Anda di halaman 1dari 182

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty.

Demegillo
Compiled by: Clint M. Maratas LLB

LABOR RELATIONS
First Semester S.Y. 2013-14 Base !" t#e s$%%a&'s !( Att$. )#e*ie +. ,eme-i%%! )!m.i%e &$/ )%i"t 0. 0aratas I. E0PLOYER-E0PLOYEE RELATIONS1IP 1. Em.%!$er 2Art. 2113 .ar. E4 Article 212(e) E0PLOYER includes any person acting in the interest o an employer directly or indirectly. !he term shall not include any labor organi"ation or any o its o icers or agents e#cept $hen acting as an employer. 2. Em.%!$ee 2Art. 2113 .ar. F4 Article 212 ( ) E0PLOYEE includes any person in ht employ o an employer. !he term shall not be limited to the employees o a particular employee% unless this code so e#pressly states. &t shall include any indi'idual $hose $or( has ceased as a result o or in connection $ith any current labor dispute or because o any other substantially e)ui'alent and regular employment. *mployer may be: 1. natural 2. +uridical *mployee only natural persons may )uali y as an employee. &t could be ,ilipino citi"ens and oreigners

3espondent BCC countered that petitioner $as not its employee but that o 9obien ,ood Corp. (9,C)% its ma+or creditor and supplier. 9,C had posted him as its comptroller in BCC to o'ersee BCC<s inance and business operations and to loo( a ter 9,C<s interests or in'estments in BCC. 4hich contention is more meritorious= R'%i"-/ !hat o BCC. !he 9upreme Court<s (9C) perusal o the a ida'it o petitioner compels a conclusion similar to that reached by the Court o Appeals (CA) and the Labor Arbiter to the e ect that the a ida'it supported the contention that petitioner had really $or(ed in BCC as 9,C<s representati'e. &t does seem more natural and more belie'able that petitioner<s a ida'it $as re erring to his employment by 9,C e'en $hile he $as reporting to BCC as a comptroller in behal o 9,C. As respondents pointed out% it $as implausible or 9,C to still post him to o'ersee and super'ise the collections o accounts recei'ables due rom BCC beyond 2ecember 1::; i % as he insisted% BCC had already illegally dismissed him and had e'en pre'ented him rom entering the premises o BCC. >i'en the patent animosity and strained relations bet$een him and respondents in such circumstances% indeed% ho$ could he still e iciently per orm in behal o 9,C the essential responsibility to ?o'ersee and super'ise collections@ at BCC= 9urely% respondents $ould ha'e 'igorously ob+ected to any arrangement $ith 9,C in'ol'ing him. 4e note that petitioner e#ecuted the a ida'it in March 1::A to re ute a statement !y himsel made in his o$n a ida'it dated 2ec. 11% 1::; to the e ect that petitioner had illegally appropriated some chec(s $ithout authority rom BCC. 1etitioner thereby sought to sho$ that he had the authority to recei'e the chec(s pursuant to the arrangements bet$een 9,C and BCC. !his sho$ing $ould aid in ending o the criminal charge respondents iled against him arising rom his mishandling o the chec(s. 7aturally% the circumstances petitioner ad'erted to in his March 1::A a ida'it concerned those occurring be ore 2ecember 11% 1::;% the same period $hen he actually $or(ed as comptroller in BCC (Charlie 8ao 's. BCC 1roducts 9ales &nc. and !errance !y% >.3. 7o. 1A5B//% April 1C% 2/12). *mployer0employee relationship. &n determining the presence or absence o an employer0employee relationship% the Court has consistently loo(ed or the ollo$ing incidents% to $it: (a) the selection and engagement o the employeeD (b) the payment o

-iring o employees ,oreigners Art. ./0.2% 12 ..2 applies ,ilipino0 there is none. !he Constitution and the Labor Code encourage the employment o ,ilipinos. 3. Test t! ,etermi"e t#e E5iste"6e !( Em.%!$er-Em.%!$ee Re%ati!"s#i. FOUR-FOL, TEST 1. 3ight to -ire 2. 1ayment o 4ages 5. 1o$er o 2ismissal .. Control o'er the conduct o 4or( a" that and 6ct. rom

)ases/ )#ar%ie 7a! 8s. B))I Pr! '6ts Sa%es I"6. Terra"6e T$3 9.R. N!. 1:3;003 A.ri% 1<3 2012. FA)TS/ 1*!&!&67*3 Charlie 8ao alleged respondents BCC 1roduct 9ales% &nc. (BCC) !errance !y employed him as a comptroller. 6n 1:% 1::;% the security guards o BCC barred him entering its premises.

1E1age

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

$agesD (c) the po$er o dismissalD and (d) the employer<s po$er to control the employee on the means and methods by $hich the $or( is accomplished. !he last element% the so0called control test% is the most important element. &t can be deduced rom the March 1::A a ida'it o petitioner that respondents challenged his authority to deli'er some 1;C chec(s to 9,C. Considering that petitioner contested respondents< challenge by pointing to the e#isting arrangements bet$een BCC and 9,C% it should be clear that respondents did not e#ercise the po$er o control o'er petitioner% because he thereby acted or the bene it and in the interest o 9,C more than o BCC. 7OSE 0EL BERNARTE3 8s. P1ILIPPINE BAS+ETBALL ASSO. 2PBA43 7OSE E00ANUEL 0. EALA3 a" PERRY 0ARTINE=3 9.R. N!. 1>20<43 Se.tem&er 143 2011 Fa6ts/ 1*!&!&67*3 8ose Mel Bernate $or(ed as one o the re erees o the 1hilippine Bas(etball Association (1BA). -e entered into t$o contracts as a retainer $ith the 1BA in the year 2//5. !he irst contract $as or 8an. 1% 2//5 to 8uly 1;% 2//5D and the second $as or 9ept. 1 to 2ecember 2//5. A ter the lapse o the later period% 1BA decided not to rene$ his contract% citing his unsatis actory per ormance on and o the court. Maintaining he is a regular employee% Bernate iled a complaint or illegal dismissal against 1BA. 2id his case prosper= R'%i"-/ 7o. 4e agree $ith respondents that once on the playing court% the re erees e#ercise their o$n independent +udgment% based on the rules o the game% as to $hen and ho$ a call or decision is to be made. !he re erees decide $hether an in raction $as committed% and the 1BA cannot o'errule them once the decision is made on the playing court. !he re erees are the only% absolute% and authority on the playing court. inal

$ee( spread o'er an a'erage o only 1/; playing days a year% and they o iciate games at an a'erage o t$o hours per gameD and (2) the only deductions rom the ees recei'ed by the re erees are $ithholding ta#es. &n other $ords% unli(e regular employees $ho ordinarily report or $or( eight hours per day or i'e days a $ee(% petitioner is re)uired to report or $or( only $hen 1BA games are scheduled or three times a $ee( at t$o hours per game. &n addition% there are no deductions or contributions to the 9ocial 9ecurity 9ystem% 1hilhealth or 1ag0&big% $hich are the usual deductions rom employees< salaries. !hese undisputed circumstances buttress the act that petitioner is an independent contractor% and not an employee o respondents. (8ose Mel Bernarte 's. 1hilippine Bas(etball Association (1BA)% et. al.% >.3. 7o. 1:2/C.% 9ept. 1.% 2/11) 0ARTI)IO SE0BLANTE a" ,UBRI)+ PILAR3 8s. )OURT OF APPEALS3 1>T1,IVISION3 "!? SPE)IAL FOR0ER 1>T1 ,IVISION3 9ALLERA ,E 0AN,AUE @SPOUSES VI)ENTE a" 0ARIA LUISA LOOT39.R. N!. 1>:42:3 A'-'st 1A3 2011 FA)TS/ 1*!&!&67*39 Marticio 9emblante and 2ubric( 1ilar $ere hired by pri'ate respondents Ficente and Maria Luisa Loot as o icial masiador and sentenciador% respecti'ely% o their >allera de Mandaue% a coc(pit. As the masiador% 9emblante $ould call and ta(e the bets rom the gamecoc( o$ners and other bettors and order the start o the coc( ight. -e $ould also distribute the $innings a ter deducting the arriba% or the commission or the coc(pit. As the sentenciador% 1ilar $ould o'ersee the proper ga ing o ighting coc(s determine the ighting coc(s< physical condition and capabilities to continue the coc( ight% and e'entually declare the result o the coc( ight. ,or their ser'ices as masiador and sentenciador% 9emblante $as paid 12%/// per $ee( or 1C%/// per month% $hile 1ilar $as paid 15%;// a $ee( or 11.%/// a month. !hey $or(ed e'ery !uesday% 4ednesday% 9aturday and 9unday e'ery $ee(% e#cluding monthly derbies and coc( ights held on special holidays. &n a complaint or illegal dismissal% the Labor Arbiter ound petitioners to be regular employees o respondents. &n their appeal to the 7ational Labor 3elations Commission (7L3C)% respondents belatedly put up an appeal bond. !he 7L3C a ter a Motion or 3econsideration by respondents% entertained the appeal and ound that there $as no employer0employee relationship bet$een petitioners

3espondents or any o the 1BA o icers cannot and do not determine $hich calls to ma(e or not to ma(e and cannot control the re eree $hen he blo$s the $histle because such authority e#clusi'ely belongs to the re erees. !he 'ery nature o petitioner<s +ob o o iciating a pro essional bas(etball game undoubtedly calls or reedom o control by respondents. Moreo'er% the ollo$ing circumstances indicate that petitioner is an independent contractor: (1) the re erees are re)uired to report or $or( only $hen 1BA games are scheduled% $hich is three times a

2E1age

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

and respondents. !he Court o Appeals (CA) upheld the decision o the 7L3C. Can the decision be +usti ied= R'%i"-/ Ges. 4hile respondents had ailed to post their bond $ithin the 1/0day period pro'ided abo'e% it is e'ident% on the other hand% that petitioners are not employees o respondents% since their relationship ails to pass muster the our0 old test o employment 4e ha'e repeatedly mentioned in countless decisions: (1) the selection and engagement o the employeeD (2) the payment o $agesD (5) the po$er o dismissalD and (.) the po$er to control the employee<s conduct% $hich is the most important element. As ound by both the 7L3C and the CA% respondents had no part in petitioners< selection and managementD petitioners< compensation $as paid out o the arriba ($hich is a percentage deducted rom the total bets)% not by petitionersD and petitioners per ormed their unctions as masiador and sentenciador ree rom the direction and control o respondents. &n the conduct o their $or(% petitioners relied mainly on their ?e#pertise that is characteristic o the coc( ight gambling%@ and $ere ne'er gi'en by respondents any tool needed or the per ormance o their $or(. 3espondents% not being petitioners< employers% could ne'er ha'e dismissed% legally or illegally% petitioners% since respondents $ere $ithout po$er or prerogati'e to do so in the irst place. !he rule on the posting o an appeal bond cannot de eat the substanti'e rights o respondents to be ree rom an un$arranted burden o ans$ering or an illegal dismissal or $hich they $ere ne'er responsible. (Marticio 9emblante and 2ubric( 1ilar 's. CA% >.3. 7o. 1:A.2A% Aug. 1;% 2/11). )R) A9RI)ULTURAL TRA,IN9 a" ROLAN,O B. )ATIN,I93 8s. NLR) B ROBERTO OBIAS3 9.R. N!. 1;;::43 ,e6. 233 200> FA)TS/ 1*!&!&67*39 opposed respondent 3oberto 6bia<s complaint claiming that he $as a seasonal dri'er $hose $or( $as irregular and not i#ed. -e $as paid 11B; daily but under a ?no $or(0 no pay@ basis. -e $as also gi'en a daily allo$ance o 11./.// to 12//.//. &n April 2//5% he $or(ed only or 1; days% or $hich he $as paid the agreed $ages. 4as there an employer0employee relationship that e#isted bet$een petitioners and 6bias= R'%i"-C Ges. !he elements to determine the e#istence o an employment relationship are: (1) the selection and engagement o the employeeD (2) the

payment o $agesD (5) the po$er o dismissalD and (.) the employer<s po$er to control the employee<s conduct. The most important element is the employers control of the employees conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it. All the our elements are present in this case. ,irst% the petitioners engaged the ser'ices o the respondent in 1::;. 9econd% the petitioners paid the respondent a daily $age o 11B;.//% $ith allo$ances ranging rom 11./.// to 12//.// per day. !he act the respondent $as paid under a ?no $or(0no pay@ scheme% assuming this claim to be true% is not signi icant. !he ?no $or(0no pay@ scheme is merely a method o computing compensation% not a basis or determining the e#istence or absence o employer0 employee relationship. !hird% the petitioners< po$er to dismiss the respondent $as inherent in the act that they engaged the ser'ices o the respondent as a dri'er. ,inally% a care ul re'ie$ o the record sho$s that the respondent per ormed his $or( as dri'er under the petitioners< super'ision and control. 1etitioners determined ho$% $here% and $hen the respondent per ormed his tas(. !hey% in act% re)uested the respondent to li'e inside their compound so he (respondent) could be readily a'ailable $hen the petitioners needed his ser'ices. Hndoubtedly% the petitioners e#ercised control o'er the means and methods by $hich the respondent accomplished his $or( as a dri'er. 4e conclude rom all these that an employer0 employee relationship e#isted bet$een the petitioners and respondent (C3C Agricultural !rading and 3olando B. Catindig 's. 7L3C and 3oberto 6bias% >.3. 7o. 1BBAA.% 2ecember 25% 2//:). ,EAL)O FAR0S3 IN).3 8s. NLR) et.a%. 9.R. N!. 1A31>23 7a". 303 200> FA)TS/ 1etitioner 2ealco ,arms is a corporation engaged in the business o importation% production% attening and distribution o li'e cattle or sale to meat dealers% meat traders% meat processors% canned good manu acturers and other dealers in Mindanao and in Metro Manila. 1etitioner imports cattle by the boatload rom Australia into the ports o >eneral 9antos City% 9ubic% Batangas% or Manila. &n turn% these imported cattle are transported to% and housed in% petitioner<s arms in 1olomolo(% 9outh Cotabato% or in Magalang% 1ampanga% or attening until the cattle indi'idually reach the mar(et $eight o .5/ to .;/ (ilograms.

5E1age

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

3espondents Albert Caban and Chi)uito Bastida $ere hired by petitioner on 8une 2;% 1::5 and 6ctober 2:% 1::.% respecti'ely% as escorts or IcomboysI or the transit o li'e cattle rom >eneral 9antos City to Manila. 3espondents< $or( entailed tending to the cattle during transportation. &t included eeding and re)uently sho$ering the cattle to pre'ent dehydration and to de'elop heat resistance. 6n the $hole% respondents ensured that the cattle $ould be sa e rom harm or death caused by a cattle ight or any such similar incident. Hpon arri'al in Manila% the cattle are turned o'er to and recei'ed by the duly ac(no$ledged buyers or customers o petitioner% at $hich point% respondents< $or( ceases. ,or e'ery round trip tra'el $hich lasted an a'erage o 12 days% respondents $ere each paid 11%;//.//. !he 120day period is occasionally e#tended $hen petitioner<s customers are delayed in recei'ing the cattle. &n a month% respondents usually made t$o trips. 6n August 1:% 1:::% respondents $ere told by 2ealco<s hepe de 'ia+e that their replacement had been e ected immediately% but no reason $as gi'en or their replacement. 3espondents attempted to meet $ith petitioner but ailed. 1etitioner denies the e#istence o an employer0 employee relationship $ith respondents% claiming that: (a) respondents are independent contractors $ho o er IcomboyI ser'ices to 'arious shippers and traders o cattle% not only to petitionerD (b) in the per ormance o $or( on board the ship% respondents are ree rom the control and super'ision o the cattle o$ner since the latter is interested only in the result thereo D (c) in the alternati'e% respondents can only be considered as casual employees per orming $or( not necessary and desirable to the usual business or trade o petitioner% i.e.% cattle attening to mar(et $eight and productionD and (d) respondents li(e$ise ailed to complete the one0year ser'ice period% $hether continuous or bro(en% set orth in Article 2C/ o the Labor Code% as petitioner<s shipments $ere substantially reduced in 1::C01:::% thereby limiting the escort or IcomboyI acti'ity or $hich respondents $ere employed. ISSUE/ 4hether or not an employer0employee relationship e#isted bet$een petitioner and respondents and there ore the latter<s termination $as illegal. 1EL,/ Complainant<s tas( o escorting the li'estoc( shipped to Manila% ta(ing care o the li'estoc( in transit% is an acti'ity $hich is necessary and desirable in the usual business or trade o

respondent. &t is o +udicial notice that the bul( o the mar(et or li'estoc( o big li'estoc( raisers such as respondent is in Manila. -ogs do not s$im% they are shipped. !he careta(er is a component o the business% a part o the scheme o the operation. More% it also appears that respondents had rendered ser'ice or more than one year doing the same tas( repeatedly% thus% e'en assuming they $ere casual employees they may be considered regular employees $ith respect to the acti'ity in $hich they $ere employed and their employment shall continue $hile such acti'ity e#ists (last par. o Art. 2C/). &n the case at bench% both the Labor Arbiter and the 7L3C $ere one in their conclusion that respondents $ere not independent contractors% but employees o petitioner. &n determining the e#istence o an employer0employee relationship bet$een the parties% both the Labor Arbiter and the 7L3C e#amined and $eighed the circumstances against the our0 old test $hich has the ollo$ing elements: (1) the po$er to hire% (2) the payment o $ages% (5) the po$er to dismiss% and (.) the po$er to control the employees< conduct% or the so0called Icontrol test.I 6 the our% the po$er o control is the most important element. More importantly% the control test merely calls or the e#istence o the right to control% and not necessarily the e#ercise thereo . !he presence o the our (.) elements in the determination o an employer0employee relationship has been clearly established by the acts and e'idence on record% starting $ith the admissions o petitioner $ho ac(no$ledged the engagement o respondents as escorts o their cattles shipped rom >eneral 9antos to Manila% and the compensation o the latter at a ee o 11%;//.// per trip !he element o control% +urisprudentially considered the most essential element o the our% has not been demolished by any e'idence to the contrary. !he branch has noticed that the preparation o the shipment o cattle% manning and eeding them $hile in transit% and ma(ing a report upon their return to >eneral 9antos that the cattle shipped and $hich reached Manila actually tallied $ere all indicators o instructions% super'ision and control by JpetitionerK on Jrespondents<K per ormance o $or( as escorts or $hich they $ere hired. !his $e agree on all ours. !he li'estoc( shipment $ould cost thousands o pesos and the certainty o it reaching its destination $ould be the only thing any operator $ould consider at all time and under all circumstances. &t is illogical or JpetitionerK to argue that the shipment $as not necessary or desirable to their business% as their business $as mainly li'estoc( production% because

.E1age

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

they $ere undeniably the o$ners o the cattle escorted by respondents. 9hould losses o a shipment occur due to respondents< neglect these $ould still be petitioners< loss% and nobody else<s. Considering that $e ha'e sustained the Labor Arbiter<s and the 7L3C<s inding o an employer0 employee relationship bet$een the parties% $e li(e$ise sustain the administrati'e bodies< inding o respondents< illegal dismissal. Accordingly% $e are not $ont to disturb the a$ard o separation pay% claims or C6LA and union ser'ice ees i#ed at 1/L o the total monetary a$ard% as these $ere based on the inding that respondents $ere dismissed $ithout +ust or authori"ed cause. WPP 0AR+ETIN9 )O00UNI)ATIONS3 IN).3 et. A%. 8s. 7O)ELYN 0. 9ALERA3 9.R. N!. 1:>20;3 0ar6# 2A3 2010 A" 7O)ELYN 0. 9ALERA3 8s. WPP 0AR+ETIN9 )O0.3 et. a%. 9.R. N!. 1:>23>3 0ar6# 2A3 2010 Fa6ts/ 1etitioner 8ocelyn M. >alera is an American citi"en% $ho $as hired by respondent 8ohn 9teedman% Chairman o 411 4orld$ide and Chie *#ecuti'e 6 icer o Mindshare% Co.% a corporation based in -ong Mong% China% to $or( in the 1hilippines or pri'ate respondent 411 Mar(eting Communications% &nc. (411)% a corporation registered and operating under the la$s o 1hilippines. Hnder the employment contract% >alera $ould commence employment on 9eptember 1% 1:::% $ith the position o Managing 2irector o Mindshare 1hilippines. !hus% $ithout obtaining an alien employment permit% >alera commenced her employment $ith 411 1hilippines on the said date. &t $as only a ter our months rom the time she commenced employment that pri'ate respondent 411 iled be ore the Bureau o &mmigration an application or petitioner >alera to recei'e a $or(ing 'isa. &n the application% she $as designated as Fice0 1resident o 411. 1etitioner alleged that she $as constrained to sign the application in order that she could remain in the 1hilippines and retain her employment. 6n 2ecember 1.% 2///% pri'ate respondent >alera $as 'erbally in ormed by 9teedman that her employment had been terminated. 9he recei'ed her termination letter the ollo$ing day. -er termination prompted >alera to commence a complaint or illegal dismissal be ore the labor arbiter. !he labor arbiter ound 411% 9teedman% 4ebster% and Lansang liable or illegal dismissal and damages. ,urthermore the labor arbiter stated that >alera $as not only illegally dismissed but $as also not accorded due process% saying that >alera $as not gi'en an opportunity by

411 to de end hersel and e#plain her side. !hus% 411 did not obser'e both substanti'e and procedural due process in terminating >alera<s employment. !he labor arbiter ordered 411 to reinstate >alera and to pay her bac($ages% transportation and housing bene its% and moral and e#emplary damages% among others. 6n appeal% the 7L3C re'ersed the labor arbiter<s ruling. !he 7L3C ruled that >alera $as 411<s Fice0 1resident% and there ore% a corporate o icer at the time she $as remo'ed by the Board o 2irectors on 1. 2ecember 2///. !he 7L3C ruled that the labor arbiter had no +urisdiction o'er the case because being a corporate o icer% a case arising rom her termination is considered as an intra0corporate dispute% $hich $as cogni"able by the 9ecurities and *#change Commission under 1.2. :/20A (but no$ by the 3egional !rial Courts designated as Commercial Courts by the 9upreme Court pursuant to 9ection ;.2 o 3A 7o.CB::). !he Court o Appeals re'ersed the 7L3C. &t ruled that >alera<s appointment by the Board o 2irectors o the 411 as Fice 1resident or Media had no legal e ect as 411<s by0la$s pro'ided or only one Fice0 1resident% $hich at that time $as occupied. ,urthermore% 411<s by0la$s did not include a managing director as among its corporate o icers. !he Court o Appeals ordered 411 to pay >alera bac($ages and separation pay% as $ell as housing bene its% moral and e#emplary damages% and attorney<s ees% among others. !he case $as subse)uently ele'ated to the 9upreme Court. Iss'es/ 1. &s >alera an employee or a corporate o icer o 411= 2. 2id the labor arbiter ha'e +urisdiction o'er the case= 5. 4as >alera illegally dismissed= .. &s >alera entitled to collect the a$ard o bac($ages and damages e'en i she did not ha'e an alien employment permit $hen she commenced her employment in the 1hilippines= R'%i"- 2First Iss'e4/ >alera is an employee o 411. 9he is not a corporate o icer o 411. An e#amination o 411<s by0la$s resulted in a inding that >alera<s appointment as a corporate o icer (Fice01resident $ith the operational title o Managing 2irector o Mindshare) during a special meeting o 411<s Board o 2irectors is an appointment to a non0e#istent corporate o ice. 411<s by0la$s pro'ided or only one Fice01resident. At the time o >alera<s appointment on 2ecember 51% 1:::% 411 already had one Fice01resident in the person o

;E1age

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

4ebster. >alera cannot be said to be a director o 411 also because all i'e directorship positions pro'ided in the by0la$s are already occupied. !he appellate court urther +usti ied that >alera $as an employee and not a corporate o icer by sub+ecting 411 and >alera<s relationship to the our0 old test: (a) the selection and engagement o the employeeD (b) the payment o $agesD (c) the po$er o dismissalD and (d) the employer<s po$er to control the employee $ith respect to the means and methods by $hich the $or( is to be accomplished. !he appellate court ound that 9ections 1 and . o the employment contract mandate $here and ho$ o ten she is to per orm her $or(D 9ections 5% ;% A and B sho$ that $ages she recei'es are completely controlled by 411D and 9ections 1/ and 11 clearly state that she is sub+ect to the regular disciplinary procedures o 411. 2Se6!" Iss'e4/ !he Labor Arbiter had +urisdiction o'er the illegal dismissal complaint iled by >alera. >alera being an employee% the Labor Arbiter and the 7L3C had +urisdiction o'er her illegal dismissal complaint. Article 21B o the Labor Code 'ests the Labor Arbiter $ith the +urisdiction to hear and decide% among others termination disputes% in'ol'ing $or(ers% $hether agricultural or non0agricultural. 2T#ir Iss'e4/ Ges% 411<s dismissal o >alera lac(ed both substanti'e and procedural due process. 411 ailed to pro'e any +ust or authori"ed cause or >alera<s dismissal. 411 $as unable to substantiate the allegations o 9teedman<s 2ecember 1;% 2/// letter to >alera% ()uestioning her leadership and competence). >alera% on the other hand% presented documentary e'idence in the orm o congratulatory letters% including one rom 9teedman% $hich contents are diametrically opposed to the 2ecember 1;% 2/// letter. Also% the la$ re)uires that the employer must urnish the $or(er sought to be dismissed $ith t$o $ritten notices be ore termination o employment can be legally e ected: (1) notice $hich apprises the employee o the particular acts or omissions or $hich his dismissal is soughtD and (2) the subse)uent notice $hich in orms the employee o the employer<s decision to dismiss him. ,ailure to comply $ith the re)uirements taints the dismissal $ith illegality. 411<s acts clearly sho$ that >alera<s dismissal did not comply $ith the t$o0notice rule. 2F!'rt# Iss'e4/ 7o% >alera could not claim the employees bene its she is entitled under 1hilippine Labor La$s. !he la$ and the rules are consistent in stating that the employment permit must be ac)uired prior to employment. Article ./ o the Labor Code

states: IAny alien see(ing admission to the 1hilippines or employment purposes and any domestic or oreign employer $ho desires to engage an alien or employment in the 1hilippines shall obtain an employment permit rom the 2epartment o Labor. 9ection .% 3ule N&F% Boo( 1 o the &mplementing 3ules and 3egulations pro'ides% among others% that i an alien enters the country under a non0$or(ing 'isa and $ishes to be employed therea ter% he may only be allo$ed to be employed upon presentation o a duly appro'ed employment permit. >alera cannot come to this Court $ith unclean hands. !o grant >alera<s prayer is to sanction the 'iolation o the 1hilippine labor la$s re)uiring aliens to secure $or( permits be ore their employment. 4e hold that the status )uo must pre'ail in the present case and $e lea'e the parties $here they are. !his ruling% ho$e'er% does not bar >alera rom see(ing relie rom other +urisdictions. 9LORIA V. 9O0E=3 8s. PNO) ,EVELOP0ENT AN,0ANA9E0ENT )ORPORATION 2P,0)4 D 2(!rmer%$ E"!?" as FILOIL ,EVELOP0ENT AN, 0ANA9E0ENT 9.R. N!. 1;40443 N!8. 2;3 200> Fa6ts/ 1etitioner >loria F. >ome" used to $or( as Manager o the Legal 2epartment o 1etron Corporation% then a go'ernment0o$ned corporation. 4ith 1etron<s pri'ati"ation% she a'ailed o the company<s early retirement program and le t that organi"ation on April 5/% 1::.. 6n the ollo$ing day% May 1% 1::.% ho$e'er% ,iloil 3e inery Corporation (,iloil)% also a go'ernment0o$ned corporation% appointed her its corporate secretary and legal counsel% $ith the same managerial ran(% compensation% and bene its that she used to en+oy at 1etron. -o$e'er% the pri'ati"ation did not materiali"e so >ome" continued to ser'e as corporate secretary o respondent 12MC. 6n 9eptember 25% 1::A its president re0hired her as administrator and legal counsel o the company. 6n March 2:% 1::: the ne$ board o directors o respondent 12MC remo'ed petitioner >ome" as corporate secretary. ,urther% at the board<s meeting on 6ctober 21% 1::: the board )uestioned her continued employment as administrator. &n ans$er% she presented the ormer president<s May 2.% 1::C letter that e#tended her term. 2issatis ied $ith this% the board sought the ad'ice o its legal department% $hich e#pressed the 'ie$ that >ome"<s term e#tension $as an ultra vires act o the ormer president. &t reasoned that% since her position $as unctionally that o a 'ice0president or general manager% her term could be e#tended under the

AE1age

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

company<s by0la$s only $ith the appro'al o the board. !he legal department held that her ? de facto@ tenure could be legally put to an end. 1etitioner >ome" or her part conceded that as corporate secretary% she ser'ed only as a corporate o icer. But% $hen they named her administrator% she became a regular managerial employee. Conse)uently% the respondent 12MC<s board did not ha'e to appro'e either her appointment as such or the e#tension o her term in 1::C. Iss'e/ 467% >ome" an ordinary employee $hose complaint is $ithin the +urisdiction o the 7L3C R'%i"-/ Ges. !he relationship o a person to a corporation% $hether as o icer or agent or employee% is not determined by the nature o the ser'ices he per orms but by the incidents o his relationship $ith the corporation as they actually e#ist. !hat the employee ser'ed concurrently as corporate secretary or a time is immaterial. A corporation is not prohibited rom hiring a corporate o icer to per orm ser'ices under circumstances $hich $ill ma(e him an employee. &ndeed% it is possible or one to ha'e a dual role o o icer and employee. 7L3C has +urisdiction o'er a complaint iled by one $ho ser'ed both as corporate o icer and employee% $hen the money claims $ere made as an employee and not as a corporate o icer. RAUL 9. LO)SIN a" E,,IE B. TO0AFUIN Vs. P1ILIPPINE LON9 ,ISTAN)E TELEP1ONE )O0PANY3 9.R. N!. 1<A2A13 O6t!&er 23 200> Fa6ts/ 6n 7o'ember 1% 1::/% respondent 1hilippine Long 2istance !elephone Company (1L2!) and the 9ecurity and 9a ety Corporation o the 1hilippines (99C1) entered into a 9ecurity 9er'ices Agreement (Agreement) $hereby 99C1 $ould pro'ide armed security guards to 1L2! to be assigned to its 'arious o ices. 1ursuant to such agreement% petitioners 3aul Locsin and *ddie !oma)uin% among other security guards% $ere posted at a 1L2! o ice. 6n August 5/% 2//1% respondent issued a Letter dated August 5/% 2//1 terminating the Agreement e ecti'e 6ctober 1% 2//1. 2espite the termination o the Agreement% ho$e'er% petitioners continued to secure the premises o their assigned o ice. !hey $ere allegedly directed to remain at their post by representati'es o respondent. &n support o their contention% petitioners pro'ided the Labor Arbiter $ith copies o petitioner Locsin<s pay slips or the period o 8anuary to 9eptember 2//2. !hen% on 9eptember 5/% 2//2% petitioners< ser'ices $ere terminated. !hus% petitioners iled a complaint be ore the Labor Arbiter or illegal dismissal and

reco'ery o money claims such as o'ertime pay% holiday pay% premium pay or holiday and rest day% ser'ice incenti'e lea'e pay% *mergency Cost o Li'ing Allo$ance% and moral and e#emplary damages against 1L2!. !he Labor Arbiter rendered a 2ecision inding 1L2! liable or illegal dismissal. &t $as e#plained in the 2ecision that petitioners $ere ound to be employees o 1L2! and not o 99C1. 9uch conclusion $as arri'ed at $ith the actual inding that petitioners continued to ser'e as guards o 1L2!<s o ices. As such employees% petitioners $ere entitled to substanti'e and procedural due process be ore termination o employment. &ssue: &s there employer0employee relationship= 3uling: Ges. ,rom the oregoing circumstances% reason dictates that $e conclude that petitioners remained at their post under the instructions o respondent. 4e can urther conclude that respondent dictated upon petitioners that the latter per orm their regular duties to secure the premises during operating hours. !his% to our mind and under the circumstances% is su icient to establish the e#istence o an employer0employee relationship. !o reiterate% $hile respondent and 99C1 no longer had any legal relationship $ith the termination o the Agreement% petitioners remained at their post securing the premises o respondent $hile recei'ing their salaries% allegedly rom 99C1. Clearly% such a situation ma(es no sense% and the denials pro ered by respondent do not shed any light to the situation. &t is but reasonable to conclude that% $ith the behest and% presumably% directi'e o respondent% petitioners continued $ith their ser'ices. *'idently% such are indicia o control that respondent e#ercised o'er petitioners. *'idently% respondent ha'ing the po$er o control o'er petitioners must be considered as petitioners< employer rom the termination o the Agreement on$ardsas this $as the only time that any e'idence o control $as e#hibited by respondent o'er petitioners and in light o our ruling in Abella. !hus% as aptly declared by the 7L3C% petitioners $ere entitled to the rights and bene its o employees o respondent% including due process re)uirements in the termination o their ser'ices. Both the Labor Arbiter and 7L3C ound that respondent did not obser'e such due process re)uirements. -a'ing ailed to do so% respondent is guilty o illegal dismissal. MA967&C C67!3AC!63% &7C. and M*LF&7

BE1age

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

BALAIS@AVELINO REYES3 8s. 0A9,ALENA 0A,7OS3 =ENAI,A TIA0=ON3 a" )AR0ELITA RAPA,AS3 9.R. N!. 1<A0>43 N!8em&er 2A3 200> Fa6ts/ 3espondents Magdalena Mad+os% Oenaida !iam"on and Carmelita 3apadas $ere employed sometime in 1::1 as all0around laborers (dri'erPs$eeperP ?taga0libing@Pgrass0cutter) by Masonic Contractor% &nc. (MC&). *ach o them recei'ed an initial daily $age o 11A;.// and $ere re)uired to report or $or( rom B:// a.m. to .:// p.m. !hree years therea ter% MC& increased their $ages by 11;.// per day but not $ithout earning the ire o Mel'in Balais% president o MC&. 9ometime in 2//.% Balais told Mad+os% !iam"on and 3apadas% along $ith nine (:) other employees% to ta(e a t$o0day lea'e. 4hen they reported or $or( t$o days therea ter% they $ere barred rom entering the $or( premises and $ere in ormed that they had already been replaced by other $or(ers. !his prompted Mad+os and her co0$or(ers to ile a complaint against herein petitioners or illegal dismissal and or non0payment o o'ertime pay% holiday pay% 15th month pay% and damages. 1etitioners% or their part% denied being the direct employer o respondents. *ssentially% they argued that MC& had maintenance contracts $ith di erent memorial par( companies and that% o'er the years% they had engaged the ser'ices o a certain Lu" Malibiran to pro'ide them $ith the necessary manpo$er depending on MC&<s 'olume o $or(. Iss'e/ Are respondents regular employees o petitioner= R'%i"-/ Ges. 1etitioners< de ense that they merely contracted the ser'ices o respondents through Malibiran ails to persuade us. !he acts o this case sho$ that respondents ha'e been under the employ o MC& as early as 1::1. !hey $ere hired not to per orm a speci ic +ob or underta(ing. &nstead% they $ere employed as all0around laborers doing 'aried and intermittent +obs% such as those o dri'ers% s$eepers% gardeners% and e'en underta(ers or tagalibing% until they $ere arbitrarily terminated by MC& in 2//.. !heir $ages $ere paid directly by MC&% as e'idenced by the latter<s payroll summary% belying its sel 0ser'ing and unsupported contention that it paid directly to Malibiran or respondents< ser'ices. 3espondents had identi ication cards or gate passes issued not by Malibiran% but by MC&% and $ere re)uired to $ear uni orms bearing MC&<s emblem or logo $hen they reported or $or(. &t is common practice or companies to pro'ide identi ication cards to indi'iduals not only as a security measure% but more importantly to identi y the

bearers thereo as bona ide employees o the irm or institution that issued them. !he pro'ision o company0issued identi ication cards and uni orms to respondents% aside rom their inclusion in MC&<s summary payroll% indubitably constitutes substantial e'idence su icient to support only one conclusion: that respondents $ere indeed employees o MC&.

LESLIE O+OL3 8s. SLI00ERS WORL, INTERNATIONAL3 BE1AVIOR 0O,IFI)ATIONS3 IN).3 a" RONAL, 7OSEP1 0OY 3 9.R. N!. 1:014:3 ,e6em&er 113 200> FA)TS/ 1*!&!&67*3 Leslie 6(ol rose rom the ran(s to become head o ice manager% then director and 'ice president% o the respondent rom 1::A until her dismissal on 9ept. 22% 1:::. 9he iled a complaint or illegal suspension% illegal dismissal and money claims against the respondent in the arbitration branch o the 7ational Labor 3elations Commission (7L3C). 9he asserted that e'en as 'ice president% the $or( that she per ormed con ormed to that o an employee rather than a corporate o icer. -ence% 7L3C has +urisdiction o'er the case. 2id this contention prosper= R'%i"-/ 7o. Clearly% rom the documents submitted by respondents% petitioner $as a director and o icer o 9limmers 4orld. !he charges o illegal suspension% illegal dismissal% unpaid commissions% reinstatement and bac( $ages imputed by petitioner against respondents all s)uarely $ithin the ambit o intra0corporate disputes. &n a number o cases% $e ha'e held that a corporate o icer<s dismissal is al$ays a corporate act or an intra0corporate contro'ersy $hich arises bet$een stoc(holder and a corporation. !he )uestion o remuneration in'ol'ing a stoc(holder and o icer% not a mere employee% is not a simple labor problem but a matter that comes $ithin the area o corporate a airs and management and is a corporate contro'ersy in contemplation o the Corporation Code J*strada '. 7L3C% >.3. 1/AB22% 6ct. .% 1::A% 2A2 9C3A B/:D Lo"on '. 7L3C% 51/ 1hil. 1 (1::;)D *spino '. 7L3C% 51/ 1hil. A1 (1::;)D ,ortune Cement Corp. '. 7L3C% >.3. B:BA2% 8an. 2.% 1::1% 1:5 9C3A 2;C citing 2y '. 7L3C% 22: 1hil. 25. (1:CA).K 9ubsection ;.2% 9ection ; o 3epublic Act CB::%

CE1age

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

$hich too( e ect on Aug. C% 2///% trans erred to regional trial courts the 9*C<s +urisdiction o'er all cases listed in 9ection ; o 12 :/20A. It is a settled rule that jurisdiction over the subject 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 intra corporate dispute subject to the jurisdiction of the regular courts. !hus% the appellate court correctly ruled that it is not the 7L3C but the regular courts $hich ha'e +urisdiction o'er the present case. (Leslie 6(ol 's. 9limmers 4orld &nternational Beha'ior Modi ications &nc. and 3onald 8oseph Moy% >.3. 1A/1.A% 2ec. 11% 2//:). ATO+ BI9 WE,9E )O0PANY3 IN).3 PETITIONER3 VS. 7ESUS P. 9ISON3 RESPON,ENT. G9.R. N!. 1:>A103 A'-'st 0<3 2011H !opic: Basic 1rinciples Fa6ts/ 3espondent 8esus 1. >ison $as engaged as part0time consultant on retainer basis by petitioner Ato( Big 4edge Company% &nc. As a consultant on retainer basis% respondent assisted petitionerQs retained legal counsel $ith matters pertaining to the prosecution o cases against illegal sur ace occupants $ithin the area co'ered by the companyQs mineral claims. 3espondent $as li(e$ise tas(ed to per orm liaison $or( $ith se'eral go'ernment agencies% $hich he said $as his e#pertise. 1etitioner did not re)uire respondent to report to its o ice on a regular basis% e#cept $hen occasionally re)uested by the management to discuss matters needing his e#pertise as a consultant. As payment or his ser'ices% respondent recei'ed a retainer ee o 15%///.// a month%J5K $hich $as deli'ered to him either at his residence or in a local restaurant. !he parties e#ecuted a retainer agreement% but such agreement $as misplaced and can no longer be ound. !he said arrangement continued or the ne#t ele'en years. 9ometime therea ter% since respondent $as getting old% he re)uested that petitioner cause his registration $ith the 9ocial 9ecurity 9ystem (999)% but petitioner did not accede to his re)uest. 3espondent iled a ComplaintJ.K $ith the 999 against petitioner or the latterQs re usal to cause his registration $ith the 999.

6n the same date% respondent $as ad'ised that petitioner is terminating his retainer contract $ith the company since his ser'ices are no longer necessary. &ssue: *#istence o employer0employee relationship 3uling: !o ascertain the e#istence o an employer0 employee relationship +urisprudence has in'ariably adhered to the our0 old test% to $it: (1) the selection and engagement o the employeeD (2) the payment o $agesD (5) the po$er o dismissalD and (.) the po$er to control the employeeQs conduct% or the so0called Icontrol test.IJ1CK 6 these our% the last one is the most important.J1:K !he so0called Icontrol testI is commonly regarded as the most crucial and determinati'e indicator o the presence or absence o an employer0employee relationship. Hnder the control test% an employer0employee relationship e#ists $here the person or $hom the ser'ices are per ormed reser'es the right to control not only the end achie'ed% but also the manner and means to be used in reaching that end.J2/K Applying the a orementioned test% an employer0 employee relationship is apparently absent in the case at bar. Among other things% respondent $as not re)uired to report e'eryday during regular o ice hours o petitioner. 3espondentQs monthly retainer ees $ere paid to him either at his residence or a local restaurant. More importantly% petitioner did not prescribe the manner in $hich respondent $ould accomplish any o the tas(s in $hich his e#pertise as a liaison o icer $as neededD respondent $as le t alone and gi'en the reedom to accomplish the tas(s using his o$n means and method. 3espondent $as assigned tas(s to per orm% but petitioner did not control the manner and methods by $hich respondent per ormed these tas(s. Ferily% the absence o the element o control on the part o the petitioner engenders a conclusion that he is not an employee o the petitioner. Contrary to the conclusion o the CA% respondent is not an employee% much more a regular employee o petitioner. !he appellate courtQs premise that regular employees are those $ho per orm acti'ities $hich are desirable and necessary or the business o the employer is not determinati'e in this case. &n act% any agreement may pro'ide that one party shall render ser'ices or and in behal o another% no matter ho$ necessary or the latterQs business% e'en $ithout being hired as an employee.J25K -ence% respondentQs length o ser'ice and petitionerQs repeated act o assigning respondent some tas(s to be per ormed did not result to respondentQs entitlement to the rights and pri'ileges o a regular employee.

:E1age

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

,urthermore% despite the act that petitioner made use o the ser'ices o respondent or ele'en years% he still cannot be considered as a regular employee o petitioner. Article 2C/ o the Labor Code% in $hich the lo$er court used to buttress its indings that respondent became a regular employee o the petitioner% is not applicable in the case at bar. &ndeed% the Court has ruled that said pro'ision is not the yardstic( or determining the e#istence o an employment relationship because it merely distinguishes bet$een t$o (inds o employees% i.e.% regular employees and casual employees% or purposes o determining the right o an employee to certain bene its% to +oin or orm a union% or to security o tenureD it does not apply $here the e#istence o an employment relationship is in dispute.J2.K &t is% there ore% erroneous on the part o the Court o Appeals to rely on Article 2C/ in determining $hether an employer0employee relationship e#ists bet$een respondent and the petitioner Considering that there is no employer0employee relationship bet$een the parties% the termination o respondentQs ser'ices by the petitioner a ter due notice did not constitute illegal dismissal $arranting his reinstatement and the payment o ull bac($ages% allo$ances and other bene its. II. )LASSIFI)ATION OF E0PLOYEES a. Re-'%ar 8s. )as'a% Em.%!$ees ARTI)LE 2<0.Re-'%ar a" 6as'a% em.%!$me"t. !he pro'isions o $ritten agreement to the contrary not$ithstanding and regardless o the oral agreements o the parties% an employment shall be deemed to be regular $here the employee has been engaged to per orm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employer e#cept $here the employment has been fi!ed for a specific project or underta(ing% the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or( or ser'ice to be per ormed is seasonal in nature a >,2nd the employment is or the duration o the season. An employment shall be deemed to be 6as'a% i it is not co'ered by the preceding paragraph: 1ro'ided% !hat any employee $ho has rendered at least one year o ser'ice% $hether such ser'ice is continuous or bro(en% shall be considered a regular employee $ith respect to the acti'ity in $hich he is employed and his employment shall continue $hile such acti'ity e#ists.

ARTI)LE 2<1. Pr!&ati!"ar$ em.%!$me"t. R 1robationary employment shall not e#ceed si# months rom the date the employee started $or(ing% unless it is co'ered by an apprenticeship agreement stipulating a longer period. !he ser'ices o an employee $ho has been engaged on a probationary basis may be terminated or a +ust cause or $hen he ails to )uali y as a regular employee in accordance $ith reasonable standards made (no$n by the employer to the employee at the time o his engagement. An employee $ho is allo$ed to $or( a ter a probationary period shall be considered a regular employee. NOTE: Art. 2C/ is 76! the yardstic( in determining employer0employee relationship. 4hat is controlling is the our0 old test and (no$) the economic reality test. Art. 2C/ apply only $hen the e#istence o employer0employee relationship is not in dispute. 1. Re-'%ar Em.%!$me"t 0 an employment shall be deemed to be regular $here the employee has been engaged to per orm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employer. the $ord ?usually@ is used because it does not mean they al$ays ha'e to per orm tas(s $hich are necessary or desirable. it also re ers to casual employees $ho ha'e rendered at least one year o ser'ice% $hether continuoPus or bro(en% $ith respect to the acti'ity they are employed. probationary or term employees are also considered regular once they are allo$ed to $or( beyond the term or duration o the pro+ect. pro+ect employee $ho has been continuously rehired (Maraguinot Case)0becomes regular or the speci ic +ob or continuously rehired or: i. employee is continuously rehired rom pro+ect to pro+ect e'en $ith gaps o time in bet$een ii. tas( is H762 in H!6B% or else the pro+ect employee is considered only a casual employee iii. rehired or the same tas( or nature o tas( - a pro+ect employee concerted to regular employee is still not paid or the period he does not $or(. But i the employer is re)uired to hire him $hen the ne#t pro+ect re)uires the particular +ob he does% or else% the employer is guilty o illegal termination.

1/ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

Re-'%ar Em.%!$ee ma$ eit#er &e a. "ermanent a regular appointed or an inde inite period % either $ith or $ithout passing a probationary period. b. "robationary one $ho is placed in a trial period $hose per ormance is assessed $hether satis actory or not. & per ormance is satis actory% it is ollo$ed by a regular employment% i not% the employment is terminated. 0An employer has the prerogati'e $hether to sub+ect the employee $ith probationary employment or not. !hus% an employee may be considered as a permanent employee on his irst day o $or(. Em.%!$ees ma$ &e 6!"si ere re-'%ar e.e" i"!" 2 (a6t!rs/ 1. 3egular employees by the nature o the $or( H762 in H!6B 2. 3egular employees by the length o ser'ice 2. )as'a% Em.%!$me"t 0 An employment shall be deemed to be casual i it is not co'ered by the preceding paragraph (regular employment) An employment is casual i : 1. a $or(er is employed to per orm $or( not related to the business or trade o the employer and 2. he is employed or a short term or short duration.(e.g. less than a year) - does not ha'e security o tenure be ore reaching the one0year period% ho$e'er% i he has rendered at least one year o ser'ice% $hether such ser'ice is continuous or bro(en% he shall be considered a regular employee $ith respect to the acti'ity in $hich he is employed and his employment shall continue $hile such acti'ity e#ists. *#amples% not usually necessary or desirable: in a ban(: +anitorial ser'ice in a manu acturing company: the cutter o cogon grass in the company<s premises is totally alien to the business o a company manu acturing cultured mil(. Be ore reaching the one year period% a casual employee can be terminated i his $or( is ound to be unsatis actory. !he moment he reaches the one0year period% he becomes a regular employee $ho can neither be remo'ed nor dismissed e#cept or a +ust cause as pro'ided in the LC. 3.Pr!Ie6t Em.%!$me"t is one $here the employment has been i#ed or a speci ic pro+ect or underta(ing% the completion or termination o $hich

has been determined at the time o the engagement o the employee Three instances when the project employee is converted into a regular employee# 1. A pro+ect employee may be con'erted to a regular status $hen he $as employed or a speci ic pro+ect% the completion o $hich is determined% but despite the termination o the pro+ect% he is still made to $or(. &t negates the essence o pro+ect employment. &t sho$s that the employee<s $or( is needed not only in the speci ic pro+ect. 2. 4ithin the pro+ect itsel % and be ore the completion o the pro+ect% the employee is gi'en tas(s not related at all to the pro+ect. >i'ing the employee additional $or(s negates the essence o pro+ect employment. &t sho$s that his ser'ices is not limited to the pro+ect. *'en i the e#tra $or( is not H762 in H!6B to the main business% he is con'erted to a regular employee. 5. Maraguinot case. Hnder multiple succeeding pro+ects% can ha'e gaps bet$een each pro+ect% the employees can still be con'erted to regular status but only $hen the pro+ect employee is rehired continuously% and or the same nature o tas(. !here is a pattern sho$ing that H762 in H!6B. 7ote: !he one0year rule only applies to casual employment% not to pro+ect nor seasonal employees. T?! Ei" s !( Pr!Ie6t Em.%!$ee/ 1. tas(s $hich are H762 in H!6B 2. tas(s $hich are not H762 in H!6B a. the +ob must be distinct rom the totality o *3<s business b. the pro+ect must be de inite as to its completion c. *mployment terminates $ith the pro+ect% regardless o the period Pri"6i.a% Test (!r etermi"i"- ?#et#er a .arti6'%ar em.%!$ee is a .r!Ie6t em.%!$ee !r "!t/ Whether or not the project employee is assigned to carry out a specific project or underta!ing" the duration and scope of #hich #ere specified at the time the employee is engaged for that project. A $or( pool is not necessary in order to con'ert the pro+ect employee into regular% But its e#istence may signi y that the pro+ect employee has become regular i there is a continuous rehiring. ReJ'ireme"ts/ 1. he must be hired or that speci ic pro+ect 2. the completion or termination o his pro+ect $as made (no$n to him

11 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

4.Seas!"a% Em.%!$me"t 0 is one $here the $or( or ser'ice to be per ormed is seasonal in nature and the employment is or the duration o the season. $easonal %mployee 0-ired or a speci ic period o time during the year% and may be H762 in H!6B 3ehired $hene'er their ser'ices are re)uired (e.g. arm $or(ers) At the arri'al o the season must be rehired% or else employer is guilty o illegal termination Allo$ed to see( $or( else$here $hile o 0 season 2 reJ'isites t! .r!8e seas!"a% em.%!$ees/ 1. the $or( or ser'ices per ormed by the $or(ers are seasonal in nature 2. they must be employed or the duration o one season only 09easonal $or(ers $ho are called to $or( rom time to time and are temporarily laid o during o 0season are not separated rom the ser'ice in said period% but are merely considered on lea'e until re0employed. &n this case% con'ersion occurs similar to pro+ect employees. 4hen they are continuously rehired or the same tas(Pnature o tas(% they become regular employees. 2uring o season% they are temporarily laid o % $ithout pay% but they are still considered regular employees. Fi5e term 0the +ob is assigned a speci ic date o e#piration e'en i the +ob is considered H762 in H!6B. !he important aspect is that the +ob is time bound. &rent school r'%i"-/ ReJ'ireme"ts (!r a 8a%i Fi5e Term em.%!$me"t/ 1. $here a i#ed period or employment $as agreed upon (no$ingly and 'oluntarily by the parties 2. $ithout any orce% duress or improper pressure being brought to bear upon the employee and absent any circumstances 'itiating consent% or 5. $here it satis actorily appears that the employer and employee dealt $ith each other on more or less e)ual terms $ith no moral dominance $hate'er being e#ercised by the ormer o'er the latter A.Pr!&ati!"ar$ Em.%!$me"t is one $ho is on tentati'e employment during $hich the employer determines $hether he (employee) is )uali ied or permanent employment.

0 1robationary period is A months or the employer to determine the eligibility o the employee. But the period may be shortened or e#tended. 1robationary employee is con'erted to regular a ter the period imposed has lapsed% and the employee continues to $or(. &t implies that the employee has passed and is eligible or regular employment. Also% i the terms and conditions o employment are not clearly pro'ided by the employer% the standards are not clear then the employee is deemed a regular employee. !his is because the employee has no (no$ledge o $hat standards he or she must meet% and so this should not $or( to his or her pre+udice. *mployee is hired or A months in order to determine )uali ication or capacity as a regular employee although an employee can become regular right a$ay $ithout going through probation. !he employee is gi'en the standards at the time o engagement (employer must e#plain not merely gi'ing document) LC pro'ides that the duration o probation is A months (ma#imum period o probation). !he e#ceptions are the ollo$ing: (a) $$$ unless it is co'ered by an apprenticeship agreement stipulating a longer period such as +obs $hich are highly technical ( not an employee)D and (b) &n cases o academic personnel: the Manual o 3egulations or 1ri'ate 9chool pro'ides a longer probationary period. A6a emi6 .ers!""e%- &nclude all school personnel $ho are ormally engaged in actual teaching ser'ice or research assignment% either on ull0time or part0 time basis% as $ell as those $ho possess certain prescribed unctions directly supporti'e o teaching% such as registrars% librarian% guidance counselors% researchers% and other similar persons. !hey include school o icials responsible or academic matters% and may include other school o icials. Se6 >2. D 0a"'a% !( Re-'%ati!" !( Pri8ate S6#!!%s a. or those in the secondary and elementary le'el% a probationary period o not more than 5 consecuti'e years o satis actory ser'ice (calendar year) b. or those in the tertiary le'el% not more than A consecuti'e regular semesters o satis actory ser'ice (school year) c. or those in trimester% or not more than : consecuti'e trimesters o satis actory ser'ice (school year)

12 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

N!"-a6a emi6 .ers!""e%- means school personnel usually engaged in administrati'e unctions $ho are not co'ered under the de inition o academic personnel. !hey may include school o icials. W#e" is .r!&ati!"ar$ em.%!$me"t .ermissi&%eK a. $hen the $or( re)uires special )uali ications% s(ills training or e#perience b. $hen the $or(% +ob or position in'ol'ed is permanent% regular% stable or inde inite and not merely casual or intermittent. c. i the $or( is not intended to circum'ent the security o tenure d. i it is necessary or customary or the position or the +ob in'ol'ed 9e"era% r'%e/ 1robationary period should not e#ceed A months rom the date the employee started $or(ing. E56e.ti!"/ !he A months period pro'ided in the la$ admits o certain e#ceptions such as: 1. $hen the *3 and ** mutually agree on a shorter or longer periodD 2. $hen the nature o $or( to be per ormed by the ** re)uired a longer periodD 5. $hen a longer period is re)uired and established by company policy 9ecurity o tenure is still a'ailable to probationary employees% but only or a limited period.

Pr!-ram em.%!$ee/ a. are those $hose s(ills or ser'ices are engaged by the station or a particular or speci ic program or underta(ing and b. $ho are not re)uired to obser'e normal $or(ing hours such that on some days they $or( or less than C hours and on other days beyond the normal $or(ing hours obser'ed by station employeesD and c. are allo$ed to enter into employment contracts $ith other persons% stations% ad'ertising agencies or sponsoring companies. S9ame classi ication as in the Labor Code. 1olicy &nstruction 7o. ./ has been declared to be o 76 e ect in the case o 9on"a 's. AB90CB7 (>.3. 15C/;1% 8une 1/% 2//.) 1olicy &nstruction ./ is a mere e#ecuti'e issuance $hich does not ha'e the orce and e ect o la$. !here is no legal presumption that 1olicy &nstruction 7o. ./ determines 967OA<s status. A mere e#ecuti'e issuance cannot e#clude independent contractors rom the class o ser'ice pro'iders to the broadcast industry. !he classi ication has no basis either in la$ or in act. 5. I" Pri8ate E '6ati!"a% I"stit'ti!"s (Manual o 3egulations or 1ri'ate 9chool) a. Academic 1ersonnel a.1. Academic teaching a.2. Academic non0teaching (librarian) b. 7on0Academic 1ersonnel those sta $ho per orm administrati'e unctions but are not in'ol'ed in academic $or( * !heir employment is 76! co'ered by the M319 or by the !F*! Manual but by the Labor Code. 4. I" 1!s.ita%s '# Are (esident "hysicians considered employees of hospitals) A: &t depends. & undergoing training% he is 76! an employee o the hospital. & not undergoing training% he is an employee% but only on a term basis. BA9&90 6mnibus 3ules% Boo( &&&% 3ule N0A% 9ec.1; 3esidents in training. R !here is employer employee relationship bet$een resident physicians and the training hospitals% H7L*99: (1) there is a training agreement bet$een them and the training program is duly accredited or appro'ed by the appropriate go'ernment agency. N## E56e.ti!"s t! re-'%ar em.%!$me"t

Ot#er )%assi(i6ati!" (9pecial La$s) 1. )!"str'6ti!" I" 'str$ (2epartment 6rder 7o. 1:% 9eries o 1::5) a. 1ro+ect b. 7on01ro+ect b.1. probationary b.2. regular b.5. casual 2. Br!a 6ast I" 'str$ (26L* 1olicy &nstruction 7o. ./) 9tation *mployee: a. are those $hose ser'ices are engaged to discharge unctions $hich are usually necessary and desirable to the operation o the station and b. $hose use ulness is not a ected by changes o programs% ratings% or ormats and $ho obser'e normal $or(ing hours. 0 !hese shall include employees $hose talents% s(ills or ser'ices are engaged as such by the station $ithout particular re erence to any speci ic program underta(ing and are not allo$ed by the station to be engaged or hired by other stations or persons e'en i such employee do not obser'e normal $or(ing hours.

15 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

1. 2. 5. ..

9easonal *mployment 1ro+ect *mployment Casual *mployment ,i#ed !ermP1eriod *mployment an employment that $ill last only or a de inite period% as agreed by the parties.

collecti'e bargaining agent o said employees and or a CBA negotiation $ith it. -o$e'er% the JrespondentK did not heed such demands o the petitioner. 9ometime in 1::C $hen the pro+ect $as about to be completed% the JrespondentK proceeded to ser'e 7otices o !ermination o *mployment upon the employees $ho are members o the petitioner. 6n 2ecember 2C% 1::C% the petitioner iled a 7otice o 9tri(e $ith 26L* against the JrespondentK on the ground o purported commission by the latter o un air labor practice or Ire usal to bargain collecti'ely% union busting and mass termination.I 6n the same day% the petitioner declared a stri(e and staged such stri(e. !o a'ert any $or( stoppage% then 9ecretary o Labor Bien'enido *. Laguesma inter'ened and issued the 6rder% dated 8anuary .% 1:::% certi ying the labor dispute to the 7L3C or compulsory arbitration. Accordingly% all the stri(ing $or(ers $ere directed to return to $or( $ithin t$el'e (12) hours rom receipt o the 6rder and or the JrespondentK to accept them bac( under the same terms and conditions o employment prior to the stri(e. ,urther% the parties $ere directed to cease and desist rom committing any act that $ould e#acerbate the situation. -o$e'er% despite earnest e orts on the part o the 9ecretary o Labor and *mployment to settle the dispute amicably% the petitioner remained adamant and unreasonable in its position% causing the ailure o the negotiation to$ards a peace ul compromise. &n e ect% the petitioner did not abide by JtheK assumption order issued by the 9ecretary o Labor. Conse)uently% on 8anuary 1;% 1:::% the JrespondentK iled a Complaint or 9tri(e &llegality% 2eclaration o Loss o *mployment and 2amages at the 7L3C03AB F&&& in !acloban City and at the same time% iled a 1etition or Cancellation o 1etitionerQs Certi icate o 3egistration $ith 26L*% 3egional 6 ice 7o. F&&&. !he t$o cases $ere later on consolidated pursuant to the 7e$ 7L3C 3ules o 1rocedure. !he consolidated case $as doc(eted as 7L3C Certi ied Case 7o. F0 /20:: (7CMB03AB F&&&0790120/1:/0:CD 3AB Case 7o. F&&&010//1:0::). !he said certi ied case $as indorsed to the 7L3C .th 2i'ision in Cebu City on 8une 21% 1::: or the proper disposition thereo . Iss'e/ 1. 4hether the o icers and members o petitioner Hnion are pro+ect employees o respondentD and 2.4hether the o icers and members o petitioner Hnion engaged in an illegal stri(e. R'%i"-s/ 6n the irst issue% petitioner Hnion contends that its o icers and members per ormed acti'ities that

9'i e%i"es (!r t#e 8a%i it$ !( t#is Ei" !( em.%!$me"t 1. the i#ed period o employment (*!) is (no$ingly and 'oluntarily agreed upon by the parties $ithout any orce% duress% or improper pressure being brought to bear upon the ** and absent any other circumstances 'itiating his consent. 2. &t satis actorily appears that the *3 and the ** dealt $ith each other on more or less e)ual terms $ith no moral dominance being e#ercised by the ormer or the latter. 5. &t must not circum'ent the pro'isions in the labor code on security o tenure. )ASES/ LEYTE 9EOT1ER0AL POWER PRO9RESSIVE E0PLOYEES UNION D ALU D TU)P3 8s. P1ILIPPINE NATIONAL OIL )O0PANY D ENER9Y ,EVELOP0ENT )ORPORATION3 9.R. N!. 1;03A13 0ar6# 303 2011 Fa6ts/ J3espondent 1hilippine 7ational 6il CorporationK0*nergy 2e'elopment Corporation J176C0*2CK is a go'ernment0o$ned and controlled corporation engaged in e#ploration% de'elopment% utili"ation% generation and distribution o energy resources li(e geothermal energy. 1etitioner is a legitimate labor organi"ation% duly registered $ith the 2epartment o Labor and *mployment (26L*) 3egional 6 ice 7o. F&&&% !acloban City. Among JrespondentQsK geothermal pro+ects is the Leyte >eothermal 1o$er 1ro+ect located at the >reater !ongonan >eothermal 3eser'ation in Leyte. !he said 1ro+ect is composed o the !ongonan 1 >eothermal 1ro+ect (!1>1) and the Leyte >eothermal 1roduction ,ield 1ro+ect (L>1,) $hich pro'ide the po$er and electricity needed not only in the pro'inces and cities o Central and *astern Fisayas (3egion F&& and F&&&)% but also in the island o Lu"on as $ell. !hus% the JrespondentK hired and employed hundreds o employees on a contractual basis% $hereby% their employment $as only good up to the completion or termination o the pro+ect and $ould automatically e#pire upon the completion o such pro+ect. Ma+ority o the employees hired by JrespondentK in its Leyte >eothermal 1o$er 1ro+ects had become members o petitioner. &n 'ie$ o that circumstance% the petitioner demands rom the JrespondentK or recognition o it as the

1. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

$ere usually necessary and desirable to respondentQs usual business. &n act% petitioner Hnion reiterates that its o icers and members $ere assigned to the %onstruction &epartment o respondent as carpenters and masons% and to other +obs pursuant to ci'il $or(s% $hich are usually necessary and desirable to the department. 1etitioner Hnion li(e$ise points out that there $as no inter'al in the employment contract o its o icers and members% $ho $ere all employees o respondent% $hich lac( o inter'al% or petitioner Hnion% Imani ests that the Tunderta(ingQ is usually necessary and desirable to the usual trade or business o the employer.I 4e cannot subscribe to the 'ie$ ta(en by petitioner Hnion. !he distinction bet$een a regular and a pro+ect employment is pro'ided in Article 2C/% paragraph 1% o the Labor Code: ART. 2<0. (egular and *asual %mployment.00 !he pro'isions o $ritten agreement to the contrary not$ithstanding and regardless o the oral agreement o the parties% an employment shall be deemed to be regular $here the employee has been engaged to per orm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employer% e#cept $here the employment has been i#ed or a speci ic pro+ect or underta(ing the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or( or ser'ice to be per ormed is seasonal in nature and the employment is or the duration o the season. An employment shall be deemed to be casual i it is not co'ered by the preceding paragraph: 1ro'ided% !hat% any employee $ho has rendered at least one year o ser'ice% $hether such ser'ice is continuous or bro(en% shall be considered a regular employee $ith respect to the acti'ity in $hich he is employed and his employment shall continue $hile such actually e#ists. T#e (!re-!i"- 6!"tem.%ates (!'r 244 Ei" s !( em.%!$ees/ 2a4 regular em.%!$ees or those $ho ha'e been Iengaged to per orm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employer LC 2&4 project em.%!$ees !r those I$hose employment has been i#ed or a speci ic pro+ect or underta(ingJ%K the completion or termination o $hich has been determined at the time o the engagement o the employeeLC 264 seasonal em.%!$ees or those $ho $or( or per orm ser'ices $hich are seasonal in nature% and the employment is or the duration o the seasonC a" 2 4 casual em.%!$ees or those $ho are not regular% pro+ect% or seasonal employees.

8urisprudence has added a i th (ind00 a (i5e -term em.%!$ee. Arti6%e 2<0 !( t#e La&!r )! e% as $orded% establishes that the nature o the employment is determined by la$% regardless o any contract e#pressing other$ise. T#e s'.rema6$ !( t#e %a? !8er t#e "!me"6%at're !( t#e 6!"tra6t a" t#e sti.'%ati!"s 6!"tai"e t#erei" is t! &ri"- t! %i(e t#e .!%i6$ e"s#ri"e i" t#e )!"stit'ti!" t! La((!r ('%% .r!te6ti!" t! %a&!r.L !hus% labor contracts are placed on a higher plane than ordinary contractsD t#ese are im&'e ?it# .'&%i6 i"terest a" t#ere(!re s'&Ie6t t! t#e .!%i6e .!?er !( t#e State. -o$e'er% not$ithstanding the oregoing iterations% pro+ect employment contracts $hich i# the employment or a speci ic pro+ect or underta(ing remain 'alid under the la$: # # # By entering into such a contract% an employee is deemed to understand that his employment is coterminous $ith the pro+ect. -e may not e#pect to be employed continuously beyond the completion o the pro+ect. &t is o +udicial notice that pro+ect employees engaged or manual ser'ices or those or special s(ills li(e those o carpenters or masons% are% as a rule% unschooled. -o$e'er% this act alone is not a 'alid reason or besto$ing special treatment on them or or in'alidating a contract o employment. 1ro+ect employment contracts are not lopsided agreements in a'or o only one party thereto. T#e em.%!$erMs i"terest is eJ'a%%$ im.!rta"t as t#at !( t#e em.%!$eeGsMH (!r t#eirs is t#e i"terest t#at .r!.e%s e6!"!mi6 a6ti8it$. 4hile it may be true that it is the employer $ho dra ts pro+ect employment contracts $ith its business interest as o'erriding consideration% such contracts do not% o necessity% pre+udice the employee. 7either is the employee le t helpless by a pre+udicial employment contract. A ter all% under the la$% the interest o the $or(er is paramount. &n the case at bar% the records re'eal that the o icers and the members o petitioner Hnion signed employment contracts indicating the speci ic pro+ect or phase o $or( or $hich they $ere hired% $ith a i#ed period o employment. !he 7L3C correctly disposed o this issue: A deeper e#amination also sho$s that Jthe indi'idual members o petitioner HnionK indeed signed and accepted the Jemployment contractsK reely and 'oluntarily. 7o e'idence $as presented by JpetitionerK Hnion to pro'e improper pressure or undue in luence $hen they entered% per ected and consummated Jthe employmentK contracts. &n act% it $as clearly established in the course o the trial o this case% as e#plained by no less than the 1resident o JpetitionerK Hnion% that the contracts o employment $ere read% comprehended% and 'oluntarily accepted by them. # # #.

1; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

As clearly sho$n by JpetitionerK HnionQs o$n admission% both parties had e#ecuted the contracts reely and 'oluntarily $ithout orce% duress or acts tending to 'itiate the $or(erJsQK consent. !hus% $e see no reason not to honor and gi'e e ect to the terms and conditions stipulated therein. # # #. !hus% $e are hard pressed to ind cause to disturb the indings o the 7L3C $hich are supported by substantial e'idence. &t is $ell0settled in +urisprudence that actual indings o administrati'e or )uasi0+udicial bodies% $hich are deemed to ha'e ac)uired e#pertise in matters $ithin their respecti'e +urisdictions% are generally accorded not only respect but e'en inality% and bind the Court $hen supported by substantial e'idence. 3ule 155% 9ection ; de ines s'&sta"tia% e8i e"6e as Lt#at am!'"t !( re%e8a"t e8i e"6e ?#i6# a reas!"a&%e mi" mi-#t a66e.t as a eJ'ate t! I'sti($ a 6!"6%'si!".I Consistent there$ith is the doctrine that this Court is not a trier o acts% and this is strictly adhered to in labor cases. 4e may ta(e cogni"ance o and resol'e actual issues% only $hen the indings o act and conclusions o la$ o the Labor Arbiter or the 7L3C are inconsistent $ith those o the CA. &n the case at bar% both the 7L3C and the CA $ere one in the conclusion that the o icers and the members o petitioner Hnion $ere pro+ect employees. 7onetheless% petitioner Hnion insists that they $ere regular employees since they per ormed $or( $hich $as usually necessary or desirable to the usual business or trade o the %onstruction &epartment o respondent. 1olicy &nstruction 7o. 12 o the 2epartment o Labor and *mployment discloses that the concept o regular and casual employees $as designed to put an end to casual employment in regular +obs% $hich has been abused by many employers to pre'ent so 0 called casuals rom en+oying the bene its o regular employees or to pre'ent casuals rom +oining unions. !he same instructions sho$ that the pro'iso in the second paragraph o Art. 2C/ $as not designed to sti le small0scale businesses nor to oppress agricultural land o$ners to urther the interests o laborers% $hether agricultural or industrial. 4hat it see(s to eliminate are abuses o employers against their employees and not% as petitioners $ould ha'e us belie'e% to pre'ent small0scale businesses rom engaging in legitimate methods to reali"e pro it. -ence% the pro'iso is applicable only to the employees $ho are deemed IcasualsI but not to the Ipro+ectI employees nor the regular employees treated in paragraph one o Art. 2C/.

Clearly% there ore% .etiti!"ers &ei"- .r!Ie6t em.%!$ees3 !r3 t! 'se t#e 6!rre6t term3 seas!"a% em.%!$ees3 t#eir em.%!$me"t %e-a%%$ e" s '.!" 6!m.%eti!" !( t#e .r!Ie6t !r t#e Ge" !( t#eH seas!". The termination of their employment cannot and should not constitute an illegal dismissal. S0) 3 8s. E,UAR,O L. TEO,OSIO3 9.R. N!. 1:30333 O6t!&er 23 200> Fa6ts/ 6n 9eptember ;% 1::1% respondent *duardo !eodosio $as hired by 9an Miguel Corporation (9MC) as a 6as'a% (!rE%i(t !.erat!r in its Bacolod City Bre$ery. As a or(li t operator% respondent $as tas(ed $ith loading and unloading pallet o beer cases $ithin the bre$ery premises. 3espondent continuously $or(ed rom 9eptember ;% 1::1 until March 1::2% a ter $hich he $as ?as(ed to rest@ or a $hile. A month a ter% or sometime in April 1::2% respondent $as rehired or the same position% and a ter ser'ing or about i'e to si# months% he $as again ?as(ed to rest.@ A ter three $ee(s% he $as again rehired as a or(li t operator. -e continued to $or( as such until August 1::5. 9ometime in August 1::5% res.!" e"t ?as ma e t! si-" a" NEm.%!$me"t ?it# a Fi5e Peri! O contract by 9MC% $herein it $as stipulated% among other things% that respondent<s employment $ould be ? rom August B% 1::5 to August 5/% 1::;% or upon cessation o the instabilityP luctuation o the mar(et demand% $hiche'er comes irst.@ !herea ter% respondent $or(ed at the plant $ithout interruption as a or(li t operator. 6n March 2/% 1::;% respondent $as trans erred to the plant<s bottling section as a case piler. &n a letter dated April 1/% 1::;% respondent ormally in ormed 9MC o his opposition to his trans er to the bottling section. -e asserted that he $ould be more e ecti'e as a or(li t operator because he had been employed as such or more than three years already. 3espondent also re)uested that he be trans erred to his ormer position as a or(li t operator. -o$e'er% 9MC did not ans$er his letter. &n an undated letter% respondent in ormed 9MC that he $as applying or the 'acant position o bottling cre$ as he $as interested in becoming a regular employee o 9MC. 6n 8une 1% 1::;% 9MC noti ied the respondent that his employment shall be terminated on 8uly 1% 1::; in compliance $ith the *mployment $ith a ,i#ed 1eriod contract. 9MC e#plained that this $as due to the reorgani"ation and streamlining o its operations. &n a letter dated 8uly 5% 1::;% respondent e#pressed

1A E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

his dismay or his dismissal. -e in ormed 9MC that despite the act that he $ould be compelled to recei'e his separation pay and $ould be orced to sign a $ai'er to that e ect% this does not mean that he $ould be $ai'ing his right to )uestion his dismissal and to claim employment bene its as pro'ided in the Collecti'e Bargaining Agreement (CBA) and company policies. !herea ter% respondent signed a 3eceipt and 3elease document in a'or o 9MC and accepted his separation pay% thereby releasing all his claims against 9MC.6n 8uly .% 1::;% respondent iled a Complaint against 9MC. Iss'es/ (1) &s respondent a regular employee= (2) &s there illegal dismissal= R'%i"- 2First Iss'e4/ Ges. Based on the circumstances surrounding respondent<s employment by 9MC% this Court is con'inced that he has attained the status o a regular employee long be ore he e#ecuted the employment contract $ith a i#ed period. T#e La&!r )! e .r!8i es t#at a 6as'a% em.%!$ee 6a" &e 6!"si ere as a re-'%ar em.%!$ee i( sai 6as'a% em.%!$ee #as re" ere at %east !"e $ear !( ser8i6e re-ar %ess !( t#e (a6t t#at s'6# ser8i6e ma$ &e 6!"ti"'!'s !r &r!Ee" . 9ection 5% 3ule F% Boo( && o the &mplementing 3ules and 3egulations o the Labor Code clearly de ines the term Nat %east !"e $ear !( ser8i6eO t! mea" ser8i6e ?it#i" 12 m!"t#s3 ?#et#er 6!"ti"'!'s !r &r!Ee"3 re6E!"e (r!m t#e ate t#e em.%!$ee starte ?!rEi"-3 i"6%' i"- a't#!ri*e a&se"6es a" .ai re-'%ar #!%i a$s3 '"%ess t#e ?!rEi"a$s i" t#e esta&%is#me"t3 as a matter !( .ra6ti6e !r .!%i6$3 !r as .r!8i e i" t#e em.%!$me"t 6!"tra6t3 is %ess t#a" 12 m!"t#s3 i" ?#i6# 6ase sai .eri! s#a%% &e 6!"si ere !"e $ear. & the employee has been per orming the +ob or at least one year% e'en i the per ormance is not continuous or merely intermittent% the la$ deems the repeated and continuing need or its per ormance as su icient e'idence o the necessity% i not indispensability% o that acti'ity to the business o the employer. Moreo'er% the nature o respondent<s $or( is necessary in the business in $hich 9MC is engaged. 9MC is primarily engaged in the manu acture and mar(eting o beer products% or $hich purpose% it speci ically maintains a bre$ery in Bacolod City. 3espondent% on the other hand% $as engaged as a or(li t operator tas(ed to li t and trans er pallets and pile them rom the bottling section to the piling area. 9MC admitted that it hired respondent as a or(li t operator since the third )uarter o 1::1 $hen% in the absence o ully automated palleti"ers% manual

trans ers o beer cases and empties $ould be e#tensi'e $ithin the bre$ery and its premises. Hndoubtedly% respondent is a regular employee o 9MC. Conse)uently% the employment contract $ith a i#ed period $hich 9MC had respondent e#ecute $as meant only to circum'ent respondent<s right to security o tenure and is% there ore% in'alid. 2Se6!" Iss'e4/ Ges. 9ince respondent $as already a regular employee months be ore the e#ecution o the *mployment $ith a ,i#ed 1eriod contract% its e#ecution $as merely a ploy on 9MC<s part to depri'e respondent o his tenurial security. -ence% no 'alid i#ed0term contract $as e#ecuted. !he employment status o a person is de ined and prescribed by la$ and not by $hat the parties say it should be. *)ually important to consider is that a contract o employment is impressed $ith public interest such that labor contracts must yield to the common good. 1ro'isions o applicable statutes are deemed $ritten into the contract% and the parties are not at liberty to insulate themsel'es and their relationships rom the impact o labor la$s and regulations by simply contracting $ith each other. -a'ing gained the status o a regular employee% respondent is entitled to security o tenure and could only be dismissed on +ust or authori"ed causes and a ter he has been accorded due process. 3egular *mployees are classi ied into +,- regular employees by nature of work and +.- regular employees by years of service 0the ormer re ers to those employees $ho per orm a particular acti'ity $hich is necessary or desirable in the usual business or trade o the employer% regardless o the their length o ser'ice. PL,T I"6.3 8s. Ar6e! 24<> S)RA :1;4 200: FA)TS/ May 1::/ A3C*6 applied or the position o telephone operator $ith 1L2!. 9he% ho$e'er% ailed the pre0employment )uali ying e#amination. -a'ing ailed the test% A3C*6 re)uested 1L2! to allo$ her to $or( at the latter<s o ice e'en $ithout pay. 1L2! agreed and assigned her to its commercial section $here she $as made to per orm 'arious tas(s li(e photocopying documents% sorting out telephone bills and notices o disconnection% and other minor assignments and acti'ities. A ter t$o $ee(s% 1L2! decided to pay her the minimum $age. ,ebruary 1;% 1::1 1L2! sa$ no urther need or A3C*6Qs ser'ices and decided to ire her but% through the inter'ention o 1L2!<s commercial section super'isor% she $as recommended or an on0 the0+ob training on minor tra ic $or(. 4hen she ailed

1B E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

to assimilate tra ic procedures% the company trans erred her to au#iliary ser'ices% a minor acility. 9ubse)uently% A3C*6 too( the pre0)uali ying e#ams or the position o telephone operator t$o more times but again ailed in both attempts. 6ctober 5/% 1::1 1L2! discharged A3C*6 rom employment. 9he then iled a case or illegal dismissal be ore the labor arbiter. 6n May 11% 1::5% the arbiter ruled in her a'or. 1L2! $as ordered to reinstate A3C*6 to her ? ormer position or to an e)ui'alent position.@ 8une :% 1::5 A3C*6 $as reinstated as casual employee $ith a minimum $age o 11/A per day. 9he $as assigned to photocopy documents and sort out telephone bills. )AUSE OF A)TION/ 9eptember 5% 1::A (more than three years a ter her reinstatement) A3C*6 iled a complaint or un air labor practice% underpayment o salary% underpayment o o'ertime pay% holiday pay% rest day pay and other monetary claims. 9he alleged in her complaint that% since her reinstatement% she had yet to be regulari"ed and had yet to recei'e the bene its due to a regular employee. ,E)ISION !( t#e %a&!r ar&iter3 NLR)3 )A/ August 1C% 1::B !he labor arbiter ruled that A3C*6 $as already )uali ied to become a regular employee. -e also ound that 1L2! denied her all the bene its and pri'ileges o a regular employee. 7o'ember 2C% 1::B !he 7L3C a irmed the decision o the labor arbiter inding A3C*6 eligible to become a regular employee. 8une 2:% 2//1 !he CA a irmed the decision o the 7L3C. ISSUE/ 2oes the pro'ision in Art. 2C/ o the Labor Code $hich Nre-'%ari*esO a casual employee $ho has rendered at least one year o ser'ice sub+ect to the condition that the employment subsists or the position still e#ists= 1EL,/ 3einstatement to an ?e)ui'alent position@ 1L2!<s argument that respondent<s position has been abolished% i indeed true% does not preclude A3C*6<s becoming a regular employee. !he order to reinstate her also included the alternati'e to reinstate her to ?a position e)ui'alent thereto.@ !hus% 1L2! can still ?regulari"e@ her in an e)ui'alent position. 1L2! ailed to sho$ position ?no longer subsists@ Moreo'er% 1L2!<s argument does not hold $ater in the absence o proo that the acti'ity in $hich A3C*6 $as engaged (li(e photocopying o documents and sorting o telephone bills) no longer

subsists. U" er Art. 2<03 a"$ em.%!$ee ?#! #as re" ere at %east !"e $ear !( ser8i6e Ns#a%% &e 6!"si ere a re-'%ar em.%!$ee ?it# res.e6t t! t#e a6ti8it$ i" ?#i6# #e is em.%!$e a" #is em.%!$me"t s#a%% 6!"ti"'e ?#i%e s'6# a6ti8it$ e5ists.O ,or 1L2!<s ailure to sho$ that the acti'ity underta(en by A3C*6 has been discontinued% $e are constrained to con irm her ?regulari"ation@ in that position. 2ate o regulari"ation ($hen entitled to bene its) Considering that she has already $or(ed in 1L2! or more than one year at the time she $as reinstated% she should be entitled to all the bene its o a regular employee rom 8une :% 1::5 the day o her actual reinstatement. A re-'%ar em.%!$ee is (14 !"e ?#! is eit#er e"-a-e t! .er(!rm a6ti8ities t#at are "e6essar$ !r esira&%e i" t#e 's'a% tra e !r &'si"ess !( t#e em.%!$er !r (2) a 6as'a% em.%!$ee ?#! #as re" ere at %east !"e $ear !( ser8i6e3 ?#et#er 6!"ti"'!'s !r &r!Ee"3 ?it# res.e6t t! t#e a6ti8it$ i" ?#i6# #e is em.%!$e . ABS-)BN 8s. Na*are"! 2A03 S)RA 2044 200: Fa6ts/ AB90CB7 employed respondents 7a"areno% >er"on% 2eiparine% and Lerasan as production assistants (1As) on di erent dates. !hey $ere assigned at the ne$s and public a airs% or 'arious radio programs in the Cebu Broadcasting 9tation% $ith a monthly compensation o 1.%///. !hey $ere issued AB90CB7 employees< identi ication cards and $ere re)uired to $or( or a minimum o eight hours a day% including 9undays and holidays. !hey $ere made to: a4 1repare% arrange airing o commercial broadcasting based on the daily operations log and digicart o respondent AB90CB7D &4 Coordinate% arrange personalities or air inter'ie$sD 64 Coordinate% prepare schedule o reporters or scheduled ne$s reporting and lead0in or incoming reportsD 4 ,acilitate% prepare and arrange airtime schedule or public ser'ice announcement and complaintsD e4 Assist% anchor program inter'ie$% etcD and (4 3ecord% log clerical reports% man based control radio. 1etitioner and the AB90CB7 3an(0and0,ile *mployees e#ecuted a Collecti'e Bargaining Agreement (CBA) to be e ecti'e during the period rom 2ec 11% 1::A to 2ec 11% 1:::. -o$e'er% since petitioner re used to recogni"e 1As as part o the bargaining unit% respondents $ere not included to the CBA. 2ue to a memorandum assigning 1A<s to non0drama programs% and that the 2GAB studio operations

1C E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

$ould be handled by the studio technician. !here $as a re'ision o the schedule and assignments and that respondent >er"on $as assigned as the ull0time 1A o the !F 7e$s 2epartment reporting directly to Leo Lastimosa. 6n 6ct 12% 2///% respondents iled a Complaint or 3ecognition o 3egular *mployment 9tatus% Hnderpayment o 6'ertime 1ay% -oliday 1ay% 1remium 1ay% 9er'ice &ncenti'e 1ay% 9ic( Lea'e 1ay% and 15th Month 1ay $ith 2amages against the petitioner be ore the 7L3C. Iss'e/ 467 employees= the respondents are regular

T#ere are t?! Ei" s !( re-'%ar em.%!$ees '" er t#e %a?/ 214 those engaged to per orm acti'ities $hich are "e6essar$ !r esira&%e in the usual business or trade o the employerD and 224 those casual employees $ho ha'e re" ere at %east !"e $ear !( ser8i6e% $hether continuous or bro(en% $ith respect to the acti'ities in $hich they are employed. 4hat determines $hether a certain employment is regular or other$ise is the character of the activities performed in relation to the particular trade or 'usiness ta!ing into account all the circumstances" and in some cases the length of time of its performance and its continued e$istence. 4hile %e"-t# !( time ma$ "!t &e a s!%e 6!"tr!%%i"i"terest or pro+ect employment% it can be a strong actor to determine $hether the employees $as hired or a speci ic underta(ing or in ace tas(ed to pe orm unctions $hich are 'ital% necessary and indispensable to the usual trade or business o employer. T#e em.%!$er-em.%!$ee re%ati!"s#i. &et?ee" .etiti!"er a" res.!" e"ts #as &ee" .r!8e" &$ t#e ((/ (irst. &n the selection and engagement o respondents% no peculiar or uni)ue s(ill% talent or celebrity status $as re)uired rom them because they $ere merely hired through petitioner<s personnel department +ust li(e any ordinary employee. )econd. !he so0called ?talent ees@ o respondents correspond to $ages gi'en as a result o an employer0employee relationship. 3espondents did not ha'e the po$er to bargain or huge talent ees% a circumstance negating independent contractual relationship. Third. 1etitioner could al$ays discharge respondents should it ind their $or( unsatis actory% and respondents are highly dependent on the petitioner or continued $or(. (ourth. !he degree o control and super'ision e#ercised by petitioner o'er respondents through its super'isors negates the allegation that respondents are independent contractors. The presumption is that when the work done is an integral part of the regular business of the employer and when the worker, relative to the employer, does not furnish an independent business or professional service, such work is a regular employment of such employee and not an independent contractor.

1e% / 3espondents are considered regular employees o AB90CB7 and are entitled to the bene its granted to all regular employees. W#ere a .ers!" #as re" ere at %east !"e $ear !( ser8i6e3 re-ar %ess !( t#e "at're !( t#e a6ti8it$ .er(!rme 3 !r ?#ere t#e ?!rE is 6!"ti"'!'s !r i"termitte"t3 t#e em.%!$me"t is 6!"si ere re-'%ar as %!"- as t#e a6ti8it$ e5ists. T#e reas!" &ei"- t#at a 6'st!mar$ a..!i"tme"t is "!t i" is.e"sa&%e &e(!re !"e ma$ &e (!rma%%$ e6%are as #a8i"- attai"e re-'%ar stat's. Article 2C/ o the Labor Code pro'ides: R%/01A( A2D *A$0A1 %3"1453%2T.P!he pro'isions o $ritten agreement to the contrary not$ithstanding and regardless o the oral agreement o the parties% an employment shall be deemed to be regular $here the employee has been engaged to per orm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employer e#cept $here the employment has been i#ed or a speci ic pro+ect or underta(ing the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or( or ser'ices to be per ormed is seasonal in nature and the employment is or the duration o the season. Any employee who has rendered at least one year of service, whether continuous or intermittent, is deemed regular with respect to the activity performed and while such activity actually e!ists. !he act that respondents recei'ed pre0agreed ?talent ees@ instead o salaries% that they did not obser'e the re)uired o ice hours% and that they $ere permitted to +oin other productions during their ree time are not conclusi'e o the nature o their employment. !hey are regular employees $ho per orm se'eral di erent duties under the control and direction o AB90CB7 e#ecuti'es and super'isors.

1: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

P!sei !" Fis#i"- 8s. NLR) 24<2 S)RA ;1;4 200: FA)TS/ 1ri'ate respondent $as employed by 1oseidon ,ishing in 8anuary 1:CC as Chie Mate. A ter i'e years% he $as promoted to Boat Captain. &n 1:::% petitioners% $ithout reason% demoted respondent rom Boat Captain to 3adio 6perator o petitioner 1oseidon. As a 3adio 6perator% he monitored the daily acti'ities in their o ice and recorded in the duty logboo( the names o the callers and time o their calls. 6n 5 8uly 2///% pri'ate respondent ailed to record a B:2; a.m. call in one o the logboo(s. -o$e'er% he $as able to record the same in the other logboo(. Conse)uently% $hen he re'ie$ed the t$o logboo(s% he noticed that he $as not able to record the said call in one o the logboo(s so he immediately recorded the B:2; a.m. call a ter the B:5/ a.m. entry. Around ::// o<cloc( in the morning o . 8uly 2///% petitioner 8esus% the manager% detected the error in the entry in the logboo(. 9ubse)uently% she as(ed pri'ate respondent to prepare an incident report to e#plain the reason or the said o'ersight. At around 2:// o<cloc( in the a ternoon o that same day% petitioner 1oseidon<s secretary% summoned pri'ate respondent to get his separation pay amounting to ,i ty0,i'e !housand 1esos (1;;%///.//). -o$e'er% he re used to accept the amount as he belie'ed that he did nothing illegal to $arrant his immediate discharge rom $or(. 1ri'ate respondent then iled a complaint or illegal dismissal $ith the Labor Arbiter. -e a'erred that petitioner 1oseidon employed him as a Chie Mate sometime in 8anuary 1:CC. -e claimed that he $as promoted to the position o Boat Captain i'e years a ter. -o$e'er% in 1:::% he $as demoted rom Boat Captain to 3adio 6perator $ithout any reason and shortly% he $as terminated $ithout +ust cause and $ithout due process o la$. Con'ersely% petitioners 1oseidon and !erry de 8esus strongly asserted that pri'ate respondent $as a contractual or a casual employee $hose ser'ices could be terminated at the end o the contract e'en $ithout a +ust or authori"ed cause in 'ie$ o Article 2C/ o the Labor Code. 1etitioners urther posited that $hen the pri'ate respondent $as engaged% it $as made clear to him that he $as being employed only on a ?por 'ia+e@ or per trip basis and that his employment $ould be terminated at the end o the trip or $hich he $as being hired. As such% the pri'ate respondent could not be entitled to separation pay and other monetary claims.

ISSUE/ 4hether or not respondent *sto)uia is a regular employee o petitioner. 1EL,/ !he 9C held that the ruling in the Brent case could not apply in the case at bar. !he acid test in considering i#ed0term contracts as 'alid is: i rom the circumstances it is apparent that periods ha'e been imposed to preclude ac)uisition o tenurial security by the employee% they should be disregarded or being contrary to public policy. !he 9C $ill not hesitate to nulli y employment contracts stipulating a i#ed term a ter inding that the purpose behind these contracts $as to e'ade the application o the labor la$s% since this is contrary to public policy. Moreo'er% unli(e in the Brent case $here the period o the contract $as i#ed and clearly stated% note that in the case at bar% the terms o employment o pri'ate respondent as pro'ided in the Masunduan $as not only 'ague% it also ailed to pro'ide an actual or speci ic date or period or the contract. !here is nothing in the contract that says complainant% $ho happened to be the captain o said 'essel% is a casual% seasonal or a pro+ect $or(er. !he date 8uly 1 to 51% 1::C under the heading ?1agdating@ had been placed there merely to indicate the possible date o arri'al o the 'essel and is not an indication o the status o employment o the cre$ o the 'essel. ,urthermore% as petitioners themsel'es admitted in their petition be ore this Court% pri'ate respondent $as repeatedly hired as part o the boat<s cre$ and he acted in 'arious capacities onboard the 'essel. !he test to determine $hether employment is regular or not is the reasonable connection bet$een the particular acti'ity per ormed by the employee in relation to the usual business or trade o the employer. And% i the employee has been per orming the +ob or at least one year% e'en i the per ormance is not continuous or merely intermittent% the la$ deems the repeated and continuing need or its per ormance as su icient e'idence o the necessity% i not indispensability o that acti'ity to the business. 6stensibly% in the case at bar% at di erent times% pri'ate respondent occupied the position o Chie Mate% Boat Captain% and 3adio 6perator. !he act o hiring and re0hiring in 'arious capacities is a mere gambit employed by petitioner to th$art the tenurial protection o pri'ate respondent. 9uch pattern o re0 hiring and the recurring need or his ser'ices are testament to the necessity and indispensability o such ser'ices to petitioners< business or trade. *'en i petitioners< contention that its industry is seasonal in nature% once a pro+ect or $or( pool employee has been: (14 6!"ti"'!'s%$3 as !..!se t! i"termitte"t%$3 re-#ire &$ t#e same em.%!$er

2/ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

(!r t#e same tasEs !r "at're !( tasEs D and 224 t#ese tasEs are 8ita%3 "e6essar$ a" i" is.e"sa&%e t! t#e 's'a% &'si"ess !r tra e !( t#e em.%!$er3 t#e" t#e em.%!$ee m'st &e eeme a re-'%ar em.%!$ee. &n ine% inasmuch as pri'ate respondent<s unctions as described abo'e are no doubt ?usually necessary or desirable in the usual business or trade@ o petitioner ishing company and he $as hired continuously or 12 years or the same nature o tas(s% $e are constrained to say that he belongs to the il( o regular employee. Being one% pri'ate respondent<s dismissal $ithout 'alid cause $as illegal. 1etition is denied. Bi- AA 0a"'(a6t'rer 8s. A"t!"i! 24<4 S)RA 334 200: Fa6ts/ 1etitioner Big AA Manu acturer is a sole proprietorship registered in the name o its proprietor% *nrico *. Ale+o. 3espondents iled a complaint or illegal lay0o and illegal deductions. !hat as regular employees% they $or(ed rom C:// a.m. to;:// p.m. at petitioner<s premises using petitioner<s tools and e)uipment and they recei'ed 12;/ per day. *uti)uio $as employed as carpenter0 oreman rom 1::10::D 8ay as carpenter rom 1::50::D ,elicisimo as carpenter rom 1::.0::D and Leonardo% 9r. also as carpenter rom 1::B0::D !hat they $ere dismissed $ithout +ust cause and due processD hence% their prayer or reinstatement and ull bac( $ages. 1etitioner Big AA Manu acturer contested that it is a sole proprietorship registered in the name o *nrico Ale+o and engaged in manu acturing o ice urniture% but it denied that respondents $ere its regular employees. &t claimed that *uti)uio Antonio $as one o its independent contractors $ho used the ser'ices o the other respondents. &t said that its independent contractors $ere paid by results and $ere responsible or the salaries o their o$n $or(ers. Allegedly% there $as no employer0employee relationship bet$een petitioner and respondents. But it allo$ed respondents to use its acilities to meet +ob orders. &t also denied that respondents $ere laid0o by Big AA Manu acturer% since they $ere pro+ect employees only. &t added that since *uti)uio Antonio had re used a +ob order o o ice tables% their contractual relationship ended.0 Labor Arbiter ruled against petitioners. Both appealed to 7L3C. 3espondents appealed or not ordering their reinstatement to their ormer positions. !he 7L3C modi ied the Labor Arbiter<s decision. &t ordered petitioner to reinstate respondents to their ormer positions or to pay them separation pay in case

reinstatement $as no longer easible% $ith ull bac( $ages in either case. !he 7L3C ruled that respondents $ere regular employees% not independent contractors. &t urther held that petitioner ailed to +usti y its reason or terminating respondents and its ailure to comply $ith the due process re)uirements. CA a irmed 7L3C ruling. Iss'e/ 1. 467 respondents $ere regular employees 2. 467 respondents $ere illegally dismissed R'%i"- 1. G*90 3espondents $ere employed or more than 1 year and their $or( as carpenters $as necessary or desirable in petitioner<s usual trade or business o manu acturing o ice urniture. Hnder Art. 2C/ o the Labor Code% t#e a..%i6a&%e test t! etermi"e ?#et#er a" em.%!$me"t s#!'% &e 6!"si ere re-'%ar !r "!"-re-'%ar is the reasonable connection bet$een the particular acti'ity per ormed by the employee in relation to the usual business or trade o the employer. !rue% certain orms o employment re)uire the per ormance o usual or desirable unctions and e#ceed 1 year but do not necessarily result to regular employment under Art. 2C/ o the Labor Code. 9ome speci ic e#ceptions include pro+ect or seasonal employment. Get% in this case% respondents cannot be considered pro+ect employees. 1etitioner had neither sho$n that respondents $ere hired or a speci ic pro+ect the duration o $hich $as determined at the time o their hiring nor identi ied the speci ic pro+ect or phase thereo or $hich respondents $ere hired. 4biter on (e6uirements for an Independent contractor: a) he carries a distinct and independent business% b) possesses substantial capital or in'estment in tools% e)uipment% machinery or $or( premises% c) he does not $or( $ithin another employerPcompany<s premises using the latter<s tools and materials% and d) he is not under the control and super'ision o an employer or company2. G*90 !he consistent rule is that the employer must a irmati'ely sho$ rationally ade)uate e'idence that the dismissal $as or a +usti iable cause% ailing in $hich $ould ma(e the termination illegal% as in this case.0 Contrary to petitioner<s claim o abandonment as a 'alid +ust cause or termination% herein respondents did not abandon their $or(. 1etitioner ailed to pro'e that (1) not only o respondents< ailure to report or $or( or absence $ithout 'alid reason% but(2) also o respondents< clear intention to se'er employer0 employee relations as mani ested by some o'ert acts.0 By iling the complaint or illegal dismissal $ithin t$o days o their dismissal and by see(ing reinstatement in their position paper% respondents

21 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

mani ested their intention against se'ering their employment relationship $ith petitioner and abandoning their +obs. &t is settled that an employee $ho orth$ith protests his layo cannot be said to ha'e abandoned his $or(. Pa-'i! 8s. NLR) 9.R. N!. 14;<1:3 0a$ >3 2003H Fa6ts/ Metro !imes Corporation% publisher o I!he Manila timesI hired petitioner as account e#ecuti'e tas(ed to solicit ad'ertisements or the said ne$s paper. &n return he $ill recei'e commission e)ui'alent to 1;L on direct ad'ertisements sub+ect to ta# deductions. ,urthermore he recei'es a monthly allo$ance o 2/// i he meets the )uota. 6n August 1;% 1::2 barely 2 months a ter the i th rene$al o his contract $ith the company he $as in ormed about his termination based on accusations not clearly established. &n their contract% there is a stipulation $hich states that petitioner in not an employee o the company. Moreo'er% it states that either party may terminate the contract a ter 5/ days notice. 3espondent iled a complaint or illegal dismissal. Labor Arbiter ound respondent company liable or illegal dismissal and ordered the reinstatement o the petitioner. 6n appeal 7L3C re'ersed the decision a irmed in toto by CA% hence the appeal. Iss'e/ 4hether or not petitioner in an employee o said company= 4hether or not the dismissal $as proper= 1e% / !he prime )uestion here is $hether petitioner is a regular employee or not. A re-'%ar em.%!$ee is !"e ?#! is e"-a-e t! .er(!rm a6ti8ities ?#i6# are "e6essar$ a" esira&%e i" t#e 's'a% &'si"ess !r tra e !( t#e em.%!$er as a-ai"st t#!se ?#i6# are '" ertaEe" (!r a s.e6i(i6 .r!Ie6t !r are seas!"a%. *'en in these latter cases% $here such person has rendered at least one year o ser'ice% regardless o the nature o the acti'ity per ormed or o $hether it is continuous or intermittent% the employment is considered regular as long as the acti'ity e#ists% it not being indispensable that he be irst issued a regular appointment or be ormally declared as such be ore ac)uiring a regular status. Admittedly% companyQs president acceded that petitioners $or( is o great importance in the sur'i'al o the company being the ad'ertisements solicited by the petitioner are the li eblood o the company. a. Seas!"a%

Seas!"a% 0 is one $here the $or( or ser'ice to be per ormed is seasonal in nature and the employment is or the duration o the season. 9easonal *mployee 0-ired or a speci ic period o time during the year% and may be H762 in H!6B 3ehired $hene'er their ser'ices are re)uired (e.g. arm $or(ers) At the arri'al o the season must be rehired% or else employer is guilty o illegal termination Allo$ed to see( $or( else$here $hile o 0 season 2 reJ'isites t! .r!8e seas!"a% em.%!$ees/ 1. the $or( or ser'ices per ormed by the $or(ers are seasonal in nature 2. they must be employed or the duration o one season only 9easonal $or(ers $ho are called to $or( rom time to time and are tem.!rari%$ %ai !(( 'ri"- !((-seas!" are not separated rom the ser'ice in said period% &'t are mere%$ 6!"si ere !" %ea8e '"ti% reem.%!$e . &n this case% con'ersion occurs similar to pro+ect employees. 4hen they are continuously rehired or the same tas(Pnature o tas(% they become regular employees. ,'ri"- !(( seas!"3 t#e$ are tem.!rari%$ %ai !((3 ?it#!'t .a$3 &'t t#e$ are sti%% 6!"si ere re-'%ar em.%!$ees. ,i#ed term 0 the +ob is assigned a speci ic date o e#piration e'en i the +ob is considered H762 in H!6B. !he important aspect is that the +ob is time bound. &rent school r'%i"-/ ReJ'ireme"ts (!r a 8a%i Fi5e Term em.%!$me"t/ 1. $here a i#ed period or employment $as agreed upon (no$ingly and 'oluntarily by the parties 2. $ithout any orce% duress or improper pressure being brought to bear upon the employee and absent any circumstances 'itiating consent% or 5. $here it satis actorily appears that the employer and employee dealt $ith each other on more or less e)ual terms $ith no moral dominance $hate'er being e#ercised by the ormer o'er the latter

22 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

)ases/ 1a6ie" a Fatima et.a%. 8s. NFSWF et.a%. 23>: S)RA A1<4 1A)IEN,A FATI0A a" @!r PATRI)IO VILLE9AS3 ALFONSO VILLE9AS a" )RISTINE SE9URA3 .etiti!"ers3 8s. NATIONAL FE,ERATION OF SU9AR)ANE WOR+ERS-FOO, AN, 9ENERAL TRA,E3 res.!" e"ts. FA)TS/ &n the course o a labor dispute bet$een the petitioner and respondent union% the union members $ere not gi'en $or( or more than one month. &n protest% complainants staged a stri(e $hich $as ho$e'er settled upon the signing o a Memorandum o Agreement. A conciliation meeting $as conducted $herein Luisa 3ombo% 3amona 3ombo% Bobong Abrega% and Boboy 9il'a $ere not considered by the company as employees% and thus may not be members o the union. &t $as also agreed that a number o other employees $ill be reinstated. 4hen respondents again reneged on its commitment% complainants iled the present complaint. &t is alleged by the petitioners that the abo'e employees are mere seasonal employees. ISSUE/ 4hether or not the seasonal employees ha'e become regular employees. 1EL,/ !he 9C held that or respondents to be e#cluded rom those classi ied as regular employees% it is not enough that they perform work or services that are seasonal in nature . !hey must ha'e also been employed only for the duration of one season. !he e'idence pro'es the e#istence o the irst% but not o the second% condition. !he act that respondents 00 $ith the e#ception o Luisa 3ombo% 3amona 3ombo% Bobong Abriga and Boboy 9il'a 00 repeatedly $or(ed as sugarcane $or(ers or petitioners or se'eral years is not denied by the latter. *'idently% petitioners employed respondents for more than one season. !here ore% t#e -e"era% r'%e !( re-'%ar em.%!$me"t is a..%i6a&%e. T#e .rimar$ sta" ar !( etermi"i"- re-'%ar em.%!$me"t is the reasona'le connection 'et#een the particular activity performed 'y the employee in relation to the usual trade or 'usiness of the employer. !he test is $hether the ormer is usually necessary or desirable in the usual trade or business o the employer. !he connection can be determined by considering the nature o the $or( per ormed and its relation to the scheme o the particular business or trade in its entirety. Also i the employee has been per orming the +ob or at least a year% e'en i the per ormance is not continuous and merely intermittent% the la$ deems repeated and continuing

need or its per ormance as su icient e'idence o the necessity i not indispensability o that acti'ity to the business. -ence% the employment is considered regular% but only $ith respect to such acti'ity and $hile such acti'ity e#ists. 1etition is denied. 1A)IEN,A BINO V )UEN)A 4A: S)RA 3003 A.ri% 1A3 200A FA)TS: -acienda Bino (-B) is a 25A0hectare sugar plantation in 7egros 6cc% o$ned and operated by -ortencia 9tar(e. -B consists o 22/ $or(ers per orming 'arious $or(s% such as culti'ation% planting o cane points% ertili"ation% $atering% $eeding% har'esting% and loading o har'ested sugarcanes to cargo truc(s. 6n 8uly 1C 1::A% 9tar(e issued a notice that those $ho signed in a'or o CA31 are e#pressing their desire to get out o employment. BA $or(ers $ere a ected: they regarded the notice as a notice o their termination. !hey iled a complaint or illegal dismissal% $age di erentials% 15th month pay% holiday pay and premium pay or holiday% ser'ice incenti'e lea'e pay% and moral and e#emplary damages. )tar!e*s side: -B<s board o directors $ere petitioning or reclassi ication o the hacienda (e#cept the portion earmar(ed or CA31) rom agricultural to industrial% residential and commercial. 9he $as merely gi'ing priority to those $ho supported the reclassi ication. 8uly 1::A $as o 0season% so not so many $or(ers neededD the $or( $as seasonal in nature. 9he relies on the ruling in Mercado )r. v. N+,% $here sugar arm $or(ers $ere classi ied as seasonal employees% and not regular employees. !he $or(ers $ere ree to o er their ser'ices to neighboring haciendas. ,espondents* side: !hey are regular employees. !he hacienda $as so big that they $or( there year0round and that they do not o er their ser'ices to neighboring haciendas. !he Mercado case dealt $ith a 1B.;0heactare hacienda% considerable smaller than -B. ISSUE: 467 the respondents are seasonal employees 1EL,: 76% !he respondents are regular employees. 9tar(e<s reliance on Mercado is misplaced because in that case% the $or(ers $ere classi ied as seasonal employees because they $ere employed or a de inite period o time since the hacienda $as much smaller% and they o ered their ser'ices to and $or(ed at the neighboring haciendas. !he Court reiterated the same obser'ations in -acienda (atima v. National (ederation of )ugarcane Wor!ers.(ood and /eneral Trade and

25 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

added that the petitioners in the Mercado case $ere Inot hired regularly and repeatedly or the same phasePs o agricultural $or(% but on and o or any single phase thereo .I 9tar(e did not present any e'idence that the respondents $ere re)uired to per orm certain phases o agricultural $or( or a de inite period o time. Although she asserted that the respondents made their ser'ices a'ailable to the neighboring haciendas% the records do not% ho$e'er% support such assertion. !he primary standard or determining regular employment is the reasonable connection bet$een the particular acti'ity per ormed by the employee in relation to the usual trade or business o the employer. !here is no doubt that the respondents $ere per orming $or( necessary and desirable in the usual trade or business o an employer. -ence% they can properly be classi ied as regular employees. ,or respondents t! &e e56%' e (r!m t#!se 6%assi(ie as re-'%ar em.%!$ees% it is not enough that they per orm $or( or ser'ices that are seasonal in nature. They must have been employed only for the duration of one season. 4hile the records su iciently sho$ that the respondentsQ $or( in the hacienda $as seasonal in nature% there $as% ho$e'er% no proo that they $ere hired or the duration o one season only. &n act% the payrolls% submitted in e'idence by the petitioners% sho$ that they a'ailed the ser'ices o the respondents since 1::1. Absent any proo to the contrary% the general rule o regular employment should% there ore% stand. &t bears stressing that the employer has the burden o pro'ing the la$ ulness o his employeeQs dismissal. Disposition 1etition denied. 3einstate $or(ers $ithout loss o seniority% pay bac($ages and $age di erentials% and pay attys ees. P1ILIPPINE TOBA))O FLUE-)URIN9 B RE,RYIN9 )ORPORATION3 's. NATIONAL LABOR RELATIONS )O00ISSION3 et.a%. 9.R. N!. 12;3>A ,e6em&er 103 1>>< !hese re er to the consolidated cases or payment o separation pay lodged by JtheK Lubat >roup% and or illegal dismissal and underpayment o separation pay by JtheK Luris group% $ith prayers or damages and attorney<s ees against the abo'e respondents. Fa6ts/ !here are t$o groups o employees% namely% the Lubat group and the Luris group. !he Lubat group is composed o petitioner<s seasonal employees $ho $ere not rehired or the 1::. tobacco season. At the start o that season% they $ere merely in ormed that their employment had been terminated at the end o the 1::5 season. !hey

claimed that petitioner<s re usal to allo$ them to report or $or( $ithout mention o any +ust or authori"ed cause constituted illegal dismissal. &n their Complaint% they prayed or separation pay% bac( $ages% attorney<s ees and moral damages. 6n the other hand% the Luris group is made up o seasonal employees $ho $or(ed during the 1::. season. 6n August 5% 1::.% they recei'ed a notice in orming them that% due to serious business losses% petitioner planned to close its Balinta$a( plant and trans er its tobacco processing and redrying operations to &locos 9ur. Although the closure $as to be e ecti'e 9eptember 1;% 1::.% they $ere no longer allo$ed to $or( starting August .% 1::.. &nstead% petitioner a$arded them separation pay computed according to the ollo$ing ormula: total no. o days actually $or(ed 0000000000000000000000000000000000000000000000000 # daily rate # 1; days total no. o $or(ing days in one year &n their Complaint% they claimed that the computation should be based not on the abo'e mathematical e)uation% but on the actual number o years ser'ed. &n addition% they contended that they $ere illegally dismissed% and thus they prayed or bac( $ages. Against these actual antecedents% the labor arbiter ordered the petitioner to pay complainants< separation pay di erential plus attorney<s ees in the total amount o 15%/:2%C:A.BA. 2issatis ied $ith said 2ecision% 1hilippine !obacco and the complainants iled their respecti'e appeals be ore the 7L3C. As noted earlier% the 7L3C a irmed the labor arbiter<s 2ecision. Be ore this Court% only 1hilippine !obacco iled the present recourse% as the complainants did not )uestion the 7L3C 2ecision. Iss'es/ &n the Court<s 'ie$% three issues must be tac(led: ,irst% did petitioner pro'e ?serious business losses%@ its +usti ication or the nonpayment o separation pay= 9econd% $as the dismissal o the employees 'alid= T#ir 3 #!? s#!'% t#e se.arati!" .a$ !( i%%e-a%%$ ismisse seas!"a% em.%!$ees &e 6!m.'te K 1e% / ,irst &ssue: 9erious Business Losses 7ot 1ro'en Article 2C5 o the Labor Code prescribes the re)uisites and the procedure or an employee<s dismissal arising rom the closure or cessation o operation o the establishment. &t must be noted that the present case in'ol'es the closure o merely a unit or di'ision% not the $hole

2. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

business o an other$ise 'iable enterprise. Although Article 2C5 uses the phrase ?closure or cessation o operation o an establishment or underta(ing%@ this Court pre'iously ruled in Coca0Cola Bottlers (1hils.)% &nc. '. 7L3C that said statutory pro'ision applies in cases o both complete and partial cessation o the business operation. 1etitioner did not actually close its entire business. &t merely trans erred or relocated its tobacco processing and redrying operations. Moreo'er% it $as also engaged in% among others% corn and rental operations% $hich $ere una ected by the closure o its Balinta$a( plant. !ested against the a orecited standards% $e hold that herein petitioner $as not able to pro'e serious inancial losses arising rom its tobacco operations. A close e#amination o its 9tatement o &ncome and *#penses and its recasted 'ersion thereo % $hich $ere presented in support o its contention% suggests its ailure to sho$ business losses. 6n the contrary% the 9tatement o &ncome and *#penses sho$s that the selling and administrati'e e#penses pertain not only to the tobacco business o petitioner% but also to its corn and rental operations% and that the interest e#penses pertain to all o its business operations. &n act% the a orementioned 9tatement sho$s that there $as a net gain rom operations in each year co'ered by the report. &n other $ords% the recasted inancial statement e ecti'ely modi ied the 9tatement o &ncome and *#penses by deducting rom the tobacco operations alone the operating costs pertaining to all businesses o petitioner. !he contention o petitioner that tobacco $as its main business does not +usti y the de'ious contents o the recasted inancial statement. &t is di icult to accept that it could not ha'e incurred any e#pense in its other operations. Common sense re'olts against such proposition. 9econd &ssue: Lubat >roup &llegally 2ismissed 1etitioner illegally dismissed the members o the Lubat group $hen it re used to allo$ them to $or( during the 1::. season. &t ollo$s that the employeremployee relationship bet$een herein petitioner and members o the Lubat group $as not terminated at the end o the 1::5 season. ,rom the end o the 1::5 season until the beginning o the 1::. season% they $ere considered only on lea'e but ne'ertheless still in the employ o petitioner. 1etitioner is liable or illegal dismissal and should be responsible or the reinstatement o the Lubat group and the payment o their bac( $ages. -o$e'er% since reinstatement is no longer possible as petitioner has

already closed its Balinta$a( plant% respondent members o the said group should instead be a$arded normal separation pay (in lieu o reinstatement) e)ui'alent to at least one month pay% or one month pay or e'ery year o ser'ice% $hiche'er is higher. &t must be stressed that the separation pay being a$arded to the Lubat group is due to illegal dismissalD hence% it is di erent rom the amount o separation pay pro'ided or in Article 2C5 in case o retrenchment to pre'ent losses or in case o closure or cessation o the employer<s business% in either o $hich the separation pay is e)ui'alent to at least one (1) month or one0hal (1P2) month pay or e'ery year o ser'ice% $hiche'er is higher. T#ir Iss'e/ Am!'"t !( Se.arati!" Pa$. !he amount o separation pay is based on t$o actors: the amount o monthly salary and the number o years o ser'ice. Although the Labor Code pro'ides di erent de initions as to $hat constitutes ?one year o ser'ice%@ Boo( 9i# does not speci ically de ine ?one year o ser'ice@ or purposes o computing separation pay. 1!?e8er3 Arti6%es 2<3 a" 2<4 &!t# state i" 6!""e6ti!" ?it# se.arati!" .a$ t#at a (ra6ti!" !( at %east si5 m!"t#s s#a%% &e 6!"si ere !"e ?#!%e $ear. Applying this to the case at bar% $e hold that the amount o separation pay $hich respondent members o the Lubat and Luris groups should recei'e is one0hal (1P2) their respecti'e a'erage monthly pay during the last season they $or(ed multiplied by the number o years they actually rendered ser'ice% pro'ided that they $or(ed or at least si# months during a gi'en year. !he ormula that petitioner proposes% $herein a year o $or( is e)ui'alent to actual $or( rendered or 5/5 days% is both un air and inapplicable% considering that Articles 2C5 and 2C. pro'ide that in connection $ith separation pay% a raction o at least si# months shall be considered one $hole year. Hnder these pro'isions% an employee $ho $or(ed or only si# months in a gi'en year 00 $hich is certainly less than 5/5 days 00 is considered to ha'e $or(ed or one $hole year. 7L3C 2ecision is a irmed $ith modi ications. $easonal 7orkers who are called to work from time to time and are temporarily laid off during off season are not separated from service in said period, but are merely considered on leave until reemployed or when their services may be needed. They are not strickly speaking separated from the service but are merely considered as on leave of absence without pay until they are re employed.

2; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

P1ILIPPINE FRUIT B VE9ETABLE IN,USTRIES3 IN). a" its Presi e"t a" 9e"era% 0a"a-er3 0R. PE,RO )ASTILLO3 's. NATIONAL LABOR RELATIONS )O00ISSION3 a" P#i%i..i"e Fr'it a" Ve-eta&%e W!rEers U"i!"-T'.as L!6a% )#a.ter3 9.R. N!. 122122 7'%$ 203 1>>> Fa6ts/ 1hilippine ,ruit and Fegetable &ndustries% &nc. (1,F&&) is a go'ernment0o$ned and controlled corporation engaged in the manu acture and processing o ruit and 'egetable purees or e#port. 6n 9eptember ;% 1:CC herein pri'ate respondent 1hilippine ,ruit and Fegetable 4or(ers Hnion0!upas Local Chapter% or and in behal o 12B o its members% iled a complaint or un air labor practice and illegal dismissal $ith damages against petitioner corporation. 1ri'ate respondent alleged that many o its complaining members started $or(ing or 1,F&& in 8anuary or ,ebruary 1:C5 until their dismissal on di erent dates in 1:C;% 1:CA% 1:CB and 1:CC. 1etitioner 1edro Castillo is the ormer 1resident and >eneral Manager o petitioner 1,F&&. 1etitioners urther argue that 1,F&& operates on a seasonal basis and the complainants $ho are members o respondent union are seasonal $or(ers because they $or( only during the period that the company is in operation. &ts operation starts only in ,ebruary and ceases by the end o the same month $hen the supply is consumed. &t then resumes operations at the end o April or early May% depending on the a'ailability o supply and ceases operation in 8une. !he se'erance o complainantsQ employment rom petitioner corporation $as a necessary conse)uence o the nature o seasonal employmentD and since complainants are seasonal $or(ers as de ined by the Labor Code% they cannot in'o(e any bene it. Iss'e/ 4hether or not respondents are seasonal employees $hose employments ceased during the o 0season due to no $or( and not due to illegal dismissal. 1e% / 3egular and Casual *mployment0 !he pro'isions o $ritten agreement to the contrary not$ithstanding and regardless o the oral agreement o the parties% an employment shall be deemed to be regular $here the employee has been engaged to per orm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employers% e#cept $here the employment has been i#ed or a speci ic pro+ect. An employment shall be deemed to be casual i it is not co'ered by the preceding paragraphD pro'ided% that% any employee $ho has rendered at least one year o ser'ice $hether such ser'ice is continuous or bro(en% shall be considered a regular employee $ith respect to the

acti'ity in $hich he is employed and his employment shall continue $hile such actually e#ists. An employment shall be deemed regular $here the employee: a) has been engaged to per orm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employerD or b) has rendered at least one year o ser'ice% $hether such ser'ice is continuous or bro(en% $ith respect to the acti'ity in $hich he is employed. T#e ?!rE !( 6!m.%ai"a"ts as see ers3 !.erat!rs3 s!rters3 s%i6ers3 Ia"it!rs3 ri8ers3 tr'6E #e%.ers3 me6#a"i6s a" !((i6e .ers!""e% is ?it#!'t !'&t "e6essar$ i" t#e 's'a% &'si"ess !( a (!! .r!6essi"- 6!m.a"$ %iEe .etiti!"er PFVII. 4hile it may be true that some phases o petitioner companyQs processing operations is dependent on the supply o ruits or a particular season% the other e)ually important aspects o its business% such as manu acturing and mar(eting are not seasonal. !he act is that large0scale ood processing companies such as petitioner company continue to operate and do business throughout the year e'en i the a'ailability o ruits and 'egetables is seasonal. !here ore% the petition is re'ersed $ith respect to the union members% $ho did not adduce e'idence in support o their claims. &. Pr!Ie6t Pr!Ie6t is one $here the employment has been i#ed or a speci ic pro+ect or underta(ing% the completion or termination o $hich has been determined at the time o the engagement o the employee Three instances when the project employee is converted into a regular employee# 1. A pro+ect employee may be con'erted to a regular status $hen he $as employed or a speci ic pro+ect% the completion o $hich is determined% but despite the termination o the pro+ect% he is still made to $or(. &t negates the essence o pro+ect employment. &t sho$s that the employee<s $or( is needed not only in the speci ic pro+ect. 2. 4ithin the pro+ect itsel % and be ore the completion o the pro+ect% the employee is gi'en tas(s not related at all to the pro+ect. >i'ing the employee additional $or(s negates the essence o pro+ect employment. &t sho$s that his ser'ices is not limited to the pro+ect. *'en i the e#tra $or( is not H762 in H!6B to the main business% he is con'erted to a regular employee. 5. Maraguinot case. Hnder multiple succeeding pro+ects% can ha'e gaps bet$een each pro+ect% the employees can still be con'erted to regular

2A E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

status but only $hen the pro+ect employee is rehired continuously% and or the same nature o tas(. !here is a pattern sho$ing that H762 in H!6B. .. 7ote: !he one0year rule only applies to casual employment% not to pro+ect nor seasonal employees. T?! Ei" s !( Pr!Ie6t Em.%!$ee/ 1. tas(s $hich are H762 in H!6B 2. tas(s $hich are not H762 in H!6B i. the +ob must be distinct rom the totality o *3<s business ii. the pro+ect must be de inite as to its completion iii. *mployment terminates $ith the pro+ect% regardless o the period Pri"6i.a% Test (!r etermi"i"- ?#et#er a .arti6'%ar em.%!$ee is a .r!Ie6t em.%!$ee !r "!t/ Whether or not the project employee is assigned to carry out a specific project or underta!ing" the duration and scope of #hich #ere specified at the time the employee is engaged for that project. A $or( pool is not necessary in order to con'ert the pro+ect employee into regular% But its e#istence may signi y that the pro+ect employee has become regular i there is a continuous rehiring. ReJ'ireme"ts/ 1. he must be hired or that speci ic pro+ect 2. the completion or termination o his pro+ect $as made (no$n to him )ases/ WILFRE,O ARO3 RONILO TIROL3 7OSE PA)AL,O3 PRI0ITIVO )ASFUE7O a" 0AR)IAL AB9O3 VS. NATIONAL LABOR RELATIONS )O00ISSION3 FOURT1 ,IVISION a" BENT1EL ,EVELOP0ENT )ORPORATION3 9.R. N!. 1;4;>23 0ar6# ;3 2012 The facts# 9e'eral employees o pri'ate respondent Benthel 2e'elopment Corporation% including the petitioners% iled a Complaint or illegal dismissal $ith 'arious money claims and prayer or damages against the latter% in the 7L3C Arbitration Branch 7o. F&& in Cebu City. !herea ter% Labor Arbiter *rnesto ,. Carreon rendered a decision inding pri'ate respondent guilty o illegal dismissal and ordering it to pay its thirty0si# (5A) employees 1..A%:./.// as separation pay.

!he employees% appealed rom the said decision. !he 7L3C a irmed the decision o the Labor Arbiter $ith the modi ication that pri'ate respondent pay bac($ages computed rom the respecti'e dates o dismissal until inality o the decision. 1ri'ate respondent% unsatis ied $ith the modi ication made by the 7L3C% iled a M3 $ith the contention that% since it has been ound by the Labor Arbiter and a irmed in the assailed decision that the employees $ere pro+ect employees% the computation o bac($ages should be limited to the date o the completion o the pro+ect and not to the inality o the decision. !he 7L3C% ho$e'er% denied the motion ruling that pri'ate respondent ailed to establish the date o the completion o the pro+ect. Issue# 4hether or not petitioners $ere pro+ect employees or regular employees. 8eld# According to the CA% petitioners are pro+ect employees as ound by Labor Arbiter *rnesto Carreon in his 2ecision dated May 2C% 1::C% because they $ere hired or the construction o the Cordo'a 3ee Fillage 3esort in Cordo'a% Cebu% $hich $as later on a irmed by the 7L3C in its 8anuary 12% 1::: decision. !he only discrepancy is the 6rder o the 7L3C that petitioners are entitled to bac($ages up to the inality o its decision% $hen as pro+ect employees% pri'ate respondents are only entitled to payment o bac($ages until the date o the completion o the pro+ect. &n a later resolution on pri'ate respondentQs motion or reconsideration o its 8anuary 12% 1::: decision% the 7L3C changed its indings by ruling that petitioners herein $ere regular employees and% there ore% entitled to ull bac($ages% until inality o the decision% citing that petitioners< repeated rehiring o'er a long span o time made them regular employees. &n 8anjin 8eavy Industries and *onstruction *o. 1td. v. Iba9e:, ;1/K this Court e#tensi'ely discussed the abo'e distinction% thus:# # # J!Khe principal test or determining $hether particular employees are properly characteri"ed as Ipro+ect employeesI as distinguished rom Iregular employeesI is $hether or not the pro+ect employees $ere assigned to carry out a Ispeci ic pro+ect or underta(ing%I the duration and scope o $hich $ere speci ied at the time the employees $ere engaged or that pro+ect. J11K &n a number o cases% J12K the Court has held that the length o ser'ice or the re0hiring o construction $or(ers on a pro+ect0to0pro+ect basis does not con er upon them regular employment status% since their re0 hiring is only a natural conse)uence o the act that e#perienced construction $or(ers are pre erred.

2B E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

*mployees $ho are hired or carrying out a separate +ob% distinct rom the other underta(ings o the company% the scope and duration o $hich has been determined and made (no$n to the employees at the time o the employment % are properly treated as pro+ect employees and their ser'ices may be la$ ully terminated upon the completion o a pro+ect. J15K 9hould the terms o their employment ail to comply $ith this standard% they cannot be considered pro+ect employees. &n *aramol v. 2ational 1abor (elations *ommission% J1;K and later reiterated in 9alinas% 8r. '. 7ational Labor 3elations Commission% J1AK the Court mar(edly stressed the importance o the employeesQ (no$ing consent to being engaged as pro+ect employees $hen it clari ied that Ithere is no )uestion that stipulation on employment contract pro'iding or a i#ed period o employment such as ?pro+ect0to0pro+ect@ contract is 'alid pro'ided the period $as agreed upon (no$ingly and 'oluntarily by the parties% $ithout any orce% duress or improper pressure being brought to bear upon the employee and absent any other circumstances 'itiating his consent # # #.I &t is not disputed that petitioners $ere hired or the construction o the Cordo'a 3ee Fillage 3esort in Cordo'a% Cebu. By the nature o the contract alone% it is clear that petitionersQ employment $as to carry out a speci ic pro+ect. -ence% the CA did not commit gra'e abuse o discretion $hen it a irmed the indings o the Labor Arbiter. !here ore% being pro+ect employees% petitioners are only entitled to ull bac($ages% computed rom the date o the termination o their employment until the actual completion o the $or(. &llegally dismissed $or(ers are entitled to the payment o their salaries corresponding to the une#pired portion o their employment $here the employment is or a de inite period. J1CK &n this case% as ound by the CA% the Cordo'a 3ee Fillage 3esort pro+ect had been completed in 6ctober 1::A and pri'ate respondent herein had signi ied its $illingness% by $ay o concession to petitioners% to set the date o completion o the pro+ect as March 1C% 1::BD hence% the latter date should be considered as the date o completion o the pro+ect or purposes o computing the ull bac($ages o petitioners. ,.0. )ONSUN7I3 IN). a" @!r ,AVI, 0. )ONSUN7I3 8s. ESTELITO L. 7A0IN3 9.R. N!. 1>2A143 A.ri% 1<3 2012 Fa6ts/ 6n 2ecember 1B% 1:AC% petitioner 2.M. Consun+i% &nc. (2MC&)% a construction company% hired

respondent *stelito L. 8amin as a laborer. 9ometime in 1:B;% 8amin became a helper carpenter. 9ince his initial hiring% 8amin<s employment contract had been rene$ed a number o times. J.K 6n March 2/% 1:::% his $or( at 2MC& $as terminated due to the completion o the 9M Manila pro+ect. !his termination mar(ed the end o his employment $ith 2MC& as he $as not rehired again. 6n April ;% 1:::% 8amin iled a complaint J;K or illegal dismissal% $ith se'eral money claims (including attorney<s ees)% against 2MC& and its 1residentP>eneral Manager% 2a'id M. Consun+i. 8amin alleged that 2MC& terminated his employment $ithout a +ust and authori"ed cause at a time $hen he $as already ;; years old and had no independent source o li'elihood. -e claimed that he rendered ser'ice to 2MC& continuously or almost 51 years. &n addition to the schedule o pro+ects ($here he $as assigned) submitted by 2MC& to the labor arbiter% JAK he alleged that he $or(ed or three other 2MC& pro+ects: !$in !o$ers% 3it" !o$ers% rom 8uly 2:% 1:C/ to 8une 12% 1:C2D 7e$ &stana 1ro+ect% B.9.B. Brunei% rom 8une 25% 1:C2 to ,ebruary 1A% 1:C.D and 7e$ &stana 1ro+ect% B.9.B. Brunei% rom 8anuary 2.% 1:CA to May 2;% 1:CA. 2MC& denied liability. &t argued that it hired 8amin on a pro+ect0to0pro+ect basis% rom the start o his engagement in 1:AC until the completion o its 9M Manila pro+ect on March 2/% 1::: $here 8amin last $or(ed. 4ith the completion o the pro+ect% it terminated 8amin<s employment. &t alleged that it submitted a report to the 2epartment o Labor and *mployment (26L*) e'erytime it terminated 8amin<s ser'ices. Iss'e/ 4hether or not 8amin is a regular employee. T#e )!'rtQs R'%i"As earlier mentioned% 8amin $or(ed or 2MC& or almost 51 years% initially as a laborer and% or the most part% as a carpenter. !hrough all those years% 2MC& treated him as a pro+ect employee% so that he ne'er obtained tenure. 6n the sur ace and at irst glance% 2MC& appears to be correct. 8amin entered into a contract o employment (actually an appointment paper to $hich he signi ied his con ormity) $ith 2MC& either as a ield $or(er% a temporary $or(er% a casual employee% or a pro+ect employee e'erytime 2MC& needed his ser'ices and a termination o employment paper $as ser'ed on him upon completion o e'ery pro+ect or phase o the pro+ect $here he $or(ed. J5;K 2MC& $ould then submit termination o employment reports to the 26L*% containing the names o a number o employees including 8amin. J5AK !he 7L3C and the

2C E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

CA $ould later on say% ho$e'er% that 2MC& ailed to submit termination reports to the 26L*. !he CA pierced the co'er o 8amin<s pro+ect employment contract and declared him a regular employee $ho had been dismissed $ithout cause and $ithout notice. !o reiterate% the CA<s indings $ere based on: (1) 8amin<s repeated and successi'e engagements in 2MC&<s construction pro+ects% and (2) 8amin<s per ormance o acti'ities necessary or desirable in 2MC&<s usual trade or business. 4e agree $ith the CA. &n Ligan"a '. 3BL 9hipyard Corporation% J5BK the Court held that ?JaKssuming% $ithout grantingJ%K that JtheK petitioner $as initially hired or speci ic pro+ects or underta(ings% the repeated re0hiring and continuing need or his ser'ices or o'er eight (C) years ha'e undeniably made him a regular employee.@ 4e ind the Ligan"a ruling s)uarely applicable to this case% considering that or almost 51 years% 2MC& had repeatedly% continuously and successi'ely engaged 8amin<s ser'ices since he $as hired on 2ecember 1B% 1:AC or or a total o 5C times R 5; as sho$n by the schedule o pro+ects submitted by 2MC& to the labor arbiter J5CK and three more pro+ects or engagements added by 8amin% $hich he claimed 2MC& intentionally did not include in its schedule so as to ma(e it appear that there $ere $ide gaps in his engagements. 6ne o the three pro+ects $as local% the 3it" !o$ers% J5:K rom 8uly 2:% 1:C/ to 8une 12% 1:C2% $hile the other t$o $ere o'erseas R the 7e$ &stana 1ro+ect in Brunei% 2arussalam% rom 8une 25% 1:C2 to ,ebruary 1A% 1:C.D J./K and again% the 7e$ &stana 1ro+ect% rom 8anuary 2.% 1:CA to May 2;% 1:CA. J.1K 4e re'ie$ed 8amin<s employment contracts as the CA did and $e noted that $hile the contracts indeed sho$ that 8amin had been engaged as a pro+ect employee% there $as an almost unbro(en string o 8amin<s rehiring rom 2ecember 1B% 1:AC up to the termination o his employment on March 2/% 1:::. 4hile the history o 8amin<s employment (schedule o pro+ects) J.2K relied upon by 2MC& sho$s a gap o almost our years in his employment or the period bet$een 8uly 2C% 1:C/ (the supposed completion date o the Midto$n 1la"a pro+ect) and 8une 15% 1:C. (the start o the &33& 2orm &F pro+ect)% the gap $as caused by the company<s omission o the three pro+ects abo'e mentioned. ,or not disclosing that there had been other pro+ects $here 2MC& engaged his ser'ices% 8amin accuses the company o suppressing 'ital e'idence that supports his contention that he rendered ser'ice in the company<s construction pro+ects continuously and repeatedly or more than three decades. !he non0

disclosure might not ha'e constituted suppression o e'idence R it could +ust ha'e been o'erloo(ed by the company R but the o'ersight is un air to 8amin as the non0inclusion o the three pro+ects gi'es the impression that there $ere substantial gaps not only o se'eral months but years in his employment $ith 2MC&. !hus% as 8amin e#plains% the 3it" !o$er 1ro+ect (8uly 2:% 1:C/ to 8une 12% 1:C2) and the 7e$ &stana 1ro+ect (8une 25% 1:C2 to ,ebruary 1A% 1:C.) $ould e#plain the gap bet$een the Midto$n 1la"a pro+ect (9eptember 5% 1:B: to 8uly 2C% 1:C/) and the &33& 2orm &F pro+ect (8une 15% 1:C. to March 12% 1:C;) and the other 7e$ &stana 1ro+ect (8anuary 2.% 1:CA to May 2;% 1:CA) $ould e#plain the gap bet$een 1. ;1A -anger (9eptember 15% 1:C; to 8anuary 25% 1:CA) and 1. ;1A Maint (May 2A% 1:CA to 7o'ember 1C% 1:CB). !o reiterate% 8amin<s employment history $ith 2MC& stands out or his continuous% repeated and successi'e rehiring in the company<s construction pro+ects. &n all the 5C pro+ects $here 2MC& engaged 8amin<s ser'ices% the tas(s he per ormed as a carpenter $ere indisputably necessary and desirable in 2MC&<s construction business. -e might not ha'e been a member o a $or( pool as 2MC& insisted that it does not maintain a $or( pool% but his continuous rehiring and the nature o his $or( unmista(ably made him a regular employee. &n Maraguinot% 8r. '. 7L3C% J.5K the Court held that once a pro+ect or $or( pool employee has been: (1) continuously% as opposed to intermittently% rehired by the same employer or the same tas(s or nature o tas(sD and (2) these tas(s are 'ital% necessary and indispensable to the usual business or trade o the employer% then the employee must be deemed a regular employee. ,urther% as $e stressed in Ligan"a% J..K ?JrKespondent capitali"es on our ruling in 2.M. Consun+i% &nc. '. 7L3C $hich reiterates t#e r'%e t#at t#e %e"-t# !( ser8i6e !( a .r!Ie6t em.%!$ee is "!t t#e 6!"tr!%%i"- test !( em.%!$me"t te"'re &'t ?#et#er !r "!t Rt#e em.%!$me"t #as &ee" (i5e (!r a s.e6i(i6 .r!Ie6t !r '" ertaEi"- t#e 6!m.%eti!" !r termi"ati!" !( ?#i6# #as &ee" etermi"e at t#e time !( t#e e"-a-eme"t !( t#e em.%!$ee.<@ ?9urely% length o time is not the controlling test or pro+ect employment. 7e'ertheless% it is 'ital in determining i the employee $as hired or a speci ic underta(ing or tas(ed to per orm unctions 'ital% necessary and indispensable to the usual business or trade o the employer. -ere% Jpri'ateK respondent had

2: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

been a pro+ect employee se'eral times o'er. -is employment ceased to be coterminous $ith speci ic pro+ects $hen he $as repeatedly re0hired due to the demands o petitioner<s business.@ J.;K 4ithout doubt% 8amin<s case its s)uarely into the employment situation +ust )uoted. The termination reports 4ith our ruling that 8amin had been a regular employee% the issue o $hether 2MC& submitted termination o employment reports% pursuant to 1olicy &nstructions 7o. 2/ (Hndated J.AK)% as superseded by 26L* 2epartment 6rder 7o. 1: (series o 1::5)% has become academic. 26L* 1olicy &nstructions 7o. 2/ pro'ides in part: 1ro+ect employees are not entitled to termination pay i they are terminated as a result o the completion o the pro+ect or any phase thereo in $hich they are employed% regardless o the number o pro+ects in $hich they ha'e been employed by a particular construction company. Moreo'er% the company is not re)uired to obtain a clearance rom the 9ecretary o Labor in connection $ith such termination. 4hat is re)uired o the company is a report to the nearest 1ublic *mployment 6 ice or statistical purposes. J.BK !o set the records straight% 2MC& indeed submitted reports to the 26L* but as pointed out by 8amin% the submissions started only in 1::2. J.CK 2MC& e#plained that it submitted the earlier reports (1:C2)% but it lost and ne'er reco'ered the reports. &t reconstituted the lost reports and submitted them to the 26L* in 6ctober 1::2D thus% the dates appearing in the reports. J.:K 0s &avid M. %onsunji" &M%0*s 1resident2/eneral Manager" lia'le for 3amin*s dismissal4 4hile there is no )uestion that the company is liable or 8amin<s dismissal% $e note that the CA made no pronouncement on $hether 2MC&<s 1residentP>eneral Manager% a co0petitioner $ith the company% is also liable. J;/K 7either had the parties brought the matter up to the CA nor $ith this Court. As there is no e#press inding o Mr. Consun+i<s in'ol'ement in 8amin<s dismissal% $e deem it proper to absol'e him o liability in this case. As a inal point% it is $ell to reiterate a cautionary statement $e made in Maraguinot% J;1K thus: At this time% $e $ish to allay any ears that this decision unduly burdens an employer by imposing a duty to re0hire a pro+ect employee e'en a ter

completion o the pro+ect or $hich he $as hired. !he import o this decision is not to impose a positi'e and s$eeping obligation upon the employer to re0hire pro+ect employees. 4hat this decision merely accomplishes is a +udicial recognition o the employment status o a pro+ect or $or( pool employee in accordance $ith $hat is ait accompli% i.e.% the continuous re0hiring by the employer o pro+ect or $or( pool employees $ho per orm tas(s necessary or desirable to the employer<s usual business or trade. &n sum% $e deny the present appeal or ha'ing been iled late and or lac( o any re'ersible error. 4e see no point in e#tending any liberality by disregarding the late iling as the petition lac(s merit. 4-*3*,63*% premises considered% the petition is hereby ,ENIE, or late iling and or lac( o merit. !he decision dated ,ebruary 2A% 2/1/ and the resolution dated 8une 5% 2/1/ o the Court o Appeals are A,,&3M*2. 1etitioner 2a'id M. Consun+i is absol'ed o liability in this case. SO OR,ERE,. LEYTE 9EOT1ER0AL POWER PRO9RESSIVE E0PLOYEES UNION D ALU D TU)P3 8s. P1ILIPPINE NATIONAL OIL )O0PANY D ENER9Y ,EVELOP0ENT )ORPORATION3 9.R. N!. 1;03A13 0ar6# 303 2011 FA)TS/ 176C is a go'ernment0o$ned and controlled corporation engaged in% among others o energy resources li(e geothermal energy. 1etitioner is a legitimate labor organi"ation% duly registered $ith the 26L*. 176C hired employees or its Leyte >eothermal 1o$er 1ro+ect $hereby% their employment $as only good up to the completion or termination o the pro+ect and $ould automatically e#pire upon the completion o such pro+ect. Ma+ority o the employees hired had become members o petitioner. &n 'ie$ o that circumstance% the petitioner demands or recognition o it as the collecti'e bargaining agent o said employees and or a CBA negotiation $ith it. -o$e'er% 176C did not heed such demands. 9ometime in 1::C $hen the pro+ect $as about to be completed% 176C proceeded to ser'e 7otices o !ermination o *mployment upon the employees $ho are members o the petitioner. !he petitioner iled a 7otice o 9tri(e $ith 26L* against 176C on the ground o purported commission by the latter o HL1 or Ire usal to bargain collecti'ely% union busting and mass termination.I 6n the same day% the petitioner declared a stri(e and staged such stri(e. 176C iled a complaint or% among others% 9tri(e &llegality $ith 7L3C $hich ruled in its a'our and $hose decision $as a irmed by the CA.

5/ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

ISSUE/ 467 the o icers and members o petitioner Hnion are pro+ect employees o respondent. RULIN9/ !he litmus test to determine $hether an indi'idual is a pro+ect employee lies in setting a i#ed period o employment in'ol'ing a speci ic underta(ing $hich completion or termination has been determined at the time o the particular employee<s engagement. &n this case% as pre'iously ad'erted to% the o icers and the members o petitioner Hnion $ere speci ically hired as pro+ect employees or respondent<s Leyte >eothermal 1o$er 1ro+ect located at the >reater !ongonan >eothermal 3eser'ation in Leyte. Conse)uently% upon the completion o the pro+ect or substantial phase thereo % the o icers and the members o petitioner Hnion could be 'alidly terminated. Clearly% there ore% petitioners being pro+ect employees% or% to use the correct term% seasonal employees% their employment legally ends upon completion o the pro+ect or the Jend o theK season. !he termination o their employment cannot and should not constitute an illegal dismissal. 0ILLENNIU0 ERE)TORS )ORPORATION3 VS. VIR9ILIO 0A9ALLANES3 9.R. N!. 1<43:23 N!8em&er 1A3 2010 Fa6ts/ 3espondent Firgilio Magallanes started $or(ing in 1:CC as a utility man or Laurencito !iu (!iu)% Chie *#ecuti'e 6 icer o Millennium *rectors Corporation (petitioner)% !iuQs amily% and Menneth Construction Corporation. -e $as assigned to di erent construction pro+ects underta(en by petitioner in Metro Manila% the last o $hich $as or a building in Libis% Uue"on City. &n 8uly o 2//. he $as told not to report or $or( anymore allegedly due to old age% prompting him to ile on August A% 2//. an illegal dismissal complaint 1 be ore the Labor Arbiter. Iss'e/ 4hether or not Magallanes< dismissal 'iolates security o tenure. Ar-'me"ts/ M*C 3espondent $as a pro+ect employee $hom it hired or a building pro+ect in Libis on 8anuary 5/ and $hich $as in near completion on August 5% 2//.% $hen ser'ices $ere terminated. 9aid all 26L* re)uirements $ere complied. 1etitioner mo'ed or reconsideration o the 7L3C decision% contending that respondentQs motion or reconsideration $hich it treated as an appeal $as not per ected% it ha'ing been belatedly iledD that there $as no statement o the date o receipt o the appealed decisionD and that it lac(ed 'eri ication and copies thereo $ere not urnished the ad'erse parties RULIN9/

1. A pro+ect employee is one $hose Iemployment has been i#ed or a speci ic pro+ect or underta(ing% the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or( or ser'ice to be per ormed is seasonal in nature and the employment is or the duration o the season.I As the Court has consistently held% the ser'ice o pro+ect employees are coterminus JsicK $ith the pro+ect and may be terminated upon the end or completion o that pro+ect or pro+ect phase or $hich they $ere hired. 3egular employees% in contrast% en+oy security o tenure and are entitled to hold on to their $or( or position until their ser'ices are terminated by any o the modes recogni"ed under the Labor Code. 5emphasis and underscoring supplied6 Assuming arguendo that petitioner hired respondent initially on a per pro+ect basis% his continued rehiring% as sho$n by the sample payrolls con'erted his status to that o a regular employee 2. &n labor cases% rules o procedure should not be applied in a 'ery rigid and technical sense. !echnicalities should not be permitted to stand in the $ay o e)uitably and completely resol'ing the rights and obligations o the parties. 4here the ends o substantial +ustice shall be better ser'ed% the application o technical rules o procedure may be rela#ed. As to the de ecti'e 'eri ication in the appeal memorandum be ore the 7L3C% the same liberality applies. A ter all% the re)uirement regarding 'eri ication o a pleading is ormal% not +urisdictional. 4-*3*,63*% the petition is 2*7&*2. RONILO SORRE,A VS. )A0BRI,9E ELE)TRONI)S )ORP3 9.R. N!. 1;2>2;3 Fe&r'ar$ 113 2010 Fa6ts/ 6n May C% 1:::% petitioner $as hired by respondent as a technician or a period o ; months at minimum $age. ,i'e $ee(s into the +ob (on 8une 1;% 1:::)% petitioner met an accident in $hich his le t arm $as crushed by a machine and had to be amputated. &n 9eptember 1:::% a ter he reco'ered rom his in+ury% petitioner reported or $or(. &nstead o gi'ing him employment% they made him sign a memorandum o resignation to ormali"e his separation rom the company in the light o the e#piration o his i'e0month contract. 1etitioner iled a case or illegal dismissal. 2e endant a'erred that there $as no employer0employee relationship. CA ruled that theK petitioner 3onilo

51 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

9orreda $as not a regular employee o respondent Cambridge *lectronics Corporation. Iss'e/ 4hether or not there is an employer0 employee relationship. 1e% / NO. &n this instance% petitioner% rom the period May C% 1::: to 6ctober C% 1:::% $as clearly a per0 pro+ect employee o pri'ate respondent% resulting in an employer0employee relationship. Conse)uently% )uestions or disputes arising out o this relationship ell under the +urisdiction o the labor arbiter. -o$e'er% based on petitioner<s allegations in his position paper% his cause o action $as based on an alleged second contract o employment separate and distinct rom the per0pro+ect employment contract. !hus% petitioner insisted that there $as a per ected contract o perpetual employment and that respondent $as liable to pay him damages. 4e note% ho$e'er% that petitioner iled the case only $hen respondent re used to rehire him. 4hile there $as an employer0employee relationship bet$een the parties under their i'e0month per0pro+ect contract o employment% the present dispute is neither rooted in the a orestated contract nor is it one inherently lin(ed to it. 4hile the Constitution recogni"es the primacy o labor% it also recogni"es the critical role o pri'ate enterprise in nation0building and the prerogati'es o management. A contract o perpetual employment depri'es management o its prerogati'e to decide $hom to hire% ire and promote% and renders inutile the basic precepts o labor relations. 4hile management may 'alidly $ai'e it prerogati'es% such $ai'er should not be contrary to la$% public order% public policy% morals or good customs.J2.K An absolute and un)uali ied employment or li e in the mold o petitioner<s concept o perpetual employment is contrary to public policy and good customs% as it un+ustly orbids the employer rom terminating the ser'ices o an employee despite the e#istence o a +ust or 'alid cause. &t li(e$ise compels the employer to retain an employee despite the attainment o the statutory retirement age% e'en i the employee has became a ?non0per orming asset@ or% $orse% a liability to the employer. Moreo'er% aside rom the sel 0ser'ing claim o petitioner% there $as no concrete proo to establish the e#istence o such agreement. 1etitioner cannot 'alidly orce respondent to enter into a permanent employment contract $ith him. 9uch stance is contrary to the consensuality principle o contracts as

$ell as to the management prerogati'e o respondent company to choose its employees. 4-*3*,63*% the petition is hereby 2*7&*2. WILLIA0 UY )ONSTRU)TION3 )ORP. a" @!r TERESITA UY a" WILLIA0 UY3 8s. 7OR9E R. TRINI,A,3 9.R. N!. 1<32A03 0ar6# 103 2010 Fa6ts/ !rinidad claimed that he had been $or(ing $ith the latter company or 1A years since 1:CC as dri'er o its ser'ice 'ehicle% dump truc(% and transit mi#er. -e had signed se'eral employment contracts $ith the company that identi ied him as a pro+ect employee although he had al$ays been assigned to $or( on one pro+ect a ter another $ith some inter'als. 6n 2ecember 2//.% he $as terminated rom $or( due to the shutdo$n o operations due to lac( o pro+ects but he later ound out that there $as a pro+ect in Batangas but he $as no longer hired bac(. 1etitioner company countered that it $as in the construction business. By the nature o such business% it had to hire and engage the ser'ices o pro+ect construction $or(ers% including respondent !rinidad% $hose employments had to be co0 terminous $ith the completion o speci ic company pro+ects. ,or this reason% e'ery time the company employed !rinidad% he had to e#ecute an employment contract $ith it% called 7ppointment as 1roject Wor!er. !he Labor Arbiter dismissed !rinidad<s complaint or un+ust dismissal and ordered petitioner company to pay !rinidad 11%;//.// in unpaid ser'ice incenti'e lea'e% ta(ing into consideration the three0year prescripti'e period or money claims. !he Labor Arbiter held that% since !rinidad $as a pro+ect employee and since his company submitted the appropriate establishment termination report to 26L*% his loss o $or( cannot be regarded as un+ust dismissal. 7ational Labor 3elations Commission (7L3C) a irmed the Labor Arbiter<s ruling% prompting respondent !rinidad to ele'ate his case to the Court o Appeals (CA). !he CA re'ersed the 7L3C<s indings Iss'e/ &s respondent !rinidad a regular employee= R'%i"-/ 7o. !he test or distinguishing a ?pro+ect employee@ rom a ?regular employee@ is $hether or not he has been assigned to carry out a ?speci ic pro+ect or underta(ing%@ $ith the duration and scope o his engagement speci ied at the time his ser'ice is contracted. -ere% it is not disputed that petitioner company contracted respondent !rinidad<s ser'ice by

52 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

speci ic pro+ects $ith the duration o his $or( clearly set out in his employment contracts. -e remained a pro+ect employee regardless o the number o years and the 'arious pro+ects he $or(ed or the company. >enerally% length o ser'ice pro'ides a air yardstic( or determining $hen an employee initially hired on a temporary basis becomes a permanent one% entitled to the security and bene its o regulari"ation. But this standard $ill not be air% i applied to the construction industry% simply because construction irms cannot guarantee $or( and unding or its payrolls beyond the li e o each pro+ect. !he repeated and successi'e rehiring o pro+ect employees do not )uali y them as regular employees% as length o ser'ice is not the controlling determinant o the employment tenure o a pro+ect employee% but $hether the employment has been i#ed or a speci ic pro+ect or underta(ing% its completion has been determined at the time o the engagement o the employee. !rinidad<s series o employments $ith petitioner company $ere co0terminous $ith its pro+ects. 4hen its Boni 9errano0Matipunan &nterchange 1ro+ect $as inished in 2ecember 2//.% !rinidad<s employment ended $ith it. -e $as not dismissed. -is employment contract simply ended $ith the pro+ect or $hich he had signed up. -is employment history belies the claim that he continuously $or(ed or the company. &nter'als or gaps separated one contract rom another. !he CA noted that 26L* 6rder 1: re)uired employers to submit a report o termination o employees e'ery completion o construction pro+ect. And% since petitioner company submitted at the hearing be ore the Labor Arbiter only the termination report co'ering respondent !rinidad<s last pro+ect% it ailed to satis y such re)uirement. ,.0. )ONSUN7I3 IN).3 VS. ANTONIO 9OBRES3 0A9ELLAN ,ALISAY3 9O,OFRE,O PARA9SA3 E0ILIO ALETA a" 9ENEROSO 0ELO3 9.R. N!. 1:>1;03 A'-'st <3 2010 Fa6ts/ 3espondents Antonio >obres% Magellan 2alisay% >odo redo 1aragsa% *milio Aleta and >eneroso Melo $or(ed as carpenters in the construction pro+ects o petitioner 2.M. Consun+i% &nc.% a construction company% on se'eral occasions andPor at 'arious times. !heir termination rom employment or each pro+ect $as reported to the 2epartment o Labor and *mployment (26L*)% in accordance $ith 1olicy &nstruction 7o. 2/% $hich $as later superseded by 2epartment 6rder 7o. 1:% series o 1::5. 6n 6ctober 1.% 1::C% respondents sa$ their names included in the 7otice o !ermination posted on the bulletin board at the pro+ect premises. 3espondents

iled a Complaint $ith the Arbitration Branch o the 7ational Labor 3elations Commission (7L3C) against petitioner 2.M. Consun+i% &nc. and 2a'id M. Consun+i or illegal dismissal% and non0payment o 15th month pay% i'e (;) days ser'ice incenti'e lea'e pay% damages and attorneyQs ees. 1etitioner contended that since respondents $ere terminated by reason o the completion o their respecti'e phases o $or( in the construction pro+ect% their termination $as $arranted and legal. Moreo'er% petitioner claimed that respondents ha'e been duly paid their ser'ice incenti'e lea'e pay and 15th month pay through their respecti'e ban( accounts% as e'idenced by ban( remittances. Labor Arbiter ruled that the employees $ere pro+ect employees. 7L3C a irmed the decision o the Labor Arbiter% and Court o Appeals a irmed the decision o 7L3C but a$arded damages or the ailure o the company to obser'e procedural due process. Iss'e/ 4hether or not notice (procedural due process) is re)uired in termination o pro+ect employees R'%i"-/ 7o. A pro+ect employee is de ined under Article 2C/ o the Labor Code as one $hose Iemployment has been i#ed or a speci ic pro+ect or underta(ing the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or( or ser'ices to be per ormed is seasonal in nature and the employment is or the duration o the season.I As pro+ect employees% respondentsQ termination is go'erned by 9ection 1 (c) and 9ection 2 (&&&)% 3ule NN&&& (!ermination o *mployment)% Boo( F o the 6mnibus 3ules &mplementing the Labor Code. 9ection 1 (c)% 3ule NN&&&% Boo( F o the 6mnibus 3ules &mplementing the Labor Code states: 9ection 1.)ecurity of tenure. R (a) &n cases o regular employment% the employer shall not terminate the ser'ices o an employee e#cept or +ust or authori"ed causes as pro'ided by la$% and sub+ect to the re)uirements o due process. ### ### ### (c)&n cases o pro+ect employment or employment co'ered by legitimate contracting or sub0contracting arrangements% no employee shall be dismissedprior to the completion o the pro+ect or phase thereo or $hich the employee $as engaged% or prior to the e#piration o the contract bet$een the principal and contractor% unless the dismissal is or +ust or authori"ed cause sub+ect to the re)uirements o due process or prior notice% or is brought about by

55 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

the completion o the phase o the pro+ect or contract or $hich the employee $as engaged. 3ecords sho$ that respondents $ere dismissed a ter the e#piration o their respecti'e pro+ect employment contracts% and due to the completion o the phases o $or( respondents $ere engaged or. -ence% the cited pro'isionQs re)uirements o due process or prior notice $hen an employee is dismissed or +ust or authori"ed cause (under Articles 2C2 and 2C5 o the Labor Code) prior to the completion o the pro+ect or phase thereo or $hich the employee $as engaged do not apply to this case. A*C2-9 ,urther% 9ection 2 (&&&)% 3ule NN&&&% Boo( F o the 6mnibus 3ules &mplementing the Labor Code pro'ides: 9ection 2.)tandard of due process: re8uirements of notice. R&n all cases o termination o employment% the ollo$ing standards o due process shall be substantially obser'ed. 1 .,or termination o employment based on +ust causes as de ined in Article 2C2 o the Code: (a)A $ritten notice ser'ed on the employee speci ying the ground or grounds or termination% and gi'ing to said employee reasonable opportunity $ithin $hich to e#plain his sideD (b)A hearing or con erence during $hich the employee concerned% $ith the assistance o counsel i the employee so desires% is gi'en opportunity to respond to the charge% present his e'idence or rebut the e'idence presented against himD and (c)A $ritten notice Jo K termination ser'ed on the employee indicating that upon due consideration o all the circumstance% grounds ha'e been established to +usti y his termination. &n case o termination% the oregoing notices shall be ser'ed on the employeeQs last (no$n address. &&.,or termination o employment as based on authori"ed causes de ined in Article 2C5 o the Code% the re)uirements o due process shall be deemed complied $ith upon ser'ice o a $ritten notice to the employee and the appropriate 3egional 6 ice o the 2epartment at least thirty (5/) days be ore the e ecti'ity o the termination% speci ying the ground or grounds or termination. &&&. & the termination is brought about by the completion o the contract or phase thereo % no prior notice is re)uired. & the termination is brought about by the ailure o an employee to meet the standards o the employer in the case o probationary employment% it shall be su icient that a $ritten notice

is ser'ed the employee $ithin a reasonable time rom the e ecti'e date o termination. &n this case% the Labor Arbiter% the 7L3C and the Court o Appeals all ound that respondents $ere 'alidly terminated due to the completion o the phases o $or( or $hich respondentsQ ser'ices $ere engaged. !he abo'e rule clearly states% I& the termination is brought about by the completion o the contract or phase thereo % no prior notice is re)uired.I %ioco" 3r. v. %.E. %onstruction %orporation e#plained that this is because completion o the $or( or pro+ect automatically terminates the employment% in $hich case% the employer is% under the la$% only obliged to render a report to the 26L* on the termination o the employment. -ence% prior or ad'ance notice o termination is not part o procedural due process i the termination is brought about by the completion o the contract or phase thereo or $hich the employee $as engaged. 1etitioner% there ore% did not 'iolate any re)uirement o procedural due process by ailing to gi'e respondents ad'ance notice o their terminationD thus% there is no basis or the payment o nominal damages. 7U,Y O. ,A)UITAL3 et. a%. 8s. L.0. )A0US EN9INEERIN9 )ORPORATION a" @!r LUIS 0. )A0US3 9.R. N!. 1;:;4<3 Se.tem&er 13 2010 Fa6ts/ 1etitioners (LMC*C *mployees) iled a complaint for illegal dismissal and non0payment o monetary bene its against respondent LM Camus *ngineering Corp. be ore the 7ational Labor 3elations Commission (7L3C). !he employees alleged that they $ere illegally dismissed rom employment and that their employer ailed to pay them their holiday pay% premium pay or holiday% rest day% ser'ice incenti'e lea'e pay% and 15th month pay during the e#istence and duration o their employment. !hey also a'erred that they $ere not pro'ided $ith sic( and 'acation lea'es. 3espondents denied that petitioners $ere illegally dismissed rom employment. They claimed that petitioners #ere project employees and% upon the completion o each pro+ect% they $ere ser'ed notices o pro+ect completion. !hey clari ied that the termination o petitioners< employment $as due to the completion o the pro+ects or $hich they $ere hired. 1etitioners" ho#ever" countered that they #ere regular employees as they had 'een engaged to perform activities #hich are usually necessary or desira'le in the usual 'usiness or trade of +M%E%. !hey denied that they $ere pro+ect or contractual

5. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

employees because their employment $as continuous and uninterrupted or more than one (1) year. ,inally% they maintained that they $ere part o a $or( pool rom $hich LMC*C dre$ its $or(ers or its 'arious pro+ects. !he Labor Arbiter rendered a decision declaring the dismissal o the complainant0employees as &LL*>AL and the complainants are entitled to reinstatement $ithout bac( $ages. !he 7L3C modi ied the decision o the Labor Arbiter and ordered the reinstatement o the complainants $ith limited bac($ages. !he respondents appealed the decision to the Court o Appeals and the appellate court held that the complainants are 1368*C! *M1L6G**9 and hence% there $as no illegal dismissal. ISSUE/ 4hether or not the Court o Appeals is correct in concluding that the petitioners are 1368*C! *M1L6G**9 and that their dismissal rom employment $as legal RULIN9/ !he 9upreme Court spea(ing through 8ustice 7achura ans$ered in the 7*>A!&F*. Article 2C/ o the Labor Code distinguishes a Ipro+ect employeeI rom a Iregular employeeI in this $ise: Arti6%e 2<0. Re-'%ar a" 6as'a% em.%!$me"t. R !he pro'isions o $ritten agreement to the contrary not$ithstanding and regardless o the oral agreement o the parties% an employment shall be deemed to be regular $here the employee has been engaged to per orm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employer% e#cept $here the employment has been i#ed or a speci ic pro+ect or underta(ing the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or( or ser'ices to be per ormed is seasonal in nature and the employment is or the duration o the season...### !he principal test used to determine $hether employees are pro+ect employees is $hether or not the employees $ere assigned to carry out a speci ic pro+ect or underta(ing% the duration or scope o $hich $as speci ied at the time the employees $ere engaged or that pro+ect. *'en though the absence o a $ritten contract does not by itsel grant regular status to petitioners% such a contract is evidence that petitioners #ere informed of the duration and scope of their #or! and their status as project employees. &n this case% $here no other e'idence $as o ered% the absence o the employment contracts raises a serious )uestion o $hether the employees $ere properly in ormed at the

onset o their employment o their status as pro+ect employees. 4hile it is true that respondents presented the employment contract o 2acuital% the contract does not sho$ that he $as in ormed o the nature% as $ell as the duration o his employment. &n act% the duration o the pro+ect or $hich he $as allegedly hired $as not speci ied in the contract. -ence% the 2ismissal o the petitioners are declared &LL*>AL. ROSITA PAN9ILINAN3 et a%.3 Petiti!"ers3 - 8ers's 9ENERAL 0ILLIN9 )ORPORATION3 Res.!" e"t. 9R N!. 14>32>3 7'%$ 123 2004 FA)TS/ !he respondent >eneral Milling Corporation is a domestic corporation engaged in the production and sale o li'estoc( and poultry. &t is% li(e$ise% the distributor o dressed chic(en to 'arious restaurants and establishments nation$ide. As such% it employs hundreds o employees% some on a regular basis and others on a casual basis% as ?emergency $or(ers.@ !he petitioners $ere employed by the respondent on di erent dates as emergency $or(ers at its poultry plant in Cainta% 3i"al% under separate ?temporaryPcasual contracts o employment@ or a period o i'e months. Most o them $or(ed as chic(en dressers% $hile the others ser'ed as pac(ers or helpers. Hpon the e#piration o their respecti'e contracts% their ser'ices $ere terminated. !hey later iled separate complaints or illegal dismissal and non0payment o holiday pay% 15th month pay% night0 shi t di erential and ser'ice incenti'e lea'e pay against the respondent be ore the Arbitration Branch o the 7ational Labor 3elations Commission. !he petitioners alleged that their $or( as chic(en dressers $as necessary and desirable in the usual business o the respondent% and added that although they $or(ed rom 1/:// p.m. to A:// a.m.% they $ere not paid night0shi t di erential. !hey stressed that based on the nature o their $or(% they $ere regular employees o the respondentD hence% could not be dismissed rom their employment unless or +ust cause and a ter due notice. !hey asserted that the respondent >MC terminated their contract o employment $ithout +ust cause and due notice. !hey urther argued that the respondent could not rely on the nomenclature o their employment as ?temporary or casual.@ ISSUE/ 4hether or not the petitioners $ere regular employees o the respondent >MC $hen their employment $as terminated.

5; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

1EL,/ !he 9C held the petitioners $ere employees $ith a i#ed period% and% as such% $ere not regular employees. Article 2C/ o the Labor Code comprehends three (inds o employees: (a) regular employees or those $hose $or( is necessary or desirable to the usual business o the employerD (b) pro+ect employees or those $hose employment has been i#ed or a speci ic pro+ect or underta(ing the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or( or ser'ices to be per ormed is seasonal in nature and the employment is or the duration o the seasonD and% (c) casual employees or those $ho are neither regular nor pro+ect employees. A regular employee is one $ho is engaged to per orm acti'ities $hich are necessary and desirable in the usual business or trade o the employer as against those $hich are underta(en or a speci ic pro+ect or are seasonal.J.1K !here are t$o separate instances $hereby it can be determined that an employment is regular: (1) i the particular acti'ity per ormed by the employee is necessary or desirable in the usual business or trade o the employerD and% (2) i the employee has been per orming the +ob or at least a year. Article 2C/ o the Labor Code does not proscribe or prohibit an employment contract $ith a i#ed period. &t does not necessarily ollo$ that $here the duties o the employee consist o acti'ities usually necessary or desirable in the usual business o the employer% the parties are orbidden rom agreeing on a period o time or the per ormance o such acti'ities. !here is thus nothing essentially contradictory bet$een a de inite period o employment and the nature o the employee<s duties. 9tipulations in employment contracts pro'iding or term employment or i#ed period employment are 'alid $hen the period $ere agreed upon (no$ingly and 'oluntarily by the parties $ithout orce% duress or improper pressure% being brought to bear upon the employee and absent any other circumstances 'itiating his consent% or $here it satis actorily appears that the employer and employee dealt $ith each other on more or less e)ual terms $ith no moral dominance $hate'er being e#ercised by the ormer o'er the latter. An e#amination o the contracts entered into by the petitioners sho$ed that their employment $as limited to a i#ed period% usually i'e or si# months% and did not go beyond such period. !he records re'eal that the stipulations in the employment contracts $ere (no$ingly and 'oluntarily agreed to by the petitioners $ithout orce% duress or improper pressure% or any circumstances that 'itiated their consent. 9imilarly% nothing therein sho$s that

these contracts $ere used as a subter uge by the respondent >MC to e'ade the pro'isions o Articles 2B: and 2C/ o the Labor Code. !he petitioners $ere hired as ?emergency $or(ers@ and assigned as chic(en dressers% pac(ers and helpers at the Cainta 1rocessing 1lant. 4hile the petitioners< employment as chic(en dressers is necessary and desirable in the usual business o the respondent% they $ere employed on a mere temporary basis% since their employment $as limited to a i#ed period. As such% they cannot be said to be regular employees% but are merely ?contractual employees.@ Conse)uently% there $as no illegal dismissal $hen the petitioners< ser'ices $ere terminated by reason o the e#piration o their contracts. Lac( o notice o termination is o no conse)uence% because $hen the contract speci ies the period o its duration% it terminates on the e#piration o such period. A contract or employment or a de inite period terminates by its o$n term at the end o such period. 1etition is denied. ).E. )!"str'6ti!" )!r.. 8s. Isaa6 )i!6!3 7r. 9R N!. 1A:<>:3 Se.t. <3 2004 Fa6ts/ &saac Cioco% et al. $ere hired by C.*. Construction Corporation% a domestic corporation engaged in the construction business% hired $or(ers as carpenters and laborers in 'arious construction pro+ects rom 1::/ to 1:::. !he latest o $hich $as >!& !o$er in Ma(ati. 1rior to the start o e'ery pro+ect% the $or(ers signed indi'idual employment contracts. !he contract stipulated that the period o employment shall be co0terminus $ith the completion o the pro+ect% unless sooner terminated by you prior to the completion o the pro+ects. May and 8une 1:::% $or(ers $ere terminated by the company on the ground o completion o the phases o the >!& !o$er pro+ect. Alleging that they $ere regular employees% they iled or illegal dismissal. LA arbiter rendered +udgment in a'or o the company on April 1B% 2///. -e ruled that the $or(ers $ere pro+ect employees as e'ident in the employment contractsD that due notice $ere a ordedD re)uired termination reports $ere submitted to 26L*. !he 7L3C a irmed the LA<s decision on appeal. !he $or(ers iled special ci'il action or certiorari $ith CA. 6n August 2C% 2//2% the CA rendered its no$ assailed decision% the dispositi'e portion o $hich is: W-E,E(O,E" premises considered" the instant petition is partially given &9E %O9,)E. The assailed &ecision of the National +a'or ,elations

5A E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

%ommission dated Octo'er :;" :<<= affirming the &ecision of the +a'or 7r'iter dated 7pril =>" :<<< dismissing the petitioners* complaint for illegal dismissal and claims for under payment 5sic6 and non.payment of monetary 'enefits for lac! of merit" and its ,esolution of Novem'er :?" :<<= denying petitioners* Motion for ,econsideration are here'y 7((0,ME&" 'ut MO&0(0E&" in that although petitioners #ere project employees" their dismissal as such project employees is here'y declared 0++E/7+" and private respondent %.E. %onstruction %orporation is directed to pay 'ac! #ages computed from the date of termination" i.e." May :>" =??? for petitioners 0saac %ioco" 3r." %armelo 3uan@o" %ecelio 5sic6 )oler and Aenito /alvadores and from 3une B" =??? for petitioners ,e'ie Mercado" Aaysa Aenjamin 5sic6 and ,odrigo Napoles" up to the date of completion of the construction of the /T0 To#er project. !he $or(ers contend that they are regular employees% hence entitled to reinstatement and bac( $ages rom the time o their illegal dismissal. !he company% ho$e'er% contends that the $or(ers are its pro+ect employees% that they are not illegally dismissed. ISSUE/ 4P7 the $or(ers $ere regular employees o the company. 4P7 the $or(ers $ere illegally dismissed. !he LA% 7L3C% CA unanimously ound that the $or(ers $ere pro+ect employees. !hey hold that act the $or(ers ha'e been employed $ith company or se'eral years% did not automatically ma(e them regular employees considering that the de inition o regular employment in Article 2C/ o the Labor Code% ma(es speci ic e#ception $ith respect to pro+ect employment. !he re0hiring o petitioners on a pro+ect0 to0pro+ect basis did not con er upon them regular employment status. !he practice $as dictated by the practical consideration that e#perienced construction $or(ers are more pre erred. &t did not change their status as pro+ect employees !he ne#t issue is $hether the 463M*39 $ere illegally dismissed. !he CA ruled that they $ere illegally dismissed as: !here $as no e'idence presented by the C6M1A7G to sho$ that the 463M*39 had been duly noti ied or in ormed be orehand o their dismissal and the reasons there or. ,urthermore% the C6M1A7G allegedly ailed to present e'idence conclusi'ely pro'ing completion o the >!& !o$er pro+ect or phases thereo or

$hich the ser'ices o the 463M*39 had been engaged. &ndi'idual notices o termination had been sent to the 463M*39 9ection 21; (&&&)% 3ule NN&&&% Boo( F o the Om"i&'s R'%es Im.%eme"ti"- t#e La&!r )! e pro'ides that no prior notice o termination is re)uired i the termination is brought about by completion o the contract or phase thereo or $hich the $or(er has been engaged. !his is because completion o the $or( or pro+ect automatically terminates the employment% in $hich case% the employer is% under the la$% only obliged to render a report to the 26L* on the termination o the employment. C6M1A7G ailed to present e'idence conclusi'ely sho$ing actual completion o the >!& !o$er pro+ect or respecti'e phases thereo or $hich the 463M*39 had been hired

!he court again re'ie$ the records and it sho$s that hat the C6M1A7G submitted the needed e'idence. &n its motion or reconsideration o the CA<s decision% the C6M1A7G attached the ollo$ing: a. 1rogress Billing 3eports clearly sho$ing that the >!& !o$er pro+ect $as already C/.:2/5L and C1.5B.BL accomplished as o May 51% 1::: and 8une 5/% 1:::% respecti'ely. b. 9peci ically% the particular orm% concreting and masonry $or(s or $hich the 463M*39 had been hired and assigned $ere already completed or near completion. !he 463M*39 did not )uestion the 'eracity o the e'idence presented and +ust insisted that they are regular employees o the C6M1A7G% hence% not liable or termination on mere ground o pro+ect completion. Considering the oregoing% $e hold that the C6M1A7G complied $ith the procedural as $ell as the substanti'e re)uirements o due process $ith respect to the 463M*39< termination% as ound by the Labor Arbiter and the 7L3C. 4e re'erse the CA. !he termination rom employment o pro+ect employees &saac Cioco% 8r.% !heir a$ard o bac($ages computed rom the date o their termination is set aside A&es6! )!"str'6ti!" a" ,e8t. )!r. 8s. Ramire* 24<; S)RA >4 FA)TS/ 1etitioner company $as engaged in a construction business $here respondents $ere hired on di erent dates rom 1:BA to 1::2 either as laborers% road roller operators% painters or dri'ers.

5B E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

&n 1::B% respondents iled 2 separate complaints or illegal dismissal against the company and its >eneral Manager be ore the Labor Arbiter (LA). 1etitioners allegedly dismissed them $ithout a 'alid reason and $ithout due process o la$. !he complaints also included claims or non0payment o the 15th month pay% i'e days< ser'ice incenti'e lea'e pay% premium pay or holidays and rest days% and moral and e#emplary damages. !he LA later ordered the consolidation o the t$o complaints. 1etitioners denied liability and countered that respondents $ere ?pro+ect employees@ since their ser'ices $ere necessary only $hen the company had pro+ects to be completed. 1etitioners argued that% being pro+ect employees% respondents< employment $as coterminous $ith the pro+ect to $hich they $ere assigned. !hey $ere<nt regular employees $ho en+oyed security o tenure and entitlement to separation pay upon termination rom $or(. A ter trial% the LA declared respondents as regular employees because they belonged to a ?$or( pool@ rom $hich the company dre$ $or(ers or assignment to di erent pro+ects% at its discretion. -e ruled that respondents $ere hired and re0hired o'er a period o 1C years% hence% they $ere deemed to be regular employees. -e li(e$ise ound that their employment $as terminated $ithout +ust cause. !hus% in its +udgment% the LA declared petitioner company guilty o illegal dismissal and ordered it to reinstate the respondents to their ormer positions $ith bac($ages and other bene its and that i reinstatement $as not easible% that separation pay be a$arded. 1etitioners appealed to the 7L3C $hich a irmed the LA<s decision. !hey later iled a petition or re'ie$ in the CA arguing that they $ere not liable or illegal dismissal since respondents< ser'ices $ere merely put on hold until the resumption o their business operations. !hey also a'erred that they had paid respondents their ull $ages and bene its as pro'ided by la$% hence% the latter had no more right to urther bene its. !he CA% ta(ing note o the act that petitioners pre'iously used the de ense that the respondents $ere pro+ect employees $ho $ere not entitled to security o tenure and no$ say that the respondents $ere not dismissed but their employment merely suspended% dismissed the appeal and dismissed the M,3 as $ell. ISSUES : 1. 467 the respondents $ere regular employees 2. 467 respondents $ere illegally dismissed

1EL,/ 1. G*9. (atio &n determining the nature o one<s employment% length o ser'ice is not a controlling actor (easoning 8urisprudence: !he 9C ruled that respondents $ere regular employees but not or the reasons gi'en by the LA ($hich both the 7L3C and the CA a irmed). Citing 1alomar" et al. v. N+,%" the 9C held that contrary to the dis)uisitions o the LA% employees (li(e respondents) $ho $or( under di erent pro+ect employment contracts or se'eral years do not automatically become regular employeesD they can remain as pro+ect employees regardless o the number o years they $or(. Length o time is not a controlling actor in determining the nature o one<s employment. 0 Moreo'er% employees $ho are members o a ?$or( pool@ rom $hich a company (li(e petitioner corp.) dra$s $or(ers or deployment to its di erent pro+ects do not become regular employees by reason o that act alone. !he Court has enunciated in the cases o ,aycor 7ircontrol )ystems" 0nc. v. N+,% % and 7+9. T9%1 v. N+,%% that members o a ?$or( pool@ can either be pro+ect employees or regular employees !he principal test or determining $hether employees are ?pro+ect employees@ or ?regular employees@ is $hether they are assigned to carry out a speci ic pro+ect or underta(ing% the duration and scope o $hich are speci ied at the time they are engaged or that pro+ect. 9uch duration% as $ell as the particular $or(Pser'ice to be per ormed% is de ined in an employment agreement and is made clear to the employees at the time o hiring. 1etitioners did not ha'e that (ind o agreement $ith respondents. 7either did they in orm the respondents o the nature o their $or( at the time o hiring. -ence% or ailure o petitioners to substantiate their claim that respondents $ere pro+ect employees% $e are constrained to declare them as regular employees ,urthermore% petitioners cannot belatedly argue that respondents continue to be their employees (so as to escape liability or illegal dismissal). Be ore the LA% petitioners staunchly postured that respondents $ere only ?pro+ect employees@ $hose employment tenure $as coterminous $ith the pro+ects they $ere assigned to. -o$e'er% be ore the CA% they too( a di erent stance by insisting that respondents continued to be their employees. 1etitioners< inconsistent and con licting positions on their true relation $ith respondents ma(e it all the more e'ident that the latter $ere indeed their regular employees.

5C E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

2. G*9. (atio !he la$ re)uires that the employer urnish the employee 2 $ritten notices: (1) a notice in orming them o the particular acts or $hich they are being dismissed and (2) a notice ad'ising them o the decision to terminate the employment% be ore termination can be 'alidly e ected. (easoning &n resol'ing the issue o illegal dismissal% the 9C simply stated that petitioners ailed to adhere to the ?t$o0notice rule%@ and said that respondents $ere ne'er gi'en such notices. Disposition 1etition denied IS0AEL SA0SON3 vs. NLR) B ATLANTI) 9ULF 9.R. N!. 1131::. Fe&r'ar$ 1 3 1>>: FA)TS: 1etitioner had been $or(ing or respondent Atlantic >ul and 1aci ic Co. Manila or appro#imately 2C years and his pro+ect0to0pro+ect employment $as rene$ed se'eral times. -is successi'e contracts o employment re)uired him to per orm 'irtually the same (ind o $or( throughout his period o employment. 1etitioner $ould be re0hired immediately% some or a gap o one day to one $ee( rom the last pro+ect to the succeeding one. ISSUE: 467 petitioner is a regular employee 1EL,: Article 2C1 o the Labor Code pertinently prescribes that the pro'isions o $ritten agreement to the contrary not$ithstanding and regardless o the oral agreements o the parties% an employment shall be deemed to be regular $here the employee has been engaged to per orm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employer. 4here rom the circumstances it appeared that periods ha'e been imposed to preclude the ac)uisition o tenurial security by the employee% they should be struc( do$n as contrary to public policy% morals% good customs% or public order. !here can be no escape rom the conclusion that the employee is a regular employee o the respondent. ABS-)BN 8s. Na*are"! 2A03 S)RA 2044 FA)TS/ 1etitioner AB90CB7 Broadcasting Corporation (AB90CB7) employed respondents 7a"areno% >er"on% 2eiparine% and Lerasan as production assistants (1As) on di erent dates. !hey $ere assigned at the ne$s and public a airs% or 'arious radio programs in the Cebu Broadcasting 9tation% $ith a monthly compensation o 1.%///. !hey $ere issued AB90CB7 employees< identi ication cards and $ere re)uired to $or( or a minimum o eight hours a day% including 9undays and holidays.

!he 1As $ere under the control and super'ision o Assistant 9tation Manager 2ante 8. Lu"on% and 7e$s Manager Leo Lastimosa. 6n 6ctober 12% 2///% respondents iled a Complaint or 3ecognition o 3egular *mployment 9tatus% Hnderpayment o 6'ertime 1ay% -oliday 1ay% 1remium 1ay% 9er'ice &ncenti'e 1ay% 9ic( Lea'e 1ay% and 15th Month 1ay $ith 2amages against the petitioner be ore the 7L3C. Complainants alleged that they $ere engaged by respondent AB90CB7 as regular and ull0time employees or a continuous period o more than i'e (;) years $ith a monthly salary rate o ,our !housand (1.%///.//) pesos beginning 1::; up until the iling o this complaint on 7o'ember 2/% 2///. 3espondents insisted that they belonged to a ?$or( pool@ rom $hich petitioner chose persons to be gi'en speci ic assignments at its discretion% and $ere thus under its direct super'ision and control regardless o nomenclature. Complainants urther pray o this Arbiter to declare them regular and permanent employees o respondent AB90CB7 as a condition precedent or their admission into the e#isting union and collecti'e bargaining unit o respondent company $here they may as such ac)uire or other$ise per orm their obligations thereto or en+oy the bene its due there rom. ,or its part% petitioner alleged in its position paper that the respondents $ere 1As $ho basically assist in the conduct o a particular program ran by an anchor or talent. Among their duties include monitoring and recei'ing incoming calls rom listeners and ield reporters and calls o ne$s sourcesD generally% they per orm leg $or( or the anchors during a program or a particular production. !hey are considered in the industry as ?program employees@ in that% as distinguished rom regular or station employees% they are basically engaged by the station or a particular or speci ic program broadcasted by the radio station. 1etitioner asserted that as 1As% the complainants $ere issued talent in ormation sheets $hich are updated rom time to time% and are thus made the basis to determine the programs to $hich they shall later be called on to assist. 1etitioner maintained that 1As% reporters% anchors and talents occasionally ?sideline@ or other programs they produce% such as drama talents in other productions. As program employees% a 1A<s engagement is coterminous $ith the completion o the program% and may be e#tendedPrene$ed pro'ided that the program is on0goingD a 1A may also be assigned to ne$ programs upon the cancellation o one program and the commencement o another.

5: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

As such program employees% their compensation is computed on a program basis% a i#ed amount or per ormance ser'ices irrespecti'e o the time consumed. At any rate% petitioner claimed% as the payroll $ill sho$% respondents $ere paid all salaries and bene its due them under the la$. Hpon appeal% the 7L3C held that respondents are regular employees o the petitioner and that they are co'ered by the CBA. !he CA li(e$ise dismissed the petition or certiorari iled by the petitioner. -ence% this petition. ISSUE/ 4Pn respondents are regular employees o AB9 CB7. 1EL,/ ,espondents are ,egular employees of the petitioner" 7A) %AN. 4here a person has rendered at least one year o ser'ice% regardless o the nature o the acti'ity per ormed% or $here the $or( is continuous or intermittent% the employment is considered regular as long as the acti'ity e#ists% the reason being that a customary appointment is not indispensable be ore one may be ormally declared as ha'ing attained regular status. Article 2C/ o the Labor Code pro'ides: A3!. 2C/. 3*>HLA3 A72 CA9HAL *M1L6GM*7!.R!he pro'isions o $ritten agreement to the contrary not$ithstanding and regardless o the oral agreement o the parties% an employment shall be deemed to be regular $here the employee has been engaged to per orm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employer e#cept $here the employment has been i#ed or a speci ic pro+ect or underta(ing the completion or termination o $hich has been determined at the time o the engagement o the employee or $here the $or( or ser'ices to be per ormed is seasonal in nature and the employment is or the duration o the season. !he primary standard% there ore% o determining regular employment is the reasona'le connection bet$een the particular acti'ity per ormed by the employee in relation to the usual trade or business o the employer. !he test is $hether the ormer is usually necessary or desirable in the usual business or trade o the employer. !he connection can be determined by considering the nature o $or( per ormed and its relation to the scheme o the particular business or trade in its entirety. Also% i the employee has been per orming the +ob or at least a year% e'en i the per ormance is not continuous and merely intermittent% the la$ deems repeated and continuing need or its per ormance as su icient

e'idence o the necessity i not indispensability o that acti'ity to the business. -ence% the employment is considered regular% but only $ith respect to such acti'ity and $hile such acti'ity e#ists. 7ot considered regular employees are ?pro+ect employees%@ the completion or termination o $hich is more or less determinable at the time o employment% such as those employed in connection $ith a particular construction pro+ect% and ?seasonal employees@ $hose employment by its nature is only desirable or a limited period o time. *'en then% any employee $ho has rendered at least one year o ser'ice% $hether continuous or intermittent% is deemed regular $ith respect to the acti'ity per ormed and $hile such acti'ity actually e#ists. &t is o no moment that petitioner hired respondents as ?talents.@ !he act that respondents recei'ed pre0 agreed ?talent ees@ instead o salaries% that they did not obser'e the re)uired o ice hours% and that they $ere permitted to +oin other productions during their ree time are not conclusi'e o the nature o their employment. 3espondents cannot be considered ?talents@ because they are not actors or actresses or radio specialists or mere cler(s or utility employees. !hey are regular employees $ho per orm se'eral di erent duties under the control and direction o AB90CB7 e#ecuti'es and super'isors. !hus% there are t$o (inds o regular employees under the la$: (1) those engaged to per orm acti'ities $hich are necessary or desirable in the usual business or trade o the employerD and (2) those casual employees $ho ha'e rendered at least one year o ser'ice% $hether continuous or bro(en% $ith respect to the acti'ities in $hich they are employed. Additionally% respondents cannot be considered as pro+ect or program employees because no e'idence $as presented to sho$ that the duration and scope o the pro+ect $ere determined or speci ied at the time o their engagement. Hnder e#isting +urisprudence% pro+ect could re er to t$o distinguishable types o acti'ities. ,irst% a pro+ect may re er to a particular +ob or underta(ing that is $ithin the regular or usual business o the employer% but $hich is distinct and separate% and identi iable as such% rom the other underta(ings o the company. 9uch +ob or underta(ing begins and ends at determined or determinable times. 9econd% the term pro+ect may also re er to a particular +ob or underta(ing that is not $ithin the regular business o the employer. 9uch a +ob or underta(ing must also be identi iably separate and distinct rom the ordinary or regular business operations o the employer. !he +ob or underta(ing also begins and ends at determined or determinable

./ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

times. !he principal test is $hether or not the pro+ect employees $ere assigned to carry out a speci ic pro+ect or underta(ing% the duration and scope o $hich $ere speci ied at the time the employees $ere engaged or that pro+ect. As gleaned rom the records o this case% petitioner itsel is not certain ho$ to categori"e respondents. &n its earlier pleadings% petitioner classi ied respondents as program employees% and in later pleadings% independent contractors. 1rogram employees% or pro+ect employees% are di erent rom independent contractors because in the case o the latter% no employer0employee relationship e#ists. 1etition is denied. P!sei !" Fis#i"- 8s. NLR) 24<2 S)RA ;1;4 Fa6ts/ 1etitioner 1oseidon ,ishing is a ishing company engaged in the deep0sea ishing industry $ith !erry de 8esus as the manager. 8immy 9. *sto)uia $as employed as Chie Mate in 8anuary 1:CC and a ter i'e years. !he contract $ith *usto)ia per the IMasunduanI% there $as a pro'ision stating that he $as being employed only on a C*por viaje** basis and that his employment $ould be terminated at the end o the trip or $hich he $as being hired. -e $as promoted to Boat Captain but $as later demoted to 3adio 6perator. As a 3adio 6perator% he monitored the daily acti'ities in their o ice and recorded in the duty logboo( the names o the callers and time o their calls. 6n 5 8uly 2///% *sto)uia ailed to record a B:2; a.m. call in one o the logboo(s. 4hen he re'ie$ed the t$o logboo(s% he noticed that he $as not able to record the said call in one o the logboo(s so he immediately recorded the B:2; a.m. call a ter the B:5/ a.m. entry. &n the morning o . 8uly 2///% petitioner detected the error in the entry in the logboo(. *sto)uia $as as(ed to prepare an incident report to e#plain the reason or the said o'ersight. 6n the same day% 1oseidon<s secretary summoned *sto)uia to get his separation pay *sto)uia iled a complaint or illegal dismissal $ith the Labor Arbiter. 1oseidon and !erry de 8esus asserted that *sto)uia $as a contractual or a casual employee employed only on aDpor viajeD or per trip basis and that his employment $ould be

terminated at the end o the trip or $hich he $as being hired. Iss'es/ 467 *usto)ia $as a regular employee 467 deep 0sea ishing is a seasonal industry 467 *usto)ia $as illegally dismissed R'%i"-/ Ges% *usto)uia $as a regular employee. Article 2C/ dra$s a line bet$een regular and casual employment. !he pro'ision enumerates t$o (2) (inds o employees% the regular employees and the casual employees. !he regular employees consist o the ollo$ing: 1) those engaged to per orm acti'ities $hich are usually necessary or desirable in the usual business or trade o the employerD and 2) those $ho ha'e rendered at least one year o ser'ice $hether such ser'ice is continuous or bro(en. &n a span o 12 years% *usto)uia $or(ed or petitioner irst as a Chie Mate% then Boat Captain% and later as 3adio 6perator. -is +ob $as directly related to the deep0sea ishing business o petitioner 1oseidon. -is $or( $as% there ore% necessary and important to the business o his employer. 9uch being the scenario in'ol'ed% *usto)uia is considered a regular employee. !here is nothing in the contract that says complainant is a casual% seasonal or a pro+ect $or(er. !he date 8uly 1 to 51% 1::C under the heading I1agdatingI had been placed there merely to indicate the possible date o arri'al o the 'essel and is not an indication o the status o employment o the cre$ o the 'essel. !he test to determine $hether employment is regular or not is the reasona'le connection 'et#een the particular activity performed 'y the employee in relation to the usual 'usiness or trade of the employer. And% i the employee has been per orming the +ob or at least one year% e'en i the per ormance is not continuous or merely intermittent% the la$ deems the repeated and continuing need or its per ormance as su icient e'idence o the necessity% i not indispensability o that acti'ity to the business. &n the case at bar% the act o hiring and re0hiring in 'arious capacities is a mere gambit employed by petitioner to th$art the tenurial protection o pri'ate respondent. 9uch pattern o re0hiring and the recurring need or his ser'ices are testament to the necessity and indispensability o such ser'ices to petitioners< business or trade. 7o% the acti'ity o catching ish is a continuous process and could hardly be considered as seasonal in nature.

.1 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

1ro+ect employees is de ined as those $or(ers hired: (1) or a speci ic pro+ect or underta(ing% and (2) the completion or termination o such pro+ect has been determined at the time o the engagement o the employee. !he principal test or determining $hether particular employees are Ipro+ect employeesI as distinguished rom Iregular employees%I is #hether or not the Dproject employeesD #ere assigned to carry out a Dspecific project or underta!ing"D the duration and scope of #hich #ere specified at the time the employees #ere engaged for that project. &n this case% *usto)uia $as ne'er in ormed that he $ill be assigned to a Ispeci ic pro+ect or underta(ing@ at the time o their engagement. 6nce a pro+ect or $or( pool employee has been: (1) continuously% as opposed to intermittently% re0hired by the same employer or the same tas(s or nature o tas(sD and (2) these tas(s are 'ital% necessary and indispensable to the usual business or trade o the employer% then the employee must be deemed a regular employee. *usto)uia<s unctions $ere usually necessary or desirable in the usual business or trade o petitioner ishing company and he $as hired continuously or 12 years or the same nature o tas(s. -ence% he $as o regular employee. Ges% *usto)ia $as illegally dismissed. !here is no su icient e'idence on record to pro'e *usto)ia<s negligence% gross or simple% in the per ormance o his duties to $arrant a reduction o si# months salary and be summarily dismissed. At best% the simple negligence is punishable only $ith admonition or suspension or a day or t$o. -is dismissal $as $ithout 'alid cause and $here illegal dismissal is pro'en% the $or(er is entitled to bac( $ages and other similar bene its $ithout deductions or conditions. PL,T 8s. Y%a-a" 2A0< S)RA 314 A 1ro+ect employee is assigned to carry out a speci ic pro+ect or underta(ing the duration and scope o $hich are speci ied at the time the employee is engaged in the pro+ect. A pro+ect is a +ob or underta(ings o the company. A pro+ect employee is assigned to a pro+ect $hich begins and ends at determined or determinable times.

Ba#ia S#i..i"- Ser8i6es 8s. Re$"a% ! )#'a 9.R. N!. 1:21>A A.ri% <3 200< Fa6ts/ 1ri'ate respondent 3eynaldo Chua $as hired by the petitioner shipping company% Bahia 9hipping 9er'ices% &nc.% as a restaurant $aiter on board a lu#ury cruise ship liner MP9 Blac( 4atch pursuant to a 1hilippine 6'erseas *mployment Administration (16*A) appro'ed employment contract dated 6ctober :% 1::A or a period o nine (:) months rom 6ctober 1C% 1::A to 8uly 1B% 1::B. 6n 6ctober 1C% 1::A% the pri'ate respondent le t Manila or -eathro$% *ngland to board the said sea 'essel $here he $ill be assigned to $or(. 6n ,ebruary 1;% 1::B% the pri'ate respondent reported or his $or(ing station one and one0hal hours late. 6n ,ebruary 1B% 1::B% the master o the 'essel ser'ed to the pri'ate respondent an o icial $arning0termination orm pertaining to the said incident. 6n March C% 1::B% the 'esselQs master% ship captain !hor ,leten conducted an in)uisitorial hearing to in'estigate the said incident. !herea ter% on March :% 1::B% pri'ate respondent $as dismissed rom the ser'ice on the strength o an unsigned and undated notice o dismissal. An alleged record or minutes o the said in'estigation $as attached to the said dismissal notice. 6n March 2.% 1::B% the pri'ate respondent iled a complaint or illegal dismissal and other monetary claims% $hich case $as assigned to Labor Arbiter Manuel M. Manansala. Iss'es/ 1. 4hether or not respondent is entitled to o'ertime pay $hich $as incorporated in his a$ard or the une#pired portion o the contract despite the act that he did not render o'ertime $or(D and 2. 4hether or not it is proper or the 7L3C to a$ard money claims despite the act that the 7L3C decision% and a irmed by the Court o Appeals% did not state clearly the acts and the e'idence upon $hich such conclusions are based. S) R'%i"-/ &t being settled that the dismissal o respondent $as illegal% it ollo$s that the latter is entitled to payment o his salary or the une#pired portion o his contract% as pro'ided under 3epublic Act (3.A.) 7o. C/.2% considering that his employment $as pre0terminated on March :% 1::B or our months prior to the e#piration o his employment contract on 8uly 1B% 1::B. -o$e'er% the LA limited the a$ard to an amount e)ui'alent to respondentQs salary or three months.

.2 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

!he 7L3C a irmed said a$ard but deducted there rom his salary or one day as penalty or the tardiness incurred. !he CA a irmed the one0day salary deduction imposed by the 7L3C but remo'ed the three months 0 salary cap imposed by the LA. &n e ect% as this particular monetary a$ard no$ stands% it is to be computed based on the salary o respondent co'ering the period March :% 1::B to 8uly 1B% 1::B% less his salary or one day. 1etitioner )uestions the CA or li ting the three0month salary cap% pointing out that the LA and 7L3C decisions $hich imposed the cap can no longer be altered as said decisions $ere not )uestioned by respondent. &ndeed% a party $ho has ailed to appeal rom a +udgment is deemed to ha'e ac)uiesced to it and can no longer obtain rom the appellate court any a irmati'e relie other that $hat $as already granted under said +udgment. -o$e'er% $hen strict adherence to such technical rule $ill impair a substanti'e right% such as that o an illegally dismissed employee to monetary compensation as pro'ided by la$% then e)uity dictates that the Court set aside the rule to pa'e the $ay or a ull and +ust ad+udication o the case. !he Court has consistently applied the oregoing e#ception to the general rule. &t does so yet again in the present case. 9ection 1/ o 3.A. 7o. C/.2% entitles an o'erseas $or(er $ho has been illegally dismissed to Ihis salaries or the une#pired portion o the employment contract or or three (5) months or e'ery year o the une#pired term% $hiche'er is less.I !he CA correctly applied the interpretation o the Court in Marsaman Manning 7gency" 0nc. v. National +a'or ,elations %ommission that the second option $hich imposes a three months salary cap applies only $hen the term o the o'erseas contract is i#ed at one year or longerD other$ise% the irst option applies in that the o'erseas $or(er shall be entitled payment o all his salaries or the entire une#pired period o his contract. &n )!ippers 1acific" 0nc. v. Mira%$herein the o'erseas contract in'ol'ed $as only or si# months% the Court held that it is the irst option pro'ided under 9ection 1/ o 3.A. 7o. C/.2 $hich is applicable in that the o'erseas $or(er $ho $as illegally dismissed is entitled to payment o all his salaries co'ering the entire une#pired period o his contract. !he CA committed no error in adhering to the pre'ailing interpretation o 9ection 1/ o 3.A. 7o. C/.2. ,inally% the Court comes to the last issue on $hether in the computation o the oregoing a$ard% respondentQs Iguaranteed o'ertimeI pay amounting to H9V1:B.// per month should be included as part

o his salary. 1etitioner contends that there is no actual or legal basis or the inclusion o said amount because% a ter respondentQs repatriation% he could not ha'e rendered any o'ertime $or(. !his time% petitionerQs contention is $ell0ta(en. !he Court had occasion to rule on a similar issue in )tolt.Nielsen Marine )ervices 51hils.6" 0nc. v. National +a'or ,elations %ommission % $here the 7L3C $as )uestioned or a$arding to an illegally dismissed o'erseas $or(er i#ed o'ertime pay e)ui'alent to the une#pired portion o the latterQs contract. &n resol'ing the )uestion% the Court% citing %agampan v. National +a'or ,elations %ommission % held that although an o'erseas employment contract may guarantee the right to o'ertime pay% entitlement to such bene it must irst be established% other$ise the same cannot be allo$ed. -ence% it being improbable that respondent rendered o'ertime $or( during the une#pired term o his contract% the inclusion o his Iguaranteed o'ertimeI pay into his monthly salary as basis in the computation o his salaries or the entire une#pired period o his contract has no actual or legal basis and the same should ha'e been disallo$ed. Vir-i%i! Sa.i! 8s. )astr! 9R N!. 1AA0343 0a$ 223 200< Fa6ts/ !he contro'ersy started $ith a complaint iled by petitioner against Hndaloc Construction andPor *ngineer Cirilo Hndaloc or illegal dismissal% underpayment o $ages and nonpayment o statutory bene its. 3espondent Hndaloc Construction% a single proprietorship o$ned by Cirilo Hndaloc% is engaged in road construction business in Cebu City. 1etitioner had been employed as $atchman rom 1 May 1::; to 5/ May 1::C $hen he $as terminated on the ground that the pro+ect he $as assigned to $as already inished% he being allegedly a pro+ect employee. But petitioner asserted that he $as a regular employee ha'ing been engaged to per orm $or(s $hich are Iusually necessary or desirableI in respondentsQ business. Iss'e/ 1. 4hether or not the petitioner is a pro+ect employee . 2. 4hether or not he is entitled to salary di erential apart rom attorney<s ees. R'%i"-/ !hat petitioner $as a pro+ect employee became a non0issue beginning $ith the decision o the Labor Arbiter. Contested still is his entitlement to salary di erential% apart rom attorneyQs ees. 4ith regards to this issue% the court said that the conclusion o the Labor Arbiter that entries in the 2ecember 1::; payroll sheet could ha'e been altered is utterly baseless. !he claim that the 2ecember 1::; payroll sheet $as $ritten in pencil and $as thus rendered it prone to alterations or

.5 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

erasures is clearly non se)uitur. !he same is true $ith respect to the type$ritten payroll sheets. &n act% neither the Labor Arbiter nor the 7L3C ound any alteration or erasure or traces thereat% $hether on the pencil0$ritten or type$ritten payroll sheets. &ndeed% the most minute e#amination $ill not re'eal any tampering. ,urthermore% i there is any ad'erse conclusion as regards the 2ecember 1::; payroll sheet% it must be con ined only to it and cannot be applied to the type$ritten payroll sheets. Moreo'er% absent any e'idence to the contrary% good aith must be presumed in this case. *ntries in the payroll% being entries in the course o business% en+oy the presumption o regularity under 3ule 15/% 9ection .5 o the 3ules o Court. -ence% $hile as a general rule% the burden o pro'ing payment o monetary claims rests on the employer% $hen raud is alleged in the preparation o the payroll% the burden o e'idence shi ts to the employee and it is incumbent upon him to adduce clear and con'incing e'idence in support o his claim. Hn ortunately% petitionerQs bare assertions o raud do not su ice to o'ercome the disputable presumption o regularity. 4hile $e adhere to the position o the appellate court that the ItendencyI to alter the entries in the payrolls $as not substantiated% $e cannot ho$e'er subscribe to the total deletion o the a$ard o salary di erential and attorneyQs ees% as it so ruled. !he a$ard o attorneyQs ees is $arranted under the circumstances o this case. !hus% the petition is partially granted. 1etitioner is a$arded the salary di erential in the reduced amount o 115%1;A.// and respondents are directed to pay the same% as $ell as ten percent (1/L) o the a$ard as attorneyQs ees. 6. Pie6e-Rate )ase/ La&!r )!"-ress !( t#e P#i%s. Vs. NLR) S)RA A0>4

6n 7o'ember 1::/% petitioners through LC1 1resident 7a'arro submitted to pri'ate respondents a proposal or collecti'e bargaining. 6n 8anuary 1::1% petitioners iled a complaint against pri'ate respondents or Hn air Labor 1ractice by $ay o &llegal Loc(out andPor 2ismissalD Hnion busting thru -arassments JsicK% threats% and inter ering $ith the rights o employees to sel 0organi"ationD Fiolation o the Memorandum o Agreement dated 6ctober 25% 1::/D Hnderpayment o 4ages in 'iolation o 3.A. 7o. AA./ and 3.A. 7o. AB2B% such as 4ages promulgated by the 3egional 4age BoardD Actual% Moral and *#emplary 2amages.I Iss'e/ 467 the petitioners are entitled to labor standard bene its considering they are paid by piece rate $or(er. 1e% / !he petitioners are so entitled to these bene its namely% holiday pay% premium pay% 15th month pay and ser'ice incenti'e lea'e. !hree (5) actors lead us to conclude that petitioners% although piece0rate $or(ers% $ere regular employees o pri'ate respondents. ,irst% as to the nature o petitionersQ tas(s $ere necessary or desirable in the usual business o pri'ate respondents% $ho $ere engaged in the manu acture and selling o such ood productsD second% petitioners $or(ed or pri'ate respondents throughout the year% and third% the length o time that petitioners $or(ed or pri'ate respondents. !hus% $hile petitionersQ mode o compensation $as on a Iper piece basis%I the status and nature o their employment $as that o regular employees. !he 3ules &mplementing the Labor Code e#clude certain employees rom recei'ing bene its such as nighttime pay% holiday pay% ser'ice incenti'e lea'e and 15th month pay% I ield personnel and other employees $hose time and per ormance is unsuper'ised by the employer% including those $ho are engaged on tas( or contract basis% purely commission basis% or those $ho are paid a i#ed amount or per orming $or( irrespecti'e o the time consumed in the per ormance thereo .I 1lainly% petitioners as piece0rate $or(ers do not all $ithin this group. As mentioned earlier% not only did petitioners labor under the control o pri'ate respondents as their employer% li(e$ise did petitioners toil throughout the year $ith the ul illment o their )uota as supposed basis or compensation.

22>0

Fa6ts/ !he :: persons named as petitioners in this proceeding $ere ran(0and0 ile employees o respondent *mpire ,ood 1roducts% $hich hired them on 'arious dates. 1etitioners iled against pri'ate respondents a complaint or payment o money claims and or 'iolation o labor standards la$s !hey also iled a petition or direct certi ication o petitioner Labor Congress o the 1hilippines as their bargaining representati'e. &n an 6rder dated 6ctober 2.% 1::/% Mediator Arbiter appro'ed the memorandum o agreement and certi ied LC1 Ias the sole and e#clusi'e bargaining agent among the ran(0and0 ile employees o *mpire ,ood 1roducts or purposes o collecti'e bargaining $ith respect to $ages% hours o $or( and other terms and conditions o employmentI.

.. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

,urther% in 9ection C(b)% 3ule &F% Boo( &&& $hich $e )uote hereunder% piece $or(ers are speci ically mentioned as being entitled to holiday pay. 9*C. C. -oliday pay o certain employees. R (b) 4here a co'ered employee is paid by results or output% such as payment on piece $or(% his holiday pay shall not be less than his a'erage daily earnings or the last se'en (B) actual $or(ing days preceding the regular holiday: 1ro'ided% ho$e'er% that in no case shall the holiday pay be less than the applicable statutory minimum $age rate. &n addition% the 3e'ised >uidelines on the &mplementation o the 15th Month 1ay La$% in 'ie$ o the modi ications to 1.2. 7o. C;1 1: by Memorandum 6rder 7o. 2C% clearly e#clude the employer o piece rate $or(ers rom those e#empted rom paying 15th month pay% to $it: 2. *N*M1!*2 *M1L6G*39 !he ollo$ing employers are still not co'ered by 1.2. 7o. C;1: b. *mp loyers o those $ho are paid on purely commission% boundary or tas( basis% and those $ho are paid a i#ed amount or per orming speci ic $or(% irrespecti'e o the time consumed in the per ormance thereo % e#cept $here the $or(ers are paid on piece0rate basis in $hich case the employer shall grant the re)uired 15th month pay to such $or(ers. !he 3e'ised >uidelines as $ell as the 3ules and 3egulations identi y those $or(ers $ho all under the piece0rate category as those $ho are paid a standard amount or e'ery piece or unit o $or( produced that is more or less regularly replicated% $ithout regard to the time spent in producing the same. As to o'ertime pay% the rules% ho$e'er% are di erent. According to 9ec 2(e)% 3ule &% Boo( &&& o the &mplementing 3ules% $or(ers $ho are paid by results including those $ho are paid on piece0$or(% ta(ay% pa(iao% or tas( basis% i their output rates are in accordance $ith the standards prescribed under 9ec. C% 3ule F&&% Boo( &&&% o these regulations% or $here such rates ha'e been i#ed by the 9ecretary o Labor in accordance $ith the a oresaid section% are not entitled to recei'e o'ertime pay. As such% petitioners are beyond the ambit o e#empted persons and are there ore entitled to o'ertime pay. Lam&! 8s. NLR) 2O6t. 2:3 1>>>4 Fa6ts/ 1etitioners A'elino Lambo and Ficente Belocura $ere employed as tailors by pri'ate

respondents 8.C. !ailor 9hop andPor 8ohnny Co on 9eptember 1/% 1:C; and March 5% 1:C;% respecti'ely. !hey $or(ed rom C:// a.m. to B:// p.m. daily% including 9undays and holidays. As in the case o the other 1// employees o pri'ate respondents% petitioners $ere paid on a piece0$or( basis% according to the style o suits they made. 3egardless o the number o pieces they inished in a day% they $ere each gi'en a daily pay o at least 1A..//. 6n 8anuary 1B% 1:C:% petitioners iled a complaint against pri'ate respondents or illegal dismissal and sought reco'ery o o'ertime pay% holiday pay% premium pay on holiday and rest day% ser'ice incenti'e lea'e pay% separation pay% 15th month pay% and attorney<s ees. A ter hearing% Labor Arbiter ound pri'ate respondents guilty o illegal dismissal and accordingly ordered them to pay petitioners< claims. 6n appeal% the 7L3C re'ersed the decision o the Labor Arbiter. !he 7L3C held petitioners guilty o abandonment o $or( and accordingly dismissed their claims e#cept that or 15th month pay. Iss'e/ 467 the petitioners are entitled to the minimum bene its pro'ided by la$. 1e% / !he petitioners are entitled to the minimum bene its pro'ided by la$. !here is no dispute that petitioners $ere employees o pri'ate respondents although they $ere paid not on the basis o time spent on the +ob but according to the )uantity and the )uality o $or( produced by them. !here are t$o categories o employees paid by results: (1) those $hose time and per ormance are super'ised by the employer. (-ere% there is an element o control and super'ision o'er the manner as to ho$ the $or( is to be per ormed. A piece0rate $or(er belongs to this category especially i he per orms his $or( in the company premises.)D and (2) those $hose time and per ormance are unsuper'ised. (-ere% the employer<s control is o'er the result o the $or(. 4or(ers on pa(yao and ta(ay basis belong to this group.) Both classes o $or(ers are paid per unit accomplished. 1iece0rate payment is generally practiced in garment actories $here $or( is done in the company premises% $hile payment on pa(yao and ta(ay basis is commonly obser'ed in the agricultural industry% such as in sugar plantations $here the $or( is per ormed in bul( or in 'olumes di icult to )uanti y. . 1etitioners belong to the irst category% i.e.% super'ised employees. &n this case% pri'ate respondents e#ercised control o'er the $or( o petitioners. As tailors% petitioners $or(ed in the company<s premises rom C:// a.m. to

.; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

B:// p.m. daily% including 9undays and holidays. !he mere act that they $ere paid on a piece0rate basis does not negate their status as regular employees o pri'ate respondents. !he term I$ageI is broadly de ined in Art. :B o the Labor Code as remuneration or earnings% capable o being e#pressed in terms o money $hether i#ed or ascertained on a time% tas(% piece or commission basis. 1ayment by the piece is +ust a method o compensation and does not de ine the essence o the relations. 7or does the act that petitioners are not co'ered by the 999 a ect the employer0employee relationship. As petitioners $ere illegally dismissed% they are entitled to reinstatement $ith bac( $ages. !he Arbiter applied the rule in the Mercury 2rug case% according to $hich the reco'ery o bac( $ages should be limited to three years $ithout )uali ications or deductions. Any a$ard in e#cess o three years is null and 'oid as to the e#cess. !he Labor Arbiter correctly ordered pri'ate respondents to gi'e separation pay. 0AR+ RO)1E INTERNATIONAL AN,@OR E,UAR,O ,AYOT a" SUSAN ,AYOT3 8s. NLR) et.a%. 9.R. N!. 123<2A3 A'-'st 313 1>>> FA)TS/ 6n di erent dates% pri'ate respondents iled separate complaints or underpayment o $ages and non0payment o o'ertime pay against petitioners Mar( 3oche &nternational (M3&)% *duardo 2ayot and 9usan 2ayot. 1ri'ate respondents sought the assistance o a labor organi"ation $hich helped them organi"e the Mar( 3oche 4or(ers Hnion (M34H). Apparently ir(ed by the idea o a union $ithin the company% petitioners ordered pri'ate respondents to $ithdra$ the petition and urther threatened them that should they insist in the organi"ation o a union they $ould be dismissed. Hn a"ed% pri'ate respondents re used. As e#pected% pri'ate respondents $ere discharged rom $or(. 1etitioners disclaimed (no$ledge o any de iciency o$ing to pri'ate respondents since all the bene its due them as re)uired by la$ $ere ully paid% e#cept o'ertime pay $hich they $ere not entitled to on account o their being piece0rate $or(ers. !he Labor Arbiter rendered his decision declaring as illegal the constructi'e dismissal o pri'ate respondents and ordered their reinstatement% payment o bac($ages% salary di erentials and proportionate 15th month pay and ser'ice incenti'e lea'e pay. 6n appeal% the 7ational Labor 3elations Commission (7L3C) a irmed the decision o the Labor Arbiter% but set aside the a$ard o ser'ice incenti'e lea'e on the ground that pri'ate respondents $ere not entitled thereto as they $ere piece0rate $or(ers. 1etitioners mo'ed or reconsideration% but it $as denied. -ence% the present petition.

ISSUE/ 467 the dismissal o pri'ate respondents $as a constructi'e dismissal or an illegal dismissal 1EL,/ Constructi'e dismissal or a constructi'e discharge has been de ined as a )uitting because continued employment is rendered impossible% unreasonable or unli(ely% as an o er in'ol'ing a demotion in ran( and a diminution in pay. &n the instant case% pri'ate respondents $ere not demoted in ran( nor their pay diminished considerably. !hey $ere simply told $ithout prior $arning or notice that there $as no more $or( or them. A ter recei'ing the notice o hearing o the petition or certi ication election on 2B 6ctober 1::2% petitioners immediately told pri'ate respondents that they $ere no longer employed. *'idently it $as the iling o the petition or certi ication election and organi"ation o a union $ithin the company $hich led petitioners to dismiss pri'ate respondents and not petitionersQ allegations o absence or abandonment by pri'ate respondents. !he ormation o a labor union has ne'er been a ground or 'alid termination% and $here there is an absence o clear% 'alid and legal cause% the la$ considers the termination illegal. d. Pr!&ati!"ar$ is one $ho is on tentati'e employment during $hich the employer determines $hether he (employee) is )uali ied or permanent employment. 1robationary period is A months or the employer to determine the eligibility o the employee. But the period may be shortened or e#tended. 1robationary employee is con'erted to regular a ter the period imposed has lapsed% and the employee continues to $or(. &t implies that the employee has passed and is eligible or regular employment. Also% i the terms and conditions o employment are not clearly pro'ided by the employer% the standards are not clear then the employee is deemed a regular employee. !his is because the employee has no (no$ledge o $hat standards he or she must meet% and so this should not $or( to his or her pre+udice. *mployee is hired or A months in order to determine )uali ication or capacity as a regular employee although an employee can become regular right a$ay $ithout going through probation. !he employee is gi'en the standards at the time o engagement (employer must e#plain not merely gi'ing document) LC pro'ides that the duration o probation is A months (ma#imum period o probation). !he e#ceptions are the ollo$ing: (c) $$$ unless it is co'ered by an apprenticeship

.A E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

agreement stipulating a longer period such as +obs $hich are highly technical ( not an employee)D and (d) &n cases o academic personnel: the Manual o 3egulations or 1ri'ate 9chool pro'ides a longer probationary period. A6a emi6 .ers!""e%- &nclude all school personnel $ho are ormally engaged in actual teaching ser'ice or research assignment% either on ull0time or part0 time basis% as $ell as those $ho possess certain prescribed unctions directly supporti'e o teaching% such as registrars% librarian% guidance counselors% researchers% and other similar persons. !hey include school o icials responsible or academic matters% and may include other school o icials. Se6 >2. D 0a"'a% !( Re-'%ati!" !( Pri8ate S6#!!%s d. or those in the secondary and elementary le'el% a probationary period o not more than 5 consecuti'e years o satis actory ser'ice (calendar year) e. or those in the tertiary le'el% not more than A consecuti'e regular semesters o satis actory ser'ice (school year) . or those in trimester% or not more than : consecuti'e trimesters o satis actory ser'ice (school year) N!"-a6a emi6 .ers!""e%- means school personnel usually engaged in administrati'e unctions $ho are not co'ered under the de inition o academic personnel. !hey may include school o icials. W#e" is .r!&ati!"ar$ em.%!$me"t .ermissi&%eK a. $hen the $or( re)uires special )uali ications% s(ills training or e#perience b. $hen the $or(% +ob or position in'ol'ed is permanent% regular% stable or inde inite and not merely casual or intermittent c. i the $or( is not intended to circum'ent the security o tenure d. i it is necessary or customary or the position or the +ob in'ol'ed 9e"era% r'%e/ 1robationary period should not e#ceed A months rom the date the employee started $or(ing. E56e.ti!"/ !he A months period pro'ided in the la$ admits o certain e#ceptions such as: 1. $hen the *3 and ** mutually agree on a shorter or longer periodD 2. $hen the nature o $or( to be per ormed by the ** re)uired a longer periodD

5. $hen a longer period is re)uired and established by company policy 9ecurity o tenure is still a'ailable to probationary employees% but only or a limited period.

)ases/ )EBU 0ARINE BEA)1 RESORT3et.a%.vs. NLR) et.a%. 9.R. N!. 1432A2. O6t. 233 2003 FA)TS/ 6n 8anuary 1::/% Cebu Marine Beach 3esort started operations $ith the recruitment o its employees including petitioners 3odrigue"% Fillegas and &got and became ully operational on March 1::/. !he respondents had to undergo a special training in 8apanese customs% traditions% and discipline% as $ell as hotel and resort ser'ices. !his special training $as super'ised by petitioner 9asa(i. 6n May 2.% 1::/% 9asa(i suddenly scolded respondents and hurled brooms% loor maps% iron trays% ire hoses and other things at them. 3espondents staged a $al(0out as a sign o protest and gathered in ront o the resort. !he ormer reacted by shouting at them to go home and ne'er to report bac( to $or(. !hus the employees iled $ith the 3egional Arbitration Branch at Cebu City a complaint or illegal dismissal and other monetary claims against petitioners. 6n May 2C% 1::/% the company through its acting general manager 1elae" sent letters to respondents re)uiring them to e#plain $hy they should not be terminated rom employment on the grounds o abandonment o $or( and ailure to )uali y $ith the standards or probationary employees. !he Labor Arbiter rendered a 2ecision date March 25% 1::5 dismissing respondents< complaint but directing them to immediately report bac( to $or(. 6n 8une 2C% 1::.% 7L3C re'ersed the Labor Arbiters 2ecision% declaring that the respondents $ere dismissed illegally and ordering their reinstatement $ith payment o ull bac( $ages rom May 2.% 1::/ up to their actual reinstatement or in lieu thereo % the payment o their respecti'e separation pay rom May 2.% 1::/ up to the date they $ere supposed to be reinstated% as $ell as attorney<s ees. 6n ,ebruary 2C% 1::;% the 7L3C issued a 3esolution declaring that the bac( $ages shall correspond only to the period rom May 2.% 1::/ (the date o their

.B E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

dismissal) until March 25% 1::5 ($hen they $ere ordered reinstated by the Labor Arbiter)% sub+ect to the deduction o their earnings rom other sources during the pendency o the appeal. 6n March 22% 1::;% petitioners iled $ith this Court a petition or certiorari% prohibition and in+unction $ith prayer or the issuance o a temporary restraining order. 6n 7o'ember ;% 1:::% the Court o Appeals rendered its 2ecision a irming $ith modi ication the 2ecision and 3esolution o the 7L3C that the bac( $ages should be computed rom the date o the dismissal o pri'ate respondents until the inality o this 2ecision $ithout deduction rom earnings during the pendency o the appeal and the a$ard o separation pay must be e)ui'alent to one0hal months< salary or e'ery year o ser'ice commencing li(e$ise on the date o the dismissal o pri'ate respondents until the inality o this 2ecision. 1etitioner iled a motion or reconsideration% but $as denied. -ence% a petition or re'ie$ on certiorari $as done. R! i" A%6ira 8s. NLR)3 9.R.14><A> 27'"e >3 20044 Fa6ts/ Middleby 1hilippines Corp. hired petitioner as engineering support ser'ices super'isor on a probationary basis or si# months. 6n 2/ 7o'ember 1::A% a senior o icer o Middleby $ithheld his time card and did not allo$ him to $or(. Alcira iled $ith the 7L3C a complaint or illegal dismissal on the contention that he had become a regular employee $hen he $as illegally dismissed. &n their de ense% respondents claim that% during petitioner<s probationary employment% he sho$ed poor per ormance in his assigned tas(s% incurred ten absences% $as late se'eral times and 'iolated company rules on the $earing o uni orm. 9ince he ailed to meet company standards% petitioner<s application to become a regular employee $as disappro'ed and his employment $as terminated. Iss'es a" R'%i"-s/ +,- 7hether petitioner was allowed to work beyond his probationary period and was therefore already a regular employee at the time of his alleged dismissal. 1etitioner insists that he already attained the status o a regular employee $hen he $as dismissed on 7o'ember 2/% 1::A because% ha'ing started $or( on May 2/% 1::A% the si#0month probationary period ended on 7o'ember 1A% 1::A. According to petitioner<s computation% since Article 15 o the Ci'il

Code pro'ides that one month is composed o thirty days% si# months total one hundred eighty days. As the appointment pro'ided that petitioner<s status $as ?probationary (A mos.)@ $ithout any speci ic date o termination% the 1C/th day ell on 7o'ember 1A% 1::A. !hus% $hen he $as dismissed on 7o'ember 2/% 1::A% he $as already a regular employee. 1etitioner<s contention is incorrect. 6ur computation o the A0month probationary period is rec(oned rom the date o appointment up to the same calendar date o the Ath month ollo$ing. &n short% since the number o days in each particular month $as irrele'ant% petitioner $as still a probationary employee $hen respondent Middleby opted not to ?regulari"e@ him on 7o'ember 2/% 1::A. +.- 7hether respondent 3iddleby informed petitioner of the standards for <regulari:ation= at the start of his employment. 9ection A (d) o 3ule 1 o the &mplementing 3ules o Boo( F& o the Labor Code (2epartment 6rder 7o. 1/% 9eries o 1::B) pro'ides that: &n all cases o probationary employment% the employer shall ma(e (no$n to the employee the standards under $hich he $ill )uali y as a regular employee at the time o his engagement. 4here no standards are made (no$n to the employee at that time% he shall be deemed a regular employee. 4e hold that respondent Middleby substantially noti ied petitioner o the standards to )uali y as a regular employee $hen it apprised him% at the start o his employment% that it $ould e'aluate his super'isory s(ills a ter i'e months. an employer is deemed to substantially comply $ith the rule on noti ication o standards i he apprises the employee that he $ill be sub+ected to a per ormance e'aluation on a particular date a ter his hiring. 4e agree $ith the labor arbiter $hen he ruled that: &n the instant case% petitioner cannot success ully say that he $as ne'er in ormed by pri'ate respondent o the standards that he must satis y in order to be con'erted into regular status. !his runs counter to the agreement bet$een the parties that a ter i'e months o ser'ice the petitioner<s per ormance $ould be e'aluated. &t is only but natural that the e'aluation should be made 'is0W0'is the per ormance standards or the +ob. 1ri'ate respondent !ri ona Mamaradlo spea(s o such standard in her a ida'it re erring to the act that petitioner did not per orm $ell in his assigned $or( and his attitude $as belo$ par compared to the company<s standard re)uired o him. +>- 7hether petitioner was illegally dismissed when respondent 3iddleby opted not to renew his contract on the last day of his probationary employment.

.C E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

&t is settled that e'en i probationary employees do not en+oy permanent status% they are accorded the constitutional protection o security o tenure. !his means they may only be terminated or +ust cause or $hen they other$ise ail to )uali y as regular employees in accordance $ith reasonable standards made (no$n to them by the employer at the time o their engagement. But this constitutional protection ends on the e#piration o the probationary period. 6n that date% the parties are ree to either rene$ or terminate their contract o employment. !his de'elopment has rendered moot the )uestion o $hether there $as a +ust cause or the dismissal o the petitioners. Middleby e#ercised its option not to rene$ the contract $hen it in ormed petitioner on the last day o his probationary employment that it did not intend to grant him a regular status. Although $e can regard petitioner<s se'erance rom $or( as dismissal% the same cannot be deemed illegal. As ound by the labor arbiter% the 7L3C and the Court o Appeals% petitioner (1) incurred ten absences (2) $as tardy se'eral times (5) ailed to $ear the proper uni orm many times and (.) sho$ed in erior super'isory s(ills. 1etitioner ailed to satis actorily re ute these substantiated allegations. !a(ing all this in its entirety% respondent Middleby $as clearly +usti ied to end its employment relationship $ith petitioner. ,acts: Middleby 1hilippines Corp. hired petitioner as engineering support ser'ices super'isor on a probationary basis or si# months. 6n 2/ 7o'ember 1::A% a senior o icer o Middleby $ithheld his time card and did not allo$ him to $or(. Alcira iled $ith the 7L3C a complaint or illegal dismissal on the contention that he had become a regular employee $hen he $as illegally dismissed. &n their de ense% respondents claim that% during petitioner<s probationary employment% he sho$ed poor per ormance in his assigned tas(s% incurred ten absences% $as late se'eral times and 'iolated company rules on the $earing o uni orm. 9ince he ailed to meet company standards% petitioner<s application to become a regular employee $as disappro'ed and his employment $as terminated. 0its'&is#i 0!t!rs 8s. )#r$s%er P#i%s La&!r U"i!" .55 9C3A 2/A 9.R. 14<;3< 27'"e 2>3 20044 FA)TS: Mitsubishi Motors 1hilippines Corporation (MM1C) is a domestic corporation engaged in the assembly and distribution o Mitsubishi motor 'ehicles. Chrysler 1hilippines Labor Hnion (C1LH) is a legitimate labor organi"ation and the duly certi ied bargaining agent o the hourly0paid regular ran( and

ile employees o MM1C. 7elson 1aras $as a member o C1LH $hile $i e% Cecille 1aras% $as the 1resident o the Chrysler 1hilippines 9alaried *mployees Hnion (C19H). 7elson 1aras $as irst employed by MM1C as a shuttle bus dri'er. -e resigned and $ent to 9audi Arabia $or(. 4hen he returned to the 1hilippines% he $as re0hired as a $elder0 abricator at the MM1C. 9ometime in May o 1::A% 1aras $as re0hired on a probationary basis as a manu acturing trainee at the 1lant *ngineering Maintenance 2epartment. As part o the MM1C<s policy% 1aras $as e'aluated by his immediate super'isors a ter A months% and recei'ed an a'erage rating. !hey in ormed him that based on his per ormance rating% he $ould be regulari"ed. -o$e'er% the 2epartment and 2i'ision Managers re'ie$ed the per ormance e'aluation made on 1arasand unanimously agreed% along $ith 1aras< immediate super'isors% that the per ormance o 1aras $as unsatis actory. As a conse)uence% 1aras $as not considered or regulari"ation. 6n 7o'ember 2A% 1::A% he recei'ed a 7otice o !ermination dated 7o'ember 2;% 1::A% in orming him that his ser'ices $ere terminated e ecti'e the said date since he ailed to meet the re)uired company standards or regulari"ation. Htili"ing the grie'ance machinery in the collecti'e bargaining agreement% the C1LH demanded the settlement o the dispute $hich arose rom 1aras< termination. !hey argued that 1aras $as dismissed on his 1C5rd day o employment% or 5 days a ter the e#piration o the probationary period o A months. 0t #as contended that 1aras #as already a regular employee on the date of the termination of his pro'ationary employment. According to C1LH and 1aras% the latter<s dismissal $as an o shoot o the heated argument during the CBA negotiations bet$een MM1C Labor 3elations Manager% Atty. Carlos 9. Cao% on the one hand% and Cecille 1aras% the 1resident o the Chrysler 1hilippines 9alaried *mployees Hnion (C19H) and 1aras< $i e% on the other. - "%TITI42%(?$ *1AI3# X 1aras and C1LH asserted that pursuant to Article 15 o the 7e$ Ci'il Code% the period o May 2B% 1::A to 7o'ember 2A% 1::A consisted o one hundred eighty0three (1C5) days. !hey asserted that the ma#imum o the probationary period is si# (A) months% $hich is e)ui'alent to 1C/ daysD as such% 1aras% $ho continued to be employed e'en a ter the 1C/th day% had become a regular employee as pro'ided or in Article 2C2 o the Labor Code. !hey a'erred that as a regular employee% 1aras<

.: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

employment could be terminated only or +ust or authori"ed causes as pro'ided or under the Labor Code% and a ter due notice. !hey posited that in the Letter o !ermination dated 7o'ember 2;% 1::A% the ground or 1aras< termination $as not among those sanctioned by the Labor CodeD hence% his dismissal $as illegal. 1aras and C1LH also stressed that he had already been in the employ o MM1C rom 6ctober 5% 1::. to March 5% 1::; as a $elder0 abricator. 9uch period% in addition to the si#0month probationary period% amounted to ele'en (11) months o ser'ice% $hich is su icient or him to be considered as a regular employee. - (%$"42D%2T?$ *1AI3: X !he MM1C% or its part% a'erred that under Article 15 o the 7e$ Ci'il Code% 1aras< probationary employment $hich commenced on May 2B% 1::A $ould e#pire on 7o'ember 2B% 1::A. 9ince he recei'ed the notice o termination o his employment on 7o'ember 2;% 1::A% the same should be considered to ha'e been ser'ed $ithin the si#0month probationary period. 0 CA agreed $ith the petitionerQs claim and held the dismissal o 1aras illegal. ISSUE 467 1aras $as illegally dismissed% he being dismissed a ter the ma#imum A month probation (MAG 2B% 1::A 0 76F*MB*3 25% 1::A) 1EL,/ G*9. (atio &ndeed% an employer% in the e#ercise o its management prerogati'e% may hire an employee on a probationary basis in order to determine his itness to per orm $or(. Hnder Article 2C1 o the Labor Code% the employer must in orm the employee o the standards or $hich his employment may be considered or regulari"ation. 9uch probationary period% unless co'ered by an apprenticeship agreement% shall not e#ceed si# (A) months rom the date the employee started $or(ing. !he employee<s ser'ices may be terminated or +ust cause or or his ailure to )uali y as a regular employee based on reasonable standards made (no$n to him. 3espondent 1aras $as employed as a management trainee on a probationary basis. 2uring the orientation conducted on May 1;% 1::A% he $as apprised o the standards upon $hich his regulari"ation $ould be based. -e reported or $or( on May 2B% 1::A. As per the company<s policy% the probationary period $as rom 5 months to a ma#imum o A months. As clearly pro'ided or in the last paragraph o Article 15% in computing a period% the irst day shall be e#cluded and the last day included. !hus% the one hundred eighty (1C/) days commenced on May 2B% 1::A% and ended on 7o'ember 25% 1::A. !he termination letter dated

7o'ember 2;% 1::A $as ser'ed on respondent 1aras only at 5:// a.m. o 7o'ember 2A% 1::A. -e $as% by then% already a regular employee o the petitioner under A2C1 LC (easoning : !he basis or $hich respondent 1aras< ser'ices $ere terminated $as his alleged unsatis actory rating arising rom poor per ormance. &t is a settled doctrine that the employer has the burden o pro'ing the la$ ulness o his employee<s dismissal. !he 'alidity o the charge must be clearly established in a manner consistent $ith due process.Hnder Article 2C2 o the Labor Code% an unsatis actory rating can be a +ust cause or dismissal only i it amounts to gross and habitual neglect o duties. A care ul perusal o the records o this case does not sho$ that respondent 1aras $as grossly negligent in the per ormance o his duties. Considering that respondent 1aras $as not dismissed or a +ust or authori"ed cause% his dismissal rom employment $as illegal. ,urthermore% the petitioner<s ailure to in orm him o any charges against him depri'ed him o due process. Clearly% the termination o his employment based on his alleged unsatis actory per ormance rating $as e ected merely to co'er up and ?deodori"e@ the illegality o his dismissal. Disposition 1etition is PARTIALLY 9RANTE,. !he 9eptember 15% 2/// 2ecision o the Court o Appeals in CA>3 91 7o. .A/5/ is hereby AFFIR0E, WIT1 0O,IFI)ATIONS. !he petitioner is OR,ERE, to pay respondent 7elson 1aras separation pay e)ui'alent to one (1) month% or to at least one0hal (1P2) month pay or e'ery year o ser'ice% $hiche'er is higher% a raction o at least si# (A) months to be considered as one yearD and to pay ull bac($ages% computed rom the time o his dismissal up to March 2;% 1::C. !hat portion o the decision o the Court o Appeals directing the reinstatement o the respondent 1aras is ,ELETE,. ,'sit 1!te% NiEE! 8s. Re"at! 0. 9at&!"t!"3 9.R. N!. 1:1:A43 20a$ A3 200: FA)TS/ 6n 7o'ember 21% 1::C% respondent 3enato M. >atbonton $as hired as Chie 9te$ard in petitioner 2usit -otel 7i((o<s ,ood and Be'erage 2epartment. -e signed a three0month probationary employment contract until ,ebruary 21% 1:::% $ith a monthly salary o 12;%///. At the start o his employment% the standards by $hich he $ould be assessed to )uali y or regular employment $ere e#plained to him. !he hotel alleged that at the end o the probation period% &ngo 3auber% 2irector o its ,ood and Be'erage 2epartment% obser'ed that >atbonton

;/ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

ailed to meet the )uali ication standards or Chie 9te$ard% and 3auber recommended a t$o0month e#tension o >atbonton<s probationary period% or until April 22% 1:::. At the end o the .th month% on March 2.% 1:::% 3auber in ormed >atbonton that the latter had poor ratings on sta super'ision% producti'ity% )uantity o $or(% and o'erall e iciency and did not )uali y as Chie 9te$ard. >atbonton re)uested another month or until April 22% 1::: to impro'e his per ormance% to $hich 3auber agreed but allegedly re used to sign the 1er ormance *'aluation ,orm. 7either did he sign the Memorandum on the e#tension. 6n March 51% 1:::% a notice o termination o probationary employment e ecti'e April :% 1:::% on the abo'e alleged grounds $as ser'ed on >atbonton. 6n April 12% 1:::% he iled a complaint or illegal dismissal and non0payment o $ages% $ith prayers or reinstatement% ull bac($ages% and damages% including attorney<s ees. ISSUE/ 4hether or not respondent $as a regular employee at the time o his dismissal. 1EL,/ !he 9C held that as Article 2C1 clearly states% a probationary employee can be legally terminated either: (1) or a +ust causeD or (2) $hen the employee ails to )uali y as a regular employee in accordance $ith the reasonable standards made (no$n to him by the employer at the start o the employment. 7onetheless% the po$er o the employer to terminate an employee on probation is not $ithout limitations. ,irst% this po$er must be e#ercised in accordance $ith the speci ic re)uirements o the contract. 9econd% the dissatis action on the part o the employer must be real and in good aith% not eigned so as to circum'ent the contract or the la$D and third% there must be no unla$ ul discrimination in the dismissal. &n termination cases% the burden o pro'ing +ust or 'alid cause or dismissing an employee rests on the employer. -ere% the petitioner did not present proo that the respondent $as e'aluated rom 7o'ember 21% 1::C to ,ebruary 21% 1:::% nor that his probationary employment $as 'alidly e#tended. !he petitioner alleged that at the end o the respondent<s three0 month probationary employment% 3auber recommended that the period be e#tended or t$o months since respondent >atbonton $as not yet ready or regular employment. !he petitioner presented a 1ersonnel Action ,orm containing the recommendation. 4e obser'ed% ho$e'er% that this document $as prepared on March 51% 1:::% the end o the .th month o the respondent<s employment. &n act% the recommended action $as termination o

probationary employment e ecti'e April :% 1:::% and not e#tension o probation period. Hpon appeal to the 7L3C% the petitioner presented another 1ersonnel Action ,orm prepared on March 2% 1:::% sho$ing that the respondent<s probationary employment $as e#tended or t$o months e ecti'e ,ebruary 25% 1:::. !he 1ersonnel Action ,orm dated March 2% 1:::% contained the ollo$ing remar(s: ?sub+ect to undergo e#tension o probation or t$o (2) months as per attached memo.@ Get% $e ind this document inconclusi'e. ,irst% the action orm did not contain the results o the respondent<s e'aluation. 4ithout the e'aluation% the action orm had no basis. 9econd% the action orm spo(e o an attached memo $hich the petitioner identi ied as 3auber<s Memorandum% recommending the e#tension o the respondent<s probation period or t$o months. Again% the supposed Memorandum $as not presented. !hird% the action orm did not bear the respondent<s signature. &n the absence o any e'aluation or 'alid e#tension% $e cannot conclude that respondent ailed to meet the standards o per ormance set by the hotel or a chie ste$ard. At the e#piration o the three0month period% >atbonton had become a regular employee. &t is an elementary rule in the la$ on labor relations that a probationary employee engaged to $or( beyond the probationary period o si# months% as pro'ided under Article 2C1 o the Labor Code% or or any length o time set orth by the employer (in this case% three months)% shall be considered a regular employee. !his is clear in the last sentence o Article 2C1. Any circum'ention o this pro'ision $ould put to naught the 9tate<s a'o$ed protection or labor. 9ince respondent $as not dismissed or a +ust or authori"ed cause% his dismissal $as illegal% and he is entitled to reinstatement $ithout loss o seniority rights% and other pri'ileges as $ell as to ull bac($ages% inclusi'e o allo$ances% and to other bene its or their monetary e)ui'alent computed rom the time his compensation $as $ithheld rom him up to the time o his actual reinstatement. 1etition is denied. YOLAN,A 0. 0ER)A,O3 et. a%. 3 8s. A0A )O0PUTER 3 9.R. N!. 1<3A;23 2A.ri% 133 20104 Fa6ts/ ,i'e ormer aculty members o AMA Computer College in 1araYa)ue City e#ecuted indi'idual !eacher<s Contracts or each o the trimesters they $ere engaged to teach. ,or the school year 2///02//1% $hen AMACC implemented ne$ aculty screening guidelines% the petitioners

;1 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

ailed to obtain a passing rating based on the per ormance standards. !hus% AMACC did not gi'e them any salary increase. 2ue to this% they iled a complaint or underpayment o $ages. Conse)uently% they $ere dismissed as their contracts ha'e e#pired Z $ere not rene$ed. !he Labor Arbiter ruled that they had been illegally dismissed. !he 7L3C a irmed the LA<s decision. &n addition% ho$e'er% it obser'ed that the applicable la$ is 9ection :2 o the Manual o 3egulations or 1ri'ate 9chools ($hich mandates a pro'ationary period of nine consecutive trimesters of satisfactory service or academic personnel in the tertiary le'el $here collegiate courses are o ered on a trimester basis)% not Article 2C1 o the Labor Code ($hich prescribes a probationary period o si# months) as the LA ruled. 2espite this% the 7L3C still a irmed the LA<s inding o illegal dismissal on the basis o standards that $ere only introduced near the end o their probationary period and not at the time o engagement. !he CA dismissed the action or illegal dismissal ruling that under the Manual or 3egulations or 1ri'ate 9chools% a teaching personnel in a pri'ate educational institution (1) must be a ull time teacherD (2) must ha'e rendered three consecuti'e years o ser'iceD and (5) such ser'ice must be satis actory be ore he or she can ac)uire permanent status. 9ince they had not completed three (5) consecuti'e years o ser'ice (i.e. si# regular semesters or nine consecuti'e trimesters o satis actory ser'ice) and $ere still $ithin their probationary period% then they cannot ac)uire permanent status. !he non0rene$al o contract is a 'alid management prerogati'e. Iss'e/ 4hether or not the dismissal is 'alid. R'%i"-/ AMACC ailed to pro'e by substantial e'idence that there $as +ust cause or the non0 rene$al o the petitioners< contracts. !he Labor Code is supplemented $ith respect to the period o probation by special rules ound in the Manual o 3egulations or 1ri'ate 9chools. 6n the matter o probationary period% 9ection :2 o these regulations pro'ides: 9ection :2. 1robationary 1eriod. 9ub+ect in all instances to compliance $ith the 2epartment and school re)uirements% the probationary period or academic personnel shall not be more than three (5) consecuti'e years o satis actory ser'ice or those in the elementary and secondary le'els% si# (A) consecuti'e regular semesters o satis actory ser'ice or those in the tertiary le'el% and nine 5?6

consecutive trimesters of satisfactory service for those in the tertiary level #here collegiate courses are offered on a trimester 'asis. 6ther than on the period% the ollo$ing )uoted portion o Article 2C1 o the Labor Code still ully applies: !he ser'ices o an employee $ho has been engaged on a probationary basis may be terminated or a +ust cause $hen he ails to )uali y as a regular employee in accordance $ith reasonable standards made (no$n by the employer to the employee at the time o his engagement. An employee $ho is allo$ed to $or( a ter a probationary period shall be considered a regular employee. !he common practice is or the employer and the teacher to enter into a contract% e ecti'e or one school year. At the end o the school year% the employer has the option not to rene$ the contract% particularly considering the teacher<s per ormance. & the contract is not rene$ed% the employment relationship terminates. & the contract is rene$ed% usually or another school year% the probationary employment continues. Again% at the end o that period% the parties may opt to rene$ or not to rene$ the contract. & rene$ed% this second rene$al o the contract or another school year $ould then be the last year since it $ould be the third school year o probationary employment. At the end o this third year% the employer may no$ decide $hether to e#tend a permanent appointment to the employee% primarily on the basis o the employee ha'ing met the reasonable standards o competence and e iciency set by the employer. ,or the entire duration o this three0year period% the teacher remains under probation. Hpon the e#piration o his contract o employment% being simply on probation% he cannot automatically claim security o tenure and compel the employer to rene$ his employment contract. !he school% ho$e'er% cannot orget that its system o i#ed0term contract is a system that operates during the probationary period and or this reason is sub+ect to the terms o Article 2C1 o the Labor Code. >i'en the clear constitutional and statutory intents% $e cannot but conclude that in a situation $here the probationary status o'erlaps $ith a i#ed0term contract not speci ically used or the i#ed term it o ers% Article 2C1 should assume primacy and the i#ed0period character o the contract must gi'e $ay. 4hile $e can grant that the standards $ere duly communicated to the petitioners and could be applied beginning the 1st trimester o the school year 2///0 2//1% glaring and 'ery basic gaps in the school<s e'idence still e#ist. !he e#act terms o the standards $ere ne'er introduced as e'idenceD neither does the

;2 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

e'idence sho$ ho$ these standards $ere applied to the petitioners. -ence% the dismissal $as illegal. ON9 a" 7O1NSON N93 8s. )OURT OF APPEALS a" ROSE0ARIE L. SY3 9.R. N!. 1>2<<13 N!8em&er 1:3 2011 2TA0PSONS ENTERPRISE I"6. 8s. )A4 Fa6ts/ !his case stemmed rom a complaint or illegal dismissal $ith money claims iled by respondent 3osemarie L. 9y 5)y6 be ore the Arbitration Branch% 7ational Capital 3egion% 7L3C% against petitioners !amson<s *nterprises% &nc. 5Tamson*s6% 7elson Lee 5+ee6" the company 1residentD and Lilibeth 6ng 5Ong6 and 8ohnson 7g 5Ng6% her co0employees. 6n 9eptember 1% 2//A% 9y $as hired by !amson<s as Assistant to the 1resident. 2espite the title% she did not act as such because% per instruction o Lee% she $as directed to act as payroll o icer% though she actually $or(ed as a payroll cler(. 6n ,ebruary 2.% 2//B% our days be ore she completed her si#th month o $or(ing in !amson<s% 7g% the 9ales 1ro+ect Manager% called her to a meeting $ith him and Lee. 2uring the meeting% they in ormed 9y that her ser'ices $ould be terminated due to ine iciency. 9he $as as(ed to sign a letter o resignation and )uitclaim. 9he $as told not to report or $or( anymore because her ser'ices $ere no longer needed. 6n her last day o $or(% 6ng humiliated her in ront o her o icemates by shouting at her and pre'enting her rom getting her personal things or any other document rom the o ice. 2uring her pre0employment inter'ie$% Lee had nice comments about her good $or( e#perience and educational bac(ground. 9he $as assured o a long0 term employment $ith bene its. !hroughout her employment% she earnestly per ormed her duties% had a per ect attendance record% $or(ed e'en during bro$nouts and typhoons% and $ould o ten $or( o'ertime +ust to inish her $or(. 9y claimed that the remar(s o her superiors about her alleged ine iciency $ere ill0moti'ated and made $ithout any basis. 9he had been rendering ser'ices or almost si# (A) months be ore she $as arbitrarily and summarily dismissed. -er dismissal $as highly suspicious as it too( place barely our (.) days prior to the completion o her si#0month probationary period. !he petitioners did not sho$ her any e'aluation or appraisal report regarding her alleged ine icient per ormance. As she $as terminated $ithout an e'aluation on her per ormance% she $as depri'ed o the opportunity to be regularly part o the

company and to be entitled to the bene its and pri'ileges o a regular employee. 4orse% she $as depri'ed o her only means o li'elihood. 9he urther claimed $as illegally terminated rom ser'ice and insists that the petitioners cannot in'o(e her ailure to )uali y as she $as not in ormed o the standards or criteria $hich she should ha'e met or regular employment. Moreo'er% no proo $as sho$n as to her alleged poor $or( per ormance. 9he $as unceremoniously terminated to pre'ent her rom becoming a regular employee and be entitled to the bene its as such. ISSUE/ 467 the termination o 9y% a probationary employee% $as 'alid or not. 1EL,/ !he Court inds the petition de'oid o merit. !he pertinent la$ go'erning the present case is Article 2C1 o the Labor Code $hich pro'ides as ollo$s: Art. 2C1. 1ro'ationary employment. R 1robationary employment shall not e#ceed si# months rom the date the employee started $or(ing% unless it is co'ered by an apprenticeship agreement stipulating a longer period. !he ser'ices o an employee $ho has been engaged in a probationary basis may be terminated or a +ust cause or $hen he ails to )uali y as a regular employee in accordance $ith reasonable standards made (no$n by the employer to the employee at the time o his engagement. An employee $ho is allo$ed to $or( a ter a probationary period shall be considered a regular employee. (Hnderscoring supplied) &t is settled that e'en i probationary employees do not en+oy permanent status% they are accorded the constitutional protection o security o tenure. !his means they may only be terminated or a +ust cause or $hen they other$ise ail to )uali y as regular employees in accordance $ith reasonable standards made (no$n to them by the employer at the time o their engagement. Hnder the terms o the Labor Code% these standards should be made (no$n to the JemployeesK on probationary status at the start o their probationary period% or ### during $hich the probationary standards are to be applied. 6 critical importance in in'o(ing a ailure to meet the probationary standards% is that the JemployerK should sho$ as a matter o due process ho$ these standards ha'e been applied. ,or ailure o the petitioners to support their claim o unsatis actory per ormance by 9y% this Court shares

;5 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

the 'ie$ o the CA that 9y<s employment $as un+ustly terminated to pre'ent her rom ac)uiring a regular status in circum'ention o the la$ on security o tenure. As the Court pre'iously stated% this is a common and con'enient practice o unscrupulous employers to circum'ent the la$ on security o tenure. 9ecurity o tenure% $hich is a right o paramount 'alue guaranteed by the Constitution% should not be denied to the $or(ers by such a stratagem. !he Court cannot permit such a subter uge% i it is to be true to the la$ and social +ustice. !he la$ is clear that in all cases o probationary employment% the employer shall ma(e (no$n to the employee the standards under $hich he $ill )uali y as a regular employee at the time o his engagement. 4here no standards are made (no$n to the employee at that time% he shall be deemed a regular employee. !he standards under $hich she $ould )uali y as a regular employee not ha'ing been communicated to her at the start o her probationary period% 9y )uali ied as a regular employee. As held by this Court in the 'ery recent case o -acienda 1rimera &evelopment %orporation v. Eillegas. Being a regular employee $hose termination $as illegal% 9y is entitled to the t$in relie o reinstatement and bac($ages granted by the Labor Code. Article 2B: pro'ides that an employee $ho is un+ustly dismissed rom $or( shall be entitled to reinstatement $ithout loss o seniority rights and other pri'ileges% to her ull bac($ages% inclusi'e o allo$ances% and to her other bene its or their monetary e)ui'alent computed rom the time her compensation $as $ithheld rom her up to the time o actual reinstatement. Li(e$ise% ha'ing been compelled to come to court and to incur e#penses to protect her rights and interests% the a$ard o attorney<s ees is in order. III. SE)URITY OF TENURE i. S6!.e S6!.e !( Se6'rit$ !( te"'re IRR B!!E VI R'%e 1. Se6ti!" 1. )!8era-e- !his rule shall apply to all establishments and underta(ings% $hether operated or pro it or not% including educational% medical% charitable and religious institutions and organi"ations% in cases o regular employment $ith the e#ception o the >o'ernment and its political subdi'isions including go'ernment0 o$ned or controlled corporations. RI91T TO SE)URITY OF TENURE - Se6'rit$ !( te"'re 2Art 2;>4C 6!"6e.tC 6!"stit'ti!"a% B stat't!r$ &asis

ARTI)LE 2;>. Se6'rit$ !( Te"'re. R &n cases o regular employment% the employer shall not terminate the ser'ices o an employee e#cept or i. a +ust cause or ii. $hen authori"ed by this !itle. 7n employee #ho is unjustly dismissed from #or! shall 'e entitled to: a. reinstatement $ithout loss o seniority rights and b. other pri'ileges and c. to his ull bac($ages% inclusi'e o allo$ances% and to his other bene its or their monetary e)ui'alent computed rom the time his compensation $as $ithheld rom him up to the time o his actual reinstatement. )!"6e.t 9ecurity o !enure is the right o the employee to continue $ith his employment unless terminated or a +ust authori"ed cause. )!"stit'ti!"a% Constitution) Basis (Art. 15% 9ec. 5% 1:CB

T#e State shall a ord ull protection to labor% local and o'erseas% organi"ed and unorgani"ed% and promote ull employment and e)uality o employment opportunities or all. &t s#a%% -'ara"tee t#e ri-#ts !( a%% ?!rEers to sel 0organi"ations% and peace ul concerted acti'ities% including the right to stri(e in accordance $ith la$. T#e$ s#a%% &e e"tit%e t! se6'rit$ !( te"'re% humane conditions o $or(% and a li'ing $age. !hey shall also participate in policy and decision0ma(ing processes a ecting their rights and bene its as may be pro'ided by la$. !he 9tate shall promote the principle o shared responsibility bet$een $or(ers and employers and the pre erential use o 'oluntary modes in settling disputes% including conciliation% and shall en orce their mutual compliance there$ith to oster industrial peace. !he 9tate shall regulate the relations bet$een $or(ers and employers% recogni"ing the right o labor to its +ust share in the ruits o production and the right o enterprises to reasonable returns on in'estments% and to e#pansion and gro$th.

Stat't!r$ Basis ( Art 2B: o LC)

;. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

Se6ti!" 2. Se6'rit$ !( te"'rea. &n cases o regular employment% the employer shall not terminate the ser'ices o an employee e#cept or +ust or authori"ed causes as pro'ided by la$% and sub+ect to the re)uirements o due process. b. !he oregoing shall also apply in cases o probationary employmentD pro'ided% ho$e'er% that in such cases% termination o employment due to ailure o the employee to )uali y in accordance $ith the standards o the employer made (no$n to the ormer at the time o engagement may also be a ground or termination o employment. c. &n cases o employment co'ered by contracting or subcontracting arrangements% no employee shall be dismissed prior to the e#piration o the contract bet$een the principal and contractor or subcontractor as de ined in 3ule &&&0A% Boo( &&& o these 3ules% unless the dismissal is or +ust or authori"ed cause% or is brought about by the completion o the phase o the contract or $hich the employee $as engaged% but in any case% sub+ect to the re)uirements o due process or prior notice. d. &n all cases o termination o employment% the ollo$ing standards o due process shall be substantially obser'ed: F!r termi"ati!" !( em.%!$me"t &ase !" I'st 6a'ses as e(i"e i" Art 2<2 !( t#e La&!r )! e/ i. A $ritten notice ser'ed on the employee speci ying the ground or grounds or termination% and gi'ing said employee reasonable opportunity $ithin $hich to e#plain his side. ii. A hearing or con erence during $hich the employee concerned% $ith the assistance o counsel i he so desires is gi'en opportunity to respond to the charge% present his e'idence% or rebut the e'idence presented against him. iii. A $ritten notice o termination ser'ed on the employee% indicating that upon due consideration o all the circumstances% grounds ha'e been established to +usti y his termination. ,or termination o employment as de ined in Art 2C5 o the Labor Code% the re)uirement o due process shall be deemed complied $ith upon ser'ice o $ritten notice to the employee and the appropriate 3egional 6 ice o the 26L* at least 5/ days be ore e ecti'ity o the termination% speci ying the ground or grounds or termination. & the termination $as brought about by the completion o a contract or phase thereo % or by ailure o an employee to meet the standards o the employer in the case o probationary employment% it shall be su icient that a $ritten notice is ser'ed the employee% $ithin a reasonable time rom the e ecti'e date o termination.

)ases/ PL,T 8s. T!%e"ti"!3 9. R. N!. 1431;13 Se.t. 213 20044 FA)TS/ Arturo 3. !olentino !olentino $as employed in petitioner 1L2! or 25 years. -e started in 1:B2 as an installerPhelper and% at the time o his termination in 1::;% $as the di'ision manager o the 1ro+ect 9upport 2i'ision% 1ro'incial *#pansion Center% Meet 2emand >roup. -is di'ision $as in charge o the e'aluation% recommendation and re'ie$ o documents relating to pro'incial lot ac)uisitions. 9ometime in 1::;% 8onathan de 3i'era% a super'isor directly under respondent !olentino% $as ound to ha'e entered into an ?internal arrangement@ $ith the sellers o a parcel o land $hich he recommended or ac)uisition under 1L2!<s e#pansion program. Uuirino 2onato% the attorney0in0 act o the lando$ner% e#ecuted an a ida'it disclosing his ?internal arrangement@ $ith de 3i'era. 2onato<s a ida'it re'ealed that all ollo$0up calls regarding the transaction $ere to be directed to the o ice o respondent and de 3i'era. Hpon being apprised o this ?internal arrangement%@ 1L2! dismissed de 3i'era. A ter he $as dismissed% de 3i'era submitted a s$orn statement to 1L2! implicating respondent as the person behind the anomalous ?internal arrangement.@ 3espondent% in an a ida'it% denied this and pointed out that his authority to appro'e real estate ac)uisitions $as limited to land 'alued belo$ 12//%///. 1etitioner 1L2! sent a notice o dismissal% e ecti'e 6ctober 2B% 1::;% to respondent !olentino. Attached to this notice $as a hand$ritten note rom 7icanor *. 9acdalan% Fice01resident o the 1ro'incial *#pansion Center% Meet 2emand >roup% gi'ing respondent !olentino the option to resign. 1etitioner did not grant respondent<s re)uest or a ormal hearing but delayed the implementation o his dismissal. 6n 2ecember .% 1::;% petitioner in ormed respondent that his dismissal $as already inal and e ecti'e on 2ecember ;% 1::;. 0 3espondent then iled a complaint or illegal dismissal% moral and e#emplary damages and other monetary claims against petitioner 1L2! in 8anuary% 1::A. !he labor arbiter ound that petitioner 1L2! ailed to pro'e and substantiate the charges against respondent 6n appeal% the 7L3C re'ersed the labor arbiter<s decision on the ground that respondent $as a managerial employee and that loss o trust and con idence $as enough reason to dismiss him.

;; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

3espondent<s petition or certiorari $as re erred by this Court to the Court o Appeals $hich rendered the assailed decision reinstating the decision o the labor arbiter% that is% ordering respondent<s reinstatement. ISSUE/ 467 the Court o Appeals erred in ruling that the dismissal $as not ounded on clearly established acts su icient to $arrant separation rom employment 1EL,/ 763 !he petition is $ithout merit. 1L2!<s basis or respondent<s dismissal $as not enough to de eat respondent<s security o tenure. !here is no dispute o'er the act that respondent $as a managerial employee and there ore loss o trust and con idence $as a ground or his 'alid dismissal. !he mere e#istence o a basis or the loss o trust and con idence +usti ies the dismissal o the employee because: J$Khen an employee accepts a promotion to a managerial position or to an o ice re)uiring ull trust and con idence% she gi'es up some o the rigid guaranties a'ailable to ordinary $or(ers. &n ractions $hich i committed by others $ould be o'erloo(ed or condoned or penalties mitigated may be 'isited $ith more se'ere disciplinary action. A company<s resort to acts o sel 0de ense $ould be more easily +usti ied. 1roo beyond reasonable doubt is not re)uired pro'ided there is a 'alid reason or the loss o trust and con idence% such as $hen the employer has a reasonable ground to belie'e that the managerial employee concerned is responsible or the purported misconduct and the nature o his participation renders him un$orthy o the trust and con idence demanded by his position. -o$e'er% the right o the management to dismiss must be balanced against the managerial employee<s right to security o tenure $hich is not one o the guaranties he gi'es up. T#is )!'rt #as 6!"siste"t%$ r'%e t#at ma"a-eria% em.%!$ees e"I!$ se6'rit$ !( te"'re and% although the standards or their dismissal are less stringent% the loss o trust and con idence must be substantial and ounded on clearly established acts su icient to $arrant the managerial employee<s separation rom the company. 9ubstantial e'idence is o critical importance and the burden rests on the employer to pro'e it. 2ue to its sub+ecti'e nature% it can easily be concocted by an abusi'e employer and used as a subter uge or causes $hich are improper% illegal or un+usti ied. 0 &n the case at bar% this Court agrees $ith the Court o Appeals that the petitioner<s dismissal $as not ounded on clearly esta'lished facts sufficient to

#arrant separation from employment . !he actual indings o the court a 8uo on the issue o $hether there $as su icient basis or petitioner 1L2! to dismiss respondent !olentino are binding on this Court. &n the e#ercise o the po$er o re'ie$% the actual determinations o the Court o Appeals are generally conclusi'e and binding on the 9upreme Court. 0 !he e'idence relied upon by petitioner 1L2! R de 3i'era<s s$orn statement and 2onato<s a ida'it R does not% in our 'ie$% establish respondent !olentino<s complicity in the ?internal arrangement@ engineered by his subordinate de 3i'era. 0 !o be sure% respondent !olentino $as remiss in his duties as di'ision manager or ailing to disco'er the ?internal arrangement@ contri'ed by his subordinate. -o$e'er% dismissal $as not the proper sanction or such negligence. &t $as not commensurate to the lapse committed% especially in the light o respondent<s unblemished record o long and dedicated ser'ice to the company. &n -ong!ong )hanghai Aan! %orporation vs. N+,% % $e had occasion to rule that: !he penalty imposed must be commensurate to the depra'ity o the mal easance% 'iolation or crime being punished. A gra'e in+ustice is committed in the name o +ustice $hen the penalty imposed is grossly disproportionate to the $rong committed. J2Kismissal is the most se'ere penalty an employer can impose on an employee. &t goes $ithout saying that care must be ta(en% and due regard gi'en to an employee<s circumstances% in the application o such punishment. Certainly% a great in+ustice $ill result i this Court upholds !olentino<s dismissal. An employee illegally dismissed is entitled to ull bac($ages and reinstatement pursuant to Article 2B: o the Labor Code% as amended by 3A AB1;. Although a managerial employee% respondent should be reinstated to his ormer position or its e)ui'alent $ithout loss o seniority rights inasmuch as the alleged strained relations bet$een the parties $ere not ade)uately pro'en by petitioner 1L2! $hich had the burden o doing so. &n Uui+ano 's. Mercury 2rug Corporation% the Court ruled that strained relations are a actual issue $hich must be raised be ore the labor arbiter or the proper reception o e'idence. &n this case% petitioner 1L2! only raised the issue o strained relations in its appeal rom the labor arbiter<s decision. !hus% no competent e'idence e#ists in the records to support 1L2!<s assertion that a peace ul $or(ing relationship $ith respondent !olentino $as

;A E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

no longer possible. &n act% the records o the case sho$ that 1L2!% through F1 9acdalan% ga'e respondent !olentino the option to resign.J1CK 9uch a de erential act by management ma(es us doubt 1L2!<s claim that its relations $ith respondent $ere ?strained.@ !he option to resign $ould not ha'e been gi'en had animosity e#isted bet$een them. ,urthermore% respondent $as dismissed in 2ecember% 1::; $hen petitioner 1L2! $as still under the Co+uangco group. 1L2! has since then passed to the o$nership and control o its ne$ o$ners% the ,irst 1aci ic group $hich has absolutely nothing to do so $ith this contro'ersy. 9ince there are no strained relations bet$een the ne$ management and respondent% reinstatement is easible. Disposition !he petition $as denied. F'Iits' )!m.'ter Pr! '6ts )!r.!rati!" !( t#e P#i%i..i"es 8s. )A3 9. R. N!. 1A<2323 A.ri% <3 200A FA)TS/ 1etitioner ,u+itsu Computer 1roducts Corporation o the 1hilippines (,C11) is a corporation organi"ed and e#isting under 1hilippine la$s engaged in the manu acture o hard disc dri'es% M3 heads and other computer storage de'ices or e#port. 0 3espondent Fictor de >u"man began $or(ing or ,C11 on 9eptember 21% 1::B as ,acilities 9ection Manager. As o 1:::% he $as also holding in a concurrent capacity the position o Coordinator &96 1./// 9ecretariat. Allan Al'are"% on the other hand% $as employed as a 9enior *ngineer on April 21% 1::C. -e $as assigned at the ,acilities 2epartment under the super'ision o respondent 2e >u"man. 0 !he garbage and scrap materials o ,C11 $ere collected and bought by the 9aro<s !ruc(ing 9er'ices and *nterprises (9aro<s). 6n 8anuary 1;% 1:::% respondent 2e >u"man as ,acilities 9ection Manager% or and in behal o ,C11% signed a >arbage Collection Agreement $ith 9aro<s% and the latter<s signatory therein $as its o$ner and general manager% Larry Manaig. 0 2e >u"man ser'ed as middleman bet$een 9ta. 3osa Bible Baptist Church and 9aro. !he Church $as loo(ing or scrap metal% and $as $illing to buy the purlins at 15. !he scrap metal $as then deli'ered rom ,C11 to 9ta. 3osa Bible Baptist Church. 0 *rnesto *spinosa% -32 and >eneral A airs 2irector o ,C11% recei'ed a disturbing report rom Manaig. Manaig reported that respondent 2e >u"man had caused the ?anomalous disposal o steel JpurlinsK o$ned by ,C11.@ !$o o Manaig<s employees% 3oberto 1umare" and Ma. !heresa 9. ,elipe% e#ecuted $ritten statements detailing ho$ respondent 2e >u"man had ordered the steel purlins to be brought out. !herea ter% petitioner *spinosa sent a t$o0page &nter06 ice Memorandum dated 8uly

2.% 1::: to respondent 2e >u"man% e ecti'ely placing him under pre'enti'e suspension. 0 6n 8uly 2C% 1:::% respondent Al'are" sent an e0 mail message to his co0employees% e#pressing sympathy or the plight o respondent 2e >u"man. 3espondent Al'are" used a di erent computer% but the e'ent 'ie$er system installed in the premises o petitioner ,C11 $as able to trace the e0mail message to him. 3espondent Al'are" submitted a $ritten *#planation dated 9eptember 2:% 1::: $here he apologi"ed% readily admitted that he $as the sender o the e0mail message in )uestion% and claimed that he ?acted alone $ith his o$n con'iction.@ -e alleged% ho$e'er% that he $as only e#pressing his sentiments% and that he $as led by his desire to help a riend in distress. 0 3espondent Al'are" $as in ormed that his ser'ices $ere terminated on the ground o serious misconduct e ecti'e August 15% 1:::. 3espondent 2e >u"man<s employment $as% therea ter% terminated e ecti'e August 25% 1::: through an &nter06 ice Memorandum. 0 !he respondents then iled a complaint or illegal dismissal against the petitioners $ith prayer or reinstatement% ull bac($ages% damages and attorney<s ees be ore the 7L3C. Labor Arbiter Antonio 3. Macam ruled in a'or o ,C11% stating that it $as +usti ied in terminating the employment o the respondents. According to the Labor Arbiter% respondent 2e >u"man% a managerial employee% $as 'alidly dismissed or loss o trust and con idence. Citing a number o cases%J2.K the Labor Arbiter stressed that $here an employee holds position o trust and con idence% the employer is gi'en $ider latitude o discretion in terminating his ser'ices or +ust cause. !he 7L3C sustained the ruling o the Labor Arbiter and dismissed the respondents< appeal or lac( o merit. !he 7L3C also a irmed the Labor Arbiter<s inding that respondent 2e >u"man% a managerial employee $ho $as routinely charged $ith the custody and care o the petitioner<s property% $as 'alidly dismissed on the ground o $ill ul breach o trust and con idence. &n so ar as the dismissal o respondent Al'are" $as concerned% the Commission held that the circumstances surrounding the sending o the clearly ?malicious and premeditated e0mail message@ constituted no less than serious misconduct. -ence% respondent Al'are"<s dismissal $as also +usti ied under the circumstances. !he CA re'ersed the ruling o the 7L3C and held that the respondents $ere illegally dismissed. According to the appellate court% the non0payment o the scrap steel purlins by the 9ta. 3osa Bible Baptist Church (9ta. 3osa) to 9aro<s $as not a 'alid cause or the dismissal o respondent 2e >u"man.

;B E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

Contrary to the indings o the Labor Arbiter% respondent 2e >u"man did not betray the trust reposed on him by his employer% as the transaction in'ol'ing the sale o scrap steel purlins $as bet$een 9ta. 3osa and 9aro<s. Anent the dismissal o respondent Al'are"% the CA ruled that his act o ?sympathi"ing and belie'ing in the innocence o respondent 2e >u"man and e#pressing his 'ie$s@ $as not o such gra'e character as to be considered serious misconduct $hich $arranted the penalty o dismissal. ISSUES/ 1. 467 2e >u"man is guilty o breach o con idence% thus $arranting dismissal 2. 467 Al'are" committed serious misconduct in sending the e0mail 1EL,/ 1. NO3 ,e 9'*ma" is "!t -'i%t$ !( &rea6# !( 6!"(i e"6e. (atio# !o be a 'alid ground or dismissal% loss o trust and con idence must be based on a $ill ul breach o trust and ounded on clearly established acts. A breach is $ill ul i it is done intentionally% (no$ingly and purposely% $ithout +usti iable e#cuse% as distinguished rom an act done carelessly% thoughtlessly% heedlessly or inad'ertently. &t must rest on substantial grounds and not on the employer<s arbitrariness% $hims% caprices or suspicionD other$ise% the employee $ould eternally remain at the mercy o the employer. &n order to constitute a +ust cause or dismissal% the act complained o must be $or(0related and sho$s that the employee concerned is un it to continue $or(ing or the employer. (easoning# !he term Ntr'st a" 6!"(i e"6eO is restricted to managerial employees. &n this case% it is undisputed that respondent 2e >u"man% as the ,acilities 9ection Manager% occupied a position o responsibility% a position imbued $ith trust and con idence. !he Court had the occasion to reiterate in 7o(om '. 7ational Labor 3elations Commission the guidelines or the application o the doctrine o loss o con idence: Loss o con idence should not be simulatedD X &t should not be used as a subter uge or causes $hich are improper% illegal or un+usti iedD X &t may not be arbitrarily asserted in the ace o o'er$helming e'idence to the contraryD and X &t must be genuine% not a mere a terthought to +usti y earlier action ta(en in bad aith. !he scrap metals% including the steel purlins% $ere already classi ied as scrap materials and ready or

disposal. 7o less than the $ritten statements o the $itnesses or the petitioners con irm this. 7o raud or bad aith could be attributed to respondent 2e >u"man% as e'inced by his readiness to disclose his participation in the transaction bet$een 9aro<s and 9ta. 3osa. L!ss !( tr'st a" 6!"(i e"6e as a I'st 6a'se (!r termi"ati!" !( em.%!$me"t is .remise !" t#e (a6t t#at t#e em.%!$ee 6!"6er"e is i"8este ?it# e%i6ate matters3 s'6# as t#e #a" %i"- !r 6are a" .r!te6ti!" !( t#e .r!.ert$ a" assets !( t#e em.%!$er. A ter such scrap materials are $eighed% loaded onto a truc( and carried out o the company premises% the petitioner ,C11 can no longer be considered the o$ner thereo % and ceases to e#ercise control o'er such property. &n this case ho$e'er% 9aro<s% as the ne$ o$ner o the scrap materials in )uestion% including the steel purlins% $as ree to contract $ith anyone as it $ished. 0 A condemnation o dishonesty and disloyalty cannot arise rom suspicions spa$ned by speculati'e in erences. Because o its sub+ecti'e nature% this Court has been 'ery scrutini"ing in cases o dismissal based on loss o trust and con idence because the same can easily be concocted by an abusi'e employer. !hus% $hen the breach o trust or loss o con idence theori"ed upon is not borne by clearly established acts% as in this case% such dismissal on the ground o loss o con idence cannot be allo$ed. 2. NO3 A%8are* i "!t 6!mmit seri!'s mis6!" '6t i" se" i"- t#e e-mai%. (atio Misconduct has been de ined as improper or $rong conduct. &t is the transgression o some established and de inite rule o action% a orbidden act% a dereliction o duty% $ill ul in character% and implies $rong ul intent and not mere error o +udgment. !he misconduct to be serious must be o such gra'e and aggra'ated character and not merely tri'ial and unimportant. (easoning# F!r mis6!" '6t !r im.r!.er &e#a8i!r t! &e a I'st 6a'se (!r ismissa%3 2a4 it m'st &e seri!'sC 2&4 m'st re%ate t! t#e .er(!rma"6e !( t#e em.%!$eeQs 'tiesC a" 264 m'st s#!? t#at t#e em.%!$ee #as &e6!me '"(it t! 6!"ti"'e ?!rEi"(!r t#e em.%!$er. !he Court inds that respondent Al'are"<s act o sending an e0mail message as an e#pression o sympathy or the plight o a superior can hardly be characteri"ed as serious misconduct as to merit the penalty o dismissal.

;C E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

!here is no sho$ing that the sending o such e0mail message had any bearing or relation on respondent Al'are"<s competence and pro iciency in his +ob. !o reiterate% in order to consider it a serious misconduct that $ould +usti y dismissal under the la$% the act must ha'e been done in relation to the per ormance o his duties as $ould sho$ him to be un it to continue $or(ing or his employer. Disposition 1etition is denied. 2ecision o the CA is a irmed% $ith costs against the petitioners. )!" ! S'ite )%'& Tra8e% I"6. 8s. NLR) 27a" 2<3 20024 %mployerQs offer to reinstate does not forestall payment of full backwages. &n )!" ! S'ite )%'& Tra8e%3 I"6. 8s. NLR) " J>. 3. 7o. 12;AB1% 8anuary 2C% 2///K " bac($ages $ere limited by the 7L3C rom the date o the employee<s dismissal up to the time $hen the employer allegedly o ered to reinstate him. &t e#plained that the ailure o the employee to $or(% a ter the supposed o er $as made% can no longer be attributed to the ault o the employer. &n re'ersing the 7L3C% the 9upreme Court ruled that this does not su ice to pro'ide complete relie to the pain ul socio0economic dislocation o the employee and his amily. As pre'iously stated% an employee $ho is un+ustly dismissed is entitled to his ull bac($ages computed rom the time his compensation $as $ithheld rom him up to the time o his reinstatement. Mere o er to reinstate a dismissed employee% gi'en the circumstances in this case% is not enough. & the petitioner (employer) $ere sincere in its intention to reinstate the pri'ate respondent (dismissed employee)% petitioner should ha'e at the 'ery least reinstated him in its payroll right a$ay. !he petitioner should thus be held liable or the entire amount o bac($ages due the pri'ate respondent rom the day he $as illegally dismissed up to the date o his reinstatement. 6nly then could obser'ance o labor la$s be promoted and social +ustice upheld. 2. )!"str'6ti8e ,ismissa% 8s. I%%e-a% ,ismissa% )!"str'6ti8e ,ismissa% concept Constructi'e dismissal is an employer<s act amounting to dismissal but made to appear as i it $ere not a dismissal in disguise. &n most cases o constructi'e dismissal% the employee is allo$ed to continue to $or(% but is simply reassigned% or demoted% or his pay diminished $ithout a 'alid reason to do so.

Constructi'e dismissal does not al$ays in'ol'e orthright dismissal or diminution in ran(% compensation% bene it and pri'ileges. !here may be constructi'e dismissal i an act o clear discrimination% insensibility or disdain by an employer becomes so unbearable on the part or the employee that it could oreclose any choice by him e#cept to orego his continued employment. (9ee -yatt !a#i 9er'ices case% >.3. 7o. 1.52/.% 8une 2A% 2//1.) a 6!"str'6ti8e is6#ar-e is ? a 8uitting because continued employment is rendered impossible% unreasonable or unli(ely% as% an o er in'ol'ing a demotion in ran( and a diminution in pay.(1hilippine 8apan Acti'e Carbon Corporation and !u(uichi 9ato u(a 's 7L3C) )!"str'6ti8e ,ismissa% a" I"8!%'"tar$ Resi-"ati!" *onstructive dismissal is an involuntary resignation resulting in cessation of work resorted to when continued employment becomes impossible, unreasonable or unlikely@ $hen there is a demotion in ran( or a diminution in payD or $hen a clear discrimination% insensibility or disdain by an employer becomes unbearable to an employee. &n >lobe !elecom% &nc. '. ,lorendo0,lores% it $as held that $here an employee ceases to $or( due to a demotion o ran( or a diminution o pay% an unreasonable situation arises $hich creates an ad'erse $or(ing en'ironment rendering it impossible or such employee to continue $or(ing or her employer. -ence% her se'erance rom the company $as not o her o$n ma(ing and there ore amounted to an illegal termination o employment. ( %ited in ,rancisco 's. 7L3C% >.3. 7o. 1B//CB% August 21% 2//A.) )ases 1. 2iminution o pay. A diminution o pay is pre+udicial to the employee and amounts to constructi'e dismissal. (,rancisco 's. 7L3C) 2. !rans er o employee not amounting to constructi'e dismissal. !rans er o an employee rom one area o operation to another is a management prerogati'e and is not constituti'e o constructi'e dismissal% $hen the trans er is based on sound business +udgment% unattended by a demotion in ran( or a diminution o pay or bad aith. (!an 's. 7L3C% >.3. 7o. 12C2:/% 7o'ember 2.% 1::C.) 5. !rans er o employee amounting to constructi'e dismissal. A trans er amounts to constructi'e dismissal $hen the trans er is unreasonable% unli(ely%

;: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

incon'enient% impossible% or pre+udicial to the employee. (1hil. &ndustrial 9ecurity Agency Corp. 's. Aguinaldo% >.3. 7o. 1.::B.% 8une 1;% 2//;.) )ases/ Fer"a" ! 9!. Vs. )A 9R N!. 1A<>223 0a$ 2<3 2004 FA)TS: ,ernando >o $as hired by Molde# 1roducts &nc. in 1:CA as a salesman% then% o'er the years% $as promoted to a 9enior 9ales Manager. As such o icer% he $as responsible or o'erseeing and managing the sales orce o the company such as dealing $ith clients% getting orders% entering into an agreement $ith clients (sub+ect to appro'al o higher management). 0 9ometime in 1::C% the *F1 o Molde# called the attention o >o regarding the disco'ery o alleged anomalies purportedly committed by the sales people under >o<s control. 9uch anomalies stemmed rom the disbursement o unds by Molde# to go'<t o icials to secure big supplpy contracts rom the go'<t. 0 Because o the issue% a number o employees $ere dismissed% including those under >o<s super'ision. >o himsel $as terminated% allegedly ?on account o command responsibility@. Molde# claimed that >o% ?ob'iously eeling guilty or not e#ercising e ecti'e super'ision o'er his subordinates% submitted a letter o resignation dated 6ctober 12% 1::C but e ecti'e on 7o'ember 1A% 1::C.@ Molde# added that >o $ent on lea'e rom 6ct 12% 1::C to 7o' 1A% 1::C. 4hile on lea'e% he $or(ed or the release o his clearance and the payment o 15th month pay and lea'e pay bene its. 6n the other hand% >o contends that he $as not in'estigated. !he in'estigation only in'ol'ed other sales people. -e iled a complaint or constructi'e dismissal. LA ruled or >o (there $as illegal dismissal)% 7L3C a irmed% but CA set aside the decisions% relying on e'idence that >o $as acti'ely per orming his normal duties and unctions during the months immediately prior to his resignation% contrary to the inding o constructi'e dismissal. ISSUE: 467 there $as constructi'e dismissal 1EL,: 76. (atio# Constructi'e dismissal e#ists $here there is a cessation o $or( because continued employment is rendered impossible% unreasonable or unli(ely. &t is present $hen an employee<s unctions% $hich $ere originally super'isory in nature% $ere reduced% and such reduction is not grounded on 'alid grounds such as genuine business necessity. (easoning 0 Apparently% >o still ully e#ercised the prerogati'es and the responsibilities o his o ice as the 9enior 9ales Manager during the time that the said unctions

$ere supposedly remo'ed rom him. !here ore% there can be no constructi'e dismissal to spea( o . 0 >o claims that his separation rom employment $ith Molde# $as a case o constructi'e dismissal% an allegation $hich the company re utes $ith its o$n set o e'idence pointing to the >o<s 'oluntary resignation. 0 &t should be remembered that >o has submitted a letter o resignation. &t is thus incumbent upon him to substantiate his claim that his resignation $as not 'oluntary but in truth $as actually a constructi'e dismissal. !his the petitioner ailed to do. -is bare allegations% $hen uncorroborated by e'idence% cannot be gi'en credence. 0 on the other hand% Molde# presented con idential sales e'aluation orms that pro'e that >o $as still per orming his duties and responsibilities one month prior to his resignation. 0 4hile on lea'e% he $or(ed or the release o his clearance and the payment o his 15th month pay and lea'e pay bene its. &n doing so% he in act per ormed all that an employee normally does a ter he resigns. 3esignation is the ormal pronouncement or relin)uishment o an o ice. !he 'oluntary nature o >o<s acts has mani ested itsel clearly belie his claim o constructi'e dismissal. !he totality o the e'idence indubitably sho$s that >o resigned rom employment $ithout any coercion or compulsion rom respondent. -is resignation $as 'oluntary. Disposition: 1etition denied% and decision o CA A,,&3M*2. U"i6!r" Sa(et$ 9%ass I"6.3 8s. R! ri-! Basarte 9R N!. 1A4:<>3 N!8. 2A3 2004 )!"str'6ti8e ,ismissa% !r a 6!"str'6ti8e is6#ar-e has been de ined as )uitting because continued employment is rendered impossible% unreasonable or unli(ely% as an o er in'ol'ing a demotion in ran( and a diminution in pay. Constructi'e dismissal% ho$e'er% does not al$ays ta(e the orm o a diminution. &n se'eral cases% $e ha'e ruled that an act o clear discrimination% insensibility% or disdain by an employer may become so unbearable on the part o the employee so as to oreclose an choice on his part e#cept to resign rom such employment. !his constitutes constructi'e dismissal. Immediate filing of complaint negates abandonment. &n a 2//. case% it $as ruled that the immediate iling o complaint or illegal dismissal by the employees praying or their reinstatement% negates the inding o abandonment. !hey cannot% by any reasoning% be said to ha'e abandoned their $or(% or as the

A/ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

9upreme Court had consistently ruled% the iling by an employee o a complaint or illegal dismissal is proo enough o his desire to return to $or(% thus negating the employer<s charge o abandonment. 59nicorn )afety /lass" 0nc. vs. Aasarte" /. ,. No. =BF;G?" Nov. :B" :<<F6. 9LORIA ARTIA9A3 8s. SILI0AN UNIVERSITY3 9.R. N!. 1;<4A33 A.ri% 1:3 200> 1etitioner 'oluntarily resigned. -er employer cannot be held liable or constructi'e dismissal. /loria 7rtiaga vs. )iliman 9niversity and )iliman 9niversity Medical %enter" >.3. 7o. 1BC.;5% April 1A% 2//:. 0ER)+ S1ARP AN, ,O10E 2P1ILIPPINES4 a" PETER S. )ARBONELL3 8s. 7ONAR P. ROBLES3 et. A%. 9.R. N!. 1;:A0:3 N!8. 2A3 200> Fa6ts/ 3espondents are ormer health care representati'es assigned at the 2istrict F0M92 Cardio'ascular Hnit% 3egion & o Merc( 9harp. !hey $ere placed under pre'enti'e suspension on the ground o loss o trust and con idence by allegedly submitting alse% misleading% or inaccurate data about the $or( o other employees. 9ubse)uently% 3obles and >onito $ere in ormed that their ser'ices had been terminated. Cristobal% on the other hand% $as in ormed that his suspension $as li ted. -o$e'er% he $as reassigned to 2istrict & o Baguio City and La Hnion as his ne$ area o responsibility. Christian re)uested or a trans er. -is re)uest $as not a'orably acted upon% instead% he recei'ed his second *mployees< 7otice to *#plain dated 8anuary 1:% 2//.% or dishonesty and o enses against company interest. !herea ter% Christian got sic( due to the stress brought about by his recei'ing se'eral *7!*s. As such% he $as compelled to apply or a sic( lea'e. Christian stated that his sic( lea'e application $as not acted upon and instead he recei'ed his third *7!* dated ,ebruary .% 2//.% or insubordination% serious misconduct or $ill ul disobedience. Christian% therea ter% resigned citing oppression and utter unbearability o the $or( atmosphere. Christian then amended his complaint or constructi'e dismissal. Iss'e/ 4as there constructi'e dismissal= R'%i"-/ Ges. M92 is adamant that the CA erred in not characteri"ing the $or( reassignment o respondent Cristobal as alling $ithin the ambit o management prerogati'e and% thus% beyond challenge. &n addition% M92 postulates that the $or( reassignment o medical representati'es% such as respondent Cristobal% is not only dictated by the

nature o the $or(% but is% more importantly% $ritten in the employment contract. 6nce more% the Court agreed $ith M92<s statement o the general rule that the $or( reassignment o an employee is a management prerogati'e. &ndeed% e'en the Constitution recogni"es ?the right o enterprises to reasonable returns on in'estments% and to e#pansion and gro$th.@ Get% the in'ocation o management prerogati'e carries the corresponding burden o pro'ing such contention. !ime and again the Court has ruled that in constructi'e dismissal cases% the employer has the burden o pro'ing that the trans er o an employee is or +ust and 'alid grounds% such as genuine business necessity. !he employer must demonstrate that the trans er is not unreasonable% incon'enient% or pre+udicial to the employee and that the trans er does not in'ol'e a demotion in ran( or a diminution o salary and other bene its. & the employer ails to o'ercome this burden o proo % the employee<s trans er is tantamount to unla$ ul constructi'e dismissal. 0ANOLO A. PESAFLOR3 8s. OUT,OOR )LOT1IN9 0ANUFA)TURIN9)ORPORATION3 et. A%.3 9.R. N!. 1;;1143 A.ri% 133 2010 Fa6ts/ 1eYa lor $as hired as probationary -32 Manager o 6utdoor Clothing on 9eptember 2% 1:::. 6n March 15% 2///% more than si# months rom the time he $as hired% 6utdoor Clothing<s 1resident% 7athaniel 9y u% appointed *d$in Buenaobra as the concurrent -32 and Accounting Manager. A ter enduring $hat he claimed as discriminatory treatment at $or(% 1eYa lor considered the appointment o Buenaobra to his position as the last stra$% and thus iled his irre'ocable resignation rom 6utdoor Clothing e ecti'e at the close o o ice hours on March 1;% 2///. -e therea ter iled an illegal dismissal complaint $ith the labor arbiter claiming that he had been constructi'ely dismissed. !he labor arbiter agreed $ith 1eYa lor and issued a decision in his a'or. 6n appeal% the 7L3C re'ersed the earlier decision. !he CA li(e$ise a irmed the decision o the 7L3C. -ence this petition. Iss'e/ Can 1eYa lor<s resignation be considered as constructi'e dismissal e)ui'alent to an illegal dismissal= R'%i"-/ Ges. 4hile the letter states that 1eYa lor<s resignation $as irre'ocable% it does not necessarily signi y that it $as also 'oluntarily e#ecuted. 1recisely because o the attendant hostile and discriminatory $or(ing en'ironment% 1eYa lor decided to

A1 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

permanently se'er his ties $ith 6utdoor Clothing. !his alls s)uarely $ithin the concept o constructi'e dismissal that +urisprudence de ines% among others% as in'oluntarily resignation due to the harsh% hostile% and un a'orable conditions set by the employer. &t arises $hen a clear discrimination% insensibility% or disdain by an employer e#ists and has become unbearable to the employee. !he gauge or constructi'e dismissal is $hether a reasonable person in the employee<s position $ould eel compelled to gi'e up his employment under the pre'ailing circumstances. 4ith the appointment o Buenaobra to the position he then still occupied% 1eYa lor elt that he $as being eased out and this perception made him decide to lea'e the company. !he act o iling a resignation letter alone does not shi t the burden o pro'ing that the employee<s dismissal $as or a +ust and 'alid cause rom the employer to the employee. &n Mora '. A'esco% $e ruled that should the employer interpose the de ense o resignation% it is still incumbent upon the employer to pro'e that the employee 'oluntarily resigned. !o our mind% 6utdoor Clothing did not discharge this burden by belatedly presenting the three memoranda it relied on. & these memoranda $ere authentic% they $ould ha'e sho$n that 1eYa lor<s resignation preceded the appointment o Buenaobra. !hus% they $ould be e'idence supporting the claim o 'oluntariness o 1eYa lor<s resignation and should ha'e been presented early on in the case. 6utdoor Clothing ho$e'er raised them only be ore the 7L3C $hen they had lost the case be ore the labor arbiter. 4hate'er doubts that remain in our minds on the credibility o the parties< e'idence should% by the la$<s dictate% be settled in a'or o the $or(ing man. 6ur ruling that 1eYa lor $as constructi'ely dismissed rom his employment $ith 6utdoor Clothing there ore stands. )O)A-)OLA BOTTLERS P1ILIPPINES3 IN).3 8s. AN9EL U. ,EL VILLAR3 9.R. N!. 1:30>13 O6t!&er :3 2010 Fa6ts/ Coca0Cola hired respondent Angel H. del Fillar (2el Fillar) on May 1% 1::/ as 1hysical 2istribution ,leet Manager $ith a +ob grade o 90B and monthly salary o 1;/%///.//% aside rom the use o a company car% gasoline allo$ance% and annual oreign tra'el% among other bene its. &n 1::2% as part o the reorgani"ation o the Company% 2el Fillar became the !ransportation 9er'ices Manager% under the Business Logistic 2irectorate% headed by 2irector *dgardo &. 9an 8uan (9an 8uan). As !ransportation 9er'ices Manager% 2el Fillar prepares the budget or the 'ehicles o the Company

nation$ide. 2el Fillar submitted a 3eport to the Company 1resident% detailing an alleged raudulent scheme underta(en by certain Company o icials in conspiracy $ith local truc( manu acturers% o'erpricing the truc(s purchased by the Company by as much as 1B/%///.// each. 2el Fillar implicated 9an 8uan and 8ose L. 1ineda% 8r.% among other Company o icials% as part o the conspiracy. 1ineda then ser'ed as the *#ecuti'e Assistant in the Business Logistic 2irectorate in charge o the 3e rigeration 9er'ices o the Company. 9e'en months a ter the submission o his 3eport on the raudulent scheme o se'eral company o icials% 2el Fillar recei'ed a Memorandum rom 9an 8uan% in orming him that (1) he $as designated as 9ta Assistant to the Corporate 1urchasing and Materials Control Manager% $ith a +ob grade o 790F&&D (2) $ith 2el Fillars ne$ assignment% he ceased to be entitled to the bene its accruing to an 90B position under e#isting company rules and policiesD and (5) 2el Fillar $as to turn o'er the 'ehicle assigned to him as !ransportation 9er'ices Manager to 1ineda by 8uly 1/% 1::A. Although as the 9ta Assistant o the Corporate 1urchasing and Materials Control Manager% 2el Fillar continued to recei'e the same salary as !ransportation 9er'ices Manager% but his car and other pri'ileges $ere $ithdra$n and he spent his time at his ne$ post sitting Iat a des( $ith no meaning ul $or( $hatsoe'er.I 2el Fillar belie'ed that he $as demoted by the Company to orce him to resign. Hnable to endure any urther the harassment% 2el Fillar iled $ith the Arbitration Branch o the 7L3C on 7o'ember 11% 1::A a complaint against the Company or illegal demotion and or eiture o company pri'ileges. According to Coca0Cola J2el FillarK $as not outrightly dismissedD instead% he $as remo'ed rom his ormer position as !ransportation 9er'ices Manager% and demoted to 9ta Assistant to the Corporate 1urchasing and Materials Control Manager. !he Company embar(ed on a reorgani"ation o the Business Logistic 2irectorate. As a result% the unctions related to 3e rigeration $ere assigned to the !ransportation 9er'ices Manager% $hich $as renamed the !ransportation and 3e rigeration 9er'ices Manager. !he Company ailed to appear% despite due notice% at the scheduled preliminary con erence be ore the 7L3C Arbitration Branch. !he Company reasoned that in appointing 2el Fillar as the 9ta Assistant o the Corporate 1urchasing and Materials Control Manager% rom his ormer position as !ransportation

A2 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

9er'ices Manager% the Company $as merely e#ercising its inherent management prerogati'e to trans er an employee rom one position to another. !hey contended that 2el Fillar had no 'ested right to the pri'ileges he pre'iously en+oyed as !ransportation 9er'ices Manager. 9ince the 'arious programs $ill a ect some o its employees% in good aith the Company has initiated a special program called I1ro+ect 7e$ 9tartI. !his program is intended to assist employees $hose positions $ill be declared redundant $ith the implementation o ne$ distribution systems% utili"ation o impro'ed operational processes and unctional re0organi"ations. Labor Arbiter rendered a 2ecision in 2el Fillars a'or. !he Labor Arbiter held that the allegations in 2el Fillars complaint su iciently presented a cause o action against the Company. 2el Fillar appears to ha'e been singled out or discriminated upon due to his ha'ing reported the 1::A truc( scam% and his present isolation can be seen as a punishment or acting in a righteous and orthright manner. 6ther$ise% as a I9ta AssistantI J2el FillarK should ha'e been gi'en some meaning ul or responsible $or( appurtenant to the +ob designation. 7L3C re'ersed the Labor Arbiter% reasoning that: Contrary to the Labor Arbiters pronouncement that Jthe CompanyK should ha'e rebutted allegations o bad aith and malice% $e are more inclined to apply the presumption o good aith. Mere conclusions o act and la$ should not be used as bases or an automatic inding o bad aith. As it is% $e do not e'en see any disclosure o the scam and his alleged demotion. & indeed the so0called Igreat grandmother o Coca cola scams o 1::AI $ere true% the logical conse)uence o such disclosure is or the president o the company to dismiss the erring employees and o icers or their highly irregular acts and not to penali"e J2el FillarK or ma(ing such disclosure. !his is amply supported by the act that the Jthe CompanyK conducted a thorough in'estigation o the reported scam and e'en obtained the ser'ices o an independent auditor to determine $hether the alleged anomalous transactions $ere actually irregular andPor )uestionable. !his mani ests that J2el FillarsK disclosure $as ta(en seriously contrary to his claims o discrimination. Accordingly% it cannot be said that the act o the JCompanyK $as retaliatory or penal in nature nor tainted $ith bad aith andPor malice. 6ther$ise% Jthe CompanyK $ould not ha'e gi'en gra'e attention to the disclosure o J2el FillarK.

A company cannot% ho$e'er% be reasonably e#pected to pro'ide the same bene its to an employee $hose position or e#ample% re)uires that he stays in the o ice during $or(ing hours. Bene its% pri'ileges and per)uisites that attach to a certain position do not pro'ide su icient bases or determining the superiority or in eriority o the position so held. Iss'e/ 4hether or not Company% in trans erring 2el Fillar rom the position o !ransportation 9er'ices Manager to 9ta Assistant to the Corporate 1urchasing and Materials Control Manager% 'alidly e#ercised its management prerogati'e or committed constructi'e dismissal% or demotion= 4hether or not there has been redundancy in the position held by 2el Fillar that +usti ied the company rom the act o ta(ing the position rom him= R'%i"-/ &n the pursuit o its legitimate business interest% management has the prerogati'e to trans er or assign employees rom one o ice or area o operation to another pro'ided there is no demotion in ran( or diminution o salary% bene its% and other pri'ilegesD and the action is not moti'ated by discrimination% made in bad aith% or e ected as a orm o punishment or demotion $ithout su icient cause. !he right o employees to security o tenure does not gi'e them 'ested rights to their positions to the e#tent o depri'ing management o its prerogati'e to change their assignments or to trans er them. 0a"a-eria% .rer!-ati8es3 #!?e8er3 are s'&Ie6t t! %imitati!"s .r!8i e &$ %a?3 6!%%e6ti8e &ar-ai"i"a-reeme"ts3 a" -e"era% .ri"6i.%es !( (air .%a$ a" I'sti6e. But% li(e other rights% there are limits thereto. !he managerial prerogati'e to trans er personnel must be e#ercised $ithout gra'e abuse o discretion% bearing in mind the basic elements o +ustice and air play. -a'ing the right should not be con used $ith the manner in $hich that right is e#ercised. !hus% it cannot be used as a subter uge by the employer to rid himsel o an undesirable $or(er. &n particular% the employer must be able to sho$ that the trans er is not unreasonable% incon'enient or pre+udicial to the employeeD nor does it in'ol'e a demotion in ran( or a diminution o his salaries% pri'ileges and other bene its. 9hould the employer ail to o'ercome this burden o proo % the employees trans er shall be tantamount to constructi'e dismissal% $hich has been de ined as a )uitting because continued employment is rendered impossible% unreasonable or unli(elyD as an o er in'ol'ing a demotion in ran( and diminution in pay.

A5 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

Li(e$ise% constructive dismissal e!ists 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. A ter a care ul scrutiny o the records% $e agree $ith the Labor Arbiter and the Court o Appeals that the Company ailed to discharge this burden o proo . !he Company and its o icials attempt to +usti y the trans er o 2el Fillar by alleging his unsatis actory per ormance as !ransportation 9er'ices Manager. !he Company disclosed that: J2el FillarK displayed an utterly $oe ul per ormance. -e $as unable to submit basic data as to type and brand o 'ehicles $ith highestPlo$est maintenance cost as re)uested. J2el FillarK could not e'en update the records o his o ice. -e could not $or( $ith minimum or no super'ision. -is acti'ities needed to be closely and constantly monitored by his superiors. J2el FillarK lac(ed initiati'e and had to be constantly reminded o $hat to do. -e merited a mediocre grade o 2 in a scale o one (1) to i'e (;)% the latter number being the highest grade 4e are uncon'inced. !he dismal per ormance e'aluations o 2el Fillar $ere prepared by 9an 8uan and 1ineda a ter 2el Fillar already implicated his t$o superiors in his 3eport dated 8anuary .% 1::A in an alleged raudulent scheme against the Company. More importantly% $e gi'e $eight to the ollo$ing instances establishing that 2el Fillar $as not merely trans erred rom the position o !ransportation 9er'ices Manager to the position o 9ta Assistant to the Corporate 1urchasing and Materials Control ManagerD he $as e'idently demoted. A trans er is a mo'ement rom one position to another $hich is o e)ui'alent ran(% le'el or salary% $ithout brea( in ser'ice. 1romotion% on the other hand% is the ad'ancement rom one position to another $ith an increase in duties and responsibilities as authori"ed by la$% and usually accompanied by an increase in salary. Con'ersely% demotion in'ol'es a situation $here an employee is relegated to a subordinate or less important position constituting a reduction to a lo$er grade or ran(% $ith a corresponding decrease in duties and responsibilities% and usually accompanied by a decrease in salary. 2el Fillars demotion is readily apparent in his ne$ designation. ,ormerly% he $as the !ransportation 9er'ices ManagerD then he $as made a 9ta Assistant a subordinate to another manager%

particularly% the Corporate 1urchasing and Materials Control Manager. 9econd% the t$o posts are not o the same $eight in terms o duties and responsibilities. 2el Fillars position as !ransportation 9er'ices Manager in'ol'ed a high degree o responsibility% he being in charge o preparing the budget or all o the 'ehicles o the Company nation$ide. As 9ta Assistant o the Corporate 1urchasing and Materials Control Manager% 2el Fillar contended that he $as not assigned any meaning ul $or( at all. !hird% $hile 2el Fillars trans er did not result in the reduction o his salary% there $as a diminution in his bene its. !he Company admits that as 9ta Assistant o the Corporate 1urchasing and Materials Control Manager% 2el Fillar could no longer en+oy the use o a company car% gasoline allo$ance% and annual oreign tra'el% $hich 2el Fillar pre'iously en+oyed as !ransportation 9er'ices Manager. ,ourth% it $as not bad enough that 2el Fillar $as demoted% but he $as e'en placed by the Company under the control and super'ision o 1ineda as the latters 9ta Assistant. !o recall% 1ineda $as one o the Company o icials $ho 2el Fillar accused o de rauding the Company in his 3eport dated 8anuary .% 1::A. &t is not too di icult to imagine that the $or(ing relations bet$een 2el Fillar% the accuser% and 1ineda% the accused% had been strained and hostile. !he situation $ould be more oppressi'e or 2el Fillar because o his subordinate position vis A vis 1ineda. ,i th% all the oregoing caused 2el Fillar incon'enience and pre+udice% so unbearable or him that he $as constrained to see( remedy rom the 7L3C. !he Labor Arbiter $as correct in his obser'ation that had 2el Fillar resigned immediately a ter his Itrans er%I he could be said to ha'e been constructi'ely dismissed. !here is constructi'e dismissal $hen there is a demotion in ran( andPor diminution in payD or $hen a clear discrimination% insensibility or disdain by an employer becomes unbearable to the employee. *'entually% ho$e'er% the Company actually terminated 2el Fillars ser'ices e ecti'e May 51% 1::C% as his position $as no longer necessary or $as considered redundant due to the reorgani"ation o the Business Logistic 2irectorate. 3edundancy is one o the authori"ed causes or the dismissal o an employee. &t is go'erned by Article 2C5 o the Labor Code% $hich reads: A3!. 2C5. )%!s're !( esta&%is#me"t a" re '6ti!" !( .ers!""e%. !he employer may also terminate the

A. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

employment o any employee due to the installation o labor0sa'ing de'ices% redundancy% retrenchment to pre'ent losses or the closing or cessation o operation o the establishment or underta(ing unless the closing is or the purpose o circum'enting the pro'isions o this !itle% by ser'ing a $ritten notice on the $or(ers and the 2epartment o Labor and *mployment at least one (1) month be ore the intended date thereo . &n case o termination due to the installation o labor0sa'ing de'ices or redundancy% the $or(er a ected thereby shall be entitled to a separation pay e)ui'alent to at least his one (1) month pay or to at least one (1) month pay or e'ery year o ser'ice% $hiche'er is higher. &n case o retrenchment to pre'ent losses and in cases o closures or cessation o operations o establishment or underta(ing not due to serious business losses or inancial re'erses% the separation pay shall be e)ui'alent to one (1) month pay or to at least one0hal (1P2) month pay or e'ery year o ser'ice% $hiche'er is higher. A raction o at least si# (A) months shall be considered one (1) $hole year. 3edundancy% or purposes o the Labor Code% e#ists $here the ser'ices o an employee are in e#cess o $hat is reasonably demanded by the actual re)uirements o the enterprise. 9uccinctly put% a position is redundant $here it is super luous% and super luity o a position or positions may be the outcome o a number o actors% such as o'erhiring o $or(ers% decreased 'olume o business% or dropping o a particular product line or ser'ice acti'ity pre'iously manu actured or underta(en by the enterprise. !he determination that the employeeQs ser'ices are no longer necessary or sustainable and% there ore% properly terminable or being redundant is an e#ercise o business +udgment o the employer. !he $isdom or soundness o this +udgment is not sub+ect to discretionary re'ie$ o the Labor Arbiter and the 7L3C% pro'ided there is no 'iolation o la$ and no sho$ing that it $as prompted by an arbitrary or malicious act. &n other $ords% it is not enough or a company to merely declare that it has become o'ermanned. &t must produce ade)uate proo o such redundancy to +usti y the dismissal o the a ected employees. Coca Cola presented no other e'idence% 7either did the Company present proo that it had complied $ith the procedural re)uirement in Article 2C5 o prior notice to the 2epartment o Labor and *mployment (26L*) o the termination o 2el Fillars employment due to redundancy one month prior to May 51% 1::C.

2el Fillars poor employee per ormance is irrele'ant as regards the issue on redundancy. 3edundancy arises because there is no more need or the employees position in relation to the $hole business organi"ation% and not because the employee unsatis actorily per ormed the duties and responsibilities re)uired by his position. An employee $ho is illegally dismissed is entitled to the t$in relie s o ull bac($ages and reinstatement. & reinstatement is not 'iable% separation pay is a$arded to the employee. &n a$arding separation pay to an illegally dismissed employee% in lieu o reinstatement% the amount to be a$arded shall be e)ui'alent to one month salary or e'ery year o ser'ice. Hnder 3epublic Act 7o. AB1;% employees $ho are illegally dismissed are entitled to ull bac($ages% inclusi'e o allo$ances and other bene its or their monetary e)ui'alent% computed rom the time their actual compensation $as $ithheld rom them up to the time o their actual reinstatement but i reinstatement is no longer possible% the bac($ages shall be computed rom the time o their illegal termination up to the inality o the decision. 4e note that 2el Fillars reinstatement is no longer possible because the position he pre'iously occupied no longer e#ists% per 9an 8uans A ida'it dated 6ctober 1;% 1::C. Also% 2el Fillar had already recei'ed his separation pay sometime in 6ctober 1::C. BEBINA 9. SALVALO=A3 re.rese"ti"- #er %ate #'s&a" 3 9RE9ORIO SALVALO=A3 8s. NLR) et.a%. 9.R. N!. 1<20<:3 N!8em&er 243 2010 4hen a loating status lasts or more than si# (A) months% the employee may be considered to ha'e been constructi'ely dismissed. *onstructive dismissal e!ists 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. &t is e#ist $hen there is a cessation o $or( because continued employment is rendered impossible% unreasonable% or unli(ely% as an o er in'ol'ing a demotion in ran( and a diminution in pay. &ne iciency o employeeD condonation by employer. 4hile it is ac(no$ledged that petitioner >regorio<s ser'ice record sho$s that his per ormance as a security guard $as belo$ par% respondent >ul 1aci ic ne'er issued any memo citing him or the alleged repeated errors% ine iciency% and poor per ormance $hile on duty% and instead continued to assign him to 'arious posts. !his amounts to condonation by >ul 1aci ic o $hate'er in ractions >regorio may ha'e committed. *'en assuming the reasons or relie'ing

A; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

>regorio o his position $ere true% it $as incumbent upon >ul 1aci ic to be 'igilant in its compliance $ith labor la$s. &ebina /. $alvalo:a vs. 2ational 1abor (elations *ommission, /ulf "acific $ecurity Agency, Inc., and Angel 'ui:on, 9.R. N!. 1<20<:3 N!8em&er 243 2010. 0ARIO B. ,I0A9AN 8s. ,a6?!rEs U"ite 3 I"6!r.!rate a" @!r ,ea" A. )T1a"6i"!3 9.R. N!. 1>10A33 N!8em&er 2<3 2011 FA)TS/ 9ometime in 2//2% petitioner $as do$ngraded rom his post as 6&C to super'isor. !hen% in March o the ollo$ing year% he $as made to $or( as a mere technician. 4hen he 'ocally e#pressed his concerns regarding his assignments% one Loida A)uino% $ho $as in charge o ser'icingPpersonnel under the direct super'ision o respondent 2ean A. Cancino% told him not to report or $or( anymore. !herea ter% a certain Carlito 2ia"% 6perations Manager o respondent company% castigated petitioner or not ollo$ing A)uinoQs instruction to $or( as a technician. !his prompted petitioner to ile a complaint or illegal dismissal% non0 payment o o'ertime pay% holiday pay% ser'ice incenti'e lea'e and separation pay against respondents. 3espondents denied that petitioner $as illegally dismissed arguing that% since April .% 2//5 up to the time o the iling o the complaint% petitioner ne'er reported or $or( and continuously 'iolated the company policy on absence $ithout o icial lea'e (A46L). !hey allegedly sent a total o our (.) memoranda or the period August 2//2 to March 2//5 in orming petitioner o his o enses% including being A46L% but he nonetheless un+usti iably re used to return to $or(. &n reply% petitioner denied e'er recei'ing any one o the our memoranda allegedly sent by respondents. Iss'e/ 4hether or not there had been constructi'e dismissal R'%i"-/ Ges. Constructi'e dismissal is de ined as a )uitting because continued employment is rendered impossible% unreasonable or unli(elyD $hen there is a demotion in ran( or a diminution o pay. 2. !he test o constructi'e dismissal is $hether a reasonable person in the employeeQs position $ould ha'e elt compelled to gi'e up his position under the circumstances. &t is an act amounting to dismissal but is made to appear as i it $ere not. Constructi'e dismissal is there ore a dismissal in disguise. !he la$ recogni"es and resol'es this situation in a'or o employees in order to protect their rights and interests rom the coerci'e acts o the employer.2;

As held in the case o %oca.%ola Aottlers 1hilippines" 0nc. vs. &el Eillar%2A the burden alls upon the company to pro'e that the employeeQs assignment rom one position to another $as not tantamount to constructi'e dismissal. &n the case at bar% respondents ailed to discharge said burden. &n act% respondents never even disputed that petitioner $as relegated rom the position o 6&C to super'isor and% subse)uently% to an ordinary technician. Clearly% the reduction in petitionerQs responsibilities and duties% particularly rom super'isor to ordinary technician% constituted a demotion in ran! tantamount to constructi'e dismissal. !hus% contrary to the position o the CA% it is o no conse)uence that petitioner ailed to substantiate his allegation that Loida A)uino% an employee o respondent company% in ormed him that he $ill be $or(ing as an ordinary technician% and that $hen he openly 'oiced out his concern regarding the trans er% he $as told not to report or $or( anymore. As $ith all the other allegations made by petitioner% respondents never disputed or re'utted this act. 9imilarly% 4e cannot concur $ith the inding o the CA that it $as petitioner $ho abandoned his employment by ailing to report or $or( or ha'ing gone A46L. ?Abandonment is the deliberate and unjustified refusal of an employee to resume his employment.@2B !o constitute abandonment o $or(% t$o elements must concur: ?(1) the employee must ha'e ailed to report or $or( or must ha'e been absent $ithout 'alid or +usti iable reasonD and (2) there must ha'e been a clear intention on the part o the employee to se'er the employer0employee relationship mani ested by some o'ert act.@ 2C !he employer bears the burden o proo to sho$ the deliberate and un+usti ied re usal o the employee to resume his employment $ithout any intention o returning.2: &n the case o -odieng %oncrete 1roducts" 0nc. v. Emilia5/% citing )amarca v. 7rc.Men 0ndustries" 0nc. 51% the Court has ruled thus: ?# # #. Absence must be accompanied by o'ert acts unerringly pointing to the act that the employee simply does not $ant to $or( anymore. And the burden o proo to sho$ that there $as un+usti ied re usal to go bac( to $or( rests on the employer. ### A&a" !"me"t is a matter !( i"te"ti!" a" 6a""!t %i-#t%$ &e .res'me (r!m 6ertai" eJ'i8!6a% a6ts. T! 6!"stit'te a&a" !"me"t3 t#ere m'st &e 6%ear

AA E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

.r!!( !( e%i&erate a" '"I'sti(ie i"te"t t! se8er t#e em.%!$er-em.%!$ee re%ati!"s#i.. )%ear%$3 t#e !.erati8e a6t is sti%% t#e em.%!$eeQs '%timate a6t !( .'tti"- a" e" t! #is em.%!$me"t. 9ettled is the rule that mere a&se"6e !r (ai%'re t! re.!rt (!r ?!rE is "!t ta"tam!'"t t! a&a" !"me"t !( ?!rE. # # #.@ (*mphasis supplied) &n this case% petitionerQs ailure to report or $or( $as caused by the un$arranted demotion in ran( that $as imposed upon him by respondents% not by any intention to se'er employment ties $ith them. And his iling o the instant complaint or illegal dismissal indubitably negates the allegation o abandonment. -ad petitioner intended to orsa(e his +ob% then he $ould not ha'e ound it necessary to institute this case against respondents. NIPPON 1OUSIN9 P1IL. IN).3 a" @!r TA,AS1I OTA3 1OROS1I TA+A,A3 YUSU1IRO +AWATA3 0R. NOBOYUS1I a" 7OEL REYES 8s. 0AIA1 AN9ELA LEYNES3 9.R. N!. 1;;<1:3 A'-'st 33 2011 Fa6ts/ 1etitioner% originally engaged in the business o pro'iding building maintenance ,rom its original 'entured into building management and gained Bay >ardens Condominium 1ro+ect (the 1ro+ect) o the Bay >ardens Condominium Corporation (B>CC) as its irst and only building maintenance client. &n this regard% petitioner hired respondent Maiah Angela Leynes on 2A March 2//1 or the position o 1roperty Manager% $ith a salary o 1./%///.// per month. -er responsibilities include sur'eying the re)uirements o the go'ernment and the client or said pro+ect% the ormulation o house rules and regulations% the preparation o the annual operating and capital e#penditure budget% hiring and deployment o manpo$er% salary and position determination as $ell as the assignment o the schedules and responsibilities o employees. Leynes had a misunderstanding $ith the building engineer o the pro+ect (Cantuba) and barred the latter<s entry to the site. !he *ngr. also accused the ormer o conceit% pride and poor managerial s(ills. !a(ada% the 7-1&Qs Fice 1resident issued a memorandum attributing the incident to Isimple personal di erencesI and directing Leynes to allo$ *ngr. Cantuba to report bac( or $or(. 2isappointed $ith this management decision% she submitted a letter to 7-1&<s 1resident (6ta) as(ing or an emergency lea'e o absence or the supposed purpose o coordinating $ith her la$yer regarding her resignation letter. 7-1& o ered the 1roperty Manager position to *ngr. Carlos 8ose as a conse)uence LeynesQ signi ication o her intention to

resign. -o$e'er% she sent another letter e#pressing her intention to return to $or( and to call o her planned resignation. -o$e'er% she recei'ed a letter rom the management to report instead to the main o ice as one in a ? loating status@ because someone already occupies her post. Aggrie'ed% Leynes iled a complaint against petitioner or illegal dismissal% unpaid salaries% bene its% damages and attorneyQs ees. !he Labor arbiter ound that the petitioner<s act o putting Leynes on a loating status $as e)ui'alent to termination $ithout +ust cause. !he 7L3C ruled that 7-1&Qs placement o Leynes on loating status $as necessitated by the clientQs contractually guaranteed right to re)uest or her relie . -o$e'er% this $as later on re'ersed by the CA% hence% this present petition be ore the 9C. Iss'e/ 467 petitionersQ decision to place respondent on loating status is tantamount to constructi'e dismissal. (Alternati'e: $hat is the e ect o $ithdra$n resignation= R'%i"-/ 7o% the placement o Leynes on a loating status due to redundancy is 'alid. !here is no constructi'e dismissal. !he actual antecedents suggest that 7-1&Qs immediate hiring o *ngr. 8ose as the ne$ 1roperty Manager or the 1ro+ect $as brought about by LeynesQ o$n rash announcement o her intention to resign rom her position. Although she subse)uently changed her mind and sent 3eyes a letter by tele a# announcing the reconsideration o her planned resignation and her intention to return to $or(% Leynes e'idently had only hersel to blame or precipitately setting in motion the e'ents $hich led to 7-1&Qs hiring o her o$n replacement. !he record% moreo'er% sho$s that 7-1& simply placed her on loating status Iuntil such time that another pro+ect could be securedI or her. !raditionally in'o(ed by security agencies $hen guards are temporarily sidelined rom duty $hile $aiting to be trans erred or assigned to a ne$ post or client% Article 2CA o the +a'or %ode has been applied to other industries $hen% as a conse)uence o the 'ona fide suspension o the operation o a business or underta(ing% an employer is constrained to put employees on loating status or a period not e#ceeding si# months. &n brushing aside respondentsQ reliance on said pro'ision to +usti y the act o putting Leynes on loating status% the CA ruled that no e'idence $as adduced to sho$ that there $as a 'ona fide suspension o 7-1&Qs business. 4hat said court clearly o'erloo(ed% ho$e'er% is the act that 7-1& had belatedly 'entured into building management and% $ith B>CC as its only client in said underta(ing% had no other 1roperty Manager position a'ailable to Leynes.

AB E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

!he rule is settled% ho$e'er% that Io 0detailingI is not e)ui'alent to dismissal% so long as such status does not continue beyond a reasonable time and that it is only $hen such a I loating statusI lasts or more than si# months that the employee may be considered to ha'e been constructi'ely dismissed. A complaint or illegal dismissal iled prior to the lapse o said si#0 month andPor the actual dismissal o the employee is generally considered as prematurely iled. 9ince the petitioner has no other client or the building management side o its business% it acted $ithin its prerogati'es $hen it e'entually terminated LeynesQ ser'ices on the ground o redundancy. 6ne o the recogni"ed authori"ed causes or the termination o employment% redundancy e#ists $hen the ser'ice capability o the $or( orce is in e#cess o $hat is reasonably needed to meet the demands o the business enterprise. A redundant position is one rendered super luous by any number o actors% such as o'erhiring o $or(ers% decreased 'olume o business% dropping o a particular product line pre'iously manu actured by the company or phasing out o ser'ice acti'ity priorly underta(en by the business An employer has no legal obligation to (eep more employees than are necessary or the operation o its business. Considering that Leynes $as terminated rom ser'ice upon an authori"ed cause% $e ind that the CA li(e$ise erred in aulting 7-1& or supposedly ailing to noti y said employee o the particular act or omission le'eled against her and the groundPs or $hich she $as dismissed rom employment. 4here dismissal% ho$e'er% is or an authori"ed cause li(e redundancy% the employer is% instead% re)uired to ser'e a $ritten notice o termination on the $or(er concerned and the 26L*% at least one month rom the intended date thereo . ,or its ailure to comply strictly $ith the 5/0day minimum re)uirement or said notice and e ecti'ely 'iolating LeynesQ right to due process% 7-1& should be held liable to pay nominal damages in the sum o 1;/%///.//. 3. PREVENTIVE SUSPENSION 2B!!E V3 R'%e 143 Se6ti!" 3 B 44 SE)TION 3. Pre8e"ti8e s's.e"si!". R !he employer may place the $or(er concerned under pre'enti'e suspension i( #is 6!"ti"'e em.%!$me"t .!ses a seri!'s a" immi"e"t t#reat t! t#e %i(e !r .r!.ert$ !( t#e em.%!$er !r !( #is 6!-?!rEers. SE)TION 4. Peri! !( s's.e"si!". R 7o pre'enti'e suspension shall last longer than 5/ days. !he employer shall therea ter reinstate the $or(er in

his ormer or in a substantially e)ui'alent position or the employer may e#tend the period o suspension pro'ided that during the period o e#tension% he pays the $ages and other bene its due to the $or(er. &n such case% the $or(er shall not be bound to reimburse the amount paid to him during the e#tension i the employer decides% a ter completion o the hearing% to dismiss the $or(er. Pre8e"ti8e S's.e"si!" !he right to impose pre'enti'e suspension is a management prerogati'e although it is not ound in the LC. &t is ound in its implementing and regulations. Va%i s's.e"si!" & the employees continued employment poses a serious and imminent threat to the li e and or property o the employer or o his co0$or(ers. (section 5% rule N&F% boo( F) &t is not a orm o penalty% it is more o a protecti'e measure underta(en by the employer. 6ne cannot impose a penalty because the employee cannot be punished $ithout due process. &n practice% pre'enti'e suspension notice should be in $riting. Nat're !( Pre8e"ti8e S'.e"si!" &t is a protecti'e measure underta(en by the employer to protect the interest o his business 1. to pre'ent urther commission o another o ense 2. to pre'ent tampering o e'idences to conceal a crime to pre'ent in luence on the $itnesses 1. 9r!'" s if his continued employment poses a serious and imminent threat to the life or property of the employer or of his co workers Pre8e"ti8e S's.e"si!" 3eaning 1re'enti'e suspension may be de ined as the temporary remo'al o an employee charged or 'iolation o company rules rom his present status or position. 1re'enti'e suspension is usually imposed against sub+ect employee $hile the company is conducting an in'estigation or his alleged 'iolation in order to pre'ent him rom causing urther harm or damage to the company or his co0employees. 1re'enti'e suspension is not a disciplinary measure% and should not be con used $ith suspension imposed as a penalty. Le-a% Basis !he right o employer to impose pre'enti'e suspension is not ound in the Labor Code itsel .

AC E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

!he o t0cited legal basis or imposition o pre'enti'e suspension is 9ection C and 9ection : o 3ule NN&&&% Boo( F% o the 6mnibus 3ules &mplementing the Labor Code% as amended by 2epartment 6rder 7o. :% 9eries o 1::B% $hich read as ollo$s: $ection B. "reventive suspension. !he employer may place the $or(er concerned under pre'enti'e suspension only i his continued employment poses a serious and imminent threat to the li e or property o the employer or o his co0$or(ers. $ection C. "eriod of suspension. 7o pre'enti'e suspension shall last longer than thirty (5/) days. !he employer shall therea ter reinstate the $or(er in his ormer or in a substantially e)ui'alent position or the employer may e#tend the period o suspension pro'ided that during the period o e#tension% he pays the $ages and other bene its due to the $or(er. &n such case% the $or(er shall not be bound to reimburse the amount paid to him during the e#tension i the employer decides% a ter completion o the hearing% to dismiss the $or(er. &nterestingly% the abo'e0)uoted pro'isions are no longer reproduced in the present 6mnibus 3ules% as amended by 2epartment 6rder 7o. ./% 9eries o 2//5% $hich supersedes 2epartment 6rder :0:B. &t is opined% ho$e'er% that the remo'al o said pro'isions rom the omnibus rules did not diminish the right o the employer to impose pre'enti'e suspension% considering that the +usti ication or upholding the right is necessity itsel % i.e.% $hen continued employment poses threats to the li e o the employer or his co0$or(er. W#e" Em.%!$ee ma$ &e P%a6e '" er Pre8e"ti8e S's.e"si!" !he employer may place the $or(er concerned under pre'enti'e suspension only i his continued employment poses a serious and imminent threat to the li e or property o the employer or o his co0 $or(ers. &t is not the nature or gra'ity o the charge against the employee that should be made the basis or placing him under pre'enti'e suspension. !hus% in a case% the Court held that it is improper or the employer to place under pre'enti'e suspension employees charged o 'iolation o school rules and regulations on the $earing o uni orm% tardiness or absence% and maliciously spreading alse accusations against the school. (9ee 4oodridge 9chool 's. 1e Benito% >.3. 7o. 1A/2./% 6ctober 2:% 2//C.)

0a5im'm Peri! !( Pre8e"ti8e S's.e"si!" !he ma#imum period o pre'enti'e suspension under the rule is 5/ days. A ter that period% the $or(er must be reinstated to his ormer position% or in a substantially e)ui'alent position. & the employer does not $ant to reinstate his employee or $hate'er reason% he has the option to e#tend the period o suspension $ith the condition that he must pay the $or(er his $ages and other bene its during the entire period o e#tension. !he latter option is called payroll reinstatement (as opposed to the ormer $hich is called actual reinstatement). &n case the employer opts or payroll reinstatement% the employee is not bound to reimburse $ages and bene its paid e'en i he is ultimately dismissed rom ser'ice% and regardless o $hether the ground or pre'enti'e suspension is pro'ed to be 'alid. Pa$me"t !( Wa-es 'ri"- Pre8e"ti8e S's.e"si!" !he employee placed under pre'enti'e suspension is not entitled to payment o $ages. !his rule% ho$e'er% presupposes that the suspension is 'alid. & the suspension is in'alid or illegal% the employee shall be entitled to payment o $ages during the entire period o illegal suspension. ()ee >atbonton 's. 7L3C% >.3. 76. 1.ABB:% 8anuary 25% 2//A.) Li(e$ise% i the suspension is e#tended beyond the 5/0day limit% the employee shall be entitled to $ages and other bene its or the period o the e#tension. W#e" Pre8e"ti8e S's.e"si!" am!'"ts t! )!"str'6ti8e ,ismissa% 4hen pre'enti'e suspension e#ceeds the ma#imum period allo$ed $ithout reinstating the employee either by actual or payroll reinstatement ( see -yatt !a#i 9er'ices &nc. 's. 3ustom M. Catinoy% >.3. 7o. 1.52/.% 8une 2A% 2//1)% or $hen pre'enti'e suspension is or inde inite period (see 1ido 's. 7ational Labor 3elations Commission% >.3. 7o. 1A:C12% ,eb. 2B% 2//B)% constructi'e dismissal $ill set in. 1re'enti'e suspension is imposed on an employee under in'estigation i he poses a serious threat to the li e and property o the employer and o his co0$or(ers. J/atbonton vs. 21(*, 9.R. N!. 14:;;>3 7a"'ar$ 233 200:3 4;> S)RA 41:K !he rule on pre'enti'e suspension is ound in 9ecs. C and :% 3ule NN&&&% 26 1:% 8une 21% 1::B.

A: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

As a general rule% the employee is not entitled to $ages during the period o a 8a%i pre'enti'e suspension. -o$e'er% i pre'enti'e suspension is ound to be $ithout basis% the employer is re)uired to pay the illegally suspended employee his bac($ages or the period o his suspension. J3aricalum 3ining vs. Decorion, i"(raK R'%e !" Pr!.!rti!"a%it$ Accordingly% in determining the 'alidity o dismissal as to a orm o penalty% the charges or $hich an employee is being administrati'ely cited must be o such nature that $ould merit the imposition o the said supreme penalty. 2ismissal should not be imposed i it is unduly harsh and grossly disproportionate to the charges. !he rule on proportionality0 that the penalty imposed should be commensurate to the gra'ity o his o ense. RE0E0BER t#at 1re'enti'e suspension pending in'estigation is not a penalty. &t is a measure intended to enable the disciplining authority to in'estigate charges against respondent by pre'enting the latter rom intimidating or in any $ay in luencing $itnesses against him. ;3andapat vs. Add Dorce "ersonnel $ervices, Inc., /.(. 2o. ,BE.BF, Guly H, .E,E, "ere:, G.I & the in'estigation is not inished and a decision is not rendered $ithin that period% the suspension $ill be li ted and the respondent $ill automatically be reinstated. ;The &oard of Trustees of the /overnment $ervice Insurance $ystem, et al. vs. Albert 3. Jelasco, et al., /.(. 2o. ,KELH>, Debruary ., .E,,, *arpio, G.I 1re'enti'e suspension lasts only or a period o 5/ days% and beyond this period% such suspension may amount to constructi'e dismissal. G3aricalum 3ining *orp. vs. Decorion, 4<; S)RA 1<2 2200:4H -64*F*3% !here are cases $here a 'iolation o the 5/0day suspension period may entail payment o indemnity o 11%///.// GG($ &usiness *orp. vs. 21(*, 9.R. N!. 10<<>13 7'%$ 1;3 1>>AH !r P33000.00 G "epsi *ola Distributors vs. 21(*, 9.R. N!. 10:<313 0a$ :3 1>>;H 4hile another 'ie$ is that the period e#ceeding 5/ days shall be compensable% J%arlos E. Ealen@uela vs. %alte$ 1hilippines" 0nc." >.3. 7os. 1A::A;0AA% 2ecember 1;% 2/1/% Eillarama" 3r." 3.K thus% the e#tension $ill not gi'e rise to constructi'e dismissal.

!he pre'enti'e suspension beyond 5/ days shall be upheld pro'ided the employeeQs $ages and bene its are paid in the interim. J/enesis Transport )ervice" 0nc. vs. 9nyon ng Malayang Manggaga#a ng /enesis Transport" >.3. 7o. 1C211.% April ;% 2/1/% %arpio Morales" 8.K An employee $ho $as pre'enti'ely suspended pending an in'estigation is treated li(e an employee on appro'ed 'acation lea'e $ithout pay. !he period o pre'enti'e suspension shall e ecti'ely interrupt the continuity o his go'ernment ser'ice. GThe &oard of Trustees of the /overnment $ervice Insurance $ystem, et al. vs. Albert 3. Jelasco, et al., 9.R. N!. 1;04:33 Fe&r'ar$ 23 20113 *arpio, G.H &mposition o pre'enti'e suspension does not amount to termination o employment. 1re'enti'e suspension is +usti ied $here the employeeQs continued employment poses a serious and imminent threat to li e or property or o the employeeQs co0 $or(ers% and does not amount to illegal dismissal. ;Gose ". Artificio vs. 21(*, et al., /.(. 2o. ,K.CBB, Guly .H, .E,E, "ere:, G.I 2. ,'rati!" 0a5im'm .eri! 1re'enti'e suspension shall not last longer than 5/ days. !he employer shall therea ter (1) reinstate the $or(er in his ormer or in a substantially e)ui'alent positionD or (2) the employer may e#tend the period o suspension% pro'ided that during the period o e#tension% he pays the $ages and other bene its due to the $or(er concerned. &n such a case% the $or(er shall not be bound to reimburse the amount paid to him during the e#tension i the employer decides% a ter completion o the hearing% to dismiss the $or(er. 3. E5te"si!" )ases/ 7RS B'si"ess )!r.. 8s. NLR) 224: S)RA 44A4 !here are cases $here a 'iolation o the 5/0day suspension period may entail payment o indemnity o 11%///.//. 9a" ara S'..%$ 8s. NLR) 2300 S)RA 1:24 !he supposed suspension $as e#pected to last or more than the period allo$ed by la$% thus ma(ing the suspension constitute o an illegal dismissal. At%as Ferti%i*er )!r. 8s. NLR) 22;3 S)RA A4>4 1re'enti'e 9uspension is a disciplinary measure or the protection o the company<s property pending

B/ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

in'estigation o any alleged mal easance or mis easance committed by the employee. 9ection 5% 3ule N&F% Boo( F o the 6mnibus 3ules &mplementing the Labor Code pro'ides that the employer may place the $or(er concerned under pre'enti'e suspension i his continued employment poses a serious threat to the li e or property o the employer or o his co0$or(ers. )1ONA TORRES V NLR) 2EBR SE)URITY A9EN)Y4 330 S)RA 313 A.ri% 123 2000 FA)TS/ 8an ;% 1:C:% * Z 3 security agency hired Chona !orres as a security guard. 6n 6ct 2B% 1:C:% during a routinary meeting o the security guards o the agency assigned to the 1hilippine Aerospace 2e'elopment Corporation% the issue o granting a 12;.// pay increase pursuant to 3A AB2B $as ta(en up and )uestions $ere raised as to the date o implementation o the increase. 1etitioner !orres stood up and uttered aloud at the presiding o icer: IBAM&! A7> 9A9AB&-&7 7&7G6 9A 61&9&7A A! 2&!6 AG MA>MA&BA[I to $hich remar( the presiding o icer replied: I4ALA 7AMA7 1A>MAMA&BA% 2& BA=I. !he presiding o icer also as(ed: IBAM&! AGA4 M6 2667 9A 61&9&7A=I !hen petitioner shouted: I4ALA 7A AM67> !&4ALA 9A &7G6 A! 9A A>*7CG MA9& 9&7H7>AL&7> MAG6. *-% MH7> LALAM& LA7> AM6% BAMA MH7> A76 1A A7> 7A>A4A M6 9A &7G6 7>AG67[I 6n the same day% the agency sent !orres a letter saying e ecti'e immediately% she is suspended rom duty as 9ecurity >uard or i teen days or discourtesy" disloyalty and insu'ordination #hile in the performance of duty. !orres iled $ith the Labor Arbiter a complaint or illegal suspension and 'iolation o 3.A. AB2B% and or ha'ing been re)uired to sign on a blan( payroll. 6n 7o' 1/% 1:C:% !orres recei'ed a letter rom the agency in orming her that she $as re0assigned and re)uired to report at the respondentQs Manila o ice or urther instructions. 6n 7o' 2B% the agency terminated her ser'ices or abandonment $hen she ailed to report or $or( in her ne$ assignment. !orres iled $ith the Labor Arbiter an amended complaint charging respondent $ith underpayment o $ages under 3.A. 7o. AA./ and harassment. 0 Labor Arbiter ordered agency to reinstate !orres to her ormer position% pay her salary or 6ct 1:C:% and salary di erentials under 3A AA./ and 3A AB2B Agency appealed to 7L3C. !he 7L3C denied the appeal on the ground o non0per ection due to lac( o

appeal bond and that there $as no reason to disturb the decision. 0 !he decision ha'ing become inal% the Labor Arbiter issued a $rit o e#ecution on the reinstatement aspect% but it $as not implemented because the monetary aspect o the decision remained to be determined. 0 6n 7o' C% 1::1% !orres as(ed the Labor Arbiter to issue an alias $rit o e#ecution based on the completed computation o bac( $ages o 11/.%5:A.// $or(ed out by 7L3CQs 3esearch and &n ormation Hnit. 7L3C 9heri issued a 7otice o >arnishment $hich $as ser'ed the agency<s deposit account $ith 17B% in the amount o 11/;%2:A.// inclusi'e o the e#ecution ee o 11%///.//. 6n 7o' 2B% 1::1% Labor Arbiter directed 17B to release the garnished amount and to ma(e it payable to 7L3C cashier or the account o !orres pending ultimate release to her. 17B issued a ManagerQs Chec( dated 2ec A% 1::1. Meantime% on 2ec 5% 1::1% the agency iled $ith the Labor Arbiter an Hrgent *#01arte Motion to Uuash the Alias 4rit o *#ecution on the ground that there has been a change in the situation o the parties $hich ma(es the e#ecution ine)uitable. 3espondent contended that !orres accepted employment rom another security agency $ithout pre'iously resigning rom it. 6n ,eb 2% 1::2% Labor Arbiter issued an order or partial e#ecution directing the release o the uncontested salary di erential amounting to 11;%;25..C% to be deducted rom the amount o 11/;%5:A.//% and to $ithhold the balance% pending resolution o the Motion to Uuash the alias 4rit o *#ecution. 6n March 1:% 1::2% petitioner iled $ith 7L3C a petition or mandamus and in+unction to compel the Labor Arbiter to issue an order directing the 7L3C Cashier to release the entire amount deposited $ith the latter to petitioner. 6n Aug 11% 1::2% 7L3C issued a resolution denying the petition or mandamus and in+unction and ordered Labor Arbiter to immediately resol'e respondent<s Hrgent Motion to Uuash 4rit o *#ecution. 1etitioner contends that the release o the +udgment a$ard is purely a ministerial duty o the Labor Arbiter. ISSUE/ 467 7L3C committed gra'e abuse o discretion in ordering the Labor Arbiter to resol'e the motion to )uash alias $rit o e#ecution

B1 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

1EL,/ G*93 *#ecution is the inal stage o litigation% the end o the suit. &t cannot be rustrated e#cept or serious reasons demanded by +ustice and e)uity. 4hen a +udgment becomes inal and e#ecutory% it is the ministerial duty o the court to issue a $rit o e#ecution to en orce the +udgment. 0 A $rit o e#ecution may ho$e'er be re used on e)uitable grounds as $hen there $as a change in the situation o the parties that $ould ma(e e#ecution ine)uitable or $hen certain circumstances% $hich transpired a ter +udgment became inal% rendered e#ecution o +udgment un+ust. !he act that the decision has become inal does not preclude a modi ication or an alteration thereo because e'en $ith the inality o +udgment% $hen its e#ecution becomes impossible or un+ust% it may be modi ied or altered to harmoni"e the same $ith +ustice and the acts. 0 !he respondent agencyQs contention that there has been a change in the situation o the parties ma(ing e#ecution ine)uitable because petitioner accepted employment rom another agency $ithout resigning rom it is patently $ithout merit. !he rule no$ is that bac( $ages a$arded to an illegally dismissed employee shall not be diminished or reduced by the earnings deri'ed by him else$here during the period o his illegal dismissal. 0 &n this particular case% the decision is inal and% in act% the amount o the salary di erentials and bac( $ages a$arded to !orres has been garnished rom the account o respondent agency $ith 17B $ith no opposition or resistance and it is the ministerial duty o the Labor Arbiter to release the money to petitioner. Disposition 1etition granted. Labor Arbiter directed to release the money a$ard to petitioner 7OSE P. ARTIFI)IO3 8s. NATIONAL LABOR RELATIONS )O00ISSION3 RP 9UAR,IANS SE)URITY A9EN)Y3 IN).3 7UAN VI)TOR +. LAURILLA3 ALBERTO A9UIRRE3 a" ANTONIO A. AN,RES3 9.R. N!. 1;2><<3 7'%$ 2:3 2010 Fa6ts/ 1etitioner 8ose 1. Arti icio $as employed as security guard by respondent 31 >uardians 9ecurity Agency% &nc.% a corporation duly organi"ed and e#isting under 1hilippine La$s and li(e$ise duly licensed to engage in the security agency business. 9ometime in 8une 2//2% Arti icio had a heated argument $ith a ello$ security guard% Merlino B. *du (*du). 6n 2; 8uly 2//2% *du submitted a con idential report ; to Antonio A. Andres (Andres)% Administration Z 6perations Manager% re)uesting that Arti icio be in'estigated or maliciously machinating *duQs hasty relie rom his post and or lea'ing his post during

night shi t duty to see his girl riend at a nearby beerhouse. 6n 2: 8uly 2//2% another security guard% >utierre" *rr (*rr)% sent a report A to Andres stating that Arti icio arri'ed at the o ice o 31 >uardians 9ecurity Agency% &nc. on 2; 8une 2//2% under the in luence o li)uor. 4hen Arti icio learned that no salaries $ould be gi'en that day% he bad0mouthed the employees o 31 >uardians 9ecurity Agency% &nc. and threatened to IarsonI their o ice. 6n e'en date% Andres issued a Memorandum temporarily relie'ing Arti icio rom his post and placing him under pre'enti'e suspension pending in'estigation or conduct unbecoming a security guard% such as% abandonment o post during night shi t duty% light threats and irregularities in the obser'ance o proper relie'ing time. -e also directed Arti icio to report to the o ice o 31 >uardians 9ecurity Agency% &nc. and submit his $ritten ans$er immediately upon receipt o the memorandum. &n another memorandum% Andres in ormed Arti icio that a hearing $ill be held on 12 August 2//2. 4ithout $aiting or the hearing to be held% Arti icio iled on ; August 2//2% a complaint or illegal dismissal% illegal suspension% non0payment o o'ertime pay% holiday pay% premium pay or holiday and rest days% 15th month pay% and damages. -e also prayed or payment o separation pay in lieu o reinstatement. 1/ Labor Arbiter rendered a decision dated A 6ctober 2//5% inding respondents guilty o illegal suspension and dismissal. &t $as also held that Arti icio should ha'e been allo$ed to con ront *du and *rr be ore he $as pre'enti'ely suspended. 9ince the complainant does not see( reinstatement% he is entitled to limited bac($ages and separation pay. 6n appeal% the 7L3C% set aside the decision o the Labor Arbiter ruling that the Labor Arbiter erred in considering pre'enti'e suspension as a penalty. !he motion or reconsideration iled by Arti icio $as denied or lac( o merit Arti icio ne#t iled a petition or certiorari be ore the Court o Appeals $hich rendered a decision a irming the 7L3C decision. Arti icio iled a motion or reconsideration $hich the Court o Appeals again denied. Iss'es/ 1. 4ether or not 1etitioner Arti icioQs pre'enti'e suspension $as +usti ied 2. 4hether or not% he is entitled to bac($ages and separation pay R'%i"-/

B2 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

1. Ges. 9ections C and : o 3ule NN&&&% &mplementing Boo( F o the 6mnibus 3ules &mplementing the Labor Code pro'ides that pre'enti'e suspension is +usti ied $here the employeeQs continued employment poses a serious and imminent threat to the li e or property o the employer or o the employeeQs co0 $or(ers. 4ithout this (ind o threat% pre'enti'e suspension is not proper. &n this case% Arti icioQs pre'enti'e suspension $as +usti ied since he $as employed as a security guard tas(ed precisely to sa eguard respondentsQ client. -is continued presence in respondentsQ or its clientQs premises poses a serious threat to respondents% its employees and client in light o the serious allegation o conduct unbecoming a security guard such as abandonment o post during night shi t duty% light threats and irregularities in the obser'ance o proper relie'ing time. Besides% Management has the prerogati'e to discipline its employees and to impose appropriate penalties on erring $or(ers pursuant to company rules and regulations. !his Court has upheld a companyQs management prerogati'es so long as they are e#ercised in good aith or the ad'ancement o the employerQs interest and not or the purpose o de eating or circum'enting the rights o the employees under special la$s or under 'alid agreements. 2/ 9igni icantly% Arti icio regrettably chose not to present his side at the administrati'e hearing scheduled to loo( into the actual issues that accompanied the accusation against him. &n act% he a'oided the in'estigation into the charges by iling his illegal dismissal complaint ahead o the scheduled in'estigation. -e% on his o$n decided that his pre'enti'e suspension $as in act illegal dismissal and that he is entitled to bac($ages and separation pay. &ndeed% Arti icio $ould e'en re+ect reinstatement re'ealing his bent to ha'e his o$n $ay through his o$n means. As aptly noted by the 7L3C% Arti icio preempted the in'estigation that could ha'e a orded him the due process o $hich he $ould then say he $as denied. 2. Ges or Bac($ages. 7o or separation pay. !hat resol'ed% $e ne#t proceed to the bene its due Arti icio. -a'ing determined that the imposition on Arti icio o pre'enti'e suspension $as proper and that such suspension did not amount to illegal dismissal% $e see no basis or the grant o bac($ages.

7onetheless% gi'en the attendant circumstances in this case% namely% that Arti icio had been $or(ing $ith the company or a period o si#teen (1A) years and $ithout any pre'ious derogatory record% the ends o social and compassionate +ustice $ould be ser'ed i Arti icio be gi'en some e)uitable relie in the orm o separation pay. Arti icio is entitled to separation pay considering that $hile reinstatement is an option% Arti icio himsel has ne'er% at anytime a ter the notice o pre'enti'e suspension intended to remain in the employ o pri'ate respondents.

+oss of %onfindence BLUE S+Y TRA,IN9 )O0PANY3 IN). a" @!r 7OSE TANTIANSU a" LIN,A TANTIANSU3 8s. ARLENE P. BLAS a" 7OSEP1 ,. SILVANO3 9.R. N!. 1>0AA>3 0ar6# ;3 2012 Dacts# 1etitioner Blue 9(y !rading Company% &nc. (Blue 9(y) is a duly registered domestic corporation engaged in the importation and sale o medical supplies and e)uipment. 1etitioner 8ose >. !antiansu% 8r. (8ose) is Blue 9(yQs 'ice president or operations $hile petitioner Linda >. !antiansu (Linda) is its assistant corporate secretary. !he respondents Arlene 1. Blas (Arlene) and 8oseph 2. 9il'ano (8oseph) $ere regular employees o Blue 9(y and they respecti'ely held the positions o stoc( cler( and $arehouse helper be ore they $ere dismissed rom ser'ice on ,ebruary ;% 2//;. 6n 8anuary 2:% 2//;% Lorna 7. Manalastas (Lorna)% Blue 9(yQs $arehouse super'isor% $rote 8ose a memorandum JAK in orming the latter that si# pairs o intensi ying screens $ere missing. Lorna li(e$ise stated that $hen a certain ?Boy@ conducted an in'entory on 6ctober 2//.% the screens $ere still completely accounted or. 6n 8anuary 51% 2//;% -elario Adonis% 8r. (-elario)% $arehouse personnel% $as summoned by Linda% 8oseQs $i e Alice !antiansu% and human resources department head 8ean B. 2e La 1a" (8ean). -elario $as as(ed to admit his participation in the the t o the missing screens. 4hile he $as o ered to be paid a separation pay i he $ould con ess complicity $ith the alleged the t% he pleaded utter innocence. 6n ,ebruary 1% 2//;% 8ean noti ied -elario o his termination rom ser'ice on the ground o his ailure to properly account or and maintain a balance o the companyQs stoc( in'entories% hence% resulting in Blue 9(yQs loss o trust and con idence in him. JBK !he day

B5 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

a ter% Blue 9(y promptly iled $ith the 2epartment o Labor and *mployment (26L*) an establishment termination report JCK indicating therein -elarioQs dismissal rom ser'ice or cause. 6n ,ebruary 5% 2//;% 8ean issued notices to e#plainPpre'enti'e suspension J:K to Arlene% 8oseph% deli'ery personnel 8ayde !ano0an (8ayde) and maintenance personnelPdri'er 4il redo ,asonilao (4il redo). !he notices in ormed them that they $ere being accused o gross dishonesty in connection $ith their alleged participation in and conspiracy $ith other employees in committing the t against company property% speci ically relati'e to the loss o the si# intensi ying screens. !hey $ere placed under pre'enti'e suspension pending in'estigation and $ere thus re)uired to ile their $ritten e#planations $ithin .C hours rom receipt o the notices. 6n ,ebruary .% 2//;% Arlene submitted to 8ean a hand$ritten memorandum denying (no$ledge or complicity $ith the the t o the intensi ying screens. 8oseph% 8ayde and 4il redo also iled their $ritten e#planations denying any in'ol'ement in the the t $hich too( place and pro essing their dedication and loyalty to Blue 9(y. J12K 6n ,ebruary ;% 2//;% 8ean issued to Arlene% 8oseph% 8ayde and 4il redo notices o dismissal or cause J15K stating therein that e'idence that they had conspired $ith each other to commit the t against company property $as too glaring to ignore. Blue 9(y had lost its trust and con idence on them and as an act o sel 0preser'ation% their termination rom ser'ice $as in order. 6n ,ebruary B% 2//;% Blue 9(y iled $ith the 26L* an establishment termination report stating therein the dismissal o Arlene% 8oseph% 8ayde and 4il redo. 6n ,ebruary C% 2//;% Arlene% 8oseph% -elario% 8ayde and 4il redo iled $ith the 7ational Labor 3elations Commission (7L3C) a complaint or illegal dismissal and suspension% underpayment o o'ertime pay% and non0payment o emergency cost o li'ing allo$ance (*C6LA)% $ith prayers or reinstatement and payment o ull bac($ages. !he complaint $as doc(eted as 7L3C 7C3 Case 7o. //0/20/15;10/;. Mean$hile% an entrapment operation $as conducted by the police during $hich 8ayde and -elario $ere caught allegedly attempting to sell to an operati'e an ultrasound probe $orth around 1.//%///.// belonging to Blue 9(y. 6n April 22% 2//;% Uue"on City &n)uest 1rosecutor Arleen !agaban issued a resolution J1;K recommending the iling in court o criminal charges against 8ayde and -elario.

6n May 2//;% be ore the complaint $hich $as iled $ith the 7L3C can be resol'ed% -elario% 8ayde and 4il redo e#ecuted a ida'its o desistance J1AK stating therein that their termination by Blue 9(y $as or cause and a ter obser'ance o due process. Issues 4hether or not respondents< dismissal $as +usti ied on the ground o loss o trust and con idence. This *ourt?s (uling !he rule is long and $ell settled that% in illegal dismissal cases li(e the one at bench% the burden o proo is upon the employer to sho$ that the employee<s termination rom ser'ice is or a +ust and 'alid cause. !he employer<s case succeeds or ails on the strength o its e'idence and not on the $ea(ness o that adduced by the employee% in (eeping $ith the principle that the scales o +ustice should be tilted in a'or o the latter in case o doubt in the e'idence presented by them. 6 ten described as more than a mere scintilla% the )uantum o proo is substantial e'idence $hich is understood as such rele'ant e'idence as a reasonable mind might accept as ade)uate to support a conclusion% e'en i other e)ually reasonable minds might concei'ably opine other$ise. ,ailure o the employer to discharge the oregoing onus $ould mean that the dismissal is not +usti ied and there ore illegal. &n the case at bar% the 9upreme Court agreed $ith the petitioners that mere substantial e'idence and not proo beyond reasonable doubt is re)uired to +usti y the dismissal rom ser'ice o an employee charged $ith the t o company property. -o$e'er% the Court ound no error in the CA<s indings that the petitioners had not ade)uately pro'en by substantial e'idence that Arlene and 8oseph indeed participated or cooperated in the commission o the t relati'e to the si# missing intensi ying screens so as to +usti y the latter<s termination rom employment on the ground o loss o trust and con idence. IV. TER0INATION OF E0PLOY0ENT A. ReJ'isites (!r a Va%i ,ismissa% U Se6t 13 Art. III !( t#e 1><; )!"stit'ti!" Se6ti!" 1. 7o person shall be depri'ed o li e% liberty% or property $ithout due process o la$% nor shall any person be denied the e)ual protection o the la$s. U Arti6%e 2;; 2&4 L)P Arti6%e 2;;. Miscellaneous provisions. (a) NNN (b) 9ub+ect to the constitutional right o $or(ers to security o tenure and their right to be protected against dismissal e#cept or a +ust or authori"ed

B. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

cause and $ithout pre+udice to the re)uirement o notice under Article 2C5 o this Code% the employer shall urnish the $or(ers $hose employment is so sought to be terminated a $ritten notice containing a statement o the cause or termination and shall a ord the latter ample opportunity to be heard and to de end himsel $ith the assistance o his representati'e i he so desires in accordance $ith company rules and regulations promulgated pursuant to guidelines set by the 2epartment o Labor and *mployment. Any decision ta(en by employer shall be $ithout pre+udice to the right o the $or(er to contest the 'alidity or legality o his dismissal by iling a complaint $ith the regional branch o the 7ational Labor 3elations Commission. !he burden o pro'ing that the termination $as or a 'alid or authori"ed cause shall rest on the employer. !he 9ecretary o Labor and *mployment may suspend the e ects o the termination pending resolution o the dispute in the e'ent o a prima acie inding by the appropriate o icial o the 2epartment o Labor and *mployment be ore $hom such dispute is pending that the termination may cause a serious labor dispute or is in implementation o a mass lay0o . (As amended by 3A AB1;) a. S'&sta"tia% E8i e"6e La&!r )! e Art. 2;>. Se6'rit$ !( te"'re. &n cases o regular employment% the employer shall not terminate the ser'ices o an employee e#cept or a +ust cause or $hen authori"ed by this !itle. An employee $ho is un+ustly dismissed rom $or( shall be entitled to reinstatement $ithout loss o seniority rights and other pri'ileges and to his ull bac($ages% inclusi'e o allo$ances% and to his other bene its or their monetary e)ui'alent computed rom the time his compensation $as $ithheld rom him up to the time o his actual reinstatement. (As amended by 9ection 5.% 3epublic Act 7o. AB1;% March 21% 1:C:) )ase/ Sa%8a !r 8s. P#i%. 0i"i"- Ser8i6es )!r. 23A> S)RA ;2>4 FA)TS/ 869* F. 9ALFA263 $as irst employed by respondent in 1:C1. -e rose rom the ran(s and assumed the position o 1lant &nspection ,oreman in 1::1. -e $as tas(ed to: (1) super'ise plant e)uipment and acility inspectionD (2) con irm actual de ectsD (5) establish inspection standards and re)uencyD (.) analy"e troubles and recommend counter measuresD and (;) prepare $ee(lyPmonthly inspection schedule.J5K As early as March 1% 1:C;% respondent instituted the ?shi t boss@ scheme $hereby the oreman rom the

1lant 9ection and the oreman rom the Mining 9ection rotate as shi t boss throughout their night shi t to o'ersee and super'ise both the mining and plant operations. !he shi t boss $as entrusted $ith the care% super'ision and protection o the entire plant. Aside rom his employment $ith respondent% petitioner co0o$ned and managed L-60!AB *nterprises% $ith his partner 6ndo Alcantara. !hey $ere engaged in the manu acture and sale o hollo$ bloc(s. 6n 9eptember 2:% 1::B% petitioner<s employment relation $ith respondent $as tainted $ith charges o pil erage and 'iolation o company rules and policy% resulting to loss o con idence. 3espondent<s e'idence disclose that on 9eptember 2:% 1::B% at about ::5/ a.m.% Mo+i 9a$a% respondent<s Assistant 3esident Manager or Administration% $as on his $ay bac( to his o ice in the plant. -e and his dri'er% 3oberto >resones% sa$ petitioner operating respondent<s payloader% scooping ine ore rom the stoc(pile and loading it on his pri'ate cargo truc(. As the truc( $as bloc(ing the access road leading to the stoc(yard<s gate% 9a$a<s car stopped near the stoc(pile and the dri'er ble$ the horn thrice. 1etitioner did not hear him because o the noise emanating rom his operation o the payloader. 9a$a<s dri'er ound a chance to pass through $hen the payloader maneu'ered to get another scoop rom the ine ore stoc(pile. As it $as contrary to respondent<s standard operating procedure or the plant oreman to operate the payloader% 9a$a $ent to the administration o ice to chec( the deli'ery receipt co'ering the loading operation o petitioner that morning. -o$e'er% sales0 in0charge *duardo >uangco $as in the $har % o'erseeing the loading o respondent<s product. -ence% it $as only in the a ternoon that 9a$a $as able to 'eri y the deli'ery receipt co'ering petitioner<s loading transaction. !he deli'ery receipt sho$ed that it $as dolomite spillage that $as purchased by buyer 6ndo Alcantara% not the ine ore that he sa$ petitioner loading on his truc(. !he receipt also sho$ed it $as not the respondent but Alcantara% the buyer% $ho $as responsible or loading the spillage he purchased rom the plant. 6n the basis o the oregoing acts 1M9C terminated 9al'ador or pil erage o company property. Labor Arbiter and 7L3C ruled in a'or o 9al'ador but CA re'ersed. -ence% this recourse. ISSUES: 1. 467 the charge o pil erage against petitioner $as supported by substantial e'idence to $arrant his dismissal rom the ser'ice.

B; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

2. 467 the employer $as $ell $ithin its rights in imposing a harsh penalty considering the length o the employee<s ser'ice 1EL, 1. G*9% (atio# !he settled rule in administrati'e and )uasi0+udicial proceedings is that proo beyond reasonable doubt is not re)uired in determining the legality o an employer<s dismissal o an employee% and not e'en a preponderance o e'idence is necessary as substantial e'idence is considered su icient. 9ubstantial e'idence is more than a mere scintilla o e'idence or rele'ant e'idence as a reasonable mind might accept as ade)uate to support a conclusion% e'en i other minds% e)ually reasonable% might concei'ably opine other$ise. !hus% substantial e'idence is the least demanding in the hierarchy o e'idence. (easoning - !he Labor Code pro'ides that an employer may terminate the ser'ices o an employee or +ust cause and this must be supported by substantial e'idence. &n the case at bar% our e'aluation o the e'idence o both parties indubitably sho$s that petitioner<s dismissal or loss o trust and con idence $as duly supported by substantial e'idence. 2. 76 (atio As a general rule% employers are allo$ed $ider latitude o discretion in terminating the employment o managerial employees as they per orm unctions $hich re)uire the employer<s ull trust and con idence. (easoning# !o be sure% length o ser'ice is ta(en into consideration in imposing the penalty to be meted an erring employee. -o$e'er% the case at bar in'ol'es dishonesty and pil erage by petitioner $hich resulted in respondent<s loss o con idence in him. Hnli(e other +ust causes or dismissal% trust in an employee% once lost is di icult% i not impossible% to regain. Moreo'er% petitioner $as not an ordinary ran(0and0 ile employee. -e occupied a high position o responsibility. As oreman and shi t boss% he had o'er0all control o the care% super'ision and operations o respondent<s entire plant. &t cannot be o'er0emphasi"ed that there is no substitute or honesty or sensiti'e positions $hich call or utmost trust. ,airness dictates that respondent should not be allo$ed to continue $ith the employment o petitioner $ho has breached the con idence reposed on him. 0 &n the case at bar% respondent has e'ery right to dismiss petitioner% a managerial employee% or breach o trust and loss o con idence as a measure o sel 0 preser'ation against acts patently inimical to its interests. &ndeed% in cases o this nature% the act that petitioner has been employed $ith the respondent or a long time% i to be considered at all% should be ta(en

against him% as his act o pil erage re lects a regrettable lac( o loyalty $hich he should ha'e strengthened% instead o betrayed. Disposition !he petition is 2*7&*2. Se8i%%a"a 8s. I.T. I"tQ%. )!r.. a" NLR) 2A.ri% 1:3 20014 O0AR O. SEVILLANA3 .etiti!"er3 8s. I.T. 2INTERNATIONAL4 )ORP.@SA0IR 0A,,A1 B TRAVELLERS INSURAN)E AN, SURETY )ORPORATION3 ,EPART0ENT OF LABOR AN, E0PLOY0ENT a" NATIONAL LABOR RELATIONS )O00ISSION 2Se6!" ,i8isi!"43 res.!" e"ts. FA)TS/ 1etitioner 6mar 9e'illana $as contracted to $or( as a dri'er by pri'ate respondent &.!. Corporation or its oreign accredited principal% 9amir Maddah% in 8eddah% 9audi Arabia. !he agreed monthly salary $as H9 V5B/.// or a period o t$o (2) years. 1etitioner alleged% ho$e'er% that $hen he recei'ed his salaries rom his employer% he $as only paid H9 V1//.// a month or t$el'e (12) months% instead o the agreed H9 V5B/.// per month. 6n 7o'ember 2% 1:CC% a ter $or(ing t$el'e (12) months $ith his employer% petitioner said that he $as repatriated $ithout any 'alid and +usti iable reason. 1etitioner shouldered the cost o his return air are in the amount o H9 VA5/.//. 1etitioner iled a complaint $ith the 16*A% or underpayment o salaries% illegal dismissal% reimbursement o return air are% moral damages and attorneyQs ees against & .! . Corporation% 9amir Maddah and !ra'ellers &nsurance and 9urety Corporation. 1ri'ate respondent & .! . denied the material allegations o the petitioner but admitted that the petitioner $as one o se'eral $or(ers it deployed and employed abroad. & .! . argued that the petitioner continuously $or(ed $ith 9amir or more than one (1) year until his blood pressure $as considered critical. !hus% 9amir $as orced to closely monitor the health condition o the petitioner. 4hen petitionerQs blood pressure did not stabili"e and begun a ecting his $or( as dri'er due to re)uent headaches and di""iness% & .! . alleged that 9amir decided to repatriate the petitioner to a'oid urther in+ury and complication to his health. & .! . claimed that a ter the petitioner had recei'ed all the bene its accorded to an employee consisting o ull salaries and separation pay% the petitioner re used to be repatriated and instead decided to run a$ay. 9ince then% the $hereabouts o the petitioner $ere un(no$n and & .! . only heard about the petitioner $hen the latter reported to their o ice in the 1hilippines and later on

BA E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

iled the sub+ect complaint Ad+udication 6 ice.

be ore

the

16*A

16*A Ad+udication 6 ice rendered a decision holding the pri'ate respondents herein +ointly and se'erally liable to the petitioner. 6nly pri'ate respondent &.!. appealed the a oresaid decision o the 16*A Ad+udication 6 ice to the 7L3C 9econd 2i'ision $hich in turn re'ersed and set aside the indings and ruling o the ormer . ISSUE/ 4-*!-*3 63 76! !-* 1HBL&C 3*91672*7! *33*2 &7 -6L2&7> !-A! !-* C6M1LA&7A7!01*!&!&67*3 4A9 76! &LL*>ALLG 2&9M&99*2. 1EL,/ 4e rule or the petitioner. 4hen the 7L3C declared that the burden o proo in dismissal cases shi ts to the employer only $hen the latter admits such dismissal% the 7L3C ruled erroneously in disregard o the la$ and pre'ailing +urisprudence on the matter. I7rticle :>>5'6 of the +a'or %ode puts the 'urden of proving that the dismissal of an employee #as for a valid or authori@ed cause on the employer. 0t should 'e noted that the said provision of la# does not distinguish #hether the employer admits or does not admit the dismissal. &t is clear that petitioner $as illegally dismissed by pri'ate respondent 9amir Maddah.I !ime and again $e ha'e ruled that $here there is no sho$ing o a clear% 'alid and legal cause or termination o employment% the la$ considers the case a matter o illegal dismissal. T#e &'r e" is !" t#e em.%!$er t! .r!8e t#at t#e termi"ati!" !( em.%!$me"t ?as (!r a 8a%i a" %e-a% 6a'se. ,or an employeeQs dismissal to be 'alid% (a) the dismissal must be or a 'alid cause and (b) the employee must be a orded due process. A re'ie$ o the record sho$s that neither o the t$o (2) conditions precedent $ere sho$n to ha'e been complied $ith by the pri'ate respondents. All that pri'ate respondent & .! . did $as to rely on its claim that petitioner $as repatriated by its oreign principal% respondent 9amir Maddah% due to hypertension $ith nary an e'idence to support it. &n all termination cases% strict compliance by the employer $ith the demands o both procedural and substanti'e due process is a condition sine )ua non or the same to be declared 'alid. Hnder 9ection C% 3ule &% Boo( F& o the 3ules and 3egulations &mplementing the Labor Code% or a disease to be a 'alid ground or the dismissal o the employee% the continued employment o such employee is prohibited by la$ or

pre+udicial to his health or the health o his co0 employees% there must be a certi ication by a competent public health authority that the disease is o such nature or at such a stage that it cannot be cured $ithin a period o si# (A) months% e'en $ith proper medical treatment. !he de ense o complainantQs medical problems (alleged hypertension o complainant) interposed by respondents to +usti y the dismissal o the ormer is totally bere t o merit. !he said de ense o respondents is not only uncorroborated by documentary e'idence but is also not a +ust or 'alid cause or termination o oneQs employment. 4hile an employer (respondents in this case) may 'alidly terminate the ser'ices o an employee $ho has been ound to be su ering rom any disease% it is authori"ed only i his continued employment is prohibited by la$ or is pre+udicial to his health as $ell as to the health o his co0employees (Art. 2C.% Labor Code). !his is not present in the instant case% or there is no inding rom a medical practitioner certi ying that complainant is really hypertensi'e.I 9ince the burden o pro'ing the 'alidity o the dismissal o the employee rests on the employer% the latter should li(e$ise bear the burden o sho$ing that the re)uisites or a 'alid dismissal due to a disease ha'e been complied $ith. &n the absence o the re)uired certi ication by a competent public health authority% this Court has ruled against the 'alidity o the employeeQs dismissal. &t is there ore incumbent upon the pri'ate respondents to pro'e by the )uantum o e'idence re)uired by la$ that petitioner $as not dismissed% or i dismissed% that the dismissal $as not illegalD other$ise% the dismissal $ould be un+usti ied. !his Court $ill not sanction a dismissal premised on mere con+ectures and suspicions% the e'idence must be substantial and not arbitrary and must be ounded on clearly established acts su icient to $arrant his separation rom $or(. 4e ind no cogent reason to depart rom the conclusion reached by the 16*A Ad+udication 6 ice in the case at bar. &n all termination cases% stri6t 6!m.%ia"6e &$ t#e em.%!$er ?it# t#e ema" s !( &!t# .r!6e 'ra% a" s'&sta"ti8e 'e .r!6ess is a condition sine )ua non or the same to be declared 'alid. 4here there is no sho$ing o a clear% 'alid and legal cause or termination o employment% the la$ considers the case a matter o illegal dismissal. !he burden is on the employer to pro'e that the termination o employment $as or a 'alid and legal cause. ,or an employee<s dismissal to be 'alid% (a) the dismissal must be or a 'alid cause and (b) the employee must

BB E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

be a orded due process. (9e'illana 's. &.!. Corp. and 7L3C) 0i%%ares 8s. PL,T 20a$ :3 200A4 !he standard o substantial e'idence is satis ied $here the employer has reasonable ground to belie'e that the employee is responsible or the misconduct and his participation therein renders him un$orthy o trust and con idence demanded by his position. -ere% the 9C inds that there is substantial e'idence to support the indings o the CA that petitioner<s dismissal rom the ser'ice is 'alid. 4ell0entrenched is the rule that substantial proo is su icient as basis or the imposition o ay disciplinary action upon the employee. !hat petitioner 'iolated responded 1L2!<s rules and regulations and committed serious misconduct in the per ormance o his duties% ha'e been pro'ed by Celestina &gnacio. 3espondent thus lost its trust and con idence in petitioner. U" er Arti6%e 2<2 !( t#e La&!r )! e3 as ame" e 3 t#ese are I'st 6a'ses (!r ismissi"- #im (r!m t#e ser8i6e. P#i%trea Tire B R'&&er )!r.. 8s. A%&ert! Vi6e"te 9R N!. 142;A>3 N!8. 103 2004 S'&sta"tia% e8i e"6e is that amount o rele'ant e'idence $hich a reasonable mind might accept as ade)uate to +usti y a conclusion. &. ,'e Pr!6ess 2 N!ti6e ReJ'ireme"t4 ,'e .r!6ess 2Art 2;; 2&44 B Bi%% !( Ri-#ts 9ub+ect to the constitutional right o $or(ers to security o tenure and their right to be protected against dismissal e#cept or a +ust and authori"ed cause and $ithout pre+udice to the re)uirement o notice under Article 2C5 o this Code% the employer shall urnish the $or(er $hose employment is sought to be terminated a $ritten notice containing a statement o the causes or termination and shall a ord the latter ample opportunity to be heard and to de end himsel $ith the assistance o his representati'e i he so desires in accordance $ith company rules and regulations promulgated pursuant to guidelines set by the 2epartment o Labor and *mployment. Any decision ta(en by the employer shall be $ithout pre+udice to the right o the $or(ers to contest the 'alidity or legality o his dismissal by iling a complaint $ith the regional branch o the 7ational Labor 3elations Commission. !he burden o pro'ing that the termination $as or a 'alid or authori"ed cause shall rest on the employer. !he 9ecretary o the 2epartment o Labor and

*mployment may suspend the e ects o the termination pending resolution o the dispute in the e'ent o a prima acie inding by the appropriate o icial o the 2epartment o Labor and *mployment be ore $hom such dispute is pending that the termination may cause a serious labor dispute or is in implementation o a mass layo . Bi%% !( Ri-#ts 9ection 1% Article &&&% 1:CB Constitution <2o person shall be deprived of life, liberty and property without due process of law.= N.ri!r "!ti6e a" #eari"-O B 30 a$ .ri!r "!ti6e r'%e - !he employer must urnish the $or(er $ith 2 ?ritte" "!ti6es &e(!re termi"ati!" !( em.%!$me"t can be legally e ected. 1. !he notice to apprise the employee o the particular acts or omissions or $hich his dismissal is sought. 2. !he notice in orming the employee o the employer<s decision to dismiss him. Termi"ati!" !( (i5e term em.%!$ee - i the termination $as brought about by the completion o the contract or phase thereo % no prior notice is re)uired. ,ismissa% !( .r!&ati!"ar$ em.%!$ees- i the termination is brought about by the ailure o an employee to meet the standards o the employer in the case o probationary employment% it shall be su icient that a $ritten notice be ser'ed the employee $ithin a reasonable time rom the e ecti'e date o termination. )ases/ S#!...es 0a"i%a I"6. 8s. NLR) 27a". 143 20044 FA)TS/ 9hoppes Manila is a domestic corporation engaged in garments manu acturing using the brand name ?H7M0)ET7.@ 6n May A% 1::.% the petitioner employed pri'ate respondent Lorie !orno as trimmer &n April 1::B the pri'ate respondent and a co0employee% Maricar Buan% $ere tas(ed to handle the in'entory o inished products. 9hoppes Manila recei'ed in ormation rom the head o its production department that Buan and the pri'ate respondent had been stealing ? H7M0)ET7@ items rom the actory. 6n 8uly 5/% 1::B% the pri'ate respondent<s super'isor% Ms. Myrasol 6. 9il'a% conducted the

BC E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

inspection and submitted a report to the e ect that she ound Mamiseta property in !orno<s residence. 9hoppes Manila issued a disciplinary action orm suspending the pri'ate respondent inde initely $ithout pay. 6n August 2;% 1::B% a notice o dismissal $as addressed to the pri'ate respondent speci ying the charge against her. !orno ailed to appear during the scheduled hearing. Conse)uently% the petitioner decided to dismiss the pri'ate respondent rom her employment. 2espite mandatory con erences% the parties did not reach an amicable settlement. &n due course% the parties submitted their respecti'e position papers and replies. !he petitioner iled a motion or the labor arbiter to conduct a ormal in'estigation on its claim that a ull blo$n hearing during $hich the $itnesses can be cross0e#amined by the opposing counsel $as necessary to ascertain the truth. LA !umanong (labor arbiter gi'en +urisdiction o'er the case) $as replaced by LA Cuyuca $ho issued an order declaring that the case $as submitted or decision. !he petitioner iled a mani estation and motion in orming LA Cuyuca that a ormal hearing had been set by LA !umanong and re)uested that the case be set or hearing ane$. -o$e'er% no action $as ta(en by LA Cuyuca on the said motion. &n August 1::C LA Cayuca rendered a decision in a'or o !orno% holding that she $as illegally dismissed. LA Cuyuca declared that the pri'ate respondent $as denied o her right to due process be ore she $as dismissed rom her employment and that the petitioner ailed to sho$ that it noti ied the pri'ate respondent o the charges against her. 0 9hoppes Manila appealed to the 7L3C% arguing that LA Cuyuca<s ailure to conduct a hearing depri'ed the petitioner o its 'ested rightD conse)uently% her decision $as null and 'oid. 7L3C dismissed the appeal. "etitioners *laim 0 4hen LA !umanong agreed to conduct a ormal hearing o the case and% indeed% set the case or hearing% the petitioner thence orth ac)uired a 'ested right. ISSUE/ 467 9hoppes Manila had a 'ested right to a ormal hearing because the irst labor arbiter granted its motion (!his case is under 1osition 1aper as ,e8uirement in the outline) 1EL,/ 76% 9hoppes Manila is not entitled to said right.

(atio !he holding o a ormal hearing or trial is discretionary $ith the labor arbiter and is something that the parties cannot demand as a matter o right. - T#e reJ'ireme"ts !( 'e .r!6ess are satis(ie ?#e" t#e .arties are -i8e" t#e !..!rt'"it$ t! s'&mit .!siti!" .a.ers ?#erei" t#e$ are s'..!se t! atta6# a%% t#e !6'me"ts t#at ?!'% .r!8e t#eir 6%aim i" 6ase it &e e6i e t#at "! #eari"- s#!'% &e 6!" '6te !r ?as "e6essar$. (easoning# 1ursuant to 9ection ;% 3ule F o the 7e$ 3ules o 1rocedure o the 7L3C% the labor arbiter has the authority to determine $hether or not there is a necessity to conduct ormal hearings in cases brought be ore him or ad+udication. &t is entirely $ithin the authority o the labor arbiter to decide a labor case be ore him% based on the position papers and supporting documents o the parties% $ithout a trial or ormal hearing. !he order o LA !umanong granting the petitioner<s motion or a hearing o the case $as not conclusi'e and binding on LA Cuyuca $ho had the discretion either to hear the case be ore deciding it% or to orego $ith the hearing (i in her 'ie$% there $as no longer a need there ore as the case could be resol'ed on its merits based on the records). !he Court a irms the decision o the CA that !orno $as not legally dismissed. &n order to e ect a 'alid dismissal% the la$ re)uires that (a) there be +ust and 'alid cause as pro'ided under Article 2C2 o the Labor CodeD and (b) the employee be a orded an opportunity to be heard and to de end himsel . 9hoppes Manila had ailed to sho$ that it had complied $ith the t$o0notice re)uirement: (a) a $ritten notice containing a statement o the cause or the termination to a ord the employee ample opportunity to be heard and de end himsel $ith the assistance o his representati'e% i he so desiresD (b) i the employer decides to terminate the ser'ices o the employee% the employer must noti y him in $riting o the decision to dismiss him% stating clearly the reason there or. Disposition 1etition is dismissed% and decision o CA is a irmed. Va%ia! 8s. )A 9R N!. 14::213 7'%$ 303 2004 FA)TS/ 1etitioner Faliao $as appointed by pri'ate respondent 4est 7egros College (47C) as 9tudent A airs 6 ice (9A6) 2irector% $ith a starting salary o 12%C// per month. 9ubse)uently% he $as assigned as Acting 2irector% Alumni A airs 6 ice. -e $as trans erred to sta position and designated as 3ecords Chie at the 3egistrar<s 6 ice but $as again re0assigned as a typist. !he latest reassignment $as due to his tardiness and absences% as re lected in the

B: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

summary o tardiness and absences report% $hich sho$ed him to ha'e been absent or late or $or( rom a minimum o se'en to ma#imum o B; minutes or the period March to 6ctober 51% 1::1 and to ha'e reported late almost e'ery day or the period 7o'ember to 2ecember 1::1. Copies o his tardinessPabsences reports $ere urnished petitioner% along $ith memoranda re)uiring him to e#plain but his e#planations $ere either unacceptable or unsatis actory. 9ubse)uently% reports also sho$ed that he did not change his habits resulting in tardiness and absences. -e $as e'en caught one time manipulating the bundy cloc(% thus necessitating another memorandum to him as(ing him to e#plain his dishonest actuations in accomplishing the daily attendance logboo( and in using the bundy cloc(. -e recei'ed a suspension order $ithout pay or i teen days because o dishonesty in reporting his actual attendance. -e reported bac( to o ice a ter ser'ing the suspension but $as another ad'erse report on tardiness and absences $as made against the petitioner% prompting 47C to send him another memorandum $ith an attached tardiness and absences report. 1etitioner sent a letter o appeal and e#plained his side to the ne$ college president $ho ga'e petitioner another chance. !he petitioner $as appointed as &n ormation Assistant e ecti'e immediately. -o$e'er% petitioner did not promptly assume his post% prompting the president to call his attention. 9ubse)uently% 47C $on a case against the o icial o the union be ore the 7L3C. 1etitioner $as ordered to prepare a media blit" o this 'ictory but the petitioner did not comply $ith the order on the ground that such a press release $ould only $orsen the aggra'ated situation and strained relations bet$een 47C management and the union o icials. 4hen petitioner reported or $or( on the irst day o 8anuary 1::5% he $as relie'ed rom his post and trans erred to the College o Liberal Arts as 3ecords *'aluator. 7ot or long% the 2ean o the Liberal Arts sent a letter to the -uman 3esources Manager complaining about the petitioner<s poor per ormance and habitual absenteeism as sho$n in the daily absence reports. 0 6n 8anuary 1C% 1::5% petitioner $as again absent rom $or( $ithout permission or notice to his immediate superior. &t turned out that he $ent to Bacolod City and on 8anuary 2C% 1::5% the petitioner $as one o those arrested during a raid in the house o ?!oto 3ui"%@ a suspected drug pusher and $as brought to the Bacolod 1olice 9tation along $ith our other suspects. !he petitioner and other suspects $ere then charged $ith 'iolation o the 2angerous 2rugs Act o 1:B2.

1etitioner $as as(ed to e#plain $ithin 2. hours $hy he should not be terminated as a result o the raid and charged against him or 'iolation o 3A 7o. A.2; as amended. 1etitioner $as dismissed or ailure to ans$er said memorandum. 9ubse)uently% he $rote to the president o 47C e#plaining his side and as(ing or due process. !he petitioner $as noti ied through a memorandum about the grant o his re)uest and that a hearing $ould be conducted. -e $as then placed under pre'enti'e suspension and an in'estigation committee $as organi"ed to conduct the probe. A notice o hearingPin'estigation $as sent to the petitioner. A ter the in'estigation attended by the petitioner and his counsel% $ith proceedings duly recorded% the in'estigation committee recommended the dismissal o petitioner. A notice o termination $as then sent to petitioner in orming him o his termination rom the ser'ice or serious misconduct and gross and habitual neglect o duty. !he petitioner recei'ed the notice but did not ile a grie'ance concerning the notice o termination. 1etitioner iled a complaint against 47C or illegal suspension% illegal dismissal bac($ages% salary di erential or salary increases and other bene its granted a ter his dismissal as $ell as or moral and e#emplary damages and attorney<s ees. A ter due proceedings% the Labor Arbiter ound no +usti iable reason to place the petitioner under pre'enti'e suspension as there $as no serious or imminent threat to the li e or property o his co$or(ers. -o$e'er% the Labor Arbiter ound the dismissal o the petitioner to be 'alid due to absenteeism and tardiness and a ter he $as accorded the procedural due process aspect o the la$ as re lected in the records sho$ing that petitioner $as ormally in'estigated and gi'en the opportunity to re ute the alleged indings by the management o 47C. !he Labor Arbiter held that re)uent absenteeism and tardiness o the petitioner constituted not only $ill ul disobedience but also gross and habitual neglect o duties% $hich are 'alid grounds or termination o employment. -e stressed that petitioner<s re)uent absences $ithout proper lea'e o absence $as not only un air to 47C and the petitioner<s co0employees but also set an undesirable e#ample to the employees under his super'ision% considering that the petitioner $as not a mere ran(0and0 ile employee but one $ho o$ed more than the usual ealty to the organi"ation. 0 6n appeal to the 7L3C% the latter a irmed the decision o the Labor Arbiter% sustained the latter<s indings o acts% and made its o$n indings o the apprehension o the petitioner or possession o prohibited drugs. 1etitioner then iled a 1etition or

C/ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

Certiorari under 3ule A; be ore the CA but this $as dismissed or lac( o merit. 1etitioner duly iled a Motion or 3econsideration% $hich $as denied by the CA. ISSUE/ 467 petitioner $as 'alidly dismissed rom employment on the ground o serious misconduct and gross habitual neglect o duties% including habitual tardiness and absenteeism 1EL,/ G*93 9o irresponsible an employee li(e petitioner does not deser'e a place in the $or(place% and it is $ithin the management<s prerogati'e o 47C to terminate his employment. *'en as the la$ is solicitous o the $el are o employees% it must also protect the rights o an employer to e#ercise $hat are clearly management prerogati'es. As long as the company<s e#ercise o those rights and prerogati'es is in good aith to ad'ance its interest and not or the purpose o de eating or circum'enting the rights o employees under the la$s or 'alid agreements% such e#ercise $ill be upheld. T#e esse"6e !( 'e .r!6ess is sim.%$ a" !..!rt'"it$ t! &e #ear 3 !r as a..%ie t! a mi"istrati8e .r!6ee i"-s3 a" !..!rt'"it$ t! e5.%ai" !"eQs si e !r a" !..!rt'"it$ t! seeE a re6!"si erati!" !( t#e a6ti!" !r r'%i"6!m.%ai"e !(. A ormal or trial0type hearing is not at all times and in all instances essential% as the due process re)uirements are satis ied $here the parties are a orded air and reasonable opportunity to e#plain their side o the contro'ersy at hand. W#at is (r!?"e '.!" is t#e a&s!%'te %a6E !( "!ti6e a" #eari"-. Disposition Assailed decision a irmed $ith modi ication and resolution

a penalty or committing an in raction. !hat decision shall be stated on said &rregularity 3eport and $ill be urnished to the employee. Hpon audit o the 6ctober 2C% 2//1 ConductorQs 3eport o respondent% MM!& noted an irregularity. &t disco'ered that respondent declared se'eral sold tic(ets as returned tic(ets causing MM!& to lose an income o eight hundred and ninety pesos. 4hile no irregularity report $as prepared on the 6ctober 2C% 2//1 incident% MM!& ne'ertheless as(ed respondent to e#plain the discrepancy. &n his letter% respondent said that the erroneous declaration in his 6ctober 2C% 2//1 !rip 3eport $as unintentional. -e e#plained that during that dayQs trip% the $indshield o the bus assigned to them $as smashedD and they had to cut short the trip in order to immediately report the matter to the police. As a result o the incident% he got con used in ma(ing the trip report. 6n 7o'ember 2A% 2//1% respondent recei'ed a letter terminating his employment e ecti'e 7o'ember 2:% 2//1. !he dismissal letter alleged that the 6ctober 2C% 2//1 irregularity $as an act o raud against the company. MM!& also cited as basis or respondentQs dismissal the other o enses he allegedly committed since 1:::. 3espondent iled a Complaint or illegal dismissal% illegal deductions% nonpayment o 15th0month pay% ser'ice incenti'e lea'e% and separation pay. -e denied committing any in raction and alleged that his dismissal $as intended to bust union acti'ities. Moreo'er% he claimed that his dismissal $as e ected $ithout due process. MM!& contended that respondent $as legally dismissed a ter his commission o a series o misconducts and misdeeds. &t claimed that respondent had 'iolated the trust and con idence reposed upon him by MM!&. Also% it a'erred that it had obser'ed due process in dismissing respondent and maintained that respondent $as not entitled to his money claims such as ser'ice incenti'e lea'e and 15th0month pay because he $as paid on commission or percentage basis. Iss'e/ 4hether or not procedural re)uirements $ere complied $ith. R'%i"-/ ,'e .r!6ess '" er t#e La&!r )! e i"8!%8es t?! as.e6ts/ (irst3 s'&sta"ti8e P t#e 8a%i a" a't#!ri*e 6a'ses !( termi"ati!" !( em.%!$me"t '" er t#e La&!r )! eC a" se6!" 3 .r!6e 'ra% P t#e ma""er !( ismissa%.

+i"- !( +i"-s Tra"s.!rt 8s. Sa"tia-! 0ama6 9R N!. 1::20<37'"e 2>3 200; Fa6ts/ 3espondent Mamac $as hired as bus conductor o 2on Mariano !ransit Corporation (2M!C) on April 2:% 1:::. 3espondent $as re)uired to accomplish a IConductorQs !rip 3eportI and submit it to the company a ter each trip. As a bac(ground% this report indicates the tic(et opening and closing or the particular day o duty. A ter submission% the company audits the reports. 6nce an irregularity is disco'ered% the company issues an I&rregularity 3eportI against the employee% indicating the nature and details o the irregularity. !herea ter% the concerned employee is as(ed to e#plain the incident by ma(ing a $ritten statement or counter0a ida'it at the bac( o the same &rregularity 3eport. A ter considering the e#planation o the employee% the company then ma(es a determination o $hether to accept the e#planation or impose upon the employee

C1 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

N!"-6!m.%ia"6e ?it# t#e ,'e Pr!6ess ReJ'ireme"ts 9*C. 2. 9tandards o due processD re)uirements o notice. &n all cases o termination o employment% the ollo$ing standards o due process shall be substantially obser'ed: &. F!r termi"ati!" !( em.%!$me"t &ase !" I'st 6a'ses as e(i"e i" Arti6%e 2<2 o the Code: (a) A $ritten notice ser'ed on the employee speci ying the ground or grounds or termination% and gi'ing said employee reasonable opportunity $ithin $hich to e#plain his side. (b) A hearing or con erence during $hich the employee concerned% $ith the assistance o counsel i he so desires is gi'en opportunity to respond to the charge% present his e'idence% or rebut the e'idence presented against him. (c) A $ritten notice o termination ser'ed on the employee% indicating that upon due consideration o all the circumstances% grounds ha'e been established to +usti y his termination. &n case o termination% the oregoing notices shall be ser'ed on the employeeQs last (no$n address. !o clari y% the ollo$ing should be considered in terminating the ser'ices o employees: (1)!he irst $ritten notice to be ser'ed on the employees should contain the speci ic causes or grounds or termination against them% and a directi'e that the employees are gi'en the opportunity to submit their $ritten e#planation $ithin a reasonable period. D,easona'le opportunityD under the 6mnibus 3ules means e'ery (ind o assistance that management must accord to the employees to enable them to prepare ade)uately or their de ense. !his should be construed as a period of at least five 5B6 calendar days from receipt of the notice to gi'e the employees an opportunity to study the accusation against them% consult a union o icial or la$yer% gather data and e'idence% and decide on the de enses they $ill raise against the complaint. Moreo'er% in order to enable the employees to intelligently prepare their e#planation and de enses% the notice should contain a detailed narration o the acts and circumstances that $ill ser'e as basis or the charge against the employees. A general description o the charge $ill not su ice. Lastly% the notice should speci ically mention $hich company rules% i any% are 'iolated andPor $hich among the grounds under Art. 2C2 is being charged against the employees.

(2)A ter ser'ing the irst notice% the employers should schedule and conduct a hearing or con erence $herein the employees $ill be gi'en the opportunity to: (1) e#plain and clari y their de enses to the charge against themD (2) present e'idence in support o their de ensesD and (5) rebut the e'idence presented against them by the management. 2uring the hearing or con erence% the employees are gi'en the chance to de end themsel'es personally% $ith the assistance o a representati'e or counsel o their choice. Moreo'er% this con erence or hearing could be used by the parties as an opportunity to come to an amicable settlement. (5)A ter determining that termination o employment is +usti ied% the employers shall ser'e the employees a $ritten notice o termination indicating that: (1) all circumstances in'ol'ing the charge against the employees ha'e been consideredD and (2) grounds ha'e been established to +usti y the se'erance o their employment. &n the instant case% MM!& admits that it had ailed to pro'ide respondent $ith a Icharge sheet.I -o$e'er% it maintains that it had substantially complied $ith the rules% claiming that Irespondent $ould not ha'e issued a $ritten e#planation had he not been in ormed o the charges against him.I 4e are not con'inced. ,irst% respondent $as not issued a $ritten notice charging him o committing an in raction. !he la$ is clear on the matter. A 'erbal appraisal o the charges against an employee does not comply $ith the irst notice re)uirement. &n 1epsi Cola Bottling Co. '. 7L3C% the Court held that consultations or con erences are not a substitute or the actual obser'ance o notice and hearing. 9econd% the Court obser'ed the irregularity reports against respondent or his other o enses that such contained merely a general description o the charges against him. !he reports did not e'en state a company rule or policy that the employee had allegedly 'iolated. Li(e$ise% there is no mention o any o the grounds or termination o employment under Art. 2C2 o the Labor Code. !hus% MM!&Qs IstandardI charge sheet is not su icient notice to the employee. !hird% no hearing $as conducted. 3egardless o respondentQs $ritten e#planation% a hearing $as still necessary in order or him to clari y and present e'idence in support o his de ense. Moreo'er% respondent made the letter merely to e#plain the circumstances relating to the irregularity. -e $as

C2 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

una$are that a dismissal proceeding $as already being e ected. 9anction or 7on0compliance $ith 2ue 1rocess 3e)uirements. As stated earlier% a ter a inding that petitioners ailed to comply $ith the due process re)uirements% the CA a$arded ull bac($ages in a'or o respondent in accordance $ith the doctrine in 9errano '. 7L3C. -o$e'er% the doctrine in 9errano had already been abandoned in Agabon '. 7L3C by ruling that i the dismissal is done $ithout due process% the employer should indemni y the employee $ith nominal damages. !hus% or non0compliance $ith the due process re)uirements in the termination o respondentQs employment% petitioner MM!& is sanctioned to pay respondent the amount o thirty thousand pesos (1h15/%///) as damages. U"i?i e Sa%es Ware#!'se )%'& 8s. NLR) 9R NO. 1A4A03 Fe&. 2>3 200< 0t is not the denial of the right to 'e heard 'ut denial of the opportunity to 'e heard that constitutes violation of due process of la#. !he essence o due process is simply to be heard% or as applied to administrati'e proceedings% a air and reasonable opportunity to e#plain one<s side. &n this case% pri'ate respondent $as again noti ied o the August 12% 1::C hearing through a letter dated August C% 1::C $hich $as recei'ed by pri'ate respondent hersel . Clearly% pri'ate respondent $as gi'en an opportunity to be heard. -o$e'er% pri'ate respondent chose not to attend the schedule hearing because o her mista(en belie that she had already been constructi'ely dismissed. Fa6ts/ Amalia 1. Ma$ada is an employee o Hni$ide. 9ometime in 1::C% Hni$ide recei'ed reports rom the other employees regarding some problems in the departments managed by the pri'ate respondent. !hus% on March 1;% 1::C% Hni$ide% through 9tore Manager Apduhan% issued a Memorandum addressed to the pri'ate respondent summari"ing the 'arious reported incidents signi ying unsatis actory per ormance on the latter<s part $hich include the commingling o good and damaged items% sale o a 'oluminous )uantity o damaged toys and ready0to0 $ear items at unreasonable prices% and ailure to submit in'entory reports. Hni$ide as(ed pri'ate respondent or concrete plans on ho$ she can e ecti'ely per orm her +ob. 9he $as constantly being bombarded $ith memorandum see(ing to e#plain the reports o incidents. 9he $as unable to ans$er them. &t got to a point that she

$as being shouted at because o her unsatis actory per ormance. 6n August 2% 1::C% Apduhan issued a Memorandum recei'ed on the same day by *dgardo Ma$ada% the husband o pri'ate respondent% ad'ising the latter o a hearing scheduled on August 12% 1::C to be held at the Hni$ide 6 ice in Uuirino -igh$ay% and $arning her that ailure to appear shall constitute as $ai'er and the case shall be submitted or decision based on a'ailable papers and e'idence. 3espondent did not attend the hearing and $as terminated. 9he then iled or an illegal dismissal because she constructi'ely dismissed $hich is the reason or her ailure to attend the hearing. Iss'e/ 4as there constructi'e dismissal= 3espondent argues that since the in'estigation $as conducted a ter she $as constructi'ely dismissed. !here ore% according to her% there $as no point to still attend the in'estigation set on August 12% 1::C. -ence there $as denial o due process. 1e% / Case la$ de ines constructi'e dismissal as a cessation o $or( because continued employment is rendered impossible% unreasonable or unli(elyD $hen there is a demotion in ran( or diminution in pay or bothD or $hen a clear discrimination% insensibility% or disdain by an employer becomes unbearable to the employee. !he test o constructi'e dismissal is $hether a reasonable person in the employee<s position $ould ha'e elt compelled to gi'e up his position under the circumstances. &t is an act amounting to dismissal but made to appear as i it $ere not. &n act% the employee $ho is constructi'ely dismissed may be allo$ed to (eep on coming to $or(. Constructi'e dismissal is there ore a dismissal in disguise. !he la$ recogni"es and resol'es this situation in a'or o employees in order to protect their rights and interests rom the coerci'e acts o the employer. &n the present case% pri'ate respondent claims that rom the months o ,ebruary to 8une 1::C% she had been sub+ected to constant harassment% ridicule and inhumane treatment by Apduhan% $ith the hope that the latter can get the pri'ate respondent to resignK !he harassment allegedly came in the orm o successi'e memoranda $hich pri'ate respondent $ould recei'e almost e'ery $ee(% enumerating a litany o o enses and maligning her reputation and spreading rumors among the employees that pri'ate respondent shall be dismissed soon. !he last stra$ o the imputed harassment $as the 8uly 51% 1::C incident $herein pri'ate respondent<s li e $as put in danger $hen she lost consciousness due to hypertension as a

C5 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

result o Apduhan<s alleged hostility and shouting. !he Court inds that pri'ate respondent<s allegation o harassment is a specious statement $hich contains nothing but empty imputation o a act that could hardly be gi'en any e'identiary $eight by this Court. 1ri'ate respondent<s bare allegations o constructi'e dismissal% $hen uncorroborated by the e'idence on record% cannot be gi'en credence. 0 2.) !he termination o pri'ate respondent $as grounded on the e#istence o +ust cause under Article 2C2 (c) o the Labor Code or $ill ul breach by the employee o the trust reposed on him by his employer or a duly authori"ed representati'e. 1ri'ate respondent occupies a managerial position. As a managerial employee% mere e#istence o a basis or belie'ing that such employee has breached the trust o his employer $ould su ice or his dismissal. ROLAN,O PLA)I,O a" E,9AR,O )ARA9AY3 Vs. NLR) a" PL,T3 IN)3 9.R. N!. 1<0<<<3 Se.t. 1<3 200> Fa6ts/ 1etitioners 1lacido and Caragay had been employed as cable splicers by 1L2!. 1L2! had been recei'ing reports o the t and destruction o its cables. 1L2! inspector and security guard% responding to a report that cables $ere being stripped and burned in one o the residences% proceeded to the said area $here they sa$ petitioners< ser'ice 'ehicle par(ed in ront o the house. 1etitioners $ere seen stripping and burning cables inside the compound o the house $hich turned out to belong to Caragay<s mother. 4ith the assistance o police and barangay o icials% 1L2! reco'ered the cables bearing the I1L2!I mar(ing. 1L2! iled an &n ormation or Uuali ied !he t against petitioners. 1L2! also re)uired petitioners to e#plain $ithin B2 hours $hy no se'ere disciplinary action should be ta(en against them or 9erious Misconduct and 2ishonesty. 1etitioners submitted a +oint e#planation denying the charges against them. By their claim% they $ere on their $ay bac( rom the house o one Uue"ada rom $hom they $ere in)uiring about a 'ehicle $hen they $ere detained by the 1L2! in'estigator. 6n petitioners< re)uest% a ormal hearing $as scheduled. !heir re)uest or a copy o the 9ecurity &n'estigation $as denied% ho$e'er% on the ground that they are only entitled to Ibe in ormed o the charges% and they cannot demand or the report as it is still on the con idential stage.

1etitioners< counsel later reiterated the re)uest or a setting o a hearing and an audiotape o the 8une 2;% 2//1 hearing% but the same $as denied. A third time re)uest or another hearing $as li(e$ise denied. 1L2! sent notices o termination to petitioners% prompting them to ile a complaint or illegal dismissal be ore the Labor Arbiter. Labor Arbiter held that petitioners $ere illegally dismissed $hich $as re'ersed by the 7L3C. 1ettitioners appealed to CA $hich a irmed the 7L3C 2ecision holding that since the cables bore the I1L2!I mar(ing% they $ere presumed to be o$ned by 1L2!% hence% the burden o e'idence shi ted on petitioners to pro'e that they $ere no longer o$ned by 1L2!% but they ailed. Iss'e/ 467 petitioners $ere denied due process and $ere illegally dismissed R'%i"-/ 7o% petitioners $ere not denied due process. !hey $ere legally dismissed. Article 2BB o the Labor Code pro'ides: (b) 9ub+ect to the constitutional right o $or(ers to security o tenure and their right to be protected against dismissal e#cept or a +ust or authori"ed cause and $ithout pre+udice to the re)uirement o notice under Article 2C5 o this Code% the employer shall urnish the $or(ers $hose employment is sought to be terminated a $ritten notice containing a statement o the causes or termination and shall a ord the latter ample opportunity to be heard and de end himsel $ith the assistance o his representati'e i he so desires in accordance $ith company rules and regulations promulgated pursuant to the guidelines set by the 2epartment o Labor and *mployment. Any decision ta(en by the employer shall be $ithout pre+udice to the right o the $or(er to contest the 'alidity or legality o his dismissal by iling a complaint $ith the regional branch o the 7ational Labor 3elations Commission. !he burden o pro'ing that the termination $as or a 'alid or authori"ed cause shall rest on the employer. And the 6mnibus 3ules &mplementing the Labor Code re8uire a hearing and conference during $hich the employee concerned is gi'en the opportunity to respond to the charge% and present his e'idence or rebut the e'idence presented against him. !hus 3ule &% 9ection 2(d)% pro'ides: Se6ti!" 2. $ecurity of Tenure. P (d) &n all cases o termination o employment% the ollo$ing standards o due process shall be substantially obser'ed:

C. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

,or termination o employment based on +ust causes as de ined in Article 2C2 o the Labor Code: (i) A $ritten notice ser'ed on the employee speci ying the ground or grounds or termination% and gi'ing said employee reasonable opportunity $ithin $hich to e#plain his side. (ii) A hearing or con erence during $hich the employee concerned% $ith the assistance o counsel i he so desires% is gi'en opportunity to respond to the charge% present his e'idence or rebut the e'idence presented against him. (iii) A $ritten notice o termination ser'ed on the employee% indicating that upon due consideration o all the circumstances% grounds ha'e been established to +usti y his termination. !he abo'e)uoted pro'ision o 9ection 2(d) should not 'e ta!en to mean% ho$e'er% that holding an actual hearing or conference is a condition sine 8ua non for compliance #ith the due process re8uirement in case of termination of employment. ,or the test or the air procedure guaranteed under the abo'e0)uoted Article 2BB(b) o the Labor Code is not $hether there has been a ormal pretermination con rontation bet$een the employer and the employee. !he Dample opportunity to 'e heardD standard is neither synonymous nor similar to a formal hearing. !o con ine the employee<s right to be heard to a solitary orm narro$s do$n that right. T#e essence of due process is sim.%$ a" !..!rt'"it$ t! &e #ear !r3 as a..%ie t! a mi"istrati8e .r!6ee i"-s3 a" !..!rt'"it$ t! e5.%ai" !"eMs si e !r a" !..!rt'"it$ t! seeE a re6!"si erati!" !( t#e a6ti!" !r r'%i"6!m.%ai"e !(. 4hat the la$ prohibits is absolute absence o the opportunity to be heard% hence% a party cannot eign denial o due process $here he had been a orded the opportunity to present his side. A ormal or trial type hearing is not at all times and in all instances essential to due process% the re)uirements o $hich are satis ied $here the parties are a orded air and reasonable opportunity to e#plain their side o the contro'ersy. &n the present case% petitioners $ere% among other things% gi'en se'eral $ritten in'itations to submit themsel'es to 1L2!<s &n'estigation Hnit to e#plain their side% but they ailed to heed them. A hearing $as conducted $here petitioners attended along $ith their union MM1 representati'es during $hich the principal $itnesses to the incident $ere presented. 1etitioners $ere thus a orded the opportunity to con ront those $itnesses and present e'idence in their behal % but they ailed to do so.

9C ound that as the cables bore the I1L2!I mar(ing% the presumption is that 1L2! o$ned them. !he burden o e'idence thus lay on petitioners to pro'e that they ac)uired the cables la$ ully but this they ailed to discharge. TE)1NOL EI91T P1ILIPPINES )ORPORATION 8s. NLR) B ,ENNIS A0ULAR3 9.R. N!. 1<;:0A3 A.ri% 133 2010 ,'e Pr!6essC termi"ati!". !he records belie Amular<s claim o denial o procedural due process. -e chose not to present his side at the administrati'e hearing. &n act% he a'oided the in'estigation into the charges against him by iling his illegal dismissal complaint ahead o the scheduled in'estigation. !hese acts sho$ that the employee $as gi'en the opportunity to be heard and he cannot no$ come to the Court protesting that he $as denied this opportunity. !o belabor a point the Court has repeatedly made in employee dismissal cases% the essence o due process is simply an opportunity to be heardD it is the denial o this opportunity that constitutes 'iolation o due process o la$. Technol Eight 1hilippines %orporation vs. National +a'or ,elations %ommission" et al." /.,. No. =G>;<B. 7pril =I" :<=<. OS)AR P. 9AR)IA a" ALEV V. 0ORALES 8s. 0ALAYAN INSURAN)E )O.3 IN). a" NLR).3 9.R. NO. 1:033> 0ar6# 143 200< BA)OLO,-TALISAY REALTY AN, ,EVELOP0ENT )ORPORATION3 8s. RO0EO ,ELA )RU=3 A<; S)RA 304 2200>4 9.R. N!. 1;>A:33 A.ri% 303 200> FA)TS/ 3omeo dela Cru" (respondent) is an employee o Bacolod0!alisay 3ealty 2e'elopment Corporation (Bacolod0!alisay) as an o'erseer. -e $as suspended or 5/ days or payroll paddling% selling canepoints $ithout the (no$ledge and consent o management and misappropriating the proceeds thereo % and renting out tractor or use in another arm. A ter 5/ days% he recei'ed a letter in orming him that he $as dismissed rom his $or(. 3espondent dela Cru" and Bacolod0!alisay had a con rontation be ore the barangay council but they did not reach any settlement. A case or illegal dismissal $as iled by dela Cru"% and it $as dismissed by the Labor Arbiter as $ell as the 7L3C. 6n the other hand% the Court o Appeals re'ersed the decision o the 7L3C inding that the Bacolor02alisay did not comply $ith the guidelines or the dismissal o an employee.

C; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

ISSUE/ 4hether or not petitioner% Bacolod0!alisay obser'ed due process in dismissing 3omeo dela Cru" 1EL,/ !he Court o Appeals correctly held though that Bacolod0!alisay did not comply $ith the proper procedure in dismissing respondent. &n other $ords% Bacolod0!alisay ailed to a ord dela Cru" due process by ailing to comply $ith the t$in notice re)uirement in dismissing him% 'i": 1) a irst notice to apprise him o his ault% and 2) a second notice to him that his employment is being terminated. !he letter dated 8une 5% 1::B sent to dela Cru" $as a letter o suspension. &t did not comply $ith the re)uired irst notice% the purpose o $hich is to apprise the employee o the cause or termination and to gi'e him reasonable opportunity to e#plain his side. &n ine% $hile the dismissal o dela Cru" $as or a +ust cause% the procedure in e ecting the same $as not obser'ed. ,UE PRO)ESS. !he Court o Appeals correctly held that petitioners did not comply $ith the proper procedure in dismissing respondent. &n other $ords% petitioners ailed to a ord respondent due process by ailing to comply $ith the t$in notice re)uirement in dismissing him% vi@: 51) a irst notice to apprise him o his ault% and (2) a second notice to him that his employment is being terminated. !he letter dated 8une 5% 1::B sent to respondent $as a letter o suspension. &t did not comply $ith the re)uired irst notice% the purpose o $hich is to apprise the employee o the cause or termination and to gi'e him rasonable opportunity to e#plain his side. !he con rontation be ore the 'arangay council did not constitute the irst notice to gi'e the employee ample opportunity to be heard $ith the assistance o counsel% i he so desires. -earings be ore the'arangay council do not a ord the employee ample opportunity to be represented by counsel i he so desires because 9ection .1; o the Local >o'ernment Code mandates that ?JiKn all !atarungang pam'arangay proceedings% the parties must appear in person $ithout the assistance o counsel or his representati'es% e#cept or minors and incompetents $ho may be assisted by their ne#t0 o 0(in $ho are not la$yers.@ !he re)uirement o gi'ing respondent the irst notice not ha'ing been complied $ith% discussions o $hether the second notice $as complied $ith is rendered unnecessary. &acolod Talisay (ealty and Development *orp., et al. vs. (omeo Dela *ru:3 9.R. N!. 1;>A:33 A.ri% 303 200>.

LYNVIL FIS1IN9 ENTERPRISES3 IN). a" @!r ROSEN,O S. ,E BOR7A3 8s. AN,RES 9. ARIOLA3 7ESSIE ,. AL)OVEN,AS3 7I00Y B. )ALINAO AN, LEOPOL,O 9. SEBULLEN3 9.R. N!. 1<1>;43 Fe&r'ar$ 13 2012 Fa6ts/ 1etitioner Lyn'il ,ishing *nterprises% &nc. (Lyn'il) is engaged in deep0sea ishing. 3espondents< ser'ices $ere engaged in 'arious capacities: Andres >. Ariola% captainD 8essie 2. Alco'endas% chie mateD 8immy B. Calinao% chie engineerD &smael >. 7ubla% coo(D *lorde BaYe"% oilerD and Leopoldo >. 9ebullen% bodegero. 6n Aug. 1% 1::C% Lyn'il recei'ed a report rom 3amonito Clarido% one o its employees% that on 8uly 51% 1::C% he $itnessed that $hile on board the company 'essel Analyn F&&&% respondents conspired $ith one another and stole eight tubs o ?pampano@ and ?tangigue@ ish and deli'ered them to another 'essel. 1etitioner iled a criminal complaint against respondents be ore the o ice o the City 1rosecutor o Malabon City $hich ound probable cause or indictment o respondents or the crime o )uali ied the t. 3elying on the inding and 7asipit Lumber Company '. 7L3C% 2;B 1hil. :5B (1:C:)% Lyn'il asserted there $as su icient basis or 'alid termination o employment o respondents based on serious misconduct andPor loss o trust and con idence. Iss'es/ 1. 4hether a inding o the city prosecutor o probable cause to indict employees o )uali ied the t is su icient basis or 'alid termination or serious misconduct andPor loss o trust or con idence= 2. 4hether the employees $ere 'alidly terminated= R'%i"-/ 6n the irst issue% the 9upreme Court ruled in the negati'e. 4e ruled that proo beyond reasonable doubt o an employee<s misconduct is not re)uired $hen loss o con idence is the ground or dismissal. &t is su icient i the employer has ?some basis@ to lose con idence or that the employer has reasonable ground to belie'e or to entertain the moral con'iction that the employee concerned is responsible or the misconduct and that the nature o his participation therein rendered him absolutely un$orthy o the trust and con idence demanded by his position. Lyn'il cannot argue that since the 6 ice o the 1rosecutor ound probable cause or the t the Labor Arbiter must ollo$ the inding as a 'alid reason or the termination o respondents< employment. !he proo re)uired or purposes that di er rom one and the other are li(e$ise di erent.

CA E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

6n the second )uestion% the Court stated that nonetheless% e'en $ithout reliance on the prosecutor<s inding% $e ind that there $as 'alid cause or respondents< dismissal. 8ust cause is re)uired or a 'alid dismissal. !he Labor Code pro'ides that an employer may terminate an employment based on raud or $ill ul breach o the trust reposed on the employee. 9uch breach is considered $ill ul i it is done intentionally% (no$ingly% and purposely% $ithout +usti iable e#cuse% as distinguished rom an act done carelessly% thoughtlessly% heedlessly or inad'ertently. &t must also be based on substantial e'idence and not on the employer<s $hims or caprices or suspicions other$ise% the employee $ould eternally remain at the mercy o the employer. Loss o con idence must not be indiscriminately used as a shield by the employer against a claim that the dismissal o an employee $as arbitrary. And% in order to constitute a +ust cause or dismissal% the act complained o must be $or(0related and sho$s that the employee concerned is un it to continue $or(ing or the employer. &n addition% loss o con idence as a +ust cause or termination o employment is premised on the act that the employee concerned holds a position o responsibility% trust and con idence or that the employee concerned is entrusted $ith con idence $ith respect to delicate matters% such as the handling or care and protection o the property and assets o the employer. !he betrayal o this trust is the essence o the o ense or $hich an employee is penali"ed. Breach o trust is present in this case. -o$e'er% Lyn'il contends that it cannot be guilty o illegal dismissal because the pri'ate respondents $ere employed under a i#ed0term contract $hich e#pired at the end o the 'oyage. Contrarily% the pri'ate respondents (employees) contend that they became regular employees by reason o their continuous hiring and per ormance o tas(s necessary and desirable in the usual trade and business o Lyn'il. 8urisprudence% laid t$o conditions or the 'alidity o a i#ed0contract agreement bet$een the employer and employee: first" the i#ed period o employment $as (no$ingly and 'oluntarily agreed upon by the parties $ithout any orce% duress% or improper pressure being brought to bear upon the employee and absent any other circumstances 'itiating his consentD or second" it satis actorily appears that the employer and the employee dealt $ith each other on more or less e)ual terms $ith no moral dominance e#ercised by the ormer or the latter.

&n the conte#t o the acts that: (1) the respondents $ere doing tas(s necessarily to Lyn'il<s ishing business $ith positions ranging rom captain o the 'essel to 'odegeroD (2) a ter the end o a trip% they $ill again be hired or another trip $ith ne$ contractsD and (5) this arrangement continued or more than ten years% the clear intention is to go around the security o tenure o the respondents as regular employees. And respondents are so by the e#press pro'isions o the second paragraph o Article 2C/% thus: ### 1ro'ided% !hat any employee $ho has rendered at least one year o ser'ice% $hether such ser'ice is continuous or bro(en% shall be considered a regular employee $ith respect to the acti'ity in $hich he is employed and his employment shall continue $hile such acti'ity e#ists. -a'ing ound that respondents are regular employees $ho may be% ho$e'er% dismissed or cause as $e ha'e so ound in this case% there is a need to loo( into the procedural re)uirement o due process in 9ection 2% 3ule NN&&&% Boo( F o the 3ules &mplementing the Labor Code. &t is re)uired that the employer urnish the employee $ith t$o $ritten notices: (1) a $ritten notice ser'ed on the employee speci ying the ground or grounds or termination% and gi'ing to said employee reasonable opportunity $ithin $hich to e#plain his sideD and (2) a $ritten notice o termination ser'ed on the employee indicating that upon due consideration o all the circumstances% grounds ha'e been established to +usti y his termination. &n this case% it is clear that the employees $ere not gi'en the inal $ritten notices o dismissal. !he Court ruled that since employees $ere dismissed or +ust cause% they $ere not entitle to separation pay and bac($ages. -o$e'er% they $ere to be granted nominal damages or ailure o the employer to comply $ith statutory due process. 6. B'r e" !( Pr!!( )ases/ 0ANTLE TRA,IN9 SERVI)ES3 IN).@OR BOBBY ,EL ROSARIO3 8s. NLR) a" PABLO S. 0A,RIA9A3 9.R. N!. 1::;0A3 7'%$ 2<3 200> Fa6ts: 1etitioner company% Mantle !rading 9er'ices% &nc.% is engaged in the ishing business. Madriaga $as hired by petitioner company as a IbatilyoI or ish hauler. 9ubse)uently% he became a ItagapunoI &t $as reported that Madriaga recei'ed money to put more ish in Al aro<s tubs% ormal incident reports $ere submitted to the petitioner company. 6n 9eptember 11% 1:::% Madriaga $as allegedly barred by the payroll master% Mr. Charlie Ba)ued% rom reporting or $or(. 1etitioner company% on the other

CB E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

hand% alleged that Madriaga abandoned his $or( $hen he $as about to be in'estigated or the reports. 1etitioner company alleged% among others% that Madriaga $as a seasonal employee and he $as not dismissed. !he Labor Arbiter ruled that Madriaga $as a regular. !he Labor Arbiter also aulted the petitioner company in ailing to comply $ith the re)uirement o notice be ore dismissing an employee. !he 7L3C a irmed the Labor Arbiter<s ruling that Madriaga $as a regular employee but it held that Madriaga $as not illegally dismissed. &n any case% e'en i it $ere true% the act o the payroll master in pre'enting the complainant rom reporting or $or( cannot be deemed respondent<s act in the absence o e'idence that said payroll master had the authority to dismiss employees. 4hat appears to ha'e happened here is that complainant $as not dismissed by the respondent company but the complainant $ithout ascertaining the authority o the payroll master% heeded the latter<s order or him not to report or $or(.!he 7L3C re+ected petitioner company<s contention that Madriaga abandoned his $or(. &t ruled that mere absence is not su icient. !here must be proo that there $as deliberate and un+usti ied re usal on the part o the employee to resume his employment $ithout any intention o returning. !he Court o Appeals a irmed the inding o the Labor Arbiter and the 7L3C that Madriaga $as a regular employee% ho$e'er% re'ersed the Labor Arbiter and the 7L3C on the issue o abandonment o $or(. &t held that there $as a causal connection bet$een the charge against Madriaga o ha'ing recei'ed money rom a ish trader and his ailure to see( his immediate reinstatement. &t ruled that Madriaga abandoned his $or( as it $as only in'o(ed t$o years a ter his alleged dismissal. Iss'e/ 4as pri'ate respondent illegally dismissed= R'%i"-/ Ges. &t is settled that to e ect a 'alid dismissal% the la$ re)uires that a) there be +ust and 'alid cause as pro'ided under Article 2C2 o the Labor CodeD and b) the employee be a orded an opportunity to be heard and to de end himsel . !he t$o0notice re)uirement must be complied $ith% to $it: a) a $ritten notice containing a statement o the cause or the termination to a ord the employee ample opportunity to be heard and de end himsel $ith the assistance o his representati'e% i he so desiresD and b) i the employer decides to terminate the ser'ices o the employee% the employer must noti y him in $riting o the decision to dismiss him% stating clearly the reason there ore.

!he case o 7ga'on v. N+,%% et al. applies to the case at bar. &n Agabon% the dismissal $as ound by the Court to be based on a +ust cause because the employee abandoned his $or(. But it also ound that the employer did not ollo$ the notice re)uirement demanded by due process. &t ruled that this 'iolation o due process on the part o the employer did not nulli y the dismissal% or render it illegal% or ine ectual. 7onetheless% the employer $as ordered to indemni y the employee or the 'iolation o his right to due process. A dismissal or +ust cause under Article 2C2 implies that the employee concerned has committed% or is guilty o % some 'iolation against the employer% i.e. the employee has committed some serious misconduct% is guilty o some raud against the employer% or% as in Agabon% he has neglected his duties. !hus% it can be said that the employee himsel initiated the dismissal process. 9ince in the case o 8AMA% the employee $as terminated or authori"ed causes as the employer $as su ering rom serious business losses% the Court i#ed the indemnity at a higher amount o 1;/%///.//. &n the case at bar% the cause or termination $as abandonment% thus it is due to the employee<s ault. &t is e)uitable under these circumstances to order the petitioner company to pay nominal damages in the amount o 15/%///.//% similar to the case o Agabon. 4e a irm the a$ard o salary di erentials% 15th month pay and holiday pay% a$arded by the 7L3C and the Court o Appeals. 4e note that although petitioner company had cause to terminate Madriaga% this has no bearing on the issue o a$ard o salary di erentials% holiday pay and 15th month pay because prior to his 'alid dismissal% he per ormed $or( as a regular employee o petitioner company% and he is entitled to the bene its pro'ided under the la$. !hus% in the case o Agabon% e'en $hile the Court ound that the dismissal $as or a +ust cause% the employee $as still a$arded his monetary claims. P1IL. VETERANS BAN+3 8s. NLR) a" BENI9NO 0ARTINE=3 9.R. N!. 1<<<<23 0ar6# 303 2010 Fa6ts/ 3espondent Benigno Martine" $as the 2umaguete City branch manager o the 1hilippine Feterans Ban( rom 9eptember 1% 2//1 upto 8anuary C% 2//5% the date respondent tendered his resignation because ?it J$asK so e#pensi'e or JhimK to be staying a$ay rom JhisK amily%@ $hich circumstance $as brought about by his trans er to the Ma(ati head o ice the ban( since 6ctober 2//2. 3espondent claimed that he $as trans erred to the

CC E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

Ma(ati branch o ice a ter he earned the ire o the ban(<s Area -ead or Fisayas and Mindanao. !his $as because he re)uested one o the big depositors o the ban(% $ho $as the mayor o Falencia% 7egros 6riental% to tal( to the said Area -ead regarding huge $ithdra$als by depositors% $hich $as precipitated by ne$spaper reports o alleged anomalies hounding the ban(<s high0ran(ing o icials. *arlier% the respondent already approached the Area -ead about the same matter but the said Area -ead simply brushed o the issue. 6n 6ctober 2//2% the Area -ead $ent to the 2umaguete branch o the ban( and brought $ith him the person $ho $ould replace respondent as branch manager. !he respondent $as ordered to report to the ban(<s head o ice in Ma(ati. !here% the ban(<s Fice 1resident and -ead o its Branch Ban(ing 2i'ision told him that he $ould undergo training. 7o such training too( place. &nstead% the respondent $as made to do clerical +obs. -e had to tra'el our hours e'eryday rom his rented house in Ca'ite to Ma(ati. !his consumed tra'el and li'ing e#penses consumed hal o his salary. !his prompted him to tender his resignation on 8anuary C% 2//5. !herea ter% he iled a complaint or constructi'e dismissal be ore the labor arbiter. &n its position paper% the petitioner claimed that Martine"<s trans er $as not moti'ated by bad aith. &t said that it $as pursuant to 9pecial 6rder 7o. CC/% $hich ordered the respondentQs trans er to the Branch Ban(ing 2i'ision to undergo Branch -ead !raining e ecti'e 6ctober 21% 2//2. !he labor arbiter dismissed his complaint and ruled that the respondent 'oluntarily resigned rom ser'ice. !he 7L3C re'ersed the labor arbiter. &t ruled that respondent $as constructi'ely dismissed and that the unceremonious replacement o the respondent on 6ctober 2//2 $as a(in to contructi'e dismissal. !he Court o Appeals a irmed the 7L3C and ruled that the respondentQs trans er rom 2umaguete to Ma(ati City $as clearly unreasonable% incon'enient and put him in the di icult predicament o choosing $hether to li'e a$ay rom his amily or to bring them to Manila $hich $ill entail additional e#penses on his part. !he petitioner ele'ated the case to the 9upreme Court. Iss'e/ 4as dismissed= the respondent constructi'ely

conditions o the petitioner +usti ied the inding o the 7L3C and the CA that respondent $as constructi'ely dismissed. &n constructi'e dismissal cases% the employer has the burden o pro'ing that its conduct and action or the trans er o an employee are or 'alid and legitimate grounds such as genuine business necessity. 1articularly% or a trans er not to be considered a constructi'e dismissal% the employer must be able to sho$ that such trans er is not unreasonable% incon'enient% or pre+udicial to the employee. ,ailure o the employer to o'ercome this burden o proo taints the employeeQs trans er as a constructi'e dismissal. &n the present case% the petitioner ailed to discharge this burden. !he combination o the harsh actions o the petitioner rendered the employment condition o respondent hostile and unbearable. ,irst% the petitioner ailed to sho$ any urgency or genuine business necessity to trans er the respondent to the Ma(ati -ead 6 ice. 9econd% the respondentQs trans er rom 2umaguete to Ma(ati City is clearly unreasonable% incon'enient and oppressi'e% since the respondent and his amily are residents o 2umaguete City. !hird% the petitioner ailed to present any 'alid reason $hy it had to re)uire the respondent to go to Ma(ati -ead 6 ice to undergo branch head training $hen it could ha'e +ust easily re)uired the latter to underta(e the same training in the F&9M&7 area. ,inally% there $as nothing in the order o trans er as to $hat position the respondent $ould occupy a ter his trainingD the respondent $as e ecti'ely placed in a I loatingI status. 0ANILA ELE)TRI) )O0PANY3 8s. 0a. L'isa Be%tra"3 9.R. N!. 1;4;;43 7a"'ar$ 303 2012 Fa6ts/ Beltran $as employed by M*3ALC6 and at the time material to this case% she $as holding the position o 9enior Branch Cler( at M*3ALC6<s 1asig branch. 4hile rendering o'ertime $or( on 9eptember 2C% 1::A% a 9aturday% Beltran accepted 11;%1A...C rom Collection 3oute 9uper'isor Berlin Marcos (Marcos)% $hich the latter recei'ed rom customer Andy Chang (Chang). !he cash payment $as being made in lieu o a returned chec( earlier issued as payment or Chang<s electric bill.Beltran recei'ed the payment and issued Au#iliary 3eceipt 7o. CB:A. $hich she dated 9eptember 5/% 1::A% a Monday% instead o 9eptember 2C% 1::A. !his $as done to sho$ that it $as an accommodation% an accepted practice in the o ice. 9he therea ter placed the money and the original au#iliary receipt and other documents pertinent to the returned chec( underneath her other iles inside the dra$er o her table.

R'%i"-/ Ges% the trans er o the 2umaguete Branch Manager o Feterans Ban( to Ma(ati constituted constructi'e dismissal. !he test o constructi'e dismissal is $hether a reasonable person in the employeeQs position $ould ha'e elt compelled to gi'e up his position under the circumstances. Based on the actual considerations in the present case% $e hold that the hostile and unreasonable $or(ing

C: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

Beltran% ho$e'er% $as only able to remit Chang<s payment on 8anuary 15% 1::B. !hus% in a Memorandum dated 8anuary 1A% 1::B% she $as placed under pre'enti'e suspension e ecti'e 8anuary 2/% 1::B pending completion o an in'estigation. M*3ALC6 considered as misappropriation or $ithholding o company unds her ailure to immediately remit said payment in 'iolation o its Code on *mployee 2iscipline. >arcia% the Administrati'e 9uper'isor o M*3ALC6<s 1asig branch% on the other hand% testi ied that $hile doing an accounting o all outstanding returned chec(s sometime in 2ecember 1::A% she noticed that Chang<s returned chec( $as missing. Hpon urther in)uiry% she disco'ered that Chang had already redeemed the returned chec( a ter paying 11;%1A...C to Beltran% $ho in turn issued an Au#iliary 3eceipt dated 9eptember 5/% 1::A. &t $as also disco'ered that the payment has not yet been remitted. !his prompted her to in)uire rom Beltran on 8anuary B% 1::B about the supposed payment and immediately ordered the remittance o the same. Beltran% ho$e'er% ailed to do so on that day and e'en on the ne#t day $hen she reported or $or(. Beltran subse)uently $ent on lea'e o absence on 8anuary : and 1/% 1::B. &t $as only on 8anuary 15% 1::B that the money $ith the pertinent documents $as handed o'er. &n a memorandum dated ,ebruary 2;% 1::B% the in'estigator ound Beltran guilty o misappropriating and $ithholding Chang<s payment o 11;%1A...C and recommended her dismissal rom ser'ice. Beltran iled a complaint or illegal dismissal against M*3ALC6. 9he argued that she had no intention to $ithhold company unds. Besides% it $as not her customary duty to collect and remit payments rom customers. 9he claimed good aith% belie'ing that her acceptance o Chang<s payment is considered good$ill in a'or o both M*3ALC6 and its customer. & at all% her only 'iolation $as a simple delay in remitting the payment% $hich caused no considerable harm to the company. &n a 2ecision o the Labor Arbiter regarded the penalty o dismissal as not commensurate to the degree o in raction committed as there $as no ade)uate proo o misappropriation on the part o Beltran. & there $as delay in Beltran<s remittance o Chang<s payment% it $as unintentional and same cannot ser'e as su icient basis to conclude that there $as misappropriation o company unds. &n act% Beltran did not e'en attempt to deny possession o % or re use to hand in% the money. !he Labor Arbiter thus ga'e compassionate consideration or the neglect to remit the money promptly% stating that it is

e#cusable or Beltran to commit lapses in her $or( due to serious amily di iculties. Hpon appeal% the 7L3C re'ersed the Labor Arbiter<s 2ecision and dismissed Beltran<s complaint against M*3ALC6 in its 2ecision. &t ound that Beltran $ithheld company unds by ailing to remit it or almost our months. !he 7L3C thus ruled that M*3ALC6 'alidly dismissed Beltran rom the ser'ice in the e#ercise o its inherent right to discipline its employees. 4hen Beltran brought the case to the CA the 7L3C<s ruling $as re'ersed. !he CA instead agreed $ith the indings o the Labor Arbiter that there $ere no serious grounds to $arrant Beltran<s dismissal. !he CA held that the penalty o dismissal is harsh considering the in raction committed and Beltran<s nine years o unblemished ser'ice $ith M*3ALC6. Iss'e/ 4hether or not Beltran dismissal is 'alid inding that she is guilty o $ithholding company unds. 3uling: 9upreme Court support the CA<s inding that there are no su icient grounds to $arrant Beltran<s dismissal. ,or loss o trust and con idence to be a 'alid ground or dismissal% it must be based on a $ill ul breach o trust and ounded on clearly established acts. A breach is $ill ul i it is done intentionally% (no$ingly and purposely% $ithout +usti iable e#cuse% as distinguished rom an act done carelessly% thoughtlessly% heedlessly or inad'ertently. &n addition% loss o trust and con idence must rest on substantial grounds and not on the employer<s arbitrariness% $hims% caprices or suspicion. &n the case at bench% Beltran attributed her delay in turning o'er Chang<s payment to her di icult amily situation as she and her husband $ere ha'ing marital problems and her child $as su ering rom an illness. Admittedly% she $as reminded o Chang<s payment by her super'isor on 8anuary B% 1::B but denied ha'ing been ordered to remit the money on that day. 9he then reasoned that her continued delay $as caused by an ine'itable need to ta(e a lea'e o absence or her to attend to the needs o her child $ho $as su ering rom asthma. M*3ALC6 cannot claim or conclude that Beltran misappropriated the money based on mere suspicion. And e'en i Beltran delayed handing o'er the unds to the company% M*3ALC6 still has the burden o proo to sho$ clearly that such act o negligence is su icient to +usti y termination rom employment. Beltran $as remiss in her duties or her

:/ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

ailure to immediately turn o'er Chang<s payment to the company. 9uch negligence% ho$e'er% is not su icient to $arrant separation rom employment. !o +usti y remo'al rom ser'ice% the negligence should be gross and habitual. ?>ross negligence # # # is the $ant o e'en slight care% acting or omitting to act in a situation $here there is duty to act% not inad'ertently but $ill ully and intentionally% $ith a conscious indi erence to conse)uences inso ar as other persons may be a ected.@ -abitual neglect% on the other hand% connotes repeated ailure to per orm one<s duties or a period o time% depending upon the circumstances. 7o concrete e'idence $as presented by M*3ALC6 to sho$ that Beltran<s delay in remitting the unds $as done intentionally. 7either $as it sho$n that same is $ill ul% unla$ ul and elonious contrary to M*3ALC6<s inging as stated in the letter o termination it sent to Beltran. 9urely% Beltran<s single and isolated act o negligence cannot +usti y her dismissal rom ser'ice. . Pri"6i.%e !( ,is6reti!"ar$ 7'sti6e ?4hene'er a penalty less puniti'e $ould su ice% $hate'er missteps may be committed by labor ought not to be 'isited $ith a penalty so se'ere.@ Fa6t!rs t#at s#!'% &e taEe" i"t! 6!"si erati!" i" etermi"i"- a .e"a%t$ s#!rt !( termi"ati!" !( em.%!$me"t/ 1. seriousness o the o ense 2. pre'ious record o the employee 5. length o ser'ice .. pre'ious o enses )ase/ A%mira 8s. BF 9!! ri6# 2A< S)RA 1;04 A 1:B. case% that the stri(e should ha'e been 'ie$ed $ith a little less disappro'al and e'en i declared illegal% need not ha'e been attended $ith such a drastic conse)uence as termination o employment relationship. !his is so because% according to the Court% o the security o tenure pro'ision under the Constitution. !he Court stated% thus: &t $ould imply at the 'ery least that $here a penalty less puniti'e $ould su ice% $hate'er missteps may be committed by labor ought not to be 'isited $ith a conse)uence so se'ere. &t is not only because o the la$Qs concern or the $or(ingman% !here is% in addition% his amily to consider. Hnemployment brings untold hardships and sorro$s on those dependent on the $age0earner. !he misery and pain attendant on the loss o +obs then could be a'oided i there be acceptance o the 'ie$ that under all the circumstances o this case% petitioners should not be depri'ed o their means o li'elihood. 7or is this to condone $hat had been done by them. ,or all this $hile% since pri'ate respondent

considered them separated rom the ser'ice% they had not been paid. ,rom the strictly +uridical standpoint% it cannot be too strongly stressed% to ollo$ 2a'is in his masterly $or( 2iscretionary 8ustice% that $here a decision may be made to rest on in ormed +udgment rather than rigid rules% all the e)uities o the case must be accorded their due $eight. ,inally% labor la$ determinations% to )uote rom Bultmann% should be not only secundum rationem but also secundum caritatem. V1 0a"'(a6t'ri"- I"6. 8s. NLR) 27a". 1>3 20004 FA)TS/ 9ince 7o'ember ;% 1:C; >amido $as employed in F- Manu acturing<s business o manu acturing li)ue ied petroleum gas (L1>) cylinders. -e ser'ed as a )uality control inspector $ith the principal duty o inspecting L1> cylinders or any possible de ects. -is ser'ice $ith the company $as abruptly interrupted on ,ebruary 1.% 1::;% $hen he $as ser'ed a notice o termination o his employment. -is dismissal stemmed rom an incident on ,ebruary 1/% 1::; $herein F-<s company 1resident% Ale+andro 2y 8uanco% allegedly caught pri'ate >amido sleeping on the +ob. 6n that same day% pri'ate respondent $as as(ed through a $ritten notice rom the petitioner<s 1ersonnel 2epartment to e#plain $ithin t$enty0 our (2.) hours $hy no disciplinary action should be ta(en against him or his 'iolation o Company 3ule 1;0b $hich pro'ides or a penalty o separation or sleeping during $or(ing hours. 4ithout delay% pri'ate respondent replied in a letter $hich reads: D)ir" ipagpaumanhin po ninyo !ung na!api!it a!o sa a!ing pu#esto dahil hinihintay !o po ang niliha hi 7'reu para i 8uality pasensiya na po !ung hindi !o po namalayan ang pagdaan ninyo dahil maingay po ang painting 'ooth.D 7ot$ithstanding his oregoing reply% he $as terminated. ,eeling aggrie'ed% he iled a complaint or illegal dismissal% praying or reinstatement to his position as )uality control inspector. Labor Arbiter declared that >amido<s dismissal is anchored on a 'alid and +ust cause. 7L3C re'ersed the decision. ISSUE/ 467 >amido<s dismissal $as too harsh a penaltly or his 'iolation o company rule 1;0b 1EL,/ G*93 Basically% the reason cited or the dismissal o pri'ate respondent is sleeping on the +ob in 'iolation o Company 3ule 1;0b. But according to >amido% he $as not sleeping on the +ob but $as merely idle% $aiting or the ne#t cylinder to be chec(ed. &n 'ie$ o the gra'ity o the penalty o separation% as pro'ided by the Company 3ules and 3egulation.% in

:1 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

termination disputes% the burden o proo is al$ays on the employer to pro'e that the dismissal $as or a +ust and 'alid cause. 4hat is at sta(e here is not only the +ob itsel o the employee but also his regular income there rom $hich is the means o li'elihood o his amily. A thorough re'ie$ o the record discloses that% contrary to the indings o the Labor Arbiter% petitioner<s claim that pri'ate respondent slept on the +ob $as not substantiated by any con'incing e'idence other than the bare allegation o the o icer. 7e#t% F-<s reliance on the authorities it cited that sleeping on the +ob is al$ays a 'alid ground or dismissal% is misplaced. !he authorities cited in'ol'ed security guards $hose duty necessitates that they be a$a(e and $atch ul at all times inasmuch as their unction% to use the $ords in +u@on )tevedoring %orp. v. %ourt of 0ndustrial ,elations % is Ito protect the company rom pil erage or loss.I Accordingly% the doctrine laid do$n in those cases is not applicable to the case at bar. ,inally% $hile an employer en+oys a $ide latitude o discretion in the promulgation o policies% rules and regulations on $or(0related acti'ities o the employees% those directi'es% ho$e'er% must al$ays be air and reasonable% and the corresponding penalties" #hen prescri'ed" must 'e commensurate to the offense involved and to the degree of the infraction. 0n the case at 'ar" the dismissal meted out on private respondent for allegedly sleeping on the jo'" under the attendant circumstances" appears to 'e too harsh a penalty" considering that he #as 'eing held lia'le for first time" after nine ? of un'lemished service" for an alleged offense #hich caused no prejudice to the employer" aside from a'sence of su'stantiation of the alleged offense. 7either $as it sho$n that pri'ate respondent<s alleged negligence or neglect o duty% i any% $as gross and habitual. !hus% reinstatement is +ust and proper. ,is.!siti!" petition is hereby 2&9M&99*23 and the challenged 2ecision and 6rder o public respondent 7L3C are A,,&3M*2.

TE)1NOLO9I)AL INSTITUTE OF T1E P1ILIPPINES TEA)1ERS a" E0PLOYEES OR9ANI=ATION 2TIPTEO4 a" its mem&er 0A9,ALENA T. SALON3 8s. T1E 1ON. )OURT OF APPEALS a" TE)1NOLO9I)AL INSTITUTE OF T1E P1ILIPPINES3 9.R. N!. 1A<;033 7'"e 2:3 200> Fa6ts/ 1etitioner Magdalena !. 9alon ()alon) $as a College &nstructor 5 o the -umanities and 9ocial 9cience 2epartment (-))&) o respondent !echnological &nstitute o the 1hilippines ( T01) and a member o the !echnological &nstitute o the 1hilippines !eachers and *mployees 6rgani"ation (T01TEO). 9ometime in year 2///% the !&1 recei'ed complaints rom students claiming that 9alon $as collecting 11.;/ per page or the test paper used in the sub+ect she $as teaching at the time. 9he reportedly as(ed her students not to $rite on the test papersD these test papers $ere not returned to the students a ter the test. &n addition% a complaint $as iled against her or anomalously changing the grade o a particular student $ho $as at the same time a son o a co0 aculty member rom ;./ ( ailed) to A./ (dropped). 9alon ans$ered that she only collected 1/.;/ per page to reimburse hersel rom personal e#penses. ,urther% she admitted o ha'ing changed the grade in order to 'indicate the student rom the $rath o his ather. 9alon belie'ed that a ?dropped@ grade is better than a ? ailed@ mar(. !here $ere enumerated !&1 Memoranda in the case% geared to$ards a'oidance o unduly burdening the students rom unreasonable inances. But $hat is really determinati'e is !&1 Memorandum 7o. 10AA% $hich re)uires a prior permission rom the proper school authority should the teacher directly sell hisPher e#amination papers to students% usually or reimbursement% pro'ided% the cost shall be $ithin the rate prescribed by the school. !he Foluntary Arbitrator ruled in a'or o 9alon. 6n appeal under 3ule .5% said decision $as a irmed by CA. -o$e'er% on motion or reconsideration% CA re'ersed itsel % ruling in a'or o !&1 and against 9alon% but granted separation pay. Iss'e/ 1. 4hether or not 9alon is guilty o 'iolating !&1<s Memorandum 7o. 10AA% or unauthori"ed selling o e#amination papers 2. 4hether or not 9alon is guilty o serious misconduct or alsi ying Manalo<s (the son a co0 aculty member) grade and 'iolating the grading rules under the Manual o 3egulations or 1ri'ate 9chools R'%i"-/ 9alon is guilty o the t$o 'alid causes. On the sale of 1apers: !he cost o the sale o test papers by 9alon to her students $as $ithin the

:2 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

prescribed parameters o the school. -o$e'er% it cannot be denied that 9alon did not irst obtain the prior permission o the proper school authority% a condition precedent re)uired by !&1 Memorandum no. 10AA. Clearly% she transgressed the school regulation. On grade tampering: &t is a 'iolation against the Manual o 3egulation or 1ri'ate 9chools $hose 9ection B: pro'ides: 9ec. B:. Basis or >rading. !he inal grade or rating gi'en to a pupil or student in a sub+ect should be based on his scholastic record. Any addition or diminution to the grade # # # shall not be allo$ed. !he present 'iolation in'ol'es elements o alsi ication and dishonesty. Mno$ing ully $hat Manalo deser'ed% 9alon ga'e him a grade o A./ instead o a ailing grade. &n the process% she changed in short% alsi ied her o$n records by changing the submitted record and the supporting documents. Fie$ed in any light% this is 9erious Misconduct under Article 2C2(a) o the Labor Code% and a +ust cause or termination o employment. On separation pay: CA erred on this matter. !he 'iolation constituted serious misconduct or a cause relating to the employee<s moral character. !he act that 9alon committed an o ense or the irst time% or she has ser'ed or 1/ years in !&1% and the allegation that there $as no malice or bad intention on her part are misplaced arguments. !hus% separation pay is not proper. 4-*3*,63*% premises considered% $e hereby 2*7G the petition or lac( o merit. 4e hereby A,,&3M the amended decision o the Court o Appeals promulgated on May 22% 2//5% but 2*L*!* the a$ard o separation pay. Costs against the petitioners. P1ILIPPINE LON9 ,ISTAN)E TELEP1ONE )O0PANY3 8s. 7OEY B. TEVES3 9.R. N!. 143A113 N!8em&er 1A3 2010 Fa6ts/ 3espondent $as employed by petitioner 1hilippine Long 2istance !elephone Company in 1:C1 as Cler( && until his termination rom ser'ice on 8une 1% 1::2. 1etitioner terminated respondent through an &nter06 ice Memorandum dated May 2:% 1::2 on account o his three (5) unauthori"ed lea'es o absence committed $ithin three (5) years in 'iolation o petitioner<s rules and regulations. 3espondent $as absent rom August 25 to 9eptember 5% 1::/ as his $i e ga'e birth and su ered complications. 3espondent called up through a third party to in orm petitioner that he $ould

go on an e#tended lea'e. Hpon his reporting or $or(% he $rote petitioner a letter con irming his lea'e o absence $ithout pay or that period and stating the reasons thereo % $ith his $i eQs medical certi icate attached. 2issatis ied% petitioner re)uired respondent to submit urther e#planation $hich the latter did reiterating his pre'ious e#planation. -o$e'er% it ound respondent<s e#planation to be unacceptable and unmeritorious or the latterQs ailure to call% noti y or re)uest petitioner or such lea'e and suspended respondent rom $or( $ithout pay or 2/ days. 3espondent $as absent rom May 2: to 8une 12% 1::1 his eldest and youngest daughters getting sic( and had to be con ined in the hospital. ,urther% respondent alleged that he had relayed said message to an o icemate $ho un ortunately did not also report or $or(. 1etitioner ound respondent<s e#planation insu icient% respondent $as suspended $ithout pay or .; days. *ight months therea ter% respondent a'ailed o a se'en0day lea'e o absence and e#tended such lea'e to complete his annual 'acation lea'e. -o$e'er% respondent ailed to report or $or( rom ,ebruary 11 to ,ebruary 1:% 1::2 $hich $as made to prolong payment o his demandable inancial obligations in the o ice. -e urther stated that he reali"ed that $hat he did $as $rong and only $orsened his situation and as(ed or another chance. 1etitioner ound such e#planation totally unacceptable. !hus% in an &nter06 ice Memorandum dated May 2:% 1::2 addressed to respondent% the latter $as terminated rom ser'ice e ecti'e 8une 1% 1::2 due to his third unauthori"ed absence $ithin a three0year period. !he LA ound that respondent<s dismissal $as legal. -o$e'er% the 7L3C ound that the t$o pre'ious incidents o respondent<s alleged unauthori"ed absences $ere +usti ied% and that $hile his absence rom ,ebruary 11 to 1:% 1::2 $as unacceptable and unreasonable% he should ha'e been penali"ed there or accordingly% but not $ith dismissal rom ser'ice. !he CA a irmed the 7L3C<s indings and concluded that respondent<s absences rom ,ebruary 11 to 1:% 1::2 $as his irst and only unauthori"ed absences during his 11 years o stay% and it did not merit the harsh penalty o dismissal. Iss'e/ 4hether or not there is su icient ground or the termination o respondent. 1e% / 4e ind that respondentQs termination or committing three unauthori"ed absences $ithin a three0year period had no basisD thus% there $as no 'alid cause or respondentQs dismissal.

:5 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

*'en assuming that respondentQs absenteeism constitutes $ill ul disobedience% such o ense does not $arrant respondentQs dismissal. 7ot e'ery case o insubordination or $ill ul disobedience by an employee reasonably deser'es the penalty o dismissal. !here must be a reasonable proportionality bet$een the o ense and the penalty. 1etitionerQs claim that the alleged pre'ious in ractions may be used as supporting +usti ication to a subse)uent similar o ense% $hich $ould merit dismissal% inds no application in this case. 3espondentQs absence rom August 25 to 9eptember 5% 1::/ $as +usti ied and not unauthori"ed as there $as prior notice. -is absence rom May 2: to 8une 12% 1::1% although ound to be unauthori"ed% $as not at all un+usti ied. !hus% his absence during the period rom ,ebruary 11 to 1:% 1::1% being the only unauthori"ed and un+usti ied absence and his second unauthori"ed absence% should not merit the penalty o dismissal. 4hile management has the prerogati'e to discipline its employees and to impose appropriate penalties on erring $or(ers% pursuant to company rules and regulations% ho$e'er% such management prerogati'es must be e#ercised in good aith or the ad'ancement o the employer<s interest and not or the purpose o de eating or circum'enting the rights o the employees under special la$s and 'alid agreements. !he Court is $ont to reiterate that $hile an employer has its o$n interest to protect% and pursuant thereto% it may terminate an employee or a +ust cause% such prerogati'e to dismiss or lay o an employee must be e#ercised $ithout abuse o discretion. &ts implementation should be tempered $ith compassion and understanding. !he employer should bear in mind that% in the e#ecution o said prerogati'e% $hat is at sta(e is not only the employee<s position% but his 'ery li'elihood% his 'ery breadbas(et. Considering that respondent $as illegally dismissed rom ser'ice% he is entitled to be reinstated% $ithout loss o seniority rights and the payment o bac($ages rom the time respondent<s compensation $as $ithheld rom him until his reinstatement on 7o'ember 12% 1::B. -o$e'er% since $e ind that respondentQs absence rom ,ebruary 11 to 1:% 1::2 $as un+usti ied and unauthori"ed% thus% his suspension or thirty days $ould be in order. -ence% the amount e)ui'alent to the thirty0day suspension% $hich respondent should ha'e ser'ed or his absence on ,ebruary 11 to 1:% 1::2% should be deducted rom the bac($ages to be a$arded to him.

0ANILA ELE)TRI) )O0PANY3 8s. 0a. L'isa Be%tra"3 9.R. N!. 1;4;;43 7a"'ar$ 303 2012 B. 7'st )a'ses (!r Termi"ati!" !( Em.%!$me"t 2Art. 2<2 L)P4 \8H9! CAH9* 0 9eparation pay% in lieu o reinstatement% shall include the amount e)ui'alent at least to one (1) month salary or to one (1) month salary or e'ery year o ser'ice% $hiche'er is higher% a raction o at least si# (A) months being considered as one (1) $hole year including regular allo$ances. & not regular% not included. \AH!-63&O*2 CAH9* 9eparation pay is as ollo$s: \&n case o termination due to the installation o labor0 sa'ing de'ices or redundancy% the $or(er a ected thereby shall be entitled to a separation pay e)ui'alent to at least one (1) month pay or to at least one (1) month pay or e'ery year o ser'ice% $hiche'er is higher. \&n case o retrenchment to pre'ent losses and in cases o closures or cessation o operations o establishment or underta(ing not due to serious business losses or inancial re'erses% the separation pay shall be e)ui'alent to one (1) month pay or at least one0hal (1P2) month pay or e'ery year o ser'ice% $hiche'er is higher. A raction o at least si# (A) months shall be considered one (1) $hole year. \&n cases o closures or cessation o operations o establishment or underta(ing due to serious business losses or inancial re'erses% there shall be no separation pay. F!'r 6!"te5ts !( se.arati!" .a$/ 1. As employer<s obligation 0 in cases o legal termination due to authori"ed causes under Art 2C5 and 2C. 2. As inancial assistance 0 as an act o social +ustice% e'en in cases o legal dismissal under Art 2C2. 1ursuant to the principle o discerning compassion. 5. &n lieu o reinstatement o illegal dismissal cases $here the employee is ordered reinstated but reinstatement is no longer easible. .. As an employment bene its granted under CBA or company policy. 0 this does not arise rom legal or illegal dismissal but 'oluntary mode o lea'ing one<s employment such as resignation. 7'st )a'ses \ 9ubstantial re)uirements

:. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

A3!&CL* 2C2. !ermination by employer. R An employer may terminate an employment or any o the ollo$ing +ust causes: (a) 9erious misconduct or $ill ul disobedience by the employee o the la$ ul orders o his employer or representati'e in connection $ith his $or(D (b) >ross and habitual neglect by the employee o his dutiesD (c) ,raud or $ill ul breach by the employee o the trust reposed in him by his employer or duly authori"ed representati'eD (d) Commission o a crime or o ense by the employee against the person o his employer or any immediate member o his amily or his duly authori"ed representati'eD and (e) 6ther causes analogous to the oregoing. a. seri!'s mis6!" '6t &n order to constitute a ?+ust cause@ or dismissal% ho$e'er% the act complained o must be related to the per ormance o the duties o the employee such as $ould sho$ him to be thereby un it to continue $or(ing or the employer. ReJ'isites/ 1. it must be serious and not minor 2. it must be $or(0related or relate to the per ormance o the employee<s duties 5. it must sho$ that the employee as become un it to continue $or(ing or the employer &. ?i%%('% is!&e ie"6e 3e ers to the $ill ul disobedience by the employee o the la$ ul orders o his employer or representati'e in connection $ith his $or(. ReJ'isites/ 6rders% instructions or regulations o the employer must be: 1. la$ ul and reasonable 2. su iciently (no$n to the employee 5. in connection $ith the duties $hich the employee has been engaged to discharge 6. -r!ss a" #a&it'a% "e-%e6t &$ t#e em.%!$ee !( #is 'ties >ross negligence a $ant or absence o or ailure to e#ercise e'en the slightest care or diligence% or the entire absence o care as to amount to a rec(less disregard o the sa ety o the person or property. &t e'inces a thoughtless disregard o conse)uences $ithout e#erting any e ort to a'oid them. &t means an absence o diligence $hich an ordinary man $ould use in his o$n a airs. -abitual re ers to a repetition o similar acts. -abitual neglect% on the other hand% implies repeated ailure to

per orm one<s duties or a period o time% depending upon the circumstances. .e. *#cessi'e absenteeism . (ra' &t is generic term embracing all multi arious means $hich human ingenuity can de'ice% and $hich are resorted to by one indi'idual to secure ad'antage o'er another by alse suggestions or by suppression o truth and includes all surprise% tric(% cunning% dissembling ad any un air $ay by $hich another is cheated. Any act or omission or concealment $hich in'ol'es a breach o legal duty% trust and con idence +ustly reposed and is in+urious to another. 3e)uisites: 1. committed against the employer or his representati'e 2. in connection $ith the employee<s $or( 5. position o the employee must be $ith trust and con idence e. ?i%%('% &rea6# &$ t#e em.%!$ee !( t#e tr'st re.!se i" #im &$ #is em.%!$er !r '%$ a't#!ri*e re.rese"tati8e/ &t is $ill ul $hen it is done intentionally% (no$ingly% deliberately $ithout +usti iable e#cuse as distinguished rom an act done carelessly% thoughtlessly% heedlessly and inad'ertently. (e6uisites# 1. breach must be $or(0related 2. position must be impressed $ith trust and con idence such as positions ha'ing the custody o unds% money or other company property 9'i e%i"es (!r t#e a..%i6ati!" !( t#e ,!6tri"e !( L!ss !( )!"(i e"6e/ 1. loss o con idence $hich should not be simulatedD 2. it should not be used as subter uge or causes $hich are improper% illegal or un+usti iedD 5. it should not be arbitrarily asserted in the ace o o'er$helming e'idence to the contraryD .. it must be genuine% not a mere a terthought to +usti y earlier action ta(en in bad aithD ;. the employee in'ol'ed holds a position o trust and con idence Moreo'er% loss o con idence should ideally apply to positions o trust and con idence% such as: 1. those in'ol'ing employees occupying positions o trust and con idence li(e managerial or super'isory employees% or 2. to those situation $here the employee is routinely charged $ith the care and custody o the

:; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

employer<s money and property% ie. Cashiers% auditors% property custodians 5. those $ho in the normal and routine e#ercise o their unctions% regularly handles signi icant amount o money or property% i.e. ban( tellers (. 6!mmissi!" !( 6rime !r !((e"se &$ t#e em.%!$ee a-ai"st - t#e .ers!" !( #is em.%!$er !r 0 his duly authori"ed representati'e or 0 any immediate member o his amily Con'iction is not necessary here% mere substantial e'idence is re)uired. 7o need or a case. A mere commission o an o ense against the employer $ill +usti y termination. -. !t#er a"a%!-!'s 6a'ses 0 6ther analogous causes e.g. abandonment% se#ual harassment% gross ine iciency or poor per ormanceD drug use or abuse (3A :1A;)D attitude problemD con lict o interest% lac( o common sense A&a" !"me"t 0 analogous to gross and habitual neglect o duty. &t re)uires deliberate% un+usti ied re usal o the employee to resume his employment T?! e%eme"ts m'st &e satis(ie / 1. ailure to report or $or( or absence $ithout any 'alid or +usti iable reason 2. a clear intention to se'er the *30** relationship0 must be e'inced by o'er acts Se5'a% 1arassme"t 0 analogous to serious misconduct 0 the gra'amen o the o ense in se#ual harassment is not the 'iolation o the employee<s se#uality but the abuse o po$er by the employer. Any employee% male or emale% may right ully cry oul pro'ided the claim is $ell substantiated. 9e#ual harassment is an imposition o misplaced superiority. 9r!ss i"e((i6ie"6$ 0 analogous to serious misconduct 0 ailure to obser'e pescribed standards o $or( to ul ill reasonable $or( assignments )!"(%i6t !( i"terest !r .!!r .er(!rma"6e 0 analogous to gross neglect or both in'ol'e speci ic act or omissions on the part o the employees resulting in damage to the employer or his business. &t re ers to ailure to obser'e prescribed standards o $or(% or to ul ill reasonable standard o $or( due to ine iciency. 0 poor per ormance is e)ui'alent to ine iciency and incompetence in the per ormance o o icial duties. An unsatis actory rating can be a +ust cause

or dismissal only i it amounts to gross and habitual neglect o duties. ,r'- 'se !r a&'se 0analogous to serious misconduct Re.'&%i6 A6t >1:A ARTI)LE V 1romotion o a 7ational 2rug0,ree 4or(place 1rogram $ith the participation o 1ri'ate and Labor 9ectors and the 2epartment o Labor and *mployment. 9ection .B 2rug0,ree 4or(place it is deemed a policy o the 9tate to promote drug0 ree $or(places using a tripartite approach. 4ith the assistance o the Board% the 2epartment o Labor and *mployment (26L*) shall de'elop% promote and implement a national drug abuse pre'ention program in the $or(place to be adopted by pri'ate companies $ith ten (1/) or more employees. 9uch program shall include the mandatory dra ting and adoption o company policies against drug use in the $or(place in close consultation and coordination $ith the 26L*% Labor and *mployer organi"ations% human resources de'elopment managers and other such pri'ate sector organi"ations. Se6ti!" 4< D 9'i e%i"es (!r t#e Nati!"a% ,r'-Free W!rE.%a6e Pr!-ram D !he board and the 26L* shall ormulate the necessary guidelines or the implementation o the national drug0 ree $or(place program. !he amount necessary or the implementation o $hich shall be included in the Annual >eneral Appropriations Act. Attit' e .r!&%em 0 analogous to breach o trust and con idence 0 An employee $ho cannot get along $ith his co0 employees is detrimental to the company or he can upset and strain the $or(ing en'ironment. La6E !( 6!mm!" se"se ,is-ra6e('% !r imm!ra% 6!" '6t 0 analogous to serious misconduct 09ee also Manual o 3egulations or 1ri'ate 9chool or !ermination o Academic 1ersonnel Se6ti!" >4. )a'ses !( Termi"ati"- Em.%!$me"t 0 &n addition to the +ust cause enumerated in the LC% the employment o school personnel% including aculty% may be terminated or any o the ollo$ing causes: a. >ross ine iciency and incompetence in the per ormance o his duties such as% but not necessarily limited to% habitual and ine#cusable absences and tardiness rom his classes% $ill ul abandonment o employment or assignmentD

:A E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

b. 7egligence in (eeping school or student records% or tampering $ith or alsi ication o the sameD c. Con'iction o a crime or an attempt on% or a criminal act against the li e o a school o icial% personnel or student or upon the property or interest o the schoolD d. notoriously undesirableD e. disgrace ul or immoral conductD . the sale o tic(ets or the collection o any contribution in any orm or or any purpose or pro+ect $hatsoe'er% $hether 'oluntary or other$ise% rom pupils% students and school personnel% e#cept membership ees o pupils and students in the 3ed Cross% !he >irl 9couts o the 1hilippines and the Boy 9couts o the 1hilippinesD g. &n the e'ent o phasing out% closure or the cessation o the educational program or course o the school itsel D andD h. 6ther causes analogous to the oregoing as may be pro'ided or in the regulations prescribed by the 9ecretary or in the school rules or in a collecti'e bargaining agreement. 9ection :; 9uspension. 9uspension o any school may be pre'enti'e or puniti'e. Pre8e"ti8e s's.e"si!" not to e#ceed 5/ days maybe imposed on any school personnel pending in'estigation o the charge against him i his continued presence poses a serious and imminent danger to the school% property and to his li e% the li e o his pupils% students o school personnel. P'"iti8e s's.e"si!" is the imposition o the penalty on an erring school personnel a ter con'iction or an o ense or a misconduct committed. Seri!'s 0is6!" '6t !r ?i%%('% is!&e ie"6e Os6ar 9ar6ia 8s. 0a%a$a" I"s'ra"6e3 9.R.N!. 1:033> 0ar. 143 200< E 'ar ! B'-#a? 8s. Treas're Is%a" 3 9.R. N!. 1;31A1 0ar. 2<3 200< FA)TS: *duardo Bugha$ (Bugha$) $as employed as production $or(er by !reasure &sland &ndustrial (!&&)% respondent. 0*rlito Loberanes (Loberanes)% an employee o !&& $as caught in flagrante delicto by the police o icers $hile in possession o sha'u. 0&n the course o police in'estigation% Loberanes admitted the commission o the crime and implicated petitioner% Bugha$% by stating that part o the money used or buying the illegal drugs $as gi'en by Bugha$% and the illegal drugs purchased $ere or their consumption or the rest o the month.

0!&& sent a memo to Bugha$. !he memo contains the : (1) notice o the 5/0day pre'enti'e suspension (2) An instruction re)uiring him to e#plain $ithin 12/ hours $hy no disciplinary action should be imposed against him or his alleged in'ol'ement in illegal drug acti'ities. (5) An instruction re)uiring him to appear at the o ice o respondentQs legal counsel or the hearing on the matter. 0Bugha$ ailed to appear be ore the !&&Qs legal counsel on the scheduled hearing date. 0!&& sent a second letter to petitioner directing him to attend another administrati'e hearing but petitioner once again ailed to sho$ up. 0&n a third letter addressed to Bugha$% !&& terminated the latterQs employment or using illegal drugs $ithin company premises during $or(ing hours% and or re usal to attend the administrati'e hearing and submit $ritten e#planation on the charges hurled against him. 0!herea ter% Bugha$ iled a complaint or illegal dismissal against !&& and its 1resident% *mmanuel 6ng% be ore the Labor Arbiter. -e argues that: 1. -e had been $or(ing or the respondent or 1; years and he $as 'ery conscientious $ith his +ob. 2. -e $as suspended or 5/ days on the un ounded allegation o his co0$or(er that he used illegal drugs $ithin company premises. 5. 4hen he reported bac( to $or( a ter the e#piration o his suspension% he $as no longer allo$ed by respondent to enter the $or( premises and $as told not to report bac( to $or(. 0LA/ 3endered a 2ecision in a'or o Bugha$ based on the : (1) !&& ailed to present substantial e'idence to establish the charge le'eled against the Bugha$. Apart rom LoberanesQs statements on petitionerQs alleged illegal drug use% no other corroborating proo $as o ered by respondent to +usti y petitionerQs dismissal. (2)!&& ailed to comply $ith due process $hen it immediately suspended petitioner and e'entually dismissed him rom employment. Bugha$<s immediate suspension $as not +usti ied since no e'idence $as submitted by the !&& to establish that Bugha$<s continued employment pending in'estigation poses a serious and imminent threat to respondentQs li e or property or to the li e or property o petitionerQs co0$or(ers. (5)!he notices o hearing sent by !&& to Bugha$ $ere not duly recei'ed by the latter.

:B E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

-NLR): A irmed the Labor ArbiterQs 2ecision. -)A/ 3e'ersed the 2ecisions o the Labor Arbiter and 7L3C on the grounds o patent misappreciation o e'idence and misapplication o la$. CA ound that Bugha$ $as a orded the opportunity to e#plain and de end himsel rom the accusations against him $hen !!& ga'e him notices o hearing. !he essence o due process in administrati'e proceedings is simply an opportunity to e#plain oneQs side or to see( reconsideration o the action or ruling complained o . 2ue process is not 'iolated $here one is gi'en the opportunity to be heard but he chooses not to e#plain his side ISSUE: 467 Bugha$ $as illegally dimissed. 1EL,: 7o% but Bugha$ is entitled to nominal damages. A3! 2C2 pro'ides: An employer may terminate an employment or any o the ollo$ing causes: (a) Seri!'s mis6!" '6t !r ?i%%('% is!&e ie"6e &$ t#e em.%!$ee !( t#e %a?('% !r ers !( #is em.%!$er !r re.rese"tati8e i" 6!""e6ti!" ?it# #is ?!rEC (b) >ross and habitual neglect by the employee o his dutiesD (c) ,raud or $ill ul breach by the employee o the trust reposed in him by his employer or his duly authori"ed representati'eD (d) Commission o employee against the immediate member authori"ed a crime or o ense by the person o his employer or any o his amily or his duly representati'eD and

separation pay as a orm o e)uitable relie in 'ie$ o her length o ser'ice $ith Citiban(. 1aragas iled a Motion or 1artial 3econsideration o the 7L3C 3esolution. 9he no longer challenged her dismissal on the ground o $or( ine iciency% but prayed that Citiban( be ordered to pay her the 1ro'ident ,und bene its under its retirement plan or $hich she claimed to be )uali ied pursuant to Citiban(<s 4or(ing !ogether Manual. !he said manual pro'ides that an employee discharged or reasons other the misconduct $ill be paid a percentage o her share in the ,und. ,inding that 1aragas< dismissal $as or causes other than misconduct% the 7L3C granted 1aragas< Motion. 6n appeal% the Court o Appeals dismissed the petition or lac( o merit and a irmed in toto the challenged 7L3C 3esolution. ISSUE/ 4hether or not the CA erred in a irming the 7L3C<s decision despite the latter<s lac( o authority to pass upon and resol'e issues and grant claims not pleaded and pro'ed be ore the Labor Arbiter 1EL,/ 1aragas indeed prayed or ?other +ust and e)uitable relie %@ but the same may not be interpreted so broadly as to include e'en those $hich are not $arranted by the actual premises alleged by a party. !hus the 8anuary 2.% 2//5 2ecision o the Court o Appeals correctly stated: ?&t has been ruled in this +urisdiction that the general prayer or ]other relie s< is applicable to such other relie s $hich are $arranted by the la$ and acts alleged by the respondent in her basic pleadings and not on a ne$ly created issue.@ 1aragas< assertion that she mentioned the matter regarding the 1ro'ident ,und e'en prior to her Motion or 1artial 3econsideration R on page 1. o her position paper and again on pages 2 and B o her ?7otice o Appeal and Appeal Memorandum@ R is una'ailing. -er ?7otice o Appeal and Appeal Memorandum@ $as iled a ter she had already submitted her position paper. !hus% any mention o the 1ro'ident ,und therein $ould ail to adhere to the abo'e0ruling in MaYebo% the thrust o $hich $as precisely that all acts% e'idence% and causes o action should already be pro ered in the position papers and the supporting documents thereto% not in any later pleading. As to 1aragas< position paper% there $as only the mere mention o ?1ro'ident A Z C%@ $ith the corresponding amount o 11%/CA%55;..5% among the actual damages that she $as allegedly su ering rom her continued se'erance rom employment. 1aragas made no attempt to de ine $hat this ?1ro'ident A Z

(e) 6ther causes analogous to the oregoing. )iti&a"E 8s. NLR) a" ROSITA TAN PARA9AS 9R N!. 1A>3023 Fe&. :3 200< ;A5 9C3A CB (2//C) !he general prayer o ?other relie s@ is applicable only to such other relie s $arranted by la$ and acts. Fa6ts/ 3osita !an 1aragas (1aragas) $or(ed as a iling cler( o Citiban(% 7.A. (Citiban() or eighteen (1C) years. 9he $as terminated by Citiban( or serious misconduct% $ill ul disobedience% gross and habitual neglect o duties and gross ine iciency. 1aragas iled a complaint or illegal dismissal $hich $as dismissed or lac( o merit% inding that the dismissal on the ground o $or( ine iciency $as 'alid. !he 7ational Labor 3elations Commission (7L3C) a irmed the decision o the Labor Arbiter $ith the modi ication that 1aragas should be paid

:C E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

C@ $as% nor o er any substantiation or including it to be among her actual damages. 9he did not e'en hint ho$ ?1ro'ident A Z C@ had a bearing on retirement bene its. !hus% $hile 1aragas did re er to the 1ro'ident ,und in her position paper% such re erence $as too 'ague to be a basis or any court or administrati'e body to grant her retirement bene its. 1aragas +usti ies her ailure to claim or retirement bene its be ore the labor arbiter by alleging that it $ould be inconsistent $ith her prayer or reinstatement. 1aragas% ho$e'er% could ha'e easily claimed such bene its as an alternati'e relie . &n any e'ent% 1aragas is not entitled to retirement bene its as this Court inds that she $as 'alidly dismissed or serious misconduct and not merely or $or( ine iciency. E,UAR,O 0. TO0A,A3 SR.3 8s. RF0 )ORPORATION-BA+ERY FLOUR ,IVISION a" 7OSE 0ARIA )ON)EP)ION III3 9.R. N!. 1:32;03 Se.t. 113 200> Le"-t# !( Ser8i6e Although his nearly t$o decades o ser'ice might generally be considered or some orm o inancial assistance to shield him rom the e ects o his termination% !omada<s acts re lect a regrettable lac( o concern or his employer. & length o ser'ice +usti ies the mitigation o the penalty o dismissal% then this Court $ould be a$arding disloyalty% distorting in the process the meaning o social +ustice and undermining the e orts o labor to cleanse its ran(s o undesirables. (*2HA326 M. !6MA2A% 93. '. 3,M C63163A!&670BAM*3G ,L6H3 2&F&9&67 and 869* MA3&A C67C*1C&67 &&&% >.3. 7o. 1A52B/% 9eptember 11% 2//:) RENO FOO,S3 IN).3 a" @!r VI)ENTE +1U3 8s. Na-EaEaisa"- LaEas "- 0a"--a-a?a NL04 +ATIPUNAN !" &e#a%( !( its mem&er3 NENITA )APOR3 9.R. N!. 1:401:3 0ar6# 1A3 2010 ,AC!9: 1etitioner 3*76 ,6629 (3*76) is a manu acturer o canned meat products o $hich Ficente Mhu is the president and is being sued in that capacity. 3espondent 7enita Capor (Capor) $as an employee o 3eno ,oods until her dismissal on 6ctober 2B% 1::C. &t is a standard operating procedure o petitioner0company to sub+ect all its employees to reasonable search o their belongings upon lea'ing the company premises. 6n 6ctober 1:% 1::C% the guard on duty ound si# 3eno canned goods $rapped in nylon leggings inside Capor<s abric clutch bag. 3eno accorded Capor se'eral opportunities to e#plain her side o ten $ith the assistance o the union o icers o 7LM0

Matipunan. Hn ortunately% 3eno terminated Capor. (7LM) Matipunan iled on behal o Capor a complaint or illegal dismissal and money claims against petitioners. !he complaint prayed that Capor be paid her ull bac($ages as $ell as moral and e#emplary damages. LA ound Capor guilty o serious misconduct $hich is a +ust cause or termination (Art 252 o the Labor Code). he Labor Arbiter ound that the t o company property is tantamount to serious misconductD as such% Capor is not entitled to reinstatement and bac($ages% as $ell as moral and e#emplary damages. Moreo'er% the Labor Arbiter ruled that consistent $ith pre'ailing +urisprudence% an employee $ho commits the t o company property may be 'alidly terminated and conse)uently% the said employee is not entitled to separation pay. 6n appeal% 7L3C a irmed the Labor Arbiter<s decision but $ith modi ication granting an a$ard o inancial assistance in the orm o separation pay e)ui'alent to one0hal month pay or e'ery year o ser'ice. (Both iled M,3s and both $ere denied). !he CA a irmed the 7L3C<s a$ard o inancial assistance to Capor. ISSUE/ 4hether the grant o inancial assistance to an employee% $ho $as 'alidly dismissed or the t o company property% is correct. 1EL,/ 76. 9C upheld Labor Arbiter<s decision. !he la$ is clear. 9eparation pay is only $arranted $hen the cause or termination is not attributable to the employee<s ault% such as those pro'ided in Articles 2C5 and 2C. o the Labor Code% as $ell as in cases o illegal dismissal in $hich reinstatement is no longer easible. &t is not allo$ed $hen an employee is dismissed or +ust cause% such as serious misconduct. 8urisprudence has classi ied the t o company property as a serious misconduct and denied the a$ard o separation pay to the erring employee. 4e see no reason $hy the same should not be similarly applied in the case o Capor. 9he attempted to steal the property o her long0time employer. ,or committing such misconduct% she is de initely not entitled to an a$ard o separation pay. Length o ser'ice and a pre'iously clean employment record cannot simply erase the gra'ity o the betrayal e#hibited by a mal easant employee. Length o ser'ice is not a bargaining chip that can simply be stac(ed against the employer. A ter all% an employer0 employee relationship is symbiotic $here both parties bene it rom mutual loyalty and dedicated ser'ice. & an employer had treated his employee $ell% has accorded him airness and ade)uate compensation as determined by la$% it is only air to e#pect a long0

:: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

time employee to return such airness $ith at least some respect and honesty. !hus% it may be said that betrayal by a long0time employee is more insulting and odious or a air employer. 6n the date that the appellate court issued its 2ecision% Capor iled a Mani estation in orming the CA o her ac)uittal in the charge o )uali ied the t. 4e held that a criminal con'iction is not necessary to ind +ust cause or employment termination. 6ther$ise stated% an employee<s ac)uittal in a criminal case% especially one that is grounded on the e#istence o reasonable doubt% $ill not preclude a determination in a labor case that he is guilty o acts inimical to the employer<s interests. PL,T3 8s. INO)EN)IO B. BERBANO3 7R.3 9.R. N!. 1:A1>>3 N!8. 2;3 200> Fa6ts: Berbano $as hired by 1L2! as a Computer Assistant. -o$e'er% he alleged that he also per ormed the unctions o a 9pecialist or *492 $ho $as responsible or handling% operations and maintenance o the $hole *492 7et$or( handling net$or( database% ault clearance% database modi ication alarm monitoring% tra ic routing% trun( administration% pass$ord and tari administration and others. Being trained as *492 6MC 9pecialist% complainant claimed that respondent e#pected him to ha'e ?depth o understanding@ in continuous painsta(ing research and study. !hus% he initiated a study o ?hi0tech *492 9$itching *)uipment%@ a part o $hich is the so t$are installation o 'arious subscriber ser'ice eatures and control operation. &t is at this time that complainant tapped his brother0in0 la$<s number $ithout the latter<s (no$ledge and installed ser'ice eatures in it or study. 4hen 1L2! ound out about the unauthori"ed installation o the said eatures% Berbano admitted that he $as responsible or such installation or purposes o study and testing. A ter ormal in'estigation and inding unacceptable the complainant<s e#planation% respondent 1L2! dismissed complainant rom the ser'ice. !he Labor Arbiter ordered the reinstatement o Berbano and the payment o bac($ages. 6n appeal to the 73LC% the order $as re'ersed. -o$e'er% the CA reinstated the Labor Arbiter<s decision. Iss'e/ 4as the dismissal o Berbano $arranted= R'%i"-/ 7o. 4ell0settled is the rule that no employee shall be 'alidly dismissed rom employment $ithout the obser'ance o substanti'e and procedural due process. !he minimum standards o due process are

prescribed under Article 2BB(b) o the Labor Code o the 1hilippines. !hus% dismissal rom ser'ice o an employee is 'alid i the ollo$ing re)uirements are complied $ith: (a) substanti'e due process $hich re)uires that the ground or dismissal is one o the +ust or authori"ed causes enumerated in the Labor Code% and (b) procedural due process $hich re)uires that the employee be gi'en an opportunity to be heard and de end himsel . &n this case% procedural due process $as ollo$ed by 1L2! $hen it noti ied respondent o the complaint against him through an inter0o ice memorandum and in another inter0o ice memorandum in orming respondent that his act o installing special eatures in his brother0in0la$<s telephone line $ithout authori"ation rom petitioner constituted ?gross misconduct@ and $as ?grossly 'iolati'e o e#isting company rules and regulations%@ hence% $arranting his termination rom ser'ice. As regards substantial due process% the grounds or termination o employment must be based on +ust or authori"ed causes. !he notice o termination sent by petitioner to respondent indicated that the latter $as dismissed rom ser'ice due to unauthori"ed installation o ser'ice eatures in his brother0in0la$<s telephone line% $hich allegedly constituted gross misconduct. Misconduct has been de ined as improper or $rong conduct. &t is the transgression o some established and de inite rule o action% a orbidden act% a dereliction o duty% $ill ul in character% and implies $rong ul intent and not mere error o +udgment. 6rdinary misconduct $ould not +usti y the termination o ser'ices o the employee as the Labor Code is e#plicit that the misconduct must be serious. !o be serious% the misconduct must be o such gra'e and aggra'ated character and not merely tri'ial and unimportant. 9uch misconduct% ho$e'er serious% must ne'ertheless be in connection $ith the employee<s $or( to constitute +ust cause or his separation. As ampli ied by +urisprudence% misconduct% to be a +ust cause or dismissal% must (a) be seriousD (b) relate to the per ormance o the employee<s dutiesD and (c) sho$ that the employee has become un it to continue $or(ing or the employer. Moreo'er% in National +a'or ,elations %ommission v. )algarino% this Court stressed that ?JiKn order to constitute serious misconduct $hich $ill $arrant the dismissal o an employee under paragraph (a) o Article 2C2 o the Labor Code% it is not su icient that the act or conduct complained o has 'iolated some established rules or policies. &t is e)ually important and re)uired that the act or conduct must ha'e been per ormed $ith $rong ul intent.@

1// E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

!he 9upreme Court ound that the misconduct o respondent is not o serious nature as to $arrant respondent<s dismissal rom ser'ice. !he records o this case are bere t o any sho$ing that the alleged misconduct $as per ormed by respondent $ith $rong ul intent. 6n the contrary% respondent readily admitted ha'ing installed the ser'ice eatures in his brother0in0la$<s telephone line or purposes o study and research $hich could ha'e bene itted petitioner. Moreo'er% as pointed out by the appellate court% respondent<s misconduct did not result in any economic loss on the part o petitioner since the ser'ice eatures $ere not yet a'ailable in the mar(et at the time respondent caused its unauthori"ed installation. !he penalty o dismissal rom ser'ice is not commensurate to respondent<s o ense. Although petitioner% as an employer% has the right to discipline its erring employees% e#ercise o such right should be tempered $ith compassion and understanding. !he magnitude o the in raction committed by an employee must be $eighed and e)uated $ith the penalty prescribed and must be commensurate thereto% in 'ie$ o the gra'ity o the penalty o dismissal or termination rom the ser'ice. !he employer should bear in mind that in termination cases% $hat is at sta(e is not simply the employee<s +ob or position but his 'ery li'elihood. PLANTATION BAY RESORT B SPA B EFREN BELAR0INO3 8s. RO0EL S. ,UBRI)O3 et.a% 9.R. N!. 1<221:3 ,e6. 43 200> Fa6ts/ &n compliance $ith 3A :1A; (Comprehensi'e 2angerous 2rugs Act)% 1lantation Bay conducted surprise random drug tests on 122 unsuspecting 'ictims. .errr. . .employees. !he tests $ere done $ith the assistance o 171 96C6 (scene o the crime operations) $ith 2 labs conducting the tests: (1) MA3!*LL drug lab administered the initial tests and (2) 1-&L. 23H> 9C3**7&7> LAB conducted the con irmatory tests. 3espondents 3omel 2ubrico% >od rey 7gu+o and 8ulius Filla lor $ere among 21 employees ound positi'e or use o methamphetamine hydrochloride (shabu). &n compliance $ith se'eral memoranda% they submitted their e#planations on the results o the tests% $hich 1lantation Bay ound unsatis actory hence% they $ere dismissed. Labor Arbiter ound them guilty o serious misconduct and ruled that there $as no illegal dismissal. 7L3C re'ersed saying there $as illegal dismissal and that respondents $ere not really using drugs[ CA a irmed 7L3C decision based on e'idence $hich sho$ed a discrepancy bet$een the tests conducted by 1hil. 2rug and Martell. 1lantation

Bay ob+ected to the employees< )uestioning the 'eracity o the tests only in the 7L3C Motion or 3econ% an issue not raised during the proceedings. Additionally% they maintain that in terminating the ser'ices o respondents% they relied on the results o the random drug tests underta(en by an accredited and licensed drug testing acility% and i the results turned out to be )uestionable or erroneous% they should not be made liable there or. Iss'e/ 1. 4hether or not the 7L3C erred in considering the ne$ issue on the 'eracity o the tests conducted. 2. 4hether or not there $as illegal dismissal on the part o 1lantation Bay. R'%i"-/ 1etition is bere t o merit. (a) 7L3C did not err. !echnical rules o procedure are not strictly adhered to in labor cases consistent $ith the Constitutional mandate to a ord protection to labor. ?!he 7L3C did not err in considering the issue o the 'eracity o the con irmatory tests e'en i the same $as raised only in respondents< Motion or 3econsideration o its 2ecision% it being crucial in determining the 'alidity o respondents< dismissal rom their employment. !echnical rules o procedure are not strictly adhered to in labor cases. &n the interest o substantial +ustice% ne$ or additional e'idence may be introduced on appeal be ore the 7L3C. 9uch mo'e is proper% pro'ided due process is obser'ed% as $as the case here% by gi'ing the opposing party su icient opportunity to meet and rebut the ne$ or additional e'idence introduced.@ (b)Ges. &llegal dismissal. 1etition li(e$ise ails on the merits. 1lantation Bay ailed to pro'e that employees used drugs based on the doubt ul test results. *#hibit A (7ote that the con irmatory test sho$ed earlier results that the initial test L6L) 7ame 3omel 2ubrico 2rug !est Hrine recei'ed /:P2:P/. p.m. Hrine recei'ed /:P2:P/. p.m. Hrine recei'ed /:P2:P/. p.m. Con irmatory !est sample &ssued on on /:P2:P/. at 5:;B at ;:1. p.m. sample &ssued on on /:P2:P/. at 5:;B at ;:2. p.m. sample &ssued on on /:P2:P/. at .:1; at ;:52 p.m.

>od rey 7gu+o

8ulius Filla lor

1/1 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

4here there is no sho$ing o a clear% 'alid and legal cause or termination% the la$ considers the case a matter o illegal dismissal. !he burden is on the employer to pro'e that the termination $as or a 'alid and legal cause. 4-*3*,63*% the 1etition is 2*7&*2. WILFRE,O 0. BARON3 et.a%. 8s. NLR) a" 0A9I) SALES3 IN). re.rese"te &$ 7OSE Y. SY3 9.R. N!. 1<22>>3 Fe&. 223 2010 Fa6ts/ !he president and general manager o the M9& ordered an in'entory to be conducted and e'en ordered Baron to be temporarily relie'ed or the audit and the employees $ere instructed (1) to gi'e all the support needed by the audit teamD (2) to surrender all (eys and documentsD (5) not to bring out anything belonging to managementD and (.) to undergo a search be ore lea'ing the o ice. 1etitioners% ho$e'er% re used to cooperate in the audit process% and therea ter% re rained rom reporting or $or(. 7onetheless% the audit $as completed% and an &nternal Audit 3eport $as submitted. According to the audit team% there $ere se'eral irregularities in the operations o M9&. !he accounting system designed by Baron $as generally $ea( and compliance to procedures $as not strictly implemented. !he team $as also con'inced that Baron abused his authority and too( ad'antage o the la#ity o the system he designed. -ence% M9& decided to terminate their ser'ices. !he petitioners iled a complaint in the 7L3C that they $ere dismissed $himsically and capriciously in a 'ery oppressi'e manner% $ithout 'alid cause and $ithout due process o la$. Iss'es/ (1) 4ere petitioners 'alidly dismissed on the grounds o gra'e misconduct and loss o con idence= (2) 4ere petitioners accorded their right to due process $hen they $ere terminated rom their employment= R'%i"- 2First Iss'e4/ Ges. !he Constitution% statutes and +urisprudence uni ormly mandate that no $or(er shall be dismissed e#cept or a +ust or 'alid cause pro'ided by la$% and only a ter due process is properly obser'ed. !he +ust causes or termination o employment are enumerated in Article 2C2 o the Labor Code% as amended. ,or there to be a 'alid dismissal based on loss o trust and con idence% the breach o trust must be $ill ul% meaning it must be done intentionally% (no$ingly% and purposely% $ithout +usti iable e#cuse. !he basic premise or dismissal on the ground o loss o con idence is that the employees concerned hold a position o trust and con idence. &t is the breach o this trust that results in

the employer<s loss o con idence in the employee. &n the instant case% $e note that petitioners $ere holding the ollo$ing positions: 4il redo Baron 0 operations manager% 8omar dela 3osa and 8e erson dela 3osa 0 sales representati'es% Cynthia 8unatas and Mari e Ballesca 0 accounting cler(s% and Lourdes 3abago 0 $arehouse chec(er. Clearly% petitioners $ere holding positions imbued $ith trust and con idence% $hich are deemed to ha'e been reposed on them by 'irtue o the nature o their $or(. 2Se6!" Iss'e4/ Ges. 3ecords sho$ that respondents complied $ith the t$o0notice rule. 6n 'arious dates% t$o J2K separate notices $ere gi'en the employees. &n the irst notice% the acts imputed against them $ere enumerated $ith a call or an in'estigation% $hile the second notice contained M9&<s decision terminating them a ter they ailed to respond to the irst notice. !hus% the employees< inaction is attributable to them. 2ue process is not 'iolated $here a person is gi'en the opportunity to be heard but chooses not to gi'e his side o the case. *'idence sho$s that petitioners $ere properly noti ied o the charges against them. !hey recei'ed letters instructing them to e#plain $ithin se'enty0t$o (B2) hours rom receipt $hy they should not be dismissed or their o enses. !hey $ere li(e$ise $arned that ailure to reply $ould mean that they $ere $ai'ing their right to present e'idence in their a'or. 7err$ 0a.i%i3 8s. P#i%. B's ra&&it %i"es i"6. @ Nati8i a Nis6e3 9.R. N!. 1;2A0:3 7'%$ 2;3 2011 An past in ractions already penali"ed be still considered in penali"ing an employee $ho again commits another similar in raction= !his is the issue raised by 7ardo in his case. FA)TS/ 7ardo $as a bus conductor in a bus transportation company (13BL&) $ith a salary o 1;1/ per trip. &n one o the trips% he $as caught by the bus inspector e#tending a ree ride to a police o icer. 4hen in'estigated and told to e#plain% he said that the police o icer $as on duty and re used to pay the are. ,or this in raction% 7ardo $as suspended or 5/ days and $arned no to repeat the same. But barely a year later he $as again caught e#tending a ree ride to a ormer employee. !his time he said that the employee misrepresented himsel to be a current employee by 'irtue o a company &2 he presented to him% so he ga'e him a ree ride. 7e'ertheless or such in raction he $as again suspended $ith the same $arning. ,or the third time% ho$e'er% $hile on duty en route rom Manila to 1angasinan% 7ardo $as again caught

1/2 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

by the ield inspector e#tending a ree ride to the $i e o a co0dri'er o the bus company $ho did not ha'e a ree pass. 9o% upon order o the inspector% the $i e $as immediately issued a passenger tic(et or $hich she paid 1;/. 9o 7ardo $as again pre'enti'ely suspended and directed to appear in an administrati'e in'estigation. At the hearing% 7ardo e#plained that he ga'e a ree ride to the $i e because o gratitude to her $ho assisted him in his inancial troubles. -e admitted that $hat he had done $as a gra'e o ense and he $as ready to accept $hate'er suspension the company may impose. But this time instead o merely suspending him% the bus company terminated his employment or committing a serious irregularity or the third time. 7ardo )uestioned his dismissal as illegal in a complaint iled $ith the 7L3C. -e argued that the penalty o dismissal is grossly disproportionate to the in raction he committed because his act o e#tending a ree ride $as not deliberate and $as done on a $rong assumption that immediate amily members o company employees are entitled to ree rides. -e insisted that his pre'ious t$o o enses o not issuing are tic(ets to a police o icer and a ormer company employee cannot be used as bases or his termination considering that his actuations or those o enses $ere +usti ied under the circumstances and that he $as already penali"ed or all these past 'iolations. -e said that his last in raction should merit only a 5/0day suspension. And the Labor Arbiter (LA) agreed $ith him. !he LA declared that 7ardo $as illegally dismissed. !he LA opined that his actuations merited a less puniti'e penalty such as suspension or 5/ days $hich he already ser'ed during his pre'enti'e suspension. 9o the LA ordered 7ardo<s reinstatement $ithout loss o seniority rights% payment o bac(0$ages% 15th month pay and re und o the bond. 4as the LA correct= 6pinion ( Article M3ec )% pagematch: 1% sectionmatch: 1 about this ad N!. Nar ! ?as a?are t#at t#e i"(ra6ti!" #e 6!mmitte 6!"stit'te a -ra8e !((e"se &'t #e sti%% i"siste i" 6!mmitti"- t#e same !'t !( -ratit' e t! t#e .asse"-er. !here $as deliberate intent on his part to commit the 'iolation in order to repay a personal debt at the e#pense o the company. -e chose to 'iolate company rules or his bene it $ithout regard to his responsibilities to the company. & not or the inspector $ho disco'ered the incident% the company $ould ha'e been de rauded o the transportation are.

7ardo ought to ha'e (no$n better than to repeat the same 'iolation as he is presumed to be thoroughly ac)uainted $ith the prohibitions and restrictions against e#tending ree rides. As a &'s 6!" '6t!r3 ?#!se 'ties .rimari%$ i"6%' e t#e 6!%%e6ti!" !( tra"s.!rtati!" (ares3 ?#i6# is t#e %i(e&%!! !( t#e 6!m.a"$3 #e s#!'% #a8e e5er6ise t#e reJ'ire i%i-e"6e in the per ormance thereo . 9o his habitual ailure to e#ercise such diligence is not tri'ial and cannot be ta(en or granted. Although 7ardo already su ered the corresponding penalties or his past misconduct% those in ractions are still rele'ant in assessing his liability or the last 'iolation in order to determine the appropriate penalty. !o sustain 7ardo<s argument that past 'iolation should no longer be considered is to disregard the $arning pre'iously issued to him. -is position is imbued $ith trust and con idence because it in'ol'es handling money and ailure to collect the proper are rom the riding public constitutes a gra'e o ense $hich +usti ies dismissal (Mapili 's. 1hilippine 3abbit Bus Lines &nc.% >.3. 1B2;/A% 8uly 2B% 2/11). 9r!ss a" 1a&it'a% Ne-%e6t )ases/ Tres Re$es 8s. 0a5imQs Tea 1!'se 23>< S)RA 2<<4 FA)TS/ 3espondent Ma#imQs !ea -ouse (hereina ter Ma#imQs or bre'ity) had employed 3eyes as a dri'er since 6ctober 1::;. -e $as assigned to its M.-. del 1ilar 9treet% *rmita% Manila branch. -is $or(ing hours $ere rom ;:// 1.M. to 5:// A.M.% and among his duties $as to etch and bring to their respecti'e homes the employees o Ma#imQs a ter the restaurant closed or the day. 0 &n the $ee hours o the morning o 9eptember 2B% 1::B% petitioner $as dri'ing a Mitsubishi L5// 'an and $as sent to etch some employees o 9a'annah Moon% a ballroom dancing establishment in Libis% Uue"on City. 1etitioner complied and too( his usual route along 8ulia Fargas 9treet in 1asig City. -e $as headed to$ards Meralco A'enue at a cruising speed o ;/ to A/ (ilometers per hour% $hen he noticed a ten0$heeler truc( coming his $ay at ull speed despite the act that the latterQs lane had a red signal light on. 1etitioner maneu'ered to a'oid a collision% but nonetheless the 'an he $as dri'ing struc( the truc(. As a result% petitioner and se'en o his passengers sustained physical in+uries and both 'ehicles $ere damaged. 0 !he management o Ma#imQs re)uired petitioner to submit% $ithin orty0eight hours% a $ritten e#planation as to $hat happened that early morning o 9eptember 2B% 1::B. -e complied but his employer

1/5 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

ound his e#planation unsatis actory and as a result he $as pre'enti'ely suspended or thirty (5/) days. 9ubse)uently% Ma#imQs terminated petitioner or cause. 0 ,eeling that the 'ehicular accident $as neither a +ust nor a 'alid cause or the se'erance o his employment% petitioner iled a complaint or illegal dismissal doc(eted as 7L3C 7C3 Case 7o. //0120 /CBB50:B. &n his decision% the Labor Arbiter ound that petitioner $as grossly negligent in ailing to a'oid the collision. &nstead o iling the re)uisite pleading or appeal% petitioner iled a IMotion or 1artial 3econsiderationI $ith the 7L3C. !he 7L3C opted to treat petitionerQs motion as an appeal. !he 7L3C re'ersed the decision o the Labor Arbiter on the ground that there $as no negligence on petitionerQs part. 3espondents mo'ed or reconsideration o the oregoing decision% but said motion $as denied by the Commission in its resolution 0 3espondents then iled a special ci'il action or certiorari $ith the Court o Appeals% !he appellate court decided in a'or o the employer and its manager. -ence% the instant case. ISSUE: 467 petitioner<s dismissal rom employment is 'alid and legal 1EL,/ 763 !he issue o $hether a party is negligent is a )uestion o act. As a rule% the 9upreme Court is not a trier o acts and this applies $ith greater orce in labor cases. But $here the indings o the 7L3C and the Labor Arbiter are contradictory% as in this case% the re'ie$ing court may del'e into the records and e#amine or itsel the )uestioned indings. 0 Hnder the Labor Code% gross negligence is a 'alid ground or an employer to terminate an employee. >ross negligence is negligence characteri"ed by $ant o e'en slight care% acting or omitting to act in a situation $here there is a duty to act% not inad'ertently but $ill ully and intentionally $ith a conscious indi erence to conse)uences inso ar as other persons may be a ected. &n this case% ho$e'er% there is no substantial basis to support a inding that petitioner committed gross negligence. 0 &n sustaining the Labor ArbiterQs inding that petitioner $as grossly negligent% the appellate court stressed that the cited episode $as the second 'ehicular accident in'ol'ing petitioner% and as such it Imay clearly re lect against JhisK attitudinal character as a dri'er.I !he Court notes% ho$e'er% that the Commission ound that in the irst 'ehicular accident in'ol'ing petitioner Ihe $as the 'ictim o the rec(less and negligent act o a ello$ dri'er.I An imputation o habitual negligence cannot be dra$n against

petitioner% since the earlier accident $as not o his o$n ma(ing. !he test to determine the e#istence o negligence is as ollo$s: 2id petitioner in doing the alleged negligent act use that reasonable care and caution $hich an ordinarily prudent person $ould use in the same situation= &t is not disputed that petitioner tried to turn le t to a'oid a collision. !o put it other$ise% petitioner did not insist on his right o $ay% not$ithstanding the green light in his lane. 9till% the collision too( place as the ten0$heeler careened on the $rong lane. Clearly% petitioner e#erted reasonable e ort under the circumstances to a'oid in+ury not only to himsel but also to his passengers and the 'an he $as dri'ing. !o hold that petitioner $as grossly negligent under the circumstances goes against the actual circumstances sho$n. &t appears to us he $as more a 'ictim o a 'ehicular accident rather than its cause. 0 !here being no clear sho$ing that petitioner $as culpable or gross negligence% petitionerQs dismissal is illegal. Disposition 1etition granted. 9!% e" T#rea +"itti"- 8s. NLR) 20ar6# 113 1>>>4 304 S)RA ;20 FA)TS/ 9e'eral employees o >olden !hread Mnitting &ndustries (>!M) $ere dismissed or di erent reasons. 2 employees $ere allegedly or slashing the company<s products (to$els)% 2 or redundancy% 1 or threatening the personnel managerand 'iolating the company rules% and 1 or abandonment o $or(. !he laborers iled complaints or illegal dismissal. !hey allege that the company dismissed them in retaliation or establishing and being members o the Labor Hnion. >!M% on the other hand% contend that there $ere 'alid causes or the terminations. !he dismissals $ere allegedly a result o the slashing o their products% rotation o $or(% $hich in turn $as caused by the lo$ demand or their products% and abandonment o $or(. 43! to the cases in'ol'ing the slashing o their products and threats to the personnel manager% the dismissals $ere in e ect a orm o punishment. !he labor arbiter ruled partially in a'or o >!M. -e said that there $as no sho$ing that the dismissals $ere in retaliation or establishing a union. -e% ho$e'er% a$arded separation pay to some employees.

1/. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

0 7L3C% ho$e'er% appreciated the e'idence di erently. &t held that there $as illegal dismissal and ordered reinstatement. ISSUE/ 467 there $as illegal dismissal 1EL,/ G*9 3atio 2ismissal is the ultimate penalty that can be meted to an employee. &t must there ore be based on a clear and not on an ambiguous or ambi'alent ground. Reas!"i"-/ 43! to the case in'ol'ing slashing o to$els% the employees $ere not gi'en procedural due process. !here $as no notice and hearing% only outright denial o their entry to the $or( premises by the security guards. !he charges o serious misconduct $ere not su iciently pro'ed. 43! to the employees dismissed or redundancy% there $as also denial o procedural due process. -earing and notice $ere not obser'ed. !hus% although the characteri"ation o an employee<s ser'ices is a management unction% it must irst be pro'ed $ith e'idence% $hich $as not done in this case. !he company cannot merely declare that it $as o'ermanned. 43! to the employee dismissed or disrespect% the 9C belie'ed the story 'ersion o the company ($hich essentially said that the personnel manager $as threatened upon mere ser'ice o a suspension order to the employee)% but ruled that the dismissal could not be upheld. ?the dismissal $ill not be upheld $here it appears that the employee<s act o disrespect $as pro'o(ed by the employer. ### the employee hurled incenti'es at the personnel manager because she $as pro'o(ed by the baseless suspension imposed on her. !he penalty o dismissal must be commensurate $ith the act% conduct% or omission to the employee.@ !he dismissal $as too harsh a penaltyD a suspension o 1 $ee( $ould ha'e su iced. ?>!M e#ercised their authority to dismiss $ithout due regard to the pro'isions o the Labor Code. !he right to terminate should be utili"ed $ith e#treme caution because its immediate e ect is to put an end to an employeeQs present means o li'elihood $hile its distant e ect% upon a subse)uent inding o illegal dismissal% is +ust as pernicious to the employer $ho $ill most li(ely be re)uired to reinstate the sub+ect employee and grant him ull bac( $ages and other bene its. 2isposition 2ecision A,,&3M*2 7! 8s. NLR) 2Fe&. 23 20004 I6a?at 8s. NLR) 27'"e 203 20004 R. Tra"s.!rt )!r.. 8s. EIa" ra 9R. N!. 14<A0<3 0a$ 203 2004

U"i!" 0!t!r )!r.. 8s. NLR) 29.R. 1A>;3<3 ,e6. >3 20044 RP ,i"-%asa" )!"str'6ti!" I"6. 8s. Atie"*a3 et.a%. 9R NO. 1A:1043 7'"e 2>3 2004 FA)TS/ !his is an appeal rom the decision and resolution o the Court o Appeals% dated 8anuary 1B% 2//1 and 6ctober 5/% 2//2% respecti'ely% upholding the inding o constructi'e dismissal against petitioner. 1etitioner 3.1. 2inglasan Construction% &nc. pro'ided +anitorial ser'ices to 1ilipinas 9hell 3e inery Corporation (9hell Corporation) in Batangas City. 1ri'ate respondents Mariano Atien"a and 9antiago Asi ser'ed as petitioner<s +anitors assigned $ith 9hell Corporation since 1:A2 and 1:B5% respecti'ely. 1ri'ate respondents claim that on 8uly B% 1::.% petitioner called or a meeting and in ormed pri'ate respondents and three (5) other employees that their employment $ith 9hell Corporation $ould be terminated e ecti'e 8uly 1;% 1::.. !hey $ere told that petitioner lost the bidding or +anitorial ser'ices $ith 9hell. 1etitioner noti ied respondents that they may reapply as helpers and redeployed in other companies $here petitioner had subsisting contracts but they $ould recei'e only a minimum $age. 1ri'ate respondents re used as the o er $ould be a orm o demotion 000 they $ould lose their seniority status and $ould not be guaranteed to $or( at regular hours. 0 &n 2ecember 1::.% pri'ate respondents iled a complaint against petitioner or non0payment o salary $ith the district o ice o the 2epartment o Labor and *mployment (26L*) in Batangas City. &n ,ebruary 1::;% during the conciliation proceedings $ith the 26L*% petitioner sent notices to respondents in orming them that they $ould be reinstated $ith 9hell Corporation as soon as they submit their barangay clearance% medical certi icate% picture and in ormation sheet as per the ne$ identi ication badge re)uirements o 9hell Corporation. !herea ter% petitioner again met $ith pri'ate respondents% $ho $ere then accompanied by the barangay captain and a councilor% and the latter con irmed to the ormer their $illingness to be reinstated. 1ri'ate respondents duly submitted the documents re)uired or their reinstatement. &n May 1::;% respondents demanded the payment o their bac($ages starting rom 8uly 1;% 1::.. 6n 8une 1% 1::;% petitioner noti ied pri'ate respondents that they ha'e been declared absent $ithout lea'e (A46L) as they allegedly ailed to signi y their intention to return to $or( and submit the badge re)uirements or their reinstatement. 6n 8une 15% 1::;% pri'ate respondents $rote petitioner and insisted that they had complied $ith the badge

1/; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

re)uirements. Accompanied by the barangay o icials% pri'ate respondents attempted to meet $ith the o icers o petitioner but the latter re used to dialogue $ith them. As proo o their compliance $ith the 9hell re)uirements% pri'ate respondents submitted to the 26L* their #0ray results% dated May 1B and 1:% 1::; and their barangay certi ication% dated May 15% 1::;. !he case $as e'entually re erred to the 7ational Labor 3elations Commission (7L3C) or compulsory arbitration. 1ri'ate respondents amended their complaint charging petitioner $ith illegal dismissal and non0payment o 15th month pay% $ith a claim or payment o attorney<s ees and litigation e#penses% and a prayer or reinstatement $ith payment o ull bac($ages rom 8uly 1;% 1::.. 0 1etitioner ga'e a di erent 'ersion o the incident. &t allegedly in ormed respondents and the other a ected employees that they $ould be deployed to petitioner<s other principal companies but that their $or( $ould be di erent. *#cept or pri'ate respondents% all the a ected employees accepted its o er o redeployment and reported bac( to $or(. 3espondents ailed to submit a resignation letter to signi y their intention not to return to $or(. !herea ter% during the pendency o the labor case% petitioner in t$o (2) separate notices% in ormed pri'ate respondents that they could be reinstated at 9hell Corporation $ith no diminution in their salary pro'ided that they submit the documents or the ne$ identi ication badge re)uirement o 9hell Corporation. 1ri'ate respondents% ho$e'er% re used to return to $or( until they $ere paid their bac($ages. Conse)uently% petitioner $as constrained to consider them as ha'ing abandoned their $or( and to terminate their employment on 9eptember 1:% 1::;. 1etitioner% thus% +usti ied the dismissal o pri'ate respondents on the grounds o gross and habitual neglect o duties and abandonment o $or(. 6n 9eptember 5% 1::C% labor arbiter Andres Oa'alla rendered a decision inding that pri'ate respondents $ere illegally dismissed rom ser'ice and ordering their reinstatement. 0 6n appeal% the decision o the labor arbiter $as a irmed by the 7L3C. 4ithout mo'ing or reconsideration% petitioner immediately iled a petition or certiorari be ore the Court o Appeals but petitioner su ered the same ate. 6n the procedural aspect% the Court o Appeals ruled that the petition could not prosper as petitioner ailed to mo'e or a reconsideration o the 7L3C decision. 6n the substanti'e issues% the appellate court upheld the indings o the labor arbiter and the 7L3C that: (1) pri'ate respondents $ere constructi'ely dismissed as petitioner<s o er o reassignment in'ol'ed a diminution in pay and demotion in ran( that made their continued employment unacceptableD and% (2)

pri'ate respondents could not be considered to ha'e abandoned their $or(. 0 As petitioner<s motion or reconsideration $as denied% petitioner iled this appeal ISSUES 1. 467 the respondents< dismissal is +usti ied 2. 467 the Court o Appeals% contrary to e#isting la$% erred in dismissing the petition or certiorari and a irming the decision o the 7L3C inso ar as the monetary a$ard is concerned 1EL, 1. (atio &n an illegal dismissal case% the onus pro'andi rests on the employer to pro'e that its dismissal o an employee is or a 'alid cause. &n the case at bar% petitioner ailed to discharge its burden. &t ailed to establish that pri'ate respondents deliberately and un+usti iably re used to resume their employment $ithout any intention o returning to $or(. 0 !o constitute abandonment o $or(% t$o (2) re)uisites must concur: irst% the employee must ha'e ailed to report or $or( or must ha'e been absent $ithout +usti iable reasonD and second% there must ha'e been a clear intention on the part o the employee to se'er the employer0employee relationship as mani ested by o'ert acts. Abandonment as a +ust ground or dismissal re)uires deliberate% un+usti ied re usal o the employee to resume his employment. Mere absence or ailure to report or $or(% a ter notice to return% is not enough to amount to abandonment. (easoning 0 &n the case at bar% the e'idence o pri'ate respondents negates petitioner<s theory that they abandoned their $or(. ,irstly% pri'ate respondents reported bac( to petitioner<s o ice a number o times e#pressing their desire to continue $or(ing or petitioner $ithout demotion in ran( or diminution o salary. !his act $as established by the corroborating testimony o barangay councilman Falentin Clerigo $ho% together $ith the barangay captain% accompanied pri'ate respondents to petitioner<s o ice at least ten (1/) times to negotiate their redeployment on more acceptable terms. 9econdly% in see(ing reinstatement% pri'ate respondents also sought the inter'ention o the 26L* to arbitrate the labor issue bet$een the parties. !hirdly% pri'ate respondents submitted the barangay clearances and #0ray results re)uired rom them by petitioner or their reinstatement as $itnessed by the barangay o icials. Lastly% the records $ould bear that pri'ate respondents lost no time and sought their reinstatement by iling an illegal dismissal case against petitioner% $hich act is clearly inconsistent $ith a desire to se'er employer0

1/A E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

employee relations and abandon their $or(. All these o'ert acts on the part o pri'ate respondents negate petitioner<s claim o abandonment o $or( and pro'e beyond doubt their stead ast desire to continue their employment $ith petitioner and be reinstated to their ormer position. Moreo'er% petitioner ailed to e#plain $hy it $aited or 1. months rom the time pri'ate respondents allegedly did not return to $or( be ore it dismissed them or being A46L. 0 4e hold that pri'ate respondents $ere constructi'ely dismissed by petitioner. Constructi'e dismissal is de ined as )uitting $hen continued employment is rendered impossible% unreasonable or unli(ely as the o er o employment in'ol'es a demotion in ran( and diminution o pay. &n the case at bar% petitioner committed constructi'e dismissal $hen it o ered to reassign pri'ate respondents to another company but $ith no guaranteed $or(ing hours and payment o only the minimum $age. !he terms o the redeployment thus became unacceptable or pri'ate respondents and oreclosed any choice but to re+ect petitioner<s o er% in'ol'ing as it does a demotion in status and diminution in pay. !herea ter% or si# (A) months% pri'ate respondents $ere in a loating status. &nterestingly% it $as only a ter pri'ate respondents iled a complaint $ith the 26L* that petitioner bac(trac(ed in its position and o ered to reinstate pri'ate respondents to their ormer +ob in 9hell Corporation $ith no diminution in salary. *'entually% ho$e'er% petitioner unilaterally $ithdre$ its o er o reinstatement% re used to meet $ith the pri'ate respondents and instead decided to dismiss them rom ser'ice. 2. 6n the second issue% petitioner cannot impugn (!r t#e (irst time the computation o the monetary a$ard granted by the labor arbiter to pri'ate respondents. Doctrine !he settled rule is that issues not raised or 'entilated in the court a )uo cannot be raised or the irst time on appeal as to do so $ould be o ensi'e to the basic rules o air play and +ustice. !he computation o monetary a$ard granted to pri'ate respondents is a actual issue that should ha'e been posed at the arbitration le'el $hen the a$ard $as irst granted by the labor arbiter $ho recei'ed and e'aluated the e'idence o both parties% or% at the latest% raised by petitioner in its appeal $ith the 7L3C. 0 1etitioner omitted to do any o these. All throughout the proceedings belo$% rom the labor arbiter to the 7L3C% and e'en in its petition be ore the Court o Appeals% petitioner repeatedly pounded only on the sole issue o the 'alidity o its dismissal o pri'ate respondents. !hus% at this late stage o the proceedings% it cannot as( the Court to re'ie$ the bases and 'eri y the correctness o the labor arbiter<s computation o the monetary a$ard $hich it ne'er assailed belo$. A irst0hand e'aluation o the

e'idence o the parties upon $hich the monetary a$ard is based belongs to the labor arbiter. !his Court is not a trier o acts and actual issues are improper in a petition or re'ie$ on certiorari. Li(e$ise% the Court notes that i" seeEi"rei"stateme"t a" .a$me"t !( t#eir m!"etar$ 6%aims3 .ri8ate res.!" e"ts #a8e tra8erse a %!"- a" i((i6'%t .at#. !his case has passed the 26L*% the labor arbiter% the 7L3C% the Court o Appeals and no$ this Court% $ith the inding o illegal dismissal ha'ing been consistently a irmed in each stage. 1ri'ate respondents had been rendering +anitorial ser'ices as early as 1:A2 and% at the time o their dismissal% $ere recei'ing a measly 1.%///.// monthly salary. &t is time to put a period to pri'ate respondents< tra'ail. & there is anything that rustrates the search or +ustice by the poor% it is the endless search or it. )!sm!s B!tt%i"- )!r.. 8s. Pa&%! Na-rama 9.R. 1:4403 0ar6# 43 200< Fa6ts/ 3espondent 1ablo 7agrama% 8r. $as initially employed by petitioner as a maintenance mechanic on 8une 2.% 1::5 at the Cosmos 1lant in Cauayan% &sabela. 6n 9eptember 1B% 1::A% he $as elected by the local union as chie shop ste$ard. 3espondent $as designated by petitioner as $aste $ater treatment operator e ecti'e 9eptember 2B% 1:::. 1etitioner hired Clean ,lo$ 1hilippines% &nc. to conduct training seminars to ac)uaint petitioner<s personnel on the operations o the $ater treatment plant. 3espondent $as instructed to attend the seminar to be held on 9eptember 2B05/% 1:::. -e ailed to attend the irst t$o (2) days o the seminar. &n a letter by his immediate super'isor% 8osephine 2. Calacien% dated 9eptember 2:% 1:::% respondent $as in ormed that charges o abandonment o duty and gross insubordination had been lodged against him. -e $as re)uired to submit his $ritten e#planation. 3espondent iled his e#planation on 9eptember 5/% 1:::. -e contended that he had to attend to an administrati'e hearing or ello$ unionists $hich $ere held at 9antiago% &sabelaD that be ore he $ent% he irst secured permission rom the plant controller. -e a'erred that as a union o icial% he is obligated to attend to the problems o his ello$ union members. Iss'e/ &s the dismissal based on the grounds o abandonment and gross insubordination 'alid= R'%i"-/ There is no abandonment and gross insubordination.

1/B E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

!$o (2) elements must be satis ied or an employee to be guilty o abandonment. !he irst is the ailure to report or $or( or absence $ithout 'alid or +usti iable reason. !he second is a clear intention to se'er the employer0employee relationship. !he second element is the more determinati'e actor and must be e'inced by o'ert acts. Li(e$ise% the burden o proo is on the employer to sho$ the employee<s clear and deliberate intent to discontinue his employment $ithout any intention o returningD mere absence is not su icient. ,irst% respondent<s absence $as +usti ied under the circumstances. -e $as a shop ste$ard% $hich recent +urisprudence )uali ies as a union o icer. As an o icer% he had a 'alid reason to attend the hearing o his union brothers. -e also as(ed or and $as gi'en permission as can be seen rom the minutes o his hearing. 1etitioner does not contest this act. 1ermission negates any possibility o respondent abandoning his +ob. As to the second re)uisite% 4e are not con'inced that respondent intended to se'er the employer0employee relationship $ith Cosmos. -e immediately complied $ith the memo re)uiring him to e#plain his absence. -is ailure to report directly to his Uuality Assurance 9uper'isor and Analyst can be dismissed as ailure to properly understand the instructions he $as gi'en. Moreo'er% respondent iled a complaint or illegal dismissal.K A complaint or illegal dismissal sho$s a desire to continue $or(. Ferily% a re'ie$ o the e'idence sho$s that both elements o abandonment are lac(ing. ,or gross insubordination% also called ?$ill ul disobedience o a la$ ul order%@ to lie% t$o (2) re)uisites are also necessary. ,irst% the assailed conduct must ha'e been intentional and characteri"ed by a $rong ul and per'erse attitude.K 9econd% the order 'iolated must ha'e been reasonable% la$ ul% and made (no$n to the employee and should pertain to the duties $hich he has been engaged to discharge. !here is no )uestion that orders to attend the seminar are la$ ul instructions by petitioner. !he irst element o gross insubordination% ho$e'er% is lac(ing. A re'ie$ o the records sho$s that respondent<s ailure to report to his )uality assurance super'isor and ailure to ully attend the seminar $as in no $ay tainted by a $rong ul or per'erse attitude. -is ailure to secure a clearance rom Clean ,lo$ $as due to his attendance to his union duties. -ence% there is no gross insubordination.

NATIONWI,E SE)URITY AN, ALLIE, SERVI)ES3 IN).3 8s. RONAL, P. VAL,ERA0A3 9.R. N!. 1<::143 Fe&r'ar$ 233 2011 Fa6ts/ 3espondent 3onald Falderama (Falderama) $as hired by 7ation$ide 9ecurity and Allied 9er'ices (79A9) as security guard on April 1C% 2//2. -e $as assigned at the 1hilippine -eart Center (1-C)% Uue"on City% until his relie on 8anuary 5/% 2//A. Falderama $as not gi'en any assignment therea ter. !hus% on August 2% 2//A% he iled a complaint or constructi'e dismissal and nonpayment o 15th month pay% $ith prayer or damages against petitioner and 3omeo 7olasco. -o$e'er% 79A9 alleged that Falderama $as not constructi'ely or illegally dismissed% but had 'oluntarily resigned. 79A9 a'erred that Falderama has committed serious 'iolations o the security rules in the $or(place. And by the order o the 6perations Manager% he $as relie'ed rom his post at the 1hilippine -eart Center and $as directed to report to the o ice. 2espite his 'oluntary resignation% 79A9 sent him a letter through registered mail to report or the o ice and gi'e in ormation on $hether or not he $as still interested or report or duty or not. -o$e'er% Falderama did not bother to reply nor did he report to the o ice. Iss'e/ 4as Falderama illegally dismissed= R'%i"-/ Ges% he $as. &n cases in'ol'ing security guards% a relie and trans er order in itsel does not se'er employment relationship bet$een a security guard and his agency. An employee has the right to security o tenure% but this does not gi'e him a 'ested right to his position as $ould depri'e the company o its prerogati'e to change his assignment or trans er him $here his ser'ice% as security guard% $ill be most bene icial to the client. !emporary Io 0detailI or the period o time security guards are made to $ait until they are trans erred or assigned to a ne$ post or client does not constitute constructi'e dismissal% so long as such status does not continue beyond si# months. !he onus o pro'ing that there is no post a'ailable to $hich the security guard can be assigned rests on the employer% 'i".: 4hen a security guard is placed on a I loating status%I he does not recei'e any salary or inancial bene it pro'ided by la$. 2ue to the grim economic conse)uences to the employee% the employer should bear the burden o pro'ing that there are no posts

1/C E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

a'ailable to $hich the employee temporarily out o $or( can be assigned. Falderama claims that he $as relie'ed rom 1-C on 8anuary 5/% 2//AD therea ter% he $as not gi'en a ne$ assignment. 1etitioner% on the other hand% asserts that respondent re used to report to petitioner or his reassignment. 6ther$ise stated% petitioner claims that respondent abandoned his +ob. &n this case% 79A9 ailed to establish clear e'idence o FalderamaQs intention to abandon his employment. *#cept or 7A9AQs bare assertion that respondent did not report to the o ice or reassignment% no proo $as o ered to pro'e that respondent intended to se'er the employer0employee relationship. &ndubitably% Falderama remained on I loating statusI or more than si# months. -e $as relie'ed on 8anuary 5/% 2//A% and $as not gi'en a ne$ assignment at the time he iled the complaint on August 2% 2//A. 8urisprudence is trite $ith pronouncements that the temporary inacti'ity or I loating statusI o security guards should continue only or si# months. 6ther$ise% the security agency concerned could be liable or constructi'e dismissal. !he ailure o petitioner to gi'e respondent a $or( assignment beyond the reasonable si#0month period ma(es it liable or constructi'e dismissal. & there is a surplus o security guards caused by lac( o clients or pro+ects% the security agency may resort to retrenchment upon compliance $ith the re)uirements set orth in the Labor Code. &n this $ay% the security agency $ill not to be held liable or constructi'e dismissal and be burdened $ith the payment o bac($ages. 1OSPITAL 0ANA9E0ENT SERVI)ES3 IN). 0E,I)AL )ENTER 0ANILA3PITAL 0ANA9E0ENT SERVI)ES3 IN). D 0E,I)AL )ENTER 0ANILA E0PLOYEES ASSO)IATIONAFW a" E,NA R. ,E )ASTRO3 9.R. N!. 1;:2<; 7a"'ar$ 313 2011 Fa6ts/ 3espondent 2e Castro started $or(ing as a sta nurse at petitioner hospital since 9eptember 2C% 1::/% until she $as dismissed on 8uly 2/% 1:::. Bet$een 2:// a.m. to 5:// a.m. o March 2.% 1:::% $hile respondent 2e Castro and $ard0cler( orientee >ina >uillergan $ere at the nurse station on night duty ( rom 1/:// p.m. o March 25% 1::: to A:// a.m. o March 2.% 1:::)% one 3u ina Causaren% an C10 year0old patient con ined at 3oom B2.01 o petitioner hospital or ?gangrenous $ound on her right anterior leg and right ore oot@ and scheduled or operation on March 2A% 1:::% ell rom the right side o the bed as

she $as trying to reach or the bedpan. Because o $hat happened% the niece o patient Causaren staying in the room $as a$a(ened and she sought assistance rom the nurse station. &nstead o personally seeing the patient% respondent 2e Castro directed $ard0cler( orientee >uillergan to chec( the patient. !he 'ital signs o the patient $ere normal. Later% the physician on duty and the nursing sta on duty or the ne#t shi t again attended to patient Causaren. Chie 7urse 8ose ina M. Fillanue'a in ormed 2r. Asuncion Abaya0Morido% president and hospital director% about the incident and re)uested or a ormal in'estigation. 6n May 11% 1:::% the legal counsel o petitioner hospital directed respondent 2e Castro and three other nurses on duty% 9ta 7urse 8anith F. 1aderes and 7ursing Assistants Marilou 3espicio and Bertilla !. !atad% to appear be ore the &n'estigation Committee. 2e Castro e#plained that at around 2:5/ a.m. to 5:// a.m.% she $as attending to a ne$ly0admitted patient at 3oom B1/ and% because o this% she instructed 7ursing Assistant !atad to chec( the 'ital signs o patient Causaren% $ith $ard0cler( orientee >uillergan accompanying the latter. 4hen the t$o arri'ed at the room% the patient $as in a s)uatting position% $ith the right arm on the bed and the le t hand holding on to a chair. &n the &n'estigation 3eport% the &n'estigation Committee ound that the sub+ect incident happened bet$een 11:// a.m. to 11:5/ a.m. o March 25% 1:::. !he three other nurses or the shi t $ere not at the nurse station. 9ta 7urse 1aderes $as then in another nurse station encoding the medicines or the current admissions o patients% $hile 7ursing Assistant 3espicio $as ma(ing the door name tags o admitted patients and 7ursing Assistant !atad deli'ered some specimens to the laboratory. !he committee recommended that despite her more than se'en years o ser'ice% respondent 2e Castro should be terminated rom employment or her lapse in responding to the incident and or trying to manipulate and in luence her sta to co'er0up the incident. As or 9ta 7urse 1aderes and 7ursing Assistants 3espicio and !atad% the committee recommended that they be issued $arning notices or ailure to note the incident and endorse it to the ne#t duty shi t and% although they did not ha'e any (no$ledge o the incident% they should be reminded not to succumb to pressure rom their superiors in distorting the acts. 6n 8uly ;% 1:::% 8anette A. Cali#i+an% -32 6 icer o petitioner hospital% issued a notice o termination% duly noted by 2r. Abaya0Morido% upon respondent 2e Castro% e ecti'e at the close o o ice hours o 8uly 2/% 1:::% or alleged 'iolation o company rules and

1/: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

regulations% particularly paragraph 1A (a)% &tem 5% Chapter N& o the *mployeeQs -andboo( and 1olicy Manual o 1::A (*mployeeQs -andboo() (1) negligence to ollo$ company policy on $hat to do $ith patient 3u ina Causaren $ho ell rom a hospital bedD (2) ailure to record and re er the incident to the physician0Jon0 duty andK allo$JingK a signi icant lapse o time be ore reporting the incidentD (5) deliberately instructing the sta to ollo$ her 'ersion o the incident in order to co'er up the lapseD and (.) negligence and carelessness in carrying out her duty as sta nurse0on0duty $hen the incident happened. 6n 8uly 21% 1:::% respondent 2e Castro% $ith the assistance o respondent -ospital Management 9er'ices &nc.0Medical Center Manila *mployees Association0A,4% iled a ComplaintJBK or illegal dismissal against petitioners $ith prayer or reinstatement and payment o ull bac($ages $ithout loss o seniority rights% 12/%///.// moral damages% 11/%///.// e#emplary damages% and 1/L o the total monetary a$ard as attorneyQs ees. !he Labor Arbiter rendered a 2ecision% JCK ordering the hospital to reinstate respondent 2e Castro to her ormer position or by payroll reinstatement% at the option o the ormer% $ithout loss o seniority rights% but $ithout bac($ages and% also% directing petitioners to noti y her to report to $or(. !he Labor Arbiter concluded that although respondent 2e Castro committed the act complained o % being her irst o ense% the penalty to be meted should not be dismissal rom the ser'ice% but merely B to 1. days suspension as the same $as classi ied as a less serious o ense under the *mployee<s -andboo(. 6n appeal by respondent 2e Castro% the 7L3C rendered a 2ecision re'ersing the indings o the Labor Arbiter and dismissing the complaint against the petitioners. &t obser'ed that respondent 2e Castro lac(ed diligence and prudence in carrying out her duty $hen% instead o personally chec(ing on the condition o patient Causaren a ter she ell rom the bed% she merely sent $ard0cler( orientee >uillergan to do the same in her behal and or in luencing her sta to conceal the incident. !he 7L3C denied respondent 2e CastroQs Motion or 3econsideration. !he CA re'ersed and set aside the 2ecision o the 7L3C and reinstated the 2ecision o the Labor Arbiter% $ith modi ication that respondent 2e Castro should be entitled to payment o ull bac($ages and other bene its% or their monetary e)ui'alent% computed rom the e#piration o the 1.0day0 suspension period up to actual reinstatement. !he CA ruled that $hile respondent 2e CastroQs ailure to

personally attend to patient Causeran amounted to misconduct% ho$e'er% being her irst o ense% such misconduct could not be categori"ed as serious or gra'e that $ould $arrant the e#treme penalty o termination rom the ser'ice a ter ha'ing been employed or almost : years. &t added that the sub+ect in raction $as a less serious o ense classi ied under ?commission o negligent or careless acts during $or(ing time or on company property that resulted in the personal in+ury or property damage causing e#penses to be incurred by the company@ stated in subparagraph 11% paragraph 5 (B)% Chapter N& Jon the 3ules on 2isciplineK o the *mployeeQs -andboo(J:K o petitioner hospital. !he CA denied the hospital<s M3. Iss'e/ 4as 2e Castro guilty o serious misconduct= 4as the penalty o termination reasonable= R'%i"-/ !he hospital is guilty o illegal dismissal. Article 2C2 (b) o the Labor Code pro'ides that an employer may terminate an employment or gross and habitual neglect by the employee o his duties. !he CA ruled that per the *mployee<s -andboo( o petitioner hospital% respondent 2e Castro<s in raction is classi ied as a less serious o ense or ?commission o negligent acts during $or(ing time@ as set orth in subparagraph 11% paragraph 5 (B) o Chapter N& J1/K thereo . 1etitioners anchor respondent 2e Castro<s termination o employment on the ground o serious misconduct or ailure to personally attend to patient Causaren $ho ell rom the bed as she $as trying to reach or the bedpan. Based on her e'aluation o the situation% respondent 2e Castro sa$ no necessity to record in the chart o patient Causaren the act that she ell rom the bed as the patient did not su er any in+ury and her 'ital signs $ere normal. 9he surmised that the incident $as not o a magnitude that $ould re)uire medical inter'ention as e'en the patient and her niece did not press charges against her by reason o the sub+ect incident. &t is incumbent upon respondent 2e Castro to ensure that patients% co'ered by the nurse station to $hich she $as assigned% be accorded utmost health care at all times $ithout any )uali ication or distinction. 3espondent 2e Castro<s ailure to personally assist patient Causaren% chec( her 'ital signs and e#amine i she sustained any in+ury% re er the matter to the patientQs attending physician or any physician0on0duty% and note the incident in the report sheet or endorsement to the ne#t shi t or proper monitoring constitute serious misconduct that $arrants her termination o employment. A ter attending to the to#ic patients under her area o

11/ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

responsibility% respondent 2e Castro should ha'e immediately proceeded to chec( the health condition o patient Causaren and% i necessary% re)uest the physician0on0duty to diagnose her urther. More importantly% respondent 2e Castro should ma(e e'erything o record in the patient<s chart as there might be a possibility that $hile the patient may appear to be normal at the time she $as initially e#amined% an in+ury as a conse)uence o her all may become mani est only in the succeeding days o her con inement. !he patient<s chart is a repository o one<s medical history and% in this regard% respondent 2e Castro should ha'e recorded the sub+ect incident in the chart o patient Causaren so that any subse)uent discom ort or in+ury o the patient arising rom the incident may be accorded proper medical treatment. Ne-%e6t !( 't$3 t! &e a -r!'" m'st &e &!t# -r!ss a" #a&it'a%. (!r ismissa%3

situation. !he Court emphasi"es that the nature o the business o a hospital re)uires a higher degree o caution and e#acting standard o diligence in patient management and health care as $hat is in'ol'ed are li'es o patients $ho see( urgent medical assistance. An act or omission that alls short o the re)uired degree o care and diligence amounts to serious misconduct $hich constitutes a su icient ground or dismissal. -o$e'er% in some cases% the Court had ruled that sanctioning an erring employee $ith suspension $ould su ice as the e#treme penalty o dismissal $ould be too harsh. Considering that this $as the irst o ense o respondent 2e Castro in her nine (:) years o employment $ith petitioner hospital as a sta nurse $ithout any pre'ious derogatory record and% urther% as her lapse $as not characteri"ed by any $rong ul moti'e or deceit ul conduct% the Court deems it appropriate that% instead o the harsh penalty o dismissal% she $ould be suspended or a period o si# (A) months $ithout pay% inclusi'e o the suspension or a period o 1. days $hich she had earlier ser'ed. !herea ter% petitioner hospital should reinstate respondent *dna 3. 2e Castro to her ormer position $ithout loss o seniority rights% ull bac($ages% inclusi'e o allo$ances and other bene its% or their monetary e)ui'alent% computed rom the e#piration o her suspension o si# (A) months up to the time o actual reinstatement. ELPI,IO )ALIPAY3 VS. NATIONAL LABOR RELATIONS )O00ISSION3 TRIAN9LE A)E )ORPORATION a" 7OSE LEE3 9.R. N!. 1::4113 A'-'st 33 2010 Fa6ts/ 6n 8uly 1A% 1:::% a Complaint 5 or illegal dismissal% un air labor practice% underpayment o $ages and 15th month pay% non0payment o ser'ice incenti'e lea'e pay% o'ertime pay% premium pay or holiday% rest day% night shi t allo$ances and separation pay $as iled by herein petitioner *lpidio Calipay% together $ith Al redo Mission and *rnesto 2imalanta against herein pri'ate respondents !riangle Ace Corporation (!riangle) and 8ose Lee. Calipay and the other complainants alleged in their 1osition 1aper that in the course o their employment% they $ere not gi'en any speci ic $or( assignmentD they per ormed 'arious (inds o $or( imposed upon them by LeeD in discharging their unctions% they $ere re)uired by Lee to $or( or nine (:) hours a day% beginning rom B:// a.m. and ending at A:// p.m. $ith a brea( o one hour at 12:// noonD they $ere also re)uired to report rom Monday to 9undayD or $or( rendered rom Mondays to 9aturdays beyond the normal eight (C) $or(ing hours in a day% they $ere paid a uni orm daily $age in the

9r!ss "e-%i-e"6e 6!""!tes ?a"t !( 6are i" t#e .er(!rma"6e !( !"eMs 'ties. 1a&it'a% "e-%e6t im.%ies re.eate (ai%'re t! .er(!rm !"eMs 'ties (!r a .eri! !( time3 e.e" i"- '.!" t#e 6ir6'msta"6es. A single or isolated act o negligence does not constitute a +ust cause or the dismissal o the employee. 2espite our inding o culpability against respondent 2e CastroD ho$e'er% $e do not see any $rong ul intent% deliberate re usal% or bad aith on her part $hen% instead o personally attending to patient Causaren% she re)uested 7ursing Assistant !atad and $ard0cler( orientee >uillergan to see the patient% as she $as then attending to a ne$ly0admitted patient at 3oom B1/. &t $as her +udgment call% albeit an error o +udgment% being the sta nurse $ith presumably more $or( e#perience and better learning cur'e% to send 7ursing Assistant !atad and $ard0cler( orientee >uillergan to chec( on the health condition o the patient% as she deemed it best% under the gi'en situation% to attend to a ne$ly0admitted patient $ho had more concerns that needed to be addressed accordingly. Being her irst o ense% respondent 2e Castro cannot be said to be grossly negligent so as to +usti y her termination o employment. Moreo'er% petitioners< allegation% that respondent 2e Castro e#erted undue pressure upon her co0nurses to alter the actual time o the incident so as to e#culpate her rom any liability% $as not clearly substantiated. 2egligence is defined as the failure to e!ercise the standard of care that a reasonably prudent person would have e!ercised in a similar

111 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

amount o 11./.// e'en during holidaysD or $or( per ormed on 9undays% they $ere not paid any $age due to the policy o Lee that his $or(ers must pro'ide $or( $ithout pay at least a day in the $ee( under his so0called Ibayanihan systemID in recei'ing their $ages% they $ere not gi'en any duly accomplished payslipsD instead% they $ere orced to sign a blan( orm o their daily time records and salary 'ouchers. &t $as urther alleged that in May 1::C% Lee con ronted Calipay and Mission regarding their alleged participation and assistance in 2imalantaQs claim or disability bene its $ith the 9ocial 9ecurity 9ystemD despite their denials% Lee scolded Calipay and MissionD this incident later led to their dismissal in the same month. Labor Arbiter handling the case rendered a 2ecision dismissing the Complaint or lac( o merit. Calipay and the other complainants iled an appeal $ith the 7ational Labor 3elations Commission (7L3C) modi ying the Labor ArbiterQs decision and ordering respondents !riangle Ace Corporation &nc.P8ose Lee to reinstatement. Aggrie'ed% pri'ate respondents iled a Motion or 3econsideration $as >i'en due course and the decision o the Labor Arbiter $as reinstated and a irmed. As a conse)uence% Calipay and the other complainants mo'ed or the reconsideration% but the same $as denied by the 7L3C. Appealed to CA $hich rendered its 2ecision dismissing the petition. Calipay iled a Motion or 3econsideration% but the CA denied -ence% the instant petition o Calipay raising the ollo$ing Iss'e/ 4hether or not there $as abandonment o $or( a +ust ground or dismissal 1e% / Calipay and the other complainants ailed to su iciently re ute these indings o the Labor Arbiter in their appeal iled $ith the 7L3C. !hey simply insisted that they did not report or $or(% because they $ere already terminated. -o$e'er% they did not present any e'idence to pro'e their allegation. 6n the other hand% as held by the Labor Arbiter% pri'ate respondents $ere able to present the 2!3s and 9alary Fouchers o Calipay and the other complainants sho$ing that they indeed reported or $or( e'en a ter their alleged termination rom employment. 2A Calipay and the other complainants

also ailed to present e'idence to pro'e their allegation that they $ere orced to sign blan( orms o their 2!3s and 9alary Fouchers. 6n the basis o the oregoing% the Court arri'es at the conclusion that the iling o the complaint or illegal dismissal appears only as a con'enient a terthought on the part o petitioner and the other complainants a ter they $ere dismissed in accordance $ith la$. 8urisprudence has held time and again that abandonment is totally inconsistent $ith the immediate iling o a complaint or illegal dismissal% more so i the same is accompanied by a prayer or reinstatement. 2B &n the present case% ho$e'er% petitioner iled his complaint more than one year a ter his alleged termination rom employment. Moreo'er% petitioner and the other complainantsQ inconsistency in their stand is also sho$n by the act that in the complaint orm $hich they personally illed up and iled $ith the 7L3C% they only as(ed or payment o separation pay and other monetary claims. !hey did not as( or reinstatement. &t is only in their 1osition 1aper later prepared by their counsel that they as(ed or reinstatement. !his is an indication that petitioner and the other complainants ne'er had the intention or desire to return to their +obs. &n act% there is no e'idence to pro'e that petitioner and his ormer co0 employees e'er attempted to return to $or( a ter they $ere dismissed rom employment. 6n the other hand% pri'ate respondents $ere able to present memoranda or sho$0cause letters ser'ed on petitioner and the other complainants at their last (no$n address re)uiring them to e#plain their absence% $ith a $arning that their ailure $ould be construed as abandonment o $or(. Also% pri'ate respondents ser'ed on petitioner and the other complainants a notice o termination as re)uired by la$. 1ri'ate respondentsQ compliance $ith said re)uirements% ta(en together $ith the other circumstances abo'e0discussed% only pro'es petitioner and the other complainantsQ abandonment o their $or(. FUN)TIONAL3 IN). 8s. SA0UEL ). 9RANFIL3 9.R. N!. 1;:3;;3 N!8em&er 1:3 2011 Fa6ts/ 9ometime in 1::2% respondent 9amuel C. >ran il $as hired as (ey operator by petitioner ,unctional% &nc. (,&)% a domestic corporation engaged in the business o sale and rental o 'arious business e)uipments% including photocopying machines. As Mey 6perator% >ran il $as tas(ed to operate the photocopying machine rented by the 7ational Boo(store (7B9) at its 9M Megamall Branch. !here is no dispute regarding the act that% in the e'ening o 5/ 8uly 2//2% >ran il attended to a customer by the

112 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

name o Cosme Ca'alde+a (Ca'alde+a) $ho% together $ith his $i e% as(ed to ha'e their lyers photocopied. &t appears that Bonnel 2echa'e"% the security guard assigned at said establishment% sa$ Ca'alde+a handing money to >ran il a ter the transaction $as inished. A ter in'estigating the matter% 2echa'e" submitted the ollo$ing incident report to 7B9 Branch Manager Lucy >enegaban (>enegaban)% to $it: At around 1:./ on 8uly 5/% 2//2 at 7B9 9M Megamall 2ona 8ulia Fargas A'e.% Mandaluyong City% & chec(ed one customer and as(ed i he already paid or his #ero#JedK item<s (sic) and he said ?yes.@ Hpon as(ing or a receipt% he pointed to 9ammy the Nero# operator JtoK $hom he gJaK'e payment% instead o paying to the cashier. 9ammy came and it $as only then that he brought the customer to the counter /: or payment Jo K the amount o JtheK #ero#JedK item<s (sic) is 12;/. 6n 5 9eptember 2//2% >ran il iled a complaint against ,&% its 1resident% 3omeo Bautista (Bautista)% its Mar(eting Manager% ,reddie !enorio (!enorio)% its 6 ice 9uper'isor% 8ulius Ballesteros (Ballesteros)% and its Area 9uper'isor% 8oel 2i"on (2i"on)% or illegal dismissal% unpaid 15th month pay% moral and e#emplary damages and attorney<s ees. &n support o his complaint $hich $as doc(eted as 7L3C 7C3 Case 7o. /:0/B12A02//2 be ore the arbitral le'el o the 7ational Labor 3elations Commission (7L3C)% >ran il alleged% among other matters% that the money $hich 2echa'e" sa$ him recei'e rom Ca'alde+a $as a 12// tip said customer ga'e him in appreciation o his assistance in #ero#ing and organi"ing the batches o 'oluminous materials he as(ed to be photocopiedD that payment or the materials $as% ho$e'er% already paid per batch by Ca'alde+a<s $i e $ho% by that time% had already le t the premisesD and% that rather than listening to his e#planation and simply 'eri ying the meter o the photocopy machine as $ell as the paper allotted to it% 2echa'e" submitted his incident report $hich% in turn% caused !enorio to tell him% ?Mr. /ranfil" magpahinga !a muna. Ma'uti pa" pumirma !a nalang ng resignation letter para may ma!uha !a pa.@ >ran il urther asse'erated that% $ith said incident report ha'ing been tele a#ed to ,&<s head o ice% he $as as(ed to report thereat in the morning o 51 8uly 2//2D that instead o allo$ing him to e#plain% ho$e'er% Ballesteros peremptorily ordered his termination rom employmentD that $ishing to e#plain his side% he sought out 2i"on $ho merely ignored and tersely ad'ised him% ?Magpahinga !a na lang@D that re used entry $hen he tried to report or $or( on 1 August 2//2% he subse)uently sought out Ca'alde+a $hose corroboration o his 'ersion o the

incident also ell on dea earsD that ha'ing been terminated $ithout +ust cause and obser'ance o due process% he $as constrained to ile the 5 9eptember 2//2 complaint rom $hich the instant suit originatedD that aside rom the reinstatement to $hich he is clearly entitled as an illegally dismissed employee% he should be paid ull bac($ages and 15 th month pay or the year 2//2D and% that in 'ie$ o the malice and bad aith $hich characteri"ed his dismissal rom employment% Bautista% !enorio% Ballesteros and 2i"on should be held +ointly and se'erally liable $ith ,& or the payment o said indemnities as $ell as his claims or moral and e#emplary damages and attorney<s ees. &n their position paper% ,& and its corporate o icers% in turn% a'erred that ha'ing been apprised o the incident% >enegaban re)uested or >ran il<s relie as Mey 6perator o the photocopying machine installed at the 7B9 9M Megamall BranchD that or the good o all concerned% ,& in ormed >ran il that he $as going to be trans erred to a di erent assignment% $ithout demotion in ran( or diminution o his salaries% bene its and other pri'ilegesD that re)uired to report to ,&<s main o ice to act as emergency relie'er to other Mey 6perators $hile $aiting or his ne$ assignment% >ran il misconstrued his trans er as a punishment or his guilt and re used to heed said directi'e $hich $as $ithin the management<s prerogati'e to issueD that an employee<s right to security o tenure does not gi'e him such 'ested right to his position as $ould depri'e his employer o its prerogati'e to change his assignment or trans er him $here he $ill be most use ulD and% that aside rom being guilty o insubordination% >ran il clearly abandoned his employment rather than illegally dismissed there rom. 6n 2: April 2//5% Labor Arbiter *duardo Carpio rendered a decision discounting >ran il<s illegal dismissal rom employment in 'ie$ o his ailure to pro'e $ith substantial e'idence o'ert acts o termination on the part o ,& and its o icers. 9imply a$arded the sum o 15%:AA.A; as proportionate 15th month pay or ser'ices rendered rom 8anuary to 8uly 2//2% >ran il per ected the appeal $hich $as doc(eted be ore the ,irst 2i'ision o the 7L3C as 7L3C 7C3 CA 7o. /5;CCB0/5. 4ith the a irmance o the Labor Arbiter<s decision in the 2/ April 2//; 3esolution issued by the 7L3C and the subse)uent denial o his motion see(ing the reconsideration o said decision% >ran il ele'ated the case through the 3ule A; petition or certiorari doc(eted be ore the CA as CA0>.3. 91 7o. :.C;1. 6n 22 7o'ember 2//A% the CA rendered the herein assailed 22 7o'ember 2//A 2ecision% re'ersing the 7L3C<s 2/ April 2//; 3esolution on the ground that ,& ailed to

115 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

satis actorily pro'e >ran il<s supposed abandonment o his employment $hich% by itsel % $as negated by his iling o a case or illegal employment. 6rdering ,& to reinstate >ran il and to pay his ull bac($ages% allo$ances and other bene its rom 51 8uly 2//2 until his actual reinstatement% the CA denied said employee<s claims or moral and e#emplary damages as $ell as attorney<s ees or lac( o actual basis. ,&<s motion or reconsideration o the CA<s 22 7o'ember 2//A decision $as denied or lac( o merit in said court<s 22 8anuary 2//B resolution% hence% this petition. Iss'e/ 4hether or not employee $as illegally dismissed Yes. !he rule is long and $ell settled that% in illegal dismissal cases li(e the one at bench% the burden of proof is upon the employer to show that the employees termination from service is for a just and valid cause. !he employer<s case succeeds or ails on the strength o its e'idence and not the $ea(ness o that adduced by the employee% in (eeping $ith the principle that the scales o +ustice should be tilted in a'or o the latter in case o doubt in the e'idence presented by them. 6 ten described as more than a mere scintilla% the )uantum o proo is substantial e'idence $hich is understood as such rele'ant e'idence as a reasonable mind might accept as ade)uate to support a conclusion% e'en i other e)ually reasonable minds might concei'ably opine other$ise. ,ailure o the employer to discharge the oregoing onus $ould mean that the dismissal is not +usti ied and there ore illegal. 2enying the charge o illegal dismissal% ,& insists that >ran il abandoned his employment a ter he $as trans erred rom his assignment at the 7B9 Megamall Branch as a conse)uence o the latter<s re)uest or his relie . &n the same manner that it cannot be said to ha'e discharged the abo'e0 discussed burden by merely alleging that it did not dismiss the employee% it has been ruled that an employer cannot e#pediently escape liability or illegal dismissal by claiming that the ormer abandoned his $or(. !his applies to ,& $hich adduced no e'idence to pro'e >ran il<s supposed abandonment beyond submitting copies o 7B9< 51 8uly 2//2 re)uest or said employee<s trans er and its 1 August 2//2 $ritten ac)uiescence thereto. 4hile these documents may ha'e buttressed the claim that >ran il $as indeed recalled rom his assignment% ho$e'er% $e ind that the CA correctly discounted their probati'e 'alue inso ar as ,&<s theory o abandonment is concerned.

Being a matter o intention% moreo'er% abandonment cannot be in erred or presumed rom e)ui'ocal acts. As a +ust and 'alid ground or dismissal% it re)uires the deliberate% un+usti ied re usal o the employee to resume his employment% $ithout any intention o returning. !$o elements must concur: (1) ailure to report or $or( or absence $ithout 'alid or +usti iable reason% and (2) a clear intention to se'er the employer0employee relationship% $ith the second element as the more determinati'e actor and being mani ested by some o'ert acts. !he burden o pro'ing abandonment is once again upon the employer $ho% $hether pleading the same as a ground or dismissing an employee or as a mere de ense% additionally has the legal duty to obser'e due process. 9ettled is the rule that mere absence or ailure to report to $or( is not tantamount to abandonment o $or(. Fie$ed in the light o the oregoing principles% $e ind that the CA correctly ruled out ,&<s position that >ran il had abandoned his employment. Aside rom the act that Bautista% !enorio% Ballesteros and 2i"on did not e'en e#ecute s$orn statements to re ute the o'ert acts o dismissal imputed against them% the record is $holly bere t o any sho$ing that ,& re)uired >ran il to report to its main o ice or% or that matter% to e#plain his supposed unauthori"ed absences. Absence must be accompanied by o'ert acts unerringly pointing to the act that the employee simply does not $ant to $or( anymore. *'en then% ,&<s theory o abandonment $as li(e$ise negated by >ran il<s iling the complaint or illegal dismissal $hich e'inced his desire to return to $or(. &n 'igorously pursuing his action against ,& be ore the Labor Arbiter% the 7L3C and the CA% >ran il clearly mani ested that he has no intention o relin)uishing his employment. &n any case% the act that >ran il prayed or his reinstatement spea(s against any intent to se'er the employer0employee relationship $ith ,&. 9AR,EN OF 0E0ORIES PAR+ a" LIFE PLAN3 IN). a" PAULINA T. REFUISO3 8s. NATIONAL LABOR RELATIONS )O00ISSION3 SE)ON, ,IVISION3 LABOR ARBITER FELIPE T. 9AR,UFUE II a" 1ILARIA )RU=3 9.R. N!. 1:02;<3 Fe&r'ar$ <3 2012 0A. 0ELISSA A. 9ALAN93 8s. 7ULIA 0ALASU9UI3 9.R. N!. 1;41;33 0ar6# ;3 2012 FA)TS/ 3*91672*7! 8ulia Malasugui $as a gardener o petitioner Ma. Melissa A. >alang. 9he iled a complaint or illegal dismissal% claiming she $as barred on 8an. 2B% 1::: rom entering the 1angi property $here she $as $or(ing. !he petitioner alleged that respondent became sic( o e#cessi'e

11. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

coughing early in 1:::. 9he made an arrangement $ith a radiologist or respondent<s diagnostic e#amination but the latter did not sho$ up at the appointed time. 4hen con ronted by >alang about this% respondent pac(ed up her belongings and le t the 1angi property. 2oes this de ense prosper= R'%i"-/ 7o.% 3espondent has been in the employ o petitioner or si# years $hen the alleged abandonment happened. Being scolded% i it $ere true% is hardly a reason or a gardener o si# years to +ust pac( up and lea'e the $or( premises $here she $as e'en allo$ed to reside% at a time $hen she needed medical attention. &ndeed% the alleged scolding is itsel incredible. !he gi'en reason $as that respondent ailed to sho$ up at her arranged appointment $ith the radiologist. &t is hard to belie'e that a sic( gardener $ould re use the o er o medical ser'ices. &n act% the basic allegation in respondent<s complaint or illegal dismissal $as that petitioner<s ?treatment o her became sour especially $hen she re)uested that she be e#amined by a doctor or her cough.@ &n the case o >arcia 's. 7ational Labor 3elations Commission correctly relied upon by the Court o Appeals% the 9upreme Court emphasi"ed that there must be a concurrence o the intention to abandon and some o'ert acts rom $hich an employee may be deduced as ha'ing no more intention to $or(. 9uch intent to discontinue the employment must be sho$n by clear proo that it $as deliberate and un+usti ied. &n the instant case% the o'ert act relied upon by petitioner is not only a doubt ul occurrence but is% i it did transpire% e'en consistent $ith the dismissal rom employment posited by the respondent. !he Court o Appeals is correct. 1etitioner $as displeased a ter incurring e#penses or respondent<s medical chec(0 up and% it is credible that% therea ter% respondent $as pre'ented entry into the $or( premises. !his is tantamount to constructi'e dismissal. (Ma. Melissa A. >alang 's. 8ulia Malasugui% >.3. 7o. 1B.1B5% March B% 2/12). Fra' !r Wi%%('% Brea6# !( Tr'st@L!ss )!"(i e"6e !(

9upport 2i'ision% 1ro'incial *#pansion Center% Meet 2emand >roup. -is di'ision $as in charge o the e'aluation% recommendation and re'ie$ o documents relating to pro'incial lot ac)uisitions. 9ometime in 1::;% 8onathan de 3i'era% a super'isor directly under respondent !olentino% $as ound to ha'e entered into an ?internal arrangement@ $ith the sellers o a parcel o land $hich he recommended or ac)uisition under 1L2!<s e#pansion program. Uuirino 2onato% the attorney0in0 act o the lando$ner% e#ecuted an a ida'it disclosing his ?internal arrangement@ $ith de 3i'era. 2onato<s a ida'it re'ealed that all ollo$0up calls regarding the transaction $ere to be directed to the o ice o respondent and de 3i'era. Hpon being apprised o this ?internal arrangement%@ 1L2! dismissed de 3i'era. A ter he $as dismissed% de 3i'era submitted a s$orn statement to 1L2! implicating respondent as the person behind the anomalous ?internal arrangement.@ 3espondent% in an a ida'it% denied this and pointed out that his authority to appro'e real estate ac)uisitions $as limited to land 'alued belo$ 12//%///. 1etitioner 1L2! sent a notice o dismissal% e ecti'e 6ctober 2B% 1::;% to respondent !olentino. Attached to this notice $as a hand$ritten note rom 7icanor *. 9acdalan% Fice01resident o the 1ro'incial *#pansion Center% Meet 2emand >roup% gi'ing respondent !olentino the option to resign. 1etitioner did not grant respondent<s re)uest or a ormal hearing but delayed the implementation o his dismissal. 6n 2ecember .% 1::;% petitioner in ormed respondent that his dismissal $as already inal and e ecti'e on 2ecember ;% 1::;. 0 3espondent then iled a complaint or illegal dismissal% moral and e#emplary damages and other monetary claims against petitioner 1L2! in 8anuary% 1::A. !he labor arbiter ound that petitioner 1L2! ailed to pro'e and substantiate the charges against respondent 6n appeal% the 7L3C re'ersed the labor arbiter<s decision on the ground that respondent $as a managerial employee and that loss o trust and con idence $as enough reason to dismiss him. 3espondent<s petition or certiorari $as re erred by this Court to the Court o Appeals $hich rendered the assailed decision reinstating the decision o the labor arbiter% that is% ordering respondent<s reinstatement. ISSUE/ 467 the Court o Appeals erred in ruling that the dismissal $as not ounded on clearly established

)ases/ N!E!m 8s. NLR) ,e%!s Sa"t!s 8s. NLR) 20014

27'%$ 1<3 20004 2,e6. 203

PL,T 8s. T!%e"ti"! 9R N!. 1431;13 Se.t. 213 2004 FA)TS/ Arturo 3. !olentino !olentino $as employed in petitioner 1L2! or 25 years. -e started in 1:B2 as an installerPhelper and% at the time o his termination in 1::;% $as the di'ision manager o the 1ro+ect

11; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

acts su icient employment

to

$arrant

separation

rom

generally conclusi'e and binding on the 9upreme Court. 0 !he e'idence relied upon by petitioner 1L2! R de 3i'era<s s$orn statement and 2onato<s a ida'it R does not% in our 'ie$% establish respondent !olentino<s complicity in the ?internal arrangement@ engineered by his subordinate de 3i'era. 0 !o be sure% respondent !olentino $as remiss in his duties as di'ision manager or ailing to disco'er the ?internal arrangement@ contri'ed by his subordinate. -o$e'er% dismissal $as not the proper sanction or such negligence. &t $as not commensurate to the lapse committed% especially in the light o respondent<s unblemished record o long and dedicated ser'ice to the company. &n -ong!ong )hanghai Aan! %orporation vs. N+,% % $e had occasion to rule that: !he penalty imposed must be commensurate to the depra'ity o the mal easance% 'iolation or crime being punished. A gra'e in+ustice is committed in the name o +ustice $hen the penalty imposed is grossly disproportionate to the $rong committed. ;DIismissal is the most severe penalty an employer can impose on an employee. It goes without saying that care must be taken, and due regard given to an employees circumstances, in the application of such punishment. 0 Certainly% a great in+ustice $ill result i this Court upholds !olentino<s dismissal. A" em.%!$ee i%%e-a%%$ ismisse is e"tit%e t! ('%% &a6E?a-es a" rei"stateme"t .'rs'a"t t! Arti6%e 2;> !( t#e La&!r )! e3 as ame" e &$ RA :;1A. 0 Although a managerial employee% respondent should be reinstated to his ormer position or its e)ui'alent $ithout loss o seniority rights inasmuch as the alleged strained relations bet$een the parties $ere not ade)uately pro'en by petitioner 1L2! $hich had the burden o doing so. &n Uui+ano 's. Mercury 2rug Corporation% the Court ruled that strained relations are a actual issue $hich must be raised be ore the labor arbiter or the proper reception o e'idence. &n this case% petitioner 1L2! only raised the issue o strained relations in its appeal rom the labor arbiter<s decision. !hus% no competent e'idence e#ists in the records to support 1L2!<s assertion that a peace ul $or(ing relationship $ith respondent !olentino $as no longer possible. &n act% the records o the case sho$ that 1L2!% through F1 9acdalan% ga'e respondent !olentino the option to resign.J1CK 9uch a de erential act by management ma(es us doubt 1L2!<s claim that its relations $ith respondent $ere ?strained.@ !he option to resign $ould not ha'e been gi'en had animosity e#isted bet$een them.

1EL,/ 763 !he petition is $ithout merit. 1L2!<s basis or respondent<s dismissal $as not enough to de eat respondent<s security o tenure. !here is no dispute o'er the act that respondent $as a managerial employee and there ore loss o trust and con idence $as a ground or his 'alid dismissal. !he mere e#istence o a basis or the loss o trust and con idence +usti ies the dismissal o the employee because: J#Khen an employee accepts a promotion to a managerial position or to an office re8uiring full trust and confidence" she gives up some of the rigid guaranties availa'le to ordinary #or!ers. 0nfractions #hich if committed 'y others #ould 'e overloo!ed or condoned or penalties mitigated may 'e visited #ith more severe disciplinary action. 7 company*s resort to acts of self.defense #ould 'e more easily justified. 1roo beyond reasonable doubt is not re)uired pro'ided there is a 'alid reason or the loss o trust and con idence% such as $hen the employer has a reasonable ground to belie'e that the managerial employee concerned is responsible or the purported misconduct and the nature o his participation renders him un$orthy o the trust and con idence demanded by his position. -o$e'er% the right o the management to dismiss must be balanced against the managerial employee<s right to security o tenure $hich is not one o the guaranties he gi'es up. !his Court has consistently ruled that managerial employees en+oy security o tenure and% although the standards or their dismissal are less stringent% the loss o trust and con idence must be substantial and ounded on clearly established acts su icient to $arrant the managerial employee<s separation rom the company. 9ubstantial e'idence is o critical importance and the burden rests on the employer to pro'e it. 2ue to its sub+ecti'e nature% it can easily be concocted by an abusi'e employer and used as a subter uge or causes $hich are improper% illegal or un+usti ied. 0 &n the case at bar% this Court agrees $ith the Court o Appeals that the petitioner<s dismissal $as not ounded on clearly esta'lished facts sufficient to #arrant separation from employment . !he actual indings o the court a 8uo on the issue o $hether there $as su icient basis or petitioner 1L2! to dismiss respondent !olentino are binding on this Court. &n the e#ercise o the po$er o re'ie$% the actual determinations o the Court o Appeals are

11A E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

,urthermore% respondent $as dismissed in 2ecember% 1::; $hen petitioner 1L2! $as still under the Co+uangco group. 1L2! has since then passed to the o$nership and control o its ne$ o$ners% the ,irst 1aci ic group $hich has absolutely nothing to do so $ith this contro'ersy. 9ince there are no strained relations bet$een the ne$ management and respondent% reinstatement is easible. Disposition !he petition $as denied. )#ar%es Ram!s 8s. )A 7'"e 2>3 2004 9R N!. 14A40A3

in the case at bar $here both the Labor Arbiter and the 7L3C share the same indings. !he rule is not ho$e'er% $ithout e#ceptions one o $hich is $hen the indings o act o the labor o icials on $hich the conclusion $as based are not supported by substantial e'idence. !he same is true $hen it is percei'ed that ar too much is concluded% in erred or deducted rom bare acts adduced in e'idence. !he employer<s e'idence% although not re)uired to be o such degree as that re)uired in criminal cases i.e. proo beyond reasonable doubt% must be substantial it must clearly and con'incingly establish the acts upon $hich loss o con idence in the employee may be made to rest. &n the case at bar% the company ailed to discharge this burden. ,eli# $as hastily dismissed by A9A-& as the ormer $as not gi'en ade)uate time to prepare or his de ense but $as preemptorily dismissed e'en $ithout any ormal in'estigation or hearing. &t is settled that $here the employee denies the charges against him% a hearing is necessary to thresh out any doubt. !he ailure o the company to gi'e petitioner% $ho denied the charges against him% the bene it o a hearing and an in'estigation be ore his termination constitutes an in ringement o his constitutional right to due process. &t bears emphasis that the matter o determining $hether the cause or dismissal is +usti ied on the ground o loss o con idence cannot be le t entirely to the employer. &mpartial tribunals do not only rely on the statement made by the employer that there is ^loss o con idence unless duly pro'ed or su iciently substantiated. At all e'ents% e'en i all the allegations are true% they are not o such nature to merit the penalty o dismissal gi'en the 1. years in ser'ice o ,eli#. 2ismissal is unduly harsh and grossly disproportionate to the charges. !his rule on proportionality that the penalty imposed should commensurate to the gra'ity o the o ense has been obser'ed in a number o cases. !here being no basis in la$ or in act +usti ying ,eli#<s dismissal on the basis o loss o trust and con idence% his dismissal $as illegal. R!%a" ! Ar!mi" 8s. NLR) 29R NO. 1:4<24 A.ri% 303 200<4 Fa6ts/ Aromin $or(ed or B1& or 2A years% rising rom the ran(s to become an assistant 'ice0president. &n a case in'ol'ing a purchase o a B1& trust asset% Aromin testi ied to the surprise o B1&<s legal counsel. A sho$0cause memorandum $as sent or him to e#plain $hy no disciplinary action shall be ta(en against him or testi ying during the said hearing.

A,ELINO FELIV 8. NATIONAL LABOR RELATIONS )O00ISSION a" REPUBLI) ASA1I 9LASS )ORPORATION 442 S)RA 4:A 220044 9R N!. 14<2A:3 N!8. 1;3 2004 FA)TS/ 1etitioner Adelino ,eli# $as hired by the 3epublic Asahi >lass Corporation as a Cadet *ngineer. 9ometime in 1::2% ,eli# $as o ered a chance to train and )uali y or the position o Assistant Manager but he declined and $ai'ed the opportunity to the one $ho $as ne#t0in0line. By ,eli#Qs claim% he $as as(ed by certain o icers o the company to resign and accept a separation pac(age% ailing $hich he $ould be terminated or loss o con idence. ,eli#% ho$e'er% re used to resign and accept separation bene its% dra$ing the o icers o the company to% by his claim% start harassing him. !hus% he $as not gi'en $or( and another employee% Mr. *lmer !acata% $as assigned to ta(e o'er his post and unction. Hnable to $ithstand the manner by $hich he $as being treated by the company% ,eli#% through his la$yer% $arned the 3epublic Asahi >lass Corporation about the illegality o its actions. ,eli# attributed the companyQs harassment against him to his being a member o the super'isory union then being ormed. !he 3epublic Asahi >lass Corporation subse)uently terminated ,eli#<# ser'ices or loss o trust and con idence. ,eli# thus lodged a complaint or illegal dismissal. !he Labor Arbiter dismissed ,eli#Qs complaint. 6n appeal% the 7ational Labor 3elations Commission (7L3C) dismissed ,eli#Qs complaint or lac( o merit. !he Court o Appeals li(e$ise dismissed the complaint. ISSUE/ 4hether or not the company<s %!ss !( tr'st a" 6!"(i e"6e is ounded on acts established by substantial and competent e'idence 1EL,/ !he rule is that high respect is accorded to the indings o act o )uasi0+udicial agencies% more so

11B E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

Later% he $as dismissed con idence.

or loss o

trust and

be ore us is a real case o betrayal o trust and con idence% duly substantiated% to +usti y the dismissal o an employee. As borne out by the records% B1& complied $ith the mandatory t$o0notice rule% the irst e ected through the May A% 1::1 sho$0cause memorandum $hich Aromin e'en ans$ered% and the second 'ia the 8une 1.% 1::1 notice o termination% both issued by Barcelon. Considering that Aromin is guilty o $ill ul betrayal o trust% a serious o ense a(in to dishonesty% he is not entitled to inancial assistance or separation pay. &t may be that his 2A years o ser'ice might generally be considered or a se'erance pay a$ard or some orm o inancial assistance to cushion the e ects o his termination. 7A0ES BEN L. 7ERUSALE0 8s. +EPPEL 0ONTE BAN+ et.a%. 9R. N!. 1:>A:43 A.ri% :3 2011 FA)TS/ 1*!&!&67*3 8ames Ben L. 8erusalem $as employed by respondent Meppel Monte Ban( (Meppel) on May 2C% 1::C as assistant 'ice0 president. 6n 8une 1% 1::C% he $as assigned as head o the ne$ly created F&9A Credit Card 2epartment. 6n April ;% 1:::% carrying the same ran(% he $as reassigned as head o mar(eting and operations o the +e$elry department. 6n 9ept. 2A% 2///% petitioner $as dismissed rom the ser'ice or breach o trust and con idence or (no$ingly and maliciously re erring% endorsing and 'ouching or F&9A card applicants in or about May 1:::. !hey later turned out to be impostors resulting in inancial loss to Meppel. ISSUE/ 4as the dismissal legal= R'%i"-/ 7o. Loss o con idence as a +ust cause or termination o employment is premised on the act that the employee concerned holds a position o responsibility or trust and con idence. -e must be in'ested $ith con idence on delicate matters% such as custody handling or care and protection o the property and assets o the employer. And% in order to constitute a +ust cause or dismissal% the act complained o must be $or(0related and sho$s that the employee concerned is un it to continue to $or( or the employer (9ulpicio Lines% &nc. '. >ulde% .2B 1hil. C/;% C1/ (2//2). ,rom the indings o both the labor arbiter and the 7L3C% it is clear that 8ames did nothing $rong $hen he handed o'er to Marciana the en'elope containing the applications o persons under the re erred accounts o 8orge $ho $ere later ound to be ictitious.

Iss'e/ 4as the dismissal 'alid= 1e% / Ges. Loss o con idence% as a ground or dismissal% is premised on the act that the employee concerned holds a position o responsibility or o trust and con idence. As such% the employee must be in'ested $ith con idence on delicate matters% such as the custody% handling% or care o the employer<s money and other assets. Loss o con idence as a +ust cause or dismissal $as ne'er intended to pro'ide employers $ith a blan( chec( or terminating their employees. Loss o con idence should ideally apply only to cases: 1)in'ol'ing employees occupying positions o trust and con idence 0 managerial employees% i.e.% those 'ested $ith the po$ers or prerogati'es to lay do$n management policies Je ect personnel mo'ementsK ### or e ecti'ely recommend such managerial actionsD 2)to those situations $here the employee is routinely charged $ith the care and custody o the employer<s money or property 0 cashiers% auditors% property custodians% etc.% or those $ho% in the normal and routine e#ercise o their unctions% regularly handle signi icant amounts o money or property. Being% during the period material% an AF1% Aromin doubtless alls under the category o a managerial employee upon $hom trust and con idence had been reposed by the employing ban(. Fiolating that trust and con idence is a 'alid cause or dismissal under Art. 2C2 o the Labor Code. But $hile employers are gi'en a $ide latitude o discretion in the termination o ser'ices o managerial employees or loss o con idence% there must be substantial proo thereo . Loss o con idence% as a ground or termination% simulatedD should not be used as a subter uge or causes $hich are improper% illegal% or un+usti iedD arbitrarily assertedD and a mere a terthought to +usti y earlier action ta(en in bad aith. Aromin indeed committed acts $hich ormed the basis or B1&<s loss o trust and con idence in him. Hndeniably% the acts committed% inclusi'e o those done be ore he too( the $itness stand to testi y alsely against the interest o the employer% ad'ersely re lected on his competence% loyalty% and bona ide integrity. 9aid acts $ere su icient enough or his employer to lose trust and con idence in him. !hus%

11C E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

As the records no$ stand% 8ames $as no longer connected $ith the F&9A Credit Card Hnit $hen the AB applications or F&9A card $ere appro'ed. At such time% he $as already the head o mar(eting and operations o the +e$elry department. -is act there ore o or$arding the already accomplished applications to the F&9A Credit Card Hnit is proper as he is not in any position to act on them. !he processing and 'eri ication o the identities o the applicants $ould ha'e bdone by the proper department% $hich is the F&9A Credit Card Hnit. !here ore% it is incumbent upon Marciana as unit head to ha'e per ormed her duties. As correctly obser'ed by the labor arbiter% Meppel had gone too ar in blaming 8ames or the shortcomings and imprudence o Marciana. !he in'ocation o Meppel o the loss o trust and con idence as ground or 8ames<s termination has there ore no basis at all. -a'ing sho$n that Meppel ailed to discharge its burden o pro'ing that 8ames<s dismissal is or a +ust cause% $e ha'e no other recourse but to declare that such dismissal based on the ground o loss o trust and con idence $as illegal. !his is in consonance $ith the constitutional guarantee o security o tenure. (8ames Ben L. 8erusalem 's. Meppel Monte Ban(% -oe *ng% et. al.% >.3. 7o. 1A:;A.% April A% 2/11). T1E )O)A-)OLA EVPORT )ORPORATION3 8s. )LARITA P. 9A)AYAN3 9.R. N!. 14>4333 7'"e 223 2011 FA)TS/ 3espondent >acayan $as the 9enior ,inancial Accountant o the petitioner rom 6ctober C% 1C:; to April A% 1::; and $as dismissed on the ground o alleged loss o trust and con idence. 6ne o the bene its en+oyed by the respondent $as the reimbursement o meal allo$ances incurred during o'ertime $or( $ith 1hp 1;/ as the ma#imum amount per meal. Hpon in'estigation o the petitioner% it $as ound out that the meal receipts incurred by respondent during the period rom 8uly to 7o'ember 1::. $ere altered in the date or items purchased $hich $as deemed a 'iolation o company policy. 2uring the ormal in'estigation% Cola0 Cola in ormed the respondent o the alleged raudulent alterations $hile >acayan denied any personal (no$ledge in the commission o the alterations. 9ubse)uently% in a letter dated April .% 1::;% Coca Cola dismissed the ser'ices o the >acayan because o the alleged gross 'iolation o the petitioner<s policy. !herea ter% >acayan iled a complaint or illegal dismissal against Coca0Cola. !he Labor Arbiter decided in a'or o the latter on the ground that the alterations made by the petitioner re lect her )uestionable integrity and honesty $hich $as a irmed by the 7L3C. -o$e'er% CA o'erturned the

decision and ordered the reinstatement o the >acayan $ithout loss o seniority and $ith ull bac($ages. ISSUE/ 4hether or not the acts o respondent constitute as serious misconduct% thus% gi'ing cause or her termination= 1EL,/ 7o. Misconduct has been de ined as improper or $rong conduct. &t is the transgression o some established and de inite rule o action% a orbidden act% a dereliction o duty% $il ul character% and implies $rong ul intent and not mere error o +udgment. !hus% or misconduct or improper beha'iour to be a +ust cause or dismissal% (a) it must be seriousD (b) must relate to the per ormance o the employee<s dutiesD and (c) must sho$ that the employee has become un it to continue $or(ing or the employer. &t is $ell to stress that in order to constitute serious misconduct serious misconduct $hich $ill $arrant the dismissal o an employee% it is not su icient that the act or conduct complained o has 'iolated some established rules or policies. &t is e)ually important and re)uired that the act or conduct must ha'e been done $ith $rong ul intent. 9uch is% ho$e'er% lac(ing in the instant case. Coca0cola alleges that under its rules and regulations% respondent<s submission o raudulent items o e#pense is punishable by dismissal. -o$e'er% petitioner<s rules cannot preclude the 9tate rom in)uiring $hether the strict and rigid application or interpretation thereo $ould be harsh to the employee. *'en $hen an employee is ound to ha'e transgressed the employer<s rules% in the actual imposition o penalties upon the erring employee% due consideration must still be gi'en to his length o ser'ice and the number o 'iolations committed during his employ. 3espondent had no pre'ious record in her :_ years o ser'iceD this $ould ha'e been her irst o ense. 3espondent had also been a recipient o 'arious commendations attesting to her competence and diligence in the per ormance o her duties% not only rom petitioner% but also rom petitioner<s counterparts in 1oland and !hailand. 3espondent also countered that she acted in good aith and $ith no $rong ul intent $hen she submitted the receipts in support o her claim or reimbursement o meal allo$ance. According to respondent% only the dates or items $ere altered on the receipts. 9he did not claim more than $hat $as allo$ed as meal e#pense or the days that she rendered o'ertime $or(. 9he belie'ed that the submission o receipts $as simply or records0(eeping% since she actually rendered o'ertime $or( on the dates that she claimed or meal allo$ance. All told% this Court holds that the penalty o dismissal imposed on respondent

11: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

is unduly oppressi'e and disproportionate to the in raction $hich she committed. ,ismissa%C %!ss !( 6!"(i e"6eC -'i e%i"es (!r a..%i6ati!". !he Court has set the guidelines or the application o the doctrine o loss o con idence as ollo$s: (a) Loss o con idence should not be simulatedD (b) &t should not be used as a subter uge or causes $hich are improper% illegal or un+usti iedD (c) &t may not be arbitrarily asserted in the ace o o'er$helming e'idence to the contraryD and (d) &t must be genuine% not a mere a terthought to +usti y earlier action ta(en in bad aith. &n the case at bar% no mention $as made regarding petitioner<s alleged loss o trust and con idence in respondent. 7either $as there any e#planation nor discussion o the alleged sensiti'e and delicate position o respondent re)uiring the utmost trust o petitioner. Because o its sub+ecti'e nature% the Court has been 'ery scrutini"ing in cases o dismissal based on loss o trust and con idence. !hus% $hen the breach o trust or loss o con idence is not clearly established by acts% as in the instant case% such dismissal on the ground o loss and con idence cannot be countenanced. The %oca.%ola E$port %orporation" vs. %larita 1. /acayan" /.,. No. =F?FII" &ecem'er =B" :<=< )!mmissi!" !( a 6rime a-ai"st em.%!$er Ot#er A"a%!-!'s )ases 0 the person o his employer or 0his duly authori"ed representati'e or immediate member o his amily

any

&t $as around such regular employment% ho$e'er% that trouble de'eloped. !he sisters began recei'ing complaints rom students and employees about FALL*8*3AQs di icult personality and sour disposition at $or(. 6n one occasion% FALL*8*3A $as summoned to the 6 ice o the 2irectress by 9&9!*3 A16L&7A3&A% shortly a ter the resignation o the schoolQs Chie Librarian on account o irreconcilable di erences $ith FALL*8*3A% or the purpose o clari ying the matter. 93 A16L&7A3&A also in ormed FALL*8*3A o the negati'e reports recei'ed by her o ice regarding the latterQs rictional $or(ing relationship $ith co0$or(ers and students and reminded FALL*8*3A about the proper beha'ior in the interest o peace and harmony in the school library. FALL*8*3A resented the obser'ations about her actuations and $as completely unrecepti'e to the ad'ice gi'en by her superior. 9he reacted 'iolently to 93 A16L&7A3&A and angrily o ered to resign% repeatedly saying% I6M% & $ill resign. & $ill resign.I !herea ter% $ithout $aiting to be dismissed rom the meeting% she stormed out o the o ice. 0 6n separate occasions therea ter% C9! and 93 A16L&7A3&A (1*!&!&67*39% or bre'ity) sent people to con'ince FALL*8*3A to settle her di erences $ith the ormer. FALL*8*3A remained adamant in her re usal to submit to authority. *'entually% 93 A16L&7A3&A% by letter% in ormed FALL*8*3A to loo( or another +ob as the school had decided to accept her resignation. FALL*8*3A iled a complaint or illegal dismissal. An issue arose as to $hether there $as la$ ul cause or her dismissal. ISSUE/ 467 there $as there la$ ul cause FALL*8*3A<s dismissal or

Con'iction is not necessary here% mere substantial e'idence is re)uired. 7o need or a case. A mere commission o an o ense against the employer $ill +usti y termination. !t#er a"a%!-!'s 6a'ses Ot#er a"a%!-!'s 6a'ses e.-. a&a" !"me"t3 se5'a% #arassme"t3 -r!ss i"e((i6ie"6$ !r .!!r .er(!rma"6eC r'- 'se !r a&'se 2RA >1:A4C attit' e .r!&%emC 6!"(%i6t !( i"terest3 %a6E !( 6!mm!" se"se )ases/ )at#e ra% S6#!!% !( Te6#"!%!-$ 8s. NLR) 2214 S)RA AA>4 FA)TS/ 9tarting as an aspirant to the Congregation o the 3eligious o Firgin Mary (3FM)% FALL*8*3A $or(ed on a 'olunteer basis as a library aide o C9!% an educational institution run by the 3FM sisters. *'entually she became a regular employee o C9!% again as library aide.

1EL,/ G*9 (atio !he reason or $hich FALL*8*3A<s ser'ices $ere terminated% namely% her unreasonable beha'ior and unpleasant deportment in dealing $ith the people she closely $or(s $ith% is analogous to the other I+ust causesI enumerated under A3!.2C2% Labor Code. 0 1*!&!&67*39Q a'erments on FALL*8*3A<s disagreeable character as I)uarrelsome% bossy% unreasonable and 'ery di icult to deal $ith%I are supported by testimonies o se'eral co0employees and students o C9!. &n act% her o'erbearing personality caused the chie librarian to resign% ,urthermore% the complaints about her ob+ectionable beha'ior $ere con irmed by her reproachable actuations during her meeting $ith 93 A16L&7A3&A% $hen FALL*8*3A% upon being ad'ised o the need to impro'e her $or(ing relations $ith others% obstreperously reacted and unceremoniously $al(ed out on her superior% and arrogantly re used to subse)uently clear up matters or to apologi"e

12/ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

there or. !o ma(e matters $orse% she ignored the persons sent by 1*!&!&67*39 to inter'ene in an e ort to bring the matter to a peace ul resolution. !he conduct she e#hibited on that occasion smac(s o sheer disrespect and de iance o authority and assumes the proportion o serious misconduct or insubordination% any o $hich constitutes +ust cause or dismissal rom employment. 0 As C9! is run by a religious order% it is but e#pected that good beha'ior and proper department% especially among the ran(s o its o$n employees% are ma+or considerations in the ul illment o its mission. Hnder the circumstances% the sisters cannot be aulted or deciding to terminate FALL*8*3A $hose presence Ihas become more a burden rather than a +oyI and had pro'ed to be disrupti'e o the harmonious atmosphere o the school. Disposition N+,% decision that E7++E3E,7 #as illegally dismissed" )ET 7)0&E. PT B T 8s. NLR) 22A> S)RA 4<A4 FA)TS/ !his is a case or illegal dismissal iled by >race de >u"man against 1!Z!. >race de >u"man is a probationary employee o 1!Z!. &n her +ob application% she represented that she $as single although she $as married. 4hen management ound out% she $as made to e#plain. -o$e'er% her e#planation $as ound unsatis actory so she $as subse)uently dismissed rom $or(. >race thus iled a case or illegal dismissal against 1!Z! $ith 3AB. According to the Labor Arbiter% >race% $ho had already gained the status o regular employee% $as illegally dismissed by 1!Z!. Moreo'er% he ruled that >race $as apparently discriminated against on account o her ha'ing contracted marriage in 'iolation o company rules. 6n appeal to the 7L3C% the decision o the Labor Arbiter $as upheld. !he Motion or 3econsideration $as li(e$ise rebu ed% hence% this special ci'il action. 1etitioner argued that the dismissal $as not because >race $as married but because o her concealment o the act that she $as married. 9uch concealment amounted to dishonesty% $hich $as $hy she $as dismissed rom $or(. ISSUES/ 4hether or not the company policy o not accepting married $omen or employment $as discriminatory 4hether or not >race<s act o concealment amounted to dishonesty% leading to loss o con idence 4hether or not >race $as illegally dismissed

1EL,/ !here $as discrimination Article 15A o the Labor Code e#plicitly prohibits discrimination merely by reason o the marriage o a emale employee. 1etitioner<s policy o not accepting or considering as dis)uali ied rom $or( any $oman $or(er $ho contracts marriage runs a oul o the test o % and the right against% discrimination% a orded all $omen $or(ers by our labor la$s and by no less than the Constitution. Contrary to petitioner<s assertion that it dismissed pri'ate respondent rom employment on account o her dishonesty% the record discloses clearly that her ties $ith the company $ere dissol'ed principally because o the company<s policy that married $omen are not )uali ied or employment in 1!Z!% and not merely because o her supposed acts o dishonesty. Concealment did not amount to $ill ul dishonesty Ferily% pri'ate respondent<s act o concealing the true nature o her status rom 1!Z! could not be properly characteri"ed as $ill ul or in bad aith as she $as mo'ed to act the $ay she did mainly because she $anted to retain a permanent +ob in a stable company. &n other $ords% she $as practically orced by that 'ery same illegal company policy into misrepresenting her ci'il status or ear o being dis)uali ied rom $or(. 4hile loss o con idence is a +ust cause or termination o employment% it should not be simulated. &t must rest on an actual breach o duty committed by the employee and not on the employer<s caprices. ,urthermore% it should ne'er be used as a subter uge or causes $hich are improper% illegal% or un+usti ied. -o$e'er% 9C ne'ertheless ruled that >race did commit an act o dishonesty% $hich should be sanctioned and there ore agreed $ith the 7L3C<s decision that the dishonesty $arranted temporary suspension o >race rom $or(. >race attained regular status as an employee 1ri'ate respondent% it must be obser'ed% had gained regular status at the time o her dismissal. 4hen she $as ser'ed her $al(ing papers on 8an. 2:% 1::2% she $as about to complete the probationary period o 1;/ days as she $as contracted as a probationary employee on 9eptember 2% 1::1. !hat her dismissal $ould be e ected +ust $hen her probationary period $as $inding do$n clearly raises the plausible conclusion that it $as done in order to pre'ent her rom earning security o tenure.

121 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

!here $as illegal dismissal As an employee $ho had there ore gained regular status% and as she had been dismissed $ithout +ust cause% she is entitled to reinstatement $ithout loss o seniority rights and other pri'ileges and to ull bac( $ages% inclusi'e o allo$ances and other bene its or their monetary e)ui'alent. 6n 9tipulation against Marriage &n the inal rec(oning% the danger o 1!Z!<s policy against marriage is that it stri(es at the 'ery essence% ideals and purpose o marriage as an in'iolable social institution and% ultimately% o the amily as the oundation o the nation. 1etition dismissed. ). A't#!ri*e )a'ses 2Arti6%e 2<34 - re)uires one month prior $ritten notice to 26L* and to **D and generally re)uires the payment o separation pay. S'&sta"tia% ReJ'ireme"ts/ S'&sta"tia% ReJ'ireme"ts/ ARTI)LE 2<3. )%!s're !( esta&%is#me"t a" re '6ti!" !( .ers!""e%. R !he employer may also terminate the employment o any employee due to the installation o labor sa'ing de'ices% redundancy% retrenchment to pre'ent losses or the closing or cessation o operation o the establishment or underta(ing unless the closing is or the purpose o circum'enting the pro'isions o this !itle% by ser'ing a $ritten notice on the $or(ers and the 2epartment o Labor and *mployment at least one (1) month be ore the intended date thereo . &n case o termination due to the installation o labor sa'ing de'ices or redundancy% the $or(er a ected thereby shall be entitled to a separation pay e)ui'alent to at least his one (1) month pay or to at least one (1) month pay or e'ery year o ser'ice% $hiche'er is higher. &n case o retrenchment to pre'ent losses and in cases o closures or cessation o operations o establishment or underta(ing not due to serious business losses or inancial re'erses% the separation pay shall be e)ui'alent to one (1) month pay or to at least one0hal (1P2) month pay or e'ery year o ser'ice% $hiche'er is higher. A raction o at least si# (A) months shall be considered one (1) $hole year. a. i"sta%%ati!" !( %a&!r-sa8i"- e8i6es 0 !he installation o labor0sa'ing de'ices contemplates the installation o machinery to e ect economy and e iciency in this method o production.

&. re '" a"6$ 0 *#ists $here the ser'ices o an employee are in e#cess o $hat $ould reasonably be demanded but the actual re)uirements o the enterprise. Fa6t!rs/ \ 6'er0hiring o $or(ers \ 2ecreased 'olume o business \ 2ropping o a particular product line or ser'ice \ 2uplication o $or( ReJ'isites (!r t#e im.%eme"tati!" !( a re '" a"6$ .r!-ram/ 1. 4ritten notice ser'ed on both the ** and the 26L* at least one month to the intended date o retrenchmentD 2. 1ayment o separation pay e)ui'alent to at least one month pay or at least one month pay or e'ery year o ser'ice% $hiche'er is higherD 5. >ood aith in abolishing the redundant positionsD and .. ,air and reasonable criteria in ascertaining $hat positions are to be declared redundant and accordingly abolished. 6. retre"6#me"t t! .re8e"t %!sses Nmeas're !( %ast res!rtO 0 3etrenchment is an economic ground to reduce the number o employees. &n order to be +usti ied% the termination o employment by reason o retrenchment must be due to business losses or re'erses $hich are serious% actual and real. Criteria in laying0o $or(ers: \ Less pre erred status (i.e. temporary $or(ers) \ * iciency rating \ 9eniority 7'sti($i"- sta" ar s (!r retre"6#me"t/ 1. Losses e#pected should be substantial and not merely de minimis in e#tent. 0 & the loss purportedly sought to be orestalled by retrenchment is clearly sho$n to be unsubstantial and inconse)uential in character% the bona ide nature o the retrenchment $ould appear to be seriously in )uestion. 2. 9ubstantial loss apprehended must be reasonably imminent% as such imminence can be percei'ed ob+ecti'ely and in good aith by the employer. 0 !here should in other $ords be a certain degree o urgency% or the retrenchment% $hich is a ter all a drastic recourse $ith serious conse)uences or the li'elihood o the employees retires or other$ise laid0 o . 5. &t must be reasonably necessary and li(ely to e ecti'ely pre'ent the e#pected losses.

122 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

.. Alleged losses i already reali"ed% and the e#pected imminent losses sought to be orestalled% must be pro'ed by su icient and con'incing e'idence. . t#e 6%!si"- !( !.erati!" !( t#e esta&%is#me"t !r '" ertaEi"- '"%ess t#e 6%!si"- is (!r t#e .'r.!se !( 6ir6'm8e"ti"- t#e .r!8isi!"s !( t#is tit%e 0 may be either: 1. or serious business losses or 2. not due to serious business losses 0 includes bona ide suspension o operations o business e#ceeding A months 0 the signi icance o losses here is that% i the cessation o business $as due to serious business losses then the employer $ould not be liable to pay separation pay to the employee. -o$e'er% it $ould be the other $ay around i the cessation $as not due to serious business losses. Pr!6e 'ra% ReJ'ireme"ts 6mnibus 3ules ,or termination o employment as based on authori"ed causes de ined in Art 2C5 o the LC% the re)uirements o due process shall be deemed complied: 1. $ith upon ser'ice o a $ritten notice to the (sho$ cause letter) a. employee and (so that he can loo( or another +ob) b. the appropriate 3egional 6 ice o the 2epartment (so that it can chec( the 'alidity o the dismissal and or statistical purposes) 2. at least 5/ days be ore the e ecti'ity o the termination 5. speci ying the ground or grounds o termination 1lus[ 9eparation pay0 $ill be gi'en 5/ days a ter the ser'ice o notice o the termination. !his is so because it is only then that they are considered separated rom ser'ice. \ &n case o termination due to installation o labor0 sa'ing de'ices or redundancy% the $or(er a ected thereby shall be entitled to a separation pay e)ui'alent to at least one month pay or at least one month pay or e'ery year o ser'ice% $hiche'er is higher. \ &n case o retrenchment to pre'ent losses and in cases o closure or cessation o operations o establishment or underta(ing not due to serious business losses or inancial re'erses% the separation

pay shall be e)ui'alent to one month pay or at least _ month pay or e'ery year o ser'ice% $hiche'er is higher. A raction o at least A months shall be considered one $hole year. \ &n cases o closure or cessation o operations o establishment due to serious business losses or inancial re'erses% there shall be no separation pay. & the termination is brought about by the completion o the contract or phase thereo % no prior notice is re)uires. & the termination is brought about by the ailure o an employee to meet the standards o the employer in the case o probationary employment% it shall be su icient that a $ritten notice is ser'ed the employee $ithin reasonable time rom e ecti'e date o termination. 1. I"sta%%ati!" !( La&!r Sa8i"- ,e8i6es 0 !he installation o labor0sa'ing de'ices contemplates the installation o machinery to e ect economy and e iciency in this method o production. )ase/ Asia" A%6!#!% )!r.. 8s. NLR) 20ar. 2A3 1>>>4 1etition or 3e'ie$ on certiorari o 7L3C decision FA)TS/ &n 9ept ]:1% the 1arsons amily% $ho originally o$ned the controlling stoc(s in Asian Alcohol Corp (AAC)% $ere dri'en by mounting business losses to sell their ma+ority rights to 1rior -oldings% &nc. $hich too( o'er AAC<s management and operation. 0 !o pre'ent urther losses% 1rior -olding implemented an organi"ational plan and other cost0 sa'ing measures. 9ome 11B employees out o a total $or( orce o 5A/ $ere separated. B2 o them occupied redundant positions that $ere abolished. 6 these positions% 21 held by union members and ;1 by non0union members. 0 !he A pri'ate respondent $or(ers are among those union members $hose positions $ere abolished due to redundancy. &n 6ct% ]:2% they recei'ed indi'idual notices o termination e ecti'e 7o' 5/% ]:2. !hey $ere paid the e)ui'alent o 1 month salary or e'ery year o ser'ice as separation pay% the money 'alue o their unused sic(% 'acation% emergency and seniority lea'e credits% 15th month pay or the year 1::2% medicine allo$ance% ta# re unds% and good$ill cash bonuses or those $ith at least 1/ years o ser'ice. All o them e#ecuted s$orn releases% $ai'ers and )uitclaims. *#cept or 2% they all signed s$orn statements o con ormity to the company retrenchment program. And e#cept or one% they all tendered letters o resignation.

125 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

0 !he A pri'ate respondents iled $ith the 7L3C complaints or illegal dismissal $ith a prayer or reinstatement $ith bac($ages% moral damages and attyQs ees. !hey alleged that AAC used the retrenchment program as a subter uge or union busting. !hey claimed that they $ere singled out or separation by reason o their acti'e participation in the union. !hey also asse'erated that Asian Alcohol $as not ban(rupt as it has engaged in an aggressi'e scheme o contractual hiring. 0 LA ruled in a'or o AAC saying that retrenchment $as 'alid. 7L3C re'ersed LA ruling that there $as illegal dismissal. &t re+ected the e'idence by AAC to pro'e its business re'ersals. &t ruled that the positions o pri'ate respondents $ere not redundant or the simple reason that they $ere replaced by casuals. -ence% this petition. ISSUE/ 467 the positions o the herein pri'ate respondent $or(ers are unnecessary redundant and super luous% thereby +usti ying the termination o their employment 1EL,/ G*9 (atio 3etrenchment and redundancy under A2C5 o Labor Code1 are +ust causes or the employer to terminate the ser'ices o $or(ers to preser'e the 'iability o the business. &n e#ercising its right% ho$e'er% management must aith ully comply $ith the substanti'e and procedural re)uirements laid do$n by la$ and +urisprudence (easoning On ,etrenchment: AAC $as able to pro'e the . re)uirements or retrenchment to be 'alid: (1) the retrenchment $as reasonably necessary and li(ely to pre'ent business losses% $hich% i already incurred% are not merely de minimis% but substantial% serious% actual and real% or i only e#pected% are reasonably imminent as percei'ed ob+ecti'ely and in good aith by the employerD (2) *3 ser'ed $ritten notice both to the **s and to 26L* at least 1 mo. prior to the intend date o retrenchmentD(5) *3 paid the retrenched employees separation pay e)ui'alent to 1 mo. pay or at least 1P2 month pay or e'ery year o ser'ice% $hiche'er is higherD (.) *3 e#ercised its prerogati'e to retrench employees in good aith or the ad'ancement o its interest o its interest and not to de eat or circum'ent the employeesQ right to security o tenureD and (;) *3 used air and 1 Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the
employment of any employee due to the installation of labor saving devices, redundancy, retrenchment, to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a ritten notice on the orkers and the !inistry of "abor and #mployment at least one $%& month before the intended date thereof. 'n case of termination due to the installation of labor saving devices or redundancy, the orker affected thereby shall be entitled to a separation pay e(uivalent to at least one $%& month pay or to at least one $%& month pay for every year of service, hichever is higher. 'n case of retrenchment to prevent losses and in case of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be e(uivalent to one $%& month pay at least one)half $%*2&, month pay for every year of service, hichever is higher. A fraction of at least si+ $,& month shall be considered one $%& hole year.

reasonable criteria in ascertaining $ho $ould be dismissed and $ho $ould be retained among the **s% such as status ( i.e.% $hether they are temporary% casual% regular or managerial employees)% e iciency% seniority% physical itness% age% and inancial hardship or certain $or(ers. . On ,edundancy: 3edundancy e#ists $hen the ser'ice capability o the $or( orce is in e#cess o $hat is reasonably needed to meet the demands on the enterprise. A redundant position is one rendered super luous by any o these actors: o'erhiring o $or(ers% decreased 'olume o business% dropping o a particular product line pre'iously manu actured by the company or phasing out o a ser'ice acti'ity priorly underta(en by the business. Hnder these conditions% *3 has no legal obligation to (eep in its payroll more **s than are necessary or the operation o its business. . 1rocedure L ,e8uisites for valid implementation of valid redundancy program: (1) $ritten notice ser'ed on both the employees and the 2epartment o Labor and *mployment at least one month prior to the intended date o retrenchmentD (2) payment o separation pay e)ui'alent to at least one month pay or at least one month pay or e'ery year o ser'ice% $hiche'er is higherD (5) good aith in abolishing the redundant positionsD and (.) air and reasonable criteria in ascertaining $hat positions are to be declared redundant and accordingly abolished. . On Effect of Employment of 0ndependent %ontractor: An employerQs good aith in implementing a redundancy program is not necessarily destroyed by a'ailment o the ser'ices o an independent contractor to replace the ser'ices o the terminated employees. 4e ha'e pre'iously ruled that the reduction o the number o $or(ers in a company made necessary by the introduction o an independent contractor is +usti ied $hen the latter is underta(en in order to e ectuate more economic and e icient methods o production. &n the case at bar% pri'ate respondents ailed to pro er any proo that the management acted in a malicious or arbitrary manner in engaging the ser'ices o an independent contractor to operate the Laura $ells. Absent such proo % the Court has no basis to inter ere $ith the 'ona fide decision o management to e ect more economic and e icient methods o production. Disposition 1etition >3A7!*2. 7L3C decision set aside. LA ruling reinstated. ,!%e P#i%s. Vs. NLR) 2Se.t. 133 20014 FA)TS: 2ole 1hilippines% &nc.% is a corporation organi"ed and e#isting under 1hilippine la$s. &t is engaged in the business o gro$ing% canning% processing and manu acturing pineapples and other allied products. !he other petitioners $ere 2ole

12. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

corporate o icers at the time the cases $ere instituted 0 1ri'ate respondents $ere 2ole<s employees o di erent ran(s and positions. 0 &n 1::/ and 1::1% 26L* carried out a massi'e manpo$er reduction and restructuring program aimed at reducing the total $or( orce and the number o positions in the company<s table o organi"ation. 0 2ole intimates that the 1::/01::1 reduction $as a continuation o pre'ious e orts to restructure its organi"ation. 0 1re'iously% in 1:C2% 2ole reduced its manpo$er by ;/: $or(ers but prolonged collecti'e bargaining negotiations% $hich ended in 1::/% pre'ented the company rom proceeding $ith its restructuring 0 Among the actors considered by the company in underta(ing the reduction program $as the high absenteeism rate% $hich in 1:C: accounted or 1AL o total man hours. !he high absenteeism rate translated to higher paid sic( lea'es% higher operating costs or medical acilities% and higher transportation costs due to under0 illed and late hauls. 0 2ole also cites ?the e#acerbation o operating cost problems due to actors beyond JitsK control% i.e.% the >ul 4ar% oil price increases% mandated $age increases% the :L import le'y% po$er rate hi(es% JandK increased land rentals%@ e#isting at that time. 0 ,urthermore% the ?bloody 2ecember 1:C: coup d<etat shoo( in'estor con idence and put in doubt the continued economic progress o the country.@ 0 1ursuant to its restructuring e orts% 2ole abolished the positions o oremen% bargaining capataces and oreladies. *mployees occupying these positions $ere either promoted or $ere dismissed on grounds o redundancy. 0 !o address the surplus o manpo$er relati'e to its operations% 2ole also decided to reduce the number o employees company0$ide. &n 1::/% the company o ered a 9pecial Foluntary 3esignation (9F3) program o $hich many employees% including a number o pri'ate respondents% a'ailed. 0 Hpon appro'al o the applications% notices o termination $ere sent to the employees $ho a'ailed o the 9F3. 0 A ter recei'ing the bene its% said employee0 applicants e#ecuted a ?3elease@ stating that the employee had no claims against 2ole in connection $ith his or her employment. 9ubse)uently% the dismissed employees e#ecuted another ?3elease o Claim@ in a'or o 2ole. 0 A total o 2%5;B hourly and monthly salaried employees $ere separated rom 2ole during this period. 0 A ter assessing the outcome o the 9F3% 2ole ound that it could still do $ith lesser employees% and proceeded to dismiss more o them in March 1::1.

0 6'erall% 2%B:2 employees $ere separated under the 9F3 1rogram. 0 &n 6ct. 1::1% complaints or illegal dismissal $ere iled against 2ole by 2e Lara et al. 0 LA 9olano dismissed the complaints or lac( o meritD their dismissal $as 'alid. 0 7L3C re'ersed the LA and ordered reinstatement. 2enied 26L*<s M3. ISSUE: 467 26L*<9 redundancy program is 'alid and i so% $on the dismissal o the respondent employees are 'alid as $ell 1EL,/ G*9 0 3edundancy is one o the authori"ed causes or the dismissal o an employee. 0 !he lac( o notice to the 26L* does not render the redundancy program 'oid. (easoning 0 7iltshire Dile *o. Inc., vs. 21(*# ?# # # redundancy in an employer<s personnel orce necessarily or e'en ordinarily re ers to duplication o $or(. !hat no other person $as holding the same position that pri'ate respondent held prior to the termination o his ser'ices% does not sho$ that his position had not become redundant. &ndeed% in any $ell0organi"ed business enterprise% it $ould be surprising to ind duplication o $or( and t$o (2) or more people doing the $or( o one person. 4e belie'e that redundancy% or purposes o the Labor Code% e#ists $here the ser'ices o an employee are in e#cess o $hat is reasonably demanded by the actual re)uirements o the enterprise. 9uccinctly put% a position is redundant $here it is super luous% and super luity o a position or positions may be the outcome o a number o actors% such as o'erhiring o $or(ers% decreased 'olume o business% or dropping o a particular product line or ser'ice acti'ity pre'iously manu actured or underta(en by the enterprise.@ 0 !he characteri"ation o an employee<s ser'ices as no longer necessary or sustainable% and% there ore% properly terminable% is an e#ercise o business +udgment on the part o the employer. !he $isdom or soundness o such characteri"ation or decision is not sub+ect to discretionary re'ie$ pro'ided% that 'iolation o la$ or arbitrary or malicious action is not sho$n. 0 2ole<s redundancy program does not appear to be tainted by bad aith e'en i it hired casual employees to replace those dismissed (as it has al$ays hired casual employees to augment its manpo$er in accordance $ith the demands o the industry.) 0 !he petition alleges that the redundancy program is part o a $ide0scale restructuring o the company. 0 !his purported restructuring is supported by the company<s undisputed history to$ards these ends% $hich culminated in the abolition o certain positions

12; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

and the 9pecial Foluntary 3esignation program in 1::/01::1. 0 Among the a'o$ed goals o such restructuring is the reduction o absenteeism in the company. !he harsh economic and political climate then pre'ailing in the country also emphasi"ed the need or cost0 sa'ing measures. 0 3eorgani"ation as a cost0sa'ing de'ice is ac(no$ledged by +urisprudence. An employer is not precluded rom adopting a ne$ policy conduci'e to a more economical and e ecti'e management% and the la$ does not re)uire that the employer should be su ering inancial losses be ore he can terminate the ser'ices o the employee on the ground o redundancy. 0 !he la$% ho$e'er% does not pre'ent employers rom sa'ing on labor costs. 0 &nternational Macleod% &nc. 's. &ntermediate Appellate Court: held that the determination o the need or the phasing out o a department as a labor and cost sa'ing de'ice because it $as no longer economical to retain said department is a management prerogati'e% $ith $hich the courts $ill not inter ere. 0 2e 6campo 's. 7L3C: ?JtKhe reduction o the number o $or(ers in a company made necessary by the introduction o the ser'ices o >emac Machineries in the maintenance and repair o its industrial machinery is +usti ied. !here can be no )uestion as to the right o the company to contract the ser'ices o >emac Machineries to replace the ser'ices rendered by the terminated mechanics $ith a 'ie$ to e ecting more economic and e icient methods o production.@ 9o long as the underta(ing to sa'e on labor costs is not attended by malice% arbitrariness% or intent on the part o the employer to circum'ent the la$% as in this case% the Court $ill not inter ere $ith such endea'or. (atio & an employee consented to his retrenchment or 'oluntarily applied or retrenchment $ith the employer due to the installation o labor0sa'ing de'ices% redundancy% closure or cessation o operation or to pre'ent inancial losses to the business o the employer% the re)uired pre'ious notice to the 26L* is not necessary as the employee thereby ac(no$ledged the e#istence o a 'alid cause or termination o his employment (International 8arvester, Inc. vs. 21(*-. -ere% most o the pri'ate respondents e'en illed up application orms to be considered or the redundancy program and thus ac(no$ledged the e#istence that their ser'ices $ere redundant. 0 1ri'ate respondents e#ecuted t$o releases in a'or o petitioner company. 0 7ot all )uitclaims are per se in'alid or against public policy. But those

(1) $here there is clear proo that the $ai'er $as $angled rom an unsuspecting or gullible person or (2) $here the terms o settlement are unconscionable on their ace are in'alid. &n these cases% the la$ $ill step in to annul the )uestionable transaction. !here is no sho$ing here that pri'ate respondents are unsuspecting or gullible persons. 7either are the terms o the settlement unconscionable. &ndeed% pri'ate respondents recei'ed a generous separation pac(age% as set out in the narration o acts abo'e. Disposition 1etition is >3A7!*2 and the decision o the 7L3C A77HLL*2 and 9*! A9&2*. !36 L&,!*2 Serra"! 8s. NLR) 27a". 2;3 20004 FA)TS: 3uben 9errano $as hired by &setann 2ept. 9tore as a security chec(er 1:C. ContractualD 1:C; 3egularD 1:CC -ead o 9ecurity Chec(ers &n 1::1% as a cost0cutting measure% &setann decided to phase out the entire security section and engage the ser'ices o an independent security agency. &setann sent a memo to 9errano on 11 6ct 1::1% reiterating their 'erbal notice o termination e ecti'e on the same day. 9errano iled a complaint on 5 2ec 1::1 or illegal dismissal% illegal layo % un air labor practice% underpayment o $ages% nonpayment o salary and o'ertime pay. La&!r Ar&iter #e% t#at Serra"! ?as i%%e-a%%$ ismisse ,ailed to establish that the cause o retrenchment is to minimi"e losses 2id not accord due process to 9errano 2id not use reasonable standards in selecting employees to be terminated 2id not sho$ employees< ine iciency so as to +usti y their replacement !he day a ter 9errano<s dismissal% &setann hired another person as a sa ety and security super'isor &setann ordered to pay bac($ages% reinstatement% unpaid $ages% 15th month pay% attorney<s ees NLR) re8erse La&!r Ar&iterQs e6isi!" '.!" Iseta""Qs a..ea% 1hase0out o security section% hiring o agency is a legitimate business decision Labor Arbiter<s distinction bet$een retrenchment and employment o cost0sa'ing de'ices insigni icant 3easonable criteria does not apply because the entire 9ecurity 9ection $as abolished

12A E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

7o bad aith in appointing a super'isor because it $as separate rom 9errano<s position as 9ecurity Chec(ers head &setann ordered to gi'e separation pay% unpaid salary% 15th month pay 9errano<s M 3 denied ISSUE AN, 1OL,IN9/ 467 the abolition o the 9ecurity Chec(ers section and the employment o an independent security agency alls under any o the authori"ed causes or dismissal under Article 2C5 o the Labor Code 0 YES% authori"ed cause is redundancyD 9errano should be gi'en separation pay at the rate o one0month pay or e'ery year o ser'ice (Art. 2C5) ,IS)USSION Art. 2<3 pro'ides that one month be ore intended date% $ritten notice must be ser'ed on the $or(ers and 26L* Authori:ed causes under Art. .B> +*losure of establishment and reduction of personnel&nstallation o labor0 Se.arati!" .a$ at the rate o at sa'ing de'ices least one0month pay or !"eRe '" a"6$ m!"t# .a$ (!r e8er$ $ear !( ser8i6e ($hiche'er is higher) 3etrenchment to 9eparation pay at the rate o at pre'ent losses least one0month pay or hal 0 Closing or cessation month pay or e'ery year o o operations ser'ice ($hiche'er is higher) Absent proo that management acted in a malicious or arbitrary manner% the Court $ill not inter ere $ith the employer<s e#ercise o +udgment. !hat the phase0out constituted a legitimate business decision is a actual inding o 7L3C. 8istory of policies When there is just cause 'ut no due process 5re8uirements of notice and opportunity to 'e heard6 Be(!re/ 2ismissal is illegal !he s#i(t too( place in Wenphil %orp. v. N+,% -ighly pre+udicial to the employer<s interests to reinstate an employee $ho has been sho$n to be guilty o the charges that $arranted his dismissal 2ismissal must be or +ust or authori"ed cause and a ter due process N!?/ 2ismissal shall be upheld but the employer must be sanctioned or non0compliance $ith the re)uirements o % or or ailure to obser'e% due process ()e'uguero v. N+,%)

,ines imposed range rom 11%/// to 11/%/// Ree5ami"i"- Wenphil doctrine 8. 1anganiban Monetary sanctions are too insigni icant% niggardly% late 8. 1uno ?2ismiss no$% pay later@ policy con'enient or moneyed employers &n their opinion% such dismissal is 'oid and employee should be reinstated and paid bac($ages Reme $ pay ull bac($ages rom dismissal until determination that dismissal $as or a +ust cause BH! 9!&LL% dismissal must be upheld 7hy violation of the notice re6uirement cannot be considered a denial of due process resulting in the nullity of dismissal 2ue process clause is a limitation on go'ernmental po$ers and 26*9 76! A11LG to the e#ercise o pri'ate po$er a. 6nly the state has authority to ta(e li e% liberty% property b. 1urpose o clause is to ensure that the e#ercise o this po$er is consistent $ith ci'ili"ed methods 7otice and hearing are re)uired under the due process clause be ore the po$er o the organi"ed society is brought to bear upon the indi'idual a. T#is is NOT t#e 6ase !( termi"ati!" !( em.%!$ee no ad'ersary system here (there is no charge against the employee) &. P'r.!se !( 30- a$ ?ritte" "!ti6e is t! -i8e em.%!$ee time t! .re.are (!r t#e e8e"t'a% I!& %!ss% and or 26L* to determine 467 economic causes e#ist to +usti y his termination 6. E8e" i" 6ases !( ismissa% '" er Arti6%e 2<2 J1K% purpose o notice and hearing is 76! to comply $ith the due process clause in the ConstitutionD Compliance $ith notice re)uirement does not oreclose right o employee to )uestion the legality o his dismissal . 1ist!r$ !( re%ate %a?s 1. Art. 5/2 o 9panish Code o Commerce employeePemployer can terminate relationship by gi'ing one month noticeD in lieu o notice% mesada (one month pay) could be gi'en to employee 2. 7CC 22B/ repealed Art. 5/2 o 9panish Code o Commerce 5. 3A 1/;2 (!ermination 1ay La$) re'i'ed mesada

12B E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

..

3A 1BCB amended 3A 1/;2 by pro'iding or gi'ing o ad'ance notice or payment o compensation (1P2 month per year o ser'ice) ;. 3ules implementing B1 15/% 3A AB1; (amending 7CC 2BB(b) notice re)uired e'en $hen the dismissal $as or cause *mployer CA776! be e#pected to be an impartial +udge o his o$n cause. Also the case or termination or a +ust cause under Article 2C2% 8. 1uno disputes this as he says that many cases ha'e been $on by employees be ore grie'ance committees manned by impartial +udges o the company. >rie'ance machinery is 2&,,*3*7! established by agreement o employer% employees and is composed o representati'es rom both sides I( t#e 8i!%ati!" !( t#e "!ti6e reJ'ireme"t is "!t a e"ia% !( 'e .r!6ess3 ?#at is itK Mere ailure to obser'e a procedure or the termination o employment% $hich ma(es the termination merely ine ectual W#at maEes a ismissa% !( a" em.%!$ee i%%e-a%K 6nly the absence o a +ust cause or termination as pro'ided in Article 2B: Basi A't#!ri*e s 6a'se Art. 2C5 Art. 2C5 1 ` N!ti6e Rei"state +i" !( .a$ ` ` ` 1 9eparation pay% bac($ages Bac($ages Bac($ages rom termination until it determined that there +ust cause

Art. 2C2

is is

,ISPOSITIVE PORTION 1etition granted. 7L3C resolution modi ied. &setann is ordered to: 1ay separation pay e)ui'alent to one month pay per year o ser'ice Hnpaid salary 1roportionate 15th month pay ,ull bac($ages rom termination until this decision becomes inal Case remanded to Labor Arbiter to determine computation o monetary a$ards to 9errano. OPINIONS G2H

Se.arate O.i"i!" D Be%%!si%%! 1re ers to call indemnity or penalty as disturbance compensation 1roposes that amount o the a$ard be uni orm and rational and not arbitrary ,isse"ti"- O.i"i!" D P'"! Wenphil did not change ruling that 'iolation o the pre0dismissal notice re)uirement is an in ringement o due process 9ubmits a return to the pre0Wenphil rule $here a reasonless 'iolation o the notice re)uirement ma(es the dismissal illegal and results in the employee<s reinstatement 6ne undesirable e ect o 4enphil is to compel employees to see( relie against illegal dismissals $ith 26L* ($hereas be ore% a remedy can be sought be ore the employer) and o tentimes% they do not (no$ $hy they $ere dismissed in the irst place 2ilution o the rule has been abused by employers $ho ollo$ed the ?dismiss no$% pay later@ strategy An employee under Article 2C5 has a stronger claim to the right to a pre0dismissal notice and hearing (rather than post acto dismissal hearing) 2isagrees $ith ma+ority opinion that due process re)uirement does not apply to the e#ercise o pri'ate po$erD pri'ate due process is a settled norm in administrati'e la$ Se.arate O.i"i!" D Vit' A +ust or authori"ed cause and a $ritten notice are re)uired concurrently but not e)uipollent in their conse)uence in terminating an employer0 employee relationship 4here there is no +ust or authori"ed cause% reinstatement and payment o bac($ages $ould be proper. 2amages might also be a$arded i dismissal is attended by bad aith o employer. 9eparation pay can substitute or reinstatement i such reinstatement is not easible. *mployer must be made to pay corresponding damages or ailure to comply $ith notice re)uirement Se.arate O.i"i!" D Pa"-a"i&a" 7otice re)uirement inds basis not only in the Labor Code but also in the due process clause o the Constitution 4hen the employee is dismissed $ithout due process% he is illegally dismissed. -e is entitled to bac($ages and reinstatement. !he Labor Code grants the dismissed employee the right to be noti ied as $ell as the right to be heard.

12C E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

ISSUE: 467 there $as illegal dismissal 2. Re '" a"6$/ ReJ'isites 0 *#ists $here the ser'ices o an employee are in e#cess o $hat $ould reasonably be demanded but the actual re)uirements o the enterprise. Fa6t!rs/ \ 6'er0hiring o $or(ers \ 2ecreased 'olume o business \ 2ropping o a particular product line or ser'ice \ 2uplication o $or( (e6uisites for the implementation of a redundancy program# 1. 4ritten notice ser'ed on both the ** and the 26L* at least one month to the intended date o retrenchmentD 2. 1ayment o separation pay e)ui'alent to at least one month pay or at least one month pay or e'ery year o ser'ice% $hiche'er is higherD 5. >ood aith in abolishing the redundant positionsD and .. ,air and reasonable criteria in ascertaining $hat positions are to be declared redundant and accordingly abolished. )ases/ 9!% e" T#rea +"itti"- 8s. NLR) 20ar. 113 1>>>4 FA)TS: 9e'eral employees o >olden !hread Mnitting &ndustries (>!M) $ere dismissed or di erent reasons. 2 employees $ere allegedly or slashing the company<s products (to$els)% 2 or redundancy% 1 or threatening the personnel manager and 'iolating the company rules% and 1 or abandonment o $or(. 0 !he laborers iled complaints or illegal dismissal. !hey allege that the company dismissed them in retaliation or establishing and being members o the Labor Hnion. >!M% on the other hand% contend that there $ere 'alid causes or the terminations. !he dismissals $ere allegedly a result o the slashing o their products% rotation o $or(% $hich in turn $as caused by the lo$ demand or their products% and abandonment o $or(. 43! to the cases in'ol'ing the slashing o their products and threats to the personnel manager% the dismissals $ere in e ect a orm o punishment. 0 !he labor arbiter ruled partially in a'or o >!M. -e said that there $as no sho$ing that the dismissals $ere in retaliation or establishing a union. -e% ho$e'er% a$arded separation pay to some employees. 0 7L3C% ho$e'er% appreciated the e'idence di erently. &t held that there $as illegal dismissal and ordered reinstatement. 1EL,/ G*9 (atio 2ismissal is the ultimate penalty that can be meted to an employee. &t must there ore be based on a clear and not on an ambiguous or ambi'alent ground. (easoning 0 43! to the case in'ol'ing slashing o to$els% the employees $ere not gi'en procedural due process. !here $as no notice and hearing% only outright denial o their entry to the $or( premises by the security guards. !he charges o serious misconduct $ere not su iciently pro'ed. 0 43! to the employees dismissed or redundancy% there $as also denial o procedural due process. -earing and notice $ere not obser'ed. !hus% although the characteri"ation o an employee<s ser'ices is a management unction% it must irst be pro'ed $ith e'idence% $hich $as not done in this case. the company cannot merely declare that it $as o'ermanned. 0 43! to the employee dismissed or disrespect% the 9C belie'ed the story 'ersion o the company ($hich essentially said that the personnel manager $as threatened upon mere ser'ice o a suspension order to the employee)% but ruled that the dismissal could not be upheld. ?the dismissal $ill not be upheld $here it appears that the employee<s act o disrespect $as pro'o(ed by the employer. ### the employee hurled incenti'es at the personnel manager because she $as pro'o(ed by the baseless suspension imposed on her. !he penalty o dismissal must be commensurate $ith the act% conduct% or omission to the employee.@ !he dismissal $as too harsh a penaltyD a suspension o 1 $ee( $ould ha'e su iced. ?>!M e#ercised their authority to dismiss $ithout due regard to the pro'isions o the Labor Code. !he right to terminate should be utili"ed $ith e#treme caution because its immediate e ect is to put an end to an employeeQs present means o li'elihood $hile its distant e ect% upon a subse)uent inding o illegal dismissal% is +ust as pernicious to the employer $ho $ill most li(ely be re)uired to reinstate the sub+ect employee and grant him ull bac( $ages and other bene its. Disposition 2ecision A,,&3M*2 Wits#ire Fi%e )!. i"6. 8s. NLR) 21>3 S)RA ::A4 FA)TS/ 1ri'ate respondent Ficente !. 6ng $as the 9ales Manager o petitioner 4iltshire ,ile Co.% &nc. (I4iltshireI) rom 1A March 1:C1 up to 1C 8une 1:C;. 6n 15 8une 1:C;% upon pri'ate respondentQs return

12: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

rom a business and pleasure trip abroad% he $as in ormed by the 1resident o petitioner 4iltshire that his ser'ices $ere being terminated. 1ri'ate respondent maintains that he tried to get an e#planation rom management o his dismissal but to no a'ail. 6n 1C 8une 1:C;% $hen pri'ate respondent again tried to spea( $ith the 1resident o 4iltshire% the companyQs security guard handed him a letter $hich ormally in ormed him that his ser'ices $ere being terminated upon the ground o redundancy. 1ri'ate respondent iled% on 21 6ctober 1:C;% a complaint be ore the Labor Arbiter or illegal dismissal alleging that his position could not possibly be redundant because nobody (sa'e himsel ) in the company $as then per orming the same duties. 1ri'ate respondent urther contended that retrenching him could not pre'ent urther losses because it $as in act through his remar(able per ormance as 9ales Manager that the Company had an unprecedented increase in domestic mar(et share the preceding year. ,or that accomplishment% he continued% he $as promoted to Mar(eting Manager and $as authori"ed by the 1resident to hire our (.) 9ales *#ecuti'es i'e (;) months prior to his termination. 0 &n its ans$er% petitioner company alleged that the termination o respondentQs ser'ices $as a cost0 cutting measure: that in 2ecember 1:C.% the company had e#perienced an unusually lo$ 'olume o orders: and that it $as in act orced to rotate its employees in order to sa'e the company. 2espite the rotation o employees% petitioner allegedD it continued to e#perience inancial losses and pri'ate respondentQs position% 9ales Manager o the company% became redundant. 0 6n 2 2ecember 1:CA% during the proceedings be ore the Labor Arbiter% petitioner% in a letter 1 addressed to the 3egional 2irector o the then Ministry o Labor and *mployment% noti ied that o icial that e ecti'e 2 8anuary 1:CB% petitioner $ould close its doors permanently due to substantial business losses. 0 &n a decision dated 11 March 1:CB% the Labor Arbiter declared the termination o pri'ate respondentQs ser'ices illegal and ordered petitioner to pay pri'ate respondent bac($ages% unpaid salaries in the amount o % accumulated sic( and 'acation lea'es in the amount o % hospitali"ation bene it pac(age in the amount% unpaid commission in the amount o % moral damages in the amount o and attorneyQs ees in the amount o . 6n appeal by petitioner 4iltshire% the 7ational Labor 3elations Commission (I7L3CI) a irmed in toto on : ,ebruary 1:CC the decision o the Labor Arbiter. 0 &n this 1etition or %ertiorari% it is submitted that pri'ate respondentQs dismissal $as +usti ied and not illegal. 1etitioner maintains that it had been incurring

business losses beginning 1:C. and that it $as compelled to reduce the si"e o its personnel orce. 1etitioner also contends that redundancy as a cause or termination does not necessarily mean duplication o $or( but a Isituation $here the ser'ices o an employee are in e#cess o $hat is demanded by the needs o an underta(ing ISSUEC 467 pri'ate respondent<s dismissal $as +usti ied on the ground o retrenchment 1EL,/ G*93 !he Court resol'ed to grant due course to the 1etition or %ertiorari. !he 3esolutions o the 7ational Labor 3elations Commission dated : ,ebruary 1:CC and B March 1:CC are hereby 9*! A9&2* and 7HLL&,&*2. !he !emporary 3estraining 6rder issued by this Court on 21 March 1:CC is hereby made 1*3MA7*7!. (atio. -a'ing re'ie$ed the record o this case% the Court has satis ied itsel that indeed petitioner had serious inancial di iculties be ore% during and a ter the termination o the ser'ices o pri'ate respondent. ,or one thing% the audited inancial statements o the petitioner or its iscal year ending on 51 8uly 1:C; prepared by a irm o independent auditors% sho$ed a net loss in the amount o 1.%.51%521.// and a total de icit or capital impairment at the end o year o 1A%BBA%.:5.//. 2 &n the preceding iscal year (1:C50 1:C.)% $hile the company sho$ed a net a ter ta# income o 1C.5%;/A.//% it actually su ered a de icit or capital impairment o 12%5.;%1B2.//. Most importantly% petitioner 4iltshire inally closed its doors and terminated all operations in the 1hilippines on 8anuary 1:CB% barely t$o (2) years a ter the termination o pri'ate respondentQs employment. 4e consider that inally shutting do$n business operations constitutes strong con irmatory e'idence o petitionerQs pre'ious inancial distress. !he Court inds it 'ery di icult to suppose that petitioner 4iltshire $ould ta(e the inal and irre'ocable step o closing do$n its operations in the 1hilippines simply or the sole purpose o easing out a particular o icer or employee% such as the pri'ate respondent. 0 !urning to the legality o the termination o pri'ate respondentQs employment% $e ind merit in petitionerQs basic argument. !he Court $as unable to sustain public respondent 7L3CQs holding that pri'ate respondentQs dismissal $as not +usti ied by redundancy and hence illegal. &n the irst place% $hile the letter in orming pri'ate respondent o the termination o his ser'ices used the $ord IredundantI% that letter also re erred to the company ha'ing IincurJredK inancial losses $hich JinK act has compelled JitK to resort to retrenchment to pre'ent urther lossesI. 3 !hus% $hat the letter $as in e ect saying $as that because o inancial losses% retrenchment $as necessary% $hich retrenchment in

15/ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

turn resulted in the redundancy o pri'ate respondentQs position. 0 &n the second place% the Court does not belie'e that redundancy in an employerQs personnel orce necessarily or e'en ordinarily re ers to duplication o $or(. !hat no other person $as holding the same position that pri'ate respondent held prior to the termination o his ser'ices% does not sho$ that his position had not become redundant. &ndeed% in any $ell0organi"ed business enterprise% it $ould be surprising to ind duplication o $or( and t$o (2) or more people doing the $or( o one person. 3edundancy% or purposes o our Labor Code% e#ists $here the ser'ices o an employee are in e#cess o $hat is reasonably demanded by the actual re)uirements o the enterprise. 9uccinctly put% a position is redundant $here it is super luous% and super luity o a position or positions may be the outcome o a number o actors% such as o'erhiring o $or(ers% decreased 'olume o business% or dropping o a particular product line or ser'ice acti'ity pre'iously manu actured or underta(en by the enterprise. 4 !he employer has no legal obligation to (eep in its payroll more employees than are necessarily or the operation o its business. &n the third place% in the case at bar% petitioner 4iltshire% in 'ie$ o the contraction o its 'olume o sales and in order to cut do$n its operating e#penses% e ected some changes in its organi"ation by abolishing some positions and thereby e ecting a reduction o its personnel. !hus% the position o 9ales Manager $as abolished and the duties pre'iously discharged by the 9ales Manager simply added to the duties o the >eneral Manager% to $hom the 9ales Manager used to report. &t is o no legal moment that the inancial troubles o the company $ere not o pri'ate respondentQs ma(ing. 1ri'ate respondent cannot insist on the retention o his position upon the ground that he had not contributed to the inancial problems o 4iltshire. !he characteri"ation o pri'ate respondentQs ser'ices as no longer necessary or sustainable% and there ore properly terminable% $as an e#ercise o business +udgment on the part o petitioner company. !he $isdom or soundness o such characteri"ation or decision $as not sub+ect to discretionary re'ie$ on the part o the Labor Arbiter nor o the 7L3C so long% o course% as 'iolation o la$ or merely arbitrary and malicious action is not sho$n. &t should also be noted that the position held by pri'ate respondent% 9ales Manager% $as clearly managerial in character. ,!%e P#i%s. Vs. NLR) 23:A S)RA 1244 FA)TS: 2ole 1hilippines% &nc.% is a corporation organi"ed and e#isting under 1hilippine la$s. &t is engaged in the business o gro$ing% canning% processing and manu acturing pineapples and other

allied products. !he other petitioners $ere 2ole corporate o icers at the time the cases $ere instituted. 1ri'ate respondents $ere 2ole<s employees o di erent ran(s and positions. &n 1::/ and 1::1% 26L* carried out a massi'e manpo$er reduction and restructuring program aimed at reducing the total $or( orce and the number o positions in the company<s table o organi"ation. 2ole intimates that the 1::/01::1 reduction $as a continuation o pre'ious e orts to restructure its organi"ation. 0 1re'iously% in 1:C2% 2ole reduced its manpo$er by ;/: $or(ers but prolonged collecti'e bargaining negotiations% $hich ended in 1::/% pre'ented the company rom proceeding $ith its restructuring 0 Among the actors considered by the company in underta(ing the reduction program $as the high absenteeism rate% $hich in 1:C: accounted or 1AL o total man hours. !he high absenteeism rate translated to higher paid sic( lea'es% higher operating costs or medical acilities% and higher transportation costs due to under0 illed and late hauls. 0 2ole also cites ?the e#acerbation o operating cost problems due to actors beyond JitsK control% i.e.% the >ul 4ar% oil price increases% mandated $age increases% the :L import le'y% po$er rate hi(es% JandK increased land rentals%@ e#isting at that time. 0 ,urthermore% the ?bloody 2ecember 1:C: coup d<etat shoo( in'estor con idence and put in doubt the continued economic progress o the country.@ 0 1ursuant to its restructuring e orts% 2ole abolished the positions o oremen% bargaining capataces and oreladies. *mployees occupying these positions $ere either promoted or $ere dismissed on grounds o redundancy. 0 !o address the surplus o manpo$er relati'e to its operations% 2ole also decided to reduce the number o employees company0$ide. &n 1::/% the company o ered a 9pecial Foluntary 3esignation (9F3) program o $hich many employees% including a number o pri'ate respondents% a'ailed. 0 Hpon appro'al o the applications% notices o termination $ere sent to the employees $ho a'ailed o the 9F3. A ter recei'ing the bene its% said employee0applicants e#ecuted a ?3elease@ stating that the employee had no claims against 2ole in connection $ith his or her employment. 9ubse)uently% the dismissed employees e#ecuted another ?3elease o Claim@ in a'or o 2ole.

151 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

A total o 2%5;B hourly and monthly salaried employees $ere separated rom 2ole during this period. A ter assessing the outcome o the 9F3% 2ole ound that it could still do $ith lesser employees% and proceeded to dismiss more o them in March 1::1. 6'erall% 2%B:2 employees $ere separated under the 9F3 1rogram. &n 6ct. 1::1% complaints or illegal dismissal $ere iled against 2ole by 2e Lara et al. LA 9olano dismissed the complaints or lac( o meritD their dismissal $as 'alid. 7L3C re'ersed the LA and ordered reinstatement. 2enied 26L*<s M3. ISSUE: 467 26L*<9 redundancy program is 'alid and i so% $on the dismissal o the respondent employees are 'alid as $ell 1EL,/ G*93 3edundancy is one o the authori"ed causes or the dismissal o an employee. !he lac( o notice to the 26L* does not render the redundancy program 'oid. (easoning 7iltshire Dile *o. Inc., vs. 21(*# ?# # # redundancy in an employer<s personnel orce necessarily or e'en ordinarily re ers to duplication o $or(. !hat no other person $as holding the same position that pri'ate respondent held prior to the termination o his ser'ices% does not sho$ that his position had not become redundant. &ndeed% in any $ell0organi"ed business enterprise% it $ould be surprising to ind duplication o $or( and t$o (2) or more people doing the $or( o one person. 4e belie'e that redundancy% or purposes o the Labor Code% e#ists $here the ser'ices o an employee are in e#cess o $hat is reasonably demanded by the actual re)uirements o the enterprise. 9uccinctly put% a position is redundant $here it is super luous% and super luity o a position or positions may be the outcome o a number o actors% such as o'er0hiring o $or(ers% decreased 'olume o business% or dropping o a particular product line or ser'ice acti'ity pre'iously manu actured or underta(en by the enterprise.@ !he characteri"ation o an employee<s ser'ices as no longer necessary or sustainable% and% there ore% properly terminable% is an e#ercise o business +udgment on the part o the employer. !he $isdom or soundness o such characteri"ation or decision is not sub+ect to discretionary re'ie$ pro'ided% that 'iolation o la$ or arbitrary or malicious action is not sho$n. 0 2ole<s redundancy program does not appear to be tainted by bad aith e'en i it hired casual employees to replace those dismissed (as it has al$ays hired casual employees to augment its manpo$er in accordance $ith the demands o the industry.)

0 !he petition alleges that the redundancy program is part o a $ide0scale restructuring o the company. 0 !his purported restructuring is supported by the company<s undisputed history to$ards these ends% $hich culminated in the abolition o certain positions and the 9pecial Foluntary 3esignation program in 1::/01::1. 0 Among the a'o$ed goals o such restructuring is the reduction o absenteeism in the company. !he harsh economic and political climate then pre'ailing in the country also emphasi"ed the need or cost0 sa'ing measures. 0 3eorgani"ation as a cost0sa'ing de'ice is ac(no$ledged by +urisprudence. An employer is not precluded rom adopting a ne$ policy conduci'e to a more economical and e ecti'e management% and the la$ does not re)uire that the employer should be su ering inancial losses be ore he can terminate the ser'ices o the employee on the ground o redundancy. 0 !he la$% ho$e'er% does not pre'ent employers rom sa'ing on labor costs. 0 &nternational Macleod% &nc. 's. &ntermediate Appellate Court: held that the determination o the need or the phasing out o a department as a labor and cost sa'ing de'ice because it $as no longer economical to retain said department is a management prerogati'e% $ith $hich the courts $ill not inter ere. 0 2e 6campo 's. 7L3C: ?JtKhe reduction o the number o $or(ers in a company made necessary by the introduction o the ser'ices o >emac Machineries in the maintenance and repair o its industrial machinery is +usti ied. !here can be no )uestion as to the right o the company to contract the ser'ices o >emac Machineries to replace the ser'ices rendered by the terminated mechanics $ith a 'ie$ to e ecting more economic and e icient methods o production.@ 9o long as the underta(ing to sa'e on labor costs is not attended by malice% arbitrariness% or intent on the part o the employer to circum'ent the la$% as in this case% the Court $ill not inter ere $ith such endea'or. (atio & an employee consented to his retrenchment or 'oluntarily applied or retrenchment $ith the employer due to the installation o labor0sa'ing de'ices% redundancy% closure or cessation o operation or to pre'ent inancial losses to the business o the employer% the re)uired pre'ious notice to the 26L* is not necessary as the employee thereby ac(no$ledged the e#istence o a 'alid cause or termination o his employment (International 8arvester, Inc. vs. 21(*-. 0 -ere% most o the pri'ate respondents e'en illed up application orms to be considered or the redundancy program and thus ac(no$ledged the e#istence that their ser'ices $ere redundant.

152 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

0 1ri'ate respondents e#ecuted t$o releases in a'or o petitioner company. 7ot all )uitclaims are per se in'alid or against public policy. But those (1) $here there is clear proo that the $ai'er $as $angled rom an unsuspecting or gullible person or (2) $here the terms o settlement are unconscionable on their ace are in'alid. &n these cases% the la$ $ill step in to annul the )uestionable transaction. !here is no sho$ing here that pri'ate respondents are unsuspecting or gullible persons. 7either are the terms o the settlement unconscionable. &ndeed% pri'ate respondents recei'ed a generous separation pac(age% as set out in the narration o acts abo'e. Disposition 1etition is >3A7!*2 and the decision o the 7L3C A77HLL*2 and 9*! A9&2*. !36 L&,!*2 B!"i(a6i! As'(ri" 7r. 8s. )A.39.R. 1A::A< 20ar. 103 20044 FA)TS/ Coca Cola 1lant% then a department o respondent 9an Miguel Beer Corporation (9MC)% hired petitioner as a utilityPmiscellaneous $or(er. -e became a regular employee paid on daily basis as a ,or(li t 6perator. !hen became a monthly paid employee promoted as 9toc( Cler(. !he sales o ice and operations at the 9um0ag% Bacolod City 9ales 6 ice $ere reorgani"ed. 9e'eral positions $ere abolished including petitioner<s position as 9toc( Cler(. A ter re'ie$ing petitioner<s )uali ications% he $as designated $arehouse chec(er at the 9um0ag 9ales 6 ice. 9MC implemented a ne$ mar(eting system (no$n as the ?pre0selling scheme@ at the 9um0ag Beer 9ales 6 ice. As a conse)uence% all positions o route sales and $arehouse personnel $ere declared redundant. 3espondent noti ied the 26L* 2irector o 3egion F& that 22 personnel o the 9ales 2epartment o the 7egros 6perations Center $ould be retired. 9MC therea ter $rote a letter to petitioner in orming him that% o$ing to the implementation o the ?pre0 selling operations@ scheme% all positions o route and $arehouse personnel $ill be declared redundant and the 9um0ag 9ales 6 ice $ill be closed e ecti'e April 5/% 1::A. !hus% rom April 1% 1::A to May 1;% 1::A% petitioner reported to respondent<s 1ersonnel 2epartment at the 9ta. ,e Bre$ery% pursuant to a pre'ious directi'e. !herea ter% the employees o 9um0ag sales orce $ere in ormed that they can a'ail o respondent<s early retirement pac(age pursuant to the

retrenchment program% $hile those $ho $ill not a'ail o early retirement $ould be redeployed or absorbed at the Bre$ery or other sales o ices. 1etitioner opted to remain and mani ested to Acting 1ersonnel Manager 9al'ador Abadesco his $illingness to be assigned to any +ob% considering that he had three children in college. 1etitioner $as surprised $hen he $as in ormed by the Acting 1ersonnel Manager that his name $as included in the list o employees $ho a'ailed o the early retirement pac(age. 1etitioner<s re)uest that he be gi'en an assignment in the company $as ignored by the Acting 1ersonnel Manager. 1etitioner thus iled a complaint or illegal dismissal $ith the 7L3C. !he Labor Arbiter dismissed the complaint or lac( o merit. 1etitioner appealed to the 7L3C $hich set aside the Labor Arbiter<s decision and ordered respondent 9MC to reinstate petitioner to his ormer or e)ui'alent position $ith ull bac($ages. 0 3espondent iled a petition $ith the Court o Appeals $hich re'ersed the decision o the 7L3C and reinstated the +udgment o the Labor Arbiter dismissing the complaint or illegal dismissal. 0 1etitioner<s motion or reconsiderationK $as denied. ISSUE/ 467 the dismissal o petitioner is based on a +ust and authori"ed cause 1EL,/ 76 0 2ole 1hilippines% &nc. '. 7L3C% citing the leading case o 4iltshire ,ile Co.% &nc. '. 7L3C: a redundancy in an employers personnel force necessarily or even ordinarily refers to duplication of work. !hat no other person $as holding the same position that pri'ate respondent held prior to the termination o his ser'ices% does not sho$ that his position had not become redundant. &ndeed% in any $ell0organi"ed business enterprise% it $ould be surprising to ind duplication o $or( and t$o (2) or more people doing the $or( o one person. 4e belie'e that redundancy% or purposes o the Labor Code% e#ists $here the ser'ices o an employee are in e#cess o $hat is reasonably demanded by the actual re)uirements o the enterprise. 9uccinctly put% a position is redundant $here it is super luous% and super luity o a position or positions may be the outcome o a number o actors% such as o'erhiring o $or(ers% decreased 'olume o business% or dropping o a particular product line or ser'ice acti'ity pre'iously manu actured or underta(en by the enterprise.

155 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

!he determination that employee<s ser'ices are no longer necessary or sustainable and% there ore% properly terminable is an e#ercise o business +udgment o the employer. !he $isdom or soundness o this +udgment is not sub+ect to discretionary re'ie$ o the Labor Arbiter and the 7L3C% pro'ided there is no 'iolation o la$ and no sho$ing that it $as prompted by an arbitrary or malicious act. It is "!t e"!'-# (!r a 6!m.a"$ t! mere%$ e6%are t#at it #as &e6!me !8erma""e . It m'st .r! '6e a eJ'ate .r!!( t#at s'6# is t#e a6t'a% sit'ati!" t! I'sti($ t#e ismissa% !( t#e a((e6te em.%!$ees (!r re '" a"6$. 1ersuasi'e as the e#planation pro ered by respondent may be to +usti y the dismissal o petitioner% a number o disturbing circumstances% ho$e'er% lea'e the Court uncon'inced. NELSON A. )ULILI3 8s. EASTERN TELE)O00UNI)ATIONS P1ILIPPINES3 IN).3 SALVA,OR 1I=ON 2Presi e"t a" )#ie( E5e6'ti8e O((i6er43 E0ILIANO 7URA,O 2)#airma" !( t#e B!ar 43 VIR9ILIO 9AR)IA 2Vi6e Presi e"t4 a" STELLA 9AR)IA 2Assista"t Vi6e Presi e"t43 9.R. N!. 1:A3<13 Fe&r'ar$ >3 2011 Fa6ts/ 7elson Culili $as employed by *astern !elecommunications a 9enior !echnician. &n 1::C% due to business losses% *!1& $as compelled to implement a 3ight09i"ing 1rogram $hich consisted o t$o phases: the first phase in'ol'ed the reduction o *!1&<s $or( orce to only those employees that $ere necessary and $hich *!1& could sustainD the second phase entailed a company0$ide reorgani"ation $hich $ould result in the trans er% merger% absorption or abolition o certain departments o *!1&. Among the departments abolished $as the 9er'ice Uuality 2epartment. As a result% Culili<s position $as abolished due to redundancy. Hpon iling a complaint% the Labor Arbiter rendered a decision inding *!1& guilty o illegal dismissal and un air labor practice% $hich $as a irmed by the 7L3C. -o$e'er% the Court o Appeals ound that Culili<s position $as 'alidly abolished due to redundancy. &t $as highly unli(ely that *!1& $ould e ect a company0$ide reorgani"ation simply or the purpose o getting rid o Culili. Also% *!1& cannot be held guilty o un air labor practice as mere contracting out o ser'ices being per ormed by union members does not per se amount to un air labor practice unless it inter eres $ith the employees< right to sel 0organi"ation. Iss'e/ 4hether or not there $as an illegal dismissal.

R'%i"-/ !here $as a 'alid dismissal on the ground o redundancy. !here is redundancy $hen the ser'ice capability o the $or( orce is greater than $hat is reasonably re)uired to meet the demands o the business enterprise. A position becomes redundant $hen it is rendered super luous by any number o actors such as o'er0hiring o $or(ers% decrease in 'olume o business% or dropping a particular product line. Among the re)uisites o a 'alid redundancy program are: (1) the good aith o the employer in abolishing the redundant positionD and (2) air and reasonable criteria in ascertaining $hat positions are to be declared redundant such as but not limited to: pre erred status% e iciency% and seniority. !he records sho$ that *!1& had su iciently established not only its need to reduce its $or( orce and streamline its organi"ation% but also the e#istence o redundancy in the position o a 9enior !echnician. &t $as decided that% in the +udgment o *!1& management% the speciali"ed unctions o a 9enior !echnician $hose sole unction $as essentially the repair and ser'icing o *!1&<s telecommunications e)uipment $as no longer needed since the Business and Consumer JAccountsK 2epartment had to remain economical and ocused yet 'ersatile enough to meet all the multi arious needs o its small and medium si"ed clients. &t is inconcei'able that *!1& $ould e ect a company0$ide reorgani"ation o this scale or the mere purpose o singling out Culili and terminating him. 4hat *!1& did $as to abolish the position itsel or being too speciali"ed and limited. 9C inds Culili<s dismissal $as or a la$ ul cause and not an act o un air labor practice% *!1&% ho$e'er% $as remiss in its duty to obser'e procedural due process in e ecting the termination o Culili. &n Mayon -otel M ,estaurant v. 7dana% 9C obser'ed that the re)uirement o la$ mandating the gi'ing o notices $as intended: 7ot only to enable the employees to loo( or another employment and there ore ease the impact o the loss o their +obs and the corresponding income% but more importantly% to gi'e the 2epartment o Labor and *mployment (26L*) the opportunity to ascertain the 'erity o the alleged authori"ed cause o termination. 4ith regard to the impleaded corporate o icers% they cannot be held liable or acts done in his o icial capacity because a corporation% by legal iction% has a personality separate and distinct rom its o icers% stoc(holders% and members. !o pierce this ictional

15. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

'eil% it must be sho$n that the corporate personality $as used to perpetuate raud or an illegal act% or to e'ade an e#isting obligation% or to con use a legitimate issue. &n illegal dismissal cases% corporate officers may 'e held solidarily lia'le #ith the corporation if the termination #as done #ith malice or 'ad faith. Culili has ailed to pro'e that his dismissal $as orchestrated by the indi'idual respondents herein or the mere purpose o getting rid o him. -ence% the dismissal is declared 'alid but *astern !elecommunications 1hilippines% &nc. is ordered to pay petitioner 7elson A. Culili the amount o 1;/%///.// as nominal damages or non0compliance $ith statutory due process% in addition to the mandatory separation pay re)uired under Article 2C5 o the Labor Code. 3. Retre"6#me"t t! Pre8e"t L!sses 3etrenchment is an economic ground to reduce the number o employees. &n order to be +usti ied% the termination o employment by reason o retrenchment must be due to business losses or re'erses $hich are serious% actual and real. )riteria i" %a$i"--!(( ?!rEers/ \ Less pre erred status (i.e. temporary $or(ers) \ * iciency rating \ 9eniority 7'sti($i"- sta" ar s (!r retre"6#me"t/ 1. Losses e#pected should be substantial and not merely de minimis in e#tent. 0 & the loss purportedly sought to be orestalled by retrenchment is clearly sho$n to be unsubstantial and inconse)uential in character% the bona ide nature o the retrenchment $ould appear to be seriously in )uestion. 2. 9ubstantial loss apprehended must be reasonably imminent% as such imminence can be percei'ed ob+ecti'ely and in good aith by the employer. 0 !here should in other $ords be a certain degree o urgency% or the retrenchment% $hich is a ter all a drastic recourse $ith serious conse)uences or the li'elihood o the employees retires or other$ise laid0 o . 5. &t must be reasonably necessary and li(ely to e ecti'ely pre'ent the e#pected losses. .. Alleged losses i already reali"ed% and the e#pected imminent losses sought to be orestalled% must be pro'ed by su icient and con'incing e'idence. )ases/

E0)O P%$?!! )!r.. 8s. A&e%-as 9R N!. 14<A323 A.ri% 143 2004 FA)TS/ *MC6 is a domestic corporation engaged in the business o ?!! .r!6essi"-% operating through its sa$mill and plymill sections $here respondents used to be assigned as regular $or(ers. 0 6n 8an 2/% 1::5 and Mar 2% 1::5% *MC6% represented by its >en Manager Lim% informed the &O+E o its i"te"ti!" t! retre"6# some o its $or(ers on the ground o purported inancial di iculties. 0 *MC6 then iss'e a mem!ra" 'm% addressed to all its foremen" section heads" supervisors and department heads% $ith the instruction o retrenching some $or(ers based on the guidelines: a) 6ld Age (;C years and abo'e e#cept positions that are really s(illed)D b) 1er ormance (Attitude% Attendance% UualityP Uuantity o 4or() 0 1er *MC6<s notice to the 26L*% 1/. $or(ers $ere proposed or inclusion in its retrenchment program. E0)O termi"ate 2A0 ?!rEers. 0 !hose terminated then recei'ed their separation pay o 1.%C1; each. But deductions #ere made 'y EM%O purportedly for the attorney*s fees payable to respondents< la$yer% or his e orts in renegotiating an increase in the $ages contained in their CBA. 0 Hpon receipt o such pay% res.!" e"ts ?ere ma e t! si-" J'it6%aims% releasing *MC6 and all its o icers rom all orms o actionsPsuits% debts% sums o money% etc. 0 About 2 years later% they then lodged a complaint% through their labor union% against *MC6 or illegal dismissal% damages and atty<s ees. 0 *MC6 interposed the de ense o lac! of cause of actionD respondents had $ai'ed $hate'er claims they may ha'e against the corporation a ter signing the )uitclaims in a'or o *MC6. 0 LAB63 A3B&!*3 dismissed the complaint. 0 Appeal to the 7L3C $as also dismissed. &t anchored its dismissal on the e((e6t !( t#e res.!" e"tsQ ?ai8ers !r J'it6%aims . ?!here is no doubt that the respondents 'oluntarily e#ecuted their )uitclaimsP$ai'ers as mani ested by the act that they did not promptly 8uestion their validity $ithin a reasonable time. &t too( them t$o (2) years to challenge and dispute the 'alidity o the $ai'ers by claiming belatedly that they $ere either forced or misled into signing the same.@ %7 ,uling 0 *MC6 did not comply $ith one0month prior notice re)uirement under LC: a) Memorandum merely pro'ided the guidelines on the conduct of the intended lay.off D this did not constitute notice.

15; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

b) &t $as not addressed to the #or!ers% but to the oremen% the department super'isors and the section heads. c) !here $as no proper notice to &O+E. *MC6 terminated the ser'ices o 2;/ employees but included only 1/. o them in the list it iled $ith 26L*. 0 Be ore *MC6 resorted to retrenchment% it ailed to adduce e'idence o its losses and pro'e that it had underta(en measures to pre'ent the occurrence o such losses. 0 *MC6 had not paid the legally prescribed separation pay. *MC6 'iolated the LC in deducting the amount o attorney<s ees. 2 0 *mployees< cause o action had not yet prescribed $hen the case $as iled% because an action for illegal dismissal constituted an in+ury to their rights. (Art.11.A o 7CC is applicable: . yrs prescription period) ISSUES 1. 467 petitioner *MC6 had substantially complied $ith the re)uisites or a 'alid retrenchment 2. 467 respondents had 'oluntarily e#ecuted their respecti'e Uuitclaims 5. 467 the CA may% in a petition or certiorari% correct the e'aluation o e'idence made by both the Labor Arbiter and the 7L3C 1EL, 1. 76 (atio 3etrenchment5 is one o the authori"ed causes or dismissal o employees% resorted to by employers to a'oid or minimi"e business losses. &t is only Ia measure o last resort $hen other less drastic means ha'e been tried and ound to be inade)uate.I 5/uerrero v N+,%6 S 9tandards to +usti y retrenchment and to a'oid abuse: a) Losses e#pected should be substantial b) Losses must be reasonably imminent% as such imminence can be percei'ed ob+ecti'ely and in good aith by the employer

2 "Article 222. APPEARANCES AND FEES. $b& -o attorney.s fees, negotiation fees or similar charges
of any kind arising from any collective bargaining negotiations or conclusion of the collective bargaining agreement shall be imposed on any individual member of the contracting union/ 0rovided, ho ever, That attorney.s fees may be charged against union funds in an amount to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null and void.1

3 ART. 283. CLOSURE OF ESTABLISHMENT AND REDUCTION OF PERSONNEL. 2 The employer may
also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a ritten notice on the orker and the !inistry of "abor and #mployment at least one $%& month before the intended date thereof. 'n case of termination due to the installation of labor saving devices or redundancy, the orker affected thereby shall be entitled to a separation pay e(uivalent to at least his one $%& month pay or at least one $%& month pay for every year of service, hichever is higher. 'n case of retrenchment to prevent losses and in cases of closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be e(uivalent to one $%& month pay or at least one)half $%*2& month pay for every year of service, hichever is higher. A fraction of at least si+ $,& months shall be considered as one $%& hole year.

c) 3etrenchment is reasonably necessary and li(ely to e ecti'ely pre'ent the e#pected losses. *mployer should ha'e ta(en other measures prior or parallel to retrenchment to orestall losses d) Alleged losses i already reali"ed% and e#pected losses sought to be orestalled% must be proved by su icient and con'incing e'idence (easoning . employer bears the burden o pro'ing the e#istence or imminence o substantial losses $ith clear and satis actory e'idence. !he e'idence submitted by *MC6 does not persuade the 9C: a4 7udited financial statements or the years 1::1 and 1::2. *MC6<s net income o 11./;2M or 1::1 decreased to 1CC/! in 1::2. !he ,P9 also demonstrate that *MC6<s liability then increased rom 11/A.;M to 1125M. S BUT in )omerville )tainless )teel %orp v N+,%% 9C held that the presentation o ,P9 or a particular year $as inade)uate to o'ercome the stringent re)uirement o the la$. Also% in the analysis o ,P9% one particular percentage o relationship may not be too signi icant in itsel D that is% it may not su ice to point out those un a'orable characteristics o the company that $ould re)uire immediate or e'en drastic action.I &4 *MC6 undertoo( preventive measures to prevent the occurrence of imminent lossesD it implemented a $or( scheme on a rotation basis. U BUT it did not try other measures% such as cost reduction% lesser in'estment on ra$ materials% ad+ustment o the $or( routine to a'oid the scheduled po$er ailure% etc. 64 !he 1.A employees not included in the list submitted to 26L* voluntarily resigned. U BUT resignation is the 'oluntary act o employees $ho are compelled by personal reasons to dissociate themsel'es rom their employment. &t $ould ha'e been illogical or respondents to resign and then ile a Complaint or illegal dismissal. 2. 76 (atio !he mere act that the employees $ere not physically coerced or intimidated does not necessarily imply that they reely or 'oluntarily consented to the terms thereo . 51hil %arpet Employees 7ssoc v 1hil %arpet Manufacturing %orp6 0 !he corporation% and not its employees% has the burden o pro'ing that the Uuitclaims $ere 'oluntarily entered into. 5)alonga v N+,%6 0 Because the retrenchment $as illegal and o no e ect% the Uuitclaims $ere there ore not 'oluntarily entered into by respondents. Consent $as similarly 'itiated by mista(e or raud. 5Trendline Employees 7ssoc.)outhern 1hil (ederation of +a'or 5TE7. )1(+6 v N+,%6 (easoning

15A E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

*MC6 claimed that aside rom *ddie de la Cru"% the other respondents did not submit their respecti'e supporting a ida'its detailing ho$ their indi'idual consents had been obtained. Allegedly% such documents do not constitute the clear and con'incing e'idence re)uired under the la$ to o'erturn the 'alidity o Uuitclaims. But the 9C held that the burden o proo is actually on the part o *MC6. 0 As a rule% deeds of release or 8uitclaim cannot bar employees rom demanding bene its to $hich they are legally entitled. Acceptance o those bene its $ould not amount to estoppelD ho$e'er% amounts already recei'ed are to be deducted rom their respecti'e monetary a$ards. 5. G*9 (atio !he lo$er tribunals< actual indings $ill not be upheld $here there is a sho$ing that such indings $ere totally de'oid o support% or that the +udgment $as based on a misapprehension o acts. Disposition 1etition is 2*7&*2 (*MC6 is ordered to 3*&79!A!* employees $ith ull bac($ages% inclusi'e o allo$ances and other bene its) PL,T a" ,ELIA OFI)IAL vs. NLR)3 et. A%. N!. 14;002. A.ri% 1A3 200A 9.R.

1etitioner iled illegal dismissal be ore the Labor Arbiter. 1etitioner submitted e'idence that the respondents ha'e no grounds or retrenchment and that the company is not su ering rom serious losses. -o$e'er% the respondent also submitted inancial reports to sustain its ground o a 'alid retrenchment. !he Labor Arbiter held in a'or o the petitioner $hich $as a irmed by the 7L3C. &t urther noted that the 2epartment o Labor and *mployment (26L*) $as not noti ied by the respondent o its retrenchment program as re)uired by la$. 6n appeal to CA% the decision o the 7L3C $as re'ersed. &t held that the company is su ering serious inancial losses as re lected on its inancial statements submitted and prepared by independent auditors o the company. -ence% this petition. Iss'e/ 4hether there is a 'alid retrenchment by the respondent company 1e% / 1ertinent pro'ision is Article 2C5 o the Labor Code. ,or a 'alid retrenchment% the ollo$ing re)uisites must be complied $ith: (a) the retrenchment is necessary to pre'ent losses and such losses are pro'enD (b) $ritten notice to the employees and to the 26L* at least one month prior to the intended date o retrenchmentD and (c) payment o separation pay e)ui'alent to one0month pay or at least one0 hal month pay or e'ery year o ser'ice% $hiche'er is higher. !he inancial statements re lect that respondent su ered substantial loss in the amount o 1;;C Million by 5/ 8une 1::C. !he 3eport o 9>F Z Co. substantiates the alleged precarious inancial condition o the respondent. !he inancial statements audited by independent e#ternal auditors constitute the normal method o pro'ing the pro it and loss per ormance o a company. !he respondent complied $ith the re)uisite notices to the employee and the 26L* to e ect a 'alid retrenchment. 1etitioner ailed to re ute that she recei'ed the $ritten notice o retrenchment rom respondent on 1A 7o'ember 1::C. Although respondent ailed to urnish 26L* $ith a ormal letter noti ying it o the retrenchment% it still substantially complied $ith the re)uirement. 9ince the 7ational Conciliation and Mediation Board% the reconciliatory arm o 26L*% super'ised the negotiation or separation pac(age% $e agree $ith the Court o Appeals that it $ould be super luous to still re)uire respondent to ser'e notice o the retrenchment to 26L*.

BENE,I)TO A. )A7U)O0 VII3 vs. TPI P1IL. )E0ENT )ORP.3 et.a%. 9.R. N!. 14>0>03 Fe&r'ar$ 113 200A 7'8$ 0a"ata 8s. PTBT 9.R. N!. 1;23:33 0ar6# ;3 200< Fa6ts: &n 9eptember 1:CC% petitioner $as employed by respondent 1hilippine !elegraph and !elephone Corporation (1!Z!) as +unior cler( $ith a monthly salary o 15% C5:.B.. 9he $as later promoted as Account *#ecuti'e% the position she held until she $as temporarily laid o rom employment on 1 9eptember 1::C. 1etitioner temporary separation rom employment $as pursuant to the !emporary 9ta 3eduction 1rogram adopted by respondent due to serious business re'erses. 6n 1A 7o'ember 1::C% petitioner recei'ed a letter rom respondent in'iting her to a'ail hersel o its 9ta 3eduction 1rogram 1ac(age e)ui'alent to one0month salary or e'ery year o ser'ice% one and one0hal month salary% pro0rated 15th month pay% con'ersion to cash o unused 'acation and sic( lea'e credits% and -ealth Maintenance 6rgani"ation and group li e insurance co'erage until ull payment o the separation pac(age. 1etitioner% ho$e'er% did not opt to a'ail hersel o the said pac(age. 6n 2A ,ebruary 1:::% petitioner recei'ed a 7otice o 3etrenchment rom respondent permanently dismissing her rom employment e ecti'e 1A ,ebruary 1:::.

15B E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

&n act% e'en granting arguendo that respondent $as not e#periencing losses% it is still authori"ed by Article 2C5J2AK o the Labor Code to cease its business operations. *#plicit in the said pro'ision is that closure or cessation o business operations is allo$ed e'en i the business is not undergoing economic losses. !he o$ner% or any bona ide reason% can la$ ully close shop anyone. 8ust as no la$ orces anyone to go into business% no la$ can compel anybody to continue in it. &t $ould indeed be stretching the intent and spirit o the la$ i $e $ere to un+ustly inter ere $ith the management prerogati'e to close or cease its business operations% +ust because said business operations are not su ering any loss or simply to pro'ide the $or(ers continued employment. BENITO 7. BRI=UELA3 8s. ABRA1A0 ,IN9LE a" NI)AN,RO LE9ASPI3 9.R. N!. 1;A3;13 A.ri% 303 200< VIR9ILIO ANABE3 8s. ASIAN )ONST.3 et. a%. 9.R. N!. 1<32333 ,e6em&er 233 200> ,O)TRINE/ !o e ect a 'alid dismissal on the ground o retrenchment% the losses must be supported 'y sufficient and convincing evidence% the normal method o discharging $hich is the submission o inancial statements duly audited by independent e#ternal auditors. FA)TS/ 1etitioner Firgilio Anabe $as hired by respondent company (Asia(onstru(t) as radio technicianPoperator sometime in 1::5. 6n 9eptember C% 1:::% he $as noti ied by the latter that his ser'ices $ould be% as he $as in act% terminated e ecti'e a month therea ter% on the ground o retrenchment. 1etitioner iled a complaint or illegal dismissal and illegal deduction and payment o ringe bene its. !he Labor Arbiter ound that Asia(onstru(t ailed to submit inancial statements to pro'e losses% and thus ruled that Anabe $as illegally dismissed. Hpon appeal% Asia(onstru(t submitted certi ied true copies o its audited inancial statements in 1::C02///. Considering the same% 7L3C ruled that Anabe $as not illegally dismissed. !he CA a irmed the inding o 7L3C% noting that the latter is not precluded rom recei'ing e'idence on appeal as technical rules o procedure are not binding in labor cases. -ence% this petition. ISSUE/ 4hether Anabe $as 'alidly dismissed based on the ground o retrenchment. 1EL,/ NO. 3etrenchment is the termination o employment initiated by the employer through no ault o and $ithout pre+udice to the employees. &t is resorted to during periods o business recession%

industrial depression% or seasonal luctuations or during lulls occasioned by lac( o orders% shortage o materials% con'ersion o the plant or a ne$ production program or the introduction o ne$ methods or more e icient machinery or o automation. &t is a management prerogati'e resorted to% to a'oid or minimi"e business losses. !o e ect a 8a%i retre"6#me"t% the ollo$ing e%eme"ts must be present: (1) the retrenchment is reasona'ly necessary and li(ely to pre'ent business losses $hich% i already incurred% are not merely de minimis% but su'stantial" serious" and real" or only i e#pected% are reasona'ly imminent as percei'ed ob+ecti'ely and in good aith by the employerD (2) the employer ser'es #ritten notice both to the employeePs concerned and the 2epartment o Labor and *mployment at least a month be ore the intended date o retrenchmentD (5) the employer pays the retrenched employee separation pay in an amount prescribed by the CodeD (.) the employer e#ercises its prerogati'e to retrench in good faithD and (;) the employer uses fair and reasona'le criteria in ascertaining $ho $ould be retrenched or retained. 1rescinding rom the oregoing% the Court noted that the losses must be supported 'y sufficient and convincing evidence% the normal method o discharging $hich is the submission o inancial statements duly audited by independent e#ternal auditors. &n the present case% Asia(onstru(t ailed to submit its audited inancial statements $ithin the t$o years that the case $as pending be ore the Labor Arbiter. &t submitted them only a ter it recei'ed the ad'erse +udgment o the Labor Arbiter. 4hile the 7L3C is not indeed precluded rom recei'ing e'idence% the delay in the submission o e'idence should be clearly e#plained and should ade)uately pro'e the employer<s allegation o the cause or termination. Asia(onstru(t pro ered no e#planation behind the belated submission. Also% the inancial statements $ere prepared only in 2//1. 7ote that Anabe $as dismissed in 1:::. &t begs the )uestion then o ho$ the company (ne$ that it $as su ering big losses in 1::: $hen the inancial statements $ere only accomplished 2 years therea ter. ,urthermore% Asia(onstru(t had also ailed to submit its inancial statements to the 9*C or the year 1::C0 2/// and 2//502//;. !he Court thus ga'e credence to petitioner<s theory that the statements might ha'e been abricated. -ence% the Court held that the dismissal o petitioner on account o retrenchment is un+usti ied or ailure o Asia(onstru(t to clearly and satis actorily substantiate its inancial losses. Carpio Morales% 3. ,O)TRINE/ !o e ect a 'alid dismissal on the ground o retrenchment% the losses must be supported 'y

15C E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

sufficient and convincing evidence% the normal method o discharging $hich is the submission o inancial statements duly audited by independent e#ternal auditors. 1OTEL ENTERPRISES OF T1E P1ILs3 IN). 21EPI43 8s. SA0ASA1-NUW1RAIN3 9.R. N!. 1:A;A:3 7'"e A3 200> ,O)TRINE/ 3etrenchment and redundancy are valid management prerogatives% pro'ided they are done in good faith and the employer aith ully complies $ith the su'stantive and procedural re8uirements laid do$n by la$ and +urisprudence. An employer<s good aith in implementing a redundancy program is not necessarily destroyed by a'ailment o the ser'ices o an independent contractor to replace the ser'ices o the terminated employees. FA)TS/ 3espondent Hnion is the certi ied collecti'e bargaining agent o the ran(0and0 ile employees o -yatt 3egency Manila% a hotel o$ned by petitioner -*1&. &n 2//1% -*1&<s hotel business su ered big inancial losses. An audited inancial report made by 9>F indicated that the hotel su ered an operating loss amounting to o'er 11AM. -*1& alleged that it initially decided to cost0cut by implementing energy0 sa'ing schemes. &n 2//2% -*1& decided to implement a do$nsi"ing scheme to determine the areas $here it could obtain signi icant sa'ings. A ter e'aluation% it ound some positions to be redundant. !he Hnion opposed the do$nsi"ing scheme o petitioner arguing that the latter ailed to pro'e that it is incurring hea'y inancial losses. 2espite the Hnion<s opposition% notices o termination $ere ser'ed to .C employees $hose positions $ere identi ied to be redundant. !herea ter% the hotel engaged the ser'ices o independent +ob contractors to per orm the ser'ices o the dismissed employees. Later% the Hnion iled a notice o stri(e based on un air labor practice against -*1&. !he labor arbiter ound the stri(e to be legal. Hpon appeal% the 7L3C ga'e credence to the inancial report o 9>F Z Co. that the hotel had incurred huge inancial losses necessitating the adoption o a do$nsi"ing scheme. !he CA re'ersed the 7L3C decision. -ence% this petition. ISSUE/ 4hether the do$nsi"ing scheme% i.e. retrenchment and redundancy% adopted by petitioner $as 'alid. 1EL,/ YES. ,etrenchment is the reduction o $or( personnel usually due to poor inancial returns% aimed to cut do$n costs or operation particularly on salaries and $ages. ,edundancy% on the other hand% e#ists $here the number o employees is in e#cess o $hat is reasonably demanded by the actual re)uirements o the enterprise. 3etrenchment and redundancy are valid management prerogatives% pro'ided they are done in good faith and the

employer aith ully complies $ith the su'stantive and procedural re8uirements laid do$n by la$ and +urisprudence. ,or a valid retrenchment% the ollo$ing re)uisites must be complied $ith: (1) the retrenchment is necessary to pre'ent losses and such losses are pro'enD (2) $ritten notice to the employees and to the 26L* at least one month prior to the intended date o retrenchmentD and (5) payment o separation pay e)ui'alent to one0month pay or at least one0hal month pay or e'ery year o ser'ice% $hiche'er is higher. &n case o redundancy% the employer must pro'e that: (1) a #ritten notice $as ser'ed on both the employees and the 26L* at least one month prior to the intended date o retrenchmentD (2) separation pay e)ui'alent to at least one month pay or at least one month pay or e'ery year o ser'ice% $hiche'er is higher% has been paidD (5) good faith in abolishing the redundant positionsD and (.) adoption o fair and reasona'le criteria in ascertaining $hich positions are to be declared redundant and accordingly abolished. &n the present case% the Court appreciated the inancial statements submitted by 9>F in a'or o petitioner<s claims. !he Court noted that $hile the hotel has earned in 2//1 around 112M% i pro'isions or hotel rehabilitation as $ell as replacement o and additions to the hotel<s urnishings and e)uipments are included% the result is indeed a staggering de icit o more than 11A million. !he Court noted that the inancial statements submitted by petitioner $ere audited by a reputable auditing irm and are clear and substantial enough to pro'e that the company $as in a precarious inancial condition. 6ur labor la$s only allo$ retrenchment or do$nsi"ing as a 'alid e#ercise o management prerogati'e i all other else ail. But in this case% it $as ound that petitioner did implement 'arious cost0 sa'ing measures and e'en trans erred some o its employees to other 'iable positions +ust to a'oid the premature termination o employment o its a ected $or(ers. &t $as $hen the same pro'ed insu icient and the amount o loss became certain that petitioner had to resort to drastic measures to sta'e o 1:%:C1%2AB.// in losses% and be able to sur'i'e. An employer<s good aith in implementing a redundancy program is not necessarily destroyed by a'ailment o the ser'ices o an independent contractor to replace the ser'ices o the terminated employees. !he reduction o the number o $or(ers in a company made necessary by the introduction o the ser'ices o an independent contractor is +usti ied $hen the latter is underta(en in order to e ectuate more economic and e icient methods o production. !hus% the Court ruled that the do$nsi"ing scheme implemented by petitioner $as 'alid.

15: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

Accordingly% the termination o the .C employees $as legal. ALFRE,O A. 0EN,ROS3 7R.3 8s. 0ITSUBIS1I 0OTORS P1ILS. )ORP. 9.R. N!. 1:>;<03 Fe&r'ar$ 1:3 200> FLI91T ATTEN,ANTS AN, STEWAR,S ASSO)IATION OF T1E P1ILIPPINES 2FASAP43Vs. PAL et.a%.3 9.R. N!. 1;<0<33 O6t!&er 23 200> Fa6ts/ 6n 8une 1;% 1::C% 1AL retrenched ;%/// o its employees% including morethan 1%.// o its cabin cre$ personnel% to ta(e e ect on 8uly 1;% 1::C. 1AL adopted the retrenchment scheme allegedly to cut costs and mitigate huge inancial losses as a result o a do$nturn in the airline industry brought about by the Asian inancial crisis. 2uring said period% 1AL claims to ha'e incurred 1:/ billion in liabilities% $hile its assets stood at 1C; billion. &n implementing the retrenchment scheme% 1AL adopted its so0called I1lan 1.I $hereby 1ALQs leet o aircra t $ould be reduced rom ;. to 1.% thus re)uiring the ser'ices o only A;. cabin cre$ personnel. 1rior to the ull implementation o the assailed retrenchment program% ,A9A1 and 1AL conducted a series o consultations and meetings and e#plored all possibilities o cushioning the impact o the impending reduction in cabin cre$ personnel. -o$e'er% the parties ailed to agree on ho$ the scheme $ould be implemented. !hus 1AL unilaterally resol'ed to utili"e the criteria set orth in 9ection 112 o the 1AL,A9A1 Collecti'e Bargaining Agreement (CBA) in retrenching cabin cre$ personnel: that is% that retrenchment shall be based on the indi'idual employeeQs e iciency rating and seniority. 1AL determined the cabin cre$ personnel e iciency ratings through an e'aluation o the indi'idual cabin cre$ memberQs o'erall per ormance or the year 1::B alone. !he actors ta(en into account on $hether the cabin cre$ member $ould be retrenched% demoted or retained $ere: 1) the e#istence o e#cess sic( lea'esD 2) the cre$ memberQs being physically o'er$eightD 5) seniorityD and .) pre'ious suspensions or $arnings imposed. 4hile consultations bet$een ,A9A1 and 1AL $ere ongoing% the latter began implementing its retrenchment program by initially terminating the ser'ices o 1./ probationary cabin attendants only to rehire them in April 1::C. Moreo'er% their employment $as made permanent and regular. 6n 8uly 1;% 1::C% ho$e'er% 1AL carried out the retrenchment o its more than 1%.// cabin cre$ personnel.

Mean$hile% in 8une 1::C% 1AL $as placed under corporate rehabilitation and a rehabilitation plan $as appro'ed per 9ecurities and *#change Commission (9*C) 6rder dated 8une 25% 1::C in 9*C Case 7o. /A0:C0A//.. 6n 9eptember .% 1::C% 1AL% through its Chairman and Chie *#ecuti'e 6 icer (C*6) Lucio !an% made an o er to trans er shares o stoc( to its employees and three seats in its Board o 2irectors% on the condition that all the e#isting Collecti'e Bargaining Agreements (CBAs) $ith its employees $ould be suspended or 1/ years% but it $as re+ected by the employees. 6n 9eptember 1B% 1::C% 1AL in ormed its employees that it $as shutting do$n its operations e ecti'e 9eptember 25% 1::C despite the pre'ious appro'al on 8une 25% 1::C o its rehabilitation plan. 6n 9eptember 25% 1::C% 1AL ceased its operations and sent notices o termination to its employees. !$o days later% 1AL employees% through the 1hilippine Airlines *mployees Association (1AL*A) board% sought the inter'ention o then 1resident 8oseph *. *strada. 1AL*A o ered a 1/0year moratorium on stri(es and similar actions and a $ai'er o some o the economic bene its in the e#isting CBA. Lucio !an% ho$e'er% re+ected this counter0o er. &n a re erendum conducted on 6ctober 2% 1::C% 1AL employees rati ied the proposal. 6n 6ctober B% 1::C% 1AL resumed domestic operations and% soon a ter% international lights as $ell. Mean$hile% in 7o'ember 1::C% or i'e months a ter the 8une 1;% 1::C mass dismissal o its cabin cre$ personnel% 1AL began recalling to ser'ice those it had pre'iously retrenched. 9e'eral o those retrenched $ere called bac( to ser'ice. &n 2ecember 1::C% 1AL submitted a Istand0aloneI rehabilitation plan to the 9*C by $hich it undertoo( a reco'ery on its o$n $hile (eeping its options open or the entry o a strategic partner in the uture. Accordingly% it submitted an amended rehabilitation plan to the 9*C $ith a proposed re'ised business and inancial restructuring plan% $hich re)uired the in usion o H9V2// million in ne$ e)uity into the airline. 6n May 1B% 1:::% the 9*C appro'ed the proposed IAmended and 3estated 3ehabilitation 1lanI o 1AL and appointed a permanent rehabilitation recei'er or the latter. 6n 8une B% 1:::% the 9*C issued an 6rder con irming its appro'al o the IAmended and 3estated 3ehabilitation 1lanI o 1AL. &n said order% the cash in usion o H9V2// million made by Lucio !an on 8une .% 1::: $as

1./ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

ac(no$ledged. 3espondent 1AL is ordered to pay the separation bene its to those complainants $ho ha'e not recei'ed their separation pay and to pay the balance to those $ho ha'e recei'ed partial separation pay. Iss'e/ 467 CA decided the case a )uo in a $ay contrary to la$ andPor +urisprudence 467 1AL<s retrenchment scheme $as +usti ied. 1e% / &t is a settled rule that in the e#ercise o the 9upreme CourtQs po$er o re'ie$% the Court is not a trier o acts and does not normally underta(e the ree#amination o the e'idence presented by the contending parties during trial. -o$e'er% there are se'eral e#ceptions to this rule such as $hen the actual indings o the Labor Arbiter di er rom those o the 7L3C% as in the instant case% $hich opens the door to a re'ie$ by this Court. !he la$ recogni"es the right o e'ery business entity to reduce its $or( orce i the same is made necessary by compelling economic actors $hich $ould endanger its e#istence or stability. 4here appropriate and $here conditions are in accord $ith la$ and +urisprudence% the Court has authori"ed 'alid reductions in the $or( orce to orestall business losses% the hemorrhaging o capital% or e'en to recogni"e an ob'ious reduction in the 'olume o business $hich has rendered certain employees redundant. !he burden clearly alls upon the employer to pro'e economic or business losses $ith su icient supporting e'idence. &ts ailure to pro'e these re'erses or losses necessarily means that the employeeQs dismissal $as not +usti ied. Any claim o actual or potential business losses must satis y certain established standards% all o $hich must concur% be ore any reduction o personnel becomes legal. FIRST ELE0ENT/ T#at retre"6#me"t is reas!"a&%$ "e6essar$ a" %iEe%$ t! .re8e"t &'si"ess %!sses ?#i6#3 i( a%rea $ i"6'rre 3 are "!t mere%$ e mi"imis3 &'t s'&sta"tia%3 seri!'s3 a6t'a% a" rea%3 !r i( !"%$ e5.e6te 3 are reas!"a&%$ immi"e"t as .er6ei8e !&Ie6ti8e%$ a" i" -!! (ait# &$ t#e em.%!$er. !he la$ spea(s o serious business losses or inancial re'erses. 9liding incomes or decreasing gross re'enues are not necessarily losses% much less serious business losses $ithin the meaning o the la$. !he act that an employer may ha'e sustained a net loss% such loss% per se% absent any other e'idence on its impact on the business% nor on

e#pected losses that $ould ha'e been incurred had operations been continued% may not amount to serious business losses mentioned in the la$. !he employer must sho$ that its losses increased through a period o time and that the condition o the company $ill not li(ely impro'e in the near uture or that it e#pected no abatement o its losses in the coming years. !he employer must also e#haust all other means to a'oid urther losses $ithout retrenching its employees. 3etrenchment is a means o last resortD it is +usti ied only $hen all other less drastic means ha'e been tried and ound insu icient. &n the instant case% 1AL ailed to substantiate its claim o actual and imminent substantial losses $hich $ould +usti y the retrenchment o more than 1%.// o its cabin cre$ personnel. Although the 1hilippine economy $as gra'ely a ected by the Asian inancial crisis% ho$e'er% it cannot be assumed that it has li(e$ise brought 1AL to the brin( o ban(ruptcy. Li(e$ise% the act that 1AL under$ent corporate rehabilitation does not automatically +usti y the retrenchment o its cabin cre$ personnel. 3ecords sho$ that 1AL $as not e'en a$are o its actual inancial position $hen it implemented its retrenchment program. &t embar(ed on the mass dismissal $ithout irst underta(ing a $ell0considered study on the proposed retrenchment scheme. !his 'ie$ is underscored by the act that pre'iously% 1AL terminated the ser'ices o 1./ probationary cabin attendants% but rehired them almost immediately and e'en con'erted their employment into permanent and regular% e'en as a massi'e retrenchment $as already looming in the hori"on. Also% the claim that 1AL sa'ed 12. million monthly due to the implementation o the retrenchment program does not pro'e anythingD it has not been sho$n to $hat e#tent or degree such sa'ings bene ited 1AL% 'is0a0'is its total e#penditures or its o'erall inancial position. Li(e$ise% its claim that its liabilities reached 1:/ billion% $hile its assets amounted to 1C; billion only 0 or a debt to asset ratio o more than 1:1 0 may not readily be belie'ed% considering that it did not submit its audited inancial statements. All these allegations are sel ser'ing e'idence. ,6H3!- *L*M*7!: !hat the employer e#ercises its prerogati'e to retrench employees in good aith or the ad'ancement o its interest and not to de eat or circum'ent the employeesQ right to security o tenure. Concededly% retrenchment to pre'ent losses is an authori"ed cause or terminating employment and the decision $hether to resort to such mo'e or not is a

1.1 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

management prerogati'e. -o$e'er% the right o an employer to dismiss an employee di ers rom and should not be con used $ith the manner in $hich such right is e#ercised. &t must not be oppressi'e and abusi'e since it a ects oneQs person and property. 6n the re)uirement that the prerogati'e to retrench must be e#ercised in good aith% $e ha'e ruled that the hiring o ne$ employees and subse)uent rehiring o IretrenchedI employees constitute bad aithD that the ailure o the employer to resort to other less drastic measures than retrenchment seriously belies it claim that retrenchment $as done in good aith to a'oid lossesD and that the demonstrated arbitrariness in the selection o $hich o its employees to retrench is urther proo o the illegality o the employerQs retrenchment program% not to mention its bad aith. 4hen 1AL implemented 1lan 22% instead o 1lan 1.% $hich $as $hat it had originally made (no$n to its employees% it could not be said that it acted in a manner compatible $ith good aith. &t o ered no satis actory e#planation $hy it abandoned 1lan 1.D instead% it +usti ied its actions o subse)uently recalling to duty retrenched employees by ma(ing it appear that it $as a sho$ o good aithD that it $as due to its good corporate nature that the decision to consider recalling employees $as made. ,&,!- *L*M*7!: !hat the employer used air and reasonable criteria in ascertaining $ho $ould be dismissed and $ho $ould be retained among the employees% such as status% e iciency% seniority% physical itness% age% and inancial hardship or certain $or(ers. &n selecting employees to be dismissed% air and reasonable criteria must be used% such as but not limited to: (a) less pre erred status (e.g.% temporary employee)% (b) e iciency and (c) seniority. !he appellate court held that there $as no need or 1AL to consult $ith ,A9A1 regarding standards or criteria that the airline $ould utili"e in the implementation o the retrenchment programD and that the criteria actually used $hich $as unilaterally ormulated by 1AL using its 1er ormance *'aluation ,orm in its >rooming and Appearance -andboo( $as reasonable and air. &ndeed% 1AL $as not obligated to consult ,A9A1 regarding the standards it $ould use in e'aluating the per ormance o the each cabin cre$. -o$e'er% $e do not agree $ith the indings o the appellate court that the criteria utili"ed by 1AL in the actual retrenchment $ere reasonable and air. 9C has repeatedly en+oined employers to adopt and obser'e air and reasonable standards to e ect retrenchment. !his is o paramount importance

because an employerQs retrenchment program could be easily +usti ied considering the sub+ecti'e nature o this re)uirement. !he adoption and implementation o un air and unreasonable criteria could not easily be detected especially in the retrenchment o large numbers o employees% and in this aspect% abuse is a 'ery distinct and real possibility. !his is $here labor tribunals should e#ercise more diligenceD this aspect is $here they should concentrate $hen placed in a position o ha'ing to +udge an employerQs retrenchment program. Moreo'er% in assessing the o'erall per ormance o each cabin cre$ personnel% 1AL only considered the year 1::B. !his ma(es the e'aluation o each cabin attendantQs e iciency rating capricious and pre+udicial to 1AL employees co'ered by it. &n sum% 1ALQs retrenchment program is illegal because it $as based on $rong ul premise (1lan 1.% $hich in reality turned out to be 1lan 22% resulting in retrenchment o more cabin attendants than $as necessary) and in a set o criteria or rating 'ariables that is un air and unreasonable $hen implemented. &t ailed to ta(e into account each cabin attendantQs respecti'e ser'ice record% thereby disregarding seniority and loyalty in the e'aluation o o'erall employee per ormance. Uuitclaims e#ecuted as a result o 1ALQs illegal retrenchment program are li(e$ise annulled and set aside because they $ere not 'oluntarily entered into by the retrenched employeesD their consent $as obtained by raud or mista(e% as 'olition $as clouded by a retrenchment program that $as% at its inception% made $ithout basis. !he la$ loo(s $ith dis a'or upon )uitclaims and releases by employees pressured into signing by unscrupulous employers minded to e'ade legal responsibilities. As a rule% deeds o release or )uitclaim cannot bar employees rom demanding bene its to $hich they are legally entitled or rom contesting the legality o their dismissal. !he acceptance o those bene its $ould not amount to estoppel. !he amounts already recei'ed by the retrenched employees as consideration or signing the )uitclaims should% ho$e'er% be deducted rom their respecti'e monetary a$ards. As to 1ALQs recall and rehire process (o retrenched cabin cre$ employees)% the same is li(e$ise de ecti'e. Considering the illegality o the retrenchment% it ollo$s that the subse)uent recall and rehire process is li(e$ise in'alid and $ithout e ect. A corporate o icer is not personally liable or the money claims o discharged corporate employees unless he acted $ith e'ident malice and bad aith in terminating their employment. 4e do not see ho$ respondent 1atria Chiong may be held personally liable together $ith 1AL% it appearing that she $as merely acting in accordance $ith $hat her duties

1.2 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

re)uired under the circumstances. Being an Assistant Fice 1resident or Cabin 9er'ices o 1AL% she ta(es direct orders rom superiors% or those $ho are charged $ith the ormulation o the policies to be implemented. 1etition granted. 0OBILIA PRO,U)TS3 IN). 8s. ALAN 9. ,E0E)ILLO3 et. a%.3 9.R. N!. 1;0::>3 Fe&. 43 200> M (e6uirement for (etrenchment ,or a 'alid termination due to retrenchment% the la$ also re)uires that $ritten notices o the intended retrenchment be ser'ed by the employer on the $or(er and on the 26L* at least one month be ore the actual date o the retrenchment. !he purpose o this re)uirement is to gi'e employees time to prepare or the e'entual loss o their +obs% as $ell as to gi'e 26L* the opportunity to ascertain the 'eracity o the alleged cause o termination. &n this case% petitioner insists that the payment o 5/ days salary to respondents in place o notice $as su icient compliance $ith the 5/0day notice rule. 4e cannot agree. 7othing in the la$ gi'es petitioner the option to substitute the re)uired prior $ritten notice $ith payment o 5/ days salary. &ndeed% a +ob is more than the salary it carries. 1ayment o 5/ days salary cannot compensate or the psychological e ect or the stigma o immediately inding one<s sel laid o rom $or(. &t cannot be a ully e ecti'e substitute or the 5/ days< $ritten notice re)uirement by la$% especially $hen% as in this case% no notice $as gi'en to the 26L*. *'en as the letters o 'oluntary acceptance $ere dated 8uly 2;% 1::C% the notices o termination gi'en on 8uly 25% 1::C $ere e ecti'e the ollo$ing day. &n essence% respondents had already been dismissed be ore they signed the letters o 'oluntary acceptance. Clearly% petitioner depri'ed respondents o their right to statutory due process. ,or this% $e a irm the appellate court<s a$ard o nominal damages to respondents. But% consistent $ith our ruling in Agabon '. 7ational Labor 3elations Commission% the amount o nominal damages should be 15/%///. 4e also sustain the a$ard o attorney<s ees as it is sanctioned by la$. +34&I1IA "(4D0*T$, I2*. v. A1A2 /. D%3%*I114, et al., /.(. 2o. ,KEHHC, Debruary L, .EECFRAN)IS RAY TALA03 VS. NLR) et. A%.3 9.R. N!. 1;A0403 A.ri% :3 2010 FA)TS/ &n the latter part o 2//1 and in 2//2% the respondent% !he 9o t$are ,actory% &nc. (!9,&)% su ered inancial re'erses. &ts e#ternal inancial auditor ad'ised that it cut on its payroll e#penses% $hich accounted or .1L o its total operating costs. !hus% !9,& decided to retrench some o its employees% using as basis its employeesQ ser'ice income and contribution margins to the company. !alam $as $as one o t$o employees $ith the least

or $ith no income contribution or the year 2//2. Conse)uently% >rapilon (6 ice Manager) and 4ol gang -ermle (C*6) 'erbally in ormed !alam that his ser'ices $ith the company $ould be terminated 5/ days a ter 9eptember 2B% 2//2. !herea ter% !9,& noti ied !alam in $riting o the termination o his employment. 6n 7o'ember A% 2//2% or a ter a month% !alam signed a 3elease and Uuitclaim in consideration and receipt o 1C:%:;..// in compensation and other bene its. 6n 7o'ember 2:% 2//2% !alam iled a complaint or illegal dismissal and illegal deduction% $ith claims or ser'ice incenti'e lea'e pay% damages and attorneyQs ees against !9,&% >rapilon and -ermle% be ore the 7ational Labor 3elations Commission (7L3C) in Cebu City. !he Labor Arbiter declared that !alamQs dismissal illegal and directed !9,& to pay !alam separation bene its% bac($ages and 15th month pay. !he arbiter held that !9,& had not adopted a retrenchment program and there $as also no e'idence sho$ing clearly that !alam should be retrenched. -e disregarded the release and )uitclaim e#ecuted by !alam declaring that he $as compelled to accept ithe monetary consideration behind it out o necessity. !9,& appealed to the 7L3C. Li(e the Labor Arbiter% it nulli ied the release and )uitclaim signed by !alam. !he 7L3C ound !alamQs dismissal 'alid by reason o retrenchment% but deleted the a$ard o separation pay Iin 'ie$ o payment.I 6n motion or reconsideration% the 7L3C deleted the a$ard o bac($ages and 15th month pay% but ordered the company to pay !alam 15/%///.// as nominal damages or 'iolating his right to procedural due process. !he Court o Appeals ound the retrenchment to be 'alid. -o$e'er% it ruled that the company ailed to gi'e !alam the notice re)uired by la$. !he CA also noted that !alamQs employment contract pro'ided or t$o monthQs notice. !hus% it increased to 1;/%///.// the nominal damages. !he matter $as ele'ated to the 9upreme Court. !alam contends that the inancial statements relied upon by the company do not sho$ that !9,& $as in dire inancial straits nor $as it su ering drastic business losses. !he alleged losses $ere not imminent as there $ere only 2 employees $ho $ere retrenched. ,urthermore% there $ere ; probationary employees $ho became regular employees on 6ctober 1% 2//2. -e also argues that the basis o ha'ing the least contribution margin to the company is not a 'alid cause or dismissal under Articles 2C2 and 2C5 o the Labor CodeD be that as it may% he did not ha'e the highest negati'e contribution margin.

1.5 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

!9,& maintains that it did not only e#pect but had already su ered substantial losses% as reported by its e#ternal auditor and as established by its inancial records. !he act that it retrenched only 2 employees did not mean its losses $ere not imminent. !9,& also e#plains that the ; probationary employees $ere $or(ing on a pro+ect that $as then in mid0stream and% considering their (no$0ho$ in the pro+ect% could not +ust be assigned to !alam. &t also argues that !alam had the highest negati'e contribution margin. &t submits that !alam $as not chosen by any o its clients as sho$n by the act that since 8anuary 2//2 until his separation% he had no ser'ice income. &t posits that it cannot be e#pected to maintain an employment consultant $hose ser'ices the clients do not need. &t insists that the contribution margin or ser'ice income is a air and reasonable criterion in deciding $ho to retrench. ISSUE/ 4hether there $as a 'alid cause or !alam<s dismissal. 1EL,/ Ges. ,irst% the decision to retrench had a basis. !he decision $as upon the recommendation o the company<s e#ternal auditor. 9econd. !he cost0cutting measure recommended in'ol'ed reduction o !9,&<s payroll e#pense account $hich% as the auditor ound% ma(es up .1L o the company<s total operating e#penses. Absent any sho$ing o bad aith% the choice o $ho should be retrenched must be conceded to the company as long as there e#ists a basis or it. &n the present case% $e note that the auditor suggested that !9,& Irevie# the contri'ution margin per consultant and compensation pac!ages of personnel in the e$ecutive and support group .I Again% absent any sho$ing o bad aith% $e cannot ault the company or choosing the option o loo(ing at the margins o contribution o the consultants to the income o the company as primary retrenchment standard. !alam himsel admitted that he had no contribution income or 2//2. Management e#plained that !9,&<s clients did not choose him or as( or his ser'ices a management claim !alam did not dispute. !hird. !alam $as dismissed due to a cause authori"ed by la$ retrenchment to pre'ent losses. At that time% !9,&<s inancial condition% as ound by the e#ternal auditor% sho$ed that it had already su ered a net income loss o 12%.B.%.1C.// and retained earnings de icit o 1B%.2.%2;/.//. ,ourth. !9,& resorted to other measures to abate its losses. &t claimed that during the crises period% it used as an o ice a small0room (a mere cubicle) $ith only a t$o0person support sta in the persons o

>rapilon and -ermleD it reduced the salaries o its employees by as much as 5/L. 6n the $hole% $e ind that !9,& satis ied the re)uisites or a 'alid retrenchment. !he release and )uitclaim $as a 'alid and binding underta(ing that should ha'e been recogni"ed by the labor authorities and the CA. A legitimate $ai'er representing a 'oluntary settlement o a laborerQs claims should be respected by the courts as the la$ bet$een the parties. &n e#ecuting the release and )uitclaim% !alam had un)ui'ocably signi ied his acceptance o his separation rom the ser'ice. !hus% $e ind the iling o the illegal dismissal case tainted $ith bad aith on his part. >i'en the release and )uitclaim% $e do not see ho$ !9,& can be made to ans$er or ailure to a ord !alam procedural due process. !he release and )uitclaim% to our mind% erased $hate'er in irmities there might ha'e been in the notice o termination as !alam had already 'oluntarily accepted his dismissal through the release and )uitclaim. 4. )%!s're !r )essati!" !( O.erati!" Seri!'s B'si"ess L!sses 'e t!

T#e 6%!si"- !( !.erati!" !( t#e esta&%is#me"t !r '" ertaEi"- '"%ess t#e 6%!si"- is (!r t#e .'r.!se !( 6ir6'm8e"ti"- t#e .r!8isi!"s !( t#is tit%e 0 may be either: 1. or serious business losses or 2. not due to serious business losses 0 includes bona ide suspension o operations o business e#ceeding A months 0 the signi icance o losses here is that% i the cessation o business $as due to serious business losses then the employer $ould not be liable to pay separation pay to the employee. -o$e'er% it $ould be the other $ay around i the cessation $as not due to serious business losses. )ases/ N!rt# ,a8a! 0i"i"- )!r.. B Asset Pri8ati*ati!" Tr'st 8s. NLR) 2A4 S)RA ;21 21>>:4
FACTS

&n May 1::2% petitioner 7orth 2a'ao completely ceased operations due to serious business re'erses. ,rom 1:CC until its closure in 1::2% 7orth 2a'ao su ered net losses a'eraging 15B per year% or each o the i'e years prior to its closure. &t $as ound that ; months prior to its closure% its total liabilities had e#ceeded its assets by 12/..B% as sho$n by its inancial statements audited by the C6A. 4hen it ceased operations% its remaining employees $ere separated and gi'en the e)ui'alent o 12.; daysQ pay or e'ery year o ser'ice% computed on their basic monthly pay% in addition to the commutation to cash

1.. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

o their unused 'acation and sic( lea'es. -o$e'er% it appears that% during the li e o the petitioner corporation% rom the beginning o its operations in 1:C1 until its closure in 1::2% it had been gi'ing separation pay e)ui'alent to 5/ daysQ pay or e'ery year o ser'ice. Moreo'er% inasmuch as the region $here 7orth 2a'ao operated $as plagued by insurgency and other peace and order problems% the employees had to collect their salaries at a ban( in !agum% 2a'ao del 7orte% some ;C (m rom their $or(place and about 2.; hoursQ tra'el time by public transportationD this arrangement lasted rom 1:C1 to 1::/. A complaint $as iled $ith respondent Labor Arbiter by respondent 4il redo >uillema and 2B1 other separated employees or: (1) additional separation pay o 1B.; days or e'ery year o ser'iceD (2) bac( $ages e)ui'alent to t$o days a monthD (5) transportation allo$anceD (.) ha"ard payD (;) housing allo$anceD (A) ood allo$anceD (B) post0employment medical clearanceD and (C) uture medical allo$ance% all o $hich amounted to 1;CM as computed by pri'ate respondent. LA ruled in a'or o pri'ate respondents. 6n appeal% respondent 7L3C a irmed the decision in toto. 1etitioner 7orth 2a'aoQs motion or reconsideration $as li(e$ise denied. -ence% this petition. (espondents 3ain *ontentions# !hat the a$ard o separation pay should be gi'en% based solely on petitioner 7orth 2a'aoQs long0standing policy o gi'ing separation pay bene its e)ui'alent to 5/0daysQ pay% $hich policy had been in orce in the years prior to its closure. !hat by denying the same separation bene its to pri'ate respondent and the others similarly situated% petitioners discriminated against them. ISSUES/ 1. 467 an employer $hose business operations ceased due to serious business losses or inancial re'erses is obliged to pay separation pay to its employees separated by reason o such closure 2. 467 the a$ard o bac( $ages and transportation allo$ance $as proper 1EL,/ 1. 76 (atio !he underscored portion o Art. 2C5. go'erns the grant o separation bene its Iin case o closures or cessation o operationI o business establishments I76! due to serious business losses or inancial 4 Art. 283.
Closure of establishment and reduction of personnel . The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a ritten notice on the orkers and the !inistry of "abor and #mployment at least % month before the intended date thereof. 'n case of termination due to the installation of labor saving devices or redundancy, the orker affected thereby shall be entitled to a separation pay e(uivalent to at least his % month pay or to at least % month pay for every year of service, hichever is higher. 'n case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be e(uivalent to % month pay or at least %*2 month pay for every year of service, hichever is higher. A fraction of at least , months shall be considered % hole year.

re'erses.I 9aid pro'ision does not obligate an employer to pay separation bene its $hen the closure is due to losses. (easoning ;aI 4here the closure $as due to business losses as in the instant case% in $hich the aggregate losses amounted to o'er 12/ billion the Labor Code does not impose any obligation upon the employer to pay separation bene its% or ob'ious reasons. !he companyQs practice o gi'ing one monthQs pay or e'ery year o ser'ice could no longer be continued precisely because the company could not a ord it anymore. &t $as orced to close do$n on account o accumulated losses o o'er 12/ billion ;bI &n this case% the basis or the claim o the additional separation bene it o 1B.; days is alleged discrimination% i.e.% une)ual treatment o employees% $hich is proscribed as an un air labor practice by Art. 2.C (e) o said Code. Hnder the acts and circumstances o the present case% the grant o a lesser amount o separation pay to pri'ate respondent $as done% not by reason o discrimination% but rather% out o sheer inancial ban(ruptcy% a act that is not controlled by management prerogati'es. 9tated di erently% the total cessation o operation due to mind0boggling losses $as a super'ening act that pre'ented the company rom continuing to grant the more generous amount o separation pay. !he act that 7orth 2a'ao at the point o its orced closure 'oluntarily paid any separation bene its at all although not re)uired by la$ and 12.;0days $orth at that% should ha'e elicited admiration instead o condemnation. 2. G*9 0 !he a$ard o bac( $ages and transportation allo$ance and the issued connected there$ith are actual% the determination o $hich is best le t to the respondent 7L3C. &t is $ell settled that this Court is bound by the indings o act o the 7L3C% so long as said indings are supported by substantial e'idence 0 ,rom the e'idence on record% Court inds that the hours spent by complainants in collecting salaries at a ban( in !agum% 2a'ao del 7orte shall be considered compensable hours $or(ed. Considering urther the distance bet$een Amacan% Maco to !agum $hich is 2.; hours by tra'el and the ris(s in commuting all the time in collecting complainantsQ salaries% $ould +usti y the granting o bac($ages e)ui'alent to 2 days in a month as prayed or. Corollary to the abo'e indings% and or e)uitable reasons% $e li(e$ise hold respondents liable or the transportation e#penses incurred by complainants at 1./ round trip are during pay days. 0 &t is petitionersQ burden or duty to present e'idence o compliance o the la$ on labor standards% rather than or pri'ate respondents to pro'e that they $ere

1.; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

not paidPpro'ided by petitioners o their bac($ages and transportation e#penses. Disposition 8udgment M62&,G&7> assailed 3esolution by 9*!!&7> A9&2* and deleting the a$ard or Iadditional separation pay o 1B.; days or e'ery year o ser'iceI% and A,,&3M&7> it in all other aspects. )ama et.a%. 8s. 7!"iQs F!! Ser8i6es I"6.3 9.R. 1A30213 0ar6# 103 2004 Closure o *stablishment &t is only in instances o ?retrenchment to pre'ent losses and in cases o closures orcessation o operations o establishment or underta(ing not due to serious business losses or inancial re'erses@ that employees $hose employment has been terminated as a result are entitledto separation pay. G7OSEFINA A. )A0A 8s. 7ONIQS FOO, SERVI)ES3 IN). H Closure o *stablishment or a La$ ul CauseD 4hen Made !he o$ner% or any bona ide reason% can la$ ully close shop at anytime. 8ust as no la$ orces anyone to go into business% no la$ can compel anybody to continue in it. &t $ould indeed bestretching the intent and spirit o the la$ i 9C $ere to un+ustly inter ere $ith the managementQsprerogati'e to close or cease its business operations% +ust because said business operation orunderta(ing is not su ering rom any loss or simply to pro'ide the $or(ers continued employment.And since pri'ate respondentsQ cessation and closure o business $as la$ ul% there $as no illegaldismissal to spea( o . !his act negated the obligation to pay bac($ages. &nstead pri'aterespondents $ere re)uired to gi'e separation pay% $hich they already did% to all their regularemployees. JMAC A2AM9 M*!AL *7>&7**3&7> 463M*39 H7&670&72*1*72*7! 's. MAC A2AM9 M*!AL *7>&7**3&7>K )BL Tra"sit I"6. 8s. NLR)3 9.R.12<42A3 0ar6# 113 2004 Nasi.it L'm&er )!. et.a%. 8s. NLR) 9R N!. 14:22A3 N!8. 2A3 2004 0a" a'e ,i"-#!? ,ims'm 1!'se 8s. NLR) 9R N!. 1:11343 0ar6# 33 200< SOLI,BAN+ )ORPORATION3 8s. NLR) et.a%. 9.R. N!. 1:A>A1 mar6# 303 2010 PESAFRAN)IA TOURS AN, TRAVEL TRANSPORT3 IN). 8s. 7OSELITO P. SAR0IENTO a" RI)AR,O S. )ATI0BAN93 9.R. N!. 1;<3>;3 O6t!&er 203 2010

0AR) II 0AR+ETIN93 IN). a" LU)ILA V. 7OSON3 8s. ALFRE,O 0. 7OSON3 9.R. N!. 1;1>>33 ,e6em&er 123 2011 A. )riteria i" Termi"ati!" !( Em.%!$ees '" er A't#!ri*e )a'se 2e56e.t 6%!s're4 ,or termination o employment as based on authori"ed causes de ined in Art 2C5 o the LC% the re)uirements o due process shall be deemed complied: 1. $ith upon ser'ice o a $ritten notice to the (sho$ cause letter) a. employee and (so that he can loo( or another +ob) b. the appropriate 3egional 6 ice o the 2epartment (so that it can chec( the 'alidity o the dismissal and or statistical purposes) 2. at least 5/ days be ore the e ecti'ity o the termination 5. speci ying the ground or grounds o termination 1lus[ )ases/ 0a$a Farms Em.%!$ees Or-a"i*ati!" 8. NLR)3 23> S)RA A0< Fa6ts/ 1ri'ate respondents Maya ,arms% &nc. and Maya 3ealty and Li'estoc( Corporation belong to the Liberty Mills group o companies $hose underta(ings include the operation o a meat processing plant $hich produces ham% bacon% cold cuts% sausages and other meat and poultry products. 1etitioners% on the other hand% are the e#clusi'e bargaining agents o the employees o Maya ,arms% &nc. and the Maya 3ealty and Li'estoc( Corporation. 6n April 12% 1::1% pri'ate respondents announced the adoption o an early retirement program as a cost0cutting measure considering that their business operations su ered ma+or setbac(s o'er the years. !he program $as 'oluntaryand could be a'ailed o only by employees $ith at least eight (C) years o ser'ice. 2ialogues $ere therea ter conducted to gi'e the parties an opportunity to discuss the details o the program. Accordingly% the program $as amended to reduce the minimum re)uirement o eight (C) years o ser'ice to only i'e (;) years. -o$e'er% the response to the program $as nil. !here $ere only a e$ ta(ers. !o a'ert urther losses% pri'ate respondents $ere constrained to loo( into the companiesQ organi"ational set0up in order to streamline operations. Conse)uently% the early retirement program $as con'erted into a special redundancy program intended to reduce the $or( orce to an optimum number so as to ma(e operations more 'iable.

1.A E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

&n 2ecember 1::1% a total o si#ty0nine (A:) employees rom the t$o companies a'ailed o the special redundancy program. 6n 8anuary 1B% 1::2% the t$o companies sent letters to si#ty0si# (AA) employees in orming them that their respecti'e positions had been declared redundant. !he notices li(e$ise stated that their ser'ices $ould be terminated e ecti'e thirty (5/) days rom receipt thereo . 9eparation bene its% including the con'ersion o all earned lea'e credits and other bene its due under e#isting CBAs $ere therea ter paid to those a ected. 6n 8anuary 2.% 1::2% a notice o stri(e $as iled by the petitioners $hich accused pri'ate respondents% among others% o un air labor practice% 'iolation o CBA and discrimination. Conciliation proceedings $ere held by the 7ational Conciliation and Mediation Board (7CMB) but the parties ailed to arri'e at a settlement. 6n ,ebruary A% 1::2% the t$o companies iled a petition $ith the 9ecretary o Labor and *mployment as(ing the latter to assume +urisdiction o'er the case andPor certi y the same or compulsory arbitration. !hus% on ,ebruary 12% 1::2% the then Acting Labor 9ecretary (no$ 9ecretary) 7ie'es Con esor certi ied the case to herein public respondent or compulsory arbitration. 6n March .% 1::2% the parties $ere called to a hearing to identi y the issues in'ol'ed in the case. !herea ter% they $ere ordered to submit their respecti'e position papers. &n their position paper% petitioners a'erred that in the dismissal o si#ty0si# (AA) union o icers and members on the ground o redundancy% pri'ate respondents circum'ented the pro'isions in their CBA. 1etitioners also alleged that the companiesQ claim that they $ere in economic crisis $as abricated because in 1::/% a net income o o'er C5 million pesos $as reali"ed by Liberty ,lour Mills >roup o Companies. &n'o(ing the $or(ersQ constitutional right to security o tenure% petitioners prayed or the reinstatement o the si#ty0si# (AA) employees and the payment o attorneyQs ees as they $ere constrained to hire the ser'ices o counsel in order to protect the $or(ersQ rights. 6n their part% pri'ate respondents contend that their decision to implement a special redundancy program $as an e#ercise o management prerogati'e $hich could not be inter ered $ith unless it is sho$n to be tainted $ith bad aith and ill moti'e. 1ri'ate respondents e#plained that they had no choice but to reduce their $or( orce% other$ise% they $ould su er more losses. ,urthermore% they

denied that the program 'iolated CBA pro'isions. 7L3C a'ored the company. Iss'e/ 467 there $as gra'e abuse o discretion amounting to lac( or in e#cess o +urisdiction $ith the actual indings o public respondent 1e% / !he termination o the si#ty0si# employees $as done in accordance $ith Article 2C5 o the Labor Code. !he basis or this $as the companiesQ study to streamline operations so as to ma(e them more 'iable. 1ositions $hich o'erlapped each other% or $hich are in e#cess o the re)uirements o the ser'ice% $ere declared redundant. 4e ully agree $ith the indings and conclusions o the public respondent on the issue o termination. A close e#amination o the positions retained by management sho$ that said positions such as egg sorter% debonner $ere but the minimal positions re)uired to sustain the limited unctionsPoperations o the meat processing department. &n the absence o any e'idence to pro'e bad aith on the part o management in arri'ing at such decision% $hich records on hand ailed to sho$ in instant case% the rationality o the act o management in this regard must be sustained. !he rule is $ell0settled that labor la$s discourage inter erence $ith an employerQs +udgment in the conduct o his business. *'en as the la$ is solicitous o the $el are o employees% it must also protect the right o an employer to e#ercise $hat are clearly management prerogati'es. As long as the companyQs e#ercise o the same is in good aith to ad'ance its interest and not or the purpose o de eating or circum'enting the rights o employees under the la$s or 'alid agreements% such e#ercise $ill be upheld. ,inally% contrary to petitionersQ contention% there is nothing on record to sho$ that the 5/0day notice o termination to the $or(ers $as disregarded and that the same substituted $ith separation pay by pri'ate respondents. As ound by public respondent% $ritten notices o separation $ere sent to the employees on 8anuary 1B% 1::2. !he notices e#pressly stated that the termination o employment $as to ta(e e ect one month rom receipt thereo . !here ore% the allegation that separation pay $as gi'en in lieu o the 5/0day notice re)uired by la$ is baseless. 1etition dismissed. )a.it!% Wire%ess 8s. )!"(ess!r :<4 22:4 S)RA

:. Pr!6e 'ra% ReJ'ireme"t '" er Arti6%e 2<3 a. Se6ti!" 23 R'%e 233 B!!E V &. T?i" N!ti6e ReJ'ireme"t

1.B E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

,. ,isease 2Arti6%e 2<4 L)P4 Arti6%e 2<4. ,isease as -r!'" (!r termi"ati!" . An employer may terminate the ser'ices o an employee $ho has been ound to be su ering rom any disease and $hose continued employment is prohibited by la$ or is pre+udicial to his health as $ell as the health o his co0employees: 1ro'ided% !hat he is paid separation pay e)ui'alent to at least one month salary or to one0hal month salary or e'ery year o ser'ice% $hiche'er is greater% a raction o at least si# months being considered as one $hole year. W#at are t#e reJ'isites (!r t#e -r!'" !( iseaseK !he ollo$ing re)uisites must be complied $ith be ore termination o employment due to disease may be +usti ied: 1. !he employee is su ering rom a diseaseD 2. -is continued employment is either: a. prohibited by la$D or b. pre+udicial to his healthD or c. pre+udicial to the health o his co0employeesD 5. !here is a certi ication by a competent public health authority that the disease is o such nature or at such stage that it cannot be cured $ithin a period o si# (A) months e'en $ith proper medical treatmentD (9ec. C% 3ule &% Boo( F&% o the 6mnibus 3ules &mplementing the Labor Code) .. 7otice o termination based on this ground should be ser'ed to the employeeD and ;. 9eparation pay shall be paid to him in the amount e)ui'alent to at least one (1) month salary or to one0 hal (1P2) month salary or e'ery year o ser'ice% $hiche'er is greater% a raction o at least si# (A) months being considered as one (1) $hole year. Is a me i6a% 6erti(i6ate iss'e &$ 6!m.a"$ !6t!r a66e.ta&%eK A medical certi icate issued by a company<s o$n physician is not an acceptable certi icate or purposes o terminating an employment based on Article 2C.% it ha'ing been issued not by a ?competent public health authority%@ the person re erred to in the la$. (Cebu 3oyal 1lant J9an Miguel CorporationK 's. -on. 2eputy Minister o Labor% >. 3. 7o. ;CA5:% Aug. 12% 1:CB% 1;5 9C3A 5C J1:CBK). W#at is mea"t &$ N6!m.ete"t .'&%i6 #ea%t# a't#!rit$OK ?Competent public health authority@ re ers to a go'ernment doctor $hose medical speciali"ation pertains to the disease being su ered by the employee. ,or instance% an employee $ho is sic( o

tuberculosis should consult a go'ernment0employed pulmonologist $ho is competent to ma(e an opinion thereon. & the employee has cardiac symptoms% the competent physician in this case $ould be a cardiologist. 0e i6a% 6erti(i6ate3 a" i" is.e"sa&%e reJ'isite. &n the absence o the re)uired certi ication by a competent public health authority% the 9upreme Court has consistently ruled against the 'alidity o the employee<s dismissal. (Cru" 's. 7L3C% >. 3. 7o. 11A5C.% ,eb. B% 2///). &n the 2//5 case o 9y 's. CA% J>. 3. 7o. 1.22:5% ,ebruary 2B% 2//5K% the -igh Court reiterated its earlier ruling in !riple *ight &ntegrated 9er'ices% &nc. 's. 7L3C% J2:: 9C3A A/C% A1. 1::CK% that the re)uirement or a medical certi icate under Article 2C. cannot be dispensed $ithD other$ise% it $ould sanction the unilateral and arbitrary determination by the employer o the gra'ity or e#tent o the employee<s illness and thus de eat the public policy in the protection o labor. &n the 2//1 case o Cathay 1aci ic Air$ays% Ltd. 's. 7L3C% J>. 3. 7o. 1.1B/20/5% August 2% 2//1K% the dismissal o the employee based on a inding that she $as su ering rom asthma $as declared illegal because o the absence o a certi ication by a competent public health authority that the disease is o such nature or at such a stage that it cannot be cured $ithin a period o si# (A) months e'en $ith proper medical treatment% a re)uirement under 9ection C% 3ule &% Boo( F&% o the 3ules to &mplement the Labor Code. -ere% the employee $as dismissed based only on the recommendation o its company doctors $ho concluded that she $as a licted $ith asthma. &t did not li(e$ise sho$ proo that the employee<s asthma could not be cured in si# (A) months e'en $ith proper medical treatment. 6n the contrary% $hen she returned to the company clinic i'e (;) days a ter her initial e#amination% the company doctor diagnosed her condition to ha'e 'astly impro'ed. &n >eneral !e#tile% &nc. 's. 7L3C% J>. 3. 7o. 1/2:A:% April .% 1::;K% the termination o the employee due to 1!B sic(ness $as declared not +usti ied in the absence o medical certi icate issued by a competent public health authority that the disease is o such nature or at such a stage that it cannot be cured $ithin a period o si# (A) months e'en $ith proper medical treatment. *mployee dismissalD diseaseD dereliction o duties. 4ith regard to disease as a ground or termination% Article 2C. o the Labor Code pro'ides that an

1.C E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

employer may terminate the ser'ices o an employee $ho has been ound to be su ering rom any disease and $hose continued employment is prohibited by la$ or is pre+udicial to his health% as $ell as to the health o his co0employees. &n order to 'alidly terminate employment on this ground% 9ection C% 3ule &% Boo( F& o the 6mnibus 3ules &mplementing the Labor Code re)uires that: (i) the employee be su ering rom a disease and his continued employment is prohibited by la$ or pre+udicial to his health or to the health o his co0employees% and (ii) a certi ication by a competent public health authority that the disease is o such nature or at such a stage that it cannot be cured $ithin a period o si# (A) months e'en $ith proper medical treatment. & the disease or ailment can be cured $ithin the period% the employer shall not terminate the employee but shall as( the employee to ta(e a lea'e. !he employer shall reinstate such employee to his ormer position immediately upon the restoration o his normal health. &n Triple Eight 0ntegrated )ervices" 0nc. v. N+,% 5/.,. 7o. 12:;C.% 2ecember 5% 1::C 6" the Court held that the re)uirement or a medical certi icate under Article 2C. o the Labor Code cannot be dispensed $ithD other$ise% it $ould sanction the unilateral and arbitrary determination by the employer o the gra'ity or e#tent o the employee<s illness and% thus% de eat the public policy on the protection o labor. 0e i6a% 6erti(i6ate as e8i e"6e !( i%%"ess Medical certi icates presented by an employee to pro'e (a) his illness% the nature and the duration o the procedures per ormed by the dentist on himD and (b) the period during $hich he $as incapacitated to $or( are admissible in e'idence and ha'e probati'e $eight e'en i not notari"ed. &t is su icient that the physician and the dentist $ho e#amined the employee% aside rom their respecti'e letterheads% had $ritten their respecti'e license numbers belo$ their names and signatures% hence% they bear all the earmar(s o regularity in their issuance and are entitled to ull probati'e $eight. Common sense dictates that an ordinary $or(er does not need to ha'e these medical certi icates to be notari"ed or proper presentation to his company to pro'e his ailment. &t has been said that 'eri ication o documents is not necessary in order that the said documents could be considered as substantial e'idence. (Hnion Motor Corporation 's. 7L3C% >. 3. 7o. 1;:B5C% 2ec. :% 2//.). 0e i6a% 6erti(i6ate iss'e &$ La&!r Atta6#e a" 0i"istr$ !( P'&%i6 1ea%t# !( +'?ait3 "!t s'((i6ie"t. &n the 2//1 case o A!C& 6'erseas Corporation 's. CA% J>. 3. 7o. 1.5:.:% August :% 2//1K% in'ol'ing t$o (2) o'erseas ,ilipino $or(ers $ho $ere recruited

by the Ministry o 1ublic -ealth o Mu$ait to $or( as dental hygienists in that country or a period o 2 years but $ho $ere terminated a ter $or(ing or only t$o months based on alleged tuberculosis and heart disease% the 9upreme Court% in declaring the termination as illegal% ruled that there is nothing in the records to sho$ that petitioner complied $ith 9ec. C% 3ule &% Boo( F& o the 3ules to &mplement the Labor Code be ore pri'ate respondent0doctors $ere dismissed. &n the proceedings be ore the 16*A% petitioner did not present any certi ication $hatsoe'er. &t $as only $hen the case $as appealed to the 7L3C that petitioner belatedly introduced in e'idence a letter rom the Ministry stating that pri'ate respondents $ere ound to be positi'e or tuberculosis and heart disease. &n addition% petitioner presented a certi ication issued by the 1hilippine labor attache attesting to the act that pri'ate respondents $ere sub+ected to a medical e#amination a ter their arri'al in Mu$ait and $ere ound to be un it or employment due to lung de ects. !he letter rom the Ministry and the certi ication by the 1hilippine labor attache all short o the demands o the 6mnibus 3ules. ,irst o all% there is no inding that the disease allegedly a licting pri'ate respondents is o such nature or at such a stage that it cannot be cured $ithin a period o si# (A) months $ith proper medical treatment. 9econdly% e'en assuming that the letter rom the Ministry complied $ith the 6mnibus 3ules% petitioner has not pro'en that the same $as presented to pri'ate respondents prior to their termination. 3ather% the letter appears to ha'e been an a terthought% a belated% yet grossly unsuccess ul attempt at compliance $ith 1hilippine la$s% produced by petitioner a ter an ad'erse +udgment $as rendered against it by the 16*A. Clearly% 9ec. C% 3ule &% Boo( F&% o the 6mnibus 3ules $as not complied $ith% thus ma(ing pri'ate respondents< dismissal illegal. W#! s#!'% .r!6're t#e 6erti(i6ateK &t de'ol'es upon the employer the obligation to obtain a certi icate rom a competent public authority that the employee<s disease is at such stage or o such nature that it cannot be cured $ithin si# (A) months e'en $ith prior medical treatment. &t is the employer% and not the employee% $ho has the burden o proo to +usti y that the termination $as supported by said certi icate. Clearly% it is only $here there is such prior certi ication that the employee could be 'alidly terminated rom his +ob. (!an 's. 7L3C% >. 3. 7o. 11AC/B% April 1.% 1::B% 2B1 9C3A 21AD 9ee also 1hil. *mploy 9er'ices and 3esources% &nc. 's. 1aramio% >. 3. 7o. 1..BCA% April 1;% 2//.D 9y 's. CA% supra).

1.: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

W#! #as t#e &'r e" !( .r!8i"- t#e e5iste"6e !( a me i6a% 6erti(i6ateK !he burden o pro'ing the e#istence o such a medical certi icate re)uired under the la$ is upon the employer% not the employee. (A!C& 6'erseas Corporation 's. CA% >. 3. 7o. 1.5:.:% Aug. :% 2//1D !an 's. 7L3C% 2B1 9C3A 21A J1::BKD Cebu 3oyal 1lant 's. 2eputy Minister o Labor% supra). Em.%!$ee ismisse ?it#!'t t#e me i6a% 6erti(i6ate is e"tit%e t! m!ra% a" e5em.%ar$ ama-es. &n the same 2//1 case o Cathay 1aci ic Air$ays JsupraK% because the employer summarily dismissed the employee rom the ser'ice based only on the recommendation o its medical o icers% in e ect% ailing to obser'e the pro'ision o the Labor Code $hich re)uires a certi ication by a competent public health authority% it $as held that the a$ard o moral and e#emplary damages to the employee should be a irmed. 7otably% the decision to dismiss the employee $as reached a ter a single e#amination only. !he employer<s medical o icers recommended the employee<s dismissal e'en a ter ha'ing diagnosed her condition to ha'e 'astly impro'ed. &t did not ma(e e'en a to(en o er or the employee to ta(e a lea'e o absence as $hat it pro'ided in its Contract o 9er'ice. !he employer is presumed to (no$ the la$ and the stipulation in its Contract o 9er'ice $ith the employee. N!ti6e t! em.%!$ee a" t#e ,OLE re-ar i"termi"ati!" 'e t! isease3 "e6essar$. Although Article 2C. does not re)uire the ser'ice o notice to the employee% ho$e'er% it is necessary under the ollo$ing circumstances% i only to document the procedure ta(en by the employer prior to terminating the employment: 1. 7otice to the sic( employee to submit himsel or medical e#amination by a competent public health authority to determine not only his itness or $or( but% more importantly% or the purpose o ha'ing his sic(ness certi ied that it is o such nature or at such a stage that it can be cured $ithin a period o si# (A) months $ith proper medical treatmentD and 2. 7otice o termination in case the certi ication o the competent public health authority is to the e ect that the sic(ness is o such nature or at such a stage that it cannot be cured $ithin a period o si# (A) months e'en $ith proper medical treatment. !he second notice abo'e should be gi'en not only to the employee but also to the 2epartment o Labor and *mployment% in accordance $ith the ruling in the case o Agabon 's. 7L3C% J>.3. 7o. 1;CA:5%

7o'ember 1B% 2//.K% $here the 9upreme Court opined that i the dismissal is based on authori"ed causes under Articles 2C5 and 2C.% the employer must gi'e the employee and the 2epartment o Labor and *mployment $ritten notices thirty (5/) days prior to the e ecti'ity o his separation. &s hearing re)uired in case o termination due to disease= Being an authori"ed cause% as distinguished rom +ust cause% hearing is not necessary to be conducted by the employer prior to the termination o employment o the sic( employee. 9eparation pay in case o la$ ul dismissal based on disease. !he separation pay o an employee terminated on the ground o disease is e)ui'alent to at least one (1) month salary or to one0hal (_) month salary or e'ery year o ser'ice% $hiche'er is greater% a raction o at least si# (A) months being considered as one (1) $hole year. (Article 2C.% Labor CodeD Baby Bus% &nc. 's. Minister o Labor% >. 3. 7o. ;.225% ,eb. 2A% 1:CC). ,isa&i%it$ isti"-'is#e (r!m ,isease 2isability should not be con used $ith disease. 2isability itsel % e'en i permanent% is not a ground or termination. !he Magna Carta or 2isabled 1ersons prohibits the termination o a disabled employee based on disability alone. !his constitutes act o discrimination% a criminal o ense or $hich ine andPor imprisonment may be imposed. (Magna Carta or 2isabled 1ersons) Ri-#t t! rei"stateme"t i( isease is 6'ra&%e ?it# si5 m!"t#s & the disease or ailment can be cured $ithin si# months% the employer shall not terminate the employee but shall as( the employee to ta(e a lea'e o absence. !he employee is entitled to be reinstated to his ormer position immediately upon the restoration o his normal health. (9ec. C% 3ule &% Boo( F&% o the 6mnibus 3ules &mplementing the Labor Code) )ase/ )r'* 8s. NLR) 2Fe& ;3 20004 AT)I O8erseas )!r.. 8s. )A 2A'-. 23 20014 FA)TS/ A!C& and the Ministry o 1ublic -ealth o Mu$ait entered into an agreement. A!C& $ould recruit medical pro essionals or the latter. 3espondents $ere hired or the Ministry. !hey

1;/ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

under$ent physical and medical e#ams in a 16*A accredited clinic and $ere declared it. &n Mu$ait% they $ere sub+ected another e#amination and a ter 2 months they $ere dismissed or being physically un it or their +obs and $ere repatriated so they iled a complaint in the 16*A or illegal dismissal alleging that they $eren<t gi'en by their oreign employer copies the results o their medical e#am and $ritten notice o termination. A!C& claims that the Minister has the right to dismiss them because they $ere ound to be physically un it to $or(. &t appears on record that they $ere +ust not allo$ed to $or( anymore. !here $as no notice nor $as there any opportunity gi'en to allo$ them to de end themsel'es. !he 16*A ruled that there $as illegal dismissal. !he 7L3C they may use all reasonable means to ascertain acts and they cannot simply disregard the certi ication o the Ministry o -ealth o Mu$ait% ho$e'er this $as only presented in the appeal to the 7L3C. !he CA re'ersed the 7L3C. A!C& claims that respondents $ere merely probationary dismissed or ailure to )uali y since they $ere physically un it. ISSUE/ 4P7 there $as illegal dismissal. 1EL,/ !he 9C ruled that there $as illegal dismissal. !here $as no proo that they $ere probationary. Being regular employees% the dismissal must meet the re)uirements o Art 2C. o the labor code. An employee may be terminated i ound to be su ering rom a disease and the continued employment is prohibited by la$ or is pre+udicial to his health as $ell as to the health o his co0employees but the dismissal may not be summarily carried out. !he employer must meet certain prere)uisites contained in 9ec. C 3ule 1 Boo( F& o the 6mnibus 3ules &mplementing the Labor Code. !here must be certi ication by a competent public health authority that the disease is o such nature or at such a stage that cannot be cured $ithin the period o A months e'en $ith proper medical treatment. & the disease or ailment can be cured $ithin the period% the employees can<t be terminated but must ta(e a lea'e land he $ill be reinstated immediately upon the restoration o his normal health. !he letter rom the Ministry alls short o the demands o the 6mnibus 3ules. !here is no inding that the disease is o such nature or at such a stage that it cannot be cured $ithin a period o si# months a $ith proper medical treatment. Also A!C& has not pro'en that the same $as presented prior to the termination. 1ri'ate employment or recruitment agencies are +ointly and se'eral liable $ith its principalD the oreign based employer or all claims iled by recruited $or(ers $hich may arise in connection $ith the ser'ice agreements or employment contracts.

WUERT1 P1ILIPPINES3 IN).3 VS. RO,ANTE YNSON3 9.R. N!. 1;A>323 Fe&r'ar$ 1A3 2012 &n this case% Gnson should ha'e reported bac( to $or( or attended the in'estigations conducted by 4uerth 1hilippines% &nc. immediately upon being permitted to $or( by his doctors% (no$ing that his position remained 'acant or a considerable length o time. -o$e'er% he did not e'en sho$ any sincere e ort to return to $or(. Clearly% since there is no more hindrance or him to return to $or( and attend the in'estigations set by 4uerth 1hilippines% &nc.% Gnson<s ailure to do so $as $ithout any 'alid or +usti iable reason. -is conduct sho$s his indi erence and utter disregard o his $or( and his employer<s interest% and displays his clear% deliberate% and gross dereliction o duties. !he po$er to dismiss an employee is a recogni"ed prerogati'e inherent in the employer<s right to reely manage and regulate his business. !he la$% in protecting the rights o the laborers% authori"es neither oppression nor sel 0 destruction o the employer. !he $or(er<s right to security o tenure is not an absolute right% or the la$ pro'ides that he may be dismissed or cause. As a general rule% employers are allo$ed $ide latitude o discretion in terminating the employment o managerial personnel. !he mere e#istence o a basis or belie'ing that such employee has breached the trust and con idence o his employer $ould su ice or his dismissal. 7eedless to say% an irresponsible employee li(e Gnson does not deser'e a position in the $or(place% and it is 4uerth 1hilippines% &nc.<s management prerogati'e to terminate his employment. !o be sure% an employer cannot be compelled to continue $ith the employment o $or(ers $hen continued employment $ill pro'e inimical to the employer<s interest. 7uerth "hilippines, Inc. vs. (odante 5nson, /.(. 2o. ,KFC>., Debruary ,F, .E,..

E. Retireme"t retireme"t 2Art. 2<;3 as ame" e ;:414

&$ RA

Art. 2<;. Retireme"t. RAny employee may be retired upon reaching the retirement age established in the collecti'e bargaining agreement or other applicable employment contract. &n case o retirement% the employee shall be entitled to recei'e such retirement bene its as he may ha'e earned under e#isting la$s and any collecti'e bargaining agreement and other agreements: 1ro'ided% ho$e'er% !hat an employeeQs retirement bene its under any collecti'e bargaining and other

1;1 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

agreements shall not be less than those pro'ided herein. &n the absence o a retirement plan or agreement pro'iding or retirement bene its o employees in the establishment% an employee upon reaching the age o si#ty (A/) years or more% but not beyond si#ty0 i'e (A;) years $hich is hereby declared the compulsory retirement age% $ho has ser'ed at least i'e (;) years in the said establishment% may retire and shall be entitled to retirement pay e)ui'alent to at least one0 hal (1P2) month salary or e'ery year o ser'ice% a raction o at least si# (A) months being considered as one $hole year. Hnless the parties pro'ide or broader inclusions% the term one0hal (1P2) month salary shall mean i teen (1;) days plus one0t$el th (1P12) o the 15th month pay and the cash e)ui'alent o not more than i'e (;) days o ser'ice incenti'e lea'es. 3etail% ser'ice and agricultural establishments or operations employing not more than (1/) employees or $or(ers are e#empted rom the co'erage o this pro'ision. Fiolation o this pro'ision is hereby declared unla$ ul and sub+ect to the penal pro'isions pro'ided under Article 2CC o this Code. 3HL* &&% B66M F& 6, !-* 3HL*9 &M1L*M*7!&7> !-* LAB63 C62* (3*!&3*M*7! B*7*,&!9 ,63 *M1L6G**9 &7 !-* 13&FA!* 9*C!63) 1ursuant to the pro'isions o Article 2CB o the Labor Code as amended by 3epublic Act 7o. BA.1% in relation to Article ; o the same Code% 3ule && o Boo( F& o the 3ules &mplementing the Labor Code is hereby issued% the ull te#t o $hich shall read as ollo$s: 3HL* && 3etirement Bene its 9*C!&67 1. >eneral 9tatement on Co'erage. R !his 3ule shall apply to all employees in the pri'ate sector% regardless o their position% designation% or status and irrespecti'e o the method by $hich their $ages are paid% e#cept to those speci ically e#empted under 9ection 2 hereo . As used herein% the term IActI shall re er to 3epublic Act 7o. BA.1% $hich too( e ect on 8anuary B% 1::5. 9*C!&67 2. *#emptions. R !his 3ule shall not apply to the ollo$ing employees: 2.1 *mployees o the 7ational >o'ernment and its political subdi'isions% including >o'ernment0

o$ned or controlled corporations% i they are co'ered by the Ci'il 9er'ice La$ and its regulations. 2.2 2omestic helpers and persons in the personal ser'ice o another. (Hnder the 7e$ 2.6. they are AL3*A2G C6F*3*2) 2.5 *mployees o retail% ser'ice and agricultural establishments or operations regularly employing not more than ten (1/) employees. As used in this sub0 section: (a) I3etail establishmentI is one principally engaged in the sale o goods to end0users or personal or household use. &t shall lose its retail character )uali ied or e#emption i it is engaged in both retail and $holesale o goods. (b) I9er'ice establishmentI is one principally engaged in the sale o ser'ice to indi'iduals or their o$n or household use and is generally recogni"ed as such. cdt (c) IAgricultural establishmentPoperationI re ers to an employer $hich is engaged in agriculture. !his term re ers to all arming acti'ities in all its branches and includes% among others% the culti'ation and tillage o the soil% production% culti'ation% gro$ing and har'esting o any agricultural or horticultural commodities% dairying% raising o li'estoc( or poultry% the culture o ish and other a)uatic products in arms or ponds% and any acti'ities per ormed by a armer or on a arm as an incident to or in con+unction $ith such arming operations% but does not include the manu acture or processing o sugar% coconut% abaca% tobacco% pineapple% a)uatic or other arm products. 9*C!&67 5. 3etirement Hnder CBAPContract. R 5.1 Any employee may retire or be retired by his employer upon reaching the retirement age established in the collecti'e bargaining agreement or other applicable employment contract% sub+ect to the pro'isions o 9ection ; hereo on the payment o retirement bene its. cdt 5.2 &n case o retirement under this 9ection% the employee shall be entitled to recei'e such retirement bene its as he may ha'e earned under e#isting la$s and any collecti'e bargaining agreement and other agreementsD pro'ided% ho$e'er% that an employeeQs retirement bene its under any collecti'e bargaining and other agreements shall not be less than those pro'ided under this 3uleD and pro'ided urther that i such bene its are less% the employer shall pay the di erence bet$een the amount due the employee under this 3ule and that pro'ided under the collecti'e bargaining agreement or other applicable employment contract. 5.5 4here both the employer and the employee contribute to a retirement und in accordance $ith a collecti'e bargaining agreement or other applicable

1;2 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

employment contract% the employerQs total contribution thereto shall not be less than the total retirement bene its to $hich the employee $ould ha'e been entitled had there been no such retirement und. &n case the employerQs contribution is less than the retirement bene its pro'ided under this 3ule% the employer shall pay the de iciency. 9*C!&67 .. 6ptionalPCompulsory 3etirement. R ..1 6ptional 3etirement R &n the absence o a retirement plan or other applicable agreement pro'iding or retirement bene its o employees in an establishment% an employee may retire upon reaching the age o si#ty (A/) years or more i he has ser'ed or at least i'e (;) years in said establishment. ..2 Compulsory 3etirement R 4here there is no such plan or agreement re erred to in the immediately preceding sub0section% an employee shall be retired upon reaching the age o si#ty0 i'e (A;) years. ..5 Hpon retirement o an employee% $hether optional or compulsory% his ser'ices may be continued or e#tended on a case to case basis upon agreement o the employer and employee. ... 9er'ice 3e)uirement R !he minimum length o ser'ice o at least i'e (;) years re)uired or entitlement to retirement pay shall include authori"ed absences and 'acations% regular holidays% and mandatory ul illment o a military or ci'ic duty. 9*C!&67 ;. 3etirement Bene its. R ;.1 &n the absence o an applicable employment contract% an employee $ho retires pursuant to the Act shall be entitled to retirement pay e)ui'alent to at least one0hal (1P2) month salary or e'ery year o ser'ice% a raction o at least si# (A) months being considered as one $hole year. cdt ;.2 Components o 6ne0hal (1P2) Month 9alary. R ,or the purpose o determining the minimum retirement pay due an employee under this 3ule% the term Ione0hal month salaryI shall include all o the ollo$ing: (a) ,i teen (1;) days salary o the employee based on his latest salary rate. As used herein% the term IsalaryI includes all remunerations paid by an employer to his employees or ser'ices rendered during normal $or(ing days and hours% $hether such payments are i#ed or ascertained on a time% tas(% piece or commission basis% or other method o calculating the same% and includes the air and reasonable 'alue% as determined by the 9ecretary o Labor and *mployment% o ood% lodging or other acilities customarily urnished by the employer to his employees. !he term does not include cost o li'ing allo$ances% pro it0sharing payments and

other monetary bene its $hich are not considered as part o or integrated into the regular salary o the employeesD (b) !he cash e)ui'alent o i'e (;) days o ser'ice incenti'e lea'eD (c) 6ne0t$el th o the 15th month pay due the employeeD and (d) All other bene its that the employer and employee may agree upon that should be included in the computation o the employeeQs retirement pay. ;.5 6ne0hal Month 9alary o *mployees 4ho Are 1aid by 3esults. R ,or co'ered $or(ers $ho are paid by results and do not ha'e a i#ed monthly rate% the basis or determination o the salary or i teen days shall be their a'erage daily salary (A29)% sub+ect to the pro'isions o 3ule F&&0A% Boo( &&& o the rules implementing the Labor Code on the payment o $ages o $or(ers $ho are paid by results. !he A29 is the a'erage salary or the last t$el'e (12) months rec(oned rom the date o their retirement% di'ided by the number o actual $or(ing days in that particular period. 9*C!&67 A. *#emption rom !a#. R !he retirement pay pro'ided in the Act may be e#empted rom ta# i the re)uirements set by the Bureau o &nternal 3e'enue under 9ec. 2 (b)% item (1) o 3e'enue 3egulations 7o. 120CA dated August 1% 1:CA are met% to $it: I1ensions% retirement and separation pay. R 1ensions% retirement and separation pay constitute compensation sub+ect to $ithholding ta#% e#cept the ollo$ing: (1) 3etirement bene it recei'ed by o icials and employees o pri'ate irms under a reasonable pri'ate bene it plan maintained by the employer% i the ollo$ing re)uirements are met: (i) !he bene it plan must be appro'ed by the Bureau o &nternal 3e'enueD (ii) !he retiring o icial or employee must ha'e been in the ser'ice o the same employer or at least ten (1/) years and is not less than i ty (;/) years o age at the time o retirementD and (iii) !he retiring o icial or employee shall not ha'e pre'iously a'ailed o the pri'ilege under the retirement bene it plan o the same or another employerI. 9*C!&67 B. 1enal 1ro'ision. R &t shall be unla$ ul or any person or entity to circum'ent or render ine ecti'e the pro'isions o the Act. Fiolations thereo shall be sub+ect to the penal pro'isions pro'ided

1;5 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

under Article 2CC o the Labor Code o the 1hilippines. 9*C!&67 C. 3elation to Agreements and 3egulations. R 7othing in this 3ule shall +usti y an employer rom $ithdra$ing or reducing any bene its% supplements% or payments as pro'ided in e#isting la$s% indi'idual or collecti'e agreements% or employment practices or policies. All rules and regulations% policy issuances% or orders contrary to or inconsistent $ith these rules are hereby repealed or modi ied accordingly. 9*C!&67 :. * ecti'ity. R !his 3ule too( e ect on 8anuary B% 1::5 $hen the Act $ent into orce. (9>2.) MA. 7&*F*9 3. C67,*963 9ecretary \ 3etirement La$ could be gi'en retroacti'e e ect: 1. !he claimant or retirement bene its $as still the employee o the employer at the time the statute too( e ectD and 2. !he claimant has complied $ith the re)uirements or eligibility under the statute or such retirement bene its. \3etirement schemes under the labor code: 1. 6ptional 3etirement0 A/ years 2. Compulsory 3etirement0 A; years \Can compulsory retirement be lo$er than A; years= 0 Ges% i it is stipulated in the CBA or in the employment contract. \!he bene its to $hich the retiree may be entitled to could be higher i so pro'ided in the employment contract or CBA. & the bene its pro'ided are lesser than that pro'ided or b la$% the employer shall pay the di erence bet$een the amount due to the employee under this 3ule and that pro'ided in the CBA or in any other employment contract. \ &s an employee $ho is dismissed or +ust causes entitled to retirement pay% considering that at the time o dismissal the employee is already )uali ied to recei'e retirement pay= 0 Ges% but only on a case0to0 case basis% since there is no pro'ision in the labor code or or eiture o retirement pay% then the liberal interpretation o the la$ in a'or o labor should be applied. \ -o$e'er% $ith the enactment o 3A BA.1 considering there is no pro'ision or or eiture o retirement pay% then an employee dismissed shall be entitled to retirement pay pro'ided that the legal re)uisites are complied $ith.

)ases/ ,i8i"a L!.e* 8s. NatQ% Stee% )!r.. 2Fe&. 1:3 20044 FA)TS/ !he 7ational 9teel Corporation% herein respondent% embar(ed on t$o (2) massi'e pro+ects% the ,i'e0Gear *#pansion 1rogram (1hase &&0B) and the &ntegrated 9teel Mill 1ro+ect. Conse)uently% respondent employed and trained se'eral employees or the operation o the pro+ects. 6ne o them $as 2i'ina 9. Lope"% herein petitioner. 9he $as appointed researcher% she $as promoted as a senior researcher at respondent<s Mar(et 3esearch 2epartment. 4ith this de'elopment% respondent adopted an organi"ational streamlining program. 3espondent issued a memorandum announcing the retrenchment o se'eral $or(ers at its &ligan and 1asig 1lants and Ma(ati -ead 6 ice. 3espondent terminated petitioner<s ser'ices and ha'ing rendered t$el'e (12) years o ser'ice% $as paid by respondent representing her separation bene its at the rate o ?t$o months basic salary per year o ser'ice.@ Additionally% she recei'ed her lea'e credits% 15 th month pay% and uni orm and rice subsidy di erential. And a ter ha'ing been paid her separation bene its% she e#ecuted and signed a 3elease and Uuitclaim. Barely three (5) years therea ter% petitioner iled $ith the Labor Arbiter a complaint or payment o retirement bene its against respondent% doc(eted and $as consolidated $ith case entitled ? Aenito 7nievas et al. vs. National )teel %orporation.@ !he complainants here are also retrenched employees o respondent. !he Labor Arbiter rendered a 2ecision dismissing the complaints. 6n appeal% the 7ational Labor 3elations Commission (7L3C)% a irmed the Labor Arbiter<s 2ecision. 1etitioner iled a motion or reconsideration but $as denied. -ence% she iled $ith the Court o Appeals a petition or certiorari alleging that the 7L3C committed gra'e abuse o discretion in declaring that she is not entitled to retirement bene its and in holding that she is precluded rom claiming such bene its because o her )uitclaim. !he Court o Appeals promulgated its 2ecision a irming the assailed 3esolutions o the 7L3C. !he Court o Appeals issued a 3esolution denying the petitioner<s motion or reconsideration. ISSUE/ 4hether or not petitioner is entitled to retirement bene its. 1EL,/ 4hile it is a#iomatic that retirement la$s are liberally construed in a'or o the persons intended to be bene ited% ho$e'er% such interpretation cannot be

1;. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

made in this case in light o the clear lac( o consensual and statutory basis o the grant o retirement bene its to petitioner. &t bears stressing that as held by the Labor Arbiter% the 7L3C and the Court o Appeals% there is no pro'ision in the parties< CBA authori"ing the payment to petitioner retirement bene its in addition to her retrenchment payD and that there is no indication that she $as orced or ?duped@ by respondent to sign the 3elease and Uuitclaim. !he Court o Appeals also ruled that petitioner% not ha'ing reached the retirement age% is not entitled to retirement bene its under Article 2CB o the Labor Code. !his Court has al$ays accorded respect and inality to the indings o act o the Court o Appeals% particularly i they coincide $ith those o the Labor Arbiter and the 7L3C $hen supported by substantial e'idence% as in this case. !he reason or this is that )uasi0+udicial agencies% li(e the Arbitration Board and the 7L3C% ha'e ac)uired a uni)ue e#pertise because their +urisdictions are con ined to speci ic matters. R B E Tra"s.!rt 8s. Lata2Fe&. 133 20044 Fa6ts/ 1edro Latag $as a regular employee o La Mallorca !a#i since March 1% 1:A1. 4hen La Mallorca ceased rom business operations% Latag trans erred to 3 Z * !ransport% &nc. -e $as recei'ing an a'erage daily salary o i'e hundred pesos (1;//.//) as a ta#i dri'er. Latag got sic( in 8anuary 1::; and $as orced to apply or partial disability $ith the 999% $hich $as granted. 4hen he reco'ered% he reported or $or( in 9eptember 1::C but $as no longer allo$ed to continue $or(ing on account o his old age. Latag thus as(ed ,eli# ,abros% the administrati'e o icer o JpetitionersK% or his retirement pay pursuant to 3epublic Act BA.1 but he $as ignored. !hus% on 2ecember 21% 1::C% Latag iled a case or payment o his retirement pay be ore the 7L3C. Latag ho$e'er died on April 5/% 1:::. 9ubse)uently% his $i e% A'elina Latag% substituted him. 6n 8anuary 1/% 2///% the Labor Arbiter rendered a decision in a'or o Latag. Iss'e/ 4hether or not Latag is entitled to retirement bene its considering she signed a $ai'er o )uitclaim. R'%i"-/ !he respondent is entitled to retirement bene its despite o the $ai'er o )uitclaims. !here is no dispute the act that the late 1edro M. Latag is entitled to retirement bene its. 3ather% the bone o contention is the number o years that he should be

credited $ith in computing those bene its. !he indings o the 7L3C that 1edro must be credited only $ith his ser'ice to 3 Z * !ransport% &nc.% because the e'idence sho$s that the a orementioned companies are t$o di erent entities. A ter a care ul and painsta(ing re'ie$ o the e'idence on record% the court supports the 7L3CQs indings. As to the Uuitclaim and 4ai'er signed by 3espondent Latag% the CA committed no error $hen it ruled that the document $as in'alid and could not bar her rom demanding the bene its legally due her husband. !his is not say that all )uitclaims are in'alid per se. Courts% ho$e'er% are $ary o schemes that rustrate $or(ersQ rights and bene its% and loo( $ith dis a'or upon )uitclaims and $ai'ers that bargain these a$ay. Hndisputably% 1edro M. Latag $as credited $ith 1. years o ser'ice $ith 3 Z * !ransport% &nc. Article 2CB o the Labor Code% as amended by 3epublic Act 7o. BA.1% 5/ pro'ides: 3etirement. R &n the absence o a retirement plan or agreement pro'iding or retirement bene its o employees in the establishment% an employee upon reaching the age o si#ty (A/) years or more% but not beyond si#ty0 i'e (A;) years $hich is hereby declared the compulsory retirement age% $ho has ser'ed at least i'e (;) years in said establishment% may retire and shall be entitled to retirement pay e)ui'alent to at least one0hal (1P2) month salary or e'ery year o ser'ice% a raction o at least si# (A) months being considered as one $hole year. Hnless the parties pro'ide or broader inclusions% the term one hal 0month salary shall mean i teen (1;) days plus one0t$el th (1P12) o the 15th month pay and the cash e)ui'alent o not more than i'e (;) days o ser'ice incenti'e lea'es !he rules implementing the 7e$ 3etirement La$ similarly pro'ide the abo'e0mentioned ormula or computing the one0hal month salary. 9ince 1edro $as paid according to the IboundaryI system% he is not entitled to the 15th month 52 and the ser'ice incenti'e payD hence% his retirement pay should be computed on the sole basis o his salary. &t is accepted that ta#i dri'ers do not recei'e i#ed $ages% but retain only those sums in e#cess o the IboundaryI or ee they pay to the o$ners or operators o their 'ehicles. !hus% the basis or computing their bene its should be the a'erage daily income. &n this case% the CA ound that 1edro $as earning an a'erage o i'e hundred pesos (1;//) per day. 4e thus compute his retirement pay as ollo$s: 1;// # 1; days # 1. years o ser'ice e)uals 11/;%///.

1;; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

EASTERN S1IPPIN9 LINES3 IN).3 Vs. ANTONIO3 9.R. N!. 1;1A<;3 O6t 133 200> Fa6ts/ 3espondent $as hired by petitioner to $or( as a seaman on board its 'arious 'essels. 1etitioner too( the licensure e#amination or 2nd *ngineer $hile petitioner<s 'essel $as dry doc(ed or repairs. 6n ,ebruary 1::A% $hile in 8apan% and in the employ o petitioner% respondent su ered a ractured le t trans'erse process o the ourth lumbar 'ertebra. -e $as ad'ised to rest or a month. -e $as later e#amine and declared it to $or(. -o$e'er% he $as not admitted bac( to $or( &n dire or inancial need% he applied or an optional retirement on 8anuary 1::B. 1etitioner disappro'ed on the ground that his shipboard employment history and trac( record as a seaman did not meet the standard re)uired in granting the optional retirement bene its. 3espondent iled a complaint $ith the 26L*% or ailure to reach amicable settlement% the case $as or$arded to 7L3C or proper proceedings. !he LA in its decision% rendered +udgment in a'or o respondent. 6n appeal% 7L3C a irmed the decision o LA. 6n appeal to CA% it a irmed the decision o 7L3C but modi ied the a$ard o moral damages in the reduced amount. -ence% this petition. Iss'e/ 4hether CA erred in a$arding the respondent o the optional retirement bene it being applied or in H9 2ollars under the gratuity plan o petitioner. R'%i"-/ !he petition is meritorious. 3espondent is not entitled to optional retirement bene its under the Labor Code. Clearly% the age o retirement is primarily determined by the e#isting agreement or employment contract. &n the absence o such agreement% the retirement age shall be i#ed by la$. Hnder the la$% the mandated compulsory retirement age is set at A; years% $hile the minimum age or optional retirement is set at A/ years.&n the case at bar% there is a retirement gratuity plan bet$een the petitioner and the respondent. Hnder paragraph B o the plan% a shipboard employee% upon his $ritten re)uest% may retire rom ser'ice i he has reached the eligibility age o A/ years. &n this case% the option to retire lies $ith the employee. 3ecords sho$s that respondent $as only .1 years old $hen he applied or optional retirement% $hich $as 1: years short o the re)uired eligibility age. !hus% he cannot claim optional retirement bene its as a matter o right. 2ue to oregoing indings o acts o the CA% although generally deemed conclusi'e% may admit re'ie$ by this Court i the CA ailed to notice certain rele'ant acts $hich% i properly considered% $ill +usti y a di erent conclusion and $hen the +udgment o the CA is premised on misapprehension o acts. !he CA erred in a irming the rulings o L and the 7L3C% as the a'ailment o the optional retirement bene its is

sub+ect to the e#clusi'e prerogati'e o the sole option o the petitioner. !he petition is granted. +I0BERLY-)LAR+ P1ILS3 IN). 8s. NORA ,I0AYU9A3 et.a%. 9.R. N!. 1;;;0A3 Se.t 1<3 200> FA)TS/ !he three respondents $ere resigned employees o the petitioner company. !hey entered such resignation prior to the company<s issuance o an early retirement pac(age $hich must be a'ailed during the period o 7o'ember 1/05/% 2//2. But because o the generosity o the petitioner company% they already included the respondents in the pac(age. But on 8anuary 1A% 2//5% the company added e#tra inancial incenti'e or employees that $ould grab the retirement pac(age $hich added a lump sum retirement pay in the amount o 1hp. 2//%///.// and a monthly economic assistance. !he respondents iled a case in the 7L3C claiming that they should be included such additional bene its on the ground that these $ere illegally $ithheld to them. ISSUE/ Are additional bene itsPbonuses gi'en to the employees due to the gratuitous grant o the employer be re)uired to the employees although it is not included in Collecti'e Bargaining Agreement= LAW/ Article 2C5 o the Labor Code RULIN9/ !he court re'ersed the decision o the 7L3C and the Court o Appeals and ruled in a'or o the petitioner. According to the 9upreme Court% the initial retirement grant already gi'en to the respondents $as already due to the pri'ilege gi'en by the company to the employees. !hey are clearly not included anymore but because o their re)uest% the company made ad+ustments and reconsidered their inclusion. 9o $hen the company announced an additional incenti'e% it $as clear that the respondents are no longer co'ered by it because they are no longer employees $hen it $as announced. !o ha'e them included $ould be additional burden to the employer. !he nature a bonus arose rom the inancial gro$th or good per ormance o the company% it is clearly not mandatory and legally demandable by the employees $hen it is clear that no collecti'e bargaining agreement or la$ that mandates the grant. 7ANUARIA A. RIVERA3 8s. UNITE, LABORATORIES3 IN).3 9.R. N!. 1AA:3>3 A.ri% 223 200> Fa6ts/ 3i'era commenced employment $ith the Company as senior manu acturing pharmacist and later became 2irector o the Manu acturing 2i'ision. &n 1:;:% the Company adopted a comprehensi'e retirement plan. !he parties do not dispute that under the plan% a member is compulsorily retired upon

1;A E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

reaching the normal retirement date $hich is the age A/ or has completed the ser'ice o 5/ years o ser'ice. &n 1:CC% 3i'era completed 5/ years o ser'ice and the Company retired her pursuant to the terms o the plan e ecti'e in 2ecember 1:CC. At 3i'era<s re)uest% the company allo$ed her to continue $or(ing and e'en promoted to the position o AF1 in 1:C: until 1::2. 3i'era then retired rom the company. ,rom 1::5 to 1::.% 3i'era $or(ed as a personal consultant under contract $ith the Company<s sister companies $hich assigned her to the Company. !he Company amended its retirement plan in 1::2. 3i'era $rote the company to increase her retirement bene its in accordance $ith the amendments. !he company denied her re)uest because she compulsory retired in 1:CC.3i'era sought relie or reco'ery o unpaid retirement pay di erential. !he Labor Arbiter (LA) dismissed the complaint or lac( o merit. 6n appeal% the 7L3C a irmed the decision o the LA. 3i'era ele'ated the case to CA and CA ruled in a'or o her and set aside the 7L3C decision but remanded the case to LA or hearing on the merits inding the claim had not yet prescribed at the time o its iling. -ence% this petition. Iss'e/ 4hether CA erred in ruling that 3i'era<s claim or additional retirement bene its had not prescribed. R'%i"-/ &t should be noted in this regard that Articles 115: to 11;; o the Ci'il Code pro'ide the general la$ on prescription o actions. Hnder Article 115:% actions prescribe by the mere lapse o time prescribed by la$. !hat la$ may either be the Ci'il Code or special la$s as speci ically mandated by Article 11.C. &n labor cases% the special la$ on prescription is Article 2:1 o the Labor Code. !he Labor Code has no speci ic pro'ision on $hen a monetary claim accrues. !hus% again the general la$ on prescription applies 00 Article 11;/ o the Ci'il Code. !he day the action may be brought is the day a claim started as a legal possibility. &n this case% this date came $hen 3i'era learned that she $as being paid on the basis o her 2ecember 1:CC retirement computations or the retirement that she claimed to ha'e occurred on 2ecember 1::2.!hus% by strict standards o la$% $e cannot grant 3i'era<s petition. &nterestingly% the same conclusions obtains i the case $ere to be 'ie$ed solely rom the ordinary norms o airness. 4e go out o our $ay to say this in light o $hat 3i'era stated in her demand latter to H7&LABD she elt aggrie'ed because the retirement bene its she recei'ed $ere less than $hat other employees $ith less years o ser'ice% $ith lo$er rates o pay% or $ith lo$er ran( recei'ed. Apparently% 3i'era ailed to reali"e that she cannot compare hersel $ith these other employees because she and they $ere not in the same situationD these

other employees retired later and under retirement plan terms that% by then and or 'arious reasons not attributable to any company $rongdoing% had been enhanced. Both in la$ and under the common concept o airness% there is ine)uitable treatment only i persons under the same situation or circumstances are treated di erently. 3i'era $as not so treated by H7&LABD rather% she $as gi'en her +ust due under the speci ic rules that applied to her. -ence% $e cannot li(e$ise recogni"e the 'alidity o 3i'era<s claim e'en rom the point o 'ie$ o +ustice administered according to ordinary norms o airness. RO,OLFO 7. SERRANO3 VS. SEVERINO SANTOS TRANSIT a" @!r SEVERINO SANTOS3 9.R. N!. 1<;:><3 A'-'st >3 2010 Retireme"t .a$C a..%i6a&i%it$ t! em.%!$ees !" 6!mmissi!" &asis. *'en i the petitioner as bus conductor $as paid on commission basis% he alls $ithin the co'erage o 3.A. BA.1 and its implementing rules. !hus% his retirement pay should include the cash e)ui'alent o ;0days 9&L and 1P12 o 15th month pay. !he 7L3C<s reliance on the case o , M E Transport" 0nc. as a basis or ruling that bus conductors are not co'ered by the la$ on 9&L and 15th month pay is erroneous since that in'ol'ed a ta#i dri'er $ho $as paid according to the ?boundary system.@ !here is a di erence bet$een dri'ers paid under the ?boundary system@ and conductors $ho are paid on commission basis. &n practice% ta#i dri'ers do not recei'e i#ed $ages and retain only those sums in e#cess o the ?boundary@ or ee they pay to the o$ners or operators o the 'ehicles. Conductors% on the other hand% are paid a certain percentage o the bus< earnings or the day. (odolfo G. $errano vs. $everino $antos Transit andNor $everino $antos, /.(. 2o. ,BKHCB, August C, .E,E. 0ASIN9 AN, SONS ,EVELOP0ENT )ORPORATION a" )RISPIN )1AN versus 9RE9ORIO P. RO9ELIO3 9.R. N!. 1:1;<;3 A.ri% 2;3 2011 F. Resi-"ati!" 2Arti6%e 2<A L)P4 Arti6%e 2<A. Termination by employee. (a) An employee may terminate $ithout +ust cause the employee0employer relationship by ser'ing a $ritten notice on the employer at least one month in ad'ance. !he employer upon $hom no such notice $as ser'ed may hold the employee liable or damages. (b) An employee may put an end to the relationship $ithout ser'ing any notice on the employer or any o the ollo$ing +ust causes:

1;B E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

(1) 9erious insult by the employer or his representati'e on the honor and person o the employeeD (2) &nhuman and unbearable treatment accorded the employee by the employer or his representati'eD (5) Commission o a crime or o ense by the employer or his representati'e against the person o the employee or any o the immediate members o his amilyD andD (.) 6ther causes analogous to any o the oregoing. 3esignation is $ithdra$able e'en i the employee has called it ?irre'ocable.@ But a ter it is accepted or appro'ed by the employer% its $ithdra$al needs the employerQs consent. !he employee must ser'e a $ritten notice on the employer at least 1 month in ad'ance. 6nce% accepted% cannot be $ithdra$n $ithout the consent o the employer (&ntertrod Maritime 's 7L3C) An employee $ho 'oluntarily resigns is not entitled to separation pay unless stipulated in an employment contract or CBA or sanctioned by established employer practice or policy. (Al aro 's CA% 5A5 9C3A B::) !he burden o proo to sho$ that the resignation $as 'oluntarily tendered lies $ith the employer. !he acceptance by the employer o the employeeQs resignation is not necessary. !he signi icance o acceptance by the employer comes in only $hen the employee decides to $ithdra$ his tendered resignation. )ase/ A%(ar! 8s. ).A. 2A'-. 2<3 20014 Foluntary 3esignation is de ined as the act o an employee% $ho inds himsel in a situation in $hich he belie'es that personal reasons cannot be sacri iced in a'or o the e#igency o the ser'iceD thus% he has no other choice but to disassociate himsel rom his employment A*6!r 0a"'(a6t'ri"- I"6. 8s. NLR) 2Fe&. 113 1>>>4 1iercing the Feil o Corporate ,iction to pre'ent e'asion o obligations or con use the legitimate issues Fa6ts/ Capulso iled $ith the Labor Arbiter a complaint or constructi'e illegal dismissal. -e alleged that he $or(ed or A"cor as ceramics $or(er or more than 2 years. !hen% due to asthma% he iled a lea'e o absence. Hpon returning to $or(% he $as

not permitted to do so. -e later on amended his complaint and impleaded ,ilipinas 1aso as additional respondent. 6n the other hand% A"cor contends that Capulso 'alidly resigned rom the company% as e'idenced by a letter o resignation% or $hich Capulso then sought employment rom ,ilipinas 1aso% rom $hich he also resigned. !he Labor Arbiter dismissed the case. 6n appeal to the 7L3C% it ad+udged in a'or o Capulso holding ,ilipinas 1aso and A"cor solidarily liable. -ence% this petition $ith the 9C. Iss'e/ 4hether or not ,ilipinas 1aso may be held +ointly and se'erally liable $ith A"cor or bac( $ages o Capulso. 1e% / Ges. !he doctrine that a corporation is a legal entity or a person in la$ distinct rom the persons composing it is merely a legal iction or purposes o con'enience and to subser'e the ends o +ustice. !his iction cannot be e#tended to a point beyond its reason and policy. 4here% as in this case% the corporate iction $as used as a means to perpetrate a social in+ustice or as a 'ehicle to e'ade obligations or con use the legitimate issues% it $ould be discarded and the 2 corporations $ould be merged as one% the irst being merely considered as the instrumentality% agency% conduit% or ad+unct o the other. &n the case at bar% there $as much con usion as to the identity o Capulso<s employer% but% or sure% it $as ,ilipinas 1aso and A"cor<s o$n ma(ing. ,irst% Capulso had no (no$ledge that he $as already $or(ing under ,ilipinas 1aso since he continued to retain his A"cor &2. 9econd% his pay slips contained the name o A"cor gi'ing the impression that A"cor $as paying his salary. !hird% he $as paid the same salary and he per ormed the same (ind o +ob% in the same $or( area% in the same location% using the same tools and under the same super'isor. 0!&i%e Pr!te6ti8e a" ,ete6ti8e A-e"6$ 8s. Om.a 20a$ >3 200A4 FA)TS/ 1ri'ate respondent% Alberto 6mpad% $as employed by the petitioner as a security guard in 1::/. -e $as assigned to the 'arious clients o Mobile. &n 8une 1::B% respondent $as assigned as a security guard at Manila 9outh$oods $hen he in)uired rom the pro+ect manager o 9outh$oods i they ha'e already paid their bac($ages to the security agency. 6mpad claims that $hen the Agency ound out about his )uery% he $as relie'ed rom his post and ne'er gi'en another assignment.

1;C E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

!he petitioner on the other hand claims that 6mpad $as assigned to another client% Falle Ferde Country Club rom August 2: to 6ctober 51% 1::B a ter he $as relie'ed rom his post at the Manila 9outh$oods. 1etitioner urther claims that one o the guards at Falle Ferde attested that 6mpad had told her that he $ould earn better i he +ust dri'es his tricycle ull time. 6n 6ctober 1;% 1::B% 6mpad reported or $or( but he $as limping due to an accident he su ered $hile dri'ing his tricycle. 1etitioner claims that he stopped reporting or $or( a ter that date. 6n 9eptember 25% 1::C% 2omingo Alon"o% operations manager o Mobile sa$ respondent and in)uired as to $hether he $as still interested in reporting or $or(. !he petitioner allegedly ans$ered in the negati'e and it $as at that time that Alon"o ad'ised him to resign. 6mpad% he claims% submitted his hand $ritten resignation $hich also $as a )uit claim. 1etitioner contended that the letter o resignation $as orced on him in return or monies o$ed him. As he needed the money% he had no choice but to comply. -e ho$e'er $as only being gi'en 1esos ;%/// $hich he re+ected. -e iled this case the ollo$ing day. 6mpad alleged that he $as illegal terminated and claimed underpayment or non0payment o $ages% o'ertime pay% premium pay or holiday and rest day% separation pay% etc. Labor Arbiter dismissed the complaint or lac( o merit. !he 7L3C re'ersed the decision. !he CA also dismissed the action or reconsideration% noting that there $as no 'oluntariness in the acts o 6mpad in submitting the resignation letters. -ence this action. ISSUE/ 467 6mpad $as illegally dismissed 1EL,/ G*9 !he resignation letters o 6mpad are dubious as they $ere $ritten in a language ob'iously not his and ?lopsidedly $orded@ to ree the Agency rom liabilities. !he a ida'its issued by the $itnesses o Mobile are suspect considering that these $itnesses $erePare in act employed by the petitioner. (easoning All the documentary e'idence pro'es that respondent $as assigned to Falle Ferde rom 9eptember 2: to 6ctober 51% 1::B and that he stopped reporting or $or( on 6ctober 1A% 1::B. A ter this period% respondent did not seem to ha'e be gi'en any urther assignment. !he 9C ruled that $hile it is true that security guards may be put on loating status the same should last or only si# months. &n the case at bar% there $as no sho$ing that Mobile lac(ed engagements to $hich they can post their guards. Absent any dire e#igency +usti ying their ailure to gi'e respondent urther assignment% the only logical conclusion is that respondent $as constructi'ely dismissed.

*'en assuming that Mobile $as +usti ied in not immediately gi'ing 6mpad any assignment a ter 6ctober% the length o time that he $as put on loating status is tantamount to constructi'e dismissal. &n an illegal dismissal case% the onus probandi is on the employer to pro'e that the dismissal $as in act or 'alid cause. &t $as in this case also the burden o Mobile to submit e'idence that the resignation $as 'oluntary on the part o 6mpad. Disposition 1etition dismissed. V. )ONSEFUEN)ES OF ILLE9AL ,IS0ISSAL Arti6%e 2;>. &n cases o regular employment% the employer shall not terminate the ser'ices o an employee e#cept or a +ust cause or $hen authori"ed by this !itle. An employee $ho is un+ustly dismissed rom $or( shall be entitled to reinstatement $ithout loss o seniority rights and other pri'ileges and to his ull bac($ages% inclusi'e o allo$ances% and to his other bene its to their monetary e)ui'alent computed rom the time his compensation $as $ithheld rom him up to the time o his actual reinstatement. Re%ie(s !( a" i%%e-a%%$ ismisse em.%!$ee/ rei"stateme"t3 &a6E?a-es3 B ama-es 2Tit%e VVIII N))4 1. Rei"stateme"t 0i no longer easible due to cessation o the o ice or business or to strained relations% then separation pay in lieu thereo . W#e" e56'sa&%e/ a. 9trained relations 0 must be so compelling and so serious in character that the continued employment o the ** is so obno#ious to the personP business o the *3 and that the continuation o such employment has become inconsistent $ith peace an tran)uility $hich is an ideal atmosphere in e'ery $or(place. b. $hen reinstatement has become impossible because o a super'ening e'ent. *#ample: abolition in good aith the position the $or(er once occupied% absence o e)ui'alent position c. Closure o the establishment d. & the employee is already beyond retirement age 2. Ba6E?a-es 0 rom the time his compensation $as $ithheld rom him at the time o the dismissal to his actual reinstatement. 1!? 6!m.'te / a. i dismissal prior to e ecti'ity o 3A AB1; (March 21% 1:C:) 0 Bac($ages up to 5 years $ithout deduction or )uali ication

1;: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

b. i dismissal on or a ter March 21% 1:C: 0 ,ull bac($ages% inclusi'e o allo$ances and other bene its or their monetary e)ui'alent rom the time their actual compensation $as $ithheld rom them up to the time o their actual reinstatement. 3. ,ama-es 0 moral andPor e#emplary a. Moral 2amages A3!&CL* 222/. 4ill ul in+ury to property may be a legal ground or a$arding moral damages i the court should ind that% under the circumstances% such damages are +ustly due. !he same rule applies to breaches o contract $here the de endant acted raudulently or in bad aith. b. *#emplary 2amages A3!&CL* 222:. *#emplary or correcti'e damages are imposed% by $ay o e#ample or correction or the public good% in addition to the moral% temperate% li)uidated or compensatory damages. A3!&CL* 2252. &n contracts and )uasi0contracts% the court may a$ard e#emplary damages i the de endant acted in a $anton% raudulent% rec(less% oppressi'e% or male'olent manner. A3!&CL* 2255. *#emplary damages cannot be reco'ered as a matter o rightD the court $ill decide $hether or not they should be ad+udicated. 4. Att!r"e$Qs Fees A3!&CL* 22/C. &n the absence o stipulation% attorneyQs ees and e#penses o litigation% other than +udicial costs% cannot be reco'ered% e#cept: (1) 4hen e#emplary damages are a$ardedD (2) 4hen the de endantQs act or omission has compelled the plainti to litigate $ith third persons or to incur e#penses to protect his interestD a. Rei"stateme"t 2Arti6%e 2;>4 7rticle :>? .0n cases of regular employment" the employer shall not terminate the services of an employee e$cept for a just cause or #hen authori@ed 'y this Title. 7n employee #ho is unjustly dismissed from #or! shall 'e entitled to reinstatement #ithout loss of seniority rights and other privileges and to his full 'ac!#ages" inclusive of allo#ances" and to his other 'enefits to their monetary e8uivalent computed from the time his compensation #as #ithheld from him up to the time of his actual reinstatement. 0i no longer easible due to cessation o the o ice or business or to strained relations% then separation pay in lieu thereo . Nat're W#e" e56'sa&%e/ a. 9trained relations

0must be so compelling and so serious in character that the continued employment o the ** is so obno#ious to the personP business o the *3 and that the continuation o such employment has become inconsistent $ith peace an tran)uility $hich is an ideal atmosphere in e'ery $or(place. b. $hen reinstatement has become impossible because o a super'ening e'ent. *#ample: abolition in good aith the position the $or(er once occupied% absence o e)ui'alent position c. Closure o the establishment d. & the employee is already beyond retirement age REINSTATE0ENT REN,ERE, 0OOT AN, A)A,E0I) BY SUPERVENIN9 EVENTS 3einstatement should no longer be ordered $hen it is rendered moot and academic by reason o super'ening e'ents such as: 1. 2eclaration o insol'ency by the court. +%lectruck Asia, Inc. vs. 3eris, /. (. 2o. ,LKE>,, Guly .K, .EEL-. 2. ,ire $hich gutted the hotel and resulted in its total destruction. 5&agong &ayan *orporation vs. 4ple, /. (. 2o. K>>>L, Dec. B, ,CBH-. 5. Closure o the business o the employer. +$ection L;bI, (ule I, &ook JI, (ules to Implement the 1abor *ode@ "hiltread Tire O (ubber *orporation vs. Jicente, /. (. 2o. ,L.KFC, 2ov. ,E, .EEL-. .. 7on0e#istence o the employee<s ormer position at the time o reinstatement or reasons not attributable to the ault o the employer. +$ection L;bI, (ule I, &ook JI, (ules to Implement the 1abor *ode@ "i::a Inn vs. 21(*, /. (. 2o. KLF>,, Gune .B, ,CBB-. ;. !a(e o'er o the business o the employer by another company and there is no agreement regarding assumption o liability by the ac)uiring company. +*allanta vs. *arnation "hilippines, /. (. 2o. KEH,F, 4ct. .B, ,CBH-. )ases/ REYNAL,O 9. )ABI9TIN93 8s. SAN 0I9UEL FOO,S3 IN).3 9.R. N!. 1:;;0:3 N!8em&er A3 200> &n conclusion% it bears to stress that it is human nature that some hostility $ill ine'itably arise bet$een parties as a result o litigation% but the same does not al$ays constitute strained relations in the absence o proo or e#planation that such indeed e#ists. (3*G7AL26 >. CAB&>!&7> '. 9A7 M&>H*L ,6629% &7C% >.3. 7o. 1ABB/A% 7o'ember ;% 2//:) FA)TS/ 1etitioner 3eynaldo >. Cabigting $as hired as a recei'erP issuer at the 9an Miguel Corporation%

1A/ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

,eeds and Li'estoc( 2i'ision (B0Meg) on ,ebruary 1A% 1:C. and a ter years o ser'ice% he $as promoted as in'entory controller. 6n 8une 2A% 2///% respondent 9an Miguel ,oods% &nc.% through its 1resident% Mr. Arnaldo A rica% sent petitioner a letter in orming him that his position as sales o ice coordinator under its logistic department has been declared redundant. 9imultaneously% respondent terminated the ser'ices o petitioner e ecti'e 8uly 51% 2///% and o ered him an early retirement pac(age. !herea ter% petitioner $as included in the list o retrenched employees ( or reason o redundancy) submitted by respondent to the 2epartment o Labor and *mployment. 1etitioner $as surprised upon receipt o the letter because he $as not a sales o ice coordinator% and yet he $as being terminated as such. Accordingly% petitioner re used to a'ail o the early retirement pac(age. 1rior to petitioner<s termination on 8uly 51% 2///% he $as an in'entory controller% per orming at the same time the unction o a $arehouseman. ,urthermore% petitioner $as an acti'e union o icer o respondent<s union but upon his termination% $as only a member thereo . 4ith the support o his union% petitioner iled a Complaint )uestioning his termination primarily because he $as not a sales o ice coordinator% but an in'entory controller% per orming the unctions o both an in'entory controller and a $arehouseman. &n reply% respondent reiterated its declaration that petitioner<s position as sales o ice coordinator $as redundant as a result o respondent<s e ort to streamline its operations. Labor Arbiter (LA) rendered a 2ecision% $here it ruled that petitioner $as illegally dismissed. Accordingly% the LA ordered respondent to pay petitioner bac($ages% separation pay in lieu o reinstatement and attorney<s ees. 7L3C rendered a 2ecision a irming the LA<s inding that petitioner $as illegally dismissed by respondent. CA rendered a 2ecision partially granting respondent<s petition Iss'e/ 467 ?strained relations@ bar petitioner<s reinstatement. 1e% / Hnder the la$ and pre'ailing +urisprudence% an illegally dismissed employee is entitled to reinstatement as a matter o right. -o$e'er% i reinstatement $ould only e#acerbate the tension and strained relations bet$een the parties% or $here the relationship bet$een the employer and the employee has been unduly strained by reason o their irreconcilable di erences% particularly $here the

illegally dismissed employee held a managerial or (ey position in the company% it $ould be more prudent to order payment o separation pay instead o reinstatement. &n >lobe0Mac(ay Cable and 3adio Corporation '. 7ational Labor 3elations Commission% this Court discussed the limitations and )uali ications or the application o the ?strained relations@ principle% in this $ise: # # # & % in the $isdom o the Court% there may be a ground or grounds or non0application o the abo'e0 cited pro'ision% this should be by $ay o e#ception% such as $hen the reinstatement may be inadmissible due to ensuing strained relations bet$een the employer and the employee. &n such cases% it should be pro'ed that the employee concerned occupies a position $here he en+oys the trust and con idence o his employerD and that it is li(ely that i reinstated% an atmosphere o antipathy and antagonism may be generated as to ad'ersely a ect the e iciency and producti'ity o the employee concerned. &n order or the doctrine o strained relations to apply% it should be pro'ed that the employee concerned occupies a position $here he en+oys the trust and con idence o his employer and that it is li(ely that i reinstated% an atmosphere o antipathy and antagonism may be generated as to ad'ersely a ect the e iciency and producti'ity o the employee concerned. A ter a perusal o the LA 2ecision% this Court inds that the LA had no hard acts upon $hich to base the application o the doctrine o strained relations% as the same $as not s)uarely discussed nor elaborated on. Also% it is o notice that said issue $as addressed by the LA in +ust one sentence $ithout indicating actual circumstances $hy strained relations e#ist. !he same is also true or the CA 2ecision $hich disposed o the issue in +ust one sentence $ithout any elaboration. Accordingly% this Court is o the opinion that both the LA and the CA based their conclusions on impression alone. ,inally% it is noted that the position o $arehouseman and in'entory controller still e#ists up to date. !he nature o the contro'ersy $here the parties to this case $ere engaged is not o such nature that $ould spa$n a situation $here the relations are se'erely strained bet$een them as $ould bar the complainant to his continued employment. 7either may it be said that his position entails a constant communion $ith

1A1 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

the respondent such that hostilities may bar smooth interactions bet$een them. !here is no basis or an a$ard o separation pay in lieu o reinstatement. !he claim o respondent is not meritorious. !his Court shares petitioner<s 'ie$ that the $ords allegedly imputing malice and bad aith to$ards the respondent cannot be made a basis or denying his reinstatement. !he doctrine o strained relations has been made applicable to cases $here the employee decides not to be reinstated and demands or separation pay. !he same% ho$e'er% does not apply to herein petition% as petitioner is as(ing or his reinstatement despite his illegal dismissal. &n conclusion% it bears to stress that it is human nature that some hostility $ill ine'itably arise bet$een parties as a result o litigation% but the same does not al$ays constitute strained relations in the absence o proo or e#planation that such indeed e#ists. 1etition is granted. 7UANITO A. 9AR)IA a" ALBERTO 7. ,U0A9O 8s. P1ILIPPINE AIRLINES3 IN).3 9.R. N!. 1:4<A:3 7a"'ar$ 203 200> FA)TS/ !he case stemmed rom the administrati'e charge iled by 1hilippine Airlines (1AL) against its employees0herein petitioners a ter they $ere allegedly caught in the act o sni ing shabu $hen a team o company security personnel and la$ en orcers raided the 1AL !echnical Center<s !oolroom 9ection on 8uly 2.% 1::;. A ter due notice% 1AL dismissed petitioners or transgressing the 1AL Code o 2iscipline% prompting them to ile a complaint or illegal dismissal and damages $hich $as resol'ed by the Labor Arbiter in their a'or% thus ordering 1AL to% inter alia% immediately comply $ith the reinstatement aspect o the decision. 9ubse)uently% the Labor Arbiter issued a 4rit o *#ecution respecting the reinstatement decision and issued a 7otice o >arnishment. 3espondent ele'ated the matter to the appellate court $hich issued the herein challenged 2ecision and 3esolution nulli ying the 7L3C 3esolutions on t$o grounds% essentially espousing that: (1) a subse)uent inding o a 'alid dismissal remo'es the basis or implementing the reinstatement aspect o a labor arbiter<s decisionD and

(2) the impossibility to comply $ith the reinstatement order due to corporate rehabilitation pro'ides a reasonable +usti ication or the ailure to e#ercise the options under Article 225 o the Labor Code (the second ground). -*7C*% this 1etition. RULIN9/ Ampli ication o the ,irst >round: !he Court rea irms the pre'ailing principle that e'en i the order o reinstatement o the Labor Arbiter is re'ersed on appeal% it is obligatory on the part o the employer to reinstate and pay the $ages o the dismissed employee during the period o appeal until re'ersal by the higher court. &t settles the 'ie$ that the Labor Arbiter<s order o reinstatement is immediately e#ecutory and the employer has to either re0admit them to $or( under the same terms and conditions pre'ailing prior to their dismissal% or to reinstate them in the payroll% and that ailing to e#ercise the options in the alternati'e% employer must pay the employee<s salaries. Ampli ication o the 9econd >round !he Court sustains the appellate court<s inding that the peculiar predicament o a corporate rehabilitation rendered it impossible or respondent to e#ercise its option under the circumstances. !he test is t$o0 old: (1) there must be actual delay or the act that the order o reinstatement pending appeal $as not e#ecuted prior to its re'ersalD and (2) the delay must not be due to the employer<s un+usti ied act or omission. & the delay is due to the employer<s un+usti ied re usal% the employer may still be re)uired to pay the salaries not$ithstanding the re'ersal o the Labor Arbiter<s decision. 4-*3*,63*% the petition is 1A3!&ALLG 2*7&*2. &nso ar as the Court o Appeals 2ecision and 3esolution annulling the 7L3C 3esolutions a irming the 'alidity o the 4rit o *#ecution and the 7otice o >arnishment are concerned% the Court inds no re'ersible error. 96 632*3*2. \ 3einstatement Compliance 3eport !he ne$ 7L3C 3ules o 1rocedure% $hich too( e ect on 8anuary B% 2//A% no$ re)uire the employer to submit a report o compliance $ithin 1/ calendar days rom receipt o the Labor Arbiter<s decision% disobedience to $hich clearly denotes a re usal to reinstate. !he employee need not ile a motion or the

1A2 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

issuance o the $rit o e#ecution since the Labor Arbiter shall therea ter motu proprio issue the $rit. 4ith the ne$ rules in place% there is hardly any di iculty in determining the employer<s intransigence in immediately complying $ith the order. (8HA7&!6 A. >A3C&A and ALB*3!6 8. 2HMA>6 's. 1-&L&11&7* A&3L&7*9% &7C.% >.3. 7o. 1A.C;A% 8anuary 2/% 2//:) PFI=ER3 IN). AN,@OR REY 9ERAR,O BA)ARRO3 AN,@OR FER,INAN,)ORTES3 AN,@OR ALFRE, 0A9ALLON3 AN,@OR ARISTOTLE AR)E 8s.9ERAL,INE VELAS)O9.R. N!. 1;;4:;3 0ar6# >3 2011 FA)TS/ 1ri'ate respondent >eraldine L. Felasco $as employed $ith petitioner1,&O*3% &7C. as 1ro essional -ealth Care 3epresentati'e since 1::2.9ometime in April 2//5% Felasco had a medical $or( up or her high0ris(pregnancy and $as subse)uently ad'ised bed rest $hich resulted in here#tending her lea'e o absence. 4hile Felasco $as still on lea'e% 1,&O*3 through its Area 9ales Manager% herein petitioner ,erdinand Corte"% personally ser'ed Felasco a I9ho$0cause7oticeI. Aside rom mentioning about an in'estigation on her possible'iolations o company $or( rules regarding Iunauthori"ed deals andPordiscounts in money or samples and unauthori"ed $ithdra$al andPor pull0 outo stoc(sI and instructing her to submit her e#planation on the matter $ithin .C hours rom receipt o the same% the notice also ad'ised her that she $asbeing placed under Ipre'enti'e suspensionI or 5/ days and conse)uentlyordered to surrender the ollo$ing IaccountabilitiesDI 1) Company Car% 2)9amples and 1romats% 5) C3,P*3PF*-&CL*P96AP169A1PM16A and otherrelated Company ,orms% .) Cash Card% ;) Calte# Card% and A) M16AP!16A3e'ol'ing !ra'el ,und. !he ollo$ing day% petitioner Corte" together $ith one* ren 2ariano retrie'ed the abo'e0mentioned IaccountabilitiesI romFelasco<s residence. &n response% Felasco sent a letter addressed to Corte" denying the charges.Felasco claimed that the transaction $ith Mercury 2rug% Magsaysay Branch$as merely to accommodate t$o undisclosed patients o a certain 2r. 3enatoManalo. &n support thereto% Felasco attached the 2octor<s letter and thea ida'it o the latter<s secretary.Later on% Felasco recei'ed a I9econd 9ho$0cause 7oticeI in orming her o additional de'elopments in their in'estigation. According to the notice% acertain Carlito 8omen e#ecuted an a ida'it pointing to Felasco as the one$ho transacted $ith a printing shop to print 1,&O*3 discount coupons. 8omenalso presented te#t messages originating rom Felasco<s company

issuedcellphone re erring to the printing o the said coupons. Again% Felasco $asgi'en .C hours to submit her $ritten e#planation on the matter. Felasco senta letter to 1,&O*3 as(ing or additional time to ans$er the second 9ho$0cause 7otice. !hat same day% Felasco iled a complaint or illegal suspension $ith moneyclaims be ore the 3egional Arbitration Branch. !he ollo$ing day%% 1,&O*3sent her a letter in'iting her to a disciplinary hearing. Felasco recei'ed itunder protest and in ormed 1,&O*3 'ia the recei'ing copy o the said letterthat she had lodged a complaint against the latter and that the issues thatmay be raised in the hearing Ican be tac(led during the hearing o her caseIor at the preliminary con erence. 9he li(e$ise opted to $ithhold ans$eringthe 9econd 9ho$0cause 7otice. !herea ter% Felasco recei'ed a I!hird 9ho$0cause 7otice%I together $ith copies o the a ida'its o t$o Branch Managerso Mercury 2rug% as(ing her or her comment $ithin .C hours. ,inally% 1,&O*3in ormed Felasco o its IManagement 2ecisionI terminating her employment. !he Labor Arbiter rendered its decision declaring the dismissal o Felascoillegal% ordering her reinstatement $ith bac($ages and urther a$ardingmoral and e#emplary damages $ith attorney<s ees. 6n appeal% the 7L3Ca irmed the same but deleted the a$ard o moral and e#emplary damages. Hndaunted% 1,&O*3 appealed to the CA to annul and set aside thea orementioned 7L3C issuances. !he CA upheld the 'alidity o respondent<sdismissal rom employment. 3espondent then iled a Motion or3econsideration% $herein the CA a irmed the 'alidity o respondent<sdismissal rom employment but modi ied its earlier ruling by directing 1,&O*3to pay respondent her $ages rom the date o the Labor Arbiter<s 2ecision upto the Court o Appeals 2ecision. ISSUE/ 4hether or not the Court o Appeals committed a serious butre'ersible error $hen it ordered 1 i"er to pay Felasco $ages rom the date o the Labor Arbiter<s decision ordering her reinstatement until the time $henthe Court o Appeals rendered its decision declaring Felasco<s dismissal 'alid. 1EL,/ 76. As ar bac( as 1::B in the seminal case o 1ioneer !e#turi"ingCorporation '. 7ational Labor 3elations Commission% the Court held that ana$ard or order o reinstatement is immediately sel 0 e#ecutory $ithout theneed or the issuance o a $rit o e#ecution in accordance $ith the thirdparagraph o Article 225 o the Labor Code. &n the case at bar%

1A5 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

1,&O*3 did notimmediately admit respondent bac( to $or( $hich% according to the la$%should ha'e been done as soon as an order or a$ard o reinstatement ishanded do$n by the Labor Arbiter $ithout need or the issuance o a $rit o e#ecution. !hus% respondent $as entitled to the $ages paid to her under thea orementioned $rit o e#ecution. At most% 1,&O*3<s payment o the samecan only be deemed partial compliancePe#ecution o the Court o Appeals3esolution dated 6ctober 25% 2//A and $ould not bar respondent rom beingpaid her $ages rom May A% 2//; to 7o'ember 25% 2//;. !o reiterate% under Article 225 o the Labor Code% an employee entitled toreinstatement Ishall either be admitted bac( to $or( under the same termsand conditions pre'ailing prior to his dismissal or separation or% at the optiono the employer% merely reinstated in the payroll.I &t is established in +urisprudence that reinstatement means restoration to astate or condition rom $hich one had been remo'ed or separated. !he person reinstated assumes the position he had occupied prior to hisdismissal. 3einstatement presupposes that the pre'ious position rom $hichone had been remo'ed still e#ists% or that there is an un illed position $hichis substantially e)ui'alent or o similar nature as the one pre'iously occupied by the employee. Applying the oregoing principle to the case be ore us% it cannot be said that$ith 1,&O*3<s 8une 2B% 2//; Letter% in belated ul illment o the LaborArbiter<s reinstatement order% it had sho$n a clear intent to reinstaterespondent to her ormer position under the same terms and conditions norto a substantially e)ui'alent position. !o begin $ith% the return0to0$or( order 1,&O*3 sent respondent is silent $ith regard to the position or the e#actnature o employment that it $anted respondent to ta(e up as o 8uly 1%2//;. *'en i $e assume that the +ob a$aiting respondent in the ne$ locationis o the same designation and pay category as $hat she had be ore% it isplain rom the te#t o 1,&O*3<s 8une 2B% 2//; letter that such reinstatement$as not Iunder the same terms and conditionsI as her pre'ious employment%considering that 1,&O*3 ordered respondent to report to its main o ice in Ma(ati City $hile (no$ing ully $ell that respondent<s pre'ious +ob had herstationed in Baguio City (respondent<s place o residence) and it $as stillnecessary or respondent to be brie ed regarding her $or( assignments andresponsibilities% including her relocation bene its.&n 'ie$ o 1,&O*3<s ailure to e ect respondentQs actual or payrollreinstatement% it is indubitable that the 3o)uero ruling is applicable to thecase at bar.

!he circumstance that respondent opted or separation pay inlieu o reinstatement as mani ested in her counsel<s Letter dated 8uly 1C%2//; is o no moment. 4e do not see respondent<s letter as ta(ing a$ay theoption rom management to e ect actual or payroll reinstatement but% ratherunder the actual milieu o this case% $here the employer ailed tocategorically reinstate the employee to her ormer or e)ui'alent positionunder the same terms% respondent $as not obliged to comply $ith 1,&O*3<sambi'alent return0to0$or( order. !o uphold 1,&O*3<s 'ie$ that it $asrespondent $ho un+usti iably re used to $or( $hen 1,&O*3 did not reinstateher to her ormer position% and $orse% re)uired her to report or $or( underconditions pre+udicial to her% is to open the doors to potential employerabuse. ,oreseeably% an employer may circum'ent the immediatelyen orceable reinstatement order o the Labor Arbiter by cra ting return0to0$or( directi'es that are ambiguous or meant to be re+ected by the employeeand then disclaim liability or bac($ages due to non0reinstatement bycapitali"ing on the employee<s purported re usal to $or(. &n sum% the optiono the employer to e ect actual or payroll reinstatement must be e#ercised in good aith. I"sta"6es ?#e" rei"stateme"t is "!t .!ssi&%e. )ases/ 0a"i%a ,iam!" 1!te% Em.%!$ees U"i!" 8s. )A3 9R N!. 140A1<3 ,e6. 1:3 2004 &n this case% the 9upreme Court e#plained the legislati'e intendment or purpose behind Article 25A (g) o the Labor Code% and reiterated the rule that payroll reinstatement in lieu o actual reinstatement is not sanctioned under the pro'ision o the said article. Fa6ts/ 6n 7o'ember 11% 1::A% the Hnion iled a petition or a certi ication election so that it may be declared the e#clusi'e bargaining representati'e o the -otel<s employees or the purpose o collecti'e bargaining. !he petition $as dismissed by the 2epartment o Labor and *mployment (26L*) on 8anuary 1;% 1::B. A ter a e$ months% despite the dismissal o their petition% the Hnion sent a letter to the -otel in orming the latter o its desire to negotiate or a collecti'e bargaining agreement. !he -otel% ho$e'er% re used to negotiate $ith the Hnion% citing the earlier dismissal o the Hnion<s petition or certi ication by 26L*. ,ailing to settle the issue% the Hnion staged a stri(e against the -otel. 7umerous con rontations ollo$ed% urther straining the relationship bet$een the Hnion and the -otel. !he -otel claims that the stri(e $as

1A. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

illegal and dismissed some employees or their participation in the allegedly illegal concerted acti'ity. !he Hnion% on the other hand% accused the -otel o illegally dismissing the $or(ers. A 1etition or Assumption o 8urisdiction under Article 2A5(g) o the Labor Code $as later iled by the Hnion be ore the 9ecretary o Labor. !herea ter% 9ecretary o Labor !ra+ano issued an 6rder directing the stri(ing o icers and members o the Hnion to return to $or( $ithin t$enty0 our (2.) hours and the -otel to accept them bac( under the same terms and conditions pre'ailing prior to the stri(e. A ter recei'ing the abo'e order the members o the Hnion reported or $or(% but the -otel re used to accept them and instead iled a Motion or 3econsideration o the 9ecretary<s 6rder. Acting on the motion or reconsideration% then Acting 9ecretary o Labor *spaYol modi ied the one earlier issued by 9ecretary !ra+ano and instead directed that the stri(ers be reinstated only in the payroll. !his is $here the contro'ersy arose. !he union alleged that the 9ecretary o Labor committed gra'e abuse o discretion or modi ying its earlier order and re)uiring instead the reinstatement o the employees in the payroll. !he Court o Appeals dismissed the Hnion<s petition and a irmed the 9ecretary o Labor<s 6rder or payroll reinstatement. &t held that the challenged order is merely an error o +udgment and not a gra'e abuse o discretion and that payroll reinstatement is not prohibited by la$% but may be ?called or@ under certain circumstances. !he CA cited Hni'ersity o 9anto !omas 's. 7L3C as basis or its ruling.

R'%i"-/ !he 9upreme Court re'ersed the decision o the CA% and ruled that the 9ecretary o Labor committed gra'e abused o discretion in ordering payroll reinstatement in lieu o actual reinstatement. !he Court noted the di erence bet$een H9! case and the instant case. &n H9! case the teachers could not be gi'en bac( their academic assignments since the order o the 9ecretary or them to return to $or( $as gi'en in the middle o the irst semester o the academic year. !he 7L3C $as% there ore% aced $ith a situation $here the stri(ing teachers $ere entitled to a return to $or( order% but the uni'ersity could not immediately reinstate them since it $ould be impracticable and detrimental to the students to change teachers at that point in time. &n the present case% there is no similar compelling reason that called or payroll reinstatement as an alternati'e remedy. A strained relationship bet$een the stri(ing employees and management is no reason or payroll reinstatement in lieu o actual reinstatement. Hnder Article 2A5(g)% all $or(ers must immediately return to $or( and all employers must readmit all o them under the same terms and conditions pre'ailing be ore the stri(e or loc(out. !he Court pointed out that the la$ uses the precise phrase o ?under the same terms and conditions%@ re'ealing that it contemplates only actual reinstatement. !his is in (eeping $ith the rationale that any $or( stoppage or slo$do$n in that particular industry can be inimical to the national economy. !he Court reiterates that Article 2A5(g) $as not $ritten to protect labor rom the e#cesses o management% nor $as it $ritten to ease management rom e#penses% $hich it normally incurs during a $or( stoppage or slo$do$n. !his la$ $as $ritten as a means to be used by the 9tate to protect itsel rom an emergency or crisis. &t is not or labor% nor is it or management. 9OL,EN A)E BUIL,ERS a" ARNOL, U. A=UL3 8s. 7OSE A. TAL,E3 9.R. N!. 1<;2003 0a$ A3 2010 FA)TS/ 3*91672*7! 8ose !alde iled a complaint or illegal dismissal against petitioner >olden Ace Builders. !he Court o Appeals (CA) decided the case in a'or o !alde. >olden Ace assailed the CA<s a$ard o separation pay and the computation o bac( $ages rom the time

1A; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

o dismissal up to actual reinstatement. 2id the contention ind merit= 3uling: 7o. &n the present case% the labor arbiter ound that actual animosity e#isted bet$een petitioner A"ul and respondent as a result o the iling o the illegal dismissal case. 9uch inding% especially $hen a irmed by the appellate court as in the case at bar% is binding upon the court% consistent $ith the pre'ailing rules that this court $ill not try acts ane$ and that indings o acts o )uasi0+udicial bodies are accorded great respect% e'en inality. Clearly then% respondent is entitled to bac( $ages and separation pay as his reinstatement has been rendered impossible due to strained relations. As correctly held by the appellate court% the bac( $ages due to respondent must be computed rom the time he $as un+ustly dismissed until his actual reinstatement% or rom ,ebruary 1::: until 8une 5/% 2//;% $hen his reinstatement $as rendered impossible $ithout ault on his part. !he Court% ho$e'er% does not ind the appellate court<s computation o separation pay in order. !he appellate court considered respondent to ha'e ser'ed petitioner company or only eight years. 1etitioner $as hired in 1::/% ho$e'er% and he must be considered to ha'e been in the ser'ice not only until 1:::% $hen he $as un+ustly dismissed% but until 8une 5/% 2//;% the day he is deemed to ha'e been actually separated (his reinstatement ha'ing been rendered impossible) rom petitioner company or or a total o 1; years. &. Ba6E?a-es 0 rom the time his compensation $as $ithheld rom him at the time o the dismissal to his actual reinstatement. 1!? 6!m.'te / a. i dismissal prior to e ecti'ity o 3A AB1; (March 21% 1:C:) 0 Bac($ages up to 5 years $ithout deduction or )uali ication b. i dismissal on or a ter March 21% 1:C: 0 ,ull bac($ages% inclusi'e o allo$ances and other bene its or their monetary e)ui'alent rom the time their actual compensation $as $ithheld rom them up to the time o their actual reinstatement. )ases/

7e""$ A-a&!" 8s. NLR /.(. 2o. ,FBHC>, 2ov. ,K, .EEL &n the 2//. landmar( labor case o Agabon et al.% (>.3.7o. 1;CA:5% 7o'ember 1B% 2//.). &n this case% the 9upreme Court re'isited 9errano and re0 e#amined the lac( o statutory basis in the Labor Code or declaring as Iine ectual or de ecti'eI a dismissal o an employee or a 'alid or authori"ed cause but $ithout complying $ith the employeeQs statutory right to due process. ,ollo$ing the 1:C: 'intage case o 4enphil (1B/ 9C3A A: J1:C:K)% the present rule no$ as laid do$n in Agabon et al. is to hold the dismissal as 'alid (no longer de ecti'e or ine ectual) but $ith the )uali ication% that the employer $ill ha'e to pay the I'alidlyI dismissed employee the sum o 15/%/// as nominal damages or non0obser'ance by the employer o the employeeQs right to due process. &n the mind o the -igh Court% 15/%/// $as considered as aIsti erI sanction than the 11%/// $hich it originally a$arded in 4enphil. Being a landmar( decision by the 9upreme Court en banc% Agabon et al.% is no$ the leading authority used by many human resource practitioners and management la$yers% citing it $ith distinction to o'erturn pre'ious decisions o the -igh Court based on 9errano (Caingat 's. 7L3C% >.3. 7o. 1;.5/C% March 1/% 2//;D Chua 's. 7L3C% >.3. 7o. 1.ABC/% March 11% 2//;D >la#o 4ellcome 1hils.% 's. 7ag(aisang *mpleyado ng 4ellcome% >.3. 7o. 1.:5.:% March 11% 2//;). 7otably ho$e'er% as $hat the 9upreme Court said in re'ersing 9errano% social +ustice is not based on rigid ormulas set in stone. A e$ months ago a ter enunciating Agabon et al.% the cash e)ui'alent% so to spea(% o the Ibelated due processI rule $as urther clari ied by the 9upreme Court in the more recent en banc case o 8a(a ,ood 1rocessing 's. 1acot et al.% (>.3. 7o. 1;15BC% March 2C% 2//;). -ere% the Court ound the need to ma(e a material distinction as regards the gra'ity o the sanction $hich an employer should be meted in case it 'iolates the employeeQs right to due process. !hus in this recent case% the cash e)ui'alent may be ItemperedI or made Isti erI% depending on the cause or termination. &n other $ords% the 15/%/// indemnity in Agabon% et al.% is not a uni orm amount o indemnity to be applied in all cases o termination or cause $hen there is non 0compliance $ith due process. Clearly then% the Court laid do$n the ollo$ing parameters: (1) i the dismissal is based on +ust cause under Article 2C2 but the employer ailed to comply $ith the notice re)uirement% the sanction to be imposed upon him should be tempered because the dismissal $as% in e ect initiated by an act imputable to the employeeD and (2) i the dismissal is based on authori"ed cause under Article 2C5 but the employer ailed to comply

1AA E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

$ith the notice re)uirement% the sanction should be sti er because the dismissal process $as initiated by the employerQs e#ercise o his management prerogati'e. &n 8a(a ,ood 1rocessing Corp.% a 1;/%/// a$ard $as considered by the 9upreme Court as a Isti erI sanction. )#r!"i6%e Se6'rities )!r..3 8s. NLR) /( 2o. ,FKCEK, 2ov. .F, .EEL Dull backwages, how computed when company has already ceased operations. &n )#r!"i6%e Se6'rities )!r.!rati!" 8s. NLR)" J>. 3. 7o. 1;B:/B% 7o'. 2;% 2//.K% $here the employer 0 the Manila Chronicle 0 had already permanently ceased its operations% ull bac($ages should be computed only up to the date o the closure. !o allo$ the computation o the bac($ages to be based on a period beyond that $ould be an in+ustice to the employer. !his rule holds true e'en i the employer is ound guilty o un air labor practice in dismissing the employee. As held in the case o 1i@@a 0nn2%onsolidated (oods %orporation vs. N+,%% J>.3. 7o. L0B.;51% 2C 8une 1:CC% 1A2 9C3A BB5K% an employer ound guilty o un air labor practice in dismissing his employee may not be ordered so to pay bac($ages beyond the date o closure o business $here such closure $as due to legitimate business reasons and not merely an attempt to de eat the order o reinstatement. P#i%. 7!'r"a%ist I"6. 8s. 0!sJ'e a /( 2o. ,L,L>E, 3ay K, .EEL 0its'&is#i 0!t!rs P#i%s )!r. 8s. )#r's%er P#i%s La&!r U"i!" B Paras /( 2o. ,LBK>B, Gune .C, .EEL SI0E ,ARBY PILIPINAS3 IN).3 et al. v. ALFRE,O AR9UILLA3 et al. 9.R. N!. 143A42. A'-'st 2<3 200: ,ANIEL P. 7AVELLANA3 7R.3 8s. ALBINO BELEN3 a" ALBINO BELEN 8s. ,ANIEL P. 7AVELLANA3 7R. a" 7AVELLANA FAR0S3 IN).3 /.(. 2o. ,B,C,>, 3arch F, .E,E FE LA ROSA3 et. A%. 8s. A0BASSA,OR 1OTEL3 9.R. N!. 1;;0A>3 0ar6# 133 200> BERNAR,INO V. NAVARRO3 8s. P.V. PA7ARILLO LINER3 IN).3 9.R. N!. 1:4:<13 A.ri% 243 200> 6. ,ama-es 0 moral andPor e#emplary

a. 3oral Damages A3!&CL* 222/. 4ill ul in+ury to property may be a legal ground or a$arding moral damages i the court should ind that% under the circumstances% such damages are +ustly due. !he same rule applies to breaches o contract $here the de endant acted raudulently or in bad aith. b. %!emplary Damages A3!&CL* 222:. *#emplary or correcti'e damages are imposed% by $ay o e#ample or correction or the public good% in addition to the moral% temperate% li)uidated or compensatory damages. A3!&CL* 2252. &n contracts and )uasi0contracts% the court may a$ard e#emplary damages i the de endant acted in a $anton% raudulent% rec(less% oppressi'e% or male'olent manner. A3!&CL* 2255. *#emplary damages cannot be reco'ered as a matter o rightD the court $ill decide $hether or not they should be ad+udicated. )ase/ )!%e-i! e Sa" 7'a" 8s. Vi%%as 2s'.ra4 )r'* 8s. NLR) 2Fe&. ;3 20004 0a$!" a" 1!te% Resta'ra"t 2S'.ra4 FA)TS/ 6n 'arious dates starting in 1:C1% petitioner hotel and restaurant hired the 1A respondents. 2ue to the e#piration and non0rene$al o the lease contract or the rented space occupied by the said hotel and restaurant% operations o the business $ere suspended. !he operation o the restaurant $as continued in its ne$ location% $hile $aiting or the construction o a ne$ Mayon -otel Z 3estaurant. 6nly nine o the si#teen employees continued $or(ing in the Mayon 3estaurant at its ne$ site. 0 6n 'arious dates% the 1A employees iled complaints or underpayment o $ages and other money claims against petitioners 0 !he Labor Arbiter a$arded substantially all o respondents< money claims and held that based on the e'idence presented% 8ose a 1o Lam is the o$nerPproprietor o Mayon -otel Z 3estaurant% and is the proper respondent in these cases. 0 7L3C re'ersed labor arbiter<s decision and dismissed all complaints. 0 CA reinstated labor arbiter<s decision ISSUES 1. 467 8ose a 1o Lam should to be held liable as the o$ner o petitioner Mayon -otel Z 3estaurant% and the proper respondent in this case 2. 467 respondents Lo'eres% >uades% Macandog% Atracti'o% Llarena and 7icerio $ere illegally dismissed 5. 467 respondents are entitled to their money claims

1AB E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

1EL, 1. G*9 - !he records o the case belie petitioner 8ose a 1o Lam<s claim that she is merely an o'erseer. 4hile 8ose a 1o Lam claims that it is her daughter% 1acita 1o% $ho o$ns the hotel and restaurant $hen the latter purchased the same% 8ose a ailed to submit the document o sale as allegedly the sale $as only 'erbal although the license to operate said hotel and restaurant is in the name o 1acita $hich% despite our 6rder to 8ose a to present the same% she ailed to comply. 4hile se'eral documentary e'idences $ere submitted by 8ose a $herein 1acita $as named therein as o$ner o the hotel and restaurant% there $ere documentary e'idences also that $ere submitted by 8ose a sho$ing her o$nership o said enterprise 3espondents testi ied that it $as 8ose a $ho e#ercises all the acts and mani estation o o$nership o the hotel and restaurant li(e trans erring employees rom the >reat$all 1alace 3estaurant $hich she and her husband 3oy 1o Lam pre'iously o$nedD it is 8ose a to $hom the employees submit reports% dra$s money or payment o payables and or mar(eting% and attends to Labor &nspectors during ocular inspections. 2. G*9 0 !he records are une)ui'ocal that since petitioner Mayon -otel Z 3estaurant suspended its hotel operations and trans erred its restaurant operations in *li"ondo 9treet% respondents Lo'eres% Macandog% Llarena% >uades and 7icerio ha'e not been permitted to $or( or petitioners. 3espondent Alamares% on the other hand% $as also laid0o $hen the *li"ondo 9treet operations closed% as $ere all the other respondents. 9ince then% respondents ha'e not been permitted to $or( nor recalled% e'en a ter the construction o the ne$ premises at 1eYaranda 9treet and the reopening o the hotel operations $ith the restaurant in this ne$ site. 0 Article 2CA o the Labor Code is clear R there is termination o employment $hen an other$ise 'ona fide suspension o $or( e#ceeds si# months. !he cessation o employment or more than si# months $as patent and the employer has the burden o pro'ing that the termination $as or a +ust or authori"ed cause. 0 *'en a ter si# months o $hat should ha'e been +ust a temporary lay0o % the same respondents $ere still not recalled to $or(. More than three years a ter the supposed ?temporary lay0o %@ the employment o all o the respondents $ith petitioners had ceased% not$ithstanding that the ne$ premises had been completed and the same operated as a hotel $ith bar and restaurant. !his is clearly dismissal R or the permanent se'erance or complete separation o the $or(er rom the ser'ice on the initiati'e o the employer regardless o the reasons there or.

0 4e ind substantial e'idence that petitioners intended the termination to be permanent. ,irst% respondents iled the complaint or illegal dismissal immediately a ter the closure o the hotel operations in 3i"al 9treet% not$ithstanding the alleged temporary nature o the closure o the hotel operations% and petitioners< allegations that the employees assigned to the hotel operations (ne$ about this be orehand. 9econd% in their position paper submitted to the Labor Arbiter% petitioners made no mention o any intent to recall these respondents to $or( upon completion o the ne$ premises. !hird% the 'arious pleadings on record sho$ that petitioners held respondents% particularly Lo'eres% as responsible or mismanagement o the establishment and or abuse o trust and con idence. !he 'ehemence o petitioners< accusation o mismanagement against respondents% especially against Lo'eres% is inconsistent $ith the desire to recall them to $or(. ,ourth% petitioners< memorandum on appeal also a'erred that the case $as iled ?not because o the business being operated by them or that they $ere supposedly not recei'ing bene its rom the Labor Code $hich is true% but because o the act that the source o their li'elihood% $hether legal or immoral% $as stopped on March 51% 1::B% $hen the o$ner o the building terminated the Lease Contract.@ ,i th% petitioners had inconsistencies in their pleadings in re erring to the closure. 9i#th% that petitioners terminated all the other respondents% by not employing them $hen the -otel and 3estaurant trans erred to its ne$ site on 1eYaranda 9treet. &ndeed% in this same memorandum% petitioners re erred to all respondents as ? ormer employees o Mayon -otel Z 3estaurant.@ *'en assuming that the cessation o employment $as merely temporary% it became dismissal by operation o la$ $hen petitioners ailed to reinstate respondents a ter the lapse o si# months% pursuant to Article 2CA. Seri!'s &'si"ess %!sses ! "!t e56'se t#e em.%!$er (r!m 6!m.%$i"- ?it# t#e 6%eara"6e !r re.!rt reJ'ire '" er Arti6%e 2<3 !( t#e La&!r )! e a" its im.%eme"ti"- r'%es &e(!re termi"ati"- t#e em.%!$me"t !( its ?!rEers . &n the absence o +usti ying circumstances% the ailure o petitioners to obser'e the procedural re)uirements set out under Article 2C.% taints their actuations $ith bad aith% especially since they claimed that they ha'e been e#periencing losses in the three years be ore 1::B. *'en assuming that the closure $as due to a reason beyond the control o the employer% it still has to accord its employees some relie in the orm o se'erance pay.

1AC E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

4hile $e recogni"e the right o the employer to terminate the ser'ices o an employee or a +ust or authori"ed cause% the dismissal o employees must be made $ithin the parameters o la$ and pursuant to the tenets o air play. And in termination disputes% the burden o proo is al$ays on the employer to pro'e that the dismissal $as or a +ust or authori"ed cause. 4here there is no sho$ing o a clear% 'alid and legal cause or termination o employment% the la$ considers the case a matter o illegal dismissal. Hnder these circumstances% the a$ard o damages $as proper. As a rule% moral damages are reco'erable $here the dismissal o the employee $as attended by bad aith or raud or constituted an act oppressi'e to labor% or $as done in a manner contrary to morals% good customs or public policy. 5. G*9% 1etitioners ailed to submit the pertinent employee iles% payrolls% records% remittances and other similar documents $hich $ould sho$ that respondents rendered $or( entitling them to payment or o'ertime $or(% night shi t di erential% premium pay or $or( on holidays and rest day% and payment o these as $ell as the C6LA and the 9&L1. By choosing not to ully and completely disclose in ormation and present the necessary documents to pro'e payment o labor standard bene its due to respondents% petitioners ailed to discharge the burden o proo . &ndeed% petitioners< ailure to submit the necessary documents $hich as employers are in their possession% inspite o orders to do so% gi'es rise to the presumption that their presentation is pre+udicial to its cause. 0 !he cost o meals and snac(s purportedly pro'ided to respondents cannot be deducted as part o respondents< minimum $age. 3espondents $ere not inter'ie$ed by the 26L* as to the )uality and )uantity o ood appearing in the applications o petitioners or acility e'aluation prior to its appro'al to determine $hether or not respondents $ere indeed gi'en such (ind and )uantity o ood. Also% there $as no e'idence that the )uality and )uantity o ood in the 6rders $ere 'oluntarily accepted by respondents. *'en granting that meals and snac(s $ere pro'ided and indeed constituted acilities% such acilities could not be deducted $ithout compliance $ith certain legal re)uirements. !he employer simply cannot deduct the 'alue rom the employeeQs $ages $ithout satis ying the ollo$ing: (a) proo that such acilities are customarily urnished by the tradeD (b) the pro'ision o deductible acilities is 'oluntarily accepted in $riting by the employeeD and (c) the acilities are charged at air and reasonable 'alue.

More important% ood or snac(s or other con'enience pro'ided by the employers are deemed as supplements i they are granted or the con'enience o the employer. !he criterion in ma(ing a distinction bet$een a supplement and a acility does not so much lie in the (ind ( ood% lodging) but the purpose. Considering% there ore% that hotel $or(ers are re)uired to $or( di erent shi ts and are e#pected to be a'ailable at 'arious odd hours% their ready a'ailability is a necessary matter in the operations o a small hotel% such as petitioners< business. !he deduction o the cost o meals rom respondents< $ages% there ore% should be remo'ed. !he ;L o the gross income o the establishment cannot be considered as part o the respondents< $ages. Although called pro it share% such is in the nature o share rom ser'ice charges charged by the hotel. 1etitioners themsel'es ha'e admitted that the establishment employs ?more or less si#teen employees%@ there ore they are estopped rom claiming that the applicable minimum $age should be or ser'ice establishments employing 1; employees or less. !he employer cannot e#empt himsel rom liability to pay minimum $ages because o poor inancial condition o the company. !he payment o minimum $ages is not dependent on the employer<s ability to pay. Disposition 1etition is denied. !he case is 3*MA72*2 to the Labor Arbiter or the 3*C6M1H!A!&67 o the total monetary bene its a$arded and due to the employees concerned in accordance $ith the decision. P#i%. Em.%!$ Ser8i6es a" Res!'r6es I"6. 8s. Parami! 2OFW )!"tra6t4 /( 24. ,LLKBH, April ,F, .EEL AR0AN,O ,AVI,3 8s. NATIONAL FE,ERATION OF LABOR UNION a" 0ARIVELES APPAREL )ORPORATION3 /.(. 2os. ,LB.H> O ,LB.K, K., April .,, .EEC VIR9ILIO SAPIO VS. UN,ALO) )ONSTRU)TION a" @!r EN9R. )IRILO N,ALO)3 /.(. 2o. ,FFE>L, 3ay .., .EEB )ELEBES 7APAN FOO,S )ORPORATION3 8s. SUSAN YER0O3 et. A%. /.(. 2o. ,KFBFF, 4ctober ., .EEC BERNAR,O B. 7OSE3 7R.3 P1ILS.3 IN). a" 8s. 0I)1AEL0AR 0I)1AEL0AR

1A: E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

S1IPPIN9 SERVI)ES3 IN).3 ,HCHEH, 2ovember .K, .EEC

9 .(. 2o.

reasonable termination.

time

rom

e ecti'e

date

9ENESIS TRANSPORT SERVI)E3 IN). a" RELY L. 7ALBUNA3 VS. UNYON N9 0ALAYAN9 0AN99A9AWA N9 9ENESIS TRANSPORT 2U009T43 a" 7UAN TAROY3 /.(. 2o. ,B.,,L, April F, .E,E 1ILTON 1EAVY EFUIP0ENT )ORPORATION a" PETER LI03 8s. ANANIAS P. ,Y3 /.(. 2o. ,HLBHE, Debruary ., .E,E SAN 0I9UEL PROPERTIES P1ILIPPINES3 IN).3 8s. 9WEN,ELLYN ROSE S. 9U)ABAN3 9.R. N!. 1A3><23 7'%$ 1<3 2011 20ORAL ,A0A9ES4 ABOSTA S1IP0ANA9E0ENT )ORPORATION3 8s. NATIONAL LABOR RELATIONS )O00ISSION 2FIRST ,IVISION4 a" ARNULFO R. FLORES3 9.R. N!. 1:32A23 7'%$ 2;3 2011 . Se.arati!" Pa$ Se.arati!" .a$0 $ill be gi'en 5/ days a ter the ser'ice o notice o the termination. !his is so because it is only then that they are considered separated rom ser'ice. \ &n case o termination due to installation o labor0 sa'ing de'ices or redundancy% the $or(er a ected thereby shall be entitled to a separation pay e)ui'alent to at least one month pay or at least one month pay or e'ery year o ser'ice% $hiche'er is higher. \ &n case o retre"6#me"t t! .re8e"t %!sses a" i" 6ases !( 6%!s're !r 6essati!" !( !.erati!"s !( esta&%is#me"t !r '" ertaEi"- "!t 'e t! seri!'s &'si"ess %!sses !r (i"a"6ia% re8erses % the separation pay shall be e)ui'alent to one month pay or at least _ month pay or e'ery year o ser'ice% $hiche'er is higher. A raction o at least A months shall be considered one $hole year. &n cases o 6%!s're !r 6essati!" !( !.erati!"s !( esta&%is#me"t 'e t! seri!'s &'si"ess %!sses or inancial re'erses% there shall be no separation pay. & the termination is brought about by the completion o the contract or phase thereo % no prior notice is re)uired. & the termination is brought about by the ailure o an employee to meet the standards o the employer i" t#e 6ase !( .r!&ati!"ar$ em.%!$me"t% it shall be su icient that a $ritten notice is ser'ed to the employee $ithin

Dour conte!ts of separation pay# 1.As employer<s obligation 0 in cases o legal termination due to authori"ed causes under Art 2C5 and 2C. 2.As inancial assistance 0 as an act o social +ustice% e'en in cases o legal dismissal under Art 2C2. 1ursuant to the principle o discerning compassion. 5.&n lieu o reinstatement o illegal dismissal cases $here the employee is ordered reinstated but reinstatement is no longer easible. ..As an employment bene its granted under CBA or company policy. 0 this does not arise rom legal or illegal dismissal but 'oluntary mode o lea'ing one<s employment such as resignation. )ase/ 2,is6er"i"- )!m.assi!" ,!6tri"e4 I!he 9ocial 8ustice policy mandates a compassionate attitude to$ard the $or(ing class in its relation to management. &n calling or the protection to labor% the Constitution does not condone $rongdoing by the employee% it ne'ertheless urges a moderation o the sanctions that may be applied to him in the light o the many disad'antages that $eigh hea'ily on him li(e an albatross on his nec(. E56e.ti!"/ Se.arati!" .a$ as a (i"a"6ia% assista"6e s#a%% &e a%%!?e as a meas're !( s!6ia% I'sti6e !"%$ i" t#!se i"sta"6es ?#ere t#e em.%!$ee 8a%i %$ ismisse (!r 6a'ses !t#er t#a" seri!'s mis6!" '6t !r t#!se re(%e6ti"- !" #is m!ra% 6#ara6ter. PL,T 8s. NLR) 21:4 S)RA :;14 2Fe&. 2<3

P#i%. )!mmer6ia% I"tQ%. Ba"E 8s. A&a 200A4

,IVERSIFIE, SE). IN).3 VS. ALI)IA V. BAUTISTA3 9.R. N!. 1A22343 A.ri% 1A3 2010 SAR9ASSO )ONSTRU)TION a" ,EVELOP0ENT )ORPORATION3 8s. NLR) a" 9OR9ONIO 0ON9)AL39.R. N!. 1:411<3 Fe&. >3 2010 A9RI)ULTURAL AN, IN,USTRIAL SUPPLIES )ORPORATION3 et.a%.% 8s. 7UEBER P. SIA=AR a" NLR) 3 9.R. N!. 1;;>;03 A'-'st 2A3 2010 e. Att!r"e$Qs Fees 2Arti6%e 1114

1B/ E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

A3!&CL* 22/C. &n the absence o stipulation% attorneyQs ees and e#penses o litigation% other than +udicial costs% cannot be reco'ered% e#cept: (1) 4hen e#emplary damages are a$ardedD (2) 4hen the de endantQs act or omission has compelled the plainti to litigate $ith third persons or to incur e#penses to protect his interestD VI. WAIVER3 FUIT)LAI0 AN, )O0PRO0ISE A9REE0ENTS a. Nat're &. Pres'm.ti!" 6. I"ter.retati!" a" e"(!r6ea&i%it$ )ase/ ARNAL,O 9. 9ABUNAS3 SR.3 8s. S)AN0AR 0ARITI0E et.a%. 9.R. N!. 1<<:3; 3 ,e6em&er 1A3 2010 )AREER P1ILIPPINES S1IP 0ANA9E0ENT3 IN).3 8s. 9ERONI0O 0A,7US3 9.R. N!. 1<:1A<3 N!8em&er 223 2010 VII. PRES)RIPTIVE PERIO, a. F!r I%%e-a% ,ismissa% Art. 114: )i8i% )! e o action accrued.

%ase: )tandard %hartered Aan! Employees 9nion vs. %onfessor" F:I )%,7 I>= 5:<<;6 e. CCB ,reedom o Association and 1rotection o the 3ight to 6rgani"e Con'ention% 1:.C 2. Pre(erre 0! es !( ,is.'te Sett%eme"t a. Se6ti!" 33 Art. VIII 1><; )!"stit'ti!" &. Arti6%e 211 2a4 6. Art. 2A0 2e4 . Art. 2A1 e. Art. 2:0 2. La&!r Or-a"i*ati!" a. R!%e !( Tra e U"i!"ism a" U"i!"ism E"8isi!"e 2Arti6%es 2113& B 64 &. La&!r Or-a"i*ati!" 2Arti6%es 212 2-4 6. Le-itimate La&!r Or-a"i*ati!" WArti6%es 2#4X 3. W!rEersQ E"%i-#te"me"t a. Arti6%e 211 2 4 &. Arti6%e 2;; 2a4 6. Arti6%e 241 2!4 4. ,is.'te Sett%eme"t 0a6#i"er$ a. Arti6%e 211 2e4 &. Arti6%e 213 6. Arti6%e 21; . Arti6%e 22: e. Arti6%e 12< (. Arti6%e 12> A. I" 'stria% Pea6e a. Arti6%e 211 2(4 :. W!rEersQ Parti6i.ati!" ,e6isi!" 0aEi"Pr!6ess a. Art. VIII3 Se6. 33 1><; )!"stit'ti!" &. Arti6%e 211 2-4 6. Arti6%e 2AA

- . years rom cause

P1ILIPPINE LON9 ,ISTAN)E TELEP1ONE )O0PANY GPL,TH3 8s. ROBERTO R. PIN9OL3 9.R. N!. 1<2:223 Se.tem&er <3 2010 &. ULP 0 1 year rom cause o action accrued 6. 0!"e$ )%aims 0 5 years rom cause o action accrued +ar Asia I"6. 8s. 0ari! )!r!"a et.a%. 9.R. 1A4><A2A'- 243 20044 Te5!" 0a"'(a6t'ri"- et. a%. 8s. 0i%%e"a 9R N!. 1413<03 A.ri% 143 2004 RI91T TO SELF-OR9ANI=ATION/ PRIN)IPLES AN, LAWS 1. Ri-#t t! Se%(-Or-a"i*ati!" a. )!"stit'ti!" Arti6%e VIII3 Se6. 3 a" < b. Articles 2.5% 2..% 2.;% 211(a) and 211 (b)% 212 (g) %ase: 9)T (aculty 9nion vs. Aitonio 5Nov. =;" =???6 c. Hni'ersal 2eclaration o -uman 3ights (1reamble% Arts. 2 and 25 (.) &nternational Co'enant on *conomic% 9ocial and Cultural 3ights (Arts. 2% C% 22) d. &L6 Con'ention 7o. .C Arts. 2 and 11 VIII.

;. Tri.artism a. Arti6%e 2;A <. Limite La&!r I"I'"6ti!" 2Arti6%e 2A44 a. E56e.ti!"s/ Arti6%e 21< a" 2:4 >. Em.%!$ee )!8era-e a. Arti6%e 243 &. Arti6%e 244 6. Arti6%e 24A

1B1 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

)ases/ Ta-a$ta$ 1i-#%a" s 8s. T1EU 33>A S)RA :>>3 220034 UST Fa6'%t$ U"i!" 8s. Bit!"i! 2N!8. 1:3 1>>>4 Pa.er I" 'stries 8s. Le-'esma2A.ri% 123 20004 10. S6!.e !( Or-a"i*ati!" a. Arti6%es 243 t! 24: &. Arti6%e 2;; 264 Ri-#t t! Se%(-

0etr!%a& I" 'stries 8s. )!"(ess!r 2A4 S)RA 1<3 21>>:4 )ai"ta 8s. )ai"ta3 4<> S)RA 4:< 2200:4 Sams!" 8s. NLR)3 330 S)RA 4:0 220004 Pa.er I" 'stries )!r.. !( t#e P#i%i..i"es 8s. La-'esma3 9. R. N!. 101;3<3 A.ri% 123 2000 )1ARLITO PESARAN,A3 8s. BA9AN9A PLYWOO, )ORPORATION a" 1U,SON )1UA3 9.R. N!. 1A>A;;3 0a$ 33 200: TUNAY NA PA9+A+AISA N9 0AN99A9AWA SA ASIA BREWERY3 8s. ASIA BREWERY3 IN).3 9.R. N!. 1:202A3 A'-'st 33 2010 &. 6. Em.%!$ees !( i"ter"ati!"a% !r-a"i*ati!"s )!!.erati8e 0em&ers

)ases/ (eyes vs. Trajano, .EC $*(A LBL +,CC."an American 7orld Airways Inc. vs. "an American %mployees Association , .K $*(A ,.E. +,CHC0nion of $upervisors +(&- 2AT0 vs. $41%, ,EC $*(A ,>C +,CB,*entral 2egros vs. $41%, .E, $*(A FBL +,CC,11. a. 12. U"%a?('% A6ts Arti6%es 24:3 24<3 24>

W!rEers ?it# Ri-#t A%% Em.%!$ees a.1 Arti6%e 243 &.2 Arti6%e 2;; 26 4 )ases/ D%0 Dr. 2icanor (eyes 3edical Doundation, Inc vs. Trajano, ,F. $*(A K.F Jictoriano vs. %li:alde 7orkers 0nion, FC $*(A FL +,CKLPapatiran sa 3eat and *anning Division vs. *alleja, ,H. $*(A >HK +,CBB2. S'.er8is!rs a.1 Arti6%e 24A &.2 Arti6%e 212 2m4

)ases/ &enguet %lectric *ooperatives, Inc. vs. *alleja, ,BE $*(A KLE +,CBC*entral 2egros %lectric *ooperative vs. D41%, .E, $*(A FBL +,CC,. N!"-Em.%!$ees 2434 2Art.

14. W!rEers ?it# J'a%i(ie ri-#ts i. Am&'%a"t3 i"termitte"t a" eti"era"t ?!rEers 2Art. 2434 ii.9!8er"me"t Em.%!$ees 2Art. 2444 a. E5te"t a" S6!.e &. A&s!%'te ,isJ'a%i(i6ati!" LABOR OR9ANI=ATIONS 1. ,e(i"iti!" 1.a Arti6%e 212 -3 #3 a" i 1.& Se6ti!" 13 2664 R'%e 13 ,OLE ,.O. N!. 4003 Series !( 2003 1.6 P'r.!se 2Art. 2434 2.a ReJ'ireme"ts a" Pr!6e 're ,OLE ,.O. N!. 40-03 Series !( 2003 )ases/ Tagaytay 8ighlands +supra1aguna Auto "arts vs. $41%, LFK $*(A K>E +.EEF2.& )!"stit'ti!"a%it$ )ase / PAFLU 8s. SOLE 2; S)RA 40 2.6 0! es !( Re-istrati!" 3.& R'%es 14 B 1A ,OLE ,.O. N!. 40-03 Series !( 2003

)ases/ Dranklin &aker *o. vs. Trajano ,FK $*(A L,H $anta (osa *oca *ola "lant %mployees 0nion vs. *oca *ola &ottlers "hilippines, >,. $*(A L>K +.EEK"e9aranda vs. &aganga "lywood corp., LBC $*(A CF +.EEH3. 4. )ase/ +,CC,A%ie"s 2Arti6%e 2:>4 ReJ'isites Se6'rit$ -'ar s 2Art. 24A4 3%(A1*4 J$. $41% ,CK $*(A .KF

13. W!rEers ?it#!'t Ri-#t a. 0a"a-eria% a" )!"(i e"tia% Em.%!$ees )ase/

1B2 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

ELE)TRO0AT 0ANUFA)TURIN9 a" RE)OR,IN9 )ORPORATION3 8s. 1ON. )IRIA)O LA9UN=A,3 et.a%. 3 9. R. N!. 1;2:>>3 7'%$ 2;3 2011 2)ONSTITUTIONALITY4 3.6. REPUBLI) A)T NO. >4<1 )ases/ *oastal $ubic , etc. vs. D41%, FEK $*(A >EE +.EEH$3* 3andaue vs. 3andaine, etc., LHK $*(A ,EK +.EEF2. E((e6t !( N!"-Re-istrati!" )ase/ $ugbuanon (urual &ank, Inc. vs. 1aguesma, >.L $*(A L.F +.EEE3. )a"6e%%ati!" !( )erti(i6ate !( Re-istrati!" 3.a Arti6%e 23>3 10: 241 %ast .ar. )ases/ Dong $%ung Inc. vs. &1( et.al., /.(. 2o. ,H.>FH, April ,L, .EEB Air "hils *orp vs. &1(, LC. $*(A .L> +.EEE1aguna Auto "arts vs. $41%, +supraTagaytay 8ighlands +supra-

T1E 1ERITA9E 1OTEL 0ANILA3 a6ti"- t#r!'-# its !?"er3 9RAN, PLA=A 1OTEL )ORPORATION3 8s. NATIONAL UNION OF WOR+ERS IN T1E 1OTEL3 RESTAURANT AN, ALLIE, IN,USTRIES-1ERITA9E 1OTEL 0ANILA SUPERVISORS )1APTER 2NUW1RAIN-110S)43 9.R. N!. 1;<2>:3 7a"'ar$ 123 2011 Facts: 1etitioner iled a 1etition or Cancellation o 3egistration o respondent% on the ground o the non0 submission o the said documents. 7e'ertheless% the certi ication election pushed through and the respondent emerged as the $inner. 1etitioner iled a 1rotest $ith Motion to 2e er Certi ication o *lection 3esults and 4inner% stating that the certi ication election held on 8une 25% 2/// $as an e#ercise in utility because% once respondent<s registration is cancelled% it $ould no longer be entitled to be certi ied as the e#clusi'e bargaining agent o the super'isory employees. Mean$hile% respondent iled its Ans$er to the petition or the cancellation o its registration and prayed or the dismissal o the petition or the ollo$ing reasons: (a) petitioner is estopped rom )uestioning respondent<s status as a legitimate labor organi"ation as it had already recogni"ed respondent as such during the preelection con erencesD (b) petitioner is not the party0in0interest% as the union members are the ones $ho $ould be disad'antaged by the non0submission o inancial reportsD (c) it has already complied $ith the reportorial re)uirements% ha'ing submitted its inancial statements or 1::A% 1::B% 1::C% and 1:::% its updated list o o icers% and its list o members or the years 1::;% 1::A% 1::B% 1::C% and 1:::D (d) the

petition is already moot and academic% considering that the certi ication election had already been held% and the members had mani ested their $ill to be represented by respondent. !he Med0Arbiter dismissed the protest and certi ied respondent as the sole and e#clusi'e bargaining agent o all super'isory employees.1etitioner appealed to the 26L* 9ecretary $as dismissed. Motion or reconsideration $as also denied. &n the meantime% 3egional 2irector Ale# *. Maraan (3egional 2irector Maraan) o 26L*0 7C3 inally resol'ed the petition or cancellation o registration. 4hile inding that respondent had indeed ailed to ile inancial reports and the list o its members or se'eral years% he% nonetheless% denied the petition% ratiocinating that reedom o association and the employees< right to sel 0organi"ation are more substanti'e considerations. -e too( into account the act that respondent $on the certi ication election and that it had already been certi ied as the e#clusi'e bargaining agent o the super'isory employees. &n 'ie$ o the oregoing% 3egional 2irector MaraanR$hile emphasi"ing that the non0 compliance $ith the la$ is not 'ie$ed $ith a'orR considered the belated submission o the annual inancial reports and the list o members as su icient compliance thereo and considered them as ha'ing been submitted on time. 1etitioner appealed the decision to the BL3 but 2irector -ans Leo Cacdac inhibited himsel rom the case because he had been a ormer counsel o respondent. &n 'ie$ o 2irector Cacdac<s inhibition% 26L* 9ecretary 9to. !omas too( cogni"ance o the appeal and she dismissed the appeal% holding that the constitutionally guaranteed reedom o association and right o $or(ers to sel 0 organi"ation out$eighed respondent<s noncompliance $ith the statutory re)uirements to maintain its status as a legitimate labor organi"ation. 1etitioner iled a motion or reconsideration but $as denied. 1etitioner iled a petition or certiorari $ith the CA% raising the issue o $hether the 26L* 9ecretary acted $ith gra'e abuse o discretion in ta(ing cogni"ance o the appeal and a irming the dismissal o its petition or cancellation o respondent<s registration but $as also denied. -ence% this petition. Iss'es a" R'%i"-/ 1. 4hether or not the Labor 9ecretary has no +urisdiction to re'ie$ the decision o the 3egional 2irector in a petition or cancellation since it is con erred by la$ to the Bureau o Legal 3elations. 8urisdiction to re'ie$ the decision o the 3egional 2irector lies $ith the Bureau o Legal 3elations (BL3). &n this case% the appeal $as iled by petitioner $ith the BL3% $hich% undisputedly% ac)uired +urisdiction o'er the case. 6nce +urisdiction is

1B5 E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

ac)uired by the court% it remains $ith it until the ull termination o the case. !hus% +urisdiction remained $ith the BL3 despite the BL3 2irector<s inhibition. 4hen the 26L* 9ecretary resol'ed the appeal% she mere%$ ste..e i"t! t#e s#!es !( t#e BLR ,ire6t!r and per ormed a unction that the latter could not himsel per orm. 9he did so pursuant to her po$er o super'ision and control o'er the BL3. !his principle $as incorporated in the Administrati'e Code o 1:CB% $hich de ines Isuper'ision and controlI as including the authority to act directly $hene'er a speci ic unction is entrusted by la$ or regulation to a subordinate. Applying the oregoing to the present case% it is clear that the 26L* 9ecretary% as the person e#ercising the po$er o super'ision and control o'er the BL3% has the authority to directly e#ercise the )uasi0+udicial unction entrusted by la$ to the BL3 2irector. !he pro'ision under the Administrati'e Code o 1:CB $hich states% Iin case o the absence or disability o the head o a bureau or o ice% his duties shall be per ormed by the assistant head.I !he pro'ision clearly does not apply considering that the BL3 2irector $as neither absent nor su ering rom any disabilityD he remained as head o the BL3. !hus% to dispel any suspicion o bias% the 26L* 9ecretary opted to resol'e the appeal hersel . 2. 4hether or not the Court o Appeals gra'ely erred in a irming the dismissal o the Cancellation 1etition despite the mandatory and une)ui'ocal pro'isions o the Labor Code and its &mplementing 3ules. &t is undisputed that appellee ailed to submit its annual inancial reports and list o indi'idual members in accordance $ith Article 25: o the Labor Code. -o$e'er% the e#istence o this ground should not necessarily lead to the cancellation o union registration. Article 25: recogni"es the regulatory authority o the 9tate to e#act compliance $ith reporting re)uirements. Get there is more at sta(e in this case than merely monitoring union acti'ities and re)uiring periodic documentation thereo . !he more substanti'e considerations in'ol'e the constitutionally guaranteed reedom o association and right o $or(ers to sel 0organi"ation. Also in'ol'ed is the public policy to promote ree trade unionism and collecti'e bargaining as instruments o industrial peace and democracy. An o'erly stringent interpretation o the statute go'erning cancellation o union registration $ithout regard to surrounding circumstances cannot be allo$ed. 6ther$ise% it $ould lead to an unconstitutional application o the statute and emasculation o public policy ob+ecti'es. 4orse% it can render nugatory the protection to labor and social +ustice clauses that per'ades the Constitution and the Labor Code. Moreo'er% submission o the

re)uired documents is the duty o the o icers o the union. &t $ould be unreasonable or this 6 ice to order the cancellation o the union and penali"e the entire union membership on the basis o the negligence o its o icers. !hese pro'isions gi'e the 3egional 2irector ample discretion in dealing $ith a petition or cancellation o a union<s registration% particularly% determining $hether the union still meets the re)uirements prescribed by la$. It is s'((i6ie"t t! -i8e t#e Re-i!"a% ,ire6t!r %i6e"se t! treat t#e %ate (i%i"- !( reJ'ire !6'me"ts as s'((i6ie"t 6!m.%ia"6e ?it# t#e reJ'ireme"ts !( t#e %a?. A ter all% the la$ re)uires the labor organi"ation to submit the annual inancial report and list o members in order to 'eri y i it is still 'iable and inancially sustainable as an organi"ation so as to protect the employer and employees rom raudulent or ly0by0 night unions. 4ith the submission o the re)uired documents by respondent% the purpose o the la$ has been achie'ed% though belatedly. 3.A. 7o. :.C1 amended Article 25: to read: A3!. 25:. >rounds or Cancellation o Hnion 3egistration.R!he ollo$ing may constitute grounds or cancellation o union registration: (a) Misrepresentation% alse statement or raud in connection $ith the adoption or rati ication o the constitution and by0la$s or amendments thereto% the minutes o rati ication% and the list o members $ho too( part in the rati icationD (b) Misrepresentation% alse statements or raud in connection $ith the election o o icers% minutes o the election o o icers% and the list o 'otersD (c) Foluntary dissolution by the members. 3.A. 7o. :.C1 also inserted in the Labor Code Article 2.20A% $hich pro'ides: ART. 242-A. Re.!rt!ria% ReJ'ireme"ts.R!he ollo$ing are documents re)uired to be submitted to the Bureau by the legitimate labor organi"ation concerned: (a) &ts constitution and by0la$s% or amendments thereto% the minutes o rati ication% and the list o members $ho too( part in the rati ication o the constitution and by0la$s $ithin thirty (5/) days rom adoption or rati ication o the constitution and by0 la$s or amendments theretoD (b) &ts list o o icers% minutes o the election o o icers% and list o 'oters $ithin thirty (5/) days rom electionD (c) &ts annual inancial report $ithin thirty (5/) days a ter the close o e'ery iscal yearD and (d) &ts list o members at least once a year or $hene'er re)uired by the Bureau. Fai%'re t! 6!m.%$ ?it# t#e a&!8e reJ'ireme"ts s#a%% "!t &e a -r!'" (!r 6a"6e%%ati!" !( '"i!"

1B. E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

re-istrati!" &'t s#a%% s'&Ie6t t#e erri"- !((i6ers !r mem&ers t! s's.e"si!"3 e5.'%si!" (r!m mem&ers#i.3 !r a"$ a..r!.riate .e"a%t$. &L6 Con'ention e#pressed its opinion that the dissolution o a union% and cancellation o registration or that matter% in'ol'e serious conse)uences or occupational representation. &t has% there ore% eeme it .re(era&%e i( s'6# a6ti!"s ?ere t! &e taEe" !"%$ as a %ast res!rt a" a(ter e5#a'sti"- !t#er .!ssi&i%ities ?it# %ess seri!'s e((e6ts !" t#e !r-a"i*ati!". 4. Ri-#ts a" )!" iti!"s !( 0em&ers#i. 2Arti6%es 2413 24> 2a4 B 22: 4.a Fees a" )!%%e6ti!" 2Arts. 24< 2e43 113 2&43 241 2m3"3 !4 )ase/ Del "ilar Academy et.al. vs. Del "Ilar Academy %mployees 0nion, /.(. ,KE,,., April >E, .EEB 4.& Fi"a"6ia% Re.!rti"4.6 E%e6ti!" O((i6ers a" F'a%i(i6ati!"s 4. 0et#! !( E%e6ti!" 4.e A missi!" !( 0em&ers B Rete"ti!" !( 0em&ers#i. 4.( ,is&'rseme"t !( U"i!" F'" s 4.- )!m.e"sati!" !( O((i6ers 4.# Re.!rti"4.i S.e6ia% Assessme"ts )ases/ A&$ *&2 $upervisors %% 0nion vs. A&$ *&2 +3arch ,,, ,CCC/abriel vs. $41% +3arch ,H, .EEEA. Ri-#ts !( Le-itimate La&!r Or-a"i*ati!"s 2Arti6%es212 2#43 2423 212 I3 RA >4<14 A.a Re.rese"tati!" A.& Bar-ai"i"- A-e"t A.6 Fi"a"6ia% Stateme"ts A. Pr!.ert$ Ri-#ts A.e Pers!"a%it$ t! s'e a" &e s'e A.( Ta5 E5em.ti!"s A.- Ot#er A6ti8ities )ases/ *ornista vs. 21(* , FEL $*(A HFC +.EEH"hil. Diamond 8otel vs. 3anila Diamond 8otel %%$ 0nion, LCL $*(A ,CF +.EEH:. F!rei-" A6ti8ities 2Arti6%es 2:>-2;14 :.a A%ie" Pr!#i&iti!" :.& F!rei-" Assista"6e ;. A((i%iati!" !( U"i!"s ;.a P'r.!se 2Art. 211 W6X4 ;.& Pr!6e 're 2Se6. 23 RA >4<14

ELE)TRO0AT 0ANUFA)TURIN9 a" RE)OR,IN9 )ORPORATION3 8s. 1ON. )IRIA)O LA9UN=A,3 et.a%. 3 9. R. N!. 1;2:>>3 7'%$ 2;3 2011 2)ONSTITUTIONALITY4 ;.6 S'.er8is!r-Ra"E B Fi%e U"i!" A((i%iati!" 2Art. 24A3 2433 234 2a4 SA0A1AN9 0AN99A9AWA SA )1ARTER )1E0I)AL SOLI,ARITY OF UNIONS IN T1E P1ILIPPINES FOR E0POWER0ENT AN, REFOR0S 2S0))-SUPER43 =A)ARRIAS 7ERRY VI)TORIO VS. )1ARTER )1E0I)AL AN, )OATIN9 )ORPORATION3 9.R. N!. 1:>;1;3 0ar6# 1:3 2011 ;. L!6a% U"i!" ,isa((i%iati!" )ases/ Dilipino "ipe vs. 21(*, >,B $*(A HB +2ov. ,H, ,CCC"hil. $kylanders vs. 21(*,>K> $*(A >HC +Gan. >,, .EE.Adamson Inc. vs. *I(, ,.K $*(A .HB +,CCC3alayang $amahan ng 3ga 3anggagawa sa /reenfiled vs. (amos, >.H $*(A L.B +.EEEAPPROPRIATE BAR9AININ9 UNIT 1. Bar-ai"i"- U"it ,e(i"e 1.a Art. 2AA 1.& Se6ti!" >3 RA >4<1 2. Fa6t!rs-U"it !( ,etermi"ati!" )ases/ 0.". vs. Derrer *alleja, .,, $*(A LF, +,CC.$3* vs. 1aguesma, .>H $*(A FCF +,CCL&enguet *onsolidated Inc. vs. &obok 1umberjack Asso., ,E> "hil. ,,FE +,CFB"hil. Diamond 8otel vs. 3anila Diamond 8otel %%$ 0nion+supraDe la $alle 0niversity vs. D$0%A, >>E $*(A >H +.EEE$3* etc. vs $3* etc. LHK$*(A ,EK +.EEF-

)ERTIFI)ATION ELE)TION 1. P'r.!se *ase# "ort 7orkers 0nion of the "hils. 1aguesma, .EK $*(A >.C +,CC.(eyes v. Trajano, .EC $*(A LBL +C.2. 0et#! s !( Esta&%is#i"- 0aI!rit$ Stat's

vs.

1B; E 1 a g e

USPF LABOR RELATIONS REVIEW NOTES 2013 based on the outline of Atty. Demegillo
Compiled by: Clint M. Maratas LLB

2.a )erti(i6ati!" E%e6ti!" 2)!"se"t 8s. R'"O(( E%e6ti!"4 2.& V!%'"tar$ Re6!-"iti!" 2.6 Em.%!$er )erti(i6ati!" R'%e VII3 ,.O. N! 40-03 2. N! ,ire6t )erti(i6ati!" *ases# *olgate "almolive "hils vs. 4ple, ,H> $*(A >.> +,CBB7arren 3anufacturing 7orkers 0nion v. &ureau of 1abor (elations, ,FC $*(A >BK +BBAlgire v. De 3esa, .>K $*(A HLK +CL$amahang 3anggagawa sa "reme! v $ecretary of 1abor .BH $*(A HC. +CB2.e S'&sta"tia% S'..!rt *ase# $t Games $chool, v $t Games $chool, LKH $*(A ,. +EF2.( E((e6t Wit# ra?a% *ase# Tagaytay 8ighlands international /old *lub. Inc. v. Tagaytay 8ighlands %mployees 0nion, >CF $*(A HCC +.EE>3. Petiti!" (!r )erti(i6ati!" E%e6ti!" 3.a R'%e VIII3 ,O N!. 40-03 3.& U"i!" as t#e Petiti!"er *ase# $3* vs. $3* , LHK $*(A ,EK +.EEF3.&.1 Or-a"i*e Esta&%is#me"t Art. 2A: 2Se6. 103 R.A. >4<14 a. F!rm !( Petiti!" &. S'&sta"tia% S'..!rt ReJ'ireme"t 3.&.2 U"!r-a"i*e Esta&%is#me"t 2Arti6%es 212 2#43 2A;3 242 2&4 a. ReJ'ireme"ts &. 0a" at!r$ E%e6ti!" *ase# $ugbuanon (ural &ank, Inc. v. 1aguesma, >.L $*(A L.F +.EEE3.6 Em.%!$er as t#e Petiti!"er *ase# 2otre Dame