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Art.

263 (252) of Labor Code - Meaning of Duty to Bargain Collectively

Title Doctrine Legal Issue Pertinent Facts

1. UFE-DFA-KMU v. Nestle Phils. Inc. The purpose of collective bargaining is the reaching Whether or not Nestle UFE-DFA-KMU was the sole and exclusive bargaining agent of
March 3, 2008 of an agreement resulting in a contract binding on was guilty for ULP (No) the rack-and-file employees of nestle belonging to the latter’s
the parties; but the failure to reach an agreement Alabang and Cabuyao plants. Despite 15 meetings between
after negotiations have continued for a reasonable them, the parties failed to reach any agreement on the
period does not establish a lack of good faith. The proposed CBA. The union then filed a case for ULP against
statutes invite and contemplate a collective Nestle
bargaining contract, but they do not compel one.
The duty to bargain does not include the obligation
to reach an agreement.

2. UST Faculty Union v. UST April 7, Where a party alleges that the other party Whether or not UST was The Mariño Group filed a complaint for ULP against the UST
2009 committed ULP, it is the burden of the alleging party guilty for ULP (No) with the NLRC which was denied and It also filed a complaint
to prove such allegation with substantial evidence. with the Med-Arbiter which nullifies certification of the
Such principle finds justification in the fact that ULP is election of the Gamilla Group as officers of the USTFU. As to
punishable with both civil and/or criminal sanctions. the CBA, LA ruled that when the new CBA was entered into,
The onus probandi falls on the shoulders of petitioner (1) the Gamilla Group presented more than sufficient
to establish or substantiate such claims by the evidence to establish that they had been duly elected as
requisite quantum of evidence. In labor cases as in officers of the USTFU; and (2) the ruling of the med-arbiter that
other administrative proceedings, substantial the election of the Gamilla Group was null and void was not
evidence or such relevant evidence as a reasonable yet final and executory and (3) respondents could not be
mind might accept as sufficient to support a faulted for negotiating with said group. As to the padlocking
conclusion is required. of the USTFU office, the mere presence of Justino Cardenas,
Detachment Commander of the security agency contracted
by the UST, cannot be equated to a positive act of "aiding"
the Gamilla Group in securing the USTFU office.

3. General Milling Corporation v. The procedure in collective bargaining prescribed by Whether or not GMC’s 190 employed workers members of the union and GMC
CA, February 2004 the Code is mandatory because of the basic interest refusal to make a concluded a CBA which the issue of representation effective
of the state in ensuring lasting industrial peace. counter-proposal to the for 3 years. A day before expiration, the union sent a
union’s proposal for CBA proposed CBA. GMC had received collective and individual
negotiation is an letters from workers who stated that they had withdrawn from
indication of its bad faith. their union membership on the grounds of religious beliefs.
(Yes) GMC dismissed a union member on the ground of
incompetence and the union protested for ULP and submit to
the grievance procedure

Art. 265 (253-A) of Labor Code - Terms of Collective Bargaining Agreement

Title Doctrine Legal Issue Pertinent Facts

1. FVC Labor Union- Phil. Transport Despite an agreement for a CBA with a life of more Whether or not the At the end of 3rd year of 5 year term, Union and company
and General Workers Association than five years, either as an original provision or by amended or extended renegotiate which provides thus extending 5 year period by 4
v. SANAMA-FVC-SIGLO, amendment, the bargaining union’s exclusive term of CBA affects the months and 9 days before expriation of original agreed CBA.
November 27, 2009 bargaining status is effective only for five years and exclusive representation Respondent filed certification election, however, it was
can be challenged within sixty (60) days prior to the status of Collective opposed by petitioner on the ground that it was filed outside
expiration of the CBA’s first five years. Bargaining Agent and freedom period
the right of another union
to ask for Certification as

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exclusive Bargaining
agreement. (No)

2. SMCEU-PTGWO v. Confesor, All other provisions of the CBA shall be negotiated 1) Whether or not the CBA remain in force until June 30, 1992. SMC is undergo a
September 19, 1996 not later than three (3) years after its execution. The duration of the restructuring. THe “Magnolia” and “Feends and Livestock”
representation aspect refers to the identity and renegotiated terms of divisions were spun-off and became 2 separate and distinct
majority status of the union that negotiated the CBA the CBA is to be effective corporation. Petitioner insisted that the bargaining unit (BU) of
as the exclusive bargaining representative of the for three years or for only SMC should still include the employees of spun-off companies
appropriate bargaining unit concerned. All other two years; (3 Years) and that the renegotiated tems of CBA shall be effective only
provisions simply refers to the rest of the CBA, for remaining 2 years. SMC contended that both Spun-off
economic as well as non-economic provisions, 2) Whether or not the companies automatically ceased to be part of BU
except representation. bargaining unit of SMC
includes also the
There are various factors which must be satisfied and employees of Magnolia
considered in determining the proper constituency of and SMFI. (No)
a bargaining unit.
(1) will of the employees (Globe Doctrine)
(2) affinity and unit of employees interest, such as
substantial similarity of work and duties, or similarity of
compensation and working conditions
(3) prior collective bargaining history; and
(4) employment status, such as temporary, seasonal
and probationary employees

Art. 266 (254) of Labor Code - Injunction Prohibited

Title Doctrine Legal Issue Pertinent Facts

1. Ando v. Campo "ART. 254. INJUNCTION PROHIBITED. – No temporary or 1. W/N the RTC has Petitioner claimed that the property belonged to him and his
permanent injunction or restraining order in any case jurisdiction over the case. wife, not to the corporation, and, hence, could not be
involving or growing out of labor disputes shall be (No) subject of the execution sale. The RTC denied petitioner’s
issued by any court or other entity, except as prayer for a TRO, holding that the trial court had no jurisdiction
otherwise provided in Articles 218 and 264 of this 2. W/N the execution of to try and decide the case. The CA affirmed the RTC Order.
Code." Regular courts have no jurisdiction to hear judgment against Ando’s He argued that there was no indication in the body of the
and decide questions which arise from and are property is proper (No) Decision that he was solidarily liable with the corporation.
incidental to the enforcement of decisions, orders, or
awards rendered in labor cases by appropriate
officers and tribunals of the DOLE.The power of the
NLRC to execute its judgment extends only to
properties unquestionably belonging to the judgment
debtor alone.

Art. 267 (255) of Labor Code - Exclusive Bargaining Representative

Title Doctrine Legal Issue Pertinent Facts

1. International School Alliance of The basic test of an asserted bargaining unit's Whether or not the Petitioner, a legitimate labor union and the collective
Educators v. Quisumbing, June 1, acceptability is whether or not it is fundamentally the Acting secretary erred in bargaining representative of all faculty members" of the
2000 combination which will best assure to all employees upholding the School, contested the difference in salary rates between
the exercise of their collective bargaining rights. To reasonableness of the foreign and local-hires. This issue, as well as the question of
include foreign-hires in a bargaining unit with local- classification made by whether foreign-hires should be included in the appropriate

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hires would not assure either group the exercise of respondent-school (Yes) bargaining unit, eventually caused a deadlock between the
their respective collective bargaining rights. parties. DOLE stated that The Union cannot also invoke the
equal protection clause to justify its claim of parity.

2. National Association of Free While the existence of a bargaining history is a factor Whether or not it was Private respondent Mainit Lumber, a legitimate labor
Trade Unions v. Mainit Lumber that may be reckoned with in determining the right for the Med-Arbiter organization, filed a petition for certification election to
Development Company Workers appropriate bargaining unit, the same is not decisive to change the employer determine the sole and exclusive collective bargaining
Union, December 21, 1990 or conclusive. Other factors must be considered. The from two separate representative among the rank and file workers/employees of
test of grouping is community or mutuality of interests. bargaining units to only Mainit Lumber Development Company Inc. (MALDECO).
This is so because "the basic test of an asserted one. (Yes) Med-Arbiter granted the petition for certification election.
bargaining unit's acceptability is whether or not it is NAFTU appealed and alleges that the employer MALDECO
fundamentally the combination which will best was composed of two bargaining units, the Sawmill Division
assure to all. and the Logging Division and in fact, had then two separate
CBA's, one for the Sawmill Division and another for the
Logging Division, but both the petition

Art. 268 (256) of Labor Code - Respresentative Issue in Organized Establishments

Title Doctrine Legal Issue Pertinent Facts

1. Picop Resources Inc. v. Dequilla While it is incumbent for the employer to continue to Whether or not the act of A complaint for ULP and illegal dismissal with Labstand. PICOP
et al. December 7, 2011 recognize the majority status of the incumbent signing an authorization invoked the defense that respondents were terminated from
bargaining agent even after the expiration of the for certification election employment based on acts of disloyalty they committed
freedom period, they could only do so when no before the freedom when they signed an authorization for the Federation of Free
petition for certification election was filed. period is sufficient Workers (FFW), a rival union, to file a petition for certification
ground to terminate the election among all rank-and-file employees of PRI. It contends
employment. (No) that the acts of respondents are a violation of the union
security clause, as provided in their CBA.

2. National Union of Workers in “Double majority rule,” for there to be a valid Whether or not the union CA affirmed DOLE. It held that the “majority” contemplated in
Hotels, Restaurants and Allied certification election, majority of the bargaining unit was able to obtain the deciding which of the unions in a certification election is the
Industries- Manila Pavillon Hotel must have voted and the winning union must have required majority for it to winner refers to the majority of valid votes cast (one who
Chapter v. Sec of Labor, July 31, garnered majority of the valid votes cast. be certified as the obtained the highest number of votes from all the votes cast),
2009 exclusive bargaining not the simple majority (50% +1) of the valid votes cast,
Under Art. 256 of the Labor Code, the union agent. (No) hence, the DOLE was correct in ruling that even if the 17 votes
obtaining the majority of the valid votes cast by the were in favor of petitioner, it would still be insufficient to
eligible voters shall be certified as the sole and overturn the results of the certification election.
exclusive bargaining agent of all the workers in the
appropriate bargaining unit. This majority is 50% + 1.

All the probationary employees’ votes should be


deemed valid votes while that of the supervisory
employees should be excluded.

It bears reiteration that the true importance of


ascertaining the number of valid votes cast is for it to
serve as basis for computing the required majority,
and not just to determine which union won the
elections. The opening of the segregated but valid
votes has thus become material. To be sure, the
conduct of a certification election has a two-fold

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objective: to determine the appropriate bargaining
unit and to ascertain the majority representation of
the bargaining representative, if the employees
desire to be represented at all by anyone. It is not
simply the determination of who between two or
more contending unions won, but whether it
effectively ascertains the will of the members of the
bargaining unit as to whether they want to be
represented and which union they want to represent
them.

Having declared that no choice in the certification


election conducted obtained the required majority,
it follows that a "run-off election" which refers to an
election between the labor unions receiving the two
(2) highest number of votes in a certification or
consent election with three (3) or more choices,
where such a certified or consent election results in
none of the three (3) or more choices receiving the
majority of the valid votes cast; provided that the
total number of votes for all contending unions is at
least fifty percent (50%) of the number of votes cast

Art. 273 (260) - 274 (261) ) of Labor Code - Grievance Machnery and Voluntary Arbitration; Jurisdiction of Voluntary Arbitrators and Panel of Voluntary Arbitrators

Title Doctrine Legal Issue Pertinent Facts

1. Santuyo et. al. v. Remerco Voluntary arbitrators have original and exclusive Whether or not the LA All union officers were dismissed for illegal strike. Employees
Garmets Manufacturing Inc. jurisdiction over matters which have not been has jurisdiction (No) who wanted to sever their employment were paid separation
March 22, 2010 (in relation to 217) resolved by the grievance machinery. Pursuant to pay while those who wanted to resume work were recalled
Articles 217 in relation to Articles 260 and 261 of the on the condition that they would no longer be paid a daily
Labor Code, the labor arbiter should have referred rate but on a piece-rate basis. While the union and RGMI
the matter to the grievance machinery provided in were undergoing conciliation in the NCMB, RGMI transferred
the CBA. Because the labor arbiter clearly did not its factory site, where the union went on strike. Respondents
have jurisdiction over the subject matter alleged violations of the CBA should be resolved according to
the grievance procedure laid out therein. Thus, the labor
arbiter had no jurisdiction over the complaint.

2. Teng v. Pahagac, Nov. 17, 2010 The present rule [Art. 262-A] makes the voluntary Whether or not the VA's The VA dismissed the complaint because there was no
arbitration award final and executory after ten decision is not subject to employer-employee relationship. Respondents received the
calendar days from receipt of the copy of the award a motion for decision on June 12, 2003; They filed an MR which was denied
or decision by the parties. Presumably, the decision reconsideration; (No) and they received the order on July 8, 2003. The Voluntary
may still be reconsidered by the Voluntary Arbitrator Arbitrator reasoned that the Procedural Guidelines in the
on the basis of a motion for reconsideration duly filed Conduct of Voluntary Arbitration Proceedings (1989
during that period. Procedural Guidelines) does not provide the remedy of a
motion for reconsideration to the party adversely affected by
the VAs order or decision

3. Samahan ng mga A decision or award of a voluntary arbitrator is Whether or not the CA The VA ruled that the three separate suspensions of Mr.
Mangagawa sa Hyatt (SAMASAH- appealable to the CA via petition for review under erred in dismissing Caragdag are valid, his dismissal is legal and OSDA 4.32 of
NUWHRAIN) v. Magsalin, June 6, Rule 43. 15 days after receipt of notice. outright the petition for Hyatt's Code of Discipline is reasonable. Petitioner assailed the

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2011 certiorari filed before it VA's decision before the CA in a petition for certiorari which
on the ground that the was docketed as CA-G.R. SP No. 78364.[19] As mentioned at
same is an improper the outset, the CA dismissed the petition outright for being the
mode of appeal (No) wrong remedy.
Art. 278 - 279 (263-264) -Strikes and Lockouts

Title Doctrine Legal Issue Pertinent Facts

1. Abaria v. NLRC, December 7, An ordinary striking worker cannot be terminated for Whether or not the strike Nava and her group were suspended in union membership
2011 (in relation to 263 and 264) mere participation in an illegal strike. There must be and picketing activities which led them to launch a series of mass actions. For their
proof that he or she committed illegal acts during a conducted by union continued picketing activities without a valid Notice of
strike. A union officer, on the other hand, may be officers and members Strike,100 striking employees were dismissed. A permanent
terminated from work when he knowingly were illegal? (YES) injunction was issued enjoining Nava group from committing
participates in an illegal strike, and like other workers, illegal acts mentioned in Art. 264 of the Labor Code.
when he commits an illegal act during a strike.

2. YSS Employees Union v. YSS Assumption and certification orders are executory in Whether or not the YSS Laboratories implemented a retrenchment program
Laboratories Inc., December 4, character and are to be strictly complied with by the retrenched employees which affected 11 employees. Of the 11 employees sought to
2009 parties, even during the pendency of any petition should be excluded from be retrenched, nine were officers and members of YSSEU, the
questioning their validity. Accepting back the the coverage of the sole and exclusive bargaining representative of the rank-and-
workers in this case is not a matter of option, but of return-to-work- order? file employees of YSS. Claiming that YSS Laboratories was
obligation mandated by law. (NO) guilty of discrimination and union-busting in carrying out the
said retrenchment program, YSSEU decided to hold a valid
strike.

3. NUWHRAIN-APL-IUF Dusit Hotel It was settled that in assumption of jurisdiction cases, Whether or not the Union Due to bargaining deadlock, the union decided to wage a
Nikko Chapter v. CA, November the Secretary should impose actual reinstatement in conducted and illegal strike. Later, the Hotel prevented its workers from entering the
11, 2008 accordance with the intent and spirit of Art. 263(g) of strike? (YES) premises claiming that they violated the Hotel's Grooming
the Labor Code. The peculiar circumstances in the Standards, where some members sported closely cropped
present case validate the Secretary's decision to hair or cleanly shaven heads. In view of the hotel’s action, the
order payroll reinstatement instead of actual Union staged a picket outside the Hotel premises causing
reinstatement. It is obviously impracticable for the other workers to join the picket. For this reason, the Hotel
Hotel to actually reinstate the employees who experienced a severe lack of manpower which forced them
shaved their heads or cropped their hair because this to temporarily cease operations in three restaurants.
was exactly the reason they were prevented from
working in the first place.

4. Jackbilt Industries Inc., v. The principle of conclusiveness of judgment, Whether or not the filing Respondent went on strike and its officers and members
Jackbilt Employees Workers embodied in Section 47(c), Rule 39 of the Rules of of a petition with the picketed petitioners main gates and deliberately prevented
Union-NAFLU-KMU, March 20, 2009 Court 24 holds that the parties to a case are bound labor arbiter to declare a persons and vehicles from going into and out of the
by the findings in a previous judgment with respect to strike illegal is a condition compound. Eventually, petitioner dismissed the concerned
matters actually raised and adjudged therein. Article sine qua non for the valid officers and members. Respondent filed for illegal dismissal.
264(e) of the Labor Code prohibits any person termination of Petitioner, on the other hand, asserted that because
engaged in picketing from obstructing the free employees who commit respondent conducted a strike without observing the
ingress to and egress from the employer’s premises. an illegal act in the procedural requirements provided in Article 263 of the Labor
Since respondent was found in the July 17, 1998 course of such strike? Code. The Labor Arbiter decided that the petitioner was guilty
decision of the NLRC to have prevented the free (NO) of illegal dismissal because petitioner did not file a petition to
entry into and exit of vehicles from petitioner’s declare the strike illegal before terminating respondents
compound, respondent’s officers and employees officers and employees.
clearly committed illegal acts in the course of the

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March 9, 1998 strike.

5. APAP v. PAL, June 6, 2011 There is no necessity to conduct a proceeding to Whether or not a ALPAP went on strike on June 5, 1998. DOLE Sec. issued a
determine the participants in illegal strike or those proceeding to determine return-to-work order on June 7, 1998. However, it was only on
who refused to heed the return-to-work order who actually June 26, 1998 when ALPAP officers and members reported
because the ambiguity can be cured by reference participated in the illegal back to work as shown in a logbook signed by each of them.
to the body of the decision and the pleadings filed. strike may still be PAL refused to accept the returning pilots for their failure to
The records of the case or the logbook unveil the conducted? (NO) comply with the order. ALPAP filed with labor arbiter a
names of each of the returning pilots who refused to complaint for illegal lockout against PAL.
comply with the order.

6. Olisa et. al. v. Escario Et. al. (Art. Conformably with the long honored principle of a fair Whether or not Jaile Olisa PINA filed a Complaint charging Olisa et al with ULP AND
264 in rel to 279) day’s wage for a fair day’s labor, employees et al are entitled to full ABANDONMENT OF WORK, stating that they had VIOLATED
dismissed for joining an illegal strike are not entitled to backwages due to the PROVISIONS ON STRIKE of the CBA. The Labor Arbiter rendered
backwages for the period of the strike even if they finding of no a decision declaring the subject strike to be illegal. The NLRC
are reinstated by virtue of their being merely abandonment pursuant sustained the LA finding that the strike was illegal, but reversed
members of the striking union who did not commit to Art. 279? (NO) the LA ruling that there was abandonment of employment.
any illegal act during the strike. PINA was directed to reinstate Olisa et al but without
backwages.

7. VCMC v. Yballe, January 15, A worker merely participating in an illegal strike may Whether or not The respondents in this case are staff nurses and midwives of
2014 not be terminated from employment. It is only when respondents commit MCCH who actively joined and were believed to have took
he commits illegal acts during a strike that he may be illegal acts during strike? part in committing illegal acts during the strike. MCCH
declared to have lost employment status. In contrast, (YES) terminated the union leaders of NAMA-MCCH-NFL as well as
a union officer may be terminated from employment the respondents.CA found that respondents cannot be
for knowingly participating in an illegal strike or considered to have committed illegal acts since their
participates in the commission of illegal acts during a participation was limited to the wearing of arm bands.
strike.

8. Tavangao Shell Refinery A mutual declaration would neither add to nor Whether or not a The union manifested that the company was bargaining in
Employees Association v. Pilipinas subtract from the reality of the deadlock then deadlock may only be bad faith. The company proposed the declaration of a
Shell, April 7, 2014. existing between the parties. Thus, the absence of declared based on deadlock and recommended that the help of a third party
the parties’ mutual declaration of deadlock does not mutual consent of the be sought. On that same day, however, the union filed a
mean that there was no deadlock. At most, it would parties? (NO) Notice of Strike in the NCMB, alleging bad faith bargaining on
have been simply a recognition of the prevailing the part of the company. The company filed a Petition for
status quo between the parties. Assumption of Jurisdiction with the SOLE and the latter
granted the petition and assumed jurisdiction. The union
thereafter filed a petition for certiorari in the CA. The union
argued that Item 8 of the ground rules that would govern the
negotiations provided that “a deadlock can only be
declared upon mutual consent of both parties.”

9. Asia Brewery Inc. v. TPMA, In cases of compulsory arbitration before the Whether or not the CA Petitioner corporation petitioned the Secretary of Labor to
September 18m, 2013. Secretary of Labor pursuant to Article 263(g) of the erred when it remanded assume jurisdiction over the parties’ labor dispute, invoking
Labor Code, the financial statements of the to the Secretary of Labor Article 263 (g) of the Labor Code. In answer, respondent
employer must be properly audited by an external the issue on wage union opposed the assumption of jurisdiction, reasoning
and independent auditor in order to be admissible in increase? (YES) therein that the business of petitioner corporation is not
evidence for purposes of determining the proper indispensable to the national interest.
wage award.

10. Escario Et. al. v NLRC 2010 Art. 264 (a) contemplates two causes for the dismissal Whether or not the As a result of the walkout All the officers and some 200

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case (Art. 264 in rel to 279) of an employee: a. unlawful lockout and b. petitioners are entitled to members of the Malayang Samahan ng mga Manggagawa
participation in an illegal strike. According to the law, full backwages from the sa Balanced Food, PINA preventively suspended all officers of
the award of full backwages is given only when the date of dismissal until the the Union and later on terminated the officers of the Union.
termination of employment is a consequence of an date of actual PINA filed a complaint for damages. LA ruled it was an illegal
unlawful lockout. reinstatement due to walkout constituting ULP. Union filed a notice of strike that
their not being found to PINA was guilty of union busting through the constructive
On the consequences of an illegal strike, the have abandoned their dismissal of its officers. NLRC sustained the finding that the
provision distinguishes between a union officer and a jobs? (NO) strike was illegal, but reversed the LAs ruling that there was
union member participating in an illegal strike. A abandonment. The CA affirmed the NLRC and denies claim
union officer who knowingly participates in an illegal for full backwages
strike is deemed to have lost his employment status,
but a union member who is merely instigated or
induced to participate in the illegal strike is more
benignly treated. Part of the explanation for the
benign consideration for the union member is the
policy of reinstating rank-and-file workers who are
misled into supporting illegal strikes, absent any
finding that such workers committed illegal acts
during the period of the illegal strikes.

11. University of San Augustin Assumption of Jurisdiction order of SOLE shall have Whether or not the Strike CBA contain “No Strike, No Lockouts” claus. Parties could not
Employees Union v. CA, (2006 the effect of automatically enjoining the intended or was illegal and the union agree on the manner computing the tuition incremental
cases) impending strike or lockout. Employees shall officers were deemed to proceeds (TIP). NCMB failed to resolve. Notice of strike was
immediately return to work and the employer shall have lost their made. Assumption of jurisdiction of SOLE was granted.
immediately resume operations and readmit all employment status on
workers under the same terms and conditions their failure to return to
prevailing before the strike or lockouts. work (Yes)

12. Phil Diamond Hotel and Resort The union admittedly not the exclusive representative Whether or not the strike Respondent Union notified the employers to negotiate by
Inc. v. Manila Diamond Hotel of the majority of the employees of petitioner, hence is illegal (Yes) notice to bargain for CBA which was refused by the Hotel
Employees Union, 494 SCRA 336 it could not demand from petitioner, the right to because it was not certified by DOLE as exclusive bargaining
bargain collectively in their behalf. agent. Union went on strike.

13. Sukhothai Cuisine and The effects of such illegal strikes make a distinction Whether or not private Union filed notice of strike for ULP. In conciliation, they
Restaurant v. CA, 495 SCRA 336 between workers and union officers who participate respondents are guaranteed that there will be no dismissal of private
therein: an ordinary striking worker cannot be deemed to have lost respondents during the pendency of the case, with
terminated for mere participation, there must be their employment status reservation of the management prerogative to issue memos
proof that he or she committed illegal acts during a by participating in the to employees in case of violation of company policies. A
strike. A union officer, however, may be terminated commission of illegal acts complaint for illegal strike due to alleged “Wildcat Strike” and
from work when he knowingly participates in an during the strike (Yes) other concerted action staged in the company premises
illegal strike and when he commits an illegal act
during a strike. In all cases, the striker must be
identified. Proof beyond reasonable doubt is not
required, substantial evidence justifying the dismissal,
may suffice.

14. Biflex Phils. Inc. Labor Unions v. The legality of a strike is determined not only by Whether or not Petitioners Biflex and Filflex Labor Unions are the respective
Filflex Industrial Manufacturing compliance with its legal formalities but also by the petitioners were guilty of collective bargaining agents of the employees of respondent
Corporation, 511 SCRA 247 means by which it is carried out. holding an illegal strike. corporations (Biflex and Filflex). On October 24, 1990, the
(Yes) labor sector staged a welga ng bayan to protest the
accelerating prices of oil. On even date, petitioner-unions, led
by their officers staged a work stoppage which lasted for

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several days, prompting respondents to file a petition to
declare the work stoppage illegal for failure to comply with
procedural requirements.

15. Sta. Rosa Coca Cola Plant Since strikes cause disparity effects not only on the Whether or not the strike The Union decided to participate in a mass action organized
Employee’s Union v. Coca-cola relationship between labor and management but is illegal (Yes) by the Alyansa in front of the Company’s premises. The Union
Bottlers Phils. Inc., 512 SCRA 437 also on the general peace and progress of society, officers and members held a picket along the front perimeter
the law has provided limitations on the right to strike. of the plant. As a result, The volume of production for the day
was short by 60,000 physical cases versus budget. LA ruled the
For a strike to be valid, the following procedural strike conducted by the Union was illegal since there was no
requisites provided by Art. 263 of the Labor Code showing that the Union conducted a strike vote, observed the
must be observed: prescribed cooling-off period, much less, submitted a strike
(a) a notice of strike filed with the DOLE 30 days vote to the DOLE within the required time. Consequently, for
before the intended date thereof, or 15 days in case knowingly participating in the illegal strike, the individual
of unfair labor practice; petitioners were considered to have lost their employment
(b) strike vote approved by a majority of the total status
union membership in the bargaining unit concerned
obtained by secret ballot in a meeting called for that
purpose,
(c) notice given to the DOLE of the results of the
voting at least seven days before the intended strike.

These requirements are mandatory and the failure of


a union to comply therewith renders the strike illegal.

16. Manila Hotel Employee’ Defiance of the assumption order or a return to work Whether or not defiance MHEA filed a notice of strike for ULP, SOLE enjoined any strike
Association v. Manila Hotel order by a striking employee, whether a union officer of a return to work order or lockout and ordered the parties to cease and desist from
Corporation 517 SCRA 349 or a member, is an illegal act and, therefore, a valid by a striking employee is committing any acts that may exacerbate the situation.
ground for loss of employment status. The assumption an illegal act and is a Despite the order by SOLE, MHEA conducted a strike. Manila
of jurisdiction by the SOLE over the labor disputes valid ground for loss of Hotel filed a complaint alleging that MHEA conducted an
causing or likely to cause a strike or lockout in an employment status. (Yes) illegal strike, blocked all ingress and egress of the hotel
industry indispensable to the national interest is in the premises, harassed and intimidated company officers, non-
nature of a police power measure. Petition is denied striking employees, customers and suppliers. It also sought a
declaration that the strike was illegal and that the striking
employees lost their employment.

17. G&S Transport Corporation v. With respect to backwages, the principle of a "fair Whether or not Petitioner ordered the striking workers to return to work but
Infante, 533 SCRA 289 day's wage for a fair day's labor" remains as the basic respondents are entitled some of the drivers, including respondents, refused to do so.
factor in determining the award thereof. If there is no to backwages (No) Action for illegal strike was filed before the Labor Arbiter and
work performed by the employee there can be no declared that respondents Daramayo, Borbo, Infante and
wage or pay unless, of course, the laborer was able, Castañeda, though found to have participated in the illegal
willing and ready to work but was illegally locked out, strike, were not meted out the penalty of dismissal; instead,
suspended or dismissed or otherwise illegally petitioner was ordered to pay them separation pay in lieu of
prevented from working. While it was found that reinstatement but without backwages.
respondents expressed their intention to report back
to work, the latter exception cannot apply in this
case.

18. Steel Corporation of the Phils. The strike is a legitimate weapon in the human Whether or not This kind of strike is calculated to compel the employer to
v. SCP Employees Union National struggle for a decent existence. It is considered as respondent is the recognized one’s union and not the other contending groups,
the most effective weapon in protecting the rights of recognized collective as the employees’ bargaining representative to work out a
the employees to improve the terms and conditions bargaining agent (No) CBA despite the striking union’s doubtful majority status to

8|L AB O R RELATI ONS 3E Case Matrix SY 16-17 FINALS MODE


of their employment. But to be valid, a strike must be merit voluntary recognition and lack of formal certification as
pursued within legal bounds. The right to strike as a the exclusive representative in the bargaining unit
means for the attainment of social justice is never
meant to oppress or destroy the employer. The law
provides limits for its exercise.
(1) it is a union-recognition-strike which is not
sanctioned by labor laws
(2) it was undertaken after the dispute had been
certified for compulsory arbitration
(3) it was in violation of the Secretarys return-to-work
order.

19. Chris Garments Case (January The Secretary of Labor and Employment dismissed Whether or not the case 1st PCE, Chris Garments Workers Union-PTGWO Local Chapter
2009) the first petition as it was filed outside the 60-day is barred by res judicata. No. 832 (Union) filed a Petition for Certification Election which
freedom period. At that time therefore, the union has (No) not covered by its Collective Bargaining Agreement (CBA)
no cause of action since they are not yet legally with the Samahan Ng Mga Manggagawa sa Chris Garments
allowed to challenge openly and formally the status Corporation, the certified bargaining agent). Med-Arbit•
of SMCGC-SUPER as the exclusive bargaining This kind of strike is calculated to compel the
representative of the bargaining unit. Such dismissal, employer to recognized one’s union and not the other
however, has no bearing in the instant case since the contending groups, as the employees’ bargaining
third petition for certification election was filed well representative to work out a CBA despite the striking union’s
within the 60-day freedom period. Otherwise stated, doubtful majority status to merit voluntary recognition and
there is no identity of causes of action to speak of lack of formal certification as the exclusive representative in
since in the first petition, the union has no cause of the bargaining unit.er dismissed that There was no ER-EE
action while in the third, a cause of action already relationship and petition for certification election will still fail
exists for the union as they are now legally allowed to due to the contract bar rule. 2nd and 3rd PCE was dismissed
challenge the status of SMCGC-SUPER as exclusive by Med-arbiter. SOLE granted certification election among
bargaining representative. the regular rank-and-file employees of Chris Garments
Corporation with the ff. choices: (a) Chris Garments Workers
Union – PTGWO Local Chapter No. 832, (b) SMCGC-SUPER,
and (c) No Union.SMCGC-SUPER emerged as the winning
union.

Art. 292(b)of Labor Code (277[b]) - Miscellaneous Provisions

Title Doctrine Legal Issue Pertinent Facts

1. St. Lukes Medical Center Inc. v. To effectuate a valid dismissal from employment by Whether or not the On December 30, 1996, respondent was on duty from 6:00
Notario, October 20, 2010 the employer, the Labor Code has set twin dismissal was without just p.m. to 6:00 a.m. Hiswork consisted mainly of monitoring the
requirements, namely: (1) the dismissal must be for cause and there was no video cameras. Justin Tibon reported about the loss of his
any of the causes provided in Article 282 of the Labor due process (Yes) bag. The Security Department of petitioner hospital
Code; and (2) the employee must be given an conducted an investigation. When the tapes of VCR covering
opportunity to be heard and defend himself. This first the subject period were reviewed, the cameras failed to
requisite is referred to as the substantive aspect, while record the incident. Finding the written explanation of
the second is deemed as the procedural aspect. respondent to be unsatisfactory, respondent was served a
copy of the Notice of Termination, dismissing him on the
ground of gross negligence/inefficiency under Section 1, Rule
VII of its Code of Discipline.

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2. Aliling v. World Express Corp., As a rule to effect a legal dismissal the employer must Whether or not Aliling Respondent to advise Aliling of the termination of his services
April 25, 2012 show not only a valid ground therefor but also was illegally terminated effective as of that date owing to his “non-satisfactory
procedural due process should properly be by reason of violation of performance”. Here, the first and second notice requirements
observed. When the Labor Code speaks of due process have not been properly observed, thus tainting petitioner’s
procedural due process, the reference is usually to requirement. dismissal with illegality.
the two(2) notice rule, envisaged in Section 2 (III),
Rule XXIII, Book V of the Omnibus Rules of
Implementing the Labor Code which provides:
“Section 2. Standard of due process:requirements of
notice

I. For termination of Employment base on just causes


as defined in Article 282 of the Code:(a) A written
notice served on the employee specifying the
ground or grounds of termination, and giving the said
employee reasonable opportunity to explain his side;
(b) A hearing or conference during which the
employee concerned, with the assistance of counsel
if the employee so desires, is given the opportunity to
respond to the charge, present his evidence or rebut
the evidence presented against him; and
(c) A written notice [of] termination served on the
employee indicating that upon due consideration of
all the circumstance, grounds have been established
to justify his termination.

3. Perez v. PT&T April 9, 2009 To meet the requirements of due process in the 1. Whether or not there Pursuant to an unsigned letter, investigations were
dismissal of an employee, an employer must furnish just cause for dismissal? commenced by the company, yielding findings that shipping
the worker with two written notices: (1) a written (No) Section jacked up the value of the freight costs for goods
notice specifying the grounds for termination and 2. Whether or not due shipped and that the duplicates of the shipping documents
giving to said employee a reasonable opportunity to process observed? (No) allegedly showed traces of tampering, alteration and
explain his side and (2) another written notice superimposition. Petitioners, Perez (shipping clerk) and Doria
indicating that, upon due consideration of all (supervisor), were placed on preventive suspension for 30
circumstances, grounds have been established to days. The 15-day suspension was extended twice. A
justify the employer's decision to dismiss the memorandum was issued charging criminal charges against
employee. petitioners and mandating their dismissal for falsification of
documents. Thus, petitioners filed a complaint for illegal
suspension and illegal dismissal. LA found that the 30-day
Where the dismissal was without just or authorized extension of petitioners’ suspension and their subsequent
cause and there was no due process, Article 279 of dismissal were both illegal. NLRC: Reversed. CA: Affirmed
the Labor Code, as amended, mandates that the NLRC.
employee is entitled to reinstatement without loss of
seniority rights and other privileges and full
backwages, inclusive of allowances, and other
benefits or their monetary equivalent computed from
the time the compensation was not paid up to the
time of actual reinstatement.

Art. 294 (279) of Labor Code - Security of Tenure

10 | L A B O R RELATI ONS 3E Case Matrix SY 16-17 FINALS MODE


Title Doctrine Legal Issue Pertinent Facts

1. Agabon v. NLRC, November 17, Where the employer had a valid reason to dismiss an Whether or not the Petitioners were employed by Riviera Home as gypsum board
2004 employee but did not follow the due process employer had a valid and cornice installers from January 1992 to February 23, 1999
requirement, the dismissal may be upheld but the reason to dismiss an when they were dismissed for abandonment of work.
employer will be penalized to pay an indemnity to employee - YES Petitioners contended that they were illegally dismissed.
the employee. Responded, on the other hand, ruled there was just cause,
thus petitioners were not entitled to backwages and
Art. 279 means that the termination is illegal if it is not separation pay.
for any of the justifiable or authorized by law. Where
the dismissal is for a just cause, the lack of statutory
due process should not nullify the dismissal but the
employer should indemnify the employee for the
violation of his statutory rights. The indemnity should
be stiffer to discourage the abhorrent practice of
“dismiss now, pay later” which we sought to deter in
Serrano ruling. The violation of employees’ rights
warrants the payment of nominal damages.

2. Jaka Food Processing Corp. v. 1) if the dismissal is based on a just cause but the Whether or not full Respondents were hired by JAKA until their termination on
Pacot, March 28, 2005 employer failed to comply with the notice backwages and August 29, 1997 because the Corporation was “in dire
requirement, the sanction to be imposed upon him separation pay should financial straits”. It was not disputed that they were
should be tempered because the dismissal was be awarded to terminated without complying with the requirement under Art.
initiate by an act imputable to the employee. respondents when 283 of the Labor Code regarding the service of notice upon
employers effected the employees and DOLE at least one month before the
2) if the dismissal is based on an authorized cause but termination without intended date of termination.
the employer fails to comply with the notice complying with the twin-
requirement, the sanction should be stiffer because notice rule. - YES
the dismissal process was initiated by the employer’s
exercise of his management prerogative. Thus,
dismissal was upheld but ordered JAKA to pay each
of the respondents the amount of PhP 50,000.00
representing nominal damages for non-compliance
with statutory due process.

3. Culili v. Eastern Yes, an employee may be terminated for reasons Whether or not an Respondent Eastern Telecommunications Philippines, Inc.
Telecommunications Phils. Feb 9, involving measures taken by the employer due to employee may be (ETPI) is a telecommunications company engaged mainly in
2011 business necessities under Article 283. One such terminated for reasons the business of establishing commercial telecommunications
reason is redundancy. There is redundancy when the involving measures taken systems and leasing of international datalines or circuits.
service capability of the workforce is greater than by the employer due to
what is reasonably required to meet the demands of business necessities Petitioner Nelson A. Culili (Culili) was employed by ETPI as a
the business enterprise. A position becomes under Article 283? Technician in its Field Operations Department. Culili was
redundant when it is rendered superfluous by any promoted to Senior Technician in the Customer Premises
number of factors such as over-hiring of workers, Equipment Management Unit of the Service Quality
decrease in volume of business, or dropping a Department and his basic salary was increased.

11 | L A B O R RELATI ONS 3E Case Matrix SY 16-17 FINALS MODE


particular product line or service activity previously
manufactured or undertaken by the enterprise. In 1998, due to business troubles and losses, ETPI offered to its
employees who had rendered at least fifteen years of service,
the Special Retirement Program, which consisted of the
option to voluntarily retire at an earlier age and a retirement
package equivalent to two and a half (2½) months’ salary for
every year of service.

4. Serrano v. Gallant Maritime Whether or not the Petitioner Antonio Serrano was hired by respondents Gallant
March 24, 2009) The word salaries in Section 10(5) does not include overtime and leave pay Maritime Services, Inc. and Marlow Navigation Co., Inc.,
overtime and leave pay. For seafarers like petitioner, should form part of the under a POEA-approved contract of employment for 12
DOLE Department Order No. 33, series 1996, provides salary basis in the months, as Chief Officer, with the basic monthly salary of
a Standard Employment Contract of Seafarers, in computation of the US$1,400, plus $700/month overtime pay, and 7 days paid
which salary is understood as the basic wage, monetary award, vacation leave per month.
exclusive of overtime, leave pay and other bonuses; because these are fixed
whereas overtime pay is compensation for all work benefits that have been On the date of his departure, Serrano was constrained to
"performed" in excess of the regular eight hours, and stipulated into the accept a downgraded employment contract upon the
holiday pay is compensation for any work contract. - NO assurance and representation of respondents that he would
"performed" on designated rest days and holidays. be Chief Officer by the end of April 1998. Thus, Serrano
refused to stay on as second Officer and was repatriated to
By the foregoing definition alone, there is no basis for the Philippines, serving only two months and 7 days, leaving
the automatic inclusion of overtime and holiday pay an unexpired portion of nine months and twenty-three days.
in the computation of petitioner's monetary award,
unless there is evidence that he performed work
during those periods.

5. Yap v. Thenamaris Ship’s . Petitioner was employed as an electrician of the vessel, M/T
Management May 30, 2011(for SEASCOUT by Intermare Maritime Agencies, Inc. in behalf of its
OFW re RA 8042 as amended by We have previously declared that the clause "or for [1] Whether Section 10 of principal, Vulture Shipping Limited. When the vessel was sold,
RA 10022
three months for every year of the unexpired term, R.A. 8042, to the extent he insisted that he was entitled to the payment of the
whichever is less" is unconstitutional for being violative that it affords an illegally unexpired portion of his contract since he was illegally
of the rights of (OFWs) to equal protection. Moreover, dismissed migrant worker dismissed from employment. Respondent alleged that Yaps
the subject clause does not state any definitive the lesser benefit of contract was validly terminated due to the sale of the vessel.
governmental purpose, hence, it also violates "salaries for [the]
petitioner's right to substantive due process. unexpired portion of his
employment contract for
Generally, an unconstitutional act is not a law. An three (3) months for
exception to this is the doctrine of operative fact every year of the
applied when a declaration of unconstitutionality will unexpired term,
impose an undue burden on those who have relied whichever is less" is
on the invalid law. This case should not be included in constitutional;
the exception. It was not the fault of petitioner that
he lost his job due to an act of illegal dismissal [2] Assuming that it is,
committed by respondents. whether the CA gravely
erred in granting

12 | L A B O R RELATI ONS 3E Case Matrix SY 16-17 FINALS MODE


Also, we cannot subscribe to respondents postulation petitioner only three (3)
that the tanker allowance of US$130.00 should not be months backwages
included in the computation of the lump-sum salary. when his unexpired term
First, fair play, justice, and due process dictate that of 9 months is far short of
this Court cannot now, for the first time on appeal, the "every year of the
pass upon this question. Second, the allowance was unexpired term"
encapsulated in the basic salary clause threshold.

6. Bank of Lucbao v. Manabat, Whether or not the CA Respondent Rommel Manabat was assigned as an encoder
Feb 1, 2012 Under the law and prevailing jurisprudence, an erred in ordering the at the Bank of Lubaos Sta. Cruz Extension Office. Petitioner
illegally dismissed employee is entitled to petitioner to pay filed several criminal complaints for qualified theft against
reinstatement as a matter of right. However, if separation pay in lieu of Lingad and the respondent with the Municipal Trial Court
reinstatement would only exacerbate the tension reinstatement and (MTC) of Lubao, Pampanga, citing serious misconduct
and strained relations between the parties, or where awarding backwages - tantamount to willful breach of trust as ground. Respondent,
the relationship between the employer and the NO on the other hand, filed a Complaint for illegal dismissal
employee has been unduly strained by reason of contending that there was no valid ground for his dismissal.
their irreconcilable differences, particularly where the
illegally dismissed employee held a managerial or
key position in the company, it would be more
prudent to order payment of separation pay instead
of reinstatement.

7. St. Mary’s Academy v. Palacio Employees who are illegally dismissed are entitled to In the 1990s, Petitioner hired Respondents Calibod, Laquio,
et. al. September 8, 2010 (Eg./ full backwages, inclusive of allowances and other Whether the respondents Santander, Saile Padilla, Andalahao, Decipulo and
Limited backwages) benefits or their monetary equivalent, computed are entitled to Montederamos, as teachers, and respondent Palacio as
from the time their actual compensation was backwages from March guidance counselor. In accordance to DECS Memorandum
withheld from them up to the time of their actual to 19 September 2000, No. 10, S. 1998 pursuant to RA 7836, the Petitioner informed
reinstatement. But if reinstatement is no longer because it is only on such the respondents that they cannot be re-accepted for the
possible, the backwages shall be computed from the date that they were school year 2000-2001 for not having passed the LET
time of their illegal termination up to the finality of the already dismissible for (Licensure Examinations for Teachers), nor can they continue
decision. cause. with their teaching profession.
- YES

8. Toyota Motor Phils. Corp. There can be no good faith in intentionally incurring Whether separation pay On 16 March 2001, Toyota terminated 227 employees for
Workers Association v. NLRC, absences in a collective fashion from work just to should be awarded to participation in concerted actions in violation of its Code of
October 19, 2007 attend DOLE hearings. The Union members should the Union members who Conduct and for misconduct under Article 282 of the Labor
know from common sense that the company will participated in the illegal Code. In reaction to the dismissal of its union members and
incur substantial amounts of losses. In a slew of strikes. - NO officers, the Union went on strike on 17 March, 28 March ad 12
cases, the Court refrained from awarding separation April. In the latter dates, the Union intensified its strike by
pay or financial assistance to union officers and barricading the gates of Toyota’s Bicutan and Sta. Rosa plant;
members who were separated from service due to thus, the strikers prevented workers who reported for work
their participation in or commission of illegal acts from entering the plants.
during strikes.

9. Bristol Myers Squibb Inc. v. It is clear that Article 282(c) of the Labor Code allows Whether or not the CA Petitioner Bristol Myers Squibb Philippines, Inc. hired

13 | L A B O R RELATI ONS 3E Case Matrix SY 16-17 FINALS MODE


Haban, December 17, 2008 an employer to terminate the services of an may order the respondent Richard Nixon A. Baban as district manager of the
employee for loss of trust and confidence. The right reinstatement, with full company. During the course of his employment, he failed to
of employers to dismiss employees by reason of loss backwages and distribute his employer’s products per company directions.
of trust and confidence is well established in damages, of a Thus, he was dismissed from work because of willful breach of
jurisprudence. confidential employee the trust reposed in him by his employer.
However, separation pay may still be awarded as whom it had found to be
some equitable relief in consideration of the past guilty of breach of trust -
services rendered. This award is merely to coat the NO
bitter termination experienced by respondent with a
little social justice. Separation pay at the rate of one
month salary for every year of service is proper.

10. Yrasuegui v. PAL, October 17, The obesity of petitioner, when placed in the context Whether or not the PAL serve notice of Administrative charge in violation of
2008 of his work as flight attendant, becomes an dismissal was valid that company standards on weight reqirements. Complaint was
analogous cause. Gross and habitual neglect, a the (Yes) an international flight steward who was dismissed because of
recognized just cause, is considered voluntary his failure to adhere to the weight standards of the company
although it lacks the element of intent found in Art.
282 (a), (c), and (d)

Argument that Bona fide occupational qualification


(BFOQ) is a statutory defense must fail
Meiorin Test (Us Jurisprudence) in determining
whether an employment policy is justified:
(1) The Employer must show that it adopted the
standard for a purpose rationally connected to the
performance of the job;
(2) The employer must establish that the standard is
reasonably necessary to the accomplishment of that
work-related purpose; and
(3) THe employer must establish that the standard is
reasonably necessary in order to accomplish the
legitimate work-related purpose.

11. Dreamland Hotel Resort v. Separation pay was also directed to be paid instead Whether or not Australian national was illegally dismissed as hotel manager
Johnson, March 12, 2014 of reinstatement because the strained relations Separation pay was also and ordered payment of full back wages.
(separation pay and strained between the parties prevented bringing the directed to be paid
relations) manager back to work. Here, the Court held that instead of reinstatement
multiple and repeated refusal to pay one's personnel (yes)
his salaries is equivalent to dismissal from
employment. Even expats here have access to our
courts for redress of grievances.

Doctrine of strained relations, the payment of


separation pay is considered an acceptable
alternative to reinstatement when the latter option is
no longer desirable or viable. On one hand,
such payment liberates the employee from what
could be a highly oppressive work environment.
On the other hand, it releases the employer from the
grossly unpalatable obligation of maintaining in its
employ a worker it could no longer trust.

14 | L A B O R RELATI ONS 3E Case Matrix SY 16-17 FINALS MODE


12. Manila Water v. Del Rosario, The grant of separation pay to a dismissed employee Whether or not the Manila Water discovered that 24 water meters were missing in
January 29, 2014 (separation pay) is determined by the cause of the dismissal. The years respondent Del Rosario is its stockroom. It appeared that Del Rosario and his co-
of service may determine how much separation pay entitled for Separation employee, Danilo Manguera, were involved in the pilferage
may be awarded. It is, however, not the reason why Pay (No) and the sale of water meters to the company's contractor in
such pay should be granted at all. vilation of sec. 11.1 of the Company's code of conduct.

As a general rule, an employee who has been


dismissed for any of the just causes enumerated
under Article 282 of the Labor Code is not entitled to
a separation pay.”However, in exceptional cases,
separation pay has been granted to a legally
dismissed employee as an act of “social justice” or
on “equitable grounds.” In either case, “it is required
that the dismissal (1) was not for serious misconduct;
and (2) did not reflect on the moral character of the
employee.

13. Nacar v. Gallery Frames, Uniform rate of six percent (6%) for the award of Whether or not a re- An Entry of Judgment was later issued certifying that the
August 13, 2013 ( interest rate) interest in the form of actual and compensatory computation in the resolution became final and executory referred back to the
damages. The foregoing rate shall take effect on 01 course of execution of LA for execution. Petitioner filed a Motion for Correct
July 2013. BSP-MB Resolution No. 796 dated 16 May the labor arbiter's original Computation, praying that his backwages be computed from
2013 and BSP Circular No. 799, Series of 2013, which computation of the the date of his dismissal on January 24, 1997 up to the finality
pegged the interest rates for loans and forbearance awards made is legally of the Resolution of the Supreme Court on May 27, 2002. Upon
of money, goods and credits, as well as judgments, proper. (Yes) recomputation, the Computation and Examination Unit of the
at six percent (6%). NLRC arrived at an updated amount in the sum ofP471,320.31.
Respondents, filed a Motion to Quash Writ of Execution,
arguing that no more recomputation is required to be made
of the said awards.

14. Bani Rural Bank Inc. v. De The computation of backwages depends on the final Whether or not the The complaint for illegal dismissal was initially dismissed by LA.
Guzman et. al., November 13, awards adjudged as a consequence ofillegal respondents’ backwages NLRC reversed it and ruled that the respondents had been
2013 ( computation) dismissal, in that: had been correctly illegally dismissed and ordered the petitioners to reinstate
First, when reinstatement is ordered, the general computed under the them with payment of backwages from the time of their
concept under Article 279 of the LaborCode, as decision of the NLRC, as Constructive dismissal until their actual reinstatement, less
amended, computes the backwages from the time confirmed by the CA, in earnings else where. The first computation of the monetary
of dismissal until the employee’s reinstatement. The light of the circumstance award was the period of backwages from the respondents'
computation of backwages (and similar benefits that there were two final illegal dismissal until August 25 1995 or the date when the
consideredpart of the backwages) can even NLRC decisions affecting respondents allegedly manifested that they no longerwanted
continue beyond the decision of the labor arbiter or the computation of to be reinstated. The NLRC NLRC ruled that the computation
NLRCand ends only when the employee is actually thebackwages.(Yes) of therespondents backwages should be until January 29 1999
reinstated. which was the date when the July31, 1998 decision attained
Second, when separation pay is ordered in lieu of finality.
reinstatement (in the event that thisaspect of the
case is disputed) or reinstatement is waived by the
employee (in the event thatthe payment of
separation pay, in lieu, is not disputed), backwages is
computed from thetime of dismissal until the finality
of the decision ordering separation pay.
Third, when separation pay is ordered after the
finality of the decision ordering the reinstatement by
reason of a supervening event that makes the award
of reinstatement no longer possible (as in the case),

15 | L A B O R RELATI ONS 3E Case Matrix SY 16-17 FINALS MODE


backwages is computed from the time of dismissal
until the finality of the decision ordering separation
pay.

15. Universal Robina Corp. v. Toyota Motor Phils. Corp. Workers Association Why and when The principal charge against petitioner Castillo was hinged
Castillo, July 10, 2013. (TMPCWA) v. NLRC17 expanded the doctrine laid separation pay may be upon "unauthorized arrangements" which he allegedly
down in PLDT by adding dismissals other than those awarded or denied? entered into. Petitioner Castillo’s unauthorized dealing with
under Art. 282 of the Labor Code, like willful respect to the changes in the Account Development
disobedience, gross and habitual neglect of duty, Agreement is exactly the offending cause of the host of
fraud or willful breach of trust, and commission of a infractions he committed, i.e., his neglect in signing the blank
crime against the employer or his family which would charge invoices and his improper receipt of gift certificates for
preclude award of separation pay. his personal gain. These acts taken together constitute a
breach of the trust and confidence reposed on petitioner
The award of separation pay is authorized in the Castillo by private respondent URC. Such claim was obviously
situations dealt with in Article 283 and 284 of the to create the impression that he was really not aware of any
Labor Code, but not in terminations of employment gift certificates and that whatever misstep he committed was
based on instances enumerated in Article 282. merely brought about by his good faith.

16. Baptista v. Villanueva, July 31, Any supposed procedural flaw in the proceedings Whether or not On suspicion of union mismanagement, a complaint for
2013. before the Committee was deemed cured when petitioners were denied impeachment against all the union officers and members of
petitioners were given the opportunity to be heard. of substantive and RPNEU,. RPNEU’s Board of Directors affirmed the
Due process, as a constitutional precept, is satisfied procedural due process recommendation of expulsion of petitioners and the 12 others
when a person was notified of the charge against of law when they from union membership. RPNEU’s officers requested the
him and was given an opportunity to explain or expelled from RPNEU management to serve them notices of termination from
defend himself. In administrative proceedings, the (No) employment in compliance with their CBA’s union security
filing of charges and giving reasonable opportunity clause which was effected. Petitioners filed complaints for ULP
for the person so charged to answer the accusations their expulsion and termination
against him constitute the minimum requirements of
due process. The essence of due process is simply to
be heard, or as applied to administrative
proceedings, an opportunity to explain one’s side, or
an opportunity to seek a reconsideration of the
action or ruling complained of. It cannot be denied
that petitioners were properly notified of the charges
filed against them and were equally afforded the
opportunity to present their side.

Mere absence of a one-on-one confrontation


between the petitioners and their complainants does
not automatically affect the validity of the
proceedings before the Committee. Not all cases
necessitate a trial-type hearing. As in this case, what
is indispensable is that a party be given the right to
explain one’s side, which was adequately afforded
to the petitioners.

17. BPI Employees Union Davao It is to be emphasized that contracting out of services whether or not the act of Union argues that in transferring the employees of FEBTC to
City v. BPI , July 24, 2013. is not illegal perse. It is an exercise of business BPI to outsource the BOMC instead of absorbing them in BPI as the surviving
judgment or management prerogative. The cashiering, distribution corporation in the merger, resulting in the reduction of the
outsourcing must not squarely fall under labor-only and bookkeeping Union’s membership. It is a violation of the CBA and interfered
contracting. functions to BOMC is in with the employees’ right to self organization. BPI defended
conformity with the law the validity of its service agreement with BOMC on three (3)

16 | L A B O R RELATI ONS 3E Case Matrix SY 16-17 FINALS MODE


and the existing CBA. grounds: 1] that it was pursuant to the prevailing law at that
(Yes) time, CBP Circular No. 1388; 2] that the creation of BOMC was
within management prerogatives intended to streamline the
operations and provide focus for BPI’s core activities; and 3]
that the Union recognized, in its CBA, the exclusive right and
prerogative of BPI to conduct the management and
operation of its business.

18. Integrated Microelectronics v. As a general rule, an illegally dismissed employee is Whether or not Ponilla is IMI found Pionilla guilty of violating Article 6.12 of the
Pionelles, August 28, 2013. entitled to reinstatement (or separation pay, if entitled to reinstatement Company Rules and Regulations (CRR) which prohibits the
reinstatement is not viable) and payment of full and payment of full back lending of one’s ID since the same is considered a breach of
backwages. Exception to the foregoing rule and wages (No, Only its security rules and carries the penalty of dismissal. Ponilla
thereby ordered the reinstatement of the employee Reinstatement without filed complaint for illegal dismissal with damages against IMI.
without backwages on account of the following: (a) fullback wages) LA found illegally dismissed with harshly penalized. NLRC
the fact that dismissal of the employee would be too found dismissal valid. CA found illegally dismissed and harshly
harsh of a penalty; and (b) that the employer was in penalized
good faith in terminating the employee.

Art. 295 (280) of Labor Code - Regular and Casual Employment

Title Doctrine Legal Issue Pertinent Facts

1. Lynvil Fishing Enterprises Inc. v. Two conditions for the validity of a fixed-contract Whether CA erred in Lynvil contends that it cannot be guilty of illegal dismissal
Ariola, February 1, 2012 agreement between the employer and employee: failing to consider that because the private respondents were employed under a
First, the fixed period of employment was knowingly the respondents fixed-term contract which expired at the end of the voyage.
and voluntarily agreed upon by the parties without employment, in any The private respondents contend that they became regular
any force, duress, or improper pressure being brought event, were contractual employees by reason of their continuous hiring and
to bear upon the employee and absent any other in nature being on a per performance of tasks necessary and desirable in the usual
circumstances vitiating his consent; or voyage basis. thus, their trade and business of Lynvil.
Second, it satisfactorily appears that the employer respective employment
and the employee dealt with each other on more or terminated after the end
less equal terms with no moral dominance exercised of each voyage (Yes)
by the former or the latter.

Article 280, xxx Provided, That any employee who has


rendered at least one year of service, whether such
service is continuous or broken, shall be considered a
regular employee with respect to the activity in
which he is employed and his employment shall
continue while such activity exists.

2. Sonza v. ABS CBN Broadcasting In determining whether there exist an employee- Whether or not Petitioner Petitioner Sonza, through MJMDC, demanded the rescission of
corp, June 10, 2004 employer relationship between the parties, the Court Sonza is an employee of the contract between Sonza and ABS CBN. The letter was
determined if the elements are present, namely: (a) the ABS-CBN. (No) signed by petitioner as the Company’s President. In the letter,
the selection and engagement of the employee; (b) Sonza stated that he is waiving and renouncing recovery of
the payment of wages; (c) the power of dismissal; the remaining amount stipulated in paragraph 7 of the
and (d) the employers power to control the Agreement but reserves the right to seek recovery of the other
employee on the means and methods by which the benefits under said Agreement. Later on, Sonza filed with the
work is accomplished Dept. of Labor and Employment a complaint for the payment
of wages, signing bonus, and other benefits. Respondent
responded that the Labor Arbiter is without jurisdiction as

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there exist no employee-employer relationship between the
parties.

3. Consolidated Broadcasting the "four-fold test" on employer-employee relations, whether or not Sometime in August 1998, petitioner reduced the number of its
Systems Inc. v. Oberio June 8, namely: (1) the selection and engagement of the respondents were drama productions from 14 to 11, but was opposed by
2007 employee, or the power to hire; (2) the payment of employees of petitioner respondents. After the negotiations failed, the latter sought
wages; (3) the power to dismiss; and (4) the power to was illegally dismissed the intervention of the DOLE, which results thereof revealed
control the employee. (yes) that petitioner is guilty of violation of labor standard laws.
Petitioner contended that respondents are not its employees.
Under Policy Instruction No. 40, Project or contractual
employees are required to be apprised of the project
they will undertake under a written contract. (Which
was not made)

The test to determine whether employment is regular


or not is the reasonable connection between the
particular activity performed by the employee in
relation to the usual business or trade of the
employer.

4. Orozco v. CA, August 13, 2008 The apparent limitation that she had to write only on Whether or not Orozco is In March 1990, Wilhelmina Orozco was hired as a writer by the
subjects that befitted the Lifestyle section did not an employee of the Philippine Daily Inquirer (PDI) and was the columnist of
translate to control, but was simply a logical newspaper which “Feminist Reflections” under the Lifestyle section of the
consequence of the fact that her column appeared publishes the column publication. She writes on a weekly basis and on a per article
in that section and therefore had to cater to the and was illegally basis (P250-300/article).In 1991, Leticia Magsanoc as the
preference of the readers of that section. Orozco in dismissed (No) editor-in-chief sought to improve the Lifestyle section of the
this case is considered as an independent paper. She said there were too many Lifestyle writers and that
contractor, one who often present themselves to it was time to reduce the number of writers. Orozco’s column
possess unique skills, expertise, or talent to distinguish was eventually dropped. Orozco filed for a case for Illegal
them from ordinary employees Dismissal

5. William Uy Construction Corp. v. test for distinguishing a project employee from a whether or not the CA The CA held that, although respondent Trinidad initially
Trinidad, March 10, 2010 regular employee is whether or not he has been correctly ruled that worked as a project employee, he should be deemed to
assigned to carry out a specific project or petitioner companys have acquired the status of a regular employee since
undertaking, with the duration and scope of his repeated rehiring of petitioner company repeatedly rehired him in its past 35
engagement specified at the time his service is respondent Trinidad over projects that lasted 16 years. The CA explained that Trinidads
contracted. Length of service provides a fair several years as project work as driver of the companys service vehicle, dump truck,
yardstick for determining when an employee initially employee for its various and transit mixer was vital, necessary, and indispensable to
hired on a temporary basis becomes a permanent projects automatically the companys construction business. The intervals between his
one, entitled to the security and benefits of entitled him to the status employment contracts were inconsequential since stoppage
regularization. But this standard will not be fair, if of a regular employee. in operations at the end of every construction project was a
applied to the construction industry, simply because foreseeable interruption of work.
construction firms cannot guarantee work and
funding for its payrolls beyond the life of each
project. And getting projects is not a matter of
course. Construction companies have no control
over the decisions and resources of project
proponents or owners. There is no construction
company that does not wish it has such control but
the reality, understood by construction workers, is

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that work depended on decisions and developments
over which construction companies have no say.

6. DM Consunji Inc. v. Jamin April The Court held that once a project or work pool Whether or not Jamin is Since his initial hiring, Jamins employment contract had been
18, 2012 employee has been: (1) continuously, as opposed to considered regular renewed a number of times. His work at DMCI was terminated
intermittently, rehired by the same employer for the employee. (Yes) due to the completion of the SM Manila project. This
same tasks or nature of tasks; and (2) these tasks are termination marked the end of his employment with DMCI as
vital, necessary and indispensable to the usual he was not rehired again. Jamin filed a complaint for illegal
business or trade of the employer, then the dismissal, with several money claims and alleged that DMCI
employee must be deemed a regular employee. terminated his employment without a just and authorized
cause. DMCI denied liability

7. Aro et. al. v. NLRC March 7, Article 280. Regular and Casual Employment − The Whether petitioner were The said corporation dismissed herein employees and
2012 provisions of written agreement to the contrary project employees and petitioners from their post without any valid reason which
notwithstanding and regardless of the oral only entitled to payment prompted the latter to file a complaint for illegal dismissal
agreement of the parties, an employment shall be of backwages until the praying for various money claims and damages against
deemed to be regular where the employee has date of the completion private respondent, Benthel Development Corporation.
been engaged to perform activities which are of the project or work.
usually necessary or desirable in the usual business or (Yes)
trade of the employer, except where the
employment has been fixed for a specific project or
undertaking the completion or termination of which
has been determined at the time of the
engagement of the employee or where the work or
service to be performed is seasonal in nature and the
employment is for the duration of the season.

8. Universal Robina Sugar Milling The period denominated in the contract of Whether or not Acibo, et Petitionner repeatedly hired these respondentsemployees to
Corp v. Acibo et. al, January 15, employment is not the basis in determining whether al. are regular perform the same duties and obligations. Acibo, et al. filed a
2014 (R. Seasonal Employees). an employee is seasonal or regular. Rather, the employees of Petitioner complaint before the LA complaints for regularization,
nature of the employment depends on the nature of being in such nature entitlement to the benefits under the existing Collective
the activities to be performed by the employee, (Yes) Bargaining Agreement (CBA) which weres denied because
considering the nature of the employer's business, the Whether or not they were seasonal/project employees since their respective
duration and scope to be done and, in some cases, Plantation workers or mill employments were coterminous with the phase of the work or
even the length of time of the performance and its employees only work on special project to which they were assigned and which
continued existence. seasonal basis does employments end upon the completion of each project.
exclude them from the
benefits of regularization.
(Yes)

9. GMA Network Inc. v. Pabriga, An employment shall be deemed to be regular Whether or not the Petitioner characterized respondents’ employment as project
November 27, 2013. where the employee has been engaged to perform respondents are regular and fixed period/fixed term employment.
activities which are usually necessary or desirable in or project employees. Respondents were engaged by petitioner GMA Network, Inc.
the usual business or trade of the employer. to perform the following activities: 1) manning of technical
operations center; 2) acting as transmitter/VTR men; 3) acting
as maintenance staff; 4) acting as cameramen.
These jobs and undertakings are clearly within the regular or
usual business of the employer company and are not
identifiably distinct or separate from the other undertakings of
the company.

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10. Pasas v. PNCC, July 3, 2013. Duration of project employment should be Whether or not Based on the PNCC’s “Personnel Action Form Appointment
determined at the time of hiring. While for first three employer’s failure to file for Project Employment”, petitioner was designated as “Clerk
months, petitioner can be considered a project termination reports after II (Accounting)” and was assigned to the “NAIA – II Project.”
employee of PNCC, his employment thereafter, every project completion However, his employment did not end on the expiration but
when his services were extended without any constitutes the regularity was extended until for more than two years. He was rehired,
specification of as to the duration, made him a of the project employee. his employment was extended, rehired, and finally, his project
regular employee of PNCC. And his status as a employment was terminated. However, his superior required
regular employee was not affected by the fact that him still to report. Upon the medical examination, he was
he was assigned to several other projects and there required by the doctor to take sick leave which he did. Upon
were intervals in between said projects since he his return after 74 days, he was informed that he was already
enjoys security of tenure. dismissed.

11. Gapayao v. Fulo, June 13, Farm workers may be considered regular seasonal Whether or not there Mr. Jaime Fulo was an employee of Jaime Gapayao as farm
2013 employees. Farm workers generally fall under the exists between the laborer from 1983 to 1997 and that Mr. Jaime Fulo receives
definition of seasonal employees. Court held that deceased Jaime Fulo compensation on a daily basis ranging from P5.00 to P60.00
seasonal employees may be considered as regular and Gapayao an from 1983 to 1997.As per interview, Mrs. Estela Gapayao
employees. Regular seasonal employees are those employer-employee contends that Jaime Fulo is an employee of Mr. & Mrs. Jaime
called to work from time to time. The nature of their relationship that would Gapayao on an extra basis. Jaime Fulo died of "acute renal
relationship with the employer is such that during the merit an award of failure secondary to 1st degree burn 70% secondary
off season, they are temporarily laid off; but benefits in favor of electrocution" while doing repairs at the residence and
reemployed during the summer season or when their Rosario Fulo under social business establishment of Gapayao. Gapayao extended
services may be needed. They are in regular security laws (Yes) some financial assistance to Rosario Fulo, the wife of the
employment because of the nature of their job,and deceased and the latter executed an Affidavit of Desistance
not because of the length of time they have worked. stating that she was not holding them liable for the death of
her late husband.Thereafter, private respondent filed a claim
for social security benefits with the Social Security System (SSS)
Sorsogon Branch. However, upon verification and evaluation,
it was discovered that the deceased was not a registered
member of the SSS

12. Millennium Erectors Corp. v. The repeated and continuing need for respondent’s Whether or not the there Magallanes filed an illegal dismissal complaint because he
Magallanes, November 15, 2010 services is sufficient evidence of the necessity, if not is illegal dismissal (Yes) was dismissed due to old age by Tiu, the CEO of respondent.
indispensability, of services to petitioner’s business Petitioner filed a position paper arguing that respondent was
and, as a regular employee, he could only be a project employee whom it hired for a building project in
dismissed from employment for a just or authorized Libis on January 30 2003 to prove which submitted the
cause. employment contract signed by him; that on August 3 2004
respondent’s services were terminated as the project was
nearing completion and he was given financial assistance in
the amount of P2000 for which he signed a quitclaim and
waiver.
The Labor Arbiter ruled in favor of petitioner, holding that
respondent knew of his status as project employee and that
the project was completed. On appeal to the NLRC, it held
that respondent was a regular employee and because of the
payrolls, it is evident that respondent was employed for 16
years. And because he performed the same functions
continuously for 16 years converted an otherwise casual
employment to regular employment, hence his termination
without just of authorized cause amounted to illegal dismissal.
Petitioner filed a motion for reconsideration which was
denied alleging that the MR which it treated as an appeal
was not perfected, it having been belatedly filed. The CA

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affirmed the stance, on appeal by petitioner.

13. Caparoso et. al. v. CA, Petitioners were not Illegally Dismissed from Whether respondents are Petitioners were dismissed from the service and subsequently
February 15, 2007 Employment Petitioners’ terms of employment is guilty of illegal dismissal. filed illegal dismissal complaint. Respondents alleged that
governed by their fixed-term contracts. Petitioners’ petitioners were both hired as deliverymen, initially for three
fixed-term employment contracts had expired. They months and then on a month-to-month basis and the
were not illegally dismissed from employment. termination from employment resulted from the expiration of
their contracts of employment on 8 October 1999. Labor
Arbiter - petitioners are regular employees of respondents
NLRC- Reversed LA decision CA- affirmed the NLRC’s decision.
The Court of Appeals held that respondents’ manpower
requirement varies from month to month depending on the
demand from their clients for their products. Respondents’
manpower requirement determines the period of their
employees’ services. Respondents employed petitioners for
the purpose of addressing a temporary manpower shortage.

14. Spouses Lim v. Legaspi Hope In University of Sto. Tomas v. NLRC, we ruled that for a Whether the teachers Petitioner-spouses Alwyn Ong Lim and Evelyn Lukang Lim were
Christian School et. al., March 31, private school teacher to acquire permanent status are Full time teachers, hired in June 1999. Alwyn was assigned to teach Mathematics
2009 in employment, the following requisites must concur: making them regular subjects in the high school department of Legazpi Hope
(1) the teacher is a full-time teacher; (2) the teacher employees, thus, ChristianSchool. Evelyn, on the other hand, was assigned to
must have rendered three consecutive years of dismissal is illegal. teach Chinese Language and Chinese Math subjects in the
service; and (3) such service must have been same school.
satisfactory. On April 4, 2002, respondent Helen Sia, head teacher of the
The burden is on petitioners to prove their affirmative schools Chinese department, verbally informed petitioners
allegation that they are permanent teaching that their employment with the school were to be terminated,
personnel. However, there is not enough evidence without giving the reasons therefor.Thus, petitioners filed their
on record to show that their total working day is complaints for illegal dismissal and monetary claims against
devoted to the school. There is no showing of what the school and its officials. respondent Ramon Sia, Vice
the regular work schedule of a regular teacher in Chairman of the schools Board of Directors, sent a letter to the
respondent school is. What is clear in the records is petitioners stating that their three-year probation had expired
that Evelyn and Alwyn spent two hours and four and that the school management had decided to
hours, respectively, but not the entire working day, at discontinue their employment.
the respondent school. They do not meet
requirement c of Section 45 of the Manual. Hence,
we sustain the findings of the Court of Appeals that
the petitioners are part-time teachers. Being part-
time teachers, in accordance with University of Sto.
Tomas v. NLRC, they cannot acquire permanent
status.

15. DM Consunji v. Gobres et. al, No. A project employee is defined under Article 280 whether or not there is a Respondents Antonio Gobres, Magellan Dalisay, Godoffredo
August 8, 2010 of the Labor Code as one whose "employment has need for Notice of Paragsa, Emilio Aleta and Generoso Melo worked as
been fixed for a specific project or undertaking the Dismissal in case of carpenters in the construction projects of petitioner D.M.
completion or termination of which has been project employees. Consunji, Inc., a construction company, on several occasions
determined at the time of the engagement of the and/or at various times.Their termination from employment for
employee or where the work or services to be each project was reported to the Department of Labor and
performed is seasonal in nature and the employment Employment (DOLE), in accordance with the Policy Instruction
is for the duration of the season.” Records show that o. 20, which was later superseded by Department Order No.
respondents were dismissed after the expiration of 19 series of 1993. Respondent’s last assignment was at Quad 4
their respective project employment contracts, and Project in Glorietta, Ayala, Makati. On October 14, 1998,

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due to the completion of the phases of work respondents were included in Notice of Termination posted
respondents were engaged for. Hence, the on the bulletin board at the project premises.
requirement of due process or prior notice when an Respondents filed a Complaint for illegal dismissal, and non-
employee is dismissed for just or authorized cause payment of 13th month pay, five (5) days service incentive
under Arts. 282 and 283 is not required. leave pay, damages and attorney’s fees against D.M.
Consunji and David M. Consunji with the Arbitration Branch of
the NLRC.
D.M. Consunji, Inc. and David M. Consunji countered the
respondents, being project employees, are covered by Policy
Instruction No. 20, as superseded by Department Order No.
19, series of 1993 with respect to their separation or dismissal.
Respondents were employed per project undertaken by
petitioner and within varying estimated periods indicated in
their respective project employment contracts.

16. Mercado et. al. v. Ama The Supreme Court granted the petition of the whether or not the lthe Yolanda Mercado, Charito de Leon, Diana Lachica,
Computer College, April 13, 2010 petitioners-teachers. teacher’s probationary Margarito Alba and Felix Tonog (the petitioners-teachers)
The existence of the term-to-term contracts covering status be disregarded were faculty members who started teaching at AMACC on
the petitioners-teachers’ employment is not disputed, simply because the May 1998. They executed individual Teacher’s Contracts for
nor it is disputed that they were on probationary contracts were fixed each of the trimesters that they were engaged to teach, with
status from the time they were employed on May term? the policy that they will take qualifying examinations and only
1998 and until the expiration of their teaching after passing such exam would they be maintained or
contracts on September 2000 retained to their position. Petitioners-teachers failed to obtain
The school apparently utilizes its fixed-term contracts a passing rating based on the performance standards; hence
as a convenient arrangement dictated by the AMACC did not give them any salary increase.
trimestral system and not because the parties really Because of AMACC’s action on the salary increases, the
intended to limit the period of their relationship to petitioners-teachers filed a complaint with the Arbitration
any fixed term and to finish this relationship at the Branch of the National Labor Relations Commission (NLRC) on
end of that term. While nothing is illegitimate in July 2000 for underpayment of wages, non-payment of
defining the school-teacher relationship in this overtime and overload compensation, 13th month pay, and
manner, the school, however, cannot forget that its for discriminatory practices.
system of fixed-term contract is a system that On September 2000, the petitioners-teachers individually
operates during the probationary period and for this received a memorandum from AMACC informing them that
reason, it is subject to the terms of Article 281 of the with the expiration of their contract to teach, their contract
Labor Code, which requires that the services of an would no longer be renewed.
employee who has been engaged on a Petitioners-teachers amended their labor arbitration
probationary basis may be terminated for a just complaint to include the charge of illegal dismissal against
cause or when he fails to qualify as a regular AMACC. Petitioners-teachers claimed that their dismissal was
employee. Unless this reconciliation is made, the illegal because it was made in retaliation for their complaint
requirement of Article of 281 of the Labor Code on for monetary benefits and discriminatory practices against
probationary status would be fully negated as the AMACC.
school may freely choose not to renew contracts
simply because their terms have expired.
If the school were to apply the probationary
standards (as in fact it says it did in the present case),
these standards must not only be reasonable but
must have also been communicated to the teachers
at the start of the probationary period, or at the very
least, at the start of the period when they were to be
applied. While AMACC claimed that the petitioners-
teachers failed to pass the PAST and other
requirements for regularization, the exact terms of the

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standards were never introduced as evidence;
neither does the evidence show how these standards
were applied to petitioners-teachers
Inevitably, the termination of employment of
employees on probationary status lacks the
supporting finding of just cause that the law requires
and, hence, illegal.

17. Brent School v. Zamora Yes. The employment contract between Brent School Whether or not the Alegre was hired as an athletic director by petitioner school.
and Alegre was executed at a time when the Labor expiration of the Their contract fixed a term of 5 years for his employment.
Code of the Philippines had not yet been contract of employment Three months before the expiration of the contract, petitioner
promulgated. At the time, there was no doubt is a just cause for the school terminated the employment of Alegre on the ground
whatever about the validity of term employment. It termination of Alegre? of completion of contract. The latter also accepted the full
was clearly recognized by the Termination Pay Law, payment of his services and signed a receipt therefor.
R.A. 1052, as amended by R.A. 1787. When the However, Alegre protested against his termination and
employment contract was signed between Brent contended that he acquired the status of a regular employee
School and Alegre, it was perfectly legitimate for and could not be removed except for a valid cause
them to include in it a stipulation fixing the duration
thereof.

18. Pure Foods Corporation v. The five-month period specified in private Whether or not Private respondents were hired by petitioner Pure Foods
NLRC December 12, 1997 respondents’ employment contracts having been employees hired for a Corporation to work for a fixed period of five months at its
imposed precisely to circumvent the constitutional definite period and tuna cannery plant in Tambler, General Santos City. After the
guarantee on security of tenure should, therefore, be whose services are expiration of their respective contracts of employment in June
struck down or disregarded as contrary to public necessary and desirable and July 1991, their services were terminated. They forthwith
policy or morals. To uphold the contractual in the usual business or executed a “release and Quitclam’ stating thay they had no
arrangement would in effect, permit the former to trade of the employer claim whatsoever against the petitioner. Private respondent
avoid hiring permanent or regular employees by are regular employees? file a complaint for Illegal dismissal against the petitioner and
simply hiring them on a temporary or casual basis, its plant manager, Marciano Aganon.
thereby violating the employees’ security of tenure in
their jobs.
The execution by the private respondents of a
“Release and Quitclaim” did not preclude them from
questioning the termination of their services.
Generally, quitclaims by laborers are frowned upon
as contrary to public policy and are held to be
ineffective to bar recovery for the full measure of the
workers’ rights. The reason for the rule is that the
employer and the employee do not stand on the
same footing.

Art. 292(b)of Labor Code (277[b]) - Management Prerogative

Title Doctrine Legal Issue Pertinent Facts

1. Zuellig Freight and Cargo A change in the corporate name does not make a Whether or not cessation San Miguel brought a complaint for unfair labor practice,
System v. NLRC, July 22, 2013. new corporation, whether effected by a special act of business by Zeta was a illegal dismissal, non-payment of salaries and moral damages
or under a general law. It has no effect on the closure to be regarded against petitioner, formerly known as Zeta Brokerage
identity of the corporation, or on its property, rights, or as a valid ground for the Corporation (Zeta). San Miguel contended that the
liabilities. The corporation, upon to change in its termination of amendments of the articles of incorporation of Zeta were for
name, is in no sense a new corporation, nor the employment of San the purpose of changing the corporate name, broadening

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successor of the original corporation. It is the same Miguel within the ambit the primary functions, and increasing the capital stock; and
corporation with a different name, and its character of Article 283. (No) that such amendments could not mean that Zeta had been
is in no respect changed. thereby dissolved.

2. Peckson v. Robinsons Yes. Under the doctrine of management prerogative, whether or not there is a Petitioner first joined the Robinsons Supermarket Corporation
Supermarket Corp. , July 3, 20134. every employer has the inherent right to regulate, valid application of the (RSC) as a Sales Clerk on November 3, 1987. On October 26,
according to his own discretion and judgment, all management 2006, she was holding the position of Category Buyer when
aspects of employment, including hiring, work prerogative in this case. respondent Roena Sarte (Sarte), RSC’s Assistant Vice-President
assignments, working methods, the time, place and for Merchandising, reassigned her to the position of Provincial
manner of work, work supervision, transfer of Coordinator, effective November 1, 2006.5 Claiming that her
employees, lay-off of workers, and discipline, new assignment was a demotion because it was non-
dismissal, and recall of employees. The only supervisory and clerical in nature, the petitioner refused to
limitations to the exercise of this prerogative are turn over her responsibilities to the new Category Buyer, or to
those imposed by labor laws and the principles of accept her new responsibilities as Provincial Coordinator.
equity and substantial justice.
In a memorandum to the petitioner dated November 13,
In the case at hand, petitioner was transferred to 2006,6 the RSC, through Sarte, demanded an explanation
another position not as a contrusctive dismissal but from her within 48 hours for her refusal to accept her new
because of the petitioner's tardiness which actually assignment despite written and verbal demands. The
affects her previous position. The management has petitioner ignored the 48-hour deadline to explain imposed by
the authority to evaluate the effectiveness of the Sarte.
employee and assign them to another position if
necesaary provided it follows certain limits on its In her one-paragraph reply submitted on November 27,
discretionary power. 2006,8 the petitioner stated that she could not accept the
position of Provincial Coordinator since she saw it as a
Thus, as further held in Philippine Japan Active demotion. As it turned out, however, on November 9, 2006,
Carbon Corporation,28 when the transfer of an the petitioner had already filed a complaint for constructive
employee is not unreasonable, or inconvenient, or dismissal against RSC, Sarte, Gadia and Alex (respondents)
prejudicial to him, and it does not involve a demotion
in rank or a diminution of his salaries, benefits and
other privileges, the employee may not complain
that it amounts to a constructive dismissal.

Art. 296 (281) of Labor Code - Probationary Employment

Title Doctrine Legal Issue Pertinent Facts

1. Tamson’s Enterprises Inc.et. al. Probationary employees may only be terminated for Whether or not the Private respondent was hired by petitioner as Assistant to the
v. CA, March 16, 2011 a just cause or when they otherwise fail to qualify as termination of private President. Four days before she completed her sixth month of
regular employees in accordance with reasonable respondent, a working for petitioner, she informed that her services would be
standards made known to them by the employer at probationary employee, terminated due to inefficiency. Private respondent claimed
the time of their engagement. was valid or not. (Not that the remarks of her superiors about her alleged
Valid) inefficiency were ill-motivated and made without any basis.
Petitioners asserted her work performance was monitored and
evaluated and she failed to meet the company's standards.
Private respondent filed a case for illegal dismissal.

2. Hacienda Primera A probationary employee or probationer is one who Whether or not the Respondent Michael S. Villegas was hired as a probationary
Development Corporation v. is on trial for an employer, during which the latter respondent was a employee for three (3) months. Respondent started working
Villegas, April 11, 2011 determines whether or not he is qualified for probationary employee for petitioner on January 1, 2007. On March 14, 2007, he

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permanent employment. The probationary or a regular employee at received a call from Paramount Consultancy and
employment is intended to afford the employer an the time of his dismissal. Management telling him to report back to Manila, learned
opportunity to observe the fitness of a probationary (Regular Employee) that his services were terminated and thus, asked for a written
employee while at work, and to ascertain whether notice of termination, but did not receive any. Petitioner
he will become an efficient and productive explained that respondent’s services were terminated
employee. While the employer observes the fitness, because he failed to qualify for regular employment. Hence,
propriety and efficiency of a probationer to ascertain the complaint for illegal dismissal.
whether he is qualified for permanent employment,
the probationer, on the other hand, seeks to prove to
the employer that he has the qualifications to meet
the reasonable standards for permanent
employment. It can be gleaned from the foregoing
provisions of law and jurisprudential pronouncement
that there are two grounds to legally terminate a
probationary employee. It may be done either: a) for
a just cause; or b) when the employee fails to qualify
as a regular employee in accordance with
reasonable standards made known by the employer
to the employee at the start of the employment.

3. Universidad De Sta. Isabel v. The services of an employee who has been engaged Whether or not After the aforesaid contract expired, petitioner continued to
Sambajon, April 2, 2014 on probationary basis may be terminated for any of Sambajon is a give teaching loads to Sambajon who remained a full-time
the following: (a) a just or (b) an authorized cause; permanent teacher and faculty member of the Department of Religious Education for
and (c) when he fails to qualify as a regular entitled to his the two semesters. He was likewise re-ranked from Assistant
employee in accordance with reasonable standards differentials. (Yes) Professor to Associate Professor. He argued that his salary
prescribed by the employer. In the case at bar, increase should be made effective as of June 2003 and
Sambajon was illegally dismissed. demanded the payment of his salary differential. The
petitioner replied that "Re-ranking is done every two years,
hence the personnel hold their present rank for two years.
Those undergoing probationary period and those on part-
time basis of employment are not covered by this provision.",
hence respondent is not entitled. On February 26, 2005,
respondent received his letter of termination. He filed for
illegal dismissal against petitioner.

4. Univac Development v. There is illegal dismissal. In order to invoke "failure to Whether or not Respondent was hired on August 23, 2004 by petitioner on
Soriano, June 19, 2013. meet the probationary standards" as a justification for respondent was illegally probationary basis as legal assistant of the company. On
dismissal, the employer must show how these dismissed. (Yes) February 15, 2005, or eight (8) days prior to the completion of
standards have been applied to the subject his six months probationary period, Castro allegedly informed
employee. No performance evaluation was him that he was being terminated from employment due to
conducted to prove that his performance was the company’s cost-cutting measures. He allegedly asked for
indeed unsatisfactory. a thirty-day notice but his termination was ordered to be
The power of the employer to terminate a effective immediately. Thus, he was left with no choice but to
probationary employee is subject to three limitations, leave the company. A Complaint for Illegal Dismissal was filed
namely: by respondent against petitioner.
(1) it must be exercised in accordance with the
specific requirements of the contract;
(2) the dissatisfaction on the part of the employer
must be real and in good faith, not feigned so as to
circumvent the contract or the law; and
(3) there must be no unlawful discrimination in the
dismissal.

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5. Abbott Laboratories v. Alcaraz, A probationary employee, like a regular employee, Whether Alcaraz was When the petitioner formally offered the position to the
July 23, 2013. enjoys security of tenure. However, in cases of validly terminated from respondent, the latter accepted the position. It was on May
probationary employment, aside from just or her employment. (Yes) 23, 2005 that Walsh, Almazar and Bernardo formally handed
authorized causes of termination, an additional to the respondent a letter terminating her employment with
ground is provided under Art. 295 of the Labor Code. the detailed explanation for her termination. The respondent
A different procedure is applied when terminating a then filed a complaint for illegal dismissal with damages.
probationary employee; the usual two-notice rule
does not govern. Section 2, Rule I, Book VI of the
Implementing Rules of the Labor Code states that “if
the termination is brought about by the failure of an
employee to meet the standards of the employer in
case of probationary employment, it shall be a
sufficient that a written notice is served the
employee, within a reasonable time from the
effective date of termination.”

6. Colegio de Santisimo Rosario v. Cases dealing with employment on probationary Whether or not Rojo has Sr. Zenaida S. Mofada, OP (Mofada), decided not to renew
Rojo, September 4, 2013. status of teaching personnel are not governed solely obtained a status of a respondent’s services. Respondent filed a Complaint for illegal
by the Labor Code as the law is supplemented, with regular employee upon dismissal and alleged that since he had served three
respect to the period of probation, by special rules the completion of a 3- consecutive school years which is the maximum number of
found in the Manual of Regulations for Private year probationary terms allowed for probationary employment, he should be
Schools (the Manual). With regard to the period. (Yes) extended permanent employment.
probationary period, Section 92 of the 1992 Manual
provides: "Section 92. Probationary Period. – Subject
in all instances to compliance with the Department
and school requirements, the probationary period for
academic personnel shall not be more than three (3)
consecutive years of satisfactory service for those in
the elementary and secondary levels, six (6)
consecutive regular semesters of satisfactory service
for those in the tertiary level, and nine (9)
consecutive trimesters of satisfactory service for those
in the tertiary level where collegiate courses are
offered on a trimester basis." That teachers on
probationary employment also enjoy the protection
afforded by Article 281 of the Labor Code is
supported by Section 93 of the 1992 Manual.

Cagayan Capitol College v. National Labor Relations


Commission, it held that respondent has satisfied all
the requirements necessary to acquire permanent
employment and security of tenure viz:
1. The teacher is a full-time teacher;
2. The teacher must have rendered three (3)
consecutive years of service; and
3. Such service must be satisfactory.

7. Tamson’s Enterprises Inc.et. al. Even if probationary employees do not enjoy Whether or not the Sy was hired by Tamsons as Assistant to the President. Four
v. CA, March 16, 2011 permanent status, they are accorded the termination of Sy, a days before she completed her 6 month, Sy was informed
constitutional protection of security of tenure. They probationary employee, that her services would be terminated due to inefficiency.
may only be terminated for a just cause or when they was valid. (Yes)
otherwise fail to qualify as regular employees in

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accordance with reasonable standards made
known to them by the employer at the time of their
engagement. One of the conditions before an
employer can terminate a probationary employee is
dissatisfaction on the part of the employer which
must be real and in good faith, not feigned so as to
circumvent the contract or the law. Here, absent any
proof showing that the work performance of
petitioner was unsatisfactory, We cannot conclude
that petitioner failed to meet the standards. This
absence of proof leads Us to infer that their
dissatisfaction with her work performance was
contrived so as not to regularize her employment.
Where no standards are made known to the
employee at that time, he shall be deemed a regular
employee. Termination, written notice is required

8. Hacienda Primera There are two grounds to legally terminate a Whether or not He was hired as a probationary employee for three (3)
Development Corporation v. probationary employee. It may be done either: a) for respondent is illegally months. Respondent started working for petitioner on January
Villegas, April 11, 2011 a just cause; or b) when the employee fails to qualify dismissed as a 1, 2007. On March 14, 2007, he received a call from
as a regular employee in accordance with probationary employee Paramount Consultancy and Management telling him to
reasonable standards made known by the employer (Yes) report back to Manila, learned that his services were
to the employee at the start of the employment. terminated and asked for a written notice of termination, but
did not receive any. Hence, the complaint for illegal dismissal.
Hacienda stated that respondent was hired as probationary
employee and his services were terminated because he
failed to qualify for regular employment.

9. Aliling v. World Express Corp. As a rule to effect a legal dismissal the employer must Whether or not Aliling Respondent to advise Aliling of the termination of his services
April 25, 2012 show not only a valid ground therefor but also was illegally terminated effective as of that date owing to his “non-satisfactory
procedural due process should properly be by reason of violation of performance”.
observed. When the Labor Code speaks of due process Here, the first and second notice requirements have not been
procedural due process, the reference is usually to requirement. properly observed, thus tainting petitioner’s dismissal with
the two(2) notice rule, envisaged in Section 2 (III), illegality.
Rule XXIII, Book V of the Omnibus Rules of
Implementing the Labor Code which provides:
“Section 2. Standard of due process:requirements of
notice

I. For termination of Employment base on just causes


as defined in Article 282 of the Code:(a) A written
notice served on the employee specifying the
ground or grounds of termination, and giving the said
employee reasonable opportunity to explain his side;
(b) A hearing or conference during which the
employee concerned, with the assistance of counsel
if the employee so desires, is given the opportunity to
respond to the charge, present his evidence or rebut
the evidence presented against him; and
(c) A written notice [of] termination served on the
employee indicating that upon due consideration of
all the circumstance, grounds have been established

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to justify his termination.

10. Phil. Daily Inquirer v. Magtibay, Whereas a regular employee is typically entitled to Whether or not a Magtibay then filed a complaint for illegal dismissal before the
July 24, 2007 the two-notice requirement for his employment to be probationary employees’ Labor Arbiter stating tha the has now become a regular
terminated due to just cause, the process is different failure to follow employee by working for more than 6 months. The PDI union
in the case of a probationary employee dismissed company standards is supported him stating unfair labor practice. Saying that he did
because of his failure to qualify as a regular ground for illegal not know he was supposed to follow company standards and
employee in accordance with reasonable standards dismissal. that he was not given due process in his termination.
made known to him at the time of engagement.
Due process of law for this second ground consists of
making the reasonable standards expected of the
employee during his probationary period known to
him at the time of his probationary employment. By
the very nature of a probationary employment, the
employee knows from the very start that he will be
under close observation and his performance of his
assigned duties and functions would be under
continuous scrutiny by his superiors. It is in apprising
him of the standards against which his performance
shall be continuously assessed where due process
regarding the second ground lies, and not in notice
and hearing as in the case of the first ground.

11. Alcira v. NLRC, June 9, 2004 It was held that respondent Middleby substantially WON petitioner is a On November 20, 1996, unhappy with petitioner’s
notified petitioner of the standards to qualify as a regular employee at the performance, respondent Midde by terminated the former’s
regular employee when it apprised him, at the start time of his severance services. But according to the petitioner he is already a
from employment. regular employee effective November 16,1996, using Article
of his employment, that it would evaluate his
13 of the Civil Code that one month is composed of 30 days,
supervisory skills after five months. Conversely, an six months total 180 days. Hence, using May 20, 1996 as the
employer is deemed to substantially comply with the reference point, it was already considered a dismissal since it
rule on notification of standards if he apprises the was made after the lapse of his probationary employment.
employee that he will be subjected to a The labor arbiter dismissed the complaint on the ground that:
performance evaluation on a particular date after (1) respondents were able to prove that petitioner was
his hiring. The labor arbiter when he ruled that in the apprised of the standards for becoming a regular employee;
(2) respondent Mamaradlo's affidavit showed that petitioner
instant case, petitioner cannot successfully say that
"did not perform well in his assigned work and his attitude was
he was never informed by private respondent of the below par compared to the company's standard required of
standards that he must satisfy in order to be him" and (3) petitioner's dismissal on November 20, 1996 was
converted into regular status. This runs counter to the before his "regularization," considering that, counting from
agreement between the parties that after five May 20, 1996, the six-month probationary period ended on
months of service the petitioner’s performance would November 20, 1996.
be evaluated. It is only but natural that the
evaluation should be made vis-à-vis the
performance standards for the job.

12. Mercado v. Ama Computer The school apparently utilizes its fixed-term contracts WON teachers’ Petitioners-teachers amended their labor arbitration
College (Probi status of fixed term as a convenient arrangement dictated by the probationary status can complaint to include the charge of illegal dismissal against
employees) trimestral system and not because the parties really be disregarded simply AMACC. Petitioners-teachers claimed that their dismissal was
intended to limit the period of their relationship to because the contracts illegal because it was made in retaliation for their complaint
any fixed term and to finish this relationship at the were fixed-term. for monetary benefits and discriminatory practices against

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end of that term. While nothing is illegitimate in AMACC. In response, AMACC contended that the petitioners-
defining the school-teacher relationship in this teachers worked under a contracted term under a non-
manner, the school, however, cannot forget that its tenured appointment and were still within the three-year
system of fixed-term contract is a system that probationary period for teachers. Their contracts were not
operates during the probationary period and for this renewed for the following term because they failed to pass
reason, it is subject to the terms of Article 281 of the the Performance Appraisal System for Teachers (PAST). This
Labor Code, which requires that the services of an move was justified according to AMACC since the school has
employee who has been engaged on a to maintain its high academic standards.
probationary basis may be terminated for a just
cause or when he fails to qualify as a regular
employee. Unless this reconciliation is made, the
requirement of Article of 281 of the Labor Code on
probationary status would be fully negated as the
school may freely choose not to renew contracts
simply because their terms have expired.
If the school were to apply the probationary
standards (as in fact it says it did in the present case),
these standards must not only be reasonable but
must have also been communicated to the teachers
at the start of the probationary period, or at the very
least, at the start of the period when they were to be
applied. While AMACC claimed that the petitioners-
teachers failed to pass the PAST and other
requirements for regularization, the exact terms of the
standards were never introduced as evidence;
neither does the evidence show how these standards
were applied to petitioners-teachers Inevitably, the
termination of employment of employees on
probationary status lacks the supporting finding of
just cause that the law requires and, hence, illegal.

Art. 297 (282) of Labor Code - Termination by Employer

Title Doctrine Legal Issue Pertinent Facts

1. Concepcion v. Minex Import “The employer is not expected to be as strict and Whether or not, there Respondent Minex is engaged in the retail of semi-precious
Corporation, January 24, 2012 rigorous as a judge in a criminal trial in weighing all was just cause for the stones, selling them in kiosks or stalls installed in various
the probabilities of guilt before terminating the dismissal of the shopping centers within Metro Manila. It employed the
employee. The quantum of proof required for employee - Yes petitioner initially as a salesgirl, rotating her assignment among
convicting an accused is thus higher – proof of guilt nearly all its outlets. Later on a total of P50,912.00 was missing
beyond reasonable doubt – than the quantum from the cabinet of the said kiosk and was then charged with
prescribed for dismissing an employee – substantial qualified theft by Minex and was eventually dismissed.
evidence.”
“It is also unfair to require an employer to first be
morally certain of the guilt of the employee by
awaiting a conviction before terminating him when
there is already sufficient showing of the wrongdoing.
Requiring that certainty may prove too late for the
employer, whose loss may potentially be beyond
repair”

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2. Dreamland Hotel and Resort v. An Australian national was illegally dismissed as hotel
Johnson, March 12, 2014 manager and ordered payment of full back wages.
Separation pay was also directed to be paid instead
of reinstatement because the strained relations
between the parties prevented bringing the
manager back to work. Here, the Court held that
multiple and repeated refusal to pay one's personnel
his salaries is equivalent to dismissal from
employment. Even expats here have access to our
courts for redress of grievances.

3. Grand Asian Shipping Lines In termination, Rank-and-file employees require proof Whether or not Respondents filed with the NLRC separate complaint for illegal
Inc., v. Galvez, January 29, 2014 of involvement while managerial employees mere respondents were suspension and dismissal, underpayment/nonpayment of
existence of a basis for belief is sufficient. Given that illegally dismissed salaries/wages, overtime pay, premium pay for holiday and
Galvez and Gruta have managerial positions there is rest day, service incentive pay, tax refunds and indemnities for
some basis for the loss of employer’s confidence— damages and attorney’s fees against petitioner due to an
regarding the overstatement of fuel consumption alleged illegal activity being committed by respondent who
without any evidence to the contrary. The employer would misdeclare the consume fuel in the Engineer’s Voyage
bears the burden of proof in illegal dismissal cases Reports and the save fuel oil were sold to other vessel out at
thus the employer must first establish by substantial sea (at nighttime). Acting upon the anomaly, GASLI placed
evidence the fact of dismissal. respondents under preventive suspension and after
conducting administrative hearings decided to terminate
them for breach of trust, commission of crime against
employer.

4. Mirant Phil. Corp. v. Caro, April Managerial prerogatives are subject to limitations Whether or not there was Respondent was hired by Mirant Pagbilao as Logistics Officer
23, 2014 provided by law, collective bargaining agreements, illegal dismissal in the in 1994 rose to the ranks of Procurement Supervisor. Petitioner
and the general principles of fair play and justice. In case at bar? corporation alleged that respondent was dismissed because
the exercise of its management prerogatives, an he was randomly selected among the employees to undergo
employer must therefore ensure that the policies, a drug test which the latter “unjustifiedly refused.”
rules, and regulations on work-related activities of the Respondent alleged that he was illegally dismissed by
employees must always be fair and reasonable and petitioner corporation due to the latter’s non-compliance
the corresponding penalties , when prescribed, with the twin requirements of notice and hearing.
commensurate to the offense involved and the
degree of the infraction.

5. Bluer than blue Joint Ventures "It is not the job title but the actual work that the Whether or not, there Esteban was employed as Sales Clerk, and assigned at Bluer
Co. v. Esteban, April 7, 2014. employee performs that determines whether he or was a valid illegal Than Blue Joint Ventures Company's boutique in SM City
she occupies a position of trust and confidence." dismissal? Marilao, Bulacan, beginning the year 2006. Part of her primary
tasks were attending to all customer needs, ensuring efficient
inventory, coordinating orders from clients, cashiering and
reporting to the accounting department. Then petitioner
received a report that several employees have access to its
point-of-sale (POS) system through a universal password given
by Elmer Flores (Flores). Upon investigation, it was discovered
that it was Esteban who gave Flores the password.

6. Manila Jockey Club v. Trajano, The error of an employee in the cancellation of the Whether or not, her MJCI had employed Trajano as a selling teller of betting

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June 26, 2013. ticket was an honest mistake that did not constitute a mistake amounts to tickets. On April 25, 1998, she accidentally canceled a bet. To
serious misconduct or willful disobedience of the justifiable causes for her complicate things, it was also the same bet that had won the
lawful orders of her employer; that such cancellation termination. race. At that point, she realized her mistake, and explained to
did not amount to a gross and habitual neglect of the second bettor that the cancellation of his ticket had not
duty because her mistake was only her first offense in been intentional, but the result of an honest mistake on her
the nine years of service to MJCI; and that MJCI part.
sustained no damage.

7. Hormillosa v. Coca Cola, In labor cases, substantial evidence or such relevant Whether or not, Hormillosa was employed as a route salesman by Coca-Cola
October 9, 2013. evidence as a reasonable mind might accept as Termination is valid. Bottlers Phils., Inc. (CBPI).Due to their delicate position, route
sufficient to support a conclusion is required. It is clear salesmen, like Hormillosa, were given a handbook entitled,
that Article 282(c) of the Labor Code allows an CCBPI Employee Code of Disciplinary Rules and Regulations.
employer to terminate the services of an employee CBPI District Sales Supervisor, Raul S. Tiosayco III (Tiosayco),
for loss of trust and confidence. conducted a verification and audit of the accounts handled
The first requisite for dismissal on the ground of loss of by Hormillosa. He discovered transactions in violation of CCBPI
trust and confidence is that the employee Employee Code of Disciplinary Rules and Regulations,
concerned must be one holding a position of trust specifically "Fictitious sales transactions.
and confidence. Verily, We must first determine if
respondent holds such a position. The second
requisite is that there must be an act that would
justify the loss of trust and confidence. Loss of trust
and confidence to be a valid cause for dismissal
must be based on a willful breach of trust and
founded on clearly established facts. The basis for the
dismissal must be clearly and convincingly
established but proof beyond reasonable doubt is
not necessary.

There are two (2) classes of positions of trust.


1. The first class consists of managerial
employees. They are defined as those vested with
the powers or prerogatives to lay down
management policies and to hire, transfer suspend,
lay-off, recall, discharge, assign or discipline
employees or effectively recommend such
managerial actions.
2. The second class consists of cashiers,
auditors, property custodians, etc. They are defined
as those who in the normal and routine exercise of
their functions, regularly handle significant amounts
of money or property.

8. Chuanico v. Legacy To be a valid cause of dismissal, the loss of trust must Whether or not Atty. Legacy Consolidated hired petitioner Chuanico as Assistant
Consolidated Plans, October 9, be based on a willful breach of such trust and Chuanico was illegally Vice-President for legal services. He served as in-house
2013. founded on clearly established facts. dismissed for mishandling counsel for the company and its subsidiaries under the
the cases assigned to supervision of Atty. Cruz, the Senior Vice-President for Legal
him Affairs wherein the latter wrote Atty. Chuanico a
memorandum, requiring him to explain why no administrative
action should be taken against him for mishandling two cases.
Respondent then dismissed Atty. Chuanico for serious

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misconduct, willful disobedience to lawful orders, gross
habitual neglect, and willful breach of trust. This prompted
him to file a complaint for illegal dismissal.

9. Duncan Association of Glaxo has a right to protect its trade secrets. The Whether or not the policy Tecson, medical representative, signed Contract of
Detailman-PGTWO v. Glaxo prohibition against personal or marital relationships of pharmaceutical employment signed by Tecson stipulates to disclose to
Welcome Phils, September 17, with employees of competitor companies upon companies prohibiting its management any existing future relationship by consanguinity
2004 Glaxos employee is reasonable under the employees from or affinity with co-employees with competing drug companies
circumstances because relationships of that nature marrying employees of and should management finds that such relationship poses a
might compromise the interest of the company. That any competitor possible conflict of interest to resign from the company and
Glaxo possesses the right to protect its economic company is valid.(Yes) that management may transfer the employee to another
interest cannot be denied. department in a non-counterchecking position or preparation
The challenged policy has been implemented by for employment outside of the company after 6 months.
Glaxo impartially and disinterestedly for a long time. Tecson was initially assigned in the Camarines Sur
In the case at bar, the record shows that Glaxo gave Camarines Norte and entered into a romantic relationship
Tecson several chances to eliminate the conflict of with Betsy, an employee of Astra. Before getting married,
interest brought about by his relationship with Betsy, Tecson District Manager, reminded him several times of the
but he never availed of any of them. conflict of interest. Glaxo transferred Tecson to the Butuan
Surigao City-Agusan Del Sur sales area.

10. Star Paper Corporation et al. There must be a compelling business necessity for Whether or not the Prior to the marriage, Josephine Ongsitco informed them of
v. Simbol, April 12, 2006 which no alternative exists other than the company policy is a the company policy which required that one of them should
discriminatory practice. To justify a bona fide valid cause for the resign from work if they decided to get married. Respondent
occupational qualification, the employer must prove dismissal of its resigned pursuant to the policy. However, the version of the
two factors: employees? (No) respondents stated that they did not resign voluntarily; they
(1) that the employment qualification is reasonably were compelled to resign in view of an illegal company
related to the essential operation of the job involved; policy.
and
(2) that there is a factual basis for believing that all or
substantially all persons meeting the qualification
would be unable to properly perform the duties of
the job.

11. Ace Promotion and Marketing In dismissing an employee, the employer has the Whether there exists a Petitioner Ace Promotion hired respondent Reynaldo Ursabia
Corp. v. Ursabia, September 22, burden of proving that the former worker has been just cause to dismiss as a company driver assigned to pick up the products of
2006 served two notices: (1) one to apprise him of the respondent and whether Nestle Philippines, Inc., for promotion and marketing.
particular acts or omissions for which his dismissal is he was accorded due On July 6, 2001, respondent failed to report for work.
sought, and (2) the other to inform him of his process Petitioner, through its area supervisor, Gerry Garcia, issued a
employers decision to dismiss him. The first notice Memorandum. Ursabia was asked to explain in writing within
must state that dismissal is sought for the act or 24 hours why no disciplinary measure be taken against him
omission charged against the employee, otherwise, from r violation of company rules. He was personally served
the notice cannot be considered sufficient with the memorandum but refused to acknowledge the
compliance with the rules. same, hence, it was sent through registered mail to
To be validly dismissed on the ground of willful respondent’s last known address. The following day, Garcia
disobedience requires the concurrence of at least noticed some damage on the vehicle assigned to
two requisites: (1) the employees assailed conduct respondent, hence, he issued another Memorandum.
must have been willful or intentional, the willfulness Sometime in July 2001, an anonymous note was discovered
being characterized by a wrongful and perverse among the stocks of petitioner containing the words "(Good
attitude; and (2) the order violated must have been news) be careful and save youre (sic) life because there's a
reasonable, lawful, made known to the employee time to come everybody x x x will die." Upon examination of

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and must pertain to the duties which he had been PNP crime lab, it allegedly showed that the handwriting of
engaged to discharge respondent has significant similarities with the handwritten
note.

12. Concepcion v. Minex Import The fair and reasonable opportunity required to be Whether or not while the petitioner was giving a detailed statement on the
Corporation, January 24, 2012 given to the employee before dismissal petitioners dismissal is theft to the security investigator of Harrison Plaza, Vina and
encompassed not only the giving to the employee of illegal (Court of Appeals Sylvia Mariano, her superiors, arrived with a policeman who
notice of the cause and the ability of the employee decision is sustained.) immediately placed the petitioner under arrest and brought
to explain, but also the chance to defend against her to Precinct 9 of the Malate Police Station.
the accusation.
CA sustained NLRC declaring that the petitioner had not
PLDT vs. NLRC held that the acquittal of the been dismissed, but had abandoned her job after being
employee from the criminal prosecution for a crime found to have stolen the proceeds of the sales and her
committed against the interest of the employer did dismissal would be justifiable for loss of trust and confidence in
not automatically eliminate loss of confidence as a the light of the finding of probable cause by the DOJ and the
basis for administrative action against the employee; City Prosecutor and the filing of the information for qualified
and that in cases where the acts of misconduct theft against her.
amounted to a crime, a dismissal might still be
properly ordered notwithstanding that the employee
was not criminally prosecuted or was acquitted after
a criminal prosecution.

13. St. Lukes Medical Center Inc. v A single or isolated act of negligence that cannot be Whether or not On December 30, 1996, respondent was on duty from 6:00
Notario October 20, 2010 categorized as habitual and, hence, not a just cause respondent was guilty of p.m. to 6:00 a.m. Hiswork consisted mainly of monitoring the
for his dismissal. gross negligence which video cameras. Justin Tibon reported about the loss of his
warrants his dismissal. bag. The Security Department of petitioner hospital
conducted an investigation. When the tapes of VCR covering
the subject period were reviewed, the cameras failed to
record the incident. Finding the written explanation of
respondent to be unsatisfactory, respondent was served a
copy of the Notice of Termination, dismissing him on the
ground of gross negligence/inefficiency under Section 1, Rule
VII of its Code of Discipline.

14. The Coca-Cola Export When the breach of trust or loss of confidence WON respondent’s Respondent Clarita P. Gacayan was holding the position of
Corporation v. Gacayan, theorized upon is not borne by clearly established repeated submission of Senior Financial Accountant of petitioner when she was
December 15, 2010 facts, such dismissal on the ground of loss and altered or tampered dismissed for alleged loss of trust and company. Petitioner sent
confidence cannot be countenanced. receipts to support her respondent a memorandum inviting her to a hearing and
In order to constitute serious misconduct which will claim for reimbursement formal investigation, to give her an opportunity to explain the
warrant the dismissal of an employee, it is not constitutes a betrayal of issues against her. Respondent was also advised that she was
sufficient that the act or conduct complained of has the employer’s trust and free to bring along a counsel of her choice. At said hearing,
violated some established rules or policies. It is confidence and a she was extensively questioned regarding the alterations of
equally important and required that the act or serious misconduct, thus, the receipts. Petitioner sent another notice to respondent
conduct must have been with wrongful intent. giving cause for the informing her of the re-setting of the continuation of the
termination Of her formal investigation advising her that it would be her last
employment . opportunity to fully explain her side. However, respondent did
not attend.

15. Domingo v. Rayala, February hairman of the NLRC shall hold office during good whether Rayala was Petitioner then Stenographic Reporter III at the NLRC, filed a
18, 2008 behavior until he or she reaches the age of sixty-five, validly dismissed Complaint for sexual harassment against Rayala before
unless sooner removed for cause as provided by law Secretary Bienvenido Laguesma of the Department of Labor
and Employment (DOLE).The committee constituted found

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Rayala guilty of the offense charged. Secretary Laguesma
submitted a copy of the Committee Report and
Recommendation to the OP, but with the recommendation
that the penalty should be suspended for 6 mos. The NLRC
ordered that Rayala be dismissed from service.

16. Phil. Aeolus Auto Motive On serious misconduct warranting dismissal of an Whether or not private a memorandum was issued by Ms. Myrna Palomares,
United Corp. v. NLRC, April 28, employee, has ruled that for misconduct or improper respondent was legally Personnel Manager of petitioner corporation, addressed to
2000 behavior to be a just cause for dismissal (a) it must be terminated by petitioner private respondent Rosalinda C. Cortez requiring her to
serious; (b) must relate to the performance of the explain within 48 hours why no disciplinary action should be
employee’s duties; and, (c) must show that the taken against her (a) for throwing a stapler at Plant Manager
employee has become unfit to continue working for William Chua, her superior, and uttering invectives against
the employer. him; (b) for losing the amount of P1,488.00 entrusted to her by
Plant Manager Chua to be given to Mr. Fang of the CLMC
Department; and, (c) for asking a co-employee to punch-in
her time card thus making it appear that she was in the office
when in fact she was not. The memorandum however was
refused by private respondent although it was read to her
and discussed with her by a co-employee. She did not also
submit the required explanation, so that while her case was
pending investigation the company placed her under
preventive suspension for 30 days. Private respondent then
filed with the LA a complaint for illegal dismissal, non-payment
of annual service incentive leave and 13th month pay. LA
held that Cortez was validly and legally terminated. On
appeal, NLRC reversed LA decision and ordered petitioner to
be reinstated, hence this petition.

17. Pharmacia and Upjohn Inc. v. In termination proceedings of employees, procedural whether or not Pursuant to a Memorendum announcing the sales force
Albayda Jr., August 23, 2010 due process consists of the twin requirements of respondent was validly structure for the year 2000, respondent was reassigned as
notice and hearing. The employer must furnish the dismissed District Sales Manager to District XII in the Northern Mindanao
employee with two written notices before the area. One of the key areas covered in District XII is Cagayan
termination of employment can be effected: (1) the de Oro City. Respondent opposed the reassignment in a
first apprises the employee of the particular acts or letter to Pharmacia’s Vice-President for Sales and Marketing
omissions for which his dismissal is sought; and (2) the and in a subsequent letter to Pharmacia’s National Sales and
second informs the employee of the employer’s External Business Manager because of inconvenience and
decision to dismiss him. The requirement of a hearing dislocation from his family. However the same was denied
is complied with as long as there was an opportunity explaining their need of respondent’s expertise to build the
to be heard, and not necessarily that an actual business in Cagayan de Oro.Montilla sent respondent a
hearing was conducted memorandum notifying him of their decision to terminate his
services after he repeatedly refused to report for work despite
due notice on the basis of AWOL and insubordination
pursuant art 282 of the Labor Code. Respondent filed a
Complaint for constructive dismissal. LA dismissed the case.
NLRC dismissed the appeal. CA rendered a Decision ruling in
favor of respondent.

18. Jerusalem v. Hock et. al., April For breach of trust and confidence to become a whether or not the James Ben L. Jerusalem (James) was employed by Keppel
6, 2011 valid ground for the dismissal of an employee, the dismissal was valid Monte Bank (Keppel) as Assistant Vice-President. He was
cause of loss of trust and confidence must be related Reno Foods assigned as Head of the newly created VISA Credit Card
to the performance of the employee’s duties. Department. James received a Notice to Explain from
Keppel’s Vice President for Operations, Sunny Yap (Sunny),

34 | L A B O R RELATI ONS 3E Case Matrix SY 16-17 FINALS MODE


why no disciplinary action should be taken against him for
referring/endorsing fictitious VISA card applicants. James
submitted his written explanation to Sunny.Manager for
Human Resources Department, handed to James a Notice of
Termination informing the latter that he was found guilty of
breach of trust and confidence for knowingly and maliciously
referring, endorsing and vouching for VISA card applicants
who later turned to be imposter.

19. Reno Foods Inc. v. NLM- There is no legal or equitable justification for Whether or not Capor is Petitioners accorded Capor several opportunities to explain
Katipunan, March 15, 2010 awarding financial assistance to an employee who entitled to Financial her side, often with the assistance of the union officers of
was dismissed for stealing company property. Social assistance Nagkakaisang Lakas ng Manggagawa (NLM) – Katipunan. In
justice and equity are not magical formulas to erase fact, after petitioners sent a Notice of Termination to Capor,
the unjust acts committed by the employee against she was given yet another opportunity for reconsideration
his employer. While compassion for the poor is through a labor-management grievance conference held on
desirable, it is not meant to coddle those who are November 17, 1999. Unfortunately, petitioners did not find
unworthy of consideration. reason to its earlier decision to terminate Capor because the
guard on duty found six Reno canned goods wrapped in
nylon leggings inside Capor’s fabric clutch bag.

20. La Rosa et. al. v. Ambassador Constructive dismissal occurs when there is cessation Whether or not La Rosa Petitioners Fe La Rosa, Ofelia Velez, Cely Domingo, Jona
Hotel, March 13, 2009 of work because continued employment is rendered et al. were constructively Natividad and Edgar De Leon (La Rosa, et al.), were
impossible, unreasonable or unlikely; when there is a dismissed employees of respondent Ambassador Hotel. La Rosa, et al.
demotion in rank or diminution in pay or both; or filed before the National Labor Relations Commission (NLRC)
when a clear discrimination, insensibility, or disdain by several complaints for illegal dismissal, illegal suspension, and
an employer because unbearable to the employee. illegal deductions against the hotel and its manager. La Rosa,
et al. alleged that after filing their complaints with the
Department of Labor, the latter inspected the hotel’s
premises. The hotel was thereafter found to have been
violating labor standards laws. Consequently, after such
incident, the management of the hotel retaliated by
suspending and/or constructively dismissing them by
drastically reducing their work days through the adoption of a
work reduction/rotation scheme. The hotel however
countered that such reduction/rotation scheme was an
exercise of its prerogative management due to business
losses.

21. Maribago Resort v. Dual, July Theft committed by an employee is a valid reason for Whether or not the court In view of the discrepancy between the order slip and the
20, 2010 (Serious M) his dismissal by the employer. Although as a rule this of appeals committed a receipt issued, petitioner Maribago, (HRD) manager issued
Court leans over backwards to help workers and grave and reversible memoranda, requiring respondent to explain why they
employees continue with their employment or to error in reversing the should not be penalized for violating House Rule 4.1
mitigate the penalties imposed on them, acts of NLRC and directing (dishonesty in any nature). The respondents were requested to
dishonesty in the handling of company property, petitioner to pay attend a clarificatory hearing where Dual and Alcoseba were
petitioner's income in this case, are a different respondent full proven in connivance to alter the receipt. Dual filed a
matter. In Agabon v. National Labor Relations backwages complaint for unfair labor practice, illegal dismissal and other
Commission ruled that violation of the employee's Labstand.
statutory right to due process makes the employer
liable to pay indemnity in the form of nominal
damages.

22. Century Canning Corp. v. The law mandates that the burden of proving the Whether or not Mere Respondent prepared a Capital Expenditure (CAPEX) form for

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Ramil, August 8, 2010 (Loss of trust validity of the termination of employment rests with existence of a basis for external fax modems and terminal server. However, CAPEX
and Confidence) the employer. Failure to discharge this evidentiary believing that such did not have the complete details and some required
burden would necessarily mean that the dismissal employee has breached signatures. Paz processed the paper and found that some
was not justified and, therefore, illegal. the trust and confidence details in the CAPEX form were left blank. She also doubted
Unsubstantiated suspicions, accusations, and of his employer suffices the genuineness of the signature of Po, as appearing in the
conclusions of employers do not provide for legal for his dismissal. form which transmitted to Garcia and informed her of the
justification for dismissing employees. In case of questionable signature of Po. The request for the equipment
doubt, such cases should be resolved in favor of was put on hold due to Po's forged signature. Due to the
labor, pursuant to the social justice policy of labor urgency of purchasing badly needed equipment, respondent
laws and the Constitution. was ordered to make another CAPEX form. Ramil vehemently
denied the alleged forgery. Respondent was suspended and
received a Notice of Termination for loss of trust and
confidence. Respondent filed a Complaint for illegal dismissal
and other labstand.

23. Tongko v. The Manufacturer’s It is the employer’s prerogative to prescribe Whether or Not Tongko Tongko started his professional relationship by virtue of a
Life Insurance Co. Inc., November reasonable rules and regulations necessary or proper was illegally dismissed? Career Agent’s Agreement which provided that: “The
7, 2008 (willful disobedience) for the conduct of its business, to provide certain (YES) Company may terminate this Agreement for any breach or
disciplinary measures to implement said rules and to violation of any of the provisions hereof by the Agent by
assure that the same be complied with. In order that giving written notice to the Agent within fifteen (15) days from
the willful disobedience by the employee may the time of the discovery of the breach. Either of the parties
constitute a just cause for terminating his hereto may likewise terminate his Agreement at any time
employment, the orders, regulations, or instructions of without cause, by giving to the other party fifteen (15) days
the employer or representative must be: (1) notice in writing.” De Dios addressed a letter wherein the poor
reasonable and lawful; (2) sufficiently known to the performance of Tongko’s Region, in terms of recruiting as well
employee; and (3) in connection with the duties as his ability to lead his group towards the new direction
which the employee has been engaged to Manulife has been planning to take. Tongko was ordered to
discharge. hire a competent assistant, and informed that the rest of the
Agency Operations will now be dealing with the North Star
Branch. Tongko was terminated in accordance to such
agreement. Tongko filed a complaint with the NLRC for illegal
dismissal, Tongko further claimed that there was an employer-
employee relationship between him and the respondent, that
his dismissal was without basis and that he was not afforded
due process.

24. School of Holy Spirit of Quezon Gross negligence implies a want or absence of or a Whether or not Taguiam and its grade 5 class were allowed to use the school
City v. Taguiam, July 14, 2008 failure to exercise slight care or diligence, or the respondent’s dismissal on swimming pool. Taguiam distributed parent's or gaurdian
(gross and habitual neglect) entire absence of care. Habitual neglect implies the ground of gross permits. Permit of Student Chiara Mae was unsigned and was
repeated failure to perform one’s duties for a period negligence resulting to allowed to join. Taguiam warned those students who do not
of time, depending upon the circumstances. loss of trust and know to swim to go on the deeper area of the pool. Students
confidence was valid. and Chaira mae sneaked out and the latter drowned and
(Yes) was pronounced dead on arrival. Petitioner school dismissed
respondent on the ground of gross negligence resulting to loss
of trust and confidence.

25. Yrasuegui v. PAL, October 17, The obesity of petitioner, when placed in the context Whether or not the PAL serve notice of Administrative charge in violation of
2008 (Analogous Causes) of his work as flight attendant, becomes an dismissal was valid that company standards on weight reqirements. Complaint was
analogous cause. Gross and habitual neglect, a the (Yes) an international flight steward who was dismissed because of
recognized just cause, is considered voluntary his failure to adhere to the weight standards of the company
although it lacks the element of intent found in Art.
282 (a), (c), and (d)

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Argument that Bona fide occupational qualification
(BFOQ) is a statutory defense must fail
Meiorin Test (Us Jurisprudence) in determining
whether an employment policy is justified:
(1) The Employer must show that it adopted the
standard for a purpose rationally connected to the
performance of the job;
(2) The employer must establish that the standard is
reasonably necessary to the accomplishment of that
work-related purpose; and
(3) THe employer must establish that the standard is
reasonably necessary in order to accomplish the
legitimate work-related purpose.

26. John Hancock Life Insurance For an employee to be validly dismissed for a cause Whether or not Davis was Yuseco's wallet was missing and was informed that her credit
Co. v. Davis, September 3, 2008 analogous to those enumerated in Article 282, the validly dismissed. (Yes) cards had just made substantial purchases. In the assistance
(Analogous Causes) cause must involve a voluntary and/or willful act or of NBI through the security camera, it was shown that Davis
omission of the employee. A cause analogous to was identified using the credit cards. Davis was in preventive
serious misconduct is a voluntary and/or willful act or suspension and filed complaint for illegal dismissal.
omission attesting to an employee’s moral depravity.
Theft committed by an employee against a person
other than his employer, if proven by substantial
evidence, is a cause analogous to serious
misconduct.

Art. 298 (283) of Labor Code - Closure of establishment and Reduction of Personnel

Title Doctrine Legal Issue Pertinent Facts

1. SPI Technologies Inc. v. Mapua, Position of Corporate Development Manager is not Whether or not Mapua The hard disk on Mapua’s laptop crashed, causing her to lose
April 7, 2014 redundant.SPI was in fact actively looking for her were illegally dismissed files. She informed the company and asked for their patience
replacement after she was terminated. Furthermore, (Yes) for any delay on her part in meeting deadlines. The lost data
SPI violated her right to procedural due process was retrieved but still she was informed by Nolan, her
when her termination was made effective on the supervisor that she was realigning her position to become a
same day she was notified of it. subordinate of co-manager Raina due to her missing a work
deadline. Raina informed Mapua over the phone that her
position was considered redundant and that she is terminated
from employment effective immediately.

2. Arabit v. Jardine Pacific Redundancy exists where the services of an Whether or not Jardine Due to financial losses, Jardine decided to reorganize and
Finance Inc., April 2, 2014. employee are in excess of what is reasonably validly terminated the implement a redundancy program among its employees.
demanded by the actual requirements of the petitioners’ employment Jardine thereafter hired contractual employees to undertake
enterprise. A position is redundant where it is because of redundancy the functions these employees used to perform. The Union
superfluous, and superfluity of a position or positions (No) filed a notice of strike questioning the termination of
may be the outcome of a number of factors, such as employment of the petitioners who were also union officers
over hiring of workers, decreased volume of business, and alleged ULP on the part of Jardine, as well as
or dropping of a particular product line or service discrimination in the dismissal of its officers and members.In
activity previously manufactured or undertaken by the settlement, the petitioners accepted their redundancy
the enterprise. pay without prejudice to their right to question the legality of
their dismissal with the NLRC. Jardine paid the petitioners a

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separation package.

3. Phil. Carpet Manufacturing In Retrenchment, Particularly where the company Whether or not the PCMC sent a uniform memorandum of dismissal, which stated
Corp. b. Tagyamon et. al, claims to be in a financial slump, but nevertheless dismissal is illegal nd that due to a slump in the market demands as a result of
December 11, 2013. was still able to purchase new equipment after the Laches is not applicable uncompetitive pricing and the aftermath of the September 11
termination, the court held that this was inconsistent attacks, the respondents were being dismissed in furtherance
with their claim of being in a financial handicap. An of a retrenchment program. The LA and NLRC dismissed the
Action for reinstatement by reason of illegal dismissal complaint for illegal dismissal stating that there was no flaw in
is one based on an injury to the complainant’s rights, the termination as they voluntarily retire, and were
which should be brought within FOUR YEARS, not subsequently re-hired on a contractual basis, then was
three years as according to the petitioners. eventually terminated with separation benefits. CA reversed
on the ground that laches still do not apply in this case, as it
cannot be invoked earlier than the expiration of the
prescriptive period. Thus, the CA ordered the reinstatement.

4. Sanoh Fulton Phil. v. Bernard, Retrenchment to prevent losses and closure not due Whether or not there was Sanoh decided to phase out the Wire Condenser Department
August 14, 2013. to serious business losses are two separate authorized valid retrenchment of due to the job order cancellations by Matsushita, Sanyo and
causes for terminating the services of an employee. employees. (No) National Panasonic.Sanoh informed the employees of the
Closure of business, on one hand, is the reversal of retrenchment. Sanoh and the employees failed to reach an
fortune of the employer whereby there is a complete amicable settlement. Thus, Bernardo and Taghoy filed
cessation of business operations and/or an actual complaints for illegal dismissal and alleged that there was no
locking-up of the doors of establishment, usually due valid cause for retrenchment and there was a violation of the
to financial losses. Closure of business as an "first in-last out" and "last in-first out" (LIFO) policy in the CBA.
authorized cause for termination of employment Sanoh asserted that retrenchment was a valid exercise of
aims to prevent further financial drain upon an management prerogative.
employer who cannot pay anymore his employees
since business has already stopped. On the other LA dismissed the complaint and ordered separation pay.
hand, retrenchment is reduction of personnel usually NLRC affirmed LA, held that the retrenchment was a valid
due to poor financial returns so as to cut down on exercise of management prerogative, more so, since there
costs of operations in terms of salaries and wages to was "permanent lack of orders from major clients," and found
prevent bankruptcy of the company. It is sometimes no violation of the LIFO policy because the employees
also referred to as down-sizing. Retrenchment is an involved were bound by a training agreement to render 3
authorized cause for termination of employment years of continuous service. CA held the dismissal was without
which the law accords an employer who is not just cause and retrenchment was unjustified. There was no
making good in its operations in order to cut back on justifiable ground to retrench the employees because the
expenses for salaries and wages by laying off some retrenchment was intended to prevent losses and the
employees. The purpose of retrenchment is to save a company was not losing. After the retrenchment, there has
financially ailing business establishment from been no closure of the Wire Condenser Department and no
eventually collapsing. redundancy of work. It overturned the findings of the LA and
the NLRC, and ruled that Sanoh failed to prove the existence
The respective requirements to sustain their validity of substantial losses that would justify a valid retrenchment.
are likewise different. The company was found guilty of illegal dismissal and was
ordered to reinstate Bernardo and Taghoy with full
For retrenchment, the three (3) basic requirements backwages. Where reinstatement was no longer feasible
are: because the positions previously held no longer exist, Sanoh
(a) proof that the retrenchment is necessary to was ordered to pay backwages plus, in lieu of reinstatement,
prevent losses or impending losses; separation pay for every year of service, whichever is higher.
(b) service of written notices to the employees and
to the Department of Labor and Employment at least
one (1) month prior to the intended date of

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retrenchment; and (c) payment of separation pay
equivalent to one (1) month pay, or at least one-half
(1/2) month pay for every year of service, whichever
is higher.

In addition, jurisprudence has set the standards for


losses which may justify retrenchment, thus:
(1) the losses incurred are substantial and not de
minimis;
(2) the losses are actual or reasonably imminent;
(3) the retrenchment is reasonably necessary and is
likely to be effective in preventing the expected
losses; and
(4) the alleged losses, if already incurred, or the
expected imminent losses sought to be forestalled,
are proven by sufficient and convincing evidence.

To put a stamp to its validity, the closure/cessation of


business must be bona fide, i.e., its purpose is to
advance the interest of the employer and not to
defeat or circumvent the rights of employees under
the law or a valid agreement.

In termination cases either by retrenchment or


closure, the burden of proving that the termination of
services is for a valid or authorized cause rests upon
the employer.

5. Andrada et. al. v. NLRC No, dismissals due to retrenchment or redundancy W/N there was a valid After relaying its intention to retrench its employees, Legend
December 28, 2007 are subject to strict requirements under art 283 of the retrenchment? sent the employees their respective notices of retrenchment,
Labor Code (proof of basis of retrenchment or giving them one week to decide. On the same day, the Labor
redundancy, one month written to notice to and Employment Center of Subic Bay Metropolitan Authority
employees concerned and separation pay.) Legend advertised that Legend was in need of employees for
failed to show its financial condition, prior to and at positions similar to those vacated by petitioners. Petitioners
the time in enforced its retrenchment program. filed a complaint for illegal dismissal on the ground that
Legend, after giving retrenchment as the reason for
termination, created new positions similar to those they had
just vacated.

6. Culili v. Eastern There is redundancy when the service capability of W/N Culili was illegally Culili was a Senior Technician in the Customer Premises
Telecommunication Philippines, the workforce is greater than what is reasonably dismissed? Equipment Management Unit of the Service Quality
February 9, 2011 required to meet the demands of the business -NO- Department of respondent ETPI. Due to business difficulties,
ETPI was compelled to implement a Right-Sizing Program
enterprise. A position becomes redundant when it is
which consisted of two phases: the first phase involved the
rendered superfluous by any number of factors such reduction of ETPIs workforce to only those employees that
as over-hiring of workers, decrease in volume of were necessary and which ETPI could sustain; the second
business, or dropping a particular product line or phase entailed a company-wide reorganization which would
service activity previously manufactured or result in the transfer, merger, absorption or abolition of certain
undertaken by the enterprise. However, the departments of ETPI. The functions of the Customer Premises
employer has duty to observe procedural due Equipment Management Unit, were absorbed by the Business
and Consumer Accounts Department. As a result, Culilis
process in effecting the termination of its employees.
position was abolished due to redundancy. ETPI informed

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Under Article 283 of the Labor Code, the requirement Culili of his termination from employment. Culili filed a
of due process shall be deemed complied with upon complaint against ETPI and its officers for illegal dismissal,
service of a written notice to the employee and the unfair labor practice, and money claims before the Labor
Arbiter.
appropriate Regional Office of the Department of
Labor and Employment at least thirty days before
effectivity of the termination, specifying the ground
or grounds for termination. In the case at bar, ETPI
failed to comply with the notice requirements under
the Labor Code, Culili is entitled to nominal damages
in addition to his separation pay.

7. Asufrin v. San Miguel The nature of redundancy is an authorized cause for W/N there is an illegal Respondent gave its employees the choice to opt to avail of
Corporation, March 10, 2004 dismissal wherein there is duplication of work of dismissal of the petitioner the early retirement package they offer or for re-deployment
employees. However, the employer should declare from employment? to its other sales offices. The petitioner chose to be absorbed
redundancy with a just cause and in good faith. -NO- but was included in the list among those who want to avail of
the retirement package. Despite his manifestation of his
willingness to be demoted to any position as long as the
company retain him for employment he was still dismissed
from work hence this complaint.

Art. 299 (284) of Labor Code - Disease as Ground for Termination

Title Doctrine Legal Issue Pertinent Facts

1. Sy et. al. v. CA, February 27, Article 284 of the Labor Code authorizes an employer W/N Sahot was illegally When Sahot was 59 years old, he had been incurring
2003 to terminate an employee on the ground of disease. dismissed? absences as he was suffering from various ailments. At the
However, in order to validly terminate employment -YES- end of his week long absence, his employer dismissed him
on this ground, Omnibus Implementing Rules of the from work. Sahot filed a complaint for illegal dismissal.
Labor Code requires that the employer shall not
terminate his employment unless there is a
certification by competent public health authority
that the disease is of such nature or at such a stage
that it cannot be cured within a period of six (6)
months even with proper medical treatment. The
requirement for a medical certificate under Article
284 of the Labor Code cannot be dispensed with.

2. Union Motors Corp v. NLRC, The notice may be verbal; it is enough then that an W/N Etis was illegally Etis , an employee of petitioner, made a phone call to Rosita
December 9, 2004 officer or employee of the employer, competent and dismissed? dela Cruz, the company nurse, and informed her that he had
responsible enough to receive such notice for and in -YES- to take a sick leave as he had a painful and unbearable
behalf of the employer. The employer must prove toothache. His dentist, Dr. Pamor, recommended bed rest
that his employee abandoned his job. The bare fact before the operation because the inflammation has not yet
that the respondent incurred excusable and subsided which is why he was not able to immediately report
unavoidable absences does not amount to an back to work.
abandonment of his employment. On October 2, 1997, the Union motor corporation issued an
Inter Office Memorandum terminating the services of the Etis
for having incurred more than five (5) consecutive absences
without proper notification.

3. Villaruel v. Yeo Han Guan, June Art. 284 presupposes that it is the employer who W/N the burden of proof Petitioner was employed by Ribonette, which is owned by

40 | L A B O R RELATI ONS 3E Case Matrix SY 16-17 FINALS MODE


1, 2011 terminates the services of the employee found to be that an employee is respondent. After getting hospitalized, he requested for a
suffering from any disease and whose continued suffering from a disease lighter load but respondent instead offered separation pay
employment is prohibited by law or is prejudicial to that has to be from 1998 which the former rejected. Petitioner did not report
his health or the health of his co-employees. An terminated rests upon for work and filed a complaint for illegal dismissal.
employer shall not terminate the services of the the employer in order for
employee unless there is certification by a the employee to be
competent public authority that the disease is of entitled to separation
such nature or at such a stage that it cannot be pay? -
cured within a period of 6 mos even with proper
medical treatment. In this case, petitioner resigned
and was not terminated.

Art. 300 (285) of Labor Code - Termination by Employee

Title Doctrine Legal Issue Pertinent Facts

1. Malig-on v. Equitable General The employer bears the burden of proving that he W/N there was After 6 years of employment, petitioner was informed that she
Services Inc. June 29, 2010 dismissed his employee for a just cause. When the abandonment of work would be assigned to another client but it never did. She was
employer claims that the employee resigned from rather that constructive later told that she had to file a resignation letter before she
work, the employer has the burden of proof that the dismissal by the could be reassigned, which she followed. The company
employee did so willingly. company? -NO- reneged hence petitioner filed a complaint for illegal
dismissal.

2. Chang Kai Shek College v. There is constructive dismissal when there is cessation W/N there is constructive Respondent was accused of leaking a copy of a special quiz
Torres, April 2, 2014. of work, because continued employment is rendered dismissal? -NO- given to Grade 5 students of HEKASI (HEKASI 5). HEKASI stands
impossible, unreasonable or unlikely, as an offer for Heograpiya, Kasaysayan at Sibika (Geography, History
involving a demotion in rank or a diminution in pay and Civics). After the administrative hearing, respondent
and other benefits. It may also exist if an act of clear guilty of committing a grave offense of the school policies by
discrimination, insensibility, or disdain by an employer leaking a special quiz. Initially, it was decided that his services
becomes so unbearable on the part of the were to be terminated but was changed to suspension
employee that it could foreclose any choice by him wherein respondent will voluntarily resign after serving such
except to forego his continued employment. While suspension. Respondent then filed a complaint for
respondent did not tender her resignation constructive dismissal.
wholeheartedly, circumstances of her own making
did not give her any other option.

3. Opinaldo v. Ravina, October It is a time- honored legal principle that the employer W/N Petitioner was Petitioner Opinaldo was a Security Guard who worked for St.
16, 2013. has the onus probandi to show that the dismissal or illegally dismissed? Louisse Agency and was assigned in PAIJR Furniture
termination was for a just and authorized cause -YES- Accessories Manduae Cebu City. Ravina as manager of the
under the Labor Code. The employer must first show agency ask Opinaldo to get a medical certificate, so that it
that the termination was due to a valid cause to shift could give him work assignments, just to show that he is fit to
the burden of proof to the employee. work. Later, he was assigned to a construction site under
Engineer Gomez but after getting his two weeks worth of
salary, he failed to report for work. Petitioner filed a complaint
for illegal dismissal. The LA held that petitioner was illegally
dismissed. On appeal, the NLRC affirmed the LA’s decision on
the ground that there is no proof of showing that the dismissal
of the petitioner was valid.

4. Willi Hahn Enterprises v. It is not uncommon that an employee is permitted to W/N Maghuyop was Respondent was the store manager of Willie Hahn Enterprises.
Maghuyop, December 17, 2004 resign to save face after the exposure of her illegally dismissed by the Petitioner conducted an Inventory Report and discovered

41 | L A B O R RELATI ONS 3E Case Matrix SY 16-17 FINALS MODE


malfeasance. Had the separation of respondent petitioners? that its SM Cebu branch incurred stock shortages and non-
been for dismissal due to loss of trust and confidence, -NO- remittances. Then, petitioner decided to terminate the
substantial evidence of the shortages and non- services of respondent, however, before he could do so, the
remittances would have been indispensable. Such is latter tendered her resignation. Believing the good faith of
not applicable considering respondent’s resignation. respondent in resigning, petitioner decided not to file charges
It is a basic rule in evidence that the burden of proof against her anymore. Respondent, on the other hand,
is on the part of the party who makes the allegations. claimed that she was coerced into signing the resignation
Respondent's unsubstantiated and self-serving claim letter by Tony Abu and Cesar Araneta. She then filed a
that she was coerced into signing the resignation complaint for illegal dismissal and a prayer for backwages
letter does not deserve credence. and separation pay.

5. Skippers United Pacific et. al. v. For a worker’s dismissal to be considered valid it must W/N the seafarer’s Petitioner Skippers deployed De Gracia, Lata and Aprosta to
Doza et. al., February 8, 2012 comply with both procedural and substantive due demand for immediate work on board the vessel MV Wisdom Star. Skippers claimed
process Procedural due process in dismissal cases repatriation can be that respondents performed acts that were unbecoming of
consists of the twin requirements of notice and considered an act of proper seafarers such as shouting at the master of the ship
hearing. The employer must furnish the employee voluntary resignation? and threatening for repatriation as evidenced by a telex sent
with two written notices before the termination of -NO- by MV Wisdom. De Gracia claims that Skippers failed to remit
employment can be effected: (1) the first notice their respective allotments, compelling them to vent their
apprises the employee of the particular acts or grievances with the Romanian Seafarers Union. On January
omissions for which his dismissal is sought; and (2) the 28, 1999, the Filipino seafarers were unceremoniously
second notice informs the employee of the discharged and immediately repatriated. Upon arrival in the
employer’s decision to dismiss him. Before the Philippines, they filed a complaint for illegal dismissal with the
issuance of the second notice, the requirement of a LA.
hearing must be complied with by giving the worker
an opportunity to be heard. It is not necessary that
an actual hearing be conducted. Substantive due
process, on the other hand, requires that dismissal by
the employer be made based on a just or authorized
cause under Articles 282 to 284 of the Labor Code. In
the case at bar, no written notice was furnished to
De Gracia et al. regarding the cause of their
dismissal. Respondents did not submit their
resignation letters; the telex message is “a biased
and self-serving document that does not satisfy the
requirement of substantial evidence.

6. Morales v. Harbour Centre Port In cases of a transfer of an employee, the rule is Whether or Not the Morales wrote to HCPTI’s Administration Manager, protesting
Terminal Inc., January 25, 2012 settled that the employer is charged with the burden change in the that this reassignment was a clear demotion since the position
of proving that its conduct and action are for valid designation or position of which he was transferred was not even included in HCPTI’s
and legitimate grounds such as genuine business petitioner constituted plantilla.
necessity and that the transfer is not unreasonable, constructive dismissal?
inconvenient or prejudicial to the employee. If the (YES)
employer cannot overcome this burden of proof, the
employee's transfer shall be tantamount to unlawful
constructive dismissal.

7. SHS Perforated Material Inc. v. Management Perogative cannot be understood to Hether or not the Respondent allegedly failed to make any concrete business
Diaz, October 13, 2010 include the right to temporarily withhold temporary withholding of proposal or implement any specific measure to improve the
salary/wages without the consent of the employee. respondents productivity of the SHS office. In addition, respondent was said
Constructive Dismissal exists where there is cessation salary/wages by not to have returned Hartmannshenns calls and emails, to
of work because continued employment is rendered petitioner was a valid which Diaz denied. Hartmannshenn instructed Taguiang not
impossible, unreasonable or unlikely, as an offer exercise of management to release respondents salary. Later that afternoon,

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involving a demotion in rank and a diminution in pay. prerogative (No) respondent called and inquired about his salary. Taguiang
informed him that if was being withheld and that he had to
immediately communicate with Hartmannshenn. The next
day, respondent served on SHS a demand letter and a
resignation letter, citing illegal and unfair labor practices

8. San Miguel Properties Phils. v. In illegal dismissal cases, fundamental is the rule that Whether or not Gucaban was hounded by management to sign a blank
Gucaban, July 18, 2011 when an employer interposes the defenses of Gucaban’s resignation resignation letter as the company was undergoing cost-
resignation, on him necessarily rests the burden to was voluntary (No) cutting. When Gucaban refused, she was alienated in work
prove that the employee indeed voluntarily resigned. and kept from meetings, given ugly performance reports,
The intent to relinquish must concur with the overt act before she succumbed to pressure and submitted her
of relinquishment; hence, the acts of the employee resignation to SMPI. Thus, Gucaban filed a complaint for
before and after the alleged resignation must be illegal dismissal alleging that management forced her to
considered in determining whether he in fact separate from service.
intended to terminate his employment.

9. BMG Records Phils. Inc. v. For intimidation to vitiate consent, the following Whether or not Aparecio Aparecio alleged that she was illegally dismissed or
Aparecio, September 5, 2007 requisites must be present: (1) that the intimidation was illegally dismissed or terminated [from] employment; that she was asked by
caused the consent to be given; (2) that the tendered resignation respondent to resign and will be paid all her benefits.
threatened act be unjust or unlawful; (3) that the (No) Petitioners narrate that Aparecio was initially performing well
threat be real or serious, there being evident as an employee but as years passed by she seemed to be
disproportion between the evil and the resistance complacent in the performance of her job and had been
which all men can offer, leading to the choice of comparing the salaries of promo girls in other companies.
doing the act which is forced on the person to do as Aparecio and two other promo girls intimated to their
the lesser evil; and (4) that it produces a well- supervisor that they were intending to resign and were
grounded fear from the fact that the person from requesting for some financial assistance. BMG said that an
whom it comes has the necessary means or ability to employee who resigns from service is not entitled to financial
inflict the threatened injury to his person or property. assistance, but considering the length of their service and due
to humanitarian consideration it would accede to the request
after they secure their respective clearances

Art. 301 (286) of Labor Code - When Employment not deemed terminated

Title Doctrine Legal Issue Pertinent Facts

1. SKM Art Craft Corporation v. if the employee was forced to remain without work or Whether or not A fire occurred at the inspection and
Bauca, November 27, 2013 assignment for a period exceeding six months, then respondents were receiving/repair/packing area of petitioner’s premises. The
he is in effect constructively dismissed. illegally dismissed. (Yes estimated damage was P22 million. On May 8, 2000, petitioner
despite valid informed respondents that it will suspend its operations for six
months, effective May 9, 2000. 23 respondents (and other co-
workers) filed a complaint for illegal dismissal.and alleged
discrimination in choosing the workers to be laid off and that
petitioner had discovered that most of them were members
of a newly-organized union.

2. Emeritus Security and Placing an employee (security guard) on floating Whether or not Respondent claimed that after more than six months since his
Maintenance Systems Inv. v. status for more than six (6) months makes the respondent was illegally last assignment, he was not given a new assignment and
Dailig, April 2, 2014. employer liable for constructive illegal dismissal. dismissed. (Yes) argued that if an employee is on floating status for more than
Floating status of a security guard should continue six months, such employee is deemed illegally dismissed.
only for six months. The failure of the employer to Petitioner denied dismissing the respondent and claimed that
give the employee a work assignment beyond the it sent the latter a notice requiring him to report to head office

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reasonable six-month period makes it liable for and that he had been absent without official leave and
constructive illegal dismissal. failure to report would mean that he is no longer interested to
continue his employment.

3. Nippon Housing Phil. Inc. et. al A redundant position is one rendered superfluous by Whether or not The building Engineer, caused her to go on an emergency
v. Leynes, August 3, 2011 a number of factors. It has been held that the petitioner’s decision to leave for purpose of coordinating with her lawyer regarding
exercise of business judgment to characterize an place respondent on her resignation. Leynes, also, sent another letter to Reyes
employees service as no longer necessary or floating status is expressing her intention to return to work. When Leynes
sustainable is not subject to discretionary review tantamount to reported back for work, it came to her knowledge that a
where, as here, it is exercised there is no showing of constructive dismissal; substitute had already been hired. Leynes was further served
violation of the law or arbitrariness or malice on the WON NHPI’s decision to by petitioner with a letter and memorandum, relieving her
part of the employer. redundate respondent is from her position and directing her to report to NHPIs main
unjustified. (Both NO) office while she was on floating status.

4. Mayon Hotel and Restaurant While we recognize the right of the employer to Whether or not Its operation was suspended due to the expiration and non-
et. al. v. Adana et. al. May 16, terminate the services of an employee for a just or respondents were renewal of the lease contract for the space it rented. While
2005 authorized cause, the dismissal of employees must illegally dismissed by waiting for the completion of the construction of its new site,
be made within the parameters of law and pursuant petitioner (Yes) MHR continued its operation in another site with 9 of the 16
to the tenets of fair play. And in termination disputes, employees. When the new site constructed and MHR
the burden of proof is always on the employer to resumed its business operation, none of the 16 employees was
prove that the dismissal was for a just or authorized recalled to work. MHR alleged business losses as the reason for
cause. Where there is no showing of a clear, valid not reinstating the respondents. On various dates,
and legal cause for termination of employment, the respondents filed complaints for underpayment of wages,
law considers the case a matter of illegal dismissal. money claims and illegal dismissal.

Art. 302 (287) of Labor Code - Retirement

Title Doctrine Legal Issue Pertinent Facts

1. Serrano v. Severino Santos Republic Act No. 7641 amended Article 287 of the Whether or not the After 14 years of service, petitioner applied for optional
Transit, August 9, 2010 Labor Code by providing for retirement pay to retirement pay of retirement from the company that advised him that he must
qualified private sector employees in the absence of petitioner should have first sign the already prepared Quitclaim before his retirement
any retirement plan in the establishment. An been computed at 22.5 pay could be released. He signed the Quitclaim on which he
employee upon reaching the age of sixty (60) years days per year of service? wrote under protest after his signature. His payment was
or more, but not beyond sixty-five (65) years which is computed at 15 days per year of service. Petitioner soon after
hereby declared the compulsory retirement age, filed a complaint, alleging that the company erred in its
who has served at least five (5) years in the said computation since the Retirement Pay Law, his retirement pay
establishment, may retire and shall be entitled to should have been computed at 22.5 days per year of service
retirement pay equivalent to at least one-half (1/2) to include the cash equivalent of the 5-day service incentive
month salary for every year of service, a fraction of at leave (SIL) and 1/12 of the 13th month pay which the
least six (6) months being considered as one whole company did not.
year.
Unless the parties provide for broader inclusions, the
term one-half (1/2) month salary shall mean fifteen
(15) days plus one-twelfth (1/12) of the 13th month
pay and the cash equivalent of not more than five
(5) days of service incentive leaves.

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2. (retirement benefits) Daaboy v. Being intended as a mere measure of equity and Whether or not Daabay The employment of Daabay with Coca-Cola as Sales Logistics
Coca-Cola , August 19, 2013. social justice, the NLRC's award was then akin to a may be entitled to Checker was terminated. At the time of his dismissal, Daabay
financial assistance or separation pay that is granted retirement benefits had been a regular employee of Coca-Cola for eight years,
to a dismissed employee notwithstanding the legality despite his being and was receiving a monthly pay of P20,861.00, exclusive of
of his dismissal. Jurisprudence on such financial dismissed legally? other benefits.The LA ruled that petitioner was illegally
assistance and separation pay then equally apply to dismissed. NLRC reversed the decision, holding that Daabay's
this case. The Court has ruled, time and again, that participation in the conspiracy was dulu established.
financial assistance, or whatever name it is called, as However, NLRC ordered that the case be remanded to the
a measure of social justice is allowed only in LA for the computation of Daabay's retirement benefits.
instances where the employee is validly dismissed for
causes other than serious misconduct or those
reflecting on his moral character.Clearly, considering
that Daabay was dismissed on the grounds of serious
misconduct, breach of trust and loss of confidence,
the award based on equity was unwarranted.

3. Pinero v. NLRC, August 20, 2004 An employee who is dismissed for a cause is Whether or not petitioner Private respondent Dumaguete Cathedral College, Inc., and
generally not entitled to any financial assistance. is entitled to retirement DUCACOFSA entered into a CBA effective for 3 years. Upon
Equity consideration, however, provide an exception. payment? the expiration of their CBA, the parties failed to conclude
Equity has been defined as justice outside the law, another CBA which led DUCACOFSA to file a notice of strike
being ethical rather than jural and belonging to the with the DOLE on the ground of refusal to bargain.
sphere of morals than of law. It is grounded on the DUCACOFSA-NAFTEU conducted a strike in the premises of
precepts of conscience and not on any sanctions of private respondent without submitting to the DOLE the
positive law, for equity finds no room for application required results of the strike vote. Private respondent filed with
where there is law. the DOLE a complaint to declare the strike illegal and to
dismiss the officers of DUCACOFSA-NAFTEU. The NLRC affirmed
the decision of the Labor Arbiter. In addition to the failure to
comply with strike vote requirements, the NLRC ratiocinated
that the strike was illegal because DUCACOFSA-NAFTEU, not
being a legitimate labor organization, has no personality to
hold a strike. The union officers filed a Motion for
Reconsideration but the same was denied. Petitioner Rosendo
U. Piero filed with this Court a petition for certiorari

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4. Sta. Catalina College v. NLRC, Separation Pay; An employee who is terminated for Whether Hilaria’s services Hilaria was an elementary school teacher at the sta. catalina
November 19, 2003 just cause is generally not entitled to separation pay. for petitioner school college. She applied for and was granted a one year leave of
— during the period from absence without pay on account of the illness of her mother.
It bears noting that an employee who is terminated 1955 to 1970 should be After the expiration of her leave of absence, she had not
for just cause is generally not entitled to factored in the been heard from by petitioner school. In the meantime, she
separation pay. Moreover, the PERAA, petitioner computation of her was employed as a teacher at the San Pedro Parochial
school’s substit retirement benefits ? school. Hilaria reached the compulsory retirement age of 65.
ute retirement plan, was only established in 1972, Pursuant to Article 287 of the Labor Code, as amended by
such that when Hilaria abandoned her work in 1971, Republic Act 7641, petitioner school pegged her retirement
there were no retirement contributions to speak of. benefits at P59,038.35, computed on the basis of fifteen years
Retirement Benefits; Gratuity pay is separate and of service from 1982 to 1997. Her service from 1955 to 1970 was
distinct from retirement benefits; It is paid purely out excluded in the computation, petitioner school having
of generosity.—Gratuity pay is separate and distinct asserted that she had, in 1971, abandoned her
from retirement benefits. It is paid purely out of employment.Hilaria insisted, however, that her retirement
generosity. Gratuity, therefore, is not intended to pay benefits should be computed on the basis of her thirty years of
a worker for actual services rendered or for actual service, inclusive of the period from 1955 to 1970; and that the
performance. It is a money benefit or bounty given to gratuity pay earlier given to her should not be deducted
the worker, the purpose of which is to reward therefrom. She thus concluded that she was entitled to
employees who have rendered satisfactory service P190,539.90.
to the company.
Retirement benefits are a form of reward for
employee’s loyalty to the employer.—Retirement
benefits, on the other hand, are intended to help the
employee enjoy the remaining years of his life,
releasing him from the burden of worrying for his
financial support, and are a form of reward for his
loyalty to the employer.

5. Pantranco North Express Inc. v. In the absence of a retirement plan or agreement Whether or not Private Private respondent was hired by petitioner as a bus conductor
NLRC, July 24, 1996 providing for retirement benefits of employees in the Respondent's and joined the Pantranco Employees Association-PTGWO. He
establishment, an employee upon reaching the age Compulsory Retirement Is was employed until when he was retired at the age of fifty-
of sixty (60) years or more, but not beyond sixty-five Not Illegal Dismissal? two after having rendered twenty five years' service. The basis
(65) years which is hereby declared the compulsory of his retirement was the compulsory retirement provision of
retirement age, who has served at least five (5) years the collective bargaining agreement between the petitioner
in the said establishment may retire The a fore and the aforenamed union. Private respondent received
quoted provision makes clear the intention and spirit P49,300.00 as retirement pay. Private respondent filed a
of the law to give employers and employees a free complaint for illegal dismissal against petitioner. Labor Arbiter

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hand to determine and agree upon the terms and Olairez rendered his decision finding the complainants illegally
conditions of retirement.Providing in a CBA for and unjustly dismissed and order the respondent to reinstate
compulsory retirement of employees after twenty-five them to their former or substantially equivalent positions
(25) years of service is legal and enforceable so long without loss of seniority rights with full backwages and other
as the parties agree to be governed by such CBA. benefits. The amounts already received by complainants shall
The law presumes that employees know what they be considered as advanced payment of their retirement pay
want and what is good for them absent any showing which shall be deducted when they shall actually retire or
that fraud or intimidation was employed to secure (be) separated from the service. Petitioner appealed to
their consent thereto. public respondent.
On this point then, public respondent committed a
grave abuse of discretion in affirming the decision of
the labor arbiter. The compulsory retirement of
private respondent effected in accordance with the
CBA is legal and binding.

6. R and E Transport v. Latag, The respondent is entitled to retirement benefits Whether or not Latag is Latag was a regular employee of La Mallorca Taxi. When La
February 13, 2004 despite of the waiver of quitclaims. Latag was entitled to retirement Mallorca ceased from business operations, Latag transferred
credited with 14 years of service with R & E Transport, benefits considering to R & E Transport, Inc. He was receiving an average daily
Inc. Article 287 of the Labor Code, as amended by there was signing of salary of five hundred pesos (P500.00) as a taxi driver. Latag
Republic Act No. 7641, 30 provides: Retirement. — In waiver of quit claim? got sick and was forced to apply for partial disability with the
the absence of a retirement plan or agreement SSS, which was granted. When he recovered, he reported for
providing for retirement benefits of employees in the work but was no longer allowed to continue working on
establishment, an employee upon reaching the age account of his old age. Latag thus asked the administrative
of sixty (60) years or more, but not beyond sixty-five officer, for his retirement pay pursuant to Republic Act 7641
(65) years which is hereby declared the compulsory but he was ignored. Latag filed a case for payment of his
retirement age, who has served at least five (5) years retirement pay. However he died and subsequently, his wife,
in said establishment, may retire and shall be entitled substituted him.
to retirement pay equivalent to at least one-half (1/2)
month salary for every year of service, a fraction of at
least six (6) months being considered as one whole
year. Unless the parties provide for broader inclusions,
the term one half-month salary shall mean fifteen (15)
days plus one-twelfth (1/12) of the 13th month pay
and the cash equivalent of not more than five (5)
days of service incentive leaves

The rules implementing the New Retirement Law


similarly provide the above-mentioned formula for
computing the one-half month salary. Since Pedro
was paid according to the "boundary" system, he is
not entitled to the 13th month 32 and the service
incentive pay; hence, his retirement pay should be
computed on the sole basis of his salary.

7. Serrano v. Severino Santos Republic Act No. 7641 amended Article 287 of the Whether or not the After 14 years of service, petitioner applied for optional
Transit, August 9, 2010 Labor Code by providing for retirement pay to retirement pay of retirement from the company that advised him that he must
qualified private sector employees in the absence of petitioner should have first sign the already prepared Quitclaim before his retirement
any retirement plan in the establishment. An been computed at 22.5 pay could be released. He signed the Quitclaim on which he
employee upon reaching the age of sixty (60) years days per year of service? wrote under protest after his signature. His payment was
or more, but not beyond sixty-five (65) years which is computed at 15 days per year of service. Petitioner soon after
hereby declared the compulsory retirement age, filed a complaint, alleging that the company erred in its
who has served at least five (5) years in the said computation since the Retirement Pay Law, his retirement pay

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establishment, may retire and shall be entitled to should have been computed at 22.5 days per year of service
retirement pay equivalent to at least one-half (1/2) to include the cash equivalent of the 5-day service incentive
month salary for every year of service, a fraction of at leave (SIL) and 1/12 of the 13th month pay which the
least six (6) months being considered as one whole company did not.
year.
Unless the parties provide for broader inclusions, the
term one-half (1/2) month salary shall mean fifteen
(15) days plus one-twelfth (1/12) of the 13th month
pay and the cash equivalent of not more than five
(5) days of service incentive leaves.

8. Obusan v. PNB, July 26, 2010 The retirement age is primarily determined by the Whether or not PNB PNB hired Obusan. At that time, PNB was a government-
existing agreement or employment contract.Absent cannot unilaterally lower owned or controlled corporation, whose retirement program
such an agreement, the retirement age shall be fixed the compulsory for its employees was administered by the GSIS. PNB was
by law.The law mandates that the compulsory retirement age to 60 privatized. All PNB employees, including Obusan, were
retirement age is at 65 years, while the minimum age years without violating deemed retired from the government service and
for optional retirement is set at 60 years.Moreover, Article 287 of the Labor accordingly paid retirement gratuity. Thereafter, Obusan
Article 287 of the Labor Code, as amended, applies Code and Obusans continued to be an employee of PNB. PNB Board of Directors,
only to a situation where (1) there is no CBA or other alleged right to retire at approved the PNB Regular Retirement Plan which provides
applicable employment contract providing for the age of 65 years? the normal retirement date of a Members. PNB informed
retirement benefits for an employee; or (2) there is a Obusan that her last day of employment would be on March
collective bargaining agreement or other applicable 3, 2002, as she would reach the mandatory retirement age of
employment contract providing for retirement 60 years. Obusan questioned her compulsory retirement.
benefits for an employee, but it is below the
requirement set by law.The rationale for the first
situation is to prevent the absurd situation where an
employee, deserving to receive retirement benefits, is
denied them through the nefarious scheme of
employers to deprive employees of the benefits due
them under existing labor laws.The rationale for the
second situation is to prevent private contracts from
derogating from the public law. We hold that the
PNB-RRP is a valid exercise of PNBs prerogative to
provide a retirement plan for all its employees.

9. Kimberly Clark Phils. v. According to the Supreme Court, the initial Whether or not a re Respondents were employees of petitioner. Despite their
Dimayuga, September 18, 2009 retirement grant already given to additional benefit given resignation before the early retirement package was offered,
The respondents was already due to the privilege to the employees due to Nora and Rosemarie pleaded with petitioner that they be
given by the company to gratuitous grant of the retroactively extended the benefits thereunder, to which
The employees. They are clearly not included employer be required to petitioner acceded. Maricar tendered her resignation
anymore but because of the employees although effective December 1, 2002. As at the time of her resignation
company made adjustments and reconsidered their it is not included in the the early retirement package was still effective, she received
inclusion. So their request, the when the company CBA? a total of P523,540.13 for which she signed a release and
announced an additional incentive, it was clear that quitclaim. Petitioner announced that in lieu of the merit
the respondents are no longer covered by it increase which it did not give that year, it would provide
because they are no longer employees when it was economic assistance, to be released the following day, to all
announced. To have them included would be monthly-paid employees on regular status as of November 16,
additional burden to the employer. The nature a 2002. Still later or on, petitioner announced that it would the
bonus arose grant a lump sum retirement pay in the amount of P200,000, in

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from the financial growth or good performance of addition to the early retirement package benefit, to those
the company, it is clearly not mandatory and legally who signed up for early retirement and who would sign up
demandable by the employees when it is clear that until January 22, 2003. Respondents filed a Complaint, against
no collective bargaining petitioner and its Finance Manager Gomez whom
agreement or law that mandates the grant. respondents alleged to be “responsible for the withholding of
[their] additional retirement benefits,” claiming entitlement to
the P200,000 lump sum retirement pay. Respondents Nora and
Rosemarie additionally claimed entitlement to the economic
assistance.

10. Magdadaro v. PNB, July 17, Retirement is the result of a bilateral act of the Whether or not petitioner Magdadaro was employed by PNB. Petitioner filed his
2009. parties, a voluntary agreement between the was illegally dismissed application for early retirement under respondent’s Special
employer and the employee whereby the latter, from employment? Separation Incentive Program stating that 31 December 1999
after reaching a certain age, agrees to sever his or was his preferred effective date of retirement. Respondent
her employment with the former. Retirement is approved petitioner’s application for early retirement but
provided for under Article 287 of the Labor Code, as made it effective on 31 December 1998. Petitioner protested
amended by Republic Act No. 7641, or is determined the acceleration of his retirement. He received, under protest,
by an existing agreement between the employer his retirement and separation benefits. Petitioner filed a
and the employee. In this case, respondent offered complaint for illegal dismissal and payment of moral,
the SSIP to overhaul the bank structure and to allow it exemplary and actual damages against respondent.
to effectively compete with local peer and foreign
banks. SSIP was not compulsory on employees.
Petitioner voluntarily availed of the SSI. More
importantly, the SSIP provides:
Management shall have the discretion and
prerogative in approving the applications filed under
the Plan, as well as in setting the effectivity dates for
separation within the implementation period of the
Plan. It is clear that it is within respondent’s
prerogative to set the date of effectivity of retirement
and it may not be necessarily what is stated in the
application.

Art. 306 (291) of Labor Code - Money Claims

Title Doctrine Legal Issue Pertinent Facts

1. PLDT v. Pingol, September 10, All money claims arising from employer-employee Whether or Not Respondent was hired by petitioner PLDT as a maintenance
2008 relations accruing during the effectivity of this Code respondent filed his technician. While still under the employ of PLDT, Pingol was
shall be filed within three (3) years from the time the complaint for admitted at The Medical City for “paranoid personality
cause of action accrued; otherwise they shall be constructive dismissal disorder”. Eventually, he was discharged from the hospital.
barred forever. and money claims within Pingol was absent from work without official leave. According
the prescriptive period of to PLDT, notices were sent to him with a stern warning that he
4 years as provided in would be dismissed from employment if he continued to be
Article 1146 of the Civil absent without official leave. Despite the warning, Pingol
Code and 3 years as failed to show up for work. PLDT terminated his services on the
provided in Article 291 of grounds of unauthorized absences and abandonment of
the Labor Code? (NO) office. Four years later, Pingol filed a complaint for
constructive dismissal and monetary claims against PLDT.

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2. Serrano v. CA, August 15, 2001 The three (3) years prescriptive period should be Whether or not the As petitioners was on board a ship most of the time,
counted from 1993 and not 1978 and since his money claim of respondent Maersk offered to send portions of petitioners
complaint was filed in 1994, he claims that it has not petitioner prescribe. (NO) salary to his family in the Philippines by money order. Petitioner
prescribed. It is settled jurisprudence that a cause of agreed and from 1977 to 1978, he instructed respondent
action has three elements, to wit (1) a right in favor of Maersk to send money orders to his family. Respondent
the plaintiff by whatever means and under whatever Maersk also deducted various amounts from his salary for
law it arises or is created; 2) an obligation on the part Danish Social Security System (SSS), welfare contributions, ship
of the named defendant to respect or not to violate clubs, and SSS medicate. Petitioner’s family failed to received
such right, and 3) an act or omission on the part of the money orders petitioners sent through respondent Maersk.
such defendant volatile of the right of the plaintiff or Upon learning this in 1978, petitioners demanded that
constituting a branch of the obligation of the respondent Maersk pay him the amounts the latter deducted
defendant to the plaintiff. from his salary, which request were ignored.

Finally, in October 1993, petitioner wrote to respondent


Maersk demanding immediate payment to him of the total
amount of the money orders deducted from his salary from
1977 to 1978.

3. IBC v. Panganiban, February 6, All money claims arising from employer- employee Whether or not the claim Panganiban resigned from his employment on September
2007 relations accruing during the effectivity of this Code of Panganiban for 1988. Later on Panganiban filed with the RTC of Quezon City a
shall be filed within 3 years from the time the cause of unpaid commissions has civil case against members of Board of Administrators (BOA)
action accrued; otherwise, they shall be forever already prescribed. (YES) of petitioner alleging non-payment of his unpaid commissions.
barred. Thereafter, Panganiban was elected by the BOA as VP for
Marketing in July 1992. He resigned in April 1993. On July 1996,
Panganiban filed against petitioner complaint for illegal
dismissal, separation pay, retirement benefits, unpaid
commission and damages.

4. Accessories Specialist v. Promissory estoppel may arise from the making of a Whether the cause of Erlinda B. Alabanza for and in behalf of her husband Jones B.
Albanza July 23, 2008 promise, even though without consideration, if it was action of respondents Alabanza alleged that her husband Jones was the Vice-
intended that the promise should be relied upon, as has already prescribed. President, Manager and Director of ASI. Jones rendered
in fact it was relied upon, and if a refusal to enforce it outstanding services for the petitioners. Jones was compelled
would virtually sanction the perpetration of fraud or by the owner of ASI to file his involuntary resignation on the
would result in other injustice. The principle of ground that ASI allegedly suffered losses At the time of his
promissory estoppel is a recognized exception to the resignation, Jones had unpaid salaries for eighteen (18)
three-year prescriptive period enunciated in Article months. He was likewise not paid his separation Knowing the
291of the Labor Code. Labor Law. The posting of a predicament of the company. The petitioners contend that
bond is indispensable to the perfection of an appeal Jones voluntarily resigned. Thus, Erlindas cause of action has
in cases involving monetary awards from the decision already prescribed that under Article 291 of the Labor Code,
of the Labor Arbiter. The filing of the bond is not only all money claims arising from an employer-employee
mandatory but also a jurisdictional requirement that relationship shall be filed within (3) years from the time the
must be complied with in order to confer jurisdiction cause of action accrues. Since the complaint was filed almost
upon the NLRC. (5) years from the date of the alleged illegal dismissal of her
husband Jones, Erlindas complaint is now barred.

5. Autobus Transport System v. Article 291 of the Labor Code states that all money Whether or not Bautista is Antonio Bautista was employed by Auto Bus Transport
Bautista May 16, 2007 claims arising from employer-employee relationship entitled to Service Systems, Inc. in May 1995. He was assigned with travel routes
shall be filed within three (3) years from the time the Incentive Leave. If he is, Manila-Tuguegarao via Baguio, Baguio- Tuguegarao via
cause of action accrued; otherwise, they shall be Whether or not the three Manila and Manila-Tabuk via Baguio and he was paid by
forever barred. In the computation of the three-year (3)-year prescriptive commission (7% of gross income per travel for twice a month).

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prescriptive period, a determination must be made period provided under In January 2000, while he was driving his bus he bumped
as to the period when the act constituting a violation Article 291 of the Labor another bus owned by Auto Bus. He claimed that he bumped
of the workers’ right to the benefits being claimed Code, as amended, is the he accidentally bumped the bus as he was so tired and
was committed. applicable to that he has not slept for more than 24 hours because Auto Bus
respondent’s claim of required him to return to Isabela immediately after arriving at
service incentive leave Manila. Damages were computed and 30% or P75,551.50 of it
pay. (YES) was being charged to Bautista. Bautista refused payment.
Auto Bus terminated Bautista after due hearing as part of
Auto Bus’ management prerogative. Bautista sued Auto Bus
for Illegal Dismissal with Money Claims for nonpayment of 13th
month pay and service incentive leave pay.

6. PLDT v. Pingol, September 8, The prescription of an action is interrupted by (a) the Whether or not Respondent Roberto Pingol was hired by petitioner PLDT as a
2010 filing of an action, (b) a written extrajudicial demand respondent filed his maintenance technician.
by the creditor, and (c) a written acknowledgment complaint within the
of the debt by the debtor. prescriptive period of While still under the employ of PLDT, respondent was admitted
four (4) years as provided at The Medical City, Mandaluyong, for “paranoid personality
When one is arbitrarily and unjustly deprived of his job in Article 1146 of the Civil disorder” due to financial and marital problems.
or means of livelihood, the action instituted to Code and three (3) years
contest the legality of one’s dismissal from as provided in Article 291 From September 16, 1999 to December 31, 1999, respondent
employment constitutes an action predicated “upon of the Labor Code, was absent from work without official leave. PLDT sent notices
an injury to the rights of the plaintiff” as respectively. (NO) with a stern warning that absence without authorized leaves
contemplated under Article 1146 of the Civil Code, for seven (7) consecutive days is subject to termination from
which must be brought within four (4) years. With the service. Despite the warning, he failed to show up for
regard to the prescriptive period for money claims, work. On January 1, 2000, PLDT terminated his services on the
Article 291 of the Labor Code states that the same grounds of unauthorized absences and abandonment of
shall be filed within three (3) years from the time the office. On March 29, 2004, respondent filed a Complaint for
cause of action accrued. Constructive Dismissal and Monetary Claims against PLDT.

End of Labor Code

Title Doctrine Legal Issue Pertinent Facts

Effect of Change of Ownership of A Business

Penafrancia Tours and Travel The change of ownership in a business concern is not Whether or not Both respondent Joselito Sarmiento (Sarmiento) and Rocardo
Transport v. Sarmiento October proscribed; that it is a right of an employer, as respondents were legally S. Catimbang worked as a bus inspector of petitioner
20, 2010 management prerogative, to close his business and terminated from Peñafrancia Tours and Travel Transport, Inc. In their complaint
terminate the employment of his employees as a employment by reason for illegal dismissal.
consequence of such closure; that an innocent of the sale of the
transferee of the business has no liability to the business enterprise and Petitioner admitted that respondents were among its bus
employees for their continued employment; and the consequent change inspectors. Due to severe business losses, petitioner made the
that, based on its annual income tax return, it or transfer of painful decision to stop its operation and sell the business
suffered financial losses. ownership/management enterprise to the Perez family of ALPS Transportation. It alleged
. that due notice was given to the Department of Labor and
Employment, and that all its employees were duly notified
and were paid their corresponding separation pay, as well as
their 13th month pay. The new owners maintained the

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business name of petitioner,

Liability of Corporate officers

Carag v. NLRC, April 2, 2007 Article 212(e) of the Labor Code, by itself, does not Whether or not the Complainants, on behalf of all of MAC's rank and file
make a corporate officer personally liable for the Carag and David, in their employees, filed a complaint against MAC for illegal dismissal
debts of the corporation. The governing law on capacities as corporate brought about by its illegal closure of business. The
personal liability of directors for debts of the officers, may be held complainants moved to implead both Carag and David,
corporation is still Section 31 of the Corporation jointly and severally liable Chairman of the Board and President respectively, invoking
Code. with MAC for the money A.C. Ransom Labor Union CCLU vs. NLRC where it was held
claims of the employees that a corporate officer can be held liable for acting on
The personal liability of corporate officers validly behalf of the corporation when the latter is no longer in
attaches only when (a) they assent to a patently existence and there are valid claims of workers that must be
unlawful act of the corporation; or (b) they are guilty satisfied.
of bad faith or gross negligence in directing its affairs;
or (c) they incur conflict of interest, resulting in
damages to the corporation, its stockholders or other
persons.

Effect of company merger on union shop clause

BPI v. BPI Employees Union Davao There is union shop when all new regular employees Whether or not the The Bangko Sentral ng Pilipinas approved the Articles of
Chapter, August 10, 2010 are required to join the union within a certain period former FEBTC employees Mergerbetween BPI and Far East Bank and Trust Company
for their continued employment. In a merger of that were absorbed by (FEBTC). Pursuant to the Article and Plan of Merger, all the
corporations, absorbed employees are covered by petitioner upon the assets and liabilities of FEBTC were transferred to and
the Union Shop Clause found in the existing CBA merger between FEBTC absorbed by BPI as the surviving corporation. FEBTC
between the surviving Corporation and its Union. and BPI should be employees, including those in its different branches across the
covered by the Union country, were hired by petitioner as its own employees, with
Shop Clause found in the their status and tenure recognized and salaries and benefits
existing CBA between maintained. The former FEBTC rank-and-file employees in
petitioner and Davao City did not belong to any labor union at the time of
respondent Union. (YES) the merger. Respondent Union invited said FEBTC employees
to a meeting regarding the Union Shop Clause of the existing
CBA between petitioner BPI and respondent Union. Some of
the former FEBTC employees joined the Union, while others
refused. Later, however, some of those who initially joined
retracted their membership. The president of the Union
requested BPI to implement the Union Shop Clause of the CBA
and to terminate their employment pursuant thereto.

Corporate Liabilities

Fernandez et. al. v. NewfieldStaff A corporation, being a juridical entity, may act only Whether or not the Newfield Staff Solutions, Inc. (Newfield) hired Gilda Fernandez
Solution, July 10, 2013. through its directors, officers and employees. petitioners were illegally as Recruitment while Bernadette Beltran was hired as
Obligations incurred by them, acting as such dismissed. (YES) probationary Recruitment Specialist. Arnold "Jay" Lopez, Jr.,
corporate agents, are not theirs but the direct Newfield's General

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accountabilities of the corporation they represent. Whether or not Lopez, Jr.
True, solidary liability may at times be incurred but is solidarily liable with the Manager, asked petitioners to come to his office and
only when exceptional circumstances warrant such Corporation. (NO) terminated their employment on the ground that they failed
as when directors and trustees or, in appropriate to perform satisfactorily. A week later, petitioners received
cases, the officers of a corporation xxx act in bad Lopez, Jr.'s return-to-work letters stating that they did not
faith or with gross negligence in directing the report without resigning, in violation of their employment
corporate affairs. agreements. They were directed to report and explain their
failure to file resignation letters. Petitioners sent a demand
letter for unpaid salaries. Respondents claimed that no
evidence shows or even hints that petitioners were forced not
to report for work. Petitioners simply no longer showed up for
work. Petitioners insisted that Lopez, Jr. terminated their
employment while respondents claimed that petitioners
abandoned their jobs.

Change of Equity Composition

SME Bank v. Peregrin, October 8, The corporation possesses a personality separate and Whether or not the Respondents were employees of SME Bank.Originally, the
2013 distinct from that of its shareholders, a shift in the respondent employees principal shareholders and corporate directors of the bank
composition of its shareholders will not affect its were illegally dismissed. were Agustin, Jr. and de Guzman, Jr. In June 2001, SME Bank
existence and continuity. Thus, notwithstanding the (YES) experienced financial difficulties. To remedy the situation, the
stock sale, the corporation continues to be the bank officials proposed its sale to Samson. As it turned out,
employer of its people and continues to be liable for some of respondent employees were not rehired.
the payment of their just claims. Furthermore, the Respondent-employees demanded the payment of their
corporation or its new majority share holders are not respective separation pays, but their requests were denied.
entitled to lawfully dismiss corporate employees Aggrieved by the loss of their jobs, respondent employees
absent a just or authorized cause. filed a Complaint before the NLRC and sued SME Bank for
unfair labor practice; illegal dismissal; illegal deductions;
underpayment; and nonpayment of allowances, separation
pay and 13th month pay.

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