FInal Labor Case Digest

Labor Final Case digest
1. Moises De Leon v. NLRC and La Tondeña (G.R. No. 70705)
Facts:
Petitioner De Leon was employed by respondent company La Tondeña as maintenance man whose work
consisted mainly of painting company building and equipment, and other odd jobs relating to
maintenance. After having worked for respondent for more than a year, petitioner requested that he be
included in the payroll of regular employees, to which the former responded by dismissing petitioner
from his employment. Petitioner having been refused reinstatement filed a complaint before the Labor
Arbiter. Petitioner asserts that he is a regular employee performing similar functions as of a regular
maintenance and was rehired by respondent company’s labor agency to perform the same tasks.
Respondent company meanwhile claims petitioner was a casual worker hired only to paint a certain
building in the premises and that his work as painter terminated upon completion of the job. The Labor
Arbiter ruled in favor of petitioner but was reversed on appeal by the NLRC tribunal.
Issue:
Whether or not petitioner De Leon is a regular employee of respondent.
Ruling: YES.
The primary standard, therefore, of determining a regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual business or trade of
the employer. The test is whether the former is usually necessary or desirable in the usual business or
trade of the employer.
It is not tenable to argue that the painting and maintenance work of petitioner are not necessary in
respondent’s business of manufacturing liquors and wines, just as it cannot be said that only those who
are directly involved in the process of producing wines and liquors may be considered as necessary
employees. Otherwise, there would have been no need for the regular Maintenance Section of
respondent company’s Engineering Department, manned by regular employees whom petitioner often
worked with.
The law demands that the nature and entirety of the activities performed by the employee be
considered. In the case of petitioner, the painting and maintenance work given him manifest a
treatment consistent with a maintenance man and not just a painter, for if his job was truly only to paint
a building there would have been no basis for giving him other work assignments in between painting
activities.
Furthermore, the petitioner performed his work of painting and maintenance activities during his
employment in respondent’s business which lasted for more than one year. Certainly, by this fact alone
he is entitled by law to be considered a regular employee. And considering further that weeks after his
dismissal, petitioner was rehired by the company through a labor agency and was returned to his post in
the Maintenance Section and made to perform the same activities that he used to do, it cannot be
denied that as activities as a regular painter and maintenance man still exist.
2. HACIENDA FATIMA vs NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD AND GENERAL

TRADE Case Digest
[G.R. No. 149440. January 28, 2003]
FACTS: In the course of a labor dispute between the petitioner and respondent union, the union
members were not given work for more than one month. In protest, complainants staged a strike which
was however settled upon the signing of a Memorandum of Agreement. A conciliation meeting was
conducted wherein Luisa Rombo, Ramona Rombo, Bobong Abrega, and Boboy Silva were not considered
by the company as employees, and thus may not be members of the union. It was also agreed that a
number of other employees will be reinstated. When respondents again reneged on its commitment,
complainants filed the present complaint. It is alleged by the petitioners that the above employees are
mere seasonal employees.
ISSUE: Whether or not the seasonal employees have become regular employees.
HELD: The SC held that for respondents to be excluded from those classified as regular employees, it is
not enough that they perform work or services that are seasonal in nature. They must have also been
employed only for the duration of one season. The evidence proves the existence of the first, but not of
the second, condition. The fact that respondents -- with the exception of Luisa Rombo, Ramona Rombo,
Bobong Abriga and Boboy Silva -- repeatedly worked as sugarcane workers for petitioners for several
years is not denied by the latter. Evidently, petitioners employed respondents for more than one season.
Therefore, the general rule of regular employment is applicable.
The primary standard of determining regular employment is the reasonable connection between the
particular activity performed by the employee in relation to the usual trade or business of the employer.
The test is whether the former is usually necessary or desirable in the usual trade or business of the
employer. The connection can be determined by considering the nature of the work performed and its
relation to the scheme of the particular business or trade in its entirety. Also if the employee has been
performing the job for at least a year, even if the performance is not continuous and merely
intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of
the necessity if not indispensability of that activity to the business. Hence, the employment is
considered regular, but only with respect to such activity and while such activity exists.
3. MAGSALIN vs NATIONAL ORGANIZATION OF WORKING MEN Case Digest
[G.R. No. 148492 May 9, 2003]
FACTS: Coca-Cola Bottlers Phils., Inc., herein petitioner, engaged the services of respondent workers as
"sales route helpers" for a limited period of five months. After five months, respondent workers were
employed by petitioner company on a day-to-day basis. According to petitioner company, respondent
workers were hired to substitute for regular sales route helpers whenever the latter would be
unavailable or when there would be an unexpected shortage of manpower in any of its work places or
an unusually high volume of work. The practice was for the workers to wait every morning outside the
gates of the sales office of petitioner company. If thus hired, the workers would then be paid their
wages at the end of the day.
Ultimately, respondent workers asked petitioner company to extend to them regular appointments.
Petitioner company refused. Subsequently, the respondents filed with the NLRC a complaint for the
regularization of their employment with petitioner company. Claiming that petitioner company
meanwhile terminated their services, respondent workers filed a notice of strike and a complaint for
illegal dismissal and unfair labor practice with the NLRC. The parties, later on, agreed to submit the
controversy, for voluntary arbitration but the VA dismissed the complaint on the ground that the
respondent workers were not employees of Coca-cola.
ISSUE: Whether or not the nature of work of respondents in the company is of such nature as to be
deemed necessary and desirable in the usual business or trade of petitioner that could qualify them to
be regular employees.
HELD: The SC ruled that he argument of petitioner that its usual business or trade is softdrink
manufacturing and that the work assigned to respondent workers as sales route helpers so involves
merely “postproduction activities,” one which is not indispensable in the manufacture of its products,
scarcely can be persuasive. If, as so argued by petitioner company, only those whose work are directly
involved in the production of softdrinks may be held performing functions necessary and desirable in its
usual business or trade, there would have then been no need for it to even maintain regular truck sales
route helpers. The nature of the work performed must be viewed from a perspective of the business or
trade in its entirety and not on a confined scope.
The repeated rehiring of respondent workers and the continuing need for their services clearly attest to
the necessity or desirability of their services in the regular conduct of the business or trade of petitioner
company. The Court of Appeals has found each of respondents to have worked for at least one year with
petitioner company. While this Court, in Brent School, Inc. vs. Zamora, has upheld the legality of a fixed-
term employment, it has done so, however, with a stern admonition that where from the circumstances
it is apparent that the period has been imposed to preclude the acquisition of tenurial security by the
employee, then it should be struck down as being contrary to law, morals, good customs, public order
and public policy. The pernicious practice of having employees, workers and laborers, engaged for a
fixed period of few months, short of the normal six-month probationary period of employment, and,
thereafter, to be hired on a day-to-day basis, mocks the law. Any obvious circumvention of the law
cannot be countenanced.
The fact that respondent workers have agreed to be employed on such basis and to forego the
protection given to them on their security of tenure, demonstrate nothing more than the serious
problem of impoverishment of so many of our people and the resulting unevenness between labor and
capital. A contract of employment is impressed with public interest. The provisions of applicable statutes
are deemed written into the contract, and “the parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply contracting with each other.”
Petition is dismissed.
4. PHILIPS SEMICONDUCTORS INC. vs FADRIQUELA Case Digest
[G.R. No. 141717. April 14, 2004]
FACTS: The petitioner Philips Semiconductors is a domestic corporation engaged in the production and
assembly of semiconductors such as power devices, RF modules, CATV modules, RF and metal
transistors and glass diods. It caters to domestic and foreign corporations that manufacture computers,
telecommunications equipment and cars. Aside from contractual employees, the petitioner employed
1,029 regular workers. The employees were subjected to periodic performance appraisal based on
output, quality, attendance and work attitude.[2] One was required to obtain a performance rating of at
least 3.0 for the period covered by the performance appraisal to maintain good standing as an
employee.
Respondent, during her 5 consecutive contracts, got the following ratings: 3.15, 3.8, 3.4, and 2.8. The
reason for her failed mark on the last contract was her absences. She was then asked to explain such
absences but she failed to do the same. Subsequently, respondent’s supervisor recommended that her
employment be terminated due to habitual absenteeism. Thus, her contract of employment was no
longer renewed. Respondent then filed a complaint for illegal dismissal. On the other hand, petitioner
contends that respondent was not dismissed; her contract merely expired.
The Labor Arbiter and the NLRC based their decision on the CBA between the petitioner and the labor
union which provides that a contractual employee would only be considered a regular employee if he
has completed 17 months of service and a performance rating of at least 3.0. The respondent filed a
motion for reconsideration but the NLRC denied the same. On appeal, the CA reversed the decision of
the NLRC. Hence, this petition.
ISSUE: Whether or not respondent was still a contractual employee of the company.
HELD: The SC agreed with the appellate court. Article 280 of the Labor Code of the Philippines was
emplaced in our statute books to prevent the circumvention by unscrupulous employers of the
employee’s right to be secure in his tenure by indiscriminately and completely ruling out all written and
oral agreements inconsistent with the concept of regular employment defined therein. The language of
the law manifests the intent to protect the tenurial interest of the worker who may be denied the rights
and benefits due a regular employee because of lopsided agreements with the economically powerful
employer who can maneuver to keep an employee on a casual or temporary status for as long as it is
convenient to it. In tandem with Article 281 of the Labor Code, Article 280 was designed to put an end to
the pernicious practice of making permanent casuals of our lowly employees by the simple expedient of
extending to them temporary or probationary appointments, ad infinitum.
The two kinds of regular employees under the law are (1) those engaged to perform activities which are
necessary or desirable in the usual business or trade of the employer; and (2) those casual employees
who have rendered at least one year of service, whether continuous or broken, with respect to the
activities in which they are employed. The primary standard to determine a regular employment is the
reasonable connection between the particular activity performed by the employee in relation to the
business or trade of the employer. The test is whether the former is usually necessary or desirable in the
usual business or trade of the employer. If the employee has been performing the job for at least one
year, even if the performance is not continuous or merely intermittent, the law deems the repeated and
continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that
activity to the business of the employer. Hence, the employment is also considered regular, but only
with respect to such activity and while such activity exists. The law does not provide the qualification
that the employee must first be issued a regular appointment or must be declared as such before he can
acquire a regular employee status.
In this case, the original contract of employment had been extended or renewed four times, to the same
position, with the same chores. Such a continuing need for the services of the respondent is sufficient
evidence of the necessity and indispensability of her services to the petitioner’s business. By operation
of law, then, the respondent had attained the regular status of her employment with the petitioner, and
is thus entitled to security of tenure as provided for in Article 279 of the Labor Code.
The limited period specified in petitioner’s employment contract having been imposed precisely to
circumvent the constitutional guarantee on security of tenure should, therefore, be struck down or
disregarded as contrary to public policy or morals. To uphold the contractual arrangement would, in
effect, permit the former to avoid hiring permanent or regular employees by simply hiring them on a
temporary or casual basis, thereby violating the employee’s security of tenure in their jobs.
Under Section 3, Article XVI of the Constitution, it is the policy of the State to assure the workers of
security of tenure and free them from the bondage of uncertainty of tenure woven by some employers
into their contracts of employment. The guarantee is an act of social justice. When a person has no
property, his job may possibly be his only possession or means of livelihood and those of his
dependents. When a person loses his job, his dependents suffer as well. The worker should therefor be
protected and insulated against any arbitrary deprivation of his job.
The ruling in Brent School, Inc. v. Zamora is also not applicable in this case because it could not be
supposed that private respondents and all other so-called “casual” workers of the petitioner
KNOWINGLY and VOLUNTARILY agreed to the employment contract. Almost always, they agree to any
terms of an employment contract just to get employed considering that it is difficult to find work given
their ordinary qualifications. Their freedom to contract is empty and hollow because theirs is the
freedom to starve if they refuse to work as casual or contractual workers. Indeed, to the unemployed,
security of tenure has no value. It could not then be said that petitioner and private respondents “dealt
with each other on more or less equal terms with no moral dominance whatever being exercised by the
former over the latter.
The petitioner’s reliance on the CBA is also misplaced. It is the express mandate of the CBA not to
include contractual employees within its coverage. Such being the case, we see no reason why an
agreement between the representative union and private respondent, delaying the regularization of
contractual employees, should bind petitioner as well as other contractual employees. Indeed, nothing
could be more unjust than to exclude contractual employees from the benefits of the CBA on the
premise that the same contains an exclusionary clause while at the same time invoke a collateral
agreement entered into between the parties to the CBA to prevent a contractual employee from
attaining the status of a regular employee.
The CBA, during its lifetime, constitutes the law between the parties. Such being the rule, the
aforementioned CBA should be binding only upon private respondent and its regular employees who
were duly represented by the bargaining union. The agreement embodied in the “Minutes of Meeting”
between the representative union and private respondent, providing that contractual employees shall
become regular employees only after seventeen months of employment, cannot bind petitioner. Such a
provision runs contrary to law not only because contractual employees do not form part of the collective
bargaining unit which entered into the CBA with private respondent but also because of the Labor Code
provision on regularization. The law explicitly states that an employee who had rendered at least one
year of service, whether such service is continuous or broken, shall be considered a regular employee.
The period set by law is one year. The seventeen months provided by the “Minutes of Meeting” is
obviously much longer. The principle is well settled that the law forms part of and is read into every
contract without the need for the parties expressly making reference to it.
Petition is denied.
5. BRENT SCHOOL vs. ZAMORA (G.R. No. L-48494 - February 5, 1990)
FACTS:
Doroteo R. Alegre was engaged as athletic director by Brent School, Inc. The contract was fixed for five
(5) years, i.e., from July 18, 1971, the date of execution of the agreement, to July 17, 1976. Three
months before the expiration of the stipulated period, or more precisely on April 20,1976, Alegre was
given a copy of the report filed by Brent School advising of the termination of his services effective on
July 16, 1976. The stated ground for the termination was "completion of contract, expiration of the
definite period of employment."
Alegre protested and argued that although his contract did stipulate that the same would terminate on
July 17, 1976, since his services were necessary and desirable in the usual business of his employer, and
his employment had lasted for five years, he had acquired the status of a regular employee and could
not be removed except for valid cause. 6 The Regional Director considered Brent School's report as
anapplication for clearance to terminate employment (not a report of termination), and accepting the
recommendation of the Labor Conciliator, refused to give such clearance and instead required the
reinstatement of Alegre, as a "permanent employee," to his former position without loss of seniority
rights and with full back wages.
Brent School filed a motion for reconsideration but was denied. The School is now before this Court in a
last attempt at vindication. That it will get here.
ISSUE:
WON the provisions of the Labor Code, as amended, have anathematized "fixed period employment" or
employment for a term.
RULING:
On one hand, there is the gradual and progressive elimination of references to term or fixed-period
employment in the Labor Code, and the specific statement of the rule that:
Regular and Casual Employment.— The provisions of written agreement to the contrary notwithstanding
and regardless of the oral agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or service to be employed is seasonal in nature and the
employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph:provided,

that, any employee who has rendered at least one year of service, whether such service is continuous or
broken, shall be considered a regular employee with respect to the activity in which he is employed and
his employment shall continue while such actually exists.
On the other hand, the Civil Code, which has always recognized, and continues to recognize, the validity
and propriety of contracts and obligations with a fixed or definite period, and imposes no restraints on
the freedom of the parties to fix the duration of a contract, whatever its object, be it specie, goods or
services, except the general admonition against stipulations contrary to law, morals, good customs,
public order or public policy. 26Under the Civil Code, therefore, and as a general proposition, fixed-term
employment contracts are not limited, as they are under the present Labor Code, to those by nature
seasonal or for specific projects with pre-determined dates of completion; they also include those to
which the parties by free choice have assigned a specific date of termination.
Article 280 of the Labor Code, under a narrow and literal interpretation, not only fails to exhaust the
gamut of employment contracts to which the lack of a fixed period would be an anomaly, but would also
appear to restrict, without reasonable distinctions, the right of an employee to freely stipulate with his
employer the duration of his engagement, it logically follows that such a literal interpretation should be
eschewed or avoided. The law must be given a reasonable interpretation, to preclude absurdity in its
application. Outlawing the whole concept of term employment and subverting to boot the principle of
freedom of contract to remedy the evil of employer's using it as a means to prevent their employees
from obtaining security of tenure is like cutting off the nose to spite the face or, more relevantly, curing
a headache by lopping off the head.
Accordingly, 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.
Alegre's employment was terminated upon the expiration of his last contract with Brent School on July
16, 1976 without the necessity of any notice. The advance written advice given the Department of Labor
with copy to said petitioner was a mere reminder of the impending expiration of his contract, not a
letter of termination, nor an application for clearance to terminate which needed the approval of the
Department of Labor to make the termination of his services effective.
6. PANTRANCO NORTH EXPRESS, INC. vs.NATIONAL LABOR RELATIONS COMMISSION G.R. No.
106654 December 16, 1994
FACTS: Private respondent Peronila was employed as a driver of Pantranco North Express, Inc., a
domestic corporation engaged in the public transportation business as a common carrier, and of which
its co-petitioner Abelardo de Leon is a manager. Peronila was dismissed due to unauthorized absences.
Fifteen years after such termination of his employment, Peronila reappeared and implored petitioner to
reconsider his dismissal, which plea was initially denied by petitioner. However, due to his insistent
appeals, petitioner eventually acceded and hired him as a driver, but on a contractual basis for a fixed
period of one month. Barely fifteen days from such employment as a contractual driver private
respondent was involved in a vehicular mishap and his employment contract was terminated and was
no longer renewed thereafter.
ISSUE: Whether or not the employment contract which stipulates that there is no employer-employee
relationship between petitioner and Peronila is valid.
HELD: YES. What said Article 280 seeks to prevent is the practice of some unscrupulous and covetous
employers who wish to circumvent the law that protects lowly workers from capricious dismissal from
their employment. The aforesaid provision, however, should not be interpreted in such a way as to
deprive employers of the right and prerogative to choose their own workers if they have sufficient basis
to refuse an employee a regular status. Management has rights which should also be protected.
7. Millares v. NLRC [G.R. No. 110524, March 14, 2000]
FACTS: Petitioners were employed by ESSO International Shipping Company. Petitioner Millares
applied for a leave of absence and informed the Operations Manager of his intention to avail of the
optional retirement plan under the Consecutive Enlistment Incentive plan (CEIP). Such was denied.
Petitioner Lagda also applied for a leave of absence and informed the Operations manager of his
intention to avail of the optional early retirement plan in view of his 20 years of service which was
likewise denied. Both petitioners requested for extension of their leaves of absence. But later, they
discovered that they were dropped from the roster of crew members.
ISSUES:
1. W/N petitioners are contractual employees whose employments are terminated every time their
contracts expire and were thus validly dismissed.
2. Whether they should have been granted the retirement benefits under the optional early
retirement policy.
HELD:
1. No. The primary standard to determine a regular employment is the reasonable connection
between the activity performed by the employee in relation to the usual business or trade of the
employer. In this case it is undisputed that petitioners were employees of private respondents. Also,
as they had been in the employ of private respondents for 20 years as they were repeatedly re-hired
after the expiration of their respective contracts, it is clear that their service was necessary and
indispensable to private respondent’s business. Therefore, they could only be dismissed for just and
valid cause. There is no showing that they abandoned their job as there was no showing of their
unjustified refusal to resume employment.
2. No. The evidence of petitioners regarding the announcement by Captain Estaniel of the
controverted optional retirement plan consisted merely of affidavits of petitioners and their
witnesses which were successfully rebutted by the evidence of private respondents. Nowhere in the
CEIP is there reference to an optional retirement plan, nor a provision for retirement for service of
20 years. There are clear provisions on retirement benefits.
8. http://ebvlaw.com/2018/01/06/redundancy-criteria-not-limited-status-efficiency-proficiency-
employer-may-resort-using-indicators-determining-will-remain-company-upon-downsizing-
payro/
9. Nelson Culili vs. Eastern Communications Philippines, Inc.
G.R. No. 165381 February 9, 2011
Facts:
ETPI implemented a Right-Sizing Program which consisted of two phases: the first phase
involved the reduction of ETPI’s workforce to only those employees that were necessary and which ETPI
could sustain; the second phase entailed a company-wide reorganization which would result in the
transfer, merger, absorption or abolition of certain departments of ETPI. ETPI offered the Special
Retirement Program and the corresponding retirement package to the 102 employees who qualified for
the program. Only Culili rejected the offer. After the successful implementation of the first phase, ETPI
proceeded with the second phase which necessitated the abolition, transfer and merger of a number of
ETPI’s departments. Among the departments abolished was the Service Quality Department. The
functions of the Customer Premises Equipment Management Unit, Culili’s unit, were absorbed by the
Business and Consumer Accounts Department. The abolition of the Service Quality Department
rendered the specialized functions of a Senior Technician unnecessary. Hence, Culili’s position was
abolished due to redundancy and his functions were absorbed by another employee already with the
Business and Consumer Accounts Department. Culili discovered later on that his name was omitted in
ETPI’s New Table of Organization.
Culili alleged that neither he nor the DOLE were formally notified of his termination. Culili
claimed that he only found out about it when Vice President Virgilio Garcia handed him a copy of the
letter, after he was barred from entering ETPI’s premises by its armed security personnel when he tried
to report for work. Moreover, Culili asserted that ETPI had contracted out the services he used to
perform to a labor-only contractor which not only proved that his functions had not become
unnecessary, but which also violated their CBA and the Labor Code. ETPI denied singling Culili out for
termination. ETPI claimed that while it is true that they offered the Special Retirement Package to
reduce their workforce to a sustainable level, this was only the first phase of the Right-Sizing Program to
which ETEU agreed. The second phase intended to simplify and streamline the functions of the
departments and employees of ETPI. The abolition of Culili’s department - the Service Quality
Department - and the absorption of its functions by the Business and Consumer Accounts Department
were in line with the program’s goals as the Business and Consumer Accounts Department was more
economical and versatile and it was flexible enough to handle the limited functions of the Service
Quality Department. ETPI averred that since Culili did not avail of the Special Retirement Program and
his position was subsequently declared redundant, it had no choice but to terminate Culili.
Issue: Whether or not an employer is guilty of unfair labor practice because the employee's functions
was sourced out to labor-only contractors.
Ruling:
Unfair labor practice refers to ‘acts that violate the workers' right to organize. The prohibited
acts are related to the workers' right to self-organization and to the observance of a CBA. There should
be no dispute that all the prohibited acts constituting unfair labor practice in essence relate to the
workers' right to self-organization. Thus, an employer may only be held liable for unfair labor practice if
it can be shown that his acts affect in whatever manner the right of his employees to self-organize.
There is no showing that ETPI, in implementing its Right-Sizing Program, was motivated by ill will, bad
faith or malice, or that it was aimed at interfering with its employees’ right to self-organize. In fact, ETPI
negotiated and consulted with ETEU before implementing its Right-Sizing Program.
According to jurisprudence, "basic is the principle that good faith is presumed and he who
alleges bad faith has the duty to prove the same." By imputing bad faith to the actuations of ETPI, Culili
has the burden of proof to present substantial evidence to support the allegation of unfair labor
practice. Culili failed to discharge this burden and his bare allegations deserve no credit.
10. ZEL T. ZAFRA and EDWIN B. ECARMA, petitioners, vs. HON. COURT OF APPEALS,
G.R. No. 139013. September 17, 2002

Zel T. Zafra was hired by PLDT on October 1, 1984 as Operations Analyst II while Edwin B. Ecarma was
hired as Junior Operations Analyst I. In March 1995, petitioners were chosen for the OMC Specialist and
System Software Acceptance Training Program in Germany in preparation for “ALCATEL 1000 S12,” a
World Bank-financed PLDT project in line with its Zero Backlog Program. ALCATEL, the foreign supplier,
shouldered the cost of their training and travel expenses. Petitioners left for Germany on April 10, 1995
and stayed there until July 21, 1995. On July 12, 1995, while petitioners were in Germany, Mr. R. Relucio,
SwitchNet Division Manager, requested advice, through an inter-office memorandum, from the Cebu
and Davao Provincial Managers if any of the training participants were interested to transfer to the
Sampaloc ROMCC to address the operational requirements therein. The transfer was to be made before
the ALCATEL exchanges and operations and maintenance center in Sampaloc would become
operational. Upon petitioners’ return from Germany, a certain Mr. W.P. Acantillado, Senior Manager of
the PLDT Cebu Plant, informed them about the memorandum. They balked at the idea, but PLDT,
through an inter-office memorandum dated December 21, 1995,proceeded to transfer petitioners to the
Sampaloc ROMCC effective January 3, 1996.
ISSUE:
Whether the employees transfer is an absolute right for the employers.
RULING:
The fact that petitioners, in their application for employment, agreed to be transferred or assigned to
any branch should not be taken in isolation, but rather in conjunction with the established company
practice in PLDT. The standard operating procedure in PLDT is to inform personnel regarding the nature
and location of their future assignments after training abroad. The need for the dissemination of notice
of transfer to employees before sending them abroad for training should be deemed necessary and later
to have ripened into a company practice or policy that could no longer be peremptorily withdrawn,
discontinued, or eliminated by the employer. Needless to say, had they known about their pre-planned
reassignments, petitioners could have declined the foreign training intended for personnel assigned to
the Manila office. The lure of a foreign trip is fleeting while a reassignment from Cebu to Manila entails
major and permanent readjustments for petitioners and their families. We are not unaware that the
transfer of an employee ordinarily lies within the ambit of management prerogatives. However, a
transfer amounts to constructive dismissal when the transfer is unreasonable, inconvenient, or
prejudicial to the employee, and involves a demotion in rank or diminution of salaries, benefits, and
other privileges. In the present case, petitioners were unceremoniously transferred, necessitating their
families’ relocation from Cebu to Manila. This act of management appears to be arbitrary without the
usual notice that should have been done even prior to their training abroad. From the employees’
viewpoint, such actions affecting their families are burdensome, economically and emotionally. It is no
exaggeration to say that their forced transfer is not only unreasonable, inconvenient, and prejudicial,
but to our mind, also in defiance of basic due process and fair play in employment relations.
11. EMCO PLYWOOD CORPORATION vs. PERFERIO ABELGAS et. al.
[G.R. No. 148532. April 14, 2004.]
PANGANIBAN, J.:
FACTS: EMCO is a domestic corporation engaged in the business of wood processing, operating through
its sawmill and plymill sections where respondents used to be assigned as regular workers. EMCO,
represented by Lim, informed the DOLE of its intention to retrench some of its workers. The intended
retrenchment was grounded on purported financial difficulties occasioned by alleged lack of raw
materials, frequent machinery breakdown, low market demand and expiration of permit to operate its
sawmill department. A memorandum was thereafter issued by EMCO, addressed to all its foremen,
section heads, supervisors and department heads.
The Labor Arbiter dismissed the claim of the respondent employees. The NLRC affirmed the decision of
the Labor Arbiter. The respondents then filed Petition for Certiorari under Rule 65 with the Court of
Appeals. The CA held that the evidence was insufficient to justify a ruling in favor of EMCO, which had
not complied with the one-month prior notice requirement under the Labor Code. The appellate court
added that the corporation had not served on the employees the required notice of termination.
The CA also held that before EMCO resorted to retrenchment, the latter had failed to adduce evidence
of its losses and to prove that it had undertaken measures to prevent the occurrence of its alleged
actual or impending losses. All in all, the appellate court concluded that the retrenchment was illegal,
because of EMCO's failure to comply with the legal requirements. Hence, this Petition.
ISSUES:
1. Whether or not, the retrenchment was valid and proper;
2. Whether or not, the quitclaim is proper.
HELD:
(1) Retrenchment is one of the authorized causes for the dismissal of employees. Resorted to by
employers to avoid or minimize business losses, it is recognized under Article 283 of the Labor Code.
Not every loss incurred or expected to be incurred by a company will justify retrenchment. The losses
must be substantial and the retrenchment must be reasonably necessary to avert such losses. The
employer bears the burden of proving the existence or the imminence of substantial losses with clear
and satisfactory evidence that there are legitimate business reasons justifying a retrenchment. Should
the employer fail to do so, the dismissal shall be deemed unjustified.
Retrenchment is a management prerogative consistently recognized and affirmed by this Court. It is,
however, subject to faithful compliance with the substantive and the procedural requirements laid
down by law and jurisprudence. It must be exercised essentially as a measure of last resort, after less
drastic means have been tried and found wanting.
(2) Since the retrenchment was illegal and of no effect, the Quitclaims were therefore not voluntarily
entered into by respondents. Their consent was similarly vitiated by mistake or fraud. The law looks with
disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous employers
minded to evade legal responsibilities. As a rule, deeds of release or quitclaim cannot bar employees
from demanding benefits to which they are legally entitled or from contesting the legality of their
dismissal. The acceptance of those benefits would not amount to estoppel.
12. [G.R. No. 106256. December 28, 1994.]
MAYA FARMS EMPLOYEES ORGANIZATION vs. NATIONAL LABOR RELATIONS COMMISSION
FACTS:
KAPUNAN, J p:
1. Private respondents Maya Farms, Inc. and Maya Realty and Livestock Corporation belong to the
Liberty Mills group of companies whose undertakings include the operation of a meat processing plant
which produces ham, bacon, cold cuts, sausages and other meat and poultry products.
2. Petitioners, on the other hand, are the exclusive bargaining agents of the employees of Maya
Farms, Inc. and the Maya Realty and Livestock Corporation.
3. Private respondents announced the adoption of an early retirement program as a cost-cutting

measure considering that their business operations suffered major setbacks over the years.
4. The program was voluntary and could be availed of only by employees with at least eight (8)
years of service.
5. Dialogues were thereafter conducted to give the parties an opportunity to discuss the details of
the program.
6. Accordingly, the program was amended to reduce the minimum requirement of eight (8) years
of service to only five (5) years.\
7. However, the response to the program was nil. There were only a few takers.
8. To avert further losses, private respondents were constrained to look into the companies'
organizational set-up in order to streamline operations. Consequently, the early retirement program
was converted into a special redundancy program intended to reduce the work force to an optimum
number so as to make operations more viable.
9. 69 employees from the two companies availed of the special redundancy program.
10. The two companies sent letters to sixty-six (66) employees informing them that their respective
positions had been declared redundant.
11. The notices likewise stated that their services would be terminated effective thirty (30) days
from receipt thereof.
12. Separation benefits, including the conversion of all earned leave credits and other benefits due
under existing CBAs were thereafter paid to those affected.
13. A notice of strike was filed by the petitioners which accused private respondents, among others,
of unfair labor practice, violation of CBA and discrimination. Conciliation proceedings were held by the
National Conciliation and Mediation Board (NCMB) but the parties failed to arrive at a settlement.
14. Petitioners averred that in the dismissal of sixty-six (66) union officers and members on the
ground of redundancy, private respondents circumvented the provisions in their CBA, more particularly,
Section 2, Article III thereof. Said provision reads: Sec. 2. LIFO RULE. In all cases of lay-off or
retrenchment resulting in termination of employment in the line of work, the Last-In-First-Out (LIFO)
Rule must always be strictly observed.
15. Petitioners also alleged that the companies' claim that they were in economic crisis was
fabricated because in 1990, a net income of over 83 million pesos was realized by Liberty Flour Mills
Group of Companies.
16. Furthermore, with the termination of the sixty-six (66) employees pursuant to the special
redundancy program, the remaining work force, especially the drivers, became overworked and
overburdened so much so that they found themselves doing overtime work and reporting for duty even
during rest days.
17. Invoking the workers' constitutional right to security of tenure, petitioners prayed for the
reinstatement of the sixty-six (66) employees and the payment of attorney's fees as they were
constrained to hire the services of counsel in order to protect the workers' rights.
18. Private respondents contend that their decision to implement a special redundancy program
was an exercise of management prerogative which could not be interfered with unless it is shown to be
tainted with bad faith and ill motive.
19. Public respondent rendered a decision confirming the legality of the separation of the 66
employees of management thereby dismissing the charges of violation of CBA and unfair labor practice
on the part of management.
20. Not satisfied with the above-quoted decision, petitioners interposed the instant petition.
ISSUE: Whether (a) the termination of the sixty-six (66) employees was in accordance with Article 283 of
the Labor Code; (b) the termination of the sixty-six (66) employees was in accordance with the LIFO rule
in the CBA; and (c) the payment or offer of payment can substitute for the 30-day required notice prior
to termination. 5
HELD:
(a) YES. The termination of the sixty-six employees was done in accordance with Article 283 of the Labor
Code. The basis for this was the companies' study to streamline operations so as to make them more
viable. Positions which overlapped each other, or which are in excess of the requirements of the service,
were declared redundant.
Article 283 provides:
Art. 283. Closure of establishment and reduction of personnel. — The employer may also
terminate the employment of any employee due to the installation of labor-saving devises, redundancy,
retrenchment to prevent losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing in the provisions of this title, by
serving a written notice on the workers and the Department of Labor and Employment at least one (1)
month before the intended date thereof. In case of retrenchment to prevent losses of operations of
establishment or undertaking not due to serious business losses or financial reverses, the one (1) month
pay or at least one-half (½) pay for every year of service, whichever is higher. A fraction of at least six (6)
months shall be considered one (1) whole year.
We fully agree with the findings and conclusions of the public respondent on the issue of termination.
A close examination of the positions retained by management show that said positions such as egg
sorter, debonner were but the minimal positions required to sustain the limited functions/operations of
the meat processing department. In the absence of any evidence to prove bad faith on the part of
management in arriving at such decision, which records on hand failed to show in instant case, the
rationality of the act of management in this regard must be sustained. While it may be true that the
Liberty Flour Mills Group of Companies as a whole posted a net income of P83.3 Million, it is admitted
that with respect to operations of the meat processing and livestock which were undertaken by herein
companies sustained losses in the sum of P2,257,649.88 (Exh. '3'). This is the reason, as advanced by
management, for its decision to streamline positions resulting in the reduction of manpower
compliment (sic). 9
(b) YES. The NLRC correctly held that private respondents did not violate the LIFO rule under Section 2,
Article III of the CBA which provides:
It is not disputed that the LIFO rule applies to termination of employment in the line of work. 12 Verily,
what is contemplated in the LIFO rule is that when there are two or more employees occupying the
same position in the company affected by the retrenchment program, the last one employed will
necessarily be the first to go.
In the case under consideration, specifically with respect to Maya Farms, several positions were affected
by the special involuntary redundancy program. These are packers, egg sorters/stockers, drivers. In the
case of packers, prior to the involuntary redundancy program, twenty-one employees occupied the
position of packers. Out of this number, only 5 were retained. In this group of employees, the earliest
date of employment was October 27, 1969, and the latest packer was employed in 1989. The most
senior employees occupying the position of packers who were retained are as follows: Santos, Laura C.
(Oct. 27, 1969), Estrada, Mercedes(Aug. 20, 1970), Hortaleza, Lita (June 11, 1971), Jimenez,
Lolita(April 25, 1972), Aquino, Teresita (June 25, 1975). All the other packers employed after June 2,
1975 (sic) were separated from the service.
The same is true with respect to egg sorters. The egg sorters employed on or before April 26, 1972 were
retained. All those employed after said date were separated.
With respect to the position of drivers, there were eight drivers prior to the involuntary redundancy
program. Thereafter only 3 positions were retained. Accordingly, the three drivers who were most
senior in terms of period of employment, were retained.
The case of Roberta Cabrera and Lydia C. Bandong, Asst. Superintendent for packing and Asst.
Superintendent for meat processing respectively was presented by the union as an instance where the
LIFO rule was not observed by management. The union pointed out that Lydia Bandong who was
retained by management was employed on a much later date than Roberta Cabrera, and both are
Assistant Superintendent. We cannot sustain the union's argument. It is indeed true that Roberta
Cabrera was employed earlier (January 28, 1961) and (sic) Lydia Bandong (July 9, 1966). However, it is
maintained that in meat processing department there were 3 Asst. Superintendents assigned as head of
the 3 sections thereat. The reason advanced by the company in retaining Bandong was that as Asst.
Superintendent for meat processing she could 'already take care of the operations of the other sections.'
The nature of work of each assistant superintendent as well as experience were taken into account by
management. Such criteria was not shown to be whimsical nor carpricious (sic) 13 (Emphasis supplied).
(c) Finally, contrary to petitioners' contention, there is nothing on record to show that the 30-day notice
of termination to the workers was disregarded and that the same substituted with separation pay by
private respondents. As found by public respondent, written notices of separation were sent to the
employees on January 17, 1992. The notices expressly stated that the termination of employment was
to take effect one month from receipt thereof. Therefore, the allegation that separation pay was given
in lieu of the 30-day notice required by law is baseless.
13. AILEEN G. HERIDA v. F & C PAWNSHOP and JEWELRY STORE/MARCELINO FLORETE, JR
G.R. No. 172601, April 16, 2009
Facts:
Petitioner Aileen G. Herida was hired as a sales clerk and eventually promoted as an appraiser in the
Bacolod City Branch. Eventually, she was directed to report to the Guanco Branch in Iloilo City but
petitioner refused to follow the directive. Thus, she was preventively suspended from work on August
10, 1998 for a period of 15 days effective August 7, 1998. She was also directed to report to her new
assignment on August 24, 1998. September 7, 1998, management terminated her services on the
grounds of willful disobedience, insubordination and abandonment of work as well as gross violation of
company policy
Issue:
WON petitioners transfer from the Bacolod City Branch to the Iloilo City Branch was valid management
prerogative.
Held:
Jurisprudence recognizes the exercise of management 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.
As respondents creditably explained, and as admitted by petitioner herself, respondents have standing
policies that an employee must be single at the time of employment and must be willing to be assigned
to any of its branches in the country. Petitioner’s contention that upon getting married, she no longer
bound herself to be assigned to any of respondents branches in the country is preposterous. Just
because an employee gets married does not mean she can already renege on a commitment she
willingly made at the time of her employment particularly if such commitment does not appear to be
unreasonable, inconvenient, or prejudicial to her.
We have long stated that 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 is not a valid
reason to disobey an order of transfer.
14. PT&T vs CA Case Digest
[G.R. No. 152057. September 29, 2003.]
FACTS: Petitioner, after conducting a series of studies regarding the profitability of its retail operations,
its existing branches and the number of employees, the petitioner came up with a Relocation and
Restructuring Program designed to (a) sustain its (PT&T's) retail operations; (b) decongest surplus
workforce in some branches, to promote efficiency and productivity; (c) lower expenses incidental to
hiring and training new personnel; and (d) avoid retrenchment of employees occupying redundant
positions. On August 11, 1997, private respondents received separate letters from the petitioner, giving
them the option to choose the branch to which they could be transferred. Thereafter, through HRAG
Bulletin No. 97-06-16, the private respondents and other petitioner's employees were directed to
"relocate" to their new PT&T Branches. The affected employees were directed to report to their
respective relocation assignments in a Letter dated September 16, 1997. Moreover, the employees who
would agree to the transfers would be considered promoted.
The private respondents rejected the petitioner's offer. Petitioner, then, sent letters to the private
respondents requiring them to explain in writing why no disciplinary action should be taken against
them for their refusal to be transferred/relocated. In their respective replies to the petitioner's letters,
the private respondents explained that: The transfers imposed by the management would cause
enormous difficulties on the individual complainants. For one, their new assignment involves distant
places which would require their separation from their respective families. Dissatisfied with this
explanation, the petitioner considered the private respondents' refusal as insubordination and willful
disobedience to a lawful order; hence, the private respondents were dismissed from work. 8 They
forthwith filed their respective complaints against the petitioner before the appropriate sub-regional
branches of the NLRC.
In their position paper, the complainants (herein private respondents) declared that their refusal to
transfer could not possibly give rise to a valid dismissal on the ground of willful disobedience, as their
transfer was prejudicial and inconvenient; thus unreasonable. The private respondents further opined
that since their respective transfers resulted in their promotion, they had the right to refuse or decline
the positions being offered to them. Resultantly, the refusal to accept the transfers could not have
amounted to insubordination or willful disobedience to the "lawful orders of the employer."
For its part, the company alleged that the private respondents' transfers were made in the lawful
exercise of its management prerogative and were done in good faith. The transfers were aimed at
decongesting surplus employees and detailing them to a more demanding branch.
ISSUE: Whether or not the private respondents were illegally dismissed.
HELD: The Supreme Court ruled that an employee cannot be promoted, even if merely as a result of a
transfer, without his consent. A transfer that results in promotion or demotion, advancement or
reduction or a transfer that aims to 'lure the employee away from his permanent position cannot be
done without the employees' consent. There is no law that compels an employee to accept a promotion
for the reason that a promotion is in the nature of a gift or reward, which a person has a right to refuse.
Hence, the exercise by the private respondents of their right cannot be considered in law as
insubordination, or willful disobedience of a lawful order of the employer. As such, there was no valid
cause for the private respondents' dismissal.
Decision of the CA affirmed.
15. G.R. No. 137863. March 31, 2005
BPI EMPLOYEES UNION AND ZENAIDA UY vs. BPI, CARLOS FRAGANTE, DELFIN SANTOS, ALBERTO JUGO
AND/OR OSCAR CONTRERAS
CHICO-NAZARIO, J.:
Facts: Zenaida V. Uy, former teller of the Escolta Branch of BPI, shouted at her Senior Manager, Delfin D.
Santos (Santos). Uy was told to discuss her complaint Carlos B. Fragante, BPI’s area head and Assistant
Vice President who told her to transfer to the nearby Plaza Cervantes Branch of BPI and report to its
operations manager to defuse the tense situation prevailing at the Escolta Branch. Fragante received the
report Santos on the shouting incident, together with the written letter-reports of some branch
personnel. Fragante ordered Uy to transfer to the Plaza Cervantes Branch but Uy commented that she
will not transfer and will await the result of the grievance meeting. BPI Employees Union initiated a
grievance proceeding against the BPI Management for the transfer of Uy. Fragante sent Uy a letter to
explain within 24 hours why no disciplinary action should be taken against her for insubordination, for
not paying heed to the order to transfer. Uy replied that she could not transfer because there was no
proper turnover of her accountabilities; that she was not able to do so because she was not allowed to
open (as a teller); and, that since then she has been barred from entering the bank premises. A
grievance meeting was held but no agreement was reached. Fragante sent Uy another letter asking her
to explain why no disciplinary action should be taken against her for uttering disrespectful, discourteous,
insulting and unbecoming language to her superior. Uy sent an undated reply reiterating why she could
just not leave her position and requested that she be considered on leave. Fragante wrote Uy another
letter directing her to show cause why no disciplinary action, including possible termination, should be
taken against her for the incident, for insubordination or defiance to the transfer order, and for going on
absence without leave. A copy thereof was furnished the Union. Uy sent a reply asking for particulars
relative to the alleged “highly disrespectful, discourteous, insulting, threatening, and unbecoming
language and behavior towards your Manager, Delfin Santos” and on the alleged “past instances when
she was involved with quarrels with your co-employees,” and alleging that she felt was being sexually
harassed when he uttered “You just stay here, there are plenty of men here”, and when she answered,
“I am not fond of men”, he retorted, “You may just stay here in my room.” The union asked for a
suspension of the grievance machinery and for investigation of the “sexual harassment” charge. Uy
requested Management through Mr. Oscar L. Cervantes, for transfer to the Taft Avenue Branch to save
on gasoline expenses. Two meetings were held between the Union side and the management side,
represented by Mr. Fragante’s superior, Senior Vice President Alberto Jugo and Senior Manager Efren
Tuble. When no agreement was reached, the management advised Uy and the Union as well as their
counsel that the management had no choice but to terminate Uy. Both the union and Uy were sent
copies of the Notice of Termination on the grounds of gross disrespect/discourtesy towards an officer,
insubordination and absence without leave.
Uy filed a case for illegal transfer and termination, Labor Arbiter ruled in favor of her. When BPI
appealed, the NLRC set aside the Decision for lack of jurisdiction, and ruled that the case falls under the
jurisdiction of a Voluntary Arbitrator.
The Voluntary Arbitrator adjudged in favor of Uy and ordered BPI to reinstate her and to pay her full
backwages computed from the time she was dismissed until she is actually reinstated including all her
other benefits which are benefits under their CBA and attorney’s fees.
Aggrieved, they then filed a Petition for Review before the Court of Appeals which affirmed the finding
of the Voluntary Arbitrator. However, the award for backwages was modified by limiting it to three
years as well as finding that there was strained relations between the parties.
Issue/s: WON the limiting of the award of backwages to three (3) years is contrary to law and
jurisprudence.
WON there is strained relations between the parties.
Held: The three-year-limit doctrine has been consistently and uniformly applied by this Court over many
years until the promulgation of Republic Act No. 6715 which amended Article 279 of the Labor Code in
1989.
In Osmalik Bustamante, et al. v. NLRC and Evergreen Farms, Inc. We held that the passing of R.A. No.
6715, particularly Section 34, amended Article 279 of the Labor Code, which now states in part:
ART. 279. Security of Tenure. - … 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.
Verily, the evident legislative intent as expressed in Rep. Act No. 6715, above-quoted, is that the
backwages to be awarded to an illegally dismissed employee, should not, as a general rule, be
diminished or reduced by the earnings derived by him elsewhere during the period of his illegal
dismissal. The underlying reason for this ruling is that the employee, while litigating the legality
(illegality) of his dismissal, must still earn a living to support himself and his family. Corollary thereto, full
backwages have to be paid by the employer as part of the price or penalty he has to pay for illegally
dismissing his employee. Thus, a closer adherence to the legislative policy behind Rep. Act. No. 6715
points to “full backwages” as meaning exactly that, i.e., without deducting from backwages the earnings
derived elsewhere by the concerned employee during the period of his illegal dismissal. In other words,
the provision calling for “full backwages” to illegally dismissed employees is clear, plain and free from
ambiguity and, therefore, must be applied without attempted or strained interpretation.
Consequently, in accordance with Section 34, Rep. Act No. 6715, employees illegally dismissed after 21
March 1989 are entitled to their “full backwages,” inclusive of other benefits or their monetary
equivalent, from the time their actual compensation was withheld from them up to the time of their
actual reinstatement.
In Globe-Mackay Cable and Radio Corp. v. NLRC:
Obviously, the principle of “strained relations” cannot be applied indiscriminately. Otherwise,

reinstatement can never be possible simply because some hostility is invariably engendered between
the parties as a result of litigation. That is human nature.
Besides, no strained relations should arise from a valid and legal act of asserting one’s right; otherwise
an employee who shall assert his right could be easily separated from the service, by merely paying his
separation pay on the pretext that his relationship with his employer had already become strained.
In PLDT, et al. v. Tolentino,the ruling in Quijano v. Mercury Drug Corp was reiterated :
Well-entrenched is the rule that an illegally dismissed employee is entitled to reinstatement as a matter
of right. Over the years, however, the case law developed that where reinstatement is not feasible,
expedient or practical, as where reinstatement would only exacerbate the tension and strained relations
between the parties, or where the relationship between the employer and employee has been unduly
strained by reason of their irreconcilable differences, particularly where the illegally dismissed employee
held a managerial or key position in the company, it would be more prudent to order payment of
separation pay instead of reinstatement. Some unscrupulous employers, however, have taken
advantage of the overgrowth of this doctrine of “strained relations” by using it as a cover to get rid of its
employees and thus defeat their right to job security.
To protect labor’s security of tenure, we emphasize that the doctrine of “strained relations” should be
strictly applied so as not to deprive an illegally dismissed employee of his right to reinstatement. Every
labor dispute almost always results in “strained relations” and the phrase cannot be given an
overarching interpretation, otherwise, an unjustly dismissed employee can never be reinstated.
It has been almost a decade since the incident that led to the dismissal of Uy occurred. Carlos Fragante
has long been assigned in another area and Messrs. Alberto Jugo and Oscar Contreras are no longer
connected with BPI. It now appears that there’s no more basis for strained relations between the
present management and petitioner Uy, reinstatement is possible.
WHEREFORE, the instant petition is GRANTED. 1) BPI is DIRECTED to pay petitioner Uy backwages from
the time of her illegal dismissal until her actual reinstatement; and 2) BPI is ORDERED to reinstate
petitioner Uy to her former position, or to a substantially equivalent one, without loss of seniority right
and other benefits attendant to the position.
16. Globe-Mackay Cable and Radio Corporation (GMRC), Petitioner Vs.National Labor Relations
Commission (NLRC) and Imelda Salazar, Respondents
G.R. No. 82511, March 3, 1992
Facts:
Private Respondent, "Imelda Salazar" was employed as general systems analyst of Globe-Mackay Cable
and Radio Corp. (GMRC) While Delfin Saldivar, her close friend, was employed as technical operations'
support manager in May 1982.
Petitioner GMRC investigated Saldivar's activities due to the reports indicating that the company
equipment and spare parts were in custody of Saldivar. The internal audit report also indicated that
Saldivar entered into a partnership with Richard A. Yambao, owner and manager of Eledon Engineering
Services (Elecon), a supplier often recommended by Saldivar to the petitioner. It also appeared in the
course of Maramara's investigation that Imelda Salazar violated company regulations by involving
herself in transactions with conflict of interest with the company. Evidence showed that she signed as a
witness to the articles of partnership between Yambao and Saldivar, and that she had full knowledge of
the loss and whereabouts of the missing air conditioner but she failed to inform her employer.
The Company placed Salazar under 1 month preventive suspension, allowing her 30 days within which to
explain her side. However, Salazar instead filed a complaint against petitioner for illegal suspension,
which was later modified to illegal dismissal.
The Labor arbiter ordered the company to reinstate Salazar to her former and equivalent position and to
pay her full back wages and benefits, plus moral damages. National Labor Relations Commission (NLRC)
affirmed the labor arbiter's decision but limited back wages for only two years and deleted the award of
moral damages.
Issue:
Whether or Not the action of dismissal would constitute a violation of Art. 279 of the Labor Code, which
protects the security of tenure of an employee.
Held:
Positive. The Court did not agree on the petitioner's action of suspension and eventual dismissal of
Salazar due to lack of evidence to show that Salazar was involved with the malicious activities of
Saldivar.
The wordings of the Labor Code is clear and unambiguous "An employee who is unjustly dismissed from
work shall be entitled to reinstatement and full back wages." Under the principle of Statutory
Construction, if a statute is clear, plain and free from ambiguity. It must be given its literal meaning and
applied without attempted interpretation. The plain meaning rule or Verba Legis derived from the
maxim "Speech is the index of intention" should be applied in this case.
Since there is no evidence to show an authorized or legal dismissal, and GMRC only relied to an internal
audit findings, Salazar, according to the Labor Code, is entitled to reinstatement and full back wages
allowed by the Court.
17. G.R. No. 189366 : December 8, 2010
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner, v. EUSEBIO M. HONRADO,Respondent.
FACTS:
Respondent Eusebio Honrado was an employee of petitioner Philippine Long Distance Telephone
Company (PLDT). Spouses Pete A. Mueda and Rodrigo H. Mueda went to PLDTs Quality Control Division
(QCD) to verify their application for telephone because according to them, a person named Rony
Hipolito who introduced himself as a PLDT employee went to their house and told them that he is the
area inspector assigned therein and thatthey can pay directly to him since he is a PLDT employee and
that the balance can be paid to PLDT. Spouses Mueda further stated that because of this, they paid
HipolitoP1,500.00 as partial payment for the installation of their new telephone line.At the QCD,
Spouses Mueda found out that the act of Hipolito in soliciting and receivingP1,500.00 as down payment
for installation of a new telephone line is against the policy of herein petitioner. So, in order to ascertain
the identity of Rony Hipolito, Mr. Domosthenes J. Yap, QCD Investigator together with Mrs. Mueda,
conducted a stake out operation at the PLDT North Paraque Exchange. When herein private respondent
Honrado handed hisTripAuthorizationPass(TAP for brevity) to the guard on duty at the gate of the PLDT
North Paraque Exchange, he was positively identified by Mrs. Mueda as the person who solicited and
received the money from her and her husband. After due hearing, private respondent was notified that
he was found liable as charged, hence, dismissed from service. Consequently, respondent Honrado filed
a complaint for illegal dismissal with the Labor Arbiter. The LA dismissed the complaint. On appeal, the
NLRC set aside the decision of the LA. The CA affirmed the ruling of the NLRC.
ISSUE: Whether or not respondent was illegally dismissed.
HELD:
Court of Appeals decision is reversed. The requisites for a valid dismissal are:(a)theemployee must be
afforded due process,i.e., he must be given an opportunity to be heard and defend himself; and (b)
thedismissal must be for a valid causeas provided in Article 282 of the Labor Code or for any of the
authorized causes under Articles 283 and 284 of the same Code.
In the instant case, a confrontation proceeding between respondent Honrado and the therein
complainant Mrs. Pete A. Mueda was conducted at petitioners QCD office.At the said proceeding, Mrs.
Mueda declared the circumstances surrounding the complaint against the respondent and more
significantly identified the respondent in a line-up.Upon the identification of the respondent as the
person who solicited, collected and received the downpayment for the purported installation of therein
complainants telephone service, respondent was apprised of the charges against him as well as his
rights. Thereafter, respondent was notified by way of an Inter-Office Memodated June 8, 2000 of the
formal charges against him and was required to explain in writing why he should not be dismissed for
serious misconduct.On June 15, 2000, respondent filed an Inter-Office Memodenying all the allegations
imputed against him and requested for a formal hearing with the assistance of his lawyer and a Union
official. Subsequently, respondent Honrado received, through Inter-Office Memo dated February 13,
2001, a Notice of Termination informing him that after a careful evaluation of his case, he was found
liable as charged and dismissed from the service due to gross misconduct.
The quantum of proof required in determining the legality of an employees dismissal is only substantial
evidence.The standard of substantial evidence is met where the employer, as in this case, has
reasonable ground to believe that the employee is responsible for the misconduct and his participation
in such misconduct makes him unworthy of the trust and confidence demanded by his position.
GRANTED
18. G.R. No. 153784 October 25, 2005
ROMEO C. CADIZ, CARLITO BONGKINGKI and PRISCO GLORIA IV, Petitioners, vs. COURT OF APPEALS, and
PHILIPPINE COMMERCIAL INTERNATIONAL BANK (Now EQUITABLE PCIBANK),Respondents.
FACTS
Petitioners Romeo Cadiz, Carlito Bongkingki and Prisco Gloria IV were employed as signature verifier,
bookkeeper, and foreign currency denomination clerk/bookkeeper-reliever, respectively, in the main
office branch (MOB) of Philippine Commercial International Bank.
The anomalies in question arose when Rosalina B. Alqueza filed a complaint with PCIB for the alleged
non-receipt of a ($600.00) demand draft drawn against it which was purchased by her husband from
Hongkong and Shanghai Banking Corporation. Upon verification, it was uncovered that the demand draft
was deposited on 10 June 1988 with FCDU Savings Account (S/A) No. 1083-4, an account under the
name of Sonia Alfiscar . Further investigation revealed that the demand draft, together with (4) other
checks, was made to appear as only one deposit covered by HSBC Check No. 979120 for (US$1,232.00).
The Branch Manager (Sandig), presided meetings, wherein Cadiz, Bongkingki and Gloria allegedly
verbally admitted their participation in a scheme to divert funds intended for other accounts using the
Savings Account of Alfiscar. Subsequently, Cadiz allegedly paid Alqueza P12,690.00, the peso equivalent
of US$600, but insisted that the corresponding receipt be issued in Alfiscar’s name instead.
On account of these allegations, a special audit examination was conducted by the bank. The internal
auditors of the bank, submitted their findings in an official report. The auditors determined that as early
as July 1987, petitioner Cadiz had reserved the savings account in the name of Sonia Alfiscar. The
account was opened on 27 November 1987 and closed on 23 June 1988. (25) deposit slips involving the
account were posted by Bongkingki while (16) deposit slips were posted by Gloria. A verification of the
deposit slips yielded findings of miscoded checks, forged signatures, non-validation of deposit slips by
the tellers, wrongful deposit of second-endorsed checks into foreign currency deposit accounts, the
deposit slips which do not bear the required approval of bank officers, and withdrawals made either on
the day of deposit or the following banking day.
In view of such findings, show-cause memoranda were served on petitioners, requiring them to explain
within (72) hours why no disciplinary action should be taken against them in connection with the results
of the special audit examination. Petitioners submitted their written explanations. Not satisfied with
their explanations, respondent bank in memoranda dismissed petitioners from employment for violation
of Article III Section 1 B-2 and Article III Section 1-C of the Code of Discipline.
Petitioners lodged a complaint before the labor arbiter for illegal dismissal.
Labor Arbiter adjudged that petitioners were illegally dismissed and ordered their reinstatement and
payment of backwages. A perusal of the labor arbiter’s Decision reveals a different perspective from
which the case was approached. While the labor arbiter conceded that petitioners Bongkingki and Gloria
had miscoded several deposit slips, rendering them immediately withdrawable, he characterized the
errors as "mere procedural inadequacies" which were preventable had management exercised greater
control over its employees.
The labor arbiter’s Decision was reversed on appeal before the (NLRC), which, in a Decision ordered the
dismissal of the petition. Dismissed With Just Cause. The general thesis as laid down by the NLRC and
Court of Appeals is that petitioners had surreptitiously diverted funds deposited by depositors to S/A
No. 1083-4 which was under their control and disposition.
ISSUE:
Whether or not the Court of Appeals erred in dismissing the petition
HELD: NO
Far from petitioners’ thrust, the miscoding of deposit slips cannot be downplayed as "mere procedural
inadequacies." After all, it is such miscoding that precipitated the fraudulent withdrawals in the first
place. The act operated as the first indispensable step towards the commission of fraud on the bank.
More disturbing though is the labor arbiter’s willingness to acquit petitioners of culpability on account of
the purported negligence of the bank. It is similar to concluding that the bank guards, and not the
burglars, bear primary culpability for a bank robbery. Whatever liability or responsibility was expected of
the bank stands as an issue separate from the liability of the recreant bank employees. Even assuming
that the bank observed less-than-ideal controls over the security of its operations, such laxity does not
serve as the carte blanche signal for the bank employees to take advantage of safeguard control lapses
and perpetrate chicanery on their employer.
First, petitioners insist that the show-cause memoranda served on them did not impute any fraudulent
behavior, but merely lapses. We disagree.
The show-cause memoranda were occasioned by the confidential report prepared by Sandig, as well as
the findings of the special audit examination. The confidential report pertains to the discovery of
fraudulent transactions on S/A No.1083-4 involving three employees of respondent bank. The report
detailed how the events transpired, including the admissions of petitioners. From there, a special audit
examination was conducted to make a thorough investigation of the questioned account. The
examination yielded conspicuous findings that anomalous transactions had taken place involving
petitioners.
Second, petitioners contend that they should be relieved of any liability considering that respondent
bank did not suffer a pecuniary loss. This claim must obviously fail.
There is jurisprudential support, as noted by the Court of Appeals in citing University of the East v. NLRC
that lack of material or pecuniary damages would not in any way mitigate a person’s liability nor
obliterate the loss of trust and confidence. In the case of Etcuban v. Sulpicio Lines,19 this Court
definitively ruled that:
. . . Whether or not the respondent bank was financially prejudiced is immaterial. Also, what matters is
not the amount involved, be it paltry or gargantuan; rather the fraudulent scheme in which the
petitioner was involved, which constitutes a clear betrayal of trust and confidence. . . .
Moreover, it cannot be discounted that as bank employees, the responsibilities of petitioners are
impressed with a high degree of public interest. Private persons entrust their fortunes to banks, and it
would cause a breakdown of the financial order if the judicial system were to leave unsanctioned bank
employees who treat depositor’s accounts as their own private kitty.
Still, petitioners insist that respondent bank never lost trust and confidence in them as it did not place
them under preventive suspension, and more tellingly, it even promoted them after the labor arbiter
had ordered their reinstatement. Preventive suspension, which is never obligatory on the part of the
employer, may be resorted to only when the continued employment of the employee poses "a serious
and imminent threat to the life or property of the employer or of his co-workers." The bank points out
that the Alfiscar account, through which the anomalous transactions were coursed, was no longer active
at the time the fraud was discovered. Clearly, the bank had reason to conclude that the imminence of
the threat posed by the employees was not as vital as it would have been had the dubious account still
been open.
Moreover, it would simply be temerarious for the Court to sanction the reinstatement of bank
employees who have clearly engaged in anomalous banking practices. The particular fiduciary
responsibilities reposed on banks and its employees cannot be emphasized enough. The fiduciary nature
of banking is enshrined in Republic Act No. 8791 or the General Banking Law of 2000. Section 2 of the
law specifically says that the State recognizes the "fiduciary nature of banking that requires high
standards of integrity and performance." The bank must not only exercise "high standards of integrity
and performance," it must also ensure that its employees do likewise because this is the only way to
ensure that the bank will comply with its fiduciary duty.
All given, we affirm the conclusion that petitioners were dismissed for just cause. Loss of trust and
confidence is one of the just causes for termination by employer under Article 282 of the Labor Code.
The breach of trust must be willful, meaning it must be done intentionally, knowingly, and purposely,
without justifiable excuse. Ideally, loss of confidence applies only to cases involving employees
occupying positions of trust and confidence or to those situations where the employee is routinely
charged with the care and custody of the employer’s money or property. Utmost trust and confidence
are deemed to have been reposed on petitioners by virtue of the nature of their work.
The facts as established, as well as the need to assert the public interest in safeguarding against bank
fraud, militate against the present petition.
WHEREFORE, the Petition is hereby DENIED and the assailed Decision of the Court of Appeals AFFIRMED.
Costs against petitioners.
SO ORDERED.

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Labor Final Case digest

1. Moises De Leon v. NLRC and La Tondeña (G.R. No. 70705)

Whether or not petitioner De Leon is a regular employee of respondent.

2. HACIENDA FATIMA vs NATIONAL FEDERATION OF SUGARCANE WORKERS-FOOD AND GENERAL

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3. MAGSALIN vs NATIONAL ORGANIZATION OF WORKING MEN Case Digest

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[G.R. No. 141717. April 14, 2004]

5. BRENT SCHOOL vs. ZAMORA (G.R. No. L-48494 - February 5, 1990)

An employment shall be deemed to be casual if it is not covered by the preceding paragraph:provided,

7. Millares v. NLRC [G.R. No. 110524, March 14, 2000]

G.R. No. 165381 February 9, 2011

G.R. No. 139013. September 17, 2002

Whether the employees transfer is an absolute right for the employers.

11. EMCO PLYWOOD CORPORATION vs. PERFERIO ABELGAS et. al.

[G.R. No. 148532. April 14, 2004.]

1. Whether or not, the retrenchment was valid and proper;

2. Whether or not, the quitclaim is proper.

12. [G.R. No. 106256. December 28, 1994.]

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3. Private respondents announced the adoption of an early retirement program as a cost-cutting

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13. AILEEN G. HERIDA v. F & C PAWNSHOP and JEWELRY STORE/MARCELINO FLORETE, JR

G.R. No. 172601, April 16, 2009

14. PT&T vs CA Case Digest

[G.R. No. 152057. September 29, 2003.]

ISSUE: Whether or not the private respondents were illegally dismissed.

Decision of the CA affirmed.

15. G.R. No. 137863. March 31, 2005

WON there is strained relations between the parties.

In Globe-Mackay Cable and Radio Corp. v. NLRC:

Obviously, the principle of “strained relations” cannot be applied indiscriminately. Otherwise,

G.R. No. 82511, March 3, 1992

17. G.R. No. 189366 : December 8, 2010

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner, v. EUSEBIO M. HONRADO,Respondent.

ISSUE: Whether or not respondent was illegally dismissed.

18. G.R. No. 153784 October 25, 2005

Whether or not the Court of Appeals erred in dismissing the petition

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