It cannot now be expected that the harmonious and pleasant
working relationship between the parties in this case prior to the bringing of the derivative suit with
the Securities and Exchange Commission and the filing of complaint for illegal dismissal with the
labor Arbiter, can be revived. The relationship had been so strained ' that to order the reinstatement
of the complainant would not be wise. Where the relationship of employer to employee is so strained
and ruptured as to preclude a harmonious working relationship should reinstatement of the
employee be decreed, the latter should be afforded the right to separation pay where the employer
does not have to endure the continued services of the employee in whom it has lost confidence.
Dusit Hotel Nikko v. Gatbonton In the absence of any evaluation or valid extension, we cannot
conclude that respondent failed to meet the standards of performance set by the hotel for a chief
steward. At the expiration of the three-month period, Gatbonton had become a regular employee. It
is an elementary rule in the law on labor relations that a probationary employee engaged to work
beyond the probationary period of six months, as provided under Article 281 of the Labor Code, or
for any length of time set forth by the employer (in this case, three months), shall be considered a
regular employee.16 This is clear in the last sentence of Article 281. Any circumvention of this
provision would put to naught the State s avowed protection for labor. Morales v. Harbour Centre
Port Terminal, Inc Admittedly, the right of employees to security of tenure does not give them vested
rights to their positions to the extent of depriving management of its prerogative to change their
assignments or to transfer them.42 By management prerogative is meant the right of an employer to
regulate all aspects of employment, such as the freedom to prescribe work assignments, working
methods, processes to be followed, regulation regarding transfer of employees, supervision of their
work, lay-off and discipline, and dismissal and recall of workers.43 Although jurisprudence
recognizes said management prerogative, it has been ruled that the exercise thereof, while ordinarily
not interfered with,44 is not absolute and is subject to limitations imposed by law, collective
bargaining agreement, and general principles of fair play and justice.45 Thus, an employer may
transfer or assign employees from one office or area of operation to another, provided there is no
demotion in rank or diminution of salary, benefits, and other privileges, and the action is not
motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion
without sufficient cause.46 Indeed, having the right should not be confused with the manner in which
that right is exercised. Globe Telecom, Inc. v. Florendo-Flores The test of constructive dismissal is
whether a reasonable person in the employee s position would have felt compelled to give up his
position under the circumstances. Given the undisputed facts outlined above, respondent was
provided with no other alternative than to stop reporting for work through no fault of her own due to
the malicious acts of her immediate supervisor. Uniwide Sales Warehouse Club v. NLRC The test of
constructive dismissal is whether a reasonable person in the employee's position would have felt
compelled to give up his position under the circumstances.45 It is an act amounting to dismissal but
made to appear as if it were not. In fact, the employee who is constructively dismissed may be
allowed to keep on coming to work. Constructive dismissal is therefore a 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. Masagana Concrete Products vs. NLRC an
award of separation pay in lieu of reinstatement does not bar an award of backwages, computed
from the time of illegal dismissal, Separation pay, equivalent to one month s salary for every
year of service, is awarded as an alternative to reinstatement when the latter is no longer an
option. Separation pay is computed from the commencement of employment up to the time of
termination, including the imputed service for which the employee is entitled to backwages, with the
salary rate prevailing at the end of the period of putative service being the basis for computation.
Sarona vs. NLRC Separation pay, equivalent to one month's salary for every year of service, is
awarded as an alternative to reinstatement when the latter is no longer an option. Separation pay is
computed from the commencement of employment up to the time of termination, including the
imputed service for which the employee is entitled to backwages, with the salary rate prevailing at
the end of the period of putative service being the basis for computation.It is well-settled, even
axiomatic, that if reinstatement is not possible, the period covered in the computation of backwages
is from the time the employee was unlawfully terminated until the finality of the decision finding illegal
dismissal. Hyatt Taxi Services, Inc. v. Catinoy constructive dismissal does not always involve
forthright dismissal or diminution in rank, compensation, benefit and privileges.[14] There may be
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 could foreclose any choice by him except
to forego his continued employment. Westmont Pharmaceuticals, Inc. v. Samaniego 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 employee s transfer shall be tantamount to unlawful constructive dismissal.
SENTINEL SECURITY AGENCY VS NLRC Under these cited provisions of the Labor Code, should
the contractor fail to pay the wages of its employees in accordance with law, the indirect employer
(the petitioner in this case), is jointly and severally liable with the contractor, but such responsibility
should be understood to be limited to the extent of the work performed under the contract, in the
same manner and extent that he is liable to the employees directly employed by him. This liability
of petitioner covers the payment of the workers performance of any work, task, job or
project. So long as the work, task, job or project has been performed for petitioner s benefit or
on its behalf, the liability accrues for such period even if, later on, the employees are eventually
transferred or reassigned elsewhere. Premiere Development Bank v. NLRC Petitioner's allegation
that private respondent is guilty of laches is likewise devoid of merit. Laches is the failure for an
unreasonable and unexplained length of time to do that which in exercising due diligence, could or
should have been done earlier. It is negligence or omission to assert a right within a reasonable
time, warranting the presumption that the party entitled to assert it either has abandoned or has
declined to assert it.[28] The question of laches is addressed to the sound discretion of the court,
and since it is an equitable remedy, its application is controlled by equitable considerations. It
cannot work to defeat justice or to perpetrate fraud and injustice.[29] A party cannot be held guilty of
laches when he has not incurred undue delay in the assertion of his rights. Sime Darby Pilipinas,
Inc. v. Arguilla In exceptional cases, the Court has given effect to quitclaim executed by
employees if the employer is able to prove the following requisites: (1) the employee executes a
deed of quitclaim voluntarily; (2) there is no fraud or deceit on the part of any of the parties; (3) the
consideration of the quitclaim is credible and reasonable; and (4) the contract is not contrary to law,
public order, public policy, morals or good customs or prejudicial to a third person with a right
recognized by law. Aujero v. Philippine Communications Satellite Corporation While the law looks
with disfavor upon releases and quitclaims by employees who are inveigled or pressured into signing
them by unscrupulous employers seeking to evade their legal responsibilities, a legitimate waiver
representing a voluntary settlement of a laborer's claims should be respected by the courts as the
law between the parties.29 Considering the petitioner's claim of fraud and bad faith against
Philcomsat to be unsubstantiated, this Court finds the quitclaim in dispute to be legitimate waiver.
While the petitioner bewailed as having been coerced or pressured into signing the release and
waiver, his failure to present evidence renders his allegation self-serving and inutile to invalidate the
same. That no portion of his retirement pay will be released to him or his urgent need for funds does
not constitute the pressure or coercion contemplated by law. That the petitioner was all set to return
to his hometown and was in dire need of money would likewise not qualify as undue pressure
sufficient to invalidate the quitclaim. "Dire necessity" may be an acceptable ground to annul
quitclaims if the consideration is unconscionably low and the employee was tricked into accepting it,
but is not an acceptable ground for annulling the release when it is not shown that the employee has
been forced to execute it.30 While it is our duty to prevent the exploitation of employees, it also
behooves us to protect the sanctity of contracts that do not contravene our laws. Nasipit Lumber
Company vs. National Organization of Working Men Closure or suspension of operations for
economic reasons is, therefore, recognized as a valid exercise of management prerogative. The
determination to cease or suspend operations is a prerogative of management, which the State does
not usually interfere with as no business or undertaking is required to continue operating at a loss
simply because it has to maintain its workers in employment. Such an act would be tantamount to a
taking of property without due process of law. Capitol Wireless, Inc. v. Honorable Secretary Ma.
Nieves R. Confessor With respect to the additional six (6) days for compulsory retirement and three
(3) days for optional retirement, these may appear in excess of the requirements of the law and the
demand of respondent Union. Yet, it should be noted that the law merely establishes the minimum
retirement benefits as it recognizes that an employee may receive more under existing laws and any
CBA or other agreements. Besides, respondent Secretary of Labor had to break the bargaining
deadlock. After taking into account all the circumstances, public respondent found it expedient to
strike a reasonable middle ground between the parties respective positions. Unless there are
cogent reasons, and we do not find any, this Court will not alter, modify or reverse the factual
findings of the Secretary of Labor because, by reason of her official position, she is considered to
have acquired expertise as her jurisdiction is confined to specific matters. BANCO FILIPINO
SAVINGS An implied trust could not have been formed between the Bank and Tala as this Court has
held that where the purchase is made in violation of an existing statute and in evasion of its
express provision, no trust can result in favor of the party who is guilty of the fraud. Masing and Sons
Development Corporation v. Rogelio 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 ten (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. CASES ON EMPLOYER-EMPLOYEE
RELATIONSHIP AFP MUTUAL BENEFITS VS NLRC Time and again, the Court has applied the
"four-fold" test in determining the existence of employer-employee relationship. This test considers
the following elements: (1) the power to hire; (2) the payment of wages; (3) the power to dismiss;
and (4) the power to control, the last being the most important element. SONZA VS ABS-CBN\
Applying the control test to the present case, we find that SONZA is not an employee but an
independent contractor. The control test is the most important test our courts apply in
distinguishing an employee from an independent contractor.[29] This test is based on the extent of
control the hirer exercises over a worker. The greater the supervision and control the hirer
exercises, the more likely the worker is deemed an employee. The converse holds true as well
the less control the hirer exercises, the more likely the worker is considered an independent
contractor. Orozco vs. CA This Court has constantly adhered to the "four-fold test" to determine
whether there exists an employer-employee relationship between parties.24 The four elements of an
employment relationship are: (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employer s power to control the employee s
conduct.25 Of these four elements, it is the power of control which is the most crucial26 and most
determinative factor,27 so important, in fact, that the other elements may even be disregarded.28 As
this Court has previously held: the significant factor in determining the relationship of the parties is
the presence or absence of supervisory authority to control the method and the details of
performance of the service being rendered, and the degree to which the principal may intervene to
exercise such control.29 In other words, the test is whether the employer controls or has reserved
the right to control the employee, not only as to the work done, but also as to the means and
methods by which the same is accomplished Insular Life Assurance Co. Ltd. vs. NLRC Logically, the
line should be drawn between rules that merely serve as guidelines towards the achievement of the
mutually desired result without dictating the means or methods to be employed in attaining it, and
those that control or fix the methodology and bind or restrict the party hired to the use of such
means. The first, which aim only to promote the result, create no employer-employee relationship
unlike the second, which address both the result and the means used to achieve it. The distinction
acquires particular relevance in the case of an enterprise affected with public interest, as is the
business of insurance, and is on that account subject to regulation by the State with respect, not only
to the relations between insurer and insured but also to the internal affairs of the insurance
company. Sevilla vs. CA In this jurisdiction, there has been no uniform test to determine the
evidence of an employer-employee relation. In general, we have relied on the so-called right of
control test, "where the person for whom the services are performed reserves a right to control not
only the end to be achieved but also the means to be used in reaching such end." 10 Subsequently,
however, we have considered, in addition to the standard of right-of control, the existing economic
conditions prevailing between the parties, like the inclusion of the employee in the payrolls, in
determining the existence of an employer-employee relationship. Francisco vs. NLRC The better
approach would therefore be to adopt a two-tiered test involving: (1) the putative employer s
power to control the employee with respect to the means and methods by which the work is to be
accomplished; and (2) the underlying economic realities of the activity or relationship. This two-tiered
test would provide us with a framework of analysis, which would take into consideration the totality of
circumstances surrounding the true nature of the relationship between the parties. This is especially
appropriate in this case where there is no written agreement or terms of reference to base the
relationship on; and due to the complexity of the relationship based on the various positions and
responsibilities given to the worker over the period of the latter s employment. CASES ON
KINDS OF EMPLOYEES Universal Robina Sugar Milling Corporation vs. Acibo, G.R. No. G.R. No.
186439, January 15,2014 regular, project/seasonal and casual. Regular employment refers to that
arrangement whereby the employee "has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer[.]"19 Under the definition, the
primary standard that determines regular employment is the reasonable connection between the
particular activity performed by the employee and the usual business or trade of the employer;20 the
emphasis is on the necessity or desirability of the employee s activity. Thus, when the employee
performs activities considered necessary and desirable to the overall business scheme of the
employer, the law regards the employee as regular. By way of an exception, paragraph 2, Article
280 of the Labor Code also considers regular a casual employment arrangement when the casual
employee s engagement has lasted for at least one year, regardless of the engagement s
continuity. The controlling test in this arrangement is the length of time during which the employee is
engaged. A project employment, on the other hand, contemplates on arrangement whereby "the
employment has been fixed for a specific project or undertaking whose completion or termination
has been determined at the time of the engagement of the employee[.]"21 Two requirements,
therefore, clearly need to be satisfied to remove the engagement from the presumption of regularity
of employment, namely: (1) designation of a specific project or undertaking for which the employee
is hired; and (2) clear determination of the completion or termination of the project at the time of the
employee s engagement.22 The services of the project employees are legally and automatically
terminated upon the end or completion of the project as the employee s services are
coterminous with the project. Unlike in a regular employment under Article 280 of the Labor Code,
however, the length of time of the asserted "project" employee s engagement is not controlling
as the employment may, in fact, last for more than a year, depending on the needs or circumstances
of the project. Nevertheless, this length of time (or the continuous rehiring of the employee even
after the cessation of the project) may serve as a badge of regular employment when the activities
performed by the purported "project" employee are necessary and indispensable to the usual
business or trade of the employer.23 In this latter case, the law will regard the arrangement as
regular employment.24 Seasonal employment operates much in the same way as project
employment, albeit it involves work or service that is seasonal in nature or lasting for the duration of
the season.25 As with project employment, although the seasonal employment arrangement
involves work that is seasonal or periodic in nature, the employment itself is not automatically
considered seasonal so as to prevent the employee from attaining regular status. To exclude the
asserted "seasonal" employee from those classified as regular employees, the employer must show
that: (1) the employee must be performing work or services that are seasonal in nature; and (2) he
had been employed for the duration of the season.26 Hence, when the "seasonal" workers are
continuously and repeatedly hired to perform the same tasks or activities for several seasons or
even after the cessation of the season, this length of time may likewise serve as badge of regular
employment.27 In fact, even though denominated as "seasonal workers," if these workers are called
to work from time to time and are only temporarily laid off during the off-season, the law does not
consider them separated from the service during the off-season period. The law simply considers
these seasonal workers on leave until re-employed.28 Casual employment, the third kind of
employment arrangement, refers to any other employment arrangement that does not fall under any
of the first two categories, i.e., regular or project/seasonal. Interestingly, the Labor Code does not
mention another employment arrangement contractual or fixed term employment (or
employment for a term) which, if not for the fixed term, should fall under the category of regular
employment in view of the nature of the employee s engagement, which is to perform an activity
usually necessary or desirable in the employer s business. Mariwasa Manufacturing Inc. vs.
Hon. Leogardo Jr. G.R. No. 74246 Jan. 26,1989 By voluntarily agreeing to an extension of the
probationary period, Dequila in effect waived any benefit attaching to the completion of said period if
he still failed to make the grade during the period of extension. The Court finds nothing in the law
which by any fair interpretation prohibits such a waiver. And no public policy protecting the employee
and the security of his tenure is served by prescribing voluntary agreements which, by reasonably
extending the period of probation, actually improve and further a probationary employee's prospects
of demonstrating his fitness for regular employment CALS POULTERY VS. ROCO G.R. No. 150660
July 30,2002 However, the Court of Appeals set aside the NLRC ruling on the ground that at the
time Candelaria s services were terminated, she had attained the status of a regular employee
as the termination on November 15, 1995 was effected four (4) days after the 6-month probationary
period had expired, hence, she is entitled to security of tenure in accordance with Article 281 of the
Labor Code. CALS argues that the Court of Appeals computation of the 6-month probationary
period is erroneous as the termination of Candelaria s services on November 15, 1995 was
exactly on the last day of the 6-month period. We agree with CALS contention as upheld by
both the Labor Arbiter and the NLRC that Candelaria s services was terminated within and not
beyond the 6-month probationary period. In Cebu Royal v. Deputy Minister of Labor,[13] our
computation of the 6-month probationary period is reckoned from the date of appointment up to the
same calendar date of the 6th month following Alcira vs. NLRC G.R. No. 149859 June 9,2004 It is
settled that even if probationary employees do not enjoy permanent status, they are accorded the
constitutional protection of security of tenure. This means they may only be terminated for just
cause or when they otherwise fail to qualify as regular employees in accordance with reasonable
standards made known to them by the employer at the time of their engagement.[14] But we have
also ruled in Manlimos, et. al. vs. National Labor Relations Commission[15] that this constitutional
protection ends on the expiration of the probationary period. On that date, the parties are free to
either renew or terminate their contract of employment. Manlimos concluded that (t)his
development has rendered moot the question of whether there was a just cause for the dismissal of
the petitioners xxx. [16] In the case at bar, respondent Middleby exercised its option not to renew
the contract when it informed petitioner on the last day of his probationary employment that it did not
intend to grant him a regular status. Although we can regard petitioner s severance from work as
dismissal, the same cannot be deemed illegal. As found by the labor arbiter, the NLRC and the
Court of Appeals, petitioner (1) incurred ten absences (2) was tardy several times (3) failed to wear
the proper uniform many times and (4) showed inferior supervisory skills. Petitioner failed to
satisfactorily refute these substantiated allegations. Taking all this in its entirety, respondent
Middleby was clearly justified to end its employment relationship with petitioner. Mitsubishi Motors
vs. Chrysler G.R. No. 148738 June 29,2004 Indeed, an employer, in the exercise of its management
prerogative, may hire an employee on a probationary basis in order to determine his fitness to
perform work.[29] Under Article 281 of the Labor Code, the employer must inform the employee of
the standards for which his employment may be considered for regularization. Such probationary
period, unless covered by an apprenticeship agreement, shall not exceed six (6) months from the
date the employee started working. The employee s services may be terminated for just cause
or for his failure to qualify as a regular employee based on reasonable standards made known to
him Brent School Inc. vs. Zamora 48494 Feb. 5,1990 The concept of the employee's duties as being
"usually necessary or desirable in the usual business or trade of the employer" is not synonymous
with or identical to employment with a fixed term. Logically, the decisive determinant in term
employment should not be the activities that the employee is called upon to perform, but the day
certain agreed upon by the parties for the commencement and termination of their employment
relationship, a day certain being understood to be "that which must necessarily come, although it
may not be known when." 19 Cielo vs. NLRC G.R. No. 78693 Jan. 28,1991 Even if it be assumed
that the six-month period had not yet been completed, it is settled that the probationary employee
cannot be removed except also for cause as provided by law. It is not alleged that the petitioner was
separated for poor performance; in fact, it is suggested by the private respondent that he was
dismissed for disrespect and insubordination, more specifically his refusal to sign the affidavit as
required by company policy PDI vs. Magtibay G.R. No. 164532 July 24, 2007 for the valid
termination of probationary employment which is for just cause, the second ground does not require
notice and hearing. Due process of law for this second ground consists of making the reasonable
standards expected of the employee during his probationary period known to him at the time of his
probationary employment. By the very nature of a probationary employment, the employee knows
from the very start that he will be under close observation and his performance of his assigned
duties and functions would be under continuous scrutiny by his superiors. Mercado Sr. vs. NLRC
G.R. No. 79869 September 5, 1991 35. Industrial-Commercial-Agricultural Workers
Organization (ICAWO) v. CIR 16 SCRA 562, March 31, 1966. The seasonal stoppage of work does
not, therefore, negate the reasonable expectation of the laborers to be subsequently allowed to
resume work unless there be other justifiable reasons for acting otherwise. 36. Visayan Stevedore
Transportation Company v. CIR. 19 SCRA 426, February 25, 1967 1. LABOR LAW; EMPLOYER-
EMPLOYEE RELATIONSHIP; CASE AT BAR. In the performance of their duties, complainants
worked under the direction and control of the officers of the company, whose paymaster or
disbursing officer paid the corresponding compensation directly to said complainants, who in turn
acknowledged receipt in payrolls of the company. RELATIONSHIP CONTINUES EVEN AT
CONCLUSION OF MILLING SEASON. As regards the alleged termination of employer-
employee relationship between the company and the complainants at the conclusion of each milling
season, it is settled that the workers concerned are considered, not separated from the service, but
merely on leave of absence, without pay, during the off-season, their employer-employee
relationship being merely deemed suspended, not severed in the meanwhile UNFAIR LABOR
PRACTICE; CASE AT BAR. Where, as in the case at bar, the workers not admitted to work
beginning from Nov. 1955, were precisely those belonging to the union, and the company branch
manager had told them point blank that severance of their connection with the union was the remedy
if they wanted to continue working with the company, there was unfair labor practice. BACK
WAGES; PAYMENT OF BACK WAGES ON REINSTATEMENT DISCRETIONARY WITH COURT
OF INDUSTRIAL RELATIONS. The law explicitly vests in the Court of Industrial Relations
discretion to order the reinstatement with backpay of laborers dismissed due to union activities 37.
Bacolod-Murcia Milling Co, Inc. v. NLRC, 204 SCRA 155, 158, November 21, 1991 seasonal laborer
cannot enjoy the same retirement privileges as the regular worker. The seasonal laborer works only
for a fraction of year. And more often than not, he is allowed by his employer to seek employment
elsewhere during off-season or temporary lay-off for economic necessity. 38. Gaco v. NLRC .
230 SCRA 260, Febuary 23, 1994 we shall not follow Article 279 of the Labor Code to the letter
regarding the period of backwages in view of the peculiar circumstances of the present case,
namely, "there is now a strained relationship between (petitioner) and (private respondent) and
(petitioner) prays for payment of separation pay in lieu of reinstatement." 13 Instead, the period
thereof shall be reckoned from the time her compensation was withheld from her, or in April, 1990 up
to the finality of our decision. 39. Magcalas vs NLRC : 100333 : March 13, 1997 Regular employees
cannot at the same time be project employees. Article 280 of the Labor Code states that regular
employees are those whose work is necessary or desirable to the usual business of the
employer. The two exceptions following the general description of regular employees refer to
either project or seasonal employees. The employment of seasonal employees, on the other hand,
legally ends upon completion of the project or the season As regular employees, petitioners'
employment cannot be terminated at the whim of the employer. For a dismissal of an employee
to be valid, two requisites must be met: (1) the employee is afforded due process, meaning, he is
given notice of the cause of his dismissal and an adequate opportunity to be heard and to defend
himself; and (2) the dismissal is for a valid cause as indicated in Article 282[35] of the Labor
Code.[36] The services of petitioners were purportedly terminated at the end of the ADB and
Interbank projects, but this could not have been a valid cause for, as discussed above, they were
regular and not project employees. Thus, the Court does not hesitate to conclude that petitioners
were illegally dismissed. 40. Abasolo v. NLRC G.R. No. 118475, 29 November 2000, 346 SCRA
293. The amount of separation pay is based on two factors: the amount of monthly salary and
the number of years of service. Although the Labor Code provides different definitions as to what
constitutes one year of service, Book Six[31] does not specifically define one year of
service for purposes of computing separation pay. However, Articles 283 and 284 both state
in connection with separation pay that a fraction of at least six months shall be considered one whole
year. Applying this case at bar, we hold that the amount of separation pay which respondent
members xxx should receive is one-half (1/2) their respective average monthly pay during the last
season they worked multiplied by the number of years they actually rendered service, provided that
they worked for at least six months during a given year. 41. Philippine Tobacco Flue-Curing &
Redrying Corporation v. NLRC G.R. No. 127395, 10 December 1998, 300 SCRA 37. The formula
that petitioner proposes, wherein a year of work is equivalent to actual work rendered for 303 days,
is both unfair and inapplicable, considering that Articles 283 and 284 provide that in connection with
separation pay, a fraction of at least six months shall be considered one whole year. Under these
provisions, an employee who worked for only six months in a given year -- which is certainly less
than 303 days -- is considered to have worked for one whole year. 42. Rowell Industrial Corporation
vs. Court of Appeals, G.R. No. 167714 March 7, 2007 Well-established is the rule that regular
employees enjoy security of tenure and they can only be dismissed for just cause and with due
process, notice and hearing.[24] And in case of employees dismissal, the burden is on the
employer to prove that the dismissal was legal. Thus, respondent Taripe s summary
dismissal, not being based on any of the just or authorized causes enumerated under Articles
282,[25] 283,[26] and 284[27] of the Labor Code, as amended, is illegal. 43. Robinsons
Galleria/Robinsons Supermarket Corporation and/or Jess Manuel v. Ranchez, G.R. No. 177937,
January 19, 2011, 640 SCRA 142 Well-established is the rule that regular employees enjoy security
of tenure and they can only be dismissed for just cause and with due process, notice and
hearing.[24] And in case of employees dismissal, the burden is on the employer to prove
that the dismissal was legal. Thus, respondent Taripe s summary dismissal, not being based
on any of the just or authorized causes enumerated under Articles 282,[25] 283,[26] and
284[27] of the Labor Code, as amended, is illegal. 44. Magis Young Achievers Learning
Center v. Manalo, G.R. No. 178835, February 13, 2009, 579 SCRA 421, 431-432 probationary
employees enjoy security of tenure during the term of their probationary employment such that they
may only be terminated for cause as provided for by law, or if at the end of the probationary period,
the employee failed to meet the reasonable standards set by the employer at the time of the
employee s engagement. in the absence of an express period of probation for private school
teachers, the three-year probationary period provided by the Manual of Regulations for Private
Schools must apply likewise to the case of respondent. In other words, absent any concrete and
competent proof that her performance as a teacher was unsatisfactory from her hiring on April 18,
2002 up to March 31, 2003, respondent is entitled to continue her three-year period of probationary
period, such that from March 31, 2003, her probationary employment is deemed renewed for the
following two school years.[47] 45. Buiser, et al., v.. Hon. Leogardo, etc., et al., G.R. No. L-63316
July 31, 1984 the probationary period of employment is limited to six (6) months. The exception to
this general rule is When the parties to an employment contract may agree otherwise, such as when
the same is established by company policy or when the same is required by the nature of work to be
performed by the employee. In the latter case, there is recognition of the exercise of managerial
prerogatives in requiring a longer period of probationary employment, such as in the present case
where the probationary period was set for eighteen (18) months, i.e. from May, 1980 to October,
1981 inclusive, especially where the employee must learn a particular kind of work such as selling,
or when the job requires certain qualifications, skills, experience or training. 46. Miguel Corporation
vs. Del Rosario, G.R. Nos. 168194 & 168603, December 13, 2005 Considering that respondent was
illegally dismissed, she is entitled not only to reinstatement but also to payment of full backwages,
computed from the time her compensation was actually withheld from her on March 13, 2001, up to
her actual reinstatement. As a regular employee of petitioner from the date of her employment on
April 17, 2000, she is likewise entitled to other benefits, i.e., service incentive leave pay and
13th month pay computed from such date also up to her actual reinstatement. Respondent is
not, however, entitled to holiday pay because the records reveal that she is a monthly paid regular
employee. Under Section 2, Rule IV, Book III of the Omnibus Rules Implementing the Labor Code,
employees who are uniformly paid by the month, irrespective of the number of working days therein,
shall be presumed to be paid for all the days in the month whether worked or not. 47. Octaviano vs.
NLRC, G.R. No. 88636 October 3, 1991 The fact that the petitioner received separation pay should
not be taken against her for it is but natural for her to accept whatever amounts the company would
give her. Her receipt of separation pay does not relieve the company of its obligations under the law.
Backwages and separation pay are reliefs distinct and separate from each other. Payment of
backwages in the form of relief that restores the income that was lost by reason of unlawful dismissal
is distinguished from separation pay which provides the employee money during the period in which
he is locating a new job.[16] We have moreover held that a quitclaim will not stop a dismissed
employee from complaining to the authorities. 48. Cebu Royal PIants (SMC) vs. The Honorable
Deputy Minister of Labor and 144. Employment, et al., G.R. No. 58639, August 12, 1987, 153 SCRA
11 there was here an attempt to circumvent the law by separating the employee after five months'
service to prevent him from becoming a regular employee, and then rehiring him on probation, again
without security of tenure. We cannot permit this subterfuge if we are to be true to the spirit and
mandate of social justice. On the other hand, we have also the health of the public and of the
dismissed employee himself to consider. Hence, although we must rule in favor of his reinstatement,
this must be conditioned on his fitness to resume his work, as certified by competent authority. 49.
Beta Electric Company vs. National Labor Relations Commission, et al., G.R. No. 86408, February
15, 1990,182 SCRA 384 12 a probationary employee is "considered a regular employee" if he has
been "allowed to work after [the] probationary period." [11] The fact that her employment has
been a contract-to-contract basis cannot alter the character of employment, because contracts
cannot override the mandate of law. Hence, by operation of law, she has become a regular
employee. 50. Aliling vs. Feliciano, G.R. No. 185829, April 25,2012 The normal consequences of
respondents illegal dismissal, then, are reinstatement without loss of seniority rights, and
payment of backwages computed from the time compensation was withheld up to the date of actual
reinstatement. Where reinstatement is no longer viable as an option, separation pay equivalent to
one (1) month salary for every year of service should be awarded as an alternative. The payment of
separation pay is in addition to payment of backwages. 51. Mercado vs. AMA Computer College -
Paraaque City, Inc. G.R. No. 183572 April 13, 2010 The fixed-term character of employment
essentially refers to the period agreed upon between the employer and the employee;
employment exists only for the duration of the term and ends on its own when the term
expires. In a sense, employment on probationary status also refers to a period because of the
technical meaning probation carries in Philippine labor law a maximum period of six
months, or in the academe, a period of three years for those engaged in teaching jobs. Their
similarity ends there, however, because of the overriding meaning that being on probation
connotes, i.e., a process of testing and observing the character or abilities of a person who is new
to a role or job 52. Magis Young Achievers Learning Center v. Adelaida P. Manalo, G.R. No.
178835, February 13, 2009, 579 SCRA 421, 431-438 probationary employees enjoy security of
tenure during the term of their probationary employment such that they may only be terminated for
cause as provided for by law, or if at the end of the probationary period, the employee failed to meet
the reasonable standards set by the employer at the time of the employee s
engagement. Undeniably, respondent was hired as a probationary teacher and, as such, it was
incumbent upon petitioner to show by competent evidence that she did not meet the standards set
by the school. This requirement, petitioner failed to discharge. To note, the termination of
respondent was effected by that letter stating that she was being relieved from employment because
the school authorities allegedly decided, as a cost-cutting measure, that the position of
Principal was to be abolished. Nowhere in that letter was respondent informed that her
performance as a school teacher was less than satisfactory. 53. Petroleum Shipping Limited
(formerly Esso International Shipping (Bahamas) Co., Ltd.) vs. NLRC, June 16,2006, G.R. No.
148130 Court traced its ruling in a number of cases that seafarers are contractual, not regular,
employees. Thus, inBrent School, Inc. v. Zamora,[15] the Court cited overseas employment
contract as an example of contracts where the concept of regular employment does not apply,
whatever the nature of the engagement and despite the provisions of Article 280 of the Labor
Code. In Coyoca v. NLRC,[16] the Court held that the agency is liable for payment of a
seaman s medical and disability benefits in the event that the principal fails or refuses to pay the
benefits or wages due the seaman although the seaman may not be a regular employee of the
agency. 54. Millares v. NLRC 434 Phil. 524 (2002). Accordingly, and since the entire purpose
behind the development of legislation culminating in the present Article 280 of the Labor code clearly
appears to have been, as already observed, to prevent circumvention of the employee s right to
be secure in his tenure, the clause in said article indiscriminately and completely ruling out all written
or oral agreements conflicting with the concept of regular employment as defined therein should be
construed to refer to the substantive evil that the Code itself has singled out; agreements entered
into precisely to circumvent security of tenure. It should have no application to instances where a
fixed period of employment was agreed upon knowingly and voluntarily by the parties, without any
force, duress or improper pressure being brought to bear upon the employee and absent any other
circumstances vitiating his consent, or where 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 over the latter. As a Filipino seaman, petitioner is governed by the
Rules and Regulations Governing Overseas Employment and the said Rules do not provide for
separation or termination pay. 55. Gu-Miro v. Adorable G.R. No. 160952, 20 August 2004, 437
SCRA 162. Clearly, petitioner cannot be considered as a regular employee notwithstanding that the
work he performs is necessary and desirable in the business of respondent company. As
expounded in the above-mentioned Millares Resolution, an exception is made in the situation of
seafarers. The exigencies of their work necessitates that they be employed on a contractual basis.
Thus, even with the continued re-hiring by respondent company of petitioner to serve as Radio
Officer onboard Bergesen s different vessels, this should be interpreted not as a basis for
regularization but rather a series of contract renewals sanctioned under the doctrine set down by the
second Millares case. If at all, petitioner was preferred because of practical
considerations namely, his experience and qualifications. However, this does not alter the
status of his employment from being contractual. CASES ON LABOR RELATIONS 1. Tunay na
Pagkakaisa ng Mangagawa sa Aisa Brewery vs. Asia Brewery G.R. No. 162025 Aug. 3,2010
Confidential employees are defined as those who (1) assist or act in a confidential capacity, (2) to
persons who formulate, determine, and effectuate management policies in the field of labor relations.
Not being confidential employees, the secretaries/clerks and checkers are not disqualified from
membership in the Union of respondent s rank-and-file employees. 2.National Association of
Trade Unions-Republic Planters Bank Supervisors Chapter v. Torres G.R. No. 93468 Dec. 29,1994
Inc. only the Branch Managers/OICs, Cashiers and Controllers of respondent Bank, being
confidential employees, are disqualified from joining or assisting petitioner Union, or joining,
assisting or forming any other labor organization. But this ruling should be understood to apply only
to the present case based on the evidence of the parties, as well as to those similarly situated. It
should not be understood in any way to apply to banks in general. 3. Standard Chartered Bank
Employees Union [SCBEU-NUBE] v. Standard Chartered Bank G.R. No. 161933 April 22,2008
Absent any proof that Chief Cashiers and Assistant Cashiers, personnel of the Telex department
and one (1) HR Staff have mutuality of interest with the other rank and file employees, then they are
rightfully excluded from the appropriate bargaining unit. 4. Golden Farms Inc. vs. Ferrer-Calleja G.R.
No. 78755 July 19,1989 This rationale holds true also for confidential employees such as accounting
personnel, radio and telegraph operators, who having access to confidential information, may
become the source of undue advantage. Said employee(s) may act as a spy or spies of either party
to a collective bargaining agreement. This is specially true in the present case where the petitioning
Union is already the bargaining agent of the rank-and-file employees in the establishment. To allow
the confidential employees to join the existing Union of the rank-and-file would be in violation of the
terms of the Collective Bargaining Agreement wherein this kind of employees by the nature of their
functions/positions are expressly excluded. 5. Philips industrial Development Inc. vs. NLRC G.R.
No.88957 June 25,1992 that the right to join a union includes the right to abstain from joining any
union. 19 Inasmuch as what both the Constitution and the Industrial Peace Act have recognized,
and guaranteed to the employee, is the "right" to join associations of his choice, it would be absurd
to say that the law also imposes, in the same breath, upon the employee the duty to join
associations. The law does not enjoin an employee to sign up with any association. 6. Pier &
Arrastre & Stevedoring Services Inc. vs. Roldan-Confessor G.R. No. 110854 Feb. 13,1995 We thus
hold that public respondent acted with grave abuse of discretion in not excluding the four foremen
and legal secretary from the bargaining unit composed of rank-and-file employees. As for the
timekeeper and assistant timekeeper it is clear from petitioner's own pleadings that they are, neither
managerial nor supervisory employees. They are merely tasked to report those who commit
infractions against company rules and regulations. This reportorial function is routinary and clerical.
They do not determine the fate of those who violate company policy rules and regulations function. It
follows that they cannot be excluded from the subject bargaining unit. 7.Southern Philippines
Federation of Labor vs. Ferrer-Calleja G.R. No. 80882 April 24,1989 he employees in the
confidential payroll, the petitioner has not shown that the nature of their jobs is classified as
managerial except for its allegation that they are considered by management as occupying
managerial positions and highly confidential. Neither can payment or non-payment of union dues be
the determining factor of whether the challenged employees should be excluded from the bargaining
unit since the union shop provision in the CBA applies only to newly hired employees but not to
members of the bargaining unit who were not members of the union at the time of the signing of the
CBA. It is, therefore, not impossible for employees to be members of the bargaining unit even
though they are non-union members or not paying union dues. 8. Filoil Refinery Corp. vs. Filoil
Supervisory and Confidential Employees Association G.R. No.L-26736 August 18,1972 he
confidential employee are very few in number and are by practice and tradition identified with the
supervisors in their role as representives of management vis-a-vis the rank and file employee such
identity of interest has allowed their inclusion in the bargaining unit of supervisors-managers for
purposes of collective bargaining in turn as employees in relation to the company as their employer.
9.Coastal Subic Bay Terminal Inc. vs. Department of Labor and Employment-Office of the Secretary
G.R. No.157117 November 20,2006 supervisory employees are not eligible for membership in a
labor union of rank-and-file employees. The supervisory employees are allowed to form their own
union but they are not allowed to join the rank-and-file union because of potential conflicts of
interest.29 Further, to avoid a situation where supervisors would merge with the rank-and-file or
where the supervisors labor union would represent conflicting interests, a local supervisors
union should not be allowed to affiliate with the national federation of unions of rank-and-file
employees where that federation actively participates in the union activity within the
company.30 Thus, the limitation is not confined to a case of supervisors wanting to join a rank-and-
file union. The prohibition extends to a supervisors local union applying for membership in a
national federation the members of which include local unions of rank-and-file employees.3 10. San
Miguel Corporation vs. Laguesma G.R. No. 100485 September 21,1994 It is not, however, the
convenience of the employer that constitutes the determinative factor in forming an appropriate
bargaining unit. Equally, if not more important, is the interest of the employees. In choosing and
crafting an appropriate bargaining unit, extreme care should be taken to prevent an employer from
having any undue advantage over the employees' bargaining representative. Our workers are weak
enough and it is not our social policy to further debilitate their bargaining representative. 11. San
Migule Corporation Supervisors and Exempt Employees Union vs. Laguesma G.R. No. 110399
August 15,1997 A unit to be appropriate must effect a grouping of employees who have substantial,
mutual interests in wages, hours, working conditions and other subjects of collective bargaining.[25]
12. Democratic Labor Association vs. Cebu Stevedoring Co. Inc. G.R. No. 10321Feb. 28,1958 This
Court has already taken cognizance of the crucial issue of determining the proper constituency of a
collective bargaining unit. (1) will of employees (Glove Doctrine); (2) affinity and unity of employee's
interest, such as substantial similarity of work and duties or similarity of compensation and working
conditions; (3) prior collective bargaining history; and (4) employment status, such as temporary,
seasonal and probationary employees". 13. University of the Philippines vs. Ferrere-Calleja G.R.
No.96189 July 14,1992 (t)he test of the grouping is community or mutuality of interests. And this is
so because 'the basic test of an asserted bargaining unit's acceptability is whether or not it is
fundamentally the combination which will best assure to all employees the exercise of their collective
bargaining rights' (Rothenberg on Labor Relations, 490)." 14. St. James School of Quezon City vs.
Samahang Manggagawa ng St. James School of Quezon City G.R. No. 151326 November 23,2005
The motor pool, construction and transportation employees of the Tandang Sora campus had 149
qualified voters at the time of the certification election. Hence, the 149 qualified voters should be
used to determine the existence of a quorum. Since a majority or 84 out of the 149 qualified voters
cast their votes, a quorum existed in the certification election. 15. International School Alliance of
Educators [ISAE] vs. Quisumbing G.R. No. 128845 June 1,2000 It does not appear that foreign-hires
have indicated their intention to be grouped together with local-hires for purposes of collective
bargaining. The collective bargaining history in the School also shows that these groups were
always treated separately. Foreign-hires have limited tenure; local-hires enjoy security of tenure.
Although foreign-hires perform similar functions under the same working conditions as the local-
hires, foreign-hires are accorded certain benefits not granted to local-hires. These benefits, such as
housing, transportation, shipping costs, taxes, and home leave travel allowance, are reasonably
related to their status as foreign-hires, and justify the exclusion of the former from the latter. To
include foreign-hires in a bargaining unit with local-hires would not assure either group the exercise
of their respective collective bargaining rights. 16. National Association of Free Trade Unions vs.
Mainit Lumber Development Company Workers Union G.R. No. 79526 December 21,1990
Moreover, while the existence of a bargaining history is a factor that may be reckoned with in
determining the appropriate bargaining unit, the same is not decisive or conclusive. Other factors
must be considered. The test of grouping is community or mutuality of interests. This is so because
"the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their collective bargaining rights."
17. San Miguel Corporation vs. Laguesma G.R. No. 100485, September 21,1994 A unit to be
appropriate must effect a grouping of employees who have substantial, mutual interests in wages,
hours, working conditions and other subjects of collective bargaining.[25] 18. Belyca Corporation vs.
Ferrere-Calleja G.R. No. 77395 November 29,1988 as a general rule, a certification election is the
sole concern of the workers. The only exception is where the employer has to file a petition for
certification election pursuant to Art. 259 of the Labor Code because the latter was requested to
bargain collectively. But thereafter the role of the employer in the certification process ceases. The
employer becomes merely a bystander 19. Philippine Airlines Employees Association vs. Ferrere-
Calleja G.R. No. 76673 June 22,1988 Employees have a constitutional right to choose their own
bargaining representative. The holding of a certification election is a statutory policy that should not
be circumvented (George and Peter Lines, Inc. vs. Association of Labor Unions 20. PAFLU vs.
Bureau of Labor Relations G.R. No. L-43760, Aug. 21,1976 hat is of the essence of the certification
process, as noted in "is that every labor organization be given the opportunity in a free and honest
election to make good its claim that it should be the exclusive collective bargaining representative.
21. UE Automobile Employees and Workers Union vs. Noriel G.R. No. L-44350 Nov. 25,1978 It is
thus of the very essence of the regime of industrial democracy sought to be attained through the
collective bargaining process that there be no obstacle to the freedom Identified with the exercise of
the right to self-organization. Labor is to be represented by a union that can express its collective
will. In the event, and this is usually the case, that there is more than one such group fighting for that
privilege, a certification election must be conducted. 22. United CMC Worker s Union vs. BLR
G.R. No. L-51337 March 22,1984 the pendency of a formal charge of company domination is a
prejudicial question that, until decided, bars proceedings for a certification election 23. California
Manufacturing Corporation vs. Laguesma G.R. No.97020 June 18,1992 CMC as employer has no
standing to question a certification election (Asian Design and Manufacturing Corporation v. Calleja,
Et Al., G.R. No. 77415, June 29, 1989, 174 SCRA 477). Such is the sole concern of the workers.
The only exception is where the employer has to file the petition for certification election pursuant to
Article 259 (now 258) of the Labor Code because it was requested to bargain collectively.
Thereafter, the role of the employer in the certification process ceases. The employer becomes
merely a by-stander 24. Furusawa Rubber Philippines Inc. vs. Secretary of Labor and Employment
G.R. No. 121241 Dec. 10,1997 The submission of a xerox copy of the union s certificate of
registration to prove its legitimacy is sufficient, hence, the Med-Arbiter correctly granted the petition
for certification election. As it been held in a long line of cases, a certification proceeding is not a
litigation in the sense that the term is ordinarily understood, but an investigation of a fact-
finding and non- adversarial character. It is not covered by the technical rules
of evidence. 25. TUCP and Allied Services World Federation of Trade Unions vs. Laguesma
G.R. No. 102350 June 30,1994 26. Kaisahan ng Manggagawang Pilipino vs. Trajano G.R. No.
75810 September 9,1991 is evident that the prohibition imposed by law on the holding of a
certification election "within one year from the date of issuance of declaration of a final certification
election result' in this case, from February 27, 1981, the date of the Resolution declaring
NAFLU the exclusive bargaining representative of rank-and-file workers of VIRON can have no
application to the case at bar. That one-year period-known as the "certification year" during which
the certified union is required to negotiate with the employer, and certification election is
prohibited 2 has long since expired. 27. National Congress of Unions in Sugrar Industry of
the Phil-TUCP vs. Trajano G.R. No. 67485 April 10,1992 The law demands that the petition for
certification election should fail in the presence of a then pending bargaining deadlock. 28. Capitol
Medical Center Alliiance of Concerned Employees-United Filipino Service Workers vs. Laguesma
G.R. No. 118915 Feb. 4,1997 in order to allow an employer to validly suspend the bargaining
process, there must be a valid petition for certification election. The mere filing of a petition does
notipso facto justify the suspension of negotiation by the employer 29. Republic Planters Bank
General Services Employees Union-National Association of Trade Unions vs. Laguesma G.R. No.
119675 Nov. 21,1996 Since the persons involved are not employees of the company, we held that
they are not entitled to the constitutional right to join or form a labor organization for purposes of
collective bargaining. 30. Republic Planters Bank General Services Employees Union-National
Association of Trade Unions vs. Laguesma G.R. No. 119675 Nov. 21,1996 31. Samahang
Manggagawa sa Permex vs. Secretary of Labor G.R. No. 107792 March 2,1998 a petition for
certification election or motion for intervention may be entertained only within 60 days prior to the
date of expiration of an existing collective bargaining agreement. The purpose of the rule is to
ensure stability in the relationships of the workers and the management by preventing frequent
modifications of any collective bargaining agreement earlier entered into by them in good faith and
for the stipulated original period. Excepted from the contract-bar rule are certain types of contracts
which do not foster industrial stability, such as contracts where the identity of the representative is in
doubt. Any stability derived from such contracts must be subordinated to the employees
freedom of choice because it does not establish the kind of industrial peace contemplated by the
law.[6] Such situation obtains in this case. The petitioner entered into a CBA with Permex
Producer when its status as exclusive bargaining agent of the employees had not been established
yet. 32. Samahan ng Mangagawa sa Pacific Plastic vs. Laguesma G.R. No. 111245 Jan.
31,1997 certification election can be conducted despite pendency of a petition to cancel the union
registration certificate. For the fact is that at the time the respondent union filed its petition for
certification, it still had the legal personality to perform such act absent an order directing its
cancellation. 33. Yokomaha Tire Phils. Vs. Yokohama Employees Union G.R. No.159553 December
10,2007 without a final judgment declaring the legality of dismissal, dismissed employees are eligible
or qualified voters. 34. GOP-CCP Workers Union vs. CIR G.R. No. L-33015 Sept. 10,1979 no
injustice was perpetrated against the appellant when the certification election was held
notwithstanding the pendency of its motions for reconsideration and for the suspension of the
election. The CIR rightly sensed that those eleventh-hour maneuvers did not conduce to industrial
peace and, instead, fomented uncertainty on the matter of representation of the workers. 35. Reyes
vs. Ople G.R. No. L-48192 March 30,1979 The Court has consistently favored and upheld the
holding of certification elections for the workers themselves to elect the union that the majority may
choose as their bargaining representative or if they wish, to vote that there be no union. Their plea
that another certification election be held at which they may duly take part would be but a futile
exercise in the light of the results which were highlighted by the lack of any noticeable support for
them by the rank and file, as well as by their admission at the hearing that the winner and certified
union, the NAFLU, enjoys the workers' full support, having signed up more than a thousand of them
as members. 36. NFL vs. Sec of Labor G.R. No. 104556 March 9,1998 Private respondent is the
employer. The manner in which the election was held could make the difference between
industrial strife and industrial harmony in the company. What an employer is prohibited from
doing is to interfere with the conduct of the certification election for the purpose of influencing its
outcome. But certainly an employer has an abiding interest in seeing to it that the election is
clean, peaceful, orderly and credible. 37. Insular Hotel Employees Union-NFL vs. Waterfront
Insular Hotel Davao G.R. No. 174040-41 Sept. 22,2010 the individual members of the union cannot
feign knowledge of the execution of the MOA. Each contract was freely entered into and there is no
indication that the same was attended by fraud, misrepresentation or duress. To this Court's
mind, the signing of the individual Reconfirmation of Employment should, therefore, be
deemed an implied ratification by the Union members of the MOA. 38. St. Lukes Medical Center
Inc. vs. Torres G.R. No. 99395 June 29,1993 n the absence of a specific provision of law prohibiting
retroactivity of the effectivity of arbitral awards issued by the Secretary of Labor pursuant to Article
263 (g) of the Labor Code, such as herein involved, public respondent is deemed vested with
plenary and discretionary powers to determine the effectivity thereof. 39. Villar vs, Inciong G.R. Nos.
L-50283-84 April 20,1983 Amigo Employees Union (Independent) Which petitioners claim to
represent, not being a legitimate labor organization, may not validly present representation issues.
Therefore, the act of petitioners cannot be considered a legitimate exercise of their right to self-
organization. Hence, We affirm and reiterate the rationale explained in Phil Association of Free
Labor Unions vs. Sec. of Labor case, supra, in order to protect legitimate labor and at the same time
maintain discipline and responsibility within its ranks. 40. People s Industrial and Commercial
Employees and Workers Org. vs. Peoples Industrial and Commercial Corp. G.R. No. L-37687 March
15,1982 t is clear that management gave cause or reason to induce the staging of the strike by
improperly refusing to recognize the new union formed by petitioners. It has been twelve (12) years
since petitioners were dismissed from their employment and in their destitute and deplorable
condition, to them the benign provisions of the New Constitution for the protection of labor, assuring
the rights of workers to self- organization, collective bargaining and security of tenure would be
useless and meaningless. Labor, being the weaker in economic power and resources than capital,
deserve protection that is actually substantial and material. 41. Elisco-Elirol Labor Union vs.
Noriel G.R. No. L-41955 Dec. 29,1977 any suspension or lay-off of the complainants officers and
board members or employees of petitioner union arising from the respondents' misconception of the
clearly applicable principles and jurisprudence upholding the primacy of the employees and their
freely chosen local union as the true party in interest to the collective bargaining agreement will be
forthwith rectified and set aside. 42. Association Workers Union PTGWO vs. NLRC G.R. No. 87266-
69 July 30,1990 What was in fact eventually established by individual respondents was a separate,
independent union called Metro Port Workers Union (MWU) which was not entitled, during the time
periods here relevant, to recognition as the bargaining unit in CBA negotiations. 43. Benguet
Consolidated Inc. vs. BCI Employees & Workers Union G.R. No. April 30,1968 n formulating the
substitutionary doctrine, the only consideration involved was the employees
(principal) interest in the existing bargaining agreement. The agent s (union) interest never
entered the picture. The majority of the employees, as an entity under the statute, is the true party in
interest to the contract, holding rights through the agency of the union representative. Thus, any
exclusive interest claimed by the agent is defeasible at the will of the principal. The
substitutionary doctrine only provides that the employees cannot revoke the validly
executed collective bargaining contract with their employer by the simple expedient of changing their
bargaining agent. And it is in the light of this that the phrase said new agent would have to
respect said contract must be understood. It only means that the employees, thru their new
bargaining agent, cannot renege on their collective bargaining contract, except of course to
negotiate with management for the shortening thereof. 44. Confederation of Citizens Labor Unions
vs. Noriel 1982 & National Federation of labor vs. DOLE Sec. 1998 Private respondent is the
employer. The manner in which the election was held could make the difference between
industrial strife and industrial harmony in the company. What an employer is prohibited from
doing is to interfere with the conduct of the certification election for the purpose of influencing its
outcome. But certainly an employer has an abiding interest in seeing to it that the election is
clean, peaceful, orderly and credible. 45. PHILIPPINE SKYLANDERS, INC. V. NATIONAL
LABOR RELATIONS COMMISSION G.R. No. 127374 and G.R. No. 127431, January 31, 2002, 375
SCRA 369 A local labor union is a separate and distinct unit primarily designed to secure and
maintain an equality of bargaining power between the employer and their employee-members. A
local union does not owe its existence to the federation with which it is affiliated. It is a separate and
distinct voluntary association owing its creation to the will of its members. The mere act of affiliation
does not divest the local union of its own personality, neither does it give the mother federation the
license to act independently of the local union. It only gives rise to a contract of agency where the
former acts in representation of the latter. 46. National Union of Bank Employees vs. Philnabank
Employees Association (PEMA), G.R. No. 174287 August 12,2013: 47. Cirtek Employees Labor
Union-Federation of Free Workers v. Cirtek Electronics, Inc., G.R. No. 190515, June 6, 2011, 650
SCRA 656, 663 the right of the local members to withdraw from the federation and to form a new
local union depends upon the provisions of the union's constitution, bylaws and charter and, in the
absence of enforceable provisions in the federation's constitution preventing disaffiliation of a local
union, a local may sever its relationship with its parent.37 48. Villar v. Inciong G.R. No. L-50283-84
April 20, 1983 A closed-shop is a valid form of union security, and a provision therefor in a collective
bargaining agreement is not a restriction of the right of freedom of association guaranteed by the
Constitution. 49. Volkschel Labor Union v. BLR June 19,1985 Suffice it to state that respondent
federation is not entitled to union dues payments from petitioner's members. "A local union which
has validly withdrawn from its affiliation with the parent association and which continues to represent
the employees of an employer is entitled to the check-off dues under a collective bargaining
contract. 50. PALACOL VS. FERRER-CALLEJA, G.R. No. 85333 February 26, 1990: only the
collection of a special fund for labor and education research is mandated, as correctly pointed out by
the Union. The two other purposes, namely, the purchase of vehicles and other items for the benefit
of the union officers and the general membership, and the payment of services rendered by union
officers, consultants and others, should be supported by the regular union dues, there being no
showing that the latter are not sufficient to cover the same. 51. ABS-CBN Supervisors Employees
Union Members vs. ABS-CBN Broadcasting Corporation, et. al., G.R. No. 106518, March 11,
1999Even assuming that the special assessment was validly levied pursuant to paragraph (n), and
granting that individual written authorizations were obtained by the Union, nevertheless there can be
no valid check-off considering that the majority of the Union members had already withdrawn their
individual authorizations. A withdrawal of individual authorization is equivalent to no authorization
at all 52. Holy Cross of Davao, Inc. vs. Joaquin, G.R. No. 110007, Oct. 18,1996Check-offs in truth
impose as extra burden on the employer in the form of additional administrative and bookkeeping
costs. It is a burden assumed by management at the instance of the union and for its benefit, in
order to facilitate the collection of dues necessary for the latter s life and sustenance. But the
obligation to pay union dues and agency fees obviously devolves not upon the employer, but the
individual employee. It is a personal obligation not demandable from the employer upon default
or refusal of the employer to consent to a check-off. The only obligation of the employer under a
check-off is to effect the deductions and remit the collections to the union. The principle of unjust
enrichment necessarily precludes recovery of union dues -- or agency fees -- from the employer,
these being, to repeat, obligations pertaining to the individual worker in favor of the bargaining
union. Where the employer fails or refuses to implement a check-off agreement, logic and
prudence dictate that the union itself undertake the collection of union dues and assessments from
its members (and agency fees from non-union employees); this, of course, without prejudice to suing
the employer for unfair labor practice. 53. Kio kloy v. NLRC, G.R. No. L-54334 January 22, 1986A
Company's refusal to make counter proposal if considered in relation to the entire bargaining
process, may indicate bad faith and this is specially true where the Union's request for a counter
proposal is left unanswered 54. General Milling Corp. Vs. Court of Appeals, G.R. No.
146728. February 11, 2004: ART. 253. The provision mandates the parties to keep the status
quo while they are still in the process of working out their respective proposal and counter
proposal. The general rule is that when a CBA already exists, its provision shall continue to govern
the relationship between the parties, until a new one is agreed upon. The rule necessarily
presupposes that all other things are equal. That is, that neither party is guilty of bad faith. However,
when one of the parties abuses this grace period by purposely delaying the bargaining process, a
departure from the general rule is warranted. 55. COLEGIO DE SAN JUAN DE
LETRAN V. ASSOCIATION OF EMPLOYEES AND FACULTY OF LETRAN, G.R. NO. 141471,
18 SEPTEMBER 2000, 340 SCRA 587, 595Where the employer did not even bother to submit an
answer to the bargaining proposals of the union, there is a clear evasion of the duty to bargain
collectively. 56. DIVINE WORD UNIVERSITY OF TACLOBAN VS. SECRETARY OF LABOR AND
EMPLOYMENT, 213 SCRA 759, 11 September 1992 the action for intervention had in effect been
denied by the dismissal of the petition for certification election in the May 23, 1989 Order. The sub
silencio treatment of the motion for intervention in said Order does not mean that the motion was
overlooked. It only means, as shown by the findings of facts in the same Order, that there was no
necessity for the holding of a certification election wherein the DWUIFEU could participate. 57. THE
INSULAR LIFE ASSURANCE CO., LTD., EMPLOYEES ASSOCIATION-NATU VS. THE INSULAR
LIFE ASSURANCE CO., LTD. G.R. No. L-25291 January 30, 1971 STANDARD CHARTERED
BANK EMPLOYEES UNION (NUBE VS. Confessor, G.R. No. 114974 June 16, 2004: 58.
STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE VS. Confessor, G.R. No. 114974
June 16, 2004: The Union has not been able to show that the Bank had done acts, both at and
away from the bargaining table, which tend to show that it did not want to reach an agreement with
the Union or to settle the differences between it and the Union. Admittedly, the parties were
not able to agree and reached a deadlock. However, it is herein emphasized that the duty to
bargain does not compel either party to agree to a proposal or require the making of a
concession. [53] Hence, the parties failure to agree did not amount to ULP under Article
248(g) for violation of the duty to bargain.