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Acua vs CA (2006) G.R.

Petitioners are Filipino overseas workers deployed by private respondent Join
International Corporation (JIC), a licensed recruitment agency, to its principal, 3D
Pre-Color Plastic, Inc., (3D) in Taiwan, Republic of China, under a uniformly-worded
employment contract for a period of two years. Private respondent Elizabeth Alaon
is the president of Join International Corporation.

Sometime in September 1999, petitioners filed with private respondents

applications for employment abroad. After their papers were processed, petitioners
claimed they signed a uniformly-worded employment contract with private
respondents which stipulated that they were to work as machine operators with a
monthly salary of NT$15,840.00, exclusive of overtime, for a period of two years.

On December 9, 1999, they left for Taiwan. Upon arriving at the job site, a factory
owned by 3D, they were made to sign another contract which stated that their
salary was only NT$11,840.00. They were informed that the dormitory which would
serve as their living quarters was still under construction. They were requested to
temporarily bear with the inconvenience but were assured that their dormitory
would be completed in a short time. Petitioners alleged that they were brought to a
"small room with a cement floor so dirty and smelling with foul odor". Forty women
were jampacked in the room and each person was given a pillow. Since the ladies'
comfort room was out of order, they had to ask permission to use the men's comfort
room. Petitioners claim they were made to work twelve hours a day, from 8:00 p.m.
to 8:00 a.m.

On December 16, 1999, due to unbearable working conditions, they were

constrained to inform management that they were leaving. They booked a flight
home, at their own expense. Before they left, they were made to sign a written
waiver. In addition, petitioners were not paid any salary for work rendered on
December 11-15, 1999. Immediately upon arrival in the Philippines, petitioners went
to private respondents' office, narrated what happened, and demanded the return
of their placement fees and plane fare. Private respondents refused.

On December 28, 1999, private respondents offered a settlement. Petitioner

Mendez received P15,080. The next day, petitioners Acua and Ramones went back
and received P13,640 10 and P16,200, respectively. They claim they signed a
waiver, otherwise they would not be refunded.

On January 14, 2000, petitioners Acua and Mendez invoking Republic Act No. 8042
filed a complaint for illegal dismissal and non-payment/underpayment of salaries or
wages, overtime pay, refund of transportation fare, payment of salaries/wages for 3
months, moral and exemplary damages, and refund of placement fee before the
National Labor Relations Commission (NLRC).

Issue: Whether or not petitioners were illegally dismissed under Rep. Act No. 8042,
thus entitling them to benefits plus damages.

Held: No illegal dismissal. Constructive dismissal covers the involuntary resignation

resorted to when continued employment becomes impossible, unreasonable or
unlikely; when there is a demotion in rank or a diminution in pay; or when a clear
discrimination, insensibility or disdain by an employer becomes unbearable to an
employee. Court found that petitioners did not deny that the accommodations were
not as homely as expected. Petitioners' admitted that they were told by the
principal, upon their arrival, that the dormitory was still under construction and were
requested to bear with the temporary inconvenience and the dormitory would soon
be finished. Petitioners did not refute private respondents' assertion that they had
deployed approximately sixty other workers to their principal, and to the best of
their knowledge, no other worker assigned to the same principal has resigned,
much less, filed a case for illegal dismissal. These cited circumstances do not reflect
malice by private respondents nor do they show the principal's intention to subject
petitioners to unhealthy accommodations. Under these facts, we cannot rule that
there was constructive dismissal.
Overtime pay is granted despite petitioners lack of proof that they actually rendered
overtime work, since their employment records were in the custody of the principal
employer. It is a time-honored rule that in controversies between a worker and his
employer, doubts reasonably arising from the evidence, or in the interpretation of
agreements and writing should be resolved in the worker's favor. private
respondents are solidarily liable with the foreign principal for the overtime pay
claims of petitioners.

On the award of moral and exemplary damages, we hold that such award lacks legal
basis. Moral and exemplary damages are recoverable only where the dismissal of an
employee was attended by bad faith or fraud, or constituted an act oppressive to
labor, or was done in a manner contrary to morals, good customs or public policy.
The person claiming moral damages must prove the existence of bad faith by clear
and convincing evidence, for the law always presumes good faith. Petitioners failed
to prove bad faith, fraud or ill motive on the part of private respondents. Moral
damages cannot be awarded.

Without the award of moral damages, there can be no award of exemplary

damages, nor attorney's fees.

Quitclaims are valid. Quitclaims executed by the employees are commonly frowned
upon as contrary to public policy and ineffective to bar claims for the full measure of
the workers' legal rights, considering the economic disadvantage of the employee
and the inevitable pressure upon him by financial necessity. Nonetheless, the socalled "economic difficulties and financial crises" allegedly confronting the
employee is not an acceptable ground to annul the compromise agreement unless it
is accompanied by a gross disparity between the actual claim and the amount of
the settlement.

Records reveal that petitioners were not in any way deceived, coerced or
intimidated into signing a quitclaim waiver in the amounts of P13,640, P15,080 and
P16,200 respectively. Nor was there a disparity between the amount of the
quitclaim and the amount actually due the petitioners. After conversion to Philippine
pesos, the amount of the quitclaim paid to petitioners was actually higher than the
amount due them.

WHEREFORE, the petition is DISMISSED, without prejudice to the filing of illegal

recruitment complaint against the respondents pursuant to Section 6(i) of The
Migrant Workers and Overseas Filipino Act of 1995 (Rep. Act No. 8042).
G & M Philippines, Inc., vs. Romil V. Cuambot
CASE DIGEST: G.R. No. 162308 November 22, 2006

Illegal Dismissal, Labor Law, Overseas Employment


Respondent Romil V. Cuambot was deployed to Saudi Arabia as a car body builder
with petitioner G & M Philippines, Inc., a duly licensed placement and recruitment
agency. On a two-year employment contract, he worked with the Al Waha Workshop.
However, respondent did not finish his contract and returned to the Philippines
barely six months later. Upon returning, he immediately filed before the NLRC a
complaint for unpaid wages, withheld salaries, refund of plane ticket and
repatriation bond, which was later amended to include illegal dismissal, claim for
the unexpired portion of his employment contract, actual, exemplary and moral
damages, and attorneys fees.

Respondent Cuambot alleged that at the Al Waha Workshop where he worked, he

was subjected to inhumane and unbearable working conditions. Except for a meal
allowance of 100 Riyals a month, he was not paid his monthly salary of 1,200 Riyals.
And he was required to render six (6) hours of overtime work daily, except Friday,
without overtime pay; he was also seriously insulted by his employer every time he
demanded for his salary, and some of the letters sent to him by his family were
withheld by his employer.

He thus filed a petition for payment of the unpaid salaries including interests, until
the same will be fully paid.

Petitioner G & M insisted that respondent was religiously paid his salaries as they
fell due. After working for a little over seven months, respondent pleaded with his
employer to be allowed to return home since there were family problems he had to
settle personally. Respondent even submitted a resignation letter. To support such
claim, petitioner submitted in evidence copies of seven payslips duly authenticated
by the Philippine Labor Attach in Riyadh, Saudi Arabia.

Respondent countered that his signatures in the purported payslips were forged. He
also stated that he was never given a copy of the contract of employment. To
counter the allegation of forgery, petitioner claimed that there was a great
possibility that respondent had changed his signature while abroad so that he could

file a complaint for illegal dismissal upon his return. The argument that the stroke
and handwriting on the payslips was written by one and the same person is mere
conjecture, as respondent could have requested someone, to prepare the
resignation letter for him. Petitioner further pointed out that respondent has
different signatures, not only in the pleadings submitted before the Labor Arbiter,
but also in respondents personal documents.

On January 30, 1997, the Labor Arbiter ruled in favor of respondent Cuambot,
finding unreliable the G & M's evidence of Cuambot's alleged signature in the
payslips which was similar to the handwritings in the payslips and the handwritings
in the purported resignation letter of the Cuambot. In an appeal to the NLRC, the
latter remanded the case to its origin for referral to a government agency that can
conduct calligraphy examination on the questioned documents.

The case was then re-raffled to another Labor Arbiter, and this time, the complaint
was dismissed for lack of merit. The new Labor Arbiter said the respondent failed to
substantiate his claim of poor working conditions and long hours of employment.
The fact that he executed a handwritten resignation letter was enough evidence of
the fact that he voluntarily resigned from work. Respondent also failed to submit
any evidence to refute the payslips duly signed and authenticated by the labor
attach in Saudi Arabia, inasmuch as their probative value cannot be impugned by
mere self-serving allegations. The Labor Arbiter concluded that as between the oral
allegations of workers that they were not paid monetary benefits and the
documentary evidence presented by employer, the latter should prevail.

Respondent appealed the decision to the NLRC, alleging that the Labor Arbiter failed
to consider the genuineness of the signature which appears in the purported
resignation as well as those that appeared in the seven payslips. He insisted that
these documents should have been endorsed to the National Bureau of
Investigation Questioned Documents Division or the Philippine National Police Crime
Laboratory for calligraphy examination.

The NLRC dismissed the appeal for lack of merit. It held that the questioned
documents could not be endorsed to the agency concerned since mere photocopies
had been submitted in evidence. It also stressed that the parties had earlier agreed
to submit the case for resolution on the basis of the pleadings and the evidence on
record; that if respondent had wanted to have the documents endorsed to the NBI
or the PNP, he should have insisted that the documents be examined by a

handwriting expert of the government. Thus, respondent was estopped from

assailing the Labor Arbiters ruling.

On a petition for certiorari before the CA, the latter reversed the ruling of the NLRC.
According to the appellate court, among others, a visual examination of the
questioned signatures would instantly reveal significant differences in the


Whether or not the employee voluntarily resigned from employment or was illegally


We find in respondents favor. That the petitioner failed to submit the original copies
of the payslips and the resignation letter raises doubts as to the veracity of its claim
that they were actually signed by the respondent.

As correctly noted by the CA, the opinions of handwriting experts, although helpful
in the examination of forged documents because of the technical procedure
involved in the analysis, are not binding upon the courts. A finding of forgery does
not depend entirely on the testimonies of handwriting experts, because the judge
must conduct an independent examination of the questioned signature in order to
arrive at a reasonable conclusion as to its authenticity. No less than Section 22, Rule
132 of the Rules of Court explicitly authorizes the court, by itself, to make a
comparison of the disputed handwriting with writings admitted or treated as
genuine by the party against whom the evidence is offered or proved to be genuine
to the satisfaction of the judge.

Even a cursory perusal of the resignation letter and the handwritten pay slips will
readily show that they were written by only one person.

Indeed, the rule is that all doubts in the implementation and the interpretation of
the Labor Code shall be resolved in favor of labor, in order to give effect to the
policy of the State to afford protection to labor, promote full employment, ensure
equal work opportunities regardless of sex, race or creed, and regulate the relations
between workers and employers, and to assure the rights of workers to selforganization, collective bargaining, security of tenure, and just and humane
conditions of work.

The Petition is DENIED for lack of merit. The Decision of the Court of Appeals is
Uy vs. Centro Ceramica Corporation digest (LABOR)

Petitioner Jhorizaldy Uy was hired by respondent Centro Ceramica Corporation as

full-time sales executive under probationary employment for 6 months. Uy alleged
that on February 19, 2002 after their weekly sales meeting, he was informed by his
superior, Sales Supervisor Richard Agcaoili, that he was to assume a new position in
the marketing department, to which he replied that he will think it over. That same
day, he was summoned by Sy and Garcia for a closed-door meeting during which Sy
informed him of the termination of his services due to insubordination and
advised him to turn over his samples and files immediately. Petitioner further
narrated that on February 22, 2002, he turned over company samples, accounts
and receivables to Agcaoili. Thereafter, he did not report for work anymore.
Thereafter, Uy received a memo from respondent company stating his failure to
meet the quota for sales executive. With this, petitioner filed a complaint for illegal
dismissal against the respondent company. Labor Arbiter Salinas dismissed
petitioners complaint on the basis of his finding that it was petitioner who opted not
to report for work. Petitioner appealed to the NLRC which reversed the Labor
Arbiters ruling. Respondents elevated the case to the CA which reversed the NLRC
and dismissed petitioners complaint. Hence, this instant petition.


Whether or not petitioner was dismissed by the respondents or voluntarily severed

his employment by abandoning his job.


Petitioner Uy was dismissed by the respondent company. In this case, the evidence
on record suggests that petitioner did not resign; he was orally dismissed by Sy. It is
this lack of clear, valid and legal cause, not to mention due process, that made his
dismissal illegal, warranting reinstatement and the award of backwages. Moreover,
the filing of a complaint for illegal dismissal just three weeks later is difficult to
reconcile with voluntary resignation. Had petitioner intended to voluntarily
relinquish his employment after being unceremoniously dismissed by no less than
the company president, he would not have sought redress from the NLRC and
vigorously pursued this case against the respondents. When there is no showing of
a clear, valid and legal cause for the termination of employment, the law considers
it a case of illegal dismissal. Furthermore, Article 4 of the Labor Code expresses the
basic principle that all doubts in the interpretation and implementation of the Labor
Code should be interpreted in favor of the workingman.
. Duncan Assn. of Detailman-PTFWO vs Glaxo Wellcome Phils. G.R. 162994


Petitioner Tecson was hired by respondent Glaxo Wellcome Phils. as medical

representative. Tecson signed a contract of employment, which stipulates among
others, that he agrees to disclose existing or future relationship with co-employees
and employees of competing companies that should such relationship poses a
conflict of interest, to resign from the company. Despite repeated warnings, Tecson
and Bettsy, an employee of a competing company, got married. Glaxo transferred
Tecson to Butuan, but he defied such orders and continued acting as medical
representative in Camarines area. The National Conciliation and Mediation board
rendered as valid the policy and the right to transfer.


Whether or not the policy constitutes a prohibition against marriage.


No. Glaxos policy prohibiting an employee from having a relationship is a valid

exercise of management prerogatives as relationships of that nature might
compromise the interests of the company. Glaxo has a right to guard its trade
secrets, manufacturing formulas, marketing strategies and other confidential
programs and information for competitors. The right to protect its economic
interests is recognized by the constitution which recognizes the right of enterprises
to adopt and enforce such a policy to protect its right to reasonable returns on
investments and for expansion and growth. Indeed, while our laws endeavor to give
life to the constitutional policy on social justice and the protection of labor, it does
not mean that every labor dispute will be decided in favor of the workers. The law
also recognized that management has rights which are also entitled to respect and
enforcement in the interest of fair play. The challenged company policy does not
violate the equal protection clause of the constitution as such clause is addressed
only to the state or those acting under color of its authority. The policy being
questioned is not a policy against marriage. An employee of the company remains
free to marry anyone of his or her choosing. The policy is aimed at restricting a
personal prerogative that belongs only to the individual. However, an employees
personal decision does not detract the employer from exercising management
prerogatives to ensure maximum profit and business success.
Duncan Assoc. of Detailman-PTGWO vs. Glaxo Wellcome Phils., Inc.
438 SCRA 343


Tecson was hired by Glaxo as a medical representative on Oct. 24, 1995. Contract of
employment signed by Tecson stipulates, among others, that he agrees to study
and abide by the existing company rules; to disclose to management any existing
future relationship by consanguinity or affinity with co-employees or employees with
competing drug companies and should management find that such relationship
poses a prossible conflict of interest, to resign from the company. Company's Code
of Employee Conduct provides the same with stipulation that management may
transfer the employee to another department in a non-counterchecking position or
preparation for employment outside of the company after 6 months.

Tecson was initially assigned to market Glaxo's products in the Camarines SurCamarines Norte area and entered into a romantic relationship with Betsy, an
employee of Astra, Glaxo's competition. Before getting married, Tecson's District
Manager reminded him several times of the conflict of interest but marriage took
place in Sept. 1998. In Jan. 1999, Tecson's superiors informed him of conflict of
intrest. Tecson asked for time to comply with the condition (that either he or Betsy
resign from their respective positions). Unable to comply with condition, Glaxo
transferred Tecson to the Butuan-Surigao City-Agusan del Sur sales area. After his
request against transfer was denied, Tecson brought the matter to Glaxo's
Grievance Committee and while pending, he continued to act as medical
representative in the Camarines Sur-Camarines Norte sales area. On Nov. 15, 2000,
the National Conciliation and Mediation Board ruled that Glaxo's policy was valid...


Whether or not the policy of a pharmaceutical company prohibiting its employees

from marrying employees of any competitor company is valid


On Equal Protection

Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing
strategies, and other confidential programs and information from competitors. The
prohibition against pesonal or marital relationships with employees of competitor
companies upon Glaxo's employees is reasonable under the circumstances because
relationships of that nature might compromise the interests of the company. That
Glaxo possesses the right to protect its economic interest cannot be denied.

It is the settled principle that the commands of the equal protection clause are
addressed only to the state or those acting under color of its authority. Corollarily, it
has been held in a long array of US Supreme Court decisions that the equal
protection clause erects to shield against merely privately conduct, however,
discriminatory or wrongful.

The company actually enforced the policy after repeated requests to the employee
to comply with the policy. Indeed the application of the policy was made in an
impartial and even-handed manner, with due regard for the lot of the employee.

On Constructive Dismissal

Constructive dismissal is defined as a quitting, an involuntary resignation resorted

to when continued employment becomes impossible, unreasonable or unlikely;
when there is demotion in rank, or diminution in pay; or when a clear discrimination,
insensibility, or disdain by an employer becomes unbearable to the employee. None
of these conditions are present in the instant case.


The challenged policy has been implemented by Glaxo impartially and

disinterestedly for a long period of time. In the case at bar, the record shows that
Glaxo gave Tecson several chances to eliminate the conflict of interest brought
about by his relationship with Betsy, but he never availed of any of them.


"WHEREFORE, the petition is DENIED for lack of merit."

18. Manila Pavilion Hotel vs. Delada, G.R. No. 189947, January 25, 2012


Delada was the Union President of the Manila Pavilion Supervisors Association at
MPH. He was originally assigned as Head Waiter of Rotisserie, a fine-dining
restaurant operated by petitioner. Pursuant to a supervisory personnel
reorganization program, MPH reassigned him as Head Waiter of Seasons Coffee
Shop, another restaurant operated by petitioner at the same hotel. Respondent
declined the inter-outlet transfer and instead asked for a grievance meeting on the
matter, pursuant to their Collective Bargaining Agreement (CBA). He also requested
his retention as Head Waiter of Rotisserie while the grievance procedure was

MPH replied and told respondent to report to his new assignment for the time being,
without prejudice to the resolution of the grievance involving the transfer. He
adamantly refused to assume his new post at the Seasons Coffee Shop and instead
continued to report to his previous assignment at Rotisserie. Thus, MPH sent him
several memoranda on various dates, requiring him to explain in writing why he
should not be penalized for the following offenses: serious misconduct; willful
disobedience of the lawful orders of the employer; gross insubordination; gross and
habitual neglect of duties; and willful breach of trust. Despite the notices from MPH,
Delada persistently rebuffed orders for him to report to his new assignment.
According to him, since the grievance machinery under their CBA had already been
initiated, his transfer must be held in abeyance. Thus, on 9 May 2007, MPH initiated
administrative proceedings against him.


Whether MPH retained the authority to continue with the administrative case
against Delada for insubordination and willful disobedience of the transfer order.


Accordingly, we rule in this case that MPH did not lose its authority to discipline
respondent for his continued refusal to report to his new assignment. In relation to
this point, we recall our Decision in Allied Banking Corporation v. Court of Appeals.

In Allied Banking Corporation, employer Allied Bank reassigned respondent Galanida

from its Cebu City branch to its Bacolod and Tagbilaran branches. He refused to

follow the transfer order and instead filed a Complaint before the Labor Arbiter for
constructive dismissal. While the case was pending, Allied Bank insisted that he
report to his new assignment. When he continued to refuse, it directed him to
explain in writing why no disciplinary action should be meted out to him. Due to his
continued refusal to report to his new assignment, Allied Bank eventually
terminated his services. When the issue of whether he could validly refuse to obey
the transfer orders was brought before this Court, we ruled thus:

The refusal to obey a valid transfer order constitutes willful disobedience of a lawful
order of an employer. Employees may object to, negotiate and seek redress against
employers for rules or orders that they regard as unjust or illegal. However, until
and unless these rules or orders are declared illegal or improper by competent
authority, the employees ignore or disobey them at their peril. For Galanidas
continued refusal to obey Allied Bank's transfer orders, we hold that the bank
dismissed Galanida for just cause in accordance with Article 282(a) of the Labor
Code. Galanida is thus not entitled to reinstatement or to separation pay. (Emphasis
supplied, citations omitted).

It is important to note what the PVA said on Deladas defiance of the transfer order:

In fact, Delada cannot hide under the legal cloak of the grievance machinery of the
CBA or the voluntary arbitration proceedings to disobey a valid order of transfer
from the management of the hotel. While it is true that Deladas transfer to Seasons
is the subject of the grievance machinery in accordance with the provisions of their
CBA, Delada is expected to comply first with the said lawful directive while awaiting
the results of the decision in the grievance proceedings. This issue falls squarely in
the case of Allied Banking Corporation vs. Court of Appeals x x x.

Pursuant to Allied Banking, unless the order of MPH is rendered invalid, there is a
presumption of the validity of that order. Since the PVA eventually ruled that the
transfer order was a valid exercise of management prerogative, we hereby reverse
the Decision and the Resolution of the CA affirming the Decision of the PVA in this
respect. MPH had the authority to continue with the administrative proceedings for
insubordination and willful disobedience against Delada and to impose on him the
penalty of suspension. As a consequence, petitioner is not liable to pay back wages
and other benefits for the period corresponding to the penalty of 90-day suspension.
Manila Pavilion vs Henry Delada

Delada was the Union President of the Manila Pavilion Supervisors Association at
MPH originally assigned as Head Waiter of Rotisserie then reassigned him as Head
Waiter of Seasons Coffee Shop but respondent declined the inter-outlet transfer and
instead asked for a grievance meeting on the matter, pursuant to their Collective
Bargaining Agreement (CBA). He also requested his retention as Head Waiter of
Rotisserie while the grievance procedure was ongoing. The Mgt. denied the request
and he kept on reporting to Rotisserie.
MPH sent him several memoranda requiring him to explain in writing why he should
not be penalized for the following offenses gross insubordination etc. Delada
persistently rebuffed orders for him to report to his new assignment.
While respondents Complaint is pending MPH citing security and safety reasons,
placed respondent on a 30-day preventive suspension. Thereafter found Delada
guilty imposing the penalty of 90-day suspension.

W/N MP retained the authority to continue with the administrative case against
Delada for insubordination and willful disobedience of the transfer order.

We rule that petitioner Manila Pavilion Hotel had the authority to continue with the
administrative proceedings for insubordination and willful disobedience against
Delada and to impose on him the penalty of suspension. Consequently, petitioner is
not liable to pay back wages and other benefits for the period corresponding to the
penalty of 90-day suspension.
First, it must be pointed out that the basis of the 30-day preventive suspension
imposed on Delada was different from that of the 90-day penalty of suspension. The
30-day preventive suspension was imposed by MPH on the assertion that Delada
might sabotage hotel operations if preventive suspension would not be imposed on
him. On the other hand,
the penalty of 90-day suspension was imposed on respondent as a form of
disciplinary action. It was the outcome of the administrative proceedings conducted
against him.

Preventive suspension is a disciplinary measure resorted to by the employer

pending investigation of an alleged malfeasance or misfeasance committed by an
employee.[7] The employer temporarily bars the employee from working if his
continued employment poses a serious and imminent threat to the life or property
of the employer or of his co-workers.
the penalty of suspension refers to the disciplinary action imposed on the employee
after an official investigation or administrative hearing is conducted.[9] The
employer exercises its right to discipline erring employees pursuant to company
rules and regulations.[10] Thus, a finding of validity of the penalty of 90-day
suspension will not embrace the issue of the validity of the 30-day preventive
suspension. In any event, petitioner no longer assails the ruling of the CA on the
illegality of the 30-day preventive suspension.
Mabeza vs. NLRC [G.R. No. 118506 April 18, 1997]
Post under case digests, labor law at Monday, April 09, 2012 Posted by
Schizophrenic Mind
Facts: Petitioner Norma Mabeza and her co-employees at the Hotel Supreme in
Baguio City were asked by the hotels management to sign an instrument attesting
to the latters compliance with minimum wage and other labor standard provision.
The instrument provides that they have no complaints against the management of
the Hotel Supreme as they are paid accordingly and that they are treated well. The
petitioner signed the affidavit but refused to go to the Citys Prosecutors Office to
confirm the veracity and contents of the affidavit as instructed by management.
That same day, as she refused to go to the City Prosecutors Office, she was ordered
by the hotel management to turn over the keys to her living quarters and to remove
her belongings to the hotels premises. She then filed a leave of absence which was
denied by her employer. She attempted to return to work but the hotels cashier
told her that she should not report to work and instead continue with her unofficial
leave of absence. Three days after her attempt to return to work, she filed a
complaint against the management for illegal dismissal before the Arbitration
Branch of the NLRC in Baguio City. In addition to that, she alleged underpayment of
wages, non-payment of holiday pay, service incentive leave pay, 13th month pay,
night differential and other benefits. Peter Ng, in their Answer, argued that her
unauthorized leave of absence from work is the ground for her dismissal. He even
maintained that her alleged of underpayment and non-payment of benefits had no
legal basis. He raises a new ground of loss of confidence, which was supported by
his filing of criminal case for the alleged qualified theft of the petitioner. The Labor
Arbiter ruled in favor of the hotel management on the ground of loss of confidence.
She appealed to the NLRC which affirmed the Labor Arbiters decision. hence, this

Issue: Whether or not the dismissal by the private respondent of petitioner

constitutes an unfair labor practice.

Held: The NLRCs decision is reversed. The pivotal question in any case where unfair
labor practice on the part of the employer is alleged is whether or not the employer
has exerted pressure, in the form of restraint, interference or coercion, against his
employees right to institute concerted action for better terms and conditions of
employment. Without doubt, the act of compelling employees to sign an instrument
indicating that the employer observed labor standard provisions of the law when he
might not have, together with the act of terminating or coercing those who refuse to
cooperate with the employees scheme constitutes unfair labor practice. The labor
arbiters contention that the reason for the monetary benefits received by the
petitioner between 1981 to 1987 were less than the minimum wage was because
petitioner did not factor in the meals, lodging, electric consumption and water she
received during the period of computations. Granting that meals and lodging were
provided and indeed constituted facilities, such facilities could not be deducted
without the employer complying first with certain legal requirements. Without
satisfying these requirements, the employer simply cannot deduct the value from
the employees ages. First, proof must be shown that such facilities are customarily
furnished by the trade. Second, the provision of deductible facilities must be
voluntary accepted in writing by the employee. Finally, facilities must be charged at
fair and reasonable value. These requirements were not met in the instant case.
Private respondent failed to present any company policy to show that the meal and
lodging are part of the salary. He also failed to provide proof of the employees
written authorization and he failed to show how he arrived at the valuations. More
significantly, the food and lodging, or electricity and water consumed by the
petitioner were not facilities but supplements. A benefit or privilege granted to an
employee for the convenience of the employer is not a facility. The criterion in
making a distinction between the two not so much lies in the kind but the purpose.
Considering, therefore, that hotel workers are required to work on different shifts
and are expected to be available at various odd hours, their ready availability is a
necessary matter in the operations of a small hotel, such as the private
respondents hotel.
G.R. No. 157634
May 16, 2005


Petitioner Mayon Hotel & Restaurant (MHR) hired herein 16 respondents as

employees in its business in Legaspi City. Its operation was suspended on March 31,
1997 due to the expiration and non-renewal of the lease contract for the space it
rented. While waiting for the completion of the construction of its new site, MHR
continued its operation in another site with 9 of the 16 employees. When the new
site constructed and MHR resumed its business operation, none of the 16
employees was recalled to work.

MHR alleged business losses as the reason for not reinstating the respondents. On
various dates, respondents filed complaints for underpayment of wages, money
claims and illegal dismissal.


1. Whether or not respondents were illegally dismissed by petitioner;

2. Whether or not respondents are entitled to their money claims due to
underpayment of wages, and nonpayment of holiday pay, rest day premium, SILP,
COLA, overtime pay, and night shift differential pay.


1. Illegal Dismissal: claim for separation pay

Since April 1997 until the time the Labor Arbiter rendered its decision in July 2000,
or more than three (3) years after the supposed temporary lay-off, the
employment of all the respondents with petitioner had ceased, notwithstanding that
the new premises had been completed and the same resumed its operation. This is
clearly dismissal or the permanent severance or complete separation of the
worker from the service on the initiative of the employer regardless of the reasons

Article 286 of the Labor Code is clear there is termination of employment when
an otherwise bona fide suspension of work exceeds six (6) months. The cessation of
employment for more than six months was patent and the employer has the burden
of proving that the termination was for a just or authorized cause.

While we recognize the right of the employer to terminate the services of an

employee for a just or authorized cause, the dismissal of employees must be made
within the parameters of law and pursuant to the tenets of fair play. And in
termination disputes, the burden of proof is always on the employer to prove that
the dismissal was for a just or authorized cause. Where there is no showing of a
clear, valid and legal cause for termination of employment, the law considers the
case a matter of illegal dismissal.

If doubts exist between the evidence presented by the employer and the employee,
the scales of justice must be tilted in favor of the latter the employer must
affirmatively show rationally adequate evidence that the dismissal was for a
justifiable cause. It is a time-honored rule that in controversies between a laborer
and his master, doubts reasonably arising from the evidence, or in the
interpretation of agreements and writing should be resolved in the former's favor.
The policy is to extend the doctrine to a greater number of employees who can avail
of the benefits under the law, which is in consonance with the avowed policy of the
State to give maximum aid and protection of labor.

2. Money claims

The Supreme Court reinstated the award of monetary claims granted by the Labor

The cost of meals and snacks purportedly provided to respondents cannot be

deducted as part of respondents' minimum wage. As stated in the Labor Arbiter's
Even granting that meals and snacks were provided and indeed constituted
facilities, such facilities could not be deducted without compliance with certain legal
requirements. As stated in Mabeza v. NLRC, the employer simply cannot deduct the
value from the employee's wages without satisfying the following: (a) proof that
such facilities are customarily furnished by the trade; (b) the provision of deductible

facilities is voluntarily accepted in writing by the employee; and (c) the facilities are
charged at fair and reasonable value. The law is clear that mere availment is not
sufficient to allow deductions from employees' wages.

As for petitioners repeated invocation of serious business losses, suffice to say that
this is not a defense to payment of labor standard benefits. The employer cannot
exempt himself from liability to pay minimum wages because of poor financial
condition of the company. The payment of minimum wages is not dependent on the
employer's ability to pay.
William Barroga vs Data Center College et al
Labor Law Labor Standards Protection To Labor When Is There No Diminution of

In November 1991, William Barroga was hired as an instructor by Data Center

College in its Laoag City, Ilocos Norte campus. In June 1992, Barroga was reassigned to Vigan, Ilocos Sur. Part of the deal for his re-assignment was that Barroga
will receive a monthly allowance of P1,200.00 for board and lodging while
performing his job in Vigan. However, Data Center made it clear in writing that
Barroga is only entitled to the additional allowance while assigned in Vigan and such
allowance may be changed or forfeited if he will be re-assigned somewhere. In
1994, he was recalled to Laoag. Later, Barroga was also assigned as the temporary
Head of Education; he was also given a scholarship grant to support his postgraduate studies. In 2003, Barroga was advised that he will be transferred to
Bangued, Abra. Barroga refused because his father was sick and second, he found
out that there will be no additional allowance this time and that he will be working
there as an instructor and not as a Head of Education. In the same year, he filed a
labor case against Data College for constructive dismissal. Barroga alleged that the
real purpose of his transfer is to demote him to the rank of an instructor from being
the Head for Education performing administrative functions and that his reassignment will entail an indirect reduction of his salary or diminution of pay
considering that no additional allowance will be given to cover for board and lodging
expenses. He claims that such additional allowance was given in the past and
therefore cannot be discontinued and withdrawn without violating the prohibition
against non-diminution of benefits.

ISSUE: Whether or not the absence of additional allowance in Barrogas supposed

re-assignment constitutes a diminution of benefits.

HELD: No. It is true that as a general rule, benefits and perks enjoyed by employees
cannot be reduced and discontinued or diminished. But this rule is only applicable
to grants or benefits which are founded on an express policy or has ripened into a
practice over a long period which is consistent and deliberate. In the case at bar,
Barrogas additional allowance while in Vigan is not permanent. In fact, Data College
made clear that such allowance is only applicable while Barroga is in Vigan and such
allowance is no longer applicable if he is going to be assigned somewhere. Further,
Data College showed that it is experiencing financial difficulties hence the need to
withdraw the scholarship previously granted to Barroga. On the issue of his removal
as Head for Education, the same is valid. Barroga was merely assigned in a
temporary capacity, such designation is terminable at the pleasure of Data College
which made such appointment.
G.R No. 163419. February 13, 2008

FACTS: TSPI Corporation entered into a Collective Bargaining Agreement with the
corporation Union for the increase of salary for the latters members for the year
2000 to 2002 starting from January 2000. thus, the increased in salary was
materialized on January 1, 2000. However, on October 6, 2000, the Regional
Tripartite Wage and production Board raised daily minimum wage from P 223.50 to P
250.00 starting November 1, 2000. Conformably, the wages of the 17 probationary
employees were increased to P250.00 and became regular employees therefore
receiving another 10% increase in salary. In January 2001, TSPIC implemented the
new wage rates as mandated by the CBA. As a result, the nine employees who were
senior to the 17 recently regularized employees, received less wages. On January
19, 2001, TSPICs HRD notified the 24 employees who are private respondents, that
due to an error in the automated payroll system, they were overpaid and the
overpayment would be deducted from their salaries starting February 2001. The
Union on the other hand, asserted that there was no error and the deduction of the
alleged overpayment constituted diminution of pay.

ISSUE: Whether the alleged overpayment constitutes diminution of pay as alleged

by the Union.

RULING: Yes, because it is considered that Collective Bargaining Agreement entered

into by unions and their employers are binding upon the parties and be acted in

strict compliance therewith. Thus, the CBA in this case is the law between the
employers and their employees.

Therefore, there was no overpayment when there was an increase of salary for the
members of the union simultaneous with the increasing of minimum wage for
workers in the National Capital Region. The CBA should be followed thus, the senior
employees who were first promoted as regular employees shall be entitled for the
increase in their salaries and the same with lower rank workers.
Posted on June 26, 2013 by winnieclaire
The private respondent, International School, Inc. pursuant to Presidential Decree
732, is a domestic educational institution established primarily for dependents of
foreign diplomatic personnel and other temporary residents.
The school grants foreign-hires certain benefits not accorded to local hires. These
include housing, transportation, shipping costs, taxes, and home leave travel
allowance. Foreign hires are also paid a salary rate twenty-five percent (25%) more
than local hires. The School justifies the difference on two significant economic
disadvantages foreign-hires have to endure, namely (a) the dislocation factor
and (b) limited tenure.
The compensation scheme is simply the Schools adaptive measure to remain
competitive on an international level in terms of attracting competent professionals
in the field of international education.
Local hires filed a petition claiming that point-of-hire classification employed by the
School is discriminatory to Filipinos and that the grant of higher salaries to foreignhires constitutes racial discrimination.

ISSUE: Whether or not the Schools system of compensation is violative of the

principle of equal pay for equal work

RULING: Discrimination, particularly in terms of wages, is frowned upon by the Labor

Code. Article 135, for example, prohibits and penalizes the payment of lesser
compensation to female employees as against a male employee for work of equal

value. Art. 248 declares it an unfair labor practice for an employer to discriminate in
regard to wages in order to encourage or discourage membership in an labor

Persons who work with substantially equal qualifications, skill, effort and
responsibility, under similar conditions, should paid similar salaries. If an employer
accords employees the same position and rank, the presumption is that these
employees perform equal work. This presumption is borne by logic and human
experience. If the employer has discriminated against an employee, it is for the
employer to explain why the employee is treated unfairly.

The employer in this case had failed to do so. There is no evidence here that
foreign-hires perform 25% more efficiently or effectively than local-hires. Both
groups have similar functions and responsibilities, which they perform under similar
working conditions.
Aklan Electric Corp. Inc. vs NLRC
FACTS: January 22, 1991 by way of a resolution of the Board of Directors of AKELCO
it allowed the temporary holding of office at Amon Theater, Kalibo, Aklan upon the
recommendation of Atty. Leovigildo Mationg, then project supervisor, on the ground
that the office at Lezo, Aklan was dangerous and unsafe. Majority of the employees
including the herein complainants, continued to report for work at Lezo, Aklan and
were paid of their salaries. The complainants claimed that transfer of office from
Lezo, Aklan to Kalibo, Aklan was illegal because it failed to comply with the legal
requirements under P.D. 269, thus the they remained and continued to work at the
Lezo Office until they were illegally locked out therefrom by the respondents.
Despite the illegal lock out however, complainants continued to report daily to the
location of the Lezo Office, prepared to continue in the performance of their regular
duties. Complainants who continuously reported for work at Lezo, Aklan were not
paid their salaries from June 1992 up to March 18, 1993.

LA dismissed the complaints. NLRC reversed and set aside the LAs decision and
RULING that private respondents are entitled to unpaid wages.
NLRC based its conclusion on the following: (a) the letter of Leyson, Office Manager
of AKELCO addressed to AKELCOs General Manager, Atty. Mationg, requesting for
the payment of private respondents unpaid wages from June 16, 1992 to March18,
1993; (b) the memorandum of said Atty. Mationg in answer to the letter request of

Leyson where he made an assurance that he will recommend such request; (c) the
private respondents own computation of their unpaid wages.-

Petitioner AKELCO claims

compensable service is best shown by timecards, payslips and other similar

documents and it was an error for public respondent to consider the computation of
the claims for wages and benefits submitted merely by private respondents as
substantial evidence

ISSUE: WON the refusal of private respondents to work under the lawful orders of
AKELCO management are covered by the no work, no pay principle (thus not
entitled to the claim for unpaid wages)

RULING: The above bases of the NLRC does not constitute substantial evidence to
support the conclusion that private respondents are entitled to the payment of
wages from June 16, 1992 to March18, 1993. Substantial evidence is that amount of
relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion. These evidences relied upon by public respondent did not establish the
fact that private respondents actually rendered services in the Kalibo office during
the stated period.

It has been established that the petitioners business office was transferred to
Kalibo and all its equipments, records and facilities were transferred thereat and
that it conducted its official business in Kalibo during the period in question. It was
incumbent upon private respondents to prove that they indeed rendered services
for petitioner, which they failed to do.

It would neither be fair nor just to allow private respondents to recover something
they have not earned and could not have earned because they did not render
services at the Kalibo office during the stated period.
MENDOZA, J.: February 15, 2012

On May 23, 2008, Javier filed a complaint before the NLRC for underpayment of
salaries and other labor standard benefits. He alleged that he was an employee of
Fly Ace since September 2007, performing various tasks at the respondents
warehouse such as cleaning and arranging the canned items before their delivery to
certain locations, except in instances when he would be ordered to accompany the
companys delivery vehicles, aspahinante; that he reported for work from Monday
to Saturday from 7:00 oclock in the morning to 5:00 oclock in the afternoon; that
during his employment, he was not issued an identification card and payslips by the
company; that on May 6, 2008, he reported for work but he was no longer allowed
to enter the company premises by the security guard upon the instruction of Ruben
Ong (Mr. Ong), his superior;5 that after several minutes of begging to the guard to
allow him to enter, he saw Ong whom he approached and asked why he was being
barred from entering the premises; that Ong replied by saying, "Tanungin mo anak
mo;" 6 that he then went home and discussed the matter with his family; that he
discovered that Ong had been courting his daughter Annalyn after the two met at a
fiesta celebration in Malabon City; that Annalyn tried to talk to Ong and convince
him to spare her father from trouble but he refused to accede; that thereafter, Javier
was terminated from his employment without notice; and that he was neither given
the opportunity to refute the cause/s of his dismissal from work.
Fly Ace averred that it was engaged in the business of importation and sales of
groceries. Sometime in December 2007, Javier was contracted by its employee, Mr.
Ong, as extra helper on a pakyaw basis at an agreed rate of P 300.00 per trip, which
was later increased to P 325.00 in January 2008. Mr. Ong contracted Javier roughly 5
to 6 times only in a month whenever the vehicle of its contracted hauler, Milmar
Hauling Services, was not available. On April 30, 2008, Fly Ace no longer needed the
services of Javier. Denying that he was their employee, Fly Ace insisted that there
was no illegal dismissal.8 Fly Ace submitted a copy of its agreement with Milmar
Hauling Services and copies of acknowledgment receipts evidencing payment to
Javier for his contracted services bearing the words, "daily manpower (pakyaw/piece
rate pay)" and the latters signatures/initials.
Labor Arbiter LA dismissed the complaint. Javier failed to present proof that he was
a regular employee of Fly Ace. [no ID, documents, payslips. Fly Ace is not engaged
in trucking business but in the importation and sales of groceries. Since there is a
regular hauler to deliver its products, we give credence to Respondents claim that
complainant was contracted on "pakiao" basis.
NLRC It was of the view that apakyaw-basis arrangement did not preclude the
existence of employer-employee relationship. "Payment by result x x x is a method
of compensation and does not define the essence of the relation. It is a mere
method of computing compensation, not a basis for determining the existence or
absence of an employer-employee relationship.10" The NLRC further averred that it

did not follow that a worker was a job contractor and not an employee, just because
the work he was doing was not directly related to the employers trade or business
or the work may be considered as "extra" helper as in this case; and that the
relationship of an employer and an employee was determined by law and the same
would prevail whatever the parties may call it.
Finding Javier to be a regular employee, the NLRC ruled that he was entitled to a
security of tenure. For failing to present proof of a valid cause for his termination,
Fly Ace was found to be liable for illegal dismissal of Javier who was likewise entitled
to backwages and separation pay in lieu of reinstatement.
Court of Appeals Reinstated dismissal of complaint. Javier failed to prove by
substantial evidence er-ee relationship. Did not pass the control test.
ISSUE:WON Javier was regular employee of Fly Ace. NO, onus probandi was on Javier
and he failed to provide substantial evidence.
In an illegal dismissal case, the onus probandi rests on the employer to prove that
its dismissal of an employee was for a valid cause. However, before a case for illegal
dismissal can prosper, an employer-employee relationship must first be established.
Existence of an employer-employee relationship between him and Fly Ace is
essentially a question of fact. In dealing with factual issues in labor cases,
"substantial evidence that amount of relevant evidence which a reasonable mind
might accept as adequate to justify a conclusion is sufficient."27
Although Section 10, Rule VII of the New Rules of Procedure of the NLRC28 allows a
relaxation of the rules of procedure and evidence in labor cases, this rule of
liberality does not mean a complete dispensation of proof. Labor officials are
enjoined to use reasonable means to ascertain the facts speedily and objectively
with little regard to technicalities or formalities but nowhere in the rules are they
provided a license to completely discount evidence, or the lack of it. The quantum
of proof required, however, must still be satisfied. Hence, "when confronted with
conflicting versions on factual matters, it is for them in the exercise of discretion to
determine which party deserves credence on the basis of evidence received, subject
only to the requirement that their decision must be supported by substantial
evidence."29 Accordingly, the petitioner needs to show by substantial evidence that
he was indeed an employee of the company against which he claims illegal
Hence, while no particular form of evidence is required, a finding that such
relationship exists must still rest on some substantial evidence. Moreover, the
substantiality of the evidence depends on its quantitative as well as its qualitative
aspects."30Although substantial evidence is not a function of quantity but rather of

quality, the x x x circumstances of the instant case demand that something more
should have been proffered. Had there been other proofs of employment, such as x
x x inclusion in petitioners payroll, or a clear exercise of control, the Court would
have affirmed the finding of employer-employee relationship."31
In sum, the rule of thumb remains: the onus probandi falls on petitioner to establish
or substantiate such claim by the requisite quantum of evidence.32 "Whoever
claims entitlement to the benefits provided by law should establish his or her right
thereto x x x."33 Sadly, Javier failed to adduce substantial evidence as basis for the
grant of relief.
In this case, the LA and the CA both concluded that Javier failed to establish his
employment with Fly Ace. By way of evidence on this point, all that Javier presented
were his self-serving statements purportedly showing his activities as an employee
of Fly Ace. Clearly, Javier failed to pass the substantiality requirement to support his
While Javier remains firm in his position that as an employed stevedore of Fly Ace,
he was made to work in the company premises during weekdays arranging and
cleaning grocery items for delivery to clients, no other proof was submitted to fortify
his claim. The lone affidavit executed by one Bengie Valenzuela was unsuccessful in
strengthening Javiers cause. In said document, all Valenzuela attested to was that
he would frequently see Javier at the workplace where the latter was also hired as
stevedore.34 Certainly, in gauging the evidence presented by Javier, the Court
cannot ignore the inescapable conclusion that his mere presence at the workplace
falls short in proving employment therein. The supporting affidavit could have, to an
extent, bolstered Javiers claim of being tasked to clean grocery items when there
were no scheduled delivery trips, but no information was offered in this subject
simply because the witness had no personal knowledge of Javiers employment
status in the company.
The Court is of the considerable view that on Javier lies the burden to pass the wellsettled tests to determine the existence of an employer-employee relationship, viz:
(1) the selection and engagement of the employee; (2) the payment of wages; (3)
the power of dismissal; and (4) the power to control the employees conduct. Of
these elements, the most important criterion is whether the employer controls or
has reserved the right to control the employee not only as to the result of the work
but also as to the means and methods by which the result is to be accomplished.35
In this case, Javier was not able to persuade the Court that the above elements exist
in his case.1avvphi1 He could not submit competent proof that Fly Ace engaged his
services as a regular employee; that Fly Ace paid his wages as an employee, or that
Fly Ace could dictate what his conduct should be while at work. In other words,
Javiers allegations did not establish that his relationship with Fly Ace had the
attributes of an employer-employee relationship on the basis of the above-

mentioned four-fold test. Worse, Javier was not able to refute Fly Aces assertion
that it had an agreement with a hauling company to undertake the delivery of its
goods. It was also baffling to realize that Javier did not dispute Fly Aces denial of his
services exclusivity to the company. In short, all that Javier laid down were bare
allegations without corroborative proof.
Fly Ace does not dispute having contracted Javier and paid him on a "per trip" rate
as a stevedore, albeit on apakyaw basis. The Court cannot fail to note that Fly Ace
presented documentary proof that Javier was indeed paid on a pakyaw basis per the
acknowledgment receipts admitted as competent evidence by the LA. Unfortunately
for Javier, his mere denial of the signatures affixed therein cannot automatically
sway us to ignore the documents because "forgery cannot be presumed and must
be proved by clear, positive and convincing evidence and the burden of proof lies on
the party alleging forgery."36
One final note. The Courts decision does not contradict the settled rule that
"payment by the piece is just a method of compensation and does not define the
essence of the relation."37 Payment on a piece-rate basis does not negate regular
employment. "The term wage is broadly defined in Article 97 of the Labor Code as
remuneration or earnings, capable of being expressed in terms of money whether
fixed or ascertained on a time, task, piece or commission basis. Payment by the
piece is just a method of compensation and does not define the essence of the
relations. Nor does the fact that the petitioner is not covered by the SSS affect the
employer-employee relationship. However, in determining whether the relationship
is that of employer and employee or one of an independent contractor, each case
must be determined on its own facts and all the features of the relationship are to
be considered.

G.R. No. 131247

January 25, 1999

The Regional Tripartite Wages and Productivity Board (RTWPB) Region V issued
Wage Order No. RB 05-03 which provided for a Cost of Living Allowance (COLA) to
workers in the private sector who had rendered service for at least three (3) months
before its effectivity, and for the same period thereafter. RTWPB Region VII however
followed suit but the COLA amounts in other cities nationwide were different from
that issued by RTWPN region V. This caused Prubankers Association to write the

petitioner requesting that the Labor Management Committee be immediately

convened to discuss and resolve the alleged wage distortion created in the salary
structure upon the implementation of the said wage orders. As the grievance could
not be settled in the meetings, the parties agreed to submit the matter to voluntary
Respondent brought the case to appeal and was favored by CA, petitioner then
sought the review by SC. It argued that a wage distortion exists, because the
implementation of the two Wage Orders has resulted in the discrepancy in the
compensation of employees of similar pay classification in different regions.

WON two wage orders resulting in the discrepancy of employees compensation in
different regions also results to a wage distortion.


There is no wage distortion since the wage order implementation covers all the
branches of the bank. The hierarchy of positions was still preserved.

Also, petitioners claim of wage distortion must also be denied for one other reason.
The difference in wages between employees in the same pay scale in different
regions is not the mischief sought to be banished by the law. Republic Act No. 6727
(the Wage Rationalization Act), recognizes existing regional disparities in the cost
of living as provided in Section 2 of said law.

***Notes: The levels of different pay classes was not eliminated. The statutory
definition of wage distortion is found in Article 124 of the Labor Code, as amended
by Republic Act No. 6727, which reads: Standards/Criteria for Minimum Wage Fixing.
As used herein, a wage distortion shall mean a situation where an increase in
prescribed wage results in the elimination or severe contraction of intentional
quantitative differences in wage or salary rates between and among employee
groups in an establishment as to effectively obliterate the distinctions embodied in
such wage structure based on skills, length of service, or other logical bases of
differentiation. Wage distortion involves four elements: (1) An existing hierarchy of

positions with corresponding salary rates; (2) A significant change in the salary rate
of a lower pay class without a concomitant increase in the salary rate of a higher
one; (3)The elimination of the distinction between the two levels and (4) The
existence of the distortion in the same region of the country.
A disparity in wages between employees holding similar positions but in different
does not constitute wage distortion as contemplated by law. As stated, it is the
hierarchy of
positions and the disparity of their corresponding wages and other emoluments that
are sought to
be preserved by the concept of wage distortion.


PETITIONER Bankard, Inc. has resorted to job contractualization or outsourcing or
contracting out of jobs. Among other programs, it also implemented a Manpower
Rationalization Program (MRP), which was an invitation to the employees to tender
their voluntary resignation with entitlement to separation pay equivalent to at least
two months salary for every year of service. Majority of its Phone Center and
Service Fulfillment Division employees availed themselves of the MRP.

Respondent Bankard Employees Union-AWATU (Union) contended that Bankard

committed unfair labor practice (ULP). Is there merit to this contention?

Ruling: No.


The general principle is that the one who makes an allegation has the burden of
proving it. While there are exceptions to this general rule, in ULP cases, the alleging

party has the burden of proving the ULP; and in order to show that the employer
committed ULP under the Labor Code, substantial evidence is required to support
the claim. Such principle finds justification in the fact that ULP is punishable with
both civil and/or criminal sanctions.

Aside from the bare allegations of the union, nothing in the records strongly proves
that Bankard intended its program, the MRP, as a tool to drastically and deliberately
reduce union membership. Contrary to the findings and conclusions of both the
National Labor Relations Commission (NLRC) and the Court of Appeals (CA), there
was no proof that the program was meant to encourage the employees to
disassociate themselves from the union or to restrain them from joining any union
or organization.

There was no showing that it was intentionally implemented to stunt the growth of
the union or that Bankard discriminated against, or in any way singled out the union
members who had availed themselves of the retirement package under the MRP.

True, the program might have affected the number of union membership because of
the employees voluntary resignation and availment of the package, but it does not
necessarily follow that Bankard indeed purposely sought such a result. It must be
recalled that the MRP was implemented as a valid cost-cutting measure, well within
the ambit of the so-called management prerogatives. Bankard contracted an
independent agency to meet business exigencies. In the absence of any showing
that Bankard was motivated by ill will, bad faith or malice, or that it was aimed at
interfering with its employees right to self-organize, it cannot be said to have
committed an act of unfair labor practice (Bankard, Inc. vs. NLRC, et. al., G.R. No.
171664, March 6, 2013).
Douglas Millares and Rogelio Lagda
National Labor Relations Commission, Trans-Global Maritime Agency, Inc. and Esso
International Shipping Co., Ltd.
Kapunan, J.
Docket Number and Date of Decision

G.R. No. 110524, July 29, 2002

Significance of the Case
In this landmark case, the Supreme Court, citing Brent case and Coyoca case, ruled
that seafarers are considered contractual employees. They can not be considered as
regular employees under Article 280 of the Labor Code. Their employment is
governed by the contracts they sign everytime they are rehired and their
employment is terminated when the contract expires. Their employment is
contractually fixed for a certain period of time.
Douglas Millares was employed by ESSO International through its local manning
agency, Trans-Global, in 1968 as a machinist. In 1975, he was promoted as Chief
Engineer which position he occupied until he opted to retire in 1989.
In 1989, petitioner Millares filed a leave of absence and applied for optional
retirement plan under the Consecutive Enlistment Incentive Plan (CEIP) considering
that he had already rendered more than twenty years of continuous service.
Esso International denied Millares request for optional retirement on the following
grounds, to wit: (1) he was employed on a contractual basis; (2) his contract of
enlistment (COE) did not provide for retirement before the age of sixty years; and
(3) he did not comply with the requirement for claiming benefits under the CEIP, i.e.,
to submit a written advice to the company of his intention to terminate his
employment within thirty days from his last disembarkation date.
Subsequently, after failing to return to work after the expiration of his leave of
absence, Millares was dropped from the roster of crew members effective
September 1, 1989.
On the other hand, petitioner Lagda was employed by Esso International as
wiper/oiler in 1969. He was promoted as Chief Engineer in 1980, a position he
continued to occupy until his last COE expired in 1989.
In 1989, Lagda likewise filed a leave of absence and applied to avail of the optional
early retirement plan in view of his twenty years continuous service in the company.
Trans-global similarly denied Lagdas request for availment of the optional early
retirement scheme on the same grounds upon which Millares request was denied.
Unable to return for contractual sea service after his leave of absence expire, Lagda
was also dropped from the roster of crew members effective September 1, 1989.
Millares and Lagda filed a complaint-affidavit for illegal dismissal and non-payment
of employee benefits against private respondents Esso International and TransGlobal before the POEA.

The POEA rendered a decision dismissing the complaint for lack of merit. On appeal,
NLRC affirmed the decision of the POEA dismissing the complaint.
NLRC rationcinated that Millares and Lagda, as seamen and overseas contract
workers are not covered by the term regular employment as defined under Article
280 of the Labor Code. The POEA, which is tasked with protecting the rights of the
Filipino workers for overseas employment to fair and equitable recruitment and
employment practices and to ensure their welfare, prescribes a standard
employment contract for seamen on board ocean-going vessels for a fixed period
but in no case to exceed twelve months.
Whether or not seafarers are considered regular employees under Article 280 of the
Labor Code.
It is for the mutual interest of both the seafarer and the employer why the
employment status must be contractual only or for a certain period of time.Quoting
Brent School Inc. v. Zamora, 1990, and Pablo Coyoca v. NLRC, 1995, the Supreme
Court ruled that seafarers are considered contractual employees. They can not be
considered as regular employees under Article 280 of the Labor Code. Their
employment is governed by the contracts they sign everytime they are rehired and
their employment is terminated when the contract expires. Their employment is
contractually fixed for a certain period of time. They fall under the exception of
Article 280 whose employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time of
engagement of the employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of the season.
As ruled in Brent case, there are certain forms of employment which also require the
performance of usual and desirable functions and which exceed one year but do not
necessarily attain regular employment status under Article 280. Overseas workers
including seafarers fall under this type of employment which are governed by the
mutual agreements of the parties.
And as stated in the Coyoca case, Filipino seamen are governed by the Rules and
Regulations of the POEA. The Standard Employment Contract governing the
employment of All Filipino seamen on Board Ocean-Going Vessels of the POEA,
particularly in Part I, Sec. C specifically provides that the contract of seamen shall
be for a fixed period. And in no case should the contract of seamen be longer than
12 months.
Moreover, the Court held that it is an accepted maritime industry practice that
employment of seafarers are for a fixed period only. Constrained by the nature of

their employment which is quite peculiar and unique in itself, it is for the mutual
interest of both the seafarer and the employer why the employment status must be
contractual only or for a certain period of time. Seafarers spend most of their time
at sea and understandably, they can not stay for a long and an indefinite period of
time at sea. Limited access to shore society during the employment will have an
adverse impact on the seafarer. The national, cultural and lingual diversity among
the crew during the COE is a reality that necessitates the limitation of its period.