2012 FILRO CASES ON WAGES

Charlie Jao v. BCC Product Sales Inc.

G. R. No. 163700 April 18, 2012

Facts of the Case:
Petitioner was employed as BCCs comptroller. He was barred from entering his office
and his previous attempts to report to work were frustrated for continued barring for him
to enter his workplace.
Petitioner filed for Illegal dismissal, reinstatement plus backwages.
Respondent BCC denied that Petitioner was their employee but the employee of Sobien
Foods Corp., a creditor & supplier of BCC. SFC posted Petitioner as one of its
comptrollers in BCC.
The Labor Arbiter rules in favor of petitioner but such order was vacated and remanded
by the NLRC where it was found that there was no employer-employee relationship
between the petitioner and the respondent.

Issue: Was there employer-employee relationship between petitioner and respondent? Was the
petitioner validly dismissed? If so, is he entitled to backwages?

SC Ruling:
The existence of an employer-employee relationship is a question of fact. Generally, a
re-examination of factual findings cannot be done by the Court acting on a petition for
review on certiorari because the Court is not a trier of facts but reviews only questions of
law. Nor may the Court be bound to analyze and weigh again the evidence adduced and
considered in the proceedings below. This rule is not absolute, however, and admits of
exceptions. For one, the Court may look into factual issues in labor cases when the
factual findings of the Labor Arbiter, the NLRC, and the CA are conflicting.
To prove his employment with BCC, petitioner offered the following:
(a) BCC Identification Card (ID) issued to him stating his name and his position as
"comptroller," and bearing his picture, his signature, and the signature of Ty;
(b) a payroll of BCC for the period of October 1-15, 1996 that petitioner approved as
comptroller;
(c) various bills and receipts related to expenditures of BCC bearing the signature of
petitioner;
(d) various checks carrying the signatures of petitioner and Ty, and, in some checks, the
signature of petitioner alone;
(e) a court order showing that the issuing court considered petitioners ID as proof of his
employment with BCC;
(f) a letter of petitioner dated March 1, 1997 to the Department of Justice on his filing of a
criminal case for estafa against Ty for non-payment of wages;
(g) affidavits of some employees of BCC attesting that petitioner was their co-employee
in BCC; and
(h) a notice of raffle dated December 5, 1995 showing that petitioner, being an employee
of BCC, received the notice of raffle in behalf of BCC.

Respondents denied that petitioner was BCCs employee. They affirmed that SFC had
installed petitioner as its comptroller in BCC to oversee and supervise SFCs collections
and the account of BCC to protect SFCs interest; that their issuance of the ID to
petitioner was only for the purpose of facilitating his entry into the BCC premises in
relation to his work of overseeing the financial operations of BCC for SFC; that the ID
should not be considered as evidence of petitioners employment in BCC

It can be deduced from the March 1996 affidavit of petitioner that respondents
challenged his authority to deliver some 158 checks to SFC. Considering that he
contested respondents challenge by pointing to the existing arrangements between
BCC and SFC, it should be clear that respondents did not exercise the power of control
over him, because he thereby acted for the benefit and in the interest of SFC more than
of BCC.

In addition, petitioner presented no document setting forth the terms of his employment
by BCC.1wphi1 The failure to present such agreement on terms of employment may be
understandable and expected if he was a common or ordinary laborer who would not
jeopardize his employment by demanding such document from the employer, but may
not square well with his actual status as a highly educated professional.

Petitioners admission that he did not receive his salary for the three months of his
employment by BCC, as his complaint for illegal dismissal and non-payment of wages25
and the criminal case for estafa he later filed against the respondents for non-payment of
wages26 indicated, further raised grave doubts about his assertion of employment by
BCC. If the assertion was true, we are puzzled how he could have remained in BCCs
employ in that period of time despite not being paid the first salary of P20,000.00/month.
Moreover, his name did not appear in the payroll of BCC despite him having approved
the payroll as comptroller.

Lockheed Detective & Watchman Agency v. University of the Philippines
G.R. No. 185918 April 18, 2012

Facts of the Case
Petitioner entered into a contract for security services with respondent University of the
Philippines
Several guard assigned to UP filed complaints against Lockheed & UP for payment of
underpaid wages, Overtime pay, premium pay, holiday pay, service incentive leave,
night shift differential, 13
th
month pay, cash bond and unpaid wages.
The Labor Arbiter ruled that Lockheed & UP solidarily liable.

Issue: Who is liable to pay the claims of the Guards?

SC Ruling:
Lockheed contends that UP has its own separate and distinct juridical entity from the
national government and has its own charter. Thus, it can be sued and be held liable.
Moreover, Executive Order No. 714 entitled "Fiscal Control and Management of the
Funds of UP" recognizes that "as an institution of higher learning, UP has always
granted full management and control of its affairs including its financial affairs."
Therefore, it cannot shield itself from its private contractual liabilities by simply invoking
the public character of its funds. Lockheed also cites several cases wherein it was ruled
that funds of public corporations which can sue and be sued were not exempt from
garnishment.
UP is a juridical personality separate and distinct from the government and has the
capacity to sue and be sued. Thus, also like NEA, it cannot evade execution, and its
funds may be subject to garnishment or levy. However, before execution may be had, a
claim for payment of the judgment award must first be filed with the COA. Under
Commonwealth Act No. 327,22 as amended by Section 26 of P.D. No. 1445, it is the
COA which has primary jurisdiction to examine, audit and settle "all debts and claims of
any sort" due from or owing the Government or any of its subdivisions, agencies and
instrumentalities, including government-owned or controlled corporations and their
subsidiaries. With respect to money claims arising from the implementation of Republic
Act No. 6758, their allowance or disallowance is for COA to decide, subject only to the
remedy of appeal by petition for certiorari to this Court.

We cannot subscribe to Lockheeds argument that NEA is not similarly situated with UP
because the COAs jurisdiction over the latter is only on post-audit basis. A reading of
the pertinent Commonwealth Act provision clearly shows that it does not make any
distinction as to which of the government subdivisions, agencies and instrumentalities,
including government-owned or controlled corporations and their subsidiaries whose
debts should be filed before the COA.

As to the fait accompli argument of Lockheed, contrary to its claim that there is nothing
that can be done since the funds of UP had already been garnished, since the
garnishment was erroneously carried out and did not go through the proper procedure
(the filing of a claim with the COA), UP is entitled to reimbursement of the garnished
funds plus interest of 6% per annum, to be computed from the time of judicial demand to
be reckoned from the time UP filed a petition for certiorari before the CA which occurred
right after the withdrawal of the garnished funds from PNB.

Petitioner Lockheed Detective and Watchman Agency, Inc. is ordered to reimburse
respondent University of the Philippines the amount of P12,062,398.71 plus interest of
6% per annum, to be computed from September 12, 2005 up to the finality of this
Decision, and 12% interest on the entire amount from date of finality of this Decision until
fully paid.

Norkis Distributors Inc. v. Delfin Descallar
G.R. No. 185255 March 14, 2012

Facts of the Case:
Delfin Descallar was assigned at Iligan branch of Norkis, he became a regular employee
& subsequently became a manager. He went on an absence without leave.
Norkis wrote to Delfin regarding his absence and why the records show that he was
rendering undertime work.
Delfin explained that he was on officela business and talking to clients
On investigation it was later found that Delfin was not actually on official business but
was addressing personal matters. He was subsequently suspended.
Delfin was ultimately dismissed for loss of managements confidence and trust.

Issue: Was Delfin Validly dismissed? If so, can he claim for unpaid wages?


SC Ruling:
Loss of trust and confidence as a ground for termination of an employee under Article
282 of the Labor Code requires that the breach of trust be willful, meaning it must be
done intentionally, knowingly, and purposely, without justifiable excuse. The basic
premise for dismissal on the ground of loss of confidence is that the employees
concerned holds a position of trust and confidence. It is the breach of this trust that
results in the employers loss of confidence in the employee.
To our mind, the failure to reach the monthly sales quota cannot be considered an
intentional and unjustified act of respondent amounting to a willful breach of trust on his
part that would call for his termination based on loss of confidence. This is simply not
the willful breach of trust and confidence contemplated in Article 282(c) of the Labor
Code. Indeed, the low sales performance could be attributed to several factors which
are beyond respondents control. To be a valid ground for an employees dismissal, loss
of trust and confidence must be based on a willful breach. To repeat, a breach is willful
if it is done intentionally, knowingly and purposely, without justifiable excuse.
An illegally dismissed employee is entitled to two reliefs: back wages and reinstatement.
The two reliefs provided are separate and distinct. In instances where reinstatement is
no longer feasible because of strained relations between the employee and the
employer, separation pay is granted. In effect, an illegally dismissed employee is entitled
to either reinstatement if such is viable, or separation pay if reinstatement is no longer
viable, and to back wages.
The normal consequences of respondents illegal dismissal, then, are reinstatement
without loss of seniority rights, and payment of back wages computed from the time
compensation was withheld from him up to the date of actual reinstatement. Where
reinstatement is no longer viable as an option, separation pay equivalent to one month
salary for every year of service should be awarded as an alternative. The payment of
separation pay is in addition to payment of back wages.


New Philippines Skylanders Inc. V. Francisco Dakila
G.R. No. 199547 September 24, 2012

Facts of the Case:
Dakila was employed by petitioner for 10 years & terminated for cause when the
corporation was sold.
Dakila informed the petitioner of his compulsory retirement and sought payment of
retirement benefits pursuant to a CBA, but was not acted upon by petitioner.
Dakila filed a complaint for constructive illegal dismissal, non-payment of retirement
benefits & under/non-payment of wages & benefits of a regular employee.
Petitioner alleged that Dakila was not their regular employee but a mere consultant.

Issue: Was Dakila validly dismissed? If so, is he entitled for unpaid wages?

SC Ruling:
The issue of illegal dismissal is premised on the existence of an employer-employee
relationship between the parties herein. It is essentially a question of fact, beyond the
ambit of a petition for review on certiorari under Rule 45 of the Rules of Court unless
there is a clear showing of palpable error or arbitrary disregard of evidence which does
not obtain in this case. Records reveal that both the LA and the NLRC, as affirmed by
the CA, have found substantial evidence to show that respondent Dakila was a regular
employee who was dismissed without cause.
Following Article 279 of the Labor Code, an employee who is unjustly dismissed from
work is entitled to reinstatement without loss of seniority rights and other privileges and
to his full backwages computed from the time he was illegally dismissed. However,
considering that respondent Dakila was terminated on May 1, 2007, or one (1) day prior
to his compulsory retirement on May 2, 2007, his reinstatement is no longer feasible.
Accordingly, the NLRC correctly held him entitled to the payment of his retirement
benefits pursuant to the CBA. On the other hand, his backwages should be computed
only for days prior to his compulsory retirement which in this case is only a day.
Consequently, the award of reinstatement wages pending appeal must be deleted for
lack of basis.


Superior Packaging Corp. v. Arnel Balagsa Et. Al.
G.R. No. 178909 October 10, 2012

Facts of the Case:
Petitioner Superior engaged the services of Lancer to provide reliever services to its
business which involves manufacture & sales of industrial and corrugated boxes.
Respondents sued for underpayment of wages, non-payment of premium pay, OT pay
and non-payment of salary.
The Secretary of Labor conducted an investigation and found: (1) non-presentation of
payrolls and daily time records; (2) non-submission of annual report of safety
organization; (3) medical and accident/illness reports; (4) non-registration of
establishment under Rule 1020 of Occupational and Health Standards; and (5) no
trained first aide.
The Secretary ordered in favor of the respondents.
Petitioner countered that the respondents were not their employees but of Lancer.

Issue: May Superior be held solidarily liable with Lancer for unpaid wages?

SC Ruling:
It was the consistent conclusion of the DOLE and the CA that Lancer was not an
independent contractor but was engaged in "labor-only contracting"; hence, the
petitioner was considered an indirect employer of respondents and liable to the latter for
their unpaid money claims.
At the time of the respondents employment in 1998, the applicable regulation was
DOLE Department Order No. 10, Series of 1997.25 Under said Department Order,
labor-only contracting was defined as follows:
Sec. 9. Labor-only contracting. (a) Any person who undertakes to supply workers to
an employer shall be deemed to be engaged in labor-only contracting where such
person:
(1) Does not have substantial capital or investment in the form of tools, equipment,
machineries, work premises and other materials; and
(2) The workers recruited and placed by such persons are performing activities which
are directly related to the principal business or operations of the employer in which
workers are habitually employed.
Labor-only contracting is prohibited and the person acting as contractor shall be
considered merely as an agent or intermediary of the employer who shall be
responsible to the workers in the same manner and extent as if the latter were directly
employed by him.
Finally, a finding that a contractor is a "labor-only" contractor is equivalent to declaring
that there is an employer-employee relationship between the principal and the
employees of the supposed contractor, and the "labor only" contractor is considered as
a mere agent of the principal, the real employer. The former becomes solidarily liable for
all the rightful claims of the employees. The petitioner therefore, being the principal
employer and Lancer, being the labor-only contractor, are solidarily liable for
respondents unpaid money claims.


3D Alert Security & Detective Services v. Rolando Navia
G.R. No. 200653 June 13, 2012

Facts of the Case:
Rolando Navia filed an illegal dismissal case against 3D Alert.
The Labor Arbiter ruled that his dismissal was illegal and was affirmed by the NLRC.
Navia filed an ex-parte motion for computation of backwages & an ex-parte motion for
execution based on the computated backwages.
3D alert appealed the computed backwages, it also averred that the NLRC committed
grave abuse of discretion since there was already a notice of reinstatement.
The NLRC ruled that 3D Alert is guilty of bad faith since there was no earnest effort to
reinstate Navia. Such notice of reinstatement was never sent even to Navias counsel.

Issue: Was 3D Alert in Bad Faith? Can Navia recover his wages?

SC Ruling:
Article 223 of the Labor Code provides that in case there is an order of reinstatement,
the employer must admit the dismissed employee under the same terms and conditions,
or merely reinstate the employee in the payroll. The order shall be immediately
executory. Thus, 3rd Alert cannot escape liability by simply invoking that Navia did not
report for work. The law states that the employer must still reinstate the employee in the
payroll. Where reinstatement is no longer viable as an option, separation pay equivalent
to one (1) month salary for every year of service could be awarded as an alternative.
Also, the main issue of this case, finding Navia to have been illegally dismissed, has
already attained finality. Litigation must end and terminate sometime and somewhere,
and it is essential for an effective and efficient administration of justice that, once a
judgment has become final, the winning party be not deprived of the fruits of the
verdict.6 The order is to reinstate Navia; sadly, the mere execution of this judgment has
to even reach the highest court of the land, thereby frustrating the entire judicial process.
This justifies the treble costs we now impose against 3rd Alert.
"It is settled that in actions for recovery of wages or where an employee was forced to
litigate and incur expenses to protect his right and interest, he is entitled to an award of
attorney's fees."8 Navia, having been compelled to litigate due to 3rd Alerts failure to
satisfy his valid claim, is also entitled to attorney's fees of ten percent (10%) of the total
award at the time of actual payment, following prevailing jurisprudence.



Eastern Mediterranean Maritime LTD. & Ageman Manning Agency v. Anislao Sunio et.
al.
G.R. No. 154213 August 23, 2012

Facts of the Case:
Respondents were former crewmwmbers of MT Seadance, a vessel owned by Eastern
Mediterranean Maritime and manned and operated bny Agemar Manning Agency.
While respondents were still aboard the vessel they experienced delays in payment of
wages, remittance of allowances & were not paid for work rendered and overtime pay.
The ITF found that their wages were below the prevailing rate and ordered petitioners
pay the appropriate rate.
The respondents were repatriated. Thereafter they filed a complaint for disciplinary
action for reimbursement of wage increases in the workers assistance & adjudication
office of the POEA.
R.A. 8042 was subsequently pass during the pendency of the complaint which vested
original & exclusive jurisdiction over disputes arising out of employer-employee
relationship of OFW with the Labor Arbiter.

Issue: Who has jurisdiction over the case?

SC Ruling:
Petitioners position that Republic Act No. 8042 should not be applied retroactively to the
review of the POEAs decision dismissing their complaint against respondents has no
support in jurisprudence. Although, as a rule, all laws are prospective in application
unless the contrary is expressly provided,8 or unless the law is procedural or curative in
nature,9 there is no serious question about the retroactive applicability of Republic Act
No. 8042 to the appeal of the POEAs decision on petitioners disciplinary action against
respondents. In a way, Republic Act No. 8042 was a procedural law due to its providing
or omitting guidelines on appeal. A law is procedural, according to De Los Santos v.
Vda. De Mangubat,10 when it

Refers to the adjective law which prescribes rules and forms of procedure in order that
courts may be able to administer justice. Procedural laws do not come within the legal
conception of a retroactive law, or the general rule against the retroactive operation of
statues they may be given retroactive effect on actions pending and undetermined at
the time of their passage and this will not violate any right of a person who may feel that
he is adversely affected, insomuch as there are no vested rights in rules of procedure.

Republic Act No. 8042 applies to petitioners complaint by virtue of the case being then
still pending or undetermined at the time of the laws passage, there being no vested
rights in rules of procedure.11 They could not validly insist that the reckoning period to
ascertain which law or rule should apply was the time when the disciplinary complaint
was originally filed in the POEA in 1993. Moreover, Republic Act No. 8042 and its
implementing rules and regulations were already in effect when petitioners took their
appeal. A statute that eliminates the right to appeal and considers the judgment
rendered final and unappealable only destroys the right to appeal, but not the right to
prosecute an appeal that has been perfected prior to its passage, for, at that stage, the
right to appeal has already vested and cannot be impaired.12 Conversely and by
analogy, an appeal that is perfected when a new statute affecting appellate jurisdiction
comes into effect should comply with the provisions of the new law, unless otherwise
provided by the new law. Relevantly, petitioners need to be reminded that the right to
appeal from a decision is a privilege established by positive laws, which, upon
authorizing the taking of the appeal, point out the cases in which it is proper to present
the appeal, the procedure to be observed, and the courts by which the appeal is to be
proceeded with and resolved.13 This is why we consistently hold that the right to appeal
is statutory in character, and is available only if granted by law or statute.

When Republic Act No. 8042 withheld the appellate jurisdiction of the NLRC in respect
of cases decided by the POEA, the appellate jurisdiction was vested in the Secretary of
Labor in accordance with his power of supervision and control under Section 38(1),
Chapter 7, Title II, Book III of the Revised Administrative Code of 1987, to wit:

Section 38. Definition of Administrative Relationship. Unless otherwise expressly
stated in the Code or in other laws defining the special relationships of particular
agencies, administrative relationships shall be categorized and defined as follows:

Supervision and Control. Supervision and control shall include authority to act directly
whenever a specific function is entrusted by law or regulation to a subordinate; direct the
performance of duty; restrain the commission of acts; review, approve, reverse or modify
acts and decisions of subordinate officials or units; determine priorities in the execution
of plans and programs. Unless a different meaning is explicitly provided in the specific
law governing the relationship of particular agencies, the word "control" shall encompass
supervision and control as defined in this paragraph.


Peoples Broadcasting Service (Bombo Radyo) v. Secretary of Labor and Employment
G.R. No. 179652 March 6, 2012

Facts of the Case:
Private respondent Jandeleon Juezan filed a complaint, before the DOLE regional office
against petitioner for illegal deduction, non-payment of service incentive leave,13
th

month pay, holiday pay & restday and illegal dimunition of benefits, delayed payment of
wages & non-coverage of the SSS, Pag-ibig & Philhealth.
It was found by the DOLE Regional Director that Juezan was an employee of petitioner
& ordered that he is entitled to money claims.

Issue: Who has jurisdiction to determine employer-employee relationship? Is the private
respondent entitled to backwages?

SC Ruling:
Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully
empowered to make a determination as to the existence of an employer-employee
relationship in the exercise of its visitorial and enforcement power, subject to judicial
review, not review by the NLRC.

There is a view that despite Art. 128(b) of the Labor Code, as amended by RA 7730,
there is still a threshold amount set by Arts. 129 and 217 of the Labor Code when money
claims are involved, i.e., that if it is for PhP 5,000 and below, the jurisdiction is with the
regional director of the DOLE, under Art. 129, and if the amount involved exceeds PhP
5,000, the jurisdiction is with the labor arbiter, under Art. 217. The view states that
despite the wording of Art. 128(b), this would only apply in the course of regular
inspections undertaken by the DOLE, as differentiated from cases under Arts. 129 and
217, which originate from complaints. There are several cases, however, where the
Court has ruled that Art. 128(b) has been amended to expand the powers of the DOLE
Secretary and his duly authorized representatives by RA 7730. In these cases, the Court
resolved that the DOLE had the jurisdiction, despite the amount of the money claims
involved. Furthermore, in these cases, the inspection held by the DOLE regional director
was prompted specifically by a complaint. Therefore, the initiation of a case through a
complaint does not divest the DOLE Secretary or his duly authorized representative of
jurisdiction under Art. 128(b).

To recapitulate, if a complaint is brought before the DOLE to give effect to the labor
standards provisions of the Labor Code or other labor legislation, and there is a finding
by the DOLE that there is an existing employer-employee relationship, the DOLE
exercises jurisdiction to the exclusion of the NLRC. If the DOLE finds that there is no
employer-employee relationship, the jurisdiction is properly with the NLRC. If a complaint
is filed with the DOLE, and it is accompanied by a claim for reinstatement, the
jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code, which
provides that the Labor Arbiter has original and exclusive jurisdiction over those cases
involving wages, rates of pay, hours of work, and other terms and conditions of
employment, if accompanied by a claim for reinstatement. If a complaint is filed with the
NLRC, and there is still an existing employer-employee relationship, the jurisdiction is
properly with the DOLE. The findings of the DOLE, however, may still be questioned
through a petition for certiorari under Rule 65 of the Rules of Court.

In the present case, the finding of the DOLE Regional Director that there was an
employer-employee relationship has been subjected to review by this Court, with the
finding being that there was no employer-employee relationship between petitioner and
private respondent, based on the evidence presented. Private respondent presented
self-serving allegations as well as self-defeating evidence.10 The findings of the
Regional Director were not based on substantial evidence, and private respondent failed
to prove the existence of an employer-employee relationship. The DOLE had no
jurisdiction over the case, as there was no employer-employee relationship present.
Thus, the dismissal of the complaint against petitioner is proper.



Jomar Verdadero v. Barney Auto lines Group of Companies and Transportation Inc.
G.R. No. 195428 August 29, 2012

Facts of the Case:
Jomar Verdadero was a bus conductor for Barney autolines. On Kanuary 27, 2008 an
altercation between Verdadero & Atty. Gerardo Gimenez, Barney autolines disciplinary
officer. The altercation was because Verdadero did not give Atty. Gimenez & his wife a
free fide in the bus contrary to company policy.
Verdadero was asked to write an apology letter. He did not comply, due to such non-
compliance, he believed that he was dismissed.
He filed a case for illegal dismissal before the Labor Arbiter claiming non-payment of
holiday pay, 13
th
month pay, separation pay, retirement pay, moral & exemplary
damages, backwages and reinstatement.

Issue: was Verdadero validly dismissed? If so, is he entitled to backwages?

SC Ruling:
Constructive dismissal exists where there is cessation of work, because "continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a
demotion in rank or a diminution in pay" and other benefits. Aptly called a dismissal in
disguise or an act amounting to dismissal but made to appear as if it were not,
constructive dismissal may, likewise, exist if an act of clear discrimination, insensibility,
or disdain by an employer becomes so unbearable on the part of the employee that it
could foreclose any choice by him except to forego his continued employment.
In this case, Verdadero cannot be deemed constructively dismissed. Records do not
show any demotion in rank or a diminution in pay made against him. Neither was there
any act of clear discrimination, insensibility or disdain committed by BALGCO against
Verdadero which would justify or force him to terminate his employment from the
company.
It is to be emphasized that the abovementioned acts should have been committed by the
employer against the employee. Unlawful acts committed by a co-employee will not
bring the matter within the ambit of constructive dismissal.
On Reinstatement and Backwages, Article 279 of the Labor Code, as amended,
provides:

Art. 279. Security of tenure. In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when authorized by this
Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual reinstatement.
(As amended by Section 34, Republic Act No. 6715, March 21, 1989)

Reinstatement and backwages are reliefs available to an illegally dismissed employee.
Reinstatement restores the employee who was unjustly dismissed to the position from
which he was removed, that is, to his status quo ante dismissal, while the grant of
backwages allows the same employee to recover from the employer that which he had
lost by way of wages as a result of his dismissal. These twin remedies - reinstatement
and payment of backwages - make the dismissed employee whole who can then look
forward to continued employment. Thus, do these two remedies give meaning and
substance to the constitutional right of labor to security of tenure.34

In the case at bench, considering that there has been no dismissal at all, there can be no
reinstatement.1wphi1 One cannot be reinstated to a position he is still holding. As there
is no reinstatement to speak of, Verdadero cannot invoke the doctrine of strained
relations. It is only applied when there is an order for reinstatement that is no longer
feasible. In the same vein, no separation pay can be awarded as it is given only in lieu of
reinstatement. Consequently, there is likewise no justification for the award of
backwages. The CA was correct in ruling against the payment of backwages following
the "no work, no pay" principle.

Vivian Ramirez et. al. v. Mar Fishing Company
G.R. No. 168208 June 13, 2012

Facts of the Case:
Respondent is engaged in the business of fishing and catching tuna. It sold its principal
assets to Miramar Fishing Co.
Respondent informed its employees that it is closing the business.
The Recognized union of the respondent Mar Fishing Workers Unon & Miramar
entered into a memorandum of agreement that the latter shall absorb the respondents
rank & file employees without loss of seniority rights.
The employees of the respondent were never absorbed by Miramar Fishing Company.

Issue: who would be liable for the employees monetary claims?

SC Ruling:
Basing their conclusion on the Memorandum of Agreement and Supplemental
Agreement between Miramar and Mar Fishings labor union, as well as the General
Information Sheets and Company Profiles of the two companies, petitioners assert that
Miramar simply took over the operations of Mar Fishing. In addition, they assert that
these companies are one and the same entity, given the commonality of their directors
and the similarity of their business venture in tuna canning plant operations.

At the fore, the question of whether one corporation is merely an alter ego of another is
purely one of fact generally beyond the jurisdiction of this Court. In any case, given only
these bare reiterations, this Court sustains the ruling of the LA as affirmed by the NLRC
that Miramar and Mar Fishing are separate and distinct entities, based on the marked
differences in their stock ownership. Also, the fact that Mar Fishings officers remained
as such in Miramar does not by itself warrant a conclusion that the two companies are
one and the same. As this Court held in Sesbreo v. Court of Appeals, the mere
showing that the corporations had a common director sitting in all the boards without
more does not authorize disregarding their separate juridical personalities.

Neither can the veil of corporate fiction between the two companies be pierced by the
rest of petitioners submissions, namely, the alleged take-over by Miramar of Mar
Fishings operations and the evident similarity of their businesses. At this point, it bears
emphasizing that since piercing the veil of corporate fiction is frowned upon, those who
seek to pierce the veil must clearly establish that the separate and distinct personalities
of the corporations are set up to justify a wrong, protect a fraud, or perpetrate a
deception.This, unfortunately, petitioners have failed to do. In Indophil Textile Mill
Workers Union vs. Calica, we ruled thus

In the case at bar, petitioner seeks to pierce the veil of corporate entity of Acrylic,
alleging that the creation of the corporation is a devi[c]e to evade the application of the
CBA between petitioner Union and private respondent company. While we do not
discount the possibility of the similarities of the businesses of private respondent and
Acrylic, neither are we inclined to apply the doctrine invoked by petitioner in granting the
relief sought. The fact that the businesses of private respondent and Acrylic are related,
that some of the employees of the private respondent are the same persons manning
and providing for auxiliary services to the units of Acrylic, and that the physical plants,
offices and facilities are situated in the same compound, it is our considered opinion that
these facts are not sufficient to justify the piercing of the corporate veil of Acrylic.
Having been found by the trial courts to be a separate entity, Mar Fishing and not
Miramar is required to compensate petitioners. Indeed, the back wages and retirement
pay earned from the former employer cannot be filed against the new owners or
operators of an enterprise