ROBINSONS GALLERIA/ROBINSONS SUPERMARKET CORPORATION and/or JESS MANUE vs. IRENE R. RANCHEZ G.R. No.

177937 January 19, 2011 Facts: Respondent was a probationary employee of petitioner Robinsons Galleria/Robinsons Supermarket Corporation (petitioner Supermarket) for a period of five (5) months, or from October 15, 1997 until March 14, 1998. She underwent six (6) weeks of training as a cashier before she was hired as such on October 15, 1997. Two weeks after she was hired, or on October 30, 1997, respondent reported to her supervisor the loss of cash amounting to P20,299.00 which she had placed inside the company locker. Petitioner Jess Manuel (petitioner Manuel), the Operations Manager of petitioner Supermarket, ordered that respondent be strip-searched by the company guards. However, the search on her and her personal belongings yielded nothing. Respondent acknowledged her responsibility and requested that she be allowed to settle and pay the lost amount. However, petitioner Manuel did not heed her request and instead reported the matter to the police. Petitioner Manuel likewise requested the Quezon City Prosecutors Office for an inquest. Respondent filed a complaint for illegal dismissal and damages. On March 12, 1998, petitioners sent to respondent by mail a notice of termination and/or notice of expiration of probationary employment dated March 9, 1998 The Labor Arbiter ratiocinated that at the time respondent filed the complaint for illegal dismissal, she was not yet dismissed by petitioners. When she was stripsearched by the security personnel of petitioner Supermarket, the guards were merely conducting an investigation. The subsequent referral of the loss to the police authorities might be considered routine. Respondents non-reporting for work after her release from detention could be taken against her in the investigation that petitioner supermarket would conduct. The NLRC ruled that respondent was denied due process by petitioners. Stripsearching respondent and sending her to jail for two weeks certainly amounted to constructive dismissal because continued employment had been rendered impossible, unreasonable, and unlikely. The wedge that had been driven between the parties was impossible to ignore. Although respondent was only a probationary employee, the subsequent lapse of her probationary contract of employment did not have the effect of validly terminating her employment because constructive dismissal had already been effected earlier by petitioners. Issue: Whether or not respondent was illegally terminated from employment by petitioners Ruling: The Court rule in the affirmative.There is probationary employment when the employee upon his engagement is made to undergo a trial period during which the

employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement. A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside from just or authorized causes of termination, an additional ground is provided under Article 281 of the Labor Code, i.e., the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the engagement. Thus, the services of an employee who has been engaged on probationary basis may be terminated for any of the following: (1) a just or (2) an authorized cause; and (3) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer. Article 277(b) of the Labor Code mandates that subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal, except for just and authorized cause and without prejudice to the requirement of notice under Article 283 of the same Code, the employer shall furnish the worker, whose employment is sought to be terminated, a written notice containing a statement of the causes of termination, and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of a representative if he so desires, in accordance with company rules and regulations pursuant to the guidelines set by the Department of Labor and Employment. In the instant case, based on the facts on record, petitioners failed to accord respondent substantive and procedural due process. The haphazard manner in the investigation of the missing cash, which was left to the determination of the police authorities and the Prosecutors Office, left respondent with no choice but to cry foul. Administrative investigation was not conducted by petitioner Supermarket. On the same day that the missing money was reported by respondent to her immediate superior, the company already pre-judged her guilt without proper investigation, and instantly reported her to the police as the suspected thief, which resulted in her languishing in jail for two weeks. An illegally or constructively dismissed employee, respondent is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no longer viable; and (2) backwages. These two reliefs are separate and distinct from each other and are awarded conjunctively. In this case, since respondent was a probationary employee at the time she was constructively dismissed by petitioners, she is entitled to separation pay and backwages. Reinstatement of respondent is no longer viable considering the circumstances.

LEGEND INTERNATIONAL RESORTS LIMITED vs. KILUSANG MANGGAGAWA NG LEGENDA (KML-INDEPENDENT) G.R. No. 169754 February 23, 2011 Facts: A petition for Certification Election.KML alleged that it is a legitimate labor organization of the rank and file employees of Legend International Resorts Limited (LEGEND). KML claimed that DOLE issued its Certificate of Registration. LEGEND moved to dismiss2the petition alleging that KML is not a legitimate labor organization because its membership is a mixture of rank and file and supervisory employees in violation of Article 245 of the Labor Code. LEGEND also claimed that KML committed acts of fraud and misrepresentation when it made it appear that certain employees attended its general membership meeting on April 5, 2001 when in reality some of them were either at work; have already resigned as of March 2001; or were abroad. KML argued that even if 41 of its members are indeed supervisory employees and therefore excluded from its membership, the certification election could still proceed because the required number of the total rank and file employees necessary for certification purposes is still sustained. KML also claimed that its legitimacy as a labor union could not be collaterally attacked in the certification election proceedings but only through a separate and independent action for cancellation of union registration. Finally, as to the alleged acts of misrepresentation, KML asserted that LEGEND failed to substantiate its claim. The Med-Arbiter found that indeed there were several supervisory employees in KMLs membership. Since Article 245 of the Labor Code expressly prohibits supervisory employees from joining the union of rank and file employees, the MedArbiter concluded that KML is not a legitimate labor organization. The Office of the Secretary of DOLE held that KMLs legitimacy as a union could not be collaterally attacked. The Office of the Secretary of DOLE also opined that Article 245 of the Labor Code merely provides for the prohibition on managerial employees to form or join a union and the ineligibility of supervisors to join the union of the rank and file employees and vice versa. It declared that any violation of the provision of Article 245 does not ipso facto render the existence of the labor organization illegal. Moreover, it held that Section 11, paragraph II of Rule XI which provides for the grounds for dismissal of a petition for certification election does not include mixed membership in one union. The Court of Appeals rendered its Decision finding no grave abuse of discretion on the part of the Office of the Secretary of DOLE. The appellate court held that the issue on the legitimacy of KML as a labor organization has already been settled with finality.

Issue:
Whether or not the Petition to cancel/revoke registration is a prejudicial question to the petition for certification election

Ruling:
It is well-settled rule that a certification proceedings is not a litigation in the sense that the term is ordinarily understood, but an investigation of a nonadversarial and fact finding character. An order to hold a certification election is proper despite the pendency of the petition for cancellation of the registration certificate of the respondent union. The rationale for this is that at the time the respondent union filed its petition, it still had the legal personality to perform such act absent an order directing the cancellation. that a certification election may be conducted during the pendency of the cancellation proceedings. This is because at the time the petition for certification was filed, the petitioning union is presumed to possess the legal personality to file the same. There is therefore no basis for LEGENDs assertion that the cancellation of KMLs certificate of registration should retroact to the time of its issuance or that it effectively nullified all of KMLs activities, including its filing of the petition for certification election and its demand to collectively bargain. The legitimacy of the legal personality of KML cannot be collaterally attacked in a petition for certification election.

NATIONWIDE SECURITY AND ALLIED SERVICES, INC. vs. RONALD P. VALDERAMA G.R. No. 186614 February 23, 2011 Facts: Respondent was hired by petitioner as security guard on April 18, 2002. He was assigned at the Philippine Heart Center (PHC), Quezon City, until his relief on January 30, 2006. Valderama was not given any assignment thereafter. Thus, on August 2, 2006, he filed a complaint for constructive dismissal and nonpayment of 13th month pay, with prayer for damages against petitioner and Romeo Nolasco. Petitioner presented a different version. It alleged that respondent was not constructively or illegally dismissed, but had voluntarily resigned.That the respondent has committed serious violations of the security rules in the workplace. On January 31, 2004, he was charged with conduct unbecoming for which he was required to explain. Months after, he and four (4) other co-security guards failed to attend a mandatory seminar. For this, he was suspended for seven (7) days. On June 5, 2004, [respondent] displayed his discourteous and rude attitude upon his superior. He said to him in a high pitch of voice, "ano ba sir, personalan ba ito, sabihin mo lang kung ano gusto mo." On June 8, 2004, [petitioner] required him to explain why no disciplinary action should be meted against him. On January 22, 2005, seven security guards, including [respondent], were made to explain their failure to report for duty without informing the office despite the instruction during their formation day which was held a day before. On January 31, 2006, Roy Datiles, Detachment Commander, reported that [respondent] confronted and challenged him in a high pitch and on top of his voice rudely showing discourtesy and rudeness. Being his superior, Datiles recommended the relief of [respondent] in the detachment effective January 31, 2006. By order of the Operations Manager, he was relieved from his post at the Philippine Heart Center. He was directed to report to the office. On February 10, 2006, he got his cash bond and firearm deposit. Despite his voluntary resignation, [petitioner] sent him a letter through registered mail to report for the office and give information on whether or not he was still interested for report for duty or not. [Respondent] did not bother to reply. Neither did he report to the office Issue: Whether or not the responded was constructively dismissed. Ruling; In cases involving security guards, a relief and transfer order in itself does not sever employment relationship between a security guard and his agency. An

employee has the right to security of tenure, but this does not give him a vested right to his position as would deprive the company of its prerogative to change his assignment or transfer him where his service, as security guard, will be most beneficial to the client. Temporary "off-detail" or the period of time security guards are made to wait until they are transferred or assigned to a new post or client does not constitute constructive dismissal, so long as such status does not continue beyond six months.The onus of proving that there is no post available to which the security guard can be assigned rests on the employer, viz.: When a security guard is placed on a "floating status," he does not receive any salary or financial benefit provided by law. Due to the grim economic consequences to the employee, the employer should bear the burden of proving that there are no posts available to which the employee temporarily out of work can be assigned The jurisprudential rule on abandonment is constant. It is a matter of intention and cannot lightly be presumed from certain equivocal acts. To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intent, manifested through overt acts, to sever the employer-employee relationship. In the case at bar, petitioner failed to establish clear evidence of respondents intention to abandon his employment. Except for petitioners bare assertion that respondent did not report to the office for reassignment, no proof was offered to prove that respondent intended to sever the employer-employee relationship.

CASE DIGEST in B.M.P.E

(2011 Labor Law and Taxation Law Cases)

Submitted to: Justice Elpidio Vega Submitted by: Del Rosario, Maureen Grace J.

EXXONMOBIL PETROLEUM AND CHEMICAL HOLDINGS, INC. - PHILIPPINE BRANCH vs. COMMISSIONER OF INTERNAL REVENUE G.R. No. 180909 January 19, 2011 Facts: Petitioner Exxon is a foreign corporation duly organized and existing under the laws of the State of Delaware, United States of America. It is authorized to do business in the Philippines through its Philippine Branch. Exxon is engaged in the business of selling petroleum products to domestic and international carriers. In pursuit of its business, Exxon purchased from Caltex Philippines, Inc. (Caltex) and Petron Corporation (Petron) Jet A-1 fuel and other petroleum products, the excise taxes on which were paid for and remitted by both Caltex and Petron.Said taxes, however, were passed on to Exxon which ultimately shouldered the excise taxes on the fuel and petroleum products. From November 2001 to June 2002, Exxon sold a total of 28,635,841 liters of Jet A-1 fuel to international carriers, free of excise taxes amounting to Php105,093,536.47.On various dates, it filed administrative claims for refund with the Bureau of Internal Revenue (BIR) amounting to Php105,093,536.47. On October 30, 2003, Exxon filed a petition for review with the CTA1claiming a refund or tax credit in the amount of Php105,093,536.47, representing the amount of excise taxes paid on Jet A-1 fuel and other petroleum products it sold to international carriers from November 2001 to June 2002. The CTA ruled that in consonance with its ruling in several cases,only the taxpayer or the manufacturer of the petroleum products sold has the legal personality to claim the refund of excise taxes paid on petroleum products sold to international carriers. The CTA stated that Section 130(A)(2) makes the manufacturer or producer of the petroleum products directly liable for the payment of excise taxes.Therefore, it follows that the manufacturer or producer is the taxpayer Issue: Whether or not petitioner, as the distributor and vendor of petroleum products to international carriers registered in foreign countries which have existing bilateral agreements with the Philippines, can claim a refund of the excise taxes paid Ruling: Excise taxes are imposed under Title VI of the NIRC. They apply to specific goods manufactured or produced in the Philippines for domestic sale or

consumption or for any other disposition, and to those that are imported In effect, these taxes are imposed when two conditions concur: first, that the articles subject to tax belong to any of the categories of goods enumerated in Title VI of the NIRC; and second, that said articles are for domestic sale or consumption, excluding those that are actually exported. There are, however, certain exemptions to the coverage of excise taxes, such as petroleum products sold to international carriers and exempt entities or agencies. Under Section 135, petroleum products sold to international carriers of foreign registry on their use or consumption outside the Philippines are exempt from excise tax, provided that the petroleum products sold to such international carriers shall be stored in a bonded storage tank and may be disposed of only in accordance with the rules and regulations to be prescribed by the Secretary of Finance, upon recommendation of the Commissioner. Excise taxes are of the nature of indirect taxes, the liability for payment of which may fall on a person other than him who actually bears the burden of the tax. Indirect taxes are those that are demanded, in the first instance, from, or are paid by, one person to someone else. Stated elsewise, indirect taxes are taxes wherein the liability for the payment of the tax falls on one person but the burden thereof can be shifted or passed on to another person, such as when the tax is imposed upon goods before reaching the consumer who ultimately pays for it. When the seller passes on the tax to his buyer, he, in effect, shifts the tax burden, not the liability to pay it, to the purchaser, as part of the goods sold or services rendered. Accordingly, the party liable for the tax can shift the burden to another, as part of the purchase price of the goods or services. Although the manufacturer/seller is the one who is statutorily liable for the tax, it is the buyer who actually shoulders or bears the burden of the tax, albeit not in the nature of a tax, but part of the purchase price or the cost of the goods or services sold.. Hnece petitioner is not the statutory taxpayer, it is not entitled to claim a refund of excise taxes paid. The proper party to question, or to seek a refund of, an indirect tax is the statutory taxpayer, but the person on whom the tax is imposed by law and who paid the same even if he shifts the burden thereof to another

MICROSOFT PHILIPPINES, INC. vs. COMMISSIONER OF INTERNAL REVENUE G.R. No. 180173 April 6, 2011

Facts: Petitioner Microsoft Philippines, Inc. (Microsoft) is a value-added tax (VAT) taxpayer duly registered with the Bureau of Internal Revenue (BIR). Microsoft renders marketing services to Microsoft Operations Pte Ltd. (MOP) and Microsoft Licensing, Inc. (MLI), both affiliated non-resident foreign corporations. The services are paid for in acceptable foreign currency and qualify as zero-rated sales for VAT purposes under Section 108(B)(2) of the National Internal Revenue Code (NIRC) of 1997,as amended For the year 2001, Microsoft yielded total sales in the amount of P261,901,858.99. Of this amount,P235,724,614.68 pertain to sales derived from services rendered to MOP and MLI while P26,177,244.31 refer to sales to various local customers. Microsoft paid VAT input taxes in the amount of P11,449,814.99 on its domestic purchases of taxable goods and services. On 27 December 2002, Microsoft filed an administrative claim for tax credit of VAT input taxes in the amount ofP11,449,814.99 with the BIR. The administrative claim for tax credit was filed within two years from the close of the taxable quarters when the zero-rated sales were made. On 23 April 2003, due to the BIR's inaction, Microsoft filed a petition for review with the CTA. Microsoft claimed to be entitled to a refund of unutilized input VAT attributable to its zero-rated sales and prayed that judgment be rendered directing the claim for tax credit or refund of VAT input taxes for taxable year 2001. On 16 June 2003, respondent Commissioner of Internal Revenue (CIR) filed his answer and prayed for the dismissal of the petition for review. Both the CTA Second Division and CTA En Banc found that Microsoft's receipts did not indicate the word "zero-rated" on its official receipts. Issue: Whether Microsoft is entitled to a claim for a tax credit or refund of VAT input taxes on domestic purchases of goods or services attributable to zero-rated sales for the year 2001 even if the word "zero-rated" is not imprinted on Microsoft's official receipts.

Ruling; A tax credit or refund, like tax exemption, is strictly construed against the taxpayer.The taxpayer claiming the tax credit or refund has the burden of proving that he is entitled to the refund or credit, in this case VAT input tax, by submitting evidence that he has complied with the requirements laid down in the tax code and the BIR's revenue regulations under which such privilege of credit or refund is accorded. The invoicing requirements for a VAT-registered taxpayer as provided in the NIRC and revenue regulations are clear. A VAT-registered taxpayer is required to comply with all the VAT invoicing requirements to be able to file a claim for input taxes on domestic purchases for goods or services attributable to zero-rated sales. A "VAT invoice" is an invoice that meets the requirements of Section 4.108-1 of RR 7-95. Contrary to Microsoft's claim, RR 7-95 expressly states that "[A]ll purchases covered by invoices other than a VAT invoice shall not give rise to any input tax." Microsoft's invoice, lacking the word "zero-rated," is not a "VAT invoice," and thus cannot give rise to any input tax. The printing of the word "zero-rated" is required to be placed on VAT invoices or receipts covering zero-rated sales in order to be entitled to claim for tax credit or refund. Hence petition is without merit.

COMMISSIONER OF INTERNAL REVENUE vs. MANILA BANKERS' LIFE INSURANCE CORPORATION G.R. No. 169103 March 16, 2011 Facts: Respondent Manila Bankers Life Insurance Corporation is a duly organized domestic corporation primarily engaged in the life insurance business. Petitioner Commissioner of Internal Revenue issued Letter of Authority authorizing a special team of Revenue Officers to examine the books of accounts and other accounting records of respondent for taxable year "1997 & unverified prior years. On December 14, 1999, based on the findings of the Revenue Officers, the petitioner issued a Preliminary Assessment Notice against the respondent for its deficiency internal revenue taxes for the year 1997. The respondent agreed to all the assessments issued against it except to the amount of P2,351,680.90 representing deficiency documentary stamp taxes on its policy premiums and penalties. The petitioner issued against the respondent a Formal Letter of Demand1with the corresponding Assessment Notices attached, one of which was Assessment Notice pertaining to the documentary stamp taxes due on respondents policy premiums: The tax deficiency was computed by including the increases in the life insurance coverage or the sum assured by some of respondents life insurance plans On February 3, 2000, the respondent filed its Letter of Protest with the Bureau of Internal Revenue (BIR) contesting the assessment for deficiency documentary stamp tax on its insurance policy premiums. Despite submission of documents on April 3, 2000,was required by the BIR in its March 20, 2000 letter, the respondents Protest was not acted upon by the BIR within the 180-day period given to it by Section 228 of the 1997 National Internal Revenue Code (NIRC) within which to rule on the protest. Hence, on October 26, 2000, the respondent filed a Petition for Review with the CTA for the cancellation of Assessment Notice. The respondent invoked the CTAs March 30, 1993 ruling in the similar case of Lincoln Philippine Life Insurance Company, Inc. (now Jardine-CMA Life The CTA granted the respondents Petition. The CTA, applying the Tax Code Provisions then in force, held that: The documentary stamp tax on life insurance policies is imposed only once based on the amount insured at the time of actual issuance of such policies. The documentary stamp tax which is in the nature of an excise tax is imposed on the document as originally issued. Therefore, any subsequent increase in the insurance coverage resulting from policies which have been subjected to the documentary stamp tax at the time of their issuance, is no longer subject to the documentary stamp tax. The Court of Appeals upheld the decision of the CTA.

Issue: Whether or not the imposition of documentary stamp tax on increases in the coverage or sum assured by existing life insurance policies, even without the issuance of new policies is valid. Ruling: Documentary stamp tax is a tax on documents, instruments, loan agreements, and papers evidencing the acceptance, assignment, sale or transfer of an obligation, right or property incident thereto It is in the nature of an excise tax because it is imposed upon the privilege, opportunity or facility offered at exchanges for the transaction of the business. It is an excise upon the facilities used in the transaction of the business distinct and separate from the business itself. It is imposed on the exercise of these privileges through the execution of specific instruments, independently of the legal status of the transactions giving rise thereto. The documentary stamp tax must be paid upon the issuance of these instruments, without regard to whether the contracts which gave rise to them are rescissible, void, voidable, or unenforceable. The documentary stamp tax on insurance policies, though imposed on the document itself, is actually levied on the privilege to conduct insurance business. Under Section 173, the documentary stamp tax becomes due and payable at the time the insurance policy is issued, with the tax based on the amount insured by the policy as provided for in Section 183. Whenever a master policy admits of another member, another life is insured and covered. This means that the respondent, by approving the addition of another member to its existing master policy, is once more exercising its privilege to conduct the business of insurance, because it is yet again insuring a life. It does not matter that it did not issue another policy to effect this change, the fact remains that insurance on another life is made and the relationship of insurer and insured is created between the respondent and the additional member of that master policy. Therefore, the assessment for deficiency documentary stamp tax is being upheld not because the additional premium payments or an agreement to change the sum assured during the effectivity of an insurance plan are subject to documentary stamp tax, but because documentary stamp tax is levied on every document which establishes that insurance was made or renewed upon a life.