JURISPRUDENCE ON LABOR LAW 2009-2010 AUGUST 2010 Labor Law Dismissal; abandonment.

Time and again, the Supreme Court has held that abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so if the same is accompanied by a prayer for reinstatement. In the present case, however, petitioner filed his complaint more than one year after his alleged termination from employment. Moreover, petitioner did not as for reinstatement in the complaint form, which he personally filled up and filed with the !"#C. The prayer for reinstatement is made only in the $osition $aper that was later prepared by his counsel. This is an indication that petitioner never had the intention or desire to return to his %ob. Elpidio Calipay vs. National Labor Relations Commission, et al., G.R. No. 166411, August 3, !1!. Dismissal; burden of proof. In termination cases, the employer has the burden of proving, by substantial evidence that the dismissal is for %ust cause. If the employer fails to discharge the burden of proof, the dismissal is deemed illegal. In the present case, &C$I failed to discharge its burden when it failed to present any evidence of the alleged fistfight, aside from a single statement, which was refuted by statements made by other witnesses and was found to be incredible by both the "abor 'rbiter and the !"#C. Ale" Gurango vs. #est C$emi%als and &lasti%, 'n%., et al., G.R. No. 1(4)*3, August ), !1!. Dismissal; burden of proof. The law mandates that the burden of proving the validity of the termination of employment rests with the employer. (ailure to discharge this evidentiary burden would necessarily mean that the dismissal was not %ustified and, therefore, illegal. )nsubstantiated suspicions, accusations, and conclusions of employers do not provide for legal %ustification for dismissing employees. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social %ustice policy of labor laws and the Constitution. Century Canning Corporation, Ri%ardo +. &o, ,r., et al. vs. -i%ente Randy R. Ramil, G.R. No. 1(163!, August ., !1!. Dismissal; due process. In termination proceedings of employees, procedural due process consists of the twin re*uirements of notice and hearing. The employer must furnish the employee with two written notices before the termination of employment can be effected+ ,-. the first apprises the employee of the particular acts or omissions for which his dismissal is sought; and ,/. the second informs the employee of the employer0s decision to dismiss him. The re*uirement of a hearing is complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted. &$arma%ia and /p0o$n, 'n%., et al. vs. Ri%ardo &. Albayda, ,r., G.R. No. 1( ( 4, August 3, !1!. Dismissal; due process. The "abor Code recogni1es the right to due process of all wor ers, without distinction as to the cause of their termination, even if the cause was their supposed involvement in stri e2related violence. In the present case, $3IMC4 sent a letter to the affected union members5officers, directing them to e6plain within /7 hours why they should not be dismissed for the illegal acts they committed during the stri e; three days later, the union members5officers were informed of their dismissal from employment. 8e do not find this company procedure to be sufficient compliance with due process. It does not appear from the evidence that the union officers were specifically informed of the charges against them. 'lso, the short interval of time between the first and second notice shows that a mere to en recognition of the due process re*uirements was made, indicating the company0s intent to dismiss the union members involved, without any meaningful resort to the guarantees accorded them by law. &1'2C3 'ndustries, 'n%.

vs. &1'2C3 'ndustries Labor Asso%iation 4&'LA5, et al., G.R. No. 1(!.3!, August 11, !1!. Dismissal; employee0s past infractions. ' previous offense may be used as valid %ustification for dismissal from wor only if the past infractions are related to the subse*uent offense upon which the basis of termination is decreed. The respondent0s previous incidents of tardiness in reporting for wor were entirely separate and distinct from his latest alleged infraction of forgery. 3ence, the same could no longer be utili1ed as an added %ustification for his dismissal. &esides, respondent had already been sanctioned for his prior infractions. To consider these offenses as %ustification for his dismissal would be penali1ing respondent twice for the same offense. Century Canning Corporation, Ri%ardo +. &o, ,r., et al. vs. -i%ente Randy R. Ramil, G.R. No. 1(163!, August ., !1!. Dismissal; feng shui; breach of trust and confidence. The Court finds that the complainant0s allegations are more credible and that she was dismissed from her employment because the (eng Shui master found that complainant0s Chinese 9odiac Sign was a mismatch to that of respondents. This is not a %ust and valid cause for an employee0s dismissal. In contrast, respondent0s pleadings and evidence suffer from several inconsistencies and the affidavits presented by respondents only pertain to petty matters that are not sufficient to support respondent0s alleged loss of trust and confidence. To be a valid cause for termination of employment, the act or acts constituting breach of trust must have been done intentionally, nowingly, and purposely; and they must be founded on clearly established facts. 6ens$a 7pa Center, in%. and8or 9u :$i ,ie ,vs. Loreta +. ;ung, G.R. No. 1.)1 , August 16, !1!. Dismissal; gross negligence and loss of confidence. :ross negligence connotes ;want of care in the performance of one0s duties.< $etitioner0s failure on = separate occasions to re*uire clients to sign the re*uisite documents constituted gross negligence. (urthermore, it has been held that if the employees are cashiers, managers, supervisors, salesmen or other personnel occupying positions of responsibility, the employer0s loss of trust and confidence in said employees may %ustify the termination of their employment. 's the &an 0s $ersonal &an ing Manager, petitioner0s failure to comply with basic ban ing policies and procedures were inimical to the interests of the ban , ma ing his dismissal based on loss of confidence %ustified. ,esus E. <y%o%o, ,r.vs. E=uitable &C' #an> 4no? #an%o de 3ro5, Rene #unaventura and 7iles 7amalea, G.R. No. 1.. (1, August 16, !1!. Dismissal; loss of trust and confidence. >mployers are allowed a wider latitude of discretion in terminating the services of employees who perform functions which by their nature re*uire the employers0 full trust and confidence and the mere e6istence of basis for believing that the employee has breached the trust of the employer is sufficient. 3owever, this does not mean that the said basis may be arbitrary and unfounded. "oss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established. It must rest on substantial grounds and not on the employer0s arbitrariness, whim, caprice or suspicion; otherwise, the employee would eternally remain at the mercy of the employer. Century Canning Corporation, Ri%ardo +. &o, ,r., et al. vs. -i%ente Randy R. Ramil, G.R. No. 1(163!, August ., !1!. Dismissal; probationary employment. Though the acts charged against de Castro too place when he was still under probationary employment, the records show that de Castro was dismissed on the ninth month of his employment with "&!I. &y then, he was already a regular employee by operation of law. 's a regular employee, de Castro was entitled to security of tenure and his illegal dismissal from "&!I %ustified the awards of separation pay, bac wages, and damages Carlos <e Castro vs. Liberty #road%asting Net?or>, 'n%. and Edgardo @uigue, G.R. No. 16)1)3. August ), !1!.

Dismissal; pro%ect employees; damages. $rior or advance notice of termination is not part of procedural due process if the termination of a pro%ect employee is brought about by the completion of the contract or phase thereof. This is because completion of the wor or pro%ect automatically terminates the employment, in which case, the employer is, under the law, only obliged to render a report to the D4">. Therefore, failing to give pro%ect employees advance notice of their termination is not a violation of procedural due process and cannot be the basis for the payment of nominal damages. <.2. Consun0i, 'n%. vs. Antonio Gobres, et al., G.R. No. 16*1(!, August ., !1!. Dismissal; separation pay and bac wages. The awards of separation pay and bac wages are not mutually e6clusive and both may be given to the respondent. The normal conse*uences of a finding that an employee has been illegally dismissed are, firstly, that the employee becomes entitled to reinstatement to his former position without loss of seniority rights and, secondly, the payment of bac wages corresponding to the period from his illegal dismissal up to actual reinstatement. These are two separate and distinct remedies granted to the employee and the inappropriateness or non2availability of one does not carry with it the inappropriateness or non2availability of the other. )nder the doctrine of strained relations, the payment of separation pay has been considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. The grant of separation pay is a proper substitute only for reinstatement; it cannot be an ade*uate substitute for both reinstatement and bac wages. Century Canning Corporation, Ri%ardo +. &o, ,r., et al. vs. -i%ente Randy R. Ramil, G.R. No. 1(163!, August ., !1!. Dismissal; serious misconduct. Misconduct is defined as ;the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in %udgment.< (or serious misconduct to %ustify dismissal under the law, ;,a. it must be serious, ,b. must relate to the performance of the employee0s duties; and ,c. must show that the employee has become unfit to continue wor ing for the employer.< It is noteworthy that prior to this incident, there had been several cases of theft and vandalism involving both respondent company0s property and personal belongings of other employees. In order to address this issue of losses, respondent company issued two memoranda implementing an intensive inspection procedure and reminding all employees that those who will be caught stealing and performing acts of vandalism will be dealt with in accordance with the company0s Code of Conduct. Despite these reminders, complainant too the pac ing tape and was caught during the routine inspection. 'll these circumstances point to the conclusion that it was not %ust an error of %udgment, but a deliberate act of theft of company property. Nag>a>aisang La>as ng 2anggaga?a sa Aei$in 4NL2AB3LAL'ABA2/5 and 1elen -alenCuela vs. Aei$in &$ilippines Corporation, G.R. No. 1(111), August *, !1!. Dismissal; union security. In terminating the employment of an employee by enforcing the union security clause, the employer needs to determine and prove that+ ,-. the union security clause is applicable; ,/. the union is re*uesting for the enforcement of the union security provision in the C&'; and ,=. there is sufficient evidence to support the decision of the union to e6pel the employee from the union. These re*uisites constitute %ust cause for terminating an employee based on the union security provision of the C&'. The petitioner failed to satisfy the third re*uirement since nothing in the records would show that respondents failed to maintain their membership in good standing in the union. Significantly, petitioner0s act of dismissing respondents stemmed from the latter0s act of signing an authori1ation letter to file a petition for certification election as they signed it outside the freedom period. The mere signing of an authori1ation letter before the freedom period is not sufficient ground to terminate the employment of respondents inasmuch as the petition itself was actually filed during the freedom period. The court emphasi1es anew that the employer is bound

to e6ercise caution in terminating the services of his employees especially so when it is made upon the re*uest of a labor union pursuant to the Collective &argaining 'greement. &i%op Resour%es 'n%orporated 4&R'5 vs. Ana%leto L. +aDe%a, et al., G.R. No. 16!. ., August *, !1!. Dimissal; use of illegal drugs. The law is clear that drug tests shall be performed only by authori1ed drug testing centers. In this case, Sulpicio "ines failed to prove that S.M. "a1o Clinic is an accredited drug testing center nor did it deny the complainant0s allegation that S.M. "a1o Clinic was not accredited. 'lso, only a screening test was conducted to determine if the complainant was guilty of using illegal drugs. 7ulpi%io Lines did not %onEirm t$e positive result oE t$e s%reening test ?it$ a %onEirmatory test as re*uired by #.'. ?-@A. 3ence, Sulpicio "ines failed to indubitably prove that !acague was guilty of using illegal drugs and failed to clearly show that it had a valid and legal cause for terminating !acague0s employment. 8hen the alleged valid cause for the termination of employment is not clearly proven, as in this case, the law considers the matter a case of illegal dismissal. ,eEErey Na%ague vs. 7ulpi%io Lines, 'n%., G.R. No. 1( ).*, August ., !1!. Dismissal; validity. The company did not adduce any evidence to prove that Sia1ar0s dismissal had been for a %ust or authori1ed cause, as in fact it had been its consistent stand that it did not terminate him and that he *uit on his own. &ut given the findings of the Court that the company had indeed dismissed Sia1ar and that such dismissal has remained une6plained, there can be no other conclusion but that the dismissal was illegal. Agri%ultural and 'ndustrial 7upplies Corporation, et al. vs. ,ueber &. 7iaCar, et al., G.R. No. 1((*(!, August ), !1!. Due process; decision rendered without due process. The violation of a party0s right to due process raises a serious %urisdictional issue that cannot be glossed over or disregarded at will. 8here the denial of the fundamental right to due process is apparent, a decision rendered in disregard of that right is void for lac of %urisdiction. This rule is e*ually true in *uasi2%udicial and administrative proceedings, for the constitutional guarantee that no man shall be deprived of life, liberty, or property without due process is un*ualified by the type of proceedings ,whether %udicial or administrative. where he stands to lose the same. 6inston F. Gar%ia vs. 2ario '. 2olina, et al.86inston F. Gar%ia -s. 2ario '. 2olina, et al., G.R. No. 1)(3.38G.R. No. 1(413(, August 1!, !1!. >mployee; evaluation and promotion. The fact that employees were re2classified from Bob :rade "evel - to Bob :rade "evel / as a result of a %ob evaluation program does not automatically entail a promotion or grant them an increase in salary. 4f primordial consideration is not the nomenclature or title given to the employee, but the nature of his functions. 8hat transpired in this case was only a promotion in nomenclature. The employees continued to occupy the same positions they were occupying prior to the %ob evaluation. Moreover, their %ob titles remained the same and they were not given additional duties and responsibilities. 7CA 1ygiene &rodu%ts Corporation Employees Asso%iationBFF6 vs. 7CA 1ygiene &rodu%ts Corporation, G.R. No. 1. .((, August *, !1!. >mployee; security of tenure. ' wor er0s security of tenure is guaranteed by the Constitution and the "abor Code. )nder the security of tenure guarantee, a wor er can only be terminated from his employment for cause and after due process. (or a valid termination by the employer+ ,-. the dismissal must be for a valid cause as provided in 'rticle /C/, or for any of the authori1ed causes under 'rticles /C= and /C7 of the "abor Code; and ,/. the employee must be afforded an opportunity to be heard and to defend himself. ' %ust and valid cause for an employee0s dismissal must be supported by substantial evidence, and before the employee can be dismissed, he must be given proper notice of such cause5s and an ade*uate opportunity to be heard. In the process, the employer bears the burden of proving that the dismissal of an employee was for a valid cause. Its failure to discharge this burden renders the dismissal un%ustified and, therefore, illegal. 6ens$a 7pa Center, 'n%. and8or 9u :$i ,ie vs. Loreta +. ;ung, G.R. No. 1.)1 , August 16, !1!.

>mployee benefit; time of death. The death should be deemed compensable under the >CC since 3enry was on his way bac to Manila in order to be on time and be ready for wor the ne6t day when his accidental death occurred. 3e should already be deemed en route to the performance of his duty at the time of the accident. It should be noted that 3enry0s superior allowed him to travel to "a )nion to visit his ailing mother on the condition that that he return the ne6t day. )nder these facts, 3enry was in the course of complying with his superior0s order when he met his fatal accident. To be sure, he was not in an actual firefighting or accident situation when he died, but returning to wor as instructed by his superior is no less e*uivalent to compensable performance of duty under Section -, #ule III of the >CC #ules. Government 7ervi%e 'nsuran%e 7ystem vs. Feli%itas :arate, as substituted by $er $eirs, namely 2elanie :arate, et al., G.R. No. 1(!.4(, August 3, !1!. Illegal dismissal; effect of rehabilitation proceedings. The e6istence of the Stay 4rder D which would generally authori1e the suspension of %udicial proceedings D could not have affected the Court0s action on the present case due to the petitioner0s failure to raise the pendency of the rehabilitation proceedings in its memorandum to the Court. 't any rate, a stay order simply suspends all actions for claims against a corporation undergoing rehabilitation; it does not wor to oust a court of its %urisdiction over a case properly filed before it. Thus, the Court0s ruling on the principal issue of the case stands. !evertheless, with "&!I0s manifestation that it is still undergoing rehabilitation, the Court resolves to suspend the e6ecution of our Decision until the termination of the rehabilitation proceedings. Carlos <e Castro vs. Liberty #road%asting Net?or>, 'n%. and Edgardo @uigue, G.R. No. 16)1)3. August ), !1!. Bob contracting. In permissible %ob contracting, the principal agrees to put out or farm out with a contractor or subcontractor the performance or completion of a specific %ob, wor or service within a definite or predetermined period, regardless of whether such %ob, wor or service is to be performed or completed within or outside the premises of the principal. The test is whether the independent contractor has contracted to do the wor according to his own methods and without being sub%ect to the principal0s control e6cept only as to the results, he has substantial capital, and he has assured the contractual employees entitlement to all labor and occupational safety and health standards, free e6ercise of the right to self2 organi1ation, security of tenure, and social and welfare benefits. 7pi% nG 7pan 7ervi%es Corp. vs. Gloria &a0e, et al., G.R. No. 1(4!.4, August ), !1!. Management prerogative; transfer of employees. Burisprudence recogni1es the e6ercise of management prerogative to transfer or assign employees from one office or area of operation to another, provided there is no demotion in ran or diminution of salary, benefits, and other privileges, and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. To determine the validity of the transfer of employees, the employer must show that the transfer is not unreasonable, inconvenient, or pre%udicial to the employee; nor does it involve a demotion in ran or a diminution of his salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof, the employee0s transfer shall be tantamount to constructive dismissal. &$arma%ia and /p0o$n, 'n%., et al. vs. Ri%ardo &. Albayda, ,r., G.R. No. 1( ( 4, August 3, !1!. Merger; employee terms and conditions. That &$I is the same entity as (>&TC after the merger is but a legal fiction intended as a tool to ad%udicate rights and obligations between and among the merged corporations and the persons that deal with them. 'lthough in a merger it is as if there is no change in the personality of the employer, there is in reality a change in the situation of the employee. 4nce an (>&TC employee is absorbed, there are presumably changes in his condition of employment even if his previous tenure and salary rate is recogni1ed by &$I. It is reasonable to assume that &$I would have different rules and regulations and company practices than (>&TC and it is incumbent upon the former (>&TC employees to obey these new. !ot the least of these changes is the fact that prior

to the merger (>&TC employees were employees of an unorgani1ed establishment and after the merger they became employees of a unioni1ed company that had an e6isting C&' with the certified union. Thus, although in a sense &$I is continuing (>&TC0s employment of these absorbed employees, &$I0s employment of these absorbed employees will not be under e6actly the same terms and conditions as stated in the latter0s employment contracts with (>&TC. #an> oE t$e &$ilippine 'slands vs. #&' Employees /nionB<avao C$apterBFederation oE /nions in #&' /niban>, G.R. No. 1643!1, August 1!, !1!. #einstatement of employee; doctrine of strained relations. )nder the doctrine of strained relations, the payment of separation pay has been considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. 4n the one hand, such payment liberates the employee from what could be a highly oppressive wor environment. 4n the other, the payment releases the employer from the grossly unpalatable obligation of maintaining in its employ a wor er it could no longer trust. 6ens$a 7pa Center, 'n%. and8or 9u :$i ,ie vs. Loreta +. ;ung, G.R. No. 1.)1 , August 16, !1!. #etirement pay; applicability to employees on commission basis. >ven if the petitioner as bus conductor was paid on commission basis, he falls within the coverage of #.'. E@7- and its implementing rules. Thus, his retirement pay should include the cash e*uivalent of A2days SI" and -5-/ of -=th month pay. The !"#C0s reliance on the case of R H E +ransport, 'n%. as a basis for ruling that bus conductors are not covered by the law on SI" and -= th month pay is erroneous since that involved a ta6i driver who was paid according to the ;boundary system.< There is a difference between drivers paid under the ;boundary system< and conductors who are paid on commission basis. In practice, ta6i drivers do not receive fi6ed wages and retain only those sums in e6cess of the ;boundary< or fee they pay to the owners or operators of the vehicles. Conductors, on the other hand, are paid a certain percentage of the bus0 earnings for the day. RodolEo ,. 7errano vs. 7everino 7antos +ransit and8or 7everino 7antos, G.R. No. 1.(6*., August *, !1!. Separation pay. In those instances where an employee has been validly dismissed for causes other than serious misconduct or those reflecting on his moral character, separation pay may still be granted after giving considerable weight to his long years of employment. In this case, e*uity considerations dictate that respondent0s tenure be computed from -?EC, the year when respondent started wor ing for )p%ohn, and not only from -??@, when the merger of $harmacia and )p%ohn too place. &$arma%ia and /p0o$n, 'n%., et al. vs. Ri%ardo p. Albayda, ,r., G.R. No. 1( ( 4, August 3, !1!. Stri e; validity of stri e. Despite the validity of the purpose of a stri e and the union0s compliance with the procedural re*uirements, a stri e may still be held illegal where the means employed are illegal. 8hile the stri e had not been marred by actual violence and patent intimidation, the pic eting that respondent $I"' officers and members undertoo as part of their stri e activities effectively bloc ed the free ingress to and egress from $3IMC40s premises, thus preventing non2 stri ing employees and company vehicles from entering the $3IMC4 compound. In this manner, the pic eters violated 'rticle /@7,e. of the "abor Code and tainted the stri e with illegality. &1'2C3 'ndustries, 'n%. vs. &1'2C3 'ndustries Labor Asso%iation 4&'LA5, et al., G.R. No. 1(!.3!, August 11, !1!. )nion; eligibility of confidential employees to %oin. Confidential employees are defined as those who ,-. assist or act in a confidential capacity, ,/. to persons who formulate, determine, and effectuate management policies in the field of labor relations. The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee D that is, the confidential relationship must e6ist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. In the present case, there is no showing that the secretaries5cler s and chec ers assisted or acted in a confidential capacity to managerial employees and obtained confidential

information relating to labor relations policies. 'nd even assuming that they had e6posure to internal business operations of the company, as respondent claims, this is not per se ground for their e6clusion in the bargaining unit of the ran 2and2file employees. +unay na &ag>a>aisa ng 2anggaga?a sa Asia #re?ery vs. Asia #re?ery, 'n%., G.R. No. 16 ! ), August 3, !1!. )nion; liability for invalid stri e. The effects of illegal stri es, outlined in 'rticle /@7 of the "abor Code, ma e a distinction between participating wor ers and union officers. The services of an ordinary stri ing wor er cannot be terminated for mere participation in an illegal stri e; proof must be adduced showing that he or she committed illegal acts during the stri e. The services of a participating union officer, on the other hand, may be terminated, not only when he actually commits an illegal act during a stri e, but also if he nowingly participates in an illegal stri e. &1'2C3 'ndustries, 'n%. vs. &1'2C3 'ndustries Labor Asso%iation 4&'LA5, et al., G.R. No. 1(!.3!, August 11, !1!. )nion shop; effect of merger. 'll employees in the bargaining unit covered by a )nion Shop Clause in their C&' with management are sub%ect to its terms. 3owever, under law and %urisprudence, the following inds of employees are e6empted from its coverage, namely, ,-. employees who at the time the union shop agreement ta es effect are bona fide members of a religious organi1ation which prohibits its members from %oining labor unions on religious grounds; ,/. employees already in the service and already members of a union other than the ma%ority at the time the union shop agreement too effect; ,=. confidential employees who are e6cluded from the ran and file bargaining unit; and ,7. employees e6cluded from the union shop by e6press terms of the agreement. In the absence of any of these recogni1ed e6ceptions, there is no basis to conclude that the terms and conditions of employment under a valid C&' in force in the surviving corporation should not be made to apply to the absorbed employees. #an> oE t$e &$ilippine 'slands vs. #&' Employees /nionB<avao C$apterBFederation oE /nions in #&' /niban>, G.R. No. 1643!1, August 1!, !1!. Labor Proced re CSC; rules for dismissal. The filing of formal charges against the respondents without complying with the mandated preliminary investigation or at least giving the respondents the opportunity to comment violated the latter0s right to due process. These rules on due process apply even in cases where the complainant is the disciplining officer himself, as in this case. The fact that the charges against the respondents are serious or that the evidence of their guilt is strong cannot compensate for the procedural shortcut underta en by petitioner. 6inston F. Gar%ia vs. 2ario '. 2olina, et al.86inston F. Gar%ia -s. 2ario '. 2olina, et al., G.R. No. 1)(3.38G.R. No. 1(413(, August 1!, !1!. "abor case; due process; reevaluation. ' reevaluation is a process by which a person or office ,in this case the D4"> secretary. revisits its own initial pronouncement and ma es another assessment of its findings. In simple terms, to reevaluate is to ta e another loo at a previous matter in issue. (rom a procedural standpoint, a reevaluation is a %ontinuation of the original case and not a new proceeding. The evidence, financial reports and other documents submitted by the parties in the course of the original proceeding are to be visited and reviewed again. A reevaluation does not ne%essitate t$e introdu%tion oE ne? materials Eor revie? nor does it re=uire a Eull $earing Eor ne? arguments . 3ence, failure to order the presentation of new evidence in the reevaluation of an 4rder is not a violation of due process. NA7EC3 Guards Asso%iation I &E2A vs. National 7ervi%e Corporation, G.R. No. 16)44 , August ), !1!. "abor case; non2lawyer as representative. The respondents in this case were represented by a non2lawyer who never showed any proof of his authority to represent the respondents. $etitioner argued that the respondents0 representative had no personality to appear before the "abor 'rbiter or the !"#C, and his

representation for the respondents should produce no legal effect. The Court affirmed the ruling of the C' that the cited technical infirmity cannot defeat the respondents0 preferred right to security of tenure, without pre%udice to whatever action may be ta en against the representative, if he had indeed been engaged in the unauthori1ed practice of law. 7pi% nG 7pan 7ervi%es Corp. vs. Gloria &a0e, et al., G.R. No. 1(4!.4, August ), !1!. !"#C; factual findings. (indings of fact of the !"#C, affirming those of the "', are entitled to great weight and will not be disturbed if they are supported by substantial evidence. The C' had overstepped its legal mandate by reversing the findings of fact of the "' and the !"#C as it appears that both decisions were based on substantial evidence. There is no proof of arbitrariness or abuse of discretion in the process by which each body arrived at its own conclusions. Thus, the C' should have deferred to such speciali1ed agencies that are considered e6perts in matters within their %urisdictions. &$arma%ia and /p0o$n, 'n%., et al. vs. Ri%ardo &. Albayda, ,r., G.R. No. 1( ( 4, August 3, !1!. !"#C; review of decisions. The power of the Court of 'ppeals to review !"#C decisions via #ule @A or $etition for Certiorari has been settled as early as in our decision in 7t. 2artin Funeral 1ome v. National Labor Relations Commission . This Court held that the proper vehicle for such review was a Special Civil 'ction for Certiorari under #ule @A of the #ules of Court, and that this action should be filed in the Court of 'ppeals in strict observance of the doctrine of the hierarchy of courts. Moreover, it is already settled that under Sec. ? of &.$. -/?, as amended, the Court of 'ppeals D pursuant to the e6ercise of its original %urisdiction over $etitions for Certiorari D is specifically given the power to pass upon the evidence, if and when necessary, to resolve factual issues. &i%op Resour%es 'n%orporated 4&R'5 vs. Ana%leto L. +aDe%a, et al., G.R. No. 16!. ., August *, !1!. $leading verification. The lac of a verification in a pleading is only a formal defect, not a %urisdictional defect, and is not necessarily fatal to a case. The primary reason for re*uiring a verification is simply to ensure that the allegations in the pleading are done in good faith, are true and correct, and are not mere speculations. 's previously e6plained in +orres v. 7pe%ialiCed &a%>aging <evelopment Corporation , where only two of the /A real parties2in2interest signed the verification, the verification by the two could be sufficient assurance that the allegations in the petition were made in good faith, are true and correct, and are not speculative. 7pi% nG 7pan 7ervi%es Corp. vs. Gloria &a0e, et al., G.R. No. 1(4!.4, August ), !1!. $rocedural rules; strict application. $rocedural rules setting the period for perfecting an appeal or filing a petition for review are generally inviolable. It is doctrinally entrenched that an appeal is not a constitutional right, but a mere statutory privilege. 3ence, parties who see to avail themselves of such privilege must comply with the statutes or rules allowing it. (urthermore, the perfection of an appeal in the manner and within the period permitted by law is not only mandatory, but also %urisdictional. (ailure to perfect the appeal renders the %udgment of the court final and e6ecutory. Bust as a losing party has the privilege to file an appeal within the prescribed period, so does the winner also have the correlative right to en%oy the finality of the decision. Elpidio Calipay vs. National Labor Relations Commission, et al., G.R. No. 166411, August 3, !1!. #eal party in interest; dismissed employee. It is clear that the petitioners failed to include the name of the dismissed employee in the caption and body of its petition for certiorari and, instead, only indicated the name of the labor union as the party acting on behalf of such dismissed employee. 3ence, the Court of 'ppeals rightly dismissed the petition for not having been filed by an indispensable party in interest. ,The Court still proceeded to discuss the substantive issues and merits of the case despite affirming the dismissal of the case based on procedural grounds.. Nag>a>aisang La>as ng 2anggaga?a sa Aei$in 4NL2AB3LAL'ABA2/5 and 1elen -alenCuela vs. Aei$in &$ilippines Corporation, G.R. No. 1(111), August *, !1!.

#ule 7A; review of factual findings. 's a general rule, only *uestions of law may be raised in petitions for certiorari under #ule 7A of the #ules of Court. 3owever, there are recogni1ed e6ceptions to the rule. 'mong the e6ceptions are when the findings of fact are conflicting and when the findings are conclusions without citation of specific evidence on which they are based. In the present case, the findings of fact of the Court of 'ppeals conflict with the findings of fact of the !"#C and the "abor 'rbiter. 'lso, the finding of the Court of 'ppeals that :urango engaged in a fistfight is a conclusion without citation of specific evidence on which it is based. Ale" Gurango vs. #est C$emi%als and &lasti%, 'n%., et al., G.R. No. 1(4)*3, August ), !1!. J !" 2010 Labor Law 'ssumption of %urisdiction by Secretary of "abor; authority to decide on legality of dismissals arising from stri e. The assumption of %urisdiction powers granted to the "abor Secretary under 'rticle /@=,g. is not limited to the grounds cited in the notice of stri e or loc out that may have preceded the stri e or loc out; nor is it limited to the incidents of the stri e or loc out that in the meanwhile may have ta en place. 's the term ;assume %urisdiction< connotes, the intent of the law is to give the "abor Secretary full authority to resolve all matters within the dispute that gave rise to or which arose out of the stri e or loc out, including cases over which the labor arbiter has e6clusive %urisdiction. In the present case, what the "abor Secretary refused to rule upon was the dismissal from employment of employees who violated the return to wor order and participated in illegal acts during a stri e. This was an issue that arose from the stri e and was, in fact, submitted to the "abor Secretary, through the union0s motion for the issuance of an order for immediate reinstatement of the dismissed officers and the company0s opposition to the motion. The dismissal issue was properly brought before the "abor Secretary and he was mista en in ruling that the matter is legally within the e6clusive %urisdiction of the labor arbiter to decide. #agong &ag>a>aisa ng 2anggaga?a ng +riump$ 'nternational, et al. vs. 7e%retary oE <epartment oE Labor and Employment, et al.8+riump$ 'nternational 4p$ils.5, 'n%. vs. #agong &ag>a>aisa ng 2anggaga?a ng +riump$ 'nternational, et al., G.R. No. 16(4!1, ,uly ), !1!. &argaining deadloc ; award; findings of Secretary of "abor. )nless there is a clear showing of grave abuse of discretion, the Court cannot, and will not, interfere with the e6pertise of the Secretary of "abor. The award granted by the "abor Secretary in resolving the bargaining deadloc , drawn as they were from a close e6amination of the submissions of the parties, do not indicate any legal error, much less any grave abuse of discretion, and should not be disturbed. #agong &ag>a>aisa ng 2anggaga?a ng +riump$ 'nternational, et al. vs. 7e%retary oE <epartment oE Labor and Employment, et al.8+riump$ 'nternational 4p$ils.5, 'n%. vs. #agong &ag>a>aisa ng 2anggaga?a ng +riump$ 'nternational, et al., G.R. No. 16(4!1, ,uly ), !1!. Dismissal of employees; %ust cause. Theft committed by an employee is a valid reason for his dismissal by the employer. 'lthough as a rule this Court leans over bac wards to help wor ers and employees continue with their employment or to mitigate the penalties imposed on them, acts of dishonesty in the handling of company property, petitioner0s income in this case, are a different matter. 2aribago #lue?ater #ea%$ Resort, 'n%. vs. Nito <ual, G.R. No. 1.!66!, ,uly !, !1!. Dismissal of employees; re*uirements. The validity of an employee0s dismissal from service hinges on the satisfaction of the two substantive re*uirements for a lawful termination. These are, Eirst, whether the employee was accorded due process the basic components of which are the opportunity to be heard and to defend himself. This is the procedural aspect. 'nd se%ond, whether the dismissal is for any of the causes provided in the "abor Code of the $hilippines. This constitutes the

substantive aspect. Ere%tor Advertising 7ign Group, 'n%. and Ar%$ ,imy C. Amoroto vs. E"pedito Cloma, G.R. No. 16( 1., ,uly , !1!. Dismissal of employees; procedural due process. (urnishing the employee with a suspension order prior to his notice of termination does not satisfy the re*uirement of a first notice. It implies that the employer has already decided, for the reasons stated therein, to suspend the employee from wor in the company, and the wording of the order in the present case gives no indication that the employee is being given an opportunity to submit his defense or e6planation. Ere%tor Advertising 7ign Group, 'n%. and Ar%$ ,imy C. Amoroto vs. E"pedito Cloma, G.R. No. 16( 1., ,uly , !1!. Dismissal of employees; procedural due process. In order to validly dismiss an employee, he must be accorded both substantive and procedural due process by the employer. $rocedural due process re*uires that the employee be given a notice of the charge against him, an ample opportunity to be heard, and a notice of termination. >ven if the aforesaid procedure is conducted after the filing of the illegal dismissal case, the legality of the dismissal, as to its procedural aspect, will be upheld provided that the employer is able to show that compliance with these re*uirements was not a mere afterthought. Ne? &uerto Commer%ial and Ri%$ard Lim vs. Rodel LopeC and Feli" Gavan, G.R. No. 16****, ,uly 6, !1!. >mployee benefits; -=th month pay; definition of basic salary. The term ;basic salary< of an employee for the purpose of computing the thirteenth2month pay was interpreted to include all remuneration or earnings paid by the employer for services rendered, but does not include allowances and monetary benefits which are not integrated as part of the regular or basic salary, such as the cash e*uivalent of unused vacation and sic leave credits, overtime, premium, night differential and holiday pay, and cost2of2living allowances. 3owever, these salary2related benefits should be included as part of the basic salary in the computation of the thirteenth2 month pay if, by individual or collective agreement, company practice or policy, the same are treated as part of the basic salary of the employees. Central ACu%arera <e +arla% vs. Central ACu%arera <e +arla% Labor /nionBNL/, G.R. No. 1..*4*, ,uly 6, !1! >mployee benefits; -=th month pay; company policy or practice. The practice of petitioner in giving -=th2month pay based on the employees0 gross annual earnings which included the basic monthly salary, premium pay for wor on rest days and special holidays, night shift differential pay and holiday pay continued for almost thirty ,=F. years and has ripened into a company policy or practice which cannot be unilaterally withdrawn. The petitioner cannot claim that the practice arose from an erroneous application of the law since no doubtful or difficult *uestion of law is involved in this case. The guidelines set by the law are not difficult to decipher. Central ACu%arera <e +arla% vs. Central ACu%arera <e +arla% Labor /nionBNL/, G.R. No. 1..*4*, ,uly 6, !1! >mployee benefits; death benefits. (or the death of a seafarer to be compensable under the -??@ $4>' Standard >mployment Contract, the death must occur during the term of his contract of employment. In this case, the seaman died / years after he was repatriated to the $hilippines due to medical reasons, hence the claimants are not entitled to receive death benefits under the contract. The decedent0s heirs claimed that the death should be compensable since the nature of his wor as a seaman triggered the illnesses that eventually led to his death. 3owever, the Court noted that though the immediate cause of the seaman0s death was pneumonia, the underlying cause of death was advanced 3IG ,'IDS.. Since the claimants failed to prove that the decedent ac*uired 3IG during his /2month employment aboard the respondents0 vessel, their claim for death benefits was denied. Lydia Es%ar%$a vs. Leonis Navigation Co., 'n%., et al., G.R. No. 1. (4!, ,uly ), !1!. >mployees; government agency. The 'rmed (orces of the $hilippines Commissary and >6change Services ,'($C>S. is a government agency performing proprietary

functions. &y clear implication of law, all '($C>S personnel should therefore be classified as government employees and any complaint for illegal dismissal involving such employees should be filed with the CSC and not the !"#C. Such fact cannot be negated by the failure of '($C>S to follow appropriate civil service rules in the hiring, appointment, discipline and dismissal of employees. !either can it be denied by the fact that '($C>S chose to enroll its employees in the SSS instead of the :SIS. Such considerations cannot be used against the CSC to deprive it of its %urisdiction. 3ence, the "abor 'rbiter0s decision in the illegal dismissal case filed by '($C>S employees is a total nullity for having been rendered without %urisdiction. 2agdalena 1idalgo, et al. vs. Republi% oE t$e &$ilippines, G.R. No. 1(*(*3, ,uly ), !1!. >mployer2employee relationship; evidence. 'ny doubt arising from the evaluation of evidence as between the employer and the employee must be resolved in favor of the latter. It is settled %urisprudence that the burden of proving payment of monetary claims rests on the employer. It was entirely within the company0s power to present personnel files, payrolls, remittances, and other similar documents which would have proven payment of respondent0s money claims as these documents should necessarily be in its possession; hence, failure to present such evidence must be ta en against it. <ansart 7e%urity For%e H Allied 7ervi%es Company and <anilo A. 7arte vs. 2s. ,ean 3. #agoy, G.R. No. 16.4*), ,uly , !1!. :overnment agencies; reorgani1ation. ' reorgani1ation is valid provided it is done in good faith. 's a general rule, the test of good faith lies in whether the purpose of the reorgani1ation is for economy or to ma e the bureaucracy more efficient. #emoval from office as a result of reorgani1ation must, thus, pass the test of good faith. ' demotion in office is tantamount to removal if no cause is shown for it. Conse*uently, before a demotion may be effected pursuant to a reorgani1ation, the observance of the rules on bona Eide abolition of public office is essential. -irginia <. #autista vs. Civil 7ervi%e Commission and <evGt. #an> oE t$e &$ilippines, G.R. No. 1.) 1), ,uly , !1!. :overnment agencies; reorgani1ation; personal liability of local official. The #TC of Cadi1 declared void a resolution that reorgani1ed the city government and effectively purged the city government of Cadi1 of all employees who opposed the mayor politically or disagreed with him in his policies. The #TC ordered the payment of moral damages to the wor ers, but it was not clear if the payment was to be made by the city government or by Mayor Galera, in his personal capacity. The Court held that Garela is personally liable to pay moral damages. Settled is the principle that a public official may be liable in his personal capacity for whatever damage he may have caused by his act done with malice and in bad faith or beyond the scope of his authority or %urisdiction. In the complaint, the employees stated that, ;due to the illegal acts of the Defendant, $laintiffs suffered mental torture and anguish, sleepless nights, wounded feelings, besmirched reputation and social humiliation.< The State can never be the author of illegal acts. The complaint merely identified Garela as the mayor of Cadi1 City. It did not categorically state that Garela was being sued in his official capacity. The identification and mention of Garela as the mayor of Cadi1 City did not automatically transform the action into one against Garela in his official capacity. The allegations in the complaint determine the nature of the cause of action. Eduardo -alera vs. 2a. <aisy RevaleC, G.R. No. 1(1(!), ,uly *, !1!. Illegal dismissal; burden of proof; filing of complaint not sufficient to disprove abandonment. In illegal dismissal cases, the employer bears the burden of proving that the termination was for a valid or authori1ed cause. 3owever, before the employer is as ed to prove that the dismissal was legal, the employee must first establish by substantial evidence the fact of his dismissal from service. "ogically, if there is no dismissal, then there can be no *uestion as to its legality or illegality. )nder normal circumstances, an employee0s act of filing an illegal dismissal complaint against his employer is inconsistent with abandonment. 3owever, the

courts should not use that one act to conclude that an employee was constructively dismissed when substantial evidence proves otherwise. In this case, substantial evidence proves that $ulgar was not constructively dismissed, and that he had abandoned his duties in order to avoid an investigation being conducted by his employer. &$ilippine Rural Re%onstru%tion vs. -irgilio &ulgar, G.R. No. 16* (. ,uly ), !1!. Illegal dismissal; misrepresentation of cause is an act of bad faith. The complainant, #io #emo, was dismissed from service on the ground of retrenchment. 3owever, the records show that Sentinel hired a replacement soon after #emo0s dismissal, proving that Sentinel0s financial distress was not as serious as it claimed, and that retrenchment was not the real reason for #emo0s dismissal. Sentinel concealed its true intention and committed misrepresentation when it claimed that #emo0s dismissal was due to serious financial losses. This act of misrepresentation is an act of active bad faith that fatally tainted #emo0s dismissal and rendered it illegal. 7entinel 'ntegrated 7ervi%es, 'n%. vs. Rio ,ose Remo, G.R. No. 1.. 3, ,uly ), !1!. Illegal dismissal; relief available to employee. 'n illegally dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges and to full bac wages, inclusive of allowances, and to her other benefits or their monetary e*uivalent, computed from the time the compensation was withheld up to the time of actual reinstatement. 8here reinstatement is no longer feasible, separation pay e*uivalent to at least one month salary or one month salary for every year of service, whichever is higher, a fraction of at least si6 months being considered as one whole year, should be awarded to respondent. 'n award for moral and e6emplary damages cannot be %ustified unless the employer had acted in bad faith. The award of moral and e6emplary damages cannot be %ustified solely upon the premise that the employer dismissed his employee without authori1ed cause and due process. Lambert &a?nbro>ers and ,e?elry %orporation and Lambert Lim vs. 1elen #inamira, G.R. No. 1(!464. ,uly 1 , !1!. "abor2only contracting. Despite the fact that the service contracts contain stipulations which are earmar s of independent contractorship, they do not ma e it legally so. The language of a contract is neither determinative nor conclusive of the relationship between the parties. The parties cannot dictate, by a declaration in a contract, the character of the contractor0s business as a labor2only contractor or a legitimate %ob contractor, which should be determined by the criteria set by statute. 3ere, a closer loo at 'M$C40s actual status and participation regarding the employment of the complainants clearly belie the contents of the written service contract. 7an 2iguel Corporation vs. -i%ente 7emillan, et al., G.R. No. 164 )(, ,uly ), !1!. "abor2only contracting; evidence. ' Certificate of #egistration as an Independent Contractor is not conclusive evidence of such status. In distinguishing between permissible %ob contracting and prohibited labor2only contracting, the totality of the facts and the surrounding circumstances of the case are to be considered. 7an 2iguel Corporation vs. -i%ente 7emillan, et al., G.R. No. 164 )(, ,uly ), !1!. "iability of officers for illegal dismissal. Corporate officers are only solidarily liable with the corporation for the illegal termination of services of employees if they acted with malice or bad faith. In &$ilippine Ameri%an LiEe and General 'nsuran%e v. Grama0e, bad faith is defined as a state of mind affirmatively operating with furtive design or with some motive of self2interest or ill will or for ulterior purpose. It implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obli*uity. The lac of authori1ed or %ust cause to terminate one0s employment and the failure to observe due process do not ipso Ea%to mean that the corporate officer acted with malice or bad faith. There must be independent proof of malice or bad faith which is lac ing in the present case. Lambert &a?nbro>ers and ,e?elry %orporation and Lambert Lim vs. 1elen #inamira, G.R. No. 1(!464. ,uly 1 , !1!.

$reventive suspension. $reventive suspension is %ustified where the employee0s continued employment poses a serious and imminent threat to the life or property of the employer or of the employee0s co2wor ers. 8ithout this ind of threat, preventive suspension is not proper. ,ose &. ArtiEi%io vs. National Labor Relations Commission, R& Guardians 7e%urity Agen%y, 'n%. ,uan -i%tor A. Laurilla, Alberto Aguirre, and Antonio A. Andres, G.R. No. 1( *.., ,uly 6, !1! $ublic employees; demotion. There is demotion when an employee is appointed to a position that results in a diminution in duties, responsibilities, status or ran which may or may not involve a reduction in salary. 8here an employee is appointed to a position with the same duties and responsibilities with a ran and salary higher than those he en%oyed in his previous position, there is no demotion and the appointment is valid. -irginia <. #autista vs. Civil 7ervi%e Commission and <evt. #an> oE t$e &$ilippines, G.R. No. 1.) 1), ,uly , !1!. $ublic employees; downgrading of employees. The summary reallocation of :o0s position to a lower degree resulting in the corresponding downgrading of his salary infringed the policy of non2diminution of pay which the Court recogni1ed and applied in &$ilippine &orts Aut$ority v. Commission on Audit , as well as in the subse*uent sister cases involving benefits of government employees. #unning through the gamut of these cases is the holding that the affected government employees shall continue to receive benefits they were en%oying as incumbents upon the effectivity of #' @EAC. #elevant to the critical issue at hand is Sec. -A ,b. of $D ?CA which, as amended by Sec. -= ,a. of #' @EAC, pertinently reads+ Sec. -=. &ay Redu%tion H If an employee is moved Erom a $ig$er to a lo?er %lass, $e s$all not suEEer a redu%tion in salary + $rovided, That such movement is not the result of a disciplinary action or voluntary demotion. GonCalo 7. Go, ,r. vs. CA and 3EEi%e oE t$e &resident, G.R. No. 1( ! (. ,uly *, !1! #edundancy; definition; re*uisites. #edundancy e6ists when the service capability of the wor force is in e6cess of what is reasonably needed to meet the demands of the enterprise. ' redundant position is one rendered superfluous by any number of factors, such as over hiring of wor ers, decreased volume of business, dropping of a particular product line previously manufactured by the company, or phasing out of a service activity previously underta en by the business. )nder these conditions, the employer has no legal obligation to eep in its payroll more employees than are necessary for the operation of its business. (or a valid implementation of a redundancy program, the employer must comply with the following re*uisites+ ,-. written notice served on both the employees and the D4"> at least one month prior to the intended date of termination of employment; ,/. payment of separation pay e*uivalent to at least one month pay for every year of service; ,=. good faith in abolishing the redundant positions; and ,7. fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished. Lambert &a?nbro>ers and ,e?elry %orporation and Lambert Lim vs. 1elen #inamira, G.R. No. 1(!464. ,uly 1 , !1!. #etirement; retirement age. The retirement age is primarily determined by the e6isting agreement or employment contract. 'bsent such an agreement, the retirement age under 'rticle /CE of the "abor Code will apply. Amelia R. 3busan vs. &$ilippine National #an>, G.R. No. 1.11(., ,uly 6, !1!. #etirement; retirement plan. #etirement plans allowing employers to retire employees who have not yet reached the compulsory retirement age of @A years are not per se repugnant to the constitutional guaranty of security of tenure. &y its e6press language, the "abor Code permits employers and employees to fi6 the applicable retirement age at @F years or below, provided that the employees0 retirement benefits under any C&' and other agreements shall not be less than those provided by law. Amelia R. 3busan vs. &$ilippine National #an>, G.R. No. 1.11(., ,uly 6, !1!.

#etrenchment; definition; re*uisites. #etrenchment is the termination of employment initiated by the employer through no fault of and without pre%udice to the employees. It is resorted to during periods of business recession, industrial depression, seasonal fluctuations, or during lulls occasioned by lac of orders, shortage of materials, conversion of the plant to a new production program, or automation. It is a management prerogative resorted to avoid or minimi1e business losses. To effect a valid retrenchment, the following elements must be present+ ,-. the retrenchment is reasonably necessary and li ely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious and real, or only if e6pected, are reasonably imminent as perceived ob%ectively and in good faith by the employer; ,/. the employer serves written notice both to the employee5s concerned and the D4"> at least one month before the intended date of retrenchment; ,=. the employer pays the retrenched employee separation pay in an amount prescribed by law; ,7. the employer e6ercises its prerogative to retrench in good faith; and ,A. the employer uses fair and reasonable criteria in ascertaining who would be retrenched or retained. Lambert &a?nbro>ers and ,e?elry %orporation and Lambert Lim vs. 1elen #inamira, G.R. No. 1(!464. ,uly 1 , !1! #etrenchment; decrease in income is not business loss. ' sharp drop in income from $-million to only $@@A,FFF.FF is not the ind of business losses contemplated by the "abor Code that would %ustify a valid retrenchment. ' mere decline in gross income cannot in any manner be considered as serious business losses. It should be substantial, sustained and real. Lambert &a?nbro>ers and ,e?elry %orporation and Lambert Lim vs. 1elen #inamira, G.R. No. 1(!464. ,uly 1 , !1!. Separation pay; as e*uitable relief. 3aving determined that the imposition of preventive suspension was proper and that the complainant was not illegally dismissed, the Court found no basis to grant bac wages. 3owever, given the attendant circumstances of the case H that complainant had been wor ing with the company for a period of si6teen ,-@. years without any previous derogatory record D the Court held that the ends of social and compassionate %ustice would be served if the employee is given some e*uitable relief in the form of separation pay. ,ose &. ArtiEi%io vs. National Labor Relations Commission, R& Guardians 7e%urity Agen%y, 'n%. ,uan vi%tor A. Laurilla, Alberto Aguirre, and Antonio A. Andres, G.R. No. 1( *.., ,uly 6, !1! LABOR PROCEDURE Burisdiction; intra2union disputes. Section //@ of the "abor Code clearly provides that the &"# and the #egional Directors of D4"> have concurrent %urisdiction over inter2union and intra2union disputes. Such disputes include the conduct or nullification of election of union and wor ers0 association officers. There is, thus, no doubt as to the &"#0s %urisdiction over the instant dispute involving member2unions of a federation arising from disagreement over the provisions of the federation0s constitution and by2laws. Atty. Allan 7. 2ontaDo vs. Atty Ernesto C. -er%eles, G.R. No. 16.).3, ,uly 6, !1!. "abor tribunal; factual finding. 's a rule, a petition for certiorari under #ule @A is valid only when the *uestion involved is an error of %urisdiction, or when there is grave abuse of discretion amounting to lac or e6cess of %urisdiction on the part of the court or tribunals e6ercising *uasi2%udicial functions. 3ence, courts e6ercising certiorari %urisdiction should refrain from reviewing factual assessments of the respondent court or agency. 4ccasionally, however, they are constrained to wade into factual matters when the evidence on record does not support those factual findings; or when too much is concluded, inferred or deduced from the bare or incomplete facts appearing on record. The C' rightfully reviewed the correctness of the labor tribunals0 factual findings not only because of the foregoing inade*uacies, but also because the !"#C and the "abor 'rbiter came up with conflicting findings.

Lambert &a?nbro>ers and ,e?elry %orporation and Lambert Lim vs. 1elen #inamira, G.R. No. 1(!464. ,uly 1 , !1!. Money claims; effect of failure to include in prayer for relief. The rule is well2settled that points of law, theories, issues and arguments not ade*uately brought to the attention of the trial court need not be, and ordinarily will not be considered by a reviewing court as they cannot be raised for the first time on appeal because this would be offensive to the basic rules of fair play, %ustice and due process. Though there is nothing on record which would show that the amount of $/FE,@?= has been returned to $##M, a perusal of the pleadings show that $##M failed to include the return of such amount in its prayer for relief. 3ence, the "abor 'rbiter cannot act on the same. ' prayer for a monetary award should have been raised at the earliest opportunity before the "abor 'rbiter. $hilippine #ural #econstruction vs. Girgilio $ulgar, G.R. No. 16* (. ,uly ), !1!. !"#C #ules of $rocedure; certificate of non2forum shopping. The filing of a certificate of non2forum shopping is mandatory in initiatory pleadings; non2 compliance with the re*uired certification is fatal. The filing of the same is not waived by the other party0s failure to immediately assert the defect, and neither is it cured by its belated submission on the ground that the party was not in any way guilty of actual forum shopping. In cases where the Court tolerated the deficiency, special circumstances or compelling reasons made the strict application un%ustified. In this case, however, the petitioners offered no valid %ustification for their failure to comply with the Circular. 2andaue Galleon +rade, 'n%., et al. vs. #ienvenido 'sidto, et al., G.R. No. 1.1!)1, ,uly ), !1!. #ule 7A; when review of facts allowed. 's a rule, a petition for review under #ule 7A of the #ules of Court must raise only *uestions of law. 3owever, the rule has e6ceptions such as when the findings of the "abor 'rbiter, !"#C and Court of 'ppeals vary, as in this case. 2aribago #lue?ater #ea%$ Resort, 'n%. vs. Nito <ual, G.R. No. 1.!66!, ,uly !, !1! JUNE 2010 Labor Law 'cceptance of &enefits, render moot claim under other policies. 's in the case of Capili v. National Labor Relations Commission I/E= SC#' AE@J, a claim for benefit under the company0s retirement plan becomes moot when the employee accepts retirement benefits on the basis of 'rticle /CE of the "abor Code. &y Kuson0s acceptance of her retirement benefits through a compromise agreement entered into with her employer, she is deemed to have opted to retire under 'rticle /CE. Aorean Air Co., Ltd and 7u> Ayoo Aim v. Adelina A.7. ;uson, G.R. No. 1(!36*, ,une 16, !1!. 'pproval for company0s early retirement program; management prerogative. 'pproval of applications for the early retirement program ,;>#$<. is within the employer0s management prerogatives. The e6ercise of management prerogative is valid as long as it is not done in a malicious, harsh, oppressive, vindictive, or wanton manner. In the present case, the Court sees no bad faith on the part of the employer. The /- 'ugust /FF- memorandum clearly states that petitioner, on its discretion, was offering >#$ to its employees. The memorandum also states that the reason for the >#$ was to prevent further losses. $etitioner did not abuse its discretion when it e6cluded respondent in the >#$ because the latter is already about to retire. To allow respondent to avail of the >#$ would have been contrary to the purpose of the program. Aorean Air Co., Ltd and 7u> Ayoo Aim v. Adelina A.7. ;uson, G.R. No. 1(!36*, ,une 16, !1!. Constructive dismissal; definition; transfer as management prerogative . Constructive dismissal is defined as a *uitting because continued employment is rendered impossible, unreasonable or unli ely, or when there is a demotion in ran

or a diminution of pay. It e6ists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment. 3ere, there was no diminution of petitioner0s salary and other benefits. There was no evidence that she was harassed or discriminated upon, or that respondents made it difficult for her to continue with her other duties. 'bsent any evidence of bad faith, it is within the e6ercise of respondents0 management prerogative to transfer some of petitioner0s duties, if, in their %udgment, this would be more beneficial to the corporation. Estrella -elas%o vs. +ransit Automotive 7upply, 'n%. and Antonio de <ios, G.R. No. 1(13 (, ,une 1., !1!. Constructive dismissal; off2detailing; resignation; notice re*uirement . The company evidently placed petitioner on floating status after being relieved of her position. &ut, as the Court has repeatedly ruled, such act of ;off2detailing< does not amount to a dismissal so long as the floating status does not continue beyond a reasonable time. In this case, the employee0s floating status ran up to more than si6 months as of 'ugust -@, /FF/. (or this reason, the company may be considered to have constructively dismissed the employee from wor as of that date. 3ence, petitioner0s purported resignation on 4ctober -A, /FF/ could not have been legally possible. The company claims that it gave petitioner notices on 'ugust /=, /FF/ and September /, /FF/, as ing her to e6plain her failure to report for wor and informing her that the company would treat such failure as lac of interest in her continued employment. &ut these notices cannot possibly ta e the place of the notices re*uired by law as they came more than si6 months after the company placed her on floating status, at which time, the employee is already deemed to have been constructively dismissed her from wor . Elsa 7. 2aliBon v. E=uitable General 7ervi%es 'n%., G.R. No. 1.) 6*, ,une *, !1!. Death benefits; entitlement. In order to avail of death benefits, the death of the employee should occur during the term of the employment contract. (or emphasis, we reiterate that the death of a seaman during the term of employment contract ma es the employer liable to his heirs for death benefits, but if the seaman dies after his contract of employment has e6pired, his beneficiaries are not entitled to the death benefits. 7out$eastern 7$ipping, 7out$eastern 7$ipping Group, Ltd. vs. Federi%o /. Navarra, ,r., G.R. No. 16(6(., ,une , !1!. Death benefits; post2medical e6amination; inadvertence of employer. In the cases of $hilippines., Inc. v. Boa*uin I7=E SC#' @FCJ and #ivera v. 8allem Maritime Services, Inc.I7E7 SC#' E-7J, the Supreme Court stressed the importance of a post2 employment medical e6amination or its e*uivalent for the award of death benefits to seafarers and5or their representatives in compliance with $4>' Memorandum Circular !o. FAA2?@ and Department 4rder !o. ==, Series of -??@, which provide that the seafarer must report to his employer for a post2employment medical e6amination within three wor ing days from the date of arrival, otherwise, benefits under the $4>' standard employment contract would be nullified. 3owever, in the present case, the absence of a post2employment medical e6amination cannot be used to defeat respondent0s claim since the failure to sub%ect the seafarer to this re*uirement was not due to the seafarer0s fault but to the inadvertence or deliberate refusal of petitioners. 'nterorient 2aritime Enterprises, 'n%. et al. v. Leonora 7. Remo, G.R. No. 1.111 , ,une *, !1!. Dismissal; breach of trust; lac of loss not a defense. The acts of the employee revealed a mind that was willing to disregard ban rules and regulations when other branch officers concurred. 3er defense that the ban suffered no loss is of no moment. The focal point is that she betrayed the trust of the ban . 3ence, the ban rightfully terminated the services of the employee for willful breach of the trust that it reposed in her. LuCviminda A. Ang vs. &$ilippine National #an> , G.R. No. 1(.(6 , ,une 16, !1!.

Dismissal; burden of proof. In termination cases, the burden of proof rests upon the employer to show that the dismissal of the employee is for %ust cause and failure to do so would mean that the dismissal is not %ustified. This is in consonance with the guarantee of security of tenure in the Constitution, and elaborated in the "abor Code. ' dismissed employee is not re*uired to prove his innocence to the charges leveled against him by his employer. The determination of the e6istence and sufficiency of a %ust cause must be e6ercised with fairness and in good faith and after observing due process. Lima Land, 'n%., Leandro ,avier, 7ylvia <u=ue and &remy Ann #eloy vs. 2arlyn Cuavas, :.R. No. 16*) 3, ,une 16, !1!. Dismissal; e6ercised with compassion and understanding; doubts resolved in favor of employee. 8hile an employer has its own interest to protect, and pursuant thereto, it may terminate a managerial employee for a %ust cause, such prerogative to dismiss or lay off an employee must be e6ercised without abuse of discretion. Its implementation should be tempered with compassion and understanding. The employer should bear in mind that, in the e6ercise of the said prerogative, what is at sta e is not only the employee0s position, but his very livelihood, his very breadbas et. Indeed, the consistent rule is that if doubts e6ist between the evidence presented by the employer and the employee, the scales of %ustice must be tilted in favor of the latter. The employer must affirmatively show rationally ade*uate evidence that the dismissal was for %ustifiable cause. Thus, when the breach of trust or loss of confidence alleged is not borne by clearly established facts, as in this case, such dismissal on the cited grounds cannot be allowed. Lima Land, 'n%., Leandro ,avier, 7ylvia <u=ue and &remy Ann #eloy vs. 2arlyn Cuavas , :.R. No. 16*) 3, ,une 16, !1!. Dismissal; gross neglect of duty; duty to family is no defense. Dr. >stampa0s defense is not acceptable. ' person0s duty to his family is not incompatible with his %ob2related commitment to come to the rescue of victims of disasters. Disasters do not stri e every day. &esides, nowing that his %ob as senior medical health officer entailed the commitment to ma e a measure of personal sacrifice, he had the choice to resign from it when he reali1ed that he did not have the will and the heart to respond. <r. Edilberto Estampa, ,r. vs. Government oE <avao , G.R. No. 1*!6.1, ,une 1, !1!. Dismissal; loss of confidence not entitled to separation pay . It is significant to stress that for there to be a valid dismissal based on loss of trust and confidence, the breach of trust must be willful, meaning it must be done intentionally, nowingly, and purposely, without %ustifiable e6cuse. The basic premise for dismissal on the ground of loss of confidence is that the employee concerned holds a position of trust and confidence. It is the breach of this trust that results in the employer0s loss of confidence in the employee. In the case of Aromin v. NLRC IAA= SC#' /E=J, the assistant vice2president of &$I was validly dismissed for loss of trust and confidence. The Court disallowed the payment of separation pay on the ground that he was found guilty of willful betrayal of trust, a serious offense a in to dishonesty. #an> oE t$e &$ilippine 'slands and #&' Family #an> vs. 1on. National Labor Relations Commission 41st <ivision5 and 2a. Rosario N. Arambulo, G.R. No. 1(*.!1. ,une 1., !1!. Dismissal; loss of trust and confidence; managerial employees. "oss of trust and confidence, as a %ust cause for termination of employment, is premised on the fact that an employee concerned holds a position where greater trust is placed by management and from whom greater fidelity to duty is correspondingly e6pected. This includes managerial personnel entrusted with confidence on delicate matters, such as the custody, handling, or care and protection of the employer0s property. The betrayal of this trust is the essence of the offense for which an employee is penali1ed. It must be noted, however, that in a plethora of cases, the Supreme Court has distinguished the treatment of managerial employees from that of ran 2and2file

personnel, insofar as the application of the doctrine of loss of trust and confidence is concerned. Thus, with respect to ran 2and2file personnel, loss of trust and confidence, as ground for valid dismissal, re*uires proof of involvement in the alleged events in *uestion, and that mere uncorroborated assertions and accusations by the employer will not be sufficient. &ut as regards a managerial employee, the mere e6istence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. 3ence, in the case of managerial employees, proof beyond reasonable doubt is not re*uired, it being sufficient that there is some basis for such loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence demanded of his position. Lima Land, 'n%., Leandro ,avier, 7ylvia <u=ue and &remy Ann #eloy vs. 2arlyn Cuavas , :.R. No. 16*) 3, ,une 16, !1!. Dismissal; mere negligence or carelessness not sufficient ground for loss of confidence. #espondent0s negligence or carelessness in her duties, however, are not %ustifiable grounds for petitioners0 loss of trust and confidence in her, especially in the absence of any malicious intent or fraud on respondent0s part. "oss of trust and confidence stems from a breach of trust founded on a dishonest, deceitful or fraudulent act. In the case at bar, respondent did not commit any act which was dishonest or deceitful. She did not use her authority as the (inance and 'dministration Manager to misappropriate company property nor did she abuse the trust reposed in her by petitioners with respect to her responsibility to implement company rules. The most that can be attributed to respondent is that she was remiss in the performance of her duties. This, though, does not constitute dishonest or deceitful conduct which would %ustify the conclusion of loss of trust and confidence. Lima Land, 'n%., Leandro ,avier, 7ylvia <u=ue and &remy Ann #eloy vs. 2arlyn Cuavas, :.R. No. 16*) 3, ,une 16, !1!. Dismissal for %ust cause, separation pay allowed in e6ceptional cases. 8hile as a general rule, an employee who has been dismissed for any of the %ust causes enumerated under 'rticle /C/ of the "abor Code is not entitled to separation pay, the Court has allowed in numerous cases the grant of separation pay or some other financial assistance to an employee dismissed for %ust causes on the basis of e*uity. In the leading case of &$ilippine Long <istan%e +elep$one Co. v. NLRC I-@7 SC#' @E-J the Court stated that separation pay shall be allowed as a measure of social %ustice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. In granting separation pay to respondent, the !"#C and Court of 'ppeals both adhered to this %urisprudential precept and cleared respondent of bad faith. #an> oE t$e &$ilippine 'slands and #&' Family #an> vs. 1on. National Labor Relations Commission 41st <ivision5 and 2a. Rosario N. Arambulo , G.R. No. 1(*.!1, ,une 1., !1!. >mployee benefit; total disability construed. It has been held that disability is intimately related to one0s earning capacity. It should be understood less on its medical significance but more on the loss of earning capacity. Total disability does not mean absolute helplessness. In disability compensation, it is not the in%ury, which is compensated, but rather the incapacity to wor resulting in the impairment of one0s earning capacity. Thus, permanent disability is the inability of a wor er to perform his %ob for more than -/F days, regardless of whether or not he loses the use of any part of his body. 3riental 7$ip 2anagement Co., 'n%. vs. Romy #. #astol, G.R. No. 1.6 .*, ,une *, !1!. >mployer2>mployee #elationship; agents of insurance companies; e6ception to the Insular case; 4ur ruling in the first 'nsular %ase J'nsular 'nsuran%e v. NLRC, 1(* 7CRA 4)*K case did not foreclose the possibility of an insurance agent becoming an employee of an insurance company; if evidence e6ists showing that the company promulgated rules or regulations that effectively controlled or restricted an

insurance agent0s choice of methods or the methods themselves in selling insurance, an employer2employee relationship would be present. The e6istence of an employer2employee relationship is thus determined on a case2to2case basis depending on the evidence on record. Gregorio -. +ong>o v. +$e 2anuEa%turers LiEe 'nsuran%e Co. 4&$ils5 and Renato A. -ergel <e <ios, G.R. No. 16(6 , ,une *, !1!. !ature of employer; privati1ation; entitlement to benefits . 'lthough the transformation of the $!& from a government2owned corporation to a private one did not result in a brea in its life as %uridical person, the same idea of continuity cannot be said of its employees. Section /E of $residential $roclamation AF provided for the automatic termination of employer2employee relationship upon privati1ation of a government2owned and controlled corporation. (urther, such privati1ation cannot deprive the government employees involved of their accrued benefits or compensation. 's for possible benefits accruing after privati1ation, the same should be deemed governed by the "abor Code since the $!& that rehired the employee has become a private corporation. )nder the 4mnibus #ules Implementing the "abor Code, &oo GI, #ule I, Section E, the employee0s separation from wor for a %ust cause does not entitle her to termination pay. LuCviminda A. Ang vs. &$ilippine National #an> , G.R. No. 1(.(6 , ,une 16, !1!. !ature of employer; privati1ation no defense; continuity of offense . The offense for which petitioner was removed too place when the government still owned $!& and she was then a government employee. &ut while $!& began as a government corporation, it did not mean that its corporate being ceased and was subse*uently reestablished when it was privati1ed. It remained the same corporate entity before, during, and after the change over with no brea in its life as a corporation. Conse*uently, the offenses that were committed against the ban before its privati1ation continued to be offenses against the ban after the privati1ation. LuCviminda A. Ang vs. &$ilippine National #an> , G.R. No. 1(.(6 , ,une 16, !1!. $rescription of labor claims; overseas contract wor ers. The employment of seafarers, including claims for death benefits, is governed by the contracts they sign every time they are hired or rehired; and as long as the stipulations therein are not contrary to law, morals, public order or public policy, they have the force of law between the parties. In Cadalin v. &3EAGs Administrator I/=C SC#' E/-, E@7J we held that 'rticle /?- of the "abor Code covers all money claims from employer2employee relationship. ;It is not limited to money claims recoverable under the "abor Code, but applies also to claims of overseas contract wor ers<. 'rticle /?- of the "abor Code is the law governing prescription of money claims of seafarers, a class of overseas contract wor ers. This law prevails over Section /C of the Standard >mployment Contract for Seafarers, which provides for claims to be brought only within one year from the date of the seafarer0s return to the point of hire. Thus, for the guidance of all, Section /C of the Standard >mployment Contract for Seafarers, insofar as it limits the prescriptive period for the filing of money claims by seafarers, is hereby declared null and void. The applicable provision is 'rticle /?- of the "abor Code, it being more favorable to the seafarers and more in accord with the State0s declared policy to afford full protection to labor, which provides for a three2year prescriptive period. 7out$eastern 7$ipping, 7out$eastern 7$ipping Group, Ltd. vs. Federi%o /. Navarra, ,r. , G.R. No. 16(6(., ,une , !1!. Luitclaims; general rule; re*uirements for validity; instances when it was annulled. 's a rule, *uitclaims, waivers, or releases are loo ed upon with disfavor and are largely ineffective to bar claims for the measure of a wor er0s legal rights. To be valid, a Deed of #elease, 8aiver and5or Luitclaim must meet the following re*uirements+ ,-. that there was no fraud or deceit on the part of any of the parties; ,/. that the consideration for the *uitclaim is credible and reasonable; and ,=. that

the contract is not contrary to law, public order, public policy, morals or good customs, or pre%udicial to a third person with a right recogni1ed by law. Courts have stepped in to annul *uestionable transactions, especially where there is clear proof that a waiver, for instance, was obtained from an unsuspecting or a gullible person; or where the agreement or settlement was unconscionable on its face. ' *uitclaim is ineffective in barring recovery of the full measure of a wor er0s rights, and the acceptance of benefits therefrom does not amount to estoppel. Moreover, a *uitclaim in which the consideration is scandalously low and ine*uitable cannot be an obstacle to the pursuit of a wor er0s legitimate claim. 'nterorient 2aritime Enterprises, 'n%. et al. v. Leonora 7. Remo, G.R. No. 1.111 , ,une *, !1!. #etirement benefits; does not include allowances. >6ecutive 4rder !o. EA@ temporary measure; statutory construction. Section @ of >6ecutive 4rder !o. EA@ ,;>.4. EA@<., which provides for the computation of retirement proceeds including allowances, does not provide for a permanent retirement plan, as against the prohibition of Section /C, Subsection ,b. of Commonwealth 'ct !o. -C@ ,;C.'. -C@<., as amended. The >.4. EA@ should be read ad%unct to its mandate of reorgani1ing the $hilippine International Trading Corporation. The increased benefit under >.4. EA@ was clearly meant as an incentive for employees who retire, resign or are separated from service during or as a conse*uence of the reorgani1ation. 's a temporary measure, it cannot be interpreted as an e6ception to the general prohibition against separate or supplementary insurance and5or retirement or pension plans under C.'. -C@, as amended. In reconciling >.4. EA@ with C.'.-C@, as amended, uppermost in the mind of the Court is the fact that the best method of interpretation is that which ma es laws consistent with other laws which are to be harmoni1ed rather than having one considered repealed in favor of the other. &$ilippine 'nternational +rading Corporation vs. Commission on Audit, G.R. No. 1.3)1(, ,une , !1!. #esignation; burden of proof. The rule in termination cases is that the employer bears the burden of proving that he dismissed his employee for a %ust cause. 'nd, when the employer claims that the employee resigned from wor , the burden is on the employer to prove that he did so willingly. 8hether that is the case would largely depend on the circumstances surrounding such alleged resignation. Those circumstances must be consistent with the employee0s intent to give up wor . Elsa 7. 2aliBon v. E=uitable General 7ervi%es 'n%., G.R. No. 1.) 6*, ,une *, !1!. Solidary liability of employers; proof of bad faith . &ased on 2A2 Realty <evelopment Corporation v. NLRC I/77 SC#' E?EJ, for corporate officers to be held solidarily liable in labor disputes there must be evidence of bad faith or malice. @uerubin L. Alba and RiCalinda <. <e GuCman vs. Robert L. ;upang%o, G.R. No. 1.. 33, ,une *, !1!. Labor Proced re Budgment; amendment of final order; solidary liability . The "abor 'rbiter cannot modify a final and e6ecutory %udgment, even if the modification is meant to correct erroneous conclusions of fact and law, whether it be made by the court that rendered it or by the highest court in the land. The only recogni1ed e6ceptions are the corrections of clerical errors or the ma ing of so2called nun% pro tun% entries which cause no pre%udice to any party and in cases where the %udgment is void. Said e6ceptions do not apply in the present case. @uerubin L. Alba and RiCalinda <. <e GuCman vs. Robert L. ;upang%o, G.R. No. 1.. 33, ,une *, !1!. Budgment; law of the case; definition and application. ;"aw of the case< has been defined as the opinion delivered on a former appealHit is a term applied to an established rule that when an appellate court passes on a *uestion and remands the case to the lower court for further proceedings, the *uestion there settled

becomes the law of the case upon subse*uent appeal. 4SCI0s application of the law of the case principle to the instant case, as regards the remand of the case to the "abor 'rbiter for clarificatory hearings, is misplaced. The only matter settled in the Buly =F, -??? !"#C Decision, which can be regarded as law of the case, was the undisputed fact that &astol was suffering from a heart ailment. 's it is, the issue on the degree of disability of &astol0s heart ailment and his entitlement to disability indemnity, as viewed by the !"#C through said decision, has yet to be resolved. (or this reason, the !"#C remanded the case to "abor 'rbiter Mayor, Br. ;for conduct of further appropriate proceedings and to terminate the same with dispatch. 3riental 7$ip 2anagement Co., 'n%. vs. Romy #. #astol, G.R. No. 1.6 .*, ,une *, !1!. Budgment; res %udicata; nature and applicability. The nature of res 0udi%ata, as now embodied in Sec. 7E, #ule =? of the #ules of Court, has two concepts, which are ,i. bar by former %udgment and ,ii. conclusiveness of %udgment. These concepts of the doctrine of res 0udi%ata are applicable to second actions involving substantially the same parties, the same sub%ect matter, and cause or causes of action. In the instant case, there is no second action to spea of. 3riental 7$ip 2anagement Co., 'n%. vs. Romy #. #astol, G.R. No. 1.6 .*, ,une *, !1!. $rocedure; certificate of non2forum shopping; pro2forma complaints . (or the e6peditious and ine6pensive filing of complaints by employees, the #egional 'rbitration &ranch ,;#'&<. of the !"#C provides pro2forma complaint forms. This is to facilitate the e6ercise and protection of employees0 rights by the convenient assertion of their claims against employers untrammeled by procedural rules and comple6ities. To comply with the certification against forum shopping re*uirement, a simple *uestion embodied in the Complaint form answerable by ;yes< or ;no< suffices. >mployee2complainants are not even re*uired to have a counsel before they can file their complaint. 'n officer of the #'&, duly authori1ed to administer oaths, is readily available to facilitate the e6ecution of the re*uired subscription or 0urat of the complaint. 3riental 7$ip 2anagement Co., 'n%. vs. Romy #. #astol, G.R. No. 1.6 .*, ,une *, !1!. $rocedure; conduct of hearings; discretionary; e6emptions. 'lthough, the !"#C, while having appellate %urisdiction over decisions and resolutions of the "abor 'rbiter, may not dictate to the latter how to conduct the labor case before it. Sec. ? of #ule G of the then prevailing !"#C #ules of $rocedure, issued on December -F, -???, provided for the nature of proceedings before the "abor 'rbiter as non2 litigious in nature. 3ence, the "abor 'rbiter is given full discretion to determine, motu proprio, on whether to conduct hearings or not. Conse*uently, a hearing cannot be demanded by either party as a matter of right. The parties are re*uired to file their corresponding position papers and all the documentary evidence and affidavits to prove their cause of action and defenses. The rationale behind this is to avoid delay and curtail the pernicious practice of withholding of evidence. The Court, however, has recogni1ed specific instances of the impracticality for the "abor 'rbiter to follow the position paper method of disposing cases; thus, formal or clarificatory hearings must be had in cases of termination of employment+ such as, ,i. when claims are not properly ventilated for lac of proper determination whether complainant employee was a ran 2and2file or a managerial employee, ,ii. that the "abor 'rbiter cannot rely solely on the parties0 bare allegations when the affidavits submitted presented conflicting factual issues, and ,iii. considering the dearth of evidence presented by complainants the "abor 'rbiter should have set the case for hearing. 3riental 7$ip 2anagement Co., 'n%. vs. Romy #. #astol, G.R. No. 1.6 .*, ,une *, !1!. $rocedure; verification by counsel sufficient. The counsel0s verification in a $osition $aper substantially complies with the rule on verification. The second paragraph of Sec. 7, #ule E of the #ules of Court provides+ ;' pleading is verified by an affidavit

that the affiant has read the pleading and that the allegations therein are true and correct of his personal nowledge or based on authentic records.< 4n the other hand, the actual verification of counsel states+ ;That I am the counsel of record for the complainant in the above2entitled case; that I caused the preparation of the foregoing $osition $aper; that I have read and understood the contents thereof; and that I confirm that all the allegations therein contained are true and correct based on recorded evidence.< 3riental 7$ip 2anagement Co., 'n%. vs. Romy #. #astol , :.#. !o. -C@/C?, Bune /?, /F-F. $rocedure; late filing of position paper, and filing of prohibited pleading. The rela6ation of rules of technical procedure in the hearing of labor disputes shall not be applicable in case counsel fails to file a position paper before the "abor 'rbiter not %ust once but twice. 3is situation was compounded when he filed a motion to recall order of dismissal, a prohibited pleading, albeit gratuitously glossed over by the "abor 'rbiter, which treated it as an appeal; and when he belatedly paid the appeal fee. Moreover, not having learned his lesson, petitioner0s counsel filed a motion for reconsideration of the !"#C dismissal of his appeal, which is also prohibited, instead of interposing an appeal before the Court of 'ppeals. Said motion for reconsideration not having tolled the running of the reglementary period for the filing of a petition for certiorari under #ule @A, petitioner0s petition before the appellate court was filed out of time D three months late. Luis 2. Rivera vs. &arentsB +ea%$ers Community Asso%iation and Easter ;ase, G.R. No. 1.1)3 , ,une *, !1!. $rocedure; late submission of documentary evidence allowed. The nature of the proceedings before the "abor 'rbiter is not only non2litigious and summary, but the "abor 'rbiter is also given great leeway to resolve the case; thus, he may ;avail himself of all reasonable means to ascertain the facts of the controversy.< The belated submission of additional documentary evidence by respondent after the case was already submitted for decision did not ma e the proceedings before the "abor 'rbiter improper. The basic reason is that technical rules of procedure are not binding in labor cases. 3riental 7$ip 2anagement Co., 'n%. vs. Romy #. #astol, G.R. No. 1.6 .*, ,une *, !1!. $rocedure; *uantum of evidence on appeal; substantial evidence. In administrative proceedings, the *uantum of proof re*uired is substantial evidence, which is more than a mere scintilla of evidence, but such amount of relevant evidence which a reasonable mind might accept as ade*uate to %ustify a conclusion. The Court of 'ppeals may review the factual findings of the !"#C and reverse its ruling if it finds that the decision of the !"#C lac s substantial basis. Estrella -elas%o vs. +ransit Automotive 7upply, 'n%. and Antonio de <ios, G.R. No. 1(13 (, ,une 1., !1!. #A$ 2010 Labor !aw Illegal dismissal; bac wages. The basis for the payment of bac wages is different from that for the award of separation pay. Separation pay is granted where reinstatement is no longer advisable because of strained relations between the employee and the employer. &ac wages represent compensation that should have been earned but were not collected because of the un%ust dismissal. The basis for computing bac wages is usually the length of the employee0s service while that for separation pay is the actual period when the employee was unlawfully prevented from wor ing. 's to how both awards should be computed, 2a%asero v. 7out$ern 'ndustrial Gases &$ilippines JG.R. No. 1(.) 4, ,anuary 3!, !!*K instructs that the award of separation pay is inconsistent with a finding that there was no illegal dismissal, for under 'rticle /E? of the "abor Code and as held in a catena of cases, an employee who is dismissed without %ust cause and without due process is entitled to

bac wages and reinstatement or payment of separation pay in lieu thereof. Thus, an illegally dismissed employee is entitled to two reliefs+ bac wages and reinstatement. The two reliefs provided are separate and distinct. Golden A%e #uilders and Arnold /. ACur vs. ,ose A. +alde, G.R. No. 1.( !!, 2ay ), !1!. Illegal dismissal; doctrine of strained relations. )nder the do%trine oE strained relations, the payment of separation pay is considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable. 4n one hand, such payment liberates the employee from what could be a highly oppressive wor environment. 4n the other hand, it releases the employer from the grossly unpalatable obligation of maintaining in its employ a wor er it could no longer trust. Strained relations must be demonstrated as a fact, however, to be ade*uately supported by evidenceH substantial evidence to show that the relationship between the employer and the employee is indeed strained as a necessary conse*uence of the %udicial controversy. In the present case, the "abor 'rbiter found that actual animosity e6isted between petitioner '1ul and respondent as a result of the filing of the illegal dismissal case. Such finding, especially when affirmed by the appellate court as in the case at bar, is binding upon the Court, consistent with the prevailing rules that the Court will not try facts anew and that findings of facts of *uasi2%udicial bodies are accorded great respect, even finality. Golden A%e #uilders and Arnold /. ACul vs. ,ose A. +alde, G.R. No. 1.( !!, 2ay ), !1!. Illegal dismissal; separation pay. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and bac wages. The normal conse*uences of respondents0 illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of bac wages computed from the time compensation was withheld up to the date of actual reinstatement. 8here reinstatement is no longer viable as an option, separation pay e*uivalent to one ,-. month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to payment of bac wages. The accepted doctrine is that separation pay may avail in lieu of reinstatement if reinstatement is no longer practical or in the best interest of the parties. Separation pay in lieu of reinstatement may li ewise be awarded if the employee decides not to be reinstated. Golden A%e #uilders and Arnold /. ACur vs. ,ose A. +alde, G.R. No. 1.( !!, 2ay ), !1!. Labor %roced re Budgment; final and e6ecutory. The "abor 'rbiter0s decision has long become final and e6ecutory and it can no longer be reversed or modified. !othing is more settled in law than when a final %udgment becomes e6ecutory, it thereby becomes immutable and unalterable. The %udgment may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of law or fact, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land. The only recogni1ed e6ception are the correction of clerical errors or the ma ing of so2called nun% pro tun% entries which cause no in%ury to any party, and, of course, where the %udgment is void. 4nce a %udgment becomes final and e6ecutory, the prevailing party should not be denied the fruits of his victory by some subterfuge devised by the losing party. (inal and e6ecutory %udgments can neither be amended nor altered e6cept for correction of clerical errors, even if the purpose is to correct erroneous conclusions of fact or of law. Trial and e6ecution proceedings constitute one whole action or suit

such that a case in which e6ecution has been issued is regarded as still pending so that all proceedings in the e6ecution are proceedings in the suit. It is no longer legally feasible to modify the final ruling in this case through the e6pediency of a petition *uestioning the order of e6ecution. Budgments of courts should attain finality at some point lest there be no end in litigation. The final %udgment in this case may no longer be reviewed, or in any way modified directly or indirectly, by a higher court, not even by the Supreme Court. The reason for this is that, litigation must end and terminate sometime and somewhere, and it is essential to an effective and efficient administration of %ustice that, once a %udgment has become final, the winning party be not deprived of the fruits of the verdict. Courts must guard against any scheme calculated to bring about that result and must frown upon any attempt to prolong controversies. 2armosy +rading, 'n%. and -i%tor 2orales vs. Court oE Appeals, et al., G.R. No. 1(!)1), 2ay 6, !1!. APRIL 2010 Labor Law Dismissal; bac wages. 'rticle /E? of the "abor Code provides that ;an employee who is un%ustly dismissed from wor shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full bac wages, inclusive of allowances, and to his other benefits or their monetary e*uivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.< Thus, a number of cases holds that an illegally dismissed employee is entitled to two reliefs+ bac wages and reinstatement. The two reliefs are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and bac wages. The normal conse*uences of respondents0 illegal dismissal, then, are reinstatement without loss of seniority rights, and payment of bac wages computed from the time compensation was withheld up to the date of actual reinstatement. 8here reinstatement is no longer viable as an option, separation pay e*uivalent to one ,-. month salary for every year of service should be awarded as an alternative. The payment of separation pay is in addition to the payment of bac wages. Since reinstatement is no longer feasible in the present case, the award of separation pay in lieu of reinstatement is in order. $etitioner0s prayer for the award of bac wages is meritorious, it, and the award of separation pay not being mutually e6clusive. Ferdinand A. &angilinan vs. 6ellmade 2anuEa%turing Corporation, G.R. No. 1.(!!), April (, !1!. Dismissal; bac wages. #eprimand being the appropriate imposable penalty for respondent0s actuations from the very beginning, the Court finds that respondent was unfairly denied from reporting for wor and earning his eep, thus, entitling him to the payment of bac wages. The Court is not unmindful of our previous pronouncements in similar cases involving suspension or dismissal from service, wherein the penalty imposed was reduced, but the award of bac wages was denied. :iven the circumstances of the case, however, where the proper penalty should only be a reprimand, the Court finds the aforementioned cases to be inapplicable herein. 4n this note, the Court deems it proper to distinguish between the penalties of dismissal or suspension and reprimand and their respective effects on the grant or award of bac wages. 8hen an employee is dismissed or suspended it is but

logical that since he is barred from reporting to wor the same negates his right to be paid bac wages. 3e has no opportunity to wor during the period he was dismissed or suspended and, therefore, he has no salary to e6pect. 3owever, the same does not hold true for an employee who is reprimanded. ' reprimand usually carries a warning that a repetition of the same or similar act will be dealt with more severely. )nder normal circumstances, an employee who is reprimanded is never prevented from reporting to wor . 3e continues to wor despite the warning. Thus, in the case at bar, since respondent0s penalty should only be a reprimand, the Court deems it proper and e*uitable to affirm the Court of 'ppeals0 ,C'0s. award of bac wages. In two instances, the Court granted the award of bac wages during the period the employees were prevented from reporting to wor despite concluding that the employee concerned violated reasonable office rules and regulations and imposing the penalty of reprimand. In ,a%into v. Court oE Appeals I:.#. !o. -/7A7F, !ovember -7, -??E, /C- SC#' @AEJ, the Court awarded petitioner Bacinto bac wages after finding that she was only culpable of violating reasonable office rules and regulations for not having as ed permission from school authorities to leave the school premises and see medical attention and for not filing an application for sic leave for approval by the school authorities. 'lso, in #angalisan v. Court oE Appeals I:.#. -/7@EC, Buly =-, -??E, /E@ SC#' @-?, @==J, after affirming the findings that one of the petitioners, #odolfo Mariano, is only liable for his violation of reasonable office rules and regulations for attending the wa e and internment of his grandmother without the benefit of an approved leave of absence and the imposition of the penalty of reprimand, the Court still granted him bac wages. Consistent with the Court0s rulings in #angalisan and ,a%into, the grant of bac wages to respondent is but proper. It is to be stressed that when imposing penalties, it must not only be made within the parameters of the law, but it should also satisfy the basic tenets of e*uity, %ustice, and fairplay. National &o?er Corporation vs. Alan 3landes%a, G.R. No. 1(1434, April 3, !1!. Dismissal; dishonesty. In &$ilippine Amusement and Gaming Corporation v. RilloroCa I:.#. !o. -7--7-, Bune /A, /FF-J, dishonesty is defined as the disposition to lie, cheat, deceive, or defraud; untrustworthiness; lac of integrity; lac of honesty, probity or integrity in principle; lac of fairness and straightforwardness; disposition to defraud, deceive or betray. It is not disputed that respondent too several materials and supplies from petitioner0s warehouse without the approved 8#S. 3owever, this should not be construed as dishonesty on the part of respondent that would warrant his dismissal from the service for the following reasons+ (irst, the withdrawals of the supplies were duly recorded in the security guard0s logboo . If respondent intended to defraud petitioner, he could have easily ta en items from the warehouse without having them recorded as he was then the Supervising $roperty 4fficer who had free access to the supplies. Second, right after withdrawing the items, respondent replaced them on his own initiative, without anyone instructing him to do so. This act negates his intent to defraud petitioner. Third, there is no clear showing that respondent misappropriated or converted the items for his own personal use or benefit. (ourth, the :raft Investigation 4fficer of the 4ffice of the 4mbudsman, in its #esolution dated (ebruary A, -???, in 4M&2-2?C2/F--, dismissed a complaint for *ualified theft filed by Teodulo G. "argo, Section Chief, $ower :eneration :roup of petitioner against respondent as there was no competent and sufficient evidence on record to show that there was intent to gain on the part of the respondent, considering that the materials and supplies ta en by him were used in fencing the watershed and reservation area of petitioner company. "i ewise, there was no basis to charge him for malversation of public property as there was no

misappropriation of the supplies for his personal use and that the same were for general purpose and not for any specific use. !onetheless, although the respondent did not commit an overt act of dishonesty, he is not e6onerated from liability. It was an established company procedure that before materials can be ta en out from the warehouse, the issuance of a 8#S is an indispensable re*uirement. In fact, there was even a warning posted at the door of the property office that states+ ;&'8'" M':"'&'S !: :'MIT 4 M':M'#:' !: :'S4"I!' !: 8'"'!: '$#)&'D4 !: 8#S.< &eing the Supervising $roperty 4fficer, respondent nows fully well that ta ing items from the warehouse without the re*uired 8#S is against the company rules and regulations. It is the paramount duty of respondent to protect the properties in the warehouse and to ensure that none shall be ta en away without proper documentation. The Machiavellian principle that ;the end %ustifies the means< has no place in government service, which thrives on the rule of law, consistency and stability. #espondent, by ta ing the said properties without the approved 8#S, violated reasonable office rules and regulations as provided in Section A/ ,C., ,=., #ule IG of Civil Service Commission Memorandum Circular !o. -?, series of -??? ,)niform #ules on 'dministrative Cases in the Civil Service.. Since this is respondent0s first offense in his more than -@ years of service, the appropriate penalty to be imposed against him is reprimand. National &o?er Corporation vs. Alan 3landes%a, G.R. No. 1(1434, April 3, !1!. Dismissal; lost of trust and confidence. To terminate the services of an employee for loss of trust and confidence, two re*uisites must concur+ ,-. the employee concerned must be holding a position of trust and confidence and ,/. there must be an act that would %ustify the loss of trust and confidence. In the present case, respondent failed to %ustify its loss of trust and confidence on Consolacion even as it imputed to him, via !otice of (ormal Investigation of 'pril -7, /FF=, non2compliance with ,a. established non2written procedures and standards; ,b. established written procedures and standards, and ,c. verbal orders and5or instructions. These alleged acts of non2compliance are too general and can encompass %ust about any malfeasance. !owhere in the !otice was there a detailed narration of the facts and circumstances that would serve as bases to terminate Consolacion, thus leaving to surmise what those procedures, standards and orders were. Anabel #en0amin, et al. vs. Amellar Corporation., G.R. No. 1.33.3, April ), !1!. Dismissal; management prerogative. #espondent0s right of management prerogative was e6ercised in good faith. #espondent presented evidence of the low volume of sales and orders for the production of industrial paper in -???, which inevitably resulted to the company0s decision to streamline its operations. This fact was corroborated by respondent0s G$2Tissue Manufacturing Director and was not disputed by petitioner. >6ercising its management prerogative and sound business %udgment, respondent decided to cut down on operational costs by shutting down one of its paper mill. 's held in 'nternational 1arvester 2a%leod, 'n%. v. 'ntermediate Appellate Court I/== $hil. @AA,@AA2@@@ ,-?CE.J the determination of the need to phase out a particular department and conse*uent reduction of personnel and reorgani1ation as a labor and cost saving device is a recogni1ed management prerogative which the courts will not generally interfere with. In this case, shutting down $aper Mill !o. 7 was undoubtedly a business %udgment arrived at in the face of the low demand for the production of industrial paper at the time. Despite an apparent reason to implement a retrenchment program as a cost2 cutting measure, respondent, did not dismiss the wor ers affected by the closure of $aper Mill !o. 7 outright but gave them an option to be transferred to posts of e*ual ran and pay. #etrenchment was given only as an option in case the affected employee did not want to be transferred. The Court viewed this as an indication of

good faith on respondent0s part since it e6hausted other possible measures before retrenchment. &esides, the employer0s prerogative to bring down labor costs by retrenchment must be e6ercised essentially as a measure of last resort, after less drastic means have been tried and found wanting. :iving the wor ers an option to be transferred without any diminution in ran and pay belie petitioner0s allegation that the streamlining scheme was implemented as a ploy to ease out employees. 'pparently, respondent implemented its streamlining or reorgani1ation plan in good faith, not in an arbitrary manner and without violating the tenurial rights of its employees. <annie 2. &anto0a vs. 7CA 1ygiene &rodu%ts Corporation, G.R. No. 163))4, April 3, !1!. Dismissal; retrenchment. The C' committed no reversible error in affirming the !"#C ruling that Talam was validly dismissed on the ground of retrenchment. The Supreme Court came to this conclusion based on the following considerations+ (irst, the decision to retrench had a basis; it was not simulated nor resorted to for the purpose of getting rid of employees. The decision was upon the recommendation of the company0s e6ternal auditor. Second, the cost2cutting measure recommended involved reduction of TS(I0s payroll e6pense account which, as the auditor found, ma es up 7-N of the company0s total operating e6penses. Third, Talam was dismissed due to a cause authori1ed by law D retrenchment to prevent losses. 't the time of Talam0s dismissal, TS(I0s financial condition, as found by the e6ternal auditor, showed that it was not %ust e6pecting losses, it already suffered a net income loss of $/,7E7,7-C.FF and retained earnings deficit of $E,7/7,/AF.FF for the period ending December =-, /FF/. (ourth, TS(I resorted to other measures to abate its losses. It claimed that during the crises period, it used as an office a small2room ,a mere cubicle. with only a two2person support staff in the persons of :rapilon and 3ermle; it reduced the salaries of its employees by as much as =FN. This submission by the company is substantiated by the schedule of 4perating >6penses for the year ended December =-, /FF/ and September =F, /FF/. ' *uic glance at the schedule readily shows a reduction of TS(I0s operating e6penses across the board. The schedule indicates a substantial decrease in operating e6penses, from $A,E==,E=A.FF in September /FF/ to $-,@?C,AA/.=@ as of the end of December /FF/. Fran%is Ray +alam vs. National Labor Relations Commission, 4t$ <ivision, Cebu City, et al., G.R. No. 1()!4!, April 6, !1!. Dismissal; serious misconduct. The findings of the C' and !ational "abor #elations Commission ,!"#C. establish the following+ ,-. 'gad0s re*uest for withdrawal of the -?F cylinders of "$: as stated in a Memorandum dated -/ (ebruary -??/ cannot be given credence since the Memorandum pertains to the replacement of the scrap materials due to &oy &ato consisting of =,FFF ilograms of blac iron plates and not to the sub%ect "$: cylinders; ,/. 'gad did not observe Calte60s rules and regulations when he transferred the said cylinders to Millanes0 compound without the #M#D form as re*uired under Calte60s (ield 'ccounting Manual; ,=. 'gad gave specific instructions to Millanes to sell the cylinders without bidding to third parties in violation of company rules; ,7. 'gad failed to submit the periodic inventory report of the "$: cylinders to the accounting department; ,A. 'gad did not remit the proceeds of the sale of the "$: cylinders; and ,@. even if considered as scrap materials, the "$: cylinders still had monetary value which 'gad cannot appropriate for himself without Calte60s consent. Considering these findings, it is clear that 'gad committed a serious infraction amounting to theft of company property. This act is a in to serious misconduct or willful disobedience by the employee of the lawful orders of his employer in connection with his wor , a %ust cause for termination of employment recogni1ed under 'rticle /C/,a. of the "abor Code. Misconduct has been defined as a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in %udgment. To be serious, the misconduct

must be of such grave and aggravated character. Calte" 4&$ilippines5, 'n%., et. al. vs. 1ermie G. Abad, et. al., G.R. No. 163))4, April 3, !1!. Due $rocess; termination. The records belie 'mular0s claim of denial of procedural due process. 3e chose not to present his side at the administrative hearing. In fact, he avoided the investigation into the charges against him by filing his illegal dismissal complaint ahead of the scheduled investigation. These facts show that the employee was given the opportunity to be heard and he cannot now come to the Court protesting that he was denied this opportunity. To belabor a point the Court has repeatedly made in employee dismissal cases, the essence of due process is simply an opportunity to be heard; it is the denial of this opportunity that constitutes violation of due process of law. +e%$nol Eig$t &$ilippines Corporation vs. National Labor Relations Commission, et al., G.R. No. 1.(6!). April 13, !1!. >mployer employee relationship. The elements to determine the e6istence of an employment relationship are+ ,-. selection and engagement of the employee; ,/. the payment of wages; ,=. the power of dismissal; and ,7. the employer0s power to control the employee0s conduct. In filing a complaint for illegal dismissal, it is incumbent upon 'bueva to prove the relationship by substantial evidence. In this regard, 'bueva claims that he has wor ed with respondent hacienda for more than a year already and that he was allowed to stay inside the hacienda. 's such, he is a regular employee entitled to monetary claims. 3owever, petitioners have not presented competent proof that respondents engaged the services of 'bueva; that respondents paid his wages or that respondents could dictate what his conduct should be while at wor . In other words, 'bueva0s allegations did not establish that his relationship with respondents had the attributes of an employer2 employee relationship based on the four2fold test. 'bueva was not able to discharge the burden of proving the e6istence of an employer2employee relationship. Moreover, 'bueva was not able to refute respondents0 assertion that he hires other men to perform weeding %ob in the hacienda and that he is not e6clusively wor ing for respondents. Romeo #asay, et al. vs. 1a%ienda Consolation, et al., G.R. No. 1())3 , April 1*, !1!. Illegal dismissal. Contrary to the C'0s perception, the Court finds a wor 2connection in 'mular0s and Ducay0s assault on Mendo1a. 's the C' itself noted, the underlying reason why 'mular and Ducay confronted Mendo1a was to *uestion him about his report to De "eon D Technol0s $CD assistant supervisor D regarding the duo0s *uestionable wor behavior. The motivation behind the confrontation was rooted on wor place dynamics as Mendo1a, 'mular and Ducay interacted with one another in the performance of their duties. )nder these circumstances, 'mular undoubtedly committed misconduct or e6hibited improper behavior that constituted a valid cause for his dismissal under the law and %urisprudential standards. The circumstances of his misdeed rendered him unfit to continue wor ing for Technol. Thus, 'mular was not illegally dismissed; he was dismissed for cause. +e%$nol Eig$t &$ilippines Corporation vs. National Labor Relations Commission, et al., G.R. No. 1.(6!). April 13, !1!. Illegal Dismissal. If the school were to apply the probationary standards ,as in fact it says it did in the present case., these standards must not only be reasonable but must have also been communicated to the teachers at the start of the probationary period, or at the very least, at the start of the period of application of the said standards. These terms, in addition to those e6pressly provided by the "abor Code, would serve as the %ust cause for the termination of the probationary contract. 's e6plained above, the details of this finding of %ust cause must be communicated to the affected teachers as a matter of due process. 'M'CC, by its submissions, admits that it did not renew the petitioners0 contracts because they failed to pass the $erformance 'ppraisal System for Teachers ,$'ST. and other re*uirements for regulari1ation that the school implements to maintain its

high academic standards. The evidence is unclear on the e6act terms of the standards, although the school also admits that these were standards under the :uidelines on the Implementation of 'M'CC (aculty $lantilla put in place at the start of school year /FFF2/FF-. 8hile the Court can grant that the standards were duly communicated to the petitioners and could be applied beginning the - st trimester of the school year /FFF2 /FF-, glaring and very basic gaps in the school0s evidence still e6ist. The e6act terms of the standards were never introduced as evidence; neither does the evidence show how these standards were applied to the petitioners. 8ithout these pieces of evidence ,effectively, the finding of %ust cause for the non2renewal of the petitioners0 contracts., the Court has nothing to consider and pass upon as valid or invalid for each of the petitioners. Inevitably, the non2renewal ,or effectively, the termination of employment of employees on probationary status. lac s the supporting finding of %ust cause that the law re*uires and, hence, is illegal. ;olanda 2. 2er%ado, et al. vs. Ama Computer College, &araDa=ue City, G.R. No. 1.3)( , April 13, !1!. Illegal dismissal. The Court is not unmindful of the rule in labor cases that the employer has the burden of proving that the termination was for a valid or authori1ed cause; however, it is li ewise incumbent upon the employees that they should first establish by competent evidence the fact of their dismissal from employment. The one who alleges a fact has the burden of proving it and the proof should be clear, positive and convincing. In this case, aside from mere allegations, no evidence was proffered by the petitioners that they were dismissed from employment. The records are bereft of any indication that petitioners were prevented from returning to wor or otherwise deprived of any wor assignment by respondents. In Abad v. Roselle Cinema I:.#. !o. -7-=E-, March /7, /FF@, 7CA SC#' /@/, /E/J, the Court ruled that the substantial evidence proffered by the employer that it had not terminated the employee should not be ignored on the prete6t that the employee would not have filed the complaint for illegal dismissal if he had not really been dismissed. The Court held that such non se=uitur reasoning cannot ta e the place of the evidence of both the employer and the employee. Romeo #asay, et al. vs. 1a%ienda Consolation, et al., G.R. No. 1())3 , April 1*, !1!. Illegal Dismissal. The Court views with approval the observation of the C' and the !"#C that the employer cannot %ustify the defense of abandonment as it failed to prove that indeed the employee had abandoned her wor . It did not even bother to send a letter to her last nown address re*uiring her to report for wor and e6plain her alleged continued absences. The ratiocination of the !"#C on this score merits the Court0s imprimatur, vi1+ The law clearly spells out the manner by which an un%ustified refusal to return to wor by an employee may be established. Thus, respondent should have given complainant a notice with warning concerning her alleged absences ,Section /, #ule OIG, &oo G, Implementing #ules and #egulations of the "abor Code.. The notice re*uirement actually consists of two parts to be separately served on the employee to wit+ ,-. notice to apprise the employee of his absences with a warning concerning a possible severance of employment in the event of an un%ustified e6cuse therefor, and ,/. subse*uent notice of the decision to dismiss in the event of an employee0s refusal to pay heed to such warning. 4nly after complying with those re*uirements can it be reasonably concluded that the employee actually abandoned his %ob. In the present case, more than two ,/. months had already lapsed since the employee allegedly started to absent herself when she instituted her action for illegal dismissal. During the said period of time, no action was ta en by the company regarding the employee0s alleged absences, something which is *uite peculiar had her employment not been severed at all. 'ccordingly, the Court found no merit in the company0s defense of abandonment in view of an utter lac of evidence to support the same. 3ence, the employee0s charge of illegal dismissal

stands uncontroverted. <iversiEied 7e%urity, 'n%. vs. Ali%ia -. #autista. G.R. No. 1) 34, April 1), !1!. $reventive Suspension; $rocess. 8hat the #ules re*uire is that the employer act on the suspended wor er0s status of employment within the =F2day period by concluding the investigation either by absolving him of the charges, or meting the corresponding penalty if liable, or ultimately dismissing him. If the suspension e6ceeds the =F2day period without any corresponding action on the part of the employer, the employer must reinstate the employee or e6tend the period of suspension, provided the employee0s wages and benefits are paid in the interim. In the present case, petitioner company had until May /F, /FF/ to act on Taroy0s case. It did by terminating him through a notice dated May -F, /FF/, hence, the =F2day re*uirement was not violated even if the termination notice was received only on Bune 7, /FF/, absent any showing that the delayed service of the notice on Taroy was attributable to :enesis Transport. Genesis +ransport 7ervi%e, 'n%. et al. vs. /nyon ng 2alayang 2anggaga?a ng Genesis 4/22G+5, et al., G.R. No. 1. 114, April ), !1!. #einstatement. :iven the period that has lapsed and the inevitable change of circumstances that must have ta en place in the interim in the academic world and at 'M'CC, which changes inevitably affect current school operations, the Court holds that D in lieu of reinstatement D the petitioners should be paid separation pay computed on a trimestral basis from the time of separation from service up to the end of the complete trimester preceding the finality of this Decision. The separation pay shall be in addition to the other awards, properly recomputed, that the "' originally decreed. ;olanda 2. 2er%ado, et al. vs. Ama Computer College, &araDa=ue City, G.R. No. 1.3)( , April 13, !1!. #elease, 8aiver and Luitclaim. Talam was not an unlettered employee; he was an information technology consultant and must have been fully aware of the conse*uences of what he was entering into. The *uitclaim was a voluntary act as there is no showing that he was coerced into e6ecuting the instrument; he received a valuable consideration for his less than two years of service with the company. Thus, from all indications, the release and *uitclaim was a valid and binding underta ing that should have been recogni1ed by the labor authorities and the C'. 8hile the law frowns upon releases and *uitclaims e6ecuted by employees who are inveigled or pressured into signing them by unscrupulous employers see ing to evade their legal responsibilities, a legitimate waiver representing a voluntary settlement of a laborer0s claims should be respected by the courts as the law between the parties. In the Court0s view, Talam0s release and *uitclaim fall into the category of legitimate waivers as defined by the Court. 8ith Talam0s voluntary e6ecution of the release and *uitclaim, the Court found the filing of the illegal dismissal case tainted with bad faith. !either can TS(I be made to answer for failure to afford Talam procedural due process. The release and *uitclaim, in the Court0s mind, erased whatever infirmities there might have been in the notice of termination as Talam had already voluntarily accepted his dismissal through the release and *uitclaim. 's such, the written notice became academic; the notice, after all, is merely a protective measure put in place by law and serves no useful purpose after protection has been assured. The Court thus finds no basis for the conclusion that TS(I violated procedural due process and should pay nominal damages. Fran%is Ray +alam vs. National Labor Relations Commission, 4t$ <ivision, Cebu City, et al., G.R. No. 1()!4!, April 6, !1!. #esignation of >mployee. 8hile the letter states that $ePaflor0s resignation was irrevocable, it does not necessarily signify that it was also voluntarily e6ecuted. $recisely because of the attendant hostile and discriminatory wor ing environment, $ePaflor decided to permanently sever his ties with 4utdoor Clothing. This falls s*uarely within the concept of constructive dismissal that %urisprudence

defines, among others, as involuntarily resignation due to the harsh, hostile, and unfavorable conditions set by the employer. It arises when a clear discrimination, insensibility, or disdain by an employer e6ists and has become unbearable to the employee. The gauge for constructive dismissal is whether a reasonable person in the employee0s position would feel compelled to give up his employment under the prevailing circumstances. 8ith the appointment of &uenaobra to the position he then still occupied, $ePaflor felt that he was being eased out and this perception made him decide to leave the company. The fact of filing a resignation letter alone does not shift the burden of proving that the employee0s dismissal was for a %ust and valid cause from the employer to the employee. In 2ora v. Aves%o I:.#. !o. -EE7-7, !ovember -7, /FFC, AE- SC#' //@J, the Court ruled that should the employer interpose the defense of resignation, it is still incumbent upon the employer to prove that the employee voluntarily resigned. 2anolo A. &eDaElor vs. 3utdoor Clot$ing 2anuEa%turing Corp., et al., G.R. No. 1((114, April 13, !1!. Labor Proced re Certiorari; *uestions of law. TS(I as s the Court to dismiss the present petition on the ground that it is procedurally defective as, allegedly, it raises only *uestions of fact, in contravention of the re*uirement under #ule 7A of the #ules of Court that an appeal by %ertiorari shall raise only *uestions of law. 8hile the petition indeed poses factual issues D i.e., whether the company was suffering from substantial losses to %ustify a retrenchment measure, whether it observed fair and reasonable standards in implementing a retrenchment, and whether Talam deserved to be retrenched D the Court deems it proper to e6amine the facts itself in view of the conflicting factual findings among the "abor 'rbiter, the !"#C and the C'. Fran%is Ray +alam vs. National Labor Relations Commission, 4t$ <ivision, Cebu City, et al., G.R. No. 1()!4!, April 6, !1!. (inding of facts. (indings of facts of *uasi2%udicial bodies li e the !"#C, and affirmed by the C' in due course, are conclusive on the Supreme Court, which is not a trier of facts. (indings of fact of administrative agencies and *uasi2%udicial bodies, which have ac*uired e6pertise because their %urisdiction is confined to specific matters, are generally accorded not only respect, but finality when affirmed by the C'. Such findings deserve full respect and, without %ustifiable reason, ought not to be altered, modified or reversed. <iversiEied 7e%urity, 'n%. vs. Ali%ia -. #autista. G.R. No. 1) 34, April 1), !1! #es Budicata. 4n the issue of refund of ;underpayment,< petitioners aver that cases of similar import involving also the respondent union have been decided with finality in their favor by the !"#C, viC+ /22G+ v. Genesis +ransport 7ervi%e, 'n%. ,!"#C #'& III Case !o. F72A-C2F=. and Reyes v. Genesis +ransport 7ervi%e, 'n% . ,!"#C C' !o. F7C@/2F7.; and 7antos v. Genesis +ransport 7ervi%e, 'n% . ,!"#C C' !o. F7-C@?2F7.. $etitioners thus pray that the Court accord respect to the rulings of the !"#C in the above2cited cases and apply the principle of res 0udi%ata visBLBvis the present case. The Supreme Court held, however that, absent proof that the !"#C cases cited by petitioners have attained finality, the Court may not consider them to constitute res 0udi%ata on petitioners0 claim for refund of the ;underpayment< due. Genesis +ransport 7ervi%e, 'n%. et al. vs. /nyon ng 2alayang 2anggaga?a ng Genesis 4/22G+5, et al., G.R. No. 1. 114, April ), !1! #ARC& 2010 Labor !aw

Cancellation of union registration. 'rt. /=7,c. of the "abor Code re*uires the mandatory minimum /FN membership of ran 2and2file employees in the employees0 union. Twenty percent ,/FN. of --/ ran 2and2file employees in >agle #idge would re*uire a union membership of at least // employees ,--/ 6 /FA Q //.7.. 8hen the >#>) filed its application for registration on December -?, /FFA, there were clearly =F union members. Thus, when the certificate of registration was granted, there is no dispute that the )nion complied with the mandatory /FN membership re*uirement. 'ccordingly, the retraction of si6 union members who later severed and withdrew their union membership cannot cause the cancellation of the union0s registration. &esides, it cannot be argued that the affidavits of retraction retroacted to the time of the application for union registration or even way bac to the organi1ational meeting. &efore their withdrawal, the si6 employees in *uestion were bona fide union members. They never disputed affi6ing their signatures beside their handwritten names during the organi1ational meetings. 8hile they alleged that they did not now what they were signing, their affidavits of retraction were not re2 affirmed during the hearings of the instant case rendering them of little, if any, evidentiary value. In any case, even with the withdrawal of si6 union members, the union would still be compliant with the mandatory membership re*uirement under 'rt. /=7,c. since the remaining /7 union members constitute more than the /FN membership re*uirement of // employees. Eagle Ridge Gold H Country Club vs. Court oE Appeals, et al., G.R. No. 1(.*.*, 2ar%$ 1., !1!. Cessation of operations; financial assistance. &ased on 'rticle /C=, in case of cessation of operations, the employer is only re*uired to pay his employees a separation pay of one month pay or at least one2half month pay for every year of service, whichever is higher. That is all that the law re*uires. In the case at bar, petitioner paid respondents the following+ ,a. separation pay computed at -AFN of their gross monthly pay per year of service; and ,b. cash e*uivalent of earned and accrued vacation and sic leaves. Clearly, petitioner had gone over and above the re*uirements of the law. Despite this, however, the "abor 'rbiter ordered petitioner to pay respondents an additional amount, e*uivalent to one month0s salary, as a form of financial assistance. The award of financial assistance is bereft of legal basis and serves to penali1e petitioner who had complied with the re*uirements of the law. The Court also point out that petitioner may, as it has done, grant on a voluntary and e" gratia basis, any amount more than what is re*uired by the law, but to insist that more financial assistance be given is certainly something that the Court cannot countenance. Moreover, any award of additional financial assistance to respondents would put them at an advantage and in a better position than the rest of their co2employees who similarly lost their employment because of petitioner0s decision to cease its operations. 7olid#an> Corporation vs. National Labor Relations Commission, et al., G.R. No. 16)*)1, 2ar%$ 3!, !1!. Cost of living allowance. C4"' is not in the nature of an allowance intended to reimburse e6penses incurred by officials and employees of the government in the performance of their official functions. It is not payment in consideration of the fulfillment of official duty. 's defined, cost of living refers to ;the level of prices relating to a range of everyday items< or ;the cost of purchasing those goods and services which are included in an accepted standard level of consumption.< &ased on this premise, C4"' is a benefit intended to cover increases in the cost of living. Thus, it is and should be integrated into the standardi1ed salary rates. In the present case, the Court is not persuaded that the continued grant of C4"' to the uniformed personnel to the e6clusion of other national government officials run afoul the e*ual protection clause of the Constitution. The fundamental right of e*ual protection of the laws is not absolute, but is sub%ect to reasonable classification. If the groupings are characteri1ed by substantial distinctions that

ma e real differences, one class may be treated and regulated differently from another. The classification must also be germane to the purpose of the law and must apply to all those belonging to the same class. The Court found valid reasons to treat the uniformed personnel differently from other national government officials. &eing in charge of the actual defense of the State and the maintenance of internal peace and order, they are e6pected to be stationed virtually anywhere in the country. They are li ely to be assigned to a variety of low, moderate, and high2cost areas. Since their basic pay does not vary based on location, the continued grant of C4"' is intended to help them offset the effects of living in higher cost areas. -i%toria C. GutierreC, et al. vs. <epartment oE #udget and 2anagement, et al.8Estrellita C. Amponin, et al. vs. Commission on Audit, et al.8Augusto R. Nieves, et al. vs. <epartment oE #udget and 2anagement, et al.8Aapisanan ng mga 2anggaga?a sa #ureau oE Agri%ultural 7tatisti% 4A2#5, et al. vs. <epartment oE #udget and 2anagement, et al.8National 1ousing Aut$ority vs. EpiEanio &. Re%ana, et al.8 'nsuran%e Commission 3EEi%ers and Employees, et al. vs. <epartment oE #udget and 2anagement, et al.8Fiber 'ndustry <evelopment Aut$ority Employees Asso%iation 4F'<AEA5,et al. vs. <epartment oE #udget and 2anagement, et al.8#ureau oE Animal 'ndustry Employees Asso%iation 4#A'EA5, et al. vs. <epartment oE #udget and 2anagement, et al.8ReM Re=uest oE 7andiganbayan Eor aut$ority to use t$eir savings to pay t$eir Cola <iEEerential Erom ,uly 1, 1*.* to 2ar%$ 16, 1***, G.R. No. 1)3 668G.R. No. 1)*!!(8G.R. No. 1)*! *8G.R. No. 1(!!.48G.R. No. 1( (138G.R. No. 1(311*8G.R. No. 1(64((8G.R. No. 1((**!8A.2. No. !6B4B! B7#. 2ar%$ 1., !1!. Compensable illness. Burisprudence provides that to establish compensability of a non2occupational disease, reasonable proof of wor 2connection and not direct causal relation is re*uired. $robability, not the ultimate degree of certainty, is the test of proof in compensation proceedings. In this case, the Court sustained the "abor 'rbiter and the !"#C in granting total and permanent disability benefits in favor of Gillamater, as it was sufficiently shown that his having contracted colon cancer was, at the very least, aggravated by his wor ing conditions, ta ing into consideration his dietary provisions on board, his age, and his %ob as Chief >ngineer, who was primarily in charge of the technical and mechanical operations of the vessels to ensure voyage safety. Leonis Navigation Co., 'n%. and 6orld 2arine &anama, 7.A. vs. Catalino /. -illamater, et al., G.R. No. 1(*16*, 2ar%$ 3, !1!. Compensable illness; entitlement. (or disability to be compensable under Section /F ,&. of the /FFF $4>'2S>C, two elements must concur+ ,-. the in%ury or illness must be wor 2related; and ,/. the wor 2related in%ury or illness must have e6isted during the term of the seafarer0s employment contract. In other words, to be entitled to compensation and benefits under this provision, it is not sufficient to establish that the seafarer0s illness or in%ury has rendered him permanently or partially disabled; it must also be shown that there is a causal connection between the seafarer0s illness or in%ury and the wor for which he had been contracted. The /FFF $4>'2S>C defines ;wor 2related in%ury< as ;in%ury,ies. resulting in disability or death arising out of and in the course of employment< and ;wor 2 related illness< as ;any sic ness resulting to disability or death as a result of an occupational disease listed under Section =/2' of this contract with the conditions set therein satisfied.< )nder Section /F ,&., paragraphs ,/. and ,=. of the /FFF $4>'2S>C, it is the company2designated physician who is entrusted with the tas of assessing the seaman0s disability. 8hile it is true that medical reports issued by the company2designated physicians do not bind the courts, the Court0s e6amination of Dr. 4ng2Salvador0s Initial Medical #eport have led it to agree with her findings. Dr. 4ng2Salvador was able to

sufficiently e6plain her basis in concluding that the respondent0s illness was not wor 2related+ she found the respondent not to have been e6posed to any carcinogenic fumes, or to any viral infection in his wor place. 3er findings were arrived at after the respondent was made to undergo a physical, neurological and laboratory e6amination, ta ing into consideration his past medical history, family history, and social history. In addition, the respondent was evaluated by a specialist, a surgeon and an oncologist. The series of tests and evaluations show that Dr. 4ng2Salvador0s findings were not arrived at arbitrarily; neither were they biased in the company0s favor. The respondent, on the other hand, did not adduce proof to show a reasonable connection between his wor as an assistant house eeping manager and his lymphoma. There was no showing how the demands and nature of his %ob vis2R2vis the ship0s wor ing conditions increased the ris of contracting lymphoma. The non2 wor relatedness of the respondent0s illness is reinforced by the fact that under the Implementing #ules and #egulations of the "abor Code ,>CC #ules., lymphoma is considered occupational only when contracted by operating room personnel due to e6posure to anesthetics. The records do not show that the respondent0s wor as an assistant house eeping manager e6posed him to anesthetics. 'ccordingly, the Court held that the respondent is not entitled to total and permanent disability benefits on account of his failure to refute the company2 designated physician0s findings that+ ,-. his illness was not wor 2related; and ,/. he was fit to resume sea duties. 2agsaysay 2aritime Corporation and8or Cruise 7$ips Catering 7ervi%es 'nternational N.-. vs. National Labor Relations Commissions, et al., G.R. No. 1.61.!, 2ar%$ , !1!. Constructive dismissal. In constructive dismissal cases, the employer has the burden of proving that its conduct and action or the transfer of an employee are for valid and legitimate grounds such as genuine business necessity. $articularly, for a transfer not to be considered a constructive dismissal, the employer must be able to show that such transfer is not unreasonable, inconvenient, or pre%udicial to the employee. (ailure of the employer to overcome this burden of proof taints the employee0s transfer as a constructive dismissal. In the present case, the employer failed to discharge this burden. The combination of harsh actions ta en by the ban rendered the employment condition of the employee hostile and unbearable for the following reasons+ (irst, there is no showing of any urgency or genuine business necessity to transfer the employee to the Ma ati 3ead 4ffice. The ban 0s stated reason that the employee had to undergo branch head training because of his gross inefficiency was not supported by any proof that the employee had a record of gross inefficiency. Second, the employee0s transfer from Dumaguete to Ma ati City is clearly unreasonable, inconvenient and oppressive, since the respondent and his family are residents of Dumaguete City. Third, the employer failed to present any valid reason why it had to re*uire the employee to go to the Ma ati 3ead 4ffice to undergo branch head training when it could have %ust easily re*uired the latter to underta e the same training in the GISMI! area. (inally, there was nothing in the order of transfer indicating the position which the employee would occupy after his training; thus, the employee was effectively placed in a ;floating< status. The ban 0s contention that the employee was assigned to a sensitive position in the D)34 Tas (orce is suspect when considered with the fact that he was made to undergo branch head training which is totally different from a position that entails reconciling boo entries of all branches of the former. #econciling boo entries is essentially an accounting tas . The test of constructive dismissal is whether a reasonable person in the employee0s position would have felt compelled to give up his position under the circumstances. &ased on the factual considerations in the present case, the Court held that the hostile and unreasonable wor ing conditions of the ban %ustified the finding of the !"#C and the C' that the employee was constructively dismissed. &$ilippine

-eterans #an> vs. National Labor Relations Commission, et al., G.R. No. 1.... , 2ar%$ 3!, !1!. Disability benefits; entitlement. The seafarer, upon sign2off from his vessel, must report to the company2designated physician within three wor ing days from arrival for diagnosis and treatment. 'pplying Section /F,&., paragraph ,=. of the /FFF 'mended Standard Terms and Conditions :overning the >mployment of (ilipino Seafarers on &oard 4cean2:oing Gessels, petitioner is re*uired to undergo post2 employment medical e6amination by a company2designated physician within three wor ing days from arrival, e6cept when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period would suffice. In 2aunlad +ransport, 'n%. v. 2anigo, ,r ., I:.#. !o.-@-7-@, -= Bune /FFC, AA7 SC#' 77@, 7A?J this Court e6plicitly declared that it is mandatory for a claimant to be e6amined by a company2designated physician within three days from his repatriation. The une6plained omission of this re*uirement will bar the filing of a claim for disability benefits. Ale" C. Cootau%o vs. 227 &$il. 2aritime 7ervi%es, 'n%. 2s. 2ary C. 2a=uilan, and8or 227 Co. Ltd., G.R. No. 1.4( , 2ar%$ 1), !1!. Dismissal; damages. Moral and e6emplary damages are recoverable where the dismissal of an employee was attended by bad faith or fraud or constituted an act oppressive to labor or was done in a manner contrary to morals, good customs or public policy. 8ith regard to the employees of $romm2:em, there being no evidence of bad faith, fraud or any oppressive act on the part of the latter, the Court found no support for the award of damages. 's for $S:, the records show that it dismissed its employees through S'$S in a manner oppressive to labor. The sudden and peremptory barring of the employees from wor , and from admission to the wor place, after %ust a one2day verbal notice, and for no valid cause, bellows oppression and utter disregard of the right to due process of the concerned petitioners. 3ence, an award of moral damages is called for. ,oeb Aliviado, et al. vs. &ro%ter H Gamble &$ilippines, 'n%., et al., G.R. No. 16!)!6, 2ar%$ *, !1!. Dismissal; fraud and serious misconduct . In this case, the Court found that $astoril was as actively involved as >scoto and 4mela in the sale of the Toyota Town 'ce that resulted in a loss to the company. 'll three participated in ma ing the company believe that '*uino bought the Toyota Town 'ce for $-?F,FFF.FF when in fact, '*uino paid $/FF,FFF.FF for the vehicle. Thus, $astoril acted in concert with >scoto and 4mela in the transaction that defrauded their employer in the amount of $-F,FFF.FF. $astoril prepared and issued the deed of sale indicating that the vehicle was sold for $-?F,FFF.FF, although she new that the buyer was being charged $/FF,FFF.FF for the vehicle. >scoto, 4mela and $astoril helped themselves to the price difference and tried to silence #odrigue1 ,who got wind of the anomaly. by giving him $-,FFF.FF and passing the $-F,FFF.FF price difference off as the approved discount '*uino as ed for. The Court held that there was a conspiracy between and among the three employees, where every participant had made significant contributory acts. 6$ite <iamond +rading Corporation and8or ,erry /y vs. National Labor Relations Commission, et al., G.R. No. 1.6!1*. 2ar%$ *, !1!. Dismissal; %ust cause; loss of trust and confidence. "oss of trust and confidence, as a cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility or of trust and confidence. 's such, he must be invested with confidence on delicate matters, such as custody, handling or care and protection of the property and assets of the employer. 'nd, in order to constitute a %ust cause for dismissal, the act complained of must be wor 2related and must show that the employee is unfit to continue to wor for the employer. In the instant case, the petitioners2employees of $romm2:em have not been shown to be occupying positions of responsibility or of trust and confidence. !either is there any evidence to show that they are unfit to continue to wor as merchandisers for $romm2:em. ,oeb Aliviado, et al. vs. &ro%ter H Gamble &$ilippines, 'n%., et al., G.R. No. 16!)!6, 2ar%$ *, !1!.

Dismissal; %ust cause; misconduct. Misconduct has been defined as improper or wrong conduct; the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, unlawful in character implying wrongful intent and not mere error of %udgment. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. To be a %ust cause for dismissal, such misconduct ,a. must be serious; ,b. must relate to the performance of the employee0s duties; and ,c. must show that the employee has become unfit to continue wor ing for the employer. In other words, in order to constitute serious misconduct which will warrant the dismissal of an employee under paragraph ,a. of 'rticle /C/ of the "abor Code, it is not sufficient that the act or conduct complained of has violated some established rules or policies. It is e*ually important and re*uired that the act or conduct must have been performed with wrongful intent. In the instant case, petitioners2employees of $romm2:em may have committed an error of %udgment in claiming to be employees of $S:, but it cannot be said that they were motivated by any wrongful intent in doing so. 's such, the Court found them guilty of simple misconduct only, for assailing the integrity of $romm2:em as a legitimate and independent promotion firm. ' misconduct which is not serious or grave, as that e6isting in the instant case, cannot be a valid basis for dismissing an employee. ,oeb Aliviado, et al. vs. &ro%ter H Gamble &$ilippines, 'n%., et al., G.R. No. 16!)!6, 2ar%$ *, !1!. Dismissal; %ust cause; union security clause. In terminating the employment of an employee by enforcing the union security clause, the employer is re*uired only to determine and prove that+ ,-. the union security clause is applicable; ,/. the union is re*uesting for the enforcement of the union security provision in the C&'; and ,=. there is sufficient evidence to support the decision of the union to e6pel the employee from the union. These re*uisites constitute %ust cause for terminating an employee based on the union security provision of the C&'. It is the third re*uisite that appears to be lac ing in this case. It is apparent from the identical termination letters that :MC terminated Casio, et al., by relying upon the resolutions of the union, which made no mention at all of the evidence supporting the decision of the union to e6pel Casio, et al. from the union. :MC never alleged nor attempted to prove that the company actually loo ed into the evidence of the union for e6pelling Casio, et al. and made a determination on the sufficiency thereof. 8ithout such a determination, :MC cannot claim that it had terminated the employment of Casio, et al. for %ust cause. The failure of :MC to ma e a determination of the sufficiency of evidence supporting the decision of the union constitutes non2observance by :MC of procedural due process in the dismissal of employees. General 2illing Corporation vs. Ernesto Casio, et al. and -irgilio &ino, et al., G.R. No. 14*)) , 2ar%$ 1!, !1!. Dismissal pursuant to union security clause; separate notice and haring re*uired. :MC illegally dismissed Casio, et al. because not only did :MC fail to ma e a determination of the sufficiency of evidence to support the union0s decision to e6pel Casio, et al., it also failed to accord the e6pelled union members procedural due process, i.e., notice and hearing, prior to the termination of their employment. :MC, by its own admission, did not conduct a separate and independent investigation to determine the sufficiency of the evidence supporting the union0s e6pulsion of Casio, et al. It simply acceded to the union0s demand. Conse*uently, :MC cannot insist that it has no liability for the payment of bac wages and damages to Casio, et al., and that the liability for such payment should fall only upon the union officers and board members who e6pelled Casio, et al. :MC completely missed the point that the e6pulsion of Casio, et al. by the union and the termination of employment of the same employees by :MC, although related, are two separate and distinct acts. Despite a closed shop provision in the C&', law and %urisprudence impose upon :MC the obligation to accord Casio, et al. substantive and procedural due process before complying with the union0s demand to dismiss the e6pelled union members from service. The failure of :MC to carry out this obligation ma es it liable for illegal dismissal of Casio, et al. General 2illing

Corporation vs. Ernesto Casio, et al. and -irgilio &ino, et al., G.R. No. 14*)) , 2ar%$ 1!, !1!. >mployee benefit; bonus. &y definition, a ;bonus< is a gratuity or act of liberality of the giver. It is something given in addition to what is ordinarily received by or strictly due the recipient. ' bonus is granted and paid to an employee for his industry and loyalty which contributed to the success of the employer0s business and made possible the reali1ation of profits. ' bonus is also granted by an enlightened employer to spur the employee to greater efforts for the success of the business and reali1ation of bigger profits. :enerally, a bonus is not a demandable and enforceable obligation. (or a bonus to be enforceable, it must have been promised by the employer and e6pressly agreed upon by the parties. :iven that the bonus in this case is integrated in the C&', the same parta es the nature of a demandable obligation. Gerily, by virtue of its incorporation in the C&', the Christmas bonus due to respondent 'ssociation has become more than %ust an act of generosity on the part of the petitioner but a contractual obligation it has underta en. 'll given, business losses are a feeble ground for petitioner to repudiate its obligation under the C&'. The rule is settled that any benefit and supplement being en%oyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer. The principle of non2diminution of benefits is founded on the constitutional mandate to protect the rights of wor ers and to promote their welfare and to afford labor full protection. 3ence, absent any proof that the employer0s consent was vitiated by fraud, mista e or duress, it is presumed that it entered into the C&' voluntarily and had full nowledge of the contents thereof and was aware of its commitments under the contract. Lepanto Cerami%s, 'n%. vs. Lepanto Cerami%s Employees Asso%iation, G.R. No. 1.!.66, 2ar%$ , !1!. >mployee; monetary award. The law and the rules are consistent in stating that the employment permit must be ac*uired prior to employment. The "abor Code states+ ;'ny alien see ing admission to the $hilippines for employment purposes and any domestic or foreign employer who desires to engage an alien for employment in the $hilippines shall obtain an employment permit from the Department of "abor.< Section 7, #ule OIG, &oo - of the Implementing #ules and #egulations provides+ ;!o alien see ing employment, whether as a resident or non2resident, may enter the $hilippines without first securing an employment permit from the Ministry. If an alien enters the country under a non2wor ing visa and wishes to be employed thereafter, he may only be allowed to be employed upon presentation of a duly approved employment permit.< :alera wor ed in the $hilippines without a proper wor permit but now wants to claim employee0s benefits under $hilippine labor laws. She cannot come to this Court with unclean hands. To grant :alera0s prayer is to sanction the violation of the $hilippine labor laws re*uiring aliens to secure wor permits before their employment. 6&& 2ar>eting Communi%ations, 'n%. et al. vs. ,o%elyn 2. Galera8,o%elyn 2. Galera -s. 6&& 2ar>eting Communi%ations, 'n%. et al., G.R. No. 16* !(8G.R. No. 16* 3*, 2ar%$ ), !1!. >mployee vs. corporate officer. Corporate officers are given such character either by the Corporation Code or by the corporation0s by2laws. )nder Section /A of the Corporation Code, the corporate officers are the president, secretary, treasurer and such other officers as may be provided in the by2laws. 4ther officers are sometimes created by the charter or by2laws of a corporation, or the board of directors may be empowered under the by2laws of a corporation to create additional offices as may be necessary. 'n e6amination of 8$$0s by2laws resulted in a finding that :alera0s appointment as a corporate officer ,Gice2$resident with the operational title of Managing Director of Mindshare. during a special meeting of 8$$0s &oard of Directors is an appointment

to a non2e6istent corporate office. 8$$0s by2laws provided for only one Gice2 $resident. 't the time of :alera0s appointment on =- December -???, 8$$ already had one Gice2$resident in the person of 8ebster. :alera cannot be said to be a director of 8$$ also because all five directorship positions provided in the by2laws are already occupied. (inally, 8$$ cannot rely on its 'mended &y2"aws to support its argument that :alera is a corporate officer. The 'mended &y2"aws provided for more than one Gice2$resident and for two additional directors. >ven though 8$$0s stoc holders voted for the amendment on =- May /FFF, the S>C approved the amendments only on -@ (ebruary /FF-. :alera was dismissed on -7 December /FFF. 8$$, Steedman, 8ebster, and "ansang did not present any evidence that :alera0s dismissal too effect with the action of 8$$0s &oard of Directors. 'dditionally, the following provisions in her employment contract are convincing indicators that :alera was an employee and not a corporate officer+ ,-. it mandates where and how often she is to perform her wor ; ,/. the wages she receives are completely controlled by 8$$; ,=. she is sub%ect to the regular disciplinary procedures of 8$$; ,7. section -7 thereof clearly states that she is a permanent employee H not a Gice2$resident or a member of the &oard of Directors; ,A. the intellectual property rights created or discovered by petitioner during her employment shall automatically belong to private respondent 8$$ I)nder the Intellectual $roperty Code, this condition prevails if the creator of the wor sub%ect to the laws of patent or copyright is an employee of the one entitled to the patent or copyrightJ; and ,@. the disciplinary procedure states that her right of redress is through Mindshare0s Chief >6ecutive 4fficer for the 'sia2$acific. This last circumstance implies that she was not even under the disciplinary control of 8$$0s &oard of Directors, and therefore, she could not have been a 8$$ corporate officer as only the 8$$ &oard of Directors could appoint and terminate its own corporate officer. 6&& 2ar>eting Communi%ations, 'n%. et al. vs. ,o%elyn 2. Galera8,o%elyn 2. Galera vs. 6&& 2ar>eting Communi%ations, 'n%. et al., G.R. No. 16* !(8G.R. No. 16* 3*, 2ar%$ ), !1!. Illegal dismissal. )nder #epublic 'ct !o. @E-A, employees who are illegally dismissed are entitled to full bac wages, inclusive of allowances and other benefits or their monetary e*uivalent, computed from the time their actual compensation was withheld from them up to the time of their actual reinstatement but if reinstatement is no longer possible, the bac wages shall be computed from the time of their illegal termination up to the finality of the decision. The employees in this case are entitled to bac wages and separation pay, considering that reinstatement is no longer possible because the positions they previously occupied are no longer e6isting. General 2illing Corporation vs. Ernesto Casio, et al. and -irgilio &ino, et al., G.R. No. 14*)) , 2ar%$ 1!, !1!. Illegal dismissal. 8$$0s dismissal of :alera lac ed both substantive and procedural due process. 'part from Steedman0s letter dated -A December /FFF to :alera, 8$$ failed to prove any %ust or authori1ed cause for :alera0s dismissal. The law also re*uires that the employer must furnish the wor er sought to be dismissed with two written notices before termination of employment can be legally effected+ ,-. notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and ,/. the subse*uent notice which informs the employee of the employer0s decision to dismiss him. (ailure to comply with these re*uirements taints the dismissal with illegality. 8$$0s acts clearly show that :alera0s dismissal did not comply with the two2notice rule. 6&& 2ar>eting Communi%ations, 'n%. et al. vs. ,o%elyn 2. Galera8,o%elyn 2. Galera -s. 6&& 2ar>eting Communi%ations, 'n%. et al., G.R. No. 16* !(8G.R. No. 16* 3*, 2ar%$ ), !1!. Illegal dismissal; abandonment. $etitioner was, for five times, notified in writing by respondent to resume teaching for the second semester of school year /FF=2/FF7 following the service of her suspension during the first semester. She was advised that a teaching load had already been prepared for her. #espondent never replied to those notices. $etitioner0s %ustification for her failure to respond to the notices

was that her acceptance of the offer could be construed as a waiver of her claims. The Court held that petitioner0s %ustification is not a valid e6cuse. $etitioner contends that her filing of a complaint for illegal dismissal was a manifestation of her desire to return to her %ob and negated any intention to sever the employer2employee relationship. $etitioner forgets that her complaint for ;illegal dismissal< which she filed on Bune A, /FF= sprang, not from her dismissal on December @, /FF= due to abandonment, but from her suspension during the first semester of school year /FF=2/FF7. 8hile the filing of a complaint with a prayer for reinstatement negates an intention to sever the employer2employee relationship, the same contemplates an action ta en subse*uent to dismissal and not after an employee, by all indications, abandoned her %ob. Evangeline C. Cobarrubias vs. 7aint Louis /niversity, 'n%., G.R. No. 1(6(1(, 2ar%$ 1(, !1!. Illegal dismissal; monetary awards. Clearly, the law intends the award of bac wages and similar benefits to accumulate past the date of the "abor 'rbiter0s decision until the dismissed employee is actually reinstated. &ut if, as in this case, reinstatement is no longer possible, this Court has consistently ruled that bac wages shall be computed from the time of illegal dismissal until the date the decision becomes final. Separation pay, on the other hand, is e*uivalent to one month pay for every year of service, a fraction of si6 months to be considered as one whole year. 3ere that would begin from Banuary =-, -??7 when petitioner &elen began his service. Technically the computation of his separation pay would end on the day he was dismissed on 'ugust /F, -??? when he supposedly ceased to render service and his wages ended. &ut, since &elen was entitled to collect bac wages until the %udgment for illegal dismissal in his favor became final, here on September //, /FFC, the computation of his separation pay should also end on that date. (urther, since the monetary awards remained unpaid even after it became final on September //, /FFC because of issues raised respecting the correct computation of such awards, it is but fair that respondent Bavellana be re*uired to pay -/N interest per annum on those awards from September //, /FFC until they are paid. The -/N interest is proper because the Court treats monetary claims in labor cases the e*uivalent of a forbearance of credit. It matters not that the amounts of the claims were still in *uestion on September //, /FFC. 8hat is decisive is that the order to pay the monetary awards had long become final. <aniel &. ,avellana, ,r. vs. Albino #elen8Albino #elen -s. <aniel &. ,avellana, ,r. and ,avellana Farms, 'n%., G.R. No. 1.1*138G.R. No. 1. 1)., 2ar%$ ), !1!. "abor only contracting. Indeed, it is management prerogative to farm out any of its activities, regardless of whether such activity is peripheral or core in nature. 3owever, in order for such outsourcing to be valid, it must be made to an independent contractor because the current labor rules e6pressly prohibit labor2only contracting. There is labor2only contracting when the contractor or sub2contractor merely recruits, supplies or places wor ers to perform a %ob, wor or service for a principal, and any of the following elements are present+ ,i. the contractor or subcontractor does not have substantial capital or investment which relates to the %ob, wor or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; or ,ii. the contractor does not e6ercise the right to control over the performance of the wor of the contractual employee. In the instant case, the financial statements of $romm2:em show that it has authori1ed capital stoc of $- million and a paid2in capital, or capital available for operations, of $AFF,FFF.FF as of -??F. It also has long term assets worth $7=/,C?A./C and current assets of $E-?,F7/.=/. $romm2:em has also proven that it maintained its own warehouse and office space with a floor area of CEF s*uare meters. It also had under its name three registered vehicles, which were used for

its promotional5merchandising business. $romm2:em also has other clients aside from $S:. )nder the circumstances, we find that $romm2:em has substantial investment, which relates to the wor to be performed. )nder these circumstances, $romm2:em cannot be considered a labor2only contractor. 4n the other hand, the 'rticles of Incorporation of S'$S show that it has a paid2in capital of only $=-,/AF.FF. There is no other evidence to prove how much its wor ing capital and assets are. (urthermore, there is no showing of substantial investment in tools, e*uipment or other assets. S'$S0 lac of substantial capital is highlighted by the records which show that its payroll for its merchandisers alone for one month would already total $77,A@-.FF. It had @2month contracts with $S:. Ket S'$S failed to show that it could complete the @2month contracts using its own capital and investment. Its capital is not even sufficient for one month0s payroll. S'$S failed to show that its paid2in capital of $=-,/AF.FF is sufficient for the period re*uired for it to generate revenues to sustain its operations independently. Substantial capital refers to capitali1ation used in the performance or completion of the %ob, wor or service contracted out. In the present case, S'$S has failed to show substantial capital. (urthermore, the employees in this case performed merchandising and promotion of the products of $S:, which are activities that the Court has considered directly related to the manufacturing business of $S:. Considering that S'$S has no substantial capital or investment and the wor ers it recruited are performing activities which are directly related to the principal business of $S:, we find that S'$S is engaged in ;labor2only contracting<. ,oeb Aliviado, et al. vs. &ro%ter H Gamble &$ilippines, 'n%., et al., G.R. No. 16!)!6, 2ar%$ *, !1!. $ro%ect employee. The test for distinguishing a ;pro%ect employee< from a ;regular employee< is whether or not he has been assigned to carry out a ;specific pro%ect or underta ing,< with the duration and scope of his engagement specified at the time his service is contracted. 3ere, it is not disputed that petitioner company contracted respondent Trinidad0s service by specific pro%ects with the duration of his wor clearly set out in his employment contracts. 3e remained a pro%ect employee regardless of the number of years and the various pro%ects he wor ed for the company. :enerally, length of service provides a fair yardstic for determining when an employee initially hired on a temporary basis becomes a permanent one, entitled to the security and benefits of regulari1ation. &ut this standard will not be fair, if applied to the construction industry, simply because construction firms cannot guarantee wor and funding for its payrolls beyond the life of each pro%ect. 'nd getting pro%ects is not a matter of course. Construction companies have no control over the decisions and resources of pro%ect proponents or owners. There is no construction company that does not wish it has such control but the reality, understood by construction wor ers, is that wor depended on decisions and developments over which construction companies have no say. In this case, respondent Trinidad0s series of employments with petitioner company were co2terminous with its pro%ects. 8hen its &oni Serrano2Matipunan Interchange $ro%ect was finished in December /FF7, Trinidad0s employment ended with it. 3e was not dismissed. 3is employment contract simply ended with the pro%ect for which he had signed up. 3is employment history belies the claim that he continuously wor ed for the company. Intervals or gaps separated one contract from another. 6illiam Constru%tion Corp. and8or +eresita /y and 6illiam /y vs. ,orge R. +rinidad, G.R. No. 1.3 )!, 2ar%$ 1 , !1!. #einstatement; reimbursement. 'n employee cannot be compelled to reimburse the salaries and wages he received during the pendency of his appeal, notwithstanding the reversal by the !"#C of the "'0s order of reinstatement. The pertinent law on the matter is not concerned with the wisdom or propriety of the

"'0s order of reinstatement, for if it was, then it should have provided that the pendency of an appeal should stay its e6ecution. 'fter all, a decision cannot be deemed irrefragable unless it attains finality. College oE t$e 'mma%ulate Con%ep%ion vs. National Labor Relations Commission and Atty. 2arius F. Carlos, &$.<, G.R. No. 16()63, 2ar%$ , !1!. #epresentation and Transportation 'llowance; entitlement. Statutory law, as implemented by administrative issuances and interpreted in decisions, has consistently treated #'T' as distinct from salary. )nli e salary, which is paid for services rendered, #'T' belongs to a bas et of allowances to defray e6penses deemed unavoidable in the discharge of office. 3ence, #'T' is paid only to certain officials who, by the nature of their offices, incur representation and transportation e6penses. 't any rate, the denial of #'T' must be grounded on relevant and specific provision of law. &y insisting that, as re*uisite for her receipt of #'T', respondent must discharge her office as &acnotan0s treasurer while on reassignment at the "a )nion treasurer0s office, the D&M effectively punishes respondent for acceding to her reassignment. Surely, the law could not have intended to place local government officials li e respondent in the difficult position of having to choose between disobeying a reassignment order or eeping an allowance. <epartment oE #udget and 2anagement 4<#25 vs. 3livia <. Leones, G.R. No. 16*( 6, 2ar%$ 1., !1!. Separation pay; termination for cause. Separation pay is only warranted when the cause for termination is not attributable to the employee0s fault, such as those provided in 'rticles /C= and /C7 of the "abor Code, as well as in cases of illegal dismissal in which reinstatement is no longer feasible. It is not allowed when an employee is dismissed for %ust cause, such as serious misconduct. Burisprudence has classified theft of company property as a serious misconduct and denied the award of separation pay to the erring employee. In this case, the Court saw no reason why this same rule should not be similarly applied in the case of Capor. She attempted to steal the property of her long2time employer. (or committing such misconduct, she is definitely not entitled to an award of separation pay. Capor0s argument that despite the finding of theft, she should still be granted separation pay in light of her long years of service with the Company did not persuade the Court. Indeed, length of service and a previously clean employment record cannot simply erase the gravity of the betrayal e6hibited by a malfeasant employee. "ength of service is not a bargaining chip that can simply be stac ed against the employer. 'fter all, an employer2employee relationship is symbiotic where both parties benefit from mutual loyalty and dedicated service. If an employer had treated his employee well, has accorded him fairness and ade*uate compensation as determined by law, it is only fair to e6pect a long2time employee to return such fairness with at least some respect and honesty. Thus, it may be said that betrayal by a long2time employee is more insulting and odious for a fair employer. 8hile we sympathi1e with Capor0s plight, being of retirement age and having served petitioners for =? years, we cannot award any financial assistance in her favor because it is not only against the law but also a retrogressive public policy. Reno Foods, 'n%., and8or -i%ente A$u vs. Nag>a>aisang La>as ng 2anggaga?a 4NL25 I Aatipunan on be$alE oE its member, Nenita Capor, G.R. No. 164!16, 2ar%$ 1), !1!. Termination of employment; conviction in criminal case. Conviction in a criminal case is not necessary to find %ust cause for termination of employment. Criminal cases re*uire proof beyond reasonable doubt while labor disputes re*uire only substantial evidence, which means such relevant evidence as a reasonable mind might accept as ade*uate to %ustify a conclusion. The evidence in this case was reviewed by the appellate court and two labor tribunals endowed with e6pertise on the matter D the "abor 'rbiter and the !"#C. They all found substantial evidence to

conclude that Capor had been validly dismissed for dishonesty or serious misconduct. Reno Foods, 'n%., and8or -i%ente A$u vs. Nag>a>aisang La>as ng 2anggaga?a 4NL25 I Aatipunan on be$alE oE its member, Nenita Capor, G.R. No. 164!16, 2ar%$ 1), !1!. Labor Proced re Court; findings of fact ,labor.. ' petition for review on certiorari under #ule 7A of the #ules of Court should include only *uestions of law H *uestions of fact are not reviewable. ' *uestion of law e6ists when the doubt centers on what the law is on a certain set of facts, while a *uestion of fact e6ists when the doubt centers on the truth or falsity of the alleged facts. There is a *uestion of law if the issue raised is capable of being resolved without need of reviewing the probative value of the evidence. 4nce the issue invites a review of the evidence, the *uestion is one of fact. 8hether K>) committed fraud and misrepresentation in failing to remove $ineda0s signature from the list of employees who supported K>)0s application for registration and whether K>) conducted an election of its officers are *uestions of fact. They are not reviewable. (actual findings of the Court of 'ppeals are binding on the Court. 'bsent grave abuse of discretion, the Court will not disturb the Court of 'ppeals0 factual findings. In En%arna%ion v. Court oE Appeals ,:.#. !o. -F-/?/, C Bune -??=., the Court held that, ;unless there is a clearly grave or whimsical abuse on its part, findings of fact of the appellate court will not be disturbed. The Supreme Court will only e6ercise its power of review in nown e6ceptions such as gross misappreciation of evidence or a total void of evidence.< KT$I failed to show that the Court of 'ppeals gravely abused its discretion. ;o>o$ama +ire &$ilippines, 'n%. vs. ;o>o$ama Employees /nion, G.R. No. 163)3 , 2ar%$ 1 , !1!. Court; *uestions of fact ,labor.. The petition essentially raises *uestions of fact. 8hile as a rule, factual findings of the C' are binding on the Court, the Court e6ercised its discretionary review authority to review the facts of this case in view of the conflict in the findings of facts of the labor arbiter, on the one hand, and the !"#C and the C', on the other. 6$ite <iamond +rading Corporation and8or ,erry /y vs. National LaborRelations Commission, et al., G.R. No. 1.6!1*. 2ar%$ *, !1!. Indispensable party. #ule =, Section E of the #ules of Court defines indispensable parties as those who are parties in interest without whom there can be no final determination of an action. They are those parties who possess such an interest in the controversy that a final decree would necessarily affect their rights, so that the courts cannot proceed without their presence. ' party is indispensable if his interest in the sub%ect matter of the suit and in the relief sought is ine6tricably intertwined with the other parties0 interest. )n*uestionably, Gillamater0s widow stands as an indispensable party to this complaint for payment of permanent and total disability benefits, reimbursement of medical and hospitali1ation e6penses, moral and e6emplary damages, and attorney0s fees. Leonis Navigation Co., 'n%. and 6orld 2arine &anama, 7.A. vs. Catalino /. -illamater, et al., G.R. No. 1(*16*, 2ar%$ 3, !1!. Burisdiction; estoppel. $etitioner is already estopped from belatedly raising the issue of lac of %urisdiction since it has actively participated in the proceedings before the "' and !"#C. 8e have consistently held that while %urisdiction may be assailed at any stage, a party0s active participation in the proceedings before a court without %urisdiction will estop such party from assailing such lac of it. It is an undesirable practice of a party participating in the proceedings and submitting his case for decision and then accepting the %udgment, only if favorable, and attac ing it for lac of %urisdiction, when adverse. &$ilippine -eterans #an> vs. National Labor Relations Commission, et al., G.R. No. 1.... , 2ar%$ 3!, !1!.

Burisdiction; labor arbiter. $etitioners clearly and consistently *uestioned the legality of #:MI0s adoption of the new salary scheme ,i.e., piece2rate basis., asserting that such action, among others, violated the e6isting C&'. Indeed, the controversy was not a simple case of illegal dismissal but a labor dispute involving the manner of ascertaining employees0 salaries, a matter which was governed by the e6isting C&'. 8ith regard to the *uestion of %urisdiction over the sub%ect matter, 'rticle /-E,c. of the "abor Code re*uires labor arbiters to refer cases involving the implementation of C&'s to the grievance machinery provided therein and to voluntary arbitration. Moreover, 'rticle /@F of the "abor Code clarifies that such disputes must be referred first to the grievance machinery and, if unresolved within seven days, they shall automatically be referred to voluntary arbitration. )nder this provision, voluntary arbitrators have original and e6clusive %urisdiction over matters which have not been resolved by the grievance machinery. $ursuant to 'rticles /-E in relation to 'rticles /@F and /@- of the "abor Code, the labor arbiter should have referred the matter to the grievance machinery provided in the C&'. 2iguela 7antuyo, et al. vs. Remer%o Garments 2anuEa%turing, 'n%. and8or -i%toria Reyes, G.R. No. 1(44 !, 2ar%$ , !1!. Burisdiction; labor case. 'rticle /-E of the "abor Code provides that the "abor 'rbiters shall have original and e6clusive %urisdiction to hear and decide cases involving termination disputes. The !"#C shall have e6clusive appellate %urisdiction over all cases decided by "abor 'rbiters. :alera being an employee, the "abor 'rbiter and the !"#C have %urisdiction over the present case. 6&& 2ar>eting Communi%ations, 'n%. et al. vs. ,o%elyn 2. Galera8,o%elyn 2. Galera vs. 6&& 2ar>eting Communi%ations, 'n%. et al., G.R. No. 16* !(8G.R. No. 16* 3*, 2ar%$ ), !1!. Burisdiction; !"#C. The "abor 'rbiter and the !"#C do not have %urisdiction over "#T'. $etitioners themselves admitted in their complaint that "#T' ;is a government agency organi1ed and e6isting pursuant to an original charter ,>6ecutive 4rder !o. @F=.,< and that they are employees of M>T#4. Lig$t Rail +ransit Aut$ority v. -enus, ,r. ,:.#. !os. -@=EC/ S -@=CC-, March /7, /FF@., which has a similar factual bac drop, holds that "#T', being a government2 owned or controlled corporation created by an original charter, is beyond the reach of the Department of "abor and >mployment which has %urisdiction over wor ers in the private sector, ;>mployees of petitioner M>T#4 cannot be considered as employees of petitioner "#T'. The employees hired by M>T#4 are covered by the "abor Code and are under the %urisdiction of the Department of "abor and >mployment, whereas the employees of petitioner "#T', a government2owned and controlled corporation with original charter, are covered by civil service rules. 3erein private respondent wor ers cannot have the best of two worlds, e.g., be considered government employees of petitioner "#T', yet allowed to stri e as private employees under our labor laws.< In fine, the "abor 'rbiter0s decision against "#T' was rendered without %urisdiction, hence, it is void. Thus, it was improper for the appellate court to order the remand of the case to the !"#C, and for it ,!"#C. to give due course to "#T'0s appeal. Emmanuel 7. 1ugo, et al. vs. Lig$t Rail +ransit Aut$ority, G.R. No. 1.1.66, 2ar%$ 1., !1!. !"#C; final decision. $etitioners received the Bune -A, /FF7 resolution of the !"#C, denying their motion for reconsideration, on Bune -@, /FF7. They filed their petition for certiorari before the C' on 'ugust ?, /FF7, or A7 calendar days from the date of notice of the Bune -A, /FF7 resolution. &y reason of the finality of the Bune -A, /FF7 !"#C resolution, the "abor 'rbiter issued on Buly /?, /FF7 a 8rit of >6ecution. $etitioners never moved for a reconsideration of this 4rder regarding the

voluntariness of their payment to Sonia, as well as the dismissal with pre%udice and the concomitant termination of the case. 3owever, petitioners argued that the finality of the case did not render the petition for certiorari before the C' moot and academic. 4n this point, we agree with petitioners. In the landmar case of 7t. 2artin Funeral 1ome v. NLRC ,:.#. !o. -=FC@@, September -@, -??C., we ruled that %udicial review of decisions of the !"#C is sought via a petition for certiorari under #ule @A of the #ules of Court, and the petition should be filed before the C', following the strict observance of the hierarchy of courts. )nder #ule @A, Section 7, petitioners are allowed si6ty ,@F. days from notice of the assailed order or resolution within which to file the petition. Simply put, the e6ecution of the final and e6ecutory decision or resolution of the !"#C shall proceed despite the pendency of a petition for certiorari, unless it is restrained by the proper court. Leonis Navigation Co., 'n%. and 6orld 2arine &anama, 7.A. vs. Catalino /. -illamater, et al., G.R. No. 1(*16*, 2ar%$ 3, !1!. $4>'; factual findings. 's a general rule, factual findings of administrative and *uasi2%udicial agencies speciali1ing in their respective fields, especially when affirmed by the C', must be accorded high respect, if not finality. 3owever, we are not bound to adhere to the general rule if we find that the factual findings do not conform to the evidence on record or are not supported by substantial evidence, as in the instant case. The self2serving and unsubstantiated allegations of respondent cannot defeat the concrete evidence submitted by petitioner. 8e note that respondent did not deny the due e6ecution of the withdrawal form as well as the genuineness of his signature and thumb mar affi6ed therein. 4n the contrary, he admitted signing the same. 8hen he voluntarily signed the document, respondent is bound by the terms stipulated therein. LN7 'nternational 2anpo?er 7ervi%es vs. Armando &adua, ,r., G.R. No. 1(*(* , 2ar%$ ), !1!. 'EBRUAR$ 2010 Labor Law 'gency; principle of apparent authority. There is ample evidence that the hospital held out to the patient that the doctor was its agent. The two factors that determined apparent authority in this case were+ first, the hospital0s implied manifestation to the patient which led the latter to conclude that the doctor was the hospital0s agent; and second, the patient0s reliance upon the conduct of the hospital and the doctor, consistent with ordinary care and prudence. It is of record that the hospital re*uired a ;consent for hospital care< to be signed preparatory to the surgery of the patient. The form reads+ ; &ermission is $ereby given to t$e medi%al, nursing and laboratory staEE oE t$e 2edi%al City General 1ospital to perEorm su%$ diagnosti% pro%edures and to administer su%$ medi%ations and treatments as may be deemed ne%essary or advisable by t$e p$ysi%ians oE t$is $ospital Eor and during t$e %onEinement oE """. < &y such statement, the hospital virtually reinforced the public impression that the doctor was a physician of its hospital, rather than one independently practicing in it; that the medications and treatments he prescribed were necessary and desirable; and that the hospital staff was prepared to carry them out. &roEessional 7ervi%es, 'n%. vs. +$e Court oE Appeals, et al.8Natividad 4substituted by $er %$ildren 2ar%elino Agana ''', Enri=ue Agana, ,r. Emma AganaBAndaya, ,esus Agana and Raymund Agana and Erri=ue Agana5 vs. +$e Court oE Appeals and ,uan Fuentes 2iguel Ampil

vs. Natividad and Enri=ue Agana, G.R. Nos. 1 6 *(8G.R. No. 1 646(8G.R. No. 1 ()*!, February , !1!. Compensable illness. Since %$ole%ystolit$iasis or gallstone has been e6cluded as a compensable illness under the applicable standard contract for (ilipino seafarers that binds the seafarer and the vessel0s foreign owner, it was an error for the C' to treat such illness as ;wor 2related< and, therefore, compensable. The standard contract precisely did not consider gallstone as compensable illness because the parties agreed, presumably based on medical science, that such affliction is not caused by wor ing on board ocean2going vessels. !or is there any evidence to prove that the nature of the seafarer0s wor on board a ship aggravated his illness. !o one nows if he had gallstone at the time he boarded the vessel. &y the nature of this illness, it is highly probable that he already had it when he boarded his assigned ship although it went undiagnosed because he had yet to e6perience its symptoms. #andila 7$ipping, 'n%. et al. vs. 2ar%os C. Abalos, G.R. No. 1((1!!, February , !1!. Compensable illness; wor related. Melanoma is not listed as an occupational disease under 'nne6 ;'< of the #ules on >mployees Compensation. 3ence, respondent has the burden of proving, by substantial evidence, the causal relationship between her illness and her wor ing conditions. Substantial evidence means such relevant evidence as a reasonable mind might accept to support a conclusion. The Court in this case agreed with the petitioner and the >CC that respondent was not able to positively prove that her ailment was caused by her employment and that the ris of contracting the disease was increased by her wor ing conditions. 8hile the law re*uires only a reasonable wor 2connection and not a direct causal relation, respondent still failed to show that her illness was really brought about by the wound she sustained during the supervised gardening activity in school. The C' accepted the allegation that the mole appeared right on the spot where respondent sustained the in%ury without any further proof that the mole appeared because of the in%ury. The C' further ruled that ;the ris of ac*uiring the said ailment increased by the nature of Irespondent0sJ wor in going to school and in returning to her residence during school days 6 6 6.< 3owever, the C' failed to consider that in a tropical country li e the $hilippines, e6posure to sunlight is common. )nli e farmers, fishermen or lifeguards, it was not shown that respondent had chronic long2term e6posure to the sun considered necessary for the development of melanoma. Thus, the Court did not find the ris of contracting the disease to have been heightened by respondent0s e6posure to sunlight in going to wor and returning to her residence. Government 7ervi%e 'nsuran%e 7ystem vs. Rosalinda A. #ernadas, G.R. No. 164(31, February 11, !1! Dismissal; due process. The essence of due process is the opportunity to be heard; it is the denial of this opportunity that constitutes violation of due process of law. The employee was given the opportunity to be heard when a proper notice of investigation was sent to him, although the notice did not reach him for reasons outside the employer0s control. The employee was not also totally unheard on the matter as he was able to e6plain his side through the two ,/. e6planation letters he submitted. These letters are clear indications that he intimately new of the matter for which he was being investigated. If he was denied due process at all, the denial was with respect to the charges of e6tortion, tardiness and absenteeism, which are grounds invo ed separately from loss of trust and confidence. These grounds were not serious considerations in the dismissal that followed, and therefore, were not considered by the Court as material to the present case. #ibiana Farms and 2ills, 'n%. vs. Arturo Lado, G.R. No. 1)(.61, February , !1!. Dismissal; due process. In an unlawful dismissal case, the employer has the burden of proving the lawful cause sustaining the dismissal of the employee. The employer must affirmatively show rationally ade*uate evidence that the dismissal was for a

%ustifiable cause. The employee0s behavior constituted %ust cause. 3owever, the company cannot deny that it failed to observe due process. The law re*uires that the employer must furnish the wor er sought to be dismissed with two written notices before termination of employment can be legally effected+ ,-. notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and ,/. the subse*uent notice which informs the employee of the employer0s decision to dismiss him. Giolation of the employee0s right to statutory due process, even if the dismissal was for a %ust cause, warrants the payment of indemnity in the form of nominal damages. This indemnity is not intended to penali1e the employer but to vindicate or recogni1e the employee0s right to statutory due process, which was violated by the employer in the present case. 1ilton 1eavy E=uipment Corporation and &eter Lim vs. Ananias <y, G.R. No. 164.6!, February , !1!. Dismissal; due process. (ailure to observe due process in the termination of employment for a %ust cause does not invalidate the dismissal but ma es the company liable for non2compliance with the procedural re*uirements of due process. The violation of the employee0s right to statutory due process warrants the payment of nominal damages, the amount of which is addressed to the sound discretion of the court, ta ing into account the relevant circumstances. In the instant case, considering that the company already suffered financially because of poor sales performance under the employee0s watch, it is proper to reduce the amount of nominal damages awarded to petitioner to Thirty Thousand $esos ,$=F,FFF.FF.. The amount of nominal damages awarded is not intended to enrich the employee, but to deter employers from future violations of the statutory due process rights of employees. Rolando &. An%$eta vs. <estiny Finan%ial &lans, 'n%. and Arsenio #artolome, G.R. No. 1(*(! , February 16, !1! Dismissal; due process. In the dismissal of employees, it has been consistently held that the twin re*uirements of notice and hearing are essential elements of due process. The employer must furnish the wor er with two written notices before termination of employment can be legally effected+ ,-. a notice apprising the employee of the particular acts or omissions for which his dismissal is sought, and ,/. a subse*uent notice informing the employee of the employer0s decision to dismiss him. 8ith regard to the re*uirement of a hearing, the essence of due process lies simply in an opportunity to be heard, and not that an actual hearing should always and indispensably be held. "i ewise, there is no re*uirement that the notices of dismissal themselves be couched in the form and language of %udicial or *uasi2%udicial decisions. 8hat is re*uired is for the employer to conduct a formal investigation process, with notices duly served on the employees informing them of the fact of investigation, and subse*uently, if warranted, a separate notice of dismissal. Through the formal investigatory process, the employee must be accorded the right to present his or her side, which must be considered and weighed by the employer. The employee must be sufficiently apprised of the nature of the charge, so as to be able to intelligently defend himself or herself against the charge. 6ilEredo 2. #aron, et al. vs. National Labor Relations Commission, et al., G.R. No. 1. **, February , !1!. Dismissal; gross neglect of duties. 'rticle /C/ ,b. imposes a stringent condition before an employer may terminate an employment due to gross and habitual neglect by the employee of his duties. To sustain a termination of employment based on this provision of law, the negligence must not only be gross but also habitual. In the present case, the employer asserts that the employees failed to regularly underta e a monthly physical inventory of the outlet0s merchandise. The Court was not persuaded as it found that inventory preparation and reporting did not fall on the employees0 shoulders since they were to ;assist the Istoc J cler < only. Aulas

'deas H Creations, et al. vs. ,uliet Al%oseba, et al., G.R. No. 1.!1 3, February 1., !1!. Dismissal; loss of trust and confidence. In Fungo v. Lourdes 7%$ool oE 2andaluyong , we restated the guidelines for the application of loss of trust and confidence as a %ust cause for dismissal of an employee from the service, thus+ ;a. loss of confidence should not be simulated; b. it should not be used as subterfuge for causes which are improper, illegal or un%ustified; c. it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and d. it must be genuine, not a mere afterthought to %ustify earlier action ta en in bad faith.< In the present case, the employee, who was a warehouseman, held a position of trust and confidence and was given access to and authority over company property with clear tas s and guidelines laid down very early in his employment. "i e any business entity, the company has every right to protect itself from actual threats to the viability of its operations. The employee, caught red2handed in a scheme to spirit off unpaid company sac s, not only violated his fiduciary duty as custodian of company property resulting in the company0s loss of trust and confidence in him; he had also become a threat to the viability of company operations. To rule that he should be reinstated would be oppressive to the company. The law, in protecting the rights of the employee, authori1es neither the oppression nor the self2 destruction of the employer. #ibiana Farms and 2ills, 'n%. vs. Arturo Lado, G.R. No. 1)(.61, February , !1!. Dismissal; loss of trust and confidence. The doctrine of loss of confidence re*uires the concurrence of the following+ ,-. loss of confidence should not be simulated; ,/. it should not be used as a subterfuge for causes which are improper, illegal, or un%ustified; ,=. it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; ,7. it must be genuine, not a mere afterthought to %ustify an earlier action ta en in bad faith; and ,A. the employee involved holds a position of trust and confidence. "oss of confidence, as a %ust cause for termination of employment, is premised on the fact that the employee concerned holds a position of responsibility, trust and confidence. 3e must be invested with confidence on delicate matters, such as the custody, handling, care, and protection of the employer0s property and5or funds. In order to constitute a %ust cause for dismissal, the act complained of must be ;wor 2related< such as would show the employee concerned to be unfit to continue wor ing for the employer. The sub%ect employee in this case is a managerial employee holding a highly sensitive position. &eing the 3ead of the Mar eting :roup of the company, he was in charge, among others, of the over2all production and sales performance of the company. Thus, as aptly pointed out by the C', his performance was practically the lifeblood of the corporation, because its earnings depended on the sales of the mar eting group, which he used to head. The position held by the employee re*uired the highest degree of trust and confidence of his employer in the former0s e6ercise of managerial discretion insofar as the conduct of the latter0s business was concerned. The employee0s inability to perform the functions of his office to the satisfaction of his employer and the former0s poor %udgment as mar eting head caused the company huge financial losses. If these were not timely addressed and corrected, the company could have collapsed, to the detriment of its policy holders, stoc holders, employees, and the public in general. Rolando &. An%$eta vs. <estiny Finan%ial &lans, 'n%. and Arsenio #artolome, G.R. No. 1(*(! , February 16, !1! Dismissal; loss of trust and confidence. The Court found convincing evidence that a pattern of concealment and dishonesty marred the purchase of paper materials for the 8omen0s Bournal0s special pro%ect, with the employee playing the principal and most active role. There is no *uestion that the employee failed to ma e a reasonable canvass of the prices of the paper materials re*uired by a company0s special pro%ect, resulting in substantial losses to the company. That a rush %ob was involved, is no e6cuse as canvassing could be done even in a day0s time as shown by the audit department0s canvass. That the employee was responsible for concealment and omissions also appears clear to us; he failed, under dubious

circumstances, to seasonably disclose to his employer material information with financial impact on the purchase transaction. Thus, the Court cannot but conclude that substantial evidence e6ists %ustifying the employee0s dismissal for a %ust cause D loss of trust and confidence. (or loss of trust and confidence to be a ground for dismissal, the law re*uires only that there be at least some basis to %ustify the dismissal. The fact that the employee had been with the company for /A years cannot change the conclusion that he had become a liability to the company whose interests he miserably failed to protect. &$ilippine ,ournalist, 'n%. vs. LeoCar <ela CruC y #alobal, G.R. No. 1.(1 !, February 16, !1!. Dismissal; re*uirements. )nder the "abor Code, the re*uirements for the lawful dismissal of an employee are two2fold, consisting of substantive and procedural aspects. !ot only must the dismissal be for a %ust or authori1ed cause; the basic re*uirements of procedural due process D notice and hearing D must li ewise be observed before an employee may be dismissed. The burden of proof rests on the employer to show that the employee0s dismissal has met these due process re*uirements. The case of the employer must stand or fall on its own merits and not on the wea ness of the employee0s defense. #ibiana Farms and 2ills, 'n%. vs. Arturo Lado, G.R. No. 1)(.61, February , !1!. Dismissal; separation pay. )nder 'rticle /E? of the "abor Code, an illegally dismissed employee ;shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full bac wages, inclusive of allowances, and to his other benefits or their monetary e*uivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.< In addition to full bac wages, the Court has also repeatedly ruled that in cases where reinstatement is no longer feasible due to strained relations, then separation pay may be awarded instead of reinstatement. In 2t. Carmel College v. Resuena, the Court reiterated that the separation pay, as an alternative to reinstatement, should be e*uivalent to one ,-. month salary for every year of service. 7argasso Constru%tion and <evelopment Corporation vs. National Labor Relations Commission 44t$ <ivision5 and Gorgonio 2ong%al, G.R. No. 16411., February *, !1!. Dismissal; serious misconduct. Misconduct has been defined as improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of %udgment. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. Such misconduct, however serious, must nevertheless be in connection with the employee0s wor to constitute %ust cause for his separation. In the present case, the Court found substantial evidence to prove that a serious misconduct has been committed to %ustify termination from employment. The Certified $ublic 'ccountant and Corporate (inance Manager of the company submitted a report dated (ebruary -?, /FFF stating that in spite of management0s memorandum, the eys to the office and filing cabinets were not surrendered. It was li ewise stated in the report that petitioner 8ilfredo &aron pulled out some records without allowing a representative from the internal audit team to inspect them. 3e noticed 8ilfredo &aron deleting some files from the computer, which could no longer be retrieved. Moreover, a member of the audit team saw Cynthia Bunatas ,another petitioner. carrying some documents, including a Daily Collection #eport. 8hen as ed to present the documents for inspection, Bunatas refused and tore the document. In addition, the audit team discovered that MSI incurred an inventory shortage of 4ne Million Thirty Thousand Two 3undred (ifty2>ight $esos and Twenty24ne Centavos ,$-,F=F,/AC./-.. It found that 8ilfredo &aron, the operations manager, in conspiracy with the other petitioners, orchestrated massive irregularities and grand scale fraud, which could no longer be documented because of theft of company

documents and deletion of computer files. )nmista ably, the unauthori1ed ta ing of company documents and files, failure to pay unremitted collections, failure to surrender eys to the filing cabinets despite earlier instructions, concealment of shortages, and failure to record inventory transactions pursuant to a fraudulent scheme are acts of grave misconduct, which are sufficient causes for dismissal from employment. 6ilEredo 2. #aron, et al. vs. National Labor Relations Commission, et al., G.R. No. 1. **, February , !1!. Dismissal; theft; degree of evidence. The long2standing rule is that the e6istence of a conspiracy must be proved by clear, direct and convincing evidence. In FernandeC v. National Labor Relations Commission , The Court e6pounded on the degree of evidence re*uired to establish the e6istence of a conspiracy in this wise+ ;8hile it is true that in conspiracy, direct proof is not essential, it must however, be shown that it e6ists as clearly as the commission of the offense itself. There must at least be ade*uate proof that the malefactors had come to an agreement concerning the commission of a felony and decided to commit it. 6 6 6 (or conspiracy to e6ist, it is essential that there must be conscious design to commit an offense. Conspiracy is not the product of negligence but of intentionality on the part of the cohorts.< Gerily, there was a dearth of evidence directly lin ing the employee to the commission of the crime of theft, as his mere act of loading the dump truc with aggregates did not show that he new of the other person0s plan to deliver the load to a place other than the company0s construction site. The only conclusion, therefore, is that the company had illegally dismissed the employee in the present case. 7argasso Constru%tion and <evelopment Corporation vs. National Labor Relations Commission 44t$ <ivision5 and Gorgonio 2ong%al, G.R. No. 16411., February *, !1!. >mployee; recovery of personal contributions. May a government employee, dismissed from the service for cause, be allowed to recover the personal contributions he paid to the :overnment Service Insurance System ,:SIS.T The answer is yes. Section --,d. of Commonwealth 'ct !o. -C@, as amended, provides+ ;)pon dismissal for cause or on voluntary separation, he shall be entitled only to his own premiums and voluntary deposits, if any, plus interest of three per centum per annum, compounded monthly.< This provision continues to govern cases of employees dismissed for cause and their claims for the return of their personal contributions. 'lso, it should be remembered that the :SIS laws are in the nature of social legislation, to be liberally construed in favor of the government employees. The money, sub%ect of the employee0s re*uest, consists of personal contributions made by him, premiums paid in anticipation of benefits e6pected upon retirement. The occurrence of a contingency, i.e., his dismissal from the service prior to reaching retirement age, should not deprive him of the money that belongs to him from the outset. To allow forfeiture of these personal contributions in favor of the :SIS would condone undue enrichment. Carmelita Lledo vs. Atty. Cesar -. Lledo, #ran%$ Cler> oE Court, Regional +rial Court, #ran%$ *4, @ueCon City, A.2. No. &B*)B116(, February *, !1!. >mployee e6penses; in2service training. In the present case, 'rticle OOI, Section @ of the C&' provides that ;All e"penses oE se%urity guards in se%uring 8rene?ing t$eir li%enses s$all be Eor t$eir personal a%%ount .< ' reading of the provision would reveal that it encompasses all possible e6penses a security guard would pay or incur in order to secure or renew his license. In2service training being a re*uirement for the renewal of a security guard0s license, e6penses incurred therefore are claimed to be for the security guard0s personal account. 3owever, the -??7 #evised #ules and #egulations Implementing the $rivate Security 'gency "aw ,#epublic 'ct !o. A7CE. provides that it shall be the primary responsibility of the operators of private security agency and company security forces to maintain and upgrade the

standards of efficiency, discipline, performance and competence of their personnel. It further provides that ;ITJo maintain and5or upgrade the standard of efficiency, discipline and competence of security guards and detectives, company security force and private security agencies upon prior authority shall conduct2in2service training U +$e %ost oE training s$all be proBrated among t$e parti%ipating agen%ies8private %ompanies.< Since it is the primary responsibility of operators of company security forces to maintain and upgrade the standards of efficiency, discipline, performance and competence of their personnel, it follows that the e6penses to be incurred therein shall be for the account of the company. (urther, the intent of the law to impose upon the employer the obligation to pay for the cost of its employees0 training is manifested in the aforementioned provision of law. 8hile the law mandates pro2 rating of e6penses because it would be impracticable and unfair to impose the burden of e6penses suffered by all participants on only one participating agency or company, if there is no centrali1ation, there can be no pro2rating, and therefore, the company that has its own security forces must shoulder the entire cost for such training. If the intent of the law were to impose upon individual employees the cost of training, the provision on the pro2rating of e6penses would not have found print in the law. $rior to the signing of the C&', it was the company providing for the in2 service training of the guards. Thus, implicit from the company0s actuations was its ac nowledgment of its legally mandated responsibility to shoulder the e6penses for in2service training. &NCC 7>y?ay +raEEi% 2anagement and 7e%urity <ivision 6or>ers 3rganiCation 4&7+276<35, represented by its &resident, Rene 7oriano vs. &NCC 7>y?ay Corporation5, G.R. No. 1(1 31, February 1(, !1! >mployer2employee relationship; control test. This Court still employs the ;control test< to determine the e6istence of an employer2employee relationship between hospital and doctor. In Calamba 2edi%al Center, 'n%. v. National Labor Relations Commission, et al., the Court held that+ ;)nder the ;control test<, an employment relationship e6ists between a physician and a hospital if the hospital controls both the means and the details of the process by which the physician is to accomplish his tas . 6 6 6 That petitioner e6ercised control over respondents gains light from the undisputed fact that in the emergency room, the operating room, or any department or ward for that matter, the doctor0s wor is monitored through the hospital0s nursing supervisors, charge nurses and orderlies. 8ithout the approval or consent of the hospital or its medical director, no operations can be underta en in those areas. (or the control test to apply, it is not essential for the employer to actually supervise the performance by the employee of his duties, it being enough that it has the right to wield the power.< &roEessional 7ervi%es, 'n%. vs. +$e Court oE Appeals, et al.8Natividad 4substituted by $er %$ildren 2ar%elino Agana ''', Enri=ue Agana, ,r. Emma AganaBAndaya, ,esus Agana and Raymund Agana and Erri=ue Agana5 vs. +$e Court oE Appeals and ,uan Fuentes 2iguel Ampil vs. Natividad and Enri=ue Agana, G.R. Nos. 1 6 *(8G.R. No. 1 646(8G.R. No. 1 ()*!, February , !1!. Management prerogatives; contract of perpetual employment. The Court cannot countenance the employee0s claim that a contract of perpetual employment was ever constituted. 8hile the Constitution recogni1es the primacy of labor, it also recogni1es the critical role of private enterprise in nation2building and the prerogatives of management. ' contract of perpetual employment deprives management of its prerogative to decide whom to hire, fire and promote, and renders inutile the basic precepts of labor relations. 8hile management may validly waive it prerogatives, such waiver should not be contrary to law, public order, public policy, morals or good customs. 'n absolute and un*ualified employment for life in the mold of petitioner0s concept of perpetual employment is contrary to public policy and good customs, as it un%ustly forbids the employer from terminating the services of an employee despite the e6istence of a %ust or valid cause. It li ewise compels the employer to retain an employee despite the attainment of the statutory retirement age, even if the employee has became a ;non2performing

asset< or, worse, a liability to the employer. Ronilo 7orreda vs. Cambridge Ele%troni%s Corporation, G.R. No. 1( * (, February 11, !1!. Suspension; leave without prior authority. 8hile it is true that the union and its members have been granted union leave privileges under the C&', the grant cannot be considered separately from the other provisions of the C&', particularly the provision on management prerogatives where the C&' reserved for the company the full and complete authority in managing and running its business. The Court, in the present case, saw nothing in the language of the union leave provision that removes from the company the right to prescribe reasonable rules and regulations to govern the manner of availing of union leaves, particularly the prerogative to re*uire its prior approval. In fact, prior notice is e6pressly re*uired under the C&' so that the company can appropriately respond to the re*uest for leave. In this sense, the rule re*uiring prior approval only made e6press what is implied from the terms of the C&'. Despite management0s disapproval of his re*uested leave, the employee still went on leave, in open disregard of his superior0s orders. This rendered the employee open to the charge of insubordination, separately from his absence without official leave. 2alayan Employees Asso%iationBFF6 and RodolEo 2angalino vs. 2alayan 'nsuran%e Company, 'n%., G.R. No. 1.13)(, February , !1!. Luitclaim; elements. It is true that the law loo s with disfavor on *uitclaims and releases by employees who have been inveigled or pressured into signing them by unscrupulous employers see ing to evade their legal responsibilities and frustrate %ust claims of employees. In certain cases, however, the Court has given effect to *uitclaims e6ecuted by employees if the employer is able to prove the following re*uisites, to wit+ ,-. the employee e6ecutes a deed of *uitclaim voluntarily; ,/. there is no fraud or deceit on the part of any of the parties; ,=. the consideration of the *uitclaim is credible and reasonable; and ,7. the contract is not contrary to law, public order, public policy, morals or good customs, or pre%udicial to a third person with a right recogni1ed by law. Goodri%$ 2anuEa%turing Corporation H 2r. Nilo C$ua Goy vs. Emerlina Ativo, et al., G.R. No. 1..!! , February 1, !1!. Luitclaim; validity. In the case at bar, both the "abor 'rbiter and the !"#C ruled that the employees e6ecuted their *uitclaims without any coercion from the company following their voluntary resignation from the company. The contents of the *uitclaim documents are simple, clear and une*uivocal. The records of the case are bereft of any substantial evidence to show that the employees did not now that they were relin*uishing their right short of what they had e6pected to receive and contrary to what they have so declared. $ut differently, at the time they were signing their *uitclaims, respondents honestly believed that the amounts received by them were fair and reasonable settlements of the amounts, which they would have received had they refused to voluntarily resign from the said company. Goodri%$ 2anuEa%turing Corporation H 2r. Nilo C$ua Goy vs. Emerlina Ativo, et al., G.R. No. 1..!! , February 1, !1!. Gacation leave; scheduling. 'lthough the preferred vacation leave schedule of employees should be given priority, they cannot demand, as a matter of right, for their re*uest to be automatically granted by the company. If the employees were given the e6clusive right to schedule their vacation leave then said right should have been incorporated in the C&'. In the absence of such right and in view of the mandatory provision in the C&' giving the company the right to schedule the vacation leave of its employees, the C&' prevails. In the grant of vacation leave privileges to an employee, the employer is given the leeway to impose conditions on the entitlement to and commutation of the same, as the grant of vacation leave is not a standard of law, but a prerogative of management. It is a mere concession or act of grace of the employer and not a matter of right on the part of the employee. It is, therefore, well within the power and authority of an employer to impose certain conditions, as it deems fit, on the

grant of vacation leaves, such as having the option to schedule the same. &NCC 7>y?ay +raEEi% 2anagement and 7e%urity <ivision 6or>ers 3rganiCation 4&7+276<35, represented by its &resident, Rene 7oriano vs. &NCC 7>y?ay Corporation5, G.R. No. 1(1 31, February 1(, !1! Labor Proced re 'ppeal; *uestion of fact. 8hile as a rule, a petition for review on %ertiorari shall raise only *uestions of law, we deem it appropriate to e6amine the facts in this review, given the conflicting factual findings between the "abor 'rbiter, on the one hand and, the !"#C and the C', on the other. The "abor 'rbiter sustained #ivera0s dismissal with the finding that he committed acts of dishonesty or fraud against his employer. The !"#C and the C' held that no substantial evidence e6isted to support #ivera0s dismissal. &$ilippine ,ournalist, 'n%. vs. LeoCar <ela CruC y #alobal, G.R. No. 1.(1 !, February 16, !1!. >6ecution of %udgments; separation pay5bac wages; computation. In concrete terms, the *uestion is whether a re2computation in the course of e6ecution, of the labor arbiter0s original computation of the awards made pegged as of the time the decision was rendered and confirmed with modification by a final C' decision, is legally proper. The Court held that under the terms of the decision under e6ecution, no essential change is made by a re2computation as this step is a necessary conse*uence that flows from the nature of the illegality of dismissal declared in that decision. ' re2 computation ,or an original computation, if no previous computation has been made. is a part of the law D specifically, 'rticle /E? of the "abor Code and the established %urisprudence on this provision D that is read into the decision. &y the nature of an illegal dismissal case, the reliefs continue to add on until full satisfaction, as e6pressed under 'rticle /E? of the "abor Code. The re2computation of the conse*uences of illegal dismissal upon e6ecution of the decision does not constitute an alteration or amendment of the final decision being implemented. The illegal dismissal ruling stands; only the computation of the monetary conse*uences of this dismissal is affected and this is not a violation of the principle of immutability of final %udgments. 7ession <elig$ts '%e Cream and Fast Foods vs. +$e 1on. Court oE Appeals 47i"t$ <ivision5, 1on. National Labor Relations Commission 47e%ond <ivision5 and Adonis Armenio 2. Flora, G.R. No. 1( 14*, February ., !1!. Burisdiction; absence of employer2employee relationship. Burisdiction over the sub%ect matter of a complaint is determined by the allegations of the complaint. In &ioneer Con%rete &$ilippines, 'n%. v. +odaro, the Court reiterated that where no employer2employee relationship e6ists between the parties, and the "abor Code or any labor statute or collective bargaining agreement is not needed to resolve any issue raised by them, it is the #egional Trial Court which has %urisdiction. Thus it has been consistently held that the determination of the e6istence of a contract as well as the payment of damages is inherently civil in nature. ' labor arbiter may only ta e cogni1ance of a case and award damages where the claim for such damages arises out of an employer2employee relationship. In the present case, the employee, from the period May C, -??? to 4ctober C, -???, was clearly a pro%ect employee of the company. There is, therefore, an employer2 employee relationship. Conse*uently, *uestions or disputes arising out of this relationship fell under the %urisdiction of the labor arbiter. 3owever, based on petitioner0s allegations in his position paper, his cause of action was based on an alleged second contract of employment separate and distinct from his pro%ect employment contract. 8hile there e6isted an employer2employee relationship between the parties while the pro%ect contract of employment e6isted, the present dispute is neither rooted in the aforestated contract nor is it one inherently lin ed to it. $etitioner insists on a right to be employed again in respondent company and see s a determination of the e6istence of a new and separate contract that established that right. 's such, his case is within the %urisdiction, not of the labor

arbiter, but of the regular courts. The !"#C and the C' were therefore correct in ruling that the labor arbiter erroneously too cogni1ance of the case. Ronilo 7orreda vs. Cambridge Ele%troni%s Corporation, G.R. No. 1( * (, February 11, !1!. Burisdiction; void %udgment. The company admits that it failed to appeal the Banuary /?, /FF= 4rder within the period prescribed by law. It li ewise admits that the case was already in the e6ecution process when it resorted to a belated appeal to the D4"> Secretary. The company sought to e6cuse itself from the effects of the finality of the 4rder by arguing that it was allegedly issued without %urisdiction. 's such, it may be assailed at any time. 8hile it is true that orders issued without %urisdiction are considered null and void and, as a general rule, may be assailed at any time, the fact of the matter is that, in this case, it was well within the %urisdiction of Director Manalo to issue the 4rder. )nder 'rticle -/C,b. of the "abor Code, as amended by #epublic 'ct ,#'. !o. EE=F, the D4"> Secretary and her representatives, the regional directors, have %urisdiction over labor standards violations based on findings made in the course of inspection of an employer0s premises. The said %urisdiction is not affected by the amount of claim involved, as #' EE=F had effectively removed the %urisdictional limitations found in 'rticles -/? and /-E of the "abor Code insofar as inspection cases, pursuant to the visitorial and enforcement powers of the D4"> Secretary, are concerned. The last sentence of 'rticle -/C,b. of the "abor Code recogni1es an e6ception to the %urisdiction of the D4"> Secretary and her representatives, but such e6ception is neither an issue nor applicable here. +iger Constru%tion and <evelopment Corporation vs. Reynaldo, et al., G.R. No. 164141, February 6, !1!. "abor 'ppeal; cash bond. 'rticle //= of the "abor Code provides that an appeal by the employer to the !"#C from a %udgment of a labor arbiter which involves a monetary award may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the !"#C, in an amount e*uivalent to the monetary award in the %udgment appealed from. ;Cash,< means a sum of money; cash bail ,the sense in which the term ;cash bond< is used. is a sum of money posted by a criminal defendant to ensure his presence in court, used in place of a surety bond and real estate. To comply with the appeal bond re*uirement, the company deposited the amount of $E-,?F?.EE with the )nited Coconut $lanters &an and surrendered to the !"#C the passboo covering the deposit, along with a Deed of 'ssignment it e6ecuted assigning the proceeds of the deposit in favor of the employee and authori1ing the !"#C to release the same in the event that the "abor 'rbiter0s Decision becomes final and e6ecutory. Such Deed of 'ssignment, as well as the passboo , is neither a cash bond nor a surety bond. The company0s appeal to the !"#C was thus not duly perfected, thereby rendering the "abor 'rbiter0s Decision final and e6ecutory. 2indanao +imes Corporation vs. 2it%$el R. ConEesor, G.R. No. 1.341(, February ), !1!. JANUAR$ 2010 Labor Law C&'; coverage. 's regular employees, petitioners fall within the coverage of the bargaining unit and are therefore entitled to C&' benefits as a matter of law and contract. )nder the terms of the C&', petitioners are members of the appropriate bargaining unit because they are regular ran 2and2file employees and do not belong to any of the e6cluded categories. Most importantly, the labor arbiter0s decision of Banuary -E, /FF/ D affirmed all the way to the C' D ruled against the company0s submission that they are independent contractors. Thus, as regular ran 2 and2file employees, they fall within the C&' coverage. 'nd, under the C&'0s e6press terms, they are entitled to its benefits.

C&' coverage is not only a *uestion of fact, but of law and contract. The factual issue is whether the petitioners are regular ran 2and2file employees of the company. The tribunals below uniformly answered this *uestion in the affirmative. (rom this factual finding flows legal effects touching on the terms and conditions of the petitioners0 regular employment. Farley Fula%$e, et al. vs. A#7B C#N #road%asting Corporation, G.R. No. 1.3.1!, ,anuary 1, !1!. >mployee benefits; permanent disability benefits. In accordance with the avowed policy of the State to give ma6imum aid and full protection to labor, the Court applied the "abor Code concept of permanent total disability to (ilipino seafarers. The Court held that the notion of disability is intimately related to the wor er0s capacity to earn. 8hat is compensated is not the employee0s in%ury or illness but his inability to wor resulting in the impairment of his earning capacity; hence, disability should be understood less on its medical significance but more on the loss of earning capacity. In the present case, petitioner was able to secure a ;fit to wor < certification from a doctor only after more than five months from the time he was medically repatriated due to a finding that his disability is considered permanent and total. Significantly, petitioner remained unemployed even after he filed on (ebruary /@, /FF/ his complaint to recover permanent total disability compensation and despite the 'ugust =-, /FFA Decision of the !"#C which was affirmed by the Court of 'ppeals, ordering respondents to ;allow complainant to resume sea duty.< That petitioner was not li ely to fully recover from his disability is mirrored by the "abor 'rbiter0s finding that his illness would possibly recur once he resumes his sea duties. This could very well be the reason why petitioner was not re2deployed by respondents. $etitioner0s disability being then permanent and total, he is ;entitled to -FFN compensation, i.e., )SVCF,FFF for officers,< as stipulated in par. /F.-.E of the parties0 C&'. RiCaldy 2. @uitoriano vs. ,ebsens 2aritime, 'n%.82a. +$eresa Gutay and8or Atle ,ebsens 2anagement A87, G.R. No. 1(*.6., ,anuary 1, !1!.

"abor Code; interpretation. 'nother basic principle is that e6pressed in 'rticle 7 of the "abor Code D that all doubts in the interpretation and implementation of the "abor Code should be interpreted in favor of the wor ingman. This principle has been e6tended by %urisprudence to cover doubts in the evidence presented by the employer and the employee. The petitioner has, at very least, shown serious doubts about the merits of the company0s case, particularly in the appreciation of the clinching evidence on which the !"#C and C' decisions were based. In such contest of evidence, the Court applied 'rticle 7 as basis to rule in favor of the employee. In this case, the Court held that petitioner was constructively dismissed given the hostile and discriminatory wor ing environment he found himself in, particularly evidenced by the escalating acts of unfairness against him that culminated in the appointment of another 3#D manager without any prior notice to him. 8here no less than the company0s chief corporate officer was against him, petitioner had no alternative but to resign from his employment. The Court also gave significance to the fact that petitioner sought almost immediate official recourse to contest his separation from service through a complaint for illegal dismissal, and held that this is not the act of one who voluntarily resigned; his immediate filing of a complaint characteri1es him as one who deeply felt that he had been wronged. 2anolo A. &eDaElor vs. 3utdoor Clot$ing 2anuEa%turing Corporation, et al., G.R. No. 1((114, ,anuary 1, !1!.

Labor Proced re

'ppeal; illegal dismissal. In the present case, the company terminated the services of four drivers who were declared by the labor arbiter to be regular employees of the company in an initial complaint filed by said drivers for regulari1ation. $ending the company0s appeal of the labor arbiter0s decision, the company terminated the employment of said drivers on the ground of redundancy, which action, the Court viewed as an implied admission of the regular employment status of the drivers. The Court held that by implementing the dismissal action at the time the labor arbiter0s ruling was under review, the company unilaterally negated the effects of the labor arbiter0s ruling while at the same time appealing the same ruling to the !"#C. This unilateral move is a direct affront to the !"#C0s authority and an abuse of the appeal process. 'll these go to show that company acted with patent bad faith. Farley Fula%$e, et al. vs. A#7BC#N #road%asting Corporation, G.R. No. 1.3.1!, ,anuary 1, !1!. 'ppeal; *uestions of fact. The rule that a #ule 7A petition deals only with legal issues is not an absolute rule; it admits of e6ceptions. In the labor law setting, the Court may loo into factual issues when there is a conflict in the factual findings of the labor arbiter, the !"#C, and the C' as in the present case where the labor arbiter found facts supporting the conclusion that there had been constructive dismissal, while the !"#C0s and the C'0s factual findings contradicted the labor arbiter0s findings. The conflicting factual findings are not binding on the Court. The Court held that it retains the authority to pass upon the evidence presented and draw conclusions therefrom. 2anolo A. &eDaElor vs. 3utdoor Clot$ing 2anuEa%turing Corporation, et al., G.R. No. 1((114, ,anuary 1, !1!. 'ppeal under #ule 7A; *uestions of law vs. *uestions of fact . $etitioners in the present case do not *uestion the findings of facts in the assailed decisions. They *uestion the misapplication of the law and %urisprudence on the facts recogni1ed by the decisions. (or e6ample, they *uestion as contrary to law their e6clusion from the C&' after they were recogni1ed as regular ran 2and2file employees of the company. They also *uestion the basis in law for the dismissal of four drivers and the legal propriety of the redundancy action ta en against them. The Court reiterated the established distinctions between *uestions of law and *uestions of fact by *uoting its rulings in Ne? Rural #an> oE Guimba 4N.E.5 'n%. v. Fermina 7. Abad and RaEael 7usan IG.R. No. 161.1., August !, !!., )6 7CRA )!3J+ ;' *uestion of law e6ists when the doubt or controversy concerns the correct application of law or %urisprudence to a certain set of facts; or when the issue does not call for an e6amination of the probative value of the evidence presented, the truth or falsehood of the facts being admitted. ' *uestion of fact e6ists when a doubt or difference arises as to the truth or falsehood of facts or when the *uery invites calibration of the whole evidence considering mainly the credibility of the witnesses, the e6istence and relevancy of specific surrounding circumstances, as well as their relation to each other and to the whole, and the probability of the situation.< Farley Fula%$e, et al. vs. A#7BC#N #road%asting Corporation, G.R. No. 1.3.1!, ,anuary 1, !1!. Dismissal; burden of proof. It is a settled rule that in employee termination disputes, the employer bears the burden of proving that the employee0s dismissal was for %ust and valid cause. That petitioner did indeed file a letter of resignation does not help the company0s case as, other than the fact of resignation, the company must still prove that the employee voluntarily resigned. There can be no valid resignation where the act was made under compulsion or under circumstances appro6imating compulsion, such as when an employee0s act of handing in his resignation was a reaction to circumstances leaving him no alternative but to resign. In this case, the Court held that petitioner had been constructively dismissed as his resignation was a response to the unacceptable appointment of another person to a position he still occupied. In sum, the evidence does not support the e6istence of voluntariness in petitioner0s resignation. 2anolo A. &eDaElor vs. 3utdoor Clot$ing 2anuEa%turing Corporation, et al., G.R. No. 1((114, ,anuary 1, !1!.

DECE#BER 2009 Labor Law 'ttorney0s fees; actions for indemnity under employer liability laws. The claim for attorney0s fees is granted following 'rticle //FC of the !ew Civil Code which allows its recovery in actions for recovery of wages of laborers and actions for indemnity under the employer0s liability laws. The same fees are also recoverable when the defendant0s act or omission has compelled the plaintiff to incur e6penses to protect his interest as in the present case following the refusal by the employer to settle the employee0s claims. $ursuant to prevailing %urisprudence, petitioner is entitled to attorney0s fees of ten percent ,-FN. of the monetary award. Leopoldo Abante vs. A,G7 Fleet 2anagement 2anila and8or Guy <omingo A. 2a%apayag, Aristian Ger$ard ,ebsens 7>ipsrenderi A87, G.R. No. 1. 43!, <e%ember 4, !!*. Compensability of death; re*uirements. To be entitled to compensation, a claimant must show that the sic ness is either+ ,-. a result of an occupational disease listed under 'nne6 ;'< of the 'mended #ules on >mployees0 Compensation under the conditions 'nne6 ;'< sets forth; or ,/. if not so listed, that the ris of contracting the disease is increased by the wor ing conditions. &ased on (rancisco0s death certificate, the immediate cause of his death was cardiac arrest; the antecedent cause was acute massive hemorrhage, and the underlying cause was bleeding peptic ulcer disease. In determining the compensability of an illness, the wor er0s employment need not be the sole factor in the growth, development, or acceleration of a claimant0s illness to entitle him to the benefits provided for. It is enough that his employment contributed, even if only in a small degree, to the development of the disease. $.D. @/@ is a social legislation whose primordial purpose is to provide meaningful protection to the wor ing class against the ha1ards of disability, illness, and other contingencies resulting in loss of income. In employee compensation, persons charged by law to carry out the Constitution0s social %ustice ob%ectives should adopt a liberal attitude in deciding compensability claims and should not hesitate to grant compensability where a reasonable measure of wor 2connection can be inferred. 4nly this ind of interpretation can give meaning and substance to the law0s compassionate spirit as e6pressed in 'rticle 7 of the "abor Code D that all doubts in the implementation and interpretation of the provisions of the "abor Code, including their implementing rules and regulations, should be resolved in favor of labor. Government 7ervi%e 'nsuran%e 7ystem vs. ,ean E. Raoet, G.R. No. 1)(!3., <e%ember 3, !!*. Compensable in%ury; re*uirement. Section /F,&. of the $4>' Standard >mployment Contract provides for the liabilities of the employer only when the seafarer suffers from a wor 2related in%ury or illness during the term of his employment. $etitioner claims to have reported his illness to an officer once on board the vessel during the course of his employment. The records are bereft, however, of any documentary proof that he had indeed referred his illness to a nurse or doctor in order to avail of proper treatment. It thus becomes apparent that he was repatriated to the $hilippines, not on account of any illness or in%ury, but in view of the completion of his contract. &ut even assuming that petitioner was repatriated for medical reasons, he failed to submit himself to the company2designated doctor in accordance with the post2 employment medical e6amination re*uirement under the above2*uoted paragraph = of Section /F,&. of the $4>' Standard >mployment Contract. (ailure to comply with this re*uirement which is a sine =ua non bars the filing of a claim for disability benefits. <ionisio 2. 2usnit vs. 7ea 7tar 7$ipping Corporation and 7ea 7tar 7$ipping Corporation, Ltd., G.R. No. 1. 6 3, <e%ember 4, !!*.

Compensable in%ury; loss of earning capacity. The Court has applied the "abor Code concept of permanent total disability to (ilipino seafarers in eeping with the avowed policy of the State to give ma6imum aid and full protection to labor, it holding that the notion of disability is intimately related to the wor er0s capacity to earn, what is compensated being not his in%ury or illness but his inability to wor resulting in the impairment of his earning capacity, hence, disability should be understood less on its medical significance but more on the loss of earning capacity. ,oelson 3. 'loreta vs. &$ilippine +ransmarine Carriers, 'n%. and Norbul> 7$ipping /.A. Ltd., G.R. No. 1.3*!., <e%ember 4, !!*. Dismissal; constructive dismissal. Case law defines constructive dismissal as a cessation of wor because continued employment has been rendered impossible, unreasonable, or unli ely, as when there is a demotion in ran or diminution in pay or both or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee. The test of constructive dismissal is whether a reasonable person in the employee0s position would have felt compelled to give up his position under the circumstances. It is an act amounting to dismissal but is made to appear as if it were not. In fact, the employee who is constructively dismissed might have been allowed to eep coming to wor . Constructive dismissal is therefore a dismissal in disguise. The law recogni1es and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer. In the present case, the employer ceased verbally communicating with the employee and giving him wor assignment after suspecting that he had forged purchase receipts. In this situation, the employee was forced to leave the employer0s compound with his family and to transfer to a nearby place. The employee0s act of leaving his employer0s premises was in reality not his choice but a situation created by the employer. CRC Agri%ultural +rading and Rolando #. Catindig vs. National Labor Relations Commission and Roberto 3bias, G.R. No. 1((664, <e%ember 3, !!*. Dismissal; constructive dismissal. Constructive dismissal e6ists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment. In this case, the employee, while still employed with the company, was compelled to resign and forced to go on leave. 3e was not allowed to participate in the activities of the company. 3is salary was no longer remitted to him. 3is subordinates were directed not to report to him and the company directed one of its district managers to ta e over his position and do his functions without prior notice to him. These discriminatory acts were calculated to ma e the employee feel that he is no longer welcome nor needed in the company short of sending him an actual notice of termination. The Court held that the employer constructively dismissed the employee from service. Ramon #. Formantes vs. <un%an &$arma%euti%als, &$ils., 'n%., G.R. No. 1(!661, <e%ember 4, !!*. Dismissal; corporate officer; %urisdiction. (rom the documents submitted by the company, petitioner was a director and officer of Slimmers 8orld. The charges of illegal suspension, illegal dismissal, unpaid commissions, reinstatement and bac wages imputed by petitioner against the company fall s*uarely within the ambit of intra2corporate disputes. In a number of cases, the Court has held that a corporate officer0s dismissal is always a corporate act, or an intra2corporate controversy which arises between a stoc holder and a corporation. The *uestion of remuneration involving a stoc holder and officer, not a mere employee, is not a simple labor problem but a matter that comes within the area of corporate affairs and

management and is a corporate controversy in contemplation of the Corporation Code. It is a settled rule that %urisdiction over the sub%ect matter is conferred by law. The determination of the rights of a director and corporate officer dismissed from his employment as well as the corresponding liability of a corporation, if any, is an intra2corporate dispute sub%ect to the %urisdiction of the regular courts. Thus, the appellate court correctly ruled that it is not the !"#C but the regular courts which have %urisdiction over the present case. Leslie 3>ol vs. 7limmers 6orld 'nternational, et al., G.R. No. 16!146, <e%ember 11, !!*. Dismissal; due process; opportunity to be heard. 'lthough the employee, during some parts of the trial proceedings before the "abor 'rbiter was not represented by a member of the bar, he was given reasonable opportunity to be heard and submit evidence to support his arguments, through the medium of pleadings filed in the labor tribunals. 3e was also able to present his version of the Magat incident during his direct e6amination conducted by his lawyer 'tty. Bannette Ine1. Thus, he cannot claim that he was denied due process. Ramon #. Formantes vs. <un%an &$arma%euti%als, &$ils., 'n%., G.R. No. 1(!661, <e%ember 4, !!*. Dismissal; %ust cause; separation pay. The liberality of the law can never be e6tended to the unworthy and undeserving. In several instances, the policy of social %ustice has compelled this Court to accord financial assistance in the form of separation pay to a legally terminated employee. This liberality, however, is not without limitations. Thus, when the manner and circumstances by which the employee committed the act constituting the ground for his dismissal show his perversity or depravity, no sympathy or mercy of the law can be invo ed. 8e have e6amined the records which indeed show that the employee0s unauthori1ed absences as well as tardiness are habitual despite having been penali1ed for past infractions. In Gustilo v. 6yet$ &$ilippines, 'n% . I4.3 &$il. 6*, (. 4 !!45J, we held that a series of irregularities when put together may constitute serious misconduct. 8e also held that gross neglect of duty becomes serious in character due to fre*uency of instances. Serious misconduct is said to be a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and indicative of wrongful intent and not mere error of %udgment. 4ddly, the employee never advanced any valid reason to %ustify his absences. The employee0s intentional and willful violation of company rules shows his utter disregard of his wor and his employer0s interest. Indeed, there can be no good faith in intentionally and habitually incurring ine6cusable absences. 3ence, he is not entitled to severance pay. Arsenio 7. @uiambao vs. 2anila Ele%tri% Company, G.R. No. 1(1! 3, <e%ember 1., !!*. Dismissal; %ust cause; se6ual abuse. 's a manager, the employee en%oyed the full trust and confidence of the company and his subordinates. &y committing se6ual abuse against his subordinate, he clearly demonstrated his lac of fitness to continue wor ing as a managerial employee and deserves the punishment of dismissal from the service. Ramon #. Formantes vs. <un%an &$arma%euti%als, &$ils., 'n%., G.R. No. 1(!661, <e%ember 4, !!*. Dismissal; separation pay in lieu of reinstatement. )nder 'rticle /E? of the "abor Code, the illegally dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges and to his full bac wages, inclusive of allowances and other benefits or their monetary e*uivalent, computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Thus, an illegally dismissed employee is entitled to two reliefs+ bac wages and reinstatement. 8here reinstatement is no longer viable as an option, bac wages shall be computed from the time of the illegal termination up to the finality of the decision. Separation pay e*uivalent to one month salary for every year of service should li ewise be awarded as an alternative in case reinstatement in not possible.

In the present case, reinstatement is no longer feasible because of the strained relations between the employee and the employer. Time and again, the Court has recogni1ed that strained relations between the employer and employee is an e6ception to the rule re*uiring actual reinstatement for illegally dismissed employees for the practical reason that the already e6isting antagonism will only fester and deteriorate, and will only worsen with possible adverse effects on the parties, if we shall compel reinstatement; thus, the use of a viable substitute that protects the interests of both parties while ensuring that the law is respected. The payment of separation pay is the better alternative as it liberates the employee from what could be a highly hostile wor environment, while releasing the employer from the grossly unpalatable obligation of maintaining in their employ a wor er they could no longer trust. CRC Agri%ultural +rading and Rolando #. Catindig vs. National Labor Relations Commission and Roberto 3bias, G.R. No. 1((664, <e%ember 3, !!*. Dismissal; twin re*uirements. 8ell settled is the dictum that the twin re*uirements of notice and hearing constitute the essential elements of due process in the dismissal of employees. It is a cardinal rule in our %urisdiction that the employer must furnish the employee with two written notices before the termination of employment can be affected+ ,a. the first apprises the employee of the particular acts or omissions for which his dismissal is sought; and ,b. the second informs the employee of the employer0s decision to dismiss him. The barrage of letters sent to petitioner, starting from a letter dated 'pril //, -??7 until his termination on May -?, -??7, was belatedly made and apparently done in an effort to show that petitioner was accorded the notices re*uired by law in dismissing an employee. 's observed by the "abor 'rbiter in her decision, prior to those letters, the employee was already constructively dismissed. Since the dismissal, although for a valid cause, was done without due process of law, the employer should indemnify the employee with nominal damages in the amount of $=F,FFF.FF.Ramon #. Formantes vs. <un%an &$arma%euti%als, &$ils., 'n%., G.R. No. 1(!661, <e%ember 4, !!*. Dismissal; two2notice re*uirement. To %ustify the dismissal of an employee for a %ust cause, the employer must furnish the wor er with two written notices. The first is the notice to apprise the employee of the particular acts or omissions for which his dismissal is sought. This may be loosely considered as the charge against the employee. The second is the notice informing the employee of the employer0s decision to dismiss him. This decision, however, must come only after the employee is given a reasonable period from receipt of the first notice within which to answer the charge, and ample opportunity to be heard and defend himself with the assistance of his representative, if he so desires. The re*uirement of notice is not a mere technicality, but a re*uirement of due process to which every employee is entitled. The employer clearly failed to comply with the two2notice re*uirement. !othing in the records shows that the company ever sent the employee a written notice informing him of the ground for which his dismissal was sought. It does not also appear that the company held a hearing where the employee was given the opportunity to answer the charges of abandonment. !either did the company send a written notice to the employee informing him that his service had been terminated and the reasons for the termination of his employment. )nder these facts, the respondent0s dismissal was illegal. CRC Agri%ultural +rading and Rolando #. Catindig vs. National Labor Relations Commission and Roberto 3bias, G.R. No. 1((664, <e%ember 3, !!*. Drug testing for employees; employer0s duty. It was $lantation &ay0s responsibility to ensure that the drug tests would be properly administered, the results thereof being the bases in terminating the employees0 services.

The employer failed to indubitably prove that the employees were guilty of drug use in contravention of its drug2free wor place policy amounting to serious misconduct. The employees are therefore deemed to have been illegally dismissed. &lantation #ay Resort H 7pa and EEren #elarmino vs. Romel 7. <ubri%o, et al., G.R. No. 1. 16, <e%ember 4, !!*. >mployee disability benefits. $ermanent disability refers to the inability of a wor er to perform his %ob for more than -/F days, regardless of whether he loses the use of any part of his body. 8hat determines the employee0s entitlement to permanent disability benefits is his inability to wor for more than -/F days. In the case at bar, it was only on (ebruary /F, /FF- that the Certificate of (itness for 8or was issued by Dr. "im, more than @ months from the time he was initially evaluated by the doctor on Buly /7, /FFF and after he underwent operation on 'ugust -C, /FFF. It is gathered from the documents emanating from the 4ffice of Dr. "im that the employee was seen by him from Buly /7, /FFF up to (ebruary /F, /FF- or a total of -= times; and e6cept for the medical reports dated (ebruary A, /FF- and (ebruary /F, /FF- ,when the doctor finally pronounced petitioner fit to wor ., Dr. "im consistently recommended that the employee continue his physical rehabilitation5therapy and revisit clinic on specific dates for re2evaluation, thereby implying that the employee was not yet fit to wor . :iven a seafarer0s entitlement to permanent disability benefits when he is unable to wor for more than -/F days, the failure of the company2designated physician to pronounce the employee fit to wor within the -/F2day period entitles him to permanent total disability benefit in the amount of )SV@F,FFF.FF. Leopoldo Abante vs. A,G7 Fleet 2anagement 2anila and8or Guy <omingo A. 2a%apayag, Aristian Ger$ard ,ebsens 7>ipsrenderi A87, G.R. No. 1. 43!, <e%ember 4, !!*. >6istence of employer2employee relationship. The elements to determine the e6istence of an employment relationship are+ ,-. the selection and engagement of the employee; ,/. the payment of wages; ,=. the power of dismissal; and ,7. the employer0s power to control the employee0s conduct. The most important element is the employer0s control of the employee0s conduct, not only as to the result of the wor to be done, but also as to the means and methods to accomplish it. 'll the four elements are present in this case. First, the company engaged the services of the wor er in -??A. 7e%ond, the company paid the wor er a daily wage of $-EA.FF, with allowances ranging from $-7F.FF to $/FF.FF per day. The fact that the wor er was paid under a ;no wor no pay< scheme, assuming this claim to be true, is not significant. The ;no wor no pay< scheme is merely a method of computing compensation, not a basis for determining the e6istence or absence of employer2employee relationship. +$ird, the company0s power to dismiss the wor er was inherent in the fact that it engaged the services of the wor er as a driver. Finally, a careful review of the record shows that the wor er performed his wor as driver under the petitioners0 supervision and control. The company determined how, where, and when the wor er performed his tas . They, in fact, re*uested the wor er to live inside their compound so he ,the wor er. could be readily available when the company needed his services. )ndoubtedly, the company e6ercised control over the means and methods by which the wor er accomplished his wor as a driver. CRC Agri%ultural +rading and Rolando #. Catindig vs. National Labor Relations Commission and Roberto 3bias, G.R. No. 1((664, <e%ember 3, !!*. "abor2only contracting. The contract between the principal and the contractor is not the final word on how the contracted wor ers relate to the principal and the purported contractor; the relationships must be tested on the basis of how they actually operate.

The legitimate %ob contractor must have the capitali1ation and e*uipment to underta e the sale and distribution of the manufacturer0s products, and must do it on its own using its own means and selling methods. >ven before going into the realities of wor place operations, the Court of 'ppeals found that the service contracts themselves provide ample leads into the relationship between the company, on the one hand, and $eerless and >6cellent, on the other. The Court of 'ppeals noted that both the $eerless and the >6cellent contracts show that their obligation was solely to provide the company with ;the services of contractual employees,< and nothing more. These contracted services were for the handling and delivery of the company0s products and allied services. (ollowing D.4. -C2F/ and the contracts that spo e purely of the supply of labor, the Court of 'ppeals concluded that $eerless and >6cellent were labor2only contractors unless they could prove that they had the re*uired capitali1ation and the right of control over their contracted wor ers. The contractors were not independently selling and distributing company products, using their own e*uipment, means and methods of selling and distribution; they only supplied the manpower that helped the company in the handing of products for sale and distribution. In the conte6t of D.4. -C2F/, the contracting for sale and distribution as an independent and self2contained operation is a legitimate contract, but the pure supply of manpower with the tas of assisting in sales and distribution controlled by a principal falls within prohibited labor2only contracting. Co%a Cola #ottlers &$ilippines, 'n%. vs. Ri%>y E. <ela CruC, et al., G.R. No. 1.4*((, <e%ember (, !!*. 4utsourcing. The employer was within its right in entering the forwarding agreements with the forwarders as an e6ercise of its management prerogative. The employer0s declared ob%ective for the arrangement is to achieve greater economy and efficiency in its operations D a universally accepted business ob%ective and standard that the union has never *uestioned. In 2eral%o v. @uisumbing,IG.R. No. 1 ()*., ,anuary (, 1***J the Court %oined this universal recognition of outsourcing as a legitimate activity when it held that a company can determine in its best %udgment whether it should contract out a part of its wor for as long as the employer is motivated by good faith; the contracting is not for purposes of circumventing the law; and does not involve or be the result of malicious or arbitrary action. +emi% Automotive &$ilippines, 'n%. vs. +emi% Automotive &$ilippines, 'n%. Employees /nionBFF6, G.R. No. 1.6*6), <e%ember 3, !!*. #egulations; retroactivity of $4>' Circular. #especting the appellate court0s ruling that it is $4>' Memo Circular !o. AA, series of -??@ which is applicable and not Memo Circular !o. ?, series of /FFF, apropos is the ruling in 7eagull 2aritime Corporation v. <ee IG.R. No. 16)1)6, April , !!(J involving employment contract entered into in -???, before the promulgation of $4>' Memo Circular !o. ?, series of /FFF or the use of the new $4>' Standard >mployment Contract, li e that involved in the present case. In said case, the Court applied the /FFF Circular in holding that while it is the company2designated physician who must declare that the seaman suffered permanent disability during employment, it does not deprive the seafarer of his right to see a second opinion which can then be used by the labor tribunals in awarding disability claims. Leopoldo Abante vs. A,G7 Fleet 2anagement 2anila and8or Guy <omingo A. 2a%apayag, Aristian Ger$ard ,ebsens 7>ipsrenderi A87, G.R. No. 1. 43!, <e%ember 4, !!*. Termination; abandonment. 'bandonment of wor , or the deliberate and un%ustified refusal of an employee to resume his employment, is a %ust cause for employment termination under paragraph ,b. of 'rticle /C/ of the "abor Code, since it constitutes neglect of duty. The %urisprudential rule is that abandonment is a matter of intention that cannot be lightly presumed from e*uivocal acts. To constitute abandonment, two elements must concur+ ,-. the failure to report for wor or absence without valid or %ustifiable reason, and ,/. a clear intent, manifested through overt acts, to sever the employer2employee relationship. The employer

bears the burden of showing a deliberate and un%ustified refusal by the employee to resume his employment without any intention of returning. In the present case, the employer did not adduce any proof to show that the employee clearly and une*uivocally intended to abandon his %ob or to sever the employer2employee relationship. Moreover, the filing of the complaint for illegal dismissal on Bune //, /FF7 strongly spea s against the employer0s charge of abandonment; it is illogical for an employee to abandon his employment and, thereafter, file a complaint for illegal dismissal. CRC Agri%ultural +rading and Rolando #. Catindig vs. National Labor Relations Commission and Roberto 3bias, G.R. No. 1((664, <e%ember 3, !!*. Termination; reorgani1ation. 'bsent e6plicit statutory authority, the Court cannot sustain the grant of separation pay and retirement benefits from one single act of involuntary separation from the service, lest there be duplication of purpose and depletion of government resources. 8ithin the conte6t of government reorgani1ation, separation pay and retirement benefits arising from the same cause, are in consideration of the same services and granted for the same purpose. 8hether denominated as separation pay or retirement benefits, these financial benefits reward government service and provide monetary assistance to employees involuntarily separated due to bona Eide reorgani1ation. EEren 2. 1errera, et al. vs. National &o?er Corporation, et al., G.R. No. 166)(!, <e%ember 1., !!*. Termination; reorgani1ation. The grant of retirement benefits to the employees in addition to the separation pay they have already received effectively amounts to additional compensation for the same services. )nless specifically authori1ed by law, such additional compensation is not allowed under Section C, 'rticle IO2& of the Constitution. There is only one act of e6it from the service and only one service to e6it from. >mployees who chose separation from the service under the !$C0s restructuring plan never really e6ercised the right to optionally retire; the earlier termination of their employment denied them the opportunity to optionally retire. Conse*uently, no retirement pay ever accrued in their favor. This means, in concrete terms, that the employees who opted to be separated from the service under the !$C restructuring plan and who have received separation pay under #' ?-=@, cannot also be considered to have separately e6ited from the same service through optional retirement under C' -C@, entitling them to separate retirement benefits under this law. #' ?-=@ provides for separation benefits in the alternative and does not offer both. 4ptional retirement clearly is a mere e6pectancy until availed of by those who are *ualified to e6ercise the option to retire. If not ta en because the employee chose the separation pac age under #' ?-=@, then optional retirement under C' -C@ simply remained an e6pectancy that never materiali1ed and is now forever lost. To put it differently, given one and the same e6it from the one and the same service for which only one separation benefit is provided, there can be no actual retirement under C' -C@ after e6it via the #' ?-=@ route has been ta en; optional retirement under C' -C@ has then become the road not ta en. EEren 2. 1errera, et al. vs. National &o?er Corporation, et al., 7eparate Con%urring 3pinion oE ,. #rion, G.R. No. 166)(!, <e%ember 1., !!*. Termination; retrenchment. #etrenchment is the termination of employment initiated by the employer through no fault of and without pre%udice to the employees, it is resorted to during periods of business recession, industrial depression, or seasonal fluctuations or during lulls occasioned by lac of orders, shortage of materials, conversion of the plant for a new production program or the introduction of new methods or more efficient machinery or of automation. It is a management prerogative resorted to, to avoid or minimi1e business losses.

To effect a valid retrenchment, the following elements must be present+ ,-. the retrenchment is reasonably necessary and li ely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, and real, or only if e6pected, are reasonably imminent as perceived ob%ectively and in good faith by the employer; ,/. the employer serves written notice both to the employee5s concerned and the Department of "abor and >mployment at least a month before the intended date of retrenchment; ,=. the employer pays the retrenched employee separation pay in an amount prescribed by the Code; ,7. the employer e6ercises its prerogative to retrench in good faith; and ,A. the employer uses fair and reasonable criteria in ascertaining who would be retrenched or retained. The losses must be supported by sufficient and convincing evidence. The normal method of discharging this burden of proof is the submission of financial statements duly audited by independent e6ternal auditors. (or failure of 'sia onstru t to clearly and satisfactorily substantiate its financial losses, the dismissal of the employee on account of retrenchment is un%ustified. -irgilio G. Anabe vs. Asian Constru%tion 4A7'AA3N7+R/A+5, et al., G.R. No. 1.3 33, <e%ember 3, !!*. )nion; cancellation of union registration; grounds. (or the purpose of de2certifying a union, it must be shown that there was misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by2laws or amendments thereto; the minutes of ratification; or, in connection with the election of officers, the minutes of the election of officers, the list of voters, or failure to submit these documents together with the list of the newly elected2appointed officers and their postal addresses to the &ureau of "abor #elations. The bare fact that two signatures appeared twice on the list of those who participated in the organi1ational meeting would not provide a valid reason to cancel the union0s certificate of registration. The cancellation of a union0s registration doubtless has an impairing dimension on the right of labor to self2 organi1ation. (or fraud and misrepresentation to be grounds for cancellation of union registration under the "abor Code, the nature of the fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a ma%ority of union members. 2ari?asa 7iam Cerami%s, 'n%. vs. +$e 7e%retary oE t$e <epartment oE Labor and Employment, et al., G.R. No. 1.331(, <e%ember 1, !!*. )nion; membership re*uirement. 8hile it is true that the withdrawal of support may be considered as a resignation from the union, the fact remains that at the time of the union0s application for registration, the affiants were members of the union and they comprised more than the re*uired /FN membership for purposes of registration as a labor union. 'rticle /=7 of the "abor Code merely re*uires a /FN minimum membership during the application for union registration. It does not mandate that a union must maintain the /FN minimum membership re*uirement all throughout its e6istence. 2ari?asa 7iam Cerami%s, 'n%. vs. +$e 7e%retary oE t$e <epartment oE Labor and Employment, et al., G.R. No. 1.331(, <e%ember 1, !!*. Labor Proced re 'ppeal; appeal bond a %urisdictional re*uirement . The Court has always stressed that 'rticle //=, which prescribes the appeal bond re*uirement, is a rule of %urisdiction and not of procedure. There is little leeway for condoning a liberal interpretation thereof, and certainly none premised on the ground that its re*uirements are mere technicalities. It must be emphasi1ed that there is no inherent right to an appeal in a labor case, as it arises solely from grant of statute, namely, the "abor Code. (or the same reason, the Court has repeatedly emphasi1ed that the re*uirement for posting the surety bond is not merely procedural but %urisdictional and cannot be trifled with. !on2compliance with such legal re*uirements is fatal and has the effect

of rendering the %udgment final and e6ecutory. 1ilario 7. RamireC vs. 1on. Court oE Appeals, et al., G.R. No. 1. 6 6, <e%ember 4, !!*. 'ppeal; appeal bond reduction. It is daylight2clear from the foregoing that while the bond may be reduced upon motion by the employer, this is sub%ect to the conditions that ,-. the motion to reduce the bond shall be based on meritorious grounds; and ,/. a reasonable amount in relation to the monetary award is posted by the appellant; otherwise, the filing of the motion to reduce bond shall not stop the running of the period to perfect an appeal. The *ualification effectively re*uires that unless the !"#C grants the reduction of the cash bond within the -F2day reglementary period, the employer is still e6pected to post the cash or surety bond securing the full amount within the said -F2day period. 1ilario 7. RamireC vs. 1on. Court oE Appeals, et al., G.R. No. 1. 6 6, <e%ember 4, !!*. 'ppeal; issues raised first time on appeal; e6ceptions . 8hile it is a well2settled rule, also applicable in labor cases, that issues not raised in proceedings below cannot be raised for the first time on appeal, there are e6ceptions thereto, among which are, for reasons of public policy or interest. The !"#C did not err in considering the issue of the veracity of the confirmatory tests even if the same was raised only in the employee0s Motion for #econsideration of the !"#C Decision, it being crucial in determining the validity of the employee0s dismissal from service. Technical rules of procedure are not strictly adhered to in labor cases. In the interest of substantial %ustice, new or additional evidence may be introduced on appeal before the !"#C. Such move is proper, provided due process is observed, as was the case here, by giving the opposing party sufficient opportunity to meet and rebut the new or additional evidence introduced. The Constitution no less directs the State to afford full protection to labor. To achieve this goal, technical rules of procedure shall be liberally construed in favor of the wor ing class in accordance with the demands of substantial %ustice. &lantation #ay Resort H 7pa and EEren #elarmino vs. Romel 7. <ubri%o, et al., G.R. No. 1. 16, <e%ember 4, !!*. 'ppeal; perfection. )nder the #ules, appeals involving monetary awards are perfected only upon compliance with the following mandatory re*uisites, namely+ ,-. payment of the appeal fees; ,/. filing of the memorandum of appeal; and ,=. payment of the re*uired cash or surety bond. The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the "abor 'rbiter. The intention of the lawma ers to ma e the bond a mandatory re*uisite for the perfection of an appeal by the employer is clearly e6pressed 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< in 'rticles //= of the "abor Code ma es it unmista ably plain that the lawma ers intended the posting of a cash or surety bond by the employer to be the essential and e6clusive means by which an employer0s appeal may be perfected. The word ;may< refers to the perfection of an appeal as optional on the part of the defeated party, but not to the compulsory posting of an appeal bond, if he desires to appeal. The meaning and the intention of the legislature in enacting a statute must be determined from the language employed; and where there is no ambiguity in the words used, then there is no room for construction. Clearly, the filing of the bond is not only mandatory but also a %urisdictional re*uirement that must be complied with in order to confer %urisdiction upon the !"#C. !on2compliance with the re*uirement renders the decision of the "abor 'rbiter final and e6ecutory. This re*uirement is intended to assure the wor ers that if they prevail in the case, they will receive the money %udgment in their favor upon

the dismissal of the employer0s appeal. 1ilario 7. RamireC vs. 1on. Court oE Appeals, et al., G.R. No. 1. 6 6, <e%ember 4, !!*. Illegal dismissal and rehabilitation proceedings. The term ;claim,< as contemplated in Section @ ,c., refers to debts or demands of a pecuniary nature. It is the assertion of rights for the payment of money. 3ere, petitioners have pecuniary claimsHthe payment of separation pay and moral and e6emplary damages. In Rubber?orld 4&$ils.5, 'n%. v. NLRC I36) &$il. (3 41***5J, we held that a labor claim is a ;claim< within the contemplation of $D ?F/2', as amended. This is consistent with the Interim #ules of $rocedure on Corporate #ehabilitation which came out in /FFF. Thus, labor claims are included among the actions suspended upon the placing under rehabilitation of employer2corporations. The suspensive effect of the stay order is not time2bound. 's we held in Rubber?orld, it continues to be in effect as long as reasonably necessary to accomplish its purpose. Gina 2. +iang%o and 7alva%ion ,enny 2anego vs. /ni?ide 7ales 6are$ouse Club, 'n%. and ,immy Go?, G.R. No. 16.6*(, <e%ember 14, !!*. !CM& appeal. #ule 7= of the #ules of Court under which petitioners filed their petition before the Court of 'ppeals applies to awards, %udgments, final orders or resolutions of or authori1ed by any *uasi2%udicial agency in the e6ercise of its *uasi2 %udicial functions. :iven !CM&0s functions, it cannot be considered a *uasi2%udicial agency. 3ence, its decisions or that of its authori1ed officer cannot be appealed either through a petition for review under #ule 7= or under #ule @A of the #evised #ules of Court. ,uanito +abigue, et al. vs. 'nternational Copra E"port Corporation 4'N+ERC35, G.R. No. 1.333), <e%ember 3, !!*. Stri es and loc outs; assumption and certification order; mandatory ands immediately e6ecutory. 'rticles /@= ,g. and /@7 of the "abor Code have been enacted pursuant to the police power of the State. The grant of plenary powers to the Secretary of "abor ma es it incumbent upon him to bring about soonest, a fair and %ust solution to the differences between theramiemployer and the employees, so that the damage such labor dispute might cause upon the national interest may be minimi1ed as much as possible, if not totally averted, by avoiding stoppage of wor or any lag in the activities of the industry or the possibility of those contingencies that might cause detriment to the national interest. In order to effectively achieve such end, the assumption or certification order shall have the effect of automatically en%oining the intended or impending stri e or loc out. Moreover, if one has already ta en place, all stri ing wor ers shall immediately return to wor , and the employer shall immediately resume operations and readmit all wor ers under the same terms and conditions prevailing before the stri e or loc out. 'ssumption and certification orders are e6ecutory in character and are to be strictly complied with by the parties, even during the pendency of any petition *uestioning their validity. #egardless therefore of its motives, or of the validity of its claims, KSS "aboratories must readmit all stri ing employees and give them bac their respective %obs. 'ccepting bac the wor ers in this case is not a matter of option, but of obligation mandated by law for KSS "aboratories to faithfully comply with. Its compulsory character is mandated, not to cater to a narrow segment of society, or to favor labor at the e6pense of management, but to serve the greater interest of society by maintaining the economic e*uilibrium. Certainly, the determination of who among the stri ers could be admitted bac to wor cannot be made to depend upon the discretion of employer, lest the certification or assumption2of2%urisdiction orders are stripped of their coercive power that is necessary for attaining their laudable ob%ective. The return2to2wor order does not interfere with the management0s prerogative, but merely regulates it when, in the e6ercise of such right, national interests will be affected. The rights

granted by the Constitution are not absolute. They are still sub%ect to control and limitation to ensure that they are not e6ercised arbitrarily. The interests of both the employers and employees are intended to be protected and not one of them is given undue preference. ;77 Employees /nionB&$ilippine +ransport and General 3rganiCation vs. ;77 Laboratories, 'n%., G.R. No. 1))1 ), <e%ember 4, !!*.

NO(E#BER 2009 Collective bargaining agreement; e6clusive bargaining status. 8hile the parties may agree to e6tend the C&'0s original five2year term together with all other C&' provisions, any such amendment or term in e6cess of five years will not carry with it a change in the union0s e6clusive collective bargaining status. &y e6press provision of the above2*uoted 'rticle /A=2', the e6clusive bargaining status cannot go beyond five years and the representation status is a legal matter not for the wor place parties to agree upon. In other words, despite an agreement for a C&' with a life of more than five years, either as an original provision or by amendment, the bargaining union0s e6clusive bargaining status is effective only for five years and can be challenged within si6ty ,@F. days prior to the e6piration of the C&'0s first five years. In the present case, the C&' was originally signed for a period of five years, i.e., from (ebruary -, -??C to Banuary =F, /FF=, with a provision for the renegotiation of the C&'0s other provisions at the end of the =rd year of the five2year C&' term. Thus, prior to Banuary =F, /FF- the wor place parties sat down for renegotiation but instead of confining themselves to the economic and non2economic C&' provisions, also e6tended the life of the C&' for another four months, i.e., from the original e6piry date on Banuary =F, /FF= to May =F, /FF=. 's discussed above, this negotiated e6tension of the C&' term has no legal effect on the (GC")2$T:840s e6clusive bargaining representation status which remained effective only for five years ending on the original e6piry date of Banuary =F, /FF=. Thus, si6ty days prior to this date, or starting December /, /FF/, S'!'M'2SI:"4 could properly file a petition for certification election. Its petition, filed on Banuary /-, /FF= or nine ,?. days before the e6piration of the C&' and of (GC")2$T:840s e6clusive bargaining status, was seasonably filed. 8e thus find no error in the appellate court0s ruling reinstating the D4"> order for the conduct of a certification election. F-C Labor /nionB&$ilippine +ransport and General 6or>ers 3rganiCation 4F-CL/B&+G635 -s. 7amaBsamang Nag>a>aisang 2anggaga?a sa F-CB7olidarity oE 'ndependet and General Labor 3rganiCation 47ANA2ABF-CB7'GL35, G.R. No. 1(6 4*, November (, !!*. Dismissal; attorney0s fees. In San Miguel Corporation v. 'balla, thr Court held that in actions for recovery of wages or where an employee was forced to litigate and thus incur e6penses to protect his rights and interests, a ma6imum of -FN of the total monetary award by way of attorney0s fees is %ustifiable under 'rticle --- of the "abor Code; Section C, #ule GIII of &oo III of the 4mnibus #ules Implementing the "abor Code; and paragraph E, 'rticle //FC of the Civil Code. The award of attorney0s fees is proper and there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. There need only be a showing that the lawful wages were not paid accordingly. &$ilippine Long <istan%e +elep$one Company vs. 'no%en%io #. #erbano, ,r., G.R. No. 16)1**, November (, !!*. SEPTE#BER 2009 Dismissal; abandonment. 'bandonment is a form of neglect of duty, one of the %ust causes for an employer to terminate an employee. It is a hornboo precept that in illegal dismissal cases, the employer bears the burden of proof. (or a valid

termination of employment on the ground of abandonment, "ucinario must prove, by substantial evidence, the concurrence of petitioner0s failure to report for wor for no valid reason and his categorical intention to discontinue employment. "ucinario, however, failed to establish any overt act on the part of petitioner to show his intention to abandon employment. $etitioner, after being informed of his alleged shortages in collections and despite his relegation to that of company custodian, still reported for wor . 3e later applied for a 72day leave of absence. 4n his return, he discovered that his name was erased from the logboo , was refused entry into the company premises, and learned that his application for a 72day leave was not approved. 3e thereupon e6erted efforts to communicate with "ucinario on the status of his employment, but to no avail. These circumstances do not indicate abandonment. That petitioner immediately filed the illegal dismissal complaint with prayer for reinstatement should dissipate any doubts that he wanted to return to wor . 8hat thus surfaces is that petitioner was constructively dismissed. !o actual dismissal might have occurred in the sense that petitioner was not served with a notice of termination, but there was constructive dismissal, petitioner having been placed in a position where continued employment was rendered impossible and unreasonable by the circumstances indicated above. 3dilon L. 2artineC vs. #H# Fis$ #ro>er and8or Norberto 2. Lu%inario, G.R. No. 1(**.), 7eptember 1., !!*. Dismissal; burden of proof. 8hile the employer bears the burden in illegal dismissal cases to prove that the termination was for valid or authori1ed cause, the employee must first establish by substantial evidence the fact of dismissal from service. This petitioner failed to discharge. 3e, in fact, failed to refute respondent0s claim that it sent him a Giolation Memorandum, which was duly received by him on 'pril -A, /FF=, and a subse*uent Memorandum via registered mail, re*uiring him to e6plain his habitual tardiness on the therein indicated dates but that he failed to comply therewith. Constructive dismissal contemplates, among other things, *uitting because continued employment is rendered impossible, unreasonable or unli ely, or a demotion in ran or a diminution of pay. It clearly e6ists when an act of clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee, leaving him with no option but to forego his continued employment. !ot any of these circumstances e6ists to call for a ruling that petitioner was constructively dismissed. Romero 2ontederamos vs. +riB/nion 'nternational Corporation, G.R. No. 1(6(!!!, 7eptember 4, !!*. Dismissal; burden of proof. It is well2settled that in termination cases, the burden of proof rests upon the employer to show that the dismissal was for a %ust and valid cause and failure to discharge the same would mean that the dismissal is not %ustified and therefore illegal. 3ence, in arguing that Sabulao abandoned his wor , it is incumbent upon the petitioners to prove+ ,-. that the employee failed to report for wor or had been absent without valid or %ustifiable reason; and ,/. that there must have been a clear intention to sever the employer2employee relationship as manifested by some overt acts. Clearly, %urisprudence dictates that the burden of proof to show that there was un%ustified refusal to go bac to wor rests on the employer. The !"#C, as affirmed by the Court of 'ppeals, correctly found that petitioners failed to substantiate its claim that Sabulao abandoned his wor . !o evidence was presented to prove that Sabulao clearly intended to sever the employer2employee relationship as manifested by some overt acts. 's regards petitioners0 allegation that Sabulao is a field personnel and therefore not entitled to the money claims awarded by the !"#C, suffice it to state that the issue was raised only before the Court of 'ppeals in contravention to the rule that *uestions not raised before the tribunals a *uo cannot be raised for the first time on appeal. 's such, it deserves no

consideration by this Court. +a%loban Far East 2ar>eting Corporation, et al. vs. +$e Court oE Appeals, et al., G.R. No. 1. 3 !, 7eptember 11, !!*. Dismissal; due process. The essence of due process is simply an opportunity to be heard or, as applied to administrative proceedings, an opportunity to e6plain one0s side or an opportunity to see a reconsideration of the action or ruling complained of. 8hat the law prohibits is absolute absence of the opportunity to be heard, hence, a party cannot feign denial of due process where he had been afforded the opportunity to present his side. ' formal or trial type hearing is not at all times and in all instances essential to due process, the re*uirements of which are satisfied where the parties are afforded fair and reasonable opportunity to e6plain their side of the controversy. In the present case, petitioners were, among other things, given several written invitations to submit themselves to $"DT0s Investigation )nit to e6plain their side, but they failed to heed them. ' hearing, which petitioners attended along with their union MM$ representatives, was conducted on Bune /A, /FF- during which the principal witnesses to the incident were presented. $etitioners were thus afforded the opportunity to confront those witnesses and present evidence in their behalf, but they failed to do so. Rolando &la%ido and Edgardo Caragay vs. National Labor Relations Commission and &$ilippine Long <istan%e +elep$one Company, 'n%orporated, G.R. No. 1.!..., 7eptember 1., !!*. Dismissal; misconduct. &y sleeping on the %ob and leaving his wor area without prior authori1ation, Tomada did not merely disregard company rules. Tomada, in effect, issued an open invitation for others to violate those same company rules. Indeed, considering the presence of trainees in the building and Tomada0s acts, Tomada failed to live up to his company0s reasonable e6pectations. Tomada0s offenses cannot be e6cused upon a plea of being a ;first offense,< or have not resulted in pre%udice to the company in any way. !o employer may rationally be e6pected to continue in employment a person whose lac of morals, respect and loyalty to his employer, regard for his employer0s rules, and appreciation of the dignity and responsibility of his office, has so plainly and completely been bared. Misconduct is improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of %udgment. The misconduct to be serious must be of grave and aggravated character and not merely trivial or unimportant. Such misconduct, however serious, must nevertheless be in connection with the employee0s wor to constitute %ust cause for his separation. Thus, for misconduct or improper behavior to be a %ust cause for dismissal, ,-. it must be serious; ,/. it must relate to the performance of the employee0s duties; and ,=. it must show that the employee has become unfit to continue wor ing for the employer. Indeed, an employer may not be compelled to continue to employ such person whose continuance in the service would be patently inimical to his employer0s interest. Eduardo 2. +omada, 7r. vs. RF2 CorporationB #a>ery Flour <ivision, et al., G.R. No. 163 (!, 7eptember 11, !!*. Dismissal; redundancy. The separation of the petitioner by reason of redundancy was supported by the evidence on record. She was separated from the service after the respondent0s reorgani1ation where her position as 'dministrator was declared redundant. She was served notice within the statutory period of thirty ,=F. days and so was the D4">2!C#. The petitioner was assured of all the benefits under the law. The petitioner imputes bad faith and malice on the respondent in declaring her position as 'dministrator redundant, but failed to present convincing proof that the respondent abused its prerogative in terminating her employment or that it was motivated by ill2will in doing so. It was a business decision arrived at in the face of financial losses being suffered by the company at the time. 2iriam #. Elle%%ion vda.

<e Le%%iones vs. National Labor Relations Commission, et al., G.R. No. 1.4(3), 7eptember 1(, !!*. Dismissal; retrenchment. The burden of proving the validity of retrenchment is on the petitioner. >vidence does not sufficiently establish that petitioner had incurred losses that would %ustify retrenchment to prevent further losses. The Comparative Income Statement for the year -??@ and for the months of (ebruary to Bune -??E which petitioner submitted did not conclusively show that petitioner had suffered financial losses. In fact, records show that from Banuary to Buly -??E, petitioner hired a total of --7 new employees assigned in the petitioner0s stores located in the different places of the country. Em%or, 'n%orporated vs. 2a. Lourdes <. 7ienes, G.R. No. 1) 1!1, 7eptember ., !!*. Dismissal; retrenchment. #etrenchment to avoid or minimi1e business losses is a %ustified ground to dismiss employees under 'rticle /C= of the "abor Code. The employer, however, bears the burden to prove such ground with clear and satisfactory evidence, failing which the dismissal on such ground is un%ustified. #io @uest 2ar>eting 'n%. and8or ,ose L. Co vs. Edmund Rey, G.R. No. 1.1)!3, 7eptember 1., !!*. >mployee benefits; retirement. It is settled that entitlement of employees to retirement benefits must specifically be granted under e6isting laws, a collective bargaining agreement or employment contract, or an established employer policy. !o law or collective bargaining agreement or other applicable contract, or an established company policy was e6isting during respondents0 employment entitling them to the $/FF,FFF lump2sum retirement pay. $etitioner was not thus obliged to grant them such pay. AimberlyBClar> &$ilippines, 'n%. vs. Nora <imayuga, et al. G.R. No. 1(((!), 7eptember 1., !!*. >mployee benefits; suicide. The general rule is that the employer is liable to pay the heirs of the deceased seafarer for death benefits once it is established that he died during the effectivity of his employment contract. 3owever, the employer may be e6empted from liability if he can successfully prove that the seafarer0s death was caused by an in%ury directly attributable to his deliberate or willful act. In sum, respondents0 entitlement to any death benefits depends on whether the evidence of the petitioners suffices to prove that the deceased committed suicide; the burden of proof rests on his employer. Great 7out$ern 2aritime 7ervi%es Corp., et al. vs. Leonila 7urigao, et al., G.R. No. 1.3646, 7eptember 1., !!*. >mployer2employee relationship; e6istence. The Contract between the Cooperative and D(I, far from being a %ob contracting arrangement, is in essence a business partnership that parta es of the nature of a %oint venture. The rules on %ob contracting are, therefore, inapposite. The Court may not alter the intention of the contracting parties as gleaned from their stipulations without violating the autonomy of contracts principle under 'rticle -=F@ of the Civil Code which gives the contracting parties the utmost liberality and freedom to establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good custom, public order or public policy. $etitioners0 claim of employment relationship with the Cooperative0s herein co2 respondents must be assessed on the basis of four standards, vi1+ ,a. the manner of their selection and engagement; ,b. the mode of payment of their wages; ,c. the presence or absence of the power of dismissal; and ,d. the presence or absence of control over their conduct. Most determinative among these factors is the so2called ;control test.< There is nothing in the records which indicates the presence of any of the foregoing elements of an employer2employee relationship. There being no employer2employee relationship between petitioners and the Cooperative0s co2respondents, the latter are not solidarily liable with the

Cooperative for petitioners0 illegal dismissal and money claims. 3ldari%o 7. +raveDo, et al. vs. #obongon #anana Gro?ers 2ultiB&urpose Cooperative, et al., G.R. No. 164 !), 7eptember 3, !!*. #esignation. #esignation as ;the voluntary act of employees who are compelled by personal reasons to disassociate themselves from their employment. It must be done with the intention of relin*uishing an office, accompanied by the act of abandonment.< In this case, the evidence on record suggests that respondent did not voluntarily resign. The more logical conclusion, based on the evidence, is that respondent was then being forced or pressured to resign, which is tantamount to illegal dismissal. Casa Cebuana 'n%oporada, et al. vs. 'reneo &. Leuterio, G.R. No. 1(6!4!, 7eptember 4, !!*. #etirement. The line between voluntary and involuntary retirement is thin but it is one which this Court has drawn. Goluntary retirement cuts employment ties leaving no residual employer liability; involuntary retirement amounts to a discharge, rendering the employer liable for termination without cause. The employee0s intent is the focal point of analysis. In determining such intent, the fairness of the process governing the retirement decision, the payment of stipulated benefits, and the absence of badges of intimidation or coercion are relevant parameters. !othing in the records offends any of these criteria. Arsenio F. @uevedo, et al. vs. #enguet Ele%tri% Cooperative 'n%orporated, et al., G.R. No. 16.* (, 7eptember 11, !!*. 8aiver; binding effect. $etitioners bound themselves, in individually signed contracts, to ;forever release, waive and *uitclaim all causes of action or claims arising from or as a conse*uence< of their early retirement. $etitioners concede that this blan et stipulation bars this suit. 3owever, they see to avoid compliance by again pleading vitiated consent. 'lthough contracts e6ecuted in the conte6t of employment are imbued with public interest, triggering closer scrutiny, they remain contracts binding the parties to their terms. To e6cuse petitioners from complying with the terms of their waivers, they must locate their case within any of three narrow grounds+ ,-. the employer used fraud or deceit in obtaining the waivers; ,/. the consideration the employer paid is incredible and unreasonable; or ,=. the terms of the waiver are contrary to law, public order, public policy, morals or good customs or pre%udicial to a third person with a right recogni1ed by law. The preceding discussion on the voluntariness of petitioners0 retirement from service effectively removes these grounds beyond petitioners0 argumentative reach. 'ccordingly, petitioners, by the terms of their waivers, are barred from filing this suit. Arsenio F. @uevedo, et al. vs. #enguet Ele%tri% Cooperative 'n%orporated, et al., G.R. No. 16.* (, 7eptember 11, !!*. 8aiver; binding effect. 8hile *uitclaims e6ecuted by employees are commonly frowned upon as being contrary to public policy and are ineffective to bar claims for the full measure of their legal rights, where the person ma ing the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the *uitclaim is credible and reasonable, the transaction must be recogni1ed as being a valid and binding underta ing. In the case at bar, !ora and #osemarie are 'ccounting graduates. They have not alleged having been compelled to sign the *uitclaims, nor that the considerations thereof ,$-,F/7,--=.E= for !ora and $@C/,E/-./7 for #osemarie. are unconscionable. AimberlyBClar> &$ilippines, 'n%. vs. Nora <imayuga, et al. G.R. No. 1(((!), 7eptember 1., !!* 8aiver; union members. :oing now to the *uestion of whether respondent0s members0 individual acceptance of the award and the resulting payments made by petitioner operate as a ratification of the D4"> Secretary0s award which renders C'2 :.#. S$ !o. E/?@A moot, we find that such do not operate as a ratification of the D4"> Secretary0s award; nor a waiver of their right to receive further benefits, or what they may be entitled to under the law. The appellate court correctly ruled that

the respondent0s members were merely constrained to accept payment at the time. Christmas was then %ust around the corner, and the union members were in no position to resist the temptation to accept much2needed cash for use during the most auspicious occasion of the year. Time and again, we have held that necessitous men are not, truly spea ing, free men; but to answer a present emergency, will submit to any terms that the crafty may impose upon them. &esides, as individual components of a union possessed of a distinct and separate corporate personality, respondent0s members should reali1e that in %oining the organi1ation, they have surrendered a portion of their individual freedom for the benefit of all the other members; they submit to the will of the ma%ority of the members in order that they may derive the advantages to be gained from the concerted action of all. Since the will of the members is personified by its board of directors or trustees, the decisions it ma es should accordingly bind them. $recisely, a labor union e6ists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment. 8hat the individual employee may not do alone, as for e6ample obtain more favorable terms and conditions of wor , the labor organi1ation, through persuasive and coercive power gained as a group, can accomplish better. /niveristy oE 7anto +omas vs. 7ama$ang 2anggaga?a ng /7+ 472B/7+5, G.R. No. 16**4!, 7eptember 1., !!*. AUGUST 2009 Labor Law &enefits; bac wages. The issue on the proper computation of Mutuc0s bac wages has been rendered moot by our decision that Mutuc was validly dismissed. &ac wages is a relief given to an illegally dismissed employee. Since Mutuc0s dismissal is for an authori1ed cause, she is not entitled to bac wages. Lo?e, 'n%., et al. vs. Court oE Appeals and 'rma 2utu%, :.#. !os. -@7C-= S :.#. !o. -E7A?F, 'ugust -7, /FF?. &enefits; service charge. Since Dusit 3otel is e6plicitly mandated by the 'rticle ?@ of the "abor Code to pay its employees and management their respective shares in the service charges collected, the hotel cannot claim that payment thereof to its C/ employees constitute substantial compliance with the payment of >C4"' under 84 !o. ?. )ndoubtedly, the hotel employees0 right to their shares in the service charges collected by Dusit 3otel is distinct and separate from their right to >C4"'; gratification by the hotel of one does not result in the satisfaction of the other. &$ilippine 1oteliers, 'n%.8<usit 1otel Ni>>oB2anila vs. National /nion oE 6or>ers in 1otel, Restaurant, and Allied 'ndustries 4N/61ARA'NBA&LB '/F5 <usit 1otel Ni>>o C$apter, :.#. !o. -C-?E/, 'ugust /A, /FF?. Dismissal; illegal stri e. ' perusal of the "abor 'rbiter0s Decision, which was affirmed in toto by the !"#C, shows that on account of the staging of the illegal stri e, individual respondents were all deemed to have lost their employment, without distinction as to their respective participation. 4f the participants in the illegal stri e, whether they nowingly participated in the illegal stri e in the case of union officers or nowingly participated in the commission of violent acts during the illegal stri e in the case of union members, the records do not indicate. 8hile respondent Bulius Gargas was identified to be a union officer, there is no indication if he nowingly participated in the illegal stri e. The Court not being a trier of facts, the remand of the case to the !"#C is in order only for the purpose of determining the status in the )nion of individual respondents and their respective liability, if any. A. 7oriano Aviation vs. Employees Asso%iation oE A. 7oriano Aviation, et al., :.#. !o. -@@CE?, 'ugust -7, /FF?. Dismissal; misconduct. In its -7 (ebruary /FFF decision, $!&0s 'dministrative 'd%udication $anel found Maralit guilty of serious misconduct, gross violation of

ban rules and regulations, and conduct pre%udicial to the best interest of the ban . Maralit violated ban policies which resulted in the return of unfunded chec s amounting to $A7,?AF,FFF. 'ccordingly, $!& dismissed Maralit from the service with forfeiture of her retirement benefits effective at the close of business hours on =- December -??C. $!& may rightfully terminate Maralit0s services for a %ust cause, including serious misconduct. Serious misconduct is improper conduct, a transgression of some established and definite rule of action, a forbidden act, or a dereliction of duty. 3aving been dismissed for a %ust cause, Maralit is not entitled to her retirement benefits. Ester #. 2aralit vs. &$ilippine National #an>, :.#. !o. -@=ECC, 'ugust /7, /FF?. Dismissal; negligence. :ross negligence connotes want or absence of or failure to e6ercise even slight care or diligence, or the total absence of care. It evinces a thoughtless disregard of conse*uences without e6erting any effort to avoid them. To warrant removal from service, the negligence should not merely be gross, but also habitual. ' single or isolated act of negligence does not constitute a %ust cause for the dismissal of the employee. In B:& and 'ssociates, Inc. v. !ational "abor #elations Commission, the Court further declared that gross negligence connotes want of care in the performance of one0s duties. 3abitual neglect implies repeated failure to perform one0s duties for a period of time, depending upon the circumstances. (raud and willful neglect of duties imply bad faith of the employee in failing to perform his %ob, to the detriment of the employer and the latter0s business. C$ona Esta%io and Leopoldo 2anli%li% vs. &ampanga ', Ele%tri% Cooperative, 'n%. and Loliano E. Allas, :.#. !o. -C=-?@. 'ugust -?, /FF? Dismissal; negligence. )nder 'rticle /C/ ,b. of the "abor Code, negligence must be both gross and habitual to %ustify the dismissal of an employee. :ross negligence is characteri1ed by want of even slight care, acting or omitting to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally with a conscious indifference to conse*uences insofar as other persons may be affected. In the present case, petitioner, as respondent0s 'ccounting Manager, failed to discharge her important duty of remitting SSS5$hil3ealth contributions not once but *uadruple times, resulting in respondent0s incurring of penalties totaling $-C,ACF.7-, not to mention the employees5members0 contributions being unupdated. Eden Llamas vs. 3%ean Gate?ay 2aritime and 2anagement, 'n%., :.#. !o. -E?/?=, 'ugust -7, /FF?. Dismissal; redundancy. #edundancy e6ists when the service of an employee is in e6cess of what is reasonably demanded by the actual re*uirements of the business. ' redundant position is one rendered superfluous by any number of factors, such as overhiring of wor ers, decreased volume of business, dropping of a particular product line previously manufactured by the company or phasing out of a service activity formerly underta en by the enterprise. (or a valid implementation of a redundancy program, the employer must comply with the following re*uisites+ ,-. written notice served on both the employee and the D4"> at least one month prior to the intended date of termination; ,/. payment of separation pay e*uivalent to at least one month pay or at least one month pay for every year of service, whichever is higher; ,=. good faith in abolishing the redundant position; and ,7. fair and reasonable criteria in ascertaining what positions are to be declared redundant. Lo?e, 'n%., et al. vs. Court oE Appeals and 'rma 2utu%, :.#. !os. -@7C-= S :.#. !o. -E7A?F, 'ugust -7, /FF?. Dismissal; redundancy. 8e agree with the "abor 'rbiter that "owe employed fair and reasonable criteria in declaring Mutuc0s position redundant. Mutuc, who was hired only on /= Bune /FFF, did not deny that she was the most %unior of all

the e6ecutives of "owe. Mutuc also did not present contrary evidence to disprove that she was the least efficient and least competent among all the Creative Directors. The determination of the continuing necessity of a particular officer or position in a business corporation is a management prerogative, and the courts will not interfere unless arbitrary or malicious action on the part of management is shown. It is also within the e6clusive prerogative of management to determine the *ualification and fitness of an employee for hiring and firing, promotion or reassignment. Indeed, an employer has no legal obligation to eep more employees than are necessary for the operation of its business. Lo?e, 'n%., et al. vs. Court oE Appeals and 'rma 2utu%, :.#. !os. -@7C-= S :.#. !o. -E7A?F, 'ugust -7, /FF?. Dismissal; resignation. In termination cases, it is incumbent upon the employer to prove either the non2e6istence or the validity of dismissal. Inasmuch as respondents alleged petitioner0s resignation as the cause of his separation from wor , respondents had the burden to prove the same. The case of the employer must stand or fall on its own merits and not on the wea ness of the employee0s defense. #esignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the e6igency of the service, and one who has no other choice but to dissociate oneself from employment. It is a formal pronouncement or relin*uishment of an office, with the intention of relin*uishing the office accompanied by the act of relin*uishment. 's the intent to relin*uish must concur with the overt act of relin*uishment, the acts of the employee before and after the alleged resignation must be considered in determining whether, in fact, he intended to sever his employment. In this case, we find no overt act on the part of petitioner that he was ready to sever his employment ties. #altaCar L. &ayno vs. 3riCon +rading Corp.8 3rata +rading and FlordeliCa Legaspi, :.#. !o. -EA=7A, 'ugust -?, /FF?. Dismissal; transfer. 'TI0s transfer of &ismar IG0s base from Manila to &ataan was, contrary to 'guan1a0s assertions, a valid e6ercise of management prerogative. The transfer of employees has been traditionally among the acts identified as a management prerogative sub%ect only to limitations found in law, collective bargaining agreement, and general principles of fair play and %ustice. >ven as the law is solicitous of the welfare of employees, it must also protect the right of an employer to e6ercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. 4n the other hand, the transfer of an employee may constitute constructive dismissal ;when continued employment is rendered impossible, unreasonable or unli ely; when there is a demotion in ran and5or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee.< 'guan1a0s continued employment was not impossible, unreasonable or unli ely; neither was there a clear discrimination against him. 'mong the employees assigned to &ismar IG, it was only 'guan1a who did not report for wor in &ataan. 'guan1a0s assertion that he was not allowed to ;time in< in Manila should be ta en on its face+ 'guan1a reported for wor in Manila, where he wanted to wor , and not in &ataan, where he was supposed to wor . There was no demotion in ran , as 'guan1a would continue his wor as Crane 4perator. (urthermore, despite 'guan1a0s assertions, there was no diminution in pay. Gualberto AguanCa vs. Asian +erminal, 'n%., et al., :.#. !o. -@=AFA, 'ugust -7, /FF?. Burisdiction; Secretary of "abor. In the case at bar, the Secretary of "abor correctly assumed %urisdiction over the case as it does not come under the e6ception clause

in 'rt. -/C,b. of the "abor Code. 8hile petitioner Bethro appealed the inspection results and there is a need to e6amine evidentiary matters to resolve the issues raised, the payrolls presented by it were considered in the ordinary course of inspection. 8hile the employment records of the employees could not be e6pected to be found in Ka ult0s premises in Calamba, as Bethro0s offices are in Lue1on City, the records show that Bethro was given ample opportunity to present its payrolls and other pertinent documents during the hearings and to rectify the violations noted during the ocular inspection. It, however, failed to do so, more particularly to submit competent proof that it was giving its security guards the wages and benefits mandated by law. Bethro0s failure to eep payrolls and daily time records in Ka ult0s premises was not the only labor standard violation found to have been committed by it; it li ewise failed to register as a service contractor with the D4">, pursuant to Department 4rder !o. -C2F/ and, as earlier stated, to pay the wages and benefits in accordance with the rates prescribed by law. ,et$ro 'ntelligen%e H 7e%urity Corporation and ;a>ult, 'n%. vs.. +$e 1on. 7e%retary oE Labor and Employment, et al., :.#. !o. -E/A=E, 'ugust -7, /FF?. "abor organi1ation. 'rticle /-/,g. of the "abor Code defines a labor organi1ation as ;any union or association of employees which e6ists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment.< )pon compliance with all the documentary re*uirements, the #egional 4ffice or &ureau shall issue in favor of the applicant labor organi1ation a certificate indicating that it is included in the roster of legitimate labor organi1ations. 'ny applicant labor organi1ation shall ac*uire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organi1ations upon issuance of the certificate of registration. 7ta. Lu%ia East Commer%ial Corporation vs. 1on. 7e%retary oE Labor and Employment, et al., :.#. !o. -@/=AA, 'ugust -7, /FF?. "abor organi1ation; bargaining unit. ' bargaining unit is a ;group of employees of a given employer, comprised of all or less than all of the entire body of employees, consistent with e*uity to the employer, indicated to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law.< The fundamental factors in determining the appropriate collective bargaining unit are+ ,-. the will of the employees ,:lobe Doctrine.; ,/. affinity and unity of the employees0 interest, such as substantial similarity of wor and duties, or similarity of compensation and wor ing conditions ,Substantial Mutual Interests #ule.; ,=. prior collective bargaining history; and ,7. similarity of employment status. 7ta. Lu%ia East Commer%ial Corporation vs. 1on. 7e%retary oE Labor and Employment, et al., :.#. !o. -@/=AA, 'ugust -7, /FF?. Stri e; illegal stri e. It is hornboo principle that the e6ercise of the right of private sector employees to stri e is not absolute ,see Section = of 'rticle OIII of the Constitution.. Indeed, even if the purpose of a stri e is valid, the stri e may still be held illegal where the means employed are illegal. Thus, the employment of violence, intimidation, restraint or coercion in carrying out concerted activities which are in%urious to the right to property renders a stri e illegal. 'nd so is pic eting or the obstruction to the free use of property or the comfortable en%oyment of life or property, when accompanied by intimidation, threats, violence, and coercion as to constitute nuisance. 3ere, the )nion members0 repeated name2calling, harassment and threats of bodily harm directed against company officers and non2stri ing employees and, more significantly, the putting up of placards, banners and streamers with vulgar statements imputing criminal negligence to the company, which put to doubt reliability of its operations, come within the purview of illegal acts under 'rt. /@7 of

the "abor Code and %urisprudence. A. 7oriano Aviation vs. Employees Asso%iation oE A. 7oriano Aviation, et al., :.#. !o. -@@CE?, 'ugust -7, /FF?. JUL$ 2009 Labor Law Dismissal; loss of confidence. "oss of confidence applies only to cases involving employees who occupy positions of trust and confidence, or to those situations where the employee is routinely charged with the care and custody of the employer0s money or property. To be a valid ground for an employee0s dismissal, loss of trust and confidence must be based on a willful breach. ' breach is willful if it is done intentionally, nowingly and purposely, without %ustifiable e6cuse. In dismissing an employee on the ground of loss of confidence, it is sufficient that the employer has a reasonable ground to believe, based on clearly established facts, that the employee is responsible for the misconduct and the nature of his participation renders him unworthy of the trust and confidence demanded by his position. If the employer has ample reason to distrust the employee, the labor tribunal cannot %ustly deny the former the authority to dismiss the latter. Renita <el Rosario, et al. vs. 2a>ati Cinema 7=uare Corporation, :.#. !o. -EFF-7. Buly =, /FF?. Dismissal; loss of confidence. To be a valid ground for dismissal, loss of trust and confidence must be based on a willful breach of trust and founded on clearly established facts. ' breach is willful if it is done intentionally, nowingly and purposely, without %ustifiable e6cuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer0s arbitrariness, whims, caprices or suspicion; otherwise, the employee would eternally remain at the mercy of the employer. Such ground of dismissal has never been intended to afford an occasion for abuse because of its sub%ective nature. <avao Contra%tors <evelopment Cooperative 4<AC3<EC35, represented by C$airman oE t$e #oard Engr. L. C$aveC vs. 2arilyn A. &asa?a , :.#. !o. -E/-E7, Buly ?, /FF?. Dismissal; probationary employee. )nder 'rticle /C- of the "abor Code, a probationary employee can be legally dismissed either+ ,-. for a %ust cause; or ,/. when he fails to *ualify as a regular employee in accordance with the reasonable standards made nown to him by the employer at the start of the employment. !onetheless, the power of the employer to terminate the services of an employee on probation is not without limitations. (irst, this power must be e6ercised in accordance with the specific re*uirements of the contract. Second, the dissatisfaction on the part of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law. Third, there must be no unlawful discrimination in the dismissal. In termination cases, the burden of proving %ust or valid cause for dismissing an employee rests on the employer. 3ere, petitioner did not present proof that respondent was duly notified, at the time of her employment, of the reasonable standards she needed to comply with for her continued employment. <avao Contra%tors <evelopment Cooperative 4<AC3<EC35, represented by C$airman oE t$e #oard Engr. L. C$aveC vs. 2arilyn A. &asa?a, :.#. !o. -E/-E7, Buly ?, /FF?. >mployee benefits; compensable illness. In any determination of compensability, the nature and characteristics of the %ob are as important as raw medical findings and a claimant0s personal and social history. This is a basic legal reality in wor ers0 compensation law. 8hat the law re*uires is a reasonable wor connection and not direct causal relation. $robability, not the ultimate degree of certainty, is the test of proof in compensation proceedings. (or, in interpreting and carrying out the provisions of

the "abor Code and its Implementing #ules and #egulations, the primordial and paramount consideration is the employee0s welfare. To safeguard the wor er0s rights, any doubt on the proper interpretation and application must be resolved in favor of labor. Government 7ervi%e 'nsuran%e 7ystem vs. 7alvador A. <e Castro, :.#. !o. -CAF=A, Buly -A, /FF?. >mployee benefits; retirement. #etirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter, after reaching a certain age, agrees to sever his or her employment with the former. #etirement is provided for under 'rticle /CE of the "abor Code, as amended by #epublic 'ct !o. E@7-, or is determined by an e6isting agreement between the employer and the employee. In this case, respondent offered the Special Separation Incentive $rogram ,SSI$. to overhaul the ban structure and to allow it to effectively compete with local peer and foreign ban s. SSI$ was not compulsory on employees. >mployees who wished to avail of the SSI$ were re*uired to accomplish a form for availment of separation benefits under the SSI$ and to submit the accomplished form to the $ersonnel 'dministration and Industrial #elations Division ,$'I#D. for approval. $etitioner voluntarily availed of the SSI$. 2ar%elino A. 2agdadaro vs. &$ilippine National #an>, :.#. !o. -@@-?C, Buly -E, /FF?. >mployee benefits; salary increase. It is a familiar and fundamental doctrine in labor law that the collective bargaining agreement ,C&'. is the law between the parties and they are obliged to comply with its provisions. If the terms of a contract, in this case the C&', are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of their stipulations shall control. ' reading of the above2*uoted provision of the C&' shows that the parties agreed that CFN of the TI$ or at the least the amount of $-,AFF is to be allocated for individual salary increases. The C&' does not spea of any other benefits or increases which would be covered by the employees0 share in the TI$, e6cept salary increases. /niversity oE 7an Agustin, 'n%. vs. /niversity oE 7an Agustin Employees /nionBFF6, G.#. !o. -EEA?7, Buly /=, /FF?. >mployee benefits; seamen. The terms and conditions of a seafarer0s employment is governed by the provisions of the contract he signs at the time he is hired. &ut unli e that of others, deemed written in the seafarer0s contract is a set of standard provisions set and implemented by the $4>', called the Standard Terms and Conditions :overning the >mployment of (ilipino Seafarers on &oard 4cean2:oing Gessels, which are considered to be the minimum re*uirements acceptable to the government for the employment of (ilipino seafarers on board foreign ocean2going vessels. Thus, the issue of whether petitioner !isda can legally demand and claim disability benefits from respondents Sea Serve and 'D'MS for an illness suffered is best addressed by the provisions of his $4>'2S>C, which incorporated the Standard Terms and Conditions :overning the >mployment of (ilipino Seafarers on &oard 4cean2:oing Gessels. 8hen petitioner !isda was employed on E 'ugust /FF-, it was the /FFF 'mended Standard Terms and Conditions :overning the >mployment of (ilipino Seafarers on &oard 4cean2:oing Gessels ,hereinafter referred to simply as 'mended Standard Terms and Conditions for brevity. that applied and were deemed written in or appended to his $4>'2S>C. Carlos N. Nisda vs. 7ea 7erve 2aritime Agen%y, et al., :.#. !o. -E?-EE, Buly /=, /FF?. >mployee benefits; service award. #espondent0s service award under 'rticle CE of the Saudi "abor "aw has already been paid. The severance pay received by respondent was his service award. L6- Constru%tion Corporation vs. 2ar%elo #. <upo, :.#. !o. -E/=7/, Buly -=, /FF?.

>mployees; pro%ect employee. The principal test for determining whether a particular employee is a pro%ect employee or a regular employee is whether the pro%ect employee was assigned to carry out a specific pro%ect or underta ing, the duration and scope of which were specified at the time the employee is engaged for the pro%ect. ;$ro%ect< may refer to a particular %ob or underta ing that is within the regular or usual business of the employer, but which is distinct and separate and identifiable as such from the underta ings of the company. Such %ob or underta ing begins and ends at determined or determinable times. 3ere, the specific pro%ects for which respondent was hired and the periods of employment were specified in his employment contracts. The services he rendered, the duration and scope of each employment are clear indications that respondent was hired as a pro%ect employee. Al%atel &$ilippines, 'n%. vs. Rene R. Relos, :.#. !o. -@7=-A, Buly =, /FF?. Burisdiction; #egional Director . Respondent %ontested t$e Eindings oE t$e labor inspe%tor during and aEter t$e inspe%tion and raised issues t$e resolution oE ?$i%$ ne%essitated t$e e"amination oE evidentiary matters not veriEiable in t$e normal %ourse oE inspe%tion. 1en%e, t$e Regional <ire%tor ?as divested oE 0urisdi%tion and s$ould $ave endorsed t$e %ase to t$e appropriate Arbitration #ran%$ oE t$e NLRC. Considering, $o?ever, t$at an illegal dismissal %ase $ad been Eiled by petitioners ?$erein t$e e"isten%e or absen%e oE an employerBemployee relations$ip ?as also raised, t$e CA %orre%tly ruled t$at su%$ endorsement ?as no longer ne%essary. -i%tor 2eteoro, et al. vs. Creative Creatures, 'n%., :.#. !o. -E-/EA. Buly -=, /FF? "abor claim; deed of release. 's a rule, deeds of release or *uitclaim cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel. (urthermore, there is a gross disparity between the amount actually received by petitioner as compared to the amount owing him as initially computed by G' Calipay. The amount of the settlement is indubitably unconscionable; hence, ineffective to bar petitioner from claiming the full measure of his legal rights. In any event, the Supreme Court deemed it appropriate that the amount he received as consideration for signing the *uitclaim be deducted from his monetary award. RaEael Rondina vs. Court oE Appeals Eormer spe%ial 1*t$ <ivision, /ni%raEt 'ndustries 'nternational Corp., 'n%. Robert <ino, Cristina <ino, 2i%$ael Lloyd <ino, Allan <ino and 2ylene ,une <ino, G.R. No. 1( 1 , ,uly *, !!*. "abor claim; liability of corporate officers. To hold a director personally liable for the debts of the corporation, and thus pierce the veil of corporate fiction, the bad faith or wrongdoing of the director must be established clearly and convincingly. &ad faith is never presumed. &ad faith does not connote bad %udgment or negligence. &ad faith imports a dishonest purpose. &ad faith means breach of a nown duty through some ill motive or interest. &ad faith parta es of the nature of fraud. RaEael Rondina vs. Court oE Appeals Eormer spe%ial 1*t$ <ivision, /ni%raEt 'ndustries 'nternational Corp., 'n%. Robert <ino, Cristina <ino, 2i%$ael Lloyd <ino, Allan <ino and 2ylene ,une <ino, :.#. !o. -E//-/, Buly ?, /FF?. Stri e; illegal stri e. It is undisputed that the notice of stri e was filed by the union without attaching the counter2proposal of the company. This, according to petitioners and the labor arbiter, made the ensuing stri e of respondents illegal because the notice of stri e of the union was defective. The Implementing #ules use the words ;as far as practicable.< In this case, attaching the counter2proposal of the company to the notice of stri e of the union was not practicable. It was absurd to e6pect the union to produce the company0s counter2proposal which it did not have. 4ne cannot give what one does not have. Indeed, compliance with the re*uirement was impossible because no counter2 proposal e6isted at the time the union filed a notice of stri e. The law does not e6act compliance with the impossible. Nemo tenetur ad impossibile.

'nother error committed by the labor arbiter was his declaration that respondents, as union officers, automatically severed their employment with the company due to the alleged illegal stri e. In the first place, there was no illegal stri e. Moreover, it is hornboo doctrine that a mere finding of the illegality of the stri e should not be automatically followed by the wholesale dismissal of the stri ers from employment. Club Filipino, 'n%. and Atty. Roberto F. <e Leon vs. #en0amin #autista, et al., :.#. !o. -@C7F@, Buly -=, /FF?. )nion; chec 2off. 'rticle ///,b. of the "abor Code, as amended, prohibits the payment of attorney0s fees only when it is effected through forced contributions from the employees from their own funds as distinguished from union funds. 3ence, the general rule is that attorney0s fees, negotiation fees, and other similar charges may only be collected from union funds, not from the amounts that pertain to individual union members. 's an e6ception to the general rule, special assessments or other e6traordinary fees may be levied upon or chec ed off from any amount due an employee for as long as there is proper authori1ation by the employee. ' chec 2off is a process or device whereby the employer, on agreement with the )nion, recogni1ed as the proper bargaining representative, or on prior authori1ation from the employees, deducts union dues or agency fees from the latter0s wages and remits them directly to the )nion. Its desirability in a labor organi1ation is *uite evident. The )nion is assured thereby of continuous funding. The system of chec 2 off is primarily for the benefit of the )nion and, only indirectly, for the individual employees. 3ere, the re*uisites for a valid levy and chec 2off of special assessments, laid down by 'rticle /7-,n. and ,o., respectively, of the "abor Code, as amended, have not been complied with in the case at bar. To recall, these re*uisites are+ ,-. an authori1ation by a written resolution of the ma%ority of all the union members at the general membership meeting duly called for the purpose; ,/. secretary0s record of the minutes of the meeting; and ,=. individual written authori1ation for chec 2off duly signed by the employee concerned. Eduardo ,. 2ariDo, ,r. et al. vs. Gil ;. Gamilla, et al., :.#. !o. -7?E@=, Buly E, /FF?. JUNE 2009 Labor Law Diminution of benefits; company practice. To be considered a company practice, the giving of the benefits should have been done over a long period of time, and must be shown to have been consistent and deliberate. The test or rationale of this rule on long practice re*uires an indubitable showing that the employer agreed to continue giving the benefits nowing fully well that said employees are not covered by the law re*uiring payment thereof. 8ith regard to the length of time the company practice should have been e6ercised to constitute voluntary employer practice which cannot be unilaterally withdrawn by the employer, %urisprudence has not laid down any hard and fast rule. In the case of Davao (ruits Corporation v. 'ssociated "abor )nions, the company practice of including in the computation of the -=th2month pay the maternity leave pay and cash e*uivalent of unused vacation and sic leave lasted for si6 ,@. years. In another case, Tiangco v. "eogardo, Br., the employer carried on the practice of giving a fi6ed monthly emergency allowance from !ovember -?E@ to (ebruary -?CF, or three ,=. years and four ,7. months. 8hile in Sevilla Trading v. Semana, the employer ept the practice of including non2basic benefits such as paid leaves for unused sic leave and vacation leave in the computation of their -=th2month pay for at least two ,/. years. In all these cases, the Supreme Court held that the grant of these benefits has ripened into company practice or policy which cannot be peremptorily withdrawn. The common denominator in these cases appears to be the regularity and deliberateness of the grant of benefits over a significant period of time. 2etropolitan #an> and +rust Company vs. National Labor Relations

Commission, Felipe A. &atag and #ienvenido C. Flora, G.R. No. 1) * ., ,une 1., !!*. Compensable illness. ' government employee, who suffers complete and permanent loss of sight in one eye, is entitled to income benefit from the :SIS beginning the first month of said employee0s disability, but no longer than the ma6imum period of /A months. Government 7ervi%e 'nsuran%e 7ystem vs. ,aime A. 'barra, :.#. !o. -E/?/A, Bune -C, /FF?. Compensable illness. 'lthough the Court commiserates with petitioner0s sufferings, the Court cannot close its eyes to the need to ensure that the wor men0s trust fund is protected from depletion due to claims for illnesses which may not be truly wor 2 related. RodolEo #. Ar%eDo -s. Government 7ervi%e 'nsuran%e 7ystem, :.#. !o. -@/=E7, Bune -C, /FF?. Downsi1ing. #etrenchment is the reduction of wor personnel usually due to poor financial returns, aimed to cut down costs for operation particularly on salaries and wages. #edundancy, on the other hand, e6ists where the number of employees is in e6cess of what is reasonably demanded by the actual re*uirements of the enterprise. &oth are forms of downsi1ing and are often resorted to by the employer during periods of business recession, industrial depression, or seasonal fluctuations, and during lulls in production occasioned by lac of orders, shortage of materials, conversion of the plant for a new production program, or introduction of new methods or more efficient machinery or automation. #etrenchment and redundancy are valid management prerogatives, provided they are done in good faith and the employer faithfully complies with the substantive and procedural re*uirements laid down by law and %urisprudence. (or a valid retrenchment, the following re*uisites must be complied with+ ,-. the retrenchment is necessary to prevent losses and such losses are proven; ,/. written notice to the employees and to the D4"> at least one month prior to the intended date of retrenchment; and ,=. payment of separation pay e*uivalent to one2month pay or at least one2half month pay for every year of service, whichever is higher. In case of redundancy, the employer must prove that+ ,-. a written notice was served on both the employees and the D4"> at least one month prior to the intended date of retrenchment; ,/. separation pay e*uivalent to at least one month pay or at least one month pay for every year of service, whichever is higher, has been paid; ,=. good faith in abolishing the redundant positions; and ,7. adoption of fair and reasonable criteria in ascertaining which positions are to be declared redundant and accordingly abolished. It is the employer who bears the onus of proving compliance with these re*uirements, retrenchment and redundancy being in the nature of affirmative defenses. 4therwise, the dismissal is not %ustified. 1otel Enterprises oE t$e &$ilippines, 'n%., et%. vs. 7ama$an ng mga 2anggaga?a sa 1yattBNational /nion oE 6or>ers in t$e 1otel Restaurant, et%. , :.#. !o. -@AEA@, Bune A, /FF?. >mployer2employee relationship. There e6isted no employer2 employee relationship between the parties. De #aedt is an independent contractor, who was engaged by S:G to render services to S:G0s client TMI, and ultimately to D' on the C>C'$ pro%ect, regarding matters in the field of her special nowledge and training for a specific period of time. )nli e an ordinary employee, De #aedt received retainer fees and benefits such as housing and subsistence allowances and medical insurance. De #aedt0s services could be terminated on the ground of end of contract between the D' and TMI, and not on grounds under labor laws. Though the end of the contract between the D' and TMI was not the ground for the withdrawal of De #aedt from the C>C'$, De #aedt was disengaged from the pro%ect upon the instruction of S:G0s client, TMI. Most important of all, S:G did not e6ercise control over the means and methods by which De #aedt performed her

duties as Sociologist. S:G did impose rules on De #aedt, but these were necessary to ensure S:G0s faithful compliance with the terms and conditions of the Sub2 Consultancy 'greement it entered into with TMI. 7y%ip, Gorres, -elayo, H Company vs. Carol <e Raedt, :.#. !o. -@-=@@, Bune -@, /FF?. :round for dismissal; abandonment. The rule is that the burden of proof lies with the employer to show that the dismissal was for a %ust cause. In the present case, the petitioner claims that there was no illegal dismissal since the respondent abandoned his %ob. The petitioner points out that it wrote the respondent various memoranda re*uiring him to e6plain why he incurred absences without leave, and re*uiring him as well to report for wor ; the respondent, however, never bothered to reply in writing. In evaluating a charge of abandonment, the %urisprudential rule is that abandonment is a matter of intention that cannot be lightly presumed from e*uivocal acts. To constitute abandonment, two elements must concur+ ,-. the failure to report for wor or absence without valid or %ustifiable reason, and ,/. a clear intent,manifested through overt acts, to sever the employer2 employee relationship. The employer bears the burden of showing a deliberate and un%ustified refusal by the employee to resume his employment without any intention of returning. 8e agree with the C' that the petitioner failed to prove the charge of abandonment. &entagon 7teel Corporation vs. Court oE Appeals, et al., G.R. No. 1(4141, ,une 6, !!*. :round for dismissal; gross negligence. #espondent0s actions, at their worse, reveal his negligence, but said negligence can hardly be deemed gross and habitual, as to constitute a %ust ground for his dismissal under 'rticle /C/,b. of the "abor Code. :ross negligence under 'rticle /C/ of the "abor Code connotes want of care in the performance of one0s duties, while habitual neglect implies repeated failure to perform one0s duties for a period of time, depending upon the circumstances. :ross negligence has been defined as the want or absence of even slight care or diligence as to amount to a rec less disregard of the safety of person or property. It evinces a thoughtless disregard of conse*uences without e6erting any effort to avoid them. To constitute a %ust cause for termination of employment, the neglect of duties must not only be gross but habitual as well. The single or isolated act of negligence does not constitute a %ust cause for the dismissal of the employee. A2A Computer CollegeBEast RiCal, et al. vs. Allan Raymond R. 'gna%io , :.#. !o. -ECA/F. Bune /=, /FF?. :round for dismissal; gross negligence. :ross negligence is characteri1ed by want of even slight care, acting or omitting to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally with a conscious indifference to conse*uences insofar as other persons may be affected. Mateo was undisputedly negligent when he left the motorcycle along &ur e Street in >scolta, Manila without loc ing it despite clear, specific instructions to do so. 3is argument that he stayed inside the "&C office for only three to five minutes was of no moment. 4n the contrary, it only proved that he did not e6ercise even the slightest degree of care during that very short time. Mateo deliberately did not heed the employer0s very important precautionary measure to ensure the safety of company property. #egardless of the reasons advanced, the e6act evil sought to be prevented by "&C ,in repeatedly directing its customer associates to loc their motorcycles. occurred, resulting in a substantial loss to "&C. L#C E"press 2etro 2anila, 'n%. and LorenCo A. NiDo vs. ,ames 2ateo, :.#. !o. -@C/-A, Bune ?, /FF?. :round for dismissal; lost of confidence. #ecent decisions of this Court have distinguished the treatment of managerial employees from that of the ran 2 and2file personnel,insofar as the application of the doctrine of loss of trust and confidence is concerned. Thus, with respect to ran 2and2file personnel, loss of trust and confidence, as ground for valid dismissal, re*uires proof of involvement in the

alleged events in *uestion, and that mere uncorroborated assertions and accusations by the employer will not be sufficient. &ut as regards a managerial employee, the mere e6istence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. 3ence, in the case of managerial employees, proof beyond reasonable doubt is not re*uired. It is sufficient that there is some basis for the employer0s loss of trust and confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence demanded of his position. !onetheless, the evidence must be substantial and must establish clearly and convincingly the facts on which the loss of confidence rests and not on the employer0s arbitrariness, whims, and caprices or suspicion. +riump$ 'nternational 4&1'L7.5, 'n%., vs. Ramon L. Apostol, et al., :.#. !o. -@77/=, Bune -@, /FF?. :round for dismissal; loss of confidence. To be a valid ground for dismissal, loss of trust and confidence must be based on a willful breach of trust and founded on clearly established facts. ' breach is willful if it is done intentionally, nowingly and purposely, without %ustifiable e6cuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer0s arbitrariness, whims, caprices or suspicion; otherwise, the employee would eternally remain at the mercy of the employer. (urther, the act complained of must be wor 2related and must show that the employee concerned is unfit to continue wor ing for the employer. 7arabia 3pti%al and -ivian 7arabiaB3rn vs. ,eanet #. Cama%$o, :.#. !o. -AAAF/, Bune -C, /FF?. :round for dismissal; loss of confidence. !issan failed to prove that Tagulao and Serrano were responsible for the loss of two rolls of tint. The records of the case show that there was a discrepancy between the dates of pic up and delivery as alleged by !issan and as alleged by Tagulao and Serrano. >ven Catudio, !issan0s employee, stated that she changed the dates on the delivery receipt of the two rolls of tint on the instruction of her boss. "oss of trust and confidence, to be a valid ground for an employee0s dismissal, must be based on a willful breach and founded on clearly established facts. The burden of proof of dismissal rests entirely upon the employer. In the present case, !issan illegally dismissed Tagulao and Serrano because !issan failed to prove that Tagulao and Serrano were terminated for a valid cause. Tagulao and Serrano are thus entitled to reinstatement and to receive bac wages. Nissan Nort$ Edsa #alinta?a>, @ueCon City vs. Angelito 7errano, ,r. and Ed?in +agulao, :.#. !o. -@/A=C, Bune 7, /FF? :round for dismissal; loss of confidence. The first re*uisite for dismissal on the ground of loss of trust and confidence is that the employee concerned must be one holding a position of trust and confidence. The second re*uisite of terminating an employee for loss of trust and confidence is that there must be an act that would %ustify the loss of trust and confidence. To be a valid cause for dismissal, the loss of confidence must be based on a willful breach of trust and founded on clearly established facts. 8e find that it was not established that respondent used her authority to influence her subordinates to stage a ;no wor day<; and assuming that she performed this act as alleged by petitioners, it does not satisfy the %urisprudential re*uirements for valid termination due to loss of trust and confidence. "oss of trust and confidence stems from a breach of trust founded on a dishonest, deceitful or fraudulent act. In the case at bar, respondent did not commit any act which was dishonest or deceitful. She did not use her authority as the 'dministration Manager to misappropriate company property nor did she abuse the trust reposed in her by petitioners with respect to her responsibility to

implement company rules. The most that can be attributed to respondent is that she influenced a single subordinate, without e6erting any force or ma ing any threats, not to report to wor . This does not constitute dishonest or deceitful conduct which would %ustify the conclusion of loss of trust and confidence. 2N6 :ander &$ilippines, 'n%. and RolE 6ilts%$e> vs. +rinidad 2. Enri=ueC, :.#. !o. -@?-E=, Bune A, /FF?. :rounds for dismissal; serious misconduct. )nder the circumstances, our conclusion can only be for Salon0s dismissal for two counts of valid causes D i.e., for serious violation of TI$0s Memorandum !o. $2@@, for unauthori1ed selling of e6amination papers, and for serious misconduct, for falsifying Manalo0s grade and violating the grading rules under the Manual of #egulations for $rivate Schools. +e%$nologi%al 'nstitute oE t$e &$ilippines +ea%$ers and Employees 3rganiCation and its member 2agdalena +. 7alon vs. t$e 1onorable Court oE Appeals, et al ., :.#. !o. -ACEF=, Bune /@, /FF?. :round for dismissal; willful disobedience. 8illful disobedience of the employer0s lawful orders, as a %ust cause for dismissal of an employee, re*uires the concurrence of two ,/. elements+ ,-. the employee0s assailed conduct must have been willful, i.e., characteri1ed by a wrongful and perverse attitude; and ,/. the order violated must have been reasonable, lawful, made nown to the employee, and must pertain to the duties which he had been engaged to discharge. :illes0 resignation from C&I and sudden departure from India was not approved by SMI. 8hen he as ed the company0s permission to return to Manila, the management instructed him to stay in India until a suitable replacement was found. 3e new of the critical stage of the $ro%ect due to the accelerated period of its completion. Thus, when he left the $ro%ect, despite the clear and lawful instructions of the management for him to stay, his act constituted willful disobedience and gross neglect of duty under 'rticle /C/ of the "abor Code. :illes0 departure from India, despite the instruction of SMI for him to stay, was impelled by the financial difficulties he encountered thereat. The money given to him before he left for India was already spent. #ic ie Sar*ue, the Chief 'ccountant of SMI, admitted on the witness stand that :illes was paid his salaries for the = W months when he was already bac in Manila. 'dded to this were the problems he encountered due to the acceleration of the %ob completion period, the obligations he had to meet at home for his aged mother at that time, now deceased, and the relatives who needed his financial support. Clearly, :illes had a valid reason to leave India. SMI0s failure to pay :illes0 salary on time was intolerable. (or neglecting its duties as an employer, SMI may, thus, be considered to have acted in bad faith. It may be deemed as utter disregard by SMI of the welfare and well2being of its employee, especially at a time when he was far away from home. 8e, therefore, find that :illes was constructively dismissed from employment. Constructive dismissal e6ists when the employee involuntarily resigns due to the harsh, hostile, and unfavorable conditions set by the employer. It arises when there is clear discrimination, insensibility, or disdain by an employer and this becomes unbearable to the employee. Invariably, the law recogni1es and resolves such a situation in favor of the employees in order to protect their rights from the coercive acts of the employer. #esignation contemplates a voluntary act; thus, an employee who is forced to relin*uish his position due to the employer0s unfair or unreasonable treatment is deemed to have been illegally terminated or discharged. The test of constructive dismissal is whether a reasonable person in the employee0s position would have felt compelled to give up his position under the circumstances. #ienvenido C. Gilles vs. Court oE Appeals, 7%$ema Aonsult and Edgardo Abores, :.#. !o. -7?/E=, Bune A, /FF?.

Illegal dismissal; attorney0s fees. a'torney0s fees may be awarded only when the employee is illegally dismissed in bad faith and is compelled to litigate or incur e6penses to protect his rights by reason of the un%ustified acts of his employer. In the case at bar, respondent0s un%ustified and unwarranted dismissal prompted her to engage the professional services of a counsel and she is thus entitled to an award of attorney0s fees. 2N6 :ander &$ilippines, 'n%. and RolE 6ilts%$e> vs. +rinidad 2. Enri=ueC, :.#. !o. -@?-E=, Bune A, /FF?. Illegal dismissal; moral damages. There is sufficient basis to award moral damages and attorney0s fees to respondent. 8e have consistently ruled that in illegal dismissal cases, moral damages are recoverable only where the dismissal of the employee was attended by bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. Such an award cannot be %ustified solely upon the premise that the employer fired his employee without %ust cause or due process. 'dditional facts must be pleaded and proven to warrant the grant of moral damages under the Civil Code, i.e., that the act of dismissal was attended by bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy; and, of course, that social humiliation, wounded feelings, grave an6iety, and similar in%ury resulted therefrom. In previous cases where moral damages and attorney0s fees were awarded, the manner of termination was done in a humiliating and insulting manner, such as in the case of &alayan Colleges v. !ational "abor #elations Commission where the employer posted copies of its letters of termination to the teachers inside the school campus and it also furnished copies to the town mayor and $arish $riest of their community for the purpose of maligning the teachers0 reputation. So also in the case of Chiang Mai She School v. Court of 'ppeals, this Court awarded moral damages to a teacher who was flatly, and without warning or a formal notice, told that she was dismissed. In the case at bar, we see it fit to award moral damages to respondent because the manner in which respondent was treated upon petitioners0 suspicion of her involvement in drafting and in circulating the letter of appeal and the alleged staging of the ;no wor day< is contrary to good morals because it caused unnecessary humiliation to respondent. 2N6 :ander &$ilippines, 'n%. and RolE 6ilts%$e> vs. +rinidad 2. Enri=ueC, :.#. !o. -@?-E=, Bune A, /FF?. Illegal dismissal; liability of corporate officer. The general manager of a corporation should not be made personally answerable for the payment of an illegally dismissed employee0s monetary claims arising from the dismissal unless he had acted maliciously or in bad faith in terminating the services of the employee. The employer corporation has a separate and distinct personality from its officers who merely act as its agents. The e6ception noted is where the official ;had acted maliciously or in bad faith,< in which event he may be made personally liable for his own act. That e6ception is not applicable in the case at bar, because it has not been proven that 8iltsche was impleaded in his capacity as :eneral Manager of petitioner corporation and there appears to be no evidence on record that he acted maliciously or in bad faith in terminating the services of respondent. 3is act, therefore, was within the scope of his authority and was a corporate act for which he should not be held personally liable for. 2N6 :ander &$ilippines, 'n%. and RolE 6ilts%$e> vs. +rinidad 2. Enri=ueC, :.#. !o. -@?-E=, Bune A, /FF?; see also #ienvenido C. Gilles vs. Court oE Appeals, 7%$ema Aonsult and Edgardo Abores, :.#. !o. -7?/E=, Bune A, /FF?. Illegal dismissal; procedural due process. $rocedural due process in the dismissal of employees re*uires notice and hearing. The employer must furnish the employee two written notices before termination may be effected. The first notice apprises the employee of the particular acts or omissions for which his dismissal is sought, while the second notice informs the employee of the employer0s decision to dismiss him.

The re*uirement of a hearing, on the other hand, is complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing was conducted. 1erminigildo 'nguillom, et al. vs. First &$ilippine 7%ales, 'n%., et al., :.#. !o. -@A7FE, Bune A, /FF?. Illegal dismissal; reinstatement. The respondent0s illegal dismissal carries the legal conse*uence defined under 'rticle /E? of the "abor Code+ the illegally dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges and to his full bac wages, inclusive of allowances and other benefits or their monetary e*uivalent, computed from the time his compensation was withheld from him up to the time of his actual reinstatement. The imposition of this legal conse*uence is a matter of law that allows no discretion on the part of the decision ma er, e6cept only to the e6tent recogni1ed by the law itself as e6pressed in %urisprudence. &entagon 7teel Corporation vs. Court oE Appeals, et al., G.R. No. 1(4141, ,une 6, !!*. #einstatement; union shop steward. ' shop steward leads to the conclusion that it is a position within the union, and not within the company. ' shop steward is appointed by the union in a shop, department, or plant and serves as representative of the union, charged with negotiating and ad%ustment of grievances of employees with the supervisor of the employer. 3e is the representative of the union members in a building or other wor place. &lac 0s "aw Dictionary defines a shop steward as a union official elected to represent members in a plant or particular department. 3is duties include collection of dues, recruitment of new members and initial negotiations for the settlement of grievances. ' %udgment of reinstatement of the petitioner to the position of union Shop Steward would have no practical legal effect since it cannot be enforced. &ased on the re*uirements imposed by law and the '$C8)2'TI C&', and in the nature of things, the subse*uent separation of the petitioner from employment with respondent 'TI has made his reinstatement to union Shop Steward incapable of being enforced. +eodoro 7. 2iranda, ,r. vs. Asian +erminals, 'n%. and Court oE Appeals, G.R. No. 1(4316, ,une 3, !!*. #esignation; separation pay. !o provision in the "abor Code grants separation pay to voluntarily resigning employees. Separation pay may be awarded only in cases when the termination of employment is due to ,a. installation of labor2saving devices, ,b. redundancy, ,c. retrenchment, ,d. closing or cessation of business operations, ,e. disease of an employee and his continued employment is pre%udicial to himself or his co2employees, or ,f. when an employee is illegally dismissed but reinstatement is no longer feasible. In fact, the rule is that an employee who voluntarily resigns from employment is not entitled to separation pay, e6cept when it is stipulated in the employment contract or collective bargaining agreement ,C&'., or it is sanctioned by established employer practice or policy. 3ere, the primary consideration that impelled respondent to tender his resignation letter was the assurance that he would be paid his separation pay. It is thus unli ely for someone to %ust leave his employer for whom he has wor ed for twelve ,-/. years without any e6pectation of financial assistance. 3ence, the former employee is entitled to receive separation pay. O,P 2ar>eting Corporation, represented by its #ran%$ 2anager Elmundo <ador, :.#. !o. -@=?/7, Bune -C, /FF?. Stri e; re*uisites for validity. The re*uisites for a valid stri e are+ ,a. a notice of stri e filed with the D4"> =F days before the intended date thereof or -A days in case of )"$; ,b. a stri e vote approved by a ma%ority of the total union membership in the bargaining unit concerned obtained by secret ballot in a meeting called for that purpose; and ,c. a notice to the D4"> of the results of the voting at least seven ,E. days before the intended stri e. The re*uirements are mandatory and failure of a union to comply therewith renders the stri e illegal. 1otel Enterprises oE t$e

&$ilippines, 'n%., et%. vs. 7ama$an ng mga 2anggaga?a sa 1yattBNational /nion oE 6or>ers in t$e 1otel Restaurant, et%. , :.#. !o. -@AEA@, Bune A, /FF?. )nion security. ;)nion security< is a generic term, which is applied to and comprehends ;closed shop,< ;union shop,< ;maintenance of membership< or any other form of agreement which imposes upon employees the obligation to ac*uire or retain union membership as a condition affecting employment. There is union shop when all new regular employees are re*uired to %oin the union within a certain period as a condition for their continued employment. There is maintenance of membership shop when employees, who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. ' closed2 shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part. In terminating the employment of an employee by enforcing the )nion Security Clause, the employer needs only to determine and prove that+ ,-. the union security clause is applicable; ,/. the union is re*uesting for the enforcement of the union security provision in the C&'; and ,=. there is sufficient evidence to support the union0s decision to e6pel the employee from the union or company. 1erminigildo 'nguillom, et al. vs. First &$ilippine 7%ales, 'n%., et al., :.#. !o. -@A7FE, Bune A, /FF?. #A$ 2009 Labor Law 'bandonment. It is well settled that abandonment as a %ust and valid ground for dismissal re*uires the deliberate and un%ustified refusal of the employee to return for wor . Two elements must be present, namely+ ,-. the failure to report for wor or absence without valid or %ustifiable reason, and ,/. a clear intention to sever the employer2employee relationship. The second element is more determinative of the intent and must be evinced by overt acts. Mere absence, not being sufficient, the burden of proof rests upon the employer to show that the employee clearly and deliberately intended to discontinue her employment without any intention of returning. In Samarca v. 'rc2Men Industries, Inc, the Supreme Court held that abandonment is a matter of intention and cannot lightly be presumed from certain e*uivocal acts. To constitute abandonment, there must be clear proof of deliberate and un%ustified intent to sever the employer2employee relationship. Clearly, the operative act is still the employee0s ultimate act of putting an end to his employment. 3owever, an employee who ta es steps to protest her layoff cannot be said to have abandoned her wor because a charge of abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so when it includes a prayer for reinstatement. 8hen >leonor filed the illegal dismissal complaint, it totally negated petitioner0s theory of abandonment. 'lso, to effectively dismiss an employee for abandonment, the employer must comply with the due process re*uirement of sending notices to the employee. In &rahm Industries, Inc. vs. !"#C, the Supreme Court ruled that this re*uirement is not a mere formality that may be dispensed with at will. Its disregard is a matter of serious concern since it constitutes a safeguard of the highest order in response to man0s innate sense of %ustice. $etitioner was not able to send the necessary notice re*uirement to >leonor. $etitioner0s belated claim that it was not able to send the notice of infraction prior to the filing of the illegal dismissal case cannot simply

unacceptable. &ased on the foregoing, >leonor did not abandon her wor . 7out$ <avao <evelopment Company, 'n%., et al. vs. 7ergio L. Gamo, et al., :.#. !o. -E-C-7, May C, /FF?. 'ppeal to D4"> Secretary; appeal bond. The purpose of an appeal bond is to ensure, during the period of appeal, against any occurrence that would defeat or diminish recovery by the aggrieved employees under the %udgment if subse*uently affirmed. The Deed of 'ssignment in the instant case, li e a cash or surety bond, serves the same purpose. (irst, the Deed of 'ssignment constitutes not %ust a partial amount, but rather the entire award in the appealed 4rder. Second, it is clear from the Deed of 'ssignment that the entire amount is under the full control of the ban , and not of petitioner, and is in fact payable to the D4"> #egional 4ffice, to be withdrawn by the same office after it had issued a writ of e6ecution. (or all intents and purposes, the Deed of 'ssignment in tandem with the "etter 'greement and Cash Goucher is as good as cash. Third, the e6ecution of the Deed of 'ssignment, the "etter 'greement and the Cash Goucher were made in good faith, and constituted clear manifestation of petitioner0s willingness to pay the %udgment amount. &eopleGs #road%asting vs. +$e 7e%retary oE t$e <epartment oE Labor and Employment, et al., :.#. !o. -E?@A/, May C, /FF?. 'ppeal; private carrier. In this case, petitioner availed of the services of "&C, a private carrier, to deliver its notice of appeal to the !"#C. 3ad petitioner sent its notice of appeal by registered mail, the date of mailing would have been deemed the date of filing with the !"#C. &ut petitioner, for reasons of its own, chose to send its notice of appeal through a private letter2forwarding agency. Therefore, the date of actual receipt by the !"#C of the notice of appeal, and not the date of delivery to "&C, is deemed to be the date of the filing of the notice of appeal. Since the !"#C received petitioner0s notice of appeal on /@ (ebruary /FF-, the appeal was clearly filed out of time. $etitioner had thus lost its right to appeal from the decision of the "abor 'rbiter and the !"#C should have dismissed its notice of appeal. C$arter C$emi%al and Coating Corporation vs. 1erbert +an and Amalia 7onsing , :.#. !o. -@=C?-, May /-, /FF?. Compensable illness; definition. $.D. !o. @/@, as amended, defines compensable sic ness as ;any illness definitely accepted as an occupational disease listed by the Commission, or any illness caused by employment sub%ect to proof by the employee that the ris of contracting the same is increased by the wor ing conditions.< )nder Section - ,b., #ule III, of the 'mended #ules on >mployees0 Compensation, for the sic ness and the resulting disability or death to be compensable, the same must be an ;occupational disease< included in the list provided ,'nne6 ;'<., with the conditions set therein satisfied; otherwise, the claimant must show proof that the ris of contracting it is increased by the wor ing conditions. 4therwise stated, for sic ness and the resulting death of an employee to be compensable, the claimant must show either+ ,-. that it is a result of an occupational disease listed under 'nne6 ;'< of the 'mended #ules on >mployees0 Compensation with the conditions set therein satisfied; or ,/. if not so listed, that the ris of contracting the disease is increased by the wor ing conditions. 3ere, the C' correctly considered Cardiopulmonary 'rrest T5C (atal 'rrythmia in this case a cardiovascular disease D a listed disease under 'nne6 ;'< of the 'mended #ules on >mployees0 Compensation. The Death Certificate of Budge Gicencio clearly indicates that the cause of his death is Cardiopulmonary 'rrest T5C (atal 'rrythmia. 8hether, however, the same was a mere complication of his lung cancer as contended by petitioner :SIS or related to an underlying cardiovascular disease is not established by the records of this case and, thus, remains uncertain. The Supreme Court held that Cardiopulmonary 'rrest T5C (atal 'rrythmia, the cause of death stated in Budge Gicencio0s Death Certificate, should be considered as a cardiovascular disease D a listed disease under 'nne6 ;'< of the 'mended #ules on >mployees0 Compensation. Government 7ervi%e 'nsuran%e 7ystem vs. 2arian +. -i%en%io, :.#. !o. -E@C=/, May /-, /FF?.

Compensable illness; evidence. The degree of proof re*uired under $.D. !o. @/@ is merely substantial evidence, or ;such relevant evidence as a reasonable mind might accept as ade*uate to support a conclusion.< The Supreme Court hasrepeatedly held that to prove compensability, the claimant must ade*uately show that the development of the disease is brought largely by the conditions present in the nature of the %ob. 8hat the law re*uires is a reasonable wor 2 connection and not a direct causal relation. It is enough that the hypothesis on which the wor men0s claim is based is probable. Medical opinion to the contrary can be disregarded especially where there is some basis in the facts for inferring a wor 2 connection. $robability, not certainty, is the touchstone. Government 7ervi%e 'nsuran%e 7ystem 4G7'75 vs. +eresita 7. <e GuCman , :.#. !o. -E=F7?, May /-, /FF?. Due process. #espondent was given ample opportunity to e6plain and rebut the evidence against him. ' full adversarial hearing was not re*uired. The essence of due process is simply the opportunity to be heard. 's applied in administrative proceedings, it is merely an opportunity to e6plain one0s side or an opportunity to see a reconsideration of the action or ruling complained of. $etitioners complied with the twin2notice re*uirement. The notice dated 4ctober -E, /FFF served on respondent was the written notice specifying the charges against him. The subse*uent notice dated (ebruary E, /FF- ,notice of ad%udication specifying therein the causes for respondent0s termination and the decision to dismiss him. served as the written notice of termination. In view of respondent0s valid dismissal due to serious misconduct and loss of trust and confidence, respondent is not entitled to separation pay. +ele%ommuni%ations <istributors 7pe%ialist, 'n%., et al. vs. Raymund Garriel , :.#. !o. -E7?C-, May /A, /FF?. >mployer2employee relationship; evidence. It has long been established that in administrative and *uasi2%udicial proceedings, substantial evidence is sufficient as a basis for %udgment on the e6istence of employer2employee relationship. Substantial evidence, which is the *uantum of proof re*uired in labor cases, is ;that amount of relevant evidence which a reasonable mind might accept as ade*uate to %ustify a conclusion.< !o particular form of evidence is re*uired to prove the e6istence of such employer2employee relationship. 'ny competent and relevant evidence to prove the relationship may be admitted. 3ence, while no particular form of evidence is re*uired, a finding that such relationship e6ists must still rest on some substantial evidence. Moreover, the substantiality of the evidence depends on its *uantitative as well as its *ualitative aspects. In the instant case, save for respondent0s self2serving allegations and self2defeating evidence, there is no substantial basis to warrant the #egional Director0s finding that respondent is an employee of petitioner. &eopleGs #road%asting vs. +$e 7e%retary oE t$e <epartment oE Labor and Employment, et al., :.#. !o. -E?@A/, May C, /FF?. >mployer2employee relationship; e6istence. In order to determine the e6istence of an employer2employee relationship, the Court has fre*uently applied the four2fold test+ ,-. the selection and engagement of the employee; ,/. the payment of wages; ,=. the power of dismissal; and ,7. the power to control the employee0s conduct, or the so called ;control test,< which is considered the most important element. (rom the time they were hired by petitioner corporation up to the time that they were reassigned to wor under :amo0s supervision, their status as petitioner corporation0s employees did not cease. "i ewise, payment of their wages was merely coursed through :amo. 's to the most determinative testXthe power of control, it is sufficient that the power to control the manner of doing the wor e6ists, it does not re*uire the actual e6ercise of such power. In this case, it was in the e6ercise of its power of control when petitioner corporation transferred the copra wor ers from their previous assignments to wor as copraceros. It was also in the e6ercise of the same power that petitioner corporation put :amo in charge of the

copra wor ers although under a different payment scheme. Thus, it is clear that an employer2employee relationship has e6isted between petitioner corporation and respondents since the beginning and such relationship did not cease despite their reassignments and the change of payment scheme. 7out$ <avao <evelopment Company, 'n%., et al. vs. 7ergio L. Gamo, et al., :.#. !o. -E-C-7, May C, /FF?. >mployer2employee relationship; power of D4"> to determine. The D4"> in the e6ercise of its visitorial and enforcement power somehow has to ma e a determination of the e6istence of an employer2employee relationship. Such prerogatival determination, however, cannot be coe6tensive with the visitorial and enforcement power itself. Indeed, such determination is merely preliminary, incidental and collateral to the D4">0s primary function of enforcing labor standards provisions. The determination of the e6istence of employer2employee relationship is still primarily lodged with the !"#C. This is the meaning of the clause ;in cases where the relationship of employer2employee still e6ists< in 'rt. -/C ,b.. Thus, before the D4"> may e6ercise its powers under 'rticle -/C, two important *uestions must be resolved+ ,-. Does the employer2employee relationship still e6ist, or alternatively, was there ever an employer2employee relationship to spea of; and ,/. 're there violations of the "abor Code or of any labor lawT The e6istence of an employer2employee relationship is a statutory prere*uisite to and a limitation on the power of the Secretary of "abor, one which the legislative branch is entitled to impose. The rationale underlying this limitation is to eliminate the prospect of competing conclusions of the Secretary of "abor and the !"#C, on a matter fraught with *uestions of fact and law, which is best resolved by the *uasi2%udicial body, which is the !#"C, rather than an administrative official of the e6ecutive branch of the government. If the Secretary of "abor proceeds to e6ercise his visitorial and enforcement powers absent the first re*uisite, as the dissent proposes, his office confers %urisdiction on itself which it cannot otherwise ac*uire. &eopleGs #road%asting vs. +$e 7e%retary oE t$e <epartment oE Labor and Employment, et al., :.#. !o. -E?@A/, May C, /FF?. Independent contractor. There is permissible %ob contracting when a principal agrees to put out or farm out with a contractor or a subcontractor the performance or completion of a specific %ob, wor or service within a definite or predetermined period, regardless of whether such %ob or wor service is to be performed within or outside the premises of the principal. To establish the e6istence of an independent contractor, we apply the following conditions+ first, the contractor carries on an independent business and underta es the contract wor on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the wor e6cept to the result thereof; and second, the contractor has substantial capital or investments in the form of tools, e*uipment, machineries, wor premises and other materials which are necessary in the conduct of his business. The Implementing #ules and #egulation of the "abor Code defines investmentHas tools, e*uipment, implements, machineries and wor premises, actually and directly used by the contractor or subcontractor in the performance or completion of the %ob, wor , or service contracted out. The investment must be sufficient to carry out the %ob at hand. In the case at bar, :amo and the copra wor ers did not e6ercise independent %udgment in the performance of their tas s. The tools used by :amo and his copra wor ers li e the arit, bolo, pangbunot, panglugit and pangtapo are not sufficient to enable them to complete the %ob. #eliance on these primitive tools is not enough. In fact, the accomplishment of their tas re*uired more e6pensive machineries and e*uipment, li e the truc s to haul the harvests and the drying facility, which

petitioner corporation owns. 7out$ <avao <evelopment Company, 'n%., et al. vs. 7ergio L. Gamo, et al., :.#. !o. -E-C-7, May C, /FF?. "oss of trust and confidence. $etitioner cites 'rticle /C/ of the "abor Code, specifically loss of trust and confidence as the ground for validly dismissing respondent. )nder the law, loss of confidence must be based on ;fraud or willful breach by the employee of the trust reposed in him by his employer or duly authori1ed representative.< In this regard, the Supreme Court has ruled that ordinary breach does not suffice. ' breach of trust is willful if it is done intentionally, nowingly and purposely, without any %ustifiable e6cuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. 3ere, respondent was investigated on and dismissed for misappropriation of company funds through falsification of company documents, as shown in the termination letter. #ecords, nevertheless, neither showed nor convinced us that there was misappropriation of funds that benefited anybody which warranted the dismissal of respondent for the first offense. #espondent admittedly committed padding of accounts and5or paper renewal, which respondent claims to be a practice among salesmen and such claim was not disputed by petitioner. The paper renewal committed by respondent may be considered as falsification, but we agree with the "abor 'rbiter and the C' that such paper renewal did not amount to misappropriation that could %ustify outright dismissal for the first offense, as what petitioner did to respondent. 4therwise, the company rules would not have separated these two offenses under #ule !os. -A and -@. &esides, we agree with the C' that although petitioner did in fact violate company #ule !o. -A by falsifying company records and documents through paper renewal, such falsification has to be *ualified. 7an 2iguel Corporation vs. NLRC, et al. , :.#. !o. -A=?C=, May /@, /FF?. Serious misconduct. #espondent0s acts of forging subscribers0 signatures, attempting to cover up his failure to secure their signatures on the coverage waivers, selling a personally owned mobile phone to a company customer ,a defective one at that. and attempting to connive with other employees to cover up his illicit schemes were serious acts of dishonesty. #espondent0s acts clearly constituted serious misconduct which is a ground for termination of employment by an employer. #espondent0s acts were li ewise grounds for loss of trust and confidence, another valid cause for termination of employment. 4nly employees occupying positions of trust and confidence or those who are routinely charged with the care and custody of the employer0s money or property may be validly dismissed for this reason. +ele%ommuni%ations <istributors 7pe%ialist, 'n%., et al. vs. Raymund Garriel, :.#. !o. -E7?C-, May /A, /FF?. APRIL 2009 Labor Law &ac wages. The Court agrees with the !"#C0s conclusion that petitioner is not entitled to bac wages. 3e never bothered to redeem his driver0s license at the soonest possible time when there was no showing that he was unlawfully prevented by respondent from doing so. Thus, petitioner should not be paid for the time he was not wor ing. The Court has held that where the failure of employees to wor was not due to the employer0s fault, the burden of economic loss suffered by the employees should not be shifted to the employer. >ach party must bear his own loss. It would be unfair to allow petitioner to recover something he has not earned and could not have earned, since he could not discharge his wor as a driver without his driver0s license. #espondent should be e6empted from the burden of paying bac wages. #ernardino -. Navarro vs. &.-. &a0arillo Liner and NLRC, :.#. !o. -@7@C-, 'pril /7, /FF?. &reach of trust. The documentary evidence of petitioner indubitably establishes that respondent committed payroll padding, sold canepoints without the nowledge and

consent of management and misappropriated the proceeds thereof, and rented tractor to another farm and misappropriated the rental payments therefor. These acts constitute willful breach by the employee of the trust reposed in him by his employer D a ground for termination of employment. #a%olodB+alisay Realty and <evelopment Corp., et al. vs. Romeo <ela CruC , :.#. !o. -E?A@=, 'pril =F, /FF?. C&'. Bust li e any other contract, a C&' is the law between the contracting parties and compliance therewith in good faith is re*uired by law. 1F7 &$lippines, 'n%., Ruben +. <el Rosario and '/2 7$ip 2anagement vs. Ronaldo R. &ilar, :.#. !o. -@CE-@, 'pril -@, /FF?. Due process. The Court of 'ppeals correctly held that petitioners did not comply with the proper procedure in dismissing respondent. In other words, petitioners failed to afford respondent due process by failing to comply with the twin notice re*uirement in dismissing him, viCM 4-. a first notice to apprise him of his fault, and ,/. a second notice to him that his employment is being terminated. The letter dated Bune =, -??E sent to respondent was a letter of suspension. It did not comply with the re*uired first notice, the purpose of which is to apprise the employee of the cause for termination and to give him rasonable opportunity to e6plain his side. The confrontation before the barangay council did not constitute the first notice D to give the employee ample opportunity to be heard with the assistance of counsel, if he so desires. 3earings before thebarangay council do not afford the employee ample opportunity to be represented by counsel if he so desires because Section 7-A of the "ocal :overnment Code mandates that ;IiJn all >atarungang pambarangay proceedings, the parties must appear in person without the assistance of counsel or his representatives, e6cept for minors and incompetents who may be assisted by their ne6t2of2 in who are not lawyers.< The re*uirement of giving respondent the first notice not having been complied with, discussions of whether the second notice was complied with is rendered unnecessary. #a%olodB +alisay Realty and <evelopment Corp., et al. vs. Romeo <ela CruC , :.#. !o. -E?A@=, 'pril =F, /FF?. Due process; lac of %urisdiction. The proceedings before the "abor 'rbiter deprived David of due process. M'C") and !'(") filed their complaint against M'C on -/ 'ugust -??=. 'rbiter 4rtiguerra0s decision shows that M'C"), !'("), and M'C were the only parties summoned to a conference for a possible settlement. &ecause of M'C0s failure to appear, 'rbiter 4rtiguerra deemed the case submitted for resolution. David0s resignation from M'C too effect on -A 4ctober -??=. !'(") and M'C") moved to implead Carag and David for the first time only in their position paper dated = Banuary -??7. David did not receive any summons and had no nowledge of the decision against him. The records of the present case fail to show any order from 'rbiter 4rtiguerra summoning David to attend the preliminary conference. Despite this lac of summons, in her Decision dated -E Bune -??7, 'rbiter 4rtiguerra not only granted M'C") and !'(")0s motion to implead Carag and David, she also held Carag and David solidarily liable with M'C. Armando <avid vs.. National Federation oE Labor /nion, et al, :.#. !o. -7C/@= and -7C/E-2E/, 'pril /-, /FF?. 3earing. The guiding principles in connection with the hearing re*uirement in dismissal cases are+ ,a. ;ample opportunity to be heard< means any meaningful opportunity ,verbal or written. given to the employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair, %ust and reasonable way; ,b. a formal hearing or conference becomes mandatory only when re*uested by the employee in writing or substantial evidentiary disputes e6ist or a company rule or practice re*uires it, or when similar circumstances %ustify it;

,c. the ;ample opportunity to be heard< standard in the "abor Code prevails over the ;hearing or conference< re*uirement in the implementing rules and regulations. Feli" #. &ereC, et al. -s. &$ilippine +elegrap$ and +elep$one Company, :.#. !o. -A/F7C, 'pril E, /FF?. Illegal dismissal; abandonment. $etitioner insists that there cannot be any illegal dismissal because in the first place, there was no dismissal to spea of, as it was respondent who abandoned his wor , after finding out that he was being investigated for theft. It is a basic principle that in the dismissal of employees, the burden of proof rests upon the employer to show that the dismissal is for a %ust cause and failure to do so would necessarily mean that the dismissal is not %ustified. $etitioner failed to discharge the burden of proof that complainant was guilty of abandonment. It did not adduce any proof to show that petitioner clearly and une*uivocally intended to abandon his %ob. It has been repeatedly stressed that for abandonment to be a valid cause for dismissal there must be a concurrence of intention to abandon and some overt act from which it may be inferred that the employee had no more interest to continue wor ing in his %ob. 'n employee who forthwith ta es steps to protest his layoff cannot by any logic be said to have abandoned his wor . 4therwise stated, one could not possibly abandon his wor and shortly thereafter vigorously pursue his complaint for illegal dismissal. In the instant case, save for the allegation that respondent did not submit him to the investigation and the latter0s failure to return to wor as instructed in the C (ebruary -??? letter, petitioner was unable to present any evidence which tend to show respondent0s intent to abandon his wor . !either is the Court convinced that the filing of the illegal dismissal case was respondent0s way to avoid the charge of theft. 4n the contrary, the filing of the complaint a few days after his alleged dismissal signified respondent0s desire to return to wor , a factor which further militates against petitioner0s theory of abandonment. 1arbor -ie? Restaurant vs. Reynaldo Labro, :.#. !o. -@C/E=, 'pril =F, /FF?. Illegal dismissal; burden of proof. )nder the "abor Code, as amended, the re*uirements for the lawful dismissal of an employee are two2fold, the substantive and the procedural. !ot only must the dismissal be for a valid or authori1ed cause, the rudimentary re*uirements of due process D notice and hearing D must, li ewise, be observed before an employee may be dismissed. 4ne does not suffice; without their concurrence, the termination would, in the eyes of the law, be illegal. 's the employer, petitioner has the burden of proving that the dismissal of petitioner was for a cause allowed under the law and that petitioner was afforded procedural due process. $etitioner failed to discharge this burden. Indeed, it failed to show any valid or authori1ed cause under the "abor Code which allowed it to terminate the services of individual respondents. !either did petitioner show that individual respondents were given ample opportunity to contest the legality of their dismissal. !o notice of such impending termination was ever given to them. Individual respondents were definitely denied due process. 3aving failed to establish compliance with the re*uirements on termination of employment under the "abor Code, the dismissal of individual respondents was tainted with illegality. 'ligan Cement Corporation vs. 'lias%or Employees and 6or>ers /nionB 7out$ern &$ilippines Federation oE Labor, et al., :.#. !o. -AC?A@, 'pril /7, /FF?. Illegal dismissal; penalty. The worst that respondent committed was an inadvertent infraction. (or that, the e6treme penalty of dismissal imposed on him by petitioners was grossly disproportionate. Ta ing into account the managerial position he held and the prior warning issued to him for failing to communicate with his superiors, the penalty commensurate to the violation he committed should be suspension for three months. GulE Air ,assim 1indri Abdulla$, et al. vs. NLRC, et al. ) :.#. !o. -A?@CE, 'pril /7, /FF?. Intra2union dispute. $ending the final resolution of the intra2union dispute, respondent0s officers remained duly authori1ed to conduct union affairs. <e La 7alle

/niversity, et al. vs. <e La 7alle /niversity Employees Asso%iation 4<L7/EAB NAF+E/5,:.#. !o. -EE/C=, 'pril E, /FF?. "abor only contracting. 8e are not convinced that Gedali is an independent contractor. $etitioner failed to present any service contract with Gedali in the proceedings with the "abor 'rbiter. There is nothing on record that Gedali has a substantial capital or investment to actually perform the service under its own account and responsibility. $etitioner is a mere labor2only contractor because it only supplied wor ers to petitioner to wor at its pier. In a labor2only contract, there are three parties involved+ ,-. the ;labor2only< contractor; ,/. the employee who is ostensibly under the employ of the ;labor2only< contractor; and ,=. the principal who is deemed the real employer. )nder this scheme, the ;labor2only< contractor is the agent of the principal. 'ligan Cement Corporation vs. 'lias%or Employees and 6or>ers /nionB7out$ern &$ilippines Federation oE Labor, et al., :.#. !o. -AC?A@, 'pril /7, /FF?. "iability of corporate officers. 'rticle /-/,e. of the "abor Code, by itself, does not ma e a corporate officer personally liable for the debts of the corporation because Section =- of the Corporation Code is still the governing law on personal liability of officers for the debts of the corporation. There was no showing of David willingly and nowingly voting for or assenting to patently unlawful acts of the corporation, or that David was guilty of gross negligence or bad faith. Armando <avid vs. National Federation oE Labor /nion, et al, :.#. !o. -7C/@= and -7C/E-2E/, 'pril /-, /FF?. "oss of confidence. "oss of trust and confidence, as a valid ground for dismissal, must be based on willful breach of the trust reposed in the employee by his employer. Such breach is willful if it is done intentionally, nowingly, and purposely, without %ustifiable e6cuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. >lsewise stated, it must be based on substantial evidence and not on the employer0s whims or caprices or suspicions; otherwise, the employee would eternally remain at the mercy of the employer. ' condemnation of dishonesty and disloyalty cannot arise from suspicion spawned by speculative inferences. Adam #. Gar%ia vs. NLRC 47e%ond <ivision5 LegaCpi 3il Company, 'n%. Romeo F. 2er%ado and Gus :uluaga ) :.#. !o. -E/CA7, 'pril -@, /FF?. "oss of Confidence. 8ithout undermining the importance of a shipping order or re*uest, the respondents0 evidence is insufficient to clearly and convincingly establish the facts from which the loss of confidence resulted. 4ther than their bare allegations and the fact that such documents came into petitioners0 hands at some point, respondents should have provided evidence of petitioners0 functions, the e6tent of their duties, the procedure in the handling and approval of shipping re*uests and the fact that no personnel other than petitioners were involved. There was, therefore, a patent paucity of proof connecting petitioners to the alleged tampering of shipping documents. The alterations on the shipping documents could not reasonably be attributed to petitioners because it was never proven that petitioners alone had control of or access to these documents. )nless duly proved or sufficiently substantiated otherwise, impartial tribunals should not rely only on the statement of the employer that it has lost confidence in its employee. Feli" #. &ereC, et al. vs. &$ilippine +elegrap$ and +elep$one Company, :.#. !o. -A/F7C, 'pril E, /FF?. $rescription. 'rticles --=? to --AA of the Civil Code provide the general law on prescription of actions. )nder 'rticle --=?, actions prescribe by the mere lapse of time prescribed by law. That law may either be the Civil Code or special laws as specifically mandated by 'rticle --7C. In labor cases, the special law on prescription is 'rticle /?- of the "abor Code. The "abor Code has no specific provision on when a monetary claim accrues. Thus, again the general law on prescription applies D 'rticle --AF of the Civil Code. ,uanaria A. Rivera vs. /nited Laboratories, 'n%., :.#. !o. -AA@=?, 'pril //, /FF?.

#esignation. #esignation is defined as the voluntary act of an employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the e6igency of the service and he has no other choice but to disassociate himself from his employment. #espondent0s resignation can be gleaned from the unambiguous terms of his letter to Captain Cristino. #espondent0s bare claim that he was forced to e6ecute his resignation letter deserves no merit. &are allegations of threat or force do not constitute substantial evidence to support a finding of forced resignation. That such claim was proferred a year later all the more renders his contention bereft of merit. -irgen 7$ipping Corporation, et al. vs. ,esus #. #arra=uio, :.#. !o. -EC-/E, 'pril -@, /FF?. #esignation. $etitioner voluntarily resigned. 3er employer cannot be held liable for constructive dismissal. Gloria Artiaga vs. 7iliman /niversity and 7iliman /niversity 2edi%al Center, :.#. !o. -EC7A=, 'pril -@, /FF?. Security of Tenure. Security of tenure in the career e6ecutive service, which presupposes a permanent appointment, ta es place upon passing the C>S e6aminations administered by the C>S &oard. It is that which entitles the e6aminee to conferment of C>S eligibility and the inclusion of his name in the roster of C>S eligibles. )nder the rules and regulations promulgated by the C>S &oard, conferment of the C>S eligibility is done by the C>S &oard through a formal board resolution after an evaluation has been done of the e6aminee0s performance in the four stages of the C>S eligibility e6aminations. )pon conferment of C>S eligibility and compliance with the other re*uirements prescribed by the &oard, an incumbent of a C>S position may *ualify for appointment to a C>S ran . 'ppointment to a C>S ran is made by the $resident upon the &oard0s recommendation. It is this process which completes the official0s membership in the C>S and confers on him security of tenure in the C>S. $etitioner does not seem to have gone through this definitive process. 't this %uncture, what comes unmista ably clear is the fact that because petitioner lac ed the proper C>S eligibility and therefore had not held the sub%ect office in a permanent capacity, there could not have been any violation of petitioner0s supposed right to security of tenure inasmuch as he had never been in possession of the said right at least during his tenure as Deputy Director for 3ospital Support Services. 3ence, no challenge may be offered against his separation from office even if it be for no cause and at a moment0s notice. !ot even his own self2serving claim that he was competent to continue serving as Deputy Director may actually and legally give even the slightest semblance of authority to his thesis that he should remain in office. &e that as it may, it bears emphasis that, in any case, the mere fact that an employee is a C>S eligible does not automatically operate to vest security of tenure on the appointee inasmuch as the security of tenure of employees in the career e6ecutive service, e6cept first and second2level employees, pertains only to ran and not to the office or position to which they may be appointed. ,ose &epito 2. Amores 2.<. vs. Civil 7ervi%e Commission, #oard oE +rustees oE t$e Lung Center oE t$e &$ilippines as represented by 1on. 2anuel 2. <ayrit and Fernando A. 2elendres, 2.<., G.R. No. 1(!!*3, April *, !!* SSS. The claim for funeral benefits under $.D. !o. @/@, as amended, which was filed after the lapse of -F years by the therein petitioner who had earlier filed a claim for death benefits, had not prescribed. Soledad 2uDos 2esa vs. 7o%ial 7e%urity 7ystem, et al., :.#. !o. -@F7@E, 'pril E, /FF?. Transfer. Burisprudence recogni1es the e6ercise of management prerogative to transfer or assign employees from one office or area of operation to another, provided there is no demotion in ran or diminution of salary, benefits, and other privileges, and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. To determine the validity of the transfer of employees, the employer must show that the transfer is not unreasonable, inconvenient, or pre%udicial to the employee; nor does it involve a demotion in ran or a diminution of his salaries, privileges and

other benefits. Should the employer fail to overcome this burden of proof, the employee0s transfer shall be tantamount to constructive dismissal. 8e have long stated that the ob%ection to the transfer being grounded solely upon the personal inconvenience or hardship that will be caused to the employee by reason of the transfer is not a valid reason to disobey an order of transfer. Such being the case, petitioner cannot adamantly refuse to abide by the order of transfer without e6posing herself to the ris of being dismissed. 3ence, her dismissal was for %ust cause in accordance with 'rticle /C/,a. of the "abor Code. Aileen G. 1erida vs. F4C &a?ns$op and ,e?elry 7tore82ar%elino Florete, ,r., :.#. !o. -E/@F-, 'pril -@, /FF?. )nfair labor practice; burden of proof. $etitioner ma es several allegations that )ST committed )"$. The onus probandi falls on the shoulders of petitioner to establish or substantiate such claims by the re*uisite *uantum of evidence. In labor cases as in other administrative proceedings, substantial evidence or such relevant evidence as a reasonable mind might accept as sufficient to support a conclusion is re*uired. In the petition at bar, petitioner miserably failed to adduce substantial evidence as basis for the grant of relief. /7+ Fa%ulty /nion vs. /niversity oE 7to. +omas, Rev. Fr. Rolando <e la Rosa, Rev Fr. Rodelio Aligan, <omingo Legaspi, and 2ere%edes 1inayon, :.#. !o. -CFC?/, 'pril E, /FF?. #ARC& 2009 Labor Code Compensable illness. Cordero has substantially proved her claim to compensability. )nder Section -,b., #ule III implementing $.D. !o. @/@, sic ness or death is compensable if the cause is included in the list of occupational diseases anne6ed to the #ules. If not so listed, compensation may still be recovered if the illness is caused or precipitated by factors inherent in the employee0s wor and wor ing conditions. 3ere, strict rules of evidence are not applicable since the *uantum of evidence re*uired under $.D. !o. @/@ is merely substantial evidence, which means ;such relevant evidence as a reasonable mind might accept as ade*uate to support a conclusion.< 8hat the law re*uires is a reasonable wor 2connection and not a direct causal relation. It is sufficient that the hypothesis on which the wor men0s claim is based is probable since probability, not certainty, is the touchstone. Government 7ervi%e 'nsuran%e 7ystem -s. 2aria +eresa 7.A. Cordero8Employees Compensation Commission -s. 2aria +eresa 7.A. Cordero , :.#. !o. -E-=EC5:.#. !o. -E-=CC, March -E, /FF?. Constructive dismissal. Case law holds that constructive dismissal occurs when there is cessation of wor because continued employment is rendered impossible, unreasonable or unli ely; when there is a demotion in ran or diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee. #espondent0s sudden, arbitrary and unfounded adoption of the two2day wor scheme which greatly reduced petitioners0 salaries renders it liable for constructive dismissal. Fe la Rosa, et al. -s. Ambassador 1otel, :.#. !o. -EEFA?, March -=, /FF?. Declaration of illegality of stri e. 'rticle /@7,e. of the "abor Code prohibits any person engaged in pic eting from obstructing the free ingress to and egress from the employer0s premises. Since respondent was found in the Buly -E, -??C decision of the !"#C to have prevented the free entry into and e6it of vehicles from petitioner0s compound, respondent0s officers and employees clearly committed illegal acts in the course of the March ?, -??C stri e. The use of unlawful means in the course of a stri e renders such stri e illegal. Therefore, pursuant to the principle of conclusiveness of %udgment, the March ?, -??C stri e was ipso facto illegal. The filing of a petition to declare the stri e illegal was thus unnecessary. ,a%>bilt 'ndustries, 'n%. -s. ,a%>bilt Employees 6or>ers /nionBNaEluBA2/ , :.#. !o. -E-@-C2 -?, March -=, /FF?.

>mployment of registered nurse. 'rticle -AE does not re*uire the engagement of full2time nurses as regular employees of a company. )nder 'rticle -AE, Shangri2la, which employs more than /FF wor ers, is mandated to ;furnish< its employees with the services of a full2time registered nurse, a part2time physician and dentist, and an emergency clinic which means that it should provide or ma e available such medical and allied services to its employees, not necessarily to hire or employ a service provider. 8hile it is true that the provision re*uires employers to engage the services of medical practitioners in certain establishments depending on the number of their employees, nothing is there in the law which says that medical practitioners so engaged be actually hired as employees. The law only re*uires the employer ;to retain<, not employ, a part2time physician who needed to stay in the premises of the non2ha1ardous wor place for two ,/. hours. The phrase ;services of a full2time registered nurse< should thus be ta en to refer to the ind of services that the nurse will render in the company0s premises and to its employees, not the manner of his engagement. ,erome <. Es%asinas, et al. -s. 7$angriBlaGs 2a%tan 'sland Resort, et al., :.#. !o. -ECC/E, March 7, /FF?. $art2time employment. (or a private school teacher to ac*uire permanent status in employment, the following re*uisites must concur+ ,-. the teacher is a full2time teacher; ,/. the teacher must have rendered three consecutive years of service; and ,=. such service must have been satisfactory. The burden is on petitioners to prove their affirmative allegation that they are permanent teaching personnel. 3owever, there is not enough evidence on record to show that their total wor ing day is devoted to the school. There is no showing of what the regular wor schedule of a regular teacher in respondent school is. 8hat is clear in the records is that >velyn and 'lwyn spent two hours and four hours, respectively, but not the entire wor ing day, at the respondent school. They do not meet re*uirement ;c< of Section 7A of the Manual. 3ence, we sustain the findings of the Court of 'ppeals that the petitioners are part2time teachers. &eing part2time teachers,they cannot ac*uire permanent status. 7pouses Al?yn 3ng Lim and Evelyn Lu>ang Lim -s. LegaCpi 1ope C$ristian 7%$ool, et al., :.#. !o. -E/C-C, March =-, /FF?.

P*erc*+, -.e Cor%ora-e (e*! /or Labor C!a*01 &antran%o Employees Asso., et al. vs. NLRC, et al.8&$ilippine National #an> -s. &antran%o Employees Asso%iation 'n%., et al., :.#. !o. -EF@C?5:.#. !o. -EFEFA, March -E, /FF?, is an interesting case wherein former employees of a company sought to satisfy their unpaid labor claims against another company that eventually ac*uired, and then sold, the employer company. The :on1ales family owned two corporations, namely, the $antranco !orth >6press, Inc. ,$!>I. and Macris #ealty Corporation ,Macris.. $!>I provided transportation services to the public, and had its bus terminal at the corner of Lue1on and #oosevelt 'venues in Lue1on City. The terminal stood on four valuable pieces of real estate , nown as $antranco properties. registered under the name of Macris. The :on1ales family later incurred huge financial losses despite attempts of rehabilitation and loan infusion. In March -?EA, their creditors too over the management of $!>I and Macris. &y -?EC, full ownership was transferred to one of their creditors, the !ational Investment Development Corporation ,!IDC., a subsidiary of the $!&. Macris was later renamed as the !ational #ealty Development Corporation ,!aredeco. and eventually merged with the !ational 8arehousing Corporation ,!awaco. to form the new $!& subsidiary, the $!&2Madecor. In -?CA, !IDC sold $!>I to !orth >6press Transport, Inc. ,!>TI., a company owned by :regorio 'raneta III. In -?C@, $!>I was among the several companies placed under se*uestration by the $residential Commission on :ood :overnment ,$C::. shortly after the historic events in >DS'. In Banuary -?CC, $C:: lifted the

se*uestration order to pave the way for the sale of $!>I bac to the private sector through the 'sset $rivati1ation Trust ,'$T.. '$T thus too over the management of $!>I. In -??/, $!>I applied with the Securities and >6change Commission ,S>C. for suspension of payments. ' management committee was thereafter created which recommended to the S>C the sale of the company through privati1ation. 's a cost2 saving measure, the committee li ewise suggested the retrenchment of several $!>I employees. >ventually, $!>I ceased its operation. 'long with the cessation of business came the various labor claims commenced by the former employees of $!>I where the latter obtained favorable decisions. 4n Buly A, /FF/, the "abor 'rbiter issued the Si6th 'lias 8rit of >6ecution commanding the !ational "abor #elations Commission ,!"#C. sheriffs to levy on the assets of $!>I in order to satisfy the $E//,E/E,-AF.// due its former employees, as full and final satisfaction of the %udgment awards in the labor cases. The sheriffs were li ewise instructed to proceed against $!&, $!&2Madecor and Mega $rime. In implementing the writ, the sheriffs levied upon the four valuable pieces of real estate located at the corner of Lue1on and #oosevelt 'venues, on which the former $antranco &us Terminal stood. These properties were covered by Transfer Certificate of Title ,TCT. !os. CECC-2CECC7, registered under the name of $!&2 Madecor. Subse*uently, !otice of Sale of the foregoing real properties was published in the newspaper and the sale was set on Buly =-, /FF/. 3aving been notified of the auction sale, motions to *uash the writ were separately filed by $!&2Madecor and Mega $rime, and $!&. They li ewise filed their Third2$arty Claims. $!&2Madecor anchored its motion on its right as the registered owner of the $antranco properties, and Mega $rime as the successor2in2interest. (or its part, $!& sought the nullification of the writ on the ground that it was not a party to the labor case. In its Third2$arty Claim, $!& alleged that $!&2Madecor was indebted to the former and that the $antranco properties would answer for such debt. 4n September -F, /FF/, the "abor 'rbiter declared that the sub%ect $antranco properties were owned by $!&2Madecor. It being a corporation with a distinct and separate personality, its assets could not answer for the liabilities of $!>I. Considering, however, that $!&2Madecor e6ecuted a promissory note in favor of $!>I for $E,CC7,FFF.FF, the writ of e6ecution to the e6tent of the said amount was concerned was considered valid. $!&0s third2party claim D to nullify the writ on the ground that it has an interest in the $antranco properties being a creditor of $!&2 Madecor, D on the other hand, was denied because it only had an inchoate interest in the properties. The !"#C affirmed the "abor 'rbiter0s decision. The C' also affirmed the !"#C0s decision. The appellate court pointed out that $!&, $!&2Madecor and Mega $rime are corporations with personalities separate and distinct from $!>I. 's such, there being no cogent reason to pierce the veil of corporate fiction, the separate personalities of the above corporations should be maintained. The C' added that the $antranco properties were never owned by $!>I; rather, their titles were registered under the name of $!&2Madecor. If $!& and $!&2Madecor could not answer for the liabilities of $!>I, with more reason should Mega $rime not be held liable being a mere successor2in2interest of $!&2Madecor. The former $!>I employees argued before the Supreme Court that $!&, through $!&2Madecor, directly benefited from the operation of $!>I and had complete control over the funds of $!>I. 3ence, they are solidarily answerable with $!>I for the unpaid money claims of the employees. Citing '.C. #ansom "abor )nion2CC") v. !"#C, the employees insist that where the employer corporation ceases to e6ist and is no longer able to satisfy the %udgment awards in favor of its employees, the owner of the employer corporation should be made %ointly and severally liable. The Supreme Court ruled that the former $!>I employees cannot attach the properties

,specifically the $antranco properties. of $!&, $!&2Madecor and Mega $rime to satisfy their unpaid labor claims against $!>I. 'ccording to the Supreme Court+ ;(irst, the sub%ect property is not owned by the %udgment debtor, that is, $!>I. !owhere in the records was it shown that $!>I owned the $antranco properties. $etitioners, in fact, never alleged in any of their pleadings the fact of such ownership. 8hat was established, instead, in $!& M'D>C4# v. )y and $!& v. Mega $rime #ealty and 3oldings Corporation5Mega $rime #ealty and 3oldings Corporation v. $!& was that the properties were owned by Macris, the predecessor of $!&2 Madecor. 3ence, they cannot be pursued against by the creditors of $!>I. 8e would li e to stress the settled rule that the power of the court in e6ecuting %udgments e6tends only to properties un*uestionably belonging to the %udgment debtor alone. To be sure, one man0s goods shall not be sold for another man0s debts. ' sheriff is not authori1ed to attach or levy on property not belonging to the %udgment debtor, and even incurs liability if he wrongfully levies upon the property of a third person. Second, $!&, $!&2Madecor and Mega $rime are corporations with personalities separate and distinct from that of $!>I. $!& is sought to be held liable because it ac*uired $!>I through !IDC at the time when $!>I was suffering financial reverses. $!&2Madecor is being made to answer for petitioners0 labor claims as the owner of the sub%ect $antranco properties and as a subsidiary of $!&. Mega $rime is also included for having ac*uired $!&0s shares over $!&2Madecor. The general rule is that a corporation has a personality separate and distinct from those of its stoc holders and other corporations to which it may be connected. This is a fiction created by law for convenience and to prevent in%ustice. 4bviously, $!&, $!&2Madecor, Mega $rime, and $!>I are corporations with their own personalities. The ;separate personalities< of the first three corporations had been recogni1ed by this Court in $!& v. Mega $rime #ealty and 3oldings Corporation5Mega $rime #ealty and 3oldings Corporation v. $!& where we stated that $!& was only a stoc holder of $!&2Madecor which later sold its shares to Mega $rime; and that $!&2Madecor was the owner of the $antranco properties. Moreover, these corporations are registered as separate entities and, absent any valid reason, we maintain their separate identities and we cannot treat them as one. !either can we merge the personality of $!>I with $!& simply because the latter ac*uired the former. Settled is the rule that where one corporation sells or otherwise transfers all its assets to another corporation for value, the latter is not, by that fact alone, liable for the debts and liabilities of the transferor. "astly, while we recogni1e that there are peculiar circumstances or valid grounds that may e6ist to warrant the piercing of the corporate veil, none applies in the present case whether between $!& and $!>I; or $!& and $!&2Madecor. )nder the doctrine of ;piercing the veil of corporate fiction,< the court loo s at the corporation as a mere collection of individuals or an aggregation of persons underta ing business as a group, disregarding the separate %uridical personality of the corporation unifying the group. 'nother formulation of this doctrine is that when two business enterprises are owned, conducted and controlled by the same parties, both law and e*uity will, when necessary to protect the rights of third parties, disregard the legal fiction that two corporations are distinct entities and treat them as identical or as one and the same. 8hether the separate personality of the corporation should be pierced hinges on obtaining facts appropriately pleaded or proved. 3owever, any piercing of the corporate veil has to be done with caution, albeit the Court will not hesitate to disregard the corporate veil when it is misused or when necessary in the interest of %ustice. 'fter all, the concept of corporate entity was not meant to promote unfair ob%ectives.

's between $!& and $!>I, petitioners want us to disregard their separate personalities, and insist that because the company, $!>I, has already ceased operations and there is no other way by which the %udgment in favor of the employees can be satisfied, corporate officers can be held %ointly and severally liable with the company. $etitioners rely on the pronouncement of this Court in '.C. #ansom "abor )nion2CC") v. !"#C and subse*uent cases. This reliance fails to persuade. 8e find the aforesaid decisions inapplicable to the instant case. (or one, in the said cases, the persons made liable after the company0s cessation of operations were the officers and agents of the corporation. The rationale is that, since the corporation is an artificial person, it must have an officer who can be presumed to be the employer, being the person acting in the interest of the employer. The corporation, only in the technical sense, is the employer. In the instant case, what is being made liable is another corporation ,$!&. which ac*uired the debtor corporation ,$!>I.. Moreover, in the recent cases Carag v. !ational "abor #elations Commission and Mc"eod v. !ational "abor #elations Commission, the Court e6plained the doctrine laid down in 'C #ansom relative to the personal liability of the officers and agents of the employer for the debts of the latter. In 'C #ansom, the Court imputed liability to the officers of the corporation on the strength of the definition of an employer in 'rticle /-/,c. ,now 'rticle /-/IeJ. of the "abor Code. )nder the said provision, employer includes any person acting in the interest of an employer, directly or indirectly, but does not include any labor organi1ation or any of its officers or agents e6cept when acting as employer. It was clarified in Carag and Mc"eod that 'rticle /-/,e. of the "abor Code, by itself, does not ma e a corporate officer personally liable for the debts of the corporation. It added that the governing law on personal liability of directors or officers for debts of the corporation is still Section =- of the Corporation Code. More importantly, as aptly observed by this Court in 'C #ansom, it appears that #ansom, foreseeing the possibility or probability of payment of bac wages to its employees, organi1ed #osario to replace #ansom, with the latter to be eventually phased out if the stri ers win their case. The e6ecution could not be implemented against #ansom because of the disposition posthaste of its leviable assets evidently in order to evade its %ust and due obligations. 3ence, the Court sustained the piercing of the corporate veil and made the officers of #ansom personally liable for the debts of the latter. Clearly, what can be inferred from the earlier cases is that the doctrine of piercing the corporate veil applies only in three ,=. basic areas, namely+ -. defeat of public convenience as when the corporate fiction is used as a vehicle for the evasion of an e6isting obligation; /. fraud cases or when the corporate entity is used to %ustify a wrong, protect fraud, or defend a crime; or =. alter ego cases, where a corporation is merely a farce since it is a mere alter ego or business conduit of a person, or where the corporation is so organi1ed and controlled and its affairs are so conducted as to ma e it merely an instrumentality, agency, conduit or ad%unct of another corporation. In the absence of malice, bad faith, or a specific provision of law ma ing a corporate officer liable, such corporate officer cannot be made personally liable for corporate liabilities. The Court ruled that assuming, for the sa e of argument, that $!& may be held liable for the debts of $!>I, petitioners still cannot proceed against the $antranco properties, the same being owned by $!&2Madecor, notwithstanding the fact that $!&2Madecor was a subsidiary of $!&. The general rule remains that $!&2Madecor has a personality separate and distinct from $!&. The mere fact that a corporation owns all of the stoc s of another corporation, ta en alone, is not sufficient to %ustify their being treated as one entity. If used to perform legitimate functions, a subsidiary0s separate e6istence shall be respected, and the liability of the parent

corporation as well as the subsidiary will be confined to those arising in their respective businesses.