Labor Relations | Czeska Johann G.

Co, SBU-3S

Case Facts Doctrine

Francisco vs Francisco hired as Tests to determine the existence of an E-E relationship:
NLRC accountant, corporate
secretary and liason 1. Right of Control Test - the person for whom the services are performed reserves a
p. 2-3 officer. Her salary was right to control not only the end to be achieved but also the means to be used in reaching
diminished until waley such end.
na. 2. Two-tiered test – involves (1) the putative employer's power to control the employee
with respect to the means and methods by which the work is to be accomplished; and (2)
Kasie Corp claims the underlying economic realities of the activity or relationship.
technical consultant
lang daw siya. The proper standard of economic dependence is whether the worker is dependent on
the alleged employer for his continued employment in that line of business.
Issues: Was there E-E
rel? YES It is apparent that petitioner is economically dependent on respondent corporation for
Was she illegally her continued employment in the latter's line of business.
dismissed? YES
A diminution of pay is prejudicial to the employee and amounts to constructive dismissal.
Sonza vs SONZA and ABS-CBN The elements of an employer- employee relationship are:
ABS-CBS entered into an
agreement. SONZA to (a) the selection and engagement of the employee;
pps. 4-6 be co-host in Mel & Jay (b) the payment of wages;
radio program. (c) the power of dismissal; and
(d) the employer's power to control the employee on the means and methods by which
SONZA resigned from the work is accomplished. (control test)
MJMDC. MJMDC gave
notice of rescission to The control test is the most important test our courts apply in distinguishing an
ABS-CBN. employee from an independent contractor.

This test is based on the extent of control the hirer exercises over a worker. The greater
the supervision and control the hirer exercises, the more likely the worker is deemed an
employee. The converse holds true as well — the less control the hirer exercises, the more
likely the worker is considered an independent contractor.
Locsin vs Security guards Petitioners remained at their post even after the termination of the Agreement.
PLDT remained in post after
agreement between Respondent dictated upon petitioners that the latter perform their regular duties to
P 6-7 PLDT and Security secure the premises during operating hours.
Services was
terminated. The power of control has been explained as the "right to control not only the end to be
achieved but also the means to be used in reaching such end".
Citibank vs Security agency’s The Labor Arbiter has no jurisdiction over a claim filed where no employer-employee
CA contract was not relationship existed between a company and the security guards assigned to it by a
renewed by Citibank. security service contractor.
p. 7
Security guards A labor dispute "includes any controversy or matter concerning terms of conditions of
threatened to hold a employment or the association or representation of persons in negotiating, fixing,
strike. maintaining, changing or arranging the terms and conditions of employment, regardless
of whether the disputants stand in the proximate relation of employer and employee."
Security guard loitered
around the area. No E-E, no labor dispute. Jurisdiction over the subject matter of the complaint lies with
the regional trial court.
PAL vs NLRC Private respondents, by their length of service and the nature of work performed, had
become regular employees whose services cannot be terminated except for cause and
p. 7-8 that the existence of redundancy renders their dismissal valid and that they are entitled
only to separation pay and not to backwages pursuant to Article 283 of the Labor Code
payable jointly and severally by petitioner and G.C. Services Enterprises.

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 Labor Relations | Czeska Johann G. Co, SBU-3S

Redundancy, for purposes of our Labor code, exists where the services of an employee
are in excess of what is reasonably demanded by the actual requirements of the
enterprise. Succinctly put, a position is redundant where it is superfluous

Austria vs
NLRC

Halagueña vs
PAL
People’s
Broadcasting
Services vs
Sec of Labor
Kawachi vs
Del Quero

McBurnie vs
Ganzon

Sara Lee PH
vs Macatlang

Lepanto Substantially compliance with the mandatory requirement of posting an appeal bond is
Consolidated allowed.
Mining vs Icao
This ruling remains faithful to the spirit behind the appeal bond requirement which is to
ensure that workers will receive the money awarded in their favor when the employer's
appeal eventually fails.
Sadol vs The rules of technicality must yield to the broader interest of justice. It is only by giving
Pilipinas Kao due course to the motion for reconsideration that was timely filed that the NLRC may be
able to equitably evaluate the conflicting versions of facts presented by the parties.

Ong vs CA The posting of cash or surety bond is not only mandatory but jurisdictional as well, and
non-compliance therewith is fatal and has the effect of rendering the judgment final and
executory.

Yupangco
Cotton Mills
vs CA

Ando vs NLRC judgment was THE COURTS CANNOT ISSUE AN INJUNCTION ON DECISIONS OF THE LA/NLRC.
Campo rendered against corp. Regular courts have no jurisdiction to hear and decide questions which arise from and are
incidental to the enforcement of decisions, orders, or awards (DOA) rendered in labor
Writ of execution issued cases by appropriate officers and tribunals of the DOLE.
on petiitoner’s conjugal
property, as president The power of the NLRC, or the courts, to execute its judgment extends only to
of the corporation. He properties unquestionably belonging to the judgment debtor alone. A sheriff,
filed an injunction on therefore, has no authority to attach the property of any person except that of the
write of execution. judgment debtor.

PAL vs NLRC The power of the NLRC to issue an injunctive writ originates from "any labor dispute"
upon application by a party thereof, which application if not granted "may cause grave or
irreparable damage to any party or render ineffectual any decision in favor of such party."

It is an essential requirement that there must first be a labor dispute between the
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 Labor Relations | Czeska Johann G. Co, SBU-3S

contending parties before the labor arbiter.

The jurisdiction of the NLRC in illegal dismissal cases is appellate in nature and,
therefore, it cannot entertain the private respondents' petition for injunction which
challenges the dismissal orders of petitioner.

Pfizer, Inc vs An award or order of reinstatement is immediately self-executory without the need for
Velasco the issuance of a writ of execution.

Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is

obligatory on the part of the employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until reversal by the higher court.
Diamond Taxi
vs Llamas

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 Labor Relations | Czeska Johann G. Co, SBU-3S

Francisco vs NLRC In addition to the standard of right-of-control, the existing

economic conditions prevailing between the parties, like the
FACTS: Petitioner was hired by Kasei Corporation as its
inclusion of the employee in the payrolls, can help in determining
Accountant and Corporate Secretary. She was assigned to
the existence of an employer-employee relationship.
handle all the accounting needs of the company. She was also
designated as Liaison Officer to the City of Makati to secure
2. Two-tiered test – involves (1) the putative employer's power
business permits, construction permits and other licenses for the
to control the employee with respect to the means and methods
initial operation of the company.
by which the work is to be accomplished; and (2) the underlying
economic realities of the activity or relationship.
Although she was designated as Corporate Secretary, she was
not entrusted with the corporate documents.
Takes into consideration the totality of circumstances
surrounding the true nature of the relationship between the
Later, petitioner was designated Acting Manager.
parties.
In January 2001, petitioner was replaced as Manager. Petitioner
This is especially appropriate in this case where there is no
alleged that she was required to sign a prepared resolution for
written agreement or terms of reference to base the relationship
her replacement but she was assured that she would still be
on; and due to the complexity of the relationship based on the
connected with Kasei Corporation.
various positions and responsibilities given to the worker over
the period of the latter's employment.
Thereafter, Kasei Corporation reduced her salary by P2,500.00 a
month beginning January up to September 2001 for a total
The determination of the relationship between employer and
reduction of P22,500.00 as of September 2001. Petitioner was
employee depends upon the circumstances of the whole
not paid her mid-year bonus allegedly because the company was
economic activity, such as:
not earning well. On October 2001, petitioner did not receive her
(1) the extent to which the services performed are an integral
salary from the company. She made repeated follow-ups with
part of the employer's business;
the company cashier but she was advised that the company was
(2) the extent of the worker's investment in equipment and
not earning well. When she asked for her salary from the
facilities;
accountant, she was informed that she is no longer connected
(3) the nature and degree of control exercised by the employer;
with the company.
(4) the worker's opportunity for pro t and loss;
(5) the amount of initiative, skill, judgment or foresight required
She filed a case for illegal dismissal against Kasei Corp.
for the success of the claimed independent enterprise;
(6) the permanency and duration of the relationship between the
Kasei Corp defenses: Petitioner is not an employee of Kasei
worker and the employer; and
Corporation. She was hired as a technical consultant. As
(7) the degree of dependency of the worker upon the employer
technical consultant, she performed her work without control
for his continued employment in that line of business.
and supervision of the company. Petitioner had no daily time
record and she came to the office any time she wanted.
The proper standard of economic dependence is whether the
Petitioner did not go through the usual procedure of selection of
worker is dependent on the alleged employer for his
employees, but her services were engaged through a Board
continued employment in that line of business.
Resolution designating her as technical consultant. The money
she received was her professional fee. Her services were only
Can she be considered an employee under the:
temporary. Not among the list of employees.
Control Test: YES
LA: In favor of Francisco
NLRC: In favor of Francisco
- she was under the direct control and supervision of Seiji
CA: In favor of Kasei Corp
Kamura, the corporation's Technical Consultant.;
- she reported for work regularly and served in various
ISSUES: 1) Whether there was an employer-employee
capacities;
relationship between petitioner and private respondent Kasei
- performing functions necessary and desirable for the proper
Corporation; and if in the affirmative, (2) Whether petitioner was
operation of the corporation
illegally dismissed.
Economic Reality Test: YES
RULING: 1) Yes
2) Yes
- she had served the company for six years before her dismissal
- receiving check vouchers indicating her salaries/wages,
Tests to determine the existence of an E-E relationship:
benefits, 13th month pay, bonuses and allowances, as well as
deductions and Social Security contributions
1. Right of Control Test - the person for whom the services are
- petitioner's membership in the SSS
performed reserves a right to control not only the end to be
achieved but also the means to be used in reaching such end.
4

It is therefore apparent that petitioner is economically
dependent on respondent corporation for her continued
employment in the latter's line of business.
The coverage of Social Security Law is predicated on the
existence of an employer-employee relationship.
The actual nature of petitioner's job was as Kamura's direct
assistant with the duty of acting as Liaison Officer in
representing the company to secure construction permits,
license to operate and other requirements imposed by
government agencies.
Based on the foregoing, there can be no other conclusion that
petitioner is an employee of respondent Kasei Corporation. She
was selected and engaged by the company for compensation,
and is economically dependent upon respondent for her
continued employment in that line of business. Her main job
function involved accounting and tax services rendered to
respondent corporation on a regular basis over an indefinite
period of engagement. Respondent corporation hired and
engaged petitioner for compensation, with the power to dismiss
her for cause. More importantly, respondent corporation had the
power to control petitioner with the means and methods by
which the work is to be accomplished.
Constructive Dismissal:
The corporation constructively dismissed petitioner when it
reduced her salary by P2,500 a month from January to
September 2001.
This amounts to an illegal termination of employment, where
the petitioner is entitled to full backwages. Since the position
of petitioner as accountant is one of trust and confidence, and
under the principle of strained relations, petitioner is further
entitled to separation pay, in lieu of reinstatement.
There is constructive dismissal.
A diminution of pay is prejudicial to the employee and amounts
to constructive dismissal. Constructive dismissal is an
involuntary resignation resulting in cessation of work resorted to
when continued employment becomes impossible, unreasonable
or unlikely; when there is a demotion in rank or a diminution in
pay; or when a clear discrimination, insensibility or disdain by an
employer becomes unbearable to an employee.
Labor Relations | Czeska Johann G. Co, SBU-3S
Sonza vs ABS-CBS
FACTS: ABS-CBN and MJMDC (Mel and Jay Management and
Development Corporation) entered into an agreement for Jose Y.
Sonza ("SONZA") to provide her services exclusively to ABS-CBN
as talent for radio and television as co-host for Mel & Jay radio
program. ABS-CBS would pay SONZA his talent fees.
As SONZA resigned from MJMDC, he also sent a letter rescinding
the agreement to ABS-CBN.
SONZA led a complaint against ABS-CBN before the DOLE for
his unpaid salaries, separation pay, service incentive leave pay,
13th month pay, signing bonus, travel allowance and amounts
due under the Employees Stock Option Plan ("ESOP").
LA: Lack of jurisdiction
NLRC: the regular courts have jurisdiction and not the NLRC
Sonza’s contention: the Labor Arbiter has jurisdiction over the
case because he was an employee of ABS-CBN.
ABS-CBN’s contention: the Labor Arbiter has no jurisdiction
because SONZA was an independent contractor.
ISSUE: Is there an employer-employee relationship between
SONZA and ABS-CBN? YES
RULING: The elements of an employer- employee relationship
are:
(a) the selection and engagement of the employee;
(b) the payment of wages;
(c) the power of dismissal; and
(d) the employer's power to control the employee on the means
and methods by which the work is accomplished.
The last element, the so-called "control test", is the most
important element.
1. Selection and engagement of the employee
The specific selection and hiring of SONZA, because of his
unique skills, talent and celebrity status not possessed by
ordinary employees, is a circumstance indicative, but not
conclusive, of an independent contractual relationship. If SONZA
did not possess such unique skills, talent and celebrity status,
ABS-CBN would not have entered into the Agreement with
SONZA but would have hired him through its personnel
department just like any other employee.
2. Payment of Wages
All the talent fees and benefits paid to SONZA were the result of
negotiations that led to the Agreement. If SONZA were ABS-
CBN's employee, there would be no need for the parties to
stipulate on benefits such as "SSS, Medicare, . . . and 13th
month pay" which the law automatically incorporates into
every employer-employee contract. Whatever benefits SONZA
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enjoyed arose from contract and not because of an employer-
employee relationship.
SONZA's talent fees, amounting to P317,000 monthly in the
second and third year, are so huge and out of the ordinary that
they indicate more an independent contractual relationship
rather than an employer-employee relationship. ABS-CBN
agreed to pay SONZA such huge talent fees precisely because of
SONZA's unique skills, talent and celebrity status not possessed
by ordinary employees. Obviously, SONZA acting alone
possessed enough bargaining power to demand and receive such
huge talent fees for his services.
The power to bargain talent fees way above the salary scales of
ordinary employees is a circumstance indicative, but not
conclusive, of an independent contractual relationship.
The payment of talent fees directly to SONZA and not to MJMDC
does not negate the status of SONZA as an independent
contractor. The parties expressly agreed on such mode of
payment.
3. Power of dismissal
For violation of any provision of the Agreement, either party may
terminate their relationship. SONZA failed to show that ABS-
CBN could terminate his services on grounds other than
breach of contract, such as retrenchment to prevent losses as
provided under labor laws.
Even if it suffered severe business losses, ABS-CBN could not
retrench SONZA because ABS-CBN remained obligated to pay
SONZA's talent fees during the life of the Agreement. This
circumstance indicates an independent contractual relationship
between SONZA and ABS-CBN.
SONZA admits that even after ABS-CBN ceased broadcasting his
programs, ABS- CBN still paid him his talent fees.
SONZA did not merely resign, he also rescinded the agreement,
as president of MJMDC.
4. Power of Control
Foreign case law was used in analyzing the present case.
SONZA is not an employee but an independent contractor.
The control test is the most important test our courts apply in
distinguishing an employee from an independent contractor.
This test is based on the extent of control the hirer exercises over
a worker. The greater the supervision and control the hirer
exercises, the more likely the worker is deemed an employee.
The converse holds true as well — the less control the hirer
exercises, the more likely the worker is considered an
independent contractor.
Labor Relations | Czeska Johann G. Co, SBU-3S
First, ABS-CBN engaged SONZA's services specifically to co-host
the "Mel & Jay" programs. ABS-CBN did not assign any other
work to SONZA. How SONZA delivered his lines, appeared on
television, and sounded on radio were outside ABS-CBN's
control. SONZA did not have to render eight hours of work per
day.
ABS-CBN could not dictate the contents of SONZA's script.
The clear implication is that SONZA had a free hand on what to
say or discuss in his shows provided he did not attack ABS-CBN
or its interests.
ABS-CBN did not instruct SONZA how to perform his job.
ABS-CBN's sole concern was the quality of the shows and their
standing in the ratings. Clearly, ABS-CBN did not exercise
control over the means and methods of performance of
SONZA's work.
ABS-CBN’s power not to broadcast his shows: ABS-CBN was
still obligated to pay SONZA's talent fees.
ABS-CBN could not dismiss or even discipline SONZA.
ABS-CBN could not terminate or discipline SONZA even if the
means and methods of performance of his work — how he
delivered his lines and appeared on television — did not meet
ABS-CBN's approval.
This proves that ABS-CBN's control was limited only to the
result of SONZA's work, whether to broadcast the final
product or not. In either case, ABS-CBN must still pay SONZA's
talent fees in full until the expiry of the Agreement.
Since the management did not have control over the manner of
performance of the skills of the artists, it could only control the
result of the work by deleting objectionable features.
ABS-CBN supplied the equipment and crew: The equipment,
crew and airtime are not the "tools and instrumentalities"
SONZA needed to perform his job. What SONZA principally
needed were his talent or skills and the costumes necessary for
his appearance.
Second, as to the claim that ABS-CBN subjected SONZA to its
rules and standards of performance:
The Agreement stipulates that SONZA shall abide with the rules
and standards of performance "covering talents" of ABS-CBN.
The Agreement does not require SONZA to comply with the
rules and standards of performance prescribed for employees of
ABS- CBN.
The rules and standards of performance referred to in the
Agreement are those applicable to talents and not to employees
of ABS-CBN.
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 Labor Relations | Czeska Johann G. Co, SBU-3S

In any event, not all rules imposed by the hiring party on the
hired party indicate that the latter is an employee of the former.
Locsin vs PLDT
SONZA failed to show that these rules controlled his
FACTS: (1990) PLDT and Security and Safety Corporation of the
performance.
Philippines (SSCP) entered into a Security Services Agreement
(Agreement) whereby SSCP would provide armed security
Lastly, on claim of exclusivity clause: Being an exclusive talent
guards to PLDT to be assigned to its various offices.
does not by itself mean that SONZA is an employee of ABS-CBN.
Even an independent contractor can validly provide his services
Petitioners were among the security guards posted to a PLDT
exclusively to the hiring party. In the broadcast industry,
office.
exclusivity is not necessarily the same as control.
Respondent issued a letter terminating the agreement.
There is not labor-only contracting.
Despite the termination of the Agreement, however, petitioners
In a labor-only contract, there are three parties involved:
continued to secure the premises of their assigned office. They
(1) the "labor-only" contractor;
were allegedly directed to remain at their post by representatives
(2) the employee who is ostensibly under the employ of the
of respondent.
"labor-only" contractor; and
(3) the principal who is deemed the real employer.
They had pay slips.
Under this scheme, the "labor-only" contractor is the agent of
Petitioners services were terminated.
the principal. The law makes the principal responsible to the
employees of the "labor-only contractor" as if the principal itself
Petitioners filed a complaint before the Labor Arbiter for illegal
directly hired or employed the employees.
dismissal and recovery of money claims such as overtime pay,
holiday pay, premium pay for holiday and rest day, service
There are essentially only two parties involved under the
incentive leave pay, Emergency Cost of Living Allowance, and
Agreement, namely, SONZA and ABS-CBN. MJMDC merely
moral and exemplary damages against PLDT.
acted as SONZA's agent. The Agreement expressly states that
MJMDC acted as the "AGENT" of SONZA.
LA: In favor of petitioners. Petitioners were employees of PLDT
and not SSCP.
The records do not show that MJMDC acted as ABS-CBN's agent.
NLRC: same
MJMDC.
CA: reversed 1) SSCP was not a labor-only contractor 2) SSCP
was the one paying petitioners their salaries.
NO VIOLATION ON SECURITY OF TENURE
ISSUE: Whether petitioners became employees of respondent
The right of labor to security of tenure as guaranteed in the
after the Agreement between SSCP and respondent was
Constitution arises only if there is an employer-employee
terminated? YES
relationship under labor laws. Not every performance of services
for a fee creates an employer-employee relationship. To hold
RULING:
that every person who renders services to another for a fee is an
employee — to give meaning to the security of tenure clause —
Petitioners remained at their post even after the termination of
will lead to absurd results.
the Agreement.
Individuals with special skills, expertise or talent enjoy the
Respondent dictated upon petitioners that the latter perform
freedom to offer their services as independent contractors.
their regular duties to secure the premises during operating
The right to life and livelihood guarantees this freedom to
hours.
contract as independent contractors. The right of labor to
security of tenure cannot operate to deprive an individual,
This, to our mind and under the circumstances, is sufficient to
possessed with special skills, expertise and talent, of his right to
establish the existence of an employer-employee relationship.
contract as an independent contractor. An individual like an
artist or talent has a right to render his services without any
It is but reasonable to conclude that, with the behest and,
one controlling the means and methods by which he performs
presumably, directive of respondent, petitioners continued with
his art or craft. This Court will not interpret the right of labor to
their services. Evidently, such are indicia of control that
security of tenure to compel artists and talents to render their
respondent exercised over petitioners.
services only as employees. If radio and television program hosts
can render their services only as employees, the station owners
Such power of control has been explained as the "right to
and managers can dictate to the radio and television hosts what
control not only the end to be achieved but also the means to
they say in their shows. This is not conducive to freedom of the
be used in reaching such end".
press.

7

Evidently, respondent having the power of control over
petitioners must be considered as petitioners' employer — from
the termination of the Agreement onwards — as this was the
only time that any evidence of control was exhibited by
respondent over petitioners and in light of our ruling in Abella.
Petitioners were entitled to the rights and benefits of
employees of respondent, including due process requirements
in the termination of their services.
PLDT made liable.
Citibank vs CA
FACTS: Citibank and El Toro Security Agency, Inc. (hereafter El
Toro) entered into a contract for the latter to provide security
and protective services to safeguard and protect the bank's
premises, situated at Makati, Metro Manila (1983)
Citibank renewed the security contract with El Toro yearly until
1990. On April 22, 1990, the contract between Citibank and El
Toro expired.
Respondent Citibank Integrated Guards Labor Alliance-SEGA-
TUPAS/FSM (hereafter CIGLA) filed with National Conciliation
and Mediation Board (NCMB) a request for preventive
mediation against Citibank for unfair labor practice, dismissal of
union officers/members and union bursting.
Citibank served a notice to El Toro that the bank would not
renew anymore the service agreement with the latter.
Simultaneously, Citibank hired another security agency.
The CIGLA converted its request for preventive mediation into a
notice to strike alleging as supplemental issue the mass
dismissal of all union officers and members.
The security guards of El Toro considered the non-renewal of El
Toro's service agreement with Citibank as constituting a lockout
and/or a mass dismissal. They threatened to go on strike
against Citibank and picket its premises.
CIGLA filed a notice of strike.
Faced with the prospect of disruption of its business operations,
on June 5, 1990, petitioner Citibank filed with the Regional Trial
Court, Makati, a complaint for injunction and damages. (pero
wait, why gauna ilang suit????)
CIGLA’s contention: The Court has no jurisdiction
Citibank’s contention: There is no employer-employee
relationship between Citibank and the security guards
represented by respondent CIGLA and that there is no "labor
dispute" in the subject controversy. The security guards were
employees of El Toro security agency, not of Citibank. Its service
contract with Citibank had expired and not renewed.
RTC: Court has jurisdiction, in favor of Citibank
Labor Relations | Czeska Johann G. Co, SBU-3S
CA: in favor of CIGLA, court has no jurisdiction
ISSUE: Who has jurisdiction over the case? RTC
Is there a labor dispute? NO
RULING: There is no employer-employee relationship.
The Labor Arbiter has no jurisdiction over a claim filed where
no employer-employee relationship existed between a
company and the security guards assigned to it by a security
service contractor.
In this case, it was the security agency El Toro that recruited,
hired and assigned the watchmen to their place of work. It was
the security agency that was answerable to Citibank for the
conduct of its guards.
THERE IS NO LABOR DISPUTE.
Article 212, paragraph 1 of the Labor Code provides the definition
of a "labor dispute". It "includes any controversy or matter
concerning terms of conditions of employment or the association
or representation of persons in negotiating, fixing, maintaining,
changing or arranging the terms and conditions of employment,
regardless of whether the disputants stand in the proximate
relation of employer and employee."
If at all, the dispute between the Citibank and El Toro security
agency is one regarding the termination or non-renewal of the
contract of services. This is a civil dispute. El Toro was an
independent contractor. Thus, no employer-employee
relationship existed between Citibank and the security guards
members of the union in the security agency who were assigned
to secure the bank's premises and property. Hence, there was
no labor dispute and no right to strike against the bank.
Jurisdiction over the subject matter of the complaint lies with
the regional trial court.
PAL vs NLRC
Private respondent: National Organization of the Workingmen
(NOWM) is a labor union
FACTS: Private respondents, together with several others, were
employed by petitioner pursuant to a service contract with G.C.
Services Enterprises.
They were consequently dismissed upon the termination of the
service contract.
PAL decided to give G.C. Services employees the opportunity to
apply as regular employees
PAL reemployed 23 original complainants, but the remaining 12,
including private respondents, were not absorbed because
there were no more available vacant positions.
8

Those who were not hired filed the instant complaint for illegal
dismissal.
Respondents’ contention: PAL is their real employer, G.C.
Services is only an agent of PAL because it does not have
substantial capital; they were supervised, directed and controlled
by PAL regular employees, They were illegally dismissed.
PAL’s contention: It cannot be compelled to give employment
to a greater number of persons than the economic operations of
its business requires.
LA: G.C. Services is a labor-only contractor and a mere agent of
PAL, respondents are employees of PAL. Termination was illegal.
NLRC: Same
ISSUE: W/N there is an E-E Relationship between respondents
and PAL? YEP
Were they illegally dismissed? Who knows?
RULING:
1. Respondents were employees of PAL. G.C. Services is a
mere labor-only contractor.
Private respondents were performing work and activities which
are directly related to its nature of business. Their jobs are
directly necessary to the daily operation of petitioner's business.
They worked for a period ranging from 1 year and 4 months to 11
years and 10 months as clerks, carpenters, painters, electricians
and assigned them to its maintenance shop and were supervised,
directed and controlled by PAL regular employees.
G.C. Services Enterprises is merely a "labor-only" contractor who
acted as mere supplier of manpower for petitioner at its
maintenance department.
2. Respondents are deemed regular employees.
Further, private respondents, having performed activities which
are directly related to petitioner's business, are deemed regular
employees of petitioner pursuant to Article 280 of the Labor
Code.
What the fork is redundancy??? What??? Labor term ba to? There is
redundancy. So yeah pabalik balik. SO whut?
3. The existence of redundancy renders their dismissal valid
Termination was legal.
Redundancy is an authorized cause for termination under
Article 283.
Redundancy, for purposes of our Labor code, exists where the
services of an employee are in excess of what is reasonably
demanded by the actual requirements of the enterprise.
Succinctly put, a position is redundant where it is superfluous
Labor Relations | Czeska Johann G. Co, SBU-3S
and the superfluity of a position or positions may be the outcome
of a number of factors, such as over-hiring of workers . . . The
employer has no legal obligation to keep in its payroll more
employees than are necessary for the operation of its business.
The services of private respondents were already in excess of
what is reasonably demanded by the actual manpower
requirement of petitioner.
4. Respondents are entitled only to separation pay and not to
backwages
Art 298: On the other hand, an employee whose services is
terminated due to any under Article 283 is "entitled to a
separation pay equivalent to at least his one (1) month pay or to
at least one (1) month pay for every year of service, whichever is
higher".
5. G.C. Services Enterprises is jointly and severally liable
The reason is that G.C. Services Enterprises, being a 'labor only'
contractor, is merely an agent of the petitioner (the employer);
the resultant "liability must be shouldered by either one or
shared by both". 20 Hence, petitioner cannot avoid liability by
invoking its Service Agreement with G.C. Services Enterprises
considering that here the liability is imposed by law.
McBurnie
Sara Lee
x
Lepanto Consolidated Mining Corp vs
Icao
GR No. 196047, January 15, 2014
CJ Sereno
FACTS: Private respondent was a lead miner in one of
petitioner’s mines. He was charged with "highgrading" or the act
of concealing, possessing or unauthorized extraction of
highgrade material/ore without proper authority. Private
respondent denied the charge. Consequently, he was dismissed
from his work.
Btw, a hearing was conducted by the company.
Respondent filed a complaint for illegal dismissal and damages
against petitioner Lepanto and its CEO, Felipe Uy before the
Arbitration Branch of the NLRC.
LA: Illegal dismissal. Full backwages and separation pay.
Petitioner and its CEO led an Appearance with Memorandum of
Appeal before the NLRC.
9

Instead of posting the required appeal bond, petitioner and its
CEO they led a Consolidated Motion for Release of Cash Bond
and to Apply Bond Subject for Release As Payment for Appeal
Bond (Consolidated Motion).
They requested therein that the NLRC release the cash bond
which they had posted in the separate case and apply that same
cash bond to their present appeal bond liability. They reasoned
that since this Court had already decided Dangiw Siggaao in their
favor, and that the ruling therein had become final and
executory, the cash bond posted therein could now be released.
They also cited financial difficulty as a reason for resorting to
this course of action and prayed that, in the interest of justice,
the motion be granted.
NLRC: Dismissed the appeal for non-perfection. They failed to
post the required appeal bond equivalent to the monetary award.
The Consolidated Motion for the release of the cash bond in
another case (Dangiw Siggaao), for the purpose of applying the
same bond to the appealed case before it, could not be
considered as compliance with the requirement to post the
required appeal bond, as the application or posting is subject
to the condition that the cash bond would be released.
Consequently, it declared the labor arbiter's Decision to be final
and executory.
Petitioner’s contention: They had tried to comply in good faith
with the requisite appeal bond by trying to produce a cash bond
anew and also to procure a new surety bond. However, after
canvassing several bonding companies, the costs have proved to
be prohibitive.
ISSUE: Whether or not petitioner complied with the appeal
bond requirement under the Labor Code and the NLRC Rules by
ling a Consolidated Motion to release the cash bond it posted in
another case, which had been decided with finality in its favor,
with a view to applying the same cash bond to the present case.
RULING: Yes
Intro: An appeal is not a matter of right, but is a mere statutory
privilege. It may be availed of only in the manner provided by law
and the rules. Thus, a party who seeks to exercise the right to
appeal must comply with the requirements of the rules;
otherwise, the privilege is lost.
The intention
of the lawmakers to make the bond an indispensable requisite for
the perfection of an appeal by the employer, is clearly limned in
the provision that an appeal by the employer may be perfected
"only upon the posting of a cash or surety bond." The word "only"
makes it perfectly clear, that the lawmakers intended the posting
of a cash or surety bond by the employer to be the exclusive
means by which an employer's appeal may be perfected.
Labor Relations | Czeska Johann G. Co, SBU-3S
While it is true that the procedure undertaken by petitioner is
not provided under the Labor Code or in the NLRC Rules, we
rule that petitioner substantially complied with the
mandatory requirement of posting an appeal bond for the
reasons explained below.
First, there is no question that the appeal was filed within the 10-
day reglementary period. Except for the alleged failure to post
an appeal bond, the appeal to the NLRC was therefore in order.
Second, it is also undisputed that petitioner has an
unencumbered amount of money in the form of cash in the
custody of the NLRC.
Under the Rule VI, Section 6 of the 2005 NLRC Rules, "[a] cash or
surety bond shall be valid and effective from the date of
deposit or posting, until the case is finally decided, resolved or
terminated, or the award satisfied."
Hence, it is clear that a bond is encumbered and bound to a case
only for as long as 1) the case has not been finally decided,
resolved or terminated; or 2) the award has not been satisfied.
Therefore, once the appeal is finally decided and no award
needs to be satisfied, the bond is automatically released. Since
the money is now unencumbered, the employer who posted it
should now have unrestricted access to the cash which he may
now use as he pleases — as appeal bond in another case, for
instance. This is what petitioner simply did.
Third, the cash bond in the amount of P401,610.84 posted in
Dangiw Siggaao is more than enough to cover the appeal bond in
the amount of P345,879.45 required in the present case.
Fourth, this ruling remains faithful to the spirit behind the appeal
bond requirement which is to ensure that workers will receive the
money awarded in their favor when the employer's appeal
eventually fails. There was no showing at all of any attempt on
the part of petitioner to evade the posting of the appeal bond.
On the contrary, petitioner's move showed a willingness to
comply with the requirement. Hence, the welfare of Icao is
adequately protected.
In this case we are not even exempting petitioner from the
rule, as in fact we are enforcing compliance with the posting of
an appeal bond. We are simply liberally applying the rules on
what constitutes compliance with the requirement, given the
special circumstances surrounding the case as explained above.
Sadol vs Pilipinas Kao, Inc.
GR No. 87530, June 13, 1990
Justice Gancayco
FACTS: Petitioner was a laborer of private respondents. He was
allegedly summarily dismissed. he filed a complaint for
reinstatement and backwages with the DOLE Regional Office of
CDO.
10

The labor arbiter ordered all parties to submit their position
papers.
Only petitioner complied.
Petitioner filed an urgent motion that the failure of respondent
to file their position papers is a waiver and so judgment should be
rendered in favor of petitioner.
LA rendered a decision: ordering private respondents to jointly
and solidarily pay petitioner his separation pay
Petitioner appealed.
PKI appealed.
NLRC: PKI’s appeal was dismissed. PKI was ordered to reinstate
petitioner to his former position with full backwages from the
time of dismissal up to his actual reinstatement.
Respondent PKI filed MR on the dismissal of the appeal.
NLRC: case is dismissed for lack of merit. No illegal dismissal.
Petitioner filed MR.
Petitioner’s contention: respondent's appeal having been filed
out of time its motion for reconsideration of the decision should
not have been entertained as it raised issues for the first on
appeal which were not raised before the labor arbiter.
ISSUE: Whether or not a party who failed to appeal from a
decision of the labor arbiter to the National Labor Relations
Commission (NLRC) within the ten (10) day reglementary period
can still participate in a separate appeal timely interposed by the
adverse party by filing a motion for reconsideration of a decision
of the NLRC on such appeal??
Otherwise stated, having lost the right to appeal can respondent
PKI file a motion for reconsideration of said decision?
RULING: YES
The rules of technicality must yield to the broader interest of
justice. It is only by giving due course to the motion for
reconsideration that was timely filed that the NLRC may be
able to equitably evaluate the conflicting versions of facts
presented by the parties.
The decision of the labor arbiter became final by the failure to
respondent PKI to appeal on time, and the NLRC may no longer
amend, modify, much less set aside the same. However, this
posture is correct insofar as respondent PKI is concerned.
As petitioner had filed a timely appeal, the NLRC had jurisdiction
to give due course to his appeal and render the decision of
August 28, 1988, a copy of which was furnished respondents.
Findings in administrative case: complainant abandoned his job
to look for greener pastures and it was only when he failed to find
such opportunity that he came back to demand that he be
Labor Relations | Czeska Johann G. Co, SBU-3S
allowed to resume the employment which he unceremoniously
abandoned.
Ong vs CA
GR No. 152493, September 22, 2004
FACTS: Petitioner is the sole proprietor of Milestone Metal
Manufacturing (Milestone), which manufactures, among others,
wearing apparels, belts, and umbrellas.
Sometime in May 1998, the business suffered very low sales and
productivity because of the economic crisis in the country.
Hence, it adopted a rotation scheme by reducing the workdays of
its employees to three days a week or less for an indefinite
period.
The 15 respondents filed before the NLRC complaints for illegal
dismissal, underpayment of wages, non- payment of overtime
pay, holiday pay, service incentive leave pay, 13th month pay,
damages, and attorney's fees against petitioner.
The cases were consolidated.
Petitioner contentions: Some were not employees of Milestone
and the rest were not dismissed from employment; rather, they
refused to work after the rotation scheme was adopted.
LA: Respondents were illegally dismissed. Awarded monetary
award of separation pay.
Petitioner filed with the NLRC a notice of appeal with a
memorandum of appeal and paid the docket fees therefor.
However, instead of posting the required cash or surety bond,
he filed a motion to reduce the appeal bond.
NLRC: Denied the motion to reduce bond and dismissed the
appeal for failure to post cash or surety bond within the
reglementary period.
Petitioner content that the amount of the bond was unjustified
and prohibitive.
ISSUE: Was the petitioner deprived of the chance to post bond
because the NLRC took 102 days to decide his motion?
RULING: NO.
Time and again it has been held that the right to appeal is not a
natural right or a part of due process, it is merely a statutory
privilege, and may be exercised only in the manner and in
accordance with the provisions of law. The party who seeks to
avail of the same must comply with the requirements of the
rules. Failing to do so, the right to appeal is lost.
Art 223 of the Labor Code and the New Rules of Procedure of the
NLRC provides that an appeal by the employer may be perfected
only upon the posting of a cash or surety bond.
11
 Labor Relations | Czeska Johann G. Co, SBU-3S

Section 6, Rule VI of the NLRC's New Rules of Procedure allows

the Commission to reduce the amount of the bond, the exercise
of the authority is not a matter of right on the part of the movant Yupangco
but lies within the sound discretion of the NLRC upon showing of
meritorious grounds.
Ando vs Campo
The NLRC did not act with grave abuse of discretion when it
GR No. 184007, February 16, 2011
denied petitioner's motion for the same failed to either elucidate
Justice Nachura
why the amount of the bond was "unjustified and prohibitive" or
to indicate what would be a "reasonable level."
FACTS: Petitioner was the president of Premier Allied and
Contracting Services, Inc. (PACSI), an independent labor
"A substantial monetary award, even if it runs into millions, does
contractor.
not necessarily give the employer-appellant a "meritorious case"
and does not automatically warrant a reduction of the appeal
Respondents were hired by PACSI as pilers or haulers tasked to
bond."
manually carry bags of sugar from the warehouse of Victorias
Milling Company and load them on trucks.
In a judgment involving a monetary award, the appeal shall be
perfected only upon (1) proof of payment of the required appeal
Respondents were dismissed from employment.
fee; (2) posting of a cash or surety bond issued by a reputable
bonding company; and (3) ling of a memorandum of appeal. A
They filed a case for illegal dismissal and some money claims
mere notice of appeal without complying with the other
with the NLRC Regional Arbitration Branch in Bacolod City.
requisites mentioned shall not stop the running of the period for
perfection of appeal.
LA: in favor of respondents. PACSI and petitioner were directed
to pay a total of P422,702.28, representing respondents'
The posting of cash or surety bond is not only mandatory but
separation pay and the award of attorney's fees.
jurisdictional as well, and non-compliance therewith is fatal
and has the effect of rendering the judgment final and
Petitioner and PACSI appealed to the NLRC.
executory.
NLRC: Petitioner failed to perfect his appeal because he did not
The word "only" makes it perfectly clear that the lawmakers
pay the supersedeas bond. Affirmed.
intended the posting of a cash or surety bond by the employer to
be the exclusive means by which an employer's appeal may be
NLRC Sheriff issued a Notice of Sale on Execution of Personal
perfected.
Property on the property of petitioner.
Petitioner did NOT seasonably file the appeal bond.
This prompted petitioner to file an action for prohibition and
damages with prayer for the issuance of a temporary restraining
The fact that the NLRC took 102 days to resolve the motion will
order (TRO) in the RTC.
not help petitioner's case. The NLRC Rules clearly provide that
"the ling of the motion to reduce bond shall not stop the running
Petitioner claimed: the property belonged to him and his wife, in
of the period to perfect appeal."
their personal capacities, not to the corporation, and, hence,
could not be subject of the execution sale. Since it is the
In the alternative, he should have paid only a moderate and
corporation that was the judgment debtor, execution should be
reasonable sum for the premium, as we have held in
made on the latter's properties.
jurisprudence.
RTC: Denied TRO. RTC had no jurisdiction. Pursuant to the NLRC
While the bond requirement on appeals involving monetary
Manual on the Execution of Judgment, petitioner's remedy was
awards has been relaxed in certain cases, this can only be done
to file a third-party claim with the NLRC Sheriff.
where there was substantial compliance of the Rules or where
the appellants, at the very least, exhibited willingness to pay by
Petitioner: He argues that he was never sued in his personal
posting a partial bond.
capacity, but in his representative capacity as president of PACSI.
In the case at bar, petitioner did not post a full or partial
ISSUES:
appeal bond within the prescribed period, thus, no appeal was
1. Does the RTC does not have jurisdiction to restrain the
perfected from the decision of the Labor Arbiter. For this
implementation of the writ of execution issued by the
reason, the decision sought to be appealed to the NLRC had
Labor Arbiter? NO
become final and executory and therefore immutable. Clearly,
2. May the property be levied? NO
then, the NLRC has no authority to entertain the appeal, much
less to reverse the decision of the Labor Arbiter.
RULING:

12

1. The RTC does not have jurisdiction to restrain the
implementation of the writ of execution issued by the Labor
Arbiter.
Regular courts have no jurisdiction to hear and decide questions
which arise from and are incidental to the enforcement of
decisions, orders, or awards (DOA) rendered in labor cases by
appropriate officers and tribunals of the DOLE.
The NLRC Manual on the Execution of Judgment that governs
any question on the execution of a judgment of that body.
The Rules of Court apply ONLY by analogy or in a suppletory
character.
Difference with NLRC Manual and ROC:
ROC:
NLRC Manual: deals specifically with third-party claims in cases
brought before that body.
Defines Third-party claim as one where a person, not a party to
the case, asserts title to or right to the possession of the property
levied upon.
Petitioner's complaint is a third-party claim within the
cognizance of the NLRC.
Petitioner may indeed be considered a "third party" in relation to
the property subject of the execution vis-à-vis the Labor
Arbiter's decision.
The property belongs to petitioner and his wife, and not to the
corporation.
It can be said that the property belongs to the conjugal
partnership, not to petitioner alone. Thus, the property belongs
to a third party,i.e., the conjugal partnership. At the very least,
the Court can consider that petitioner's wife is a third party
within contemplation of the law.
The present controversy arose from the complaint for illegal
dismissal. The subject matter of petitioner's complaint is the
execution of the NLRC decision. Execution is an essential part of
the proceedings before the NLRC.
Jurisdiction, once acquired, continues until the case is finally
terminated, and there can be no end to the controversy
without the full and proper implementation of the
commission's directives.
Also,
Labor Code: ART. 254. INJUNCTION PROHIBITED.
— No temporary or permanent injunction or
restraining order in any case involving or growing
out of labor disputes shall be issued by any court
or other entity, except as otherwise provided in
Articles 218 and 264 of this Code.
Labor Relations | Czeska Johann G. Co, SBU-3S
2. Since he was sued in a representative capacity, and not in
his personal capacity, the property could not be made to
answer for the judgment obligation of the corporation.
Even if we consider petitioner as an agent of the corporation and
therefore, not a stranger to the case — the property was
registered not only in the name of petitioner but also of his wife.
She stands to lose the property subject of execution without ever
being a party to the case. This will be tantamount to deprivation
of property without due process.
Moreover, the power of the NLRC, or the courts, to execute its
judgment extends only to properties unquestionably
belonging to the judgment debtor alone. A sheriff, therefore,
has no authority to attach the property of any person except that
of the judgment debtor. Likewise, there is no showing that the
sheriff ever tried to execute on the properties of the corporation.
In sum, while petitioner availed himself of the wrong remedy
to vindicate his rights, nonetheless, justice demands that this
Court look beyond his procedural missteps and grant the
petition.
PAL vs NLRC
GR No. 120567, March 20, 1998
Justice Martinez
FACTS:
Private respondents are flight stewards of the petitioner. (2 sila
kabuok)
Both were dismissed from the service for their alleged
involvement in the currency smuggling in Hong Kong. Aggrieved
by said dismissal, private respondents filed with the NLRC a
petition for injunction.
Respondents also asked for reinstatement.
Cause of dismissal: alleged violation of the Code of Discipline
NLRC: issued a temporary mandatory injunction enjoining
petitioner to cease and desist from enforcing its Memorandum of
Dismissal.
Sabi niya: “private respondents are left "with no speedy and
adequate remedy at law" except the issuance of a temporary
mandatory injunction” Cited Article 218 (e) of the Labor Code.
Petitioners contention: The NLRC has no jurisdiction to issue an
injunction or restraining order since this may be issued only
under Article 218 of the Labor Code if the case involves or arises
from labor disputes.
NLRC: What we have here is a LABOR DISPUTE mga bes!
Quoting: “If security of tenure is not a "term or condition of
13

employment, what then is?” Charot. Infainess galling mag reason
ng NLRC dito.
Quote ko to kasi gusto ko but you may disregard: “Article 218 (e)
of the Labor Code clearly envisioned adequacy, and not plain
availability of a remedy at law as an alternative bar to the
issuance of an injunction.”
ISSUE: Can the NLRC without a complaint for illegal dismissal
filed before the labor arbiter, entertain an action for injunction
and issue such writ enjoining petitioner Philippine Airlines, Inc.
from enforcing its Orders of dismissal against private
respondents, and ordering petitioner to reinstate the private
respondents to their previous positions?
RULING: No.
 The power of the NLRC to issue an injunctive writ
originates from "any labor dispute" upon application
by a party thereof, which application if not granted
"may cause grave or irreparable damage to any party
or render ineffectual any decision in favor of such
party."
Introduction: Generally, injunction is a preservative remedy for
the protection of one's substantive rights or interest. It is not a
cause of action in itself but merely a provisional remedy, an
adjunct to a main suit. It is resorted to only when there is a
pressing necessity to avoid injurious consequences which cannot
be remedied under any standard of compensation.
The application of the injunctive writ rests upon the existence of
an emergency or of a special reason before the main case be
regularly heard. The essential conditions for granting such
temporary injunctive relief are that 1) the complaint alleges facts
which appear to be sufficient to constitute a proper basis for
injunction and 2) that on the entire showing from the contending
parties, the injunction is reasonably necessary to protect the
legal rights of the plaintiff pending the litigation. Injunction is
also a special equitable relief granted only in cases where
there is no plain, adequate and complete remedy at law.
"Labor dispute" is defined as "any controversy or matter
concerning terms and conditions of employment or the
association or representation of persons in negotiating, fixing,
maintaining, changing, or arranging the terms and conditions of
employment regardless of whether or not the disputants stand in
the proximate relation of employers and employees."
 Taking into account the foregoing definitions, it is an
essential requirement that there must first be a labor
dispute between the contending parties before the
labor arbiter.
 In the present case, there is no labor dispute between
the petitioner and private respondents as there has
yet been no complaint for illegal dismissal filed with the
labor arbiter by the private respondents against the
petitioner.
Labor Relations | Czeska Johann G. Co, SBU-3S
The petition for injunction directly filed before the NLRC is in
reality an action for illegal dismissal.
The petition should have been filed with the labor arbiter who
has the original and exclusive jurisdiction to hear and decide the
case. – this is the ordinary and proper recourse of the illegally
dismissed employee.
The jurisdiction of the labor arbiter is both original and
exclusive, meaning, no other officer or tribunal can take
cognizance of, hear and decide any of the cases in Article 217 (a).
 In short, the jurisdiction of the NLRC in illegal
dismissal cases is appellate in nature and, therefore, it
cannot entertain the private respondents' petition for
injunction which challenges the dismissal orders of
petitioner.
The New Rules of Procedure of the NLRC makes injunction only
an ancillary remedy in ordinary labor disputes.
In this case, the respondents disregarded this rule and went
directly with the NLRC.
In fact, the preliminary mandatory injunction prayed for by the
private respondents in their petition before the NLRC can also be
entertained by the labor arbiter. Bat di nyo kasi siya binigyan ng
chance!
 There is no showing of any urgency or irreparable injury
which the private respondents might suffer
An injury is considered irreparable if it is of such constant and
frequent recurrence that no fair and reasonable redress can be
had therefor in a court of law, or where there is no standard by
which their amount can be measured with reasonable accuracy,
that is, it is not susceptible of mathematical computation.
It is considered irreparable injury when it cannot be adequately
compensated in damages due to the nature of the injury itself or
the nature of the right or property injured or when there exists no
certain pecuniary standard for the measurement of damages.
 In the case at bar, the alleged injury which private
respondents stand to suffer by reason of their alleged
illegal dismissal can be adequately compensated.
Petition granted.
Pfizer, Inc vs Velasco
GR No. 177467, March 9, 2011
Justice Leonardo-De Castro
FACTS: Private respondent Geraldine L. Velasco was employed
by Pfizer as a Professional Health Care Representative. Due to
the complications brought by her pregnancy, she had to take a
leave of absence for several times. While still on leave, she
14

received 3 “Show- cause Notice” about an investigation being
conducted on her due to “unauthorized deals” and unauthorized
discounts. She denied all the charges and explained her side.
Velasco filed a complaint for illegal suspension with money
claims before the Regional Arbitration Branch.
Pfizer dismissed respondent.
LA: Velasco was illegally dismissed, ordering her reinstatement
with backwages and further awarding damages.
NLRC: Affirmed but deleted damages.
Both appealed. Respondent appealed because her award of
damages was removed.
CA: dismissal was valid but Pfizer should pay her wages from the
date of the LA decision up to the CA.
Pfizer’s contention: there was no unjustified refusal on its part
to reinstate respondent, it had already required respondent to
report for work but respondent refused to work when she wrote
PFIZER, through counsel, that she was opting to receive her
separation pay and to avail of PFIZER's early retirement program.
Another contention: it had already previously paid an enormous
sum to respondent under the writ of execution issued by the
Labor Arbiter; it would purportedly be tantamount to allowing
respondent to choose "payroll reinstatement" when by law it was
the employer which had the right to choose between actual and
payroll reinstatement;
Another prayer: Annul the award of backwages and separation
pay and require respondent to refund the amount she collected
ISSUE: Can wages be ordered to be paid even when the dismissal
was found to be valid? Yes.
Should PAL be refunded? No.
RULING: Yes
1. The previous payment to respondent under the Writ of
Execution is not the WAGES to be paid.
Due to PFIZER's unreasonable delay in complying with the
reinstatement order of the Labor Arbiter,
PFIZER required respondent to report for work almost 2 years
from the time the order of reinstatement by the Labor Arbiter's
Decision.
TIME AND AGAIN, an award or order of reinstatement is
immediately self-executory without the need for the issuance
of a writ of execution.
An award [by the Labor Arbiter] for reinstatement shall be
immediately executory even pending appeal and the posting of
Labor Relations | Czeska Johann G. Co, SBU-3S
a bond by the employer shall not stay the execution for
reinstatement.
PFIZER did not immediately admit respondent back to work
which, according to the law, should have been done as soon as an
order or award of reinstatement is handed down by the Labor
Arbiter without need for the issuance of a writ of execution.
Thus, respondent was entitled to the wages paid to her under the
aforementioned writ of execution.
2. Pfizer cannot be said to have reinstated respondent
to her FORMER POSITION, under the same terms
and conditions. REINSTATEMENT WAS NOT UNDER
THE same terms and conditions as her previous
employment.
PFIZER ordered respondent to report to its main office in Makati
City while knowing fully well that respondent's previous job had
her stationed in Baguio City (respondent's place of residence)
and it was still necessary for respondent to be briefed regarding
her work assignments and responsibilities, including her
relocation benefits.
 Under Article 223 of the Labor Code, an employee
entitled to reinstatement 1) "shall either be admitted
back to work under the same terms and conditions
prevailing prior to his dismissal or 2) separation or, at
3) the option of the employer, merely reinstated in the
payroll.
Reinstatement means restoration to a state or condition from
which one had been removed or separated. The person
reinstated assumes the position he had occupied prior to his
dismissal. Reinstatement presupposes that the previous position
from which one had been removed still exists, or that there is an
un filled position which is substantially equivalent or of similar
nature as the one previously occupied by the employee.
 In this instance, there was no real, bona de
reinstatement to speak of.
A transfer of work assignment without any justification therefor,
even if respondent would be presumably doing the same job with
the same pay, cannot be deemed faithful compliance with the
reinstatement order.
3. The option of the employer to effect actual or payroll
reinstatement must be exercised in good faith.
4. However, reinstatement may no longer be possible in
certain circumstances.
In the event, however, that reinstatement is no longer feasible,
or if the employee decides not be reinstated, the employer shall
pay him separation pay in lieu of reinstatement. Such a rule is
likewise observed in the case of a:
A. Strained employer-employee relationship or
B. When the work or position formerly held by the
dismissed employee no longer exists.
15
 Labor Relations | Czeska Johann G. Co, SBU-3S

In sum, an illegally dismissed employee is entitled to: (1) either The refund doctrine disregards social justice principles. It is
reinstatement if viable or separation pay if reinstatement is no unduly favorable to management. UNFAIR UNFAIR siya.
longer viable, and (2) backwages.
The Court reaffirms the prevailing principle that even if the
5. Respondent's decision to claim separation pay over order of reinstatement of the Labor Arbiter is reversed on
reinstatement had no legal effect because the appeal, it is obligatory on the part of the employer to reinstate
employer chose not to act on said claim. and pay the wages of the dismissed employee during the
period of appeal until reversal by the higher court.
SUMMARY:
Dapat si employee without fear to refunding the salaries.
PFIZER's failure to effect reinstatement and accept respondent's
offer to terminate her employment relationship with the
company meant that, prior to the Court of Appeals' reversal in Diamond Taxi
the November 23, 2005 Decision, PFIZER's liability for backwages
continued to accrue for the period not covered by the writ of
execution dated May 24, 2005 until November 23, 2005.

REFUND DOCTRINE
Genuino vs NLRC – upheld the refund doctrine

Garcia vs Philippine Airlines, Inc, - more in accord with the

dictates of fairness and justice; NO refund

Even if the order of reinstatement of the Labor Arbiter is

reversed on appeal, it is obligatory on the part of the employer to
reinstate and pay the wages of the dismissed employee during
the period of appeal until reversal by the higher court. On the
other hand, if the employee has been reinstated during the
appeal period and such reinstatement order is reversed with
finality, the employee is not required to reimburse whatever
salary he received for he is entitled to such, more so if he
actually rendered services during the period.

Does this constitute unjust enrichment? No.

It would otherwise render inutile the rationale of reinstatement
pending appeal.

Pursuant to the same power (police power), the State may

authorize an immediate implementation, pending appeal, of a
decision reinstating a dismissed or separated employee since
that saving act is designed to stop, although temporarily since
the appeal may be decided in favor of the appellant, a
continuing threat or danger to the survival or even the life of
the dismissed or separated employee and his family.

The "refund doctrine" easily demonstrates how a favorable

decision by the Labor Arbiter could harm, more than help, a
dismissed employee.

The employee, to make both ends meet, would necessarily have

to use up the salaries received during the pendency of the
appeal, only to end up having to refund the sum in case of a nal
unfavorable decision.

The sum is better left unspent if ganyan.

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