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CASES ON RECRUITMENT AND PLACEMENT

1. People vs Panis

The specification of two or more persons is not to create a condition prior to filing but rather
itstates a presumption that the individual is engaged in recruitment in consideration of a fee,
however thenumber of persons is not an essential ingredient to the act of recruitment or
placement, and it will stillqualify even if only one person has been involved.

2. People v Taguinay

The three elements of the crime of illegal recruitment in large scale, to wit: a) the offender has no
valid license or authority required by law to enable him to lawfully engage in recruitment and
placement of workers; b) the offender undertakes any of the activities within the meaning of
"recruitment and placement" under Article 13(b) of the Labor Code, or any of the prohibited
practices enumerated under Article 34 of the said Code (now Section 6 of Republic Act No. 8042);
and c) the offender committed the same against three or more persons, individually or as a group,
are present in this case.

3. People vs Hashim

The concerted efforts of Aringoy, Lalli and Relampagos, Lolita was recruited and deployed to
Malaysia to work as a prostitute. Such conspiracy among Aringoy, Lalli and Relampagos could be
deduced from the manner in which the crime was perpetrated — each of the accused played a
pivotal role in perpetrating the crime of illegal recruitment, and evinced a joint common purpose
and design, concerted action and community of interest.

4. People vs Cabais

that an employee of a company or corporation engaged in illegal recruitment may be held liable as
principal, together with the employer, if it is shown that he actively and consciously participated in
the recruitment process.

5. People vs Gamboa

The precise degree of participation of accused-appellant Lourdes Gamboa in the illegal recruitment
scheme is very clear from the. She was present when the complainants were being recruited and in
fact personally recruited some of them, providing and assisting them in filling up the application
forms, answering their queries, receiving documents and payments, and repeatedly assuring them
that they would be able to leave for their respective jobs abroad. These acts demonstrated beyond
any cavil of doubt that she was a knowing and willing participant in the recruitment activities
of Melba Miñoza and her group.

6. People vs Chowdury
an employee of a company or corporation engaged in illegal recruitment may be held liable as
principal, together with his employer, if it is shown that he actively and consciously participated in
illegal recruitment.

7. People vs Gasacao

Contrary to appellant's claim, he is not a mere employee of the manning agency but the crewing
manager. As such, he receives job applications, interviews applicants and informs them of the
agency's requirement of payment of performance or cash bond prior to the applicant's deployment.
As the crewing manager, he was at the forefront of the company's recruitment activities.

8. Republic vs PASEI

But the Court has already held, pending adjudication of this case, that the liability of corporate
directors and officers is not automatic. To make them jointly and solidarily liable with their
company, there must be a finding that they were remiss in directing the affairs of that company,
such as sponsoring or tolerating the conduct of illegal activities.

9. sunace international management services vs nlrc

There was an implied revocation of its agency relationsip with its foreign principal when, after the
termination of the original employment contract, the foreign principal directly negotiated with
Divina and entered into a new and separate employment contract in Taiwan.

10. People vs Gallardo

When the Labor Code speaks of illegal recruitment “committed against three (3) or more persons
individually or as a group,― it must be understood as referring to the number of complainants in
each case who are complainants therein, otherwise, prosecutions for single crimes of illegal
recruitment can be cumulated to make out a case of large scale illegal recruitment. In other words,
a conviction for large-scale illegal recruitment must be based on a finding in each case of illegal
recruitment of three or more persons whether individually or as a group.Â

11. Marsaman Manning Agency vs NLRC

the choice of which amount to award an illegally dismissed overseas contract worker, i.e., whether
his salaries for the unexpired portion of his employment contract or three months salary for every
year of the unexpired term, whichever is less, comes into play only when the employment contract
concerned has a term of at least one year or more (Cajeras was contracted for 10 months only).Â

12. Serrano vs Gallant Maritim Service

The subject clause “or for three months for every year of the unexpired term, whichever is
less― in the 5th paragraph of Section 10 of Republic Act No. 8042 is DECLARED
UNCONSTITUTIONAL.
13. Yap vs Thenamaris Ship’s Management

The aforesaid provision of “three months― violates the equal protection clause of the
Constitution as it only applies to overseas workers with less than one year contracts and not to local
workers with fixed term employment and also not to overseas workers with unexpired portion of
one year or more in their contract.

14. Skipper’s United Pacific vs Doza Â

the Supreme Court found the dismissal of De Gracia, et al. to be illegal since Cosmoship merely sent
a telex to Skippers, the local manning agency, claiming that De Gracia, et al. were repatriated
because the latter voluntarily pre-terminated their contracts.

15. PERT/CPM Manpower Exponent co vs Vinuy

Amendment introduced by RA 10022 cannot be given retroactive application because it will result in
an impairment of right that had accrued to the respondents by virtue of Serrano ruling.

16. Sameer Overseas Placement Agency vs Cabiles unconstitutional was Section 7 of Republic Act
No. 10022 which provides that “in case of termination of overseas employment without just,
valid, or authorized cause… the migrant worker shall be entitled… to his salaries for the
unexpired portion of his employment contract or for three months for every year of the
unexpired term, whichever is less.― What made the provision unconstitutional is the phrase
“or for three months for every year of the unexpired term, whichever is less― as this
violates the equal protection clause and substantive due process enshrined in the Constitution.

Cases on Labor Standards

1. NASECO v NLRC The civil service does not include Government owned or controlledcorporations
(GOCC) which are organized as subsidiaries of GOCC under the general corporation law

2. National Sugar Refineries Corp vs NLRC The mere fact that ann employee is designated
“manager― does not ipso facto make him one. Designation should be reconciled with the actual
job description of the employee, for it is the Job Description that determines the nature of
employment.―

3. Makati Haberdashery Inc vs NLRC Because the workers were proven to be regular employees,
they shall be entitled to minimum wages.

4. Labor Congress of the Phil vs NLRC The failure to work for one day, which resulted in the spoilage
of cheese curls does not amount to abandonment of work. The deliberate and unjustified refusal to
resume employment and not mere absence that constitutes abandonment.Â

5. Jose Rizal College vs NLRC Regular holidays specified as such by law are known to both school and
faculty members as “no class days,―certainly the latter do not expect payment for said
unworked days and this was clearly in their minds when they entered into the teaching contracts.
6. Lambo vs. NLRC G.R. No. 111042 October 26,1999 To be sure, not all quitclaims are per se
invalid or against public policy.  But those (1) where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person or (2) where the terms of settlement are
unconscionable on their face are invalid.

7. UFE VS. Vivar Jr. G.R. No. 79255 January 20, 1992 that the grant of holiday pay be effective, not
from the date of  promulgation of the Chartered Bank case nor from the date of effectivity
of the Labor Code, butfrom October 23, 1984, the date of promulgation of the  IBAA case.

8. Autobus Transport Systems Inc. vs. Bautista G.R. No. 156367 May 16,2005 The Supreme Court
emphasized that it does not mean that just because an employee is paid on commission basis he is
already barred to receive service incentive leave pay.

9. Mercidar Fishing Corporation vs. NLRC G.R. No. 112574 October 8,1998 Although fishermen
perform non-agricultural work away from their employer’s business offices, the fact remains that
throughout the duration of their work they are under the effective control and supervision of the
employer throught the vessel’s patron or master. Thus, Fishermen are not field personnels.

10. Duterte vs. Kingswood Trading Co. Inc. G.R. No. 160325 October 4,2007 The employer, before it
can legally dismiss its employee on the ground of disease, must adduce a certification from a
competent public authority that the disease of which its employee is suffering is of such nature or at
such a stage that it cannot be cured within a period of six months even with proper treatment.

11. Asian Transmission Corporation vs. Court of Appeals G.R. No. 144664 March 15, 2004 Since aÂ
worker isentitled to the enjoyment of ten (10) paidregular holidays, the fact thatÂ
two holidaysfall on the same date should not operate toreduce to nine the ten holiday pay benefits
aworker is entitled to receive

12. San Miguel Corporation vs. Court of Appeals, G.R. No. G.R. No. 146775.  January 30, 2002 Â
there should be nodistinction between Muslims and non-Muslimsas regards to payment of benefits
for Muslimholidays

13. SSS v. SSS Supervisors Union-CUGCO, 117 SCRA 746 The age-old rule governing the relation
between labor and capital, or management and employee of a "fair day's wage for a fair day's labor"
remains as the basic factor in determining employees' wages, and for that matter backwages. If
there is no work performed by the employee there can be no wage or pay unless, of course, the
laborer was able, willing and ready to work but was illegally locked out, or suspended

14. National Waterworks and Sewerage Authority vs. NWSA Consolidated Unions, et al., G.R. No. L-
18939 Â August 31, 1964 One of the distinguishing characteristics by which a managerial employee
may be known as expressed in the explanatory note of Republic Act No. 2377 is that he is not
subject to the rigid observance of regular office hours. The true worth of his service does not
depend so much on the time he spends in office but more on the results he accomplishes. In fact, he
is free to go out of office anytime.
15. Eastern Telecommunications Philippines, Inc. v. Eastern Telecoms Employees Union G.R. No.
185665, February 8,2012 A bonus is a gratuity or act of liberality of the giver which the recipient
cannot demand as amatter of right. The grant of a bonus is basically a management prerogative
which cannot be forced upon the employer who maynot be obliged to assume the onerous burden
of granting bonuses. However, a bonus becomes a demandable or enforceableobligation if the
additional compensation is granted without any conditions imposed for its payment. In such case,
the bonus istreated as part of the wage, salary or compensation of the employee.

16. Linton Commercial Co. Inc. vs. Hellera, G.R. No. 163147, October 10,2007 the validity of the
reduction of working hours, taking into consideration the ff: arrangement was temporary, it was a
more humane solution instead of retrenchment of personnel, notice and consultations with
workers, consensus on how to solve problems and sufficient proof that company was sufferingÂ
a substantial loss. Management prerogative must be exercised in good faith and with due regard to
the rights of labor.

17. Bisig Manggagawa sa Tryco vs. NLRC, G.R. No. 151309, October 15,2008 Management
prerogative of transferring and reassigning employees from one area of operation to another in
order to meet the requirements of the business is therefore generally not constitutive of
constructive dismissal.Â

18. Honda Philippines Inc. vs. Samahan ng Malayang Manggagawa sa Honda G.R. No. 145561 June
15,2005 Payments for sick, vacation and maternity leaves, night differentials, regular holiday pay
and premiums for work done on rest days and special holidays are excluded from the computation
of basic salary. Pro-rating an employee’s 13th month pay is to undermine the wisdom behind
such grant.

19. GAA vs. COURT OF APPEALS, G.R. No. L-44169 December 3, 1985. Article 1708 of the Civil Code
provides: “The laborer's wage shall not be subject to execution or attachment,except for debts
incurred for food, shelter, clothing and medical attendance." It is beyond dispute that petitioner is
not an ordinary or rank and file laborer but a responsibly placeemployee, of El Grande Hotel,
responsible for planning, directing, controlling, and coordinating the activitiesof allÂ
housekeeping personnel so as to ensure the cleanliness, maintenance and orderlinessÂ
of allguestrooms, function rooms, public areas, and the surroundings of the hotel. Considering the
importanceof petitioner's function in El Grande Hotel, it is undeniable that petitioner is occupying a
position equivalent to that of a managerial or supervisory position. We do not think that the
legislature intended the exemption in Art.1708 of th NCC to operate in favour of any laboring men
or women in the sense that their work is manual.

20. Prubankers Association vs. Prudential Bank and Trust Co. G.R. No. 131247 Jan. 25,1999 AÂ
disparity in wages between employees holding similar positions but indifferent regions
does not constitute wage distortion as contemplated by law. –Different regional wages are
mandated by the law (specifically RA 6727) as there isrecognition that there exist regional disparities
in the cost of living. RA 6727 recognizesthat there are different needs for the different situations
in different regions of the country

21. Metropolitan Bank and Trust Company Employees Union-ALU-TUCP vs. NLRC G.R. No. 102636
Sept. 10,1993 Wage Distortion means a situation where an increase in prescribed wage rates results
in the elimination or severe contradiction of intentional quantitative differences in wage
or salaryrates between and among employee groups in an establishment as to effectively
obliterate the distinctions embodied in such wage structure based on skills, length of service, or
other logical bases of differentiation.

22. Mabeza vs. NLRC, G.R. No. 118506, April 18,1997 It is true that loss of confidence is a valid
ground to dismiss an employee. But this is ideally only applied to workers whose positions require a
certain level or degree of trust particularly those who are members of the managerial staff.
Evidently, an ordinary chambermaid who has to sign out for linen and other hotel property from the
property custodian each day and who has to account for each and every towel or bedsheet utilized
by the hotel’s guests at the end of her shift would not fall under any of these two classes of
employees for which loss of confidence, if ably supported by evidence, would normally apply.

23. Philippine Duplicators Inc. vs. NLRC G.R. No. 110068, February 15,1995 Productivity bonusesÂ
are generally tied to the productivity, orcapacity for revenue production, of aÂ
corporation; such bonusesclosely resemble profit-sharing payments and have no clear
directornecessary relation to the amount of work actually done by eachindividual employee. More
generally, a bonus is an amount grantedand paid ex gratia to the employee; its payment constitutes
an actof enlightened generosity and self interest on the part of theemployer, rather
than as a demandable or enforceable obligation.Since productivity bonus is not demandable,Â
then it cannot beconsidered part of basic salary when time comes to compute 13th month pay

24. Boie-Takeda Chemicals, Inc. vs. Dela Serna, G.R. No. 92174 The exigencies of the work of
seafearers necessitates that they be employed on a contractual basis. Thus, even with the continued
r-hiring by respondent company of petitioner to serve as radi officer onboard he former’s
different vessels, this should be interpreted not as a basis for regularization but rather a series of
contract renewals.

25. Philippine Fuji Xerox Corp. vs. Trajano, G.R. No. 102552, March 24,1994 In remunerative
schemes consisting of a fixed or guaranteed wage plus commission, the fixed or guaranteed wage is
patently the "basic salary" for this is what the employee receives for a standard work period.
Commissions are given for extra efforts exerted in consummating sales or other related
transactions. They are, as such, additional pay, which this Court has made clear do not form part of
the "basic salary."

26. PT&TC vs. NLRC, G.R. No. 99858, June 5,1995 The policy of not accepting or considering as
disqualified from work any woman worker who contracts marriage runs afoul of the test of and the
right against afforded all women workers by our labor laws and by no less than the Constitution.
While it is true that the parties to a contract may establish any agreements, terms and conditions
that may deem convenient, the same should not be contrary to law, morals, good customs, public
order or public policy.

27. Barayoga vs. APT, G.R. No. 160073, October 24,2005 Workers' claims for unpaid wages and
monetary benefits cannot be paid outside of a Bankruptcy or judicial liquidation proceedings
against the employer. It is settled that the application of Article 110 of the Labor Code  is
contingent upon the institution of those proceedings, during which all creditorsareÂ
convened,their claims ascertained and inventoried, and their preferences determined.
Assured thereby is an orderly determination of the preference given to creditors' claims;
andpreserved in harmony is the legal scheme of classification, concurrence and preference of credits
inthe Civil Code, the Insolvency Law, and the Labor Code

28. Kaisahan at Kapatiran ng Mga Manggagawa at Kawani sa MWC-East Zone vs. Manila Water
Company Inc. G.R. No. 174179, November 16,2011 The award by the NLRC cannot be taken to mean
an additional grant of attorney’s fees, in violation of the ten percent (10%) limit under Article 111
of the Labor Code since it rests on an entirely different legal obligation than the one contracted
under the MOA. Simply stated, the attorney’s fees contracted under the MOA do not refer to
the amount of attorney’s fees awarded by the NLRC

29. Yrasuegui vs. PAL G.R. No. 168081,October 17,2008 Bona Fide Occupational Qualification:
employment in particular jobs may not be limited to persons of a particular sex, religion or national
origin unless the employer can show that sex, religion or national origin is an actual qualification for
performing the job. BFOQ is valid provided that it reflects an inherent quality reasonably necessary
for satisfactory job performance

30. PT&TC vs. NLRC G.R. No. 118978, May 23,1997 Same as above

31. Star Paper Corp. vs. Simbol, G.R. No. 164774,April 12,2006 ARTICLE 136. Stipulation against
marriage. – It shall be unlawful for an employer to require as a condition of employment or
continuation of employment that a woman employee shall not get married, or to stipulate expressly
or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or
to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by
reason of her marriage.

32. Duncan Association of Detailman-PTGWO vs. Galxo Welcome Philippines Inc. G.R. No. 162994
September 17,2004 Â The prohibition against pesonal or marital relationships with employees of
competitor companies upon Glaxo's employees is reasonable under the circumstances because
relationships of that nature might compromise the interests of the company. That Glaxo possesses
the right to protect its economic interest cannot be denied.

33. Domingo vs. Rayala, G.R. No. 155831, February 18,2008 It is enough that respondent's acts result
in creating an intimidating, hostile, or offensive environment for the employee, which was clearly
manifested by the fact that Domingo filed for leave of absence and requested transfer to another
unit.
CASES ON CONTRACTING

1. Aliviado vs. Procter & Gamble Phils., Inc., G.R. No. 160506, March 9,2010 “control test― is
only one of the factors that will be considered in determining whether there is labor-only
contracting. Â The existence of any one of the above factors would be sufficient.

2. San Miguel Corporation v. MAERC Integrated Services, Inc., G.R. No. 144672, July 10, 2003 While
petitioner’s checkers may not have stayed the full eight hours in the workplace because they had
to leave for their office to make their reports, their attendance need not be continuous to be
considered constant and therefore an indication of control. We find in fact that they maintained
sufficient presence at the workplace to be able to pinpoint the workers whose performance was not
at par and to report who they are. 3. Government Service Insurance System v. National Labor
Relations Commission G.R. No. 180045, November 17,2010 Petitioner cannot be allowed to deny its
obligation to respondents after it had benefited from their services. So long as the work, task, job, or
project has been performed for petitioner’s benefit or on its behalf, the liability accrues for such
services. 4. New Golden City Builders & Development Corp. v. Court of Appeals, 463 Phil. 821, 829
[2003]) Â The test to determine the existence of independent contractorship is whether one
claiming to be an independent contractor has contracted to do the work according to his own
methods and without being subject to the control of the employer, except only to the results of the
work. CASES ON TERMINATION, JUST/AUTHORIZED CAUSES/BACKWAGES/REINSTATEMENT 1. Jo
Cinema Corporation v. Abellana, G.R. No. 132837, June 28, 2001, 360 SCRA 142, 148 The
employee was placed under preventive suspension for 20 days for unauthorized encashment of
check, before the lapse of said period and while the investigation was on-going, she filed a case for
illegal dismissal. The Supreme Court ruled that she was not dismissed. She could not have been
dismissed on the day she was preventively suspended because a formal investigation was still being
conducted. In fact, she even attended said investigation where she admitted having encashed the
checks. If she was indeed dismissed on said date, as she claims, petitioners would not have
continued with he investigation. Undoubtedly, the employee pre-empted the outcome of the
investigation by filing a complaint for illegal dismissal. Thus, it was she who signified her intention
not to report for work when she filed the instant case. 2. Industrial & Transport Equipment, Inc.
v.Tugade, G.R. No. 158539, January 15,2009 Their complaint for illegal dismissal was premature,
since after the expiration of the suspension period, they refused despite due notice to report for
work. 3. Caltex Philippines, Inc. v. Agad, G.R. No. 162017, April 23, 2010, 619 SCRA 196, 207, citing
Misconduct has been defined as a transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere
error in judgment. To be serious, the misconduct must be of such grave and aggravated character.
4. AMA Computer College-East Rizal v. Ignacio, G.R. No. 178520, June 23, 2009, 590 SCRA 633 Gross
negligence has been defined as the want or absence of even slight care or diligence as to amount
to a reckless disregard of the safety of person or property.  It evinces a thoughtless disregard of
consequences without exerting any effort to avoid them. To constitute a just cause for termination
of employment, the neglect of duties must not only be gross but habitual as well. The single or
isolated act of negligence does not constitute a just cause for the dismissal of the employee. 5. St.
Michael’s Institute, et al. vs. NLRC, G.R. No. 145280, December 4, 2001; Department of Labor
Manual, Sec. 4343.01 6. Philippine Aeolus Automotive United Corporation v. NLRC, G.R. No. 124617,
April 28,2000 Even when an employee is found to have transgressed the employer's rules, in the
actual imposition of penalties upon the erring employee, due consideration must still be given to his
length of service and the number of violations committed during his employment. Where a penalty
less punitive would suffice, whatever missteps may have been committed by the employee ought
not to be visited with a consequence so severe such as dismissal from employment. 7. Libres vs.
NLRC, National Steel Corp. et al., 307 SCRA 675 [1999]) “It is the the duty of every employer to
protect his employees from oversexed superiors.― 8. Royo vs. NLRC, 256 SCRA 639 [1996]
FIGHTING WITHIN THE PREMISES OF A COMPANY IS A JUST CAUSE FOR TERMINATING ONE'S
EMPLOYMENT. - We hold that there was a just and valid cause for the dismissal of petitioners. Â
There is no question that they beat up Mario Alvarez, inflicting on him physical injuries, for which
they were convicted of slight physical injuries by the Municipal Trial Court.  The matter cannot be
treated lightly.  We agree with the NLRC that petitioners committed serious misconduct within
meaning of Art. 282(a) of the Labor Code, providing for the dismissal of employees.  The mauling
incident was not just a private matter which had no effect on the interests of the company.  The
fact is that petitioners mauled Alvarez because the latter had reported them to the management for
alleged anomalies committed against the company.  Even if it was a purely private quarrel
between petitioners and Alvarez, the fact is that, as a result of what they had done, they disturbed
the peace in the company and committed a breach of its discipline.  We have held in several
cases that fighting within the premises of a company is a just cause for terminating one's
employment. 9. Asian Design and Manufacturing Corp. vs. Hon. Deputy Minister of Labor, 142 SCRA
79 [1986]) Misconduct has been defined as improper or wrong conduct.  It is the transgression of
some established and definite rule of action, a forbidden act, a dereliction of duty, willful character,
and implies wrongful intent and not mere error of judgment.  The misconduct to be serious must
be of such grave and aggravated character and not merely trivial and unimportant.  Such
misconduct, however serious, must nevertheless be in connection with the employee’s work to
constitute just cause for his separation.[20]Â Â Thus, for misconduct or improper behavior to be a
just cause for dismissal, (a) it must be serious; (b) must relate to the performance of the
employee’s duties; and (c) must show that the employee has become unfit to continue working
for the employer.[21]Â Â Indeed, an employer may not be compelled to continue to employ such
person whose continuance in the service would be patently inimical to his employer’s business.
10. Padilla vs. NLRC and San Beda College, 273 SCRA 457 [1997]) The essence of due process in
administrative proceedings is the opportunity to explain one’s side or a chance to seek
reconsideration of the action or ruling complained of.[7]Â Thus, the Labor Code requires the
employer to furnish the employee with a written notice containing a statement of the cause for
termination and to afford said employee ample opportunity to be heard and to defend himselfÂ
with the assistance of his representative, if he so desires.  The employer is also required to notify
the worker in writing of the decision to dismiss him, stating clearly the reasons therefore.[8]Â In the
instant case, SBC amply complied with the abovementioned requisites. 11. Chua-Qua vs. Clave G.R.
No. 49549 August 30, 1990 “Private respondent [the school] utterly failed to show that petitioner
[30-year old lady teacher] took advantage of her position to court her student [16-year old]. If the
two eventually fell in love, despite the disparity in their ages and academic levels, this only lends
substance to the truism that the heart has reasons of its own which reason does not know. But,
definitely, yielding to this gentle and universal emotion is not to be so casually equated with
immorality. The deviation of the circumstances of their marriage from the usual societal pattern
cannot be considered as a defiance of contemporary social mores.― 12. Santos Jr. vs. NLRC, G.R.
No. 115795 March 6, 1998 A teacher, both in his official and personal conduct, must display
exemplary behavior. He must freely and willingly accept restrictions on his conduct that might be
viewed irksome by ordinary citizens. In other words, the personal behavior of teachers, in and
outside the classroom, must be beyond reproach. 13. Villarama vs. NLRC, G.R. No. 106341
September 2, 1994 As a managerial employee, petitioner is bound by a more exacting work ethics.
He succumbed to his moral perversity and perpetrated against his subordinate, he provides
justifiable ground for his dismissal for lack of trust and confidence. Sexual harassment is
reprehensible enough but more when inflicted by those with moral ascendancy over their victims.
14. Gilles v. Court of Appeals, G.R. No. 149273, June 5, 2009 the law recognizes and resolves such
a situation in favor of the employees in order to protect their rights from the coercive acts of the
employer. Resignation contemplates a voluntary act; thus, an employee who is forced to
relinquish his position due to the employer’s unfair or unreasonable treatment is deemed to
have been illegally terminated or discharged. The test of constructive dismissal is whether a
reasonable person in the employee’s position would have felt compelled to give up his position
under the circumstances. 15. Westin Philippine Plaza Hotel vs. NLRC, G. R. No. 121621, May 3,
1999)  the willfulness of private respondent’s insubordination was shown by his continued
refusal to report to his new work assignment.  Thus, upon receipt of the order of transfer, private
respondent simply took an extended vacation leave.  Then, when he reported back to work, he
did not discharge his duties as linen room attendant despite repeated reminders from the personnel
office as well as his union.  Worse, while he came to the hotel everyday, he just went to the union
office instead of working at the linen room.  More than that, when he was asked to explain why
no disciplinary action should be taken against him, private respondent merely questioned the
transfer order without submitting the required explanation. Based on the foregoing facts, private
respondent’s intransigence was very evident. 16. Allied Banking Corporation vs. Court of Appeals
, G.R. No. 144412.  November 18, 2003 The rule is that the transfer of an employee ordinarily lies
within the ambit of the employer’s prerogatives.[23] The employer exercises the prerogative to
transfer an employee for valid reasons and according to the requirement of its business, provided
the transfer does not result in demotion in rank or diminution of the employee’s salary, benefits
and other privileges.[24]Â In illegal dismissal cases, the employer has the burden of showing that the
transfer is not unnecessary, inconvenient and prejudicial to the displaced employee.[25] The
constant transfer of bank officers and personnel with accounting responsibilities from one branch to
another is a standard practice of Allied Bank, which has more than a hundred branches throughout
the country 17. Homeowners Savings and Loan Association, Inc. v. NLRC, G.R. No. 97067, 26
September 1996, 262 SCRA 406) The acceptability of the proposition that transfer made by an
employer for an illicit or underhanded purpose – i.e., to defeat an employee’s right to self-
organization, to rid himself of an undesirable worker, or to penalize an employee for union activities
– cannot be upheld is self-evident and cannot be gainsaid.  The difficulty lies in the situation
where no such illicit, improper or underhanded purpose can be ascribed to the employer, the
objection to the transfer being grounded solely upon the personal inconvenience or hardship that
will be caused to the employee by reason of the transfer. 18. Philippine Industrial Security Agency
Corporation v. Aguinaldo, G.R. No. 149974, June 15, 2005, 460 SCRA 229, 239; Â A transfer amounts
to constructive dismissal when the transfer is unreasonable, unlikely, inconvenient, impossible, or
prejudicial to the employee. 19. Mendoza v. Rural Bank of Lucban, G.R. No. 155421, July 7, 2004,
433 SCRA 756, 765-766 In the pursuit of its legitimate business interest, management has the
prerogative to transfer or assign employees from one office or area of operation to another --
provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the
action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or
demotion without sufficient cause. This privilege is inherent in the right of employers to control and
manage their enterprise effectively. The right of employees to security of tenure does not give them
vested rights to their positions to the extent of depriving management of its prerogative to change
their assignments or to transfer them. 20. Floren Hotel v. National Labor Relations Commission,
G.R. No. 155264, May 6, 2005, 458 SCRA 128, 145; diminution of benefits of an employee may
constitute constructive dismissal. This is “an involuntary resignation resorted to when continued
employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank
and/or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer
becomes unbearable to the employee.― 21. Jarcia Machine Shop and Auto Supply, Inc. v. NLRC,
G.R. No. 118045, January 2, 1997, 266 SCRA 97, 109) ‘In case of constructive dismissal, the
employer has the burden of proving that the transfer and demotion of an employee are for valid and
legitimate grounds such as genuine business necessity. Particularly, for a transfer not to be
considered a constructive dismissal, the employer must be able to show that such transfer is not
unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank
or a diminution of his salaries, privileges and other benefits. Failure of the employer to overcome
this burden of proof, the employee’s demotion shall no doubt be tantamount to unlawful
constructive dismissal.’22. Damasco vs. NLRC, G. R. No. 115755, December 4, 2000 As to Sia’s
allegation that Ms. Damasco committed serious misconduct or willful disobedience of lawful order
in connection with her work, we find no tenable support.  Even if Sia directed her to be assigned
at his store in Metro Manila, her act of refusing to be detailed in Metro Manila could hardly be
characterized a willful or intentional disobedience of her employer’s order. It was Sia’s order
that appears to us whimsical if not vindictive.  Reassignment to Metro Manila is prejudicial to Ms.
Damasco, as she and her family are residing in Olongapo City. This would entail separation from her
family and additional expenses on her part for transportation and food. Damasco’s reassignment
order was unreasonable, considering the attendant circumstances. 23. Phil. Telegraph and
Telephone Corp. v. Laplana. G.R. No. 76645, July 23, 1991, 199 SCRA 485 The situation here
presented is of an employer transferring an employee to another office in the exercise of what it
took to be sound business judgment and in accordance with pre-determined and established office
policy and practice, and of the latter having what was believed to be legitimate reasons for declining
that transfer, rooted in considerations of personal convenience and difficulties for the family. Under
these circumstances, the solution proposed by the employee herself, of her voluntary termination of
her employment and the delivery to her of corresponding separation pay, would appear to be the
most equitable. Certainly, the Court cannot accept the proposition that when an employee opposes
his employer's decision to transfer him to another work place, there being no bad faith or
underhanded motives on the part of either party, it is the employee's wishes that should be made to
prevail. 24. Dosch v. NLRC, 208 Phil. 259; 123 SCRA 296 (1983). There can be no dispute that the
constitutional guarantee of security of tenure mandated under Section 9, Article 2, 1973
Constitution applies to all employees and laborers, whether in the government service or in the
private sector. The fact that petitioner is a managerial employee does not by itself exclude him from
the protection of the constitutional guarantee of security of tenure. Even a manager in a private
concern has the right to be secure in his position, to decline a promotion where, although the
promotion carries an increase in his salary and rank but results in his transfer to a new place of
assignment or station and away from his family. Such an order constitutes removal without just
cause and is illegal. Nor can the removal be justified on the ground of loss of confidence as now
claimed by private respondent Northwest, insisting as it does that by petitioner's alleged
contumacious refusal to obey the transfer order, said petitioner was guilty of insubordination. 25.
Escobin vs. NLRC, G.R. No. 118159.  April 15, 1998  It was grossly inconvenient for the guards
who were residents and heads of families in Basilan.  The guards were not provided with funds to
defray their transportation and living expenses.   The dismissal in this case was too harsh a
penalty for the insubordination which was neither willful nor intentional.   The guards’
failure to answer PISI’s show-cause letters does not negate this conclusion as PISI granted other
guards a second chance to explain, an opportunity it denied Escobin and his group. 26. Yuco
Chemical Industries, Inc. vs. Ministry of Labor and Employment, 185 SCRA 727, 730-731, May 28,
1990 The managerial prerogative to transfer personnel must be exercised without grave abuse of
discretion and putting to mind the basic elements of justice and fair play. 5 Having the right
should not be confused with the manner in which that right must be exercised. Thus it cannot be
used as a subterfuge by the employer to rid himself of an undesirable worker. Nor when the real
reason is to penalize an employee for his union activities and thereby defeat his right to self-
organization. But the transfer can be upheld when there is no showing that it is unnecessary,
inconvenient and prejudicial to the displaced employee . 6 27. Manila Memorial Park Cemetery,
Inc. v. Panado, G.R. No.  167118, June 15, 2006, 490 SCRA 751, 770) An employer may terminate
the services of an employee due to loss of trust and confidence.  However, the loss must be
based not on ordinary breach by the latter of the trust reposed in him by the former, but, in the
language of Article 282(c) of the Labor Code, on willful breach.  A breach is willful if it is done
intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act
done carelessly, thoughtlessly, heedlessly or inadvertently.  Elsewise stated, it must rest on
substantial grounds and not on the employer’s arbitrariness, whims, caprices or suspicion;
otherwise, the employee would eternally remain at the mercy of the employer.  It should beÂ
genuine and not simulated; nor should it appear as a mere afterthought to justify earlier action
taken in bad faith or a subterfuge for causes which are improper, illegal or unjustified.  It has
never been intended to afford an occasion for abuse because of its subjective nature.  There
must, therefore, be an actual breach of duty committed by the employee which must be established
by substantial evidence.[32] (Underscoring ours.)  28. Premiere Development Bank v. Mantal,
G.R. No. 167716, March 23, 2006, 485 SCRA 234, 239) An employer may terminate an employee
for fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative. However, the right of an employer to terminate an employee based on
loss of confidence must not be exercised arbitrarily and without just cause. To be a valid reason for
dismissal, loss of confidence must be genuine. Uncorroborated assertions and accusations by the
employer will not suffice, otherwise it will jeopardize the constitutional guarantee of security of
tenure of the employee. 29. National Sugar Refineries Corporation v. National Labor Relations
Commission G.R. No. 122277.  February 24, 1998 the Court ruled that supervisory employees
should be considered as officers or members of the managerial staff. As officers or members of
the managerial staff, they are not entitled to overtime, rest day, and holiday pay. 30. JGB &
Associates v. National Labor Relations Commission, G.R. No. 109390.  March 7, 1996;Â
Employees enjoy security of tenure; they can only be dismissed for just cause and only after due
process.[5]Â If an employee is dismissed without just cause, he is entitled to reinstatement withÂ
backwages up to the time of his actual reinstatement,[6] if the contract of employment is not for
a definite period; or to the payment of his salaries corresponding to the unexpired portion of the
employment contract, if the contract is for a definite period.[7]Â If the dismissal is for a just cause
but it was made without due process, the employee is entitled to the payment of an indemnity.[8]
31. Chua v. National Labor Relations Commission, G.R. No. 146780, March 11, 2005, 453 SCRA 244,
254)Â Gross negligence under Article 282 of the Labor Code, as amended, connotes want of care in
the performance of one’s duties, while habitual neglect implies repeated failure to perform
one’s duties for a period of time, depending upon the circumstances.[25] Clearly, the
petitioner’s repeated failure to submit the DCRs on time, as well as the failure to submit the
doctors’call cards constitute habitual neglect of duties. Needless to state, the foregoing clearly
indicate that the employer had a just cause in terminating the petitioner’s employment. 32.
National Bookstore, Inc. v. Court of Appeals, G.R. No. 146741.  February 27, 2002) Significantly, in
order to constitute a just cause for the employee’s dismissal, the neglect of duties must not only
be gross but also habitual. Thus, the single or isolated act of negligence does not constitute a just
cause for the dismissal of the employee.[20] Verily, assuming arguendo that private
respondents were negligent, although we find otherwise, it could only be a single or an isolated act
that cannot be categorized as habitual, hence, not a just cause for their dismissal. 33. Abandonment
(De Paul/King Philip Custom Tailor v. NLRC, G.R. No. 129824, March 10,1999); Simple logic should
tell us that the receipt of Renato and Priscila Villavecer of the notices sent to them is not proof that
the other private respondents received their notices.  Furthermore, these notices were sent after
private respondents had been dismissed on 6 and 12 April 1993.  By then, the illegal dismissal of
the private respondents was already an accomplished fact.  The letters cannot validate their
illegal dismissal. It must be stressed that abandonment of work does not per se sever the employer-
employee relationship.  It is merely a form of neglect of duty, which is in turn a just cause for
termination of employment.  The operative act that will ultimately put an end to this relationship
is the dismissal of the employee after complying with the procedure prescribed by law.  If the
employer does not follow this procedure, there is illegal dismissal. 34. Habitual absenteeism
(Challenge Socks Corporation v. Court of Appeals, G.R. No. 165268, November 8,2005); and Habitual
neglect implies repeated failure to perform one’s duties for a period of time. Buguat’s
repeated acts of absences without leave and her frequent tardiness reflect her indifferent attitude
to and lack of motivation in her work. Her repeated and habitual infractions, committed despite
several warnings, constitute gross misconduct. Habitual absenteeism without leave constitute
gross negligence and is sufficient to justify termination of an employee. 35. Continued unexplained
absences (Philippine Geothermal, Inc. v. NLRC, G.R. No. 106370, September 8,1994) Petitioner has
not been shown to be without sympathy or concern for Alvarez. He was given fifty (50) days work-
connected accident (WCA) leave with pay to allow him to recuperate from his injury without loss of
earnings. He was allowed to use his leave credits and was actually given an additional fifteen (15)
days WCA leave to allow him to consult his doctors and fully recover from his injuries. Moreover,
petitioner gave Alvarez several warnings to report for work, otherwise, he would face disciplinary
sanctions. In spite of these warnings, Alvarez was absent without official leave (AWOL) for eighteen
(18) days. Under company policy, of which Alvarez was made aware, employees who incur without
valid reason six (6) or more absences are subject to dismissal. 36. Philippine Airlines, Inc. v. NLRC,Â
G.R. No. 82471, February 18, 1991, 194 SCRA 139 Philippine Airlines (PAL) cannot be legally
compelled to continue with the employment of a person admittedly guilty of gross negligence in the
performance of his duties although it was his first offense. In that case, we noted that a mere
delay on PAL's flight schedule due to aircraft damage entails problems like hotel accommodations
for its passengers, re-booking, the possibility of law suits, and payment of special landing fees not to
mention the soaring costs of replacing aircraft parts. 37. Fuentes v. National Labor Relations
Commission, G.R. No. L-75955, October 28, 1988, 166 SCRA 752 it would be unfair to compel
Philippine Banking Corporation to continue employing its bank teller. In that case, we observed
that although the teller's infraction was not habitual, a substantial amount of money was lost. The
deposit slip had already been validated prior to its loss and the amount reflected thereon is already
considered as current liabilities in the bank's balance sheet. Indeed, the sufficiency of the evidence
as well as the resultant damage to the employer should be considered in the dismissal of the
employee. In this case, the damage went as far as claiming the life of a child. 38. School of the
Holy Spirit of Quezon City vs. Taguiam, G.R. No. 165565,July 14,2008 respondent's negligence,
although gross, was not habitual. In view of the considerable resultant damage, however, we are in
agreement that the cause is sufficient to dismiss respondent. This is not the first time that we have
departed from the requirements laid down by the law that neglect of duties must be both gross and
habitual. 39. Columbus Philippine Bus Corporation v. NLRC, 417 Phil. 81, 100 [2001] For a valid
finding of abandonment, two (2) factors must be present, viz: (a) the failure to report for work or
absence without valid or justifiable reason; and (b) a clear intention to sever employer-employee
relationship, with the second element as the more determinative factor being manifested by some
overt acts.[15]Â The herein petitioner failed to present evidence to justify the dismissal of the
private respondents.  The position paper of petitioner merely contains bare allegations that the
hiring of private respondents was purely on commission basis; that they have no working hours; that
they are not required to work everyday and that they work only when they wish to earn.  It also
alleged that private respondents were not dismissed nor suspended, but that they allegedly
abandoned their jobs by simply failing to work. 40. Sta. Catalina College v. NLRC, G.R. No. 144483, 19
November 2003) Â HILARIA ABANDONED HER WORK, for which reason, she could not be credited
for her services from 1955 to 1970 in determining her retirements benefits for after 1 year of leave
of absence in 1971 without her requesting for extension thereof as in fact she had not been heard
from until she resurfaces in 1982 when she reapplied, she abandoned her teaching position as in
fact she was employed elsewhere and effectively relinquished the retirement benefits that
accumulated during said period. 41. Jo vs. NLRC, G.R. No. 121605. February 2, 2000 In determining
the existence of an employer-employee relationship, the following elements are considered: 1)
selection and engagement of worker; 2) power of dismissal; 3) the payment of wages; and 4) the
power to control the worker’s conduct, with the latter assuming primacy in the overall
consideration. The power of control refers to the existence of the power and not necessarily to the
actual exercise thereof. It is not essential for the employer to actually supervise the performance of
duties of the employee; it is enough that the employer has the right to wield that power. 42. A’
Prime Security Services Inc. v. NLRC, 220 SCRA 142, 145 [1993] The Court cannot uphold and give
weight to private respondent’s resignation letter (Annex "D"[8]) which appears to have been
written and submitted at the instance of petitioner. Its form is of the company’s and its wordings
are more of a waiver and quitclaim. Moreover, the supposed resignation was not acknowledged
before a notary public. Petitioner’s failure to deny that Sugarland is its sister company and that
petitioner absorbed Sugarland’s security contract and security personnel assumes overriding
significance over the resignation theorized upon, evincing petitioner’s design to ignore or violate
labor laws through the use of the veil of corporate personality. The Court cannot sanction the
practice of some companies which, shortly after a worker has become a regular employee, effects
the transfer of the same employee to another entity whose owners are the same, or identical, in
order to deprive subject employee of the benefits and protection he is entitled to under the law. 43.
Bombase v. NLRC, 245 SCRA 496, 500 [1995] the relationship between the petitioner and the
officials of private respondent has been strained by too much antagonism. Officials of private
respondent have expressed lack of confidence on petitioner while petitioner has moved to cite the
general manager of private respondent for contempt as indeed he was fined for contempt. Given
this strained relationship, the reinstatement of petitioner will be neither beneficial for her nor her
employer. 44. Bristol Myers Squibb (Phils.), Inc. v. Baban, G.R. No. 167449, December 17, 2008,Â
574 SCRA 198 Respondent anchors his plea of mercy on filial loyalty to his father and the fact that
the samples were still going to the proper parties.  His father’s loss is of no moment since Â
petitioner  has  a  right  not  to  associate their product with winning or losing
politicians.  It has every right to ensure that the distribution of medical samples is done in the
manner exactly prescribed.  Moreover, his claim that the samples would have still gone to the Â
proper  parties  is  wrong.  These products were supposed to have been returned to
petitioner or one of its agents. 45. Philippine Pizza, Inc. v. Bungabong, G.R. No. 154315, May 9,2005
 the employee was not afforded due process despite the dismissal being upon a just cause,
considering that he was not given a fair and reasonable opportunity to confront his accusers and to
defend himself against the charge of theft notwithstanding his having submitted his explanation
denying that he had stolen beer from the company dispenser. 46. Mendoza vs. HMS Credit
Corporation, G.R. No. 187232, April 17,2013 It is evident that although there was a just cause in
terminating the services of Mendoza, respondents were amiss in complying with the two-notice
requirement. Following prevailing jurisprudence on the matter, if the dismissal is based on just
cause, then the non-compliance with non-procedural due process should not render the termination
from employement illegal or ineffectual. Instead, the employer must indemnify the employee in the
form of nominal damages 47. Community Rural Bank of San Isidro (N.E.), Inc. v. Paez, G.R. No.
158707, November 27,2006 in the case of supervisors or personnel occupying positions of
responsibility, loss of trust justifies termination.[45] Â Loss of confidence as a just cause for
termination of employment is premised on the fact that an employee concerned holds a position of
trust and confidence. Â This situation holds where a person is entrusted with confidence on delicate
matters, such as the custody, handling, or care and protection of the employer’s property.  But,
in order to constitute a just cause for dismissal, the act complained of must be “work-related―
such as would show the employee concerned to be unfit to continue working for the employer. 48.
Concepcion vs. Minex Import Corp., G.R. No. 153569, January 24,2012 It is 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. In the
present case, no less than the DOJ Secretary found probable cause for qualified theft against
Concepcion. That finding was enough to justify her termination for loss of confidence. 49. Nicolas v.
National Labor Relations Commission, (327 Phil. 883, 886-887 (1996) Â Under the law, proof beyond
reasonable doubt is required to sustain a criminal conviction, an inapplicable requirement in a labor
complaint.  In fact, and as correctly ruled by the NLRC, the judgment in a criminal case has no
binding or conclusive effect in a labor case.  Conviction of an employee in a criminal case is not
indispensable to warrant an employee’s dismissal. 50. Reno Foods, Inc. v. Nagkakaisang Lakas ng
Manggagawa (NLM) – Katipunan, G.R. No. 164016, 15 March 2010, 615 SCRA 240  Criminal
cases require proof beyond reasonable doubt while labor disputes require  only  Â
substantial  evidence,   which  means  such   relevant  evidence a reasonableÂ
mind might accept as adequate to justify a conclusion.[20]Â Â The evidence in this case was
reviewed by the appellate court and two labor tribunals endowed with expertise on the matter –
the Labor Arbiter and the NLRC.  They all found substantial evidence to conclude that CaporÂ
had been validly dismissed for dishonesty or serious misconduct.  It is settled that factual findings
of quasi-judicial agencies are generally accorded respect and finality so long as these are supported
by substantial evidence.  In the instant case, we find no compelling reason to doubt the common
findings of the three reviewing bodies. 51. Lynvil Fishing Enterprises, Inc. v. Ariola, G.R. No.181974,
February 1,2012  that proof beyond reasonable doubt of an employee’s misconduct is not
required when loss of confidence is the ground for dismissal. It is sufficient if the employer has
“some basis― to lose confidence or that the employer has reasonable ground to believe or to
entertain the moral conviction that the employee concerned is responsible for the misconduct and
that the nature of his participation therein rendered him absolutely unworthy of the trust and
confidence demanded by his position. 52. Lim v. National Labor Relations Commission, G.R. No.
118434, July 26, 1996, 259 SCRA 485, 496-497  “gross inefficiency falls within the purview of
“other causes analogous to the foregoing,― and constitutes, therefore, just cause to terminate
an employee under Article 282 of the Labor Code.  One is analogous to another if it is susceptible
of comparison with the latter either in general or in some specific detail; or has a close relationship
with the latter.[32] “Gross inefficiency― is closely related to “gross neglect,― for both
involve specific acts of omission on the part of the employee resulting in damage to the employer or
to his business. 53. Leonardo v. National Labor Relations Commission, G.R. No. 125303 June 16,
2000, 333 SCRA 589, 598-599 the right to demote an employee also falls within the category of
management prerogatives. An employer is entitled to impose productivity standards for its
workers, and in fact, non-compliance may be visited with a penalty even more severe than
demotion. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments
due to inefficiency may constitute just cause for dismissal. 54. Aliling v. Feliciano, G.R. No. 185829,
April 25,2012 The letter-offer to Aliling states that the regularization standards or the performance
norms to be used are still to be agreed upon by him and his supervisor. Moreover, Aliling was
assigned to GX trucking sales, an activity entirely different to the Seafreight Sales for which he was
originally hired and trained for. In the present case, there was no proof that Aliling was informed of
the standards for his continued employment, such as the sales quota, at the time of his
engagement. 55. Cathedral School of Technology v. NLNRC, G.R. No. L-101438 October 13, 1992) Â
there can be no award for backwages, for it must be pointed out that while backwages are granted
on the basis of equity for earnings which a worker or employee has lost due to his illegal dismissal,Â
24Â where private respondent's dismissal is for just cause, as is the case herein, there is no factual
or legal basis to order payment of backwages; otherwise, private respondent would be unjustify
enriching herself at the expense of petitioners. 25 Where the employee's dismissal was for a just
cause, it would be neither fair nor just to allow the employee to recover something he has not
earned or could not have earned 56. Oania v. National Labor Relations Commission, G.R. Nos.
97162-64, 1 June 1995, 244 SCRA 669, 674 Violation of a company rule prohibiting the infliction of
harm or physical injury against any person under the particular circumstances provided for in the
same rule may be deemed analogous to "serious misconduct" stated in Art. 282 (a) above. To
repeat, however, there is no substantial evidence definitely pointing to petitioners as the
perpetrators of the mauling of Malong. What is an established fact is that, after investigation,
private respondent dismissed them and, thereafter, a criminal complaint was filed against
petitioners M.F. VIOLAGO OIL TANK TRUCKS VS NLRC There is constructive dismissal of employees
when the proprietor of an oil-tank trucking business, withdrew the trucks driven by them for no just
cause and without prior clearance from the Ministry of Labor and when the employer unilaterally
reduced the employees' wages in 1979 without their consent and with no Ministry of Labor's
authority. PHIL SHEET METAL WORKERS' UNION VS COURT OF INDUSTRIAL RELATIONS In
formulating the “substitutionary― doctrine, the only consideration involved was the
employees‘ (principal) interest in the existing bargaining agreement. The agent’s (union)
interest never entered the picture. The majority of the employees, as an entity under the statute, is
the true party in interest to the contract, holding rights through the agency of the union
representative. Thus, any exclusive interest claimed by the agent is defeasible at the will of the
principal. The “substitutionary― doctrine only provides that the employees cannot revoke the
validly executed collective bargaining contract with their employer by the simple expedient of
changing their bargaining agent. And it is in the light of this that the phrase “said new agent
would have to respect said contract― must be understood. It only means that the employees, thru
their new bargaining agent, cannot renege on their collective bargaining contract, except of course
to negotiate with management for the shortening thereof. The “substitutionary― doctrine
cannot be invoked to support the contention that a newly certified collective bargaining agent
automatically assumes all the personal undertakings — like the no-strike stipulation here — in
the collective bargaining agreement made by the deposed union. When BBWU bound itself and its
officers not to strike, it could not have validly bound also all the other rival unions existing in the
bargaining units in question. BBWU was the agent of the employees, not of the other unions which
possess distinct personalities. EDGE APPAREL VS NLRC Retrenchment, in contrast to redundancy, is
an economic ground to reduce the number of employees. In order to be justified, the termination
of employment by reason of retrenchment must be due to business losses or reverses which are
serious, actual and real.Not every loss incurred or expected to be incurred by the employer will
justify retrenchment, since, in the nature of things, the possibility of incurring losses is constantly
present, in greater or lesser degree, in carrying on the business operations.Retrenchment is
normally resorted to by management during periods of business reverses and economic difficulties
occasioned by such events as recession, industrial depression, or seasonal fluctuations. It is an act of
the employer of reducing the work force because of losses in the operation of the enterprise, lack of
work, or considerable reduction on the volume of business.Retrenchment is, in many ways, a
measure of last resort when other less drastic means have been tried and found to be inadequate. A
lull caused by lack of orders or shortage of materials must be of such nature as would severely affect
the continued business operations of the employer to the detriment of all and sundry if not properly
addressed. The institution of "new methods or more efficient machinery, or of automation" is
technically a ground for termination of employment by reason of installation of labor-saving devices
but where the introduction of these methods is resorted to not merely to effect greater efficiency in
the operations of the business but principally because of serious business reverses and to avert
further losses, the device could then verily be considered one of retrenchment. The general
standards or elements needed for the retrenchment to be valid - i.e., that the losses expected are
substantial and not merely de minimis in extent; that the expected losses are reasonably imminent
such as can be perceived objectively and in good faith by the employer; that the retrenchment is
reasonably necessary and likely to effectively prevent the expected losses; and that the imminent
losses sought to be forestalled are substantiated[21] -were adequately shown in the present case.
WILTSHIRE FILE CO. VS NLRC Redundancy in an employer's personnel force necessarily or even
ordinarily refers to duplication of work. That no other person was holding the same position that
private respondent held prior to the termination of his services, does not show that his position had
not become redundant. Indeed, in any well-organized business enterprise, it would be surprising to
find duplication of work and two (2) or more people doing the work of one person. We believe that
redundancy, for purposes of our Labor Code, exists where the services of an employee are in excess
of what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a
position is redundant where it is superfluous, and superfluity of a position or positions may be the
outcome of a number of factors, such as overhiring of workers, decreased volume of business, or
dropping of a particular product line or service activity previously manufactured or undertaken by
the enterprise. AMERICAN HOME ASSURANCE CO. VS NLRC While it is true that an employer’s
exercise of management prerogatives, with or without reason, does not per se constitute unjust
discrimination, such exercise, if clearly shown to be in grave abuse of discretion, may be looked into
by the courts. Indeed, the hiring, firing, transfer, demotion, and promotion of employees are
traditionally identified as management prerogatives. However, they are not absolute management
prerogatives. They are subject to limitations found in law, a collective bargaining agreement, or
general principles of fair play and justice LOPEZ SUGAR CORPORATION VS FRANCO A redundant
position is one rendered superfluous by any number of factors, such as over-hiring of workers,
decreased volume of business, dropping of a particular product line previously manufactured by the
company or phasing out of a service activity priorly undertaken by the business. Under these
conditions, the employer has no legal obligation to keep in its payroll more employees than are
necessary for the operation of its business. Contrary to the petitioner’s claim, the employer must
comply with the following requisites to ensure the validity of the implementation of a redundancy
program: (1) a written notice served on both the employees and the Department of Labor and
Employment at least one month prior to the intended date of retrenchment; (2) payment of
separation pay equivalent to at least one month pay or at least one month pay for every year of
service, whichever is higher; (3) good faith in abolishing the redundant positions; and (4) fair and
reasonable criteria in ascertaining what positions are to be declared redundant and accordingly
abolished. ASUFRIN JS. VS. SAN MIGUEL The determination that employee’s services are no
longer necessary or sustainable and, therefore, properly terminable is an exercise of business
judgment of the employer. The wisdom or soundness of this judgment is not subject to
discretionary review of the Labor Arbiter and the NLRC, provided there is no violation of law and no
showing that it was prompted by an arbitrary or malicious act. In other words, it is not enough for a
company to merely declare that it has become overmanned. It must produce adequate proof that
such is the actual situation to justify the dismissal of the affected employees for redundancy.
PANLILIO VS NLRC We have held that it is important for a company to have fair and reasonable
criteria in implementing its redundancy program, such as but not limited to, (a) preferred status, (b)
efficiency and (c) seniority PHILIPPINE CARPET EMPLOYEES ASSOCIATION VS SECRETARY OF LABOR
AND EMPLOYMENT The prerogative of an employer to retrench its employees must be exercised
only as a last resort, considering that it will lead to the loss of the employees’livelihood. It is
justified only when all other less drastic means have been tried and found insufficient or
inadequate. Moreover, the employer must prove the requirements for a valid retrenchment by clear
and convincing evidence; otherwise, said ground for termination would be susceptible to abuse by
scheming employers who might be merely feigning losses or reverses in their business ventures in
order to ease out employees. The requirements are:             xxx (1) that the
retrenchment is reasonably necessary and likely to prevent business losses which, if already
incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are
reasonably imminent as perceived objectively and in good faith by the employer; (2) that the
employer served written notice both to the employees and to the Department of Labor and
Employment at least one month prior to the intended date of retrenchment; (3) that the employer
pays the retrenched employees separation pay equivalent to one month pay or at least ½ month
pay for every year of service, whichever is higher; (4) that the employer exercises its prerogative to
retrench employees in good faith for the advancement of its interest and not to defeat or
circumvent the employees’ right to security of tenure; and (5) that the employer used fair and
reasonable criteria in ascertaining who would be dismissed and who would be retained among the
employees, such as status (i.e., whether they are temporary, casual, regular or managerial
employees), efficiency, seniority, physical fitness, age, and financial hardship for certain workers. Â
         What the law speaks of is serious business losses or financial reverses. Sliding
incomes or decreasing gross revenues are not necessarily losses, much less serious business losses
within the meaning of the law. The bare fact that an employer may have sustained a net loss, such
loss, per se, absent any other evidence on its impact on the business, nor on expected losses that
would have been incurred had operations been continued, may not amount to serious business
losses mentioned in the law.The employer must also show that its losses increased through a period
of time and that the condition of the company will not likely improve in the near future. PEPSI COLA
PRODUCTS, PHILIPPINES VS MOLON Retrenchment is defined as the termination of employment
initiated by the employer through no fault of the employee and without prejudice to the latter,
resorted by management during periods of business recession, industrial depression or seasonal
fluctuations or during lulls over shortage of materials. It is a reduction in manpower, a measure
utilized by an employer to minimize business losses incurred in the operation of its business. COCA-
COLA BOTTLERS INC VS NLRC The definition that regular employees are those who perform activities
which are desirable and necessary for the business of the employer is not determinative in this
case. Any agreement may provide that one party shall render services for and in behalf of another
for a consideration (no matter how necessary for the latter's business) even without being hired as
an employee. This is precisely true in the case of an independent contractorship as well as in an
agency agreement. The Court agrees with the petitioner's argument that Article 280 is not the
yardstick for determining the existence of an employment relationship because it merely
distinguishes between two kinds of employees, i.e., regular employees and casual employees, for
purposes of determining the right of an employee to certain benefits, to join or form a union, or to
security of tenure. Article 280 does not apply where the existence of an employment relationship
is in dispute. INTERNATIONAL HARDWARE INC VS NLRC In case of termination due to the installation
of labor-saving devices or redundancy the worker affected thereby shall be entitled to separation
pay equivalent to at least one (1) month pay or to at least one month pay for every year of service,
whichever is higher. However, in case of retrenchment to prevent losses and in cases of closure or
cessation of operations of the establishment or undertaking not due to serious business losses or
financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half
(1/2) month pay for every year of service, whichever is higher. SEBUGUERO VS NLRC The
requirement of notice to both the employees concerned and the Department of Labor and
Employment (DOLE) is mandatory and must be written and given at least one month before the
intended date of retrenchment. In this case, it is undisputed that the petitioners were given notice
of the temporary lay-off. they were already on temporary lay-off at the time notice should have
been given to them is not an excuse to forego the one-month written notice because by this time,
their lay-off is to become permanent and they were definitely losing their employment. INDUSTRIAL
TIMBER CORPORATION VS ABABON Where the dismissal is based on an authorized cause under
Article 283 of the Labor Code but the employer failed to comply with the notice requirement, the
sanction should be stiff as the dismissal process was initiated by the employer’s exercise of his
management prerogative, as opposed to a dismissal based on a just cause under Article 282 with the
same procedural infirmity where the sanction to be imposed upon the employer should be
tempered as the dismissal process was, in effect, initiated by an act imputable to the employee.
AGABON VS NLRC Where there is just cause for dismissal but due process has not been properly
observed by an employer, it would not be right to order either the reinstatement of the dismissed
employee or the payment of backwages to him. In failing, however, to comply with the procedure
prescribed by law in terminating the services of the employee, the employer must be deemed to
have opted or, in any case, should be made liable, for the payment of separation pay. PHILIPPINE
ROBACCO FLUE-CURING AND REDRYING CORPORATION VS NLRC The amount of separation pay is
based on two factors: the amount of monthly salary and the number of years of service. Although
the Labor Code provides different definitions as to what constitutes “one year of service,― Book
Six does not specifically define “one year of service― for purposes of computing separation
pay. However, Articles 283 and 284 both state in connection with separation pay that a fraction
of at least six months shall be considered one whole year. COCA COLA BOTTLERS VS NLRC the
company is required to notify both the employees concerned and the Department of Labor and
Employment ("DOLE") at least one (1) month before the intended date of closure. The notice to the
DOLE is, of course, intended to enable the proper authorities to determine after hearing whether
such closure is being done in good faith, i.e., for bonafide business reasons, or whether, to the
contrary, the closure is being resorted to as a means of evading compliance with the just obligations
of the employer to the employees affected. JAT GENERAL SERVICES VS NLRC A careful examination
of Article 283 of the Labor Code shows that closure or cessation of business operation as a valid and
authorized ground of terminating employment is not limited to those resulting from business losses
or reverses. Said provision in fact provides for the payment of separation pay to employees
terminated because of closure of business not due to losses, thus implying that termination of
employees other than closure of business due to losses may be valid. CAFFCO INTERNATIONAL
LIMITED VS OFFICE OF THE MINISTER-MINISTRY OF LABOR AND EMPLOYMENT There are three (3)
requirements are necessary for a valid cessation of business operations, namely: (a) service of a
written notice to the employees and to the MOLE at least one (1) month before the intended date
thereof; (b) the cessation of business must be bona fide in character; and (c) payment to the
employees of termination pay amounting to at least one-half (1/2) month pay for every year of
service, or one (1) month pay, whichever is higher. CEBU ROYAL PLANT VS DEPUTY MINISTER OF
LABOR Where the employee suffers from a disease and his continued employment is prohibited by
law or prejudicial to his health or to the health of his co-employees, the employer shall not
terminate his employment unless there is a certification by a 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. If the disease or ailment can be cured within the
period, the employer shall not terminate the employee but shall ask the employee to take a leave.
The employer shall reinstate such employee to his former position immediately upon the
restoration of his normal health. ALABANG COUNTRY CLUB VS NLRC Closure of a business or
undertaking due to business losses is the reversal of fortune of the employer whereby there is a
complete cessation of business operations to prevent further financial drain upon an employer who
cannot pay anymore his employees since business has already stopped. One of the prerogatives of
management is the decision to close the entire establishment or to close or abolish a department or
section thereof for economic reasons, such as to minimize expenses and reduce capitalization.While
the Labor Code provides for the payment of separation package in case of retrenchment to prevent
losses, it does not obligate the employer for the payment thereof if there is closure of business due
to serious losses. MERIN VS NLRC Fitness for continued employment cannot be compartmentalized
into tight little cubicles of aspects of character, conduct and ability separate and independent of
each other. While it may be true that petitioner was penalized for his previous infractions, this does
not and should not mean that his employment record would be wiped clean of his infractions.Â
After all, the record of an employee is a relevant consideration in determining the penalty that
should be meted out since an employee’s past misconduct and present behavior must be taken
together in determining the proper imposable penalty Despite the sanctions imposed upon
petitioner, he continued to commit misconduct and exhibit  undesirable behavior on board.Â
Indeed, the employer cannot be compelled to retain a misbehaving employee, or one who is guilty
of acts inimical to its interests. It has the right to dismiss such an employee if only as a measure of
self-protection. FILIPRO INC VS THE HON. MINISTER BLAS OPLE While it is not generally possible for
an employee to anticipate when he will be ill or have to attend to some family problem or
emergency, and be able to give prior notice to his employer, he should give such notice when he will
be absent for some other cause, such as when he will attend to some other business elsewhere, for
such engagements can be properly scheduled by him so as not to interfere with his regular working
hours and disrupt the operations of the company in his particular area of assignment. Without prior
notice of the employee's absence, the company is not afforded enough time to get a temporary
replacement for him. MERCURY DRUG CO. INC VS CIR Even under the Termination Pay Law, the
alleged quarrel between private respondent Dayao and one Ranin, the president of the labor union,
in the presence of herein petitioner Mariano Que as manager of petitioner corporation, is not one of
the grounds justifying the dismissal of private respondent Dayao. It is not even analogous to "serious
misconduct or willful disobedience of the orders of his employer or its representative in connection
with his work." FERRER VS NLRC Security of Tenure. — In cases of regular employment, the
employer shall not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual reinstatement. PINES CITY
EDUCATIONAL CENTER VS NLRC The amendment to Art. 279 of the Labor Code introduced by Rep.
Act. No. 6715 inserted the qualification "full" to the word "backwages". The intent of the law seems
to be clear. The plain words of the statute provide that an employee who is unjustly dismissed is
entitled to FULL backwages from the time of his dismissal to actual reinstatement. The law provides
no qualification nor does it state that income earned by the employee during the period between
his unjust dismissal and reinstatement should be deducted from such backwages. When the law
does not provide, the court should not improvise.chanroblesvirtualawlibrarychanrobles virtual law
library BUSTAMANTE VS NLRC In accordance with the above provision, an illegally dismissed
employee is entitled to his full backwages from the time his compensation was withheld from him
(which , as a rule, is from the time of his illegal dismissal) up to the time of his actual
reinstatement. It is true that this Court had ruled in the case of Pines City Educational Center vs.
NLRC (G.R. No. 96779, 10 November 1993, 227 SCRA 655) that "in ascertaining the total amount of
backwages payable to them (employees), we go back to the rule prior to the Mercury Drug rule that
the total amount derived from employment elsewhere by the employee from the date of dismissal
up to the date of reinstatement, if any, should be deducted therefrom."The rationale for such ruling
was that, the eraning derived elsewhere by the dismissed employee while litigating the legality of
his dismissal, should be deducted from the full amount of backwages which the law grants him upon
reinstatement, so as not to unduly or unjustly enrich the employee at the expense of the employer.
PARAMOUNT VINYL PRODUCTS CORPORATION VS NLRC Well-settled is the rule that the perfection
of an appeal within the statutory or reglementary period is not only mandatory, but also
jurisdictional. Failure to interpose a timely appeal (or a motion for reconsideration) renders the
assailed decision, order or award final and executory that deprives the appellate body of any
jurisdiction to alter the final judgment. Equitable Banking Corporation (now known as Equitable-PCI
Bank) V. Ricardo Sadac G.R No. 164772, June 8,2006: when a final judgment becomes executory, it
thereby becomes immutable and unalterable. The judgment may no longer be modified in any
respect, even if the modification is meant to correct what is perceived to be an erroneous
conclusion of fact or law, and regardless of whether the modification is attempted to be made by
the Court rendering it or by the highest Court of the land. The only recognized exceptions are the
correction of clerical errors or the making of so-called nunc pro tunc entries which cause no
prejudice to any party, and, of course, where the judgment is void. General Baptist Bible College v.
National Labor Relations Commission "The term "backwages without qualification and deduction"
means that the workers are to be paid their backwages fixed as of the time of the dismissal or strike
without deduction for their earnings elsewhere during their layoff and without qualification of their
wages as thus fixed; i.e., unqualified by any wage increases or other benefits that may have been
received by their co-workers who are not dismissed or did not go on strike. Awards including salary
differentials are not allowed. The salary base properly used should, however, include not only the
basic salary but also the emergency cost of living allowances and also transportation allowances if
the workers are entitled thereto. Paguio v. Philippine Long Distance Telephone Co., Inc. The Court
has held that in determining entitlement to moral damages, it suffices to prove that the claimant
has suffered anxiety, sleepless nights, besmirched reputation and social humiliation by reason of the
act complained of. Exemplary damages, on the other hand, are granted in addition to moral
damages “by way of example or correction for the public good.―Furthermore, as petitioner was
compelled to litigate and incur expenses to enforce and protect his rights, he is entitled to an award
of attorney’s fees. The amount of damages recoverable is, in turn, determined by the business,
social and financial position of the offended parties and the business and financial position of the
offender. Reyes vs. NLRC, G.R. No. 180551, February 10,2009 Article 279 of the Labor Code provides
that an illegally dismissed employee shall be entitled, inter alia, to the payment of his full
backwages, inclusive of allowances and to his other benefits or their monetary equivalent computed
from the time that his compensation was withheld from him, i.e., from the time of his illegal
dismissal, up to the time of his actual reinstatement. Thus, where reinstatement is adjudged, the
award of backwages and other benefits continues beyond the date of the Labor Arbiter’s
Decision ordering reinstatement and extends up to the time said order of reinstatement is actually
carried out PIONEER TEXTURIZING CORP. and/or JULIANO LIM, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION, PIONEER TEXTURIZING WORKERS UNION and LOURDES A. DE JESUS,
respondents. In case the decision includes an order of reinstatement, the Labor Arbiter shall direct
the employer to immediately reinstate the dismissed or separated employee even pending appeal.Â
The order of reinstatement shall indicate that the employee shall either be admitted back to work
under the same terms and conditions prevailing prior to his dismissal or separation or, at the option
of the employer, merely reinstated in the payroll.― In declaring that reinstatement order is not
self-executory and needs a writ of execution, the Court, in Maranaw, adverted to the rule provided
under Article 224. We said: “It must be stressed, however, that although the reinstatement
aspect of the decision is immediately executory, it does not follow that it is self-executory. There
must be a writ of execution which may be issued motu proprio or on motion of an interested party.Â
Article 224 of the Labor Code provides: ‘ART. 224. Execution of decisions, orders or awards.
–(a) The Secretary of Labor and Employment or any Regional Director, the Commission or any
Labor Arbiter, or med-arbiter or voluntary arbitrator may, motu propio or on motion of any
interested party, issue a writ of execution on a judgment within five (5) years from the date it
becomes final and executory …’Pfizer Inc. vs. Velasco Reinstatement, as a labor law concept,
means the admission of an employee back to work prevailing prior to his dismissal; restoration to a
state or position from which one had been removed or separated, which presupposes that there
shall be no demotion in rank and/or diminution of salary, benefits and other privileges; if the
position previously occupied no longer exists, the restoration shall be to a substantially equivalent
position in terms of salary, benefits and other privileges.19 Management’s prerogative to
transfer an employee from one office or station to another within the business establishment,
however, generally remains unaffected by a reinstatement order, as long as there is no resulting
demotion or diminution of salary and other benefits and/or the action is not motivated by
consideration less than fair or effected as a punishment or to get back at the reinstated employee.
Genuino v. National Labor Relations Commission It is established in jurisprudence that
reinstatement means restoration to a state or condition from which one had been removed or
separated. The person reinstated assumes the position he had occupied prior to his dismissal.
Reinstatement presupposes that the previous position from which one had been removed still
exists, or that there is an unfilled position which is substantially equivalent or of similar nature as
the one previously occupied by the employee. GARCIA VS PAL Worth stressing, upon appointment
by the SEC of a rehabilitation receiver, all actions for claims against the corporation pending before
any court, tribunal or board shall ipso jure be suspended. the actions that are suspended cover all
claims against the corporation whether for damages founded on a breach of contract of carriage,
labor cases, collection suits or any other claims of a pecuniary nature.19 No exception in favor of
labor claims is mentioned in the law. KIMBERLY CLARK PHILS VS FACUNDO Labor disputes naturally
involve strained relations between labor and management, and that in most strikes, the relations
between the strikers and the non-strikers will similarly be tense. Bitter labor disputes always leave
an aftermath of strong emotions and unpleasant situations.[18]cralaw Thus, the doctrine of strained
relations should be strictly applied[19]cralaw and must be demonstrated as a fact.[20]cralaw This,
petitioner failed to do. Nevertheless, in case of strained relations or the nonavailability of positions,
the employer is given the option to reinstate the employee merely in the payroll precisely to avoid
the intolerable presence in the workplace by the unwanted employee. Philippine Tobacco Flue-
Curing & Redrying Corporation VS NLRC Loss of confidence as a just cause for termination of
employment is premised from the fact that an employee concerned holds a position of trust and
confidence. However, in order to constitute a just cause for dismissal, the act complained of must be
work-related such as would show the employee concerned to be unfit to continue working for the
employer. Abaria v. NLRC, G.R. No. 154113 As a general rule, back wages are granted to indemnify a
dismissed employee for his loss of earnings during the whole period that he is out of his job.
Considering that an illegally dismissed employee is not deemed to have left his employment, he is
entitled to all the rights and privileges that accrue to him from the employment.37 The grant of back
wages to him is in furtherance and effectuation of the public objectives of the Labor Code, and is in
the nature of a command to the employer to make a public reparation for his illegal dismissal of the
employee in violation of the Labor Code. San Miguel Corporation v. Lao The policy of social justice is
not intended to countenance wrongdoing simply because it is committed by the underprivileged. At
best it may mitigate the penalty but it certainly will not condone the offense.― the Court,
categorizing the two causes for the dismissal of an employee - “just causes― under Article 282
of the Labor Code and “authorized causes― under Article 283 and 284 of the same code -
reiterated that an employee whose employment was terminated for a just cause would not be so
entitled as a matter of right to the payment of separation benefits. PLDT VS NLRC Separation pay
shall be allowed as a measure of social justice only in those instances where the employee is validly
dismissed for causes other than serious misconduct or those reflecting on his moral character.
Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving
moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be
required to give the dismissed employee separation pay, or financial assistance, or whatever name it
is called, on the ground of social justice. DUP SOUND PHILS VS CA This Court has ruled in many
instances that reinstatement is no longer viable where, among others, the relations between the
employer and the employee have been so severely strained, that it is not in the best interest of the
parties, nor is it advisable or practical to order reinstatement, or where the employee decides not to
be reinstated.30 In the instant case, the resulting circumstances show that reinstatement would be
impractical and would hardly promote the best interest of the parties. Resentment and enmity
between petitioners and private respondent necessarily strained the relationship between them or
even provoked antipathy and antagonism as shown by the acts of the parties subsequent to the
order of reinstatement. Besides, private respondent expressly prayed for an award of separation
pay in lieu of reinstatement from the very start of the proceedings before the Labor Arbiter. By so
doing, he forecloses reinstatement as a relief by implication. Golden Ace Builders v. Talde The basis
for the payment of backwages is different from that for the award of separation pay. Separation
pay is granted where reinstatement is no longer advisable because of strained relations between the
employee and the employer. Backwages represent compensation that should have been earned
but were not collected because of the unjust dismissal. The basis for computing backwages is
usually the length of the employee’s service while that for separation pay is the actual period
when the employee was unlawfully prevented from working. Fernandez v. Newfield Staff Solutions,
Inc. Bad faith does not connote bad judgment or negligence; It Imports dishonest purpose or some
moral obliquity and conscious doing of wrong; it means breach of a known duty through some
motive or interest or ill will; it partakes of the nature of fraud. 41 To sustain such a finding, there
should be evidence on record that an officer or director acted maliciously or in bad faith in
terminating the employee. Coca-Cola Bottlers Phils., Inc. v. Daniel Under the doctrine of strained
relations, the payment of separation pay has been considered an acceptable alternative to
reinstatement when the latter option is no longer desirable or viable. On the one hand, such
payment liberates the employee from what could be a highly oppressive work environment. On
the other, the payment releases the employer from the grossly unpalatable obligation of
maintaining in its employ a worker it could no longer trust. Nevertheless, the principle of strained
relations should not be used so indiscriminately as to bar the reinstatement of illegally dismissed
workers, especially when they themselves have not indicated any aversion to returning to work, as
in this case. It is only normal to expect a certain degree of antipathy and hostility to arise from a
litigation between parties, but not in every instance does such an atmosphere of antagonism exist as
to adversely affect the efficiency and productivity of the employee concerned. GLOBE-MACKAY
CABLE AND RADIO CORPORATION, VS NLRC An employee who not be dismissed on mere
presumptions and suppositions. Petitioner's allegation that since Salazar and Saldivar lived together
in the same apartment, it "presumed reasonably that complainant's sympathy would be with
Saldivar" and its averment that Saldivar's investigation although unverified, was probably true, do
not pass this Court's test. 36 While we should not condone the acts of disloyalty of an employee,
neither should we dismiss him on the basis of suspicion derived from speculative inferences. Abalos
v. Philex Mining Corporation A basic tenet in our rules of procedure is that an award that is final and
executory cannot be amended or modified anymore. One exception is that where facts and/or
events transpire after a decision has become executory, which facts and/or events present a
supervening cause or reason which renders the final and executory decision no longer enforceable.
Under the law, the court may modify or alter a judgment even after the same has become executory
whenever circumstances transpire rendering its execution unjust and inequitable, as where certain
facts and circumstances justifying or requiring such modification or alteration transpired after the
judgment has become final and executory. Procter and Gamble Philippines v. Bondesto, While the
Court recognizes the rights of an employer to terminate the services of an employee for a just or
authorized cause, the dismissal of an employee must be made within the parameters of law and
pursuant to the tenets of equity and fair play. Truly, the employer’s power to discipline its
workers may not be exercised in such an arbitrary manner as to erode the constitutional guarantee
of security of tenure. The Constitution mandates the protection of labor. This command the Court
has to heed and cannot disregard. ASIAWORLD PUBLISHING VS OPLE It should be underscored that
the backwages are being awarded on the basis of equity or in the nature of a severance pay. This
means that a monetary award is to be paid to the striking employees as an alternative to
reinstatement which can no longer be effected in view of the long passage of time or because of the
‘realities of the situation. Citytrust Finance Corp. v. NLRC Loss of confidence is a valid ground for
dismissing an employee and proof beyond reasonable doubt of the employee's misconduct is not
required to dismiss him on this charge. It is sufficient if there is some basis for such loss of
confidence or if the employer has reasonable ground to believe or to entertain the moral conviction
that the employee concerned is responsible for the misconduct and that the nature of his
participation therein rendered him absolutely unworthy of the trust and confidence demanded by
his position. Bautista v. Inciong In the case at bar, the Regional director correctly found that the
petitioner was an employee of the respondent union as reflected in the latter's individual payroll
sheets and shown by the petitioner's membership with the Social Security System (SSS) and the
respondent union's share of remittances in the petitioner's favor. Even more significant, is the
respondent union's act of filing a clearance application with the MOL to terminate the petitioner's
services. Bautista was selected and hired by the Union. He was paid wages by the Union. ALU had
the power to dismiss him as indeed it dismissed him. And definitely, the Union tightly controlled the
work of Bautista as one of its organizers Esmalin v. NLRC However, in this case, there is no doubt
that the relationship of employer to employee is so strained and ruptured as to preclude a
harmonious working relationship should reinstatement of private respondent be decreed. Instead,
private respondent should be afforded the right to separation pay so that he can be spared the
agony of having to work anew with petitioner under an atmosphere of antipathy and antagonism
and the petitioner does not have to endure the continued services of private respondent in whom it
has lost confidence. Maglutac v. NLRC It cannot now be expected that the harmonious and pleasant
working relationship between the parties in this case prior to the bringing of the derivative suit with
the Securities and Exchange Commission and the filing of complaint for illegal dismissal with the
labor Arbiter, can be revived. The relationship had been so strained ' that to order the reinstatement
of the complainant would not be wise. Where the relationship of employer to employee is so
strained and ruptured as to preclude a harmonious working relationship should reinstatement of
the employee be decreed, the latter should be afforded the right to separation pay where the
employer does not have to endure the continued services of the employee in whom it has lost
confidence. Dusit Hotel Nikko v. Gatbonton In the absence of any evaluation or valid extension, we
cannot conclude that respondent failed to meet the standards of performance set by the hotel for a
chief steward. At the expiration of the three-month period, Gatbonton had become a regular
employee. It is an elementary rule in the law on labor relations that a probationary employee
engaged to work beyond the probationary period of six months, as provided under Article 281 of the
Labor Code, or for any length of time set forth by the employer (in this case, three months), shall be
considered a regular employee.16 This is clear in the last sentence of Article 281. Any circumvention
of this provision would put to naught the State’s avowed protection for labor. Morales v. Harbour
Centre Port Terminal, Inc Admittedly, the right of employees to security of tenure does not give
them vested rights to their positions to the extent of depriving management of its prerogative to
change their assignments or to transfer them.42 By management prerogative is meant the right of
an employer to regulate all aspects of employment, such as the freedom to prescribe work
assignments, working methods, processes to be followed, regulation regarding transfer of
employees, supervision of their work, lay-off and discipline, and dismissal and recall of workers.43
Although jurisprudence recognizes said management prerogative, it has been ruled that the exercise
thereof, while ordinarily not interfered with,44 is not absolute and is subject to limitations imposed
by law, collective bargaining agreement, and general principles of fair play and justice.45 Thus, an
employer may transfer or assign employees from one office or area of operation to another,
provided there is no demotion in rank or diminution of salary, benefits, and other privileges, and the
action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or
demotion without sufficient cause.46 Indeed, having the right should not be confused with the
manner in which that right is exercised. Globe Telecom, Inc. v. Florendo-Flores The test of
constructive dismissal is whether a reasonable person in the employee’s position would have felt
compelled to give up his position under the circumstances. Given the undisputed facts outlined
above, respondent was provided with no other alternative than to stop reporting for work through
no fault of her own due to the malicious acts of her immediate supervisor. Uniwide Sales
Warehouse Club v. NLRC The test of constructive dismissal is whether a reasonable person in the
employee's position would have felt compelled to give up his position under the circumstances.45 It
is an act amounting to dismissal but made to appear as if it were not. In fact, the employee who is
constructively dismissed may be allowed to keep on coming to work. Constructive dismissal is
therefore a dismissal in disguise. The law recognizes and resolves this situation in favor of
employees in order to protect their rights and interests from the coercive acts of the employer.
Masagana Concrete Products vs. NLRC an award of separation pay in lieu of reinstatement does
not bar an award of backwages, computed from the time of illegal dismissal, Separation pay,
equivalent to one month’s salary for every year of service, is awarded as an alternative to
reinstatement when the latter is no longer an option. Separation pay is computed from the
commencement of employment up to the time of termination, including the imputed service for
which the employee is entitled to backwages, with the salary rate prevailing at the end of the period
of putative service being the basis for computation. Sarona vs. NLRC Separation pay, equivalent to
one month's salary for every year of service, is awarded as an alternative to reinstatement when the
latter is no longer an option. Separation pay is computed from the commencement of employment
up to the time of termination, including the imputed service for which the employee is entitled to
backwages, with the salary rate prevailing at the end of the period of putative service being the
basis for computation.It is well-settled, even axiomatic, that if reinstatement is not possible, the
period covered in the computation of backwages is from the time the employee was unlawfully
terminated until the finality of the decision finding illegal dismissal. Hyatt Taxi Services, Inc. v.
Catinoy constructive dismissal does not always involve forthright dismissal or diminution in rank,
compensation, benefit and privileges.[14] There may be constructive dismissal if an act of clear
discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the
employee that it could foreclose any choice by him except to forego his continued employment.
Westmont Pharmaceuticals, Inc. v. Samaniego In constructive dismissal, the employer has the
burden of proving that the transfer of an employee is for just and valid grounds, such as genuine
business necessity. The employer must be able to show that the transfer is not unreasonable,
inconvenient, or prejudicial to the employee. It must not involve a demotion in rank or a diminution
of salary and other benefits. If the employer cannot overcome this burden of proof, the
employee’s transfer shall be tantamount to unlawful constructive dismissal. SENTINEL SECURITY
AGENCY VS NLRC Under these cited provisions of the Labor Code, should the contractor fail to pay
the wages of its employees in accordance with law, the indirect employer (the petitioner in this
case), is jointly and severally liable with the contractor, but such responsibility should be understood
to be limited to the extent of the work performed under the contract, in the same manner and
extent that he is liable to the employees directly employed by him. This liability of petitioner
covers the payment of the workers’ performance of any work, task, job or project. So long as
the work, task, job or project has been performed for petitioner’s benefit or on its behalf, the
liability accrues for such period even if, later on, the employees are eventually transferred or
reassigned elsewhere. Premiere Development Bank v. NLRC Petitioner's allegation that private
respondent is guilty of laches is likewise devoid of merit. Laches is the failure for an unreasonable
and unexplained length of time to do that which in exercising due diligence, could or should have
been done earlier. It is negligence or omission to assert a right within a reasonable time, warranting
the presumption that the party entitled to assert it either has abandoned or has declined to assert
it.[28] The question of laches is addressed to the sound discretion of the court, and since it is an
equitable remedy, its application is controlled by equitable considerations. It cannot work to
defeat justice or to perpetrate fraud and injustice.[29] A party cannot be held guilty of laches when
he has not incurred undue delay in the assertion of his rights. Sime Darby Pilipinas, Inc.  v. Arguilla
In exceptional cases, the Court has given effect to quitclaim executed by employees if the employer
is able to prove the following requisites: (1) the employee executes a deed of quitclaim voluntarily;
(2) there is no fraud or deceit on the part of any of the parties; (3) the consideration of the quitclaim
is credible and reasonable; and (4) the contract is not contrary to law, public order, public policy,
morals or good customs or prejudicial to a third person with a right recognized by law. Aujero v.
Philippine Communications Satellite Corporation While the law looks with disfavor upon releases
and quitclaims by employees who are inveigled or pressured into signing them by unscrupulous
employers seeking to evade their legal responsibilities, a legitimate waiver representing a voluntary
settlement of a laborer's claims should be respected by the courts as the law between the parties.29
Considering the petitioner's claim of fraud and bad faith against Philcomsat to be unsubstantiated,
this Court finds the quitclaim in dispute to be legitimate waiver. While the petitioner bewailed as
having been coerced or pressured into signing the release and waiver, his failure to present
evidence renders his allegation self-serving and inutile to invalidate the same. That no portion of his
retirement pay will be released to him or his urgent need for funds does not constitute the pressure
or coercion contemplated by law. That the petitioner was all set to return to his hometown and was
in dire need of money would likewise not qualify as undue pressure sufficient to invalidate the
quitclaim. "Dire necessity" may be an acceptable ground to annul quitclaims if the consideration is
unconscionably low and the employee was tricked into accepting it, but is not an acceptable ground
for annulling the release when it is not shown that the employee has been forced to execute it.30
While it is our duty to prevent the exploitation of employees, it also behooves us to protect the
sanctity of contracts that do not contravene our laws. Nasipit Lumber Company vs. National
Organization of Working Men Closure or suspension of operations for economic reasons is,
therefore, recognized as a valid exercise of management prerogative. The determination to cease or
suspend operations is a prerogative of management, which the State does not usually interfere with
as no business or undertaking is required to continue operating at a loss simply because it has to
maintain its workers in employment. Such an act would be tantamount to a taking of property
without due process of law. Capitol Wireless, Inc. v. Honorable Secretary Ma. Nieves R. Confessor
With respect to the additional six (6) days for compulsory retirement and three (3) days for optional
retirement, these may appear in excess of the requirements of the law and the demand of
respondent Union. Yet, it should be noted that the law merely establishes the minimum
retirement benefits as it recognizes that an employee may receive more under existing laws and any
CBA or other agreements. Besides, respondent Secretary of Labor had to break the bargaining
deadlock. After taking into account all the circumstances, public respondent found it expedient to
strike a reasonable middle ground between the parties’respective positions. Unless there are
cogent reasons, and we do not find any, this Court will not alter, modify or reverse the factual
findings of the Secretary of Labor because, by reason of her official position, she is considered to
have acquired expertise as her jurisdiction is confined to specific matters. BANCO FILIPINO SAVINGS
An implied trust could not have been formed between the Bank and Tala as this Court has held that
“where the purchase is made in violation of an existing statute and in evasion of its express
provision, no trust can result in favor of the party who is guilty of the fraud. Masing and Sons
Development Corporation v. Rogelio In the absence of a retirement plan or agreement providing for
retirement benefits of employees in the establishment, an employee upon reaching the age of sixty
(60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory
retirement age, who has served at least five (5) years in the said establishment, may retire and shall
be entitled 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. Â 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. Â Retail, service and agricultural establishments or operations
employing not more than ten (10) employees or workers are exempted from the coverage of this
provision. Â Violation of this provision is hereby declared unlawful and subject to the penal
provisions provided under Article 288 of this Code. Â CASES ON EMPLOYER-EMPLOYEE
RELATIONSHIP AFP MUTUAL BENEFITS VS NLRC Time and again, the Court has applied the "four-
fold" test in determining the existence of employer-employee relationship. This test considers the
following elements:Â (1) the power to hire; (2) the payment of wages; (3) the power to dismiss; and
(4) the power to control, the last being the most important element. SONZA VS ABS-CBN\ Applying
the control test to the present case, we find that SONZA is not an employee but an independent
contractor. The control test is the most important test our courts apply in distinguishing an
employee from an independent contractor.[29] This test is based on the extent of control the hirer
exercises over a worker. The greater the supervision and control the hirer exercises, the more
likely the worker is deemed an employee. The converse holds true as well – the less control the
hirer exercises, the more likely the worker is considered an independent contractor. Orozco vs. CA
This Court has constantly adhered to the "four-fold test" to determine whether there exists an
employer-employee relationship between parties.24 The four elements of an employment
relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c)
the power of dismissal; and (d) the employer’s power to control the employee’s conduct.25 Of
these four elements, it is the power of control which is the most crucial26 and most determinative
factor,27 so important, in fact, that the other elements may even be disregarded.28 As this Court
has previously held: the significant factor in determining the relationship of the parties is the
presence or absence of supervisory authority to control the method and the details of performance
of the service being rendered, and the degree to which the principal may intervene to exercise such
control.29 In other words, the test is whether the employer controls or has reserved the right to
control the employee, not only as to the work done, but also as to the means and methods by which
the same is accomplished Insular Life Assurance Co. Ltd. vs. NLRC Logically, the line should be drawn
between rules that merely serve as guidelines towards the achievement of the mutually desired
result without dictating the means or methods to be employed in attaining it, and those that control
or fix the methodology and bind or restrict the party hired to the use of such means. The first, which
aim only to promote the result, create no employer-employee relationship unlike the second, which
address both the result and the means used to achieve it. The distinction acquires particular
relevance in the case of an enterprise affected with public interest, as is the business of insurance,
and is on that account subject to regulation by the State with respect, not only to the relations
between insurer and insured but also to the internal affairs of the insurance company. Sevilla vs. CA
In this jurisdiction, there has been no uniform test to determine the evidence of an employer-
employee relation. In general, we have relied on the so-called right of control test, "where the
person for whom the services are performed reserves a right to control not only the end to be
achieved but also the means to be used in reaching such end." 10 Subsequently, however, we have
considered, in addition to the standard of right-of control, the existing economic conditions
prevailing between the parties, like the inclusion of the employee in the payrolls, in determining the
existence of an employer-employee relationship. Francisco vs. NLRC The better approach would
therefore be to adopt a two-tiered test involving: (1) the putative employer’s power to control
the employee with respect to the means and methods by which the work is to be accomplished; and
(2) the underlying economic realities of the activity or relationship. This two-tiered test would
provide us with a framework of analysis, which would take into consideration the totality of
circumstances surrounding the true nature of the relationship between the parties. This is especially
appropriate in this case where there is no written agreement or terms of reference to base the
relationship on; and due to the complexity of the relationship based on the various positions and
responsibilities given to the worker over the period of the latter’s employment. CASES ON KINDS
OF EMPLOYEES Universal Robina Sugar Milling Corporation vs. Acibo, G.R. No. G.R. No. 186439,
January 15,2014 regular, project/seasonal and casual. Regular employment refers to that
arrangement whereby the employee "has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer[.]"19 Under the definition, the
primary standard that determines regular employment is the reasonable connection between the
particular activity performed by the employee and the usual business or trade of the employer;20
the emphasis is on the necessity or desirability of the employee’s activity. Thus, when the
employee performs activities considered necessary and desirable to the overall business scheme of
the employer, the law regards the employee as regular. By way of an exception, paragraph 2, Article
280 of the Labor Code also considers regular a casual employment arrangement when the casual
employee’s engagement has lasted for at least one year, regardless of the engagement’s
continuity. The controlling test in this arrangement is the length of time during which the employee
is engaged. A project employment, on the other hand, contemplates on arrangement whereby "the
employment has been fixed for a specific project or undertaking whose completion or termination
has been determined at the time of the engagement of the employee[.]"21 Two requirements,
therefore, clearly need to be satisfied to remove the engagement from the presumption of
regularity of employment, namely: (1) designation of a specific project or undertaking for which the
employee is hired; and (2) clear determination of the completion or termination of the project at the
time of the employee’s engagement.22 The services of the project employees are legally and
automatically terminated upon the end or completion of the project as the employee’s services
are coterminous with the project. Unlike in a regular employment under Article 280 of the Labor
Code, however, the length of time of the asserted "project" employee’s engagement is not
controlling as the employment may, in fact, last for more than a year, depending on the needs or
circumstances of the project. Nevertheless, this length of time (or the continuous rehiring of the
employee even after the cessation of the project) may serve as a badge of regular employment
when the activities performed by the purported "project" employee are necessary and
indispensable to the usual business or trade of the employer.23 In this latter case, the law will
regard the arrangement as regular employment.24 Seasonal employment operates much in the
same way as project employment, albeit it involves work or service that is seasonal in nature or
lasting for the duration of the season.25 As with project employment, although the seasonal
employment arrangement involves work that is seasonal or periodic in nature, the employment
itself is not automatically considered seasonal so as to prevent the employee from attaining regular
status. To exclude the asserted "seasonal" employee from those classified as regular employees, the
employer must show that: (1) the employee must be performing work or services that are seasonal
in nature; and (2) he had been employed for the duration of the season.26 Hence, when the
"seasonal" workers are continuously and repeatedly hired to perform the same tasks or activities for
several seasons or even after the cessation of the season, this length of time may likewise serve as
badge of regular employment.27 In fact, even though denominated as "seasonal workers," if these
workers are called to work from time to time and are only temporarily laid off during the off-season,
the law does not consider them separated from the service during the off-season period. The law
simply considers these seasonal workers on leave until re-employed.28 Casual employment, the
third kind of employment arrangement, refers to any other employment arrangement that does not
fall under any of the first two categories, i.e., regular or project/seasonal. Interestingly, the Labor
Code does not mention another employment arrangement – contractual or fixed term
employment (or employment for a term) – which, if not for the fixed term, should fall under the
category of regular employment in view of the nature of the employee’s engagement, which is to
perform an activity usually necessary or desirable in the employer’s business. Mariwasa
Manufacturing Inc. vs. Hon. Leogardo Jr. G.R. No. 74246 Jan. 26,1989 By voluntarily agreeing to an
extension of the probationary period, Dequila in effect waived any benefit attaching to the
completion of said period if he still failed to make the grade during the period of extension. The
Court finds nothing in the law which by any fair interpretation prohibits such a waiver. And no public
policy protecting the employee and the security of his tenure is served by prescribing voluntary
agreements which, by reasonably extending the period of probation, actually improve and further a
probationary employee's prospects of demonstrating his fitness for regular employment CALS
POULTERY VS. ROCO G.R. No. 150660 July 30,2002 However, the Court of Appeals set aside the
NLRC ruling on the ground that at the time Candelaria’s services were terminated, she had
attained the status of a regular employee as the termination on November 15, 1995 was effected
four (4) days after the 6-month probationary period had expired, hence, she is entitled to security of
tenure in accordance with Article 281 of the Labor Code. CALS argues that the Court of Appeals’
computation of the 6-month probationary period is erroneous as the termination of Candelaria’s
services on November 15, 1995 was exactly on the last day of the 6-month period. We agree with
CALS’ contention as upheld by both the Labor Arbiter and the NLRC that Candelaria’s services
was terminated within and not beyond the 6-month probationary period. In Cebu Royal v. Deputy
Minister of Labor,[13] our computation of the 6-month probationary period is reckoned from the
date of appointment up to the same calendar date of the 6th month following Alcira vs. NLRC G.R.
No. 149859 June 9,2004 It is settled that even if probationary employees do not enjoy permanent
status, they are accorded the constitutional protection of security of tenure. Â This means they may
only be terminated for just cause or when they otherwise fail to qualify as regular employees in
accordance with reasonable standards made known to them by the employer at the time of their
engagement.[14] But we have also ruled in Manlimos, et. al. vs. National Labor Relations
Commission[15] that this constitutional protection ends on the expiration of the probationary
period. On that date, the parties are free to either renew or terminate their contract of
employment. Manlimos concluded that “(t)his development has rendered moot the question of
whether there was a just cause for the dismissal of the petitioners xxx.―[16] In the case at bar,
respondent Middleby exercised its option not to renew the contract when it informed petitioner on
the last day of his probationary employment that it did not intend to grant him a regular status.
Although we can regard petitioner’s severance from work as dismissal, the same cannot be
deemed illegal. As found by the labor arbiter, the NLRC and the Court of Appeals, petitioner (1)
incurred ten absences (2) was tardy several times (3) failed to wear the proper uniform many times
and (4) showed inferior supervisory skills. Petitioner failed to satisfactorily refute these
substantiated allegations. Taking all this in its entirety, respondent Middleby was clearly justified to
end its employment relationship with petitioner. Mitsubishi Motors vs. Chrysler G.R. No. 148738
June 29,2004 Indeed, an employer, in the exercise of its management prerogative, may hire an
employee on a probationary basis in order to determine his fitness to perform work.[29]Â Under
Article 281 of the Labor Code, the employer must inform the employee of the standards for which
his employment may be considered for regularization. Such probationary period, unless covered
by an apprenticeship agreement, shall not exceed six (6) months from the date the employee
started working. The employee’s services may be terminated for just cause or for his failure to
qualify as a regular employee based on reasonable standards made known to him Brent School Inc.
vs. Zamora 48494 Feb. 5,1990 The concept of the employee's duties as being "usually necessary or
desirable in the usual business or trade of the employer" is not synonymous with or identical to
employment with a fixed term. Logically, the decisive determinant in term employment should not
be the activities that the employee is called upon to perform, but the day certain agreed upon by
the parties for the commencement and termination of their employment relationship, a day certain
being understood to be "that which must necessarily come, although it may not be known when."
19 Cielo vs. NLRC G.R. No. 78693 Jan. 28,1991 Even if it be assumed that the six-month period had
not yet been completed, it is settled that the probationary employee cannot be removed except also
for cause as provided by law. It is not alleged that the petitioner was separated for poor
performance; in fact, it is suggested by the private respondent that he was dismissed for disrespect
and insubordination, more specifically his refusal to sign the affidavit as required by company policy
PDI vs. Magtibay G.R. No. 164532 July 24, 2007 for the valid termination of probationary
employment which is for just cause, the second ground does not require notice and hearing. 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. Mercado Sr. vs. NLRC G.R. No. 79869 September 5,
1991 35. Industrial-Commercial-Agricultural Workers’Organization (ICAWO) v. CIR 16 SCRA 562,
March 31, 1966. The seasonal stoppage of work does not, therefore, negate the reasonable
expectation of the laborers to be subsequently allowed to resume work unless there be other
justifiable reasons for acting otherwise. 36. Visayan Stevedore Transportation Company v. CIR. 19
SCRA 426, February 25, 1967 1. LABOR LAW; EMPLOYER-EMPLOYEE RELATIONSHIP; CASE AT BAR.
— In the performance of their duties, complainants worked under the direction and control of the
officers of the company, whose paymaster or disbursing officer paid the corresponding
compensation directly to said complainants, who in turn acknowledged receipt in payrolls of the
company. RELATIONSHIP CONTINUES EVEN AT CONCLUSION OF MILLING SEASON. — As regards
the alleged termination of employer-employee relationship between the company and the
complainants at the conclusion of each milling season, it is settled that the workers concerned are
considered, not separated from the service, but merely on leave of absence, without pay, during the
off-season, their employer-employee relationship being merely deemed suspended, not severed in
the meanwhile UNFAIR LABOR PRACTICE; CASE AT BAR. — Where, as in the case at bar, the
workers not admitted to work beginning from Nov. 1955, were precisely those belonging to the
union, and the company branch manager had told them point blank that severance of their
connection with the union was the remedy if they wanted to continue working with the company,
there was unfair labor practice. BACK WAGES; PAYMENT OF BACK WAGES ON REINSTATEMENT
DISCRETIONARY WITH COURT OF INDUSTRIAL RELATIONS. — The law explicitly vests in the Court
of Industrial Relations discretion to order the reinstatement with backpay of laborers dismissed due
to union activities 37. Bacolod-Murcia Milling Co, Inc. v. NLRC, 204 SCRA 155, 158, November 21,
1991 seasonal laborer cannot enjoy the same retirement privileges as the regular worker. The
seasonal laborer works only for a fraction of year. And more often than not, he is allowed by his
employer to seek employment elsewhere during off-season or temporary lay-off for economic
necessity. 38. Gaco v. NLRC .― 230 SCRA 260, Febuary 23, 1994 we shall not follow Article 279 of
the Labor Code to the letter regarding the period of backwages in view of the peculiar circumstances
of the present case, namely, "there is now a strained relationship between (petitioner) and (private
respondent) and (petitioner) prays for payment of separation pay in lieu of reinstatement."Â 13Â
Instead, the period thereof shall be reckoned from the time her compensation was withheld from
her, or in April, 1990 up to the finality of our decision. 39. Magcalas vs NLRC : 100333 : March 13,
1997 Regular employees cannot at the same time be project employees.  Article 280 of the Labor
Code states that regular employees are those whose work is necessary or desirable to the usual
business of the employer.  The two exceptions following the general description of regular
employees refer to either project or seasonal employees. The employment of seasonal employees,
on the other hand, legally ends upon completion of the project or the season As regular employees,
petitioners' employment cannot be terminated at the whim of the employer.  For a dismissal of
an employee to be valid, two requisites must be met:Â (1) the employee is afforded due process,
meaning, he is given notice of the cause of his dismissal and an adequate opportunity to be heard
and to defend himself; and (2) the dismissal is for a valid cause as indicated in Article 282[35]Â of
the Labor Code.[36] The services of petitioners were purportedly terminated at the end of the
ADB and Interbank projects, but this could not have been a valid cause for, as discussed above, they
were regular and not project employees.  Thus, the Court does not hesitate to conclude that
petitioners were illegally dismissed. 40. Abasolo v. NLRC G.R. No. 118475, 29 November 2000, 346
SCRA 293. The amount of separation pay is based on two factors:Â Â the amount of monthly salary
and the number of years of service.  Although the Labor Code provides different definitions as to
what constitutes “one year of service,― Book Six[31] does not specifically define “one year
of service― for purposes of computing separation pay.  However, Articles 283 and 284 both
state in connection with separation pay that a fraction of at least six months shall be considered one
whole year.  Applying this case at bar, we hold that the amount of separation pay which
respondent members xxx should receive is one-half (1/2) their respective average monthly pay
during the last season they worked multiplied by the number of years they actually rendered
service, provided that they worked for at least six months during a given year. 41. Philippine
Tobacco Flue-Curing & Redrying Corporation v. NLRC G.R. No. 127395, 10 December 1998, 300 SCRA
37. The formula that petitioner proposes, wherein a year of work is equivalent to actual work
rendered for 303 days, is both unfair and inapplicable, considering that Articles 283 and 284 provide
that in connection with separation pay, a fraction of at least six months shall be considered one
whole year.  Under these provisions, an employee who worked for only six months in a given year
-- which is certainly less than 303 days -- is considered to have worked for one whole year. 42.
Rowell Industrial Corporation vs. Court of Appeals, G.R. No. 167714 March 7, 2007 Well-established
is the rule that regular employees enjoy security of tenure and they can only be dismissed for just
cause and with due process, notice and hearing.[24]  And in case of employees’ dismissal, the
burden is on the employer to prove that the dismissal was legal.  Thus, respondent Taripe’s
summary dismissal, not being based on any of the just or authorized causes enumerated under
Articles 282,[25]Â 283,[26]Â and 284[27]Â of the Labor Code, as amended, is illegal. 43. Robinsons
Galleria/Robinsons Supermarket Corporation and/or Jess Manuel v. Ranchez, G.R. No. 177937,
January 19, 2011, 640 SCRA 142 Well-established is the rule that regular employees enjoy security of
tenure and they can only be dismissed for just cause and with due process, notice and hearing.[24]Â
 And in case of employees’ dismissal, the burden is on the employer to prove that the dismissal
was legal.  Thus, respondent Taripe’s summary dismissal, not being based on any of the just or
authorized causes enumerated under Articles 282,[25]Â 283,[26]Â and 284[27]Â of the Labor Code,
as amended, is illegal. 44. Magis Young Achievers’Learning Center v. Manalo, G.R. No. 178835,
February 13, 2009, 579 SCRA 421, 431-432 probationary employees enjoy security of tenure during
the term of their probationary employment such that they may only be terminated for cause as
provided for by law, or if at the end of the probationary period, the employee failed to meet the
reasonable standards set by the employer at the time of the employee’s engagement. in the
absence of an express period of probation for private school teachers, the three-year probationary
period provided by the Manual of Regulations for Private Schools must apply likewise to the case of
respondent.  In other words, absent any concrete and competent proof that her performance as
a teacher was unsatisfactory from her hiring on April 18, 2002 up to March 31, 2003, respondent is
entitled to continue her three-year period of probationary period, such that from March 31, 2003,
her probationary employment is deemed renewed for the following two school years.[47] 45.
Buiser, et al., v.. Hon. Leogardo, etc., et al., G.R. No. L-63316 July 31, 1984 the probationary period
of employment is limited to six (6) months. The exception to this general rule is When the parties to
an employment contract may agree otherwise, such as when the same is established by company
policy or when the same is required by the nature of work to be performed by the employee. In the
latter case, there is recognition of the exercise of managerial prerogatives in requiring a longer
period of probationary employment, such as in the present case where the probationary period was
set for eighteen (18) months, i.e. from May, 1980 to October, 1981 inclusive, especially where the
employee must learn a particular kind of work such as selling, or when the job requires certain
qualifications, skills, experience or training. 46. Miguel Corporation vs. Del Rosario, G.R. Nos. 168194
& 168603, December 13, 2005 Considering that respondent was illegally dismissed, she is entitled
not only to reinstatement but also to payment of full backwages, computed from the time her
compensation was actually withheld from her on March 13, 2001, up to her actual reinstatement.Â
As a regular employee of petitioner from the date of her employment on April 17, 2000, she is
likewise entitled to other benefits, i.e., service incentive leave pay and 13th month pay computed
from such date also up to her actual reinstatement. Â Respondent is not, however, entitled to
holiday pay because the records reveal that she is a monthly paid regular employee. Under
Section 2, Rule IV, Book III of the Omnibus Rules Implementing the Labor Code, employees who are
uniformly paid by the month, irrespective of the number of working days therein, shall be presumed
to be paid for all the days in the month whether worked or not. 47. Octaviano vs. NLRC, G.R. No.
88636 October 3, 1991 The fact that the petitioner received separation pay should not be taken
against her for it is but natural for her to accept whatever amounts the company would give her. Her
receipt of separation pay does not relieve the company of its obligations under the law. Backwages
and separation pay are reliefs distinct and separate from each other. Payment of backwages in the
form of relief that restores the income that was lost by reason of unlawful dismissal is distinguished
from separation pay which provides the employee money during the period in which he is locating a
new job.[16] We have moreover held that a quitclaim will not stop a dismissed employee from
complaining to the authorities. 48. Cebu Royal PIants (SMC) vs. The Honorable Deputy Minister of
Labor and 144. Employment, et al., G.R. No. 58639, August 12, 1987, 153 SCRA 11 there was here an
attempt to circumvent the law by separating the employee after five months' service to prevent him
from becoming a regular employee, and then rehiring him on probation, again without security of
tenure. We cannot permit this subterfuge if we are to be true to the spirit and mandate of social
justice. On the other hand, we have also the health of the public and of the dismissed employee
himself to consider. Hence, although we must rule in favor of his reinstatement, this must be
conditioned on his fitness to resume his work, as certified by competent authority. 49. Beta Electric
Company vs. National Labor Relations Commission, et al., G.R. No. 86408, February 15, 1990,182
SCRA 384 12 a probationary employee is "considered a regular employee" if he has been "allowed to
work after [the] probationary period."Â [11]Â The fact that her employment has been a contract-to-
contract basis cannot alter the character of employment, because contracts cannot override the
mandate of law. Hence, by operation of law, she has become a regular employee. 50. Aliling vs.
Feliciano, G.R. No. 185829, April 25,2012 The normal consequences of respondents’ illegal
dismissal, then, are reinstatement without loss of seniority rights, and payment of backwages
computed from the time compensation was withheld up to the date of actual reinstatement. Where
reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for
every year of service should be awarded as an alternative. The payment of separation pay is in
addition to payment of backwages. 51. Mercado vs. AMA Computer College - Parañaque City, Inc.
G.R. No. 183572 April 13, 2010 The fixed-term character of employment essentially refers to the
period agreed upon between the employer and the employee; employment exists only for the
duration of the term and ends on its own when the term expires.  In a sense, employment on
probationary status also refers to a period because of the technical meaning “probation―
carries in Philippine labor law – a maximum period of six months, or in the academe, a period of
three years for those engaged in teaching jobs. Their similarity ends there, however, because of
the overriding meaning that being “on probation― connotes, i.e., a process of testing and
observing the character or abilities of a person who is new to a role or job 52. Magis Young
Achievers’ Learning Center v. Adelaida P. Manalo, G.R. No. 178835, February 13, 2009, 579 SCRA
421, 431-438 probationary employees enjoy security of tenure during the term of their probationary
employment such that they may only be terminated for cause as provided for by law, or if at the end
of the probationary period, the employee failed to meet the reasonable standards set by the
employer at the time of the employee’s engagement.  Undeniably, respondent was hired as a
probationary teacher and, as such, it was incumbent upon petitioner to show by competent
evidence that she did not meet the standards set by the school.  This requirement, petitioner
failed to discharge.  To note, the termination of respondent was effected by that letter stating
that she was being relieved from employment because the school authorities allegedly decided, as a
cost-cutting measure, that the position of “Principal― was to be abolished.  Nowhere in that
letter was respondent informed that her performance as a school teacher was less than satisfactory.
53. Petroleum Shipping Limited (formerly Esso International Shipping (Bahamas) Co., Ltd.) vs. NLRC,
June 16,2006, G.R. No. 148130 Court traced its ruling in a number of cases that seafarers are
contractual, not regular, employees.  Thus, inBrent School, Inc. v. Zamora,[15] the Court cited
overseas employment contract as an example of contracts where the concept of regular
employment does not apply, whatever the nature of the engagement and despite the provisions of
Article 280 of the Labor Code.  In Coyoca v. NLRC,[16] the Court held that the agency is liable
for payment of a seaman’s medical and disability benefits in the event that the principal fails or
refuses to pay the benefits or wages due the seaman although the seaman may not be a regular
employee of the agency. 54. Millares v. NLRC 434 Phil. 524 (2002). Accordingly, and since the
entire purpose behind the development of legislation culminating in the present Article 280 of the
Labor code clearly appears to have been, as already observed, to prevent circumvention of the
employee’s right to be secure in his tenure, the clause in said article indiscriminately and
completely ruling out all written or oral agreements conflicting with the concept of regular
employment as defined therein should be construed to refer to the substantive evil that the Code
itself has singled out; agreements entered into precisely to circumvent security of tenure.  It
should have no application to instances where a fixed period of employment was agreed upon
knowingly and voluntarily by the parties, without any force, duress or improper pressure being
brought to bear upon the employee and absent any other circumstances vitiating his consent, or
where it satisfactorily appears that the employer and employee dealt with each other on more or
less equal terms with no moral dominance whatever being exercised by the former over the latter.Â
As a Filipino seaman, petitioner is governed by the Rules and Regulations Governing Overseas
Employment and the said Rules do not provide for separation or termination pay. 55. Gu-Miro v.
Adorable G.R. No. 160952, 20 August 2004, 437 SCRA 162. Clearly, petitioner cannot be considered
as a regular employee notwithstanding that the work he performs is necessary and desirable in the
business of respondent company. As expounded in the above-mentioned Millares Resolution,
an exception is made in the situation of seafarers. The exigencies of their work necessitates that
they be employed on a contractual basis. Thus, even with the continued re-hiring by respondent
company of petitioner to serve as Radio Officer onboard Bergesen’s different vessels, this should
be interpreted not as a basis for regularization but rather a series of contract renewals sanctioned
under the doctrine set down by the second Millares case. If at all, petitioner was preferred
because of practical considerations—namely, his experience and qualifications. However, this
does not alter the status of his employment from being contractual. CASES ON LABOR RELATIONS 1.
Tunay na Pagkakaisa ng Mangagawa sa Aisa Brewery vs. Asia Brewery G.R. No. 162025 Aug. 3,2010
Confidential employees are defined as those who (1) assist or act in a confidential capacity, (2) to
persons who formulate, determine, and effectuate management policies in the field of labor
relations. Not being confidential employees, the secretaries/clerks and checkers are not disqualified
from membership in the Union of respondent’s rank-and-file employees. 2.National
Association of Trade Unions-Republic Planters Bank Supervisors Chapter v. Torres G.R. No. 93468
Dec. 29,1994 Inc. only the Branch Managers/OICs, Cashiers and Controllers of respondent Bank,
being confidential employees, are disqualified from joining or assisting petitioner Union, or joining,
assisting or forming any other labor organization. But this ruling should be understood to apply only
to the present case based on the evidence of the parties, as well as to those similarly situated. It
should not be understood in any way to apply to banks in general. 3. Standard Chartered Bank
Employees Union [SCBEU-NUBE] v. Standard Chartered Bank G.R. No. 161933 April 22,2008 Absent
any proof that Chief Cashiers and Assistant Cashiers, personnel of the Telex department and one (1)
HR Staff have mutuality of interest with the other rank and file employees, then they are rightfully
excluded from the appropriate bargaining unit. 4. Golden Farms Inc. vs. Ferrer-Calleja G.R. No.
78755 July 19,1989 This rationale holds true also for confidential employees such as accounting
personnel, radio and telegraph operators, who having access to confidential information, may
become the source of undue advantage. Said employee(s) may act as a spy or spies of either party
to a collective bargaining agreement. This is specially true in the present case where the petitioning
Union is already the bargaining agent of the rank-and-file employees in the establishment. To allow
the confidential employees to join the existing Union of the rank-and-file would be in violation of
the terms of the Collective Bargaining Agreement wherein this kind of employees by the nature of
their functions/positions are expressly excluded. 5. Philips industrial Development Inc. vs. NLRC G.R.
No.88957 June 25,1992 that the right to join a union includes the right to abstain from joining any
union. 19 Inasmuch as what both the Constitution and the Industrial Peace Act have recognized,
and guaranteed to the employee, is the "right" to join associations of his choice, it would be absurd
to say that the law also imposes, in the same breath, upon the employee the duty to join
associations. The law does not enjoin an employee to sign up with any association. 6. Pier & Arrastre
& Stevedoring Services Inc. vs. Roldan-Confessor G.R. No. 110854 Feb. 13,1995 We thus hold that
public respondent acted with grave abuse of discretion in not excluding the four foremen and legal
secretary from the bargaining unit composed of rank-and-file employees. As for the timekeeper and
assistant timekeeper it is clear from petitioner's own pleadings that they are, neither managerial nor
supervisory employees. They are merely tasked to report those who commit infractions against
company rules and regulations. This reportorial function is routinary and clerical. They do not
determine the fate of those who violate company policy rules and regulations function. It follows
that they cannot be excluded from the subject bargaining unit. 7.Southern Philippines Federation of
Labor vs. Ferrer-Calleja G.R. No. 80882 April 24,1989 he employees in the confidential payroll, the
petitioner has not shown that the nature of their jobs is classified as managerial except for its
allegation that they are considered by management as occupying managerial positions and highly
confidential. Neither can payment or non-payment of union dues be the determining factor of
whether the challenged employees should be excluded from the bargaining unit since the union
shop provision in the CBA applies only to newly hired employees but not to members of the
bargaining unit who were not members of the union at the time of the signing of the CBA. It is,
therefore, not impossible for employees to be members of the bargaining unit even though they are
non-union members or not paying union dues. 8. Filoil Refinery Corp. vs. Filoil Supervisory and
Confidential Employees Association G.R. No.L-26736 August 18,1972 he confidential employee are
very few in number and are by practice and tradition identified with the supervisors in their role as
representives of management vis-a-vis the rank and file employee such identity of interest has
allowed their inclusion in the bargaining unit of supervisors-managers for purposes of collective
bargaining in turn as employees in relation to the company as their employer. 9.Coastal Subic Bay
Terminal Inc. vs. Department of Labor and Employment-Office of the Secretary G.R. No.157117
November 20,2006 supervisory employees are not eligible for membership in a labor union of rank-
and-file employees. The supervisory employees are allowed to form their own union but they are
not allowed to join the rank-and-file union because of potential conflicts of interest.29Â Further, to
avoid a situation where supervisors would merge with the rank-and-file or where the supervisors’
labor union would represent conflicting interests, a local supervisors’ union should not be
allowed to affiliate with the national federation of unions of rank-and-file employees where that
federation actively participates in the union activity within the company.30Â Thus, the limitation is
not confined to a case of supervisors wanting to join a rank-and-file union. The prohibition extends
to a supervisors’ local union applying for membership in a national federation the members of
which include local unions of rank-and-file employees.3 10. San Miguel Corporation vs. Laguesma
G.R. No. 100485 September 21,1994 It is not, however, the convenience of the employer that
constitutes the determinative factor in forming an appropriate bargaining unit. Equally, if not more
important, is the interest of the employees. In choosing and crafting an appropriate bargaining unit,
extreme care should be taken to prevent an employer from having any undue advantage over the
employees' bargaining representative. Our workers are weak enough and it is not our social policy
to further debilitate their bargaining representative. 11. San Migule Corporation Supervisors and
Exempt Employees Union vs. Laguesma G.R. No. 110399 August 15,1997 A unit to be appropriate
must effect a grouping of employees who have substantial, mutual interests in wages, hours,
working conditions and other subjects of collective bargaining.[25] 12. Democratic Labor Association
vs. Cebu Stevedoring Co. Inc. G.R. No. 10321Feb. 28,1958 This Court has already taken cognizance of
the crucial issue of determining the proper constituency of a collective bargaining unit. (1) will of
employees (Glove Doctrine); (2) affinity and unity of employee's 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". 13. University of the Philippines vs. Ferrere-Calleja G.R. No.96189 July
14,1992 (t)he test of the grouping is community or mutuality of interests. And this is so because 'the
basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their collective bargaining rights'
(Rothenberg on Labor Relations, 490)." 14. St. James School of Quezon City vs. Samahang
Manggagawa ng St. James School of Quezon City G.R. No. 151326 November 23,2005 The motor
pool, construction and transportation employees of the Tandang Sora campus had 149 qualified
voters at the time of the certification election. Hence, the 149 qualified voters should be used to
determine the existence of a quorum. Since a majority or 84 out of the 149 qualified voters cast
their votes, a quorum existed in the certification election. Â 15. International School Alliance of
Educators [ISAE] vs. Quisumbing G.R. No. 128845 June 1,2000 It does not appear that foreign-hires
have indicated their intention to be grouped together with local-hires for purposes of collective
bargaining. The collective bargaining history in the School also shows that these groups were always
treated separately. Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although
foreign-hires perform similar functions under the same working conditions as the local-hires,
foreign-hires are accorded certain benefits not granted to local-hires. These benefits, such as
housing, transportation, shipping costs, taxes, and home leave travel allowance, are reasonably
related to their status as foreign-hires, and justify the exclusion of the former from the latter. To
include foreign-hires in a bargaining unit with local-hires would not assure either group the exercise
of their respective collective bargaining rights. 16. National Association of Free Trade Unions vs.
Mainit Lumber Development Company Workers Union G.R. No. 79526 December 21,1990
Moreover, while the existence of a bargaining history is a factor that may be reckoned with in
determining the appropriate bargaining unit, the same is not decisive or conclusive. Other factors
must be considered. The test of grouping is community or mutuality of interests. This is so because
"the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their collective bargaining
rights." 17. San Miguel Corporation vs. Laguesma G.R. No. 100485, September 21,1994 A unit to be
appropriate must effect a grouping of employees who have substantial, mutual interests in wages,
hours, working conditions and other subjects of collective bargaining.[25] 18. Belyca Corporation vs.
Ferrere-Calleja G.R. No. 77395 November 29,1988 as a general rule, a certification election is the
sole concern of the workers. The only exception is where the employer has to file a petition for
certification election pursuant to Art. 259 of the Labor Code because the latter was requested to
bargain collectively. But thereafter the role of the employer in the certification process ceases. The
employer becomes merely a bystander 19. Philippine Airlines Employees Association vs. Ferrere-
Calleja G.R. No. 76673 June 22,1988 Employees have a constitutional right to choose their own
bargaining representative. The holding of a certification election is a statutory policy that should not
be circumvented (George and Peter Lines, Inc. vs. Association of Labor Unions 20. PAFLU vs.
Bureau of Labor Relations G.R. No. L-43760, Aug. 21,1976 hat is of the essence of the certification
process, as noted in "is that every labor organization be given the opportunity in a free and honest
election to make good its claim that it should be the exclusive collective bargaining representative.
21. UE Automobile Employees and Workers Union vs. Noriel G.R. No. L-44350 Nov. 25,1978 It is thus
of the very essence of the regime of industrial democracy sought to be attained through the
collective bargaining process that there be no obstacle to the freedom Identified with the exercise
of the right to self-organization. Labor is to be represented by a union that can express its collective
will. In the event, and this is usually the case, that there is more than one such group fighting for
that privilege, a certification election must be conducted. 22. United CMC Worker’s Union vs. BLR
G.R. No. L-51337 March 22,1984 the pendency of a formal charge of company domination is a
prejudicial question that, until decided, bars proceedings for a certification election 23. California
Manufacturing Corporation vs. Laguesma G.R. No.97020 June 18,1992 CMC as employer has no
standing to question a certification election (Asian Design and Manufacturing Corporation v. Calleja,
Et Al., G.R. No. 77415, June 29, 1989, 174 SCRA 477). Such is the sole concern of the workers. The
only exception is where the employer has to file the petition for certification election pursuant to
Article 259 (now 258) of the Labor Code because it was requested to bargain collectively.
Thereafter, the role of the employer in the certification process ceases. The employer becomes
merely a by-stander 24. Furusawa Rubber Philippines Inc. vs. Secretary of Labor and Employment
G.R. No. 121241 Dec. 10,1997  The submission of a xerox copy of the union’s certificate of
registration to prove its legitimacy is sufficient, hence, the Med-Arbiter correctly granted the
petition for certification election.  As it been held in a long line of cases, a certification proceeding
is not a litigation in the sense that the term is ordinarily understood, but an investigation of a Â
fact-finding  and  non- adversarial character.  It is not covered by the technical rules of Â
evidence. 25. TUCP and Allied Services World Federation of Trade Unions vs. Laguesma G.R. No.
102350 June 30,1994 26. Kaisahan ng Manggagawang Pilipino vs. Trajano G.R. No. 75810 September
9,1991 Â is evident that the prohibition imposed by law on the holding of a certification election
"within one year from the date of issuance of declaration of a final certification election result' —
in this case, from February 27, 1981, the date of the Resolution declaring NAFLU the exclusive
bargaining representative of rank-and-file workers of VIRON — can have no application to the case
at bar. That one-year period-known as the "certification year" during which the certified union is
required to negotiate with the employer, and certification election is prohibited 2 — has long
since expired. 27. National Congress of Unions in Sugrar Industry of the Phil-TUCP vs. Trajano G.R.
No. 67485 April 10,1992 The law demands that the petition for certification election should fail in
the presence of a then pending bargaining deadlock. 28. Capitol Medical Center Alliiance of
Concerned Employees-United Filipino Service Workers vs. Laguesma G.R. No. 118915 Feb. 4,1997 in
order to allow an employer to validly suspend the bargaining process, there must be a valid petition
for certification election. The mere filing of a petition does notipso facto justify the suspension of
negotiation by the employer 29. Republic Planters Bank General Services Employees Union-National
Association of Trade Unions vs. Laguesma G.R. No. 119675 Nov. 21,1996 Since the persons involved
are not employees of the company, we held that they are not entitled to the constitutional right to
join or form a labor organization for purposes of collective bargaining. 30. Republic Planters Bank
General Services Employees Union-National Association of Trade Unions vs. Laguesma G.R. No.
119675 Nov. 21,1996 31. Samahang Manggagawa sa Permex vs. Secretary of Labor G.R. No. 107792
March 2,1998 a petition for certification election or motion for intervention may be entertained only
within 60 days prior to the date of expiration of an existing collective bargaining agreement. The
purpose of the rule is to ensure stability in the relationships of the workers and the management by
preventing frequent modifications of any collective bargaining agreement earlier entered into by
them in good faith and for the stipulated original period. Excepted from the contract-bar rule are
certain types of contracts which do not foster industrial stability, such as contracts where the
identity of the representative is in doubt. Any stability derived from such contracts must be
subordinated to the employees’ freedom of choice because it does not establish the kind of
industrial peace contemplated by the law.[6] Such situation obtains in this case.  The petitioner
entered into a CBA with Permex Producer when its status as exclusive bargaining agent of the
employees had not been established yet.  32. Samahan ng Mangagawa sa Pacific Plastic vs.
Laguesma G.R. No. 111245 Jan. 31,1997 certification election can be conducted despite pendency of
a petition to cancel the union registration certificate.  For the fact is that at the time the
respondent union filed its petition for certification, it still had the legal personality to perform such
act absent an order directing its cancellation. 33. Yokomaha Tire Phils. Vs. Yokohama Employees
Union G.R. No.159553 December 10,2007 without a final judgment declaring the legality of
dismissal, dismissed employees are eligible or qualified voters. 34. GOP-CCP Workers Union vs. CIR
G.R. No. L-33015 Sept. 10,1979 no injustice was perpetrated against the appellant when the
certification election was held notwithstanding the pendency of its motions for reconsideration and
for the suspension of the election. The CIR rightly sensed that those eleventh-hour maneuvers did
not conduce to industrial peace and, instead, fomented uncertainty on the matter of representation
of the workers. 35. Reyes vs. Ople G.R. No. L-48192 March 30,1979 The Court has consistently
favored and upheld the holding of certification elections for the workers themselves to elect the
union that the majority may choose as their bargaining representative or if they wish, to vote that
there be no union. Their plea that another certification election be held at which they may duly take
part would be but a futile exercise in the light of the results which were highlighted by the lack of
any noticeable support for them by the rank and file, as well as by their admission at the hearing
that the winner and certified union, the NAFLU, enjoys the workers' full support, having signed up
more than a thousand of them as members. 36. NFL vs. Sec of Labor G.R. No. 104556 March 9,1998
Private respondent is the employer.  The manner in which the election was held could make the
difference between industrial strife and industrial harmony in the company.  What an employer is
prohibited from doing is to interfere with the conduct of the certification election for the purpose of
influencing its outcome.  But certainly an employer has an abiding interest in seeing to it that the
election is clean, peaceful, orderly and credible.  37. Insular Hotel Employees Union-NFL vs.
Waterfront Insular Hotel Davao G.R. No. 174040-41 Sept. 22,2010 the individual members of the
union cannot feign knowledge of the execution of the MOA. Each contract was freely entered into
and there is no indication that the same was attended by fraud, misrepresentation or duress.  To
this Court's mind, the signing of the individual “Reconfirmation of Employment― should,
therefore, be deemed an implied ratification by the Union members of the MOA. 38. St. Lukes
Medical Center Inc. vs. Torres G.R. No. 99395 June 29,1993 n the absence of a specific provision of
law prohibiting retroactivity of the effectivity of arbitral awards issued by the Secretary of Labor
pursuant to Article 263 (g) of the Labor Code, such as herein involved, public respondent is deemed
vested with plenary and discretionary powers to determine the effectivity thereof. 39. Villar vs,
Inciong G.R. Nos. L-50283-84 April 20,1983 Amigo Employees Union (Independent) Which
petitioners claim to represent, not being a legitimate labor organization, may not validly present
representation issues. Therefore, the act of petitioners cannot be considered a legitimate exercise of
their right to self-organization. Hence, We affirm and reiterate the rationale explained in Phil
Association of Free Labor Unions vs. Sec. of Labor case, supra, in order to protect legitimate labor
and at the same time maintain discipline and responsibility within its ranks. 40. People’s
Industrial and Commercial Employees and Workers Org. vs. Peoples Industrial and Commercial Corp.
G.R. No. L-37687 March 15,1982 t is clear that management gave cause or reason to induce the
staging of the strike by improperly refusing to recognize the new union formed by petitioners. It has
been twelve (12) years since petitioners were dismissed from their employment and in their
destitute and deplorable condition, to them the benign provisions of the New Constitution for the
protection of labor, assuring the rights of workers to self- organization, collective bargaining and
security of tenure would be useless and meaningless. Labor, being the weaker in economic power
and resources than capital, deserve protection that — is actually substantial and material. 41.
Elisco-Elirol Labor Union vs. Noriel G.R. No. L-41955 Dec. 29,1977 any suspension or lay-off of the
complainants officers and board members or employees of petitioner union arising from the
respondents' misconception of the clearly applicable principles and jurisprudence upholding the
primacy of the employees and their freely chosen local union as the true party in interest to the
collective bargaining agreement will be forthwith rectified and set aside. 42. Association Workers
Union PTGWO vs. NLRC G.R. No. 87266-69 July 30,1990 What was in fact eventually established by
individual respondents was a separate, independent union called Metro Port Workers Union (MWU)
which was not entitled, during the time periods here relevant, to recognition as the bargaining unit
in CBA negotiations. 43. Benguet Consolidated Inc. vs. BCI Employees & Workers Union G.R. No.
April 30,1968 n formulating the “substitutionary― doctrine, the only consideration involved was
the employees‘ (principal) interest in the existing bargaining agreement. The agent’s (union)
interest never entered the picture. The majority of the employees, as an entity under the statute, is
the true party in interest to the contract, holding rights through the agency of the union
representative. Thus, any exclusive interest claimed by the agent is defeasible at the will of the
principal. The “substitutionary― doctrine only provides that the employees cannot revoke the
validly executed collective bargaining contract with their employer by the simple expedient of
changing their bargaining agent. And it is in the light of this that the phrase “said new agent
would have to respect said contract― must be understood. It only means that the employees, thru
their new bargaining agent, cannot renege on their collective bargaining contract, except of course
to negotiate with management for the shortening thereof. 44. Confederation of Citizens Labor
Unions vs. Noriel 1982 & National Federation of labor vs. DOLE Sec. 1998 Private respondent is the
employer.  The manner in which the election was held could make the difference between
industrial strife and industrial harmony in the company.  What an employer is prohibited from
doing is to interfere with the conduct of the certification election for the purpose of influencing its
outcome.  But certainly an employer has an abiding interest in seeing to it that the election is
clean, peaceful, orderly and credible.  45. PHILIPPINE SKYLANDERS, INC. V. NATIONAL LABOR
RELATIONS COMMISSION G.R. No. 127374 and G.R. No. 127431, January 31, 2002, 375 SCRA 369 A
local labor union is a separate and distinct unit primarily designed to secure and maintain an
equality of bargaining power between the employer and their employee-members. A local union
does not owe its existence to the federation with which it is affiliated. It is a separate and distinct
voluntary association owing its creation to the will of its members. The mere act of affiliation does
not divest the local union of its own personality, neither does it give the mother federation the
license to act independently of the local union. It only gives rise to a contract of agency where the
former acts in representation of the latter. 46. National Union of Bank Employees vs. Philnabank
Employees Association (PEMA), G.R. No. 174287 August 12,2013: 47. Cirtek Employees Labor Union-
Federation of Free Workers v. Cirtek Electronics, Inc., G.R. No. 190515, June 6, 2011, 650 SCRA 656,
663 the right of the local members to withdraw from the federation and to form a new local union
depends upon the provisions of the union's constitution, bylaws and charter and, in the absence of
enforceable provisions in the federation's constitution preventing disaffiliation of a local union, a
local may sever its relationship with its parent.37 48. Villar v. Inciong G.R. No. L-50283-84 April 20,
1983 A closed-shop is a valid form of union security, and a provision therefor in a collective
bargaining agreement is not a restriction of the right of freedom of association guaranteed by the
Constitution. 49. Volkschel Labor Union v. BLR June 19,1985 Suffice it to state that respondent
federation is not entitled to union dues payments from petitioner's members. "A local union which
has validly withdrawn from its affiliation with the parent association and which continues to
represent the employees of an employer is entitled to the check-off dues under a collective
bargaining contract. 50. PALACOL VS. FERRER-CALLEJA, G.R. No. 85333 February 26, 1990: only the
collection of a special fund for labor and education research is mandated, as correctly pointed out
by the Union. The two other purposes, namely, the purchase of vehicles and other items for the
benefit of the union officers and the general membership, and the payment of services rendered by
union officers, consultants and others, should be supported by the regular union dues, there being
no showing that the latter are not sufficient to cover the same. 51. ABS-CBN Supervisors Employees
Union Members vs. ABS-CBN Broadcasting Corporation, et. al., G.R. No. 106518, March 11,
1999Even assuming that the special assessment was validly levied pursuant to paragraph (n), and
granting that individual written authorizations were obtained by the Union, nevertheless there can
be no valid check-off considering that the majority of the Union members had already withdrawn
their individual authorizations.  A withdrawal of individual authorization is equivalent to no
authorization at all 52. Holy Cross of Davao, Inc. vs. Joaquin, G.R. No. 110007, Oct. 18,1996Check-
offs in truth impose as extra burden on the employer in the form of additional administrative and
bookkeeping costs.  It is a burden assumed by management at the instance of the union and for
its benefit, in order to facilitate the collection of dues necessary for the latter’s life and
sustenance.  But the obligation to pay union dues and agency fees obviously devolves not upon
the employer, but the individual employee.  It is a personal obligation not demandable from the
employer upon default or refusal of the employer to consent to a check-off.  The only obligation
of the employer under a check-off is to effect the deductions and remit the collections to the
union.  The principle of unjust enrichment necessarily precludes recovery of union dues -- or
agency fees -- from the employer, these being, to repeat, obligations pertaining to the individual
worker in favor of the bargaining union.  Where the employer fails or refuses to implement a
check-off agreement, logic and prudence dictate that the union itself undertake the collection of
union dues and assessments from its members (and agency fees from non-union employees); this,
of course, without prejudice to suing the employer for unfair labor practice. 53. Kio kloy v. NLRC,
G.R. No. L-54334 January 22, 1986A Company's refusal to make counter proposal if considered in
relation to the entire bargaining process, may indicate bad faith and this is specially true where the
Union's request for a counter proposal is left unanswered 54. General Milling Corp. Vs. Court of
Appeals, G.R. No. 146728.  February 11, 2004: ART. 253. The provision mandates the parties to
keep the status quo while they are still in the process of working out their respective proposal
and counter proposal. The general rule is that when a CBA already exists, its provision shall continue
to govern the relationship between the parties, until a new one is agreed upon. The rule necessarily
presupposes that all other things are equal. That is, that neither party is guilty of bad faith. However,
when one of the parties abuses this grace period by purposely delaying the bargaining process, a
departure from the general rule is warranted. 55. COLEGIO DE SAN JUAN DE LETRANÂ V.Â
ASSOCIATION OF EMPLOYEES AND FACULTY OF LETRAN, G.R. NO. 141471, 18 SEPTEMBER 2000,
340 SCRA 587, 595Where the employer did not even bother to submit an answer to the bargaining
proposals of the union, there is a clear evasion of the duty to bargain collectively. 56. DIVINE WORD
UNIVERSITY OF TACLOBAN VS. SECRETARY OF LABOR AND EMPLOYMENT, 213 SCRA 759, 11
September 1992 the action for intervention had in effect been denied by the dismissal of the
petition for certification election in the May 23, 1989 Order. The sub silencio treatment of the
motion for intervention in said Order does not mean that the motion was overlooked. It only means,
as shown by the findings of facts in the same Order, that there was no necessity for the holding of a
certification election wherein the DWUIFEU could participate. 57. THE INSULAR LIFE ASSURANCE
CO., LTD., EMPLOYEES ASSOCIATION-NATU VS. THE INSULAR LIFE ASSURANCE CO., LTD. G.R. No. L-
25291 January 30, 1971 STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE VS. Confessor,
G.R. No. 114974 June 16, 2004: 58. STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE VS.
Confessor, G.R. No. 114974 June 16, 2004: The Union has not been able to show that the Bank
had done acts, both at and away from the bargaining table, which tend to show that it did not want
to reach an agreement with the Union or to settle the differences between it and the Union. Â
Admittedly, the parties were not able to agree and reached a deadlock.  However, it is herein
emphasized that the duty to bargain “does not compel either party to agree to a proposal or
require the making of a concession.―[53] Hence, the parties’failure to agree did not amount
to ULP under Article 248(g) for violation of the duty to bargain.