Batch 2

Labor Law 1
Atty. Anonuevo | G01 | A.Y. 2016-2017

1. SAN MIGUEL FOODS, INC. v. SAN MIGUEL CORPORATION EMPLOYEES AUTHOR: ACIDO
UNION-PTWGO NOTES: Petition for review on certiorari
G.R. No. 168569, October 5, 2007
TOPIC: Construction in favor of labor PONENTE: Carpio-Morales, J.
CASE LAW/ DOCTRINE:
Article 4 of the Labor Code provides that "All doubts in the implementation and interpretation of the provisions of this Code, including implementing rules and
regulations, shall be resolved in favor of labor."
FACTS:
San Miguel Corporation Employees Union PTWGO (the Union) was the sole bargaining agent of all the monthly paid employees of petitioner San Miguel Foods,
Incorporated (SMFI).
On November 9, 1992, some employees of SMFIs Finance Department, through the Union represented by Edgar Moraleda, brought a grievance against the
Finance Manager for "discrimination, favoritism, unfair labor practices (ULP), not flexible [sic], harassment, promoting divisiveness and sectarianism, etc.,"
before the SMFI Plant Operations Manager in accordance with Step 1 of the grievance machinery adopted in the Collective Bargaining Agreement (CBA) forged
by SMFI and the Union.
o Union sought the review, evaluation, and upgrading of Finance Staff and promotion of the Finance Manager to other San Miguel affiliates/subsidiaries.
[Basta nakailang-Steps sila pero wala ring closure yung grievance.] The Union thereupon filed a complaint on October 20, 1993 before the National Labor
Relations Commission (NLRC), Arbitration Branch, against SMFI, its President, and its Finance Manager for unfair labor practice, and unjust discrimination in
matters of promotion. It prayed that SMFI et al. be ordered to promote the therein named employees with the corresponding pay increases or adjustment.
SMFI: MTD on the ground that the issues raised on the complaint must go through the grievance machinery parties or in the mandated provision of voluntary
arbitration, both provided in the CBA
Labor Arbiter: granted MTD and ordered the complaint remanded to the grievance machinery.
MR/Appeal to NLRC Second Division: Granted; the Labor Arbiter should continue hearing the Unions complaint.
Court of Appeals: Denied SMFIs petition for certiorari; Labor Arbiter has jurisdiction; SMFI violated the seniority rule under the CBA by appointing and
promoting certain employees which amounted to a ULP
ISSUE:
Whether or not the Labor Arbiter has jurisdiction.
HELD:
Yes. SMFIs petition is denied.
RATIO:
A perusal of the complaint shows that, indeed, the particular acts of ULP alleged to have been committed by SMFI were not specified; neither were the
ultimate facts in support thereof. In its Position Paper, however, the Union detailed the particular acts of ULP attributed to SMFI and the ultimate facts in
support thereof.
o Charges: Discrimination in promotions and violation of seniority rule
Section 7, Rule V of the New Rules of Procedure of the NLRC provides: Nature of Proceedings. The proceedings before the Labor Arbiter shall be non-
litigious in nature. Subject to the requirements of due process, the technicalities of law and procedure and the rules obtaining in the courts of law shall not
strictly apply thereto
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Section 1 of Rule 8 of the Rules of Court should not be strictly applied to a case filed before a Labor Arbiter. In determining jurisdiction over a case,
allegations made in the complaint, as well as those in the position paper, may thus be considered.
For a ULP case to be cognizable by the Labor Arbiter, and the NLRC to exercise its appellate jurisdiction, the allegations in the complaint should show prima
facie the concurrence of two things, namely: (1) gross violation of the CBA; AND (2) the violation pertains to the economic provisions of the CBA. As reflected
in the above-quoted allegations of the Union in its Position Paper, the Union charges SMFI to have violated the grievance machinery provision in the CBA.
The grievance machinery provision in the CBA is not an economic provision, however, hence, the second requirement for a Labor Arbiter to exercise
jurisdiction of a ULP is not present.
Article 4 of the Labor Code provides that "All doubts in the implementation and interpretation of the provisions of this Code, including implementing rules
and regulations, shall be resolved in favor of labor." Since the seniority rule in the promotion of employees has a bearing on salary and benefits, it may,
following a liberal construction of Article 261 of the Labor Code, be considered an "economic provision" of the CBA.
As above-stated, the Union charges SMFI to have promoted less senior employees, thus bypassing others who were more senior and equally or more
qualified. It may not be seriously disputed that this charge is a gross or flagrant violation of the seniority rule under the CBA, a ULP over which the Labor
Arbiter has jurisdiction.

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2. REYES V. CA, PHIL. MALAY POULTRY BREEDERS INC., LEONG HUP POULTRY AUTHOR: ADRE
FARM SDN. NOTES: included other details just in case J
[G.R. No. 154448 AUG. 15, 2003]
TOPIC: CONSTRUCTION IN FAVOR OF LABOR
PONENTE: YNARES-SANTIAGO
CASE LAW/ DOCTRINE:
In carrying out and interpreting the Labor Codes provisions and its implementing regulations, the employees welfare should be the primordial and paramount
consideration.
This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided in Article 4 of the Labor Code which states that
[a]ll doubts in the implementation and interpretation of the provisions of [the Labor] Code including its implementing rules and regulations, shall be resolved in
favor of labor, and Article 1702 of the Civil Code which provides that [i]n case of doubt, all labor legislation and all labor contracts shall be construed in favor of the
safety and decent living for the laborer.

APPLICATION: In the case at bar, what was withheld from Reyes was not only his salary, vacation and sick leave pay, and 13th month pay differential, but also his
separation pay. Hence, pursuant to current jurisprudence, separation pay must be included in the basis for the computation of attorneys fees.
FACTS:
Pedrito Reyes was appointed by respondent, Leong Hup Poultry Farms SD as Technical and Sales Manager with a net salary of US$ 4,500/mo.
o Duties include: selling parent stock day-old chicks and providing technical assistance to clients of the company in Malaysia and other Asian countries
1992: Leong Hup Farms formed Philippine Malay Poultry Breeders, Inc. (Philmalay) in the Philippines and Reyes was appointed General Manager with a monthly
pay of USD 5,500.
From 1996-97, respondents suffered losses which caused them to reduce production and retrench employees.
On June 30, 1997, Reyes gave verbal notice of resignation effective Jan. 1, 1998.
In a letter dated Jan. 12, 1998, Reyes confirmed his verbal notice of resignation and requested the same benefits as those granted to retrenched and resigned
employees of the company.
In a letter dated Jan. 19, 1998, Philmalay retrenched him effective Jan. 20, 1989 and promised him separation pay according to the Labor Code. However,
petitioner was offered separation pay equivalent to four months only. This was rejected by Reyes.
He filed with Labor Arbiter for underpayment of wages and non-payment of separation pay, sick leave, vacation leave and other benefits.
Labor Arbiter ruled in favor of petitioner.
On appeal by respondents at NLRC, decision was modified to delete USD 3,370 as unpaid salary, USD 28,600 as vacation leave, brand new car or its equivalent
life insurance and moral and exemplary damages and reducing separation pay to USD 44,400 by lowering length of service from 9 to 8 years only and finally
limiting attorneys fees to 10% of total awards.
Motion for reconsideration of petitioner was denied and on appeal with CA it was dismissed for failure to attach pertinent papers. On motion for
reconsideration with attachment of pertinent papers the same was denied again by the CA.
ISSUE(S): (1) WON Reyes termination was caused by retrenchment or by voluntary resignation?
(2) Did the CA err in dismissing the petition for technicalities?
(3) Should the Labor Arbiters decision be reinstated?
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HELD: 1. It was retrenchment evident by the termination letter sent by Philmalay.
2. YES
3. NO.
RATIO:
Question 1:
Reyes tendered his resignation letter to respondents where he requested that he be given the same benefits however there was no showing that respondents
accepted his resignation. Acceptance of a resignation tendered by an employee is necessary to make the resignation effective. No such acceptance was shown in the
case.

What appears in the record is a letter terminating the services of petitioner due to retrenchment effective January 20, 1998. VThe said letter should be interpreted
as a non-acceptance of petitioners resignation effective December 31, 1997. As correctly pointed out by the Labor Arbiter, if respondents considered petitioner
resigned as of December 31, 1997, and then there would be no need to retrench him. Also, petitioner is estopped from claiming that he was illegally dismissed and
that his retrenchment was without basis. His request for benefits granted to retrenched employees during such time when respondent was in the process of
retrenching its employees is tantamount to a recognition of the existence of a valid cause for retrenchment.
Question 2: Rules of procedure should not be applied in a very technical sense, for they are adopted to help secure, not override, substantial justice. In Ramos vs.
CA, a dismissal should be reconsidered once petitioner complies with the required attachments. In Jaro vs. CA, substantial compliance of an appellant may call for
relaxation of the rules of procedure. The same leniency should be applied in the case at bar since petitioner demonstrated willingness to comply with the
requirements set by the rules, otherwise, application of the rules of procedure in a very rigid and technical sense would defeat the ends of justice.
Question 3: No, modifications were needed such as reducing, as the NLRC correctly determined, of the length of employment to 8 years from 9, that petitioner is not
entitled to compensation from Jan. 1 to 19, 1998 since he did not prove he rendered services during said period, that car and insurance benefits are only granted
during course of employment and should not be part of the separation package, and demand for rental payment of his house as office of Philmalay from Dec. 1,
1989 to July 1996 is not within the jurisdiction of the NLRC but the regular courts. And being that respondents did not appeal the decision of the NLRC, then said
decision is deemed satisfactory to said respondents including the order of the NLRC to provide petitioner with legal services in the illegal recruitment case filed
against the former in his stint as head of Philmalay. Petitioner is also entitled to sick leave and vacation leave computed based on 8 years of service, separation pay,
13th month pay and salary and attorneys fees at 10% of total monetary award.
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3. J.K. Mercado & Sons Agricultural Enterprises, Inc. v. Sto. Tomas AUTHOR: Castro
[G.R. No. 158084. August 29, 2008] NOTES: This case is a Petition for review on certiorari
TOPIC: Construction in favor of Labor Petitioner - J.K. Mercado & Sons Agricultural Enterprises, Inc. (J.K. Mercado &
PONENTE: Azcuna, J. Sons)
Respondents Hon. Patricia Sto. Tomas (Secretary of Labor and Employment)
and some employees of the corporation
CASE LAW/ DOCTRINE:
A claimant has three years to press a money claim. Once judgment is rendered in her favor, she has five years to ask for execution of the judgment, counted from its
finality. This is consistent with the rule on statutory construction that a general provision should yield to a specific one and with the mandate of social justice that
doubts should be resolved in favor of labor.
FACTS:
December 3, 1993: Regional Tripartite Wages and Productivity Board, Region XI, issued Wage Order No. 3, granting a Cost of Living Allowance (COLA) to covered
workers.
January 28, 1994: J.K. Mercado & Sons filed an application for exemption from the coverage of the wage order.
April 11, 1994: The application for exemption was DENIED. J.K. Mercado & Sons was ordered to pay its covered workers the allowance prescribed under the
Wage Order plus interest of one percent (1%) per month, retroactive to December 1, 1993.
Notwithstanding the order, the respondent-employees were not given the benefits due them.
July 10, 1998: respondent-employees filed an Urgent Motion for Writ of Execution and Writ of Garnishment for the April 11, 1994 Order, seeking the
enforcement of the wage order against several entities including J.K Mercado & Sons.
October 7, 1998: OIC-Regional Director of Region XI issued a Writ of Execution.
J.K Mercado & Sons filed a Motion to Quash the Writ of Execution, which was denied by the Regional Director.
Not satisfied with the Regional Directors decision, J.K Mercado & Sons filed a Notice of Appeal with the Court of Appeals.
The CA denied the appeal and the motion for reconsideration.
J.K. Mercado and Sons arguments (Note: J.K. had the same arguments from the filing of the Motion to Quash the Writ of Execution up to the filing of Certiorari with
the SC):
o Art. 291 of the Labor Code applies to this case. This means that a money claim must be filed first by the employees to avail of the wage differential or COLA
granted under the Wage Order against J.K. Mercado & Sons for the latters refusal to pay.
o The Regional Director abused his discretion in issuing the Writ of Execution because the right of respondents to claim benefits had already prescribed due to
their failure to move for the execution of the April 11, 1994 Order within the period provided under Article 291 of the Labor Code, which is three (3) years
from the finality of the order.
CAs argument:
o Art. 291 is not applicable. While the filing by the respondents of the Urgent Motion for Writ of Execution and Writ of Garnishment refers to recovery of
benefits under the subject Wage Order, which entitled respondents to a cost of living allowance (COLA), what is being enforced in this case is the final order
dated April 11, 1994 denying petitioners application for exemption under the wage order.
o Being a final order, the it may be the subject of execution motu proprio or upon motion by any of the parties concerned. A judgment may be executed on
motion within five (5) years from the date of its entry or from the date it becomes final and executory.
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ISSUE(S):
Whether Art. 291 of the Labor Code is applicable
HELD:
NO.
RATIO:
Although Art. 291 of the Labor Code applies to money claims in general and provides for a 3-year prescriptive period to file them, in this case however,
employees money claims had already been reduced to a judgment, in the form of a Wage Order, which has become final and executory. Therefore, the
prescription applicable is not the general one that applies to money claims, but the specific one applying to judgments. Thus, the right to enforce the
judgment, having been exercised within five years, has not yet prescribed.
A claimant has three years to press a money claim. Once judgment is rendered in her favor, she has five years to ask for execution of the judgment,
counted from its finality. This is consistent with the rule on statutory construction that a general provision should yield to a specific one and with the
mandate of social justice that doubts should be resolved in favor of labor.

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4. PNCC Skyway Traffic Management and Security Division Workers AUTHOR: Miguel M. Consing
Organization (PSTMSDWO) v. PNCC Skyway Corp NOTES:
[G.R. No. 171213; February 17, 2010] Petitioner PSTMSDWO is the labor union.
TOPIC: Construction in Favor of Labor Respondent PNCC is the company
PONENTE: Peralta, J
FACTS:
PTSMSDWO (Union) entered into a CBA with PNCC (Company). The disputed provisions in the CBA pertain to vacation leave and expenses for security
licenses.

With regard to vacation leave the CBA provided that: The company shall schedule the vacation leave of employees during the year taking into
consideration the request of preference of the employees.

As for the expenses for security licenses the CBA stated: . . . All expenses of security guard in securing/renewing their licenses shall be for their [security
guards] personal account.

The Company issued a memorandum that laid out the schedule of the vacation leaves of the employees, it also provided that employees may re-schedule
their vacation leaves subject to evaluation. The Union objected to the implementation of the memorandum. It insisted that the individual members of the
union have the right to schedule their vacation leave.

The Union also demanded that the expenses for the required in-service training of its member security guards, as a requirement for the renewal of their
license, be shouldered by the respondent.

The Union brought it to the Labor Arbiter who ruled in their favor. The Company appealed to the CA who annulled the previous decision stating that the CBA
was clear it is the company who shall schedule the vacation leave of employees taking into consideration the request of preference of the employees.
ISSUE(S):
1. Did the Company have the right to schedule the vacation leaves of the employees?
2. Was the Company responsible for the expenses of security guards in securing/renewing their licenses?

HELD/RATIO:
1. Yes. The rule is that where the language of a contract is plain and unambiguous, its meaning should be determined without reference to extrinsic facts or
aids. In this case, the contested provision of the CBA is clear. Article VIII, Section 1 (b) of the CBA categorically provides that the scheduling of vacation
leave shall be under the option of the employer. The preference requested by the employees is not controlling because The Company retains its power and
prerogative to consider or to ignore said request.

The Court also observed that the multitude or scarcity of personnel manning the tollways should not rest upon the option of the employees, as the public
using the skyway system should be assured of its safety, security and convenience.
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2. Yes. Under the law (The Revised Rules and Regulation in Implementing RA 5487), It is the primary responsibility of operators of company security forces to
maintain and upgrade the standards of efficiency, discipline, performance and competence of their personnel. Thus it follows that the expenses to be
incurred shall be for the personal account of the company.

Moreover, the relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to
the common good. If the provisions in the CBA run contrary to law, public morals, or public policy, such provisions may very well be voided.
CASE LAW/ DOCTRINE:
The parties cannot be allowed to change the terms they agreed upon on the ground that the same are not favorable to them. However, If the provisions in the CBA
run contrary to law, public morals, or public policy, such provisions may very well be voided.

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05 SHS Perforated Materials, Winfried Hartmannshenn, Hinrich Schumacher v. AUTHOR: Pineda (for Concepcion)
Manuel Diaz NOTES:
[G.R. No. 185814; 13 October 2010]
TOPIC: construction in favor of labor PONENTE: Mendoza, J.
CASE LAW/ DOCTRINE:
Management prerogative refers to the right of an employer to regulate all aspects of employment, however it cannot be understood to include the right to
temporarily withhold salary/wages without the employees consent.
Although it cannot be determined with certainty whether Diaz worked for the entire period from 16-30 November, the consistent rule is that if doubt exists between
the evidence presented by the employer and that by the employee, the scales of justice must be titled in favor of the latter in line with the policy of the Labor Code
to afford protection to labor.
FACTS:
SHS is a corporation registered with the PHL Economic Zone Authority (PEZA). Hartmannshenn is the president; Schumacher is the treasurer of SHS.
Schumacher is also the VP of the European Chamber of Commerce of the PHL (ECCP), which is a separate entity from SHS. ECCP handles the payroll
requirements of SHS to simplify business operations thus, the wages of SHS employees are paid out by ECCP.
Diaz was hired by SHS as Manager for Business Development on probationary status from July 2005 to January 2006. Apart from his defined responsibilities,
Diaz was also instructed by Hartmannshenn to report at least 2 days every week to observe technical processes in manufacturing + learn about the companys
products. Hartmannshen was often abroad, hence communication was through electronic means.
Hartsmannshenn was disappointed at Diaz poor performance, as he failed to implement any measure to improve the productivity of SHS. Hartsmannshenn
would communicate disappointment and attempt to reach out to Diaz, but he could not be reached. As to plant visits, Diaz visited the plant only 8 times from
July 2005 to November 2005.
Hartmannshenn instructed the accountant to withhold Diaz salary, as he could not reach Diaz. Diaz eventually resigned, but wanted his P50,000 salary for the
period of 16-30 November. Hartsmannshenn agreed to release the salary, provided Diaz properly explains his behavior. However, Diaz failed to do so, and just
demanded his salary via email. To finally settle things, Petitioners were already willing to pay, and thus issued a check which Diaz failed to pick up.
Diaz filed a Complaint against Petitioners for illegal dismissal, non-payment of salaries and 13th month pay.
ISSUE(S):
W/N there was constructive dismissal
HELD:
YES. Respondent was forced to resign, therefore there is constructive dismissal. Therefore, Diaz was illegally dismissed. Petitioners are ordered to pay separation
pay, equivalent to one month salary.
RATIO:
Management prerogative refers to the right of an employer to regulate all aspects of employment, however it cannot be understood to include the right to
temporarily withhold salary/wages without the employees consent. Such would be contrary to Article 116 of the Labor Code. Any withholding of salary may
only be done through wage deductions in circumstances enumerated in Article 113 (ex. union dues not paid). In this case, Article 113 finds no application to
the facts.
Petitioners failed to prove that Diaz failed to work from 16-30 November (period in which salary was withheld). The nature of Diaz job requires him to work
outside the office, as he meets prospective clients. Although it cannot be determined with certainty whether Diaz worked for the entire period from 16-30
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November, the consistent rule is that if doubt exists between the evidence presented by the employer and that by the employee, the scales of justice must
be titled in favor of the latter in line with the policy of the Labor Code to afford protection to labor. Diaz is thus presumed to have worked the full period.
There is constructive dismissal if an act of clear discrimination/disdain by an employer becomes so unbearable on the part of the employee that it would
compel him to resign. Because Petitioners withheld Diaz salary, he was forced to resign.
Payment liberates the employee from what could be a highly oppressive work environment, and at the same time releases the employer from the obligation
of keeping in its employ a worker it no longer trusts.

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6. Racelis v. United Philippine Lines AUTHOR: De Leon
[G.R. No. Date] G.R. 198408 NOTES:
TOPIC: PONENTE: November 12, 2014
CASE LAW/ DOCTRINE: medical repatriation cases should be considered as an exception to Section 20 of the 2000 POEA-SEC. (In the case of work-related death of
the seafarer, during the term of his contract)
FACTS:
Conchita J. Racelis (spouse of Rodolfo L. Racelis), initiated a claim for death benefits pursuant to the International Transport Workers Federation-Collective
Bargaining Agreement (ITWF-CBA), of which her husband was a member. However, her claim was denied by the employer on the ground that the death was not
work-related as it was due to Brainstem (pontine) Cavernous Malformation, which was congenital and it had familiar strains according to a doctor. Thus,
complainant instituted a labor case against them.
Rodolfo L. Racelis was recruited and hired to serve as Demi Chef De Partie on board the vessel MS Prinsendam, with a basic monthly salary of US$799.55.5 The
Contract of Employment was for a term of four (4) months, extendible for another two (2) months upon mutual consent. After complying with the required pre-
employment medical examination where he was declared fit to work, Rodolfo joined the vessel on January 25, 2008. Prior thereto, Rodolfo was repeatedly
contracted by said respondents and was deployed under various contracts since December 17, 1985.
On his last employment, Rodolfo experienced severe pain in his ears and high blood pressure causing him to collapse while in the performance of his duties. He
consulted a doctor in Argentina and was medically repatriated on February 20, 2008 for further medical treatment. Upon arrival in Manila, he was immediately
brought to Medical City, Pasig City, where he was seen by a company-designated physician, Dr. Gerardo Legaspi, M.D. (Dr. Legaspi), and was diagnosed to be
suffering from Brainstem (pontine) Cavernous Malformation. He underwent surgery twice for the said ailment but developed complications and died on March 2,
2008.
The company denied the death benefits on the ground that it was not listed as occupational disease and the death occurred after the termination of the
employment. (repatriation terminated the employment)
ISSUE(S): W/N Recelis is entitled to death benefits

HELD: Yes

RATIO:
On the issue that it is not listed

While it is true that Brainstem (pontine) Cavernous Malformation is not listed as an occupational disease under Section 32-A of the 2000 POEA-SEC, Section 20 (B)
(4) of the same explicitly provides that [t[he liabilities of the employer when the seafarer suffers work-related injury or illness during the term of his contract are as
follows:(t)hose illnesses not listed in Section 32 of this Contract are disputably presumed as work related. In other words, the 2000 POEA-SEC has created a
disputable presumption in favor of compensability, saying that those illnesses not listed in Section 32 are disputably presumed as work-related.

On the issue that the death occurred after the termination of employment

If the Court were to apply the law (Section 20 of the 2000 POEA-SEC) based on a strict and literal construction, then the heirs of Nancing would stand to be barred
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from receiving any compensation for the latters death despite its obvious work-relatedness. Again, this is for the reason that the work-related death would, by mere
legal technicality, be considered to have occurred after the term of his employment on account of his medical repatriation. However, a strict and literal construction
of the 2000 POEA-SEC, especially when the same would result into inequitable consequences against labor, is not subscribed to in this jurisdiction. Concordant with
the States avowed policy to give maximum aid and full protection to labor as enshrined in Article XIII of the 1987 Philippine Constitution, contracts of labor, such as
the 2000 POEA-SEC, are deemed to be so impressed with public interest that the more beneficial conditions must be endeavoured in favor of the laborer. The rule
therefore is one of liberal construction.

The POEA Standard Employment Contract for Seamen is designed primarily for the protection and benefit of Filipino seamen in the pursuit of their employment on
board ocean-going vessels. Its provisions must be construed and applied fairly, reasonably and liberally in their favor as it is only then can its beneficent provisions
be fully carried into effect.

Applying the rule on liberal construction, the Court is thus brought to the recognition that medical repatriation cases should be considered as an exception to
Section 20 of the 2000 POEA-SEC. Accordingly, the phrase "work-related death of the seafarer, during the term of his employment contract" under Part A (1) of the
said provision should not be strictly and literally construed to mean that the seafarers work-related death should have precisely occurred during the term of his
employment. Rather, it is enough that the seafarers work-related injury or illness which eventually causes his death should have occurred during the term of his
employment.

It is by this method of construction that undue prejudice to the laborer and his heirs may be obviated and the State policy on labor protection be championed. For if
the laborers death was brought about (whether fully or partially) by the work he had harbored for his masters profit, then it is but proper that his demise be
compensated. Here, since it has been established that (a) the seafarer had been suffering from a work related injury or illness during the term of his employment, (b)
his injury or illness was the cause for his medical repatriation, and (c) it was later determined that the injury or illness for which he was medically repatriated was the
proximate cause of his actual death although the same occurred after the term of his employment, the above-mentioned rule should squarely apply. The present
claim for death benefits should be granted.

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7. TAMAYO V MANILA HOTEL AUTHOR: DELFIN
[GR NO L-8975] JUNE 29,1956 NOTES:
TOPIC: CONSTRUCTION IN FAVOR OF LABOR
PONENTE: REYES

CASE LAW/ DOCTRINE:
Article 1702 of the new Civil Code provides that in case of doubt, labor legislation shall be construed in favor of the laborer. As the article is expressly
intended to apply in case of doubt, it can have no application where, as in the present case, no doubt exists.
When Manila Hotel was leased to a private party on June 30, 1954, it laid off 265 employees. They paid their accumulated leaves as mandated by section
286 of the Administrative Code, as amended by Republic Act No. 611.
The said employees sued Manila Hotel shortly after for payment of accrued leave under the same code but was amended by RA 1081 on June 15, 1954, 15
days before they were separated from service.
Manila Hotel filed a MTD on the grounds of failure to state cause of action. The trial court dismissed the case.
The petitioners then filed an appeal.
ISSUE(S):
Whether or not the petitioners are entitled to the additional accrued leave pay as per the amendment in RA 1081?
HELD:
No, they are not entitled as RA 1081 as it did not have retroactive effect.
RATIO:
Article 4 of the new Civil Code provides that laws shall have no retroactive effect unless the contrary is provided. As Republic Act No. 1081 does not provide
that it is to have retroactive effect, it can only be given effect from the date of its approval.
the Bureau of Civil Service had construed and enforced Section 286 in the sense that after an officer or employee who had accumulated more than five
months' vacation and sick leave and has any leave accruing during the calendar year but not taken within that year was automatically forfeited.
Congress when enacting RA 1081 knew about the practice and interpretation of Section 286 by the Civil Service Bureau so upon the approval of this
amendatory law, no leave already earned in excess of the five-month maximum is creditable to of any officer or employee.
Those leave accrued would totally and absolutely be lost and legally non-existent. The excess could only be validated or restored by an express or clear
declaration by the law-maker. There is nothing in Republic Act No. 1081 from which an intention of this sort can be gathered.
NOTES:
SEC. 286. When vacation leave and sick leave may be taken. Vacation leave and sick leave shall be cumulative and any part thereof which may not be taken within
the calendar year in which earned may be carried over to the succeeding years, but whenever any officer, employee, or laborer of the Government of the Philippines
shall voluntarily resign or be separated from the service through no fault of his own, he shall be entitled to the commutation of all accumulated vacation and/or sick
leave to his credit: Provided, that the total vacation leave and sick leave that can accumulate to the credit of any officer or employee shall, in no cause, exceed
five months: Provided, further, That the proper Department Head may in his discretion authorize the commutation of the salary that would be received during the
period of vacation and sick leave of any appointed officer or employee or teacher or laborer of the Philippine Government and direct its payment on or before the
beginning of such leave from the fund out of which the salary would have been paid: Provided, furthermore, That no person whose leave has been commuted
following his separation from the service shall be reappointed or reemployed under the Government of the Philippines before the expiration of the leave commuted
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unless he first refunds the money value of the unexpired portion of the leave commuted.
Amended:
SEC. 286. When vacation leave and sick leave may be taken. Vacation leave and sick leave shall be cumulative and any part thereof which may not be taken within
the calendar year in which earned may be carried over to the succeeding years, but whenever any officer, employee, or laborer of the Government of the Philippines
shall voluntarily resign or be separated from the service through no fault of his own, he shall be entitled to the commutation of all accumulated vacation and/or sick
leave to his credit: Provided, That the total vacation leave and sick leave that can accumulate to the credit of any officers or employee shall in no case exceed ten
months: Provided further, That the proper Department Head may in his discretion authorize the commutation of the salary that would be received during the period
of vacation and sick leave of any appointed officer or employee or teacher or laborer of the Philippine Government and direct its payment on or before the
beginning of such leave from the fund out of which the salary would have been paid: Provided, furthermore, That no person whose leave has been commuted
following his separation from the service shall be reappointed or reemployed under the Government of the Philippines before the expiration of the leave commuted
unless he firsts refunds the money value of the unexpired portion of the leave commuted.
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8. G.R. No. L-52415 October 23, 1984 AUTHOR: Enriquez
NOTES:
INSULAR BANK OF ASIA AND AMERICA EMPLOYEES'
UNION (IBAAEU), petitioner,
vs.
HON. AMADO G. INCIONG, Deputy Minister, Ministry of
Labor and INSULAR BANK OF ASIA AND
AMERICA, respondents.
TOPIC: Construction in favor of Labor
PONENTE: MAKASIAR
FACTS:
Petitioner filed a complaint against the the Private Respondent (Insular Bank) for the payment of holiday pay before the NLRC, Regional Office No. IV in Manila.
Conciliation having failed, and upon the request of both parties, the case was certified for arbitration.

LA rendered a decision in the above-entitled case, GRANTING Petitioner's complaint for payment of holiday pay. He stated that the employees of respondent bank
were not paid their wages on unworked regular holidays as mandated by the Art. 208 of the Labor Code.

Insular Bank DID NOT APPEAL from the said decision. Instead, it complied with the order on the right to holiday pay.
PD 850 was then promulgated amending the provisions of the Labor Code on the right to holiday pay to read as follows:
Art. 94. Right to holiday pay. (a) EVERY WORKER shall be paid his regular daily wages during regular holidays, xxxxx;
Accordingly, its IRR was implemented. Sec 2 of which reads:
Sec. 2. Status of employees paid by the month. Employees who are uniformly paid by the month, irrespective of the number of
working days therein, with a salary of not less than the statutory or established minimum wage SHALL BE PRESUMED to be paid
for all days in the month whether worked or not.
Policy Instruction No. 9 was then issued by interpreting the IRR, pertinent portions of which read:
The ten (10) paid legal holidays law, to start with, is intended to benefit principally DAILY EMPLOYEES. In the case of monthly,
only those whose monthly salary did not yet include payment for the ten (10) paid legal holidays are entitled to the benefit.
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Under the rules implementing P.D. 850, this policy has been fully clarified to eliminate controversies on the entitlement of
monthly paid employees, The new determining rule is this: If the monthly paid employee is receiving not less than P240, the
maximum monthly minimum wage, and his monthly pay is uniform from January to December, he is presumed to be already paid
the ten (10) paid legal holidays. However, if deductions are made from his monthly salary on account of holidays in months
where they occur, then he is still entitled to the ten (10) paid legal holidays. ..."
By reason of the ruling laid down by the afore-cited rule implementing Article 94 of the Labor Code and by Policy Instruction No. 9, Insular Bank stopped the
payment of holiday pay to its employees as decided upon by the LA.
Petitioner then filed before the LA a motion for a writ of execution to enforce the LAs decision of August 25, 1975, wherein Insular Bank was ordered to pay the
Petitioner their daily wage for the unworked regular holidays.
Insular Bank filed an opposition:
That its refusal to pay the corresponding unworked holiday pay in accordance with the award of the LA dated August 25, 1975, is based on Policy
Instruction No. 9 which interpreted the rules implementing PD 850; and
That the said award is already repealed by P.D. 850 and by Policy Instruction No. 9, considering that its monthly paid employees are not receiving less than
P240.00 and their monthly pay is uniform from January to December, and that no deductions are made from the monthly salaries of its employees on
account of holidays in months where they occur.
LA issued an order enjoining the respondent bank to continue paying its employees their regular holiday pay on the following grounds:
That the judgment is already final and the findings which is found in the body of the decision as well as the dispositive portion thereof is res judicata or is
the law of the case between the parties; and
That since the decision had been partially implemented by the respondent bank, appeal from the said decision is no longer available
Insular Bank appealed before the NLRC. The latter AFFIRMED LAs decision. Hence, Insular Bank appealed before the Public Respondent, Hon. Inciong, who is the
Deputy Minister of Labor.
Hon. Inciong ruled in favour of Insular Bank and set aside NLRCs decision which affirmed the LAs decision. Hence, Petitioner filed a petition for certiorari citing
grave abuse of discretion on the part of Hon. Inciong.
ISSUE(S): Whether Sec. 2 of the IRR and Policy Instruction No. 9 is valid

HELD: No.

RATIO:
Sec. 2 of the IRR and Policy Instruction No. 9 are null and void since instead of clarifying the Labor Code's provisions on holiday pay, they in effect amended them
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by enlarging the scope of their exclusion.

Art. 82 of the Labor Code, which states the coverage of the holiday pay benefit provides:
Art. 82. Coverage. The provision of this Title shall apply to employees in all establishments and undertakings, whether for
profit or not, but not to government employees, managerial employees, field personnel members of the family of the employer
who are dependent on him for support domestic helpers, persons in the personal service of another, and workers who are paid
by results as determined by the Secretary of Labor in appropriate regulations.
Based from Art. 94 (see above) of the LC and Art. 82, it is clear that monthly paid employees ARE NOT EXCLUDED from the benefits of holiday pay.
However, the IRR on holiday pay excluded monthly paid employees by inserting, under Sec. 2, which provides that: "employees who are uniformly paid by the
month, irrespective of the number of working days therein, with a salary of not less than the statutory or established minimum wage shall be presumed to be paid
for all days in the month whether worked or not."
It is elementary in the rules of statutory construction that when the language of the law is clear and unequivocal the law must be taken to mean exactly what it
says.
In the case at bar, the provisions of the Labor Code on the entitlement to the benefits of holiday pay are clear and explicit - it provides for both the coverage of
and exclusion from the benefits.
In Policy Instruction No. 9, the then Secretary of Labor went as far as to categorically state that the benefit is principally intended for daily paid employees, when
the law clearly states that every worker shall be paid their regular holiday pay.
This is a flagrant violation of the mandatory directive of Article 4 of the Labor Code, which states that "All doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor." Moreover, it shall always be presumed that the
legislature intended to enact a valid and permanent statute which would have the most beneficial effect that its language permits.
Obviously, the Secretary (Minister) of Labor had exceeded his statutory authority granted by Article 5 of the Labor Code authorizing him to promulgate the
necessary implementing rules and regulations.
CASE LAW/ DOCTRINE:

All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of
labor.

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09 Insular Bank of Asia and America AUTHOR: Garcia
Employees Union (IBAAEU) vs. Inciong NOTES:
[G.R. No. L-52415 October 23, 1984] I included here the cited codal provisions in the case. Pero basahin niyo parin Codal niyo para sure J
TOPIC: Rule-making power, limitations Art. 94 Right to holiday pay (a) Every worker shall be paid his regular daily wages during regular holidays, except
PONENTE: Makasiar, J in retail and service establishments regularly employing less than 10 workers; (b) The employer may require an
employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular
rate; xxx
Art. 82. Coverage The provision of this Title shall apply to employees in all establishments and undertakings,
whether for profit or not, but not to government employees, managerial employees, field personnel, members of
the family of the employer who are dependent on him for support, domestic helpers, persons in the personal
service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate
regulations.
CASE LAW/ DOCTRINE:
The power of administrative officials to promulgate rules in the administration of the statute, necessarily limited to what is provided for in the legislative
enactment where an administrative order betrays inconsistency or repugnancy to the provisions of the Act, the mandate of the Act must prevail and must
be followed.
An administrative agency cannot amend an act of Congress
FACTS:
IBAAEU filed a complaint against Insular Bank of Asia and America (Bank) for the payment of holiday pay before the Department of Labor, NLRC, Regional Office
No. IV in Manila.
Labor Arbiter Soriano granted IBAAEUs complaint for payment of holiday pay.
The Bank did not appeal from the said decision. Instead, it complied with the order of Soriano.
PD No. 850 was promulgated amending among others, the provisions of the Labor Code on the right to holiday pay.
By authority of Art. 5 of the Labor Code, the Department of Labor promulgated the rules and regulations for the implementation of holidays with pay.
o Sec. 2. Status of employees paid by the month. Employees who are uniformly paid by the month, irrespective of the number of working days
therein, with a salary of not less than the statutory or established minimum wage shall be presumed to be paid for all days in the month
whether worked or not.
For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve.
Policy Instruction No.9 was issued by the Secretary of Labor.
o xxx
The new determining rule is this: If the monthly paid employee is receiving not less than P240, the maximum monthly minimum wage, and his
monthly pay is uniform from January to December, he is presumed to be already paid the ten (10) paid legal holidays. However, if deductions
are made from his monthly salary on account of holidays in months where they occur, then he is still entitled to the ten (10) paid legal holidays.
In light of this, the Bank stopped the payment of holiday pay to all its employees.
IBAAEU filed a motion for writ of execution. The Bank filed an opposition to the motion for a writ of execution claiming among others that its refusal is based on
Policy Instruction no. 9. LA Soriano issued an order enjoining the respondent bank to continue paying its employees their regular holiday pay. The Bank
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appealed to the NLRC.
NLRC dismissed the appeal. The bank filed a motion for reconsideration/appeal with the Office of the Minister of Labor. The Office of the Minister of Labor,
through Deputy Minister Inciong issued an order setting aside the decision of NLRC.
ISSUE(S):
Whether or not Section 2, Rule IV, Book III of the implementing rules and Policy Instruction no. 9 are valid
HELD:
No.
RATIO:
In the guise of clarifying the Labor Codes provisions on holiday pay, they in effect amended them by enlarging the scope of their exclusion. The coverage
and scope of exclusion of the Labor Codes holiday pay provisions is spelled out under Art. 82 of the Labor Code. It is clear that monthly paid employees are
not excluded from the benefits of holiday pay. However, the implementing rules on holiday pay promulgated by the Secretary of Labor excludes monthly
paid employees from the said benefits by inserting, under Rule IV, Book II of the implementing rules, Section 2.
It is elementary in the rules of statutory construction that when the language of the law is clear and unequivocal the law must be taken to mean exactly
what it says.
This is a flagrant violation of the mandatory directive of Article 4 of the Labor Code, which states that All doubts in the implementation and interpretation
of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.
DISSENTING/CONCURRING OPINION(S):

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Bartolome vs. Social Security System and Scanmar Maritime Services Inc. AUTHOR: Tristan
[G.R. No.181393, July 28, 2009] NOTES:
TOPIC: Rule-making power, limitations PONENTE: Velasco
CASE LAW/ DOCTRINE:
Rule-making power must be confined to details for regulating the mode or proceedings in order to carry into effect the law as it has been enacted, and it cannot be
extended to amend or expand the statutory requirements or to embrace matters not covered by the statute. Administrative regulations must always be in harmony
with the provisions of the law because any resulting discrepancy between the two will always be resolved in favor of the basic law.
FACTS:
John Colcol (John), born on June 9, 1983, was employed as an electrician by Scanmar Maritime Services, Inc., on board the vessel Maersk Danville, since
February 2008. As such, he was enrolled under the government's Employees' Compensation Program (ECP). On June 2, 2008, an accident occurred on board
the vessel whereby steel plates fell on John, which led to his untimely death the following day.

John was, at the time of his death, childless and unmarried. Thus, petitioner Bernardina P. Bartolome, Johns biological mother and, allegedly, sole remaining
beneficiary, filed a claim for death benefits under PD 626 with the Social Security System (SSS). SSS La Union office, in a letter addressed to petitioner,
denied the claim, because petitioner Bartolome is no longer considered as the parent of JOHN COLCOL as he (John) was legally adopted by CORNELIO
COLCOL based on documents submitted.

Bartolome appealed to the Employees Compensation Commission (ECC), which affirmed the ruling of the SSS, which led to this petition.

SSS Contention reiterated the ECC Decision: That it is Cornelio who qualifies as Johns primary beneficiary, not Bartolome. Neither would Bartolome qualify
as Johns secondary beneficiary even if it were proven that Cornelio has already passed away. Because the dependent parent referred to under Article 167 (j)
of P.D. 626, as amended (Labor Code) relates to the legitimate parent of the covered member, as provided for by Rule XV, Section 1 (c) (1) of the Amended
Rules on Employees Compensation. The appellant is not considered a legitimate parent of the deceased, having given up the latter for adoption to Mr.
Cornelio C. Colcol.
ISSUE (S): WoN petitioner Bartolome is entitled to the death benefits claim in view of Johns work-related demise.
HELD: Yes. Petition by Bartolome is GRANTED. Bartolome won. See (2) below for topic related ratio.

RATIO:
1. ECC had overlooked a crucial piece of evidence offered by the petitioner Cornelios death certificate. Based on Cornelios death certificate, it appears that Johns

adoptive father died on October 26, 1987, or only less than three (3) years since the decree of adoption on February 4, 1985, which attained finality. As such, it was
error for the ECC to have ruled that it was not duly proven that the adoptive parent, Cornelio, has already passed away. (Not topic related)
2. The rule limiting death benefits claims to the legitimate parents is contrary to law. SC examined the Implementing Rules and Regulations of ECC and concluded
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that it is unauthorized administrative legislation for unduly expanding Art. 167 (j) of the Labor Code. (See below)
The pertinent provision, in this regard, is Article 167 (j) of the Labor Code, as amended, which reads:
ART. 167. Definition of terms: (j) 'Beneficiaries' means the dependent spouse until he remarries and dependent children, who are the primary beneficiaries. In their
absence, the dependent parents and subject to the restrictions imposed on dependent children, the illegitimate children and legitimate descendants who are the
secondary beneficiaries; Provided, that the dependent acknowledged natural child shall be considered as a primary beneficiary when there are no other dependent
children who are qualified and eligible for monthly income benefit.
Concurrently, pursuant to the succeeding Article 177(c) supervising the ECC "To approve rules and regulations governing the processing of claims and the settlement
of disputes arising therefrom as prescribed by the System," the ECC has issued the Amended Rules on Employees Compensation, interpreting the above-cited
provision as follows:
RULE XV BENEFICIARIES: SECTION 1. Definition. (a) Beneficiaries shall be either primary or secondary, and determined at the time of employees death.
XXXXXX
(c) The following beneficiaries shall be considered secondary:
(1) The legitimate parents wholly dependent upon the employee for regular support;
(2) The legitimate descendants and illegitimate children who are unmarried, not gainfully employed, and not over 21 years of age, or over 21 years of age provided
that he is incapacitated and incapable of self - support due to physical or mental defect which is congenital or acquired during minority.
Rule XV, Sec. 1(c)(1) of the Amended Rules on Employees Compensation deviates from the clear language of Art. 167 (j) of the Labor Code, as amended. Examining
the Amended Rules on Employees Compensation in light of the Labor Code, as amended, it is at once apparent that the ECC indulged in an unauthorized
administrative legislation. In net effect, the ECC read into Art. 167 of the Code an interpretation not contemplated by the provision. Pertinent in elucidating on this
point is Article 7 of the Civil Code of the Philippines, part of which reads: Administrative or executive acts, orders and regulations shall be valid only when they are
not contrary to the laws or the Constitution.
Rule-making power must be confined to details for regulating the mode or proceedings in order to carry into effect the law as it has been enacted, and it cannot
be extended to amend or expand the statutory requirements or to embrace matters not covered by the statute. Administrative regulations must always be in
harmony with the provisions of the law because any resulting discrepancy between the two will always be resolved in favor of the basic law.
Guided by this doctrine, We find that Rule XV of the Amended Rules on Employees Compensation is patently a wayward restriction of and a substantial
deviation from Article 167 (j) of the Labor Code when it interpreted the phrase "dependent parents" to refer to "legitimate parents." The term "parents" in the
phrase "dependent parents" in Article 167 (j) of the Labor Code is used and ought to be taken in its general sense and cannot be unduly limited to "legitimate
parents" as what the ECC did. The phrase "dependent parents" should, therefore, include all parents, whether legitimate or illegitimate and whether by nature
or by adoption. When the law does not distinguish, one should not distinguish. Plainly, "dependent parents" are parents, whether legitimate or illegitimate,
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biological or by adoption, who are in need of support or assistance.
Petitioner qualifies as Johns dependent parent. Nowhere in the law nor in the rules does it say that "legitimate parents" pertain to those who exercise parental
authority over the employee enrolled under the ECP. It was only in the assailed Decision wherein such qualification was made. In addition, assuming arguendo that
the ECC did not overstep its boundaries in limiting the adverted Labor Code provision to the deceaseds legitimate parents, and that the commission properly
equated legitimacy to parental authority, petitioner can still qualify as Johns secondary beneficiary.
Also, when Cornelio, in 1985, adopted John, then about two (2) years old, petitioners parental authority over John was severed. However, lest it be overlooked, one
key detail the ECC missed, aside from Cornelios death, was that when the adoptive parent died less than three (3) years after the adoption decree, John was still a
minor, at about four (4) years of age. Johns minority at the time of his adopters death is a significant factor in the case at bar. Under such circumstance, parental
authority should be deemed to have reverted in favor of the biological parents.

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11 Sim v NLRC AUTHOR: Laureta
[G.R. No. Date] G.R. NO. 157376 NOTES:
TOPIC: Applicability of Labor Code to Overseas Workers
PONENTE:
CASE LAW/ DOCTRINE:
Aticle 217 of the Labor Code provides for the jurisdiction of the Labor Arbiter and the National Labor Relations Commission, viz.:

ART. 217. Jurisdiction of Labor Arbiters and the Commission. (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of
stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wage, rates of pay, hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount of exceeding five thousand pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
(b) The commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
FACTS:
Corazon Sim filed a case for illegal dismissal with the Labor Arbiter, alleging that she was initially employed by Equitable PCI-Bank (respondent) in 1990 as Italian
Remittance Marketing Consultant to the Frankfurt Representative Office. Eventually, she was promoted to Manager position, until September 1999, when she
received a letter from Remegio David -- the Senior Officer, European Head of PCIBank, and Managing Director of PCIB- Europe -- informing her that she was
being dismissed due to loss of trust and confidence based on alleged mismanagement and misappropriation of funds.
Respondent denied any employer-employee relationship between them, and sought the dismissal of the complaint.
LA Dismissed: It should be stressed at this juncture that the labor relations system in the Philippines has no extra-territorial jurisdiction.
On appeal, the National Labor Relations Commission (NLRC) affirmed the Labor Arbiter's Decision and dismissed petitioner's appeal for lack of merit.
Without filing a motion for reconsideration with the NLRC, petitioner went to the Court of Appeals via a petition for certiorari under Rule 65
CA dismissed the petition due to petitioner's non-filing of a motion for reconsideration with the NLRC.
Hence, the present recourse under Rule 45

ISSUE(S):
W/N filing a motion for reconsideration with the NLRC would be merely an exercise in futility and useless? NO
W/N dismissal was proper? YES
W/N LA had jurisdiction? YES
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HELD: DENIED

RATIO:
MR should have been filed. Court finds no compelling reason to relax the rule on the filing of a motion for reconsideration prior to the filing of a petition for
certiorari (since dismissal was proper)
It must be emphasized that a writ of certiorari is a prerogative writ, never demandable as a matter of right, never issued except in the exercise of judicial
discretion. Petitioner may not arrogate to himself the determination of whether a motion for reconsideration is necessary or not. To dispense with the
requirement of filing a motion for reconsideration, petitioner must show a concrete, compelling, and valid reason for doing so, which petitioner failed to
do.
The legality of petitioner's dismissal hinges on the question of whether there was an employer-employee relationship, which was denied by respondent;
and, if in the affirmative, whether petitioner, indeed, committed a breach of trust and confidence justifying her dismissal. These are mixed questions of fact
and law and, as such, do not fall within the exception from the filing of a motion for reconsideration.
Dismissal was proper
The rule is that the Court is bound by the findings of facts of the Labor Arbiter or the NLRC
Petitioner does not deny having withdrawn the amount of P3,000,000.00 lire from the bank's account. What petitioner submits is that she used said amount
for the Radio Pilipinas sa Roma radio program of the company. Respondent, however, countered that at the time she withdrew said amount, the radio
program was already off the air. Respondent is a managerial employee. Thus, loss of trust and confidence is a valid ground for her dismissal. The mere
existence of a basis for believing that a managerial employee has breached the trust of the employer would suffice for his/her dismissal.
LA HAS JURISDICTION
See Art 217 above
Section 10 of Republic Act (R.A.) No. 8042, or the Migrant Workers and Overseas Filipinos Act of 1995, provides:
SECTION 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC)
shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of
an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral,
exemplary and other forms of damages.
Also, Section 62 of the Omnibus Rules and Regulations Implementing R.A. No. 8042[19] provides that the Labor Arbiters of the NLRC shall have the
original and exclusive jurisdiction to hear and decide all claims arising out of employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages, subject to the rules
and procedures of the NLRC.
Under these provisions, it is clear that labor arbiters have original and exclusive jurisdiction over claims arising from employer-employee relations,
including termination disputes involving all workers, among whom are overseas Filipino workers.
Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social legislation, contract
stipulations to the contrary notwithstanding. This pronouncement is in keeping with the basic public policy of the State to afford protection
to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers
and employers.

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12. CASE TITLE: SAMEER OVERSEAS PLACEMENT AGENCY, INC., Petitioner, v. AUTHOR: Pineda (edited Lauretas case, with her permission)
JOY C. CABILES, Respondent. NOTES: This is a repeated case. I edited Michelles digest on the facts. The ratio is
G.R. No. 170139, August 05, 2014 different though.
TOPIC: overseas workers
PONENTE: LEONEN, J
CASE LAW/ DOCTRINE: The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality
of employment opportunities for all.
The Court is not unaware of the many abuses suffered by our overseas workers in the foreign land where they have ventured, usually with heavy hearts, in pursuit of
a more fulfilling future. Breach of contract, maltreatment, rape, insufficient nourishment, sub-human lodgings, insults and other forms of debasement, are only a
few of the inhumane acts to which they are subjected by their foreign employers, who probably feel they can do as they please in their own country. While these
workers may indeed have relatively little defense against exploitation while they are abroad, that disadvantage must not continue to burden them when they return
to their own territory to voice their muted complaint. There is no reason why, in their very own land, the protection of our own laws cannot be extended to them in
full measure for the redress of their grievances.
FACTS:
Sameer Overseas Placement Agency, Inc., is a recruitment and placement agency
Joy C. Cabiles applied for quality control job in Taiwan, one-year employment contract for a monthly salary of NT$15,360.00. In Taiwan she was asked to work
as cutter.
She alleged that Sameer required her to pay a placement fee of P70,000.00 when she signed the employment contract.
Cabiles was eployed to work for Taiwan Wacoal, Co. Ltd. (Wacoal) on June 26, 1997.
Sameer Overseas Placement Agency claims that on July 14, 1997, a certain Mr. Huwang from Wacoal informed Joy, without prior notice, that she was
terminated and that she should immediately report to their office to get her salary and passport. She was asked to prepare for immediate repatriation. Joy
claims that she was told that from June 26 to July 14, 1997, she only earned a total of NT$9,000.15 According to her, Wacoal deducted NT$3,000 to cover her
plane ticket to Manila.
Complaint with the National Labor Relations Commission against petitioner and Wacoal. Joy claimed that she was illegally dismissed, asked for the return of her
placement fee, the withheld amount for repatriation costs, payment of her salary for 23 months as well as moral and exemplary damages. She identified
Wacoal as Sameer Overseas Placement Agencys foreign principal.
Sameer alleged that termination was due to her inefficiency, negligence in her duties, and her failure to comply with the work requirements, denied asking for
placement fee as shown by OR amounting to P20,360.00. Petitioner added that Wacoal's accreditation with petitioner had already been transferred to the
Pacific Manpower & Management Services, Inc. (Pacific) as of August 6, 1997and asserts that it was already substituted by Pacific Manpower.
National Labor Relations Commission declared that Joy was illegally dismissed. It awarded respondent only three (3) months worth of salary in the amount of
NT$46,080, the reimbursement of the NT$3,000 withheld from her, and attorneys fees of NT$300. The CA affirmed NLRC.
ISSUE(S):
W/N Joy was illegally dismissed? YES
W/N 3 months salary award is correct? NO. Unconstitutional provision.
HELD:
WHEREFORE, the petition is DENIED. The decision of the Court of Appeals is AFFIRMED with modification. Petitioner Sameer Overseas Placement Agency is ORDERED
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to pay respondent Joy C. Cabiles the amount equivalent to her salary for the unexpired portion of her employment contract at an interest of 6% per annum from the
finality of this judgment. Petitioner is also ORDERED to reimburse respondent the withheld NT$3,000.00 salary and pay respondent attorneys fees of NT$300.00 at
an interest of 6% per annum from the finality of this judgment.
The clause, or for three (3) months for every year of the unexpired term, whichever is less in Section 7 of Republic Act No. 10022 amending Section 10 of Republic
Act No. 8042 is declared unconstitutional and, therefore, null and void.
RATIO:
Indeed, employers have the prerogative to impose productivity and quality standards at work. This prerogative, however, should not be abused. It is "tempered
with the employees right to security of tenure, as guaranteed by the Constitution.
Employees are not stripped of their security of tenure when they move to work in a different jurisdiction. With respect to the rights of overseas Filipino workers,
we follow the principle of lex loci contractus.
First, established is the rule that lex loci contractus (the law of the place where the contract is made) governs in this jurisdiction. There is no question that the
contract of employment in this case was perfected here in the Philippines. Therefore, the Labor Code, its implementing rules and regulations, and other laws
affecting labor apply in this case. Furthermore, settled is the rule that the courts of the forum will not enforce any foreign claim obnoxious to the forums public
policy.
This public policy should be borne in mind in this case because to allow foreign employers to determine for and by themselves whether an overseas contract
worker may be dismissed on the ground of illness would encourage illegal or arbitrary pretermination of employment contracts.
The provisions of the Constitution as well as the Labor Code which afford protection to labor apply to Filipino employees whether working within the Philippines
or abroad. Such protection includes compliance with the twin requirements of notice and hearing. By our laws (which apply because of lex loci contractus),
overseas Filipino workers (OFWs) may only be terminated for a just or authorized cause and after compliance with procedural due process requirements.
Inefficiency would have been just cause for dismissal, had Petitioners been able to prove such. To show that dismissal resulting from inefficiency in work is valid,
it must be shown that: 1) the employer has set standards of conduct and workmanship against which the employee will be judged; 2) the standards of conduct
and workmanship must have been communicated to the employee; and 3) the communication was made at a reasonable time prior to the employees
performance assessment.
Petitioners dismissal of Cabiles was without due process. A valid dismissal requires both a valid cause and adherence to the valid procedure of dismissal. The
employer is required to give the charged employee at least two written notices before termination. One of the written notices must inform the employee of the
particular acts that may cause his or her dismissal. The other notice must "[inform] the employee of the employers decision." Aside from the notice requirement,
the employee must also be given "an opportunity to be heard.
Section 10 of Republic Act No. 8042,otherwise known as the Migrant Workers and Overseas Filipinos Act of1995, states that overseas workers who were
terminated without just, valid, or authorized cause "shall be entitled to the full reimbursement of his placement fee with interest of twelve (12%) per annum,
plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less." The Court
reiterated the unconstitutionality of the or for three months clause, as it is violates the equal protection clause. Limiting wages that should be recovered by an
illegally dismissed overseas worker to three months is both a violation of due process and the equal protection clauses of the Constitution. The adoption of the
reinstated clause in Republic Act No. 8042 subjected the money claims of illegally dismissed overseas workers with an unexpired term of at least a year to a cap
of three months worth of their salary. There was no such limitation on the money claims of illegally terminated local workers with fixed-term employment.
Should the Court allow for the 3 months limitation lesser protection is afforded the OFW, not only because of the lessened recovery afforded him or her by
operation of law, but also because this same lessened recovery renders a wrongful dismissal easier and less onerous to undertake; the lesser cost of dismissing a
Filipino will always be a consideration a foreign employer will take into account in termination of employment decisions.
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PAUL V. SANTIAGO, petitioner, vs. CF SHARP CREW MANAGEMENT, AUTHOR: PELAYO
INC., respondent. NOTES:
G.R. No. 162419 July 10, 2007
TOPIC: Seafarers PONENTE: Tinga, J.
CASE LAW/ DOCTRINE:
A distinction must be made between the perfection of the employment contract and the commencement of the employer-employee relationship. The perfection of
the contract, which in this case coincided with the date of execution thereof, occurred when petitioner and respondent agreed on the object and the cause, as well
as the rest of the terms and conditions therein. The commencement of the employer-employee relationship, as earlier discussed, would have taken place had
petitioner been actually deployed from the point of hire. Thus, even before the start of any employer-employee relationship, contemporaneous with the perfection
of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the erring party. Thus, if
the reverse had happened, that is the seafarer failed or refused to be deployed as agreed upon, he would be liable for damages.
EMERGENCY: WON the seafarer, who was prevented from leaving the port of Manila and refused deployment without valid reason but whose POEA-approved
employment contract provides that the employer-employee relationship shall commence only upon the seafarers actual departure from the port in the point of
hire, is entitled to relief?
FACTS:
PETITIONER Santiago had been working as a seafarer for RESPONDENT Smith Bell Management, Inc for about 5 years.
February 3, 1998, petitioner signed a new contract of employment with respondent, with the duration of 9 months. (Renewed contract)
He was assured of a monthly salary of US$515.00, overtime pay and other benefits.
The following day the contract was approved by the Philippine Overseas Employment Administration (POEA).
Petitioner was to be deployed on board the "MSV Seaspread"(HAHAHA) which was scheduled to leave the port of Manila for Canada on February 13, 1998.
A week before the departure, Capt. Pacifico Fernandez, Vice President of Respondent, sent a facsimile message to the captain of "MSV Seaspread," which
reads:
a. I received a phone call today from the wife of Paul Santiago in Masbate asking me not to send her husband to MSV Seaspread anymore. Other
callers who did not reveal their identity gave me some feedbacks that Paul Santiago this time if allowed to depart will jump ship in Canada like his
brother Christopher Santiago, O/S who jumped ship from the C.S. Nexus in Kita-kyushu, Japan last December, 1997.
To this message the captain of "MSV Seaspread" replied:
a. Sino to? (Disregard this)
b. Many thanks for your advice concerning P. Santiago, A/B. Please cancel plans for him to return to Seaspread.
On 9 February 1998, petitioner was thus told that he would not be leaving for Canada anymore, but he was reassured that he might be considered for
deployment at some future date.
Petitioner filed a complaint for illegal dismissal, damages, and attorney's fees against respondent and its foreign principal, Cable and Wireless (Marine) Ltd.
LA: Respondent Liable. Respondent appealed to NLRC.
NLRC: There is no employer-employee relationship between petitioner and respondent because under the Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean Going Vessels (POEA Standard Contract), the employment contract shall commence upon actual departure
of the seafarer from the airport or seaport at the point of hire and with a POEA-approved contract.
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Respondent argues: His employment with respondent did not commence because his deployment was withheld for a valid reason.

ISSUE(S):
WON there was an employer-employee relationship between Petitioner and Respondent?
WON Santiago entitled to relief?
HELD:

RATIO:
1. Considering that petitioner was not able to depart from the airport or seaport in the point of hire, the employment contract did not commence, and no
employer-employee relationship was created between the parties.
2. BUT!!!! A distinction must be made between the perfection of the employment contract and the commencement of the employer-employee relationship.
3. The perfection of the contract, which in this case coincided with the date of execution thereof, occurred when petitioner and respondent agreed on the
object and the cause, as well as the rest of the terms and conditions therein.
4. The commencement of the employer-employee relationship, as earlier discussed, would have taken place had petitioner been actually deployed from the
point of hire.
5. Thus, even before the start of any employer-employee relationship, contemporaneous with the perfection of the employment contract was the birth of
certain rights and obligations, the breach of which may give rise to a cause of action against the erring party.
6. Thus, if the reverse had happened, that is the seafarer failed or refused to be deployed as agreed upon, he would be liable for damages.
7. Respondents act of preventing petitioner from departing the port of Manila and boarding "MSV Seaspread" constitutes a breach of contract, giving rise to
petitioners cause of action. Respondent unilaterally and unreasonably reneged on its obligation to deploy petitioner and must therefore answer for the
actual damages he suffered.
DISSENTING/CONCURRING OPINION(S): N/A

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13. National Service Corporation v. NLRC AUTHOR: Mendoza
[G.R. No. Date] No. L-69870. November 29, 1988 NOTES:
TOPIC: Application of Article 6 of the Labor Code on Employees Eugenia Credo- Credo
PONENTE: Padilla National Service Corporation- NASECO
Sisinio Lloren (NASECO Manager)- Lloren
Arturo Perez (Acting General Manager NASECO- Perez
CASE LAW/ DOCTRINE:
Ruling in National Housing Corporation vs. Juco that employees of government-owned or controlled corporations are governed by the civil service law should not
be given retroactive effect.It would appear that, in the interest of justice, the holding in said case should not be given retroactive effect, that is, to cases that
arose before its promulgation on 17 January 1985. To do otherwise would be oppressive to Credo and other employees similarly situated, because under the
same 1973 Constitution but prior to the ruling in National Housing Corporation vs. Juco, this Court had recognized the applicability of the Labor Code to, and the
authority of the NLRC to exercise jurisdiction over, disputes involving terms and conditions of employment in government-owned or controlled corporations,
among them, the National Service Corporation (NASECO

Employer must afford the employee concerned ample opportunity to be heard and to defend himself. Likewise, a reading of the guidelines in consonance with the
express provisions of law on protection to labor (which encompasses the right to security of tenure) and the broader dictates of procedural due process necessarily
mandate that notice of the employers decision to dismiss an employee, with reasons therefor, can only be issued after the employer has afforded the employee
concerned ample opportunity to be heard and to defend himself.

Prerogative of management to dismiss or lay off an employee must be done without abuse of discretion, for what is at stake is not only petitioners position but also
his means of livelihood. (Kapisanan ng Manggagawa sa Camara Shoes vs. Camara Shoes, 111 SCRA 477)
While petitioner was never notified nor heard in a case decided against him, remand of records below is necessary to afford him a full and fair hearing. (Alvarez vs.
Ople, 119 SCRA 378.)

FACTS:
Credo was an employee of the National Service Corporation (NASECO), a domestic corporation which provides security guards as well as messengerial, janitorial and
other similar manpower services to the Philippine National Bank and its agencies. She was first employed with NASECO as a lady guard on 18 July 1975. Through the
years, she was promoted to Clerk Typist, then Personnel Clerk until she became Chief of Property and Records.

Credo was administratively charged by Lloren, because she did not comply regarding certain entry procedures in the companys Statement of Billings Adjustment.
The allegation stated that Credo did not comply with Llorens instructions to place some corrections/additional remarks in the Statement of Billings Adjustment; and
when was called by Lloren to his officeto explain further the said instructions, she showed resentment and behaved in a scandalous manner by shouting and
uttering remarks of disrespect in the presence of her co-employees.

Credo was placed on Forced Leave status. Before the expiration of said 15-day leave, Credo filed a complaint for placing her on forced leave, without due process.
Later, NASECOs Committee on Personnel Affairs deliberated and evaluated a number of past acts of misconduct or infractions attributed to her and recommended
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Credos termination, with forfeiture of benefits.

Credo was called again to Perez to be informed that she was being charged with certain offenses but failed to appear. Due to her failure to do so, she was handed a
Notice of Termination. Credo filed a supplemental complaint for illegal dismissal alleging absence of just or authorized cause for her dismissal and lack of
opportunity to be heard.

Labor Arbiters decision: dismissed Credos complaint, and ordrered NASECO to pay Credo separation pay.
NLRC: ordered NASECO to reinstate Credo to her former position, or substantially equivalent position

ISSUE(S):
Whether or not Credo was illegally dismissed and her Right to Due Process/ to be heard was violated by NASECO.

HELD:
Yes.

RATIO:
Ruling in National Housing Corporation vs. Juco that employees of government-owned or controlled corporations are governed by the civil service law should not
be given retroactive effect.It would appear that, in the interest of justice, the holding in said case should not be given retroactive effect, that is, to cases that
arose before its promulgation on 17 January 1985. To do otherwise would be oppressive to Credo and other employees similarly situated, because under the
same 1973 Constitution but prior to the ruling in National Housing Corporation vs. Juco, this Court had recognized the applicability of the Labor Code to, and the
authority of the NLRC to exercise jurisdiction over, disputes involving terms and conditions of employment in government-owned or controlled corporations,
among them, the National Service Corporation (NASECO

The guidelines for dismissal requires two (2) written notices of dismissal before a termination of employment can be legally effected. These are the notice which
apprises the employee of the particular acts or omissions for which his dismissal is sought and the subsequent notice which informs the employee of the employers
decision to dismiss him.

Section 2. Notice of dismissal.Any employer who seeks to dismiss a worker shall furnish him a written notice stating the particular acts or omission constituting
the grounds for his dismissal.

In the case at bar, NASECO did not comply with these guidelines in effecting Credos dismissal. Although she was apprised and given the chance to explain her side
of the charges filed against her, this chance was given so perfunctorily, thus rendering illusory Credos right to security of Credo was not given ample opportunity to
be heard and to defend herself is evident from the fact that the compliance with the injunction to apprise her of the charges filed against her and to afford her a
chance to prepare for her defense was dispensed in only a day. This is not effective compliance with the legal requirements aforementioned.

The fact also that the Notice of Termination of Credos employment (or the decision to dismiss her) was dated 24 November 1983 and made effective 1 December
1983 shows that NASECO was already bent on terminating her services when she was informed on 1 December 1983 of the charges against her, and that any hearing
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which NASECO thought of affording her after 24 November 1983 would merely be pro forma or an exercise in futility.
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14 THE DEPARTMENT OF HEALTH (DR. JOSE N. RODRIGUEZ MEMORIAL AUTHOR: PAGCALIWAGAN
HOSPITAL) V NLRC NOTES:
G.R. No. 113212 December 29, 1995
TOPIC: Sources of Labor Law; The Labor Code and its Implementing Rules;
Applicability; Government Employees
PONENTE: Hermosisima, Jr., J.
CASE LAW/ DOCTRINE:
The DJRMH is maintained as a public medical center and health facility attached to the DOH, clearly an agency of the Government which thus falls within the
scope and coverage of the Civil Service Law. As the central personnel agency of the Government, the Civil Service Commission administers the Civil Service Law. It
is, therefore, the single arbiter of all contests relating to the civil service.
FACTS:
Private Respondent LAUR was a patient of then Tala Leprosarium (now Jose N. Rodriguez Memorial Hospital or DJRMH)
Was admitted for treatment of leprosy (1951)
Was discharged after he was deemed to have been cured of his affliction (1956)
1975 LAUR was employed at DJRMH as a patient-assistant by Hospital Director, Dr. Runez, upon recommendation of Barangay Captain of Tala.
He was specifically assigned as a member of Patient-Assistant Police Force
Accorded compensation of P110, and was gradually increase through the years, depending upon availability of funds
Salary was chargeable to the maintenance and operating expenses of hospital
1989 Complaints for Alarm and Scandal, Oral Defamation, Grave Threats, Concealment of Deadly Weapon, Violation of the Code of Ethics of Policemen, and
Conduct Unbecoming of a Police Officer were filed against LAUR, pursuant to a report made by his Chief of Police
Found guilty, suspended for 60 days with a stern warning that a repetition would result in his outright dismissal by Petitioner Dr. Viardo (Chief of
Hospital)
1990 LAUR got involved in the mauling of Bondoc, along with 2 policemen, Corporal Ferrer and Patrolman Berdon
His account of the incident is to the effect that while he and his companions were manning their posts at the hospital administrations building, a group
of 12 young boys engaged another group of 4 youngsters in a stone-throwing encounter
This resulted in damage to windows of nearby Holy Rosary College
The caretaker of the college, Chan, while assessing the damage caused, was chased by the smaller group and threw stones at him
Chan took refuge at the hospitals administration building where LAUR and 2 policemen were on guard duty
An investigation was conducted due to the complaint filed by Bondoc against LAUR and his companions
During which Bondoc pointed to LAUR as the person responsible for his injuries even as Patrolman Berdon admitted to having hit Bondoc
LAUR was dismissed by Chief of Hospital on the basis of investigation finding LAUR and his companions to have indeed mauled Bondoc. 2 policemen were
suspended.
LAUR filed with the NLRC a complaint for illegal dismissal with additional claims for payment of wage differentials, holiday pay, overtime pay and 13th month
pay, payment of moral and exemplary damages, attorneys fees and expenses of litigation with prayer for reinstatement without loss of seniority rights against
DJRMH.
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ISSUE(S): WON NLRC and Labor Arbiter have jurisdiction over this case instead of the Civil Service Commission.

HELD: NO. The DJRMH is maintained as a public medical center and health facility attached to the DOH, clearly an agency of the Government which thus falls within
the scope and coverage of the Civil Service Law.

RATIO:
The petitioner-hospital, the DJRMH, originally known as the Tala Leprosarium, was one of three leper colonies established under Commonwealth Act No. 161.
Maintained to this day as a public medical center and health facility attached to the Department of Health, the DJRMH exercises strictly governmental functions
relating to the management and control of the dreaded communicable Hansen's disease, commonly known as leprosy. As it is clearly an agency of the Government,
the DJRMH falls well within the scope and/or coverage of the Civil Service Law in accordance with paragraph 1., Section 2, Article IX B, 1987 Constitution and the
provisions of Executive Order No. 292, otherwise known as the Administrative Code of 1987 and Presidential Decree No. 807, otherwise known as the Civil Service
Decree of the Philippines. As the central personnel agency of the Government, the Civil Service Commission administers the Civil Service Law. It is, therefore, the
single arbiter of all contests relating to the civil service.

Worthy to note in this connection is the fact that the Labor Code itself provides that "the terms and conditions of employment of government employees shall be
governed by the Civil Service Law, rules and regulations". It is, indeed, the Civil Service Commission which has jurisdiction over the present controversy. Its decisions
are subject to review by the Supreme Court.
Jurisdiction is conferred by law. Where there is none, no agreement of the parties can provide one. Consequently, it was incorrect for the respondent labor arbiter
to have proceeded to hear the case, simply because private respondent Ceferino Laur happened to lodge his complaint before his office, or to hold that petitioners
are estopped from assailing the respondent labor authorities' jurisdiction over the present case simply because the petitioners have earlier submitted themselves to
the said jurisdiction by virtue of their participation in all the stages of the proceedings in the office of respondent Labor Arbiter Linsangan and in the NLRC, and that
they failed to raise the issue of jurisdiction in the said proceedings.
Considering that the decision of a tribunal not vested with appropriate jurisdiction is null and void.

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INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION v. CALLEJA [G.R. No. AUTHOR: RAMOS
85750; September 28, 1990] NOTES: 2 consolidated cases involve the validity of the claim of immunity by
KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED LABOR ICMC and the International Rice Research Institute, Inc. (IRRI) from the
ASSOCIATION IN LINE INDUSTRIES AND AGRICULTURE [G.R. No. 893331; application of Philippine labor laws
September 28, 1990]
TOPIC: Employees of international Organizations and Specialized Agencies
PONENTE: Melencio-Herrera, J.
CASE LAW/ DOCTRINE:

FACTS: [G.R. 85750 (ICMC case)]
After the Vietnam war, the issue of Vietnamese refugees fleeing from communist rule led to the creation of the 1981 Agreement between the Philippines and
the UN High Commissioner for Refugees whereby a refugee resettlement processing center (for other countries) was established in Bataan
ICMC was among those accredited by the PH Govt to operate the refugee processing center
o Incorporated in New York at the Holy Sees request as a non-profit humanitarian agency
o Registered with the UN Economic and Social Council (ECOSOC) and enjoys Consultative Status, Category II.
o its activities are parallel to those of the International Committee for Migration (ICM) and the International Committee of the Red Cross (ICRC)
14 Jul 1986: Trade Unions of the Philippines and Allied Services (TUPAS) filed with the then Ministry of Labor and Employment a Petition for Certification Election
among the rank and file members employed by ICMC. ICMC opposed this, claiming diplomatic immunity as a UN-registered international org
5 Feb 1987: Med-Arbiter Bactin sustained ICMC and dismissed the petition for lack of jurisdiction
Calleja (Dir. of the Bureau of Labor Relations) reversed the Med-Arbiters ruling and ordered the immediate conduct of a certification election.
o certification election is NOT a litigation but a mere investigation of a non-adversary, fact-finding character. It is not a suit against ICMC its property,
funds or assets, but is the sole concern of the workers themselves (Sol Gen agrees)
o At that time, ICMC's request for recognition as a specialized agency was still pending with the DFA
15 Jul 1988: PH Govt (via DFA) granted ICMC the status of a specialized agency with corresponding diplomatic privileges and immunities
o ICMC then sought the immediate dismissal of the TUPAS Petition (denied by BLR)
o ICMC's 2 Motions for Reconsideration were denied (hence this petition) despite a DFA opinion that BLR violated ICMC's diplomatic immunity
28 November 1988, the Court issued a TRO against the certification election
10 Jan 1989: DFA filed a motion for Intervention, which the SC allowed
FACTS: [G.R. 89331 (IRRI case)]
Before a Decision was rendered in the ICMC Case, SCs 3rd Div consolidated GR 89331 pending before it with GR 85750, a case pending with the 2nd Div
9 Dec 1959: PH Govt and the Ford and Rockefeller Foundations signed a Memorandum of Understanding establishing the IRRI at Los Baos
o IRRI was to be an autonomous, philanthropic, tax-free, non-profit, non-stock organization designed to carry out the principal objective of conducting
basic research on the rice plant, rice production, management, distribution and utilization for benefit for the people of major rice-growing areas.
o Initially, IRRI was organized and registered with the SEC as a private corporation subject to all laws and regulations
o But by virtue of PD 1620 (19 Apr 1979), IRRI was granted the status, prerogatives, privileges and immunities of an international organization
Organized Labor Association in Line Industries and Agriculture (OLALIA), is a labor organization with a local union, the Kapisanan in respondent IRRI
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20 Apr 1987: Kapisanan filed a Petition for Direct Certification Election with DOLE Region IV
o IRRI opposed the petition invoking PD 1620, which conferred it with the status of an international organization and granting it immunity from suit
7 Jul 1987: Med-Arbiter Garcia, upheld the opposition on the basis of PD 1620 and dismissed the Petition for Direct Certification
Calleja (BLR Dir) reversed the Med-Arbiters ruling and ordered the immediate conduct of a certification election.
o immunities and privileges granted to IRRI do not include exemption from coverage of our Labor Laws (IRRIs MR was denied)
Sec of Labor ruled in favor of IRRI and set aside BLRs decision
o grant of specialized agency status by the PH Govt to the IRRI bars DOLE from assuming and exercising jurisdiction over IRRI
o PD 1620: IRRI shall enjoy immunity from any penal, civil and administrative proceedings, unless waived by its Director-General
o no summons, subpoena, orders, decisions or proceedings ordered by any court, administrative, or quasi-judicial agency are enforceable
Kapisanan filed the present Petition for Certiorari
o PD 1620 provision granting the immunity is unconstitutional as it deprives the Filipino workers of their right to form trade unions for the purpose of
collective bargaining, as enshrined in the 1987 Constitution
o Procedural issue: Sec of Labor erred in entertaining IRRI'S appeal, as the Order of the BLR Director had become final and unappeable
Sec of Labor relied on RA 6715 (took effect on 21 Mar 1989), providing for the direct filing of appeal from the Med-Arbiter to the Labor Sec instead of to the
Director of BLR in cases involving certification election orders
ISSUE: [both cases] WON the grant of diplomatic privileges and immunities to ICMC/IRRI extends to immunity from the application of Philippine labor laws
HELD: YES, ICMC and IRRI are granted immunity, even from the application of labor laws. In the ICMC case, the petition is GRANTED and the BLR order is SET ASIDE.
In the IRRI case, the petition is DISMISSED as the Labor Sec committed no grave abuse of discretion.
Diplomatic immunity has been granted ICMC and IRRI
o ICMC: Art II of the MoA bet. the PH Govt and ICMC provides that ICMC shall have a status "similar to that of a specialized agency."
Convention on the Privileges and Immunities of Specialized Agencies adopted by the UN General Assembly provides that special agencies shall
enjoy immunity from every form of legal process, unless the same is expressly waived
Their premises shall be inviolable and their property immune from executive, administrative, judicial or legislative interference
o IRRI: PD 1620, Article 3, is explicit in its grant of immunity from any penal, civil and administrative proceedings, unless waived
Opinions by the DFA and the Labor Sec recognizing the immunity of ICMC and IRRI constitute a categorical recognition by the Executive Branch
o diplomatic immunity is a political question and courts should refuse to look beyond a determination by the executive branch of the government
"International Organization" is an organization set up by agreement between two or more states.
o Under contemporary international law, such organizations are endowed with some degree of international legal personality
o organized mainly as a means for conducting general international business in which the member states have an interest
"Specialized agencies" are international organizations having functions in particular fields
o agencies which have "wide international responsibilities" are to be brought into relationship with the UN by agreements between them and ECOSOC
PRINCIPLES underlying the GRANT OF INTERNATIONAL IMMUNITIES to international organizations
1. international institutions should have a status which protects them against control or interference by any one government in the performance of
functions for the effective discharge of which they are responsible for;
2. NO country should derive any national financial advantage by levying fiscal charges on common international funds; and
3. the international organization should, as a collectivity of States members, be accorded the facilities for the conduct of its official business customarily
extended to each other by its individual member States.
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o "It is NOT concerned with the status, dignity or privileges of individuals, but with the elements of functional independence necessary to free
international institutions from national control and to enable them to discharge their responsibilities impartially on behalf of all their members.
ICMC's and IRRI's immunity from local jurisdiction does NOT deprive labor of its basic rights
o ICMC employees are NOT without recourse whenever there are disputes to be settled
Convention on UN Specialized Agencies requires such to make provision for appropriate modes of settlement for disputes from contracts
Also, PH Govt is free to withdraw the privileges and immunities accorded whenever there is abuse in the enjoyment of the same
o IRRI employees are NOT without remedy in case of dispute with management
Council of IRRI Employees and Management is where both parties still are represented to maintaining mutual and beneficial cooperation
Certification Election is NOT beyond the scope of that immunity
o CERTIFICATION ELECTION CANNOT be viewed as an independent or isolated process. It could tugger off a series of events in the collective bargaining
process together with related incidents and/or concerted activities, which could inevitably involve ICMC in the "legal process," which includes "any
penal, civil and administrative proceedings." The eventuality of Court litigation is NOT remote and from which international organizations are precisely
shielded to safeguard them from the disruption of their functions. The immunity covers the organization concerned, its property and its assets. It is
equally applicable to proceedings in personam and proceedings in rem
Re: procedural issue - 15 Feb 1989 decision of the BLR Director had NOT become final because of an MR filed by IRRI. Said Motion was acted upon only on 30
Mar 1989, when RA 6715 (provides for direct appeals from the Med-Arbiter to Labor Sec in certification election cases) was already in effect

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16. Callanta V Carnation AUTHOR: REYES
[G.R. No. Date] NOTES:
TOPIC: Decisions of Courts and Quasi-judicial bodies
PONENTE: J Fernan
FACTS:
Petitioner Virgilio Callanta was employed by Carnation in January 1974 as a salesman in the Agusan Del Sur area.

5 years later or on June 1, 1979, CARNATION filed with the Ministry of Labor and Employment (MOLE) an application for clearance to terminate the
employment of CALLANTA on the alleged grounds of serious misconduct and misappropriation of company funds amounting to P12K more or less.
On June 26, 1979 MOLE approved said clearance application. Petitioner CALLANTAs employment was terminated on June 1, 1979.
On July 5, 1982, CALLANTA filed with the MOLE a complaint for illegal dismissal with claims for reinstatement, backwages, and damages against
CARNATION.
What is put in issue is the timeliness of petitioners complaint alleging that it is barred by prescription for having been filed more than 3 years after the
date of CALLANTAs dismissal.
Petitioner contends that since the Labor Code is silent as to the prescriptive period of an action for illegal dismissal with claims for reinstatement,
backwages and damages, the applicable law, by way of supplement, is Article 1146 of the New Civil Code which provides a 4-year prescriptive period for
an action predicated upon "an injury to the rights of the plaintiff" considering that an action for illegal dismissal is neither a "penal offense" nor a mere
"money claim," as contemplated under Articles 291 and 292, respectively, of the Labor Code. Petitioner further claims that an action for illegal dismissal
is a more serious violation of the rights of an employee as it deprives him of his means of livelihood; thus, it should correspondingly have a prescriptive
period longer than the 3 years provided for in "money claims."
While respondent argues that a case for illegal dismissal falls under the general category of "offenses penalized under this Code and the rules and
regulations pursuant thereto" provided under Article 291 or a money claim under Article 292, so that petitioner's complaint for illegal dismissal filed on
July 5, 1982, or 3 years, one 1 and 5 days after his alleged dismissal on June 1, 1979, was filed beyond the three-year prescriptive period as provided
under Articles 291 and 292 of the Labor Code, hence, barred by prescription; that while it is admittedly a more serious offense as it involves an
employee's means of livelihood, there is no logic in assuming that it has a longer prescriptive period, as naturally, one who is truly aggrieved would
immediately seek the redress of his grievance; that assuming arguendo that the law does not provide for a prescriptive period for the enforcement of
petitioner's right, it is nevertheless beyond dispute that the said right has already lapsed into a stale demand; and that considering the seriousness of
the act committed by petitioner, private respondent was justified in terminating the employment.
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ISSUE(S): WON an action for illegal dismissal prescribes in 3 years pursuant to Articles 291 and 292 of the Labor Code.
HELD: No.
RATIO:
The reliefs principally sought by an employee who was illegally dismissed from his employment are reinstatement to his former position without loss of
seniority rights and privileges, if any, backwages and damages, in case there is bad faith in his dismissal.
As an affirmative relief, reinstatement may be ordered, with or without backwages. While ordinarily, reinstatement is a concomitant of backwages, the
two are not necessarily complements, nor is the award of one a condition precedent to an award of the other. And, in proper cases, backwages may be
awarded without ordering reinstatement .
In either case, no penalty of fine nor imprisonment is imposed on the employer upon a finding of illegality in the dismissal.
By the very nature of the reliefs sought, therefore, an action for illegal dismissal cannot be generally categorized as an "offense" as used under Article
291 of the Labor Code, which according to public respondent, must be brought within the period of three years from the time the cause of action
accrued, otherwise, the same is forever barred.
It is true that the "backwwages" sought by an illegally dismissed employee may be considered, by reason of its practical effect, as a "money claim."
However, it is not the principal cause of action in an illegal dismissal case but the unlawful deprivation of the one's employment committed by the
employer in violation of the right of an employee.
Backwages is merely one of the reliefs which an illegally dismissed employee prays the labor arbiter and the NLRC to render in his favor as a
consequence of the unlawful act committed by the employer. The award thereof is not private compensation or damages but is in furtherance and
effectuation of the public objectives of the Labor Code. Even though the practical effect is the enrichment of the individual, the award of backwages is
not in redress of a private right, but, rather, is in the nature of a command upon the employer to make public reparation for his violation of the Labor
Code.

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17. Supreme Steel Corp. v. Nagkakaisang Manggagawa Ng Supreme AUTHOR: S A Y O
Independent Union NOTES:

TOPIC: Labor Contracts Focus of the case is only with regard to the Denial to the four employees of the
PONENTE: CBA- provided wage increase.

CASE LAW/ DOCTRINE:

It is a familiar and fundamental doctrine in labor law that the CBA is the law between the parties and compliance therewith is mandated by the express
policy of the law. If the terms of a CBA are clear and there is no doubt as to the intention of the contracting parties, the literal meaning of its stipulation shall
prevail. Moreover, the CBA must be construed liberally rather than narrowly and technically and the Court must place a practical and realistic construction
upon it. Any doubt in the interpretation of any law or provision affecting labor should be resolved in favor of labor.
FACTS:

Petitioner Supreme Steel Pipe Corporation is a domestic corporation engaged in the business of manufacturing steel pipes for domestic and foreign markets.
Respondent Nagkakaisang Manggagawa ng Supreme Independent Union is the certified bargaining agent of petitioners rank-and-file employees. The CBA in
question was executed by the parties to cover the period from June 1, 2003 to May 31, 2008.
Respondent filed a notice of strike with the National Conciliation and Mediation Board (NCMB) on the ground that petitioner violated certain provisions of
the CBA. The parties failed to settle their dispute. Consequently, the Secretary of Labor certified the case to the NLRC for compulsory arbitration pursuant to
Article 263(g) of the Labor Code.
Respondent alleged eleven CBA violations, delineated as follows:
o Denial to four employees of the CBA- provided wage increase
o Contracting-out labor
o Failure to provide shuttle service
o Failure to comply with the time-off with pay provision
o Visitors free access to company premises
o Failure to comply with reporting time-off provision
o Dismissal of Diosdado Madayag
o Denial of paternity leave benefit to two employees
o Discrimination and harassment
o Non-implementation of COLA in Wage Order Nos. RBIII-10 and 11
o NLRC: 8/11 were decided in favor of respondents; two (denial of paternity leave benefit and discrimination of union members) were decided in favor
of petitioner; issue on visitors free access to company premises was deemed settled during the mandatory conference.
CA affirmed NLRC
SC: sustained the CAs findings and conclusions on all the issues, except the issue pertaining to the denial of the COLA under Wage Order No. RBIII-10 and 11.
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On the Wage increase:

Petitioner claims that it has been the company practice to offset the anniversary increase with the CBA increase. It however failed to prove such
material fact. Company practice, just like any other fact, habits, customs, usage or patterns of conduct must be proven. The offering party must
allege and prove specific, repetitive conduct that might constitute evidence of habit, or company practice. Evidently, the pay slips of the four
employees do not serve as sufficient proof.
ISSUE(S): WON there was violation of the CBA

HELD: YES

RATIO:
The wording of the CBA on general wage increase cannot be interpreted any other way: The CBA increase should be given to all employees "over and above" the
amount they are receiving, even if that amount already includes an anniversary increase. Stipulations in a contract must be read together, not in isolation from one
another. Clearly then, even if petitioner had already awarded an anniversary increase to its employees, such increase cannot be credited to the "contractual"
increase as provided in the CBA, which is considered "separate and distinct."

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18. Mariveles Shipyard Corporation vs. CA AUTHOR: SOLIS
[G.R. No. 144134. 11 November 2003] NOTES:
TOPIC: Labor Contracts
PONENTE: Quisumbing, J.
CASE LAW/ DOCTRINE:
FACTS:
Oct 1993Petitioner Mariveles Shipyard Corporation engaged the services of Longest Force Investigation and Security Agency, Inc. to render security services
at its premises. Pursuant to their agreement, Longest Force deployed its security guards, herein respondents, at the petitioners shipyard in Mariveles, Bataan.
However, later on, Mariveles Corporation found the services rendered by the assigned guards unsatisfactory and inadequate, causing it to terminate its
contract with Longest Force on April 1995. Longest Force, in turn, terminated the employment of the security guards it had deployed at petitioners shipyard.
2 Sept 1996private respondents filed a case for illegal dismissal, underpayment of wages, non-payment of overtime pay, premium pay for holiday and rest
day, service incentive leave pay, and 13th month pay and attorneys fees against Longest Force and petitioner, before the Labor Arbiter.
In Longest Forces cross-claim, it admitted that it employed private respondents and assigned them as security guards at the premises of petitioner, rendering a
12 hours duty per shift for the said period. It likewise admitted its liability as to the non-payment of the alleged wage differential in the total amount of
P2,618,025 but passed on the liability to petitioner alleging that the service fee paid by the latter to it was way below the PNPSOSIA and PADPAO rate, thus,
contrary to the mandatory and prohibitive laws because the right to proper compensation and benefits provided under the existing labor laws cannot be
waived nor compromised.
While Mariveles Corporation alleged the following: (1) denied the liability on account of the alleged illegal dismissal, stressing that no employer-employee
relationship existed between it and the security guards; and (2) it is not liable for monetary claims which it had already paid. Anent the cross-claim filed by
Longest Force, Mariveles Corporation averred that Longest Force had benefited from the contract, it was now stopped from questioning said agreement on the
ground that it had made a bad deal.
LA ruled in favor of private respondents and declaring Longest Force and Mariveles Corporation jointly and severally liable to pay the money claims.
NLRC affirmed LAs decision. Motion for reconsideration was denied.
Hence, this petition.

ISSUE(S): Is Mariveles Corporation and Longest Force jointly and severally liable for the payment of wage differentials and overtime pay owing to the private
respondents.

HELD: Yes. Mariveles Corporation and Longest Force is jointly and severally liable for the payment of wage differentials and overtime pay owing to the private
respondents.

RATIO:
Their liability is pursuant to Articles 106, 107 and 109 of the Labor Code which provides as follows:
Article 106. CONTRACTOR OR SUBCONTRACTOR.Whenever an employer enters into a contract with another person for the performance of the formers
work, the employees of the contractor and of the latters subcontractor, if any, shall be paid in accordance with the provisions of this Code.
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In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and
severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and
extent that he is liable to employees directly employed by him.

Article 107. INDIRECT EMPLOYER.The provisions of the immediately preceding Article shall likewise apply to any person, partnership, association or
corporation which, not being an employer, contracts with an independent contractors for the performance of any work, task , job or project.

Article 109. SOLIDARY LIABILITY.The provisions of existing laws to the contrary notwithstanding, ever employer or indirect employer shall be held
responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability
under this Chapter, they shall be considered as direct employers.

In this case, when petitioner Mariveles Corporation contracted for security services with Longest Force as the security agency that hired private respondents
to work as guards for the shipyards corporation, petitioner became an indirect employer of private respondents pursuant to Article 107. Following Article
106, when the agency as contractor failed to pay the guards, the corporation as principal becomes jointly and severally liable for the guards wages. This is
mandated by the Labor Code to ensure compliance with its provisions, including payment of statutory minimum wage. The security agency is held liable by
virtue of its status as direct employer, while the corporation is deemed the indirect employer of the guards for the purpose of paying their wages in the
event of failure of the agency to pay them. This statutory scheme gives the workers the ample protection consonant with labor and social justice provisions
of the 1987 Constitution.
Petitioner cannot evade its liability by claiming that it had religiously paid the compensation of guards as stipulated under the contract with the security
agency. Labor standards are enacted by the legislature to alleviate the plight of workers whose wages barely meet the spiraling costs of their basic needs.
Labor laws are considered written in every contract. Thus, employers cannot hide behind their contracts in order to evade their (or their contractors or
subcontractors) liability for noncompliance with the statutory minimum wage.

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19. Central Azucarera De Tarlac vs Central Azucarera De Tarlac Labor Union- AUTHOR: The Talio
NLU NOTES:
[G.R. No. 188949; July 26, 2010] TBAS Total Basic Annual Salary
TOPIC: 4.4 Company Practice NCMB National Conciliation and Mediation Board
PONENTE: Nachura, J.
CASE LAW/ DOCTRINE:
As correctly ruled by the CA, the practice of petitioner in giving 13th-month pay based on the employees gross annual earnings which included the basic
monthly salary, premium pay for work on rest days and special holidays, night shift differential pay and holiday pay continued for almost 30 years and has
ripened into a company policy or practice, which cannot be unilaterally withdrawn.
Art. 100 of the Labor Code, otherwise known as the Non-Diminution Rule, mandates that benefits given to employees cannot be taken back or reduced
unilaterally by the employer because the benefit has become part of the employment contract, written or unwritten. The rule against diminution of benefits
applies if it is shown that the grant of the benefit is based on an express policy or has ripened into a practice over a long period of time and that the practice is
consistent and deliberate. Nevertheless, the rule will not apply if the practice is due to error in the construction or application of a doubtful or difficult question
of law. But even in cases of error, it should be shown that the correction is done soon after discovery of the error.
FACTS:
Petitioner is a domestic corporation engaged in the business of sugar manufacturing, while respondent is a legitimate labor organization which serves as the
exclusive bargaining representative of petitioners rank-and-file employees. The controversy stems from the interpretation of the term "basic pay," essential in
the computation of the 13th-month pay.
In compliance with PD 851, petitioner granted its employees the mandatory 13th-month pay since 1975. The formula used by petitioner in computing the 13th-
month pay was: TBAS divided by 12. Included in petitioners computation of the TBAS were the following: basic monthly salary; first 8 hours overtime pay on
Sunday and legal/special holiday; night premium pay; and vacation and sick leaves for each year. Throughout the years, petitioner used this computation until
2006.
On November 6, 2004, respondent staged a strike. During the pendency of the strike, petitioner declared a temporary cessation of operations. In December
2005, all the striking union members were allowed to return to work. Subsequently, petitioner declared another temporary cessation of operations for the
months of April and May 2006. The suspension of operation was lifted on June 2006, but the rank-and-file employees were allowed to report for work on a 15
day-per-month rotation basis that lasted until September 2006. In December 2006, petitioner gave the employees their 13th-month pay based on the employees
total earnings during the year divided by 12.
Respondent objected to this computation. It averred that petitioner did not adhere to the usual computation of the 13th-month pay. It claimed that the divisor
should have been 8 instead of 12, because the employees worked for only 8 months in 2006. It likewise asserted that petitioner did not observe the company
practice of giving its employees the guaranteed amount equivalent to their one month pay, in instances where the computed 13th-month pay was less than their
basic monthly pay.
Petitioner and respondent tried to thresh out their differences in accordance with the grievance procedure as provided in their CBA. During the grievance
meeting, petitioner explained that the change in the computation of the 13th-month pay was intended to rectify an error in the computation, particularly the
concept of basic pay, which should have included only the basic monthly pay of the employees.
For failure of the parties to arrive at a settlement, respondent applied for preventive mediation before the NCMB. However, despite 4 conciliatory meetings, the
parties still failed to settle the dispute. Respondent then filed a complaint against petitioner for money claims based on the alleged diminution of
benefits/erroneous computation of 13th-month pay before the NLRC.
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Petitioner insists that the length of time (30 years in this case) during which an employer has performed a certain act beneficial to the employees, does not prove
that such an act was not done in error. It maintains that for the claim of mistake to be negated, there must be a clear showing that the employer had freely,
voluntarily, and continuously performed the act, knowing that he is under no obligation to do so. Petitioner asserts that such voluntariness was absent in this
case.
LA: Dismissed the complaint of respondent. Ruled that petitioner had the right to rectify the error in the computation of the 13th-month pay of its employees.
NLRC: Reversed the decision of the LA. Ordered the petitioner to adhere to its established practice of computation. [Check Bullet #2 of Facts]
CA: Affirmed the decision of the NLRC.
ISSUE(S): WON the CA erred in affirming the decision of the NLRC.
HELD: No, it did not.
The 13th-month pay mandated by PD 851 represents an additional income based on wage but not part of the wage. It is equivalent to 1/12 of the total basic salary
earned by an employee within a calendar year. All rank-and-file employees, regardless of their designation or employment status and irrespective of the method
by which their wages are paid, are entitled to this benefit, provided that they have worked for at least one month during the calendar year. If the employee
worked for only a portion of the year, the 13th-month pay is computed pro rata.
Furthermore, the term "basic salary" of an employee for the purpose of computing the 13th-month pay was interpreted to include all remuneration or earnings
paid by the employer for services rendered, but does not include allowances and monetary benefits which are not integrated as part of the regular or basic salary,
such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night differential and holiday pay, and cost-of-living allowances.
However, these salary-related benefits should be included as part of the basic salary in the computation of the 13th-month pay if, by individual or collective
agreement, company practice or policy, the same are treated as part of the basic salary of the employees.
Based on the foregoing, it is clear that there could have no erroneous interpretation or application of what is included in the term "basic salary" for purposes of
computing the 13th-month pay of employees. From the inception of PD 851 on December 16, 1975, clear-cut administrative guidelines have been issued to insure
uniformity in the interpretation, application, and enforcement of the provisions of P.D. No. 851 and its implementing regulations.
As correctly ruled by the CA, the practice of petitioner in giving 13th-month pay based on the employees gross annual earnings which included the basic monthly
salary, premium pay for work on rest days and special holidays, night shift differential pay and holiday pay continued for almost 30 years and has ripened into a
company policy or practice, which cannot be unilaterally withdrawn.
Art. 100 of the Labor Code, otherwise known as the Non-Diminution Rule, mandates that benefits given to employees cannot be taken back or reduced unilaterally
by the employer because the benefit has become part of the employment contract, written or unwritten. The rule against diminution of benefits applies if it is
shown that the grant of the benefit is based on an express policy or has ripened into a practice over a long period of time and that the practice is consistent and
deliberate. Nevertheless, the rule will not apply if the practice is due to error in the construction or application of a doubtful or difficult question of law. But even in
cases of error, it should be shown that the correction is done soon after discovery of the error.
The argument of petitioner that the grant of the benefit was not voluntary and was due to error in the interpretation of what is included in the basic salary
deserves scant consideration. No doubtful or difficult question of law is involved in this case. The guidelines set by the law are not difficult to decipher. The
voluntariness of the grant of the benefit was manifested by the number of years the employer had paid the benefit to its employees. Petitioner only changed the
formula in the computation of the 13th-month pay after almost 30 years and only after the dispute between the management and employees erupted. This act of
petitioner in changing the formula at this time cannot be sanctioned, as it indicates a badge of bad faith.
Furthermore, petitioner cannot use the argument that it is suffering from financial losses to claim exemption from the coverage of the law on 13th-month pay, or to
spare it from its erroneous unilateral computation of the 13th-month pay of its employees. Under Sec. 7 of the Rules and Regulations Implementing PD 851,
distressed employers shall qualify for exemption from the requirement of the Decree only upon prior authorization by the Secretary of Labor. In this case, no such
prior authorization has been obtained by petitioner; thus, it is not entitled to claim such exemption.
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20 METROPOLITAN BANK and TRUST COMPANY vs. NLRC AUTHOR: Tan
[G.R. No. 152928 June 18, 2009] NOTES:
TOPIC: Company Practice PONENTE: Leonardo-De Castro, J.
CASE LAW/ DOCTRINE:
To be considered a company practice, the giving of the benefits should have been done over a long period of time, and must be shown to have been
consistent and deliberate.
Ordinarily, an employee would have no right to demand benefits that the employer was not obligated by law or contract to give. However, it is the
jurisprudential rule that where there is an established employer practice of regularly, knowingly and voluntarily granting benefits to employees over a
significant period of time, despite the lack of a legal or contractual obligation on the part of the employer to do so, the grant of such benefits ripens into a
vested right of the employees and can no longer be unilaterally reduced or withdrawn by the employer.

FACTS:
Private respondents Patag and Flora were former employees of petitioner Metropolitan Bank and Trust Company (Metrobank), who availed of the banks
compulsory retirement plan in accordance with the 1995 Officers Benefits Memorandum. Patag retired on February 1, 1998, while Flora retired on August 1,
1998. Both of them received their respective retirement benefits computed at 185% of their gross monthly salary for every year of service as provided in the
1995 Memorandum.
Early in 1998, Collective Bargaining Agreement (CBA) negotiations were on-going between Metrobank and its rank and file employees for the period of 1998-
2000.
Patag wrote a letter date February 2, 1998 to the bank requesting that his retirement benefits be computed at the new rate should there be an increase thereof
in anticipation of possible changes in officers benefits after the signing of the new CBA. Flora likewise wrote Metrobank in March 25, 1998, requesting the bank
to use as basis in the computation of their retirement benefits the increased rate of 200% embodied in the just concluded CBA.
When the 1998-2000 CBA was approved, Metrobank, in line with its past practice, issued on June 10, 1998, a Memorandum on Officers Benefits, which
provided for improved benefits to its officers (the 1998 Officers Benefits Memorandum). Pertinently, the compulsory retirement benefit for officers was
increased from 185% to 200% effective January 1, 1998, but with the condition that the benefits shall only be extended to those who remain in service as of
June 15, 1998.
Patag and Flora, through their counsel, wrote a letter to Metrobank demanding the payment of their unpaid retirement, representing the increased benefits
they should have received under the 1998 Officers Benefits Memorandum.
In its letter-reply Metrobank informed respondents of their ineligibility to the improved officers benefits as they had already ceased their employment and were
no longer officers of the bank as of June 15, 1998
Respondents filed with the Labor Arbiter their consolidated complaint against Metrobank for underpayment of retirement benefits and damages, asserting that
pursuant to the 1998 Officers Benefits Memorandum, they were entitled to additional retirement benefits.
Labor Arbiter Geobel A. Bartolabac rendered a decision, dismissing the respondents complaint.
However, the NLRC, and later the CA, ordered Metrobank to pay, holding that the issuance of a memorandum extending benefits to its officers which are higher
or at least the same as those provided for the rank and file employees effective every January 1 of the year and without any condition, may be deemed to have
ripened into company practice or policy which cannot be peremptorily withdrawn.
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ISSUE(S): Whether the CA and the NLRC erred when they recognized that there was an established company practice or policy of granting improved benefits to its
officers effective January 1 of the year and without any condition that the officers should remain employees of Metrobank as of a certain date.
HELD: NO. The SC agrees with the CA and the NLRC. Petition denied. CA affirmed.

RATIO:

To be considered a company practice, the giving of the benefits should have been done over a long period of time, and must be shown to have been consistent
and deliberate.
The NLRCs and the CAs factual conclusions were fully supported by substantial evidence on record. Respondents were able to prove that for the period 1986-
1997, Metrobank issued at least four (4) separate memoranda, coinciding with the approval of four (4) different CBAs with the rank and file, wherein bank
officers were granted benefits, including retirement benefits, that were commensurate or superior to those provided for in Metrobanks CBA with its rank and
file employees. Respondents attached to their position paper filed with the Labor Arbiter copies of the CBAs that petitioner entered into with its rank and file
employees for the period 1986-1997 and also the various officers benefits memoranda issued by the bank after each CBA signing.
The record further reveals that these improved officers benefits were always made to retroact effective every January 1 of the year of issuance of said
memoranda and without any condition regarding the term or date of employment. The condition that the managerial employee or bank officer must still be
employed by petitioner as of a certain date was imposed for the first time in the 1998 Officers Benefits Memorandum.
This constitutes voluntary employer practice which cannot be unilaterally withdrawn or diminished by the employer without violating the spirit and intent of Art.
100 of the Labor Code, which provides that Prohibition against elimination or diminution of benefits. Nothing in this Book shall be construed to eliminate or in
any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code.
If it were true that there was no company practice, it would have been simple enough for the bank to prove this. All it had to do was show some examples of
past retirees over the period 1986 to 1997 who retired prior to the issuance of the relevant officers benefits memorandum but after the usual January
1st memorandum effectivity date and whose retirement benefits were computed at the old rate and not at the improved rate. Metrobank presented no such
evidence.
Anent Metrobank's line of reasoning that it had no obligation under Article 287 of the Labor Code or the express terms of the retirement plan to grant improved
benefits to employees who are no longer in the service at the time of the grant, it appears that petitioner is deliberately missing the point. Ordinarily, an
employee would have no right to demand benefits that the employer was not obligated by law or contract to give. However, it is the jurisprudential rule that
where there is an established employer practice of regularly, knowingly and voluntarily granting benefits to employees over a significant period of time, despite
the lack of a legal or contractual obligation on the part of the employer to do so, the grant of such benefits ripens into a vested right of the employees and can
no longer be unilaterally reduced or withdrawn by the employer.

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21. Pag-asa Steel Works v. CA and Pag-asa Steel Workers Union (PSWU) AUTHOR: Tiglao
[G.R. No. 166647, 31 March 2006] NOTES:
TOPIC: | PONENTE: J. Callejo
CASE LAW/ DOCTRINE:
To ripen into a company practice that is demandable as a matter of right, the giving of the increase should not be by reason of a strict legal or contractual obligation,
but by reason of an act of liberality on the part of the employer.

Hence, even if the company continuously grants a wage increase as mandated by a wage order or pursuant to a CBA, the same would not automatically ripen into a
company practice.
FACTS:
RTWPB (Wage Board) issued a Wage Order providing for an increase of 13 pesos in the salaries of employees receiving the minimum wage and a consequent
increase in the rate to 198.
Afterwards, petitioner and the Union entered into a CBA which granted an increase of 15 pesos for the first year, 25 for the second year and 30 for the third
year.
A few months later, a wage order was issued by the NCR providing for a 25 pesos increase in the salary of employees receiving the minimum wage and
increased the minimum wage to 223.50.
Petitioner paid the 25 increase to all its employees. A year after, the employees were granted the second year increase to all its employees.
A year after that, the employees were granted the second year increase provided in the CBA.
On that same year, a wage order was issued which provided for the setting of the new minimum wage at 250.00 or an increase of 26 pesos.
The Union requested the company to implement the latest wage order.
Petitioner rejected this request claiming that since none of the employees were receiving a daily salary rate lower than 250 and there was no wage
distortion, it was not obliged to grant the wage increase.
Union alleged that it has been the companys practice to grant a wage increase under a government-issued wage order, aside from the yearly wage
increases in the CBA. It averred that petitioner paid the salary increases provided under the previous wage orders in full (aside from the yearly CBA
increases), regardless of whether there was a resulting wage distortion, or whether Union members salaries were above the minimum wage rate.
Petitioner contended that the full implementation of the previous wage orders did not give rise to a company practice as it was not given to the workers
within the bargaining unit on a silver platter, but only per request of the Union and after a series of negotiations.
Voluntary Arbiter: In favor of the company. It held that there was no company practice of granting a wage order increase to employees across-the-board,
and that there is no provision in the CBA that would oblige petitioner to grant the wage increase
CA: Reversed the VAs award. It held that the CBA is plain and clear, and leaves no doubt as to the intention of the parties, that is, to grant a wage increase
that may be ordered by the Wage Board in addition to the CBA-mandated salary increases regardless of whether the employees are already receiving wages
way above the minimum wage.
ISSUE(S): W/N the company was obliged to grant the wage increase under the Wage Order issued as a matter of practice

HELD: No

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RATIO:
It is not obliged to grant the wage increase.
The wage order provides that only those in the private sector in the NCR receiving the daily minimum wage of 223 per day would receive an increase,
thereby setting the wage rate to 250 pesos.
There is no dispute that when the wag order was issued, the lowest paid employee of the company was receiving a wage higher than 250 pesos.
Having such, the employees had no right to demand for the increase.
The records show that the grant of a wage order increase to all the employees regardless of salary rates on an agreement collateral had ripened into
company practice.
The only instance when petitioner admittedly implemented a wage order despite the fact that the employees were not receiving salaries below the
minimum wage was under Wage Order No. NCR-07. Petitioner, however, explains that it did so because it was agreed upon in the CBA that should a wage
increase be ordered within six months from its signing, petitioner would give the increase to the employees in addition to the CBA-mandated increases.
Respondents isolated act could hardly be classified as a company practice or company usage that may be considered an enforceable obligation.
Moreover, to ripen into a company practice that is demandable as a matter of right, the giving of the increase should not be by reason of a strict legal or
contractual obligation, but by reason of an act of liberality on the part of the employer. Hence, even if the company continuously grants a wage increase as
mandated by a wage order or pursuant to a CBA, the same would not automatically ripen into a company practice.

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22. Eastern Telecom Philippines vs. Eastern Telecoms Employees Union AUTHOR: Eastern Telecom
G.r. No. 185665, Feb 8, 2012 NOTES:
Company Practice Eastern- Petitioner
Mendoza, J.: Union- Respondent
CASE LAW/ DOCTRINE:

FACTS:
The dispute arose from Easterns plan to defer the payment of the 2003, 14th, 15th and 16th month bonuses to sometime in April on the grounds that Eastern is
experiencing continuing deterioration of its financial position since the year 2000.
The union is invoking the side agreement of the CBA which runs from 2001-2004. The agreement is stated as follows 4. Employment Related Bonuses. The
Company confirms that the 14th 15th and 16th month bonuses (other than 13th month pay) are granted
The union filed a preventive mediation complaint with the National Conciliation and Mediation Board (NCMB) on July 3, 2003 to determine when the bonus
should be paid.
During the conference at the NCMB, Eastern reiterated that the bonus will made in April 2004, this was reduced to a Memorandum of Agreement which was
not signed by the president.
The company changed its position stating that they will no longer pay the bonuses until the issue is resolved through compulsory arbitration, this letter was sent
to the Union on April 14, 2004 by Mr. Javier the VP for HR to the union. The letter also stated that the deferred release of the bonus was superseded and voided
due to the unions filing to the NCMB.
On April 16, 2004, the union filed a Notice of Strike on the ground of Unfair labor practice for Easterns failure to pay the bonuses in gross violation of the CBA
On May 19, 2004, the Secretary of Labor certified the labor dispute for Compulsory Arbitration.
In its position paper, the union claims that Eastern had consistently and voluntary been giving out the 14th month bonus on April and the 15ht and 16th month
bonuses every December each year from 1975 to 2002 even if Eastern did not realize any net profits. The union contends that the payment of such bonuses had
ripened unto a company practice which could no longer be unilaterally withdrawn by Eastern. They further argued that such company practice had been
confirmed in the Side Agreements of the 1998-2001 and 2001-2004 CBA which provided for the continuous grant of these bonuses in no uncertain terms. The
union states that the unjustified and malicious refusal of Eastern to pay the bonuses was a clear violation of the CBA and thus constitutes Unfair Labor Practice.
On the other hand, Eastern, n its position paper, questioned the jurisdiction of the NLRC in taking cognizance of the case since the issue merely involves that
interpretation of the provision of the 2001-2004 CBA side agreement, Eastern maintained that the bonuses are not part of the legally demandable wage and
that that such is an act of pure gratuity and generosity on its part, involving the exercise of management prerogative and such will always depend on the
financial performance. Eastern argues that it discontinued the payment of the bonuses due to huge losses it had continuously experienced since 2000. Further
Eastern argues that the bonus provision in the 2001 CBA was a mere affirmation that the distribution of bonuses was discretionary and premised on the success
of the business and availability of cash, and argues that the said bonus provision is only a one-time grant which the employees may demand only during the
year the agreement was executed. Eastern asserts that even if it had an unconditional obligation to grant the bonuses, the drastic decline of its financial
condition had already legally release it from such as provided by Art 1267 of the Civil code which states: When the service has become so difficult as to be
manifestly beyond the contemplation of the parties, the obligor may also be released therefrom, in whole or in part.
On April 2005, the NLRC issued its resolution dismissing the unions complaint and held that Eastern could not be forced to pay the bonuses as payment was
basically a management prerogative, being an act of generosity on the part of Eastern and contingent upon realization of profits.
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The union filed a petition for certiorari before the CA.
The CA declared that the side agreements of the 1998 and 2001 CBAs created a contractual obligation on Eastern to pay the bonuses without qualification or
condition. The CA also held that the grant of bonuses has already ripened into a company practice and their denial would amount to diminution of the
employees benefits. The CA further held that Eastern could not invoke Art 1267 of the NCCC because it would only apply when the difficulty in fulfilling the
obligation was manifestly beyond the contemplation of the parties.
Eastern now filed a case for rule 45 certiorari

ISSUE(S):
1.) WON Eastern is liable to pay the bonuses?
2.) WON such payment of the bonus has ripened into company practice?
HELD:

1.) YES
2.) YES

RATIO:
1.)
From a legal point of view, a bonus is a gratuity or act of liberality which the recipient has not right to demand as a matter right, The grant is basically a
management prerogative which cannot be forced upon the employer, however, A bonus becomes a demandable or enforceable obligation when it is
made part of the wage or salary compensation of the employee.
The SC finds that a reading of the side agreement reveals that it provides for giving the bonuses without qualification and without condition. There are
no conditions specified in the CBA for the grant of the bonus contrary to the claim of Eastern that the same is justified only when there are profits
earned by the company. The court finds that the provision does not state that the bonuses shall be dependent on Easterns finances or that their
payment was contingent upon realization of profits.
Eastern cannot insist on business losses as a basis for disregarding its undertaking. It was clear that although it had huge losses amount to at least 149
million in the year 2000, it continued to distribute the said bonuses. And notwithstanding such huge losses Eastern entered into the 2001-22004 CBA
side agreement where it contracted to grant the bonuses to the union in no uncertain cause. Eastern continued to sustain losses for 2001 and 2002 and
still honored the side agreement to pay the bonuses in 2001 and 2002.
The SC also finds no merit in Easterns contention that the bonus provisions are only on a single instance. Since nowhere in the side agreement
stipulate as such
The SC held that Eastern cannot seek the protection of Article 1267 of the Civil code since Eastern appears to be well aware of its deterioration financial
condition when it entered into the 2001-2004 CBA agreements with the Union, and it cannot be sad that such difficulty in complying with its obligation
under the side agreement was manifestly beyond the contemplation of the parties.
2.)
The court finds that its act of granting the bonuses has become an established company practice such that it has virtually become part of the
employees salary or wage.
The SC cited the case of Philippine Appliance Corp vs. CA where it was held that to be considered a regular practice, however, the giving of the bonus
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should have been done over a long period of time and must be shown to have been consistent and deliberate. The test or rationale of this rule on
long practice requires an indubitable showing that the employer agreed to continue fiving the benefits knowing fully well that said employees are
not covered by the law requiring payment thereof.
The records show that Eastern had been paying out the said bonuses without fail from 1975-2002 or for 27 years whether it earned profits or not. The
considerable length of time that Eastern has been giving the bonuses to its employees indicates a unilateral and voluntary act on its part to continue
giving the benefits knowing that such at was not required by law. Accordingly, a company practice in favor of the employees has been established
and the payments made by Eastern pursuant thereto ripened into benefits enjoyed by the employees.
the giving of the bonuses cannot be peremptorily withdrawn by Eastern without violation Art. 100 of the Labor code which provides Prohibition
against elimination or diminution of benefits. Nothing in this book shall be construed to eliminate or in any way diminish supplements, or other
employee benefits being enjoyed at the time of promulgation of this Code. The rule is settled that nay benefit and supplement enjoyed by employees
cannot be reduced, discontinued or eliminated by the employer.

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23. ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. TERRIBLE, EDWIN D. AUTHOR: Acido
FEIST, MARIA OLIVIA T. YABUT-MISA, TERESITA C. BERNARDO, AND ALLAN G. NOTES: Petition for review on certiorari
ALMAZAR v. PEARLIE ANN F. ALCARAZ Included the relevant facts regarding the respondents probationary employment
G.R. No. 192571, July 23, 2013 because its related to the main issue of company policy (which is about Abbotts
TOPIC: Company policy PONENTE: Perlas-Bernabe, J. evaluation for probationary employees). But for the written digest, yung March
3, 2005 lang naman mahalaga J
CASE LAW/ DOCTRINE:
Company personnel policies create an obligation on the part of both the employee and the employer to abide by the same. A company policy partakes of the nature
of an implied contract between the employer and employee. The principle is akin to estoppel. Once an employer establishes an express personnel policy and the
employee continues to work while the policy remains in effect, the policy is deemed an implied contract for so long as it remains in effect. If the employer
unilaterally changes the policy, the terms of the implied contract are also thereby changed.
FACTS:
On June 27, 2004, petitioner Abbott Laboratories, Philippines caused the publication in a major broadsheet newspaper of its need for a Medical and Regulatory
Affairs Manager. Pearlie Ann Alcaraz, who was then a Regulatory Affairs and Information Manager at Aventis Pasteur Philippines, Incorporated (another
pharmaceutical company like Abbott), showed interest and submitted her application on October 4, 2004.
December 7, 2004: Abbotts formal job offer for Alcaraz to be employed on a probationary basis; later that day, she accepted the said offer and received a
confirmation e-mail from Abbotts Recruitment Officer, petitioner Teresita C. Bernardo. Attached to Bernardos e-mail were Abbotts organizational chart and a
job description of Alcarazs work.
February 12, 2005: Alcaraz signed an employment contract for 6 month probationary period beginning February 15, 2005 to August 14, 2005. The said contract
was also signed by Abbotts General Manager, petitioner Edwin Feist.
Alcaraz was made to undergo a pre-employment orientation where Allan Almazar, Hospiras Country Transition Manager, informed her that she had to
implement Abbotts Code of Conduct and office policies on human resources and finance. Petitioner Kelly Walsh, Manager of the Literature Drug Surveillance
Drug Safety of Hospira, was to be her immediate supervisor.
March 3, 2005: Petitioner Maria Olivia T. Yabut-Misa, Abbotts HR Director, sent Alcaraz an e-mail with the procedure for evaluating the performance of
probationary employees and further indicated that Abbott had only one evaluation system for all of its employees. E-mail included Abbotts Code of Conduct
and Probationary Performance Standards and Evaluation (PPSE) and Performance Excellence Orientation Modules (Performance Modules)
o IMPORTANT FOR RULING: PPSE procedure mandates, inter alia, that the job performance of a probationary employee should be formally reviewed and
discussed with the employee at least twice: first on the third month and second on the fifth month from the date of employment. Abbott is also required
to come up with a Performance Improvement Plan during the third month review to bridge the gap between the employees performance and the
standards set, if any. In addition, a signed copy of the PPSE form should be submitted to Abbotts HRD as the same would serve as basis for
recommending the confirmation or termination of the probationary employment.
During the course of her employment, Alcaraz noticed that some of the staff had disciplinary problems. Thus, she would reprimand them for their
unprofessional behavior such as non-observance of the dress code, moonlighting, and disrespect of Abbott officers. However, Alcarazs method of management
was considered by Walsh to be "too strict. Alcaraz approached Misa to discuss these concerns and was told to "lie low" and let Walsh handle the matter. Misa
even assured her that Abbotts HRD would support her in all her management decisions.
April 20, 2005: Alcaraz had a meeting with petitioner Cecille Terrible (Terrible), Abbotts former HR Director, to discuss certain issues regarding staff
performance standards. In the course thereof, Alcaraz accidentally saw a printed copy of an e-mail sent by Walsh to some staff members which essentially
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contained queries regarding the formers job performance. Alcaraz asked if Walshs action was the normal process of evaluation. Terrible said that it was not.
May 16, 2005: Alcaraz was called to a meeting with Walsh and Terrible where she was informed that she failed to meet the regularization standards for the
position of Regulatory Affairs Manager; they requested Alcaraz to tender her resignation, else they be forced to terminate her services. She was also told that,
regardless of her choice, she should no longer report for work and was asked to surrender her office identification cards.
May 23, 2005: Walsh, Almazar, and Bernardo personally handed to Alcaraz a letter stating that her services had been terminated effective May 19, 2005.
Reasons: Alcaraz (a) did not manage her time effectively; (b) failed to gain the trust of her staff and to build an effective rapport with them; (c) failed to train her
staff effectively; and (d) was not able to obtain the knowledge and ability to make sound judgments on case processing and article review which were necessary
for the proper performance of her duties.
Alcaraz felt that she was unjustly terminated from her employment and thus, filed a complaint for illegal dismissal and damages against Abbott and its officers,
namely, Misa, Bernardo, Almazar, Walsh, Terrible, and Feist. Arguments: She should be considered as a regular and not a probationary employee given Abbotts
failure to inform her of the reasonable standards for her regularization upon her engagement as required under Article 295 of the Labor Code; while her
employment contract stated that she was to be engaged on a probationary status, the same did not indicate the standards on which her regularization would be
based; the individual petitioners maliciously connived to illegally dismiss her.
Labor Arbiter: dismissed Alcarazs complaint for lack of merit.
NLRC: Annulled and set aside LA ruling; Alcaraz illegally dismissed = reinstatement, backwages, damages, attorneys fees
Court of Appeals: Affirmed NLRC decision.
ISSUE:
Whether or not Alcaraz was validly terminated from her employment.
Whether or not Abbott followed its own procedure in evaluating the performance of a probationary employee.
HELD:
Yes
No
Petition granted. CA decision reversed and set aside. LA ruling reinstated with modification that Abbott pays nominal damages.
RATIO:
Alcaraz was well-aware that her regularization would depend on her ability and capacity to fulfill the requirements of her position as Regulatory Affairs
Manager and that her failure to perform such would give Abbott a valid cause to terminate her probationary employment. The Court rules that Alcarazs
status as a probationary employee and her consequent dismissal must stand.
Nonetheless, despite the existence of a sufficient ground to terminate Alcarazs employment and Abbotts compliance with the Labor Code termination
procedure, it is readily apparent that Abbott breached its contractual obligation to Alcaraz when it failed to abide by its own procedure in evaluating the
performance of a probationary employee.
Company personnel policies create an obligation on the part of both the employee and the employer to abide by the same. A company policy partakes of
the nature of an implied contract between the employer and employee. The principle is akin to estoppel. Once an employer establishes an express
personnel policy and the employee continues to work while the policy remains in effect, the policy is deemed an implied contract for so long as it remains in
effect. If the employer unilaterally changes the policy, the terms of the implied contract are also thereby changed.
In this case, it is apparent that Abbott failed to follow the above-stated procedure (see IMPORTANT FOR RULING part of facts) in evaluating Alcaraz. For one,
there lies a hiatus of evidence that a signed copy of Alcarazs PPSE form was submitted to the HRD. It was not even shown that a PPSE form was completed
to formally assess her performance. Neither was the performance evaluation discussed with her during the third and fifth months of her employment. Nor
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did Abbott come up with the necessary Performance Improvement Plan to properly gauge Alcarazs performance with the set company standards.
While it is Abbotts management prerogative to promulgate its own company rules and even subsequently amend them, this right equally demands that
when it does create its own policies and thereafter notify its employee of the same, it accords upon itself the obligation to faithfully implement them.
In this light, while there lies due cause to terminate Alcarazs probationary employment for her failure to meet the standards required for her regularization,
and while it must be further pointed out that Abbott had satisfied its statutory duty to serve a written notice of termination, the fact that it violated its own
company procedure renders the termination of Alcarazs employment procedurally infirm, warranting the payment of nominal damages.

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24. Kimberly-Clark Phil., Inc. v. Dimayuga AUTHOR: Adre
[G.R. No. 177705, September 18, 2009] NOTES:
TOPIC: Company Policy PONENTE: Carpio Morales Emergency Recit for facts:
The three respondents were resigned employees of the Kimberly-Clark company.
They entered such resignation prior to the companys issuance of an early
retirement package which must be availed during the period of November 10-30,
2002. But because of the generosity of the Kimberly-Clark company, they already
included the respondents in the package. But on January 16, 2003, the company
added extra financial incentive for employees that would grab the retirement
package which added a lump sum retirement pay in the amount of Php.
200,000.00 and a monthly economic assistance. The respondents filed a case in
the NLRC claiming that they should be included such additional benefits on the
ground that these were illegally withheld to them.
CASE LAW/ DOCTRINE:
The initial retirement grant already given to therespondents was already due to the privilege given by the company to the employees. They are clearly not included
anymore but because of their request, the company made adjustments and reconsidered their inclusion. So when the company
announced an additional incentive, it was clear that the respondents are no longer covered by it because they are no longer employees when it was announced. To
have them included would be additional burden to the employer. It is clearly not mandatory and legally demandable by the employees when it is clear that no
collective bargaining agreement or law that mandates the grant.
FACTS:
The respondents were employees of Kimberly-Clark Philippines, Inc. and they resigned in different occasions.
Nora Dimayuga tendered her resignation effective Oct. 21, 2002. Rosemarie Gloria tendered her resignation effective Oct. 21, 2002. Maricar tendered her
resignation effective Dec. 1, 2002 (for career advancement).
Kimberly-Clark had been experiencing a downward trend in its sales, it created a tax-free early retirement package for its employees as a cost-cutting and
streamlining measure. 24 of its employees availed of the offer that was made available from November 10-30, 2002.
Despite their resignation before the early retirement package was offered, Nora and Rosemarie pleaded with Kimberly-Clark that they be retroactively
extended the benefits, to which Kimberly-Clark agreed.
o Nora received a total of P1,025,113.73 while Rosemarie received a total of P1,006,493.94, in consideration of which they executed release and
quitclaim deeds dated January 17, 2003and January 16, 2003, respectively.
November 4, 2002, Maricar tendered her resignation effective December 1, 2002, citing career advancement as the reason. As at the time of her resignation
the early retirement package was still effective, she received a total of P523,540.13 for which she signed a release and quitclaim.
On November 28, 2002, Kimberly-Clark announced that in lieu of the merit increase which it did not give that year, it would provide economic assistance, to be
released the following day, to all monthly-paid employees on regular status as of November 16, 2002.
Still later or on January 16, 2003, Kimberly-Clark announced that it would grant a lump sum retirement pay in the amount of P200,000, in addition to the early
retirement package benefit, to those who signed up for early retirement and who would sign up until January 22, 2003
All three filed a case with Labor Arbiter.
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LA: Dismissed the claims of Nora and Rosemarie, holding that they were not entitled to the P200,000 lump sum retirement pay, they having ceased to be
employees of Kimberly-Clark at the time it was offered or made effective on January 16, 2003. He, however, granted Maricars claim for the same pay, holding
that she was entitled to it because at the time she resigned from the company effective December 1, 2002, such pay was already offered. Besides, the Labor
Arbiter ruled, Maricar had a vested right to it as she was given a formal notice of her entitlement to it by Kimberly-Clark, through its Human Resources Direct
Appeal with NLRC.
NLRC: modified the Labor Arbiters Decision by ordering Kimberly-Clark to pay Nora P200,000 additional bonus and P2,880 economic assistance, and to pay
Rosemarie P200,000 additional bonus and P2,656 economic assistance. It affirmed Maricars entitlement to the lump sum retirement pay.
o Applying the ruling in Businessday Information Systems and Services, Inc. v. NLRC (Businessday),the NLRC ratiocinated that Kimberly-Clarks
refusal to give Nora and Rosemarie the lump sum retirement pay was an act of discrimination, more so because a certain Oscar Diokno, another
employee who presumably resigned also prior to January 16, 2003, was given said benefit.
o As to the award of economic assistance, the NLRC held that Nora and Rosemarie were also entitled to it as the same was given in lieu of the
annual performance-based salary increase that was not given in 2002 and, therefore, already earned by them when they resigned
Kimberly-Clarks appealed to CA. affirmed the NLRC Decision.
o It held that, contrary to Kimberly-Clarks assertion that the early retirement package was extended to respondents out of generosity, the
offer/grant thereof, as well as their inclusion in the termination report submitted to the Department of Labor and Employment, made them full
retirees, hence, they must be given the other benefits extended to Kimberly-Clarks other employees, following the ruling in Businessday.
o since respondents resigned from their respective positions barely a month before the effectivity of the early retirement package, the general
principles of fair play and justice dictate that Kimberly-Clark extend to them the same benefits in consideration of their long years of service.
o Nora and Rosemarie received commendable ratings, upheld their entitlement to the economic assistance as their resignation before the grant
of such benefit took effect did not detract from the fact that it was in substitution of the traditional merit increase extended by Kimberly-Clark
to its employees with commendable or outstanding ratings which it failed to give in 2002.
Hence, the present case: Kimberly-Clark insist that Nora and Rosemarie are no longer entitled to the economic assistance and lump sum pay considering that
they were already retired and have in fact executed quitclaims and waivers.
ISSUE(S): Are additional benefits/bonuses given to the employees due to the gratuitous grant of the employer be required to the employees although it is not
included in Collective Bargaining Agreement?

HELD: No. They are not entitled to receive it.

RATIO:

The court reversed the decision of the NLRC and the Court of Appeals and ruled in favor of the petitioner.

According to the Supreme Court, the initial retirement grant already given to the respondents was already due to the privilege given by the company to the
employees.

They are clearly not included anymore but because of their request, the company made adjustments and reconsidered their inclusion.

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So when the company announced an additional incentive, it was clear that the respondents are no longer covered by it because they are no longer employees
when it was announced.

To have them included would be additional burden to the employer.

The nature a bonus arose from the financial growth or good performance of the company, it is clearly not mandatory and legally demandable by the employees
when it is clear that no collective bargaining agreement or law that mandates the grant.

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25 China Banking Corporation v. Borromeo AUTHOR: Castro
[G.R. No. 156515. October 19, 2004] NOTES: This is a Petition for review on Certiorari
TOPIC: Company Policy
PONENTE: Callejo, Sr., J.
CASE LAW/ DOCTRINE:
It is well recognized that company policies and regulations are, unless shown to be grossly oppressive or contrary to law, generally binding and valid on the parties
and must be complied with until finally revised or amended unilaterally or preferably through negotiation or by competent authority.
FACTS:
Mariano Borromeo joined China Banking Corporation (China Bank) on June 1, 1989 as Manager assigned at the Regional Office in Cebu City.
From 1989 to 1996, Borromeo received several promotions for having very good and highly satisfactory performance ratings. [Manager Level I Manager
Level II Senior Manager Level I Senior Manager Level II Assistant Vice-President, Branch Banking Group for the Mindanao area]
Prior to his last promotion and unknown to China Bank, Borromeo, without authority from the Executive Committee or Board of Directors, approved several
Drawn Against Uncollected Deposits/Bills Purchased (DAUD/BP) accommodations amounting to P2,441,375 in favor of Joel Maniwan, with Edmundo Ramos as
surety. [Note: DAUD/BP checks, which are not sufficiently funded by cash, are generally not honored by banks. DAUD/BP accommodation is a credit
accommodation granted to a few and select bank clients through the withdrawal of uncollected or uncleared check deposits from their current account.]
Under China Banks standard operating procedures, DAUD/BP accommodations may be granted only by a bank officer upon express authority from its Executive
Committee or Board of Directors.
As a result of the DAUD/BP accommodations in favor of Maniwan, a total of ten out-of-town checks (7 PCIB checks and 3 UCPB checks) of various dates
amounting to P2,441,375 were returned unpaid.
It is only when Borromeo wrote a Memorandum to China Banks Senior Management requesting for the grant of a P2.4 million loan to regularize/liquidate
Maniwans DAUD availments that China Bank was informed of the accommodations. China Bank also learned that the accommodations exceeded the limit
granted to clients, were granted without prior approval, and were already past due.
After accepting full responsibility for his action and stating that he is willing to face its consequence, Borromeo formally tendered his irrevocable resignation on
April 30, 1997.
Since his action violated China Banks Code of Ethics, he was directed to restitute the amount of P1,507,736.79 representing 90% of the total loss of
P1,675,263.10 incurred by the bank. However, in view of his resignation and considering his years of service, the management would only withhold the sum of
P836,637.08 from his separation pay, mid-year bonus and profit sharing. The amount would be released upon recovery of the sums demanded from Maniwan
in a civil case.
Borromeo demanded from China Bank the payment of his separation pay and other benefits, but the bank maintained its position to withhold P836,637.08
Thus, Borromeo filed with the NLRC a complaint for payment of separation pay, mid- year bonus, profit share and damages against China Bank.

Labor Arbiter: dismissed Borromeos complaint on the basis of the position papers submitted by the parties.

NLRC: dismissed his appeal and concurred with the LA that the bank was justified in withholding the benefits since being a responsible bank officer, Borromeo ought
to know that restitution may be imposed on erring employees apart from any other penalty for acts resulting in loss or damage.

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Court of Appeals: set aside the decision of the NLRC and ordered that the records of the case be remanded to the Labor Arbiter for further hearings on the factual
issues involved. CA found that Borromeo was was deprived of his right to due process because he was not informed of any charge against him in connection with the
Maniwan DAUD/BP accommodations nor afforded the right to a hearing or to defend himself before the penalty of restitution was imposed on him by the bank.

ISSUE:
Whether the bank may withhold the benefits owing to Borromeo as restitution for violating its standard operating procedures
HELD:
Yes. Restitution was an appropriate penalty under the banks company rules and regulations.
RATIO:
China Banks Code of Ethics provides:
7.2.5. Restitution/Forfeiture of Benefits- Restitution may be imposed independently or together with any other penalty in case of loss or damage to the property of
the Bank, its employees, clients or other parties doing business with the Bank. The Bank may recover the amount involved by means of salary deduction or whatever
legal means that will prompt offenders to pay the amount involved. But restitution shall in no way mitigate the penalties attached to the violation or infraction.
Forfeiture of benefits/privileges may also be effected in cases where infractions or violations were incurred in connection with or arising from the
application/availment thereof.

It is well recognized that company policies and regulations are, unless shown to be grossly oppressive or contrary to law, generally binding and valid on the
parties and must be complied with until finally revised or amended unilaterally or preferably through negotiation or by competent authority.

The management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations.
With more reason should these truisms apply to the respondent, who, by reason of his position, was required to act judiciously and to exercise his authority in
harmony with company policies.

Contrary to the respondents contention that the petitioner Bank could not properly impose the accessory penalty of restitution on him without imposing the
principal penalty of Written Reprimand/Suspension, the Code of Ethics expressly sanctions the imposition of restitution/forfeiture of benefits apart from or
independent of the other penalties. It was certainly within the banks prerogative to impose on Borromeo what it considered the appropriate penalty under the
circumstances pursuant to its company rules and regulations.

In addition, the banks business is essentially imbued with public interest and owes great fidelity to the public it deals with. It is expected to exercise the highest
degree of diligence in the selection and supervision of their employees. As a corollary, its prerogative to discipline its employees and to impose appropriate penalties
on erring workers pursuant to company rules and regulations must be respected. The law, in protecting the rights of labor, authorized neither oppression nor self-
destruction of an employer company which itself is possessed of rights that must be entitled to recognition and respect.

Regarding the issue that Borromeos right to due process was violated by the bank since no administrative investigation was conducted prior to the withholding of
his separation benefits, the Court rules that, under the circumstances obtaining in this case, no formal administrative investigation was necessary. Due process
simply demands an opportunity to be heard and this opportunity was not denied the respondent. In his letter, Borromeo even stated that he accepts full
responsibility for committing an error in judgment, lapses in control and abuse of discretion and that he is ready to face the consequence of his action.

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26 GTE Directories Corp. v. Sanchez AUTHOR: Miguel M. Consing
[G.R. No. 76219; May 27, 1991] NOTES:
TOPIC: Company Policy The sales people were selling ad-space.
PONENTE: Narvasa, J. There are a lot of facts and issues in this case so I focused on the ones relevant to
company policy.

CASE LAW/ DOCTRINE:
The formal challenge brought by employee of the reasonableness or the motives of a companys policy is not an excuse for the employee not to obey said policy.
FACTS:
GTE is a foreign corporation engaged in the business of publishing the PLDT telephone directories for Metro Manila and several provinces.

Old practice for conducting sales:
o Sales Reps. (SRs) were given work assignments in specific territories through a draw method.
o The SRs assigned to these territories had to meet a quota.
o A territory was not fully released to the salesperson for handling at one time, but assigned in in partial releases of account.
o Increments were given by the Grid System; divisions within each territory usually number I V. Each grid had a closing date.

Upon realizing the need to be more competitive, GTE launched a new aggressive sales strategy.
o Like in the old policy, SRs have to meet their quotas, and in cases of cancelled revenue accounts or advertisements they had to re-establish contact
and renew the same within a fixed period.
o However, under the new policy, If the cancelled revenue accounts were not renewed within the assigned period, these accounts were declared, for a
set period, OPEN TERRITORY to all SRs including the one who reported the cancellation. if not renewed during the open territory period, these
cancelled accounts were deemed no longer "open territory," and they could be referred for handling to contractual salespersons and/or outside
agencies.

The new policy did not sit well with the Union. It demanded that it be given 15 days "to raise questions or objections to or to seek reconsideration of the
sales and administrative practices issued by the Company. GTE granted this request, the Union then sent its proposals for revisions, corrections, and
deletions in the policy that GTE issued.

GTE formulated a new set of Sales Administrative Practices which required SRs to submit individual reports reflecting target revenues as of deadlines (The
initial amount that was required as of the first deadline was Php30k, it was reduced to 20K). This was forwarded to the SRs.

However, none of the SRs submitted the required reports. Instead, the union wrote the company stating that only 1 SR met the 20k quota on the deadline,
and furthermore the schedule [for the deadlines] was not drawn up as a result of an agreement of all concerned.

The Union filed on behalf of the SRs a notice of strike grounded on alleged unfair labor practices of GTE consisting of:
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o Refusal to bargain on unjust sales policies particularly on the failure to meet the 75% of the average sales production for two consecutive years;
o Open territory of accounts;
o Illegal suspension of Brian Pineda, a union officer; and
o Non-payment of eight days' suspension pay increase.

GTE addressed the concerned SRs 6 times individual reports or memoranda reflecting target revenues. After giving them their final warning, the concerned
employees still failed to submit their report, thus they were terminated.
ISSUE:
Do the Unions objections to Company regulations and policies suspend their enforcement and excuse the employees refusal to comply?
HELD/RATIO:
No. In this case, it must thus be conceded that its adoption of a new "Sales Evaluation and Production Policy" was within its management prerogative to regulate,
according to its own discretion and judgment, all aspects of employment, including the manner, procedure and processes by which particular work activities should
be done.

Deliberate disregard or disobedience of rules, defiance of management authority cannot be countenanced. Until and unless the rules or orders are declared to be
illegal or improper by competent authority, the employees ignore or disobey them at their peril. The Court fails to see how the existence of objections made by the
union justify the studied disregard, or willful disobedience by the sales representatives of direct orders of their superior officers to submit reports.

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Atty. Anonuevo | G01 | A.Y. 2016-2017

TOPIC: Construction in favor of Labor

Accordingly, its IRR was implemented. Sec 2 of which reads:

Insular Bank filed an opposition:

(c) The following beneficiaries shall be considered secondary:

ISSUE(S): WON there was violation of the CBA

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