Labor Case Digest - Final Draft

University of San Carlos
School of Law and Governance

LABOR STANDARDS
Midterm Case Diest Com!ilation
S"#mitted #y$
Red %ordan C& 'asion
Ta#le of Contents
Siner Sewin Machine vs& NLRC G&R& No& ()*+, -)(().
///////////////////////////////////& 0
Manila Golf Cl"# vs& 1AC G&R& No& 02(23 -)((2.
////////////////////////////////////////& ,
4ncyclo!edia Britanica vs& NLRC G&R& No& 3,+(3 -)((0.
///////////////////////////////////& 3
Car"ncon vs& S"nlife G&R& No& ))3+30 -)((,.
//////////////////////////////////////// (
Ramos vs& CA G&R& No& )52*62 -5++5.
/////////////////////////////////////////////& )+
Son7a vs& ABS8CBN G&R& No& )*3+6) -5++2.
////////////////////////////////////////// ))
La7aro vs& Social Sec"rity Commission G&R& No& )*3562 -5++2.
///////////////////////////////&& )5
'hil& Glo#al Comm& vs& De 9era G&R& No& )6,5)2 -5++6.
///////////////////////////////////&& )*
ABS8CBN vs& Na7areno G&R& No& )02)60 -5++0.
//////////////////////////////////////// )2
:rancisco vs& NLRC G&R& No& ),++3, -5++0.
////////////////////////////////////////// )0
Noales et& al& vs& Ca!itol Medical Center et& al& G&R& No& )25056 -5++0.
/////////////////////////// )3
Coca8Cola Bottlers 'hils& vs& Dr& Climaco G&R& No& )2033) -5++,.
//////////////////////////////& )(
Calam#a Medical Center vs& NLRC et& al& G&R& No& ),0232 -5++3.
//////////////////////////////&&& 5+
4scasinas et& al& vs& Shanri8la G&R& No& ),335, -5++(.
//////////////////////////////////// 55
Ton;o vs& The Man"fact"rer<s Life 1ns"rance Co&= 1nc& G&R& No& )0,055 -5++3.
//////////////////////& 52
Caon %r& vs& Be"alos G&R& No& ),(253 -5+)).
////////////////////////////////////////&& 50
Ato; Bi >ede Com!any vs& Gison G&R& No& )0(6)+ -5+)).
/////////////////////////////////& 53
Sem#lante et al&= vs& Co"rt of A!!eals= et al& G&R& No& )(0250 -5+)).
///////////////////////////// *+
La#or Standards Case Diest 'ae 2
%ose Mel Bernarte vs& 'BA= %ose 4mman"el 4ala= and 'erry Martine7 G&R& No& )(5+32 -5+)).
///////////////& *5
Cesar Lirio vs& >ilmer Genovia G&R& No& )0(,6, -5+)).
///////////////////////////////////&& *2
Charlie %ao vs BBC 'rod"cts Sales 1nc& G&R& No& )0*,++ -5+)5.
//////////////////////////////// *0
Leend ?otel -Manila. vs& Real"yo G&R& No& )6*6)) -5+)5.
/////////////////////////////////&&& *,
Ollendorf vs& A#rahanson G&R& No& )*553 -)()3.
//////////////////////////////////////&&& *3
Del Castillo vs& Richmond G&R& No& L85))5, -)(52.
////////////////////////////////////// 2+
'T @ T vs& NLRC G&R& No& ))3(,3 -)((,.
///////////////////////////////////////////& 2)
D"ncan Asso& Of Detailman8'TG>O vs& GlaAo G&R& No& )05((2 -5++2.
/////////////////////////// 2*
City of Manila v& La"io G&R& No& ))3)5, -5++6.
///////////////////////////////////////&& 26
Star 'a!er Cor!& v& Sim#ol G&R& No& )02,,2 -5++0.
////////////////////////////////////// 2,
Del Monte 'hils& 9& 9elasco G&R& No& )6*2,, -5++,
////////////////////////////////////// 2(
Bras"e"i vs& 'hili!!ine Airlines G&R& No& )03+3) -5++3.
////////////////////////////////// 6+
1law at B";lod n Manaawa vs& NLRC G&R& No& ()(3+ -)(().
//////////////////////////////& 65
4m!loyers Confederation of the 'hils& vs& N>'C G&R& No& (0)0( -)(().
////////////////////////// 62
Ma#e7a vs& NLRC G&R& No& ))36+0 -)((,.
/////////////////////////////////////////// 60
%oy Brothers 1nc& vs& N>'C G&R& No& )55(*5 -)(().
/////////////////////////////////////& 63
'r"#an;ers Assoc& vs& 'r"dential Ban; G&R& No& )*)52, -)(((.
/////////////////////////////// 6(
Millares et& al vs& NLRC G&R& No& )5535, -)(((.
///////////////////////////////////////& 0)
1nternational School Alliance of 4d"cators vs& C"is"m#in G&R& No& )53326 -5+++.
///////////////////&& 0*
Ban;ard 4m!loyees Union vs& NLRC G&R& No& )2+03( -5++2.
//////////////////////////////// 06
Odano vs& NLRC G&R& No& )2,25+ -5++2.
//////////////////////////////////////////&& 0,
C& 'lanas Commercial vs& NLRC G&R& No& )220)( -5++6.
/////////////////////////////////// 03
4%R Crafts Cor!& vs& CA G&R& No& )62)+) -5++0.
///////////////////////////////////////&& ,+
'a Asa Steel >or;s vs& CA G&R& No& )0002, -5++0.
///////////////////////////////////// ,)
Metro!olitan Ban; vs& N>'C G&R& No& )22*55 -5++,.
//////////////////////////////////// ,*
4D"ita#le Ban; vs& Sadac G&R& No& )02,,5 -5++0.
//////////////////////////////////////& ,6
S&1&' :ood ?o"se vs& Batolina GR No& )(52,* -5+)+.
////////////////////////////////////&& ,,
SLL 1nternational Ca#le S!ecialist vs& NLRC G&R& No& ),5)0) -5+)).
//////////////////////////// ,(
9erara= %r& vs& Coca8Cola Bottlers 'hils 1nc& G&R& No& ),0(36= A!ril )=
5+)*//////////////////////& 3)
Royal 'lant >or;ers Union vs& Coca8Cola= G&R& No& )(3,3*= A!ril )6=
5+)*//////////////////////& 3*
N>'C vs& The Alliance of 'roressive La#or et al&= GR No& )6+*50= March )5=
5+)2/////////////////& 36
RaEah ?"ma#on ?otel vs& TraEano G&R& Nos& )++55585* -)((*.
/////////////////////////////// 33
G"ico vs& Secretary of La#or G&R& No& )*),6+ -)((3.
////////////////////////////////////&& 3(
4A8Bataan 9eterans Sec"rity Aency vs& Secretary of La#or et& al& G&R& No& )65*(0 -5++6.
//////////////// (+
Sa!io vs& Undaloc Constr"ction et& al& G&R& No& )66+*2 -5++3.
///////////////////////////////&& ()
Secretary of La#or vs& 'anay 9eterans Sec"rity and 1nvestiation Aency G&R& No& )0,,+3 -5++3.
///////////&& (5
National Mines and Allied >or;ers Union vs& Marco!!er Minin Cor!& G&R& No& ),202) -5++3.
///////////// (*
%ethro 1ntellience and Sec"rity Cor!& vs& SOL4 GR NO& ),56*, -5++(.
//////////////////////////&& (6
'?1L& ?oteliers 1nc& vs& National Union of >or;ers in ?otel= Resta"rant and Allied 1nd"stries8 D"sit ?otel
Ni;;o Cha!ter G 3(R No& )3)(,5 -5++(.
/////////////////////////////////////////////////////
(0
Tier Constr"ction and Develo!ment Cor!& vs& A#ay GR No& )02)2) -5+)+.
//////////////////////// )++
'eo!le<s Broadcastin -Bom#o Radyo 'hils. vs& Sec of DOL4 et al GR No ),(065 -5++(.
///////////////// )+5
S"!erior 'ac;ain Cor!&= vs& Balasay et al&= G&R& No& ),3(+(= Octo#er )+= 5+)5
//////////////////&& )+2
Gaa vs& CA G&R& No& L822)0( -)(36.
//////////////////////////////////////////////&& )+0
Nestle 'hils& vs& NLRC G&R& No& 36)(, -)(().
////////////////////////////////////////&& )+,
:ive % TaAi vs& NLRC G&R& No& )))2,2 -)((2.
/////////////////////////////////////////& )+3
'hil& 9eterans Ban; vs& NLRC G&R& No& )*+2*( -)(((.
////////////////////////////////////& )+(
'hili!!ine A!!liances Cor!& vs& CA G&R& No& )2(2*2-5++2.
/////////////////////////////////&& ))+
Aa#on vs& NLRC G&R& No& )630(* -5++2.
///////////////////////////////////////////& )))
American >ire @ Ca#le Daily Rated 4m!loyees vs& American >ire G&R& No& )66+6( -5++6.
///////////////&& ))5
?onda 'hili!!ines vs& Samahan Malayan Manaawa sa ?onda G&R& No& )2660) -5++6.
///////////////& ))*
'rod"cers Ban; vs& NLRC G&R& No& )++,+) -5++).
//////////////////////////////////////& ))2
%ardin vs& NLRC G&R& No& ))(503 -5+++.
////////////////////////////////////////////& ))6
Manila %oc;ey<s Cl"# 4m!loyees La#or Union vs& Manila %oc;ey Cl"# G&R& No& )0,0+) -5++,.
//////////////&& ))0
San Mi"el Cor!& et& al vs& Layoc %r& et& al& G&R& No& )2(02+ -5++,.
////////////////////////////// )),
San Mi"el Cor!& vs& 'ontillas G&R& No& )66),3 -5++3.
////////////////////////////////////&& ))3
Arco Metal 'rod"cts vs& Samahan n Manaawa sa Arco8Metal8NA:LU G&R& No& ),+,*2 -5++3.
////////////& ))(
A"an7a vs& Asian Terminal 1nc& GR No& )0*6+6 -5++(.
///////////////////////////////////& )5)
Genesis Trans!ort Service 1nc& vs& Unyon n Malatan Manawa n Genesis Trans!ort GR No& )35))2
-5+)+. ///&& )55
Central A7"carera de Tarlac vs& Central A7"carera de Tarlac La#or Union8NLU G&R& No& )33(2( -5+)+.
////////&&& )52
S?S 'erforated Materials 1nc& et& al vs& Dia7 GR No& )363)2 -5+)+.
///////////////////////////// )56
NiFa %ewelry vs& Madeline C& Montecillo And Li7a M& Trinidad= G&R& No& )33)0(= Novem#er 53=
5+))////////// )50
Locsin 11 vs& Me;eni :ood Cor!&= GR No& )(5)+6= Decem#er (=
5+)*/////////////////////////////&& )5,
T? Sho!Gtters Cor!&= et al&= vs& T@? Sho!Gtters Cor!&= Union= GR No& )(),)2= :e# 50= 5+)2
//////////////// )*+
>esleyan University8'hils&= vs& >esleyan University8'hils&= :ac"lty @ StaH Asso&= GR No& )3)3+0= March )5=
5+)2///&& )**
Bl"er Than Bl"e %oint 9ent"res Co&= vs& 4ste#an= GR No& )(5635= A!ril ,= 5+)2=
/////////////////////// )*6
Conson vs& NLRC G&R& No& ))256+ -)((6.
//////////////////////////////////////////&& )*,
North Davao Minin vs& NLRC G&R& No& ))5620 -)((0.
//////////////////////////////////// )*3
National :ederation of La#or vs& CA G&R& No& )2(202 -5++2.
////////////////////////////////&& )*(
?o"se of Sara Lee vs& Rey G&R& No& )2(+)* -5++0.
//////////////////////////////////////& )2+
San %"an de Dios ?os!ital vs& NLRC G&R& No& )50*3* -)((,.
////////////////////////////////&&& )2)
Sime Dar#y vs& NLRC G&R& No& ))(5+6 -)((3.
////////////////////////////////////////&&& )25
'AL vs& NLRC G&R& No& )*53+6 -)(((.
////////////////////////////////////////////&&& )2*
Linton Commercial Co&= 1nc& vs& ?ellera G&R& No& )0*)2, -5++,.
/////////////////////////////// )22
Bisi Manaawa sa Tryco vs& NLRC G&R& No& )6)*+( -5++3.
///////////////////////////////&& )26
Union of :ili!ino 4m!loyees vs& 9icar G&R& No& ,(566 -)((5.
////////////////////////////////& )20
National S"ar ReGnery Cor!& = vs& NLRC G&R& No& )+),0) -)((*.
////////////////////////////// )23
Sala7ar vs& NLRC G&R& No& )+(5)+ -)((0.
/////////////////////////////////////////// )65
La#or Conress of the 'hils&= vs& NLRC G&R& No& )5*(*3) -)((3.
//////////////////////////////&& )62
Mercidar :ishin Cor!&= vs& NLRC G&R& No& ))56,2 -)((3.
////////////////////////////////// )60
San Mi"el Cor!&= vs& CA G&R& No& )20,,6 -5+++.
/////////////////////////////////////// )6,
Tan vs& Larama G&R& No& )6)553 -5++5.
///////////////////////////////////////////& )6(
Lam#o vs& NLRC G&R& No& )))+25 -)(((.
///////////////////////////////////////////& )0)
R@4 Trans!ort vs& Lata G&R& No& )665)2 -5++2.
//////////////////////////////////////&& )0*
Asian Transmission vs& CA G&R& No& )22002 -5++2.
/////////////////////////////////////&& )06
A"to#"s Trans!ort System vs& Ba"tista G&R& No& )60*02 -5++6.
//////////////////////////////&& )0,
San Mi"el Cor!&= vs& Del Rosario G&R& No& )03)(2 -5++6.
//////////////////////////////////& )0(
'enaranda vs& Baana 'lywood Cor!& G&R& No& )6(6,, -5++0.
/////////////////////////////// ),)
Leyte 19 4lectric Coo!erative 1nc& vs& L4B4CO 19 4m!loyees Union8 ALU G&R& No& )6,,,26 -5++,.
///////////& ),*
Bahia Shi!!in Services vs& Ch"a G&R& No& )05)(6 -5++3.
////////////////////////////////// ),2
'NCC vs& S;yway TraIc Manaement and Sec"rity Division >or;ers Orani7ation G&R& N& ),)5*) -5+)+.
//////&& ),0
9ill"a vs& NLRC G&R& No& L8,6+*3 -)((*.
///////////////////////////////////////////& ),,
C%C Tradin vs& NLRC G&R& No& ))6332 -)((6.
////////////////////////////////////////&& ),(
'antranco North 4A!ress vs& NLRC G&R& No& (6(2+ -)((0.
/////////////////////////////////&& )3)
R@4 Trans!ort vs& Lata G&R& No& )665)2 -5++2.
//////////////////////////////////////&& )3*
R"Gna 'atis vs& Al"sitain G&R& No& )205+5 -5++2.
//////////////////////////////////////& )36
Sta& Catalina Collee vs& NLRC G&R& No& )2223* -5++*.
//////////////////////////////////// )30
?onda 'hils&= vs& Samahan n ma Manaawa sa ?onda G&R& No& )2660) -5++6.
////////////////////& )33
%ac"l#e vs& Silliman University G&R& No& )60(*2 -5++,.
///////////////////////////////////&& )3(
1ntercontinental Broadcastin Cor!&= vs& Amarilla G&R& No& )05,,6 -5++0.
///////////////////////// )()
Letran Calam#a :ac"lty @ 4m!loyees Association vs& NLRC et al& G&R& No& )60556 -5++3.
////////////////& )(2
Reyes vs& NLRC et al& G&R& No& )0+5** -5++,.
///////////////////////////////////////// )(0
Arco Metal 'rod"cts Co&= 1nc&= et al& vs& Samahan n Ma Manaawa sa Arco Metal NA:LU G&R& No&
),+,*2 -5++3. /&& )(3
Universal Ro#ina S"ar Millin Cor!& vs& Ca#alleda G&R& No& )60022 -5++3.
////////////////////////& )((
Cercado vs& Uni!rom= 1nc& G&R& No& )33)62 -5+)+.
//////////////////////////////////////& 5+)
Radio Mindanao Networ;= 1nc& et al& vs& B#arola= %r& et al& G&R& No& )(3005 -5+)5.
/////////////////////& 5+5
'adillo vs& R"ral #an; of Na#"nt"ran 1nc& G&r& No& )((**3= %an& 5)=
5+)*///////////////////////&&&&&&&&&&&& 5+2
TJSG' Lar;ins vs& NLRC G&R& No& (52*5 -)((6.
///////////////////////////////////////&& 5+6
U4RM Memorial Medical Center vs& NLRC G&R& No& ))+2)( -)((,.
///////////////////////////// 5+,
'hil& Tranco Services vs& NLRC G&R& No& )52)++ -)((3.
///////////////////////////////////& 5+(
St& Martin :"neral ?omes vs& NLRC G&R& No& )*+300 -)((3.
////////////////////////////////&&& 5)+
L"do @ L"ym Cor!& vs& Soarnido G&R& No& )2+(0+ -5++*.
////////////////////////////////// 5))
?ansin 4nineerin @ Constr"ction vs& CA G&R& No& )06()+ -5++0.
///////////////////////////// 5)5
'hil& %o"rnalist 1nc& vs& NLRC G&R& No& )0025) -5++0.
////////////////////////////////////&& 5)2
Balatas M"lti '"r!ose Coo!& vs& CA G&R& No& )6(503 -5++0.
////////////////////////////////& 5),
St& Martin :"neral ?omes vs& NLRC G&R& No& )25*6) -5++0.
////////////////////////////////&& 5)(
DOL4 'hils& 9s& 4steva G&R& No& )0)))6 -5++0.
//////////////////////////////////////// 55+
1ntercontinental Broadcastin Cor!& vs& 'anani#an G&R& No& )6)2+, -5++,.
///////////////////////& 555
:ar 4ast Aric"lt"ral S"!!ly vs& Le#ati"e G&R& No& )053)* -5++,.
///////////////////////////// 55*
Letran Calam#a :ac"lty @ 4m!loyees Association vs& NLRC G&R& No& )60556 -5++3.
///////////////////& 552
Metro Transit Orani7ation vs& 'ilas N:>U KMU et& al& G&R& No& ),620+ -5++3.
///////////////////// 556
%&K& Mercado @ Sons Aric"lt"ral 4nter!rises= 1nc& vs& Sto& Tomas G&R& No& )63+32 -5++3.
////////////////&& 55,
%& 'hil& Marine 1nc& vs& NLRC G&R& No& )03**( -5++3.
/////////////////////////////////////&& 553
Sy vs& ALC 1nd"stries G&R& No& )03**( -5++3.
////////////////////////////////////////&&& 55(
'C1 Travel Cor! vs& NLRC G&R& No& )62*,( -5++3.
//////////////////////////////////////& 5*)
Lo!e7 vs& C&C& S!orts Cl"# G&R& No& )02+*5 -5++(.
////////////////////////////////////// 5*5
Loc;heed Detective And >atchman Aency= 1nc& vs& University Of The 'hili!!ines G&R& No& )36()3 -5+)5.
//////&& 5*6
'ortillo vs& R"dolf Liet7= 1nc& et al&= G&R& No& )(06*(= Octo#er )+= 5+)5
///////////////////////////&& 5*0
B"ildin care Cor!& vs Macarae G&R& No& )(3*6, -5+)5.
//////////////////////////////////&& 5*3
Basic Principles
Singer Sewing Machine vs. NLRC
G&R& No& ()*+, %an"ary 52= )(()
:ACTS$
Siner Machine Collectors Union8Ba"io -S1MACUBA.= the res!ondent "nion= Gled a !etition for
direct certiGcation as the sole and eAcl"sive #arainin aent of all collectors of the Siner
Sewin Machine Com!any= Ba"io City #ranch -hereinafter referred to as Lthe Com!anyL.&
The Com!any o!!osed the !etition mainly on the ro"nd that the "nion mem#ers are act"ally
not em!loyees #"t are inde!endent contractors as evidenced #y the collection aency
areement which they sined& The res!ondent Med8Ar#iter= Gndin that there eAists an
em!loyer8em!loyee relationshi! #etween the "nion mem#ers and the Com!any= ranted the
!etition for certiGcation election& On a!!eal= Secretary of La#or :ran;lin M& Drilon aIrmed it&
1SSU4$
>hether or not there eAists an em!loyee8em!loyer relationshi! #etween the !arties&
RUL1NG$
SC r"led in favor of !etitioner& 'rivate res!ondents are inde!endent contractors= not em!loyees&
As s"ch= they cannot enter into a collective #arainin areement with the !etitioner&
The !resent case mainly calls for the a!!lication of the control test= which if not satisGed= wo"ld
lead "s to concl"de that no em!loyer8em!loyee relationshi! eAists& ?ence= if the "nion mem#ers
are not em!loyees= no riht to orani7e for !"r!oses of #arainin= nor to #e certiGed as s"ch
#arainin aent can ever #e reconi7ed& The followin elements are enerally considered in the
determination of the em!loyer8em!loyee relationshi!M L-). the selection and enaement of the
em!loyeeM -5. the !ayment of waesM -*. the !ower of dismissalM and -2. the !ower to control the
em!loyeeNs cond"ct O altho"h the latter is the most im!ortant elementL&
The nat"re of the relationshi! #etween a com!any and its collectin aents de!ends on the
circ"mstances of each !artic"lar relationshi!& Not all collectin aents are em!loyees and
neither are all collectin aents inde!endent contractors& The collectors co"ld fall "nder either
cateory de!endin on the facts of each case&
A thoro"h eAamination of the facts of the case leads "s to the concl"sion that the eAistence of
an em!loyer8em!loyee relationshi! #etween the Com!any and the collection aents cannot #e
s"stained& The !lain lan"ae of the areement reveals that the desination as collection aent
does not create an em!loyment relationshi! and that the a!!licant is to #e considered at all
times as an inde!endent contractor&
The Co"rt Gnds that since !rivate res!ondents are not em!loyees of the Com!any= they are not
entitled to the constit"tional riht to Eoin or form a la#or orani7ation for !"r!oses of collective
)
#arainin& Accordinly= there is no constit"tional and leal #asis for their L"nionL to #e ranted
their !etition for direct certiGcation&
Manila Golf Club vs. IAC
G&R& No& 02(23 Se!tem#er 5,= )((2
:ACTS$
This is oriinally Gled with the Social Sec"rity Commission -SSC. via !etition of ), !ersons who
styled themselves as P Caddies of Manila Golf and Co"ntry Cl"#8'TCC4AQ for the coverae and
availment of #eneGts of the Social Sec"rity Act as amended= 'TCC4A -'hili!!ine Technical=
Clerical= Commercial 4m!loyees Association. a la#or orani7ation where which they claim for
mem#ershi!&
The same time two other !roceedins were Gled and !endin& These are certiGcation election
case Gled #y 'TCC4A on #ehalf of the same caddies of Manila Golf and Co"ntry cl"# which was in
favor of the caddies and com!"lsory ar#itration case involvin 'TCC4A and Manila Golf and
Co"ntry Cl"# which was dismissed and r"led that there was no em!loyer8em!loyee relationshi!
#etween the caddies and the cl"#&
1SSU4$
>hether or not !ersons renderin caddyin services for mem#ers of olf cl"#s and their "ests
in said cl"#sN co"rses or !remises are the em!loyees of s"ch cl"#s and therefore within the
com!"lsory coverae of the Social Sec"rity System -SSS.&
RUL1NG$
SC r"led in favor of the !etitioner& Llamar is not an em!loyee of the Manila Golf and Co"ntry
Cl"#= 1nc& The cl"# is "nder no o#liation to re!ort him for com!"lsory coverae to the SSS&
1n the very nat"re of thins= caddies m"st s"#mit to some s"!ervision of their cond"ct while
enEoyin the !rivilee of !"rs"in their occ"!ation within the !remises and ro"nds of whatever
cl"# they do wor; in& They wor; for the cl"# to which they attach themselves on s"Herance #"t=
on the other hand= also witho"t havin to o#serve any wor;in ho"rs= free to leave anytime they
!lease= to stay away for as lon they li;e&
These considerations clash frontally with the conce!t of em!loyment& 1t can ha!!en that a caddy
who has rendered services to a !layer on one day may still Gnd s"Icient time to wor;
elsewhere& Under s"ch circ"mstances= the caddy may leave the !remises and to o to s"ch other
!lace of wor; that he wishes& These are thins #eyond the control of the !etitioner&
Encclope!ia Bri"anica vs. NLRC
G&R& No& 3,+(3 Novem#er 2= )((0
:ACTS$
'rivate res!ondent BenEamin LimEoco was a Sales Division Manaer of !etitioner 4ncyclo!aedia
Britannica and was in chare of sellin !etitionerNs !rod"cts thro"h some sales re!resentatives&
As com!ensation= !rivate res!ondent received commissions from the !rod"cts sold #y his
aents& ?e was also allowed to "se !etitionerNs name= oodwill and loo& 1t was= however= areed
"!on that oIce eA!enses wo"ld #e ded"cted from !rivate res!ondentNs commissions& 'etitioner
wo"ld also #e informed a#o"t a!!ointments= !romotions= and transfers of em!loyees in !rivate
res!ondentNs district&
LimEoco resined from oIce to !"rs"e his !rivate #"siness& Then on Octo#er *+= )(,6= he Gled a
com!laint aainst !etitioner 4ncyclo!aedia Britannica with the De!artment of La#or and
4m!loyment= claimin for non8!ayment of se!aration !ay and other #eneGts= and also illeal
ded"ction from his sales commissions&
1SSU4$
>hether or not there eAists an em!loyer8em!loyee relationshi! #etween the !arties&
RUL1NG$
SC r"led that LimEoco was not an em!loyee of the !etitioner com!any& ?e was merely an aent
or an inde!endent dealer of the !etitioner&
The records of the case at #ar showed that there was no s"ch relationshi!& ?e was free to
cond"ct his wor; and he was free to enae in other means of livelihood& At the time he was
connected with the !etitioner com!any= !rivate res!ondent was also a director and later the
!resident of the :armersN R"ral Ban;& ?ad he #een an em!loyee of the com!any= he co"ld not #e
em!loyed elsewhere and he wo"ld #e reD"ired to devote f"ll time for !etitioner& 1f !rivate
res!ondent was indeed an em!loyee= it was rather "n"s"al for him to wait for more than a year
from his se!aration from wor; #efore he decided to Gle his claims&
Carungcong vs. Sunlife
G&R& No& ))3+30 Decem#er )6= )((,
:ACTS$
S"san Car"ncon #ean her career in the ins"rance ind"stry in )(,2 as an aent of S"n Life
Ass"rance Com!any of Canada& She sined an Aent Areement with S"n Life& 1n virt"e of which
she was desinated the latter<s aent to solicit a!!lications for its ins"rance and ann"ity !olicies&
This contract was s"!erseded some Gve years later when she sined two -5. new areements&
The Grst= denominated Career Aent<s or Unit Manaer<s Areement= dealt with s"ch matters as
the aent<s commissions= his o#liations= limitations on his a"thority= and termination of the
areement #y death= or #y written notice with or witho"t ca"se& The second was titled=
Manaer<s S"!!lementary Areement& 1t eA!licitly descri#ed as a Pf"rther areementQ&
Car"ncon and S"n Life eAec"ted another Areement named New B"siness Manaer with the
f"nction enerally to manae a New B"siness OIce esta#lished& This latest Areement stressed
that the New B"siness Manaer in !erformance of his d"ties deGned herein= shall #e considered
an inde!endent contractor and not an em!loyee of S"n Life= and that "nder no circ"mstance
shall the New B"siness Manaer andJor his em!loyees #e considered em!loyees of S"n Life&
Ms& 4lei7er Si#ayan= Manaer of S"n Life<s 1nternal A"dit De!artment= commenced an inD"iry into
the s!ecial f"nd availments of Car"ncon and other New B"siness Manaers& Res!ondent Lance
Kem!= had #een receivin re!orts of anomalies in relation thereto from "nit manaers and
aents& Thereafter= on %an"ary )((+= Car"ncon was confronted with and as;ed to eA!lain the
discre!ancies set o"t in Si#ayan<s re!ort& She was iven a letter sined #y Metron 9& Deve7a=
CLU= Director= Mar;etin= which advised of the termination of her relationshi! with S"n Life&
Car"ncon !rom!tly instit"ted !roceedins for vindication in the Ar#itration Branch of the
National La#or Relations Commissions on %an"ary )0= )((+& There she s"cceeded in o#tainin a
favora#le E"dment& La#or Ar#iter fo"nd that there eAisted an em!loyer8em!loyee relationshi!
#etween her and S"n Life& On a!!eal= the National La#or Relations Commission reversed the
Ar#iter<s E"dment& 1t aIrmed that no em!loyment relationshi! eAisted #etween Car"ncon
and S"n Life&
1SSU4$
RUL1NG$
SC held that Car"ncon is not an em!loyee of S"n Life Co& She was an inde!endent contractor&
Noteworthy is that this last areement which em!hasi7ed= li;e the PCareer Aent<s or Unit
Manaer<s AreementQ Grst sined #y her= that in !erformance of her d"ties deGned herein&
Car"ncon wo"ld #e considered an inde!endent contractor and not an em!loyee of S"n Life=
and that "nder no circ"mstance shall the New B"siness Manaer andJor his em!loyees #e
considered em!loyees of S"n Life&
Car"ncon is an inde!endent contractor& 1t was indicated in the very face of the contract& The
r"les and re"lations of the com!any is not s"Icient to esta#lish an em!loyer8em!loyee
relationshi!& 1t does not necessarily create any em!loyer8em!loyee relationshi! where the
em!loyers< controls have to interfere in the methods and means #y which em!loyee wo"ld li;e
em!loy to arrive at the desired res"lts&
Car"ncon admitted that she was free to wor; as she !leases= at the !lace and time she felt
convenient for her to do so& She was not !aid to a GAed salary and was mainly !aid #y
commissions de!endin on the vol"me of her !erformance&
Ra#os vs. CA
G&R& No& )52*62M A!ril ))= 5++5
:ACTS$
'etitioner 4rlinda Ramos= after see;in !rofessional medical hel!= was advised to "ndero an
o!eration for the removal of a stone in her all #ladder -cholecystectomy.& She was referred to
Dr& ?osa;a= a s"reon= who areed to !erform the o!eration on her& The o!eration was sched"led
for %"ne ),= )(36 at ($++ in the mornin at !rivate res!ondent De Los Santos Medical Center
-DLSMC.& Since neither !etitioner 4rlinda nor her h"s#and= !etitioner Roelio= ;new of any
anesthesioloist= Dr& ?osa;a recommended to them the services of Dr& G"tierre7& On the
followin day= she was ready for o!eration as early as ,$*+ am& Aro"nd ($*+= Dr& ?osa;a has not
yet arrived& By )+ am= Roelio wanted to !"ll o"t his wife from the o!eratin room& Dr& ?osa;a
Gnally arrived at )5$)+ !m more than * ho"rs of the sched"led o!eration&
Dr& G"iterres tried to int"#ate 4rlinda& The nail #eds of 4rlinda were #l"ish discoloration in her left
hand& At * !m= 4rlinda was #ein wheeled to the 1ntensive care Unit and stayed there for a
month& Since the ill8fated o!eration= 4rlinda remained in comatose condition "ntil she died&
The family of Ramos s"ed them for damaes&
1SSU4$
>hether or not there eAists an em!loyer8em!loyee relationshi! #etween the medical center and
Drs& ?osa;a and G"iterre7&
RUL1NG$
SC r"led that there was no em!loyee8em!loyer relationshi! #etween de Los Santos Medical
Center and Drs& ?osa;a and G"tierre7&
After a caref"l consideration of the ar"ments raised #y DLSMC= the Co"rt Gnds that res!ondent
hos!ital<s !osition on this iss"e is meritorio"s& There is no em!loyer8em!loyee relationshi!
#etween DLSMC and Drs& G"tierre7 and ?osa;a which wo"ld hold DLSMC solidarily lia#le for the
inE"ry s"Hered #y !etitioner 4rlinda "nder Article 5)3+ of the Civil Code&
As eA!lained #y res!ondent hos!ital= that the admission of a !hysician to mem#ershi! in
DLSMC<s medical staH as active or visitin cons"ltant is Grst decided "!on #y the Credentials
Committee& Neither is there any showin that it is DLSMC which !ays any of its cons"ltants for
medical services rendered #y the latter to their res!ective !atients& Moreover= the contract
#etween the cons"ltant in res!ondent hos!ital and his !atient is se!arate and distinct from the
contract #etween res!ondent hos!ital and said !atient& The Grst has for its o#Eect the rendition of
medical services #y the cons"ltant to the !atient= while the second concerns the !rovision #y the
hos!ital of facilities and services #y its staH s"ch as n"rses and la#oratory !ersonnel necessary
for the !ro!er treatment of the !atient&
The hos!ital does not hire cons"ltants #"t it accredits and rants him the !rivilee of maintainin
a clinic andJor admittin !atients& 1t is the !atient who !ays the cons"ltants& The hos!ital cannot
dismiss the cons"ltant #"t he may lose his !rivilees ranted #y the hos!ital& The hos!ital<s
o#liation is limited to !rovidin the !atient with the !referred room accommodation and other
thins that will ens"re that the doctor<s orders are carried o"t&
Son$a vs. ABS%CBN
G&R& No& )*3+6)M %"ne )+= 5++2
:ACTS$
Res!ondent ABS8CBN Broadcastin Cor!oration -LABS8CBNL. sined an Areement -LAreementL.
with the Mel and %ay Manaement and Develo!ment Cor!oration -LM%MDCL.& ABS8CBN was
re!resented #y its cor!orate oIcers while M%MDC was re!resented #y SONRA= as 'resident and
General Manaer= and Carmela Tianco -LT1ANGCOL.= as 49' and Treas"rer& Referred to in the
Areement as LAG4NT=L M%MDC areed to !rovide SONRA<s services eAcl"sively to ABS8CBN as
talent for radio and television&
ABS8CBN areed to !ay for SONRA<s services a monthly talent fee of '*)+=+++ for the Grst year
and '*),=+++ for the second and third year of the Areement& ABS8CBN wo"ld !ay the talent
fees on the )+th and 56th days of the month& SONRA Gled a com!laint aainst ABS8CBN #efore
the De!artment of La#or and 4m!loyment= National Ca!ital Reion in C"e7on City& SONRA
com!lained that ABS8CBN did not !ay his salaries= se!aration !ay= service incentive leave !ay=
)*th month !ay= sinin #on"s= travel allowance and amo"nts d"e "nder the 4m!loyees Stoc;
O!tion 'lan -L4SO'L.&
1SSU4$
>hether %ay Son7a is an em!loyee of ABS8CBN or an inde!endent contractor&
RUL1NG$
SC r"led that Son7a is an inde!endent contractor&
Selection and 4naement of 4m!loyees& 1nde!endent contractors often !resent themselves to
!ossess "niD"e s;ills= eA!ertise or talent to distin"ish them from ordinary em!loyees& The
s!eciGc selection and hirin of SONRA= #eca"se of his "niD"e s;ills= talent and cele#rity stat"s
not !ossessed #y ordinary em!loyees= is a circ"mstance indicative= #"t not concl"sive= of an
inde!endent contract"al relationshi!& 1f SONRA did not !ossess s"ch "niD"e s;ills= talent and
cele#rity stat"s= ABS8CBN wo"ld not have entered into the Areement with SONRA #"t wo"ld
have hired him thro"h its !ersonnel de!artment E"st li;e any other em!loyee&
'ayment of >aes& All the talent fees and #eneGts !aid to SONRA were the res"lt of neotiations
that led to the Areement& 1f SONRA were ABS8CBN<s em!loyee= there wo"ld #e no need for the
!arties to sti!"late on #eneGts s"ch as LSSS= Medicare= A A A and )*th month !ayL5+ which the
law a"tomatically incor!orates into every em!loyer8em!loyee contract& >hatever #eneGts
SONRA enEoyed arose from contract and not #eca"se of an em!loyer8em!loyee relationshi!&
SONRA<s talent fees= amo"ntin to '*),=+++ monthly in the second and third year= are so h"e
and o"t of the ordinary that they indicate more an inde!endent contract"al relationshi! rather
than an em!loyer8em!loyee relationshi!&
'ower of Dismissal& D"rin the life of the Areement= ABS8CBN areed to !ay SONRA<s talent fees
as lon as LAG4NT and %ay Son7a shall faithf"lly and com!letely !erform each condition of this
Areement&L52 4ven if it s"Hered severe #"siness losses= ABS8CBN co"ld not retrench SONRA
#eca"se ABS8CBN remained o#liated to !ay SONRA<s talent fees d"rin the life of the
Areement& This circ"mstance indicates an inde!endent contract"al relationshi! #etween SONRA
and ABS8CBN&
'ower of Control& A!!lyin the control test to the !resent case= we Gnd that SONRA is not an
em!loyee #"t an inde!endent contractor& The control test is the most im!ortant test o"r co"rts
a!!ly in distin"ishin an em!loyee from an inde!endent contractor&5( This test is #ased on the
eAtent of control the hirer eAercises over a wor;er& The reater the s"!ervision and control the
hirer eAercises= the more li;ely the wor;er is deemed an em!loyee& The converse holds tr"e as
well S the less control the hirer eAercises= the more li;ely the wor;er is considered an
inde!endent contractor&
La$aro vs. Social Securi" Co##ission
G&R& No& )*3562M %"ly *+= 5++2
:ACTS$
'rivate res!ondent Rosalina M& La"dato -LLa"datoL. Gled a !etition #efore the SSC for social
sec"rity coverae and remittance of "n!aid monthly social sec"rity contri#"tions aainst her
three -*. em!loyers& Amon the res!ondents was herein !etitioner Anelito L& La7aro -LLa7aroL.=
!ro!rietor of Royal Star Mar;etin -LRoyal StarL.= which is enaed in the #"siness of sellin
home a!!liances& La"dato alleed that des!ite her em!loyment as sales s"!ervisor of the sales
aents for Royal Star from A!ril of )(,( to March of )(30= La7aro had failed d"rin the said
!eriod= to re!ort her to the SSC for com!"lsory coverae or remit La"datoNs social sec"rity
contri#"tions&
1SSU4$
>hether or not there eAists an em!loyee8em!loyer relationshi! #etween La"dato and Royal Star
Mar;etin&
RUL1NG$
SC r"led that there eAists s"ch relationshi! #etween the !arties&
1t is an acce!ted doctrine that for the !"r!oses of coverae "nder the Social Sec"rity Act= the
determination of em!loyer8em!loyee relationshi! warrants the a!!lication of the Lcontrol test=L
that is= whether the em!loyer controls or has reserved the riht to control the em!loyee= not only
as to the res"lt of the wor; done= #"t also as to the means and methods #y which the same is
accom!lished&
S"Ice it to say= the fact that La"dato was !aid #y way of commission does not !recl"de the
esta#lishment of an em!loyer8em!loyee relationshi!& The relevant factor remains= as stated
earlier= whether the Lem!loyerL controls or has reserved the riht to control the Lem!loyeeL not
only as to the res"lt of the wor; to #e done #"t also as to the means and methods #y which the
same is to #e accom!lished&
Phil. Global Co##. vs. &e 'era
G&R& No& )6,5)2M %"ne ,= 5++6
:ACTS$
'hili!!ine Glo#al Comm"nications inc& is a cor!oration enaed in the #"siness of
comm"nication services and allied activities while Ricardo de 9era is a !hysician #y !rofession
whom !etitioner enlisted to attend to the medical needs of its em!loyees& The controversy rose
when !etitioner terminated his enaement&
1n )(3)= Dr& de 9era oHered his services to !etitioner& The !arties areed and formali7ed the
res!ondent<s !ro!osal in a doc"ment denominated as retainershi! contract which will #e for a
!eriod of one year= s"#Eect to renewal and clearly stated that res!ondent will cover the
retainershi! the com!any !revio"sly with Dr& 4"la"& The areement went "ntil )((2= in the years
)((68)((0= it was renewed ver#ally& The t"rnin !oint of the !arties< relationshi! was when
!etitioner= thr" a letter #earin the s"#Eect T4RM1NAT1ON S R4TA1N4RS?1' CONTRACT= informed
Dr& de 9era of its decision to discontin"e the latter<s retainer contract #eca"se the manaement
has decided that it wo"ld #e more !ractical to !rovide medical services to its em!loyees thro"h
accredited hos!itals near the com!any !remises&
On %an"ary )((,= de 9era Gleda com!laint for illeal dismissal #efore the NLRC= allein that he
had #een act"ally em!loyed #y the com!any as its com!any !hysician since )(()& The
commission rendered decision in favor of 'hilcom and dismissed the com!laint sayin that de
9era was an inde!endent contractor& On a!!eal to NLRC= it reversed the decision of the La#or
Ar#iter statin that de 9era is a re"lar em!loyee and directed the com!any to reinstate him&
'hilcom a!!ealed to the CA where it rendered decision deletin the award #"t reinstatin de
9era& 'hilcom Gled this !etition involvin the diHerence of a Eo# contractin areements from
em!loyee8em!loyer relationshi!&
1SSU4$
>hether or not there eAists an em!loyee8em!loyer relationshi! #etween the !arties&
RUL1NG$
SC r"led that there was no s"ch relationshi! eAistin #etween Dr& de 9era and 'hil& Com&
The elements of an em!loyer8em!loyee relationshi! are wantin in this case& The record are
re!lete with evidence showin that res!ondent had to #ill !etitioner for his monthly !rofessional
fees& 1t sim!ly r"ns aainst the rain of common eA!erience to imaine that an ordinary
em!loyee has yet to #ill his em!loyer to receive his salary&
The !ower to terminate the !arties< relationshi! was m"t"ally vested on #oth& 4ither may
terminate the arranement at will= with or witho"t ca"se&
Remar;a#ly a#sent is the element of control where#y the em!loyer has reserved the riht to
control the em!loyee not only as to the res"lt of the wor; done #"t also as to the means and
methods #y which the same is to #e accom!lished&
'etitioner had no control over the means and methods #y which res!ondent went a#o"t
!erformin his wor; at the com!any !remises& 1n Gne= the !arties themselves !ractically areed
on every terms and conditions of the enaement= which there#y neates the element of control
in their relationshi!&
ABS%CBN vs. Na$areno
G&R& No& )02)60M Se!tem#er 50= 5++0
:ACTS$
'etitioner ABS8CBN Broadcastin Cor!oration -ABS8CBN. is enaed in the #roadcastin #"siness
and owns a networ; of television and radio stations= whose o!erations revolve aro"nd the
#roadcast= transmission= and relay of telecomm"nication sinals& 1t sells and deals in or
otherwise "tili7es the airtime it enerates from its radio and television o!erations& 1t has a
franchise as a #roadcastin com!any= and was li;ewise iss"ed a license and a"thority to o!erate
#y the National Telecomm"nications Commission&
'etitioner em!loyed res!ondents Na7areno= Ger7on= Dei!arine= and Lerasan as !rod"ction
assistants -'As. on diHerent dates& They were assined at the news and !"#lic aHairs= for vario"s
radio !rorams in the Ce#" Broadcastin Station& On Decem#er )(= )((0= !etitioner and the
ABS8CBN Ran;8and8:ile 4m!loyees eAec"ted a Collective Barainin Areement -CBA. to #e
eHective d"rin the !eriod from Decem#er ))= )((0 to Decem#er ))= )(((& ?owever= since
!etitioner ref"sed to reconi7e 'As as !art of the #arainin "nit= res!ondents were not incl"ded
to the CBA&
1n Octo#er 5+++= res!ondents Gled a Com!laint for Reconition of Re"lar 4m!loyment Stat"s=
Under!ayment of Overtime 'ay= ?oliday 'ay= 'remi"m 'ay= Service 1ncentive 'ay= Sic; Leave
'ay= and )*th Month 'ay with Damaes aainst the !etitioner #efore the NLRC& The La#or Ar#iter
rendered E"dment in favor of the res!ondents= and declared that they were re"lar em!loyees
of !etitioner as s"ch= they were awarded monetary #eneGts& NLRC aIrmed the decision of the
La#or Ar#iter& 'etitioner Gled a motion for reconsideration #"t CA dismissed it&
1SSU4$
>hether or not the res!ondents were considered re"lar em!loyees of ABS8CBN&
RUL1NG$
SC r"led that 'rod"ction Assistants -'as. are re"lar wor;ers& Th"s= they are entitled to the
#eneGts in the CBA #etween ABS8CBN and its ran;8and8Gle em!loyees&
1t was held that where a !erson has rendered at least one year of service= reardless of the
nat"re of the activity !erformed= or where the wor; is contin"o"s or intermittent= the
em!loyment is considered re"lar as lon as the activity eAists= the reason #ein that a
c"stomary a!!ointment is not indis!ensa#le #efore one may #e formally declared as havin
attained re"lar stat"s&
The Co"rt states that the !rimary standard= therefore= of determinin re"lar em!loyment is the
reasona#le connection #etween the !artic"lar activity !erformed #y the em!loyee in relation to
the "s"al trade or #"siness of the em!loyer& The test is whether the former is "s"ally necessary
or desira#le in the "s"al #"siness or trade of the em!loyer& The connection can #e determined #y
considerin the nat"re of wor; !erformed and its relation to the scheme of the !artic"lar
#"siness or trade in its entirety& Also= if the em!loyee has #een !erformin the Eo# for at least a
year= even if the !erformance is not contin"o"s and merely intermittent= the law deems re!eated
and contin"in need for its !erformance as s"Icient evidence of the necessity if not
indis!ensa#ility of that activity to the #"siness& ?ence= the em!loyment is considered re"lar=
#"t only with res!ect to s"ch activity and while s"ch activity eAists&
Additionally= res!ondents cannot #e considered as !roEect or !roram em!loyees #eca"se no
evidence was !resented to show that the d"ration and sco!e of the !roEect were determined or
s!eciGed at the time of their enaement& 1n the case at #ar= however= the em!loyer8em!loyee
relationshi! #etween !etitioner and res!ondents has #een !roven& 1n the selection and
enaement of res!ondents= no !ec"liar or "niD"e s;ill= talent or cele#rity stat"s was reD"ired
from them #eca"se they were merely hired thro"h !etitioner<s !ersonnel de!artment E"st li;e
any ordinary em!loyee& Res!ondents did not have the !ower to #arain for h"e talent fees= a
circ"mstance neatin inde!endent contract"al relationshi!& Res!ondents are hihly de!endent
on the !etitioner for contin"ed wor;& The deree of control and s"!ervision eAercised #y
!etitioner over res!ondents thro"h its s"!ervisors neates the alleation that res!ondents are
inde!endent contractors&
The !res"m!tion is that when the wor; done is an interal !art of the re"lar #"siness of the
em!loyer and when the wor;er= relative to the em!loyer= does not f"rnish an inde!endent
#"siness or !rofessional service= s"ch wor; is a re"lar em!loyment of s"ch em!loyee and not
an inde!endent contractor& As re"lar em!loyees= res!ondents are entitled to the #eneGts
ranted to all other re"lar em!loyees of !etitioner "nder the CBA & Besides= only talent8artists
were eAcl"ded from the CBA and not !rod"ction assistants who are re"lar em!loyees of the
res!ondents& Moreover= "nder Article ),+5 of the New Civil Code$ P1n case of do"#t= all la#or
leislation and all la#or contracts shall #e constr"ed in favor of the safety and decent livin of
the la#orer&Q
(rancisco vs. NLRC
G&R& No& ),++3,M A""st *)= 5++0
:ACTS$
Anelina :rancisco was hired #y Kasei Cor!oration d"rin the incor!oration stae& She was
desinated as acco"ntant and cor!orate secretary and was assined to handle all the acco"ntin
needs of the com!any& She was also desinated as Liason OIcer to the City of Manila to sec"re
!ermits for the o!eration of the com!any&
1n )((0= 'etitioner was desinated as Actin Manaer& She was assined to handle recr"itment of
all em!loyees and !erform manaement administration f"nctions& 1n 5++)= she was re!laced #y
Li7a :"entes as Manaer& Kasei Cor!oration red"ced her salary to '5=6++ !er month which was
"ntil Se!tem#er& She as;ed for her salary #"t was informed that she was no loner connected to
the com!any& She did not anymore re!ort to wor; since she was not !aid for her salary& She Gled
an action for constr"ctive dismissal with the La#or Ar#iter&
1SSU4$
>hether or not there was an em!loyer8em!loyee relationshi!&
RUL1NG$
SC held that there was s"ch relationshi!& :rancisco was constr"ctively dismissed& To ascertain if
s"ch relationshi! eAists= the Co"rt "sed two8tiered testOcontrol test and economic reality test&
The co"rt held that in this E"risdiction= there has #een no "niform test to determine the eAistence
of an em!loyer8em!loyee relation& Generally= co"rts have relied on the so8called riht of control
test where the !erson for whom the services are !erformed reserves a riht to control not only
the end to #e achieved #"t also the means to #e "sed in reachin s"ch end& 1n addition to the
standard of riht8of8control= the eAistin economic conditions !revailin #etween the !arties= li;e
the incl"sion of the em!loyee in the !ayrolls= can hel! in determinin the eAistence of an
em!loyer8em!loyee relationshi!&
The #etter a!!roach wo"ld therefore #e to ado!t a two8tiered test involvin$ -). the !"tative
em!loyer<s !ower to control the em!loyee with res!ect to the means and methods #y which the
wor; is to #e accom!lishedM and -5. the "nderlyin economic realities of the activity or
relationshi!&
The co"rt o#served the need to consider the eAistin economic conditions !revailin #etween the
!arties= in addition to the standard of riht8of8control li;e the incl"sion of the em!loyee in the
!ayrolls= to ive a clearer !ict"re in determinin the eAistence of an em!loyer8em!loyee
relationshi! #ased on an analysis of the totality of economic circ"mstances of the wor;er&
Th"s= the determination of the relationshi! #etween em!loyer and em!loyee de!ends "!on the
circ"mstances of the whole economic activity= s"ch as$ -). the eAtent to which the services
!erformed are an interal !art of the em!loyer<s #"sinessM -5. the eAtent of the wor;er<s
investment in eD"i!ment and facilitiesM -*. the nat"re and deree of control eAercised #y the
em!loyerM -2. the wor;er<s o!!ort"nity for !roGt and lossM -6. the amo"nt of initiative= s;ill=
E"dment or foresiht reD"ired for the s"ccess of the claimed inde!endent enter!riseM -0. the
!ermanency and d"ration of the relationshi! #etween the wor;er and the em!loyerM and -,. the
deree of de!endency of the wor;er "!on the em!loyer for his contin"ed em!loyment in that
line of #"siness& The !ro!er standard of economic de!endence is whether the wor;er is
de!endent on the alleed em!loyer for his contin"ed em!loyment in that line of #"siness&
By a!!lyin the control test= there is no do"#t that !etitioner is an em!loyee of Kasei Cor!oration
#eca"se she was "nder the direct control and s"!ervision of SeiEi Kam"ra= the cor!oration<s
Technical Cons"ltant& 1t is therefore a!!arent that !etitioner is economically de!endent on
res!ondent cor!oration for her contin"ed em!loyment in the latter<s line of #"siness&
There can #e no other concl"sion that !etitioner is an em!loyee of res!ondent Kasei Cor!oration&
She was selected and enaed #y the com!any for com!ensation= and is economically
de!endent "!on res!ondent for her contin"ed em!loyment in that line of #"siness& ?er main Eo#
f"nction involved acco"ntin and taA services rendered to Res!ondent Cor!oration on a re"lar
#asis over an indeGnite !eriod of enaement& Res!ondent Cor!oration hired and enaed
!etitioner for com!ensation= with the !ower to dismiss her for ca"se& More im!ortantly=
Res!ondent Cor!oration had the !ower to control !etitioner with the means and methods #y
which the wor; is to #e accom!lished&
Nogales e". al. vs. Capi"ol Me!ical Cen"er e". al.
G&R& No& )25056M Decem#er )(= 5++0
:ACTS$
'renant with her fo"rth child= Cora7on Noales -LCora7onL.= who was then *, years old= was
"nder the eAcl"sive !renatal care of Dr& Oscar 4strada -LDr& 4stradaL. #einnin on her fo"rth
month of !renancy or as early as Decem#er )(,6& Aro"nd midniht of 56 May )(,0= Cora7on
started to eA!erience mild la#or !ains !rom!tin Cora7on and Roelio Noales -LS!o"ses
NoalesL. to see Dr& 4strada at his home& After eAaminin Cora7on= Dr& 4strada advised her
immediate admission to the Ca!itol Medical Center -LCMCL.& t 0$)* a&m&= Cora7on started to
eA!erience conv"lsionsAt 0$55 a&m&= Dr& 4strada= assisted #y Dr& 9illaTor= a!!lied low force!s to
eAtract Cora7onNs #a#y& 1n the !rocess= a )&+ A 5&6 cm& !iece of cervical tiss"e was alleedly
torn&At 0$5, a&m&= Cora7on #ean to manifest moderate vainal #leedin which ra!idly #ecame
!rof"se& Cora7on died at ($)6 a&m& The ca"se of death was Lhemorrhae= !ost !art"m&
1SSU4$
>hether or not the Ca!itol Medical Center is solidarily lia#le&
RUL1NG$
SC held CMC solidarily lia#le toether with Dr& 4strada& The Pdoctrine of a!!arent a"thorityQ was
"sed to ma;e CMC vicario"sly lia#le even if Dr& 4strada is an inde!endent contractor&
'rivate hos!itals= hire= Gre and eAercise real control over their attendin and visitin Lcons"ltantL
staH& The #asis for holdin an em!loyer solidarily res!onsi#le for the nelience of its em!loyee
is fo"nd in Article 5)3+ of the Civil Code which considers a !erson acco"nta#le not only for his
own acts #"t also for those of others #ased on the formerNs res!onsi#ility "nder a relationshi! of
!atria !otestas&
1n eneral= a hos!ital is not lia#le for the nelience of an inde!endent contractor8!hysician&
There is= however= an eAce!tion to this !rinci!le& The hos!ital may #e lia#le if the !hysician is the
Lostensi#leL aent of the hos!ital& This eAce!tion is also ;nown as the Ldoctrine of a!!arent
a"thorityQ&
:or a hos!ital to #e lia#le "nder the doctrine of a!!arent a"thority= a !laintiH m"st show that$ -).
the hos!ital= or its aent= acted in a manner that wo"ld lead a reasona#le !erson to concl"de
that the individ"al who was alleed to #e nelient was an em!loyee or aent of the hos!italM -5.
where the acts of the aent create the a!!earance of a"thority= the !laintiH m"st also !rove that
the hos!ital had ;nowlede of and acD"iesced in themM and -*. the !laintiH acted in reliance
"!on the cond"ct of the hos!ital or its aent= consistent with ordinary care and !r"dence& 1n the
instant case= CMC im!liedly held o"t Dr& 4strada as a mem#er of its medical staH& Thro"h CMCNs
acts= CMC clothed Dr& 4strada with a!!arent a"thority there#y leadin the S!o"ses Noales to
#elieve that Dr& 4strada was an em!loyee or aent of CMC&
Coca%Cola Bo""lers Phils. vs. &r. Cli#aco
G&R& No& )2033)M :e#r"ary 6= 5++,
:ACTS$
Dr& Climaco is a medical doctor who was hired #y the !etitioner #y virt"e of retainer areement&
The areement states that there is no em!loyer8em!loyee relationshi! #etween the !arties& The
retainer areement was renewed ann"ally& The last one eA!ired on Dec& *)= )((*& Des!ite of the
non8renewal of the areement= res!ondent contin"ed to !erform his f"nctions as com!any
doctor "ntil he received a letter in March )((6 concl"din their retainer areement&
Res!ondent Gled a com!laint #efore the NLRC see;in reconition as a re"lar em!loyee of the
!etitioner com!any and !rayed for the !ayment of all #eneGts of a re"lar em!loyee& 1n the
decision of the La#or Ar#iter= the com!any lac;ed control over the res!ondent<s !erformance of
his d"ties& Res!ondent a!!ealed where it rendered that no em!loyer8em!loyee relationshi!
eAisted #etween the !arties&
The CA r"led that an em!loyer8em!loyee relationshi! eAisted&
1SSU4$
RUL1NG$
SC r"led that there is no s"ch relationshi! #etween the !arties&
The Co"rt= in determinin the eAistence of an em!loyer8em!loyee relationshi!= has invaria#ly
adhered to the fo"r8fold test$ -). the selection and enaement of the em!loyeeM -5. the
!ayment of waesM -*. the !ower of dismissalM and -2. the !ower to control the em!loyee<s
cond"ct= or the so8called Pcontrol test=Q considered to #e the most im!ortant element&
The Co"rt arees with the Gndin of the La#or Ar#iter and the NLRC that the circ"mstances of
this case show that no em!loyer8em!loyee relationshi! eAists #etween the !arties& The
Com!rehensive Medical 'lan= !rovided "idelines merely to ens"re that the end res"lt was
achieved= #"t did not control the means and methods #y which res!ondent !erformed his
assined tas;s& 1n addition= the Co"rt Gnds that the sched"le of wor; and the reD"irement to #e
on call for emerency cases do not amo"nt to s"ch control= #"t are necessary incidents to the
Retainershi! Areement&
Considerin that there is no em!loyer8em!loyee relationshi! #etween the !arties= the
termination of the Retainershi! Areement= which is in accordance with the !rovisions of the
Areement= does not constit"te illeal dismissal of res!ondent&
Cala#ba Me!ical Cen"er vs. NLRC e". al.
G&R& No& ),0232M Novem#er 56= 5++3
:ACTS$
The Calam#a Medical Center -!etitioner.= a !rivately8owned hos!ital= enaed the services of
medical doctors8s!o"ses Ronaldo Lan7anas -Dr& Lan7anas. and Merceditha Lan7anas -Dr&
Merceditha. in March )((5 and A""st )((6= res!ectively= as !art of its team of resident
!hysicians& Re!ortin at the hos!ital twice8a8wee; on twenty8fo"r8ho"r shifts= res!ondents were
!aid a monthly LretainerL of '2=3++&++ each& 1t a!!ears that resident !hysicians were also iven
a !ercentae share o"t of fees chared for o"t8!atient treatments= o!eratin room assistance
and dischare #illins= in addition to their GAed monthly retainer&
The wor; sched"les of the mem#ers of the team of resident !hysicians were GAed #y !etitionerNs
medical director Dr& Ra"l Desi!eda -Dr& Desi!eda.& And they were iss"ed identiGcation cards #y
!etitioner and were enrolled in the Social Sec"rity System -SSS.& 1ncome taAes were withheld
from them&
Dr& Mel"7 Trinidad -Dr& Trinidad.= also a resident !hysician at the hos!ital= inadvertently overheard
a tele!hone conversation of res!ondent Dr& Lan7anas with a fellow em!loyee= Diosdado Miscala=
thro"h an eAtension tele!hone line& A!!arently= Dr& Lan7anas and Miscala were disc"ssin the
low Lcens"sL or admission of !atients to the hos!ital&
Dr& Trinidad iss"ed to Dr& Lan7anas a memorand"m as;in her to eA!lain within 52 ho"rs why no
disci!linary action sho"ld #e ta;en aainst him& 'endin investiation= he was !laced "nder a *+8
day !reventive s"s!ension&
1neA!lica#ly= !etitioner did not ive res!ondent Dr& Merceditha= who was not involved in the said
incident= any wor; sched"le after sendin her h"s#and Dr& Lan7anas the memorand"m= nor
inform her the reason therefor= al#eit she was later informed #y the ?"man Reso"rce
De!artment -?RD. oIcer that that was !art of !etitionerNs cost8c"ttin meas"res&
Dr& Lan7anas Gled a com!laint for illeal s"s!ension #efore the National La#or Relations
Commission -NLRC.8Reional Ar#itration Board -RAB. 19& Dr& Merceditha s"#seD"ently Gled a
com!laint for illeal dismissal&
1SSU4$
>hether or not there eAists an em!loyer8em!loyee relationshi! #etween !etitioner and the
s!o"ses8res!ondents&
>hether or not the s!o"ses8res!ondents were leally dismissed&
RUL1NG$
SC held that there eAists s"ch relationshi!& The s!o"ses8res!ondents were illeally dismissed&
On the Grst iss"e
Under the Lcontrol test=L an em!loyment relationshi! eAists #etween a !hysician and a hos!ital if
the hos!ital controls #oth the means and the details of the !rocess #y which the !hysician is to
accom!lish his tas;&
As !riorly stated= !rivate res!ondents maintained s!eciGc wor;8sched"les= as determined #y
!etitioner thro"h its medical director= which consisted of 528ho"r shifts totalin forty8eiht
ho"rs each wee; and which were strictly to #e o#served "nder !ain of administrative sanctions&
That !etitioner eAercised control over res!ondents ains liht from the "ndis!"ted fact that in
the emerency room= the o!eratin room= or any de!artment or ward for that matter=
res!ondentsN wor; is monitored thro"h its n"rsin s"!ervisors= chare n"rses and orderlies&
>itho"t the a!!roval or consent of !etitioner or its medical director= no o!erations can #e
"nderta;en in those areas& :or control test to a!!ly= it is not essential for the em!loyer to
act"ally s"!ervise the !erformance of d"ties of the em!loyee= it #ein eno"h that it has the
riht to wield the !ower&
On the second iss"e
'etitioner th"s failed to o#serve the two reD"irements=#efore dismissal can #e eHected U notice
and hearin U which constit"te essential elements of the stat"tory !rocessM the Grst to a!!rise
the em!loyee of the !artic"lar acts or omissions for which his dismissal is so"ht= and the
second to inform the em!loyee of the em!loyerNs decision to dismiss him& Non8o#servance of
these reD"irements r"ns afo"l of the !roced"ral mandate&
The termination notice sent to and received #y Dr& Lan7anas on A!ril 56= )((3 was the Grst and
only time that he was a!!rised of the reason for his dismissal& ?e was not aHorded= however=
even the slihtest o!!ort"nity to eA!lain his side& ?is was a Ltermination "!on recei!tL sit"ation&
>hile he was !riorly made to eA!lain on his tele!hone conversation with Miscala= he was not with
res!ect to his s"!!osed !artici!ation in the stri;e and fail"re to heed the ret"rn8to8wor; order&
As for the case of Dr& Merceditha= her dismissal was worse= it havin #een eHected witho"t any
E"st or a"thori7ed ca"se and witho"t o#servance of d"e !rocess& 1n fact= !etitioner never
!roferred any valid ca"se for her dismissal eAce!t its view that Lher marriae to VDr& Lan7anasW
has iven rise to the !res"m!tion that her sym!athVyW VisW with her h"s#andM Vand that when VDr&
Lan7anasW declared that he was oin to #oycott the sched"lin of their wor;load #y the medical
doctor= he was !res"med to #e s!ea;in for himself VandW for his wife Merceditha&L
Escasinas e". al. vs. Shangri%la
G&R& No& ),335,M March 2= 5++(
:ACTS$
Reistered n"rses %eromie D& 4scasinas and 4van Rior Sinco -!etitioners. were enaed in
)((( and )((0= res!ectively= #y Dr& %essica %oyce R& 'e!ito -res!ondent doctor. to wor; in her
clinic at res!ondent Shanri8la<s Mactan 1sland Resort -Shanri8la. in Ce#" of which she was a
retained !hysician&
1n late 5++5= !etitioners Gled with the NLRC a com!laint for re"lari7ation= "nder!ayment of
waes= non8!ayment of holiday !ay= niht shift diHerential and )*th month !ay diHerential
aainst res!ondents= claimin that they are re"lar em!loyees of Shanri8la& Shanri8la claimed=
however= that !etitioners were not its em!loyees #"t of res!ondent doctor whom it retained via
Memorand"m of Areement -MOA. !"rs"ant to Article )6, of the La#or Code= as amended&
Res!ondent doctor for her !art claimed that !etitioners were already wor;in for the !revio"s
retained !hysicians of Shanri8la #efore she was retained #y Shanri8laM and that she maintained
!etitioners< services "!on their reD"est&
1SSU4$
>hether or not there was an em!loyee8em!loyer relationshi! #etween Shanri8La and the
!etitioners&
>hether or not Dr& 'e!ito is an inde!endent contractor
RUL1NG$
SC r"led that there no s"ch relationshi!& The !etitioners are "nder the direct s"!ervision of Dr&
'e!ito= an inde!endent contractor&
On the Grst iss"e
The resol"tion of the case hines= in the main= on the correct inter!retation of Art& )6, vis a vis
Art& 53+ and the !rovisions on !ermissi#le Eo# contractin of the La#or Code= as amended&
Under the foreoin !rovision= Shanri8la= which em!loys more than 5++ wor;ers= is mandated to
Pf"rnishQ its em!loyees with the services of a f"ll8time reistered n"rse= a !art8time !hysician
and dentist= and an emerency clinic which means that it sho"ld !rovide or ma;e availa#le s"ch
medical and allied services to its em!loyees= not necessarily to hire or em!loy a service !rovider&
The term Pf"ll8timeQ in Art& )6, cannot #e constr"ed as referrin to the ty!e of em!loyment of
the !erson enaed to !rovide the services= for Article )6, m"st not #e read alonside Art&
53+V(W in order to vest em!loyer8em!loyee relationshi! on the em!loyer and the !erson so
enaed& The !hrase Pservices of a f"ll8time reistered n"rseQ sho"ld th"s #e ta;en to refer to
the ;ind of services that the n"rse will render in the com!any<s !remises and to its em!loyees=
not the manner of his enaement&
On the second iss"e
The eAistence of an inde!endent and !ermissi#le contractor relationshi! is enerally esta#lished
#y considerin the followin determinants$ whether the contractor is carryin on an inde!endent
#"sinessM the nat"re and eAtent of the wor;M the s;ill reD"iredM the term and d"ration of the
relationshi!M the riht to assin the !erformance of a s!eciGed !iece of wor;M the control and
s"!ervision of the wor; to anotherM the em!loyerNs !ower with res!ect to the hirin= Grin and
!ayment of the contractorNs wor;ersM the control of the !remisesM the d"ty to s"!!ly the
!remises= tools= a!!liances= materials and la#orM and the mode= manner and terms of !ayment&
Aainst the a#ove8listed determinants= the Co"rt holds that res!ondent doctor is a leitimate
inde!endent contractor& That Shanri8la !rovides the clinic !remises and medical s"!!lies for
"se of its em!loyees and "ests do not necessarily !rove that res!ondent doctor lac;s
s"#stantial ca!ital and investment& Besides= the maintenance of a clinic and !rovision of medical
services to its em!loyees is reD"ired "nder Art& )6,= which are not directly related to Shanri8la<s
!rinci!al #"siness S o!eration of hotels and resta"rants&
)ong*o vs. )he Manufac"urer+s Life Insurance Co., Inc. Nove#ber -, .//0
G&R& No& )0,055= Novem#er +,= 5++3
:ACTS$
Man"fact"rers Life 1ns"rance Co& -'hils&.= 1nc& -Man"life. is a domestic cor!oration enaed in life
ins"rance #"siness&Renato A& 9erel De Dios was= d"rin the !eriod material= its 'resident and
Chief 4Aec"tive OIcer& Greorio 9& Ton;o started his !rofessional relationshi! with Man"life on
%"ly )= )(,, #y virt"e of a Career AentNs Areement -Areement. he eAec"ted with Man"life& 1n
the Areement= it is !rovided that$ 1t is "nderstood and areed that the Aent is an inde!endent
contractor and nothin contained herein shall #e constr"ed or inter!reted as creatin an
em!loyer8em!loyee relationshi! #etween the Com!any and the Aent& The Com!any may
terminate this Areement for any #reach or violation of any of the !rovisions hereof #y the Aent
#y ivin written notice to the Aent within Gfteen -)6. days from the time of the discovery of
the #reach& No waiver= eAtin"ishment= a#andonment= withdrawal or cancellation of the riht to
terminate this Areement #y the Com!any shall #e constr"ed for any !revio"s fail"re to eAercise
its riht "nder any !rovision of this Areement&
4ither of the !arties hereto may li;ewise terminate his Areement at any time witho"t ca"se= #y
ivin to the other !arty Gfteen -)6. days notice in writin& 1n )(3*= Ton;o was named as a Unit
Manaer in Man"lifeNs Sales Aency Orani7ation& 1n )((+= he #ecame a Branch Manaer& As the
CA fo"nd= Ton;oNs ross earnins from his wor; at Man"life= consistin of commissions=
!ersistency income= and manaement overrides& The !ro#lem started sometime in 5++)= when
Man"life instit"ted man!ower develo!ment !rorams in the reional sales manaement level&
Relative thereto= De Dios addressed a letter dated Novem#er 0= 5++) to Ton;o reardin an
Octo#er )3= 5++) Metro North Sales Manaers Meetin& Statin that Ton;o<s Reion was the
lowest !erformer -on a !er Manaer #asis. in terms of recr"itin in 5+++ and= as of today=
contin"es to remain one of the laards in this area&
Other iss"es were$LSome Manaers are "nha!!y with their earnins and wo"ld want to revert to
the !osition of aents&L And LSales Manaers are doin what the com!any as;s them to do #"t=
in the !rocess= they earn less&L Ton;o was then terminated& Therefrom= Ton;o Gled a Com!laint
dated Novem#er 56= 5++5 with the NLRC aainst Man"life for illeal dismissal in the Com!laint&
1n a Decision dated A!ril )6= 5++2= La#or Ar#iter dismissed the com!laint for lac; of an em!loyer8
em!loyee relationshi!& The NLRCNs :irst Division= while Gndin an em!loyer8em!loyee
relationshi! #etween Man"life and Ton;o a!!lyin the fo"r8fold test= held Man"life lia#le for
illeal dismissal& Th"s= Man"life Gled an a!!eal with the CA& Thereafter= the CA iss"ed the
assailed Decision dated March 5(= 5++6= Gndin the a#sence of an em!loyer8em!loyee
relationshi! #etween the !arties and deemin the NLRC with no E"risdiction over the
case&?ence= Ton;o Gled this !etition&
1SSU4S$
)&>ON Ton;o was an em!loyee of Man"life
5&>ON Ton;o was illeally dismissed&
RUL1NG$
)& Bes
1n the instant case= Man"life had the !ower of control over Ton;o that wo"ld ma;e him its
em!loyee& Several factors contri#"te to this concl"sion& 1n the Areement dated %"ly )= )(,,
eAec"ted #etween Ton;o and Man"life= it is !rovided that$ The Aent here#y arees to com!ly
with all re"lations and reD"irements of the Com!any as herein !rovided as well as maintain a
standard of ;nowlede and com!etency in the sale of the Com!anyNs !rod"cts which satisGes
those set #y the Com!any and s"Iciently meets the vol"me of new #"siness reD"ired of
'rod"ction Cl"# mem#ershi!&Under this !rovision= an aent of Man"life m"st com!ly with three
-*. reD"irements$ -). com!liance with the re"lations and reD"irements of the com!anyM -5.
maintenance of a level of ;nowlede of the com!anyNs !rod"cts that is satisfactory to the
com!anyM and -*. com!liance with a D"ota of new #"sinesses& Amon the com!any re"lations
of Man"life are the diHerent codes of cond"ct s"ch as the Aent Code of Cond"ct= Man"life
:inancial Code of Cond"ct= and Man"life :inancial Code of Cond"ct Areement= which
demonstrate the !ower of control eAercised #y the com!any over Ton;o& The fact
that Ton;o was o#lied to o#ey and com!ly with the codes of cond"ct was not disowned #y
res!ondents& Th"s= with the com!any re"lations and reD"irements alone= the fact that
Ton;o was an em!loyee of Man"life may already #e esta#lished& Certainly= these reD"irements
controlled the means and methods #y which Ton;o was to achieve the com!anyNs oals&
More im!ortantly= Man"lifeNs evidence esta#lishes the fact that Ton;o was tas;ed to !erform
administrative d"ties that esta#lishes his em!loyment with Man"life& Additionally= it m"st #e
!ointed o"t that the fact that Ton;o was tas;ed with recr"itin a certain n"m#er of aents= in
addition to his other administrative f"nctions= leads to no other concl"sion that he was an
em!loyee of Man"life&
5& Bes
1n its 'etition for Certiorari dated %an"ary ,= 5++6V50W Gled #efore the CA= Man"life ar"ed that
even if Ton;o is considered as its em!loyee= his em!loyment was validly terminated on the
ro"nd of ross and ha#it"al nelect of d"ties= ineIciency= as well as willf"l diso#edience of the
lawf"l orders of Man"life& Man"life stated$ 1n the instant case= !rivate res!ondent= des!ite the
written reminder from Mr& De Dios ref"sed to sha!e "! and altoether disrearded the latterNs
advice res"ltin in his laard !erformance clearly indicative of his willf"l diso#edience of the
lawf"l orders of his s"!erior& As !rivate res!ondent has !atently failed to !erform a very
f"ndamental d"ty= and that is to yield o#edience to all reasona#le r"les= orders and instr"ctions
of the Com!any= as well as ross fail"re to reach at least minim"m D"ota= the termination of his
enaement from Man"life is hihly warranted and therefore= there is no illeal dismissal to
s!ea; of& 1t is readily evident from the a#ove8D"oted !ortions of Man"lifeNs !etition that it failed
to cite a sinle iota of evidence to s"!!ort its claims& Man"life did not even !oint o"t which order
or r"le that Ton;o diso#eyed& More im!ortantly= Man"life did not !oint o"t the s!eciGc acts
that Ton;o was "ilty of that wo"ld constit"te ross and ha#it"al nelect of d"ty or
diso#edience& Man"life merely cited Ton;oNs alleed Llaard !erformance=L witho"t
s"#stantiatin s"ch claim= and eD"ated the same to diso#edience and nelect of d"ty& A!ro!os
thereto= Art& 5,,= !ar& -#.= of the La#or Code mandates in eA!licit terms that the #"rden of
!rovin the validity of the termination of em!loyment rests on the em!loyer& :ail"re to dischare
this evidential #"rden wo"ld necessarily mean that the dismissal was not E"stiGed= and=
therefore= illeal& The La#or Code !rovides that an em!loyer may terminate the services of an
em!loyee for E"st ca"se and this m"st #e s"!!orted #y s"#stantial evidence& The settled r"le in
administrative and D"asi8E"dicial !roceedins is that !roof #eyond reasona#le do"#t is not
reD"ired in determinin the leality of an em!loyerNs dismissal of an em!loyee= and not even a
!re!onderance of evidence is necessary as s"#stantial evidence is considered s"Icient&
S"#stantial evidence is more than a mere scintilla of evidence or relevant evidence as a
reasona#le mind miht acce!t as adeD"ate to s"!!ort a concl"sion= even if other minds= eD"ally
reasona#le= miht conceiva#ly o!ine otherwise& ?ere= Man"life failed to overcome s"ch #"rden of
!roof& 1t m"st #e reiterated that Man"life even failed to identify the s!eciGc acts #y
which Ton;oNs em!loyment was terminated m"ch less s"!!ort the same with s"#stantial
evidence&To re!eat= mere conEect"res cannot wor; to de!rive em!loyees of their means of
livelihood& Th"s= it m"st #e concl"ded that Ton;o was illeally dismissed& Moreover= as to
Man"lifeNs fail"re to com!ly with the twin notice r"le= it reasons that Ton;o not #ein its
em!loyee is not entitled to s"ch notices& Since we have r"led that Ton;o is its em!loyee=
however= Man"life clearly failed to aHord Ton;o said notices& Th"s= on this ro"nd too= Man"life
is "ilty of illeal dismissal&
Caong 1r. vs. Begualos
G&R& No& ),(253 %an"ary 50= 5+))
:ACTS$
Caon was hired #y res!ondent in Se!tem#er )((3 and #ecame a !ermanent driver sometime in
5+++& 1n %"ly 5++)= he was assined a #rand8new Eee!ney for a #o"ndary fee of '66+&++ !er day&
?e was s"s!ended on Octo#er (8)6= 5++) for fail"re to remit the f"ll amo"nt of the #o"ndary&
ConseD"ently= he Gled a com!laint for illeal s"s!ension& U!on eA!iration of the s"s!ension
!eriod= he was readmitted #y res!ondent= #"t he was reassined to an older Eee!ney for a
#o"ndary fee of '6++&++ !er day& ?e claimed that= on Novem#er (= 5++)= d"e to the scarcity of
!asseners= he was only a#le to remit '2++&++ to res!ondent& On Novem#er ))= 5++)= he
ret"rned to wor; after his rest day= #"t res!ondent #arred him from drivin #eca"se of the
deGciency in the #o"ndary !ayment& ?e !leaded with res!ondent #"t to no avail&
TresD"io was em!loyed #y res!ondent as driver in A""st )((0& ?e #ecame a !ermanent driver
in )((,& 1n )((3= he was assined to drive a new Eee!ney for a #o"ndary fee of '6++&++ !er day&
On Novem#er 0= 5++)= d"e to the scarcity of !asseners= he was only a#le to remit '26+&++&
>hen he ret"rned to wor; on Novem#er 3= 5++) after his rest day= he was #arred #y res!ondent
#eca"se of the deGciency of '6+&++& ?e !leaded with res!ondent #"t the latter was adamant&
On the other hand= Dal"yon started wor;in for res!ondent in March )((3& ?e #ecame a
!ermanent driver in %"ly )((3& ?e was assined to a relatively new Eee!ney for a #o"ndary fee of
'6++&++ !er day& On Novem#er ,= 5++)= d"e to the scarcity of !asseners= he was only a#le to
!ay '2,+&++ to res!ondent& The followin day= res!ondent #arred him from drivin his Eee!ney&
?e !leaded #"t to no avail&
'etitioners averred that they were illeally dismissed #y res!ondent witho"t E"st ca"se& They
maintained that res!ondent did not com!ly with d"e !rocess reD"irements #efore terminatin
their em!loyment= as they were not f"rnished notice a!!risin them of their infractions and
another informin them of their dismissal& 'etitioners claimed that res!ondentNs oHer d"rin the
mandatory conference to reinstate them was an insincere aftertho"ht as shown #y the warnin
iven #y res!ondent that= if they fail to remit the f"ll amo"nt of the #o"ndary yet aain= they will
#e #arred from drivin the Eee!neys& 'etitioners D"estioned res!ondentNs !olicy of a"tomatically
dismissin the drivers who fail to remit the f"ll amo"nt of the #o"ndary as it alleedly -a. violates
their riht to d"e !rocessM -#. does not constit"te a E"st ca"se for dismissalM -c. disreards the
reality that there are days when they co"ld not raise the f"ll amo"nt of the #o"ndary #eca"se of
the scarcity of !asseners&
1n his 'osition 'a!er= res!ondent alleed that !etitioners were lessees of his vehicles and not his
em!loyeesM hence= the La#or Ar#iter had no E"risdiction& ?e claimed that he noticed that some of
his lessees= incl"din !etitioners= were not f"lly !ayin the daily rental of his Eee!neys& 1n a list
which he attached to the 'osition 'a!er= it was shown that !etitioners had act"ally inc"rred
arrears since they started wor;in& Res!ondent stressed that= d"rin the mandatory conference=
he manifested that he wo"ld renew his lease with !etitioners if they wo"ld !ay the arrears they
inc"rred d"rin the said dates&
Accordin to the La#or Ar#iter= an em!loyer8em!loyee relationshi! eAisted #etween res!ondent
and !etitioners& The latter were not dismissed considerin that they co"ld o #ac; to wor; once
they have !aid their arrears& The La#or Ar#iter o!ined that= as a disci!linary meas"re= it is !ro!er
to im!ose a reasona#le sanction on drivers who cannot !ay their #o"ndary !ayments& ?e
em!hasi7ed that res!ondent acD"ired the Eee!neys on loan or installment #asis and relied on the
#o"ndary !ayments to com!ly with his monthly amorti7ations&
'etitioners a!!ealed the decision to the National La#or Relations Commission -NLRC.& 1n its
resol"tion dated March *)= 5++2= the NLRC areed with the La#or Ar#iter and dismissed the
a!!eal& 1t also denied !etitionersN motion for reconsideration&
1SSU4$
>hether or not there was an eAistin em!loyer8em!loyee relationshi! and whether the
!etitioners were illeally dismissed&
RUL1NG$
The !etition is witho"t merit&
1t is already settled that the relationshi! #etween Eee!ney ownersJo!erators and Eee!ney drivers
"nder the #o"ndary system is that of em!loyer8em!loyee and not of lessor8lessee& The fact that
the drivers do not receive GAed waes #"t only et the amo"nt in eAcess of the so8called
L#o"ndaryL that they !ay to the ownerJo!erator is not s"Icient to neate the relationshi!
#etween them as em!loyer and em!loyee&
>e have no reason to deviate from s"ch Gndins& 1ndeed= !etitionersN s"s!ension cannot #e
cateori7ed as dismissal= considerin that there was no intent on the !art of res!ondent to sever
the em!loyer8em!loyee relationshi! #etween him and !etitioners& 1n fact= it was made clear that
!etitioners co"ld !"t an end to the s"s!ension if they only !ay their recent arrears& As it was= the
s"s!ension draed on for years #eca"se of !etitionersN st"##orn ref"sal to !ay& 1t wo"ld have
#een diHerent if !etitioners com!lied with the condition and res!ondent still ref"sed to readmit
them to wor;& Then there wo"ld have #een a clear act of dismissal& B"t s"ch was not the case&
1nstead of !ayin= !etitioners even Gled a com!laint for illeal dismissal aainst res!ondent&
1t is ac;nowleded that an em!loyer has free rein and enEoys wide latit"de of discretion to
re"late all as!ects of em!loyment= incl"din the !reroative to instill disci!line on his
em!loyees and to im!ose !enalties= incl"din dismissal= if warranted= "!on errin em!loyees&
This is a manaement !reroative& 1ndeed= the manner in which manaement cond"cts its own
aHairs to achieve its !"r!ose is within the manaementNs discretion& The only limitation on the
eAercise of manaement !reroative is that the !olicies= r"les= and re"lations on wor;8related
activities of the em!loyees m"st always #e fair and reasona#le= and the corres!ondin !enalties=
when !rescri#ed= commens"rate to the oHense involved and to the deree of the infraction&
Under a #o"ndary scheme= the driver remits the L#o"ndary=L which is a GAed amo"nt= to the
ownerJo!erator and ets to earn the amo"nt in eAcess thereof& Th"s= on a day when there are
many !asseners alon the ro"te= it is the driver who act"ally #eneGts from it& 1t wo"ld #e "nfair
then if= d"rin the times when !asseners are scarce= the ownerJo!erator will #e made to s"Her
#y not ettin the f"ll amo"nt of the #o"ndary& Unless clearly shown or eA!lained #y an event
that irre"larly and neatively aHected the "s"al n"m#er of !asseners within the ro"te= the
scarcity of !asseners sho"ld not eAc"se the driver from !ayin the f"ll amo"nt of the #o"ndary&
A"o* Big 2e!ge Co#pan vs. Gison
G&R& No& )0(6)+ A""st 3= 5+))
:ACTS$
Sometime in :e#r"ary )((5= res!ondent %es"s '& Gison was enaed as !art8time cons"ltant on
retainer #asis #y !etitioner Ato; Bi >ede Com!any= 1nc& thro"h its then Asst& 9ice8'resident
and Actin Resident Manaer= R"tillo A& Torres& As a cons"ltant on retainer #asis= res!ondent
assisted !etitionerNs retained leal co"nsel with matters !ertainin to the !rosec"tion of cases
aainst illeal s"rface occ"!ants within the area covered #y the com!anyNs mineral claims&
Res!ondent was li;ewise tas;ed to !erform liaison wor; with several overnment aencies=
which he said was his eA!ertise&
Sometime thereafter= since res!ondent was ettin old= he reD"ested that !etitioner ca"se his
reistration with the Social Sec"rity System -SSS.= #"t !etitioner did not accede to his reD"est&
?e later reiterated his reD"est #"t it was inored #y res!ondent considerin that he was only a
retainerJcons"ltant& On :e#r"ary 2= 5++*= res!ondent Gled a Com!laint with the SSS aainst
!etitioner for the latterNs ref"sal to ca"se his reistration with the SSS&
On the same date= Mario D& Cera= in his ca!acity as resident manaer of !etitioner= iss"ed a
Memorand"m advisin res!ondent that within *+ days from recei!t thereof= !etitioner is
terminatin his retainer contract with the com!any since his services are no loner necessary&
On Se!tem#er 50= 5++*= after the !arties have s"#mitted their res!ective !leadins= La#or
Ar#iter Rolando D& Gam#ito rendered a Decision r"lin in favor of the !etitioner& :indin no
em!loyer8em!loyee relationshi! #etween !etitioner and res!ondent= the La#or Ar#iter dismissed
the com!laint for lac; of merit&
On %"ly *+= 5++2= the NLRC= Second Division= iss"ed a Resol"tion aIrmin the decision of the
La#or Ar#iter& Res!ondent Gled a Motion for Reconsideration= #"t it was denied in the Resol"tion
dated Se!tem#er *+= 5++2&
1SSU4S$
>hether or not there was an em!loyer8em!loyee relationshi!&
RUL1NG$
To ascertain the eAistence of em!loyer8em!loyee relationshi! E"ris!r"dence has invaria#ly
adhered to the fo"r8fold test= to wit$ -). the selection and enaement of the em!loyeeM -5. the
!ayment of waesM -*. the !ower of dismissalM and -2. the !ower to control the em!loyeeNs
cond"ct= or the so8called Lcontrol test&L Of these fo"r= the last one is the most im!ortant& The so8
called Lcontrol testL is commonly rearded as the most cr"cial and determinative indicator of the
!resence or a#sence of an em!loyer8em!loyee relationshi!& Under the control test= an em!loyer8
em!loyee relationshi! eAists where the !erson for whom the services are !erformed reserves the
riht to control not only the end achieved= #"t also the manner and means to #e "sed in reachin
that end&
A!!lyin the aforementioned test= an em!loyer8em!loyee relationshi! is a!!arently a#sent in the
case at #ar& Amon other thins= res!ondent was not reD"ired to re!ort everyday d"rin re"lar
oIce ho"rs of !etitioner& Res!ondentNs monthly retainer fees were !aid to him either at his
residence or a local resta"rant& More im!ortantly= !etitioner did not !rescri#e the manner in
which res!ondent wo"ld accom!lish any of the tas;s in which his eA!ertise as a liaison oIcer
was neededM res!ondent was left alone and iven the freedom to accom!lish the tas;s "sin his
own means and method& Res!ondent was assined tas;s to !erform= #"t !etitioner did not
control the manner and methods #y which res!ondent !erformed these tas;s& 9erily= the
a#sence of the element of control on the !art of the !etitioner enenders a concl"sion that he is
not an em!loyee of the !etitioner&
Contrary to the concl"sion of the CA= res!ondent is not an em!loyee= m"ch more a re"lar
em!loyee of !etitioner& The a!!ellate co"rtNs !remise that re"lar em!loyees are those who
!erform activities which are desira#le and necessary for the #"siness of the em!loyer is not
determinative in this case& 1n fact= any areement may !rovide that one !arty shall render
services for and in #ehalf of another= no matter how necessary for the latterNs #"siness= even
witho"t #ein hired as an em!loyee& ?ence= res!ondentNs lenth of service and !etitionerNs
re!eated act of assinin res!ondent some tas;s to #e !erformed did not res"lt to res!ondentNs
entitlement to the rihts and !rivilees of a re"lar em!loyee&
:"rthermore= des!ite the fact that !etitioner made "se of the services of res!ondent for eleven
years= he still cannot #e considered as a re"lar em!loyee of !etitioner& Article 53+ of the La#or
Code= in which the lower co"rt "sed to #"ttress its Gndins that res!ondent #ecame a re"lar
em!loyee of the !etitioner= is not a!!lica#le in the case at #ar& 1ndeed= the Co"rt has r"led that
said !rovision is not the yardstic; for determinin the eAistence of an em!loyment relationshi!
#eca"se it merely distin"ishes #etween two ;inds of em!loyees= i&e&= re"lar em!loyees and
cas"al em!loyees= for !"r!oses of determinin the riht of an em!loyee to certain #eneGts= to
Eoin or form a "nion= or to sec"rity of ten"reM it does not a!!ly where the eAistence of an
em!loyment relationshi! is in dis!"te& 1t is= therefore= erroneo"s on the !art of the Co"rt of
A!!eals to rely on Article 53+ in determinin whether an em!loyer8em!loyee relationshi! eAists
#etween res!ondent and the !etitioner&
Considerin that there is no em!loyer8em!loyee relationshi! #etween the !arties= the
termination of res!ondentNs services #y the !etitioner after d"e notice did not constit"te illeal
dismissal warrantin his reinstatement and the !ayment of f"ll #ac;waes= allowances and other
#eneGts&
Se#blan"e e" al., vs. Cour" of Appeals, e" al.
G&R& No& )(0250 A""st )6= 5+))
:ACTS$
'etitioners Marticio Sem#lante -Sem#lante. and D"#ric; 'ilar -'ilar. assert that they were hired
#y res!ondents8s!o"ses 9icente and Maria L"isa Loot= the owners of Gallera de Manda"e -the
coc;!it.= as the oIcial masiador and sentenciador= res!ectively= of the coc;!it sometime in
)((*&
As the masiador= Sem#lante calls and ta;es the #ets from the amecoc; owners and other
#ettors and orders the start of the coc;Ght& ?e also distri#"tes the winnins after ded"ctin the
arri#a= or the commission for the coc;!it& Meanwhile= as the sentenciador= 'ilar oversees the
!ro!er aIn of Ghtin coc;s= determines the Ghtin coc;sN !hysical condition and ca!a#ilities
to contin"e the coc;Ght= and event"ally declares the res"lt of the coc;Ght&
They wor; every T"esday= >ednesday= Sat"rday= and S"nday every wee;= eAcl"din monthly
der#ies and coc;Ghts held on s!ecial holidays& Their wor;in days start at )$++ !&m& and last
"ntil )5$++ midniht= or "ntil the early ho"rs of the mornin de!endin on the needs of the
coc;!it& 'etitioners had #oth #een iss"ed em!loyeesN identiGcation cards that they wear every
time they re!ort for d"ty& They alleed never havin inc"rred any infraction andJor violation of
the coc;!it r"les and re"lations&
On Novem#er )2= 5++*= however= !etitioners were denied entry into the coc;!it "!on the
instr"ctions of res!ondents= and were informed of the termination of their services eHective that
date& This !rom!ted !etitioners to Gle a com!laint for illeal dismissal aainst res!ondents&
La#or Ar#iter %"lie C& RendoD"e fo"nd !etitioners to #e re"lar em!loyees of res!ondents as they
!erformed wor; that was necessary and indis!ensa#le to the "s"al trade or #"siness of
res!ondents for a n"m#er of years& The La#or Ar#iter also r"led that !etitioners were illeally
dismissed= and so ordered res!ondents to !ay !etitioners their #ac;waes and se!aration !ay&
The res!ondents Gled an A!!eal d"rin the )+8day a!!eal !eriod #"t was "na#le to !ost a cash
or s"rety #ond& Th"s for an "n!erfected a!!eal the NLRC dismissed the same& 1t was only on
Octo#er ))= 5++0 they were a#le to !ost #ond dated Octo#er 0= 5++0& The NLRC r"led on the
Motion for Reconsideration altho"h there was #elated Glin of the cash or s"rety #ond& The
NLRC held in its Resol"tion of Octo#er )3= 5++0 that there was no em!loyer8em!loyee
relationshi! #etween !etitioners and res!ondents= res!ondents havin no !art in the selection
and enaement of !etitioners= and that no se!arate individ"al contract with res!ondents was
ever eAec"ted #y !etitioners&
1SSU4S$
>hether or not the A!!eal has #een !erfected even after a #elated Glin of the cash or s"rety
#ond&
>hether or not there was an em!loyer8em!loyee relationshi! #etween the !etitioner and
res!ondent&
RUL1NG$
Time and aain= however= this Co"rt= considerin the s"#stantial merits of the case= has relaAed
this r"le on= and eAc"sed the late !ostin of= the a!!eal #ond when there are stron and
com!ellin reasons for the li#erality= s"ch as the !revention of miscarriae of E"stice eAtant in
the case or the s!ecial circ"mstances in the case com#ined with its leal merits or the amo"nt
and the iss"e involved& After all= technical r"les cannot !revent co"rts from eAercisin their
d"ties to determine and settle= eD"ita#ly and com!letely= the rihts and o#liations of the
!arties& This is one case where the eAce!tion to the eneral r"le lies&
>hile res!ondents had failed to !ost their #ond within the )+8day !eriod !rovided a#ove= it is
evident= on the other hand= that !etitioners are NOT em!loyees of res!ondents= since their
relationshi! fails to !ass m"ster the fo"r8fold test of em!loyment >e have re!eatedly mentioned
in co"ntless decisions$ -). the selection and enaement of the em!loyeeM -5. the !ayment of
waesM -*. the !ower of dismissalM and -2. the !ower to control the em!loyeeNs cond"ct= which is
the most im!ortant element&
As fo"nd #y #oth the NLRC and the CA= res!ondents had no !art in !etitionersN selection and
manaementM !etitionersN com!ensation was !aid o"t of the arri#a -which is a !ercentae
ded"cted from the total #ets.= not #y !etitionersM and !etitioners !erformed their f"nctions as
masiador and sentenciador free from the direction and control of res!ondents& 1n the cond"ct of
their wor;= !etitioners relied mainly on their LeA!ertise that is characteristic of the coc;Ght
am#lin=L and were never iven #y res!ondents any tool needed for the !erformance of their
wor;&
Res!ondents= therefore= co"ld never have #een illeally dismissed since they are not em!loyees
of the res!ondents&
1ose Mel Bernar"e vs. Philippine Bas*e"ball Associa"ion 3PBA4, 1ose E##anuel Eala,
an! Perr Mar"ine$
G&R& No& )(5+32& Se!tem#er )2= 5+))
:ACTS$
Com!lainants -%ose Mel Bernarte and Renato G"evarra. aver that they were invited to Eoin the
'BA as referees& D"rin the term of Commissioner 4ala= however= chanes were made on the
terms of their em!loyment& Bernarte= for instance= was not made to sin a contract d"rin the
Grst conference of the All8:ili!ino C"! which was from :e#r"ary 5*= 5++* to %"ne 5++*& 1t was
only d"rin the second conference when he was made to sin a one and a half month contract
for the !eriod %"ly ) to A""st 6= 5++*& On %an"ary )6= 5++2= Bernarte received a letter from the
OIce of the Commissioner advisin him that his contract wo"ld not #e renewed citin his
"nsatisfactory !erformance on and oH the co"rt& On the other hand= com!lainant G"evarra
allees that he was invited to Eoin the 'BA !ool of referees in :e#r"ary 5++)= and sined a
contract as a trainee on March )= 5++)& Beinnin 5++5= he sined a yearly contract as Re"lar
Class C referee& On May 0= 5++*= res!ondent Martine7 iss"ed a memorand"m to G"evarra
eA!ressin dissatisfaction over his D"estionin on the assinment of referees oIciatin o"t8of8
town ames& Beinnin :e#r"ary 5++2= he was no loner made to sin a contract&
Res!ondents aver that com!lainants were not illeally dismissed #eca"se they were not
em!loyees of the 'BA&
*) March 5++6 Decision= the La#or Ar#iter declared !etitioner an em!loyee whose dismissal #y
res!ondents was illeal= orderin reinstatement of !etitioner and the !ayment of #ac;waes=
moral and eAem!lary damaes= and attorney<s fees&
53 %an"ary 5++3 Decision= the NLRC aIrmed the La#or Ar#iterNs E"dment& The Co"rt of A!!eals
fo"nd !etitioner an inde!endent contractor since res!ondents did not eAercise any form of
control over the means and methods #y which !etitioner !erformed his wor; as a #as;et#all
referee&
1SSU4S$
>hether !etitioner is an em!loyee of res!ondents= which in t"rn determines whether !etitioner
was illeally dismissedM
>hether the La#or Ar#iterNs decision has #ecome Gnal and eAec"tory for fail"re of res!ondents to
a!!eal with the NLRC within the relementary !eriod
RUL1NG$
SC aIrmed CA<s decision&
'etitioner failed to !resent any concrete !roof as to how= when and to whom the delivery and
recei!t of the three notices iss"ed #y the !ost oIce was made& The iss"ance of the notices #y
the !ost oIce is not eD"ivalent to delivery to and recei!t #y the addressee of the reistered
mail& There is no concl"sive evidence showin that the !ost oIce notices were act"ally received
#y res!ondents= neatin !etitionerNs claim of constr"ctive service of the La#or Ar#iterNs decision
on res!ondents& The 'ostmasterNs CertiGcation does not s"Iciently !rove that the three notices
were delivered to and received #y res!ondentsM it only indicates that the !ost oIce iss"ed the
three notices& The ends of E"stice will #e #etter served if we resolve the instant case on the
merits rather than allowin the s"#stantial iss"e of whether !etitioner is an inde!endent
contractor or an em!loyee liner and remain "nsettled d"e to !roced"ral technicalities&
>e aree with res!ondents that once in the !layin co"rt= the referees eAercise their own
inde!endent E"dment= #ased on the r"les of the ame= as to when and how a call or decision is
to #e made& Res!ondents or any of the 'BA oIcers cannot and do not determine which calls to
ma;e or not to ma;e and cannot control the referee when he #lows the whistle #eca"se s"ch
a"thority eAcl"sively #elons to the referees& 'etitioner is reD"ired to re!ort for wor; only when
'BA ames are sched"led or three times a wee; at two ho"rs !er ame& 1n addition= there are no
ded"ctions for contri#"tions to the Social Sec"rity System= 'hilhealth or 'a81#i= which are the
"s"al ded"ctions from em!loyeesN salaries& These "ndis!"ted circ"mstances #"ttress the fact
that !etitioner is an inde!endent contractor= and not an em!loyee of res!ondents& :or a hired
!arty to #e considered an em!loyee= the hirin !arty m"st have control over the means and
methods #y which the hired !arty is to !erform his wor;= which is a#sent in this case& The
contin"o"s rehirin #y 'BA of !etitioner sim!ly siniGes the renewal of the contract #etween 'BA
and !etitioner= and hihlihts the satisfactory services rendered #y !etitioner warrantin s"ch
contract renewal& The non8renewal of the contract #etween the !arties does not constit"te illeal
dismissal of !etitioner #y res!ondents&
Cesar Lirio vs. 2il#er Genovia
G&R& No& )0(,6,& Novem#er 5*= 5+))
:ACTS$
%"ly (= 5++5= res!ondent >ilmer D& Genovia Gled a com!laint aainst !etitioner Cesar Lirio andJor
Cel;or Ad SonicmiA Recordin St"dio for illeal dismissal= non8!ayment of commission and award
of moral and eAem!lary damaes& ?e was em!loyed to manae and o!erate Cel;or and to
!romote and sell the recordin st"dioNs services to m"sic enth"siasts and other !ros!ective
clients& ?e received a monthly salary of ',=+++&++& They also areed that he was entitled to an
additional commission of ')++&++ !er ho"r as recordin technician whenever a client "ses the
st"dio for recordin= editin or any related wor;& ?e was made to re!ort for wor; from Monday to
:riday from ($++ a&m& to 0 !&m& On Sat"rdays= he was reD"ired to wor; half8day only= #"t most of
the time= he still rendered eiht ho"rs of wor; or more&
Res!ondent stated that a few days after he started wor;in as a st"dio manaer= !etitioner
a!!roached him and told him a#o"t his !roEect to !rod"ce an al#"m for his )68year8old da"hter&
'etitioner as;ed res!ondent to com!ose and arrane sons for Celine and !romised that he
-Lirio. wo"ld draft a contract to ass"re res!ondent of his com!ensation for s"ch services&
'etitioner later informed res!ondent that he was only entitled to the 5+X of the net !roGt and
that the salaries he received wo"ld #e ded"cted from the said 5+X net !roGt share& Res!ondent
o#Eected then !etitioner ver#ally terminated the former<s services and instr"cted the same not to
re!ort for wor;&
On Octo#er *)= 5++*= La#or Ar#iter Renaldo O& ?ernande7 rendered a decision= Gndin that an
em!loyer8em!loyee relationshi! eAisted #etween !etitioner and res!ondent= and that res!ondent
was illeally dismissed&
1n a Resol"tion dated Octo#er )2= 5++2= the NLRC reversed and set aside the decision of the
La#or Ar#iter& NLRC held that res!ondent failed to !roved with s"#stantial evidence that he was
selected and enaed #y !etitioner= that !etitioner had the !ower to dismiss him= and that they
had the !ower to control him not only as to the res"lt of his wor;= #"t also as to the means and
methods of accom!lishin his wor;&
On A""st 2= 5++6= the Co"rt of A!!eals rendered a decision reversin and settin aside the
resol"tion of the NLRC= and reinstatin the decision of the La#or Ar#iter= with modiGcation in
reard to the award of commission and damaes& The Co"rt of A!!eals deleted the award of
commission and moral and eAem!lary damaes as the same were not s"#stantiated&
1SSU4$
>hether there eAisted an em!loyer8em!loyee relationshi! #etween !etitioner and res!ondent=
and whether dismissal of res!ondent is illeal&
RUL1NG$
SC aIrmed CA<s decision&
1t is settled that no !artic"lar form of evidence is reD"ired to !rove the eAistence of an em!loyer8
em!loyee relationshi!& Any com!etent and relevant evidence to !rove the relationshi! may #e
admitted& 1n this case= the doc"mentary evidence !resented #y res!ondent to !rove that he was
an em!loyee of !etitioner are as follows$ -a. a doc"ment denominated as L!ayrollL -dated %"ly
*)= 5++) to March )6= 5++5. certiGed correct #y !etitioner= which showed that res!ondent
received a monthly salary of ',=+++&++ -'*=6++&++ every )6th of the month and another
'*=6++&++ every *+th of the month. with the corres!ondin ded"ctions d"e to a#sences inc"rred
#y res!ondentM and -5. co!ies of !etty cash vo"chers= showin the amo"nts he received and
sined for in the !ayrolls& 'etitioner failed to !rove that his relationshi! with res!ondent was one
of !artnershi!& S"ch claim was not s"!!orted #y any written areement&
The Co"rt arees with the Co"rt of A!!eals that the evidence !resented #y the !arties showed
that an em!loyer8em!loyee relationshi! eAisted #etween !etitioner and res!ondent&
1n termination cases= the #"rden is "!on the em!loyer to show #y s"#stantial evidence that the
termination was for lawf"l ca"se and validly made& Article 5,, -#. of the La#or Code !"ts the
#"rden of !rovin that the dismissal of an em!loyee was for a valid or a"thori7ed ca"se on the
em!loyer= witho"t distinction whether the em!loyer admits or does not admit the dismissal& :or
an em!loyeeNs dismissal to #e valid= -a. the dismissal m"st #e for a valid ca"se= and -#. the
em!loyee m"st #e aHorded d"e !rocess& 'roced"ral d"e !rocess reD"ires the em!loyer to f"rnish
an em!loyee with two written notices #efore the latter is dismissed$ -). the notice to a!!rise the
em!loyee of the !artic"lar acts or omissions for which his dismissal is so"ht= which is the
eD"ivalent of a chareM and -5. the notice informin the em!loyee of his dismissal= to #e iss"ed
after the em!loyee has #een iven reasona#le o!!ort"nity to answer and to #e heard on his
defense&
'etitioner failed to com!ly with these leal reD"irementsM hence= the Co"rt of A!!eals correctly
aIrmed the La#or Ar#iterNs Gndin that res!ondent was illeally dismissed&
Charlie 1ao vs BBC Pro!uc"s Sales Inc.
G&R& No& )0*,++= A!ril )3= 5+)5
:ACTS$
'etitioner oHered the followin$ -a. BCC 1dentiGcation Card -1D. iss"ed to him statin his name
and his !osition as Pcom!troller=Q and #earin his !ict"re= his sinat"re= and the sinat"re of TyM
-#. a !ayroll of BCC for the !eriod of Octo#er )8)6= )((0 that !etitioner a!!roved as com!trollerM
-c. vario"s #ills and recei!ts related to eA!endit"res of BCC #earin the sinat"re of !etitionerM
-d. vario"s chec;s carryin the sinat"res of !etitioner and Ty= and= in some chec;s= the
sinat"re of !etitioner aloneM -e. a co"rt order showin that the iss"in co"rt considered
!etitioner<s 1D as !roof of his em!loyment with BCCM -f. a letter of !etitioner dated March )= )((,
to the De!artment of %"stice on his Glin of a criminal case for estafa aainst Ty for non8!ayment
of waesM -. aIdavits of some em!loyees of BCC attestin that !etitioner was their co8
em!loyee in BCCM and -h. a notice of raYe dated Decem#er 6= )((6 showin that !etitioner=
#ein an em!loyee of BCC= received the notice of raYe in #ehalf of BCC&
B"t res!ondent co"ntered the evidences !resented #y the !etitioner #y !rovin that Charlie %ao
is not their em!loyee= as S:C had installed !etitioner as its com!troller in BCC to oversee and
s"!ervise S:C<s collections and the acco"nt of BCC to !rotect S:C<s interestM that their iss"ance
of the 1D to !etitioner was only for the !"r!ose of facilitatin his entry into the BCC !remises in
relation to his wor; of overseein the Gnancial o!erations of BCC for S:CM that the 1D sho"ld not
#e considered as evidence of !etitioner<s em!loyment in BCCM that !etitioner eAec"ted an
aIdavit in March )((0= statin= amon others= that he is a C'A !resently em!loyed at S:C&
1SSU4$
>ON there eAist an em!loyee8em!loyer relationshi! #etween the !etitioner and res!ondent&
?4LD$
The S"!reme Co"rt held that there eAist no em!loyee8em!loyer relationshi! #etween the two
#ased on the aIdavits made #y the !etitioner that he is an em!loyee of S:C to oversee and
s"!ervise S:CNs collection&
Moreover= in determinin the !resence or a#sence of an em!loyer8em!loyee relationshi!= the
Co"rt has consistently loo;ed for the followin incidents= to wit$ -a. the selection and
enaement of the em!loyeeM -#. the !ayment of waesM -c. the !ower of dismissalM and -d. the
em!loyer<s !ower to control the em!loyee on the means and methods #y which the wor; is
accom!lished& The last element= the so8called control test= is the most im!ortant element&
1t can #e ded"ced from the March )((0 aIdavit of !etitioner that res!ondents challened his
a"thority to deliver some )63 chec;s to S:C& Considerin that he contested res!ondents<
challene #y !ointin to the eAistin arranements #etween BCC and S:C= it sho"ld #e clear that
res!ondents did not eAercise the !ower of control over him= #eca"se he there#y acted for the
#eneGt and in the interest of S:C more than of BCC&
1n addition= !etitioner !resented no doc"ment settin forth the terms of his em!loyment #y BCC&
The fail"re to !resent s"ch areement on terms of em!loyment may #e "nderstanda#le and
eA!ected if he was a common or ordinary la#orer who wo"ld not Eeo!ardi7e his em!loyment #y
demandin s"ch doc"ment from the em!loyer= #"t may not sD"are well with his act"al stat"s as
a hihly ed"cated !rofessional&
Legen! 5o"el 3Manila4 vs. Realuo
G&R& No& )6*6))= %"ly )3= 5+)5
:ACTS$
R4S'OND4NT ?ernani S& Real"yo wor;ed as a !ianist at the Leend ?otel<s Tanlaw Resta"rant
owned #y !etitioner Titani"m Cor!& from Se!tem#er )((5& ?e received an initial rate of '2++=
which was later increased to ',6+ after each niht<s !erformance= which had #een GAed from ,
!&m& to )+ !&m& for three to siA times a wee;&
On %"ly (= )(((= the manaement notiGed him that as a cost8c"ttin meas"re= his services wo"ld
no loner #e reD"ired& Real"yo Gled a com!laint for constr"ctive dismissal and several money
claims&
1n defense= !etitioner ar"ed that whatever rem"neration was iven to res!ondent were only his
talent fees that were not incl"ded in the deGnition of wae "nder the La#or Code& S"ch talent
fees were #"t the consideration for the service contract entered into #etween them& 1s there
merit to this defenseZ
1SSU4$
>ON an em!loyer8em!loyee relationshi! eAists #etween the !etitioner and res!ondent&
RUL1NG$
B4S& The Co"rt Gnds that an em!loyer8em!loyee relationshi! eAists&
Res!ondent was !aid '2++ !er three ho"rs of !erformance from , !&m& to )+ !&m&= three to siA
nihts a wee;& S"ch rate of rem"neration was later increased to ',6+ "!on the resta"rant
manaer<s recommendation& There is no denyin that the rem"neration denominated as talent
fees was GAed on the #asis of the res!ondent<s talent and s;ill and the D"ality of the m"sic he
!layed d"rin the ho"rs of !erformance each niht= ta;in into acco"nt the !revailin rate for
similar talents in the entertainment ind"stry&
Res!ondent<s rem"neration= al#eit denominated as talent fees= was still considered as incl"ded
in the term wae in the sense and conteAt of the La#or Code= reardless of how !etitioner chose
to desinate the rem"neration&
Clearly= res!ondent received com!ensation for the services he rendered as a !ianist in
!etitioner<s hotel& 'etitioner cannot "se the service contract to rid itself of the conseD"ences of
its em!loyment of res!ondent& There is no denyin that whatever amo"nts he received for his
!erformance= howsoever desinated #y !etitioner= were his waes&
1t is nota#le that "nder the R"les 1m!lementin the La#or Code and as held in Tan v& Larama=
G&R& No& )6)553= A""st )6= 5++5= *3, SCRA *(*= every em!loyer is reD"ired to !ay his
em!loyees #y means of a !ayroll= which sho"ld show in each case= amon others= the
em!loyee<s rate of !ay= ded"ctions made from s"ch !ay= and the amo"nts act"ally !aid to the
em!loyee& Bet= !etitioner did not !resent the !ayroll of its em!loyees to #olster its insistence of
res!ondent not #ein its em!loyee&
That res!ondent wor;ed for less than eiht ho"rsJday was of no conseD"ence and did not detract
from the CA<s Gndin on the eAistence of the em!loyer8em!loyee relationshi!&
1n !rovidin that the Pnormal ho"rs of wor; of any em!loyee shall not eAceed eiht ho"rs a day=Q
Article 3* of the La#or Code only set a maAim"m of n"m#er of ho"rs as Pnormal ho"rs of wor;Q
#"t did not !rohi#it wor; of less than eiht ho"rs&
5IRING 6( EMPL67EES
6llen!orf vs. Abrahanson
G&R& No& )*553M Se!tem#er )*= )()3
:ACTS$
The record discloses that Ollendorf is and for a lon time !ast has #een enaed in the city of
Manila and elsewhere in the 'hili!!ines in the #"siness of man"fact"rin ladiesN em#roidered
"nderwear for eA!ort& Ollendorf im!orts the material from which this "nderwear is made and
ado!ts decorative desins which are em#roidered "!on it #y :ili!ino needle wor;ers from
!atterns selected and s"!!lied #y him& Most of the em#roidery wor; is done in the homes of the
wor;ers& The em#roiderers em!loyed #y !laintiH are "nder contract to wor; for !laintiH
eAcl"sively&
On Se!tem#er )()6= !laintiH and defendant entered into a contract& Under the terms of this=
areement defendant entered the em!loy of !laintiH and wor;ed for him "ntil A!ril )()0= when
defendant= on acco"nt of ill health= left !laintiHNs em!loy and went to the United States& >hile in
!laintiHNs em!loy defendant had access to all !arts of !laintiHNs esta#lishment= and had f"ll
o!!ort"nity to acD"aint himself with !laintiHNs #"siness methods and #"siness connections& The
d"ties !erformed #y him were s"ch as to ma;e it necessary that he sho"ld have this ;nowlede
of !laintiH s #"siness& Defendant had a eneral ;nowlede of the 'hili!!ine em#roidery #"siness
#efore his em!loyment #y !laintiH= havin #een enaed in similar wor; for several years&
Some months after his de!art"re= defendant ret"rned to Manila as the manaer of the 'hili!!ine
Underwear Com!any= a cor!oration& This cor!oration does not maintain a factory in the
'hili!!ine 1slands= #"t sends material and em#roidery desins from New Bor; to its local
re!resentative here who em!loys :ili!ino needle wor;ers to em#roider the desins and ma;e "!
the arments in their homes& The only diHerence #etween !laintiHNs #"siness and that of the Grm
#y which the defendant is em!loyed= is the method of doin the Gnishin wor; O the
man"fact"re of the em#roidered material into Gnished arments&
Shortly after defendantNs ret"rn to Manila and the commencement #y him of the dischare of the
d"ties of his !osition as local manaer of the 'hili!!ine 4m#roidery Com!any= !laintiH
commenced this action= the !rinci!al !"r!ose of which is to !revent= #y inE"nction= any f"rther
#reach of that !art of defendantNs contract of em!loyment #y !laintiH= #y which he areed that
he wo"ld not Lenter into or enae himself directly or indirectly & & & in a similar or com!etitive
#"siness to that of -!laintiH. anywhere within the 'hili!!ine 1slands for a !eriod of Gve years & & &L
from the date of the areement&
1SSU4$
>hether or not the contract is valid&
RUL1NG$
SC r"led that the contract is valid&
The only limitation "!on the freedom of contract"al areement is that the !acts esta#lished shall
not #e contrary to Llaw= morals or !"#lic order&L -Civil Code= art& )566&.
'"#lic welfare is Grst considered= and if it #e not involved= and the restraint "!on one !arty is not
reater than !rotection to the other !arty reD"ires= the contract may #e s"stained& The D"estion
is whether= "nder the !artic"lar circ"mstances of the case and the nat"re of the !artic"lar
contract involved in it the contract is= or is not= "nreasona#le&
The Co"rts ado!t the modern r"le that the validity of restraints "!on trade or em!loyment is to
#e determined #y the intrinsic reasona#leness of the restriction in each case= rather than #y any
GAed r"le= and that s"ch restrictions may #e "!held when not contrary to the !"#lic welfare and
not reater than is necessary to aHord a fair and reasona#le !rotection to the !arty in whose
favor it is im!osed&
A #"siness enter!rise may and often does de!end for its s"ccess "!on the ownerNs relations with
other dealers= his s;ill in esta#lishin favora#le connections= his methods of #"yin and sellin O
a m"ltit"de of details= none vital if considered alone= #"t which in the areate constit"te the
s"m total of the advantaes which are the res"lt of the eA!erience or individ"al a!tit"de and
a#ility of the man or men #y whom the #"siness has #een #"ilt "!& :ail"re or s"ccess may
de!end "!on the !ossession of these intani#le #"t all8im!ortant assets= and it is nat"ral that
their !ossessor sho"ld see; to ;ee! them from fallin into the hands of his com!etitors&
1t is with this o#Eect in view that s"ch restrictions as that now "nder consideration are written
into contracts of em!loyment& Their !"r!ose is the !rotection of the em!loyer= and if they do not
o #eyond what is reasona#ly necessary to eHect"ate this !"r!ose they sho"ld #e "!held& >e
are of the o!inion= and so hold= that in the liht of the esta#lished facts the restraint im!osed
"!on defendant #y his contract is not "nreasona#le&
&el Cas"illo vs. Rich#on!
G&R& No& L85))5,M :e#r"ary (= )(52
:ACTS$
The case was instit"ted to declare the contract of services entered into #y Alfonso del Castillo as
n"ll and void& Del Castillo allees that the !rovisions and conditions contained in the third
!arara!h of said contract constit"te an illeal and "nreasona#le restriction "!on his li#erty to
contract= are contrary to !"#lic !olicy= and are "nnecessary in order to constit"te a E"st and
reasona#le !rotection to the defendantM and as;ed that the same #e declared n"ll and void and
of no eHect&
The said contract constit"ted an illeal and "nreasona#le restriction "!on the riht of the !laintiH
to contract and was contrary to !"#lic !olicy& 1t will #e noted that the restrictions !laced "!on the
!laintiH are strictly limited -a. to a limited district or districts= and -#. d"rin the time while the
defendant or his heirs may own or have o!en a dr"store= or have an interest in any other one
within said limited district&
1SSU4$
>hether or not the said restraint is reasona#le&
RUL1NG$
SC r"led that the restriction is reasona#le and not contrary to !"#lic !olicy&
The law concernin contracts which tend to restrain #"siness or trade has one thro"h a lon
series of chanes from time to time with the chanin conditions of trade and commerce& >ith
triTin eAce!tions= said chanes have #een a contin"o"s develo!ment of a eneral r"le&
The early cases show !lainly a dis!osition to avoid and ann"l all contract which !rohi#ited or
restrained any one from "sin lawf"l trade L at any time or at any !lace=L as #ein aainst the
#eneGt of the state& Later= however= the r"le #ecame well esta#lished that if the restraint was
limited to La certain timeL and within La certain !laceL= s"ch contracts were valid and not
Laainst the #eneGt of the state&L Later cases= and we thin; the r"le is now well esta#lished=
have held that contract in restraint of trade is valid !rovidin there is a limitation "!on either
time or !lace& A contract= however= which restrains a man enterin into a #"siness or trade
witho"t either a limitation as to time or !lace= will #e held in valid&
As stated in the case of Ollendorf vs& A#rahamson= The !"#lic welfare of co"rse m"st always #e
considered= and if it #e not involved and the restraint "!on one !arty is not reater than
!rotection to the other reD"ires= contracts li;e the one we are disc"ssin will #e s"stained& The
eneral tendency= we #elieve= of modern a"thority= is to ma;e the test whether the restraint is
reasona#ly necessary for the !rotection of the contractin !arties& 1f the contract is reasona#ly
necessary to !rotect the interest of the !arties= it will #e "!held&
1n that case we held that a contract #y which an em!loyee arees refrain a iven lenth of time=
after the eA!iration of the term of his em!loyment= from enain in #"siness= com!etitive with
that of his em!loyer= is not void as #ein in restraint of trade if the restraint im!osed is not
reater than that which is necessary to aHord a reasona#le !rotection&
P) 8 ) vs. NLRC
G&R& No& ))3(,3M May 5*= )((,
:ACTS$
Grace de G"7man was initially hired #y !etitioner as a reliever for a GAed !eriod from Novem#er
5)= )((+ "ntil A!ril 5+= )(() vice one C&:& Tenorio who went on maternity leave& Under the
Reliever Areement which she sined with 'etitioner Com!any= her em!loyment was to #e
immediately terminated "!on eA!iration of the areed !eriod& Thereafter= from %"ne )+= )(() to
%"ly )= )(()= and from %"ly )(= )(() to A""st 3= )(()= !rivate res!ondent<s services as reliever
were aain enaed #y !etitioner= this time in re!lacement of one 4rlinda :& Di7on who went on
leave d"rin #oth !eriods& After A""st 3= )(()= and !"rs"ant to their Reliever Areement= her
services were terminated&
1t now a!!ears that !rivate res!ondent had made the s re!resentation= that she was sinle
eventho"h she contracted marriae months #efore= in the two s"ccessive reliever areements
which she sined on %"ne )+= )(() and %"ly 3= )(()& >hen !etitioner s"!!osedly learned a#o"t
the same later= its #ranch s"!ervisor sent to !rivate res!ondent a memorand"m reD"irin her to
eA!lain the discre!ancy& 1n that memorand"m= she was reminded a#o"t the com!any<s !olicy of
not acce!tin married women for em!loyment&
'rivate res!ondent was dismissed from the com!any eHective %an"ary 5(= )((5= which she
readily contested #y initiatin a com!laint for illeal dismissal& La#or Ar#iter handed down a
decision declarin that !rivate res!ondent= who had already ained the stat"s of a re"lar
em!loyee= was illeally dismissed #y !etitioner& On a!!eal to the National La#or Relations
Commission -NLRC.= said !"#lic res!ondent "!held the la#or ar#iter and it r"led that !rivate
res!ondent had indeed #een the s"#Eect of an "nE"st and "nlawf"l discrimination #y her
em!loyer= 'T@T&
1SSU4$
>hether or not discrimination merely #y reason of the marriae of a female em!loyee is
eA!ressly !rohi#ited #y Article )*0&
RUL1NG$
SC r"led that the sti!"lation is violative of Art& )*0 of the La#or Code&
An em!loyer is free to re"late= accordin to his discretion and #est #"siness E"dment= all
as!ects of em!loyment= Pfrom hirin to Grin=Q eAce!t in cases of "nlawf"l discrimination or
those which may #e !rovided #y law& 'etitioner<s !olicy of not acce!tin or considerin as
disD"aliGed from wor; any woman wor;er who contracts marriae r"ns afo"l of the test of= and
the riht aainst= discrimination= aHorded all women wor;ers #y o"r la#or laws and #y no less
than the Constit"tion&
Res!ondent<s act of concealin the tr"e nat"re of her stat"s from 'T@T co"ld not #e !ro!erly
characteri7ed as willf"l or in #ad faith as she was moved to act the way she did mainly #eca"se
she wanted to retain a !ermanent Eo# in a sta#le com!any& 1n other words= she was !ractically
forced #y that very same illeal com!any !olicy into misre!resentin her civil stat"s for fear of
#ein disD"aliGed from wor;&
The overnment= to re!eat= a#hors any sti!"lation or !olicy in the nat"re of that ado!ted #y
!etitioner 'T@T& The La#or Code states= in no "ncertain terms= as follows$
PART& )*0& Sti!"lation aainst marriae& 8 1t shall #e "nlawf"l for an em!loyer to reD"ire as a
condition of em!loyment or contin"ation of em!loyment that a woman shall not et married= or
to sti!"late eA!ressly or tacitly that "!on ettin married= a woman em!loyee shall #e deemed
resined or se!arated= or to act"ally dismiss= dischare= discriminate or otherwise !reE"dice a
woman em!loyee merely #y reason of marriae&Q
Under American E"ris!r"dence= Eo# reD"irements which esta#lish em!loyer !reference or
conditions relatin to the marital stat"s of an em!loyee are cateori7ed as a PseA8!l"sQ
discrimination where it is im!osed on one seA and not on the other& :"rther= the same sho"ld #e
evenly a!!lied and m"st not inTict adverse eHects on a racial or seA"al ro"! which is !rotected
#y federal Eo# discrimination laws&
'etitioner<s !olicy is not only in deroation of the !rovisions of Article )*0 of the La#or Code on
the riht of a woman to #e free from any ;ind of sti!"lation aainst marriae in connection with
her em!loyment= #"t it li;ewise assa"lts ood morals and !"#lic !olicy= tendin as it does to
de!rive a woman of the freedom to choose her stat"s= a !rivilee that #y all acco"nts inheres in
the individ"al as an intani#le and inaliena#le riht&
?ence= while it is tr"e that the !arties to a contract may esta#lish any areements= terms= and
conditions that they may deem convenient= the same sho"ld not #e contrary to law= morals=
ood c"stoms= !"#lic order= or !"#lic !olicy& Carried to its loical conseD"ences= it may even #e
said that !etitioner<s !olicy aainst leitimate marital #onds wo"ld enco"rae illicit or common8
law relations and s"#vert the sacrament of marriae&
&uncan Asso. 6f &e"ail#an%P)G26 vs. Gla9o
G&R& No& )05((2M Se!tem#er ),= 5++2
:ACTS$
'etitioner 'edro A& Tecson was hired #y res!ondent GlaAo >ellcome 'hili!!ines= 1nc&. as medical
re!resentative on Octo#er )((6= after Tecson had "nderone trainin and orientation& Tecson
sined a contract of em!loyment which sti!"lates= amon others= that he arees to st"dy and
a#ide #y eAistin com!any r"lesM to disclose to manaement any eAistin or f"t"re relationshi!
#y consan"inity or aInity with co8em!loyees or em!loyees of com!etin dr" com!anies and
sho"ld manaement Gnd that s"ch relationshi! !oses a !ossi#le conTict of interest= to resin
from the com!any&
The 4m!loyee Code of Cond"ct of GlaAo similarly !rovides that an em!loyee is eA!ected to
inform manaement of any eAistin or f"t"re relationshi! #y consan"inity or aInity with co8
em!loyees or em!loyees of com!etin dr" com!anies& 1f manaement !erceives a conTict of
interest or a !otential conTict #etween s"ch relationshi! and the em!loyee<s em!loyment with
the com!any= the manaement and the em!loyee will eA!lore the !ossi#ility of a Ptransfer to
another de!artment in a non8co"nterchec;in !ositionQ or !re!aration for em!loyment o"tside
the com!any after siA months&
Tecson was initially assined to mar;et GlaAo<s !rod"cts in the Camarines S"r8Camarines Norte
sales area& S"#seD"ently= Tecson entered into a romantic relationshi! with Bettsy= an em!loyee
of Astra 'harmace"ticals -Astra.= a com!etitor of GlaAo& Bettsy was Astra<s Branch Coordinator
in Al#ay& Des!ite of warnins= Tecson married Bettsy& The s"!eriors of Tecson reminded him of the
com!any !olicy and s"ested that either him or Bettsy shall resin from their res!ective
com!anies& Tecson reD"ested more time to resolve the iss"e& 1n Novem#er of )(((= GlaAo
transferred Tecson to Mindanao area involvin the !rovinces of B"t"an= S"riao and A"san del
S"r& Tecson did not aree to the reassinment and referred this matter to the rievance
committee& 1t was resolved and was s"#mitted to vol"ntary ar#itration&
The NCMB rendered decision that GlaAo<s !olicy was a valid one& Arieved= Tecson Gled a
!etition to the CA where CA held that GlaAo<s !olicy !rohi#itin its em!loyees from havin
!ersonal relationshi!s with em!loyees of com!etitor com!anies is a valid eAercise of its
manaement !reroatives& ?ence= this !etition&
1SSU4$
>hether or not the !olicy of a !harmace"tical com!any !rohi#itin its em!loyees from marryin
em!loyees of any com!etitor com!any is valid&
RUL1NG$
SC r"led that the !rohi#ition is valid& 1t is an eAercise of the com!any<s manaement !reroative&
There is no error to the Co"rt of A!!eals when it r"led that GlaAo<s !olicy !rohi#itin an
em!loyee from havin a relationshi! with an em!loyee of a com!etitor com!any is a valid
eAercise of manaement !reroative& GlaAo has a riht to "ard its trade secrets= man"fact"rin
form"las= mar;etin strateies and other conGdential !rorams and information from
com!etitors= es!ecially so that it and Astra are rival com!anies in the hihly com!etitive
!harmace"tical ind"stry&
The !rohi#ition aainst !ersonal or marital relationshi!s with em!loyees of com!etitor
com!anies "!on GlaAo<s em!loyees is reasona#le "nder the circ"mstances #eca"se relationshi!s
of that nat"re miht com!romise the interests of the com!any& 1n layin down the assailed
com!any !olicy= GlaAo only aims to !rotect its interests aainst the !ossi#ility that a com!etitor
com!any will ain access to its secrets and !roced"res& That GlaAo !ossesses the riht to !rotect
its economic interests cannot #e denied&
No less than the Constit"tion reconi7es the riht of enter!rises to ado!t and enforce s"ch a
!olicy to !rotect its riht to reasona#le ret"rns on investments and to eA!ansion and rowth&
1ndeed= while o"r laws endeavor to ive life to the constit"tional !olicy on social E"stice and the
!rotection of la#or= it does not mean that every la#or dis!"te will #e decided in favor of the
wor;ers& The law also reconi7es that manaement has rihts which are also entitled to res!ect
and enforcement in the interest of fair !lay&
Ci" of Manila v. Laguio
G&R& No& ))3)5,M A!ril )5= 5++6
:ACTS$
'rivate res!ondent Malate To"rist Develo!ment Cor!oration -MTDC. is a cor!oration enaed in
the #"siness of o!eratin hotels= motels= hostels and lodin ho"ses& 1t #"ilt and o!ened 9ictoria
Co"rt in Malate which was licensed as a motel altho"h d"ly accredited with the De!artment of
To"rism as a hotel&
On %"ne )((*= MTDC Gled a 'etition for Declaratory Relief with 'rayer for a >rit of 'reliminary
1nE"nction andJor Tem!orary Restrainin Order with the lower co"rt im!leadin as defendants=
herein !etitioners City of Manila= ?on& Alfredo S& Lim= ?on& %oselito L& Atien7a= and the mem#ers
of the City Co"ncil of Manila& MTDC !rayed that the Ordinance= insofar as it incl"des motels and
inns as amon its !rohi#ited esta#lishments= #e declared invalid and "nconstit"tional&
4nacted #y the City Co"ncil on ( March )((* and a!!roved #y !etitioner City Mayor on *+ March
)((*= the said Ordinance is entitledS AN ORD1NANC4 'RO?1B1T1NG T?4 4STABL1S?M4NT OR
O'4RAT1ON O: BUS1N4SS4S 'RO91D1NG C4RTA1N :ORMS O: AMUS4M4NT= 4NT4RTA1NM4NT=
S4R91C4S AND :AC1L1T14S 1N T?4 4RM1TA8MALAT4 AR4A= 'R4SCR1B1NG '4NALT14S :OR 91OLAT1ON
T?4R4O:= AND :OR OT?4R 'UR'OS4S&
MTDC ar"ed that the Ordinance erroneo"sly and im!ro!erly incl"ded in its en"meration of
!rohi#ited esta#lishments= motels and inns s"ch as MTDC<s 9ictoria Co"rt considerin that these
were not esta#lishments for Pam"sementQ or PentertainmentQ and they were not Pservices or
facilities for entertainment=Q nor did they "se women as Ptools for entertainment=Q and neither
did they Pdist"r# the comm"nity=Q Pannoy the inha#itantsQ or Padversely aHect the social and
moral welfare of the comm"nity&Q
1SSU4$
>hether or not the aforementioned Ordinance is valid and constit"tional&
RUL1NG$
SC r"led that the ordinance is n"ll and void& Said ordinance is "ltra vires= th"s= "nconstit"tional&
The Co"rt is of the o!inion= and so holds= that the lower co"rt did not err in declarin the
Ordinance= as it did= "ltra vires and therefore n"ll and void& The Ordinance is so re!lete with
constit"tional inGrmities that almost every sentence thereof violates a constit"tional !rovision&
The !rohi#itions and sanctions therein transress the cardinal rihts of !ersons enshrined #y the
Constit"tion& The Co"rt is called "!on to shelter these rihts from attem!ts at renderin them
worthless&
A lon line of decisions has held that for an ordinance to #e valid= it m"st not only #e within the
cor!orate !owers of the local overnment "nit to enact and m"st #e !assed accordin to the
!roced"re !rescri#ed #y law= it m"st also conform to the followin s"#stantive reD"irements$ -).
m"st not contravene the Constit"tion or any stat"teM -5. m"st not #e "nfair or o!!ressiveM -*.
m"st not #e !artial or discriminatoryM -2. m"st not !rohi#it #"t may re"late tradeM -6. m"st #e
eneral and consistent with !"#lic !olicyM and -0. m"st not #e "nreasona#le&
Ordinances shall only #e valid when they are not contrary to the Constit"tion and to the laws&
The Ordinance m"st satisfy two reD"irements$ it m"st !ass m"ster "nder the test of
constit"tionality and the test of consistency with the !revailin laws& That ordinances sho"ld #e
constit"tional "!hold the !rinci!le of the s"!remacy of the Constit"tion& The reD"irement that
the enactment m"st not violate eAistin law ives stress to the !rece!t that local overnment
"nits are a#le to leislate only #y virt"e of their derivative leislative !ower= a deleation of
leislative !ower from the national leislat"re& The deleate cannot #e s"!erior to the !rinci!al
or eAercise !owers hiher than those of the latter&
The !rohi#ition of the en"merated esta#lishments will not !er se !rotect and !romote the social
and moral welfare of the comm"nityM it will not in itself eradicate the all"ded social ills of
!rostit"tion= ad"ltery= fornication nor will it arrest the s!read of seA"al disease in Manila&
Concedin for the nonce that the 4rmita8Malate area teems with ho"ses of ill8re!"te and
esta#lishments of the li;e which the City Co"ncil may lawf"lly !rohi#it= it is #aseless and
ins"!!orta#le to #rin within that classiGcation sa"na !arlors= massae !arlors= ;arao;e #ars=
niht cl"#s= day cl"#s= s"!er cl"#s= discotheD"es= ca#arets= dance halls= motels and inns& This is
not warranted "nder the acce!ted deGnitions of these terms& The en"merated esta#lishments
are lawf"l !"rs"its which are not !er se oHensive to the moral welfare of the comm"nity&
That these are "sed as arenas to cons"mmate illicit seA"al aHairs and as ven"es to f"rther the
illeal !rostit"tion is of no moment& >e lay stress on the acrid tr"th that seA"al immorality= #ein
a h"man frailty= may ta;e !lace in the most innocent of !laces that it may even ta;e !lace in the
s"#stit"te esta#lishments en"merated "nder Section * of the Ordinance&
The !ro#lem= it needs to #e !ointed o"t= is not the esta#lishment= which #y its nat"re cannot #e
said to #e inE"rio"s to the health or comfort of the comm"nity and which in itself is amoral= #"t
the de!lora#le h"man activity that may occ"r within its !remises& >hile a motel may #e "sed as
a ven"e for immoral seA"al activity= it cannot for that reason alone #e !"nished& 1t cannot #e
classiGed as a ho"se of ill8re!"te or as a n"isance !er se on a mere li;elihood or a na;ed
ass"m!tion& 1f that were so and if that were allowed= then the 4rmita8Malate area wo"ld not only
#e !"red of its s"!!osed social ills= it wo"ld #e eAtin"ished of its so"l as well as every h"man
activity= re!rehensi#le or not= in its every noo; and cranny wo"ld #e laid #are to the estimation
of the a"thorities&
The Ordinance see;s to leislate morality #"t fails to address the core iss"es of morality& Try as
the Ordinance may to sha!e morality= it sho"ld not foster the ill"sion that it can ma;e a moral
man o"t of it #eca"se immorality is not a thin= a #"ildin or esta#lishmentM it is in the hearts of
men& The City Co"ncil instead sho"ld re"late h"man cond"ct that occ"rs inside the
esta#lishments= #"t not to the detriment of li#erty and !rivacy which are covenants= !remi"ms
and #lessins of democracy&
1n the instant case= there is a clear invasion of !ersonal or !ro!erty rihts= !ersonal in the case of
those individ"als desiro"s of ownin= o!eratin and !atroni7in those motels and !ro!erty in
terms of the investments made and the salaries to #e !aid to those therein em!loyed& 1f the City
of Manila so desires to !"t an end to !rostit"tion= fornication and other social ills= it can instead
im!ose reasona#le re"lations s"ch as daily ins!ections of the esta#lishments for any violation
of the conditions of their licenses or !ermitsM it may eAercise its a"thority to s"s!end or revo;e
their licenses for these violationsM and it may even im!ose increased license fees& 1n other words=
there are other means to reasona#ly accom!lish the desired end&
S"ar Paper Corp. v. Si#bol
G&R& No& )02,,2M A!ril )5= 5++0
:ACTS$
'etitioner Star 'a!er Cor!oration is a cor!oration enaed in tradin= !rinci!ally of !a!er
!rod"cts& %ose!hine Onsitco is its Manaer of the 'ersonnel and Administration De!artment
while Se#astian Ch"a is its Manain Director&
Res!ondents Ronaldo D& Sim#ol -Sim#ol.= >ilfreda N& Comia -Comia. and Lorna 4& 4strella
-4strella. were all re"lar em!loyees of the com!any& Sim#ol was em!loyed #y the com!any on
Octo#er )((* and met Alma Dayrit= also an em!loyee of the com!any= whom he married on %"ne
)((3& 'rior to the marriae= Onsitco advised the co"!le that sho"ld they decide to et married=
one of them sho"ld resin !"rs"ant to a com!any !olicy& Sim#ol resined on %"ne 5+= )((3
!"rs"ant to the com!any !olicy&
Comia was hired #y the com!any on :e#r"ary )((,& She met ?oward Comia= a co8em!loyee=
whom she married on %"ne )= 5+++& Onsitco li;ewise reminded them that !"rs"ant to com!any
!olicy= one m"st resin sho"ld they decide to et married& Comia resined on %"ne *+= 5+++&
4strella was hired on %"ly 5(= )((2& She met L"isito R"Fia -R"Fia.= also a co8wor;er& 'etitioners
stated that R"Fia= a married man= ot 4strella !renant& The com!any alleedly co"ld have
terminated her services d"e to immorality #"t she o!ted to resin on Decem#er 5)= )(((&
The res!ondents sined a Release and ConGrmation Areement and stated therein that they
have no money and !ro!erty acco"nta#ilities in the com!any& Res!ondents oHer a diHerent
version of their dismissal& Res!ondents later Gled a com!laint for "nfair la#or !ractice=
constr"ctive dismissal= se!aration !ay and attorney<s fees& They averred that the
aforementioned com!any !olicy is illeal and contravenes Article )*0 of the La#or Code&
La#or Ar#iter dismissed the com!laint and states that the com!any !olicy was decreed !"rs"ant
to what the res!ondent cor!oration !erceived as manaement !reroative& On a!!eal to the
NLRC= the Commission aIrmed the decision of the La#or Ar#iter& 1n its assailed Decision dated
A""st *= 5++2= the Co"rt of A!!eals reversed the NLRC decision&
1SSU4$
>hether or not the said !olicy is a valid eAercise of the com!any<s manaement !reroative&
RUL1NG$
SC r"led that it not a valid eAercise of its manaement !reroative& There is no reasona#le
#"siness necessity of the !olicy&
The case at #ar involves Article )*0 of the La#or Code which !rovides$ 1t shall #e "nlawf"l for an
em!loyer to reD"ire as a condition of em!loyment or contin"ation of em!loyment that a woman
em!loyee shall not et married= or to sti!"late eA!ressly or tacitly that "!on ettin married a
woman em!loyee shall #e deemed resined or se!arated= or to act"ally dismiss= dischare=
discriminate or otherwise !reE"dice a woman em!loyee merely #y reason of her marriae&
>ith more women enterin the wor;force= em!loyers are also enactin em!loyment !olicies
s!eciGcally !rohi#itin s!o"ses from wor;in for the same com!any& >e note that two ty!es of
em!loyment !olicies involve s!o"ses$ !olicies #annin only s!o"ses from wor;in in the same
com!any -no8s!o"se em!loyment !olicies.= and those #annin all immediate family mem#ers=
incl"din s!o"ses= from wor;in in the same com!any -anti8ne!otism em!loyment !olicies.&
1t "tili7es two theories of em!loyment discrimination$ the dis!arate treatment and the dis!arate
im!act& Under the dis!arate treatment analysis= the !laintiH m"st !rove that an em!loyment
!olicy is discriminatory on its face& No8s!o"se em!loyment !olicies reD"irin an em!loyee of a
!artic"lar seA to either D"it= transfer= or #e Gred are facially discriminatory& On the other hand= to
esta#lish dis!arate im!act= the com!lainants m"st !rove that a facially ne"tral !olicy has a
dis!ro!ortionate eHect on a !artic"lar class&
The co"rts that have #roadly constr"ed the term Pmarital stat"sQ r"le that it encom!assed the
identity= occ"!ation and em!loyment of oneNs s!o"se& They hold that the a#sence of s"ch a #ona
Gde occ"!ational D"aliGcation invalidates a r"le denyin em!loyment to one s!o"se d"e to the
c"rrent em!loyment of the other s!o"se in the same oIce& Th"s= they r"le that "nless the
em!loyer can !rove that the reasona#le demands of the #"siness reD"ire a distinction #ased on
marital stat"s and there is no #etter availa#le or acce!ta#le !olicy which wo"ld #etter
accom!lish the #"siness !"r!ose= an em!loyer may not discriminate aainst an em!loyee #ased
on the identity of the em!loyee<s s!o"se& This is ;nown as the #ona Gde occ"!ational
D"aliGcation eAce!tion&
>e note that since the Gndin of a #ona Gde occ"!ational D"aliGcation E"stiGes an em!loyer<s
no8s!o"se r"le= the eAce!tion is inter!reted strictly and narrowly #y these state co"rts& There
m"st #e a com!ellin #"siness necessity for which no alternative eAists other than the
discriminatory !ractice& To E"stify a #ona Gde occ"!ational D"aliGcation= the em!loyer m"st !rove
two factors$ -). that the em!loyment D"aliGcation is reasona#ly related to the essential o!eration
of the Eo# involvedM and= -5. that there is a fact"al #asis for #elievin that all or s"#stantially all
!ersons meetin the D"aliGcation wo"ld #e "na#le to !ro!erly !erform the d"ties of the Eo#&
The co"rt does not Gnd a reasona#le #"siness necessity in the case at #ar& The !rotection iven
to la#or in o"r E"risdiction is vast and eAtensive that we cannot !r"dently draw inferences from
the leislat"re<s silence that married !ersons are not !rotected "nder o"r Constit"tion and
declare valid a !olicy #ased on a !reE"dice or stereoty!e& Th"s= for fail"re of !etitioners to
!resent "ndis!"ted !roof of a reasona#le #"siness necessity= we r"le that the D"estioned !olicy
is an invalid eAercise of manaement !reroative&
&el Mon"e Phils. '. 'elasco
G&R& No& )6*2,,M March 0= 5++,
:ACTS$
Lolita 9elasco was hired #y Del Monte as seasonal em!loyee and was s"#seD"ently re"lari7ed
#y Del Monte& On %"ne )(3,= !etitioner warned 9elasco of its a#sences and was re!eatedly
reminded that her a#sence witho"t !ermission may res"lt to forfeit"re of her vacation leave&
Another warnin was sent d"e to her a#sences witho"t !ermission which event"ally led to the
forfeit"re of her vacation entitlement& On Se!tem#er )((2= a notice of hearin was sent to
9elasco informin her of the chares Gled aainst her foe violatin the A#sence witho"t leave
r"le& On %an"ary )((6= after the hearin= Del Monte terminated the services of 9elasco d"e to
eAcessive a#sence witho"t leave& :eelin arieved= 9elasco Gled a case for illeal dismissal& She
asserted that she was a#sent since she was s"Herin "rinary tract infection and she was
!renant&
She sent an a!!lication for leave to the s"!ervisor& U!on chec; "! of the com!any doctor=
9elasco was advised to rest& On the followin chec;8"!s= she was aain advised to rest where
this time= she was not a#le to et sec"re a leave&
The La#or Ar#iter rendered decision that she was an incorrii#le a#sentee& Res!ondent a!!ealed
to the NLRC& NLRC vacated the decision of the La#or Ar#iter& 1t decided that res!ondent was
illeally dismissed and was entitled to reinstatement& 'etitioner a!!ealed to CA where it
dismissed its claim and aIrmed NLRC& Th"s= this !etition&
1SSU4$
>hether or not the dismissal was leal on acco"nt of a#sences made d"e to 9elasco<s
!renancy&
RUL1NG$
SC r"led that the termination was illeal&
The termination was illeal since it comes within the !"rview of the !rohi#ited acts !rovided in
Article )*, of the La#or Code& Based on Art& )*,= it shall #e "nlawf"l for any em!loyer -). to
deny any woman em!loyee the #eneGts !rovided for in this Cha!ter or to dischare any woman
em!loyed #y him for the !"r!ose of !reventin her from enEoyin any of the #eneGts !rovided
"nder this CodeM -5. to dischare s"ch woman on acco"nt of her !renancy= or while on leave or
in conGnement d"e to her !renancyM and -*. to dischare or ref"se the admission of s"ch
woman "!on ret"rnin to her wor; for fear that she may aain #e !renant&
The res!ondent was illeally dismissed #y the !etitioner on acco"nt of her !renancy& The act of
the em!loyer is "nlawf"l= it #ein contrary to law&
7rasuegui vs. Philippine Airlines
G&R& No& M Octo#er ),= 5++3
:ACTS$
This case !ortrays the !ec"liar story of an international Tiht steward who was dismissed
#eca"se of his fail"re to adhere to the weiht standards of the airline com!any&
'etitioner Armando G& Bras"e"i was a former international Tiht steward of 'hili!!ine
Airlines= 1nc& -'AL.& ?e stands Gve feet and eiht inches -6<3Q. with a lare #ody frame& The
!ro!er weiht for a man of his heiht and #ody str"ct"re is from )2, to )00 !o"nds= the ideal
weiht #ein )00 !o"nds= as mandated #y the Ca#in and Crew Administration Man"al of 'AL&
The weiht !ro#lem of !etitioner dates #ac; to )(32& Bac; then= 'AL advised him to o on an
eAtended vacation leave from Decem#er 5(= )(32 to March 2= )(36 to address his weiht
concerns& A!!arently= !etitioner failed to meet the com!any<s weiht standards= !rom!tin
another leave witho"t !ay from March 6= )(36 to Novem#er )(36&
After meetin the reD"ired weiht= !etitioner was allowed to ret"rn to wor;& B"t !etitioner<s
weiht !ro#lem rec"rred& ?e aain went on leave witho"t !ay from Octo#er ),= )(33 to
:e#r"ary )(3(&
On A!ril 50= )(3(= !etitioner weihed 5+( !o"nds= 2* !o"nds over his ideal weiht& 1n line with
com!any !olicy= he was removed from Tiht d"ty eHective May 0= )(3( to %"ly *= )(3(& ?e was
formally reD"ested to trim down to his ideal weiht and re!ort for weiht chec;s on several
dates& ?e was also told that he may avail of the services of the com!any !hysician sho"ld he
wish to do so& ?e was advised that his case will #e eval"ated on %"ly *= )(3(& On :e#r"ary 56=
)(3(= !etitioner "nderwent weiht chec;& 1t was discovered that he ained= instead of losin=
weiht& ?e was overweiht at 5)6 !o"nds= which is 2( !o"nds #eyond the limit& ConseD"ently=
his oH8d"ty stat"s was retained&
Des!ite eHorts= he remained to #e overweiht #ased on the com!any<s weiht standards& ?e
was served Notice of Administrative Chare for violation of com!any standards on weiht
reD"irements& ?e did not deny his #ein overweiht& >hat he claimed= instead= is that his
violation= if any= had already #een condoned #y 'AL since Pno action has #een ta;en #y the
com!anyQ reardin his case Psince )(33&Q ?e also claimed that 'AL discriminated aainst him
#eca"se Pthe com!any has not #een fair in treatin the ca#in crew mem#ers who are similarly
sit"ated&Q
On %"ne )6= )((*= !etitioner was formally informed #y 'AL that d"e to his ina#ility to attain his
ideal weiht= Pand considerin the "tmost leniencyQ eAtended to him Pwhich s!anned a !eriod
coverin a total of almost Gve -6. years=Q his services were considered terminated PeHective
immediately&Q ?is motion for reconsideration havin #een denied= !etitioner Gled a com!laint for
illeal dismissal aainst 'AL&
1SSU4$
>hether or not the dismissal of Bras"e"i was a valid eAercise of manaement !reroative&
RUL1NG$
SC r"led that the dismissal of Bras"e"i was a valid eAercise of manaement !reroative& The
weiht standard is considered a contin"in D"aliGcation for an em!loyee<s !osition&
The o#esity of !etitioner is a ro"nd for dismissal "nder Article 535-e. of the La#or Code& A
readin of the weiht standards of 'AL wo"ld lead to no other concl"sion than that they
constit"te a contin"in D"aliGcation of an em!loyee in order to ;ee! the Eo#& Tersely !"t= an
em!loyee may #e dismissed the moment he is "na#le to com!ly with his ideal weiht as
!rescri#ed #y the weiht standards& The dismissal of the em!loyee wo"ld th"s fall "nder Article
535-e. of the La#or Code& As eA!lained #y the CA$
A A A VTWhe standards violated in this case were not mere PordersQ of the em!loyerM they
were the P!rescri#ed weihtsQ that a ca#in crew m"st maintain in order to D"alify for and ;ee!
his or her !osition in the com!any& 1n other words= they were standards that esta#lish contin"in
D"aliGcations for an em!loyee<s !osition& 1n this sense= the fail"re to maintain these standards
does not fall "nder Article 535-a. whose eA!ress terms reD"ire the element of willf"lness in order
to #e a ro"nd for dismissal& The fail"re to meet the em!loyer<s D"alifyin standards is in fact a
ro"nd that does not sD"arely fall "nder ro"nds -a. to -d. and is therefore one that falls "nder
Article 535-e. S the Pother ca"ses analoo"s to the foreoin&Q
By its nat"re= these PD"alifyin standardsQ are norms that a!!ly !rior to and after an em!loyee is
hired& They a!!ly !rior to em!loyment #eca"se these are the standards a Eo# a!!licant m"st
initially meet in order to #e hired& They a!!ly after hirin #eca"se an em!loyee m"st contin"e to
meet these standards while on the Eo# in order to ;ee! his Eo#& Under this !ers!ective= a
violation is not one of the fa"lts for which an em!loyee can #e dismissed !"rs"ant to !ars& -a. to
-d. of Article 535M the em!loyee can #e dismissed sim!ly #eca"se he no loner PD"aliGesQ for his
Eo# irres!ective of whether or not the fail"re to D"alify was willf"l or intentional& A A A
After a metic"lo"s consideration of all ar"ments !ro and con= we "!hold the leality of
dismissal& Se!aration !ay= however= sho"ld #e awarded in favor of the em!loyee as an act of
social E"stice or #ased on eD"ity& This is so #eca"se his dismissal is not for serio"s miscond"ct&
Neither is it reTective of his moral character&
2AGES AN& )5E 2AGE RA)I6NALI:A)I6N AC)
Ilaw a" Bu*lo! ng Manggagawa vs. NLRC
G&R& No& ()(3+M %"ne 5,= )(()
:ACTS$
The controversy at #ar had its oriin in the Pwae distortionsQ aHectin the em!loyees of
res!ondent San Mi"el Cor!oration alleedly ca"sed #y RA 0,5,= otherwise ;nown as >ae
Rationali7ation Act&
U!on the eHectivity of the said Act= the "nion ;nown as 1law at B";lod n ManaawaOsaid to
re!resent more or less 2= 6++ em!loyees of San Mi"el Cor!oration who are wor;in at vario"s
!lants= oIces and wareho"ses located at the National Ca!ital ReionO!resented to the
Com!any a PdemandQ for the correction of the PsiniGcant distortion in the wor;er<s waesQ& 1n
that PdemandQ= the Union invo;ed Section 2-d. of RA 0,5,& The !rovision !rovided that sho"ld
there #e any dis!"te reardin wae distortions= shall Grst #e settled Pvol"ntarily #etween the
!arties and in the event of a deadloc;= the same shall #e Gnally resolved thro"h com!"lsory
ar#itration s"ch dis!"tes #y the reional #ranches of the NLRC havin E"risdiction over the
wor;!laceQ& B"t the PdemandQ accordin to the Union has #een inored #y the com!any& The
Union averred that the com!any oHered a measly across8the #oard wae increase of ',&++ !er
day= !er em!loyee= as aainst the !ro!osal of the Union of '56&++ !er day= !er em!loyee& Later=
the Union red"ced its !ro!osal to ')6&++ !er day= !er em!loyee #y way of amica#le settlement&
>hen the com!any reEected the red"ced !ro!osal of the Union the mem#ers thereof in their own
accord= the wor;ers ref"sed to render overtime services= most es!ecially at the Beer Bottlin
'lans at 'olo& The wor; sched"le of the wor;ers constit"tes a #"ilt8in a"tomatic overtime& They
wor; )+ ho"rs for the Grst shift and )+ to )2 ho"rs for the second shift= from Mondays to :ridays
and on Sat"rdays= 3 ho"rs for #oth shifts& The ref"sal of the wor;ers to wor; more than 38ho"rs
ca"sed s"#stantial losses to the com!any& This led SMC to Gle a com!laint #efore NLRC aainst
the Union& 1t so"ht to declare the stri;e or slowdown illeal and to terminate the em!loyment of
the "nion oIcers and sho! stewards&
1SSU4$
>hether or not the !artial or limited stri;e= with the !"r!ose of correction of the wae distortion=
of the Union is valid &
RUL1NG$
SC r"led that the concerted activity of the Union is illeal&
The !artial stri;e or concerted ref"sal #y the Union mem#ers to follow the Gve8year8old wor;
sched"le which they had therefore #een o#servin= resorted to as a means of coercin correction
of Lwae distortions=L was therefore for#idden #y law and contract and= on this acco"nt= illeal&
Awareness #y the Union of the !roscri#ed character of its mem#ersN collective activities= is
clearly connoted #y its attem!t to E"stify those activities as a means of !rotestin and o#tainin
redress aainst said mem#ers wor;in overtime every day from Monday to :riday -on an averae
of )5 ho"rs.= and every Sat"rday -on 3 ho"r shifts.= rather than as a meas"re to #rin a#o"t
rectiGcation of the wae distortions ca"sed #y RA 0,5, O which was the real ca"se of its
diHerences with SMC& By concealin the real ca"se of their dis!"te with manaement -alleed
fail"re of correction of wae distortion.= and tryin to ma;e it a!!ear that the controversy
involved a!!lication of the eiht8ho"r la#or law= they o#vio"sly ho!ed to remove their case from
the o!eration of the r"les im!lementin RA 0,5, that LAny iss"e involvin wae distortion shall
not #e a ro"nd for a stri;eJloc;o"t&L The strataem cannot s"cceed&
1n view of the foreoin fact"al and leal considerations= it leads to the #asic concl"sion that the
concerted acts of the mem#ers of !etitioner Union in D"estion are violative of the law and their
formal areement with the em!loyer&
E#ploers Confe!era"ion of "he Phils. vs. N2PC
G&R& No& (0)0(M Se!tem#er 52= )(()
:ACTS$
On Octo#er ),= )((6= the Reional Tri!artite >aes and 'rod"ctivity Board= Reion 11=
T""earao= Caayan -RT>'B.= #y virt"e of Re!"#lic Act No& 0,5, -R&A& No& 0,5,.= otherwise
;nown as the >ae Rationali7ation Act= iss"ed >ae Order No& R+58+* ->ae Order.= as follows$
Section )& U!on eHectivity of this >ae Order= all em!loyeesJwor;ers in the !rivate sector
thro"ho"t Reion 11= reardless of the stat"s of em!loyment are ranted an across8the8#oard
increase of ')6&++ daily&
The >ae Order was !"#lished in a news!a!er of eneral circ"lation on Decem#er 5= )((6 and
too; eHect on %an"ary )= )((0& 1ts 1m!lementin R"les were a!!roved on :e#r"ary )2= )((0& 'er
Section )* of the >ae Order= any !arty arieved #y the >ae Order may Gle an a!!eal with
the National >aes and 'rod"ctivity Commission -N>'C. thro"h the RT>'B within )+ calendar
days from the !"#lication of the >ae Order&
Ban;er<s Co"ncil in a letter inD"iry to N>'C reD"ested for r"lin to see; eAem!tion from
coverae of the wae order since the mem#ers #an; are !ayin more than the re"lar wae&
N>'C re!lied that the mem#er #an;s are covered #y the wae order and does not fall with the
eAem!ti#le cateories&
1n another letter inD"iry= Metro#an; as;ed for the inter!retation of the a!!lica#ility of the wae
order& N>'C referred it to RT>'B& RT>'B in ret"rn clariGed that esta#lishments in Reion 5 are
covered #y the wae order& 'etitioner Gled a !etition with the CA and denied the !etition&
1SSU4$
>hether or not the wae order is void th"s it has no leal eHect and the RT>'B acted in eAcess
of its E"risdiction&
RUL1NG$
SC Gnds that Section )= >ae Order No& R+58+* is void insofar as it rants a wae increase to
em!loyees earnin more than the minim"m wae rateM and !"rs"ant to the se!ara#ility cla"se of
the >ae Order= Section ) is declared valid with res!ect to em!loyees earnin the !revailin
minim"m wae rate&
The !owers of N>'C are en"merated in ART& )5)& 'owers and :"nctions of the Commission& 8 The
Commission shall have the followin !owers and f"nctions$ -d. To review reional wae levels set
#y the Reional Tri!artite >aes and 'rod"ctivity Boards to determine if these are in accordance
with !rescri#ed "idelines and national develo!ment !lansM -f. To review !lans and !rorams of
the Reional Tri!artite >aes and 'rod"ctivity Boards to determine whether these are consistent
with national develo!ment !lansM -. To eAercise technical and administrative s"!ervision over
the Reional Tri!artite >aes and 'rod"ctivity Boards&
R&A& No& 0,5, declared it a !olicy of the State to rationali7e the GAin of minim"m waes and to
!romote !rod"ctivity8im!rovement and ain8sharin meas"res to ens"re a decent standard of
livin for the wor;ers and their familiesM to "arantee the rihts of la#or to its E"st share in the
fr"its of !rod"ctionM to enhance em!loyment eneration in the co"ntryside thro"h ind"strial
dis!ersalM and to allow #"siness and ind"stry reasona#le ret"rns on investment= eA!ansion and
rowth&
1n line with its declared !olicy= R&A& No& 0,5, created the N>'C= vested with the !ower to
!rescri#e r"les and "idelines for the determination of a!!ro!riate minim"m wae and
!rod"ctivity meas"res at the reional= !rovincial or ind"stry levelsM and a"thori7ed the RT>'B to
determine and GA the minim"m wae rates a!!lica#le in their res!ective reions= !rovinces= or
ind"stries therein and iss"e the corres!ondin wae orders= s"#Eect to the "idelines iss"ed #y
the N>'C& '"rs"ant to its wae GAin a"thority= the RT>'B may iss"e wae orders which set the
daily minim"m wae rates= #ased on the standards or criteria set #y Article )52 of the La#or
Code&
The Co"rt declared that there are two ways of GAin the minim"m wae$ the LToor8waeL
method and the Lsalary8ceilinL method& The LToor8waeL method involves the GAin of a
determinate amo"nt to #e added to the !revailin stat"tory minim"m wae rates& On the other
hand= in the Lsalary8ceilinL method= the wae adE"stment was to #e a!!lied to em!loyees
receivin a certain denominated salary ceilin& 1n other words= wor;ers already #ein !aid more
than the eAistin minim"m wae -"! to a certain amo"nt stated in the >ae Order. are also to
#e iven a wae increase&
1n the !resent case= the RT>'B did not determine or GA the minim"m wae rate #y the LToor8
wae methodL or the Lsalary8ceilin methodL in iss"in the >ae Order& The RT>'B did not set a
wae level nor a rane to which a wae adE"stment or increase shall #e added& 1nstead= it
ranted an across8the8#oard wae increase of ')6&++ to all em!loyees and wor;ers of Reion 5&
1n doin so= the RT>'B eAceeded its a"thority #y eAtendin the coverae of the >ae Order to
wae earners receivin more than the !revailin minim"m wae rate= witho"t a denominated
salary ceilin& As correctly !ointed o"t #y the OSG= the >ae Order ranted additional #eneGts
not contem!lated #y R&A& No& 0,5,&
Mabe$a vs. NLRC
G&R& No& ))36+0M A!ril )3= )((,
:ACTS$
'etitioner Norma Ma#e7a contends that on the Grst wee; of May )(()= she and her co8em!loyees
at the ?otel S"!reme in Ba"io City were as;ed #y the hotelNs manaement to sin an
instr"ment attestin to the latterNs com!liance with minim"m wae and other la#or standard
!rovisions of law& 'etitioner sined the aIdavit #"t ref"sed to o to the City 'rosec"torNs OIce
to swear to the veracity and contents of the aIdavit as instr"cted #y manaement& The aIdavit
was nevertheless s"#mitted on the same day to the Reional OIce of the De!artment of La#or
and 4m!loyment in Ba"io City&
The aIdavit was drawn #y manaement for the sole !"r!ose of ref"tin Gndins of the La#or
1ns!ector of DOL4 a!!arently adverse to the !rivate res!ondent& After she ref"sed to !roceed to
the City 'rosec"torNs OIce= !etitioner states that she was ordered #y the hotel manaement to
t"rn over the ;eys to her livin D"arters and to remove her #elonins from the hotel !remises&
Accordin to her= res!ondent stronly chided her for ref"sin to !roceed to the City 'rosec"torNs
OIce to attest to the aIdavit& She thereafter rel"ctantly Gled a leave of a#sence from her Eo#
which was denied #y manaement& >hen she attem!ted to ret"rn to wor; on May )(()= the
hotelNs cashier informed her that she sho"ld not re!ort to wor; and= instead= contin"e with her
"noIcial leave of a#sence&
ConseD"ently= three days after her attem!t to ret"rn to wor;= !etitioner Gled a com!laint for
illeal dismissal #efore the Ar#itration Branch of the National La#or Relations Commission O CAR
Ba"io City& 1n addition to her com!laint for illeal dismissal= she alleed "nder!ayment of
waes= non8!ayment of holiday !ay= service incentive leave !ay= )*th month !ay= niht
diHerential and other #eneGts&
Res!ondin to the alleations for illeal dismissal= !rivate res!ondent 'eter N alleed #efore
La#or Ar#iter that !etitioner s"rre!titio"sly left her Eo# witho"t notice to the manaement and
that she act"ally a#andoned her wor;& ?e maintained that there was no #asis for the money
claims for "nder!ayment and other #eneGts as these were !aid in the form of facilities to
!etitioner and the hotelNs other em!loyees&
La#or Ar#iter dismissed the com!laint& On A!ril )((2= res!ondent NLRC !rom"lated its assailed
Resol"tion aIrmin the La#or Ar#iterNs decision&
1SSU4$
>hether or not the em!loyer has eAerted !ress"re= in the form of restraint= interference or
coercion= aainst his em!loyeeNs riht to instit"te concerted action for #etter terms and
conditions of em!loyment constit"tes "nfair la#or !ractice&
RUL1NG$
SC r"led that there was "nfair la#or !ractice&
>itho"t do"#t= the act of com!ellin em!loyees to sin an instr"ment indicatin that the
em!loyer o#served la#or standards !rovisions of law when he miht have not= toether with the
act of terminatin or coercin those who ref"se to coo!erate with the em!loyerNs scheme
constit"tes "nfair la#or !ractice& The Grst act clearly !reem!ts the riht of the hotelNs wor;ers to
see; #etter terms and conditions of em!loyment thro"h concerted action& :or ref"sin to
coo!erate with the !rivate res!ondentNs scheme= !etitioner was o#vio"sly held "! as an eAam!le
to all of the hotelNs em!loyees= that they co"ld only ca"se tro"#le to manaement at reat
!ersonal inconvenience& 1m!licit in the act of !etitionerNs termination and the s"#seD"ent Glin of
chares aainst her was the warnin that they wo"ld not only #e de!rived of their means of
livelihood= #"t also !ossi#ly= their !ersonal li#erty&
Grantin that meals and lodin were !rovided and indeed constit"ted facilities= s"ch facilities
co"ld not #e ded"cted witho"t the em!loyer com!lyin Grst with certain leal reD"irements&
>itho"t satisfyin these reD"irements= the em!loyer sim!ly cannot ded"ct the val"e from the
em!loyeeNs waes& :irst= !roof m"st #e shown that s"ch facilities are c"stomarily f"rnished #y
the trade& Second= the !rovision of ded"cti#le facilities m"st #e vol"ntarily acce!ted in writin #y
the em!loyee& :inally= facilities m"st #e chared at fair and reasona#le val"e& These
reD"irements were not met in the instant case&
More siniGcantly= the food and lodin= or the electricity and water cons"med #y the !etitioner
were not facilities #"t s"!!lements& A #eneGt or !rivilee ranted to an em!loyee for the
convenience of the em!loyer is not a facility& The criterion in ma;in a distinction #etween the
two not so m"ch lies in the ;ind -food= lodin. #"t the !"r!ose& Considerin that hotel wor;ers
are reD"ired to wor; diHerent shifts and are eA!ected to #e availa#le at vario"s odd ho"rs= their
ready availa#ility is a necessary matter in the o!erations of a small hotel= s"ch as the !rivate
res!ondentNs hotel&
1o Bro"hers Inc. vs. N2PC
G&R& No& )55(*5M %"ne ),= )(()
:ACTS$
>ae Order No& NCR8+*= !rovidin for a twenty8seven !eso wae increase for all !rivate sector
wor;ers and em!loyees in the National Ca!ital Reion receivin one h"ndred Gfty8fo"r !esos
-')62&++. and #elow daily= was a!!roved Novem#er 5(= )((*&
On :e#r"ary )((2= !etitioner a!!lied for eAem!tion from said wae order on the ro"nd that it
was a distressed esta#lishment& The RT>'B denied !etitionerNs a!!lication for eAem!tion after
holdin that the cor!oration acc"m"lated !roGts amo"ntin to '*3=*3)&3+ for the !eriod "nder
review& 'etitionerNs motion for reconsideration was li;ewise denied #y the >aes and 'rod"ctivity
Board on %an"ary 6= )((6& On a!!eal to the National >aes and 'rod"ctivity Commission=
!etitioner was aain denied relief&
More s!eciGcally= !etitioner contends that the interim !eriod to #e rec;oned with is from %an"ary
)= )((* to Decem#er )6= )((* and not merely "! to Se!tem#er *+= )((* as held #y res!ondent
Commission& SiniGcantly= the !eriod "! to Decem#er *)= )((* will reTect losses in !etitioner
cor!orationNs #oo;s= #"t not if the covered interim !eriod is only "! to Se!tem#er *+= )((*&
1SSU4$
>hether or not 'etitioner Cor!oration falls within the eAem!tion for distressed esta#lishments&
RUL1NG$
SC r"led that !etitioner com!any does not fall "nder the eAem!tions iven to distressed
esta#lishments&
The !etitioner com!any is not entitled to eAem!tion of the wae order since it is not a distressed
esta#lishment& Under Section 6 of >ae Order No& NCR8+*= distressed Grms may #e eAem!ted
from the !rovisions of the Order "!on a!!lication with and d"e determination of the Board&
N>'C G"idelines No& +)= Series of )((5= !rovidin for the Revised G"idelines on 4Aem!tion
indicate the criteria to D"alify for eAem!tion as follows$
:or Distressed 4sta#lishments$ 1n the case of a stoc; cor!oration= !artnershi!= sinle
!ro!rietorshi!= non8stoc;= non8!roGt orani7ation or coo!erative enaed in a #"siness activity
or charin fees for its services O>hen acc"m"lated losses for the last 5 f"ll acco"ntin !eriods
and interim !eriod= if any= immediately !recedin the eHectivity of the Order have im!aired #y at
least 56 !ercent the$ 'aid8"! ca!ital at the end of the last f"ll acco"ntin !eriod !recedin the
eHectivity of the Order= in the case of cor!orations$ Total invested ca!ital at the #einnin of the
last f"ll acco"ntin !eriod !recedin the eHectivity of the Order in the case of !artnershi!s and
sinle !ro!rietorshi!s& 4sta#lishments o!eratin for less than two -5. years may #e ranted
eAem!tion when acc"m"lated losses for said !eriod have im!aired #y at least 56X the !aid8"!
ca!ital or total invested ca!ital= as the case may #e&L
Section 3= !arara!h a= of the R"les 1m!lementin >ae Order No& NCR8+* !rovides that
eAem!tion from com!liance with the wae increase may #e ranted to distressed esta#lishments
whose !aid8"! ca!ital has #een im!aired #y at least twenty8Gve !ercent -56X. or which reisters
ca!ital deGciency or neative net worth&
The G"idelines eA!ressly reD"ire interim D"arterly Gnancial statements for the !eriod
immediately !recedin Decem#er )0= )((*& The last two f"ll acco"ntin !eriods here are )(()
and )((5= for which years !etitioner inc"rred net !roGts of '6*=0+,&++ and '0+=)33&++=
res!ectively&
Pruban*ers Assoc. vs. Pru!en"ial Ban*
G&R& No& )*)52,M %an"ary 56= )(((
:ACTS$
On Novem#er= the RT>'B Reion 9 iss"ed >ae Order No& RB +68+* which !rovided for a Cost of
Livin Allowance -COLA. to wor;ers in the !rivate sector who had rendered service for at least
three -*. months #efore its eHectivity= and for the same !eriod thereafter= in the followin
cateories$ '),&6+ in the cities of Naa and Leas!iM ')6&6+ in the m"nici!alities of Ta#aco=
Daraa= 'ili and the city of 1riaM and ')+&++ for all other areas in the Bicol Reion&
On Novem#er )((*= RT>'B Reion 911 iss"ed >ae Order No& RB 9118+*= which directed the
interation of the COLA mandated !"rs"ant to >ae Order No& RO 9118+58A into the #asic !ay of
all wor;ers& 1t also esta#lished an increase in the minim"m wae rates for all wor;ers and
em!loyees in the !rivate sector as follows$ #y Ten 'esos -')+&++. in the cities of Ce#"= Manda"e
and La!"la!"M :ive 'esos -'6&++. in the m"nici!alities of Com!ostela= Liloan= Consolacion=
Cordova= Talisay= Minlanilla= Naa and the cities of Davao= Toledo= D"ma"ete= Bais= Canlaon=
and Ta#ilaran& The #an; ranted a COLA of '),&6+ to its em!loyees at its Naa Branch= the only
#ranch covered #y >ae Order No& RB 68+*= and interated the ')6+&++ !er month COLA into
the #asic !ay of its ran;8and8Gle em!loyees at its Ce#"= Ma#olo and '& del Rosario #ranches= the
#ranches covered #y >ae Order No& RB 9118+*&
On %"ne ,= )((2= 'r"#an;ers Association wrote the !etitioner reD"estin that the La#or
Manaement Committee #e immediately convened to disc"ss and resolve the alleed wae
distortion created in the salary str"ct"re "!on the im!lementation of the said wae orders& 1t
demanded in the La#or Manaement Committee meetins that the !etitioner eAtend the
a!!lication of the wae orders to its em!loyees o"tside Reions 9 and 911= claimin that the
reional im!lementation of the said orders created a wae distortion in the wae rates of
!etitionerNs em!loyees nationwide& As the rievance co"ld not #e settled in the said meetins=
the !arties areed to s"#mit the matter to vol"ntary ar#itration&
1SSU4$
>hether or not a wae distortion res"lted from res!ondentNs im!lementation of the >ae Orders&
RUL1NG$
SC r"led that there is no wae distortion since the wae order im!lementation covers all the
#ranches of the #an;&
The hierarchy of !ositions was still !reserved& The levels of diHerent !ay classes was not
eliminated& The stat"tory deGnition of wae distortion is fo"nd in Article )52 of the La#or Code=
as amended #y Re!"#lic Act No& 0,5,= which reads$ StandardsJCriteria for Minim"m >ae :iAin
O & & &LAs "sed herein= a wae distortion shall mean a sit"ation where an increase in !rescri#ed
wae res"lts in the elimination or severe contraction of intentional D"antitative diHerences in
wae or salary rates #etween and amon em!loyee ro"!s in an esta#lishment as to eHectively
o#literate the distinctions em#odied in s"ch wae str"ct"re #ased on s;ills= lenth of service= or
other loical #ases of diHerentiation&L
>ae distortion involves fo"r elements$ -). An eAistin hierarchy of !ositions with corres!ondin
salary ratesM -5. A siniGcant chane in the salary rate of a lower !ay class witho"t a
concomitant increase in the salary rate of a hiher oneM -*. The elimination of the distinction
#etween the two levels and -2. The eAistence of the distortion in the same reion of the co"ntry&
A dis!arity in waes #etween em!loyees holdin similar !ositions #"t in diHerent reions does
not constit"te wae distortion as contem!lated #y law& As stated= it is the hierarchy of !ositions
and the dis!arity of their corres!ondin waes and other emol"ments that are so"ht to #e
!reserved #y the conce!t of wae distortion&
Millares e". al vs. NLRC
G&R& No& )5535,M March 5(= )(((
:ACTS$
'etitioners n"m#erin one h"ndred siAteen occ"!ied the !ositions of Technical StaH= Unit
Manaer= Section Manaer= De!artment Manaer= Division Manaer and 9ice 'resident in the mill
site of res!ondent 'a!er 1nd"stries Cor!oration of the 'hili!!ines -'1CO'. in Bisli= S"riao del
S"r&
1n )((5 '1CO' s"Hered a maEor Gnancial set#ac; alleedly #ro"ht a#o"t #y the Eoint im!act of
restrictive overnment re"lations on loin and the economic crisis& To avert f"rther losses= it
"ndertoo; a retrenchment !roram and terminated the services of !etitioners& Accordinly=
!etitioners received se!aration !ay com!"ted at the rate of one -). month #asic !ay for every
year of service& Believin however that the allowances they alleedly re"larly received on a
monthly #asis d"rin their em!loyment sho"ld have #een incl"ded in the com!"tation thereof
they loded a com!laint for se!aration !ay diHerentials&
1SSU4$
>hether the allowances are incl"ded in the deGnition of LfacilitiesL in Art& (,= !ar& -f.= of the
La#or Code= #ein necessary and indis!ensa#le for their eAistence and s"#sistence&
RUL1NG$
SC r"led that allowances are not !art of the waes of the em!loyees&
>ae is deGned in letter -f. as the rem"neration or earnins= however desinated= ca!a#le of
#ein eA!ressed in terms of money= whether GAed or ascertained on a time= tas;= !iece= or
commission #asis= or other method of calc"latin the same= which is !aya#le #y an em!loyer to
an em!loyee "nder a written or "nwritten contract of em!loyment for wor; done or to #e done=
or for services rendered or to #e rendered and incl"des the fair and reasona#le val"e= as
determined #y the Secretary of La#or= of #oard= lodin= or other facilities c"stomarily f"rnished
#y the em!loyer to the em!loyee&
>hen an em!loyer c"stomarily f"rnishes his em!loyee #oard= lodin or other facilities= the fair
and reasona#le val"e thereof= as determined #y the Secretary of La#or and 4m!loyment= is
incl"ded in Lwae&L C"stomary is fo"nded on lon8esta#lished and constant !ractice connotin
re"larity& The recei!t of an allowance on a monthly #asis does not i!so facto characteri7e it as
re"lar and formin !art of salary #eca"se the nat"re of the rant is a factor worth considerin&
The co"rt arees with the o#servation of the OIce of the Solicitor General that the s"#Eect
allowances were tem!orarily= not re"larly= received #y !etitioners& Altho"h it is D"ite easy to
com!rehend L#oardL and Llodin=L it is not so with Lfacilities&L Th"s Sec& 6= R"le 911= Boo; 111= of
the R"les 1m!lementin the La#or Code ives meanin to the term as incl"din articles or
services for the #eneGt of the em!loyee or his family #"t eAcl"din tools of the trade or articles
or service !rimarily for the #eneGt of the em!loyer or necessary to the cond"ct of the em!loyerNs
#"siness&
1n determinin whether a !rivilee is a facility= the criterion is not so m"ch its ;ind #"t its
!"r!ose& Reven"e A"dit Memo Order No& )83, !ertinently !rovides O*&5/ trans!ortation=
re!resentation or entertainment eA!enses shall not constit"te taAa#le com!ensation if$ -a. 1t is
for necessary travellin and re!resentation or entertainment eA!enses !aid or inc"rred #y the
em!loyee in the !"rs"it of the trade or #"siness of the em!loyer= and -#. The em!loyee is
reD"ired to= and does= ma;e an acco"ntinJliD"idation for s"ch eA!ense in accordance with the
s!eciGc reD"irements of s"#stantiation for s"ch cateory or eA!ense&Board and lodin
allowances f"rnished to an em!loyee not in eAcess of the latterNs needs and iven free of chare=
constit"te income to the latter eAce!t if s"ch allowances or #eneGts are f"rnished to the
em!loyee for the convenience of the em!loyer and as necessary incident to !ro!er !erformance
of his d"ties in which case s"ch #eneGts or allowances do not constit"te taAa#le income&
The Secretary of La#or and 4m!loyment "nder Sec& 0= R"le 911= Boo; 111= of the R"les
1m!lementin the La#or Code may from time to time GA in a!!ro!riate iss"ances the Lfair and
reasona#le val"e of #oard= lodin and other facilities c"stomarily f"rnished #y an em!loyer to
his em!loyees&L 'etitionersN allowances do not re!resent s"ch fair and reasona#le val"e as
determined #y the !ro!er a"thority sim!ly #eca"se the StaHJManaerNs allowance and
trans!ortation allowance were amo"nts iven #y res!ondent com!any in lie" of act"al !rovisions
for ho"sin and trans!ortation needs whereas the Bisli allowance was iven in consideration of
#ein assined to the hostile environment then !revailin in Bisli& The inevita#le concl"sion is
that s"#Eect allowances did not form !art of !etitionersN waes&
In"erna"ional School Alliance of E!uca"ors vs. ;uisu#bing
G&R& No& )53326M %"ne )= 5+++
:ACTS$
1nternational School= 1nc&= !"rs"ant to 'residential Decree ,*5= is a domestic ed"cational
instit"tion esta#lished !rimarily for de!endents of forein di!lomatic !ersonnel and other
tem!orary residents& To ena#le the School to contin"e carryin o"t its ed"cational !roram and
im!rove its standard of instr"ction= Section 5-c. of the same decree a"thori7es the School to
em!loy its own teachin and manaement !ersonnel selected #y it either locally or a#road= from
'hili!!ine or other nationalities= s"ch !ersonnel #ein eAem!t from otherwise a!!lica#le laws
and re"lations attendin their em!loyment= eAce!t laws that have #een or will #e enacted for
the !rotection of em!loyees&
The School hires #oth forein and local teachers as mem#ers of its fac"lty= classifyin the same
into two$ -). forein8hires and -5. local8hires& The School em!loys fo"r tests to determine
whether a fac"lty mem#er sho"ld #e classiGed as a forein8hire or a local hire$ -a. >hat is oneNs
domicileZ -#. >here is oneNs home economyZ -c. To which co"ntry does one owe economic
alleianceZ -d. >as the individ"al hired a#road s!eciGcally to wor; in the School and was the
School res!onsi#le for #rinin that individ"al to the 'hili!!inesZ Sho"ld the answer to any of
these D"eries !oint to the 'hili!!ines= the fac"lty mem#er is classiGed as a local hireM otherwise=
he or she is deemed a forein8hire&
The School rants forein8hires certain #eneGts not accorded local8 hires& These incl"de ho"sin=
trans!ortation= shi!!in costs= taAes= and home leave travel allowance& :orein8hires are also
!aid a salary rate twenty8Gve !ercent -56X. more than local8hires& The School E"stiGes the
diHerence on two LsiniGcant economic disadvantaesL forein8hires have to end"re= namely$ -a.
the Ldislocation factorL and -#. limited ten"re& The com!ensation scheme is sim!ly the SchoolNs
ada!tive meas"re to remain com!etitive on an international level in terms of attractin
com!etent !rofessionals in the Geld of international ed"cation&
1SSU4$
>hether or not local hire teachers sho"ld #e ranted the same salary as forein hire teachers
RUL1NG$
SC r"led that local hire teachers sho"ld #e ranted the same salary as that of forein hire
teachers&
Nota#ly= the 1nternational Covenant on 4conomic= Social= and C"lt"ral Rihts= s"!ra= in Article ,
thereof= !rovides$ The States 'arties to the !resent Covenant reconi7e the riht of everyone to
the enEoyment of E"st and favora#le conditions of wor;= which ens"re= in !artic"lar$ - a.
Rem"neration which !rovides all wor;ers= as a minim"m= with$ -i. :air waes and eD"al
rem"neration for wor; of eD"al val"e witho"t distinction of any ;ind= in !artic"lar women #ein
"aranteed conditions of wor; not inferior to those enEoyed #y men= with eD"al !ay for eD"al
wor;M
The foreoin !rovisions im!rena#ly instit"tionali7e in this E"risdiction the lon honored leal
tr"ism of LeD"al !ay for eD"al wor;&L 'ersons who wor; with s"#stantially eD"al D"aliGcations=
s;ill= eHort and res!onsi#ility= "nder similar conditions= sho"ld #e !aid similar salaries& This r"le
a!!lies to the School&
The School contends that !etitioner has not add"ced evidence that local8hires !erform wor;
eD"al to that of forein8hires& The Co"rt Gnds this ar"ment a little inconsiderate& 1f an em!loyer
accords em!loyees the same !osition and ran;= the !res"m!tion is that these em!loyees
!erform eD"al wor;& 1f the em!loyer !ays one em!loyee less than the rest= it is not for that
em!loyee to eA!lain why he receives less or why the others receive more& The em!loyer has
discriminated aainst that em!loyeeM it is for the em!loyer to eA!lain why the em!loyee is
treated "nfairly&
1n this case= the em!loyer has failed to dischare this #"rden& There is no evidence here that
forein8hires !erform 56X more eIciently or eHectively than the local8hires& Both ro"!s have
similar f"nctions and res!onsi#ilities= which they !erform "nder similar wor;in conditions& Th"s
the em!loyees are entitled to same salary for !erformance of eD"al wor;&
Ban*ar! E#ploees <nion vs. NLRC
G&R& No& )2+03(M :e#r"ary ),= 5++2
:ACTS$
Ban;ard= 1nc& classiGes its em!loyees #y levels$ Level 1= Level 11= Level 111= Level 19= and Level 9& On
May )((*= its Board of Directors a!!roved a New Salary Scale= made retroactive to A!ril )= )((*=
for the !"r!ose of ma;in its hirin rate com!etitive in the ind"stry<s la#or mar;et& The New
Salary Scale increased the hirin rates of new em!loyees= to wit$ Levels 1 and 9 #y one tho"sand
!esos -')=+++&++.= and Levels 11= 111 and 19 #y nine h"ndred !esos -'(++&++.& Accordinly= the
salaries of em!loyees who fell #elow the new minim"m rates were also adE"sted to reach s"ch
rates "nder their levels&
This made Ban;ard 4m!loyees Union8>ATU -!etitioner.= the d"ly certiGed eAcl"sive #arainin
aent of the re"lar ran; and Gle em!loyees of Ban;ard= to reD"est for the increase in the salary
of its old= re"lar em!loyees& Ban;ard insisted that there was no o#liation on the !art of the
manaement to rant to all its em!loyees the same increase in an across8the8#oard manner&
'etitioner Gled a notice of stri;e& The stri;e was averted when the dis!"te was certiGed #y the
Secretary of La#or and 4m!loyment for com!"lsory ar#itration& NLRC Gndin no wae distortion
dismissed the case for lac; of merit& 'etitioner<s motion for reconsideration of the dismissal of
the case was denied&
1SSU4$
>hether the "nilateral ado!tion #y an em!loyer of an "!raded salary scale that increased the
hirin rates of new em!loyees witho"t increasin the salary rates of old em!loyees res"lted in
wae distortion within the contem!lation of Article )52 of the La#or Code&
RUL1NG$
The Co"rt will not interfere in the manaement !reroative of the !etitioner& The em!loyees are
not !recl"ded to neotiate thro"h the !rovisions of the CBA&
U!on the enactment of R&A& No& 0,5, ->AG4 RAT1ONAL1RAT1ON ACT= amendin= amon others=
Article )52 of the La#or Code.= the term Lwae distortionL was eA!licitly deGned as&&& a sit"ation
where an increase in !rescri#ed wae rates res"lts in the elimination or severe contraction of
intentional D"antitative diHerences in wae or salary rates #etween and amon em!loyee ro"!s
in an esta#lishment as to eHectively o#literate the distinctions em#odied in s"ch wae str"ct"re
#ased on s;ills= lenth of service= or other loical #ases of diHerentiation&
1n the case of 'r"#an;ers Association v& 'r"dential Ban; and Tr"st Com!any= it laid down the fo"r
elements of wae distortion= to wit$ -)&. An eAistin hierarchy of !ositions with corres!ondin
salary ratesM -5. A siniGcant chane in the salary rate of a lower !ay class witho"t a
concomitant increase in the salary rate of a hiher oneM -*. The elimination of the distinction
#etween the two levelsM and -2. The eAistence of the distortion in the same reion of the co"ntry&
Normally= a com!any has a wae str"ct"re or method of determinin the waes of its
em!loyees& 1n a !ro#lem dealin with Lwae distortion=L the #asic ass"m!tion is that there eAists
a ro"!in or classiGcation of em!loyees that esta#lishes distinctions amon them on some
relevant or leitimate #ases& 1nvolved in the classiGcation of em!loyees are vario"s factors s"ch
as the derees of res!onsi#ility= the s;ills and ;nowlede reD"ired= the com!leAity of the Eo#= or
other loical #asis of diHerentiation& The diHerin wae rate for each of the eAistin classes of
em!loyees reTects this classiGcation&
'"t diHerently= the entry of new em!loyees to the com!any i!so facto !laces them "nder any of
the levels mentioned in the new salary scale which !rivate res!ondent ado!ted retroactive to
A!ril )= )((*& >hile seniority may #e a factor in determinin the waes of em!loyees= it cannot
#e made the sole #asis in cases where the nat"re of their wor; diHers&
Moreover= for !"r!oses of determinin the eAistence of wae distortion= em!loyees cannot create
their own inde!endent classiGcation and "se it as a #asis to demand an across8the8#oard
increase in salary&
The wordins of Article )52 are clear& 1f it was the intention of the leislators to cover all ;inds of
wae adE"stments= then the lan"ae of the law sho"ld have #een #road= not restrictive as it is
c"rrently !hrased$
Article )52& StandardsJCriteria for Minim"m >ae :iAin& >here the a!!lication of any !rescri#ed
wae increase #y virt"e of a law or >ae Order iss"ed #y any Reional Board res"lts in
distortions of the wae str"ct"re within an esta#lishment= the em!loyer and the "nion shall
neotiate to correct the distortions& Any dis!"te arisin from the wae distortions shall #e
resolved thro"h the rievance !roced"re "nder their collective #arainin areement and= if it
remains "nresolved= thro"h vol"ntary ar#itration&
Article )52 is entitled LStandardsJCriteria for Minim"m >ae :iAin&L 1t is fo"nd in C?A'T4R 9 on
L>AG4 STUD14S= >AG4 AGR44M4NTS AND >AG4 D4T4RM1NAT1ONL which !rinci!ally deals with
the GAin of minim"m wae& Article )52 sho"ld th"s #e constr"ed and correlated in relation to
minim"m wae GAin= the intention of the law #ein that in the event of an increase in minim"m
wae= the distinctions em#odied in the wae str"ct"re #ased on s;ills= lenth of service= or other
loical #ases of diHerentiation will #e !reserved&
1f the com!"lsory mandate "nder Article )52 to correct Lwae distortionL is a!!lied to vol"ntary
and "nilateral increases #y the em!loyer in GAin hirin rates which is inherently a #"siness
E"dment !reroative= then the hands of the em!loyer wo"ld #e com!letely tied even in cases
where an increase in waes of a !artic"lar ro"! is E"stiGed d"e to a re8eval"ation of the hih
!rod"ctivity of a !artic"lar ro"!= or as in the !resent case= the need to increase the
com!etitiveness of Ban;ard<s hirin rate& An em!loyer wo"ld #e disco"raed from adE"stin the
salary rates of a !artic"lar ro"! of em!loyees for fear that it wo"ld res"lt to a demand #y all
em!loyees for a similar increase= es!ecially if the Gnancial conditions of the #"siness cannot
address an across8the8#oard increase&
>ae distortion is a fact"al and economic condition that may #e #ro"ht a#o"t #y diHerent
ca"ses& The mere fact"al eAistence of wae distortion does not= however= i!so facto res"lt to an
o#liation to rectify it= a#sent a law or other so"rce of o#liation which reD"ires its rectiGcation&
6!ango vs. NLRC
G&R& No& )2,25+M %"ne )+= 5++2
:ACTS$
'etitioners are monthly8!aid em!loyees of ANT4CO whose wor;days are from Monday to :riday
and half of Sat"rday& After a ro"tine ins!ection= the Reional Branch of the De!artment of La#or
and 4m!loyment fo"nd ANT4CO lia#le for "nder!ayment of the monthly salaries of its
em!loyees& On Se!tem#er )(3(= the DOL4 directed ANT4CO to !ay its em!loyees wae
diHerentials amo"ntin to ')=25,=2)5&,6& ANT4CO failed to !ay& On vario"s dates in )((6= thirty8
three -**. monthly8!aid em!loyees Gled com!laints with the NLRC !rayin for !ayment of wae
diHerentials= damaes and attorney<s fees&
On Novem#er )((0= the La#or Ar#iter rendered a Decision in favor of !etitioners rantin them
wae diHerentials amo"ntin to ')=+),=6+,&,* and attorney<s fees of )+X& ANT4CO a!!ealed
the Decision to the NLRC where it reversed the La#or Ar#iter<s Decision& The NLRC denied
!etitioners< motion for reconsideration& 'etitioners then elevated the case to CA where it
dismissed the !etition for fail"re to com!ly with Section *= R"le 20 of the R"les of Co"rt& The
Co"rt of A!!eals eA!lained that !etitioners failed to allee the s!eciGc instances where the NLRC
a#"sed its discretion& The a!!ellate co"rt denied !etitioners< motion for reconsideration& ?ence=
this !etition&
1SSU4$
>hether or not the !etitioners are entitled to money claims&
RUL1NG$
SC r"led that the !etitioners are not entitled to money claims or wae diHerentials&
The !etitioners claim is #ased on Section 5= R"le 19= Boo; 111 of the 1m!lementin R"les and 'olicy
1nstr"ctions No& ( iss"ed #y the Secretary of La#or which was declared n"ll and void since in the
"ise of clarifyin the La#or Code<s !rovisions on holiday !ay= they in eHect amended them #y
enlarin the sco!e of their eAcl"sion&
4ven ass"min that Section 5= R"le 19 of Boo; 111 is valid= their claim will still fail& The #asic r"le in
this E"risdiction is Lno wor;= no !ay&L The riht to #e !aid for "n8wor;ed days is enerally limited
to the ten leal holidays in a year& 'etitioners< claim is #ased on a mista;en notion that Section 5=
R"le 19 of Boo; 111 ave rise to a riht to #e !aid for "n8wor;ed days #eyond the ten leal
holidays& 'etitioners< line of reasonin is not only a violation of the Lno wor;= no !ayL !rinci!le= it
also ives rise to an invidio"s classiGcation= a violation of the eD"al !rotection cla"se&
C. Planas Co##ercial vs. NLRC
G&R& No& )220)(M Novem#er ))= 5++6
:ACTS$
1n Se!tem#er )((*= Morente= Alla"ian and OGalda and others Gled a com!laint for
"nder!ayment of waes= non !ayment of overtime !ay= holiday !ay= service incentive leave !ay=
and !remi"m !ay for rest day and holiday and niht shift diHerential aainst !etitioners in the
Ar#itration Branch of NLRC& 1t alleed that Coh" is enaed in the #"siness of wholesale of
!lastic !rod"cts and fr"its of diHerent ;inds with more than 52 em!loyees& Res!ondents were
hired on %an"ary )((+= May )((+ and %"ly )((() as la#orers and were !aid #elow the minim"m
wae for the !ast * years& They were reD"ired to wor; for more than 3 ho"rs a day and never
enEoyed the minim"m #eneGts& 'etitioners Gled their comment statin that the res!ondents were
their hel!ers&
The La#or Ar#iter rendered a decision dismissin the money claims& Res!ondents Gled an a!!eal
with the NLRC where it ranted the money claims of OGalda= Morente and Alla"ian& 'etitioners
a!!ealed with the CA #"t it was denied& 1t said that the com!any havin claimed of eAem!tion of
the coverae of the minim"m wae shall have the #"rden of !roof to the claim&
1n the !resent !etition= the 'etitioners insist that C& 'lanas Commercial is a retail esta#lishment
!rinci!ally enaed in the sale of !lastic !rod"cts and fr"its to the c"stomers for !ersonal "se=
th"s eAem!ted from the a!!lication of the minim"m wae lawM that it merely leases and
occ"!ies a stall in the Divisoria Mar;et and the level of its #"siness activity reD"ires and s"stains
only less than ten em!loyees at a time& 'etitioners contend that !rivate res!ondents were !aid
over and a#ove the minim"m wae reD"ired for a retail esta#lishment= th"s the La#or Ar#iter is
correct in r"lin that !rivate res!ondents< claim for "nder!ayment has no fact"al and leal
#asis& 'etitioners claim that since !rivate res!ondents alleed that !etitioners em!loyed 52
wor;ers= it was inc"m#ent "!on them to !rove s"ch alleation which !rivate res!ondents failed
to do&
1SSU4$
>hether or not !etitioner is eAem!ted from the a!!lication of minim"m wae law&
RUL1NG$
The contention of the !etitioners that they are eAem!ted #y the law m"st #e !roven& The
!etitioners have not s"ccessf"lly shown that they had a!!lied for the eAem!tion&
R&A& No& 0,5, ;nown as the >ae Rationali7ation Act !rovides for the stat"tory minim"m wae
rate of all wor;ers and em!loyees in the !rivate sector& Section 2 of the Act !rovides for
eAem!tion from the coverae= th"s$ Sec& 2& -c. 4Aem!ted from the !rovisions of this Act are
ho"sehold or domestic hel!ers and !ersons em!loyed in the !ersonal service of another=
incl"din family drivers& Also= retailJservice esta#lishments re"larly em!loyin not more than
ten -)+. wor;ers may #e eAem!ted from the a!!lica#ility of this Act "!on a!!lication with and as
determined #y the a!!ro!riate Reional Board in accordance with the a!!lica#le r"les and
re"lations iss"ed #y the Commission& >henever an a!!lication for eAem!tion has #een d"ly
Gled with the a!!ro!riate Reional Board= action on any com!laint for alleed non8com!liance
with this Act shall #e deferred !endin resol"tion of the a!!lication for eAem!tion #y the
a!!ro!riate Reional Board&
1n the event that a!!lications for eAem!tions are not ranted= em!loyees shall receive the
a!!ro!riate com!ensation d"e them as !rovided for #y this Act !l"s interest of one !ercent -)X.
!er month retroactive to the eHectivity of this Act&
Clearly= for a retailJservice esta#lishment to #e eAem!ted from the coverae of the minim"m
wae law= it m"st #e shown that the esta#lishment is re"larly em!loyin not more than ten -)+.
wor;ers and had a!!lied for eAem!tions with and as determined #y the a!!ro!riate Reional
Board in accordance with the a!!lica#le r"les and re"lations iss"ed #y the Commission&
E1R Craf"s Corp. vs. CA
G&R& No& )62)+)M March )+= 5++0
:ACTS$
1n )((,= !rivate res!ondents Gled a com!laint for "nder!ayment of waes= re"lar holiday !ay=
overtime !ay= non!ayment of )*th month !ay and service incentive leave !ay aainst !etitioner
#efore the Reional OIce= NCR of the De!artment of La#or and 4m!loyment -DOL4.& Actin on
the com!laint= Reional Director iss"ed an ins!ection a"thority to Senior La#or 4nforcement
OIcer&
On 55 A""st )((,= an ins!ection was cond"cted on the !remises of !etitioner<s oIces wherein
the followin violations of la#or standards law were discovered= to wit$ non8!resentation of
em!loyment records -!ayrolls and daily time records.M "nder!ayment of waes= re"lar holiday
!ay= and overtime !ayM and non!ayment of )*th month !ay and service incentive leave !ay& On
the same day= the Notice of 1ns!ection Res"lt was received #y and eA!lained to the manaer of
!etitioner cor!oration Mr& %ae Kwan Lee= with the corres!ondin directive that necessary
restit"tion #e eHected within Gve days from said recei!t&
As no restit"tion was made= the Reional OIce thereafter cond"cted s"mmary investiations&
?owever= des!ite d"e notice= !etitioner failed to a!!ear for two consec"tive sched"led hearins&
'etitioner failed to D"estion the Gndins of the La#or 1ns!ector received #y and eA!lained to the
cor!oration<s manaer& 'etitioner then Gled a Motion for Reconsideration of said Order ar"in
that the Reional Director has no E"risdiction over the case as !rivate res!ondents were alleedly
no loner connected with !etitioner cor!oration at the time of the Glin of the com!laint and
when the ins!ection was cond"cted= and that !rivate res!ondents< claims are within the
eAcl"sive and oriinal E"risdiction of the La#or Ar#iters&
1SSU4$
>hether or not the Reional Director has E"risdiction over the claims of herein !rivate
res!ondents&
RUL1NG$
The Co"rt favors the res!ondents in the money claims aainst the !etitioner com!any& 1t is
admitted that for the Reional Director to eAercise the !ower to order com!liance= or the so8
called Lenforcement !owerL "nder Article )53-#. of '&D& No& 225 as amended= it is necessary that
the em!loyer8em!loyee relationshi! still eAists&
1n s"!!ort of its contention that it is the La#or Ar#iter and not the Reional Director who has
E"risdiction over the claims of herein !rivate res!ondents= !etitioner contends that at the time
the com!laint was Gled= the !rivate res!ondents were no loner its em!loyees& Considerin th"s
that there still eAists an em!loyer8em!loyee relationshi! #etween !etitioner and !rivate
res!ondents and that the case involves violations of la#or standard !rovisions of the La#or Code=
we aree with the Undersecretary of La#or and the a!!ellate co"rt that the Reional Director has
E"risdiction to hear and decide the instant case in conformity with Article )53-#. of the La#or
Code which states$ Art& )53& 9isitorial and 4nforcement 'ower& S-#. Notwithstandin the
!rovisions of Articles )5( and 5), of this Code to the contrary= and in cases where the
relationshi! of em!loyer8em!loyee still eAists= the Secretary of La#or and 4m!loyment or his d"ly
a"thori7ed re!resentatives shall have the !ower to iss"e com!liance orders to ive eHect to the
la#or standards !rovisions of this Code and other la#or leislation #ased on the Gndins of la#or
em!loyment and enforcement oIcers or ind"strial safety enineers made in the co"rse of
ins!ection& The Secretary or his d"ly a"thori7ed re!resentatives shall iss"e writs of eAec"tion to
the a!!ro!riate a"thority for the enforcement of their orders= eAce!t in cases where the
em!loyer contests the Gndins of the la#or em!loyment and enforcement oIcer and raises
iss"es s"!!orted #y doc"mentary !roofs which were not considered in the co"rse of ins!ection&
Pag Asa S"eel 2or*s vs. CA
G&R& No& )0002,M March *)= 5++0
:ACTS$
'etitioner 'a8Asa Steel >or;s= 1nc& is a cor!oration d"ly orani7ed and eAistin "nder 'hili!!ine
laws and is enaed in the man"fact"re of steel #ars and wire rods& 'a8Asa Steel >or;ers Union
is the d"ly a"thori7ed #arainin aent of the ran;8and8Gle em!loyees&
RT>'B of NCR iss"ed a wae order which !rovided for a ' )*&++ increase of the salaries
receivin minim"m waes& The 'etitioner and the "nion neotiated on the increase& 'etitioner
forwarded a letter to the "nion with the list of adE"stments involvin ran; and Gle em!loyees& 1n
Se!tem#er )(((= the !etitioner and "nion entered into an collective #arainin areement
where it !rovided wae adE"stments namely ')6= '56= '*+ for three s"cceedin year& On the Grst
year= the increase !rovided were followed "ntil RT>'B iss"ed another wae order where it
!rovided for a '56&6+ !er day increase in the salary of em!loyees receivin the minim"m wae
and increased the minim"m wae to '55*&6+ !er day& 'etitioner !aid the '56&6+ !er day
increase to all of its ran;8and8Gle em!loyees&
On Novem#er 5+++= >ae Order No& NCR8+3 was iss"ed where it !rovided the increase of '50&6+
!er day& The "nion !resident as;ed that the wae order #e im!lemented where !etitioner
reEected the reD"est claimin that there was no wae distortion and it was not o#lied to rant
the wae increase& The "nion s"#mitted the matter for vol"ntary ar#itration where it favored the
!osition of the com!any and dismissed the com!laint& The matter was elevated to CA where it
favored the res!ondents& ?ence= this !etition&
1SSU4$
>hether or not the com!any was o#lied to rant the wae increase "nder >ae Order No& NCR8
+3 as a matter of !ractice&
RUL1NG$
The Co"rt favors the !etitioner that wae increase shall not #e ranted #y virt"e of CBA or
matter of !ractice #y the com!any& 1t is s"#mitted that em!loyers "nless eAem!t are mandated
to im!lement the said wae order #"t limited to those entitled thereto& There is no leal #asis to
im!lement the same across8the8#oard& A !er"sal of the record shows that the lowest !aid
em!loyee #efore the im!lementation of >ae Order [3 is '56+&++Jday and none was receivin
#elow '55*&6+ minim"m& This co"ld only mean that the "nion can no loner demand for any
wae distortion adE"stment& The !rovision of wae order [3 and its im!lementin r"les are very
clear as to who are entitled to the '50&6+Jday increase= i&e&= L!rivate sector wor;ers and
em!loyees in the National Ca!ital Reion receivin the !rescri#ed daily minim"m wae rate of
'55*&6+ shall receive an increase of Twenty8SiA 'esos and :ifty Centavos -'50&6+. !er day=L and
since the lowest !aid is '56+&++Jday the com!any is not o#lied to adE"st the waes of the
wor;ers&
The !rovision in the CBA that LAny >ae Order to #e im!lemented #y the Reional Tri!artite
>ae and 'rod"ctivity Board shall #e in addition to the wae increase adverted a#oveL cannot
#e inter!reted in s"!!ort of an across8the8#oard increase& 1f s"ch were the intentions of this
!rovision= then the com!any co"ld have sim!ly acce!ted the oriinal demand of the "nion for
s"ch across8the8#oard im!lementation= as set forth in their oriinal !ro!osal& The fact that the
com!any reEected this !ro!osal can only mean that it was never its intention to aree= to s"ch
across8the8#oard im!lementation& >ae Order No& NCR8+3 clearly states that only those
em!loyees receivin salaries #elow the !rescri#ed minim"m wae are entitled to the wae
increase !rovided therein= and not all em!loyees across8the8#oard as res!ondent Union wo"ld
want !etitioner to do& Considerin therefore that none of the mem#ers of res!ondent Union are
receivin salaries #elow the '56+&++ minim"m wae= !etitioner is not o#lied to rant the wae
increase to them&
Moreover= to ri!en into a com!any !ractice that is demanda#le as a matter of riht= the ivin of
the increase sho"ld not #e #y reason of a strict leal or contract"al o#liation= #"t #y reason of
an act of li#erality on the !art of the em!loyer& ?ence= even if the com!any contin"o"sly rants a
wae increase as mandated #y a wae order or !"rs"ant to a CBA= the same wo"ld not
a"tomatically ri!en into a com!any !ractice&
Me"ropoli"an Ban* vs. N2PC
G&R& No& )22*55M :e#r"ary 0= 5++,
:ACTS$
On Octo#er ),= )((6= the Reional Tri!artite >aes and 'rod"ctivity Board= Reion 11=
T""earao= Caayan -RT>'B.= #y virt"e of Re!"#lic Act No& 0,5, -R&A& No& 0,5,.= otherwise
;nown as the >ae Rationali7ation Act= iss"ed >ae Order No& R+58+* ->ae Order.= as follows$
Section )& U!on eHectivity of this >ae Order= all em!loyeesJwor;ers in the !rivate sector
thro"ho"t Reion 11= reardless of the stat"s of em!loyment are ranted an across8the8#oard
increase of ')6&++ daily&
The >ae Order was !"#lished in a news!a!er of eneral circ"lation on Decem#er 5= )((6 and
too; eHect on %an"ary )= )((0& 1ts 1m!lementin R"les were a!!roved on :e#r"ary )2= )((0& 'er
Section )* of the >ae Order= any !arty arieved #y the >ae Order may Gle an a!!eal with
the National >aes and 'rod"ctivity Commission -N>'C. thro"h the RT>'B within )+ calendar
days from the !"#lication of the >ae Order&
Ban;er<s Co"ncil in a letter inD"iry to N>'C reD"ested for r"lin to see; eAem!tion from
coverae of the wae order since the mem#ers #an; are !ayin more than the re"lar wae&
N>'C re!lied that the mem#er #an;s are covered #y the wae order and does not fall with the
eAem!ti#le cateories&
1n another letter inD"iry= Metro#an; as;ed for the inter!retation of the a!!lica#ility of the wae
order& N>'C referred it to RT>'B& RT>'B in ret"rn clariGed that esta#lishments in Reion 5 are
covered #y the wae order& 'etitioner Gled a !etition with the CA and denied the !etition&
1SSU4$
>hether or not the wae order is void th"s it has no leal eHect and the RT>'B acted in eAcess
of its E"risdiction&
RUL1NG$
The Co"rt Gnds that Section )= >ae Order No& R+58+* is void insofar as it rants a wae
increase to em!loyees earnin more than the minim"m wae rateM and !"rs"ant to the
se!ara#ility cla"se of the >ae Order= Section ) is declared valid with res!ect to em!loyees
earnin the !revailin minim"m wae rate&
The !owers of N>'C are en"merated in ART& )5)& 'owers and :"nctions of the Commission& 8 The
Commission shall have the followin !owers and f"nctions$ -d. To review reional wae levels set
#y the Reional Tri!artite >aes and 'rod"ctivity Boards to determine if these are in accordance
with !rescri#ed "idelines and national develo!ment !lansM -f. To review !lans and !rorams of
the Reional Tri!artite >aes and 'rod"ctivity Boards to determine whether these are consistent
with national develo!ment !lansM -. To eAercise technical and administrative s"!ervision over
the Reional Tri!artite >aes and 'rod"ctivity Boards&
R&A& No& 0,5, declared it a !olicy of the State to rationali7e the GAin of minim"m waes and to
!romote !rod"ctivity8im!rovement and ain8sharin meas"res to ens"re a decent standard of
livin for the wor;ers and their familiesM to "arantee the rihts of la#or to its E"st share in the
fr"its of !rod"ctionM to enhance em!loyment eneration in the co"ntryside thro"h ind"strial
dis!ersalM and to allow #"siness and ind"stry reasona#le ret"rns on investment= eA!ansion and
rowth&
1n line with its declared !olicy= R&A& No& 0,5, created the N>'C= vested with the !ower to
!rescri#e r"les and "idelines for the determination of a!!ro!riate minim"m wae and
!rod"ctivity meas"res at the reional= !rovincial or ind"stry levelsM and a"thori7ed the RT>'B to
determine and GA the minim"m wae rates a!!lica#le in their res!ective reions= !rovinces= or
ind"stries therein and iss"e the corres!ondin wae orders= s"#Eect to the "idelines iss"ed #y
the N>'C& '"rs"ant to its wae GAin a"thority= the RT>'B may iss"e wae orders which set the
daily minim"m wae rates= #ased on the standards or criteria set #y Article )52 of the La#or
Code&
The Co"rt declared that there are two ways of GAin the minim"m wae$ the LToor8waeL
method and the Lsalary8ceilinL method& The LToor8waeL method involves the GAin of a
determinate amo"nt to #e added to the !revailin stat"tory minim"m wae rates& On the other
hand= in the Lsalary8ceilinL method= the wae adE"stment was to #e a!!lied to em!loyees
receivin a certain denominated salary ceilin& 1n other words= wor;ers already #ein !aid more
than the eAistin minim"m wae -"! to a certain amo"nt stated in the >ae Order. are also to
#e iven a wae increase&
1n the !resent case= the RT>'B did not determine or GA the minim"m wae rate #y the LToor8
wae methodL or the Lsalary8ceilin methodL in iss"in the >ae Order& The RT>'B did not set a
wae level nor a rane to which a wae adE"stment or increase shall #e added& 1nstead= it
ranted an across8the8#oard wae increase of ')6&++ to all em!loyees and wor;ers of Reion 5&
1n doin so= the RT>'B eAceeded its a"thority #y eAtendin the coverae of the >ae Order to
wae earners receivin more than the !revailin minim"m wae rate= witho"t a denominated
salary ceilin& As correctly !ointed o"t #y the OSG= the >ae Order ranted additional #eneGts
not contem!lated #y R&A& No& 0,5,&
E=ui"able Ban* vs. Sa!ac
G&R& No& )02,,5M %"ne 3= 5++0
:ACTS$
Ricardo Sadac was a!!ointed 9ice 'resident of the Leal De!artment of !etitioner Ban; eHective
) A""st )(3)= and s"#seD"ently General Co"nsel thereof on 3 Decem#er )(3)& On %"ne )(3(=
nine lawyers of !etitioner Ban;<s Leal De!artment= in a letter8!etition to the Chairman of the
Board of Directors= acc"sed res!ondent Sadac of a#"sive cond"ct and "ltimately= !etitioned for a
chane in leadershi! of the de!artment& On the ro"nd of lac; of conGdence in Sadac= "nder the
r"les of client and lawyer relationshi!= !etitioner Ban; instr"cted res!ondent Sadac to deliver all
materials in his c"stody in all cases in which the latter was a!!earin as its co"nsel of record& 1n
reaction thereto= Sadac reD"ested for a f"ll hearin and formal investiation #"t the same
remained "nheeded& On ( Novem#er )(3(= res!ondent Sadac Gled a com!laint for illeal
dismissal with damaes aainst !etitioner Ban; and individ"al mem#ers of the Board of Directors
thereof& After learnin of the Glin of the com!laint= !etitioner Ban; terminated the services of
res!ondent Sadac& :inally= on )+ A""st )(3(= Sadac was removed from his oIce
La#or Ar#iter rendered decision that Sadac<s termination was illeal and entitled to
reinstatement and !ayment of f"ll #ac; waes& NLRC aIrmed the decision "!on a!!eal #y the
Ban;& Sadac Gled for eAec"tion of E"dment where it ave its com!"tation which amo"nted to '
0&+* M re!resentin his #ac; waes and the increases he sho"ld have received d"rin the time
he was illeally dismissed& The Ban; o!!osed to Sadac<s com!"tation& The La#or Ar#iter favor
Sadac<s com!"tation& NLRC= "!on a!!eal #y the #an;= reversed the decision& CA reversed the
decision of NLRC& ?ence= this !etition&
1SSU4$
>hether or not the com!"tation of #ac; waes shall incl"de the eneral increases&
RUL1NG$
To resolve the iss"e= the co"rt revisits its !rono"ncements on the inter!retation of the term
#ac;waes& Bac;waes in eneral are ranted on ro"nds of eD"ity for earnins which a wor;er
or em!loyee has lost d"e to his illeal dismissal& 1t is not !rivate com!ensation or damaes #"t is
awarded in f"rtherance and eHect"ation of the !"#lic o#Eective of the La#or Code& Nor is it a
redress of a !rivate riht #"t rather in the nat"re of a command to the em!loyer to ma;e !"#lic
re!aration for dismissin an em!loyee either d"e to the former<s "nlawf"l act or #ad faith&
1n the case of B"stamante v& National La#or Relations Commission= 1t said that the Co"rt deems it
a!!ro!riate to reconsider s"ch earlier r"lin on the com!"tation of #ac; waes #y now holdin
that conforma#ly with the evident leislative intent as eA!ressed in Re!& Act No& 0,)6= #ac;
waes to #e awarded to an illeally dismissed em!loyee= sho"ld not= as a eneral r"le= #e
diminished or red"ced #y the earnins derived #y him elsewhere d"rin the !eriod of his illeal
dismissal& The "nderlyin reason for this r"lin is that the em!loyee= while litiatin the leality
-illeality. of his dismissal= m"st still earn a livin to s"!!ort himself and family= while f"ll
#ac;waes have to #e !aid #y the em!loyer as !art of the !rice or !enalty he has to !ay for
illeally dismissin his em!loyee& The clear leislative intent of the amendment in Re!& Act No&
0,)6 is to ive more #eneGts to wor;ers than was !revio"sly iven them& Th"s= a closer
adherence to the leislative !olicy #ehind Re!& Act No& 0,)6 !oints to Lf"ll #ac;waesL as
meanin eAactly that= i&e&= witho"t ded"ctin from #ac;waes the earnins derived elsewhere #y
the concerned em!loyee d"rin the !eriod of his illeal dismissal&
There is no vested riht to salary increases& Sadac may have received salary increases in the
!ast only !roves fact of recei!t #"t does not esta#lish a deree of ass"redness that is inherent in
#ac;waes& The concl"sion is that Sadac<s com!"tation of his f"ll #ac;waes which incl"des his
!ros!ective salary increases cannot #e !ermitted&
S.I.P (oo! 5ouse vs. Ba"olina
GR No& )(52,*M Octo#er ))= 5+)+
:ACTS$
The GS1S M"lti8'"r!ose Coo!erative -GM'C. is an entity orani7ed #y the em!loyees of the
Government Service 1ns"rance System -GS1S.& 1ncidental to its !"r!ose= GM'C wanted to
o!erate a canteen in the new GS1S B"ildin= #"t had no ca!a#ility and eA!ertise in this
area& Th"s= it enaed the services of the !etitioner S&1&'& :ood ?o"se -S1'.= owned #y the
s!o"ses AleEandro and 4sther 'a#lo= as concessionaire& The res!ondents Restit"to Batolina and
nine -(. others -the res!ondents. wor;ed as waiters and waitresses in the canteen
1n :e#r"ary 5++2= GM'C terminated S1'<s Pcontract as GM'C concessionaire=Q #eca"se of GM'C<s
decision Pto ta;e direct investment in and manaement of the GM'C canteenMQ S1'<s contin"ed
ref"sal to heed GM'C<s directives for service im!rovementM and the alleed interference of the
'a#los< two sons with the o!eration of the canteen& The termination of the concession contract
ca"sed the termination of the res!ondents< em!loyment= !rom!tin them to Gle a com!laint for
illeal dismissal= with money claims= aainst S1' and the s!o"ses 'a#lo&
The em!loyer of the res!ondents claimed that it was merely a la#or8only contractor of GM'C&
?ence= it co"ld not #e lia#le&
1SSU4$
>ON there eAist an em!loyer8em!loyee relationshi!
RUL1NG$
>e aIrm the CA r"lin that S1' was the res!ondents< em!loyer& The NLRC decision= which the
CA aIrmed= states$
Res!ondents have #een the concessionaire of GM'C canteen for nine -(. years& D"rin this
!eriod= com!lainants were em!loyed at the said canteen& On :e#r"ary 5(= 5++2= res!ondents<
concession with GM'C was terminated& >hen res!ondents were !revented from enterin the
!remises as a res"lt of the termination of their concession= they sent a !rotest letter dated A!ril
)2= 5++2 to GM'C thr" their co"nsel& 'ertinent !ortion of the letter$
>e write this letter in #ehalf of o"r client Mr& @ Mrs& AleEandro C& 'a#lo= the concessionaires who
"sed to occ"!y andJor rent the area for a cafeteriaJcanteen at the 5nd :loor of
the GS1S B"ildin for the !ast several years&
Last March )5= 5++2= witho"t any co"rt writ or order= and with the aid of yo"r armed aents= yo"
!hysically #arred o"r clients @ their em!loyeesJhel!ers from enterin the said !remises and from
!erformin their "s"al d"ties of servin the food reD"irements of GS1S !ersonnel and
others&
Clearly= no less than res!ondents= thr" their co"nsel= admitted that com!lainants herein were
their em!loyees&
That com!lainants were em!loyees of res!ondents is f"rther #olstered #y the fact that
res!ondents do not deny that they were the ones who !aid com!lainants salary& >hen
com!lainants chared them of "nder!ayment= res!ondents even inter!osed the defense of Gle
-sic. #oard and lodin iven to com!lainants&
The CA r"led o"t S1'<s claim that it was a la#or8only contractor or a mere aent of GM'C& >e
aree with the CAM S1' and its !ro!rietors co"ld not #e considered as mere aents of GM'C
#eca"se they eAercised the essential elements of an em!loyment relationshi! with the
res!ondents s"ch as hirin= !ayment of waes and the !ower of control= not to mention that S1'
o!erated the canteen on its own acco"nt as it !aid a fee for the "se of the #"ildin and for the
!rivilee of r"nnin the canteen& The fact that the res!ondents a!!lied with GM'C in :e#r"ary
5++2 when it terminated its contract with S1'= is another clear indication that the two entities
were se!arate and distinct from each other& >e th"s see no reason to dist"r# the CA<s Gndins&
SLL In"erna"ional Cable Specialis" vs. NLRC
G&R& No& ),5)0)M March 5= 5+))
:ACTS$
Sometime in )((0= and %an"ary )((,= !rivate res!ondents Roldan Lo!e7 -Lo!e7 for #revity. and
Danilo CaFete -CaFete for #revity.= and 4dardo R"Fia -R"Fia for #revity. res!ectively= were
hired #y !etitioner Laon as a!!rentice or trainee ca#leJlineman& The three were !aid the f"ll
minim"m wae and other #eneGts #"t since they were only trainees= they did not re!ort for wor;
re"larly #"t came in as s"#stit"tes to the re"lar wor;ers or in "nderta;ins that needed eAtra
wor;ers to eA!edite com!letion of wor;& After their trainin= R"Fia= CaFete and Lo!e7 were
enaed as !roEect em!loyees #y the !etitioners in their 1slacom !roEect in Bohol& 'rivate
res!ondents started on March )6= )((, "ntil Decem#er )((,& U!on the com!letion of their
!roEect= their em!loyment was also terminated& 'rivate res!ondents received the amo"nt of
')26&++= the minim"m !rescri#ed daily wae for Reion 911& 1n %"ly )((,= the amo"nt of ')26
was increased to ')6+&++ #y the Reional >ae Board -R>B. and in Octo#er of the same year=
the latter was increased to ')66&++& Sometime in March )((3= R"Fia and CaFete were enaed
aain #y Laon as !roEect em!loyees for its 'LDT Anti!olo= Ri7al !roEect= which ended sometime
in -sic. the late Se!tem#er )((3& As a conseD"ence= R"Fia and CaFete em!loyment was
terminated& :or this !roEect= R"Fia and CaFete received only the wae of ')26&++ daily& The
minim"m !rescri#ed wae for Ri7al at that time was ')0+&++&
Sometime in late Novem#er )((3= !rivate res!ondents re8a!!lied in the Racitelcom !roEect of
Laon in B"lacan& R"Fia and CaFete were re8em!loyed& Lo!e7 was also hired for the said
s!eciGc !roEect& :or this= !rivate res!ondents received the wae of ')26&++& Aain= after the
com!letion of their !roEect in March )(((= !rivate res!ondents went home to Ce#" City&
On May 5)= )(((= !rivate res!ondents for the 2th time wor;ed with LaonNs !roEect in Camarin=
Caloocan City with :"r";awa Cor!oration as the eneral contractor& Their contract wo"ld eA!ire
on :e#r"ary 53= 5+++= the !eriod of com!letion of the !roEect& :rom May 5)= )((,8Decem#er
)(((= !rivate res!ondents received the wae of ')26&++& At this time= the minim"m !rescri#ed
rate for Manila was ')(3&++& 1n %an"ary to :e#r"ary 53= the three received the wae of ')06&++&
The eAistin rate at that time was '5)*&++&
:or reasons of delay on the delivery of im!orted materials from :"r";awa Cor!oration= the
Camarin !roEect was not com!leted on the sched"led date of com!letion& :aceVdW with economic
!ro#lemVsW= Laon was constrained to c"t down the overtime wor; of its wor;erVsWV=W incl"din
!rivate res!ondents& Th"s= when reD"ested #y !rivate res!ondents on :e#r"ary 53= 5+++ to wor;
overtime= Laon ref"sed and told !rivate res!ondents that if they insist= they wo"ld have to o
home at their own eA!ense and that they wo"ld not #e iven anymore time nor allowed to stay
in the D"arters& This !rom!ted !rivate res!ondents to leave their wor; and went home to Ce#"&
On March *= 5+++= !rivate res!ondents Gled a com!laint for illeal dismissal= non8!ayment of
waes= holiday !ay= )*th month !ay for )((, and )((3 and service incentive leave !ay as well
as damaes and attorneyNs fees&
1n their answers= !etitioners admit em!loyment of !rivate res!ondents #"t claimed that the
latter were only !roEect em!loyeesV=W for their services were merely enaed for a s!eciGc !roEect
or "nderta;in and the same were covered #y contracts d"ly sined #y !rivate res!ondents&
'etitioners f"rther alleed that the food allowance of '0*&++ !er day as well as !rivate
res!ondents allowance for lodin ho"se= trans!ortation= electricity= water and snac;s allowance
sho"ld #e added to their #asic !ay& >ith these= !etitioners claimed that !rivate res!ondents
received hiher wae rate than that !rescri#ed in Ri7al and Manila&
Lastly= !etitioners alleed that since the wor;!laces of !rivate res!ondents were all in Manila=
the com!laint sho"ld #e Gled there& Th"s= !etitioners !rayed for the dismissal of the com!laint
for lac; of E"risdiction and "tter lac; of merit&
LA r"led that the res!ondents were re"lar em!loyees and were "nder!aid& ?owever= the LA
fo"nd that !etitioners were not lia#le for illeal dismissal& The LA viewed !rivate res!ondentsN act
of oin home as an act of indiHerence when !etitioners decided to !rohi#it overtime wor;&
These decisions of the LA were aIrmed #y the NLRC= and s"#seD"ently #y the CA= on a!!eal&
?ence= this !etition&
1SSU4$
>ON res!ondents were "nder!aid
>ON the allowances sho"ld #e added to their #asic !ay
RUL1NG$
The !etition is #ereft of merit&
As a eneral r"le= on !ayment of waes= a !arty who allees !ayment as a defense has the
#"rden of !rovin it& AAA
Moreover= #efore the val"e of facilities can #e ded"cted from the em!loyeesN waes= the
followin reD"isites m"st all #e attendant$ Grst= !roof m"st #e shown that s"ch facilities are
c"stomarily f"rnished #y the tradeM second= the !rovision of ded"cti#le facilities m"st #e
vol"ntarily acce!ted in writin #y the em!loyeeM and Gnally= facilities m"st #e chared at
reasona#le val"e& Mere availment is not s"Icient to allow ded"ctions from em!loyeesN waes&
These reD"irements= however= have not #een met in this case& SLL failed to !resent any
com!any !olicy or "ideline showin that !rovisions for meals and lodin were !art of the
em!loyeeNs salaries& 1t also failed to !rovide !roof of the em!loyeesN written a"thori7ation= m"ch
less show how they arrived at their val"ations& At any rate= it is not even clear whether !rivate
res!ondents act"ally enEoyed said facilities&
LS"!!lements=L therefore= constit"te eAtra rem"neration or s!ecial !rivilees or #eneGts iven to
or received #y the la#orers over and a#ove their ordinary earnins or waes& L:acilities=L on the
other hand= are items of eA!ense necessary for the la#orerNs and his familyNs eAistence and
s"#sistence so that #y eA!ress !rovision of law -Sec& 5VW.= they form !art of the wae and when
f"rnished #y the em!loyer are ded"cti#le therefrom= since if they are not so f"rnished= the
la#orer wo"ld s!end and !ay for them E"st the same&
>hile the eneral r"le is that any decision rendered witho"t E"risdiction is a total n"llity and may
#e str"c; down at any time= the !arty that asserts it m"st #e in ood faith and not evidently
availin thereof sim!ly to thwart the eAec"tion of an award that has lon #ecome Gnal and
eAec"tory&
'ergara, 1r. vs. Coca%Cola Bo""lers Phils Inc.
G.R. No. >-?@0A, April >, ./>B
:ACT$
'etitioner Ricardo 4& 9erara= %r& was an em!loyee of res!ondent Coca8Cola Bottlers
'hili!!ines= 1nc& from May )(03 "ntil he re"ire! on 1anuar B>, .//. as a &is"ric" Sales
Supervisor 3&SS4 for Las 'iFas City= Metro Manila&
As sti!"lated in res!ondentNs eAistin Retirement 'lan R"les and Re"lations at the time=
the Ann"al 'erformance 1ncentive 'ay of RSMs= DSSs= and SSSs shall #e considered in the
com!"tation of retirement #eneGts= as follows$ Basic Mon"hl Salar C Mon"hl Average
Perfor#ance Incen"ive 3which is "he "o"al perfor#ance incen"ive earne! !uring "he
ear i##e!ia"el prece!ing >. #on"hs4 No. of 7ears in Service.
Clai#ing his en"i"le#en" "o an a!!i"ional PhPD-D,?//.// as Sales Manage#en"
Incen"ives 3SMI4 an! "o "he a#oun" of PhPD@?,/>?.?- which respon!en" allege!l
!e!uc"e! illegall= re!resentin the "n!aid acco"nts of two dealers within his E"risdiction=
!etitioner Gled a com!laint #efore the NLRC on %"ne ))= 5++5 for the !ayment of his L:"ll
Retirement BeneGts= Merit 1ncrease= CommissionJ1ncentives= Lenth of Service= Act"al= Moral and
4Aem!lary Damaes= and AttorneyNs :ees&L
3A!!arently= 'etitioner ar"ed that the rantin of SM1 to all retired DSSs reardless of
whether or not they D"alify to the same had ri!ened into com!any !ractice& The only two !ieces
of evidence that he st"##ornly !resented thro"ho"t the entirety of this case are the sworn
statements of Renato C& ?idalo -?idalo. and Ramon 9& 9ela7D"e7 -9elasD"e7.= former DSSs of
res!ondent who retired in 5+++ and )((3= res!ectively& They claimed that the SM1 was incl"ded
in their retirement !ac;ae even if they did not meet the sales and collection D"aliGers&
Therefore= the fail"re of em!loyer to rant him his SM1 is a violation on the !rinci!le of non8
dimin"tion of #eneGts&4
ISS<EE
>ON the rantin of SM1 to all retired DSSs reardless of whether or not they D"alify to the same
had ri!ened into com!any !ractice
R<LINGE
Generally= em!loyees have a vested riht over eAistin #eneGts vol"ntarily ranted to
them #y their em!loyer& Th"s= any #eneGt and s"!!lement #ein enEoyed #y the em!loyees
cannot #e red"ced= diminished= discontin"ed or eliminated #y the em!loyer& The !rinci!le of non8
dimin"tion of #eneGts is act"ally fo"nded on the Constit"tional mandate to !rotect the rihts of
wor;ers= to !romote their welfare= and to aHord them f"ll !rotection& 1n t"rn= said mandate is the
#asis of Article 2 of the La#or Code which states that Lall do"#ts in the im!lementation and
inter!retation of this Code= incl"din its im!lementin r"les and re"lations= shall #e rendered in
favor of la#or&L chanro#lesvirt"alawli#rary
)here is !i#inu"ion of beneF"s when "he following re=uisi"es are presen"E
-). the rant or #eneGt is fo"nded on a !olicy or has ri!ened into a !ractice over a lon
!eriod of timeM
-5. the !ractice is consistent and deli#erateM
-*. the !ractice is not d"e to error in the constr"ction or a!!lication of a do"#tf"l or
diIc"lt D"estion of lawM and
-2. the dimin"tion or discontin"ance is done "nilaterally #y the em!loyer&t"alawli#rary
To #e considered as a re"lar com!any !ractice= the em!loyee m"st !rove #y s"#stantial
evidence that the ivin of the #eneGt is done over a lon !eriod of time= and that it has #een
made consistently and deli#erately& %"ris!r"dence has not laid down any hard8and8fast r"le as to
the lenth of time that com!any !ractice sho"ld have #een eAercised in order to constit"te
vol"ntary em!loyer !ractice& The common denominator in !revio"sly decided cases a!!ears to
#e the re"larity and deli#erateness of the rant of #eneGts over a siniGcant !eriod of time& 1t
reD"ires an ind"#ita#le showin that the em!loyer areed to contin"e ivin the #eneGt ;nowin
f"lly well that the em!loyees are not covered #y any !rovision of the law or areement reD"irin
!ayment thereof& 1n s"m= the #eneGt m"st #e characteri7ed #y re"larity= vol"ntary and
deli#erate intent of the em!loyer to rant the #eneGt over a considera#le !eriod of
time&#lesvirt"alawli#rary
<pon review of "he en"ire case recor!s, 2e Fn! no subs"an"ial evi!ence "o
prove "ha" "he gran" of SMI "o all re"ire! &SSs regar!less of whe"her or no" "he
=ualif "o "he sa#e ha! ripene! in"o co#pan prac"ice.
The rantin of the SM1 in the retirement !ac;ae of 9ela7D"e7 was an isolated incident
and co"ld hardly #e classiGed as a com!any !ractice that may #e considered an enforcea#le
o#liation& )o repea", "he principle agains" !i#inu"ion of beneF"s is applicable onl if
"he gran" or beneF" is foun!e! on an e9press polic or has ripene! in"o a prac"ice
over a long perio! of "i#e which is consis"en" an! !elibera"eG i" presupposes "ha" a
co#pan prac"ice, polic an! "ra!i"ion favorable "o "he e#ploees has been clearl
es"ablishe!G an! "ha" "he pa#en"s #a!e b "he co#pan pursuan" "o i" have ripene!
in"o beneF"s enHoe! b "he#. Certainly= a !ractice or c"stom is= as a eneral r"le= not a
so"rce of a leally demanda#le or enforcea#le riht& Com!any !ractice= E"st li;e any other fact=
ha#its= c"stoms= "sae or !atterns of cond"ct= m"st #e !roven #y the oHerin !arty who m"st
allee and esta#lish s!eciGc= re!etitive cond"ct that miht constit"te evidence of ha#it or
com!any !ractice&
Roal Plan" 2or*ers <nion vs. Coca%Cola Bo""lers Philippines Inc.
:ACTS$
Under the em!loy of each #ottlin !lant of Coca8Cola are #ottlin o!erators& 1n the case of the
!lant in Ce#" City= there are 5+ #ottlin o!erators who wor; for its Bottlin Line ) while there are
)58)2 #ottlin o!erators who man its Bottlin Line 5& All of them are male and they are mem#ers
of herein res!ondent Royal 'lant >or;ers Union -RO'>U.&
1n )(,2= the #ottlin o!erators of then Bottlin Line 5 were !rovided with chairs "!on their
reD"est& 1n )(33= the #ottlin o!erators of then Bottlin Line ) followed s"it and as;ed to #e
!rovided also with chairs& Their reD"est was li;ewise ranted& Sometime in Se!tem#er 5++3= the
chairs !rovided for the o!erators were removed !"rs"ant to a national directive of !etitioner&
This directive is in line with the L1 O!erate= 1 Maintain= 1 CleanL !roram of !etitioner for #ottlin
o!erators= wherein every #ottlin o!erator is iven the res!onsi#ility to ;ee! the machinery and
eD"i!ment assined to him clean and safe& The !roram reinforces the tas; of #ottlin o!erators
to constantly move a#o"t in the !erformance of their d"ties and res!onsi#ilities&
>ith this tas; of movin constantly to chec; on the machinery and eD"i!ment assined to him= a
#ottlin o!erator does not need a chair anymore= hence= !etitioner<s directive to remove them&
:"rthermore= CCB'1 rationali7ed that the removal of the chairs is im!lemented so that the
#ottlin o!erators will avoid slee!in= th"s= !revent inE"ries to their !ersons& As #ottlin
o!erators are wor;in with machines which consist of movin !arts= it is im!erative that they
sho"ld not fall aslee! as to do so wo"ld eA!ose them to ha7ards and inE"ries& 1n addition=
slee!in will ham!er the eIcient Tow of o!erations as the #ottlin o!erators wo"ld #e "na#le to
!erform their d"ties com!etently&
1SSU4$ >hether or not the removal of the #ottlin o!erators< chairs was a valid eAercise of
manaement !reroative& 888B4S
?4LD$ Accordin to the Union= s"ch removal constit"tes a violation of the ). Occ"!ational
?ealth and Safety Standards which !rovide that every wor;er is entitled to #e !rovided #y the
em!loyer with a!!ro!riate seats= amon othersM 5. !olicy of the State to ass"re the riht of
wor;ers to a E"st and h"mane condition of wor; as !rovided for in Article * of the La#or CodeM3 *.
Glo#al >or;!lace Rihts 'olicy of CCB'1 which !rovides for a safe and healthy wor;!lace #y
maintainin a !rod"ctive wor;!lace and #y minimi7in the ris; of accident= inE"ry and eA!os"re
to health ris;sM and 2. dimin"tion of #eneGts !rovided in Article )++ of the La#or Code&
The Co"rt has held that manaement is free to re"late= accordin to its own discretion and
E"dment= all as!ects of em!loyment= incl"din hirin= wor; assinments= wor;in methods=
time= !lace= and manner of wor;= !rocesses to #e followed= s"!ervision of wor;ers= wor;in
re"lations= transfer of em!loyees= wor; s"!ervision= lay8oH of wor;ers= and disci!line= dismissal
and recall of wor;ers& The eAercise of manaement !reroative= however= is not a#sol"te as it
m"st #e eAercised in ood faith and with d"e reard to the rihts of la#or&)+
1n the !resent controversy= it cannot #e denied that CCB'1 removed the o!erators< chairs
!"rs"ant to a national directive and in line with its L1 O!erate= 1 Maintain= 1 CleanL !roram=
la"nched to ena#le the Union to !erform their d"ties and res!onsi#ilities more eIciently& The
chairs were not removed indiscriminately& They were caref"lly st"died with d"e reard to the
welfare of the mem#ers of the Union& The removal of the chairs was com!ensated #y$ a. a
red"ction of the o!eratin ho"rs of the #ottlin o!erators from a two8and8one8half -5 \.8ho"r
rotation !eriod to a one8and8a8half -) \. ho"r rotation !eriodM and #. an increase of the #rea;
!eriod from )6 to *+ min"tes #etween rotations&
A!!arently= the decision to remove the chairs was done with ood intentions as CCB'1 wanted to
avoid instances of o!erators slee!in on the Eo# while in the !erformance of their d"ties and
res!onsi#ilities and #eca"se of the fact that the chairs were not necessary considerin that the
o!erators constantly move a#o"t while wor;in& 1n short= the removal of the chairs was desined
to increase wor; eIciency& ?ence= CCB'1<s eAercise of its manaement !reroative was made in
ood faith witho"t doin any harm to the wor;ers< rihts&
The rihts of the Union "nder any la#or law were not violated& There is no law that reD"ires
em!loyers to !rovide chairs for #ottlin o!erators& There was no violation either of the ?ealth=
Safety and Social >elfare BeneGt !rovisions "nder Boo; 19 of the La#or Code of the 'hili!!ines&
As shown in the foreoin= the removal of the chairs was com!ensated #y the red"ction of the
wor;in ho"rs and increase in the rest !eriod& The directive did not eA!ose the #ottlin o!erators
to safety and health ha7ards&
The Union sho"ld not com!lain too m"ch a#o"t standin and movin a#o"t for one and one8half
-) \. ho"rs #eca"se st"dies show that sittin in wor;!laces for a lon time is ha7ardo"s to one<s
health& The CBA #etween the Union and CCB'1 contains no !rovision whatsoever reD"irin the
manaement to !rovide chairs for the o!erators in the !rod"ctionJman"fact"rin line while
!erformin their d"ties and res!onsi#ilities&
The Co"rt com!letely arees with the CA r"lin that the removal of the chairs did not violate the
eneral !rinci!les of E"stice and fair !lay #eca"se the #ottlin o!erators< wor;in time was
considera#ly red"ced from two and a half -5 \. ho"rs to E"st one and a half -) \. ho"rs and the
#rea; !eriod= when they co"ld sit down= was increased to *+ min"tes #etween rotations& The
#ottlin o!erators< new wor; sched"le is certainly advantaeo"s to them #eca"se it reatly
increases their rest !eriod and siniGcantly decreases their wor;in time& A #rea; time of thirty
-*+. min"tes after wor;in for only one and a half -) \. ho"rs is a E"st and fair wor; sched"le&
The o!erators< chairs cannot #e considered as one of the em!loyee #eneGts covered in Article
)++)0 of the La#or Code& 1n the Co"rt<s view= the term L#eneGtsL mentioned in the non8
dimin"tion r"le refers to monetary #eneGts or !rivilees iven to the em!loyee with monetary
eD"ivalents&
S"ch #eneGts or !rivilees form !art of the em!loyees< wae= salary or com!ensation ma;in
them enforcea#le o#liations&
This Co"rt has already decided several cases reardin the non8dimin"tion r"le where the
#eneGts or !rivilees involved in those cases mainly concern monetary considerations or
!rivilees with monetary eD"ivalents& >itho"t a do"#t= eD"atin the !rovision of chairs to the
#ottlin o!erators is somethin within the am#it of L#eneGtsNN in the conteAt of Article )++ of the
La#or Code is "nd"ly stretchin the coverae of the law& The inter!retations of Article )++ of the
La#or Code do not show even with the slihtest hint that s"ch !rovision of chairs for the #ottlin
o!erators may #e sheltered "nder its mantle&
N2PC vs. Alliance of Progressive Labor G.R. No. >A/B.?, March >., ./>D
(ac"sE
On %"ne (= )(3(= Re!"#lic Act No& 0,5, was enacted into law& 1n order to rationali7e waes
thro"ho"t the 'hili!!ines= Re!"#lic Act No& 0,5, created the N>'C and the RT>'Bs of the
diHerent reions&
Article )5) of the Labor Code= as amended #y Section * of Re!"#lic Act No& 0,5,= em!owered
the N>'C to form"late !olicies and "idelines on waes= incomes and !rod"ctivity im!rovement
at the enter!rise= ind"stry and national levelsM to !rescri#e r"les and "idelines for the
determination of a!!ro!riate minim"m wae and !rod"ctivity meas"res at the reional=
!rovincial or ind"stry levelsM and to review reional wae levels set #y the RT>'Bs to determine
whether the levels were in accordance with the !rescri#ed "idelines and national develo!ment
!lans= amon others&
On the other hand= Article )55-#. of the Labor Code= also amended #y Section * of Re!"#lic Act
No& 0,5,= tas;ed the RT>'Bs to determine and GA minim"m wae rates a!!lica#le in their
reion= !rovinces or ind"stries thereinM and to iss"e the corres!ondin wae orders= s"#Eect to
the "idelines iss"ed #y the N>'C&
ConseD"ently= the RT>'BSNCR iss"ed >ae Order No& NCRS+, on Octo#er )2= )((( im!osin an
increase of '56&6+Jday on the waes of all !rivate sector wor;ers and em!loyees in the NCR and
!ein the minim"m wae rate in the NCR at '55*&6+Jday&
0
?owever= Section 5 and Section ( of
>ae Order No& NCRS+, e9e#p"e! cer"ain sec"ors an! in!us"ries fro# i"s coverage
Section 5& The adE"stment in this Order does not cover the followin$
A& V>Wor;ers in the followin sectors which were ranted corres!ondin wae
increases on %an"ary )= )((( as !rescri#ed #y >ae Order No& NCRS+0$
a&)& Aric"lt"re wor;ers
S'lantation ')5&++
SNonS!lantation ')3&6+

a&5& CottaeJhandicraft ind"stry ')0&++

a&*& 'rivate hos!itals with #ed
ca!acity of )++ or less
')5&++

a&2& RetailJService esta#lishments

S4m!loyin ))S)6
wor;ers
')5&++

S4m!loyin not more
than )+ wor;ers
')(&++
B& >or;ers in small esta#lishments em!loyin less that ten -)+. wor;ers&
A A A A
Section (& U!on a!!lication with and as determined #y the Board= #ased on
doc"mentation and other reD"irements in accordance with a!!lica#le r"les and
re"lations iss"ed #y the Commission= the followin may #e eAem!t from the
a!!lica#ility of this Order$
)& Distressed esta#lishments as deGned in the N'>C G"idelines No& +)= series of )((0M
5& 4A!orters incl"din indirect eA!orters with at least 6+X eA!ort sales and with
forward contracts with their forein #"yersJ!rinci!als entered into on or twelve -)5.
months #efore the date of !"#lication of this Order may #e eAem!t d"rin the
lifetime of said contract #"t not to eAceed twelve -)5. months from the eHectivity of
this Order&
:eelin arieved #y their nonScoverae #y the wae adE"stment= the Alliance of 'roressive
La#or -A'L. and the T"nay na Na;a;aisan Manaawa sa Royal -TNMR. Gled an a!!eal with
the N>'C assailin Section 5-A. and Section (-5. of >ae Order No& NCRS+,& They contended
that neither the N>'C nor the RT>'BSNCR had the a"thority to eA!and the nonScoverae and
eAem!ti#le cateories "nder the wae orderM hence= the assailed sections of the wae order
sho"ld #e voided&
The N>'C "!held the validity of Section 5-A. and Section (-5. of >ae Order No& NCRS+,& 1t
o#served that the RT>'B<s !ower to determine eAem!ti#le cateories was a!Hunc" "o i"s wage
F9ing func"ion conferre! b Ar"icle >..3e4 of "he Labor Code= as amended #y Re!"#lic Act
No& 0,5,M that s"ch a"thority of the RT>'B was also recogni$e! in N2PC Gui!elines No& +)=
Series of )((0&
The A'L and TNMR assailed the decisions of the N>'C on certiorari in the CA= contendin that
the !ower of the RT>'BSNCR to determine eAem!ti#le cateories was not an adE"nct to its wae
GAin f"nction& CA favore! "he respon!en"s an! gran"e! "he pe"i"ion for certiorari.
?ence= this a!!eal #y !etition for review on certiorari #y the N>'C and RT>'BSNCR&
IssueE >hether or not the RT>'BSNCR had
RulingE the RT>'BSNCR had the a"thority to !rovide additional eAem!tions from the minim"m
wae adE"stments em#odied in >ae Order No& NCRS+,
The N>'C !rom"lated N>'C G"idelines No& ++)S(6 -Revised Rules of Procedure on Minimum
Wage Fixing. to overn the !roceedins in the N>'C and the RT>'Bs in the GAin of minim"m
wae rates #y reion= !rovince and ind"stry& Section ) of R"le 9111 of N>'C G"idelines No& ++)S
(6 reconi7ed the !ower of the RT>'Bs to iss"e eAem!tions from the a!!lication of the wae
orders s"#Eect to the "idelines iss"ed #y the N>'C
(this is the rationale behind exemption)
S4CT1ON 5& CAT4GOR14S O: 4]4M'T1BL4 4STABL1S?M4NTS
4Aem!tion of esta#lishments from com!liance with the wae increases and cost of livin
allowances !rescri#ed #y the Boards may #e ranted in order to -). assist esta#lishments
eA!eriencin tem!orary diIc"lties d"e to losses maintain the Gnancial via#ility of their
#"sinesses and contin"ed em!loyment of their wor;ersM -5. enco"rae the esta#lishment of new
#"sinesses and the creation of more Eo#s= !artic"larly in areas o"tside the National Ca!ital
Reion and 4A!ort 'rocessin Rones= in line with the !olicy on ind"stry dis!ersalM and -*. ease
the #"rden of micro esta#lishments= !artic"larly in the retail and service sector= that have a
limited ca!acity to !ay&
The followin cateories of esta#lishments may #e eAem!ted "!on a!!lication with and as
determined #y the Board$
)& Distressed esta#lishments
5& New #"siness enter!rises -NB4s.
*& RetailJService esta#lishments em!loyin not more than ten -)+. wor;ers
2& 4sta#lishments adversely aHected #y nat"ral calamities
Under the "idelines= the RT>'Bs co"ld iss"e eAem!tions from the a!!lication of the wae
orders as lon as the eAem!tions com!lied with the r"les of the N>'C& 1n its r"les= the N>'C
en"merated fo"r eAem!ti#le esta#lishments= bu" "he lis" was no" e9clusive& The RT>'Bs had
the a"thority to incl"de in the wae orders esta#lishments that #eloned to= or to eAcl"de from
the fo"r en"merated eAem!ti#le cateories&
1f the eAem!tion was o"tside of the fo"r eAem!ti#le cateories= li;e here= the eAem!ti#le
cateory sho"ld #e$ -). in accord with the rationale for eAem!tionM -5. reviewedJa!!roved #y the
N>'CM and -*. "!on review= the RT>'B iss"in the wae order m"st s"#mit a stron and
E"stiGa#le reason or reasons for the incl"sion of s"ch cateory& I" is "he co#pliance wi"h "he
secon! re=uisi"e "ha" is a" issue here.
The N>'C= in arrivin at its decision= weihed the ar"ments of the !arties and r"led that the
RT>'BSNCR had s"#stantial and E"stiGa#le reasons in eAem!tin the sectors and esta#lishments
en"merated in Section 5-A. and Section (-5. #ased on the !"#lic hearins and cons"ltations=
meetins= socialSeconomic data and informations athered !rior to the iss"ance of >ae Order
No& NCRS+,& )he ver fac" "ha" "he vali!i" of "he assaile! sec"ions of 2age 6r!er No.
NCRI/- ha! been alrea! passe! upon an! uphel! b "he N2PC #ean" "ha" "he N2PC
ha! alrea! given "he wage or!er i"s necessar legal i#pri#a"ur. Accor!ingl, "he
re=uisi"e approval or review was co#plie! wi"h&
The RT>'Bs are the thin;in ro"! of men and women "ided #y stat"tory standards and #o"nd
#y the r"les and "idelines !rescri#ed #y the N>'C& 1n the nat"re of their f"nctions= the RT>'Bs
investiate and st"dy all the !ertinent facts to ascertain the conditions in their res!ective
reions& ?ence= they are loically vested with the com!etence to determine the a!!lica#le
minim"m waes to #e im!osed as well as the ind"stries and sectors to eAem!t from the
coverae of their wae orders&
Lastly= >ae Order No& NCRS+, is !res"med to #e re"larly iss"ed in the a#sence of any stron
showin of rave a#"se of discretion on the !art of RT>'BSNCR& The !res"m!tion of validity is
made stroner #y the fact that its validity was "!held #y the N>'C "!on review&
2AGE EN(6RCEMEN) AN& REC6'ER7
RaHah 5u#abon 5o"el vs. )raHano
G&R& Nos& )++55585* Se!tem#er )2= )((*
:ACTS$
:or redress in reard to "nder!aid waes and non8!ayment of #eneGts= the herein res!ondent8
em!loyees t"rned to the reional director of the De!artment of La#or and 4m!loyment& The
E"risdictional com!etence of s"ch oIcial is= however= dis!"ted and challened #y the em!loyers
in the instant !etition who contend that it is the la#or ar#iter who may !ro!erly entertain the
rievance& The areate claims of each of the twenty8Gve em!loyees of !etitioner are a#ove
the amo"nt of '6=+++&++ GAed #y Re!"#lic Act No& 0,)6&
1SSU4$
>ho #etween the Reional Director of the De!artment of La#or and 4m!loyment and the La#or
Ar#iter has E"risdiction over the com!laint of !rivate res!ondents&
RUL1NG$
The La#or Ar#iter has eAcl"sive E"risdiction over the com!laint of !rivate res!ondents which
involves a money claim eAceedin '6=+++&
The !rinci!le of contin"o"s E"risdiction of the reional director= as a!!lied #y the Secretary of
La#or to the s"it Gled #y herein !rivate res!ondents on March )2= )(3( !rior to the eHectivity of
Re!"#lic Act No& 0,)6= is therefore incorrect& To s"stain otherwise wo"ld sanction a sit"ation
where all em!loyeesN claims= reardless of amo"nt= can #e heard and determined #y the
Secretary of La#or "nder his visitorial !ower& This does not= however= a!!ear to #e the leislative
intent& The Secretary of La#or sho"ld #e held as !ossessed of his !lenary visitorial !owers to
order the ins!ection of all esta#lishments where la#or is em!loyed= to loo; into all !ossi#le
violations of la#or laws and re"lations #"t the !ower to hear and decide em!loyeesN claims
eAceedin '6=+++&++ for each em!loyee sho"ld #e left to the La#or Ar#iter as the eAcl"sive
re!ository of the !ower to hear and decide s"ch claims&
Reional directors "nder Re!"#lic Act No& 0,)6= can try money claims only if the followin
reD"isites conc"r$
The claim is !resented #y an em!loyee or !erson em!loyed in domestic or ho"sehold service= or
ho"sehel!er "nder the codeM
the claimant= no loner #ein em!loyed= does not see; reinstatementM and=
The areate money claim of the em!loyee or ho"se;ee!er does not eAceed Gve tho"sand
!esos -'6=+++&++.&
Guico vs. Secre"ar of Labor
G&R& No& )*),6+M Novem#er )0= )((3
:ACTS$
The Secretary of La#or received a letter8com!laint reD"estin for an investiation of !etitionerNs
esta#lishment= Co!ylandia Services @ Tradin= for violation of la#or standards laws& '"rs"ant to
the visitorial and enforcement !owers of the Secretary of La#or and 4m!loyment or his d"ly
a"thori7ed re!resentative "nder Article )53 of the La#or Code= as amended= ins!ections were
cond"cted at Co!ylandiaNs o"tlets& The ins!ections yielded the followin violations involvin
twenty8one -5). em!loyees who are co!ier o!erators$ -). "nder!ayment of waesM -5.
"nder!ayment of )*th month !ayM and -*. no service incentive leave with !ay& Th"s= the
Secretary of La#or ordered !etitioner to !ay the res!ondents& 'etitioner D"estioned the
E"risdiction of the Reional Director 0,)6& ?e ar"ed that the Reional Director has no
E"risdiction over the com!laint of the 5) em!loyees since their individ"al monetary claims
eAceed the '6=+++&++ limit& On the other hand= the res!ondent Secretary held that the
E"risdictional limitation im!osed #y Article )5( on his visitorial and enforcement !ower "nder
Article )53 -#. of the La#or Code= as amended= has #een re!ealed #y Re!"#lic Act No& ,,*+& ?e
!ointed o"t that the amendment Lnotwithstandin the !rovisions of Article )5( and 5), of the
La#or Code to the contraryL erased all do"#ts as to the amendatory nat"re of the new law&
1SSU4$
>hether or not the Secretary of La#or has E"risdiction ta;e coni7ance of the instant la#or case&
RUL1NG$
SC r"led in favor of the Secretary of La#or& 1t overr"led its !revio"s r"lin on the matter&
SC s"stained the E"risdiction of the res!ondent Secretary& As the res!ondent correctly !ointed
o"t= this Co"rtNs r"lin in Servando O that the visitorial !ower of the Secretary of La#or to order
and enforce com!liance with la#or standard laws cannot #e eAercised where the individ"al claim
eAceeds '6=+++&++= can no loner #e a!!lied in view of the enactment of R&A& No& ,,*+
amendin Article )53-#. of the La#or Code&
E9%Ba"aan 'e"erans Securi" Agenc vs. Secre"ar of Labor e". al.
G&R& No& )65*(0M %an"ary )2= 5++6
:ACTS$
4A8Bataan 9eterans Sec"rity Aency= 1nc& -4B9SA1. is in the #"siness of !rovidin sec"rity
services while !rivate res!ondents are 4B9SA1Ns em!loyees assined to the National 'ower
Cor!oration at Am#";lao ?ydro 4lectric 'lant= Bo;od= Ben"et -Am#";lao 'lant.& 'rivate
res!ondents led #y AleAander 'ocdin -'ocdin. instit"ted a com!laint for "nder!ayment of
waes aainst 4B9SA1 #efore the Reional OIce of the De!artment of La#or and 4m!loyment
-DOL4.& The money claims eAceeded '6=+++&
1SSU4$
>hether the Secretary of La#or or his d"ly a"thori7ed re!resentatives acD"ired E"risdiction over
4B9SA1
>hether or not the Director of DOL4 has E"risdiction over the la#or dis!"te o money claims
eAceedin '6=+++&
RUL1NG$
Anent the Grst iss"e= 4B9SA1 does not deny havin received the notices of hearin& 4vidence
shows that !etitioners received notices of hearin& The notices of hearin were sent to the
!etitioners< Manila oIce& They were also informed of 4B9SA1Ns violations and were as;ed to
!resent the em!loyment records of the !rivate res!ondents for veriGcation& They were=
moreover= as;ed to s"#mit= within )+ days= !roof of com!liance or their !osition !a!er& The
Reional Director validly acD"ired E"risdiction over 4B9SA1& 4B9SA1 can no loner D"estion the
E"risdiction of the Reional Director after receivin the notices of hearin and after a!!earin
#efore the Reional Director&
Anent the second iss"e= the Reional Director validly ass"med E"risdiction over the money claims
of !rivate res!ondents even if the claims eAceeded '6=+++ #eca"se s"ch E"risdiction was
eAercised in accordance with Article )53-#. of the La#or Code and the case does not fall "nder
the eAce!tion cla"se&
1n order to divest the Reional Director or his re!resentatives of E"risdiction= the followin
elements m"st #e !resent$ -a. that the em!loyer contests the Gndins of the la#or re"lations
oIcer and raises iss"es thereonM -#. that in order to resolve s"ch iss"es= there is a need to
eAamine evidentiary mattersM and -c. that s"ch matters are not veriGa#le in the normal co"rse of
ins!ection& The r"les also !rovide that the em!loyer shall raise s"ch o#Eections d"rin the
hearin of the case or at any time after recei!t of the notice of ins!ection res"lts&
Sapio vs. <n!aloc Cons"ruc"ion e". al.
G&R& No& )66+*2M May 55= 5++3
:ACTS$
The controversy started with a com!laint Gled #y !etitioner aainst Undaloc Constr"ction andJor
4nineer Cirilo Undaloc for illeal dismissal= "nder!ayment of waes and non!ayment of
stat"tory #eneGts& Res!ondent Undaloc Constr"ction= a sinle !ro!rietorshi! owned #y Cirilo
Undaloc= is enaed in road constr"ction #"siness in Ce#" City& 'etitioner avers that he was !aid
a daily salary way #elow the minim"m wae !rovided for #y law& ?is claim of salary diHerential
re!resents the diHerence #etween the daily wae he act"ally received and the stat"tory
minim"m wae&
1SSU4$
>hether or not !etitioner is entitled to salary diHerential after his termination&
RUL1NG$
The total salary diHerential that !etitioner is lawf"lly entitled to amo"nts to '0=6,3&++ ?owever=
!"rs"ant to Section )5 of Re!"#lic Act -R&A&. No& 0,5,= as amended #y R&A& No& 3)33&
Res!ondents are reD"ired to !ay do"#le the amo"nt owed to !etitioner= #rinin their total
lia#ility to ')*=)60&++& The em!loyer concerned shall #e ordered to !ay an amo"nt eD"ivalent to
do"#le the "n!aid #eneGts owin to the em!loyees$ 'rovided= That !ayment of indemnity shall
not a#solve the em!loyer from the criminal lia#ility im!osa#le "nder this Act&
Secre"ar of Labor vs. Pana 'e"erans Securi" an! Inves"iga"ion Agenc
G&R& No& )0,,+3M A""st 55= 5++3
:ACTS$
'etitioners 4dardo M& Aa!ay and Samillano A& Alonso= %r& were hired #y res!ondent 'anay
9eteran<s Sec"rity and 1nvestiation Aency= 1nc& as sec"rity "ards sometime in )(33& They
were stationed at the !lant site of :ood 1nd"stries= 1nc& -:11. in Sta& Rosa= La"na "ntil :11
terminated its contract with res!ondent sec"rity aency on %"ly 0= 5+++& They were not iven
new assinments and their #eneGts -incl"din )*th month !ay= overtime !ay and holiday !ay as
well as wae diHerentials d"e to "nder!ayment of waes. were withheld #y res!ondent sec"rity
aency& This !rom!ted them to Gle a com!laint for violation of la#or standards in the reional
oIce of the De!artment of La#or and 4m!loyment in the National Ca!ital Reion -DOL48NCR.&
Actin on the com!laint= Man"el M& Caya#ya#= a la#or em!loyment oIcer of the DOL48NCR=
cond"cted an ins!ection of res!ondent sec"rity aency on Octo#er *+= 5+++& D"rin the
ins!ection= res!ondent sec"rity aency failed to !resent its !ayroll as well as the daily time
records s"#mitted #y !etitioners Aa!ay and Alonso= %r& S"ch fail"re was noted as a violation&
Res!ondents neither !aid the claims of !etitioners Aa!ay and Alonso= %r& nor D"estioned the
la#or em!loyment oIcer<s Gndins& Th"s= in his May )+= 5++) order= the Reional Director of the
DOL48NCR ado!ted the Gndins and com!"tation of Caya#ya# as to the "n!aid #eneGts d"e to
!etitioners Aa!ay and Alonso= %r& Res!ondents Gled an a!!eal for the red"ction of the s"retyJ
cash #ond&
1SSU4$
>hether or not there has #een a !erfected a!!eal made #y the res!ondents&
>hether or not a motion to red"ce #ond is allowed in a!!eals to the Secretary of La#or&
RUL1NG$
SC held that there has #een no !erfected a!!eal& SC also r"led that red"ction of the #ond is not
allowed in a!!eals #efore the Secretary of La#or&
On the Grst iss"eOR4S'OND4NTS :A1L4D TO '4R:4CT T?41R A''4AL
The r"le is that= to !erfect an a!!eal of the Reional Director<s order involvin a monetary award
in cases which concern the visitorial and enforcement !owers of the Secretary of La#or and
4m!loyment= the a!!eal m"st #e Gled and the cash or s"rety #ond eD"ivalent to the monetary
award m"st #e !osted within ten calendar days from recei!t of the order& :ail"re either to Gle the
a!!eal or !ost the #ond within the !rescri#ed !eriod renders the order Gnal and eAec"tory&
The leislative intent to ma;e the #ond an indis!ensa#le reD"isite for the !erfection of an a!!eal
#y the em!loyer is "nderscored #y the !rovision that Pan a!!eal #y the em!loyer may #e
!erfected only "!on the !ostin of a cash or s"rety #ond&Q The word PonlyQ ma;es it clear that
the lawma;ers intended the !ostin of a cash or s"rety #ond #y the em!loyer to #e the eAcl"sive
means #y which an em!loyer<s a!!eal may #e !erfected&
1n this case= res!ondents admit that they failed to !ost the reD"ired #ond when they Gled their
a!!eal to the Secretary of La#or and 4m!loyment& Beca"se of s"ch fail"re= the a!!eal was never
!erfected and the May )+= 5++) order of the DOL48NCR Reional Director attained Gnality&
On the second iss"eOMOT1ON TO R4DUC4 A''4AL BOND 1S NOT ALLO>4D 1N A''4ALS TO T?4
S4CR4TARB O: LABOR
The E"risdiction of the NLRC is se!arate and distinct from that of the Secretary of La#or and
4m!loyment& 1n the eAercise of their res!ective E"risdictions= each aency is overned #y its own
r"les of !roced"re& 1n other words= the r"les of !roced"re of the NLRC are diHerent from -and do
not a!!ly in. cases coni7a#le #y the Secretary of La#or and 4m!loyment&
Unli;e the New R"les of 'roced"re of the NLRC= no !rovision in the R"les on the Dis!osition of
La#or Standards Cases overns the Glin of a motion for the red"ction of the amo"nt of the
#ond& ?owever= on matters that are not covered #y the R"les on the Dis!osition of La#or
Standards Cases= the s"!!letory a!!lication of the R"les of Co"rt is a"thori7ed& 1n other words=
the R"les on the Dis!osition of La#or Standards Cases do not sanction the s"!!letory resort to
the r"les of !roced"re of the NLRC&
By r"lin that the r"les of !roced"re of the NLRC sho"ld #e a!!lied s"!!letorily to res!ondents<
a!!eal to the Secretary of La#or of 4m!loyment= the CA eHectively amended the R"les on the
Dis!osition of La#or Standards Cases& 1n the !rocess= it encroached on the r"le8ma;in !ower of
the Secretary of La#or and 4m!loyment&
The !ostin of a cash or s"rety #ond to !erfect an a!!eal of an order involvin a monetary award
has a two8fold !"r!ose$ -). to ass"re the em!loyee that= if he Gnally !revails in the case= the
monetary award will #e iven to him "!on dismissal of the em!loyer<s a!!eal and -5. to
disco"rae the em!loyer from "sin the a!!eal to delay or evade !ayment of his o#liations to
the em!loyee&
Na"ional Mines an! Allie! 2or*ers <nion vs. Marcopper Mining Corp.
G&R& No& ),202)M Novem#er ))= 5++3
:ACTS$
D4NR ordered the indeGnite s"s!ension of MARCO''4RNs o!erations for ca"sin damae to the
environment of the 'rovince of Marind"D"e #y s!illin the com!anyNs mine waste or tailins from
an old "nderro"nd im!o"ndin area into the Boac River= in violation of its 4CC& NAMA>U was
the eAcl"sive #arainin re!resentative of the ran;8and8Gle wor;ers of MARCO''4R& 1t Gled a
com!laint with the NLRC aainst MARCO''4R for non!ayment of waes= se!aration !ay=
damaes= and attorneyNs fees&
NAMA>U claimed that d"e to the indeGnite s"s!ension of MARCO''4RNs o!erations= its mem#ers
were not !aid the waes d"e them for siA months& 1t f"rther claimed that its mem#ers are also
entitled to #e !aid their se!aration !ay !"rs"ant to their collective #arainin areement with
MARCO''4R and "nder eAistin im!lementin r"les of the La#or Code& There had #een an illeal
stri;e which occ"rred&
1SSU4$
>hether or not it is necessary that MARCO''4R Gle an a!!eal #ond
RUL1NG$
1n the conteAt of the NLRC a!!eal #ond that is directly at iss"e= MARCO''4R had every reason to
claim in its A!ril )+= 5+++ a!!eal to the NLRC that it sho"ld #e eAc"sed from Glin an a!!eal
#ond with res!ect to the NAMA>U mem#ers who were no loner com!any em!loyees& The CA
decision decreein the termination of em!loyment of those involved in the illeal stri;e case had
already #een iss"ed at that time& >e s"#seD"ently r"led on the same iss"e d"rin the time the
environmental incident case was !endin #efore the NLRC& Th"s= when the NLRC dismissed
MARCO''4RNs a!!eal for fail"re to Gle the reD"isite a!!eal #ond corres!ondin to the 0)6
NAMA>U mem#ers= the termination of em!loyment of these NAMA>U mem#ers was already a
settled matter that the NLRC was in no !osition to disreard& 1n this liht= the CA was correct in
reversin the dismissal of MARCO''4RNs a!!eal for fail"re to Gle an a!!eal #ond& '"rs"ed to its
loical end= the CA concl"sions sho"ld lead to the dismissal of NAMA>UNs com!laint with res!ect
to its 0)6 !revio"sly dismissed mem#ers&
1e"hro In"elligence an! Securi" Corp. vs. S6LE
GR NO& ),56*,= A"& )2= 5++(
:ACTS$
%ethro is a sec"rity service contractor with a sec"rity service contract areement with co8
!etitioner Ba;"lt 'hils& Res!ondent :rederic; Garcia -Garcia.= one of the sec"rity "ards de!loyed
#y %ethro= Gle a com!laint for "nder!ayment of waes= lealJs!ecial holiday !ay= !remi"m !ay for
rest day= )*th month !ay= and niht shift diHerential= the De!artment of La#or and 4m!loyment
-DOL4.8Reional OIce No& 19 cond"cted an ins!ection at Ba;"lt<s !remises in Calam#a= La"na
in the co"rse of which several la#or standards violations were noted= incl"din ;ee!in of
!ayrolls and daily time records in the main oIce= "nder!ayment of waes= overtime !ay and
other #eneGts= and non8reistration with the DOL4 as reD"ired "nder De!artment Order No& )38
+5&
'etitioners attri#"te rave a#"se of discretion on the !art of the DOL4 Reional Director and the
SOL4 in this wise$ -). the SOL4 has no E"risdiction over the case #eca"se= followin Article )5( of
the La#or Code= the areate money claim of each em!loyee eAceeded '6=+++&++&
1SSU4$
>ON the SOL4 has the !ower to determine the violations of La#or Standards&
RUL1NG$
>hile it is tr"e that "nder Articles )5( and 5), of the La#or Code= the La#or Ar#iter has
E"risdiction to hear and decide cases where the areate money claims of each em!loyee
eAceeds '6=+++&++= said !rovisions do not contem!late nor cover the visitorial and enforcement
!owers of the Secretary of La#or or his d"ly a"thori7ed re!resentatives&
The Secretary of La#or= "nder Art& )+0= LC= eAercises D"asi8E"dicial !ower= at least to the eAtent
necessary to determine violations of la#or standards !rovisions of the Code& ?e= or the reional
directors= can iss"e com!liance orders and writs of eAec"tion for the eAec"tion thereof& The
Secretary or his d"ly a"thori7ed re!resentatives shall iss"e writs of eAec"tion to the a!!ro!riate
a"thority for the enforcement of their orders= eAce!t in cases where the em!loyer contests the
Gndin of the la#or em!loyment and enforcement oIcer and raises iss"es s"!!orted #y
doc"mentary !roofs which were not considered in the co"rse of ins!ection&
P5IL. 5o"eliers Inc. vs. Na"ional <nion of 2or*ers in 5o"el, Res"auran" an! Allie!
In!us"ries% &usi" 5o"el Ni**o Chap"er
GR No& )3)(,5= AUGUST 56= 5++(
:ACTS$
RT>'B iss"ed >ae Order No& ( that too; eHect on Novem#er 6= 5++)& 1t rants '*+&++ 4COLA
to !artic"lar em!loyees and wor;ers of all !rivate sectors= identiGed as follows in Section )
thereof$
Section )& U!on the eHectivity of this >ae Order= all !rivate sector wor;ers and em!loyees in
the National Ca!ital Reion receivin daily wae rates of T>O ?UNDR4D :1:TB '4SOS -'56+&++.
"! to T>O ?UNDR4D N1N4TB '4SOS -'5(+&++. shall receive an emerency cost of livin
allowance in the amo"nt of T?1RTB '4SOS -'*+&++. !er day !aya#le in two tranches as follows$
Amo"nt of 4COLA 4Hectivity
')6&++ 6 Novem#er 5++)
')6&++ ) :e#r"ary 5++5
Res!ondent National Union of >or;ers in ?otel= Resta"rant and Allied 1nd"stries8D"sit ?otel
Ni;;o Cha!ter -Union.= thro"h its 'resident= Reynaldo C& Rasin -Rasin.= sent a letter to
Director AleA Maraan -Dir& Maraan. of the De!artment of La#or and 4m!loyment8National Ca!ital
Reion -DOL48NCR.= re!ortin the non8com!liance of D"sit ?otel with >O No& (= while there was
an on8oin com!"lsory ar#itration #efore the National La#or Relations Commission -NLRC. d"e
to a #arainin deadloc; #etween the Union and D"sit ?otelM and reD"estin immediate
assistance on this matter& Rasin sent Dir& Maraan another letter followin8"! his !revio"s
reD"est for assistance&
Actin on Rasin<s letters= the DOL48NCR sent La#or Standards OIcer 4strellita Natividad -LSO
Natividad. to cond"ct an ins!ection of D"sit ?otel !remises on 52 A!ril 5++5& LSO Natividad<s
1ns!ection Res"lts Re!ort dated 5 May 5++5 stated$
Based on interviewsJaIdavits of em!loyees= they are receivin more than '5(+&++ averae daily
rate which is eAem!ted in the com!liance of >ae Order NCR8+(M
Remar;s$ There is an onoin neotiation "nder Case [ NCMB8NCR8NS8)58*0(8+) @ NCMB8NCR8
NS8+)8+)(8+5 now forwarded to the NLRC oIce for the com!"lsory ar#itration&
NOT4$ 'ayrolls to follow later "!on reD"est incl"din !osition !a!er of VD"sit ?otelW&
By virt"e of Rasin<s reD"est for another ins!ection= LSO Natividad cond"cted a second
ins!ection of D"sit ?otel !remises on 5( May 5++5& 1n her 1ns!ection Res"lts Re!ort dated 5(
May 5++5= LSO Natividad noted$
^Non8!resentation of recordsJ!ayrolls
^Based on s"#mitted !ayrolls @ list of "nion mem#ers #y NU>?RA1N8DUS1T ?OT4L N1KKO
Cha!ter= there are one h"ndred forty8fo"r -)22. aHected in the im!lementation of >ae Order
No& NCR8+(8_ 4COLA coverin the !eriods from Nov&6J+) to !resent&
Accordinly= the DOL48NCR iss"ed a Notice of 1ns!ection Res"lt directin D"sit ?otel to eHect
restit"tion andJor correction of the noted violations within Gve days from recei!t of the Notice=
and to s"#mit any D"estion on the Gndins of the la#or ins!ector within the same !eriod=
otherwise= an order of com!liance wo"ld #e iss"ed& The Notice of 1ns!ection Res"lt was d"ly
received #y D"sit ?otel Assistant 'ersonnel Manaer Roelio Santos&
1n the meantime= the NLRC rendered a Decision dated ( Octo#er 5++5 in NLRC8NCR8CC No&
+++5)68+5 S the com!"lsory ar#itration involvin the Collective Barainin Areement -CBA.
deadloc; #etween D"sit ?otel and the Union S rantin the hotel em!loyees the followin wae
increases= in accord with the CBA$
4Hective %an"ary )= 5++)8 '6++&++Jmonth
4Hective %an"ary )= 5++58 '66+&++Jmonth
4Hective %an"ary )= 5++*8 '0++&++Jmonth
On 55 Octo#er 5++5= #ased on the res"lts of the second ins!ection of D"sit ?otel !remises=
DOL48NCR= thro"h Dir& Maraan= iss"ed the Order directin D"sit ?otel to !ay )22 of its
em!loyees the total amo"nt of ')=5)3=52+&++= corres!ondin to their "n!aid 4COLA "nder >O
No& (M !l"s= the !enalty of do"#le indemnity= !"rs"ant to Section )5 of Re!"#lic Act No& 0,5,=))
as amended #y Re!"#lic Act No& 3)33&
The em!loyer concerned shall #e ordered to !ay an amo"nt eD"ivalent to do"#le the "n!aid
#eneGts owin to the em!loyees$ 'rovided= that !ayment of indemnity shall not a#solve the
em!loyer from the criminal lia#ility "nder this Act&
1f the violation is committed #y a cor!oration= tr"st or Grm= !artnershi!= association or any other
entity= the !enalty of im!risonment shall #e im!osed "!on the entity<s res!onsi#le oIcers
incl"din #"t not limited to the !resident= vice !resident= chief eAec"tive oIcer= eneral
manaer= manain director or !artner&
D"sit ?otel Gled a Motion for Reconsideration of the DOL48NCR Order dated 55 Octo#er 5++5=
ar"in that the NLRC Decision dated ( Octo#er 5++5= resolvin the #arainin deadloc;
#etween D"sit ?otel and the Union= and awardin salary increases "nder the CBA to hotel
em!loyees retroactive to ) %an"ary 5++)= already rendered the DOL48NCR Order moot and
academic& >ith the increase in the salaries of the hotel em!loyees ordered #y the NLRC Decision
of ( Octo#er 5++5= alon with the hotel em!loyees< share in the service chares= the )22 hotel
em!loyees= covered #y the DOL48NCR Order of 55 Octo#er 5++5= wo"ld already #e receivin
salaries #eyond the coverae of >O No& (&
Actin on the Motion= DOL48NCR iss"ed a Resol"tion settin aside its earlier Order for #ein moot
and academic= in consideration of the NLRC decision and dismissin the com!laint of the Union
aainst D"sit ?otel= for non8com!liance with >O No& (= for lac; of merit&
The Union a!!ealed #efore the DOL4 Secretary maintainin that the wae increases ranted #y
the NLRC Decision of ( Octo#er 5++5 sho"ld not #e deemed as com!liance #y D"sit ?otel with
>O No& (& The DOL4= thro"h Actin Secretary Man"el G& 1mson= iss"ed an Order rantin the
a!!eal of the Union& The DOL4 Secretary reasoned that the NLRC Decision dated ( Octo#er 5++5
cateorically declared that the wae increase "nder the CBA Gnali7ed #etween D"sit ?otel and
the Union shall not #e credited as com!liance with >Os No& 3 and No& (& :"rthermore= Section )
of R"le 19 of the R"les 1m!lementin >O No& (= which !rovides that wae increases ranted #y
an em!loyer in an orani7ed esta#lishment within three months !rior to the eHectivity of said
>ae Order shall #e credited as com!liance with the 4COLA !rescri#ed therein= a!!lies only
when an areement to this eHect has #een fored #etween the !arties or a !rovision in the CBA
allowin s"ch creditin eAists&
4A!ectedly= D"sit ?otel so"ht reconsideration of the Order of the DOL4 Secretary& 1n an Order=
the DOL4 Secretary ranted the Motion for Reconsideration of D"sit ?otel and reversed his Order
dated 55 %"ly 5++2& The DOL4 Secretary= in reversin his earlier Order= admitted that he had
disrearded therein that the wae increase ranted #y the NLRC in the latter<s Decision dated (
Octo#er 5++5 retroacted to ) %an"ary 5++)& The said wae increase= ta;en toether with the
hotel em!loyees< share in the service chares of D"sit ?otel= already constit"ted com!liance
with the >O No& (&
1t was then the t"rn of the Union to Gle a Motion for Reconsideration= #"t it was denied #y the
DOL4 Secretary& The DOL4 Secretary fo"nd that it wo"ld #e "nE"st on the !art of D"sit ?otel if
the hotel em!loyees were to enEoy salary increases retroactive to ) %an"ary 5++)= !"rs"ant to
the NLRC Decision dated ( Octo#er 5++5= and yet said salary increases wo"ld #e disrearded in
determinin com!liance #y the hotel with >O No& (&
The Union a!!ealed the Orders dated )0 Decem#er 5++2 and )* Octo#er 5++6 of the DOL4
Secretary with the Co"rt of A!!eals= the Co"rt of A!!eals !rom"lated its Decision r"lin in favor
of the Union& Referrin to Section )* of >O No& (= the Co"rt of A!!eals declared that wae
increasesJallowances ranted #y the em!loyer shall not #e credited as com!liance with the
!rescri#ed increase in the same >ae Order= "nless so !rovided in the law or the CBA itselfM and
there was no s"ch !rovision in the case at #ar& The a!!ellate co"rt also fo"nd that D"sit ?otel
failed to s"#stantiate its !osition that recei!t #y its em!loyees of shares in the service chares
collected #y the hotel was to #e deemed s"#stantial com!liance #y said hotel with the !ayment
of 4COLA reD"ired #y >O No& (& The Co"rt of A!!eals adE"ded that D"sit ?otel sho"ld #e lia#le
for do"#le indemnity for its fail"re to com!ly with >O No& ( within Gve days from recei!t of
notice& The a!!ellate co"rt stressed that 4COLA is amon the la#orers< Gnancial ratiGcations
"nder the law= and is distinct and se!arate from #eneGts derived from neotiation or areement
with their em!loyer&
The Motion for Reconsideration of D"sit ?otel was denied for lac; of merit #y the Co"rt of
A!!eals&
1SSU4$
>hether the )22 hotel em!loyees were still entitled to 4COLA ranted #y >O No& ( des!ite the
increases in their salaries= retroactive to ) %an"ary 5++)= ordered #y NLRC in the latter<s Decision
dated ( Octo#er 5++5&
RUL1NG$
The reliance of the Union on Section )* of >O No& ( in this case is mis!laced& D"sit ?otel is not
contendin credita#ility of the hotel em!loyees< salary increases as com!liance with the 4COLA
mandated #y >O No& (& Credita#ility means that D"sit ?otel wo"ld have #een allowed to !ay its
em!loyees the salary increases in !lace of the 4COLA reD"ired #y >O No& (& This= however= is not
what D"sit ?otel is after& The !osition of D"sit ?otel is merely that the salary increases sho"ld #e
ta;en into acco"nt in determinin the em!loyees< entitlement to 4COLA& The retroactive
increases co"ld raise the hotel em!loyees< daily salary rates a#ove '5(+&++= conseD"ently=
!lacin said em!loyees #eyond the coverae of >O No& (& 4vidently= Section )* of >O No& ( on
credita#ility is irrelevant and ina!!lica#le herein&
The Co"rt arees with D"sit ?otel that the increased salaries of the em!loyees sho"ld #e "sed as
#ases for determinin whether they were entitled to 4COLA "nder >O No& (& The very fact that
the NLRC decreed that the salary increases of the D"sit ?otel em!loyees shall #e retroactive to )
%an"ary 5++) and ) %an"ary 5++5= means that said em!loyees were already s"!!osed to receive
the said salary increases #einnin on these dates& The increased salaries were the rihtf"l
salaries of the hotel em!loyees #y ) %an"ary 5++)= then aain #y ) %an"ary 5++5& Altho"h
#elatedly !aid= the hotel em!loyees still received their salary increases&
1t is only fair and E"st= therefore= that in determinin entitlement of the hotel em!loyees to
4COLA= their increased salaries #y ) %an"ary 5++) and ) %an"ary 5++5 shall #e made the #ases&
There is no loic in reconi7in the salary increases for one !"r!ose -i&e&= to recover the "n!aid
amo"nts thereof. #"t not for the other -i&e&= to determine entitlement to 4COLA.& :or the Co"rt to
r"le otherwise wo"ld #e to sanction "nE"st enrichment on the !art of the hotel em!loyees= who
wo"ld #e receivin increases in their salaries= which wo"ld !lace them #eyond the coverae of
Section ) of >O No& (= yet still #e !aid 4COLA "nder the very same !rovision&
The NLRC= in its Decision dated ( Octo#er 5++5= directed D"sit ?otel to increase the salaries of
its em!loyees #y '6++&++ !er month= retroactive to ) %an"ary 5++)& After a!!lyin the said
salary increase= only 35 hotel em!loyees wo"ld have had daily salary rates fallin within the
rane of '56+&++ to '5(+&++& Th"s= "!on the eHectivity of >O No& ( on 6 Novem#er 5++)= only
the said 35 em!loyees were entitled to receive the Grst tranch of 4COLA= eD"ivalent to ')6&++
!er day&
The NLRC Decision also ordered D"sit ?otel to eHect a second ro"nd of increase in its em!loyees<
salaries= eD"ivalent to '66+&++ !er month= retroactive to ) %an"ary 5++5& As a res"lt of this
increase= the daily salary rates of all hotel em!loyees were already a#ove '5(+&++&
ConseD"ently= #y ) %an"ary 5++5= no more hotel em!loyee was D"aliGed to receive 4COLA&
The assertion of D"sit ?otel that the recei!t #y said hotel em!loyees of their shares in the
service chares already constit"ted s"#stantial com!liance with the !rescri#ed !ayment of
4COLA "nder >O No& (&
1t m"st #e noted that the hotel em!loyees have a riht to their share in the service chares
collected #y D"sit ?otel= !"rs"ant to Article (0 of the La#or Code of )(()= to wit$
PArticle (0& Service chares& S All service chares collected #y hotels= resta"rants and similar
esta#lishments shall #e distri#"ted at the rate of eihty8Gve !ercent -36X. for all covered
em!loyees and Gfteen !ercent -)6X. for manaement& The share of em!loyees shall #e eD"ally
distri#"ted amon them& 1n case the service chare is a#olished= the share of the covered
em!loyees shall #e considered interated in their waes&Q
Since D"sit ?otel is eA!licitly mandated #y the afore8D"oted stat"tory !rovision to !ay its
em!loyees and manaement their res!ective shares in the service chares collected= the hotel
cannot claim that !ayment thereof to its 35 em!loyees constit"te s"#stantial com!liance with
the !ayment of 4COLA "nder >O No& (& Undo"#tedly= the hotel em!loyees< riht to their shares
in the service chares collected #y D"sit ?otel is distinct and se!arate from their riht to 4COLAM
ratiGcation #y the hotel of one does not res"lt in the satisfaction of the other&
SC Gnds no #asis to hold D"sit ?otel lia#le for do"#le indemnity
Under Section 5-m. of DOL4 De!artment Order No& )+= Series of )((3= the Notice of 1ns!ection
Res"lt Lshall s!ecify the violations discovered= if any= toether with the oIcer<s recommendation
and com!"tation of the "n!aid #eneGts d"e each wor;er with an advice that the em!loyer shall
#e lia#le for do"#le indemnity in case of ref"sal or fail"re to correct the violation within Gve
calendar days from recei!t of notice&L A caref"l review of the Notice of 1ns!ection Res"lt dated 5(
May 5++5= iss"ed herein #y the DOL48NCR to D"sit ?otel= reveals that the said Notice did not
contain s"ch an advice& Altho"h the Notice directed D"sit ?otel to correct its noted violations
within Gve days from recei!t thereof= it was not s"Iciently a!!rised that fail"re to do so within
the iven !eriod wo"ld already res"lt in its lia#ility for do"#le indemnity& The lac; of advice
de!rived D"sit ?otel of the o!!ort"nity to decide and act accordinly within the Gve8day !eriod=
as to avoid the !enalty of do"#le indemnity& By 55 Octo#er 5++5= the DOL48NCR= thro"h Dir&
Maraan= already iss"ed its Order directin D"sit ?otel to !ay )22 of its em!loyees the total
amo"nt of ')=5)3=52+&++= corres!ondin to their "n!aid 4COLA "nder >O No& (M !l"s the !enalty
of do"#le indemnity= !"rs"ant to Section )5 of Re!"#lic Act No& 0,5,= as amended #y Re!"#lic
Act No& 3)33&
SC S A::1RM4D >1T? T?4 :OLLO>1NG MOD1:1CAT1ONS$ -). D"sit ?otel Ni;;o is ORD4R4D to !ay
its 35 em!loyees S who= after a!!lyin the salary increases for ) %an"ary 5++)= had daily salaries
of '56+&++ to '5(+&++ S the Grst tranch of 4merency Cost of Livin Allowance= eD"ivalent to
')6&++ !er day= from 6 Novem#er 5++) to *) Decem#er 5++)= within ten -)+. days from Gnality
of this DecisionM and -5. the !enalty for do"#le indemnity is D4L4T4D& No costs&
PAltho"h the Co"rt is mindf"l of the fact that la#or em#races individ"als with a wea;er and
"nlettered !osition as aainst ca!ital= it is eD"ally mindf"l of the !rotection that the law accords
to ca!ital& >hile the Constit"tion is committed to the !olicy of social E"stice and the !rotection of
the wor;in class= it sho"ld not #e s"!!osed that every la#or dis!"te will #e a"tomatically
decided in favor of la#or& Manaement also has its own rihts which= as s"ch= are entitled to
res!ect and enforcement in the interest of sim!le fair !lay&Q
)iger Cons"ruc"ion an! &evelop#en" Corp. vs. Aba
GR No& )02)2) :e#r"ary 50= 5+)+
:ACTS$
On the #asis of a com!laint Gled #y res!ondents Reynaldo A#ay and Gfty8nine -6(. others #efore
the Reional OIce of the De!artment of La#or and 4m!loyment -DOL4.= an ins!ection was
cond"cted #y DOL4 oIcials at the !remises of !etitioner TCDC& Several la#or standard violations
were noted= s"ch as deGciencies in record ;ee!in= non8com!liance with vario"s wae orders=
non8!ayment of holiday !ay= and "nder!ayment of )*th month !ay& The case was then set for
s"mmary hearin&
?owever= #efore the hearin co"ld ta;e !lace= the Director of Reional OIce No& 9= Ma& Glenda
A& Manalo -Director Manalo.= iss"ed an Order on %"ly 56= 5++5= which reads$
]]] in view of the foreoin= this case falls "nder the oriinal and eAcl"sive E"risdiction of the
National La#or Relations Commission as !rovided "nder Article 5), of the La#or Code of the
'hili!!ines&
On Se!tem#er *+= 5++5= Director Manalo iss"ed an Order directin TCDC to !ay '5=)5*=5*6&(+ to
its em!loyees re!resentin "nder!ayment of salaries= )*th month !ay= and "nder!ayment of
service incentive leave !ay and re"lar holiday !ay& TCDC Gled a Motion for Reconsideration on
Octo#er ),= 5++5 and a S"!!lemental 'leadin to the Motion for Reconsideration on Novem#er
5)= 5++5= reiteratin the ar"ment that Director Manalo had lost E"risdiction over the matter&
A!!arently convinced #y !etitioner<s ar"ments= Director Manalo aain endorsed the case to the
NLRC Reional Ar#itration Branch 9 -Leas!i City.& On %an"ary 5,= 5++*= the NLRC ret"rned the
entire records of the case to Director Manalo on the ro"nd that the NLRC does not have
E"risdiction over the com!laint&
?avin the case in her oIce once more= Director Manalo Gnally iss"ed an Order dated %an"ary
5(= 5++* denyin !etitioner<s motion for reconsideration for lac; of merit&
Since TCDC did not inter!ose an a!!eal within the !rescri#ed !eriod= Director Manalo iss"ed
forthwith a >rit of 4Aec"tion on :e#r"ary )5= 5++*&
1SSU4$
The iss"e in the case is whether !etitioner can still assail the %an"ary 5(= 5++* Order of Director
Manalo alleedly on the ro"nd of lac; of E"risdiction= after said Order has attained Gnality and is
already in the eAec"tion stae&
RUL1NG$
The !etition lac;s merit&
'etitioner admits that it failed to a!!eal the %an"ary 5(= 5++* Order within the !eriod !rescri#ed
#y law& 1t li;ewise admits that the case was already in the eAec"tion !rocess when it resorted to a
#elated a!!eal to the DOL4 Secretary& 'etitioner= however= eAc"ses itself from the eHects of the
Gnality of the Order #y ar"in that it was alleedly iss"ed witho"t E"risdiction and may #e
assailed at any time&
>hile it is tr"e that orders iss"ed witho"t E"risdiction are considered n"ll and void and= as a
eneral r"le= may #e assailed at any time= the fact of the matter is that in this case= Director
Manalo acted within her E"risdiction& Under Article
)53 -#. of the La#or Code= as amended #y Re!"#lic Act -RA. No& ,,*+= the DOL4 Secretary and
her re!resentatives= the reional directors= have E"risdiction over la#or standards violations
#ased on Gndins made in the co"rse of ins!ection of an em!loyer<s !remises& The said
E"risdiction is not aHected #y the amo"nt of claim involved= as RA ,,*+ had eHectively removed
the E"risdictional limitations fo"nd in Articles )5( and 5), of the La#or Code insofar as ins!ection
cases= !"rs"ant to the visitorial and enforcement !owers of the DOL4 Secretary= are concerned&
The last sentence of Article )53-#. of the La#or Code reconi7es an eAce!tion to the E"risdiction
of the DOL4 Secretary and her re!resentatives= #"t s"ch eAce!tion is neither an iss"e nor
a!!lica#le here&
People+s Broa!cas"ing 3Bo#bo Ra!o Phils4 vs. Sec of &6LE e" al
GR No ),(065= May 3= 5++(
:ACTS$
%andeleon %"e7an -P%"e7anQ. Gled a com!laint #efore the DOL4 aainst Bom#o Radyo 'hils&
-PBom#o RadyoQ. for illeal ded"ction= non8!ayment of service incentive leave= )*th month !ay=
!remi"m !ay for holiday and rest day and illeal dimin"tion of #eneGts= delayed !ayment of
waes and non8coverae of SSS= 'AG81B1G and 'hilhealth& On the #asis of the com!laint= the
DOL4 cond"cted a !lant level ins!ection& The La#or 1ns!ector in his re!ort wrote=
Manaement re!resentative informed that -%"e7an. com!lainant is a drama talent hired on a !er
drama `!artici!ation #asis< hence no em!loyer8em!loyer relationshi! eAisted #etween them& As
!roof of this= manaement !resented !hotoco!ies of cash vo"chers= #illin statement=
em!loyments of s!eciGc "nderta;in= etc& The manaement has no control of the talent if he
vent"res into another contract with other #roadcastin ind"stries&
1SSU4$
>hether or not the Secretary of La#or has the !ower to determine the eAistence of an em!loyer8
em!loyee relationshi!&
RUL1NG$
NO& Art& )53 -#. of the La#or Code= as amended #y R&A& ,,*+ reads$
Notwithstandin the !rovisions of Articles )5( and 5), of this Code to the contrary= and in cases
where the relationshi! of em!loyer8em!loyee still eAists= the Secretary of La#or and 4m!loyment
or his d"ly a"thori7ed re!resentatives shall have the !ower to iss"e com!liance orders to ive
eHect to the la#or standards !rovisions of this Code and other la#or leislation #ased on the
Gndins of la#or em!loyment and enforcement oIcers or ind"strial safety enineers made in the
co"rse of ins!ection&
The !rovision is eA!licit that the visitorial and enforcement !ower of the DOL4 comes into !lay
only Pin cases when the relationshi! of em!loyer8em!loyee still eAists&Q This cla"se siniGes that
the em!loyer8em!loyee relationshi! m"st have eAisted even #efore the emerence of the
controversy& Necessarily= the DOL4<s !ower does not a!!ly in two instances= namely$ -i. where
the em!loyer8em!loyee relationshi! has ceasedM and -ii. where no s"ch relationshi! has ever
eAisted&
The Grst sit"ation is cateorically covered #y Sec& *= R"le )) of the R"les on the Dis!osition of
La#or Standards Cases iss"ed #y the DOL4 Secretary& 1t reads$
>here em!loyer8em!loyee relationshi! no loner eAists #y reason of the fact that it has already
#een severed= claims for !ayment of monetary #eneGts fall within the eAcl"sive and oriinal
E"risdiction of the la#or ar#iters& Accordinly= if on the face of the com!laint= it can #e
ascertained that em!loyer8em!loyee relationshi! no loner eAists= the case= whether
accom!anied #y an alleation of illeal dismissal= shall immediately #e endorsed #y the Reional
Director to the a!!ro!riate #ranch of the National La#or Relations Commission -NLRC.&
The law accords a !reroative to the NLRC over the claim when the em!loyer8em!loyee
relationshi! has terminated or s"ch relationshi! has not arisen at all& The eAistence of an
em!loyer8em!loyee relationshi! is a matter which is not easily determina#le from an ordinary
ins!ection #eca"se the elements of s"ch a relationshi! are not veriGa#le from a mere oc"lar
eAamination& The intricacies and im!lications of an em!loyer8em!loyee relationshi! demand that
the level of scr"tiny sho"ld #e far a#ove the s"!erGcial& >hile doc"ments= !artic"larly
doc"ments fo"nd in the em!loyer<s oIce are the !rimary so"rces materials= what may !rove
decisive are factors related to the history of the em!loyer<s #"siness o!erations= its c"rrent state
as well as acce!ted contem!orary !ractices in the ind"stry& More often than not= the D"estion of
em!loyer8em!loyee relationshi! #ecomes a #attle of evidence= the determination of which
sho"ld #e com!rehensive and intensive and therefore #est left to the s!eciali7ed D"asi8E"dicial
#ody of the NLRC&
1t can #e ass"med that the DOL4 in the eAercise of its visitorial and enforcement !ower somehow
has to ma;e a determination of the eAistence of an em!loyer8em!loyee relationshi!& ?owever=
s"ch determination cannot #e coeAtensive with the visitorial and enforcement !ower itself& S"ch
is merely !reliminary= incidental and collateral to the DOL4<s !rimary f"nction of enforcin la#or
standards !rovisions& The determination of the eAistence of em!loyer8em!loyee relationshi! is
still !rimarily loded with the NLRC& This is the meanin of the cla"se Pin cases where the
relationshi! of em!loyer8em!loyee still eAistsQ in Art& )53 -#.&
Th"s= #efore the DOL4 may eAercise its !owers "nder Art& )53= two im!ortant D"estions m"st #e
resolved$ -i. Does the em!loyer8em!loyee relationshi! still eAist= or alternatively= was there ever
an em!loyer8em!loyee relationshi! to s!ea; ofM and -ii. Are there violations of the La#or Code or
of any la#or lawZ
The eAistence of an em!loyer8em!loyee relationshi! is a stat"tory !rereD"isite to and a limitation
on the !ower of the Secretary of La#or= one which the leislative #ranch is entitled to im!ose&
The rationale "nderlyin this limitation is to eliminate the !ros!ect of com!etin concl"sions of
the Secretary of La#or and the NLRC& 1f the Secretary of La#or !roceeds to eAercise his visitorial
and enforcement !owers a#sent the Grst reD"isite= his oIce confers E"risdiction on itself which it
cannot otherwise acD"ire&
Nevertheless= a mere assertion of a#sence of em!loyer8em!loyee relationshi! does not de!rive
the DOL4 of E"risdiction over the claim& At least a !rima facie showin of s"ch a#sence of
relationshi!= as in this case= is needed to !recl"de the DOL4 from the eAercise of its !ower&
>itho"t a do"#t= Bom#o Radyo= since the ince!tion of this case had #een consistent in
maintainin that %"e7an is not its em!loyee& A !reliminary determination= #ased on the evidence
oHered and noted #y the La#or 1ns!ector d"rin the ins!ection as well as s"#mitted d"rin the
!roceedins #efore the Reional Director !"ts in en"ine do"#t the eAistence of em!loyer8
em!loyee relationshi!& :rom that !oint on= the !r"dent reco"rse on the !art of the DOL4 sho"ld
have #een to refer %"e7an to the NLRC for the !ro!er dis!ensation of his claims& :"rthermore=
even the evidence relied on #y the Reional Director in his order are mere self8servin
declarations of %"e7an= and hence cannot #e relied "!on as !roof of em!loyer8em!loyee
relationshi!&
Superior Pac*aging Corp. vs. Balagsa e" al., 6c"ober >/, ./>.
(ac"sE
The !etitioner enaed the services of Lancer to !rovide reliever services to its #"siness=
which involves the man"fact"re and sale of commercial and ind"strial corr"ated #oAes&
Accordin to !etitioner= the res!ondents were enaed for fo"r -2. months from :e#r"ary to
%"ne )((3 and their tas;s incl"ded loadin= "nloadin and sereation of corr"ated #oAes&
Thereafter= res!ondents Gled com!laint aainst the !etitioner and 'resident= Cesar L"7
-L"7.= for "nder!ayment of waes= non8!ayment of !remi"m !ay for wor;ed rest= overtime
!ay and non8!ayment of salary& U!on recei!t De!artment of La#or and 4m!loyment -DOL4.
cond"cted an ins!ection of the !etitioner<s !remises and fo"nd several violations= to wit$
-). Non8!resentation of !ayrolls and daily time recordsM
-5. Non8s"#mission of ann"al re!ort of safety orani7ationM
-*. Medical and accidentJillness re!ortsM
-2. Non8reistration of esta#lishment "nder R"le )+5+ of Occ"!ational and ?ealth StandardsM
and
-6. No trained Grst aide&ll&
D"e to the !etitioner<s fail"re to a!!ear in the s"mmary investiations cond"cted #y the
DOL4= an Order

was iss"ed on %"ne )3= 5++* Gndin in favor of the res!ondents and ado!tin
the com!"tation of the claims s"#mitted& 'etitioner and L"7 were ordered= amon others= to
!ay res!ondents their total claims in the amo"nt of 4iht ?"ndred :orty Tho"sand :o"r
?"ndred SiAty8Three 'esos and *3J)++ -' 32+=20*&*3.&
'etitioner Gled a motion for reconsideration on the ro"nd that res!ondents are not its
em!loyees #"t of Lancer and that they !ay Lancer in l"m! s"m for the services rendered& The
DOL4= however= denied its motion #eca"se !etitioner failed to s"!!ort its claim that the
res!ondents are not its em!loyees= and even ass"min that they were em!loyed #y Lancer=
the !etitioner still cannot esca!e lia#ility as Section )* of the De!artment Order No& )+=
Series of )((,= ma;es a !rinci!al Eointly and severally lia#le with the contractor to contract"al
em!loyees to the eAtent of the wor; !erformed when the contractor fails to !ay its em!loyees
waes&
Their a!!eal to the Secretary of DOL4 was dismissed th"s= l !etitioner and L"7 Gled a
!etition for certiorari with the Co"rt of A!!eals -CA.&
On Novem#er ),= 5++0= the CA aIrmed the Secretary of DOL4s orders= with the
modiGcation in that L"7 was a#solved of any !ersonal lia#ility "nder the award&
?ence= this !etition for review "nder R"le 26 of the R"les of Co"rt&
IssueE
>hether or not DOL4 has a"thority to determine the eAistence of an em!loyer8em!loyee
relationshi!Z
>hether S"!erior 'ac;ain Cor!oration may #e held solidarily lia#le with Lancer StaIn
@ Services Networ;= 1nc& -Lancer. for res!ondents "n!aid money claimsZ
RulingE
The !etition is #ereft of merit&
The DOL4 clearly acted within its a"thority when it determined the eAistence of an em!loyer8
em!loyee relationshi! #etween the !etitioner and res!ondents as it falls within the !"rview of
its visitorial and enforcement !ower "nder Article )53-#. of the La#or Code& The
determination of the eAistence of an em!loyer8em!loyee relationshi! #y the DOL4 m"st #e
res!ected&
>ith reard to the contention that there is no evidence to s"!!ort the Gndin that the
res!ondents rendered overtime wor; and that they wor;ed on their rest day= the resol"tion of
this ar"ment reD"ires a review of the fact"al Gndins and the evidence !resented= Co"rt said
that it is not a trier of facts and it a!!lies with reater force in la#or cases& ?ence= where the
fact"al Gndins of the la#or tri#"nals or aencies conform to= and are aIrmed #y= the CA= the
same are accorded res!ect and Gnality= and are #indin to S"!reme Co"rt&
1t was the consistent concl"sion of the DOL4 and the CA that Lancer was not an inde!endent
contractor #"t was enaed in Lla#or8only contractinLM hence= the !etitioner was considered
an indirect em!loyer of res!ondents and lia#le to the latter for their "n!aid money claims&
At the time of the res!ondents em!loyment in )((3= the a!!lica#le re"lation was DOL4
De!artment Order No& )+= Series of )((,& Under said De!artment Order= la#or8only
contractin was deGned as follows$
Sec& (& Labor-onl contracting! -a. Any !erson who "nderta;es to s"!!ly wor;ers to an
em!loyer shall #e deemed to #e enaed in la#or8only contractin where s"ch !erson$
-). Does not have s"#stantial ca!ital or investment in the form of tools= eD"i!ment=
machineries= wor; !remises and other materialsM and
-5. The wor;ers recr"ited and !laced #y s"ch !ersons are !erformin activities which are
directly related to the !rinci!al #"siness or o!erations of the em!loyer in which wor;ers are
ha#it"ally em!loyed&
Labor-onl contracting is !rohi#ited and the !erson actin as contractor shall #e considered
merely as an aent or intermediary of the em!loyer who shall #e res!onsi#le to the wor;ers
in the same manner and eAtent as if the latter were directly em!loyed #y him&
Accordin to the CA= the totality of the facts and s"rro"ndin circ"mstances of this case !oint
to s"ch concl"sion that Lancer was= indeed= a la#or8only contractor& Aside from these is the
"ndis!"ted fact that the !etitioner failed to !rod"ce any written service contract that miht
serve as !roof of its alleed areement with Lancer&
:inally= a Gndin that a contractor is a Lla#or8onlyL contractor is eD"ivalent to declarin that
there is an em!loyer8em!loyee relationshi! #etween the !rinci!al and the em!loyees of the
s"!!osed contractor= and the Lla#or onlyL contractor is considered as a mere aent of the
!rinci!al= the real em!loyer& The former #ecomes solidarily lia#le for all the rihtf"l claims of
the em!loyees&
'etitioner therefore= #ein the !rinci!al em!loyer and Lancer= #ein the la#or8only contractor=
are solidarily lia#le for res!ondents "n!aid money claims&
Gaa vs. CA
G&R& No& L822)0(M Decem#er *= )(36
:ACTS$
Rosario Gaa is occ"!yin a manaerialJ s"!ervisory !osition in 4l Grande ?otel& A Notice of
Garnishment "!on 4l Grande ?otel= where !etitioner was then em!loyed= arnishin her Lsalary=
commission andJor rem"neration&L 'etitioner then Gled with the Co"rt of :irst 1nstance of Manila
a motion to lift said arnishment on the ro"nd that her Lsalaries= commission and= or
rem"neration are eAem!ted from eAec"tion "nder Article ),+3 of the New Civil Code&
1SSU4$
>hether or not the ren"meration of Gaa are eAem!ted from eAec"tion or attachment !"rs"ant to
Art& ),+3 of the Civil Code&
RUL1NG$
SC held that= P>e do not thin; that the leislat"re intended the eAem!tion in Article ),+3 of the
New Civil Code to o!erate in favor of any #"t those who are la#orin men or women in the sense
that their wor; is man"al& 'ersons #elonin to this class "s"ally loo; to the reward of a dayNs
la#or for immediate or !resent s"!!ort= and s"ch !ersons are more in need of the eAem!tion
than any others& 'etitioner Rosario A& Gaa is deGnitely not within that class&
Nes"le Phils. vs. NLRC
G&R& No& 36)(, March )3= )(()
:ACTS$
The !rivate res!ondents were em!loyed #y the !etitioner either as sales re!resentatives or
medical re!resentatives& By reason of the nat"re of their wor; they were each allowed to avail of
the com!anyNs car loan !olicy& Under that !olicy= the com!any advances the !"rchase !rice of a
car to #e !aid #ac; #y the em!loyee thro"h monthly ded"ctions from his salary= the com!any
retainin the ownershi! of the motor vehicle "ntil it shall have #een f"lly !aid for& All of the
!rivate res!ondents availed of the !etitionerNs car loan !olicy&
Res!ondents were dismissed from service #eca"se of their !artici!ation in the stri;eJ certain
irre"larities& As s"ch= they Gled a case of illeal dismissal #efore the NLRC& 1n the Notices of
Dismissal= they were as;ed #y the Com!any to settle the acco"nts !aya#le of their car loans or
ret"rn the car for !ro!er dis!osition& The Com!any Gled a civil s"it to recover !ossession of the
cars& 'rivate res!ondents so"ht a tem!orary restrainin order in the NLRC to sto! the com!any
from cancellin their car loans and collectin their monthly amorti7ations !endin the Gnal
resol"tion of their a!!eals in the illeal dismissal case& NLRC ranted the TRO&
1SSU4$
>hether or not NLRC is correct in rantin the TRO in favor of the res!ondents !endin the case
of illeal dismissal&
RUL1NG$
NestlaNs demand for !ayment of the !rivate res!ondentsN amorti7ations on their car loans= or= in
the alternative= the ret"rn of the cars to the com!any= is not a la#or= #"t a civil= dis!"te& 1t
involves de#tor8creditor relations= rather than em!loyee8em!loyer relations& The NLRC ravely
a#"sed its discretion and eAceeded its E"risdiction #y iss"in the writ of inE"nction to sto! the
com!any from enforcin the civil o#liation of the !rivate res!ondents "nder the car loan
areements and from !rotectin its interest in the cars which= #y the terms of those areements=
#elon to it -the com!any. "ntil their !"rchase !rice shall have #een f"lly !aid #y the em!loyee&
The terms of the car loan areements are not in iss"e in the la#or case& The rihts and
o#liations of the !arties "nder those contracts may #e enforced #y a se!arate civil action in the
re"lar co"rts= not in the NLRC&
(ive 1 )a9i vs. NLRC
G&R& No& )))2,2 A""st 55= )((2
:ACTS$
'rivate res!ondents Domino Maldian and Gil#erto Sa#salon were hired #y the !etitioners as
taAi drivers& Aside from the daily L#o"ndaryL= they were also reD"ired to !ay '5+&++ for car
washin= and to f"rther ma;e a ')6&++ de!osit to answer for any deGciency in their L#o"ndary=L
for every act"al wor;in day&
1SSU4$
>hether or not the car wash !ayment is an illeal ded"ction as contem!lated in the La#or Code&
RUL1NG$
SC held that the amo"nt doled o"t was !aid directly to the !erson who washed the "nit= th"s we
Gnd nothin illeal in this !ractice= m"ch more to consider the amo"nt !aid #y the driver as
illeal ded"ction in the conteAt of the law& ConseD"ently= !rivate res!ondents are not entitled to
the ref"nd of the '5+&++ car wash !ayments they made& 1t will #e noted that there was nothin
to !revent !rivate res!ondents from cleanin the taAi "nits themselves= if they wanted to save
their '5+&++&Car washin after a to"r of d"ty is a !ractice in the taAi ind"stry= and is= in fact=
dictated #y fair !lay&
Phil. 'e"erans Ban* vs. NLRC
G&R& No& )*+2*( Octo#er 50= )(((
:ACTS$
D"e to Gnancial losses= the 'hili!!ine 9eterans Ban; was !laced in receivershi! !"rs"ant to the
order of the Central Ban; of the 'hili!!ines& ConseD"ently= its em!loyees= incl"din !rivate
res!ondent Dr& %ose Teodorico 9& Molina= were terminated from wor; and iven their res!ective
se!aration !ay and other #eneGts& Dr& Molina Gled a com!laint #efore NLRC& ?e demanded the
im!lementation of the >ae Orders No& ) and 5& Both the La#or Ar#iter and NLRC ranted the
!etition of Molina&
1SSU4$
>hether or not Molina is entitled to the increase of his salary !"rs"ant to >ae Orders No& ) and
5&
RUL1NG$
SC held that Molina<s salary is within the coverae of the said wae orders& >&O& ) eA!ressly
states that em!loyees havin a monthly salary of not more than '*=3+5&+3 are entitled to
receive the mandated wae increase& Undenia#ly= MOL1NA was receivin a monthly salary of
'*=,62&0+& This fact alone leaves no do"#t that he sho"ld #eneGt from said wae order& On the
other hand= >&O& 5 raised the ceilin for entitlement to the wae increase& 1f MOL1NA was covered
#y the earlier wae order= with more reason sho"ld the later wae order a!!ly to him&
Philippine Appliances Corp. vs. CA
G&R& No& )2(2*2M %"ne *= 5++2
:ACTS$
'etitioner is a domestic cor!oration enaed in the #"siness of man"fact"rin refrierators=
free7ers and washin machines& Res!ondent United 'hilacor >or;ers Union8NA:LU is the d"ly
elected collective #arainin re!resentative of the ran;8and8Gle em!loyees of !etitioner& D"rin
the collective #arainin neotiations #etween !etitioner and res!ondent "nion in )((, -for the
last two years of the collective #arainin areement coverin the !eriod of %"ly )= )((, to
A""st *)= )(((.= !etitioner oHered the amo"nt of fo"r tho"sand !esos -'2=+++&++. to each
em!loyee as an Learly concl"sion #on"sL& U!on concl"sion of the CBA neotiations= !etitioner
accordinly ave this early sinin #on"s& After the eA!iration of the CBA= #oth !arties
neotiated for a new CBA& ?owever= it res"lted to a deadloc;& The res!ondent "nion Gled #efore
the NCMB a notice of stri;e d"e to #arainin deadloc;& The De!artment of La#or and
4m!loyment too; coni7ance of the case and ordered= amon other thins= herein !etitioner to
award sinin #on"s& 'etitioner ar"ed that the award of the sinin #on"s was !atently
erroneo"s since it was not !art of the em!loyees< salaries or #eneGts or of the collective
#arainin areement& 1t is not demanda#le or enforcea#le since it is in the nat"re of an
incentive&
1SSU4$
>hether or not the award of a sinin #on"s #y the Secretary of La#or is correct&
RUL1NG$
SC held that the sinin #on"s m"st not #e awarded&
The CBA neotiation #etween !etitioner and res!ondent "nion failed notwithstandin the
intervention of the NCMB& Res!ondent "nion went on stri;e for eleven days and #loc;ed the
inress to and eress from !etitioner<s two wor; !lants& The la#or dis!"te had to #e referred to
the Secretary of La#or and 4m!loyment #eca"se neither of the !arties was willin to com!romise
their res!ective !ositions reardin the fo"r remainin items which stood "nresolved& >hile we
do not fa"lt any one !arty for the fail"re of the neotiations= it is a!!arent that there was no
more oodwill #etween the !arties and that the CBA was clearly not sined thro"h their m"t"al
eHorts alone& ?ence= the !ayment of the sinin #on"s is no loner E"stiGed and to order s"ch
!ayment wo"ld #e "nfair and "nreasona#le for !etitioner&
:"rthermore= we have consistently r"led that a #on"s is not a demanda#le and enforcea#le
o#liation&
Agabon vs. NLRC
G&R& No& )630(*M Novem#er ),= 5++2
:ACTS$
'rivate res!ondent Riviera ?ome 1m!rovements= 1nc& is enaed in the #"siness of sellin and
installin ornamental and constr"ction materials& 1t em!loyed !etitioners 9irilio Aa#on and
%enny Aa#on as y!s"m #oard and cornice installers& 'rivate res!ondents were terminated d"e
to a#andonment of wor;& 9irilio<s wae was ded"cted for SSS loan and the val"e of the shoes
from !etitioner 9irilio Aa#onNs )*th month !ay&
1SSU4$
>hether or not the em!loyer can ded"ct from its em!loyees< wae&
>ho will !rove !ayment of waesOem!loyee or em!loyer&
RUL1NG$
SC held em!loyers cannot ded"ct any amo"nt from the wae of its em!loyees witho"t their
consent& Under Article ))* of the La#or Code= em!loyers are !rohi#ited from ma;in any
ded"ctions
witho"t the em!loyeeNs ;nowlede and consent& 1n the instant case= !rivate res!ondent failed to
show that the ded"ction of the SSS loan and the val"e of the shoes from !etitioner 9irilio
Aa#onNs )*th month !ay was a"thori7ed #y the latter& The lac; of a"thority to ded"ct is f"rther
#olstered #y the fact that !etitioner 9irilio Aa#on incl"ded the same as one of his money
claims aainst !rivate res!ondent&
As a eneral r"le= one who !leads !ayment has the #"rden of !rovin it& 4ven where the
em!loyee m"st allee non8!ayment= the eneral r"le is that the #"rden rests on the em!loyer to
!rove !ayment= rather than on the em!loyee to !rove non8!ayment& The reason for the r"le is
that the !ertinent !ersonnel Gles= !ayrolls= records= remittances and other similar doc"ments S
which will show that overtime= diHerentials= service incentive leave and other claims of wor;ers
have #een !aid S are not in the !ossession of the wor;er #"t in the c"stody and a#sol"te control
of the em!loyer& 1n the case at #ar= if !rivate res!ondent indeed !aid !etitionersN holiday !ay and
service incentive leave !ay= it co"ld have easily !resented doc"mentary !roofs of s"ch monetary
#eneGts to dis!rove the claims of the !etitioners& B"t it did not= eAce!t with res!ect to the )*th
month !ay wherein it !resented cash vo"chers showin !ayments of the #eneGt in the years
dis!"ted&
A#erican 2ire 8 Cable &ail Ra"e! E#ploees vs. A#erican 2ire
G&R& No& )66+6(M A!ril 5(= 5++6
:ACTS$
American >ire and Ca#le Co&= 1nc&= is a cor!oration enaed in the man"fact"re of wires and
ca#les& There are two "nions in this com!any= the American >ire and Ca#le Monthly8Rated
4m!loyees Union -Monthly8Rated Union. and the American >ire and Ca#le Daily8Rated
4m!loyees Union -Daily8Rated Union.&
An oriinal action was Gled #efore the NCMB of the De!artment of La#or and 4m!loyment -DOL4.
#y the two "nions for vol"ntary ar#itration& They alleed that the !rivate res!ondent= witho"t
valid ca"se= s"ddenly and "nilaterally withdrew and denied certain #eneGts and entitlements
which they have lon enEoyed& These are service award= *6X !remi"m of an em!loyee<s #asic
!ay rendered d"rin s!ecial days= Christmas !arty and !romotional increase&
1SSU4$
>hether or not the #eneGtsJentitlements are in the nat"re of a #on"s= and ass"min they are so=
whether they are demanda#le and enforcea#le o#liations&
RUL1NG$
SC held that in order to resolve the iss"e& The said #eneGts m"st #e considered whether these
are considered P#on"sQ or not&
A #on"s is an act of enerosity ranted #y an enlihtened em!loyer to s!"r the em!loyee to
reater eHorts for the s"ccess of the #"siness and reali7ation of #ier !roGts& The rantin of a
#on"s is a manaement !reroative= somethin iven in addition to what is ordinarily received
#y or strictly d"e the reci!ient& Th"s= a #on"s is not a demanda#le and enforcea#le o#liation=
eAce!t when it is made !art of the wae= salary or com!ensation of the em!loyee&
Based on the foreoin !rono"ncement= it is o#vio"s that the #eneGtsJentitlements s"#Eects of
the instant case are all #on"ses which were iven #y the !rivate res!ondent o"t of its enerosity
and m"niGcence& The #eneGts iven are all in eAcess of what the law reD"ires each em!loyer to
ive its em!loyees& Since they are a#ove what is strictly d"e to the mem#ers of !etitioner8"nion=
the rantin of the same was a manaement !reroative= which= whenever manaement sees
necessary= may #e withdrawn= "nless they have #een made a !art of the wae or salary or
com!ensation of the em!loyees&
:or a #on"s to #e enforcea#le= it m"st have #een !romised #y the em!loyer and eA!ressly
areed "!on #y the !arties= or it m"st have had a GAed amo"nt and had #een a lon and re"lar
!ractice on the !art of the em!loyer& The #eneGtsJentitlements in D"estion were never s"#Eects
of any eA!ress areement #etween the !arties& They were never incor!orated in the Collective
Barainin Areement -CBA.&
5on!a Philippines vs. Sa#ahang Malaang Manggagawa sa 5on!a
G&R& No& )2660)M %"ne )6= 5++6
:ACTS$
The Collective Barainin Areement -CBA. of the !arties contains sti!"lation reardin )*th and
)2th month !ay& The CBA which contained s"ch sti!"lation is eHective "ntil 5+++& 1n the latter
!art of )((3= the !arties started neotiations for the 2th and 6th year of their CBA& ?owever=
eHorts failed which lead to the "nion<s s"#mission of a Notice of Stri;e on the ro"nd of
#arainin deadloc;& Thereafter= ?onda Gled a Notice of Loc;o"t& 1t so"ht the intervention of
Secretary of DOL4& The Secretary ordered the stri;in wor;ers to cease and desist from the stri;e
and to ret"rn #ac; to wor;& After the stri;e= the Manaement iss"ed a memorand"m statin that
the !ro8rated com!"tation of the #on"ses& 1ts new com!"tation of the )*th and )2th month !ay
to #e ranted to all its em!loyees where#y the thirty8one -*).8day lon stri;e shall #e considered
"nwor;ed days for !"r!oses of com!"tin said #eneGts& As !er the com!any<s new form"la= the
amo"nt eD"ivalent to )J)5 of the em!loyees< #asic salary shall #e ded"cted from these #on"ses=
with a commitment however that in the event that the stri;e is declared leal= ?onda shall !ay
the amo"nt ded"cted& Arieved= the "nion Gled a com!laint aainst ?onda&
1SSU4$
>hether the !ro8rated com!"tation of the )*th month !ay and the other #on"ses in D"estion is
valid and lawf"l&
RUL1NG$
1t is not valid and lawf"l #eca"se it violates Article )++ of the La#or Code& This Co"rt held that
the rant of these #eneGts has ri!ened into com!any !ractice or !olicy which cannot #e
!erem!torily withdrawn&
A c"rsory readin of the !rovisions will show that they did not state cateorically whether the
com!"tation of the )*th month !ay= )2th month !ay and the Gnancial assistance wo"ld #e #ased
on one f"ll month<s #asic salary of the em!loyees= or !ro8rated #ased on the com!ensation
act"ally received& The ar#itrator th"s !ro!erly resolved the am#i"ity in favor of la#or as
mandated #y Article ),+5 of the Civil Code& The Co"rt of A!!eals aIrmed the ar#itrator<s Gndin
and added that the com!"tation of the )*th month !ay sho"ld #e #ased on the lenth of service
and not on the act"al wae earned #y the wor;er&
Pro!ucers Ban* vs. NLRC
G&R& No& )++,+)M March 53= 5++)
:ACTS$
'rivate res!ondents chare !etitioners for dimin"tion of #eneGts= non8com!liance with >ae
Order No& 0 and non8!ayment of holiday !ay& 1t has #een !laced "nder conservatorshi! #y the
Central Ban; to recover to revitali7e from its nets losses& As a res"lt= there has #een a red"ction
andJor contin"ance of the said #eneGts to its em!loyers&
1SSU4$
>hether or not the removalJ and or discontin"ance of the #eneGts is E"stiGed and valid&
RUL1NG$
>ith reards the #on"ses iven to its em!loyees= SC r"led that the #an; is E"stiGed in
withdrawin the said #on"s& 1t ratiocinated that the #an; was not only eA!eriencin a decline in
its !roGts= #"t was reelin from tremendo"s losses triered #y a #an;8r"n which #ean in )(3*&
1n s"ch a de!ressed Gnancial condition= !etitioner cannot #e leally com!elled to contin"e
!ayin the same amo"nt of #on"ses to its em!loyees& Th"s= the conservator was E"stiGed in
red"cin the mid8year and Christmas #on"ses of !etitionerNs em!loyees& To hold otherwise wo"ld
#e to defeat the reason for the conservatorshi! which is to !reserve the assets and restore the
via#ility of the Gnancially !recario"s #an;& These #on"ses credited for the mid8year #on"s and
Christmas #on"s as !art of the )*th month !ay #y the #an; is E"stiGed&
1t is worth notin that a #on"s is an amo"nt ranted and !aid to an em!loyee for his ind"stry
and loyalty which contri#"ted to the s"ccess of the em!loyerNs #"siness and made !ossi#le the
reali7ation of !roGts& 1t is an act of enerosity ranted #y an enlihtened em!loyer to s!"r the
em!loyee to reater eHorts for the s"ccess of the #"siness and reali7ation of #ier !roGts& The
rantin of a #on"s is a manaement !reroative= somethin iven in addition to what is
ordinarily received #y or strictly d"e the reci!ient& Th"s= a #on"s is not a demanda#le and
enforcea#le o#liation= eAce!t when it is made !art of the wae= salary or com!ensation of the
em!loyee& ?owever= an em!loyer cannot #e forced to distri#"te #on"ses which it can no loner
aHord to !ay& To hold otherwise wo"ld #e to !enali7e the em!loyer for his !ast enerosity&
1ar!in vs. NLRC
G&R& No& ))(503M :e#r"ary 5*= 5+++
:ACTS$
'etitioners were drivers of !rivate res!ondent= 'hilEama 1nternational 1nc&= a domestic cor!oration
enaed in the o!eration of LGoodman TaAi&L 'etitioners "sed to drive !rivate res!ondentNs
taAica#s every other day on a 528ho"r wor; sched"le "nder the #o"ndary system& Under this
arranement= the !etitioners earned an averae of '2++&++ daily& Nevertheless= !rivate
res!ondent admittedly re"larly ded"cts from !etitioners= daily earnins the amo"nt of '*+&++
s"!!osedly for the washin of the taAi "nits& Believin that the ded"ction is illeal= !etitioners
decided to form a la#or "nion to !rotect their rihts and interests&
U!on learnin a#o"t the !lan of !etitioners= !rivate res!ondent ref"sed to let !etitioners drive
their taAica#s when they re!orted for wor; on A""st 0= )(()= and on s"cceedin days&
'etitioners s"s!ected that they were sinled o"t #eca"se they were the leaders and active
mem#ers of the !ro!osed "nion& Arieved= !etitioners Gled with the la#or ar#iter a com!laint
aainst !rivate res!ondent for "nfair la#or !ractice= illeal dismissal and illeal ded"ction of
washin fees&
1SSU4$
>hether or not the taAi drivers are considered em!loyees of the Goodman TaAi entitlin them to
f"ll #ac;waes&
RUL1NG$
SC r"led that the taAi drivers are em!loyees of the com!any& Th"s= they are entitled to f"ll
#ac;waes&
A!!lyin the 28fold test= the owner eAercised s"!ervision and control over drivers& The
manaement of the #"siness is in the ownerNs hands& ?ence= !etitioners are "ndo"#tedly
em!loyees of !rivate res!ondent #eca"se as taAi drivers they !erform activities which are
"s"ally necessary or desira#le in the "s"al #"siness or trade of their em!loyer& >ith reard to the
amo"nt ded"cted daily #y !rivate res!ondent from !etitioners for washin of the taAi "nits= we
view the same as not illeal in the conteAt of the law& >e note that after a to"r of d"ty= it is
inc"m#ent "!on the driver to restore the "nit he has driven to the same clean condition when he
too; it o"t& Car washin after a to"r of d"ty is indeed a !ractice in the taAi ind"stry and is in fact
dictated #y fair !lay& ?ence= the drivers are not entitled to reim#"rsement of washin chares&
Manila 1oc*e+s Club E#ploees Labor <nion vs. Manila 1oc*e Club
G&R& No& )0,0+)M March ,= 5++,
:ACTS$
'etitioner Manila %oc;ey Cl"# 4m!loyees La#or Union8'TG>O and res!ondent Manila %oc;ey Cl"#=
1nc&= a cor!oration with a leislative franchise to cond"ct= o!erate and maintain horse races=
entered into a Collective Barainin Areement -CBA.& The CBA overned the economic rihts
and o#liations of res!ondent<s re"lar monthly !aid ran;8and8Gle em!loyees& 1n the CBA= the
!arties areed to a ,8ho"r wor; sched"le from ($++ a&m& to )5$++ noon and from )$++ !&m& to
6$++ !&m& on a wor; wee; of Monday to Sat"rday= as contained "nder Section )= Article 19= of the
same CBA& All wor; !erformed in eAcess of seven -,. ho"rs wor; sched"le and on days not
incl"ded within the wor; wee; shall #e considered overtime and !aid as s"ch& 4Ace!t those
monthly com!ensation which incl"des wor;s !erformed d"rin Sat"rday= S"nday= and ?oliday
when races are held at the Cl"#& An inter8oIce memorand"m was iss"ed declarin that the
ho"rs of wor; of re"lar monthly8!aid em!loyees shall #e from )$++ !&m& to 3$++ !&m& when
horse races are held= that is= every T"esday and Th"rsday& The memorand"m= however=
maintained the ($++ a&m& to 6$++ !&m& sched"le for non8race days& 'etitioners D"estioned the
a#ove oIce memorand"m as violative of the !rohi#ition aainst non8dimin"tion of waes and
#eneGts "aranteed the CBA which s!eciGed the wor; sched"le of res!ondentNs em!loyees to #e
from ($++ a&m& to 6$++ !&m& 'etitioner claimed that as a res"lt of the memorand"m= the
em!loyees are !recl"ded from renderin their "s"al overtime wor; from 6$++ !&m& to ($++ !&m&
1SSU4$
>hether or not the chane in the wor; sched"le violated Article )++ of the La#or Code on the
non8dimin"tion of waes and #eneGts "aranteed "nder the !arties< CBA&
RUL1NG$
SC held in favor of Manila %oc;ey Cl"#& 1t stated that the wor; sched"le is E"stiGed= it #ein a
manaement !reroative&
Res!ondent= as em!loyer= cites the chane in the !roram of horse races as reason for the
adE"stment of the em!loyees< wor; sched"le& 1t rationali7es that when the CBA was sined= the
horse races started at )+$++ a&m& >hen the races were moved to 5$++ !&m&= there was no other
choice for manaement #"t to chane the em!loyeesN wor; sched"le as there was no wor; to #e
done in the mornin& 4vidently= the adE"stment in the wor; sched"le of the em!loyees is
E"stiGed& >hile it is tr"e that Section )= Article 19 of the CBA !rovides for a ,8ho"r wor; sched"le
from ($++ a&m& to )5$++ noon and from )$++ !&m& to 6$++ !&m& from Mondays to Sat"rdays=
Section 5= Article ]1= however= eA!ressly reserves on res!ondent the !reroative to chane
eAistin methods or facilities to chane the sched"les of wor;&
Manila %oc;ey Cl"# was not o#lied to allow all its em!loyees to render overtime wor; everyday
for the whole year= #"t only those em!loyees whose services were needed after their re"lar
wor;in ho"rs and only "!on the instr"ctions of manaement& The overtime !ay was not iven to
each em!loyee consistently= deli#erately and "nconditionally= #"t as a com!ensation for
additional services rendered& Th"s= overtime !ay does not fall within the deGnition of #eneGts
"nder Article )++ of the La#or Code on !rohi#ition aainst elimination or dimin"tion of #eneGts&
San Miguel Corp. e". al vs. Laoc 1r. e". al.
G&R& No& )2(02+M Octo#er )(= 5++,
:ACTS$
Res!ondents were amon the PS"!ervisory Sec"rity G"ardsQ of the Beer Division of the San
Mi"el Cor!oration& :rom the commencement of their em!loyment= the !rivate res!ondents were
reD"ired to !"nch their time cards for !"r!oses of determinin the time they wo"ld come in and
o"t of the com!any<s wor; !lace& As s"ch= the !rivate res!ondents were availin the #eneGts for
overtime= holiday and niht !remi"m d"ty thro"h time card !"nchin& ?owever= in the early
)((+<s= the San Mi"el Cor!oration em#ar;ed on a Decentrali7ation 'roram& The Beer Division
of the San Mi"el Cor!oration im!lemented Pno time card !olicyQ where#y the s"!ervisin
sec"rity "ards of the Beer Division were no loner reD"ired to !"nch their time cards& ?owever=
in lie" of the overtime !ay and the !remi"m !ay= the !ersonnel of the Beer Division of the
!etitioner San Mi"el Cor!oration aHected #y the PNo Time Card 'olicyQ were iven a )+X
across8the8#oard increase on their #asic !ay while the s"!ervisors who were assined in the
niht shift -0$++ !&m& to 0$++ a&m&. were iven niht shift allowance ranin from '5=+++&++ to
'5=6++&++ a month& Arieved= res!ondents Gled a com!laint for "nfair la#or !ractice= violation
of Article )++ of the La#or Code of the 'hili!!ines= and violation of the eD"al !rotection cla"se
and d"e !rocess of law in relation to !arara!hs 0 and 3 of Article *5 of the New Civil Code of
the 'hili!!ines&
1SSU4$
>hether or not the PNo Time Card 'olicyQ constit"tes a violation of Article )++ of the La#or Code&
RUL1NG$
SC r"led in favor of the !etitioners& 'etitioners eAercised manaement !reroative in the
im!lementation of the PNo Time Card 'olicyQ&
As a eneral r"le= manaerial em!loyees are not entitled to overtime !ay for services rendered
in eAcess of eiht ho"rs a day& Res!ondents failed to show that the circ"mstances of the !resent
case constit"te an eAce!tion to this eneral r"le&
Res!ondents assert that Article )++ of the La#or Code !rohi#its the elimination or dimin"tion of
#eneGts& ?owever= contrary to the nat"re of #eneGts= !etitioners did not freely ive the !ayment
for overtime wor; to res!ondents& 'etitioners !aid res!ondents overtime !ay as com!ensation
for services rendered in addition to the re"lar wor; ho"rs& Res!ondents rendered overtime
wor; only when their services were needed after their re"lar wor;in ho"rs and only "!on the
instr"ctions of their s"!eriors& Res!ondents even diHer as to the amo"nt of overtime !ay
received on acco"nt of the diHerence in the additional ho"rs of services rendered&
Aside from their alleations= res!ondents were not a#le to !resent anythin to !rove that
!etitioners were o#lied to !ermit res!ondents to render overtime wor; and ive them the
corres!ondin overtime !ay& 4ven if !etitioners did not instit"te a Pno time card !olicy=Q
res!ondents co"ld not demand overtime !ay from !etitioners if res!ondents did not render
overtime wor;& The reD"irement of renderin additional service diHerentiates overtime !ay from
#eneGts s"ch as thirteenth month !ay or yearly merit increase& These #eneGts do not reD"ire any
additional service from their #eneGciaries& Th"s= overtime !ay does not fall within the deGnition
of #eneGts "nder Article )++ of the La#or Code&
San Miguel Corp. vs. Pon"illas
G&R& No& )66),3M May ,= 5++3
:ACTS$
San Mi"el Cor!oration -!etitioner. em!loyed Anel C& 'ontillas -res!ondent. as a daily wae
com!any "ard& 1n )(32= res!ondent #ecame a monthly8!aid em!loyee which entitled him to
yearly increases in salary& Res!ondent alleed that his yearly salary increases were only a
!ercentae of what the other sec"rity "ards received& On )( Octo#er )((*= res!ondent Gled an
action for recovery of damaes d"e to discrimination "nder Article )++ of the La#or Code of the
'hili!!ines -La#or Code.= as amended= as well as for recovery of salary diHerential and
#ac;waes& 'endin the com!laint of herein !etitioner= a memorand"m was sent o"t #y the
Manaement statin that there will #e a transfer from Oro9erde >areho"se= where res!ondent is
stationed= to 9isMin Loistics O!erations& Claimin that he is waitin for the directive of his
s"!ervisor= res!ondent contin"ed re!ortin in the Oro9erde >areho"se& :or alleed
ins"#ordination of the order= res!ondent was terminated& Th"s= he Gled an amended com!laint&
1SSU4$
>hether or not the directive of transfer was valid and reasona#le&
RUL1NG$
SC held that the !etitioner eAercised manaement !reroative in its directive of transfer from the
Oro9erde >areho"se to 9isMin Loistics O!eration&
The em!loyer eAercises the !reroative to transfer an em!loyee for valid reasons and accordin
to the reD"irements of its #"siness= !rovided the transfer does not res"lt in demotion in ran; or
dimin"tion of the em!loyee<s salary= #eneGts= and other !rivilees& 1n this case= we fo"nd that
the order of transfer was reasona#le and lawf"l considerin the interation of Oro 9erde
>areho"se with 9isMin Loistics O!erations& Res!ondent was !ro!erly informed of the transfer
#"t he ref"sed to receive the notices on the !reteAt that he was wary #eca"se of his !endin
case aainst !etitioner& Res!ondent failed to !rove that !etitioner was actin in #ad faith in
eHectin the transfer& There was no demotion involved= or even a dimin"tion of his salary=
#eneGts= and other !rivilees& Res!ondent<s !ersistent ref"sal to o#ey !etitioner<s lawf"l order
amo"nts to willf"l diso#edience "nder Article 535 of the La#or Code&
Arco Me"al Pro!uc"s vs. Sa#ahan ng Manggagawa sa Arco%Me"al%NA(L<
G&R& No& ),+,*2M May )2= 5++3
:ACTS$
'etitioner is a com!any enaed in the man"fact"re of metal !rod"cts= whereas res!ondent is
the la#or "nion of !etitioner<s ran; and Gle em!loyees& Sometime in Decem#er 5++*= !etitioner
!aid the )*th month !ay= #on"s= and leave encashment of three "nion mem#ers in amo"nts
!ro!ortional to the service they act"ally rendered in a year= which is less than a f"ll twelve -)5.
months& Res!ondent !rotested the !rorated scheme= claimin that on several occasions
!etitioner did not !rorate the !ayment of the same #eneGts to seven -,. em!loyees who had not
served for the f"ll )5 months& Accordin to res!ondent= the !rorated !ayment violates the r"le
aainst dimin"tion of #eneGts "nder Article )++ of the La#or Code& Th"s= they Gled a com!laint
#efore the National Conciliation and Mediation Board -NCMB.& The !arties s"#mitted the case for
vol"ntary ar#itration&
1SSU4$
>hether or not the !rorated !ayment of the #eneGts constit"te a violation "nder Art& )++ of the
La#or Code&
RUL1NG$
SC r"led in favor of the res!ondents& The vol"ntary rant of the #eneGts has #een an esta#lished
com!any !ractice& 1t has #een a com!any !ractice which rants f"ll #eneGts to its em!loyees
reardless of the lenth of service rendered&
There is no do"#t that in order to #e entitled to the f"ll moneti7ation of siAteen -)0. days of
vacation and sic; leave= one m"st have rendered at least one year of service& The clear wordin
of the !rovisions does not allow any other inter!retation& Anent the )*th month !ay and #on"s=
we aree with the Gndins of La#or Ar#iter Mana#at that the CBA !rovisions did not ive any
meanin diHerent from that iven #y the law= th"s it sho"ld #e com!"ted at )J)5 of the total
com!ensation which an em!loyee receives for the whole calendar year& The #on"s is also
eD"ivalent to the amo"nt of the )*th month !ay iven= or in !ro!ortion to the act"al service
rendered #y an em!loyee within the year&
Any #eneGt and s"!!lement #ein enEoyed #y em!loyees cannot #e red"ced= diminished=
discontin"ed or eliminated #y the em!loyer& The !rinci!le of non8dimin"tion of #eneGts is
fo"nded on the Constit"tional mandate to L!rotect the rihts of wor;ers and !romote their
welfare=Q and Pto aHord la#or f"ll !rotection&Q Said mandate in t"rn is the #asis of Article 2 of the
La#or Code which states that Pall do"#ts in the im!lementation and inter!retation of this Code=
incl"din its im!lementin r"les and re"lations shall #e rendered in favor of la#or&Q
%"ris!r"dence is re!lete with cases which reconi7e the riht of em!loyees to #eneGts which
were vol"ntarily iven #y the em!loyer and which ri!ened into com!any !ractice& Th"s in Davao
:r"its Cor!oration v& Associated La#or Unions= et al& where an em!loyer had freely and
contin"o"sly incl"ded in the com!"tation of the )*th month !ay those items that were eA!ressly
eAcl"ded #y the law= we held that the act which was favora#le to the em!loyees tho"h not
conformin to law had th"s ri!ened into a !ractice and co"ld not #e withdrawn= red"ced=
diminished= discontin"ed or eliminated& 1n Sevilla Tradin Com!any v& Semana= we r"led that
the em!loyer<s act of incl"din non8#asic #eneGts in the com!"tation of the )*th month !ay was
a vol"ntary act and had ri!ened into a com!any !ractice which cannot #e !erem!torily
withdrawn& Meanwhile in Davao 1nterated 'ort Stevedorin Services v& A#arD"e7= the Co"rt
ordered the !ayment of the cash eD"ivalent of the "nenEoyed sic; leave #eneGts to its
intermittent wor;ers after Gndin that said wor;ers had received these #eneGts for almost fo"r
years "ntil the rant was sto!!ed d"e to a diHerent inter!retation of the CBA !rovisions& >e held
that the em!loyer cannot "nilaterally withdraw the eAistin !rivilee of comm"tation or
conversion to cash iven to said wor;ers= and as also noted that the em!loyer had in fact
ranted and !aid said cash eD"ivalent of the "nenEoyed !ortion of the sic; leave #eneGts to
some intermittent wor;ers&
Aguan$a vs. Asian )er#inal Inc.
GR No& )0*6+6 A""st )2= 5++(
:ACTS$
'etitioner G"al#erto A"an7a was em!loyed with res!ondent com!any Asian Terminal= 1nc& from
A!ril )6= )(3( to Octo#er )((,& ?e was initially em!loyed as Deric;man or Crane O!erator and
was assined as s"ch a#oard Bismar; 19= a Toatin crane #are owned #y Asian Terminals= 1nc&
#ased at the !ort of Manila& Aside from his #asic !ay= he received meal allowance= GAed overtime
!ay and o"t8of !ort allowance Vwhen the #are is assined o"tside Metro ManilaW&
Sometime in Se!tem#er )((,= the Bismar; 19= toether with its crew= was tem!orarily assined
at the Mariveles Grains Terminal in Mariveles= Bataan& Then= on Octo#er 5+= )((,= res!ondent
%ames Keith iss"ed a memo to the crew of Bismar; 19 statin that the #are had #een
!ermanently transferred to the Mariveles Grains terminal #einnin Octo#er )= )((, and
#eca"se of that= its crew wo"ld no loner #e entitled to o"t of !ort #eneGts of )0 ho"rs overtime
and '5++ a day o"t8of !ort allowance&
Beca"se of the said develo!ment= A"an7a D"estioned the dimin"tion of his #eneGts& A"an7a
insisted on re!ortin to wor; in Manila altho"h his #are= Bismar; 19= and its other crew were
already !ermanently #ased in Mariveles= Bataan& VA"an7aW was not allowed to time in in Manila
#eca"se his wor; was in Mariveles= Bataan& ?e therefore was not a#le to render his services= and
was accordinly not !aid for doin nothin&
1SSU4$
>as A"an7a constr"ctively dismissedZ
RUL1NG$
No& The transfer of o!erations is a valid eAercise of manaement !reroative& A"an7a asserts
that his transfer constit"ted constr"ctive dismissal= while AT1 asserts that A"an7a<s transfer was
a valid eAercise of manaement !reroative&
AT1<s transfer of Bismar; 19<s #ase from Manila to Bataan was= contrary to A"an7a<s assertions=
a valid eAercise of manaement !reroative& The transfer of em!loyees has #een traditionally
amon the acts identiGed as a manaement !reroative s"#Eect only to limitations fo"nd in law=
collective #arainin areement= and eneral !rinci!les of fair !lay and E"stice& 4ven as the law
is solicito"s of the welfare of em!loyees= it m"st also !rotect the riht of an em!loyer to eAercise
what are clearly manaement !reroatives& The free will of manaement to cond"ct its own
#"siness aHairs to achieve its !"r!ose cannot #e denied&
On the other hand= the transfer of an em!loyee may constit"te constr"ctive dismissal Lwhen
contin"ed em!loyment is rendered im!ossi#le= "nreasona#le or "nli;elyM when there is a
demotion in ran; andJor a dimin"tion in !ayM or when a clear discrimination= insensi#ility or
disdain #y an em!loyer #ecomes "n#eara#le to the em!loyee&L A"an7a<s sit"ation is not within
the !"rview of this disc"ssion&
Genesis )ranspor" Service Inc. vs. <non ng Mala"ang Manggagwa ng Genesis
)ranspor"
GR No& )35))2M A!ril 6= 5+)+
:ACTS$
Res!ondent %"an Taroy was hired #y !etitioner Genesis Trans!ort Service= 1nc& -Genesis Trans!ort.
as driver on commission #asis at (X of the ross reven"e !er tri!&
On May )+= 5++5= Taroy was= after d"e notice and hearin= terminated from em!loyment after an
accident on A!ril 5+= 5++5 where he was deemed to have #een drivin rec;lessly&
Taroy th"s Gled a com!laint for illeal dismissal and !ayment of service incentive leave !ay=
claimin that he was sinled o"t for termination #eca"se of his "nion activities= other drivers who
had met accidents not havin #een dismissed from em!loyment& Taroy later amended his
com!laint to im!lead his herein co8res!ondent Unyon n Malayan Manaawa n Genesis
Trans!ort -the "nion. as com!lainant and add as ro"nds of his ca"se of action "nfair la#or
!ractice -UL'.= reim#"rsement of illeal ded"ctions on tollate fees= and !ayment of service
incentive leave !ay&
Res!ectin the claim for ref"nd of illeal ded"ctions= Taroy alleed that in )((,= !etitioner
started ded"ctin from his wee;ly earnins an amo"nt ranin from ')0+ to '(++ re!resentin
toll fees= witho"t his consent and written a"thori7ation as reD"ired "nder Article ))* of the La#or
Code and contrary to com!any !racticeM and that ded"ctions were also ta;en from the #"s
cond"ctor<s earnins to th"s res"lt to do"#le ded"ction&
Genesis Trans!ort co"ntered that Taroy committed several violations of com!any r"les for which
he was iven warnins or disci!lined accordinlyM that those violations= the last of which was the
A!ril 5+= 5++5 incident= incl"ded !oor drivin s;ills= tardiness= am#lin inside the !remises= "se
of sha#"= smo;in while drivin= ins"#ordination and rec;less drivinM and that Taroy<s dismissal
was on a valid ca"se and after aHordin him d"e !rocess&
The La#or Ar#iter rendered dismissin instant com!laint for illeal dismissal for lac; of merit and
was ordered to ref"nd to com!lainant the "nder!aymentJdiHerential d"e him as a res"lt of the
ded"ction of the tollate fees from the ross recei!ts& The NLRC aIrmed the La#or Ar#iter<s
decision with modiGcation& 1t deleted the award to Taroy of attorney<s fees&
The res!ondent challened the decision on the CA D"estionin the La#or Ar#iter<s fail"re to !ass
on the !ro!riety of his !reventive s"s!ension= dismissal of his com!laint for constr"ctive
dismissal and UL'= and fail"re to award him service incentive leave !ay& The !etitioners
D"estioned the order for them to ref"nd L"nder!aymentL and !ay attorney<s fees&
1SSU4$
>hether or not the res!ondent is entitled for a ref"nd P"nder!aymentQ for the toll fees ded"cted
from his wee;ly earnins&
>hether or not the iss"e of !reventive s"s!ension violated Taroy<s riht to d"e !rocess&
RUL1NG$
The S"!reme Co"rt aIrmed CA decision with the ref"nd of "nder!ayment with the modiGcation
that the award of nominal damaes to res!ondent %"an Taroy is deleted&
:irst 1ss"e$
The Co"rt ta;e E"dicial notice of !etitioners< claim that the ded"ction of tollate fees from the
ross earnins of drivers is an acce!ted and lon8standin !ractice in the trans!ortation ind"stry&
4A!ertravel @ To"rs= 1nc& v& Co"rt of A!!eals instr"cts$
Generally s!ea;in= matters of E"dicial notice have three material reD"isites$ -). the matter m"st
#e one of common and eneral ;nowledeM -5. it m"st #e well and a"thoritatively settled and not
do"#tf"l or "ncertainM and -*. it m"st #e ;nown to #e within the limits of the E"risdiction of the
co"rt& The !rinci!al "ide in determinin what facts may #e ass"med to #e E"dicially ;nown is
that of notoriety& ?ence= it can #e said that E"dicial notice is limited to facts evidenced #y !"#lic
records and facts of eneral notoriety& Moreover= a E"dicially noticed fact m"st #e one not s"#Eect
to a reasona#le dis!"te in that it is either$ -). enerally ;nown within the territorial E"risdiction of
the trial co"rtM or -5. ca!a#le of acc"rate and ready determination #y resortin to so"rces whose
acc"racy cannot reasona#ly #e D"estiona#le&
None of the material reD"isites for the Co"rt to ta;e E"dicial notice of a !artic"lar matter was
esta#lished #y !etitioners&
Al#eit the amo"nts re!resentin tollate fees were ded"cted from ross reven"es and not
directly from Taroy<s commissions= the la#or tri#"nal and the a!!ellate co"rt correctly held that
the withholdin of those amo"nts red"ced the amo"nt from which Taroy<s (X commission wo"ld
#e com!"ted& S"ch a com!"tation not only mar;s a chane in the method of !ayment of waes=
res"ltin in a dimin"tion of Taroy<s waes in violation of Article ))* vis8b8vis Article )++ of the
La#or Code= as amended& 1t need not #e "nderlined that witho"t Taroy<s written consent or
a"thori7ation= the ded"ction is considered illeal&
The invocation of the r"le on Lcom!any !racticeL is enerally "sed with res!ect to the rant of
additional #eneGts to em!loyees= not on iss"es involvin dimin"tion of #eneGts&
Second 1ss"e$
Res!ectin the iss"e of stat"tory d"e !rocess= the Co"rt holds that Taroy<s riht thereto was not
violated&
1n any event= what the R"les reD"ire is that the em!loyer act on the s"s!ended wor;er<s stat"s of
em!loyment within the *+8day !eriod #y concl"din the investiation either #y a#solvin him of
the chares= or metin the corres!ondin !enalty if lia#le= or "ltimately dismissin him& 1f the
s"s!ension eAceeds the *+8day !eriod witho"t any corres!ondin action on the !art of the
em!loyer= the em!loyer m"st reinstate the em!loyee or eAtend the !eriod of s"s!ension=
!rovided the em!loyee<s waes and #eneGts are !aid in the interim&
1n the !resent case= !etitioner com!any had "ntil May 5+= 5++5 to act on Taroy<s case& 1t did #y
terminatin him thro"h a notice dated May )+= 5++5= hence= the *+8day reD"irement was not
violated even if the termination notice was received only on %"ne 2= 5++5= a#sent any showin
that the delayed service of the notice on Taroy was attri#"ta#le to Genesis Trans!ort&
Taroy<s stat"tory d"e !rocess not havin #een violated= he is not entitled to the award of nominal
damaes&
Cen"ral A$ucarera !e )arlac vs. Cen"ral A$ucarera !e )arlac Labor <nion%NL<
G&R& No& )33(2(M %"ly 50= 5+)+
:ACTS$
The facts of this case are not in dis!"te& 1n com!liance with 'residential Decree -'&D&. No& 36)=
!etitioner ranted its em!loyees the mandatory thirteenth -)*th. 8 month !ay since )(,6& The
form"la "sed #y !etitioner in com!"tin the )*th8month !ay was$ Total Basic Ann"al Salary
divided #y twelve -)5.& 1ncl"ded in !etitioner<s com!"tation of the Total Basic Ann"al Salary were
the followin$ #asic monthly salaryM Grst eiht -3. ho"rs overtime !ay on S"nday and
lealJs!ecial holidayM niht !remi"m !ayM and vacation and sic; leaves for each year& Thro"ho"t
the years= !etitioner "sed this com!"tation "ntil 5++0&
1SSU4$
>ON the !etitioner<s com!"tation of the )*th Month 'ay "se for almost thirty -*+. years has
ri!ened into a com!any !olicy or !ractice&
RUL1NG$
The )*th8month !ay mandated #y 'residential Decree -'&D&. No& 36) re!resents an additional
income #ased on wae #"t not !art of the wae& 1t is eD"ivalent to one8twelfth -)J)5. of the total
#asic salary earned #y an em!loyee within a calendar year& All ran;8and8Gle em!loyees=
reardless of their desination or em!loyment stat"s and irres!ective of the method #y which
their waes are !aid= are entitled to this #eneGt= !rovided that they have wor;ed for at least one
month d"rin the calendar year& 1f the em!loyee wor;ed for only a !ortion of the year= the )*th8
month !ay is com!"ted !ro rata&
A A A the !ractice of !etitioner in ivin )*th8month !ay #ased on the em!loyees< ross ann"al
earnins which incl"ded the #asic monthly salary= !remi"m !ay for wor; on rest days and s!ecial
holidays= niht shift diHerential !ay and holiday !ay contin"ed for almost thirty -*+. years and
has ri!ened into a com!any !olicy or !ractice which cannot #e "nilaterally withdrawn&
S5S Perfora"e! Ma"erials Inc. e". al vs. &ia$
GR No& )363)2 Oct& )*= 5+)+
:ACTS$
Man"el :& Dia7 -res!ondent. was hired #y !etitioner S?S as Manaer for B"siness Develo!ment
on !ro#ationary stat"s from %"ly )3= 5++6 to %an"ary )3= 5++0= with a monthly salary of
')++=+++&++& Res!ondents d"ties= res!onsi#ilities= and wor; ho"rs were descri#ed in the
Contract of 'ro#ationary 4m!loyment& D"rin meetins with the res!ondent= ?artmannshenn
eA!ressed his dissatisfaction over res!ondents !oor !erformance& Res!ondent alleedly failed to
ma;e any concrete #"siness !ro!osal or im!lement any s!eciGc meas"re to im!rove the
!rod"ctivity of the S?S oIce and !lant or deliver sales eAce!t for a meare '5=6++&++ for a
sam!le !rod"ct& 1n n"mero"s electronic mail messaes= res!ondent ac;nowleded his !oor
!erformance and oHered to resin from the com!any&
On Novem#er 5(= 5++6= ?artmannshenn instr"cted Ta"ian not to release res!ondents salary&
Later that afternoon= res!ondent called and inD"ired a#o"t his salary& Ta"ian informed him that
it was #ein withheld and that he had to immediately comm"nicate with ?artmannshenn& Aain=
res!ondent denied havin received s"ch directive&
The neAt day= on Novem#er *+= 5++6= res!ondent served on S?S a demand letter and a
resination letter&
On Decem#er (= 5++6= res!ondent Gled a Com!laint aainst the !etitioners for illeal dismissalM
non8!ayment of salariesJwaes and )*th month !ay with !rayer for reinstatement and f"ll
#ac;waesM eAem!lary damaes= and attorneys fees= costs of s"it= and leal interest& The La#or
Ar#iter and the CA= on a!!eal= rendered a decision in favo"r of the res!ondent& ?ence= this
!etition&
1SSU4$
>ON the CA erred in aIrmin the La#or Ar#iter<s Gndin that res!ondent had #een
constr"ctively dismissed&
RUL1NG$
'etitioners contend that res!ondent co"ld not have #een constr"ctively dismissed #eca"se he
vol"ntarily resined as evidenced #y his resination letter& They assert that res!ondent was not
forced to draft the letter and his intention to resin is clear from the contents and terms "sed=
and that iven res!ondents !rofessional and ed"cational #ac;ro"nd= he was f"lly aware of the
im!ort and conseD"ences of the said letter& They maintain that res!ondent resined to save face
and avoid disci!linary meas"res d"e to his alleedly dismal wor; !erformance and fail"re to
re!ort to wor;&
The Co"rt= however= arees with the LA and the CA that res!ondent was forced to resin and
was= th"s= constr"ctively dismissed& 1n D"ld"lao v& Co"rt of A!!eals= it was written$
There is constr"ctive dismissal if an act of clear discrimination= insensi#ility= or disdain #y an
em!loyer #ecomes so "n#eara#le on the !art of the em!loyee that it wo"ld foreclose any choice
#y him eAce!t to foreo his contin"ed em!loyment& 1t eAists where there is cessation of wor;
#eca"se contin"ed em!loyment is rendered im!ossi#le= "nreasona#le or "nli;ely= as an oHer
involvin a demotion in ran; and a dimin"tion in !ay&
NiJa 1ewelr Manufac"uring 6f Me"al Ar"s, Inc. An! Elisea B. Abella, 's. Ma!eline C.
Mon"ecillo An! Li$a M. )rini!a!,
G&R& No& )33)0(= Novem#er 53= 5+))
:ACTS$
On A""st )*= 5++2= NiFa %ewelry im!osed a !olicy for oldsmiths reD"irin them to !ost cash
#onds or de!osits in varyin amo"nts #"t in no case eAceedin )6X of the latterNs salaries !er
wee;& The de!osits were intended to answer for any loss or damae which NiFa %ewelry may
s"stain #y reason of the oldsmithsN fa"lt or nelience in handlin the old entr"sted to them&
The de!osits shall #e ret"rned "!on com!letion of the oldsmithsN wor; and after an acco"ntin
of the old received&
Said res!ondents deGed same !olicy and were considered constr"ctively dismissed #y the
com!any= who only alleed that they sto!!ed re!ortin to wor;& Res!ondents then Gled
com!laint #"t same was dismissed #y the La#or Ar#iter= only awardin them their )*th month
!ay& They then elevated their com!laint to the NLCR min"s the already8won )*th month !ay&
A!!lyin Article ))* and ))2 of the La#or Code= the CA r"led in favor and awardin res!ondents&
?ence this !etition for review
1SSU4S$
>hether or not R"le 06 'etition for Certiorari was the !ro!er remedy&
>hether or not the CA acted with rave a#"se of discretion when it r"led that there was indeed
constr"ctive dismissal and orderin the Res!ondent<s reinstatement and #ac; waes and other
monetary #eneGts witho"t fact"al or leal #ases&
>hether or not the reD"irement of !ostin cash #onds or have the same ded"cted from the
wor;er<s salaries is !ro!er&
RUL1NG$
NO& R"le 26 limits "s to the review of D"estions of law raised aainst the assailed CA decision& 1n
r"lin for leal correctness= we have to view the CA decision in the same conteAt that the !etition
for certiorari it r"led "!on was !resented to itM we have to eAamine the CA decision from the
!rism of whether it correctly determined the !resence or a#sence of rave a#"se of discretion in
the NLRC decision #efore it= not on the #asis of whether the NLRC decision on the merits of the
case was correct& 1n other words= we have to #e ;eenly aware that the CA "ndertoo; a R"le 06
review= not a review on a!!eal= of the NLRC decision challened #efore it& This is the a!!roach
that sho"ld #e #asic in a R"le 26 review of a CA r"lin in a la#or case& 1n D"estion form= the
D"estion to as; is$ Did the CA correctly determine whether the NLRC committed rave a#"se of
discretion in r"lin on the caseZ
1n certiorari !roceedins "nder R"le 06 of the R"les of Co"rt= the a!!ellate co"rt does not assess
and weih the s"Iciency of evidence "!on which the La#or Ar#iter and the NLRC #ased their
concl"sion& The D"ery in this !roceedin is limited to the determination of whether or not the
NLRC acted witho"t or in eAcess of its E"risdiction or with rave a#"se of discretion in renderin
its decision& ?owever= as an eAce!tion= the a!!ellate co"rt may eAamine and meas"re the
fact"al Gndins of the NLRC if the same are not s"!!orted #y s"#stantial evidence&
B4S& Constr"ctive dismissal occ"rs when there is cessation of wor; #eca"se contin"ed
em!loyment is rendered im!ossi#le= "nreasona#le or "nli;elyM when there is a demotion in ran;
or dimin"tion in !ay or #othM or when a clear discrimination= insensi#ility= or disdain #y an
em!loyer #ecomes "n#eara#le to the em!loyee&
1n the case now "nder o"r consideration= the !etitioners did not whimsically or ar#itrarily im!ose
the !olicy to !ost cash #onds or ma;e ded"ctions from the wor;ersN salaries& As attested to #y
the res!ondentsN fellow oldsmiths in their %oint AIdavit= the wor;ers were convened and
informed of the reason #ehind the im!lementation of the new !olicy& 1nstead of airin their
concerns= the res!ondents E"st !rom!tly sto!!ed re!ortin for wor;&
Altho"h the !ro!riety of reD"irin cash #onds seems do"#tf"l for reasons to #e disc"ssed
here"nder= we Gnd no ro"nds to hold that the res!ondents were dismissed eA!ressly or even
constr"ctively #y the !etitioners& 1t was the res!ondents who merely sto!!ed re!ortin for wor;&
>hile it is conceded that the new !olicy will im!ose an additional #"rden on the !art of the
res!ondents= it was not intended to res"lt in their demotion& Neither is a dimin"tion in !ay
intended #eca"se as lon as the wor;ers o#serve d"e dilience in the !erformance of their tas;s=
no loss or damae shall res"lt from their handlin of the old entr"sted to them= hence= all the
amo"nts d"e to the oldsmiths shall still #e !aid in f"ll& :"rther= the im!osition of the new !olicy
cannot #e viewed as an act tantamo"nt to discrimination= insensi#ility or disdain aainst the
res!ondents& :or one= the !olicy was intended to #e im!lemented "!on all the oldsmiths in NiFa
%ewelryNs em!loy and not solely "!on the res!ondents& Besides= as stressed #y the !etitioners=
the new !olicy was intended to merely c"r# the incidences of old theft in the wor; !lace& The
new !olicy can hardly #e said to #e disdainf"l or insensi#le to the wor;ers as to render their
contin"ed em!loyment "nreasona#le= "nli;ely or im!ossi#le&
NO& >hile em!loyers sho"ld enerally #e iven leeways in their eAercise of manaement
!reroatives= we aree with the res!ondents and the CA that in the case at #ar= the !etitioners
had failed to !rove that their im!osition of the new !olicy "!on the oldsmiths "nder NiFa
%ewelryNs em!loy falls "nder the eAce!tions s!eciGed in Articles ))* and ))2 of the La#or Code&
>hile the !etitioners are not a#sol"tely !recl"ded from im!osin the new !olicy= they can only
do so "!on com!liance with the reD"irements of the law& 1n other words= the !etitioners sho"ld
Grst esta#lish that the ma;in of ded"ctions from the salaries is a"thori7ed #y law= or re"lations
iss"ed #y the Secretary of La#or& :"rther= the !ostin of cash #onds sho"ld #e !roven as a
reconi7ed !ractice in the Eewelry man"fact"rin #"siness= or alternatively= the !etitioners
sho"ld see; for the determination #y the Secretary of La#or thro"h the iss"ance of a!!ro!riate
r"les and re"lations that the !olicy the former see;s to im!lement is necessary or desira#le in
the cond"ct of #"siness& The !etitioners failed in this res!ect& 1t #ears stressin that witho"t
!roofs that reD"irin de!osits and eHectin ded"ctions are reconi7ed !ractices= or witho"t
sec"rin the Secretary of La#orNs determination of the necessity or desira#ility of the same= the
im!osition of new !olicies relative to ded"ctions and de!osits can #e made s"#Eect to a#"se #y
the em!loyers& This is not what the law intends&
Locsin II vs. Me*eni (oo! Corp., GR No. >@.>/A, &ece#ber @, ./>B
(AC)S
'etitioner Antonio Locsin 11 was the Reional Sales Manaer of res!ondent Me;eni :ood
Cor!oration& ?e was hired on :e#r"ary 5++2 to oversee the NCR and L"7on o!eration& 1n addition
to his com!ensation and #eneGt !ac;ae= a car was oHered to him "nder which one8half of the
cost of the vehicle is to #e !aid #y the com!any and the other half to #e ded"cted from
!etitionerNs salary& The car val"ed at 53+=+++ which Locsin !aid thro"h salary ded"ctions of
6=+++ !er month&
On :e#r"ary 5++0= Locsin resined& A total of ))5=6++&++ had already #een ded"cted from his
monthly salary and a!!lied as !art of his share in the car !lan& U!on resination= !etitioner made
!ersonal and written follow8"!s reardin his "n!aid salaries= commissions= #eneGts= and oHer to
!"rchase his service vehicle& Me;eni re!lied that the com!any car !lan #eneGt a!!lied only to
em!loyees who have #een with the com!any for Gve yearsM for this reason= the #alance that
!etitioner sho"ld !ay on his service vehicle stood at '))0=*3+&++ if he o!ts to !"rchase the
same&
On May *= 5++,= !etitioner Gled aainst Me;eni andJor its 'resident= 'r"dencio S& Garcia= a
Com!laint for the recovery of monetary claims consistin of "n!aid salaries= commissions=
sic;Jvacation leave #eneGts= and recovery of monthly salary ded"ctions which were earmar;ed
for his cost8sharin in the car !lan&
ISS<E
>hether or not !etitioner is entitled to a ref"nd of all the amo"nts a!!lied to the cost of the
service vehicle "nder the car !lan&
R<LING
Any #eneGt or !rivilee enEoyed #y !etitioner from "sin the service vehicle was merely
incidental and insiniGcant= #eca"se for the most !art the vehicle was "nder Me;eniNs control
and s"!ervision& :ree and com!lete dis!osal is iven to the !etitioner only after the vehicleNs
cost is covered or !aid in f"ll& Until then= the vehicle remains at the #ec; and call of Me;eni&
Given the vast territory !etitioner had to cover to #e a#le to !erform his wor; eHectively and
enerate #"siness for his em!loyer= the service vehicle was an a#sol"te necessity= or else
Me;eniNs #"siness wo"ld s"Her adversely& Th"s= it is clear that while !etitioner was !ayin for
half of the vehicleNs val"e= Me;eni was rea!in the f"ll #eneGts from the "se thereof&
Under Article 55 of the Civil Code= Pevery !erson who thro"h an act of !erformance #y another=
or any other means= acD"ires or comes into !ossession of somethin at the eA!ense of the latter
witho"t E"st or leal ro"nd= shall ret"rn the same to him&L Article 5)25 of the same Code
li;ewise clariGes that there are certain lawf"l= vol"ntary and "nilateral acts which ive rise to the
E"ridical relation of D"asi8contract= to the end that no one shall #e "nE"stly enriched or #eneGted
at the eA!ense of another& 1n the a#sence of s!eciGc terms and conditions overnin the car !lan
arranement #etween the !etitioner and Me;eni= a D"asi8contract"al relation was created
#etween them& ConseD"ently= Me;eni may not enrich itself #y charin !etitioner for the "se of
its vehicle which is otherwise a#sol"tely necessary to the f"ll and eHective !romotion of its
#"siness& 1t may not= "nder the claim that !etitionerNs !ayments constit"te rents for the "se of
the com!any vehicle= ref"se to ref"nd what !etitioner had !aid= for the reasons that the car !lan
did not carry s"ch a conditionM the s"#Eect vehicle is an old car that is s"#stantially= if not f"lly=
de!reciatedM the car !lan arranement #eneGted Me;eni for the most !artM and any !ersonal
#eneGt o#tained #y !etitioner from "sin the vehicle was merely incidental&
Conversely= !etitioner cannot recover the monetary val"e of Me;eniNs co"nter!art contri#"tion to
the cost of the vehicleM that is not !ro!erty or money that #elons to him= nor was it intended to
#e iven to him in lie" of the car !lan& Me;eniNs share of the vehicleNs cost was not !art of
!etitionerNs com!ensation !ac;ae& The vehicle is an asset that #eloned to Me;eni& %"st as
Me;eni is "nE"stly enriched #y failin to ref"nd !etitionerNs !ayments= so sho"ld !etitioner not #e
awarded the val"e of Me;eniNs co"nter!art contri#"tion to the car !lan= as this wo"ld "nE"stly
enrich him at Me;eniNs eA!ense&
Th"s= Me;eni :ood Cor!oration sho"ld ref"nd !etitioner Antonio Locsin 11Ns !ayments "nder the
car !lan areement amo"ntin only to the eAtent of the contri#"tion Locsin made= totallin to
the amo"nt of '))5=6++&++.
)5 ShopF""ers Corp., e" al., vs. )85 ShopF""ers Corp., <nion, GR No. >@>->D, (eb .?,
./>D
(AC)S
On Se!tem#er ,= 5++2= the T@? Sho!Gtters Cor!orationJ Gin C"een Cor!oration wor;ers "nion
-T?S8GC Union. Gled their Com!laint for Unfair La#or 'ractice -UL'. #y way of "nion #"stin= and
1lleal Loc;o"t= with moral and eAem!lary damaes and attorney<s fees= aainst T@? Sho!Gtters
Cor!oration -T@? Sho!Gtters. and Gin C"een Cor!oration #efore the La#or Ar#iter -LA.&
)st CAUS4$
1n their desire to im!rove their wor;in conditions= res!ondents and other em!loyees of held
their Grst formal meetin on Novem#er 5*= 5++* to disc"ss the formation of a "nion& The
followin day= seventeen -),. em!loyees were #arred from enterin !etitioners< factory !remises
located in CastilleEos= Ram#ales= and ordered to transfer to T@? Sho!Gtters< wareho"se at S"#ic
Bay :ree!ort Rone -SB:R. !"r!ortedly #eca"se of its eA!ansion& Afterwards= the said seventeen
-),. em!loyees were re!eatedly ordered to o on forced leave d"e to the "navaila#ility of wor;&
Res!ondents contended that the aHected em!loyees were not iven re"lar wor; assinments=
while s"#contractors were contin"o"sly hired to !erform their f"nctions& Res!ondents so"ht the
assistance of the National Conciliation and Mediation Board& S"#seD"ently= an areement
#etween !etitioners and T?S8GC Union was reached& 'etitioners areed to ive !riority to re"lar
em!loyees in the distri#"tion of wor; assinments& Res!ondents averred= however= that
!etitioners never com!lied with its commitment #"t instead hired contract"al wor;ers& 1nstead=
Res!ondents claimed that the wor; wee;s of those em!loyees in the SB:R !lant were drastically
red"ced to only three -*. days in a month&
5nd CAUS4$
On March 52= 5++2= T?S8GC Union Gled a !etition for certiGcation election and an order was
iss"ed to hold the certiGcation election in #oth T@? Sho!Gtters and Gin C"een&
On Octo#er )+= 5++2= !etitioners s!onsored a Geld tri! to 1#a= Ram#ales= for its em!loyees& The
oIcers and mem#ers of the T?S8GC Union were !"r!ortedly eAcl"ded from the Geld tri!& On the
evenin of the Geld tri!= a certain Anel Madriaa= a sales oIcer of !etitioners= cam!ained
aainst the "nion in the forthcomin certiGcation election&
>hen the certiGcation election was sched"led on Octo#er ))= 5++2= the em!loyees were
escorted from the Geld tri! to the !ollin center in Ram#ales to cast their votes& The remainin
em!loyees sit"ated at the SB:R !lant cast their votes as well& D"e to the heavy !ress"re eAerted
#y !etitioners= the votes for Lno "nionL !revailed&
*rD CAUS4$
A memorand"m was iss"ed #y !etitioner Ben ?"an -?"an.= Director for Gin C"een= informed
its em!loyees of the eA!iration of the lease contract #etween Gin C"een and its lessor in
CastilleEos= Ram#ales and anno"nced the relocation of its oIce and wor;ers to Ca#anan=
Ram#ales&
>hen the res!ondents= visited the site in Ca#anan= discovered that it was a Ltalahi#anL or
rassland& The said "nion oIcers and mem#ers were made to wor; as rass c"tters in
Ca#anan= "nder the s"!ervision of a certain Baranay Ca!tain Gre 'anan& D"e to these
circ"mstances= the em!loyees assined in Ca#anan did not re!ort for wor;& The other
em!loyees who li;ewise failed to re!ort in Ca#anan were meted o"t with s"s!ension&
'4T1T1ON4RS< D4:4NS4$
1n its defense= 'etitioners also stress that they cannot #e held lia#le for UL' for the reason that
there is no em!loyer8em!loyee relationshi! #etween the former and res!ondents& :"rther= Gin
C"een avers that its decision to im!lement an enforced rotation of wor; assinments for
res!ondents was a manaement !reroative !ermitted #y law= E"stiGed d"e to the decrease in
orders from its c"stomers= they had to resort to cost c"ttin meas"res to avoid antici!ated
Gnancial losses& Th"s= it assined wor; on a rotational #asis& 1t eA!lains that its fail"re to !resent
concrete !roof of its decreasin orders was d"e to the im!ossi#ility of !rovin a neative
assertion& 1t also asserts that the transfer from CastilleEos to Ca#anan was made in ood faith
and solely #eca"se of the eA!iration of its lease contract in CastilleEos& 1t was of the im!ression
that the em!loyees= who o!!osed its economic meas"res= were merely motivated #y s!ite in
Glin the com!laint for UL' aainst it&
ISS<ESE
>hether UL' acts were committed #y !etitioners aainst res!ondents&
R<LINGE
UL' were committed #y !etitioners aainst res!ondents&
'etitioners are #ein acc"sed of violations of !arara!hs -a.= -c.= and -e. of Article 56, -formerly
Article 523. of the La#or Code=)* to wit$
"rticle #$%! &nfair labor practices of emploers!''(t shall be unla)ful for an emploer to
commit an of the follo)ing unfair labor practices*
(a) +o interfere )ith, restrain or coerce emploees in the exercise of their right to self-
organi-ation.
x x x x
(c) +o contract out services or functions being performed b union members )hen such
)ill interfere )ith, restrain, or coerce emploees in the exercise of their right to self-
organi-ation.
x x x x
(e) +o discriminate in regard to )ages, hours of )or/, and other terms and conditions of
emploment in order to encourage or discourage membership in an labor organi-ation! x
x x
The D"estioned acts of !etitioners= namely$ ). s!onsorin a Geld tri! to Ram#ales for its
em!loyees= to the eAcl"sion of "nion mem#ers= #efore the sched"led certiGcation electionM 5. the
active cam!ain #y the sales oIcer of !etitioners aainst the "nion !revailin as a #arainin
aent d"rin the Geld tri!M *. escortin its em!loyees after the Geld tri! to the !ollin centerM 2.
the contin"o"s hirin of s"#contractors !erformin res!ondents< f"nctionsM 6. assinin "nion
mem#ers to the Ca#anan site to wor; as rass c"ttersM and 0. the enforcement of wor; on a
rotational #asis for "nion mem#ers= ta;en toether= reasona#ly s"!!ort an inference that=
indeed= s"ch were all orchestrated to restrict res!ondents< free eAercise of their riht to self8
orani7ation&
The Co"rt is of the considered view that !etitioners< "ndis!"ted actions !rior and immediately
#efore the sched"led certiGcation election= while seeminly innoc"o"s= "nd"ly meddled in the
aHairs of its em!loyees in selectin their eAcl"sive #arainin re!resentative&
2eslean <niversi"%Phils., vs. 2eslean <niversi"%Phils., (acul" 8 S"aK Asso., GR
No. >0>0/?, March >., ./>D
(AC)SE
'etitioner >esleyan University8'hili!!ines is a non8stoc;= non8!roGt ed"cational instit"tion d"ly
orani7ed and eAistin "nder the laws of the 'hili!!ines& Res!ondent >esleyan University8
'hili!!ines :ac"lty and StaH Association= on the other hand= is a d"ly reistered la#or
orani7ation actin as the sole and eAcl"sive #arainin aent of all ran;8and8Gle fac"lty and
staH em!loyees of !etitioner&
1n Decem#er 5++*= the !arties sined a 68year CBA eHective %"ne )= 5++* "ntil May *)= 5++3&
On A""st )0= 5++6= !etitioner= thro"h its 'resident= Atty& Malaya = iss"ed a Memorand"m
!rovidin "idelines on the im!lementation of vacation and sic; leave credits as well as vacation
leave comm"tation which states that vacation and sic; leave credits are not a"tomatic as leave
credits wo"ld #e earned on a month8to8month and only vacation leave is comm"ted or
moneti7ed to cash which is eHected after the second year of contin"o"s service of an em!loyee&
Res!ondents D"estioned the "idelines for #ein violative of eAistin !ractices and the CBA
which !rovide that all covered em!loyees are entitled to )6 days sic; leave and )6 days vacation
leave with !ay every year and that after the second year of service= all "n"sed vacation leave
shall #e converted to cash and !aid to the em!loyee at the end of each school year= not later
than A""st *+ of each year&
Res!ondent Gle a rievance com!laint on the im!lementation of the vacation and sic; leave
!olicy& 'etitioner also anno"nced its !lan of im!lementin a one8retirement !olicy which was
"nacce!ta#le to res!ondent&
Res!ondent s"#mitted aIdavits to !rove that there is an esta#lished !ractice of ivin two
retirement #eneGts= one from the 'rivate 4d"cation Retirement Ann"ity Association -'4RAA. 'lan
and another from the CBA Retirement 'lan&
The 9ol"ntary Ar#itrator rendered a Decision declarin the one8retirement !olicy and the
Memorand"m dated A""st )0= 5++6 contrary to law& CA also aIrmed the r"lin of the 9ol"ntary
Ar#itrator&
'etitioner ar"es that there is only one retirement !lan as the CBA Retirement 'lan and the
'4RAA 'lan are one and the same& 1t maintains that there is no esta#lished com!any !ractice or
!olicy of ivin two retirement #eneGts to its em!loyees& Res!ondent #elies the claims of
!etitioner and asserts that there are two retirement !lans as the '4RAA Retirement 'lan= which
has #een im!lemented for more than *+ years= is diHerent from the CBA Retirement 'lan&
Res!ondent f"rther avers that it has always #een a !ractice of !etitioner to ive two retirement
#eneGts and that this !ractice was esta#lished #y s"#stantial evidence as fo"nd #y #oth the
9ol"ntary Ar#itrator and the CA&
ISS<EE
>hether or not the res!ondents are entitled to two retirement !lans&
R<LINGE
The Non8Dimin"tion R"le fo"nd in Article )++ of the La#or Code eA!licitly !rohi#its em!loyers
from eliminatin or red"cin the #eneGts received #y their em!loyees& This r"le= however=
a!!lies only if the #eneGt is #ased on an eA!ress !olicy= a written contract= or has ri!ened into a
!ractice& To #e considered a !ractice= it m"st #e consistently and deli#erately made #y the
em!loyer over a lon !eriod of time& Res!ondent was a#le to !resent s"#stantial evidence in the
form of aIdavits to s"!!ort its claim that there are two retirement !lans& Based on the aIdavits=
!etitioner has #een ivin two retirement #eneGts as early as )((,& 'etitioner= on the other
hand= failed to !resent any evidence to ref"te the veracity of these aIdavits& 'etitionerNs
assertion that there is only one retirement !lan as the CBA Retirement 'lan and the '4RAA 'lan
are one and the same is not s"!!orted #y any evidence&
The Memorand"m dated A""st )0= 5++6 is contrary to the eAistin CBA& 1t limits the availa#le
leave credits of an em!loyee at the start of the school year& The Memorand"m dated im!oses a
limitation not areed "!on #y the !arties nor stated in the CBA= so it m"st #e str"c; down&
Bluer )han Blue 1oin" 'en"ures Co., vs. Es"eban, GR No. >@.A0., April -, ./>D,
ci"ing./>> Nina 1ewelr Manufac"uring of Me"al Ar"s Inc. vs. Mon"ecillo
(AC)SE
The res!ondent was em!loyed as a sales cler; and assined at the !etitioner<s #o"tiD"e& ?er
!rimary tas;s were attendin to all c"stomer needs= ens"rin eIcient inventory= coordinatin
orders from clients= cashierin and re!ortin to the acco"ntin de!artment& The !etitioner
learned that some of their em!loyees had access to their 'OS system with the "se of a "niversal
!assword iven to them #y a certain 4lmer :lores= who in t"rn learned of the !assword from the
res!ondent& The !etitioner then cond"cted an investiation and as;ed the !etitioner to eA!lain
why she sho"ld not #e disci!linarily dealt with& D"rin the investiation the res!ondent was
!laced "nder !reventive s"s!ension& After investiation the !etitioner terminated the res!ondent
on the ro"nds of loss of tr"st or conGdence& This res!ondent was iven her Gnal wae and
#eneGts less the inventory variance inc"rred #y the store& This "red the res!ondent to Gle a
com!laint for illeal dismissal= illeal s"s!ension= holiday !ay= rest day and se!aration !ay& The
la#or ar#iter r"led in her favo"r awardin her #ac;waes& The !etitioner a!!ealed the decision in
the NLRC and the decision was reversed& ?owever= "!on the res!ondent<s !etition for certiorari
in the co"rt of a!!eals the decision was reinstated& ?ence= this !etition&
ISS<EE
>hether the neative sales variance co"ld #e validly ded"cted from the res!ondent<s waeZ
5EL&E
No= it cannot #e ded"cted in this case&
Article ))* of the La#or Code !rovides that no em!loyer= in his own #ehalf or in #ehalf of any
!erson= shall ma;e any ded"ction from the waes of his em!loyees= eAce!t in cases where the
em!loyer is a"thori7ed #y law or re"lations iss"ed #y the Secretary of La#or and 4m!loyment=
amon others& The Omni#"s R"les 1m!lementin the La#or Code= meanwhile= !rovides$
S4CT1ON )2& Ded"ction for loss or damae& O >here the em!loyer is enaed in a trade=
occ"!ation or #"siness where the !ractice of ma;in ded"ctions or reD"irin de!osits is
reconi7ed to answer for the reim#"rsement of loss or damae to tools= materials= or
eD"i!ment s"!!lied #y the em!loyer to the em!loyee= the em!loyer may ma;e wae
ded"ctions or reD"ire the em!loyees to ma;e de!osits from which ded"ctions shall #e
made= s"#Eect to the followin conditions$
-a. That the em!loyee concerned is clearly shown to #e res!onsi#le for the loss or
damaeM
-#. That the em!loyee is iven reasona#le o!!ort"nity to show ca"se why ded"ction
sho"ld not #e madeM
-c. That the amo"nt of s"ch ded"ction is fair and reasona#le and shall not eAceed the
act"al loss or damaeM and
-d. That the ded"ction from the waes of the em!loyee does not eAceed 5+ !ercent of the
em!loyeeNs waes in a wee;&
1n this case= the !etitioner failed to s"Iciently esta#lish that 4ste#an was res!onsi#le for the
neative variance it had in its sales for the year 5++6 to 5++0 and that 4ste#an was iven the
o!!ort"nity to show ca"se the ded"ction from her last salary sho"ld not #e made&
:"rthermore= the co"rt r"led= in Nina %ewelry Mar;etin of Metal Arts= 1nc& v& Montecillo= that$
VTWhe !etitioners sho"ld Grst esta#lish that the ma;in of ded"ctions from the salaries is
a"thori7ed #y law= or re"lations iss"ed #y the Secretary of La#or& :"rther= the !ostin of
cash #onds sho"ld #e !roven as a reconi7ed !ractice in the Eewelry man"fact"rin
#"siness= or alternatively= the !etitioners sho"ld see; for the determination #y the
Secretary of La#or thro"h the iss"ance of a!!ro!riate r"les and re"lations that the
!olicy the former see;s to im!lement is necessary or desira#le in the cond"ct of #"siness&
The !etitioners failed in this res!ect& 1t #ears stressin that witho"t !roofs that reD"irin
de!osits and eHectin ded"ctions are reconi7ed !ractices= or witho"t sec"rin the
Secretary of La#orNs determination of the necessity or desira#ility of the same= the
im!osition of new !olicies relative to ded"ctions and de!osits can #e made s"#Eect to
a#"se #y the em!loyers& This is not what the law intends&
PA7MEN) 6( 2AGES
Congson vs. NLRC
G&R& No& ))256+M A!ril 6= )((6
:ACTS$
Dominico C& Conson is the reistered owner of So"thern :ishin 1nd"stry& Res!ondents were
hired as !iece8rate em!loyees "niformly !aid at a rate of ')&++ !er t"na weihin thirty -*+. to
eihty -3+. ;ilos !er movement& They wor; for , days a wee;& D"e to alleed scarcity of t"na=
Conson notiGed his !ro!osal to red"ce the rate8!er8t"na movement& >hen they re!orted the
followin day= they fo"nd o"t that they were already re!laced with new set of wor;ers& They
wanted to have a dialo"e with the manaement= #"t they waited in vain& Th"s= they Gled a case
#efore NLRC for "nder!ayment of waes -violation of the minim"m wae law. and non8!ayment
of overtime !ay= )*th month !ay= holiday !ay= rest day !ay= and Gve -6.8day service incentive
leave !ayM and for constr"ctive dismissal&
'etitioner conceded that his !ayment of waes falls #elow the minim"m wae law& ?e averred
that NLRC sho"ld have considered as formin a s"#stantial !art of !rivate res!ondentsN total
waes the cash val"e of the t"na liver and intestines !rivate res!ondents were entitled to
retrieve& ?e ar"ed that the com#ined val"e of the cash wae and monetary val"e of the t"na
liver and intestines clearly eAceeded the minim"m wae GAed #y law& Both the La#or Ar#iter and
the NLRC r"led in favor of the res!ondents&
1SSU4$
>hether or not the form of !ayment #y Conson is valid !"rs"ant to Article )+5 of the La#or
Code&
RUL1NG$
'etitionerNs !ractice of !ayin the !rivate res!ondents the minim"m wae #y means of leal
tender com#ined with t"na liver and intestines r"ns co"nter to the a#ove cited !rovision of the
La#or Code& The fact that said method of !ayin the minim"m wae was not only areed "!on
#y #oth !arties in the em!loyment areement #"t even eA!ressly reD"ested #y !rivate
res!ondents= does not shield !etitioner& Article )+5 of the La#or Code is clear& >aes shall #e
!aid only #y means of leal tender& The only instance when an em!loyer is !ermitted to !ay
waes informs other than leal tender= that is= #y chec;s or money order= is when the
circ"mstances !rescri#ed in the second !arara!h of Article )+5 are !resent&
Nor"h &avao Mining vs. NLRC
G&R& No& ))5620M March )*= )((0
:ACTS$
D"e to Gnancial losses= North Davao Minin Cor!oration laid oH wor;ers& Res!ondent >ilfredo
G"illema is one amon several em!loyees of North Davao who were se!arated #y reason of the
com!any<s clos"re on May *)= )((5& 1t a!!ears that= d"rin the life of the !etitioner cor!oration=
from the #einnin of its o!erations in )(3) "ntil its clos"re in )((5= it had #een ivin
se!aration !ay eD"ivalent to thirty -*+. days< !ay for every year of service& Moreover= inasm"ch
as the reion where North Davao o!erated was !la"ed #y ins"rency and other !eace and
order !ro#lems= the em!loyees had to collect their salaries at a #an; in Ta"m= Davao del Norte=
some 63 ;ilometers from their wor;!lace and a#o"t 5 \ho"rs< travel time #y !"#lic
trans!ortationM this arranement lasted from )(3) "! to )((+&
1SSU4$
>hether or not time s!ent in collectin waes in a !lace other than the !lace of em!loyment is
com!ensa#le notwithstandin that the same is done d"rin oIcial time&
RUL1NG$
SC= aIrmin the decision of the La#or Ar#iter= Gnds that the ho"rs s!ent #y com!lainants in
collectin salaries at a #an; in Ta"m= Davao del Norte shall #e considered com!ensa#le ho"rs
wor;ed& Considerin f"rther the distance #etween Amacan= Maco to Ta"m which is 5\ ho"rs #y
travel and the ris;s in comm"tin all the time in collectin com!lainants< salaries= wo"ld E"stify
the rantin of #ac;waes eD"ivalent to two -5. days in a month as !rayed for& Corollary= we
li;ewise hold res!ondents lia#le for the trans!ortation eA!enses inc"rred #y com!lainants at
'2+&++ ro"nd tri! fare d"rin !ay days&
Na"ional (e!era"ion of Labor vs. CA
G&R& No& )2(202M Octo#er )(= 5++2
:ACTS$
National :ederation of La#or -N:L. was the d"ly reistered #arainin aent of the daily8and8
monthly8!aid ran;8and8Gle em!loyees of SD'1 in the Lat"an r"##er !lantation& SD'1 and N:L
eAec"ted a collective #arainin areement -CBA. in which they areed that in case of
!ermanent or tem!orary lay8oH= wor;ers aHected wo"ld #e entitled to termination !ay as
!rovided #y the La#or Code& The )6+ !etitioners were daily8and8monthly !aid em!loyees of SD'1
in the Lat"an !lantation and were= li;ewise= mem#ers of N:L& The termination of the !etitioners<
em!loyment was #ased on the clos"re of SD'1= Lat"an r"##er !lantation= as a conseD"ence of
the im!lementation of CARL= which set the deadline for the com!"lsory distri#"tion of
aric"lt"ral= incl"din aro8ind"strial lands ten years after the eHectivity of the law& As a res"lt=
each of the !etitioners received his se!aration !ay eD"ivalent to one8half month !ay for every
year of service= and other #eneGts which were all l"m!ed in one Metro#an; chec;& The
!etitioners sim"ltaneo"sly eAec"ted individ"al PReleased and C"itclaimQ followin the
eA!lanation to them #y 4Aec"tive La#or Ar#iter -4LA. Rhett %"li"s %& 'laata of the nat"re and
leal eHects of the said D"itclaims&
1SSU4$
>hether or not the chec; is a valid form of !ayment for waes&
RUL1NG$
SC held that the !ayments of se!aration !ay and other #eneGts in chec; are not in violation of
Article )+5 of the La#or Code&
'ayment #y chec;8 !ayment of waes #y #an; chec;s= !ostal chec;s or money orders is allowed
where s"ch manner of wae !ayment is c"stomary on the date of the eHectivity of the Code=
where it is sti!"lated in a collective #arainin areement= or where all of the followin
conditions are met$
There is a #an; or other facility for encashment within a radi"s of one -). ;ilometer from the
wor;!laceM
The em!loyer= or any of his aents or re!resentatives= does not receive any !ec"niary #eneGt
directly or indirectly from the arranementM
The em!loyee are iven reasona#le time d"rin #an;in ho"rs to withdraw their waes from the
#an; which time shall #e considered as com!ensa#le ho"rs wor;ed if done d"rin the wor;in
ho"rsM and
The !ayment #y chec; is with the written consent of the em!loyees concerned if there is no
collective areement a"thori7in the !ayment of waes #y #an; chec;s&
1n the !resent case= the !etitioners< se!aration !ay= other #eneGts= and the waes from %an"ary
) to ), were !aid in chec;& Strictly s!ea;in= SD'1 violated the La#or Code when it incl"ded
waes from %an"ary ) to ),= )((3 in the chec;& Considerin= however= the amo"nt of other
monetary #eneGts to #e !aid= !ayment in chec; was the most convenient form for #oth the
!etitioners and the res!ondent&
5eirs of Sara Lee vs. Re
G&R& No& )2(+)*M A""st *)= 5++0
:ACTS$
The ?o"se of Sara Lee -!etitioner. is enaed in the direct sellin of a variety of !rod"ct lines for
men and women= incl"din cosmetics= intimate a!!arels= !erf"mes= ready to wear clothes and
other novelty items= thro"h its vario"s o"tlets nationwide& 1t em!loys Credit Administration
S"!ervisors -CAS. to s"!ervise and monitor the credit collection of the 1nde!endent B"siness
Manaers -1BMs. and 1nde!endent Gro"! S"!ervisors -1GSs.& A *38 or 658day Prollin d"e dateQ is
iven to each of its 1BMs and 1GSs& CAS is "nder the direct control and s"!ervision of Branch
O!erations Manaer -BOM.& Cynthia Rey was a CAS at the Caayan de Oro Branch of the
!etitioner& She was later transferred to B"t"an City& >hile res!ondent was still wor;in in B"t"an
City= she alleedly instr"cted the Acco"nts Receiva#le Cler; of the Caayan de Oro o"tlet= a
certain Ms& Mai Caroline Mendo7a= to chane the credit term of one of the 1BMs of the !etitioner=
a certain Ms& Mariam Rey8'etilla= who ha!!ens to #e res!ondent<s sister8in8law= from the 658day
limit to an P"na"thori7edQ term of 0+ days& Ms& Mendo7a re!orted the matter to the BOM
9illaracia& 9illaracia discreetly investiated the matter and fo"nd o"t that it was not only Ms&
'etilla who was iven eAtensions to the Prollin d"e datesQ #"t other 1BMs as well&
On the #asis of the hearin= the alleed vol"ntary admissions of res!ondent= and the Gndins of
the a"ditor<s re!ort= the !etitioner formally dismissed the res!ondent for #reach of tr"st and
conGdence& The dismissal lead to res!ondent<s Glin of her Com!laint for illeal dismissal=
#ac;waes and damaes= with the La#or Ar#iter&
Both La#or Ar#iter and the NLRC r"led in favor the res!ondent&
1SSU4$
>hether or not res!ondent was dismissed for E"st ca"se&
RUL1NG$
SC held that res!ondent was dismissed for E"st ca"se& 1n the !resent case= the res!ondent is not
an ordinary ran;8and8Gle em!loyee& The nat"re of her wor; reD"ires a s"#stantial amo"nt of
tr"st and conGdence on the !art of the em!loyer& Bein the Credit Administration S"!ervisor of
the Caayan de Oro and B"t"an City #ranches of the !etitioner= res!ondent occ"!ied a hihly
sensitive and critical !osition and may th"s #e dismissed on the ro"nd of loss of tr"st and
conGdence&
C6N&I)I6NS 6( EMPL67MEN)
San 1uan !e &ios 5ospi"al vs. NLRC
G&R& No& )50*3*M Novem#er 53= )((,
:ACTS$
'etitioners= the ran;8and8Gle em!loyee8"nion oIcers and mem#ers of San %"an De Dios ?os!ital
4m!loyees Association sent a letter reD"estin and !leadin for the eA!editio"s im!lementation
and !ayment #y res!ondent %"an De Dios ?os!ital of the <2+ ?OURSJ68DAB >ORK>44K< with
com!ensa#le wee;ly two -5. days oH !rovided for #y Re!"#lic Act 6(+) as clariGed for
enforcement #y the Secretary of La#or<s 'olicy 1nstr"ctions No& 62& RA 6(+) see;s to red"ce the
n"m#er of hos!ital !ersonnel= considerin the nat"re of their wor;= and at the same time
"arantee the !ayment to them of a f"ll wee;ly wae for seven -,. days& Res!ondent hos!ital
failed to ive a favora#le res!onseM th"s= !etitioners Gled a com!laint reardin their claims for
stat"tory #eneGts "nder the a#ove8cited law and !olicy iss"ance& Both La#or Ar#iter and NLRC
dismissed the com!laint&
1SSU4$
>hether or not the 'olicy 1nstr"ctions No& 62 iss"ed #y then La#or Secretary -now Senator.
:ran;lin M& Drilon is valid&
RUL1NG$
The inter!retation of La#or Secretary Drilon is not valid&
A c"rsory readin of Article 3* of the La#or Code #etrays !etitioners< !osition that Phos!ital
em!loyeesQ are entitled to Pa f"ll wee;ly salary with !aid two -5. days< oH if they have
com!leted the 2+8ho"rJ68day wor;wee;Q& >hat Article 3* merely !rovides are$ -). the re"lar
oIce ho"r of eiht ho"rs a day= Gve days !er wee; for health !ersonnel= and -5. where the
eAiencies of service reD"ire that health !ersonnel wor; for siA days or forty8eiht ho"rs then
s"ch health !ersonnel shall #e entitled to an additional com!ensation of at least thirty !ercent of
their re"lar wae for wor; on the siAth day& There is nothin in the law that s"!!orts then
Secretary of La#or<s assertion that P!ersonnel in s"#Eect hos!itals and clinics are entitled to a f"ll
wee;ly wae for seven -,. days if they have com!leted the 2+8ho"rJ68day wor;wee; in any iven
wor;wee;Q& Needless to say= the Secretary of La#or eAceeded his a"thority #y incl"din a two
days oH with !ay in contravention of the clear mandate of the stat"te& S"ch act the Co"rt shall
not co"ntenance& Administrative inter!retation of the law= we reiterate= is at #est merely
advisory= and the Co"rt will not hesitate to stri;e down an administrative inter!retation that
deviates from the !rovision of the stat"te&
Si#e &arb vs. NLRC
G&R& No& ))(5+6& A!ril )6= )((3
:ACTS$
Sime Dar#y 'ili!inas= 1nc&= !etitioner= is enaed in the man"fact"re of a"tomotive tires= t"#es
and other r"##er !rod"cts& Sime Dar#y Salaried 4m!loyees Association -ALU8TUC'.= !rivate
res!ondent= is an association of monthly salaried em!loyees of !etitioner at its Mari;ina factory&
'rior to the !resent controversy= all com!any factory wor;ers in Mari;ina incl"din mem#ers of
!rivate res!ondent "nion wor;ed from ,$26 a&m& to *$26 !&m& with a *+ min"te !aid Pon callQ
l"nch #rea;& 'etitioner iss"ed a memorand"m to all factory8#ased em!loyees advisin all its
monthly salaried em!loyees in its Mari;ina Tire 'lant a chane in wor; sched"le and elimination
of the *+ min"te !aid Pon callQ l"nch #rea;& 'rivate res!ondent felt aHected adversely #y the
chane in the wor; sched"le and discontin"ance of the *+8min"te !aid Pon callQ l"nch #rea;= it
Gled on #ehalf of its mem#ers a com!laint with the La#or Ar#iter for "nfair la#or !ractice=
discrimination and evasion of lia#ility& La#or Ar#iter and NLRC dismissed the com!laint of the
"nion ratiocinatin that the act"ation of Sime Der#y is an eAercise of manaement !reroative&
U!on motion for reconsideration= NLRC reversed its decision and declared that declared that the
new wor; sched"le de!rived the em!loyees of the #eneGts of time8honored com!any !ractice of
!rovidin its em!loyees a *+8min"te !aid l"nch #rea; res"ltin in an "nE"st dimin"tion of
com!any !rivilees !rohi#ited #y Art& )++ of the La#or Code&
1SSU4$
>hether or not the act of manaement in revisin the wor; sched"le of its em!loyees and
discardin their !aid l"nch #rea; constit"tive of "nfair la#or !ractice&
RUL1NG$
SC r"led in favor the of the !etitioners&
The riht to GA the wor; sched"les of the em!loyees rests !rinci!ally on their em!loyer& 1n the
instant case !etitioner= as the em!loyer= cites as reason for the adE"stment the eIcient cond"ct
of its #"siness o!erations and its im!roved !rod"ction& 1t rationali7es that while the old wor;
sched"le incl"ded a *+8min"te !aid l"nch #rea;= the em!loyees co"ld #e called "!on to do Eo#s
d"rin that !eriod as they were Pon call&Q 4ven if denominated as l"nch #rea;= this !eriod co"ld
very well #e considered as wor;in time #eca"se the factory em!loyees were reD"ired to wor; if
necessary and were !aid accordinly for wor;in& >ith the new wor; sched"le= the em!loyees
are now iven a one8ho"r l"nch #rea; witho"t any interr"!tion from their em!loyer& :or a f"ll
one8ho"r "ndist"r#ed l"nch #rea;= the em!loyees can freely and eHectively "se this ho"r not
only for eatin #"t also for their rest and comfort which are cond"cive to more eIciency and
#etter !erformance in their wor;& Since the em!loyees are no loner reD"ired to wor; d"rin this
one8ho"r l"nch #rea;= there is no more need for them to #e com!ensated for this !eriod& >e
aree with the La#or Ar#iter that the new wor; sched"le f"lly com!lies with the daily wor; !eriod
of eiht -3. ho"rs witho"t violatin the La#or Code& Besides= the new sched"le a!!lies to all
em!loyees in the factory similarly sit"ated whether they are "nion mem#ers or not&
PAL vs. NLRC
G&R& No& )*53+6M :e#r"ary 5= )(((
:ACTS$
Dr& ?erminio A& :a#ros was em!loyed as Tiht s"reon at !etitioner com!any& ?e was assined
at the 'AL Medical Clinic at Nichols and was on d"ty from 2$++ in the afternoon "ntil )5$++
midniht& >hile on meal #rea;= an em!loyee of the 'AL Caro Services died d"e to a heart
attac;& 'AL Medical Director Dr& Godofredo B& Ban7on ordered the Chief :liht S"reon to cond"ct
an investiation& The Chief :liht S"reon= in t"rn= reD"ired !rivate res!ondent to eA!lain why
no disci!linary sanction sho"ld #e ta;en aainst him& 1n his eA!lanation= !rivate res!ondent
asserted that he was entitled to a thirty8min"te meal #rea;M that he immediately left his
residence "!on #ein informed #y Mr& 4"se#io= n"rse= a#o"t the emerency and he arrived at the
clinic a few min"tes laterM that Mr& 4"se#io !anic;ed and #ro"ht the !atient to the hos!ital
witho"t waitin for him& :indin !rivate res!ondent<s eA!lanation "nacce!ta#le= the
manaement chared !rivate res!ondent with a#andonment of !ost while on d"ty& ?e was iven
ten days to s"#mit a written answer to the administrative chare& 1n his answer= !rivate
res!ondent reiterated the assertions in his !revio"s eA!lanation& ?e f"rther denied that he
a#andoned his !ost& After eval"atin the chare as well as the answer of !rivate res!ondent=
!etitioner com!any decided to s"s!end !rivate res!ondent for three months& 'rivate res!ondent
Gled a com!laint for illeal s"s!ension aainst !etitioner&
Both La#or Ar#iter and NLRC declared the s"s!ension illeal&
1SSU4$
>hether or not Dr& ?erminio :a#ros< act of leavin the com!any !remises d"rin his #rea;
constit"tes a#andonment of !ost which warrants s"s!ension&
RUL1NG$
The eiht8ho"r wor; !eriod does not incl"de the meal #rea;& Nowhere in the law may it #e
inferred that em!loyees m"st ta;e their meals within the com!any !remises& 4m!loyees are not
!rohi#ited from oin o"t of the !remises as lon as they ret"rn to their !osts on time& 'rivate
res!ondent<s act= therefore= of oin home to ta;e his dinner does not constit"te a#andonment&
Lin"on Co##ercial Co., Inc. vs. 5ellera
G&R& No& )0*)2,M Octo#er )+= 5++,
:ACTS$
Linton is a domestic cor!oration enaed in the #"siness of im!ortation= wholesale= retail and
fa#rication of steel and its #y8!rod"cts& D"e to the Asian :inancial Crisis= it decided to s"s!end
its o!erations from )3 Decem#er )((, to 6 %an"ary )((3 and s"#mitted it to DOL4& 1t s"#mitted
another memorand"m informin them that eHective )5 %an"ary )((3= it wo"ld im!lement a new
com!ressed wor;wee; of three -*. days on a rotation #asis& 1n other words= each wor;er wo"ld
#e wor;in on a rotation #asis for three wor;in days only instead for siA days a wee;& On the
same day= Linton s"#mitted an esta#lishment termination re!ort concernin the rotation of its
wor;ers& Linton !roceeded with the im!lementation of the new !olicy witho"t waitin for its
a!!roval #y DOL4& Arieved= siAty8eiht -03. wor;ers -wor;ers. Gled a Com!laint for illeal
red"ction of wor;days with the NLRC& The wor;ers !ointed o"t that Linton im!lemented the
red"ction of wor; ho"rs witho"t o#servin Article 53* of the La#or Code= which reD"ired
s"#mission of notice thereof to DOL4 one month !rior to the im!lementation of red"ction of
!ersonnel= since Linton Gled only the esta#lishment termination re!ort enactin the com!ressed
wor;wee; on the very date of its im!lementation& 'etitioner claimed that d"e to the c"rrency
crisis it s"Hered considera#le losses and the red"ction of the wor;in ho"rs was instit"ted as a
cost8c"ttin meas"re&
1SSU4$
>hether or not there was an illeal red"ction of wor; when Linton im!lemented a com!ressed
wor;wee; #y red"cin from siA to three the n"m#er of wor;in days with the em!loyees wor;in
on a rotation #asis&
RUL1NG$
The com!ressed wor;wee; arranement was "nE"stiGed and illeal& 'etitioners committed illeal
red"ction of wor; ho"rs&
:or the red"ction of wor;in ho"rs to #e valid= it m"st ta;e into consideration the followin$ the
arranement was tem!orary= it was a more h"mane sol"tion instead of a retrenchment of
!ersonnel= there was notice and cons"ltations with the wor;ers and s"!ervisors= a consens"s
were reached on how to deal with deterioratin economic conditions and it was s"Iciently
!roven that the com!any was s"Herin from losses&
This case was done thro"h a red"ced wor;wee; that res"lted in an "nsettlin dimin"tion of the
!eriodic !ay for a !rotracted !eriod& 'ermittin red"ction of wor; and !ay at the slihtest
indication of losses wo"ld #e contrary to the State<s !olicy to aHord !rotection to la#or and
!rovide f"ll em!loyment& Certainly= manaement has the !reroative to come "! with meas"res
to ens"re !roGta#ility or loss minimi7ation& ?owever= s"ch !rivilee is not a#sol"te& Manaement
!reroative m"st #e eAercised in ood faith and with d"e reard to the rihts of la#or&
Bisig Manggagawa sa )rco vs. NLRC
G&R& No& )6)*+(M Octo#er )6= 5++3
:ACTS$
Tryco 'harma Cor!oration -Tryco. is a man"fact"rer of veterinary medicines and its !rinci!al
oIce is located in Caloocan City& 'etitioners %oselito LariFo= 9ivencio Barte= Sat"rnino 4era and
Sim!licio Aya8ay are its re"lar em!loyees= occ"!yin the !ositions of hel!er= shi!ment hel!er
and factory wor;ers= res!ectively= assined to the 'rod"ction De!artment& They are mem#ers of
Bisi Manaawa sa Tryco -BMT.= the eAcl"sive #arainin re!resentative of the ran;8and8Gle
em!loyees& Tryco and the !etitioners sined se!arate Memoranda of Areement -MOA.=
!rovidin for a com!ressed wor;wee; sched"le to #e im!lemented in the com!any eHective May
5+= )((0& As !rovided in the MOA= 3$++ a&m& to 0$)5 !&m&= from Monday to :riday= shall #e
considered as the re"lar wor;in ho"rs= and no overtime !ay shall #e d"e and !aya#le to the
em!loyee for wor; rendered d"rin those ho"rs&
1SSU4$
>hether or not the MOA is valid and enforcea#le&
RUL1NG$
SC held that the MOA is enforcea#le and valid& >e do not aree with the !etitionersN assertion
that the MOA is not enforcea#le as it is contrary to law& The MOA is enforcea#le and #indin
aainst the !etitioners& >here it is shown that the !erson ma;in the waiver did so vol"ntarily=
with f"ll "nderstandin of what he was doin= and the consideration for the D"itclaim is credi#le
and reasona#le= the transaction m"st #e reconi7ed as a valid and #indin "nderta;in&
Nota#ly= the MOA com!lied with the followin conditions set #y the DOL4= "nder D&O& No& 5)= to
!rotect the interest of the em!loyees in the im!lementation of a com!ressed wor;wee; scheme$
The em!loyees vol"ntarily aree to wor; more than eiht -3. ho"rs a day the total in a wee; of
which shall not eAceed their normal wee;ly ho"rs of wor; !rior to ado!tion of the com!ressed
wor;wee; arranementM
There will not #e any dimin"tion whatsoever in the wee;ly or monthly ta;e8home !ay and frine
#eneGts of the em!loyeesM
1f an em!loyee is !ermitted or reD"ired to wor; in eAcess of his normal wee;ly ho"rs of wor;
!rior to the ado!tion of the com!ressed wor;wee; scheme= all s"ch eAcess ho"rs shall #e
considered overtime wor; and shall #e com!ensated in accordance with the !rovisions of the
La#or Code or a!!lica#le Collective Barainin Areement -CBA.M
A!!ro!riate waivers with res!ect to overtime !remi"m !ay for wor; !erformed in eAcess of eiht
-3. ho"rs a day may #e devised #y the !arties to the areement&
The eHectivity and im!lementation of the new wor;in time arranement shall #e #y areement
of the !arties&
MINIM<M S)AN&AR& BENE(I)S
<nion of (ilipino E#ploees vs. 'icar
G&R& No& ,(566M %an"ary 5+= )((5
:ACTS$
On Novem#er 3= )(36= res!ondent :ili!ro= 1nc& -now Nestle 'hili!!ines= 1nc&. Gled with the
National La#or Relations Commission a !etition for declaratory relief see;in a r"lin on its rihts
and o#liations res!ectin claims of its monthly !aid em!loyees for holiday !ay&
Both :ili!ro and the Union of :ili!ro 4m!loyees -U:4. areed to s"#mit the case for vol"ntary
ar#itration and a!!ointed res!ondent Benino 9ivar= %r& as vol"ntary ar#itrator& Ar#itrator 9ivar
rendered a decision directin :ili!ro to !ay its monthly !aid em!loyees holiday !ay !"rs"ant to
Article (2 of the Code= s"#Eect only to the eAcl"sions and limitations s!eciGed in Article 35 and
s"ch other leal restrictions as are !rovided for in the Code&
?owever= the res!ondent ar#itrator ref"sed to ta;e coni7ance of the case reasonin that he had
no more E"risdiction to contin"e as ar#itrator #eca"se he had resined from service eHective May
)= )(30&
1SSU4$
>hether or not sales !ersonnel are eAcl"ded in the !ayment of holiday !ay&
RUL1NG$
The Co"rt r"led that Geld !ersonnel are not entitled to s"ch !ay&
Under Article 35= Geld !ersonnel are not entitled to holiday !ay& Said article deGnes Geld
!ersonnel as Lnon8aric"lt"ral em!loyees who re"larly !erform their d"ties away from the
!rinci!al !lace of #"siness or #ranch oIce of the em!loyer and whose act"al ho"rs of wor; in
the Geld cannot #e determined with reasona#le certainty&L
The controversy centers on the inter!retation of the cla"se Lwhose act"al ho"rs of wor; in the
Geld cannot #e determined with reasona#le certainty&L 1t is "ndis!"ted that these sales !ersonnel
start their Geld wor; at 3$++ a&m& after havin re!orted to the oIce and come #ac; to the oIce
at 2$++ !&m& or 2$*+ !&m& if they are Ma;ati8#ased&
The !etitioner maintains that the !eriod #etween 3$++ a&m& to 2$++ or 2$*+ !&m& com!rises the
sales !ersonnelNs wor;in ho"rs which can #e determined with reasona#le certainty&
The Co"rt does not aree& The law reD"ires that the act"al ho"rs of wor; in the Geld #e
reasona#ly ascertained& The com!any has no way of determinin whether or not these sales
!ersonnel= even if they re!ort to the oIce #efore 3$++ a&m& !rior to Geld wor; and come #ac; at
2$*+ !&m&= really s!end the ho"rs in #etween in act"al Geld wor;&
The Co"rt conc"rs with the ar#itrator when it dis!osed that the reD"irement for the salesmen
and other similarly sit"ated em!loyees to re!ort for wor; at the oIce at 3$++ a&m& and ret"rn at
2$++ or 2$*+ !&m& is not within the realm of wor; in the Geld as deGned in the Code #"t an
eAercise of !"rely manaement !reroative of !rovidin administrative control over s"ch
!ersonnel& This does not in any manner !rovide a reasona#le level of determination on the act"al
Geld wor; of the em!loyees which can #e reasona#ly ascertained& Act"al Geld wor; #eins after
3$++ a&m& when the sales !ersonnel follow their Geld itinerary= and ends immediately #efore 2$++
or 2$*+ !&m& when they re!ort #ac; to their oIce& The !eriod #etween 3$++ a&m& and 2$++ or
2$*+ !&m& com!rises their ho"rs of wor; in the Geld= the eAtent or sco!e and res"lt of which are
s"#Eect to their individ"al ca!acity and ind"stry and which Ncannot #e determined with
reasona#le certainty&N This is the reason why eHective s"!ervision over Geld wor; of salesmen
and medical re!resentatives= tr"c; drivers and merchandisers is !ractically a !hysical
im!ossi#ility& ConseD"ently= they are eAcl"ded from the ten holidays with !ay&
Moreover= the reD"irement that Lact"al ho"rs of wor; in the Geld cannot #e determined with
reasona#le certaintyL m"st #e read in conE"nction with R"le 19= Boo; 111 of the 1m!lementin
R"les which !rovides$
LR"le 19 ?olidays with 'ay& S4CT1ON )& Coverae& O This r"le shall a!!ly to all em!loyees eAce!t$
-e. :ield !ersonnel and other em!loyees whose time and !erformance is "ns"!ervised #y the
em!loyer&
The Co"rt Gnds that the r"le did not add another element to the La#or Code deGnition of Geld
!ersonnel& The cla"se Lwhose time and !erformance is "ns"!ervised #y the em!loyerL did not
am!lify #"t merely inter!reted and eA!o"nded the cla"se Lwhose act"al ho"rs of wor; in the
Geld cannot #e determined with reasona#le certainty&L The former cla"se is still within the sco!e
and !"rview of Article 35 which deGnes Geld !ersonnel& ?ence= in decidin whether or not an
em!loyeeNs act"al wor;in ho"rs in the Geld can #e determined with reasona#le certainty= D"ery
m"st #e made as to whether or not s"ch em!loyeeNs time and !erformance is constantly
s"!ervised #y the em!loyer&
The !etitioner claims that the fact that these sales !ersonnel are iven incentive #on"s every
D"arter #ased on their !erformance is !roof that their act"al ho"rs of wor; in the Geld can #e
determined with reasona#le certainty& The Co"rt thin;s otherwise&
The criteria for rantin incentive #on"s are$
-). attainin or eAceedin sales vol"me #ased on sales taretM
-5. ood collection !erformanceM
-*. !ro!er com!liance with ood mar;et hyieneM
-2. ood merchandisin wor;M
-6. minimal mar;et ret"rns and
-0. !ro!er tr"c; maintenance&
The a#ove criteria indicate that these sales !ersonnel are iven incentive #on"ses !recisely
#eca"se of the diIc"lty in meas"rin their act"al ho"rs of Geld wor;& These em!loyees are
eval"ated #y the res"lt of their wor; and not #y the act"al ho"rs of Geld wor; which are hardly
s"sce!ti#le to determination&
1n San Mi"el Brewery= 1nc& v& Democratic La#or Orani7ation= the Co"rt had occasion to disc"ss
the nat"re of the Eo# of a salesman& 1t states that$
LThe reasons for eAcl"din an o"tside salesman are fairly a!!arent& S"ch a salesman= to a
reater eAtent= wor;s individ"ally& There are no restrictions res!ectin the time he shall wor; and
he can earn as m"ch or as little= within the rane of his a#ility= as his am#ition dictates& 1n lie" of
overtime he ordinarily receives commissions as eAtra com!ensation& ?e wor;s away from his
em!loyerNs !lace of #"siness= is not s"#Eect to the !ersonal s"!ervision of his em!loyer= and his
em!loyer has no way of ;nowin the n"m#er of ho"rs he wor;s !er day&L
Na"ional Sugar ReFner Corp. , vs. NLRC
G&R& No& )+),0) March 52= )((*
:ACTS$
'etitioner National S"ar ReGneries Cor!oration -NASUR4:CO.= a cor!oration which is f"lly
owned and controlled #y the Government= o!erates three -*. s"ar reGneries located at
B";idnon= 1loilo and Batanas& The Batanas reGnery was !rivati7ed on A!ril ))= )((5 !"rs"ant
to 'roclamation No& 6+&
'rivate res!ondent "nion re!resents the former s"!ervisors of the NASUR4:CO Batanas S"ar
ReGnery= namely= the Technical Assistant to the ReGnery O!erations Manaer= Shift S"ar
>areho"se S"!ervisor= Senior :inancialJB"det Analyst= General Acco"ntant= Cost Acco"ntant=
S"ar Acco"ntant= %"nior :inancialJB"det Analyst= Shift Boiler S"!ervisor== Shift O!erations
Chemist= Shift 4lectrical S"!ervisor= General Services S"!ervisor= 1nstr"mentation S"!ervisor=
Comm"nity Develo!ment OIcer= 4m!loyment and Trainin S"!ervisor= Assistant Safety and
Sec"rity OIcer= ?ead and 'ersonnel Services= ?ead N"rse= 'ro!erty >areho"se S"!ervisor=
?ead of 1nventory Control Section= Shift 'rocess S"!ervisor= Day Maintenance S"!ervisor and
Motor!ool S"!ervisor&
On %"ne )= )(33= !etitioner im!lemented a %o# 4val"ation -%4. 'roram aHectin all em!loyees=
from ran;8and8Gle to de!artment heads which was desined to rationali7ed the d"ties and
f"nctions of all !ositions= reesta#lish levels of res!onsi#ility= and reconi7e #oth wae and
o!erational str"ct"res& %o#s were ran;ed accordin to eHort= res!onsi#ility= trainin and wor;in
conditions and relative worth of the Eo#& As a res"lt= all !ositions were re8eval"ated= and all
em!loyees incl"din the mem#ers of res!ondent "nion were ranted salary adE"stments and
increases in #eneGts commens"rate to their act"al d"ties and f"nctions&
The Co"rts lean from the records that for a#o"t ten years !rior to the %4 'roram= the mem#ers
of res!ondent "nion were treated in the same manner as ran;8and Gle em!loyees& As s"ch= they
"sed to #e !aid overtime= rest day and holiday !ay !"rs"ant to the !rovisions of Articles 3,= (*
and (2 of the La#or Code as amended& On May ))= )((+= !etitioner NASUR4:CO reconi7ed
herein res!ondent "nion= which was orani7ed !"rs"ant to Re!"#lic Act NO& 0,)6 allowin
s"!ervisory em!loyees to form their own "nions= as the #arainin re!resentative of all the
s"!ervisory em!loyees at the NASUR4:CO Batanas S"ar ReGnery& Two years after the
im!lementation of the %4 'roram= s!eciGcally on %"ne 5+= )((+= the mem#ers of herein
res!ondent "nion Gled a com!lainant with the eAec"tive la#or ar#iter for non8!ayment of
overtime= rest day and holiday !ay alleedly in violation of Article )++ of the La#or Code&
1SSU4$
>hether or not the mem#ers of res!ondent "nion are entitled to overtime= rest day and holiday
!ay&
RUL1NG$
The mem#ers of the "nion are not entitled to overtime= rest and holiday !ay since they fall within
the classiGcation of manaerial em!loyees which ma;es them a !art of the eAem!ted
em!loyees&
1t m"st of necessity #e ascertained Grst whether or not the "nion mem#ers= as s"!ervisory
em!loyees= are to #e considered as oIcers or mem#ers of the manaerial staH who are eAem!t
from the coverae of Article 35 of the La#or Code&
1t is not dis!"ted that the mem#ers of res!ondent "nion are s"!ervisory em!loyees= as deGned
em!loyees= as deGned "nder Article 5)5-m.= Boo; 9 of the La#or Code on La#or Relations= which
reads$ PNManaerial em!loyeeN is one who is vested with !owers or !reroatives to lay down and
eAec"te manaement !olicies andJor to hire= transfer= s"s!end= lay8oH= recall= dischared= assin
or disci!line em!loyees& S"!ervisory em!loyees are those who= in the interest of the em!loyer
eHectively recommend s"ch manaerial actions if the eAercise of s"ch a"thority is not merely
ro"tinary or clerical in nat"re #"t reD"ires the "se of inde!endent E"dment& All em!loyees not
fallin within any of those a#ove deGnitions are considered ran;8and8Gle em!loyees of this
Boo;&L
Article 35 of the La#or Code states$ PThe !rovisions of this title shall a!!ly to em!loyees in all
esta#lishments and "nderta;ins whether for !roGt or not= #"t not to overnment em!loyees=
manaerial em!loyees= Geld !ersonnel= mem#ers of the family of the em!loyer who are
de!endent on him for s"!!ort= domestic hel!ers= !ersons in the !ersonal service of another= and
wor;ers who are !aid #y res"lts as determined #y the Secretary of La#or in A!!ro!riate
re"lations&Q
As "sed herein= Nmanaerial em!loyeesN refer to those whose !rimary d"ty consists of the
manaement of the esta#lishment in which they are em!loyed or of a de!artment or s"#division
thereof= and to other oIcers or mem#ers of the manaerial staH&
NSec& 5& 4Aem!tion& O The !rovisions of this r"le shall not a!!ly to the followin !ersons if
they D"alify for eAem!tion "nder the condition set forth herein$
-#. Manaerial em!loyees= if they meet all of the followin conditions= namely$
-). Their !rimary d"ty consists of the manaement of the esta#lishment in which they are
em!loyed or of a de!artment or s"#division thereof$
-5. They c"stomarily and re"larly direct the wor; of two or more em!loyees therein$
-*. They have the a"thority to hire or Gre other em!loyees of lower ran;M or their s"estions
and recommendations as to the hirin and Grin and as to the !romotion or any other chane of
stat"s of other em!loyees are iven !artic"lar weiht&
-c. OIcers or mem#ers of a manaerial staH if they !erform the followin d"ties and
res!onsi#ilities$
-). The !rimary d"ty consists of the !erformance of wor; directly related to manaement
!olicies of their em!loyerM
-5. C"stomarily and re"larly eAercise discretion and inde!endent E"dmentM
-*. -i. Re"larly and directly assist a !ro!rietor or a manaerial em!loyee whose !rimary d"ty
consists of the manaement of the esta#lishment in which he is em!loyed or s"#division thereofM
or
-ii. eAec"te "nder eneral s"!ervision wor; alon s!eciali7ed or technical lines reD"irin s!ecial
trainin= eA!erience= or ;nowledeM or
-iii. eAec"te "nder eneral s"!ervision s!ecial assinments and tas;sM
-2. >ho do not devote more 5+ !ercent of their ho"rs wor;ed in a wor;8wee; to activities
which are not directly and closely related to the !erformance of the wor; descri#ed in
!arara!hs -).= -5.= and a#ove&L
They are clearly oIcers or mem#ers of the manaerial staH #eca"se they meet all the conditions
!rescri#ed #y law and= hence= they are not entitled to overtime= rest day and s"!ervisory
em!loyees "nder Article 5)5 -m. sho"ld #e made to a!!ly only to the !rovisions on La#or
Relations= while the riht of said em!loyees to the D"estioned #eneGts sho"ld #e considered in
the liht of the meanin of a manaerial em!loyee and of the oIcers or mem#ers of the
manaerial staH= as contem!lated "nder Article 35 of the Code and Section 5= R"le 1 Boo; 111 of
the im!lementin r"les&
1n other words= for !"r!oses of formin and Eoinin "nions= certiGcation elections= collective
#arainin= and so forth= the "nion mem#ers are s"!ervisory em!loyees& 1n terms of wor;in
conditions and rest !eriods and entitlement to the D"estioned #eneGts= however= they are
oIcers or mem#ers of the manaerial staH= hence they are not entitled thereto&
The "nion mem#ers will readily show that these s"!ervisory em!loyees are "nder the direct
s"!ervision of their res!ective de!artment s"!erintendents and that enerally they assist the
latter in !lannin= orani7in= staIn= directin= controllin comm"nicatin and in ma;in
decisions in attainin the com!anyNs set oals and o#Eectives& These s"!ervisory em!loyees are
li;ewise res!onsi#le for the eHective and eIcient o!eration of their res!ective de!artments&
More s!eciGcally= their d"ties and f"nctions incl"de= amon others= the followin o!erations
where#y the em!loyee$
). assists the de!artment s"!erintendent in the followin$
a. !lannin of systems and !roced"res relative to de!artment activitiesM
#. orani7in and sched"lin of wor; activities of the de!artment= which
incl"des em!loyee shiftin sched"led and mannin com!lementM
c. decision ma;in #y !rovidin relevant information data and other in!"tsM
d. attainin the com!anyNs set oals and o#Eectives #y ivin his f"ll s"!!ortM
e. selectin the a!!ro!riate man to handle the Eo# in the de!artmentM and
f. !re!arin ann"al de!artmental #"detM
5. o#serves= follows and im!lements com!any !olicies at all times and recommends disci!linary
action on errin s"#ordinatesM
*. trains and "ides s"#ordinates on how to ass"me res!onsi#ilities and #ecome more
!rod"ctiveM
2. cond"cts semi8ann"al !erformance eval"ation of his s"#ordinates and recommends necessary
action for their develo!mentJadvancementM
6. re!resents the s"!erintendent or the de!artment when a!!ointed and a"thori7ed #y the
formerM
0. coordinates and comm"nicates with other inter and intra de!artment s"!ervisors when
necessaryM
,. recommends disci!linary actionsJ!romotionsM
3. recommends meas"res to im!rove wor; methods= eD"i!ment !erformance= D"ality of service
and wor;in conditionsM
(. sees to it that safety r"les and re"lations and !roced"re and are im!lemented and followed
#y all NASUR4:CO em!loyees= recommends revisions or modiGcations to said r"les when
deemed necessary= and initiates and !re!ares re!orts for any o#served a#normality within the
reGneryM
)+. s"!ervises the activities of all !ersonnel "nder him and oes to it that instr"ctions to
s"#ordinates are !ro!erly im!lementedM and
)). !erforms other related tas;s as may #e assined #y his immediate s"!erior&
:rom the foreoin= it is a!!arent that the mem#ers of res!ondent "nion dischare d"ties and
res!onsi#ilities which inel"cta#ly D"alify them as oIcers or mem#ers of the manaerial staH= as
deGned in Section 5= R"le 1 Boo; 111 of the aforestated R"les to 1m!lement the La#or Code= vi7&$
-). their !rimary d"ty consists of the !erformance of wor; directly related to manaement
!olicies of their em!loyerM
-5. they c"stomarily and re"larly eAercise discretion and inde!endent E"dmentM
-*. they re"larly and directly assist the manaerial em!loyee whose !rimary d"ty consist of the
manaement of a de!artment of the esta#lishment in which they are em!loyed
-2. they eAec"te= "nder eneral s"!ervision= wor; alon s!eciali7ed or technical lines reD"irin
s!ecial trainin= eA!erience= or ;nowledeM
-6. they eAec"te= "nder eneral s"!ervision= s!ecial assinments and tas;sM and
-0. they do not devote more than 5+X of their ho"rs wor;ed in a wor;8wee; to activities which
are not directly and clearly related to the !erformance of their wor; herein#efore descri#ed&
Under the facts o#tainin in this case= The Co"rt is constrained to aree with !etitioner that the
"nion mem#ers sho"ld #e considered as oIcers and mem#ers of the manaerial staH and are=
therefore= eAem!t from the coverae of Article 35& 'erforce= they are not entitled to overtime=
rest day and holiday&
Sala$ar vs. NLRC
G&R& No& )+(5)+M A!ril ),= )((0
:ACTS$
On A!ril )((+= !rivate res!ondent em!loyed !etitioner as constr"ctionJ!roEect enineer for the
constr"ction of the Monte de 'iedad #"ildin in C"#ao= C"e7on City& Alleedly= #y virt"e of an
oral contract= !etitioner wo"ld also receive a share in the !roGts after com!letion of the !roEect
and that !etitionerNs services in eAcess of eiht -3. ho"rs on re"lar days and services rendered
on wee;ends and leal holidays shall #e com!ensa#le overtime at the rate of '5,&36 !er ho"r&
On )0 A!ril )(()= !etitioner received a memorand"m iss"ed #y !rivate res!ondentNs !roEect
manaer= 4nr& Nestor A& Delantar informin him of the termination of his services eHective on
*+ A!ril )(()&
On )* Se!tem#er )(()= !etitioner Gled a com!laint aainst !rivate res!ondent for illeal
dismissal= "nfair la#or !ractice= illeal ded"ction= non8!ayment of waes= overtime rendered=
service incentive leave !ay= commission= allowances= !roGt8sharin and se!aration !ay with the
NLRC8NCR Ar#itration Branch= Manila&
1SSU4$
>hether or not !etitioner is entitled to se!aration !ay&
RUL1NG$
The !etitioner is not entitled to se!aration !ay& 'etitioner admitted that his Eo# was to s"!ervise
the la#orers in the constr"ction !roEect& ?ence= altho"h !etitioner cannot strictly #e classiGed as
a manaerial em!loyee "nder Art& 35 of the La#or Code= and sec& 5-#.= R"le )= Boo; 111 of the
Omni#"s R"les 1m!lementin the La#or Code= nonetheless he is still not entitled to !ayment of
the aforestated #eneGts #eca"se he falls sD"arely "nder another eAem!t cateory O LoIcers or
mem#ers of a manaerial staHL as deGned "nder sec& 5-c. of the a#ovementioned im!lementin
r"les$
S4CT1ON 5& 4Aem!tion& O The !rovisions of this R"le shall not a!!ly to the followin !ersons if
they D"alify for eAem!tion "nder the condition set forth herein$
-c. OIcers or mem#ers of a manaerial staH if they !erform the followin d"ties and
res!onsi#ilities$
-). The !rimary d"ty consists of the !erformance of wor; directly related to manaement !olicies
of their em!loyerM
-*. ViW Re"larly and directly assist a !ro!rietor or a manaerial em!loyee whose !rimary d"ty
or
ViiW eAec"te "nder eneral s"!ervision wor; alon s!eciali7ed or technical lines reD"irin
s!ecial trainin= eA!erience= or ;nowledeM or
ViiiW eAec"te "nder eneral s"!ervision s!ecial assinments and tas;sM and
-2. who do not devote more than 5+ !ercent of their ho"rs wor;ed in a wor;8wee; to activities
!arara!hs -).= -5.= and -*. a#ove&
The !etitioner was !aid overtime #eneGts does not a"tomatically and necessarily denote that
!etitioner is entitled to s"ch #eneGts& Art& 35 of the La#or Code s!eciGcally delineates who are
entitled to the overtime !remi"ms and service incentive leave !ay !rovided "nder Art& 3,= (*= (2
and (6 of the La#or Code and the eAem!tions thereto&
As !revio"sly determined !etitioner falls "nder the eAem!tions and therefore has no leal claim
to the said #eneGts& 1t is well and ood that !etitioner was com!ensated for his overtime
services& ?owever= this does not translate into a riht on the !art of !etitioner to demand
additional !ayment when= "nder the law= !etitioner is clearly eAem!ted there from&
Labor Congress of "he Phils., vs. NLRC
G&R& No& )5*(*3)M May 5)= )((3
:ACTS$
The (( !ersons named as !etitioners in this !roceedin were ran;8and8Gle em!loyees of
res!ondent 4m!ire :ood 'rod"cts= which hired them on vario"s dates& 'etitioners Gled aainst
!rivate res!ondents a com!laint for !ayment of money claims and for violation of la#or
standards laws They also Gled a !etition for direct certiGcation of !etitioner La#or Conress of
the 'hili!!ines as their #arainin re!resentative& 1n an Order dated Octo#er 52= )((+= Mediator
Ar#iter a!!roved the memorand"m of areement and certiGed LC' Las the sole and eAcl"sive
#arainin aent amon the ran;8and8Gle em!loyees of 4m!ire :ood 'rod"cts for !"r!oses of
collective #arainin with res!ect to waes= ho"rs of wor; and other terms and conditions of
em!loymentL&
On Novem#er )((+= !etitioners thro"h LC' 'resident Navarro s"#mitted to !rivate res!ondents
a !ro!osal for collective #arainin& On %an"ary )(()= !etitioners Gled a com!laint aainst
!rivate res!ondents for Unfair La#or 'ractice #y way of 1lleal Loc;o"t andJor DismissalM Union
#"stin thr" ?arassments VsicW= threats= and interferin with the rihts of em!loyees to self8
orani7ationM 9iolation of the Memorand"m of Areement dated Octo#er 5*= )((+M
Under!ayment of >aes in violation of R&A& No& 002+ and R&A& No& 0,5,= s"ch as >aes
!rom"lated #y the Reional >ae BoardM Act"al= Moral and 4Aem!lary Damaes&L
1SSU4$
>hether or not the !etitioners are entitled to la#or standard #eneGts considerin they are !aid
#y !iece rate wor;er&
RUL1NG$
The !etitioners are so entitled to these #eneGts namely= holiday !ay= !remi"m !ay= )*th month
!ay and service incentive leave& Three -*. factors lead "s to concl"de that !etitioners= altho"h
!iece8rate wor;ers= were re"lar em!loyees of !rivate res!ondents& :irst= as to the nat"re of
!etitionersN tas;s were necessary or desira#le in the "s"al #"siness of !rivate res!ondents= who
were enaed in the man"fact"re and sellin of s"ch food !rod"ctsM second= !etitioners wor;ed
for !rivate res!ondents thro"ho"t the year= and third= the lenth of time that !etitioners wor;ed
for !rivate res!ondents& Th"s= while !etitionersN mode of com!ensation was on a L!er !iece
#asis=L the stat"s and nat"re of their em!loyment was that of re"lar em!loyees&
The R"les 1m!lementin the La#or Code eAcl"de certain em!loyees from receivin #eneGts s"ch
as nihttime !ay= holiday !ay= service incentive leave and )*th month !ay= LGeld !ersonnel and
other em!loyees whose time and !erformance is "ns"!ervised #y the em!loyer= incl"din those
who are enaed on tas; or contract #asis= !"rely commission #asis= or those who are !aid a
GAed amo"nt for !erformin wor; irres!ective of the time cons"med in the !erformance thereof&L
'lainly= !etitioners as !iece8rate wor;ers do not fall within this ro"!& As mentioned earlier= not
only did !etitioners la#or "nder the control of !rivate res!ondents as their em!loyer= li;ewise did
!etitioners toil thro"ho"t the year with the f"lGllment of their D"ota as s"!!osed #asis for
com!ensation&
:"rther= in Section 3-#.= R"le 19= Boo; 111 which we D"ote here"nder= !iece wor;ers are s!eciGcally
mentioned as #ein entitled to holiday !ay&
S4C& 3& ?oliday !ay of certain em!loyees& O
-#. >here a covered em!loyee is !aid #y res"lts or o"t!"t= s"ch as !ayment on !iece wor;= his
holiday !ay shall not #e less than his averae daily earnins for the last seven -,. act"al wor;in
days !recedin the re"lar holiday$ 'rovided= however= that in no case shall the holiday !ay #e
less than the a!!lica#le stat"tory minim"m wae rate&
1n addition= the Revised G"idelines on the 1m!lementation of the )*th Month 'ay Law= in view of
the modiGcations to '&D& No& 36) )( #y Memorand"m Order No& 53= clearly eAcl"de the em!loyer
of !iece rate wor;ers from those eAem!ted from !ayin )*th month !ay= to wit$
4]4M'T4D 4M'LOB4RS
The followin em!loyers are still not covered #y '&D& No& 36)$
4m!loyers of those who are !aid on !"rely commission= #o"ndary or tas; #asis= and those who
are !aid a GAed amo"nt for !erformin s!eciGc wor;= irres!ective of the time cons"med in the
!erformance thereof= eAce!t where the wor;ers are !aid on !iece8rate #asis in which case the
em!loyer shall rant the reD"ired )*th month !ay to s"ch wor;ers&
The Revised G"idelines as well as the R"les and Re"lations identify those wor;ers who fall
"nder the !iece8rate cateory as those who are !aid a standard amo"nt for every !iece or "nit of
wor; !rod"ced that is more or less re"larly re!licated= witho"t reard to the time s!ent in
!rod"cin the same&
As to overtime !ay= the r"les= however= are diHerent& Accordin to Sec 5-e.= R"le 1= Boo; 111 of the
1m!lementin R"les= wor;ers who are !aid #y res"lts incl"din those who are !aid on !iece8wor;=
ta;ay= !a;iao= or tas; #asis= if their o"t!"t rates are in accordance with the standards !rescri#ed
"nder Sec& 3= R"le 911= Boo; 111= of these re"lations= or where s"ch rates have #een GAed #y the
Secretary of La#or in accordance with the aforesaid section= are not entitled to receive overtime
!ay& As s"ch= !etitioners are #eyond the am#it of eAem!ted !ersons and are therefore entitled to
overtime !ay&
Merci!ar (ishing Corp., vs. NLRC
G&R& No& ))56,2M Octo#er 3= )((3
:ACTS$
This case oriinated from a com!laint Gled on Se!tem#er 5+= )((+ #y !rivate res!ondent :ermin
Aao= %r& aainst !etitioner for illeal dismissal= violation of '&D& No& 36)= and non8!ayment of Gve
days service incentive leave for )((+& 'rivate res!ondent had #een em!loyed as a L#odeeroL or
shi!Ns D"artermaster on :e#r"ary )5= )(33& ?e com!lained that he had #een constr"ctively
dismissed #y !etitioner when the latter ref"sed him assinments a#oard its #oats after he had
re!orted to wor; on May 53= )((+&
'rivate res!ondent alleed that he had #een sic; and th"s allowed to o on leave witho"t !ay for
one month from A!ril 53= )((+ #"t that when he re!orted to wor; at the end of s"ch !eriod with
a health clearance= he was told to come #ac; another time as he co"ld not #e reinstated
immediately& Thereafter= !etitioner ref"sed to ive him wor;& :or this reason= !rivate res!ondent
as;ed for a certiGcate of em!loyment from !etitioner on Se!tem#er 0= )((+& ?owever= when he
came #ac; for the certiGcate on Se!tem#er )+= !etitioner ref"sed to iss"e the certiGcate "nless
he s"#mitted his resination& Since !rivate res!ondent ref"sed to s"#mit s"ch letter "nless he
was iven se!aration !ay= !etitioner !revented him from enterin the !remises&
'etitioner= on the other hand= alleed that it was !rivate res!ondent who act"ally a#andoned his
wor;&
1SSU4$
>hether or not the Gshin crew mem#ers are considered Geld !ersonnel as classiGed in Art& 35 of
the La#or Code&
RUL1NG$
Art& 35 of the La#or Code !rovides$ PThe !rovisions of this title V>or;in Conditions and Rest
'eriodsW shall a!!ly to em!loyees in all esta#lishments and "nderta;ins whether for !roGt or
not= #"t not to overnment em!loyees= Geld !ersonnel= mem#ers of the family of the em!loyer
who are de!endent on him for s"!!ort= domestic hel!ers= !ersons in the !ersonal service of
another= and wor;ers who are !aid #y res"lts as determined #y the Secretary of La#or in
a!!ro!riate re"lations&Q
L:ield !ersonnelL shall refer to non8aric"lt"ral em!loyees who re"larly !erform their d"ties
away from the !rinci!al !lace of #"siness or #ranch oIce of the em!loyer and whose act"al
ho"rs of wor; in the Geld cannot #e determined with reasona#le certainty&
1n contrast= in the case at #ar= d"rin the entire co"rse of their Gshin voyae= Gshermen
em!loyed #y !etitioner have no choice #"t to remain on #oard its vessel& Altho"h they !erform
non8aric"lt"ral wor; away from !etitionerNs #"siness oIces= the fact remains that thro"ho"t
the d"ration of their wor; they are "nder the eHective control and s"!ervision of !etitioner
thro"h the vesselNs !atron or master&
San Miguel Corp., vs. CA
G&R& No& )20,,6M %an& *+= 5+++
:ACTS$
On ), Octo#er )((5= the De!artment of La#or and 4m!loyment cond"cted a ro"tine ins!ection
in the !remises of San Mi"el Cor!oration in Sta& :ilomena= 1lian City& 1n the co"rse of the
ins!ection= it was discovered that there was "nder!ayment #y SMC of re"lar M"slim holiday !ay
to its em!loyees& DOL4 sent a co!y of the ins!ection res"lt to SMC and it was received #y and
eA!lained to its !ersonnel oIcer 4lena dela '"erta&
SMC contested the Gndins and DOL4 cond"cted s"mmary hearins on )( Novem#er )((5= 53
May )((* and 2 and 6 Octo#er )((*& Still= SMC failed to s"#mit !roof that it was !ayin re"lar
M"slim holiday !ay to its em!loyees& ?ence= Director 19 of DOL4 1lian District OIce iss"ed a
com!liance order directin SMC to consider M"slim holidays as re"lar holidays and to !ay #oth
its M"slim and non8M"slim em!loyees holiday !ay within thirty -*+. days from the recei!t of the
order& SMC a!!ealed #"t it was dismissed&
1SSU4$
>hether or not the em!loyees are entitled with re"lar M"slim holiday !ay&
RUL1NG$
The em!loyees are entitled to re"lar M"slim holiday !ay& M"slim holidays are !rovided "nder
Articles )0( and ),+= Title 1= Boo; 9= of 'residential Decree No& )+3*= otherwise ;nown as the
Code of M"slim 'ersonal Laws= which states$ OIcial M"slim holidays& O The followin are here#y
reconi7ed as leal M"slim holidays$
-a. NAm"n %adcd -New Bear.= which falls on the Grst day of the Grst l"nar month of M"harramM
-#. Ma"lid8"n8Na#c -Birthday of the 'ro!het M"hammad.= which falls on the twelfth day of the
third l"nar month of Ra#i8"l8Awwal=
-c. Lailat"l 1srd >al MiNrdE -Noct"rnal %o"rney and Ascension of the 'ro!het M"hammad.= which
falls on the twenty8seventh day of the seventh l"nar month of RaEa#$
-d. Ned8"l8:itr -?ari Raya '"asa.= which falls on the Grst day of the tenth l"nar month of Shawwal=
commemoratin the end of the fastin seasonM and
-e. Ned8"l8Adhd -?ari Raya ?aEi.=which falls on the tenth day of the twelfth l"nar month of DhfNl8
?iEEa&
Art& ),+ !rovides the !rovinces and cities where oIcially o#served& O -). M"slim holidays shall
#e oIcially o#served in the 'rovinces of Basilan= Lanao del Norte= Lanao del S"r= Ma"indanao=
North Cota#ato= 1lian= Marawi= 'aadian= and Ram#oana and in s"ch other M"slim !rovinces
and cities as may hereafter #e createdM -5. U!on !roclamation #y the 'resident of the
'hili!!ines= M"slim holidays may also #e oIcially o#served in other !rovinces and cities&
The foreoin !rovisions sho"ld #e read in conE"nction with Article (2 of the La#or Code= which
!rovides$ Riht to holiday !ay& -a. 4very wor;er shall #e !aid his re"lar daily wae d"rin
re"lar holidays= eAce!t in retail and service esta#lishments re"larly em!loyin less than ten
-)+. wor;ersM -#. The em!loyer may reD"ire an em!loyee to wor; on any holiday #"t s"ch
em!loyee shall #e !aid a com!ensation eD"ivalent to twice his re"lar rate&
?owever= there sho"ld #e no distinction #etween M"slims and non8M"slims as reards !ayment
of #eneGts for M"slim holidays& The Co"rt reminds the res!ondent8a!!ellant that waes and
other emol"ments ranted #y law to the wor;in man are determined on the #asis of the criteria
laid down #y laws and certainly not on the #asis of the wor;erNs faith or reliion&
At any rate= Article *-*. of 'residential Decree No& )+3* also declares that L& & & nothin herein
shall #e constr"ed to o!erate to the !reE"dice of a non8M"slim&L 1n addition= the )((( ?and#oo;
on >or;ersN Stat"tory BeneGts states considerin that all !rivate cor!orations= oIces= aencies=
and entities or esta#lishments o!eratin within the desinated M"slim !rovinces and cities are
reD"ired to o#serve M"slim holidays= #oth M"slim and Christians wor;in within the M"slim areas
may not re!ort for wor; on the days desinated #y law as M"slim holidays&
)an vs. Lagra#a
G&R& No& )6)553M A""st )6= 5++5
:ACTS$
'etitioner Rolando Tan is the !resident of S"!reme Theater Cor!oration and the eneral manaer
of Crown and 4m!ire Theaters in B"t"an City& 'rivate res!ondent Leoviildo Larama is a !ainter=
ma;in ad #ill#oards and m"rals for the motion !ict"res shown at the 4m!ress= S"!reme= and
Crown Theaters for more than )+ years= from Se!tem#er )= )(33 to Octo#er ),= )((3&
On Octo#er ),= )((3= !rivate res!ondent Larama was s"mmoned #y Tan and "!#raided$
LNanihi na naman ;a s"lod sa imon drawinanan&L -LBo" aain "rinated inside yo"r wor;
area&L. >hen Larama as;ed what Tan was sayin= Tan told him= LAyaw dahan estorya& Dili ;o
"sto na mo8drawin ;a !a& G"i;an ;aron= wala nay drawin& Gawas&L -LDonNt say anythin
f"rther& 1 donNt want yo" to draw anymore& :rom now on= no more drawin& Get o"t&L.
Larama denied the chare aainst him& ?e claimed that he was not the only one who entered
the drawin area and that= even if the chare was tr"e= it was a minor infraction to warrant his
dismissal& ?owever= everytime he s!o;e= Tan sho"ted LGawasL -LGet o"tL.= leavin him with no
other choice #"t to leave the !remises& Larama Gled a com!laint with the National La#or
Relations Commission -NLRC. in B"t"an City& ?e alleed that he had #een illeally dismissed and
so"ht reinvestiation and !ayment of )*th month !ay= service incentive leave !ay= salary
diHerential= and damaes&
As no amica#le settlement had #een reached= La#or Ar#iter Roelio '& Leas!i directed the
!arties to Gle their !osition !a!ers& 1t declared that the dismissal illeal and order the !ayment of
monetary #eneGts& Tan a!!ealed to the NLRC and reversin the decision of the La#or Ar#iter&
1SSU4$
>hether or not the res!ondent was illeally dismissed and th"s entitled to !ayment of #eneGts
!rovided #y law&
RUL1NG$
The res!ondent was illeally dismissed and entitled to #eneGts& The 1m!lementin R"les of the
La#or Code !rovide that no wor;er shall #e dismissed eAce!t for a E"st or a"thori7ed ca"se
!rovided #y law and after d"e !rocess& This !rovision has two as!ects$ -). the leality of the act
of dismissal= that is= dismissal "nder the ro"nds !rovided for "nder Article 535 of the La#or
Code and -5. the leality in the manner of dismissal& The illeality of the act of dismissal
constit"tes dischare witho"t E"st ca"se= while illeality in the manner of dismissal is dismissal
witho"t d"e !rocess&
1n this case= #y his ref"sal to ive Larama wor; to do and orderin Larama to et o"t of his
siht as the latter tried to eA!lain his side= !etitioner made it !lain that Larama was dismissed&
Urinatin in a wor; !lace other than the one desinated for the !"r!ose #y the em!loyer
constit"tes violation of reasona#le re"lations intended to !romote a healthy environment "nder
Art& 535-). of the La#or Code for !"r!oses of terminatin em!loyment= #"t the same m"st #e
shown #y evidence& ?ere there is no evidence that Larama did "rinate in a !lace other than a
rest room in the !remises of his wor;&
1nstead of orderin his reinstatement as !rovided in Art& 5,( of the La#or Code= the La#or Ar#iter
fo"nd that the relationshi! #etween the em!loyer and em!loyee has #een so strained that the
latterNs reinstatement wo"ld no loner serve any !"r!ose& The !arties do not dis!"te this Gndin&
?ence= the rant of se!aration !ay in lie" of reinstatement is a!!ro!riate&
This is of co"rse in addition to the !ayment of #ac;waes which= in accordance with the r"lin in
B"stamante v& NLRC sho"ld #e com!"ted from the time of LaramaNs dismissal "! to the time of
the Gnality of this decision= witho"t any ded"ction or D"aliGcation&
The B"rea" of >or;in Conditions *5 classiGes wor;ers !aid #y res"lts into two ro"!s= namelyM
-). those whose time and !erformance is s"!ervised #y the em!loyer= and -5. those whose time
and !erformance is "ns"!ervised #y the em!loyer& The Grst involves an element of control and
s"!ervision over the manner the wor; is to #e !erformed= while the second does not& 1f a !iece
wor;er is s"!ervised= there is an em!loyer8em!loyee relationshi!= as in this case& ?owever= s"ch
an em!loyee is not entitled to service incentive leave !ay since= as !ointed o"t in Ma;ati
?a#erdashery v& NLRC ** and Mar; Roche 1nternational v& NLRC= *2 he is !aid a GAed amo"nt for
wor; done= reardless of the time he s!ent in accom!lishin s"ch wor;&
La#bo vs. NLRC
G&R& No& )))+25M Octo#er 50= )(((
:ACTS$
'etitioners Avelino Lam#o and 9icente Beloc"ra were em!loyed as tailors #y !rivate res!ondents
%&C& Tailor Sho! andJor %ohnny Co on Se!tem#er )+= )(36 and March *= )(36= res!ectively& They
wor;ed from 3$++ a&m& to ,$++ !&m& daily= incl"din S"ndays and holidays& As in the case of the
other )++ em!loyees of !rivate res!ondents= !etitioners were !aid on a !iece8wor; #asis=
accordin to the style of s"its they made& Reardless of the n"m#er of !ieces they Gnished in a
day= they were each iven a daily !ay of at least '02&++&
On %an"ary ),= )(3(= !etitioners Gled a com!laint aainst !rivate res!ondents for illeal
dismissal and so"ht recovery of overtime !ay= holiday !ay= !remi"m !ay on holiday and rest
day= service incentive leave !ay= se!aration !ay= )*th month !ay= and attorney<s fees& After
hearin= La#or Ar#iter fo"nd !rivate res!ondents "ilty of illeal dismissal and accordinly
ordered them to !ay !etitioners< claims& On a!!eal= the NLRC reversed the decision of the La#or
Ar#iter& The NLRC held !etitioners "ilty of a#andonment of wor; and accordinly dismissed their
claims eAce!t that for )*th month !ay&
'etitioners allee that they were dismissed #y !rivate res!ondents as they were a#o"t to Gle a
!etition with the De!artment of La#or and 4m!loyment -DOL4. for the !ayment of #eneGts s"ch
as Social Sec"rity System -SSS. coverae= sic; leave and vacation leave& They deny that they
a#andoned their wor;&
1SSU4$
>hether or not the !etitioners are entitled to the minim"m #eneGts !rovided #y law&
RUL1NG$
The !etitioners are entitled to the minim"m #eneGts !rovided #y law& There is no dis!"te that
!etitioners were em!loyees of !rivate res!ondents altho"h they were !aid not on the #asis of
time s!ent on the Eo# #"t accordin to the D"antity and the D"ality of wor; !rod"ced #y them&
There are two cateories of em!loyees !aid #y res"lts$ -). those whose time and !erformance
are s"!ervised #y the em!loyer& -?ere= there is an element of control and s"!ervision over the
manner as to how the wor; is to #e !erformed& A !iece8rate wor;er #elons to this cateory
es!ecially if he !erforms his wor; in the com!any !remises&.M and -5. those whose time and
!erformance are "ns"!ervised& -?ere= the em!loyer<s control is over the res"lt of the wor;&
>or;ers on !a;yao and ta;ay #asis #elon to this ro"!&. Both classes of wor;ers are !aid !er
"nit accom!lished&
'iece8rate !ayment is enerally !racticed in arment factories where wor; is done in the
com!any !remises= while !ayment on !a;yao and ta;ay #asis is commonly o#served in the
aric"lt"ral ind"stry= s"ch as in s"ar !lantations where the wor; is !erformed in #"l; or in
vol"mes diIc"lt to D"antify& 2 'etitioners #elon to the Grst cateory= i&e&= s"!ervised
em!loyees&
1n this case= !rivate res!ondents eAercised control over the wor; of !etitioners& As tailors=
!etitioners wor;ed in the com!any<s !remises from 3$++ a&m& to ,$++ !&m& daily= incl"din
S"ndays and holidays& The mere fact that they were !aid on a !iece8rate #asis does not neate
their stat"s as re"lar em!loyees of !rivate res!ondents& The term LwaeL is #roadly deGned in
Art& (, of the La#or Code as rem"neration or earnins= ca!a#le of #ein eA!ressed in terms of
money whether GAed or ascertained on a time= tas;= !iece or commission #asis& 'ayment #y the
!iece is E"st a method of com!ensation and does not deGne the essence of the relations& Nor
does the fact that !etitioners are not covered #y the SSS aHect the em!loyer8em!loyee
relationshi!&
As !etitioners were illeally dismissed= they are entitled to reinstatement with #ac; waes& The
Ar#iter a!!lied the r"le in the Merc"ry Dr" case= accordin to which the recovery of #ac; waes
sho"ld #e limited to three years witho"t D"aliGcations or ded"ctions& Any award in eAcess of
three years is n"ll and void as to the eAcess& The La#or Ar#iter correctly ordered !rivate
res!ondents to ive se!aration !ay&
Considera#le time has la!sed since !etitioners< dismissal= so that reinstatement wo"ld now #e
im!ractical and hardly in the #est interest of the !arties& 1n lie" of reinstatement= se!aration !ay
sho"ld #e awarded to !etitioners at the rate of one month salary for every year of service= with a
fraction of at least siA -0. months of service #ein considered as one -). year& The awards for
overtime !ay= holiday !ay and )*th month !ay are in accordance with o"r Gndin that
!etitioners are re"lar em!loyees= altho"h !aid on a !iece8rate #asis&
R8E )ranspor" vs. La"ag
G&R& No& )665)2M :e#& )*= 5++2
:ACTS$
'edro Lata was a re"lar em!loyee of La Mallorca TaAi since March )= )(0)& >hen La Mallorca
ceased from #"siness o!erations= Lata transferred to R @ 4 Trans!ort= 1nc& ?e was receivin an
averae daily salary of Gve h"ndred !esos -'6++&++. as a taAi driver& Lata ot sic; in %an"ary
)((6 and was forced to a!!ly for !artial disa#ility with the SSS= which was ranted& >hen he
recovered= he re!orted for wor; in Se!tem#er )((3 #"t was no loner allowed to contin"e
wor;in on acco"nt of his old ae& Lata th"s as;ed :eliA :a#ros= the administrative oIcer of
V!etitionersW= for his retirement !ay !"rs"ant to Re!"#lic Act ,02) #"t he was inored&
Th"s= on Decem#er 5)= )((3= LataGled a case for !ayment of his retirement !ay #efore the
NLRC& Lata however died on A!ril *+= )(((& S"#seD"ently= his wife= Avelina Lata= s"#stit"ted
him& On %an"ary )+= 5+++= the La#or Ar#iter rendered a decision in favor of Lata&
1SSU4$
>hether or not Lata is entitled to retirement #eneGts considerin she sined a waiver of
D"itclaim&
RUL1NG$
The res!ondent is entitled to retirement #eneGts des!ite of the waiver of D"itclaims& There is no
dis!"te the fact that the late 'edro M& Lata is entitled to retirement #eneGts& Rather= the #one
of contention is the n"m#er of years that he sho"ld #e credited with in com!"tin those #eneGts&
The Gndins of the NLRC that 'edro m"st #e credited only with his service to R @ 4 Trans!ort=
1nc&= #eca"se the evidence shows that the aforementioned com!anies are two diHerent entities&
After a caref"l and !ainsta;in review of the evidence on record= the co"rt s"!!orts the NLRCNs
Gndins&
As to the C"itclaim and >aiver sined #y Res!ondent Lata= the CA committed no error when it
r"led that the doc"ment was invalid and co"ld not #ar her from demandin the #eneGts leally
d"e her h"s#and& This is not say that all D"itclaims are invalid !er se& Co"rts= however= are wary
of schemes that fr"strate wor;ersN rihts and #eneGts= and loo; with disfavor "!on D"itclaims
and waivers that #arain these away&
Undis!"ta#ly= 'edro M& Lata was credited with )2 years of service with R @ 4 Trans!ort= 1nc&
Article 53, of the La#or Code= as amended #y Re!"#lic Act No& ,02)= *+ !rovides$ Retirement& O
1n the a#sence of a retirement !lan or areement !rovidin for retirement #eneGts of em!loyees
in the esta#lishment= an em!loyee "!on reachin the ae of siAty -0+. years or more= #"t not
#eyond siAty8Gve -06. years which is here#y declared the com!"lsory retirement ae= who has
served at least Gve -6. years in said esta#lishment= may retire and shall #e entitled to retirement
!ay eD"ivalent to at least one8half -)J5. month salary for every year of service= a fraction of at
least siA -0. months #ein considered as one whole year& Unless the !arties !rovide for #roader
incl"sions= the term one half8month salary shall mean Gfteen -)6. days !l"s one8twelfth -)J)5. of
the )*th month !ay and the cash eD"ivalent of not more than Gve -6. days of service incentive
leaves
The r"les im!lementin the New Retirement Law similarly !rovide the a#ove8mentioned form"la
for com!"tin the one8half month salary& Since 'edro was !aid accordin to the L#o"ndaryL
system= he is not entitled to the )*th month *5 and the service incentive !ayM hence= his
retirement !ay sho"ld #e com!"ted on the sole #asis of his salary&
1t is acce!ted that taAi drivers do not receive GAed waes= #"t retain only those s"ms in eAcess of
the L#o"ndaryL or fee they !ay to the owners or o!erators of their vehicles& Th"s= the #asis for
com!"tin their #eneGts sho"ld #e the averae daily income& 1n this case= the CA fo"nd that
'edro was earnin an averae of Gve h"ndred !esos -'6++. !er day& >e th"s com!"te his
retirement !ay as follows$ '6++ A )6 days A )2 years of service eD"als ')+6=+++&
Asian )rans#ission vs. CA
G&R& No& )22002M March )6= 5++2
:ACTS$
The De!artment of La#or and 4m!loyment -DOL4. iss"ed an 4A!lanatory B"lletin dated March
))= )((* wherein it clariGed that em!loyees are entitled to 5++X of their #asic wae on A!ril (=
)((*= whether "nwor;ed= which a!art from #ein Good :riday is also Araw n Kaitinan= #oth
leal holidays&
The #"lletin reads$ LOn the correct !ayment of holiday com!ensation on A!ril (= )((* which
a!art from #ein Good :riday is also Araw n Kaitinan= i&e&= two re"lar holidays fallin on the
same day= this De!artment is of the view that the covered em!loyees are entitled to at least two
h"ndred !ercent -5++X. of their #asic wae even if said holiday is "nwor;ed& The Grst )++X
re!resents the !ayment of holiday !ay on A!ril (= )((* as Good :riday and the second )++X is
the !ayment of holiday !ay for the same date as Araw n Kaitinan&
Said #"lletin was re!rod"ced on %an"ary 5*= )((3= when A!ril (= )((3 was #oth Ma"ndy
Th"rsday and Araw n Kaitinan& Des!ite the eA!lanatory #"lletin= VAsian Transmission
Cor!oration o!ted to !ay its daily !aid em!loyees only )++X of their #asic !ay on A!ril (= )((3&
Res!ondent Bisi n Asian Transmission La#or Union -BATLU. !rotested&
1n accordance with Ste! 0 of the rievance !roced"re of the Collective Barainin Areement
-CBA. eAistin #etween !etitioner and BATLU= the controversy was s"#mitted for vol"ntary
ar#itration& On %"ly *)= )((3= the OIce of the 9ol"ntary Ar#itrator rendered a decision directin
!etitioner to !ay its covered em!loyees L5++X and not E"st )++X of their re"lar daily waes for
the "nwor;ed A!ril (= )((3 which covers two re"lar holidays= namely= Araw n Kaitinan and
Ma"ndy Th"rsday&L
1SSU4$
>hether or not the em!loyees are entitled to the com!"tation em#odied in the #"lletin
clariGcation&
RUL1NG$
The em!loyees are entitled to the com!"tation iven in the #"lletin clariGcation&
S"#Eect of inter!retation in the case at #ar is Article (2 of the La#or Code which reads$ Riht
to holiday !ay& O -a. 4very wor;er shall #e !aid his re"lar daily wae d"rin re"lar holidays=
eAce!t in retail and service esta#lishments re"larly em!loyin less than ten -)+. wor;ersM -#.
The em!loyer may reD"ire an em!loyee to wor; on any holiday #"t s"ch em!loyee shall #e !aid
a com!ensation eD"ivalent to twice his re"lar rateM and -c. As "sed in this Article= LholidayL
incl"des$ New BearNs Day= Ma"ndy Th"rsday= Good :riday= the ninth of A!ril= the Grst of May= the
twelfth of %"ne= the fo"rth of %"ly= the thirtieth of Novem#er= the twenty8Gfth and thirtieth of
Decem#er and the day desinated #y law for holdin a eneral election= which was amended #y
4Aec"tive Order No& 5+* iss"ed on %"ne *+= )(3,= s"ch that the re"lar holidays are now$
)& New BearNs Day %an"ary )
5& Ma"ndy Th"rsday Mova#le Date
*& Good :riday Mova#le Date
2& Araw n KaitinanA!ril ( -Bataan and Correidor Day.
6& La#or Day May )
0& 1nde!endence Day %"ne )5
,& National ?eroes Day Last S"nday of A""st
3& Bonifacio Day Novem#er *+
(& Christmas Day Decem#er 56
)+& Ri7al Day Decem#er *+
The Co"rt arees with the vol"ntary ar#itrator& The 9ol"ntary Ar#itrator held that Article (2 of
the La#or Code !rovides for holiday !ay for every re"lar holiday= the com!"tation of which is
determined #y a leal form"la which is not chaned #y the fact that there are two holidays
fallin on one day= li;e on A!ril (= )((3 when it was Araw n Kaitinan and at the same time
was Ma"ndy Th"rsdayM and that that the law= as amended= en"merates ten re"lar holidays for
every year sho"ld not #e inter!reted as a"thori7in a red"ction to nine the n"m#er of !aid
re"lar holidays LE"st #eca"se A!ril ( -Araw n Kaitinan. in certain years= li;e )((* and )((3=
is also ?oly :riday or Ma"ndy Th"rsday&L
?oliday !ay is a leislated #eneGt enacted as !art of the Constit"tional im!erative that the State
shall aHord !rotection to la#or& 1ts !"r!ose is not merely Lto !revent dimin"tion of the monthly
income of the wor;ers on acco"nt of wor; interr"!tions& 1n other words= altho"h the wor;er is
forced to ta;e a rest= he earns what he sho"ld earn= that is= his holiday !ay&L 3 1t is also intended
to ena#le the wor;er to !artici!ate in the national cele#rations held d"rin the days identiGed as
with reat historical and c"lt"ral siniGcance&
1nde!endence Day -%"ne )5.= Araw n Kaitinan -A!ril (.= National ?eroes Day -last S"nday of
A""st.= Bonifacio Day -Novem#er *+. and Ri7al Day -Decem#er *+. were declared national
holidays to aHord :ili!inos with a rec"rrin o!!ort"nity to commemorate the heroism of the
:ili!ino !eo!le= !romote national identity= and dee!en the s!irit of !atriotism&
La#or Day -May ). is a day traditionally reserved to cele#rate the contri#"tions of the wor;in
class to the develo!ment of the nation= while the reliio"s holidays desinated in 4Aec"tive
Order No& 5+* allow the wor;er to cele#rate his faith with his family&
As reTected a#ove= Art& (2 of the La#or Code= as amended= aHord a wor;er the enEoyment of ten
!aid re"lar holidays& The !rovision is mandatory= reardless of whether an em!loyee is !aid on
a monthly or daily #asis& Unli;e a #on"s= which is a manaement !reroative= holiday !ay is a
stat"tory #eneGt demanda#le "nder the law& Since a wor;er is entitled to the enEoyment of ten
!aid re"lar holidays= the fact that two holidays fall on the same date sho"ld not o!erate to
red"ce to nine the ten holiday !ay #eneGts a wor;er is entitled to receive&
Au"obus )ranspor" Ss"e# vs. Bau"is"a
G&R& No& )60*02M May )0= 5++6
:ACTS$
Res!ondent Antonio Ba"tista has #een em!loyed #y !etitioner A"to B"s Trans!ort Systems= 1nc&=
since May )((6= as driver8cond"ctor with travel ro"tes Manila8T""earao via Ba"io= Ba"io8
T""earao via Manila and Manila8Ta#"; via Ba"io& Res!ondent was !aid on commission #asis=
seven !ercent -,X. of the total ross income !er travel= on a twice a month #asis&
On %an"ary 5+++= while res!ondent was drivin A"to#"s No& ))2 alon Sta& :e= N"eva 9i7caya=
the #"s he was drivin accidentally #"m!ed the rear !ortion of A"to#"s No& )52= as the latter
vehicle s"ddenly sto!!ed at a shar! c"rve witho"t ivin any warnin& Res!ondent averred that
the accident ha!!ened #eca"se he was com!elled #y the manaement to o #ac; to RoAas=
1sa#ela= altho"h he had not sle!t for almost twenty8fo"r -52. ho"rs= as he had E"st arrived in
Manila from RoAas= 1sa#ela&
Res!ondent f"rther alleed that he was not allowed to wor; "ntil he f"lly !aid the amo"nt of
',6=66)&6+= re!resentin thirty !ercent -*+X. of the cost of re!air of the damaed #"ses and
that des!ite res!ondentNs !leas for reconsideration= the same was inored #y manaement& After
a month= manaement sent him a letter of termination& Th"s= on +5 :e#r"ary 5+++= res!ondent
instit"ted a Com!laint for 1lleal Dismissal with Money Claims for non!ayment of )*th month !ay
and service incentive leave !ay aainst A"to#"s&
On 5( Se!tem#er 5+++= #ased on the !leadins and s"!!ortin evidence !resented #y the
!arties= La#or Ar#iter decided that the com!laint #e dismissed where the res!ondent m"st !ay to
the com!lainant&
1SSU4$
>hether or not res!ondent is entitled to service incentive leave&
RUL1NG$
The res!ondent is entitled to service incentive leave&
The dis!osition of the iss"e revolves aro"nd the !ro!er inter!retation of Article (6 of the La#or
Code vis8b8vis Section )-D.= R"le 9= Boo; 111 of the 1m!lementin R"les and Re"lations of the
La#or Code which !rovides$ R1G?T TO S4R91C4 1NC4NT194 L4A94= -a. 4very em!loyee who has
rendered at least one year of service shall #e entitled to a yearly service incentive leave of Gve
days with !ay&
Moreover= Boo; 111= R"le 9$ S4R91C4 1NC4NT194 L4A94 also states that this r"le shall a!!ly to all
em!loyees eAce!t$ -d. :ield !ersonnel and other em!loyees whose !erformance is "ns"!ervised
#y the em!loyer incl"din those who are enaed on tas; or contract #asis= !"rely commission
#asis= or those who are !aid in a GAed amo"nt for !erformin wor; irres!ective of the time
cons"med in the !erformance thereofM
A caref"l eAamination of said !rovisions of law will res"lt in the concl"sion that the rant of
service incentive leave has #een delimited #y the 1m!lementin R"les and Re"lations of the
La#or Code to a!!ly only to those em!loyees not eA!licitly eAcl"ded #y Section ) of R"le 9&
Accordin to the 1m!lementin R"les= Service 1ncentive Leave shall not a!!ly to em!loyees
classiGed as LGeld !ersonnel&L
The !hrase Lother em!loyees whose !erformance is "ns"!ervised #y the em!loyerL m"st not #e
"nderstood as a se!arate classiGcation of em!loyees to which service incentive leave shall not
#e ranted& Rather= it serves as an am!liGcation of the inter!retation of the deGnition of Geld
!ersonnel "nder the La#or Code as those Lwhose act"al ho"rs of wor; in the Geld cannot #e
determined with reasona#le certainty&L
The same is tr"e with res!ect to the !hrase Lthose who are enaed on tas; or contract #asis=
!"rely commission #asis&L Said !hrase sho"ld #e related with LGeld !ersonnel=L a!!lyin the r"le
on eE"sdem eneris that eneral and "nlimited terms are restrained and limited #y the !artic"lar
terms that they follow& ?ence= em!loyees enaed on tas; or contract #asis or !aid on !"rely
commission #asis are not a"tomatically eAem!ted from the rant of service incentive leave=
"nless= they fall "nder the classiGcation of Geld !ersonnel&
>hat m"st #e ascertained in order to resolve the iss"e of !ro!riety of the rant of service
incentive leave to res!ondent is whether or not he is a Geld !ersonnel&
Accordin to Article 35 of the La#or Code= LGeld !ersonnelL shall refer to non8aric"lt"ral
em!loyees who re"larly !erform their d"ties away from the !rinci!al !lace of #"siness or
#ranch oIce of the em!loyer and whose act"al ho"rs of wor; in the Geld cannot #e determined
with reasona#le certainty& This deGnition is f"rther ela#orated in the B"rea" of >or;in
Conditions -B>C.= Advisory O!inion to 'hili!!ine Technical8Clerical Commercial 4m!loyees
Association )+ which states that$
As a eneral r"le= Geld !ersonnel are those whose !erformance of their Eo#Jservice is not
s"!ervised #y the em!loyer or his re!resentative= the wor;!lace #ein away from the !rinci!al
oIce and whose ho"rs and days of wor; cannot #e determined with reasona#le certaintyM hence=
they are !aid s!eciGc amo"nt for renderin s!eciGc service or !erformin s!eciGc wor;& 1f
reD"ired to #e at s!eciGc !laces at s!eciGc times= em!loyees incl"din drivers cannot #e said to
#e Geld !ersonnel des!ite the fact that they are !erformin wor; away from the !rinci!al oIce
of the em!loyee&
At this !oint= it is necessary to stress that the deGnition of a LGeld !ersonnelL is not merely
concerned with the location where the em!loyee re"larly !erforms his d"ties #"t also with the
fact that the em!loyeeNs !erformance is "ns"!ervised #y the em!loyer& As disc"ssed a#ove= Geld
!ersonnel are those who re"larly !erform their d"ties away from the !rinci!al !lace of #"siness
of the em!loyer and whose act"al ho"rs of wor; in the Geld cannot #e determined with
reasona#le certainty& Th"s= in order to concl"de whether an em!loyee is a Geld em!loyee= it is
also necessary to ascertain if act"al ho"rs of wor; in the Geld can #e determined with reasona#le
certainty #y the em!loyer& 1n so doin= an inD"iry m"st #e made as to whether or not the
em!loyeeNs time and !erformance are constantly s"!ervised #y the em!loyer& Res!ondent is not
a Geld !ersonnel #"t a re"lar em!loyee who !erforms tas;s "s"ally necessary and desira#le to
the "s"al trade of !etitionerNs #"siness& Accordinly= res!ondent is entitled to the rant of service
incentive leave&
The clear !olicy of the La#or Code is to rant service incentive leave !ay to wor;ers in all
esta#lishments= s"#Eect to a few eAce!tions& Section 5= R"le 9= Boo; 111 of the 1m!lementin R"les
and Re"lations !rovides that Levery em!loyee who has rendered at least one year of service
shall #e entitled to a yearly service incentive leave of Gve days with !ay&L
Service incentive leave is a riht which accr"es to every em!loyee who has served Lwithin )5
months= whether contin"o"s or #ro;en rec;oned from the date the em!loyee started wor;in=
incl"din a"thori7ed a#sences and !aid re"lar holidays "nless the wor;in days in the
esta#lishment as a matter of !ractice or !olicy= or that !rovided in the em!loyment contracts= is
less than )5 months= in which case said !eriod shall #e considered as one year&L 1t is also
Lcomm"ta#le to its money eD"ivalent if not "sed or eAha"sted at the end of the year&L 1n other
words= an em!loyee who has served for one year is entitled to it& ?e may "se it as leave days or
he may collect its monetary val"e& To limit the award to three years= as the solicitor eneral
recommends= is to "nd"ly restrict s"ch riht&
San Miguel Corp., vs. &el Rosario
G&R& No& )03)(2M Dec& )*= 5++6
:ACTS$
On A!ril ),= 5+++= res!ondent was em!loyed #y !etitioner as ;ey acco"nt s!ecialist& On March (=
5++)= !etitioner informed res!ondent that her !ro#ationary em!loyment will #e severed at the
close of the #"siness ho"rs of March )5= 5++)& On March )*= 5++)= res!ondent was ref"sed
entry to !etitionerNs !remises& On %"ne 52= 5++5= res!ondent Gled a com!laint aainst !etitioner
for illeal dismissal and "nder!aymentJnon8!ayment of monetary #eneGts& Res!ondent alleed
that !etitioner feined an eAcess in man!ower #eca"se after her dismissal= it hired new recr"its
and re8em!loyed two of her #atch mates& On the other hand= !etitioner claimed that res!ondent
was a !ro#ationary em!loyee whose services were terminated as a res"lt of the eAcess
man!ower that co"ld no loner #e accommodated #y the com!any&
The La#or Ar#iter declared res!ondent a re"lar em!loyee #eca"se her em!loyment eAceeded
siA months and holdin that she was illeally dismissed as there was no a"thori7ed ca"se to
terminate her em!loyment& On a!!eal to NLRC= it modiGed the !revio"s decision&
1SSU4$
>hether or not the res!ondent was an em!loyee and was illeally terminated& 1f so= is she
entitled to monetary #eneGtsZ
RUL1NG$
1n termination cases= the #"rden of !rovin the circ"mstances that wo"ld E"stify the em!loyeeNs
dismissal rests with the em!loyer& The #est !roof that !etitioner sho"ld have !resented to !rove
the !ro#ationary stat"s of res!ondent is her em!loyment contract& None= havin #een !resented=
the contin"o"s em!loyment of res!ondent as an acco"nt s!ecialist for almost )) months= from
A!ril ),= 5+++ to March )5= 5++)= means that she was a re"lar em!loyee and not a tem!orary
reliever or a !ro#ationary em!loyee& And while it is tr"e that #y way of eAce!tion= the !eriod of
!ro#ationary em!loyment may eAceed siA months when the !arties so aree= s"ch as when the
same is esta#lished #y com!any !olicy= or when it is reD"ired #y the nat"re of the wor;= none of
these eAce!tional circ"mstance were !roven in the !resent case& Th"s= res!ondent whose
em!loyment eAceeded siA months is "ndo"#tedly a re"lar em!loyee of !etitioner&
?er termination from em!loyment m"st #e for a E"st or a"thori7ed ca"se= otherwise= her
dismissal wo"ld #e illeal& 'etitioner tried to E"stify the dismissal of res!ondent "nder the
a"thori7ed ca"se of red"ndancy& 1t th"s ar"ed in the alternative that even ass"min that
res!ondent D"aliGed for re"lar em!loyment= her services still had to #e terminated #eca"se
there are no more re"lar !ositions in the com!any& Undo"#tedly= !etitioner is invo;in a
red"ndancy which alleedly res"lted in the termination not only of the trainees= !ro#ationers #"t
also of some of its re"lar em!loyees&
Red"ndancy= for !"r!oses of the La#or Code= eAists where the services of an em!loyee are in
eAcess of what is reasona#ly demanded #y the act"al reD"irements of the enter!rise& S"ccinctly
!"t= a !osition is red"ndant where it is s"!erT"o"s= and s"!erT"ity of a !osition or !ositions may
#e the o"tcome of a n"m#er of factors= s"ch as overhirin of wor;ers= decreased vol"me of
#"siness= or dro!!in of a !artic"lar !rod"ct line or service activity !revio"sly man"fact"red or
"nderta;en #y the enter!rise& The criteria in im!lementin a red"ndancy are$ -a. less !referred
stat"s= e&& tem!orary em!loyeeM -#. eIciencyM and -c. seniority& >hat f"rther militated aainst
the alleed red"ndancy advanced #y !etitioner is their fail"re to ref"te res!ondentNs assertion
that after her dismissal= it hired new recr"its and re8em!loyed two of her #atch mates& The Co"rt
Gnds that !etitioner was not a#le to dischare the #"rden of !rovin that the dismissal of
res!ondent was valid&
Considerin that res!ondent was illeally dismissed= she is entitled not only to reinstatement #"t
also to !ayment of f"ll #ac; waes= com!"ted from the time her com!ensation was act"ally
withheld from her on March )*= 5++)= "! to her act"al reinstatement& She is li;ewise entitled to
other #eneGts= i&e&= service incentive leave !ay and )*th month !ay com!"ted from s"ch date
also "! to her act"al reinstatement& Res!ondent is not entitled to holiday !ay #eca"se the
records reveal that she is a monthly !aid re"lar em!loyee& Under Section 5= R"le 19= Boo; 111 of
the Omni#"s R"les 1m!lementin the La#or Code= em!loyees who are "niformly !aid #y the
month= irres!ective of the n"m#er of wor;in days therein= shall #e !res"med to #e !aid for all
the days in the month whether wor;ed or not&
Penaran!a vs. Baganga Plwoo! Corp.
G&R& No& )6(6,,M May *= 5++0
:ACTS$
Sometime in %"ne )(((= 'etitioner Charlito 'eFaranda was hired as an em!loyee of Baana
'lywood Cor!oration -B'C. to ta;e chare of the o!erations and maintenance of its steam !lant
#oiler& 1n May 5++)= 'eFaranda Gled a Com!laint for illeal dismissal with money claims aainst
B'C and its eneral manaer= ?"dson Ch"a= #efore the NLRC&
After the !arties failed to settle amica#ly= the la#or ar#iter directed the !arties to Gle their
!osition !a!ers and s"#mit s"!!ortin doc"ments&
'eFaranda allees that he was em!loyed #y res!ondent Banana on March )6= )((( with a
monthly salary of '6=+++&++ as :oremanJBoiler ?eadJShift 4nineer "ntil he was illeally
terminated on Decem#er )(= 5+++& he allees that his services were terminated witho"t the
#eneGt of d"e !rocess and valid ro"nds in accordance with law& :"rthermore= he was not !aid
his overtime !ay= !remi"m !ay for wor;in d"rin holidaysJrest days= niht shift diHerentials and
Gnally claimed for !ayment of damaes and attorneyNs fees havin #een forced to litiate the
!resent com!laint&
Res!ondent B'C is a domestic cor!oration d"ly orani7ed and eAistin "nder 'hili!!ine laws and
is re!resented herein #y its General Manaer ?UDSON C?UA= the individ"al res!ondent&
Res!ondents allee that com!lainantNs se!aration from service was done !"rs"ant to Art& 53* of
the La#or Code& The res!ondent B'C was on tem!orary clos"re d"e to re!air and eneral
maintenance and it a!!lied for clearance with the De!artment of La#or and 4m!loyment=
Reional OIce No& ]1= to sh"t down and to dismiss em!loyees& And d"e to the insistence of
herein com!lainant he was !aid his se!aration #eneGts&
ConseD"ently= when res!ondent B'C !artially reo!ened in %an"ary 5++)= 'eFaranda failed to
rea!!ly&
The la#or ar#iter r"led that there was no illeal dismissal and that !etitionerNs Com!laint was
!remat"re #eca"se he was still em!loyed #y B'C& 'etitioner<s money claims for illeal dismissal
was also wea;ened #y his D"itclaim and admission d"rin the clariGcatory conference that he
acce!ted se!aration #eneGts= sic; and vacation leave conversions and thirteenth month !ay&
1SSU4$
>hether or not 'eFaranda is a re"lar= common em!loyee entitled to monetary #eneGts "nder
Art& 35 of the La#or Code and is entitled to the !ayment of overtime !ay and other monetary
#eneGts&
RUL1NG$
The !etitioner is not entitled to overtime !ay and other monetary #eneGts&
The Co"rt disarees with the NLRCNs Gndin that !etitioner was a manaerial em!loyee&
?owever= !etitioner was a mem#er of the manaerial staH= which also ta;es him o"t of the
coverae of la#or standards& Li;e manaerial em!loyees= oIcers and mem#er of the manaerial
staH are not entitled to the !rovisions of law on la#or standards&
The 1m!lementin R"les of the La#or Code deGne mem#ers of a manaerial staH as those with
the followin d"ties and res!onsi#ilities$
-). The !rimary d"ty consists of the !erformance of wor; directly related to manaement
!olicies of the em!loyerM
-*. -i. Re"larly and directly assist a !ro!rietor or a manaerial em!loyee whose !rimary d"ty
or -ii. eAec"te "nder eneral s"!ervision wor; alon s!eciali7ed or technical lines reD"irin
s!ecial trainin= eA!erience= or ;nowledeM or -iii. eAec"te "nder eneral s"!ervision s!ecial
assinments and tas;sM and
-2. who do not devote more than 5+ !ercent of their ho"rs wor;ed in a wor;wee; to activities
!arara!hs -).= -5.= and -*. a#ove&L
The !etitioner<s wor; involves$
)& To s"!!ly the reD"ired and contin"o"s steam to all cons"min "nits at minim"m cost&
5& To s"!ervise= chec; and monitor man!ower wor;manshi! as well as o!eration of #oiler and
accessories&
*& To eval"ate !erformance of machinery and man!ower&
2& To follow8"! s"!!ly of waste and other materials for f"el&
6& To train new em!loyees for eHective and safety white wor;in&
0& Recommend !arts and s"!!liers !"rchases&
,& To recommend !ersonnel actions s"ch as$ !romotion= or disci!linary action&
3& To chec; water from the #oiler= feedwater and softener= reenerate softener if #eyond
hardness limit&
(& 1m!lement Chemical Dosin&
)+& 'erform other tas; as reD"ired #y the s"!erior from time to time&L *2
The foreoin en"meration= !artic"larly items= )= 5= *= 6 and , ill"strates that !etitioner was a
mem#er of the manaerial staH& ?is d"ties and res!onsi#ilities conform to the deGnition of a
mem#er of a manaerial staH "nder the 1m!lementin R"les&
'etitioner s"!ervised the enineerin section of the steam !lant #oiler& ?is wor; involved
overseein the o!eration of the machines and the !erformance of the wor;ers in the enineerin
section& This wor; necessarily reD"ired the "se of discretion and inde!endent E"dment to ens"re
the !ro!er f"nctionin of the steam !lant #oiler& As s"!ervisor= !etitioner is deemed a mem#er of
the manaerial staH&
Noteworthy= even !etitioner admitted that he was a s"!ervisor& 1n his 'osition 'a!er= he stated
that he was the foreman res!onsi#le for the o!eration of the #oiler& The term foreman im!lies
that he was the re!resentative of manaement over the wor;ers and the o!eration of the
de!artment& 'etitionerNs evidence also showed that he was the s"!ervisor of the steam !lant&
?is classiGcation as s"!ervisors is f"rther evident from the manner his salary was !aid& ?e
#eloned to the )+X of res!ondentNs *62 em!loyees who were !aid on a monthly #asisM the
others were !aid only on a daily #asis&
Le"e I' Elec"ric Coopera"ive Inc. vs. LE7EC6 I' E#ploees <nion% AL<
G&R& No& )6,,,26M Octo#er )(= 5++,
:ACTS$
On A!ril 0= )((3= Leyte 19 4lectric Coo!erative= 1nc& -!etitioner. and Leyeco 19 4m!loyees Union8
ALU -res!ondent. entered into a Collective Barainin Areement -CBA. coverin !etitioner ran;8
and8Gle em!loyees= for a !eriod of Gve -6. years eHective %an"ary )= )((3& On %"ne ,= 5+++=
res!ondent= thro"h its Reional 9ice8'resident= 9icente '& Casilan= sent a letter to !etitioner
demandin holiday !ay for all em!loyees= as !rovided for in the CBA&
'etitioner= on the other hand= in its 'osition 'a!er= insisted !ayment of the holiday !ay in
com!liance with the CBA !rovisions= statin that !ayment was !res"med since the form"la "sed
in determinin the daily rate of !ay of the covered em!loyees is Basic Monthly Salary divided #y
*+ days or Basic Monthly Salary m"lti!lied #y )5 divided #y *0+ days= th"s with said form"la= the
em!loyees are already !aid their re"lar and s!ecial days= the days when no wor; is done= the
6) "n8wor;ed S"ndays and the 6) "n8wor;ed Sat"rdays&
1SSU4$
>hether or not Leyte 19 4lectric Coo!erative is lia#le for "nder!ayment of holiday !ay&
RUL1NG$
The 9ol"ntary Ar#itrator ravely a#"sed its discretion in ivin a strict or literal inter!retation of
the CBA !rovisions that the holiday !ay #e reTected in the !ayroll sli!s& S"ch literal
inter!retation inores the admission of res!ondent in its 'osition 'a!er that the em!loyees were
!aid all the days of the month even if not wor;ed& 1n liht of s"ch admission= !etitionerNs
s"#mission of its *0+ divisor in the com!"tation of em!loyeesN salaries ains siniGcance&
This r"lin was a!!lied in >ellinton 1nvestment and Man"fact"rin Cor!oration v& TraEano= 2*
'rod"cers Ban; of the 'hili!!ines v& National La#or Relations Commission& 1n this case= the
monthly salary was GAed #y >ellinton to !rovide for com!ensation for every wor;in day of the
year incl"din the holidays s!eciGed #y law O and eAcl"din only S"ndays& 1n GAin the salary=
>ellinton "sed what it called the L*)2 factorLM that is= it sim!ly ded"cted 6) S"ndays from the
*06 days normally com!risin a year and "sed the diHerence= *)2= as #asis for determinin the
monthly salary& The monthly salary th"s GAed act"ally covered !ayment for *)2 days of the year=
incl"din re"lar and s!ecial holidays= as well as days when no wor; was done #y reason of
fort"ito"s ca"se= s"ch as trans!ortation stri;e= riot= or ty!hoon or other nat"ral calamity= or
ca"se not attri#"ta#le to the em!loyees&
1t was also a!!lied in Odano v& National La#or Relations Commission= where Co"rt r"led that the
"se of a divisor that was less than *06 days cannot ma;e the em!loyer a"tomatically lia#le for
"nder!ayment of holiday !ay& 1n said case= the em!loyees were reD"ired to wor; only from
Monday to :riday and half of Sat"rday& Th"s= the minim"m allowa#le divisor is 53,= which is the
res"lt of *06 days= less 65 S"ndays and less 50 Sat"rdays -or 65 half Sat"rdays.& Any divisor
#elow 53, days meant that the em!loyees were de!rived of their holiday !ay for some or all of
the ten leal holidays& The *+28day divisor "sed #y the em!loyer was clearly a#ove the minim"m
of 53, days&
1n this case= the em!loyees are reD"ired to wor; only from Monday to :riday& Th"s= the minim"m
allowa#le divisor is 50*= which is arrived at #y ded"ctin 6) "n8wor;ed S"ndays and 6) "n8
wor;ed Sat"rdays from *06 days& Considerin that !etitioner "sed the *0+8day divisor= which is
clearly a#ove the minim"m= ind"#ita#ly= !etitionerNs em!loyees are #ein iven their holiday
!ay& Th"s= the 9ol"ntary Ar#itrator sho"ld not have sim!ly #r"shed aside !etitionerNs divisor
form"la& 1n rantin res!ondentNs claim of non8!ayment of holiday !ay= a Ldo"#le #"rdenL was
im!osed "!on !etitioner #eca"se it was #ein made to !ay twice for its em!loyeesN holiday !ay
when !ayment thereof had already #een incl"ded in the com!"tation of their monthly salaries&
?ence= the !etition is ranted&
Bahia Shipping Services vs. Chua
G&R& No& )05)(6M A!ril 3= 5++3
:ACTS$
'rivate res!ondent Reynaldo Ch"a was hired #y the !etitioner shi!!in com!any= Bahia Shi!!in
Services= 1nc&= as a resta"rant waiter on #oard a l"A"ry cr"ise shi! liner MJS Blac; >atch
!"rs"ant to a 'hili!!ine Overseas 4m!loyment Administration -'O4A. a!!roved em!loyment
contract dated Octo#er (= )((0 for a !eriod of nine -(. months from Octo#er )3= )((0 to %"ly ),=
)((,& On Octo#er )3= )((0= the !rivate res!ondent left Manila for ?eathrow= 4nland to #oard
the said sea vessel where he will #e assined to wor;& On :e#r"ary )6= )((,= the !rivate
res!ondent re!orted for his wor;in station one and one8half ho"rs late& On :e#r"ary ),= )((,=
the master of the vessel served to the !rivate res!ondent an oIcial warnin8termination form
!ertainin to the said incident& On March 3= )((,= the vesselNs master= shi! ca!tain Thor :leten
cond"cted an inD"isitorial hearin to investiate the said incident& Thereafter= on March (= )((,=
!rivate res!ondent was dismissed from the service on the strenth of an "nsined and "ndated
notice of dismissal& An alleed record or min"tes of the said investiation was attached to the
said dismissal notice&
On March 52= )((,= the !rivate res!ondent Gled a com!laint for illeal dismissal and other
monetary claims& The !rivate res!ondent alleed that he was !aid only USg*++&++ !er month as
monthly salary for Gve -6. months instead of USg2)+&++ as sti!"lated in his em!loyment
contract& Th"s= he claimed that he was "nder!aid in the amo"nt of USg))+&++ !er month for that
same !eriod of Gve -6. months& ?e f"rther asserted that his salaries were also ded"cted
USg5+&++ !er month #y the !etitioner for alleed "nion d"es& 'rivate res!ondent ar"ed that it
was his Grst oHense committed on #oard the vessel& ?e adverted f"rther that the !etitioner has
no !roof of #ein a mem#er of the AMOSU' or the 1T: to E"stify its claim to ded"ct the said "nion
d"es VfromW his monthly salary&
1SSU4$
>hether or not re!ortin for wor; one and one8half ho"rs late and a#andonin his wor; are valid
ro"nds for dismissal&
RUL1NG$
1t #ein settled that the dismissal of res!ondent was illeal= it follows that the latter is entitled to
!ayment of his salary for the "neA!ired !ortion of his contract= as !rovided "nder Re!"#lic Act
-R&A&. No& 3+25= considerin that his em!loyment was !re8terminated on March (= )((, or fo"r
months !rior to the eA!iration of his em!loyment contract on %"ly ),= )((,&
Article 5,( of the La#or Code= as amended= mandates that an illeally dismissed em!loyee is
entitled to the twin reliefs of -a. either reinstatement or se!aration !ay= if reinstatement is no
loner via#le= and -#. #ac;waes& Both are distinct reliefs iven to alleviate the economic
damae s"Hered #y an illeally dismissed em!loyee and= th"s= the award of one does not #ar the
other& Both reliefs are rihts ranted #y s"#stantive law which cannot #e defeated #y mere
!roced"ral la!ses& S"#stantive rihts li;e the award of #ac;waes res"ltin from illeal dismissal
m"st not #e !reE"diced #y a riid and technical a!!lication of the r"les& The order of the Co"rt of
A!!eals to award #ac;waes #ein a mere leal conseD"ence of the Gndin that res!ondents
were illeally dismissed #y !etitioners= there was no error in awardin the same&
The Co"rt has consistently a!!lied the foreoin eAce!tion to the eneral r"le& 1t does so yet
aain in the !resent case& Section )+ of R&A& No& 3+25= entitles an overseas wor;er who has #een
illeally dismissed to Lhis salaries for the "neA!ired !ortion of the em!loyment contract or for
three -*. months for every year of the "neA!ired term= whichever is less&L The CA correctly
a!!lied the inter!retation of the Co"rt in Marsaman Mannin Aency= 1nc& v& National La#or
Relations Commission that the second o!tion which im!oses a three months salary ca! a!!lies
only when the term of the overseas contract is GAed at one year or lonerM otherwise= the Grst
o!tion a!!lies in that the overseas wor;er shall #e entitled !ayment of all his salaries for the
entire "neA!ired !eriod of his contract&
PNCC vs. S*wa )raLc Manage#en" an! Securi" &ivision 2or*ers 6rgani$a"ion
G&R& N& ),)5*)M :e# ),= 5+)+
:ACTS$
'etitioner 'NCC S;yway Cor!oration TraIc Manaement and Sec"rity Division >or;ersN
Orani7ation -'STMSD>O. is a la#or "nion d"ly reistered with the De!artment of La#or and
4m!loyment -DOL4.& Res!ondent 'NCC S;yway Cor!oration is a cor!oration d"ly orani7ed and
o!eratin "nder and #y virt"e of the laws of the 'hili!!ines& They entered into CBA& 'ertinent
!rovisions are as follows$
ART1CL4 9111 9ACAT1ON L4A94 AND S1CK L4A94
Section )& 9acation Leave&
V#WThe com!any shall sched"le the vacation leave of em!loyees d"rin the year ta;in into
consideration the reD"est of !reference of the em!loyees&
'NCC then created a sched"le of leaves for their em!loyees& 'etitioner o#Eected to the
im!lementation of the said memorand"m& 1t insisted that the individ"al mem#ers of the "nion
have the riht to sched"le their vacation leave& 1t o!ined that the "nilateral sched"lin of the
em!loyeesN vacation leave was done to avoid the moneti7ation of their vacation leave in
Decem#er 5++2&
1SSU4$
>ON the 'NCC has the sole discretion to sched"le the vacation leaves of its em!loyees&
RUL1NG$
'NCC has the sole discretion to sched"le the vacation leaves of its em!loyees&
The r"le is that where the lan"ae of a contract is !lain and "nam#i"o"s= its meanin sho"ld
#e determined witho"t reference to eAtrinsic facts or aids& The intention of the !arties m"st #e
athered from that lan"ae= and from that lan"ae alone& Stated diHerently= where the
lan"ae of a written contract is clear and "nam#i"o"s= the contract m"st #e ta;en to mean
that which= on its face= it !"r!orts to mean= "nless some ood reason can #e assined to show
that the words "sed sho"ld #e "nderstood in a diHerent sense&
1n the case at #ar= the contested !rovision of the CBA is clear and "neD"ivocal& Article 9111=
Section ) -#. of the CBA cateorically !rovides that the sched"lin of vacation leaves shall #e
"nder the o!tion of the em!loyer& Th"s= if the terms of a CBA are clear and leave no do"#t "!on
the intention of the contractin !arties= the literal meanin of its sti!"lation shall !revail& 1n Gne=
the CBA m"st #e strictly adhered to and res!ected if its ends have to #e achieved= #ein the law
#etween the !arties& 1n :ac"lty Association of Ma!"a 1nstit"te of Technoloy -:AM1T. v& Co"rt of
A!!eals= this Co"rt held that the CBA d"rin its life time #inds all the !arties& The !rovisions of
the CBA m"st #e res!ected since its terms and conditions constit"te the law #etween the !arties&
The !arties cannot #e allowed to chane the terms they areed "!on on the ro"nd that the
same are not favora#le to them&
The !"r!ose of a vacation leave is to aHord a la#orer a chance to et a m"ch8needed rest to
re!lenish his worn8o"t enery and acD"ire a new vitality to ena#le him to eIciently !erform his
d"ties= and not merely to ive him additional salary and #o"nty& Accordinly= the vacation leave
!rivilee was not intended to serve as additional salary= #"t as a non8monetary #eneGt& To ive
the em!loyees the o!tion not to cons"me it with the aim of convertin it to cash at the end of
the year wo"ld defeat the very !"r!ose of vacation leave&
6)5ER SPECIAL BENE(I)S
'illuga vs. NLRC
G&R& No& L8,6+*3M A""st 5*= )((*
:ACTS$
A #asic factor "nderlyin the eAercise of rihts and the Glin of claims for #eneGts "nder the
La#or Code and other !residential iss"ances or la#or leislations is the stat"s and nat"re of oneNs
em!loyment&
'etitioner 4lias 9ill"a was em!loyed as c"tter in the tailorin sho! owned #y !rivate res!ondent
Rodolfo Ra!anta and ;nown as Broad Street Tailorin located at Shaw Bo"levard= Mandal"yon=
Metro Manila& As c"tter= he was !aid a GAed monthly salary of '32+&++ and a monthly
trans!ortation allowance of '2+&++& 1n addition to his wor; as c"tter= 9ill"a was assined the
chore of distri#"tin wor; to the sho!Ns tailors or sewers when #oth the sho!Ns manaer and
assistant manaer wo"ld #e a#sent& ?e saw to it that their wor; conformed with the !attern he
had !re!ared and if not= he had them redone= re!aired or re8sewn&
The other !etitioners were ironers= re!airmen and sewers& They were !aid a GAed amo"nt for
every item ironed= re!aired or sewn= reardless of the time cons"med in accom!lishin the tas;&
'etitioners did not Gll "! any time record since they did not o#serve re"lar or GAed ho"rs of
wor;& They were allowed to !erform their wor; at home es!ecially when the vol"me of wor;=
which de!ended on the n"m#er of Eo# orders= co"ld no loner #e co!ed "! with&
:rom :e#r"ary ), to 55= )(,3= !etitioner 9ill"a failed to re!ort for wor; alleedly d"e to illness&
:or not !ro!erly notifyin his em!loyer= he was considered to have a#andoned his wor;&
1n a com!laint Gled with the Reional OIce of the De!artment of La#or= 9ill"a claimed that he
was ref"sed admittance when he re!orted for wor; after his a#sence= alleedly d"e to his active
!artici!ation in the "nion orani7ed #y !rivate res!ondentNs tailors& ?e f"rther claimed that he
was not !aid overtime !ay= holiday !ay= !remi"m !ay for wor; done on rest days and holidays=
service incentive leave !ay and )*th month !ay&
On May )(,(= La#or Ar#iter rendered a decision orderin the dismissal of the com!laint for "nfair
la#or !ractices= illeal dismissal and other money claims eAce!t !etitioner 9ill"aNs claim for
)*th month !ay for the years )(,0= )(,, and )(3+&
1SSU4$
>hether or not s"ch em!loyment is manaerial in character or that of a ran; and Gle em!loyee
are !rimordial considerations #efore eAtendin la#or #eneGts&
RUL1NG$
The Co"rt r"led that the characteri7ation of s"ch em!loyment is im!ortant in the determination
of #eneGts since some em!loyees are eAem!ted to s"ch #eneGts&
Under R"le 1= Section 5-c.= Boo; 111 of the 1m!lementin R"les of the La#or Code= to #e a mem#er
of a manaerial staH= the followin elements m"st conc"r or co8eAist= to wit$
-). that his !rimary d"ty consists of the !erformance of wor; directly related to manaement
!oliciesM
-5. that he c"stomarily and re"larly eAercises discretion and inde!endent E"dment in the
!erformance of his f"nctionsM
-*. that he re"larly and directly assists in the manaement of the esta#lishmentM and
-2. that he does not devote twenty !er cent of his time to wor; other than those descri#ed
a#ove&
A!!lyin the a#ove criteria to !etitioner 9ill"aNs case= it is "ndis!"ted that his !rimary wor; or
d"ty is to c"t or !re!are !atterns for items to #e sewn= not to lay down or im!lement any of the
manaement !olicies= as there is a manaer and an assistant manaer who !erform said
f"nctions&
1t is tr"e that in the a#sence of the manaer and assistant manaer= he distri#"tes and assins
wor; to em!loyees #"t s"ch d"ty= tho"h involvin discretion= is occasional and not re"lar or
c"stomary& ?e had also the a"thority to order the re!air or resewin of defective items #"t s"ch
a"thority is !art and !arcel of his f"nction as c"tter to see to it that the items c"t are sewn
correctly lest the defective nat"re of the wor;manshi! #e attri#"ted to his L!oor c"ttin&L 9ill"a
does not !artici!ate in !olicy8ma;in& Rather= the f"nctions of his !osition involve eAec"tion of
a!!roved and esta#lished !olicies&
1n :ran;lin Ba;er Com!any of the 'hili!!ines v& TraEano= it was held that em!loyees who do not
!artici!ate in !olicy8ma;in #"t are iven ready !olicies to eAec"te and standard !ractices to
o#serve are not manaerial em!loyees& The test of Ls"!ervisory or manaerial stat"sL de!ends
on whether a !erson !ossesses a"thority that is not merely ro"tinary or clerical in nat"re #"t one
that reD"ires "se of inde!endent E"dment& 1n other words= the f"nctions of the !osition are not
manaerial in nat"re if they only eAec"te a!!roved and esta#lished !olicies leavin little or no
discretion at all whether to im!lement said !olicies or not&
ConseD"ently= the eAcl"sion of 9ill"a from the #eneGts claimed "nder Article 3, -overtime !ay
and !remi"m !ay for holiday and rest day wor;.= Article (2= -holiday !ay.= and Article (6 -service
incentive leave !ay. of the La#or Code= on the ro"nd that he is a manaerial em!loyee is
"nwarranted& ?e is deGnitely a ran; and Gle em!loyee hired to !erform the wor; of a c"tter and
not hired to !erform s"!ervisory or manaerial f"nctions& The fact that he is "niformly !aid #y
the month does not eAcl"de him from the #eneGts of holiday !ay& ?e sho"ld therefore #e !aid in
addition to the )*th month !ay= his overtime !ay= holiday !ay= !remi"m !ay for holiday and rest
day= and service incentive leave !ay&
C1C )ra!ing vs. NLRC
G&R& No& ))6332M %"ly 5+= )((6
:ACTS$
'rivate res!ondents Ricardo A"san= %r& and 4rnesto Alanan were em!loyed #y !etitioner since
)(3* and )(,3 as tr"c; drivers and were !aid on a L!er tri! or tas; #asis&L They Gled se!arate
com!laints on aainst !etitioner C%C Tradin= 1ncor!orated andJor Ms& Celia %& Carlos for illeal
dismissal and non8!ayment of !remi"m !ay for holiday and rest day= service incentive leave !ay
and thirteenth month !ay& These cases were consolidated&
On 55 %"ly )((*= a decision was rendered #y the La#or Ar#iter dismissin the com!laints and
were not entitled to the la#or standards #eneGts claimed #y them #eca"se they were !aid on a
L!er tri! or !er tas; #asis&
On a!!eal= NLRC aIrmed in toto the decision of the La#or Ar#iter&
1SSU4$
>hether or not the res!ondents are entitled to the #eneGts !rovided #y law&
RUL1NG$
The em!loyees are ranted to retirement #eneGts& An em!loyee who vol"ntarily resins is not
entitled to se!aration !ay "nless otherwise sti!"lated in an em!loyment contract or collective
#arainin areement= or sanctioned #y esta#lished em!loyer !ractice or !olicy& The La#or Code
is devoid of any !rovision which rants se!aration !ay to em!loyees who vol"ntarily resin&
Neither was there anythin in the record that shows that= in the instant case= there is a collective
#arainin areement or any other areement or esta#lished com!any !olicy concernin the
!ayment of se!aration !ay to em!loyees who resin&
Considerin that !rivate res!ondents were close to the ae of siAty -0+. at the time they sto!!ed
wor;in for !etitioner and that they had #een in the em!loy of !etitioner for several years= the
Co"rt= considers that this co"ld #e deemed to #e in eHect a !rayer for the rant of retirement
#eneGts&
The !ertinent law is Article 53, of the La#or Code= as amended #y R&A& No& ,02)= which reads$
Retirement& O Any em!loyee may #e retired "!on reachin the retirement ae esta#lished in the
collective #arainin areement or other a!!lica#le em!loyment contract&
1n case of retirement= the em!loyee shall #e entitled to receive s"ch retirement #eneGts as he
may have earned "nder eAistin laws and any collective #arainin areement and other
areements$ 'rovided= however= that an em!loyeeNs retirement #eneGts "nder any collective
#arainin and other areements shall not #e less than those !rovided herein&
served at least Gve -6. years in the said esta#lishment= may retire and shall #e entitled to
retirement !ay eD"ivalent to at least one8half -)J5. month salary for every year of service= a
fraction of at least siA -0. months #ein considered as one whole year&
R&A& No& ,02) may #e iven eHect where -). the claimant for retirement #eneGts was still the
em!loyee of the em!loyer at the time the stat"te too; eHectM and -5. the claimant was in
com!liance with the reD"irements for elii#ility "nder the stat"te for s"ch retirement #eneGts& 1t
a!!ears that !rivate res!ondents did not D"alify for the #eneGts of R&A& No& ,02) "nder the
terms of this law itself& Since the record does not show any retirement !lan or collective
#arainin areement !rovidin for retirement #eneGts to !etitionerNs em!loyees= the a!!lica#le
retirement #eneGts to !etitionerNs em!loyees= the a!!lica#le retirement ae is the o!tional
retirement ae of siAty -0+. years accordin to Article 53,= which wo"ld D"alify the retiree to
retirement #eneGts eD"ivalent to one8half -)J5. monthNs salary for every year of service&
Unfort"nately= at the time !rivate res!ondent sto!!ed wor;in for !etitioner= they had not yet
reached the ae of siAty -0+. years& The Co"rt stresses that there is nothin to !revent
!etitioners from vol"ntarily ivin !rivate res!ondents some Gnancial assistance on an eA ratia
#asis&
Pan"ranco Nor"h E9press vs. NLRC
G&R& No& (6(2+M %"ly 52= )((0
:ACTS$
'rivate res!ondent was hired #y !etitioner in )(02 as a #"s cond"ctor& ?e event"ally Eoined the
'antranco 4m!loyees Association8'TG>O& ?e contin"ed in !etitionerNs em!loy "ntil A""st )5=
)(3(= when he was retired at the ae of Gfty8two -65. after havin rendered twenty Gve yearsN
service& The #asis of his retirement was the com!"lsory retirement !rovision of the collective
#arainin areement #etween the !etitioner and the aforenamed "nion& On :e#r"ary )((+=
!rivate res!ondent Gled a com!laint for illeal dismissal aainst !etitioner with NLRC& The
com!laint was consolidated with two other cases of illeal dismissal havin similar facts and
iss"es= Gled #y other em!loyees= non8"nion mem#ers&
La#or Ar#iter rendered his decision Gndin that the three com!lainants were illeally and
"nE"stly dismissed and order the res!ondent to reinstate them to their former or s"#stantially
eD"ivalent !ositions witho"t loss of seniority rihts with f"ll #ac; waes and other #eneGts&
'etitioner a!!ealed to !"#lic res!ondent= which iss"ed the D"estioned Resol"tion aIrmin the
la#or ar#iterNs decision in toto&
1SSU4$
>hether or not the CBA sti!"lation on com!"lsory retirement after twenty8Gve years of service is
leal and enforcea#le&
RUL1NG$
The Co"rt r"led that the CBA sti!"lation is leal and enforcea#le&
The #one of contention in this case is the !rovision on com!"lsory retirement after 56 years of
service&
Article ]1= Section ) -e. -6. of the May 5= )(3( Collective Barainin Areement 3 #etween
!etitioner com!any and the "nion states$
Section )& The COM'ANB shall form"late a retirement !lan with the followin main feat"res$
-e. The COM'ANB arees to rant the retirement #eneGts herein !rovided to re"lar em!loyees
who may #e se!arated from the COM'ANB for any of the followin reasons$
-6. U!on reachin the ae of siAty -0+. years or "!on com!letin twenty8Gve -56. years of
service to the COM'ANB= whichever comes Grst= and the em!loyee shall #e com!"lsory retired
and !aid the retirement #eneGts herein !rovided&L
The said Code !rovides$ Art& 53,& Retirement& O Any em!loyee may #e retired "!on
reachin the retirement ae esta#lished in the Collective Barainin Areement or other
a!!lica#le em!loyment contract& 1n case of retirement= the em!loyee shall #e entitled to receive
s"ch retirement #eneGts as he may have earned "nder eAistin laws and any collective
#arainin or other areement&L
The Co"rt arees with !etitioner and the Solicitor General& Art& 53, of the La#or Code as worded
!ermits em!loyers and em!loyees to GA the a!!lica#le retirement ae at #elow 0+ years&
Moreover= !rovidin for early retirement does not constit"te dimin"tion of #eneGts& 1n almost all
co"ntries today= early retirement= i&e&= #efore ae 0+= is considered a reward for services
rendered since it ena#les an em!loyee to rea! the fr"its of his la#or O !artic"larly retirement
#eneGts= whether l"m!8s"m or otherwise O at an earlier ae= when said em!loyee= in
!res"ma#ly #etter !hysical and mental condition= can enEoy them #etter and loner&
As a matter of fact= one of the advantaes of early retirement is that the corres!ondin
retirement #eneGts= "s"ally consistin of a s"#stantial cash windfall= can early on #e !"t to
!rod"ctive and !roGta#le "ses #y way of income8eneratin investments= there#y aHordin a
more siniGcant meas"re of Gnancial sec"rity and inde!endence for the retiree who= "! till then=
had to contend with lifeNs vicissit"des within the !arameters of his fortnihtly or wee;ly waes&
Th"s we are now seein many CBAs with s"ch early retirement !rovisions& And the same cannot
#e considered a dimin"tion of em!loyment #eneGts&
Bein a !rod"ct of neotiation= the CBA #etween the !etitioner and the "nion intended the
!rovision on com!"lsory retirement to #e #eneGcial to the em!loyees8"nion mem#ers= incl"din
herein !rivate res!ondent& >hen !rivate res!ondent ratiGed the CBA with the "nion= he not only
areed to the CBA #"t also areed to conform to and a#ide #y its !rovisions& Th"s= it cannot #e
said that he was illeally dismissed when the CBA !rovision on com!"lsory retirement was
a!!lied to his case&
1ncidentally= we call attention to Re!"#lic Act No& ,02)= ;nown as LThe Retirement 'ay LawL=
which went into eHect on %an"ary ,= )((*& Altho"h !assed many years after the com!"lsory
retirement of herein !rivate res!ondent= nevertheless= the said stat"te sheds liht on the !resent
disc"ssion when it amended
Art& 53, of the La#or Code= to ma;e it read as follows$ Retirement& O Any em!loyee may #e
retired "!on reachin the retirement ae esta#lish in the collective #arainin areement or
other a!!lica#le em!loyment contract&
served at least Gve -6. years in the said esta#lishment may retire & & &L
The aforeD"oted !rovision ma;es clear the intention and s!irit of the law to ive em!loyers and
em!loyees a free hand to determine and aree "!on the terms and conditions of retirement&
'rovidin in a CBA for com!"lsory retirement of em!loyees after twenty8Gve -56. years of service
is leal and enforcea#le so lon as the !arties aree to #e overned #y s"ch CBA& The law
!res"mes that em!loyees ;now what they want and what is ood for them a#sent any showin
that fra"d or intimidation was em!loyed to sec"re their consent thereto&
R8E )ranspor" vs. La"ag
G&R& No& )665)2M :e#& )*= 5++2
:ACTS$
'edro Lata was a re"lar em!loyee of La Mallorca TaAi since March )= )(0)& >hen La Mallorca
ceased from #"siness o!erations= Lata transferred to R @ 4 Trans!ort= 1nc& ?e was receivin an
averae daily salary of Gve h"ndred !esos -'6++&++. as a taAi driver&
Lata ot sic; in %an"ary )((6 and was forced to a!!ly for !artial disa#ility with the SSS= which
was ranted& >hen he recovered= he re!orted for wor; in Se!tem#er )((3 #"t was no loner
allowed to contin"e wor;in on acco"nt of his old ae& Lata th"s as;ed :eliA :a#ros= the
administrative oIcer of V!etitionersW= for his retirement !ay !"rs"ant to Re!"#lic Act ,02) #"t he
was inored&
Th"s= on Decem#er 5)= )((3= LataGled a case for !ayment of his retirement !ay #efore the
NLRC& Lata however died on A!ril *+= )(((& S"#seD"ently= his wife= Avelina Lata= s"#stit"ted
him& On %an"ary )+= 5+++= the La#or Ar#iter rendered a decision in favor of Lata&
1SSU4$
>hether or not Lata is entitled to retirement #eneGts considerin she sined a waiver of
D"itclaim&
RUL1NG$
The res!ondent is entitled to retirement #eneGts des!ite of the waiver of D"itclaims&
There is no dis!"te the fact that the late 'edro M& Lata is entitled to retirement #eneGts& Rather=
the #one of contention is the n"m#er of years that he sho"ld #e credited with in com!"tin those
#eneGts& The Gndins of the NLRC that 'edro m"st #e credited only with his service to R @ 4
Trans!ort= 1nc&= #eca"se the evidence shows that the aforementioned com!anies are two
diHerent entities& After a caref"l and !ainsta;in review of the evidence on record= the co"rt
s"!!orts the NLRCNs Gndins&
As to the C"itclaim and >aiver sined #y Res!ondent Lata= the CA committed no error when it
r"led that the doc"ment was invalid and co"ld not #ar her from demandin the #eneGts leally
d"e her h"s#and& This is not say that all D"itclaims are invalid !er se& Co"rts= however= are wary
of schemes that fr"strate wor;ersN rihts and #eneGts= and loo; with disfavor "!on D"itclaims
and waivers that #arain these away&
Undis!"ta#ly= 'edro M& Lata was credited with )2 years of service with R @ 4 Trans!ort= 1nc&
Article 53, of the La#or Code= as amended #y Re!"#lic Act No& ,02)= *+ !rovides$ Retirement& O
served at least Gve -6. years in said esta#lishment= may retire and shall #e entitled to retirement
!ay eD"ivalent to at least one8half -)J5. month salary for every year of service= a fraction of at
least siA -0. months #ein considered as one whole year& Unless the !arties !rovide for #roader
incl"sions= the term one half8month salary shall mean Gfteen -)6. days !l"s one8twelfth -)J)5. of
the )*th month !ay and the cash eD"ivalent of not more than Gve -6. days of service incentive
leaves&
The r"les im!lementin the New Retirement Law similarly !rovide the a#ove8mentioned form"la
for com!"tin the one8half month salary& Since 'edro was !aid accordin to the L#o"ndaryL
system= he is not entitled to the )*th month *5 and the service incentive !ayM hence= his
retirement !ay sho"ld #e com!"ted on the sole #asis of his salary&
1t is acce!ted that taAi drivers do not receive GAed waes= #"t retain only those s"ms in eAcess of
the L#o"ndaryL or fee they !ay to the owners or o!erators of their vehicles& Th"s= the #asis for
com!"tin their #eneGts sho"ld #e the averae daily income& 1n this case= the CA fo"nd that
'edro was earnin an averae of Gve h"ndred !esos -'6++. !er day& >e th"s com!"te his
retirement !ay as follows$ '6++ A )6 days A )2 years of service eD"als ')+6=+++&
RuFna Pa"is vs. Alusi"ain
G&R& No& )205+5M %"ly )2= 5++2
:ACTS$
On March )(23= Al"sitain was hired as a la#orer at the R"Gna 'atis :actory owned and o!erated
#y !etitioner L"cas& After close to forty three years= Al"sitain admittedly tendered his letter of
resination& On May 55= )(()= Al"sitain eAec"ted a d"ly notari7ed aIdavit of se!aration from
em!loyment and s"#mitted the same on even date to the 'ensions De!artment of the Social
Sec"rity System -SSS.&
On %an"ary ,= )((*= Re!"#lic Act No& ,02) -R&A& ,02). Sometime in )((6= Al"sitain= claimin that
he retired from the com!any on %an"ary *)= )((6= havin reached the ae of 06 and d"e to !oor
health= ver#ally demanded from !etitioner L"cas for the !ayment of his retirement #eneGts& By
his com!"tation= he claimed that he was entitled to '30=,)+&++&
'etitioner L"cas= however= ref"sed to !ay the retirement #eneGts of Al"sitain= !rom!tin the
latter to ma;e a written demand on Se!tem#er 5+= )((6& L"cas= however= remained adamant in
his ref"sal to ive in to Al"sitainNs demands& ?avin failed to arrive at an amica#le settlement=
Al"sitain Gled on Novem#er ),= )((6 a com!laint #efore the NLRC aainst !etitioners R"Gna
'atis :actory and L"cas for non8!ayment of retirement #eneGts&
1SSU4$
>hether or not the res!ondent is entitled to the #eneGts ranted #y the amendment of the law&
RUL1NG$
The res!ondent is entitled to the retirement #eneGts&
Re!"#lic Act No& ,02) -R&A& ,02).= LAN ACT AM4ND1NG ART1CL4 53, O: 'R4S1D4NT1AL D4CR44
NO& 225= AS AM4ND4D OT?4R>1S4 KNO>N AS T?4 LABOR COD4 O: T?4 '?1L1''1N4S= BB
'RO91D1NG :OR R4T1R4M4NT 'AB TO CUAL1:14D 'R19AT4 S4CTOR 4M'LOB44S 1N T?4 ABS4NC4
O: ANB R4T1R4M4NT 'LAN 1N T?4 4STABL1S?M4NT=L too; eHect !rovidin= amon other thins=
th"sly$
Art& 53,& Retirement& O Any em!loyee may #e retired "!on reachin the retirement ae
esta#lished in the collective #arainin areement or other a!!lica#le em!loyment contract&
#eyond siAty Gve -06. years which is here#y declared the com!"lsory retirement ae= who has
retirement !ay eD"ivalent to at least one half -\. month salary for every year of service= a
Unless the !arties !rovide for #roader incl"sions= the term one half -\. month salary shall mean
Gfteen -)6. days !l"s one twelfth -)J)5. of the )*th month !ay and the cash eD"ivalent of not
more than Gve -6. days of service incentive leaves&
9iolation of this !rovision is here#y declared "nlawf"l and s"#Eect to the !enal !rovisions "nder
Article 533 of this Code&
The Co"rt #elieves that the res!ondent nevertheless maintained that he contin"ed wor;in for
!etitioners "ntil %an"ary )((6= the date of act"al retirement= d"e to illness and old ae= and that
he merely accom!lished the foreoin doc"ments in com!liance with the reD"irements of the
SSS in order to avail of his retirement #eneGts&
S"a. Ca"alina College vs. NLRC
G&R& No& )2223*M Novem#er )(= 5++*
:ACTS$
1n %"ne )(66= ?ilaria was hired as an elementary school teacher at the Sta& Catalina Collee& 1n
)(,+= she a!!lied for and was ranted a one year leave of a#sence witho"t !ay on acco"nt of
the illness of her mother& After the eA!iration in )(,) of her leave of a#sence= she had not #een
heard from #y Sta& Catalina Collee& 1n the meantime= she was em!loyed as a teacher at the San
'edro 'arochial School d"rin school year )(3+8)(3) and at the Liceo de San 'edro= BiFan=
La"na d"rin school year )(3)8)(35&
1n )(35= she a!!lied anew at !etitioner school which hired her& On March )((,= d"rin the 6)st
Commencement 4Aercises of !etitioner school= ?ilaria was awarded a 'laD"e of A!!reciation for
thirty years of service and ')5=+++&++ as rat"ity !ay& On May )((,= ?ilaria reached the
com!"lsory retirement ae of 06& Retirin !"rs"ant to Article 53, of the La#or Code= as amended
#y Re!"#lic Act ,02)= !etitioner school !eed her retirement #eneGts at '6(=+*3&*6= com!"ted
on the #asis of Gfteen years of service from )(35 to )((,& ?er service from )(66 to )(,+ was
eAcl"ded in the com!"tation= !etitioner school havin asserted that she had= in )(,)= a#andoned
her em!loyment& ?ilaria insisted= that her retirement #eneGts sho"ld #e com!"ted on the #asis
of her thirty years of service= incl"sive of the !eriod from )(66 to )(,+ and that the rat"ity !ay
earlier iven to her sho"ld not #e ded"cted there from&
The !arties havin failed to aree on how the retirement #eneGts sho"ld #e com!"ted= ?ilaria
Gled a com!laint #efore the NLRC for non8!ayment of retirement #eneGts& La#or Ar#iter rendered
orderin the res!ondents to !ay the com!lainant the amo"nt of ')3=)36&50 only as the
diHerential of her retirement #eneGts&
1SSU4$
>hether or not ?ilariaNs services for the school d"rin the !eriod from )(66 to )(,+ sho"ld #e
factored in the com!"tation of her retirement #eneGts&
RUL1NG$
?ilaria cannot #e credited for her services in )(668)(,+ in the determination of her retirement
#eneGts& This Co"rt is not "nmindf"l of ?ilariaNs rendition of a total of thirty years of teachin in
!etitioner school and sho"ld #e accorded am!le s"!!ort in her twiliht years& 'etitioner school in
fact ac;nowledes her dedicated service to its st"dents& She can= however= only #e awarded with
what she is rihtf"lly entitled to "nder the law&
Retirement #eneGts= on the other hand= are intended to hel! the em!loyee enEoy the remainin
years of his life= releasin him from the #"rden of worryin for his Gnancial s"!!ort= and are a
form of reward for his loyalty to the em!loyer&
1n ?ilariaNs case= her retirement !ay as com!"ted #y !etitioners amo"nts to '6(=+*3&*6=
'53=36*&+( of which had already #een iven to her "nder the '4RAA& Since the com!"ted
amo"nt of her retirement !ay is m"ch lower than that !rovided "nder the law= she is entitled to
receive the diHerence #etween the act"al amo"nt of her retirement #eneGts as reD"ired #y law
and that !rovided for "nder the '4RAA&
Article 53, of the La#or Code= as amended #y Re!"#lic Act ,02) or the New Retirement Law=
!rovides$ Retirement& O Any em!loyee may #e retired "!on reachin the retirement ae
esta#lished in the collective #arainin areement or other a!!lica#le em!loyment contract& 1n
case of retirement= the em!loyee shall #e entitled to receive s"ch retirement #eneGts as he may
have earned "nder eAistin laws and any collective #arainin areement and other areements$
'rovided= however= that an em!loyeeNs retirement #eneGts "nder any collective #arainin and
other areements shall not #e less than those !rovided herein&
retirement !ay eD"ivalent to at least one8half -\. month salary for every year of service= a
Unless the !arties !rovide for #roader incl"sions= the term one half -\. month salary shall mean
Gfteen -)6. days !l"s one8twelfth -)J)5. of the )*th month !ay and the cash eD"ivalent of not
more than Gve -6. days of service incentive leaves&
Li;ewise= Section *&*= R"le 11 of the R"les 1m!lementin R&A& ,02) !rovides$ *&*& >here #oth the
em!loyer and the em!loyee contri#"te to a retirement f"nd in accordance with an individ"al or
collective areement or other a!!lica#le em!loyment contract= the em!loyerNs total contri#"tion
thereto shall not #e less than the total retirement #eneGts to which the em!loyee wo"ld have
#een entitled had there #een no s"ch retirement f"nd& 1n case the em!loyerNs contri#"tion is less
than the retirement #eneGts !rovided "nder this R"le= the em!loyer shall !ay the diHerence&
?ence= ?ilaria is entitled to receive '(3=,+0&26 com!"ted as follows$
One8half month salary h -)6 days A latest salary !er day. i -6 days leave A latest salary !er
day. i -)J)5 of )*th month !ay.
h '2=6)5&*+ i ')=6+2&)+ i '62,&**
h '0=60*&,*
Retirement 'ay h n"m#er of years in service A one8half month salary
h 6 years A '0=63+&2*
h '(3=266&(6
Since !etitioner school had already !aid ?ilaria '53=36*&+( re!resentin em!loyer contri#"tions
"nder the '4RAA= the same sho"ld #e ded"cted from the retirement !ay d"e her= to there#y
leave a #alance of '0(=0+5&30 still d"e her&
5on!a Phils., vs. Sa#ahan ng #ga Manggagawa sa 5on!a
G&R& No& )2660)M %"ne )6= 5++6
:ACTS$
The case stems from the collective #arainin areement #etween ?onda and the res!ondent
"nion that it ranted the com!"tation of )2th month !ay as the same as )*th month !ay& ?onda
contin"es the !ractice of rantin Gnancial assistance covered every Decem#er each year of not
less than )++X of the #asic salary& 1n the latter !art of )((3= the !arties started to re8neotiate
for the fo"rth and Gfth years of the CBA& The "nion Gled a notice of stri;e on the ro"nd of "nfair
la#or !ractice for deadloc;&
DOL4 ass"med E"risdiction over the case and certiGed it to the NLRC for com!"lsory ar#itration&
The stri;in em!loyees were ordered to ret"rn to wor; and manaement to acce!t them #ac;
"nder the same terms !rior to the stri;e staed& ?onda iss"ed a memorand"m of the new
com!"tation of the )*th month and )2th month !ay to #e ranted to all its em!loyees where#y
the *) lon stri;es shall #e considered "nwor;ed days for !"r!ose of com!"tin the said
#eneGts& The amo"nt eD"ivalent to \ of the em!loyees< #asic salary shall #e ded"cted from
these #on"ses= with a commitment that in the event that the stri;e is declared leal= ?onda shall
!ay the amo"nt&
The res!ondent "nion o!!osed the !ro8rated com!"tation of #on"ses& This iss"e was s"#mitted
to vol"ntary ar#itration where it r"led that the com!any<s im!lementation of the !ro8rated
com!"tation is invalid&
1SSU4$
>hether or not the !ro8rated com!"tation of the )*th and )2th month !ays and other #on"ses in
D"estion is valid and lawf"l&
RUL1NG$
The Co"rt r"led that the !ro8rated com!"tation is invalid&
The !ro8rated com!"tation of ?onda as a com!any !olicy has not ri!ened into a com!any
!ractice and it was the Grst time they im!lemented s"ch !ractice&
The !ayment of the )*th month !ay in f"ll month !ayment #y ?onda has #ecome an esta#lished
!ractice& The lenth of time where it sho"ld #e considered in !ractice is not #ein laid down #y
E"ris!r"dence& The vol"ntary act of the em!loyer cannot #e "nilaterally withdrawn witho"t
violatin Article )++ of the La#or Code&
The co"rt also r"les that the withdrawal of the #eneGt of !ayin a f"ll month salary for )*th
month !ay shall constit"te a violation of Article )++ of the La#or Code&
1aculbe vs. Silli#an <niversi"
G&R& No& )60(*2M March )0= 5++,
:ACTS$
Sometime in )(63= !etitioner #ean wor;in for res!ondent<s "niversity medical center as a
n"rse& 1n a letter in Decem#er )((5= res!ondent= thro"h its ?"man Reso"rces Develo!ment
OIce= informed !etitioner that she was a!!roachin her *6th year of service with the "niversity
and was d"e for a"tomatic retirement on Novem#er )3= )((*= at which time she wo"ld #e 6,
years old& This was !"rs"ant to res!ondent<s retirement !lan for its em!loyees which !rovided
that its mem#ers co"ld #e a"tomatically retired P"!on reachin the ae of 06 or after *6 years of
"ninterr"!ted service to the "niversity&Q Res!ondent reD"ired certain doc"ments in connection
with !etitioner<s im!endin retirement&
A #rief eAchane of letters #etween !etitioner and res!ondent followed& 'etitioner em!hatically
insisted that the com!"lsory retirement "nder the !lan was tantamo"nt to a dismissal and
!leaded with res!ondent to #e allowed to wor; "ntil the ae of 0+ #eca"se this was the minim"m
ae at which she co"ld D"alify for SSS !ension& B"t res!ondent stood !at on its decision to retire
her= citin Pcom!any !olicy&Q
On Novem#er )6= )((*= !etitioner Gled a com!laint in the National La#or Relations Commission
-NLRC. for Ptermination of service with !reliminary inE"nction andJor restrainin order&Q On
Novem#er )3= )((*= res!ondent com!"lsorily retired !etitioner& The la#or ar#iter rendered a
decision Gndin res!ondent "ilty of illeal dismissal and ordered that !etitioner #e reinstated
and !aid f"ll #ac; waes& On a!!eal= the NLRC reversed the la#or ar#iter<s decision and
dismissed the com!laint& the CA aIrmed the NLRC&
1SSU4$
>hether or not the res!ondent<s retirement !lan im!osin a"tomatic retirement after *6 years of
service contravenes the sec"rity of ten"re cla"se in the )(3, Constit"tion and the La#or Code&
RUL1NG$
Retirement !lans allowin em!loyers to retire em!loyees who are less than the com!"lsory
retirement ae of 06 are not !er se re!"nant to the constit"tional "aranty of sec"rity of
ten"re& Article 53, of the La#or Code !rovides$ Retirement 8 Any em!loyee may #e retired "!on
reachin the retirement ae esta#lished in the collective #arainin areement or other
a!!lica#le em!loyment contract& By its eA!ress lan"ae= the La#or Code !ermits em!loyers and
em!loyees to GA the a!!lica#le retirement ae at #elow 0+ years&
The r"les and re"lations of the !lan show that !artici!ation therein was not vol"ntary at all&
R"le 111 of the !lan= on mem#ershi!= stated$
S4CT1ON ) S M4MB4RS?1'= All f"ll8time :ili!ino em!loyees of the University will a"tomatically
#ecome mem#ers of the 'lan= !rovided= however= that those who have retired from the
University= even if rehired= are no loner elii#le for mem#ershi! in the 'lan& A mem#er who
contin"es to serve the University cannot withdraw from the 'lan&
S4CT1ON 5 S 4::4CT191TB O: M4MB4RS?1'= Mem#ershi! in the 'lan starts on the day a !erson is
hired on a f"ll8time #asis #y the University&
S4CT1ON * S T4RM1NAT1ON O: M4MB4RS?1'= Termination of mem#ershi! in the 'lan shall #e
"!on the death of the mem#er= resination or termination of em!loyee<s contract #y the
University= or retirement from the University&
Meanwhile= R"le 19= on contri#"tions= stated$
The 'lan is contri#"tory& The University shall set aside an amo"nt eD"ivalent to *\X of the #asic
salaries of the fac"lty and staH& To this shall #e added a 6X ded"ction from the #asic salaries of
the fac"lty and staH&
A mem#er on leave with the University a!!roval shall contin"e !ayin= #ased on his !ay while on
leave= his leave witho"t !ay sho"ld !ay his contri#"tions to the 'lan& ?owever= a mem#er= who
has #een on leave witho"t !ay sho"ld !ay his contri#"tions #ased on his salary !l"s the
University<s contri#"tions while on leave or the f"ll amo"nt within one month immediately after
the date of his reinstatement& 'rovided= f"rther that if a mem#er has no s"Icient so"rce of
income while on leave may !ay within siA months after his reinstatement&
1t was thro"h no vol"ntary act of her own that !etitioner #ecame a mem#er of the !lan& 1n fact=
the only way she co"ld have ceased to #e a mem#er thereof was if she sto!!ed wor;in for
res!ondent altoether& :"rthermore= in the r"le on contri#"tions= the re!eated "se of the word
PshallQ inel"cta#ly !ointed to the concl"sion that em!loyees had no choice #"t to contri#"te to
the !lan -even when they were on leave.&
Retirement is the res"lt of a #ilateral act of the !arties= a vol"ntary areement #etween the
em!loyer and the em!loyee where#y the latter= after reachin a certain ae arees to sever his
or her em!loyment with the former& The tr"th was that !etitioner had no choice #"t to !artici!ate
in the !lan= iven that the only way she co"ld refrain from doin so was to resin or lose her Eo#&
1t is aAiomatic that em!loyer and em!loyee do not stand on eD"al footin= a sit"ation which often
ca"ses an em!loyee to act o"t of need instead of any en"ine acD"iescence to the em!loyer&
This was clearly E"st s"ch an instance&
An em!loyer is free to im!ose a retirement ae less than 06 for as lon as it has the em!loyees<
consent& Stated conversely= em!loyees are free to acce!t the em!loyer<s oHer to lower the
retirement ae if they feel they can et a #etter deal with the retirement !lan !resented #y the
em!loyer& Th"s= havin terminated !etitioner solely on the #asis of a !rovision of a retirement
!lan which was not freely assented to #y her= res!ondent was "ilty of illeal dismissal&
In"ercon"inen"al Broa!cas"ing Corp., vs. A#arilla
G&R& No& )05,,6M Octo#er 5,= 5++0
:ACTS$
On vario"s dates= !etitioner em!loyed the followin !ersons at its Ce#" station$ Candido C&
C"iFones= %r= Corsini R& Laahit= as St"dio Technician= Anatolio G& Otadoy= as Collector and Noemi
Amarilla= as TraIc Cler;& On March )(30= the overnment seD"estered the station= incl"din its
!ro!erties= f"nds and other assets= and too; over its manaement and o!erations from its owner=
Ro#erto Benedicto& ?owever= in Decem#er )(30= the overnment and Benedicto entered into a
tem!orary areement "nder which the latter wo"ld retain its manaement and o!eration& On
Novem#er )((+= the 'residential Commission on Good Government -'CGG. and Benedicto
eAec"ted a Com!romise Areement= where Benedicto transferred and assined all his rihts=
shares and interests in !etitioner station to the overnment&
1n the meantime= the fo"r em!loyees retired from the com!any and received= on staered
#asis= their retirement #eneGts "nder the )((* Collective Barainin Areement #etween
!etitioner and the #arainin "nit of its em!loyees& 1n the meantime= a ')=6++&++ salary increase
was iven to all em!loyees of the com!any= c"rrent and retired= eHective %"ly )((2& ?owever=
when the fo"r retirees demanded theirs= !etitioner ref"sed and instead informed them via a
letter that their diHerentials wo"ld #e "sed to oHset the taA d"e on their retirement #eneGts in
accordance with the National 1nternal Reven"e Code -N1RC.&
The fo"r retirees Gled se!arate com!laints aainst 1BC T98)* Ce#" and Station Manaer Lo"ella
:& Ca#aFero for "nfair la#or !ractice and non8!ayment of #ac;waes #efore the NLRC&
1SSU4$
>hether or not the retirement #eneGts of res!ondents are !art of their ross income&
RUL1NG$
The Co"rt arees with !etitioner that "nder the CBA= it is not o#lied to !ay for the taAes on the
res!ondentsN retirement #eneGts& CBA did not !rovide a !rovision where !etitioner o#lied itself
to !ay the taAes on the retirement #eneGts of its em!loyees& The Co"rt also arees with
!etitioner that= "nder the N1RC= the retirement #eneGts of res!ondents are !art of their ross
income s"#Eect to taAes&
Section 53 -#. -,. -A. of the N1RC of )(30 5* !rovides$ Gross 1ncome& O -#. 4Acl"sions from ross
income& O The followin items shall not #e incl"ded in ross income and shall #e eAem!t from
taAation "nder this Title$ -,. Retirement #eneGts= !ensions= rat"ities= etc& O A&. Retirement
#eneGts received #y oIcials and em!loyees of !rivate Grms whether individ"als or cor!orate= in
accordance with a reasona#le !rivate #eneGt !lan maintained #y the em!loyer$ 'rovided= That
the retirin oIcial or em!loyee has #een in the service of the same em!loyer for at least ten
-)+. years and is not less than Gfty years of ae at the time of his retirement$ 'rovided= f"rther=
That the #eneGts ranted "nder this s"#!arara!h shall #e availed of #y an oIcial or em!loyee
only once& :or !"r!oses of this s"#section= the term Lreasona#le !rivate #eneGt !lanL means a
!ension= rat"ity= stoc; #on"s or !roGt8sharin !lan maintained #y an em!loyer for the #eneGt of
some or all of his oIcials or em!loyees= where contri#"tions are made #y s"ch em!loyer for
oIcials or em!loyees= or #oth= for the !"r!ose of distri#"tin to s"ch oIcials and em!loyees the
earnins and !rinci!al of the f"nd th"s acc"m"lated= and wherein it is !rovided in said !lan that
at no time shall any !art of the cor!"s or income of the f"nd #e "sed for= or #e diverted to= any
!"r!ose other than for the eAcl"sive #eneGt of the said oIcial and em!loyees&
Reven"e Re"lation No& )5830= the im!lementin r"les of the foreoin !rovisions= !rovides$ -#.
'ensions= retirements and se!aration !ay& O 'ensions= retirement and se!aration !ay constit"te
com!ensation s"#Eect to withholdin taA= eAce!t the followin$ -). Retirement #eneGt received
#y oIcial and em!loyees of !rivate Grms "nder a reasona#le !rivate #eneGt !lan maintained #y
the em!loyer= if the followin reD"irements are met$ -i. The retirement !lan m"st #e a!!roved #y
the B"rea" of 1nternal Reven"eM -ii. The retirin oIcial or em!loyees m"st have #een in the
service of the same em!loyer for at least ten -)+. years and is not less than Gfty -6+. years of
ae at the time of retirementM and -iii. The retirin oIcial or em!loyee shall not have !revio"sly
availed of the !rivilee "nder the retirement #eneGt !lan of the same or another em!loyer&
Th"s= for the retirement #eneGts to #e eAem!t from the withholdin taA= the taA!ayer is
#"rdened to !rove the conc"rrence of the followin elements$ -). a reasona#le !rivate #eneGt
!lan is maintained #y the em!loyerM -5. the retirin oIcial or em!loyee has #een in the service
of the same em!loyer for at least )+ yearsM -*. the retirin oIcial or em!loyee is not less than
6+ years of ae at the time of his retirementM and -2. the #eneGt had #een availed of only once&
Article 9111 of the )((* CBA !rovides for two ;inds of retirement !lans 8 com!"lsory and o!tional&
Th"s$ ART1CL4 9111 R4T1R4M4NT
Section )$ Com!"lsory Retirement O Any em!loyee who has reached the ae of :ifty :ive -66.
years shall #e retired from the COM'ANB and shall #e !aid a retirement !ay in accordance with
the followin sched"le$
L4NGT? O: S4R91C4 R4T1R4M4NT B4N4:1TSh
) year8#elow 6 yrs& )6 days for every year of service
6 years8( years *+ days for every year of service
)+ years8)2 years 6+ days for every year of service
)6 years8)( years 06 days for every year of service
5+ years or more 3+ days for every year of service
A s"!ervisor who reached the ae of :ifty -6+. may at hisJher o!tion retire with the same
retirement #eneGts !rovided a#ove&
Section 5$ O!tional Retirement O Any covered em!loyee= reardless of ae= who has rendered at
least Gve -6. years of service to the COM'ANB may vol"ntarily retire and the COM'ANB arees to
!ay Lon Service 'ay to said covered em!loyee in accordance with the followin sched"le$
L4NGT? O: S4R91C4 R4T1R4M4NT B4N4:1TS
68( years )6 days for every year of service
)+8)2 years *+ days for every year of service
)68)( years 6+ days for every year of service
5+ years or more 0+ days for every year of service
Section *$ :raction of a Bear O 1n com!"tin the retirement "nder Section ) and 5 of this Article=
a fraction of at least siA -0. months shall #e considered as one whole year& Moreover= the
COM'ANB may eAercise the o!tion of eAtendin the em!loyment of an em!loyee&
Section 2$ Severance of 4m!loyment D"e to 1llness O >hen a s"!ervisor s"Hers from disease
andJor !ermanent disa#ility and herJhis contin"ed em!loyment is !rohi#ited #y law or !reE"dicial
to herJhis health of the health of his co8em!loyees= the COM'ANB shall not terminate the
em!loyment of the s"#Eect s"!ervisor "nless there is a certiGcation #y a com!etent !"#lic health
a"thority that the disease is of s"ch a nat"re or at s"ch stae that it can not #e c"red within a
!eriod of siA -0. months even with !ro!er medical treatment& The s"!ervisor may #e se!arated
"!on !ayment #y the COM'ANB of se!aration !ay !"rs"ant to law= "nless the s"!ervisor falls
within the !"rview of either Sections ) or 5 hereof& 1n which case= the retirement #eneGts
indicated therein shall a!!ly= whichever is hiher&
Section 6$ Loyalty Reconition O The COM'ANB shall reconi7e the services of the
s"!ervisorJdirector who have reached the followin n"m#er of years "!on retirement #y rantin
himJher a !laD"e of a!!reciation and any lastin ift$ )+ years #"t #elow )6 years -'*=+++&++.
worthM )6 years #"t #elow 5+ year -',=+++&++. worthM 5+ years and more -')+=+++&++. worth&
Res!ondents were D"aliGed to retire o!tionally from their em!loyment with !etitioner& there is no
record that the )((* CBA had #een a!!roved or was ever !resented to the B1R& ?ence= the
retirement #eneGts of res!ondents are taAa#le&
Under Section 3+ of the N1RC= !etitioner= as em!loyer= was o#lied to withhold the taAes on said
#eneGts and remit the same to the B1R& Section 3+& Lia#ility for TaA& O -A. 4m!loyer& O The
em!loyer shall #e lia#le for the withholdin and remittance of the correct amo"nt of taA reD"ired
to #e ded"cted and withheld "nder this Cha!ter& 1f the em!loyer fails to withhold and remit the
correct amo"nt of taA as reD"ired to #e withheld "nder the !rovision of this Cha!ter= s"ch taA
shall #e collected from the em!loyer toether with the !enalties or additions to the taA otherwise
a!!lica#le in res!ect to s"ch fail"re to withhold and remit&
Le"ran Cala#ba (acul" 8 E#ploees Associa"ion vs. NLRC e" al.
G&R& No& )60556M %an"ary 5(= 5++3
:ACTS$
On Octo#er 3= )((5= the Letran Calam#a :ac"lty and 4m!loyees Association -!etitioner. Gled
with Reional Ar#itration Branch No& 19 of the National La#or Relations Commission -NLRC. a
Com!laint aainst Coleio de San %"an de Letran= Calam#a= 1nc& -res!ondent. for collection of
vario"s monetary claims d"e to its mem#ers& Some of the alleations of the !etitioners in its
'osition 'a!er are$ -). 1n the com!"tation of the thirteenth month !ay of its academic !ersonnel=
res!ondent does not incl"de as #asis therefor their com!ensation for overloads& 1t only ta;es into
acco"nt the !ay the fac"lty mem#ers receive for their teachin loads not eAceedin eihteen
-)3. "nitsM -5. res!ondent has not !aid the wae increases reD"ired #y >ae Order No& 6 to its
em!loyees who D"alify there"nderM -*. res!ondent has not also !aid its em!loyees the holiday
!ay for the ten -)+. re"lar holidays as !rovided for in Article (2 of the La#or Code& Res!ondent
has ref"sed witho"t E"stiGa#le reasons and des!ite demands to !ay its o#liations&
As to the incl"sion of the overloads of res!ondentNs fac"lty mem#ers in the com!"tation of their
)*th8month !ay= !etitioner ar"es that "nder the Revised G"idelines on the 1m!lementation of
the )*th8Month 'ay Law= !rom"lated #y the Secretary of La#or on Novem#er )0= )(3,= the
#asic !ay of an em!loyee incl"des rem"nerations or earnins !aid #y his em!loyer for services
rendered= and that eAcl"ded therefrom are the cash eD"ivalents of "n"sed vacation and sic;
leave credits= overtime= !remi"m= niht diHerential= holiday !ay and cost8of8livin allowances&
'etitioner claims that since the !ay for eAcess loads or overloads does not fall "nder any of the
en"merated eAcl"sions and considerin that the said overloads are #ein !erformed within the
normal wor;in !eriod of eiht ho"rs a day= it only follows that the overloads sho"ld #e incl"ded
in the com!"tation of the fac"lty mem#ersN )*th8month !ay&
1SSU4$
>hether or not a teacherNs overload !ay sho"ld #e considered in the com!"tation of his or her
)*th8month !ay&
RUL1NG$
1t is a settled r"le that when an administrative or eAec"tive aency renders an o!inion or iss"es a
statement of !olicy= it merely inter!rets a !re8eAistin law and the administrative inter!retation
is at #est advisory for it is the co"rts that Gnally determine what the law means& 1n the !resent
case= while the DOL4 Order may not #e a!!lica#le= the Co"rt Gnds that overload !ay sho"ld #e
eAcl"ded from the com!"tation of the )*th8month !ay of !etitionerNs mem#ers&
1n resolvin the iss"e of the incl"sion or eAcl"sion of overload !ay in the com!"tation of a
teacherNs )*th8month !ay= it is decisive to determine what L#asic salaryL incl"des and eAcl"des&
1n this res!ect= the Co"rtNs disD"isition in San Mi"el Cor!oration v& 1ncion is instr"ctive= to wit$
Under 'residential Decree 36) and its im!lementin r"les= the #asic salary of an em!loyee is
"sed as the #asis in the determination of his )*th month !ay& Any com!ensations or
rem"nerations which are deemed not !art of the #asic !ay is eAcl"ded as #asis in the
com!"tation of the mandatory #on"s& Under the R"les and Re"lations 1m!lementin
'residential Decree 36)= the followin com!ensations are deemed not !art of the #asic salary$ a.
Cost8of8livin allowances ranted !"rs"ant to 'residential Decree 656 and Letter of 1nstr"ction
No& ),2M #. 'roGt sharin !aymentsM c. All allowances and monetary #eneGts which are not
considered or interated as !art of the re"lar #asic salary of the em!loyee at the time of the
!rom"lation of the Decree on Decem#er )0= )(,6&
Under a later set of S"!!lementary R"les and Re"lations 1m!lementin 'residential Decree 36)
iss"ed #y the then La#or Secretary Blas O!le= overtime !ay= earnins and other rem"nerations
are eAcl"ded as !art of the #asic salary and in the com!"tation of the )*th8month !ay& The
eAcl"sion of cost8of8livin allowances "nder 'residential Decree 656 and Letter of 1nstr"ction No&
),2 and !roGt sharin !ayments indicate the intention to stri! #asic salary of other !ayments
which are !ro!erly considered as LfrineL #eneGts& Li;ewise= the catch8all eAcl"sionary !hrase
Lall allowances and monetary #eneGts which are not considered or interated as !art of the #asic
salaryL shows also the intention to stri! #asic salary of any and all additions which may #e in the
form of allowances or LfrineL #eneGts& Moreover= the S"!!lementary R"les and Re"lations
1m!lementin 'residential Decree 36) is even more em!hatic in declarin that earnins and
other rem"nerations which are not !art of the #asic salary shall not #e incl"ded in the
com!"tation of the )*th8month !ay&
>hile do"#t may have #een created #y the !rior R"les and Re"lations 1m!lementin
'residential Decree 36) which deGnes #asic salary to incl"de all rem"nerations or earnins !aid
#y an em!loyer to an em!loyee= this clo"d is dissi!ated in the later and more controllin
S"!!lementary R"les and Re"lations which cateorically= eAcl"de from the deGnition of #asic
salary earnins and other rem"nerations !aid #y em!loyer to an em!loyee& A c"rsory !er"sal of
the two sets of R"les indicates that what has hitherto #een the s"#Eect of a #road incl"sion is
now a s"#Eect of #road eAcl"sion& The S"!!lementary R"les and Re"lations c"re the seemin
tendency of the former r"les to incl"de all rem"nerations and earnins within the deGnition of
#asic salary&
The all8em#racin !hrase Learnins and other rem"nerationsL which are deemed not !art of the
#asic salary incl"des within its meanin !ayments for sic;= vacation= or maternity leaves=
!remi"m for wor;s !erformed on rest days and s!ecial holidays= !ay for re"lar holidays and
niht diHerentials& As s"ch they are deemed not !art of the #asic salary and shall not #e
considered in the com!"tation of the )*th8month !ay& 1f they were not so eAcl"ded= it is hard to
Gnd any Learnins and other rem"nerationsL eA!ressly eAcl"ded in the com!"tation of the )*th8
month !ay& Then the eAcl"sionary !rovision wo"ld !rove to #e idle and with no !"r!ose&
This concl"sion Gnds stron s"!!ort "nder the La#or Code of the 'hili!!ines& To cite a few
!rovisions$ PArt& 3,& Overtime wor;& >or; may #e !erformed #eyond eiht -3. ho"rs a day
!rovided that the em!loyee is !aid for the overtime wor;= additional com!ensation eD"ivalent to
his re"lar wae !l"s at least twenty8Gve -56X. !ercent thereofQ& 1t is clear that overtime !ay is
an additional com!ensation other than and added to the re"lar wae or #asic salary= for reason
of which s"ch is cateorically eAcl"ded from the deGnition of #asic salary "nder the
S"!!lementary R"les and Re"lations 1m!lementin 'residential Decree 36)& 1n Article (* of the
same Code= !arara!h Pc&. wor; !erformed on any s!ecial holiday shall #e !aid an additional
com!ensation of at least thirty !ercent -*+X. of the re"lar wae of the em!loyee&L
1t is li;ewise clear that !remi"m for s!ecial holiday which is at least *+X of the re"lar wae is
an additional com!ensation other than and added to the re"lar wae or #asic salary& :or similar
reason it shall not #e considered in the com!"tation of the )*th8month !ay& 1n the same manner
that !ayment for overtime wor; and wor; !erformed d"rin s!ecial holidays is considered as
additional com!ensation a!art and distinct from an em!loyeeNs re"lar wae or #asic salary= an
overload !ay= owin to its very nat"re and deGnition= may not #e considered as !art of a
teacherNs re"lar or #asic salary= #eca"se it is #ein !aid for additional wor; !erformed in eAcess
of the re"lar teachin load&
Moreover= !etitioner failed to ref"te !rivate res!ondentNs contention that eAcess teachin load is
!aid #y the ho"r= while the re"lar teachin load is #ein !aid on a monthly #asisM and that the
assinment of overload is s"#Eect to the availa#ility of teachin loads& This only oes to show
that overload !ay is not interated with a teacherNs #asic salary for his or her re"lar teachin
load& 1n addition= overload varies from one semester to another= as it is de!endent "!on the
availa#ility of eAtra teachin loads& As s"ch= it is not leally feasi#le to consider !ayments for
s"ch overload as !art of a teacherNs re"lar or #asic salary& 9erily= overload !ay may not #e
incl"ded as #asis for determinin a teacherNs )*th8month !ay&
Rees vs. NLRC e" al.
G&R& No& )0+5**M A""st 3= 5++,
:ACTS$
'etitioner was em!loyed as a salesman at !rivate res!ondentNs Grocery Division in Davao City on
A""st )5= )(,,& ?e was event"ally a!!ointed as "nit manaer of Sales De!artment8So"th
Mindanao District= a !osition he held "ntil his retirement on Novem#er *+= )((,& Thereafter= he
received a letter reardin the com!"tation of his se!aration !ay& 1nsistin that his retirement
#eneGts and )*th month !ay m"st #e #ased on the averae monthly salary of '25=,00&)(= which
consists of ')+=()(&55 #asic salary and '*)=320&(, averae monthly commission= !etitioner
ref"sed to acce!t the chec; iss"ed #y !rivate res!ondent in the amo"nt of '5++=*55&5)& 1nstead=
he Gled a com!laint #efore the ar#itration #ranch of the NLRC for retirement #eneGts= )*th
month !ay= taA ref"nd= earned sic; and vacation leaves= Gnancial assistance= service incentive
leave !ay= damaes and attorneyNs fees&
'etitioner contends that the commissions form !art of the #asic salary= citin the case of
'hili!!ine D"!licators= 1nc& v& National La#or Relations Commission= wherein the Co"rt held that
commissions earned #y salesmen form !art of their #asic salary& 'rivate res!ondent co"nters
that !etitioner ;new that the overridin commission is not incl"ded in the #asic salary #eca"se it
had not #een considered as s"ch for a lon time in the com!"tation of the )*th month !ay= leave
commissions= a#sences and tardiness&
1SSU4$
>hether or not the averae monthly sales commission of thirty one tho"sand eiht h"ndred forty
siA and (,J)++ -'h!*)=320&(,. sho"ld #e incl"ded in the com!"tation of his retirement #eneGts
and )*th month !ay&
RUL1NG$
This Co"rt has held= in 'hili!!ine D"!licators that= the salesmenNs commissions= com!risin a
!re8determined !ercentae of the sellin !rice of the oods sold #y each salesman= were
!ro!erly incl"ded in the term #asic salary for !"r!oses of com!"tin the )*th month !ay& The
salesmenNs commission are not overtime !ayments= nor !roGt8sharin !ayments nor any other
frine #eneGt #"t a !ortion of the salary str"ct"re which re!resents an a"tomatic increment to
the monetary val"e initially assined to each "nit of wor; rendered #y a salesman&
Contrarily= in Boie8Ta;eda= the so8called commissions !aid to or received #y medical
re!resentatives of Boie8Ta;eda Chemicals or #y the ran; and Gle em!loyees of 'hili!!ine :"Ei
]eroA Co&= were eAcl"ded from the term #asic salary #eca"se these were !aid to the medical
re!resentatives and ran;8and8Gle em!loyees as !rod"ctivity #on"ses= which are enerally tied to
the !rod"ctivity= or ca!acity for reven"e !rod"ction= of a cor!oration and s"ch #on"ses closely
resem#le !roGt8sharin !ayments and have no clear direct or necessary relation to the amo"nt
of wor; act"ally done #y each individ"al em!loyee& :"rther= commissions !aid #y the Boie8Ta;eda
Com!any to its medical re!resentatives co"ld not have #een sales commissions in the same
sense that 'hili!!ine D"!licators !aid the salesmen their sales commissions& Medical
re!resentatives are not salesmenM they do not eHect any sale of any article at all&
1n Gne= whether or not a commission forms !art of the #asic salary de!ends "!on the
circ"mstances or conditions for its !ayment= which ind"#ita#ly are fact"al in nat"re for they will
reD"ire a re8eAamination and cali#ration of the evidence on record&
As to the main iss"e whether !etitionerNs commissions #e considered in the com!"tation of his
retirement #eneGts and )*th month !ay= we r"le in the neative& Article 53, of the La#or Code=
as amended #y Re!"#lic Act No& ,02)= otherwise ;nown as The New Retirement Law= 55
!rovides$ Retirement& O Any em!loyee may #e retired "!on reachin the retirement ae
esta#lished in the collective #arainin areement or other a!!lica#le em!loyment contract/ 1n
the a#sence of a retirement !lan or areement !rovidin for retirement #eneGts of em!loyees in
the esta#lishment= an em!loyee "!on reachin the ae of siAty -0+. years or more= #"t not
#eyond siAty Gve -06. years which is here#y declared the com!"lsory retirement ae= who has
retirement !ay eD"ivalent to at least one half -)J5. month salary for every year of service= a
fraction of at least siA -0. months #ein considered as one whole year& Unless the !arties !rovide
for #roader incl"sions= the term one half -)J5. month salary shall mean Gfteen -)6. days !l"s one
twelfth -)J)5. of the )*th month !ay and the cash eD"ivalent of not more than Gve -6. days of
service incentive leaves&
'etitioner Gled for o!tional retirement "!on reachin the ae of 0+& ?owever= the #asis in
com!"tin his retirement #eneGts is his latest salary rate of ')+=()(&55 as the commissions he
received are in the form of !roGt8sharin !ayments s!eciGcally eAcl"ded #y the foreoin r"les&
Case law has it that when these earnins and rem"neration are closely a;in to frine #eneGts=
overtime !ay or !roGt8sharin statements= they are !ro!erly eAcl"ded in com!"tin retirement
!ay& ?owever= sales commissions which are eHectively an interal !ortion of the #asic salary
str"ct"re of an em!loyee= shall #e incl"ded in determinin the retirement !ay&
At #ar= !etitioner Roelio %& Reyes was receivin a monthly s"m of ')+=()(&55 as salary
corres!ondin to his !osition as Unit Manaer& Th"s= as correctly r"led #y !"#lic res!ondent
NLRC= the Loverridin commissionsL !aid to him #y Universal Ro#ina Cor!& co"ld not have #een
Nsales commissionsN in the same sense that 'hili!!ine D"!licators !aid its salesmen sales
commissions& Unit Manaers are not salesmenM they do not eHect any sale of article at all&
Therefore= any commission which they receive is certainly not the #asic salary which meas"res
the standard or amo"nt of wor; of com!lainant as Unit Manaer& Accordinly= the additional
!ayments made to !etitioner were not in fact sales commissions #"t rather !artoo; of the nat"re
of !roGt8sharin #"siness& Certainly= from the foreoin= the doctrine in Boie8Ta;eda Chemicals
and 'hili!!ine :"Ei ]eroA Cor!oration= which !rono"nced that commissions are additional !ay
that does not form !art of the #asic salary= a!!lies to the !resent case& Aside from the fact that
as "nit manaer !etitioner did not enter into act"al sale transactions= #"t merely s"!ervised the
salesmen "nder his control= the dis!"ted commissions were not re"larly received #y him& Only
when the salesmen were a#le to collect from the sale transactions can !etitioner receive the
commissions& Conversely= if no collections were made #y the salesmen= then !etitioner wo"ld
receive no commissions at all& 1n Gne= the commissions which !etitioner received were not !art of
his salary str"ct"re #"t were !roGt8sharin !ayments and had no clear= direct or necessary
relation to the amo"nt of wor; he act"ally !erformed& The collection made #y the salesmen from
the sale transactions was the !roGt of !rivate res!ondent from which !etitioner had a share in
the form of a commission& ?ence= !etition is denied&
Arco Me"al Pro!uc"s Co., Inc., e" al. vs. Sa#ahan ng Mga Manggagawa sa Arco Me"al
NA(L<
G&R& No& ),+,*2M May )2= 5++3
:ACTS$
'etitioner is a com!any enaed in the man"fact"re of metal !rod"cts= whereas res!ondent is
the la#or "nion of !etitioner<s ran; and Gle em!loyees& Sometime in Decem#er 5++*= !etitioner
!aid the )*th month !ay= #on"s= and leave encashment of three "nion mem#ers in amo"nts
!ro!ortional to the service they act"ally rendered in a year= which is less than a f"ll twelve -)5.
months& Res!ondent !rotested the !rorated scheme= claimin that on several occasions
!etitioner did not !rorate the !ayment of the same #eneGts to seven -,. em!loyees who had not
served for the f"ll )5 months& Accordin to res!ondent= the !rorated !ayment violates the r"le
aainst dimin"tion of #eneGts "nder Article )++ of the La#or Code& Th"s= they Gled a com!laint
#efore the National Conciliation and Mediation Board -NCMB.&
1SSU4$
>hether or not the rant of )*th month !ay= #on"s= and leave encashment in f"ll reardless of
act"al service rendered constit"tes vol"ntary em!loyer !ractice and= conseD"ently= whether or
not the !rorated !ayment of the said #eneGts constit"te dimin"tion of #eneGts "nder Article )++
of the La#or Code&
RUL1NG$
Any #eneGt and s"!!lement #ein enEoyed #y em!loyees cannot #e red"ced= diminished=
discontin"ed or eliminated #y the em!loyer& The !rinci!le of non8dimin"tion of #eneGts is
fo"nded on the Constit"tional mandate to L!rotect the rihts of wor;ers and !romote their
welfare and to aHord la#or f"ll !rotection& Said mandate in t"rn is the #asis of Article 2 of the
La#or Code which states that all do"#ts in the im!lementation and inter!retation of this Code=
incl"din its im!lementin r"les and re"lations shall #e rendered in favor of la#or&
%"ris!r"dence is re!lete with cases which reconi7e the riht of em!loyees to #eneGts which
were vol"ntarily iven #y the em!loyer and which ri!ened into com!any !ractice& Th"s in
Davao:r"its Cor!oration v& Associated La#or Unions= et al& where an em!loyer had freely and
contin"o"sly incl"ded in the com!"tation of the )*th month !ay those items that were eA!ressly
eAcl"ded #y the law= we held that the act which was favora#le to the em!loyees tho"h not
conformin to law had th"s ri!ened into a !ractice and co"ld not #e withdrawn= red"ced=
diminished= discontin"ed or eliminated& 1n Sevilla Tradin Com!any v& Semana= we r"led that the
em!loyer<s act of incl"din non8#asic #eneGts in the com!"tation of the )*th month !ay was a
vol"ntary act and had ri!ened into a com!any !ractice which cannot #e !erem!torily withdrawn&
1n the years )((5= )((*= )((2= )(((= 5++5 and 5++*= !etitioner had ado!ted a !olicy of freely=
vol"ntarily and consistently rantin f"ll #eneGts to its em!loyees reardless of the lenth of
service rendered& Tr"e= there were only a total of seven em!loyees who #eneGted from s"ch a
!ractice= #"t it was an esta#lished !ractice nonetheless& %"ris!r"dence has not laid down any r"le
s!ecifyin a minim"m n"m#er of years within which a com!any !ractice m"st #e eAercised in
order to constit"te vol"ntary com!any !ractice& Th"s= it can #e siA -0. years= three -*. years= or
even as short as two -5. years& 'etitioner cannot shir; away from its res!onsi#ility #y merely
claimin that it was a mista;e or an error= s"!!orted only #y an aIdavit of its man"fact"rin
ro"! head& ?ence= !etition was denied&
<niversal Robina Sugar Milling Corp. vs. Caballe!a
G&R& No& )60022M %"ly 53= 5++3
:ACTS$
'etitioner Universal Ro#ina S"ar Millin Cor!oration -URSUMCO. is a domestic cor!oration
enaed in the s"ar millin #"siness and !etitioner Renato Ca#ati is URSUMCONs manaer&
Res!ondent Ari!ino Ca#alleda -Ari!ino. wor;ed as welder for URSUMCO from March )(3( "ntil
%"ne 5*= )((, with a salary of ')52&++ !er day= while res!ondent AleEandro Cadalin -AleEandro.
wor;ed for URSUMCO as crane o!erator from )(,0 "! to %"ne )6= )((, with a salary of '5+(&*+
!er day&
On A!ril 52= )(()= %ohn Go;onwei= %r&= 'resident of URSUMCO= iss"ed a Memorand"m
esta#lishin the com!any !olicy on PCom!"lsory RetirementQ -Memorand"m. of its
em!loyees& The memorand"m !rovides that all em!loyees cor!orate8wide who attain 0+ years of
ae on or #efore A!ril *+= )(() shall #e considered retired on May *)= )(()&
On A!ril 5(= )((*= URSUMCO and the National :ederation of La#or -N:L.= a leitimate la#or
orani7ation and the reconi7ed sole and eAcl"sive #arainin re!resentative of all the monthly
and daily !aid em!loyees of URSUMCO= of which AleEandro was a mem#er= entered into a
Collective Barainin Areement -CBA.& Article ]9 of the said CBA !artic"larly !rovided that the
retirement #eneGts of the mem#ers of the collective #arainin "nit shall #e in accordance with
law&
Ari!ino and AleEandro -res!ondents.= havin reached the ae of 0+= were alleedly forced to
retire #y URSUMCO& Ari!ino averred that URSUMCO illeally dismissed him from em!loyment on
%"ne 52= )((, when he was forced to retire "!on reachin the ae of siAty -0+. years old& U!on
the termination of his em!loyment= he acce!ted his se!aration !ay and a!!lied for retirement
#eneGts with the Social Sec"rity System -SSS.& 4arlier= on A!ril )6= )((,= AleEandro t"rned 0+
years old& On May 53= )((,= he Gled his a!!lication for retirement with URSUMCO= attachin his
#irth and #a!tismal certiGcates& On %"ly 5*= )((,= he acce!ted his retirement #eneGts and
eAec"ted a D"itclaim in favor of URSUMCO&
Thereafter= on A""st 0= )((,= Ari!ino Gled a Com!laint for illeal dismissal= damaes and
attorney<s fees #efore the La#or Ar#iter -LA. of D"ma"ete City& ?e alleed that his com!"lsory
retirement was in violation of the !rovisions of Re!"#lic Act -R&A&. ,02) and= was in eHect= a form
of illeal dismissal&
On A""st 50= )((,= AleEandro li;ewise Gled a Com!laint for illeal dismissal= "nder!ayment of
retirement #eneGts= damaes and attorney<s fees #efore the LA= allein that he was iven only
)6 days !er year of service #y way of retirement #eneGts and f"rther assails that his
com!"lsory retirement was discriminatory considerin that there were other wor;ers over siAty
-0+. years of ae who were allowed to contin"o"sly re!ort for wor;&
1SSU4S$
>hether res!ondents were illeally terminated on acco"nt of com!"lsory retirement or the same
vol"ntarily retired&
RUL1NG$
SC r"led in favor of the res!ondents&
Retirement is the res"lt of a #ilateral act of the !arties= a vol"ntary areement #etween the
em!loyer and the em!loyee where#y the latter= after reachin a certain ae= arees to sever his
or her em!loyment with the former& The ae of retirement is !rimarily determined #y the eAistin
areement #etween the em!loyer and the em!loyees& ?owever= in the a#sence of s"ch
areement= the retirement ae shall #e GAed #y law& Under Art& 53, of the La#or Code as
amended= the leally mandated ae for com!"lsory retirement is 06 years= while the set
minim"m ae for o!tional retirement is 0+ years&
1n this case= it may #e stressed that the CBA does not !er se s!eciGcally !rovide for the
com!"lsory retirement ae nor does it !rovide for an o!tional retirement !lan& 1t merely
!rovides that the retirement #eneGts accorded to an em!loyee shall #e in accordance with law&
Th"s= we m"st a!!ly Art& 53, of the La#or Code which !rovides for two ty!es of retirement$ -a.
com!"lsory and -#. o!tional& The Grst ta;es !lace at ae 06= while the second is !rimarily
determined #y the collective #arainin areement or other em!loyment contract or em!loyerNs
retirement !lan& 1n the a#sence of any !rovision on o!tional retirement in a collective #arainin
areement= other em!loyment contract= or em!loyerNs retirement !lan= an em!loyee may
o!tionally retire "!on reachin the ae of 0+ years or more= #"t not #eyond 06 years= !rovided
he has served at least Gve years in the esta#lishment concerned& That !reroative is eAcl"sively
loded in the em!loyee&
1nd"#ita#ly= the vol"ntariness of the res!ondentsN retirement is the meat of the instant
controversy& 'etitioners !ost"late that res!ondents vol"ntarily retired !artic"larly when AleEandro
Gled his a!!lication for retirement= s"#mitted all the doc"mentary reD"irements= acce!ted the
retirement #eneGts and eAec"ted a D"itclaim in favor of URSUMCO& Res!ondents claim
otherwise= contendin that they were merely forced to com!ly as they were no loner iven any
wor; assinment and considerin that the severance of their em!loyment with URSUMCO is a
condition !recedent for them to receive their retirement #eneGts&
Generally= the law loo;s with disfavor on D"itclaims and releases #y em!loyees who have #een
inveiled or !ress"red into sinin them #y "nscr"!"lo"s em!loyers see;in to evade their leal
res!onsi#ilities and fr"strate E"st claims of em!loyees& They are frowned "!on as contrary to
!"#lic !olicy& A D"itclaim is ineHective in #arrin recovery of the f"ll meas"re of a wor;erNs rihts=
and the acce!tance of #eneGts therefrom does not amo"nt to esto!!els&
To #e !recise= only AleEandro was a#le to claim a !artial amo"nt of his retirement #eneGt& Th"s= it
is clear from the decisions of the LA= NLRC and CA that !etitioners are still lia#le to !ay AleEandro
the diHerential on his retirement #eneGts& On the other hand= Ari!ino was act"ally and totally
de!rived of his retirement #eneGt&
Moreover= the !etitioners= not the res!ondents= have the #"rden of !rovin that the D"itclaim
was vol"ntarily entered into& 1n !revio"s cases= we have considered= amon others= the
ed"cational attainment of the em!loyees concerned in "!holdin the validity of the
D"itclaims which they have eAec"ted in favor of their em!loyers&
Cerca!o vs. <nipro#, Inc.
G&R& No& )33)62M Octo#er )*= 5+)+
:ACTS$
'etitioner Lo"rdes A& Cercado -Cercado. started wor;in for res!ondent UN1'ROM= 1nc&
-UN1'ROM. on Decem#er )6= )(,3 as a tic;et seller assined at :iesta Carnival= Araneta Center=
C"e7on City& Later on= she was !romoted as cashier and then as cler; ty!ist& On A!ril )= )(3+=
UN1'ROM instit"ted an 4m!loyees< Non8Contri#"tory Retirement 'lan which !rovides that any
!artici!ant with twenty -5+. years of service= reardless of ae= may #e retired at his o!tion or at
the o!tion of the com!any& UN1'ROM eAercised its o!tion "nder the retirement !lan= and decided
to retire Cercado eHective at the end of #"siness ho"rs on :e#r"ary )6= 5++)& A chec; of even
date in the amo"nt of ')++=3))&,+= re!resentin her retirement #eneGts "nder the re"lar
retirement !ac;ae= was iss"ed to her& Cercado ref"sed to acce!t the chec;&
The CA= however= r"led that UN1'ROM<s retirement !lan was consistent with Article 53, of the
La#or Code= which !rovides that Lany em!loyee may #e retired "!on reachin the retirement ae
esta#lished in the collective #arainin areement or other a!!lica#le em!loyment contract&L
1SSU4$
>ON UN1'ROM has a #ona Gde retirement !lan&
?4LD$
The !etition is meritorio"s&
A A A >e reiterate the well8esta#lished meanin of retirement in this E"risdiction$ Retirement is
the res"lt of a #ilateral act of the !arties= a vol"ntary areement #etween the em!loyer and the
em!loyee where#y the latter= after reachin a certain ae= arees to sever his or her
em!loyment with the former&
Acce!tance #y the em!loyees of an early retirement ae o!tion m"st #e eA!licit= vol"ntary= free=
and "ncom!elled& >hile an em!loyer may "nilaterally retire an em!loyee earlier than the leally
!ermissi#le aes "nder the La#or Code= this !reroative m"st #e eAercised !"rs"ant to a
m"t"ally instit"ted early retirement !lan& 1n other words= only the im!lementation and eAec"tion
of the o!tion may #e "nilateral= #"t not the ado!tion and instit"tion of the retirement !lan
containin s"ch o!tion& :or the o!tion to #e valid= the retirement !lan containin it m"st #e
vol"ntarily assented to #y the em!loyees or at least #y a maEority of them thro"h a #arainin
re!resentative&
The followin !rono"ncements in %ac"l#e v& Silliman University are el"cidatin$
An em!loyer is free to im!ose a retirement ae less than 06 for as lon as it has the em!loyees<
consent& Stated conversely= em!loyees are free to acce!t the em!loyer<s oHer to lower the
retirement ae if they feel they can et a #etter deal with the retirement !lan !resented #y the
em!loyer&
>e disaree with the CA<s concl"sion that the retirement !lan is !art of !etitioner<s em!loyment
contract with res!ondent& 1t m"st #e "nderscored that !etitioner was hired in )(,3 or 5 years
#efore the instit"tion of UN1'ROM<s retirement !lan in )(3+& Loically= her em!loyment contract
did not incl"de the retirement !lan= m"ch less the early retirement ae o!tion contained therein
Ra!io Min!anao Ne"wor*, Inc. e" al. vs. 7barola, 1r. e" al.
G&R& No& )(3005= Se!tem#er )5= 5+)5
:acts$
Res!ondents Domino R& B#arola= %r& and Alfonso 4& Rivera= %r& were hired on %"ne )6= )(,, and
%"ne )= )(3*= res!ectively= #y RMN& They event"ally #ecame acco"nt manaers= solicitin
advertisements and servicin vario"s clients of RMN&
On Se!tem#er )6= 5++5= the res!ondents< services were terminated as a res"lt of RMN<s
reorani7ationJrestr"ct"rinM they were iven their se!aration !ay S ' 0*)=56+&++ for B#arola=
and ' 23)=56+&++ for Rivera& Sometime in Decem#er 5++5= they eAec"ted releaseJD"itclaim
aIdavits&
DissatisGed with their se!aration !ay= the res!ondents Gled se!arate com!laints -which were
later consolidated. aainst RMN and its 'resident= 4ric S& Canoy= for illeal dismissal with several
money claims= incl"din attorney<s fees& They indicated that their monthly salary rates were '
0+=+++&++ for B#arola and ' 2+=+++&++ for Rivera&
1ss"e$
-). >ON the res!ondents< commissions were !art of their salaryM
-5. >ON the releaseJD"itclaim aIdavits eAec"ted #y the res!ondents were invalid&
?eld$
)& The res!ondent<s commissions were !art of their salary&
The Co"rt !ointed o"t that in the !resent case= the res!ondents earned their commissions
thro"h act"al mar;et transactions attri#"ta#le to themM these commissions= therefore= were !art
of their salary& The variance in amo"nts the res!ondents received as commissions s"!!orts the
CA<s Gndin that the salary str"ct"re of the res!ondents was s"ch that they only received a
minimal amo"nt as "aranteed waeM a reater !art of their income was derived from the
commissions they et from solicitin advertisementsM these advertisements are the L!rod"ctsL
they sell&
As a eneral r"le= commissions cannot #e incl"ded in the #ase G"re for the com!"tation of the
se!aration !ay #eca"se they have to #e earned #y act"al mar;et transactions attri#"ta#le to the
res!ondents&
5& The releaseJD"itclaims eAec"ted #y the res!ondents were invalid&
The releaseJD"itclaim aIdavits are invalid for #ein aainst !"#lic !olicy for two reasons$
-). the terms of the settlement are "nconsciona#leM the se!aration !ay for termination d"e to
reorani7ationJrestr"ct"rin was deGcient #y 'h!2++=+++&++ for each em!loyeeM they were iven
only half of the amo"nt they were leally entitled toM and
-5. the a#sence of vol"ntariness when the em!loyees sined the doc"ment= it was their dire
circ"mstances and ina#ility to s"!!ort their families that Gnally drove them to acce!t the amo"nt
oHered&
>itho"t Eo#s and with families to s"!!ort= they dallied in eAec"tin the D"itclaim instr"ment= #"t
were event"ally forced to sin iven their circ"mstances& To #e s"re= a settlement "nder these
terms is not and cannot #e a reasona#le one= iven es!ecially the res!ondent<s lenth of service
S 56 years for B#arola and )( years for Rivera&
ELEA:AR S. PA&ILL6, pe"i"ioner, vs. R<RAL BANM 6( NAB<N)<RAN, INC. an! MARM S.
6R6PE:A, respon!en"s , G.R. No. >@@BB0. 1anuar .>, ./>B
:ACTS$
On Octo#er )= )(,,= !etitioner= the late 4lea7ar 'adillo -'adillo.= was em!loyed #y res!ondent
R"ral Ban; of Na#"nt"ran= 1nc& -Ban;. as its SA Boo;;ee!er& D"e to liD"idity !ro#lems which
arose sometime in 5++*= the Ban; too; o"t retirementJins"rance !lans with 'hili!!ine American
Life and General 1ns"rance Com!any -'hilam Life. for all its em!loyees in antici!ation of its
!ossi#le clos"re and the concomitant severance of its !ersonnel& 1n this reard= the Ban;
!roc"red 'hilam 'lan CertiGcate of :"ll 'ayment No& 335+2= 'lan Ty!e +5:')+SC= Areement No&
''(3+)*,,) -'hilam Life 'lan. in favor of 'adillo for a #eneGt amo"nt of ')++=+++&++ and which
was set to mat"re on %"ly ))= 5++(& &D"rin the latter !art of 5++,= 'adillo s"Hered a mild stro;e
d"e to hy!ertension which conseD"ently im!aired his a#ility to eHectively !"rs"e his wor;&On
Se!tem#er )+= 5++,= he wrote a letter addressed to res!ondent Oro!e7a= the !resident of the
#an;= eA!ressin his intention to avail of an early retirement !ac;ae& Des!ite several follow8"!s=
his reD"est remained "nheeded& On Octo#er *= 5++,= 'adillo was se!arated from em!loyment
d"e to his !oor and failin health as reTected in a CertiGcation dated Decem#er 2= 5++, iss"ed
#y the Ban;& Not havin received his claimed retirement #eneGts= 'adillo Gled with the NLRC a
com!laint for the recovery of "n!aid retirement #eneGts&
?eld$
The La#or Code !rovision on termination on the ro"nd of disease "nder Article 5(, does not
a!!ly in this case= considerin that it was the !etitioner and not the Ban; who severed the
em!loyment relations& 1t was 'adillo who vol"ntarily retired and that he was not terminated #y
the Ban;&
Under article *++ of the la#or code= in the a#sence of any a!!lica#le areement= an em!loyee
m"st -). retire when he is at least siAty -0+. years of ae and -5. serve at least -6. years in the
com!any to entitle himJher to a retirement #eneGt of at least one8half -)J5. month salary for
every year of service= with a fraction of at least siA -0. months #ein considered as one whole
year& Nota#ly= these ae and ten"re reD"irements are c"m"lative and non8com!liance with one
neates the em!loyeeNs entitlement to the retirement #eneGts "nder Article *++ of the La#or
Code&
1n this case= it is "ndis!"ted that there eAists no retirement !lan= collective #arainin
areement or any other eD"ivalent contract #etween the !arties which set o"t the terms and
condition for the retirement of em!loyees= with the sole eAce!tion of the 'hilam Life 'lan which
!remi"ms had already #een !aid #y the Ban;& 1n the a#sence of any a!!lica#le contract or any
evolved com!any !olicy= 'adillo sho"ld have met the ae and ten"re reD"irements set forth
"nder Article *++ of the La#or Code to #e entitled to the retirement #eneGts !rovided therein&
Unfort"nately= while 'adillo was a#le to com!ly with the Gve -6. year ten"re reD"irement O as he
served for twenty8nine -5(. years O he= however= fell short with res!ect to the siAty -0+. year
ae reD"irement iven that he was only Gfty8Gve -66. years old when he retired& Therefore=
witho"t !reE"dice to the !roceeds d"e "nder the 'hilam Life 'lan= !etitionersN claim for
retirement #eneGts m"st #e denied&
./>> NLRC R<LES 6( PR6CE&<RE
)NSGP Lar*ins vs. NLRC
G&R& No& (52*5M :e#r"ary 5*= )((6
:ACTS$
'etitioner was a mem#er of the United States Air :orce -USA:. assined to oversee the
dormitories of the Third Aircraft Generation SD"adron -* AGS. at Clar; Air Base= 'am!ana&
On A""st )+= )(33= * AGS terminated the contract for the maintenance and "!;ee! of the
dormitories with the De G"7man C"stodial Services& The em!loyees thereof= incl"din !rivate
res!ondents= were allowed to contin"e wor;in for * AGS& 1t was left to the new contractor= the
%AC Maintenance Services owned #y %oselito C"nanan= to decide whether it wo"ld retain their
services& %oselito C"nanan= however= chose to #rin in his own wor;ers& As a res"lt= the wor;ers
of the De G"7man C"stodial Services were reD"ested to s"rrender their #ase !asses to Lt& Col&
:ran;ha"ser or to !etitioner&
1t is !etitioner<s contention that the D"estioned resol"tions are n"ll and void #eca"se res!ondent
La#or Ar#iter did not acD"ire E"risdiction to entertain and decide the case& 'etitioner allees that
she never received nor was served= any s"mmons or co!ies of the oriinal and amended
com!laints= and therefore the La#or Ar#iter had no E"risdiction over her !erson "nder Article ]19
of the R&'& Z U&S& Military Bases Areement&
1SSU4
>ON the La#or Ar#iter acD"ires E"risdiction over the res!ondent&
RUL1NG
The PAreement Between the Re!"#lic of the 'hili!!ines and the United States of America
Concernin Military Bases=Q otherwise ;nown as the R&'& Z U&S& Military Bases Areement=
overned the rihts= d"ties= a"thority= and the eAercise thereof #y 'hili!!ine and American
nationals inside the U&S& military #ases in the co"ntry&
Article ]19 thereof= overnin the !roced"re for service of s"mmons on !ersons inside U&S&
military #ases= !rovides that$
& & & VNWo !rocess= civil or criminal= shall #e served within any #ase eAce!t with the !ermission of
the commandin oIcer of s"ch #aseM #"t sho"ld the commandin oIcer ref"se to rant s"ch
!ermission he shall forthwith ta;e the necessary ste!s & & & & to serve s"ch !rocess= as the case
may #e= and to !rovide the attendance of the server of s"ch !rocess #efore the a!!ro!riate co"rt
in the 'hili!!ines or !roc"re s"ch server to ma;e the necessary aIdavit or declaration to !rove
s"ch service as the case may reD"ire&
S"mmonses and other !rocesses iss"ed #y 'hili!!ine co"rts and administrative aencies for
United States Armed :orces !ersonnel within any U&S& #ase in the 'hili!!ines co"ld #e served
therein only with the !ermission of the Base Commander& 1f he withholds ivin his !ermission=
he sho"ld instead desinate another !erson to serve the !rocess= and o#tain the server<s
aIdavit for Glin with the a!!ro!riate co"rt&
Res!ondent La#or Ar#iter did not follow said !roced"re& ?e instead= addressed the s"mmons to
Lt& Col& :ran;ha"ser and not the Base Commander -Rollo= !& )).&
Res!ondents do not dis!"te !etitioner<s claim that no s"mmons was ever iss"ed and served on
her& They contend= however= that they sent notices of the hearins to her -Rollo= !!& )58)*.&
Notices of hearin are not s"mmonses& The !rovisions and !revailin E"ris!r"dence in Civil
'roced"re may #e a!!lied #y analoy to NLRC !roceedins -Revised R"les of the NLRC= R"le 1=
Sec& *.& 1t is #asic that the La#or Ar#iter cannot acD"ire E"risdiction over the !erson of the
res!ondent witho"t the latter #ein served with s"mmons -cf& 9da& de Macoy v& Co"rt of A!!eals=
5+0 SCRA 522 V)((5WM :ilmerco Commercial Co&= 1nc& v& 1ntermediate A!!ellate Co"rt= )2( SCRA
)(* V)(3,W.& 1n the a#sence of service of s"mmons or a valid waiver thereof= the hearins and
E"dment rendered #y the La#or Ar#iter are n"ll and void -cf& 9da& de Macoy v& Co"rt of A!!eals=
s"!ra&.
'etitioner= in the case at #ench= a!!ealed to the NLRC and !artici!ated in the oral ar"ment
#efore the said #ody& This= however= does not constit"te a waiver of the lac; of s"mmons and a
vol"ntary s"#mission of her !erson to the E"risdiction of the La#or Ar#iter& -De los Santos v&
Montera= 55) SCRA )6 V)((*W.&
Be that as it may= on the ass"m!tion that !etitioner validly waived service of s"mmons on her=
still the case co"ld not !ros!er& There is no alleation from the !leadins Gled that Lt& Col&
:ran;ha"ser and !etitioner were #ein s"ed in their !ersonal ca!acities for tortio"s acts -United
States of America v& G"into= )35 SCRA 022 V)((+W.& ?owever= !rivate res!ondents named * AGS
as one of the res!ondents in their com!laint -Rollo= !& )+.&
Under the PAreement Between the Government of the Re!"#lic of the 'hili!!ines and the
Government of the United States of America Relatin to the 4m!loyment of 'hili!!ine Nationals
in the United States Military Bases in the 'hili!!inesQ otherwise ;nown as the Base La#or
Areement of May 5,= )(03= any dis!"te or disareement #etween the United States Armed
:orces and :ili!ino em!loyees sho"ld #e settled "nder rievance or la#or relations !roced"res
esta#lished therein -Art& 11. or #y the ar#itration !rocess !rovided in the Rom"alde78Bosworth
Memorand"m of Areement dated Se!tem#er 6= )(36& 1f no areement was reached or if the
rievance !roced"re failed= the dis!"te was a!!eala#le #y either !arty to a %oint La#or
Committee esta#lished in Article 111 of the Base La#or Areement&
UnD"estiona#ly therefore= no E"risdiction was ever acD"ired #y the La#or Ar#iter over the case
and the !erson of !etitioner and the E"dment rendered is n"ll and void -:ilmerco Commercial
Co& v& 1ntermediate A!!ellate Co"rt= s"!ra&M Sy v& Navarro= 3) SCRA 263 V)(,3W.&
The !etition for certiorari is GRANT4D&
<ERM Me#orial Me!ical Cen"er vs. NLRC
G&R& No& ))+2)(= March *= )((,
:ACTS$
A com!laint was Gled #y the !rivate res!ondents= re!resented #y the :ederation of :ree >or;ers
-::>.= claimin salary diHerentials "nder Re!"#lic Act Nos& 002+ and 0,5,= correction of the
wae distortion and the !ayment of salaries for Sat"rdays and S"ndays "nder 'olicy 1nstr"ction
No& 62&
La#or Ar#iter Nieves de Castro s"stained the !rivate res!ondents eAce!t for their claim of wae
distortion& Res!ondents are directed to !ay the 6), individ"al com!lainants a total of
'),=+35=223&60 !l"s eAem!lary damaes of '5=+++ each&
>ithin the relementary !eriod for a!!eal= the !etitioners Gled their Notice and Memorand"m of
A!!eal with a Real 4state Bond consistin of land and vario"s im!rovements therein worth
')+5=*26=06+& 5 The !rivate res!ondents moved to dismiss the a!!eal on the ro"nd that Article
55* of the La#or Code= as amended= reD"ires the !ostin of a cash or s"rety #ond& The NLRC
directed !etitioners to !ost a cash or s"rety #ond of '),=+35=223&60 with a warnin that fail"re
to do so wo"ld ca"se the dismissal of the a!!eal& The !etitioners Gled a Motion for
Reconsideration allein it is not in a via#le Gnancial condition to !ost a cash #ond nor to !ay the
ann"al !remi"m of ',++=+++&++ for a s"rety #ond& On 0 Octo#er )((5= the NLRC dismissed
!etitioners< a!!eal& 'etitioners< Motion for Reconsideration was also denied #y the NLRC in a
resol"tion * dated , %"ne )((*&
1SSU4$
>ON in !erfectin an a!!eal to the National La#or Relations Commission -NLRC. a !ro!erty #ond
is eAcl"ded #y the two forms of a!!eal #ond Z cash or s"rety Z as en"merated in Article 55* of
the La#or Code&
RUL1NG$
The a!!lica#le law is Article 55* of the La#or Code= as amended #y Re!"#lic Act No& 0,)6= which
!rovides$
1n case of a E"dment involvin a monetary award= an a!!eal #y the em!loyer may #e !erfected
only "!on the !ostin of a cash or s"rety #ond iss"ed #y a re!"ta#le #ondin com!any d"ly
accredited #y the Commission in the amo"nt eD"ivalent to the monetary award in the E"dment
a!!ealed from&
>e have iven a li#eral inter!retation to this !rovision& 1n BBL -Bo"r B"s Line. v& NLRC 2 we r"led$
& & & that while Article 55* of the La#or Code= as amended #y Re!"#lic Act No& 0,)6= reD"irin a
cash or s"rety #ond in the amo"nt eD"ivalent to the monetary award in the E"dment a!!ealed
from for the a!!eal to #e !erfected= may #e considered a E"risdictional reD"irement=
nevertheless= adherin to the !rinci!le that s"#stantial E"stice is #etter served #y allowin the
a!!eal on the merits threshed o"t #y the NLRC= the Co"rt Gnds and so holds that the foreoin
reD"irement of the law sho"ld #e iven a li#eral inter!retation&
Then too= in Oriental Mindoro 4lectric Coo!erative= 1nc& v& National La#or Relations Commission 6
we held$
The intention of the lawma;ers to ma;e the #ond an indis!ensa#le reD"isite for the !erfection of
an a!!eal #y the em!loyer is "nderscored #y the !rovision that an a!!eal #y the em!loyer may
#e !erfected Ponly "!on the !ostin of a cash or s"rety #ond&Q The word PonlyQ ma;es it
!erfectly clear= that the lawma;ers intended the !ostin of a cash or s"rety #ond #y the
em!loyer to #e the eAcl"sive means #y which an em!loyer<s a!!eal may #e !erfected& The
reD"irement is intended to disco"rae em!loyers from "sin an a!!eal to delay= or even evade=
their o#liation to satisfy their em!loyees< E"st and lawf"l claims&
Considerin= however= that the c"rrent !olicy is not to strictly follow technical r"les #"t rather to
ta;e into acco"nt the s!irit and intention of the La#or Code= it wo"ld #e !r"dent for "s to loo;
into the merits of the case= es!ecially since !etitioner dis!"tes the alleation that !rivate
res!ondent was illeally dismissed&
>e reiterate this !olicy which stresses the im!ortance of decidin cases on the #asis of their
s"#stantive merit and not on strict technical r"les& 1n the case at #ar= the E"dment involved is
more than '), million and its !reci!itate eAec"tion can adversely aHect the eAistence of
!etitioner medical center& Li;ewise= the iss"es involved are not insiniGcant and they deserve a
f"ll disco"rse #y o"r D"asi8E"dicial and E"dicial a"thorities& >e are also conGdent that the real
!ro!erty #ond !osted #y the !etitioners s"Iciently !rotects the interests of !rivate res!ondents
sho"ld they Gnally !revail& 1t is not dis!"ted that the real !ro!erty oHered #y !etitioners is worth
')+5=*26=06+& The E"dment in favor of !rivate res!ondent is only a little more than '), million&
Phil. )ranco Services vs. NLRC
G&R& No& )52)++= A!ril )= )((3
:ACTS$
Nieva was em!loyed as a driver #y !etitioner assined to the Leas!i City8'asay City ro"te&
Nieva sideswi!ed an owner8ty!e Eee! and a criminal com!laint was Gled aainst him& 'hiltranco
!osted a #ail #ond for Nieva& After havin #een s"s!ended= he was told to wait "ntil his case
was settled& The case was Gnally settled he was reD"ested to Gle a new a!!lication as he was no
loner considered an em!loyee of 'hiltranco= alleedly for #ein a#sent witho"t leave from
Octo#er )( to Novem#er 5+= )(3(&
Nieva Gled a com!laint for illeal dismissal and demanded for )*th month !ay with the NLRC<s
National Ca!ital Reion Ar#itration Branch in Manila& 'hiltranco Gled a motion to dismiss on the
ro"nd of im!ro!er ven"e= statin that the com!laint sho"ld have #een loded with the NLRC<s
Reional Ar#itration Branch in Leas!i City= not only #eca"se Nieva was a resident thereof= #"t
also #eca"se the latter was hired= assined= and #ased in Leas!i City&
1SSU4$
>ON NLRC<s NCR Ar#itration Branch in Manila was a !ro!er ven"e for the Glin of Nieva<s
com!laints for illeal dismissal
RUL1NG$
The Glin of the com!laint with the National Ca!ital Reion Ar#itration Branch was !ro!er= Manila
#ein considered as !art of Nieva<s wor;!lace #y reason of his !lyin the Leas!i City8'asay City
ro"te& 1n fact= Section )-a.= R"le 19 of the New R"les of 'roced"re of the NLRC is merely
!ermissive& 'rovisions on ven"e are intended to ass"re convenience for the em!loyee and his
witnesses and to !romote the ends of E"stice !rovided that it is not o!!ressive to the em!loyer&
S". Mar"in (uneral 5o#es vs. NLRC
G&R& No& )*+300= Se!tem#er )0= )((3
:ACTS$
'rivate res!ondent allees that he started wor;in as O!erations Manaer of !etitioner St& Martin
:"neral ?ome on :e#r"ary 0= )((6& 'etitioner on the other hand claims that !rivate res!ondent
was not its em!loyee #"t only the "ncle of Amelita Mala#ed= the owner of !etitioner St& Martin<s
:"neral ?ome& >hen the mother of Amelita !assed away= the latter then too; over the
manaement of the #"siness and made some chanes in the #"siness o!eration and !rivate
res!ondent and his wife were no loner allowed to !artici!ate in the manaement thereof& As a
conseD"ence= the latter Gled a com!laint charin that !etitioner had illeally terminated his
em!loyment&
The la#or ar#iter rendered a decision in favor of !etitioner declarin that no em!loyer8em!loyee
relationshi! eAisted #etween the !arties and= therefore= his oIce had no E"risdiction over the
case&
On %"ne )*= )((,= the NLRC rendered a resol"tion settin aside the D"estioned decision and
remandin the case to the la#or ar#iter for immediate a!!ro!riate !roceedins& 'etitioner then
Gled a motion for reconsideration which was denied #y the NLRC in its resol"tion dated A""st
)3= )((, for lac; of merit&
1SSU4$
>ON the Co"rt has the !ower to review decisions of the NLRC&
RUL1NG$
>hen the iss"e was raised in an early case on the ar"ment that this Co"rt has no E"risdiction to
review the decisions of the NLRC= and formerly of the Secretary of La#or= since there is no leal
!rovision for a!!ellate review thereof= the Co"rt nevertheless reEected that thesis& 1t held that
there is an "nderlyin !ower of the co"rts to scr"tini7e the acts of s"ch aencies on D"estions of
law and E"risdiction even tho"h no riht of review is iven #y stat"teM that the !"r!ose of
E"dicial review is to ;ee! the administrative aency within its E"risdiction and !rotect the
s"#stantial rihts of the !artiesM and that it is that !art of the chec;s and #alances which restricts
the se!aration of !owers and forestalls ar#itrary and "nE"st adE"dications&
'"rs"ant to s"ch r"lin= and as sanctioned #y s"#seD"ent decisions of this Co"rt= the remedy of
the arieved !arty is to timely Gle a motion for reconsideration as a !recondition for any f"rther
or s"#seD"ent remedy= and then seasona#ly avail of the s!ecial civil action of certiorari "nder
R"le 06= for which said R"le has now GAed the relementary !eriod of siAty days from notice of
the decision& C"rio"sly= altho"h the )+8day !eriod for Gnality of the decision of the NLRC may
already have la!sed as contem!lated in Section 55* of the La#or Code= it has #een held that this
Co"rt may still ta;e coni7ance of the !etition for certiorari on E"risdictional and d"e !rocess
considerations if Gled within the relementary !eriod "nder R"le 06&
Sec& (& %"risdiction& The Co"rt of A!!eals shall eAercise$ -*. 4Acl"sive a!!ellate E"risdiction over
all Gnal E"dments= decisions= resol"tions= orders or awards of Reional Trial Co"rts and D"asi8
E"dicial aencies= instr"mentalities= #oards or commissions= incl"din the Sec"rities and
4Achane Commission= the Social Sec"rity Commission= the 4m!loyees Com!ensation
Commission and the Civil Service Commission= eAce!t those fallin within the a!!ellate
E"risdiction of the S"!reme Co"rt in accordance with the Constit"tion= the La#or Code of the
'hili!!ines "nder 'residential Decree No& 225= as amended= the !rovisions of this Act= and of
s"#!arara!h -). of the third !arara!h and s"#!arara!h -2. of the fo"rth !arara!h of Section
), of the %"diciary Act of )(23&
Lu!o 8 Lu# Corp. vs. Soarni!o
G&R& No& )2+(0+= %an"ary 5+= 5++*
:ACTS$
LUDO enaed the arrastre services of Cresencio L" Arrastre Services -CLAS. for the loadin and
"nloadin of its Gnished !rod"cts at the wharf& Accordinly= several arrastre wor;ers were
de!loyed #y CLAS to !erform the services needed #y LUDO& These arrastre wor;ers were
s"#seD"ently hired= on diHerent dates= as re"lar ran;8and8Gle em!loyees of LUDO every time
the latter needed additional man!ower services& Said em!loyees thereafter Eoined res!ondent
"nion= the LUDO 4m!loyees Union -L4U.= which acted as the eAcl"sive #arainin aent of the
ran;8and8Gle em!loyees& Res!ondent "nion entered into a collective #arainin areement with
LUDO which !rovides certain #eneGts to the em!loyees= the amo"nt of which vary accordin to
the lenth of service rendered #y the availin em!loyee& Thereafter= the "nion reD"ested LUDO
to incl"de in its mem#ers !eriod of service the time d"rin which they rendered arrastre services
to LUDO thro"h the CLAS so that they co"ld et hiher #eneGts& LUDO failed to act on the
reD"est& Th"s= the matter was s"#mitted for vol"ntary ar#itration& 9ol"ntary Ar#itrator r"led that$
-). the res!ondent em!loyees were enaed in activities necessary and desira#le to the
#"siness of !etitioner= and -5. CLAS is a la#or8only contractor of !etitioner& The Co"rt of A!!eals
aIrmed in toto the decision of the 9ol"ntary Ar#itrator& 'etitioner contends that the a!!ellate
co"rt erred when it "!held the award of #eneGts which were #eyond the terms of s"#mission
areement and that the ar#itrator m"st conGne its adE"dication to those iss"es s"#mitted #y the
!arties for ar#itration= which in this case is the sole iss"e of the date of re"lari7ation of the
wor;ers& ?ence= the award of #eneGts #y the ar#itrator was done in eAcess of E"risdiction&
1SSU4$
>ON the a!!ellate co"rt ravely erred when it "!held the award of #eneGts which were #eyond
the terms of s"#mission areement&
RUL1NG$
Generally= the ar#itrator is eA!ected to decide only those D"estions eA!ressly delineated #y the
s"#mission areement& Nevertheless= the ar#itrator can ass"me that he has the necessary !ower
to ma;e a Gnal settlement since ar#itration is the Gnal resort for the adE"dication of dis!"tes&)*
The s"ccinct reasonin en"nciated #y the CA in s"!!ort of its holdin= that the 9ol"ntary
Ar#itrator in a la#or controversy has E"risdiction to render the D"estioned ar#itral awards=
deserves o"r conc"rrence= th"s$ 1n eneral= the ar#itrator is eA!ected to decide those D"estions
eA!ressly stated and limited in the s"#mission areement& ?owever= since ar#itration is the Gnal
resort for the adE"dication of dis!"tes= the ar#itrator can ass"me that he has the !ower to ma;e
a Gnal settlement& Th"s= ass"min that the s"#mission em!owers the ar#itrator to decide
whether an em!loyee was dischared for E"st ca"se= the ar#itrator in this instance can
reasona#le ass"me that his !owers eAtended #eyond ivin a yes8or8no answer and incl"ded the
!ower to reinstate him with or witho"t #ac; !ay&
5ansin Engineering 8 Cons"ruc"ion vs. CA
G&R& No& )06()+= A!ril )+= 5++0
:ACTS$
?anEin is a constr"ction com!any that had #een contracted #y the 'hili!!ine Government for the
constr"ction of vario"s forein8Gnanced !roEects& ?anEin and the 'hili!!ine Government entered
into contracts for the constr"ction of the Malinao Dam at 'ilar= Bohol= with a !roEected
com!letion !eriod of )=+6+ calendar days= incl"din main canal and lateral !roEects for ,6+ days&
:rom A""st )((6 to A""st )((0= ?anEin contracted the services of ,)5 car!enters= masons=
tr"c; drivers= hel!ers= la#orers= heavy eD"i!ment o!erators= leadmen= enineers= steelmen=
mechanics= electricians and others&
1n A!ril )((3= ,)5 em!loyees Gled com!laints for illeal dismissal and for !ayment of #eneGts
aainst !etitioners= #efore the NLRC& The com!lainants averred that they were re"lar
em!loyees of ?anEin and that they were se!arated from em!loyment witho"t any lawf"l or E"st
ca"se& Only 65) of the com!lainants aIAed their sinat"res in the com!laints&
'etitioners alleed that the com!lainants were mere !roEect em!loyees in its Bohol 1rriation
'roEect and that 5 of the wor;ers were chared with D"aliGed theft #efore the RTC& Some of the
com!lainants had already mirated to USA or had died= while )), of them were still "nder the
em!loy of ?anEin& 'etitioner stated that some of the com!lainants had vol"ntarily resinedM )2
were a#sent witho"t !rior a!!roved leaveM )6 had sined a Motion to >ithdraw from the
com!laintM and many of the com!lainants were se!arated on acco"nt of the com!letion of the
!roEect& ?owever= !etitioners failed to a!!end any doc"ment to s"!!ort their claim&
La#or Ar#iter rendered E"dment in favor of the 253 com!lainants= rantin se!aration !ay and
attorney<s fees to each of them statin that the com!lainants were re"lar em!loyees of
!etitioner and their claims for "nder!ayment= holiday !ay= !remi"m !ay for holiday and rest day=
)*th month !ay= and service incentive leave wo"ld #e com!"ted after s"Icient data were made
availa#le& 'etitioners a!!ealed the decision to the NLRC= which aIrmed with modiGcation the
La#or Ar#iter<s r"lin& 'etitioners Gled a Motion for the Reconsideration of the decision -with a
motion to cond"ct clariGcatory hearins.
NLRC !artially ranted !etitioners< motion& UnsatisGed= !etitioners Gled a 'etition for Certiorari
"nder R"le 06 of the Revised R"les of Co"rt in the CA& CA dismissed the !etition and aIrmed
the NLRC<s r"lin that the dismissed em!loyees were re"lar em!loyees& The CA stressed that
!etitioners failed to ref"te the claim of the res!ondents that they were re"lar em!loyees&
'etitioners moved to reconsider the decision= which the CA denied&
1SSU4$
>ON res!ondents are !roEect em!loyees&
RUL1NG$
>hile res!ondent alleed that Pcom!lainants all sined a contract of em!loyment at the time
they were hired indicatin therein the !artic"lar !roEect they will #e wor;in on= the !eriod and
other conditions !rovided in their contracts which com!lainants f"lly ;new and "nderstood=Q
nowhere in the records can the said contracts #e fo"nd& Moreover= let it #e stressed that "nder
DO No& )(= Series of )((* on !roEect em!loyment= siA -0. indicators are en"merated therein and
one of which is that$ P-T.he termination of his em!loyment in the !artic"lar !roEectJ"nderta;in
is re!orted to the De!artment of La#or and 4m!loyment -DOL4. Reional OIce havin
E"risdiction over the wor;!lace within *+ days followin the date of his se!aration from wor; A A
A&Q
1n this !artic"lar case= the records do not show that a similar re!ort was ever made #y
res!ondent to the De!artment of La#or and 4m!loyment& S"ch fail"re of res!ondent em!loyer to
re!ort to the nearest em!loyment oIce of the De!artment of La#or= the termination of the
wor;ers it claimed as !roEect em!loyees at the time it com!leted the !roEect= is !roof that
com!lainants were not !roEect em!loyees&
The !rinci!al test for determinin whether !artic"lar em!loyees are !ro!erly characteri7ed as
!roEect em!loyees is$ whether or not the !roEect em!loyees were assined to carry o"t a s!eciGc
!roEect or "nderta;in= the d"ration of which were s!eciGed at the time the em!loyees were
enaed for that !roEect& 'redetermination of the d"ration or !eriod of !roEect em!loyment is
essential in resolvin whether one is a !roEect em!loyee or not& 1n the instant case= the
com!letion of the !roEect for which the com!lainants were hired was not determined at the start
of their em!loyment= there #ein no s"#stantial !roof thereof& The fact that com!lainants had
rendered more than one year of service at the time of their dismissal and there #ein no
s"#stantial evidence to s"!!ort that they were enaed to wor; on a s!eciGc !roEect or
"nderta;in= overt"rns res!ondent<s alleation that com!lainants were !roEect em!loyees hired
for a s!eciGc GAed !roEect for a limited !eriod of time&
Com!lainants herein were= therefore= non8!roEect em!loyees= #"t re"lar em!loyees& Admittedly=
#ein a d"ly licensed contractor Grm in the 'hili!!ines= res!ondent is the awardee of several
constr"ction !roEects and in many occasions it has #een iven the !riority in the awardin of
s"#seD"ent !roEects&
1n the liht of the a#ove facts and circ"mstances= the res!ondent<s main defense that com!letion
of the !roEect wor;ed on #y the com!lainants constit"te a valid ca"se of termination is
"ns"staina#le& To re!eat= there is no s"#stantial evidence on record to s"stain this contention&
The mere alleation of the res!ondents that "nder their em!loyment contracts the com!lainants
were made to "nderstand that they were !roEect em!loyees is deGnitely not !ers"asive or
"nworthy of credence& The #est evidence of which wo"ld have #een the alleed contracts& These
em!loyees sined d"ly notari7ed waiversJD"itclaims and who did not recant later& 1n the a#sence
of evidence showin the contrary= said D"itclaims were eAec"ted vol"ntarily and witho"t any
force or intimidation&
'etitioners s"#mitted to the NLRC d"#io"s machine co!ies of only some of res!ondentsZ
contracts= incl"din alleed em!loyment termination re!orts s"#mitted to the DOL4& The NLRC
fo"nd the contracts #arren of !ro#ative weiht and "tterly ins"Icient to #"ttress the contention
of !etitioners that res!ondents were only !roEect em!loyees&
Contrary to the re!resentation of res!ondent<s co"nsel= the oriinal co!ies of the re!orts made to
DOL4 were never !rod"ced and s"#mitted to this Commission& Neither were they !resented for
com!arison with the machine co!ies& These machine co!ies were not also certiGed as tr"e co!ies
#y the DOL4&
The act"al contin"o"s em!loyment of com!lainants #y res!ondent ?anEin since )(() "ntil )((6
overcomes the !iecemeal Pa!!ointmentsQ coverin for !eriods of siA -0. months or less& :rom
these short term #"t re!eated Pa!!ointments=Q it is a!!arent that the !eriods have #een
im!osed to !recl"de the acD"isition of ten"rial sec"rity #y the em!loyee and which ;ind of
em!loyment contracts sho"ld #e disrearded for #ein contrary to !"#lic !olicy&
The a!!ellate co"rt= the NLRC and the La#or Ar#iter are th"s one in Gndin that res!ondents
were not !roEect em!loyees= and in s"stainin res!ondents< claim of illeal dismissal d"e to
!etitionersZ fail"re to add"ce contrary evidence& >ell8settled is the r"le that Gndins of fact of
D"asi8E"dicial aencies= li;e the NLRC= are accorded not only res!ect #"t at times even Gnality if
s"ch Gndins are s"!!orted #y s"#stantial evidence& S"ch Gndins of facts can only #e set aside
"!on showin of rave a#"se of discretion= fra"d or error of law= none of which have #een shown
in this case&
Phil. 1ournalis" Inc. vs. NLRC
G&R& No& )0025)= Se!t& 6= 5++0
:ACTS$
The 'hili!!ine %o"rnalists= 1nc& -'%1. is a domestic cor!oration enaed in the !"#lication and sale
of news!a!ers and maa7ines& The eAcl"sive #arainin aent of all the ran;8and8Gle em!loyees
in the com!any is the %o"rnal 4m!loyees Union -Union for #revity.& Sometime in A!ril 5++6= the
Union Gled a notice of stri;e #efore the National Conciliation and Mediation Board -NCMB.=
claimin that '%1 was "ilty of "nfair la#or !ractice& '%1 was then oin to im!lement a
retrenchment !roram d"e to Pover8staIn or #loated wor; force and contin"in act"al losses
s"stained #y the com!any for the !ast three years res"ltin in neative stoc;holders eD"ity of
')5,&+ million&Q The Secretary of the De!artment of La#or and 4m!loyment -DOL4. certiGed the
la#or dis!"te to the National La#or Relations Commission -NLRC. for com!"lsory ar#itration
!"rs"ant to Article 50* -. of the La#or Code&
The !arties were reD"ired to s"#mit their res!ective !osition !a!ers& '%1 Gled a motion to dismiss=
contendin that the Secretary of La#or had no E"risdiction to ass"me over the case and th"s
erred in certifyin it to the Commission& The NLRC denied the motion& '%1= thereafter= Gled a
Motion to Defer :"rther 'roceedins= allein= amon others= that the Glin of its !osition !a!er
miht Eeo!ardi7e attem!ts to settle the matter eAtraE"dicially= which the NLRC also denied& The
case was= thereafter= s"#mitted for decision wherein it adE"ded '%1 lia#le in the total amo"nt of
'0=22,=++3&6,&
Thereafter= the !arties eAec"ted a Com!romise Areement dated %"ly (= 5++)= where '%1
"ndertoo; to reinstate the *) com!lainant8em!loyees eHective %"ly )= 5++) witho"t loss of
seniority rihts and #eneGtsM ), of them who were !revio"sly retrenched were areed to #e
iven f"ll and com!lete !ayment of their res!ective monetary claims= while )2 others wo"ld #e
!aid their monetary claims min"s what they received #y way of se!aration !ay& The areement
stated that the !arties entered the areement PViWn a sincere eHort at !eace and reconciliation as
well as to Eointly esta#lish a new era in la#or manaement relations mar;ed #y m"t"al tr"st=
coo!eration and assistance= enhanced #y o!en= constant and sincere comm"nication with a view
of advancin the interest of #oth the com!any and its em!loyees&Q The com!romise areement
was s"#mitted to the NLRC for a!!roval& All the em!loyees mentioned in the areement and in
the NLRC Resol"tion aIAed their sinat"res thereon& They li;ewise sined the %oint Manifesto
and Declaration of M"t"al S"!!ort and Coo!eration&
1SSU4$
>ON an NLRC Resol"tion= which incl"des a !rono"ncement that the mem#ers of a "nion had
#een illeally dismissed= is a#andoned or rendered Pmoot and academicQ #y a com!romise
areement s"#seD"ently entered into #etween the dismissed em!loyees and the em!loyerM this=
in t"rn= raises the D"estion of whether s"ch a com!romise areement constit"tes res E"dicata to
a new com!laint later Gled #y other "nion mem#ers8em!loyees= not !arties to the areement=
who li;ewise claim to have #een illeally dismissed&
RUL1NG$
The !etition is denied& The nat"re of a com!romise is s!elled o"t in Article 5+53 of the New Civil
Code$ it is Pa contract where#y the !arties= #y ma;in reci!rocal concessions= avoid litiation or
!"t an end to one already commenced&Q 'arties to a com!romise are motivated #y Pthe ho!e of
ainin= #alanced #y the daners of losin&Q 1t contem!lates m"t"al concessions and m"t"al
ains to avoid the eA!enses of litiation= or= when litiation has already #e"n= to end it #eca"se
of the "ncertainty of the res"lt& Article 55, of the La#or Code of the 'hili!!ines a"thori7es
com!romise areements vol"ntarily areed "!on #y the !arties= in conformity with the #asic
!olicy of the State Pto !romote and em!hasi7e the !rimacy of free collective #arainin and
neotiations= incl"din vol"ntary ar#itration= mediation and conciliation= as modes of settlin
la#or or ind"strial dis!"tes& As the Co"rt held in Reformist Union of R&B& Liner= 1nc& v& NLRC= the
!rovision P#estows Gnality to "nvitiated com!romise areements=Q !artic"larly if there is no
alleation that either !arty did not com!ly with what was inc"m#ent "!on them "nder the
areement& The !rovision reads$
ART& 55, Com!romise Areements& S Any com!romise settlement= incl"din those involvin
la#or standard laws= vol"ntarily areed "!on #y the !arties with the assistance of the B"rea" or
the reional oIce of the De!artment of La#or= shall #e Gnal and #indin "!on the !arties& The
National La#or Relations Commission or any co"rt shall not ass"me E"risdiction over iss"es
involved therein eAce!t in case of noncom!liance thereof or if there is !rima facie evidence that
the settlement was o#tained thro"h fra"d= misre!resentation= or coercion&
Th"s= a E"dment rendered in accordance with a com!romise areement is not a!!eala#le= and
is immediately eAec"tory "nless a motion is Gled to set aside the areement on the ro"nd of
fra"d= mista;e= or d"ress= in which case an a!!eal may #e ta;en aainst the order denyin the
motion& Under Article 5+*, of the Civil Code= Pa com!romise has "!on the !arties the eHect and
a"thority of res E"dicata=Q even when eHected witho"t E"dicial a!!rovalM and "nder the !rinci!le
of res E"dicata= an iss"e which had already #een laid to rest #y the !arties themselves can no
loner #e relitiated&
1n A:' M"t"al BeneGt Association= 1nc& v& Co"rt of A!!eals= the Co"rt s!elled o"t the
distin"ishin feat"res of a com!romise areement that is #asically intended to resolve a matter
already in litiation= or what is normally termed as a E"dicial com!romise& The Co"rt held that
once a!!roved= the areement #ecomes more than a mere contract #indin "!on the !arties=
considerin that it has #een entered as the co"rt<s determination of the controversy and has the
force and eHect of any other E"dment& The Co"rt went on to state$ AdEective law overnin
E"dicial com!romises ann"nciate that once a!!roved #y the co"rt= a E"dicial com!romise is not
a!!eala#le and it there#y #ecomes immediately eAec"tory #"t this r"le m"st #e "nderstood to
refer and a!!ly only to those who are #o"nd #y the com!romise and= on the ass"m!tion that
they are the only !arties to the case= the litiation comes to an end eAce!t only as reards to its
com!liance and the f"lGllment #y the !arties of their res!ective o#liations there"nder& The
reason for the r"le= said the Co"rt in Domino v& Co"rt of A!!eals V*56 'hil& 20(W= is that when
#oth !arties so enter into the areement to !"t a close to a !endin litiation #etween them and
as; that a decision #e rendered in conformity therewith= it wo"ld only #e Pnat"ral to !res"me
that s"ch action constit"tes an im!licit waiver of the riht to a!!ealQ aainst that decision& The
order a!!rovin the com!romise areement th"s #ecomes a Gnal act= and it forms !art and
!arcel of the E"dment that can #e enforced #y a writ of eAec"tion "nless otherwise enEoined #y
a restrainin order&
Th"s= contrary to the alleation of !etitioners= the eAec"tion and s"#seD"ent a!!roval #y the
NLRC of the areement fored #etween it and the res!ondent Union did not render the NLRC
resol"tion ineHect"al= nor rendered it Pmoot and academic&Q The areement #ecomes !art of the
E"dment of the co"rt or tri#"nal= and as a loical conseD"ence= there is an im!licit waiver of the
riht to a!!eal&
1n any event= the com!romise areement cannot #ind a !arty who did not vol"ntarily ta;e !art in
the settlement itself and ave s!eciGc individ"al consent& 1t m"st #e remem#ered that a
com!romise areement is also a contractM it reD"ires the consent of the !arties= and it is only
then that the areement may #e considered as vol"ntarily entered into&
The case of Golden Don"ts= 1nc& v& National La#or Relations Commission= which !etitioners
erroneo"sly rely "!on= is instr"ctive on this !oint& The Co"rt therein was confronted with the
followin D"estions$ A A A -). whether or not a "nion may com!romise or waive the rihts to
sec"rity of ten"re and money claims of its minority mem#ers= witho"t the latter<s consent= and
-5. whether or not the com!romise areement entered into #y the "nion with !etitioner
com!any= which has not #een consented to nor ratiGed #y res!ondents minority mem#ers has
the eHect of res E"dicata "!on them&Q
S!ea;in thro"h %"stice Reynato C& '"no= the Co"rt held that !"rs"ant to Section 5*= R"le )*3
of the then )(02 Revised R"les of Co"rt= a s!ecial a"thority is reD"ired #efore a lawyer may
com!romise his client<s litiationM th"s= the "nion has no a"thority to com!romise the individ"al
claims of mem#ers who did not consent to the settlement& The Co"rt also stated that Pthe
a"thority to com!romise cannot lihtly #e !res"med and sho"ld #e d"ly esta#lished #y
evidence=Q and that Pa com!romise areement is not valid when a !arty in the case has not
sined the same or when someone sins for and in #ehalf of s"ch !arty witho"t a"thority to do
soMQ conseD"ently= the aHected em!loyees may still !"rs"e their individ"al claims aainst their
em!loyer& The Co"rt went on to state that a E"dment a!!rovin a com!romise areement
cannot have the eHect of res E"dicata "!on non8sinatories since the reD"irement of identity of
!arties is not satisGed& A E"dment "!on a com!romise areement has all the force and eHect of
any other E"dment= and= concl"sive only "!on !arties thereto and their !rivies= hence= not
#indin on third !ersons who are not !arties to it&
A caref"l !er"sal of the wordins of the com!romise areement will show that the !arties areed
that the only iss"e to #e resolved was the D"estion of the monetary claim of several em!loyees&
The areement was later a!!roved #y the NLRC& The case was considered closed and terminated
and the Resol"tion dated May *)= 5++) f"lly im!lemented insofar as the em!loyees Pmentioned
in !arara!hs 5c and 5d of the com!romise areementQ were concerned& ?ence= the CA was
correct in holdin that the com!romise areement !ertained only to the Pmonetary o#liationQ of
the em!loyer to the dismissed em!loyees= and in no way aHected the Resol"tion in NCMB8NCR8
NS8+*8+3,8++ dated May *)= 5++) where the NLRC made the !rono"ncement that there was no
#asis for the im!lementation of !etitioners< retrenchment !roram&
To reiterate= the r"le is that when E"dment is rendered #ased on a com!romise areement= the
E"dment #ecomes immediately eAec"tory= there #ein an im!lied waiver of the !arties< riht to
a!!eal from the decision& The E"dment havin #ecome Gnal= the Co"rt can no loner reverse=
m"ch less modify it&
Balag"as Mul"i Purpose Coop. vs. CA
G&R& No& )6(503= Oct& 5,= 5++0
:ACTS$
Balatas M"lti8'"r!ose Coo!erative= 1nc& is a d"ly orani7ed and eAistin coo!erative "nder the
laws of the 'hili!!ines& Sometime in A!ril )(()= Balatas hired %oseGna G& ?i!olito8?errero= as
!art time manaer in its oIce& S"#seD"ently= %oseGna made ;nown of her intention to ta;e a
leave of a#sence& ?er !ro!osal was immediately a!!roved& ?owever= after the la!se of her leave
of a#sence= %oseGna did not re!ort for wor; anymore& Later on= she Gled her resination&
ConseD"ently %oseGna Gled a com!laint with the 'rovincial OIce of the De!artment of La#or in
Malolos= B"lacan for illeal dismissal= and non8!ayment of )*th month !ay or Christmas Bon"s&
She also !rayed for reinstatement and !aid #ac;waes as well as moral damaes&
The La#or Ar#iter rendered E"dment in favor of com!lainant and aainst res!ondents and
ordered the latter to !ay the former )*th month !ay= #ac;waes and se!aration !ay& Arieved=
herein !etitioners a!!ealed the decision to NLRC #"t failed to !ost either a cash or s"rety #ond
as reD"ired #y Article 55* of the La#or Code& They Gled a manifestation and motion instead=
statin= that "nder Re!"#lic Act No& 0(*3= Article 05-,. of the Coo!erative Code of the
'hili!!ines= !etitioners are eAem!t from !"ttin "! a #ond in an a!!eal from the decision of the
inferior co"rt& NLRC ordered res!ondents to !ost a cash or s"rety #ond in the amo"nt of
'5)3=+++&++= within )+ ineAtendi#le days from recei!t of the Order= fail"re of which shall
constit"te a waiver and non8!erfection of the a!!eal& Balatas a!!ealed to CA= which dismissed
the !etition holdin that the eAem!tion from !"ttin "! a #ond #y a coo!erative a!!lies to cases
decided #y inferior co"rts only&
1SSU4S$
>ON coo!eratives are eAem!ted from Glin a cash or s"rety #ond reD"ired to !erfect an
em!loyer<s a!!eal "nder Section 55* of 'residential Decree No& 225 -the La#or Code.M
>ON a certiGcation iss"ed #y the Coo!erative Develo!ment A"thority constit"tes s"#stantial
com!liance with the reD"irement for the !ostin of a #ond&
RUL1NG$
No& 'etitioners ar"e that there are certain #eneGts and !rivilees eA!ressly ranted to
coo!erative "nder the Coo!erative Code& 1t invo;ed the !rovision on Article 05 reardin the
eAem!tion from !ayment of an a!!eal #ond= to wit$ -,.All coo!eratives shall #e eAem!t from
!"ttin "! a #ond for #rinin an a!!eal aainst the decision of an inferior co"rt or for see;in to
set aside any third !arty claim$ 'rovided= That a certiGcation of the A"thority showin that the
net assets of the coo!erative are in eAcess of the amo"nt of the #ond reD"ired #y the co"rt in
similar cases shall #e acce!ted #y the co"rt as a s"Icient #ond&
?owever= it is only one amon a n"m#er of s"ch !rivilees which a!!ear "nder the article
entitled PTaA and Other 4Aem!tionsQ of the code& The !rovision cited #y !etitioners cannot #e
ta;en in isolation and m"st #e inter!reted in relation to the Coo!erative Code in its entirety&
4Ace!tions are to #e strictly #"t reasona#ly constr"edM they eAtend only so far as their lan"ae
warrants= and all do"#ts sho"ld #e resolved in favor of the eneral !rovision rather than the
eAce!tions&
No& Article ))( of the Coo!erative Code itself eA!ressly em#odies the leislative intention to
eAtend the coverae of la#or stat"tes to coo!eratives& :or this reason= !etitioners m"st com!ly
with the reD"irement set forth in Article 55* of the La#or Code in order to !erfect their a!!eal to
the NLRC& 1t m"st #e !ointed o"t that the riht to a!!eal is not a constit"tional= nat"ral or
inherent riht& 1t is a !rivilee of stat"tory oriin and= therefore= availa#le only if ranted or
!rovided #y stat"te& The law may validly !rovide limitations or D"aliGcations thereto or relief to
the !revailin !arty in the event an a!!eal is inter!osed #y the losin !arty&
1n this case= the o#vio"s and loical !"r!ose of an a!!eal #ond is to ins"re= d"rin the !eriod of
a!!eal= aainst any occ"rrence that wo"ld defeat or diminish recovery #y the em!loyee "nder
the E"dment if the latter is s"#seD"ently aIrmed&
Therefore= no error can #e ascri#ed to the CA for holdin that the !hrase Pinferior co"rtsQ
a!!earin in Article 05 !arara!h -,. of the Coo!erative Code does not eAtend to PD"asi8E"dicial
aenciesQ and that= !etitioners are not eAem!t from !ostin the a!!eal #ond reD"ired "nder
Article 55* of the La#or Code&
S". Mar"in (uneral 5o#es vs. NLRC
G&R& No& )25*6)= Nov& 55= 5++0
:ACTS$
The owner of !etitioner St& Martin :"neral ?omes= 1nc& -St& Martin. is Amelita Mala#ed& 'rior to
%an"ary )((0= Amelita<s mother manaed the f"neral !arlor& 1n )((6= Aricayos was ranted
Gnancial assistance #y Amelita<s mother& As a sin of a!!reciation= res!ondent eAtended
assistance in manain St& Martin witho"t com!ensation and no written em!loyment contract
#etween Amelita<s mother and res!ondent AricayosM f"rthermore= res!ondent Aricayos was not
even listed as an em!loyee in the Com!any<s !ayroll&
>hen Amelita<s mother died in %an"ary )((0= Amelita too; over as manaer of St& Martin& M"ch
to her charin= she fo"nd o"t that St& Martin had arrearaes in the !ayment of B1R taAes and
other fees owin to the overnment= #"t com!any records tended to show that !ayments were
made thereon& As a res"lt= Amelita removed the a"thority from res!ondent Aricayos and his wife
from ta;in !art in manain St& Martin<s o!erations&
Arieved= res!ondent Aricayos acc"sed St& Martin of his illeal dismissal as O!erations Manaer
of the com!any& ?e #elieved that the ca"se of his termination was Amelita<s s"s!icion that he
!oc;eted 'h' *3=+++&++ which was set aside for !ayment to the B1R of St& Martin<s val"ed added
taAes&On Octo#er 56= )((0= the La#or Ar#iter rendered a Decision= in favor of !etitioner declarin
that his oIce had no E"risdiction over the case&
NLRC iss"ed a Resol"tion ann"llin the Ar#iter<s Decision and remanded the case to him for
a!!ro!riate !roceedins= to determine the fact"al iss"e of the eAistence of em!loyer8em!loyee
relationshi! #etween the !arties& >hen its motion for reconsideration was reEected #y the NLRC=
!etitioner Gled a !etition for certiorari "nder R"le 06 #efore this Co"rt= doc;eted as G&R& No&
)*+300&
On Se!tem#er )0= )((3= this Co"rt thro"h %"stice %ose 9it"= rendered the landmar; Decision in
this case then doc;eted as G&R& No& )*+300= holdin for the Grst time that all !etitions for
certiorari "nder R"le 06 assailin the decisions of the NLRC sho"ld henceforth #e Gled with the
CA
1SSU4$
>ON a !etitioner can Gle his !etition for certiorari "nder R"le06 to assail the decision of a lower
co"rt li;e NLRC&
RUL1NG$
A !etition for certiorari "nder R"le06 m"st Grst #e Gled at the Co"rt of A!!eals& Said co"rt has a
conc"rrent E"risdiction on !etitions for certiorari= mandam"s= !rohi#itions& This is in consonance
with the hierarchy of co"rts&
&6LE Phils. 's. Es"eva
G&R& No& )0)))6= Nov& *+= 5++0
:ACTS$
'etitioner is a cor!oration enaed !rinci!ally in the !rod"ction and !rocessin of !inea!!le for
the eA!ort mar;et& Res!ondents are mem#ers of the Cannery M"lti8'"r!ose Coo!erative
-CAM'CO.& CAM'CO was orani7ed in accordance with Re!"#lic Act No& 0(*3= otherwise ;nown
as the Coo!erative Code of the 'hili!!ines& '"rs"ant to the Service Contract= CAM'CO mem#ers
rendered services to !etitioner& The n"m#er of CAM'CO mem#ers that re!ort for wor; and the
ty!e of service they !erformed de!ended on the needs of !etitioner at any iven time& Altho"h
the Service Contract s!eciGcally stated that it shall only #e for a !eriod of siA months= i&e&= from )
%"ly to *) Decem#er )((*= the !arties had a!!arently eAtended or renewed the same for the
s"cceedin years witho"t eAec"tin another written contract& 1t was "nder these circ"mstances
that res!ondents came to wor; for !etitioner& DOL4 orani7ed a Tas; :orce that cond"cted an
investiation into the alleed la#or8only contractin activities of the coo!eratives& The Tas; :orce
identiGed siA coo!eratives that were enaed in la#or8only contractin= one of which was
CAM'CO& 1n this case= res!ondents alleed that they started wor;in for !etitioner at vario"s
times in the years )((* and )((2= #y virt"e of the Service Contract eAec"ted #etween CAM'CO
and !etitioner& All of the res!ondents had already rendered more than one year of service to
!etitioner& >hile some of the res!ondents were still wor;in for !etitioner= others were !"t on
Pstay home stat"sQ on varyin dates in the years )((2= )((6= and )((0 and were no loner
f"rnished with wor; thereafter& Toether= res!ondents Gled a Com!laint with the NLRC for illeal
dismissal= re"lari7ation= wae diHerentials= damaes and attorney<s fees& 'etitioner denied that
res!ondents were its em!loyees& 1t eA!lained that it fo"nd the need to enae eAternal services
to a"ment its re"lar wor;force= which was aHected #y !ea;s in o!eration= wor; #ac;los=
a#senteeism= and eAcessive leaves& 1t "sed to enae the services of individ"al wor;ers for
deGnite !eriods s!eciGed in their em!loyment contracts and never eAceedin one year&
?owever= s"ch an arranement #ecame the s"#Eect of a la#or case= in which !etitioner was
acc"sed of !reventin the re"lari7ation of s"ch wor;ers&
1SSU4S$
>ON the co"rt of a!!eals was correct when it made its own fact"al Gndins and disrearded the
fact"al Gndins of the la#or ar#iter and the NLRC&
>ON CAM'CO was a mere la#or8only contractor&
RUL1NG$
The Co"rt in the eAercise of its eD"ity E"risdiction may loo; into the records of the case and re8
eAamine the D"estioned Gndins& As a corollary= this Co"rt is clothed with am!le a"thority to
review matters= even if they are not assined as errors in their a!!eal= if it Gnds that their
consideration is necessary to arrive at a E"st decision of the case& The same !rinci!les are now
necessarily adhered to and are a!!lied #y the Co"rt of A!!eals in its eA!anded E"risdiction over
la#or cases elevated thro"h a !etition for certiorariM th"s= we see no error on its !art when it
made anew a fact"al determination of the matters and on that #asis reversed the r"lin of the
NLRC&
On the second iss"e= CAM'CO was a mere la#or8only contractor& :irst= altho"h !etitioner to"ts
the m"lti8million !esos assets of CAM'CO= it does well to remem#er that s"ch were amassed in
the years followin its esta#lishment& 1n )((*= when CAM'CO was esta#lished and the Service
Contract #etween !etitioner and CAM'CO was entered into= CAM'CO only had '0=0++&++ !aid8"!
ca!ital= which co"ld hardly #e considered s"#stantial& 1t only manaed to increase its
ca!itali7ation and assets in the s"cceedin years #y contin"ally and deGantly enain in what
had #een declared #y a"thori7ed DOL4 oIcials as la#or8only contractin& Second= CAM'CO did
not carry o"t an inde!endent #"siness from !etitioner& 1t was !recisely esta#lished to render
services to !etitioner to a"ment its wor;force d"rin !ea; seasons& 'etitioner was its only
client& 4ven as CAM'CO had its own oIce and oIce eD"i!ment= these were mainly "sed for
administrative !"r!osesM the tools= machineries= and eD"i!ment act"ally "sed #y CAM'CO
mem#ers when renderin services to the !etitioner #eloned to the latter& Third= !etitioner
eAercised control over the CAM'CO mem#ers= incl"din res!ondents& 'etitioner attem!ts to
ref"te control #y allein the !resence of a CAM'CO s"!ervisor in the wor; !remises& Bet= the
mere !resence within the !remises of a s"!ervisor from the coo!erative did not necessarily
mean that CAM'CO had control over its mem#ers& Section 3-).= R"le 9111= Boo; 111 of the
im!lementin r"les of the La#or Code= as amended= reD"ired for !ermissi#le Eo# contractin that
the contractor "nderta;es the contract wor; on his acco"nt= "nder his own res!onsi#ility=
accordin to his own manner and method= free from the control and direction of his em!loyer or
!rinci!al in all matters connected with the !erformance of the wor; eAce!t as to the res"lts
thereof& As alleed #y the res!ondents= and "nre#"tted #y !etitioner= CAM'CO mem#ers= #efore
wor;in for the !etitioner= had to "ndero instr"ctions and !ass the trainin !rovided #y
!etitioner<s !ersonnel& 1t was !etitioner who determined and !re!ared the wor; assinments of
the CAM'CO mem#ers& CAM'CO mem#ers wor;ed within !etitioner<s !lantation and !rocessin
!lants alonside re"lar em!loyees !erformin identical Eo#s= a circ"mstance reconi7ed as an
indici"m of a la#or8only contractorshi!& :o"rth= CAM'CO was not enaed to !erform a s!eciGc
and s!ecial Eo# or service& 1n the Service Contract of )((*= CAM'CO areed to assist !etitioner
in its daily o!erations= and !erform odd Eo#s as may #e assined& CAM'CO com!lied with this
vent"re #y assinin mem#ers to !etitioner& A!art from that= no other !artic"lar Eo#= wor; or
service was reD"ired from CAM'CO= and it is a!!arent= with s"ch an arranement= that CAM'CO
merely acted as a recr"itment aency for !etitioner& Since the "nderta;in of CAM'CO did not
involve the !erformance of a s!eciGc Eo#= #"t rather the s"!!ly of man!ower only= CAM'CO
clearly cond"cted itself as a la#or8only contractor& Lastly= CAM'CO mem#ers= incl"din
res!ondents= !erformed activities directly related to the !rinci!al #"siness of !etitioner& They
wor;ed as can !rocessin attendant= feeder of canned !inea!!le and !inea!!le !rocessin= nata
de coco !rocessin attendant= fr"it coc;tail !rocessin attendant= and etc&= f"nctions which were=
not only directly related= #"t were very vital to !etitioner<s #"siness of !rod"ction and !rocessin
of !inea!!le !rod"cts for eA!ort&
The declaration that CAM'CO is indeed enaed in the !rohi#ited activities of la#or8only
contractin= then conseD"ently= an em!loyer8em!loyee relationshi! is deemed to eAist #etween
!etitioner and res!ondents= since CAM'CO shall #e considered as a mere aent or intermediary
of !etitioner&
Since res!ondents are now reconi7ed as em!loyees of !etitioner= this Co"rt is tas;ed to
determine the nat"re of their em!loyment& 1n consideration of all the attendant circ"mstances in
this case= this Co"rt concl"des that res!ondents are re"lar em!loyees of !etitioner& As s"ch=
they are entitled to sec"rity of ten"re& They co"ld only #e removed #ased on E"st and a"thori7ed
ca"ses as !rovided for in the La#or Code= as amended= and after they are accorded !roced"ral
d"e !rocess& Therefore= !etitioner<s acts of !lacin some of the res!ondents on Pstay home
stat"sQ and not ivin them wor; assinments for more than siA months were already
tantamo"nt to constr"ctive and illeal dismissal&
In"ercon"inen"al Broa!cas"ing Corp. vs. Panganiban
G&R& No& )6)2+,= :e#r"arry 0= 5++,
:ACTS$
1reneo 'anani#an -res!ondent. was em!loyed as Assistant General Manaer of the
1ntercontinental Broadcastin Cor!oration -!etitioner. from May )(30 "ntil his !reventive
s"s!ension on A""st 50= )(33& Res!ondent resined from his em!loyment on Se!tem#er 5=
)(33&
On A!ril )5= )(3(= res!ondent Gled a civil case with the RTC of C"e7on City= Branch (* aainst
the mem#ers of the Board of Administrators -BOA. of !etitioner allein= amon others= non8
!ayment of his "n!aid commissions& A motion to dismiss was Gled #y %oselito Santiao= one of
the defendants= on the ro"nd of lac; of E"risdiction= as res!ondent<s claim was a la#or money
claim= #"t this was denied #y the RTC& Th"s= Santiao Gled a !etition for certiorari with the CA
which ranted Santiao<s !etition for lac; of E"risdiction and set aside the RTC<s Orders&
Thereafter= res!ondent was elected #y the BOA as 9ice8'resident for Mar;etin in %"ly )((5& ?e
resined in A!ril )((*& On %"ly 52= )((0= res!ondent Gled aainst !etitioner a com!laint for
illeal dismissal= se!aration !ay= retirement #eneGts= "n!aid commissions= and damaes& The
La#or Ar#iter -LA. ordered res!ondent<s reinstatement with f"ll #ac;waes= and the !ayment of
his "n!aid commission= damaes and attorney<s fees& 'etitioner a!!ealed to the NLRC #"t d"e to
!etitioner<s fail"re to !ost a #ond= the a!!eal was dismissed& The decision was deemed Gnal and
eAec"tory&
1SSU4$
>ON res!ondent<s claim for "n!aid commissions has already !rescri#ed&
RUL1NG$
Bes& Res!ondent<s claim had already !rescri#ed as of Se!tem#er )(()& 1n addition= the claims of
!rivate res!ondent for reinstatement= #ac;waes and #eneGts in conE"nction with his
em!loyment from )(30 to )(33 have !rescri#ed&
The a!!lica#le law in this case is Article 5() of the La#or Code which !rovides that Pall money
claims arisin from em!loyer8em!loyee relations accr"in d"rin the eHectivity of this Code shall
#e Gled within three -*. years from the time the ca"se of action accr"edM otherwise they shall #e
forever #arred&Q
The term Pmoney claimsQ covers all money claims arisin from an em!loyer8em!loyee relation
the !rescri!tion of an action is interr"!ted #y -a. the Glin of an action= -#. a written eAtraE"dicial
demand #y the creditor= and -c. a written ac;nowledment of the de#t #y the de#tor&
On this !oint= the Co"rt r"led that altho"h the commencement of a civil action sto!s the
r"nnin of the stat"te of !rescri!tion or limitations= its dismissal or vol"ntary a#andonment #y
!laintiH leaves the !arties in eAactly the same !osition as tho"h no action had #een
commenced at all& ?ence= while the Glin of Civil Case co"ld have interr"!ted the r"nnin of the
three8year !rescri!tive !eriod= its conseD"ent dismissal #y the CA d"e to lac; of E"risdiction
eHectively canceled the tollin of the !rescri!tive !eriod within which to Gle his money claim=
leavin res!ondent in eAactly the same !osition as tho"h no civil case had #een Gled at all& The
r"nnin of the three8year !rescri!tive !eriod not havin #een interr"!ted #y the Glin of Civil
Case res!ondent<s ca"se of action had already !rescri#ed on Se!tem#er 5= )(()= three years
after his cessation of em!loyment on Se!tem#er 5= )(33& ConseD"ently= when res!ondent Gled
his com!laint for illeal dismissal= se!aration !ay= retirement #eneGts= and damaes in %"ly 52=
)((0= his claim= clearly= had already #een #arred #y !rescri!tion&
(ar Eas" Agricul"ural Suppl vs. Leba"igue
G&R& No& )053)*= :e#r"ary )5= 5++,
:ACTS$
'etitioner :ar 4ast Aric"lt"ral S"!!ly hired !rivate res!ondent %immy Le#atiD"e as tr"c; driver
tas;ed to deliver animal feeds& On %an"ary 52= 5+++= Le#atiD"e com!lained of non!ayment of
overtime wor; !artic"larly on %an"ary 55= 5+++= when he was reD"ired to ma;e a second delivery
in Novaliches& That same day Le#atiD"e was s"s!ended a!!arently for illeal "se of com!any
vehicle& ?e re!orted for wor; the neAt day #"t was !rohi#ited from enterin the com!any
!remises&
On %an"ary 50= 5+++= Le#atiD"e so"ht assistance concernin the non!ayment of his overtime
!ay& Accordin to him= two days later= he received a teleram from !etitioners reD"irin him to
re!ort for wor;& ?e re!orted for wor; on %an"ary 5(= 5+++ and was as;ed to eA!lain why he was
claimin overtime !ay& Later= Le#atiD"e was terminated and was told to loo; for another Eo#& On
March 5+= 5+++= Le#atiD"e Gled a com!laint for illeal dismissal and non!ayment of overtime
!ay&
1SSU4$
>hat is the !rescri!tive !eriod for money claimsZ
RUL1NG$
All money claims arisin from an em!loyer8em!loyee relationshi! shall #e Gled within three years
from the time the ca"se of action accr"edM otherwise= they shall #e forever #arred -Article 5()=
LC.& 1f it is esta#lished that the #eneGts #ein claimed have #een withheld from the em!loyee for
a !eriod loner than three years= the amo"nt !ertainin to the !eriod #eyond the three8year
!rescri!tive !eriod is therefore #arred #y !rescri!tion& The amo"nt that can only #e demanded
#y the arieved em!loyee shall #e limited to the amo"nt of the #eneGts withheld within three
years #efore the Glin of the com!laint&
Le#atiD"e timely Gled his claim for service incentive leave !ay= considerin that in this sit"ation=
the !rescri!tive !eriod commences at the time he was terminated& On the other hand= his claim
reardin non!ayment of overtime !ay since he was hired in March )((0 is a diHerent matter& 1n
the case of overtime !ay= he can only demand for the overtime !ay withheld for the !eriod
within three years !recedin the Glin of the com!laint on March 5+= 5+++& ?owever= we Gnd
ins"Icient the selected time records !resented #y !etitioners to com!"te !ro!erly his overtime
!ay& The La#or Ar#iter sho"ld have reD"ired !etitioners to !resent the daily time records= !ayroll=
or other doc"ments in manaement<s control to determine the correct !ayment d"e to him&
1t is immaterial that Le#atiD"e had Gled a com!laint for non!ayment of overtime !ay the day he
was s"s!ended #y manaement<s "nilateral act& >hat matters is that he Gled the com!laint for
illeal dismissal on March 5+= 5+++= after he was told not to re!ort for wor;= and his Glin was
well within the !rescri!tive !eriod allowed "nder the law&
Le"ran Cala#ba (acul" 8 E#ploees Associa"ion vs. NLRC
G&R& No& )60556= %an"ary 5(= 5++3
:ACTS$
On Octo#er 3= )((5= the Letran Calam#a :ac"lty and 4m!loyees Association -!etitioner. Gled
with Reional Ar#itration Branch No& 19 of the National La#or Relations Commission -NLRC. a
Com!laint aainst Coleio de San %"an de Letran= Calam#a= 1nc& -res!ondent. for collection of
vario"s monetary claims d"e its mem#ers& On %an"ary 5(= )((*= res!ondent Gled its 'osition
'a!er denyin all the alleations of !etitioner& On March )+= )((*= !etitioner Gled its Re!ly& 'rior
to the Glin of the a#ove8mentioned com!laint= !etitioner Gled a se!arate com!laint aainst the
res!ondent for money claims with Reional OIce No& 19 of the De!artment of La#or and
4m!loyment -DOL4.& On the other hand= !endin resol"tion of the NLRC Case= res!ondent Gled
with NLRC Reional Ar#itration Branch No& 19 a !etition to declare as illeal a stri;e staed #y
!etitioner in %an"ary )((2&
1SSU4$
>ON the fact"al Gndins of the NLRC can #e reviewed in Certiorari 'roceedins&
RUL1NG$
This Co"rt held in Odano v& National La#or Relations Commission that$ The a!!ellate co"rt<s
E"risdiction to review a decision of the NLRC in a !etition for certiorari is conGned to iss"es of
E"risdiction or rave a#"se of discretion& An eAtraordinary remedy= a !etition for certiorari is
availa#le only and restrictively in tr"ly eAce!tional cases& The sole oIce of the writ of certiorari
is the correction of errors of E"risdiction incl"din the commission of rave a#"se of discretion
amo"ntin to lac; or eAcess of E"risdiction& 1t does not incl"de correction of the NLRC<s
eval"ation of the evidence or of its fact"al Gndins& S"ch Gndins are enerally accorded not
only res!ect #"t also Gnality& A !arty assailin s"ch Gndins #ears the #"rden of showin that the
tri#"nal acted ca!ricio"sly and whimsically or in total disreard of evidence material to the
controversy= in order that the eAtraordinary writ of certiorari will lie&
1n the instant case= the Co"rt Gnds no error in the r"lin of the CA that since nowhere in the
!etition is there any acce!ta#le demonstration that the LA or the NLRC acted either with rave
a#"se of discretion or witho"t or in eAcess of its E"risdiction= the a!!ellate co"rt has no reason to
loo; into the correctness of the eval"ation of evidence which s"!!orts the la#or tri#"nals<
Gndins of fact&
Settled is the r"le that the Gndins of the LA= when aIrmed #y the NLRC and the CA= are #indin
on the S"!reme Co"rt= "nless !atently erroneo"s& 1t is not the f"nction of the S"!reme Co"rt to
analy7e or weih all over aain the evidence already considered in the !roceedins #elow& 1n a
!etition for review on certiorari= this Co"rt<s E"risdiction is limited to reviewin errors of law in the
a#sence of any showin that the fact"al Gndins com!lained of are devoid of s"!!ort in the
records or are larinly erroneo"s& :irm is the doctrine that this Co"rt is not a trier of facts= and
this a!!lies with reater force in la#or cases& :indins of fact of administrative aencies and
D"asi8E"dicial #odies= which have acD"ired eA!ertise #eca"se their E"risdiction is conGned to
s!eciGc matters= are enerally accorded not only reat res!ect #"t even Gnality& They are #indin
"!on this Co"rt "nless there is a showin of rave a#"se of discretion or where it is clearly shown
that they were arrived at ar#itrarily or in "tter disreard of the evidence on record& >e Gnd none
of these eAce!tions in this case&
1n !etitions for review on certiorari li;e the instant case= the Co"rt invaria#ly s"stains the
"nanimo"s fact"al Gndins of the LA= the NLRC and the CA= es!ecially when s"ch Gndins are
s"!!orted #y s"#stantial evidence and there is no coent #asis to reverse the same= as in this
case&
Me"ro )ransi" 6rgani$a"ion vs. Piglas N(2< MM< e". al.
G&R& No& ),620+= A!ril )2= 5++3
:ACTS$
'etitioner Metro Transit Orani7ation= 1nc& -MTO. is a overnment owned and controlled
cor!oration which entered into a Manaement and O!erations Areement -MOA. with the Liht
Rail Transit A"thority -LRTA. for the o!eration of the LRT Baclaran8Mon"mento Line& :or !"r!oses
of CBA= !etitioner MTO<s ran; and Gle em!loyees formed the 'ina8isan La;as n Manaawa
sa Metro= 1nc&8National :ederation of La#or -'1GLAS.& Meanwhile= its manaerial and s"!ervisory
em!loyees created their own "nion #earin the name S"!ervisory 4m!loyees Association of
Metro -S4AM.& 'etitioners MTO and '1GLAS entered into a CBA& S4AM similarly neotiated with
!etitioner MTO "nder a se!arate CBA&
Alleedly disr"ntled with '1GLAS= some ran; and Gle em!loyees formed another "nion "nder
the "m#rella of the 'TG>O8TUC'= which neotiated with manaement for certiGcation as the
new #arainin aent& The intra8"nion dis!"te was settled thro"h a certiGcation election which
'1GLAS won& Thereafter= '1GLAS reneotiated the CBA demandin hiher #eneGts& D"e to a
#arainin deadloc;= '1GLAS Gled a Notice of Stri;e #efore the NCMB and staed a stri;e&
ConseD"ently= ?on& Bienvenido 4& La"esma= then Secretary of DOL4= iss"ed an Order of
Ass"m!tion of %"risdictionJRet"rn to >or;= directin the stri;in em!loyees to immediately ret"rn
to wor;= and !etitioner MTO to ta;e them #ac; "nder the same terms and conditions of
em!loyment !revailin !rior to the stri;e&
The stri;in '1GLAS mem#ers ref"sed to accede to the Ret"rn to >or; Order& :ollowin their
contin"ed non8com!liance= the LRTA formally informed !etitioner MTO that it had iss"ed a Board
Resol"tion which$ -). allowed the eA!iration of LRTA<s MOA with !etitioner MTOM and -5. directed
the LRTA to ta;e over the o!erations and maintenance of the LRT Line& By virt"e of said
Resol"tion= !etitioner MTO sent termination notices to its em!loyees& Res"ltantly= res!ondents
Gled with the La#or Ar#iter Com!laints aainst !etitioners and the LRTA for illeal dismissal=
"nfair la#or !ractice for "nion #"stin= moral and eAem!lary damaesM and attorney<s fees&
The La#or Ar#iter rendered E"dment in favor of res!ondents& 'etitioners a!!ealed to the NLRC=
which dismissed !etitioners< a!!eal for non8!erfection since it failed to !ost the reD"ired #ond&
>itho"t Glin a Motion for Reconsideration= !etitioners Gled a 'etition for Certiorari with the
Co"rt of A!!eals= which dismissed the Resol"tion& 'etitioners moved for the reconsideration of
the a!!ellate co"rt<s dismissal of its 'etition& The Co"rt of A!!eals= however= fo"nd no coent
reason to dist"r# its oriinal concl"sions& ?ence= !etitioners come to this Co"rt&
1SSU4$
>ON a cash or sec"rity #ond is necessary to !erfect an a!!eal&
RUL1NG$
1n cases involvin a monetary award= an em!loyer see;in to a!!eal the decision of the La#or
Ar#iter to the NLRC is "nconditionally reD"ired #y Article 55* of the La#or Code to !ost a cash or
s"rety #ond eD"ivalent to the amo"nt of the monetary award adE"ded& 1t sho"ld #e stressed
that the intention of lawma;ers to ma;e the #ond an indis!ensa#le reD"isite for the !erfection of
an a!!eal #y the em!loyer is "nderscored #y the !rovision that an a!!eal #y the em!loyer may
#e !erfected only "!on the !ostin of a cash or s"rety #ond& The word PonlyQ ma;es it !erfectly
clear that the lawma;ers intended the !ostin of a cash or s"rety #ond #y the em!loyer to #e
the eAcl"sive means #y which an em!loyer<s a!!eal may #e !erfected& Moreover= it #ears
stressin that the !erfection of an a!!eal in the manner and within the !eriod !rescri#ed #y law
is not only mandatory #"t E"risdictional= and fail"re to conform to the r"les will render the
E"dment so"ht to #e reviewed Gnal and "na!!eala#le& 1t cannot #e overem!hasi7ed that the
NLRC R"les= a;in to the R"les of Co"rt= !rom"lated #y a"thority of law= have the force and
eHect of law&
As #orne #y the records= !etitioners Gled a !ro!erty #ond which was conditionally acce!ted #y
the NLRC s"#Eect to the some conditions s!eciGed in its Order& 1n it= the NLRC warned that fail"re
of the !etitioners to com!ly with the conditions wo"ld res"lt in the dismissal of the a!!eal for
non8!erfection thereof& 'etitioners were directed to com!ly with its iven conditions within )+
days from recei!t of the Order with a caveat that their fail"re will res"lt in the dismissal of the
a!!eal& S"#seD"ently= in its )( May 5++0 Resol"tion= the NLRC Gnally made a fact"al Gndin that
!etitioners failed to com!ly with the conditions attached to their !ostin of the !ro!erty #ond&
Th"s= the NLRC dismissed !etitioners< a!!eal for non8!erfection thereof&
4ssentially= the fail"re of !etitioners to com!ly with the conditions for the !ostin of the !ro!erty
#ond is tantamo"nt to a fail"re to !ost the #ond as reD"ired #y law& >hat is even more salient is
the fact that the NLRC had stressed that !etitioners had= for more than a month from recei!t of
its 52 :e#r"ary 5++0 Order= to com!ly with the conditions set forth therein for the !ostin of the
!ro!erty #ond& 1t cannot #e ainsaid that the NLRC had iven !etitioners a !eriod of )+ days
from recei!t of the Order with a warnin that non8com!liance wo"ld res"lt in the dismissal of
their a!!eal for fail"re to !erfect the same& 'etitioners therefore disrearded the r"diments of
the law in the !erfection of their a!!eal& >e are witho"t reco"rse #"t to ta;e !etitioners< fail"re
aainst their interest&
The 'etition is denied&
1.M. Merca!o 8 Sons Agricul"ural En"erprises, Inc. vs. S"o. )o#as
G&R& No& )63+32= A""st 5(= 5++3
:ACTS$
On Decem#er *= )((*= the Reional Tri!artite >aes and 'rod"ctivity Board= Reion ]1= iss"ed
>ae Order No& RT>'B8]18+*= rantin a Cost of Livin Allowance -COLA. to covered wor;ers&
On %an"ary 53= )((2= !etitioner Gled an a!!lication for eAem!tion from the coverae of the
aforesaid wae order& Th"s= however= was denied #y the reional wae #oard for lac; of merit
and ordered the !etitioner to !ay its covered wor;ers the allowance !rescri#ed "nder said >ae
Order&
Notwithstandin the said order= !rivate res!ondents were not iven the #eneGts d"e them& Th"s=
!rivate res!ondents Gled an Urent Motion for >rit of 4Aec"tion= and >rit of Garnishment
see;in the enforcement of s"#Eect wae order aainst several entities incl"din herein
!etitioner&
The O1C8Reional Director= Reion ]1= iss"ed a >rit of 4Aec"tion for the enforcement of the Order
dated A!ril ))= )((2 of the Reional Tri!artite >aes and 'rod"ctivity Board&
On Novem#er ),= )((3 and Novem#er 5*= )((3= res!ectively= !etitioner Gled a Motion to C"ash
the >rit of 4Aec"tion and a S"!!lemental Motion to the Motion to C"ash& 'etitioner ar"ed that
herein !rivate res!ondents< riht had already !rescri#ed d"e to their fail"re to move for the
eAec"tion of the A!ril ))= )((2 Order within the !eriod !rovided "nder Article 5() of the La#or
Code= as amended= or within three -*. years from the Gnality of the said order& Reional Director
denied the motion= th"s the !etitioner Gled a notice of a!!eal which was thereafter denied for
lac; of merit& ?ence a !etition was Gled in SC&
1SSU4S$
>hether or not the Article 5() of the La#or Code is not a!!lica#le to recovery of #eneGts "nder
the s"#Eect >ae Order= which entitled res!ondents to a cost of livin allowance -COLA.Z
>hether or not the claim of the !rivate res!ondents for cost of livin allowance -COLA. !"rs"ant
to the >ae Order has already !rescri#ed #eca"se of the fail"re of the res!ondents to ma;e the
a!!ro!riate claim within the three -*. year !rescri!tive !eriod !rovided #y Article 5() of the
La#or Code= as amended&
RUL1NG$
Art& 5() of the La#or Code a!!lies to money claims in eneral and !rovides for a *8year
!rescri!tive !eriod to Gle them&
On the other hand= res!ondent em!loyees< money claims in this case had #een red"ced to a
E"dment= in the form of a >ae Order= which has #ecome Gnal and eAec"tory& The !rescri!tion
a!!lica#le= therefore= is not the eneral one that a!!lies to money claims= #"t the s!eciGc one
a!!lyin to E"dments& Th"s= the riht to enforce the E"dment= havin #een eAercised within
Gve years= has not yet !rescri#ed&
Stated otherwise= a claimant has three years to !ress a money claim& Once E"dment is rendered
in her favor= she has Gve years to as; for eAec"tion of the E"dment= co"nted from its Gnality&
This is consistent with the r"le on stat"tory constr"ction that a eneral !rovision sho"ld yield to
a s!eciGc one and with the mandate of social E"stice that do"#ts sho"ld #e resolved in favor of
la#or&
>?4R4:OR4= the !etition is D4N14D&
1. Phil. Marine Inc. vs. NLRC
G&R& No& )03**(= Octo#er )+= 5++3
:ACTS$
The herein res!ondent= was a coo; a#oard vessels !lyin overseas= Gled #efore the National
La#or Relations Commission -NLRC. a !ro8forma com!laint aainst !etitioners for "n!aid money
claims= moral and eAem!lary damaes= and attorney<s fees and thereafter Gled two amended !ro
forma com!laints !rayin for the award of overtime !ay= vacation leave !ay= sic; leave !ay= and
disa#ilityJmedical #eneGts= he havin= #y his claim= contracted enlarement of the heart and
severe thyroid enlarement in the dischare of his d"ties as coo; which rendered him disa#led&
La#or Ar#iter :e S"!eriaso8Cellan dismissed res!ondent<s com!laint for lac; of merit #"t the
NLRC reversed the La#or Ar#iter<s decision and awarded USg6+=+++&++ disa#ility #eneGt to
res!ondent& The Co"rt of A!!eals dismissed !etitioners< !etition for= inter alia= fail"re to attach to
the !etition all material doc"ments= and for defective veriGcation and certiGcation& 'etitioners<
Motion for Reconsideration of the a!!ellate co"rt<s Resol"tion was deniedM hence= they Gled the
!resent 'etition for Review on Certiorari&
D"rin the !endency of the case= aainst the advice of his co"nsel= entered into a com!romise
areement with !etitioners= he there"!on sined a C"itclaim and Release s"#scri#ed and sworn
to #efore the La#or Ar#iter& 'etitioners Gled #efore this Co"rt a Manifestation dated May ,= 5++,
informin that= inter alia= they and res!ondent had fored an amica#le settlement&
Res!ondent<s co"nsel also Gled #efore this Co"rt= !"r!ortedly on #ehalf of res!ondent= a
Comment on the !resent !etition& The !arties havin fored a com!romise areement as
res!ondent in fact has eAec"ted a C"itclaim and Release= the Co"rt dismisses the !etition&
1SSU4$
>ON the com!romise areementJdeed of D"it claim entered #y the !arties is validZ
RUL1NG$
Article 55, of the La#or Code !rovides$
Any com!romise settlement= incl"din those involvin la#or standard laws= vol"ntarily areed
"!on #y the !arties with the assistance of the De!artment of La#or= shall #e Gnal and #indin
"!on the !arties& The National La#or Relations Commission or any co"rt shall not ass"me
E"risdiction over iss"es involved therein eAce!t in case of non8com!liance thereof or if there is
!rima facie evidence that the settlement was o#tained thro"h fra"d= misre!resentation= or
coercion&
1n Olay#ar v& NLRC= the Co"rt= reconi7in the concl"siveness of com!romise settlements as a
means to end la#or dis!"tes= held that Article 5+*, of the Civil Code= which !rovides that PVaW
com!romise has "!on the !arties the eHect and a"thority of res E"dicata=Q a!!lies s"!!letorily to
la#or cases even if the com!romise is not E"dicially a!!roved& That res!ondent was not assisted
#y his co"nsel when he entered into the com!romise does not render it n"ll and void& 4"rotech
?air Systems= 1nc& v& Go so enlihtens$
A com!romise areement is valid as lon as the consideration is reasona#le and the em!loyee
sined the waiver vol"ntarily= with a f"ll "nderstandin of what he was enterin into& All that is
reD"ired for the com!romise to #e deemed vol"ntarily entered into is !ersonal and s!eciGc
individ"al consent& Th"s= contrary to res!ondent<s contention= the em!loyee<s co"nsel need not
#e !resent at the time of the sinin of the com!romise areement&
1t #ears notin that= as reTected earlier= the C"itclaim and >aiver was s"#scri#ed and sworn to
#efore the La#or Ar#iter& 'etition D1SM1SS4D
S vs. ALC In!us"ries
G&R& No& )03**(= Octo#er )+= 5++3
:ACTS$
'etitioner was hired #y res!ondent cor!oration ALC11 as a s"!ervisor in its !"rchasin oIce& She
was thereafter assined to ALC11<s constr"ction !roEect in Davao City as #"siness manaer and
s"!ervisor of the Administrative Division& ?er Davao assinment was from May )((, to A!ril )6=
)(((&
'etitioner alleed that res!ondents ref"sed to !ay her salary #einnin A""st )((3 and
allowances #einnin %"ne )((3= des!ite her almost wee;ly ver#al follow8"!& 'etitioner Gled a
com!laint #efore the la#or ar#iter for "n!aid salaries and allowances& Des!ite several notices
and warnins= res!ondents did not Gle a !osition !a!er to controvert !etitioner<s claims& The
case was s"#mitted for resol"tion #ased solely on !etitioner<s alleations and evidence&
1n his %"ne *+= 5+++ decision= the la#or ar#iter ordered ALC11 andJor DeAter Ceriales to !ay
!etitioner '535=60+ re!resentin her "n!aid salary and allowance&
Res!ondents Gled an a!!eal with motion for red"ction of #ond in the National La#or Relations
Commission -NLRC. witho"t !ostin any cash or s"rety #ond& 1n a resol"tion dated Se!tem#er 0=
5++)= the NLRC dismissed res!ondents< a!!eal& 1t r"led that res!ondents failed to add"ce
s"#stantial evidence to s"!!ort their ar"ments of non8lia#ility& Moreover= it fo"nd no E"stiGa#le
reason to rant a red"ction in the reD"ired #ond&
Res!ondents were a#le to Gle a motion for reconsideration on time= accom!anied #y a Eoint
"nderta;inJdeclaration in lie" of the cash or s"rety #ond& Nevertheless= res!ondents< motion for
reconsideration was denied&
On A""st 5= 5++5= res!ondents Gled a motion for clariGcation #"t this was li;ewise denied&
Res!ondents D"estioned the NLRC<s denial of their motion for clariGcation and reconsideration in
the CA via a !etition for certiorari and !rohi#ition&
1n its March *+= 5++6 decision= the CA set aside the resol"tions of the NLRC and the decision of
the la#or ar#iter and dismissed !etitioner<s com!laint&
1SSU4$
>ON the decision of the La#or Ar#iter has #ecome Gnal and eAec"tory&
RUL1NG$
Article 55*& A''4AL& 8 Decisions= awards= or orders of the La#or Ar#iter are Gnal and eAec"tory
"nless a!!ealed to the Commission #y any or #oth !arties within ten calendar days from recei!t
of s"ch decisions= awards= or orders& AAA&
1n case of a E"dment involvin a monetary award= an a!!eal #y the em!loyer may #e !erfected
only "!on the !ostin of a cash or s"rety #ond iss"ed #y a re!"ta#le #ondin com!any d"ly
accredited #y the Commission in the amo"nt eD"ivalent to the monetary award in the E"dment
a!!ealed from& -em!hasis s"!!lied.
Section )= R"le 91 of the R"les of 'roced"re of the NLRC= as amended= li;ewise !rovides that the
a!!eal m"st #e Gled within ten days from recei!t of the decision= resol"tion or order of the la#or
ar#iter& Moreover= Section 0 of the same r"les !rovides that an a!!eal #y the em!loyer may #e
!erfected only "!on the !ostin of a cash or s"rety #ond& As the riht to a!!eal is merely a
stat"tory !rivilee= it m"st #e eAercised only in the manner and in accordance with the
!rovisions of the law& Otherwise= the riht to a!!eal is lost&
1n a lon line of cases= we have r"led that the !ayment of the a!!eal #ond is a E"risdictional
reD"isite for the !erfection of an a!!eal to the NLRC& The lawma;ers intended to ma;e the
!ostin of a cash or s"rety #ond #y the em!loyer the eAcl"sive means #y which an em!loyer<s
a!!eal may #e !erfected& The rationale for this r"le is$
The reD"irement that the em!loyer !ost a cash or s"rety #ond to !erfect itsJhis a!!eal is
a!!arently intended to ass"re the wor;ers that if they !revail in the case= they will receive the
money E"dment in their favor "!on the dismissal of the em!loyers< a!!eal& 1t was intended to
disco"rae em!loyers from "sin an a!!eal to delay= or even evade= their o#liation to satisfy
their em!loyee<s E"st and lawf"l claims&
The eA!lanation advanced #y res!ondents for their fail"re to !ay the a!!eal #ond #elies their
claim& The NLRC fo"nd that res!ondents did not !ay the a!!eal #ond on the mista;en notion that
they were not lia#le for the monetary award and had already ceased o!erations d"e to
#an;r"!tcy& Res!ondents #elatedly Gled a #ond with their motion for reconsideration of the
NLRC<s dismissal of their a!!eal& >e cannot co"ntenance s"ch Tarant disreard of esta#lished
r"les of !roced"re on a!!eals&
Moreover= the Glin of a Eoint "nderta;inJdeclaration= Gled way #eyond the ten8day
relementary !eriod for !erfectin an a!!eal and as a s"#stit"te for the cash or s"rety #ond= did
not o!erate to validate the lost a!!eal&
The decision of the la#or ar#iter therefore #ecame Gnal and eAec"tory for fail"re of res!ondents
to !erfect their a!!eal within the relementary !eriod& Clearly= the CA no loner had E"risdiction
to entertain res!ondents< a!!eal from the la#or ar#iter<s decision&
Res!ondents !oint o"t that we have occasionally allowed eAce!tions to mandatory and
E"risdictional reD"irements in the !erfection of a!!eals= s"ch as disreardin "nintended la!ses
on the #asis of stron and com!ellin reasons& This is tr"e& ?owever= the o#vio"s motive #ehind
res!ondents< !lea for li#erality is to thwart !etitioner<s claims& This we cannot allow&
Res!ondents< la!ses were far from "nintentional& They were deli#erate attem!ts to circ"mvent
esta#lished r"les&
Res!ondents< other contention that they were de!rived of d"e !rocess is li;ewise devoid of
merit& D"e !rocess is satisGed when the !arties are aHorded fair and reasona#le o!!ort"nity to
eA!lain their res!ective sides of the controversy& 1n Mariveles Shi!yard Cor!& v& CA= we held$
The reD"irements of d"e !rocess in la#or cases #efore a La#or Ar#iter is satisGed when the
!arties are iven the o!!ort"nity to s"#mit their !osition !a!ers to which they are s"!!osed to
attach all the s"!!ortin doc"ments or doc"mentary evidence that wo"ld !rove their res!ective
claims= in the event that the La#or Ar#iter determines that no formal hearin wo"ld #e
cond"cted or that s"ch hearin was not necessary& -em!hasis s"!!lied.&
>e r"led in Times Trans!ortation Com!any= 1nc& v& Sotelo$
To eAtend the !eriod of a!!eal is to !rolon the resol"tion of the case= a circ"mstance which
wo"ld ive the em!loyer the o!!ort"nity to wear o"t the enery and meaer reso"rces of the
wor;ers to the !oint that they wo"ld #e constrained to ive "! for less than what they deserve in
law&
PCI )ravel Corp vs. NLRC
G&R& No& )62*,(= Octo#er *)= 5++3
:ACTS$
A com!laint for "nfair la#or !ractice was Gled aainst !etitioner #y res!ondent NUB48
AM4]'4AJ'C1 Travel 4m!loyees Union with the latter claimin that the former had #een Gllin "!
!ositions left #y re"lar ran;8and8Gle with contract"al em!loyees= #"t were !erformin wor;
which were "s"ally necessary and desira#le in the "s"al #"siness or trade of the !etitioner&
'etitioner moved to dismiss the com!laint on the ro"nd that the Union was not the real !arty8in8
interest and then they manifested their readiness to !rove that said em!loyees were !rovided #y
inde!endent leitimate contractors and that it was not enaed in la#or8only contractin in
!osition !a!er yet to #e s"#mitted= #"t the motion to dismiss is to #e resolved Grst&
?owever= the La#or Ar#iter rendered a decision in favor of the res!ondent r"lin that a motion to
dismiss was a !rohi#ited !leadin& The same was aIrmed #y the NLRC #"t with modiGcation
deletin the awards of damaes& Before the CA= the !etition was dismissed for fail"re to attach
co!ies of !leadins and doc"ments relevant and !ertinent to the same and the #eca"se of the
a#sence of !roof that 4li7a#eth Learda -!etitioner<s !resident. was d"ly a"thori7ed to sin the
veriGcation and certiGcation of non8for"m sho!!in&
1SSU4
>hether the 'resident of a cor!oration is a"thori7ed to sin the veriGcation and certiGcation
aainst non8for"m sho!!in witho"t need of a #oard resol"tion&
>hether or not the a!!ellate co"rt has erred in dismissin the !etition on a sinle technicality&
RUL1NG$
>hile it m"st #e #orne in mind that "nder the Cor!oration Code= an individ"al cor!orate oIcer
cannot solely eAercise any cor!orate !ower !ertainin to the cor!oration witho"t the a"thority
from the #oard of directors= the S"!reme Co"rt however had r"led otherwise in a lon line of
cases #efore it& S"mmin it "!= the followin oIcials or em!loyees of the com!any can sin the
veriGcation and certiGcation witho"t need of a #oard resol"tion$ -). Chair!erson of the BOD= -5.
'resident= -*. General Manaer or Actin GM= -2. 'ersonnel OIcer and -6. an 4m!loyment
S!ecialist in a la#or case&
Th"s= that the 'resident of the cor!oration can sin the veriGcation and certiGcation witho"t need
of a #oard resol"tion= there th"s eAists a com!ellin reason for the reinstatement of the !etition
#efore the CA&
A !er"sal of the !etition for certiorari wo"ld reveal that !etitioner intended to show the rave
a#"se of discretion committed #y the la#or tri#"nals in not allowin the !etitioner the am!le
o!!ort"nity to s"#mit its !osition !a!er on the alleed violation of the CBA& The La#or Ar#iter
and the NLRC viewed it as a waiver on its !art and hastened to r"le that Psince the com!lainant<s
alleations remain "nre#"tted= they are deemed correct and valid&Q D"e !rocess dictates that a
!erson sho"ld #e iven the o!!ort"nity to #e heard& Unfort"nately= this was not accorded to the
!etitioner and s"ch riht was even foreclosed when the a!!ellate co"rt dismissed the !etition
#efore it on technical ro"nds&
The !olicy of o"r E"dicial system is to enco"rae f"ll adE"dication of the merits of an a!!eal& 4nds
of E"stice are #etter served when #oth !arties are heard and the controversy decided on its
merits& Th"s= in the eAercise of its eD"ity E"risdiction= the Co"rt will not hesitate to reverse the
dismissal of a!!eals that are ro"nded merely on technicalities&
Lope$ vs. ;.C. Spor"s Club
G&R& No& )02+*5= %an"ary )(= 5++(
:ACTS$
Claimin that it is a reistered inde!endent la#or orani7ation and the inc"m#ent collective
#arainin aent of C"e7on City S!orts Cl"# -CCSC.= the Kasa!ian Manaawa sa C"e7on City
S!orts Cl"# -"nion. Gled a com!laint for "nfair la#or !ractice aainst CCSC on )5 Novem#er
)((,&
The Union averred that it was ordered to s"#mit a new information sheet& 1t immediately wrote a
letter addressed to the eneral manaer= Anel Sadan= to inD"ire a#o"t the information sheet=
only to #e ins"lted #y the latter& The mem#ers of the "nion were not !aid their salaries on *+
%"ne )((,& A #oard mem#er= Antonio Ch"a alleedly harassed one of the em!loyees and told
him not to Eoin the stri;e and even !romised a !romotion& On 2 %"ly )((,= the "nion wrote a
letter to the manaement for the release of the mem#ers< salaries for the !eriod )08*+ %"ne
)((,= im!lementation of >ae Order No& 6= and rantin of wae increases mandated #y the
Collective Barainin Areement -CBA.& >hen its letter went "nanswered= the "nion Gled a
notice of stri;e on )+ %"ly )((, for violation of Article 523 -a.-c.-e. of the La#or Code=
non!ayment of overtime !ay= ref"sal to hear its rievances= and malicio"s ref"sal to com!ly with
the economic !rovisions of the CBA& After cond"ctin a stri;e vote= it staed a stri;e on )5
A""st )((,& On )0 A""st )((,= the CCSC !laced some of its em!loyees "nder tem!orary lay8
oH stat"s d"e to red"ndancy& 1t a!!ears that on 55 Decem#er )((,= CCSC also Gled a !etition
for cancellation of reistration aainst the "nion&
The La#or Ar#iter -L"stria. fo"nd CCSC "ilty of "nfair la#or !ractice& CCSC a!!ealed from the
la#or ar#iter<s decision& 1t also Gled a motion for red"ction of the a!!eal #ond to '2=+++=+++&++&
The NLRC ordered the !ostin of an additional '0=+++=+++&++. &CCSC Gled a s"!!lement to its
a!!eal= citin a decision -Dino!ol decision. dated ( Octo#er )((3 of La#or Ar#iter 4rnesto
Dino!ol declarin the stri;e of the "nion illeal& The dis!ositive !ortion reads$
>?4R4:OR4= in view of the Union<s havin violated the no8stri;e8no8loc;o"t !rovision of the
Collective Barainin Areement= the stri;e it staed on A""st )5= )((3 is here#y declared
illeal and conseD"ently= !"rs"ant to Article 502 of the La#or Code= the individ"al res!ondents=
namely$ RON1LO C& L44= 4DUARDO 9& SANT1A= C4C1LL4 C& 'ANGAN= ROM4O M& MORGA= G4NARO
C& BANDO AND AL4] %& SANT1AGO= who admitted in !arara!h ) of their !osition !a!er that they
are oIcersJmem#ers of the com!lainin Union are here#y declared to have lost their
em!loyment stat"s&
Meanwhile= the National La#or Relations Commission -NLRC. rendered a decision rantin the
a!!eal and reversin the L"stria decision& 1t ratiocinated$
Be that as it may= >e are of the view that the Decision in NLRC CAS4 NO& ++8+(8+00*8(, m"st
!erforce !revail over the a!!ealed Decision and the latter to yield to it& 1t m"st remain
"ndist"r#ed followin the esta#lished doctrine on !rimacy and Gnality of decision& 1t #ears
stressin at this E"nct"re= at the ris; of #ein re!etitio"s= that in NLRC Case No& ++8+(8+00*8(,
the em!loyment stat"s of herein individ"al com!lainants was already declared lost or forfeited
as of A""st )5= )((3= the day the illeal stri;e was staed& :rom then on= they ceased to #e
em!loyees of res!ondent S!orts Cl"#& The forfeit"re of their em!loyment stat"s carries with it
the eAtinction of their riht to demand for and #e entitled to the economic #eneGts accorded
them #y law and the eAistin CBA& :or= s"ch riht is !remised on the fact of em!loyment&
The other com!lainants -!etitioners. meanwhile Gled a motion for reconsideration which was
denied #y the NLRC& They Gled a !etition for certiorari "nder R"le 06 #efore the Co"rt of A!!eals
#"t was denied&
1SSU4S$
)& Do the sim"ltaneo"s Glin of the motion to red"ce the a!!eal #ond and !ostin of the
red"ced amo"nt of #ond within the relementary !eriod for a!!eal constit"te s"#stantial
com!liance with Article 55* of the La#or CodeZ
5& >hether the NLRC erred in declarin them to have lost their em!loyment contrary to the
Dino!ol decision which only aHected a few of the em!loyees who were "nion mem#ers&
RUL1NG$
:irst iss"e$
Under the R"les= a!!eals involvin monetary awards are !erfected only "!on com!liance with
the followin mandatory reD"isites= namely$ -). !ayment of the a!!eal feesM -5. Glin of the
memorand"m of a!!ealM and -*. !ayment of the reD"ired cash or s"rety #ond&
Th"s= the !ostin of a #ond is indis!ensa#le to the !erfection of an a!!eal in cases involvin
monetary awards from the decision of the la#or ar#iter& The Glin of the #ond is not only
mandatory #"t also a E"risdictional reD"irement that m"st #e com!lied with in order to confer
E"risdiction "!on the NLRC& Non8com!liance with the reD"irement renders the decision of the
la#or ar#iter Gnal and eAec"tory& This reD"irement is intended to ass"re the wor;ers that if they
!revail in the case= they will receive the money E"dment in their favor "!on the dismissal of the
em!loyer<s a!!eal& 1t is intended to disco"rae em!loyers from "sin an a!!eal to delay or
evade their o#liation to satisfy their em!loyees< E"st and lawf"l claims&
?owever= Section 0 of the New R"les of 'roced"re of the NLRC also mandates= amon others=
that no motion to red"ce #ond shall #e entertained eAce!t on meritorio"s ro"nds and "!on the
!ostin of a #ond in a reasona#le amo"nt in relation to the monetary award& ?ence= the NLRC
has the f"ll discretion to rant or deny the motion to red"ce the amo"nt of the a!!eal #ond&
1n the case of Nicol v& :ootEoy 1nd"strial Cor!oration r"led that the #ond reD"irement on a!!eals
involvin monetary awards had #een and co"ld #e relaAed in meritorio"s cases s"ch as$ -). there
was s"#stantial com!liance with the R"lesM -5. the s"rro"ndin facts and circ"mstances
constit"te meritorio"s ro"nds to red"ce the #ondM -*. a li#eral inter!retation of the reD"irement
of an a!!eal #ond wo"ld serve the desired o#Eective of resolvin controversies on the meritsM or
-2. the a!!ellants= at the very least= eAhi#ited their willinness andJor ood faith #y !ostin a
!artial #ond d"rin the relementary !eriod& A!!lyin these E"ris!r"dential "idelines= we Gnd
and hold that the NLRC did not err in red"cin the amo"nt of the a!!eal #ond and considerin
the a!!eal as havin #een Gled within the relementary !eriod&
The !ostin of the amo"nt of '2=+++=+++&++ sim"ltaneo"sly with the Glin of the motion to
red"ce the #ond to that amo"nt= as well as the Glin of the memorand"m of a!!eal= all within
the relementary !eriod= altoether constit"te s"#stantial com!liance with the R"les&
Second iss"e$
>e r"le in favor of !etitioners&
The assailed Dino!ol decision involves a com!laint for illeal stri;e Gled #y CCSC on the ro"nd
of a Pno8stri;e no loc;o"tQ !rovision in the CBA& The challened decision was rendered in
accordance with law and is s"!!orted #y fact"al evidence on record& 1n the notice of stri;e= the
"nion did not state in !artic"lar the acts which alleedly constit"te "nfair la#or !ractice&
Moreover= #y virt"e of the Pno8stri;e no loc;o"tQ !rovision in the CBA= the "nion was !rohi#ited
from stain an economic stri;e= i&e&= to force wae or other concessions from the em!loyer
which he is not reD"ired #y law to rant& ?owever= it sho"ld #e noted that while the stri;e
declared #y the "nion was held illeal= only the "nion oIcers were declared as havin lost their
em!loyment stat"s& 1n eHect= there was a r"lin only with res!ect to some "nion mem#ers while
the stat"s of all others had remained dis!"ted&
There is no conTict #etween the Dino!ol and the L"stria decisions& >hile #oth r"lins involve the
same !arties and same iss"es= there is a distinction #etween the remedies so"ht #y the !arties
in these two cases& 1n the Dino!ol decision= it was CCSC which Gled a !etition to declare the
illeality of the )5 A""st )((, stri;e #y the "nion& The conseD"ence of the declaration of an
illeal stri;e is termination from em!loyment= which the La#or Ar#iter did so r"le in said case&
?owever= not all "nion mem#ers were terminated& 1n fact= only a few "nion oIcers were validly
dismissed in accordance with Article 502 of the La#or Code& Corollarily= the other "nion mem#ers
who had merely !artici!ated in the stri;e #"t had not committed any illeal acts were not
dismissed from em!loyment& ?ence= the NLRC erred in declarin the em!loyment stat"s of all
em!loyees as havin #een lost or forfeited #y virt"e of the Dino!ol decision&
On the other hand= the L"stria decision involved the "nfair la#or !ractices alleed #y the "nion
with !artic"larity& 1n said case= La#or Ar#iter L"stria sided with the Union and fo"nd CCSC "ilty
of s"ch !ractices& As a conseD"ence= the aHected em!loyees were ranted #ac;waes and
se!aration !ay& The rant of #ac;waes and se!aration !ay however was not !remised on the
declaration of the illeality of the stri;e #"t on the Gndin that these aHected em!loyees were
constr"ctively dismissed from wor;= as evidenced #y the layoHs eHected #y the com!any&
Therefore= with res!ect to !etitioners and "nion oIcers AleA %& Santiao= Ma& Cecilia 'anan=
Ronilo 4& Lee= and Genaro Bando= who a!!arently had #een s"#stit"ted #y !resent !etitioner
Teresita Bando= the Dino!ol decision declarin them as havin lost their em!loyment stat"s still
stands&
To reca!it"late= the NLRC erred in settin aside the L"stria decision= as well as in deletin the
award of #ac;waes and se!aration !ay= des!ite the Gndin that the aHected em!loyees had
#een constr"ctively dismissed&
Based on the foreoin= the L"stria decision sho"ld #e "!held and therefore reinstated eAce!t as
reards the fo"r !etitioners&
Loc*hee! &e"ec"ive An! 2a"ch#an Agenc, Inc. vs. <niversi" 6f )he Philippines
G&R& No& )36()3= A!ril )3= 5+)5
:acts$
The !etition is for review on certiorari "nder R"le 26& 'etitioner Loc;heed entered into a contract
of sec"rity with the University of the 'hili!!ines& On )((3= several of the "ards assined to U'
Gled a com!laint for "n!aid waes= 56X overtime !ay= !remi"m !ay for rest days and s!ecial
holidays= holiday !ay= service incentive leave !ay= niht shift diHerentials= )*th month !ay=
ref"nd of cash #ond= ref"nd of ded"ctions for the M"t"al BeneGts Aids System -MBAS.= "n!aid
waes from Decem#er )08*)= )((3= and attorneyNs fees&
The La#or Ar#iter declared U' solidarily lia#le& The decision was a!!ealed #"t s"stained #y the
NLCR= al#eit a few modiGcations& The !arties motion to reconsider was li;ewise denied& On %"ly
56= 5++6= a Notice of Garnishment )+ was iss"ed to 'hili!!ine National Ban; -'NB. U' Diliman
Branch for the satisfaction of the award of ')5=)25=655&0( -incl"sive of eAec"tion fee.&
On A""st )0= 5++6= U' Gled an Urent Motion to C"ash Garnishment& U' contended that the
f"nds #ein s"#Eected to arnishment at 'NB are overnmentJ!"#lic f"nds& ?owever= the
eAec"tion of the arnishment was carried o"t& U' elevated their case to the co"rt of a!!eals& On
reconsideration= however= the CA iss"ed the assailed Amended Decision& 1t held that witho"t
de!artin from its Gndins that the f"nds covered in the savins acco"nt so"ht to #e arnished
do not fall within the classiGcation of !"#lic f"nds= it reconsiders the dismissal of the !etition in
liht of the r"lin in the case of National 4lectriGcation Administration v& Morales which mandates
that all money claims aainst the overnment m"st Grst #e Gled with the Commission on A"dit
-COA.&
Loc;heed a!!ealed this decision to the S"!reme Co"rt& Ar"in mainly that the N4A case sho"ld
not a!!ly and that U' co"ld #e #oth s"ed and held lia#le& And that the D"ashal of arnishment
so"ht was moot #eca"se it had already #ecome fait accom!li&
1SSU4S$
>hether or not the N4A Case a!!lies and the f"nds #e arnished directly #y!assin the COA&
>hether or not the !revio"s arnishment and withdrawal of f"nds was fait accom!li&
RUL1NG$
B4S& This Co"rt Gnds that the CA correctly a!!lied the N4A case& Li;e N4A= U' is a E"ridical
!ersonality se!arate and distinct from the overnment and has the ca!acity to s"e and #e s"ed&
Th"s= also li;e N4A= it cannot evade eAec"tion= and its f"nds may #e s"#Eect to arnishment or
levy& ?owever= #efore eAec"tion may #e had= a claim for !ayment of the E"dment award m"st
Grst #e Gled with the COA& -s"a#ility does not immediately mean lia#ility.&
NO& As to the fait accom!li ar"ment of Loc;heed= contrary to its claim that there is nothin that
can #e done since the f"nds of U' had already #een arnished= since the arnishment was
erroneo"sly carried o"t and did not o thro"h the !ro!er !roced"re -the Glin of a claim with
the COA.= U' is entitled to reim#"rsement of the arnished f"nds !l"s interest of 0X !er ann"m=
to #e com!"ted from the time of E"dicial demand to #e rec;oned from the time U' Gled a !etition
for certiorari #efore the CA which occ"rred riht after the withdrawal of the arnished f"nds from
'NB&
Por"illo v. Ru!olf Lie"$
(ac"sE
'otillo was hired #y R"dolf in Liet7 Co& "nder the condition that 'otillo will not enae in
any other ainf"l em!loyment #y himself or with any other com!any either directly or
indirectly witho"t written consent of Liet7 1nc&= otherwise 'otillo will #e lia#le for liD"idated
damaes&
U!on his !romotion= 'otillo sined another letter areement containin a PGoodwill
Cla"seQ statin that$
P/on the termination of his em!loyment and for a !eriod of three -*. years
thereafter= he shall not enae directly or indirectly as em!loyee= manaer=
!ro!rietor= or solicitor for himself or others in a similar or com!etitive
#"siness or the same character of wor; which he was em!loyed #y Liet7 1nc&
to do and !erform& Sho"ld he #reach this ood will cla"se of this Contract= he
shall !ay Liet7 1nc& as liD"idated damaes the amo"nt of )++X of his ross
com!ensation over the last )5 months&Q
Three -*. years thereafter= on 0 %"ne 5++6= 'ortillo resined from Liet7 1nc& D"rin her eAit
interview= 'ortillo declared that she intended to enae in #"sinessa rice dealershi!=
sellin rice in wholesale&
On )6 %"ne 5++6= Liet7 1nc& acce!ted 'ortillos resination and reminded her of the
LGoodwill Cla"seL in the last letter areement she had sined&
S"#seD"ently= Liet7 1nc& learned that 'ortillo had #een hired #y 4d Keller 'hili!!ines=
Limited to head its 'harma Raw Material De!artment& 4d Keller Limited is !"r!ortedly a
direct com!etitor of Liet7 1nc&
Meanwhile= 'ortillos demands from Liet7 1nc& for the !ayment of her remainin salaries and
commissions went "nheeded& Liet7 1nc& ave 'ortillo the r"n aro"nd= on the !reteAt that
her salaries and commissions were still #ein com!"ted&
S"#seD"ently= 'ortillo Gled a com!laint with the National La#or Relations Commission
-NLRC. for non8!ayment of ) months salary= two -5. months commission= )*th month !ay=
!l"s moral= eAem!lary and act"al damaes and attorneys fees&
1n its !osition !a!er= Liet7 1nc& admitted lia#ility for 'ortillos money claims in the total
amo"nt of '))+=005&)0& ?owever= Liet7 1nc& raised the defense of leal com!ensation$
'ortillos money claims sho"ld #e oHset aainst her lia#ility to Liet7 1nc& for liD"idated
damaes for 'ortillos alleed #reach of the LGoodwill Cla"seL in the em!loyment contract
when she #ecame em!loyed with 4d Keller 'hili!!ines= Limited&
1ss"e$
)& >ho has E"risdiction over the !resent controversyZ
5& >hether 'ortillos money claims for "n!aid salaries may #e oHset aainst res!ondents
claim for liD"idated damaes&
?eld$
0! 1urisdiction belongs to the Civil Courts!
'etitioner see;s !rotection "nder the civil laws and claims no #eneGts "nder the La#or
Code& The !rimary relief so"ht is for liD"idated damaes for #reach of a contract"al
o#liation& The other items demanded are not la#or #eneGts demanded #y wor;ers
enerally ta;en coni7ance of in la#or dis!"tes= s"ch as !ayment of waes= overtime
com!ensation or se!aration !ay& The items claimed are the nat"ral conseD"ences Towin
from #reach of an o#liation= intrinsically a civil dis!"te&
:"rthermore= non8com!ete cla"se= as in the LGoodwill Cla"seL refers to !ost8em!loyment
relations of the !arties& The LGoodwill Cla"seL or the LNon8Com!ete Cla"seL is a
contract"al "nderta;in eHective after the cessation of the em!loyment relationshi!
#etween the !arties& 1n accordance with E"ris!r"dence= #reach of the "nderta;in is a civil
law dis!"te= not a la#or law case&
As it is= !etitioner does not as; for any relief "nder the La#or Code& 1t merely see;s to
recover damaes #ased on the !arties contract of em!loyment as redress for res!ondents
#reach thereof& S"ch ca"se of action is within the realm of Civil Law= and E"risdiction over
the controversy #elons to the re"lar co"rts& More so m"st this #e in the !resent case=
what with the reality that the sti!"lation refers to the !ostem!loyment relations of the
!arties&
#! 2o, it ma not be!
1ndeed= the a!!lication of com!ensation in this case is eHectively #arred #y Article ))* of
the La#or Code which !rohi#its wae ded"ctions eAce!t in three circ"mstances$
ART& ))*& Wage 3eduction& No em!loyer= in his own #ehalf or in #ehalf of any
!erson= shall ma;e any ded"ction from waes of his em!loyees= eAce!t$
-a. 1n cases where the wor;er is ins"red with his consent #y the em!loyer= and the
ded"ction is to recom!ense the em!loyer for the amo"nt !aid #y him as
!remi"m on the ins"ranceM
-#. :or "nion d"es= in cases where the riht of the wor;er or his "nion to chec;8oH
has #een reconi7ed #y the em!loyer or a"thori7ed in writin #y the individ"al
wor;er concernedM and
-c. 1n cases where the em!loyer is a"thori7ed #y law or re"lations iss"ed #y the
Secretary of La#or&
Buil!ing care Corp. vs Macaraeg
G&R& No& )(3*6,
:acts$
'etitioners are in the #"siness of !rovidin sec"rity services to their clients& On A""st 56= )((0=
Res!ondent was hired #y !etitioners as a sec"rity "ard& She was assined at Genato B"ildin in
Caloocan City from )((0 to 5++3& On March (= 5++3 she was reassined to Bayview 'ar; ?otel
and was s"#seD"ently relieved& Afterwards she was alleedly iven no more Eo#s for a !eriod of (
months amo"ntin to constr"ctive dismissal&
Th"s= on Se!tem#er (= 5++3= res!ondent Gled a com!laint aainst !etitioners for illeal
dismissal= "nder!ayment of salaries= non8!ayment of se!aration !ay and ref"nd of cash #ond&
'etitioners contend however that it was res!ondent<s actions that led to her #ein relieved as
she acted not in consonance with her Eo#& The La#or Ar#iter favo"red !etitioner dismissin
res!ondent<s com!laint for lac; of merit& The NLRC dismissed res!ondent<s a!!eal for #ein Gled
o"t of time& The co"rt of A!!eals reversed the decision of NLRC and ranted the !etition for
certiorari&
1SSU4$ >hether or not The Co"rt of A!!eals erred in li#erally a!!lyin the r"les of !roced"reZ
>hether or not !etition is meritorio"sZ
RUL1NG$
The riht to a!!eal is not a nat"ral riht or !art of d"e !rocessM it is merely a stat"tory !rivilee
and may #e eAercised only in the manner and in accordance with the !rovisions of law& Th"s= one
who see;s to avail of the riht to a!!eal m"st strictly com!ly with the reD"irements of the r"les=
and fail"re to do so leads to the loss of the riht to a!!eal&L
1n Ocam!o v& Co"rt of A!!eals -:ormer Second Division.= the Co"rt declared that$ P>e cannot
condone the !ractice of !arties who= either #y their own or their co"nselNs inadvertence= have
allowed a E"dment to #ecome Gnal and eAec"tory and= after the same has #ecome imm"ta#le=
see; iniD"ito"s ways to assail it& The Gnality of a decision is a E"risdictional event which cannot
#e made to de!end on the convenience of the !arties&Q
'etition is meritorio"s& >hen the La#or Ar#iterNs Decision #ecame Gnal= !etitioners attained a
vested riht to said E"dment& They had the riht to f"lly rely on the imm"ta#ility of said
Decision& 1n SoGo v& 9alen7"ela= it was am!ly stressed that$ The Co"rt will not override the Gnality
and imm"ta#ility of a E"dment #ased only on the nelience of a !arty<s co"nsel in timely
ta;in all the !ro!er reco"rses from the E"dment& To E"stify an override= the co"nsel<s
nelience m"st not only #e ross #"t m"st also #e shown to have de!rived the !arty the riht
to d"e !rocess&

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University of San Carlos

School of Law and Governance

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