BROTHERHOOD LABOR UNITY MOVEMENT vs HON.

ZAMORA (1991)
FACTS:

Petitioners-members of Brotherhood Labor Unit Movement of the Philippines

(BLUM), worked as cargadores or pahinante since 1961 at the SMC Plant. Sometime in
January 1969, the petitioner workers numbering 140 organized themselves and engaged in
union activities.

Believing that they are entitled to overtime and holiday pay, the petitioners aired their
gripes and grievances but it was not heeded by the respondents. One of the union member
was dismissed from work. Hence, the petitioners filed a complaint of unfair labor practice
against respondent SMC on the ground of illegal dismissal.

On the other hand, SMC argued that the complainant are not or have never been their
employees but they are the employees of the Guaranteed Labor Contractor, an independent
labor contracting firm

Labor Arbiter Nestor Lim rendered a decision in favor of the complainants which was
affirmed by the NLRC

On appeal, the Secretary set aside the NLRC ruling stressing the absence of an employeremployee relationship

Issue: Whether an employer-employee relationship exists between petitioners and respondent

San Miguel Corporation
HELD: YES
In determining the existence of an employer-employee relationship, the elements that are
generally considered are the following: (a) the selection and engagement of the employee; (b)
the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the
employee with respect to the means and methods by which the work is to be accomplished. It is
the called "control test" that is the most important element

In the CAB, petitioners worked continuously and exclusively for an average of 7 years for the
company. Considering the length of time that the petitioners have worked, there is justification to
conclude that they were engaged to perform activities necessary or desirable in the usual
business of trade of the respondent. Hence, petitioners are considered regular employees.
Even assuming that there is a contract of employment executed between SMC and the said labor
contractor, the court ruled that Guaranteed and Reliable Labor contractors have neither
substantial capital nor investment to qualify as an independent contractor under the law. The
premises, tools and equipments used by the petitioners in their jobs are all supplied by the
respondent SMC. It is only the manpower or labor, force which the alleged contractors supply,
suggesting the existence of a "labor only" contracting scheme prohibited by law
It is important to emphasize that that in a truly independent contractor-contractee relationship,
the fees are paid directly to the manpower agency in lump sum without indicating or implying
that the basis of such lump sum is the salary per worker multiplied by the number of workers
assigned to the company.
In the CAB, the alleged independent contractors were paid a lump sum representing only
the salaries the workers were entitled to, arrived at by adding the salaries of each worker which
depend on the volume of work they had accomplished individually. Therefore, there is no
independent contractor-contractee relationship.
WHEREFORE, PETITION IS GRANTED.

DAYAG vs HON. CENIZARES, JR. (1998)

FACTS:

Petitioners were hired to work as tower crane operators by one Alfredo Young, a building
contractor doing business in the name of Youngs construction. In 1991, they were transferred
to Cebu City to work for Youngs Shoemart Cebu Project. Petitioner William Dayag asked
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permission to go to Manila to attend family matters and was allowed to do so but was not
paid for January 23-30 due to his accountability for the loss of certain construction tools. The
other petitioners left due to harassment by Young. Thereafter, petitioners banded together and
filed a complaint against Young before the NCR Arbitration Branch NLRC which was
assigned to Labor Arbiter Cenizares.

Young filed a Motion to transfer the case to the Regional Arbitration Branch, Region
VII of the NLRC. He contended that the case should be filed in Cebu City because there is
where the workplace of the petitioners.

Petitioners opposed the same, arguing that all of them are from Metro Manila and that
they could not afford trips to Cebu. Besides, they claimed that respondents main office is in
Corinthian Garden in QC.

Labor Arbiter Cenizares GRANTED Youngs motion to transfer the case in Cebu.

Petitioners appealed to NLRC but it was dismissed. Hence, they filed a MFR and this
time the Commission SET ASIDE its previous decision and remanded the case to the
original arbitration branch of the NCR for further proceedings.

Young filed his own MFR and the NLRC reinstated its first decision directing the
transfer of the case to Cebu City.

Issue: Whether the Labor Arbiter acted with grave abuse of discretion when it entertained
Youngs motion to transfer
HELD: NO
The SC ruled that litigations should, as much as possible, be decided on the merits and not
technicalities. Petitioners were able to file an opposition on the motion to transfer case which
was considered by Labor Arbiter Cenizares. Hence, there is no showing that they have been
unduly prejudiced by the motions failure to give notice and hearing.
However, Young cannot derive comfort from this petition. The SC held that the question of
venue relates more to the convenience of the parties rather than upon the substance and merits of
the case. This is to assure convenience for the plaintiff and his witness and to promote the ends
of justice under the principle that the State shall afford protection to labor. The reason for
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this is that the worker, being the economically-disadvantaged party, the nearest governmental
machinery to settle the dispute must be placed at his immediate disposal, and the other party is
not to be given the choice of another competent agency sitting in another place as this will
unduly burden the former
In the instant case, the ruling specifying the NCR Arbitration Branch as the venue of the present
action cannot be considered oppressive to Young because his residence in Corinthian Gardens
also serves as his correspondent office. Hearing the case in Manila would clearly expedite the
proceedings and bring speedy resolution to the instant case.
WHEREFORE, PETITION IS GRANTED.
PEPSI-COLA BOTTLING COMPANY vs HON. MARTINEZ (1982)
FACTS:

Respondent Abraham Tumala, Jr. was salesman petitioner company in Davao City. In the
annual Sumakwel contest conducted by the company, he was declared the winner of the
Lapu-Lapu Award for his performance as top salesman of the year, an award which entitled
him to a prize of a house and lot. Petitioner company, despite demands, have unjustly refused
to deliver said prize.

It was alleged that in 1980, petitioner company, in a manner oppressive to labor and without
prior clearance from the Ministry of Labor, arbitrarily and illegally terminated his
employment. Hence, Tumala filed a complaint in the CFI Davao and prayed that petitioner
be ordered to deliver his prize of house and lot or its cash equivalent, and to pay his back
salaries and separation benefits.

Petitioner moved to dismiss the complaint on grounds of lack of jurisdiction. Respondent

Tumala maintains that the controversy is triable exclusively by the court of general
jurisdiction
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Issue: Whether it is the court of general jurisdiction and not the Labor Arbiter that has exclusive
jurisdiction over the recovery of unpaid salaries, separation and damages
HELD: NO
SC ruled that the Labor Arbiter has exclusive jurisdiction over the case. Jurisdiction over the
subject matter is conferred by the sovereign authority which organizes the court; and it is given
by law. Jurisdiction is never presumed; it must be conferred by law in words that do not
admit of doubt.
Under the Labor Code, the NLRC has the exclusive jurisdiction over claims, money or
otherwise, arising from ER-EE relations, except those expressly excluded therefrom. The claim
for the said prize unquestionable arose from an ER-EE relation and, therefore, falls within the
coverage of P.D. 1691, which speaks of all claims arising from ER-EE relations, unless
expressly excluded by this Code. To hold that Tumalas claim for the prize should be passed
upon by the regular courts of justice would be to sanction split jurisdiction and multiplicity of
suits which are prejudicial to the orderly of administration of justice.
WHEREFORE, PETITION IS GRANTED
SAN MIGUEL CORP. vs NLRC (1988)
FACTS:

Petitioner San Miguel Corporation (SMC) sponsored an Innovation Program which grant
cash rewards to all SMC employees who submit to the corporation ideas and suggestions
found to beneficial to the corporation.

Private Respondent Rustico Vega, who is a mechanic in the Bottling Department of the
SMC submitted an innovation proposal which supposed to eliminate certain defects in the
quality and taste of the product San Miguel Beer Grande.

Petitioner Corporation did not accept the said proposal and refused Mr. Vegas subsequent
demands for cash award under the innovation program. Hence, Vega filed a complaint with
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the then Ministry of Labor and Employment in Cebu. He argued that his proposal had been
accepted by the methods analyst and was implemented by the SMC and it finally solved the
problem of the Corporation in the production of Beer Grande.

Petitioner denied of having approved Vegas proposal. It stated that said proposal was
turned down for lack of originality and the same, even if implemented, could not achieve
the desire result. Further, petitioner Corporation alleged that the Labor Arbiter had no
jurisdiction.

The Labor Arbiter dismissed the complaint for lack of jurisdiction because the claim of
Vega is not a necessary incident of his employment and does not fall under Article 217 of
the Labor Code. However, in a gesture of compassion and to show the governments concern
for the working man, the Labor Arbiter ordered petitioner to pay Vega P2,000 as financial
assistance. Both parties assailed said decision of the Labor Arbiter. The NLRC set aside the
decision of the Labor Arbiter and ordered SMC to pay complainant the amount of P60,000

Issue: Whether the Labor Arbiter and the Commission has jurisdiction over the money claim
filed by private respondent
HELD: NO
The Labor Arbiter and the Commission has no jurisdiction over the money claim of Vega.
The court ruled that the money claim of private respondent Vega arose out of or in connection
with his employment with petitioner. However, it is not enough to bring Vegas money claim
within the original and exclusive jurisdiction of Labor Arbiters.
In the CAB, the undertaking of petitioner SMC to grant cash awards to employees could ripen
into an enforceable contractual obligation on the part of petitioner SMC under certain
circumstances. Hence, the issue whether an enforceable contract had arisen between SMC and
Vega, and whether it has been breached, are legal questions that labor legislations cannot
resolved because its recourse is the law on contracts.
Where the claim is to be resolved not by reference to the Labor Code or other labor relations
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statute or a collective bargaining agreement BUT by the general civil law, the jurisdiction over
the dispute belongs to the regular courts of justice and not to the Labor Arbiter and NLRC.
WHEREFORE, PETITION IS GRANTED
LVN PICTURES, INC. vs. PHILIPPINE MUSICIANS Guild (FFW)
FACTS: Respondent Philippine Musicians Guild (FFW) is a duly registered legitimate labor
organization. LVN Pictures, Inc., Sampaguita Pictures, Inc., and Premiere Productions, Inc. are
corporations, duly organized under the Philippine laws, engaged in the making of motion pictures and in
the processing and distribution thereof. Petitioner companies employ musicians for the purpose
of making music recordings for title music, background music, musical numbers, finale music
and other incidental music, without which a motion picture is incomplete. Ninety-five(95%)
percent of all the musicians playing for the musical recordings of said companies are members of
the Guild. The Guild has no knowledge of the existence of any other legitimate labor
organization representing musicians in said companies. Premised upon these allegations, the
Guild prayed that it be certified as the sole and exclusive bargaining agency for all musicians
working in the aforementioned companies. In their respective answers, the latter denied that they
have any musicians as employees, and alleged that the musical numbers in the filing of the companies are
furnished by independent contractors. The lower court sustained the Guilds theory. Are consideration of the
order complained of having been denied by the Court enbanc, LVN Pictures, inc., and
Sampaguita Pictures, Inc., filed these petitions for review for certiorari.
ISSUE: Whether the musicians in question (Guild members) are employees of thepetitioner
film companies.
RULING: YES The Court agreed with the lower courts decision, to wit: Lower court resorted to
apply R.A. 875 and US Laws and jurisprudence from which said Act was patterned after. (Since statutes
are to be construed in the light of purposes achieved and the evils sought to be remedied). It
ruled that the work of the musical director and musicians is a functional and integral part of the enterprise
performed at the same studio substantially under the direction and control of the company. In
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other words, to determine whether a person who performs work for another is the latter's
employee or an independent contractor, the National Labor Relations relies on 'the right to
control' test . Under this test an employer-employee relationship exist where the person for
whom the services are performed reserves the right to control not only the end to be achieved,
but also the manner and means to be used in reaching the end. (United InsuranceCompany, 108,
NLRB No. 115.).Notwithstanding that the employees are called independent contractors', the
Board will hold them to be employees under the Act where the extent of the employer's control
over them indicates that the relationship is in reality one of employment.(John Hancock
Insurance Co., 2375-D, 1940, Teller, Labor Dispute Collective Bargaining, Vol.). The right of
control of the film company over the musicians is shown (1) by calling the musicians through
'call slips' in 'the name of the company; (2) by arranging schedules in its studio for recording sessions;
(3) by furnishing transportation and meals to musicians; and(4) by supervising and directing in detail,
through the motion picture director, the performance of the musicians before the camera, in order
to suit the music they are playing to the picture which is being flashed on the screen. The
musical directors have no such control over the musicians involved in the present case. Said
musical directors control neither the music to be played, nor the musicians playing it. The
Premier Production did not appeal the decision of the Court en banc (thats why its not one of
the petitioners in the case) film companies summon the musicians to work, through the musical
directors. The film companies, through the musical directors, fix the date, the time and the place
of work. The film companies, not the musical directors, provide the transportation to and from
the studio. The film companies furnish meal at dinner time. It is well settled that "an employeremployee relationship exists. Where the person for whom the services are performed reserves a
right to control not only the end to be achieved but also the means to be used in reaching such
end . . . ." The decisive nature of said control over the "means to be used", is illustrated in the case
of Gilchrist Timber Co., et al., in which, by reason of said control, the employer-employee
relationship was held to exist between the management and the workers, notwithstanding the
intervention of an alleged independent contractor, who had, and exercise, the power to hire and
fire said workers. The aforementioned control over the means to be used" in reading the desired
end is possessed and exercised by the film companies over the musicians in the cases before us.

WHEREFORE, the order appealed from is hereby affirmed, with costs against petitioners herein. It
is so ordered
Dy vs. National Labor Relations CommissionNo. L-68544. October 27, 1986Narvasa, J.
Doctrine:
It is the Securities and Exchange Commission (SEC) and not the National Labor Relations
Commission (NLRC) that has jurisdiction over a dispute involving the termination of a bank
manager as a result of his non-re-election, thereto, as prescribed in the Banks by
-laws. It is no hindrance to SEC jurisdiction that a person raises in his complaint the issues that
he was illegally dismissed and asks for remuneration where complainant is not a mere employee
but a stockholder and officer of the corporation.
FACTS:
Petitioners Lorenzo C. Dy, Zosimo Dy, Sr., William Ibero, Ricardo Garcia and Rural Bank
of Ayungon, Inc. assail in this Court the resolution of public respondent NLRC dismissing their
appeal from the decision of the Executive Labor Arbiter in Cebu City which found private
respondent Carlito H.Vailoces to have been illegally dismissed by them. Private respondent
Vailoces was the manager of the Rural Bank of Ayungon (Negros Oriental), a banking institution
duly organized under Philippine laws. He was also a director and stockholder of the bank.
On June 4, 1983, a special stockholders meeting was called for the purpose of electing the
members of the banks Board of Directors. Immediately after the election, the new Board
proceeded to elect the banks executive officers.
Pursuant to Article 4 of the banks by
-laws, providing for the election by the entire membership of the Board of the executive officers
of the bank, i.e., the president, vice president, secretary, cashier and bank manager, in that board
meeting of June 4, 1983, petitioners Lorenzo Dy, William Ibero and Ricardo Garcia were elected
president, vice president, and corporate secretary, respectively. Private respondent Vailoces was
not re-elected as bank manager. Because of this, the Board passed a Resolution relieving him as
bank manager. Subsequently, Vailoces filed a complaint for illegal dismissal and damages with
the Ministry of Labor and Employment against herein petitioners, asserting that an illegal
stockholders meeting was held. In their answer, petitioners denied the charge of illegal
dismissal. The Executive Labor Arbiter found that Vailoces was illegally dismissed due to the
resentment of petitioners against Vailoces and consequently ordered the individual petitioners
Lorenzo Dy and Zosimo Dy, Sr. to pay Vailoces jointly and severally the sum of P111,480.60 and
reinstate the latter to his position as bank manager, with additional backwages. Petitioner
Lorenzo Dy appealed to the NLRC, assigning error to the decision of the Labor Arbiter,
one being that the matter of Vailoces relief was within the adjudicatory powers of the Securities
and Exchange Commission. The NLRC bypassed the issues and dismissed the appeal for having
9

been filed late. Hence, this petition.

ISSUE:
Whether or not the SEC, and not respondent NLRC, has jurisdiction over the dispute.
RULING:
YES. While the comment of Vailoces traverses the averments of the petition that of the Solicitor
General on behalf of public respondents perceives the matter as an intra-corporate controversy of
the class described in Section 5, par. (c) of Presidential Decree No. 902-A, namely:
Original and exclusive jurisdiction to hear and decide cases involving:
XxxxXxxx
(c) Controversies in the election or appointments of directors, trustees, officers or
managers of such corporations, partnerships or associations.explicitly declared to be within the
original jurisdiction of the SEC, and recommends that the questionedresolution of the NLRC as
well as the decision of the Labor Arbiter be set aside as null and void. The judgment of the Labor
Arbiter and the resolution of the NLRC are void for lack of jurisdiction. It is of no moment that
Vailoces, in his amended complaint, seeks other relief which would seemingly fall under the
jurisdiction of the Labor Arbiter, because underpayment of salary and non-payment of living
allowance show that they are actually part of the perquisites of his elective position, hence,
intimately linked with his relations with the corporation. The question of remuneration involving
a person who is not a mere employee but a stockholder and officer of a corporation is not a
simple labor problem but a matter that comes within the area of corporate affairs and
management, and is in fact a corporate controversy in contemplation of the Corporate Code.
Wherefore, the questioned decision of the Labor Arbiter and the Resolution of the NLRC
dismissing petitioners appeal are hereby set aside for being rendered without jurisdiction.

Sonza v. ABS-CBN
GR.no. 138051 June 10, 2004
Carpio,J.:
Facts: ABS-CBN and Sonza signed an agreement, Sonza being the representative of MJMDC as
talent for radio and television. They were paid agreed talent fees. Later, Sonza resigned and
ABS- CBN called for the rescission of the contract. In this contract, Sonza renounced the
recovery of the benefits. But Sonza filed a complaint thereafter for non- payment of his salaries
and other benefits. Respondent cintended that there was no benefits as there are no employeremployee relationship to speak with. The Labor Arbiter denied Sonzas motion and and was
seconded
by
the
Court
of
Appeals.

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Issue: Whether or not Sonza is entitled to the benefits he is asking.

Ruling: No. The entitlement of benefits is a question relating to employer- employee
relationship. In this case, Petitioner failed to prove its existence.
Sonza is an independent contracto. His unique skills, talent and celebrity status are not
possessed by ordinary employees. He is not bound by the ABS-CBNs control in the conduct of
his work. He is paid talent fees and not wages for ordinary employees. Whatever benefits that the
omplainant enjoyed roe from specific agreements of the parties and not by any reason of
employer- employee relationship.

ALFREDO F. PRIMERO, petitioner, vs. INTERMEDIATE APPELLATE COURT and DM

TRANSIT, respondents.
G.R. No. 72644 December 14, 1987
NARVASA, J.:
Facts: Petitioner Primero was discharged, for no reason or cause was given, from his employment as
bus driver of DM Transit Corporation (DM) after having been employed therein for over 6 years. For 23
days, he was given a run-around from one management official to another, pleading that he be allowed
to work as his family was in dire need of money and at the same time inquiring (why) he was not
allowed to work or drive a bus of the company however got negative results and given cold treatment.
He was advised by Munoz, Jr., Corporate President, that he will be given financial assistance only when
he will sue them in court and lose. He was advised to seek employment with other bus firms. DM, in
bad faith and with malice, persuaded other firms (California Transit, Pascual Lines, De Dios Transit,
Negrita Corporation, and MD Transit) not to employ Primero in any capacity after he was already
unjustly dismissed by said defendant. Primero instituted proceedings against DM with the Labor
Arbiters of the Department of Labor for illegal dismissal. Labor Arbiter rendered judgment ordering
DM to pay complainant separation. The judgment was affirmed by the National Labor Relations
Commission and later by the Secretary of Labor. Three months afterwards, Primero brought suit
against DM in the Court of First Instance of Rizal seeking recovery of damages caused not only by the
breach of his employment contract, but also by the oppressive and inhuman, and consequently tortious,
acts of his employer and its officers antecedent and subsequent to his dismissal from employment
without just cause. Trial Court dismissed the complaint on the ground of lack of jurisdiction, for the
reason that at the time that the complaint was filed on August 17, 1978, the law the Labor Code as
amended by PD 1367, eff. May 1, 1978 conferred exclusive, original jurisdiction over claims for moral
or other damages, not on ordinary courts, but on Labor Arbiters. IAC affirmed said decision, hence this
petition. The decision was reached by a vote of 3 to 2. According to the dissenters, existence of
employment relations was not alone decisive of the issue of jurisdiction, and that such relations may
indeed give rise to "civil" as distinguished from purely labor disputes, as where an employer's right to
dismiss his employee is exercised tortiously, in a manner oppressive to labor, contrary to morals, good
11

customs or public policy. Primero has appealed to us from this judgment of the IAC praying that we
overturn the majority view and sustain the dissent.
Issue: Whether Labor Arbiters have jurisdiction over claims for damages?
Ruling: The legislative intent appears clear to allow recovery in proceedings before Labor Arbiters of
moral and other forms of damages, in all cases or matters arising from employer-employee relations.
This would no doubt include, particularly, instances where an employee has been unlawfully
dismissed. In such a case the Labor Arbiter has jurisdiction to award to the dismissed employee not
only the reliefs specifically provided by labor laws, but also moral and other forms of damages
governed by the Civil Code. Moral damages would be recoverable, for example, where the dismissal of
the employee was not only effected without authorized cause and/or due process for which relief is
granted by the Labor Code but was attended by bad faith or fraud, or constituted an act oppressive
to labor, or was done in a manner contrary to morals, good customs or public policy for which the
obtainable relief is determined by the Civil Code (not the Labor Code).

ANDREW JAMES MCBURNIE V. EULALIO GANZON, EGI-MANAGERS, INC. and

E. GANZON, INC.
G.R. Nos. 178034 & 178117 G R. Nos. 186984-85 October 17, 2013
Ponente. REYES, J
Facts: McBurnie, an Australian national, signed a five-year employment agreement5 with the
company EGI as an Executive Vice-President who shall oversee the management of the
companys hotels and resorts within the Philippines. When he figured in an accident that
compelled him to go back to Australia while recuperating from his injuries. While in Australia,
he was informed by respondent Ganzon that his services were no longer needed because their
intended project would no longer push through. He instituted a complaint for illegal dismissal
and other monetary claims against the respondents. The respondents opposed and contended
that their agreement was to jointly invest in and establish a company for the management of
hotels. They did not intend to create an employer-employee relationship, and the execution of
the employment contract that was being invoked by McBurnie was solely for the purpose of
allowing McBurnie to obtain an alien work permit in the Philippines. The LA declared McBurnie
as having been illegally dismissed from employment. The respondents appealed the LAs
Decision to the NLRC. They filed Motion to Reduce Bond, and posted an appeal bond in the
amount of P100,000.00 and contended that the monetary awards of the LA were null and
excessive, allegedly with the intention of rendering them incapable of posting the necessary
appeal bond considering petitioner is a single foreigner who had no work permit and who left
the country for good one month after the purported commencement of his employment" was a
patent nullity and respondents lacked the capacity to pay the bond of almost P60 Million due to
business losses. The said motion was denied as well as their motion for reconsideration. Petition
for certiorari was filed and CA ruled that the NLRC committed grave abuse of discretion in
immediately denying the motion without fixing an appeal bond in an amount that was
reasonable, as it denied the respondents of their right to appeal from the decision of the LA.29
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The CA explained that "(w)hile Art. 223 of the Labor Code requiring bond equivalent to the
monetary award is explicit, Section 6, Rule VI of the NLRC Rules of Procedure, as amended,
recognized as exception a motion to reduce bond upon meritorious grounds and upon posting of
a bond in a reasonable amount in relation to the monetary award.
Issue: Whether NLRC erred in denying the motion to reduce appeal bond by respondents?
Ruling: The posting of a bond is indispensable to the perfection of an appeal in cases involving
monetary awards from the decision of the Labor Arbiter. The word "only" in Section 6, Rule VI
of the 2011 NLRC Rules of Procedure makes it clear that the posting of a cash or surety bond by
the employer is the essential and exclusive means by which an employers appeal may be
perfected.
The prevailing jurisprudence on the matter provides that the filing of a motion to reduce bond,
coupled with compliance with the two conditions emphasized in Garcia v. KJ Commercial for
the grant of such motion, namely, (1) a meritorious ground, and (2) posting of a bond in a
reasonable amount, shall suffice to suspend the running of the period to perfect an appeal from
the labor arbiters decision to the NLRC. To require the full amount of the bond within the 10day reglementary period would only render nugatory the legal provisions which allow an
appellant to seek a reduction of the bond.
Jurisprudence tells us that in labor cases, an appeal from a decision involving a monetary award
may be perfected only upon the posting of cash or surety bond. The Court, however, has relaxed
this requirement under certain exceptional circumstances in order to resolve controversies on
their merits. These circumstances include: (1) fundamental consideration of substantial justice;
(2) prevention of miscarriage of justice or of unjust enrichment; and (3) special circumstances of
the case combined with its legal merits, and the amount and the issue involved.
Furthermore, on the matter of the filing and acceptance of motions to reduce appeal bond, as
provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the Court hereby
RESOLVES that henceforth, the following guidelines shall be observed:
(a) The filing o a motion to reduce appeal bond shall be entertained by the NLRC subject to the
following conditions: (1) there is meritorious ground; and (2) a bond in a reasonable amount is
posted;
(b) For purposes o compliance with condition no. (2), a motion shall be accompanied by the
posting o a provisional cash or surety bond equivalent to ten percent (10,) of the monetary
award subject o the appeal, exclusive o damages and attorney's fees;
(c) Compliance with the foregoing conditions shall suffice to suspend the running o the 1 0-day
reglementary period to perfect an appeal from the labor arbiter's decision to the NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine
the final amount o bond that shall be posted by the appellant, still in accordance with the
standards o meritorious grounds and reasonable amount; and
(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that
exceeds the amount o the provisional bond, the appellant shall be given a fresh period o ten 1 0)
13

days from notice o the NLRC order within which to perfect the appeal by posting the required
appeal bond.
The Court ruled that conditions for the reduction of an appeal bond were duly satisfied by the
respondents.

St. Martin Funeral vs. NLRC

G.R. 130866
September 16, 1998
Regalado, J.:

295 SCRA 494

FACTS:
Respondent Aricayos filed a complaint for illegal dismissal to the labor arbiter. There
being no employer-employee relationship between the two, petition was dismissed for lack of
jurisdiction. Arcayos appealed to NLRC cotending errors of the labor arbiter.
ISSUE:
Whether or not the Supreme Court has jurisdiction over NLRC appeals?
RULING:
First established in 1972, decisions of NLRC were declared to be appealable to the
Secretary of labor and, ultimately to the President. But under the present state law, there is no
provision for appeals from NLRC decisions. The court held that there is an underlying power of
the courts to scrutinize the acts of such agencies on questions of law and jurisdiction even though
not right of review is given by statute, that the purpose of jurisdiction review is to keep the
administrative agency within its jurisdiction and protect the substantial rights of the parties; and
that is part of the checks and balances which restricts the separation of powers and forestalls
arbitrary and unjust jurisdictions.
Subsequently under RA 7902, effective March 1995, the mode for judicial review over
NLRC decisions in that of a petition for Certiorari under Rule 65. The same confuses by
declaring that the CA has no appellate jurisdiction over decisions falling within the appellate
jurisdiction of SC, including the NLRC decisions.
Therefore, all references in the amended Section 9 of BP 129 to supposed appeals from
NLRC to SC are interpreted and hereby declared to mean and refer to petitions for certiorari
under Rule 65. All such petitions should henceforth be initially filed in the doctrine on the
hierarchy of courts as appropriate forum for the relief desired.
Case remanded to CA.

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VIRGILIO AGABON, et al. v. NLRC

FACTS
Virgilio and Jenny Agabon worked for respondent Riviera Home Improvements, Inc. as gypsum and cornice
installers from January 1992 until Feb 1999. Their employment was terminated when they were dismissed for
allegedly abandoning their work. Petitioners Agabon then filed a case of illegal dismissal.
The LAruled in favor of the spouses and ordered Riviera to pay them their money claims. The NLRC reversed
the LA, finding that the Agabons were indeed guilty of abandonment. The CA modified the LA by ruling that
there was abandonment but ordering Riviera to pay the Agabons money claims.The arguments of both parties
are as follows:
The Agabons claim, among others that Riviera violated the requirements of notice and hearing when the
latter did not send written letters of termination to their addresses. Riviera admitted to not sending the Agabons
letters of termination to their last known addresses because the same would be futile, as the Agabons do not reside
there anymore. However, it also claims that the Agabons abandoned their work. More than once, they
subcontracted installation works for other companies. They already were warned of termination if the same act
was repeated, still, they disregarded the warning.
ISSUES
1.Whether the Agabons were illegally dismissed
2.Whether Riviera violated the requirements of notice and hearing
3.Is the violation of the procedural requirements of notice and hearing for termination of employees a violation of
the Constitutional due process?
4.What are the consequences of violating the procedural requirements of termination?
RULING: Valid dismissal but violation of statutory due process = payment of nominal
damages (P30,000) & balance of 13thmonth pay, etc.
1. No. There was just cause for their dismissal, i.e., abandonment. Art. 282specifies the grounds for just
dismissal, to wit:

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A. Serious misconduct or willful disobedience of the lawful orders of the employer or his duly
authorized representative in connection with the employees work
B. Gross and habitual neglect of the by the employee of his duties ( includes abandonment)
C. Fraud or willful breach of the trust reposed by the employer or hisduly authorized representative to the
employed.
Commission of a crime or offense by the employee against the person of the employer or any member of his
immediate family or his duly authorized representative.
Any other causes analogous to the foregoing. To establish abandonment, two elements must be present:
a. The unjustified failure of the employee to report for work
b.A clear intention to sever e-e relationship, manifested by overt acts. Here, the Agabons were frequently absent
from work for having performed installation work for another company, despite prior warning given by Riviera.
This clearly establishes an intention to sever the relationship between them, and which constitutes abandonment.
2.Yes. While the employer has the right to expect good performance, diligence, good conduct and loyalty from its
employees, it also has the duty to provide just compensation to his employees and to observe the procedural
requirements of notice and hearing in the termination of his employees. Procedure of
termination
(Omnibus Rules Implementing the LaborCode):
a. A written notice to the employee specifying the grounds for termination and giving the employee
reasonable opportunity to be heard
b. A hearing where the employee is given the opportunity to respond to the charges against him and present
evidence or rebut the evidence presented against him (if he so requests)
c. A written notice of termination indicating that grounds have been established to justify his termination
upon due consideration of all circumstances. In this case, Riviera failed to notify the Agabons of their
termination to their last known addresses. Hence, they violated the procedural requirement laid down by
the law in the termination of employees.

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3. Constitutional due process is that provided under the Constitution, which involves the protection of the
individual against governmental oppression and the assurance of his rights In civil, criminal and administrative
proceedings; statutory due process is that found in the Labor Code and its Implementing Rules and protects
the individual from being unjustly terminated without just or authorized cause after notice and hearing. The two
are
Similar in that they both have two aspects: substantive due process and procedural due process
. However, they differ in that under the Labor Code, the first one refers to the valid and authorized causes
of employment termination, while the second one refers to the manner of dismissal. A denial of statutory due
process is not the same as a denial of Constitutional due process for reasons enunciated in Serrano v. NLRC.
4. The dismissal is valid, but Riviera should pay nominal damages to the Agabons in vindication of the latter for
violating their right to notice and hearing. The penalty is in the nature of a penalty or indemnification, the amount
dependent on the facts of each case, including the nature of gravity of offense of the employer. In this case, the
Serrano doctrine was re-examined. First, in the Serrano case, the dismissal was upheld, but it was held
to be ineffectual (without legal effect). Hence, Serrano was still entitled to the payment of his backwages from the
time of dismissal until the promulgation of the court of the existence of an authorized cause. Further, he was
entitled to his separation pay as mandated under Art.283. The ruling is unfair to employers and has the danger of
the following consequences:
a.The encouragement of filing frivolous suits even by notorious employees who were justly dismissed but were
deprived of statutory due process; they are rewarded by invoking due process
b.It would create absurd situations where there is just or authorized cause but a procedural infirmity invalidates the
termination, ie an employee who became a criminal and threatened his co-workerslives, who fled and could not
be found.
c.It could discourage investments that would generate employment in the economy. Second, the payment of
backwages is unjustified as only illegal termination gives the employee the right to be paid full backwages. When
the dismissal is valid or upheld, the employee has no right to backwages.

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