Art.

4 Construction in favor of Labor

Meralco v NLRC
FACTS:
Apolinario Signo was employed by the Manila Electric Company (Meralco) as supervisor-leadman
since 1963. During his 20 year-tenure of service in said company, he had been commended twice for honesty.
However, one time in 1981, he facilitated an “illegal” connection to the house of a certain Fernando De Lara;
the latter received “free” service of electricity for a year since he was not billed for Meralco’s services. This
irregularity was later discovered and so in 1983, Signo was fired by Meralco on the ground of breach of trust
and loss of confidence which are grounds for termination under the Labor Code.
Signo filed a case for illegal dismissal and for backwages. The Labor Arbiter ruled that though there
is breach of trust on the part of Signo, dismissal is too harsh a penalty considering that Signo has been
employed by Meralco for 20 years; that except for that one time infraction, Signo had a clean slate with
Meralco. On appeal, The National Labor Relations Commission (NLRC) affirmed the factual findings of the
Labor Arbiter. Meralco questioned the validity of the NLRC decision before the Supreme Court.
ISSUE:
Whether the decision of NLRC is correct
RULING:
YES. The power to dismiss is the normal prerogative of the employer. An employer, generally, can
dismiss or lay-off an employee for just and authorized causes enumerated under Articles 282 and 283 of the
Labor Code. However, the right of an employer to freely discharge his employees is subject to regulation by
the State, basically in the exercise of its paramount police power. This is so because the preservation of the
lives of the citizens is a basic duty of the State, more vital than the preservation of corporate profits.
Nevertheless, dismissal should not be imposed, as it is too severe a penalty if the latter has been employed
for a considerable length of time in the service of his employer. In view of the foregoing, reinstatement of
respondent Signo is proper in the instant case, but without the award of backwages, considering the good
faith of the employer in dismissing the respondent.

Abella v NLRC
FACTS:
Petitioner Abella leased a farmland from Ramona for a period of 10 years and renewable for another
10 years at the option of the former. Abella hired the private respondents Quitco and Dionele. Abella
renewed the lease for another ten years. At the expiration of the lease, she dismissed both private
respondents and turned over the hacienda to the owners. Private respondents filed a complaint against
petitioner for overtime pay, reinstatement, and illegal dismissal.
ISSUE:
Whether respondents are entitled to separation pay
RULING:
YES. The Court upheld the ruling of the Labor Arbiter that Article 284 is the applicable law in this case.
It is well-settled that in the implementation and interpretation of the provisions of the Labor Code and its
implementing regulations, the workingman's welfare should be the primordial and paramount
consideration. It is the kind of interpretation which gives meaning and substance to the liberal and
compassionate spirit of the law as provided for in Article 4 of the New Labor Code. The policy is to extend
the applicability of the decree to a greater number of employees who can avail of the benefits under the
law, which is in consonance with the avowed policy of the State to give maximum aid and protection to labor.

Euro-Linea Philippines Inc. v NLRC

FACTS:
Petitioner Euro-Linea Phil, Inc hired private respondent Pastoral as shipping expediter on a
probationary basis for a period of six months. However, Pastoral received a memorandum terminating his
probationary employment in view of his failure “to meet the performance standards set by the company”.
Pastoral filed a complaint for illegal dismissal against petitioner. The Labor Arbiter found petitioner guilty of
illegal dismissal. Petitioner appealed the decision to the NLRC, but the appeal was dismissed. Hence the
petition for review seeking to reverse and set aside the resolution of public respondent NLRC, affirming the
decision of the Labor Arbiter, which ordered the reinstatement of complainant with six months backwages.
ISSUE:
Whether NLRC acted with grave abuse of discretion in ruling against the dismissal of the respondent,
a temporary or probationary employee, by his employer.
RULING:
YES. Although a probationary or temporary employee has a limited tenure, he still enjoys the
constitutional protection of security of tenure. In interpreting the Constitution’s protection to labor and
social justice provisions and the labor laws and rules and regulations implementing the constitutional
mandate, the SC adopts the liberal approach which favors the exercise of labor rights.

Manila Electric Company v NLRC

 GR 78752 CANNOT be found

 Same date and title with MERALCO v NLRC (1st Case under Art 4)